RCM Technologies, Inc. (NasdaqGM: RCMT), 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 engineering, specialty health care, and
information technology services, today announced financial results
for the thirteen and twenty-six weeks ended July 1, 2023.
RCM Technologies reported revenue of $67.0 million
for the thirteen weeks ended July 1, 2023 (the current period), a
decrease of 9.8% compared to $74.3 million for the thirteen weeks
ended July 2, 2022 (the comparable prior-year period). Gross profit
was $18.8 million for the current period, a 13.5% decrease compared
to $21.7 million for the comparable prior-year period. The
Company experienced GAAP operating income of $5.7 million for the
current period compared to $8.2 million for the comparable
prior-year period. The Company experienced GAAP net income of
$4.0 million, or $0.47 per diluted share, for the current period
compared to $6.0 million, or $0.57 per diluted share, for the
comparable prior-year period. The Company experienced adjusted
EBITDA (non-GAAP) of $6.0 million for the current period compared
to $8.4 million for the comparable prior-year period.
RCM Technologies reported revenue of $134.2
million for the twenty-six weeks ended July 1, 2023 (the current
period), a decrease of 14.2% compared to $156.3 million for the
twenty-six weeks ended July 2, 2022 (the comparable prior-year
period). Gross profit was $37.8 million for the current period, a
16.2% decrease compared to $45.1 million for the comparable
prior-year period. The Company experienced GAAP operating
income of $11.5 million for the current period compared to $17.2
million for the comparable prior-year period. The Company
experienced GAAP net income of $7.8 million, or $0.87 per diluted
share, for the current period compared to $12.5 million, or $1.18
per diluted share, for the comparable prior-year period. The
Company experienced adjusted EBITDA (non-GAAP) of $11.7 million for
the current period compared to $17.7 million for the comparable
prior-year period.
Bradley Vizi, Executive Chairman of RCM
Technologies, commented, “Despite a slow start to the year in
Engineering, we made the decision to maintain stride in building
what we believe to be a highly differentiated platform in the
professional service marketplace. Our decision was supported by our
view of the secular growth markets and our strong portfolio of
capabilities, and we now see the business continuing to strengthen
as we move through the year.”
Kevin Miller, Chief Financial Officer of RCM
Technologies, commented, “We believe our strong cash generating
business model and clean balance sheet afford us the ability to
invest in value accretive growth throughout the economic cycle.
Considering normal third quarter seasonality, we believe we are set
up for a healthy double-digit earnings increase in the fourth
quarter, consistent with our long-term trajectory. Also, we expect
to continue to see strong cash flow from operations during the
second half of fiscal 2023.”
Conference Call On Thursday,
August 10, 2023, RCM Technologies will host a conference call to
discuss these results. The call will begin at 11:30 a.m. Eastern
Time. The dial-in number is (800) 285-6670.
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 delivering these solutions to commercial and
government sectors. RCM is also a provider of specialty healthcare
services to major health care institutions and educational
facilities. RCM's offices are located in major metropolitan centers
throughout North America and Serbia. 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. They 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. These statements often include words
such as “may,” “will,” “expect,” “anticipate,” “continue,”
“estimate,” “project,” “intend,” “believe,” “plan,” “seek,”
“could,” “can,” “should,” “are confident” or similar expressions.
In addition, statements that are not historical should also be
considered forward-looking statements. These statements are based
on assumptions that we have made in light of our experience in the
industry, and our perceptions of historical trends, current
conditions, expected future developments, and other factors we
believe are appropriate in these circumstances. Forward-looking
statements include, but are not limited to, those relating to
demand for the Company’s services, expectations regarding our
future revenues and other financial results, our pipeline, and
potential project wins, and our expectations for investment and
growth in our business. Such statements are based on current
expectations that involve several known and unknown risks,
uncertainties, and other factors, which may cause actual events to
be materially different from those expressed or implied by such
forward-looking statements. Risk, uncertainties, and other factors
may emerge from time to time that could cause the Company’s actual
results to differ from those indicated by the forward-looking
statements. Investors are directed to consider such risks,
uncertainties, and other factors described in documents filed by
the Company with the Securities and Exchange Commission, including
our most recent Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q. The Company assumes no obligation (and
expressly disclaims any such obligation) to update any
forward-looking statements contained in this release as a result of
new information or future events or developments, except as may be
required by law.
