UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
September 5, 2008
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VOLT INFORMATION SCIENCES, INC. |
(Exact Name of Registrant as Specified in Its Charter)
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New York |
1-9232 |
13-5658129 |
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(State or Other Jurisdiction |
(Commission |
(I.R.S. Employer |
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of Incorporation) |
File Number) |
Identification No.) |
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560 Lexington Avenue, New York, New York |
10022 |
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(Address of Principal Executive Offices) |
(Zip Code) |
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(212) 704-2400 |
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Not Applicable |
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(Former Name or Former Address, if Changed Since Last Report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01 Completion of Acquisition or Disposition of Assets
On September 5, 2008, Volt Information Sciences, Inc. (the “Company”), DataNational, Inc. and DataNational of Georgia, Inc., wholly owned subsidiaries of the Company, as Sellers, completed the sale of the net assets of its directory systems and services as well as its directory publishing operations to YPG Directories, LLC and YPG Systems, LLC, as Buyers, and YPG Holdings Inc., as Guarantor (collectively, “Yellow Page Group”), in accordance with the terms previously disclosed in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 4, 2008 and incorporated herein by reference, for a net purchase price of approximately $179 million in cash.
The Company plans to use the proceeds, estimated to be approximately $110 million after tax and transaction related expenses, to reduce debt and for other general corporate purposes.
The assets sold included the operations of Volt Directory Systems and Services, which provides telephone directory database management, sales and marketing services, licensing of directory production and contract management software systems, and DataNational, a publisher of independent community directories in selected Mid-Atlantic and Southeast markets under the Community Phonebook brand, but exclude the Uruguayan operations, which combined are reported as the Company’s Telephone Directory segment.
Item 8.01 Other Events.
On September 8, 2008, the Company issued a press release announcing the completion of the sale of the net assets of its directory systems and services as well as its directory publishing operations to Yellow Page Group. The press release is attached hereto as Exhibit 99.1 and is incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
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Volt Information Sciences, Inc. and Subsidiaries |
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Unaudited Pro Forma Condensed Statement of Operations |
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Nine Months Ended |
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July 27, 2008 |
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Historical |
Pro Forma Adjustments |
(1) (2) (3) |
Pro Forma |
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(In thousands) |
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Sales |
$ 1,776,694 |
$ - |
$ 1,776,694 |
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Cost and Expenses |
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Cost of sales |
1,689,719 |
1,689,719 |
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Selling and administrative |
66,426 |
66,426 |
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Restructuring costs |
1,504 |
1,504 |
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Depreciation and amortization |
29,532 |
29,532 |
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1,787,181 |
- |
1,787,181 |
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Operating Loss |
(10,487) |
- |
(10,487) |
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Other Income (Expenses) |
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Interest Income |
3,416 |
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3,416 |
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Other expense, net |
(3,319) |
1,412 |
(5) |
(1,907) |
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Foreign exchange loss, net |
(806) |
(806) |
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Interest Expense |
(5,636) |
329 |
(5) |
(5,307) |
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Loss from Continuing Operations before Minority Interest and Income Taxes |
(16,832) |
1,741 |
(15,091) |
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Minority interest |
2 |
- |
2 |
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Loss from Continuing Operations before Income Taxes |
(16,830) |
1,741 |
(15,089) |
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Income tax benefit |
6,115 |
(703) |
(5) |
5,412 |
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Loss from Continuing Operations |
$ (10,715) |
$ 1,038 |
$ (9,677) |
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Per Share - Basic and Diluted |
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Loss from continuing operations per share |
$ (0.49) |
$ (0.44) |
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Weighted average number of shares outstanding |
22,098 |
22,098 |
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See the accompanying notes to the unaudited pro forma condensed consolidated financial statements |
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Volt Information Sciences, Inc. and Subsidiaries |
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Unaudited Pro Forma Condensed Statement of Operations |
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Year Ended |
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October 28, 2007 |
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Historical |
Pro Forma Adjustments |
(1) (2) (3) |
Pro Forma |
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(In thousands) |
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Sales |
$2,353,082 |
$ (68,021) |
(3) |
$ 2,285,061 |
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Cost and Expenses |
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Cost of sales |
2,144,716 |
(36,455) |
(3) |
2,108,261 |
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Selling and administrative |
102,605 |
(14,310) |
(3) |
88,295 |
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Depreciation and amortization |
38,221 |
(1,154) |
(3) |
37,067 |
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2,285,542 |
(51,919) |
2,233,623 |
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Operating Income |
67,540 |
(16,102) |
51,438 |
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Other Income (Expenses) |
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Interest Income |
6,256 |
- |
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6,256 |
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Other expense, net |
(7,549) |
403 |
(3) |
(4,165) |
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2,981 |
(5) |
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Foreign exchange loss, net |
(421) |
