EX-99 2 ex_591054.htm EXHIBIT 99 ex_591054.htm

Exhibit 99

 rcm01.jpg

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

 

 

P R E S S   R E L E A S E

 

RCM TECHNOLOGIES, INC. ANNOUNCES

THIRD QUARTER RESULTS

 

Pennsauken, NJ – November 8, 2023 -- 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 thirty-nine weeks ended September 30, 2023.

 

RCM Technologies reported revenue of $58.0 million for the thirteen weeks ended September 30, 2023 (the current period), a decrease of 0.2% compared to $58.2 million for the thirteen weeks ended October 1, 2022 (the comparable prior-year period). Gross profit was $17.3 million for the current period, a 0.4% decrease compared to $17.4 million for the comparable prior-year period.  The Company experienced GAAP operating income of $4.3 million for the current period compared to $4.8 million for the comparable prior-year period.  The Company experienced GAAP net income of $3.8 million, or $0.46 per diluted share, for the current period compared to $3.5 million, or $0.33 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $4.6 million for the current period compared to $4.8 million for the comparable prior-year period. 

 

RCM Technologies reported revenue of $192.2 million for the thirty-nine weeks ended September 30, 2023 (the current period), a decrease of 10.4% compared to $214.5 million for the thirty-nine weeks ended October 1, 2022 (the comparable prior-year period). Gross profit was $55.1 million for the current period, a 11.8% decrease compared to $62.5 million for the comparable prior-year period.  The Company experienced GAAP operating income of $15.8 million for the current period compared to $22.0 million for the comparable prior-year period.  The Company experienced GAAP net income of $11.6 million, or $1.33 per diluted share, for the current period compared to $16.1 million, or $1.52 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $16.3 million for the current period compared to $22.5 million for the comparable prior-year period. 

 

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “The cadence of our business continues to accelerate as we move through the year. As such, we expect the fourth quarter to be our strongest, and continue to be confident that the long-term outlook for RCM is bright.”

 

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “With our continued focus on return on equity, the productivity of our revenue improved in the third quarter of 2023, resulting in 180 basis points of gross margin improvement over the second quarter of 2023.”

 

 
 

 

Conference Call

On Thursday, November 9, 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

 
 

September 30,

2023

  

October 1,

2022

  

Revenue

$58,049

  

$58,152

  

Cost of services

40,768

  

40,794

  

Gross profit

17,281

  

17,358

  

Selling, general and administrative

12,662

  

12,551

  

Depreciation and amortization of property and equipment

243

  

266

  

Amortization of acquired intangible assets

45

  

-

  

Gain on sale of assets

-

  

(219

)

Operating income

4,331

  

4,760

  

Other expense (income), net

141

  

(55

)

Income before income taxes

4,190

  

4,815

  

Income tax expense

434

  

1,297

  

Net income

$3,756

  

$3,518

  
         

Diluted net earnings per share data

$0.46

  

$0.33

  

Diluted weighted average shares outstanding

8,196,330

  

10,522,158

  

 

 

 

Thirty-Nine Weeks Ended

 
 

September 30,

2023

  

October 1,

2022

  

Revenue

$192,209

  

$214,459

  

Cost of services

137,144

  

151,998

  

Gross profit

55,065

  

62,461

  

Selling, general and administrative

38,782

  

39,962

  

Depreciation and amortization of property and equipment

756

  

729

  

Amortization of acquired intangible assets

136

  

-

  

Gain on sale of assets

(395

)

(219

)

Operating income

15,786

  

21,989

  

Other expense (income), net

965

  

(31

)

Income before income taxes

14,821

  

22,020

  

Income tax expense

3,245

  

5,968

  

Net income

$11,576

  

$16,052

  
         

Diluted net earnings per share data

$1.33

  

$1.52

  

Diluted weighted average shares outstanding

8,730,998

  

10,566,816

  

 

 
 

 

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 thirty-nine weeks ended September 30, 2023 and October 1, 2022.    

 

 

Thirteen Weeks Ended

  

Thirty-Nine Weeks Ended

  
 

September 30,

2023

  

October 1,

2022

  

September 30,

2023

  

October 1,

2022

  

GAAP net income

$3,756

  

$3,518

  

$11,576

  

$16,052

  

Income tax expense

434

  

1,297

  

3,245

  

5,968

  

Interest expense, net

185

  

35

  

970

  

201

  

Depreciation of property and equipment

243

  

266

  

756

  

729

  

Amortization of acquired intangible assets

45

  

-

  

136

  

-

  

EBITDA (non-GAAP)

$4,663

  

$5,116

  

$16,683

  

$22,950

  
                 

Adjustments

                

  Gain on sale of assets

-

  

(219

)

(395

)

(219

)

  Gain on foreign currency transactions

(44

)

(90

)

(5

)

(232

)

Adjusted EBITDA (non-GAAP)

$4,619

  

$4,807

  

$16,283

  

$22,499

  

 

 
 

 

RCM Technologies, Inc.

