– Fourth Quarter Revenue Beats High End of
Outlook Range –
– Significant Pay/Bill Spread Improvement
Drives Highest Full Year Gross Margin in Over a Decade –
Resources Connection, Inc. (Nasdaq: RGP) (the “Company”), a
global consulting firm, today announced its financial results for
its fourth quarter and full fiscal year ended May 27, 2023.
Fourth Quarter Fiscal 2023 Highlights
Compared to Prior Year Quarter:
- Revenue of $184.4 million declined 15.0% compared to $217.0
million, which included $7.7 million of revenue attributed to
taskforce, divested at the beginning of fiscal 2023
- Same-day constant currency revenue, a non-GAAP measure,
declined 11.5% excluding taskforce
- Gross margin remained strong at 41.1% compared to 41.3%
- Selling, general and administrative expenses (“SG&A”) of
$56.5 million, including $1.9 million of technology transformation
costs, or 30.6% of revenue, up 330 basis points
- Net income of $11.8 million (net income margin of 6.4%)
compared to $20.5 million (net income margin of 9.5%)
- Diluted earnings per common share of $0.35 compared to
$0.61
- Adjusted EBITDA, a non-GAAP measure, was $23.2 million, or
12.6% Adjusted EBITDA margin compared to 15.4%
- Cash dividends declared of $0.14 per share consistent with the
prior year quarter
- Available financial liquidity of $291.0 million, up from $224.0
million at fiscal year-end 2022
Full Fiscal Year 2023 Highlights Compared
to Prior Year:
- Revenue of $775.6 million declined 3.6% compared to $805.0
million, which included $27.6 million of revenue attributed to
taskforce
- Same-day constant currency revenue, a non-GAAP measure, was up
1.1% excluding taskforce
- Gross margin of 40.4%, an improvement of 110 basis points
- SG&A of $228.8 million, including $6.4 million of
technology transformation costs, or 29.5% of revenue, compared to
27.9%
- Net income of $54.4 million (net income margin of 7.0%),
including goodwill impairment charge of $3.0 million related to
Sitrick, compared to $67.2 million (net income margin of 8.3%)
- Diluted earnings per common share of $1.59 compared to
$2.00
- Adjusted EBITDA, a non-GAAP measure, of $100.2 million, or
12.9% Adjusted EBITDA margin, up 10 basis points
Management Commentary
“We finished the year with organic revenue growth year over
year, while also delivering strong profitability,” said Kate W.
Duchene, Chief Executive Officer. “These results – produced in a
challenging macroenvironment – are a testament to our employees’
hard work and client receptivity to our agile co-execution model,
which is purpose built to be an alternative to traditional
partnership consulting models. We deliver experts who execute and
help businesses transform with agility. We are excited to continue
improving the company for the long term with investments in
consultant experience, client services and technology, including a
cloud-based enterprise resource planning system, a talent
acquisition and management system, and our digital engagement
platform, HUGO by RGP®. We stand ready to accelerate our growth as
the economy improves with inflation moderating and interest rates
stabilizing.”
Fourth Quarter Fiscal 2023 Results
Revenue of $184.4 million decreased by $32.6 million or 15%,
compared to the fourth quarter of fiscal 2022. Excluding $7.7
million of revenue from taskforce, which was divested at the
beginning of fiscal 2023, and on a constant currency basis, revenue
decreased by 11.5%, reflecting slower buying patterns from clients
as a result of a softer macroeconomic environment. Compared to the
prior year quarter on the same basis (i.e., excluding taskforce),
billable hours decreased by 12.6%, while average bill rate improved
by 0.9% on a constant currency basis.
Gross margin was 41.1%, compared to 41.3% in the prior year
quarter. The change was primarily due to lower leverage on indirect
cost of service as a result of softer topline performance, offset
by a 150 basis points improvement in pay/bill ratio driven by the
successful execution of ongoing pricing initiative to raise bill
rates and the divestiture of taskforce which historically had less
favorable pay/bill ratios.
