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RCM Technologies (RCMT): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q2 2026, to Jul 4, 2026, filed Aug 13, 2026; rules v1.1
RCM Technologies (RCMT): 2 rules of 10 triggered on the filings to Jul 4, 2026: FCF growth = the business improved; adjusted profit = economic profit; 4 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
FCF growth = the business improved Triggered · severity high · confidence medium
Free cash flow rose $14M (+383%), from $4M to $17M, but working capital released $15M more cash than the year before and capital expenditure fell by $977K: more than the whole increase came from sources that need not repeat. Operating cash flow before working capital fell by $2M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
Adjusted profit = economic profit Triggered · severity medium · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 23% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
Innocent reading: A genuine one-off this year (an impairment, a settlement) that happens to span several quarters.
Every rule
A01 FCF growth = the business improved Triggered severity high · confidence medium
Free cash flow rose $14M (+383%), from $4M to $17M, but working capital released $15M more cash than the year before and capital expenditure fell by $977K: more than the whole increase came from sources that need not repeat. Operating cash flow before working capital fell by $2M.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $6M |
| Operating cash flow | $19M |
| Capex, year before | $3M |
| Capex | $2M |
| Free cash flow, year before | $4M |
| Free cash flow | $17M |
| Change in FCF | $14M |
| Change in capex | −$977K |
| Working capital: change in its cash contribution | $15M |
| Of which: capex cut | $977K |
| Of which: working capital released | $15M |
| Share of the increase that need not repeat | +115.0% |
| Operating cash flow before working capital: change | -2068000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 1.2% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $4M |
| Revenue | $319M |
| SBC / revenue | +1.2% |
| Buybacks | $7M |
| Buybacks / SBC | 2.0 |
| Diluted shares, year before | 7.9M shares |
| Diluted shares | 7.6M shares |
| Diluted shares: change | -3.8% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Insufficient data
fewer than five quarters with receivables and revenue on file (a year-over-year comparison needs five)
B08 Adjusted profit = economic profit Triggered severity medium · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 23% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-09-30 / 0.42 / 0.3 / 0.286; 2026-03-31 / 0.69 / 0.52 / 0.246; 2026-06-30 / 0.82 / 0.68 / 0.171 |
| Quarters with adjusted ≥ 10% above GAAP | 3 |
| Quarters compared | 3 |
| Latest gap | +17.1% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-09-30 (adjusted 0.42 vs GAAP 0.30) · 2026-03-31 (adjusted 0.69 vs GAAP 0.52) · 2026-06-30 (adjusted 0.82 vs GAAP 0.68)
What would explain it innocently
- A genuine one-off this year (an impairment, a settlement) that happens to span several quarters
- Amortisation of acquired intangibles, which many investors also exclude by choice
- The analysts' 'actual' is not the company's own adjusted figure
What to look for in the filing
- The reconciliation table in the earnings release: which items, how much, how often
- Whether the same items were excluded in earlier years
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 36% and net income rose 29% in Q2 2026; the share count fell 4.6%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q2 2026 |
| Quarter before | Q2 2025 |
| EPS, year before | $0.50 |
| EPS | $0.68 |
| Net income, year before | $4M |
| Net income | $5M |
| Diluted shares, year before | 7.5M shares |
| Diluted shares | 7.2M shares |
| EPS growth | +35.9% |
| Net income growth | +29.5% |
| Diluted shares: change | -4.7% |
| eps from profit | $0.15 |
| eps from share count | $0.03 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q2 2026 (net income, diluted shares, EPS) · Q2 2025 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → RCM Technologies: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.