Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Resources Connection (RGP) due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The earnings report is expected on October 1, 2024, with a consensus estimate of $0.04 per share, reflecting an 80% decrease year-over-year. Revenues are projected at $137.8 million, down 19% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised down by 66.67% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a negative reading of -100% for Resources Connection, suggesting analysts have become more pessimistic. The stock holds a Zacks Rank of 3, complicating predictions of an earnings beat [10][8]. Historical Performance - Resources Connection has exceeded consensus EPS estimates in the last four quarters, with a notable surprise of +180% in the most recent quarter where actual earnings were $0.28 compared to an expected $0.10 [11][12]. Conclusion - Resources Connection does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors before making investment decisions [15][13].

Core Viewpoint - Resources Connection (RGP) is identified as a potentially undervalued stock with strong value metrics, making it an attractive investment opportunity in the current market environment [2][4]. Valuation Metrics - RGP has a P/E ratio of 10.43, significantly lower than the industry average of 15.87, indicating potential undervaluation [2]. - The stock's P/B ratio stands at 0.89, compared to the industry's average P/B of 2.19, further suggesting that RGP may be undervalued [3]. - RGP's PEG ratio is 0.70, which is lower than the industry average PEG of 1.59, highlighting its favorable valuation in relation to expected earnings growth [7]. - The P/CF ratio for RGP is 12.55, which is attractive compared to the industry's average P/CF of 12.99, indicating solid cash flow prospects [8]. Earnings Outlook - The strength of RGP's earnings outlook contributes to its classification as an impressive value stock at the moment [4].

Part I [Business Overview](index=5&type=section&id=Item%201.%20Business) RGP is a global consulting firm delivering enterprise initiatives through a flexible talent model and strategic growth strategies - RGP is a global consulting firm serving **1,800 clients**, including **88% of the Fortune 100**, with approximately **3,400 professionals**[56](index=56&type=chunk)[58](index=58&type=chunk) - The company operates through two main segments: RGP, accounting for over **90% of consolidated revenue**, and Sitrick, a crisis communications firm[59](index=59&type=chunk)[60](index=60&type=chunk) - RGP's strategy emphasizes retaining highly qualified consultants and fostering long-term client relationships, evidenced by a **75% retention rate** for its top 100 clients over five years[92](index=92&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - Growth strategy focuses on brand marketing, client base expansion, optimizing digital service offerings, and strategic acquisitions[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - As of May 25, 2024, the company had **3,376 employees**, including **2,585 consultants**, with a strong emphasis on culture and DE&I[129](index=129&type=chunk)[130](index=130&type=chunk)[133](index=133&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including economic downturns, intense competition, human capital challenges, operational dependencies, and cybersecurity threats - The business faces risks from economic downturns, geopolitical conflicts, and high interest rates, potentially reducing client spending and impacting receivables[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - The highly competitive professional services market includes consulting, accounting, and staffing firms, many with greater resources and recognition[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - Success depends on attracting and retaining highly qualified consultants and key senior management; failure could adversely affect operations[234](index=234&type=chunk)[237](index=237&type=chunk) - Business relies on securing new projects and contract renewals; automation and AI could reduce demand, and an unsuitable pay/bill ratio could compress gross margins[257](index=257&type=chunk)[258](index=258&type=chunk)[262](index=262&type=chunk) - Systems are vulnerable to security breaches and cyber-attacks, risking data loss, reputational harm, and significant costs[330](index=330&type=chunk)[333](index=333&type=chunk)[336](index=336&type=chunk) - Compliance with evolving data privacy laws (e.g., GDPR, CCPA) and other regulations is critical; non-compliance could result in penalties and reputational damage[338](index=338&type=chunk)[344](index=344&type=chunk)[346](index=346&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - Not applicable[367](index=367&type=chunk) [Cybersecurity](index=26&type=section&id=Item%201C.