EX-99.1 2 a5572298ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Volt Information Sciences Reports Fourth Quarter and Fiscal Year Results NEW YORK--(BUSINESS WIRE)--Dec. 20, 2007--Volt Information Sciences, Inc. (NYSE: VOL) today reported financial results for the Company's fourth quarter and fiscal year ended October 28, 2007. Volt will conduct a conference call webcast at 11:00 A.M. (EST) today to discuss fourth quarter results. The conference call dial-in number is 1-800-857-3793 (domestic) or 1-210-234-0005 (international), passcode: Fourth Quarter. The conference call will be broadcast live over the Internet and can be accessed for the next 30 days at http://www.volt.com/investor/press_releases.cfm. Attached is a summary of the Company's results of operations and the notes thereto. The notes are an integral part of the summary. FOURTH QUARTER - FISCAL 2007 RESULTS For the fourth quarter of fiscal 2007 ended October 28, 2007, net income increased by 70% to $23.1 million, or $1.03 per share, compared to $13.6 million, or $0.57 per share, in the fourth quarter of fiscal 2006. Net sales for the fourth quarter of fiscal 2007 increased by 3% to $625.6 million, compared to $610.2 million in last year's comparable quarter. FISCAL YEAR 2007 RESULTS For fiscal year 2007, the Company reported net income of $39.3 million, or $1.71 per share, compared to $30.7 million, or $1.31 per share, last year. Net sales for fiscal year 2007 increased by 1% to $2.4 billion, compared to $2.3 billion in fiscal 2006. Commenting on the results for the fourth quarter, Mr. Steven A. Shaw, President and Chief Executive Officer of Volt, stated "The results of the fourth quarter continued the trend we reported in the third quarter, with our Telecommunication Services and Computer Systems segments delivering strong year over year comparisons, which, combined with the improved performance of the Telephone Directory segment, were the primary drivers for our growth in quarterly earnings, while the Staffing segment continues to be challenged with ongoing margin pressure in Technical Placement and softness in Administrative and Industrial revenue. In addition, we closed the acquisition of LSSi during the quarter in the Computer Systems segment and expect the combination of Volt Delta's application development, integration and hosting expertise and LSSi's highly efficient data processing will allow Volt Delta to serve a broader base of customers by aggregating the most current and accurate business and consumer information possible." FOURTH QUARTER - FISCAL 2007 RESULTS - BY SEGMENT STAFFING SERVICES The segment reported an operating profit of $21.1 million on net sales of $501.5 million in the fourth quarter of fiscal 2007, compared to an operating profit of $23.2 million on net sales of $513.1 million in the prior year. The sales decrease was primarily due to a $12.1 million reduction in the Administrative and Industrial division. Sales in the Technical Placement division remained constant at $342 million as increases in traditional staffing business were offset by a decline in VMC Consulting business. The decrease in operating profit was the result of increased overhead associated with newer business offerings, including direct placement and RPO services together with increased general liability insurance costs, partially offset by an increase in gross margins due to lower workers' compensation insurance costs and payroll taxes. The operating profit of the Administrative and Industrial division was $4.9 million in the fourth quarter of fiscal 2007 compared to $5.3 million in the prior year and the Technical Placement division's operating profit was $16.2 million this year compared to $17.9 million in last year's fourth quarter. COMPUTER SYSTEMS The segment reported an operating profit of $14.0 million on net sales of $60.2 million in the fourth quarter of fiscal 2007, compared to an operating profit of $6.8 million on net sales of $48.2 million in the comparable prior year period. The sales increase is primarily due to increases in previously deferred project revenue recognized and the Maintech division's IT maintenance sales, as well as incremental transaction revenue due to the LSSi Corp. ("LSSi") acquisition in September 2007. The increase in operating profit was the result of the increased sales and gross margin percentages due to the mix of business. In September 2007, Volt Delta Resources, LLC ("Volt Delta"), the principal business unit of the Computer Systems segment, acquired LSSi for $70.0 million and combined it and its DataServ division into LSSiData. Sales and pre-tax income of LSSi approximated $28.0 million and $5.0 million, respectively, for the twelve months prior to the acquisition. Although Volt Delta expects there to be operational efficiencies of approximately $8 million to $10 million on an annual basis by eliminating duplicative data procurement and processing costs, the segment will incur a charge to earnings in fiscal 2008 of between $2.5 and $3.0 million. The acquisition is expected to become accretive to earnings in the second quarter of fiscal year 2008. Substantially all of the merger consideration was attributable to goodwill and intangible