RCM Technologies, Inc. Tel: 856.486.1777 Corporate Contacts:
2500 McClellan Avenue Fax: 856.488.8833 Leon Kopyt
Pennsauken, NJ 08109-4613 info@rcmt.com Chairman, President & CEO
www.rcmt.com Brian Delle Donne
Chief Operating Officer
Stanton Remer, CPA
Chief Financial Officer
Kevin D. Miller
Senior Vice President
P R E S S R E L E A S E
RCM TECHNOLOGIES, INC. ANNOUNCES
RESULTS FOR SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2003
August xx, 2003 -Pennsauken, NJ - RCM Technologies, Inc. (NNM: RCMT) today
announced financial results for the six months and three months
ended June 30, 2003.
The Company announced revenues of $105.9 million for the six months ended June
30, 2003, up from $89.3 million for the same period a year ago. Net income for
the six months ended June 30, 2003 was $3.3 million, or $.31 per share, as
compared to net income of $4.3 million, or $0.40 per share, for the same period
a year ago. For the six months ended June 30, 2003, earnings before interest,
taxes, depreciation and amortization was $5.7 million, or $.54 per diluted
share, as compared to $7.4 million, or $.69 per diluted share, for the same
period a year ago.
The Company announced revenues of $55.2 million for the three months ended June
30, 2003, up from $44.4 million for the same period a year ago. Net income for
the three months ended June 30, 2003 was $1.9 million, or $.18 per share, as
compared to net income of $2.1 million, or $0.20 per share, for the same period
a year ago. For the three months ended June 30, 2003, earnings before interest,
taxes, depreciation and amortization was $3.1 million, or $.29 per diluted
share, as compared to $3.4 million, or $.31 per diluted share, for the same
period a year ago.
Leon Kopyt, Chairman and CEO of RCM, commented: "We are pleased to report a
moderate increase in revenues for the second consecutive quarter and are
encouraged by the growing public and business sentiment that the economy is
poised for a long overdue recovery. Additionally, we are hopeful that this
positive change in the markets will be a catalyst for increased spending by many
of our clients. While demand for our services has grown over the past two
quarters, we are tempering our enthusiasm until there are more substantive signs
of sustainable economic growth and expansion."
About RCM
RCM Technologies, Inc., established in 1971, 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 various industries.
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, 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)
Six Months Ended June 30,
---------------------------------
2003 2002
------------- --------------
Revenues $105,869 $89,272
Gross profit 22,199 24,200
Selling, general and administrative 16,474 16,768
Depreciation and amortization 604 620
Other income 58 36
Income from continuing operations before income taxes 5,179 6,848
Income taxes 1,890 2,574
Income from continuing operations 3,289 4,274
Loss from discontinued operations, net of taxes 16
Net earnings $ 3,289 $4,258
Earnings per share (diluted)
Income from continuing operations $.31 $.40
Loss from discontinued operations
Net income $.31 $.40
Three Months Ended June 30,
---------------------------------
2003 2002
------------- ---------------
Revenues $55,219 $44,378
Gross profit 11,394 11,738
Selling, general and administrative 8,274 8,336
Depreciation and amortization 308 313
Other income 77 303
Income from continuing operations before income taxes 2,889 3,392
Income taxes 954 1,272
Income from continuing operations 1,935 2,120
Loss from discontinued operations, net of taxes 7
Net earnings $1,935 $2,113
Earnings per share (diluted)
Income from continuing operations $.18 $.20
Loss from discontinued operations
Net income $.18 $.20
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
June 30, December 31,
2003 2002
---------------- ---------------
Cash and equivalents $ 479 $ 2,845
Accounts receivable 42,499 31,754
Working capital 18,694 16,516
Intangible assets 38,097 36,753
Total assets 94,909 89,977
Senior debt 3,300 7,420
Total liabilities 31,365 30,731
Stockholders' equity $63,544 $59,246
RCM Technologies, Inc.
Reconciliation of EBITDA to Net Income and Cash Provided by Operating Activities
(Unaudited)
As used in this report, EBITDA means earnings before interest, income taxes,
depreciation, amortization, extraordinary charges, non-recurring charges and
other non-cash items. We believe that EBITDA, as presented, represents a useful
measure of assessing the performance of our operating activities, as it reflects
our earnings trends without the impact of certain non-cash and unusual charges
or income. EBITDA is also used by our creditors in assessing debt covenant
compliance. We understand that, although security analysts frequently use EBITDA
in the evaluation of companies, it is not necessarily comparable to other
similarly titled captions of other companies due to potential inconsistencies in
the method of calculation. EBITDA is not intended as an alternative to cash flow
provided by operating activities as a measure of liquidity, as an alternative to
net income as an indicator of our operating performance, nor as an alternative
to any other measure of performance in conformity with generally accepted
accounting principles. The following is a reconciliation of EBITDA to both net
income and cash flow provided by operating activities.
Six Months
Ended June 30,
(In Thousands)
2003 2002
---------- -----------
EBITDA $5,725 $7,432
Depreciation and amortization ( 604) ( 620)
Interest expense, net of interest income ( 77) 31
Gain on foreign currency transactions 135 5
Income taxes ( 1,890) ( 2,574)
Loss from discontinued operations ( 16)
---------- -----------
Net income $3,289 $4,258
========== ===========
Net income $3,289 $4,258
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 604 620
Provision for losses on accounts receivable 221 ( 327)
Changes in operating assets and liabilities
Receivables ( 9,693) ( 2,832)
Deferred tax asset 2,460 7,688
Prepaid expenses and other current assets 639 ( 823)
Accounts payable and accrued expenses 3,521 ( 2,242)
Accrued payroll 1,216 ( 165)
Payroll and withheld taxes 306 238
Income taxes payable ( 289) 3,364
---------- -----------
Cash provided by operating activities $2,274 $9,779
========== ===========
Three Months
Ended June 30,
(In Thousands)
2003 2002
------------ ------------
EBITDA $3,120 $3,403
Depreciation and amortization ( 308) ( 312)
Interest expense, net of interest income ( 26) 299
Gain on foreign currency transactions 102 2
Income taxes ( 953) ( 1,272)
Loss from discontinued operations ( 7)
------------ ------------
Net income $1,935 $2,113
============ ============
Net income $1,935 $2,113
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 308 313
Provision for losses on accounts receivable 205 ( 210)
Changes in operating assets and liabilities
Receivables ( 5,275) ( 10,690)
Deferred tax asset 1,980 6,572
Prepaid expenses and other current assets ( 404) ( 1,671)
Accounts payable and accrued expenses ( 204) 125
Accrued payroll ( 807) ( 1,499)
Payroll and withheld taxes 101 281
Income taxes payable ( 39) 5,563
------------ ------------
Cash provided by (used in) operating activities ( $2,200) $897
============ ============