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RCM Technologies, Inc. Announces Third Quarter Results

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RCM Technologies (RCMT) reported Q3 2024 financial results with revenue of $60.4 million, up 4.0% from $58.0 million in Q3 2023. Gross profit increased 3.2% to $17.8 million. GAAP net income was $2.7 million ($0.35 per diluted share), compared to $3.8 million ($0.46 per diluted share) in Q3 2023. For the first 39 weeks of 2024, revenue grew 4.8% to $201.5 million, with gross profit up 5.7% to $58.2 million. Healthcare and Engineering segments led the quarter's growth, with management anticipating enhanced cash conversion in coming quarters.

RCM Technologies (RCMT) ha riportato i risultati finanziari del terzo trimestre 2024, con un fatturato di 60,4 milioni di dollari, in aumento del 4,0% rispetto ai 58,0 milioni di dollari nel terzo trimestre 2023. Il profitto lordo è aumentato del 3,2%, raggiungendo 17,8 milioni di dollari. L'utile netto secondo i principi contabili GAAP è stato di 2,7 milioni di dollari (0,35 dollari per azione diluita), rispetto ai 3,8 milioni di dollari (0,46 dollari per azione diluita) nel terzo trimestre 2023. Per le prime 39 settimane del 2024, il fatturato è cresciuto del 4,8% a 201,5 milioni di dollari, con un profitto lordo aumentato del 5,7% a 58,2 milioni di dollari. I segmenti salute e ingegneria hanno guidato la crescita del trimestre, con la direzione che prevede un miglioramento nella conversione di cassa nei prossimi trimestri.

RCM Technologies (RCMT) informó los resultados financieros del tercer trimestre de 2024, con ingresos de 60,4 millones de dólares, un aumento del 4,0% desde los 58,0 millones de dólares en el tercer trimestre de 2023. La ganancia bruta aumentó un 3,2% hasta 17,8 millones de dólares. La utilidad neta según los principios contables GAAP fue de 2,7 millones de dólares (0,35 dólares por acción diluida), en comparación con 3,8 millones de dólares (0,46 dólares por acción diluida) en el tercer trimestre de 2023. Durante las primeras 39 semanas de 2024, los ingresos crecieron un 4,8% hasta 201,5 millones de dólares, con una ganancia bruta que aumentó un 5,7% hasta 58,2 millones de dólares. Los segmentos de salud e ingeniería lideraron el crecimiento del trimestre, y la dirección anticipa una mejor conversión de efectivo en los próximos trimestres.

RCM 기술 (RCMT)는 2024년 3분기 재무 결과를 보고했으며, 매출은 6040만 달러로 2023년 3분기의 5800만 달러에서 4.0% 증가했습니다. 총 이익은 3.2% 증가하여 1780만 달러에 도달했습니다. GAAP 기준 순이익은 270만 달러(희석 주당 0.35달러)로, 2023년 3분기의 380만 달러(희석 주당 0.46달러)와 비교됩니다. 2024년 첫 39주 동안 매출은 4.8% 증가하여 2억 150만 달러에 이르렀으며, 총 이익은 5.7% 증가하여 5820만 달러에 달했습니다. 의료 및 엔지니어링 부문이 분기의 성장을 주도했으며, 경영진은 향후 분기 동안 자산의 현금 전환이 개선될 것으로 예상합니다.

RCM Technologies (RCMT) a annoncé les résultats financiers du troisième trimestre 2024, avec un chiffre d'affaires de 60,4 millions de dollars, en hausse de 4,0 % par rapport aux 58,0 millions de dollars du troisième trimestre 2023. Le bénéfice brut a augmenté de 3,2 % pour atteindre 17,8 millions de dollars. Le bénéfice net selon les normes GAAP était de 2,7 millions de dollars (0,35 dollar par action diluée), comparé à 3,8 millions de dollars (0,46 dollar par action diluée) au troisième trimestre 2023. Au cours des 39 premières semaines de 2024, le chiffre d'affaires a augmenté de 4,8 % pour atteindre 201,5 millions de dollars, avec un bénéfice brut en hausse de 5,7 % à 58,2 millions de dollars. Les segments de la santé et de l'ingénierie ont conduit la croissance du trimestre, la direction anticipant une amélioration de la conversion de cash dans les trimestres à venir.

