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Volt net revenue falls 12% in fiscal Q2

June 10, 2015

Volt Information Sciences Inc. (NYSE MKT: VISI) reported net revenue fell 11.7% to $385.2 million in its fiscal second quarter ended May 3. Staffing services represent a majority of Volt’s revenue at $362.3 million; staffing services revenue fell 10.9% compared to the same quarter last year.

The company cited lower demand for technical skill sets and, to a lesser degree, lower demand for non-technical administrative and light industrial skill sets. Revenue also decreased, according to the company, partially because of continued focus on reducing business with customers where profitability or contract terms were unfavorable.

(US$ thousands) Q2 2015  Q2 2014  % growth
Net revenue $385,189 $436,080 -11.7%
Gross margin 15.6% 15.4%  
Net loss -$6,913 -$3,495 nm

The net loss 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.

Volt sold its computer systems segment to NewNet Communication Technologies LLC 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.

In March, James Whitney Mayhew stepped down as CFO and the company named former Reader’s Digest exec Paul Tomkins to the post. And following its annual meeting of shareholders held in May, Volt revamped its board composition and committee assignments per an agreement with shareholder group Glacier Peak Capital LLC and its affiliates.

Quote

"I am pleased with our progress as we work towards our goal of becoming a more highly focused and profitable company,” said President and CEO Ron Kochman. "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,” Kochman said. "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."

Share price and market cap

Shares in Volt fell 13.43% to $8.96 in early afternoon trading; Volt has a market cap of approximately $186.51 million, according to Yahoo!