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RCM Technologies, Inc. Announces First-Quarter Results

RCMT

PENNSAUKEN, N.J., May 08, 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 weeks ended March 30, 2024.

RCM Technologies reported revenue of $71.9 million for the thirteen weeks ended March 30, 2024 (the current quarter), an increase of 7.2% compared to $67.1 million for the thirteen weeks ended April 1, 2023 (the comparable prior quarter). Gross profit was $20.4 million for the current quarter, a 7.1% increase compared to $19.0 million for the comparable prior quarter. The Company experienced GAAP net income of $4.0 million, or $0.48 per diluted share, for the current quarter compared to $3.8 million, or $0.41 per diluted share, for the comparable prior quarter. The Company experienced adjusted EBITDA (non-GAAP) of $6.8 million for the current quarter compared to $6.1 million for the comparable prior quarter. The Company experienced $0.53 of adjusted net income per diluted share (non-GAAP) for the current quarter as compared to $0.41 for the comparable prior quarter.

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “Our breadth of strategic focus is widening and deepening throughout the organization, with all teams executing on current initiatives while seeding new initiatives designed to propel growth well into the future.”

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “In the first quarter, adjusted EBITDA and adjusted EPS increased 11.1% and 30.4%, respectively. Cash conversion increased both sequentially and year over year. We anticipate continued improvement in cash flow from operations in each of the next two quarters.”

Conference Call
On Thursday, May 9, 2024, 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 (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, 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
March 30,
2024
April 1,
2023
Revenue $71,939 $67,124
Cost of services 51,572 48,100
Gross profit 20,367 19,024
Selling, general and administrative 14,199 13,396
Depreciation and amortization of property and equipment 287 271
Amortization of acquired intangible assets 45 45
Gain on sale of assets - (395 )
Operating income 5,836 5,707
Other expense, net 426 407
Income before income taxes 5,410 5,300
Income tax expense 1,458 1,463
Net income $3,952 $3,837
Diluted net earnings per share data $0.48 $0.41
Diluted weighted average shares outstanding 8,170,839 9,401,867



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 ended March 30, 2024 and April 1, 2023.

Thirteen Weeks Ended
March 30,
2024
April 1,
2023
GAAP operating income $5,836 $5,707
Adjustments
Gain on sale of assets - (395 )
Equity compensation 635 496
Adjusted operating income (non-GAAP) $6,471 $5,808
GAAP net income $3,952 $3,837
Income tax expense 1,458 1,463
Interest expense, net 478 360
Depreciation of property and equipment 287 271
Amortization of acquired intangible assets 45 45
EBITDA (non-GAAP) $6,220 $5,976
Adjustments
Gain on sale of assets - (395 )
(Gain) loss on foreign currency transactions (52 ) 47
Equity compensation 635 496
Adjusted EBITDA (non-GAAP) $6,803 $6,124



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

Thirteen Weeks Ended
March 30,
2024
April 1,
2023
GAAP net income $3,952 $3,837
Adjustments
Gain on sale of assets - (395 )
(Gain) loss on foreign currency transactions (52 ) 47
Equity compensation 635 496
Tax impact from normalized rate (174 ) (136 )
Adjusted net income (non-GAAP) $4,361 $3,849
GAAP diluted net earnings per share $0.48 $0.41
Adjustments
Gain on sale of assets - (0.04 )
(Gain) loss on foreign currency transactions 0.00 0.00
Equity compensation 0.08 0.05
Tax impact from normalized rate (0.03 ) (0.01 )
Adjusted diluted net earnings per share (non-GAAP) $0.53 $0.41



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

Thirteen Weeks Ended March 30, 2024
Specialty
Health Care
Engineering Life Sciences
and IT
Consolidated
Revenue $38,182 $23,505 $10,252 $71,939
Cost of services 27,108 18,003 6,461 51,572
Gross profit $11,074 $5,502 $3,791 $20,367
Gross profit margin 29.0 % 23.4 % 37.0 % 28.3 %


Thirteen Weeks Ended April 1, 2023
Specialty
Health Care
Engineering Life Sciences
and IT
Consolidated
Revenue $39,130 $18,490 $9,504 $67,124
Cost of services 27,458 14,444 6,198 48,100
Gross profit $11,672 $4,046 $3,306 $19,024
Gross profit margin 29.8 % 21.9 % 34.8 % 28.3 %



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

March 30, December 30,
2024 2023
(Unaudited)
Current assets:
Cash and cash equivalents $2,099 $6,284
Accounts receivable, net 73,486 70,690
Transit accounts receivable 9,722 8,891
Prepaid expenses and other current assets 4,515 4,637
Total current assets 89,822 90,502
Property and equipment, net 4,386 4,005
Deposits 290 313
Deferred income taxes, foreign 53 55
Goodwill 22,147 22,147
Operating right of use asset 3,147 2,779
Intangible assets, net 638 683
Total other assets 26,275 25,977
Total assets $120,483 $120,484


Current liabilities:
Accounts payable and accrued expenses $13,596 $12,454
Transit accounts payable 31,715 31,102
Accrued payroll and related costs 12,174 11,203
Finance lease payable 116 233
Income taxes payable 778 330
Operating right of use liability 615 693
Contingent consideration from acquisitions 300 300
Deferred revenue 3,514 1,881
Total current liabilities 62,808 58,196
Deferred income taxes, net, foreign 185 187
Deferred income taxes, net, domestic 1,619 1,568
Contingent consideration from acquisitions, net of current position 1,671 1,671
Operating right of use liability, net of current position 2,644 2,268
Borrowings under line of credit 22,159 30,804
Total liabilities 91,086 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 7,947,087 shares outstanding at
March 30, 2024 and 17,673,427 shares issued and 7,844,821 shares
outstanding at December 30, 2023
887 882
Additional paid-in capital 116,256 116,579
Accumulated other comprehensive loss (2,840 ) (2,813 )
Accumulated deficit (15,313 ) (19,265 )
Treasury stock, 9,828,606 shares at March 30, 2024 and
December 30, 2023, at cost (69,593 ) (69,593 )
Total stockholders’ equity 29,397 25,790
Total liabilities and stockholders’ equity $120,483 $120,484



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

Thirteen Weeks Ended
March 30,
2024
April 1,
2023
Net income $3,952 $3,837
Adjustments to reconcile net income to cash used in operating activities 1,250 703
Changes in operating assets and liabilities:
Accounts receivable (2,802 ) (8,035 )
Prepaid expenses and other current assets 120 960
Net of transit accounts receivable and payable (219 ) 1,472
Accounts payable and accrued expenses 1,345 (1,667 )
Accrued payroll and related costs 976 2,404
Right of use liabilities (304 ) (348 )
Income taxes payable 451 141
Deferred revenue 1,633 (310 )
Deposits 24 11
Total adjustments 2,474 (4,669 )
Net cash provided by (used in) operating activities 6,426 (832 )
Net cash used in investing activities (669 ) (332 )
Net cash (used in) provided by financing activities (9,714 ) 2,416
Effect of exchange rate changes on cash and cash equivalents (228 ) 234
(Decrease) increase in cash and cash equivalents ($ 4,185 ) $1,486


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

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