|
RCM Technologies, Inc.
|
Tel: 856.356.4500
|
Corporate Contacts:
|
|
2500 McClellan Avenue
|
Fax: 856.356.4600
|
Bradley S. Vizi
|
|
Pennsauken, NJ 08109
|
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
FOURTH QUARTER AND FULL YEAR 2020 RESULTS
Pennsauken, NJ – April 1, 2021 -- 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 fourteen and fifty-three week
periods ended January 2, 2021.
RCM Technologies reported revenue of $41.2 million for the fourteen week period ended January 2, 2021 (the current period), a 15.2% decrease as compared to
$48.6 million for the thirteen week period ended December 28, 2019 (the comparable prior year period). Gross profit was $10.7 million for the current period, a 15.5% decrease as compared to $12.7 million for the comparable prior year period. The
Company experienced a GAAP operating loss of $1.9 million for the current period, as compared to GAAP operating income of $2.0 million for the comparable prior year period. The Company experienced a GAAP net loss of $1.7 million, or $0.15 per
diluted share, for the current period as compared to GAAP net income of $1.0 million, or $0.08 per diluted share, for the comparable prior year period.
RCM Technologies reported revenue of $150.4 million for the fifty-three week period ended January 2, 2021 (the current period), a 21.3% decrease as compared
to $191.1 million for the fifty-two week period ended December 28, 2019 (the comparable prior year period). Gross profit was $38.9 million for the current period, a 20.0% decrease as compared to $48.6 million for the comparable prior year period.
The Company experienced a GAAP operating loss of $11.0 million for the current period, as compared to GAAP operating income of $6.6 million for the comparable prior year period. The Company experienced a GAAP net loss of $8.9 million, or $0.73 per
diluted share, for the current period as compared to GAAP net income of $4.1 million, or $0.31 per diluted share, for the comparable prior year period.
Bradley Vizi, Executive Chairman of RCM Technologies, commented, “We are pleased with the quarterly trajectory of our adjusted EBITDA. After realizing just
under $1 million in adjusted EBITDA in the fourth quarter of fiscal 2020, we expect to build on this progress and grow adjusted EBITDA sequentially in the first two quarters of fiscal 2021. After our school clients return from summer vacation in the
fall of 2021, when we expect most schools to be in person, we believe our fourth quarter will reflect continued strength.”
Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “We ended 2020 by generating $1.5 million in cash from operations while sequentially
growing revenue by $9.6 million. Our line of credit in 2020 decreased by $22.9 million, or 66%, from $34.8 million at the end of 2019 to $11.9 million at the end of 2020. We look forward to improved operating results in 2021.”
Conference Call
On Friday, April 2, 2021, RCM Technologies will host a conference call to discuss these results. The call will begin at 10:30 a.m. Eastern Time. The
dial-in number is (866) 578-1005.
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 the delivery of 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 and 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, as well as 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 a number of 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 Income
(Unaudited)
(In Thousands, Except Per Share Amounts)
|
Fourteen Week
Period Ended
January 2, 2021
|
Thirteen Week
Period Ended
December 28, 2019
|
|||
|
Revenue
|
$41,163
|
$48,550
|
||
|
Cost of services
|
30,474
|
35,893
|
||
|
Gross profit
|
10,689
|
12,657
|
||
|
Selling, general and administrative
|
9,714
|
10,225
|
||
|
Depreciation and amortization of property and equipment
|
272
|
317
|
||
|
Amortization of acquired intangible assets
|
81
|
80
|
||
|
Impairment of right of use assets and related costs
|
2,231
|
-
|
||
|
Tax credit professional fees
|
240
|
47
|
||
|
Operating (loss) income
|
(1,849
|
)
|
1,988
|
|
|
Other expense, net
|
(212
|
)
|
(470
|
)
|
|
(Loss) income before income taxes
|
(2,061
|
)
|
1,518
|
|
|
Income tax (benefit) expense
|
(373
|
)
|
509
|
|
|
Net (loss) income
|
($1,688
|
)
|
$1,009
|
|
|
Diluted net (loss) earnings per share data
|
($0.15
|
)
|
$0.07
|
|
Fifty-Three Week
Period Ended
January 2, 2021
|
Fifty-Two Week
Period Ended
December 28, 2019
|
|||
|
Revenue
|
$150,409
|
$191,100
|
||
|
Cost of services
|
111,554
|
142,508
|
||
|
Gross profit
|
38,855
|
48,592
|
||
|
Selling, general and administrative
|
37,551
|
40,390
|
||
|
Depreciation and amortization of property and equipment
|
1,065
|
1,261
|
||
|
Amortization of acquired intangible assets
|
321
|
327
|
||
|
Write-off of receivables and professional fees
incurred related to arbitration
|
8,397
|
-
|
||
|
Impairment of right of use assets and related costs
|
2,231
|
-
|
||
|
Tax credit professional fees
|
240
|
47
|
||
|
Operating (loss) income
|
(10,950
|
)
|
6,567
|
|
|
Other expense, net
|
(1,107
|
)
|
(1,745
|
)
|
|
(Loss) income before income taxes
|
(12,057
|
)
|
4,822
|
|
|
Income tax (benefit) expense
|
(3,188
|
)
|
764
|
|
|
Net (loss) income
|
($8,869
|
)
|
$4,058
|
|
|
Diluted net (loss) earnings per share data
|
($0.73
|
)
|
$0.31
|
RCM Technologies, Inc.
