Volt Extends Finance
Volt Extends Finance
Volt Information Sciences Reports Update on Short-Term Financing Program and Provides Update on Business Performance during the Fiscal Second Quarter and First Six Months 2013
Volt Information Sciences, Inc. has announced the extension to December 31, 2013 of the financing facility and the requirement to provide audited financial statements for its fiscal years 2011 and 2012 under its Short-Term Financing Program. The underlying borrowing agreement was also extended to December 31, 2014 from its previous July 31, 2014 expiration date. The Company's Short-Term Financing Program provides for borrowing secured by receivables related to its staffing services business.
The Company also today provided a business update and reported selected unaudited financial information for its fiscal second quarter and first fiscal six months of 2013 ended April 28, 2013. The Company noted that due to the previously announced on-going accounting review and the recent restatement of prior year’s filed with the Fiscal 2010 Form 10-K, all numbers presented in this release are estimates.
The Staffing Services Segment, which accounts for a majority of the Company's total revenue, had approximately $473 million of revenue in the second quarter 2013, a decrease of approximately $45 million compared to the same period in 2012. The second quarter of 2012 included recognition of approximately $12 million of previously deferred revenue, net of current period deferrals. Adjusting to recognize deferred revenue on a proforma basis in the period the related expenses were incurred, Staffing Services segment proforma net revenue decreased by approximately $30 million or 5.9%, from $506 million to $476 million for the three-month period.
For the first six months of 2013, the Staffing Services Segment had approximately $948 million of revenue, a decrease of approximately $48 million compared to the same period in fiscal 2012. Adjusting to recognize deferred revenue on a proforma basis in the period the related expenses were incurred, Staffing Services segment proforma net revenue decreased by approximately $34 million or 3.5%, from $982 million to $948 million for the six month period.
The decrease in revenues for both the three and six month periods was primarily due to the Company's strategic initiative to review customer accounts for profitability and renegotiate or exit unprofitable customer accounts and for the six month period a reduction in associate vendor staff on assignment. These decreases were partially offset by additional revenues from new and existing customers at lower average bill rates.
The Telecommunications Services segment reported a small operating loss for the second quarters and first six months of both 2013 and 2012 while close to breakeven results were reported from the Other segment for the second quarters of both 2013 and 2012, and a small operating profit compared to close to breakeven operating results for the Other segment in the first six months of both fiscal years. Revenue for the Computer Systems segment will be reported after the ongoing audits are completed and comprehensive financial reports filed.
During the first six months of fiscal 2013, the Company disbursed approximately $23 million in connection with the restatement and related investigations, generated approximately $23 million from all other operating activities, increased borrowings under the Company's short-term financing program by approximately $10 million (to approximately $130 million) and used approximately $4 million for capital expenditures. The Company's restricted cash used as collateral for foreign currency borrowings and banking facilities decreased by approximately $4 million. The approximately $130 million drawn under the Company's short-term financing program was subsequently increased to approximately $145 million in July 2013.
On April 28, 2013, the Company had cash and cash equivalents of approximately $36 million and an additional approximately $31 million of cash restricted as collateral for foreign currency credit lines and banking facilities. The Company also had approximately $20 million available from its short-term financing program. Excluding approximately $9 million of non-current debt, the Company's consolidated borrowings were approximately $156 million at April 28, 2013, which included approximately $22 million of foreign currency borrowings used to hedge net investments in foreign subsidiaries that are fully collateralized by restricted cash, and approximately $130 million drawn under the $150 million short-term financing program. As previously announced, the credit available under the short-term financing program was increased to $200 million in May 2013. The Company believes that it has sufficient liquidity to meet its business requirements at current levels.