Resources Connection Reports Financial Results for Fourth Quarter and Full Fiscal Year 2025
– Revenue & Gross Margin Exceed High End of Outlook Range –
Fourth Quarter Fiscal 2025 Highlights Compared to Prior Year Quarter:
-
Revenue of
$139.3 million $148.2 million -
Same-day constant currency revenue, a non-GAAP measure, declined
11.4% -
Gross margin remained strong at
40.2% , consistent with the prior year quarter -
Selling, General and Administrative expenses (“SG&A”) of
$50.6 million $46.4 million $4.4 million -
Net loss of
$73.3 million 52.6% ), including a non-cash goodwill impairment charge of$69.0 million $10.5 million 7.1% ) -
GAAP diluted loss per common share of
$2.23 $0.31 -
Adjusted diluted earnings per common share, a non-GAAP measure, of
$0.16 $0.28 -
Adjusted EBITDA, a non-GAAP measure, of
$9.8 million 7.1% ) compared to$13.1 million 8.8% ) -
Cash dividends declared of
$0.07
Full Fiscal Year 2025 Highlights Compared to Prior Year:
-
Revenue of
$551.3 million $632.8 million -
Same-day constant currency revenue, a non-GAAP measure, declined
13.9% -
Gross margin of
37.6% compared to38.9% -
SG&A improved
3.3% to$202.0 million $208.9 million -
Net loss of
$191.8 million 34.8% ), including a non-cash goodwill impairment charge of$194.4 million $21.0 million 3.3% ) -
GAAP diluted loss per common share of
$5.80 $0.62 -
Adjusted diluted earnings per common share of
$0.23 $0.93 -
Adjusted EBITDA of
$23.5 million 4.3% ) compared to$51.5 million 8.1% ) -
Cash and cash equivalents of
$86.1 million $108.9 million
Management Commentary
“I want to thank our team for delivering results that exceeded the high end of our outlook for revenue and gross margin in this ongoing challenging global marketplace,” said Kate W. Duchene, Chief Executive Officer. “We delivered sequential revenue growth and improved our average bill rates across multiple segments of the business. We continued our efforts to improve the business for the long-term by focusing on cross sell execution to deliver highly flexible and high impact solutions to our clients while continuing to improve cost efficiency by leveraging our newly launched systems. Our teams remain dedicated to focusing on higher quality and larger sales opportunities as we continue to drive pipeline growth around the globe. Given the extended time to close new business, we are ensuring our client relationships remain close and trusted. Our client retention rates continue to be steady and strong. With our refreshed brand positioning and ongoing diversification strategy, we remain committed to unlocking future growth while continuing to create value for current clients and our shareholders.”
Fourth Quarter Fiscal 2025 Results
Revenue was
Gross margin remained strong at
SG&A for the fourth quarter of fiscal 2025 was
During the fourth quarter of fiscal 2025, the Company conducted a goodwill impairment analysis and recorded a non-cash impairment charge of
The fourth quarter of fiscal 2025 had an income tax expense of
Net loss was
Full Fiscal Year 2025 Results
Annual revenue of
Gross margin was
The Company’s continued focus on cost discipline supported SG&A of
During fiscal 2025, in light of the decline in the Company’s market capitalization, along with the slow recovery in the On-Demand, Consulting, and
The Company recorded an income tax benefit of
RESOURCES CONNECTION, INC. SUMMARY OF CONSOLIDATED FINANCIAL RESULTS (In thousands, except per share amounts) |
|||||||||||||||||||
|
Three Months Ended |
|
For the Years Ended |
||||||||||||||||
|
May 31, |
|
May 25, |
|
May 31, |
|
May 25, |
|
May 27, |
||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
||||||||||
Revenue |
$ |
139,340 |
|
|
