EX-99 2 pressrel.htm PRESS RELEASE 11/5/15 pressrel.htm
 
RCM Technologies, Inc.
Tel:  856.356.4500
Corporate Contacts:
2500 McClellan Avenue
Fax: 856.356.4600
Rocco Campanelli
Pennsauken, NJ 08109
info@rcmt.com
President & CEO
 
www.rcmt.com
Kevin D. Miller
   
Chief Financial Officer

 
P R E S S   R E L E A S E

RCM TECHNOLOGIES, INC. ANNOUNCES THIRD QUARTER RESULTS

Pennsauken, NJ – November 5, 2015 -- 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, information technology and specialty health care services, today announced financial results for the thirteen and thirty-nine week periods ended October 3, 2015.

RCM Technologies reported revenues of $45.1 million for the thirteen week period ended October 3, 2015, a 2.8% decrease as compared to $46.4 million for the thirteen week period ended September 27, 2014 (the comparable prior year period). Gross profit was $12.8 million for the thirteen week period ended October 3, 2015, a 2.7% decrease as compared to $13.2 million for the comparable prior year period.  Operating income was $1.9 million for the thirteen week period ended October 3, 2015, a 32.7% decrease as compared to $2.8 million for the comparable prior year period. Net income for the thirteen week period ended October 3, 2015 was $1.0 million, or $0.07 per diluted share, as compared to $1.9 million, or $0.15 per diluted share, for the comparable prior year period.

The Company reported revenues of $138.3 million for the thirty-nine week period ended October 3, 2015, a 4.2% decrease as compared to $144.5 million for the thirty-nine week period ended September 27, 2014 (the comparable prior year period). Gross profit was $38.2 million for the thirty-nine week period ended October 3, 2015, as compared to $38.4 million for the comparable prior year period.  Operating income was $5.5 million for the thirty-nine week period ended October 3, 2015, a 30.7% decrease as compared to $7.9 million for the comparable prior year period. Net income for the thirty-nine week period ended October 3, 2015 was $3.0 million, or $0.23 per diluted share, as compared to $5.1 million, or $0.40 per diluted share, for the comparable prior year period.

Rocco Campanelli, President and Chief Executive Officer of RCM Technologies, commented, “While cognizant of the lower year over year consolidated comparisons of our operating results, we are pleased to see the improvement in our third quarter of 2015 results as compared to our second quarter of 2015. We are also observing encouraging signs in several of our businesses on a year over year basis.  Our Specialty Healthcare Staffing segment continues to reach new heights as their third quarter, which is typically a seasonal low, achieved another record result with $10.7 million in revenues. Our healthcare revenues grew by almost 50% as compared to the third quarter of 2014. Our Information Technology segment continued its steady performance and grew by 5.3% in the third quarter of 2015 as compared to the third quarter of 2014 despite our two largest life sciences clients from fiscal 2014 declining by $2.0 million in revenues. Our Engineering segment improved their gross profit contribution to $4.9 million in the third quarter of 2015 as compared to our disappointing second quarter of 2015 gross profit of $4.3 million. We are very excited about the master services agreement signed with Bruce Power during the quarter and expect that contract to act as a springboard for an improved fiscal 2016.”

Kevin Miller, Chief Financial Officer of RCM Technologies, added, “We are happy to see a rebound from our second quarter of 2015. We also generated $10.0 million in cash flow from operations and improved our net debt position to $10.5 million. We expect to see continued strong cash flow from operations in the fourth quarter.”

 
 
 

Conference Call
On Friday, November 6, 2015, 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) 240-5139.

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” 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
  
 
October 3,
2015
  
September 27,
2014
  
Revenues
$45,077
  
$46,382
  
Cost of services
32,275
  
33,221
  
Gross profit
12,802
  
13,161
  
Selling, general and administrative
10,462
  
9,991
  
Depreciation and amortization
434
  
337
  
Operating income
1,906
  
2,833
  
Other (expense) income, net
(174
)
6
  
Income before income taxes
1,732
  
2,839
  
Income tax expense
770
  
962
  
Net income
$962
  
$1,877
  
         
Diluted net earnings per share data
$0.07
  
$0.15
  

 
Thirty-Nine Week Periods Ended
  
 
October 3,
2015
  
September 27,
2014
  
Revenues
$138,329
  
$144,460
  
Cost of services
100,134
  
106,087
  
Gross profit
38,195
  
38,373
  
Selling, general and administrative
31,640
  
29,592
  
Depreciation and amortization
1,084
  
885
  
Operating income
5,471
  
7,896
  
Other expense, net
(427
)
(19
)
Income before income taxes
5,044
  
7,877
  
Income tax expense
2,005
  
2,780
  
Net income
$3,039
  
$5,097
  
         
Diluted net earnings per share data
$0.23
  
$0.40
  

RCM Technologies, Inc.
Summary Consolidated Selected Balance Sheet Data
 (In Thousands)

