PENNSAUKEN, N.J., March 01, 2017 (GLOBE NEWSWIRE) -- RCM Technologies, Inc. (Nasdaq:RCMT), a premier provider of
business and technology solutions designed to enhance and maximize the operational performance of its customers through the
adaptation and deployment of advanced engineering, information technology and specialty health care services, today announced
financial results for the thirteen and fifty-two week periods ended December 31, 2016.
RCM Technologies reported revenues of $44.2 million for the thirteen week period ended December 31, 2016, a 6.8% decrease as
compared to $47.4 million for the thirteen week period ended January 2, 2016 (the comparable prior year period). Gross profit of
$12.1 million for the thirteen week period ended December 31, 2016, decreased 11.6% as compared to $13.7 million for the comparable
prior year period. Operating income was $0.3 million for the thirteen week period ended December 31, 2016 as compared to $2.4
million for the comparable prior year period. The Company experienced a net loss of ($0.2) million for the thirteen week period
ended December 31, 2016 as compared to net income of $3.0 million for the comparable prior year period.
RCM Technologies reported revenues of $176.4 million for the fifty-two week period ended December 31, 2016, a 5.0% decrease as
compared to $185.7 million for the fifty-two week period ended January 2, 2016 (the comparable prior year period). Gross profit was
$47.0 million for the fifty-two week period ended December 31, 2016, a 9.4% decrease as compared to $51.9 million for the
comparable prior year period. Operating income was $4.1 million for the fifty-two week period ended December 31, 2016 as
compared to $7.9 million for the comparable prior year period. Net income for the fifty-two week period ended December 31, 2016 was
$1.8 million as compared to $6.0 million for the comparable prior year period.
The Company recorded charges of $1.3 million associated with a legal settlement and office closure for the thirteen and
fifty-two weeks ended December 31, 2016. The Company settled a wage and hour class action lawsuit in December 2016 and incurred
total expenses of $0.7 million, including professional fees. The balance is primarily related to facilities consolidation charges
associated with the closure of the Company’s Grand Rapids, Michigan office.
On December 31st, 2015 the Company sold certain assets of a subsidiary that resold and provided implementation
services for QAD software (the “QAD business unit”) as part of the Company’s Information Technology segment. The QAD business unit
generated $0.8 million in revenues and $0.3 million in gross profit for the thirteen week period ended January 2, 2016. The QAD
business unit generated $3.4 million in revenues and $1.4 million in gross profit for the fifty-two week period ended January 2,
2016.
Rocco Campanelli, President and Chief Executive Officer of RCM Technologies, commented, “We are pleased to finish the year with
our best gross margin and second best gross profit quarter of 2016. I want to highlight the following accomplishments:
- Our Specialty Health Care’s fourth quarter revenues of $16.3 million established a new quarterly record.
- Our Travel Nursing business continued to grow, finishing the fourth quarter with a $12.6 million revenue run-rate. We
continue to hire as many qualified recruiters as we can find.
- We ended 2016 with approximately 30 paraprofessionals on staff for our new contract with the Hawaii Department of Education.
We are optimistic this will continue to grow in 2017.
- We acquired Allied Health Professionals, a small provider of therapists to Chicago area schools and other health care
facilities. This acquisition added an additional 20 therapists and several new clients to our growing Chicago office.
- Our Locum Tenens Division signed several contracts and made their first placement in the fourth quarter. We anticipate this
group will generate positive contribution margin by the third quarter of 2017.
- Engineering generated its highest revenue and gross profit quarter of 2016.
- Engineering also achieved its highest gross margin in history, due in large part to several fixed priced contracts that were
completed in the fourth quarter.
- Information Technology revenues for the fourth quarter continued to lag prior year results mainly due to shorter assignments
and fewer opportunities than in previous years. We continue to make investments in sales and recruiting resources while focusing
on increasing our sales activity levels and improving our recruiting processes. We expect our sales and recruiting
re-tooling will have a positive impact sometime in 2017.”
