Financial Performance - RCM Technologies reported revenue of $84.5 million for the thirteen weeks ended March 29, 2025, a 17.4% increase from $71.9 million in the prior year[3] - Gross profit for the current quarter was $22.0 million, reflecting a 7.9% increase compared to $20.4 million in the comparable prior quarter[3] - GAAP net income was $4.2 million, or $0.54 per diluted share, compared to $4.0 million, or $0.48 per diluted share, in the prior year[3] - Adjusted EBITDA for the current quarter was $7.8 million, up from $6.8 million in the comparable prior quarter[3] - The company experienced a gross profit margin of 26.0% for the current quarter, compared to 28.3% in the prior year[17] - Net income for the thirteen weeks ended March 29, 2025, was $4,186 million, an increase from $3,952 million in the same period of 2024, representing a growth of approximately 5.9%[21] Cash Flow and Debt Management - Cash flow from operations was $16.7 million, and net debt was reduced by $12.0 million during the quarter[4] - Net cash provided by operating activities increased significantly to $16,660 million, compared to $6,426 million in the prior year, marking a year-over-year increase of approximately 159.5%[21] - Total adjustments to reconcile net income to cash used in operating activities amounted to $12,474 million, up from $2,474 million in the previous year[21] - The company reported a net cash used in investing activities of $427 million, an improvement from $669 million in the prior year[21] - Net cash used in financing activities was $15,583 million, compared to $9,714 million in the same period last year, indicating an increase of approximately 60.5%[21] - The effect of exchange rate changes on cash and cash equivalents resulted in a decrease of $198 million, slightly better than the $228 million decrease in the previous year[21] Shareholder Equity and Stock Management - The company reduced its diluted weighted average shares outstanding from 8,170,839 to 7,741,481[10] - Stockholders' equity increased to $34.6 million from $33.5 million, reflecting a positive trend in financial health[19] - The company repurchased common stock amounting to $3,188 million during the period[21] - Retirement of common shares was recorded at $939 million, down from $1,317 million in the same period last year[21] Asset and Liability Management - Total current assets decreased from $97.0 million to $86.0 million, while total liabilities decreased from $98.6 million to $86.4 million[19] - Accounts receivable increased to $9,558 million, compared to a decrease of $2,802 million in the previous year, indicating a significant change in working capital[21] - Deferred revenue decreased to $356 million from $1,633 million in the prior year, reflecting changes in customer contracts and revenue recognition[21] Segment Performance - RCM Technologies' Life Sciences segment generated $43.3 million in revenue, while the Engineering segment contributed $32.1 million[17]

Core Viewpoint - RCM Technologies, Inc. reported strong financial results for the thirteen weeks ended March 29, 2025, with significant increases in revenue, gross profit, and net income compared to the prior year, indicating robust operational performance and effective investment strategies [2][3]. Financial Performance - Revenue for the current quarter was $84.5 million, a 17.4% increase from $71.9 million in the comparable prior quarter [2]. - Gross profit reached $22.0 million, reflecting a 7.9% increase from $20.4 million in the prior quarter [2]. - GAAP net income was $4.2 million, or $0.54 per diluted share, compared to $4.0 million, or $0.48 per diluted share, in the prior quarter [2]. - Adjusted EBITDA (non-GAAP) was $7.8 million, up from $6.8 million in the comparable prior quarter [2]. Operational Highlights - The company generated $16.7 million in cash flow from operations and reduced net debt by $12.0 million while retiring shares [3]. - The internal business metrics are strengthening, and the company is positioned well due to a thoughtful investment strategy [3]. Segment Performance - Revenue breakdown for the current quarter included $43.3 million from Life Sciences, $32.1 million from Specialty Health Care, and $9.0 million from Data and Solutions [16]. - Gross profit margins varied by segment, with Life Sciences at 28.2%, Specialty Health Care at 19.2%, and Data Solutions at 39.7% [16]. Upcoming Events - A conference call is scheduled for May 8, 2025, to discuss the financial results in detail [4].

