PENNSAUKEN, N.J., March 10, 2010 (GLOBE NEWSWIRE) -- RCM Technologies, Inc. (Nasdaq: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.
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RCM Technologies, Inc. Consolidated Statements of Income (Unaudited) (In Thousands, Except Per Share Amounts) |
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Fourteen Week Period Ended January 2, 2010 |
Thirteen Week Period Ended December 27, 2008 |
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| 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) |
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Fifty-Three Week Period Ended January 2, 2010 |
Fifty-Two Week Period Ended December 27, 2008 |
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| 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) |
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RCM Technologies, Inc. Summary Consolidated Balance Sheet Data (In Thousands) |
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January 2, 2010 |
December 27, 2008 |
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| 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 |
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RCM Technologies, Inc. Cash Provided by (Used in) Operating Activities (Unaudited) (In Thousands) |
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Fourteen Week Period Ended January 2, 2010 |
Thirteen Week Period Ended December 27, 2008 |
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| 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 |
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Fifty-Three Week Period Ended January 2, 2010 |
Fifty-Two Week Period Ended December 27, 2008 |
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| 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) | 115 | (641) |
| accounts receivable | ||
| 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) |