SG&A for the fourth quarter of fiscal 2023 was $56.5
million, an improvement of $2.8 million compared to the prior year
quarter. The decrease in SG&A costs was primarily due to lower
management incentive compensation expense, partially offset by
higher technology transformation costs as the Company continued to
execute its technology implementation project.
The fourth quarter had a provision for income taxes of $5.4
million (an effective tax rate of 31.4%) compared to $7.2 million
(an effective tax rate of 26.1%) for the fourth quarter of fiscal
2022. The effective tax rate for the fourth quarter of fiscal 2023
was attributed to lower international pre-tax income. The lower
international pre-tax income causes the effective rate to increase,
especially where there is a full valuation allowance that negates
the tax benefit of losses.
Net income was $11.8 million (net income margin of 6.4%),
compared to $20.5 million (net income margin of 9.5%) in the prior
year quarter, primarily due to lower topline revenue and higher
SG&A as a percentage of revenue as the Company continued to
execute on its technology implementation project to drive long-term
growth and efficiency. Despite continued challenges posed by the
macro environment, the Company delivered a solid Adjusted EBITDA
margin of 12.6% in the fourth quarter.
Full Fiscal Year 2023 Results
Annual revenue declined 3.6% versus a year ago to $775.6 million
but increased by 1.1% on a same-day constant currency basis
excluding taskforce. Gross margin improved by 110 basis points to
40.4%, driven by the 220 basis points improvement in pay/bill ratio
as the Company’s pricing initiative continued to yield positive
results and as a result of taskforce divestiture. The Company’s
continued focus on operational efficiency supported a healthy ratio
of SG&A to revenue of 29.5%, with SG&A of $228.8 million
including $6.4 million of technology transformation costs. Despite
a challenging macro environment throughout the fiscal year, the
Company delivered net income of $54.4 million (net income margin of
7.0%) including a goodwill impairment charge of $3.0 million
related to Sitrick, diluted earnings per common share of $1.59, and
a strong Adjusted EBITDA margin of 12.9%.
RESOURCES CONNECTION,
INC.
SUMMARY OF CONSOLIDATED
FINANCIAL RESULTS
(In thousands, except per
share amounts)
Three Months Ended
For the Years Ended
May 27,
May 28,
May 27,
May 28,
May 29,
2023
2022
2023
2022
2021
(Unaudited)
(Unaudited)
(Unaudited)
Revenue
$
184,449
$
217,031
$
775,643
$
805,018
$
629,516
Direct cost of services
108,731
127,356
462,501
488,376
388,112
Gross profit
75,718
89,675
313,142
316,642
241,404
Selling, general and administrative
expenses
56,507
59,356
228,842
224,721
209,326
Amortization expense
1,275
1,300
5,018
4,908
5,228
Depreciation expense
887
881
3,539
3,575
3,897
Goodwill impairment
-
-
2,955
-
-
Income from operations
17,049
28,138
72,788
83,438
22,953
Interest (income) expense, net
(110
)
320
552
1,064
1,600
Other (income) expense
(1
)
59
(382
)
(594
)
(1,331
)
Income before income tax expense
(benefit)
17,160
27,759
72,618
82,968
22,684
Income tax expense (benefit)
5,392
7,232
18,259
15,793
(2,545
)
Net income
$
11,768
$
20,527
$
54,359
$
67,175
$
25,229
Net income per common share:
Basic
$
0.35
$
0.62
$
1.63
$
2.04
$
0.78
Diluted
$
0.35
$
0.61
$
1.59
$
2.00
$
0.78
Weighted average number of common and
common equivalent shares outstanding:
Basic
33,374
32,957
33,407
32,953
32,444
Diluted
33,886
33,499
34,185
33,556
32,552
Cash dividends declared per common
share
$
0.14
$
0.14
$
0.56
$
0.56
$
0.56
Revenue by
Geography
North America
$
160,999
$
183,817
$
680,993
$
676,419
$
512,777
Europe
10,757
19,433
42,509
76,075
72,496
Asia Pacific
12,693
13,781
52,141
52,524
44,243
Total consolidated revenue
$
184,449
$
217,031
$
775,643
$
805,018
$
629,516
Cash
dividend
Total cash dividends paid
$
4,819
$
4,635
$
18,784
$
18,600
$
18,230
Conference Call Information
RGP will hold a conference call for analysts and investors at
5:00 p.m., ET, today, July 24, 2023. A live webcast of the call
will be available on the Events section of the Company’s Investor
Relations website. To access the call by phone, please go to this
link (registration link), and you will be provided with dial in
details. To avoid delays, we encourage participants to dial into
the conference call fifteen minutes ahead of the scheduled start
time. A replay of the webcast will also be available for 30 days by
visiting the Events section of the Company’s Investor Relations
website.
