R C M Technologies Inc (RCMT) 2011 Q3 法說會逐字稿

Welcome, ladies and gentlemen. And thank you for joining the Third Quarter Earnings Conference Call.

Mr. Leon Kopyt, you may now begin.

Thank you.

Good morning. Thanks for joining us this morning. Kevin Miller is here with me to share some additional financial data relating to our results that was released yesterday. We're going to follow our usual format. After Kevin, I'll make a brief statement, and then we'll turn it over to the question-and-answer period.

Kevin, could you begin?

Sure. Good morning, everyone.

Let me just read off the [sectorial] data. We have total sales for the quarter of $33,559,000, comprised as follows -- Information Technology, $12,537,000; our Engineering group had sales of $15,609,000; and our Specialty Healthcare group had sales of $5,413,000. We had a blended gross margin for the quarter of 27.11%, broken out as follows -- Information Technology was 26.31%, Engineering was 25.11%, and the Specialty Healthcare group was 34.72%.

Thank you, Kevin.

It is clearly evident, I think, from our numbers that our weakness continues to be the lack of revenue growth. Most other metrics seem to be stable and improving, but the revenue has been sort of an elusive target for us for some time.

Our current belief is that the revenue growth outlook for the near term has improved somewhat. I think it's reflecting [important to] line up of opportunities in the Engineering segment, and also the organizational changes that we have made in reshaping our IT operations.

As demand for the larger contracts -- capital projects, especially in the IT -- has downshifted somewhat, we are transitioning by design to the operating and the support side of business for the utilities, by securing a number of very important master services agreements. Those agreements allow us to participate in contracts without protracted procurement processes. There are a number of pipeline deals that are in the various stages of review and approval, and we expect that some of those deals begin to get closed in the latter part of fourth quarter, and sometime in the first quarter, with measurable business ramp up begin to occur in the midyear.

We are encouraged and hopeful that the recent IT changes will begin to bring some progress in incremental improvements. And we hope that it's going to reflect in the results next year.

Operator, we are ready for the question-and-answer period.

(Operator Instructions)

There are no questions, Mr. Kopyt.

Can you ask everyone again?

(Operator Instructions) Sheldon Grodsky, Grodsky & Associates.

I was trying to figure out the number of shares you have outstanding -- well, the average shares outstanding for the quarter. It didn't show up, I don't think, on your quarterly press release.

You're looking for the dilutive number of shares?

Either dilutive -- yes. Either the average number of shares for the quarter, or the actual shares.

Okay. Well, those are different numbers, but let me give them to you in a second here. Let me just turn -- and by the way, the Q should be filed by the end of the day, which obviously will have those details.

But the dilutive shares for the 13-week period ended October 1st of 2011 was 13,141,870. So that's the -- that's comprised of 12,994,565 in weighted average basic shares, and then dilutive shares of 147,305.

Now, the outstanding shares as of today -- and this is not a weighted average, it's just the number of shares that are outstanding as of today -- is 12,753,704. So that's the number you'll see on the face of the Q when it comes out later today.

Okay.

And then, going in a different direction -- you guys were just talking about the -- I don't want to use the wrong word, but the likelihood of some greater business next year on -- I think it was the utilities side of your business. How confident are you that you're going to experience that upturn?

Well, I would say reasonably confident. I mean, we have to win certain contracts in order for it to go up. So it's certainly not a certainty that our Engineering revenues are going to go up next year. But based on the pipeline activity and based on some of the projects that we have, and based on the customers, and our history of winning significant -- our significant contracts and a fair share of those contracts; we're reasonably confident that we'll see some uptick in the quarterly revenues in our Engineering group.

The thing that's always -- I don't want to say problem, it's just part of the business -- is the timing of these projects sometimes take longer than even we think they're going to take. So it's hard to say exactly when -- assuming that we win these contracts -- when they're going to take hold.

But the pipeline is very robust in our Engineering group, particularly on the utilities side. We also have a strong pipeline in our Engineering and Construction Management side of the business as well. And we do expect to get some pretty nice wins over the next six months. But again, obviously there's no guarantee that we'll win those contracts, but we feel good about it.

As I indicated, having the master services agreement gives us some level of encouragement and confidence. Because we know historically utilities had allocated significant dollars for their operating and support activities. And we are planning to participate in those budgetary numbers.

Thank you.

(Operator Instructions)

There are no further questions in queue.

All right. Thank you very much. And we ask you to join us at the end of the 2011 financial results. Thanks so much.

Ladies and gentlemen, at this time, you may all disconnect.