RCM Technologies, Inc. Announces Second-Quarter Results

·11 min read
RCM Technologies, Inc.
RCM Technologies, Inc.

PENNSAUKEN, N.J., Aug. 10, 2022 (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 2, 2022.

RCM Technologies reported revenue of $74.3 million for the thirteen weeks ended July 2, 2022 (the current period), an increase of 51.9% compared to $48.9 million for the thirteen weeks ended July 3, 2021 (the comparable prior-year period). Gross profit was $21.7 million for the current period, a 76.8% increase compared to $12.3 million for the comparable prior-year period.  The Company experienced GAAP operating income of $8.2 million for the current period compared to $1.9 million for the comparable prior-year period.  The Company experienced GAAP net income of $6.0 million, or $0.57 per diluted share, for the current period compared to $1.3 million, or $0.11 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA of $8.4 million for the current period compared to $2.2 million for the comparable prior-year period.

RCM Technologies reported revenue of $156.3 million for the twenty-six weeks ended July 2, 2022 (the current period), an increase of 67.2% compared to $93.5 million for the twenty-six weeks ended July 3, 2021 (the comparable prior-year period). Gross profit was $45.1 million for the current period, a 95.1% increase compared to $23.1 million for the comparable prior-year period.  The Company experienced GAAP operating income of $17.2 million for the current period compared to $3.3 million for the comparable prior-year period.  The Company experienced GAAP net income of $12.5 million, or $1.18 per diluted share, for the current period compared to $2.3 million, or $0.19 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA of $17.7 million for the current period compared to $3.9 million for the comparable prior-year period.

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “I am pleased to announce strong performance throughout the company as we continue to make progress against our long-term strategy. Each unit demonstrated strong execution and performed well in our primarily recession-resistant end markets as demonstrated by year-over-year second-quarter increases of 281% for adjusted EBITDA and 418% for diluted EPS.”

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “After considering seasonal school closures, our second quarter revenue was consistent with trends experienced in our record-setting first quarter. In addition, we generated operating cash flow of $18.3 million in the second quarter and $20.8 million year-to-date. We anticipate we will continue to see strong results for the balance of fiscal 2022, and now intend to focus on delivering robust growth in fiscal 2023.”

Conference Call
On Thursday, August 11, 2022, 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 (866) 403-9129.

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 the impact of the COVID-19 pandemic, 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 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.

Tel: 856.356.4500

Corporate Contacts:

2500 McClellan Avenue

Fax: 856.356.4600

Bradley S. Vizi

Pennsauken, NJ 08109

info@rcmt.com

Executive Chairman

 

www.rcmt.com

Kevin D. Miller

 

 

Chief Financial Officer

Tables to Follow


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

 

Thirteen Weeks Ended

 

 

July 2, 2022

 

 

July 3, 2021

 

Revenue

$74,346

 

 

$48,933

 

Cost of services

 

52,663

 

 

 

36,667

 

Gross profit

 

21,683

 

 

 

12,266

 

Selling, general and administrative

 

13,264

 

 

 

10,005

 

Depreciation and amortization of property and equipment

 

225

 

 

 

259

 

Amortization of acquired intangible assets

 

-

 

 

 

9

 

Operating income

 

8,194

 

 

 

1,943

 

Other (income) expense, net

 

(28

)

 

 

201

 

Income before income taxes

 

8,222

 

 

 

1,742

 

Income tax expense

 

2,208

 

 

 

486

 

Net income

$6,014

 

 

$1,256

 

 

 

 

 

 

 

Diluted net earnings per share data

$0.57

 

 

$0.11

 


 

Twenty-Six Weeks Ended

 

 

July 2, 2022

 

 

July 3, 2021

 

Revenue

$156,307

 

 

$93,482

 

Cost of services

 

111,204

 

 

 

70,366

 

Gross profit

 

45,103

 

 

 

23,116

 

Selling, general and administrative

 

27,411

 

 

 

19,184

 

Depreciation and amortization of property and equipment

 

463

 

 

 

525

 

Amortization of acquired intangible assets

 

-

 

 

 

89

 

Operating income

 

17,229

 

 

 

3,318

 

Other expense, net

 

24

 

 

 

213

 

Income before income taxes

 

17,205

 

 

 

3,105

 

Income tax expense

 

4,671

 

 

 

842

 

Net income

$12,534

 

 

$2,263

 

 

 

 

 

 

 

Diluted net earnings per share data

$1.18

 

 

$0.19

 

RCM Technologies, Inc.
Summary Consolidated Selected Balance Sheet Data
(In Thousands)

 

July 2,
2022

 

January 1,
2022

 

(Unaudited)

 

 

Cash and cash equivalents

$3,112

 

$235

Accounts receivable, net

$45,275

 

$48,240

Total current assets

$51,541

 

$51,971

Total assets

$72,425

 

$72,852

Total current liabilities

$33,764

 

$29,857

Borrowings under line of credit

$0

 

$14,151

Total liabilities

$36,133

 

$46,883

Stockholders’ equity

$36,292

 

$25,969


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 (“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.  EBITDA and Adjusted EBITDA should not be considered an alternative to net income as an indicator of performance.  In addition, 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 EBITDA and Adjusted EBITDA for the thirteen and twenty-six weeks ended July 2, 2022 and July 3, 2021.

