P R E S S R E L E A S E
RCM TECHNOLOGIES, INC. ANNOUNCES FIRST QUARTER 2005 RESULTS
May 11, 2005 -- RCM Technologies, Inc. (NNM: RCMT) today announced
financial results for the first quarter ended April 2, 2005.
The Company announced revenues of $44.1 million for the three months ended April
2, 2005, up from $41.3 million for the three months ended March 27, 2004 (same
period a year ago). Net income for the three months ended April 2, 2005 was
$833,000, or $0.07 per diluted share, as compared to net income of $796,000, or
$0.07 per diluted share, for the same period a year ago. For the three months
ended April 2, 2005, earnings before interest, income taxes, depreciation and
amortization was $1.7 million, or $0.15 per diluted share, as compared to $1.6
million, or $0.13 per diluted share, for the same period a year ago.
Leon Kopyt, Chairman and CEO of RCM, commented: "We are pleased to report modest
revenue growth on a sequential and comparable prior year basis for the first
quarter. Although our near term outlook remains guarded, we believe that a
period of more sustainable growth is reasonably likely over the longer term. We
continue to prudently manage operations, effectively strengthen our presence in
key vertical markets, and seek to expand 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 April 2, 2005 and March 27, 2004
(In Thousands, Except Per Share Amounts)
2005 2004
------------------ ---------------
Revenues $44,082 $41,273
Gross profit 10,108 10,027
Selling, general and administrative 8,406 8,436
Depreciation and amortization 260 299
Other expense 128 116
Income before income taxes 1,315 1,176
Income taxes 482 380
Net income $833 $796
Earnings per share (basic and diluted)
Net income $.07 $.07
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
April 2, January 1,
2005 2005
---------------- -----------------
Cash and equivalents $1,782 $2,402
Accounts receivable 41,775 40,536
Working capital 30,391 29,545
Goodwill 35,843 35,843
Total assets 98,186 98,101
Senior debt 6,400 4,900
Total liabilities 27,393 28,156
Stockholders' equity $70,793 $69,945
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, interest
expense, income taxes, depreciation and amortization. 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 EBITDA 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, nor 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)
April 2, March 27,
---------------- ---------------
2005 2004
---------------- ---------------
EBITDA $1,699 $1,590
Depreciation and amortization (260) (299)
Interest expense, net of interest income (124) (115)
Income taxes (482) (380)
---------------- ---------------
Net income $833 $796
================ ===============
Net income $833 $796
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 260 299
Provision for losses on accounts
receivable (9) 31
Changes in operating assets and liabilities
Accounts receivable (1,230) (1,034)
Income tax refund receivable
Deferred tax asset
Prepaid expenses and other current assets 536 789
Accounts payable and accrued expenses (339) (2,174)
Accrued payroll (1,405) 682
Payroll and withheld taxes (687) 59
Income taxes payable 168 (188)
---------------- ---------------
Cash used in operating activities ($1,873) ($740)
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