RCMT - Earnings call 3 2023 | RCM Technologies, Inc.

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Kevin Miller

Good morning, and thank you for joining us. This is Kevin Miller, Chief Financial Officer of RCM Technologies. I'm joined today by Brad Vizi, RCM's Executive Chairman.

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

subject, overview periodic more statements and factors and are forward-looking on X-K to see the they For with our uncertainties that and will performance Executive our we information call over the the XX-K, on reports the press as issue Chairman, well turn provide that Forms we operating risks file and from Brad now which Vizi, please XX-Q of time quarter. as releases to during to the an time. SEC RCM's other I to

Bradley Vizi

Thanks, accelerate our prior as Good update, to through everyone. move continues year. the cadence Kevin. Consistent we morning, the with business

EBITDA growth Also the the and is for note, fourth beyond year-over-year. XXXX will outlook such, strongest, quarter exhibit and bright. our of As to be we expect

to we where key to accounts believe which Our land is high-value long-term high-value into continue to differentiator taken capabilities to our our hold. ability expand. into strategic as increased and a marketplace, We serving value of has capabilities partnerships for parlay collection the deliver unique

Internally, increased point within between of to we of unique increasingly each depth while end our markets penetration to fosters innovation the on structure strengthening our that continue collaboration and groups. build

division. to to made has further I with discuss that for ability years progress come. of with fuel to to excited into Healthcare spoke, will continue secular each detail, will Our been markets end in execute we our starting growth success am growth increasing strategy this our our -- future across Since more divisions last

to add presence school Notably, upon start existing in end ongoing underpinned for base. within of we We to business care Behavioral we accounts qualified a while at infrastructure. this The school to continues to commitment continue our highly health facilities our strong continue our nationwide. our goodwill year our institutions care drive are the supplying to is our rate, success attribute build client nation's market, believe growing in much-needed to team. and new to health health we other education early care upgrade professionals we social health this an innings to increasing by and the off

demand our opportunity with health comes of other nation's business the RCM with to critical clients RCM status another services Healthcare's solidifying reputation increased is a needs. a just coupled service solutions, core tailored staffing our gold -- domain, the status market for further health the to behavioral treating standard our our for care segment leader the vendor, selection with Also, partner, not model. the which as as process our bolstered education rigorous and the this have in in youth. cementing

and new move solutions the innovation As staffing care the committed forward, and industry. health anticipate highest meet that further standard We markets we we service. to cutting-edge of expansion the remain into evolving of development the growth, sustainable of needs

The ability core dedication of impacting to of health at good for the and a critical years services and serving need to values. health value Our of while exceeding build stakeholders, care education resides continue society ahead. shareholders communities our driving to and expectations care the positions us strengthening improving our positively our in the our quality in company's businesses, the

across EBITDA services, XX% challenging macroeconomic budget continues and a to investing in up The contribution decision landscape in group's reductions Life the portfolio. Information the including star several Our segments tech our to XX% year-over-year. Though information Group overall XXXX, paid in nearly Sciences sectors in Technology emerge as secular from was to high market has is growth shining demonstrating financial technology -- off. continue

and this the implementation. winning compliance, life our sciences expanded regulatory to down last As double quarter, design practice in have in we formula, ERP continue just we

will to value further which We providing support their management models. our business clients through are across our improved delivery building out allow entire while current our us practice, change landscape organizational

entering the see of positive XXXX and for to continue last We have leg trends outlook a positive XXXX.