RCM Technologies, Inc. (RCMT) ended the recent trading session at $16.42, demonstrating a -0.91% swing from the preceding day's closing price. This move lagged the S&P 500's daily gain of 2.51%. Meanwhile, the Dow experienced a rise of 2.66%, and the technology-dominated Nasdaq saw an increase of 2.71%. Coming into today, shares of the company had gained 10.32% in the past month. In that same time, the Business Services sector lost 7.26%, while the S&P 500 lost 8.86%. The upcoming earnings release of RCM Te ...

Financial Data and Key Metrics Changes - Consolidated gross profit for Q4 2024 was $21.6 million, flat compared to Q4 2023. For fiscal 2024, gross profit was $79.8 million, up from $76.7 million in fiscal 2023 [30] - Adjusted EBITDA for Q4 2024 was $6.3 million, down from $8.9 million in Q4 2023. For fiscal 2024, adjusted EBITDA was $25.9 million, compared to $26.6 million in fiscal 2023 [30][31] - Adjusted EPS for fiscal 2024 was $2.03, slightly down from $2.04 in fiscal 2023 [31] Business Line Data and Key Metrics Changes - In the Engineering segment, Q4 2024 gross profit was $5.2 million, down from $6.1 million in Q4 2023. Fiscal 2024 gross profit was $22.5 million, up from $20.6 million in fiscal 2023 [35] - In IT, Life Sciences, and Data Solutions, Q4 2024 gross profit was $3.9 million, down from $4.5 million in Q4 2023. Fiscal 2024 gross profit was $14.7 million, down from $16.2 million in fiscal 2023 [36] - In Health Care, Q4 2024 gross profit was $12.5 million, up from $11.0 million in Q4 2023. Fiscal 2024 gross profit was $42.5 million, compared to $39.9 million in fiscal 2023 [37] Market Data and Key Metrics Changes - School revenue for Q4 2024 was $34.9 million, up from $29.8 million in Q4 2023. Non-School revenue for Q4 2024 was $6.2 million, down from $6.9 million in Q4 2023 [38] - Days Sales Outstanding (DSOs) improved from 114 in Q3 2023 to 92 in Q4 2024 [39] Company Strategy and Development Direction - The company aims for smart growth, operational excellence, and delivering unparalleled service to clients as it moves into 2025 [11] - The focus on behavioral health services in schools is a key growth driver, with increasing demand for specialized providers [9] - The company is transitioning to AI and ML tools in its primary markets, indicating a strategic shift in service delivery [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing a strong employee base and strategic positioning for success despite macroeconomic uncertainties [6] - The company aims for double-digit growth in adjusted EBITDA for each quarter in fiscal 2025, emphasizing a commitment to achieving these targets [41][74] Other Important Information - Several material expenses negatively impacted Q4 2024 profitability, including a canceled industrial process equipment order and high medical costs from a self-insured plan [32][33] - The company has an approved settlement agreement regarding a class action lawsuit, which added significant SG&A expenses [33] Q&A Session Summary Question: Was any of the extra costs realized in the tax rate? - The effective tax rate for the company overall is 34.0%, which is considered high and abnormal. It is expected to be well below 30% in the following year [45][47] Question: What is the normal tax rate range? - The normal tax rate range is expected to be between 26% to 29% [49] Question: Can you elaborate on the specific costs in Engineering? - The $900,000 reduction in gross profit was due to a canceled order and significant rework on a large project, both resulting in lower revenue [52][54] Question: Did the canceled order relate to any political factors? - No, the canceled order was not related to political factors but was a nuance with a particular client [62] Question: Is there any impact from DOGE or related headlines? - There is no direct impact from DOGE on the company, although it could affect the broader IT environment [66] Question: What are the expectations for operating income growth? - The company aims for low double-digit growth in adjusted EBITDA every quarter, despite a disappointing fourth quarter [73][74]

