The accompanying consolidated interim financial statements of RCM Technologies, Inc. and subsidiaries ("RCM"(“RCM” or the "Company"“Company”) are unaudited. The year-end consolidated balance sheet was derived from audited statements but does not include all disclosures required by accounting principles generally accepted in the United States. These statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission pertaining to reports on Form 10-Q and should be read in conjunction with the Company'sCompany’s consolidated financial statements and the notes thereto for the year ended December 30, 201729, 2018 included in the Company'sCompany’s Annual Report Form 10-K for such period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.

The consolidated financial statements for the unaudited interim periods presented include all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for such interim periods.

Results for the thirteen and twenty-six week periods ended June 30, 201829, 2019 are not necessarily indicative of results that may be expected for the full year.

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, revenuesrevenue and expenses and disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.

The Company uses estimates to calculate an allowance for doubtful accounts on its accounts receivables, adequacy of reserves, goodwill impairment, if any, equity compensation, the tax rate applied and the valuation of certain assets and liability accounts.  These estimates can be significant to the operating results and financial position of the Company.

The Company has risk participation arrangements with respect to workers compensation and health care insurance.  The amounts included in the Company'sCompany’s costs related to this risk participation are estimated and can vary based on changes in assumptions, the Company'sCompany’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'sCompany’s services, adverse litigation and claims and the hiring, training and retention of key employees.

The Company'sCompany’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.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.

As of December 31, 2017, theThe Company adopted Accounting Standards Update ("ASU")records revenue under ASU 2014-09, Revenue from Contracts with Customers ("ASC 606"), using the modified retrospective approach.  Revenues are.  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. The adoption of ASC 606 did not result in an adjustment to retained earnings in the Company's consolidated balance sheet as of December 31, 2017.

The Company derives its revenuesrevenue from several sources.  The Company'sCompany’s Engineering Services and Information Technology Services segments perform consulting and project solution services.  All of the Company'sCompany’s segments perform staff augmentation services and derive revenue from permanent placement fees.  The majority of the Company's revenues areCompany’s revenue is invoiced on a time and materials basis.

The following table presents our revenuesrevenue disaggregated by revenue source for the thirteen and twenty-six weeksweek periods ended June 29, 2019 and June 30, 2018 and July 1, 2017:2018:

The Company'sCompany’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'sCompany’s time and material contracts are typically based on the number of hours worked at contractually agreed upon rates, therefore revenuesrevenue associated with these time and materials contracts are recognized based on hours worked at contracted rates. 

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'sCompany’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.  RevenuesRevenue under these arrangements are recognized as the costs on these contracts are incurred.  On an infrequent basis, amounts paid in excess of revenuesrevenue earned and recognized are recorded as deferred revenue, included in accounts payable and accrued expenses on the accompanying balance sheets.  In other instances, revenue is billed and recorded based upon contractual rates per hour.  Additionally, some contracts contain "Performance Fees"“Performance Fees” (bonuses) for completing a contract under budget.  Performance Fees, if any, are recorded when earned.  Some contracts also limit revenuesrevenue 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, 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.

The Company earns permanent placement fees from providing permanent placement services.  These fees are typically based on a percentage of the compensation paid to the person placed with the Company'sCompany’s client.

ThereDeferred revenue was no deferred revenue balance$389 and $150 at June 30, 2018.  The deferred revenue balance at29, 2019 and December 30, 2017 was $59629, 2018, respectively and is included in accounts payable and accrued expenseexpenses in the accompanying consolidated balance sheet at that date.those dates.  Revenue is recognized when the service has been performed.  Deferred revenue may be recognized over a period exceeding one year from the time it was recorded on the balance sheet.  For the twenty-six week period ended June 30, 2018,29, 2019, the Company recognized revenue of $596$150 that was included in deferred revenue at the beginning of the reporting period.

The Company'sCompany’s accounts receivable are comprised as follows:

Unbilled receivables primarily represent revenuesrevenue earned whereby those services are ready to be billed as of the balance sheet ending date.  Work-in-progress primarily represents revenuesrevenue earned under contracts which the Company contractually invoices at future dates.

From time to time, the Company'sCompany’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'sCompany’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“transit account receivable"receivable” and "transit“transit account payable"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'sCompany 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'sCompany’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 $1.2$1.8 million and related transit accounts payable was $1.8$2.7 million, for a net payable of $0.6$0.9 million as of June 30, 2018.29, 2019.  The transit accounts receivable was $3.0$2.6 million and related transit accounts payable was $4.7$2.5 million, for a net payablereceivable of $1.7$0.1 million, as of December 30, 2017.29, 2018.

