VOLT INFORMATION SCIENCES, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Type 10-Okay)

The next dialogue needs to be learn at the side of the consolidated monetary statements and accompanying notes.

Be aware relating to using non-GAAP monetary measures

We have now supplied sure Non-GAAP monetary info, which incorporates
changes for particular gadgets and sure line gadgets on a relentless foreign money
foundation, as extra info for section income, our consolidated internet
revenue (loss) and section working revenue (loss). These measures usually are not in
accordance with, or another for, measures ready in accordance with
usually accepted accounting rules ("GAAP") and could also be completely different from
Non-GAAP measures reported by different corporations. Our Non-GAAP measures are
usually offered on a relentless foreign money foundation, and exclude (i) the influence of
companies offered or exited, (ii) the influence from the migration of sure purchasers
from a conventional staffing mannequin to a managed service mannequin ("MSP transitions")
and (iii) the elimination of particular gadgets. Particular gadgets usually embrace
impairments, restructuring and severance prices, in addition to sure revenue or
bills which the Firm doesn't take into account indicative of the present and
future interval efficiency. We consider that the distinction in income recognition
accounting underneath every mannequin of the MSP transitions may very well be deceptive on a
comparative interval foundation. We additional consider that using Non-GAAP measures
gives helpful info to administration and buyers relating to sure
monetary and enterprise tendencies referring to our monetary situation and outcomes of
operations as a result of they allow analysis of the outcomes of operations with out
the impact of foreign money fluctuations or particular gadgets that administration believes
make it extra obscure and consider our outcomes of operations.

segments

Our reportable segments are (i) North American Staffing, (ii) Worldwide
Staffing and (iii) North American MSP. All different enterprise actions that don't
meet the factors to be reportable segments are aggregated with company
companies underneath the class Company and Different. Our reportable segments have
been decided in accordance with our inside administration construction, which is
based mostly on working actions. We consider enterprise efficiency based mostly upon
a number of metrics, primarily utilizing income and section working revenue because the
major monetary measures. We consider section working revenue gives
administration and buyers a measure to investigate working efficiency of every
enterprise section in opposition to historic and opponents' knowledge, though historic
outcomes, together with working revenue, is probably not indicative of future outcomes as
working revenue is extremely contingent on many elements together with the state of the
economic system, aggressive circumstances and buyer preferences.

We allocate all support-related prices to the working segments aside from prices
circuitously referring to our working actions resembling corporate-wide common
and administrative prices. These prices usually are not allotted to particular person working
segments as a result of we consider that doing so wouldn't improve the understanding of
section working efficiency and such prices usually are not utilized by administration to
measure section efficiency.

We report our section info in accordance with the provisions of the
Monetary Accounting Requirements Board ("FASB") Accounting Requirements Codification
280, Phase Reporting ("ASC 280"), aligning with the way in which the Firm evaluates
its enterprise efficiency and manages its operations.

Overview

We're a world supplier of staffing companies (conventional time and
materials-based in addition to project-based). Our staffing companies include
workforce options that embrace offering contingent employees, personnel
recruitment companies and managed staffing companies applications supporting primarily
administrative and light-weight industrial (industrial) in addition to technical,
info expertise and engineering (skilled) positions. Our managed
service applications ("MSP") includes managing the procurement and on-boarding of
contingent employees from a number of suppliers.

As of October 31, 2021, we employed roughly 15,400 folks, together with
14,300 contingent employees. Contingent employees are on our payroll for the size
of their project. We function in roughly 65 of our personal places and
have an on-site presence in over 60 buyer places. Roughly 87% of our
income is generated in the USA. Our principal worldwide markets
embrace Europe, Asia Pacific and Canada places. The trade is extremely
fragmented and really aggressive in all the markets we serve.

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COVID-19 and our response

The worldwide unfold of COVID-19, which was declared a world pandemic by the World
Well being Group ("WHO") on March 11, 2020, created important volatility,
uncertainty and international macroeconomic disruption. Our enterprise skilled
important adjustments in income tendencies on the mid-point of our second quarter of
fiscal 2020 as market circumstances quickly deteriorated and continued to say no
via the start of our third quarter of fiscal 2020. Starting within the
second half of fiscal 2020 nevertheless, income elevated sequentially consequently
of a mixture of present prospects returning to work, increasing enterprise
with present prospects and profitable new prospects.

Starting in mid-March 2020, quite a few nations and U.S. federal, state and
native governments issued various ranges of stay-at-home orders requiring individuals
who weren't engaged in important actions and companies as outlined in these
particular orders to stay at dwelling or requiring lowered operations and capability
to adjust to social distancing. Our first precedence, with regard to the
COVID-19 pandemic, was to make sure the well being and security of our workers,
purchasers, suppliers and others with whom we accomplice in our enterprise actions to
proceed our enterprise operations on this unprecedented enterprise setting. Our
enterprise was largely transformed to a distant in-house workforce and remained open
as we supplied key companies to important companies, each remotely and onsite at
our prospects' places.

We proceed to function on a hybrid-model with sure places totally staffed
and others opening on a restricted voluntary foundation. Our COVID-19 Incident Response
Staff, comprised of key senior leaders within the group, continues to watch
essentially the most up-to-date developments and security commonplace from the Facilities for
Illness Management and Prevention, WHO, Occupational Security and Well being
Administration and different key authorities to find out an applicable response
for our workers and purchasers. Whereas this workforce is at present monitoring COVID-19
developments globally, we additionally stay targeted on the rules and vaccine
necessities within the U.S. to make sure we're complying with all related
rules. We're additionally monitoring developments associated to vaccine mandates
from sure prospects.

