PENNSAUKEN, N.J., March 13, 2024 (GLOBE NEWSWIRE) -- 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 fifty-two weeks ended December 30, 2023.
RCM Technologies reported revenue of $71.0 million for the thirteen weeks ended December 30, 2023 (the current quarter), an increase of 1.1% compared to $70.2 million for the thirteen weeks ended December 31, 2022 (the comparable prior quarter). Gross profit was $21.6 million for the current quarter, a 5.7% increase compared to $20.5 million for the comparable prior quarter. The Company experienced GAAP operating income of $7.9 million for the current quarter compared to $6.8 million for the comparable prior quarter. The Company experienced GAAP net income of $5.3 million, or $0.65 per diluted share, for the current quarter compared to $4.8 million, or $0.48 per diluted share, for the comparable prior quarter. The Company experienced adjusted EBITDA (non-GAAP) of $8.9 million for the current quarter compared to $7.5 million for the comparable prior quarter. The Company experienced $0.71 of adjusted net income per diluted share (non-GAAP) for the current quarter as compared to $0.52 for the comparable prior quarter.
RCM Technologies reported revenue of $263.2 million for the fifty-two weeks ended December 30, 2023 (the current year), a decrease of 7.5% compared to $284.7 million for the fifty-two weeks ended December 31, 2022 (the comparable prior year). Gross profit was $76.7 million for the current year, a 7.5% decrease compared to $82.9 million for the comparable prior year. The Company experienced GAAP operating income of $23.7 million for the current year compared to $28.8 million for the comparable prior year. The Company experienced GAAP net income of $16.8 million, or $1.96 per diluted share, for the current year compared to $20.9 million, or $2.00 per diluted share, for the comparable prior year. The Company experienced adjusted EBITDA (non-GAAP) of $26.6 million for the current year compared to $31.1 million for the comparable prior year. The Company experienced $2.11 of adjusted net income per diluted share (non-GAAP) for the current year as compared to $2.08 for the comparable prior year.
Bradley Vizi, Executive Chairman of RCM Technologies, commented, “We finished 2023 strong with $8.9 million of adjusted EBITDA in the fourth quarter, a growth rate of 18.5%. All three business segments provided healthy contributions to growth.”
Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “Improved cash collections in the first quarter have helped bolster our confidence in achieving our goal of $20 million in cash flow from operations in fiscal 2024.”
Conference Call On Thursday, March 14, 2024, RCM Technologies will host a conference call to discuss these results. The call will begin at 11:00 a.m. Eastern Time. The dial-in number is (800) 285-6670.
About RCMRCM Technologies (NasdaqGM: RCMT) is a business and technology solutions provider with world-class talent in key market segments. We help design, build, and enable the Industries of Tomorrow, Today. Operating at the intersection of resources, critical infrastructure and modernization of industries through advanced technologies, RCM is a provider of services in Health Care, Engineering, Aerospace & Defense, Process & Industrial, Life Sciences and Data & Solutions. 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
December 30,2023
December 31,2022
Revenue
$
71,028
$
70,221
Cost of services
49,397
49,755
Gross profit
21,631
20,466
Selling, general and administrative
13,403
13,433
Depreciation and amortization of property and equipment
276
266
Amortization of acquired intangible assets
46
46
Remeasurement of acquisition related contingent consideration
-
(88
)
Operating income
7,906
6,809
Other expense, net
532
349
Income before income taxes
7,374
6,460
Income tax expense
2,119
1,623
Net income
$
5,255
$
4,837
Diluted net earnings per share data
$
0.65
$
0.48
Diluted weighted average shares outstanding
8,142,184
10,076,898
Fifty-Two Weeks Ended
December 30,2023
December 31,2022
Revenue
$
263,237
$
284,680
Cost of services
186,541
201,753
Gross profit
76,696
82,927
Selling, general and administrative
52,185
53,395
Depreciation and amortization of property and equipment
1,032
995
Amortization of acquired intangible assets
182
46
Gain on sale of assets
(395
)
(219
)
Remeasurement of acquisition related contingent consideration
-
(88
)
Operating income
23,692
28,798
Other expense, net
1,497
318
Income before income taxes
22,195
28,480
Income tax expense
5,364
7,591
Net income
$
16,831
$
20,889
Diluted net earnings per share data
$
1.96
$
2.00
Diluted weighted average shares outstanding
8,592,572
10,442,176
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 fifty-two weeks ended December 30, 2023 and December 31, 2022.
