EX-99 2 pressrel80404.txt PRESS RELEASE AUGUST 4, 2004 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 TWENTY-SEVEN WEEKS AND FOURTEEN WEEKS ENDED JULY 3, 2004 August 4, 2004 -- RCM Technologies, Inc. (NNM: RCMT) today announced financial results for the twenty-seven weeks and fourteen weeks ended July 3, 2004. The Company announced revenues of $86.6 million for the twenty-seven weeks ended July 3, 2004, down from $105.9 million for the twenty-six weeks ended June 28, 2003 (same period a year ago). Net income for the twenty-seven weeks ended July 3, 2004 was $1.7 million, or $.14 per diluted share, as compared to net income of $3.3 million, or $.31 per diluted share, for the twenty-six weeks ended June 28, 2003. For the twenty-seven weeks ended July 3, 2004, earnings before interest, income taxes, depreciation and amortization, or EBITDA, was $3.4 million, or $.29 per diluted share, as compared to $5.9 million, or $.55 per diluted share, for the twenty-six weeks ended June 28, 2003. Revenues were $45.3 million for the fourteen weeks ended July 3, 2004, down from $55.2 million for the thirteen weeks ended June 28, 2003 (same period a year ago). Net income for the fourteen weeks ended July 3, 2004 was $869,000, or $.07 per diluted share, as compared to net income of $1.9 million, or $.18 per diluted share, for the thirteen weeks ended June 28, 2003. For the fourteen weeks ended July 3, 2004, EBITDA was $1.8 million, or $.15 per diluted share, as compared to $3.2 million, or $.30 per diluted share, for the thirteen weeks ended June 28, 2003. Leon Kopyt, Chairman and CEO of RCM, commented: "Our near term growth outlook remains unchanged as we operate in a challenging transitional period for our industry. Consequently, we are continuing to assess our business strategy so that we may effectively respond to a constantly changing market environment. We remain focused on internal growth by exploring new opportunities and strategic partnerships that supplement and complement our service offerings, thereby increasing business value to our clients. Our sector's prospects for next year appear to be more favorable." 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)
Twenty-Seven Twenty-Six Weeks Ended Weeks Ended July 3, 2004 June 28, 2003 ------------------ ----------------- Revenues $86,622 $105,869 Gross profit 20,727 22,199 Selling, general and administrative 17,327 16,474 Depreciation and amortization 600 604 Other (expense) income (240) 58 Income before income taxes 2,560 5,179 Income taxes 894 1,890 Net earnings $1,665 $3,289 Earnings per share (diluted) Net income $.14 $.31
Fourteen Weeks Thirteen Weeks Ended Ended July 3, 2004 June 28, 2003 ------------------ ----------------- Revenues $45,349 $55,219 Gross profit 10,699 11,394 Selling, general and administrative 8,891 8,274 Depreciation and amortization 300 308 Other (expense) income (125) 77 Income before income taxes 1,383 2,889 Income taxes 514 954 Net earnings $869 $1,935 Earnings per share (diluted) Net income $.07 $.18
RCM Technologies, Inc. Summary Consolidated Balance Sheet Data (Unaudited) (In Thousands)
July 3, December 27, 2004 2003 ---------------- --------------- Cash and equivalents $2,436 $5,152 Accounts receivable 37,879 36,269 Working capital 25,894 23,882 Intangible assets 38,042 38,076 Total assets 98,393 100,385 Senior debt 6,000 7,300 Total liabilities 29,623 33,215 Stockholders' equity $68,771 $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.
Twenty-Seven Twenty-Six Weeks Ended Weeks Ended July 3, 2004 June 28, 2003 ------------------ ----------------- (In Thousands) --------------------------------------- EBITDA $3,392 $5,860 Depreciation and amortization (600) (604) Interest expense, net of interest income (233) (77) Income taxes (894) (1,890) ------------------ ----------------- Net income $1,665 $3,289 ================== ================= Net income $1,665 $3,289 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 600 604 Provision for losses on accounts receivable (30) 221 Changes in operating assets and liabilities Receivables (1,580) (9,693) Deferred tax asset 2,460 Prepaid expenses and other current assets (208) 639 Accounts payable and accrued expenses (3,054) 3,521 Accrued compensation 912 1,216 Payroll and withheld taxes 667 306 Income taxes payable (136) (289) ------------------ ----------------- Cash (used in) provided by operating activities ($1,164) $2,274 ================== =================
Fourteen Weeks Thirteen Weeks Ended Ended July 3, 2004 June 28, 2003 ---------------- ------------------ (In Thousands) ------------------------------------- ---------------- ------------------ EBITDA $1,802 $3,222 Depreciation and amortization (300) ( 308) Interest expense, net of interest income (118) ( 26) Income taxes (515) ( 953) ---------------- ------------------ Net income $869 $1,935 ================ ================== Net income $869 $1,935 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 300 308 Provision for losses on accounts receivable (61) 205 Changes in operating assets and liabilities Receivables (546) ( 5,275) Deferred tax asset 1,980 Prepaid expenses and other current assets (315) ( 404) Accounts payable and accrued expenses (879) ( 204) Accrued compensation (457) ( 807) Payroll and withheld taxes 614 101 Income taxes payable 52 ( 39) ---------------- ------------------ Cash used in operating activities ($423) ( $2,200) ================ ==================
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