The Company has 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 has not paid the balance of accounts receivable the Company believes are owed to the Company for certain disputed projects.  The Company recently compelled arbitration with this customer.  As of June 30, 201829, 2019 the total amount of outstanding receivables from this customer is $6.4on these disputed projects was $11.2 million, subject to anpotential upward adjustment following disclosures by the customer in thedamages claimed in arbitration.  Additionally, as part of the arbitration process, the customer has asserted counter claimscounter-claims. While the total amount of $9.3asserted counter-claims is unknown as of June 29, 2019, the total amount of such counter-claims is anticipated to be at least $10.3 million.  The Company also believes these counter claims werecounter-claims are retaliatory in nature.  Prior to the arbitration,Company asserting its claims, the customer had not asserted any claims.counter-claims.  The Company believes these counter-claims asserted claimsby its customer have no merit and were merely asserted as a strategy to reduce the Company'sCompany’s own claims in any arbitration award or potential settlement agreement. The Company believes that its accounts receivable balance, subject to reserves, is fully collectible. Furthermore, the Company believes that this arbitration will conclude sometime late inprior to reporting its fiscal year 2018 or early fiscal 2019.2019 financial results.  While the Company believes the customer's counter claimscustomer’s counter-claims to be frivolous and without merit, it can give no assurances that it will ultimately not have to pay all or a portion of such claims.counter-claims.  The Company is continuing work on one of the engagements that have given rise to this dispute and also on several engagements from the same client that are not currently part of the arbitration.

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.

The Company has acquired numerous companies throughout its history and those acquisitions have generally included significant future contingent consideration.  The Company gives no assurance that it will make acquisitions in the future and if they do make acquisitions gives no assurance that such acquisitions will be successful.

As of June 29, 2019, the Company madehad two active acquisition agreements whereby additional contingent consideration may be earned by the following acquisitions during fiscal 2018 and 2017:

Estimates of future contingent payments are subject to significant judgment and actual payments may materially differ from estimates.  Potential futurefuture contingent payments to be made to all active acquisitions after June 29, 2019 are capped at a cumulative maximum of $2.3$9.3 million.  The Company estimates future contingent consideration in payments based on forecasted performance and recorded at the net presentfair value of those expected payments as of June 30, 2018.  The measurement is based on significant inputs that are not observable in the market, which "Fair Value Measurements and Disclosures" (ASU Topic 820-10-35) refers to as Level 3 inputs.  There has been no change in the fair value of contingent consideration for29, 2019.  During the twenty-six week period ended June 30, 2018.29, 2019, the Company measured the intangibles acquired at fair value on a non-recurring basis.  Contingent consideration related to acquisitions are recorded at fair value (level 3) with changes in fair value recorded in other (expense) income, net.

The Company paid contingent consideration of $0.6 million and $0.3 million during both the twenty-six week periods ended June 29, 2019 and June 30, 2018, respectively.

Effective September 30, 2018, the Company acquired the business operations of Thermal Kinetics Engineering, PLLC, a New York professional limited liability company and July 1, 2017.Thermal Kinetics Systems, LLC, a New York limited liability company (together, “TKE”). TKE is an established Buffalo-based engineering company providing full service process equipment supply, engineering, development and design services for construction and industrial customers.  TKE provides engineering services on construction and industrial processes.  TKE engineers and builds optimal thermal integrations and unique separations approaches for industrial processes and equipment, with clients primarily in the chemical, oil and gas, renewable fuels, pharmaceutical, and industrial manufacturing industries. TKE will complement and expand the Company’s services offerings, providing a stronger depth of experienced engineering resources and capabilities.  The preliminary consideration and estimated fair value of assets acquired and liabilities assumed is as follows:

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.  The Company has determined that no indicators of impairment of goodwill existed during the twenty-six week periodperiods ended June 29, 2019 and June 30, 2018.

There were no changes in the carrying amount of goodwill for the twenty-six week period ended June 30, 2018.29, 2019.

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'sasset’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'sCompany’s intangible assets consist of customer relationships and non-compete agreements.  During all periods presented, the Company determined that no impairment of intangible assets exists.

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 substantially attributable to the Company's Engineering segment and include the following:carried at cost, less accumulated amortization.

Amortization expense of intangible assets for the twenty-six week periods ended June 29, 2019 and June 30, 2018 was $165 and July 1, 2017 was $34, and $33, respectively.