About RGP
RGP is a global consulting firm focused on project execution
services that power clients’ operational needs and change
initiatives utilizing on-demand, experienced and diverse talent. As
a next-generation human capital partner for our clients, we
specialize in co-delivery of enterprise initiatives typically
precipitated by business transformation, strategic transactions or
regulatory change. Our engagements are designed to leverage human
connection, expertise and collaboration to deliver practical
solutions and more impactful results that power our clients’,
consultants’, and partners’ success. Our unique approach to
workforce strategy strongly positions us to help our clients
transform their businesses and workplaces, especially in a time
where high-quality talent is increasingly scarce and leaders are
increasingly adopting more flexible workforce models to execute
transformational projects. Our mission as an employer is to connect
our team members to meaningful opportunities that further their
career ambitions within the context of a supportive talent
community of dedicated professionals. With approximately 4,100
professionals, we annually engage with over 2,000 clients around
the world from 35 physical practice offices and multiple virtual
offices. We are their partner in delivering on the “now of work.”
Headquartered in Irvine, California, RGP is proud to have served
87% of the Fortune 100 as of May 2023.
The Company is listed on the Nasdaq Global Select Market, the
exchange’s highest tier by listing standards. To learn more about
RGP, visit: http://www.rgp.com. (RGP-F)
Forward-Looking Statements
Certain statements in this press release are “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933 as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements relate to expectations
concerning matters that are not historical facts. 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 statements regarding our growth and operational
plans, our ability to capture demand when the buying environment
improves and expectations regarding our continued growth and
ability to deliver increased stockholder value. Such statements and
all phases of the Company’s operations are subject to known and
unknown risks, uncertainties and other factors that could cause our
actual results, levels of activity, performance or achievements and
those of our industry to differ materially from those expressed or
implied by these forward-looking statements. Risks and
uncertainties include, but are not limited to, the following: risks
related to an economic downturn or deterioration of general
macroeconomic conditions, potential adverse effects to our and our
clients’ liquidity and financial performances from bank failures or
other events affecting financial institutions, risks arising from
epidemic diseases or pandemics, the highly competitive nature of
the market for professional services, risks related to the loss of
a significant number of our consultants, or an inability to attract
and retain new consultants, the possible impact on our business
from the loss of the services of one or more key members of our
senior management, risks related to potential significant increases
in wages or payroll-related costs, our ability to secure new
projects from clients, our ability to achieve or maintain a
suitable pay/bill ratio, our ability to compete effectively in the
competitive bidding process, risks related to unfavorable
provisions in our contracts which may permit our clients to, among
other things, terminate the contracts partially or completely at
any time prior to completion, our ability to realize the level of
benefit that we expect from our restructuring initiatives, risks
that our recent digital expansion and technology transformation
efforts may not be successful, our ability to build an efficient
support structure as our business continues to grow and transform,
our ability to grow our business, manage our growth or sustain our
current business, our ability to serve clients internationally,
additional operational challenges from our international activities
possible disruption of our business from our past and future
acquisitions, the possibility that our recent rebranding efforts
may not be successful, our potential inability to adequately
protect our intellectual property rights, risks that our computer
hardware and software and telecommunications systems are damaged,
breached or interrupted, risks related to the failure to comply
with data privacy laws and regulations and the adverse effect it
may have on our reputation, results of operations or financial
condition, our ability to comply with governmental, regulatory and
legal requirements and company policies, the possible legal
liability for damages resulting from the performance of projects by
our consultants or for our clients’ mistreatment of our personnel,
risks arising from changes in applicable tax laws or adverse
results in tax audits or interpretations, the possible adverse
effect on our business model from the reclassification of our
independent contractors by foreign tax and regulatory authorities,
the possible difficulty for a third party to acquire us and
resulting depression of our stock price, the operating and
financial restrictions from our credit facility, risks related to
the variable rate of interest in our credit facility, the
possibility that we are unable to or elect not to pay our quarterly
dividend payment, and other factors and uncertainties as are
identified in our most recent Annual Report on Form 10-K for the
year ended May 28, 2022, the Annual Report on Form 10-K for the
year ended May 27, 2023, which will be filed on or around July 25,
2023, and our other public filings made with the Securities and
Exchange Commission (File No. 0-32113). Additional risks and
uncertainties not presently known to us or that we currently deem
immaterial may also affect our business or operating results.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
The Company does not intend, and undertakes no obligation, to
update the forward-looking statements in this press release to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events, unless required by law to
do so.
