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Resources Connection Q4 revenue falls 44%

July 16 2009

Revenue at Resources Connection Inc. (NASD: RECN) fell 44.2% year-over-year to $132.0 million in its fiscal fourth quarter ended May 30. "Given the global economic climate, this has been the most challenging year in the history of Resources," CEO Thomas Christopoul said.

The Irvine CA-based company provides finance and accounting, information technology and legal personnel through its Resources Global Professionals subsidiary.

Fourth-quarter U.S. revenue was $96.2 million down 39.5% year-over-year after adjusting for an extra week in the fourth quarter of the previous year, CFO Nate Franke said in a conference call with analysts.

Gross margin narrowed to 38.2% in the fourth quarter from 39.4% in the same period a year ago.

Resources Connection posted a fourth-quarter net loss of $6.3 million compared with net income of $15.9 million in the year-ago quarter.

The company said it took a $3.6 million restructuring charge in the fourth quarter related to severance payments and the consolidation of seven offices. It also recorded a valuation allowance of $2.4 million against deferred tax assets at some of its foreign operations and a tax charge of $1.1 million that arose from forgiving intercompany debt at its French subsidiary.

For the full year, Resources Connection's revenue fell 18.4% to $685.6 million from $840.3 million in the previous year.

Full-year gross margin edged up to 38.4% from 38.3%.

And full-year net income fell 63.9% to $17.8 million from $49.2 million in the previous year.

The company also announced it acquired a consulting business in Cincinnati from Experian during the fourth quarter.

Resources Connection Inc. (NASD: RECN)
For the fiscal fourth quarter ended May 30, 2009, compared with the same period in the previous fiscal year.
Revenue: $132.0 million, -44.2%
Net loss: $6.3 million vs. net income of $15.9 million

For the full year ended May 30, 2009, compared with the previous year.
Revenue: $685.6 million, -18.4%
Net income: $17.8 million, -63.9%

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