RCM Technologies (RCMT) berichtete über die finanziellen Ergebnisse des dritten Quartals 2024, mit einem Umsatz von 60,4 Millionen Dollar, was einem Anstieg von 4,0 % gegenüber 58,0 Millionen Dollar im dritten Quartal 2023 entspricht. Der Bruttogewinn stieg um 3,2 % auf 17,8 Millionen Dollar. Der GAAP-Nettoertrag betrug 2,7 Millionen Dollar (0,35 Dollar pro verwässerter Aktie), verglichen mit 3,8 Millionen Dollar (0,46 Dollar pro verwässerter Aktie) im dritten Quartal 2023. In den ersten 39 Wochen von 2024 stieg der Umsatz um 4,8 % auf 201,5 Millionen Dollar, während der Bruttogewinn um 5,7 % auf 58,2 Millionen Dollar zunahm. Die Segmente Gesundheitswesen und Ingenieurwesen führten das Wachstum des Quartals an, und das Management erwartet eine verbesserte Kapitalrendite in den kommenden Quartalen.

Positive
  • Revenue increased 4.0% YoY to $60.4 million in Q3 2024
  • Gross profit grew 3.2% to $17.8 million in Q3 2024
  • Adjusted EBITDA increased 9.5% to $5.6 million in Q3 2024
  • Year-to-date revenue up 4.8% to $201.5 million
  • Year-to-date adjusted EBITDA grew 10.5% to $19.6 million
Negative
  • Q3 2024 GAAP net income decreased to $2.7 million from $3.8 million YoY
  • Q3 2024 diluted EPS declined to $0.35 from $0.46 YoY
  • Adjusted net income per diluted share decreased to $0.44 from $0.50 YoY

Insights

RCM Technologies delivered mixed Q3 2024 results with some positive growth indicators alongside profit margin pressure. Revenue grew 4.0% year-over-year to $60.4 million, while gross profit increased 3.2% to $17.8 million. However, GAAP net income declined to $2.7 million ($0.35 per share) from $3.8 million ($0.46 per share) in Q3 2023.

The bright spot was adjusted EBITDA growth of 9.5% to $5.6 million, suggesting operational improvements despite bottom-line pressure. Year-to-date performance shows similar patterns - revenue up 4.8% and adjusted EBITDA up 10.5%, while net income slightly declined. The Healthcare and Engineering segments are driving growth, though margin compression remains a challenge. With a market cap of $173.7 million, the company trades at reasonable multiples given its growth profile and improving operational metrics.

PENNSAUKEN, N.J., Nov. 07, 2024 (GLOBE NEWSWIRE) -- 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 thirty-nine weeks ended September 28, 2024.

RCM Technologies reported revenue of $60.4 million for the thirteen weeks ended September 28, 2024 (the current quarter), an increase of 4.0% compared to $58.0 million for the thirteen weeks ended September 30, 2023 (the comparable prior quarter). Gross profit was $17.8 million for the current quarter, a 3.2% increase compared to $17.3 million for the comparable prior quarter.  The Company experienced GAAP net income of $2.7 million, or $0.35 per diluted share, for the current quarter compared to $3.8 million, or $0.46 per diluted share, for the comparable prior quarter. The Company experienced adjusted EBITDA (non-GAAP) of $5.6 million for the current quarter, a 9.5% increase compared to $5.1 million for the comparable prior quarter. The Company experienced $0.44 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 $201.5 million for the thirty-nine weeks ended September 28, 2024 (the current period), an increase of 4.8% compared to $192.2 million for the thirty-nine weeks ended September 30, 2023 (the comparable prior-year period). Gross profit was $58.2 million for the current period, a 5.7% increase compared to $55.1 million for the comparable prior-year period.  The Company experienced GAAP net income of $10.5 million, or $1.31 per diluted share, for the current period compared to $11.6 million, or $1.33 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $19.6 million for the current period, a 10.5% increase compared to $17.7 million for the comparable prior-year period. The Company experienced $1.54 of adjusted net income per diluted share (non-GAAP) for the current period as compared to $1.41 for the comparable prior-year period.

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “Third-quarter growth was led by Healthcare and Engineering, as both businesses continue to ramp in their respective end markets.”

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “Growth remains consistent, while we anticipate enhanced cash conversion in coming quarters.”

Conference Call
On Friday, November 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  
 September 28,
2024
 September 30,
2023
 
Revenue $60,365  $58,049 
Cost of services 42,524  40,768 
Gross profit 17,841  17,281 
Selling, general and administrative 13,018  12,662 
Depreciation and amortization of property and equipment 393  243 
Amortization of acquired intangible assets 45  45 
Operating income 4,385  4,331 
Other expense, net 619  141 
Income before income taxes 3,766  4,190 
Income tax expense 1,020  434 
Net income $2,746  $3,756 
     
Diluted net earnings per share data $0.35  $0.46 
Diluted weighted average shares outstanding 7,789,446  8,196,330 


 Thirty-Nine Weeks Ended  
 September 28,
2024
 September 30,
2023
 
Revenue $201,468  $192,209 
Cost of services 143,259  137,144 
Gross profit 58,209  55,065 
Selling, general and administrative 40,762  38,782 
Depreciation and amortization of property and equipment 1,012  756 
Amortization of acquired intangible assets 136  136 
Costs associated with potential stock issuance 259  - 
Gain on sale of assets -  (395)
Operating income 16,040  15,786 
Other expense, net 1,619  965 
Income before income taxes 14,421  14,821 
Income tax expense 3,961  3,245 
Net income $10,460  $11,576 
     
Diluted net earnings per share data $1.31  $1.33 
Diluted weighted average shares outstanding 7,990,238  8,730,998 
 
 
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 thirty-nine weeks ended September 28, 2024 and September 30, 2023. 

