Volt Information Sciences reports Q1 results
The company reported a net loss in the first quarter of 2014 of $17.1 million, or $0.82 per share, unchanged from the first quarter of 2013.
On a proforma basis the company reported a net loss in the first quarter of 2014 of $16.0 million compared to a proforma net loss in the first quarter of 2013 of $19.6 million.
“At the beginning of the quarter we reorganized our traditional staffing services business to better facilitate efficiency and profitability, and we are continuing our initiative to exit or reduce staffing business levels with customers where profitability or business terms are unfavorable. While we are disappointed at the lower demand levels at a few of our large customers compared to last year that was the primary cause of lower staffing segment operating income, we are pleased that our initiatives resulted in higher margin ratios and traditional staffing costs that decreased largely consistent with the lower revenues” said Ron Kochman, President and Chief Executive
“We divested ProcureStaff, our VMS business, as this business no longer met our return parameters for growth and profitability. These are steps in an ongoing process as we seek to prioritize profitability over topline growth, creating greater value for our shareholders. We are also pleased to report that Volt’s first quarter 2014 earnings results will be filed on schedule for the first time since 2009, a significant achievement in the company’s multi-year financial restatement and remediation process.”
Net revenue in the first quarter of fiscal 2014 decreased $83.1 million to $437.1 million from $520.2 million in fiscal 2013, and proforma net revenue decreased $79.4 million or 15.3% to $438.3 million from $517.7 million in fiscal 2013. The change in revenue was the result of decreased Staffing Services revenues of $82.1 million (proforma of $78.4 million) resulting primarily from fewer contingent workers on assignment at a few large customers whose current demand levels are lower than in the prior year, lower revenues resulting from our exit of
certain customers as part of our continued focus on exiting or reducing business levels with customers where profitability or business terms are unfavorable, slightly lower managed services revenue, and $3.7 million higher net staffing Unrecognized Revenue (defined below). In addition, Computer Systems revenues decreased $4.7 million from several large directory assistance implementations reaching the end of the maintenance periods over which the projects were being amortized, lower transaction volumes, and lower pricing and maintenance levels. These
decreases were partially offset by higher information technology infrastructure services revenue driven primarily by new customers and to a lesser extent from net expanded business with existing customers at billing rates that remained relatively consistent between the periods, and a $1.2 million deferral of revenue in 2013.
Operating loss in the first quarter of fiscal 2014 of $15.0 million included restatement, investigations and remediation costs of $4.7 million and restructuring costs of $1.4 million as we reduced headcount in response to lower revenue levels and the sale of our vendor management system software related assets. Without these items we would have had an operating loss of $8.9 million and a proforma loss of $7.8 million. Operating loss in the first quarter of fiscal 2013 of $16.8 million included restatement, investigations and remediation costs of $13.8 million, a
$3.0 million indirect tax recovery related to multiple years and restructuring costs of $0.7 million as we reduced headcount in response to lower revenue levels. Without these items we would have had operating loss of $5.3 million and a proforma operating loss of $7.8 million. The changes in operating loss and proforma operating loss in the first quarter of fiscal 2014 from 2013 were due to the above reasons and a $4.2 million impact from lower Staffing Services revenue.