RCM Technologies Inc. (RCMT, Financial) filed Annual Report for the period ended 2012-02-22.
Rcm Tech Inc has a market cap of $72.6 million; its shares were traded at around $5.7 with a P/E ratio of 17.2 and P/S ratio of 0.5.
Information Technology revenues of $53.8 million in the fiscal year ended December 31, 2011 decreased $17.8 million, or 24.8%, as compared to the prior year. The Company believes the decrease in revenue was primarily attributable to poor execution by its sales generation team, which the Company has taken, and continues to take, steps to remediate. In particular, the Information Technology segment experienced a $1.3 million decrease from its Michigan and Ohio offices and a $4.8 million decrease from its Life Sciences clients. The Information Technology segment experienced operating income of $0.7 million for the fiscal year ended December 31, 2011 as compared to $1.6 million for the prior year. The decrease in operating income was primarily attributable to the decrease in revenues.
Engineering revenues of $62.6 million in the fiscal year ended December 31, 2011 decreased $1.9 million, or 3.0%, as compared to the prior year. The Company attributes the decrease primarily to natural cycles in the spending patterns of its major clients. In particular, the Engineering segment s Canadian Engineering Group generated $21.3 million in fiscal 2011 as compared to $24.8 million in the prior year. The primary reason for the decline was that a project started in 2006 for a major customer entered the closeout phase in late 2011. Revenues from this project in fiscal 2011 were $12.8 million as compared to $17.2 million in the prior year. The project spending slowed considerably in the second half of fiscal 2011 and is expected to end in the first quarter of fiscal 2012. The project generated revenues of $3.1 million and $2.2 million in the third and fourth quarters of fiscal 2011, respectively. The Company expects to generate approximately $2.0 million of revenue in the first quarter of fiscal 2012 as the project is completed. While the Company does not anticipate that the quarterly revenues lost from the completion of this major project will be replaced in the near term, that Company did, in the fourth quarter of fiscal 2011, execute a master services agreement (“MSA”) with this same major customer to provide engineering services for future capital and operating projects. The Company is not, however, able to predict how much work the Company will win under this new MSA, though the Company is cautiously optimistic about winning future projects.
During the fiscal year ended December 31, 2011, the revenue decline at the Company s Canadian Engineering Group was offset by growth in the Engineering s Power Systems USA and Facilities Design divisions. The Power Systems USA and Facilities Design divisions generated $15.2 million and $4.4 million, respectively in fiscal 2011 as compared to $11.2 million and $2.5 million, respectively, in the prior year. Engineering segment operating income was $4.5 million for the fiscal year ended December 31, 2011 as compared to $5.5 million for the comparable prior year. The decrease in operating income was primarily due to lower revenues, an increase in cost of services as a percentage of revenues and a higher allocation of corporate SGA expense. The increase in cost of services as a percentage of revenues was primarily due to less higher margin project work in the current period. Corporate SGA expense is allocated based on revenues and the Engineering revenues as a percentage of total revenues significantly increased in the current period.
Specialty Health Care revenues of $27.4 million in the fiscal year ended December 31, 2011, increased $1.5 million, or 5.8%, as compared to the prior year. The Specialty Health Care segment experienced operating income of $1.8 million for the fiscal year ended December 31, 2011 as compared to $2.0 million for the prior year. The decrease in operating income was primarily attributable to an increase in cost of sales and an increase in the allocation of corporate SGA expense.
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Rcm Tech Inc has a market cap of $72.6 million; its shares were traded at around $5.7 with a P/E ratio of 17.2 and P/S ratio of 0.5.
Highlight of Business Operations:
Revenues. Revenues decreased 11.2%, or $18.2 million, for the fiscal year ended December 31, 2011 as compared to the prior fiscal year (the “comparable prior year period”). Revenues decreased $17.8 million in the Information Technology segment, decreased $1.9 million in the Engineering segment, and increased $1.5 million in the Specialty Health Care segment. See Segment Discussion for further information on revenue changes.Information Technology revenues of $53.8 million in the fiscal year ended December 31, 2011 decreased $17.8 million, or 24.8%, as compared to the prior year. The Company believes the decrease in revenue was primarily attributable to poor execution by its sales generation team, which the Company has taken, and continues to take, steps to remediate. In particular, the Information Technology segment experienced a $1.3 million decrease from its Michigan and Ohio offices and a $4.8 million decrease from its Life Sciences clients. The Information Technology segment experienced operating income of $0.7 million for the fiscal year ended December 31, 2011 as compared to $1.6 million for the prior year. The decrease in operating income was primarily attributable to the decrease in revenues.
Engineering revenues of $62.6 million in the fiscal year ended December 31, 2011 decreased $1.9 million, or 3.0%, as compared to the prior year. The Company attributes the decrease primarily to natural cycles in the spending patterns of its major clients. In particular, the Engineering segment s Canadian Engineering Group generated $21.3 million in fiscal 2011 as compared to $24.8 million in the prior year. The primary reason for the decline was that a project started in 2006 for a major customer entered the closeout phase in late 2011. Revenues from this project in fiscal 2011 were $12.8 million as compared to $17.2 million in the prior year. The project spending slowed considerably in the second half of fiscal 2011 and is expected to end in the first quarter of fiscal 2012. The project generated revenues of $3.1 million and $2.2 million in the third and fourth quarters of fiscal 2011, respectively. The Company expects to generate approximately $2.0 million of revenue in the first quarter of fiscal 2012 as the project is completed. While the Company does not anticipate that the quarterly revenues lost from the completion of this major project will be replaced in the near term, that Company did, in the fourth quarter of fiscal 2011, execute a master services agreement (“MSA”) with this same major customer to provide engineering services for future capital and operating projects. The Company is not, however, able to predict how much work the Company will win under this new MSA, though the Company is cautiously optimistic about winning future projects.
During the fiscal year ended December 31, 2011, the revenue decline at the Company s Canadian Engineering Group was offset by growth in the Engineering s Power Systems USA and Facilities Design divisions. The Power Systems USA and Facilities Design divisions generated $15.2 million and $4.4 million, respectively in fiscal 2011 as compared to $11.2 million and $2.5 million, respectively, in the prior year. Engineering segment operating income was $4.5 million for the fiscal year ended December 31, 2011 as compared to $5.5 million for the comparable prior year. The decrease in operating income was primarily due to lower revenues, an increase in cost of services as a percentage of revenues and a higher allocation of corporate SGA expense. The increase in cost of services as a percentage of revenues was primarily due to less higher margin project work in the current period. Corporate SGA expense is allocated based on revenues and the Engineering revenues as a percentage of total revenues significantly increased in the current period.
Specialty Health Care revenues of $27.4 million in the fiscal year ended December 31, 2011, increased $1.5 million, or 5.8%, as compared to the prior year. The Specialty Health Care segment experienced operating income of $1.8 million for the fiscal year ended December 31, 2011 as compared to $2.0 million for the prior year. The decrease in operating income was primarily attributable to an increase in cost of sales and an increase in the allocation of corporate SGA expense.
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