$ |
148,198 |
|
|
$ |
551,331 |
|
|
$ |
632,801 |
|
|
$ |
775,643 |
|
Direct cost of services |
|
83,362 |
|
|
|
88,615 |
|
|
|
343,907 |
|
|
|
386,733 |
|
|
|
462,501 |
|
Gross profit |
|
55,978 |
|
|
|
59,583 |
|
|
|
207,424 |
|
|
|
246,068 |
|
|
|
313,142 |
|
Selling, general and administrative expenses |
|
50,620 |
|
|
|
46,350 |
|
|
|
202,024 |
|
|
|
208,864 |
|
|
|
228,842 |
|
Goodwill impairment |
|
69,032 |
|
|
|
— |
|
|
|
194,409 |
|
|
|
— |
|
|
|
2,955 |
|
Amortization expense |
|
1,419 |
|
|
|
1,330 |
|
|
|
5,880 |
|
|
|
5,378 |
|
|
|
5,018 |
|
Depreciation expense |
|
402 |
|
|
|
618 |
|
|
|
1,868 |
|
|
|
3,050 |
|
|
|
3,539 |
|
Income (loss) from operations |
|
(65,495 |
) |
|
|
11,285 |
|
|
|
(196,757 |
) |
|
|
28,776 |
|
|
|
72,788 |
|
Interest (income) expense, net |
|
(75 |
) |
|
|
(234 |
) |
|
|
(544 |
) |
|
|
(1,064 |
) |
|
|
552 |
|
Other (income) expense |
|
(88 |
) |
|
|
17 |
|
|
|
(138 |
) |
|
|
11 |
|
|
|
(382 |
) |
Income (loss) before income tax expense (benefit) |
|
(65,332 |
) |
|
|
11,502 |
|
|
|
(196,075 |
) |
|
|
29,829 |
|
|
|
72,618 |
|
Income tax expense (benefit) |
|
7,974 |
|
|
|
1,030 |
|
|
|
(4,295 |
) |
|
|
8,795 |
|
|
|
18,259 |
|
Net income (loss) |
$ |
(73,306 |
) |
|
$ |
10,472 |
|
|
$ |
(191,780 |
) |
|
$ |
21,034 |
|
|
$ |
54,359 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
(2.23 |
) |
|
$ |
0.31 |
|
|
$ |
(5.80 |
) |
|
$ |
0.63 |
|
|
$ |
1.63 |
|
Diluted |
$ |
(2.23 |
) |
|
$ |
0.31 |
|
|
$ |
(5.80 |
) |
|
$ |
0.62 |
|
|
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
32,875 |
|
|
|
33,497 |
|
|
|
33,063 |
|
|
|
33,445 |
|
|
|
33,407 |
|
Diluted |
|
32,875 |
|
|
|
33,725 |
|
|
|
33,063 |
|
|
|
33,895 |
|
|
|
34,185 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share |
$ |
0.07 |
|
|
$ |
0.14 |
|
|
$ |
0.49 |
|
|
$ |
0.56 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue by Segment |
|
|
|
|
|
|
|
|
|
||||||||||
On-Demand Talent |
$ |
52,962 |
|
|
$ |
59,515 |
|
|
$ |
205,976 |
|
|
$ |
272,600 |
|
|
$ |
372,679 |
|
Consulting |
|
50,950 |
|
|
|
56,236 |
|
|
|
219,215 |
|
|
|
227,967 |
|
|
|
259,946 |
|
|
|
21,342 |
|
|
|
19,507 |
|
|
|
77,602 |
|
|
|
84,207 |
|
|
|
93,166 |
|
Outsourced Services |
|
11,333 |
|
|
|
10,263 |
|
|
|
39,618 |
|
|
|
38,122 |
|
|
|
38,950 |
|
All Other |
|
2,753 |
|
|
|
2,677 |
|
|
|
8,920 |
|
|
|
9,905 |
|
|
|
10,902 |
|
Total consolidated revenue |
$ |
139,340 |
|
|
$ |
148,198 |
|
|
$ |
551,331 |
|
|
$ |
632,801 |
|
|
$ |
775,643 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividend |
|
|
|
|
|
|
|
|
|
||||||||||
Total cash dividends paid |
$ |
4,631 |
|
|
$ |
4,732 |
|
|
$ |
18,646 |
|
|
$ |
18,825 |
|
|
$ |
18,784 |
|
Conference Call Information
RGP will hold a conference call for analysts and investors at 5:00 p.m., ET, today, July 24, 2025. A live webcast of the call will be available on the Events section of the Company’s Investor Relations website. To access the call by phone, please go to this link (registration link), and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for 30 days by visiting the Events section of the Company’s Investor Relations website.
About RGP
RGP is a global professional services leader that helps businesses navigate complex challenges with flexible, high-impact solutions across Finance, HR, Operations, and Technology. With 2,300+ experts worldwide and decades of experience, we’re a trusted partner to the C-Suite—optimizing performance, accelerating transformation, and executing critical initiatives from strategy to automation and AI. Whether enterprises need embedded expertise, strategic consulting, or fully outsourced solutions, RGP is built to meet organizations where they are.
