|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended
July 29, 2018
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
|
|
New York
|
13-5658129
|
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer Identification No.)
|
1133 Avenue of Americas, New York, New York
|
10036
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Large accelerated filer
¨
|
Accelerated filer
x
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Emerging growth company
¨
|
|
|
|
|
|
|
(Do not check if a smaller reporting company)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||||
NET REVENUE
|
$
|
257,808
|
|
|
$
|
289,924
|
|
|
$
|
774,365
|
|
|
$
|
905,953
|
|
|
Cost of services
|
221,448
|
|
|
244,205
|
|
|
664,695
|
|
|
766,225
|
|
|||||
GROSS MARGIN
|
36,360
|
|
|
45,719
|
|
|
109,670
|
|
|
139,728
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|||||||||
Selling, administrative and other operating costs
|
42,222
|
|
|
46,931
|
|
|
132,076
|
|
|
146,992
|
|
|||||
Restructuring and severance costs
|
3,108
|
|
|
249
|
|
|
3,730
|
|
|
1,072
|
|
|||||
Impairment charge
|
—
|
|
|
—
|
|
|
155
|
|
|
290
|
|
|||||
Gain from divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,938
|
)
|
|||||
TOTAL EXPENSES
|
45,330
|
|
|
47,180
|
|
|
135,961
|
|
|
144,416
|
|
|||||
OPERATING LOSS
|
(8,970
|
)
|
|
(1,461
|
)
|
|
(26,291
|
)
|
|
(4,688
|
)
|
|||||
OTHER INCOME (EXPENSE), NET
|
|
|
|
|
|
|
|
|||||||||
Interest income (expense), net
|
(552
|
)
|
|
(976
|
)
|
|
(1,965
|
)
|
|
(2,725
|
)
|
|||||
Foreign exchange gain (loss), net
|
(294
|
)
|
|
(1,730
|
)
|
|
(88
|
)
|
|
(1,419
|
)
|
|||||
Other income (expense), net
|
(296
|
)
|
|
(277
|
)
|
|
(879
|
)
|
|
(1,187
|
)
|
|||||
TOTAL OTHER INCOME (EXPENSE), NET
|
(1,142
|
)
|
|
(2,983
|
)
|
|
(2,932
|
)
|
|
(5,331
|
)
|
|||||
LOSS BEFORE INCOME TAXES
|
(10,112
|
)
|
|
(4,444
|
)
|
|
(29,223
|
)
|
|
(10,019
|
)
|
|||||
Income tax provision
|
1,306
|
|
|
1,074
|
|
|
576
|
|
|
930
|
|
|||||
NET LOSS
|
$
|
(11,418
|
)
|
|
$
|
(5,518
|
)
|
|
$
|
(29,799
|
)
|
|
$
|
(10,949
|
)
|
|
|
|
|
|
|
|
|
|
|||||||||
PER SHARE DATA:
|
|
|
|
|
|
|
|
|||||||||
Basic:
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(0.54
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(0.52
|
)
|
|
Weighted average number of shares
|
21,071
|
|
|
20,963
|
|
|
21,044
|
|
|
20,934
|
|
|||||
Diluted:
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(0.54
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(0.52
|
)
|
|
Weighted average number of shares
|
21,071
|
|
|
20,963
|
|
|
21,044
|
|
|
20,934
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||||
NET LOSS
|
$
|
(11,418
|
)
|
|
$
|
(5,518
|
)
|
|
$
|
(29,799
|
)
|
|
$
|
(10,949
|
)
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments, net of taxes of $0 and $0, respectively
|
(921
|
)
|
|
3,625
|
|
|
(464
|
)
|
|
4,722
|
|
|||||
COMPREHENSIVE LOSS
|
$
|
(12,339
|
)
|
|
$
|
(1,893
|
)
|
|
$
|
(30,263
|
)
|
|
$
|
(6,227
|
)
|
|
July 29, 2018
|
|
October 29, 2017
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
29,929
|
|
|
$
|
37,077
|
|
Restricted cash and short-term investments
|
12,993
|
|
|
20,544
|
|
||
Trade accounts receivable, net of allowances of $810 and $1,249, respectively
|
152,794
|
|
|
173,818
|
|
||
Recoverable income taxes
|
53
|
|
|
1,643
|
|
||
Other current assets
|
8,484
|
|
|
11,755
|
|
||
TOTAL CURRENT ASSETS
|
204,253
|
|
|
244,837
|
|
||
Other assets, excluding current portion
|
10,739
|
|
|
10,851
|
|
||
Property, equipment and software, net
|
25,523
|
|
|
29,121
|
|
||
