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Fourth-quarter profit slips at RCM

March 20 2008

RCM Technologies Inc. (NASD: RCMT), a Pennsauken NJ-based staffing company, reported both net income and revenue fell in the fourth quarter of 2007. The company also announced today the acquisition of NuSoft Solutions, a Troy MI-based Microsoft consulting firm.

Fourth-quarter net income at RCM fell 30.6% to $1.6 million from $2.3 million in the fourth quarter of 2006. The company said the fourth quarter of 2006 included a $1.0 million tax credit that wasn't in the most recent quarter.

RCM also reported a 10.0% decline in fourth-quarter revenue to $48.8 million from $54.2 million in the same period in the previous year. Gross margin, however, improved to 27.1% from 24.6%.

Full-year 2007 net income rose 6.5% to $6.8 million from $6.4 million in 2006. The previous year included $480,000 from a legal settlement.

Revenue for 2007 rose 6.1% to $214.2 million from $201.9 million in 2006. Gross margin slipped to 24.7% from 25.0%.

NuSoft, the acquisition announced today, had revenue of $16 million in 2007. RCM said in a filing with the U.S. Securities and Exchange Commission that it issued 700,000 shares of stock to NuSoft with an offering price of $3.0 million as part of its consideration. RCM Chairman and CEO Leon Kopyt also said the company signed nonbinding letters of intent to acquire two other firms.

RCM Technologies Inc. (NASD: RCMT)
For the fourth quarter ended Dec. 29, 2007, compared with the same period in the previous year.
Revenue: $48.8 million, -10.0%
Net income: $1.6 million, -30.6%

For full-year 2007 ended Dec. 29, 2007, compared with the previous year.
Revenue: $214.2 million, +6.1%
Net income: $6.8 million, +6.5%

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