RCM Technologies Q4 2020 Earnings Report
Key Takeaways
RCM Technologies reported a decrease in revenue to $41.2 million and a net loss of $1.7 million for the fourth quarter of 2020. The company's gross profit also decreased, and it experienced an operating loss compared to the prior year. However, the company is optimistic about future growth, particularly in adjusted EBITDA and with the return of school clients.
RCM Technologies reported Q4 2020 revenue of $41.2 million, a 15.2% decrease compared to Q4 2019.
The company experienced a GAAP net loss of $1.7 million, or $0.15 per diluted share, compared to a net income of $1.0 million, or $0.08 per diluted share, in the prior year period.
Gross profit for Q4 2020 was $10.7 million, a 15.5% decrease compared to the prior year period.
The company experienced a GAAP operating loss of $1.9 million for the current period, as compared to GAAP operating income of $2.0 million for the comparable prior year period.
RCM Technologies
RCM Technologies
RCM Technologies Revenue by Segment
Forward Guidance
RCM Technologies expects to build on the progress and grow adjusted EBITDA sequentially in the first two quarters of fiscal 2021. The company believes their fourth quarter will reflect continued strength when school clients return from summer vacation in the fall of 2021 and most schools are in person.
Positive Outlook
- Expectation to grow adjusted EBITDA sequentially in the first two quarters of fiscal 2021
- Anticipation of continued strength in the fourth quarter of fiscal year 2021
- Belief that most schools will be in person after summer vacation in the fall of 2021
- Realized just under $1 million in adjusted EBITDA in the fourth quarter of fiscal 2020
- Generated $1.5 million in cash from operations while sequentially growing revenue by $9.6 million
Challenges Ahead
- Decrease in revenue for the fourteen week period ended January 2, 2021, compared to the prior year period
- GAAP operating loss for the current period, compared to GAAP operating income in the prior year period
- GAAP net loss for the current period, compared to GAAP net income in the prior year period
- Decrease in gross profit for the current period, compared to the prior year period
- Line of credit decreased by $22.9 million, or 66%, from $34.8 million at the end of 2019 to $11.9 million at the end of 2020
Revenue & Expenses
Visualization of income flow from segment revenue to net income