Non-GAAP Financial Measures
The Company utilizes certain financial measures and key
performance indicators that are not defined by, or calculated in
accordance with, accounting principles generally accepted in the
U.S. (“GAAP”) to assess our financial and operating performance. A
non-GAAP financial measure is defined as a numerical measure of a
company’s financial performance that (i) excludes amounts, or is
subject to adjustments that have the effect of excluding amounts,
that are included in the comparable measure calculated and
presented in accordance with GAAP in the Consolidated Statements of
Operations; or (ii) includes amounts, or is subject to adjustments
that have the effect of including amounts, that are excluded from
the comparable GAAP measure so calculated and presented. The
following non-GAAP measures are presented in this press
release:
- Same-day constant currency revenue is adjusted for the
following items:
- Currency impact. In order to remove the impact of fluctuations
in foreign currency exchange rates, the Company calculates same-day
constant currency revenue, which represents the outcome that would
have resulted had exchange rates in the current period been the
same as those in effect in the comparable prior period.
- Business days impact. In order to remove the fluctuations
caused by comparable periods having a different number of business
days, the Company calculates same-day revenue as current period
revenue (adjusted for currency impact) divided by the number of
business days in the current period, multiplied by the number of
business days in the comparable prior period. The number of
business days in each respective period is provided in the “Number
of Business Days” section of the “Reconciliation of GAAP to
Non-GAAP Financial Measures” table below.
- EBITDA is calculated as net income before amortization expense,
depreciation expense, interest and income taxes.
- Adjusted EBITDA is calculated as EBITDA plus or minus
stock-based compensation expense, technology transformation costs,
goodwill impairment, restructuring costs, and contingent
consideration adjustments. Adjusted EBITDA at the segment level
excludes certain shared corporate administrative costs that are not
practical to allocate.
- Adjusted EBITDA Margin is calculated by dividing Adjusted
EBITDA by revenue.
- Cash tax rate excludes the non-cash tax impact of stock option
expirations, non-cash tax impact of valuation allowances on
international deferred tax assets, and other non-cash tax
items.
- Adjusted income tax expense (benefit) is calculated based on
the Company’s cash tax rates (as defined above).
- Adjusted diluted earnings per common share is calculated as
diluted earnings per common share, plus or minus the per share
impact of stock-based compensation expense, technology
transformation costs, goodwill impairment, restructuring costs,
contingent consideration adjustments, and adjusted for the related
tax effects of these adjustments.
We believe the above-mentioned non-GAAP financial measures,
which are used by management to assess the core performance of our
Company, provide useful information and additional clarity of our
operating results to our investors in their own evaluation of the
core performance of our Company and facilitate a comparison of such
performance from period to period. These are not measurements of
financial performance or liquidity under GAAP and should not be
considered in isolation or construed as substitutes for revenue,
net income or other cash flow data prepared in accordance with GAAP
for purposes of analyzing our revenue, profitability or liquidity.
