UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
|
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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Trading Symbol
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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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RCMT
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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 [X]
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Smaller Reporting Company [X]
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Emerging Growth Company [ ]
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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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14
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Item 1B.
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Unresolved Staff Comments
|
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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21
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Item 4.
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Mine Safety Disclosures
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21
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PART II
|
22
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||
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
22
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Item 6.
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Selected Financial Data
|
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
|
43
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Item 8.
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Financial Statements and Supplementary Data
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43
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
43
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Item 9A.
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Controls and Procedures
|
44
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Item 9B.
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Other Information
|
45
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PART III
|
46
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||
Item 10.
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Directors, Executive Officers and Corporate Governance
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46
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Item 11.
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Executive Compensation
|
46
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
46
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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46
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Item 14.
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Principal Accountant Fees and Services
|
46
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PART IV
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47
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||
Item 15.
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Exhibits and Financial Statement Schedules
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47
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Item 16.
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Form 10-K Summary
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49
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Signatures
|
50
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PART I
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ITEM 1. BUSINESS
|
•
|
The Engineering segment provides a comprehensive portfolio of engineering and design services across three verticals: (1) Energy Services, (2) Process & Industrial and (3) Aerospace.
The segment also offers a complementary suite of services to augment its engineering portfolio, including design and supply of high-quality engineered process solutions and equipment, technical writing and digital documentation across
marine, locomotive, transportation and aerospace markets, and engineering, procurement and construction management (“EPC”), as well as demand side management/energy conservation services.
|
•
|
The Specialty Health Care segment provides staffing solutions of health care professionals, primarily health information management professionals, nurses, paraprofessionals, physicians and
various therapists. The segment also provides Teletherapy services targeting the education sector with an emphasis on behavioral health.
|
•
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The Information Technology, or IT, segment provides enterprise business solutions, application services, infrastructure solutions, life sciences solutions and other vertical-specific offerings.
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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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Energy Services: Provides solutions to the utility industry, including power generation and transmission and distribution. The group also
specializes in projects in the nuclear industry, with experience that encompasses multi-disciplined engineering and design services as well as providing technical support during design, construction and plant operational phases. The Company
believes that the deregulation of the utilities industry and the aging of nuclear power plants offer the Company an opportunity to capture a greater share of professional services and project management requirements of the utilities
industry. Electric utilities have prioritized transitioning their power generation assets to cleaner sources of energy. This expansion requires large-scale investment in the nation’s transmission infrastructure to interconnect these
renewable resources to the energy grid.
|
•
|
Aerospace Services: Provides engineering and technical services to the aerospace & defense industry. According to the Congressional Budget
Office (“CBO”), the Department of Defense plans to spend over $1 trillion in procurement-related aviation expenditures over the next three decades. Given RCM’s customer account relationships with several of the largest defense prime
contractors, the Company believes there is ample opportunity for engineering services and technical publication work, including production and procurement engineering services as well as the need for sustainment and development program
publication services.
|
•
|
Process and Industrial Services: Provides engineering services to the industrial, chemical, commercial and oil and gas industries in the United States, Europe and
Canada. As the world’s industrial output rebounds from 2020’s pandemic-related weakness, the Company believes it is positioned well to take advantage. With many companies in the chemical industry reprioritizing spending towards
decarbonization technologies, many US chemical companies are expected to place an emphasis on renewable feedstocks and new carbon recycling technologies. The Company believes its process engineering services can play a vital role across
this multibillion-dollar opportunity.
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ITEM 1. BUSINESS (CONTINUED)
|
•
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Allied and Therapy Staffing: Specializes in recruiting outstanding professionals across the health care industry. Our allied health care
professionals and therapists work in schools, health systems, hospitals, nursing homes, and rehabilitation facilities.
|
•
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Correctional Healthcare Staffing: Staffing services for local, state and federal correctional facilities and provide screening, onboarding, and
employee assessments as well as employee and inmate vaccination and treatment services.
|
•
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Health Information Management: Provide healthcare organizations with experienced medical coding professionals that manage staffing shortages,
backlogs, vacation coverage and long-term coding support.
|
•
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Nursing Services: Provides nurse placement and staffing services in healthcare facilities, schools, hospitals and correctional facilities.
|
•
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Physicians and Advanced Practice: Our national locum tenens (temporary practitioner) practice specializes in placing physicians, physician
assistants and nurse practitioners.
|
•
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School Services: Provides full-time and part-time nurse employment services for school districts across the country. The Company also offers other
health care professionals to perform school evaluations and treat students, including occupational and physical therapists, speech and language pathologists, as well as special education support services and registered behavioral
technicians to support students’ individualized education plan and behavioral health needs.
|
•
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Telepractice: RCM’s teletherapy solution is an evidence-based service delivery option for students to receive Special Education services such as Speech-Language
Therapy, Occupational Therapy, Physical Therapy, Behavioral and Mental Health services and other healthcare services through an online platform.
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ITEM 1. BUSINESS (CONTINUED)
|
•
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Life Sciences: Specializes in providing innovative options to pharmaceutical, medical device and biotechnology companies in need of guidance,
support or remediation of quality, compliance or business challenges. The group assists in staffing, solution planning and remediation needs in the areas of automation, compliance, data analytics, technical quality assurance and management,
and validation and verification.
|
•
|
IT Services & Solutions: Global provider of business and technology solutions designed to improve the operational performance of our clients.
Specialties include software development, infrastructure services, and managed IT solutions. The Company has a 40-year history of providing qualified IT candidates to customers in a timely and cost-effective manner to address their
specific business needs. The Company offers scalable solutions that can provide emerging growth companies with a single qualified resource or an entire project team along with RCM’s project management oversight to Fortune 100 clients.
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ITEM 1. BUSINESS (CONTINUED)
|
NUMBER OF
OFFICES
|
SERVICES
PROVIDED(1)
|
||
UNITED STATES
|
|||
California
|
2
|
HC
|
|
Connecticut
|
1
|
E
|
|
Florida
|
1
|
HC
|
|
Hawaii
|
1
|
HC
|
|
Illinois
|
1
|
HC
|
|
Maryland
|
1
|
IT
|
|
Massachusetts
|
1
|
IT
|
|
New Jersey
|
3
|
E, IT
|
|
New York
|
4
|
E, HC, IT
|
|
Pennsylvania
|
1
|
E
|
|
Rhode Island
|
1
|
E
|
|
Tennessee
|
1
|
HC
|
|
18
|
|||
CANADA
|
4
|
E, IT
|
|
PUERTO RICO
|
1
|
E, IT
|
|
SERBIA
|
3
|
E, IT
|
ITEM 1. BUSINESS (CONTINUED)
|
Engineering Services
|
Health Care Services
|
Life Sciences & IT Services
|
Al-Corn Clean Fuel
American Electric Power
Bruce Power
Con Edison
Covanta
Eversource Energy
Exelon
First Energy
Hamilton Sundstrand
HICO America
Lockheed Martin
Ontario Power Generation
Pratt and Whitney
Praxair
Sikorsky Aircraft
United Technologies Corporation
Verizon
WE Energies
|
AMN Healthcare
Aya Healthcare
Chicago Public Schools
Cross Country
Hawaii Department of Education
New York City Board of Education
Right Sourcing
San Bernardino County
Thera Dynamic Physical Therapy
|
ADP
Amgen
Bayada
Bimbo Bakeries
Bruckner Supply Company
FlightSafety International
Ginkgo Bioworks
Johnson and Johnson
Kronos
Lily del Caribe
Patheon
Pfizer
Regeneron Pharmaceuticals
Triverus Consulting
United Health Group
Western Alliance Bank
|
ITEM 1. BUSINESS (CONTINUED)
|
ITEM 1. BUSINESS (CONTINUED)
|
ITEM 1. BUSINESS (CONTINUED)
|
ITEM 1A. RISK FACTORS
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ITEM 1A. RISK FACTORS (CONTINUED)
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ITEM 1A. RISK FACTORS (CONTINUED)
|
ITEM 1A. RISK FACTORS (CONTINUED)
|
ITEM 1A. RISK FACTORS (CONTINUED)
|
ITEM 1A. RISK FACTORS (CONTINUED)
|
ITEM 1B. UNRESOLVED STAFF COMMENTS
|
ITEM 2. PROPERTIES
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ITEM 3. LEGAL PROCEEDINGS
|
ITEM 4. MINE SAFETY DISCLOSURES
|
PART II
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
|
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6. SELECTED FINANCIAL DATA
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
January 2,
2021
|
December 28,
2019
|
||
Engineering:
|
|||
Time and Material
|
$43,359
|
$55,195
|
|
Fixed Fee
|
14,145
|
12,678
|
|
Permanent Placement Services
|
211
|
-
|
|
Total Engineering
|
$57,715
|
$67,873
|
|
Specialty Health Care:
|
|||
Time and Material
|
$59,692
|
$88,057
|
|
Permanent Placement Services
|
789
|
1,291
|
|
Total Specialty Health Care
|
$60,481
|
$89,348
|
|
Information Technology:
|
|||
Time and Material
|
$31,723
|
$33,384
|
|
Permanent Placement Services
|
490
|
495
|
|
Total Information Technology
|
$32,213
|
$33,879
|
|
$150,409
|
$191,100
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
Fiscal Years Ended
|
||||||||
January 2, 2021
|
December 28, 2019
|
|||||||
Amount
|
% of Revenue
|
Amount
|
% of Revenue
|
|||||
Revenues
|
$150,409
|
100.0
|
$191,100
|
100.0
|
||||
Cost of services
|
111,554
|
74.2
|
142,508
|
74.6
|
||||
Gross profit
|
38,855
|
25.8
|
48,592
|
25.4
|
||||
Selling, general and administrative
|
37,551
|
25.0
|
40,390
|
21.1
|
||||
Depreciation and amortization of property and
equipment
|
1,065
|
0.7
|
1,261
|
0.7
|
||||
Amortization of acquired intangible assets
|
321
|
0.2
|
327
|
0.2
|
||||
Write-off of receivables and professional fees
incurred related to arbitration
|
8,397
|
5.6
|
-
|
-
|
||||
Impairment of right of use assets and related costs
|
2,231
|
1.5
|
-
|
-
|
||||
Tax credit professional fees
|
240
|
0.1
|
47
|
0.0
|
||||
Operating costs and expenses
|
49,805
|
33.1
|
42,025
|
22.0
|
||||
Operating (loss) income
|
(10,950
|
)
|
(7.3
|
)
|
6,567
|
3.4
|
||
Other expense, net
|
(1,107
|
)
|
(0.7
|
)
|
(1,745
|
)
|
(0.9
|
)
|
(Loss) income before income taxes
|
(12,057
|
)
|
(8.0
|
)
|
4,822
|
2.5
|
||
Income tax (benefit) expense
|
(3,188
|
)
|
(2.1
|
)
|
764
|
0.4
|
||
Net (loss) income
|
($8,869
|
)
|
(5.9
|
)
|
$4,058
|
2.1
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
Fifty-Three Week
Period Ended
January 2, 2021
|
Fifty-Two Week
Period Ended
December 28, 2019
|
|||
GAAP net (loss) income
|
($8,869
|
)
|
$4,058
|
|
Income tax (benefit) expense
|
(3,188
|
)
|
764
|
|
Interest expense
|
778
|
1,695
|
||
Change in fair value of contingent consideration
|
145
|
61
|
||
Depreciation of property and equipment
|
1,065
|
1,261
|
||
Amortization of acquired intangible assets
|
321
|
327
|
||
EBITDA (non-GAAP)
|
($9,748
|
)
|
$8,166
|
|
Adjustments
|
||||
Write-off of receivables and professional fees
incurred related to arbitration
|
8,397
|
-
|
||
Impairment of right of use assets and related costs
|
2,231
|
-
|
||
Tax credit professional fees
|
240
|
47
|
||
Gain (loss) on foreign currency transactions
|
184
|
(11
|
)
|
|
Adjusted EBITDA (non-GAAP)
|
$1,304
|
$8,202
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
Fiscal Years Ended
|
|||||
January 2,
2021
|
December 28,
2019
|
||||
Cash (used in) provided by:
|
|||||
Operating activities
|
$25,203
|
($4,778
|
)
|
||
Investing activities
|
($419
|
)
|
($363
|
)
|
|
Financing activities
|
($25,632
|
)
|
$6,627
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
|
Fiscal Year Ending
|
Operating
Leases
|
Finance
Leases
|
||
2021
|
2,019
|
255
|
||
2022
|
1,505
|
109
|
||
2023
|
955
|
-
|
||
2024
|
232
|
-
|
||
2025
|
48
|
-
|
||
Thereafter
|
-
|
-
|
||
Total lease payments
|
4,759
|
364
|
||
Less: imputed interest
|
(232
|
)
|
(11
|
)
|
Total
|
$4,527
|
$353
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
Fiscal Year Ending
|
Total
|
January 1, 2022
|
500
|
December 31, 2022
|
2,358
|
Estimated future contingent consideration payments
|
$2,858
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS OF OPERATIONS (CONTINUED)
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
|
FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
PART III
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
AND RELATED STOCKHOLDER MATTERS
|
Plan category
|
Number of securities to be potentially issued upon realization of restricted stock awards
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for issuance under equity compensation plans, excluding securities reflected in column (a)
|
(a)
|
(b)
|
(c)
|
|
709,805(1)
|
N/A
|
520,929
|
|
Equity compensation plans not approved by security holders
|
____________________
|
____________________
|
____________________
|
Total
|
709,805(1)
|
N/A
|
520,929
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
|
INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
PART IV
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
1. and 2. Financial Statement Schedules -- See “Index to Financial Statements and Schedules” on F-1.
