Release Date: March 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you explain the unusually high tax rate observed this quarter? A: Kevin Miller, CFO, explained that the effective tax rate for the year was 34%, which is higher than usual due to permanent differences affecting deferred tax liabilities. This does not impact cash taxes but affects GAAP taxes. The normal tax rate is expected to be between 26% and 29% in the future, with an effective rate likely below 30%.
Q: What were the specific costs impacting the engineering segment's performance? A: Kevin Miller, CFO, noted that two main issues affected the engineering segment: a canceled industrial process equipment order and significant rework on a large aerospace project. These issues resulted in approximately $900,000 in reduced gross profit due to lower revenue and increased direct costs.
Q: Was the canceled order in the engineering segment related to any political changes or the recent election? A: Kevin Miller, CFO, clarified that the canceled order was not related to political factors but was a specific issue with a particular client.
Q: Are there any anticipated impacts from government-related changes or headlines on RCM's business? A: Kevin Miller, CFO, and Bradley Vizi, Executive Chairman, stated that there are no direct impacts expected from government changes. While broader IT environments might be affected, RCM's work as a subcontractor in aerospace is not anticipated to face major impacts.
Q: What are the expectations for growth in operating income, considering the one-time charges? A: Kevin Miller, CFO, mentioned that absent the one-time charges, operating income would have grown over 12%. The company aims for at least low double-digit growth in adjusted EBITDA each quarter in 2025, considering any quarter without such growth as a failure.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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