RCM Technologies, Inc. (NasdaqGM: 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, specialty health care and
information technology services, today announced financial results
for the thirteen and thirty-nine week periods ended September 29,
2018.
RCM Technologies reported revenues of $42.6 million for the
thirteen week period ended September 29, 2018, a 2.9% decrease as
compared to $43.8 million for the thirteen week period ended
September 30, 2017 (the comparable prior year period). Gross profit
was $11.0 million for the thirteen week period ended September 29,
2018, a 6.2% decrease as compared to $11.7 million for the
comparable prior year period. The Company experienced
operating income of $1.2 million for the current quarter as
compared to $1.6 million for the comparable prior year period.
Net income was $0.7 million, or $0.06 per diluted share, for
the current quarter as compared to net income of $1.0 million, or
$0.08 per diluted share, for the comparable prior year period.
RCM Technologies reported revenues of $145.1 million for the
thirty-nine week period ended September 29, 2018, a 6.9% increase
as compared to $135.7 million for the thirty-nine week period ended
September 30, 2017 (the comparable prior year period). Gross profit
was $36.3 million for the thirty-nine week period ended September
29, 2018, a 2.0% increase as compared to $35.6 million for the
comparable prior year period. The Company experienced
operating income of $3.8 million for the current year period as
compared to $3.5 million for the comparable prior year period.
Net income was $2.1 million, or $0.17 per diluted share, for
the current year period as compared to net income of $1.8 million,
or $0.15 per diluted share, for the comparable prior year
period.
The Company had adjusted EBITDA (non-GAAP) of $1.6 million for
the thirteen weeks ended September 29, 2018, a 21.9% decrease as
compared to $2.0 million for the comparable prior year period.
The Company had adjusted EBITDA (non-GAAP) of $6.4 million
for the thirty-nine weeks ended September 29, 2018, a 16.0%
increase as compared to $5.5 million for the comparable prior year
period. A reconciliation of adjusted EBITDA (non-GAAP) to
EBITDA (non-GAAP) and net income (GAAP) can be found on the fourth
page of this press release.
The Company experienced $1.4 million in severance, professional
fees and other charges for the thirty-nine week period ended
September 29, 2018. These charges include severance accrued
for the Company’s former chief executive officer and related
payroll taxes, continuation of certain benefits and professional
fees, totaling approximately $0.9 million. The additional
charges of $0.5 million incurred related to transactional financial
advisory fees, legal fees associated with defending a frivolous
lawsuit with a competitor of the Company, and search fees
associated with hiring a senior executive. The Company did
not incur any such charges in the comparable prior year period. The
Company incurred charges of $0.8 million for increases to
contingent consideration for the thirty-nine week period ended
September 30, 2017. The increase can be principally
attributed to the PCI acquisition. Since the PCI acquisition
was for stock in Canada the increase in purchase price is not tax
deductible and is treated as a permanent difference. There was no
change to contingent consideration for the thirty-nine week period
ended September 29, 2018.
Bradley Vizi, Executive Chairman of RCM Technologies, commented,
“Though third quarter operating income came in at the low end of
our expectation, as the result of project timing within Engineering
Services, we believe that we are well positioned to deliver a
strong finish to the year and enter 2019 with momentum. On a
year-to-date basis, our 2018 adjusted EBITDA of $6.4MM exceeds 2017
by a robust 16%.”
Kevin Miller, Chief Financial Officer of RCM Technologies,
added, “We generated $5.7 million in cash flow from operations
during our third quarter of 2018. We believe we will see good cash
flow from operations in the fourth quarter as we look to strengthen
our balance sheet.”
