Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 9, 2023

RCM Technologies, Inc.

(Exact Name of Registrant as Specified in Charter)

Nevada

(State or Other

Jurisdiction of

Incorporation)

1-10245

(Commission File

Number)

95-1480559

(I.R.S. Employer

Identification No.)

2500 McClellan Avenue, Suite 350
Pennsauken, NJ		08109-4613
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (856) 356-4500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.05 per share		RCMT		The NASDAQ Stock Market LLC

Item 2.02. Results of Operations and Financial Condition.

On August 9, 2023, the Registrant issued a press release regarding its financial results for the thirteen and twenty-six weeks ended July 1, 2023. A copy of the press release is furnished as Exhibit 99 to this report.

The information set forth under this “Item 2.02. Results of Operations and Financial Condition” (including the exhibit) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Registrant pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

None.

(b) Pro Forma Financial Information.

None.

(d) Exhibits.

Exhibit Number
99	Press Release by the Registrant, dated August 9, 2023, furnished in accordance with Item 2.02 of this Current Report on Form 8-K.
104	Cover Page Interactive Data File (formatted as Inline XBRL).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RCM TECHNOLOGIES, INC.

By:	/s/ Kevin D. Miller
	Kevin D. Miller
	Chief Financial Officer, Treasurer and Secretary

Dated: August 9, 2023

Exhibit 99

RCM Technologies, Inc.	Tel: 856.356.4500	Corporate Contacts:
2500 McClellan Avenue	Fax: 856.356.4600	Bradley S. Vizi
Pennsauken, NJ 08109	info@rcmt.com	Executive Chairman
	www.rcmt.com	Kevin D. Miller
		Chief Financial Officer

P R E S S R E L E A S E

RCM TECHNOLOGIES, INC. ANNOUNCES

SECOND-QUARTER RESULTS

Pennsauken, NJ – August 9, 2023 -- RCM Technologies, Inc. (NasdaqGM: RCMT), a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced engineering, specialty health care, and information technology services, today announced financial results for the thirteen and twenty-six weeks ended July 1, 2023.

RCM Technologies reported revenue of $67.0 million for the thirteen weeks ended July 1, 2023 (the current period), a decrease of 9.8% compared to $74.3 million for the thirteen weeks ended July 2, 2022 (the comparable prior-year period). Gross profit was $18.8 million for the current period, a 13.5% decrease compared to $21.7 million for the comparable prior-year period. The Company experienced GAAP operating income of $5.7 million for the current period compared to $8.2 million for the comparable prior-year period. The Company experienced GAAP net income of $4.0 million, or $0.47 per diluted share, for the current period compared to $6.0 million, or $0.57 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $6.0 million for the current period compared to $8.4 million for the comparable prior-year period.

RCM Technologies reported revenue of $134.2 million for the twenty-six weeks ended July 1, 2023 (the current period), a decrease of 14.2% compared to $156.3 million for the twenty-six weeks ended July 2, 2022 (the comparable prior-year period). Gross profit was $37.8 million for the current period, a 16.2% decrease compared to $45.1 million for the comparable prior-year period. The Company experienced GAAP operating income of $11.5 million for the current period compared to $17.2 million for the comparable prior-year period. The Company experienced GAAP net income of $7.8 million, or $0.87 per diluted share, for the current period compared to $12.5 million, or $1.18 per diluted share, for the comparable prior-year period. The Company experienced adjusted EBITDA (non-GAAP) of $11.7 million for the current period compared to $17.7 million for the comparable prior-year period.

Bradley Vizi, Executive Chairman of RCM Technologies, commented, “Despite a slow start to the year in Engineering, we made the decision to maintain stride in building what we believe to be a highly differentiated platform in the professional service marketplace. Our decision was supported by our view of the secular growth markets and our strong portfolio of capabilities, and we now see the business continuing to strengthen as we move through the year.”

Kevin Miller, Chief Financial Officer of RCM Technologies, commented, “We believe our strong cash generating business model and clean balance sheet afford us the ability to invest in value accretive growth throughout the economic cycle. Considering normal third quarter seasonality, we believe we are set up for a healthy double-digit earnings increase in the fourth quarter, consistent with our long-term trajectory. Also, we expect to continue to see strong cash flow from operations during the second half of fiscal 2023.”

Conference Call

On Thursday, August 10, 2023, 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 (800) 285-6670.

