EX-99 2 ex_707598.htm EXHIBIT 99 ex_707598.htm

Exhibit 99

 image01.jpg

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

 

 

P R E S S   R E L E A S E

 

RCM TECHNOLOGIES, INC. ANNOUNCES

SECOND-QUARTER RESULTS

 

Pennsauken, NJ – August 7, 2024 -- 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.

 

Tables to Follow

 

 

 

 

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