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 Stanton Remer, CPA
EVP & 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 THE THIRTEEN WEEKS
ENDED APRIL 1, 2006
May 3, 2006 -- RCM Technologies, Inc. (NNM: RCMT) today announced financial
results for the thirteen weeks ended April 1, 2006.
The Company announced revenues of $47.1 million for the thirteen weeks ended
April 1, 2006, up from $44.1 million for the thirteen weeks ended April 2, 2005
(same period a year ago). Net income for the thirteen weeks ended April 1, 2006
was $811,000, or $0.07 per diluted share, as compared to net income of $833,000,
or $0.07 per diluted share, for the same period a year ago. For the thirteen
weeks ended April 1, 2006, earnings before interest, income taxes, depreciation
and amortization ("EBITDA") was $1.9 million, or $0.16 per diluted share, as
compared to $1.7 million, or $0.15 per diluted share, for the same period a year
ago. Included in the EBITDA for the thirteen weeks ended April 1, 2006 was a
$305,000 charge, or $.03 per diluted share for stock based compensation expense,
which resulted from the implementation of Statement of Financial Accounting
Standard No.123R, "Share-Based Payment" on January 1, 2006.
Leon Kopyt, Chairman and CEO of RCM, commented: "We are pleased to report a
moderate increase in revenues of approximately 7%, a rise in EBITDA of 14% and
an improvement in gross profit of 19% for the first quarter of 2006 as compared
to the first quarter of 2005. We expect the ramping up of existing projects to
gradually contribute to our operational performance in subsequent quarters.
Additionally, we believe the current volume of proposal activity continues to
reflect an environment of business growth and further expansion of market
share."
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)
Thirteen Weeks Ended April 1, 2006 and April 2, 2005
(In Thousands, Except Per Share Amounts)
2006 2005
------------------ ---------------
Revenues $47,054 $44,082
Gross profit (1) 12,031 10,108
Selling, general and administrative (2) 10,086 8,406
Depreciation and amortization 353 260
Interest expense, net 65 124
Loss on foreign currency transactions 13 4
Income before income taxes 1,514 1,315
Income taxes 703 482
Net income $811 $833
Earnings per share (basic and diluted)
Net income $.07 $.07
<FN>
(1) Reflects stock based compensation expense of $12,000 included in cost of
services for the thirteen weeks ended April 1, 2006.
(2) Includes stock based compensation expense of $293,000 for the thirteen
weeks ended April 1, 2006.
</FN>
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
April 1, December 31,
2006 2005
---------------- -----------------
Cash and equivalents $4,457 $3,761
Accounts receivable 49,278 44,930
Working capital 33,806 33,032
Goodwill and Intangible assets 38,397 38,469
Total assets 111,715 106,773
Senior debt 7,100 3,900
Total liabilities 34,827 31,084
Stockholders' equity $76,887 $75,689
RCM Technologies, Inc.
Reconciliation of EBITDA to Net Income and Cash Provided by Operating Activities
(Unaudited)
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 and
cash flow provided by operating activities.
Thirteen Weeks Ended
(In Thousands)
Apri1 1, April 2,
---------------- ---------------
2006 2005
---------------- ---------------
EBITDA (1) $1,932 $1,699
Depreciation and amortization 353 (260)
Interest expense, net of interest income 65 (124)
Income taxes 703 (482)
---------------- ---------------
Net income $811 $833
================ ===============
Net income $811 $833
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 353 260
Stock based compensation expense 305
Provision for losses on accounts
Receivable (6) (9)
Changes in operating assets and liabilities
Accounts receivable (4,342) (1,230)
Restricted cash (86)
Prepaid expenses and other current assets 613 536
Accounts payable and accrued expenses 2,125 (339)
Accrued compensation (467) (1,405)
Payroll and withheld taxes 27 (687)
Income taxes payable (1,142) 168
---------------- ---------------
Cash used in operating activities ($1,809) ($1,873)
================ ===============
<FN>
(1) Includes stock based compensation expense of $305,000 for the thirteen
weeks ended April 1, 2006.
</FN>
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