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 fifty-two weeks ended December 31, 2022.
RCM Technologies reported revenue of $70.2 million
for the thirteen weeks ended December 31, 2022 (the current
period), an increase of 8.2% compared to $64.9 million for the
thirteen weeks ended January 1, 2022 (the comparable prior-year
period). Gross profit was $20.5 million for the current period, a
15.0% increase compared to $17.8 million for the comparable
prior-year period. The Company experienced GAAP operating
income of $6.8 million for the current period compared to $7.1
million for the comparable prior-year period. The Company
experienced GAAP net income of $4.8 million, or $0.48 per diluted
share, for the current period compared to $6.0 million, or $0.52
per diluted share, for the comparable prior-year period. The
Company experienced adjusted EBITDA (non-GAAP) of $7.0 million for
the current period compared to $5.3 million for the comparable
prior-year period.
RCM Technologies reported revenue of $284.7
million for the fifty-two weeks ended December 31, 2022 (the
current period), an increase of 39.6% compared to $203.9 million
for the fifty-two weeks ended January 1, 2022 (the comparable
prior-year period). Gross profit was $82.9 million for the current
period, a 56.1% increase compared to $53.1 million for the
comparable prior-year period. The Company experienced GAAP
operating income of $28.8 million for the current period compared
to $14.1 million for the comparable prior-year period. The
Company experienced GAAP net income of $20.9 million, or $2.00 per
diluted share, for the current period compared to $11.0 million, or
$0.95 per diluted share, for the comparable prior-year period. The
Company experienced adjusted EBITDA (non-GAAP) of $29.5 million for
the current period compared to $11.1 million for the comparable
prior-year period.
Bradley Vizi, Executive Chairman of RCM
Technologies, commented, “Our fiscal 2022 performance is a
compelling demonstration of our strategy of investing behind
world-class talent in secular growth markets. As a result, we
believe RCM is well positioned to provide attractive returns for
many years to come.”
Kevin Miller, Chief Financial Officer of RCM
Technologies, commented, “We finished 2022 strong, demonstrating
robust growth in revenue, EBITDA, and earnings per share while
investing heavily in the future. In addition, the Company's strong
discretionary cash generating characteristics provided us over $28
million in cash flow from operations in 2022, which we expect to
assist the Company in producing enhanced returns over the
long-term.”
Conference Call On Thursday,
March 16, 2023, RCM Technologies will host a conference call to
discuss these results. The call will begin at 11:00 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 |
|
|
December 31,2022 |
|
January 1,2022 |
|
Revenue |
$70,221 |
|
$64,922 |
|
Cost of services |
|
49,755 |
|
|
47,128 |
|
Gross
profit |
|
20,466 |
|
|
17,794 |
|
Selling,
general and administrative |
|
13,433 |
|
|
12,453 |
|
Depreciation
and amortization of property and equipment |
|
266 |
|
|
232 |
|
Amortization
of acquired intangible assets |
|
46 |
|
|
- |
|
Gain on sale
of assets |
|
- |
|
|
(269 |
) |
Remeasurement of acquisition related contingent consideration |
|
(88 |
) |
|
(1,713 |
) |
Operating
income |
|
6,809 |
|
|
7,091 |
|
Other
(income) expense, net |
|
(349 |
) |
|
65 |
|
Income
before income taxes |
|
6,460 |
|
|
7,098 |
|
Income tax
expense |
|
1,623 |
|
|
1,124 |
|
Net
income |
$4,837 |
|
$5,974 |
|
|
|
|
|
|
Diluted net
earnings per share data |
$0.48 |
|
$0.52 |
|
|
Fifty-Two Weeks Ended |
|
|
December 31,2022 |
|
January 1,2022 |
|
Revenue |
$284,680 |
|
$203,875 |
|
Cost of services |
|
201,753 |
|
|
150,751 |
|
Gross
profit |
|
82,927 |
|
|
53,124 |
|
Selling,
general and administrative |
|
53,395 |
|
|
42,019 |
|
Depreciation
and amortization of property and equipment |
|
995 |
|
|
1,007 |
|
Amortization
of acquired intangible assets |
|
46 |
|
|
95 |
|
Gain on sale
of assets |
|
(219 |
) |
|
(2,420 |
) |
Remeasurement of acquisition related contingent consideration |
|
(88 |
) |
|
(1,713 |
) |
Operating
income |
|
28,798 |
|
|
14,136 |
|
Other
expense (income), net |
|
318 |
|
|
(222 |
) |
Income
before income taxes |
|
28,480 |
|
|
13,914 |
|
Income tax
expense |
|
7,591 |
|
|
2,925 |
|
Net
income |
$20,889 |
|
$10,989 |
|
|
|
|
|
|
Diluted net
earnings per share data |
$2.00 |
|
$0.95 |
|
|
|
|
|
|
|
|
RCM Technologies, Inc.
