RCM Technologies, Inc. Announces Second-Quarter Results


PENNSAUKEN, N.J., Aug. 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 twenty-six weeks ended June 29, 2024.

RCM Technologies reported revenue of $69.2 million for the thirteen weeks ended June 29, 2024 (the current quarter), an increase of 3.2% compared to $67.0 million for the thirteen weeks ended July 1, 2023 (the comparable prior quarter). Gross profit was $20.0 million for the current quarter, a 6.6% increase compared to $18.8 million for the comparable prior quarter.  The Company experienced GAAP net income of $3.8 million, or $0.47 per diluted share, for the current quarter compared to $4.0 million, or $0.47 per diluted share, for the comparable prior quarter. The Company experienced adjusted EBITDA (non-GAAP) of $7.2 million for the current quarter, a 10.8% increase compared to $6.5 million for the comparable prior quarter. The Company experienced $0.56 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 $141.1 million for the twenty-six weeks ended June 29, 2024 (the current period), an increase of 5.2% compared to $134.2 million for the twenty-six weeks ended July 1, 2023 (the comparable prior-year period). Gross profit was $40.4 million for the current period, a 6.8% increase compared to $37.8 million for the comparable prior-year period.  The Company experienced GAAP net income of $7.7 million, or $0.95 per diluted share, for the current period compared to $7.8 million, or $0.87 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $14.0 million for the current period, a 10.9% increase compared to $12.6 million for the comparable prior-year period. The Company experienced $1.10 of adjusted net income per diluted share (non-GAAP) for the current period as compared to $0.92 for the comparable prior-year period.

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “Second quarter growth was led by Engineering, as project activity continues to ramp building on the foundation carefully laid over the last several years.”

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “Our strong cash generating business model allows us to fund growth, while remaining opportunistic and actively managing our capital structure.”

Conference Call
On Thursday, August 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.


RCM Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In Thousands, Except Per Share Amounts)

 Thirteen Weeks Ended 
 June 29,
2024
 July 1,
2023
 
Revenue$69,164 $67,035 
Cost of services 49,163  48,275 
Gross profit 20,001  18,760 
Selling, general and administrative 13,545  12,723 
Depreciation and amortization of property and equipment 332  242 
Amortization of acquired intangible assets 46  46 
Costs associated with potential stock issuance 259  - 
Operating income 5,819  5,749 
Other expense, net 574  418 
Income before income taxes 5,245  5,331 
Income tax expense 1,483  1,348 
Net income$3,762 $3,983 
     
Diluted net earnings per share data$0.47 $0.47 
Diluted weighted average shares outstanding 7,955,943  8,558,396 


 Twenty-Six Weeks Ended 
 June 29,
2024
 July 1,
2023
 
Revenue$141,103 $134,159 
Cost of services 100,735  96,375 
Gross profit 40,368  37,784 
Selling, general and administrative 27,744  26,119 
Depreciation and amortization of property and equipment 619  513 
Amortization of acquired intangible assets 91  91 
Costs associated with potential stock issuance 259  - 
Gain on sale of assets -  (395)
Operating income 11,655  11,456 
Other expense, net 1,000  825 
Income before income taxes 10,655  10,631 
Income tax expense 2,941  2,811 
Net income$7,714 $7,820 
     
Diluted net earnings per share data$0.95 $0.87 
Diluted weighted average shares outstanding 8,078,049  8,976,714 



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 twenty-six weeks ended June 29, 2024 and July 1, 2023. 


 Thirteen Weeks Ended Twenty-Six Weeks Ended 
 June 29,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
 
 (Unaudited) (Unaudited) (Unaudited) (Unaudited) 
         
GAAP operating income$5,819 $5,749 $11,655 $11,456 
Adjustments        
Gain on sale of assets -  -  -  (395)
Costs associated with potential stock issuance 259  -  259  - 
Equity compensation 752  471  1,387  967 
Adjusted operating income (non-GAAP)$6,830 $6,220 $13,301 $12,028 
         
GAAP net income$3,762 $3,983 $7,714 $7,820 
Income tax expense 1,483  1,348  2,941  2,811 
Interest expense, net 581  425  1,059  785 
Depreciation of property and equipment 332  242  619  513 
Amortization of acquired intangible assets 46  46  91  91 
EBITDA (non-GAAP)$6,204 $6,044 $12,424 $12,020 
         
Adjustments        
Gain on sale of assets -  -  -  (395)
Costs associated with potential stock issuance 259  -  259  - 
(Gain) loss on foreign currency transactions (7) (7) (59) 40 
Equity compensation 752  471  1,387  967 
Adjusted EBITDA (non-GAAP)$7,208 $6,508 $14,011 $12,632 



RCM Technologies, Inc.
Supplemental Operating Results on a Non-GAAP Basis (Continued)
(Unaudited)
(In Thousands)

 Thirteen Weeks Ended Twenty-Six Weeks Ended 
 June 29,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
 
 (Unaudited) (Unaudited) (Unaudited) (Unaudited) 
         
GAAP net income$3,762 $3,983 $7,714 $7,820 
Adjustments        
Gain on sale of assets -  -  -  (395)
Costs associated with potential stock issuance 259  -  259  - 
(Gain) loss on foreign currency transactions (7) (7) (59) 40 
Equity compensation 752  471  1,387  967 
Tax impact from normalized rate (276) (128) (444) (168)
Adjusted net income (non-GAAP)$4,490 $4,319 $8,857 $8,264 
         
GAAP diluted net earnings per share$0.47 $0.47 $0.95 $0.87 
Adjustments        
Gain on sale of assets -  -  - ($0.04)
Costs associated with potential stock issuance$0.03  - $0.03  - 
(Gain) loss on foreign currency transactions -  -  - $0.01 
Equity compensation$0.09 $0.05 $0.17 $0.10 
Tax impact from normalized rate($0.03)($0.02)($0.05)($0.02)
Adjusted diluted net earnings per share (non-GAAP)$0.56 $0.50 $1.10 $0.92 