%20Cybersecurity) The company maintains an enterprise-wide cybersecurity strategy, overseen by the CIO and Audit Committee, to manage evolving threats - The company has an enterprise-wide strategy to manage cybersecurity threats, including an Information Assurance Program and a Cybersecurity Incident Response Plan[370](index=370&type=chunk)[371](index=371&type=chunk) - Cybersecurity governance is overseen by the Audit Committee, receiving quarterly updates from the CIO who leads the Cybersecurity Incident Response Team[377](index=377&type=chunk)[378](index=378&type=chunk) - As of the report date, known cybersecurity risks are not believed to have materially affected or likely to materially affect business, operations, or financial condition[375](index=375&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company owns its Irvine headquarters, which is being sold for **$13.0 million**, and leases offices globally, deeming current facilities adequate - The company owns its **57,000 sq. ft.** principal executive office in Irvine, California, with an agreement to sell it for **$13.0 million** by August 15, 2024[379](index=379&type=chunk) - The company leases facilities in over **36 cities** across **13 countries**, including major global business centers[380](index=380&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[382](index=382&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[384](index=384&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, pays a **$0.14** quarterly dividend, and has **$42.2 million** remaining for repurchases, though its stock has underperformed peers - The company's common stock is listed on The Nasdaq Global Select Market under the symbol **"RGP"**[388](index=388&type=chunk) - A quarterly dividend of **$0.14 per share** was declared in each quarter of fiscal 2024, 2023, and 2022, subject to Board approval[389](index=389&type=chunk) Issuer Purchases of Equity Securities (Q4 FY2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | March 24, 2024 – April 20, 2024 | 252,396 | $11.89 | | Total | 252,396 | $11.89 | - As of May 25, 2024, approximately **$42.2 million** remained available for future repurchases under the stock repurchase program[11](index=11&type=chunk) - The 5-year cumulative total return for the company's stock was **86.85**, underperforming the Russell 3000 (**196.98**), SIC Code 8742 (**164.41**), and a customized Peer Group (**221.84**), based on a **$100** investment on May 24, 2019[14](index=14&type=chunk) [Reserved](index=30&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2024 revenue decreased **18.4%** to **$632.8 million** and net income fell to **$21.0 million**, driven by reduced client spending amid strategic focus areas [Fiscal 2024 Strategic Focus Areas](index=30&type=section&id=Fiscal%202024%20Strategic%20Focus%20Areas) The company's fiscal 2024 strategy focused on digital transformation, brand amplification, operating model evolution, value-based pricing, and targeted M&A - The company's five strategic focus areas for fiscal 2024 included digital transformation, brand amplification, operating model evolution, value-based pricing, and targeted M&A[313](index=313&type=chunk) - Digital transformation efforts include a multi-year global technology project, with a new talent management system launched and a new enterprise financial system planned for late 2024[312](index=312&type=chunk) - Strategic M&A included the acquisition of CloudGo in November 2023 and Reference Point, which closed on July 1, 2024[1](index=1&type=chunk)[3](index=3&type=chunk)[21](index=21&type=chunk) [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies involve significant estimates for revenue, credit losses, income taxes, stock-based compensation, and asset valuations, with no goodwill impairment in fiscal 2024 - Key critical accounting policies requiring significant estimates include revenue recognition, allowance for credit losses, income taxes, stock-based compensation, and valuation of long-lived assets, goodwill, and business combinations[6](index=6&type=chunk) - The allowance for credit losses was **$2.8 million** as of May 25, 2024, compared to **$3.3 million** in the prior year[8](index=8&type=chunk) - A valuation allowance of **$8.6 million** was established on deferred tax assets as of May 25, 2024, compared to **$6.5 million** in the prior year[26](index=26&type=chunk) - Stock-based compensation expense was **$5.7 million** in fiscal 2024, down from **$9.5 million** in fiscal 2023[32](index=32&type=chunk) - The annual goodwill impairment assessment for the RGP reporting unit in Q4 fiscal 2024 concluded no impairment[41](index=41&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Same-Day Constant Currency Revenue and Adjusted EBITDA to assess performance, providing a clearer view of core operating trends Reconciliation of Revenue to Same-Day Constant Currency Revenue (FY 2024) | (In thousands) | As reported (GAAP) | Currency impact | Business days impact | Same-day constant currency revenue | | :--- | :--- | :--- | :--- | :--- | | North America | $543,926 | $(2,153) | - | $541,773 | | Europe | $38,383 | $(1,687) | $(639) | $36,057 | | Asia Pacific | $50,492 | $1,915 | $(624) | $51,783 | | **Total Consolidated** | **$632,801** | **$(1,925)** | **$(1,263)** | **$629,613** | Reconciliation of Net Income to Adjusted EBITDA (Fiscal Years Ended) | (In thousands) | May 25, 2024 | May 27, 2023 | May 28, 2022 | | :--- | :--- | :--- | :--- | | Net income | $21,034 | $54,359 | $67,175 | | EBITDA | $37,193 | $81,727 | $92,515 | | **Adjusted