EX-99 2 pressrel010210.htm PRESS RELEASE pressrel010210.htm
 
RCM Technologies, Inc.
Tel:  856.356.4500
Corporate Contacts:
2500 McClellan Avenue
Fax: 856.356.4600
Leon Kopyt
Pennsauken, NJ 08109
info@rcmt.com
Chairman, President & CEO
 
www.rcmt.com
Kevin D. Miller
   
Chief Financial Officer

 
 P R E S S   R E L E A S E

RCM TECHNOLOGIES, INC. REPORTS
2009 FOURTH QUARTER AND YEAR-END RESULTS

Pennsauken, NJ - March 10, 2010 -- RCM Technologies, Inc. (NASD: RCMT) today announced financial results for the fourteen and fifty-three week periods ended January 2, 2010.

The Company announced revenues of $49.4 million for the fourteen week period ended January 2, 2010, down from $53.5 million for the thirteen week period ended December 27, 2008 (comparable prior year period).  Net income for the fourteen week period ended January 2, 2010 was $0.7 million, or $0.05 per diluted share, as compared to a net loss of $39.1 million, or $3.06 per diluted share, for the comparable prior year period.

The Company had operating income for the fourteen week period ended January 2, 2010 of $0.9 million, or $0.07 per diluted share, up from a net operating loss of $42.8 million, or $3.35 per diluted share, for the comparable prior year period.

The Company announced revenues of $189.4 million for the fifty-three week period ended January 2, 2010, down from $209.3 million for the fifty-two week period ended December 27, 2008 (the prior year).  Net income for the fifty-three week period ended January 2, 2010 was $6.9 million, or $0.54 per diluted share, as compared to a net loss of $39.8 million, or $3.15 per diluted share, for the prior year.

The Company had operating income for the fifty-three week period ended January 2, 2010 of $1.3 million, or $0.10 per diluted share, up from a net operating loss of $44.1 million, or $3.48 per diluted share, for the prior year.

The Company recorded legal settlement proceeds of $9.8 million, or $5.8 million net of income tax expense, for the fifty-three week period ended January 2, 2010.  The legal settlement resulted in an increase to earnings per diluted share of $0.45.  During the comparable prior year period, the Company recorded a $6.1 million bad debt charge, or $3.7 million net of income tax benefit, relating to a note receivable that the Company wrote off.  The loss resulted in a reduction of earnings of $0.29 per diluted share.

In the fourth quarter of 2008, the Company recorded a non-cash, before-tax charge of $43.3 million for impairment of goodwill and intangible assets.  This charge is reflected in the net and operating income for both the comparable prior year period and the full prior year.



 
 
 

Leon Kopyt, Chairman and CEO of RCM, commented: “Although 2009 was filled with formidable business challenges, we entered the new year with positive momentum.  We believe that certain factors, including an aging infrastructure, a new software upgrade cycle and a stabilizing economy, should drive demand for our Information Technology services.  Additionally, the current strength of our Engineering sales pipeline suggests continuing respectable performance in 2010.

We expect business activity within our Specialty Health Care group to remain steady, while our General Support Services group in southern California is likely to perform at levels that reflect softness in local market conditions.  Although many of our markets are still in recovery, we are hopeful that incrementally-sustainable improvement in our results is attainable.”

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 35 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, the ability of the Company to consummate acquisitions as to which it executes non-binding letters of intent, 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)

 
Fourteen Week
Period Ended
January 2, 2010
  
Thirteen Week
Period Ended
December 27, 2008
  
Revenues
$49,370
  
$53,536
  
Gross profit
12,474
  
13,272
  
Selling, general and administrative
11,142
  
12,212
  
Depreciation and amortization
409
  
528
  
Impairment of goodwill and intangible assets
-
  
43,315
  
Operating income (loss)
923
  
(42,783
)
Other expense
(24
)
(178
)
Income (loss) before income taxes
899
  
(42,961
)
Income tax expense (benefit)
212
  
(3,821
)
Net income (loss)
$687
  
($39,140
)
         