Based in
The Company is listed on the Nasdaq Global Select Market, the exchange’s highest tier by listing standards. To learn more about RGP, visit: http://www.rgp.com. (RGP-F)
Forward-Looking Statements
Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to expectations concerning matters that are not historical facts. Such forward-looking statements may be identified by words such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “forecast,” “future,” “intends,” “may,” “plans,” “potential,” “predicts,” “remain,” “should,” “strategy” or “will” or the negative of these terms or other comparable terminology. In this press release, such statements include statements regarding our expected recovery and growth and operational plans. Such statements and all phases of the Company’s operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, potential adverse effects to our and our clients’ liquidity and financial performances from bank failures or other events affecting financial institutions, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management or key sales professionals, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, our ability to realize the level of benefit that we expect from our restructuring initiatives, risks that our recent digital expansion and technology transformation efforts may not be successful, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities possible disruption of our business from our past and future acquisitions, the possibility that our recent rebranding efforts may not be successful, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or interpretations, the possible adverse effect on our business model from the reclassification of our independent contractors by foreign tax and regulatory authorities, the possible difficulty for a third party to acquire us and resulting depression of our stock price, the operating and financial restrictions from our credit facility, risks related to the variable rate of interest in our credit facility, the possible impact of activist shareholders, the possibility that we are unable to or elect not to pay our quarterly dividend payment, and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended May 31, 2025, which will be filed on or around July 25, 2025, and our other public filings made with the Securities and Exchange Commission (File No. 0-32113). Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or operating results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not intend, and undertakes no obligation, to update the forward-looking statements in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless required by law to do so.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to assess our financial and operating performance that are not defined by or calculated in accordance with accounting principles generally accepted in the
-
Same-day constant currency revenue is adjusted for the following items:
- Currency impact. In order to remove the impact of fluctuations in foreign currency exchange rates, the Company calculates same-day constant currency revenue, which represents the outcome that would have resulted had exchange rates in the current period been the same as those in effect in the comparable prior period.
- Business days impact. In order to remove the fluctuations caused by comparable periods having a different number of business days, the Company calculates same-day revenue as current period revenue (adjusted for currency impact) divided by the number of business days in the current period, multiplied by the number of business days in the comparable prior period. The number of business days in each respective period is provided in the “Number of Business Days” section of the “Reconciliation of GAAP to Non-GAAP Financial Measures” table below.
- EBITDA is calculated as net income (loss) before amortization expense, depreciation expense, interest and income taxes.
- Adjusted EBITDA is calculated as EBITDA excluding stock-based compensation expense, amortized Enterprise Resource Planning (“ERP”) system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, restructuring costs, and contingent consideration adjustments. We also present herein Adjusted EBITDA at the segment level as a measure used to assess the performance of our segments. Segment Adjusted EBITDA excludes certain shared corporate administrative costs that are not practical to allocate.
- Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue.
- Adjusted diluted earnings (loss) per common share is calculated as diluted earnings (loss) per common share, excluding the per share impact of stock-based compensation expense, amortized ERP system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, restructuring costs, contingent consideration adjustments, and adjusted for the related tax effects of these adjustments.
We believe the above-mentioned non-GAAP financial measures, which are used by management to assess the core performance of our Company, provide useful information and additional clarity of our operating results to our investors in their own evaluation of the core performance of our Company and facilitate a comparison of such performance from period to period. These are not measurements of financial performance or liquidity under GAAP and should not be considered in isolation or construed as substitutes for revenue, net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our revenue, profitability or liquidity. These measures should be considered in addition to, and not as a substitute for, revenue, net income, earnings per share, cash flows or other measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies, as other companies may calculate such financial results differently.