EBITDA** | **$51,483** | **$100,194** | **$103,131** | | **Adjusted EBITDA Margin** | **8.1%** | **12.9%** | **12.8%** | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Fiscal 2024 revenue decreased **18.4%** to **$632.8 million** and net income fell to **$21.0 million**, driven by reduced billable hours and lower average bill rates Consolidated Statements of Operations Summary | (In thousands) | FY 2024 | % of Revenue | FY 2023 | % of Revenue | | :--- | :--- | :--- | :--- | :--- | | Revenue | $632,801 | 100.0% | $775,643 | 100.0% | | Gross profit | $246,068 | 38.9% | $313,142 | 40.4% | | Income from operations | $28,776 | 4.5% | $72,788 | 9.5% | | Net income | $21,034 | 3.3% | $54,359 | 7.0% | - Fiscal 2024 revenue decreased by **$142.8 million** (**18.4%**) year-over-year, driven by a **13.8%** decrease in billable hours and a **4.7%** decline in average bill rate due to reduced client spending[103](index=103&type=chunk) - Revenue declined across all geographic regions in fiscal 2024, with North America most impacted, showing a **20.1%** decrease (**20.4%** on a same-day constant currency basis)[104](index=104&type=chunk) - Direct cost of services as a percentage of revenue increased to **61.1%** in fiscal 2024 from **59.6%** in fiscal 2023, partly due to higher employee health benefit expenses[107](index=107&type=chunk) - SG&A expenses decreased by **$20.0 million** in fiscal 2024, primarily due to a **$17.1 million** reduction in bonuses and commissions and a **$4.4 million** favorable contingent consideration adjustment[109](index=109&type=chunk) - The effective tax rate for fiscal 2024 was **29.5%**, higher than **25.1%** in fiscal 2023, primarily due to a non-recurring increase in forfeiture of stock options[113](index=113&type=chunk) [Operating Results of Segments](index=43&type=section&id=Operating%20Results%20of%20Segments) In fiscal 2024, the RGP segment's revenue decreased **18.5%** to **$622.9 million** and Adjusted EBITDA fell **36.0%**, while Other Segments also saw revenue and EBITDA declines Revenue and Adjusted EBITDA by Segment (FY 2024 vs FY 2023) | (In thousands) | FY 2024 Revenue | FY 2023 Revenue | FY 2024 Adj. EBITDA | FY 2023 Adj. EBITDA | | :--- | :--- | :--- | :--- | :--- | | RGP | $622,895 | $764,511 | $84,677 | $132,377 | | Other Segments | $9,906 | $11,132 | $(676) | $1,179 | | **Total** | **$632,801** | **$775,643** | **$51,483** | **$100,194** | - RGP segment revenue decreased by **$141.6 million** (**18.5%**) in fiscal 2024, consistent with the overall consolidated trend[149](index=149&type=chunk) - Other Segments' revenue decreased by **$1.2 million** (**11.0%**) in fiscal 2024, primarily due to a decline in Sitrick's revenue affected by court proceeding delays[151](index=151&type=chunk) - RGP segment's Adjusted EBITDA decreased by **$47.7 million** (**36.0%**) in fiscal 2024, mainly due to the significant drop in revenue[153](index=153&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) As of May 25, 2024, the company had **$108.9 million** in cash and **$173.6 million** available credit, with cash from operations at **$21.9 million** for fiscal 2024 - As of May 25, 2024, the company had **$108.9 million** in cash and cash equivalents and no debt outstanding under its **$175.0 million** credit facility, with **$173.6 million** remaining capacity[157](index=157&type=chunk)[160](index=160&type=chunk) - The company is undergoing a multi-year technology platform upgrade, with an estimated **$10.0 million to $20.0 million** in remaining investments expected, largely in fiscal 2025[163](index=163&type=chunk) - In fiscal 2024, the company acquired CloudGo for initial cash consideration of **$7.4 million** and entered an agreement to acquire Reference Point, which closed on July 1, 2024[165](index=165&type=chunk)[166](index=166&type=chunk) Cash Flow Summary (Fiscal Years Ended) | (In millions) | May 25, 2024 | May 27, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21.9 | $81.6 | | Net cash (used in) provided by investing activities | $(8.6) | $3.9 | | Net cash used in financing activities | $(20.7) | $(71.9) | - Net cash used in financing activities in fiscal 2024 totaled **$20.7 million**, consisting mainly of **$18.8 million** in dividend payments and **$8.0 million** in common stock repurchases[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and foreign currency exchange rate risks, with **17.8%** of fiscal 2024 revenues from outside the U.S - The company is exposed to interest rate risk on cash equivalents and its variable-rate credit facility, with no outstanding borrowings as of May 25, 2024[206](index=206&type=chunk)[207](index=207&type=chunk) - Foreign currency exchange rate risk exists as **17.8%** of fiscal 2024 revenues were generated outside the U.S., impacting reported results[208](index=208&type=chunk) - The company does not currently use financial hedges to mitigate foreign currency risks, believing the economic exposure has not been material[210](index=210&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements and the independent auditor's report, including detailed notes on accounting policies and financial components - The independent auditor, RSM US LLP, issued an unqualified