Summary Consolidated Selected Balance Sheet Data
(In Thousands)
|
January 2,
2021
|
December 28,
2019
|
||
|
(Unaudited)
|
|||
|
Cash and cash equivalents
|
$734
|
$1,847
|
|
|
Accounts receivable, net
|
$36,007
|
$59,760
|
|
|
Total current assets
|
$43,934
|
$70,657
|
|
|
Total assets
|
$68,339
|
$96,173
|
|
|
Total current liabilities
|
$28,741
|
$21,408
|
|
|
Borrowing under line of credit
|
$11,890
|
$34,761
|
|
|
Net debt (line of credit less cash)
|
$11,156
|
$32,914
|
|
|
Total liabilities
|
$46,101
|
$63,770
|
|
|
Stockholders’ equity
|
$22,238
|
$32,403
|
RCM Technologies, Inc.
Supplemental Operating Results on a Non-GAAP Basis
(Unaudited)
(In Thousands)
The following non-GAAP data, which adjusts for the categories of expenses described below, is a non-GAAP financial measure. Our management believes that this non-GAAP financial measure is useful information for
investors, shareholders and other stakeholders of our Company in gauging our results of operations on an ongoing basis. We believe that EBITDA and Adjusted EBITDA are performance measures and have provided a reconciliation between net income and
EBITDA and Adjusted EBITDA. Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net income as an indicator of performance. In addition, neither EBITDA nor Adjusted EBITDA takes into account changes in certain assets and
liabilities as well as 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 measure and the corresponding adjustments used to calculate “EBITDA” and “Adjusted EBITDA” for the fourteen and fifty-three week periods ended
January 2, 2021 and the thirteen and fifty-two week periods ended December 28, 2019.
|
Fourteen
Week Period
Ended
January 2,
2021
|
Thirteen
Week Period
Ended
December 28,
2019
|
Fifty-Three
Week Period
Ended
January 2,
2021
|
Fifty-Two
Week Period
Ended
December 28,
2019
|
|||||
|
GAAP net (loss) income
|
($1,688
|
)
|
$1,009
|
($8,869
|
)
|
$4,058
|
||
|
Income tax (benefit) expense
|
(373
|
)
|
509
|
(3,188
|
)
|
764
|
||
|
Interest expense
|
128
|
419
|
778
|
1,695
|
||||
|
Change in fair value of contingent consideration
|
37
|
21
|
145
|
61
|
||||
|
Depreciation of property and equipment
|
272
|
317
|
1,065
|
1,261
|
||||
|
Amortization of acquired intangible assets
|
81
|
80
|
321
|
327
|
||||
|
EBITDA (non-GAAP)
|
($1,543
|
)
|
$2,355
|
($9,748
|
)
|
$8,166
|
||
|
Adjustments
|
||||||||
|
Write-off of receivables and professional fees
incurred related to arbitration
|
-
|
-
|
8,397
|
-
|
||||
|
Impairment of right of use assets and
related costs
|
2,231
|
-
|
2,231
|
-
|
||||
|
Tax credit professional fees
|
240
|
47
|
240
|
47
|
||||
|
Gain (loss) on foreign currency transactions
|
47
|
30
|
184
|
(11
|
)
|
|||
|
Adjusted EBITDA (non-GAAP)
|
$975
|
$2,432
|
$1,304
|
$8,202
|
RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
|
Fourteen Week
Period Ended
January 2, 2021
|
Thirteen Week
Period Ended
December 28, 2019
|
||||
|
Net (loss) income
|
($1,688
|
)
|
$1,009
|
||
|
Adjustments to reconcile net income to cash
used in operating activities
|
2,776
|
1,945
|
|||
|
Changes in operating assets and liabilities:
|
|||||
|
Accounts receivable
|
(2,944
|
)
|
(2,442
|
)
|
|
|
Prepaid expenses and other current assets
|
(2,432
|
)
|
(1,128
|
)
|
|
|
Net of transit accounts receivable and payable
|
1,701
|
(1,216
|
)
|
||
|
Accounts payable and accrued expenses
|
131
|
281
|
|||
|