We anticipate the worldwide enterprise setting will proceed to function in numerous
levels of financial turbulence. We're inspired by the rise so as
exercise and demand all through the Firm, nevertheless the tempo of such improve
could also be impacted if a resurgence in COVID-19 infections results in extra
disruptions, authorities mandates or elevated lack of obtainable expertise to match
our prospects' calls for.

Current Developments

None
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Consolidated Outcomes of Operations and Monetary Highlights (Fiscal 2021 vs.
Fiscal 2020)
Outcomes of Operations by Phase (Fiscal 2021 vs. Fiscal 2020)
                                                                                      Yr Ended October 31, 2021
                                                                                                           North
                                                          North American         Worldwide            American          Company and
(in 1000's)                            Whole              Staffing               Staffing                 MSP                Different             Eliminations
Internet income                            $ 885,393          $   738,767          $       106,963          $  39,312          $        456          $       (105)
Value of companies                         741,871              623,346                   86,716             31,655                   259                  (105)
Gross margin                             143,522              115,421                   20,247              7,657                   197                     -

Promoting, administrative and different
working prices                          135,427               82,449                   15,956              5,409                31,613                 

Restructuring and severance prices          2,839                  (57)                     213                130                 2,553                     -
Impairment costs                           424                    -                        -                  -                   424                     -
Working revenue (loss)                    4,832               33,029                    4,078              2,118               (34,393)                    -
Different revenue (expense), internet               (2,055)
Earnings tax provision                       1,403
Internet revenue                             $   1,374


                                                                                      Yr Ended November 1, 2020
                                                                                                           North
                                                          North American         Worldwide            American          Company and
(in 1000's)                            Whole              Staffing               Staffing                 MSP                Different             Eliminations
Internet income                            $ 822,055          $   689,095          $        95,308          $  37,915          $        674          $       (937)
Value of companies                         694,204              586,255                   79,087             29,471                   328                  (937)
Gross margin                             127,851              102,840                   16,221              8,444                   346                     -

Promoting, administrative and different
working prices                          137,666               85,776                   14,484              5,370                32,036                 

Restructuring and severance prices          2,641                  883                      338                  -                 1,420                     -

Impairment costs                        16,913                1,859                        -                  -                15,054                     -
Working revenue (loss)                  (29,369)              14,322                    1,399              3,074               (48,164)                    -
Different revenue (expense), internet               (3,173)
Earnings tax provision                       1,045

Internet loss                               $ (33,587)




Outcomes of Operations Consolidated (Fiscal 2021 vs. Fiscal 2020)
Internet income in fiscal 2021 elevated $63.3 million, or 7.7%, to $885.4 million
from $822.1 million in fiscal 2020. The income improve was primarily resulting from
will increase in our North American Staffing section of $49.7 million, our
Worldwide Staffing section of $11.7 million and our North American MSP
section of $1.4 million. Excluding the influence on internet income of the constructive
international foreign money fluctuations of $6.6 million and $2.0 million associated to MSP
transitions, internet income elevated $58.7 million, or 7.1%.
Working revenue in fiscal 2021 elevated $34.2 million, or 116.5%, to $4.8
million from a lack of $29.4 million in fiscal 2020 primarily resulting from a
$16.5 million lower in impairment costs and a rise in income at
improved margins. Excluding restructuring and severance prices and impairment
costs, working revenue in fiscal 2021 elevated $17.9 million, or 182.5%.
This improve in working revenue of $17.9 million was primarily resulting from improved
leads to our North American Staffing section of $15.9 million and our
Worldwide Staffing section of $2.6 million, partially offset by a lower
in our North American MSP section of $0.8 million.
Outcomes of Persevering with Operations by Segments (Fiscal 2021 vs. Fiscal 2020)
Internet Income
The North American Staffing section income elevated $49.7 million, or 7.2%, to
$738.8 million in fiscal 2021 from $689.1 million in fiscal 2020. Excluding the
influence of $2.0 million in income from MSP transitions, income elevated $51.7
million, or 7.5%, in fiscal 2021. The rise is attributable to new enterprise
wins in a mixture of retail and mid-market purchasers, mixed with the
growth of enterprise inside present purchasers. As well as, income was
negatively impacted by the COVID-19 pandemic in fiscal 2020.
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The Worldwide Staffing section income elevated $11.7 million, or 12.2%, to
$107.0 million in fiscal 2021 from $95.3 million in fiscal 2020. Excluding the
constructive influence of international foreign money fluctuations of $6.7 million, Worldwide
Staffing income elevated by $5.0 million, or 4.9%, primarily resulting from elevated
staffing enterprise in France and Singapore. As well as, income within the United
Kingdom elevated barely because of increased payroll service enterprise demand
and direct rent income partially offset by decrease contract income.
The North American MSP section income elevated $1.4 million, or 3.7%, to $39.3
million in fiscal 2021 from $37.9 million in fiscal 2020. The rise is
primarily attributable to elevated demand in its payroll service enterprise
partially offset by a decline in managed service enterprise.
Value of Companies and Gross Margin

Value of companies in fiscal 2021 elevated $47.7 million, or 6.9%, to $741.9
million from $694.2 million in fiscal 2020. The rise in our North American
Staffing section associated to the 7.2% improve in income and a decrease employees'
compensation adjustment within the present fiscal 12 months partially offset by a
$3.8 million profit from authorities wage subsidies. As well as, our
Worldwide Staffing section elevated $7.6 million primarily because of
the 12.2% improve in income.