Financial Data and Key Metrics Changes - Consolidated gross profit for Q4 2024 was $21.6 million, flat compared to Q4 2023. For fiscal 2024, gross profit was $79.8 million, up from $76.7 million in fiscal 2023 [30] - Adjusted EBITDA for Q4 2024 was $6.3 million, down from $8.9 million in Q4 2023. For fiscal 2024, adjusted EBITDA was $25.9 million, compared to $26.6 million in fiscal 2023 [31] - Adjusted EPS for fiscal 2024 was $2.03, slightly down from $2.04 in fiscal 2023 [31] Business Line Data and Key Metrics Changes - In Engineering, Q4 2024 gross profit was $5.2 million, down from $6.1 million in Q4 2023. Fiscal 2024 gross profit was $22.5 million, up from $20.6 million in fiscal 2023 [35] - In IT, Life Sciences, and Data Solutions, Q4 2024 gross profit was $3.9 million, down from $4.5 million in Q4 2023. Fiscal 2024 gross profit was $14.7 million, down from $16.2 million in fiscal 2023 [36] - In Health Care, Q4 2024 gross profit was $12.5 million, up from $11.0 million in Q4 2023. Fiscal 2024 gross profit was $42.5 million, compared to $39.9 million in fiscal 2023 [37] Market Data and Key Metrics Changes - School revenue for Q4 2024 was $34.9 million, compared to $29.8 million in Q4 2023. Non-School revenue for Q4 2024 was $6.2 million, down from $6.9 million in Q4 2023 [38] - Days Sales Outstanding (DSOs) improved from 114 in Q3 2023 to 92 in Q4 2024 [39] Company Strategy and Development Direction - The company aims for smart growth, operational excellence, and delivering unparalleled service to clients as it moves into 2025 [11] - The focus on behavioral health services in schools is a key growth driver, addressing the mental health crisis among students [9] - The company is transitioning to AI and ML tools in its IT services, indicating a shift in primary markets [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing a strong employee base and strategic positioning for success despite macroeconomic uncertainties [6] - The company aims for double-digit growth in adjusted EBITDA for each quarter in 2025, viewing any failure to meet this as a disappointing outcome [73] Other Important Information - The company faced several material expenses in Q4 2024, including a canceled industrial process equipment order and high medical costs, which negatively impacted gross profit [32][33] - A class action lawsuit settlement added approximately $450,000 in SG&A expenses [33] Q&A Session Summary Question: Was any of the extra costs realized in the tax rate? - The tax rate for Q4 was influenced by the overall effective tax rate for the year, which was 34.0%, considered high and abnormal [45][46] Question: What is the normal tax rate range? - The normal tax rate range is expected to be between 26% to 29% [48][49] Question: Can you elaborate on the specific costs in Engineering? - The $900,000 reduction in gross profit was due to a canceled order and significant rework on a project, both resulting in lower revenue [52][56] Question: Did the canceled order relate to any political factors? - No, the canceled order was due to nuances with a particular client, not political factors [62] Question: Is there any impact from DOGE or related headlines? - There is no direct impact from DOGE on the company, although general IT environment changes could occur [66][70] Question: What is the growth expectation for adjusted EBITDA? - The company aims for low double-digit growth in adjusted EBITDA every quarter in 2025 [73]

Revenue Breakdown - Approximately 51.2% of RCM's total revenue for the fiscal year ended December 28, 2024, was derived from Specialty Health Care services, 34.7% from Engineering services, and 14.1% from Life Sciences, Data and Solutions[16]. - Revenue for the fiscal year ended December 28, 2024, totaled $278.4 million, an increase from $263.2 million in the previous fiscal year[169]. - Specialty Health Care revenue increased by 4.7% to $142.7 million for the fiscal year ended December 28, 2024, driven by school clients, while non-school client revenue decreased to $25.0 million from $33.2 million[202]. - Engineering revenue rose by 13.9% to $96.5 million, with Energy Services revenue increasing by $15.1 million, despite declines in Aerospace and Industrial Processing revenues[204]. - Life Sciences, Data and Solutions revenue decreased by 7.3% to $39.2 million, attributed to the timing of large projects and a deemphasis on legacy staffing[205]. Operational Strategy - The Company aims to pursue selective strategic acquisitions to broaden its service scope and enhance technical competencies, focusing on companies with substantial growth prospects and experienced management[34]. - The Company is adapting its operating strategies to transition into higher value-oriented services, aiming to increase margins and generate sustainable revenue[28]. - RCM's growth strategy includes promoting full life cycle solution capabilities to strengthen long-term client relationships and create a more predictable revenue stream[26]. - The Company believes that maintaining or improving financial performance requires obtaining service agreements with new