-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HjNhJ5/Ib0gXcqLho0tFCClSkqpZ0UtiaHX6jrttlGV5Ju4EcsonSu8rL5sK3ttk HQtCYVTPv2OZh4VjTlfRtw== 0000700841-06-000016.txt : 20061108 0000700841-06-000016.hdr.sgml : 20061108 20061108160908 ACCESSION NUMBER: 0000700841-06-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060930 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20061108 DATE AS OF CHANGE: 20061108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RCM TECHNOLOGIES INC CENTRAL INDEX KEY: 0000700841 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 951480559 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10245 FILM NUMBER: 061197552 BUSINESS ADDRESS: STREET 1: 2500 MCCLELLAN AVE STE 350 CITY: PENNSAUKEN STATE: NJ ZIP: 08109 BUSINESS PHONE: 8564861777 MAIL ADDRESS: STREET 1: 2500 MCCLELLAN AVENUE STREET 2: STE 350 CITY: PENNSAUKEN STATE: NJ ZIP: 08109-4613 8-K 1 form8kprerel110806.txt FORM 8K PRESS RELEASE 110806 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 8, 2006 RCM Technologies, Inc. (Exact Name of Registrant as Specified in Charter) Nevada 1-10245 95-1480559 -------------------- ------------- -------------- (State or Other (Commission File (I.R.S. Employer Jurisdiction of Number) Identification No.) Incorporation) 2500 McClellan Avenue, Suite 350 Pennsauken, NJ 08109-4613 - ---------------------------------------------------------- --------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (856) 486-1777 -------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): _ Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425). _ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). _ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)). _ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)). Item 2.02. Results of Operations and Financial Condition. On November 8, 2006, the Registrant issued a press release regarding its financial results for the thirty-nine weeks and thirteen weeks ended September 30, 2006. A copy of the press release is furnished as Exhibit 99 to this report. Use of Non-GAAP Financial Information To supplement its consolidated financial statements presented in accordance with GAAP, the Registrant uses certain non-GAAP financial measures, including EBITDA and EBITDA per share, which are derived from results based on GAAP. Non-GAAP adjustments are provided to enhance the user's overall understanding of the Registrant's current financial performance and its prospects for the future, including its results of operations, cash generated and resources available for strategic opportunities including reinvestment in the business and acquisitions. In addition, the Registrant has historically reported similar non-GAAP results to the investment community, and, as a result, believes the inclusion of non-GAAP presentations provides consistency in its financial reporting. Further, the non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the placecountry-regionUnited States. The information set forth under this "Item 2.02. Results of Operations and Financial Condition" (including the exhibit) shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Registrant pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto. Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. None. (b) Pro Forma Financial Information. None. (c) Exhibits. Exhibit Number Exhibit Title 99 Press Release by the Registrant, dated November 8, 2006, furnished in accordance with Item 2.02 of this Current Report on Form 8-K. 1 SIGNATURES 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 hereunto duly authorized. RCM TECHNOLOGIES, INC. By: /s/Stanton Remer Stanton Remer Executive Vice President, Chief Financial Officer, Treasurer and Secretary Dated: November 8, 2006 2 Exhibit Index Exhibit Number Exhibit Title 99 Press Release by the Registrant, dated November 8, 2006, furnished in accordance with Item 2.02 of this Current Report on Form 8-K. 3 EX-99 2 presrelform10q093006.txt PRESS RELEASE FORM 10Q 093006 P R E S S R E L E A S E RCM TECHNOLOGIES, INC. ANNOUNCES RESULTS FOR THIRTY-NINE WEEKS AND THIRTEEN WEEKS ENDED SEPTEMBER 30, 2006 November 8, 2006 -- RCM Technologies, Inc. (NASD: RCMT) today announced financial results for the thirty-nine weeks and thirteen weeks ended September 30, 2006. The Company announced revenues of $147.7 million for the thirty-nine weeks ended September 30, 2006, up from $133.8 million for the thirty-nine weeks ended October 1, 2005 (comparable prior year period). Net income for the thirty-nine weeks ended September 30, 2006 was $4.0 million, or $.33 per diluted share, as compared to net income of $2.7 million, or $.23 per diluted share, for the comparable prior year period. Net income before equity-based compensation (1) for the thirty-nine weeks ended September 30, 2006 was $4.7 million, or $.39 per diluted share, and excludes net equity-based compensation expense of $693,000. No equity based compensation expense was included in the 2005 period. Net income for the 2006 period included a $1.0 million income tax credit, or $0.08 per diluted share, as compared to no such tax credit in the 2005 period. Revenues were $51.6 million for the thirteen weeks ended September 30, 2006, up from $43.4 million for the thirteen weeks ended October 1, 2005 (comparable prior year period). Net income for the thirteen weeks ended September 30, 2006 was $1.3 million, or $.11 per diluted share, as compared to net income of $717,000, or $.06 per diluted share, for the comparable prior year period. Net income before equity-based compensation (1) for the thirteen weeks ended September 30, 2006 was $1.4 million, or $.12 per diluted share, and excludes net equity-based compensation expense of $99,400. No equity based compensation expense was included in the 2005 period. For the thirty-nine weeks ended September 30, 2006, earnings before interest, income taxes, depreciation and amortization, or EBITDA, was $6.6 million, or $.55 per diluted share, as compared to $5.3 million, or $.45 per diluted share, for the comparable prior year period. For the thirteen weeks ended September 30, 2006, EBITDA was $2.7 million, or $.22 per diluted share, as compared to $1.4 million, or $.12 per diluted share, for the comparable prior year period. Leon Kopyt, Chairman and CEO of RCM, commented: "We are encouraged with the improvement in our operating results as all business segments showed increases in revenue and operating income for comparable year over year periods. We expect to continue to execute our growth strategy and maintain sound financial management in order to gain market share and increase shareholder value." 1 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. (1) On January 1, 2006, the Company adopted the provisions of SFAS No. 123(R), "Share-Based Payment" on a modified prospective basis, which required the Company to record equity-based compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards outstanding as of the date of adoption. No compensation cost was recognized in the statements of income for either the thirteen weeks or thirty-nine weeks ended October 1, 2005. For these periods, the Company, consistent with historical practice, applied the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," (APB No. 25) and related interpretations, as all options granted by the Company had an exercise price that was equal to or greater than the underlying common stock at the date of grant. For the purposes of performing the calculation, of Net Income and Net Income per Diluted Share before Equity-Based Compensation Expense all equity-based compensation expense, net of income tax, is added back to net income as calculated in accordance with Generally Accepted Accounting Principles (GAAP). Net Income and Net income per Diluted Share before Equity-Based Compensation Expense are not measurements calculated in accordance with GAAP in the United States, and are not intended to be a replacement for, or considered to be more important than, net income or net income per diluted share calculated in accordance with GAAP. As the calculation of Net Income or Net Income per Diluted Share before Equity-Based Compensation are not in accordance with GAAP, the Company believes that the use of the calculations is significantly limited, and should only be used to compare net income or net income per diluted share year-over-year on a consistent basis. To mitigate this limitation, the Company has provided net income and net income per diluted share calculated in accordance with GAAP, which should be the primary measurements utilized to analyze the Company's financial results. The Company has provided these additional disclosures because net income and net income per share calculated on a GAAP basis are not comparable year-over-year, and the Company did not incur any equity-based compensation expense in 2005. Accordingly, this reconciliation allows the Company to evaluate the financial results of its operations year-over-year on a consistent basis. Other than to measure net income and net income per share year-over-year on a consistent basis, the Company does not utilize Net Income or Net Income per Diluted Share before Equity-Based Compensation Expense for any other purpose. Tables to Follow 2 RCM Technologies, Inc. Consolidated Statements of Income (Unaudited) (In Thousands, Except Per Share Amounts)
Thirty-Nine Weeks Ended --------------------------------------- September 30, October 1, 2006 2005 ------------------ ----------------- Revenues $147,729 $133,797 Gross profit (1) 37,163 31,319 Selling, general and administrative (2) 30,521 26,045 Depreciation and amortization 1,115 801 Interest expense, net 204 171 Loss on foreign currency transactions 16 7 Income before income taxes 5,307 4,295 Income taxes 1,287 1,577 Net income $4,020 $2,718 Earnings per share (diluted) Net income $.33 $.23
Thirteen Weeks Ended --------------------------------------- September 30, October, 1 2006 2005 ------------------ ----------------- Revenues $51,650 $43,391 Gross profit (3) 12,952 10,153 Selling, general and administrative (4) 10,251 8,711 Depreciation and amortization 394 273 Interest expense, net 74 64 Loss on foreign currency transactions 5 2 Income before income taxes 2,228 1,104 Income taxes 879 387 Net income $1,349 $717 Earnings per share (diluted) Net income $.11 $.06
RCM Technologies, Inc. Summary Consolidated Balance Sheet Data (Unaudited) (In Thousands)
September 30, December 31, 2006 2005 ----------------- ---------------- Cash and equivalents $6,666 $3,761 Accounts receivable 48,836 44,930 Working capital 37,183 33,032 Goodwill and Intangible assets 38,860 38,469 Total assets 105,954 106,773 Senior debt 3,900 3,900 Total liabilities 25,251 31,084 Stockholders' equity $80,702 $75,689 (1) Reflects stock based compensation expense of $29,750 included in cost of services for the thirty-nine weeks ended September 30, 2006. (2) Includes stock based compensation expense of $662,925 for the thirty-nine weeks ended September 30, 2006. (3) Reflects stock based compensation credit of $691 included in cost of services for the thirteen weeks ended September 30, 2006. (4) Includes stock based compensation expense of $100,050 for the thirteen weeks ended September 30, 2006.
