*Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, stock based compensation and contingent consideration adjustments
IRVINE, Calif., July 12, 2012 - Resources Connection, Inc. (NASDAQ: RECN), a multinational professional services firm that provides to clients - through its operating subsidiary, Resources Global Professionals ("Resources") - accomplished professionals in accounting, finance, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, healthcare solutions, and legal and regulatory services, today announced financial results for its fiscal fourth quarter and year ended May 26, 2012.
Total revenue for the fourth quarter of fiscal 2012 was $145.5 million, up 1.5% on a sequential quarter basis and even with last year's fourth quarter revenue. Revenues in the U.S. were up 4.6% quarter-over-quarter and 3.8% sequentially, while international revenues decreased 11.7% quarter-over-quarter and 4.4% sequentially (7.4% quarter-over-quarter and 4.4% sequentially on a constant dollar basis).
The Company's net income for the fourth quarter ended May 26, 2012, was $8.9 million, or $0.21 per diluted share. This compares with a net income for the fourth quarter ended May 28, 2011 of $5.4 million, or $0.12 per diluted share (which includes $0.05 per share impact of contingent consideration adjustments).
"While the uncertain global economic environment constrained our growth, our results for the fourth quarter demonstrate our ongoing efforts to improve our financial metrics," said Tony Cherbak, chief operating officer of Resources. "We are pleased to see substantial increases in earnings per share and adjusted EBITDA which have allowed us to continue returning capital to our shareholders."
Gross margin was 40.2% in the fourth quarter of fiscal 2012, up 210 basis points from the fourth quarter of fiscal 2011. Selling, general and administrative expenses for the fourth quarter of fiscal 2012 were $42.0 million, down $1.4 million from $43.4 million in the third quarter of fiscal 2012.
Cash flow from operations and adjusted EBITDA were $16.6 million and $18.4 million (12.6% of revenue), respectively, for the fourth quarter of fiscal 2012 and $11.0 million and $13.7 million (9.4% of revenue), respectively, for the fourth quarter of fiscal 2011.
The Company's revenue for the year ended May 26, 2012 was $571.8 million compared with $545.5 million for the year ended May 28, 2011, an increase of $26.3 million. The Company's net income for the year ended May 26, 2012 was $41.1 million, or $0.94 per diluted share (including the after tax impact of the adjustment of the estimated fair value of contingent consideration expense of $20.4 million or $0.47 per share), compared with net income for the year ended May 28, 2011 of $24.9 million, or $0.53 per diluted share (including the after tax impact of the adjustment of the estimated fair value of contingent consideration expense of $15.6 million or $0.34 per share, offset by a $0.03 per share charge related to newly established tax valuation allowances).
"While our clients remain cautious in their spending on business initiatives, we believe the current environment will cause many companies to further utilize a variable model for an increasing portion of their intellectual capital needs," said Don Murray, chief executive officer. "Our improving financial metrics result from our steadfast focus on client service and client relationships."
The Company's pre-tax income for the year ended May 26, 2012 was $73.3 million, including a non-cash adjustment of $33.9 million reducing the estimated fair value of contingent consideration liability (including the employee portion of contingent consideration) related to the Sitrick Brincko Group acquisition. Accounting standards require the Company to record increases or decreases in the estimated fair value of contingent consideration to earnings.
During the fourth quarter of fiscal 2012, the Company purchased 534,000 shares of common stock for $7.0 million. On June 21, 2012, the Company paid its quarterly dividend of $2.1 million to shareholders, representing a dividend of $0.05 per share.
ABOUT RESOURCES GLOBAL PROFESSIONALS
Resources Global Professionals, the operating subsidiary of Resources Connection, Inc. (NASDAQ: RECN), is a multinational professional services firm that helps business leaders execute internal initiatives. Partnering with business leaders, we drive internal change across all parts of a global enterprise - accounting, finance, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, healthcare solutions, and legal and regulatory services.
Resources Global was founded in 1996 within a Big Four accounting firm. Today, we are a publicly traded company with over 3,000 professionals, annually serving approximately 1,900 clients around the world from 77 practice offices.
Headquartered in Irvine, California, Resources Global has served 85 of the Fortune 100 companies.
The Company is listed on the NASDAQ Global Select Market, the exchange's highest tier by listing standards. More information about Resources Global is available at http://www.resourcesglobal.com.
Resources will hold a conference call for interested analysts and investors at 5:00 p.m., ET today, July 12, 2012. This conference call will be available for listening via a webcast on the Company's website: http://www.resourcesglobal.com. An audio replay of the conference call will be available through July 19, 2012 at 855-859-2056. The password for the replay is 87341142. The call will also be archived on the Resources Global Professionals website for 30 days.
Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "remain," "should" or "will" or the negative of these terms or other comparable terminology. In this press release, such statements include our beliefs regarding our efforts to continue improving our financial metrics, expectations concerning our clients' spending for their intellectual capital needs and the estimated fair value of the Sitrick Brincko Group contingent consideration. Such statements and all phases of Resources Connection's operations are subject to known and unknown risks, uncertainties and other factors, including seasonality, overall economic conditions and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K and our other public filings made with the Securities and Exchange Commission (File No. 0-32113). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Resources Connection's, and its industry's, actual results, levels of activity, performance or achievements may be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The Company undertakes no obligation to update the forward-looking statements in this press release.
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Nate Franke, Chief Financial Officer
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