|
||
3. See Item (b) below.
|
|||
(b)
|
Exhibits
|
||
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, filed with the Securities and Exchange
Commission on January 4, 1995.
|
|||
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.
|
|||
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.
|
|||
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”).
|
|||
Certificate of Designation of Series A-3 Junior Participating Preferred Stock of RCM Technologies, Inc.; 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 May 22, 2020 (the “May 2020 8-K”).
|
|||
(4)(a) |
Description of Capital Stock. (Filed herewith)
|
||
Rights Agreement, dated as of May 22, 2020, by and between RCM Technologies, Inc. and American Stock Transfer & Trust Company, LLC, as rights agent; incorporated by reference to Exhibit 4.1 to the May 2020
8-K.
|
|||
*
|
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.
|
||
*
|
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.
|
||
*
|
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.
|
||
*
|
Amendment No. 1 to Executive Severance Agreement between RCM Technologies, Inc. and Kevin Miller dated December 26, 2017; incorporated by reference to Exhibit 10(x) to the Registrant’s Annual Report on Form
10-K for this fiscal year ended December 28, 2019, filed with the Securities and Exchange Commission on March 8, 2018.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
|
(b)
|
Exhibits (Continued)
|
||
*
|
RCM Technologies, Inc. Amended and Restated 2014 Omnibus Equity Compensation Plan (as amended through December 17, 2020); incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on
Form S-8 filed with the Securities and Exchange Commission on December 18, 2020.
|
||
*
|
Form of Stock Unit Agreement; incorporated by reference to Exhibit 99.2 to the December 2014 8-K.
|
||
*
|
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).
|
||
*
|
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.
|
||
*
|
Amendment 2018-4 to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan; incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 18, 2018.
|
||
*
|
Executive Severance Agreement, dated as of June 1, 2018, by and between the Company and Bradley S. Vizi; 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 June 7, 2018.
|
||
Third Amended & Restated Loan and Security Agreement, dated as of August 9, 2018, 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 10(d) to the Registrant’s Quarterly Report on Form 10-Q for this fiscal quarter ended June 30, 2018, filed
with the Securities and Exchange Commission on August 14, 2018.
|
|||
First Amendment to Third Amended and Restated Loan Agreement, dated as of August 9, 2018, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as
successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 99 to the Registrant’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on October 22, 2019.
|
|||
Amendment No. 2 to Third Amended and Restated Loan Agreement, dated as of June 2, 2020, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as
successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on June 2, 2020.
|
|||
Amendment No. 3 to Third Amended and Restated Loan Agreement, dated as of September 29, 2020, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as
successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on October 1, 2020.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
|
(b)
|
Exhibits (Continued)
|
||
Subsidiaries of the Registrant. (Filed herewith)
|
|||
Consent of Macias, Gini & O’Connell, LLP. (Filed herewith)
|
|||
Certifications of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. (Filed herewith)
|
|||
Certifications of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. (Filed herewith)
|
|||
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)
|
|||
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
|
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.
|
||
+
|
The Registrant will furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
SIGNATURES
|
RCM Technologies, Inc.
|
|||
By:
|
/s/ Bradley S. Vizi
|
||
Bradley S. Vizi
|
|||
Executive Chairman and President
|
|||
Date: April 2, 2021
|
By:
|
/s/ Kevin D. Miller
|
|
Kevin D. Miller
|
|||
Chief Financial Officer, Treasurer and Secretary
|
Date: April 2, 2021
|
By:
|
/s/ Bradley S. Vizi
|
|
Bradley S. Vizi
|
|||
Executive Chairman and President
|
|||
Date: April 2, 2021
|
By:
|
/s/ Kevin D. Miller
|
|
Kevin D. Miller
|
|||
Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
|
|||
Date: April 2, 2021
|
By:
|
/s/ Roger H. Ballou
|
|
Roger H. Ballou
|
|||
Director
|
|||
Date: April 2, 2021
|
By:
|
/s/ Richard A. Genovese
|
|
Richard A. Genovese
|
|||
Director
|
|||
Date: April 2, 2021
|
By:
|
/s/ Swarna Kakodkar
|
|
Swarna Kakodkar
|
|||
Director
|
|||
Date: April 2, 2021
|
By:
|
/s/ Jayanth S. Komarneni
|
|
Jayanth S. Komarneni
|
|||
Director
|
RCM TECHNOLOGIES, INC.
|
FORM 10-K
|
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
|
Page
|
|
Consolidated Balance Sheets, January 2, 2021 and December 28, 2019
|
F-2
|
Consolidated Statements of Operations, Fiscal Years Ended January 2, 2021 and
December 28, 2019
|
F-3
|
Consolidated Statements of Comprehensive (Loss) Income, Fiscal Years Ended
January 2, 2021 and December 28, 2019
|
F-4
|
Consolidated Statements of Changes in Stockholders’ Equity, Fiscal Years Ended
January 2, 2021 and December 28, 2019
|
F-5
|
Consolidated Statements of Cash Flows, Fiscal Years Ended January 2, 2021 and
December 28, 2019
|
F-6
|
Notes to Consolidated Financial Statements
|
F-7
|
Report of Independent Registered Public Accounting Firm
|
F-41
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 2, 2021 and December 28, 2019
(Amounts in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
|
December 28,
|
|||||
2021
|
2019
|
|||||
Current assets:
|
||||||
Cash and cash equivalents
|
$734
|
$1,847
|
||||
Accounts receivable, net
|
36,007
|
59,760
|
||||
Transit accounts receivable
|
2,494
|
4,906
|
||||
Prepaid expenses and other current assets
|
4,699
|
4,144
|
||||
Total current assets
|
43,934
|
70,657
|
||||
Property and equipment, net
|
2,078
|
2,717
|
||||
Other assets:
|
||||||
Deposits
|
169
|
209
|
||||
Deferred tax assets, net, domestic
|
3,300
|
-
|
||||
Goodwill
|
16,354
|
16,354
|
||||
Operating right of use asset
|
2,409
|
5,820
|
||||
Intangible assets, net
|
95
|
416
|
||||
Total other assets
|
22,327
|
22,799
|
||||
Total assets
|
$68,339
|
$96,173
|
Current liabilities:
|
|||||||
Accounts payable and accrued expenses
|
$7,895
|
$6,220
|
|||||
Transit accounts payable
|
4,900
|
4,552
|
|||||
Accrued payroll and related costs
|
12,877
|
7,713
|
|||||
Finance lease payable
|
247
|
315
|
|||||
Income taxes payable
|
436
|
130
|
|||||
Operating right of use liability
|
1,886
|
2,134
|
|||||
Liability for contingent consideration from acquisitions
|
500
|
344
|
|||||
Total current liabilities
|
28,741
|
21,408
|
|||||
Deferred tax liability, foreign
|
365
|
382
|
|||||
Deferred tax liability, net, domestic
|
-
|
395
|
|||||
Finance lease payable
|
106
|
189
|
|||||
Liability for contingent consideration from acquisitions
|
2,358
|
2,714
|
|||||
Operating right of use liability, net of current position
|
2,641
|
3,921
|
|||||
Borrowings under line of credit
|
11,890
|
34,761
|
|||||
Total liabilities
|
46,101
|
63,770
|
|||||
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;
|
|||||||
16,224,191 shares issued and 11,542,880 shares outstanding at
January 2, 2021 and 15,826,891 shares issued and 13,003,719 shares outstanding at December 28, 2019
|
811
|
791
|
|||||
Stock subscription receivable
|
(420
|
)
|
-
|
||||
Additional paid-in capital
|
109,588
|
108,452
|
|||||
Accumulated other comprehensive loss
|
(2,550)
|
(2,748
|
)
|
||||
Accumulated deficit
|
(67,974
|
)
|
(59,105
|
)
|
|||
Treasury stock (4,681,311 shares at January 2, 2021 and
2,823,172 at December 28, 2019) at cost
|
(17,217
|
)
|
(14,987
|
)
|
|||
Stockholders’ equity
|
22,238
|
32,403
|
|||||
Total liabilities and stockholders’ equity
|
$68,339
|
$96,173
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except per share amounts, unless otherwise indicated)
|
January 2,
2021
|
December 28,
2019
|
||||
Revenues
|
$150,409
|
$191,100
|
|||
Cost of services
|
111,554
|
142,508
|
|||
Gross profit
|
38,855
|
48,592
|
|||
Operating costs and expenses
|
|||||
Selling, general and administrative
|
37,551
|
40,390
|
|||
Depreciation and amortization of property and equipment
|
1,065
|
1,261
|
|||
Amortization of acquired intangible assets
|
321
|
327
|
|||
Write-off of receivables and professional fees
incurred related to arbitration
|
8,397
|
-
|
|||
Impairment of right of use assets and related costs
|
2,231
|
-
|
|||
Tax credit professional fees
|
240
|
47
|
|||
Operating costs and expenses
|
49,805
|
42,025
|
|||
Operating (loss) income
|
(10,950
|
)
|
6,567
|
||
Other (expense) income
|
|||||
Interest expense and other, net
|
(778
|
)
|
(1,695
|
)
|
|
Change in fair value of contingent consideration
|
(145
|
)
|
(61
|
)
|
|
(Loss) gain on foreign currency transactions
|
(184
|
)
|
11
|
||
Other expense, net
|
(1,107
|
)
|
(1,745
|
)
|
|
(Loss) income before income taxes
|
(12,057
|
)
|
4,822
|
||
Income tax (benefit) expense
|
(3,188
|
)
|
764
|
||
Net (loss) income
|
($8,869
|
)
|
$4,058
|
||
Basic and diluted net (loss) income per share
|
($0.73
|
)
|
$0.31
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands unless otherwise indicated)
|
January 2,
|
December 28,
|
|||
2021
|
2019
|
|||
Net (loss) income
|
($8,869
|
)
|
$4,058
|
|
Other comprehensive income
|
198
|
7
|
||
Total comprehensive (loss) income
|
($8,671
|
)
|
$4,065
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Amounts in thousands, except share amounts, unless otherwise indicated)
|
Common Stock
|
Stock
Subscription
Receivable
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Loss
|
Accumulated
Deficit
|
Treasury Stock
|
Total
|
||||||||||||
Issued
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||
Balance, December 29, 2018
|
15,578,345
|
$778
|
-
|
$107,326
|
($2,755
|
)
|
($63,163
|
)
|
2,823,172
|
($14,987
|
)
|
$27,199
|
||||||
Issuance of stock under
employee stock purchase plan
|
118,526
|
6
|
-
|
315
|
-
|
-
|
-
|
-
|
321
|
|||||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
7
|
-
|
-
|
-
|
7
|
|||||||||
Issuance of stock upon vesting
of restricted share awards
|
130,020
|
7
|
-
|
(7
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||
Share based compensation expense
|
-
|
-
|
-
|
806
|
-
|
-
|
-
|
-
|
806
|
|||||||||
Accrued dividends forfeited
|
-
|
-
|
-
|
12
|
-
|
-
|
-
|
-
|
12
|
|||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
$4,058
|
-
|
-
|
|
$4,058
|
||||||||
Balance, December 28, 2019
|
15,826,891
|
$791
|
-
|
$108,452
|
($2,748
|
)
|
($59,105
|
)
|
2,823,172
|
($14,987
|
)
|
$32,403
|
||||||
-
|
||||||||||||||||||
Issuance of stock under
employee stock purchase plan
|
117,983
|
6
|
-
|
202
|
-
|
-
|
-
|
-
|
208
|
|||||||||
Stock subscription receivable
|
-
|
-
|
(420
|
)
|
420
|
-
|
-
|
-
|
-
|
-
|
||||||||
Translation adjustment
|
-
|
-
|
-
|
-
|
198
|
-
|
-
|
-
|
198
|
|||||||||
Issuance of stock upon vesting
of restricted share awards
|
279,317
|
14
|
-
|
(14
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||
Equity compensation expense from
awards issued
|
-
|
-
|
-
|
528
|
-
|
-
|
-
|
-
|
528
|
|||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
-
|
1,858,139
|
(2,230
|
)
|
(2,230
|
)
|
|||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(8,869
|
)
|
-
|
-
|
(8,869
|
)
|
|||||||
Balance, January 2, 2021
|
16,224,191
|
$811
|
($420
|
)
|
$109,588
|
($2,550
|
)
|
($67,974
|
)
|
4,681,311
|
($17,217
|
)
|
$22,238
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands unless otherwise indicated)
|
January 2,
2021
|
December 28,
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net (loss) income
|
($8,869
|
)
|
$4,058
|
|||||
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
|
||||||||
Depreciation and amortization
|
1,386
|
1,588
|
||||||
Change in fair value of contingent consideration
|
145
|
61
|
||||||
Impairment of right of use assets and related costs
|
2,231
|
-
|
||||||
Equity compensation expense
|
1,108
|
806
|
||||||
Provision for losses on accounts receivable
|
7,911
|
322
|
||||||
Deferred income tax (benefit) expense
|
(3,712
|
)
|
1,104
|
|||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
15,947
|
(7,626
|
)
|
|||||
Prepaid expenses and other current assets
|
(162
|
)
|
(645
|
)
|
||||
Net of transit accounts receivable and payable
|
2,757
|
(293
|
)
|
|||||
Accounts payable and accrued expenses
|
1,639
|
(3,085
|
)
|
|||||
Accrued payroll and related costs
|
4,557
|
(1,342
|
)
|
|||||
Right of use assets
|
1,490
|
(5,820
|
)
|
|||||
Right of use liabilities
|
(1,529
|
)
|
6,056
|
|||||
Income taxes payable
|
304
|
38
|
||||||
Total adjustments
|
34,072
|
(8,836
|
)
|
|||||
Net cash provided by (used in) operating activities
|
25,203
|
(4,778
|
)
|
|||||
Cash flows from investing activities:
|
||||||||
Property and equipment acquired
|
(460
|
)
|
(367
|
)
|
||||
Decrease in deposits
|
41
|
4
|
||||||
Net cash used in investing activities
|
(419
|
)
|
(363
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings under line of credit
|
73,238
|
95,554
|
||||||
Repayments under line of credit
|
(96,109
|
)
|
(88,332
|
)
|
||||
Issuance of stock for employee stock purchase plan
|
208
|
321
|
||||||
Changes in finance lease obligations
|
(394
|
)
|
(318
|
)
|
||||
Contingent consideration paid
|
(345
|
)
|
(598
|
)
|
||||
Payment of note payable for treasury stock
|
(2,230
|
)
|
-
|
|||||
Net cash (used in) provided by financing activities
|
(25,632
|
)
|
6,627
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
(265
|
)
|
(121
|
)
|
||||
(Decrease) increase in cash and cash equivalents
|
(1,113
|
)
|
1,365
|
|||||
Cash and cash equivalents at beginning of period
|
1,847
|
482
|
||||||
Cash and cash equivalents at end of period
|
$734
|
$1,847
|
||||||
Supplemental cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$1,026
|
$1,657
|
||||||
Income taxes
|
$264
|
$290
|
||||||
Non-cash financing activities:
|
||||||||
Equity awards issued
|
$492
|
$436
|
||||||
Dividend forfeited on unvested restricted share awards
|
$ -
|
$ 12
|
||||||
Software purchase under finance leases
|
$258
|
$126
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
2021
|
December 28,
2019
|
||
Engineering:
|
|||
Time and Material
|
$43,359
|
$55,195
|
|
Fixed Fee
|
14,145
|
12,678
|
|
Permanent Placement Services
|
211
|
-
|
|
Total Engineering
|
$57,715
|
$67,873
|
|
Specialty Health Care:
|
|||
Time and Material
|
$59,692
|
$88,057
|
|
Permanent Placement Services
|
789
|
1,291
|
|
Total Specialty Health Care
|
$60,481
|
$89,348
|
|
Information Technology:
|
|||
Time and Material
|
$31,723
|
$33,384
|
|
Permanent Placement Services
|
490
|
495
|
|
Total Information Technology
|
$32,213
|
$33,879
|
|
$150,409
|
$191,100
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
3.