Summary Consolidated Selected Balance Sheet Data
(In Thousands)
|
December 31,2022 |
|
January 1,2022 |
|
(Unaudited) |
|
|
Cash and
cash equivalents |
$339 |
|
$235 |
|
Accounts
receivable, net |
$50,762 |
|
$48,240 |
|
Total
current assets |
$59,017 |
|
$51,971 |
|
Total
assets |
$87,964 |
|
$72,852 |
|
Total
current liabilities |
$40,424 |
|
$29,857 |
|
Borrowings
under line of credit |
$8,783 |
|
$14,151 |
|
Total
liabilities |
$56,002 |
|
$46,883 |
|
Stockholders’ equity |
$31,962 |
|
$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 (“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 fifty-two weeks ended December 31, 2022 and
January 1, 2022.
|
Thirteen Weeks Ended |
|
Fifty-Two Weeks Ended |
|
|
December 31,2022 |
|
January 1,2022 |
|
December 31,2022 |
|
January 1,2022 |
|
GAAP operating income |
$6,809 |
|
$7,091 |
|
$28,798 |
|
$14,136 |
|
Adjustments |
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
- |
|
|
(269 |
) |
|
(219 |
) |
|
(2,420 |
) |
Remeasurement of acquisition related contingent consideration |
|
(88 |
) |
|
(1,713 |
) |
|
(88 |
) |
|
(1,713 |
) |
Adjusted operating income (non-GAAP) |
$6,721 |
|
$5,109 |
|
$28,491 |
|
$10,003 |
|
|
|
|
|
|
|
|
|
|
GAAP net
income |
$4,837 |
|
$5,974 |
|
$20,889 |
|
$10,989 |
|
Income tax
expense |
|
1,623 |
|
|
1,124 |
|
|
7,591 |
|
|
2,925 |
|
Interest
expense, net |
|
169 |
|
|
58 |
|
|
370 |
|
|
365 |
|
Change in
fair value of contingent consideration |
|
- |
|
|
- |
|
|
- |
|
|
52 |
|
Depreciation
of property and equipment |
|
266 |
|
|
232 |
|
|
995 |
|
|
1,007 |
|
Amortization of acquired intangible assets |
|
46 |
|
|
- |
|
|
46 |
|
|
95 |
|
EBITDA (non-GAAP) |
$6,941 |
|
$7,388 |
|
$29,891 |
|
$15,433 |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
- |
|
|
(269 |
) |
|
(219 |
) |
|
(2,420 |
) |
Remeasurement of acquisition related contingent consideration |
|
(88 |
) |
|
(1,713 |
) |
|
(88 |
) |
|
(1,713 |
) |
Loss (gain) on foreign currency transactions |
|
180 |
|
|
(65 |
) |
|
(52 |
) |
|
(195 |
) |
Adjusted EBITDA (non-GAAP) |
$7,033 |
|
$5,341 |
|
$29,532 |
|
$11,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCM Technologies, Inc.
Supplemental Operating Results on a Non-GAAP Basis
(Continued) (Unaudited) (In
Thousands)
|
Thirteen Weeks Ended |
|
Fifty-Two Weeks Ended |
|
|
December 31,2022 |
|
January 1,2022 |
|
December 31,2022 |
|
January 1,2022 |
|
GAAP net income |
$4,837 |
|
$5,974 |
|
$20,889 |
|
$10,989 |
|
Adjustments |
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
- |
|
|
(269 |
) |
|
(219 |
) |
|
(2,420 |
) |
Remeasurement of acquisition related contingent consideration |
|
(88 |
) |
|
(1,713 |
) |
|
(88 |
) |
|
(1,713 |
) |
Tax impact from normalized rate |
|
24 |
|
|
(282 |
) |
|
83 |
|
|
237 |
|
Adjusted net income (non-GAAP) |
$4,773 |
|
$3,710 |
|
$20,665 |
|
$7,093 |
|
|
|
|
|
|
|
|
|
|
GAAP diluted
net earnings per share |
$0.48 |
|
$0.54 |
|
$2.00 |
|
$0.95 |
|
Adjustments |
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
- |
|
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.21 |
) |
Remeasurement of acquisition related contingent consideration |
|
(0.01 |
) |
|
(0.16 |
) |
|
(0.01 |
) |
|
(0.15 |
) |
Tax impact from normalized rate |
|
- |
|
|
(0.02 |
) |
|
0.01 |
|
|
0.02 |
|
Adjusted diluted net earnings per share (non-GAAP) |
$0.47 |
|
$0.34 |
|
$1.98 |
|
$0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCM Technologies, Inc.