Energy model, protocol. by world-class milestones solid IEC for satisfaction application of projects delivery strong successfully highlights the of leverage in include as site and resulting acceptance highlighted utilizing Engineering, e-house demonstrates completing margins. time on in increasing continued Services' In client part several execution Technical tests high-voltage the gross an XXXXX

were utility long-term large to with as international client substation critical In offshore an addition, a approached potential several a part deliverables time York. New of for were vital in infrastructure operating with a executed partnership. high-voltage GIS major OEM we Also, pursue on a project

project in our Europe, partner energy in the Northeast technical as grid. Germany strong to a transfer support the a United This that clean projects supply significant a recognition newly established office In in will turnkey power transition to the electric carbon-free represents milestone States. received

and its of demonstrating We award client the of in believe projects XXXX award project areas States RCM are late will Energy in for North We increasing as addition the enable us further new beyond, and increased America. will and the leadership the expand prudently the United recent team Services stages such Services EPC of in evaluate Europe EPC Energy the To second execution to industry veteran to America. and a major regional accelerate further South in negotiation our for high-profile EPC demand confidence. projects capabilities serve

technologies detailed sustainable execute for evaporation engineering in employed markets. Kinetics capture fuel distillation, RCM aviation dehydration and to carbon continues the Thermal and contracts

RCM using advanced responsible zero integration currently supplier. RCM chemical utilized an standardizing It obvious X technologies. crystallization techniques extensive design is Thermal energy engineering projects to process On projects. tie-in awarding carbon driver these for the office successfully integration is for why to RCM main The Kinetics chemical expertise design. executing the The orders side, customers customer, concurrent environmentally equipment of energy processes Thermal primarily related manufacturing the evaporation the and their are and is as a kinetics as equipment Kinetics in to on Thermal the

expected chemical and process support requesting Thermal product beginning strengthened greatly feasibility universities local facility lab has has is purchase weeks, testing to Kinetics engineering from gain of orders clients coming both receiving Thermal and internships. The The RCM a process office offered profile reduction testing to through opened recently to support traction. We staffing of are ties testing. Kinetics. record project process the track benefit client and of the customer RCM risk The provides additional through for testing It orders. X the

ramp customer expect utilization up existing XXXX and customers testing to to We lab for new in projects. related

now from design piloting Kinetics product pilot crystallization technology, than receives to robust In produce inquiries. working trials conduct crystallization the our engineers any addition customers. number RCM ability large other to for crystallization a our are More Thermal the plant. of samples of to XX-gallon on lab, the projects benefit a

Thermal emergence of team Kinetics plants equipment recently responsible today ABLC processes and The sales in a for team this the May require Advanced meetings were years the States. from presented Thermal The pilot cultivated testing and remains Aluminum supplied to design XX attended the successfully Show. customers leader. current service of our our Conference relationships over for developing RCM its environmental technologies. a companies process aluminum as has USA at that sustainable the has production Many benefits many Kinetics on past also continuing interested schedule Leadership with United Bio chemical focused member would years. The in ready in been Francisco. from emerging ABLC XXXX. have building RCM The San has of use new team client in market

our close As third nearing weekly and to and clients, new for we increasing our the still historical headcount we rate recovery before have aerospace more expect resulting potential end X new begun XX the clients our for team, to midyear with the year, XXXX. of materialize totaling believe We the run growth has the X in quarter in numbers.

including of in XX increase with in of the third a with the land expansion hires the new for customers. sea includes vehicle second XXXX. new total new vertical and expertise continue This also and positions the XX to us organization firmly existing provides programs and quarter breadth much of vessels, and depth We in our core of XXXX. Expanding to clients continued new with desired quarter arenas quarter-over-quarter us number compared clients and defense,

management stay of team to existing utilized clients relationships, our we long-term our the As relevant. continues reputation have to expertise within some change, and

one for design well see our a center into will we on awards of believe We most significant XXXX. traction

market United States. the expertise model-based and our conversion prowess, and within clients digital multiple continue design our aftermarket throughout methodology across We which to now expands

We contracts finalized in with executed have multiple OEMs XXXX. large and

We also aftermarket contractors await engineering a defense the a large this all-encompassing and all client RFP from support largest one of disciplines. to vehicle across providing

expand to reach clients prioritize of engagements continue our and We XXXX. these these in with will types

feedback. which support We into analysis, beyond SXXXXL and factor, SXXXXF to our material in-service SXXXXP maintenance the market broadens S SXXXXD data logistics management, publications continue SXXXXM reach the

in support areas these to we our happy first technical have are which report publications. We client, will launch we beyond that expanded

our the first in We for arena we in for members, team to and our have increased other provide reorganized have aftermarket team the business opportunities development areas years. X time

