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RCM Revenue Falls 19%

February 25 2011

RCM Technologies Inc. (NASD: RCMT) announced revenue fell 19.4 percent in its fiscal fourth quarter ended Jan. 1, 2011. The company reported revenue of $36.4 million for the 13-week period, a drop from the $45.1 million posted in the 14-week period ended Jan. 2, 2010.

Gross margin improved during the quarter to 29.6 percent from 26.4 percent the prior year.

"We are pleased with the respectable levels of improvement in the gross margin expansion of 250 basis points and an operating income increase of 254 percent in 2010 over 2009," said Leon Kopyt, chairman and CEO. "Nonetheless, the lack of revenue growth in 2010 was disappointing and remains our principle focus for 2011. We've instituted a number of corrective measures designed to improve the sales productivity and sales structure, which we expect to have a positive impact on this year's sales performance."

Net income was almost $1.1 million in the fourth quarter, a 54.4 percent jump over the year-ago net income of $687,000.

Affecting the company's results were the sale of one business and the shuttering of another. In September, the company sold its Intertec light industrial and clerical staffing business in Southern California. In March, the company closed a business unit that sold software applications and provided implementation, hosting and maintenance services for Oracle and related software applications. Loss from those discontinued operations during the fourth quarter were $108,000; losses due to them the prior year's fourth quarter were $238,000.

RCM reported $162.0 in revenue during the year ended Jan. 1, 2011, a 5.7 percent drop from the prior year's $171.7 million. The prior fiscal year had 53 weeks. The company reported net income of $5.8 million in the year ended Jan. 1, 2011, a 16.3 percent year-over-year drop.

Gross margin improved to 28.5 percent last year from 25.9 percent a year ago.

RCM Technologies Inc. (NASD: RCMT)

For the 13-week fourth quarter ended Jan. 1, 2011, vs. the 14-week fourth quarter ended Jan. 2, 2010
Revenue: $36.4 million, -19.4 percent
Net income: $1.1 million, +54.4 percent

For the 52-week year ended Jan. 1, 2011, vs. the 53-week year ended Jan. 2, 2010
Revenue: $162.0 million, -5.7 percent
Net income: $5.8 million, -16.3 percent


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