RCMT - Earnings call transcript Q1 2019

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Operator

Good morning and welcome to the RCM Technologies, Inc. earnings conference call.

Your host, Bradley, you may now begin.

Bradley Vizi

Good morning, everyone. This is Bradley Vizi, Executive Chairman of RCM Technologies. Technologies quarter RCM call. the to XXXX earnings first Welcome Chief Kevin I'm by our Financial joined today Miller, Officer. each units begin and questions. summarize for then will I our Kevin with will the the operating up opening it before legal disclaimer, of for business results Kevin?

Kevin Miller

morning, everyone. Good

forward-looking in and the future. assumptions and currently to is presentation and contained will this these forward-looking our beliefs, estimates subject these are changes. us, materially of the call information Many statements. Our based change matters information on The contain assumptions in statements estimates in rapid may beliefs, available and to

For more periodic our filed SEC as information are we uncertainties releases statements to and on on which please with factors the time. that subject, XX-Q and we reports the and they our press issue that as to risks, well from Forms forward-looking the time see XX-K, other X-K

Bradley Vizi

Kevin. Thanks,

expectations. to We are results XXXX pleased relative with fiscal our and quarter recent first

second More importantly, in to are I believe fiscal we we for continue discuss division separately. half XXXX. performance will each strong poised

our $XX Care Our first all major of quarter the business. of set million record the $XX.X XXXX, X.X% with by our growth growing of generated the contracts XXXX revenue, first quarter of group Specialty XXXX was of million school of of We in XXXX. first staffing driver million another The $XX.X in quarterly Health from school XX%. quarter over versus growth

XXXX. robust to continue throughout We be to expect growth

XX% Our over HIM practice also year. $X.X revenue, well performed growth in of the prior million approximately

to by XX% compared XXXX. million fiscal declined $XX.X of revenue approximately engineering Our as

due awards a to this some our call, certain particularly strong engineering anticipated quarter, contract last saw and we As our of discussed in part large timing in softness start XXXX. to earnings segment

increase to uptick a report a steady change no outlook in we our financial second half timing of year progresses potential through That call. have for performance material We XXXX. the we with expect the challenge the anticipate a project in quarter, as since our second be to last the to

million operating EPC Larger inherently leverage stages Specifically, currently and final are clients. major we longer with in enhanced are contracts for $XX duration, visibility providing to P&L. U.S. X utility of contention projects

recent optimistic pay made infrastructure dividends. will and long-term technology are We people, investments in

demonstrate Our million revenue first growth a over with growth. different business of to of group prior gross XX%. the strong $X.X XXXX, Technology quarter in profit Several continued growth the the year, contributed while units Information grew XX%

a strong We have see to On progress consolidated in to Technology to expect we XXXX our a continued expect Information group. compared basis, XXXX.

remarks. for and continue success. technology We This long-term talent questions. for business concludes will the to the our time, invest in we to position new open prepared At call this

Operator

from of Sutherland. Our will Bill first be question coming

William Sutherland

I I I small, margin wanted placement gross are feeling little to it's of about I you that know health year? And driver. one permanent care, know could. a the bit a you into just into piece rest dig the the -- if look forward you're it's but if is that how as --

Kevin Miller

we this about Kevin. Bill, Well, group excited Yes. have. we're the that is

to first revenues. is successful the quarter areas with we're bit half -- several focused that over but that good in have But expect RCM, have a years. some dozen very, very the on, have We of a not do recruiters particularly for a some We placement market we for we XX been soft, did have that little turn. perm

in did revenues as perm to XXXX QX you period. year same during context, of $XXX,XXX to about some about Just the time $XXX,XXX in give we compared last

get the up the continuing struggle to we're is near in a optimistic numbers certainly put that but that putting business term. unit some the in they we'll up So of past, that turnaround

William Sutherland

the look you you... clinicians other to and Are as business, growth school the just existing contracts? pairs on And forward, Great. is adding

Kevin Miller

City York been we've -- both well. rate New we've also Hawaii, increase and and It's It's all as kicking some involved, it's Bill. head in and adding bill had in count

So both. but Chicago. we've adding Chicago, much both been not people, we adding and been have Not New so York it's Hawaii. really people in

William Sutherland

in you gross and the IT. little margin dependent Okay, color provide -- both you're could at to engineering engineering the looking on awards the place this pipeline, directionally for kind XX%? on that's if outlook a I going is IT, do in in your the good good. but And -- be good it's in know next here think a is at -- mix you a of that

Kevin Miller

canceled -- IT, have I there project things Obviously, that quarter around can about think, yes. in of delayed if in are terms given sort certainly, always or is but any issues happen we Yes, but or the are a utilization in a of good number. Obviously, indication. bit, right number. little right far good I a as drag care where that's are is I a that pretty to the XX% concerned, now up And health think think numbers we'd as like

as pointed the have And progress properly the see we you I to year. swings with we biggest that up tend since come bit little a in workforce. large engineering, fixed-cost out think through as we they the can little that's one a

So but those when margin function jump of we're the for quarter the revenues -- anything more Obviously, with so first revenues really not you'll bit that's in as jump. else. gross the engineering, than quite tend a happy to see a

out, hopefully, so we go so margin. the revenues the and -- increase gross as as So will will