 Thirteen Weeks Ended Thirty-Nine Weeks Ended 
 September 28,
2024
 September 30,
2023
 September 28,
2024
 September 30,
2023
 
 (Unaudited) (Unaudited) (Unaudited) (Unaudited) 
         
GAAP operating income $4,385  $4,331  $16,040  $15,786 
Adjustments        
Gain on sale of assets -  -  -  (395)
Costs associated with potential stock issuance -  -  259  - 
Equity compensation 767  484  2,154  1,451 
Adjusted operating income (non-GAAP) $5,152  $4,815  $18,453  $16,842 
         
GAAP net income $2,746  $3,756  $10,460  $11,576 
Income tax expense 1,020  434  3,961  3,245 
Interest expense, net 492  185  1,551  970 
Depreciation of property and equipment 393  243  1,012  756 
Amortization of acquired intangible assets 45  45  136  136 
EBITDA (non-GAAP) $4,696  $4,663  $17,120  $16,683 
         
Adjustments        
Gain on sale of assets -  -  -  (395)
Costs associated with potential stock issuance -  -  259  - 
Loss (gain) on foreign currency transactions 127  (44) 68  (5)
Equity compensation 767  484  2,154  1,451 
Adjusted EBITDA (non-GAAP) $5,590  $5,103  $19,601  $17,734 


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

 
 Thirteen Weeks Ended Thirty-Nine Weeks Ended 
 September 28,
2024
 September 30,
2023
 September 28,
2024
 September 30,
2023
 
 (Unaudited) (Unaudited) (Unaudited) (Unaudited) 
         
GAAP net income $2,746  $3,756  $10,460  $11,576 
Adjustments        
Gain on sale of assets -  -  -  (395)
Costs associated with potential stock issuance -  -  259  - 
Loss (gain) on foreign currency transactions 127  (44) 68  (5)
Equity compensation 767  484  2,154  1,451 
Tax impact from normalized rate (190) (138) (674) (295)
Adjusted net income (non-GAAP) $3,450  $4,058  $12,267  $12,332 
         
GAAP diluted net earnings per share $0.35  $0.46  $1.31  $1.33 
Adjustments        
Gain on sale of assets       ($0.04)
Costs associated with potential stock issuance -  -  $0.03  - 
Loss (gain) on foreign currency transactions $0.01  -  $0.01  - 
Equity compensation $0.10  $0.06  $0.27  $0.16 
Tax impact from normalized rate ($0.02) ($0.02) ($0.08) ($0.04)
Adjusted diluted net earnings per share (non-GAAP) $0.44  $0.50  $1.54  $1.41 


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

 
 Thirteen Weeks Ended September 28, 2024 
 Specialty
Health Care
 Engineering Life Sciences
and IT
 Consolidated 
         
Revenue $26,554  $24,167  $9,644  $60,365 
Cost of services 18,271  18,273  5,980  42,524 
Gross profit 8,283  5,894  3,664  17,841 
Gross profit margin 31.2% 24.4% 38.0% 29.6%


 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%


 Thirty-Nine Weeks Ended September 28, 2024 
 Specialty
Health Care
 Engineering Life Sciences
and IT
 Consolidated 
         
Revenue $101,668  $70,180  $29,620  $201,468 
Cost of services 71,672  52,818  18,769  143,259 
Gross profit 29,996  17,362  10,851  58,209 
Gross profit margin 29.5% 24.7% 36.6% 28.9%


 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%


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

 
 September 28, December 30, 
 2024 2023 
 (Unaudited)   
Current assets:    
Cash and cash equivalents $3,156  $6,284 
Accounts receivable, net of provision for credit losses of $1,600 at September 28, 2024 and December 30, 2023 75,913  70,690 
Transit accounts receivable 6,315  8,891 
Prepaid expenses and other current assets 5,112  4,637 
Total current assets 90,496  90,502 
     
Property and equipment, net 6,793  4,005 
     
Deposits 215  313 
Deferred income taxes, foreign 55  55 
Goodwill 22,147  22,147 
Operating right of use asset 5,292  2,779 
Intangible assets, net 547  683 
Total other assets 28,256  25,977 
     
