RCM Technologies(RCMT) - 2023 Q4 - Annual Results

RCM Technologies, Inc. Announces Fourth Quarter and Fiscal Year 2023 Results Fourth Quarter 2023 Performance RCM Technologies reported increased Q4 2023 revenue, net income, and adjusted EBITDA, reflecting improved profitability Q4 2023 Financial Highlights (vs. Q4 2022) | Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $71.0M | $70.2M | +1.1% | | Gross Profit | $21.6M | $20.5M | +5.7% | | GAAP Operating Income | $7.9M | $6.8M | +16.2% | | GAAP Net Income | $5.3M | $4.8M | +10.4% | | GAAP Diluted EPS | $0.65 | $0.48 | +35.4% | | Adjusted EBITDA (Non-GAAP) | $8.9M | $7.5M | +18.7% | | Adjusted Diluted EPS (Non-GAAP) | $0.71 | $0.52 | +36.5% | Fiscal Year 2023 Performance Fiscal Year 2023 revenue and GAAP net income declined, though adjusted diluted EPS slightly increased Fiscal Year 2023 Financial Highlights (vs. FY 2022) | Metric | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $263.2M | $284.7M | -7.5% | | Gross Profit | $76.7M | $82.9M | -7.5% | | GAAP Operating Income | $23.7M | $28.8M | -17.7% | | GAAP Net Income | $16.8M | $20.9M | -19.4% | | GAAP Diluted EPS | $1.96 | $2.00 | -2.0% | | Adjusted EBITDA (Non-GAAP) | $26.6M | $31.1M | -14.5% | | Adjusted Diluted EPS (Non-GAAP) | $2.11 | $2.08 | +1.4% | Management Commentary Management emphasized strong Q4 2023 performance and confidence in achieving fiscal 2024 cash flow from operations goals - Executive Chairman Bradley Vizi highlighted a strong Q4 with an 18.5% growth in adjusted EBITDA, driven by all business segments[6] - CFO Kevin Miller stated confidence in achieving the goal of $20 million in cash flow from operations for fiscal 2024[6] Consolidated Financial Statements Condensed Consolidated Statements of Operations The statements detail full-year 2023 revenue and net income declines, while Q4 showed a slight revenue increase and improved net income Full Year Income Statement Highlights (in thousands) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Revenue | $263,237 | $284,680 | | Gross Profit | $76,696 | $82,927 | | Operating Income | $23,692 | $28,798 | | Net Income | $16,831 | $20,889 | | Diluted EPS | $1.96 | $2.00 | Fourth Quarter Income Statement Highlights (in thousands) | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Revenue | $71,028 | $70,221 | | Gross Profit | $21,631 | $20,466 | | Operating Income | $7,906 | $6,809 | | Net Income | $5,255 | $4,837 | | Diluted EPS | $0.65 | $0.48 | Segment Performance Full-year 2023 segment performance shows Life Sciences and IT as the sole growth driver, offsetting declines in Specialty Health Care Full Year 2023 Revenue by Segment (in thousands) | Segment | FY 2023 Revenue | FY 2022 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Specialty Health Care | $136,241 | $159,448 | -14.6% | | Engineering | $84,675 | $85,937 | -1.5% | | Life Sciences and IT | $42,321 | $39,295 | +7.7% | | Consolidated | $263,237 | $284,680 | -7.5% | Q4 2023 Revenue by Segment (in thousands) | Segment | Q4 2023 Revenue | Q4 2022 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Specialty Health Care | $36,688 | $35,810 | +2.5% | | Engineering | $22,719 | $24,211 | -6.2% | | Life Sciences and IT | $11,621 | $10,200 | +13.9% | | Consolidated | $71,028 | $70,221 | +1.1% | Condensed Consolidated Balance Sheets The balance sheet as of December 30, 2023, reflects increased assets and liabilities, with stockholders' equity declining due to stock repurchases Selected Balance Sheet Data (in thousands) | Account | Dec 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,284 | $339 | | Accounts receivable, net | $70,690 | $50,762 | | Total assets | $120,484 | $87,964 | | Borrowings under line of credit | $30,804 | $8,783 | | Total liabilities | $94,694 | $56,002 | | Stockholders' equity | $25,790 | $31,962 | - The value of treasury stock increased significantly from $43.8 million to $69.6 million, reflecting substantial common stock repurchases[22] Condensed Consolidated Statements of Cash Flows Fiscal year 2023 operating cash flow decreased due to higher accounts receivable, yet overall cash and cash equivalents increased Full Year Cash Flow Summary (in thousands) | Category | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,482 | $28,283 | | Net cash used in investing activities | ($2,536) | ($4,820) | | Net cash used in financing activities | ($3,852) | ($23,127) | | Increase in cash and cash equivalents | $5,945 | $104 | - The company executed significant stock buybacks, with common stock repurchases amounting to $25.8 million in fiscal year 2023, up from $17.6 million in 2022[24] Non-GAAP Financial Measures Reconciliation of GAAP to Non-GAAP Results Non-GAAP metrics, adjusted for specific items, reveal varied trends in Adjusted EBITDA and Diluted EPS for FY23 and Q4 2023 Adjusted EBITDA Reconciliation (Non-GAAP, in thousands) | Period | GAAP Net Income | Adjusted EBITDA | | :--- | :--- | :--- | | Q4 2023 | $5,255 | $8,869 | | Q4 2022 | $4,837 | $7,485 | | FY 2023 | $16,831 | $26,603 | | FY 2022 | $20,889 | $31,114 | Adjusted Diluted EPS Reconciliation (Non-GAAP) | Period | GAAP Diluted EPS | Adjusted Diluted EPS | | :--- | :--- | :--- | | Q4 2023 | $0.65 | $0.71 | | Q4 2022 | $0.48 | $0.52 | | FY 2023 | $1.96 | $2.11 | | FY 2022 | $2.00 | $2.08 | - Key adjustments to reconcile GAAP to non-GAAP figures include equity compensation, gain/loss on foreign currency transactions, and gain on sale of assets[16][18]