RCM Technologies ($RCMT)
Conclusion
Clean balance sheet, allowing for optimal shareholder returns with Free Cashflow (share buybacks / acquisitions / …). If working capital doesn’t grow too much ?
Substantial share ownership of mgmt
Continuous decreasing amount of shares outstanding
Non-cyclical business (healthcare / electricity / aerospace) or recruiting/staffing which will take a hit during recession?
Potential for growth + ok valuation
Analysis
Activities
Split into three business lines
Specialty healthcare → largest & growing
US schools searching for more healthcare staffing (2/3rd rev) + new school clients + hospitals tackling staffing shortages (1/3rd rev)
Q4 2022 investor relations call:
Engineering → growing
Mainly Aerospace & Energy, active in US & Canada
Investments in carbon-reduction and net-zero emission goals with net test center built in NY
Active in grid security & grid resiliency → expanded to Puerto Rico?
Information Technology → stable
Risks
Business concentration
Financial statements
Acquired TalentHerder in Oct 2022 for $4,2m and Thermal Kinetics in Sep 2018, earn-out payments still possible for $2,4m in total
Credit lines (Citizens Bank) barely used - floating interest rate
No plans for dividends
2023 Outlook
Capital allocation
