EX-99 2 pressrel032206.txt PRESS RELEASE DATED MARCH 22, 2006 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) ================= ==================