RCM Technologies, Inc. Announces First Quarter Results
May 08 2019 - 4:05PM
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 week period ended March 30, 2019.
RCM Technologies reported revenues of $51.6 million for the
thirteen week period ended March 30, 2019, a 1.5% increase as
compared to $50.8 million for the thirteen week period ended March
31, 2018 (the comparable prior year period). Gross profit was $12.5
million for the thirteen week period ended March 30, 2019, a
marginal decrease as compared to $12.6 million for the comparable
prior year period. The Company experienced GAAP operating
income of $1.7 million for both periods presented. GAAP net
income was $1.5 million, or $0.11 per diluted share, for the
thirteen week period ended March 30, 2019 as compared to $1.0
million, or $0.09 per diluted share, for the comparable prior year
period.
Bradley Vizi, Executive Chairman of RCM Technologies, commented,
“We are pleased with our first quarter 2019 results relative to
recent expectations. More importantly, we continue to believe we
are poised for strong second half performance in fiscal 2019.”
Kevin Miller, Chief Financial Officer of RCM Technologies,
added, “As operating performance builds throughout the year, we
anticipate disproportionate and significant positive cash
generation as accounts receivable balances normalize.”
Conference CallOn Thursday, May 9, 2019, 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 (866) 403-9129.
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.
Tables to Follow
RCM Technologies,
Inc.Condensed Consolidated Statements of
Income(Unaudited) (In
Thousands, Except Per Share Amounts)
|
Thirteen Week Periods Ended |
|
|
March 30,2019 |
|
March 31,2018 |
|
Revenues |
$51,595 |
|
$50,812 |
|
Cost of services |
39,078 |
|
|
38,257 |
|
Gross profit |
12,517 |
|
|
12,555 |
|
Selling, general and
administrative |
10,466 |
|
|
10,421 |
|
Depreciation and amortization
of property and equipment |
315 |
|
|
397 |
|
Amortization of acquired
intangible assets |
82 |
|
|
17 |
|
Operating income |
1,654 |
|
|
1,720 |
|
Other expense, net |
(465 |
) |
|
(307 |
) |
Income before income
taxes |
1,189 |
|
|
1,413 |
|
Income tax (benefit)
expense |
(274 |
) |
|
362 |
|
Net income |
$1,463 |
|
$1,051 |
|
|
|
|
|
|
Diluted net earnings per share
data |
$0.11 |
|
$0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCM Technologies,
Inc.Summary Consolidated Selected Balance Sheet
Data (In Thousands)
|
March 30,2019 |
|
December 29,2018 |
|
(Unaudited) |
|
|
Cash and cash equivalents |
$1,693 |
|
$482 |
Accounts receivable, net |
$58,613 |
|
$52,335 |
Total current assets |
$64,626 |
|
$58,811 |
Total assets |
$92,811 |
|
$81,510 |
Total current liabilities |
$21,255 |
|
$23,188 |
Borrowing under line of
credit |
$34,429 |
|
$27,540 |
Net debt (borrowings less
cash) |
$32,736 |
|
$27,058 |
Total liabilities |
$63,732 |
|
$54,311 |
Stockholders’ equity |
$29,079 |
|
$27,199 |
|
|
|
|
|
|
|
|
|
|
|
|
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 week periods ended
March 30, 2019 and March 31, 2018.
|
Thirteen Week Periods Ended |
|
March 30,2019 |
|
|
March 31,2018 |
GAAP net income |
$1,463 |
|
|
$1,051 |
Income tax (benefit) expense |
(274 |
) |
|
362 |
Interest expense |
428 |
|
|
266 |
Imputed interest on contingent
consideration |
48 |
|
|
- |
Depreciation of property and
equipment |
315 |
|
|
397 |
Amortization of acquired intangible assets |
82 |
|
|
17 |
EBITDA
(non-GAAP) |
$2,062 |
|
|
$2,093 |
|
|
|
|
|
Adjustments |
|
|
|
|
(Gain) loss on foreign currency transactions |
(11 |
) |
|
41 |
Adjusted EBITDA (non-GAAP) |
$2,051 |
|
|
$2,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCM Technologies,
Inc.Condensed Consolidated Statements of
Cash Flows(Unaudited)(In
Thousands)
|
Thirteen Week Periods Ended |
|
|
March 30, 2019 |
|
|
March 31, 2018 |
|
Net income |
$1,463 |
|
|
$1,051 |
|
Adjustments to
reconcile net income to cash used in operating
activities |
|
733 |
|
|
|
779 |
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(6,264 |
) |
|
|
(6,078 |
) |
|
Prepaid expenses and other
current assets |
|
110 |
|
|
|
(2 |
) |
|
Net of transit accounts
receivable and payable |
|
45 |
|
|
|
(1,243 |
) |
|
Accounts payable and accrued
expenses |
|
(826 |
) |
|
|
(1,212 |
) |
|
Accrued payroll and related
costs |
|
(872 |
) |
|
|
(70 |
) |
|
Right of use assets and
liabilities |
|
266 |
|
|
|
- |
|
|
Income taxes payable |
|
(210 |
) |
|
|
(269 |
) |
Total
adjustments |
|
(7,018 |
) |
|
|
(8,095 |
) |
Cash used in
operating activities |
($ |
5,555 |
) |
|
($ |
7,044 |
) |
|
|
|
|
|
|
Net cash used in
investing activities |
|
(102 |
) |
|
|
(300 |
) |
Net cash provided
by financing activities |
|
6,883 |
|
|
|
4,928 |
|
Effect of exchange
rate changes |
|
(15 |
) |
|
|
17 |
|
Increase
(decrease) in cash and cash equivalents |
$1,211 |
|
|
($ |
2,399 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCM Technologies,
Inc.Summary of Selected Income Statement
Data(Unaudited)(In
Thousands)
|
Thirteen Week Period Ended March 30, 2019 |
|
|
Engineering |
|
|
SpecialtyHealth Care |
|
|
InformationTechnology |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
19,055 |
|
|
$ |
24,171 |
|
|
$ |
8,369 |
|
|
$ |
51,595 |
|
Cost of services |
|
14,357 |
|
|
|
18,533 |
|
|
|
6,188 |
|
|
|
39,078 |
|
Gross Profit |
$ |
4,698 |
|
|
$ |
5,638 |
|
|
$ |
2,181 |
|
|
$ |
12,517 |
|
Gross Profit Margin |
|
24.7 |
% |
|
|
23.3 |
% |
|
|
26.1 |
% |
|
|
24.3 |
% |
|
Thirteen Week Period Ended March 31, 2018 |
|
|
Engineering |
|
|
SpecialtyHealth Care |
|
|
InformationTechnology |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$21,418 |
|
|
$22,634 |
|
|
$6,760 |
|
|
$50,812 |
|
Cost of services |
15,724 |
|
|
17,384 |
|
|
5,149 |
|
|
38,257 |
|
Gross Profit |
$5,694 |
|
|
$5,250 |
|
|
$1,611 |
|
|
$12,555 |
|
Gross Profit Margin |
26.6 |
% |
|
23.2 |
% |
|
23.8 |
% |
|
24.7 |
% |
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 |
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