opinion on the consolidated financial statements and internal control over financial reporting as of May 25, 2024[242](index=242&type=chunk) - Critical Audit Matters included the valuation of the RGP reporting unit for goodwill impairment testing and the acquisition-date contingent consideration for the CloudGo Pte Ltd acquisition[250](index=250&type=chunk)[275](index=275&type=chunk) [Consolidated Financial Statements](index=53&type=section&id=Consolidated%20Financial%20Statements) As of May 25, 2024, total assets were **$510.9 million**, total liabilities **$92.2 million**, with fiscal 2024 revenue at **$632.8 million** and net income at **$21.0 million** Consolidated Balance Sheet Highlights (as of May 25, 2024) | (In thousands) | Amount | | :--- | :--- | | Cash and cash equivalents | $108,892 | | Total current assets | $240,755 | | Goodwill | $216,579 | | Total assets | $510,914 | | Total current liabilities | $72,433 | | Total liabilities | $92,151 | | Total stockholders' equity | $418,763 | Consolidated Statement of Operations Highlights (Year ended May 25, 2024) | (In thousands, except per share) | Amount | | :--- | :--- | | Revenue | $632,801 | | Gross profit | $246,068 | | Income from operations | $28,776 | | Net income | $21,034 | | Diluted EPS | $0.62 | Consolidated Statement of Cash Flows Highlights (Year ended May 25, 2024) | (In thousands) | Amount | | :--- | :--- | | Net cash provided by operating activities | $21,919 | | Net cash used in investing activities | $(8,554) | | Net cash used in financing activities | $(20,709) | | Net decrease in cash | $(7,892) | [Notes to Consolidated Financial Statements](index=61&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, including the CloudGo acquisition for **$7.4 million** cash and **$12.0 million** contingent consideration, **$216.6 million** goodwill, and a **29.5%** effective tax rate - On November 15, 2023, the company acquired CloudGo for **$7.4 million** cash (net of cash acquired) and up to **$12.0 million** in contingent consideration, including **$9.6 million** in goodwill[532](index=532&type=chunk)[533](index=533&type=chunk)[546](index=546&type=chunk) - Goodwill increased from **$206.7 million** in fiscal 2023 to **$216.6 million** in fiscal 2024 due to the CloudGo acquisition; a **$3.0 million** impairment for Sitrick was recorded in fiscal 2023[443](index=443&type=chunk)[442](index=442&type=chunk) - As of May 25, 2024, operating lease liabilities totaled **$13.3 million** with a weighted-average remaining lease term of **3.5 years**[415](index=415&type=chunk)[416](index=416&type=chunk) - The company has a **$175.0 million** senior secured revolving credit facility maturing in November 2026, with no debt outstanding and **$173.6 million** remaining capacity as of May 25, 2024[552](index=552&type=chunk)[556](index=556&type=chunk) - The effective tax rate for fiscal 2024 was **29.5%**, compared to **25.1%** in fiscal 2023 and **19.0%** in fiscal 2022[566](index=566&type=chunk) - During fiscal 2024, the company repurchased **606,254 shares** of common stock for **$8.0 million**, with **$42.2 million** remaining available under the repurchase program as of May 25, 2024[596](index=596&type=chunk) - Stock-based compensation expense was **$5.7 million** in fiscal 2024, a decrease from **$9.5 million** in fiscal 2023[590](index=590&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=89&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[640](index=640&type=chunk) [Controls and Procedures](index=89&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that the company's disclosure controls and internal control over financial reporting were effective as of May 25, 2024 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of May 25, 2024[641](index=641&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of May 25, 2024, a conclusion supported by the independent auditor's audit[654](index=654&type=chunk)[632](index=632&type=chunk) [Other Information](index=90&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[656](index=656&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=90&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[405](index=405&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=90&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2024 proxy statement - Information for this item is incorporated by reference from the company's 2024 proxy statement[407](index=407&type=chunk) [Executive Compensation](index=90&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2024 proxy statement - Information for this item is incorporated by reference from the company's 2024 proxy statement[408](index=408&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2024 proxy statement, detailing outstanding options and available securities under equity plans - Information regarding security ownership is incorporated by reference from the company's 2024 proxy statement[409](index=409&type=chunk) Equity Compensation Plan Information (as of May 25, 2024) | Category | Number of Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Number of Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 3,422,166 | $16.36 | 2,518,159 | [Certain Relationships and Related