Mr. Campanelli, added, “We believe that the foundation laid in 2016 will set RCM up for significantly improved operational
performance in 2017, particularly as we progress throughout the year.”
Kevin Miller, Chief Financial Officer of RCM Technologies, added, “We were pleased to experience strong cash flow in 2016,
generating cash flow from operations of $11.6 million, following 2015 cash flow from operations of $12.5 million. We again
experienced improvement to our DSOs in the fourth quarter of 2016 and we believe there is still significant progress to be made in
2017. We are very excited about our business as we head into 2017 and expect to see significant growth in annual operating
income.”
Conference Call
On Thursday, March 2, 2017, RCM Technologies will host a conference call to discuss these results. The call will begin at 10:00
a.m. Eastern Time. The dial-in number is (877) 331-7677.
About RCM
RCM Technologies, Inc. is a premier provider of business and technology solutions designed to enhance and maximize the operational
performance of its customers through the adaptation and deployment of advanced information technology and engineering
services. RCM is an innovative leader in the delivery of these solutions to commercial and government
sectors. RCM is also a provider of specialty healthcare services to major health care institutions and educational
facilities. RCM’s offices are located in major metropolitan centers throughout North America. Additional information can be
found at www.rcmt.com.
The Statements contained in this release that are not purely historical are forward-looking statements within the Private
Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and other factors that could cause the
Company's actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking
statements. These statements often include words such as “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,”
“project,” “intend,” “believe,” “plan,” “seek,” “could,” “can,” “should,” “are confident” or similar expressions. In
addition, statements that are not historical should also be considered forward-looking statements. These statements are based on
assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we believe are appropriate in these circumstances. Forward-looking
statements include, but are not limited to, those relating to demand for the Company’s services, expectations regarding our future
revenues and other financial results, our pipeline and potential project wins and our expectations for growth in our business. Such
statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors,
which may cause actual events to be materially different from those expressed or implied by such forward-looking statements.
Risk, uncertainties and other factors may emerge from time to time that could cause the Company’s actual results to differ from
those indicated by the forward-looking statements. Investors are directed to consider such risks, uncertainties and other factors
described in documents filed by the Company with the Securities and Exchange Commission, including our most recent Annual Report on
Form 10-K and subsequent Quarterly Reports on Form 10-Q. The Company assumes no obligation (and expressly disclaims any such
obligation) to update any forward-looking statements contained in this release as a result of new information or future events or