We about are has that this the excited already uncovered. opportunities team

Before the quarter. turning reiterate like Kevin, to provided third the call to during financial expectations I would the

the also general We to line toward our which a objective, as do give want quarter, policy, that EBITDA during reiterate not in I for we growth expectation fourth resumption anticipate continue a our to is long-term with XXXX. guidance. also

close marketplace. However, the given expectation a would macroeconomic the we felt the noise as year we in more granular appropriate advanced be

financial results to QX return to XXXX call will detail. I Kevin the discuss the more in

Kevin Miller

Brad. you, Thank

$XX.X million million for the essentially QX health versus in was QX was 'XX. 'XX care million versus third million Regarding $X.X with our for in reasons X decline consolidated 'XX profit QX gross were in the results, QX Health in gross There year-over-year profit. quarter primarily quarterly 'XX. flat gross profit in care $XX.X $X.X

saw 'XX believe COVID X to October this nonschool revenue. we XXXX our XXXX. We impact we where give in remove revenue comp. COVID, COVID-related we if we of quarter experienced school approximately in estimated similar our the results XXXX. XX% First, September compared our revenue that derived was September To impacts also perspective, by QX grow first

the deliberately services continuing to in we City provided a called multi-location client X Island. the and care of boroughs New Long York Second,

as of client. beginning At the acted VMS an to emergency this we COVID,

'XX client. sequentially. nondirect shrunk versus that revenue If On that decrease $X.X decreased XX% return was margin margins helped by in our in The decreased model. from million QX 'XX, the the to by insufficient the QX gross As margin contribution QX we quarterly gross from QX year-over-year low-margin we revenue decided revenue this client us sequential basis, a post-COVID, on XX.X% grow $X 'XX. for to our in compare this the business 'XX million

The levels. engineering QX engineering was our and Services primarily XXXX. profit Group over project increased gross gross getting our by in gross X.X% to target margin by in in 'XX activity closer Energy grew We QX profit growth driven

was margin of gross QX 'XX from 'XX Our a gross margin XX.X%, XX.X%. QX sequential improvement in significant

profit gross year-over-year. outstanding continue We IT group Sciences see to results our XX.X% Life in and quarterly of from with growth

fantastic We as seeing revenue high-margin service managed our drive more are high-value, offerings. results we through

hope to can is another we 'XX. there We year get in QX

we growth 'XX, we fourth show revenue $XX.X EBITDA million. More $XX.X fiscal estimate between to similar $XX.X segments granularly, to care and X revenue and Also, between million. results and in profile Life we look and estimate adjusted revenue We gross estimate between million. between 'XX. consolidated quarter a with health QX our QX $XX.X million XXXX million in engineering adjusted million. in million estimate of our EBITDA. adjusted million 'XX $XX.X million $XX.X $X.X IT $XX.X to revenue margin between and $XX.X expect and As all estimate We QX good million XXXX, $X.X We Sciences consolidated with and we

discussed we was discuss approximately XX our days. was have approximately school XX QX would our 'XX and helpful We approximately XX in about some days to be days. Since XXXX. at XX average QX seasonality we QX days. was 'XX it weighted estimated segment, variability Healthcare days. is thought 'XX in

decline that's in to about 'XX. when a QX days comparing So X% QX 'XX school

expect school haven't to a may or budgets days in X QX. except to shift we penciled our XXXX, While we from QX yet, X cadence days first similar

next estimates ready XXXX give our the We'll as we call budgets for year. on have our

if EBITDA, XXXX we low disappointed at highly fiscal be we see least growth. adjusted for double-digit don't will As

percentage. goals Our reflect a undoubtedly higher internal much will

fiscal growing time, will this about remarks. This questions. 'XX prepared segments optimistic all are At our concludes X the call We and in beyond. for open we

Operator

B. Riley. [Operator with Our Rygiel first is Instructions] going come question to from Alex

Alexander Rygiel

Gentlemen, here for appreciate I added very there. questions first. Super quarter, A couple quick the guidance nice of you and helpful.

care, health your was third revenue schools the quarter? to relates it in from As what

Kevin Miller

million. $XX.X Schools was

Alexander Rygiel

markets. And strong. incredibly And expanding bit you staffing into a talked then your balance is new sheet about

you Brad, on bit maybe, deeper So could little a go that?

