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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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strategically access specialized skills and expertise;

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effectively supplement internal resources;

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increase labor flexibility; and

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reduce their overall hiring and training costs.

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more flexible hours and work arrangements, coupled with competitive wages and benefits and a professional culture;

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challenging engagements that advance their careers, develop their skills and add to their experience base; and

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a work environment that provides a diversity of, and more control over, client engagements.

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a relationship-oriented approach to assess our clients’ project needs;

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highly qualified professionals with the requisite skills and experience;

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competitive rates on an hourly, instead of a per project, basis; and

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significant client control of their projects.

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Hire and retain highly qualified, experienced associates. We believe our highly qualified, experienced associates provide us with a distinct competitive advantage. Therefore, one of our priorities is to continue to attract and retain high-caliber associates. We believe we have been successful in attracting and retaining qualified professionals by providing challenging work assignments, competitive compensation and benefits, and continuing education and training opportunities, while offering flexible work schedules and more control over choosing client engagements.

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Maintain our distinctive culture. Our corporate culture is central to our business strategy and we believe has been a significant component of our success. Our senior management, virtually all of whom are Big Five alumni, has created a culture that combines the commitment to quality and the client service focus of a Big Five accounting firm with the entrepreneurial energy of an innovative, high-growth company. We seek associates and management with talent, integrity, enthusiasm and loyalty to strengthen our team and support our ability to provide clients with high-quality services. We believe that our culture has been instrumental to our success in hiring and retaining highly qualified associates and, in turn, attracting clients.

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Build consultative relationships with clients. We emphasize a relationship-oriented approach to business rather than a transaction-oriented or assignment-oriented approach. We believe the professional services experience of our management and associates enables us to understand the needs of our clients and to deliver an integrated, relationship-oriented approach to meeting their professional services needs. We regularly meet with our existing and prospective clients to understand their businesses and help them define their project needs. Once a project is defined, we identify associates with the appropriate skills and experience to meet the client’s needs. We believe that by partnering with our clients to solve their professional services needs, we can generate new opportunities to serve them. The strength of our client relationships is demonstrated by the fact that 48 of our largest 50 clients in fiscal 2001 remained clients in fiscal 2002.

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Build the Resources Connection brand. Our objective is to establish Resources Connection as the premier provider of project-based professional services. Our primary means of building our brand is by consistently providing high-quality, value-added services to our clients. We have also focused on building a significant referral network through our more than 1,050 associates on assignment and 300 management employees, most of whom have established relationships with a number of potential clients. In addition, we have ongoing national and local marketing efforts that reinforce the Resources Connection brand. These efforts include an advertising campaign commenced in the fourth quarter of fiscal 2002 in targeted business publications.

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Expanding work from existing clients. A principal component of our strategy is to secure additional project work from the more than 1,400 clients we served in fiscal 2002. Prior to the management-led buyout, we were unable to provide certain services to some of our clients due to regulatory constraints applicable to us as part of a Big Five accounting firm. Subsequent to the management-led buyout, we were able to expand the scope of the services we provide to our clients. We believe, based on discussions with our clients, that the amount of revenue we currently receive from most of our clients represents a relatively small percentage of the amount they spend on outsourced professional services, and that, consistent with industry trends, they will continue to increase the amount they spend on these services. We believe that by continuing to deliver high-quality services and by further developing our relationships with our clients, we will capture a significantly larger share of our clients’ expenditures for outsourced professional services.

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Growing our client base. We will continue to focus on attracting new clients. We plan to develop new client relationships primarily by leveraging the significant contact networks of our management and associates and through referrals from existing clients. In addition, we believe we will attract new clients by building our brand name and reputation and through our national and local marketing efforts. During this past year, we have seen more growth within key, existing clients, as opposed to growing through the addition of new middle market clients. We anticipate that our growth efforts this year will continue to focus on identifying strategic target accounts that tend to be large companies.

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Expanding geographically. We plan to expand geographically to meet the demand for outsourced professional services. We expect to add to our existing domestic office network with new offices strategically located to meet the needs of our existing clients and to create additional new client opportunities. We believe that there are also significant opportunities to grow our business internationally and, consequently, we intend to expand our international presence on a strategic and opportunistic basis.

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Providing additional professional services lines. We will continue to explore, and consider entry into, new professional services lines. Since fiscal 1999, we have diversified our professional services lines by entering into the human resources management, (including executive compensation and corporate governance consulting), the information technology segments, and internal audit services. Our considerations when evaluating new professional services lines include growth potential, profitability, cross-marketing opportunities and competition.

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financial analyses, such as product costing and margin analyses;

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tax-related projects, such as tax compliance and analysis of tax liabilities resulting from acquisitions; and

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resolving complex accounting problems, such as large out-of-balance accounts and unreconciled balances.

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performing special projects related to the bankruptcy;

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assisting with establishing proper cut-off related to the bankruptcy;

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assisting with the proof of claims process; and

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assisting with the integration of the proposed Plan of Reorganization.

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due diligence work;

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integration of financial reporting and accounting systems; and

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public reporting filings associated with the transaction.

