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Resources Connection, Inc. Reports Second Quarter Results for Fiscal 2020

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Second Quarter Fiscal 2020 Highlights:

  • Revenue $184.5 million, down 2.3% from prior year quarter, up 7.1% sequentially
  • Gross margin percentage of 40.3%, an improvement of 140 basis points from prior year quarter
  • SG&A as a percent of revenue improves 400 basis points sequentially
  • Net income of $12.3 million, up 16.8% from $10.6 million in prior year quarter
  • Diluted earnings per common share of $0.38, up 15.2% from $0.33 in prior year quarter
  • Adjusted EBITDA increases to $22.7 million compared to $20.0 million in prior year quarter
  • Adjusted EBITDA margin improves by 170 basis points to 12.3% compared to prior year quarter
  • Cash dividends declared of $0.14 per share

Resources Connection, Inc. (NASDAQ:RECN), a multinational business consulting firm, operating as Resources Global Professionals (the "Company" or "RGP"), today announced its financial results for the second quarter ended November 23, 2019.

Management Commentary

"We experienced an improvement in revenue in North America this quarter and modest strengthening in Europe – both good developments since the previous quarter," said Kate W. Duchene, chief executive officer. "Despite the slight revenue dip year-over-year, we are actively managing the business to deliver more profit through gross margin improvement and lower SG&A. The pipeline is stronger heading into Q3 than it has been in 12 months and while year-over-year revenue is a tough comparable because of the peak of lease accounting project revenue in Q2 and Q3 last year, we are replacing that revenue stream with other opportunities, particularly in our Strategic Client Program with program and project management."

RESOURCES CONNECTION, INC.

SUMMARY OF CONSOLIDATED FINANCIAL RESULTS

(Amounts in thousands, except percentages and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

November 23,

 

 

August 24,

 

 

November 24,

 

 

November 23,

 

 

November 24,

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

As reported (GAAP)

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

152,422

 

 

$

140,376

 

 

$

153,823

 

 

$

292,798

 

 

$

299,994

 

Asia Pacific

 

12,716

 

 

 

13,086

 

 

 

11,813

 

 

 

25,802

 

 

 

23,516

 

Europe

 

19,369

 

 

 

18,763

 

 

 

23,163

 

 

 

38,132

 

 

 

43,847

 

Total revenue

$

184,507

 

 

$

172,225

 

 

$

188,799

 

 

$

356,732

 

 

$

367,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

$

74,377

 

 

$

67,503

 

 

$

73,421

 

 

$

141,880

 

 

$

141,572

 

Selling, general and administrative expenses

$

53,755

 

 

$

56,978

 

 

$

54,959

 

 

$

110,733

 

 

$

111,325

 

Income before provision for income taxes

$

17,674

 

 

$

7,580

 

 

$

15,705

 

 

$

25,254

 

 

$

24,940

 

Net income

$

12,337

 

 

$

4,939

 

 

$

10,564

 

 

$

17,276

 

 

$

16,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

30

%

 

 

35

%

 

 

33

%

 

 

32

%

 

 

35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

0.38

 

 

$

0.15

 

 

$

0.33

 

 

$

0.54

 

 

$

0.50

 

Cash dividends:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per common share declared

$

0.14

 

 

$

0.14

 

 

$

0.13

 

 

$

0.28

 

 

$

0.26

 

Total cash dividends paid

$

4,475

 

 

$

4,106

 

 

$

4,095

 

 

$

8,581

 

 

$

7,887

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

 

November 23,

 

 

November 24,

 

 

November 23,

 

 

November 24,

 

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As adjusted (non-GAAP) (4)

 

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

Constant currency revenue (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

$

152,446

 

 

$

153,823

 

 

$

292,825

 

 

$

299,994

 

Asia Pacific

 

 

 

 

12,652

 

 

 

11,813

 

 

 

25,879

 

 

 

23,516

 

Europe

 

 

 

 

20,122

 

 

 

23,163

 

