Volt Information Sciences Reports Fiscal 2014 Results
Reports Strong Improvement in Operating Results

 
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Operating profit of $4.8 million in fiscal 2014 from a loss of $7.3 million in 2013
 
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Proforma operating profit of $2.1 million in fiscal 2014 from a loss of $13.3 million in 2013
 
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Exited several non-core businesses in 2014 to enhance profitability

New York, NY, January 15, 2015 – Volt Information Sciences, Inc. (NYSE-MKT: VISI) today reported financial results for its fiscal year and fourth quarter ended November 2, 2014.  The reported net loss for fiscal year 2014 was $19.0 million, or $0.91 per share, compared with $30.9 million, or $1.48 per share, in 2013.  Operating results from continuing operations improved $12.1 million in 2014 to income of $4.8 million from a loss of $7.3 million in 2013. Including Unrecognized Revenue, proforma operating results from continuing operations improved $15.4 million in 2014 to proforma operating income of $2.1 million from a proforma loss of $13.3 million in 2013. Proforma amounts include Unrecognized Revenue (defined below).

“Consistent with our primary goal of a more highly focused and profitable Volt, we have now exited our software businesses.  Each of these had significant upfront capital investments with extended payback periods and were producing significant losses, and we are now concentrating on our core staffing and services businesses that have similar profitability, risks and returns on capital,” said Ron Kochman, President and Chief Executive Officer. “We have also made substantial progress in adjusting our expense structure, and are pleased with our improvements to operating income. We continue to focus on streamlining costs and are well positioned to increase profitability in the future, particularly when revenues increase.”

Fiscal Year 2014 Operating Results and Revenue

Net loss in 2014 of $19.0 million (proforma $21.7 million) included restatement, investigations and remediation  expenses of $5.3 million, restructuring costs of $2.5 million ($0.5 million reflected in corporate general and administrative), losses from discontinued operations of $15.6 million, a $1.0 million cost in our workers compensation program related to multiple previous years, and a $1.4 million true-up of non-U.S. income taxes related to multiple previous years. Without these items net income in 2014 would have been $6.8 million and proforma net income $4.1 million.

Net loss in 2013 of $30.9 million (proforma $37.0 million) included restatement, investigations and remediation expenses of $24.8 million, restructuring costs of $0.8 million, losses from discontinued operations of $18.1 million, a $3.0 million indirect tax recovery related to multiple years, and approximately $1.1 million of operating income from the 53rd week in 2013. Without these items net income in 2013 would have been $8.7 million and proforma net income $2.6 million.

Excluding the $3.0 million multi-year indirect tax recovery and approximately $1.1 million from the 53rd week in 2013, the Staffing Services segment operating income and direct margin percentage improved as a result of decreased administrative and other operating costs, the reorganization of the traditional staffing business, the divestiture of the Vendor Management Software business, and management’s continuing initiative to reduce exposure to customers with unfavorable business terms and improved results in Volt’s call center, games testing and other project-based staffing services.  Increased or flat direct margin percentages were achieved in each quarter of 2014 compared to the comparative quarter in 2013.

Net revenue from continuing operations in 2014 decreased approximately 15% compared to 2013 and in the Staffing Services segment decreased approximately 16% as a result of lower demand primarily at large enterprise customers and management’s continuing initiative to reduce exposure to customers with unfavorable business terms, and the impact of 2014 consisting of 52 weeks while 2013 consisted of 53 weeks. However, a modest increase in average daily revenue was achieved sequentially in both the third and fourth quarters of 2014, marking the first two sequential quarterly increases since the company began its initiative to exit or reduce business levels with customers where profitability or business terms are unfavorable.

As previously reported, the Company sold its Computer Systems segment in the first quarter of fiscal 2015. The results of the Computer Systems segment are presented as discontinued operations and, as such, have been excluded from continuing operations and from segment results for all periods presented.
 
 
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The following information was filed by Volt Information Sciences, Inc. (VISI) on Friday, January 16, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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