clients and retaining existing clients[119]. Workforce and Personnel - As of December 28, 2024, RCM assigned approximately 3,140 specialty healthcare services personnel to its customers[40]. - The Company has approximately 200 personnel assigned to its Life Sciences, Data and Solutions segment as of December 28, 2024[52]. - As of December 28, 2024, the company employed approximately 370 nonbillable employees and 3,710 billable employees, with a total workforce of about 4,100[84][93]. - Billable salaried employees typically have utilization rates ranging from 20% to 90%, while billable hourly long-term employees aim for near 100% utilization[86][87]. Financial Performance - Operating income decreased to $22.3 million, or 8.1% of revenue, for the fiscal year ended December 28, 2024, compared to 9.0% in the prior year[192]. - Net income for the fiscal year ended December 28, 2024, was $13.3 million, or 4.8% of revenue, down from 6.4% in the prior year[192]. - Selling, general and administrative expenses were $56.8 million for the fiscal year ended December 28, 2024, representing 20.4% of revenue[195]. - The Company incurred total expenses of $0.3 million related to potential stock issuance and financing activities during the fiscal year ended December 28, 2024[196]. - Cash provided by operating activities decreased to $6.2 million from $12.5 million, while cash used in financing activities increased to $4.8 million from $3.9 million[212]. Market and Industry Trends - The demand for healthcare professionals is expected to continue growing due to an aging population and technological advancements, with a significant market opportunity in telemedicine[19]. - The Engineering group is focused on growth areas including utility/electric power, aerospace, and renewable energy, with the EIA estimating that 38% of the U.S. electric generation capacity will be from wind and solar by 2050[20]. - The Department of Defense plans to spend over $1 trillion on procurement-related aviation expenditures over the next three decades, presenting significant opportunities for the Company in Aerospace Services[46]. - The Company believes that businesses are increasingly evaluating outsourcing for critical systems, indicating a potential growth area for its services[159]. Compliance and Risk Management - The Company is subject to various government regulations, including compliance with employee-related statutes, which it believes it is in material compliance with[75]. - The Company is subject to complex and evolving data privacy regulations, which can increase operating costs and pose compliance risks[129]. - The Company has experienced cybersecurity events but has not identified any that materially affected its financial condition or operations during the year ended December 28, 2024[133]. - The Company has implemented a cybersecurity risk management program that includes a cybersecurity incident response plan and is integrated with its overall enterprise risk management[132]. Customer Relationships - The Company emphasizes a relationship-oriented approach to business, aiming to develop strong customer relationships and enhance client satisfaction[35]. - The Company emphasizes long-term relationships with clients, resulting in repeat business from many of its largest strategic accounts[63]. - Two customers exceeded 10% of consolidated revenue, contributing 19.5% and 14.1% respectively, while the top five customers accounted for approximately 48.5% of total revenue[63]. International Operations - The Company generated approximately 7.8% of its revenue from international operations for the fiscal year ended December 28, 2024[57]. - The Company operates in multiple countries including Canada, Germany, Philippines, Puerto Rico, and Serbia, which exposes it to various international business risks[115]. - The company is exposed to foreign currency fluctuations related to operations in Canada, Germany, and Serbia, affecting the U.S. dollar value of reported earnings[108]. Financial Position and Capital Structure - The Company has no plans to issue dividends in the near future, with any future payments dependent on earnings and financial condition[150]. - The Board authorized a share repurchase program of up to $50 million on March 29, 2024, to optimize capital structure[151]. - The Company has net deferred tax liabilities of $4.4 million as of December 28, 2024[182]. - The company had $35.0 million in borrowings under its Revolving Credit Facility and $7.4 million outstanding under letters of credit, with an additional availability of $22.6 million for further borrowings[105].