 

 

39,667

 

 

 

43,847

 

Total constant currency revenue

 

 

 

$

185,220

 

 

$

188,799

 

 

$

358,371

 

 

$

367,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic revenue

 

 

 

 

 

 

 

 

 

 

 

 

North America (2)

 

 

 

$

146,634

 

 

$

153,823

 

 

$

285,614

 

 

$

299,994

 

Asia Pacific

 

 

 

 

12,716

 

 

 

11,813

 

 

 

25,802

 

 

 

23,516

 

Europe (3)

 

 

 

 

19,045

 

 

 

19,130

 

 

 

35,915

 

 

 

36,740

 

Consolidated (2)(3)

 

 

 

$

178,395

 

 

$

184,766

 

 

$

347,331

 

 

$

360,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant currency organic revenue (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

$

146,658

 

 

$

153,823

 

 

$

285,641

 

 

$

299,994

 

Asia Pacific

 

 

 

 

12,652

 

 

 

11,813

 

 

 

25,879

 

 

 

23,516

 

Europe

 

 

 

 

19,774

 

 

 

19,130

 

 

 

37,305

 

 

 

36,740

 

Consolidated

 

 

 

$

179,084

 

 

$

184,766

 

 

$

348,825

 

 

$

360,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash tax rate

 

 

 

 

29

%

 

 

29

%

 

 

29

%

 

 

30

%

Adjusted net income

 

 

 

$

12,493

 

 

$

11,119

 

 

$

17,808

 

 

$

17,408

 

Adjusted diluted EPS

 

 

 

$

0.39

 

 

$

0.34

 

 

$

0.55

 

 

$

0.54

 

Adjusted EBITDA

 

 

 

$

22,671

 

 

$

19,984

 

 

$

34,580

 

 

$

33,227

 

(1) Revenue and constant currency organic revenue, for the three and six months ended November 23, 2019 are measured on a constant currency basis while the comparable revenue for the three and six months ended November 24, 2018 is measured under GAAP. Constant currency revenue amounts represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period.

(2) Veracity was acquired on July 31, 2019. Both the three month and six month periods ended November 23, 2019 are shown without revenue from Veracity to provide comparability to the same periods in fiscal 2019. See Reconciliation of GAAP to Non-GAAP financial measure below.

(3) We exited the Nordics and Belgium markets beginning second quarter of fiscal 2020. Results from the Nordics and Belgium are excluded from all periods presented to provide comparability. See Reconciliation of GAAP to Non-GAAP financial measure below.

(4) See definitions of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP financial measures below.

Second Quarter Fiscal 2020

Revenue for the second quarter of fiscal 2020 decreased 2.3% compared to the second quarter of fiscal 2019 and increased 7.1% as compared to the first quarter of fiscal 2020. On a constant currency basis, revenue decreased 1.9% from the second quarter of fiscal 2019 and increased 7.3% from the first quarter of fiscal 2020. Revenue in the second quarter of fiscal 2020 included $5.8 million of revenue attributable to Veracity. Excluding the impact of the Veracity acquisition and the dispositions in fiscal 2020, revenue decreased $6.4 million, or 3.4% compared to the prior year quarter (3.1% on a constant currency basis). The decrease in revenue compared to the second quarter of fiscal 2019 reflected the impact of the wind-down of lease accounting implementation projects, partially offset by a favorable impact due to the timing of the Thanksgiving holidays.

Revenue increased sequentially reflecting a full quarter of revenue from Veracity, active revenue pipeline management and business development coupled with the impact of fewer holidays in the U.S. as well as a favorable seasonal impact (second quarter of fiscal 2020 included only Labor Day while the first quarter of fiscal 2020 included Memorial Day and July 4th holidays in the U.S. and summer holiday breaks taken by our consultants).