Bradley Vizi

a have the to number confidence last of prepared Yes, a as a pretty years, alluded remarks have of in lot consistent dialogue where the these and we with couple portfolio. been in point the businesses places of at we our in

any adjacencies. to to and on because expansion per respect new go So deployment do. what not position build there's we're capital of opportunity areas core with of greenfield into in into of plenty a be We're opportunistic to simply looking to se we new the

inclination organically of to the a naturally, M&A, by more a react type anticipate any the do opportunistically on type is opportunity bolting it that there's So platform talent. extent of to with than first and to acquisition. to respect major would we're bolt-on it being going transformational And inorganically

So know if question your I don't answers sufficiently. it

Alexander Rygiel

about Definitely to the XXXX? then backlog does. relates there the can a And you and the outlook as bit it segment, Engineering for talk

Bradley Vizi

going engineering. Yes, what's in we feel pretty good on about

our feel we it of appropriate respect like metric increasing it a have looks and grow. to hybrid the to momentum with to We metrics I track, mix business we that mean, pipeline backlog continues the is given that

anticipating we're expect in increase given we engineering work whether very certainly can but as year-over-year. our not good inevitably, be a it minds going nice but project question substantial. nature It's not pretty don't good year the it's do a to deviate, to things to the So -- a of anything or

Alexander Rygiel

any as XXXX, lastly, COVID-related were in the then you as I then guess and were sort quarter? that quarter. being XX days, or and my was school is, of down we first revenue that revenue. had you there think first you XX mentioned question the there the and of in here the quarter kind no that from quarter, fourth And X% first XX think legacy quarter, mentioned quarter, first of that's there In third days, the we about about COVID-related

Kevin Miller

But in QX. COVID-related right? Yes. certainly. any good not Yes, gave QX, I expect think pretty for we we guidance revenue So do

health we business And think core health we've work in schools. which we we're XX% seen a we of XX% of schools, look what core there. school That care so care. care, think Obviously, can our our do in from business, the that's grew lot is And is the we build in outside our it grew and at day, right? October. business in health September, -- least we okay, far, in But really at at a October, end of if

Operator

Andrew Our next Management. question is Capital Andrews going Ben to come from from

Unknown Analyst

A balance to? that related. Or your specific couple of transit player. it Does is that questions, account, have Understanding a was subcontractor what if or I I the industry type segment? may. primarily, sheet tied segment Is always thought that engineering

Kevin Miller

got it engineering you to to right. It's and mostly Yes, contracts. tied EPC

the large to the we So have and equipment goes E several C. the the but purchased of -- EPC inventory do we contracts where the we don't the don't equipment the do but straight we from OEM it take We the P equipment, client.

that we equipment. of So take inventory never

construction. so lot that is And equipment payments a and advanced of for

Unknown Analyst

Okay.

revenue what those is the so subcontractors? going the And is ballpark stream to

Kevin Miller

all pretty but Well, we it's significant, in -- through. the terms of it's . -- right? have passed So

William Sutherland

will equipment balance at Essentially take sheet? or balance show it. our our our never all No, equipment. the then it's equipment their The not doesn't owned by that never your client. on be. of up sheet hits liabilities never SPX up income So because but we statement, show in stages, It's inventory their equipment, your

we're and paying the moving but basically own So equipment it. equipment, we the for don't

balance the equipment hits our sheet. So never itself

those manage So paid we then the payments we milestone and from client in upfront. -- contracts we certainly like get essentially. we're that get And a payment so

X contracts sums it. more money actually we're equipment, from pay go do of work we putting money and for X multiyear the not to money we because construction. the from years. comes huge that are and typically anywhere And So in, order comes then out these The for in we equipment then

Unknown Analyst

Okay.

then be liability subcontractor? a revenue by would earned that So already

Kevin Miller

necessarily. Not

may Some of some be may it not be. but of it early,

Unknown Analyst

Okay.

further So you can out months? look than XX .

