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Volt Results

Volt Results

Volt Information Sciences, Inc has reported financial results for the Companys second quarter and six months ended May 3, 2009. For the second quarter of fiscal 2009 ended May 3, 2009, the Company reported a net loss of $8.7 million, compared to net income of $3.4 million, in the fiscal 2008 second quarter. Net sales from continuing operations for the 2009 quarter decreased to $447.1 million, compared to $605.1 million in last years comparable quarter.

The Company reported a loss from continuing operations in the second quarter of fiscal 2009 of $8.7 million, compared to income from continuing operations of $1.3 million, in the fiscal 2008 second quarter. As previously announced during the second quarter, the Company consolidated operations within its Staffing Services segment to reduce redundancies and achieve economies of scale and efficiencies. As a result of these changes, which included office consolidations, the segment incurred a restructuring charge of $4.5 million in the second quarter of fiscal 2009. In addition, the Computer Systems segment recorded an impairment charge of $1.2 million based upon its annual testing, in the second quarter of fiscal 2009, of goodwill and intangibles.

Commenting on the results for the second quarter, Mr. Steven A. Shaw, President and CEO of Volt, stated The Company is taking actions necessary to align our costs with the declines in revenue caused by the current economic environment. The $4.5 million restructuring charge taken in the quarter is the result of combining the Technical and Administrative and Industrial divisions of the Staffing Services segment. This consolidation allows us to continue to provide a complete set of workforce solutions to our customers while significantly reducing operating costs on a go-forward basis.

STAFFING SERVICES
The $121.8 million, or 24%, decrease in net sales in the second quarter of fiscal 2009 from the comparable fiscal 2008 period was due to a $111.8 million decrease in the Staffing Solutions division and a $10.0 million decrease in the Technology and Consulting division which consists of the Procurestaff and VMC Consulting operations. The segment reported an operating loss of $1.0 million for the second quarter of fiscal 2009 compared to an operating profit of $6.2 million in the comparable fiscal 2008 period. The decrease in operating profit was due to a $13.1 million decrease in the Staffing Solutions divisions operating profit, partially offset by a $5.9 million increase in the Technology and Consulting divisions operating profit.

The decreases in sales and operating profit in the Staffing Solutions division were due to the economic downturn and the divisions consolidation of operations which resulted in a $4.3 million restructuring charge in the second quarter of fiscal 2009. Many of the divisions customers have initiated layoffs, hiring freezes and reductions in contingent labor which resulted in lower sales for the quarter. In addition, operating profit was affected by reduced gross margins due to lower markups.

Despite the decrease in sales in the Technology and Consulting division, the increase in this divisions operating profit was due the absence of several VMC Consulting projects which incurred losses in the prior comparable period and lower overhead due to staff reductions and a restructuring charge of $0.2 million, as well as the absence in the second quarter of fiscal 2009 of start up costs for several new projects.

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