Gross margin for the second quarter was 40.3%, increasing 140 basis points from the second quarter of fiscal 2019, and increasing 110 basis points sequentially. The year-over-year increase is related primarily to improved bill/pay ratio as well as a decrease in holiday pay for consultants in the U.S. (second quarter of fiscal 2020 included only Labor Day while the second quarter of fiscal 2019 included Labor Day and Thanksgiving).

The sequential quarter improvement in gross margin is primarily due to a decrease in holiday pay for consultants in the U.S. as a result of fewer holidays and lower payroll taxes.

SG&A was $53.8 million, or 29.1% of revenue for the second quarter of fiscal 2020 and $55.0 million, or 29.1% of revenue for the second quarter of fiscal 2019. The year-over-year dollar decrease is attributable primarily to a decrease in incentive compensation as a result of lower revenue in the second quarter of fiscal 2020, lower costs associated with business expenses as we continue to manage discretionary spend closely and lower severance expense, partially offset by an increase in payroll and benefit costs due to additional headcount related to project delivery and digital transformation efforts, including Veracity.

Sequentially, SG&A as a percentage of revenue decreased by 400 basis points from 33.1% in the first quarter of fiscal 2020. SG&A improved significantly primarily due to tighter management of discretionary spending as well as fewer one-time costs in the second quarter of fiscal 2020 compared to the first quarter of fiscal 2020 which included acquisition costs related to Veracity and severance and other costs in connection with the exit activities in Europe.

First Half Fiscal 2020

Revenue for the first half of fiscal 2020 decreased 2.9% compared to the prior year period. On a constant currency basis, revenue decreased 2.4%. Revenue in the first half of fiscal 2020 included $7.2 million of revenue in North America attributable to Veracity. Excluding the impact of both the Veracity acquisition and the dispositions, revenue decreased $12.9 million, or 3.6% (3.2% constant currency), compared to the prior year period. The decrease in revenue on a comparable basis reflected the impact of the wind-down of lease accounting implementation projects as well as the completion of other large projects.

Gross margin for the first half of fiscal 2020 was 39.8%, increasing 130 basis points from first half of fiscal 2019. The year-over-year improvement is related primarily to an improved bill/pay ratio as well as a decrease in holiday pay for consultants due to fewer holidays in the U.S.

SG&A was $110.7 million, or 31.0% of revenue for the first half of fiscal 2020 and $111.3 million, or 30.3% of revenue for the first half of fiscal 2019. The year-over-year dollar decrease is primarily attributable to a decrease in incentive compensation expense as a result of lower revenue, lower costs associated with transformation and system implementation and business expenses, partially offset by an increase in acquisition costs as well as payroll and benefits due to additional headcount related to project delivery and digital transformation efforts, including Veracity.

For all periods presented, the Company is unable to benefit from, or has limitations on the benefit of, tax losses in certain foreign jurisdictions. To a lesser extent, the accounting treatment under GAAP for the cost associated with unexercised expiring stock options and shares purchased through the Employee Stock Purchase Plan has caused volatility in the Company's effective tax rate.

Conference Call Information

RGP will hold a conference call for analysts and investors at 5:00 p.m., ET today, January 2, 2020. This conference call will be available for listening via a webcast on the Company's website: http://www.rgp.com. An audio replay of the conference call will be available through January 9, 2020 at 855-859-2056. The conference ID number for the replay is 5984947. The call will also be archived on the RGP website for 30 days.

About RGP

RGP is a global consulting firm that enables rapid business outcomes by bringing together the right people to create transformative change. As a human capital partner for our clients, we specialize in solving today's most pressing business problems across the enterprise in the areas of Business Strategy & Transformation, Finance & Accounting, Risk & Compliance and Technology & Digital Innovation. Our engagements are designed to leverage human connection and collaboration to deliver practical solutions and more impactful results that power our clients, consultants and partners' success.

RGP was founded in 1996 to help finance executives with operational needs and special projects created by workforce gaps. Our first-to-market, agile human capital model disrupted the professional services industry at a time when traditional talent models prevailed. Today's new ecosystem for work embraces our founding principle – quickly align the right resource for the work at hand with a premium placed on value, efficiency and ease of use.