RCM Technologies, Inc.
Summary of Selected Income Statement Data
(Unaudited)
(In Thousands)

 Thirteen Weeks Ended June 29, 2024 
 Specialty
Health Care
 Engineering Life Sciences
and IT
 

Consolidated
 
         
Revenue$36,932 $22,508 $9,724 $69,164 
Cost of services 26,293  16,542  6,328  49,163 
Gross profit$10,639 $5,966 $3,396 $20,001 
Gross profit margin 28.8% 26.5% 34.9% 28.9%


 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%


 Twenty-Six Weeks Ended June 29, 2024 
 Specialty
Health Care
 Engineering Life Sciences
and IT
 

Consolidated
 
         
Revenue$75,114 $46,013 $19,976 $141,103 
Cost of services 53,409  34,540  12,786  100,735 
Gross profit$21,705 $11,473 $7,190 $40,368 
Gross profit margin 28.9% 24.9% 36.0% 28.6%


 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%



RCM Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands, Except Share Amounts)

 June 29, December 30, 
 2024 2023 
 (Unaudited)   
Current assets:    
 Cash and cash equivalents$3,480 $6,284 
 Accounts receivable, net of provision for credit losses of $1,600
on June 29, 2024 and December 30, 2023
 66,915  

70,690
 
 Transit accounts receivable 9,460  8,891 
 Prepaid expenses and other current assets 5,432  4,637 
  Total current assets 85,287  90,502 
       
Property and equipment, net 4,451  4,005 
     
Deposits 203  313 
Deferred income taxes, foreign 53  55 
Goodwill 22,147  22,147 
Operating right of use asset 5,545  2,779 
Intangible assets, net 592  683 
  Total other assets 28,540  25,977 
       
  Total assets$118,278 $120,484 


Current liabilities:    
 Accounts payable and accrued expenses$12,917 $12,454 
 Transit accounts payable 30,925  31,102 
 Accrued payroll and related costs 9,710  11,203 
 Finance lease payable -  233 
 Income taxes payable 136  330 
 Operating right of use liability 983  693 
 Contingent consideration from acquisitions 300  300 
 Deferred revenue 2,678  1,881 
  Total current liabilities 57,649  58,196 
     
Deferred income taxes, net, foreign 183  187 
Deferred income taxes, net, domestic 1,669  1,568 
Contingent consideration from acquisitions, net of current position 1,671  1,671 
Operating right of use liability, net of current position 4,784  2,268 
Borrowings under line of credit 23,870  30,804 
 Total liabilities 89,826  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;    
  17,775,693 shares issued and 7,666,709 shares outstanding at
June 29, 2024 and 17,673,427 shares issued and 7,844,821 shares
outstanding at December 30, 2023
 887  882 
 Additional paid-in capital 117,008  116,579 
 Accumulated other comprehensive loss (2,908) (2,813)
 Accumulated deficit (11,551) (19,265)
 Treasury stock, 10,108,984 shares at June 29, 2024 and    
  9,828,606 shares at December 30, 2023, at cost (74,984) (69,593)
  Total stockholders’ equity 28,452  25,790 
       
  Total liabilities and stockholders’ equity$118,278 $120,484 



RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)

 Thirteen Weeks Ended  
 June 29,
2024
 July 1,
2023
 
Net income$3,762 $3,983 
Adjustments to reconcile net income to cash
used in operating activities
 1,442  1,043 
Changes in operating assets and liabilities:    
 Accounts receivable 6,628  (2,804)
 Prepaid expenses and other current assets (916) (648)
 Net of transit accounts receivable and payable (527) 19,356 
 Accounts payable and accrued expenses (660) 654 
 Accrued payroll and related costs (2,462) (3,598)
 Right of use liabilities (154) (335)
 Income taxes payable (638) 6 
 Deferred revenue (836) (305)
 Deposits 86  (9)
Total adjustments 1,963  13,360 
Net cash provided by (used in) operating activities$5,725 $17,343 
     
Net cash used in investing activities (398) (227)
Net cash used in financing activities (3,796) (17,631)
Effect of exchange rate changes on cash and cash equivalents (150) (37)
Increase (decrease) in cash and cash equivalents$1,381 ($552)


 Twenty-Six Weeks Ended 
 June 29,
2024
 July 1,
2023
 
Net income$7,714 $7,820 
Adjustments to reconcile net income to cash
used in operating activities
 2,692  1,746 
Changes in operating assets and liabilities:    
 Accounts receivable 3,826  (10,839)
 Prepaid expenses and other current assets (796) 312 
 Net of transit accounts receivable and payable (746) 20,828 
 Accounts payable and accrued expenses 685  (1,013)
 Accrued payroll and related costs (1,486) (1,194)
 Right of use liabilities (458) (683)
 Income taxes payable (187) 147 
 Deferred revenue 797  (615)
 Deposits 110  2 
Total adjustments 4,437  8,691 
Net cash provided by operating activities$12,151 $16,511 
     
Net cash used in investing activities (1,067) (559)
Net cash used in financing activities (13,510) (15,215)
Effect of exchange rate changes on cash and cash equivalents (378) 197 
(Decrease) increase in cash and cash equivalents($2,804)$934 



RCM Technologies, Inc.   Tel: 856.356.4500         Corporate Contacts:
2500 McClellan Avenue   info@rcmt.com      Bradley S. Vizi
Pennsauken, NJ 08109    www.rcmt.com     Executive Chairman
          Kevin D. Miller  
          Chief Financial Officer