RCM Technologies (RCMT) has reported 88.57 percent plunge in profit for the quarter ended Oct. 01, 2016. The company has earned $0.11 million, or $0.01 a share in the quarter, compared with $0.96 million, or $0.07 a share for the same period last year. Revenue during the quarter dropped 11.94 percent to $39.70 million from $45.08 million in the previous year period. Gross margin for the quarter contracted 285 basis points over the previous year period to 25.55 percent. Total expenses were 98.94 percent of quarterly revenues, up from 95.77 percent for the same period last year. That has resulted in a contraction of 317 basis points in operating margin to 1.06 percent.
Operating income for the quarter was $0.42 million, compared with $1.91 million in the previous year period.
Rocco Campanelli, president and chief executive officer of RCM Technologies, commented, "Our Specialty Health Care segments third quarter revenues of $12.0 million established a new third quarter record despite seasonal softness, mainly due to summer vacations for several large school contracts. Our Information Technology segment revenues for the third quarter continued to lag prior year results as several large contracts ended in late 2015 and early 2016. We are confident that in the next several quarters we will begin to see improved results in this segment based on recent changes and investments we have made.
Operating cash flow improves significantlyRCM Technologies has generated cash of $12.13 million from operating activities during the nine month period, up 61.97 percent or $4.64 million, when compared with the last year period. The company has spent $0.73 million cash to meet investing activities during the nine month period as against cash outgo of $3.33 million in the last year period.
The company has spent $12.10 million cash to carry out financing activities during the nine month period as against cash outgo of $5.21 million in the last year period.
Cash and cash equivalents stood at $0.30 million as on Oct. 01, 2016, down 93.33 percent or $4.24 million from $4.54 million on Oct. 03, 2015.
Working capital drops significantly
RCM Technologies has witnessed a decline in the working capital over the last year. It stood at $29.53 million as at Oct. 01, 2016, down 32.34 percent or $14.12 million from $43.65 million on Oct. 03, 2015. Current ratio was at 2.48 as on Oct. 01, 2016, down from 3.11 on Oct. 03, 2015.
Days sales outstanding were almost stable at 124 days for the quarter, when compared with the last year period.
Debt increases substantially
RCM Technologies has witnessed an increase in total debt over the last one year. It stood at $22 million as on Oct. 01, 2016, up 46.66 percent or $7 million from $15 million on Oct. 03, 2015. RCM Technologies has witnessed an increase in long-term debt over the last one year. Total debt was 33.39 percent of total assets as on Oct. 01, 2016, compared with 18.37 percent on Oct. 03, 2015. Debt to equity ratio was at 0.48 as on Oct. 01, 2016, up from 0.34 as on Oct. 03, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
