RCM TECHNOLOGIES, INC. Segments Disclosure

14.	SEGMENT INFORMATION

 

The Company follows ASC 280, “Segment Reporting,” which establishes standards for companies to report information about operating segments, geographic areas and major customers. The accounting policies of each reportable segment are the same as those described in the summary of significant accounting policies (see Note 1 to the Company’s Consolidated Financial Statements).

 

The Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating Decision Makers (“CODMs”), who were Bradley Vizi, Chief Executive Officer, and Kevin Miller. Chief Financial Officer. The Company’s CODMs are responsible for making decisions regarding the Company’s business, including resource allocations and performance assessments based on historical and future segment revenue, operating expenses, and operating income (loss) before interest and taxes.

 

In the second quarter of fiscal 2025, the Company made certain revisions to the internal measurement of segment operating results for the purpose of evaluating segment performance and resource allocation. The revised segment reporting now presents corporate operating costs separately instead of allocating them to the operating segments. The revision was the result of a shift in the CODM’s more granular and independent focus on the now four segments. We have presented the revised segment results for both fiscal 2025 and the prior period on a comparable basis.

 

The following tables summarize the results of operations and total assets by segment provided to the CODMs. Segment operating income (loss) includes selling, general, and administrative expenses directly attributable to that segment. The following tables reflect the results of the reportable segments consistent with the Company’s management system. Please refer to the segment discussion of the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Annual Report on Form 10-K.

 

Fiscal Year Ended January 3, 2026		Specialty Health Care				Engineering				Life Sciences, Data & Solutions				Corporate				Total
Revenue		$	164,104			$	120,486			$	34,814			$	-			$	319,404
Cost of services			116,702				93,104				21,655				-				231,461
Gross profit			47,402				27,382				13,159				-				87,943
Selling, general and administrative			24,220				11,976				6,694				18,042				60,932
Depreciation and amortization of property and equipment			393				771				148				606				1,918
Operating income (loss)		$	22,789			$	14,635			$	6,317			$	(18,648	)		$	25,093
Total assets as of January 3, 2026		$	46,541			$	60,562			$	13,936			$	13,358			$	134,397
Property and equipment acquired		$	238			$	480			$	36			$	841			$	1,595

 

Fiscal Year Ended December 28, 2024		Specialty Health Care				Engineering				Life Sciences, Data & Solutions				Corporate				Total
Revenue		$	142,679			$	96,459			$	39,242			$	-			$	278,380
Cost of services			100,146				73,916				24,540				-				198,602
Gross profit			42,533				22,543				14,702				-				79,778
Selling, general and administrative			22,213				11,869				6,875				15,830				56,787
Depreciation and amortization of property and equipment			386				613				150				270				1,419
Amortization of acquired intangible assets			-				-				683				-				683
Potential stock issuance and financing transactions			-				-				-				323				323
Remeasurement of contingent consideration			-				-				(1,759	)			-				(1,759	)
Operating income (loss)		$	19,934			$	10,061			$	8,753			$	(16,423	)		$	22,325
Total assets as of December 28, 2024		$	43,180			$	52,160			$	22,210			$	14,527			$	132,077
Property and equipment acquired		$	296			$	691			$	28			$	1,557			$	2,572

 

The Company derives a majority of its revenue from offices in the United States. Revenue reported for each operating segment are all from external customers. The Company is domiciled in the United States and its segments operate in the United States, Canada, Germany, Philippines, Puerto Rico and Europe. The Company does not derive any revenue in the Philippines. Revenue by geographic area for the fiscal years ended January 3, 2026 and December 28, 2024 are as follows:

 

		Fiscal Year Ended
		January 3,				December 28,
		2026				2024
Revenue
United States		$	290,187			$	256,759
Canada			7,535				7,196
Puerto Rico			6,363				7,017
Europe			15,319				7,408
		$	319,404			$	278,380

 

Total assets by geographic area as of the reported periods are as follows:

 

		Fiscal Year Ended
		January 3,				December 28,
		2026				2024
Total Assets
United States		$	123,021			$	123,905
Canada			1,828				1,423
Puerto Rico			2,637				3,286
Europe			6,594				3,408
Philippines			317				55
		$	134,397			$	132,077