RCM Technologies, Inc. Announces Fourth Quarter and Full Year 2020 Results
02 April 2021 - 7:05AM
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 WeekPeriod 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 PeriodEnded
January 2, 2021 |
|
|
Thirteen Week PeriodEnded
December 28, 2019 |
|
|
Fifty-Three Week PeriodEnded
January 2, 2021 |
|
|
Fifty-Two Week PeriodEndedDecember
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 WeekPeriod 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 |
% |
|
|
|
|
|
|
|
|
|
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 |
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