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performing controller responsibilities at various sites, including preparing internal financial statements, closing the general ledger and managing the accounting staff;

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restructuring the fixed asset reporting system;

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assisting with the transition of financial functions during the divestiture of solid waste facilities and closing of other facilities;

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assisting with converting the newly acquired facilities’ systems to the parent’s systems; and

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preparing fuel tax returns and related tax schedules.

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assist with the finance and accounting issues of system implementations; and

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maintain daily operations during the implementation and conversion process in order to minimize disruption to the organization.

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documenting and preparing a flowchart of the accounting system and existing business processes, practices and workflows;

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reviewing internal controls and developing an operations manual;

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documenting the new accounting system processes and procedures;

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performing pre- and post-conversion testing;

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hiring and training new employees; and

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designing training programs.

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interim senior financial management, including controller or accounting manager tasks;

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monthly/quarterly/year-end closings;

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audit preparation;

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public reporting; and

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budgeting and forecasting.

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designing a work program and package format to be used by 23 associates in teams across six states;

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completing a detailed review of approximately 180 entities’ balance sheets, compiling documentation, and obtaining support for the entire trial balance; and

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proposing adjusting entries and recommending subsequent internal accounting control system and procedure changes.

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designing a scalable general ledger system to accommodate multiple entities;

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setting up the accounts payable system for all entities including check disbursements and wire transfers of funds;

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designing a system for processing semi-monthly payroll;

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developing cash receipts function including the performance of all treasury functions (collections, deposits, investments); and

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creating a model for projecting cash flows from individual entities.

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development of human resources management procedures, training and policies;

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compensation program design and implementation;

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interim senior human resources management; and

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assistance in complying with governmental employment regulations.

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evaluating existing health and welfare plans;

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designing a plan of integration for employee benefit programs of various subsidiaries;

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developing a plan for early retirement programs associated with a merger; and

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researching ERISA compliance in various employer health and welfare plans.

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evaluating the existing human resources information system, or HRIS;

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reviewing vendors and implementing a new HRIS system;

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updating human resources policies and procedures to reflect consistent corporate policies across numerous acquired companies; and

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evaluating the various retirement benefits for each of the multiple subsidiaries and acquired companies.

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financial system/enterprise resource planning implementation and post implementation optimization

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HRIS implementation and integration; and

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supporting analytical systems such as consolidation and budgeting and planning tools.

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creating new reports to satisfy statutory and operational requirements and streamlining and rationalizing 400 existing reports;

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re-implementing a chart of accounts to support reporting requirements of diverse operational segments;

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executing a communication plan to educate and create buy-in with the users; and

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completing other special projects such as legal entity rationalization.

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local sales initiatives focused on existing clients and target companies;

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brand marketing activities; and

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national and local direct mail programs.

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consulting firms;

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loaned employees of the Big Five accounting firms;

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traditional and Internet-based staffing firms and their specialized divisions; and

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the in-house resources of our clients.

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(1)

All revenue and direct cost of services for the periods presented have been reclassified to comply with the provisions of Emerging Issues Task Force (EITF) Issue No. 01-14 “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred”. This EITF, issued in April 2002, requires companies to account for reimbursements received for ‘out-of-pocket’ expenses as revenue. Previously, Resources Connection recorded such reimbursements as a reduction of direct cost of services. As a result of this new rule, revenue and direct cost of services each increased by $1,657, $1,744, $1,127, $127, $459 and $177, for the years ended May 31, 2002, 2001 and 2000, the period from November 16, 1998 through May 31, 1999, the period from June 1, 1998 through March 31, 1999, and the year ended May 31, 1998, respectively.

(2)

Because Resources Connection LLC is a limited liability company, income taxes on any income realized by Resources Connection LLC are the obligation of its members and, accordingly, Resources Connection LLC records no provision for income taxes. The pro forma net income for Resources Connection LLC for periods through March 31, 1999 have been computed as if Resources Connection LLC had been fully subject to federal and state income taxes as a C corporation.

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assessment of any current tax exposure together with temporary differences resulting from different treatment of transactions for tax and financial statement purposes. These differences result in deferred tax assets and liabilities that are included in our Consolidated Balance Sheets. The recovery of deferred tax assets from future taxable income must be assessed and, to the extent recovery is not likely, we will establish a valuation allowance. An increase in the valuation allowance results in recording additional tax expense. If the ultimate tax liability differs from the amount of tax expense we have reflected in the Consolidated Statements of Income, additional tax expense may need to be recorded.

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(1)

All revenue and direct cost of services for the periods presented have been reclassified to comply with the provisions of Emerging Issues Task Force (EITF) Issue No. 01-14 “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred”. This EITF, issued in April 2002, requires companies to account for reimbursements received for ‘out-of-pocket’ expenses as revenue. Previously, Resources Connection recorded such reimbursements as a reduction of direct cost of services. As a result of this new rule, revenue and direct cost of services each increased by $1,127, $1,744, and $1,657 for the years ended May 31, 2000, 2001 and 2002, respectively.

