EX-99 2 pressrelease081005.txt PRESS RELEASE 08/10/05 P R E S S R E L E A S E RCM TECHNOLOGIES, INC. ANNOUNCES RESULTS FOR TWENTY-SIX WEEKS AND THIRTEEN WEEKS ENDED JULY 2, 2005 August 10, 2005 -- RCM Technologies, Inc. (NNM: RCMT) today announced financial results for the twenty-six weeks and thirteen weeks ended July 2, 2005. The Company announced revenues of $90.4 million for the twenty-six weeks ended July 2, 2005, up from $86.6 million for the twenty-seven weeks ended July 3, 2004 (same period a year ago). Net income for the twenty-six weeks ended July 2, 2005 was $2.0 million, or $.17 per diluted share, as compared to net income of $1.7 million, or $.14 per diluted share, for the twenty-seven weeks ended July 3, 2004. For the twenty-six weeks ended July 2, 2005, earnings before interest, income taxes, depreciation and amortization, or EBITDA, was $3.8 million, or $.33 per diluted share, as compared to $3.4 million, or $.29 per diluted share, for the same period a year ago. Revenues were $46.3 million for the thirteen weeks ended July 2, 2005, up from $45.3 million for the fourteen weeks ended July 3, 2004 (same period a year ago). Net income for the thirteen weeks ended July 2, 2005 was $1.2 million, or $.10 per diluted share, as compared to net income of $869,000, or $.07 per diluted share, for the fourteen weeks ended July 3, 2004. For the thirteen weeks ended July 2, 2005, EBITDA was $2.1 million, or $.18 per diluted share, as compared to $1.8 million, or $.15 per diluted share, for the same period a year ago. Leon Kopyt, Chairman and CEO of RCM, commented: "Revenues and earnings for the second quarter increased at a moderate pace on a sequential and comparable prior year basis signaling an expansion in business activity. We are encouraged by these results and anticipate a more positive trend as we continue to focus on our core businesses and potential new growth 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) (In Thousands, Except Per Share Amounts)
Twenty-Six Weeks Twenty-Seven Ended Weeks Ended July 2, 2005 July 3, 2004 ------------------ ----------------- Revenues $90,406 $86,622 Gross profit 21,165 20,727 Selling, general and administrative 17,335 17,327 Depreciation and amortization 528 600 Other expense 112 240 Income before income taxes 3,190 2,560 Income taxes 1,189 894 Net income $2,001 $1,665 Earnings per share (diluted) Net income $.17 $.14
Thirteen Weeks Fourteen Weeks Ended Ended July 2, 2005 July 3, 2004 ------------------ ----------------- Revenues $46,324 $45,349 Gross profit 11,057 10,699 Selling, general and administrative 8,929 8,891 Depreciation and amortization 268 300 Other income (expense) 15 (125) Income before income taxes 1,875 1,383 Income taxes 707 514 Net income $1,168 $869 Earnings per share (diluted) Net income $.10 $.07
RCM Technologies, Inc. Summary Consolidated Balance Sheet Data (Unaudited) (In Thousands)
July 2, January 1, 2005 2005 ---------------- --------------- Cash and equivalents $3,327 $2,402 Accounts receivable 42,593 40,536 Working capital 31,712 29,545 Goodwill 35,843 35,843 Total assets 100,777 98,101 Senior debt 5,900 4,900 Total liabilities 28,802 28,156 Stockholders' equity $71,975 $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 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.
Twenty-Six Weeks Twenty-Seven Ended Weeks Ended July 2, 2005 July 3, 2004 ------------------ ----------------- (In Thousands) --------------------------------------- EBITDA $3,827 $3,392 Depreciation and amortization (528) (600) Interest expense, net of interest income (108) (233) Income taxes (1,190) (894) ------------------ ----------------- Net income $2,001 $1,665 ================== ================= Net income $2,001 $1,665 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 528 600 Provision for losses on accounts receivable (19) (30) Changes in operating assets and liabilities Accounts receivable (2,038) (1,580) Restricted cash (148) Prepaid expenses and other current assets 317 (208) Accounts payable and accrued expenses (776) (3,054) Accrued payroll 372 912 Payroll and withheld taxes (328) 667 Income taxes payable 378 (136) ------------------ ----------------- Cash provided by (used in) operating activities $287 ($1,164) ================== =================
Thirteen Weeks Fourteen Weeks Ended Ended July 2, 2005 July 3, 2004 ---------------- ------------------ (In Thousands) ------------------------------------- EBITDA $2,128 $1,802 Depreciation and amortization (268) (300) Interest expense, net of interest income 15 (118) Income taxes (707) (515) ---------------- ------------------ Net income $1,168 $869 ================ ================== Net income $1,168 $869 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 268 300 Provision for losses on accounts receivable (10) (61) Changes in operating assets and liabilities Accounts receivable (808) (546) Restricted cash (148) Prepaid expenses and other current assets (219) (315) Accounts payable and accrued expenses (437) (879) Accrued payroll 1,777 (457) Payroll and withheld taxes 359 614 Income taxes payable 210 52 ---------------- ------------------ Cash provided by (used in) operating activities $2,160 ($423) ================ ================== ####