The Company and its subsidiaries are party to a loan agreementamended and restated its Revolving Credit Facility with Citizens Bank of Pennsylvania which, as of June 30, 2018,on August 9, 2018.  As amended and restated, the Revolving Credit Facility provides for a $40$45.0 million revolving credit facility, and includes ahas no sub-limit of $5 million for letters of credit, (the "Revolving Credit Facility") and expires December 11, 2019.on August 8, 2023. The amended and restated Revolving Credit Facility has been amended several times, most recently pursuant to the Eleventh Amendment entered into on May 21, 2018 when a tier from its interest rate pricing grid was eliminated.  The Company also entered into to the Tenth Amendment on February 14, 2018 whenprovides the Company increased the Revolving Credit Facility to $40 millionwith waivers from its previous amount of $35 million and entered into the  Ninth Amendment on December 8, 2017 when the Company was granted waivers that expressly allowed a cash dividendcertain financial covenant calculations of up to $12.4$1.4 million and waivedin the borrowers’ fiscal year ended December 29, 2018 for certain expenses, fromincluding severance accrued for the Company's loan covenant calculations, including $1.3 millionCompany’s former chief executive officer and related payroll taxes, continuation of certain expensesbenefits and professional fees, charges incurred related to transactional financial advisory fees, legal costs, office closuresfees associated with defending an ongoing frivolous lawsuit with a competitor of the Company, and other expenses in fiscal 2017, up to $1.0 million consulting expenses for analyzing tax credits for research and development costs and 179D energy savings tax credits onsearch fees associated with hiring a rolling four quarter basis and up to $4.6 million for goodwill impairment.  senior executive.  Except as noted, all material terms remain unchanged.

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'sbank’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 twenty-six week periodperiods ended June 29, 2019 and June 30, 2018 waswere 4.7% and 3.6%., 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'sCompany’s ability to borrow in order to pay dividends.  The Company was not in compliance with one of its financial covenants as of June 29, 2019, based on the ratio of funded debt to Company’s operating income before depreciation and amortization (subject to certain other adjustments as defined in the Revolving Credit Facility) for the twelve months ended June 29, 2019. However, the Company obtained a waiver from its lender, Citizens Bank.  As of June 30, 2018,29, 2019, the Company was in compliance with all other covenants contained in the Revolving Credit Facility.

Borrowings under the line of credit as of June 30, 201829, 2019 and December 30, 201729, 2018 were $29.2$30.9 million and $27.3$27.5 million, respectively.  At June 30, 201829, 2019 and December 30, 201729, 2018 there were letters of credit outstanding for $0.8$1.6 million.  At June 30, 2018,29, 2019, the Company had availability for additional borrowings under the Revolving Credit Facility of $10.0$12.5 million.

The Company uses the treasury stock method to calculate the weighted-average shares used for diluted earnings per share.  The number of common shares used to calculate basic and diluted earnings per share for the thirteen and twenty-six week periods ended June 29, 2019 and June 30, 2018 and July 1, 2017 was determined as follows:

For both the thirteen and the twenty-six weekall periods ended June 30, 2018,presented, there were no anti-dilutive shares not included in the calculation of common stock equivalents as there were no stock options outstanding.  For both the thirteen and the twenty-six week periods ended July 1, 2017 there were 40,000 absolute anti-dilutive shares not included in the calculation of common stock equivalents.  These were determined to be anti-dilutive because the exercise prices of the associated stock options for the periods were higher than the average market price of the Company's common stock for the same periods.outstanding.

At June 30, 2018,29, 2019, 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'sCompany’s common stock on the date of grant.  Awards vest over periods ranging from one to three years and expire within 10 years of issuance.  Share-based compensation expense related to 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-basedThe Company recognized share-based compensation expense of $201$448 and $395 was recognized$201 for the twenty-six week periods ended June 29, 2019, and June 30, 2018, and July 1, 2017, respectively.  Share based compensation for theThe twenty-six week period ended June 30, 2018 did29, 2019, includes $152 of expense associated with performance-based restricted stock units, whereas the prior period does not include any expense associated with performance-based restricted stock units since they were, asunits. As of June 30, 2018, determined29, 2019, 40,000 performance-based restricted stock units outstanding were deemed as likely to bevest, and all other performance-based restricted stock units outstanding were deemed as unlikely to vest.

As of June 30, 2018,29, 2019, the Company had approximately $344$0.3 million of total unrecognized compensation cost related to all time-based non-vested share-based awards granted under the Company's various share-based plans, which theand performance-based restricted stock units outstanding and deemed as likely to vest. The Company expects to recognize this expense over approximately a two-year period.two years.  These amounts do not include a) performance-based restricted stock units deemed unlikely to vest, b) the cost of any additional share-based awards that may be granted in future periods or c) the impact of any potential changes in the Company'sCompany’s forfeiture rate.

