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Resources Connection revenue down 7.9%

January 07 2009

Resources Connection Inc. (NASD: RECN) reported revenue fell 7.9% year-over-year to $190.2 million in its fiscal second quarter ended Nov. 29.

The Irvine CA-based company — which provides finance and accounting, information technology and legal personnel through its Resources Global Professionals subsidiary — said its U.S. revenue was $134.4 million, down 11.0% year-over-year. International revenue rose 0.5%; however, it increased 7.4% on a constant currency basis.

Resources Connections' gross margin improved to 39.0% from 38.5%.

Still, second-quarter net income dropped 27.3% to $9.5 million from $13.0 million in the same period in the previous year.

CFO Nate Franke estimated fiscal third-quarter revenue of approximately $167 million in a conference call with analysts on Tuesday. This is down 17.7% from $202.8 million in the same quarter a year ago.

President and CEO Thomas Christopoul also announced in the conference call that Karen Ferguson will become executive VP and chief strategy officer, Tony Cherbak will take on the role of president of international operations and Tom Schember will take on leadership of a strategic accounts team.

In addition, Resources Connection said in November it acquired a human resource consulting business in Sweden for $1.3 million as well as possible future earnouts. The Swedish company has annual revenue of approximately $3 million.

"The current financial crisis is a test of the resolve of our people," Christopoul said. "We continue to believe that the enormous change taking place in the global markets will present significant opportunities for us in the future; however, the timing of those opportunities will vary as companies work through their strategies to offset what will likely be a period of sustained economic contraction."

Resources Connection Inc. (NASD: RECN)
For the fiscal second quarter ended Nov. 29, 2008, compared with the same period in the previous fiscal year.
Revenue: $190.2 million, -7.9%
Net income: $9.5 million, -27.3%

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