Revenue Performance - RCM Technologies reported revenue of $76.9 million for the thirteen weeks ended December 28, 2024, an increase of 8.3% compared to $71.0 million for the prior quarter[3] - For the fifty-two weeks ended December 28, 2024, revenue was $278.4 million, reflecting a 5.8% increase from $263.2 million in the prior year[4] - Revenue for the thirteen weeks ended December 28, 2024, was $76,912 million, an increase of 8.1% compared to $71,028 million for the same period in 2023[19] - For the fifty-two weeks ended December 28, 2024, total revenue reached $278,380 million, up from $263,237 million in the previous year, representing a growth of 5.8%[19] Profitability - GAAP net income for the current quarter was $2.9 million, or $0.37 per diluted share, down from $5.3 million, or $0.65 per diluted share, in the comparable prior quarter[3] - The company experienced a 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 prior year[4] - Adjusted net income per diluted share (non-GAAP) for the current year was $2.03, slightly down from $2.04 in the prior year[4] - Adjusted EBITDA for the current quarter was $6.3 million, compared to $8.9 million for the prior quarter[3] - The company reported a net income of $2,867 million for the thirteen weeks ended December 28, 2024, compared to $5,255 million for the same period in 2023[23] Expenses and Costs - Selling, general and administrative expenses increased to $16.0 million in the current quarter from $13.4 million in the prior quarter[3] - Gross profit for the current quarter was $21.6 million, consistent with the prior quarter's gross profit of $21.6 million[3] - The company’s gross profit for the fifty-two weeks ended December 28, 2024, was $79,778 million, compared to $76,696 million in the previous year[19] - Gross profit margin for the consolidated segment improved to 28.0% in Q4 2024 from 30.5% in Q4 2023[19] Assets and Liabilities - Total current assets increased to $97,038 million as of December 28, 2024, from $90,502 million a year earlier[21] - Cash and cash equivalents decreased to $4,729 million in Q4 2024 from $6,284 million in Q4 2023[21] - The company’s total liabilities rose to $98,593 million as of December 28, 2024, compared to $94,694 million in the previous year[21] - Stockholders' equity increased to $33,484 million as of December 28, 2024, from $25,790 million a year earlier[21] Future Outlook - The company plans to leverage its strategic initiatives to enhance earnings power in 2025[5] - RCM Technologies will host a conference call on March 13, 2025, to discuss these results[6] Cash Flow - Net cash used in operating activities for the thirteen weeks ended December 28, 2024, was $1,637 million, a decrease from $15,066 million in the same period of 2023[23]

Core Viewpoint - RCM Technologies, Inc. reported financial results for the thirteen and fifty-two weeks ended December 28, 2024, showing revenue growth but a decline in net income compared to the previous periods [2][3][4]. Financial Performance - For the thirteen weeks ended December 28, 2024, revenue was $76.9 million, an increase of 8.3% from $71.0 million in the prior quarter [2]. - Gross profit for the current quarter was $21.6 million, consistent with the prior quarter [2]. - GAAP net income for the current quarter was $2.9 million, or $0.37 per diluted share, down from $5.3 million, or $0.65 per diluted share, in the comparable prior quarter [2]. - Adjusted EBITDA for the current quarter was $6.3 million, compared to $8.9 million in the prior quarter [2]. - For the fifty-two weeks ended December 28, 2024, revenue was $278.4 million, a 5.8% increase from $263.2 million in the prior year [3]. - Gross profit for the current year was $79.8 million, a 4.0% increase from $76.7 million in the prior year [3]. - GAAP net income for the current year was $13.3 million, or $1.68 per diluted share, down from $16.8 million, or $1.96 per diluted share, in the prior year [3]. - Adjusted EBITDA for the current year was $25.9 million, compared to $26.6 million in the prior year [3]. Strategic Insights - Executive Chairman Bradley Vizi noted that 2024 demonstrated substantial progress as many strategic initiatives gained traction [4]. - CFO Kevin Miller expressed confidence in the foundation laid for increased earnings power in 2025 [4]. Revenue Breakdown - For the thirteen weeks ended December 28, 2024, revenue by segment was $41.0 