The 2014 Plan, approved by the Company'sCompany’s shareholders in December 2014, provides for the issuance of up to 625,000 shares of the Company'sCompany’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, 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 shares so that the total number of shares of stock reserved for issuance under the Plan is 1,125,000 shares.  The expiration date of the Plan is December 1, 2026.  The Compensation Committee of the Board of Directors determines the vesting period at the time of grant.

As of June 30, 2018,29, 2019, under the 2014 Plan, 96,195120,372 time-based and 240,000320,000 performance-based restricted share units were outstanding and 483,071267,551 shares were available for awards thereunder.

The Company implemented the 2001 Employee Stock Purchase Plan (the "Purchase Plan"“Purchase Plan”) with shareholder approval, effective January 1, 2001.  Under the Purchase Plan, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement or end of the offering period.  The purchase plan permits eligible employees to purchase shares of common stock through payroll deductions for up to 10% of qualified compensation.

In fiscal 2015, the Company amended the Purchase Plan 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'sCompany’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.  The number of shares issued at the beginning of the current period (on January 2,December 31, 2018) was 45,408.59,451.  As of June 30, 2018,29, 2019, there were 131,872326,952 shares available for issuance under the Purchase Plan.

From time-to-time the Company issues time-based restricted stock units.  These time-based restricted stock units typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period assuming the grantee'sgrantee’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.  As of June 29, 2019, there was $40 in accrued dividends.  Dividends for time-based restricted stock units that ultimately do not vest are forfeited.

To date, the Company has issued time-based restricted stock units only under its 2007 Omnibus Equity Compensation Plan and the 2007 and 2014 Plans.Plan.  The 2007 Plan has expired and there are no time-based restricted stock units outstanding thereunder.  The following summarizes the activity in the time-based restricted stock units under the 2014 Plan during the twenty-six week period ended June 30, 2018:29, 2019:

Based on the closing price of the Company'sCompany’s common stock of $4.94$4.00 per share on June 29, 201828, 2019 (the last trading day prior to June 30, 2018)29, 2019), the intrinsic value of the time-based non-vested restricted stock units at June 30, 201829, 2019 was approximately $475.$481.  As of June 30, 2018,29, 2019, there was approximately $344$220 of total unrecognized compensation cost related to time-based restricted stock units, which is expected to be recognized over the vesting period of the restricted stock units.

From time-to-time the Company issues performance-based restricted stock units to its executives.  Performance-based restricted stock units are typically vested based on certain multi-year performance metrics as determined by the Board of Directors Compensation Committee. These performance-based restricted stock units typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period on any stock units 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 consolidated balance sheet.  As of June 29, 2019, there were no accrued dividends.  Dividends for performance-based restricted stock units that ultimately do not vest are forfeited.  

To date, the Company has issued performance-based restricted stock units only under the 2014 Plan.  The following summarizes the activity in the performance-based restricted stock units during 2018:the twenty-six week period ended June 29, 2019:

As of June 30, 2018,29, 2019, the Company currently considers the metrics related to 240,00040,000 of the total outstanding 320,000 performance-based restricted stock units as likely to be achieved, with the metrics related to the remaining 280,000 performance-based restricted stock units considered as unlikely to be achieved, thus no performance condition is probable of achievement and no compensation cost has been recognized on the performance-based restricted stock units.achieved. 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 the 40,000 performance-based restricted stock units deemed as likely to vest are deemed as unlikely to vest, the expense recognized as of June 29, 2019, will be reversed.  As of June 29, 2019, there was approximately $88 of total unrecognized compensation cost related to performance-based restricted stock units deemed likely to vest. 

On October 28, 2013, the Board of Directors authorized a repurchase program to purchase up to $5.0 million of outstanding shares of common stock at the prevailing market prices, from time to time over the subsequent 12-month period.  On September 30, 2014, the Board extended this repurchase program through October 31, 2015.  On September 11, 2015, the Board extended this repurchase program through December 31, 2016.  On August 9, 2016, the Board authorized an additional $5.0 million to the repurchase program and extended this repurchase program through December 31, 2017.  For both the twenty-six week periodperiods ended June 29, 2019 and June 30, 2018, the Company did not have an active stock purchase program and therefore did not purchase any treasury shares. For the twenty-six week period ended July 1, 2017, the Company purchased 59,312 shares at an average price of $6.16.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The new standard amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2018,2019, including interim periods within those fiscal years.  The Company is currently evaluating this guidancedoes not expect the adoption of ASU 2016-13 to determine thehave a material impact it may have on its consolidated financial statements.

