On November 8, 2023, RCM Technologies Inc (RCMT, Financial), a leading provider of business and technology solutions, released its financial results for the thirteen and thirty-nine weeks ended September 30, 2023. The company reported a marginal decrease in quarterly revenue to $58.0 million, down 0.2% from $58.2 million in the same period last year. Despite the slight dip in revenue, RCMT's GAAP net income for the quarter increased to $3.8 million, or $0.46 per diluted share, compared to $3.5 million, or $0.33 per diluted share, in the comparable prior-year period.
Financial Highlights and Challenges
For the thirty-nine weeks ended September 30, 2023, RCMT saw a more pronounced revenue decline of 10.4%, with revenues totaling $192.2 million compared to $214.5 million in the previous year. Gross profit for the period also fell by 11.8% to $55.1 million. GAAP operating income and GAAP net income for the nine-month period similarly decreased to $15.8 million and $11.6 million, respectively. Adjusted EBITDA for the thirty-nine weeks was reported at $16.3 million, a decrease from $22.5 million year-over-year.
Management Commentary
Bradley Vizi, Executive Chairman of RCM Technologies, expressed optimism about the company's trajectory, stating,
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, highlighted the company's improved gross margin, noting,
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."
Income Statement and Balance Sheet Summary
The income statement data revealed that the cost of services remained relatively stable, with a slight decrease in the thirteen-week period and a more significant reduction over thirty-nine weeks. Selling, general, and administrative expenses saw a minor increase in the quarterly period but decreased over the nine-month period. The balance sheet and cash flow statements were not detailed in the earnings release.
Segment Performance
RCMT's business segments experienced mixed results. The Specialty Health Care segment's revenue decreased year-over-year for the thirteen-week period, with a corresponding decline in gross profit margin. The Engineering segment's revenue increased, while the Life Sciences and IT segment also saw an uptick in revenue and a significant improvement in gross profit margin.
Conference Call and Company Outlook
RCMT will host a conference call to discuss these results further. The call is scheduled for November 9, 2023, at 11:00 a.m. Eastern Time. The dial-in number is (800) 285-6670. The company remains focused on enhancing operational performance and delivering advanced solutions across various sectors, including healthcare and technology.
Investors and stakeholders are reminded that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. For a more comprehensive understanding of the company's financial performance, interested parties are encouraged to review the full earnings release and the company's filings with the Securities and Exchange Commission.
Explore the complete 8-K earnings release (here) from RCM Technologies Inc for further details.