|
USE OF ESTIMATES AND UNCERTAINTIES
|
4. |
ACCOUNTS RECEIVABLE, TRANSIT ACCOUNTS RECEIVABLE AND TRANSIT ACCOUNTS PAYABLE
|
January 2,
2021
|
December 28,
2019
|
|||
Billed
|
$25,926
|
$29,214
|
||
Accrued and unbilled
|
8,219
|
13,824
|
||
Work-in-progress
|
3,612
|
4,352
|
||
Accounts receivable subject to arbitration
|
-
|
14,095
|
||
Allowance for sales discounts and doubtful accounts
|
(1,750
|
)
|
(1,725
|
)
|
Accounts receivable, net
|
$36,007
|
$59,760
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
4. |
ACCOUNTS RECEIVABLE, TRANSIT ACCOUNTS RECEIVABLE AND TRANSIT ACCOUNTS PAYABLE (CONTINUED)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
2021
|
December 28,
2019
|
|||
Equipment and furniture
|
$264
|
$319
|
||
Computers and systems
|
4,686
|
5,628
|
||
Leasehold improvements
|
236
|
308
|
||
5,185
|
6,255
|
|||
Less: accumulated depreciation and amortization
|
3,107
|
3,538
|
||
Property and equipment, net
|
$2,078
|
$2,717
|
Fiscal Year Ending
|
Total
|
January 1, 2022
|
500
|
December 31, 2022
|
2,358
|
Estimated future contingent consideration payments
|
$2,858
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Balance as of December 29, 2018
|
$4,773
|
||
Contingent payments made
|
(598
|
)
|
|
Increase to contingent payment estimates
|
(1,178
|
)
|
|
Changes in fair value of contingent payments
|
61
|
||
Balance as of December 28, 2019
|
$3,058
|
||
Contingent payments made
|
(345
|
)
|
|
Changes in fair value of contingent consideration
|
145
|
||
Balance as of January 2, 2021
|
$2,858
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Total
|
||||||
Balance as of December 29, 2018
|
$13,096
|
$2,398
|
$2,038
|
$17,532
|
|||||
Adjustment to final TKE purchase price
|
(1,178
|
)
|
-
|
-
|
(1,178
|
)
|
|||
Balance as of December 28, 2019
|
$11,918
|
$2,398
|
$2,038
|
$16,354
|
|||||
No change in fiscal 2020
|
-
|
-
|
-
|
-
|
|||||
Balance as of January 2, 2021
|
$11,918
|
$2,398
|
$2,038
|
$16,354
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
2021
|
December 28,
2019
|
||
Restricted covenants
|
$12
|
$28
|
|
Customer relationships
|
83
|
388
|
|
Total intangible assets
|
$95
|
$416
|
9. |
LINE OF CREDIT
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
9. |
LINE OF CREDIT (CONTINUED)
|
Fiscal Years Ended
|
|||
January 2,
2021
|
December 28,
2019
|
||
Basic weighted average shares outstanding
|
12,152,042
|
12,913,912
|
|
Dilutive effect of outstanding restricted share awards
|
-
|
58,241
|
|
Weighted average dilutive shares outstanding
|
12,152,042
|
12,972,153
|
January 2,
2021
|
December 28,
2019
|
||
Time-based restricted stock awards outstanding
|
459,805
|
151,725
|
|
Unvested subscription restricted share awards
|
250,000
|
-
|
|
Performance-based restricted stock awards outstanding
|
-
|
240,000
|
|
Future grants of options or shares
|
520,929
|
268,326
|
|
Shares reserved for employee stock purchase plan
|
149,894
|
267,877
|
|
Total
|
1,380,628
|
927,928
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Number of
Time-Based
Restricted
Stock Awards
|
Weighted
Average
Grant Date Fair
Value per Share
|
||
Outstanding non-vested at December 28, 2019
|
151,725
|
$3.64
|
|
Granted
|
719,805
|
$1.88
|
|
Vested
|
(139,225
|
)
|
$3.61
|
Forfeited or expired
|
(22,500
|
)
|
$1.55
|
Outstanding non-vested at January 2, 2021
|
709,805
|
$1.92
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Number of
Performance-
Based
Restricted
Stock Awards
|
Weighted
Average
Grant Date Fair
Value per Share
|
||
Outstanding non-vested at December 28, 2019
|
240,000
|
$4.81
|
|
Granted
|
-
|
-
|
|
Vested
|
(40,000
|
)
|
$4.38
|
Forfeited or expired
|
(200,000
|
)
|
$4.89
|
Outstanding non-vested at January 2, 2021
|
-
|
-
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Number of
Restricted
Stock Awards
|
Weighted Average
Grant Date Fair
Value per Share
|
|||
Outstanding non-vested at December 29, 2018
|
347,372
|
$4.74
|
||
Granted – time-based vesting
|
99,225
|
$3.02
|
||
Granted – performance-based vesting
|
167,148
|
$4.35
|
||
Vested
|
(130,020
|
)
|
$3.91
|
|
Forfeited or expired
|
(92,000
|
)
|
$4.98
|
|
Outstanding non-vested at December 28, 2019
|
391,725
|
$4.36
|
||
Granted – time-based vesting
|
719,805
|
$1.88
|
||
Granted – performance-based vesting
|
-
|
-
|
||
Vested
|
(179,225
|
)
|
$3.78
|
|
Forfeited or expired
|
(222,500
|
)
|
$4.55
|
|
Outstanding non-vested at January 2, 2021
|
709,805
|
$1.92
|
12. |
TREASURY STOCK TRANSACTIONS
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
13. |
NEW ACCOUNTING STANDARDS
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year Ended
January 2, 2021
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Corporate
|
Total
|
|||||
Revenue
|
$57,715
|
$60,481
|
$32,213
|
$ -
|
$150,409
|
|||||
Cost of services
|
41,227
|
47,116
|
23,211
|
-
|
111,554
|
|||||
Gross profit
|
16,488
|
13,365
|
9,002
|
-
|
38,855
|
|||||
Selling, general and administrative
|
12,931
|
15,504
|
9,116
|
-
|
37,551
|
|||||
Depreciation and amortization of
property and equipment
|
638
|
319
|
108
|
-
|
1,065
|
|||||
Amortization of acquired intangible assets
|
321
|
-
|
-
|
-
|
321
|
|||||
Write-off of receivables and
professional fees incurred
related to arbitration
|
8,397
|
-
|
-
|
-
|
8,397
|
|||||
Impairment of right of use assets and
related costs
|
-
|
-
|
-
|
2,231
|
2,231
|
|||||
Tax credit professional fees
|
-
|
-
|
-
|
240
|
240
|
|||||
Operating income (loss)
|
($5,799
|
)
|
($2,458
|
)
|
($222
|
)
|
($2,471
|
)
|
($10,950
|
)
|
Total assets as of January 2, 2021
|
$33,782
|
$19,141
|
$7,498
|
$7,918
|
$68,339
|
|||||
Capital expenditures
|
$26
|
$36
|
$48
|
$350
|
$460
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year Ended
December 28, 2019
|
Engineering
|
Specialty Health Care
|
Information
Technology
|
Corporate
|
Total
|
|||||
Revenue
|
$67,873
|
$89,348
|
$33,879
|
$ -
|
$191,100
|
|||||
Cost of services
|
49,395
|
68,464
|
24,649
|
-
|
142,508
|
|||||
Gross profit
|
18,478
|
20,884
|
9,230
|
-
|
48,592
|
|||||
Selling, general and administrative
|
13,648
|
17,643
|
9,099
|
-
|
40,390
|
|||||
Depreciation and amortization of
property and equipment
|
841
|
336
|
84
|
-
|
1,261
|
|||||
Amortization of acquired intangible assets
|
327
|
-
|
-
|
-
|
327
|
|||||
Tax credit professional fees
|
-
|
-
|
-
|
47
|
47
|
|||||
Operating income (loss)
|
$3,662
|
$2,905
|
$47
|
($47
|
)
|
$6,567
|
||||
Total assets as of December 28, 2019
|
$52,342
|
$29,781
|
$8,178
|
$5,872
|
$96,173
|
|||||
Capital expenditures
|
$82
|
$121
|
$69
|
$95
|
$367
|
Fiscal Year Ended
|
|||||
January 2,
|
December 28,
|
||||
2021
|
2019
|
||||
Revenues
|
|||||
United States
|
$126,238
|
$166,750
|
|||
Canada
|
15,310
|
16,822
|
|||
Puerto Rico
|
5,702
|
4,942
|
|||
Serbia
|
3,159
|
2,586
|
|||
$150,409
|
$191,100
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year Ended
|
|||||
January 2,
|
December 28,
|
||||
2021
|
2019
|
||||
Total Assets
|
|||||
United States
|
$56,308
|
$82,110
|
|||
Canada
|
7,067
|
9,638
|
|||
Puerto Rico
|
1,483
|
1,103
|
|||
Serbia
|
3,481
|
3,322
|
|||
$68,339
|
$96,173
|
January 2,
2021
|
December 28,
2019
|
|||
Federal statutory rate
|
21.0
|
%
|
21.0
|
%
|
Tax expense on taxable (loss)
income at federal statutory rate
|
($2,532
|
)
|
$1,013
|
|
State and Puerto Rico income taxes,
net of Federal income tax benefit
|
(535
|
)
|
305
|
|
Prior year United States R&D tax credits in current year
|
-
|
(668
|
)
|
|
Permanent differences
|
154
|
77
|
||
Foreign income tax rates
|
(21
|
)
|
(101
|
)
|
Adjustments to NOL and repatriation taxes
|
(53
|
)
|
154
|
|
Other
|
(201
|
)
|
(16
|
)
|
Total income tax expense
|
($3,188
|
)
|
$764
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Years Ended
|
|||||
January 2,
2021
|
December 28,
2019
|
||||
Current
|
|||||
Federal
|
($32
|
)
|
($688
|
)
|
|
State and local
|
174
|
181
|
|||
Foreign
|
382
|
166
|
|||
524
|
(341
|
)
|
|||
Deferred
|
|||||
Federal
|
(2,844
|
)
|
892
|
||
State
|
(851
|
)
|
229
|
||
Foreign
|
(17
|
)
|
(16
|
)
|
|
(3,755
|
)
|
1,105
|
|||
Total
|
($3,188
|
)
|
$764
|
Fiscal Years Ended
|
||||
January 2,
2021
|
December 28,
2019
|
|||
United States
|
($13,898
|
)
|
$3,626
|
|
Foreign jurisdictions
|
1,841
|
1,196
|
||
($12,057
|
)
|
$4,822
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
January 2,
2021
|
December 28,
2019
|
|||
Deferred tax assets:
|
||||
Allowance for doubtful accounts
|
$455
|
$432
|
||
Federal and state net operating loss carryforward
|
2,634
|
330
|
||
Reserves and accruals
|
1,491
|
255
|
||
Other
|
318
|
185
|
||
Total deferred tax assets
|
4,898
|
1,202
|
||
Deferred tax liabilities:
|
||||
Acquisition amortization, net
|
(716
|
)
|
(569
|
)
|
Prepaid expense deferral
|
(602
|
)
|
(701
|
)
|
Bonus depreciation to be reversed
|
(280
|
)
|
(327
|
)
|
Canada deferred tax liability, net
|
(365
|
)
|
(382
|
)
|
Total deferred tax liabilities
|
(1,963
|
)
|
(1,979
|
)
|
Total deferred tax assets (liabilities), net
|
$2,935
|
($777
|
)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(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, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fifty-Three Week
Period Ended
January 2, 2021
|
Fifty-Two Week
Period Ended
December 28, 2019
|
|||
Operating lease cost
|
$2,524
|
$2,314
|
||
Amortization of right of use assets
|
$366
|
$305
|
||
Interest on lease liabilities
|
10
|
8
|
||
Total finance lease cost
|
$376
|
$313
|
Fifty-Three Week
Period Ended
January 2, 2021
|
Fifty-Two Week
Period Ended
December 28, 2019
|
|||
Cash paid for amounts included in the
measurement of lease liabilities
|
||||
Operating cash flows from operating leases
|
$2,589
|
$2,290
|
||
Operating cash flows from finance leases
|
$7
|
$8
|
||
Financing cash flows from finance leases
|
$402
|
$310
|
||
Right of use assets obtained in exchange for lease obligations
|
||||
Operating leases
|
$1,257
|
$7,894
|
||
Finance leases
|
$258
|
$126
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fifty-Three Week
Period Ended
January 2, 2021
|
Fifty-Two Week
Period Ended
December 28, 2019
|
||||
Operating leases
|
|
||||
Operating lease right of use assets
|
$2,409
|
$5,820
|
|||
Operating right of use liability - current
|
($1,886
|
) |
($2,134
|
)
|
|
Operating right of use liability - non-current
|
(2,641
|
) |
(3,921
|
)
|
|
Total operating lease liabilities
|
($4,527
|
) |
($6,055
|
)
|
|
Finance leases
|
|||||
Property and equipment - (right of use assets)
|
$1,140
|
$985
|
|||
Accumulated depreciation
|
(746
|
)
|
(475
|
)
|
|
Property and equipment, net
|
$394
|
$510
|
|||
Other current liabilities
|
($247
|
)
|
($315
|
)
|
|
Other long term liabilities
|
(106
|
)
|
(189
|
)
|
|
Total finance lease liabilities
|
($353
|
)
|
($504
|
)
|
|
Weighted average remaining lease term
|
|||||
Operating leases
|
2.03 Years
|
2.54 Years
|
|||
Finance leases
|
1.45 Years
|
1.62 Years
|
|||
Weighted average discount rate
|
|||||
Operating leases
|
4.06
|
%
|
4.11
|
%
|
|
Finance leases
|
2.63
|
%
|
1.78
|
%
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
Fiscal Year Ending
|
Operating Leases
|
Finance
Leases
|
||
2021
|
2,019
|
255
|
||
2022
|
1,505
|
109
|
||
2023
|
955
|
-
|
||
2024
|
232
|
-
|
||
2025
|
48
|
-
|
||
Thereafter
|
-
|
-
|
||
Total lease payments
|
4,759
|
364
|
||
Less: imputed interest
|
(232
|
)
|
(11
|
)
|
Total
|
$4,527
|
$353
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years Ended January 2, 2021 and December 28, 2019
(Dollars in thousands, except share and per share amounts, unless otherwise indicated)
|
RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts, unless otherwise indicated)
|
Date: April 2, 2021
|
/s/
|
Bradley S. Vizi
|
Bradley S. Vizi
Executive Chairman and President
|
Date: April 2, 2021
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
|
/s/
|
Bradley S. Vizi
|
Bradley S. Vizi
Executive Chairman and President
April 2, 2021
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
April 2, 2021
|
•
|
the director breaches his fiduciary duty to our Company or our stockholders and this breach involves
intentional misconduct, fraud or a knowing violation of law; or
|
•
|
our Company makes an unlawful payment of a dividend or unlawful stock purchases, redemptions or other
distributions.
|
•
|
stockholders to nominate candidates for election as a director; and
|
•
|
stockholders to propose topics for consideration at stockholders’ meetings.
|
EXHIBIT 21
|
EXHIBIT 23.1
|
EXHIBIT 31.1
|
Date: April 2, 2021
|
/s/
|
Bradley S. Vizi
|
Bradley S. Vizi
Executive Chairman and President
|
EXHIBIT 31.2
|
Date: April 2, 2021
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
|
EXHIBIT 32.1
|
/s/
|
Bradley S. Vizi
|
Bradley S. Vizi
Executive Chairman and President
April 2, 2021
|
EXHIBIT 32.2
|
/s/
|
Kevin D. Miller
|
Kevin D. Miller
Chief Financial Officer, Treasurer and Secretary
April 2, 2021
|
Document And Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Apr. 01, 2021 |
Jun. 27, 2020 |
|
Document Information [Line Items] | |||
Entity Registrant Name | RCM TECHNOLOGIES, INC. | ||
Entity Central Index Key | 0000700841 | ||
Trading Symbol | rcmt | ||
Current Fiscal Year End Date | --01-02 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding (in shares) | 11,485,310 | ||
Entity Public Float | $ 9.6 | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 02, 2021 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Title of 12(b) Security | Common Stock, par value $0.05 per share |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Preferred stock par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, 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) | 16,224,191 | 15,826,891 |
Common stock, outstanding (in shares) | 11,542,880 | 13,003,719 |
Treasury stock, shares (in shares) | 4,681,311 | 2,823,172 |
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Net (loss) income | $ (8,869) | $ 4,058 |
Other comprehensive income | 198 | 7 |
Total comprehensive (loss) income | $ (8,671) | $ 4,065 |