TOTAL ASSETS
|
$
|
240,515
|
|
|
$
|
284,809
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accrued compensation
|
$
|
27,086
|
|
|
$
|
24,504
|
|
Accounts payable
|
28,684
|
|
|
36,895
|
|
||
Accrued taxes other than income taxes
|
18,399
|
|
|
20,467
|
|
||
Accrued insurance and other
|
25,236
|
|
|
30,282
|
|
||
Short-term borrowings
|
—
|
|
|
50,000
|
|
||
Income taxes payable
|
1,535
|
|
|
808
|
|
||
TOTAL CURRENT LIABILITIES
|
100,940
|
|
|
162,956
|
|
||
Accrued insurance and other, excluding current portion
|
12,128
|
|
|
10,828
|
|
||
Deferred gain on sale of real estate, excluding current portion
|
22,702
|
|
|
24,162
|
|
||
Income taxes payable, excluding current portion
|
619
|
|
|
1,663
|
|
||
Deferred income taxes
|
1,208
|
|
|
1,206
|
|
||
Long-term debt, excluding current portion, net
|
48,939
|
|
|
—
|
|
||
TOTAL LIABILITIES
|
186,536
|
|
|
200,815
|
|
||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Preferred stock, par value $1.00; Authorized - 500,000 shares; Issued - none
|
—
|
|
|
—
|
|
||
Common stock, par value $0.10; Authorized - 120,000,000 shares; Issued - 23,738,003 shares; Outstanding - 21,178,515 and 21,026,253 shares, respectively
|
2,374
|
|
|
2,374
|
|
||
Paid-in capital
|
78,308
|
|
|
78,645
|
|
||
Retained earnings
|
12,636
|
|
|
45,843
|
|
||
Accumulated other comprehensive loss
|
(5,725
|
)
|
|
(5,261
|
)
|
||
Treasury stock, at cost; 2,559,488 and 2,711,750 shares, respectively
|
(33,614
|
)
|
|
(37,607
|
)
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
53,979
|
|
|
83,994
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
240,515
|
|
|
$
|
284,809
|
|
|
Nine Months Ended
|
||||||
|
July 29, 2018
|
|
July 30, 2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(29,799
|
)
|
|
$
|
(10,949
|
)
|
A
djustment to reconcile net loss to cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
5,515
|
|
|
5,618
|
|
||
Provision (release) of doubtful accounts and sales allowances
|
(181
|
)
|
|
573
|
|
||
Unrealized foreign currency exchange loss
|
194
|
|
|
1,130
|
|
||
Impairment charges
|
155
|
|
|
290
|
|
||
Amortization of gain on sale leaseback of property
|
(1,458
|
)
|
|
(1,459
|
)
|
||
Loss on dispositions of property, equipment and software
|
—
|
|
|
12
|
|
||
Gain from divestitures
|
—
|
|
|
(3,938
|
)
|
||
Share-based compensation expense
|
517
|
|
|
2,111
|
|
||
Change in operating assets and liabilities:
|
|
|
|
|
|
||
Trade accounts receivable
|
21,218
|
|
|
(2,199
|
)
|
||
Restricted cash
|
7,477
|
|
|
(7,072
|
)
|
||
Other assets
|
3,956
|
|
|
1,470
|
|
||
Net assets held for sale
|
—
|
|
|
158
|
|
||
Accounts payable
|
(8,330
|
)
|
|
8,038
|
|
||
Accrued expenses and other liabilities
|
(3,086
|
)
|
|
(9,025
|
)
|
||
Income taxes
|
1,274
|
|
|
12,204
|
|
||
Net cash used in operating activities
|
(2,548
|
)
|
|
(3,038
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Sales of investments
|
608
|
|
|
716
|
|
||
Purchases of investments
|
(375
|
)
|
|
(231
|
)
|
||
Proceeds from divestitures
|
—
|
|
|
15,224
|
|
||
Proceeds from sale of property, equipment, and software
|
—
|
|
|
297
|
|
||
Purchases of property, equipment, and software
|
(2,332
|
)
|
|
(7,753
|
)
|
||
Net cash provided by (used in) investing activities
|
(2,099
|
)
|
|
8,253
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Repayment of borrowings
|
(119,696
|
)
|
|
(27,050
|
)
|
||
Draw-down on borrowings
|
119,696
|
|
|
30,000
|
|
||
Debt issuance costs
|
(1,415
|
)
|
|
(751
|
)
|
||
Proceeds from exercise of options
|
—
|
|
|
2
|
|
||
