PENNSAUKEN, N.J., Nov. 07, 2024 (GLOBE NEWSWIRE) -- RCM Technologies, Inc. (NasdaqGM: RCMT), a premier provider of solutions designed to enhance the operational performance of its customers through the deployment of advanced engineering, specialty health care, and information technology services, today announced financial results for the thirteen and thirty-nine weeks ended September 28, 2024.
RCM Technologies reported revenue of $60.4 million for the thirteen weeks ended September 28, 2024 (the current quarter), an increase of 4.0% compared to $58.0 million for the thirteen weeks ended September 30, 2023 (the comparable prior quarter). Gross profit was $17.8 million for the current quarter, a 3.2% increase compared to $17.3 million for the comparable prior quarter. The Company experienced GAAP net income of $2.7 million, or $0.35 per diluted share, for the current quarter compared to $3.8 million, or $0.46 per diluted share, for the comparable prior quarter. The Company experienced adjusted EBITDA (non-GAAP) of $5.6 million for the current quarter, a 9.5% increase compared to $5.1 million for the comparable prior quarter. The Company experienced $0.44 of adjusted net income per diluted share (non-GAAP) for the current quarter as compared to $0.50 for the comparable prior quarter.
RCM Technologies reported revenue of $201.5 million for the thirty-nine weeks ended September 28, 2024 (the current period), an increase of 4.8% compared to $192.2 million for the thirty-nine weeks ended September 30, 2023 (the comparable prior-year period). Gross profit was $58.2 million for the current period, a 5.7% increase compared to $55.1 million for the comparable prior-year period. The Company experienced GAAP net income of $10.5 million, or $1.31 per diluted share, for the current period compared to $11.6 million, or $1.33 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $19.6 million for the current period, a 10.5% increase compared to $17.7 million for the comparable prior-year period. The Company experienced $1.54 of adjusted net income per diluted share (non-GAAP) for the current period as compared to $1.41 for the comparable prior-year period.
Bradley Vizi, Executive Chairman of RCM Technologies, commented, “Third-quarter growth was led by Healthcare and Engineering, as both businesses continue to ramp in their respective end markets.”
Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “Growth remains consistent, while we anticipate enhanced cash conversion in coming quarters.”
Conference Call
On Friday, November 8, 2024, RCM Technologies will host a conference call to discuss these results. The call will begin at 1:00 p.m. Eastern Time. The dial-in number is (888) 272-8703.
About RCM
RCM 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, 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, such as cash flows, 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 | ||||||
| September 28, 2024 | September 30, 2023 | |||||
| Revenue | $60,365 | $58,049 | ||||
| Cost of services | 42,524 | 40,768 | ||||
| Gross profit | 17,841 | 17,281 | ||||
| Selling, general and administrative | 13,018 | 12,662 | ||||
| Depreciation and amortization of property and equipment | 393 | 243 | ||||
| Amortization of acquired intangible assets | 45 | 45 | ||||
| Operating income | 4,385 | 4,331 | ||||
| Other expense, net | 619 | 141 | ||||
| Income before income taxes | 3,766 | 4,190 | ||||
| Income tax expense | 1,020 | 434 | ||||
| Net income | $2,746 | $3,756 | ||||
| Diluted net earnings per share data | $0.35 | $0.46 | ||||
| Diluted weighted average shares outstanding | 7,789,446 | 8,196,330 | ||||
| Thirty-Nine Weeks Ended | ||||||
| September 28, 2024 | September 30, 2023 | |||||
| Revenue | $201,468 | $192,209 | ||||