RESOURCES CONNECTION, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except number of business days)
Adjusted Revenue by Segment - Year-over-Year Comparison |
||||||||||||||||
|
Three Months Ended |
|||||||||||||||
|
May 31,
|
|
May 25,
|
|||||||||||||
|
(Unaudited) |
|
(Unaudited) |
|||||||||||||
|
As reported (GAAP) |
|
Currency impact |
|
Business days impact |
|
Same-day constant
|
|
As reported (GAAP) |
|||||||
On-Demand Talent |
$ |
52,962 |
|
$ |
298 |
|
|
$ |
(3,070 |
) |
|
$ |
50,190 |
|
$ |
59,515 |
Consulting |
|
50,950 |
|
|
264 |
|
|
|
(2,941 |
) |
|
|
48,273 |
|
|
56,236 |
|
|
21,342 |
|
|
(435 |
) |
|
|
(1,376 |
) |
|
|
19,531 |
|
|
19,507 |
Outsourced Services |
|
11,333 |
|
|
- |
|
|
|
(657 |
) |
|
|
10,676 |
|
|
10,263 |
All Other |
|
2,753 |
|
|
- |
|
|
|
(160 |
) |
|
|
2,593 |
|
|
2,677 |
Total Consolidated |
$ |
139,340 |
|
$ |
127 |
|
|
$ |
(8,204 |
) |
|
$ |
131,263 |
|
$ |
148,198 |
Adjusted Revenue by Segment - Year-over-Year Comparison |
|||||||||||||||
|
For the Years Ended |
||||||||||||||
|
May 31,
|
|
May 25,
|
||||||||||||
|
(Unaudited) |
|
(Unaudited) |
||||||||||||
|
As reported (GAAP) |
|
Currency impact |
|
Business days impact |
|
Same-day constant
|
|
As reported (GAAP) |
||||||
On-Demand Talent |
$ |
205,976 |
|
$ |
959 |
|
$ |
(3,231 |
) |
|
$ |
203,704 |
|
$ |
272,600 |
Consulting |
|
219,215 |
|
|
922 |
|
|
(3,492 |
) |
|
|
216,645 |
|
|
227,967 |
|
|
77,602 |
|
|
151 |
|
|
(1,214 |
) |
|
|
76,539 |
|
|
84,207 |
Outsourced Services |
|
39,618 |
|
|
- |
|
|
(621 |
) |
|
|
38,997 |
|
|
38,122 |
All Other |
|
8,920 |
|
|
- |
|
|
(140 |
) |
|
|
8,780 |
|
|
9,905 |
Total Consolidated |
$ |
551,331 |
|
$ |
2,032 |
|
$ |
(8,698 |
) |
|
$ |
544,665 |
|
$ |
632,801 |
|
Three Months Ended |
|
For the Years Ended |
||||
Number of Business Days |
May 31,
|
|
May 25,
|
|
May 31,
|
|
May 25,
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
On-Demand Talent (1) |
69 |
|
65 |
|
255 |
|
251 |
Consulting (1) |
69 |
|
65 |
|
255 |
|
251 |
|
66 |
|
62 |
|
254 |
|
250 |
Outsourced Services (1) |
69 |
|
65 |
|
255 |
|
251 |
All Other (1) |
69 |
|
65 |
|
255 |
|
251 |
(1) |
This represents the number of business days in the |
|
(2) |
The business days in international regions represents the weighted average number of business days. |
RESOURCES CONNECTION, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share amounts and percentages) |
|||||||||||||
|
Three Months Ended |
||||||||||||
|
May 31, |
|
% of |
|
May 25, |
|
% of |
||||||
Adjusted EBITDA |
|
2025 |
|
|
Revenue |
|
|
2024 |
|
|
Revenue |
||
|
(Unaudited) |
|
(Unaudited) |
||||||||||
Net income (loss) |
$ |
(73,306 |
) |
|
(52.6 |
)% |
|
$ |
10,472 |
|
|
7.1 |
% |
Adjustments: |
|
|
|
|
|
|
|
||||||
Amortization expense |
|
1,419 |
|
|
1.0 |
|
|
|
1,330 |
|
|
0.9 |
|
Depreciation expense |
|
402 |
|
|
0.3 |
|
|
|
618 |
|
|
0.4 |
|
Interest income, net |
|
(75 |
) |
|
(0.1 |
) |
|
|
(234 |
) |
|
(0.2 |
) |
Income tax (benefit) expense |
|
7,974 |
|
|
5.7 |
|
|
|
1,030 |
|
|
0.7 |
|
EBITDA |
|
(63,586 |
) |
|
(45.6 |
) |
|
|
13,216 |
|
|
8.9 |
|
Stock-based compensation expense |
|
1,337 |
|
|
1.0 |
|
|
|
1,483 |
|
|
1.0 |
|
Amortized ERP system costs (1) |
|
678 |
|
|
0.5 |
|
|
|
— |
|
|
— |
|
Technology transformation costs (2) |
|
— |
|
|
— |
|
|
|
1,914 |
|
|
1.3 |
|
Acquisition costs (3) |
|
465 |
|
|
0.3 |
|
|
|
688 |
|
|
0.5 |
|
Goodwill impairment (4) |
|
69,032 |
|
|
49.5 |
|
|
|
— |
|
|
— |
|
Restructuring costs (5) |
|
1,904 |
|
|
1.4 |
|
|
|
189 |
|
|
0.1 |
|
Contingent consideration adjustment (6) |
|
— |
|
|
— |
|
|
|
(4,400 |
) |
|
(3.0 |
) |
Adjusted EBITDA |
$ |
9,830 |
|
|
7.1 |
% |
|
$ |
