UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
|
RCM
TECHNOLOGIES, INC.
(Exact
Name of Registrant as Specified in its Charter)
|
Nevada
|
95-1480559
|
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(I.R.S.
Employer Identification No.)
|
|
2500
McClellan Avenue, Suite 350,
Pennsauken,
New Jersey
|
08109-4613
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|
Registrant's
telephone number, including area code:
|
(856)
356-4500
|
|
Securities
registered pursuant to Section 12(b) of the Act:
|
||
Title of Each Class
|
Name of Each Exchange on Which
Registered
|
|
Common
Stock, par value $0.05 per share
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The
NASDAQ Stock Market LLC
|
|
Securities
registered pursuant to Section 12(g) of the Act:
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None
|
|
Large
Accelerated Filer [ ]
|
Accelerated
Filer [ ]
|
Non-Accelerated
Filer [ ]
(Do
not check if a smaller reporting company)
|
Smaller
Reporting Company [X]
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RCM
TECHNOLOGIES, INC.
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FORM
10-K
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TABLE
OF CONTENTS
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PART
I
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1
|
||
Item
1.
|
Business
|
2
|
|
Item
1A.
|
Risk
Factors
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14
|
|
Item
1B.
|
Unresolved
Staff Comments
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17
|
|
Item
2.
|
Properties
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17
|
|
Item
3.
|
Legal
Proceedings
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17
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
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17
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|
PART
II
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18
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||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
18
|
|
Item
6.
|
Selected
Financial Data
|
19
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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19
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|
Item
7A.
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Quantitative
and Qualitative Disclosures about Market Risk
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33
|
|
Item
8.
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Financial
Statements and Supplementary Data
|
33
|
|
Item
9.
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
33
|
|
Item
9A(T).
|
Controls
and Procedures
|
34
|
|
Item
9B.
|
Other
Information
|
34
|
|
PART
III
|
35
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||
Item
10.
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Directors,
Executive Officers and Corporate Governance
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35
|
|
Item
11.
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Executive
Compensation
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35
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|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
35
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|
Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence
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35
|
|
Item
14.
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Principal
Accountant Fees and Services
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35
|
|
PART
IV
|
36
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||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
36
|
|
Signatures
|
39
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PART
I
|
ITEM
1. BUSINESS
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1. BUSINESS (CONTINUED)
|
·
|
Enterprise Business
Solutions
|
·
|
Application
Services
|
·
|
Infrastructure
Solutions
|
·
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Competitive
Advantage & Productivity Solutions
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·
|
Life Sciences Solutions
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1. BUSINESS (CONTINUED)
|
LOCATION
|
NUMBER
OF
OFFICES
|
SERVICES
PROVIDED(1)
|
|
USA
|
|||
California
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10
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IT,
C
|
|
Connecticut
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2
|
E
|
|
Florida
|
1
|
C
|
|
Georgia
|
1
|
IT
|
|
Illinois
|
1
|
IT
|
|
Maryland
|
1
|
IT
|
|
Massachusetts
|
1
|
IT
|
|
Michigan
|
3
|
IT,
E
|
|
Minnesota
|
1
|
IT
|
|
Missouri
|
1
|
IT
|
|
New
Jersey
|
3
|
IT,
E
|
|
New
York
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2
|
IT, E,
C
|
|
Ohio
|
1
|
IT
|
|
Pennsylvania
|
1
|
C
|
|
Rhode
Island
|
1
|
E
|
|
Texas
|
1
|
IT
|
|
Wisconsin
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2
|
IT,
E
|
|
33
|
|||
PUERTO
RICO
|
1
|
IT
|
|
CANADA
|
3
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IT,
E
|
ITEM
1. BUSINESS (CONTINUED)
|
Revenues
|
Total
Assets
|
||
United
States
|
$163,573
|
$67,357
|
|
Canada
|
22,539
|
9,515
|
|
Puerto
Rico
|
3,281
|
1,337
|
|
$189,393
|
$78,209
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1. BUSINESS (CONTINUED)
|
1)
|
Deployed
a new mail architecture based on the Microsoft Exchange 2007 platform. The
system is comprised of redundant mail routing servers and clustered
mailbox servers attached to a Storage Area Network (SAN). This
new messaging platform has the current capacity of six Terabytes (TB),
with the capability of scaling to 18 Terabytes (TB). In addition to mail
storage being sized for VOIP integration, web access to the mail server is
only allowed via secure HTTPs
protocol.
|
2)
|
Upgraded
its perimeter network and WAN architecture to a secure centralized model
on Private Network Transport (PNT) AT&T circuits, utilizing Multiple
Packet Label Switching (MPLS) transport protocol. The hub datacenter at
its operational headquarters has been outfitted with redundant fiber
circuits from AT&T and Optimum Lightpath utilizing Border Gateway
Protocol (BGP) for automatic failover. In addition, redundant firewalls,
routers and switching architecture should protect against hardware
failure.
|
3)
|
Moved to
service-oriented architecture facilitating the implementation of the Cisco
Voice over IP (VOIP) solution which is currently deployed throughout RCM’s
offices. This enterprise solution, based on Cisco CallManager,
Unity Voicemail, Mobility Manager, Meeting Place, Fax Server and
Video Presence will, when completed, unify all RCM offices in the US and
Canada. The summary of benefits include four digit extension
calls between RCM offices, email and voicemail unification, soft and
mobile phone integration, video and web conferencing, and central and
email enabled faxing.
