[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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95--1480559
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(State or other Jurisdiction of Incorporation)
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(I.R.S. Employer Identification No.)
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Large Accelerated Filer [ ]
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Accelerated Filer [ ]
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Non-Accelerated Filer [ ]
(Do not check if a smaller reporting company)
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Smaller
Reporting
Company [X]
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Emerging
Growth
Company [ ]
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RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
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PART I - FINANCIAL INFORMATION
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||
Page
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||
Item 1.
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Consolidated Financial Statements
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|
Consolidated Balance Sheets as of September 30, 2017 (Unaudited)
and December 31, 2016
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3
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Unaudited Consolidated Statements of Income for the Thirteen and
Thirty-Nine Week Periods Ended September 30, 2017 and October 1, 2016
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4
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Unaudited Consolidated Statements of Comprehensive Income for the
Thirty-Nine Week Periods Ended September 30, 2017 and October 1, 2016
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5
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Unaudited Consolidated Statement of Changes in Stockholders' Equity
for the Thirty-Nine Week Period Ended September 30, 2017
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6
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Unaudited Consolidated Statements of Cash Flows for the
Thirty-Nine Week Periods Ended September 30, 2017 and October 1, 2016
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7
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Notes to Unaudited Consolidated Financial Statements
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8
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Item 2.
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Management's Discussion and Analysis of Financial Condition
and Results of Operations
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23
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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42
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Item 4.
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Controls and Procedures
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42
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PART II - OTHER INFORMATION
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||
Item 1.
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Legal Proceedings
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43
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Item 1A.
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Risk Factors
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43
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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43
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Item 3.
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Defaults Upon Senior Securities
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43
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Item 4.
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Mine Safety Disclosures
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43
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Item 5.
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Other Information
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43
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Item 6.
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Exhibits
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44
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Signatures
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45
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ITEM 1.
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CONSOLIDATED FINANCIAL STATEMENTS
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September 30,
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December 31,
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|||||
2017
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2016
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|||||
(Unaudited)
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||||||
Current assets:
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||||||
Cash and cash equivalents
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$825
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$279
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||||
Accounts receivable, net
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41,942
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45,170
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||||
Transit accounts receivable
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1,664
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4,295
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||||
Prepaid expenses and other current assets
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3,212
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3,327
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||||
Total current assets
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47,643
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53,071
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||||
Property and equipment, net
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3,619
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4,052
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||||
Other assets:
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||||||
Deposits
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207
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212
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||||
Goodwill
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12,458
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12,325
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||||
Intangible assets, net
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121
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171
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||||
Total other assets
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12,786
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12,708
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||||
Total assets
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$64,048
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$69,831
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Current liabilities:
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||||||
Accounts payable and accrued expenses
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$7,096
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$8,154
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||||
Transit accounts payable
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2,968
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6,776
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||||
Accrued payroll and related costs
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7,089
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7,185
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||||
Income taxes payable
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1,514
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537
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||||
Contingent consideration
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992
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1,061
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||||
Total current liabilities
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19,659
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23,713
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||||
Deferred tax liability, domestic
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441
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148
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||||
Deferred tax liability, foreign
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254
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234
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||||
Contingent consideration
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240
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170
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||||
Borrowings under line of credit
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9,451
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14,311
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||||
Total liabilities
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30,045
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38,576
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||||
Stockholders' equity:
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||||||
Preferred stock, $1.00 par value; 5,000,000 shares authorized;
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||||||
no shares issued or outstanding
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-
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-
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||||
Common stock, $0.05 par value; 40,000,000 shares authorized;
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||||||
14,832,871 shares issued and 12,009,699 shares outstanding at
September 30, 2017 and 14,716,940 shares issued and 11,953,080 shares outstanding at December 31, 2016
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741
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736
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||||
Additional paid-in capital