Note 1 - Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 02, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 may exceed federally insured amounts. The Company held $42 and $56 of cash and cash equivalents in Canadian banks as of January 2, 2021 and December 28, 2019, respectively, which was held principally in Canadian dollars. The Company held $246 and $129 of cash and cash equivalents in Serbian banks as of January 2, 2021 and December 28, 2019, respectively, which was held in various currencies. 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 and the line of credit's variable interest rate. 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. Pursuant to these agreements, the Company a) may engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of FASB ASC 606 “Revenue from Contracts with Customers” 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 is typically obligated to pay the subcontractor or staffing agency whether or not the client pays the Company. 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 and are depreciated on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. The annual rates are 20% for computer hardware and software as well as furniture and office equipment. Leasehold improvements are amortized over the shorter of the estimated life of the asset or the lease term.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. 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 is not amortized but is subject to periodic testing for impairment in accordance with FASB ASC 350 “Intangibles - Goodwill and Other. ” The Company tests goodwill for impairment on an annual basis as of the last day of the Company's fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has three reporting units. The Company uses a market-based approach to determine the fair value of the reporting units. This approach uses earnings/revenue multiples of similar companies recently completing acquisitions and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units. The Company adopted Accounting Standards Update (“ASU”) 2017 -04, “Intangibles - Goodwill and Other (Topic 350 ): Simplifying the Test for Goodwill Impairment” effective December 28, 2019 which has eliminated Step 2 from the goodwill impairment test. Under this update, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.The Company did not January 2, 2021 and December 28, 2019. There can be no assurance that future indicators of impairment and tests of goodwill impairment will not result in an impairment charge.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 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.Software In accordance with FASB ASC 350 -40 “Accounting for Internal Use Software,” 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, 2021 and December 28, 2019, the Company capitalized $305 and $139, respectively, for software costs. The net balance after accumulated depreciation for all software costs capitalized as of January 2, 2021 and December 28, 2019 was $1,389 and $1,726, 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 January 2, 2021 or December 28, 2019. The Company accounts for income taxes in accordance with FASB ACS 740 “Income Taxes” (FASB ASC 740 ) which requires an asset and liability approach of accounting for income taxes. FASB ASC 740 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. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The Company measures its deferred tax assets and liabilities using the tax rates that the Company believes will apply in the years in which the temporary differences are expected to be recovered or paid. The Company and its wholly owned United States subsidiaries file a consolidated federal income tax return. The Company also files tax returns in Canada, Puerto Rico and Serbia.The Company also follows the provisions of FASB ASC 740 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 records revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers . Revenue is recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate service streams that we provide to our customers.We evaluate our revenue contracts with customers based on the five -step model under ASC 606: (1 ) Identify the contract with the customer; (2 ) Identify the performance obligations in the contract; (3 ) Determine the transaction price; (4 ) Allocate the transaction price to separate performance obligations; and (5 ) Recognize revenue when (or as) each performance obligation is satisfied.The Company derives its revenue from several sources. The Company's Engineering Services and Information Technology Services segments perform consulting and project solution services. The Healthcare segment specializes in long-term and short-term staffing and placement services to hospitals, schools and long-term care facilities amongst others. All of the Company's segments perform staff augmentation services and derive revenue from permanent placement fees. The majority of the Company's revenue is invoiced on a time and materials basis. The following table presents our revenues disaggregated by revenue source for the fifty-three week period ended January 2, 2021 and the fifty-two week period December 28, 2019:
Time and Material The Company's IT and Healthcare segments predominantly recognize revenue through time and material work while its Engineering segment recognizes revenue through both time and material and fixed fee work. The Company's time and material contracts are typically based on the number of hours worked at contractually agreed upon rates, therefore revenue associated with these time and materials contracts are recognized based on hours worked at contracted rates. Fixed fee From time to time and predominantly in our Engineering segment, the Company will enter into contracts requiring the completion of specific deliverables. The Company has master services agreements with many of its customers that broadly define terms and conditions. Actual services performed under fixed fee arrangements are typically delivered under purchase orders that more specifically define terms and conditions related to that fixed fee project. While these master services agreements can often span several years, the Company's fixed fee purchase orders are typically performed over six to nine month periods. In instances where project services are provided on a fixed-price basis, revenue is recorded in accordance with the terms of each contract. In certain instances, revenue is invoiced at the time certain milestones are reached, as defined in the contract. Revenue under these arrangements are recognized as the costs on these contracts are incurred. On an infrequent basis, amounts paid in excess of revenue earned and recognized are recorded as deferred revenue, included in accounts payable and accrued expenses on the accompanying condensed balance sheets. In other instances, revenue is billed and recorded based upon contractual rates per hour. Additionally, some contracts contain “Performance Fees” (bonuses) for completing a contract under budget. Performance Fees, if any, are recorded when earned. Some contracts also limit revenue and billings to specified maximum amounts. Provisions for contract losses, if any, are made in the period such losses are determined. For contracts where there is a specific deliverable and the work is not complete and the revenue is not recognized, the costs incurred are deferred as a prepaid asset. The associated costs are expensed when the related revenue is recognized.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. Permanent placement revenue was $1.5 million for the fiscal year ended January 2, 2021 and $1.8 million for the fiscal year ended December 28, 2019. The deferred revenue balance as of both January 2, 2021 and December 28, 2019 was $0.4 may be recognized over a period exceeding one year from the time it was recorded on the balance sheet, although this is an infrequent occurrence. For the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019, the Company recognized revenue of $0.4 million and $0.2 million, respectively, that was included in deferred revenue at the beginning of the reporting period.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. Pursuant to these agreements, the Company a) may engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. Under the terms of the agreements, the Company is typically not required to pay the subcontractor until after the corresponding payment from the Company's end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically does not pay a given transit account payable until the related transit account receivable is collected. The Company is typically obligated to pay the subcontractor or staffing agency whether or not the client pays the Company. 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 $2.5 million and related transit accounts payable was $4.9 million, for a net payable of $2.4 million, as of January 2, 2021. The transit accounts receivable was $4.9 million and related transit accounts payable was $4.6 million, for a net receivable of $0.3 million, as of December 28, 2019. Concentration During the fiscal year ended January 2, 2021, New York City Board of Education represented 10.6% of the Company's revenues. No other client accounted for 10% or more of total revenues during the year. As of January 2, 2021, the following clients represented more than 10.0% of the Company's accounts receivable, net: New York City Board of Education was 11.8% and Hawaii Department of Education was 10.6%. 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 33.4%, 46.6% and 60.7%, respectively, of the Company's revenues for the fiscal year ended January 2, 2021. During the fiscal year ended December 28, 2019, New York City Board of Education and Hawaii Department of Education represented 17.6% and 11.1% of the Company's revenues, respectively. No other client accounted for 10% or more of total revenues during the year. As of December 28, 2019, the following clients represented more than 10.0% of the Company's accounts receivable, net: New York Power Authority was 24.6%, New York City Board of Education was 17.6% and Hawaii Department of Education was 12.7%. As of December 28, 2019, New York Power Authority total accounts receivable balance (including transit accounts receivable) was 27.3% 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 or total accounts receivable balance (including transit accounts receivable). The Company's five , ten and twenty largest customers accounted for approximately 43.5%, 57.0% and 69.2%, respectively, of the Company's revenues for the fiscal year ended December 28, 2019. Foreign Currency Translation The functional currency of the Company's Canadian and Serbian subsidiaries 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 share awards 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 share awards is recognized over the vesting period of the restricted share awards on a straight-line basis. Restricted share awards 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 awards that ultimately do not vest are forfeited.Advertising Costs Advertising costs are expensed as incurred. Total advertising expense was $800 and $855 for the fiscal years ended January 2, 2021 and December 28, 2019, respectively.Fair Value Measurements The Company values its financial assets and liabilities based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy was established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in inactive markets; or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data.Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Reclassification Certain prior year amounts have been reclassified to conform with the current year presentation. These classifications had no effect on the previously reported results of operations. |
Note 2 - Fiscal Year |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 | |||
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, 2021 ( fiscal 2020 ) was a 53 -week reporting year. The fiscal year ended December 28, 2019 ( fiscal 2019 ) was a 52 -week reporting year. |
Note 3 - Use of Estimates and Uncertainties |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 | |||
Notes to Financial Statements | |||
Basis of Presentation and Significant Accounting Policies [Text Block] |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue 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 estimates are based upon various factors including current and historical trends, as well as other pertinent industry and regulatory authority information, including the potential future effects of COVID- 19. Management regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes.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 and the line of credit's variable interest rate. 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.The Company re-measures the fair value of the contingent consideration at each reporting period and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings in the accompanying consolidated statement of operations. |
Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 02, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 revenue earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-progress primarily represents revenue earned under contracts which the Company contractually invoices at future dates. From time to time, the Company's Engineering segment enters into agreements to provide, among other things, construction management and engineering services. Pursuant to these agreements, the Company a) may engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. Under the terms of the agreements, the Company is typically not required to pay the subcontractor until after the corresponding payment from the Company's end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically does not pay a given transit account payable until the related transit account receivable is collected. The Company is typically obligated to pay the subcontractor or staffing agency whether or not the client pays the Company. 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 $2.5 million and related transit accounts payable was $4.9 million, for a net payable of $2.4 million, as of January 2, 2021. The transit accounts receivable was $4.9 million and related transit accounts payable was $4.6 million, for a net receivable of $0.3 million, as of December 28, 2019. The Company had a dispute with a customer that is a major utility in the United States. Both parties agreed in fiscal 2017 to resolve this dispute through binding arbitration. Arbitration hearings with this customer started in fiscal 2018. Essentially, the customer did not pay the balance of accounts receivable the Company believes were owed for certain disputed projects. As of December 28, 2019, the total amount of recorded receivables from this customer on these disputed projects was $14.1 million. Additionally, as part of the arbitration process, the customer asserted counter-claims of $10.3 million. The arbitrator rendered a decision in this dispute in April 2020, awarding the Company $7.4 million, and the arbitration award was paid during the fifty-three week period ended January 2, 2021. The counter-claims asserted against the Company of $10.3 million were denied in their entirety. For the fifty-three week period ended January 2, 2021, the Company recorded a charge of $8.4 million, including $6.7 million constituting the portion of the accounts receivable relating to the disputed projects that was not awarded by the arbitrator, $0.7 million from other projects with this customer that were not part of the arbitration, $0.8 million in professional fees related to the dispute and arbitration, and $0.2 million of transit accounts receivable associated with disputed projects that were part of the arbitration. The Company decided to write off the $0.7 million of accounts receivable from other projects not part of the arbitration for business reasons. |
Note 5 - Property and Equipment |
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Property, Plant and Equipment Disclosure [Text Block] |
Property and equipment are stated at cost and are depreciated on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. The annual rates are 20% for computer hardware and software as well as furniture and office equipment. Leasehold improvements are amortized over the shorter of the estimated life of the asset or the lease term.Property and equipment are comprised of the following:
The Company periodically writes off fully depreciated and amortized assets. The Company wrote off fully depreciated and amortized assets of $1,529 and $2,781 during the fiscal years ended January 2, 2021 and December 28, 2019, respectively. For the fiscal years ended January 2, 2021 and December 28, 2019, depreciation and amortization expense for property and equipment was $1,065 and $1,261, respectively. |
Note 6 - Acquisitions |
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Business Combination Disclosure [Text Block] |
The purchase method of accounting in accordance with FASB ASC 805, “Business Combination,” was applied for all acquisitions. This requires the cost of an acquisition to be allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition with the excess cost accounted for as goodwill. Goodwill arising from the acquisitions is attributable to expected sales synergies from combining the operations of the acquired business with those of the Company.Future Contingent Payments As of January 2, 2021, the Company had two active acquisition agreements whereby additional contingent consideration may be earned by the former shareholders: 1 ) effective October 1, 2017, the Company acquired all of the stock of PSR Engineering Solutions d.o.o. Beograd (Voždovac) (“PSR”) and 2 ) effective September 30, 2018, the Company acquired certain assets of Thermal Kinetics Engineering, PLLC and Thermal Kinetics Systems, LLC (together, “TKE”). The Company estimates future contingent payments at January 2, 2021 as follows:
Estimates of future contingent payments are subject to significant judgment and actual payments may materially differ from estimates. Potential future contingent payments to be made to all active acquisitions after January 2, 2021 are capped at a cumulative maximum of $3.1 million. The Company estimates future contingent consideration payments based on forecasted performance and recorded the fair value of those expected payments as of January 2, 2021. During the fifty-three week period ended January 2, 2021, the Company measured contingent consideration at fair value on a non-recurring basis. Contingent consideration related to acquisitions are recorded at fair value level 3 due to the lack of observable market inputs. Changes in fair value are recorded in other (expense) income, net.For acquisitions that involve contingent consideration, the Company records a liability equal to the fair value of the estimated contingent consideration obligation as of the acquisition date. The Company determines the acquisition date fair value of the contingent consideration based on the likelihood of paying the additional consideration. The fair value is estimated using projected future operating results and the corresponding future earn-out payments that can be earned upon the achievement of specified operating objectives and financial results by acquired companies using Level 3 inputs and the amounts are then discounted to present value. These liabilities are measured quarterly at fair value, and any change in the fair value of the contingent consideration liability is recognized in the consolidated statements of comprehensive (loss) income. During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the consolidated statements of comprehensive (loss) income.The Company paid contingent consideration of $0.3 million and $0.6 million during the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019, respectively.The changes in the liability for contingent consideration from acquisitions for the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019 are as follows:
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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 tests goodwill for impairment on an annual basis as of the last day of the Company's fiscal year or more frequently if events occur or circumstances change indicating that the fair value of goodwill may be below the carrying amount. During the fifty-three week period ended January 2, 2021, the Company reviewed the carrying value of goodwill due to the events and circumstances surrounding the COVID-19 pandemic. While COVID-19 has negatively impacted the Company, and the Company expects this negative impact to continue at least through the first half of fiscal 2021 and likely beyond, the Company did not conclude in such review that this negative impact is permanent. The Company has determined that no other indicators of impairment of goodwill existed during the fifty-three week period ended January 2, 2021 and fifty-two week period ended December 28, 2019. As such, no fifty-three week period ended January 2, 2021 or the fifty-two week period ended December 28, 2019 was recorded as a result of such review.The changes in the carrying amount of goodwill for the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019 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. During the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019, the Company reviewed the carrying value of its intangible assets due to the events and circumstances surrounding the COVID-19 pandemic. While COVID-19 has negatively impacted the Company, and the Company expects this negative impact to continue at least through the first half of fiscal 2021 and likely beyond, the Company does not believe at this time that this negative impact is permanent. As such, no fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019 was recorded as a result of such review.All of the Company's intangible assets are associated with the Engineering segment. Intangible assets other than goodwill are amortized over their useful lives. Intangible assets are carried at cost, less accumulated amortization. Details of intangible assets by class at January 2, 2021 and December 28, 2019:
Amortization of acquired intangible assets for the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019 was $321 and $327, respectively. The remaining intangible asset balance will be amortized during fiscal 2021. |
Note 9 - Line of Credit |
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Debt Disclosure [Text Block] |
The Company and its subsidiaries amended and restated its Revolving Credit Facility with Citizens Bank of Pennsylvania on October 18, 2019. As amended and restated, the Revolving Credit Facility provides for a $45.0 million revolving credit facility, has no sub-limit for letters of credit, and expires on August 8, 2023. On September 29, 2020, the Company entered into an amendment to its Revolving Credit Facility. The amendment (i) modifies certain aspects of the financial covenants under the Loan Agreement, including the manner in which the measurement periods for certain components of the financial covenants are determined, (ii) modifies the required compliance levels for certain ratios under the Loan Agreement, and (iii) permitted the repayment of $2.2 million of indebtedness to a third party incurred in connection with the previously disclosed June 2020 repurchase of stock.Borrowings under the Revolving Credit Facility bear interest at one of two alternative rates, as selected by the Company at each incremental borrowing. These alternatives are: (i) LIBOR (London Interbank Offered Rate), plus applicable margin, typically borrowed in fixed 30 -day increments or (ii) the agent bank's prime rate generally borrowed over shorter durations. The Company also pays unused line fees based on the amount of the Revolving Credit Facility that is not drawn. Unused line fees are recorded as interest expense. The effective weighted average interest rate, including unused line fees, for the fifty-three week period ended January 2, 2021 and fifty-two week period ended December 28, 2019 were 2.7% and 4.4%, respectively.All borrowings under the Revolving Credit Facility are collateralized by all of the assets of the Company and its subsidiaries and a pledge of the stock of its subsidiaries. The Revolving Credit Facility also contains various financial and non-financial covenants, such as a covenant that restricts on the Company's ability to borrow in order to pay dividends. As of January 2, 2021, the Company was in compliance with all covenants contained in the Revolving Credit Facility (as amended).Borrowings under the line of credit as of January 2, 2021 and December 28, 2019 were $11.9 million and $34.8 million, respectively. At January 2, 2021 and December 28, 2019 there were letters of credit outstanding for $1.9 million and $1.6 million, respectively. At January 2, 2021, the Company had availability for additional borrowings under the Revolving Credit Facility of $31.2 million.Impact to Line of Credit from COVID- 19 The Company is negatively impacted by COVID- 19 as more fully described in Footnote 19 as well as the Segment Discussion, and Liquidity and Capital Resources sections in Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company believes that its current line of credit is adequate to provide the necessary liquidity while COVID-19 impacts its operations. While the Company does expect to be in compliance with its financial covenants in the line of credit for the foreseeable future, the Company can give no assurance that the line of credit will be available to the Company. |
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 (loss) per share for the fiscal years ended January 2, 2021 and December 28, 2019 was determined as follows:
Because the year ended January 2, 2021 recorded a net loss, the otherwise dilutive effect of 46,873 outstanding restricted share awards has not been included in the weighted average diluted shares outstanding. For the years ended January 2, 2021 and December 28, 2019, there were no not included in the calculation of common stock equivalents.Unissued shares of common stock were reserved for the following purposes:
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Note 11 - Share Based Compensation |
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Share-based Payment Arrangement [Text Block] |
At January 2, 2021, the Company had two 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 typically vest over periods ranging from one to three years and expire within 10 years of issuance. The Company may also issue immediately vested equity awards. Share-based compensation expense related to time-based awards is amortized in accordance with applicable vesting periods using the straight-line method. The Company expenses performance-based awards only when the performance metrics are likely to be achieved and the associated awards are therefore likely to vest. Performance-based share awards that are likely to vest are also expensed on a straight-line basis over the vesting period but may vest on a retroactive basis or be reversed, depending on when it is determined that they are likely to vest, or in the case of a reversal when they are later determined to be unlikely to vest.Share-based compensation expense of $1,109 and $806 was recognized for the fiscal years ended January 2, 2021 and December 28, 2019, respectively. Fiscal year ended January 2, 2021 did not include any expense associated with performance-based awards. Share based compensation for the fiscal year ended December 28, 2019 included estimated expense of $228 for performance-based awards. As of January 2, 2021, there were no performance-based restricted stock awards outstanding.As of January 2, 2021, the Company had $1.1 million of total unrecognized compensation cost related to all time-based non-vested share-based awards outstanding. The Company expects to recognize this expense over approximately two years. These amounts do not include a) the cost of any additional share-based awards granted in future periods or b) the impact of any potential changes in the Company's forfeiture rate. 2014 Omnibus Equity Compensation Plan (the 2014 Plan)The 2014 Plan, approved by the Company's shareholders in December 2014, initially provided for the issuance of up to 625,000 shares of the Company's common stock to officers, non-employee directors, employees of the Company and its subsidiaries, or consultants and advisors utilized by the Company. In fiscal 2016 and fiscal 2020, the Company amended and restated the 2014 Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance under the Plan by an additional 500,000 and 850,000 shares, respectively, so that the total number of shares of stock reserved for issuance under the Plan is 1,975,000 shares. The expiration date of the Plan is December 17, 2030, unless the 2014 Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders. The Compensation Committee of the Board of Directors determines the vesting period at the time of grant. As of January 2, 2021, under the 2014 Plan, 709,805 time-based shares were outstanding, there were no performance-based restricted share awards outstanding and 520,929 shares were available for awards thereunder.The market value of equity grants for the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019 was $1.5 million and $1.1 million respectively.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, subject to maximum purchases in any one fiscal year of 3,000 shares.In fiscal 2015, the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Plan by an additional 300,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,100,000 shares and to extend the expiration date of the Plan to December 31, 2025. In fiscal 2018, the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Plan by an additional 300,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,400,000 shares.The Company has two offering periods in the Purchase Plan coinciding with the Company's first two fiscal quarters and the last two fiscal quarters. Actual shares are issued on the first business day of the subsequent offering period for the prior offering period payroll deductions. During the fiscal years ended January 2, 2021 and December 28, 2019, there were 117,983 and 118,526 shares issued under the Purchase Plan for net proceeds of $208 and $321, respectively. As of January 2, 2021, there were 149,894 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, 2021 and December 28, 2019 was $44 and $91, respectively.Time-Based Restricted Stock Awards / Stock Subscription Receivable From time-to-time the Company issues time-based restricted stock awards. These time-based restricted stock awards 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 award fully vests. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheet. As of January 2, 2021, there were no accrued dividends. Dividends for time-based restricted stock awards that ultimately do not vest are forfeited.The following summarizes the activity in the time-based restricted stock awards under the 2014 Plan during the fifty-three week period ended January 2, 2021:
Based on the closing price of the Company's common stock of $2.07 per share on December 31, 2020 ( the last trading day prior to January 2, 2021), the intrinsic value of the time-based non-vested restricted stock awards at January 2, 2021 was approximately $1.5 million. As of January 2, 2021, there was approximately $1.1 million of total unrecognized compensation cost related to time-based restricted stock awards, which is expected to be recognized over the vesting period of the restricted stock awards.Time-Based Restricted Stock Awards / Stock Subscription Receivable (Continued) In December 2020, the Company granted senior management a one -time restricted stock award of 250,000 shares in exchange for a stock subscription receivable. The shares will be acquired by senior management through repayment of the stock subscription receivable over twelve months beginning in January 2021 and ending in December 2021. During fiscal 2020, the Company awarded 100,092 immediately vested share awards at an average price of $1.33. Performance-Based Restricted Stock Awards From time-to-time the Company issues performance-based restricted stock awards to its executives. Performance-based restricted stock awards are typically vested based on certain multi-year performance metrics as determined by the Board of Directors Compensation Committee. These performance-based restricted stock awards typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period on any stock awards that actually vest, if any. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheet. As of January 2, 2021, there were no accrued dividends. Dividends for performance-based restricted stock awards that ultimately do not vest are forfeited. To date, the Company has issued performance-based restricted stock awards only under the 2014 Plan. The following summarizes the activity in the performance-based restricted stock awards during the fifty-three week period ended January 2, 2021:
As of January 2, 2021, there were no outstanding performance-based restricted stock awards. The Company will reassess at each reporting date whether achievement of any performance condition is probable and would begin recognizing additional compensation cost if and when achievement of the performance condition becomes probable. The Company will then recognize the appropriate expense cumulatively in the year performance becomes probable and recognize the remaining compensation cost over the remaining requisite service period. If at a later measurement date the Company determines that performance-based restricted stock awards deemed as likely to vest are deemed as unlikely to vest, the expense recognized will be reversed.
