UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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RCM TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
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Nevada
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95-1480559
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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2500 McClellan Avenue, Suite 350,
Pennsauken, New Jersey
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08109-4613
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's telephone number, including area code:
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(856) 356-4500
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.05 per share
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The NASDAQ Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act:
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None
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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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RCM TECHNOLOGIES, INC.
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FORM 10-K
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TABLE OF CONTENTS
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PART I
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1
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Item 1.
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Business
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2
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Item 1A.
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Risk Factors
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15
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Item 1B.
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Unresolved Staff Comments
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20
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Item 2.
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Properties
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20
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Item 3.
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Legal Proceedings
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20
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Item 4.
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Mine Safety Disclosures
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20
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PART II
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21
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Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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21 | |
Item 6.
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Selected Financial Data
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22
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Item 7.
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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 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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40
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Item 8.
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Financial Statements and Supplementary Data
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40
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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40
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Item 9A(T).
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Controls and Procedures
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41
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Item 9B.
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Other Information
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41
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PART III
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42
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Item 10.
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Directors, Executive Officers and Corporate Governance
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42
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Item 11.
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Executive Compensation
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42
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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42 | |
Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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42
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Item 14.
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Principal Accountant Fees and Services
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42
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PART IV
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43
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Item 15.
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Exhibits and Financial Statement Schedules
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43
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Signatures
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46
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PART I
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ITEM 1. BUSINESS
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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·
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Enterprise Infrastructure Management
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·
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Enterprise Integration
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·
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Enterprise Supply Chain
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·
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Enterprise Project Management
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·
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Enterprise HR
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·
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Life Sciences
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·
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Assessment and Remediation of Federally Regulated Life Science Equipment and Processes
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ITEM 1. BUSINESS (CONTINUED)
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·
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Enterprise Business Solutions
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·
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Application Services
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·
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Infrastructure Solutions
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·
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Competitive Advantage & Productivity Solutions
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·
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Life Sciences Solutions
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ITEM 1. BUSINESS (CONTINUED)
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LOCATION
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NUMBER OF
OFFICES
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SERVICES
PROVIDED(1)
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U.S.
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|||
California
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2
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HC
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Connecticut
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2
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E
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Florida
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1
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HC
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Hawaii
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1
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HC
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Illinois
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1
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HC
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Maryland
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1
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IT
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Massachusetts
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1
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IT
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Michigan
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2
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IT
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Minnesota
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1
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IT
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New Jersey
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3
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IT, E
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New York
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3
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IT, E, HC
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Oregon
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1
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IT
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Pennsylvania
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2
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E, HC
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Rhode Island
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1
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E
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Wisconsin
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1
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E
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23
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CANADA
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5
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IT, E
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PUERTO RICO
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1
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IT
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ITEM 1. BUSINESS (CONTINUED)
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Revenues
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Total
Assets
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United States
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$150,024
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$63,886
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Canada
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29,519
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15,640
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Puerto Rico
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6,193
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1,810
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$185,736
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$81,336
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1. BUSINESS (CONTINUED)
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ITEM 1A. RISK FACTORS
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ITEM 1A. RISK FACTORS (CONTINUED)
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ITEM 1A. RISK FACTORS (CONTINUED)
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ITEM 1A. RISK FACTORS (CONTINUED)
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ITEM 1A. RISK FACTORS (CONTINUED)
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ITEM 1B. UNRESOLVED STAFF COMMENTS
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ITEM 2. PROPERTIES
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ITEM 3. LEGAL PROCEEDINGS
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ITEM 4. MINE SAFETY DISCLOSURES
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PART II
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
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MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Common Stock
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||||
Fiscal Year Ended January 3, 2015
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High
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Low
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First Quarter
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$7.22
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$6.02
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Second Quarter
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$6.95
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$6.03
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Third Quarter
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$7.82
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$6.02
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Fourth Quarter
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$9.25
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$6.38
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Fiscal Year Ended January 2, 2016
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First Quarter
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$7.00
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$5.56
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Second Quarter
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$6.74
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$5.27
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Third Quarter
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$5.74
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$4.16
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Fourth Quarter
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$5.74
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$4.24
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
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MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (CONTINUED)
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Period
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Total Number of Shares Purchased
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Weighted Average
Price Paid
per Share
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Total Number of
Shares Purchased as
Part of Publicly
Announced Program
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Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Program
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||||
October 4, 2015 -
November 3, 2015
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371,546
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$4.71
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371,546
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$2,740,000
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||||
November 4, 2015 -
December 3, 2015
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45,017
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5.36
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45,017
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2,499,000
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December 4, 2015 -
January 2, 2016
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66,221
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5.06
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66,221
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2,164,000
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Total
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482,784
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$4.82
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482,784
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$2,164,000
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ITEM 6. SELECTED FINANCIAL DATA
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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Fiscal Years Ended
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||||||||
January 2, 2016
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January 3, 2015
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|||||||
Amount
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% of Revenue
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Amount
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% of Revenue
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|||||
Revenues
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$185,736
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100.0
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$193,770
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100.0
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||||
Cost of services
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133,851
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72.1
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142,077
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73.3
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||||
Gross profit
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51,885
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27.9
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51,693
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26.7
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Selling, general and administrative
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42,567
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22.9
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39,972
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20.6
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||||
Depreciation and amortization
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1,467
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0.8
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1,203
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0.6
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Operating costs and expenses
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44,034
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23.7
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41,175
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21.2
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||||
Operating income
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7,851
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4.2
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10,518
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5.5
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Other (expense) income, net
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(697
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)
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0.4
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83
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0.0
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Income before income taxes
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7,154
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3.8
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10,601
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5.5
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||||
Income tax expense
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1,139
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0.6
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3,787
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2.0
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Net income
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$6,015
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3.2
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$6,814
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3.5
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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Fiscal Years Ended
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|||||
January 2,
2016
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January 3,
2015
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||||
Cash provided by (used in):
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|||||
Operating activities
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$12,481
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$4,181
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|||
Investing activities
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($3,036
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)
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($2,161
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)
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Financing activities
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($14,188
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)
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($4,571
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)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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Fiscal Years
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Amount
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2016
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$3,105
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2017
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2,701
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2018
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2,180
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2019
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884
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2020
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431
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Thereafter
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51
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Total
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$9,352
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Fiscal Year
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Total
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January 2, 2016
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$822
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December 31, 2016
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665
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December 30, 2017
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313
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Estimated future contingent consideration payments
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$1,800
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS (CONTINUED)
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ITEM 7A.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
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FINANCIAL DISCLOSURE
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ITEM 9A.
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CONTROLS AND PROCEDURES
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ITEM 9B.
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OTHER INFORMATION
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PART III
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 11.
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EXECUTIVE COMPENSATION
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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AND RELATED STOCKHOLDER MATTERS
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Plan category
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Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
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Weighted-average
exercise price of
outstanding options,
warrants and rights
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Number of securities
remaining available for
issuance under equity
compensation plans,
excluding securities
reflected in column (a)
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(a)
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(b)
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(c)
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Equity compensation plans approved by security holders
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44,500
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$8.12
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382,000
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Equity compensation plans not approved by security holders
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____________________
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____________________
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____________________
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Total
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44,500
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$8.12
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382,000
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
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INDEPENDENCE
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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PART IV
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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(a)
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1. and 2. Financial Statement Schedules -- See “Index to Financial Statements and Schedules” on F-1.
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3. See Item (b) below.
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|||
(b)
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Exhibits
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(3)(a)
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Articles of Incorporation, as amended; incorporated by reference to Exhibit 3(a) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended October 31, 1994.
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(3)(b)
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Certificate of Amendment of Articles of Incorporation; incorporated by reference to Exhibit A to the Registrant’s Proxy Statement, dated February 6, 1996, filed with the Securities and Exchange Commission on January 29, 1996.
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(3)(c)
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Certificate of Amendment of Articles of Incorporation; incorporated by reference to Exhibit B to the Registrant’s Proxy Statement, dated February 6, 1996, filed with the Securities and Exchange Commission on January 29, 1996.
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(3)(d)
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Amended and Restated Bylaws; incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2014 (the “January 2014 8-K”).
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||
*
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(10)(d)
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RCM Technologies, Inc. 2000 Employee Stock Incentive Plan, dated January 6, 2000; incorporated by reference to Exhibit A to the Registrant’s Proxy Statement, dated March 3, 2000, filed with the Securities and Exchange Commission on February 28, 2000.
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*
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(10)(l)
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The RCM Technologies, Inc. 2007 Omnibus Equity Compensation Plan; incorporated by reference to Annex A to the Registrant’s Proxy Statement, dated April 20, 2007, filed with the Securities and Exchange Commission on April 19, 2007.
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(10)(n)
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Second Amended and Restated Loan and Security Agreement dated as of February 19, 2009, between RCM Technologies, Inc. and all of its Subsidiaries, Citizens Bank of Pennsylvania as Administrative Agent and Arranger and the Financial Institutions Named therein as Lenders; incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated February 19, 2009, filed with the Securities and Exchange Commission on February 25, 2009.
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(10)(o)
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Amendment, dated as of July 21, 2011, to Second Amended and Restated Loan and Security Agreement dated as of February 19, 2009, between RCM Technologies, Inc. and all of its Subsidiaries, Citizens Bank of Pennsylvania as Administrative Agent and Arranger and the Financial Institutions Named therein as Lenders; incorporated by reference to Exhibit 10(o) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended January 3, 2015 filed with the Securities and Exchange Commission on February 27, 2014 (the “2013 10-K”).
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(10)(p)
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Second Amendment, dated as of October 24, 2011, to Second Amended and Restated Loan and Security Agreement dated as of February 19, 2009, between RCM Technologies, Inc. and all of its Subsidiaries, Citizens Bank of Pennsylvania as Administrative Agent and Arranger and the Financial Institutions Named therein as Lenders; incorporated by reference to Exhibit 10(p) to the 2013 10-K.
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
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(b)
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Exhibits (Continued)
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(10)(q)
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Third Amendment, dated as of December 13, 2011, to Second Amended and Restated Loan and Security Agreement dated as of February 19, 2009, between RCM Technologies, Inc. and all of its Subsidiaries, Citizens Bank of Pennsylvania as Administrative Agent and Arranger and the Financial Institutions Named therein as Lenders; incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated December 13, 2011, filed with the Securities and Exchange Commission on January 3, 2012.
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(10)(r)
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Fourth Amendment to Second Amended and Restated Amendment, dated as of December 12, 2014, to Amended and Restated Loan and Security Agreement dated as of February 19, 2009, by and among the Company and all of its subsidiaries, Citizens Bank of Pennsylvania, a Pennsylvania state chartered bank, in its capacity as administrative agent and arranger, and Citizens Bank of Pennsylvania, as lender; incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2014 (the “December 2014 8-K”).
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||
*
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(10)(s)
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Option Grant Agreement, dated April 21, 2010, to Richard D. Machon (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2010, and incorporated herein by reference).
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*
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(10)(t)
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Option Grant Agreement, dated April 21, 2010, to S. Gary Snodgrass (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2010, and incorporated herein by reference).
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*
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(10)(u)
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Executive Severance Agreement between RCM Technologies, Inc. and Rocco Campanelli dated December 27, 2012; incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated December 27, 2012, filed with the Securities and Exchange Commission on December 28, 2012.
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*
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(10)(v)
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Executive Severance Agreement between RCM Technologies, Inc. and Kevin Miller dated December 27, 2012; incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K dated December 27, 2012, filed with the Securities and Exchange Commission on December 28, 2012.
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*
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(10)(w)
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Settlement Agreement, dated January 23, 2014 between RCM Technologies, Inc. and the stockholders of the Company named therein; incorporated by reference to Exhibit 99.1 to the January 2014 8-K.
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*
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(10)(x)
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Separation Agreement, dated January 23, 2014, between RCM Technologies, Inc. and Leon Kopyt; incorporated by reference to Exhibit 99.2 to the January 2014 8-K.
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*
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(10)(y)
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RCM Technologies, Inc. 2014 Omnibus Equity Compensation Plan; incorporated by reference to Exhibit A to the Registrant’s Definitive Proxy Statement for the 2014 Annual Meeting filed with the Securities and Exchange Commission on October 31, 2014.
|
|
*
|
(10)(z)
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Form of Stock Unit Agreement; incorporated by reference to Exhibit 99.2 to the December 2014 8-K.
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
|
(b)
|
Exhibits (Continued)
|
|||
*
|
10(aa)
|
RCM Technologies, Inc. Change in Control Plan for Selected Executive Management (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2015, and incorporated herein by reference).
|
||
*
|
10(bb)
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Amendment 2015-3 to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan; incorporated by reference to Exhibit A to the Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting filed with the Securities and Exchange Commission on October 30, 2015.
|
||
*
|
10(cc)
|
Fifth Amendment to Second Amended and Restated Amendment, dated as of December 14, 2015, to Amended and Restated Loan and Security Agreement dated as of February 19, 2009, by and among the Company and all of its subsidiaries, Citizens Bank of Pennsylvania, a Pennsylvania state chartered bank, in its capacity as administrative agent and arranger, and Citizens Bank of Pennsylvania, as lender. (Filed herewith.)
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||
(21)
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Subsidiaries of the Registrant. (Filed herewith)
|
|||
(23.1)
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Consent of EisnerAmper LLP. (Filed herewith)
|
|||
(31.1)
|
Certifications of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. (Filed herewith)
|
|||
(31.2)
|
Certifications of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. (Filed herewith)
|
|||
(32.1)
|
Certifications of 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.) (Furnished herewith)
|
|||
(32.2)
|
Certifications 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.) (Furnished herewith)
|
|||
101.INS
|
XBRL Instance Document (Filed herewith)
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema Document (Filed herewith)
|
|||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (Filed herewith)
|
|||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (Filed herewith)
|
|||
101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Documents (Filed herewith)
|
|||
101.DEF
|
XBRL Taxonomy Definition Linkbase Document (Filed herewith)
|
|||
*
|
Constitutes a management contract or compensatory plan or arrangement.
|
SIGNATURES
|
RCM Technologies, Inc.
|
|||
Date: March 2, 2016
|
By:
|
/s/ Rocco Campanelli
|
|
Rocco Campanelli
|
|||
President and Chief Executive Officer
|
|||
Date: March 2, 2016
|
By:
|
/s/ Kevin D. Miller
|
|
Kevin D. Miller
|
|||
Chief Financial Officer, Treasurer and Secretary
|
Date: March 2, 2016
|
By:
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/s/ Rocco Campanelli
|
|
Rocco Campanelli
|
|||
President and Chief Executive Officer (Principal Executive Officer)
|
|||
Date: March 2, 2016
|
By:
|
/s/ Kevin D. Miller
|
|
Kevin D. Miller
|
|||
Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
|
|||
Date: March 2, 2016
|
By:
|
/s/ Bradley S. Vizi
|
|
Bradley S. Vizi
|
|||
Chairman and Director
|
|||
Date: March 2, 2016
|
By:
|
/s/ Roger H. Ballou
|
|
Roger H. Ballou
|
|||
Director
|
|||
Date: March 2, 2016
|
By:
|
/s/ Maier O. Fein
|
|
Maier O. Fein
|
|||
Director
|
|||
Date: March 2, 2016
|
By:
|
/s/ Leon Kopyt
|
|
Leon Kopyt
|
|||
Director
|
|||
Date: March 2, 2016
|
By:
|
/s/ Richard D. Machon
|
|
Richard D. Machon
|
|||
Director
|
|||
Date: March 2, 2016
|
By:
|
/s/ S. Gary Snodgrass
|
|
S. Gary Snodgrass
|
|||
Director
|
RCM TECHNOLOGIES, INC.