3 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.
Thirty-Nine Weeks Ended ----------------------------------------- September 30 October 1, 2006 2005 -------------------- ----------------- (In Thousands) ----------------------------------------- EBITDA (1) $6,626 $5,267 Depreciation and amortization (1,115) (801) Interest expense, net of interest income (204) (171) Income taxes (1,287) (1,577) -------------------- ----------------- Net income $4,020 $2,718 ==================== ================= Earnings per share (diluted) EBITDA $.55 $.45 ==================== ================= Net income $.33 $.23 ==================== ================= Weighted average shares outstanding 12,020,901 11,617,444 ==================== =================
Thirteen Weeks Ended ----------------------------------------- September 30, October 1, 2006 2005 -------------------- ----------------- (In Thousands) ----------------------------------------- EBITDA (2) $2,697 $1,440 Depreciation and amortization (394) (273) Interest expense, net of interest income (75) (63) Income taxes (credit) (879) (387) -------------------- ----------------- Net income $1,349 $717 ==================== ================= Earnings per share (diluted) EBITDA $.22 $.12 ==================== ================= Net income $.11 $.06 ==================== ================= Weighted average shares outstanding 12,003,750 11,711,064 ==================== ================= (1) Includes stock based compensation expense of $692,675 for the thirty-nine weeks ended September 30, 2006. (2) Includes stock based compensation expense of $99,359 for the thirteen weeks ended September 30, 2006.
4 RCM Technologies, Inc. Calculation of Net Income and Net Earnings per Diluted Share before Equity-Based Compensation Expense (1) (Unaudited)
Thirty-Nine Weeks Ended ----------------------------------------- September October 30, 2006 1, 2005 -------------------- ----------------- (In Thousands) ----------------------------------------- Net income $4,020 $2,718 Equity-based compensation, net of income tax 693 Net income before equity-based compensation expense 4,713 2,718 Net earnings per diluted share before equity-based compensation expense $.39 $.23
Thirteen Weeks Ended ----------------------------------------- September October 30, 2006 1, 2005 -------------------- ----------------- (In Thousands) ----------------------------------------- Net income $1,349 $717 Equity-based compensation, net of income tax 99 Net income before equity-based compensation expense 1,448 717 Net earnings per diluted share before equity-based compensation expense $.12 $.06
(1) See footnote 1 on page 2 5 RCM Technologies, Inc. Reconciliation of EBITDA to Net Income and Cash Provided by Operating Activities (Continued) (Unaudited)
Thirty-Nine Weeks Ended ----------------------------------------- September 30, October 1, 2006 2005 -------------------- ----------------- (In Thousands) ----------------------------------------- Net income $4,020 $2,718 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 1,115 801 Stock based compensation expense 693 Provision for losses on accounts receivable (109) (110) Deferred tax assets (145) 82 Changes in operating assets and liabilities Accounts receivable (3,797) (1,762) Restricted cash 8,572 (205) Prepaid expenses and other current assets 66 806 Accounts payable and accrued expenses (5,271) 693 Accrued compensation 1,337 (1,039) Payroll and withheld taxes 250 (524) Income taxes payable (2,149) 1,137 -------------------- ----------------- Cash provided by operating activities $4,582 $2,597 ==================== =================
Thirteen Weeks Ended ----------------------------------------- September 30, October 1, 2006 2005 -------------------- ----------------- (In Thousands) ----------------------------------------- Net income $1,349 $717 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 394 273 Stock based compensation expense 100 Provision for losses on accounts receivable (92) (91) Deferred tax assets 41 82 Changes in operating assets and liabilities Accounts receivable (660) 276 Restricted cash (57) Prepaid expenses and other current assets 137 489 Accounts payable and accrued expenses 827 1,469 Accrued compensation (56) (1,411) Payroll and withheld taxes 158 (196) Income taxes payable (700) 759 -------------------- ----------------- Cash provided by operating activities $1,498 $2,310 ==================== =================
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