Our pioneering approach to workforce strategy uniquely positions us to support our clients on their transformation journeys. With more than 4,000 professionals, we annually engage with over 2,400 clients around the world from more than 70 practice offices. We are their partner in delivering on the future of work. Headquartered in Irvine, California, RGP is proud to have served 89 of the Fortune 100.

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. (RECN-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 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "remain," "should" or "will" or the negative of these terms or other comparable terminology. In this press release, such statements include statements regarding our expectations for growth and our new business pipeline. 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 our ability to successfully execute on our strategic initiatives, our ability to compete effectively in the highly competitive professional services market and to secure new projects from clients, our ability to successfully integrate any acquired companies, seasonality, overall economic conditions and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended May 25, 2019 and our other public filings made with the Securities and Exchange Commission (File No. 000-32113). 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.

Use of Non-GAAP Financial Measures

The Company utilizes certain financial measures and key performance indicators that are not defined by, or calculated in accordance with, GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company's financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of operations; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented. The following are the Company's non-GAAP measures:

  • Constant currency revenue amounts represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period.
  • Organic revenue is calculated as GAAP revenue less revenues from acquired businesses and revenues related to businesses that the Company disposed of either through sale or abandonment.
  • Constant currency organic revenue amounts represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect and applied to the same organic revenue in the comparable prior year period.
  • Adjusted EBITDA is calculated as net income before amortization of intangible assets, depreciation expense, interest and income taxes plus stock-based compensation expense and plus or minus contingent consideration adjustments.
  • Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.
  • Cash tax rate excludes the non-cash tax impact of stock-based compensation expense, non-cash tax benefits related to the Tax Cuts and Jobs Act in the U.S., and non-cash impact of valuation allowances on international deferred tax assets.
  • Adjusted provision for income taxes, adjusted net income and adjusted diluted earnings per common share were calculated based on the Company's cash tax rates, which exclude the non-cash tax impact of stock-based compensation expense, non-cash tax benefits related to the Tax Cuts and Jobs Act, and non-cash tax impact of valuation allowances on international deferred tax assets.

We believe that constant currency revenue, organic revenue, constant currency organic revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted provision for income taxes, Adjusted net income, and Adjusted diluted earnings per common share, which are used by management to assess the core performance of our Company, also provide useful information to our investors because they are alternative financial measures that investors can also use to assess the core performance of our Company and compare it to the Company's peers. Constant currency revenue, organic revenue, constant currency organic revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income and Adjusted diluted earnings per common share are not measurements of financial performance or liquidity under GAAP and should not be considered in isolation or construed as substitutes for net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our profitability or liquidity. These measures, as well as the Adjusted provision for income taxes and cash tax rate should be considered in addition to, and not as a substitute for, net income, earnings per share, cash flows or other measures of financial performance prepared in accordance with GAAP.

 

 

 

 

 

 

 

 

 

 

 

 

 

RESOURCES CONNECTION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

November 23,

 

November 24,

 

November 23,

 

November 24,

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

(Unaudited)

Revenue

 

$

184,507

 

 

$

188,799

 

$

356,732

 

 

$

367,357

Direct cost of services

 

 

110,130

 

 

 

115,378

 

 

214,852

 

 

 

225,785

Gross margin

 

 

74,377

 

 

 

73,421

 

 

141,880

 

 

 

141,572

Selling, general and administrative expenses

 

 

53,755

 

 

 

54,959

 

 

110,733

 

 

 

111,325

Operating income before amortization

 

 

 

 

 

 

 

 

 

 

 

 

and depreciation

 

 

20,622

 

 

 

18,462

 

 

31,147

 

 

 

30,247

Amortization of intangible assets

 

 

1,510

 

 

 

952

 

 

2,604

 

 

 

1,907

Depreciation expense

 

 

1,424

 

 

 

1,197

 

