RCM Technologies, Inc. Reports 2009 Second Quarter and Year-to-Date Results

• Press Release
• Source: RCM Technologies, Inc.
• On 4:05 pm EDT, Monday August 10, 2009

PENNSAUKEN, N.J., Aug. 10, 2009 (GLOBE NEWSWIRE) -- RCM Technologies, Inc. (Nasdaq:RCMT - News) today announced financial results for the thirteen and twenty-six week periods ended June 27, 2009.

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Symbol	Price	Change
RCMT	2.35	-0.05

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The Company announced revenues of $47.2 million for the thirteen week period ended June 27, 2009, down from $55.0 million for the thirteen week period ended June 28, 2008 (comparable prior year period). Net income for the thirteen week period ended June 27, 2009 was $0.2 million, or $0.02 per diluted share, as compared to net income of $1.4 million, or $0.11 per diluted share, for the comparable prior year period.

The Company experienced net operating income for the thirteen week period ended June 27, 2009 of $0.2 million, or $0.01 per diluted share, down from net operating income of $2.4 million, or $0.19 per diluted share, for the comparable prior year period.

The Company announced revenues of $95.3 million for the twenty-six week period ended June 27, 2009, down from $104.1 million for the twenty-six week period ended June 28, 2008 (comparable prior year period). Net income for the twenty-six week period ended June 27, 2009 was $5.8 million, or $0.45 per diluted share, as compared to a net loss of $1.2 million, or $0.10 per diluted share, for the comparable prior year period.

The Company recorded legal settlement proceeds of $9.8 million, or $5.8 million net of income tax expense, for the twenty-six week period ended June 27, 2009. The legal settlement resulted in an increase to earnings per diluted share of $0.46. 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.

The Company experienced a net operating loss for the twenty-six week period ended June 27, 2009 of $0.3 million, or $0.02 per diluted share, up from a net operating loss of $2.2 million, or $0.17 per diluted share, for the comparable prior year period.

Leon Kopyt, Chairman and CEO of RCM, commented: "The current economic environment continues to be challenging, particularly for our Information Technology and General Support Services groups. On a more positive note, we had modest growth in our Engineering segment while the Specialty Healthcare group held steady following impressive growth over the past several years. Additionally, we completed our fourth consecutive quarter with positive cash flow from operations and for the first six months of 2009 generated $13.5 million cash flow from operations. We believe that there will be an incremental improvement in operating income in the third and fourth quarters as compared to the first two quarters of 2009."

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.

                         RCM Technologies, Inc.
                   Consolidated Statements of Income
                              (Unaudited)
               (In Thousands, Except Per Share Amounts)

                                           Thirteen Week Periods Ended
                                          ----------------------------
                                          June 27, 2009  June 28, 2008
                                          -------------  -------------
 Revenues                                       $47,223        $55,011
 Gross profit                                    11,578         15,150
 Selling, general and administrative             11,015         12,141
 Depreciation and amortization                      404            560
 Operating income                                   159          2,449
 Interest expense, net                               (3)           (67)
 Gain (loss) on foreign currency
  transactions                                       54             (6)
 Income before income taxes                         210          2,376
 Income tax (benefit) expense                       (36)           936
 Net income                                        $246         $1,440

 Earnings per share (diluted)
  Net income                                      $0.02          $0.11


                                         Twenty-Six Week Periods Ended
                                         -----------------------------
                                          June 27, 2009  June 28, 2008
                                         --------------  -------------
 Revenues                                       $95,272       $104,125
 Gross profit                                    22,520         27,448
 Selling, general and administrative             22,022         22,626
 Bad debt - note receivable                          --          6,090
 Depreciation and amortization                      788            921
 Operating loss                                    (290)        (2,189)
 Interest expense, net                              (23)           (41)
 Gain (loss) on foreign currency
  transactions                                       44             (5)
 Income from legal settlement                     9,750             --
 Income (loss) before income taxes                9,481         (2,235)
 Income tax expense (benefit)                     3,682         (1,005)
 Net income (loss)                               $5,799        ($1,230)

 Earnings per share (diluted)
  Net income (loss)                               $0.45         ($0.10)


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

                                                June 27,   December 27,
                                                 2009          2008
                                              -----------  -----------
 Cash and equivalents                              $9,625         $815
 Accounts receivable, net                          47,827       55,770
 Working capital                                   49,204       42,687
 Goodwill and intangible assets                     6,781        6,814
 Total assets                                      77,348       78,841
 Senior debt                                           --        4,900
 Total liabilities                                 15,792       23,490
 Stockholders' equity                             $61,556      $55,351


                         RCM Technologies, Inc.
            Cash Provided by (Used in) Operating Activities
                              (Unaudited)

                                          Thirteen Week Periods Ended
                                         -----------------------------
                                            June 27,        June 28,
                                             2009             2008
                                         -------------   -------------
                                                (In Thousands)
                                         -----------------------------
 Net income                                       $246          $1,439
 Adjustments to reconcile net income to
  cash provided by (used in) operating
  activities:
   Depreciation and amortization                   404             560
   Stock based compensation                        (59)            104
   Provision for losses on accounts
    receivable                                      76             (36)
   Deferred tax assets                             134             528
 Changes in operating assets and
  liabilities
   Accounts receivable                           3,355          (6,566)
   Prepaid expenses and other current
    assets                                        (810)           (524)
   Accounts payable and accrued expenses          (438)            875
   Accrued payroll and related costs             1,626           1,615
   Income taxes payable                           (340)           (256)
                                         -------------   -------------

 Cash provided by (used in) operating
  activities                                    $4,194         ($2,261)
                                         =============   =============


                                         Twenty-Six Week Periods Ended
                                         -----------------------------
                                            June 27,        June 28,
                                              2009            2008
                                         -------------   -------------
                                                (In Thousands)
                                         -----------------------------
 Net income (loss)                              $5,799         ($1,230)
 Adjustments to reconcile net income
  (loss) to cash provided by (used in)
  operating activities:
   Depreciation and amortization                   785             921
   Stock based compensation                         34             197
   Provision for losses on accounts
    receivable                                     304            (133)
   Provision for losses on note
    receivable                                      --           6,090
   Deferred tax assets                           2,426          (1,660)
 Changes in operating assets and
  liabilities
   Accounts receivable                           7,663         (10,879)
   Prepaid expenses and other current
    assets                                        (328)           (519)
   Accounts payable and accrued expenses        (1,439)           (577)
   Accrued payroll and related costs            (1,153)            446
   Income taxes payable                           (544)         (1,376)
                                         -------------   -------------

 Cash provided by (used in) operating
  activities                                   $13,547         ($8,720)
                                         =============   =============

RCM Technologies, Inc.
Leon Kopyt, Chairman, President & CEO
Kevin D. Miller, Chief Financial Officer
856.356.4500
Fax: 856.356.4600
info@rcmt.com
www.rcmt.com