RCM Technologies, Inc. Announces Fourth Quarter and Fiscal Year 2024 Results

PENNSAUKEN, N.J., March 12, 2025 (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 fifty-two weeks ended December 28, 2024.

RCM Technologies reported revenue of $76.9 million for the thirteen weeks ended December 28, 2024 (the current quarter), an increase of 8.3% compared to $71.0 million for the thirteen weeks ended December 30, 2023 (the comparable prior quarter). Gross profit was $21.6 million for the current quarter and the comparable prior quarter.  The Company experienced GAAP net income of $2.9 million, or $0.37 per diluted share, for the current quarter compared to $5.3 million, or $0.65 per diluted share, for the comparable prior quarter. The Company experienced adjusted EBITDA (non-GAAP) of $6.3 million for the current quarter, as compared to $8.9 million for the comparable prior quarter. The Company experienced $0.49 of adjusted net income per diluted share (non-GAAP) for the current quarter as compared to $0.73 for the comparable prior quarter.

RCM Technologies reported revenue of $278.4 million for the fifty-two weeks ended December 28, 2024 (the current year), an increase of 5.8% compared to $263.2 million for the fifty-two weeks ended December 30, 2023 (the comparable prior year). Gross profit was $79.8 million for the current year, a 4.0% increase compared to $76.7 million for the comparable prior year.  The Company experienced GAAP net income of $13.3 million, or $1.68 per diluted share, for the current year compared to $16.8 million, or $1.96 per diluted share, for the comparable prior year. The Company experienced adjusted EBITDA (non-GAAP) of $25.9 million for the current year as compared to $26.6 million for the comparable prior year. The Company experienced $2.03 of adjusted net income per diluted share (non-GAAP) for the current year as compared to $2.04 for the comparable prior year.

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “2024 demonstrated substantial progress as many of our strategic initiatives gained traction heading into the new year.”

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “As we look to 2025, we believe we have forged the foundation for increased earnings power.”



Conference Call



On Thursday, March 13, 2025, RCM Technologies will host a conference call to discuss these results. The call will begin at 11:30 a.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 Share and Per Share Amounts)
  Thirteen Weeks Ended  
  December 28,

2024
  December 30,

2023
 
Revenue $76,912   $71,028  
Cost of services   55,343     49,397  
Gross profit   21,569     21,631  
Selling, general and administrative   16,025     13,403  
Depreciation and amortization of property and equipment   407     276  
Amortization of acquired intangible assets       46  
Impairment of intangible assets   547      
Potential stock issuance and financing transactions   64      
Remeasurement of contingent consideration   (1,759 )    
Gain on sale of assets       (395 )
Operating income   6,285     7,906  
Other expense, net   516     532  
Income before income taxes   5,769     7,374  
Income tax expense   2,902     2,119  
Net income $2,867   $5,255  
         
Diluted net earnings per share data $0.37   $0.65  
Diluted weighted average shares outstanding   7,733,142     8,142,184  
             

  Fifty-Two Weeks Ended  
  December 28,

2024
  December 30,

2023
 
Revenue $278,380   $263,237  
Cost of services   198,602     186,541  
Gross profit   79,778     76,696  
Selling, general and administrative   56,787     52,185  
Depreciation and amortization of property and equipment   1,419     1,032  
Amortization of acquired intangible assets   136     182  
Impairment of intangible assets   547      
Potential stock issuance and financing transactions   323      
Remeasurement of contingent consideration   (1,759 )    
Gain on sale of assets       (395 )
Operating income   22,325     23,692  
Other expense, net   2,135     1,497  
Income before income taxes   20,190     22,195  
Income tax expense   6,863     5,364  
Net income $13,327   $16,831  
         
Diluted net earnings per share data $1.68   $1.96  
Diluted weighted average shares outstanding   7,939,381     8,592,572  
 
RCM Technologies, Inc.

Supplemental Operating Results on a Non-GAAP Basis

(Unaudited)

(In Thousands, Except Per Share Amounts)
 

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 fifty-two weeks ended December 28, 2024 and December 30, 2023. 

