IRVINE, Calif., December 20, 2007 - 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 and finance, risk management and internal audit, information management, human capital, supply chain management and legal services, today announced financial results for its fiscal second quarter ended November 30, 2007.
Total revenue for the second quarter of fiscal 2008 improved 13% to $206.6 million from $182.8 million for the same quarter in fiscal 2007. Revenues in the U.S. were up 9% quarter-over-quarter while international revenues increased 27% (16% on a constant dollar basis).
Total revenue for the six months ended November 30, 2007 improved 15% to $400.8 million from $347.9 million for the comparable period of fiscal 2007. Revenues in the U.S. were up 11% for the first six months of fiscal 2008 and international revenues were up 29% (19% on a constant dollar basis).
"In light of market conditions, we are pleased with our continued revenue growth over the first six months of fiscal 2008," said Don Murray, chairman and chief executive officer of Resources.
Net income determined in accordance with generally accepted accounting principles ("GAAP") for the second quarter ended November 30, 2007, was $13.0 million, or $0.27 per diluted share, including non-cash stock-based compensation expense of $4.3 million net of tax. This compares with GAAP net income for the second quarter ended November 30, 2006, of $14.7 million, or $0.29 per diluted share, including non-cash stock-based compensation expense of $3.9 million net of tax.
Non-GAAP net income for the second quarter of fiscal 2008 (which excludes stock-based compensation expense and the related income tax expense) was $17.3 million, or $0.35 per diluted share, compared to $18.5 million, or $0.36 per diluted share, in the prior year quarter.
Net income determined in accordance with GAAP for the six months ended November 30, 2007, was $24.6 million, or $0.49 per diluted share, including non-cash stock-based compensation expense of $8.9 million net of tax. This compares with GAAP net income for the six months ended November 30, 2006, of $25.6 million, or $0.51 per diluted share, including non-cash stock-based compensation expense of $8.1 million net of tax.
Non-GAAP net income for the first six months of fiscal 2008 (which excludes stock-based compensation expense and the related income tax expense) was $33.5 million, or $0.66 per diluted share, compared to $33.7 million, or $0.66 per diluted share, in the prior year's first six months.
During the three months ended November 30, 2007 the company purchased 2,840,433 shares of its common stock for approximately $65 million or $22.94 per share.
On December 18, 2007, Resources acquired Domenica B.V., a leading Netherlands-based provider of actuarial services to pension and life insurance companies. Resources paid 13.5 million Euros in cash for 100% of the outstanding shares of Domenica and agreed to make additional earn-out payments based upon the achievement of certain financial metrics for Domenica's calendar years ended December 31, 2007 and 2008. The acquisition of Domenica is expected to be accretive to Resources throughout the balance of fiscal 2008. Domenica reported revenues of 13.5 million Euros for the year ended December 31, 2006.
"Actuarial services are in high demand and Domenica gives us an entrée into that service line," said Tony Cherbak, chief operating officer of Resources. "We believe this new service offering will allow for increased penetration of our collective client base."
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 - finance and accounting, information management, internal audit, human capital, legal services and supply chain management.
Resources Global was founded in 1996 within a Big Four accounting firm. Today, we are a publicly traded company with over 4,200 professionals, from more than 80 practice offices, annually serving over 2,000 clients around the world.
Headquartered in Irvine, California, Resources Global has served 81 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, December 20, 2007. This conference call will be available for listening via a webcast on the Company's website: http://www.resourcesglobal.com.
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," "should," or "will" or the negative of these terms or other comparable terminology. These forward-looking statements include expectation that the Domenica acquisition will be accretive throughout the balance of fiscal 2008 , as well as the Company's statements regarding other anticipated benefits of the Domenica acquisition 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 Resources Connection's Form 10-K for the year ended May 31, 2007 , and Form 10-Q for the quarter ended November 30, 2007 (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.
The Non-GAAP Income Statement in this release excludes stock-based compensation expense from the following non-GAAP line items: non-GAAP selling, general and administrative expenses, non-GAAP operating income before amortization and depreciation, non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share, and non-GAAP diluted shares used in net income per share calculation.
These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures and the Non-GAAP Income Statement are not based on any comprehensive set of accounting rules or principles. Resources believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Resources' results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Resources' results of operations in conjunction with the corresponding GAAP measures.
Resources believes that the presentation of non-GAAP selling, general and administrative expenses, non-GAAP operating income before amortization and depreciation, non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share and non-GAAP diluted shares used in net income per share calculation, when presented in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations.
For its internal budgeting process, Resources' management uses financial statements that do not include stock-based compensation expense related to employee stock options and employee stock purchases, and the income tax effects thereof. Resources' management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Resources.
For additional information on the items excluded by Resources Connection, Inc. from one or more of its non-GAAP financial measures, and for additional information regarding these non-GAAP measures, we refer you to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.
See table below for reconciliation of net income on a GAAP basis to non-GAAP net income, and diluted net income per share on a GAAP basis to non-GAAP diluted net income per share.
Contacts:
Jeff Bellows, Resources Global Professionals
(US+) 1-617-897-0350 or jeff.bellows@resources-us.com
Sarah Lazarus, CL-Media
(US+) 1-978-369-4478 or sarah@cl-media.com