Tables to Follow
RCM
Technologies, Inc.Condensed Consolidated
Statements of
Operations(Unaudited)(In
Thousands, Except Per Share Amounts) |
|
|
Thirteen Weeks Ended |
|
|
July 1, 2023 |
|
July 2, 2022 |
|
Revenue |
$67,035 |
|
$74,346 |
|
Cost of services |
|
48,275 |
|
|
52,663 |
|
Gross
profit |
|
18,760 |
|
|
21,683 |
|
Selling,
general and administrative |
|
12,723 |
|
|
13,264 |
|
Depreciation
and amortization of property and equipment |
|
242 |
|
|
225 |
|
Amortization
of acquired intangible assets |
|
46 |
|
|
- |
|
Operating
income |
|
5,749 |
|
|
8,194 |
|
Other
expense (income), net |
|
418 |
|
|
(28 |
) |
Income
before income taxes |
|
5,331 |
|
|
8,222 |
|
Income tax
expense |
|
1,348 |
|
|
2,208 |
|
Net
income |
$3,983 |
|
$6,014 |
|
|
|
|
|
|
Diluted net
earnings per share data |
$0.47 |
|
$0.57 |
|
Diluted
weighted average shares outstanding |
|
8,558,396 |
|
|
10,550,896 |
|
|
Twenty-Six Weeks Ended |
|
|
July 1, 2023 |
|
July 2, 2022 |
|
Revenue |
$134,159 |
|
$156,307 |
|
Cost of services |
|
96,375 |
|
|
111,204 |
|
Gross
profit |
|
37,784 |
|
|
45,103 |
|
Selling,
general and administrative |
|
26,119 |
|
|
27,411 |
|
Depreciation
and amortization of property and equipment |
|
513 |
|
|
463 |
|
Amortization
of acquired intangible assets |
|
91 |
|
|
- |
|
Gain on sale
of assets |
|
(395 |
) |
|
- |
|
Operating
income |
|
11,456 |
|
|
17,229 |
|
Other
expense, net |
|
825 |
|
|
24 |
|
Income
before income taxes |
|
10,631 |
|
|
17,205 |
|
Income tax
expense |
|
2,811 |
|
|
4,671 |
|
Net
income |
$7,820 |
|
$12,534 |
|
|
|
|
|
|
Diluted net
earnings per share data |
$0.87 |
|
$1.18 |
|
Diluted
weighted average shares outstanding |
|
8,976,714 |
|
|
10,583,519 |
|
RCM Technologies, Inc.
Supplemental Operating Results on a Non-GAAP Basis
(Unaudited) (In Thousands)
The following non-GAAP measures, which adjust for
the categories of expenses described below, are non-GAAP financial
measures. Our management believes that these non-GAAP
financial measures (“Adjusted operating income,” “EBITDA” and
“Adjusted EBITDA”) are useful information for investors,
shareholders, and other stakeholders of our Company in gauging our
results of operations on an ongoing basis and to enhance investors’
overall understanding of our current financial performance and
period-to-period comparisons. Adjusted operating income,
EBITDA and Adjusted EBITDA should not be considered alternatives to
net income as an indicator of performance. In addition,
Adjusted operating income, EBITDA and Adjusted EBITDA do not take
into account changes in certain assets and liabilities and interest
and income taxes that can affect cash flows. We do not intend
the presentation of these non-GAAP measures to be considered in
isolation or as a substitute for results prepared in accordance
with GAAP. These non-GAAP measures should be read-only in
conjunction with our consolidated financial statements prepared in
accordance with GAAP.
The following unaudited table presents the
Company’s GAAP net income and the corresponding adjustments used to
calculate Adjusted operating income, EBITDA and Adjusted EBITDA for
the thirteen and twenty-six weeks ended July 1, 2023 and July 2,
2022.