About RCM

RCM Technologies, Inc. is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced information technology and engineering services. RCM is an innovative leader in delivering these solutions to commercial and government sectors. RCM is also a provider of specialty healthcare services to major health care institutions and educational facilities. RCM's offices are located in major metropolitan centers throughout North America and Serbia. Additional information can be found at 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, 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 Per Share Amounts)

	Thirteen Weeks Ended
	July 1, 2023	July 2, 2022
Revenue	$67,035	$74,346
Cost of services	48,275	52,663
Gross profit	18,760	21,683
Selling, general and administrative	12,723	13,264
Depreciation and amortization of property and equipment	242	225
Amortization of acquired intangible assets	46	-
Operating income	5,749	8,194
Other expense (income), net	418	(28	)
Income before income taxes	5,331	8,222
Income tax expense	1,348	2,208
Net income	$3,983	$6,014

Diluted net earnings per share data	$0.47	$0.57
Diluted weighted average shares outstanding	8,558,396	10,550,896

	Twenty-Six Weeks Ended
	July 1, 2023		July 2, 2022
Revenue	$134,159		$156,307
Cost of services	96,375		111,204
Gross profit	37,784		45,103
Selling, general and administrative	26,119		27,411
Depreciation and amortization of property and equipment	513		463
Amortization of acquired intangible assets	91		-
Gain on sale of assets	(395	)	-
Operating income	11,456		17,229
Other expense, net	825		24
Income before income taxes	10,631		17,205
Income tax expense	2,811		4,671
Net income	$7,820		$12,534

Diluted net earnings per share data	$0.87		$1.18
Diluted weighted average shares outstanding	8,976,714		10,583,519

RCM Technologies, Inc.

Supplemental Operating Results on a Non-GAAP Basis

(Unaudited)

(In Thousands)

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” and “Adjusted EBITDA”) 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 and Adjusted EBITDA should not be considered alternatives to net income as an indicator of performance. In addition, Adjusted operating income, EBITDA and Adjusted EBITDA 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 net income and the corresponding adjustments used to calculate Adjusted operating income, EBITDA and Adjusted EBITDA for the thirteen and twenty-six weeks ended July 1, 2023 and July 2, 2022.

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
GAAP net income	$3,983		$6,014		$7,820		$12,534
Income tax expense	1,348		2,208		2,811		4,671
Interest expense, net	425		69		785		166
Depreciation of property and equipment	242		225		513		463
Amortization of acquired intangible assets	46		-		91		-
EBITDA (non-GAAP)	$6,044		$8,516		$12,020		$17,834

Adjustments
Gain on sale of assets	-		-		(395	)	-
(Gain) loss on foreign currency transactions	(7	)	(97	)	40		(142	)
Adjusted EBITDA (non-GAAP)	$6,037		$8,419		$11,665		$17,692

RCM Technologies, Inc.

Summary of Selected Income Statement Data

(Unaudited)

(In Thousands)

	Thirteen Weeks Ended July 1, 2023
	Specialty Health Care		Engineering		Life Sciences and IT		Consolidated

Revenue	$35,528		$21,014		$10,493		$67,035
Cost of services	25,727		16,192		6,356		48,275
Gross profit	$9,801		$4,822		$4,137		$18,760
Gross profit margin	27.6	%	22.9	%	39.4	%	28.0	%

	Thirteen Weeks Ended July 2, 2022
	Specialty Health Care		Engineering		Life Sciences and IT		Consolidated

Revenue	$43,457		$20,906		$9,983		$74,346
Cost of services	30,575		15,395		6,693		52,663
Gross profit	$12,882		$5,511		$3,290		$21,683
Gross profit margin	29.6	%	26.4	%	33.0	%	29.2	%

	Twenty-Six Weeks Ended July 1, 2023
	Specialty Health Care		Engineering		Life Sciences and IT		Consolidated

Revenue	$74,658		$39,504		$19,997		$134,159
Cost of services	53,185		30,365		12,555		96,375
Gross profit	$21,473		$8,869		$7,442		$37,784
Gross profit margin	28.8	%	22.5	%	37.2	%	28.2	%

	Twenty-Six Weeks Ended July 2, 2022
	Specialty Health Care		Engineering		Life Sciences and IT		Consolidated

Revenue	$95,641		$40,804		$19,862		$156,307
Cost of services	67,758		30,059		13,387		111,204
Gross profit	$27,883		$10,745		$6,475		$45,103
Gross profit margin	29.2	%	26.3	%	32.6	%	28.9	%

RCM Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands, Except Share Amounts)

			July 1,	December 31,
			2023	2022
			(Unaudited)
Current assets:
	Cash and cash equivalents		$1,273	$339
	Accounts receivable, net		61,614	50,762
	Transit accounts receivable		9,875	3,280
	Prepaid expenses and other current assets		4,324	4,636
		Total current assets	77,086	59,017

