RCMT - Earnings call transcript Q3 2024

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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

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

of to RCM's the call over Brad provide I quarter. an Chairman overview performance will turn now operating Vizi, to the during Executive

Bradley Vizi

Thanks, Kevin. morning, Good everyone.

businesses Third ones. straight engineering considered Quarter to continue markets. to Sustainable a their care seasonality, line. each existing growth was clients is new be and led in land our expanding of end ones the by progress ramp inspiring maintaining as health and breadth as Though respective comes always in the continue we both should never while of QX businesses progress in of

across However, the has world. our commitment consistent platform allowed ever and resilience our of throughout cycle the and several . for evolving in continents progress the people of

not aim construct impact today's for deliver is future. us decisions philosophy It years the to organization long-term but just a the strategic Our term, company. over the path the throughout into the our to to provide evaluate allows to short sustainable many of

the head into momentum. a on year high close Healthcare RCM units note to demonstrating we As all positioned the final XXXX, quarter is with operating of

services to the grow behavioral with staffing needs for continues that new heightened roster K-XX landscape specialized marketplace today's strong students. diverse support client K-XX evolving The and meet health of already an Our with partnerships yielding presents results. demand

districts. team's addressing our unique children's requirements delivering providers growth high-quality partners' a to This commitment testament our across is to and

potential, Additionally, our in OPWDD years the has for ahead. expansion extraordinary providing a runway demonstrated long division

care the demands a are and nurses we pipeline health by meet across growth pillar forward, Once increasing present to strategic excited cleared, waiting as priority we our on of dates. education international clients. accelerate robust Looking

confident trajectory With the the a in our as XXXX, in and solutions. record our success team education staffing leader we continued and standing developments of recruitment toward a within care health our these are correction space, reinforcing

our QX, engagement, completions supported and strategic and Performance our was by service increased project performance, management & characterized focus Life Solutions In Sciences in client the Division successful efficiencies. on strong cost a robust by demonstrated expanding Data operational offerings. effective quarter

in continue technology we investment business. allowed to process the to resource Continued and has allocation improvement us build optimize as

welcomed clients RPC complex and the a we quarter, in trusted as the new our advisor reputation group, underscoring across in our several pharmaceutical During sectors navigating and biotech dynamics. market

on delivering focus high-quality rate a Our in resulted among retention tailored existing clients. XX% solutions

strong strategic our satisfaction and execution. Feedback with indicates insights

and We deliver initiatives continue successfully two started on solution have our to projects. managed

The since inception. Our integrity demand accelerated successfully most live our went life implemented services the HCM as team was module seek sciences with increasingly its in insights decision-making. the to of specifically has data data-driven inform clients in for consulting and area

with are proactively areas capabilities our market align needs. in to We expanding these

sales We growth to support team remain enhance As to we and our further training approach our in to strategic our and we invest goals. committed capabilities our QX, plan trajectory.

Additionally, to to needs continue edge. trends client and our maintain industry we closely will anticipate competitive monitor

our to of continue challenges we performance to a outlook emerging in well addressing foundation exceptional stakeholders a our delivering reflects positive for by sector. sciences clients value remainder QX our solid leveraging the Overall, and life and and the year strengths are the positioned

contribute Coast York's part the XXXX pace on Energy the to EBITDA After to exceed energy Transitioning build of as major strong out. budgeted Services the grid to have New we a project awarded Energy engineering, will is that starting another with U.S., numbers. on renewable In East Services. revenue been QX, modernization substation

to contributing project additional an awarded Germany. were we energy in Europe, In the transition

have robust we Rico, projects Puerto of Finally, XXXX. pipeline significant in in a

As strong further utilities developed opportunity of largest with EPC in a the through channel. business group the world, some our executing build of the new the the the strong affording performance, us to relations a among projects largest turnkey result construction companies

In to of an demonstrated LATAM [ and future of with fuel Energy for presented microgrid Also the and possible is come. Europe repair years a [indiscernible] digital of at and growth evaluation latest together in project innovative in a cost large U.S. to addition, technologies quality. the position to note, increase substation year's partners this ] project and management utility to paper improve Oregon client for execution many services technical progress Services energy session,