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116,587
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115,607
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Accumulated other comprehensive loss
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(2,209
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)
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(2,578
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)
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Accumulated deficit
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(66,129
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)
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(67,888
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)
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Treasury stock (2,823,172 shares at September 30, 2017 and
2,763,860 shares at December 31, 2016, at cost)
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(14,987
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)
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(14,622
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)
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||
Stockholders' equity
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34,003
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31,255
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Total liabilities and stockholders' equity
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$64,048
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$69,831
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RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Thirteen and Thirty-Nine Week Periods Ended September 30, 2017 and October 1, 2016
(Unaudited)
(In thousands, except per share amounts)
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Thirteen Weeks Ended
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Thirty-Nine Weeks Ended
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||||||||
September 30,
2017
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October 1,
2016
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September 30,
2017
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October 1,
2016
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||||||
Revenues
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$43,827
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$39,695
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$135,680
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$132,250
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|||||
Cost of services
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32,109
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29,551
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100,097
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97,326
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|||||
Gross profit
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11,718
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10,144
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35,583
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34,924
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|||||
Operating costs and expenses
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|||||||||
Selling, general and administrative
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9,700
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9,334
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30,092
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29,976
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|||||
Depreciation and amortization
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422
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388
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1,229
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1,177
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|||||
Change in contingent consideration
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-
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-
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781
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-
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|||||
10,122
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9,722
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32,102
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31,153
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||||||
Operating income
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1,596
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422
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3,481
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3,771
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|||||
Other (expense) income
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|||||||||
Interest expense and other, net
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(137
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)
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(114
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)
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(409
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)
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(422
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)
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(Loss) gain on foreign currency transactions
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(17
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)
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(14
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)
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38
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9
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|||
(154
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)
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(128
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)
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(371
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)
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(413
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)
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Income before income taxes
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1,442
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294
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3,110
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3,358
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|||||
Income tax expense
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422
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184
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1,351
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1,384
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|||||
Net income
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$1,020
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$110
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$1,759
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$1,974
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Basic and diluted net earnings per share
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$0.08
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$0.01
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$0.15
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$0.16
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RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Thirty-Nine Week Periods Ended September 30, 2017 and October 1, 2016
(Unaudited)
(In thousands)
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September 30,
2017
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October 1,
2016
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|||
Net income
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$1,759
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$1,974
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Other comprehensive income
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369
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398
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||
Comprehensive income
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$2,128
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$2,372
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RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Thirty-Nine Week Period Ended September 30, 2017
(Unaudited)
(In thousands, except share amounts)
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Common Stock
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Additional
Paid-in
Capital
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Accumulated
Other
Comprehensive
Loss
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Accumulated
Deficit
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Treasury Stock
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Total
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|||||||||||
Issued
Shares
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Amount
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Shares
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Amount
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|||||||||||||
Balance, December 31, 2016
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14,716,940
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$736
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$115,607
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($2,578
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)
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($67,888
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)
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2,763,860
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($14,622
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)
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$31,255
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|||||
Issuance of stock under
employee stock purchase plan
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90,931
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4
|
390
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-
|
-
|
-
|
-
|
394
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||||||||
Translation adjustment
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-
