Volt Information Sciences Reports Fourth Quarter and Fiscal Year Results
New York, NY, January 17, 2014 – Volt Information Sciences, Inc. (OTC: VISI) today reported financial results for its fiscal fourth quarter and fiscal year ended November 3, 2013. The Company reported net income in the fourth quarter of 2013 of $1.6 million, or $0.08 per share, compared to a net loss of $2.0 million, or $0.10 per share, in the fourth quarter of 2012, and a proforma net loss in the fourth quarter of 2013 of $0.3 million compared to a proforma net loss in the fourth quarter of 2012 of $4.4 million. For the full fiscal year the Company reported a net loss in 2013 of $30.9 million, or $1.48 per share compared to a net loss of $13.6 million, or $0.65 per share, in fiscal 2012.
Non-GAAP Proforma Measures – Unrecognized Revenue – Volt subsidiaries sometimes provide services despite a customer arrangement not yet being finalized, or continue to provide services under an expired arrangement while a renewal arrangement is being finalized. Generally Accepted Accounting Principles (“GAAP”) usually requires that services revenue be deferred until arrangements are finalized or in some cases until cash is received, which causes some periods to include the expense of providing services although the related revenue is not recognized until a subsequent period (“Unrecognized Revenue”). The following discussion refers to financial data determined both using GAAP as well as on a non-GAAP proforma basis. The non-GAAP proforma basis includes adjustments for Unrecognized Revenue so that revenue is shown in the same period as the related services are provided. This non-GAAP financial information is used by management and provided herein primarily to provide a more complete understanding of the Company’s business results and trends. In addition, the Company believes that lenders, analysts and others in the investment community use this non-GAAP financial information to assess the Company’s historical results, and that failure to report this non-GAAP measure could result in a potentially misplaced perception that the Company’s results have either met, exceeded or underperformed expectations. This non-GAAP information should not be considered an alternative for, or in isolation from, the financial information prepared and presented in accordance with GAAP. In addition, this measure may not be comparable to similarly titled measures used by other companies.
Fourth Fiscal Quarter Results
Operating income of $2.8 million in the fourth quarter of 2013 included restructuring costs of $2.8 million, restatement and associated investigation expenses of $2.5 million and recognition of previously deferred software systems revenues and costs, net of current period deferrals, of $4.6 million. Without these items the Company would have had operating income of $3.5 million and a proforma operating income of $1.6 million.
Operating loss in the fourth quarter of fiscal 2012 of $0.5 million included restatement and associated investigation expenses of $14.9 million, recognition of previously deferred software systems revenues and costs, net of current period deferrals, of $1.3 million and a gain on the sale of building of $4.4 million. Without these items the Company would have had operating income of $8.7 million and proforma operating income of $6.3 million.
In addition to the above, operating results and proforma operating results decreased in the fourth quarter of 2013 over 2012 due to a decrease in Computer Systems results of approximately $6.0 million due to lower transaction volumes, pricing and maintenance levels with relatively fixed costs and investment in developing the Company’s directory assistance software platform into full-featured call center software, partially offset by an increase in Staffing Services results of approximately $0.7 million primarily due to higher traditional staffing margins.
Net revenue in the fourth quarter of 2013 decreased $24.8 million to $546.8 million from $571.6 million in 2012, and proforma net revenue decreased by $24.3 million, or 4.3%, to $544.9 million from $569.2 million in the fourth quarter of 2012. The change in revenue was primarily the result of decreased Staffing Services revenues by $26.2 million (proforma of $25.7 million) resulting from the Company’s increased focus on exiting or reducing business levels with customers where profitability or business terms are unfavorable, lower staffing levels at a few large customers related to their particular business demand level, slightly lower managed services revenue, and from lower Computer Systems revenues from several large implementations reaching the end of the maintenance periods over which the projects were being amortized and lower transaction volumes, pricing and maintenance levels.