13,090 |
|
|
8.8 |
% |
|
|
|
|
|
|
|
|
||||||
Adjusted Diluted Earnings per Common Share |
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per common share, as reported |
$ |
(2.23 |
) |
|
|
|
$ |
0.31 |
|
|
|
||
Stock-based compensation expense |
|
0.04 |
|
|
|
|
|
0.04 |
|
|
|
||
Amortized ERP system costs (1) |
|
0.02 |
|
|
|
|
|
— |
|
|
|
||
Technology transformation costs (2) |
|
— |
|
|
|
|
|
0.05 |
|
|
|
||
Acquisition costs (3) |
|
0.01 |
|
|
|
|
|
0.02 |
|
|
|
||
Goodwill impairment (4) |
|
2.10 |
|
|
|
|
|
— |
|
|
|
||
Restructuring costs (5) |
|
0.06 |
|
|
|
|
|
0.01 |
|
|
|
||
Contingent consideration adjustment (6) |
|
— |
|
|
|
|
|
(0.13 |
) |
|
|
||
Income tax impact of adjustments |
|
0.16 |
|
|
|
|
|
(0.02 |
) |
|
|
||
Adjusted diluted earnings per common share |
$ |
0.16 |
|
|
|
|
$ |
0.28 |
|
|
|
||
(1) |
Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within SG&A on the Consolidated Statement of Operations. |
|
(2) |
Technology transformation costs represent costs included in net income related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized. |
|
(3) |
Acquisition costs primarily represent costs included in net income (loss) related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. |
|
(4) |
Goodwill impairment charge recognized during the three months ended May 31, 2025 was related to the Consulting segment. |
|
(5) |
Restructuring costs during the three months ended May 31, 2025 related to the Company's global cost reduction plan, including a reduction in force intended to reduce costs and streamline operations (the “2025 Restructuring Plan”), which was authorized in December 2024 and May 2025. Restructuring costs during the three months ended May 25, 2024 related to Company's cost reduction plan, including a reduction in force (the “U.S. Restructuring Plan”), which was authorized in October 2024, and was substantially completed during fiscal 2024. |
|
(6) |
Contingent consideration adjustment related to the remeasurement of contingent liabilities from the CloudGo acquisition. |
RESOURCES CONNECTION, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share amounts and percentages) |
||||||||||||||||||||
|
For the Years Ended |
|||||||||||||||||||
|
May 31, |
|
% of |
|
May 25, |
|
% of |
|
May 27, |
|
% of |
|||||||||
Adjusted EBITDA |
|
2025 |
|
|
Revenue |
|
|
2024 |
|
|
Revenue |
|
|
2023 |
|
|
Revenue |
|||
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|||||||||||||||
Net income (loss) |
$ |
(191,780 |
) |
|
(34.8 |
)% |
|
$ |
21,034 |
|
|
3.3 |
% |
|
$ |
54,359 |
|
|
7.0 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortization expense |
|
5,880 |
|
|
1.1 |
|
|
|
5,378 |
|
|
0.9 |
|
|
|
5,018 |
|
|
0.6 |
|
Depreciation expense |
|
1,868 |
|
|
0.3 |
|
|
|
3,050 |
|
|
0.5 |
|
|
|
3,539 |
|
|
0.4 |
|
Interest (income) expense, net |
|
(544 |
) |
|
(0.1 |
) |
|
|
(1,064 |
) |
|
(0.2 |
) |
|
|
552 |
|
|
0.1 |
|
Income tax expense (benefit) |
|
(4,295 |
) |
|
(0.8 |
) |
|
|
8,795 |
|
|
1.4 |
|
|
|
18,259 |
|
|
2.4 |
|
EBITDA |
|
(188,871 |
) |
|
(34.3 |
) |
|
|
37,193 |
|
|
5.9 |
|
|
|
81,727 |
|
|
10.5 |
|
Stock-based compensation expense |
|
6,754 |
|
|
1.2 |
|
|
|
5,732 |
|
|
0.9 |
|
|
|
9,521 |
|
|
1.2 |
|
Amortized ERP system costs (1) |
|
1,287 |
|
|
0.2 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Technology transformation costs (2) |
|
5,474 |
|
|
1.0 |
|
|
|
6,901 |
|
|
1.1 |
|
|
|
6,355 |
|
|
0.8 |
|
Acquisition costs (3) |
|
2,763 |
|
|
0.5 |
|
|
|
1,970 |
|
|
0.3 |
|
|
|
— |
|
|
— |
|
Goodwill impairment (4) |
|
194,409 |
|
|
35.3 |
|
|
|
— |
|
|
— |
|
|
|
2,955 |
|
|
0.4 |
|
Gain on sale of assets (5) |
|
(3,420 |
) |
|