|
-
|
-
|
369
|
-
|
-
|
-
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369
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||||||||
Share-based compensation expense
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-
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-
|
591
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-
|
-
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-
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-
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591
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||||||||
Issuance of stock upon vesting of
restricted stock awards
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25,000
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1
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(1
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)
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-
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-
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-
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-
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-
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|||||||
Common stock repurchase
|
-
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-
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-
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-
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-
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59,312
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(365
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)
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(365
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)
|
||||||
Net income
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-
|
-
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-
|
-
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1,759
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-
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-
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1,759
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||||||||
Balance, September 30, 2017
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14,832,871
|
$741
|
$116,587
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($2,209
|
)
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($66,129
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)
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2,823,172
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($14,987
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)
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$34,003
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RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Thirty-Nine Week Periods Ended September 30, 2017 and October 1, 2016
(Unaudited)
(In thousands)
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September 30,
2017
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October 1,
2016
|
||||||
Cash flows from operating activities:
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|||||||
Net income
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$1,759
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$1,974
|
|||||
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
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|||||||
Depreciation and amortization
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1,229
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1,177
|
|||||
Change in contingent consideration
|
781
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-
|
|||||
Share-based compensation expense
|
591
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614
|
|||||
Provision for losses on accounts receivable
|
131
|
(128
|
)
|
||||
Deferred income tax expense
|
294
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312
|
|||||
Changes in assets and liabilities:
|
|||||||
Accounts receivable
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3,682
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8,600
|
|||||
Prepaid expenses and other current assets
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230
|
1,847
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|||||
Net of transit accounts receivable and payable
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(1,189
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)
|
864
|
||||
Accounts payable and accrued expenses
|
(1,313
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)
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(1,746
|
)
|
|||
Accrued payroll and related costs
|
(185
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)
|
(2,334
|
)
|
|||
Income taxes payable
|
946
|
948
|
|||||
Total adjustments
|
5,197
|
10,154
|
|||||
Net cash provided by operating activities
|
6,956
|
12,128
|
|||||
Cash flows from investing activities:
|
|||||||
Property and equipment acquired
|
(747
|
)
|
(732
|
)
|
|||
Decrease in deposits
|
4
|
3
|
|||||
Net cash used in investing activities
|
(743
|
)
|
(729
|
)
|
|||
Cash flows from financing activities:
|
|||||||
Borrowings under line of credit
|
60,411
|
59,187
|
|||||
Repayments under line of credit
|
(65,271
|
)
|
(69,036
|
)
|
|||
Issuance of stock for employee stock purchase plan
|
394
|
368
|
|||||
Common stock repurchases
|
(365
|
)
|
(1,828
|
)
|
|||
Contingent consideration paid
|
(790
|
)
|
(788
|
)
|
|||
Net cash used in financing activities
|
(5,621
|
)
|
(12,097
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(46
|
)
|
16
|
||||
Increase (decrease) in cash and cash equivalents
|
546
|
(682
|
)
|
||||
Cash and cash equivalents at beginning of period
|
279
|
985
|
|||||
Cash and cash equivalents at end of period
|
$825
|
$303
|
|||||
Supplemental cash flow information:
|
|||||||
Cash paid for:
|
|||||||
Interest
|
$366
|
$363
|
|||||
Income taxes
|
$340
|
$113
|
|||||
Non-cash investing activities:
|
|||||||
Non-cash consideration for business acquisition
|
$133
|
$ -
|
|||||
Non-cash financing activities:
|
|||||||
Vesting of restricted stock units
|
$117
|
$ -
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
1.
|
Basis of Presentation
|
2.
|
Fiscal Year
|
Period Ended
|
Weeks in Quarter
|
Weeks in Year to Date
|
September 30, 2017
|
Thirteen
|
Thirty-Nine
|
October 1, 2016
|
Thirteen
|
Thirty-Nine
|
3.
|
Use of Estimates and Uncertainties
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
3.
|
Use of Estimates and Uncertainties (Continued)
|
4. |
Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable
|
September 30,
2017
|
December 31,
2016
|
|||
Billed
|
$29,322
|
$34,463
|
||
Accrued and unbilled
|
8,911
|
6,894
|
||
Work-in-progress
|
4,770
|
5,215
|
||
Allowance for sales discounts and doubtful accounts
|
(1,061
|
)
|
(1,402
|
)
|
Accounts receivable, net
|
$41,942
|
$45,170
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
5. |
Property and Equipment
|
September 30,
2017
|
December 31,
2016
|
||
Equipment and furniture
|
$912
|
$1,045
|
|
Computers and systems
|
5,981
|
5,521
|
|
Leasehold improvements
|
857
|
804
|
|
7,750
|
7,370
|
||
Less: accumulated depreciation and amortization
|
4,131
|
3,318
|
|
Property and equipment, net
|
$3,619
|
$4,052
|
6. |
Acquisitions
|
Fiscal Year Ended
|
Total
|
December 30, 2017 (after September 30, 2017)
|
$992
|
December 30, 2018
|
240
|
Estimated future contingent consideration payments
|
$1,232
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
6. |
Acquisitions (Continued)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
7. |
Goodwill (Continued)
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Total
|
||||
Balance as of December 31, 2016
|
$4,411
|
$2,398
|
$5,516
|
$12,325
|
|||
Goodwill recorded, RAF
|
133
|
-
|
-
|
133
|
|||
Balance as of September 30, 2017
|
$4,544
|
$2,398
|
$5,516
|
$12,458
|
8. |
Intangible Assets
|
Thirty-Nine Weeks Ended
|
||||
September 30,
2017
|
October 1,
2016
|
|||
Beginning balance
|
$171
|
$252
|
||
Amortization of intangibles during the
thirty-nine week period presented
|
(50
|
)
|
(63
|
)
|
Ending balance
|
$121
|
$189
|
9. |
Line of Credit
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
9. |
Line of Credit (Continued)
|
10. |
Per Share Data
|
Thirteen Week Periods Ended
|
Thirty-Nine Week Periods Ended
|
||||||
September 30,
2017
|
October 1,
2016
|
September 30,
2017
|
October 1,
2016
|
||||
Basic weighted average shares
outstanding
|
12,009,181
|
12,295,493
|
11,972,600
|
12,380,617
|
|||
Dilutive effect of outstanding stock
options and restricted stock awards
|
141,914
|
136,150
|
116,610
|
102,817
|
|||
Weighted average dilutive shares
outstanding
|
12,151,095
|
12,431,643
|
12,089,210
|
12,483,434
|
September 30,
2017
|
December 31,
2016
|
||
Exercise of options outstanding
|
17,000
|
42,000
|
|
Time-based restricted stock units outstanding
|
212,734
|
197,734
|
|
Performance-based restricted stock units outstanding
|
400,000
|
200,000
|
|
Future grants of options or shares
|
379,266
|
619,266
|
|
Shares reserved for employee stock purchase plan
|
177,280
|
268,211
|
|
Total
|
1,186,280
|
1,327,211
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
11. |
Share-Based Compensation (Continued)
|
|
All Stock Options Outstanding
|
|
||
|
Shares
|
|
Weighted Average
Exercise Price
|
|
Options outstanding as of December 31, 2016
|
42,000
|
$8.27
|
|
|
Options granted
|
-
|
|||
Options exercised
|
-
|
|
||
Options forfeited/cancelled
|
(25,000
|
)
|
|
|
|
|
|||
Options outstanding as of September 30, 2017
|
17,000
|
$6.00
|
|
|
|
|
|||
Options outstanding price range at September 30, 2017
|
$5.27 - $6.10
|
|
||
Options exercisable as of September 30, 2017
|
17,000
|
$6.00
|
||
Intrinsic value of outstanding stock options as of
September 30, 2017
|
$1
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
11. |
Share-Based Compensation (Continued)
|
Number of
Time-Based
Restricted
Stock Units
|
Weighted
Average
Grant Date Fair
Value per Share
|
||
Outstanding non-vested at December 31, 2016
|
197,734
|
$7.33
|
|
Granted
|
40,000
|
$5.05
|
|
Vested
|
(25,000
|
)
|
$5.41
|
Forfeited or expired
|
-
|
-
|
|
Outstanding non-vested at September 30, 2017
|
212,734
|
$7.12
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
11. |
Share-Based Compensation (Continued)
|
Number of
Performance-Based
Restricted
Stock Units
|
Weighted
Average
Grant Date Fair
Value per Share
|
||
Outstanding non-vested at December 31, 2016
|
200,000
|
$5.36
|
|
Granted
|
200,000
|
$4.85