 
October 3,
2015
  
January 3,
2015
  
 
(Unaudited)
      
Cash and cash equivalents
$4,542
  
$6,411
  
Accounts receivable, net
$52,766
  
$59,187
  
Total current assets
$64,328
  
$72,579
  
Total assets
$81,674
  
$87,273
  
Total current liabilities
$21,068
  
$23,633
  
Borrowing under line of credit
$15,000
  
$20,000
  
Net debt (borrowings less cash)
$10,458
  
$13,589
  
Total liabilities
$37,589
  
$44,408
  
Stockholders’ equity
$44,085
  
$42,865
  
Treasury stock
$8,037
  
$7,529
  

 
 
 

RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
 (Unaudited)
(In Thousands)

 
Thirteen Week Periods Ended
  
 
October 3,
2015
  
September 27,
2014
  
Net income
$962
  
$1,877
  
Adjustments to reconcile net income to cash
  provided by operating activities
1,072
  
1,341
  
Changes in operating assets and liabilities
        
 
Accounts receivable
6,717
  
(1,609
)
 
Prepaid expenses and other current assets
130
  
1,450
  
 
Net of transit accounts receivable and payable
(478
)
(2,404
)
 
Accounts payable and accrued expenses
1,174
  
(2,798
)
 
Accrued payroll and related costs
(248
)
(931
)
 
Income taxes payable
634
  
351
  
Total adjustments
9,001
  
(4,600
)
Cash provided by (used in) operating activities
$9,963
  
($2,723
)
         
Net cash used in investing activities
(2,357
)
(616
)
Net cash (used in) provided by financing activities,
principally repayment of borrowings under
line of credit
(5,314
)
202
  
Effect of exchange rate changes
(396
)
(169
)
Increase (decrease) in cash and cash equivalents
$1,896
  
($3,306
)


 
Thirty-Nine Week Periods Ended
  
 
October 3,
2015
  
September 27,
2014
  
Net income
$3,039
  
$5,097
  
Adjustments to reconcile net income to cash
  provided by operating activities
3,204
  
3,578
  
Changes in operating assets and liabilities
        
 
Accounts receivable
3,272
  
(5,645
)
 
Prepaid expenses and other current assets
(45
)
(426
)
 
Net of transit accounts receivable and payable
(2,263
)
131
  
 
Accounts payable and accrued expenses
251
  
(968
)
 
Accrued payroll and related costs
(175
)
(882
)
 
Income taxes payable
205
  
299
  
Total adjustments
4,449
  
(3,913
)
Cash provided by operating activities
$7,488
  
$1,184
  
         
Net cash used in investing activities
(3,333
)
(2,023
)
Net cash (used in) provided by financing activities
(5,206
)
292
  
Effect of exchange rate changes
(818
)
(465
)
Decrease in cash and cash equivalents
($1,869
)
($1,012
)


 
 
 

RCM Technologies, Inc.
Summary of Selected Income Statement Data
 (Unaudited)
(In Thousands)


 
Thirteen Week Period Ended October 3, 2015
  
 
Engineering
  
Information
Technology
  
Specialty
Health Care
  
 
Consolidated
  
                 
Revenue
$19,224
  
$15,171
  
$10,682
  
$45,077
  
Cost of services
14,325
  
10,477
  
7,473
  
32,275
  
Gross Profit
$4,899
  
$4,694
  
$3,209
  
$12,802
  
Gross Margin
25.5
%
30.9
%
30.0
%
28.4
%



 
Thirteen Week Period Ended September 27, 2014
  
 
Engineering
  
Information
Technology
  
Specialty
Health Care
  
 
Consolidated
  
                 
Revenue
$24,835
  
$14,405
  
$7,142
  
$46,382
  
Cost of services
18,239
  
9,941
  
5,041
  
33,221
  
Gross Profit
$6,596
  
$4,464
  
$2,101
  
$13,161
  
Gross Margin
26.6
%
31.0
%
29.4
%
28.4
%



 
Thirty-Nine Week Period Ended October 3, 2015
  
 
Engineering
  
Information
Technology
  
Specialty
Health Care
  
 
Consolidated
  
                 
Revenue
$61,843
  
$44,684
  
$31,802
  
$138,329
  
Cost of services
46,989
  
30,904
  
22,241
  
100,134
  
Gross Profit
$14,854
  
$13,780
  
$9,561
  
$38,195
  
Gross Margin
24.0
%
30.8
%
30.1
%
27.6
%



 
Thirty-Nine Week Period Ended September 27, 2014
  
 
Engineering
  
Information
Technology
  
Specialty
Health Care
  
 
Consolidated
  
                 
Revenue
$75,615
  
$44,076
  
$24,769
  
$144,460
  
Cost of services
57,695
  
30,734
  
17,658
  
106,087
  
Gross Profit
$17,920
  
$13,342
  
$7,111
  
$38,373
  
Gross Margin
23.7
%
30.3
%
28.7
%
26.6
%