|
FORM 10-K
|
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
|
Page
|
|
Consolidated Balance Sheets, January 2, 2016 and January 3, 2015
|
F-2
|
Consolidated Statements of Income, Fiscal Years Ended January 2, 2016 and
January 3, 2015
|
F-3
|
Consolidated Statements of Comprehensive Income, Fiscal Years Ended
January 2, 2016 and January 3, 2015
|
F-4
|
Consolidated Statements of Changes in Accumulated Other Comprehensive
Income for the Fiscal Years Ended January 2, 2016 and January 3, 2015
|
F-5
|
Consolidated Statements of Changes in Stockholders’ Equity, Fiscal Years
Ended January 2, 2016 and January 3, 2015
|
F-6
|
Consolidated Statements of Cash Flows, Fiscal Years Ended January 2, 2016 and
January 3, 2015
|
F-7
|
Notes to Consolidated Financial Statements
|
F-8
|
Report of Independent Registered Public Accounting Firm
|
F-35
|
Schedule II
|
F-36
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 2, 2016 and January 3, 2015
(Amounts in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
|
January 3,
|
|||||
2016
|
2015
|
|||||
Current assets:
|
||||||
Cash and cash equivalents
|
$985
|
$6,411
|
||||
Accounts receivable, net
|
50,946
|
59,187
|
||||
Transit accounts receivable
|
7,481
|
3,797
|
||||
Prepaid expenses and other current assets
|
4,508
|
2,368
|
||||
Deferred income tax assets, domestic
|
609
|
816
|
||||
Total current assets
|
64,529
|
72,579
|
||||
Property and equipment, net
|
4,698
|
3,297
|
||||
Other assets:
|
||||||
Deposits
|
227
|
231
|
||||
Goodwill
|
11,630
|
10,223
|
||||
Intangible assets, net
|
252
|
194
|
||||
Deferred income tax assets, domestic
|
-
|
749
|
||||
Total other assets
|
12,109
|
11,397
|
||||
Total assets
|
$81,336
|
$87,273
|
Current liabilities:
|
|||||||
Accounts payable and accrued expenses
|
$7,863
|
$7,693
|
|||||
Transit accounts payable
|
8,995
|
6,658
|
|||||
Accrued payroll and related costs
|
8,606
|
7,783
|
|||||
Income taxes payable
|
343
|
860
|
|||||
Deferred income tax liability, foreign
|
250
|
160
|
|||||
Contingent consideration
|
822
|
479
|
|||||
Total current liabilities
|
26,879
|
23,633
|
|||||
Deferred tax liability, domestic
|
276
|
-
|
|||||
Contingent consideration
|
978
|
775
|
|||||
Borrowings under line of credit
|
21,000
|
20,000
|
|||||
Total liabilities
|
49,133
|
44,408
|
|||||
Stockholders’ equity:
|
|||||||
Preferred stock, $1.00 par value; 5,000,000 shares authorized;
|
|||||||
no shares issued or outstanding
|
-
|
-
|
|||||
Common stock, $0.05 par value; 40,000,000 shares authorized;
|
|||||||
14,559,381 shares issued and 12,496,635 shares outstanding at
January 2, 2016 and 14,148,667 shares issued and 12,671,887 shares outstanding at January 3, 2015
|
728
|
707
|
|||||
Additional paid-in capital
|
114,331
|
112,529
|
|||||
Accumulated other comprehensive income
|
(2,845
|
)
|
91
|
||||
Accumulated deficit
|
(69,646
|
)
|
(62,933
|
)
|
|||
Treasury stock (2,062,746 shares at January 2, 2016 and
1,476,780 shares at January 3, 2015) at cost
|
(10,365
|
)
|
(7,529
|
)
|
|||
Stockholders’ equity
|
32,203
|
42,865
|
|||||
Total liabilities and stockholders’ equity
|
$81,336
|
$87,273
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except per share amounts, unless otherwise indicated)
|
January 2,
2016
|
January 3,
2015
|
||||
Revenues
|
$185,736
|
$193,770
|
|||
Cost of services
|
133,851
|
142,077
|
|||
Gross profit
|
51,885
|
51,693
|
|||
Operating costs and expenses
|
|||||
Selling, general and administrative
|
42,567
|
39,972
|
|||
Depreciation and amortization
|
1,467
|
1,203
|
|||
Operating costs and expenses
|
44,034
|
41,175
|
|||
Operating income
|
7,851
|
10,518
|
|||
Other (expense) income
|
|||||
Interest expense and other, net
|
(504
|
)
|
(74
|
)
|
|
Loss on sale of business unit
|
(121
|
)
|
-
|
||
Reduction in contingent consideration
|
-
|
129
|
|||
(Loss) gain on foreign currency transactions
|
(72
|
)
|
28
|
||
Other income
|
(697
|
)
|
83
|
||
Income before income taxes
|
7,154
|
10,601
|
|||
Income tax expense
|
1,139
|
3,787
|
|||
Net income
|
$6,015
|
$6,814
|
|||
Basic net income per share
|
$0.48
|
$0.54
|
|||
Diluted net income per share
|
$0.47
|
$0.54
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands unless otherwise indicated)
|
January 2,
|
January 3,
|
|||
2016
|
2015
|
|||
Net income
|
$6,015
|
$6,814
|
||
Foreign currency translation adjustment
|
(2,936
|
)
|
(890
|
)
|
Comprehensive income
|
$3,079
|
$5,924
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN
ACCUMULATED OTHER COMPREHENSIVE INCOME
Fifty-Two Week Period Ended January 2, 2016
(In thousands)
|
Fifty-Two Weeks Ended
|
||||
January 2,
2016
|
January 3,
2015
|
|||
Beginning balance
|
$91
|
$815
|
||
Other comprehensive income before
reclassifications
|
(2,936
|
)
|
(890
|
)
|
Amounts reclassified from accumulated
other comprehensive income (a)
|
-
|
166
|
||
Net current-period comprehensive income
|
(2,936
|
)
|
(724
|
) |
Ending balance
|
($2,845
|
)
|
$91
|
|
(a) This amount represents residual foreign currency translation balances in our Cataract, Inc. and RCM Technologies Ireland Holding Limited subsidiaries after these subsidiaries had been effectively liquidated.
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Amounts in thousands, except share amounts, unless otherwise indicated)
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income
|
Accumulated
Deficit
|
Treasury Stock
|
Total
|
|||||||||||
Issued
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Balance, December 28, 2013
|
13,892,265
|
$695
|
$110,605
|
$815
|
($43,237
|
)
|
1,473,306
|
($7,500
|
)
|
$61,378
|
||||||
Issuance of stock under
employee stock purchase plan
|
67,092
|
3
|
336
|
-
|
-
|
-
|
-
|
339
|
||||||||
Translation adjustment
|
-
|
-
|
-
|
(890
|
)
|
-
|
-
|
-
|
(890
|
)
|
||||||
Reclassification of currency
translation
|
-
|
-
|
-
|
166
|
(166
|
)
|
-
|
-
|
-
|
|||||||
Issuance of stock upon exercise of
stock options
|
189,310
|
9
|
767
|
-
|
-
|
-
|
-
|
776
|
||||||||
Effect of excess tax deduction
over book expense associated with
equity awards
|
-
|
-
|
15
|
-
|
-
|
-
|
-
|
15
|
||||||||
Share based compensation expense
|
-
|
-
|
806
|
-
|
-
|
-
|
-
|
806
|
||||||||
Common stock repurchase
|
-
|
-
|
-
|
-
|
-
|
3,474
|
(29
|
)
|
(29
|
)
|
||||||
Cash dividend paid
|
-
|
-
|
-
|
-
|
(25,344
|
)
|
-
|
-
|
(25,344
|
)
|
||||||
Dividends declared on restricted
stock units
|
-
|
-
|
-
|
-
|
(1,000
|
)
|
-
|
-
|
(1,000
|
)
|
||||||
Net income
|
-
|
-
|
-
|
-
|
6,814
|
-
|
-
|
6,814
|
||||||||
Balance, January 3, 2015
|
14,148,667
|
707
|
112,529
|
91
|
(62,933
|
)
|
1,476,780
|
(7,529
|
)
|
42,865
|
||||||
Issuance of stock under
employee stock purchase plan
|
73,048
|
4
|
369
|
-
|
-
|
-
|
-
|
373
|
||||||||
Translation adjustment
|
-
|
-
|
-
|
(2,936
|
)
|
-
|
-
|
-
|
(2,936
|
)
|
||||||
Issuance of stock upon exercise of
stock options
|
3,500
|
-
|
19
|
-
|
-
|
-
|
-
|
19
|
||||||||
Issuance of stock upon vesting
of restricted stock units
|
334,166
|
17
|
(17
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||
Effect of reduced tax deduction over
book expense associated with
equity awards
|
-
|
-
|
(15
|
)
|
-
|
-
|
-
|
-
|
(15
|
)
|
||||||
Share based compensation expense
|
-
|
-
|
1,446
|
-
|
-
|
-
|
-
|
1,446
|
||||||||
Common stock repurchase
|
-
|
-
|
-
|
-
|
-
|
585,966
|
(2,836
|
)
|
(2,836
|
)
|
||||||
Cash dividend paid
|
-
|
-
|
-
|
-
|
(12,529
|
)
|
-
|
-
|
(12,529
|
)
|
||||||
Dividends declared on restricted
stock units
|
-
|
-
|
-
|
-
|
(209
|
)
|
-
|
-
|
(209
|
)
|
||||||
Dividends on restricted stock units
forfeited
|
-
|
-
|
-
|
-
|
10
|
-
|
-
|
10
|
||||||||
Net income
|
-
|
-
|
-
|
-
|
6,015
|
-
|
-
|
6,015
|
||||||||
Balance, January 2, 2016
|
14,559,381
|
$728
|
$114,331
|
($2,845
|
)
|
($69,646
|
)
|
2,062,746
|
($10,365
|
)
|
$32,203
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands unless otherwise indicated)
|
January 2,
2016
|
January 3,
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$6,015
|
$6,814
|
||||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Depreciation and amortization
|
1,467
|
1,203
|
||||||
Loss on sale of business unit
|
121
|
-
|
||||||
Change in contingent consideration
|
-
|
(129
|
)
|
|||||
Share-based compensation expense
|
1,446
|
806
|
||||||
Provision for losses on accounts receivable
|
1,021
|
938
|
||||||
Deferred income tax expense
|
1,322
|
1,906
|
||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
4,261
|
(4,934
|
)
|
|||||
Transit accounts receivable
|
(4,216
|
)
|
156
|
|||||
Prepaid expenses and other current assets
|
(2,225
|
)
|
(494
|
)
|
||||
Accounts payable and accrued expenses
|
(80
|
)
|
(2,988
|
)
|
||||
Transit accounts payable
|
2,893
|
2,753
|
||||||
Accrued payroll and related costs
|
837
|
(2,321
|
)
|
|||||
Income taxes payable
|
(381
|
)
|
456
|
|||||
Total adjustments
|
6,466
|
(2,648
|
)
|
|||||
Net cash provided by operating activities
|
12,481
|
4,166
|
||||||
Cash flows from investing activities:
|
||||||||
Property and equipment acquired
|
(2,790
|
)
|
(2,091
|
)
|
||||
Decrease (increase) in deposits
|
3
|
(70
|
)
|
|||||
Payments for business acquired
|
(800
|
)
|
-
|
|||||
Cash from sale of business unit
|
551
|
-
|
||||||
Net cash used in investing activities
|
(3,036
|
)
|
(2,161
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net borrowings under line of credit
|
1,000
|
20,000
|
||||||
Sale of stock for employee stock purchase plan
|
373
|
339
|
||||||
Exercise of stock options
|
19
|
776
|
||||||
Effect of (reduced) excess tax deduction on equity awards
|
(15
|
)
|
15
|
|||||
Common stock repurchases
|
(2,836
|
)
|
(29
|
)
|
||||
Dividends paid to shareholders
|
(12,529
|
)
|
(25,344
|
)
|
||||
Contingent consideration paid
|
(200
|
)
|
(313
|
)
|
||||
Net cash used in financing activities
|
(14,188
|
)
|
(4,556
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(683
|
)
|
(355
|
)
|
||||
Decrease in cash and cash equivalents
|
(5,426
|
)
|
(2,906
|
)
|
||||
Cash and cash equivalents at beginning of period
|
6,411
|
9,317
|
||||||
Cash and cash equivalents at end of period
|
$985
|
$6,411
|
||||||
Supplemental cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$488
|
$69
|
||||||
Income taxes
|
$821
|
$1,769
|
||||||
Non-cash investing activities:
|
||||||||
Contingent consideration recorded, not yet paid, as part of business acquisition
|
$746
|
$766
|
||||||
Fixed assets acquired in acquisition
|
$ -
|
$26
|
||||||
Non-cash financing activities:
|
||||||||
Dividend declared but unpaid on unvested restricted stock units
|
$209
|
$1,000
|
||||||
Dividends forfeited on unvested forfeited restricted stock units
|
($10
|
)
|
$ -
|
|||||
Vesting of restricted stock units
|
$1,857
|
$ -
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
2.
|
FISCAL YEAR
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
3.
|
USE OF ESTIMATES AND UNCERTAINTIES
|
January 2,
2016
|
January 3,
2015
|
|||
Billed
|
$40,117
|
$47,318
|
||
Accrued and unbilled
|
4,939
|
4,853
|
||
Work-in-progress
|
7,322
|
8,027
|
||
Allowance for sales discounts and doubtful accounts
|
(1,432
|
)
|
(1,011
|
)
|
Accounts receivable, net
|
$50,946
|
$59,187
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
2016
|
January 3,
2015
|
|||
Equipment and furniture
|
$2,358
|
$2,585
|
||
Computers and systems
|
6,119
|
6,553
|
||
Leasehold improvements
|
752
|
781
|
||
9,229
|
9,919
|
|||
Less: accumulated depreciation and amortization
|
4,531
|
6,622
|
||
Property and equipment, net
|
$4,698
|
$3,297
|
Fiscal Year
|
Total
|
January 2, 2016
|
$822
|
December 31, 2016
|
665
|
December 30, 2017
|
313
|
Estimated future contingent consideration payments
|
$1,800
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Engineering
|
Information
Technology
|
Specialty Health Care
|
Total
|
|||||
Balance as of December 28, 2013
|
$2,326
|
$5,516
|
$1,703
|
$9,545
|
||||
Goodwill recorded, PCI acquisition
|
678
|
-
|
-
|
678
|
||||
Balance as of January 3, 2015
|
$3,004
|
$5,516
|
$1,703
|
$10,223
|
||||
Goodwill recorded, SDS acquisition
|
1,407
|
-
|
-
|
1,407
|
||||
Balance as of January 2, 2016
|
$4,411
|
$5,516
|
$1,703
|
$11,630
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Engineering
|
Information
Technology
|
Total
|
||||
Balance as of December 28, 2013
|
$179
|
$37
|
$216
|
|||
Amortization of intangibles during the
fifty-three week period ended
January 3, 2015
|
58
|
32
|
90
|
|||
Intangibles acquired, PCI acquisition
|
68
|
-
|
68
|
|||
Balance as of January 3, 2015
|
$189
|
$5
|
$194
|
|||
Amortization of intangibles during the
fifty-two week period ended
January 2, 2016
|
(77
|
)
|
(5
|
)
|
(82
|
)
|
Intangibles acquired, SDS acquisition
|
140
|
-
|
140
|
|||
Balance as of January 2, 2016
|
$252
|
$-
|
$252
|
January 2,
2016
|
January 3,
2015
|
||
Restricted covenants
|
$53
|
$44
|
|
Customer relationships
|
199
|
150
|
|
Total intagible assets
|
$252
|
$194
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year
|
Total
|
2016
|
$83
|
2017
|
67
|
2018
|
52
|
2019 and thereafter
|
50
|
Total
|
$252
|
9.
|
LINE OF CREDIT
|
Fiscal Years Ended
|
||||
January 2,
2016
|
January 3,
2015
|
|||
Basic weighted average shares outstanding
|
12,658,466
|
12,516,457
|
||
Dilutive effect of outstanding restricted stock units
and stock options
|
242,484
|
214,108
|
||
Weighted average dilutive shares outstanding
|
12,900,950
|
12,730,565
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
2016
|
January 3,
2015
|
|||
Exercise of options outstanding
|
44,500
|
53,000
|
||
Restricted stock units outstanding
|
208,834
|
500,000
|
||
Future grants of options or shares
|
382,000
|
425,000
|
||
Shares reserved for employee stock purchase plan
|
349,436
|
122,484
|
||
Total
|
984,770
|
1,100,484
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year
|
Amount
|
2016
|
$638
|
2017
|
362
|
$1,000
|
Fiscal Years Ended
|
|||
January 2,
2016
|
January 3,
2015
|
||
Weighted average risk-free interest rate
|
1.74%
|
1.61%
|
|
Expected term of option
|
5 years
|
5 years
|
|
Expected stock price volatility
|
35%
|
37%
|
|
Expected dividend yield
|
0.00%
|
0.00%
|
|
Annual forfeiture rate
|
3.23%
|
2.48%
|
|
Weighted-average grant date fair value
|
$5.00
|
$2.33
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Number of
Restricted
Stock Units
(in thousands)
|
Weighted Average
Grant Date Fair
Value per Share
|
|||
Outstanding non-vested at December 28, 2013
|
300
|
$5.72
|
||
Granted
|
200
|
$7.95
|
||
Vested
|
-
|
|||
Forfeited or expired
|
-
|
|||
Outstanding non-vested at January 3, 2015
|
500
|
$6.61
|
||
Granted
|
48
|
$5.00
|
||
Vested
|
(334
|
)
|
$6.05
|
|
Forfeited or expired
|
(5
|
)
|
$7.95
|
|
Outstanding non-vested at January 2, 2016
|
209
|
$7.10
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
All Stock Options Outstanding
|
||||
Shares
|
Weighted Average
Exercise Price
|
|||
Options outstanding as of December 28, 2013
|
276,900
|
$5.47
|
||
Options granted
|
15,000
|
$6.10
|
||
Options exercised, net
|
(185,836
|
)
|
$4.84
|
|
Options forfeited in cashless exercises
|
(42,064
|
)
|
$4.84
|
|
Options forfeited/cancelled
|
(11,000
|
)
|
$8.81
|
|
Options outstanding as of January 3, 2015
|
53,000
|
$7.65
|
||
Options exercisable as of January 3, 2015
|
30,500
|
$8.88
|
||
Intrinsic value of outstanding stock options as of January 3, 2015
|
$33
|
|||
Intrinsic value of stock options exercised in fiscal year ended
January 3, 2015
|
$640
|
|||
Weighted average grant date fair value of stock options issued
during fiscal year ended January 3, 2015
|
$2.33
|
|||
Options outstanding as of January 3, 2015
|
53,000
|
$7.65
|
||
Options granted
|
0
|
$0.00
|
||
Options exercised, net
|
(3,500
|
)
|
$4.30
|
|
Options forfeited/cancelled
|
(5,000
|
)
|
$5.78
|
|
Options outstanding as of January 2, 2016
|
44,500
|
$8.12
|
||
Options exercisable as of January 2, 2016
|
29,500
|
$9.15
|
||
Intrinsic value of outstanding stock options as of January 2, 2016
|
$0
|
|||
Intrinsic value of stock options exercised in fiscal year ended
January 2, 2016
|
$8
|
|||
Weighted average grant date fair value of stock options issued
during fiscal year ended January 2, 2016
|
N/A
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Nonvested Stock Options
|
Shares
|
Weighted-Average
Grant-Date
Fair Value
|
|
Nonvested at January 3, 2015
|
22,500
|
$2.53
|
|
Vested
|
(2,500
|
)
|
$2.88
|
Forfeited
|
(5,000
|
)
|
$2.94
|
Issued nonvested
|
0
|
||
Nonvested at January 2, 2016
|
15,000
|
$2.33
|
Range of
Exercise Prices
|
Number of
Outstanding Options
|
Weighted-Average
Remaining
Contractual Life
|
Weighted-Average
Exercise Price
|
||||||
Outstanding
|
Vested
|
Outstanding
|
Vested
|
Outstanding
|
Vested
|
||||
$5.27 - $5.62
|
4,500
|
4,500
|
4.71
|
4.71
|
$5.46
|
$5.46
|
|||
$6.10
|
15,000
|
0
|
8.37
|
-
|
$6.10
|
-
|
|||
$9.81
|
25,000
|
25,000
|
1.54
|
1.54
|
$9.81
|
$9.81
|
|||
44,500
|
29,500
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
|
12.
