Good morning, and thank you for joining us. This is Kevin Miller, Chief Financial Officer at RCM Technologies. I am joined today by Brad Vizi, RCM’s Executive Chairman. Our presentation in this call will contain forward-looking statements. The information contained in the forward-looking statements is based on our beliefs, estimates and assumptions and information currently available to us and these matters may materially change in the future. Many of these beliefs, estimates and assumptions are subject to rapid changes. For more information on our forward-looking statements and the risks, uncertainties and other factors to which they are subject, please see the periodic reports on Forms 10-K, 10-Q and 8-K that we file with the SEC as well as our press releases that we issue from time to time. I will now turn the call over to Brad Vizi, Executive Chairman, to provide an overview of RCM’s operating performance during the fourth quarter.

Thanks, Kevin. Our fourth quarter results serve as a nice bookend to 2021. As I reflect on our transformation plan dating back prior to the pandemic, I am proud of the team’s execution. The results speak for themselves broad-based strength across each of our divisions. Before we get into the numbers, I want to reflect on the year and why we are even more optimistic about the future. We entered 2021 with the foundational pillars in place to support RCM’s next wave of growth. 2020 was clearly a year of recovery. We refined our processes and focus, upgraded our leadership ranks and we’re opportunistic in deploying capital driven by our improved balance sheet. As a result, we entered 2021 in a position to capitalize on the foundation we built and worked to fortify through the pandemic. It was time to leverage the infrastructure that we had put in place and to tangibly demonstrate all the progress we have made and how it translates into material bottom line results. First, our refined focus and commitment to process led to numerous improvements across our business. Consistency and scalability are what we strive for. And over the course of 2021, we took the next steps in getting there. Our decision to sell Canadian Power Systems unit was the direct result of our desire to streamline our focus on the right end markets, the right clients and the right solutions. We believe simplifying our business will lead to greater consistency of focus. We also took tangible steps to ensure we can scale our next wave of growth will productively and efficiently even before. We augmented our commitment to our processes with investments in new technology. Our teams are upgrading our front-end and back-end systems that will translate that RCM into driving not only more…

Thanks, Brad. Regarding our consolidated results, revenue grew $19.4 million sequentially over Q3 2021 and $23.8 million on a year-over-year basis compared to Q4 2020. After removing the impact from our now exited Canada Power Systems Group, we grew by $27 million or 71% as compared to Q4 2020. It is worth reiterating the broad-based strength in revenue contributions we saw from each segment as they all meaningfully grew both sales and contribution operating profit sequentially and year-over-year. Gross profit expanded to $17.8 million, a 46% increase from Q3 2021 and a 66% increase from Q4 2020. Adjusted EBITDA in Q4 2021 was $5.3 million, representing a sequential increase of 192% and $4.6 million or 400% increase over Q4 2020 adjusted EBITDA. Our profitability metrics all demonstrated material improvement and illustrated the significant operating leverage we have in our model, despite the $2.5 million year-over-year increase in SG&A expense driven by the hiring of new staff and rewarding our employees for strong operational performance in 2021. Turning to our Healthcare segment. The group generated revenue of $34.8 million in Q4 2021, which represents an 87% increase on a year-over-year basis and a 77% increase sequentially. Performance within the Healthcare segment was broad-based. Our Life Sciences and Information Technology segment also performed well, with revenue and profitability, both up sequentially and year-over-year. On revenue, we generated $11.9 million in Q4 2021 compared to $8.2 million in Q4 2020 and $9.3 million in Q3 2021, growing 46% versus prior year’s performance and 27% sequentially. The level of client interest in our managed service solutions remains robust as the group’s leadership team continues to execute well on their transition to a stickier revenue model. Lastly, turning to our Engineering segment, we generated revenue of $18.3 million in Q4 2021, growing both sequentially and…

[Operator Instructions] And our first question is coming from Alex Rygiel from B. Riley. Alex, your line is now open.

Congratulations on a really strong quarter and year gentlemen. A couple of quick questions here. So first, can you quantify the share gain in some way within the specialty health care segment?

Hi, Alex. Though we can’t specifically quantify the share gain what I will say is just generally speaking, is we believe we’ve taken share in all three businesses with very specific displacement of incumbents. So health care is certainly a bright spot, but I wouldn’t necessarily limit the statement to health care.

