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View All NewsWorld – Resources Connection revenue up 6.2%, European business drives growth
US-based professional staffing provider Resources Connection Inc. (NASD: RECN) reported revenue rose 6.2% in its fiscal second quarter ended 25 November with a lion’s share of the growth coming from Europe.
| (USD thousands) | Q2 2018 | Q2 2017 | % change | % change constant currency |
| Revenue | 156,738 | 147,558 | 6.2% | 5.3% |
| Gross profit | 59,419 | 56,510 | 5.1% | N/A |
| Gross margin percentage | 37.9% | 38.3% | N/A | N/A |
| Net income | 8,138 | 5,692 | 43.0% | N/A |
For the European portion of its revenue, Resources Connection reported an increase of 44.0%, in part due to its acquisition in August of a professional services firm based in Germany called taskforce-Management on Demand AG. Excluding the taskforce acquisition, European revenue still rose 20.9%. Overall international revenue rose 24.7%, which the company attributed to strength in the UK, Ireland and Sweden. US revenue only rose by 1.5% in the second quarter.
The company also said its 40 basis-point decline in gross margin for the quarter was primarily related to the taskforce acquisition.
Resources Connection also noted Asia-Pacific revenue fell year-over-year.
Resources Connection is implementing strategic initiatives to contain costs and drive revenue growth. The second quarter includes approximately $2.9 million related to severance, acquisition, transformation and integration costs. The company incurred charges of approximately $1.5 million related to severance expenses in the year-ago quarter.
In addition, Resources Connection on 4 December closed on its acquisition of Accretive Solutions Inc. — a US-based firm that provides consulting, staffing and outsourcing services — for $19.4 million in cash plus stock.
“I am pleased with our performance this quarter and the continued progress we have made towards implementing our strategic initiatives,” said President and CEO Kate Duchene. “Our international performance remains strong, and I am especially proud of our eighth successive quarter of revenue growth in Europe. Additionally, our performance in North America is strengthening, and we believe we can experience further growth in our third quarter as our core business continues to grow and we integrate our recent acquisition, Accretive, into RGP (Resources Global Professionals).”
In trading yesterday, Resources Connection shares closed at USD 15.60, up 2.30% on the day and 29.46% above the 52 week low of USD 12.05 set on 7 September 2017. Based on its current share price the company has a market value of USD 470.0 million.