Accrued payroll and related costs
|
3,732
|
644
|
|||
|
Right of use assets
|
(810
|
)
|
471
|
||
|
Right of use liabilities
|
787
|
(480
|
)
|
||
|
Income taxes payable
|
210
|
8
|
|||
|
Total adjustments
|
3,151
|
(1,917
|
)
|
||
|
Cash provided by (used in) operating activities
|
1,463
|
(908
|
)
|
||
|
Net cash used in investing activities
|
(59
|
)
|
(67
|
)
|
|
|
Net cash (used in) provided by financing activities
|
(1,441
|
)
|
2,467
|
||
|
Effect of exchange rate changes
|
14
|
(38
|
)
|
||
|
(Decrease) increase in cash and cash equivalents
|
($23
|
)
|
$1,454
|
||
|
Fifty-Three Week
Period Ended
January 2, 2021
|
Fifty-Two Week
Period Ended
December 28, 2019
|
||||
|
Net (loss) income
|
($8,869
|
)
|
$4,058
|
||
|
Adjustments to reconcile net income to cash
used in operating activities
|
9,069
|
3,881
|
|||
|
Changes in operating assets and liabilities:
|
|||||
|
Accounts receivable
|
15,947
|
(7,626
|
)
|
||
|
Prepaid expenses and other current assets
|
(162
|
)
|
(645
|
)
|
|
|
Net of transit accounts receivable and payable
|
2,757
|
(293
|
)
|
||
|
Accounts payable and accrued expenses
|
1,639
|
(3,085
|
)
|
||
|
Accrued payroll and related costs
|
4,557
|
(1,342
|
)
|
||
|
Right of use assets
|
1,490
|
(5,820
|
)
|
||
|
Right of use liabilities
|
(1,529
|
)
|
6,056
|
||
|
Income taxes payable
|
304
|
38
|
|||
|
Total adjustments
|
34,072
|
(8,836
|
)
|
||
|
Cash provided by (used in) operating activities
|
25,203
|
(4,778
|
)
|
||
|
Net cash used in investing activities
|
(419
|
)
|
(363
|
)
|
|
|
Net cash (used in) provided by financing activities
|
(25,632
|
)
|
6,627
|
||
|
Effect of exchange rate changes
|
(265
|
)
|
(121
|
)
|
|
|
(Decrease) increase in cash and cash equivalents
|
($1,113
|
)
|
$1,365
|
||
RCM Technologies, Inc.
Summary of Selected Income Statement Data
(Unaudited)
(In Thousands)
|
Fourteen Week Period Ended January 2, 2021
|
||||||||
|
Engineering
|
Specialty
Health Care
|
Information
Technology
|
Consolidated
|
|||||
|
Revenue
|
$14,427
|
$18,585
|
$8,151
|
$41,163
|
||||
|
Cost of services
|
10,554
|
14,079
|
5,841
|
30,474
|
||||
|
Gross profit
|
$3,873
|
$4,506
|
$2,310
|
$10,689
|
||||
|
Gross profit margin
|
26.8
|
%
|
24.2
|
%
|
28.3
|
%
|
26.0
|
%
|
|
Thirteen Week Period Ended December 28, 2019
|
||||||||
|
Engineering
|
Specialty
Health Care
|
Information
Technology
|
Consolidated
|
|||||
|
Revenue
|
$15,095
|
$25,043
|
$8,412
|
$48,550
|
||||
|
Cost of services
|
10,729
|
19,069
|
6,095
|
35,893
|
||||
|
Gross profit
|
$4,366
|
$5,974
|
$2,317
|
$12,657
|
||||
|
Gross profit margin
|
28.9
|
%
|
23.9
|
%
|
27.5
|
%
|
26.1
|
%
|
|
Fifty-Three Week Period Ended January 2, 2021
|
||||||||
|
Engineering
|
Specialty
Health Care
|
Information
Technology
|
Consolidated
|
|||||
|
Revenue
|
$57,715
|
$60,481
|
$32,213
|
$150,409
|
||||
|
Cost of services
|
41,227
|
47,116
|
23,211
|
111,554
|
||||
|
Gross profit
|
$16,488
|
$13,365
|
$9,002
|
$38,855
|
||||
|
Gross profit margin
|
28.6
|
%
|
22.1
|
%
|
28.0
|
%
|
25.8
|
%
|
|
Fifty-Two Week Period Ended December 28, 2019
|
||||||||
|
Engineering
|
Specialty
Health Care
|
Information
Technology
|
Consolidated
|
|||||
|
Revenue
|
$67,873
|
$89,348
|
$33,879
|
$191,100
|
||||
|
Cost of services
|
49,395
|
68,464
|
24,649
|
142,508
|
||||
|
Gross profit
|
$18,478
|
$20,884
|
$9,230
|
$48,592
|
||||
|
Gross profit margin
|
27.2
|
%
|
23.4
|
%
|
27.2
|
%
|
25.4
|
%
|