RCM Technologies, Inc. (NASDAQ:RCMT) Q3 2022 Earnings Conference Call November 10, 2022 11:30 AM ET

Company Participants

Kevin Miller - CFO

Bradley Vizi - Chairman

Conference Call Participants

William Sutherland - The Benchmark Company

Alexander Rygiel - B. Riley Securities FBR

Kevin Miller

Good morning, and thank you for joining us. This is Kevin Miller, Chief Financial Officer of RCM Technologies. I am 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 and assumptions and information currently available to us. And these matters materially change in the future. Many of these beliefs, estimates and assumptions are subject to rapid changes.

For more information on our forward-looking statements and the risks, uncertainties and other factors to which they are subject, please see the periodic reports on Forms 10-K, 10-Q an 8-K that we file with the SEC, as well as our press releases that we issue from time to time.

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

Bradley Vizi

Thanks, Kevin. Good morning, everyone. RCM delivered continued strong performance in our seasonally weak third quarter. I am proud of the team's execution. Our results demonstrate the leverability of our RCM's business model driven by our unwavering commitment to delivering value for our world-class client base.

During the quarter, strong performance was demonstrated across each division. Our Life Sciences and IT group bolstered its RPO offering with the addition of talent I will speak about acquisition in a moment.

Turning to our Engineering team. Each of our business units delivered solid performance, and I'm excited about the traction we are gaining across several new business initiatives. Lastly, our health care service expand its presence across the K-12 end market with the addition of several strategic accounts. Kevin will cover our financial performance in more detail but I want to share several financial and operational highlights from the quarter.

RCM generated third quarter revenue of $58 million, a 28% increase year-over-year after adjusting for the Power Systems Canada sale. As for profitability, RCM generated adjusted EBITDA of $4.8 million in Q3, representing growth of approximately 162% on a year-over-year basis.

On the operational front, there were several highlights worth calling out in more detail. First, as previously mentioned, our Life Sciences and IT Group recently acquired TalentHerder, a leading talent services acquisition company. TalentHerder will bolster RCM's existing RPO capabilities by expanding candidate reach, extending alternative service models to our current base, and providing proven methods to new clients, responding to a changing employment landscape at incredibly competitive rates. TalentHerder's proven recruitment processes can help scale both in-person and remote working environments for companies across the globe. We are excited about the growth opportunities TalentHerder presents to our clients and staff.