Gross margin as a p.c of income in fiscal 2021 elevated to 16.2% from
15.6% in fiscal 2020. Our North American Staffing section gross margin as a
proportion of income elevated primarily resulting from decrease employee-related prices
and a mixture of increased margin enterprise. Our Worldwide Staffing section gross
margin as a proportion of income primarily elevated resulting from improved contract
margins and better direct rent income. Our North American MSP section gross
margin as a proportion of income decreased primarily resulting from a rise in
lower-margin payroll service enterprise. Authorities wage subsidies accounted for
40 foundation factors of the rise in fiscal 2021.
Promoting, Administrative and Different Working Prices
Promoting, administrative and different working prices in fiscal 2021 decreased $2.3
million, or 1.6%, to $135.4 million from $137.7 million in fiscal 2020. The
lower was primarily resulting from $4.7 million in decrease facility associated prices due
to consolidating our actual property footprint and $1.2 million in decrease software program
and journey bills. This lower was partially offset by a $2.1 million
improve in labor and associated prices because of a rise in incentives on
the upper gross sales quantity and better medical claims expertise partially offset by
authorities wage subsidies and adjustments in headcount within the present fiscal 12 months.
As well as, skilled charges have been $1.7 million increased in fiscal 2021. As a
proportion of income, promoting, administrative and different working prices have been
15.3% and 16.7% in fiscal 2021 and 2020, respectively.
Restructuring and Severance Prices
Restructuring and severance prices in fiscal 2021 elevated $0.2 million to $2.8
million from $2.6 million in fiscal 2020. Restructuring and severance prices in
fiscal 2021 have been primarily resulting from $1.8 million of ongoing prices of services
exited within the second half of fiscal 2020 and $1.0 million in severance prices.
The prices in fiscal 2020 have been primarily resulting from our continued efforts to scale back
prices and to offset COVID-19 associated income losses. This included our plan to
leverage the worldwide capabilities of our staffing operations based mostly in Bangalore,
India and offshore a big variety of strategically recognized roles to
this location.
Impairment Prices
Impairment costs in fiscal 2021 decreased $16.5 million to $0.4 million from
$16.9 million in fiscal 2020. Impairment costs incurred within the present fiscal
12 months primarily associated to capitalized software program. In fiscal 2020, impairment
costs primarily associated to consolidating and exiting sure leased workplace
places all through North America based mostly on the place we may very well be totally operational
and efficiently help our purchasers and enterprise operations remotely.
Different Earnings (Expense), internet
Different expense in fiscal 2021 decreased $1.1 million, or 35.2%, to $2.1 million
from $3.2 million in fiscal 2020 resulting from a lower in curiosity expense as a
results of decrease charges and a lower in non-cash international trade losses
totally on intercompany balances.
Earnings Tax Provision
Earnings tax provision of $1.4 million and $1.0 million in fiscal 2021 and 2020,
respectively, was primarily associated to places exterior of the USA.
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Liquidity and Capital Assets
Overview
Our major sources of liquidity are money flows generated from operations and
proceeds from our financing settlement ("DZ Financing Program") with DZ Financial institution AG
Deutsche Zentral-Genossenschaftsbank ("DZ Financial institution"). Each working money flows and
borrowing capability underneath our financing association are immediately associated to the
ranges of accounts receivable generated by our enterprise. Our major capital
necessities embrace funding working capital, working lease obligations and
software-related expenditures.

We outline our working capital as money plus commerce accounts receivable minus
present liabilities. Our working capital necessities consist primarily of
payroll, employee-related advantages and employment-related tax funds for our
contingent employees and in-house workers and commerce payables, offset by
collections of buyer receivables. Our operations are such that our most
important present asset is commerce accounts receivable, that are usually on
15 - 45 day credit score phrases, and our most important present liabilities are
payroll associated prices, that are usually paid weekly. Consequently, because the
demand for our companies will increase, we usually see a rise in our working
capital necessities, as we proceed to pay our contingent workers on a weekly
foundation whereas the associated accounts receivable is excellent for for much longer,
which can lead to a decline in working money flows. Conversely, because the demand
for our companies declines, we usually see a lower in our working capital
wants, as the present accounts receivable are collected and never changed on the
similar stage. This may occasionally lead to a rise in our working money flows; nevertheless,
any such improve wouldn't be anticipated to be sustained within the occasion that an
financial downturn continued for an prolonged interval.

Our enterprise is topic to seasonality with our first fiscal quarter billings
usually the bottom because of the vacation season and customarily rising within the
third and fourth fiscal quarters when our prospects improve using
contingent labor. Accordingly, the primary and fourth quarters of our fiscal 12 months
are usually the strongest for working money flows.