Based on the closing price of the Company's common stock of $2.07 per share on December 31, 2020, the intrinsic value of all restricted share awards at January 2, 2021 was $1.5 million. This amount does not include any intrinsic value that may be associated with the performance-based restricted share awards that are deemed unlikely to vest. |
Note 12 - Treasury Stock Transactions |
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Treasury Stock [Text Block] |
On June 2, 2020, the Company entered into a stock purchase agreement with certain stockholders of the Company, whereby the Company purchased an aggregate of 1,858,139 shares of the Company's common stock for a negotiated purchase price of $1.20 per share or $2.2 million in total. The negotiated price of $1.20 per share was less than the lowest trading price of the stock on the day of the repurchase. The consideration paid by the Company consisted entirely of an unsecured subordinated promissory note for $2.2 million. The note accrues interest at an annual rate of 9.0%, compounded annually, payable quarterly in arrears commencing on September 1, 2020 and continuing on each December 1, March 1, June 1 and September 1 thereafter, and initially had a maturity date of August 10, 2023 . September 25, 2020, the Company repaid the subordinated promissory note in the amount of $2.2 million.The shares repurchased on June 2, 2020 were not purchased under a stock repurchase plan. The Company did not repurchase any shares in the comparable prior year period.On January 13, 2021, the Company's Board of Directors authorized a program to repurchase shares of the Company's common stock constituting, in the aggregate, up to an amount not to exceed $7.5 million, consistent with the maximum limitation set forth by the Company's revolving line of credit. The program is designed to provide the Company with enhanced flexibility over the long term to optimize its capital structure. Shares of the common stock may be repurchased in the open market or through negotiated transactions. The program may be terminated or suspended at any time at the discretion of the Company. |
Note 13 - New Accounting Standards |
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Accounting Standards Update and Change in Accounting Principle [Text Block] |
In June 2016, the FASB issued ASU 2016 -13, Financial Instruments - Credit Losses (Topic The new standard amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. In 326 ). February 2020, the FASB issued ASU 2020 -02, Financial Instruments-Credit Losses (Topic which amends the effective date of the original pronouncement for smaller reporting companies. ASU 326 ) and Leases (Topic 842 ) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016 -02, Leases (Topic 842 ),2016 -13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects the adoption will have on its condensed consolidated financial statements.In March 2020, the FASB issued ASU No. 2020 -04, Reference Rate Reform (Topic This standard only applies to contracts and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. This guidance provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities' financial reporting burdens as the market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The Company 848 ): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance will have on its condensed consolidated financial statements and related disclosures. |
Note 14 - Segment Information |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 these Consolidated Financial Statements.)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, Puerto Rico and Serbia. Revenues by geographic area for the fiscal years ended January 2, 2021 and December 28, 2019 are as follows:
Total assets by geographic area as of the reported periods are as follows:
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Note 15 - Income Taxes |
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Income Tax Disclosure [Text Block] |
Generally, the Company's relative income or loss generated in each of its jurisdictions can materially impact the consolidated effective income tax rate of the Company, particularly the ratio of Canadian and Serbian pretax income, versus United States pretax income. The consolidated effective income tax rate for fiscal 2020 was 26.4% as compared to 15.8% for the comparable prior year period. The Company's United States Federal statutory tax rate for the fifty-three week period ended January 2, 2021 and the comparable prior year period, before any adjustments, was 21.0%. The income tax provisions reconciled to the tax computed at the United States Federal statutory rate for both fiscal 2020 and 2019 are as follows:
The Company did not experience any significant adjustments that impacted its 2020 income tax benefit of $3.2 million. The Company experienced the following significant adjustments for the 2019 fiscal year that impacted its net income tax expense of $0.8 million: prior year United States R&D tax credits of $0.7 million recognized in fiscal 2019, and expense from changes to its United States net operating loss carryforward and repatriation taxes of $0.2 million.The components of income tax expense are as follows:
The components of earnings before income taxes by United States and foreign jurisdictions were as follows:
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, 2021 and December 28, 2019. At January 2, 2021 and December 28, 2019, deferred tax assets and liabilities consist of the following:
The Company has gross net operating losses of $8.4 million and $13.6 million to be applied to the net income of future federal and state tax returns, respectively. The principal amount of the federal net operating loss has an unlimited life. The Company conducts business in many states. Net operating losses in these states expire at differing periods but the majority of these expire from 2038 through 2040. 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, 2021 and December 28, 2019. The Company conducts its operations in multiple tax jurisdictions in the United States, Canada, Puerto Rico and Serbia. The Company and its subsidiaries file a consolidated United States Federal income tax return and file in various states. The Company's federal income tax returns have been examined through 2017. The Company has no open federal audits as of January 2, 2021. 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 2017. The Company is no longer subject to audit in Canada for the tax years prior to tax year 2016. The Company is no longer subject to audit in Puerto Rico for the tax years prior to tax year 2010. Differences between the effective tax rate and the applicable U.S. federal statutory rate may arise, primarily from the effect of state and local income taxes, share-based compensation, and potential tax credits available to the Company. |
Note 16 - Contingencies |
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Contingencies Disclosure [Text Block] |
From time to time, the Company is a defendant or plaintiff in various legal actions that arise in the ordinary business course. These matters may relate to professional liability, tax, compensation, contract, competitor disputes, and employee-related matters and include individual and class action lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company's employment and compensation practices. Additionally, some of the Company's clients may also become subject to claims, governmental inquiries and investigations, and legal actions relating to the Company's professional services. Depending upon the particular facts and circumstances, the Company may also be subject to indemnification obligations under its contracts with such clients relating to these matters.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. The Company records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. Significant judgment is required to determine both probability of loss and the estimated amount. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. 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. The Company has reserved $1.7 million for the settlement of a class action suit in California that alleges the Company did not properly pay its travel nurses overtime wages. While the Company believes it did not violate any overtime wage laws, it nevertheless decided to settle this class action lawsuit in December 2020. The Company expects to pay the $1.7 million settlement sometime during its third quarter of fiscal 2021. The Company is exposed to other asserted claims as of January 2, 2021, but the Company does not believe any of these other claims have a probability of loss. As of January 2, 2021, the Company did not have an accrual for any such other claims. Furthermore, even if any of these other claims do result in an unfavorable outcome or settlement, the Company believes that such matters will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows.The Company had a dispute with a customer that is a major utility in the United States. Both parties agreed in fiscal 2017 to resolve this dispute through binding arbitration. Arbitration hearings with this customer started in fiscal 2018. Essentially, the customer did not pay the balance of accounts receivable the Company believes were owed for certain disputed projects. As of December 28, 2019, the total amount of recorded receivables from this customer on these disputed projects was $14.1 million. Additionally, as part of the arbitration process, the customer asserted counter-claims of $10.3 million. The arbitrator rendered a decision in this dispute in April 2020, awarding the Company $7.4 million, and the arbitration award was paid during the fifty-three week period ended January 2, 2021. The counter-claims asserted against the Company of $10.3 million were denied in their entirety. For the fifty-three week period ended January 2, 2021, the Company recorded a charge of $8.4 million, including $6.7 million constituting the portion of the accounts receivable relating to the disputed projects that was not awarded by the arbitrator, $0.7 million from other projects with this customer that were not part of the arbitration, $0.8 million in professional fees related to the dispute and arbitration, and $0.2 million of transit accounts receivable associated with disputed projects that were part of the arbitration. The Company decided to write off the $0.7 million of accounts receivable from other projects not part of the arbitration for business reasons. |
Note 17 - Retirement Plans |
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Retirement Benefits [Text Block] |
Profit Sharing Plans 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, Puerto Rico and Serbia (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, 2021 and December 28, 2019 were $217 and $296, respectively. |
Note 18 - Commitments |
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Commitments and Contingencies Disclosure [Text Block] |
Executive Severance Agreements The Company is a party to Executive Severance Agreement (the “Executive Severance Agreement”) each of Bradley S. Vizi, the Company's Executive Chairman and President (dated as of June 1, 2018), and Kevin Miller, the Company's Chief Financial Officer (dated as of February 28, 2014, as amended), which set forth the terms and conditions of certain payments to be made by the Company to the 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) in the case of Mr. Miller, the executive remains continuously employed with the Company for a period of three months following the Change in Control. Each Executive Severance Agreement also provide for certain payments, 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 therein).Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 -02, Leases (Topic , which requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with terms greater than 842 )12 months and requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from that applied under the prior standard. After the issuance of Topic 842, the FASB clarified the guidance through several ASUS; hereinafter the collection of lease guidance is referred to as “ASC 842”. In connection with the continuing developments from COVID- 19, the Company has reduced its leased office space as a result of its employees moving to a remote work environment. The Company does not believe there is an opportunity to sublet any of the vacant office space due to the current commercial rental marketplace. This decision and reduction in the use of the office spaces resulted in a right-of-use asset impairment of $1.9 million. This loss was determined by identifying the fair value of the impacted right-of-use assets as compared to the carrying value of the assets as of the measurement date, in accordance with Property, Plant and Equipment Topic of the FASB ASC. The fair value of the right-of-use assets was based on the remaining term of each lease. In addition, the Company wrote off a total of $0.3 million in other office lease costs and obsolete equipment. On December 30, 2018, the Company adopted ASC 842 using the modified retrospective method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning December 30, 2018 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company's historic accounting under ASC 840, Leases . The standard had a material impact on the Company's Consolidated Condensed Balance Sheet but did not have a significant impact on the Company's consolidated net earnings and cash flows. The most significant impact was the recognition of right of use assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. For leases that commenced before the effective date of ASC 842, the Company elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates before December 30, 2018. As a result of the cumulative impact of adopting ASC 842, the Company recorded operating lease right of use assets of $3.9 million and operating lease liabilities of $4.1 million as of December 30, 2018, primarily related to real estate and office equipment leases, based on the present value of the future lease payments on the date of adoption.The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right of use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The right of use asset also consists of any lease incentives received. The lease terms used to calculate the right of use asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. The Company has lease agreements which require payments for lease and non-lease components. The Company has elected to account for these as a single lease component with the exception of its real estate leases.The components of lease expense were as follows:
Supplemental Cash Flow information related to leases was as follows:
Supplemental Balance Sheet information as of January 2, 2021 related to leases was as follows:
Maturities of lease liabilities are as follows:
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Note 19 - Related Party Transactions |
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Notes to Financial Statements | |||
Related Party Transactions Disclosure [Text Block] |
There have been no related party transactions during the time periods presented. |
Note 20 - Stockholder Rights Plan |
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Jan. 02, 2021 | |||
Notes to Financial Statements | |||
Stockholders' Equity Note Disclosure [Text Block] |