Withholding tax payment on vesting of restricted stock awards
|
(269
|
)
|
|
(46
|
)
|
||
Net cash provided by (used in) financing activities
|
(1,684
|
)
|
|
2,155
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(817
|
)
|
|
2,601
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(7,148
|
)
|
|
9,971
|
|
||
Cash and cash equivalents, beginning of period
|
37,077
|
|
|
6,386
|
|
||
Cash and cash equivalents, end of period
|
$
|
29,929
|
|
|
$
|
16,357
|
|
|
|
|
|
||||
Cash paid during the period:
|
|
|
|
||||
Interest
|
$
|
2,084
|
|
|
$
|
2,815
|
|
Income taxes
|
$
|
2,483
|
|
|
$
|
2,256
|
|
The changes in accumulated other comprehensive loss for the three and nine months ended July 29, 2018 were (in thousands):
|
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
July 29, 2018
|
||||||
|
|
Foreign Currency Translation
|
||||||
Accumulated other comprehensive loss at the beginning of the period
|
|
$
|
(4,804
|
)
|
|
$
|
(5,261
|
)
|
Other comprehensive loss
|
|
(921
|
)
|
|
(464
|
)
|
||
Accumulated other comprehensive loss at July 29, 2018
|
|
$
|
(5,725
|
)
|
|
$
|
(5,725
|
)
|
|
July 29, 2018
|
|
October 29, 2017
|
||||
Financing programs
|
$
|
50,000
|
|
|
$
|
50,000
|
|
Less:
|
|
|
|
||||
Current portion
|
—
|
|
|
50,000
|
|
||
Deferred financing fees
|
1,061
|
|
|
—
|
|
||
Total long-term debt, net
|
$
|
48,939
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(11,418
|
)
|
|
$
|
(5,518
|
)
|
|
$
|
(29,799
|
)
|
|
$
|
(10,949
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of shares
|
21,071
|
|
|
20,963
|
|
|
21,044
|
|
|
20,934
|
|
||||
Diluted weighted average number of shares
|
21,071
|
|
|
20,963
|
|
|
21,044
|
|
|
20,934
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.54
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(0.52
|
)
|
Diluted
|
$
|
(0.54
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(0.52
|
)
|
|
Three Months Ended July 29, 2018
|
||||||||||||||||||
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
257,808
|
|
|
$
|
215,679
|
|
|
$
|
28,579
|
|
|
$
|
14,415
|
|
|
$
|
(865
|
)
|
Cost of services
|
221,448
|
|
|
184,724
|
|
|
23,917
|
|
|
13,672
|
|
|
(865
|
)
|
|||||
Gross margin
|
36,360
|
|
|
30,955
|
|
|
4,662
|
|
|
743
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
42,222
|
|
|
27,971
|
|
|
3,944
|
|
|
10,307
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
3,108
|
|
|
23
|
|
|
41
|
|
|
3,044
|
|
|
—
|
|
|||||
Operating income (loss)
|
(8,970
|
)
|
|
2,961
|
|
|
677
|
|
|
(12,608
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(1,142
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
1,306
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(11,418
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 30, 2017
|
||||||||||||||||||
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
289,924
|
|
|
$
|
229,372
|
|
|
$
|
29,018
|
|
|
$
|
33,365
|
|
|
$
|
(1,831
|
)
|
Cost of services
|
244,205
|
|
|
194,594
|
|
|
24,459
|
|
|
26,983
|
|
|
(1,831
|
)
|
|||||
Gross margin
|
45,719
|
|
|
34,778
|
|
|
4,559
|
|
|
6,382
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
46,931
|
|
|
28,962
|
|
|
3,824
|
|
|
14,145
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
249
|
|
|
75
|
|
|
4
|
|
|
170
|
|
|
—
|
|
|||||
Operating income (loss)
|
(1,461
|
)
|
|
5,741
|
|
|
731
|
|
|
(7,933
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(2,983
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
1,074
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(5,518
|
)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended July 29, 2018