We handle our money move and associated liquidity on a world foundation. As talked about,
we fund payroll, taxes and different working capital necessities utilizing money
generated by working actions supplemented, as wanted, from our borrowings.
Our weekly payroll funds inclusive of employment-related taxes and funds
to distributors are roughly $16.0 - $17.0 million. We usually goal minimal
international liquidity to be 1.5 occasions our common weekly necessities taking into
account seasonality and cyclical tendencies. We additionally keep minimal efficient money
balances in international operations and use a multi-currency netting and overdraft
facility for our European entities to additional decrease abroad money
necessities. We consider our money move from operations, in addition to our borrowing
availability underneath our financing program, can be enough to fulfill our money
wants for the following twelve months based mostly on present enterprise plans.

Our capital allocation technique is targeted to strengthen our stability sheet and
monetary flexibility, in addition to proceed to put money into our development and
profitability initiatives. This technique contains successfully managing working
capital to maximise operational effectivity, re-investing in our core development
initiatives, in each expertise enhancements and gross sales and recruiting expertise.
These priorities reveal our ongoing dedication to Volt shareholders as we
proceed to execute on our total strategic plan and return to sustainable
profitability.
Fiscal Yr Ended October 31, 2021 in comparison with the Fiscal Yr Ended November 1,
2020

Our obtainable liquidity and capital assets are influenced by 4 key parts: money, together with money equivalents and restricted money, working actions, investing actions and financing actions, as proven under. under in comparison with the earlier 12 months.

From October 31, 2021, our money, money equivalents and restricted money totaled
$76.6 million in comparison with $56.4 million from November 1, 2020.

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Money flows from working, investing and financing actions, as mirrored in our consolidated statements of money flows, are summarized within the following desk:

                                                                               For the Yr Ended
(in 1000's)                                                     October 31, 2021          November 1, 2020
Internet money supplied by working actions                        $          23,867          $         18,154
Internet money utilized in investing actions                                       (3,060)                   (4,629)
Internet money supplied by (utilized in) financing actions                           (580)                    4,580

Impact of trade price adjustments on money, money equivalents and restricted money

                                                                (51)                     (116)

Internet improve in money, money equivalents and restricted money $20,176 $17,989

Money Move – Working Actions

The online money supplied by working actions in fiscal 2021 was $23.9 million,
a rise of $5.7 million from fiscal 2020. This improve resulted primarily
from the $18.5 million enchancment in working outcomes, internet of impairment
costs in fiscal 2021 and a rise from accounts payable and accrued
bills of $5.4 million, partially offset by a lower from accounts
receivable of $19.2 million.

Within the second half of March 2020, we skilled a decline within the demand for our
companies because of the influence of the COVID-19 pandemic. Because of this, our working
money move elevated, and accounts receivable balances decreased as buyer
collections outpaced gross sales. Nevertheless, as consumer demand for our companies improved
within the latter a part of fiscal 2020 and continued to develop in fiscal 2021, our
working money flows elevated. This sample may repeat itself and wouldn't
be sustainable within the occasion the pandemic continues at resurgence ranges or an
financial downturn continues for an prolonged interval.

Throughout fiscal 2020 and the primary two months of fiscal 2021, money generated from
operations was supplemented by the enactment of legal guidelines offering COVID-19 reduction,
most notably the Coronavirus Assist, Aid, and Financial Safety Act ("CARES
Act") which allowed for the deferral of funds of the Firm's U.S. social
safety taxes. Because of this, $26.2 million of employer payroll tax funds have been
deferred with $13.1 million paid on January 3, 2022 and the remaining payable
with the December 31, 2022 tax fee in January 2023. As well as, sure
state governments have delayed fee of assorted state payroll taxes for a
shorter time frame. State payroll taxes of roughly $4.7 million
deferred from the third quarter of fiscal 2021 have been paid starting within the fourth
quarter of fiscal 2021. The Firm's fee of roughly $4.4 million of
state payroll taxes can be deferred from the fourth quarter of fiscal 2021 with
funds scheduled to start within the first quarter of fiscal 2022.

Moreover, throughout fiscal 2021 we decided that we have been eligible for the
worker retention tax credit score ("ERTC"), underneath the CARES Act, as our operations
have been totally or partially suspended resulting from authorities orders enacted in response
to the COVID-19 pandemic. These credit lowered our payroll tax funds by
$11.1 million and have been handled as authorities subsidies.
Money Flows - Investing Actions

The online money utilized in investing actions in fiscal 2021 was $3.1 million,
principally from the purchases of property, gear and software program primarily
referring to our funding in updating our enterprise processes, back-office
monetary suite and knowledge expertise instruments. The online money utilized in investing
actions in fiscal 2020 was $4.6 million, principally from the purchases of
property, gear and software program of $5.3 million partially offset by
$0.4 million of proceeds from the sale of property, gear and software program.

See word 18 “Phase info” to our consolidated monetary statements for particulars of purchases of property, plant and gear and software program by section. Money move – Financing actions

The online money utilized in financing actions in fiscal 2021 was $0.6 million
principally from withholding tax fee on vesting of restricted inventory awards
of $0.5 million. The online money supplied by financing actions in fiscal 2020
was $4.6 million principally from a $5.0 million improve in internet borrowing underneath
the DZ Financing Program, partially offset by the fee of debt issuance prices
of $0.3 million associated to the DZ Financing Program.
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Funding program

The DZ Financing Program is totally collateralized by sure receivables of the
Firm which might be offered to a wholly-owned, consolidated, bankruptcy-remote
subsidiary. To finance the acquisition of such receivables, we could request that DZ
Financial institution make loans now and again to the Firm which might be secured by liens on
these receivables.

