RCM Technologies, Inc. Tel: 856.486.1777
2500 McClellan Avenue Fax: 856.488.8833 Corporate Contacts:
Pennsauken, NJ 08109-4613 info@rcmt.com Leon Kopyt
www.rcmt.com Chairman, President & CEO
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 NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 2003
November 5, 2003 -Pennsauken, NJ - RCM Technologies, Inc. (Nasdaq: RCMT) today
announced financial results for the nine months and three months ended September
30, 2003.
The Company announced revenues of $161.1 million for the nine months ended
September 30, 2003, up from $133.0 million for the same period a year ago. Net
income for the nine months ended September 30, 2003 was $5.1 million, or $.48
per diluted share, as compared to net income of $5.2 million, or $0.48 per
diluted share, for the same period a year ago. For the nine months ended
September 30, 2003, earnings before interest, taxes, depreciation and
amortization was $8.9 million, or $.83 per diluted share, as compared to $11.0
million, or $1.02 per diluted share, for the same period a year ago.
The Company announced revenues of $55.2 million for the three months ended
September 30, 2003, up from $43.7 million for the same period a year ago. Net
income for the three months ended September 30, 2003 was $1.8 million, or $.17
per diluted share, as compared to net income of $1.0 million, or $.09 per
diluted share, for the same period a year ago. For the three months ended
September 30, 2003, earnings before interest, taxes, depreciation and
amortization was $3.2 million, or $.30 per diluted share, as compared to $3.6
million, or $.33 per diluted share, for the same period a year ago.
Leon Kopyt, Chairman and CEO of RCM, commented: "The evidence continues to
accumulate that prospects for growth in demand are recovering amidst the
background of residual volatility and uncertainty. Consequently, we are
optimistic, but realistic in maintaining our business outlook in a fragmented
environment for technology spending. We remain focused on our "fiscal fitness"
in building enterprise and shareholder value."
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 30 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, 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)
Nine Months Ended September 30,
---------------------------------
2003 2002
------------- --------------
Revenues $161,094 $133,014
Gross profit 33,743 36,066
Selling, general and administrative 24,810 25,064
Depreciation and amortization 913 943
Other expense 64 104
Income from continuing operations before income taxes 7,956 9,955
Income taxes 2,850 3,766
Income from continuing operations 5,106 6,189
Loss from discontinued operations, net of taxes 965
Net earnings $5,106 $5,224
Earnings per share (diluted)
Income from continuing operations $.48 $.57
Loss from discontinued operations .09
Net income $.48 $.48
Three Months Ended September 30,
---------------------------------
2003 2002
------------- ---------------
Revenues $55,224 $43,743
Gross profit 11,545 11,866
Selling, general and administrative 8,335 8,296
Depreciation and amortization 310 323
Other expense 123 141
Income from continuing operations before income taxes 2,777 3,106
Income taxes 960 1,192
Income from continuing operations 1,817 1,914
Loss from discontinued operations, net of taxes 948
Net earnings $1,817 $966
Earnings per share (diluted)
Income from continuing operations $.17 .$18
Loss from discontinued operations .09
Net income $.17 $.09
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
September 30, December 31,
2003 2002
---------------- ---------------
Cash and equivalents $ 4,796 $ 2,845
Accounts receivable 42,189 31,754
Working capital 21,823 16,516
Intangible assets 38,086 36,753
Total assets 103,326 89,977
Senior debt 7,300 7,420
Total liabilities 38,035 30,731
Stockholders' equity $65,291 $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.
Nine Months
Ended September 30,
(In Thousands)
2003 2002
---------- -----------
EBITDA $8,934 $11,002
Depreciation and amortization 914 942
Interest expense, net of interest income 180 70
(Gain) loss on foreign currency transactions (116) 35
Income taxes 2,850 3,766
Loss from discontinued operations 965
---------- -----------
Net income $5,106 $5,224
========== ===========
Earning per share (diluted)
EBITDA $.83 $1.02
============== ==============
Net income $.48 $.48
============== ==============
Weighted average shares outstanding 10,714,649 10,794,720
============== ==============
Income from continuing operations $5,106 $6,189
Adjustments to reconcile net income to cash
provided by operating activities:
Loss from discontinued operations 964
Depreciation and amortization 914 942
Provision for losses on accounts receivable 311 (194)
Changes in operating assets and liabilities
Accounts receivable (10,745) 6,609
Other receivables 3,733 6,810
Restricted cash (8,296)
Deferred tax asset 3,069 7,735
Prepaid expenses and other current assets 1,268 (1,216)
Accounts payable and accrued expenses 3,885 (2,137)
Accrued payroll 3,205 1,367
Payroll and withheld taxes 397 24
Income taxes payable (63) 2,078
---------- -----------
Cash provided by operating activities $2,784 $29,171
========== ===========
Three Months
Ended September 30,
(In Thousands)
2003 2002
------------ ------------
EBITDA $3,209 $3,570
Depreciation and amortization 310 322
Interest expense, net of interest income 103 101
Loss on foreign currency transactions 19 40
Income taxes 960 1,192
Loss from discontinued operations 949
------------ ------------
Net income $1,817 $966
============ ============
Earning per share (diluted)
EBITDA $.30 $.33
=============== ==============
Net income $.17 $.09
=============== ==============
Weighted average shares outstanding 10,799,857 10,764,321
=============== ==============
Income from continuing operations $1,817 $1,914
Adjustments to reconcile net income to cash
provided by operating activities:
Loss from discontinued operations 948
Depreciation and amortization 310 322
Provision for losses on accounts receivable 90 133
Changes in operating assets and liabilities
Accounts receivable 740 9,441
Other receivables 3,733 6,810
Deferred tax asset 609 48
Restricted cash (8,296)
Prepaid expenses and other current assets 629 (393)
Accounts payable and accrued expenses (1,428) 105
Accrued payroll 1,989 1,532
Payroll and withheld taxes 91 (214)
Income taxes payable 226 (1,253)
------------ ------------
Cash provided by (used in) operating activities $510 $19,393
============ ============
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