|
||||||||||||||||||
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
774,365
|
|
|
$
|
640,004
|
|
|
$
|
90,062
|
|
|
$
|
47,298
|
|
|
$
|
(2,999
|
)
|
Cost of services
|
664,695
|
|
|
551,011
|
|
|
76,094
|
|
|
40,589
|
|
|
(2,999
|
)
|
|||||
Gross margin
|
109,670
|
|
|
88,993
|
|
|
13,968
|
|
|
6,709
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
132,076
|
|
|
85,055
|
|
|
12,231
|
|
|
34,790
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
3,730
|
|
|
32
|
|
|
340
|
|
|
3,358
|
|
|
—
|
|
|||||
Impairment charge
|
155
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|
—
|
|
|||||
Operating income (loss)
|
(26,291
|
)
|
|
3,906
|
|
|
1,397
|
|
|
(31,594
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(2,932
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
576
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(29,799
|
)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended July 30, 2017
|
||||||||||||||||||
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
905,953
|
|
|
$
|
695,041
|
|
|
$
|
89,599
|
|
|
$
|
125,864
|
|
|
$
|
(4,551
|
)
|
Cost of services
|
766,225
|
|
|
592,504
|
|
|
75,786
|
|
|
102,486
|
|
|
(4,551
|
)
|
|||||
Gross margin
|
139,728
|
|
|
102,537
|
|
|
13,813
|
|
|
23,378
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
146,992
|
|
|
90,695
|
|
|
11,895
|
|
|
44,402
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
1,072
|
|
|
215
|
|
|
14
|
|
|
843
|
|
|
—
|
|
|||||
Impairment charge
|
290
|
|
|
—
|
|
|
—
|
|
|
290
|
|
|
—
|
|
|||||
Gain from divestitures
|
(3,938
|
)
|
|
—
|
|
|
—
|
|
|
(3,938
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
(4,688
|
)
|
|
11,627
|
|
|
1,904
|
|
|
(18,219
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(5,331
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
930
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(10,949
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 29, 2018
|
||||||||||||||||||
(in thousands)
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
257,808
|
|
|
$
|
215,679
|
|
|
$
|
28,579
|
|
|
$
|
14,415
|
|
|
$
|
(865
|
)
|
Cost of services
|
221,448
|
|
|
184,724
|
|
|
23,917
|
|
|
13,672
|
|
|
(865
|
)
|
|||||
Gross margin
|
36,360
|
|
|
30,955
|
|
|
4,662
|
|
|
743
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
42,222
|
|
|
27,971
|
|
|
3,944
|
|
|
10,307
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
3,108
|
|
|
23
|
|
|
41
|
|
|
3,044
|
|
|
—
|
|
|||||
Operating income (loss)
|
(8,970
|
)
|
|
2,961
|
|
|
677
|
|
|
(12,608
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(1,142
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
1,306
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(11,418
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 30, 2017
|
||||||||||||||||||
(in thousands)
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
289,924
|
|
|
$
|
229,372
|
|
|
$
|
29,018
|
|
|
$
|
33,365
|
|
|
$
|
(1,831
|
)
|
Cost of services
|
244,205
|
|
|
194,594
|
|
|
24,459
|
|
|
26,983
|
|
|
(1,831
|
)
|
|||||
Gross margin
|
45,719
|
|
|
34,778
|
|
|
4,559
|
|
|
6,382
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
46,931
|
|
|
28,962
|
|
|
3,824
|
|
|
14,145
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
249
|
|
|
75
|
|
|
4
|
|
|
170
|
|
|
—
|
|
|||||
Operating income (loss)
|
(1,461
|
)
|
|
5,741
|
|
|
731
|
|
|
(7,933
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(2,983
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
1,074
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(5,518
