PENNSAUKEN, N.J., Aug. 09, 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 twenty-six week periods ended July 1, 2017.
RCM Technologies reported revenues of $45.5 million for the thirteen week period ended July 1, 2017, a 0.2% increase as compared
to $45.4 million for the thirteen week period ended July 2, 2016 (the comparable prior year period). Gross profit was $12.1 million
for both the thirteen week period ended July 1, 2017 and for the comparable prior year period. The Company experienced net
income of $0.2 million for the thirteen week period ended July 1, 2017 as compared to net income of $0.9 million for the comparable
prior year period. The primary reason for the decline in net income was a charge of $0.8 million in the current period, with
no offsetting tax deduction, related to an increase in contingent consideration, primarily related to an acquisition in
Canada. Adjusted EBITDA was $2.0 million for the thirteen week period ended July 1, 2017 as compared to $1.9 million for the
comparable prior year period, an increase of 5.8%. Please refer to “Supplemental Operating Results on a Non-GAAP Basis” below for a
discussion of this and other non-GAAP measures, including a reconciliation to the most comparable GAAP measure.
RCM Technologies reported revenues of $91.9 million for the twenty-six week period ended July 1, 2017, a 0.8% decrease as
compared to $92.6 million for the twenty-six week period ended July 2, 2016 (the comparable prior year period). Gross profit of
$23.9 million for the twenty-six week period ended July 1, 2017 decreased 3.7% as compared to $24.8 million for the comparable
prior year period. The Company experienced net income of $0.7 million for the twenty-six week period ended July 1, 2017 as
compared to net income of $1.9 million for the comparable prior year period. Adjusted EBITDA was $3.5 million for the
twenty-six week period ended July 1, 2017 as compared to $4.1 million for the comparable prior year period.
Rocco Campanelli, President and Chief Executive Officer of RCM Technologies, commented, “We are pleased with our progress in the
second quarter of 2017 as revenue, gross profit and adjusted EBITDA all experienced slight increases from second quarter 2016. Our
gross margin and adjusted EBITDA experienced nice gains from first quarter 2017. We are particularly excited about finishing the
second quarter with a strong June, which bodes well for the second half of fiscal 2017.”
Kevin Miller, Chief Financial Officer of RCM Technologies, added, “We continue to exhibit strong cash flow, generating $3.5
million in cash provided by operating activities in our second quarter and $5.3 million year to date through July 1 in fiscal 2017.
We expect to continue to have strong cash flow as our operating income for the balance of 2017 improves as compared to fiscal 2016.
Despite third quarter seasonality across our business, especially in our Health Care segment due to school closings over summer, we
believe our operating income for the second half of fiscal 2017 will exceed our first half of fiscal 2017.”
Conference Call
On Thursday, August 10, 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.
Tables to Follow
RCM Technologies, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share and Per Share Amounts) |
|
| |
|
| |
Thirteen Week Periods
Ended |
|
| |
July 1,
2017 |
|
July 2,
2016 |
|
| Revenues |
$ |
45,512 |
|
$ |
45,379 |
|
| Cost of services |
|
33,399 |
|
|
33,275 |
|
| Gross profit |
|
12,113 |
|
|
12,104 |
|
| Selling, general and administrative |
|
10,075 |
|
|
10,177 |
|
| Depreciation and amortization |
|
410 |
|
|
399 |
|
| Change in contingent consideration |
|
781 |
|
|
- |
|
| Operating income |
|
847 |
|
|
1,528 |
|
| Interest expense, net and foreign currency transactions |
|
(81 |
) |
|
(85 |
) |
| Income before income taxes |
|
766 |
|
|
1,443 |
|
| Income tax expense |
|
577 |
|
|
580 |
|
| Net income |
$ |
189 |
|
$ |
863 |
|
| |
|
|
|
|
| Diluted net earnings per share data |
$ |
0.02 |
|
$ |
0.07 |
|
| |
Twenty-Six Week
Periods Ended |
|
| |
July 1,
2017 |
|
July 2,
2016 |
|
| Revenues |
$ |
91,853 |
|
$ |
92,555 |
|
| Cost of services |
|
67,988 |
|
|
67,775 |
|
| Gross profit |
|
23,865 |
|
|
24,780 |
|
| Selling, general and administrative |
|
20,392 |
|
|
20,642 |
|
| Depreciation and amortization |
|
807 |
|
|
789 |
|
| Change in contingent consideration |
|
781 |
|
|
- |
|
| Operating income |
|
1,885 |
|
|
3,349 |
|
| Interest expense, net and foreign currency transactions |
|
(217 |
) |
|
(285 |
) |
| Income before income taxes |
|
1,668 |
|
|
3,064 |
|
| Income tax expense |
|
929 |
|
|
1,200 |
|
| Net income |
$ |
739 |
|
$ |
1,864 |
|
| |
|
|
|
|
| Diluted net earnings per share data |
$ |
0.06 |
|
$ |
0.15 |
|
RCM Technologies, Inc.
