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Revenue and net income rose at Resources Connection Inc. (NASD: RECN) in its most recent quarter ended Aug. 31, but gross margin slipped, in part, because of contingent worker vacations, the company reported Tuesday.
Net income at the Irvine CA-based company increased 5.8% to $11.6 million in the first quarter of the company's fiscal year, compared with $11.0 million in the same period last year.
Revenue rose 17.6% to $194.1 million from $165.1 a year ago.
Gross margin, however, slipped to 37.9% in the quarter, down from 39.5% in the first quarter of its last fiscal year. The company said workers' vacations took a bite out of its margins.
The company said
Shares in Resources Connection fell 22.02% to $24.92 in mid-morning trading. The company projected second-quarter revenue of $200 million, analysts had expected $216.3 million.
Resources Connection provides professionals in accounting and finance, risk management, internal audit, legal services and other areas through its Resources Global Professionals operating subsidiary.
Resources Connection Inc. (NASD: RECN)
For the first quarter of its fiscal year ended Aug. 31, 2007, compared with the same period in 2006.
Revenue: $194.1 million, +17.6%
Net income: $11.6 million, +5.8%