| Cost of services | 143,259 | 137,144 | ||||
| Gross profit | 58,209 | 55,065 | ||||
| Selling, general and administrative | 40,762 | 38,782 | ||||
| Depreciation and amortization of property and equipment | 1,012 | 756 | ||||
| Amortization of acquired intangible assets | 136 | 136 | ||||
| Costs associated with potential stock issuance | 259 | - | ||||
| Gain on sale of assets | - | (395 | ) | |||
| Operating income | 16,040 | 15,786 | ||||
| Other expense, net | 1,619 | 965 | ||||
| Income before income taxes | 14,421 | 14,821 | ||||
| Income tax expense | 3,961 | 3,245 | ||||
| Net income | $10,460 | $11,576 | ||||
| Diluted net earnings per share data | $1.31 | $1.33 | ||||
| Diluted weighted average shares outstanding | 7,990,238 | 8,730,998 | ||||
| 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,” “Adjusted EBITDA,” “Adjusted net income” and “Adjusted diluted net earnings per share”) 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, Adjusted EBITDA, Adjusted net income and Adjusted diluted net earnings per share should not be considered alternatives to operating income or net income, as the case may be, as an indicator of performance. In addition, Adjusted operating income, EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted diluted net earnings per share 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 operating income and GAAP net income and the corresponding adjustments used to calculate Adjusted operating income, EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted diluted net earnings per share for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||
| September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| GAAP operating income | $4,385 | $4,331 | $16,040 | $15,786 | ||||||||
| Adjustments | ||||||||||||
| Gain on sale of assets | - | - | - | (395 | ) | |||||||
| Costs associated with potential stock issuance | - | - | 259 | - | ||||||||
| Equity compensation | 767 | 484 | 2,154 | 1,451 | ||||||||
| Adjusted operating income (non-GAAP) | $5,152 | $4,815 | $18,453 | $16,842 | ||||||||
| GAAP net income | $2,746 | $3,756 | $10,460 | $11,576 | ||||||||
| Income tax expense | 1,020 | 434 | 3,961 | 3,245 | ||||||||
| Interest expense, net | 492 | 185 | 1,551 | 970 | ||||||||
| Depreciation of property and equipment | 393 | 243 | 1,012 | 756 | ||||||||
| Amortization of acquired intangible assets | 45 | 45 | 136 | 136 | ||||||||
| EBITDA (non-GAAP) | $4,696 | $4,663 | $17,120 | $16,683 | ||||||||
| Adjustments | ||||||||||||
| Gain on sale of assets | - | - | - | (395 | ) | |||||||
| Costs associated with potential stock issuance | - | - | 259 | - | ||||||||
| Loss (gain) on foreign currency transactions | 127 | (44 | ) | 68 | (5 | ) | ||||||
| Equity compensation | 767 | 484 | 2,154 | 1,451 | ||||||||
| Adjusted EBITDA (non-GAAP) | $5,590 | $5,103 | $19,601 | $17,734 | ||||||||
| RCM Technologies, Inc. Supplemental Operating Results on a Non-GAAP Basis (Continued) (Unaudited) (In Thousands) | ||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||
| September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| GAAP net income | $2,746 | $3,756 | $10,460 | $11,576 | ||||||||
| Adjustments | ||||||||||||
| Gain on sale of assets | - | - | - | (395 | ) | |||||||
| Costs associated with potential stock issuance | - | - | 259 | - | ||||||||
| Loss (gain) on foreign currency transactions | 127 | (44 | ) | 68 | (5 | ) | ||||||
| Equity compensation | 767 | 484 | 2,154 | 1,451 | ||||||||
| Tax impact from normalized rate | (190 | ) | (138 | ) | (674 | ) | (295 | ) | ||||
| Adjusted net income (non-GAAP) | $3,450 | $4,058 | $12,267 | $12,332 | ||||||||
| GAAP diluted net earnings per share | $0.35 | $0.46 | $1.31 | $1.33 | ||||||||
| Adjustments | ||||||||||||
| Gain on sale of assets | ($0.04 | ) | ||||||||||