Kinetics first their completing systems evacuation is carbon two The In the and score. integration to optimization Thermal RCM Process studies and plant intensity delivered the enabling modular clients carbon a the customer. TK X chemical team ethanol engineering for expansion lower office has integrate RCM that Energy design, patented Industrial, of X manufacturing

equipment The launch need space. which the ethanol that bring a into technology. TK basis of TK the engineering for used ethanol petroleum of typically engineering has employs and designs campaign, campaign knowledge, not become the expansion the to for ethanol wealth plants expand next a evolved in has Engineers marketing new

process per its equipment customer. planned proposition in client. a have schedule. a value for a from XX-month completed gallons year. The has to for The ROI, equipment firm order expects the order facility project million has QX This first XX November, per year tentative XXX campaign detailed SAF from and to a proposal plant a the to million XX- project design office a expanding The a providing gallons team compelling U.S.-based will

example scheduled planned for develop and novel [Indiscernible] exclusivity large the in the with utilizing good the TK. of TK chemistry resources first or a supporting facility order late major center. either strength agreements QX. customers is a team is A for test U.S. engineering Two lab in engineering project purchase is partnership final of the and customer the This of lithium facility in to stages solution are

COX Within strong through to end the leader conversion proprietary support and exclusively XXXX The in aerospace sustainable doubled focused on client of chemical new plans remains their emergence team is and count we the market as our more for continue into X X of test of we continues XXXX. the and in The than as process to responsible a to years. capture has One engineering utilization build secured has the new Head exhibit XXXX. thriving business clients QX. in infrastructure continuation defense, X TK within center used in design. QX these clients

over profit still Our for and increase run the compared realizing to has well XXXX in per week. a rate holds estimate gross of by XXXX now $XXX,XXX increased true, revenue significant

increase and profit which experienced count, finalized, expect revenue expected The through in head MSA to RFIs, we and RFQs aggressive were have to XXXX. we grow and continue therefore, an QX

much We requirements customer have increases realized anticipated QX. in in

us has which new Our world-class continues team amount hires recruitment compared to QX of to successfully the twice to experience trusted QX. in execute, allowed

QX the As software us contract will largest XXXX OEMs. defense XXXX. aerospace one model-based expertise throughout drive anticipated, and systems, and we to allow of avionic logistics, new have and This and been in with multiyear expertise, mechanical XXXX, awarded a award our expand

and manufacturer We also which have to expected XXXX. been with our group toll contract the large help is another a recover strong deliver in awarded arena, aftermarket a EV

direct challenges to in to smaller shorter our by continue frame their workforce and contracts. client also are because due build base with time facing caused they within We current expansion

The improved much first QX and up beyond. X quarters of a XXXX set for us

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

Kevin Miller

Thank you, Brad.

as EBITDA consolidated of the X.X% for by XXXX year-to-date Consolidated results, by $XX.X compared consolidated quarter grew grew $X.X our XXXX $XX.X $XX.X quarter to gross million. million for million. for XXXX X.X% Adjusted the Regarding profit to X.X% from grew third gross million third from compared to third from $XX.X $X.X as million. million by to quarter the profit to

to million. third from $XX.X quarter by million for EBITDA $XX.X grew Adjusted the XX.X% year-to-date

& our by for health XXXX, Solutions Engineering X.X%. grew the of Life profit by in profit Sciences segment performance As gross gross decreased profit gross increased care XX.X%. by quarter XX.X%. third Data

health -- about our of by revenue call, talked record third On care our grew School revenue, XX.X% for contracts last million $XX.X we health school heading a care $XX.X XXXX. into new XXXX, As million. to from number quarter

that new growth, XXXX steepening slow as of neighborhood growth XX%. yield the and contracts XXXX and with demonstrated XX.X% optimistic June XXXX school pleased have year will ending revenue the we're the While remain in school year started ramp progresses. in We several a for

revenue compared was million. $X.X to as $X.X million Nonschool

was if revenue $X.X we We do reduced growth However, a to in the remove periods. both deliberately flat large long-term services, at group nonschool in where XXXX. fourth care healthy a we sequential quarter of revenue million expect

we consolidated we fiscal fourth results, fiscal that EBITDA optimistic adjusted see concludes remain compared As to growth for attractive remarks. will our prepared as XXXX. consolidated XXXX, This quarter the of

open this call the At we for will questions. time,

Operator

Sutherland. [Operator Instructions] And first Bill up,

William Sutherland

care health Kevin, wanted for a to, on second. I just stay

are you for that XX%. current with school saying looking to the corresponding year, the grow revenue quarters, for school this You're

the say, let's next So in through year.