|
TREASURY STOCK TRANSACTIONS
|
13.
|
NEW ACCOUNTING STANDARDS
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
13.
|
NEW ACCOUNTING STANDARDS (CONTINUED)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year Ended
January 2, 2016
|
Engineering
|
Information
Technology
|
Specialty Health Care
|
Corporate
|
Total
|
|||||
Revenue
|
$80,713
|
$58,885
|
$46,138
|
$ -
|
$185,736
|
|||||
Cost of services
|
60,472
|
40,787
|
32,592
|
-
|
133,851
|
|||||
Gross profit
|
20,241
|
18,098
|
13,546
|
51,885
|
||||||
Selling, general and administrative
|
15,829
|
14,854
|
11,884
|
-
|
42,567
|
|||||
Depreciation and amortization
|
1,044
|
240
|
183
|
-
|
1,467
|
|||||
Operating income
|
$3,368
|
$3,004
|
$1,479
|
$ -
|
$7,851
|
|||||
Total assets
|
$41,689
|
$14,011
|
$18,520
|
$7,116
|
$81,336
|
|||||
Capital expenditures
|
$1,238
|
$18
|
$73
|
$1,461
|
$2,790
|
Fiscal Year Ended
January 3, 2015
|
Engineering
|
Information
Technology
|
Specialty Health Care
|
Corporate
|
Total
|
|||||
Revenue
|
$99,728
|
$59,202
|
$34,840
|
$ -
|
$193,770
|
|||||
Cost of services
|
75,887
|
41,278
|
24,912
|
-
|
142,077
|
|||||
Gross profit
|
23,841
|
17,924
|
9,928
|
-
|
51,693
|
|||||
Selling, general and administrative
|
16,080
|
14,508
|
9,384
|
-
|
39,972
|
|||||
Depreciation and amortization
|
881
|
216
|
106
|
-
|
1,203
|
|||||
Operating income
|
$6,880
|
$3,200
|
$438
|
$ -
|
$10,518
|
|||||
Total assets
|
$43,396
|
$15,244
|
$17,188
|
$10,905
|
$87,273
|
|||||
Capital expenditures
|
$1,194
|
$ -
|
$112
|
$785
|
$2,091
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year Ended
|
|||||
January 2,
|
January 3,
|
||||
2016
|
2015
|
||||
Revenues
|
|||||
United States
|
$150,024
|
$139,880
|
|||
Canada
|
29,519
|
47,639
|
|||
Puerto Rico
|
6,193
|
6,251
|
|||
$185,736
|
$193,770
|
Fiscal Year Ended
|
|||||
January 2,
|
January 3,
|
||||
2016
|
2015
|
||||
Total Assets
|
|||||
United States
|
$63,886
|
$56,764
|
|||
Canada
|
15,640
|
28,776
|
|||
Puerto Rico
|
1,810
|
1,733
|
|||
$81,336
|
$87,273
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Years Ended
|
|||||
January 2,
2016
|
January 3,
2015
|
||||
Current
|
|||||
Federal
|
($570
|
)
|
$309
|
||
State and local
|
320
|
253
|
|||
Foreign
|
81
|
1,320
|
|||
(169
|
)
|
1,882
|
|||
Deferred
|
|||||
Federal
|
944
|
1,455
|
|||
State
|
274
|
422
|
|||
Foreign
|
90
|
28
|
|||
1,308
|
1,905
|
||||
Total
|
$1,139
|
$3,787
|
Fiscal Years Ended
|
||||
January 2,
2016
|
January 3,
2015
|
|||
United States
|
$6,642
|
$5,979
|
||
Foreign Jurisdictions
|
512
|
4,622
|
||
$7,154
|
$10,601
|
January 2,
2016
|
January 3,
2015
|
|||
Tax at statutory rate
|
34.0
|
%
|
34.0
|
%
|
State income taxes, net of Federal
income tax benefit
|
5.4
|
4.2
|
||
Permanent differences
|
2.2
|
(0.2
|
)
|
|
Foreign income tax rate
|
-
|
(2.1
|
)
|
|
Tax loss on sale of business unit
|
(26.9
|
)
|
-
|
|
Other, net
|
1.2
|
(0.2
|
)
|
|
Total income tax expense
|
15.9
|
%
|
35.7
|
%
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Unrecognized Tax Benefits
|
||
Balance as of January 3, 2015
|
$628
|
|
Charges for current year tax positions
|
-
|
|
Reserves for current year tax position
|
-
|
|
Balance as of January 2, 2016
|
$628
|
January 2,
2016
|
January 3,
2015
|
|||
Deferred tax assets:
|
||||
Allowance for doubtful accounts
|
$501
|
$358
|
||
Acquisition amortization, net
|
352
|
1,056
|
||
Reserves and accruals
|
393
|
301
|
||
Other
|
128
|
511
|
||
Total deferred tax assets
|
1,374
|
2,226
|
||
Deferred tax liabilities:
|
||||
Prepaid expense deferral
|
(491
|
)
|
(343
|
)
|
Bonus depreciation to be reversed
|
(550
|
)
|
(318
|
)
|
Canada deferred tax liability, net
|
(250
|
)
|
(160
|
)
|
Total deferred tax liabilities
|
(1,291
|
)
|
(821
|
)
|
Total deferred tax assets, net
|
$83
|
$1,405
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
16.
|
CONTINGENCIES
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Years
|
Amount
|
2016
|
$3,105
|
2017
|
2,701
|
2018
|
2,180
|
2019
|
884
|
2020
|
431
|
Thereafter
|
51
|
Total
|
$9,352
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2016 and January 3, 2015
(Dollars in thousands, except per share amounts, unless otherwise indicated)
|
Sales
|
Gross
Profit
|
Operating
Income
|
Net
Income
|
Diluted
Income
Per Share
|
||||||
1st Quarter
|
$47,966
|
$13,303
|
$2,355
|
$1,388
|
$0.11
|
|||||
2nd Quarter
|
45,286
|
12,090
|
1,210
|
689
|
0.05
|
|||||
3rd Quarter
|
45,077
|
12,802
|
1,906
|
962
|
0.07
|
|||||
4th Quarter
|
47,407
|
13,690
|
2,380
|
2,976
|
0.24
|
|||||
Total
|
$185,736
|
$51,885
|
$7,851
|
$6,015
|
$0.47
|
Sales
|
Gross
Profit
|
Operating
Income
|
Net
Income
|
Diluted
Income
Per Share
|
||||||
1st Quarter
|
$48,569
|
$12,257
|
$2,038
|
$1,203
|
$0.10
|
|||||
2nd Quarter
|
49,509
|
12,955
|
3,025
|
2,017
|
0.15
|
|||||
3rd Quarter
|
46,382
|
13,161
|
2,833
|
1,877
|
0.15
|
|||||
4th Quarter(1)
|
49,310
|
13,320
|
2,622
|
1,717
|
0.14
|
|||||
Total
|
$193,770
|
$51,693
|
$10,518
|
$6,814
|
$0.54
|
(1)
|
The Company’s fourth quarter in fiscal 2014 contained fourteen weeks and the fiscal year 2014 contained fifty-three weeks.
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
SCHEDULE II
|
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
|||
Description
|
Balance at
Beginning
of Period
|
Charged to
Costs and
Expenses
|
Deduction
|
Balance at
End of
Period
|
|||
Fiscal Year Ended
January 2, 2016
|
|||||||
Allowance for doubtful
accounts on trade receivables
|
$1,011
|
629
|
(208
|
)
|
$1,432
|
||
Provision for contingencies for
legal matters
|
$0
|
214
|
0
|
$214
|
|||
Fiscal Year Ended
January 3, 2015
|
|||||||
Allowance for doubtful
accounts on trade receivables
|
$978
|
905
|
(872
|
)
|
$1,011
|
||
Provision for contingencies for
legal matters
|
$188
|
100
|
(288
|
)
|
$0
|
EXHIBIT INDEX
|
10(cc)
|
Fifth Amendment to Second Amended and Restated Amendment, dated as of December 14, 2015, to Amended and Restated Loan and Security Agreement dated as of February 19, 2009, by and among the Company and all of its subsidiaries, Citizens Bank of Pennsylvania, a Pennsylvania state chartered bank, in its capacity as administrative agent and arranger, and Citizens Bank of Pennsylvania, as lender.
|
(21)
|
Subsidiaries of the Registrant.
|
(23.1)
|
Consent of EisnerAmper LLP.
|
(31.1)
|
Certification of Chief Executive Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended.
|
(31.2)
|
Certification of Chief Financial Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended.
|
(32.1)
|
Certifications of 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.)
|
(32.2)
|
Certifications 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
|
EXHIBIT 21
|
EXHIBIT 23.1
|
EXHIBIT 31.1
|
Date: March 2, 2016
|
/s/
|
Rocco Campanelli
|
Rocco Campanelli
President and Chief Executive Officer
|
EXHIBIT 31.2
|
Date: March 2, 2016
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
|
EXHIBIT 32.1
|
/s/
|
Rocco Campanelli
|
Rocco Campanelli
President and Chief Executive Officer
March 2, 2016
|
EXHIBIT 32.2
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
March 2, 2016
|
Tier
|
Total Funded
Debt to EBITDA
|
Applicable
LIBOR Rate Margin
|
V
|
≥ 2.75x
|
225 b.p.
|
IV
|
≥ 2.50x but <2.75x
|
200 b.p.
|
III
|
≥ 2.25x but <2.50x
|
175 b.p.
|
II
|
≥ 1.25x but < 2.25x
|
150 b.p.
|
I
|
< 1.25x
|
125 b.p.
|
Tier
|
Total Funded
Debt to EBITDA
|
Applicable
Prime Rate Margin
|
V
|
≥ 2.75x
|
30 b.p.
|
IV
|
≥ 2.50x but <2.75x
|
25 b.p.
|
III
|
≥ 2.25x but <2.50x
|
0 b.p.
|
II
|
≥ 1.25x but < 2.25x
|
0 b.p.
|
I
|
< 1.25x
|
0 b.p.
|
Tier
|
Total Funded
Debt to EBITDA
|
Letter of Credit
Applicable Margin
|
V
|
≥ 2.75x
|
2.25% per annum
|
IV
|
≥ 2.25x but <2.75x
|
2.00% per annum
|
III
|
≥ 1.75x but <2.25x
|
1.75% per annum
|
II
|
≥ 1.25x but <1.75x
|
1.50% per annum
|
I
|
< 1.25x
|
1.25% per annum
|
Tier
|
Total Funded
Debt to EBITDA
|
Unused Line Fee
|
V
|
≥ 2.75x
|
22.5 b.p.
|
IV
|
≥ 2.50x but <2.75x
|
20.0 b.p.
|
III
|
≥ 2.25x but <2.50x
|
15.0 b.p.
|
II
|
≥ 1.25x but < 2.25x
|
12.5 b.p.
|
I
|
< 1.25x
|
10.0 b.p.
|
|
(c)
|
(i)
|
On or before October 3, 2015, the Total Funded Debt to EBITDA ratio shall at no time exceed a maximum ratio of 2.75x;
|
BORROWER:
|
RCM TECHNOLOGIES, INC.
|
|||
By:
|
/s/ Kevin D. Miller | |||
Print Name:
|
Kevin D. Miller | |||
Title:
|
CFO | |||
RCM TECHNOLOGIES (USA), INC.
|
||||
By:
|
/s/ Kevin D. Miller | |||
Print Name:
|
Kevin D. Miller | |||
Title:
|
CFO | |||
PROGRAMMING ALTERNATIVES OF MINNESOTA, INC.
|
||||
By:
|
/s/ Kevin D. Miller | |||
Print Name:
|
Kevin D. Miller | |||
Title:
|
CFO | |||
RCMT DELAWARE, INC.
|
||||
By:
|
/s/ Kevin D. Miller | |||
Print Name:
|
Kevin D. Miller | |||
Title:
|
CFO | |||
RCM TECHNOLOGIES CANADA CORP.
|
||||
By:
|
/s/ Kevin D. Miller | |||
Print Name:
|
Kevin D. Miller | |||
Title:
|
CFO | |||
BUSINESS SUPPORT GROUP OF MICHIGAN, INC.
|
||||
By:
|
/s/ Kevin D. Miller | |||
Print Name:
|
Kevin D. Miller | |||
Title:
|
CFO |
AGENT:
|
CITIZENS BANK OF PENNSYLVANA,
as Administrative Agent and Arranger
|
|||
By:
|
/s/ Derrick R. Davis | |||
Print Name:
|
Derrick R. Davis | |||
Title:
|
SVP | |||
LENDERS:
|
CITIZENS BANK OF PENNSYLVANIA,
as Lender
|
|||
By:
|
/s/ Derrick R. Davis | |||
Print Name:
|
Derrick R. Davis | |||
Title:
|
SVP |
Sincerely,
|
||
Name:
|
||
Title:
|
RCM Technologies, Inc.
|
||||
Covenant Compliance
|
||||
As of
|
, 20
|
|||
($ in thousands)
|
6.9(a)
|
Fixed Charge Ratio (tested on rolling four quarter basis)
|
||||||
A.
|
If there is no Total Funded Debt outstanding in the fiscal
quarter in which a Distribution is paid or in the fiscal
quarter immediately following such fiscal quarter:
|
$
|
|||||
The Sum Of:
|
|||||||
EBITDA,
|
$
|
||||||
150% of paid Distributions (excluding the Permitted Dividend)
|
$
|
||||||
Total
|
$
|
||||||
Divided By Sum Of:
|
|||||||
Interest Expense
|
$
|
||||||
Income Taxes Paid
|
$
|
||||||
Scheduled Principal Payments
|
$
|
||||||
Unfunded Capital Expenditures
|
$
|
||||||
Distributions Paid (excluding the Permitted Dividend)
|
$
|
||||||
Total
|
$
|
||||||
Actual Fixed Charge Ratio
|
$
|
||||||
Maximum Fixed Charge Ratio
|
|||||||
Compliance
|
Yes/No
|
||||||
B.
|
If there is Total Funded Debt outstanding in the fiscal
quarter in which a Distribution is paid or in the fiscal
quarter immediately following such fiscal quarter:
|
||||||
EBITDA
|
$
|
||||||
Divided By The Sum Of:
|
|||||||
(i)
|
Interest Expense
|
$
|
|||||
(ii)
|
Income Taxes Paid
|
$
|
|||||
(iii)
|
Scheduled Principal Payments
|
$
|
|||||
(iv)
|
Unfunded Capital Expenditures
|
$
|
|||||
(v)
|
Paid Distributions (excluding the Permitted Dividend)
|
$
|
|||||
Total
|
$
|
||||||
(In the event an amount attributable to a paid Distribution
was added to the numerator of the Fixed Charge Ratio
pursuant to subparagraph A. above during the testing period
in question, that amount shall continue to be included in the
numerator for purposes of determining the Fixed Charge
Ratio pursuant to this subparagraph B).