On May 22, 2020, the Board of Directors of the Company approved a stockholder rights plan (the “Rights Plan”) and declared a dividend distribution to stockholders of record as of the close of business on June 2, 2020 of one preferred stock purchase right (a “Right”) for each outstanding share of Common Stock of the Company. Each Right entitles the holder to purchase from the Company a unit consisting of one one -hundredth of a share (a “Unit”) of a newly-authorized series of junior participating preferred stock of the Company, upon the occurrence of certain events, as more fully described below, at a purchase price of $5.60 per Unit.In connection with the adoption of the stockholder rights plan, the Company designated 250,000 shares of the Company's authorized shares of Preferred Stock, par value $1.00, as Series A-3 Junior Participating Preferred Shares, none 3 Preferred Share shall entitle the holder 100 votes on all matters submitted to a vote of the stockholders of the Company, subject to adjustment for future dividends and combinations of common stock. The holders of Series A-3 Preferred Shares and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Company. The Series A-3 Preferred Shares shall, after issuance, be entitled to receive quarterly dividends in an amount equal to the greater of $50.00 per share or an amount per share, subject to adjustment, equal to 100 times the aggregate per share amount of all non-cash dividends or other distributions other than a dividend payable in shares of common stock or a subdivision of the outstanding shares of common stock declared on the common stock since the immediately preceding quarterly dividend payment date of the Series A-3 Preferred Shares, or, with respect to the first such quarterly dividend payment date, since the first issuance of any share or fraction of a share of the Series A-3 Preferred Shares. The Series A-3 Preferred Shares shall rank junior to all other series of the Company's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. The Series A-3 Preferred Shares shall not be redeemable. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series A-3 Preferred Shares shall be entitled to receive the greater of $100.00 per share, plus accrued dividends, or an amount per share, subject to adjustment, equal to 100 times the aggregate amount to be distributed per share to holders of Common Stock. In the event the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such event the Series A-3 Preferred Shares shall at the same time be similarly exchanged or changed in an amount per share, subject to adjustment, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. These preferences are protected by customary anti-dilution provisions.Initially, the Rights are not exercisable and are attached to each existing outstanding share of the Company's Common Stock. The Rights will separate and become exercisable if a person or group acquires 10% or more of the Company's Common Stock in a transaction, including the open market purchase of shares, not approved by our Board. If a person or group acquires 10%, each Right will entitle its holder (other than such person or members of such group) to purchase, at the Right's exercise price (subject to adjustment as provided in the Rights Plan), a number of shares of the Company's Common Stock having a then-current market value of twice the exercise price. The Rights Plan will cause substantial dilution to a person or group that attempts to acquire control of the Company on terms or in a manner not approved by our Board.The initial issuance of the Rights as a dividend had no financial accounting or reporting impact. The fair value of the Rights was nominal because the Rights were not exercisable when issued and no value is attributable to them. Additionally, the Rights do not meet the definition of a liability under generally accepted accounting principles in the United States and are therefore not accounted for as a long-term obligation. Accordingly, unless the Rights become exercisable as discussed above, the Rights Plan has no impact on the Company's Condensed Consolidated Financial Statements.The Company's Board of Directors may redeem the Rights for $0.001 per Right at any time before an event that causes the Rights to become exercisable. The Rights will expire on May 22, 2021, unless the Rights have previously been redeemed by the Board of Directors.The Rights Plan is not intended to interfere with any merger, tender or exchange offer or other business combination approved by our Board. Nor does the Rights Plan prevent our Board from considering any offer that it considers to be in the best interest of its stockholders. |
Note 21 - COVID-19 |
12 Months Ended | ||
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Jan. 02, 2021 | |||
Notes to Financial Statements | |||
Effect of COVID-19 Pandemic [Text Block] |
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19 ) as a pandemic, which continues to present various health, business and other challenges throughout the United States. As a result, we have temporarily closed most of our office locations, with most of our workforce working from home, and have seen a reduction in customer demand, all resulting in a negative impact on Company revenue, gross profit, and operating income. The duration and ultimate magnitude of the disruption remains uncertain. Therefore, while we experienced a negative impact during 2020, we expect this matter to continue to impact negatively our business, results of operations, and financial position at least through the first half of fiscal 2021 and likely beyond, and the related financial impact cannot be reasonably estimated at this time. Please see more detailed disclosure by segment in our Segment Discussion and the impact to our condensed consolidated financial position under Financial Activities under Liquidity and Capital Resources, all in Management's Discussion and Analysis of Financial Condition and Results of Operations. |
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. |
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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 may exceed federally insured amounts. The Company held $42 and $56 of cash and cash equivalents in Canadian banks as of January 2, 2021 and December 28, 2019, respectively, which was held principally in Canadian dollars. The Company held $246 and $129 of cash and cash equivalents in Serbian banks as of January 2, 2021 and December 28, 2019, respectively, which was held in various currencies. |
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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 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 and the line of credit's variable interest rate. 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. |
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Receivable [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. |
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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. |
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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. Pursuant to these agreements, the Company a) may engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of FASB ASC 606 “Revenue from Contracts with Customers” 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 is typically obligated to pay the subcontractor or staffing agency whether or not the client pays the Company. 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. |
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Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost and are depreciated on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. The annual rates are 20% for computer hardware and software as well as furniture and office equipment. Leasehold improvements are amortized over the shorter of the estimated life of the asset or the lease term. |
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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. 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. |
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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. |
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Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill is not amortized but is subject to periodic testing for impairment in accordance with FASB ASC 350 “Intangibles - Goodwill and Other. ” The Company tests goodwill for impairment on an annual basis as of the last day of the Company's fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has three reporting units. The Company uses a market-based approach to determine the fair value of the reporting units. This approach uses earnings/revenue multiples of similar companies recently completing acquisitions and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units. The Company adopted Accounting Standards Update (“ASU”) 2017 -04, “Intangibles - Goodwill and Other (Topic 350 ): Simplifying the Test for Goodwill Impairment” effective December 28, 2019 which has eliminated Step 2 from the goodwill impairment test. Under this update, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.The Company did not January 2, 2021 and December 28, 2019. There can be no assurance that future indicators of impairment and tests of goodwill impairment will not result in an impairment charge. |
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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 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. |
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Research, Development, and Computer Software, Policy [Policy Text Block] | Software In accordance with FASB ASC 350 -40 “Accounting for Internal Use Software,” 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, 2021 and December 28, 2019, the Company capitalized $305 and $139, respectively, for software costs. The net balance after accumulated depreciation for all software costs capitalized as of January 2, 2021 and December 28, 2019 was $1,389 and $1,726, respectively. |
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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 January 2, 2021 or December 28, 2019. The Company accounts for income taxes in accordance with FASB ACS 740 “Income Taxes” (FASB ASC 740 ) which requires an asset and liability approach of accounting for income taxes. FASB ASC 740 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. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The Company measures its deferred tax assets and liabilities using the tax rates that the Company believes will apply in the years in which the temporary differences are expected to be recovered or paid. The Company and its wholly owned United States subsidiaries file a consolidated federal income tax return. The Company also files tax returns in Canada, Puerto Rico and Serbia.The Company also follows the provisions of FASB ASC 740 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. |
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Revenue from Contract with Customer [Policy Text Block] | Revenue Recognition The Company records revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers . Revenue is recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate service streams that we provide to our customers.We evaluate our revenue contracts with customers based on the five -step model under ASC 606: (1 ) Identify the contract with the customer; (2 ) Identify the performance obligations in the contract; (3 ) Determine the transaction price; (4 ) Allocate the transaction price to separate performance obligations; and (5 ) Recognize revenue when (or as) each performance obligation is satisfied.The Company derives its revenue from several sources. The Company's Engineering Services and Information Technology Services segments perform consulting and project solution services. The Healthcare segment specializes in long-term and short-term staffing and placement services to hospitals, schools and long-term care facilities amongst others. All of the Company's segments perform staff augmentation services and derive revenue from permanent placement fees. The majority of the Company's revenue is invoiced on a time and materials basis. The following table presents our revenues disaggregated by revenue source for the fifty-three week period ended January 2, 2021 and the fifty-two week period December 28, 2019:
Time and Material The Company's IT and Healthcare segments predominantly recognize revenue through time and material work while its Engineering segment recognizes revenue through both time and material and fixed fee work. The Company's time and material contracts are typically based on the number of hours worked at contractually agreed upon rates, therefore revenue associated with these time and materials contracts are recognized based on hours worked at contracted rates. Fixed fee From time to time and predominantly in our Engineering segment, the Company will enter into contracts requiring the completion of specific deliverables. The Company has master services agreements with many of its customers that broadly define terms and conditions. Actual services performed under fixed fee arrangements are typically delivered under purchase orders that more specifically define terms and conditions related to that fixed fee project. While these master services agreements can often span several years, the Company's fixed fee purchase orders are typically performed over six to nine month periods. In instances where project services are provided on a fixed-price basis, revenue is recorded in accordance with the terms of each contract. In certain instances, revenue is invoiced at the time certain milestones are reached, as defined in the contract. Revenue under these arrangements are recognized as the costs on these contracts are incurred. On an infrequent basis, amounts paid in excess of revenue earned and recognized are recorded as deferred revenue, included in accounts payable and accrued expenses on the accompanying condensed balance sheets. In other instances, revenue is billed and recorded based upon contractual rates per hour. Additionally, some contracts contain “Performance Fees” (bonuses) for completing a contract under budget. Performance Fees, if any, are recorded when earned. Some contracts also limit revenue and billings to specified maximum amounts. Provisions for contract losses, if any, are made in the period such losses are determined. For contracts where there is a specific deliverable and the work is not complete and the revenue is not recognized, the costs incurred are deferred as a prepaid asset. The associated costs are expensed when the related revenue is recognized.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. Permanent placement revenue was $1.5 million for the fiscal year ended January 2, 2021 and $1.8 million for the fiscal year ended December 28, 2019. The deferred revenue balance as of both January 2, 2021 and December 28, 2019 was $0.4 may be recognized over a period exceeding one year from the time it was recorded on the balance sheet, although this is an infrequent occurrence. For the fifty-three week period ended January 2, 2021 and the fifty-two week period ended December 28, 2019, the Company recognized revenue of $0.4 million and $0.2 million, respectively, that was included in deferred revenue at the beginning of the reporting period.