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 1,2023 |
|
July 2,2022 |
|
July 1,2023 |
|
July 2,2022 |
|
GAAP net income |
$3,983 |
|
$6,014 |
|
$7,820 |
|
$12,534 |
|
Income tax expense |
|
1,348 |
|
|
2,208 |
|
|
2,811 |
|
|
4,671 |
|
Interest
expense, net |
|
425 |
|
|
69 |
|
|
785 |
|
|
166 |
|
Depreciation
of property and equipment |
|
242 |
|
|
225 |
|
|
513 |
|
|
463 |
|
Amortization
of acquired intangible assets |
|
46 |
|
|
- |
|
|
91 |
|
|
- |
|
EBITDA
(non-GAAP) |
$6,044 |
|
$8,516 |
|
$12,020 |
|
$17,834 |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
- |
|
|
- |
|
|
(395 |
) |
|
- |
|
(Gain) loss on foreign currency transactions |
|
(7 |
) |
|
(97 |
) |
|
40 |
|
|
(142 |
) |
Adjusted
EBITDA (non-GAAP) |
$6,037 |
|
$8,419 |
|
$11,665 |
|
$17,692 |
|
RCM
Technologies, Inc. Summary of Selected Income
Statement Data (Unaudited) (In
Thousands) |
|
|
Thirteen Weeks Ended July 1, 2023 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
Life Sciencesand IT |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$35,528 |
|
$21,014 |
|
$10,493 |
|
$67,035 |
|
Cost of services |
|
25,727 |
|
|
16,192 |
|
|
6,356 |
|
|
48,275 |
|
Gross
profit |
$9,801 |
|
$4,822 |
|
$4,137 |
|
$18,760 |
|
Gross profit
margin |
|
27.6 |
% |
|
22.9 |
% |
|
39.4 |
% |
|
28.0 |
% |
|
Thirteen Weeks Ended July 2, 2022 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
Life Sciencesand IT |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$43,457 |
|
$20,906 |
|
$9,983 |
|
$74,346 |
|
Cost of services |
|
30,575 |
|
|
15,395 |
|
|
6,693 |
|
|
52,663 |
|
Gross
profit |
$12,882 |
|
$5,511 |
|
$3,290 |
|
$21,683 |
|
Gross profit
margin |
|
29.6 |
% |
|
26.4 |
% |
|
33.0 |
% |
|
29.2 |
% |
|
Twenty-Six Weeks Ended July 1, 2023 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
Life Sciencesand IT |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$74,658 |
|
$39,504 |
|
$19,997 |
|
$134,159 |
|
Cost of services |
|
53,185 |
|
|
30,365 |
|
|
12,555 |
|
|
96,375 |
|
Gross
profit |
$21,473 |
|
$8,869 |
|
$7,442 |
|
$37,784 |
|
Gross profit
margin |
|
28.8 |
% |
|
22.5 |
% |
|
37.2 |
% |
|
28.2 |
% |
|
Twenty-Six Weeks Ended July 2, 2022 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
Life Sciencesand IT |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$95,641 |
|
$40,804 |
|
$19,862 |
|
$156,307 |
|
Cost of services |
|
67,758 |
|
|
30,059 |
|
|
13,387 |
|
|
111,204 |
|
Gross
profit |
$27,883 |
|
$10,745 |
|
$6,475 |
|
$45,103 |
|
Gross profit
margin |
|
29.2 |
% |
|
26.3 |
% |
|
32.6 |
% |
|
28.9 |
% |
RCM
Technologies, Inc.Condensed Consolidated Balance
Sheets(Unaudited)(In Thousands,
Except Share Amounts) |
|
|
July 1, |
|
December 31, |
|
|
2023 |
|
2022 |
|
|
(Unaudited) |
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$1,273 |
|
$339 |
|
|
Accounts receivable, net |
|
61,614 |
|
|
50,762 |
|
|
Transit accounts receivable |
|
9,875 |
|
|
3,280 |
|
|
Prepaid expenses and other current assets |
|
4,324 |
|
|
4,636 |
|
|
|
Total current assets |
|
77,086 |
|
|
59,017 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
2,158 |
|
|
2,098 |
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
Deposits |
|
169 |
|
|
173 |
|
|
Goodwill |
|
22,147 |
|
|
22,147 |
|
|
Operating right of use asset |
|
3,203 |
|
|
3,665 |
|
|
Intangible assets, net |
|
774 |
|
|
864 |
|
|
|
Total other assets |
|
26,293 |
|
|
26,849 |
|
|
|
|
|
|
|
|
|
|
Total assets |
$105,537 |
|
$87,964 |
|
Current liabilities: |
|
|
|
|
|
Accounts payable and accrued expenses |
$12,947 |
|
$14,147 |
|
|
Transit accounts payable |
|
37,190 |
|
|
9,767 |
|
|
Accrued payroll and related costs |
|
11,836 |
|
|
13,023 |
|
|
Finance lease payable |
|
464 |
|
|
462 |
|
|
Income taxes payable |
|
233 |
|
|
85 |
|
|
Operating right of use liability |
|
1,091 |
|
|
1,349 |
|
|
Contingent consideration from acquisitions |
|
300 |
|
|
472 |
|
|
Deferred revenue |
|
504 |
|
|
1,119 |
|
|
|
Total current liabilities |
|