assets. TELEPHONE DIRECTORY The segment reported an operating profit of $7.9 million on net sales of $25.2 million in the fiscal 2007 fourth quarter, compared to an operating profit of $5.3 million on net sales of $24.9 million in the comparable prior year period. The slight increase in sales was primarily due to an increase in telephone directory publishing sales due to the timing of the delivery of directories partially offset by decreases in printing sales in Uruguay. The increase in operating profit is attributable to improved gross margin percentages due to the sales mix. TELECOMMUNICATIONS SERVICES The segment reported an operating profit of $4.3 million on net sales of $42.8 million in the fourth quarter of fiscal 2007 compared to an operating loss of $1.7 million on net sales of $28.9 million in the comparable prior year period. The improvement in profitability was due to the increased sales and higher margins generated by an increase in utility projects and the ramping up of a major telco services contract. GENERAL CORPORATE EXPENSES General corporate expenses decreased by $0.7 million, or 7%, in the fourth quarter of fiscal 2007 primarily due to lower depreciation expense than the comparable fiscal 2006 quarter. CASH AND CASH EQUIVALENTS Cash and cash equivalents, excluding restricted cash, was $40.4 million at the end of the quarter. At October 28, 2007, the Company had sold a participating interest in accounts receivable of $120.0 million under its securitization program and had the ability to finance an additional $80.0 million under the facility. In addition, the Company may borrow under a secured $40.0 million revolving credit facility ("Credit Facility") and the Company's wholly owned subsidiary, Volt Delta Resources ("Volt Delta"), may borrow under a separate $100.0 million revolving secured credit facility ("Delta Credit Facility"). At October 28, 2007, $78.2 million was drawn under the Delta Credit Facility, of which $6.2 million was borrowed in foreign currencies. Volt Information Sciences, Inc. is a leading national provider of Staffing Services and Telecommunications and Information Solutions with a Fortune 100 customer base. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services systems for telephone companies. For additional information, please visit Volt's web site at http://www.volt.com. This press release contains forward-looking statements which are subject to a number of known and unknown risks, including general economic, competitive and other business conditions, the degree and timing of customer utilization and the rate of renewals of contracts with the Company, that could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Company reports filed with the Securities and Exchange Commission. Copies of the Company's latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission and the New York Stock Exchange, are available without charge upon request to Volt Information Sciences, Inc., 560 Lexington Avenue, New York, New York 10022, 212-704-2400, Attention: Shareholder Relations. These and other SEC filings by the Company are also available to the public over the Internet at the SEC's website at http://www.sec.gov and at the Company's website at http://www.volt.com in the InvestorRelations/Corporate Governance section. VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF OPERATIONS (UNAUDITED) FOURTH QUARTER ENDED FISCAL YEAR ENDED October 28, October 29, October 28, October 29, 2007 2006 2007 2006 ------------------------------------------------ (In thousands, except per share data) Net sales $ 625,616 $ 610,220 $ 2,353,082 $ 2,338,453 ================================================ Income before minority interest and income taxes $ 35,748 $ 21,434 $ 62,214 $ 51,569 Minority interest 6 - 6 (1,021) ------------------------------------------------ Income before income taxes 35,754 21,434 62,220 50,548 Income tax provision (12,659) (7,870) (22,888) (19,898) ------------------------------------------------ Net income $ 23,095 $ 13,564 $ 39,332 $ 30,650 ================================================ Per Share Data Net income - basic $ 1.03 $ 0.58 $ 1.71 $ 1.32 ================================================ Net income - diluted $ 1.03 $ 0.57 $ 1.71 $ 1.31 ================================================ Weighted average number of shares outstanding - basic 22,431 23,409 22,935 23,227 ================================================ Weighted average number of shares outstanding - diluted 22,479 23,605 22,985 23,388 ================================================ (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) FOURTH QUARTER ENDED FISCAL YEAR ENDED October 28, October 29, October 28, October 29, 2007 2006 2007 2006 ----------- ----------- ------------ ------------ Net Sales: (Dollars in thousands) --------------------- Staffing Services -- Note A Traditional Staffing $ 489,255 $ 500,583 $ 1,922,263 $ 1,915,649 Managed Services 308,271 302,500 1,212,915 1,109,315 ----------- ----------- ------------ ------------ Total Gross Sales 797,526 803,083 3,135,178 3,024,964 Less: Non-Recourse Managed Services (295,982) (289,988) (1,164,243) (1,052,682) ----------- ----------- ------------ ------------ Net