These measures should be considered in addition to, and not as a
substitute for, revenue, net income, earnings per share, cash flows
or other measures of financial performance prepared in accordance
with GAAP. In addition, these non-GAAP financial measures may not
provide information that is directly comparable to that provided by
other companies, as other companies may calculate such financial
results differently.
RESOURCES CONNECTION,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(In thousands, except number
of business days)
Three Months Ended
For the Years Ended
Revenue by
Geography
May 27,
May 28,
May 27,
May 28,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
(Unaudited)
North
America
As reported (GAAP)
$
160,999
$
183,817
$
680,993
$
676,419
Currency impact
(333
)
(504
)
Business days impact
-
-
Same-day constant currency revenue
$
160,666
$
680,489
Europe
As reported (GAAP) (1)
$
10,757
$
19,433
$
42,509
$
76,075
Currency impact
222
4,419
Business days impact
133
871
Same-day constant currency revenue
$
11,112
$
47,799
Asia
Pacific
As reported (GAAP)
$
12,693
$
13,781
$
52,141
$
52,524
Currency impact
805
5,509
Business days impact
48
516
Same-day constant currency revenue
$
13,546
$
58,166
Total
Consolidated
As reported (GAAP) (1)
$
184,449
$
217,031
$
775,643
$
805,018
Currency impact
694
9,424
Business days impact
181
1,387
Same-day constant currency revenue
$
185,324
$
786,454
Number of
Business Days
North America (2)
65
65
251
251
Europe (3)
61
62
248
254
Asia Pacific (3)
61
62
245
247
(1) Total Consolidated revenue and Europe revenue as reported
under GAAP include taskforce revenue of zero and $7.7 million for
the three months ended May 27, 2023 and May 28, 2022, respectively,
and $0.2 million and $27.6 million for the year ended May 27, 2023
and May 28, 2022, respectively.
(2) This represents the number of business days in the United
States.
(3) The business days in international regions represents the
weighted average number of business days.
RESOURCES CONNECTION,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(In thousands, except per
share amounts and percentages)
Three Months Ended
May 27,
% of
May 28,
% of
Adjusted
EBITDA
2023
Revenue
2022
Revenue
(Unaudited)
(Unaudited)
Net income
$
11,768
6.4
%
$
20,527
9.5
%
Adjustments:
Amortization expense
1,275
0.7
1,300
0.6
Depreciation expense
887
0.5
881
0.4
Interest (income) expense, net
(110
)
(0.1
)
320
0.1
Income tax expense
5,392
2.9
7,232
3.3
EBITDA
19,212
10.4
30,260
13.9
Stock-based compensation expense
2,146
1.2
2,317
1.1
Technology transformation costs (1)
1,879
1.0
759
0.4
Restructuring costs (2)
-
-
26
-
Adjusted EBITDA
$
23,237
12.6
%
$
33,362
15.4
%
Adjusted Diluted
Earnings per Common Share
Diluted earnings per common share, as
reported
$
0.35
$
0.61
Stock-based compensation expense
0.06
0.07
Technology transformation costs (1)
0.06
0.02
Restructuring costs (2)
-
-
Income tax impact of adjustments
(0.03
)
(0.03
)
Adjusted diluted earnings per common
share
$
0.44
$
0.67
Adjusted Income
Tax Expense and Cash Tax Rate
Income tax expense
$
5,392
$
7,232
Effect of non-cash tax items:
Stock option expirations
(12
)
(69
)
Valuation allowance on international
deferred tax assets
(414
)
(1,891
)
Net uncertain tax position adjustments
(15
)
(6
)
Other adjustments
(1
)
(783
)
Adjusted income tax expense
$
4,950
$
4,483
Effective tax rate
31.4
%
26.1
%
Total effect of non-cash tax items on
effective tax rate
(2.5
%)
(9.9
%)
Cash tax rate
28.9
%
16.2
%
(1) Technology transformation costs represent costs included in
net income related to the Company’s initiative to upgrade its
technology platform globally, including a cloud-based enterprise
resource planning system and talent acquisition and management
system. Such costs primarily include software licensing costs,
third-party consulting fees and costs associated with dedicated
internal resources that are not capitalized.
