SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report July 23, 1998
(Date of earliest event reported) (July 14, 1998)
RCM TECHNOLOGIES, INC.
(exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation)
1-10245 95-1480559
(Commission File Number) (IRS Employer
Identification Number)
2500 McClellan Avenue, Pennsauken, NJ 08109-4613
(Address of principal executive offices) (Zip Code)
(609) 486 - 1777
(Registrant's telephone number, including area code)
ITEM 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired
Audited Balance Sheet - March 31, 1988
Audited Statement of Income - Year Ended March 31, 1998
Audited Statement of Changes in Stockholders' Equity
Year ended March 31, 1998
Audited Statement of Cash Flows - Year ended March 31, 1998
Notes to Financial Statements
(b) Pro forma financial information
Unaudited Pro Forma Condensed Combined Balance Sheets
April 30, 1998 and April 03, 1998
Unaudited Pro Forma Condensed Combined Statements of Income
Year Ended October 31, 1997
Twelve Months Ended December 31, 1997
Unaudited Pro Forma Condensed Combined Statements of Income
Six Months Ended April 30, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RCM Technologies, Inc.
By: /S/ Stanton Remer
Stanton Remer
Chief Financial Officer
(Principal Accounting Officer),
Treasurer and Director
Date: September 16, 1998
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial
statements give effect to the acquisition of Software Analysis & Management,
Inc. ("Samco") by RCM Technologies, Inc. ("RCM") pursuant to a purchase
transaction that was completed on July 14, 1998. This pro forma information has
been prepared utilizing the historical financial statements of RCM and Samco.
This information should be read in conjunction with the historical financial
statements and notes thereto of RCM which are incorporated by reference to RCM's
Form 10-K and the historical financial statements of Samco which are
incorporated within this Form 8-K. The pro forma financial data are provided for
comparative purposes only and do not purport to be indicative of the results
which actually would have been obtained if the acquisition had been effected on
the dates indicated, or of the results which may be obtained in the future.
The pro forma financial information is based on the purchase method of
accounting for the acquisition. The pro forma adjustments are described in the
accompanying Notes to Unaudited Pro Forma Condensed Combined Balance Sheet and
Notes to Unaudited Pro Forma Condensed Combined Statements of Income. The
Unaudited Pro Forma condensed combined statement of income for the year ended
October 31, 1997 assumes that the acquisition of Samco had occurred on November
1, 1996 (combining the results for the year ended October 31, 1997 for RCM, and
the twelve months ended December 31, 1997 for Samco). The Unaudited Pro Forma
Condensed Combined Statements of Income for the six months ended April 30, 1998
assumes that the acquisition of Samco had occurred on November 1, 1997
(combining the results for the six months ended April 30, 1998 for RCM and
Samco). The unaudited Pro Forma Condensed Combined Balance Sheet at October 31,
1997 assumes that the acquisition of Samco had occurred on October 31, 1997.
Acquisition
The consideration paid to the former shareholders of Samco consisted of $7.5
million in cash and $4.5 million of contingent consideration payable over three
years upon Samco achieving certain base levels of operating income for each of
the three twelve month periods following the purchase. An additional earn-out
payment shall be made to such former shareholders at the end of each of the
three twelve month periods commencing August 1, 1998 to the extent that
operating income exceeds these base levels.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS- Continued
Assumptions
Purchase Price Allocation
Although neither RCM nor Samco has complete information at this time as to
the fair value of Samco's individual assets and liabilities, an estimate of the
eventual allocation of the purchase price was made on the basis of available
information. The final allocation of the purchase price will be made on the
basis of appraisals and valuations which give effect to various factors
including the nature and intended future use of assets. It is not anticipated
that any change in the allocation price will be material from the pro forma
adjustments.
For the purpose of pro forma presentations, the excess purchase price over
the fair value of the net assets acquired is being amortized over an estimated
life of forty (40) years.
RCM Technologies, Inc.