(0.6 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Restructuring costs (6) |
|
5,061 |
|
|
0.9 |
|
|
|
4,087 |
|
|
0.6 |
|
|
|
(364 |
) |
|
— |
|
Contingent consideration adjustment (7) |
|
— |
|
|
— |
|
|
|
(4,400 |
) |
|
(0.7 |
) |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
$ |
23,457 |
|
|
4.3 |
% |
|
$ |
51,483 |
|
|
8.1 |
% |
|
$ |
100,194 |
|
|
12.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted Diluted Earnings per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings (loss) per common share, as reported |
$ |
(5.80 |
) |
|
|
|
$ |
0.62 |
|
|
|
|
$ |
1.59 |
|
|
|
|||
Stock-based compensation expense |
|
0.20 |
|
|
|
|
|
0.17 |
|
|
|
|
|
0.28 |
|
|
|
|||
Amortized ERP system costs (1) |
|
0.04 |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|||
Technology transformation costs (2) |
|
0.17 |
|
|
|
|
|
0.20 |
|
|
|
|
|
0.19 |
|
|
|
|||
Acquisition costs (3) |
|
0.08 |
|
|
|
|
|
0.06 |
|
|
|
|
|
— |
|
|
|
|||
Goodwill impairment (4) |
|
5.88 |
|
|
|
|
|
— |
|
|
|
|
|
0.09 |
|
|
|
|||
Gain on sale of assets (5) |
|
(0.10 |
) |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|||
Restructuring costs (6) |
|
0.15 |
|
|
|
|
|
0.12 |
|
|
|
|
|
(0.01 |
) |
|
|
|||
Contingent consideration adjustment (7) |
|
— |
|
|
|
|
|
(0.13 |
) |
|
|
|
|
— |
|
|
|
|||
Income tax impact of adjustments |
|
(0.39 |
) |
|
|
|
|
(0.11 |
) |
|
|
|
|
(0.14 |
) |
|
|
|||
Adjusted diluted earnings per common share |
$ |
0.23 |
|
|
|
|
$ |
0.93 |
|
|
|
|
$ |
2.00 |
|
|
|
|||
(1) |
Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within SG&A on the Consolidated Statement of Operations. |
|
(2) |
Technology transformation costs represent costs included in net income (loss) related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized. |
|
(3) |
Acquisition costs primarily represent costs included in net income (loss) related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. |
|
(4) |
Goodwill impairment charge recognized during the year ended May 31, 2025 was related to the On-Demand Talent, Consulting, and |
|
(5) |
Gain on sale of assets was related to the Company’s sale of its Irvine office building, which was completed in August 2024. |
|
(6) |
Restructuring costs for the year ended May 31, 2025 related to the 2025 Restructuring Plan, which was authorized in December 2024 and May 2025. Restructuring costs for the year ended May 25, 2024 related to |
|
(7) |
Contingent consideration adjustment related to the remeasurement of contingent liabilities related to the CloudGo acquisition. |
Segment Results
During the first quarter of fiscal 2025, the Company identified the following newly defined operating segments:
- On-Demand Talent – this segment provides businesses with a go-to source for bringing in experts when they need them.
- Consulting – this segment drives transformation process across people, processes and technology across domain areas including finance, technology and digital, risk and compliance and supply chain transformation.
-
Europe &Asia Pacific – is a geographically defined segment that offers both on-demand and consulting services (excluding the digital consulting business, which is included in our Consulting segment) to clients throughoutEurope andAsia Pacific . - Outsourced Services – operating under the Countsy by RGP™ brand, this segment offers finance, accounting and human resource services provided to startups, spinouts and scaleups enterprises, utilizing a technology platform and fractional team.
- Sitrick – a crisis communications and public relations firm that provides corporate, financial, transactional and crisis communication and management services.