developments, except as may be required by law.
| |
|
| RCM Technologies, Inc. |
|
| Condensed Consolidated Statements of
Income |
|
| (Unaudited) |
|
| (In Thousands, Except Share and Per Share
Amounts) |
|
| |
|
| |
Thirteen Week Periods
Ended |
|
| |
December 31,
2016 |
|
January 2,
2016 |
|
| Revenues |
$44,198 |
|
$47,407 |
|
| Cost of services |
|
32,092 |
|
|
33,717 |
|
| Gross profit |
|
12,106 |
|
|
13,690 |
|
| Selling, general and administrative |
|
10,087 |
|
|
10,927 |
|
| Depreciation and amortization |
|
392 |
|
|
383 |
|
| Operating income before legal settlement and office closure |
|
1,627 |
|
|
2,380 |
|
| Legal settlement and office closure |
|
1,283 |
|
|
- |
|
| Operating income |
|
344 |
|
|
2,380 |
|
| Interest expense, net and foreign currency transactions |
|
(115 |
) |
|
(270 |
) |
| Change in contingent consideration |
|
(285 |
) |
|
- |
|
| (Loss) income before income taxes |
|
(56 |
) |
|
2,110 |
|
| Income tax expense (benefit) |
|
160 |
|
|
(866 |
) |
| Net income |
($216 |
) |
$2,976 |
|
| |
|
|
|
|
| Diluted net (loss) earnings per share data |
($0.02 |
) |
$0.24 |
|
| |
Fifty-Two Week Periods
Ended |
|
| |
December 31,
2016 |
|
January 2,
2016 |
|
| Revenues |
$176,448 |
|
$185,736 |
|
| Cost of services |
|
129,418 |
|
|
133,851 |
|
| Gross profit |
|
47,030 |
|
|
51,885 |
|
| Selling, general and administrative |
|
40,063 |
|
|
42,567 |
|
| Depreciation and amortization |
|
1,569 |
|
|
1,467 |
|
| Operating income before legal settlement and office closure |
|
5,398 |
|
|
7,851 |
|
| Legal settlement and office closure |
|
1,283 |
|
|
- |
|
| Operating income |
|
4,115 |
|
|
7,851 |
|
| Interest expense, net and foreign currency transactions |
|
(528 |
) |
|
(697 |
) |
| Change in contingent consideration |
|
(285 |
) |
|
- |
|
| Income before income taxes |
|
3,302 |
|
|
7,154 |
|
| Income tax expense |
|
1,544 |
|
|
1,139 |
|
| Net income |
$1,758 |
|
$6,015 |
|
| |
|
|
|
|
| Diluted net earnings per share data |
$0.14 |
|
$0.47 |
|
| RCM Technologies, Inc. |
|
| Summary Consolidated Selected Balance Sheet
Data |
|
| (In Thousands) |
|
| |
|
| |
December 31,
2016 |
|
January 2,
2016 |
|
| |
(Unaudited) |
|
|
|
| Cash and cash equivalents |
$279 |
|
$985 |
|
| Accounts receivable, net |
$45,170 |
|
$50,946 |
|
| Total current assets |
$53,071 |
|
$64,529 |
|
| Total assets |
$69,831 |
|
$81,336 |
|
| Total current liabilities |
$23,713 |
|
$26,629 |
|
| Borrowing under line of credit |
$14,311 |
|
$21,000 |
|
| Net debt (borrowings less cash) |
$14,032 |
|
$20,015 |
|
| Total liabilities |
$38,576 |
|
$49,133 |
|
| Stockholders’ equity |
$31,255 |
|
$32,203 |
|
| Treasury stock |
($14,622 |
) |
($10,365 |
) |
| RCM Technologies, Inc. |
|
| Condensed Consolidated Statements of Cash
Flows |
|
| (Unaudited) |
|
| (In Thousands) |
|
| |
|
| |
Thirteen Week Periods
Ended |
|
| |
December 31,
2016 |
|
January 2,
2016 |
|
| Net income |
($216 |
) |
$2,976 |
|
Adjustments to reconcile net income to cash
provided by operating activities |
|
1,859 |
|
|
2,173 |
|
| Changes in operating assets and liabilities |
|
|
|
|
| |
Accounts receivable |
|
(3,173 |
) |
|
989 |
|
| |
Prepaid expenses and other current assets |
|
(619 |
) |
|
(2,180 |
) |
| |
Net of transit accounts receivable and payable |
|
102 |
|
|
940 |
|
| |
Accounts payable and accrued expenses |
|
1,456 |
|
|
(331 |
) |
| |
