RCM TECHNOLOGIES, INC. Q1 FY2024 earnings call

• Breadth of focus widening and deepening, shared services team introduced to streamline strategic focus. - Digital initiative to launch, highlighting groups' work. - Health Care division had double-digit growth, expecting re-acceleration in H2. - K-12 education business strengthening with new districts and promising sales cycle. - Life Sciences and Data Solutions saw renewal business double, pipeline growth. - Energy Services with strong Q1 results, client development investments. - Thermal Kinetics with equipment contracts and testing lab utilization. - Aerospace and Defense Group with growth in engineering and aftermarket services.

Health Care: Started 2024 with core emphasis, excluding non-strategic business, demonstrated solid double-digit top line growth year-over-year, expecting re-acceleration in H2. K through 12 education: 5 new school districts onboarded, 12 more in final stages, 11 new districts in late sales cycle. Life Sciences and Data Solutions: Renewal business doubled year-over-year, increased demand in Life Sciences, HCM, and Puerto Rico solutions, pipeline growing. Energy Services: Closed Q1 with strong results, double-digit revenue and EBITDA increases, invested in client development. Thermal Kinetics: Continued execution on equipment contracts, won new engineering business, testing lab at 100% utilization. Aerospace and Defense Group: Mixed results in Q1 but EBITDA grew year-over-year, with RFIs, RFQs, and MSAs in process.

• Anticipate at least low double-digit consolidated adjusted EBITDA growth for fiscal 2024, similar quarterly cadence to 2023. - Significant upside in Q4 due to robust school pipeline.

• Potential fluctuations in accounts receivable due to administrative issues in schools and project-based payments. - Impact of client-specific administrative changes and turnover on DSO. - Margin fluctuations due to mix shift and administrative challenges.

Q: Bill Sutherland asked about Health Care districts, Life Sciences HCM expansion, Aerospace cadence, cash flow, DSO.

A: Bradley Vizi and Kevin Miller responded on Health Care districts, Life Sciences HCM expansion, Aerospace cadence, cash flow expectations, and DSO targets.

Q: Alex Rygiel asked about school contract visibility, receivables and margin headwinds, sizable contracts, capital allocation.

A: Kevin Miller and Bradley Vizi discussed school contract visibility, receivables and margin considerations, pipeline strength, and capital allocation plans.

Q: Unknown Analyst asked about Health Care margin, AR fluctuations, earnings margin outlook.

A: Kevin Miller and Bradley Vizi addressed Health Care margin drivers, AR fluctuation causes, and earnings margin outlook for future quarters