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

 

July 2,
2022

 

 

July 3,
2021

 

 

July 2,
2022

 

 

July 3,
2021

 

GAAP net income

$6,014

 

 

$1,256

 

 

$12,534

 

 

$2,263

 

Income tax expense

 

2,208

 

 

 

486

 

 

 

4,671

 

 

 

842

 

Interest expense

 

69

 

 

 

122

 

 

 

166

 

 

 

243

 

Change in fair value of contingent consideration

 

-

 

 

 

26

 

 

 

-

 

 

 

52

 

Depreciation of property and equipment

 

225

 

 

 

259

 

 

 

463

 

 

 

525

 

Amortization of acquired intangible assets

 

-

 

 

 

9

 

 

 

-

 

 

 

89

 

EBITDA (non-GAAP)

$8,516

 

 

$2,158

 

 

$17,834

 

 

$4,014

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

(Gain) loss on foreign currency transactions

 

(97

)

 

 

53

 

 

 

(142

)

 

 

(82

)

Adjusted EBITDA (non-GAAP)

$8,419

 

 

$2,211

 

 

$17,692

 

 

$3,932

 



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

 

Thirteen Weeks Ended July 2, 2022

 

 

Engineering

 

 

Specialty
Health Care

 

 

Information
Technology

 

 



Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$20,906

 

 

$43,457

 

 

$9,983

 

 

$74,346

 

Cost of services

 

15,395

 

 

 

30,575

 

 

 

6,693

 

 

 

52,663

 

Gross profit

$5,511

 

 

$12,882

 

 

$3,290

 

 

$21,683

 

Gross profit margin

 

26.4

%

 

 

29.6

%

 

 

33.0

%

 

 

29.2

%


 

Thirteen Weeks Ended July 3, 2021

 

 

Engineering

 

 

Specialty
Health Care

 

 

Information
Technology

 

 



Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$16,934

 

 

$22,941

 

 

$9,058

 

 

$48,933

 

Cost of services

 

12,920

 

 

 

17,349

 

 

 

6,398

 

 

 

36,677

 

Gross profit

$4,014

 

 

$5,592

 

 

$2,660

 

 

$12,266

 

Gross profit margin

 

23.7

%

 

 

24.4

%

 

 

29.4

%

 

 

25.1

%


 

Twenty-Six Weeks Ended July 2, 2022

 

 

Engineering

 

 

Specialty
Health Care

 

 

Information
Technology

 

 



Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$40,804

 

 

$95,641

 

 

$19,862

 

 

$156,307

 

Cost of services

 

30,059

 

 

 

67,758

 

 

 

13,387

 

 

 

111,204

 

Gross profit

$10,745

 

 

$27,883

 

 

$6,475

 

 

$45,103

 

Gross profit margin

 

26.3

%

 

 

29.2

%

 

 

32.6

%

 

 

28.9

%


 

Twenty-Six Weeks Ended July 3, 2021

 

 

Engineering

 

 

Specialty
Health Care

 

 

Information
Technology

 

 



Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$31,400

 

 

$44,077

 

 

$18,005

 

 

$93,482

 

Cost of services

 

24,180

 

 

 

33,448

 

 

 

12,738

 

 

 

70,366

 

Gross profit

$7,220

 

 

$10,629

 

 

$5,267

 

 

$23,116

 

Gross profit margin

 

23.0

%

 

 

24.1

%

 

 

29.3

%

 

 

24.7

%


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

 

Thirteen Weeks Ended

 

 

July 2,
2022

 

 

July 3,
2021

 

Net income

$6,014

 

 

$1,256

 

Adjustments to reconcile net income to cash
used in operating activities

 

449

 

 

 

1,356

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

13,779

 

 

 

8,059

 

 

Prepaid expenses and other current assets

 

343

 

 

 

1,178

 

 

Net of transit accounts receivable and payable

 

(731

)

 

 

1,681

 

 

Accounts payable and accrued expenses

 

389

 

 

 

1,616

 

 

Accrued payroll and related costs

 

(2,392

)

 

 

(248

)

 

Right of use liabilities

 

(382

)

 

 

(489

)

 

Income taxes payable

 

1,111

 

 

 

93

 

 

Deferred revenue

 

(315

)

 

 

913

 

 

Deposits

 

9

 

 

 

6

 

Total adjustments

 

12,260

 

 

 

14,165

 

Net cash provided by operating activities

$18,274

 

 

$15,421

 

 

 

 

 

 

 

Net cash used in investing activities

 

(223

)

 

 

(123

)

Net cash used in financing activities

 

(15,563

)

 

 

(14,639

)

Effect of exchange rate changes

 

(235

)

 

 

62

 

Increase in cash and cash equivalents

$2,253

 

 

$721

 


 

Twenty-Six Weeks Ended

 

 

July 2,
2022

 

 

July 3,
2021

 

Net income

$12,534

 

 

$2,263

 

Adjustments to reconcile net income to cash
used in operating activities

 

1,186

 

 

 

2,533

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

3,565

 

 

 

(1,066

)

 

Prepaid expenses and other current assets

 

434

 

 

 

1,676

 

 

Net of transit accounts receivable and payable

 

(210

)

 

 

(121

)

 

Accounts payable and accrued expenses

 

(585

)

 

 

1,663

 

 

Accrued payroll and related costs

 

3,048

 

 

 

(231

)

 

Right of use liabilities

 

(926

)

 

 

(988

)

 

Income taxes payable

 

2,935

 

 

 

8

 

 

Deferred revenue

 

(1,237

)

 

 

578

 

 

Deposits

 

11

 

 

 

6

 

Total adjustments

 

8,221

 

 

 

4,058

 

Net cash provided by operating activities

$20,755

 

 

$6,321

 

 

 

 

 

 

 

Net cash used in investing activities

 

(453

)

 

 

(182

)

Net cash used in financing activities

 

(17,175

)

 

 

(5,424

)

Effect of exchange rate changes

 

(250

)

 

 

(50

)

Increase in cash and cash equivalents

$2,877

 

 

$665