In July 2019, the Firm amended and restated its long-term DZ Financing
Program, which was initially executed on January 25, 2018. The restated
settlement permits for the inclusion of sure accounts receivable from
originators within the United Kingdom, which added a further $5.0 - $7.0 million
in borrowing availability. In June 2020, the Most Facility Quantity, as outlined
within the DZ Financing Program, was lowered from $115.0 million to $100.0 million.

In December 2020, the Firm amended the DZ Financing Program. The
modifications to the settlement have been to (1) prolong the Amortization Date, as
outlined within the DZ Financing Program, from January 25, 2023 to January 25, 2024,
(2) prolong the Facility Maturity Date, as outlined within the DZ Financing Program,
from July 25, 2023 to July 25, 2024; (3) revise an present covenant to take care of
constructive internet revenue in any fiscal 12 months ending after 2020 to any fiscal 12 months
ending after 2021; (4) substitute the present Tangible Internet Price ("TNW") covenant
requirement, as outlined within the DZ Financing Program, to a minimal TNW of
$20.0 million via the Firm's fiscal quarter ending on or about July 31,
2021 and $25.0 million in every quarter thereafter; and (5) revise the
eligibility threshold for the receivables of a big North American Staffing
buyer from 5% of eligible receivables to eight%, which elevated our total
availability underneath the Program by $1.0 - $3.0 million. All different phrases and
circumstances remained considerably unchanged.

Mortgage advances could also be made underneath the DZ Financing Program via January 25,
2024 and all loans will mature no later than July 25, 2024. Loans will accrue
curiosity (i) with respect to loans which might be funded via the issuance of
industrial paper notes, on the CP price and (ii) in any other case, at a price each year
equal to adjusted LIBOR. The CP price can be based mostly on the charges paid by the
relevant lender on notes it points to fund associated loans. Adjusted LIBOR is
based mostly on LIBOR for the relevant curiosity interval and the speed prescribed by the
Board of Governors of the Federal Reserve System for figuring out the reserve
necessities with respect to Eurocurrency funding. If an occasion of default
happens, all loans shall bear curiosity at a price each year equal to the prime
price (the federal funds price plus 3%) plus 2.5%.

The DZ Financing Program additionally features a letter of credit score sub-facility with a
sub-limit of $35.0 million. As of October 31, 2021, the letter of credit score
participation was $22.1 million inclusive of $20.9 million for the Firm's
casualty insurance coverage program and $1.2 million for the safety deposit required
underneath sure actual property lease agreements.

The DZ Financing Program accommodates customary representations and warranties as
effectively as affirmative and damaging covenants. The settlement additionally accommodates
customary default, indemnification and termination provisions. The DZ Financing
Program is just not an off-balance sheet association, because the bankruptcy-remote
subsidiary is a 100%-owned consolidated subsidiary of the Firm.

The Firm is topic to sure monetary and portfolio efficiency covenants
underneath the DZ Financing Program, together with (1) a minimal TNW, as outlined within the
DZ Financing Program, of $20.0 million via the Firm's fiscal quarter
ending on or about July 31, 2021, $25.0 million in every quarter thereafter; (2)
constructive internet revenue in any fiscal 12 months ending after 2021; (3) most debt to
TNW ratio of three:1; and (4) a minimal of $15.0 million in liquid property, as
outlined within the DZ Financing Program. At October 31, 2021, the Firm was in
compliance with all debt covenants, as amended.

AT October 31, 2021, the Firm had excellent loans underneath the DZ financing program of $60.0 million, the borrowing availability, as outlined within the DZ financing program, of $6.0 million and the worldwide liquidity of $59.0 million.

Our DZ Financing Program is topic to termination underneath sure occasions of
default resembling breach of covenants, together with monetary covenants. At October
31, 2021, we have been in compliance with all debt covenants, as outlined within the DZ
Financing Program. We consider, based mostly on our 2022 Plan, we are going to proceed to be
in a position to meet our monetary covenants underneath the amended DZ Financing Program.

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The next desk units forth our money and international liquidity ranges on the finish
of our final 5 fiscal quarters:
World Liquidity
(in 1000's)                           November 1, 2020    January 31, 

2021 Might 2, 2021 August 1, 2021 October 31, 2021
Money and money equivalents (a)

           $         38,550    $         40,062    $     47,231    $        49,595    $         71,373

Whole excellent debt                  $         60,000    $         60,000    $     60,000    $        60,000    $         60,000

Money in banks (b) (c)                   $         36,218    $         36,962    $     39,288    $        43,076    $         52,938
DZ Financing Program                               2,828               2,225           2,868              3,990               6,046
World liquidity                                  39,046              39,187          42,156             47,066              58,984
Minimal liquidity threshold                       15,000              15,000          15,000             15,000              15,000
Obtainable liquidity                     $         24,046    $         24,187    $     27,156    $        32,066    $         43,984


a.Per monetary statements.
b.  Quantity usually contains excellent checks.
c.  Quantities within the USB collections account are excluded from money in banks as
the stability is included within the borrowing availability underneath the DZ Financing
Program. As of October 31, 2021, the stability within the USB collections account
included within the DZ Financing Program availability was $6.9 million.
Liquidity Outlook

As beforehand famous, our major sources of liquidity are money flows from
operations and proceeds from our financing association. Each working money
flows and borrowing capability underneath our financing association are immediately
associated to the degrees of accounts receivable generated by our companies. Our
stage of borrowing capability underneath the DZ Financing Program will increase or
decreases in tandem with any will increase or decreases in accounts receivable based mostly
on income fluctuations, amongst different elements.