Transactions, and Director Independence](index=91&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's 2024 proxy statement - Information for this item is incorporated by reference from the company's 2024 proxy statement[426](index=426&type=chunk) [Principal Accountant Fees and Services](index=91&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2024 proxy statement - Information for this item is incorporated by reference from the company's 2024 proxy statement[412](index=412&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=92&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including an exhibit index - This item includes the consolidated financial statements, notes, and the report of the independent registered public accounting firm[429](index=429&type=chunk)[434](index=434&type=chunk) - An index of exhibits filed with the report is provided, including corporate governance documents, material contracts, and certifications[661](index=661&type=chunk)[430](index=430&type=chunk) [Form 10-K Summary](index=95&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[435](index=435&type=chunk)

Financial Data and Key Metrics Changes - In Q4, the company achieved revenue of $148.2 million and a gross margin of 40.2%, both significantly above the high end of the outlook ranges provided in April [60] - The run rate SG&A was $46.5 million, reflecting an 11% improvement from the previous fiscal year, primarily due to lower management compensation costs [68] - Adjusted EBITDA improved to $13.1 million, resulting in an 8.8% adjusted EBITDA margin during the quarter [61] - Revenue declined by 20% year-over-year on a same-day constant currency basis, with demand in North America and Europe remaining cautious [62] Business Line Data and Key Metrics Changes - Countsy and Veracity showed positive performance, with Countsy growing revenue year-over-year and Veracity achieving its best top-line performance since joining RGP in 2019 [63] - The Asia Pacific region experienced a 9% year-over-year revenue growth, driven by project opportunities with multinational clients [63] Market Data and Key Metrics Changes - The pricing environment remained competitive globally, with the enterprise average bill rate decreasing to $120 from $129 a year ago, although the U.S. standalone average bill rate increased by 1% [66] - The company noted a heavier mix of business in Europe and Asia Pacific, which typically results in lower gross margins [65] Company Strategy and Development Direction - The company is focusing on evolving its business into three core engagement models: on-demand talent, consulting, and outsourced services, to better meet client needs [19][28] - A new enterprise brand will be launched to enhance stakeholder understanding of the company's offerings and differentiate it from competitors [22] - The acquisition of Reference Point, a management consulting firm, is expected to expand the company's advisory services in the financial services sector [36][70] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, anticipating improvements as clients begin to invest more confidently [14][17] - The company is preparing for a potential upturn in demand, emphasizing the importance of talent acquisition and management to respond quickly to client needs [87] - The first quarter outlook projects revenue between $135 million and $140 million, reflecting typical summer seasonality and ongoing macroeconomic challenges [75] Other Important Information - The company maintains a strong balance sheet with $109 million in cash and no outstanding debt, allowing for continued investment in strategic areas [69] - The company is on track to complete its technology transformation project by the end of the calendar year [72] Q&A Session Summary Question: How has the rollout of talent management and contract management systems gone? - Management reported an outstanding launch with significant efficiency improvements and plans for international rollout [84][85] Question: How well positioned is the company if an upturn occurs sooner than expected? - Management highlighted three main engines of revenue, talent acquisition, and delivery that are ready to respond quickly to increased demand [87] Question: What are the company's thoughts on being more aggressive with share buybacks? - Management indicated that the current stock price is attractive for buybacks and that they may increase the pace of repurchases [89] Question: What is the organic constant currency same-day revenue year-over-year for the first quarter? - The company expects a decline of approximately 20% on a constant currency basis for the first quarter [94] Question: Are there specific sectors driving the outperformance in Q4? - North America, particularly in healthcare and financial services, performed better than expected, along with strong performance in Asia Pacific [102]