The Company's reportable segments are comprised of On-Demand, Consulting, Outsourced Services, and
RESOURCES CONNECTION, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except for percentage) |
|||||||||||||||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||||||||||
|
May 31,
|
|
% of Revenue (1) |
|
May 25,
|
|
% of Revenue (1) |
|
May 31,
|
|
% of Revenue (1) |
|
May 25,
|
|
% of Revenue (1) |
||||||||||||
Adjusted EBITDA: |
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||||||||||||||||||
On-Demand Talent |
$ |
6,385 |
|
|
12.1 |
% |
|
$ |
7,113 |
|
|
12.0 |
% |
|
$ |
17,116 |
|
|
8.3 |
% |
|
$ |
31,673 |
|
|
11.6 |
% |
Consulting |
|
8,328 |
|
|
16.3 |
% |
|
|
10,194 |
|
|
18.1 |
% |
|
|
31,718 |
|
|
14.5 |
% |
|
|
38,420 |
|
|
16.9 |
% |
|
|
1,930 |
|
|
9.0 |
% |
|
|
542 |
|
|
2.8 |
% |
|
|
4,478 |
|
|
5.8 |
% |
|
|
5,289 |
|
|
6.3 |
% |
Outsourced Services |
|
3,148 |
|
|
27.8 |
% |
|
|
2,738 |
|
|
26.7 |
% |
|
|
7,581 |
|
|
19.1 |
% |
|
|
7,641 |
|
|
20.0 |
% |
All Other |
|
(118 |
) |
|
(4.3 |
)% |
|
|
32 |
|
|
1.2 |
% |
|
|
(1,838 |
) |
|
(20.6 |
)% |
|
|
(675 |
) |
|
(6.8 |
)% |
Unallocated items (2) |
|
(9,843 |
) |
|
|
|
|
(7,529 |
) |
|
|
|
|
(35,598 |
) |
|
|
|
|
(30,865 |
) |
|
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock-based compensation expense |
|
(1,337 |
) |
|
|
|
|
(1,483 |
) |
|
|
|
|
(6,754 |
) |
|
|
|
|
(5,732 |
) |
|
|
||||
Amortized ERP system costs (3) |
|
(678 |
) |
|
|
|
|
— |
|
|
|
|
|
(1,287 |
) |
|
|
|
|
— |
|
|
|
||||
Technology transformation costs (4) |
|
— |
|
|
|
|
|
(1,914 |
) |
|
|
|
|
(5,474 |
) |
|
|
|
|
(6,901 |
) |
|
|
||||
Acquisition costs (5) |
|
(465 |
) |
|
|
|
|
(688 |
) |
|
|
|
|
(2,763 |
) |
|
|
|
|
(1,970 |
) |
|
|
||||
Goodwill impairment (6) |
|
(69,032 |
) |
|
|
|
|
— |
|
|
|
|
|
(194,409 |
) |
|
|
|
|
— |
|
|
|
||||
Gain on sale of assets (7) |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
3,420 |
|
|
|
|
|
— |
|
|
|
||||
Restructuring cost (8) |
|
(1,904 |
) |
|
|
|
|
(189 |
) |
|
|
|
|
(5,061 |
) |
|
|
|
|
(4,087 |
) |
|
|
||||
Amortization expense |
|
(1,419 |
) |
|
|
|
|
(1,330 |
) |
|
|
|
|
(5,880 |
) |
|
|
|
|
(5,378 |
) |
|
|
||||
Depreciation expense |
|
(402 |
) |
|
|
|
|
(618 |
) |
|
|
|
|
(1,868 |
) |
|
|
|
|
(3,050 |
) |
|
|
||||
Contingent consideration adjustment |
|
— |
|
|
|
|
|
4,400 |
|
|
|
|
|
— |
|
|
|
|
|
4,400 |
|
|
|
||||
Interest income, net |
|
75 |
|
|
|
|
|
234 |
|
|
|
|
|
544 |
|
|
|
|
|
1,064 |
|
|
|
||||
Income (loss) before income tax expense (benefit) |
|
(65,332 |
) |
|
|
|
|
11,502 |
|
|
|
|
|
(196,075 |
) |
|
|
|
|
29,829 |
|
|
|
||||
Income tax expense (benefit) |
|
7,974 |
|
|
|
|
|
1,030 |
|
|
|
|
|
(4,295 |
) |
|
|
|
|
8,795 |
|
|
|
||||
Net income (loss) |
$ |
(73,306 |
) |
|
|
|
$ |
10,472 |
|
|
|
|
$ |
(191,780 |
) |
|
|
|
$ |
21,034 |
|
|
|
||||
(1) |
Segment Adjusted EBITDA Margin is calculated by dividing segment Adjusted EBITDA by segment revenue. |
|
(2) |
Unallocated items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments. |
|
(3) |
Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within SG&A on the Consolidated Statement of Operations. |
|
(4) |
Technology transformation costs represent costs included in net income (loss) related to our initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized. |
|
(5) |
Acquisition costs primarily represent costs included in net income (loss) related to our business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. |
|
(6) |