Summary of Selected Income Statement Data
(Unaudited) (In Thousands)
|
Thirteen Weeks Ended December 31, 2022 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$35,810 |
|
$24,211 |
|
$10,200 |
|
$70,221 |
|
Cost of services |
|
24,771 |
|
|
18,565 |
|
|
6,419 |
|
|
49,755 |
|
Gross
profit |
$11,039 |
|
$5,646 |
|
$3,781 |
|
$20,466 |
|
Gross profit
margin |
|
30.8 |
% |
|
23.3 |
% |
|
37.1 |
% |
|
29.15 |
% |
|
Thirteen Weeks Ended January 1, 2022 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$34,772 |
|
$18,290 |
|
$11,860 |
|
$64,922 |
|
Cost of services |
|
25,613 |
|
|
13,234 |
|
|
8,281 |
|
|
47,128 |
|
Gross
profit |
$9,159 |
|
$5,056 |
|
$3,579 |
|
$17,794 |
|
Gross profit
margin |
|
26.3 |
% |
|
27.6 |
% |
|
30.2 |
% |
|
27.4 |
% |
|
Fifty-Two Weeks Ended December 31, 2022 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$159,448 |
|
$85,937 |
|
$39,295 |
|
$284,680 |
|
Cost of services |
|
111,543 |
|
|
64,218 |
|
|
25,992 |
|
|
201,753 |
|
Gross
profit |
$47,905 |
|
$21,719 |
|
$13,303 |
|
$82,927 |
|
Gross profit
margin |
|
30.0 |
% |
|
25.3 |
% |
|
33.9 |
% |
|
29.1 |
% |
|
Fifty-Two Weeks Ended January 1, 2022 |
|
|
SpecialtyHealth Care |
|
Engineering |
|
InformationTechnology |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Revenue |
$98,495 |
|
$66,172 |
|
$39,208 |
|
$203,875 |
|
Cost of services |
|
73,177 |
|
|
50,109 |
|
|
27,465 |
|
|
150,751 |
|
Gross
profit |
$25,318 |
|
$16,063 |
|
$11,743 |
|
$53,124 |
|
Gross profit
margin |
|
25.7 |
% |
|
24.3 |
% |
|
30.0 |
% |
|
26.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (In Thousands)
|
Fifty-Two Weeks Ended |
|
|
December 31,2022 |
|
January 1,2022 |
|
Net income |
$20,889 |
|
$10,989 |
|
Adjustments to reconcile net income to cash used in operating
activities |
|
4,539 |
|
|
1,790 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(1,509 |
) |
|
(14,710 |
) |
|
Prepaid
expenses and other current assets |
|
(2,350 |
) |
|
1,838 |
|
|
Net of
transit accounts receivable and payable |
|
5,434 |
|
|
(1,317 |
) |
|
Accounts
payable and accrued expenses |
|
4,919 |
|
|
1,518 |
|
|
Accrued
payroll and related costs |
|
24 |
|
|
149 |
|
|
Right of use
liabilities |
|
(1,486 |
) |
|
(1,763 |
) |
|
Income taxes
payable |
|
276 |
|
|
(436 |
) |
|
Deferred
revenue |
|
(2,300 |
) |
|
3,020 |
|
|
Deposits |
|
4 |
|
|
(7 |
) |
Total adjustments |
|
7,571 |
|
|
(9,918 |
) |
Net cash provided by operating activities |
|
28,440 |
|
|
1,071 |
|
|
|
|
|
|
Net cash (used in) provided by investing activities |
|
(4,976 |
) |
|
6,135 |
|
Net cash used in financing activities |
|
(23,128 |
) |
|
(7,554 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(232 |
) |
|
(151 |
) |
Increase (decrease) in cash and cash equivalents |
$104 |
|
($499 |
) |
|
|
|
|
|
|
|
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 |
RCM Technologies (NASDAQ:RCMT)
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