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US - Resources Connection revenue falls 4%

July 17 2013

Resources Connection Inc. (NASD: RECN), a provider of finance/accounting, legal and information technology staffing along with other services, reported revenue fell 3.6 percent year over year to $140.2 million in its fiscal fourth quarter ended May 25. The Irvine, Calif.-based company provides services through its Resources Global Professionals subsidiary.

Fourth-quarter U.S. revenue edged down 0.4 percent compared to the fourth quarter of 2012 while international revenue fell 13.6 percent year over year (11.4 percent on a constant dollar basis).

Fourth-quarter gross margin narrowed to 38.9 percent from 40.2 percent in the same quarter last year. During the quarter, the company recorded a charge of about $1.15 million to reduce headcount in some European offices; $525,000 of this, as well as increased healthcare costs and a 30 basis-point decline in the bill rate/pay rate relationship, contributed to the gross margin decline.

Resource Connection’s fourth-quarter net income fell 40.2 percent to $5.3 million — which includes severance charges totaling $1.1 million — from $8.9 million in the fourth quarter of 2012.

Full-year revenue fell 2.7 percent to $556.3 million while gross margin for the fiscal year edged up to 38.5 percent from 38.3 percent in the previous fiscal year.

Fiscal year 2013 net income fell 50.2 percent to $20.5 million. However, last year’s net income was impacted by an assessment that it would not have to pay earn-outs for the company’s 2009 acquisition of public relations firm Sitrick and Company Inc. and corporate restructuring advisory firm Brincko Associates Inc.

Resources Connection Inc. (NASD: RECN)
 For the fiscal fourth quarter ended May 25, 2013, compared with the same period in the previous fiscal year.
 Revenue: $140.2 million, -3.6 percent
 Net income: $5.3, -40.2 percent

For the fiscal year ended May 25, 2013, compared with the previous fiscal year.
 Revenue: $556.3 million, -2.7 percent
 Net income: $20.5 million, -50.2 percent


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