64,565 |
|
|
40,424 |
|
|
|
|
|
|
Deferred income taxes, net, foreign |
|
169 |
|
|
166 |
|
Deferred income taxes, net, domestic |
|
1,599 |
|
|
1,495 |
|
Finance lease payable |
|
- |
|
|
232 |
|
Contingent consideration from acquisitions, net of current
position |
|
1,671 |
|
|
1,970 |
|
Operating right of use liability, net of current position |
|
2,508 |
|
|
2,932 |
|
Borrowings under line of credit |
|
14,851 |
|
|
8,783 |
|
|
Total liabilities |
|
85,363 |
|
|
56,002 |
|
|
|
|
|
|
|
|
|
|
|
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;
17,516,469 shares issued and 7,934,088 shares outstanding atJuly 1,
2023 and 17,287,967 shares issued and 9,285,318 sharesoutstanding
at December 31, 2022 |
|
873 |
|
|
863 |
|
|
Additional paid-in capital |
|
115,314 |
|
|
113,878 |
|
|
Accumulated other comprehensive loss |
|
(2,857 |
) |
|
(2,863 |
) |
|
Accumulated deficit |
|
(28,276 |
) |
|
(36,096 |
) |
|
Treasury stock, 9,582,381 shares at July 1, 2023 and 8,002,649
shares at December 31, 2022, at cost |
|
(64,880 |
) |
|
(43,820 |
) |
|
|
Total stockholders’ equity |
|
20,174 |
|
|
31,962 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$105,537 |
|
$87,964 |
|
RCM
Technologies, Inc. Condensed Consolidated
Statements of Cash Flows (Unaudited)
(In Thousands) |
|
|
Thirteen Weeks Ended |
|
|
July 1,2023 |
|
July 2,2022 |
|
Net income |
$3,983 |
|
$6,014 |
|
Adjustments to reconcile net income to cash used in operating
activities |
|
1,043 |
|
|
449 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(2,804 |
) |
|
13,779 |
|
|
Prepaid
expenses and other current assets |
|
(648 |
) |
|
343 |
|
|
Net of
transit accounts receivable and payable |
|
19,356 |
|
|
(731 |
) |
|
Accounts
payable and accrued expenses |
|
654 |
|
|
389 |
|
|
Accrued
payroll and related costs |
|
(3,598 |
) |
|
(2,392 |
) |
|
Right of use
liabilities |
|
(335 |
) |
|
(382 |
) |
|
Income taxes
payable |
|
6 |
|
|
1,111 |
|
|
Deferred
revenue |
|
(305 |
) |
|
(315 |
) |
|
Deposits |
|
(9 |
) |
|
9 |
|
Total adjustments |
|
13,360 |
|
|
12,260 |
|
Net cash provided by operating activities |
$17,343 |
|
$18,274 |
|
|
|
|
|
|
Net cash used in investing activities |
|
(227 |
) |
|
(223 |
) |
Net cash used in financing activities |
|
(18,160 |
) |
|
(15,563 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(37 |
) |
|
(235 |
) |
Increase in cash and cash equivalents |
($1,081 |
) |
$2,253 |
|
|
|
|
|
|
Common stock repurchase |
($12,876 |
) |
($2,781 |
) |
|
Twenty-Six Weeks Ended |
|
|
July 1,2023 |
|
July 2,2022 |
|
Net income |
$7,820 |
|
$12,534 |
|
Adjustments to reconcile net income to cash used in operating
activities |
|
1,746 |
|
|
1,186 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(10,839 |
) |
|
3,565 |
|
|
Prepaid
expenses and other current assets |
|
312 |
|
|
434 |
|
|
Net of
transit accounts receivable and payable |
|
20,828 |
|
|
(210 |
) |
|
Accounts
payable and accrued expenses |
|
(1,013 |
) |
|
(585 |
) |
|
Accrued
payroll and related costs |
|
(1,194 |
) |
|
3,048 |
|
|
Right of use
liabilities |
|
(683 |
) |
|
(926 |
) |
|
Income taxes
payable |
|
147 |
|
|
2,935 |
|
|
Deferred
revenue |
|
(615 |
) |
|
(1,237 |
) |
|
Deposits |
|
2 |
|
|
11 |
|
Total adjustments |
|
8,691 |
|
|
8,221 |
|
Net cash provided by operating activities |
$16,511 |
|
$20,755 |
|
|
|
|
|
|
Net cash used in investing activities |
|
(559 |
) |
|
(453 |
) |
Net cash used in financing activities |
|
(15,215 |
) |
|
(17,175 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
197 |
|
|
(250 |
) |
Increase in cash and cash equivalents |
$934 |
|
$2,877 |
|
|
|
|
|
|
Common stock repurchase |
($21,060 |
) |
($2,781 |
) |
RCM
Technologies, Inc. |
Tel:
856.356.4500 |
Corporate Contacts: |
2500
McClellan Avenue |
Fax:
856.356.4600 |
Bradley S. Vizi |
Pennsauken,
NJ 08109 |
info@rcmt.com |
Executive
Chairman |
|
www.rcmt.com |
Kevin D. Miller |
|
|
Chief
Financial Officer |
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