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Mar 28, 2020
RCM Technologies Q1 2020 Earnings Report
RCM Technologies reported a decrease in revenue and experienced a net loss due to an impairment charge related to a customer dispute and the impact of the COVID-19 pandemic.
Key Takeaways
RCM Technologies reported a revenue of $45.0 million, a 12.7% decrease compared to the previous year. The company experienced a GAAP net loss of $5.9 million, or ($0.45) per diluted share, primarily driven by an $8.0 million impairment charge. The company is focused on cost and debt reduction and maximizing cash flow.
Revenue decreased by 12.7% compared to the same period last year.
GAAP net loss was $5.9 million, or ($0.45) per diluted share.
An $8.0 million impairment charge related to a customer dispute significantly impacted the operating loss.
COVID-19 pandemic negatively impacted the Healthcare segment, with an estimated $3.0 million revenue loss.
RCM Technologies
RCM Technologies
RCM Technologies Revenue by Segment
Revenue by Segment
Specialty Health Care Revenue
CapyFin.comEngineering Revenue
CapyFin.com Forward Guidance
During the next two quarters, the primary focus will be cost and debt reduction without sacrificing the long-term progress made in the business. The company is aggressively applying two principles across all three segments on a going-forward basis: 1) maximize utilization, and 2) reduce SGA expense as much as possible. A material reduction in debt is expected throughout the second and third quarters of 2020.
Positive Outlook
- Focus on cost and debt reduction.
- Maximizing utilization across all segments.
- Reducing SGA expense.
- Expecting a material reduction in debt throughout the second and third quarters of 2020.
- Positioned to grow in a post COVID world
Challenges Ahead
- Short-term revenue visibility is a challenge.
- Slowing of new business inquiries and proposals in Engineering and IT segments.
- Visibility beyond Q2 is challenging.
- Healthcare segment lost approximately $3.0 million in revenue due to school closures.
- Uncertainty regarding school openings for the 2020/2021 academic year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income