RCM Technologies Inc. (RCMT, Financial) filed Quarterly Report for the period ended 2009-03-28.
RCM Technologies Inc. is a national provider of Business Technology and resource solutions in information technology and professional engineering to customers in corporate and government sectors. The company has grown its information technology competencies in the areas of resource augmentation e-business Enterprise Resource Planning support network and infrastructure support and knowledge management. RCM's engineering expertise is in the form of technical design field engineering field support procedures development and project and program management. RCM Technologies Inc. has a market cap of $19.3 million; its shares were traded at around $1.51 with a P/E ratio of 6 and P/S ratio of 0.1.
Other Income (Expense). Other income (expense) consists of interest expense, net of interest income and gains and losses on foreign currency transactions and, in 2009, the proceeds from a legal settlement. For the thirteen weeks ended March 28, 2009, actual interest expense and unused credit line fees of approximately $21,000 was offset by approximately $1,000 of interest income. For the thirteen weeks ended March 29, 2008, actual interest expense and unused credit line fees of approximately $15,000 was offset by approximately $41,000 of interest income. The Company realized losses on foreign currency transactions of approximately $10,000 for the thirteen weeks ended March 28, 2009 as compared to gains on foreign currency transactions of approximately $1,000 for the comparable prior year period. This change was attributable to unfavorable exchange rates realized during the 2009 period. The proceeds from the legal settlement in 2009 were realized when the Company reached a legal settlement resulting in cash proceeds of $9.8 million (see footnote 15 to the consolidated financial statements).
Income Tax. Income tax expense was $3.7 million for the thirteen weeks ended March 28, 2009 as compared to an income tax benefit of $1.9 million in the comparable prior year period. The change was principally attributable to an increase in income before taxes, which included a $9.8 million legal settlement in the thirteen weeks ended March 28, 2009 and a $6.1 million bad debt expense on a note receivable for the comparable prior year period. The effective tax rate was 40.1% for the thirteen weeks ended March 28, 2009 as compared to 42.1% in the comparable prior year period.
Information Technology revenues of $22.9 million in 2009 increased $0.5 million, or 2.1%, compared to 2008. The increase in revenue was attributable to acquisitions in 2008 offset by the weakness in the economy and reduced demand for the Company’s Information Technology services. The Information Technology segment EBITDA was negative $0.8 million as compared to positive $0.5 million for the comparable prior year period. The change in EBITDA was primarily due to weakness in overall demand for Information Technology services and increased unbilled labor costs for consultants.
Engineering revenues of $14.9 million in 2009 increased $0.8 million, or 6.0%, as compared to the comparable prior year period. The increase in revenue was primarily attributable to increases in revenues from several major customers as compared to the comparable prior year period. The Engineering segment EBITDA was $0.4 million as compared to $0.6 million for the comparable prior year period. The decrease in EBITDA was primarily due to a higher allocation of corporate selling, general and administrative costs as compared to the comparable prior year period.
Commercial revenues of $10.3 million in 2009 decreased $2.4 million, or 18.7%, compared to the comparable prior year period. The decrease in revenues was principally attributable to decreased demand for the Company’s light industrial and clerical staffing services. The Commercial segment EBITDA was $0.3 million as compared to $0.8 million for the comparable prior year period. The decrease in EBITDA was primarily due to the decrease in revenues.
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RCM Technologies Inc. is a national provider of Business Technology and resource solutions in information technology and professional engineering to customers in corporate and government sectors. The company has grown its information technology competencies in the areas of resource augmentation e-business Enterprise Resource Planning support network and infrastructure support and knowledge management. RCM's engineering expertise is in the form of technical design field engineering field support procedures development and project and program management. RCM Technologies Inc. has a market cap of $19.3 million; its shares were traded at around $1.51 with a P/E ratio of 6 and P/S ratio of 0.1.
Highlight of Business Operations:
Revenues. Revenues decreased 2.2%, or $1.1 million, for the thirteen weeks ended March 28, 2009 as compared to the same period in the prior year (the “comparable prior year period”). Revenues increased $0.5 million in the Information Technology segment, increased $0.8 million in the Engineering segment, and decreased $2.4 million in the Commercial segment. Management attributes the overall decrease to a weakening of the general economy offset by revenues from acquisitions made in 2008. Revenues that were attributable to acquisitions which occurred in the Information Technology segment in 2008 contributed $5.7 million in the thirteen weeks ended March 28, 2009 as compared to $1.5 million in the comparable prior year period. Management expects revenues for the remainder of fiscal 2009 to remain generally consistent with the revenues for the thirteen weeks ended March 28, 2009.Other Income (Expense). Other income (expense) consists of interest expense, net of interest income and gains and losses on foreign currency transactions and, in 2009, the proceeds from a legal settlement. For the thirteen weeks ended March 28, 2009, actual interest expense and unused credit line fees of approximately $21,000 was offset by approximately $1,000 of interest income. For the thirteen weeks ended March 29, 2008, actual interest expense and unused credit line fees of approximately $15,000 was offset by approximately $41,000 of interest income. The Company realized losses on foreign currency transactions of approximately $10,000 for the thirteen weeks ended March 28, 2009 as compared to gains on foreign currency transactions of approximately $1,000 for the comparable prior year period. This change was attributable to unfavorable exchange rates realized during the 2009 period. The proceeds from the legal settlement in 2009 were realized when the Company reached a legal settlement resulting in cash proceeds of $9.8 million (see footnote 15 to the consolidated financial statements).
Income Tax. Income tax expense was $3.7 million for the thirteen weeks ended March 28, 2009 as compared to an income tax benefit of $1.9 million in the comparable prior year period. The change was principally attributable to an increase in income before taxes, which included a $9.8 million legal settlement in the thirteen weeks ended March 28, 2009 and a $6.1 million bad debt expense on a note receivable for the comparable prior year period. The effective tax rate was 40.1% for the thirteen weeks ended March 28, 2009 as compared to 42.1% in the comparable prior year period.
Information Technology revenues of $22.9 million in 2009 increased $0.5 million, or 2.1%, compared to 2008. The increase in revenue was attributable to acquisitions in 2008 offset by the weakness in the economy and reduced demand for the Company’s Information Technology services. The Information Technology segment EBITDA was negative $0.8 million as compared to positive $0.5 million for the comparable prior year period. The change in EBITDA was primarily due to weakness in overall demand for Information Technology services and increased unbilled labor costs for consultants.
Engineering revenues of $14.9 million in 2009 increased $0.8 million, or 6.0%, as compared to the comparable prior year period. The increase in revenue was primarily attributable to increases in revenues from several major customers as compared to the comparable prior year period. The Engineering segment EBITDA was $0.4 million as compared to $0.6 million for the comparable prior year period. The decrease in EBITDA was primarily due to a higher allocation of corporate selling, general and administrative costs as compared to the comparable prior year period.
Commercial revenues of $10.3 million in 2009 decreased $2.4 million, or 18.7%, compared to the comparable prior year period. The decrease in revenues was principally attributable to decreased demand for the Company’s light industrial and clerical staffing services. The Commercial segment EBITDA was $0.3 million as compared to $0.8 million for the comparable prior year period. The decrease in EBITDA was primarily due to the decrease in revenues.
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