|
|
Vested
|
-
|
-
|
|
Forfeited or expired
|
-
|
-
|
|
Outstanding non-vested at September 30, 2017
|
400,000
|
$5.11
|
12. |
Treasury Stock Transactions
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
13. |
New Accounting Standards
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
13. |
New Accounting Standards (Continued)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
14. |
Segment Information
|
Thirteen Week Period Ended
September 30, 2017
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Corporate
|
Total
|
||||
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
|
||||
Selling, general and administrative
|
3,968
|
3,750
|
1,982
|
-
|
9,700
|
||||
Depreciation and amortization
|
297
|
86
|
39
|
-
|
422
|
||||
Operating income (loss)
|
$1,910
|
($306
|
)
|
($8
|
)
|
$ -
|
$1,596
|
||
Total assets as of September 30, 2017
|
$33,721
|
$16,178
|
$10,212
|
$3,937
|
$64,048
|
||||
Capital expenditures
|
$138
|
$44
|
$ -
|
$13
|
$195
|
Thirteen Week Period Ended
October 1, 2016
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Corporate
|
Total
|
||||
Revenue
|
$17,591
|
$12,035
|
$10,069
|
$ -
|
$39,695
|
||||
Cost of services
|
13,292
|
8,924
|
7,335
|
-
|
29,551
|
||||
Gross profit
|
4,299
|
3,111
|
2,734
|
-
|
10,144
|
||||
Selling, general and administrative
|
3,606
|
3,151
|
2,577
|
-
|
9,334
|
||||
Depreciation and amortization
|
281
|
59
|
48
|
-
|
388
|
||||
Operating income
|
$412
|
($99
|
)
|
$109
|
$ -
|
$422
|
|||
Total assets as of October 1, 2016
|
$34,019
|
$15,770
|
$12,336
|
$3,767
|
$65,892
|
||||
Capital expenditures
|
$61
|
$ -
|
$10
|
$4
|
$75
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
14. |
Segment Information (Continued)
|
Thirty-Nine Week Period Ended
September 30, 2017
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Corporate
|
Total
|
||||
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
|
||||
Selling, general and administrative
|
12,184
|
11,429
|
6,479
|
-
|
30,092
|
||||
Change in contingent consideration
|
-
|
-
|
-
|
781
|
781
|
||||
Depreciation and amortization
|
863
|
246
|
120
|
-
|
1,229
|
||||
Operating income (loss)
|
$3,872
|
$468
|
($78
|
)
|
($781
|
)
|
$3,481
|
||
Total assets as of September 30, 2017
|
$33,721
|
$16,178
|
$10,212
|
$3,937
|
$64,048
|
||||
Capital expenditures
|
$247
|
$459
|
$ -
|
$41
|
$747
|
Thirty-Nine Week Period Ended
October 1, 2016
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Corporate
|
Total
|
||||
Revenue
|
$55,019
|
$43,465
|
$33,766
|
$ -
|
$132,250
|
||||
Cost of services
|
40,859
|
32,012
|
24,455
|
-
|
97,326
|
||||
Gross profit
|
14,160
|
11,453
|
9,311
|
-
|
34,924
|
||||
Selling, general and administrative
|
11,355
|
10,202
|
8,419
|
-
|
29,976
|
||||
Depreciation and amortization
|
840
|
188
|
149
|
-
|
1,177
|
||||
Operating income
|
$1,965
|
$1,063
|
$743
|
$ -
|
$3,771
|
||||
Total assets as of October 1, 2016
|
$34,019
|
$15,770
|
$12,336
|
$3,767
|
$65,892
|
||||
Capital expenditures
|
$516
|
$128
|
$58
|
$30
|
$732
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
14. |
Segment Information (Continued)
|
Thirteen Week Periods Ended
|
Thirty-Nine Week Periods Ended
|
||||||||
September 30, 2017
|
October 1,
2016
|
September 30, 2017
|
October 1,
2016
|
||||||
Revenues
|
|||||||||
U. S.
|
$34,207
|
$32,851
|
$110,083
|
$110,158
|
|||||
Canada
|
8,703
|
5,545
|
22,420
|
18,149
|
|||||
Puerto Rico
|
917
|
1,299
|
3,177
|
3,943
|
|||||
$43,827
|
$39,695
|
$135,680
|
$132,250
|
September 30,
2017
|
December 31,
2016
|
||||
Total assets
|
|||||
U. S.
|
$45,895
|
$53,842
|
|||
Canada
|
16,227
|
13,953
|
|||
Puerto Rico
|
1,926
|
2,036
|
|||
$64,048
|
$69,831
|
15. |
Income Taxes
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
September 30, 2017
|
October 1, 2016
|
|||||||
Amount
|
% of Revenue
|
Amount
|
% of Revenue
|
|||||
Revenues
|
$43,827
|
100.0
|
$39,695
|
100.0
|
||||
Cost of services
|
32,109
|
73.3
|
29,551
|
74.4
|
||||
Gross profit
|
11,718
|
26.7
|
10,144
|
25.6
|
||||
Selling, general and administrative
|
9,700
|
22.1
|
9,334
|
23.5
|
||||
Depreciation and amortization
|
422
|
1.0
|
388
|
1.0
|
||||
10,122
|
23.1
|
9,722
|
24.5
|
|||||
Operating income
|
1,596
|
3.6
|
422
|
1.1
|
||||
Interest expense, net and foreign currency transactions
|
(154
|
)
|
(0.3
|
)
|
(128
|
)
|
0.3
|
|
Income before income taxes
|
1,442
|
3.3
|
294
|
0.8
|
||||
Income tax expense
|
422
|
1.0
|
184
|
0.5
|
||||
Net income
|
$1,020
|
2.3
|
$110
|
0.3
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
September 30, 2017
|
October 1, 2016
|
|||||||
Amount
|
% of Revenue
|
Amount
|
% of Revenue
|
|||||
Revenues
|
$135,680
|
100.0
|
$132,250
|
100.0
|
||||
Cost of services
|
100,097
|
73.8
|
97,326
|
73.6
|
||||
Gross profit
|
35,583
|
26.2
|
34,924
|
26.4
|
||||
Selling, general and administrative
|
30,092
|
22.2
|
29,976
|
22.7
|
||||
Depreciation and amortization
|
1,229
|
0.9
|
1,177
|
0.9
|
||||
Change in contingent consideration
|
781
|
0.5
|
-
|
-
|
||||
32,102
|
23.6
|
31,153
|
23.6
|
|||||
Operating income
|
3,481
|
2.6
|
3,771
|
2.8
|
||||
Interest expense, net and foreign currency transactions
|
(371
|
)
|
(0.3
|
)
|
(413
|
)
|
0.3
|
|
Income before income taxes
|
3,110
|
2.3
|
3,358
|
2.5
|
||||
Income tax expense
|
1,351
|
1.0
|
1,384
|
1.0
|
||||
Net income
|
$1,759
|
1.3
|
$1,974
|
1.5
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
Thirteen Week Periods Ended
|
Thirty-Nine Week Periods Ended
|
|||||||
September 30, 2017
|
October 1,
2016
|
September 30, 2017
|
October 1,
2016
|
|||||
GAAP net income
|
$1,020
|
$110
|
$1,759
|
$1,974
|
||||
Income tax expense
|
422
|
184
|
1,351
|
1,384
|
||||
Interest expense
|
137
|
114
|
409
|
422
|
||||
Depreciation and amortization
|
422
|
388
|
1,229
|
1,177
|
||||
EBITDA (non-GAAP)
|
$2,001
|
$796
|
$4,748
|
$4,957
|
||||
Adjustments
|
||||||||
Change in contingent consideration
|
-
|
-
|
781
|
-
|
||||
Gain (loss) on foreign currency
transactions
|
17
|
14
|
(38
|
)
|
(9
|
)
|
||
Adjusted EBITDA (non-GAAP)
|
$2,018
|
$810
|
$5,491
|
$4,948
|
||||
GAAP net income
|
$1,020
|
$110
|
$1,759
|
$1,974
|
||||
Adjustments
|
||||||||
Change in contingent consideration
|
-
|
-
|
781
|
-
|
||||
Adjusted net income (non-GAAP)
|
$1,020
|
$110
|
$2,540
|
$1,974
|
||||
GAAP Diluted EPS
|
$0.08
|
$0.01
|
$0.15
|
$0.16
|
||||
Adjustments
|
||||||||
Change in contingent consideration
|
-
|
-
|
$0.06
|
-
|
||||
Adjusted Diluted EPS (non-GAAP)
|
$0.08
|
$0.01
|
$0.21
|
$0.16
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
Thirty-Nine Week Periods Ended
|
|||||
September 30,
2017
|
October 1,
2016
|
||||
Cash provided by (used in):
|
|||||
Operating activities
|
$6,956
|
$12,128
|
|||
Investing activities
|
($743
|
)
|
($729
|
)
|
|
Financing activities
|
($5,621
|
)
|
($12,097
|
)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
Fiscal Years
|
Amount
|
2017 (after September 30, 2017)
|
$856
|
2018
|
2,969
|
2019
|
1,632
|
2020
|
999
|
2021
|
489
|
Thereafter
|
304
|
Total
|
$7,249
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
Fiscal Year
|
Total
|
December 30, 2017 (after September 30, 2017)
|
$992
|
December 30, 2018
|
240
|
Estimated future contingent consideration payments
|
$1,232
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Certification of President and Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
Certification of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
Certification of President and Chief Executive Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
|
|
Certification of Chief Financial Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Documents
|
101.DEF*
|
XBRL Taxonomy Definition Linkbase Document
|
RCM TECHNOLOGIES, INC.
SIGNATURES
|
RCM Technologies, Inc.
|
|||
Date: November 2, 2017
|
By: /s/ Rocco Campanelli
|
||
Rocco Campanelli
President and Chief Executive Officer
(Principal Executive Officer and
Duly Authorized Officer of the Registrant)
|
Date: November 2, 2017
|
By: /s/ Kevin D. Miller
|
||
Kevin D. Miller
Chief Financial Officer
(Principal Financial Officer and
Duly Authorized Officer of the Registrant)
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: November 2, 2017
|
/s/ Rocco Campanelli
Rocco Campanelli
President and Chief Executive Officer
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: November 2, 2017
|
/s/ Kevin D. Miller
Kevin D. Miller
Chief Financial Officer
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: November 2, 2017
|
/s/ Rocco Campanelli
Rocco Campanelli
President and Chief Executive Officer
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: November 2, 2017
|
/s/ Kevin D. Miller
Kevin D. Miller
Chief Financial Officer
|
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 01, 2017 |
|
Document Information [Line Items] | ||
Entity Registrant Name | RCM TECHNOLOGIES INC | |
Entity Central Index Key | 0000700841 | |
Trading Symbol | rcmt | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 12,011,699 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Preferred stock par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 14,832,871 | 14,716,940 |
Common stock, shares outstanding (in shares) | 12,009,699 | 11,953,080 |
Treasury stock, shares (in shares) | 2,823,172 | 2,763,860 |
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Revenues | $ 43,827 | $ 39,695 | $ 135,680 | $ 132,250 |
Cost of services | 32,109 | 29,551 | 100,097 | 97,326 |
Gross profit | 11,718 | 10,144 | 35,583 | 34,924 |
Operating costs and expenses | ||||
Selling, general and administrative | 9,700 | 9,334 | 30,092 | 29,976 |
Depreciation and amortization | 422 | 388 | 1,229 | 1,177 |
Change in contingent consideration | 781 | |||
10,122 | 9,722 | 32,102 | 31,153 | |
Operating income | 1,596 | 422 | 3,481 | 3,771 |
Other (expense) income | ||||
Interest expense and other, net | (137) | (114) | (409) | (422) |
(Loss) gain on foreign currency transactions | (17) | (14) | 38 | 9 |
(154) | (128) | (371) | (413) | |
Income before income taxes | 1,442 | 294 | 3,110 | 3,358 |
Income tax expense | 422 | 184 | 1,351 | 1,384 |
Net income | $ 1,020 | $ 110 | $ 1,759 | $ 1,974 |
Basic and diluted net earnings per share (in dollars per share) | $ 0.08 | $ 0.01 | $ 0.15 | $ 0.16 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Net income | $ 1,759 | $ 1,974 |
Other comprehensive income | 369 | 398 |
Comprehensive income | $ 2,128 | $ 2,372 |
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
AOCI Attributable to Parent [Member] |
Retained Earnings [Member] |
Treasury Stock [Member] |
Total |