Conference CallOn Friday, November 9, 2018, 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 RCMRCM 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 |
|
| |
September 29, 2018 |
|
September 30, 2017 |
|
|
Revenues |
$42,559 |
|
$43,827 |
|
|
Cost of services |
31,571 |
|
32,109 |
|
|
Gross profit |
10,988 |
|
11,718 |
|
|
Selling, general and administrative |
9,412 |
|
9,700 |
|
|
Depreciation and amortization |
344 |
|
422 |
|
|
Operating income |
1,232 |
|
1,596 |
|
|
Other expense, net |
(295 |
) |
(154 |
) |
|
Income before income taxes |
937 |
|
1,442 |
|
|
Income tax expense |
253 |
|
422 |
|
|
Net income |
$684 |
|
$1,020 |
|
|
|
|
|
|
|
|
Diluted net earnings per share data |
$0.06 |
|
$0.08 |
|
| |
Thirty-Nine Week
Periods Ended |
|
| |
September 29, 2018 |
|
September 30, 2017 |
|
| Revenues |
$145,081 |
|
$135,680 |
|
| Cost of services |
108,803 |
|
100,097 |
|
| Gross profit |
36,278 |
|
35,583 |
|
| Selling, general and administrative |
29,909 |
|
30,092 |
|
| Depreciation and amortization |
1,156 |
|
1,229 |
|
| Severance, professional fees and other
charges |
1,371 |
|
- |
|
| Change in contingent consideration |
- |
|
781 |
|
| Operating income |
3,842 |
|
3,481 |
|
| Other expense, net |
(990 |
) |
(371 |
) |
| Income before income taxes |
2,852 |
|
3,110 |
|
| Income tax expense |
736 |
|
1,351 |
|
| Net income |
$2,116 |
|
$1,759 |
|
| |
|
|
|
|
| Diluted net earnings per share data |
$0.17 |
|
$0.15 |
|
| RCM Technologies,
Inc.Summary Consolidated Selected Balance Sheet
Data (In Thousands) |
| |
September
29,2018 |
|
December
30,2017 |
|
| |
(Unaudited) |
|
|
|
|
Cash and cash equivalents |
$710 |
|
$2,851 |
|
|
Accounts receivable, net |
$46,663 |
|
$46,080 |
|
|
Total current assets |
$55,685 |
|
$55,639 |
|
|
Total assets |
$73,428 |
|
$73,279 |
|
|
Total current liabilities |
$22,687 |
|
$22,188 |
|
|
Borrowing under line of credit |
$24,460 |
|
$27,279 |
|
|
Net debt (borrowings less cash) |
$23,750 |
|
$24,428 |
|
|
Total liabilities |
$48,751 |
|
$51,248 |
|
|
Stockholders’ equity |
$24,677 |
|
$22,031 |
|
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, 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 and Adjusted EBITDA
are performance measures and have provided a reconciliation between
net income and EBITDA and Adjusted EBITDA. Neither EBITDA nor
Adjusted EBITDA should be considered as an alternative to net
income as an indicator of performance. In addition, neither
EBITDA nor Adjusted EBITDA takes 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” and “Adjusted EBITDA” for the thirteen and thirty-nine
week periods ended September 29, 2018 and September 30,
2017.
| |
Thirteen Week Periods Ended |
|
Thirty-Nine Week Periods
Ended |
|
| |
September 29,2018 |
|
September 30,2017 |
|
September 29,2018 |
|
September 30,2017 |
|
|
GAAP net income |
$684 |
|
$1,020 |
|
$2,116 |
|
$1,759 |
|
|
Income tax expense |
253 |
|
422 |
|
736 |
|
1,351 |
|
|
Interest expense |
305 |
|
137 |
|
971 |
|
409 |
|
| Depreciation and amortization |
344 |
|
422 |
|
1,156 |
|
1,229 |
|
| EBITDA (non-GAAP) |
$1,586 |
|
$2,001 |
|
$4,979 |
|
$4,748 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
Severance, professional fees and other charges |
- |
|
- |
|
1,371 |
|
- |
|
|
Change in contingent consideration |
- |
|
- |
|
- |
|
781 |
|
| (Gain) loss on foreign currency
transactions |
(10 |
) |
17 |
|
19 |
|
(38 |
) |
| Adjusted EBITDA (non-GAAP) |
$1,576 |
|
$2,018 |
|
$6,369 |
|
$5,491 |
|
| RCM Technologies,
Inc.Condensed Consolidated Statements of Cash
Flows(Unaudited)(In
Thousands) |
| |
Thirteen Week Periods
Ended |
|
| |
September 29, 2018 |
|
September 30, 2017 |
|
| Net income |
$684 |
|
$1,020 |
|
| Adjustments to reconcile net income to cash
provided by operating activities |
1,125 |
|