- |
(421) |
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Interest Expense |
(3,612) |
- |
(3,612) |
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Income from Continuing Operations before Minority Interest and Income Taxes |
62,214 |
(12,718) |
49,496 |
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Minority interest |
6 |
- |
6 |
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Income from Continuing Operations before Income Taxes |
62,220 |
(12,718) |
49,502 |
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Income tax provision |
(22,888) |
(1,204) |
(5) |
(17,718) |
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6,374 |
(3) |
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Income from Continuing Operations |
$ 39,332 |
$ (7,548) |
$ 31,784 |
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Per Share - Basic |
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Income from continuing operations per share |
$ 1.71 |
$ 1.39 |
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Weighted average number of shares outstanding |
22,935 |
22,935 |
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Per Share - Diluted |
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Income from continuing operations per share |
$ 1.71 |
$ 1.38 |
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Weighted average number of shares outstanding |
22,985 |
22,985 |
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See the accompanying notes to the unaudited pro forma condensed consolidated financial statements |
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Volt Information Sciences, Inc. and Subsidiaries |
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Unaudited Pro Forma Condensed Balance Sheet |
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July 27, 2008 |
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Historical |
Pro Forma Adjustments |
(1) (2) |
Pro Forma |
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ASSETS |
(In thousands) |
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Current Assets |
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Cash and cash equivalents |
$ 43,821 |
179,184 |
(4) |
$ 168,005 |
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(55,000) |
(5) |
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Restricted cash |
28,593 |
28,593 |
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Short-term investments |
4,965 |
4,965 |
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Trade accounts receivable |
500,000 |
500,000 |
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Inventories |
40,264 |
40,264 |
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Assets held for sale |
35,065 |
(35,065) |
(6) |
- |
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Recoverable income taxes |
13,096 |
(13,096) |
(7) |
- |
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Deferred income taxes |
9,597 |
9,597 |
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Prepaid insurance and other assets |
32,133 |
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32,133 |
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Total Current Assets |
707,534 |
76,023 |
783,557 |
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Property, plant and equipment, net |
70,560 |
70,560 |
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Insurance and other |
4,325 |
4,325 |
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Deferred income taxes |
7,980 |
7,980 |
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Goodwill |
102,670 |
102,670 |
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Other intangible assets, net |
48,404 |
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48,404 |
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TOTAL ASSETS |
$ 941,473 |
$ 76,023 |
$1,017,496 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities |
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Short-term borrowings |
$ 217,360 |
(55,000) |
(5) |
$ 162,360 |
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Accounts payable |
206,456 |
206,456 |
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Liabilities related to assets held for sale |
21,862 |
(21,862) |
(6) |
- |
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Accrued wages and commissions |
58,417 |
6,258 |
(4) |
64,675 |
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Accrued taxes other than income taxes |
22,396 |
22,396 |
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Accrued insurance and other liabilities |
30,492 |
3,500 |
(4) |
33,992 |
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Deferred income and other liabilities |
12,496 |
12,496 |
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Income taxes payable |
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48,504 |
(7) |
48,504 |
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Total Current Liabilities |
569,479 |
(18,600) |
550,879 |
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Long-term debt |
12,250 |
12,250 |
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Deferred income |
2,505 |
2,505 |
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Income taxes payable |
937 |
937 |
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Deferred income taxes |
17,157 |
17,157 |
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Minority interest |
994 |
994 |
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Stockholders' Equity |
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Common stock |
2,350 |
2,350 |
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Paid-in capital |
51,000 |
51,000 |
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Retained earnings |
312,852 |
156,223 |
(4) |
407,475 |
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(61,600) |
(7) |
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Accumulated other comprehensive income |
2,930 |
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2,930 |
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369,132 |
94,623 |
463,755 |
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Less treasury stock |
(30,981) |
(30,981) |
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Total Stockholders' Equity |
338,151 |
94,623 |
432,774 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 941,473 |
$ 76,023 |
$1,017,496 |
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See the accompanying notes to the unaudited pro forma condensed consolidated financial statements |
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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
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1 |
On September 5, 2008, Volt Information Sciences, Inc. (the “Company”) completed the sale of the net assets of its Directory Systems and Services and DataNational operations (the "Disposed Operations") to YPG Directories, LLC and YPG Systems, LLC as Buyers and YPG Holdings Inc., as Guarantor, for a net
price of $179.2 million. The Company intends to use the net proceeds, estimated to be approximately $110.0 million after tax and transaction related expenses, to reduce debt and for other general corporate purposes. The accompanying unaudited pro forma condensed financial statements assume an initial reduction of debt of $55.0 million and an addition to cash and equivalents of $55.0 million.