Basic and diluted earnings (loss) per common share
$0.05
  
($3.06
)
         
 
Fifty-Three Week
Period Ended
January 2, 2010
  
Fifty-Two Week
Period Ended
December 27, 2008
  
Revenues
$189,393
  
$209,277
  
Gross profit
46,835
  
53,975
  
Selling, general and administrative
43,885
  
46,568
  
Bad debt - note receivable
-
  
6,090
  
Depreciation and amortization
1,621
  
2,067
  
Impairment of goodwill and intangible assets
-
  
43,315
  
Operating income (loss)
1,329
  
(44,065
)
Other income (expense), net of legal settlement
30
  
(298
)
Income from legal settlement
9,750
  
-
  
Income (loss) before income taxes
11,109
  
(44,363
)
Income tax expense (benefit)
4,187
  
(4,558
)
Net income (loss)
$6,922
  
($39,805
)
         
Basic and diluted earnings (loss) per common share
$0.54
  
($3.15
)

RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(In Thousands)

 
January 2,
2010
  
December 27,
2008
  
Cash and equivalents
$10,942
  
$815
  
Accounts receivable, net
$46,353
  
$55,770
  
Total current assets
$60,677
  
$61,801
  
Goodwill and intangible assets
$8,724
  
$6,814
  
Total assets
$78,209
  
$78,841
  
Total current liabilities
$14,013
  
$23,490
  
Senior debt
 $ -
  
$4,900
  
Total liabilities
$14,906
  
$23,490
  
Stockholders’ equity
$63,303
  
$55,351
  

 
 
 
RCM Technologies, Inc.
Cash Provided by (Used in) Operating Activities
 (Unaudited)
(In Thousands)
 
 
Fourteen Week
Period Ended
January 2, 2010
  
Thirteen Week
Period Ended
December 27, 2008
  
Net income (loss)
$688
  
($39,140
)
Adjustments to reconcile net income (loss) to
   cash (used in) provided by operating activities:
        
 
Depreciation and amortization
414
  
520
  
 
Impairment of goodwill and intangible assets
-
  
43,315
  
 
Loss (gain) on disposal of assets
88
  
(7
)
 
Stock based compensation expense
82
  
(45
)
 
Provision for recovery from accounts receivable
(289
)
(410
)
 
Deferred income tax benefit
(824
)
(4,211
)
Changes in operating assets and liabilities
        
 
Accounts receivable
(878
)
7
  
 
Prepaid expenses and other current assets
657
  
(706
)
 
Accounts payable and accrued expenses
1,176
  
1,718
  
 
Accrued payroll and related costs
(1,347
)
1,287
  
 
Income taxes payable
(32
)
836
  
           
Cash (used in) provided by operating activities
($265
)
$3,164
  
         
         
 
Fifty-Three Week
Period Ended
January 2, 2010
  
Fifty-Two Week
Period Ended
December 27, 2008
  
Net income (loss)
$6,922
  
($39,805
)
Adjustments to reconcile net income (loss) to
   cash provided by (used in) operating activities:
        
 
Depreciation and amortization
1,625
  
2,056
  
 
Impairment of goodwill and intangible assets
-
  
43,315
  
 
Loss (gain) on disposal of assets
88
  
(7
)
 
Stock based compensation expense
181
  
100
  
 
Provision for losses on (recovery from)
  accounts receivable
115
  
(641
)
 
Provision for loss on note receivable
-
  
6,090
  
 
Deferred income tax expense (benefit)
2,047
  
(5,869
)
Changes in operating assets and liabilities
        
 
Accounts receivable
10,173
  
(10,275
)
 
Prepaid expenses and other current assets
643
  
(1,582
)
 
Accounts payable and accrued expenses
(1,142
)
906
  
 
Accrued payroll and related costs
(3,386
)
1,368
  
 
Income taxes payable
(875
)
(463
)
           
Cash provided by (used in) operating activities
$16,391
  
($4,807
)

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