Kevin Miller

percentage the Yes. Obviously, well. and a until done, progress and equipment on And also our any as small of as make that's contract earned on based we're the revenue it, the that do actually on not So the we right? booking amount hits we of the right, statement based revenue. construction income engineering been

Unknown Analyst

large in share any it in was went schedule of larger quarter, out the was issuance there the what And what clearly looks maybe regarding it vesting the than fairly already issuance, cap. market a there your on in was share like Okay. Qs, XX% quarter? of

Kevin Miller

front I the don't but XXX,XXX I [indiscernible] Ben, probably have share believe XX Yes. awards. exact share me, we numbers of had restricted employees long-term about in under to issued that shares time-based

Unknown Analyst

definitely I thought right was shares. out wrong last you it shares. it Maybe thought finished No, million I And because Because then quarter X shares saw XXX,XXX little I read a now. under X.X not. million I

Kevin Miller

Ben. million, No, it's X.X

Unknown Analyst

I'm misread it. Okay. sorry,

Kevin Miller

Yes. in me. No problem. of the Q I have front

we outstanding. of X,XXX,XXX As had yesterday,

Operator

is with question Bill Benchmark. next Sutherland going to come Our from

William Sutherland

up going Following at shares. the Is you the list capital that on on guys Ben's the for top forward? deployment still question of

Bradley Vizi

always Yes. buyback Naturally, some as buyback bank decreases wane. volume Yes. inevitably a having much I the we going we anticipate shares pretty mean form of to had in, is and taken right?

we to to However, active quite company. continue as ability value be to continue about the see, you -- our we be optimistic at deliver

so And safe assume very capital we're medium. that to through much deploying to committed it's

William Sutherland

-- as Okay. as back it for about growth of and on you about effective. the particularly zooming certainly bit well. its how opportunities, a the the should engineering It's group brought defense. think thinking out engineering? been intermediate the little that very -- aerospace out But feet I overall into getting kind just on Brad, other mean, and areas we

Bradley Vizi

all that's engineering to gain with quite and you X Services, continue X almost we Yes. year -- at future and Energy traction. to respect of optimistic look We're about all the segments,

build some we to can project continue partners matter large of confidence on. a In have We take it's a project. we much instances, number very of how long-term as after

strategy much And marketplace. very attachment be leading as are very to capabilities of the going record, that in can that of technical substantial. talent think kind back it of partner, we really differentiated respect track that a you to assembled. become with is the there, -- with naturally, So the incremental from core work we've the our preferred

our what compounding respect case of of kind So of at is point years in our seeing we're comp that you're -- a a of bit goodwill earning of Services to and really the tipping with there Energy years group trust. of really

had of I with growth adding incremental expand it So weeks very or aerospace, X last with and forward setback expectations very year. very strong several team going opportunity very the meaningful to year, With late again, happy so that it. which high the and have very business. we a bit was actually those within last for present rebounded, are of to how orientation respect of dealt a significant clients, accounts. a a to

in of quite terms So we're business, in beyond. in again, optimistic that and XXXX the upside

finally, build their business, and all of need to process, team. respect always of that with forecast. an element be strong the capabilities continue then lumpiness We've on sure again, a tools that currently they making they invested And that that to very very, to in ultimately, and technical to have there. performance business. difficult be will will Inevitably, reputation Yes, there financial the

a have intellectual it that paid property. very and However, portfolio, is we our of part IP-intensive for

model. economically so And an very it's attractive

quarter is an or versus, So going that to is to this with challenging. it, saying call excellent one most QX, QX the respect probably quarter be

that. strong we and it's we to very is as build is much The However, team very reputation returns as The believe the been. intact, robust. on are continue

performance having of right projects go to for has But that activity its very the troughed, couple is in large are starting we think direction. specifically, that, and up well. a we so as And finished optimistic group