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1. BUSINESS (CONTINUED)
|
ITEM
1A. RISK FACTORS
|
ITEM
1A. RISK FACTORS
(CONTINUED)
|
ITEM
1A. RISK FACTORS
(CONTINUED)
|
ITEM
1A. RISK FACTORS
(CONTINUED)
|
ITEM
1B. UNRESOLVED STAFF
COMMENTS
|
ITEM
2. PROPERTIES
|
ITEM
3. LEGAL PROCEEDINGS
|
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
PART
II
|
ITEM
5.
|
MARKET
FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
|
MATTERS
AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
Common
Stock
|
||||
Fiscal
2008
|
High
|
Low
|
||
First
Quarter
|
$6.51
|
$3.82
|
||
Second
Quarter
|
$4.81
|
$3.75
|
||
Third
Quarter
|
$4.57
|
$2.00
|
||
Fourth
Quarter
|
$2.24
|
$0.77
|
||
Fiscal
2009
|
||||
First
Quarter
|
$1.88
|
$0.90
|
||
Second
Quarter
|
$2.49
|
$1.02
|
||
Third
Quarter
|
$2.44
|
$1.47
|
||
Fourth
Quarter
|
$3.10
|
$2.10
|
ITEM 6. SELECTED FINANCIAL
DATA
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ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
|
RESULTS OF
OPERATIONS
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
Fiscal
Years Ended
|
||||||||
January
2, 2010
|
December
27, 2008
|
|||||||
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
|||||
Revenues
|
$189,393
|
100.0
|
$209,277
|
100.0
|
||||
Cost
of services
|
142,558
|
75.3
|
155,302
|
74.2
|
||||
Gross
profit
|
46,835
|
24.7
|
53,975
|
25.8
|
||||
Selling,
general and administrative
|
43,885
|
23.1
|
46,568
|
22.3
|
||||
Depreciation
and amortization
|
1,621
|
0.9
|
2,067
|
1.0
|
||||
Bad
debt - note receivable
|
-
|
-
|
6,090
|
2.9
|
||||
Impairment
of goodwill and intangible assets
|
-
|
-
|
43,315
|
20.7
|
||||
Total
operating expense
|
45,506
|
24.0
|
98,040
|
46.8
|
||||
Operating
income (loss)
|
1,329
|
0.7
|
(44,065
|
)
|
(21.1
|
)
|
||
Other
income (expense), net
|
9,780
|
5.2
|
(298
|
)
|
(0.1
|
)
|
||
Income
(loss) before income taxes
|
11,109
|
5.9
|
(44,363
|
)
|
(21.2
|
)
|
||
Income
tax expense (benefit)
|
4,187
|
2.2
|
(4,558
|
)
|
2.2
|
|||
Net
income (loss)
|
$6,922
|
3.7
|
($39,805
|
)
|
(19.0
|
)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
Fiscal
Years Ended
|
|||||
January
2,
2010
|
December
27,
2008
|
||||
Cash
provided by (used in):
|
|||||
Operating
Activities
|
$16,391
|
($4,807
|
)
|
||
Investing
Activities
|
($1,650
|
)
|
($10,364
|
)
|
|
Financing
Activities
|
($4,817
|
)
|
$4,955
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
Year
Ending
|
Amount
|
|
January
1, 2011
|
$2,800
|
|
December
31, 2011
|
1,650
|
|
Thereafter
|
850
|
|
Maximum
deferred consideration
|
$5,300
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
Fiscal
Years
|
Amount
|
|
2010
|
$3,842
|
|
2011
|
3,176
|
|
2012
|
2,017
|
|
2013
|
791
|
|
2014
|
147
|
|
Thereafter
|
96
|
|
Total
|
$10,069
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
RESULTS
OF OPERATIONS (CONTINUED)
|
ITEM
7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
|
FINANCIAL
DISCLOSURE
|
ITEM
9A(T).
|
CONTROLS
AND PROCEDURES
|
ITEM
9B.
|
OTHER
INFORMATION
|
PART
III
|
ITEM
10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
AND
RELATED STOCKHOLDER MATTERS
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for issuance under equity compensation
plans, excluding securities reflected in column (a)
|
(a)
|
(b)
|
(c)
|
|
Equity
compensation plans
approved by
security holders
|
1,564,594
|
$3.87
|
426,100
|
Equity
compensation plans
not approved by
security holders
|
____________________
|
____________________
|
____________________
|
Total
|
1,564,594
|
$3.87
|
426,100
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
|
INDEPENDENCE
|
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
PART
IV
|
ITEM
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
1. and 2. Financial Statement
Schedules -- See "Index to Financial Statements and Schedules" on
F-1.
|
||
3. See Item (b)
below.
|
|||
(b)
|
Exhibits
|
||
(3)(a)
|
Articles
of Incorporation, as amended; incorporated by reference to Exhibit 3(a) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
October 31, 1994.
|
||
(3)(b)
|
Certificate
of Amendment of Articles of Incorporation; incorporated by reference to
Exhibit A to the Registrant's Proxy Statement, dated February 6, 1996,
filed with the Securities and Exchange Commission on January 29,
1996.
|
||
(3)(c)
|
Certificate
of Amendment of Articles of Incorporation; incorporated by reference to
Exhibit B to the Registrant's Proxy Statement, dated February 6, 1996,
filed with the Securities and Exchange Commission on January 29,
1996.
|
||
(3)(d)
|
Amended
and Restated Bylaws; incorporated by reference to Exhibit 3(d) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
27, 2008.
|
||
(4)(a)
|
Registration
Rights Agreement, dated March 11, 1996, by and between RCM Technologies,
Inc. and the former shareholders of The Consortium; incorporated by
reference to Exhibit (c)(2) to the Registrant's Current Report on Form 8-K
dated March 19, 1996, filed with the Securities and Exchange Commission on
March 20, 1996.
|
||
*
|
(10)(a)
|
RCM
Technologies, Inc. 1992 Incentive Stock Option Plan; incorporated by
reference to Exhibit A to the Registrant's Proxy Statement, dated March 9,
1992, filed with the Securities and Exchange Commission on March 9,
1992.
|
|
(10)(b)
|
RCM
Technologies, Inc. 1994 Non-employee Director Stock Option Plan;
incorporated by reference to the appendix to the Registrant's Proxy
Statement, dated March 31, 1994, filed with the Securities and Exchange
Commission on March 28, 1994.