419 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
4,496 |
|
2,075 |
|
|
|
Prepaid expenses and other current assets |
(867 |
) |
(21 |
) |
|
|
Net of transit accounts receivable and payable |
(466 |
) |
(917 |
) |
|
|
Accounts payable and accrued expenses |
1,206 |
|
(777 |
) |
|
|
Accrued payroll and related costs |
(760 |
) |
(653 |
) |
|
|
Income taxes payable |
256 |
|
480 |
|
| Total adjustments |
4,990 |
|
606 |
|
| Cash provided by operating activities |
$5,674 |
|
$1,626 |
|
| |
|
|
|
|
| Net cash used in investing activities |
(810 |
) |
(192 |
) |
| Net cash used in financing activities |
(4,552 |
) |
(972 |
) |
| Effect of exchange rate changes |
(33 |
) |
(28 |
) |
| Increase in cash and cash equivalents |
$279 |
|
$434 |
|
| |
Thirty-Nine Week
Periods Ended |
|
| |
September 29, 2018 |
|
September 30, 2017 |
|
| Net income |
$2,116 |
|
$1,759 |
|
| Adjustments to reconcile net income to cash
provided by operating activities |
2,527 |
|
3,026 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
(1,664 |
) |
3,682 |
|
|
|
Prepaid expenses and other current assets |
(593 |
) |
230 |
|
|
|
Net of transit accounts receivable and payable |
(1,560 |
) |
(1,189 |
) |
|
|
Accounts payable and accrued expenses |
(219 |
) |
(1,313 |
) |
|
|
Accrued payroll and related costs |
905 |
|
(185 |
) |
|
|
Income taxes payable |
552 |
|
946 |
|
| Total adjustments |
(52 |
) |
5,197 |
|
| Cash provided by operating activities |
$2,064 |
|
$6,956 |
|
| |
|
|
|
|
| Net cash used in investing activities |
(1,423 |
) |
(743 |
) |
| Net cash used in financing activities |
(2,735 |
) |
(5,621 |
) |
| Effect of exchange rate changes |
(47 |
) |
(46 |
) |
| (Decrease) increase in cash and cash
equivalents |
($2,141 |
) |
$546 |
|
| RCM Technologies,
Inc.Summary of Selected Income Statement
Data(Unaudited)(In
Thousands) |
|
|
Thirteen Week Period
Ended September 29, 2018 |
|
|
|
Engineering |
|
SpecialtyHealth Care |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$19,424 |
|
$15,106 |
|
$8,029 |
|
$42,559 |
|
|
Cost of services |
14,049 |
|
11,665 |
|
5,857 |
|
31,571 |
|
|
Gross Profit |
$5,375 |
|
$3,441 |
|
$2,172 |
|
$10,988 |
|
|
Gross Profit Margin |
27.7 |
% |
22.8 |
% |
27.1 |
% |
25.8 |
% |
|
|
Thirteen Week Period
Ended September 30, 2017 |
|
|
|
Engineering |
|
SpecialtyHealth Care |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$21,708 |
|
$14,335 |
|
$7,784 |
|
$43,827 |
|
|
Cost of services |
15,533 |
|
10,805 |
|
5,771 |
|
32,109 |
|
|
Gross Profit |
$6,175 |
|
$3,530 |
|
$2,013 |
|
$11,718 |
|
|
Gross Profit Margin |
28.4 |
% |
24.6 |
% |
25.9 |
% |
26.7 |
% |
|
|
Thirty-Nine Week Period
Ended September 29, 2018 |
|
|
|
Engineering |
|
SpecialtyHealth Care |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$62,412 |
|
$60,599 |
|
$22,070 |
|
$145,081 |
|
|
Cost of services |
45,706 |
|
46,822 |
|
16,275 |
|
108,803 |
|
|
Gross Profit |
$16,706 |
|
$13,777 |
|
$5,795 |
|
$36,278 |
|
|
Gross Profit Margin |
26.8 |
% |
22.7 |
% |
26.3 |
% |
25.0 |
% |
|
|
Thirty-Nine Week Period
Ended September 30, 2017 |
|
|
|
Engineering |
|
SpecialtyHealth Care |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$61,517 |
|
$49,212 |
|
$24,951 |
|
$135,680 |
|
|
Cost of services |
44,598 |
|
37,069 |
|
18,430 |
|
100,097 |
|
|
Gross Profit |
$16,919 |
|
$12,143 |
|
$6,521 |
|
$35,583 |
|
|
Gross Profit Margin |
27.5 |
% |
24.7 |
% |
26.1 |
% |
26.2 |
% |
|
RCM Technologies, Inc. |
Tel: 856.356.4500 |
Corporate Contacts: |
|
2500 McClellan Avenue |
Fax: 856.356.4600 |
Bradley S. Vizi |
|
Pennsauken, NJ 08109 |
info@rcmt.com |
Executive Chairman |
|
|
www.rcmt.com |
Kevin D. Miller |
|
|
|
Chief Financial Officer |
RCM Technologies (NASDAQ:RCMT)
Historical Stock Chart
From Mar 2024 to Apr 2024
RCM Technologies (NASDAQ:RCMT)
Historical Stock Chart
From Apr 2023 to Apr 2024
