8-K
RCM TECHNOLOGIES, INC. (RCMT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 8, 2023
RCM Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)
| Nevada<br><br> <br>(State or Other<br><br> <br>Jurisdiction of<br><br> <br>Incorporation) | 1-10245<br><br> <br>(Commission File<br><br> <br>Number) | 95-1480559<br><br> <br>(I.R.S. Employer<br><br> <br>Identification No.) |
|---|---|---|
| 2500 McClellan Avenue, Suite 350 | ||
| --- | --- | |
| Pennsauken, NJ | 08109-4613 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (856) 356-4500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)). |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)). |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.05 per share | RCMT | The NASDAQ Stock Market LLC |
Item 2.02. Results of Operations and Financial Condition.
On November 8, 2023, the Registrant issued a press release regarding its financial results for the thirteen and thirty-nine weeks ended September 30, 2023. A copy of the press release is furnished as Exhibit 99 to this report.
The information set forth under this “Item 2.02. Results of Operations and Financial Condition” (including the exhibit) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Registrant pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Shell Company Transactions.
None.
(d) Exhibits.
| Exhibit Number | |
|---|---|
| 99 | Press Release by the Registrant, dated November 8, 2023, furnished in accordance with Item 2.02 of this Current Report on Form 8-K. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RCM TECHNOLOGIES, INC.
| By: | /s/ Kevin D. Miller |
|---|---|
| Kevin D. Miller | |
| Chief Financial Officer, Treasurer and<br><br> <br>Secretary |
Dated: November 8, 2023
ex_591054.htm
Exhibit 99
| 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,<br><br> <br>2023 | October 1,<br> 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 |
All values are in US Dollars.
| Thirty-Nine Weeks Ended | ||
|---|---|---|
| September 30,<br> 2023 | October 1,<br> 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 |
All values are in US Dollars.
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,<br> 2023 | October 1,<br> 2022 | September 30,<br> 2023 | October 1,<br> 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 |
All values are in US Dollars.
RCM Technologies, Inc.
Summary of Selected Income Statement Data
(Unaudited)
(In Thousands)
| Thirteen Weeks Ended September 30, 2023 | ||||
|---|---|---|---|---|
| Specialty<br> Health Care | Engineering | Life Sciences<br> 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 |
All values are in US Dollars.
| Thirteen Weeks Ended October 1, 2022 | ||||
|---|---|---|---|---|
| Specialty<br> Health Care | Engineering | Life Sciences<br> 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 |
All values are in US Dollars.
| Thirty-Nine Weeks Ended September 30, 2023 | ||||
|---|---|---|---|---|
| Specialty<br> Health Care | Engineering | Life Sciences<br> 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 |
All values are in US Dollars.
| Thirty-Nine Weeks Ended October 1, 2022 | ||||
|---|---|---|---|---|
| Specialty<br> Health Care | Engineering | Life Sciences<br> 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 |
All values are in US Dollars.
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 | ||
| 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 | ||
| 79,835 | 56,002 | |||
| Contingencies (note 15) | - | - | ||
| Stockholders’ equity: | ||||
| Preferred stock, 1.00 par value; 5,000,000 shares authorized; | ||||
| - | - | |||
| Common stock, 0.05 par value; 40,000,000 shares authorized; | ||||
| 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 | ||||
| (68,269 | (43,820 | |||
| 21,379 | 31,962 | |||
| 101,214 | 87,964 |
All values are in US Dollars.
RCM Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
| Thirteen Weeks Ended | |||
|---|---|---|---|
| September 30,<br> 2023 | October 1,<br> 2022 | ||
| Net income | 3,756 | 3,518 | |
| Adjustments to reconcile net income to cash<br><br> <br>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 |
All values are in US Dollars.
| Thirty-Nine Weeks Ended | |||
|---|---|---|---|
| September 30,<br> 2023 | October 1,<br> 2022 | ||
| Net income | 11,576 | 16,052 | |
| Adjustments to reconcile net income to cash<br><br> <br>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 |
All values are in US Dollars.