PENNSAUKEN, N.J., Aug. 8, 2007 (PRIME NEWSWIRE) -- RCM Technologies, Inc. (Nasdaq:RCMT) today announced financial results for the twenty-six weeks and thirteen weeks ended June 30, 2007.
The Company announced revenues of $111.3 million for the twenty-six weeks ended June 30, 2007, up from $96.1 million for the twenty-six weeks ended July 1, 2006 (comparable prior year period). Net income for the twenty-six weeks ended June 30, 2007 was $3.4 million, or $0.28 per diluted share, as compared to net income of $2.7 million, or $0.22 per diluted share for the comparable prior year period, which included a $1.0 million income tax credit, or $.08 per share diluted.
Net income for the 2007 period includes income of $480,000 ($800,000, net of income taxes of $320,000), or $.04 per diluted share, from a legal settlement.
Operating income for the twenty-six weeks ended June 30, 2007 was $4.9 million, or $0.39 per diluted share, up from $3.2 million, or $0.27 per diluted share for the comparable period.
Net income before stock-based compensation(1) for the twenty-six weeks ended June 30, 2007 was $3.5 million, or $0.28 per diluted share, and excludes net equity-based compensation expense of $94,000. Net income before stock-based compensation(1) for the twenty-six weeks ended July 1, 2006 was $3.3 million, or $0.28 per diluted share, and excludes net stock-based compensation expense of $593,000.
For the twenty-six weeks ended June 30, 2007, earnings before interest, income taxes, depreciation and amortization, or EBITDA, was $6.4 million, or $0.52 per diluted share, as compared to $3.9 million, or $0.33 per diluted share, for the comparable prior year period. EBITDA for the 2007 period includes income of $800,000 from a legal settlement.
The Company announced revenues of $56.8 million for the thirteen weeks ended June 30, 2007, up from $49.0 million for the thirteen weeks ended July 1, 2006 (comparable prior year period). Net income for the thirteen weeks ended June 30, 2007 was $1.9 million, or $0.15 per diluted share, as compared to net income of $1.9 million, or $0.15 per diluted share, for the comparable prior year period, which included a $1.0 million income tax credit, or $.08 per share diluted.
Operating income for the thirteen weeks ended June 30, 2007 was $3.0 million, or $0.24 per diluted share, up from $1.6 million, or $0.14 per diluted share for the comparable period.
Net income before stock-based compensation(1) for the thirteen weeks ended June 30, 2007 was $1.8 million, or $.14 per diluted share, and excludes a net stock-based compensation credit of $93,000. Net income before equity-based compensation(1) for the thirteen weeks ended July 1, 2006 was $2.1 million, or $0.18 per diluted share, and excludes net stock-based compensation expense of $288,000.
For the thirteen weeks ended June 30, 2007, earnings before interest, income taxes, depreciation and amortization, or EBITDA was $3.3 million, or $0.27 per diluted share, as compared to $2.0 million, or $0.17 per diluted share, for the comparable prior year period.
Leon Kopyt, Chairman and CEO of RCM, commented: "We are pleased to report that revenues and operating income in the second quarter and the six months increased on a comparable year basis. Revenues for the second quarter and for the six months each rose 16% while operating income for the second quarter increased 82% and for the six months increased 52%, all over the same periods a year ago. We expect demand for our services in the second half of this fiscal year to remain consistent with the two preceding quarters."
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, 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. 123R, "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.
For the purposes of performing the calculation of net income 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 accounting principles generally accepted in the United States (U.S. GAAP). Net income before equity-based compensation expense is not a measurement calculated in accordance with U.S. GAAP, and is not intended to be a replacement for, or to be considered to be more important than, net income calculated in accordance with U.S. GAAP. As the calculation of net income before equity-based compensation expense is not performed in accordance with U.S. GAAP, the Company believes that the utility of the calculation is significantly limited, and that the measure should only be used to compare to net income year-over-year on a consistent basis. To mitigate this limitation, the Company has provided a reconciliation of net income before equity-based compensation expense to net income calculated in accordance with U.S. GAAP, which should be the primary measurement utilized to analyze the Company's financial results. The Company does not utilize net income before equity-based compensation expense for any other purpose.
RCM Technologies, Inc.
Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Per Share Amounts)
Twenty-Six Weeks Ended
---------------------------
June 30, 2007 July 1, 2006
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Revenues $111,339 $ 96,079
Gross profit (1) 26,335 24,211
Selling, general and administrative (2) 20,722 20,271
Depreciation and amortization 720 721
Operating income 4,893 3,219
Interest (income) expense, net (1) 129
(Gain) loss on foreign currency
transactions (11) 11
Income from legal settlement (800) --
Income before income taxes 5,705 3,079
Income taxes 2,281 409
Net income $ 3,424 $ 2,670
Earnings per share (diluted)
Net income $ 0.28 $ 0.22
Thirteen Weeks Ended
---------------------------
June 30, 2007 July 1, 2006
------------- ------------
Revenues $ 56,846 $ 49,025
Gross profit (3) 13,959 12,180
Selling, general and administrative (4) 10,628 10,185
Depreciation and amortization 366 368
Operating income 2,965 1,627
Interest (income) expense, net (8) 64
Gain on foreign currency transactions (13) (2)
Income before income taxes 2,986 1,565
Income taxes (credit) 1,133 (294)
Net income $ 1,853 $ 1,859
Earnings per share (diluted)
Net income $ 0.15 $ 0.15
RCM Technologies, Inc.