Unaudited Proforma Condensed Combined Balance Sheet
Historical
Historical 04/03/98
04/30/98 Software Analysis Adj. & Proforma
RCMT & Management, Inc. Elim. Combined
---- ------------------ ----- --------
Assets:
Cash and cash equivalents $424,042 $135,669 A (7,500,000) $33,947,711
D (75,000)
B 50,456,000
C (8,233,000)
F (1,260,000)
Accounts and notes receivable 31,177,039 2,642,877 33,819,916
Prepaid expenses & other current assets 1,017,420 138,957 1,156,377
--------- ------- ---------
Total current assets 32,618,501 2,917,503 68,924,004
Property and equipment-net 1,801,253 327,690 2,128,943
Intangible assets 37,208,703 A 7,500,000 44,783,703
D 75,000
Other Assets 107,650 32,990 140,640
------- ------ -------
Total $71,736,107 $3,278,183 $40,963,000 $115,977,290
=========== ========== =========== ============
Liabilities and Shareholders' Equity:
Current Liabilities
Bank- line of credit $10,062,903 $1,260,000 C ($8,233,000) $1,829,903
G ($1,260,000)
Other current liabilities 10,694,834 1,458,429 E 3,200 12,156,463
---------- --------- ----- ----------
Total current liabilities 20,757,737 2,718,429 13,986,366
---------- --------- ----------
Long Term Liabilities
Income taxes payable 85,305 281,159
Other long term liabilities 195,854
Shareholders' equity 50,893,065 363,900 B 50,456,000 101,709,765
---------- ------- -----------
E (3,200)
Total $71,736,107 $3,278,183 $40,963,000 $115,977,290
=========== ========== =========== ============
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
(A) to record initial cash consideration $7,500,000
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(B) to record proceeds of June 3, 1998 Public Offering $50,456,000
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(C) to reflect reduction of Bank Debt from Public Offering $8,233,000
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(D) to reflect estimated acquisition costs $75,000
(E) to accrue for payment of Net Working Capital, as defined $3,200
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(F) to reflect payment of note payable prior to acquisition $1,260,000
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RCM TECHNOLOGIES, INC. AND SOFTWARE ANALYSIS & MANAGEMENT, INC. ("SAMCO")
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED OCTOBER 31, 1997
Historical Pro Forma
---------- ---------
RCM
Technologies, Inc. "SAMCO"
10/31/97 12/31/97
-------- --------
Adjustments Combined
Revenues $113,959,093 18,854,937 132,814,030
------------ ---------- -----------
Cost and expenses
Cost of services 86,832,348 13,746,983 100,579,331
Selling, general and administrative 18,068,899 4,929,290 (150,000) A 21,040,189
(1,808,000) B
Interest expense (income) 184,645 124,609 (25,000) B 284,254
Depreciation and amortization 572,279 60,882 195,000 C 828,161
------- ------ ------- -------
Total 105,658,171 18,861,764 (1,788,000) 122,731,935
----------- ---------- -----------
Income before income taxes 8,300,922 (6,827) 1,788,000 10,082,095
Income taxes 3,460,989 3,957 750,960 D 4,215,906
--------- ----- ------- ---------
Income from continuing operations 4,839,933 (10,784) 1,037,040 5,866,189
Loss from discontinued operations (362,500) (362,500)
--------- ---------
Net Income 4,477,433 (10,784) 1,037,040 5,503,689
========= ======== ========= =========
Net income per common share $0.70 $0.87
===== =====
Average number of common
shares outstanding 6,361,571 6,361,571
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NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
(A) to reflect reduction of expenses attributable to
consolidation of administrative overhead 150,000
(B) to eliminate excess salaries to principals 1,808,000
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(C) to eliminate excess interest expense 25,000
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(B) to provide for amortization on excess purchase price over net assets
acquired based an estimated life of 40 years 195,000
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(D) to tax effect adjustments (750,960)
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RCM TECHNOLOGIES, INC. AND SOFTWARE ANALYSIS & MANAGEMENT, INC. ("SAMCO")
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED APRIL 30, 1998
Historical Pro Forma
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RCM
Technologies, Inc. "SAMCO"
Adjustments Combined
Revenues $86,174,418 9,270,433 95,444,851
----------- --------- ----------
Cost and expenses
Cost of services 65,414,594 6,843,682 72,258,276
Selling, general and administrative 13,140,370 2,211,631 (150,000) A 14,298,001
(904,000) B
Interest expense (income) 190,624 49,495 (15,000) B 225,119
Depreciation and amortization 593,006 5,414 97,500 C 695,920
------- ----- ------ -------
Total 79,338,594 9,110,222 (971,500) 87,477,316
---------- --------- ----------
Income before income taxes 6,835,824 160,211 971,500 7,967,535
Income taxes 2,839,672 65,679 408,030 D 3,313,381
--------- ------ ------- ---------
Net Income 3,996,152 94,532 563,470 4,654,154
========= ====== ======= =========
Net income per common share $0.48 $0.56
===== =====
Average number of common
shares outstanding 8,288,012 8,288,012
========= =========
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
(A) to reflect reduction of expenses attributable to
consolidation of administrative overhead 150,000
(B) to eliminate excess salaries to principals 904,000
=======
(C) to eliminate excess interest expense 15,000
======
(B) to provide for amortization on excess purchase price over net assets
acquired based an estimated life of 40 years 97,500
======
(D) to tax effect adjustments (408,030)
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