And just to help us to sort of think about and model the health care segment, sort of going forward 12 months, can we use the fourth quarter as a good baseline for let’s just say sort of like 100% of activity level, everybody is back at work or is back to school. And sort of that’s kind of a normalized quarter and then layer on seasonality over the next four quarters and layer on kind of future growth or gains. Is that how we should think about this most recent fourth quarter? Is that a good baseline?

Yes. So though we don’t give guidance, what I will say is we certainly intend on growing the health care business. And there are a number of initiatives and programs in place that not only show promise, but frankly they’re crystallizing as we speak. So I wouldn’t necessarily point to this past quarter as being a static run rate. So if that answers your question without giving guidance.

No, that is helpful for sure. And then is there any chance you could update us on backlog or maybe sort of maybe talk about, how bid opportunities or some sort of backlog measure that you look at internally has maybe changed over the next 12 months and how that gives you good visibility into 2022?

Yes. Backlog is very strong. Activity has picked up markedly as we referenced in prior calls in all three of our Engineering businesses and that is converting to backlog. And again, the pipeline continues to refill. So ultimately, we expect good things going forward from our Engineering businesses.

Thank you very much.

Our next question is coming from Bill Sutherland with The Benchmark Company. Bill, your line is now open.

Thanks. Good morning guys. Tremendous job. So curious about what you’re seeing in terms of pricing across your three segments? And maybe I’m thinking particularly about health care, realizing your focus is not like the guys with big travel nurse businesses. But whether as you look forward, there’s any rate normalization that you think could be occurring this year.

Yes. No, that’s a good question, Bill. And I think you’ve been tracking the space. And I think there’s a perception that some of the elevated bided rates of late have been directly the result of COVID. But I would – we think about it a little bit differently. We simply respond to the environment, and that environment continues to be tight. So rates have been resilient. We anticipate them continuing to be resilient. That being said, we will react to the market. But we have not seen any material changes.

Okay. And then with all the opportunities on your plate, how are you thinking about your capital deployment strategy for this year?

Yes. You followed us for a while, Bill. We tend to be pretty balanced in our approach, as you know, whether it’s returning capital to shareholders via share buyback, dividend or opportunistically pursuing acquisitions. I’d say we’re getting to a point where our balance sheet gives us a great deal of flexibility moving forward, particularly in light of our EBITDA trajectory. So what I’ll say is we take a lot of pride in our capital allocation discipline and our track record. We’re going to continue to do that. And frankly, we look forward to being a very enviable position with respect to our ability to react to opportunities that we frankly haven’t been in the recent past. So we’re agnostic. We are going to allocate capital where we think the returns are. So while rewarding shareholders along the way, of course.

So growth will not diminish the recent return strategy you’ve had for shareholders?

We are comfortable with our capital structure. And again, we will balance flexibility of it with returning capital to shareholders as we’ve done historically.

Okay. Good. Kevin, just a couple of number questions. Noticeably, very strong gross margins in Engineering and IT in quarter. Should we think about those as sustainable? Were there any special factors?

Yes. No, I think you definitely should look at them as sustainable. I mean as you know, we’re going to have variability from quarter-to-quarter, right? That’s not going to change. But I think when you look at the range, like a range of where we were in the fourth quarter; I think that’s a pretty good range. If you sort of look at that compared to some other quarters. But there’s nothing going on in the fourth quarter margin that is unsustainable or a onetime event.

Okay. And then last – okay. And then the effective tax rate was much lower than that happened. Is there something in the quarter?

Yes. I mean – there’s a few things going on there, but we had some decent contribution from Serbia – we had a few adjustments in there as well. When you see the K, you’ll see the rate rec. But it’s – the tax rate is probably a little bit low in 2021 compared to where we’re going to see it going forward. I think if you’re assuming like maybe 28%, 28% to 28.5% is a safe number. Hopefully, we can beat that through tax planning and whatnot, but that’s probably a decent assumption for your model.

Okay. Well, I’ll follow up with you later, a few details. Thanks gentlemen, great job.

[Operator Instructions] There are no more questions in queue.

Thank you for attending RCM’s fourth quarter conference call. We look forward to our next update in May.

Ladies and gentlemen, this concludes your call. You may now disconnect.