The Company believes that the assumptions used to derive the unaudited pro forma condensed consolidated financial statements are reasonable under the circumstances and given the information available. Such pro forma financial data has been provided
for informational purposes and is not necessarily indicative of the Company’s financial condition or results of operations that actually would have been attained had the transaction occurred at the dates indicated, and is not necessarily indicative of the Company’s financial position or results of operations that will be achieved in the future. The unaudited pro forma condensed consolidated financial statements together with the notes thereto should be read in
conjunction with the Company’s historical consolidated financial statements and accompanying notes thereto, which can be found in the Company’s Quarterly Report on Form 10-Q for the period ended July 27, 2008 filed with the Securities and Exchange Commission (the “SEC”) on September 5, 2008, the Company’s Current Report on Form 8-K filed with the SEC on August 4, 2008 and the Company’s Annual Report on Form 10-K for the year ended October
28, 2007, filed with the SEC on January 11, 2008. |
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2 |
The pro forma condensed balance sheet gives effect to the sale of the Disposed Operations as of July 27, 2008. They have been accounted for as a discontinued operation beginning in the first quarter of the 2008 fiscal year in accordance with U.S. Generally Accepted Accounting Principles. |
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3 |
The pro forma statements of operations give effect to the disposition as if the transaction occurred as of the beginning of the earliest period presented (October 30, 2006). The results of operations of the Disposed Operations are excluded from the pro forma statements of operations for 2007 and 2008. The Company expects to realize a net gain on the sale. The estimated non-recurring after-tax gain has not been included in the pro forma statement of operations for 2008 but will be reflected in the historical consolidated financial statements of the Company for the three- and twelve-month periods ending November 2, 2008. |
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4 |
The adjustment to increase cash and equivalents of $179.2 million represents the net sales price. The costs associated with the sale of approximately $6.3 million in severance payments and $3.5 million of other expenses are reflected as increases to current liabilities. The gain on the sale of approximately $156.2 million is reflected as an increase to retained earnings. |
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5 |
The decrease in cash and equivalents and short-term borrowings represents the use of $55.0 million of the proceeds to pay down short-term borrowings. The related reduction in interest expense of $0.3 million in 2008 and the reduction in securitization costs of $3.0 million and $1.4 million in 2007 and 2008, respectively, are reflected in the related statements of operations. The related income tax effects of $1.2 million and $0.7 million in 2007 and 2008, respectively, of the decrease in interest expense and securitization costs are reflected in the related statements of operations. |
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6 |
The adjustments to assets and liabilities held for sale of $35.1 million and $21.9 million, respectively, reflect the disposition of the assets and liabilities of the Disposed Operations, which was accounted for as a discontinued operation. |
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7 |
The increase in income taxes payable of $48.5 million and decrease in recoverable income taxes of $13.1 million and the corresponding decrease in retained earnings of $61.6 million represent estimated income taxes related to the sale of the Disposed Operations. Determination of the final income tax amount is dependent on the Company finalizing the evaluation of certain tax aspects of the transaction. |
| The increase in interest income of $2.7 million and $1.1 million related to the increased cash and equivalents from the net proceeds of the sale less the reduction in short-term borrowings and the related income tax effects of $1.1 million and $0.4 million in 2007 and 2008, respectively, of the increase in interest income are not reflected in the related pro forma statements of operations. |
Forward-Looking Statements
This report and other reports and statements issued by the Company and its officers from time to time contain certain “forward-looking statements.” Words such as “may,” “should,” “likely,” “could,” “seek,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “strategy,” “design to,” and similar expressions are intended to identify forward-looking statements about the Company’s future plans, objectives, performance, intentions and expectations. These forward-looking statements are subject to a number of known and unknown risks and uncertainties including, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K, Quarter Reports on Form 10-Q, this Form 8-K and in the Company’s press releases and other public filings. Such risks and uncertainties could cause the Company’s actual results, performance and achievements to differ materially from those described in or implied by the forward-looking statements. Accordingly, readers should not place undue reliance on any forward-looking statements made by or on behalf of the Company. The Company does not assume any obligation to update any forward-looking statements after the date they are made.
(d) Exhibits.
Exhibits Description
99.1 Press release of Volt Information Sciences, Inc., dated September 8, 2008.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VOLT INFORMATION SCIENCES, INC. | |||
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Date: September 11, 2008 |
By: |
/s/ Jack Egan |
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Jack Egan |
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Senior Vice President and Principal Financial Officer |
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Exhibit Index
Exhibits Description
99.1 Press release of Volt Information Sciences, Inc., dated September 8, 2008.