|
||
*
|
(10)(c)
|
RCM
Technologies, Inc. 1996 Executive Stock Option Plan, dated August 15,
1996; incorporated by reference to Exhibit 10(l) to the Registrant’s
Annual Report on Form 10-K for the fiscal year ended October 31, 1996,
filed with the Securities and Exchange Commission on January 21, 1997 (the
“1996 10-K”).
|
|
*
|
(10)(d)
|
RCM
Technologies, Inc. 2000 Employee Stock Incentive Plan, dated January 6,
2000; incorporated by reference to Exhibit A to the Registrant’s Proxy
Statement, dated March 3, 2000, filed with the Securities and Exchange
Commission on February 28, 2000.
|
|
*
|
(10)(e)
|
Second
Amended and Restated Termination Benefits Agreement, dated March 18, 1997,
between the Registrant and Leon Kopyt; incorporated by reference to
Exhibit 10(g) to the Registrant’s Registration Statement on Form S-1 (SEC
File No. 333-23753), filed with the Securities and Exchange Commission on
March 21, 1997.
|
|
*
|
(10)(f)
|
Amended
and Restated Employment Agreement, dated November 30, 1996, between the
Registrant, Intertec Design, Inc. and Leon Kopyt; incorporated by
reference to Exhibit 10(g) to the 1996
10-K.
|
ITEM
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
(CONTINUED)
|
(b)
|
Exhibits
(Continued)
|
||
(10)(g)
|
Amended
and Restated Loan and Security Agreement, dated May 31, 2002, between RCM
Technologies, Inc. and all of its Subsidiaries with Citizens Bank of
Pennsylvania, as Administrative Agent and Arranger; incorporated by
reference to Exhibit 10 to the Registrant’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2002, filed with the Securities and
Exchange Commission on August 5, 2002 (the “Second Quarter 2002
10-Q”).
|
||
*
|
(10)(h)
|
Severance
Agreement, dated June 10, 2002, between RCM Technologies, Inc. and Leon
Kopyt; incorporated by reference to Exhibit 10a to the Second Quarter 2002
10-Q.
|
|
*
|
(10)(i)
|
Exhibit
A to Severance Agreement General Release; incorporated by reference to
Exhibit 10b to the Second Quarter 2002 10-Q.
|
|
(10)(j)
|
Amendment
and Modification to Amended and Restated Loan and Security
Agreement, dated December 30, 2002, between RCM Technologies, Inc. and all
of its Subsidiaries and Citizens Bank of Pennsylvania as
Administrative Agent and Arranger; incorporated by reference to Exhibit
10(k) to the Registrant’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, filed with the Securities and Exchange Commission
on February 28, 2003, as amended on March 3, 2003 (the “2002
10-K”).
|
||
(10)(k)
|
Second
Amendment and Modification to Amended and Restated Loan and Security
Agreement, dated February 26, 2003, between RCM Technologies, Inc. and all
of its Subsidiaries and Citizens Bank of Pennsylvania as Administrative
Agent and Arranger; incorporated by reference to Exhibit 10(l) to
2002 10-K).
|
||
(10)(l)
|
Third
Amendment and Modification to Amended and Restated Loan and Security
Agreement, dated October 1, 2003, between RCM Technologies, Inc. and all
of its Subsidiaries and Citizens Bank of Pennsylvania as Administrative
Agent and Arranger; incorporated by reference to Exhibit 99.H to the
Registrant’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2003, filed with the Securities and Exchange Commission on November 6,
2003.
|
||
(10)(m)
|
Fourth
Amendment and Modification to Amended and Restated Loan and Security
Agreement, dated July 23, 2004, between RCM Technologies, Inc. and all of
its Subsidiaries and Citizens Bank of Pennsylvania as Administrative Agent
and Arranger; incorporated by reference to Exhibit 10(a) to the
Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 3,
2004, filed with the Securities and Exchange Commission on August 5,
2004.
|
||
(10)(n)
|
Fifth
Amendment and Modification to Amended and Restated Loan and Security
Agreement dated August 7, 2006, between RCM Technologies, Inc. and all of
its Subsidiaries and Citizens Bank of Pennsylvania as Administrative Agent
and Arranger; incorporated by reference to Exhibit 10(a) to the
Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 1,
2006, filed with the Securities and Exchange Commission on August 10,
2006.
|
||
*
|
(10)(o)
|
Amendment
No. 1, dated December 12, 2007, to the Amended and Restated Employment
Agreement, entered into on November 30, 1996, between Leon Kopyt and RCM
Technologies, Inc.; incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K dated December 12, 2007, filed
with the Securities and Exchange Commission on December 12, 2007 (the
“December 2007 8-K”).
|
|
*
|
(10)(p)
|
Amendment
No. 1, dated December 12, 2007, to the Second Amended and Restated
Termination Benefits Agreement, made March 18, 1997, between Leon Kopyt
and RCM Technologies, Inc.; incorporated by reference to Exhibit 10.2 to
the December 2007 8-K.
|
ITEM
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
(CONTINUED)
|
(b)
|
Exhibits
(Continued)
|
||
*
|
(10)(q)
|
Amendment
No. 1, dated December 12, 2007, to the Severance Agreement, entered into
on June 12, 2002, between Leon Kopyt and RCM Technologies, Inc.;
incorporated by reference to Exhibit 10.3 to the December 2007
8-K.
|
|
*
|
(10)(t)
|
The
RCM Technologies, Inc. 2007 Omnibus Equity Compensation Plan; incorporated
by reference to Annex A to the Registrant’s Proxy Statement, dated April
20, 2007, filed with the Securities and Exchange Commission on April 19,
2007.
|
|
*
|
(10)(u)
|
Separation
and Release Agreement, dated August 27, 2008; incorporated by reference to
Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated August
21, 2008, filed with the Securities and Exchange Commission on August 27,
2008.
|
|
(10)(v)
|
Second
Amended and Restated Loan and Security Agreement dated as of February 19,
2009, between RCM Technologies, Inc. and all of its Subsidiaries, Citizens
Bank of Pennsylvania as Administrative Agent and Arranger and the
Financial Institutions Named therein as Lenders; incorporated by reference
to Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated
February 19, 2009, filed with the Securities and Exchange Commission on
February 25, 2009.