William Sutherland

Kevin, on you last, touch could allocation. And capital the touch on cash then and if flow

Kevin Miller

Sure.

receivables. health had QX revenue certainly we but disappointment. As we decent disappointed Obviously, is where concerned, with very was far were up cash in a as the particularly flow care group, we on ended

a spike in some large which big cash We why have a unfortunately clear such also driving have that the the of typically just cash -- from contracts, to what unfortunately, school quarter, end balance. to -- our quarter. some from We for up running explanation issues of debt. to that well, administrative City some time, on a New but York kind the time don't bureaucracy, got more to had tend to of of the of we receipts, We QX, million. pay QX late weren't at in poor lack we is balance was It which, flare didn't use checks in in lots receivables of But by flow take particular, time. And to cash over was schools. $X mostly unfortunately, we the detailed down some related in able time to

much higher We in we'll was turn the in this QX, then discuss, meeting. cash see that a lodging debt So we quarter see much we of as compared right as better to And that big better should paying we'd QX, now. to and driver is poor is flow quarter receivables. in a quarter-end to headlines little of expect then the do right down every a now, board even where in far QX. capital it's QX something see just like But around pretty we're concerned, an on than bit most so because allocation focused

Operator

next Drawbaugh. Our for coming question be will Dan

Daniel Drawbaugh

may So seeing and in just performance could you unit? there that to you're how update business start, be us contributing Kinetics, Thermal the that on

Kevin Miller

going going typically the for on. set one $X.X -- quarter. time have at and three, Yes. business, Kinetics is projects very and because three Thermal they maybe four first this revenues a lumpy discussed historically about we that two, nice that on one to the business major past, in It small million ones Their quarter. contributed in

poised year. a a potentially fourth nice but to first But half/fourth business we contribute -- quarter, believe lumpy. had that the for They're quarter. tends really strong had well. expected performed we a quarter, be that they're this nice as much we it's that So for and in bit not second they'll The very nearly second quarter a

might in bit So see the term. of a we a trail in their little near contribution

Daniel Drawbaugh

from the little pipeline, What more -- you bit X market projects for or of color, us what of of a like? in large provide Okay. you're that Understood. And seeing broadly then look does is pipeline the aside in you? generally, sort can these kind strength engineering that some

Kevin Miller

Our Energy Services strong. very pipeline in is

a interesting very are several have which lot We of opportunities, big. of

smaller pretty ones that have So some smaller that even margin. are the ones of of the and -- high potentially we -- in pipeline some

as and be we're Services we'll is this to strong into some really able our opportunities. Canadian of pipeline processing attractive nuclear industrial or is that high-profile with our not really and/or in and But So backlog. a both -- The turn strong pipeline of lot in pipeline optimistic big operations. Energy aerospace

Daniel Drawbaugh

pretty it. And that the Got seasonality Okay. job over that the any year you a expect thoughts last any guys third should course we this good in from spending, the usual in couple from things then years quarter? keeping done on there's have savings over kind an you or OpEx standpoint, have aside of incremental the whether Do check.

Kevin Miller

unnecessary very Well, eye close we're and always on a spending. pruning our keeping SG&A

every pencils We we on several SG&A. here of most high-profile look resources in bit that's see So to -- into terms around sharpening to is in a quarter we'll brought and in something of can -- in really our activities. a sales the sales sales-generating that alone. engineering our that where looking particularly trim Typically, first reinvest several, religion quarter

that. So a of lot reinvesting we are

as hopefully, look into it to uptick of we operating incentive-based realizing QX plans. we're see the people in their revenues will just pretty income, probably gross and But better bigger comp at QX, particularly levels, will the similar on the in will what zones you'll In then see profit little SG&A quarter. revenue get SG&A terms and forward, going like first in to look where a these probably as was better because bonus it start

particularly that uptick set is So SG&A a I nice -- well. a we we'll see this level, revenues, think. -- engineering, as revenue in in this SG&A we'll current in probably at probably see pretty little well, But assuming uptick the our is

Daniel Drawbaugh

from little and year-over-year, XQ driving more IT we going so you the in color then that And the on even of up you for Great. could that's a the accelerating little the more what's Okay. then year? from that a provide growth? XQ. into I see Can remainder mean bit growth and dig XX% where perhaps

Kevin Miller

of we we're some is from in sciences. Long place to had operations is coming Well, unit the new and the I growth it's most kind also last it seeing group see starting our we results better solutions driving life we're the in performing well. staffing of and think over Island months, is management transformed where also of Where from. decline. and really X our what's That's our its the And in during that

in quarter, continue performed first have that we go forward. groups we IT individual the well as of and see we the in expect most to So

Operator

more queue questions. [Operator for Instructions] We have no in callers

Bradley Vizi

our for quarter to look attending call. in August. We first conference you Thank forward RCM's update

Operator

for ladies you, gentlemen, and Thank joining call. today's

all disconnect great a this at day. have may time and You

RCM (RCMT) 10 May 192019 Q1 Earnings call transcript