  Thirteen Weeks Ended   Fifty-Two Weeks Ended  
  December 28,
2024
  December 30,
2023
  December 28,
2024
  December 30,
2023
 
                 
GAAP operating income $6,285   $7,906   $22,325   $23,692  
Adjustments                
Gain on sale of assets               (395 )
Remeasurement of contingent consideration   (1,759 )       (1,759 )    
Equity compensation   710     641     2,864     2,092  
Potential stock issuance and financing transaction   64         323      
Impairment of intangible assets   547         547      
Adjusted operating income (non-GAAP) $5,847   $8,547   $24,300   $25,389  
                 
GAAP net income $2,867   $5,255   $13,327   $16,831  
Income tax expense   2,902     2,119     6,863     5,364  
Interest expense, net   664     429     2,215     1,399  
Depreciation of property and equipment   407     276     1,419     1,032  
Amortization of acquired intangible assets       46     136     182  
EBITDA (non-GAAP) $6,840   $8,125   $23,960   $24,808  
                 
Adjustments                
Gain on sale of assets               (395 )
Remeasurement of contingent consideration   (1,759 )       (1,759 )    
(Gain) loss on foreign currency transactions   (148 )   103     (80 )   98  
Equity compensation   710     641     2,864     2,092  
Potential stock issuance and financing transaction   64         323      
Impairment of intangible assets   547         547      
Adjusted EBITDA (non-GAAP) $6,254   $8,869   $25,855   $26,603  
                         

RCM Technologies, Inc.

Supplemental Operating Results on a Non-GAAP Basis (Continued)

(Unaudited)

(In Thousands)
 
  Thirteen Weeks Ended   Fifty-Two Weeks Ended  
  December 28,
2024
  December 30,
2023
  December 28,
2024
  December 30,
2023
 
                 
GAAP net income $2,867   $5,255   $13,327   $16,831  
Adjustments                
Gain on sale of assets               (395 )
Remeasurement of contingent consideration   (1,759 )       (1,759 )    
(Gain) loss on foreign currency transactions   (148 )   103     (80 )   98  
Equity compensation   710     641     2,864     2,092  
Potential stock issuance and financing transaction   64         323      
Impairment of intangible assets   547         547      
Tax impact from normalized rate   1,503     (73 )   900     (1,113 )
Adjusted net income (non-GAAP) $3,784   $5,926   $16,122   $17,513  
                 
GAAP diluted net earnings per share $0.37   $0.65   $1.68   $1.96  
Adjustments                
Gain on sale of assets             ($0.04 )
Remeasurement of contingent consideration ($0.22 )     ($0.22 )    
(Gain) loss on foreign currency transactions ($0.02 )   0.01   ($0.01 ) $0.01  
Equity compensation $0.09     0.08   $0.36   $0.24  
Potential stock issuance and financing transaction $0.01       $0.04      
Impairment of intangible assets $0.07       $0.07      
Tax impact from normalized rate(a) $0.19     (0.01 ) ($0.11 ) ($0.13 )
Adjusted diluted net earnings per share (non-GAAP) $0.49   $0.73   $2.03   $2.04  

(a) Amount reflects an adjustment to income tax expense applied to non-GAAP adjusted consolidated taxable income. The Company used an estimated effective income tax rate of 26.5% for both periods presented, approximating the Company’s federal USA income tax rate plus the tax-affected rate for states and Puerto Rico.

RCM Technologies, Inc.

Summary of Selected Income Statement Data

(Unaudited)

(In Thousands)
 
  Thirteen Weeks Ended December 28, 2024  
  Specialty
Health Care
  Engineering   Life Sciences,
Data and Solutions
  Consolidated  
                 
Revenue $41,011   $26,279   $9,622   $76,912  
Cost of services   28,474     21,098     5,771     55,343  
Gross profit $12,537   $5,181   $3,851   $21,569  
Gross profit margin   30.6 %   19.7 %   40.0 %   28.0 %
                         

  Thirteen Weeks Ended December 30, 2023  
  Specialty
Health Care
  Engineering   Life Sciences,
Data and Solutions
  Consolidated  
                 
Revenue $36,688   $22,719   $11,621   $71,028  
Cost of services   25,686     16,589     7,122     49,397  
Gross profit $11,002   $6,130   $4,499   $21,631  
Gross profit margin   30.0 %   27.0 %   38.7 %   30.5 %
                         

  Fifty-Two Weeks Ended December 28, 2024  
  Specialty
Health Care
  Engineering   Life Sciences,
Data and Solutions
 

Consolidated

 
                 
Revenue $142,679   $96,459   $39,242   $278,380  
Cost of services   100,146     73,916     24,540     198,602  
Gross profit $42,533   $22,543   $14,702   $79,778  
Gross profit margin   29.8 %   23.4 %   37.5 %   28.7 %
                         

  Fifty-Two Weeks Ended December 30, 2023  
  Specialty
Health Care
  Engineering   Life Sciences,
Data and Solutions
  Consolidated  
                 
Revenue $136,241   $84,675   $42,321   $263,237  
Cost of services   96,309     64,071     26,161     186,541  
Gross profit $39,932   $20,604   $16,160   $76,696  
Gross profit margin   29.3 %   24.3 %   38.2 %   29.1 %
                         

RCM Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands, Except Share Amounts)
 