|
Minimum Fixed Charge Ratio
|
|||||||
Compliance
|
Yes/No
|
||||||
6.9(b)
|
Capital Expenditures and Purchase Money Financing
(tested on rolling four quarter basis)
|
||||||
Total Capital Expenditures
|
$
|
||||||
Total Purchase Money Financing (excluding Acquisitions)
|
$
|
||||||
Total
|
$
|
||||||
Maximum Capital Expenditures and Purchase
|
|||||||
Money Financing
|
$
|
||||||
Compliance
|
Yes/No
|
||||||
6.9(c)
|
Total Funded Debt to EBITDA (tested on rolling four quarter basis)
|
||||||
Total Funded Debt
|
$
|
||||||
EBITDA
|
$
|
||||||
Actual Total Funded Debt to EBITDA
|
$
|
||||||
Maximum Total Funded Debt to EBITDA
|
|||||||
Compliance
|
Yes/No
|
||||||
EXHIBIT 21
|
EXHIBIT 23.1
|
EXHIBIT 31.1
|
Date: March 2, 2016
|
/s/
|
Rocco Campanelli
|
Rocco Campanelli
President and Chief Executive Officer
|
EXHIBIT 31.2
|
Date: March 2, 2016
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
|
EXHIBIT 32.1
|
/s/
|
Rocco Campanelli
|
Rocco Campanelli
President and Chief Executive Officer
March 2, 2016
|
EXHIBIT 32.2
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
March 2, 2016
|
Document And Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2016 |
Mar. 02, 2016 |
Jul. 03, 2015 |
|
Entity Registrant Name | RCM TECHNOLOGIES INC | ||
Entity Central Index Key | 0000700841 | ||
Trading Symbol | rcmt | ||
Current Fiscal Year End Date | --01-02 | ||
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) | 12,474,200 | ||
Entity Public Float | $ 39.3 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 02, 2016 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Jan. 02, 2016 |
Jan. 03, 2015 |
---|---|---|
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, authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, issued (in shares) | 14,559,381 | 14,148,667 |
Common stock, outstanding (in shares) | 12,496,635 | 12,671,887 |
Treasury stock shares (in shares) | 2,062,746 | 1,476,780 |
Consolidated Statements of Income - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Revenues | $ 185,736 | $ 193,770 |
Cost of services | 133,851 | 142,077 |
Gross profit | 51,885 | 51,693 |
Operating costs and expenses | ||
Selling, general and administrative | 42,567 | 39,972 |
Depreciation and amortization | 1,467 | 1,203 |
Operating costs and expenses | 44,034 | 41,175 |
Operating income | 7,851 | 10,518 |
Other (expense) income | ||
Interest expense and other, net | (504) | $ (74) |
Loss on sale of business unit | $ (121) | |
Reduction in contingent consideration | $ 129 | |
(Loss) gain on foreign currency transactions | $ (72) | 28 |
Other income | (697) | 83 |
Income before income taxes | 7,154 | 10,601 |
Income tax expense | 1,139 | 3,787 |
Net income | $ 6,015 | $ 6,814 |
Basic net income per share (in dollars per share) | $ 0.48 | $ 0.54 |
Diluted net income per share (in dollars per share) | $ 0.47 | $ 0.54 |
Consolidated Statements of Comprehensive Income - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|||
Net income | $ 6,015,000 | $ 6,814,000 | ||
Foreign currency translation adjustment | (2,936,000) | (890,000) | ||
Comprehensive income | 3,079,000 | 5,924,000 | ||
Beginning balance | 91,000 | 815,000 | ||
Other comprehensive income before reclassifications | $ (2,936,000) | (890,000) | ||
Amounts reclassified from accumulated other comprehensive income (a) | [1] | 166,000 | ||
Net current-period comprehensive income | $ (2,936,000) | (724,000) | ||
Ending balance | $ (2,845,000) | $ 91,000 | ||
|
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Cash flows from operating activities: | ||
Net income | $ 6,015 | $ 6,814 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,467 | $ 1,203 |
Loss on sale of business unit | $ 121 | |
Change in contingent consideration | $ (129) | |
Share-based compensation expense | $ 1,446 | 806 |
Provision for losses on accounts receivable | 1,021 | 938 |
Deferred income tax expense | 1,322 | 1,906 |
Changes in assets and liabilities: | ||
Accounts receivable | 4,261 | (4,934) |
Transit accounts receivable | (4,216) | 156 |
Prepaid expenses and other current assets | (2,225) | (494) |
Accounts payable and accrued expenses | (80) | (2,988) |
Transit accounts payable | 2,893 | 2,753 |
Accrued payroll and related costs | 837 | (2,321) |
Income taxes payable | (381) | 456 |
Total adjustments | 6,466 | (2,648) |
Net cash provided by operating activities | 12,481 | 4,166 |
Cash flows from investing activities: | ||
Property and equipment acquired | (2,790) | (2,091) |
Decrease (increase) in deposits | 3 | $ (70) |
Payments for business acquired | (800) | |
Cash from sale of business unit | 551 | |
Net cash used in investing activities | (3,036) | $ (2,161) |
Cash flows from financing activities: | ||
Net borrowings under line of credit | 1,000 | 20,000 |
Sale of stock for employee stock purchase plan | 373 | 339 |
Exercise of stock options | 19 | 776 |
Effect of (reduced) excess tax deduction on equity awards | (15) | 15 |
Common stock repurchases | (2,836) | (29) |
Dividends paid to shareholders | (12,529) | (25,344) |
Contingent consideration paid | (200) | (313) |
Net cash used in financing activities | (14,188) | (4,556) |
Effect of exchange rate changes on cash and cash equivalents | (683) | (355) |
Decrease in cash and cash equivalents | (5,426) | (2,906) |
Cash and cash equivalents at beginning of period | 6,411 | 9,317 |
Cash and cash equivalents at end of period | 985 | 6,411 |
Supplemental cash flow information: | ||
Interest | 488 | 69 |
Income taxes | 821 | 1,769 |
Non-cash investing activities: | ||
Contingent consideration recorded, not yet paid, as part of business acquisition | $ 746 | 766 |
Fixed assets acquired in acquisition | 26 | |
Non-cash financing activities: | ||
Dividend declared but unpaid on unvested restricted stock units | $ 209 | $ 1,000 |
Dividends forfeited on unvested forfeited restricted stock units | (10) | |
Vesting of restricted stock units | $ 1,857 |
Note 1 - Summary of Significant Accounting Policies |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2016 | |||
Notes to Financial Statements | |||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Description of Business and Basis of Presentation RCM Technologies, Inc. (the “Company” or “RCM”) is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced engineering and information technology services. Additionally, the Company provides specialty health care staffing services through its Specialty Health Care Services group. RCM’s offices are primarily located in major metropolitan centers throughout North America. The consolidated financial statements are comprised of the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents The Company considers its holdings of highly liquid money-market instruments and certificates of deposits to be cash equivalents if the securities mature within 90 days from the date of acquisition. These investments are carried at cost, which approximates fair value. The Company’s cash balances are maintained in accounts held by major banks and financial institutions. The majority of these balances exceed federally insured amounts. The Company held $0.1 million and $3.3 million of cash and cash equivalents in Canadian banks as of January 2, 2016 and January 3, 2015, respectively, which was held principally in Canadian dollars. Fair Value of Financial Instruments The Company’s carrying value of financial instruments, consisting primarily of accounts receivable, transit accounts receivable, accounts payable, transit accounts payable and accrued expenses, 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. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable are primarily due from trade customers. Credit is extended based on evaluation of customers’ financial condition and, generally, collateral is not required. Accounts receivable payment terms vary and are stated in the financial statements at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables previously written off are credited to bad debt expense. Accrued and Unbilled Accounts Receivable and Work-in-Process Unbilled receivables primarily represent revenues earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-process primarily represents revenues earned under contracts which the Company is contractually precluded from invoicing until future dates as project milestones are realized. See Note 4 for further details. Transit Receivables and Transit Payables From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. In certain circumstances, the Company may acquire equipment as a purchasing agent for the client for a fee. Pursuant to these agreements, the Company: a) may engage subcontractors to provide construction or other services or contracts with manufacturers on behalf of the Company’s clients to procure equipment or fixtures; b) typically earns a fixed percentage of the total project value or a negotiated mark-up on subcontractor or procurement charges as a fee; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of “Overall Considerations of Reporting Revenue Gross as a Principal versus Net as an Agent” and therefore recognizing revenue on a “net-basis.” The Company records revenue on a “net” basis on relevant engineering and construction management projects, which require subcontractor/procurement costs or transit costs. In those situations, the Company charges the client a negotiated fee, which is reported as net revenue when earned. 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. Property and Equipment Property and equipment are stated at cost net of accumulated depreciation and amortization and are depreciated or amortized on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. The Company’s ERP software system, installed in 1999 and upgraded in 2004, is being amortized over fifteen years. The Company’s VOIP telephone system, the installation of which was substantially complete at the end of 2008, is being depreciated over seven years. All other hardware and software as well as furniture and office equipment is depreciated or amortized over five years. Leasehold improvements are depreciated over the shorter of the estimated life of the asset or the lease term. Intangible Assets The Company’s intangible assets have been generated through acquisitions. The Company maintains responsibility for valuing and determining the useful life of intangible assets and typically engages a third party valuation firm to assist them. As a general rule, the Company amortizes restricted covenants over four years and customer relationships over six years. However, circumstances may dictate other amortization terms as determined by the Company and assisted by their third party advisors. Canadian Sales Tax The Company is required to charge and collect sales tax for all Canadian clients and remits invoiced sales tax monthly to the Canadian taxing authorities whether collected or not. The Company does not collect the sales tax from its clients until they have paid their respective invoices. The Company includes uncollected Canadian sales tax invoiced to clients in its prepaid and other current assets. Goodwill Goodwill represents the premium paid over the fair value of the net 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 in order to determine if any impairment in value has occurred. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform a two-step impairment test. An assessment of those qualitative factors or the application of the goodwill impairment test requires significant judgment including but not limited to the assessment of the business, its management and general market conditions, estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination of weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. 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 more frequently if indicators of impairment exist. The Company periodically analyzes whether any such indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a sustained, significant decline in share price and market capitalization, a decline in expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, a material change in management or other key personnel and/or slower expected growth rates, among others. Due to the thin trading of the Company stock in the public marketplace and the impact of the control premium held by a relatively few shareholders, the Company does not consider the market capitalization of the Company the most appropriate measure of fair value of goodwill for our reporting units. The Company looks to earnings/revenue multiples of similar companies recently completing acquisitions and the ability of our reporting units to generate cash flows as better measures of the fair value of our reporting units. The Company compares the fair value of each of its reporting units to their respective carrying values, including related goodwill. There can be no assurance that future tests of goodwill impairment will not result in impairment charges. The Company determined there was no impairment during the fiscal years ended January 2, 2016 and January 3, 2015. In both years, the Company determined that it was only necessary to assess qualitative factors and therefore did not perform a two-step impairment test. Long-Lived and Intangible Assets 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 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. Software In accordance with “Accounting for Costs of Computer Software Developed or Obtained for Internal Use,” certain costs related to the development or purchase of internal-use software are capitalized and amortized over the estimated useful life of the software. During the fiscal years ended January 2, 2016 and January 3, 2015, the Company capitalized approximately $2,249 and $359, respectively, for software costs. The net balance after accumulated depreciation for all software costs capitalized as of January 2, 2016 and January 3, 2015 was $2,386 and $643, respectively. Income Taxes The Company makes judgments and interpretations based on enacted tax laws, published tax guidance, as well as estimates of future earnings. These judgments and interpretations affect the provision for income taxes, deferred tax assets and liabilities and the valuation allowance. The Company evaluated the deferred tax assets and determined on the basis of objective factors that the net assets will be realized through future years’ taxable income. In the event that actual results differ from these estimates and assessments, additional valuation allowances may be required. The Company did not have any valuation allowance as of January 2, 2016 or January 3, 2015. The Company accounts for income taxes in accordance with “Accounting for Income Taxes” which requires an asset and liability approach of accounting for income taxes. “Accounting for Income Taxes” requires assessment of the likelihood of realizing benefits associated with deferred tax assets for purposes of determining whether a valuation allowance is needed for such deferred tax assets. The Company and its wholly owned U.S. subsidiaries file a consolidated federal income tax return. The Company also files tax returns in Canada and Ireland. The Company also follows the provisions of “Accounting for Uncertainty in Income Taxes” which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. The Company’s policy is to record interest and penalty, if any, as interest expense. Revenue Recognition The Company derives its revenues from several sources. The Company’s Engineering Services and Information Technology Services segments perform consulting and project solutions services. All of the Company’s segments perform staff augmentation services and derive revenue from permanent placement fees. The majority of the Company’s revenues are invoiced on a time and materials basis. Project Services The Company recognizes revenues in accordance with current revenue recognition standards under Accounting Standards Codification (“ASC”) 605, Revenue Recognition, which clarifies application of U.S. generally accepted accounting principles to revenue transactions. Project services are generally provided on a cost-plus, fixed-fee or time-and-material basis. Typically, a customer will outsource a discrete project or activity and the Company assumes responsibility for the performance of such project or activity. The Company recognizes revenues and associated costs on a gross basis as services are provided to the customer and costs are incurred using its employees. The Company, from time to time, enters into contracts requiring the completion of specific deliverables. The Company may recognize revenues on these deliverables at the time the client accepts and approves the deliverables. In instances where project services are provided on a fixed-price basis and the contract will extend beyond a 12-month period, revenue is recorded in accordance with the terms of each contract. In some instances, revenue is billed at the time certain milestones are reached, as defined in the contract. Revenues under these arrangements are recognized as the costs on these contracts are incurred. Amounts invoiced in excess of revenues recognized are recorded as deferred revenue, included in accounts payable and accrued expenses on the accompanying balance sheets. In other instances, revenue is billed and recorded based upon contractual rates per hour (i.e., percentage of completion). In addition, some contracts contain “Performance Fees” (bonuses) for completing a contract under budget. Performance Fees, if any, are recorded when earned. Some contracts also limit revenues and billings to specified maximum amounts. Provision for contract losses, if any, are made in the period such losses are determined. For contracts where there is a deliverable, the work is not complete on a specific deliverable and the revenue is not recognized, the costs are deferred. The associated costs are expensed when the related revenue is recognized. Revenue Recognition (Continued) See description of revenue recognition policy for construction management and engineering services below in “transit receivables and transit payables.” Consulting and Staffing Services Revenues derived from consulting and staffing services are recorded on a gross basis as services are performed and associated costs have been incurred using employees of the Company. These services are typically billed on a time and material basis. In certain cases, the Company may utilize other companies and their employees to fulfill customer requirements. In these cases, the Company receives an administrative fee for arranging for, billing for, and collecting the billings related to these companies. The customer is typically responsible for assessing the work of these companies who have responsibility for acceptability of their personnel to the customer. Under these circumstances, the Company’s reported revenues are net of associated costs (effectively recognizing the net administrative fee only). Transit Receivables and Transit Payables From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. In certain circumstances, the Company may acquire equipment as a purchasing agent for the client for a fee. Pursuant to these agreements, the Company: a) may engage subcontractors to provide construction or other services or contracts with manufacturers on behalf of the Company’s clients to procure equipment or fixtures; b) typically earns a fixed percentage of the total project value or a negotiated mark-up on subcontractor or procurement charges as a fee; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of “Overall Considerations of Reporting Revenue Gross as a Principal versus Net as an Agent” and therefore recognizing revenue on a “net-basis.” The Company records revenue on a “net” basis on relevant engineering and construction management projects, which require subcontractor/procurement costs or transit costs. In those situations, the Company charges the client a negotiated fee, which is reported as net revenue when earned. During the fifty-two week period ended January 2, 2016, total gross billings, including both transit cost billings and the Company’s earned fees, was $65.9 million, for which the Company recognized $34.5 million of its net fee as revenue. During the fifty-three week period ended January 3, 2015, total gross billings, including both transit cost billings and the Company’s earned fees, was $72.6 million, for which the Company recognized $41.0 million of its net fee as revenue. The net fee revenue from these agreements represented 18.6% of the Company’s total revenues for the fifty-two week period ended January 2, 2016 as compared to 21 . 2% for the comparable prior year period. 