|
||
(21)
|
Subsidiaries
of the Registrant. (Filed herewith)
|
||
23.1
|
Consent
of Amper, Politziner & Mattia, LLP. (Filed
herewith)
|
||
23.2
|
Consent
of Grant Thornton LLP. (Filed herewith)
|
||
31.1
|
Certifications
of Chief Executive Officer Required by Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended. (Filed
herewith)
|
||
31.2
|
Certifications
of Chief Financial Officer Required by Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended. (Filed
herewith)
|
||
32.1
|
Certifications
of Chief Executive Officer Required by Rule 13a-14(b) of the Securities
Exchange Act of 1934, as amended. (This exhibit shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended.) (Filed herewith)
|
||
32.2
|
Certifications
of Chief Financial Officer Required by Rule 13a-14(b) of the Securities
Exchange Act of 1934, as amended. (This exhibit shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended.) (Filed herewith)
|
||
*
|
Constitutes
a management contract or compensatory plan or
arrangement.
|
|
SIGNATURES
|
RCM
Technologies, Inc.
|
|||
Date: March
8, 2010
|
By:
|
/s/ Leon Kopyt
|
|
Leon
Kopyt
|
|||
Chairman,
President, Chief Executive Officer and Director
|
|||
Date: March
8, 2010
|
By:
|
/s/ Kevin D. Miller
|
|
Kevin
D. Miller
|
|||
Chief
Financial Officer, Treasurer and Secretary
|
Date: March
8, 2010
|
By:
|
/s/ Leon Kopyt
|
|
Leon
Kopyt
|
|||
Chairman,
President, Chief Executive Officer (Principal Executive Officer) and
Director
|
|||
Date: March
8, 2010
|
By:
|
/s/ Kevin D. Miller
|
|
Kevin
D. Miller
|
|||
Chief
Financial Officer, Treasurer and Secretary (Principal Financial and
Accounting Officer)
|
|||
Date: March
8, 2010
|
By:
|
/s/ Norman S. Berson
|
|
Norman
S. Berson
|
|||
Director
|
|||
Date: March
8, 2010
|
By:
|
/s/ Robert B. Kerr
|
|
Robert
B. Kerr
|
|||
Director
|
|||
Date: March
8, 2010
|
By:
|
/s/ Lawrence Needleman
|
|
Lawrence
Needleman
|
|||
Director
|
RCM
TECHNOLOGIES, INC.
|
FORM
10-K
|
INDEX
TO FINANCIAL STATEMENTS AND SCHEDULES
|
Page
|
|
Consolidated
Balance Sheets, January 2, 2010 and December 27, 2008
|
F-2
|
Consolidated
Statements of Income, Years Ended January 2, 2010 and
December
27, 2008
|
F-3
|
Consolidated
Statements of Changes in Stockholders' Equity and
Consolidated
Statements of Comprehensive Income (Loss), Years Ended January 2,
2010
and December 27, 2008
|
F-4
|
Consolidated
Statements of Cash Flows, Years Ended January 2, 2010 and
December 27, 2008
|
F-5
|
Notes
to Consolidated Financial Statements
|
F-6
|
Reports
of Independent Registered Public Accounting Firms
|
F-32
|
Schedule
II
|
F-34
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
January
2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
January
2,
|
December
27,
|
|||||
2010
|
2008
|
|||||
Current
assets:
|
||||||
Cash
and cash equivalents
|
$10,942
|
$815
|
||||
Accounts
receivable, net
|
46,353
|
55,770
|
||||
Prepaid
expenses and other current assets
|
2,677
|
3,012
|
||||
Deferred
income tax assets
|
705
|
2,204
|
||||
Total
current assets
|
60,677
|
61,801
|
||||
Property
and equipment, net of accumulated depreciation
|
||||||
and
amortization of $6,460 (January 2, 2010) and
$5,692
(December 27, 2008)
|
4,768
|
5,586
|
||||
Other
assets:
|
||||||
Deposits
|
212
|
264
|
||||
Goodwill
|
8,260
|
6,538
|
||||
Intangible
assets, net
|
464
|
276
|
||||
Deferred
income tax assets
|
3,828
|
4,376
|
||||
Total
other assets
|
12,764
|
11,454
|
||||
Total
assets
|
$78,209
|
$78,841
|
Current
liabilities:
|
||||||
Borrowings
under line of credit
|
$ -
|
$4,900
|
||||
Accounts
payable and accrued expenses
|
7,501
|
8,375
|
||||
Accrued
payroll and related costs
|
6,512
|
9,677
|
||||
Income
taxes payable
|
-
|
538
|
||||
Total current liabilities |
14,013
|
23,490
|
Contingent
consideration
|
893
|
-
|
||||
Stockholders'
equity:
|
||||||
Preferred
stock, $1.00 par value; 5,000,000 shares authorized;
|
||||||
no
shares issued or outstanding
|
-
|
-
|
||||
Common
stock, $0.05 par value; 40,000,000 shares authorized;
|
||||||
12,960,778
and 12,774,026 shares issued and outstanding
at
January 2, 2010 and December 27, 2008, respectively
|
648
|
639
|
||||
Additional
paid-in capital
|
107,262
|
106,788
|
||||
Accumulated
other comprehensive income
|
1,267
|
720
|
||||
Accumulated
deficit
|
(45,874
|
)
|
(52,796
|
)
|
||
Total
stockholders' equity
|
63,303
|
55,351
|
||||
Total
liabilities and stockholders’ equity
|
$78,209
|
$78,841
|
||||
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