 

2,793

 

 

 

2,266

Operating income

 

 

17,688

 

 

 

16,313

 

 

25,750

 

 

 

26,074

Interest expense

 

 

551

 

 

 

608

 

 

1,033

 

 

 

1,134

Other (income)/expense

 

 

(537

)

 

 

-

 

 

(537

)

 

 

-

Income before provision for income taxes

 

 

17,674

 

 

 

15,705

 

 

25,254

 

 

 

24,940

Provision for income taxes

 

 

5,337

 

 

 

5,141

 

 

7,978

 

 

 

8,635

Net income

 

$

12,337

 

 

$

10,564

 

$

17,276

 

 

$

16,305

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.39

 

 

$

0.33

 

$

0.54

 

 

$

0.51

Diluted

 

$

0.38

 

 

$

0.33

 

$

0.54

 

 

$

0.50

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

31,984

 

 

 

31,721

 

 

31,852

 

 

 

31,731

Diluted

 

 

32,369

 

 

 

32,446

 

 

32,287

 

 

 

32,457

Cash dividends declared per common share

 

$

0.14

 

 

$

0.13

 

$

0.28

 

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

 

RESOURCES CONNECTION, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

Organic Revenue

November 23,

 

November 24,

 

November 23,

 

November 24,

 

2019

 

2018

 

2019

 

2018

Revenue (GAAP)

(Unaudited)

 

(Unaudited)

North America

$

152,422

 

$

153,823

 

$

292,798

 

$

299,994

Asia Pacific

 

12,716

 

 

11,813

 

 

25,802

 

 

23,516

Europe

 

19,369

 

 

23,163

 

 

38,132

 

 

43,847

Total revenue

$

184,507

 

$

188,799

 

$

356,732

 

$

367,357

 

 

 

 

 

 

 

 

 

 

 

 

Less: Impact of Acquisitions and Dispositions

 

 

 

 

 

 

 

 

 

 

 

North America

$

5,788

 

$

-

 

$

7,184

 

$

-

Asia Pacific

 

-

 

 

-

 

 

-

 

 

-

Europe

 

324

 

 

4,033

 

 

2,217

 

 

7,107

Total revenue

$

6,112

 

$

4,033

 

$

9,401

 

$

7,107

 

 

 

 

 

 

 

 

 

 

 

 

Organic Revenue

 

 

 

 

 

 

 

North America

$

146,634

 

$

153,823

 

$

285,614

 

$

299,994

Asia Pacific

 

12,716

 

 

11,813

 

 

25,802

 

 

23,516

Europe

 

19,045

 

 

19,130

 

 

35,915

 

 

36,740

Total revenue

$

178,395

 

$

184,766

 

$

347,331

 

$

360,250

 

 

 

 

 

 

 

 

 

 

 

 

RESOURCES CONNECTION, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

November 23,

 

November 24,

 

 

November 23,

 

November 24,

Adjusted EBITDA and Adjusted EBITDA Margin

2019

 

2018

 

 

2019

 

2018

 

(Unaudited)

 

 

(Unaudited)

Net income

$

12,337

 

 

$

10,564

 

 

 

$

17,276

 

 

$

16,305

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

1,510

 

 

 

952

 

 

 

 

2,604

 

 

 

1,907

 

Depreciation expense

 

1,424

 

 

 

1,197

 

 

 

 

2,793

 

 

 

2,266

 

Interest expense

 

551

 

 

 

608

 

 

 

 

1,033

 

 

 

1,134

 

Provision for income taxes

 

5,337

 

 

 

5,141

 

 

 

 

7,978

 

 

 

8,635

 

Stock-based compensation expense

 

1,643

 

 

 

1,652

 

 

 

 

3,158

 

 

 

3,013

 

Contingent consideration adjustment

 

(131

)

 

 

(130

)

 

 

 

(262

)

 

 

(33

)

Adjusted EBITDA

$

22,671

 

 

$

19,984

 

 

 