Summary Consolidated Selected Balance Sheet Data
(In Thousands)
|
|
| |
|
| |
July 1,
2017 |
|
December 31,
2016 |
|
| |
(Unaudited) |
|
|
|
| Cash and cash equivalents |
$ |
391 |
|
$ |
279 |
|
| Accounts receivable, net |
$ |
43,152 |
|
$ |
45,170 |
|
| Total current assets |
$ |
48,992 |
|
$ |
53,071 |
|
| Total assets |
$ |
65,626 |
|
$ |
69,831 |
|
| Total current liabilities |
$ |
22,504 |
|
$ |
23,713 |
|
| Borrowing under line of credit |
$ |
10,092 |
|
$ |
14,311 |
|
| Net debt (borrowings less cash) |
$ |
9,701 |
|
$ |
14,032 |
|
| Total liabilities |
$ |
33,413 |
|
$ |
38,576 |
|
| Stockholders’ equity |
$ |
32,213 |
|
$ |
31,255 |
|
| Treasury stock |
($ |
14,987 |
) |
($ |
14,622 |
) |
RCM Technologies, Inc.
Supplemental Operating Results on a Non-GAAP Basis
(Unaudited)
(In Thousands)
The following non-GAAP data, which adjusts for the categories of expenses described below, primarily changes in contingent
consideration, is a non-GAAP financial measure. Our management believes that this non-GAAP financial measure is useful
information for investors, shareholders and other stakeholders of our company in gauging our results of operations on an ongoing
basis. We believe that EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between
net income and EBITDA and Adjusted EBITDA has been provided. EBITDA should not be considered as an alternative to net income
as an indicator of performance. In addition, EBITDA does not take into account changes in certain assets and liabilities as
well as interest and income taxes that can affect cash flows. We do not intend the presentation of these non-GAAP measures to
be considered in isolation or as a substitute for results prepared in accordance with GAAP. These non-GAAP measures should be
read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
The following unaudited table presents the Company's GAAP Net Income measure and the corresponding adjustments used to calculate
“EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income” and “Diluted EPS” for the thirteen weeks and twenty-six weeks ended July 1, 2017
and July 2, 2016.
| |
Thirteen Week Periods
Ended |
|
Twenty-Six Week Periods
Ended |
|
| |
July 1, 2017 |
|
July 2,
2016 |
|
July 1, 2017 |
|
July 2,
2016 |
|
| GAAP net income |
$ |
189 |
|
$ |
863 |
|
$ |
739 |
|
$ |
1,864 |
|
| Income tax expense |
|
577 |
|
|
580 |
|
|
929 |
|
|
1,200 |
|
| Interest expense |
|
134 |
|
|
96 |
|
|
272 |
|
|
308 |
|
| Depreciation and amortization |
|
410 |
|
|
399 |
|
|
807 |
|
|
789 |
|
| EBITDA (non-GAAP) |
$ |
1,310 |
|
$ |
1,938 |
|
$ |
2,747 |
|
$ |
4,161 |
|
| |
|
|
|
|
|
|
|
|
| Adjustments |
|
|
|
|
|
|
|
|
| Change in contingent consideration |
|
781 |
|
|
- |
|
|
781 |
|
|
- |
|
| Gain on foreign currency transactions |
|
(53 |
) |
|
(11 |
) |
|
(55 |
) |
|
(23 |
) |
| Adjusted EBITDA (non-GAAP) |
$ |
2,038 |
|
$ |
1,927 |
|
$ |
3,473 |
|
$ |
4,138 |
|
| |
|
|
|
|
|
|
|
|
| GAAP net income |
$ |
189 |
|
$ |
863 |
|
$ |
739 |
|
$ |
1,864 |
|
| Adjustments |
|
|
|
|
|
|
|
|
| Change in contingent consideration |
|
781 |
|
|
- |
|
|
781 |
|
|
- |
|
| Adjusted net income (non-GAAP) |
$ |
970 |
|
$ |
863 |
|
$ |
1,520 |
|
$ |
1,864 |
|
| |
|
|
|
|
|
|
|
|
| GAAP Diluted EPS |
$ |
0.02 |
|
$ |
0.07 |
|
$ |
0.06 |
|
$ |
0.15 |
|
| Adjustments |
|
|
|
|
|
|
|
|
| Change in contingent consideration |
$ |
0.06 |
|
|
- |
|
$ |
0.06 |
|
|
- |
|
| Adjusted Diluted EPS (non-GAAP) |
$ |
0.08 |
|
$ |
0.07 |
|
$ |
0.12 |
|
$ |
0.15 |
|
RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands) |
|
| |
|
| |
Thirteen Week Periods
Ended |
|
| |
July 1,
2017 |
|
July 2,
2016 |
|
| Net income |
$ |
189 |
|
$ |
863 |
|
Adjustments to reconcile net income to cash
