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Resources Revenue Slips, Storm Costs $1 Million

December 21 2012

Resources Connection Inc. (NASD: RECN) reported revenue fell 2.6 percent year over year to $141.2 million in its fiscal second quarter ended Nov. 24. And Superstorm Sandy cost approximately $1 million in lost revenue, according to the Irvine, Calif.-based firm, which provides finance/accounting, legal and IT staffing among other services.

That lost revenue was limited to $1 million thanks to the work of its employees, the company reported. It also announced that it paid consultants for work lost from the storm.

“To assist our consultants in this crisis, we paid them for the work hours they lost resulting from Sandy,” Chairman and CEO Don Murray said in a conference call with analysts. “With the many efforts of our people, I also know we strengthened our relationship with numerous clients and our employees based upon our response in the weeks following the storm.”

Still, second-quarter U.S. revenue rose 2.9 percent year over year to $105.9 million. However, international revenue fell 16.2 percent to $35.3 million. The decrease in international revenue was 13.8 percent on a constant currency basis.

Second-quarter gross margin improved to 39.1 percent from 37.9 percent in the prior year’s second quarter.

Resource Connection’s second-quarter net income was $5.9 million, down 76.8 percent from $25.3 million in the same period in the previous year. The second quarter of the previous year includes an adjustment of $33.4 million in contingent consideration for its acquisition of the Sitrick Brincko Group as the company calculated it would not owe an earn-out based on performance.

Resources Connection Inc. (NASD: RECN)
For the fiscal second quarter ended Nov. 24, 2012, compared with the same period in the previous fiscal year.
Revenue: $141.2 million, -2.6 percent
Net income: $5.9 million, -76.8 percent

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