January
2,
|
December
27,
|
|||||
2010
|
2008
|
|||||
Revenues
|
$189,393
|
$209,277
|
||||
Cost
of services
|
142,558
|
155,302
|
||||
Gross
profit
|
46,835
|
53,975
|
||||
Operating
costs and expenses
|
||||||
Selling,
general and administrative
|
43,885
|
46,568
|
||||
Depreciation
and amortization
|
1,621
|
2,067
|
||||
Bad
debt - note receivable
|
-
|
6,090
|
||||
Impairment
of goodwill and intangible assets
|
-
|
43,315
|
||||
45,506
|
98,040
|
|||||
Operating
income (loss)
|
1,329
|
(44,065
|
)
|
|||
Other
income (expense)
|
||||||
Interest
(expense) income, net
|
(55
|
)
|
(230
|
)
|
||
Gain
(loss) on foreign currency transactions
|
85
|
(75
|
)
|
|||
Legal
settlement
|
9,750
|
-
|
||||
Other
|
-
|
7
|
||||
9,780
|
(298
|
)
|
||||
Income
(loss) before income taxes
|
11,109
|
(44,363
|
)
|
|||
Income
tax expense (benefit)
|
4,187
|
(4,558
|
)
|
|||
Net
income (loss)
|
$6,922
|
($39,805
|
)
|
Basic
and diluted earnings (loss) per common share
|
|||||
Net
income (loss)
|
$0.54
|
($3.15
|
)
|
||
Weighted
average number of common
shares
outstanding
|
12,888,539
|
12,647,127
|
|||
Weighted
average number of common and common
equivalent
shares outstanding
|
12,892,530
|
12,647,127
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Common
Stock
|
Additional
Paid-in
|
Accumulated
Other
Comprehensive
|
Accumulated
|
|||||||||
Shares
|
Amount
|
Capital
|
Income
|
Deficit
|
Total
|
|||||||
Balance,
December 29, 2007
|
12,058,689
|
$603
|
$102,951
|
$1,484
|
($12,990
|
)
|
$92,048
|
|||||
Issuance
of stock under employee
stock
purchase plan
|
15,337
|
1
|
55
|
-
|
-
|
56
|
||||||
Translation
adjustment
|
-
|
-
|
-
|
(764
|
)
|
-
|
(764
|
)
|
||||
Stock
based compensation expense
|
-
|
-
|
100
|
-
|
-
|
100
|
||||||
Shares
issued for acquired
companies
|
700,000
|
35
|
3,682
|
-
|
-
|
3,717
|
||||||
Net
loss
|
-
|
-
|
-
|
-
|
(39,805
|
)
|
(39,805
|
)
|
||||
Balance,
December 27, 2008
|
12,774,026
|
639
|
106,788
|
720
|
(52,796
|
)
|
55,351
|
|||||
Issuance
of stock under employee
stock
purchase plan
|
86,752
|
4
|
79
|
-
|
-
|
83
|
||||||
Translation
adjustment
|
-
|
-
|
-
|
547
|
-
|
547
|
||||||
Stock
based compensation expense
|
-
|
-
|
181
|
-
|
-
|
181
|
||||||
Shares
issued for acquired
company
|
100,000
|
5
|
214
|
-
|
-
|
219
|
||||||
Net
income
|
-
|
-
|
-
|
-
|
6,922
|
6,922
|
||||||
Balance,
January 2, 2010
|
12,960,778
|
$648
|
$107,262
|
$1,267
|
($45,874
|
)
|
$63,303
|
January
2,
|
December
27,
|
|||
2010
|
2008
|
|||
Net
income (loss)
|
$6,922
|
($39,805)
|
||
Foreign
currency translation adjustment
|
547
|
(764)
|
||
Comprehensive
income (loss)
|
$7,469
|
($40,569)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
January
2,
|
December
27,
|
||||||
2010
|
2008
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income (loss)
|
$6,922
|
($39,805
|
)
|
||||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
|
|||||||
Depreciation
and amortization
|
1,625
|
2,056
|
|||||
Impairment
of goodwill and intangible assets
|
-
|
43,315
|
|||||
Loss
(gain) on disposal of assets
|
88
|
(7
|
)
|
||||
Stock
based compensation expense
|
181
|
100
|
|||||
Provision
for losses on (recovery from) accounts receivable
|
115
|
(641
|
)
|
||||
Provision
for losses on note receivable
|
-
|
6,090
|
|||||
Deferred
income tax expense (benefit)
|
2,047
|
(5,869
|
)
|
||||
Changes
in assets and liabilities, net of acquisitions:
|
|||||||
Accounts
and note receivable
|
10,173
|
(10,275
|
)
|
||||
Prepaid
expenses and other current assets
|
643
|
(1,582
|
)
|
||||
Accounts
payable and accrued expenses
|
(1,142
|
)
|
906
|
||||
Accrued
payroll and related costs
|
(3,386
|
)
|
1,368
|
||||
Income
taxes payable
|
(875
|
)
|
(463
|
)
|
|||
Total
adjustments
|
9,469
|
34,998
|
|||||
Net
cash provided by (used in) operating activities
|
16,391
|
(4,807
|
)
|
Cash
flows from investing activities:
|
||||||
Property
and equipment acquired
|
(802
|
)
|
(2,667
|
)
|
||
Proceeds
from equipment disposal
|
-
|
25
|
||||
Decrease
(increase) in deposits
|
52
|
(138
|
)
|
|||
Cash
paid for acquisitions, net of working capital
|
(900
|
)
|
(7,584
|
)
|
||
Net
cash used in investing activities
|
(1,650
|
)
|
(10,364
|
)
|
||
Cash
flows from financing activities:
|
||||||
Sale
of stock for employee stock purchase plan
|
83
|
55
|
||||
Net
(repayments) borrowings of line of credit
|
(4,900
|
)
|
4,900
|
|||
Net
cash (used in) provided by financing activities
|
(4,817
|
)
|
4,955
|
|||
Effect