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 $7.5 million and related transit accounts payable was $9.0 million, a net payable of $1.5 million, as of January 2, 2016. The transit accounts receivable was $3.8 million and related transit accounts payable was $6.7 million, a net payable of $2.9 million, as of January 3, 2015. Revenue Recognition (Continued) Permanent Placement Services The Company earns permanent placement fees from providing permanent placement services. Fees for placements are recognized at the time the candidate commences employment. The Company guarantees its permanent placements on a prorated basis for 90 days. In the event a candidate is not retained for the 90-day period, the Company will provide a suitable replacement candidate. In the event a replacement candidate cannot be located, the Company will provide a prorated refund to the client. An allowance for refunds, based upon the Company’s historical experience, is recorded in the financial statements. Revenues are recorded on a gross basis. Permanent placement revenues were $3.4 million and $2.3 million for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. Concentration During the fiscal year ended January 2, 2016, no client accounted for more than 10.0% of total revenues. As of January 2, 2016 the following clients represented more than 10.0% of the Company’s accounts receivable, net: 1) New York Power Authority was 17.4% and 2) Ontario Power Group (the Company primarily serviced Ontario Power Generation as a subcontractor through Black and McDonald Limited) was 16.5% and 3) New York City Board of Education was 10.3%. As of January 2, 2016, New York Power Authority total accounts receivable balance (including transit accounts receivable of $1.0 million) was $9.8 million or 16.8% of the total of accounts receivable, net and transit accounts receivable. As of January 2, 2016, Ontario Power Group total accounts receivable balance (including transit accounts receivable of $1.1 million) was $9.5 million or 15.5% of the total accounts receivable, net and transit accounts receivable. No other customer accounted for 10% or more of the Company’s accounts receivable, net or total accounts receivable balance (including transit accounts receivable). The Company’s five, ten and twenty largest customers accounted for approximately 33.7%, 48.3% and 60.5%, respectively, of the Company’s revenues for the fiscal year ended January 2, 2016. During the fiscal year ended January 3, 2015, Ontario Power Group (the Company primarily serviced Ontario Power Generation as a subcontractor through Black and McDonald Limited) and United Technologies Corporation accounted for 21.4% and 12.9% of the Company’s revenues, respectively, and as of January 3, 2015 represented 29.4% and 3.3% of the Company’s accounts receivable, net. No other customer accounted for 10% or more of the Company’s revenues. As of January 3, 2015, New York Power Authority total accounts receivable balance (including transit accounts receivable of $1.4 million) was $8.9 million or 14.1% of the total of accounts receivable, net and transit accounts receivable. No other customer accounted for 10% or more of the Company’s accounts receivable, net. The Company’s five, ten and twenty largest customers accounted for approximately 48.1%, 61.4% and 69.8%, respectively, of the Company’s revenues for the fiscal year ended January 3, 2015. Foreign Currency Translation The functional currency of the Company’s Canadian subsidiary is the local currency. Assets and liabilities are translated at period-end exchange rates. Income and expense items are translated at weighted average rates of exchange prevailing during the year. Any translation adjustments are included in the accumulated other comprehensive income account in stockholders’ equity. Transactions executed in different currencies resulting in exchange adjustments are translated at spot rates and resulting foreign exchange transaction gains and losses are included in the results of operations. Comprehensive Income Comprehensive income consists of net income and foreign currency translation adjustments. Per Share Data Basic net income per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated using the weighted-average number of common shares plus dilutive potential common shares outstanding during the period. Potential dilutive common shares consist of stock options and other stock-based awards under the Company’s stock compensation plans, when their impact is dilutive. Because of the Company’s capital structure, all reported earnings pertain to common shareholders and no other adjustments are necessary. Share - Based Compensation The Company recognizes share-based compensation over the vesting period of an award based on fair value at the grant date determined using the Black-Scholes option pricing model. Certain assumptions are used to determine the fair value of stock-based payment awards on the date of grant and require subjective judgment. Because employee stock options have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing models may not provide a reliable single measure of the fair value of the employee stock options. Management assesses the assumptions and methodologies used to calculate estimated fair value of stock-based compensation when share-based awards are granted. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies and thereby materially impact our fair value determination. See Note 11 for additional share-based compensation information. Restricted stock units are recognized at their fair value. The amount of compensation cost is measured on the grant date fair value of the equity instrument issued. The compensation cost of the restricted stock units is recognized over the vesting period of the restricted stock units on a straight-line basis. 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 restricted share units that ultimately do not vest are forfeited. Advertising Costs Advertising costs are expensed as incurred. Total advertising expense was $635 and $680 for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. |
Note 2 - Fiscal Year |
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Notes to Financial Statements | |||
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 January 2, 2016 (fiscal 2015) was a 52-week reporting year and that ended January 3, 2015 (fiscal 2014) was a 53-week reporting year. |
Note 3 - Use of Estimates and Uncertainties |
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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. Fair 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 |
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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 date. Work-in-process primarily represents revenues earned under contracts which the Company contractually invoices at future dates. |
Note 5 - Property and Equipment |
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Property, Plant and Equipment Disclosure [Text Block] |
Property and equipment are comprised of the following:
The Company writes off fully depreciated and amortized assets each year. In the fiscal years ended January 2, 2016 and January 3, 2015, write-offs were $3,489 and $954, respectively. For the fiscal years ended January 2, 2016 and January 3, 2015, depreciation and amortization expense was $1,386 and $1,107, respectively. |
Note 6 - Acquisitions |
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Business Combination Disclosure [Text Block] |
General 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. As of January 2, 2016, the Company had three 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”); and 3) effective July 5, 2015, the Company acquired certain assets of Substation Design Services, LLC (“SDS”). The Company estimates future contingent payments at January 2, 2016 as follows:
Estimates of future contingent payments are subject to significant judgment and actual payments may materially differ from estimates. Future contingent payments to be made to BGA, PCI and SDS are capped at cumulative maximums of $1.9 million, $1.9 million and $1.5 million, respectively. 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 January 2, 2016. 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. SDS Effective July 5, 2015, the Company acquired the business operations of Substation Design Services, LLC (“SDS”). SDS was a Pennsylvania based engineering company specializing in the in design services for substation projects. SDS has experience with substation design, including electrical design, system protection and control design, and civil structural design. The Company expects the purchase of SDS to complement and expand RCM’s engineering services offerings and provide RCM’s customers with a stronger depth of experienced engineering resources. The Company believes that the SDS assembled workforce consists of highly trained and experienced engineers that will greatly assist RCM in executing future growth in revenues. The SDS acquisition operates as part of the Company’s Engineering segment. PCI Effective August 1, 2014, the Company purchased the stock of PCI. PCI was a Toronto, Canada based engineering company specializing in the design, installation, supervision and commissioning of high voltage electrical equipment in substations and power plants. PCI provides comprehensive design and engineering of substations at any voltage level, system studies, 3D implementation, site commissioning, project management, consulting and site management. RCM expects the purchase of PCI to complement and expand RCM’s engineering services offerings and provide RCM’s customers with a stronger depth of experienced engineering resources. The Company believes that the PCI assembled workforce consists of highly trained and experienced engineers that will greatly assist RCM in executing future growth in revenues. The PCI acquisition operates as part of the Company’s Engineering segment. |
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 indicators of impairment, the Company has not performed a quantitative impairment test. The changes in the carrying amount of goodwill for the fifty-two week period ended January 2, 2016 are as follows:
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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. The following table reflects the components of net intangible assets, excluding goodwill, as of January 2, 2016:
The Company periodically writes off fully amortized intangible assets. The Company wrote off $291 in fully amortized intangibles for the year ended January 2, 2016. The Company did not write off any fully amortized intangibles for the year ended January 3, 2015. Schedule of Intangible Assets by class at January 2, 2016 and January 3, 2015:
Expected Future Amortization Expense:
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Note 9 - Line of Credit |
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Debt Disclosure [Text Block] |
The Company and its subsidiaries are party to a loan agreement with Citizens Bank of Pennsylvania, amended and restated effective February 20, 2009, 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”). The Revolving Credit Facility has been amended several times, most recently on December 12, 2014 when the maturity date was extended to December 11, 2019. 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, or (ii) the agent bank’s prime rate. 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 Company experienced a net effective interest rate of 2.5% in fiscal 2015. 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. The Company paid a special cash dividend on December 30, 2014 which was expressly permitted under its amended Revolving Credit Facility. The Company was in full compliance with the covenants in its Revolving Credit Facility as of January 2, 2016. The Company had borrowings of $21.0 million as of January 2, 2016 and $20.0 million as of January 3, 2015. At January 2, 2016 and January 3, 2015, there were letters of credit outstanding for $0.8 million. At January 2, 2016, the Company had availability for additional borrowings under the Revolving Credit Facility of $13.2 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 fiscal years ended January 2, 2016 and January 3, 2015 was determined as follows:
There were 42,500 and 40,000 absolute anti-dilutive shares not included in the calculation of common stock equivalents for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. These were determined to be anti-dilutive because the exercise prices of these shares for the period were higher than the average price of all shares for the same period. Unissued shares of common stock were reserved for the following purposes:
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Note 11 - Share-based Compensation |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
At January 2, 2016, the Company had four 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 awards is amortized in accordance with applicable vesting periods using the straight-line method. Share-based compensation expense of $1,446 and $806 was recognized for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. As of January 2, 2016, the Company had approximately $1.0 million of total unrecognized compensation cost related to all 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 the cost of any additional share-based awards that may be granted in future periods or reflect any potential changes in the Company’s forfeiture rate. During fiscal 2015, the Company’s Compensation Committee of the Board of Directors began planning a Long Term Incentive Plan (“LTIP”) for certain executives. The LTIP is anticipated to issue restricted stock units that are contingent upon achieving certain performance metrics as defined by the Compensation Committee over a three fiscal year performance period. Since this plan had not been finalized as of January 2, 2016, no LTIP shares are reflected in the forecasted future expense associated with equity compensation as shown below. The Company granted 48,000 restricted stock units during the fiscal year ended January 2, 2016 and 15,000 stock options and 200,000 restricted stock units during the fiscal year ended January 3, 2015. The Company estimates that it will recognize expenses for all unvested share-based awards outstanding as of January 2, 2016 as follows:
It is important to note the above estimates are based on certain assumptions that are subject to change and that the actual expense recognized may materially differ from above. The risk-free rate of return is based on the yield of U.S. Treasury Strips with terms equal to the expected life of the grants as of the grant date. The expected term of grant is based on historical stock option exercise experience. The Company used its historical stock price volatility to compute the expected stock price volatility. The expected dividend yield is based on the Company’s fiscal 2015 dividend rate. The annual forfeiture rate is based on the Company’s historical experience. The Black-Scholes option weighted average assumptions used in the valuation of share based awards for the fiscal years ended January 2, 2016 and January 3, 2015 were as follows:
2000 Employee Stock Incentive Plan (the 2000 Plan) The 2000 Plan, approved by the Company’s stockholders in April 2001, provides for the issuance of up to 1,500,000 shares of the Company’s common stock to officers and key employees of the Company and its subsidiaries or to consultants and advisors utilized by the Company. The Compensation Committee of the Board of Directors could award incentive stock options or non-qualified stock options, as well as stock appreciation rights, and determined the vesting period at the time of grant. As of January 2, 2016, options to purchase 25,000 shares of common stock granted under the 2000 Plan were outstanding. 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. No more than 350,000 shares of common stock in the aggregate could be issued pursuant to grants of stock awards, stock units, performance shares and other stock-based awards. No more than 300,000 shares of common stock with respect to awards could be granted to any individual during any fiscal year. The Compensation Committee of the Board of Directors determined the vesting period at the time of grant. As of January 2, 2016, options to purchase 19,500 shares of common stock, as well as 25,834 restricted stock units, were outstanding under the 2007 Plan. The 2000 Plan and 2007 Plan are expired and therefore no additional shares are available for awards 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. The Compensation Committee of the Board of Directors determines the vesting period at the time of grant. As of January 2, 2016, under the 2014 Plan, 183,000 restricted stock units were outstanding and 382,000 shares were available for awards thereunder. Restricted Stock Units During fiscal 2015, the Company issued 48,000 restricted share units, all of which were issued to the Board of Directors as part of their annual compensation program and vest at the end of fiscal 2016. During fiscal 2014, the Company granted 200,000 restricted stock units, 60,000 of which vested in fiscal 2015 with the balance scheduled to vest in fiscal 2017. All of these restricted stock units include dividend accrual equivalents, which means that any dividends paid by the Company after issuance but before vesting of the restricted stock unit 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 restricted share units that ultimately do not vest are forfeited. As of January 2, 2016, the Company has 208,834 restricted stock units outstanding, all of which include dividend equivalent rights. Total dividends accrued and payable upon vesting on all restricted stock units as of January 2, 2016 and January 3, 2015 equals $0.5 million and $1.3 million, respectively.
Based on the closing price of the Company’s common stock of $5.50 per share on December 31, 2015, the intrinsic value of the non-vested restricted stock units at January 2, 2016 was $1.1 million. As of January 2, 2016, there was approximately $1.0 million of total unrecognized compensation cost related to restricted stock units. Stock Option Awards Transactions related to all stock options under all plans are as follows:
Stock Option Awards (Continued) A summary of the status of our nonvested stock options outstanding as of January 2, 2016, and changes during the year then ended is presented as follows:
The following table summarizes information about stock options outstanding at January 2, 2016:
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 by increasing 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 by extending the expiration date of the Plan to December 31, 2025. During the fiscal years ended January 2, 2016 and January 3, 2015, there were 73,048 and 67,092 shares issued under the Purchase Plan for net proceeds of $373 and $339, respectively. As of January 2, 2016, there were 349,436 shares available for issuance under the Purchase Plan. Compensation expense, representing the discount to the quoted market price, for the Purchase Plan for the fiscal years ended January 2, 2016 and January 3, 2015 was $111 and $114, respectively. |
Note 12 - Treasury Stock Transactions |
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Jan. 02, 2016 | |||
Notes to Financial Statements | |||
Treasury Stock [Text Block] |
Our Board of Directors instituted a share repurchase program in February 2010, which authorized the repurchase of up to $7.5 million of the Company’s outstanding shares of our common stock at prevailing market prices, from time to time over the subsequent 12 months. In February 2011, the share repurchase program was extended through February 2013. During the fiscal year ended December 28, 2013, the Company repurchased 15,450 shares for an average price of $5.35 per share. Over the life of this share repurchase program, the Company purchased 1,473,306 shares at a total cost of approximately $7.5 million, or an average price of $5.09. On October 28, 2013, the Board of Directors authorized an additional 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. For the fiscal year ended January 2, 2016, the Company repurchased 585,966 shares for an average price of $4.84 per share. |
Note 13 - New Accounting Standards |
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Jan. 02, 2016 | |||