Whereas we consider our money supplied by working actions and borrowing
availability underneath our DZ Financing Program, can be enough to fulfill our
working working capital and capital expenditure necessities at a minimal for
the following twelve months, the extent to which any on-going or resurgence of
COVID-19 associated impacts may have an effect on our enterprise, monetary situation, outcomes
of operations and money flows within the short- and medium-term can't be predicted
with certainty. We may additionally face surprising prices or an antagonistic influence on our
enterprise operations, in reference to authorities mandated COVID-19
vaccine-related insurance policies and procedures. Any of the above may have a fabric
antagonistic impact on our enterprise, monetary situation, outcomes of operations and
money flows and require us to hunt extra sources of liquidity and capital
assets.

Many governments in nations and territories by which we do enterprise have
introduced that sure payroll, revenue and different tax funds could also be deferred
with out penalty for a sure time frame, in addition to offering different money
move associated reduction packages. As famous above, we decided that we qualify for
the payroll tax deferral which permits us to delay fee of the employer
portion of payroll taxes and for sure employment tax credit. We're
evaluating whether or not we qualify for added employment tax credit. If we
qualify for such credit, the credit can be handled as authorities subsidies,
which is able to offset associated bills. We proceed to actively monitor these reduction
packages to reap the benefits of all of these which can be found to us.

As of October 31 2021, we now have important tax advantages together with federal internet
working loss ("NOL") carryforwards of $210.0 million, U.S. state NOL
carryforwards of $226.3 million, worldwide NOL carryforwards of $8.3 million
and federal tax credit of $53.3 million, that are totally reserved with a
valuation allowance which we might be able to make the most of in opposition to future income. As
of October 31, 2021, the U.S. federal NOL carryforwards will expire at numerous
dates between 2031and 2038 (with some indefinite), the U.S. state NOL
carryforwards expire at numerous dates starting in 2022 (with some indefinite),
the worldwide NOL carryforwards expire at numerous dates starting in 2022
(with some indefinite) and federal tax credit expire between 2022 and 2040.
Along with our dialogue and evaluation surrounding our liquidity and capital
assets, our important contractual obligations and commitments as of October
31, 2021, embrace:
•Debt Obligations and Curiosity Funds - As of October 31, 2021, our
excellent debt stability was $60.0 million. See Be aware 12, "Debt" inside our
consolidated monetary statements for additional element of our debt and the timing
of anticipated future principal and curiosity funds.
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•Working Leases - As of October 31, 2021, our remaining contractual dedication
for working leases was $51.1 million. See Be aware 2, "Leases," inside our
consolidated monetary statements for additional element of our obligations and the
timing of anticipated future funds, together with a five-year maturity schedule.
•Software program-Associated Expenditures - As of October 31, 2021, we had contractual
commitments for software-related expenditures of $2.3 million. We anticipate
capital expenditures in fiscal 2022 of roughly $4.0 - $5.0 million as we
proceed to help our strategic initiatives via improved expertise, as
mandatory. Whereas nearly all of our software-related contractual obligations
doesn't at present prolong past fiscal 2022, we anticipate annual funds of
roughly $5.5 million for the on-going use of our core expertise.
•Casualty Insurance coverage - As of October 31, 2021, we had accrued casualty claims of
$13.9 million underneath our Casualty Insurance coverage Program. Whereas we can not precisely
predict future insurance coverage declare legal responsibility, we estimate our associated expenditures
in fiscal 2022 to be within the vary of $8.0 - $11.0 million, based mostly on historic
knowledge.

Off-balance sheet preparations

As of October 31, 2021, we issued letters of credit score in opposition to our DZ Financing
Program totaling $22.1 million together with $20.9 million for the Firm's
casualty insurance coverage program and $1.2 million for the safety deposit required
underneath sure lease agreements.

As of November 1, 2020, we issued letters of credit score in opposition to our DZ Financing
Program totaling $24.5 million together with $23.3 million for the Firm's
casualty insurance coverage program and $1.2 million for the safety deposit required
underneath sure lease agreements.

From October 31, 2021, we didn’t have any off-balance sheet preparations which have, or are fairly more likely to have, a fabric present or future impact on our consolidated monetary situation, outcomes of operations, liquidity, capital expenditures or capital assets .

