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View All NewsVolt net revenue falls 16% in fiscal Q4
Volt Information Sciences Inc. (NYSE MKT: VISI) reported net revenue fell 15.5% in its fiscal fourth quarter ended Oct. 29. On a same-store and constant currency basis, net revenue fell 11.3% year over year, excluding net revenue contributed from businesses sold or exited during the past year.
| (US$ thousands) | Q4 2017 | Q4 2016 | % growth |
| Net revenue | $288,483 | $341,578 | -15.5% |
| Gross margin | $47,667 | $56,927 | -16.3% |
| Gross margin percentage | 16.5% | 16.7% | |
| Net income | $38,081 | $2,787 | nm |
The New York-based IT and engineering staffing and MSP provider reported net income of $38.1 million compared to $2.8 million in the prior year. The quarter included $3.1 million of restructuring and severance costs and settlement charges, offset by a $52.0 million gain on the sale in March of Maintech and the sale in the fourth quarter of its quality assurance testing business, known as VMC, to Keywords International Limited, a technical services provider to the global video games industry.
Volt in October entered into a settlement agreement with NewNet Communication Technologies LLC, and the company’s affiliate Volt Delta Resource Holdings Inc., related to the company’s 2014 sale of its Computer Systems segment, Volt Delta, to NewNet. The company received $5 million cash from NewNet of as well as a $1.0 million promissory note maturing no later than Jan. 31.
Quote
“The turnaround strategy that we have executed over the past two years has successfully helped us address many of Volt’s operational challenges and we have a strong foundation from which we continue to build,” said President and CEO Michael Dean. “During this time, we have dramatically simplified our operating structure through the sale of non-core assets, which has strengthened our balance sheet and liquidity position. At the same time, we have also been successful in streamlining our cost structure and gross margins continue to improve.”
Segment revenue
| (US$ thousands) | Q4 2017 | Q4 2016 | % growth |
| North American staffing | $224,219 | $255,160 | -12.1% |
| International staffing | $30,163 | $31,730 | -4.9% |
| Technology Outsourcing Services and Solutions | $26,354 | $30,533 | -13.7% |
| Corporate and other | $9,654 | $27,571 | -65.0% |
| Eliminations | ($1,907) | ($1,831) |
North America staffing services revenue fell 12.1% from the year-ago quarter, primarily driven by lower demand from customers in both professional and commercial job families, as well as customers experiencing decreased demand for their services and changes in their staffing models.
International staffing services revenue — which includes the company’s contingent staffing, direct placement and managed programs businesses in Europe and Asia — fell 4.9%. Volt said the decline was partially a result of softening economic demand in the UK.
“Corporate and other revenue,” which primarily consists of the company’s North American managed service business fell 65.0%, primarily driven by the impact from the sale of Maintech in March. On a same store basis, excluding businesses sold or exited, the decline was 3.6%.
Total net revenue for the full year of fiscal 2017 fell 10.5%.
Full-year results
| (US$ thousands) | 2017 | 2016 | % growth |
| Net revenue | $1,194,436 | $1,334,747 | -10.5% |
| Gross margin | $187,395 | $202,494 | -7.5% |
| Gross margin percentage | 15.7% | 15.2% | |
| Net income/loss | $27,132 | ($14,570) | nm |
Share price and market cap
Shares in Volt fell 4.88% to $3.90 as of 12:25 p.m. Eastern time. The company had a market cap of $81.9 million.