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, which requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration it expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB voted to delay the effective date of this standard by one year. This deferral resulted in ASU 2014-09 being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. However, early adoption is permitted so that ASU 2014-09 would become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company intends to adopt the standard early so that it will be effective for the Company beginning in the first quarter of fiscal 2017. The new standard permits the use of either the retrospective or cumulative effect transition method on adoption. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures, including which transition method it will adopt, but does not anticipate a material impact . In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern, which states management should evaluate whether there are conditions or events, considered in the aggregate, that raise a substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and likely to occur at the date that the financial statements are issued. The standard update will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter, however, early application is permitted. The Company is evaluating the effect that ASU 2014-15 will have on its consolidated financial statements and related disclosures, but does not anticipate a material impact.In April 2015, the FASB issued ASU 2015-03 S implifying the Presentation of Debt Issuance Costs , which changes the presentation of debt issuance costs in financial statements. Under the standard, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability. Amortization of the costs is reported as interest expense. However, for debt issuance costs related to line-of-credit arrangements, such costs can be deferred and presented as an asset and subsequently amortized ratably over the term of the arrangement. The standard will be effective for the annual period beginning after December 15, 2015. The Company is evaluating the effect that ASU 2015-03 will have on its consolidated financial statements and related disclosures. The Company incurred de minimis costs associated with changes to its line of credit in fiscal 2015 and expensed those costs.In April 2015, the FASB issued ASU No. 2015-05(ASU 2015-05), I n t ang i b l e s — G ood wil l an d O t h e r — I n t e r na l -U se So ftw a re ( Sub t op i c 350 - 40 ) : C u s t o m e r ’ s A cc oun ti n g f o r F ee s P a i d i n a Cl ou d C o m pu ti n g A rr ang e m e n t . This standard clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software under ASC 350-40. ASU 2015-05 is effective for public entities for annual and interim periods therein beginning after December 15, 2015. Early adoption is permitted. Entities may adopt the guidance either retrospectively or prospectively to arrangements entered into, or materially modified after the effective date. The Company is currently evaluating the impact the adoption of ASU 2015-05 will have on its consolidated financial statements, but does not anticipate a material impact.In September 2015, The FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . With the issuance of ASU 2015-16, the current guidance under FASB Accounting Standards Codification (FASB ASC) 805 eliminates the requirement that an acquirer retrospectively adjust provisional amounts recognized in a business combination during the measurement period. The measurement period is one year from the date of the acquisition. The amendments in ASU 2015-16 require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The financial statements should contain the effect on earnings of changes in depreciation, amortization or other income effects calculated as if the accounting had been completed at acquisition date. The financial statements should also separately present on the face of the income statement, or disclose in the footnotes, the amount of adjustments recorded in the current period, by line item, that would have been recorded in prior periods had the adjustment been made at the date of acquisition. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in ASU 2015-16 are effective for fiscal years beginning after December 15, 2016 and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company has adopted ASU 2015-16 in fiscal 2015 and it did not have any impact on its financial statements.In November 2015, The FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. Importantly, the guidance does not change the existing requirement that only permits offsetting within a jurisdiction – that is, companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The new guidance will be effective for public business entities in fiscal years beginning after December 15, 2016, including interim periods within those years (i.e., in the first quarter of 2017 for calendar year-end companies). For entities other than public business entities, the amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively (i.e., by reclassifying the comparative balance sheet). If applied prospectively, entities are required to include a statement that prior periods were not retrospectively adjusted. If applied retrospectively, entities are also required to include quantitative information about the effects of the change on prior periods. The Company has adopted ASU 2015-17 for its balance sheet as presented on January 2, 2016. |
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 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 January 2, 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 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 fiscal years ended January 2, 2016 and January 3, 2015 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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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] |
The components of income tax expense (benefit) are as follows:
The components of earnings before income taxes by United States and foreign jurisdictions were as follows:
The consolidated effective income tax rate for the current year was 15.9% as compared to 35.7% for the comparable prior year period, the difference principally due to the write-off of tax basis goodwill associated with the sale of a business unit in the Company’s Information Technology segment. The income tax provisions reconciled to the tax computed at the statutory Federal rate are:
A reconciliation of the unrecognized tax benefits for the year January 2, 2016:
The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits will not change during the next 12 months. However, changes in the occurrence, expected outcomes and timing of those events could cause the Company’s current estimate to change materially in the future. The Company accounts for penalties or interest related to uncertain tax positions as part of its provision for income taxes and records such amounts to interest expense. The Company recorded no expense for penalties or interest in the fiscal years ended January 2, 2016 and January 3, 2015. At January 2, 2016 and January 3, 2015, deferred tax assets and liabilities consist of the following:
The Company conducts its operations in multiple tax jurisdictions in the United States, Canada and Puerto Rico. The Company and its subsidiaries file a consolidated U.S. Federal income tax return and file in various states. The Company’s federal income tax returns have been examined through 2010. The Internal Revenue Service is currently examining fiscal tax years 2011 and 2012. The State of New Jersey is currently examining fiscal tax years 2009 through 2012. Except for New Jersey and other limited exceptions, the Company is no longer subject to audits by state and local tax authorities for tax years prior to 2010. The Company is no longer subject to audit in Canada for the tax years prior to tax year 2010. The Company is no longer subject to audit in Puerto Rico for the tax years prior to tax year 2005. |
Note 16 - Contingencies |
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Notes to Financial Statements | |||
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 $1.9 million and $7.6 million in damages as of January 2, 2016 and January 3, 2015, respectively . The primary reason for the reduction is that one matter in which claims of $6.5 million were asserted as of January 3, 2015 was settled without any contribution from the Company. As of January 2, 2016, the Company had $0.2 million reserved for asserted claims. 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 17 - Retirement Plans |
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Notes to Financial Statements | |||
Pension and Other Postretirement Benefits Disclosure [Text Block] |
Profit Sharing Plan s The Company maintains a 401(k) profit sharing plan for the benefit of eligible employees in the United States and other similar plans in Canada and Puerto Rico (the “Retirement Plans”). The 401(k) plan includes a cash or deferred arrangement pursuant to Section 401(k) of the Internal Revenue Code sponsored by the Company to provide eligible employees an opportunity to defer compensation and have such deferred amounts contributed to the 401(k) plan on a pre-tax basis, subject to certain limitations. The Company, at the discretion of the Board of Directors, may make contributions of cash to match deferrals of compensation by participants in the Retirement Plans. Contributions to the Retirement Plans charged to operations by the Company for the fiscal years ended January 2, 2016 and January 3, 2015 were $587 and $569, respectively. |
Note 18 - Commitments |
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Commitments and Contingencies Disclosure [Text Block] |
Executive Severance Agreements with Rocco Campanelli and Kevin Miller The Company is a party to Executive Severance Agreements (the “Executive Severance Agreements”) with Rocco Campanelli, the Company’s President and Chief Executive Officer as of February 28, 2014, and Kevin Miller, the Company’s Chief Financial Officer, which set forth the terms and conditions of certain payments to be made by the Company to each executive in the event, while employed by the Company, such executive experiences (a) a termination of employment unrelated to a “Change in Control” (as defined therein) or (b) there occurs a Change in Control and either (i) the executive’s employment is terminated for a reason related to the Change in Control or (ii) the executive remains continuously employed with the Company for a specified period of time following the Change in Control (i.e., twelve months for Mr. Campanelli and three months for Mr. Miller). Under the terms of the Executive Severance Agreements, if either (a) the executive is involuntarily terminated by the Company for any reason other than “Cause” (as defined therein), “Disability” (as defined therein) or death, or (b) the executive resigns for “Good Reason” (as defined therein), and, in each case, the termination is not a “Termination Related to a Change in Control” (as defined below), the executive will receive the following severance payments: (i) an amount equal to 1.5 times the sum of (a) the executive’s annual base salary as in effect immediately prior to the termination date (before taking into account any reduction that constitutes Good Reason) (“Annual Base Salary”) and (b) the highest annual bonus paid to the executive in any of the three fiscal years immediately preceding the executive’s termination date (“Bonus”), to be paid in installments over the twelve month period following the executive’s termination date; and (ii) for a period of eighteen months following the executive’s termination date, a monthly payment equal to the monthly COBRA premium that the executive is required to pay to continue medical, vision, and dental coverage, for himself and, where applicable, his spouse and eligible dependents. Notwithstanding the above, if the executive has a termination as described above and can reasonably demonstrate that such termination would constitute a Termination Related to a Change in Control, and a Change in Control occurs within 120 days following the executive’s termination date, the executive will be entitled to receive the payments set forth below for a Termination Related to a Change in Control, less any amounts already paid to the executive, upon consummation of the Change in Control. Under the terms of the Executive Severance Agreements, if a Change in Control occurs and (a) the executive experiences a Termination Related to a Change in Control on account of (i) an involuntary termination by the Company for any reason other than Cause, death, or Disability, (ii) an involuntary termination by the Company within a specified period of time following a Change in Control (i.e., twelve months for Mr. Campanelli and three months for Mr. Miller) on account of Disability or death, or (iii) a resignation by the executive with Good Reason; or (b) a resignation by the executive, with or without Good Reason, which results in a termination date that is the last day of the specified period (i.e., twelve months for Mr. Campanelli and three months for Mr. Miller) following a Change in Control, then the executive will receive the following severance payments: (1) a lump sum payment equal to two times the sum of the executive’s (a) Annual Base Salary and (b) Bonus; and (2) a lump sum payment equal to twenty-four multiplied by the monthly COBRA premium cost, as in effect immediately prior to the executive’s termination date, for the executive to continue medical, dental and vision coverage, as applicable, in such Company plans for himself and, if applicable, his spouse and eligible dependents. The Executive Severance Agreements provide that if the executive remains continuously employed for a specified period of time following a Change in Control (i.e., twelve months for Mr. Campanelli and three months for Mr. Miller) and is employed by the Company on the last day of such specified period, the executive will receive a lump sum payment equal to two times the sum of the executive’s (a) Annual Base Salary and (b) Bonus (the “Change in Control Payment”). If the executive receives the Change in Control Payment, the executive will not be eligible to receive any severance payments under his Executive Severance Agreement. Operating Leases The Company leases office facilities and various equipment under non-cancelable leases expiring at various dates through June 2020. Certain leases are subject to escalation clauses based upon changes in various factors. The minimum future annual operating lease commitments for leases with non-cancelable terms, exclusive of unknown operating escalation charges, are as follows ($ in thousands):
Rent expense for the fiscal years ended January 2, 2016 and January 3, 2015 was $2,952 and $2,837, respectively. The Company subleases space to other tenants at various office locations under cancelable lease agreements. During the fiscal years ended January 2, 2016 and January 3, 2015 payments of approximately $165 and $246, respectively, were received under these leasing arrangements. The Company offsets these payments against its rent expense for reporting purposes. |
Note 19 - Related Party Transactions |
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Notes to Financial Statements | |||
Related Party Transactions Disclosure [Text Block] |
Richard Machon, a director of the Company, from time to time provides consulting services to the Company or for clients of the Company through Mr. Machon’s company, Machon & Associates. The Company did not pay Machon and Associates during fiscal years 2015 and 2014. |
Note 20 - Selected Quarterly Financial Information (Unaudited) |
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Quarterly Financial Information [Text Block] |
Fiscal Year Ended January 3, 2016
Fiscal Year Ended January 3, 2015
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Schedule II - Valuation and Qualifying Accounts and Reserves |
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Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | SCHEDULE II RCM TECHNOLOGIES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES Fiscal Years Ended January 2, 2016 and January 3, 2015 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Description of Business and Basis of Presentation RCM Technologies, Inc. (the “Company” or “RCM”) is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced engineering and information technology services. Additionally, the Company provides specialty health care staffing services through its Specialty Health Care Services group. RCM’s offices are primarily located in major metropolitan centers throughout North America. The consolidated financial statements are comprised of the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers its holdings of highly liquid money-market instruments and certificates of deposits to be cash equivalents if the securities mature within 90 days from the date of acquisition. These investments are carried at cost, which approximates fair value. The Company’s cash balances are maintained in accounts held by major banks and financial institutions. The majority of these balances exceed federally insured amounts. The Company held $0.1 million and $3.3 million of cash and cash equivalents in Canadian banks as of January 2, 2016 and January 3, 2015, respectively, which was held principally in Canadian dollars. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company’s carrying value of financial instruments, consisting primarily of accounts receivable, transit accounts receivable, accounts payable, transit accounts payable and accrued expenses, 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. |
Receivables, Policy [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable are primarily due from trade customers. Credit is extended based on evaluation of customers’ financial condition and, generally, collateral is not required. Accounts receivable payment terms vary and are stated in the financial statements at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables previously written off are credited to bad debt expense. |
Accrued and Unbilled Accounts Receivable and Work in Process [Policy Text Block] | Accrued and Unbilled Accounts Receivable and Work-in-Process Unbilled receivables primarily represent revenues earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-process primarily represents revenues earned under contracts which the Company is contractually precluded from invoicing until future dates as project milestones are realized. See Note 4 for further details. |
Transit Receivable and Transit Payable [Policy Text Block] | Transit Receivables and Transit Payables From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. In certain circumstances, the Company may acquire equipment as a purchasing agent for the client for a fee. Pursuant to these agreements, the Company: a) may engage subcontractors to provide construction or other services or contracts with manufacturers on behalf of the Company’s clients to procure equipment or fixtures; b) typically earns a fixed percentage of the total project value or a negotiated mark-up on subcontractor or procurement charges as a fee; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of “Overall Considerations of Reporting Revenue Gross as a Principal versus Net as an Agent” and therefore recognizing revenue on a “net-basis.” The Company records revenue on a “net” basis on relevant engineering and construction management projects, which require subcontractor/procurement costs or transit costs. In those situations, the Company charges the client a negotiated fee, which is reported as net revenue when earned. 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. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost net of accumulated depreciation and amortization and are depreciated or amortized on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. The Company’s ERP software system, installed in 1999 and upgraded in 2004, is being amortized over fifteen years. The Company’s VOIP telephone system, the installation of which was substantially complete at the end of 2008, is being depreciated over seven years. All other hardware and software as well as furniture and office equipment is depreciated or amortized over five years. Leasehold improvements are depreciated over the shorter of the estimated life of the asset or the lease term. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Intangible Assets The Company’s intangible assets have been generated through acquisitions. The Company maintains responsibility for valuing and determining the useful life of intangible assets and typically engages a third party valuation firm to assist them. As a general rule, the Company amortizes restricted covenants over four years and customer relationships over six years. However, circumstances may dictate other amortization terms as determined by the Company and assisted by their third party advisors. |
