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RCM TECHNOLOGIES, INC. ANNOUNCES RESULTS

RCM TECHNOLOGIES, INC. ANNOUNCES RESULTS
FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED JULY 3, 2010
RCM Technologies, Inc. has announced its financial results for the thirteen and twenty-six week periods ended July 3, 2010.
The Company announced revenues of $46.9 million for the thirteen week period ended July 3, 2010, increased from $46.4 million for the thirteen week period ended June 27, 2009 (comparable prior year period). Net income from continuing operations was $1.7 million for the thirteen week period ended July 3, 2010, as compared to net income from continuing operations of $0.6 million, for the comparable prior year period. Net income for the thirteen week period ended July 3, 2010 was $1.7 million, as compared to net income of $0.2 million, for the comparable prior year period.
The Company had operating income for the thirteen week period ended July 3, 2010 of $2.9 million, as compared to $0.8 million, for the comparable prior year period.
The Company announced revenues of $95.9 million for the twenty-six week period ended July 3, 2010, increased from $93.0 million for the twenty-six week period ended June 27, 2009 (comparable prior year period). Net income from continuing operations was $4.1 million for the twenty-six week period ended July 3, 2010, as compared to net income from continuing operations of $6.3 million, for the comparable prior year period. Net income for the twenty-six week period ended July 3, 2010 was $3.5 million, as compared to net income of $5.8 million, 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 $0.45. During the twenty-six week period ended July 3, 2010, the Company recognized a tax benefit of $1.1 million due to an anticipated 2010 tax deduction for goodwill and intangible assets associated with the closed subsidiary discussed above. The Company recognized an impairment of the goodwill and intangible assets associated with this subsidiary in its 2008 Consolidated Financial Statements.
The Company had operating income for the twenty-six week period ended July 3, 2010 of $4.9 million, as compared to $0.5 million, for the comparable prior year period.
Leon Kopyt, Chairman and CEO of RCM, commented: We are pleased to report that net income in the second quarter 2010 rose 650% over the same period a year ago due in large part to continuing operationa improvement and gross margin expansion.
Second quarter 2010 revenues in the Engineering and Commercial business segments increased while revenues in the Information Technology segment modestly declined as compared to the comparable prior year period.
This decline was primarily due to competing forces between demand and capital allocation in selected IT markets which contributed to the volatility in the revenue stream. Operating income from continuing operations for all three segments improved significantly in the second quarter as compared to the same period a year ago.
We managed to achieve a respectable level of growth in earnings, gross profit and operating cash flow over the last several quarters despite the inconsistency in revenue levels. With Engineering and Healthcare markets solidifying and priorities of our IT customers gaining clarity, we remain encouraged about our future business prospects.

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