of exchange rate changes on cash and cash equivalents
|
203
|
(611
|
)
|
|||
Increase
(decrease) in cash and cash equivalents
|
10,127
|
(10,827
|
)
|
|||
Cash
and cash equivalents at beginning of year
|
815
|
11,642
|
||||
Cash
and cash equivalents at end of year
|
$10,942
|
$815
|
||||
Supplemental
cash flow information:
|
||||||
Cash
paid for:
|
||||||
Interest
|
$67
|
$192
|
||||
Income
taxes
|
$2,510
|
$2,483
|
||||
Non-cash
investing activities:
|
||||||
Issuance
of common stock for acquired business
|
$219
|
$3,717
|
||||
Contingent
consideration recorded, not paid
|
$893
|
$ -
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
Years Ended
|
||||
January
2,
2010
|
December
27,
2008
|
|||
Basic
shares outstanding
|
12,888,539
|
12,647,127
|
||
Dilutive
effect of stock options
|
3,991
|
-
|
||
Dilutive
shares
|
12,892,530
|
12,647,127
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
January
2,
|
December
27,
|
|||
2010
|
2008
|
|||
Exercise
of options outstanding
|
1,564,594
|
1,293,900
|
||
Future
grants of options
|
426,100
|
699,294
|
||
Total
|
1,990,694
|
1,993,194
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
Years Ended
|
||||
January
2,
2010
|
December
27,
2008
|
|||
Billed
|
$37,504
|
$45,855
|
||
Accrued
and unbilled
|
2,160
|
7,044
|
||
Work-in-progress
|
7,887
|
3,953
|
||
Allowance
for doubtful accounts
and
sales discounts
|
(1,198
|
)
|
(1,082
|
)
|
Accounts
receivable, net
|
$46,353
|
$55,770
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
Years
|
Amount
|
2010
|
$2,800
|
2011
|
1,650
|
Thereafter
|
850
|
Maximum
Deferred Consideration
|
$5,300
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Customer
relationships
|
$2,260
|
Covenants-not-to-compete
|
424
|
Goodwill
|
5,125
|
Equipment
|
446
|
$8,255
|
Customer
relationships
|
$835
|
Covenants-not-to-compete
|
41
|
Goodwill
|
2,175
|
Equipment
|
36
|
$3,087
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Customer
relationships
|
$253
|
Covenants-not-to-compete
|
38
|
Goodwill
|
728
|
$1,019
|
Fiscal
Years Ended
|
||||
January
2,
2010
|
December
27,
2008
|
|||
Revenues
|
$191,981
|
$221,963
|
||
Operating
income (loss)
|
$1,429
|
($43,113
|
)
|
|
Net
income (loss)
|
$6,993
|
($39,265
|
)
|
|
Diluted
earnings (loss) per share
|
$0.54
|
($3.05
|
)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
January
2,
|
December
27,
|
|||
2010
|
2008
|
|||
Equipment
and furniture
|
$3,000
|
$2,893
|
||
Computers
and systems
|
7,046
|
7,232
|
||
Leasehold
improvements
|
1,182
|
1,153
|
||
11,228
|
11,278
|
|||
Less:
accumulated depreciation and amortization
|
6,460
|
5,692
|
||
$4,768
|
$5,586
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Information
Technology
|
Engineering
|
Commercial
|
Total
|
||||||
Balance
as of December 29, 2007
|
$29,643
|
$8,141
|
$1,804
|
$39,588
|
|||||
Goodwill
acquired during 2008
|
7,300
|
100
|
-
|
7,400
|
|||||
Goodwill
impairment during 2008
|
(32,209
|
)
|
(8,241
|
)
|
-
|
(40,450
|
)
|
||
Balance
as of December 27, 2008
|
$4,734
|
$ -
|
$1,804
|
$6,538
|
|||||
Goodwill
acquired during 2009
|
729
|
100
|
-
|
829
|
|||||
Contingent
consideration recorded
|
893
|
-
|
-
|
893
|
|||||
Balance
as of January 2, 2010
|
$6,356
|
$100
|
$1,804
|
$8,260
|
Information
Technology
|
Engineering
|
Commercial
|
Total
|
|||||
Balance
as of December 29, 2007
|
$236
|
$113
|
$ -
|
$349
|
||||
Intangibles
acquired during 2008
|
3,560
|
-
|
-
|
3,560
|
||||
Amortization
of intangibles during 2008
|
(733
|
)
|
(34
|
)
|
-
|
(767
|
)
|
|
Intangibles
impairment during 2008
|
(2,866
|
)
|
-
|
-
|
(2,866
|
)
|
||
Balance
as of December 27, 2008
|
$197
|
$79
|
$ -
|
$276
|
||||
Intangibles
acquired during 2009
|
291
|
-
|
-
|
291
|
||||
Amortization
of intangibles during 2009
|
(68
|
)
|
(35
|
)
|
-
|
(103
|
)
|
|
Balance
as of January 2, 2010
|
$420
|
$44
|
$ -
|
$464
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Schedule
Intangible Asset Classes
|
||||||||
Information
Technology
|
Engineering
|
Commercial
Services
|
Total
|
|||||
Balance
as of January 2, 2010
|
||||||||
Restricted
covenants
|
$33
|
$8
|
$ -
|
$41
|
||||
Customer
relationships
|
387
|
36
|
-
|
423
|
||||
$420
|
$44
|
$ -
|
$464
|
Schedule
Intangible Asset Amortization
|
||||||||
Fiscal
Year
|
Information
Technology
|
Engineering
|
Commercial
Services
|
Total
|
||||
2010
|
$105
|
$34
|
$ -
|
$139
|
||||
2011
|
105
|
10
|
-
|
115
|
||||
2012
|
105
|
-
|
-
|
105
|
||||
Thereafter
|
105
|
-
|
-
|
105
|
||||
$420
|
$44
|
$ -
|