Canadian Sales Tax [Policy Text Block] | Canadian Sales Tax The Company is required to charge and collect sales tax for all Canadian clients and remits invoiced sales tax monthly to the Canadian taxing authorities whether collected or not. The Company does not collect the sales tax from its clients until they have paid their respective invoices. The Company includes uncollected Canadian sales tax invoiced to clients in its prepaid and other current assets. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the premium paid over the fair value of the net 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 in order to determine if any impairment in value has occurred. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform a two-step impairment test. An assessment of those qualitative factors or the application of the goodwill impairment test requires significant judgment including but not limited to the assessment of the business, its management and general market conditions, estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination of weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. 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 more frequently if indicators of impairment exist. The Company periodically analyzes whether any such indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a sustained, significant decline in share price and market capitalization, a decline in expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, a material change in management or other key personnel and/or slower expected growth rates, among others. Due to the thin trading of the Company stock in the public marketplace and the impact of the control premium held by a relatively few shareholders, the Company does not consider the market capitalization of the Company the most appropriate measure of fair value of goodwill for our reporting units. The Company looks to earnings/revenue multiples of similar companies recently completing acquisitions and the ability of our reporting units to generate cash flows as better measures of the fair value of our reporting units. The Company compares the fair value of each of its reporting units to their respective carrying values, including related goodwill. There can be no assurance that future tests of goodwill impairment will not result in impairment charges. The Company determined there was no impairment during the fiscal years ended January 2, 2016 and January 3, 2015. In both years, the Company determined that it was only necessary to assess qualitative factors and therefore did not perform a two-step impairment test. |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | Long-Lived and Intangible Assets 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 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. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Software In accordance with “Accounting for Costs of Computer Software Developed or Obtained for Internal Use,” certain costs related to the development or purchase of internal-use software are capitalized and amortized over the estimated useful life of the software. During the fiscal years ended January 2, 2016 and January 3, 2015, the Company capitalized approximately $2,249 and $359, respectively, for software costs. The net balance after accumulated depreciation for all software costs capitalized as of January 2, 2016 and January 3, 2015 was $2,386 and $643, respectively. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company makes judgments and interpretations based on enacted tax laws, published tax guidance, as well as estimates of future earnings. These judgments and interpretations affect the provision for income taxes, deferred tax assets and liabilities and the valuation allowance. The Company evaluated the deferred tax assets and determined on the basis of objective factors that the net assets will be realized through future years’ taxable income. In the event that actual results differ from these estimates and assessments, additional valuation allowances may be required. The Company did not have any valuation allowance as of January 2, 2016 or January 3, 2015. The Company accounts for income taxes in accordance with “Accounting for Income Taxes” which requires an asset and liability approach of accounting for income taxes. “Accounting for Income Taxes” requires assessment of the likelihood of realizing benefits associated with deferred tax assets for purposes of determining whether a valuation allowance is needed for such deferred tax assets. The Company and its wholly owned U.S. subsidiaries file a consolidated federal income tax return. The Company also files tax returns in Canada and Ireland. The Company also follows the provisions of “Accounting for Uncertainty in Income Taxes” which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. The Company’s policy is to record interest and penalty, if any, as interest expense. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company derives its revenues from several sources. The Company’s Engineering Services and Information Technology Services segments perform consulting and project solutions services. All of the Company’s segments perform staff augmentation services and derive revenue from permanent placement fees. The majority of the Company’s revenues are invoiced on a time and materials basis. Project Services The Company recognizes revenues in accordance with current revenue recognition standards under Accounting Standards Codification (“ASC”) 605, Revenue Recognition, which clarifies application of U.S. generally accepted accounting principles to revenue transactions. Project services are generally provided on a cost-plus, fixed-fee or time-and-material basis. Typically, a customer will outsource a discrete project or activity and the Company assumes responsibility for the performance of such project or activity. The Company recognizes revenues and associated costs on a gross basis as services are provided to the customer and costs are incurred using its employees. The Company, from time to time, enters into contracts requiring the completion of specific deliverables. The Company may recognize revenues on these deliverables at the time the client accepts and approves the deliverables. In instances where project services are provided on a fixed-price basis and the contract will extend beyond a 12-month period, revenue is recorded in accordance with the terms of each contract. In some instances, revenue is billed at the time certain milestones are reached, as defined in the contract. Revenues under these arrangements are recognized as the costs on these contracts are incurred. Amounts invoiced in excess of revenues recognized are recorded as deferred revenue, included in accounts payable and accrued expenses on the accompanying balance sheets. In other instances, revenue is billed and recorded based upon contractual rates per hour (i.e., percentage of completion). In addition, some contracts contain “Performance Fees” (bonuses) for completing a contract under budget. Performance Fees, if any, are recorded when earned. Some contracts also limit revenues and billings to specified maximum amounts. Provision for contract losses, if any, are made in the period such losses are determined. For contracts where there is a deliverable, the work is not complete on a specific deliverable and the revenue is not recognized, the costs are deferred. The associated costs are expensed when the related revenue is recognized. See description of revenue recognition policy for construction management and engineering services below in “transit receivables and transit payables.” Consulting and Staffing Services Revenues derived from consulting and staffing services are recorded on a gross basis as services are performed and associated costs have been incurred using employees of the Company. These services are typically billed on a time and material basis. In certain cases, the Company may utilize other companies and their employees to fulfill customer requirements. In these cases, the Company receives an administrative fee for arranging for, billing for, and collecting the billings related to these companies. The customer is typically responsible for assessing the work of these companies who have responsibility for acceptability of their personnel to the customer. Under these circumstances, the Company’s reported revenues are net of associated costs (effectively recognizing the net administrative fee only). Transit Receivables and Transit Payables From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. In certain circumstances, the Company may acquire equipment as a purchasing agent for the client for a fee. Pursuant to these agreements, the Company: a) may engage subcontractors to provide construction or other services or contracts with manufacturers on behalf of the Company’s clients to procure equipment or fixtures; b) typically earns a fixed percentage of the total project value or a negotiated mark-up on subcontractor or procurement charges as a fee; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of “Overall Considerations of Reporting Revenue Gross as a Principal versus Net as an Agent” and therefore recognizing revenue on a “net-basis.” The Company records revenue on a “net” basis on relevant engineering and construction management projects, which require subcontractor/procurement costs or transit costs. In those situations, the Company charges the client a negotiated fee, which is reported as net revenue when earned. During the fifty-two week period ended January 2, 2016, total gross billings, including both transit cost billings and the Company’s earned fees, was $65.9 million, for which the Company recognized $34.5 million of its net fee as revenue. During the fifty-three week period ended January 3, 2015, total gross billings, including both transit cost billings and the Company’s earned fees, was $72.6 million, for which the Company recognized $41.0 million of its net fee as revenue. The net fee revenue from these agreements represented 18.6% of the Company’s total revenues for the fifty-two week period ended January 2, 2016 as compared to 21 . 2% for the comparable prior year period. 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 $7.5 million and related transit accounts payable was $9.0 million, a net payable of $1.5 million, as of January 2, 2016. The transit accounts receivable was $3.8 million and related transit accounts payable was $6.7 million, a net payable of $2.9 million, as of January 3, 2015. Permanent Placement Services The Company earns permanent placement fees from providing permanent placement services. Fees for placements are recognized at the time the candidate commences employment. The Company guarantees its permanent placements on a prorated basis for 90 days. In the event a candidate is not retained for the 90-day period, the Company will provide a suitable replacement candidate. In the event a replacement candidate cannot be located, the Company will provide a prorated refund to the client. An allowance for refunds, based upon the Company’s historical experience, is recorded in the financial statements. Revenues are recorded on a gross basis. Permanent placement revenues were $3.4 million and $2.3 million for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration During the fiscal year ended January 2, 2016, no client accounted for more than 10.0% of total revenues. As of January 2, 2016 the following clients represented more than 10.0% of the Company’s accounts receivable, net: 1) New York Power Authority was 17.4% and 2) Ontario Power Group (the Company primarily serviced Ontario Power Generation as a subcontractor through Black and McDonald Limited) was 16.5% and 3) New York City Board of Education was 10.3%. As of January 2, 2016, New York Power Authority total accounts receivable balance (including transit accounts receivable of $1.0 million) was $9.8 million or 16.8% of the total of accounts receivable, net and transit accounts receivable. As of January 2, 2016, Ontario Power Group total accounts receivable balance (including transit accounts receivable of $1.1 million) was $9.5 million or 15.5% of the total accounts receivable, net and transit accounts receivable. No other customer accounted for 10% or more of the Company’s accounts receivable, net or total accounts receivable balance (including transit accounts receivable). The Company’s five, ten and twenty largest customers accounted for approximately 33.7%, 48.3% and 60.5%, respectively, of the Company’s revenues for the fiscal year ended January 2, 2016. During the fiscal year ended January 3, 2015, Ontario Power Group (the Company primarily serviced Ontario Power Generation as a subcontractor through Black and McDonald Limited) and United Technologies Corporation accounted for 21.4% and 12.9% of the Company’s revenues, respectively, and as of January 3, 2015 represented 29.4% and 3.3% of the Company’s accounts receivable, net. No other customer accounted for 10% or more of the Company’s revenues. As of January 3, 2015, New York Power Authority total accounts receivable balance (including transit accounts receivable of $1.4 million) was $8.9 million or 14.1% of the total of accounts receivable, net and transit accounts receivable. No other customer accounted for 10% or more of the Company’s accounts receivable, net. The Company’s five, ten and twenty largest customers accounted for approximately 48.1%, 61.4% and 69.8%, respectively, of the Company’s revenues for the fiscal year ended January 3, 2015. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The functional currency of the Company’s Canadian subsidiary is the local currency. Assets and liabilities are translated at period-end exchange rates. Income and expense items are translated at weighted average rates of exchange prevailing during the year. Any translation adjustments are included in the accumulated other comprehensive income account in stockholders’ equity. Transactions executed in different currencies resulting in exchange adjustments are translated at spot rates and resulting foreign exchange transaction gains and losses are included in the results of operations. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income Comprehensive income consists of net income and foreign currency translation adjustments. |
Earnings Per Share, Policy [Policy Text Block] | Per Share Data Basic net income per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated using the weighted-average number of common shares plus dilutive potential common shares outstanding during the period. Potential dilutive common shares consist of stock options and other stock-based awards under the Company’s stock compensation plans, when their impact is dilutive. Because of the Company’s capital structure, all reported earnings pertain to common shareholders and no other adjustments are necessary. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Share - Based Compensation The Company recognizes share-based compensation over the vesting period of an award based on fair value at the grant date determined using the Black-Scholes option pricing model. Certain assumptions are used to determine the fair value of stock-based payment awards on the date of grant and require subjective judgment. Because employee stock options have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing models may not provide a reliable single measure of the fair value of the employee stock options. Management assesses the assumptions and methodologies used to calculate estimated fair value of stock-based compensation when share-based awards are granted. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies and thereby materially impact our fair value determination. See Note 11 for additional share-based compensation information. Restricted stock units are recognized at their fair value. The amount of compensation cost is measured on the grant date fair value of the equity instrument issued. The compensation cost of the restricted stock units is recognized over the vesting period of the restricted stock units on a straight-line basis. 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 restricted share units that ultimately do not vest are forfeited. |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs Advertising costs are expensed as incurred. Total advertising expense was $635 and $680 for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. |
Fiscal Period, Policy [Policy Text Block] | The Company follows a 52/53 week fiscal reporting calendar ending on the Saturday closest to December 31. The fiscal year ended January 2, 2016 (fiscal 2015) was a 52-week reporting year and that ended January 3, 2015 (fiscal 2014) was a 53-week reporting year. |
Note 4 - Accounts Receivable (Tables) |
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Note 5 - Property and Equipment (Tables) |
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Note 6 - Acquisitions (Tables) |
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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 Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] |
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Note 10 - Per Share Data (Tables) |
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Unissued Shares of Common Stock [Table Text Block] |
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Note 11 - Share-based Compensation (Tables) |
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Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] |
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] |
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Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] |
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Nonvested Share Activity [Table Text Block] |
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] |
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Note 14 - Segment Information (Tables) |
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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] |
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Note 15 - Income Taxes (Tables) |
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] |
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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Note 18 - Commitments (Tables) |
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] |
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Note 20 - Selected Quarterly Financial Information (Unaudited) (Tables) |
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Schedule of Quarterly Financial Information [Table Text Block] |
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Schedule II - Valuation and Qualifying Accounts and Reserves (Tables) |
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Summary of Valuation Allowance [Table Text Block] |
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Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
Dec. 28, 2013 |
|
CANADA | |||
Cash and Cash Equivalents, at Carrying Value | $ 100,000 | $ 3,300,000 | |
ERP Software System [Member] | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
VOIP Telephone System [Member] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Restricted Covenants [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 4 years | ||
Customer Relationships [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||
Engineering [Member] | Total Revenue From Agreements [Member] | |||
Concentration Risk, Percentage | 18.60% | 21.20% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | New York Power Authority [Member] | |||
Concentration Risk, Percentage | 17.40% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Ontario Power Group [Member] | |||
Concentration Risk, Percentage | 16.50% | 29.40% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | New York City Board of Education [Member] | |||
Concentration Risk, Percentage | 10.30% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | United Technologies Corporation [Member] | |||
Concentration Risk, Percentage | 3.30% | ||
Total Accounts Receivable and Transit Accounts Receivable [Member] | Customer Concentration Risk [Member] | New York Power Authority [Member] | |||
Concentration Risk, Percentage | 16.80% | 14.10% | |
Total Accounts Receivable and Transit Accounts Receivable [Member] | Customer Concentration Risk [Member] | Ontario Power Group [Member] | |||
Concentration Risk, Percentage | 15.50% | ||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Ontario Power Group [Member] | |||
Concentration Risk, Percentage | 21.40% | ||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Five Largest Customers [Member] | |||
Concentration Risk, Percentage | 33.70% | 48.10% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Ten Largest Customers [Member] | |||
Concentration Risk, Percentage | 48.30% | 61.40% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Twenty Largest Customers [Member] | |||
Concentration Risk, Percentage | 60.50% | 69.80% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | United Technologies Corporation [Member] | |||
Concentration Risk, Percentage | 12.90% | ||
Transit Accounts Receivable [Member] | New York Power Authority [Member] | |||
Other Receivables, Net, Current | $ 1,000,000 | $ 1,400,000 | |
Transit Accounts Receivable [Member] | Ontario Power Group [Member] | |||
Other Receivables, Net, Current | 1,100,000 | ||
Transit Accounts Receivable [Member] | |||
Other Receivables, Net, Current | 7,500,000 | 3,800,000 | |
Transit Accounts Payable [Member] | |||
Accounts Payable, Other, Current | 9,000,000 | 6,700,000 | |
Accounts Payable, Net | 1,500,000 | 2,900,000 | |
New York Power Authority [Member] | |||
Accounts Receivable, Net | 9,800,000 | 8,900,000 | |
Ontario Power Group [Member] | |||
Accounts Receivable, Net | 9,500,000 | ||
Goodwill, Impairment Loss | 0 | 0 | |
Deferred Tax Assets, Valuation Allowance | 0 | 0 | |
Cash and Cash Equivalents, at Carrying Value | 985,000 | 6,411,000 | $ 9,317,000 |
Capitalized Computer Software, Additions | 2,249,000 | 359,000 | |
Capitalized Computer Software, Net | 2,386,000 | 643,000 | |
Gross Billings | 65,900,000 | 72,600,000 | |
Construction Revenue | 34,500,000 | 41,000,000 | |
Other Receivables, Net, Current | 7,481,000 | 3,797,000 | |
Accounts Payable, Other, Current | 8,995,000 | 6,658,000 | |
Sales Revenue, Services, Other | 3,400,000 | 2,300,000 | |
Advertising Expense | $ 635,000 | $ 680,000 |
Note 4 - Accounts Receivable (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Jan. 03, 2015 |
---|---|---|
Billed Revenues [Member] | ||
Accounts receivable, current | $ 40,117 | $ 47,318 |
Unbilled Revenues [Member] | ||
Accounts receivable, current | 4,939 | 4,853 |
Work In Progress [Member] | ||
Accounts receivable, current | 7,322 | 8,027 |
Allowance for sales discounts and doubtful accounts | (1,432) | (1,011) |
Accounts receivable, net | $ 50,946 | $ 59,187 |
Note 5 - Property and Equipment (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Write Off of Fully Depreciated Property and Equipment | $ 3,489 | $ 954 |
Depreciation | $ 1,386 | $ 1,107 |
Note 5 - Property and Equipment (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Jan. 03, 2015 |
---|---|---|
Equipment and Furniture [Member] | ||
Property and equipment | $ 2,358 | $ 2,585 |
Computers and Systems [Member] | ||
Property and equipment | 6,119 | 6,553 |
Leasehold Improvements [Member] | ||
Property and equipment | 752 | 781 |
Property and equipment | 9,229 | 9,919 |
Less: accumulated depreciation and amortization | 4,531 | 6,622 |
Property and equipment, net | $ 4,698 | $ 3,297 |
Note 6 - Acquisitions (Details Textual) $ in Millions |
Jan. 02, 2016
USD ($)
|
---|---|
BGA [Member] | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 1.9 |
