• RCM Technologies, Inc. Announces Second-Quarter Results

    المصدر: Nasdaq GlobeNewswire / 09 أغسطس 2023 16:05:03   America/New_York

    PENNSAUKEN, N.J., Aug. 09, 2023 (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 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 
     Specialty
    Health Care
     Engineering Life Sciences
    and 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 
     Specialty
    Health Care
     Engineering Life Sciences
    and 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 
     Specialty
    Health Care
     Engineering Life Sciences
    and 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 
     Specialty
    Health Care
     Engineering Life Sciences
    and 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 at
    July 1, 2023 and 17,287,967 shares issued and 9,285,318 shares
    outstanding 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: 856.356.4500Corporate Contacts:
    2500 McClellan AvenueFax: 856.356.4600Bradley S. Vizi
    Pennsauken, NJ 08109info@rcmt.comExecutive Chairman
     www.rcmt.comKevin D. Miller
      Chief Financial Officer

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