Resources Connection, Inc. Reports Third Quarter Results for Fiscal 2013
Resources Connection, Inc. Reports Third Quarter Results for Fiscal 2013
Resources Connection, Inc. Reports Third Quarter Results for Fiscal 2013
- Company reports third quarter earnings per share of $0.11, up from $0.10 in prior year third quarter
- Company returns $8.5 million in capital to shareholders in dividends and stock buy-backs during third quarter
- Third quarter revenue is $138.0 million compared to prior year third quarter revenue of $143.3 million
- Company's Adjusted EBITDA* margin for third quarter is 8.3% compared to 8.6% in prior year third quarter
*Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, stock-based compensation and contingent consideration adjustments
IRVINE, Calif., April 2, 2013 - Resources Connection, Inc. (NASDAQ: RECN), a multinational professional services firm that provides to clients - through its operating subsidiary, Resources Global Professionals ("RGP") - 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 third quarter ended February 23, 2013.
Revenue for the third quarter of fiscal 2013 was $138.0 million, decreasing 2.3% (2.3% on a constant dollar basis) sequentially and 3.7% (3.8% on a constant dollar basis) compared to the prior year's third quarter revenue. Revenues in the U.S. were flat sequentially and improved 1.1% quarter-over-quarter. International revenues decreased 9.1% sequentially and 16.8% quarter-over-quarter (9.3% sequentially and 17.1% quarter-over-quarter on a constant dollar basis).
The Company's net income for the third quarter ended February 23, 2013, was $4.5 million, or $0.11 per diluted share. This compares to the Company's net income for the third quarter of fiscal 2012 of $4.3 million, or $0.10 per diluted share.
"Our third quarter revenues were negatively impacted due primarily to the wind down of a large mortgage servicing project resulting from our client's settlement with the U.S. government and a decline in international revenues following the winter holidays," said Tony Cherbak, President and Chief Operating Officer of RGP. "Despite the impact of the mortgage servicing project, I am pleased we grew our U.S. revenue and earnings per share quarter over quarter."
Gross margin was 37.1% in the third quarter of fiscal 2013, down 30 and 200 basis points from the third quarter of fiscal 2012 and second quarter of fiscal 2013, respectively. The decline was primarily driven by increased healthcare costs during the quarter. Selling, general and administrative expenses for the third quarter of fiscal 2013 were $41.6 million, a decrease of $1.8 million from the comparable quarter a year ago and $700,000 from the second quarter of fiscal 2013. Current quarter selling, general and administrative expenses benefited from the resolution of a legal matter and reduction of incentive compensation expenses.
Cash flow from operations and Adjusted EBITDA were $13.0 million and $11.4 million (8.3% of revenue), respectively, for the third quarter of fiscal 2013 compared to $12.8 million and $12.3 million (8.6% of revenue), respectively, for the third quarter of fiscal 2012.
"While we believe many of our clients are cautious regarding global economic conditions, we remain focused on serving our clients," said Don Murray, Executive Chairman and Chief Executive Officer of RGP. "Our attention to client service is evidenced by our continuing to serve all of our top fifty clients from fiscal 2012 during fiscal 2013."
The Company's revenue for the nine months ended February 23, 2013 was $416.2 million compared with $426.3 million for the first nine months ended February 25, 2012. The Company's net income for the nine months ended February 23, 2013 was $15.2 million, or $0.37 per diluted share. This compares to net income in the prior year's first nine months ended February 25, 2012 of $32.2 million, or $0.73 per diluted share (which includes the after tax impact of the adjustment of the estimated fair value of contingent consideration expense of $20.4 million or $0.46 per diluted share).
During the third quarter of fiscal 2013, the Company repurchased 509,000 shares of common stock for $6.0 million. The Company has approximately $84.8 million remaining under its board authorized stock buyback program. On March 21, 2013, the Company paid its quarterly dividend of $2.5 million to shareholders, representing a dividend of $0.06 per share.
ABOUT RGP
RGP, 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.
RGP was founded in 1996 within a Big Four accounting firm. Today, we are a publicly traded company with over 2,900 professionals, annually serving approximately 1,900 clients around the world from 75 practice offices.
Headquartered in Irvine, California, RGP has served 86 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 RGP is available at http://www.resourcesglobal.com.
RGP will hold a conference call for interested analysts and investors at 5:00 p.m., ET today, April 2, 2013. 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 April 9, 2013 at 855-859-2056. The password for the replay is 15567101. The call will also be archived on the RGP 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 expectations about global economic conditions. 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.
Media Contact:
Michael Sitrick
(US+) 1-310-788-2850 or mike_sitrick@sitrick.com
Analyst Contact:
Nate Franke, Chief Financial Officer
(US+) 1-714-430-6500 or nate.franke@resources-us.com