Crucial Accounting Insurance policies and Estimates
Administration's dialogue and evaluation of our monetary place and outcomes of
operations are based mostly upon our Consolidated Monetary Statements, that are
included in Merchandise 8, Monetary Statements and Supplementary Knowledge of this report
and have been ready in accordance with accounting rules usually
accepted in the USA. The preparation of those monetary statements
requires administration to make estimates, judgments, assumptions and valuations
that have an effect on the reported quantities of property, liabilities, revenues and bills
and associated disclosures. Whereas administration believes that its estimates, judgments
and assumptions are applicable, important variations in precise expertise or
important adjustments in assumptions could materially have an effect on our future outcomes.
Administration believes the essential accounting insurance policies and areas that require the
most important estimates, judgments, assumptions or valuations used within the
preparation of our monetary statements are these summarized under.
Goodwill

We carry out our annual impairment check for goodwill throughout the second quarter of
the fiscal 12 months and when a triggering occasion happens between annual impairment
assessments. When testing goodwill, the Firm has the choice to first assess
qualitative elements for reporting items that carry goodwill. The qualitative
evaluation contains assessing the totality of related occasions and circumstances
that have an effect on the truthful worth or carrying worth of the reporting unit. These occasions
and circumstances embrace macroeconomic circumstances, trade and aggressive
setting circumstances, total monetary efficiency, reporting unit particular
occasions and market issues. We may additionally take into account latest valuations of the
reporting unit, together with the magnitude of the distinction between essentially the most
latest truthful worth estimate and the carrying worth, in addition to each constructive and
antagonistic occasions and circumstances and the extent to which every of the occasions and
circumstances recognized could have an effect on the comparability of a reporting unit's truthful
worth with its carrying worth. If the qualitative evaluation leads to a
conclusion that it's extra seemingly than not that the truthful worth of a reporting
unit exceeds the carrying worth, then no additional testing is carried out for that
reporting unit.

When a qualitative evaluation is just not used, or if the qualitative evaluation is
not conclusive and it's essential to calculate the truthful worth of a reporting
unit, then the impairment evaluation for goodwill is carried out on the reporting
unit stage underneath Accounting Requirements Replace 2017-04, Intangibles - Goodwill and
Different (Matter 350) Simplifying the Take a look at for Goodwill Impairment. In conducting
our goodwill impairment testing, we evaluate the truthful worth of the reporting unit
with goodwill to the carrying worth, utilizing numerous valuation strategies
together with revenue (discounted money move) and market approaches. The Firm
believes the blended use of each approaches compensates for the inherent danger
related to utilizing both one on a
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on a stand-alone foundation and this mixture is indicative of the elements a market participant would take into account when making an analogous evaluation.

