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
Stanton Remer, CPA
Executive VP & CFO
Kevin D. Miller
Senior Vice President
PRESS RELEASE
RCM TECHNOLOGIES, INC. ANNOUNCES RESULTS FOR THE FIFTY-TWO WEEKS
AND THIRTEEN WEEKS ENDED DECEMBER 31, 2005
Pennsauken, NJ - March 22, 2006 -- RCM Technologies, Inc. (NNM: RCMT) today
announced financial results for the fifty-two weeks and thirteen weeks ended
December 31, 2005.
The Company announced revenues of $180.6 million for the fifty-two weeks ended
December 31, 2005, up from $169.3 million for the fifty-three weeks ended
January 1, 2005 (the same period a year ago). Net income for the fifty-two weeks
ended December 31, 2005 was $3.5 million, or $.30 per diluted share, as compared
to net income of $2.2 million, or $.19 per diluted share, for the same period a
year ago. For the fifty-two weeks ended December 31, 2005, earnings before
interest, taxes, depreciation and amortization (EBITDA) was $7.2 million, or
$.61 per diluted share, as compared to $4.5 million, or $.38 per diluted share,
for the same period a year ago. Included in EBITDA for the fifty-three weeks
ended January 1, 2005 was a charge for impairment of goodwill of $2.2 million,
or $.19 per diluted share.
The Company announced revenues of $46.8 million for the thirteen weeks ended
December 31, 2005, up from $41.7 million for the thirteen weeks ended January 1,
2005 (the same period a year ago). Net income for the thirteen weeks ended
December 31, 2005 was $818,500, or $.07 per diluted share, as compared to a net
loss of $223,900, or $.02 per diluted share, for the same period a year ago. For
the thirteen weeks ended December 31, 2005, EBITDA was $2.0 million, or $.17 per
diluted share, as compared to a loss of $533,000, or $.05 per diluted share, for
the same period a year ago. Included in EBITDA for the thirteen weeks ended
January 1, 2005 was a charge for impairment of goodwill of $2.2 million, or $.19
per diluted share.
Leon Kopyt, Chairman and CEO of RCM, commented: "We are pleased to report that
revenues and earnings increased for the fiscal year 2005 versus 2004 as well as
for the fourth quarter on a sequential and comparable year over year basis. We
expect that the recently awarded contracts will have a marginally positive
impact on the results for the first quarter of 2006 and will have a greater
contribution in the subsequent quarters. Our current business outlook remains
favorable and we believe the company's growth initiatives are succeeding."
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 Operations
(In Thousands, Except Per Share Amounts)
Fifty-Two Fifty-Three
Weeks Ended Weeks Ended
December 31, January 1,
2005 2005
---------------- ----------------
Revenues $180,618 $169,277
Gross profit 42,683 40,974
Selling, general and administrative 35,461 34,331
Depreciation and amortization 1,206 1,219
Impairment of goodwill 2,164
Other expense 221 474
Gain on foreign currency transactions (12) (25)
Income before income taxes 5,807 2,811
Income taxes 2,271 604
Net income $3,536 $2,207
Earnings per share (diluted)
Net income $.30 $.19
Thirteen Thirteen
Weeks Ended Weeks Ended
December 31, January 1,
2005 2005
---------------- ----------------
Revenues $46,822 $41,723
Gross profit 11,364 10,283
Selling, general and administrative 9,415 8,681
Depreciation and amortization 406 313
Impairment of goodwill 2,164
Other expense 50 123
Gain on foreign currency transactions (19) (29)
Income (loss) before income taxes 1,512 (969)
Income taxes (benefit) 693 (745)
Net income (loss) $819 ($224)
Earnings per share (diluted)
Net income (loss) $.07 ($.02)
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(In Thousands)
December 31, January 1,
2005 2005
---------------- ---------------
Cash and equivalents $3,761 $2,402
Accounts receivable 44,930 40,536
Working capital 33,032 29,545
Goodwill and Intangible assets 38,469 35,843
Total assets 106,773 99,388
Senior debt 3,900 4,900
Total liabilities 31,084 29,443
Stockholders' equity $75,689 $69,945
RCM Technologies, Inc.
Reconciliation of EBITDA to Net Income (Loss) and Cash Provided by
Operating Activities
EBITDA means earnings before interest, 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 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
(loss) and cash flow provided by operating activities.
Fifty-Two Weeks Fifty-Three
Ended Weeks Ended
December 31, January 1,
2005 2005
------------------ ------------------
(In Thousands)
EBITDA $7,234 $4,504
Depreciation and amortization 1,206 1,219
Interest expense, net of interest income 221 474
Income taxes 2,271 604
------------------ ------------------
Net income $3,536 $2,207
================== ==================
Earning per share (diluted)
EBITDA $.61 $.38
================== ==================
Net income $.30 $.19
================== ==================
Weighted average shares outstanding 11,732 11,680
================== ==================
Thirteen Thirteen
Weeks Ended Weeks Ended
December 31, January 1,
2005 2005
------------------ ------------------
(In Thousands)
EBITDA income (loss) $1,967 ($533)
Depreciation and amortization 405 313
Interest expense, net of interest income 50 123
Income taxes (benefit) 693 (745)
------------------ ------------------
Net income (loss) $819 ($224)
================== ==================
Earning per share (diluted)
EBITDA income (loss) $.17 ($.05)
================== ==================
Net income (loss) $.07 ($.02)
================== ==================
Weighted average shares outstanding 11,859 11,352
================== ==================
RCM Technologies, Inc.
Reconciliation of EBITDA to Net Income (Loss) and Cash Provided by
Operating Activities (Continued)
Fifty-Two Weeks Fifty-Three
Ended Weeks Ended
December 31, January 1,
2005 2005
----------------- ------------------
Net income $3,536 $2,207
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 1,206 1,219
Provision for losses on accounts receivable (70) 8
Goodwill impairment 2,164
Deferred tax assets 952 (365)
Changes in operating assets and liabilities
Accounts receivable (4,342) (4,275)
Income tax refund receivable 17
Restricted cash (276)
Prepaid expenses and other current assets (67) 595
Accounts payable and accrued expenses 1,449 (3,330)
Accrued payroll 321 1,310
Payroll and withheld taxes (232) 923
Income taxes payable 1,103 (880)
----------------- ------------------
Cash provided by (used in) operating activities $3,597 ($424)
================= ==================
Thirteen Thirteen
Weeks Ended Weeks Ended
December 31, January 1,
2005 2005
----------------- ------------------
Net income (loss) $818 ($224)
Adjustments to reconcile net income (loss) to cash
provided by operating activities:
Depreciation and amortization 405 314
Provision for losses on accounts receivable 40 (55)
Goodwill impairment 2,164
Changes in operating assets and liabilities
Accounts receivable (2,580) (2,867)
Income tax refund receivable 17
Restricted cash (71)
Deferred tax asset 871 53
Prepaid expenses and other current assets (873) (107)
Accounts payable and accrued expenses 756 177
Accrued payroll 1,360 1,200
Payroll and withheld taxes 292 197
Income taxes payable (35) (1,361)
----------------- ------------------
Cash provided by (used in) operating activities $1,000 ($509)
================= ==================