Company Performance - Resources Connection reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, but down from $0.44 per share a year ago [8] - The company posted revenues of $148.2 million for the quarter ended May 2024, surpassing the Zacks Consensus Estimate by 5.61%, but down from $184.45 million year-over-year [2] - Over the last four quarters, Resources Connection has surpassed consensus EPS estimates four times [9] Stock Performance - Resources Connection shares have declined approximately 22.6% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $153.24 million, and for the current fiscal year, it is $1.01 on revenues of $659.69 million [5] Industry Outlook - The Staffing Firms industry, to which Resources Connection belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook [13] - The estimate revisions trend for Resources Connection is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [12][11]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Fourth Quarter Fiscal 2024 Performance](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202024%20Performance) In the fourth quarter of fiscal 2024, the company's revenue declined 19.7% year-over-year to $148.2 million, primarily due to a challenging macroeconomic environment leading to reduced client spending and lower bill rates. Q4 FY2024 Key Financial Metrics (vs. Q4 FY2023) | Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $148.2M | $184.4M | -19.7% | | **Gross Margin** | 40.2% | 41.1% | -90 bps | | **SG&A** | $46.4M | $56.5M | -18.0% | | **Net Income** | $10.5M | $11.8M | -11.1% | | **Net Income Margin** | 7.1% | 6.4% | +70 bps | | **Diluted EPS** | $0.31 | $0.35 | -11.4% | | **Adjusted EBITDA** | $13.1M | $23.2M | -43.6% | | **Adjusted EBITDA Margin** | 8.8% | 12.6% | -380 bps | - The revenue decline was driven by a **13.0% decrease in billable hours** and a **7.0% decline in the average bill rate**, reflecting a tepid demand environment, cautious client spending, and a competitive pricing landscape[23](index=23&type=chunk) - SG&A expenses improved primarily due to a **$4.4 million favorable non-cash contingent consideration adjustment** related to the CloudGo acquisition and lower management compensation, bonuses, and commissions[24](index=24&type=chunk) - The effective tax rate for Q4 FY2024 was significantly lower at **9.0%** compared to **31.4%** in the prior year, mainly due to nontaxable income from the contingent consideration adjustment and other tax benefits[14](index=14&type=chunk) [Full Fiscal Year 2024 Performance](index=1&type=section&id=Full%20Fiscal%20Year%202024%20Performance) For the full fiscal year 2024, revenue decreased by 18.4% to $632.8 million compared to the prior year, leading to a significant drop in profitability with net income falling to $21.0 million and diluted EPS decreasing to $0.62. Full Fiscal Year 2024 Key Financial Metrics (vs. FY2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $632.8M | $775.6M | -18.4% | | **Gross Margin** | 38.9% | 40.4% | -150 bps | | **SG&A** | $208.9M | $228.8M | -8.7% | | **Net Income** | $21.0M | $54.4M | -61.4% | | **Net Income Margin** | 3.3% | 7.0% | -370 bps | | **Diluted EPS** | $0.62 | $1.59 | -61.0% | | **Adjusted EBITDA** | $51.5M | $100.2M | -48.6% | | **Adjusted EBITDA Margin** | 8.1% | 12.9% | -480 bps | - The annual revenue decline was attributed to a **13.8% decrease in billable hours** and a **4.7% decline in the average bill rate**, caused by reduced client spending and a competitive pricing environment[26](index=26&type=chunk) - SG&A reduction was driven by a **$17.1 million decrease in bonuses and commissions**, a **$4.4 million favorable contingent consideration adjustment**, and lower stock and management compensation, partially offset by restructuring and acquisition costs[27](index=27&type=chunk) - The effective tax rate for FY2024 increased to **29.5%** from **25.1%** in FY2023, primarily due to a non-recurring increase in forfeiture of stock options[52](index=52&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO, Kate W. Duchene, highlighted that the business stabilized in the fourth quarter, with results exceeding the company's outlook, and management is focused on controlling costs while preparing for future growth. - Management reported business stabilization in Q4, delivering results above their outlook ranges despite macroeconomic challenges[11](index=11&type=chunk) - The company is focused on cost control and setting a foundation for growth once broader human capital sector conditions improve[11](index=11&type=chunk) - Strategic priorities for the upcoming year include unlocking cross-sell opportunities in digital transformation and data modernization, and expanding into broader buying centers within the existing A-list client base[11](index=11&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Summary of Consolidated Financial Results](index=4&type=section&id=Summary%20of%20Consolidated%20Financial%20Results) The consolidated financial results show a year-over-year decline in key performance indicators for both the fourth quarter and the full fiscal year 2024, with revenue, gross profit, and net income all decreasing compared to fiscal 2023. Consolidated Income Statement Highlights (in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $148,198 | $184,449 | $632,801 | $775,643 | $805,018 | | **Gross Profit** | $59,583 | $75,718 | $246,068 | $313,142 | $316,642 | | **Income from Operations** | $11,285 | $17,049 | $28,776 | $72,788 | $83,438 | | **Net Income** | $10,472 | $11,768 | $21,034 | $54,359 | $67,175 | Diluted Earnings Per Share | Period | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | **Q4** | $0.31 | $0.35 | N/A | | **Full Year** | $0.62 | $1.59 | $2.00 | - Cash dividends declared per common share remained consistent at **$0.14** for the quarter and **$0.56** for the full fiscal year, unchanged from the prior year[29](index=29&type=chunk) [Selected Balance Sheet and Cash Flow Information](index=16&type=section&id=Selected%20Balance%20Sheet%20and%20Cash%20Flow%20Information) As of May 25, 2024, the company's balance sheet remains healthy with $108.9 million in cash and cash equivalents and no long-term debt, though cash flow from operating activities saw a substantial decrease. Selected Balance Sheet Data (in thousands) | Metric | May 25, 2024 | May 27, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $108,892 | $116,784 | | **Total assets** | $510,914 | $531,999 | | **Total liabilities** | $92,151 | $117,479 | | **Total stockholders' equity** | $418,763 | $414,520 | Selected Cash Flow Data (in thousands) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | **Cash flow -- operating activities** | $21,919 | $81,636 | | **Cash flow -- investing activities** | $(8,554) | $3,943 | | **Cash flow -- financing activities** | $(20,709) | $(71,914) | Other Operational Information | Metric | May 25, 2024 | May 27, 2023 | | :--- | :--- | :--- | | **Consultant headcount** | 2,585 | 3,145 | | **Average bill rate** | $120 | $129 | | **Average pay rate** | $57 | $62 | [Segment and Geographic Performance](index=4&type=section&id=Segment%20and%20Geographic%20Performance) [Segment Results](index=15&type=section&id=Segment%20Results) The RGP segment dominates the company's operations, constituting the vast majority of revenue and Adjusted EBITDA, both of which declined significantly in fiscal year 2024. - RGP is the company's only operating segment that meets the quantitative threshold to be a reportable segment, with the Sitrick segment disclosed under 'Other Segments'[48](index=48&type=chunk) Segment Revenue (in thousands) | Segment | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | **RGP** | $145,521 | $181,662 | $622,895 | $764,511 | | **Other Segments** | $2,677 | $2,787 | $9,906 | $11,132 | | **Total Revenue** | **$148,198** | **$184,449** | **$632,801** | **$775,643** | Segment Adjusted EBITDA (in thousands) | Segment | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | **RGP** | $20,980 | $31,045 | $84,677 | $132,377 | | **Other Segments** | $32 | $419 | $(676) | $1,179 | | **Reconciling items** | $(7,922) | $(8,227) | $(32,518) | $(33,362) | | **Total Adjusted EBITDA** | **$13,090** | **$23,237** | **$51,483** | **$100,194** | [Revenue by Geography](index=4&type=section&id=Revenue%20by%20Geography) North America remains the company's largest market, accounting for approximately 86% of total revenue in fiscal 2024, though revenue from this region and Europe declined year-over-year. Revenue by Geography (in thousands) | Region | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | **North America** | $126,554 | $160,999 | $543,926 | $680,993 | | **Europe** | $8,518 | $10,757 | $38,383 | $42,509 | | **Asia Pacific** | $13,126 | $12,693 | $50,492 | $52,141 | | **Total Revenue** | **$148,198** | **$184,449** | **$632,801** | **$775,643** | - On a same-day constant currency basis, total consolidated revenue for FY2024 was **$629.6 million**, representing a decline of **18.8%** from the prior year[11](index=11&type=chunk)[65](index=65&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Definition of Non-GAAP Measures](index=8&type=section&id=Definition%20of%20Non-GAAP%20Measures) The company utilizes several non-GAAP financial measures, including 'Same-day constant currency revenue,' 'EBITDA,' 'Adjusted EBITDA,' and 'Adjusted diluted earnings per common share,' to evaluate its core operating performance by adjusting for various non-cash and non-recurring items. - Same-day constant currency revenue is a non-GAAP measure that adjusts reported revenue for the impact of differing numbers of business days and fluctuations in foreign currency exchange rates between periods[35](index=35&type=chunk)[60](index=60&type=chunk) - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, and amortization, further adjusted for items such as stock-based compensation, technology transformation costs, goodwill impairment, acquisition costs, restructuring costs, and contingent consideration adjustments[36](index=36&type=chunk)[61](index=61&type=chunk) - Adjusted diluted earnings per common share adjusts GAAP diluted EPS for the per-share impact of the same items excluded from Adjusted EBITDA, along with their related tax effects[63](index=63&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides detailed reconciliations of its GAAP results to non-GAAP measures for both quarterly and annual periods, primarily accounting for non-cash expenses and special items like restructuring and technology transformation costs. [Quarterly Reconciliations (Q4 FY2024)](index=10&type=section&id=Quarterly%20Reconciliations%20%28Q4%20FY2024%29) Q4 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | **Net income (GAAP)** | **$10,472** | **$11,768** | | Amortization & Depreciation | $1,948 | $2,162 | | Interest & Tax | $796 | $5,282 | | **EBITDA** | **$13,216** | **$19,212** | | Stock-based compensation | $1,483 | $2,146 | | Technology transformation costs | $1,914 | $1,879 | | Acquisition & Restructuring costs | $877 | $0 | | Contingent consideration adj. | $(4,400) | $0 | | **Adjusted EBITDA (Non-GAAP)** | **$13,090** | **$23,237** | Q4 Reconciliation of Diluted EPS to Adjusted Diluted EPS | Description | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | **$0.31** | **$0.35** | | Non-GAAP Adjustments (net of tax) | $(0.03) | $0.09 | | **Adjusted Diluted EPS (Non-GAAP)** | **$0.28** | **$0.44** | [Annual Reconciliations (FY 2024)](index=13&type=section&id=Annual%20Reconciliations%20%28FY%202024%29) Annual Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | FY 2024 | FY 2023 | | :--- | :--- | :--- | | **Net income (GAAP)** | **$21,034** | **$54,359** | | Amortization & Depreciation | $8,428 | $8,557 | | Interest & Tax | $7,731 | $18,811 | | **EBITDA** | **$37,193** | **$81,727** | | Stock-based compensation | $5,732 | $9,521 | | Technology transformation costs | $6,901 | $6,355 | | Other adjustments | $1,651 | $2,591 | | **Adjusted EBITDA (Non-GAAP)** | **$51,483** | **$100,194** | Annual Reconciliation of Diluted EPS to Adjusted Diluted EPS | Description | FY 2024 | FY 2023 | | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | **$0.62** | **$1.59** | | Non-GAAP Adjustments (net of tax) | $0.31 | $0.41 | | **Adjusted Diluted EPS (Non-GAAP)** | **$0.93** | **$2.00** | [Corporate Information](index=6&type=section&id=Corporate%20Information) [About RGP](index=6&type=section&id=About%20RGP) RGP is a global consulting firm that provides project execution services to assist clients with business transformations, strategic transactions, and regulatory changes, utilizing a flexible talent model with approximately 3,400 professionals. - RGP is a global consulting firm focused on co-delivering enterprise initiatives precipitated by business transformation, strategic transactions, or regulatory change[55](index=55&type=chunk) - The company employs approximately **3,400 professionals** and serves over **1,800 clients** globally, including **88% of the Fortune 100** as of May 2024[56](index=56&type=chunk) - RGP's business model is positioned to help clients manage transformation pressures and skilled labor shortages by offering a flexible workforce for executing projects[31](index=31&type=chunk) [Conference Call Information](index=6&type=section&id=Conference%20Call%20Information) The company scheduled a conference call for analysts and investors at 5:00 p.m. ET on July 18, 2024, to discuss the financial results, with a live webcast and replay available on the Investor Relations section of the company's website. - A conference call was held on **July 18, 2024, at 5:00 p.m. ET** to discuss the financial results[30](index=30&type=chunk) - A live webcast and a 30-day replay of the call are accessible through the Events section of the company's Investor Relations website[30](index=30&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section provides a standard legal disclaimer regarding forward-looking statements, cautioning readers that these statements are subject to various known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. - The press release contains forward-looking statements concerning matters that are not historical facts, which are subject to significant risks and uncertainties[57](index=57&type=chunk) - Key risks include economic downturns, the competitive nature of the professional services market, ability to retain consultants, and potential impacts from restructuring and technology transformation efforts[57](index=57&type=chunk)[58](index=58&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 24, 2024 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to______ Commission File Number: 0-32113 RESOURCES CONNECTION, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 33-0832424 (State or O ...

Resources Connection, Inc. (NASDAQ:RGP) Q3 2024 Results Conference Call April 3, 2024 5:00 PM ET Company Participants Kate Duchene - CEO Jenn Ryu - CFO Conference Call Participants Mark Marcon - Baird Andrew Steinerman - JPMorgan Marc Riddick - Sidoti Operator Good afternoon, ladies and gentlemen, and welcome to Resources Connections, Inc. Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As ...

Third Quarter Fiscal 2024 Highlights Compared to the Prior Year Quarter: Resources Connection, Inc. Reports Financial Results for Third Quarter Fiscal 2024 IRVINE, Calif., April 3, 2024 – Resources Connection, Inc. (Nasdaq: RGP) (the "Company"), a global consulting firm, today announced financial results for its fiscal third quarter ended February 24, 2024. Management Commentary "We delivered solid Adjusted EBITDA and free cash flow conversion in the third quarter. Revenue performance was consistent with ex ...

OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 25, 2023 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to______ Commission File Number: 0-32113 RESOURCES CONNECTION, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 33-0832424 (State or O ...