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 FORTY WEEKS
AND THIRTEEN WEEKS ENDED OCTOBER 2, 2004
November 10, 2004 -- RCM Technologies, Inc. (NNM: RCMT) today announced
financial results for the forty weeks and thirteen weeks ended October 2, 2004.
The Company announced revenues of $127.6 million for the forty weeks ended
October 2, 2004, down from $161.1 million for the thirty-nine weeks ended
September 27, 2003 (same period a year ago). Net income for the forty weeks
ended October 2, 2004 was $2.4 million, or $.21 per diluted share, as compared
to net income of $5.1 million, or $.48 per diluted share, for the thirty-nine
weeks ended September 27, 2003. For the forty weeks ended October 2, 2004,
earnings before interest, income taxes, depreciation and amortization, or
EBITDA, was $5.0 million, or $.43 per diluted share, as compared to $9.1
million, or $.84 per diluted share, for the thirty-nine weeks ended September
27, 2003.
Revenues were $40.9 million for the thirteen weeks ended October 2, 2004, down
from $55.2 million for the thirteen weeks ended September 27, 2003 (same period
a year ago). Net income for the thirteen weeks ended October 2, 2004 was
$766,000, or $.07 per diluted share, as compared to net income of $1.8 million,
or $.17 per diluted share, for the thirteen weeks ended September 27, 2003. For
the thirteen weeks ended October 2, 2004, EBITDA was $1.6 million, or $.14 per
diluted share, as compared to $3.2 million, or $.30 per diluted share, for the
thirteen weeks ended September 27, 2003.
Leon Kopyt, Chairman and CEO of RCM, commented: "Revenues for the third quarter
continue to reflect softness in technology spending as well as deliberate
decision-making by our customers. We are continuing to concentrate on marketing
and sales efforts relating to new initiatives and service offerings. Based on
the current level of prospective business opportunities, we hope to begin
building positive momentum next year."
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)
Thirty-Nine
Forty Weeks Ended Weeks Ended
October 2, 2004 September 27,
2003
------------------ -----------------
Revenues $127,555 $161,094
Gross profit 30,691 33,743
Selling, general and administrative 25,649 24,810
Depreciation and amortization 905 913
Other expense 357 64
Income before income taxes 3,780 7,956
Income taxes 1,349 2,850
Net earnings $2,431 $5,106
Earnings per share (diluted)
Net income $.21 $.48
Thirteen Weeks
Thirteen Weeks Ended
Ended September 27,
October 2, 2004 2003
------------------ -----------------
Revenues $40,933 $55,224
Gross profit 9,964 11,545
Selling, general and administrative 8,322 8,335
Depreciation and amortization 305 310
Other income 116 123
Income before income taxes 1,221 2,777
Income taxes 455 960
Net earnings $766 $1,817
Earnings per share (diluted)
Net income $.07 $.17
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
October 2, December 27,
2004 2003
---------------- ---------------
Cash and equivalents $2,916 $5,152
Accounts receivable 37,614 36,269
Working capital 27,297 23,882
Intangible assets 38,024 38,076
Total assets 97,146 99,704
Senior debt 4,900 7,300
Total liabilities 27,525 32,533
Stockholders' equity $69,944 $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 and amortization. We believe that EBITDA, as presented,
represents a useful measure of assessing the performance of our operating
activities. 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.
Thirty-Nine
Forty Weeks Ended Weeks Ended
October 2, 2004 September 27,
2003
------------------ -----------------
(In Thousands)
---------------------------------------
EBITDA $5,037 $9,050
Depreciation and amortization 905 914
Interest expense, net of interest income 352 180
Income taxes 1,349 2,850
------------------ -----------------
Net income $2,431 $5,106
================== =================
Net income $2,431 $5,106
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 905 914
Provision for losses on accounts receivable 63 311
Changes in operating assets and liabilities
Receivables (1,408) (7,012)
Restricted Cash (8,296)
Deferred tax asset 3,069
Prepaid expenses and other current assets 702 1,268
Accounts payable and accrued expenses (3,507) 3,885
Accrued compensation 110 3,205
Payroll and withheld taxes 726 397
Income taxes payable 63 (63)
------------------ -----------------
Cash provided by operating activities $85 $2,784
================== =================
Thirteen Weeks Thirteen Weeks
Ended Ended
October 2, 2004 September 27,
2003
---------------- ------------------
(In Thousands)
-------------------------------------
EBITDA $1,645 $3,190
Depreciation and amortization 305 310
Interest expense, net of interest income 119 103
Income taxes 455 960
---------------- ------------------
Net income $766 $1,817
================ ==================
Net income $766 $1,817
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 305 310
Provision for losses on accounts receivable 93 90
Changes in operating assets and liabilities
Receivables 172 4,473
Deferred tax asset 609
Restricted Cash (8,296)
Prepaid expenses and other current assets 910 629
Accounts payable and accrued expenses (453) (1,428)
Accrued compensation (802) 1,989
Payroll and withheld taxes 59 91
Income taxes payable 199 226
---------------- ------------------
Cash provided by operating activities $1,249 $510
================ ==================