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. Pursuant to these agreements, the Company a) may engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. Under the terms of the agreements, the Company is typically not required to pay the subcontractor until after the corresponding payment from the Company's end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically does not pay a given transit account payable until the related transit account receivable is collected. The Company is typically obligated to pay the subcontractor or staffing agency whether or not the client pays the Company. 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 $2.5 million and related transit accounts payable was $4.9 million, for a net payable of $2.4 million, as of January 2, 2021. The transit accounts receivable was $4.9 million and related transit accounts payable was $4.6 million, for a net receivable of $0.3 million, as of December 28, 2019. |
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Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration During the fiscal year ended January 2, 2021, New York City Board of Education represented 10.6% of the Company's revenues. No other client accounted for 10% or more of total revenues during the year. As of January 2, 2021, the following clients represented more than 10.0% of the Company's accounts receivable, net: New York City Board of Education was 11.8% and Hawaii Department of Education was 10.6%. 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 33.4%, 46.6% and 60.7%, respectively, of the Company's revenues for the fiscal year ended January 2, 2021. During the fiscal year ended December 28, 2019, New York City Board of Education and Hawaii Department of Education represented 17.6% and 11.1% of the Company's revenues, respectively. No other client accounted for 10% or more of total revenues during the year. As of December 28, 2019, the following clients represented more than 10.0% of the Company's accounts receivable, net: New York Power Authority was 24.6%, New York City Board of Education was 17.6% and Hawaii Department of Education was 12.7%. As of December 28, 2019, New York Power Authority total accounts receivable balance (including transit accounts receivable) was 27.3% 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 or total accounts receivable balance (including transit accounts receivable). The Company's five , ten and twenty largest customers accounted for approximately 43.5%, 57.0% and 69.2%, respectively, of the Company's revenues for the fiscal year ended December 28, 2019. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The functional currency of the Company's Canadian and Serbian subsidiaries 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. |
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Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income Comprehensive income consists of net income and foreign currency translation adjustments. |
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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. |
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Share-based Payment Arrangement [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 share awards 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 share awards is recognized over the vesting period of the restricted share awards on a straight-line basis. Restricted share awards 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 awards that ultimately do not vest are forfeited. |
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Advertising Cost [Policy Text Block] | Advertising Costs Advertising costs are expensed as incurred. Total advertising expense was $800 and $855 for the fiscal years ended January 2, 2021 and December 28, 2019, respectively. |
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Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements The Company values its financial assets and liabilities based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy was established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in inactive markets; or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data.Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. |
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Reclassification, Comparability Adjustment [Policy Text Block] | Reclassification Certain prior year amounts have been reclassified to conform with the current year presentation. These classifications had no effect on the previously reported results of operations. |
Note 1 - Summary of Significant Accounting Policies (Tables) |
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Disaggregation of Revenue [Table Text Block] |
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Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable (Tables) |
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Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
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Note 5 - Property and Equipment (Tables) |
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Property, Plant and Equipment [Table Text Block] |
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Note 6 - Acquisitions (Tables) |
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Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] |
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Note 7 - Goodwill (Tables) |
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Schedule of Goodwill [Table Text Block] |
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Note 8 - Intangible Assets (Tables) |
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Schedule of 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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Schedule of Weighted Average Number of Shares [Table Text Block] |
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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 Nonvested Restricted Stock Units Activity [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 Effective Income Tax Rate Reconciliation [Table Text Block] |
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Schedule of Components of Income Tax Expense (Benefit) [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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Lease, Cost [Table Text Block] |
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Lease, Cash Flow Information [Table Text Block] |
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Lease, Balance Sheet Information [Table Text Block] |
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Lease, Liability, Maturity [Table Text Block] |
|
Note 1 - Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Revenues | $ 150,409 | $ 191,100 |
Engineering Services [Member] | ||
Revenues | 57,715 | 67,873 |
Engineering Services [Member] | Time-and-materials Contract [Member] | ||
Revenues | 43,359 | 55,195 |
Engineering Services [Member] | Fixed-price Contract [Member] | ||
Revenues | 14,145 | 12,678 |
Engineering Services [Member] | Permanent Placement Services [Member] | ||
Revenues | 211 | |
Health Care [Member] | ||
Revenues | 60,481 | 89,348 |
Health Care [Member] | Time-and-materials Contract [Member] | ||
Revenues | 59,692 | 88,057 |
Health Care [Member] | Permanent Placement Services [Member] | ||
Revenues | 789 | 1,291 |
Technology Service [Member] | ||
Revenues | 32,213 | 33,879 |
Technology Service [Member] | Time-and-materials Contract [Member] | ||
Revenues | 31,723 | 33,384 |
Technology Service [Member] | Permanent Placement Services [Member] | ||
Revenues | $ 490 | $ 495 |
Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable - Accounts Receivable (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Allowance for sales discounts and doubtful accounts | $ (1,750) | $ (1,725) |
Accounts receivable, net | 36,007 | 59,760 |
Billed Revenues [Member] | ||
Accounts receivable, current | 25,926 | 29,214 |
Unbilled Revenues [Member] | ||
Accounts receivable, current | 8,219 | 13,824 |
Work In Progress [Member] | ||
Accounts receivable, current | 3,612 | 4,352 |
Accounts Receivable Subject to Arbitration [Member] | ||
Accounts receivable, current | $ 14,095 |
Note 5 - Property and Equipment (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
Jun. 27, 2020 |
|
Annual Depreciation Rate | 20.00% | 20.00% | |
Write Off of Fully Depreciated Property and Equipment | $ 1,529 | $ 2,781 | |
Depreciation, Total | $ 1,065 | $ 1,261 |
Note 5 - Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Property and equipment | $ 5,185 | $ 6,255 |
Less: accumulated depreciation and amortization | 3,107 | 3,538 |
Property and equipment, net | 2,078 | 2,717 |
Equipment and Furniture [Member] | ||
Property and equipment | 264 | 319 |
Computers and Systems [Member] | ||
Property and equipment | 4,686 | 5,628 |
Leasehold Improvements [Member] | ||
Property and equipment | $ 236 | $ 308 |
Note 6 - Acquisitions (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 3,100 | |
Payment for Contingent Consideration Liability, Financing Activities | $ 345 | $ 598 |
Note 6 - Acquisitions - Maximum Deferred Consideration Payments (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
January 1, 2022 | $ 500 | |
December 31, 2022 | 2,358 | |
Estimated future contingent consideration payments | 2,858 | |
Contingent consideration paid | (345) | $ (598) |
Increase to contingent payment estimates | (1,178) | |
Changes in fair value of contingent payments | 145 | 61 |
Balance | $ 2,858 | $ 3,058 |
Note 7 - Goodwill (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Goodwill, Impairment Loss | $ 0 | $ 0 |
Note 7 - Goodwill - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Balance | $ 16,354 | $ 17,532 |
Adjustment to final TKE purchase price | ||
Balance | 16,354 | 16,354 |
TKE [Member] | ||
Adjustment to final TKE purchase price | (1,178) | |
Engineering [Member] | ||
Balance | 11,918 | 13,096 |
Adjustment to final TKE purchase price | ||
Balance | 11,918 | 11,918 |
Engineering [Member] | TKE [Member] | ||
Adjustment to final TKE purchase price | (1,178) | |
Specialty Health Care [Member] | ||
Balance | 2,398 | 2,398 |
Adjustment to final TKE purchase price | ||
Balance | 2,398 | 2,398 |
Specialty Health Care [Member] | TKE [Member] | ||
Adjustment to final TKE purchase price | ||
Information Technology [Member] | ||
Balance | 2,038 | 2,038 |
Adjustment to final TKE purchase price | ||
Balance | $ 2,038 | 2,038 |
Information Technology [Member] | TKE [Member] | ||
Adjustment to final TKE purchase price |
Note 8 - Intangible Assets (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Impairment of Intangible Assets (Excluding Goodwill), Total | $ 0 | $ 0 |
Amortization of Intangible Assets, Total | $ 321 | $ 327 |
Note 8 - Intangible Assets - Intangible Assets by Class (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Intangible assets, net | $ 95 | $ 416 |
Restricted Covenants [Member] | ||
Intangible assets, net | 12 | 28 |
Customer Relationships [Member] | ||
Intangible assets, net | $ 83 | $ 388 |
Note 9 - Line of Credit (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Sep. 25, 2020 |
Jan. 02, 2021 |
Dec. 28, 2019 |
Oct. 18, 2019 |
|
Repayments of Subordinated Debt, Total | $ 2,230 | |||
Long-term Line of Credit, Noncurrent | $ 11,890 | $ 34,761 | ||
Note Issued to Acquire Treasury Stock [Member] | ||||
Repayments of Subordinated Debt, Total | $ 2,200 | |||
Citizens Bank of Pennsylvania [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 45,000 | |||
Debt Instrument, Interest Rate, Effective Percentage | 2.70% | 4.40% | ||
Long-term Line of Credit, Noncurrent | $ 11,900 | $ 34,800 | ||
Letters of Credit Outstanding, Amount | 1,900 | $ 1,600 | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 31,200 |
Note 10 - Per Share Data (Details Textual) - shares |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Dilutive Securities Not Included In The Calculation Of Weighted Average Diluted Shares (in shares) | 46,873 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 0 | 0 |
Note 10 - Per Share Data - Weighted Average Number of Common Shares (Details) - shares |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Basic weighted average shares outstanding (in shares) | 12,152,042 | 12,913,912 |
Dilutive effect of outstanding restricted share awards (in shares) | 58,241 | |
Weighted average dilutive shares outstanding (in shares) | 12,152,042 | 12,972,153 |
Note 10 - Per Share Data - Unissued Shares of Common Stock Were Reserved for the Following Purposes (Details) - shares |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Future grants of options or shares (in shares) | 520,929 | 268,326 |
Shares reserved for employee stock purchase plan (in shares) | 149,894 | 267,877 |
Total (in shares) | 1,380,628 | 927,928 |
Time-based Restricted Stock Units [Member] | ||
Restricted stock units outstanding (in shares) | 459,805 | 151,725 |
Unvested Subscription Restricted Share Awards [Member] | ||
Restricted stock units outstanding (in shares) | 250,000 | |
Performance-based Restricted Stock Units [Member] | ||
Restricted stock units outstanding (in shares) | 240,000 |
Note 12 - Treasury Stock Transactions (Details Textual) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 25, 2020 |
Jun. 02, 2020 |
Jan. 02, 2021 |
Dec. 28, 2019 |
Jan. 13, 2021 |
|
Treasury Stock, Shares, Acquired (in shares) | 1,858,139 | ||||
Treasury Stock Acquired, Average Cost Per Share (in dollars per share) | $ 1.20 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ 2,200 | $ 2,230 | |||
Repayments of Subordinated Debt, Total | $ 2,230 | ||||
Subsequent Event [Member] | Maximum [Member] | |||||
Stock Repurchase Program, Authorized Amount | $ 7,500 | ||||
Note Issued to Acquire Treasury Stock [Member] | |||||
Notes Issued | $ 2,200 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ||||
Repayments of Subordinated Debt, Total | $ 2,200 | ||||
Debt Instrument, Maturity Date | Aug. 10, 2023 |
Note 14 - Segment Information - Revenues by Geographic Area (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Revenues | $ 150,409 | $ 191,100 |
UNITED STATES | ||
Revenues | 126,238 | 166,750 |
CANADA | ||
Revenues | 15,310 | 16,822 |
PUERTO RICO | ||
Revenues | 5,702 | 4,942 |
SERBIA | ||
Revenues | $ 3,159 | $ 2,586 |
Note 14 - Segment Information - Total Assets by Geographic Area (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Total assets | $ 68,339 | $ 96,173 |
UNITED STATES | ||
Total assets | 56,308 | 82,110 |
CANADA | ||
Total assets | 7,067 | 9,638 |
PUERTO RICO | ||
Total assets | 1,483 | 1,103 |
SERBIA | ||
Total assets | $ 3,481 | $ 3,322 |
Note 15 - Income Taxes (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Effective Income Tax Rate Reconciliation, Percent, Total | 26.40% | 15.80% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% |
Income Tax Expense (Benefit), Total | $ (3,188) | $ 764 |
Effective Income Tax Rate Reconciliation, Tax Credit, Amount, Total | 668 | |
Effective Income Tax Rate Reconciliation, NOL Adjustments and Repatriation Taxes, Amount | (53) | $ 154 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards, Total | 8,400 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards, Total | $ 13,600 | |
State and Local Jurisdiction [Member] | New Jersey Division of Taxation [Member] | ||
Income Tax Examination, Year under Examination | 2009 2010 2011 2012 |
Note 15 - Income Taxes - Income Tax Provision Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Federal statutory rate | 21.00% | 21.00% |
Tax expense on taxable (loss) income at federal statutory rate | $ (2,532) | $ 1,013 |
State and Puerto Rico income taxes, net of Federal income tax benefit | (535) | 305 |
Prior year United States R&D tax credits in current year | (668) | |
Permanent differences | 154 | 77 |
Foreign income tax rates | (21) | (101) |
Adjustments to NOL and repatriation taxes | (53) | 154 |
Other | (201) | (16) |
Total income tax expense | $ (3,188) | $ 764 |
Note 15 - Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Current | ||
Federal | $ (32) | $ (688) |
State and local | 174 | 181 |
Foreign | 382 | 166 |
Current Income Tax Expense (Benefit), Total | 524 | (341) |
Deferred | ||
Federal | (2,844) | 892 |
State | (851) | 229 |
Foreign | (17) | (16) |
Deferred Income Tax Expense (Benefit), Total | (3,755) | 1,105 |
Total income tax expense | (3,188) | 764 |
United States | (13,898) | 3,626 |
Foreign jurisdictions | 1,841 | 1,196 |
(Loss) income before income taxes | $ (12,057) | $ 4,822 |
Note 15 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 29, 2019 |
---|---|---|
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 455 | $ 432 |
Federal and state net operating loss carryforward | 2,634 | 330 |
Reserves and accruals | 1,491 | 255 |
Other | 318 | 185 |
Total deferred tax assets | 4,898 | 1,202 |
Deferred tax liabilities: | ||
Acquisition amortization, net | (716) | (569) |
Prepaid expense deferral | (602) | (701) |
Bonus depreciation to be reversed | (280) | (327) |
Canada deferred tax liability, net | (365) | (382) |
Total deferred tax liabilities | (1,963) | (1,979) |
Total deferred tax assets, net | $ 2,935 | |
Total deferred tax liability, net | $ (777) |
Note 17 - Retirement Plans (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Deferred Compensation Arrangement with Individual, Contributions by Employer | $ 217 | $ 296 |
Note 18 - Commitments (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
Dec. 30, 2018 |
|
Operating Lease, Impairment Loss | $ 2,231 | ||
Operating Lease, Right-of-Use Asset | 2,409 | 5,820 | |
Operating Lease, Liability, Total | 4,527 | $ 6,055 | |
Accounting Standards Update 2016-02 [Member] | |||
Operating Lease, Right-of-Use Asset | $ 3,900 | ||
Operating Lease, Liability, Total | $ 4,100 | ||
COVID-19 [Member] | |||
Operating Lease, Impairment Loss | 1,900 | ||
Write off Lease Cost and Obsolete Equipment | $ 300 |
Note 18 - Commitments - Lease Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Operating lease cost | $ 2,524 | $ 2,314 |
Amortization of right of use assets | 366 | 305 |
Finance lease cost, Interest on lease liabilities | 10 | 8 |
Total finance lease cost | $ 376 | $ 313 |
Note 18 - Commitments - Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Operating cash flows from operating leases | $ 2,589 | $ 2,290 |
Operating cash flows from finance leases | 7 | 8 |
Financing cash flows from finance leases | 402 | 310 |
Operating leases | 1,257 | 7,894 |
Finance leases | $ 258 | $ 126 |
Note 18 - Commitments - Balance Sheet Information (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Operating lease right of use assets | $ 2,409 | $ 5,820 |
Operating right of use liability - current | (1,886) | (2,134) |
Operating right of use liability - non-current | (2,641) | (3,921) |
Total operating lease liabilities, 2021 | (4,527) | (6,055) |
Property and equipment - (right of use assets) | 1,140 | 985 |
Accumulated depreciation | (746) | (475) |
Property and equipment, net | 394 | 510 |
Other current liabilities | (247) | (315) |
Other long term liabilities | (106) | (189) |
Total finance lease liabilities | $ (353) | $ (504) |
Operating leases (Year) | 2 years 10 days | 2 years 197 days |
Finance leases (Year) | 1 year 164 days | 1 year 226 days |
Operating leases | 4.06% | 4.11% |
Finance leases | 2.63% | 1.78% |
Note 18 - Commitments - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
2021, operating leases | $ 2,019 | |
2021, finance leases | 255 | |
2022, operating leases | 1,505 | |
2022, finance leases | 109 | |
2023, operating leases | 955 | |
2023, finance leases | ||
2024, operating leases | 232 | |
2024, finance leases | ||
2025, operating leases | 48 | |
2025, finance leases | ||
Thereafter, operating leases | ||
Thereafter, finance leases | ||
Total lease payments, operating leases | 4,759 | |
Total lease payments, finance leases | 364 | |
Less: imputed interest, operating leases | (232) | |
Less: imputed interest, finance leases | (11) | |
Total, operating leases | 4,527 | $ 6,055 |
Total, finance leases | $ 353 | $ 504 |
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