$464
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
Years Ended
|
||||
January
2,
2010
|
December
27,
2008
|
|||
Weighted
average risk-free interest rate
|
2.23%
|
3.04%
|
||
Expected
term of option
|
5
years
|
5
years
|
||
Expected
stock price volatility
|
67%
|
61%
|
||
Expected
dividend yield
|
$0.0
|
$0.0
|
||
Annual
forfeiture rate
|
12.9%
|
16.1%
|
||
Weighted-average
grant date fair value
|
$1.05
|
$2.57
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
All
Stock Options Outstanding
|
||||
Shares
|
Weighted
Average
Exercise
Price
|
|||
Options
outstanding as of December 29, 2007
|
1,462,000
|
|
$4.48
|
|
Options
granted
|
56,950
|
|
4.93
|
|
Options
exercised
|
-
|
|
-
|
|
Options
forfeited/cancelled
|
(225,050
|
)
|
4.60
|
|
|
||||
Options
outstanding as of December 27, 2008
|
1,293,900
|
|
$4.48
|
|
|
||||
Options
exercisable as of December 27, 2008
|
1,214,500
|
|||
Intrinsic
value of outstanding stock options as of December 27,
2008
|
$0.0
|
|||
Options
outstanding as of December 27, 2008
|
1,293,900
|
|
$4.48
|
|
Options
granted
|
365,194
|
$1.84
|
||
Options
exercised
|
-
|
-
|
||
Options
forfeited/cancelled
|
(94,500
|
)
|
$4.45
|
|
Options
outstanding as of January 2, 2010
|
1,564,594
|
$3.87
|
||
Options
exercisable as of January 2, 2010
|
1,162,400
|
$4.32
|
||
Intrinsic
value of outstanding stock options as
of
January 2, 2010
|
$231,088
|
Range
of
Exercise
Prices
|
Number
of
Outstanding
Options
|
Weighted-Average
Remaining
Contractual
Life
|
Weighted-Average
Exercise
Price
|
||||||
Outstanding
|
Vested
|
Outstanding
|
Vested
|
Outstanding
|
Vested
|
||||
$0.95
- $0.95
|
20,000
|
0
|
9.18
|
-
|
$0.95
|
$0.00
|
|||
$1.73
- $2.60
|
335,194
|
0
|
9.62
|
-
|
$1.91
|
$0.00
|
|||
$3.00
- $4.50
|
818,500
|
818,500
|
3.89
|
3.89
|
$3.95
|
$3.95
|
|||
$4.70
- $7.05
|
355,900
|
333,900
|
4.36
|
4.13
|
$5.11
|
$5.07
|
|||
$9.16
- $9.81
|
35,000
|
10,000
|
7.54
|
7.53
|
$9.62
|
$9.16
|
|||
$0.95
- $9.81
|
1,564,594
|
1,162,400
|
5.37
|
3.99
|
$3.87
|
$4.32
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
Years
|
Amount
|
|
2010
|
$3,842
|
|
2011
|
3,176
|
|
2012
|
2,017
|
|
2013
|
791
|
|
2014
|
147
|
|
Thereafter
|
96
|
|
Total
|
$10,069
|
Years
Ended
|
|||||
January
2,
2010
|
December
27,
2008
|
||||
Current
|
|||||
Federal
|
$622
|
$ -
|
|||
State
and local
|
719
|
189
|
|||
Foreign
|
799
|
1,122
|
|||
2,140
|
1,311
|
||||
Deferred
|
|||||
Federal
|
2,083
|
(4,549
|
)
|
||
State
|
(36
|
)
|
(1,320
|
)
|
|
2,047
|
(5,869
|
)
|
|||
Total
|
$4,187
|
($4,558
|
)
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
January
2,
2010
|
December
27,
2008
|
|||
Tax at
statutory rate (credit)
|
34.0
|
%
|
34.0
|
%
|
State
income taxes, net of Federal
income
tax benefit
|
4.1
|
1.7
|
||
Permanent
differences
|
1.3
|
(0.3
|
)
|
|
Foreign
income tax effect
|
(1.7
|
)
|
(0.5
|
)
|
Non-deductible
impairment of
goodwill
and intangible assets
|
-
|
(23.1
|
)
|
|
Other,
net
|
-
|
(1.5
|
)
|
|
Total
income tax expense
|
37.7%
|
10.3
|
%
|
January
2,
2010
|
December
27,
2008
|
January
2,
2010
|
December
27,
2008
|
|||||
Current
|
Long
Term
|
|||||||
Deferred
tax assets:
|
||||||||
Loss
carryforwards
|
$208
|
$2,387
|
$ -
|
$ -
|
||||
Allowance
for doubtful accounts
|
479
|
432
|
-
|
-
|
||||
Alternative
minimum tax credits
|
-
|
178
|
-
|
-
|
||||
Acquisition
amortization, net
|
-
|
-
|
3,828
|
4,376
|
||||
Reserves
and accruals
|
639
|
156
|
-
|
-
|
||||
Other
|
-
|
43
|
-
|
-
|
||||
Valuation
allowance
|
(208
|
)
|
(358
|
)
|
-
|
-
|
||
Net
|
1,118
|
2,888
|
3,828
|
4,376
|
||||
Deferred
tax liabilities:
|
||||||||
Prepaid
expense deferral
|
(413
|
)
|
(634
|
)
|
-
|
-
|
||
(413
|
)
|
(634
|
)
|
-
|
-
|
|||
Net
deferred tax assets
|
$705
|
$2,204
|
$3,828
|
$4,376
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
2009
|
Information
Technology
|
Engineering
|
Commercial
|
Corporate
|
Total
|
|||||
Revenue
|
$87,896
|
$62,220
|
$39,277
|
$
-
|
$189,393
|
|||||
Cost
of services
|
66,209
|
48,033
|
28,316
|
-
|
142,558
|
|||||
Selling,
general and administrative
|
23,435
|
10,841
|
9,609
|
-
|
43,885
|
|||||
Depreciation
and amortization
|
741
|
684
|
196
|
-
|
1,621
|
|||||
Operating
(loss) income
|
($2,489
|
)
|
$2,662
|
$1,156
|
$
-
|
$1,329
|
||||
Total
assets
|
$21,585
|
$24,920
|
$9,927
|
$21,777
|
$78,209
|
|||||
Capital
expenditures
|
$71
|
$433
|
$2
|
$296
|
$802
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Fiscal
2008
|
Information
Technology
|
Engineering
|