Total assets $125,545  $120,484 


Current liabilities:    
Accounts payable and accrued expenses $11,525  $12,454 
Transit accounts payable 28,215  31,102 
Accrued payroll and related costs 11,634  11,203 
Finance lease payable 689  233 
Income taxes payable 220  330 
Operating right of use liability 1,019  693 
Contingent consideration from acquisitions 300  300 
Deferred revenue 2,042  1,881 
Total current liabilities 55,644  58,196 
     
Deferred income taxes, net, foreign 185  187 
Deferred income taxes, net, domestic 1,719  1,568 
Finance lease payable, net of current position 1,290  - 
Contingent consideration from acquisitions, net of current position 1,671  1,671 
Operating right of use liability, net of current position 4,519  2,268 
Borrowings under line of credit 30,477  30,804 
Total liabilities 95,505  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; 17,833,287 shares issued and 7,597,028 shares outstanding at September 28, 2024 and 17,673,427 shares issued and 7,844,821 shares outstanding at December 30, 2023 890  882 
Additional paid-in capital 118,136  116,579 
Accumulated other comprehensive loss (2,787) (2,813)
Accumulated deficit (8,805) (19,265)
Treasury stock, 10,236,259 shares at September 28, 2024 and 9,828,606 shares at December 30, 2023, at cost (77,394) (69,593)
Total stockholders’ equity 30,040  25,790 
     
Total liabilities and stockholders’ equity $125,545  $120,484 


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

 
 Thirteen Weeks Ended  
 September 28,
2024
 September 30,
2023
 
Net income $2,746  $3,756 
Adjustments to reconcile net income to cash used in operating activities 1,508  1,049 
Changes in operating assets and liabilities:    
Accounts receivable (9,033) 4,143 
Prepaid expenses and other current assets 321  (987)
Net of transit accounts receivable and payable 435  1,556 
Accounts payable and accrued expenses (1,445) (785)
Accrued payroll and related costs 1,919  2,790 
Right of use liabilities (228) (333)
Income taxes payable 81  15 
Deferred revenue (636) (169)
Deposits (12) 2 
Total adjustments (7,090) 7,281 
Net cash (used in) provided by operating activities ($4,344) $11,037 
     
Net cash (used in) provided by investing activities (522) 79 
Net cash provided by (used in) financing activities 4,375  (11,343)
Effect of exchange rate changes on cash and cash equivalents 167  (392)
Decrease in cash and cash equivalents ($324) ($619)
     
Common stock repurchase ($2,410) ($3,389)


 Thirty-Nine Weeks Ended  
 September 28,
2024
 September 30,
2023
 
Net income $10,460  $11,576 
Adjustments to reconcile net income to cash used in operating activities 4,200  2,795 
Changes in operating assets and liabilities:    
Accounts receivable (5,207) (6,696)
Prepaid expenses and other current assets (475) (675)
Net of transit accounts receivable and payable (311) 22,384 
Accounts payable and accrued expenses (760) (1,798)
Accrued payroll and related costs 433  1,596 
Right of use liabilities (686) (1,016)
Income taxes payable (106) 162 
Deferred revenue 161  (784)
Deposits 98  4 
Total adjustments (2,653) 15,972 
Net cash provided by operating activities 7,807  27,548 
     
Net cash used in investing activities (1,589) (480)
Net cash used in financing activities (9,135) (26,558)
Effect of exchange rate changes on cash and cash equivalents (211) (195)
(Decrease) increase in cash and cash equivalents ($3,128) $315 
     
Common stock repurchase ($7,801) ($24,449)


   
RCM Technologies, Inc.Tel: 856.356.4500Corporate Contacts:
2500 McClellan Avenueinfo@rcmt.comBradley S. Vizi
Pennsauken, NJ 08109www.rcmt.comExecutive Chairman
  Kevin D. Miller
  Chief Financial Officer
   

FAQ

What was RCMT's revenue growth in Q3 2024?

RCMT's revenue grew 4.0% to $60.4 million in Q3 2024 compared to $58.0 million in Q3 2023.

How much was RCMT's Q3 2024 earnings per share?

RCMT reported GAAP earnings of $0.35 per diluted share in Q3 2024, compared to $0.46 per diluted share in Q3 2023.

What was RCMT's adjusted EBITDA in Q3 2024?

RCMT's adjusted EBITDA was $5.6 million in Q3 2024, a 9.5% increase from $5.1 million in Q3 2023.

Which segments led RCMT's growth in Q3 2024?

Healthcare and Engineering segments led RCMT's growth in Q3 2024.

RCM Technologies Inc

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