|
)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended July 29, 2018
|
||||||||||||||||||
(in thousands)
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
774,365
|
|
|
$
|
640,004
|
|
|
$
|
90,062
|
|
|
$
|
47,298
|
|
|
$
|
(2,999
|
)
|
Cost of services
|
664,695
|
|
|
551,011
|
|
|
76,094
|
|
|
40,589
|
|
|
(2,999
|
)
|
|||||
Gross margin
|
109,670
|
|
|
88,993
|
|
|
13,968
|
|
|
6,709
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
132,076
|
|
|
85,055
|
|
|
12,231
|
|
|
34,790
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
3,730
|
|
|
32
|
|
|
340
|
|
|
3,358
|
|
|
—
|
|
|||||
Impairment charge
|
155
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|
—
|
|
|||||
Operating income (loss)
|
(26,291
|
)
|
|
3,906
|
|
|
1,397
|
|
|
(31,594
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(2,932
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
576
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(29,799
|
)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended July 30, 2017
|
||||||||||||||||||
(in thousands)
|
Total
|
|
North American Staffing
|
|
International Staffing
|
|
Corporate and Other (1)
|
|
Eliminations (2)
|
||||||||||
Net revenue
|
$
|
905,953
|
|
|
$
|
695,041
|
|
|
$
|
89,599
|
|
|
$
|
125,864
|
|
|
$
|
(4,551
|
)
|
Cost of services
|
766,225
|
|
|
592,504
|
|
|
75,786
|
|
|
102,486
|
|
|
(4,551
|
)
|
|||||
Gross margin
|
139,728
|
|
|
102,537
|
|
|
13,813
|
|
|
23,378
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, administrative and other operating costs
|
146,992
|
|
|
90,695
|
|
|
11,895
|
|
|
44,402
|
|
|
—
|
|
|||||
Restructuring and severance costs
|
1,072
|
|
|
215
|
|
|
14
|
|
|
843
|
|
|
—
|
|
|||||
Impairment charge
|
290
|
|
|
—
|
|
|
—
|
|
|
290
|
|
|
—
|
|
|||||
Gain from divestitures
|
(3,938
|
)
|
|
—
|
|
|
—
|
|
|
(3,938
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
(4,688
|
)
|
|
11,627
|
|
|
1,904
|
|
|
(18,219
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(5,331
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
930
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(10,949
|
)
|
|
|
|
|
|
|
|
|
•
|
Maintaining appropriate levels of working capital
. Our business requires a certain level of cash resources to efficiently execute operations. Consistent with similar companies in our industry and operational capabilities, we estimate this amount to be 1.5 to 2.0 times our weekly cash distributions on a global basis and must accommodate seasonality and cyclical trends;
|
•
|
Reinvesting in our business.
We continue to execute on our company-wide initiative of disciplined reinvestment in our business including new information technology systems which will support our front-end recruitment and placement capabilities as well as increase efficiencies in our back-office financial suite. We are also investing in our sales and recruiting process and resources, which is critical to drive profitable revenue growth;
|
•
|
Deleveraging our balance sheet.
By lowering our debt level, we will strengthen our balance sheet, reduce interest costs and reduce risk going forward;
|
•
|
Acquiring value-added businesses.
In the longer-term, and when circumstances permit, identifying and acquiring companies which would be accretive to our operating income and that could leverage Volt’s scale, infrastructure and capabilities. Strategic acquisitions could potentially strengthen Volt in certain industry verticals or in specific geographic locations; and
|
•
|
Returning capital to shareholders.