million in Specialty Health Care, $26.3 million in Engineering, and $9.6 million in Life Sciences and Data Solutions [18]. - For the fifty-two weeks ended December 28, 2024, revenue by segment was $142.7 million in Specialty Health Care, $96.5 million in Engineering, and $39.2 million in Life Sciences and Data Solutions [18]. Balance Sheet Highlights - As of December 28, 2024, total assets were $132.1 million, up from $120.5 million a year earlier [20]. - Current assets increased to $97.0 million from $90.5 million [20]. - Total liabilities were $98.6 million, compared to $94.7 million in the prior year [20]. Cash Flow Analysis - For the thirteen weeks ended December 28, 2024, net cash used in operating activities was $(1.6) million, compared to $(15.1) million in the prior quarter [23]. - For the fifty-two weeks ended December 28, 2024, net cash provided by operating activities was $6.2 million, down from $12.5 million in the prior year [24].

Core Insights - 92% of healthcare leaders prioritize AI and advanced automation to address industry challenges, focusing on patient access and claim management for automation investments [1][4] Industry Trends - Rising administrative costs, increasing claim denials, payer conflicts, and cybersecurity threats are driving healthcare leaders to invest strategically in software that enhances cash flow and adapts to payer policies [2] - The top six trends for healthcare leaders in 2025 emphasize the importance of AI and advanced automation for improving efficiency, accuracy, and security [2] Investment Priorities - Key areas for RCM investment include patient access, claim management, revenue integrity, patient financial care, denial prevention, and denial management [4] - Return on investment (ROI) is a critical factor in RCM purchasing decisions, with many providers considering alternative vendors due to low ROI from current solutions [4] Data Security - Data security concerns rank as the second most important factor in switching RCM software, following negative client support experiences [4] Software Platform Preferences - Over 70% of providers now prefer working with one to two software partners for all RCM needs, moving away from multiple siloed solutions [4] - A 2024 study indicates that 100% of leaders using end-to-end software platforms report a positive ROI, highlighting the industry's shift towards integrated solutions [4] Patient Access and Claim Management - Hospitals spend nearly $20 billion annually to overturn denied claims, with 60% of denials stemming from front-end patient access errors, prompting increased automation in financial clearance processes [4] - Claim denials have increased by 20%, and labor costs for claims inquiries have risen by 71% over five years, leading providers to prioritize automation in claim management [4] Company Overview - Waystar serves approximately 30,000 clients, processing over 6 billion healthcare payment transactions annually, which includes over $1.8 trillion in gross claims [5]

Company Overview - RCM Technologies, Inc. has launched a new program to resell the UKG Ready suite, expanding its Human Capital Management (HCM) service offerings [1] - The company has established itself as a premier provider of business and technology solutions across various sectors, including Energy Services, Aerospace & Defense, and Health Care Services [5][8] Industry Context - There are over 33 million small businesses in the U.S., employing more than 61.6 million workers, indicating a significant demand for scalable and user-friendly HR solutions [2] - Small businesses often lack access to high-quality HCM solutions compared to larger enterprises, creating an opportunity for RCM to fill this gap [3] Product Offering - RCM's HCM Solutions provide immediate access to industry-leading technology, enabling small business owners to manage workforce needs efficiently while ensuring compliance and promoting growth [2][6] - The partnership with UKG Ready allows RCM to offer a comprehensive platform for payroll, time tracking, talent management, and employee engagement [6] Strategic Commitment - RCM's new reseller partnership with UKG emphasizes customer service, deep product expertise, and tailored workforce strategies, reinforcing its commitment to delivering top-tier HCM solutions [4] - The company aims to help small business owners streamline HR operations and focus on business growth [3][7]