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(1)

All revenue and direct cost of services for the periods presented have been reclassified to comply with the provisions of EITF Issue No. 01-14 “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred”. This EITF, issued in April 2002, requires companies to account for reimbursements received for ‘out-of-pocket’ expenses as revenue. Previously, Resources Connection recorded such reimbursements as a reduction of direct cost of services. As a result of this new rule, revenue and direct cost of services each increased by $398, $353, $438, $468, $491, $474, $424,and $355, for the quarters ended May 31 and February 28, 2002, November 30, August 31, May 31 and February 28, 2001 and November 30 and August 31, 2000, respectively.

(2)

Net income per common share calculations for each of the quarters were based upon the weighted average number of shares outstanding for each period, and the sum of the quarters may not necessarily be equal to the full year net income per common share amount.

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our ability to attract new clients and retain current clients;

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the mix of client projects;

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the announcement or introduction of new services by us or any of our competitors;

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the expansion of the professional services offered by us or any of our competitors into new locations both nationally and internationally;

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changes in the demand for our services by our clients;

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the entry of new competitors into any of our markets;

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the number of associates eligible for our offered benefits as the average length of employment with Resources increases;

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the number of holidays in a quarter, particularly the day of the week on which they occur;

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changes in the pricing of our professional services or those of our competitors;

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the amount and timing of operating costs and capital expenditures relating to management and expansion of our business; and

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the timing of acquisitions and related costs, such as compensation charges that fluctuate based on the market price of our common stock.

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provide our associates with full-time employment;

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obtain the type of challenging and high-quality projects that our associates seek;

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pay competitive compensation and provide competitive benefits; and

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provide our associates with flexibility as to hours worked and assignment of client engagements.

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consulting firms;

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employees loaned by the Big Five accounting firms;

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traditional and Internet-based staffing firms; and

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the in-house resources of our clients.

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grow our client base;

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expand profitably into new cities;

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provide additional professional services lines;

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maintain margins in the face of pricing pressures; and

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manage costs.

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difficulties in staffing and managing foreign offices as a result of, among other things, distance, language and cultural differences;

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expenses associated with customizing our professional services for clients in foreign countries;

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foreign currency exchange rate fluctuations, when we sell our professional services in denominations other than U.S. dollars;

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protectionist laws and business practices that favor local companies;

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political and economic instability in some international markets;

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multiple, conflicting and changing government laws and regulations;

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trade barriers;

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reduced protection for intellectual property rights in some countries; and

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potentially adverse tax consequences.

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diversion of management’s attention from other business concerns;

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failure to integrate the acquired company with our existing business;

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failure to motivate, or loss of, key employees from either our existing business or the acquired business;

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potential impairment of relationships with our employees and clients;

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additional operating expenses not offset by additional revenue;

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incurrence of significant non-recurring charges;

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incurrence of additional debt with restrictive covenants or other limitations;

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dilution of our stock as a result of issuing equity securities; and

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assumption of liabilities of the acquired company.

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our ability to attract new clients and retain current clients;

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the mix of client projects;

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the announcement or introduction of new services by us or any of our competitors;

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the expansion of the professional services offered by us or any of our competitors into new locations both nationally and internationally;

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changes in the demand for our services by our clients;

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the entry of new competitors into any of our markets;

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the number of holidays in a quarter, particularly the day of the week on which they occur;

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changes in the pricing of our professional services or those of our competitors;

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the amount and timing of operating costs and capital expenditures relating to management and expansion of our business; and

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the timing of acquisitions and related costs, such as compensation charges that fluctuate based on the market price of our common stock.

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authorize our board of directors to establish one or more series of undesignated preferred stock, the terms of which can be determined by the board of directors at the time of issuance;

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divide our board of directors into three classes of directors, with each class serving a staggered three-year term. Because the classification of the board of directors generally increases the difficulty of replacing a majority of the directors, it may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us and may make it difficult to change the composition of the board of directors;

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prohibit cumulative voting in the election of directors which, if not prohibited, could allow a minority stockholder holding a sufficient percentage of a class of shares to ensure the election of one or more directors;

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require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing;

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state that special meetings of our stockholders may be called only by the chairman of the board of directors, our chief executive officer, by the board of directors after a resolution is adopted by a majority of the total number of authorized directors, or by the holders of not less than 10% of our outstanding voting stock;

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establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting;

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provide that certain provisions of our certificate of incorporation can be amended only by supermajority vote of the outstanding shares and that our bylaws can be amended only by supermajority vote of the outstanding shares of our board of directors;

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allow our directors, not our stockholders, to fill vacancies on our board of directors; and

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provide that the authorized number of directors may be changed only by resolution of the board of directors.

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ITEM  8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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ITEM  9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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(1)

Includes 101,000 shares available for restricted stock awards under the Company’s 1998 Employee Stock Purchase Plan. We do not intend to grant any further awards pursuant to the 1998 Employee Stock Purchase Plan.

(2)

The Company does not have any equity compensation plans that have not been approved by security holders.

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