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Volt Q2 revenue down 4%, but gross margin improves

June 06, 2019

Volt Information Sciences Inc. (NYSEAMERICAN: VISI) reported revenue fell 4.2% in its fiscal second quarter ended April 28. However, it noted revenue was down 3.3% when measured on a same-store basis excluding currency fluctuations and exited businesses.

The New York-headquartered staffing provider reported a net loss of $5.2 million in the second quarter compared to a net loss of $7.7 million in the year-ago quarter. On the other hand, gross margin improved; Volt cited better customer pricing and lower payroll taxes partially offset by higher workers’ comp rates.

(US$ thousands) Q2 2019 Q2 2018 % change
Net revenue $252,070 $263,219 -4.2%
Gross margin $36,257 $37,301 -2.8%
Gross margin percentage 14.4% 14.2%  
Net loss ($5,165) ($7,687) nm

Second-quarter revenue fell in both North American and International staffing. It rose in the firm’s North American MSP segment.

Revenue by segment

(US$ thousands) Q2 2019 Q2 2018 % change
North American staffing $208,871 $218,090 -4.2%
International staffing $28,809 $31,904 -9.7%
North American MSP $9,579 $6,339 51.1%
Corporate and other $5,431 $7,817 -30.5%
Eliminations ($620) ($931)  

Volt also announced it is shutting down its customer care solutions business unit in an effort to focus attention on its core staffing business. It plans to exit the customer care solutions business in the third quarter; the operation includes business lines such as handling help desk inquiries on behalf of customers and providing technical support. The operation had revenue of almost $5.3 million in the second quarter.

In addition, the company announced the promotion of Ben Batten to senior VP and managing director, international. Batten previously served as managing director of Volt Asia.

Quote

“Despite revenue headwinds primarily from fluctuations in customer demand, the implementation of our sales and delivery strategy helped to substantially mitigate the top-line impact, while operational efficiencies and expense reductions bolstered Volt’s profitability metrics,” President and CEO Linda Perneau said.

Outlook

Volt noted that same-store, year-over-year net revenue is expected to decline in the third quarter similar to the decline in the second quarter.

Share price and market cap

Shares in Volt were down 1.89% to $4.27 at 11:08 a.m. Eastern time; the company had a market cap of $92.2 million, according to FT.com.

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