William Sutherland

range, look the ramp quarter range is like in for just new little flat a thinking your first is starts phase quarter off So next likely So that to the looks be that and you may you're and your completion bit? quarter-on-quarter revenue fourth year? as work the it at to

Bradley Vizi

specifically little we're and breakdown do thinking into bit Yes, how sequential But within engineering the Kevin, want go there's to about good a cadence. question, you that very that. of

Kevin Miller

right, next we to right? is QX it see move we'll project so the be depending any we Brad a obviously, happens higher single-digit to difficult would sitting jumps what forth. So growth sequential expect not than particular believe Sure. we as with acquire. But in -- big different higher any year, would being slow QX and I projecting sequential like throughout But upside in with year what engineering revenue as we be is the here I'm uptick some I is to each quarter. there all believe irons to said. than QX on what mean, we QX. see giant quarter,

covering a time, As Bill. you long us you've -- been

seen of a to expectations for each really a projects. in But quarter projects to reduce to we in uptick and we have. if depending you've can a obviously, So hope a jump sequential stay I quarter big while, that of what would expect can terms engineering on how and what and with up then we see expect see couple happen

William Sutherland

Got you.

little makes Okay, sense.

right? So work the need adding going margins to was let's not about continue see the to other to it's revenue, thing we And you. because on ask just I our

Kevin Miller

It's profit about model. our and dollars driving profit adding that gross that quality revenue -- return gross are

William Sutherland

to you of off. of about in In I a importance becoming starting behavioral I is terms was just comments, mean process? Back were the yet? Is words, really percentage are you. -- revenue second. it its to care, you you made a that where just health it for other Brad, Or still taking about health meaningful thinking

Bradley Vizi

the it think majority this And anticipate the at business I accelerate. it's point. of seeing frankly, we

about bit and it increase, call the for years. positioned the comp. is in think, is excited I anticipate the you and go but drumbeat, I of in think continuing seeing last, I months, you to on a right direction. couple it story the of are certainly it, pretty activity we that X, an call a increasing know, we've meaningful accordingly the As been call it last ourselves There wouldn't XX

And to seeing. this type initiatives you think come I of exactly we think lag. we're naturally, of of some behind drivers these a social think a oftentimes macro the going investment what are that's about on from infrastructure perspective,

part the plenty think of question So portfolio, there. exciting upside there's no about We it. of that a very

everybody continues So and as we're willing crystallize. certainly to keep that to posted

William Sutherland

Okay. And...

Kevin Miller

revenue would that, our years X, to add X clients. primarily years was health ago, X ago I And behavioral coming Bill, from X that

today, services first as I RCM, so for health over we that XX behavioral there's look there's just we this -- just -- still much out potential there. to. we're second So growth there. have behavioral the inning, at best, think we're market in when right? well And we at We providing amazing health So think can we think

a companies we're obviously, Now us after lot team stellar there's and there's think that of competition. There's But really are out just we grab there -- other there's excited a lot business. to And business to lot a going of our of is for it. this grab.

then another when XX schools only build see. to that There's for set that we'll you're a potential approximately XX -- get we with in typically year. school add have the hopefully, add health. a of exciting like grab are once -- XX, can client of year, And to It's the year another in that because be going and school profitable. that we're not really But a XX, school have X the much $X in million so we'll business we schools lot behavioral you middle providing contracts to we'll the school next

William Sutherland

total? in you are schools now many in how Roughly,

Kevin Miller

about Probably where roughly. we're XX active,

Operator

looks Instructions] Kelly. like from Frank a we question [Operator It have

Frank Kelly

shed on trade there? significant actual year-end, XX/XX/XX. since seems some the Absolutely to And over. over receivable. to can that top unit last see and to there. sheet take outstanding. It accounts that Switching Phenomenal. quarter, great line -- since light love to science great traction balance heading see just losing XX%. Great, you particular, our we're on And quarter. in growth What Life is call