Summary of Selected Income Statement Data

(Unaudited)

(In Thousands)

 

 

 

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

%

 

 

 

 

Thirteen Weeks Ended October 1, 2022

  
 

Specialty

Health Care

  

Engineering

  

Life Sciences

and IT

  

Consolidated

  
                 

Revenue

$27,997

  

$20,922

  

$9,233

  

$58,152

  

Cost of services

19,014

  

15,594

  

6,186

  

40,794

  

Gross profit

$8,983

  

$5,328

  

$3,047

  

$17,358

  

Gross profit margin

32.1

%

25.5

%

33.0

%

29.8

%

 

 

 

 

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

%

 

 

 

 

Thirty-Nine Weeks Ended October 1, 2022

  
 

Specialty

Health Care

  

Engineering

  

Life Sciences

and IT

  

Consolidated

  
                 

Revenue

$123,638

  

$61,726

  

$29,095

  

$214,459

  

Cost of services

86,772

  

45,653

  

19,573

  

151,998

  

Gross profit

$36,866

  

$16,073

  

$9,522

  

$62,461

  

Gross profit margin

29.8

%

26.0

%

32.7

%

29.1

%

 

 
 

 

RCM Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands, Except Share Amounts)

 

 

 

September 30,

  

December 31,

  
 

2023

  

2022

  
 

(Unaudited)

      

Current assets:

        
 

Cash and cash equivalents

$654

  

$339

  
 

Accounts receivable, net

57,459

  

50,762

  
 

Transit accounts receivable

9,550

  

3,280

  
 

Prepaid expenses and other current assets

5,311

  

4,636

  
   

Total current assets

72,974

  

59,017

  
             

Property and equipment, net

2,221

  

2,098

  
         

Other assets:

        
 

Deposits

168

  

173

  
 

Goodwill

22,147

  

22,147

  
 

Operating right of use asset

2,976

  

3,665

  
 

Intangible assets, net

728

  

864

  
   

Total other assets

26,019

  

26,849

  
             
   

Total assets

$101,214

  

$87,964

  

 

Current liabilities:

        
 

Accounts payable and accrued expenses

$12,153

  

$14,147

  
 

Transit accounts payable

38,421

  

9,767

  
 

Accrued payroll and related costs

14,619

  

13,023

  
 

Finance lease payable

348

  

462

  
 

Income taxes payable

247

  

85

  
 

Operating right of use liability

884

  

1,349

  
 

Contingent consideration from acquisitions

300

  

472

  
 

Deferred revenue

335

  

1,119

  
   

Total current liabilities

67,307

  

40,424

  
         

Deferred income taxes, net, foreign

166

  

166

  

Deferred income taxes, net, domestic

1,652

  

1,495

  

Finance lease payable

-

  

232

  

Contingent consideration from acquisitions, net of current position

1,671

  

1,970

  

Operating right of use liability, net of current position

2,382

  

2,932

  

Borrowings under line of credit

6,657

  

8,783

  
 

Total liabilities

79,835

  

56,002

  
         

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;

        
   

17,660,999 shares issued and 7,900,190 shares outstanding at

September 30, 2023 and 17,287,967 shares issued and 9,285,318 shares

outstanding at December 31, 2022

880

  

863

  
 

Additional paid-in capital

116,146

  

113,878

  
 

Accumulated other comprehensive loss

(2,858

)

(2,863

)
 

Accumulated deficit

(24,520

)

(36,096

)
 

Treasury stock, 9,760,809 shares at September 30, 2023 and

        
   

8,002,649 shares at December 31, 2022, at cost

(68,269

)

(43,820

)
   

Total stockholders’ equity

21,379

  

31,962

  
             
   

Total liabilities and stockholders’ equity

$101,214

  

$87,964

  

 

 
 

 

RCM Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)

 

 

Thirteen Weeks Ended

 
 

September 30,

2023

  

October 1,

2022

  

Net income

$3,756

  

$3,518

  

Adjustments to reconcile net income to cash

 used in operating activities

1,049

  

364

  

Changes in operating assets and liabilities:

        
 

Accounts receivable

4,143

  

(5,155

)
 

Prepaid expenses and other current assets

(987

)

169

  
 

Net of transit accounts receivable and payable

1,556

  

(788

)
 

Accounts payable and accrued expenses

(785

)

2,064

  
 

Accrued payroll and related costs

2,790

  

1,187

  
 

Right of use liabilities

(333

)

(366

)
 

Income taxes payable

15

  

(336

)
 

Deferred revenue

(169

)

(621

)
 

Deposits

2

  

(11

)

Total adjustments

7,281

  

(3,488

)

Net cash provided by operating activities

$11,037

  

$30

  
         

Net cash used in investing activities

(315

)

(44

)

Net cash used in financing activities

(11,343

)

(2,293

)

Effect of exchange rate changes on cash and cash equivalents

2

  

(44

)

Increase in cash and cash equivalents

($619

)

($2,351

)
         

Common stock repurchase

($3,389

)

($3,613

)

 

 

 

Thirty-Nine Weeks Ended

 
 

September 30,

2023

  

October 1,

2022

  

Net income

$11,576

  

$16,052

  

Adjustments to reconcile net income to cash

 used in operating activities

2,795

  

1,550

  

Changes in operating assets and liabilities:

        
 

Accounts receivable

(6,696

)

(1,590

)
 

Prepaid expenses and other current assets

(675

)

603

  
 

Net of transit accounts receivable and payable

22,384

  

(998

)
 

Accounts payable and accrued expenses

(1,798

)

1,479

  
 

Accrued payroll and related costs

1,596

  

4,235

  
 

Right of use liabilities

(1,016

)

(1,306

)
 

Income taxes payable

162

  

2,574

  
 

Deferred revenue

(784

)

(1,858

)
 

Deposits

4

  

-

  

Total adjustments

15,972

  

4,689

  

Net cash provided by operating activities

27,548

  

$20,741

  
         

Net cash used in investing activities

(480

)

(453

)

Net cash used in financing activities

(26,558

)

(19,468

)

Effect of exchange rate changes on cash and cash equivalents

(195

)

(294

)

Increase in cash and cash equivalents

$315

  

$526

  
         

Common stock repurchase

($24,449

)

($6,394

)