Volt Information Sciences, Inc. Q1 FY2021 earnings call

• Positive COVID cases have decreased, vaccine distribution is ongoing with 70%-80% of US population expected to have first dose by September. - North American staffing segment saw first year-over-year revenue growth in 2 years, driven by new business wins and existing client expansion. - International staffing segment declined due to lower demand in UK and contractor headcount reduction, but rebuilding is underway. - North American MSP segment up due to increased demand in payroll service business. - Gross margin improved due to wage subsidies and better workers' comp experience.

For the first quarter of FY '21, adjusted revenue for North American staffing segment was $184.2 million, an increase of 2.2% from the prior year. International staffing segment had adjusted revenue of $24 million, down 12.9% from the prior year. North American MSP segment reported adjusted revenue of $9.7 million, a 2.6% improvement from prior year. Gross margin for Q1 2021 was 15% compared to 14.4% in the prior year comparable quarter, primarily due to government wage subsidies and improved workers' compensation claims experience.

• Q2 revenue expected to be up 5% to 7% year-over-year, but impacted by winter storms and supply chain issues. - EBITDA goal of 3% by end of FY '23, driven by retail mix growth, Direct Hire expansion, and better pricing/cost control.

• Impact from winter storms in Texas and Tennessee, including client shutdowns and supply chain disruption. - Potential drag on revenue growth if supply chain issues don't recover quickly.

Q: Comment on current recruiter bench and existing capacity?

A: Varies by location and area, monitored closely; investment made when productivity hits ceiling, with some areas still having bandwidth.

Q: How much of Q2 revenue growth is affected by winter storms?

A: Still seeing impact from initial shutdowns and supply chain disruption, potentially 1%-2% drag, with impact on low end of 5%-7% range if not recovered quickly.

Q: Deferred payroll balance and EBITDA goal timeframe?

A: Deferred payroll balance is just under $26 million, with half due end of 2021 and remaining end of 2022; EBITDA goal by end of FY '23.