RCM Technologies(US:RCMT)2023-03-16 20:39Revenue Breakdown - For the fiscal year ended December 31, 2022, RCM Technologies, Inc. generated approximately 56.0% of its total revenue from Specialty Health Care services, 30.2% from Engineering services, and 13.8% from Life Sciences and Information Technology services[15]. - Revenue for the Specialty Health Care segment increased to $159.4 million in FY 2022 from $98.5 million in FY 2021, representing a growth of 61.8%[164]. - The Engineering segment's revenue rose to $85.9 million in FY 2022, up from $66.2 million in FY 2021, marking a 29.8% increase[164]. - The Life Sciences and Information Technology segment generated $39.3 million in revenue for FY 2022, slightly up from $39.2 million in FY 2021, indicating a marginal growth of 0.3%[164]. - Revenue increased by 39.6%, or $80.8 million, for the fiscal year ended December 31, 2022, compared to the prior year period[188]. Personnel and Operations - As of December 31, 2022, RCM assigned approximately 2,540 personnel to its Specialty Health Care services and approximately 490 personnel to its Engineering services[39][44]. - The Company’s Life Sciences and Information Technology segment employs approximately 230 personnel as of December 31, 2022, to support various applications[49]. - As of December 31, 2022, the company employed approximately 280 nonbillable employees and had a total billable workforce of about 3,260, including 2,540 in Specialty Health Care services, 490 in Engineering and Technical, and 230 in Life Sciences and Information Technology[81][85]. Growth Strategy - The Company anticipates continued growth in the demand for health care professionals due to an aging population and improved medical technology, with a focus on telemedicine and behavioral health services[19]. - RCM's growth strategy includes pursuing selective strategic acquisitions to broaden service scope and enhance technical competencies, focusing on companies with substantial growth prospects and experienced management[33]. - The Company aims to increase margins by transitioning to higher value-oriented services and expanding client relationships through strategic alliances[27]. - The Company is adapting its operating strategies to remain a recognized leader in specialized professional staffing and consulting services across North America[24]. Financial Performance - Net income for the fiscal year ended December 31, 2022, was $20.9 million, or 7.3% of revenue, compared to $11.0 million, or 5.4%, in the prior year[187]. - Gross profit for the fiscal year ended December 31, 2022, was $82.9 million, representing 29.1% of revenue, up from 26.1% in the prior year[187]. - Selling, general and administrative expenses were $53.4 million for the fiscal year ended December 31, 2022, accounting for 18.8% of revenue, down from 20.6%[190]. - Adjusted EBITDA for the fiscal year ended December 31, 2022, was $29.5 million, compared to $11.1 million for the prior year[207]. - Cash provided by operating activities was $28.3 million for the fiscal year ended December 31, 2022, compared to $0.9 million in the prior year[209]. Market Conditions and Risks - The company faces significant competition in the staffing services market, with increasing pricing pressures and limited barriers to entry, which could impact its market share and profitability[98]. - Future growth prospects may be impacted by economic trends and changes in government regulations affecting employment services[183]. - The Company believes the deregulation of the utilities industry and aging nuclear power plants present opportunities for increased professional services and project management in the energy sector[7]. - The Company is exposed to risks associated with foreign currency fluctuations due to its operations in Canada and Serbia, which can affect the reported earnings and asset values[109]. Client Relationships - The Company emphasizes long-term relationships with clients, which has resulted in repeat business and a strong client retention rate[61]. - The Company maintains a disaster recovery plan to ensure business continuity and data protection against various risks[66]. - The Company operates 26 branch offices across the United States, Canada, Puerto Rico, and Serbia, focusing on markets with strong growth prospects[51]. Legal and Compliance - The Company has adopted a Code of Conduct and a Code of Ethics applicable to its directors and officers, ensuring compliance with SEC rules[89]. - The Company is subject to various legal proceedings that may arise in the ordinary course of business, which could impact financial performance[131]. - The Company operates in a complex regulatory environment concerning data privacy, which could increase operating costs and risks of non-compliance[125]. Capital Structure and Financing - The company had $8.8 million in borrowings under its Revolving Credit Facility as of December 31, 2022, with an additional $34.3 million available for borrowing[106]. - The Company has a stock repurchase program authorized for up to $25.0 million, designed to optimize its capital structure[141]. - The Company has accrued $2.9 million for asserted claims as of December 31, 2022[133].