Goodwill impairment charges recognized during the three months ended May 31, 2025 was related to the Consulting segment. Goodwill impairment charges recognized during year ended May 31, 2025 was related to the On-Demand Talent, Consulting, and |
|
(7) |
Gain on sale of assets was related to the Company’s sale of its Irvine office building, which was completed in August 2024. |
|
(8) |
Restructuring costs for the year ended May 31, 2025 related to the 2025 Restructuring Plan, which was authorized in December 2024 and May 2025. Restructuring costs for the year ended May 25, 2024 related to |
The following table discloses the Company's average bill rate by segment for the last five quarters ended:
|
May 31,
|
|
February 22,
|
|
November 23,
|
|
August 24,
|
|
May 25,
|
|||||
Average bill rate (1): |
(Unaudited) |
|||||||||||||
Consolidated bill rate |
$ |
125 |
|
$ |
123 |
|
$ |
123 |
|
$ |
118 |
|
$ |
120 |
On-Demand Talent |
$ |
143 |
|
$ |
140 |
|
$ |
140 |
|
$ |
140 |
|
$ |
142 |
Consulting |
$ |
158 |
|
$ |
159 |
|
$ |
154 |
|
$ |
145 |
|
$ |
142 |
|
$ |
64 |
|
$ |
59 |
|
$ |
59 |
|
$ |
56 |
|
$ |
58 |
Outsourced Services |
$ |
140 |
|
$ |
137 |
|
$ |
140 |
|
$ |
139 |
|
$ |
142 |
(1) |
Average bill rates are calculated by dividing total revenue by the total number of billable hours. |
RESOURCES CONNECTION, INC. SELECTED BALANCE SHEET, CASH FLOW AND OTHER INFORMATION (In thousands, except consultant headcount and average rates) |
|||||||||
|
May 31, |
|
May 25, |
||||||
SELECTED BALANCE SHEET INFORMATION: |
|
2025 |
|
|
|
2024 |
|
||
|
(Unaudited) |
|
|
|
|||||
Cash and cash equivalents |
$ |
86,147 |
|
|
$ |
108,892 |
|
||
Trade accounts receivable, net of allowance for credit losses |
$ |
99,210 |
|
|
$ |
108,515 |
|
||
Total assets |
$ |
304,688 |
|
|
$ |
510,914 |
|
||
Current liabilities |
$ |
75,402 |
|
|
$ |
72,433 |
|
||
Long-term debt |
$ |
— |
|
|
$ |
— |
|
||
Total liabilities |
$ |
97,607 |
|
|
$ |
92,151 |
|
||
Total stockholders’ equity |
$ |
207,081 |
|
|
$ |
418,763 |
|
||
|
|
|
|
|
|
||||
|
For the Years Ended |
||||||||
|
May 31, |
|
May 25, |
||||||
SELECTED CASH FLOW INFORMATION: |
|
2025 |
|
|
|
2024 |
|
||
|
(Unaudited) |
|
|
||||||
Cash flow -- operating activities |
$ |
18,899 |
|
|
$ |
21,919 |
|
||
Cash flow -- investing activities |
$ |
(13,571 |
) |
|
$ |
(8,554 |
) |
||
Cash flow -- financing activities |
$ |
(27,731 |
) |
|
$ |
(20,709 |
) |
||
|
|
|
|
|
|
||||
|
Three Months Ended |
||||||||
|
May 31, |
|
May 25, |
||||||
SELECTED OTHER INFORMATION: |
|
2025 |
|
|
|
2024 |
|
||
|
(Unaudited) |
|
(Unaudited) |
||||||
Consultant headcount, end of period |
|
|
2,368 |
|
|
|
|
2,585 |
|
Average bill rate (1) |
$ |
125 |
|
|
$ |
120 |
|
||
Average pay rate (1) |
$ |
59 |
|
|
$ |
57 |
|
||
Common shares outstanding, end of period |
|
|
33,075 |
|
|
|
|
33,556 |
|
(1) |
Rates represent the weighted average bill rates and pay rates across the countries in which we operate. Such weighted average rates are impacted by the mix of our business across the geographies as well as fluctuations in currency rates. The constant currency average bill and pay rates noted immediately above are calculated using the same exchange rates in the fourth quarter of fiscal 2024. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250724142632/en/
Analyst Contact:
Jennifer Ryu
Chief Financial Officer
(US+) 1-714-430-6500
jennifer.ryu@rgp.com
Media Contact:
Pat Burek
Financial Profiles
(US+) 1-310-622-8244
pburek@finprofiles.com
Source: Resources Connection, Inc.