| Costs associated with potential stock issuance | - | - | $0.03 | - | ||||||||
| Loss (gain) on foreign currency transactions | $0.01 | - | $0.01 | - | ||||||||
| Equity compensation | $0.10 | $0.06 | $0.27 | $0.16 | ||||||||
| Tax impact from normalized rate | ($0.02 | ) | ($0.02 | ) | ($0.08 | ) | ($0.04 | ) | ||||
| Adjusted diluted net earnings per share (non-GAAP) | $0.44 | $0.50 | $1.54 | $1.41 | ||||||||
| RCM Technologies, Inc. Summary of Selected Income Statement Data (Unaudited) (In Thousands) | ||||||||||||
| Thirteen Weeks Ended September 28, 2024 | ||||||||||||
| Specialty Health Care | Engineering | Life Sciences and IT | Consolidated | |||||||||
| Revenue | $26,554 | $24,167 | $9,644 | $60,365 | ||||||||
| Cost of services | 18,271 | 18,273 | 5,980 | 42,524 | ||||||||
| Gross profit | 8,283 | 5,894 | 3,664 | 17,841 | ||||||||
| Gross profit margin | 31.2 | % | 24.4 | % | 38.0 | % | 29.6 | % | ||||
| Thirteen Weeks Ended September 30, 2023 | ||||||||||||
| Specialty Health Care | Engineering | Life Sciences and IT | Consolidated | |||||||||
| Revenue | $24,895 | $22,452 | $10,702 | $58,049 | ||||||||
| Cost of services | 17,438 | 16,846 | 6,484 | 40,768 | ||||||||
| Gross profit | $7,457 | $5,606 | $4,218 | $17,281 | ||||||||
| Gross profit margin | 30.0 | % | 25.0 | % | 39.4 | % | 29.8 | % | ||||
| Thirty-Nine Weeks Ended September 28, 2024 | ||||||||||||
| Specialty Health Care | Engineering | Life Sciences and IT | Consolidated | |||||||||
| Revenue | $101,668 | $70,180 | $29,620 | $201,468 | ||||||||
| Cost of services | 71,672 | 52,818 | 18,769 | 143,259 | ||||||||
| Gross profit | 29,996 | 17,362 | 10,851 | 58,209 | ||||||||
| Gross profit margin | 29.5 | % | 24.7 | % | 36.6 | % | 28.9 | % | ||||
| Thirty-Nine Weeks Ended September 30, 2023 | ||||||||||||
| Specialty Health Care | Engineering | Life Sciences and IT | Consolidated | |||||||||
| Revenue | $99,553 | $61,956 | $30,700 | $192,209 | ||||||||
| Cost of services | 70,623 | 47,482 | 19,039 | 137,144 | ||||||||
| Gross profit | $28,930 | $14,474 | $11,661 | $55,065 | ||||||||
| Gross profit margin | 29.1 | % | 23.4 | % | 38.0 | % | 28.6 | % | ||||
| RCM Technologies, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In Thousands, Except Share Amounts) | ||||||
| September 28, | December 30, | |||||
| 2024 | 2023 | |||||
| (Unaudited) | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $3,156 | $6,284 | ||||
| Accounts receivable, net of provision for credit losses of $1,600 at September 28, 2024 and December 30, 2023 | 75,913 | 70,690 | ||||
| Transit accounts receivable | 6,315 | 8,891 | ||||
| Prepaid expenses and other current assets | 5,112 | 4,637 | ||||
| Total current assets | 90,496 | 90,502 | ||||
| Property and equipment, net | 6,793 | 4,005 | ||||
| Deposits | 215 | 313 | ||||
| Deferred income taxes, foreign | 55 | 55 | ||||
| Goodwill | 22,147 | 22,147 | ||||
| Operating right of use asset | 5,292 | 2,779 | ||||
| Intangible assets, net | 547 | 683 | ||||
| Total other assets | 28,256 | 25,977 | ||||
| Total assets | $125,545 | $120,484 | ||||
| Current liabilities: | ||||||
| Accounts payable and accrued expenses | $11,525 | $12,454 | ||||
| Transit accounts payable | 28,215 | 31,102 | ||||
| Accrued payroll and related costs | 11,634 | 11,203 | ||||
| Finance lease payable | 689 | 233 | ||||
| Income taxes payable | 220 | 330 | ||||
| Operating right of use liability | 1,019 | 693 | ||||
| Contingent consideration from acquisitions | 300 | 300 | ||||
| Deferred revenue | 2,042 | 1,881 | ||||
| Total current liabilities | 55,644 | 58,196 | ||||
| Deferred income taxes, net, foreign | 185 | 187 | ||||
| Deferred income taxes, net, domestic | 1,719 | 1,568 | ||||
| Finance lease payable, net of current position | 1,290 | - | ||||