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Balance (in shares) at Dec. 31, 2016 | 14,716,940 | 2,763,860 | ||||
Balance at Dec. 31, 2016 | $ 736 | $ 115,607 | $ (2,578) | $ (67,888) | $ (14,622) | $ 31,255 |
Issuance of stock under employee stock purchase plan (in shares) | 90,931 | |||||
Issuance of stock under employee stock purchase plan | $ 4 | 390 | 394 | |||
Translation adjustment | 369 | 369 | ||||
Share-based compensation expense | 591 | 591 | ||||
Issuance of stock upon vesting of restricted stock awards (in shares) | 25,000 | |||||
Issuance of stock upon vesting of restricted stock awards | $ 1 | (1) | ||||
Common stock repurchase (in shares) | 59,312 | |||||
Common stock repurchase | $ (365) | (365) | ||||
Net income | 1,759 | 1,759 | ||||
Balance (in shares) at Sep. 30, 2017 | 14,832,871 | 2,823,172 | ||||
Balance at Sep. 30, 2017 | $ 741 | $ 116,587 | $ (2,209) | $ (66,129) | $ (14,987) | $ 34,003 |
Note 1 - Basis of Presentation |
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Sep. 30, 2017 | |||
Notes to Financial Statements | |||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
The accompanying consolidated interim financial statements of RCM Technologies, Inc. and subsidiaries (“RCM” or the “Company”) are unaudited. The year-end consolidated balance sheet was derived from audited statements but does not include all disclosures required by accounting principles generally accepted in the United States. These statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission pertaining to reports on Form 10 -Q and should be read in conjunction with the Company’s consolidated financial statements and the notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report Form 10 -K for such period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The consolidated financial statements for the unaudited interim periods presented include all adjustments (consisting only of normal, recurring adjustments ) necessary for a fair presentation of financial position, results of operations and cash flows for such interim periods. Results for the thirteen and thirty-nine week periods ended September 30, 2017 are not necessarily indicative of results that may be expected for the full year. |
Note 2 - Fiscal Year |
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Business Description and Basis of Presentation [Text Block] |
The Company follows a 52/53 week fiscal reporting calendar ending on the Saturday closest to December 31. The fiscal year ended December 31, 2016 was a 52 -week reporting year. The third fiscal quarters of 2017 and 2016 ended on the following dates, respectively:
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Note 3 - Use of Estimates and Uncertainties |
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Sep. 30, 2017 | |||
Notes to Financial Statements | |||
Basis of Presentation and Significant Accounting Policies [Text Block] |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The Company uses estimates to calculate an allowance for doubtful accounts on its accounts receivables, adequacy of reserves, goodwill impairment, if any, equity compensation, the tax rate applied and the valuation of certain assets and liability accounts. These estimates can be significant to the operating results and financial position of the Company. The Company has risk participation arrangements with respect to workers compensation and health care insurance. The amounts included in the Company ’s costs related to this risk participation are estimated and can vary based on changes in assumptions, the Company’s claims experience or the providers included in the associated insurance programs. The Company can be affected by a variety of factors including uncertainty relating to the performance of the general economy, competition, demand for the Company ’s services, adverse litigation and claims and the hiring, training and retention of key employees. F air Value of Financial Instruments The Company ’s carrying value of financial instruments, consisting primarily of accounts receivable, transit accounts receivable, accounts payable and accrued expenses, and transit accounts payable and borrowings under line of credit approximates fair value due to their liquidity or their short-term nature. The Company does not have derivative products in place to manage risks related to foreign currency fluctuations for its foreign operations or for interest rate changes. |
Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable |
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Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
The Company ’s accounts receivable are comprised as follows:
Unbilled receivables primarily represent revenues earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-pro gress primarily represents revenues earned under contracts which the Company contractually invoices at future dates. From time to time, the Company ’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. Pursuant to these agreements, the Company a) may engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. Under the terms of the agreements, the Company is typically not required to pay the subcontractor until after the corresponding payment from the Company’s end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically does not pay a given transit account payable until the related transit account receivable is collected. The Company’s transit accounts payable generally exceeds the Company’s transit accounts receivable but absolute amounts and spreads fluctuate significantly from quarter to quarter in the normal course of business. The transit accounts receivable was $1.7 million and related transit accounts payable was $3.0 million, for a net liability of $1.3 million, as of September 30, 2017. The transit accounts receivable was $4.3 million and related transit accounts payable was $6.8 million, for a net liability of $2.5 million, as of December 31, 2016. |
Note 5 - Property and Equipment |
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Property, Plant and Equipment Disclosure [Text Block] |
Property and equipment are stated at cost and are depreciated on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. The annual rates are 20% for computer hardware and software as well as furniture and office equipment. Leasehold improvements are amortized over the shorter of the estimated life of the asset or the lease term.Property and equipment are comprised of the following:
The Company periodically writes off fully depreciated and amortized assets. The Company wrote off fully depreciated and amortized assets of $367 and $2,677 during the thirty-nine week periods ended September 30, 2017 and October 1, 2016, respectively. Depreciation expense for the thirty-nine week periods ended September 30, 2017 and October 1, 2016 was $1,179 and $1,114, respectively. |
Note 6 - Acquisitions |
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Business Combination Disclosure [Text Block] |
The Company has acquired numerous companies throughout its history and those acquisitions have generally included significant future contingent consideration. The Company gives no assurance that it will make acquisitions in the future and if they do make acquisitions gives no assurance that such acquisitions will be successful.Future Contingent Payments As of September 30, 2017, the Company had five active acquisition agreements whereby additional contingent consideration may be earned by the former shareholders: 1 ) effective July 1, 2012 the Company acquired certain assets of BGA, LLC (“BGA”); 2 ) effective August 1, 2014 the Company acquired all of the stock of Point Comm, Inc. (“PCI”); 3 ) effective July 5, 2015, the Company acquired certain assets of Substation Design Services, LLC (“SDS”); 4 ) effective December 31, 2016, the Company acquired certain assets of Allied Health Professionals, LLC (“AHP”) and 5 ) effective April 16, 2017 the Company acquired certain assets of R.A.F. Services, Inc. (“RAF”). The Company estimates future contingent payments at September 30, 2017 as follows:
Estimates of future contingent payments are subject to significant judgment and actual payments may materially differ from estimates. Potential future contingent payments to be made to all active acquisitions are capped at a cumulative maximum of $2.9 million. The Company estimates future contingent consideration in payments based on forecasted performance and recorded at the net present value of those expected payments as of September 30, 2017. The measurement is based on significant inputs that are not observable in the market, which “Fair Value Measurements and Disclosures” (ASU Topic 820 -10 -35 ) refers to as Level 3 inputs.The Company paid $ 0.8 thirty-nine week periods ended September 30, 2017 and October 1, 2016. AHP Effective December 31, 2016, the Company acquired the business operations of Allied Health Professionals, LLC (“AHP”). AHP was a Chicago area healthcare staffing company providing physical therapists, occupational therapists and speech language pathologists to hospitals, rehabilitation centers, schools and outpatient programs. The Company expects the AHP acquisition to complement its Chicago area operations which formerly provided primarily nurses to the Chicago Public School system. AHP will add new clients and expand the Company’s service offerings in the Chicago area. The purchase price for AHP was $695 ,1 ) cash of $275 paid in January 2017; 2 ) an unsecured note payable of $280 to be paid in quarterly installments through October 2018; and 3 ) maximum contingent consideration of $140 tied to certain gross profit targets and, if earned, payable in 2018. RAF Effective April 16, 2017, the Company acquired the business operations of R.A.F. Services, Inc. (“RAF”). RAF has been in business since 1991 as a multi-disciplined engineering and consulting and design company headquartered on Long Island. The firm has been providing Engineering, Design, Permitting, Inspection and Construction Management services to the utility, industrial, commercial, and property management industries. RAF specializes in turnkey above ground tank inspection, repair and cleaning services, as well as concrete, steel, masonry, and roofing routine maintenance inspection and design. The purchase price for RAF was $133 ,1 ) assumed liabilities of $123; and 2 ) estimated contingent consideration of $10, expected to be paid in fiscal 2018. |
Note 7 - Goodwill |
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Goodwill Disclosure [Text Block] |
Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired in business combinations. The Company is required to assess the carrying value of its reporting units that contain goodwill at least on an annual basis. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform a two -step impairment test. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than the carrying value, the quantitative impairment test is required. The Company formally assesses these qualitative factors, and if necessary, conducts its annual goodwill impairment test as of the last day of the Company’s fiscal November each year or if indicators of impairment exist. During all periods presented, the Company determined that the existing qualitative factors did not suggest that an impairment of goodwill exists. Since there have been no not performed a quantitative impairment test.The following changes in the carrying amount of goodwill occurred during the thirty-nine week period ended September 30, 2017:
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Note 8 - Intangible Assets |
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Intangible Assets Disclosure [Text Block] |
The Company evaluates long-lived assets and intangible assets with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When the Company determines that it is probable that undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. Assets to be disposed of by sale, if any, are reported at the lower of the carrying amount or fair value less cost to sell. The Company’s intangible assets consist of customer relationships and non-compete agreements. During all periods presented, the Company determined that no The following table reflects the activity for net intangible assets, excluding goodwill which is substantially attributable to the Company’s Engineering segment, for the periods presented:
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Note 9 - Line of Credit |
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Notes to Financial Statements | |||
Debt Disclosure [Text Block] |
The Company and its subsidiaries are party to a loan agreement with Citizens Bank of Pennsylvania which provides for a $35 million revolving credit facility and includes a sub-limit of $5 million for letters of credit (the “Revolving Credit Facility”) and expires December 11, 2019. The Revolving Credit Facility has been amended several times, most recently pursuant to the Seventh Amendment entered into on March 8, 2017 when the Company was granted a waiver that expressly excludes $1.3 million of certain legal settlement and office closure expenses in the calculation of the Company’s loan covenants. Borrowings under the Revolving Credit Facility bear interest at one of two alternative rates, as selected by the Company at each incremental borrowing. These alternatives are: (i) LIBOR (London Interbank Offered Rate), plus applicable margin, typically borrowed in fixed 30 -day increments or (ii) the agent bank’s prime rate generally borrowed over shorter durations. The Company also pays unused line fees based on the amount of the Revolving Credit Facility that is not drawn. Unused line fees are recorded as interest expense. The effective interest rate, including unused line fees, for the thirty-nine week period ended September 30, 2017 was 2.6%. All borrowings under the Revolving Credit Facility are collateralized by all of the assets of the Company and its subsidiaries and a pledge of the stock of its subsidiaries. The Revolving Credit Facility also contains various financial and non-financial covenants, such as a covenant that restricts on the Company’s ability to borrow in order to pay dividends. As of September 30, 2017, the Company was in compliance with all covenants contained in its Revolving Credit Facility.Borrowings under the line of credit as of September 30, 2017 and December 31, 2016 were $9.5 million and $14.3 million, respectively. At September 30, 2017 and December 31, 2016 there were letters of credit outstanding for $0.8 September 30, 2017, the Company had availability for additional borrowings under the Revolving Credit Facility of $24.7 million. |
Note 10 - Per Share Data |
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Earnings Per Share [Text Block] |
The Company uses the treasury stock method to calculate the weighted-average shares used for diluted earnings per share. The number of common shares used to calculate basic and diluted earnings per share for the thirteen and thirty-nine week periods ended September 30, 2017 and October 1, 2016 was determined as follows:
There were 15,000 and 42,500 absolute anti-dilutive shares not included in the calculation of common stock equivalents for the thirty-nine week periods ended September 30, 2017 and October 1, 2016, respectively. These were determined to be anti-dilutive because the exercise prices of these shares for the periods were higher than the average market price of the Company’s common stock for the same periods.Unissued shares of common stock were reserved for the following purposes:
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Note 11 - Share-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
At September 30, 2017, the Company had three share-based employee compensation plans. The Company measures the fair value of share-based awards, if and when granted, based on the Black-Scholes method and using the closing market price of the Company’s common stock on the date of grant. Awards vest over periods ranging from one to three years and expire within 10 years of issuance. Share-based compensation expense related to time-based awards is amortized in accordance with applicable vesting periods using the straight-line method. The Company vests performance-based awards only when the performance metrics are likely to be achieved and the associated awards are therefore likely to vest. Performance-based share awards that are likely to vest are also expensed on a straight-line basis over the vesting period but may vest on a retroactive basis or be reversed, depending on when it is determined that they are likely to vest, or in the case of a reversal when they are later determined to be unlikely to vest. Share-based compensation expense of $591 and $614 was recognized for the thirty-nine week periods ended September 30, 2017 and October 1, 2016, respectively. Share based compensation for the thirty-nine week period ended September 30, 2017 did not include any expense associated with performance-based restricted stock units since they were, as of September 30, 2017, determined to be unlikely to vest. As of September 30, 2017, the Company had approximately $0.3 million of total unrecognized compensation cost related to all time-based non-vested share-based awards granted under the Company’s various share-based plans, which the Company expects to recognize over approximately a two -year period. These amounts do not include a) performance-based restricted stock units, b) the cost of any additional share-based awards that may be granted in future periods or c) the impact of any potential changes in the Company’s forfeiture rate. Incentive S hare-Based Plans 2007 Omnibus Equity Compensation Plan (the 2007 Plan)The 2007 Plan, approved by the Company’s stockholders in June 2007, provides for the issuance of up to 700,000 shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries or consultants and advisors utilized by the Company. As of September 30, 2017, under the 2007 Plan, options to purchase 17,000 shares of common stock were outstanding. The 2007 Plan has expired therefore no shares are available for grant thereunder.2014 Omnibus Equity Compensation Plan (the 2014 Plan)The 2014 Plan, approved by the Company’s stockholders in December 2014, provides for the issuance of up to 625,000 shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries or consultants and advisors utilized by the Company. In fiscal 2016, the Company amended the 2014 Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance under the Plan by an additional 500,000 shares so that the total number of shares of stock reserved for issuance under the Plan is 1,125,000 shares. The expiration date of the Plan is December 1, 2026. The Compensation Committee of the Board of Directors determines the vesting period at the time of grant. As of September 30, 2017, under the 2014 Plan, 612,734 restricted stock units were outstanding, including 400,000 performance-based restricted stock units the Company currently deems unlikely to vest, and 379,266 shares were available for awards thereunder. Employee Stock Purchase Plan The Company implemented the 2001 Employee Stock Purchase Plan (the “Purchase Plan”) with shareholder approval, effective January 1, 2001. Under the Purchase Plan, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement or end of the offering period. The purchase plan permits eligible employees to purchase shares of common stock through payroll deductions for up to 10% of qualified compensation.In fiscal 2015, the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Plan by an additional 300,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,100,000 shares and to extend the expiration date of the Plan to December 31, 2025. The Company has two offering periods in the Purchase Plan coinciding with the Company’s first two fiscal quarters and the last two fiscal quarters. Actual shares are issued on the first business day of the subsequent offering period for the prior offering period payroll deductions. The number of shares issued at the beginning of the current period (on July 3, 2017) was 47,183. As of September 30, 2017, there were 177,280 shares available for issuance under the Purchase Plan. Stock Option Awards There were no thirty-nine week periods ended September 30, 2017 and October 1, 2016. Activity regarding outstanding options for the thirty-nine week period ended September 30, 2017 is as follows:
As of September 30, 2017, the Company had approximately $0 of total unrecognized compensation cost related to all non-vested stock option awards. Time-Based Restricted Stock Units From time-to-time the Company issues time-based restricted stock units. These time-based restricted stock units typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period assuming the grantee’s restricted stock unit fully vests. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying consolidated balance sheet. Dividends for time-based restricted stock units that ultimately do not vest are forfeited. To date, the Company has only issued time-based restricted stock units under the 2007 and 2014 Plans. The following summarizes the activity in the time-based restricted stock units under the 2007 and 2014 Plans during the thirty-nine week period ended September 30, 2017:
Based on the closing price of the Company ’s common stock of $5.72 per share on September 29, 2017 ( the last trading day prior to September 30, 2017), the intrinsic value of the time-based non-vested restricted stock units at September 30, 2017 was approximately $1.2 million. As of September 30, 2017, there was approximately $0.3 million of total unrecognized compensation cost related to time-based restricted stock units, which is expected to be recognized over the vesting period of the restricted stock units.Performance Based Restricted Stock Units From time-to-time the Company issues performance-based restricted stock units to its executives. Performance-based restricted stock units are typically vested based on certain multi-year performance metrics as determined by the Board of Directors Compensation Committee. These performance-based restricted stock units typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period on any stock units that actually vest, if any. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying consolidated balance sheet. Dividends for performance-based restricted stock units that ultimately do not vest are forfeited. To date, the Company has only issued performance-based restricted stock units under the 2014 Plan. The following summarizes the activity in the performance-based restricted stock units during 2017:
As of September 30, 2017, the Company considers the metrics related to 400,000 of the performance-based restricted stock units unlikely to be achieved, thus no performance condition is probable of achievement and no compensation cost has been recognized on the performance-based restricted stock units. The Company will reassess at each reporting date whether achievement of any performance condition is probable and would begin recognizing compensation cost if and when achievement of the performance condition becomes probable. The Company will then recognize the appropriate expense cumulatively in the year performance becomes probable and recognize the remaining compensation cost over the remaining requisite service period. |
Note 12 - Treasury Stock Transactions |
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Treasury Stock [Text Block] |
On October 28, 2013, the Board of Directors authorized a repurchase program to purchase up to $5.0 million of outstanding shares of common stock at the prevailing market prices, from time to time over the subsequent 12 -month period. On September 30, 2014, the Board extended this repurchase program through October 31, 2015. On September 11, 2015, the Board extended this repurchase program through December 31, 2016. On August 9, 2016, the Board authorized an additional $5.0 million to the repurchase program and extended this repurchase program through December 31, 2017. During the thirty-nine week periods ended September 30, 2017 and October 1, 2016, the Company purchased 59,312 shares at an average price of $6.16 per share and 357,250 shares at an average price of $5.54, respectively. As of September 30, 2017, the Company has $2.5 million available for future treasury stock purchases. |
Note 13 - New Accounting Standards |
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Notes to Financial Statements | |||
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014 -09, “Revenue from Contracts with Customers,” to clarify the principles used to recognize revenue for all entities. In March 2016, the FASB issued ASU 2016 -08, “Revenue from Contracts with Customers (Topic 606 ): Principal versus Agent Considerations,” which further clarifies the implementation guidance on principal versus agent considerations,” and in April 2016, the FASB issued ASU 2016 -10, “Revenue from contracts with customers (Topic 606 ): Identifying performance obligations and licensing,” an update on identifying performance obligations and accounting for licenses of intellectual property. Additionally, in May 2016, the FASB issued ASU 2016 -12, “Revenue from contracts with customers (Topic 606 ): Narrow-scope improvements and practical expedients,” which includes amendments for enhanced clarification of the guidance. In December 2016, the FASB issued ASU 2016 -20, “Technical Corrections and Improvements to Topic which continues the FASB’s ongoing project to issue technical corrections and improvements to clarify the codification or correct unintended application of guidance. From the results of the preliminary review, the Company believes the impact of adopting the updated standard will 606, Revenue from Contracts with Customers,”not have a material impact on the Company. Over 90% of the Company’s revenues are generated through time and material invoicing. The clients are invoiced after the hours have been worked and/or the material has been delivered and accepted. The remaining revenue relates to long term projects. The Company recognizes revenue on these projects using the percentage of completion method. The Company reviewed the five -step process for revenue recognition and believes its current method of recognizing revenue on these long term projects would not materially change upon adoption due to the value provided to the customer during the project. The guidance is effective for fiscal years beginning on or after December 15, 2017 including interim periods within those fiscal years and early adoption is permitted. We are continuing to evaluate the effect the adoption will have on our consolidated financial statements. The Company expects to adopt this update in its fiscal 2018 first quarter using the modified retrospective approach.In February 2016 the FASB issued ASU No. 2016 -02 , Leases (Topic which amended guidance for lease arrangements in order to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. The guidance, which is required to be adopted in the 842 ), first quarter of 2019, will be applied on a modified retrospective basis beginning with the earliest period presented. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.In March 2016, the FASB issued ASU 2016 -09, Compensation – Stock Compensation (Topic 718 ): Improvement to Employee Share-based Payment Accounting. ASU 2016 -09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Additionally, In May of 2017, the FASB issued ASU 2017 -09, Compensation – Stock Compensation (Topic ASU 718 ). 2017 -09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under ASC 718. The Company adopted ASU 2016 -09 in its fiscal 2017 first quarter. It did not have a material impact. ASU 2017 -09 is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company will adopt ASU 2017 -10 in its consolidated financial statements in the first quarter of fiscal 2018. It is not expected to have a material impact.In June 2016, the FASB issued ASU 2016 -13, Financial Instruments - Credit Losses (Topic The new standard amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. This ASU is effective for financial statements issued for fiscal years beginning after 326 ). December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.In August 2016, the FASB issued ASU No. 2016 -15, Statement of Cash Flows ( Topic 230 ): Classification of Certain Cash Receipts and Cash Payments . ASU 2016 -15 clarifies how certain cash receipts and payments should be presented in the statement of cash flows. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The Company will adopt ASU 2016 -15 in its consolidated financial statements in the first quarter of fiscal 2018. It is not expected to have a material impact.In January 2017, the FASB issued ASU No. 2017 -01, “Business Combinations” (Topic 805 ) to clarify the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for fiscal years beginning after December 15, 2017 including interim periods within those fiscal years. Early adoption is permitted under certain circumstances. The Company will adopt ASU 2017 -01 in its consolidated financial statements in the first quarter of fiscal 2018. It is not expected to have a material impact. In January 2017, the FASB issued ASU No. 2017 -04, “Intangibles – Goodwill and Other” (Topic 350 ). The objective of Phase 1 of the project, which resulted in this Update, is to simplify the testing of goodwill for impairment by eliminating Step 2 from the goodwill impairment test. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact that adoption of this guidance will have on its consolidated financial statements. |
Note 14 - Segment Information |
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Segment Reporting Disclosure [Text Block] |
The Company follows “Disclosures about Segments of an Enterprise and Related Information,” which establishes standards for companies to report information about operating segments, geographic areas and major customers. The accounting policies of each reportable segment are the same as those described in the summary of significant accounting policies ( see Note 1 to the Company’s Consolidated Financial Statements included in its Annual Report on Form 10 -K for the year ended December 31, 2016). Segment operating income includes selling, general and administrative expenses directly attributable to that segment as well as charges for allocating corporate costs to each of the operating segments. The following tables reflect the results of the reportable segments consistent with the Company ’s management system:
The Company derives a majority of its revenue from offices in the United States. Revenues reported for each operating segment are all from external customers. The Company is domiciled in the United States and its segments operate in the United States, Canada and Puerto Rico. Revenues by geographic area for the thirteen and thirty-nine week periods ended September 30, 2017 and October 1, 2016 are as follows:
Total assets by geographic area as of the reported periods are as follows:
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Note 15 - Income Taxes |
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Income Tax Disclosure [Text Block] |
