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Volt publishes fiscal third quarter & first 9 months report

Volt Information Sciences yesterday provided a business update and reported selected unaudited financial information for its fiscal third quarter and first fiscal nine months of 2013 ended July 28, 2013. The Company notes that all numbers presented in this release are subject to change until the current audits are complete.

The Staffing Services Segment, which accounts for a majority of the Company's total revenue, had approximately $460 million of revenue in the third quarter 2013, a decrease of approximately $49 million compared to the same period in 2012, although with higher operating income. The third quarter of 2013 included recognition of approximately $6 million of previously deferred revenue, net of current period deferrals. Staffing Services segment proforma net revenue, which adjusts recognized revenue to the period related expenses were incurred, decreased by approximately $54 million, or 10.7%, from $508 million to $454 million for the three-month period, although with similar proforma operating income.

For the first nine months of 2013, the Staffing Services Segment had approximately $1.4 billion of revenue, a decrease of approximately $100 million compared to the same period in fiscal 2012. Staffing Services segment proforma net revenue, which adjusts recognized revenue to the period related expenses were incurred, decreased by approximately $90 million, or 6.0%, from $1.5 billion to $1.4 billion for the nine month period.

The decrease in staffing services revenues for both the three and nine month periods was primarily due to the Company's increased focus on achieving acceptable operating income and exiting or reducing business levels with customers where profitability or business terms are unfavorable, as well as reduced sales at a few large customers related to their particular business demand levels. As a result, as compared to a year ago staffing services revenue levels are lower although staffing services operating income increased for the third quarter as both a percentage of revenue and in absolute amount. Staffing services operating income for the nine-month period compared to a year ago is lower as direct and indirect delivery costs were reduced along with revenues but reductions in sales and marketing as well as general and administrative costs lagged revenue decreases. Additionally, revenues from call center, games testing and other project-based revenue are lower compared to a year ago due to net reduced business from existing customers and lower games testing volumes due to delayed console releases from the major games hardware vendors.

The Telecommunications Services segment reported a small operating loss for the third quarter 2013 and first nine months of 2013 and 2012 and a small operating income for the third quarter 2012. The Other segment reported an operating income in the third quarter 2013 primarily due to the recognition of previously deferred revenue and increased business compared to breakeven operating results in the third quarter of 2012, and a small operating income compared to breakeven results in the first nine months of fiscal years 2013 and 2012, respectively. Revenue for the Computer Systems segment will be reported after the ongoing audits are completed and comprehensive financial reports filed.

Liquidity

During the first nine months of fiscal 2013, the Company disbursed approximately $35 million in connection with the restatement and related investigations (with substantially all such costs now disbursed), generated approximately $13 million from all other operating activities, used approximately $7 million for capital expenditures, and increased borrowings under the short-term financing program by approximately $20 million. Restricted cash used as collateral for foreign currency borrowings and banking facilities decreased by approximately $4 million. 

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