| Contingent consideration from acquisitions, net of current position | 1,671 | 1,671 | ||||
| Operating right of use liability, net of current position | 4,519 | 2,268 | ||||
| Borrowings under line of credit | 30,477 | 30,804 | ||||
| Total liabilities | 95,505 | 94,694 | ||||
| Contingencies (note 15) | - | - | ||||
| 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; 17,833,287 shares issued and 7,597,028 shares outstanding at September 28, 2024 and 17,673,427 shares issued and 7,844,821 shares outstanding at December 30, 2023 | 890 | 882 | ||||
| Additional paid-in capital | 118,136 | 116,579 | ||||
| Accumulated other comprehensive loss | (2,787 | ) | (2,813 | ) | ||
| Accumulated deficit | (8,805 | ) | (19,265 | ) | ||
| Treasury stock, 10,236,259 shares at September 28, 2024 and 9,828,606 shares at December 30, 2023, at cost | (77,394 | ) | (69,593 | ) | ||
| Total stockholders’ equity | 30,040 | 25,790 | ||||
| Total liabilities and stockholders’ equity | $125,545 | $120,484 | ||||
| RCM Technologies, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In Thousands) | ||||||
| Thirteen Weeks Ended | ||||||
| September 28, 2024 | September 30, 2023 | |||||
| Net income | $2,746 | $3,756 | ||||
| Adjustments to reconcile net income to cash used in operating activities | 1,508 | 1,049 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (9,033 | ) | 4,143 | |||
| Prepaid expenses and other current assets | 321 | (987 | ) | |||
| Net of transit accounts receivable and payable | 435 | 1,556 | ||||
| Accounts payable and accrued expenses | (1,445 | ) | (785 | ) | ||
| Accrued payroll and related costs | 1,919 | 2,790 | ||||
| Right of use liabilities | (228 | ) | (333 | ) | ||
| Income taxes payable | 81 | 15 | ||||
| Deferred revenue | (636 | ) | (169 | ) | ||
| Deposits | (12 | ) | 2 | |||
| Total adjustments | (7,090 | ) | 7,281 | |||
| Net cash (used in) provided by operating activities | ($4,344 | ) | $11,037 | |||
| Net cash (used in) provided by investing activities | (522 | ) | 79 | |||
| Net cash provided by (used in) financing activities | 4,375 | (11,343 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 167 | (392 | ) | |||
| Decrease in cash and cash equivalents | ($324 | ) | ($619 | ) | ||
| Common stock repurchase | ($2,410 | ) | ($3,389 | ) | ||
| Thirty-Nine Weeks Ended | ||||||
| September 28, 2024 | September 30, 2023 | |||||
| Net income | $10,460 | $11,576 | ||||
| Adjustments to reconcile net income to cash used in operating activities | 4,200 | 2,795 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (5,207 | ) | (6,696 | ) | ||
| Prepaid expenses and other current assets | (475 | ) | (675 | ) | ||
| Net of transit accounts receivable and payable | (311 | ) | 22,384 | |||
| Accounts payable and accrued expenses | (760 | ) | (1,798 | ) | ||
| Accrued payroll and related costs | 433 | 1,596 | ||||
| Right of use liabilities | (686 | ) | (1,016 | ) | ||
| Income taxes payable | (106 | ) | 162 | |||
| Deferred revenue | 161 | (784 | ) | |||
| Deposits | 98 | 4 | ||||
| Total adjustments | (2,653 | ) | 15,972 | |||
| Net cash provided by operating activities | 7,807 | 27,548 | ||||
| Net cash used in investing activities | (1,589 | ) | (480 | ) | ||
| Net cash used in financing activities | (9,135 | ) | (26,558 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | (211 | ) | (195 | ) | ||
| (Decrease) increase in cash and cash equivalents | ($3,128 | ) | $315 | |||
| Common stock repurchase | ($7,801 | ) | ($24,449 | ) | ||
| RCM Technologies, Inc. | Tel: 856.356.4500 | Corporate Contacts: |
| 2500 McClellan Avenue | [email protected] | Bradley S. Vizi |
| Pennsauken, NJ 08109 | www.rcmt.com | Executive Chairman |
| Kevin D. Miller | ||
| Chief Financial Officer | ||