The projected fiscal 201 7 effective income tax rates as of September 30, 2017 and applied to income before any discrete permanent difference for the thirty-nine week period ended September 30, 2017 are approximately 42.5% and 26.5% in the United States and Canada, respectively, and yielded a consolidated effective income tax rate before any discrete permanent difference of approximately 34.7% for the thirty-nine week period ended September 30, 2017. For the comparable prior year period estimated income tax rates were 41.9% and 26.5% in the United States and Canada, respectively, and yielded a consolidated effective income tax rate of approximately 41.2% for the thirty-nine week period ended October 1, 2016. The relative income or loss generated in each jurisdiction can materially impact the overall effective income tax rate of the Company. The Company experienced a discrete permanent difference of $0.8 million because of increases to contingent consideration. The Company’s effective income tax rate after including this discrete permanent difference was 43.4% for the thirty-nine week period ended September 30, 2017. |
Note 16 - Contingencies |
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Contingencies Disclosure [Text Block] |
From time to time, the Company is a defendant or plaintiff in various legal actions that arise in the normal course of business. As such, the Company is required to assess the likelihood of any adverse outcomes to these matters as well as potential ranges of losses and possible recoveries. The Company may not be covered by insurance as it pertains to some or all of these matters. A determination of the amount of the provision required for these commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each matter. Once established, a provision may change in the future due to new developments or changes in circumstances, and could increase or decrease the Company’s earnings in the period that the changes are made. Asserted claims in these matters sought approximately $0.6 million in damages as of September 30, 2017 and $1.5 million as of December 31, 2016 . As of September 30, 2017, the Company had no accrual for such liabilities. As of December 31, 2016, the Company accrued $0.5 million for such liabilities. The Company is also subject to other pending legal proceedings and claims that arise from time to time in the ordinary course of its business, which may not be covered by insurance. |
Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable (Tables) |
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Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
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Note 5 - Property and Equipment (Tables) |
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Property, Plant and Equipment [Table Text Block] |
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Note 6 - Acquisitions (Tables) |
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Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] |
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Note 7 - Goodwill (Tables) |
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Schedule of Goodwill [Table Text Block] |
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Note 8 - Intangible Assets (Tables) |
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Schedule of Finite-Lived Intangible Assets [Table Text Block] |
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Note 10 - Per Share Data (Tables) |
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Schedule of Weighted Average Number of Shares [Table Text Block] |
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Note 11 - Share-based Compensation (Tables) |
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Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] |
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Note 14 - Segment Information (Tables) |
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Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] |
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Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] |
|
Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable (Details Textual) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Liabilities, Net | $ 1.3 | $ 2.5 |
Transit Accounts Payable [Member] | ||
Accounts Payable, Current | 3.0 | 6.8 |
Transit Accounts Receivable [Member] | ||
Accounts Receivable, Gross, Current | $ 1.7 | $ 4.3 |
Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable - Accounts Receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Allowance for sales discounts and doubtful accounts | $ (1,061) | $ (1,402) |
Accounts receivable, net | 41,942 | 45,170 |
Billed Revenues [Member] | ||
Accounts Receivable, Gross, Current | 29,322 | 34,463 |
Unbilled Revenues [Member] | ||
Accounts Receivable, Gross, Current | 8,911 | 6,894 |
Work In Progress [Member] | ||
Accounts Receivable, Gross, Current | $ 4,770 | $ 5,215 |
Note 5 - Property and Equipment (Details Textual) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Annual Depreciation Rate | 20.00% | |
Write Off of Fully Depreciated Property and Equipment | $ 367 | $ 2,677 |
Depreciation | $ 1,179 | $ 1,114 |
Note 5 - Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Property and equipment | $ 7,750 | $ 7,370 |
Less: accumulated depreciation and amortization | 4,131 | 3,318 |
Property and equipment, net | 3,619 | 4,052 |
Equipment and Furniture [Member] | ||
Property and equipment | 912 | 1,045 |
Computers and Systems [Member] | ||
Property and equipment | 5,981 | 5,521 |
Leasehold Improvements [Member] | ||
Property and equipment | $ 857 | $ 804 |
Note 6 - Acquisitions - Maximum Deferred Consideration Payments (Details) $ in Thousands |
Sep. 30, 2017
USD ($)
|
---|---|
December 30, 2017 (after September 30, 2017) | $ 992 |
December 30, 2018 | 240 |
Estimated future contingent consideration payments | $ 1,232 |
Note 7 - Goodwill (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 |
Note 7 - Goodwill - Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Balance | $ 12,325 |
Goodwill recorded, RAF | 133 |
Balance | 12,458 |
Engineering [Member] | |
Balance | 4,411 |
Goodwill recorded, RAF | 133 |
Balance | 4,544 |
Specialty Health Care [Member] | |
Balance | 2,398 |
Goodwill recorded, RAF | |
Balance | 2,398 |
Information Technology [Member] | |
Balance | 5,516 |
Goodwill recorded, RAF | |
Balance | $ 5,516 |
Note 8 - Intangible Assets (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 0 | $ 0 |
Note 8 - Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Beginning balance | $ 171 | $ 252 |
Amortization of intangibles during the thirty-nine week period presented | (50) | (63) |
Ending balance | $ 121 | $ 189 |
Note 9 - Line of Credit (Details Textual) - USD ($) $ in Thousands |
Mar. 08, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Long-term Line of Credit, Noncurrent | $ 9,451 | $ 14,311 | |
Letters of Credit Outstanding, Amount | 800 | 800 | |
Line of Credit Facility, Remaining Borrowing Capacity | 24,700 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 35,000 | ||
Line of Credit, Loan Covenants, Waiver Granted, Amount of Legal Settlement and Office Closure Expenses Excluded | $ 1,300 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.60% | ||
Long-term Line of Credit, Noncurrent | $ 9,500 | $ 14,300 | |
Letter of Credit [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000 |
Note 10 - Per Share Data (Details Textual) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 15,000 | 42,500 |
Note 10 - Per Share Data - Weighted Average Number of Common Shares (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Basic weighted average shares outstanding (in shares) | 12,009,181 | 12,295,493 | 11,972,600 | 12,380,617 |
Dilutive effect of outstanding stock options and restricted stock awards (in shares) | 141,914 | 136,150 | 116,610 | 102,817 |
Weighted average dilutive shares outstanding (in shares) | 12,151,095 | 12,431,643 | 12,089,210 | 12,483,434 |
Note 10 - Per Share Data - Unissued Shares of Common Stock Were Reserved for the Following Purposes (Details) - shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Future grants of options or shares (in shares) | 379,266 | 619,266 |
Shares reserved for employee stock purchase plan (in shares) | 177,280 | 268,211 |
Total (in shares) | 1,186,280 | 1,327,211 |
Time-based Restricted Stock Units [Member] | ||
Restricted stock units outstanding (in shares) | 212,734 | 197,734 |
Performance-based Restricted Stock Units [Member] | ||
Restricted stock units outstanding (in shares) | 400,000 | 200,000 |
The 2007 Plan [Member] | ||
Exercise of options outstanding (in shares) | 17,000 | 42,000 |
Note 12 - Treasury Stock Transactions (Details Textual) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Aug. 09, 2016 |
Oct. 28, 2013 |
|
Stock Repurchase Program 2013 [Member] | ||||
Stock Repurchase Program, Authorized Amount | $ 5.0 | |||
Stock Repurchase Program, 2016 [Member] | ||||
Stock Repurchase Program, Authorized Amount | $ 5.0 | |||
Treasury Stock, Shares, Acquired | 59,312 | 357,250 | ||
Treasury Stock Acquired, Average Cost Per Share | $ 6.16 | $ 5.54 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 2.5 |
Note 14 - Segment Information - Revenues by Geographic Area (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Revenue | $ 43,827 | $ 39,695 | $ 135,680 | $ 132,250 |
UNITED STATES | ||||
Revenue | 34,207 | 32,851 | 110,083 | 110,158 |
CANADA | ||||
Revenue | 8,703 | 5,545 | 22,420 | 18,149 |
PUERTO RICO | ||||
Revenue | $ 917 | $ 1,299 | $ 3,177 | $ 3,943 |
Note 14 - Segment Information - Total Assets by Geographic Area (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
Oct. 01, 2016 |
---|---|---|---|
Total assets | $ 64,048 | $ 69,831 | $ 65,892 |
UNITED STATES | |||
Total assets | 45,895 | 53,842 | |
CANADA | |||
Total assets | 16,227 | 13,953 | |
PUERTO RICO | |||
Total assets | $ 1,926 | $ 2,036 |
Note 15 - Income Taxes (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Effective Income Tax Rate Reconciliation, Percent | 34.70% | 41.20% | ||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 781 | |||
Effective Income Tax Rate Reconciliation, Including Discrete Permanent Differences, Percent | 43.40% | |||
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent | 42.50% | 41.90% | ||
Foreign Tax Authority [Member] | Canada Revenue Agency [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent | 26.50% | 26.50% |
Note 16 - Contingencies (Details Textual) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Loss Contingency, Damages Sought, Value | $ 600 | $ 1,500 |
Estimated Litigation Liability | $ 0 | $ 500 |
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