provided by operating activities |
|
1,805 |
|
|
652 |
|
| Changes in operating assets and liabilities |
|
|
|
|
| |
Accounts receivable |
|
887 |
|
|
5,385 |
|
| |
Prepaid expenses and other current assets |
|
272 |
|
|
553 |
|
| |
Net of transit accounts receivable and payable |
|
(489 |
) |
|
(1,143 |
) |
| |
Accounts payable and accrued expenses |
|
71 |
|
|
(1,456 |
) |
| |
Accrued payroll and related costs |
|
417 |
|
|
977 |
|
| |
Income taxes payable |
|
309 |
|
|
796 |
|
| Total adjustments |
|
3,272 |
|
|
5,764 |
|
| Cash provided by operating activities |
$ |
3,461 |
|
$ |
6,627 |
|
| |
|
|
|
|
| Net cash used in investing activities |
|
(459 |
) |
|
(249 |
) |
| Net cash used in financing activities |
|
(2,882 |
) |
|
(6,221 |
) |
| Effect of exchange rate changes |
|
(22 |
) |
|
(26 |
) |
| Increase in cash and cash equivalents |
$ |
98 |
|
$ |
131 |
|
| |
Twenty-Six Week
Periods Ended |
|
| |
July 1,
2017 |
|
July 2,
2016 |
|
| Net income |
$ |
739 |
|
$ |
1,864 |
|
Adjustments to reconcile net income to cash
provided by operating activities |
|
2,607 |
|
|
1,367 |
|
| Changes in operating assets and liabilities |
|
|
|
|
| |
Accounts receivable |
|
1,607 |
|
|
3,163 |
|
| |
Prepaid expenses and other current assets |
|
251 |
|
|
1,606 |
|
| |
Net of transit accounts receivable and payable |
|
(272 |
) |
|
1,684 |
|
| |
Accounts payable and accrued expenses |
|
(536 |
) |
|
(1,947 |
) |
| |
Accrued payroll and related costs |
|
468 |
|
|
(836 |
) |
| |
Income taxes payable |
|
466 |
|
|
780 |
|
| Total adjustments |
|
4,591 |
|
|
5,817 |
|
| Cash provided by operating activities |
$ |
5,330 |
|
$ |
7,681 |
|
| |
|
|
|
|
| Net cash used in investing activities |
|
(551 |
) |
|
(642 |
) |
| Net cash used in financing activities |
|
(4,649 |
) |
|
(7,766 |
) |
| Effect of exchange rate changes |
|
(18 |
) |
|
(24 |
) |
| Increase (decrease) in cash and cash equivalents |
$ |
112 |
|
($ |
751 |
) |
RCM Technologies, Inc.
Summary of Selected Income Statement Data
(Unaudited)
(In Thousands) |
|
| |
|
| |
Thirteen Week Period
Ended July 1, 2017 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$ |
20,586 |
|
$ |
8,557 |
|
$ |
16,369 |
|
$ |
45,512 |
|
| Cost of services |
|
14,889 |
|
|
6,200 |
|
|
12,310 |
|
|
33,399 |
|
| Gross Profit |
|
5,692 |
|
|
2,357 |
|
|
4,059 |
|
|
12,113 |
|
| Gross Profit Margin |
|
27.7 |
% |
|
27.5 |
% |
|
24.8 |
% |
|
26.6 |
% |
| |
Thirteen Week Period
Ended July 2, 2016 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$ |
18,742 |
|
$ |
10,957 |
|
$ |
15,680 |
|
$ |
45,379 |
|
| Cost of services |
|
13,715 |
|
|
8,172 |
|
|
11,388 |
|
|
33,275 |
|
| Gross Profit |
$ |
5,027 |
|
$ |
2,785 |
|
$ |
4,292 |
|
$ |
12,104 |
|
| Gross Profit Margin |
|
26.9 |
% |
|
25.4 |
% |
|
27.4 |
% |
|
26.7 |
% |
| |
Twenty-Six Week
Period Ended July 1, 2017 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$ |
39,810 |
|
$ |
17,167 |
|
$ |
34,876 |
|
$ |
91,853 |
|
| Cost of services |
|
29,076 |
|
|
12,657 |
|
|
26,255 |
|
|
67,988 |
|
| Gross Profit |
|
10,734 |
|
|
4,510 |
|
|
8,621 |
|
|
23,865 |
|
| Gross Profit Margin |
|
27.0 |
% |
|
26.3 |
% |
|
24.7 |
% |
|
26.0 |
% |
| |
Twenty-Six Week
Period Ended July 2, 2016 |
|
| |
Engineering |
|
Information
Technology |
|
Specialty
Health Care |
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
$ |
37,427 |
|
$ |
23,697 |
|
$ |
31,431 |
|
$ |
92,555 |
|
| Cost of services |
|
27,568 |
|
|
17,120 |
|
|
23,087 |
|
|
67,775 |
|
| Gross Profit |
$ |
9,859 |
|
$ |
6,577 |
|
$ |
8,344 |
|
$ |
24,780 |
|
| Gross Profit Margin |
|
26.3 |
% |
|
27.8 |
% |
|
26.6 |
% |
|
26.8 |
% |
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