Kevin Miller

be XXXX, of generally neighborhood the current I first the I first and through -- the XX%, quarters July said. years So quarters of third is just But the year, is quarters year of right? think, and yes, third to this what clear, In now, that in of the Yes. June. XXXX fourth run we're quarter school now school two of from

we're of optimistic end in school the get will year, revenue year of XX%, XXXX year the to to school we yes. school that when So neighborhood the XXXX, the be growth

William Sutherland

additional more school having that XX, districts $X.X due the XX said on each. to last And call, averaging but [indiscernible]. school had you million And this additional, is an than

Kevin Miller

Yes. XX. added -- added considerably much No, more than we've more XX we've contracts than than more new

some of out started and now prior this some last strong. that we're And of seeing to small lot traction a will those as school school hopefully but those nice some new school we new year, be contracts are to turn will many last year. signed -- not Now some year start small, -- those of off of the

I $XXX,XXX going know new think that's client. don't I schools become to that I exactly year we're said. a XX what see don't So

contracts any about we think above these talked But school to way, of school year. expect schools XX we this over some $XXX,XXX. significant new being at I for getting be to

that we them executing and our we that growing come. We subsequent nicely, We is just even new this of important it's will revenue at in will is of to contracts really contracts And with we're both and and the school existing grow market. good school 'XX, really with think see some don't why more good that and expect very 'XX, the I most years any for won't small be them takeaway year schools. reason a some think think continue but

William Sutherland

it what comment about the what hear you didn't the won like did that something that. quite $X.X you say the that many. -- at make glad great. fourth that nonschool. sound nonschool last XX you have year you districts about you about I'm And I was to That's would million. quarter finally, had I for didn't mean Did . I said -- was say XX it that school clarified versus least

Kevin Miller

Yes. XXXX, our We revenue the significantly we clients one of that compare spite down in business. nice services to pickup formerly we're QX XXXX a curtailed our largest business, of our in winding that we're of think going that's the with when deliberately fact see and nonschool our in largest nonschool one QX -- and we to

some start the can we But And of turbocharge we nonschool several nurses arena. point, foreign have in if -- really clients we we're new going our have getting look out, to more we in, at that. some

William Sutherland

the players narrative it's a one cash into of just is of of for the the year? Right. as me just head was I next we pure impressed and part around Last nurse health into care first hearing the picture business. couple the not quarter any maybe because this from commentary just

Kevin Miller

of flow QX Well, see -- combined third sort typically And will you the fourth on see start the basis, turn to hurt a QX, from us. in next I but cash should should expect next the nice that good when We've see look QX how which we'll got quarter. that cash at year around of X there weeks quarter, but in flow and believe we you a QX. few Sure. a things got several have of we are we We've goes.

William Sutherland

So it's the . on picture? DSO mostly just focusing

Kevin Miller

to you our see But well. time quite the DSOs had Most to clients Well, the at little a receivables at read I it's pay $XX but least day-to-day a than the not don't why I I XXX million yes, little would necessarily probably of see spikes. our be. explain look, time, we're higher to that of they of spike, you otherwise color when think if where clients. put chance know K, were they're around sort bit going to from

this when flow last in about good excellent, cash period company, QX. in $X averaged good you XX quarters, look over flow But operations, cash flow expect X of about we quarters, right? see from the at we you really at But we're when at quarter. that's cash it look I'm excited cash you'll continue. you the flow obviously. or look When we'll look If you and strong we like period great. per a flow, a not X over sometimes think the about quarter cash time, at you flow cash see to But QX of and flow million And is that cash long see cash talking flow, and time,

Operator

Next we Securities Riley B. Alex have up, Rygiel of .