Bradley Vizi

We little bit a Sure. the Frank. last on I can call. speak about talked that,

of battles the the period. to of you career, where a to I better relative that in get the things to September, these different not now right, schools of little. your high, receivable/TSO revenue them we're of think going QX sort in because collected have when October down how or hits we're our is revenue have doing right, cadence you're somewhat right lot the in September, get into and Obviously, fought at turn looking to a income back going always So our DSOs loaded in of And July, to But closed just and receivables you very into -- because as receivables revenue you relative wacky because too June QX, being because the least get before any statement. level. receivables to they're a the the

that's QX. factor one So in

composition fast. we look with you just QX you If today. a about COVID-related the of of compare a very -- very, revenue, we had to some do if faster frank be little we some different you, really lot bit talking QX, when that to a than you revenue where that start had clients just Particularly money was coming in

clients, Like goal to today, numbers historically like working are particularly we're for that sciences we today the DSOs these how if payment it. just our say, model days, very, where to the very you it's pay to you are to clients fit fantastic days, little. clients, a uncommon leave XX companies get in in of QX to historically high-margin then terms there. we or and get big those the a are the you at QX, get want take it are good are in business, industry, not low for They with Even a that couple wait well. that clients if return levels life profitable. And DSOs look So space low. we have back Certainly, the that, But us us. clients, DSOs and those DSOs. And right? were to a where the really have in high very like XX few contracts got

overall flow effect But utilities So just the to higher excellent. the just great. when economics Then the don't overall that DSOs. are the you of rate flip also one the engagements of of those cash look It's DSOs, EPC they and a billable But see you the aspect outstanding. clients clients cash trade to -- look those are some when EPC that's at clients, the are that's payers. lot of slow you contributing over

that So much factors but couple I level to tuned. you -- a Stay and much you've of DSOs on, got level can going a working very assure are QX. hard at lower get were they in QX we where

Frank Kelly

have talking they QX you DSO they are. said know where were were Do QX? and -- you about in so you numbers, Where you

Kevin Miller

you of obviously, at QX. in know They people calculate were but in They were XX. were They QX an in QX XX them. were calculate DSOs and QX. all-time I Well, XX differently, we right, in XX low how

some to need to get somehow, we them So all get [indiscernible] up way, on we need

Frank Kelly

Because Right. we we of the pickup capital EBITDA if $X.X if collect there down as million them into over the as look flip expending I million, -- and right? against against line, of those much turn a on side on debt, be could that $X think

Kevin Miller

impact costs, interest it's to EBITDA. really matter It's right? Well, our not going impacting a of

Frank Kelly

Well, interest including saying Am EBITDA, right? or cost, corrected no? I

Kevin Miller

before Yes. interest. No, earnings net

it So doesn't good impact interest, your point no, but one. -- is a

return important that having it. flow. on most on company ourselves equity, look most focused at measure thing. And is in a very the very, are We on high equity, cash like important we And this component pride of is this an the return very important and that's we

Operator

like bill looks it follow-up has question. a Sutherland And

William Sutherland

the was year? quarter the curious, rate think for to in about Kevin, the what tax I and about

Kevin Miller

QX Yes. We just benefit that QX a us out. but it's had tax in a onetime thing. helped discrete

way. to that's taxes, consolidated pretty QX. you're I item to use start roughly discrete looking I a think I you your going other rate is bump you to little going at a for the to XX% at model. think in have it term, good in work to a bit looking up XX%, think going It's XX% because we're QX, probably Long when

Operator

so doesn't to over back [Operator like any questions, turn for It have closing it Instructions] look remarks. more I'll we you any

Bradley Vizi

for RCM's forward call. you our Thank quarter calling conference third update We XXXX. next in look to

Operator

This concludes your call.

disconnect. You now may

RCM (RCMT) 9 Nov 232023 Q3 Earnings call transcript