$

34,580

 

 

$

33,227

 

Revenue

$

184,507

 

 

$

188,799

 

 

 

$

356,732

 

 

$

367,357

 

Adjusted EBITDA Margin

 

12.3

%

 

 

10.6

%

 

 

 

9.7

%

 

 

9.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Provision for Income Taxes, Annual Cash Tax Rate, Adjusted Net Income and Adjusted Diluted Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

November 23,

 

November 24,

 

 

November 23,

 

November 24,

 

2019

 

2018

 

 

2019

 

2018

 

(Unaudited)

 

 

(Unaudited)

Provision for income taxes

$

5,337

 

 

$

5,141

 

 

 

$

7,978

 

 

$

8,635

 

Effect of non-cash tax items:

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

(33

)

 

 

(434

)

 

 

 

(76

)

 

 

(795

)

Valuation allowance on international deferred tax assets

 

(115

)

 

 

(121

)

 

 

 

(448

)

 

 

(305

)

Other non-cash tax items

 

(8

)

 

 

-

 

 

 

 

(8

)

 

 

(3

)

Adjusted provision for income taxes

$

5,181

 

 

$

4,586

 

 

 

$

7,446

 

 

$

7,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

30

%

 

 

33

%

 

 

 

32

%

 

 

35

%

Total effect of non-cash tax items on effective tax rate

 

(1

%)

 

 

(4

%)

 

 

 

(3

%)

 

 

(5

%)

Annual cash tax rate

 

29

%

 

 

29

%

 

 

 

29

%

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

12,337

 

 

$

10,564

 

 

 

$

17,276

 

 

$

16,305

 

Total effect of non-cash tax items on net income

 

156

 

 

 

555

 

 

 

 

532

 

 

 

1,103

 

Adjusted net income

$

12,493

 

 

$

11,119

 

 

 

$

17,808

 

 

$

17,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.38

 

 

$

0.33

 

 

 

$

0.54

 

 

$

0.50

 

Effect of non-cash tax items on diluted earnings per common share

 

0.01

 

 

 

0.01

 

 

 

 

0.01

 

 

 

0.04

 

Adjusted diluted earnings per common share

$

0.39

 

 

$

0.34

 

 

 

$

0.55

 

 

$

0.54

 

 

 

 

 

 

RESOURCES CONNECTION, INC.

SELECTED BALANCE SHEET, CASH FLOW AND OTHER INFORMATION

(Amounts in thousands, except consultant headcount and average rates)

 

 

 

 

 

 

 

November 23,

 

May 25,

SELECTED BALANCE SHEET INFORMATION:

2019

 

2019

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

43,033

 

 

$

43,045

 

Accounts receivable, less allowances

$

137,371

 

 

$

133,304

 

Total assets

$

496,352

 

 

$

428,370

 

Current liabilities

$

97,923

 

 

$

91,416

 

Total stockholders' equity

$

300,265

 

 

$

282,396

 

 

 

 

 

 

 

 

Six Months Ended

 

November 23,

 

November 24,

SELECTED CASH FLOW INFORMATION:

2019

 

2018

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

Cash flow -- operating activities

$

17,218

 

 

$

1,665

 

Cash flow -- investing activities

$

(25,471

)

 

$

(3,408

)

Cash flow -- financing activities

$

8,485

 

 

$

(13,298

)

 

 

 

 

 

 

 

November 23,

 

May 25,

SELECTED OTHER INFORMATION:

2019

 

2019

Consultant headcount, end of period

 

3,072

 

 

 

2,965

 

Average bill rate, second quarter

 

$123

 

 

 

$124

 

Average pay rate, second quarter

 

$61

 

 

 

$62

 

Average bill rate (constant currency-Q2 19), second quarter

 

$124

 

 

 

--

 

Average pay rate (constant currency-Q2 19), second quarter

 

$62

 

 

 

--

 

Common shares outstanding, end of period

 

32,138

 

 

 

31,588

 

 

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