RCM Technologies, Inc. Tel: 856.486.1777
2500 McClellan Avenue Fax: 856.488.8833
Pennsauken, NJ 08109-4613 info@rcmt.com
www.rcmt.com
P R E S S R E L E A S E
RCM TECHNOLOGIES, INC. ANNOUNCES FIRST QUARTER 2004 RESULTS
May 5, 2004 -- RCM Technologies, Inc. (NNM: RCMT) today announced financial
results for the first quarter ended March 27, 2004.
The Company announced revenues of $41.3 million for the three months ended March
27, 2004, down from $50.7 million for the three months ended March 29, 2003
(same period a year ago). Net income for the three months ended March 27, 2004
was $796,000, or $0.07 per diluted share, as compared to net income of $1.4
million, or $0.13 per diluted share, for the same period a year ago. For the
three months ended March 27, 2004, earnings before interest, income taxes,
depreciation and amortization was $1.6 million, or $0.13 per diluted share, as
compared to $2.6 million, or $0.24 per diluted share, for the same period a year
ago.
Leon Kopyt, Chairman and CEO of RCM, commented: "The recent completion of two
major contracts continues to have impact on our financial performance. While we
are confident in our long term growth strategy, we view the current period as
transitional, and hope to see improved results over the next few quarters as the
strength of our pipeline contributes to the realization of new business
opportunities."
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)
Three Months Ended March 27, 2004 and March 29, 2003
(In Thousands, Except Per Share Amounts)
2004 2003
------------------ ---------------
Revenues $41,273 $50,650
Gross profit 10,027 10,805
Selling, general and administrative 8,436 8,200
Depreciation and amortization 299 296
Other expense 116 19
Income before income taxes 1,176 2,290
Income taxes 380 936
Net income $796 $1,354
Earnings per share (basic and diluted)
Net income $.07 $.13
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
March 27, December 27,
2004 2003
---------------- -----------------
Cash and equivalents $2,455 $5,152
Accounts receivable 37,273 36,269
Working capital 24,819 23,882
Intangible assets 38,059 38,076
Total assets 97,697 100,385
Senior debt 5,500 7,300
Total liabilities 29,794 33,215
Stockholders' equity $67,903 $67,170
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 (used in) provided by operating activities.
Three Months Ended
(In Thousands)
March 27, March 29,
---------------- ---------------
2004 2003
---------------- ---------------
EBITDA $1,591 $2,605
Depreciation and amortization (299) ( 296)
Interest expense, net of interest income (116) ( 19)
Income taxes (380) ( 936)
---------------- ---------------
Net income $796 $1,354
================ ===============
Net income $796 $1,354
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 299 296
Provision for losses on accounts
receivable 31 16
Changes in operating assets and liabilities
Accounts receivable (1,034) ( 6,675)
Income tax refund receivable 2,257
Deferred tax asset 480
Prepaid expenses and other current assets 789 1,043
Accounts payable and accrued expenses (2,174) 3,725
Accrued payroll 682 2,023
Payroll and withheld taxes 59 205
Income taxes payable (188) ( 250)
---------------- ---------------
Cash (used in) provided by operating activities ($740) $4,474
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