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Resources Connection revenue up 12%

July 18, 2014

Resources Connection Inc. (NASD: RECN) reported revenue rose 11.8 percent year over year (11.6 percent on a constant dollar basis) to $156.8 million in its fiscal fourth quarter ended May 31. Results for the quarter include an extra week of revenue; excluding the extra week’s revenue of approximately $9.8 million, the increase was 4.9 percent.

The Irvine, Calif.-based company’s operating subsidiary, Resources Global Professionals, provides professionals specializing in accounting, finance, risk management, internal audit, information management, legal and other areas.

Fourth-quarter net income rose 29.0 percent. Net income includes severance and related charges for European personnel reductions of $2.0 million for the most recent quarter and $1.1 million for the year-ago quarter.

Quote

“In particular, in the fourth quarter, we experienced more balanced revenue growth across the country than at any other time this past year,” said Tony Cherbak, president and chief executive officer of RGP. “We also believe the actions we took in the fourth quarter in Europe will position that region, which is critical for maintaining our global footprint with our Fortune 1000 clients, for improved results. On an overall basis, our revenues for the first six weeks of fiscal 2015 have tracked 7.8 percent better than the comparable period last year.”

Revenue

  Q4 2014 ($000s) Q4 2013 ($000s) % growth % growth constant dollar
Revenue $156,783 $140,184 11.8% 11.6%

Revenue by geography

  Growth: Q4 2014 vs. Q4 2013
U.S. revenue 14.8%
International revenue 1.9%

Gross margin

  Q4 2014  Q4 2013 
Gross margin 38.9% 38.9%

Net income

  Q4 2014 ($000s) Q4 2013 ($000s) % growth
Net income $6,859 $5,315 29.0%

Full-year results

  Q4 2014 ($000s) Q4 2013 ($000s) % growth
Revenue $567,181 $556,334 1.9%
Net income $19,886 $20,504 -3.0%

Share price and market cap

Shares in Resource Connection were up 12.94 percent in early afternoon trading to $14.75, and Resource Connection has a market cap of approximately $571.61 million, according to Yahoo!

Promotions

RGP promoted Tanja Cebula to executive vice president - chief innovation officer. Cebula joined the firm in 1997 as managing director and founder of the Company's Portland, Ore., office, and most recently managed RGP's Western region, which includes 19 offices in the U.S. and Mexico.

Additionally, Tim Brackney, Elisabeth Dick and Joni Noel have been promoted to senior vice president roles in the company’s Northwest, Southwest and South Central regions, respectively.

Brackney has been with RGP for more than 11 years in various leadership roles and is now senior vice president of the Northwest region, including offices in Northern California and the Pacific Northwest.

Dick joined RGP in 1996 as one of the company’s first three employees. As senior vice president, Southwest, she is responsible for managing offices in Southern California, Arizona, Nevada, Colorado, Missouri and Hawaii.