RCM Technologies, Inc.
2500 McClellan Avenue
Pennsauken, NJ 08109-4613
Tel: 856.356.4500
Fax: 856.356.4600
www.rcmt.com
P R E S S R E L E A S E
RCM TECHNOLOGIES, INC. REPORTS
2009 THIRD QUARTER AND YEAR-TO-DATE RESULTS
Pennsauken, NJ - November 4, 2009 -- RCM Technologies, Inc. (NASD: RCMT) today announced financial results for the thirteen and thirty-nine week periods ended September 26, 2009.
The Company announced revenues of $44.8 million for the thirteen week period ended September 26, 2009, down from $51.6 million for the thirteen week period ended September 27, 2008 (comparable prior year period). Net income for the thirteen week period ended September 26, 2009 was $0.4 million, or $0.03 per diluted share, as compared to net income of $0.6 million, or $0.04 per diluted share, for the comparable prior year period.
The Company had net operating income for the thirteen week period ended September 26, 2009 of $0.7 million, or $0.05 per diluted share, down from net operating income of $0.9 million, or $0.07 per diluted share, for the comparable prior year period.
The Company announced revenues of $140.0 million for the thirty-nine week period ended September 26, 2009, down from $155.7 million for the thirty-nine week period ended September 27, 2008 (comparable prior year period). Net income for the thirty-nine week period ended September 26, 2009 was $6.2 million, or $0.48 per diluted share, as compared to a net loss of $0.7 million, or $0.05 per diluted share, for the comparable prior year period.
The Company had net operating income for the thirty-nine week period ended September 26, 2009 of $0.4 million, or $0.03 per diluted share, up from a net operating loss of $1.3 million, or $0.10 per diluted share, for the comparable prior year period.
The Company recorded legal settlement proceeds of $9.8 million, or $5.8 million net of income tax expense, for the thirty-nine week period ended September 26, 2009. The legal settlement resulted in an increase to earnings per diluted share of $0.45. During the comparable prior year period, the Company recorded a $6.1 million bad debt charge, or $3.7 million net of income tax benefit, relating to a note receivable that the Company wrote off. The loss resulted in a reduction of earnings of $0.29 per diluted share.
Leon Kopyt, Chairman and CEO of RCM, commented: “Revenues in the third quarter for our Information Technology (IT) and General Support Services groups remained sluggish due in part to a continued weakness in enterprise IT spending and light industrial services, respectively. The Engineering group and, despite a seasonal slowdown, the Specialty Healthcare group each maintained an expected level of performance during the quarter.
While we are not satisfied with our revenue numbers, the net income results for the quarter were modestly profitable and the balance sheet showed continued improvement. For the fifth consecutive quarter, we achieved positive cash flow from operations totaling approximately $20.6 million over this time period.”
About RCM
RCM Technologies, Inc. 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 information technology and engineering services. RCM is an innovative leader in the design, development and delivery of these solutions to commercial and government sectors for more than 35 years. RCM’s offices are located in major metropolitan centers throughout North America. Additional information can be found at www.rcmt.com.
The Statements contained in this release that are not purely historical are forward-looking statements within the Private Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. Forward looking statements include, but are not limited to, those relating to demand for the Company’s services, expected demand for our services and expectations regarding our revenues, the Company's ability to continue to utilize goodwill, to continue to increase gross margins, to achieve and manage growth, to develop and market new applications and services, risks relating to the acquisition and integration of acquired businesses, the ability of the Company to consummate acquisitions as to which it executes non-binding letters of intent, demand for new services and applications, timing of demand for services, industry strength and competition and general economic factors. Investors are directed to consider such risks, uncertainties and other factors described in documents filed by the Company with the Securities and Exchange Commission.
Tables to Follow
RCM Technologies, Inc.
Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Per Share Amounts)
| | | Thirteen Week Periods Ended | |
| | | September 26, 2009 | | | September 27, 2008 | |
Revenues | | $44,751 | | | $51,617 | |
Gross profit | | 11,840 | | | 13,255 | |
Selling, general and administrative | | 10,720 | | | 11,730 | |
Depreciation and amortization | | 423 | | | 618 | |
Operating income | | 697 | | | 907 | |
Other income (expense) | | 32 | | | (74 | ) |
Income before income taxes | | 729 | | | 833 | |
Income tax expense | | 292 | | | 268 | |
Net income | | $437 | | | $565 | |
| | | | | | | |
Basic and diluted earnings per common share | | $0.03 | | | $0.04 | |
| | | Thirty-Nine Week Periods Ended | |
| | | September 26, 2009 | | | September 27, 2008 | |
Revenues | | $140,023 | | | $155,742 | |
Gross profit | | 34,361 | | | 40,703 | |
Selling, general and administrative | | 32,743 | | | 34,356 | |
Bad debt - note receivable | | - | | | 6,090 | |
Depreciation and amortization | | 1,212 | | | 1,539 | |
Operating income (loss) | | 406 | | | (1,282 | ) |
Other income (expense) | | 54 | | | (120 | ) |
Income from legal settlement | | 9,750 | | | - | |
Income (loss) before income taxes | | 10,210 | | | (1,402 | ) |
Income tax expense (benefit) | | 3,975 | | | (737 | ) |
Net income (loss) | | $6,235 | | | ($665 | ) |
| | | | | | | |
Basic and diluted earnings (loss) per common share | | $0.48 | | | ($0.05 | ) |
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(In Thousands)
| | September 26,
2009 (Unaudited) | | December 27,
2008 (Audited) | |
Cash and equivalents | $11,967 | | $815 | |
Accounts receivable, net | 44,535 | | 55,770 | |
Total current assets | 59,830 | | 61,801 | |
Goodwill and intangible assets | 8,758 | | 6,814 | |
Total assets | 77,515 | | 78,841 | |
Total current liabilities | 14,121 | | 23,490 | |
Senior debt | - | | 4,900 | |
Total liabilities | 15,014 | | 23,490 | |
Stockholders’ equity | $62,501 | | $55,351 | |
RCM Technologies, Inc.
Cash Provided by (Used in) Operating Activities
(Unaudited)
(In Thousands)
| | | Thirteen Week Periods Ended | |
| | | September 26,
2009 | | September 27,
2008 | |
Net income | | $437 | | $565 | |
Adjustments to reconcile net income to cash
provided by operating activities: | | | | | |
| | Depreciation and amortization | | 426 | | 615 | |
| | Stock based compensation | | 65 | | (52 | ) |
| | Provision for losses on (recovery from)
accounts receivable | | 100 | | (98 | ) |
| | Deferred income tax expense | | 445 | | 2 | |
Changes in operating assets and liabilities | | | | | |
| | Accounts receivable | | 3,388 | | 597 | |
| | Prepaid expenses and other current assets | | 314 | | (357 | ) |
| | Accounts payable and accrued expenses | | (879 | ) | (235 | ) |
| | Accrued payroll and related costs | | (886 | ) | (365 | ) |
| | Income taxes payable | | (299 | ) | 77 | |
| | | | | | | |
Cash provided by operating activities | | $3,111 | | $749 | |
| | | Thirty-Nine Week Periods Ended | |
| | | September 26,
2009 | | September 27,
2008 | |
Net income (loss) | | $6,235 | | ($665 | ) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | | | | | |
| | Depreciation and amortization | | 1,211 | | 1,536 | |
| | Stock based compensation | | 99 | | 145 | |
| | Provision for losses on (recovery from)
accounts receivable | | 404 | | (231 | ) |
| | Provision for losses on note receivable | | - | | 6,090 | |
| | Deferred income tax expense (benefit) | | 2,871 | | (1,658 | ) |
Changes in operating assets and liabilities | | | | | |
| | Accounts receivable | | 11,051 | | (10,282 | ) |
| | Prepaid expenses and other current assets | | (14 | ) | (876 | ) |
| | Accounts payable and accrued expenses | | (2,318 | ) | (812 | ) |
| | Accrued payroll and related costs | | (2,039 | ) | 81 | |
| | Income taxes payable | | (843 | ) | (1,299 | ) |
| | | | | | | |
Cash provided by (used in) operating activities | | $16,657 | | ($7,971 | ) |
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