Earnings

RCM Engineering Profit Rises as Specialty Health Care Margin Falls

The Tip Desk · November 13, 2026 · 3 min read

Net income was $2.7 million in the thirteen weeks ended October 3, 2026, with operating income of $4.5 million.

RCM Technologies (RCMT), a provider of life sciences, information technology and engineering services, reported net income of $2.7 million for the thirteen weeks ended October 3, 2026, compared with $2.3 million a year earlier. Operating income was $4.5 million, or 6.2% of revenue, versus $3.9 million, or 5.6%, in the year-ago quarter.

Revenue was $73.4 million, up $3.1 million from $70.3 million a year earlier. Sequential revenue fell from $93.8 million in the prior quarter, after a $15.6 million year-over-year increase in the July quarter. Gross profit was $19.9 million, or 27.2% of revenue, versus $19.4 million, or 27.6%, a year earlier. Cost of services rose to 72.8% of revenue from 72.4%. Selling, general and administrative expenses were $14.8 million, or 20.2% of revenue, compared with $14.9 million, or 21.3%.

The Specialty Health Care segment supplied the year-over-year revenue gain. Specialty Health Care revenue was $33.7 million, up 12.4%, or $3.7 million, from a year earlier. School-client revenue was $28.5 million, compared with $24.4 million, which the company said was driven by both existing and new clients. Non-school revenue was $5.2 million, versus $5.6 million.

Gross profit in Specialty Health Care fell 4.4% to $8.6 million from $9.0 million. Gross margin dropped to 25.5% from 30.0%. The company attributed the margin decline primarily to a mix shift toward lower-margin services, slower-than-typical summer school assignments, and normal quarterly fluctuations. Segment operating income declined to $2.3 million from $2.7 million.

Engineering revenue was $30.7 million, down 2.2%, or $0.7 million, from a year earlier. Energy Services revenue decreased $0.2 million, Aerospace revenue decreased $0.9 million, and Industrial Processing revenue increased $0.4 million. The company said Energy Services declined primarily because of a suspended project in Germany and Aerospace declined primarily due to curtailed spending from one client.

Engineering gross profit rose 15.2%, or $1.0 million. Gross margin increased to 25.9% from 22.0%, which the company said was primarily due to a change in the mix of EPC project revenue from the Energy Services group. Engineering operating income was $4.8 million, versus $3.8 million.

Life Sciences, Data and Solutions revenue was $11.0 million, up 0.9%, or $0.1 million, from a year earlier. The company primarily attributed the increase to normal fluctuations. Gross profit fell 3.9% to $3.4 million from $3.5 million, and gross margin declined to 37.7% from 39.6%. Segment operating income was $2.1 million in both periods. Corporate SGA expense was $4.4 million in both thirteen-week periods.

Other expense, net was $427 thousand, down from $614 thousand, primarily due to a $0.1 million decrease in interest expense, net, which the company said reflected decreased borrowing. Income tax expense was $1.4 million, versus $1.1 million. The consolidated effective income tax rate rose to 33.9% from 32.0%. The company said the primary reason for the increase in the consolidated and United States effective rates was an increase in permanent tax differences in the United States.

For the thirty-nine weeks ended October 3, 2026, revenue was $250.3 million, versus $232.9 million a year earlier. Specialty Health Care revenue increased $10.4 million, Engineering revenue increased $6.3 million, and Life Sciences, Data and Solutions revenue increased $0.6 million. Thirty-nine-week operating income was $18.4 million, or 7.4% of revenue, versus $17.1 million, or 7.3%. Net income was $11.5 million, versus $10.2 million.