Property and equipment, net			2,158	2,098

Other assets:
	Deposits		169	173
	Goodwill		22,147	22,147
	Operating right of use asset		3,203	3,665
	Intangible assets, net		774	864
		Total other assets	26,293	26,849

		Total assets	$105,537	$87,964

Current liabilities:
	Accounts payable and accrued expenses			$12,947		$14,147
	Transit accounts payable			37,190		9,767
	Accrued payroll and related costs			11,836		13,023
	Finance lease payable			464		462
	Income taxes payable			233		85
	Operating right of use liability			1,091		1,349
	Contingent consideration from acquisitions			300		472
	Deferred revenue			504		1,119
			Total current liabilities	64,565		40,424

Deferred income taxes, net, foreign				169		166
Deferred income taxes, net, domestic				1,599		1,495
Finance lease payable				-		232
Contingent consideration from acquisitions, net of current position				1,671		1,970
Operating right of use liability, net of current position				2,508		2,932
Borrowings under line of credit				14,851		8,783
		Total liabilities		85,363		56,002


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;
			17,516,469 shares issued and 7,934,088 shares outstanding at July 1, 2023 and 17,287,967 shares issued and 9,285,318 shares outstanding at December 31, 2022	873		863
	Additional paid-in capital			115,314		113,878
	Accumulated other comprehensive loss			(2,857	)	(2,863	)
	Accumulated deficit			(28,276	)	(36,096	)
	Treasury stock, 9,582,381 shares at July 1, 2023 and
			8,002,649 shares at December 31, 2022, at cost	(64,880	)	(43,820	)
			Total stockholders’ equity	20,174		31,962

			Total liabilities and stockholders’ equity	$105,537		$87,964

RCM Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)

		Thirteen Weeks Ended
		July 1, 2023		July 2, 2022
Net income		$3,983		$6,014
Adjustments to reconcile net income to cash used in operating activities		1,043		449
Changes in operating assets and liabilities:
	Accounts receivable	(2,804	)	13,779
	Prepaid expenses and other current assets	(648	)	343
	Net of transit accounts receivable and payable	19,356		(731	)
	Accounts payable and accrued expenses	654		389
	Accrued payroll and related costs	(3,598	)	(2,392	)
	Right of use liabilities	(335	)	(382	)
	Income taxes payable	6		1,111
	Deferred revenue	(305	)	(315	)
	Deposits	(9	)	9
Total adjustments		13,360		12,260
Net cash provided by operating activities		$17,343		$18,274

Net cash used in investing activities		(227	)	(223	)
Net cash used in financing activities		(18,160	)	(15,563	)
Effect of exchange rate changes on cash and cash equivalents		(37	)	(235	)
Increase in cash and cash equivalents		($1,081	)	$2,253

Common stock repurchase		($12,876	)	($2,781	)

		Twenty-Six Weeks Ended
		July 1, 2023		July 2, 2022
Net income		$7,820		$12,534
Adjustments to reconcile net income to cash used in operating activities		1,746		1,186
Changes in operating assets and liabilities:
	Accounts receivable	(10,839	)	3,565
	Prepaid expenses and other current assets	312		434
	Net of transit accounts receivable and payable	20,828		(210	)
	Accounts payable and accrued expenses	(1,013	)	(585	)
	Accrued payroll and related costs	(1,194	)	3,048
	Right of use liabilities	(683	)	(926	)
	Income taxes payable	147		2,935
	Deferred revenue	(615	)	(1,237	)
	Deposits	2		11
Total adjustments		8,691		8,221
Net cash provided by operating activities		$16,511		$20,755

Net cash used in investing activities		(559	)	(453	)
Net cash used in financing activities		(15,215	)	(17,175	)
Effect of exchange rate changes on cash and cash equivalents		197		(250	)
Increase in cash and cash equivalents		$934		$2,877

Common stock repurchase		($21,060	)	($2,781	)

Document And Entity Information	Aug. 09, 2023
Document Information [Line Items]
Entity, Registrant Name	RCM Technologies, Inc.
Document, Type	8-K
Document, Period End Date	Aug. 09, 2023
Entity, Incorporation, State or Country Code	NV
Entity, File Number	1-10245
Entity, Tax Identification Number	95-1480559
Entity, Address, Address Line One	2500 McClellan Avenue, Suite 350
Entity, Address, City or Town	Pennsauken
Entity, Address, State or Province	NJ
Entity, Address, Postal Zip Code	08109-4613
City Area Code	856
Local Phone Number	356-4500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	RCMT
Security Exchange Name	NASDAQ
Amendment Flag	false
Entity, Central Index Key	0000700841

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