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 30,2023
December 31,2022
December 30,2023
December 31,2022
GAAP operating income
$
7,906
$
6,809
$
23,692
$
28,798
Adjustments
Gain on sale of assets
-
-
(395
)
(219
)
Remeasurement of acquisition related contingent consideration
-
(88
)
-
(88
)
Equity compensation
641
452
2,092
1,582
Adjusted operating income (non-GAAP)
$
8,547
$
7,173
$
25,389
$
30,073
GAAP net income
$
5,255
$
4,837
$
16,831
$
20,889
Income tax expense
2,119
1,623
5,364
7,591
Interest expense, net
429
169
1,399
370
Depreciation of property and equipment
276
266
1,032
995
Amortization of acquired intangible assets
46
46
182
46
EBITDA (non-GAAP)
$
8,125
$
6,941
$
24,808
$
29,891
Adjustments
Gain on sale of assets
-
-
(395
)
(219
)
Remeasurement of acquisition related contingent consideration
-
(88
)
-
(88
)
Loss (gain) on foreign currency transactions
103
180
98
(52
)
Equity compensation
641
452
2,092
1,582
Adjusted EBITDA (non-GAAP)
$
8,869
$
7,485
$
26,603
$
31,114
RCM Technologies, Inc.Supplemental Operating Results on a Non-GAAP Basis (Continued)(Unaudited)(In Thousands)
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 30,2023
December 31,2022
December 30,2023
December 31,2022
GAAP net income
$
5,255
$
4,837
$
16,831
$
20,889
Adjustments
Gain on sale of assets
-
-
(395
)
(219
)
Remeasurement of acquisition related contingent consideration
-
(88
)
-
(88
)
Loss (gain) on foreign currency transactions
103
180
98
(52
)
Equity compensation
641
452
2,092
1,582
Tax impact from normalized rate
(186
)
(147
)
(467
)
(356
)
Adjusted net income (non-GAAP)
$
5,813
$
5,234
$
18,159
$
21,756
GAAP diluted net earnings per share
$
0.65
$
0.48
$
1.96
$
2.00
Adjustments
Gain on sale of assets
-
-
($
0.05
)
($
0.02
)
Remeasurement of acquisition related contingent consideration
-
(0.01
)
-
($
0.01
)
Loss (gain) on foreign currency transactions
0.01
0.02
$
0.01
($
0.01
)
Equity compensation
0.07
0.05
$
0.24
$
0.15
Tax impact from normalized rate
(0.02
)
(0.02
)
($
0.05
)
($
0.03
)
Adjusted diluted net earnings per share (non-GAAP)
$
0.71
$
0.52
$
2.11
$
2.08
RCM Technologies, Inc.Summary of Selected Income Statement Data(Unaudited)(In Thousands)
Contingent consideration from acquisitions, net of current portion
1,671
1,970
Operating right of use liability, net of current portion
2,268
2,932
Borrowings under line of credit
30,804
8,783
Total liabilities
94,694
56,002
Contingencies (note 16) and Commitments (note 18)
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;
17,673,427 shares issued and 7,844,821 shares outstanding at December 30, 2023, 17,287,967 shares issued and 9,285,318 shares outstanding at December 31, 2022 and 16,903,157 shares issued and 10,290,935 shares outstanding at January 1, 2022
882
863
Additional paid-in capital
116,579
113,878
Accumulated other comprehensive loss
(2,813
)
(2,863
)
Accumulated deficit
(19,265
)
(36,096
)
Treasury stock, 9,828,606 shares at December 30, 2023, 8,002,649 shares at December 31, 2022 and 6,612,222 shares at January 1, 2022
(69,593
)
(43,820
)
Stockholders’ equity
25,790
31,962
Total liabilities and stockholders’ equity
$120,484
$87,964
RCM Technologies, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited)(In Thousands)
Thirteen Weeks Ended
December 30,2023
December 31,2022
Net income
$5,255
$4,837
Adjustments to reconcile net income to cash used in operating activities
1,526
2,989
Changes in operating assets and liabilities:
Accounts receivable
(13,880
)
81
Prepaid expenses and other current assets
678
(2,953
)
Net of transit accounts receivable and payable
(6,660
)
6,431
Accounts payable and accrued expenses
292
3,440
Accrued payroll and related costs
(3,421
)
(4,211
)
Right of use liabilities
(337
)
(336
)
Income taxes payable
80
(2,298
)
Deferred revenue
1,546
(441
)
Deposits
(145
)
3
Total adjustments
(20,321
)
2,705
Net cash (used in) provided by operating activities
($15,066
)
$7,542
Net cash used in investing activities
(2,056
)
(4,367
)
Net cash provided by (used in) financing activities
22,706
(3,659
)
Effect of exchange rate changes on cash and cash equivalents
46
62
Increase in cash and cash equivalents
$5,630
($422
)
Common stock repurchase
(1,324
)
(11,166
)
Fifty-Two Weeks Ended
December 30,2023
December 31,2022
Net income
$16,831
$20,889
Adjustments to reconcile net income to cash used in operating activities
4,321
4,539
Changes in operating assets and liabilities:
Accounts receivable
(20,576
)
(1,509
)
Prepaid expenses and other current assets
3
(2,350
)
Net of transit accounts receivable and payable
15,724
5,433
Accounts payable and accrued expenses
(1,506
)
4,919
Accrued payroll and related costs
(1,825
)
24
Right of use liabilities
(1,353
)
(1,642
)
Income taxes payable
242
276
Deferred revenue
762
(2,299
)
Deposits
(141
)
3
Total adjustments
(4,349
)
7,394
Net cash provided by operating activities
12,482
28,283
Net cash used in investing activities
(2,536
)
(4,820
)
Net cash used in financing activities
(3,852
)
(23,127
)
Effect of exchange rate changes on cash and cash equivalents