Staffing Services 501,544 513,095 1,970,935 1,972,282 Telephone Directory 25,248 24,914 80,775 79,351 Telecommunications Services 42,815 28,903 119,712 118,862 Computer Systems 60,183 48,214 199,314 187,930 Elimination of inter- segment sales (4,174) (4,906) (17,654) (19,972) ----------- ----------- ------------ ------------ Total Net Sales $ 625,616 $ 610,220 $ 2,353,082 $ 2,338,453 =========== =========== ============ ============ Income (Loss) Before Minority Interest and Income Taxes Staffing Services $ 21,083 $ 23,226 $ 53,598 $ 58,799 Telephone Directory 7,897 5,307 17,059 15,828 Telecommunications Services 4,328 (1,707) 4,977 (1,168) Computer Systems 14,037 6,815 31,676 28,447 ----------- ----------- ------------ ------------ Total Segment Operating Profit 47,345 33,641 107,310 101,906 General corporate expenses (9,918) (10,667) (39,770) (43,350) ----------- ----------- ------------ ------------ Total Operating Profit 37,427 22,974 67,540 58,556 Interest income and other (expense) (724) (1,325) (1,293) (4,663) Interest expense (1,292) (417) (3,612) (1,819) Foreign exchange gain (loss) -net 337 202 (421) (505) ----------- ----------- ------------ ------------ Income Before Minority Interest and Income Taxes $ 35,748 $ 21,434 $ 62,214 $ 51,569 =========== =========== ============ ============ (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (Unaudited) October 28, October 29, 2007 2006 ----------- ----------- Assets (Dollars in thousands) Current Assets Cash and cash equivalents $ 40,398 $ 38,481 Restricted cash - Note A 25,482 30,713 Short-term investments 5,624 4,709 Trade receivables, net - Note B 417,115 390,799 Inventories 59,950 28,735 Deferred income taxes 10,031 9,167 Prepaid and other assets 39,927 37,280 ----------- ------------ Total Current Assets 598,527 539,884 Property, plant and equipment, net 74,709 74,135 Insurance and other assets 6,648 2,247 Goodwill - Note C 98,715 50,896 Other intangible assets, net - Note C 53,829 31,959 ----------- ------------ Total Assets $832,428 $ 699,121 =========== ============ Liabilities and Stockholders' Equity Current Liabilities Notes payable to banks $ 84,111 $ 4,639 Current portion of long-term debt 510 470 Accounts payable 214,799 190,431 Accrued wages and commissions 64,049 59,387 Accrued taxes other than income taxes 22,440 20,186 Accrued insurance and other accruals 32,715 29,241 Deferred income and other liabilities 33,076 37,519 Income taxes payable 4,822 3,626 ----------- ------------ Total Current Liabilities 456,522 345,499 Accrued insurance - 4,760 Long-term debt 12,316 12,827 Deferred income taxes 11,011 10,787 Minority interest 43 - Stockholders' Equity - Note D 352,536 325,248 ----------- ------------ Total Liabilities and Stockholders' Equity $832,428 $ 699,121 =========== ============ (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) A- Under certain contracts with customers, the Company manages the customers' alternative staffing requirements, including transactions between the customer and other staffing vendors ("associate vendors"). When payments to associate vendors are subject to the receipt of the customers' payment to the Company, the arrangements are considered non-recourse against the Company and revenue, other than management fees to the Company, is excluded from sales. Cash restricted to cover such obligations is segregated from cash and cash equivalents on the balance sheet. B- Under a securitization program, the receivables related to the staffing solutions business of the Company are sold from time- to-time by the Company, through a 100%-owned consolidated special purpose subsidiary to an unaffiliated third party. The outstanding balance of the participation interest sold was $120.0 million and $110.0 million at October 28, 2007 and October 29, 2006, respectively. Accordingly, the trade receivables included on the October 28, 2007 and October 29, 2006 balance sheets have been reduced to reflect the participation interest sold. C- In September 2007, Volt Delta Resources, LLC ("Volt Delta"), the principal business unit of the Computer Systems segment, acquired LSSi Corp. for $70.0 million and combined it and its DataServ division into LSSiData. Volt Delta expects there to be significant synergies between the operations and for the acquisition to become accretive to earnings in the second quarter of fiscal year 2008. In September 2007, the Company also purchased an 80% interest for $1.5 million in an outsourcing and services provider that will compliment existing services in the Staffing Services segment. In December 2005, Volt Delta purchased from Nortel Networks, Inc. its 24% minority interest in Volt Delta and also purchased Varetis Solutions GmbH from varetis AG. D- On December 19, 2006, the Company's Board of Directors authorized and approved a three-for-two stock split in the form of a dividend on the Company's common stock, par value $.10 per share. Shares of common stock were distributed on January 26, 2007, to all stockholders of record as of January 15, 2007. Share amounts and per share data have been adjusted to reflect the stock split. CONTACT: Volt Information Sciences, Inc. Jack Egan and Ron Kochman, 212-704-2400 voltinvest@volt.com