Commercial
|
Corporate
|
Total
|
|||||
Revenue
|
$103,446
|
$59,251
|
$46,580
|
$
-
|
$209,277
|
|||||
Cost
of services
|
76,223
|
45,335
|
33,744
|
-
|
155,302
|
|||||
Selling,
general and administrative
|
26,342
|
10,061
|
10,165
|
-
|
46,568
|
|||||
Depreciation
and amortization
|
1,378
|
512
|
177
|
-
|
2,067
|
|||||
Bad
debt - note receivable
|
-
|
6,090
|
-
|
-
|
6,090
|
|||||
Impairment
of goodwill and
intangible
assets
|
35,075
|
8,240
|
-
|
-
|
43,315
|
|||||
Operating
(loss) income
|
($35,572
|
)
|
($10,987
|
)
|
$2,494
|
$
-
|
($44,065
|
)
|
||
Total
assets
|
$22,419
|
$27,941
|
$14,059
|
$14,422
|
$78,841
|
|||||
Capital
expenditures
|
$122
|
$367
|
$168
|
$2,010
|
$2,667
|
January
2,
|
December
27,
|
||||
2010
|
2008
|
||||
Revenues
|
|||||
United
States
|
$163,572
|
$185,238
|
|||
Canada
|
22,540
|
20,605
|
|||
Puerto
Rico
|
3,281
|
3,434
|
|||
$189,393
|
$209,277
|
||||
Total
Assets
|
|||||
United
States
|
$66,020
|
$70,515
|
|||
Canada
|
10,852
|
7,433
|
|||
Puerto
Rico
|
1,337
|
983
|
|||
$78,209
|
$78,841
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
Sales
|
Gross
Profit
|
Net
Income
|
Basic
and
Diluted
Net Income Per Share
|
|||||
1st
Quarter
|
$48,048
|
$10,941
|
$5,553
|
$0.43
|
||||
2nd
Quarter
|
47,223
|
11,578
|
246
|
0.02
|
||||
3rd
Quarter
|
44,751
|
11,840
|
437
|
0.03
|
||||
4th
Quarter
|
49,371
|
12,476
|
686
|
0.06
|
||||
Total
|
$189,393
|
$46,835
|
$6,922
|
$0.54
|
Sales
|
Gross
Profit
|
Net
(Loss)
Income
|
Diluted
Net
(Loss) Income
Per
Share (a)
|
|||||
1st
Quarter
|
$49,114
|
$12,298
|
($2,669
|
)
|
($0.22
|
)
|
||
2nd
Quarter
|
55,011
|
15,150
|
1,440
|
0.11
|
||||
3rd
Quarter
|
51,617
|
13,255
|
565
|
0.04
|
||||
4th
Quarter(a)
|
53,535
|
13,272
|
(39,141
|
)
|
(3.06
|
)
|
||
Total
|
$209,277
|
$53,975
|
($39,805
|
)
|
($3.15
|
)
|
(a)
|
In
the fourth quarter of 2008, the Company recorded a cumulative adjustment
to income tax (benefit) expense to properly record deferred tax
liabilities associated with acquisitions in 2008 and prior to 2008
totaling an increase to deferred tax liabilities of $1.3 million and an
increase to deferred tax expense of $1.3 million. Of that total,
approximately $0.6 million relates to years prior to 2006, and $0.2
million relates to each of the years 2006 and 2007, and $0.3 million
relates to the prior interim quarters of 2008. Management believes
that the adjustments related to all prior years and prior interim quarters
of 2008 are immaterial to those financial statements. Additionally,
in the fourth quarter of 2008, the Company recorded a goodwill impairment
charge totaling $37.6 million, net of
tax.
|
RCM
TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Years
Ended January 2, 2010 and December 27, 2008
(Dollars
in thousands, except share and per share amounts, unless otherwise
indicated)
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
|
SCHEDULE
II
|
Column
A
|
Column
B
|
Column
C
|
Column
D
|
Column
E
|
|||||
Additions
|
|||||||||
Description
|
Balance
at
Beginning
of
Period
|
Charged
to
Costs
and
Expenses
|
Charged
to
Other
Accounts
|
Deduction
|
Balance
at
End
of
Period
|
||||
Fiscal
Year Ended
January
2, 2010
|
|||||||||
Allowance
for doubtful
accounts
on trade receivables
|
$1,082
|
$1,140
|
$ -
|
$1,024
|
$1,198
|
||||
Fiscal
Year Ended
December
27, 2008
|
|||||||||
Allowance
for doubtful
accounts
on trade
receivables
|
$1,723
|
$7,674
|
$ -
|
$8,315
|
$1,082
|
EXHIBIT
INDEX
|
(21)
|
Subsidiaries
of the Registrant.
|
23.1
|
Consent
of Amper, Politziner & Mattia, LLP.
|
23.2
|
Consent
of Grant Thornton LLP.
|
31.1
|
Certification
of Chief Executive Officer Required by Rule 13a-14(b) of the Securities
Exchange Act of 1934, as amended.
|
31.2
|
Certification
of Chief Financial Officer Required by Rule 13a-14(b) of the Securities
Exchange Act of 1934, as amended.
|
32.1
|
Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The
Sarbanes-Oxley
Act of 2002.
|
32.2
|
Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The
Sarbanes-Oxley
Act of 2002.
|
EXHIBIT
21
|
EXHIBIT
23.1
|
EXHIBIT
23.2
|
EXHIBIT
31.1
|
Date:
March 11, 2010
|
/s/
|
Leon
Kopyt
|
Leon
Kopyt
Chairman
and Chief Executive Officer
|
EXHIBIT
31.2
|
Date:
March 11, 2010
|
/s/
|
Kevin
D. Miller
|
Kevin
D. Miller
Chief
Financial Officer, Treasurer, and
Secretary
|
EXHIBIT
32.1
|
/s/
|
Leon
Kopyt
|
Leon
Kopyt
Chief
Executive Officer
March
11, 2010
|
EXHIBIT
32.2
|
/s/
|
Kevin
D. Miller
|
Kevin
D. Miller
Chief
Financial Officer
March
11, 2010
|