(2) The Company substantially completed our global restructuring
and business transformation plan (the “Restructuring Plans”) in
fiscal 2021. All the remaining accrued restructuring liability on
the books related to employee termination costs was either paid or
released as of May 27, 2023.
RESOURCES CONNECTION,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(In thousands, except per
share amounts and percentages)
For the Years Ended
May 27,
% of
May 28,
% of
May 29,
% of
Adjusted
EBITDA
2023
Revenue
2022
Revenue
2021
Revenue
(Unaudited)
(Unaudited)
(Unaudited)
Net income
$
54,359
7.0
%
$
67,175
8.3
%
$
25,229
4.0
%
Adjustments:
Amortization expense
5,018
0.6
4,908
0.6
5,228
0.8
Depreciation expense
3,539
0.4
3,575
0.4
3,897
0.6
Interest expense, net
552
0.1
1,064
0.2
1,600
0.3
Income tax expense (benefit)
18,259
2.4
15,793
2.0
(2,545
)
(0.4
)
EBITDA
81,727
10.5
92,515
11.5
33,409
5.3
Stock-based compensation expense
9,521
1.2
8,168
1.0
6,613
1.1
Technology transformation costs (1)
6,355
0.8
1,449
0.2
-
-
Goodwill impairment (2)
2,955
0.4
-
-
-
-
Restructuring costs (3)
(364
)
-
833
0.1
8,260
1.3
Contingent consideration adjustment
-
-
166
-
4,512
0.7
Adjusted EBITDA
$
100,194
12.9
%
$
103,131
12.8
%
$
52,794
8.4
%
Adjusted Diluted
Earnings per Common Share
Diluted earnings per common share, as
reported
$
1.59
$
2.00
$
0.78
Stock-based compensation expense
0.28
0.24
0.20
Technology transformation costs (1)
0.19
0.04
-
Goodwill Impairment (2)
0.09
-
-
Restructuring costs (3)
(0.01
)
0.02
0.25
Contingent consideration adjustment
-
-
0.14
Income tax impact of adjustments
(0.14
)
(0.08
)
(0.07
)
Adjusted diluted earnings per common
share
$
2.00
$
2.22
$
1.30
Adjusted Income
Tax Expense (Benefit) and Cash Tax Rate
Income tax expense (benefit)
$
18,259
$
15,793
$
(2,545
)
Effect of non-cash tax items:
Stock option expirations
(34
)
(231
)
(1,226
)
Valuation allowance on international
deferred tax assets
1,217
5,371
(880
)
Net uncertain tax position adjustments
(54
)
(36
)
(24
)
Other adjustments
273
(129
)
357
Adjusted income tax expense (benefit)
$
19,661
$
20,768
$
(4,318
)
Effective tax rate
25.1
%
19.0
%
(11.2
%)
Total effect of non-cash tax items on
effective tax rate
2.0
%
6.0
%
(7.8
%)
Cash tax rate
27.1
%
25.0
%
(19.0
%)
(1) Technology transformation costs represent costs included in
net income related to the Company’s initiative to upgrade its
technology platform globally, including a cloud-based enterprise
resource planning system and talent acquisition and management
system. Such costs primarily include software licensing costs,
third-party consulting fees and costs associated with dedicated
internal resources that are not capitalized.
(2) Goodwill impairment charge recognized during the year ended
May 27, 2023 was related to Sitrick operating segment.
(3) The Company substantially completed our Restructuring Plans
in fiscal 2021. All the remaining accrued restructuring liability
on the books related to employee termination costs was either paid
or released as of May 27, 2023.
Segment Results
On May 31, 2022, the Company divested taskforce – Management on
Demand GmbH, and its wholly owned subsidiary skillforce –Executive
Search GmbH, a German professional services firm operating under
the taskforce brand (“taskforce”). Since the third quarter of
fiscal 2021, the business operated by taskforce, along with its
parent company, Resources Global Professionals (Germany) GmbH, an
affiliate of the Company, represented an operating segment of the
Company and was reported as a part of Other Segments. Effective May
31, 2022, the Company’s operating segments consist of RGP and
Sitrick, within the other segment category. Prior-period
comparative segment information was not restated as a result of the
divestiture of taskforce as the Company did not have a change in
internal organization or the financial information that the Chief
Operating Decision Maker uses to assess performance and allocate
resources.