The Company follows "Disclosures“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 reportable segment are the same as those described in the summary of significant accounting policies (see(see Note 1 to the Company'sCompany’s Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 30, 2017)29, 2018).

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 reportable segments consistent with the Company'sCompany’s management system:

From time to time, the Company is a defendant or plaintiff in various legal actions that arise in the normal course of business.  As such, the Company is required to assess the likelihood of any adverse outcomes to these matters as well as potential ranges of losses and possible recoveries.  The Company may not be covered by insurance as it pertains to some or all of these matters.  A determination of the amount of the provision required for these commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each matter.  Once established, a provision may change in the future due to new developments or changes in circumstances and could increase or decrease the Company'sCompany’s earnings in the period that the changes are made.  Asserted claims in these matters sought approximately $9.4$10.3 million in damages (including $9.3 million in counter claims(as further described below) as of June 30, 2018.29, 2019.  As of June 30, 2018,29, 2019, the Company had a negligibledid not have an accrual for any such liabilities.

The Company has 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 has not paid the balance of accounts receivable the Company believes are owed to the Company for certain disputed projects.  The Company recently compelled arbitration with this customer.  As of June 30, 201829, 2019 the total amount of outstanding receivables from this customer is $6.4on these disputed projects was $11.2 million, subject to anpotential upward adjustment following disclosures by the customer in thedamages claimed in arbitration.  Additionally, as part of the arbitration process, the customer has asserted counter claimscounter-claims. While the total amount of $9.3asserted counter-claims is unknown as of June 29, 2019, the total amount of such counter-claims is anticipated to be at least $10.3 million.  The Company also believes these counter claims werecounter-claims are retaliatory in nature.  Prior to the arbitration,Company asserting its claims, the customer had not asserted any claims.counter-claims.  The Company believes these counter-claims asserted claimsby its customer have no merit and were merely asserted as a strategy to reduce the Company'sCompany’s own claims in any arbitration award or potential settlement agreement. The Company believes that its accounts receivable balance, subject to reserves, is fully collectible. Furthermore, the Company believes that this arbitration will conclude sometime late inprior to reporting its fiscal year 2018 or early fiscal 2019.2019 financial results.  While the Company believes the customer's counter claimscustomer’s counter-claims to be frivolous and without merit, it can give no assurances that it will ultimately not have to pay all or a portion of such claims.counter-claims.  The Company is continuing work on one of the engagements that have given rise to this dispute and also on several engagements from the same client that are not currently part of the arbitration.

The Company is also subject to other pending legal proceedings and claims that arise from time to time in the ordinary course of its business, which may not be covered by insurance.

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 Other Chargescontinue 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 ROU 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.

The Company experienced $1.4 million in severance, professional fees and other chargesdetermines if an arrangement is a lease at inception. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the thirteen week period ended June 30, 2018.  These charges include severance accrued forlease term and lease liabilities represent an obligation to make lease payments arising from the Company's former chief executive officerlease. ROU 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 ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related payroll taxes, continuation oflease liability include options to extend or terminate the lease when it is reasonably certain benefits and professional fees, totaling approximately $0.9 million.  The additional charges of $0.5 million incurred related to transactional financial advisory fees, legal fees associated with defending an ongoing frivolous lawsuit with a competitor ofthat 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 search fees associated with hiring a senior executive.interest expense using the accelerated interest method of recognition. The Company did not incur any such charges inhas 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 comparable prior year period.

The Company and its subsidiaries amended and restated its Revolving Credit Facility with Citizens Bankcomponents of Pennsylvania on August 9, 2018.  As amended and restated, the Revolving Credit Facility, now provides for a $45.0 million revolving credit facility (increased from $40.0 million), no longer has a sub-limit for letters of credit (from a sub-limit of $5.0 million) and expires on August 8, 2023. The amended and restated Revolving Credit Facility provides the Company waivers from certain financial covenant calculations of up to $1.4 million in the borrowers' fiscal year ending on December 31, 2018 for certain expenses including severance accrued for the Company's former chief executive officer and related payroll taxes, continuation of certain benefits and professional fees, charges incurredlease expense were as follows:

Supplemental Cash Flow information related to transactional financial advisory fees, legal fees associated with defending an ongoing frivolous lawsuit with a competitor of the Company, and search fees associated with hiring a senior executive.  Exceptleases was as noted, all material terms remain unchanged.follows: