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Volt Information Sciences reports Q2 dip in income

The reported net loss for the second quarter of fiscal 2015 was $6.9 million, or $0.33 per share, compared with $3.5 million, or $0.16 per share, in the second quarter of 2014. Operating results from continuing operations for the second quarter of 2015 decreased $9.0 million to an operating loss from continuing operations of $4.1 million from operating income from continuing operations of $4.9 million in the second quarter of 2014.

Loss from continuing operations in the second quarter of 2015 of $6.9 million included special items related to impairments of $5.4 million, foreign exchange loss of $1.6 million and other special items of $1.9 million, including the settlement of a lawsuit, shareholder and board related costs and restructuring charges. Excluding the impact of these special items of $8.9 million, income from continuing operations for the second quarter of 2015 would have been $2.0 million.

Staffing Services segment operating income in the second quarter of 2015 of $5.9 million included $1.2 million of special items related to an impairment charge of $1.0 million and restructuring costs of $0.2 million. Excluding the impact of these special items, Staffing Services segment operating income would have been $7.1 million.

As previously reported, the Company sold its Computer Systems segment in the first quarter of fiscal 2015. The loss from discontinued operations, net of taxes was $4.9 million in the second quarter of 2014.

Income from continuing operations in the second quarter of 2014 of $1.4 million included special items related to restructuring costs of $1.0 million ($0.3 million reflected in corporate general and administrative), a loss related to foreign exchange rates of $0.6 million and restatement, investigations and remediation expenses of $0.6 million. Excluding these special items, income from continuing operations in the second quarter of 2014 would have been $3.6 million.

Staffing Services segment operating income in the second quarter of 2014 of $7.5 million included $0.6 million of special items related to restructuring costs. Excluding the impact of this special item, Staffing Services segment operating income would have been $8.1 million.

“I am pleased with our progress as we work towards our goal of becoming a more highly focused and profitable company,” said Ron Kochman, President and Chief Executive Officer. “While I am disappointed with our overall revenue performance, some of the decline in our revenues, as well as the sequential decline in our average daily revenues in our North American staffing business, were due to our own actions to exit unprofitable business and our disciplined approach to new customer acquisition. Although I am pleased with our progress on these fronts, our revenues were also impacted by softer demand trends and delayed projects with some customers. We understand that we must bend the curve on revenue and we believe that we are poised to do so as we had some nice client wins in the quarter. We are pleased to have our new board of directors in place and consistent with our commitment to exit non-core operations to divest our Uruguayan Printing and Publishing and Volt Telecommunications businesses as we continue to focus our operations, infrastructure, and business practices to deliver superior client service and work towards our strategic goals.”

“In the second quarter, year-over-year reported income from continuing operations was down $8.3 million and included a number of special items,” said Paul Tomkins, chief financial officer. “Our operational performance excluding special items would have been $2.0 million, or $1.6 million below the same period last year. We anticipate that our results will normalize as we continue to focus on our core operations and execute our strategy, including our initiatives to reduce complexity, identify and address inefficiencies, and continue to make prudent choices to simplify the organization. We are also committed to improving our operating cash flow and strengthening our balance sheet. Overall, our efforts are ongoing and will take some time, but we believe that improving our business processes and upgrading our operational tools is a business imperative and will contribute to our longer-term growth, profitability, and cash flow, and improve shareholder value.”

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