RGP is the Company’s only operating segment that meets the
quantitative threshold of a reportable segment. Sitrick does not
individually meet the quantitative threshold to qualify as a
reportable segment. Therefore, Sitrick is disclosed in Other
Segments.
The following table discloses the Company’s revenue and Adjusted
EBITDA by segment for each of the periods presented (in
thousands):
Three Months Ended
For the Years Ended
May 27,
May 28,
May 27,
May 28,
May 29,
2023
2022
2023
2022
2021
(Unaudited)
(Unaudited)
(Unaudited)
Revenue:
RGP
$
181,662
$
206,766
$
764,511
$
764,350
$
587,620
Other Segments (1)
2,787
10,265
11,132
40,668
41,896
Total revenue
$
184,449
$
217,031
$
775,643
$
805,018
$
629,516
Adjusted EBITDA:
RGP
$
31,045
$
42,354
$
132,377
$
134,187
$
77,589
Other Segments (1)
419
710
1,179
3,527
3,580
Reconciling items (2)
(8,227
)
(9,702
)
(33,362
)
(34,583
)
(28,375
)
Total Adjusted EBITDA (3)
$
23,237
$
33,362
$
100,194
$
103,131
$
52,794
(1) Amounts reported in Other Segments for the three months and
year ended May 27, 2023 include Sitrick and an immaterial amount
from taskforce from May 29, 2022 through May 31, 2022, the
completion date of the sale. Amounts previously reported for the
three months and year ended May 28, 2022 and May 29, 2021 included
the Sitrick and taskforce operating segments.
(2) Reconciling items are generally comprised of unallocated
corporate administrative costs, including management and board
compensation, corporate support function costs and other general
corporate costs that are not allocated to segments.
(3) A reconciliation of the Company’s net income to Adjusted
EBITDA on a consolidated basis is presented in tables on page 7 and
8.
RESOURCES CONNECTION,
INC.
SELECTED BALANCE SHEET, CASH
FLOW AND OTHER INFORMATION
(In thousands, except
consultant headcount and average rates)
May 27,
May 28,
SELECTED BALANCE SHEET INFORMATION:
2023
2022
(Unaudited)
Cash and cash equivalents
$
116,784
$
104,224
Trade accounts receivable, net of
allowance for doubtful accounts
$
137,356
$
153,154
Total assets
$
531,999
$
581,473
Current liabilities
$
97,084
$
124,322
Long-term debt
$
-
$
54,000
Total liabilities
$
117,479
$
209,024
Total stockholders’ equity
$
414,520
$
372,449
For the Years Ended
May 27,
May 28,
SELECTED CASH FLOW INFORMATION:
2023
2022
(Unaudited)
Cash flow -- operating activities
$
81,636
$
49,444
Cash flow -- investing activities
$
3,943
$
(2,961
)
Cash flow -- financing activities
$
(71,914
)
$
(13,371
)
Three Months Ended
May 27,
May 28,
SELECTED OTHER INFORMATION:
2023
2022
(Unaudited)
(Unaudited)
Consultant headcount, end of period
3,145
3,388
Average bill rate (1)
$
129
$
131
Average pay rate (1)
$
62
$
64
Common shares outstanding, end of
period
33,475
33,197
(1) Rates represent the weighted average bill rates and pay
rates across the countries in which we operate. Such weighted
average rates are impacted by the mix of our business across the
geographies as well as fluctuations in currency rates. Constant
currency average bill and pay rates using the same exchange rates
in the fourth quarter of fiscal 2022 were $130 and $62,
respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230724195146/en/
Analyst Contact: Jennifer Ryu, Chief Financial Officer
(US+) 1-714-430-6500 jennifer.ryu@rgp.com
Media Contact: Michael Sitrick (US+) 1-310-788-2850
mike_sitrick@sitrick.com
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