PCI [Member] | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 1.9 |
SDS [Member] | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 1.5 |
Note 6 - Maximum Deferred Consideration Payments (Details) - BGA [Member] $ in Thousands |
Jan. 02, 2016
USD ($)
|
---|---|
January 2, 2016 | $ 822 |
December 31, 2016 | 665 |
December 30, 2017 | 313 |
Estimated future contingent consideration payments | $ 1,800 |
Note 7 - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Engineering [Member] | PCI [Member] | ||
Goodwill recorded, acquisition | $ 678 | |
Engineering [Member] | SDS [Member] | ||
Goodwill recorded, acquisition | $ 1,407 | |
Engineering [Member] | ||
Balance | 3,004 | 2,326 |
Balance | $ 4,411 | $ 3,004 |
Information Technology [Member] | PCI [Member] | ||
Goodwill recorded, acquisition | ||
Information Technology [Member] | SDS [Member] | ||
Goodwill recorded, acquisition | ||
Information Technology [Member] | ||
Balance | $ 5,516 | $ 5,516 |
Balance | $ 5,516 | $ 5,516 |
Specialty Health Care [Member] | PCI [Member] | ||
Goodwill recorded, acquisition | ||
Specialty Health Care [Member] | SDS [Member] | ||
Goodwill recorded, acquisition | ||
Specialty Health Care [Member] | ||
Balance | $ 1,703 | $ 1,703 |
Balance | 1,703 | 1,703 |
PCI [Member] | ||
Goodwill recorded, acquisition | 678 | |
SDS [Member] | ||
Goodwill recorded, acquisition | 1,407 | |
Balance | 10,223 | 9,545 |
Balance | $ 11,630 | $ 10,223 |
Note 8 - Intangible Assets (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Impairment of Intangible Assets, Finite-lived | $ 291,000 | $ 0 |
Note 8 - Components of Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Engineering [Member] | PCI [Member] | ||
Intangibles acquired, acquisition | $ 68 | |
Engineering [Member] | SDS [Member] | ||
Intangibles acquired, acquisition | $ 140 | |
Engineering [Member] | ||
Beginning balance | 189 | 179 |
Amortization of intangibles during the period | (77) | (58) |
Ending balance | $ 252 | $ 189 |
Information Technology [Member] | PCI [Member] | ||
Intangibles acquired, acquisition | ||
Information Technology [Member] | SDS [Member] | ||
Intangibles acquired, acquisition | ||
Information Technology [Member] | ||
Beginning balance | $ 5 | $ 37 |
Amortization of intangibles during the period | $ (5) | (32) |
Ending balance | 5 | |
PCI [Member] | ||
Intangibles acquired, acquisition | 68 | |
SDS [Member] | ||
Intangibles acquired, acquisition | $ 140 | |
Beginning balance | 194 | 216 |
Amortization of intangibles during the period | (82) | (90) |
Intangibles acquired, acquisition | 252 | 194 |
Ending balance | $ 252 | $ 194 |
Note 8 - Intangible Assets By Class (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Restricted Covenants [Member] | ||
Intangibles | $ 53 | $ 44 |
Customer Relationships [Member] | ||
Intangibles | 199 | 150 |
Intangibles | $ 252 | $ 194 |
Note 8 - Expected Future Amortization Expense (Details) $ in Thousands |
Jan. 02, 2016
USD ($)
|
---|---|
2016 | $ 83 |
2017 | 67 |
2018 | 52 |
2019 and thereafter | 50 |
Total | $ 252 |
Note 9 - Line of Credit (Details Textual) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
Feb. 20, 2009 |
|
Revolving Credit Facility [Member] | |||
Line of Credit Facility, Expiration Date | Dec. 11, 2019 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 35.0 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.50% | ||
Long-term Line of Credit | $ 21.0 | $ 20.0 | |
Line of Credit Facility, Remaining Borrowing Capacity | 13.2 | ||
Letter of Credit [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5.0 | ||
Letters of Credit Outstanding, Amount | $ 0.8 | $ 0.8 |
Note 10 - Per Share Data (Details Textual) - shares |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 42,500 | 40,000 |
Note 10 - Weighted Average Number of Common Shares (Details) - shares |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Basic weighted average shares outstanding (in shares) | 12,658,466 | 12,516,457 |
Dilutive effect of outstanding restricted stock units and stock options (in shares) | 242,484 | 214,108 |
Weighted average dilutive shares outstanding (in shares) | 12,900,950 | 12,730,565 |
Note 10 - Unissued Shares of Common Stock Were Reserved For The Following Purposes (Details) - shares |
Jan. 02, 2016 |
Jan. 03, 2015 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 44,500 | 53,000 |
Restricted stock units outstanding (in shares) | 208,834 | 500,000 |
Future grants of options or shares (in shares) | 382,000 | 425,000 |
Shares reserved for employee stock purchase plan (in shares) | 349,436 | 122,484 |
Total (in shares) | 984,770 | 1,100,484 |
Note 11 - Share-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
Dec. 31, 2015 |
Dec. 28, 2013 |
|
The 2007 Plan [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 25,834 | |||
The 2007 Plan [Member] | Maximum Shares Issued Pursuant to Stock-Based Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 350,000 | |||
The 2007 Plan [Member] | Maximum Shares that May be Granted to any Individual [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 | |||
The 2007 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 700,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 19,500 | |||
The 2000 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,500,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 25,000 | |||
The 2014 Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 382,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 183,000 | |||
The 2014 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 625,000 | |||
ESPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 349,436 | |||
Allocated Share-based Compensation Expense | $ 111 | $ 114 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date | 85.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | 10.00% | |||
Additional Shares of Common Stock Reserved for Future Issuance | 300,000 | |||
Common Stock, Capital Shares Reserved for Future Issuance | 1,100,000 | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 73,048 | 67,092 | ||
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options | $ 373 | $ 339 | ||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 48,000 | 200,000 | ||
Restricted Stock Units (RSUs) [Member] | Resticted Stock Units Granted in Fiscal 2014 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 60,000 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 1,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 48,000 | 200,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 208,834 | 500,000 | 300,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 334,000 | |||
Dividends Payable | $ 500 | $ 1,300 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Nonvested | $ 1,100 | |||
Common Stock [Member] | ||||
Share Price | $ 5.50 | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 73,048 | 67,092 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
Allocated Share-based Compensation Expense | $ 1,446 | $ 806 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 1,000 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 15,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 44,500 | 53,000 | 276,900 | |
Common Stock, Capital Shares Reserved for Future Issuance | 984,770 | 1,100,484 |
Note 11 - Recognition of Unvested Share-based Awards Expenses (Details) $ in Thousands |
Jan. 02, 2016
USD ($)
|
---|---|
Fiscal Year 2016 [Member] | |
Unrecognized expenses unvested share based awards | $ 638 |
Fiscal Year 2017 [Member] | |
Unrecognized expenses unvested share based awards | 362 |
Unrecognized expenses unvested share based awards | $ 1,000 |
Note 11 - Valuation of Stock Options (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Weighted average risk-free interest rate | 1.74% | 1.61% |
Expected term of option (in years) | 5 years | 5 years |
Expected stock price volatility | 35.00% | 37.00% |
Expected dividend yield | 0.00% | 0.00% |
Annual forfeiture rate | 3.23% | 2.48% |
Weighted-average grant date fair value (in dollars per share) | $ 5 | $ 2.33 |
Note 11 - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Outstanding non-vested (in shares) | 500,000 | 300,000 |
Outstanding non-vested (in dollars per share) | $ 6.61 | $ 5.72 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 48,000 | 200,000 |
Granted (in dollars per share) | $ 5 | $ 7.95 |
Vested (in shares) | (334,000) | |
Vested (in dollars per share) | $ 6.05 | |
Forfeited or expired (in shares) | (5,000) | |
Forfeited or expired (in dollars per share) | $ 7.95 | |
Outstanding non-vested (in shares) | 208,834 | 500,000 |
Outstanding non-vested (in dollars per share) | $ 7.10 | $ 6.61 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 208,834 | 300,000 |
Note 11 - Stock Option Activity (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Options outstanding (in shares) | 53,000 | 276,900 |
Options outstanding (in dollars per share) | $ 7.65 | $ 5.47 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 15,000 |
Options granted (in dollars per share) | $ 0 | $ 6.10 |
Options exercised, net (in shares) | (3,500) | (185,836) |
Options exercised, net (in dollars per share) | $ 4.30 | $ 4.84 |
Options forfeited in cashless exercises (in shares) | (42,064) | |
Options forfeited in cashless exercises (in dollars per share) | $ 4.84 | |
Options forfeited/cancelled, shares (in shares) | (5,000) | (11,000) |
Options forfeited/cancelled (in dollars per share) | $ 5.78 | $ 8.81 |
Options outstanding (in shares) | 44,500 | 53,000 |
Options outstanding (in dollars per share) | $ 8.12 | $ 7.65 |
Options exercisable (in shares) | 29,500 | 30,500 |
Options exercisable (in dollars per share) | $ 9.15 | $ 8.88 |
Intrinsic value of outstanding stock options | $ 0 | $ 33,000 |
Intrinsic value of stock options exercised in fiscal year | $ 8,000 | $ 640,000 |
Weighted average grant date fair value of stock options issued during fiscal year (in dollars per share) | $ 5 | $ 2.33 |
Note 11 - Status of Nonvested Stock Options Outstanding (Details) |
12 Months Ended |
---|---|
Jan. 02, 2016
$ / shares
shares
| |
Nonvested at January 3, 2015 (in shares) | 22,500 |
Nonvested at January 3, 2015 (in dollars per share) | $ / shares | $ 2.53 |
Vested (in shares) | (2,500) |
Vested (in dollars per share) | $ / shares | $ 2.88 |
Forfeited (in shares) | (5,000) |
Forfeited (in dollars per share) | $ / shares | $ 2.94 |
Issued nonvested (in shares) | 0 |
Nonvested at January 2, 2016 (in shares) | 15,000 |
Nonvested at January 2, 2016 (in dollars per share) | $ / shares | $ 2.33 |
Note 11 - Information About Stock Options Outstanding (Details) |
12 Months Ended |
---|---|
Jan. 02, 2016
$ / shares
shares
| |
Exercise Price Range 01 [Member] | |
Range of Exercise Prices Lower Unit (in dollars per share) | $ / shares | $ 5.27 |
Range of Exercise Prices Upper Unit (in dollars per share) | $ / shares | $ 5.62 |
Number of Outstanding Options (in shares) | 4,500 |
Number of Vested Options (in shares) | 4,500 |
Weighted-Average Remaining Contractual Life, Outstanding | 4 years 259 days |
Weighted-Average Remaining Contractual Life Vested | 4 years 259 days |
Weighted-Average Exercise Price Outstanding (in dollars per share) | $ / shares | $ 5.46 |
Weighted-Average Exercise Price Vested (in dollars per share) | $ / shares | $ 5.46 |
Exercise Price Range 02 [Member] | |
Number of Outstanding Options (in shares) | 15,000 |
Number of Vested Options (in shares) | 0 |
Weighted-Average Remaining Contractual Life, Outstanding | 8 years 135 days |
Weighted-Average Exercise Price Outstanding (in dollars per share) | $ / shares | $ 6.10 |
Exercise Price Range 03 [Member] | |
Number of Outstanding Options (in shares) | 25,000 |
Number of Vested Options (in shares) | 25,000 |
Weighted-Average Remaining Contractual Life, Outstanding | 1 year 197 days |
Weighted-Average Remaining Contractual Life Vested | 1 year 197 days |
Weighted-Average Exercise Price Outstanding (in dollars per share) | $ / shares | $ 9.81 |
Weighted-Average Exercise Price Vested (in dollars per share) | $ / shares | $ 9.81 |
Number of Outstanding Options (in shares) | 44,500 |
Number of Vested Options (in shares) | 29,500 |
Note 12 - Treasury Stock Transactions (Details Textual) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | 70 Months Ended | |||
---|---|---|---|---|---|
Jan. 02, 2016 |
Dec. 28, 2013 |
Jan. 02, 2016 |
Oct. 28, 2013 |
Feb. 28, 2010 |
|
Stock Repurchase Program 2010 [Member] | |||||
Stock Repurchase Program, Authorized Amount | $ 7.5 | ||||
Treasury Stock, Shares, Acquired | 15,450 | 1,473,306 | |||
Treasury Stock Acquired, Average Cost Per Share | $ 5.35 | $ 5.09 | |||
Treasury Stock, Value, Acquired, Cost Method | $ 7.5 | ||||
Stock Repurchase Program 2013 [Member] | |||||
Stock Repurchase Program, Authorized Amount | $ 5.0 | ||||
Treasury Stock, Shares, Acquired | 585,966 | ||||
Treasury Stock Acquired, Average Cost Per Share | $ 4.84 |
Note 14 - Results of the Segments (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 02, 2016 |
Oct. 03, 2015 |
Jul. 04, 2015 |
Apr. 04, 2015 |
Jan. 03, 2015 |
Sep. 27, 2014 |
Jun. 28, 2014 |
Mar. 29, 2014 |
Jan. 02, 2016 |
Jan. 03, 2015 |
||||
Engineering [Member] | |||||||||||||
Revenues | $ 80,713,000 | $ 99,728,000 | |||||||||||
Cost of services | 60,472,000 | 75,887,000 | |||||||||||
Gross Profit | 20,241,000 | 23,841,000 | |||||||||||
Selling, general and administrative | 15,829,000 | 16,080,000 | |||||||||||
Depreciation and amortization | 1,044,000 | 881,000 | |||||||||||
Operating Income | 3,368,000 | 6,880,000 | |||||||||||
Total assets | $ 41,689,000 | $ 43,396,000 | 41,689,000 | 43,396,000 | |||||||||
Capital expenditures | 1,238,000 | 1,194,000 | |||||||||||
Information Technology [Member] | |||||||||||||
Revenues | 58,885,000 | 59,202,000 | |||||||||||
Cost of services | 40,787,000 | 41,278,000 | |||||||||||
Gross Profit | 18,098,000 | 17,924,000 | |||||||||||
Selling, general and administrative | 14,854,000 | 14,508,000 | |||||||||||
Depreciation and amortization | 240,000 | 216,000 | |||||||||||
Operating Income | 3,004,000 | 3,200,000 | |||||||||||
Total assets | 14,011,000 | 15,244,000 | 14,011,000 | $ 15,244,000 | |||||||||
Capital expenditures | 18,000 | ||||||||||||
Specialty Health Care [Member] | |||||||||||||
Revenues | 46,138,000 | $ 34,840,000 | |||||||||||
Cost of services | 32,592,000 | 24,912,000 | |||||||||||
Gross Profit | 13,546,000 | 9,928,000 | |||||||||||
Selling, general and administrative | 11,884,000 | 9,384,000 | |||||||||||
Depreciation and amortization | 183,000 | 106,000 | |||||||||||
Operating Income | 1,479,000 | 438,000 | |||||||||||
Total assets | 18,520,000 | 17,188,000 | 18,520,000 | 17,188,000 | |||||||||
Capital expenditures | $ 73,000 | $ 112,000 | |||||||||||
Corporate Segment [Member] | |||||||||||||
Revenues | |||||||||||||
Cost of services | |||||||||||||
Gross Profit | |||||||||||||
Selling, general and administrative | |||||||||||||
Depreciation and amortization | |||||||||||||
Operating Income | |||||||||||||
Total assets | 7,116,000 | 10,905,000 | $ 7,116,000 | $ 10,905,000 | |||||||||
Capital expenditures | 1,461,000 | 785,000 | |||||||||||
Revenues | 47,407,000 | $ 45,077,000 | $ 45,286,000 | $ 47,966,000 | 49,310,000 | [1] | $ 46,382,000 | $ 49,509,000 | $ 48,569,000 | 185,736,000 | 193,770,000 | ||
Cost of services | 133,851,000 | 142,077,000 | |||||||||||
Gross Profit | 13,690,000 | 12,802,000 | 12,090,000 | 13,303,000 | 13,320,000 | [1] | 13,161,000 | 12,955,000 | 12,257,000 | 51,885,000 | 51,693,000 | ||
Selling, general and administrative | 42,567,000 | 39,972,000 | |||||||||||
Depreciation and amortization | 1,467,000 | 1,203,000 | |||||||||||
Operating Income | 2,380,000 | $ 1,906,000 | $ 1,210,000 | $ 2,355,000 | 2,622,000 | [1] | $ 2,833,000 | $ 3,025,000 | $ 2,038,000 | 7,851,000 | 10,518,000 | ||
Total assets | $ 81,336,000 | $ 87,273,000 | 81,336,000 | 87,273,000 | |||||||||
Capital expenditures | $ 2,790,000 | $ 2,091,000 | |||||||||||
|
Note 14 - Revenues by Geographic Area (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
UNITED STATES | ||
Revenue | $ 150,024 | $ 139,880 |
CANADA | ||
Revenue | 29,519 | 47,639 |
PUERTO RICO | ||
Revenue | 6,193 | 6,251 |
Revenue | $ 185,736 | $ 193,770 |
Note 14 - Total Assets by Geographic Area (Details) - USD ($) |
Jan. 02, 2016 |
Jan. 03, 2015 |
---|---|---|
UNITED STATES | ||
Total Assets | ||
Assets | $ 63,886,000 | $ 56,764,000 |
CANADA | ||
Total Assets | ||
Assets | 15,640,000 | 28,776,000 |
PUERTO RICO | ||
Total Assets | ||
Assets | 1,810,000 | 1,733,000 |
Assets | $ 81,336,000 | $ 87,273,000 |
Note 15 - Income Taxes (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | Tax Year 2011 [Member] | ||
Income Tax Examination, Year under Examination | 2011 | |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | Tax Year 2012 [Member] | ||
Income Tax Examination, Year under Examination | 2012 | |
State and Local Jurisdiction [Member] | New Jersey Division of Taxation [Member] | Earliest Tax Year [Member] | ||
Income Tax Examination, Year under Examination | 2009 | |
State and Local Jurisdiction [Member] | New Jersey Division of Taxation [Member] | Latest Tax Year [Member] | ||
Income Tax Examination, Year under Examination | 2012 | |
Income Tax Examination, Penalties and Interest Expense | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation, Percent | 15.90% | 35.70% |
Note 15 - The Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Current | ||
Federal | $ (570) | $ 309 |
State and local | 320 | 253 |
Foreign | 81 | 1,320 |
(169) | 1,882 | |
Deferred | ||
Federal | 944 | 1,455 |
State | 274 | 422 |
Foreign | 90 | 28 |
1,308 | 1,905 | |
Total | 1,139 | 3,787 |
United States | 6,642 | 5,979 |
Foreign Jurisdictions | 512 | 4,622 |
$ 7,154 | $ 10,601 |
Note 15 - Income Tax Provision Reconciliation (Details) |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Tax at statutory rate | 34.00% | 34.00% |
State income taxes, net of Federal income tax benefit | 5.40% | 4.20% |
Permanent differences | 2.20% | (0.20%) |
Foreign income tax rate | (2.10%) | |
Tax loss on sale of business unit | (26.90%) | |
Other, net | 1.20% | (0.20%) |
Total income tax expense | 15.90% | 35.70% |
Note 15 - Unrecognized Tax Benefits (Details) $ in Thousands |
Jan. 02, 2016
USD ($)
|
---|---|
Balance as of January 3, 2015 | $ 628 |
Balance as of January 2, 2016 | $ 628 |
Note 15 - Deferred Tax Assets and Liabilites (Details) - USD ($) $ in Thousands |
Jan. 02, 2016 |
Jan. 03, 2015 |
---|---|---|
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 501 | $ 358 |
Acquisition amortization, net | 352 | 1,056 |
Reserves and accruals | 393 | 301 |
Other | 128 | 511 |
Total deferred tax assets | 1,374 | 2,226 |
Deferred tax liabilities: | ||
Prepaid expense deferral | (491) | (343) |
Bonus depreciation to be reversed | (550) | (318) |
Canada deferred tax liability, net | (250) | (160) |
Total deferred tax liabilities | (1,291) | (821) |
Total deferred tax assets, net | $ 83 | $ 1,405 |
Note 16 - Contingencies (Details Textual) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Settled Litigation [Member] | ||
Loss Contingency, Damages Sought, Value | $ 6.5 | |
Loss Contingency, Damages Sought, Value | 1.9 | $ 7.6 |
Estimated Litigation Liability | $ 0.2 |
Note 17 - Retirement Plans (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Deferred Compensation Arrangement with Individual, Employer Contribution | $ 587 | $ 569 |
Note 18 - Commitments (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Operating Leases, Rent Expense | $ 2,952 | $ 2,837 |
Operating Leases, Income Statement, Sublease Revenue | $ 165 | $ 246 |
Note 18 - Minimum Future Annual Operating Lease Commitments (Details) $ in Thousands |
Jan. 02, 2016
USD ($)
|
---|---|
2016 | $ 3,105 |
2017 | 2,701 |
2018 | 2,180 |
2019 | 884 |
2020 | 431 |
Thereafter | 51 |
Total | $ 9,352 |
Note 19 - Related Party Transactions (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Machon and Associates [Member] | ||
Related Party Transaction, Amounts of Transaction | $ 0 | $ 0 |
Note 20 - Quarterly Information (Unaudited) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 02, 2016 |
Oct. 03, 2015 |
Jul. 04, 2015 |
Apr. 04, 2015 |
Jan. 03, 2015 |
[1] | Sep. 27, 2014 |
Jun. 28, 2014 |
Mar. 29, 2014 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|||
Sales | $ 47,407 | $ 45,077 | $ 45,286 | $ 47,966 | $ 49,310 | $ 46,382 | $ 49,509 | $ 48,569 | $ 185,736 | $ 193,770 | |||
Gross Profit | 13,690 | 12,802 | 12,090 | 13,303 | 13,320 | 13,161 | 12,955 | 12,257 | 51,885 | 51,693 | |||
Operating Income | 2,380 | 1,906 | 1,210 | 2,355 | 2,622 | 2,833 | 3,025 | 2,038 | 7,851 | 10,518 | |||
Net Income | $ 2,976 | $ 962 | $ 689 | $ 1,388 | $ 1,717 | $ 1,877 | $ 2,017 | $ 1,203 | $ 6,015 | $ 6,814 | |||
Diluted Income Per Share (in dollars per share) | $ 0.24 | $ 0.07 | $ 0.05 | $ 0.11 | $ 0.14 | $ 0.15 | $ 0.15 | $ 0.10 | $ 0.47 | $ 0.54 | |||
|
Valuation and Qualifying Accounts and Reserves (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Allowance for Doubtful Accounts [Member] | ||
Balance at Beginning of Period | $ 1,011,000 | $ 978,000 |
Charged to Costs and Expenses | 629,000 | 905,000 |
Deduction | (208,000) | (872,000) |
Balance at End of Period | 1,432,000 | 1,011,000 |
Legal Reserve [Member] | ||
Balance at Beginning of Period | 0 | 188,000 |
Charged to Costs and Expenses | 214,000 | 100,000 |
Deduction | 0 | (288,000) |
Balance at End of Period | $ 214,000 | $ 0 |
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