  December 28,   December 30,  
  2024   2023  
         
Current assets:        
Cash and cash equivalents $4,729   $6,284  
Accounts receivable, net of provision for credit losses of $1,570 and $1,600 at December 28, 2024 and December 30, 2023, respectively   77,960     70,690  
Transit accounts receivable   7,315     8,891  
Prepaid expenses and other current assets   7,034     4,637  
Total current assets   97,038     90,502  
         
Property and equipment, net   7,368     4,005  
         
Other assets:        
Deposits   230     313  
Deferred tax assets, foreign   120     55  
Goodwill   22,147     22,147  
Operating right of use asset   5,174     2,779  
Intangible assets, net       683  
Total other assets   27,671     25,977  
         
Total assets $132,077   $120,484  

Current liabilities:        
Accounts payable and accrued expenses $13,369   $12,454  
Transit accounts payable   23,870     31,102  
Accrued payroll and related costs   9,929     11,203  
Finance lease payable   698     233  
Income taxes payable   346     330  
Operating right of use liability   1,046     693  
Contingent consideration from acquisitions   212     300  
Deferred revenue   4,163     1,881  
Total current liabilities   53,633     58,196  
         
Deferred income taxes, net, foreign       187  
Deferred income taxes, net, domestic   4,526     1,568  
Finance lease payable, net of current position   1,112      
Contingent consideration from acquisitions, net of current position       1,671  
Operating right of use liability, net of current position   4,355     2,268  
Borrowings under line of credit   34,967     30,804  
Total liabilities   98,593     94,694  
         
Contingencies (note 16) and Commitments (note 18)        
         
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; 17,838,372 shares issued and 7,602,113 shares outstanding at December 28, 2024 and 17,673,427 shares issued and 7,844,821 shares outstanding at December 30, 2023   890     882  
Additional paid-in capital   118,845     116,579  
Accumulated other comprehensive loss   (2,920 )   (2,813 )
Accumulated deficit   (5,938 )   (19,265 )
Treasury stock, 10,236,259 shares at December 28, 2024 and 9,828,606 shares at December 30, 2023   (77,393 )   (69,593 )
Stockholders’ equity   33,484     25,790  
         
Total liabilities and stockholders’ equity $132,077   $120,484  
             

RCM Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)
 
  Thirteen Weeks Ended  
  December 28,

2024
  December 30,

2023
 
Net income $2,867   $5,255  
Adjustments to reconcile net income to cash used in operating activities   2,693     1,526  
Changes in operating assets and liabilities:        
Accounts receivable   (2,064 )   (13,880 )
Prepaid expenses and other current assets   (1,917 )   678  
Net of transit accounts receivable and payable   (5,345 )   (6,660 )
Accounts payable and accrued expenses   1,861     292  
Accrued payroll and related costs   (1,698 )   (3,421 )
Right of use liabilities   (280 )   (337 )
Income taxes payable   140     80  
Deferred revenue   2,121     1,546  
Deposits   (15 )   (145 )
Total adjustments   (4,504 )   (20,321 )
Net cash used in operating activities ($1,637 ) ($15,066 )
         
Net cash used in investing activities   (983 )   (2,056 )
Net cash provided by financing activities   4,307     22,706  
Effect of exchange rate changes on cash and cash equivalents   (114 )   46  
Decrease in cash and cash equivalents $1,573   $5,630  
         
Common stock repurchase   $-   ($1,324 )
             

  Fifty-Two Weeks Ended  
  December 28,

2024
  December 30,

2023
 
Net income $13,327   $16,831  
Adjustments to reconcile net income to cash used in operating activities   6,893     4,321  
Changes in operating assets and liabilities:        
Accounts receivable   (7,271 )   (20,576 )
Prepaid expenses and other current assets   (2,392 )   3  
Net of transit accounts receivable and payable   (5,656 )   15,724  
Accounts payable and accrued expenses   1,101     (1,506 )
Accrued payroll and related costs   (1,265 )   (1,825 )
Right of use liabilities   (966 )   (1,353 )
Income taxes payable   34     242  
Deferred revenue   2,282     762  
Deposits   83     (141 )
Total adjustments   (7,157 )   (4,349 )
Net cash provided by operating activities   6,170     12,482  
         
Net cash used in investing activities   (2,572 )   (2,536 )
Net cash used in financing activities   (4,828 )   (3,852 )
Effect of exchange rate changes on cash and cash equivalents   (325 )   (149 )
(Decrease) increase in cash and cash equivalents ($1,555 ) $5,945  
         
Common stock repurchase ($7,800 ) ($25,773 )
             

RCM Technologies, Inc. Tel: 856.356.4500
Corporate Contacts:
2500 McClellan Avenue [email protected] Bradley S. Vizi
Pennsauken, NJ 08109 www.rcmt.com
Executive Chairman
    Kevin D. Miller
   
Chief Financial Officer