RCM Technologies, Inc. Announces First Quarter Results


PENNSAUKEN, N.J., May 10, 2016 (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 week period ended April 2, 2016.

RCM Technologies reported revenues of $47.2 million for the thirteen week period ended April 2, 2016, a 1.6% decrease as compared to $48.0 million for the thirteen week period ended April 4, 2015 (the comparable prior year period). Gross profit was $12.7 million for the thirteen week period ended April 2, 2016, a 4.7% decrease as compared to $13.3 million for the comparable prior year period.  Operating income was $1.8 million for the thirteen week period ended April 2, 2016, a 22.7% decrease as compared to $2.4 million for the comparable prior year period. Net income for the thirteen week period ended April 2, 2016 was $1.0 million, or $0.08 per diluted share, as compared to $1.4 million, or $0.11 per diluted share, for the comparable prior year period.

On the last day of fiscal 2015 the Company disposed of its QAD Software Solutions business unit (“QAD Business”) which for the comparable prior year period generated $1.0 million in revenues and $0.6 million in gross profit. 

Rocco Campanelli, President and Chief Executive Officer of RCM Technologies, commented, “We are pleased with the results of the first quarter of fiscal 2016. We continue to build our pipeline with new and existing clients and believe we will have a strong second half of the year. Of significant note, our Healthcare segment continues to excel by setting historically high quarterly revenues and gross profit. Both our Engineering and Information Technology segments met our expectation for this quarter and while revenue and gross profit were slightly less than recent quarters, we are confident that both of these groups will realize improved results in the third and fourth quarters of fiscal 2016.”

Kevin Miller, Chief Financial Officer of RCM Technologies, added, “Consolidated results for the first quarter of fiscal 2016 were in line with management’s expectations. We expect a significant increase in demand from our Canadian Engineering clients in the second half of fiscal 2016 and beyond. We are ready to meet that demand; however, predicting the quarterly timing of the increase in demand can be a challenge. We anticipate that our second quarter operating income results will continue to be soft as we manage our bench in Canada.”

Conference Call
On Wednesday, May 11, 2016, 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 (800) 285-6670.

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
     April 2, 
2016
 April 4,
2015
Revenues    $47,176  $47,966 
Cost of services     34,500   34,663 
Gross profit     12,676   13,303 
Selling, general and administrative     10,465   10,632 
Depreciation and amortization     390   316 
Operating income     1,821   2,355 
Other (expense) income, net     (200)  (135)
Income before income taxes     1,621   2,220 
Income tax expense     620   832 
Net income    $1,001  $1,388 
        
Diluted net earnings per share data    $0.08  $0.11 



RCM Technologies, Inc.
Summary Consolidated Selected Balance Sheet Data
(In Thousands)
 
     April 2,
2016
 January 2,
2016
     (Unaudited)  
Cash and cash equivalents    $103  $985 
Accounts receivable, net    $53,494  $50,946 
Total current assets    $59,202  $64,529 
Total assets    $76,242  $81,336 
Total current liabilities    $21,819  $26,629 
Borrowing under line of credit    $19,900  $21,000 
Net debt (borrowings less cash)    $19,797  $20,015 
Total liabilities    $42,955  $49,133 
Stockholders’ equity    $33,287  $32,203 
Treasury stock    $10,963  $10,365 

 

RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
 
 Thirteen Week Periods Ended
 
 April 2,
2016
 April 4,
2015

 
Net income$1,001 $1,388 
Adjustments to reconcile net income to cash
  provided by operating activities
 715  1,135 
Changes in operating assets and liabilities  
 Accounts receivable    (2,222) (4,991)
 Prepaid expenses and other current assets    1,053  (68
 Net of transit accounts receivable and payable    2,827  (2,106
 Accounts payable and accrued expenses    (491 1,519 
 Accrued payroll and related costs    (1,813 (1,631
 Income taxes payable    (16 (155
Total adjustments 53  (6,297
Cash provided by (used in) operating activities$1,054 $(4,909
       
Net cash used in investing activities (393) (617)
Net cash (used in) provided by financing activities (1,545 108 
Effect of exchange rate changes 2  (465)
Decrease in cash and cash equivalents$(882$(5,883

 

RCM Technologies, Inc.
Summary of Selected Income Statement Data
(Unaudited)
(In Thousands)
 
   Thirteen Week Period Ended April 2, 2016
 
   Engineering  Information
Technology
  Specialty
Health Care
  
Consolidated
 
                  
Revenue  $18,685  $12,740  $15,751  $47,176 
Cost of services   13,853   8,947   11,700   34,500 
Gross Profit  $4,832  $3,793  $4,051  $12,676 
Gross Margin   25.9%  29.8%  25.7%  26.9%


   Thirteen Week Period Ended April 4, 2015
 
   Engineering  Information
Technology
  Specialty
Health Care
  
Consolidated
 
                  
Revenue  $22,791  $14,655  $10,520  $47,966 
Cost of services   17,164   10,097   7,402   34,663 
Gross Profit  $5,627  $4,558  $3,118  $13,303 
Gross Margin   24.7%  31.1%  29.6%  27.7%
                  

            

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