Accrued payroll and related costs |
|
861 |
|
|
1,012 |
|
| |
Income taxes payable |
|
(763 |
) |
|
(586 |
) |
| Total adjustments |
|
(277 |
) |
|
2,017 |
|
| Cash provided by operating activities |
($493 |
) |
$4,993 |
|
| |
|
|
|
|
| Net cash provided by (used in) investing activities |
|
(102 |
) |
|
297 |
|
| Net cash used in financing activities |
|
541 |
|
|
(8,982 |
) |
| Effect of exchange rate changes |
|
30 |
|
|
135 |
|
| Decrease in cash and cash equivalents |
($24 |
) |
($3,557 |
) |
| |
|
|
|
|
|
| |
Fifty-Two Week Periods
Ended |
|
| |
December 31,
2016 |
|
January 2,
2016 |
|
| Net income |
$1,758 |
|
$6,015 |
|
Adjustments to reconcile net income to cash
provided by operating activities |
|
3,834 |
|
|
5,377 |
|
| Changes in operating assets and liabilities |
|
|
|
|
| |
Accounts receivable |
|
5,427 |
|
|
4,261 |
|
| |
Prepaid expenses and other current assets |
|
1,228 |
|
|
(2,225 |
) |
| |
Net of transit accounts receivable and payable |
|
966 |
|
|
(1,323 |
) |
| |
Accounts payable and accrued expenses |
|
(290 |
) |
|
(80 |
) |
| |
Accrued payroll and related costs |
|
(1,473 |
) |
|
837 |
|
| |
Income taxes payable |
|
185 |
|
|
(381 |
) |
| Total adjustments |
|
9,877 |
|
|
6,466 |
|
| Cash provided by operating activities |
$11,635 |
|
$12,481 |
|
| |
|
|
|
|
| Net cash used in investing activities |
|
(831 |
) |
|
(3,036 |
) |
| Net cash used in financing activities |
|
(11,556 |
) |
|
(14,188 |
) |
| Effect of exchange rate changes |
|
46 |
|
|
(683 |
) |
| Decrease in cash and cash equivalents |
($706 |
) |
($5,426 |
) |
| |
|
|
|
|
| RCM Technologies, Inc. |
|
| Summary of Selected Income Statement
Data |
|
| (Unaudited) |
|
| (In Thousands) |
|
| |
|
| |
Thirteen Week Period
Ended December 31, 2016 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$18,834 |
|
$9,046 |
|
$16,318 |
|
$44,198 |
|
| Cost of services |
|
13,323 |
|
|
6,687 |
|
|
12,082 |
|
|
32,092 |
|
| Gross Profit |
$5,511 |
|
$2,359 |
|
$4,236 |
|
$12,106 |
|
| Gross Profit Margin |
|
29.3 |
% |
|
26.1 |
% |
|
26.0 |
% |
|
27.4 |
% |
| |
Thirteen Week Period
Ended January 2, 2016 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$18,871 |
|
$14,200 |
|
$14,336 |
|
$47,407 |
|
| Cost of services |
|
13,481 |
|
|
9,883 |
|
|
10,353 |
|
|
33,717 |
|
| Gross Profit |
$5,390 |
|
$4,317 |
|
$3,983 |
|
$13,690 |
|
| Gross Profit Margin |
|
28.6 |
% |
|
30.4 |
% |
|
27.8 |
% |
|
28.9 |
% |
| |
Fifty-Two Week Period
Ended December 31, 2016 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$73,853 |
|
$42,812 |
|
$59,783 |
|
$176,448 |
|
| Cost of services |
|
54,182 |
|
|
31,145 |
|
|
44,091 |
|
|
129,418 |
|
| Gross Profit |
$19,671 |
|
$11,667 |
|
$15,692 |
|
$47,030 |
|
| Gross Profit Margin |
|
26.6 |
% |
|
27.3 |
% |
|
26.2 |
% |
|
26.7 |
% |
| |
Fifty-Two Week Period
Ended January 2, 2016 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$80,713 |
|
$58,885 |
|
$46,138 |
|
$185,736 |
|
| Cost of services |
|
60,472 |
|
|
40,787 |
|
|
32,592 |
|
|
133,851 |
|
| Gross Profit |
$20,241 |
|
$18,098 |
|
$13,546 |
|
$51,885 |
|
| Gross Profit Margin |
|
25.1 |
% |
|
30.7 |
% |
|
29.4 |
% |
|
27.9 |
% |
RCM Technologies, Inc. 2500 McClellan Avenue Pennsauken, NJ 08109 Tel: 856.356.4500 Fax: 856.356.4600 info@rcmt.com www.rcmt.com Corporate Contacts: Rocco Campanelli President & CEO Kevin D. Miller Chief Financial Officer