In the longer-term, part of our strategy is to return capital to our shareholders when circumstances permit in connection with share buybacks.
|
Global Liquidity
|
|
|
|
|
|
|
||||||||||||
|
July 30, 2017
|
October 29, 2017
|
January 28, 2018
|
April 29, 2018
|
July 29, 2018
|
August 31, 2018
|
||||||||||||
Cash and cash equivalents
(a)
|
$
|
16,357
|
|
$
|
37,077
|
|
$
|
53,868
|
|
$
|
34,177
|
|
$
|
29,929
|
|
|
||
|
|
|
|
|
|
|
||||||||||||
Total outstanding debt
|
$
|
100,000
|
|
$
|
50,000
|
|
$
|
80,000
|
|
$
|
50,000
|
|
$
|
50,000
|
|
$
|
55,000
|
|
|
|
|
|
|
|
|
||||||||||||
Cash in banks
(b) (c)
|
$
|
18,981
|
|
$
|
40,685
|
|
$
|
57,262
|
|
$
|
26,443
|
|
$
|
22,454
|
|
$
|
25,059
|
|
PNC Financing Program
|
14,445
|
|
54,129
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
DZ Financing Program (
d
)
|
—
|
|
—
|
|
21,528
|
|
32,943
|
|
30,280
|
|
29,042
|
|
||||||
Global liquidity
|
33,426
|
|
94,814
|
|
78,790
|
|
59,386
|
|
52,734
|
|
54,101
|
|
||||||
Minimum liquidity threshold
(e)
|
25,000
|
|
40,000
|
|
15,000
|
|
15,000
|
|
15,000
|
|
15,000
|
|
||||||
Available liquidity
|
$
|
8,426
|
|
$
|
54,814
|
|
$
|
63,790
|
|
$
|
44,386
|
|
$
|
37,734
|
|
$
|
39,101
|
|
a.
|
Per financial statements.
|
b.
|
Balance generally includes outstanding checks.
|
c.
|
As of July 29, 2018, amounts in the USB collections account are excluded from cash in banks as the balance is included in the borrowing availability under the DZ Financing Program. As of July 29, 2018, the balance in the USB collections account included in the DZ Financing Program availability was
$6.1 million
.
|
d.
|
The DZ Financing Program excluded accounts receivable from the United Kingdom.
|
e.
|
At October 29, 2017, the minimum liquidity threshold included a borrowing base block of
$35.0 million
.
|
|
Nine Months Ended
|
||||||
|
July 29, 2018
|
|
July 30, 2017
|
||||
Net cash used in operating activities
|
$
|
(2,548
|
)
|
|
$
|
(3,038
|
)
|
Net cash provided by (used in) investing activities
|
(2,099
|
)
|
|
8,253
|
|
||
Net cash provided by (used in) financing activities
|
(1,684
|
)
|
|
2,155
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(817
|
)
|
|
2,601
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(7,148
|
)
|
|
$
|
9,971
|
|
|
|
VOLT INFORMATION SCIENCES, INC.
|
||
|
|
|
|
|
Date: September 6, 2018
|
|
By:
|
/s/
|
Linda Perneau
|
|
|
|
Linda Perneau
|
|
|
|
|
Interim Chief Executive Officer
(Principal Executive Officer) |
|
|
|
|
|
|
Date: September 6, 2018
|
|
By:
|
/s/
|
Paul Tomkins
|
|
|
|
Paul Tomkins
|
|
|
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer) |
|
|
|
|
|
|
Date: September 6, 2018
|
|
By:
|
/s/
|
Leonard Naujokas
|
|
|
|
Leonard Naujokas
|
|
|
|
|
Controller and Chief Accounting Officer
(Principal Accounting Officer) |
(1)
|
I have reviewed this quarterly report on Form 10-Q of Volt Information Sciences, Inc.
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
(4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: September 6, 2018
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By:
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/s/ Linda Perneau
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Linda Perneau
Interim Chief Executive Officer |
(1)
|
I have reviewed this quarterly report on Form 10-Q of Volt Information Sciences, Inc.
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(2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
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(4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: September 6, 2018
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By:
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/s/ Paul Tomkins
|
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|
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Paul Tomkins
Senior Vice President and |
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|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: September 6, 2018
|
By:
|
|
/s/ Linda Perneau
|
|
|
|
Linda Perneau
|
|
|
|
Interim Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: September 6, 2018
|
By:
|
|
/s/ Paul Tomkins
|
|
|
|
Paul Tomkins
Senior Vice President and |
|
|
|
Chief Financial Officer
|