Alexander Rygiel

XXXX? what as be from going like accelerating. can kind Brad, Any picture we rate the EBITDA on we macro organic think standpoint, growth to rate is difference a about XXXX, in about think thoughts in of at bigger growth EBITDA

Bradley Vizi

And overly we're think on we propel multiple have earnings the right? about drivers business construct in to backdrop, -- each year. so not as try macroeconomic place relying We subsequent to so Yes. the and

I'll script kind so stick and statement back little to stuck guidance, bit with. what I of years respect of potentially the X harken And with kind say I'll ago gave and a you the

We -- feeling good collection we out this into the from kind our as going that's anticipate at and delivered, that's deliver. I all earnings to this But pretty long we're what we've our year X think low over And businesses term. businesses. move what we're continue about and close of of growth to next year, fully double-digit least of

them think reality And right? the year especially a is, single really R big got record, word a Frankly, point, talented we amongst record our from two I or vantage we growing, we're I year we've hate a because to over strive Because some see to could use folks. be but markets. in They're right?

. satisfies a consistent hope I answers of So question way in that's said is we've directly. past. kind in what that your your question with It the

Alexander Rygiel

looking past, back stock. buying Definitely practices gotten in your at does. aggressive at the And in times you've certain

of in stock started quarters. to maybe in . But lot level buyback You free flow interest talk cash more this of buy shares. here few some sort about the to aggressively a last your here back using

Bradley Vizi

of back bought a We stock. lot

we're point I outstanding probably and how As time this half brought time know, you think is I there myself, about realistically. at from much the ask out pushing more to

on day, we're go the the to is, to, you time, one a we're table. or with. balance opportunistic And yes, and at think with want you capacity I sure, framework in philosophy presents But it. the pocket operated on to it going in what money where it is the for very on a debt we've a so itself, opportunity disciplined want end bearing definitely how a that's buybacks And are when we're money you that's create to always certainly mindset to sheet, your no mean you at at good Have don't have with spot deploy the same smart move value, and comes the hole be capital you right? happy of to stick with deliver. draw the that's mean the very be capital. I I that

Alexander Rygiel

think With that unique the well the company? recent for election any outcomes could that develop this week, you bode

Bradley Vizi

corporate respect and Even at even simply investment the defense development. this I just I it's you look the clarity positive stocks from a to our minimum, and further, really isn't of look hard hard Yes. hard taxes, company, infrastructure continuing in a believe just you at depleted mean whole and size when to the to around bare aerospace. at decline that really it's backdrop, -- social potential mean with

into. one our I've hardening of Again, our really of is great and and I is infrastructure just think greatest infrastructure be the that my crisis structure, literally social certainly, or to spent fallen career our that social career, of dollars trillions -- probably need frankly, observed has

So it's to divert areas. from any those hard to material see of funds

So to quite with respect developments. optimistic recent

Operator

Next Frank have Kelly. Instructions] [Operator up we

Frank Kelly

set light jumps up P&L, was that the kind DSO that -- on out. But other for I that -- of have popped exactly kind the Could on item quarter just of is? covered you the net expense some We've that $XXX,XXX. runaway. what the one the and

Kevin Miller

you just but Q Well, I expense out, is and it's terms tends details in quarter, interest so is gain, The see certainly tell interest one a it's transactions, can expense, can Q, be mostly quarter, which you on loss a that to $XXX,XXX Frank. the foreign loss. is $XXX,XXX the pretty in haphazard currency of it's one

out it's ] some loss is small, interest. quarters, XXX quarters, a breaks . the XXX [ on $XXX,XXX Some currency it's But foreign and to in big.

Frank Kelly

Right.

happening the in make Q flow kind we is of... that either we'll $XX or we that turnaround once cash have of that in can will assumption So million that's down this the chase happen balance to this

Kevin Miller

Frank, as belief bring rates you come come will way. take there -- right? are come capital meaningful bring our we're if as down a They've not in debt. down in obviously, But well, down, -- that interest influence bit debt but right? and if well our and other can a in our decisions our come and help would want hopefully, interest then lately, that to rates down a isolation, way, down expense will will just meaningful that yes, little down receivables interest Well, the and goal we

Operator

right. I questions [Operator in the still Instructions] All no see queue.

Kevin Miller

Third RCM's you Thank look in Conference early March. to forward for update our call. Quarter our attending We'll next

Operator

gentleman And your with that does call. that and concludes ladies

for You may joining disconnect lines. your today's. you now us And again thank

RCM (RCMT) 8 Nov 242024 Q3 Earnings call transcript