The Firm's goodwill is inside its Worldwide Staffing section. Our fiscal
2021 check carried out within the second quarter used important assumptions together with
anticipated income and expense development charges, forecasted capital expenditures,
working capital ranges and a reduction price of 13.0%. Below the market-based
method, important assumptions included related comparable firm earnings
multiples together with the dedication of whether or not a premium or low cost needs to be
utilized to these comparables. It was decided that the truthful worth of the
reporting unit exceeded its carrying worth, subsequently no adjustment to the
carrying worth of goodwill of $5.8 million was required. There have been no
triggering occasions in any subsequent quarter of fiscal 2021 that required the
Firm to carry out an interim impairment evaluation.
Lengthy-Lived Property
Lengthy-lived property primarily include right-of-use property, capitalized software program
prices, leasehold enhancements and workplace gear. We assessment these property for
impairment underneath Accounting Requirements Codification 360 Property, Plant and
Tools each time occasions or adjustments in circumstances point out that the carrying
quantity of an asset is probably not recoverable. Components that might set off an
impairment assessment embrace a present interval working or money move loss mixed
with a historical past of working or money move losses and a projection or forecast
that demonstrates persevering with losses or inadequate revenue related to the
use of a long-lived asset or asset group. Different elements embrace a big
change within the method of using the asset or a big damaging trade
or financial development. If circumstances require a long-lived asset or asset group be
reviewed for doable impairment, the Firm first compares undiscounted money
flows anticipated to be generated by every asset or asset group to its carrying
worth. An impairment loss is acknowledged when the estimated undiscounted money
flows anticipated to consequence from using the asset plus internet proceeds anticipated
from disposition of the asset (if any) are lower than the carrying worth of the
asset. When an impairment loss is acknowledged, the carrying quantity of the asset
is lowered to its estimated truthful worth based mostly on discounted money move evaluation or
different valuation strategies.
In fiscal 2021, the Firm's analyses resulted in impairment costs of
$0.4 million of capitalized prices associated to a change within the anticipated use of
sure software program property within the Company and Different class. There have been no
extra triggering occasions in fiscal 2021 that will point out that the
carrying quantities of some other of the Firm's long-lived property is probably not
recoverable as of the top of the interval. Because of this, the Firm didn't
carry out any extra steps underneath ASC 360 which required important judgement
or assumptions.
Earnings Taxes
Earnings taxes are accounted for underneath the asset and legal responsibility technique. Deferred
tax property and liabilities are acknowledged for the long run tax penalties
attributable to variations between the monetary assertion carrying quantities of
present property and liabilities and their respective tax bases, in addition to for
working loss and tax credit score carryforwards. Deferred tax property and liabilities
are measured utilizing present tax legal guidelines and charges in impact for the years by which
these non permanent variations are anticipated to be recovered or settled. The impact
on deferred tax property and liabilities of a change in tax charges is acknowledged in
revenue within the interval that features the enactment date. We should then assess the
probability that our deferred tax property can be realized. If we don't consider
that it's extra seemingly than not that our deferred tax property can be realized, a
valuation allowance is established. When a valuation allowance is elevated or
decreased, a corresponding tax expense or profit is recorded.
Accounting for revenue taxes includes uncertainty and judgment in 
interpret and apply tax legal guidelines and rules inside our annual tax filings. Such
uncertainties could lead to tax positions which may be challenged and overturned
by a tax authority sooner or later which might lead to extra tax legal responsibility,
curiosity costs and doable penalties. Curiosity and penalties are labeled
as a part of revenue tax expense.
We acknowledge the impact of revenue tax positions provided that these positions are extra
seemingly than not of being sustained. Acknowledged revenue tax positions are measured
on the largest quantity that's higher than 50% seemingly of being realized upon
final settlement. Modifications in recognition or measurement are mirrored within the
interval by which the change in estimate happens.
Realization of deferred tax property relies upon reversals of present
taxable non permanent variations, taxable revenue in prior carryback years and
future taxable revenue. Vital weight is given to constructive and damaging
proof that's objectively verifiable. We have now a three-year cumulative loss
place which is important damaging proof in contemplating whether or not deferred
tax property are realizable and the accounting steerage restricts the quantity of
reliance we will place on projected taxable revenue to help the restoration of the
deferred tax property. A valuation allowance has been acknowledged because of the
uncertainty of realization of our loss carryforwards and different deferred tax
property. Administration believes that the remaining deferred tax property are extra
seemingly than to not be realized based mostly upon consideration of all constructive and
damaging proof, together with scheduled reversal of deferred tax liabilities and
tax planning methods decided on a jurisdiction-by-jurisdiction foundation.
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Casualty Insurance coverage Program
We buy employees' compensation insurance coverage via mandated participation in
sure state funds and the experience-rated premiums in these state plans
relieve us of any extra legal responsibility. Legal responsibility for employees' compensation in
all different states in addition to vehicle and common legal responsibility is insured underneath a
paid loss deductible casualty insurance coverage program for losses exceeding specified
deductible ranges and we're financially answerable for losses under the
specified deductible limits. The casualty program is secured by a letter of
credit score in opposition to the DZ Financing Program of $20.9 million as of October 31, 2021.
We acknowledge bills and set up accruals for quantities estimated to be
incurred, each reported and never but reported, coverage premiums and associated authorized
and different claims administration prices. We develop estimates for claims as effectively
as claims incurred however not but reported utilizing actuarial rules and
assumptions based mostly on historic and projected declare incidence patterns, declare
measurement and the size of time over which funds are anticipated to be made.
Actuarial estimates are up to date as loss expertise develops, extra claims
are reported or settled and new info turns into obtainable. Any adjustments in
estimates are mirrored in working leads to the interval by which the
estimates are modified. Relying on the coverage 12 months, changes to ultimate
anticipated paid quantities are decided via the final word lifetime of the declare. At
October 31, 2021 and November 1, 2020, the casualty insurance coverage legal responsibility was
$13.9 million and $15.2 million, respectively.
Medical Insurance coverage Program
We're self-insured for a portion of our medical profit applications for our
workers. Eligible contingent employees on project with prospects are provided
medical advantages via a totally insured program administered via a 3rd
occasion. Staff contribute a portion of the price of these medical profit
applications.
To restrict publicity on a per claimant foundation for the self-insured medical advantages,
the Firm purchases stop-loss insurance coverage. Our retained legal responsibility for the
self-insured medical advantages is set using actuarial estimates of
anticipated claims based mostly on statistical evaluation of historic knowledge.
Litigation
We're topic to sure authorized proceedings in addition to calls for, claims and
threatened litigation that come up within the regular course of our enterprise. If the
potential loss from any declare or authorized continuing is taken into account possible and the
quantity might be fairly estimated, a legal responsibility and an expense are recorded for
the estimated loss. Vital judgment is required in each the dedication
of chance and the dedication of whether or not an publicity in all fairness
estimable. Growth of the accrual contains consideration of many elements
together with potential publicity, the standing of proceedings, negotiations,
discussions with inside and outdoors counsel, outcomes of comparable litigation
and, within the case of sophistication motion lawsuits, participation charges. As extra
info turns into obtainable, we are going to revise the estimates. If the precise
end result of those issues is completely different than anticipated, an adjustment is charged or
credited to expense within the interval the result happens or the interval by which the
estimate adjustments. To the extent that an insurance coverage firm is contractually
obligated to reimburse us for a legal responsibility, we file a receivable for the quantity
of the possible reimbursement.
Accounts Receivable
We make ongoing estimates referring to the collectability of our commerce accounts
receivable and keep an allowance for estimated losses ensuing from the
lack of ability of our prospects to make required funds. In figuring out the quantity
of the allowance for uncollectible accounts receivable, we make judgments on a
customer-by-customer foundation based mostly on the shopper's present monetary state of affairs,
resembling bankruptcies and different difficulties accumulating quantities billed. Losses
from uncollectible accounts haven't exceeded our allowance traditionally. As we
can not predict with certainty future adjustments within the monetary stability of our
prospects, precise future losses from uncollectible accounts could differ from our
estimates. If the monetary situation of our prospects have been to deteriorate,
ensuing of their lack of ability to make funds, a bigger allowance could also be
required. Within the occasion we decided {that a} smaller or bigger allowance was
applicable, we'd file a credit score or a cost to Promoting, administrative and
different working prices within the interval by which we made such a dedication.
New Accounting Requirements
For extra info relating to new accounting steerage see Be aware 1 -
Abstract of Enterprise and Vital Accounting Insurance policies in our Consolidated
Monetary Statements.
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