Summary Consolidated Balance Sheet Data
(Unaudited)
(In Thousands)
June 30, December 30,
2007 2006
--------- ------------
Cash and equivalents $ 6,884 $ 2,449
Accounts receivable 52,954 48,141
Working capital 43,246 38,844
Goodwill and intangible assets 40,097 39,998
Total assets 108,978 100,040
Senior debt -- --
Total liabilities 21,277 16,647
Stockholders' equity $ 87,701 $ 83,393
(1) Reflects stock based compensation expense of $4,000 and $30,000
included in cost of services for the twenty-six weeks ended
June 30, 2007 and July 1, 2006, respectively.
(2) Includes stock based compensation expense of $90,000 and $563,000
for the twenty-six weeks ended June 30, 2007 and July 1, 2006,
respectively.
(3) Reflects stock based compensation credit of $9,000 and a stock
based compensation expense of $18,000 included in cost of
services for the thirteen weeks ended June 30, 2007 and July 1,
2006, respectively.
(4) Includes stock based compensation credit of $83,000 and a stock
based compensation expense of $270,000 for the thirteen weeks
ended June 30, 2007 and July 1, 2006, respectively.
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 provided by operating activities.
Twenty-Six Weeks Ended
-----------------------------
June 30, 2007 July 1, 2006
------------- -------------
(In Thousands)
-----------------------------
EBITDA (1) $6,424 $3,929
Depreciation and amortization 720 721
Interest (income) expense, net (1) 129
Income taxes 2,281 409
------------- -------------
Net income $3,424 $2,670
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Earnings per share (diluted)
EBITDA $0.52 $0.33
============= =============
Net income $0.28 $0.22
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Weighted average shares outstanding 12,421 12,040
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Thirteen Weeks Ended
-----------------------------
June 30, 2007 July 1, 2006
------------- -------------
(In Thousands)
-----------------------------
EBITDA (2) $3,344 $1,997
Depreciation and amortization 366 368
Interest (income) expense, net (8) 64
Income taxes (credit) 1,133 (294)
------------- -------------
Net income $1,853 $1,859
============= =============
Earnings per share (diluted)
EBITDA $ 0.27 $0.17
============= =============
Net income $ 0.15 $0.15
============= =============
Weighted average shares outstanding 12,479 12,044
============= =============
(1) Includes stock based compensation expense of $94,000 and $593,000
for the twenty-six weeks ended June 30, 2007 and July 1, 2006,
respectively.
(2) Includes stock based compensation credit of $92,000 and a stock
based compensation expense of $288,000 for the thirteen weeks
ended June 30, 2007 and July 1, 2006, respectively.
RCM Technologies, Inc.
Reconciliation of EBITDA to Net Income and Cash Provided by Operating
Activities (Continued)
(Unaudited)
Twenty-Six Weeks Ended
----------------------------
June 30, 2007 July 1, 2006
------------- ------------
(In Thousands)
----------------------------
Net income $3,424 $2,670
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 723 721
Stock based compensation expense 94 593
Provision for losses on accounts receivable 183 (17)
Deferred tax assets 1,603 (186)
Changes in operating assets and liabilities
Accounts receivable (4,822) (3,137)
Restricted cash 8,572
Prepaid expenses and other current assets (1,376) (71)
Accounts payable and accrued expenses 3,297 (6,098)
Accrued compensation 760 1,393
Payroll and withheld taxes (47) 93
Income taxes payable 94 (1,449)
------------- ------------
Cash provided by operating activities $3,933 $3,084
============= ============
Thirteen Weeks Ended
----------------------------
June 30, 2007 July 1, 2006
------------- ------------
(In Thousands)
----------------------------
Net income $1,853 $1,859
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 369 368
Stock based compensation expense (92) 288
Provision for losses on accounts receivable 170 (11)
Deferred tax assets 768 (186)
Changes in operating assets and liabilities
Accounts receivable (3,705) 1,205
Restricted cash 8,658
Prepaid expenses and other current assets (1,073) (685)
Accounts payable and accrued expenses 2,965 (8,223)
Accrued compensation 2,646 1,860
Payroll and withheld taxes (193) 66
Income taxes payable (26) (307)
------------- ------------
Cash provided by operating activities $3,682 $4,892
============= ============