Resources Connection, Inc. (NASDAQ:RGP) Q1 2021 Earnings Conference Call October 7, 2020 5:00 PM ET Company Participants Kate Duchene - CEO Tim Brackney - President and COO Jennifer Ryu - CFO Lauren Elkerson - General Counsel Conference Call Participants Josh Vogel - Sidoti & Company Andrew Steinerman - JPMorgan Operator Good afternoon, ladies and gentlemen, and welcome to the Resources Connection, Inc. Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a quest ...

[Part I](index=4&type=section&id=PART%20I) [Business](index=4&type=section&id=ITEM%201.%20BUSINESS.) RGP is a global consulting firm providing agile human capital solutions for transactions, regulations, and transformations to a diverse client base [Overview](index=4&type=section&id=Overview) RGP is a global consulting firm providing human capital solutions to over 2,400 clients, including 88 of the Fortune 100 - RGP is a global consulting firm specializing in solving business problems across transactions, regulations, and transformations by providing human capital solutions[15](index=15&type=chunk) - As of July 2020, RGP has served **88 of the Fortune 100 companies** and engages with over 2,400 clients worldwide annually, supported by a professional team of more than 3,400 individuals[16](index=16&type=chunk) [Industry Background and Trends](index=4&type=section&id=Industry%20Background%20and%20Trends) The professional services market is shifting towards flexible, project-based workforce strategies, a trend accelerated by the COVID-19 pandemic - There is a growing trend of corporations adopting more flexible workforce strategies, moving away from permanent professional roles towards engaging agile talent for project initiatives, which may be accelerated by the COVID-19 pandemic[17](index=17&type=chunk) - The supply of professionals seeking agile work is increasing due to a desire for flexible hours, diverse and challenging engagements, and more control over their client projects[19](index=19&type=chunk) [RGP's Strategic Priorities](index=5&type=section&id=RGP's%20Strategic%20Priorities) RGP's strategy focuses on hiring high-caliber consultants, building consultative client relationships, and driving growth through client penetration and strategic acquisitions - The company's business strategy is centered on hiring experienced consultants, fostering a unique corporate culture (LIFE AT RGP), building relationship-oriented client services, and enhancing the RGP brand as a premier provider of agile human capital[23](index=23&type=chunk)[24](index=24&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - Key growth strategies include deeper penetration of the existing client base, attracting new clients through networking and marketing, making strategic acquisitions like **Veracity and Expertence in fiscal 2020**, and expanding service offerings in areas like finance and digital transformation[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [COVID-19 Impact](index=7&type=section&id=COVID-19%20Impact) The COVID-19 pandemic adversely impacted operating results in the second half of fiscal 2020 and is expected to continue this impact into fiscal 2021 - The COVID-19 pandemic adversely affected operating results in the second half of fiscal 2020, and this **negative impact is expected to persist into fiscal 2021**[35](index=35&type=chunk) - The company initiated a strategic business review and reduction in force in North America and Asia Pacific in early March 2020, which it believes has increased its agility to handle the challenges posed by the pandemic[35](index=35&type=chunk) [Consultants, Clients, and Operations](index=7&type=section&id=Consultants%2C%20Clients%2C%20and%20Operations) RGP engages nearly 2,500 consultants to serve over 2,400 clients, with operations managed locally and supported by centralized administrative functions - As of May 30, 2020, RGP employed or contracted **2,495 consultants**, with U.S. consultants typically being employees and international consultants being a mix of employees and independent contractors[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - In fiscal 2020, RGP served over 2,400 clients across 37 countries, with **no single client exceeding 10% of revenues**[39](index=39&type=chunk) - The company operates on a local market level with centralized support for administrative, marketing, finance, HR, IT, and legal functions from its Irvine, CA headquarters and a European support center in Utrecht, Netherlands[40](index=40&type=chunk)[45](index=45&type=chunk) [Competition](index=9&type=section&id=Competition) RGP operates in a fragmented and competitive market, competing on quality, speed, and price against a diverse range of professional services firms - The company competes with a diverse range of organizations, including consulting firms, accounting firms, independent contractors, staffing firms, and clients' internal teams[49](index=49&type=chunk)[56](index=56&type=chunk) [Risk Factors](index=9&type=section&id=ITEM%201A.%20RISK%20FACTORS.) The company faces significant risks from the COVID-19 pandemic, economic conditions, market competition, and challenges in retaining personnel and managing cybersecurity - The COVID-19 pandemic poses a significant risk, having already caused reduced demand, project cancellations, and a **9.1% decline in average weekly revenue** in the latter part of Q4 fiscal 2020, with potential for goodwill impairment[54](index=54&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) - The business is vulnerable to economic downturns, which can reduce demand for services and impact the collectability of receivables, potentially triggering goodwill impairment[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - The company operates in a **highly competitive and fragmented market**, facing pressure from consulting firms, accounting firms, and staffing agencies with greater resources[62](index=62&type=chunk) - The success of the business depends on **retaining highly qualified consultants and key senior management**, the loss of whom could adversely affect operating results[74](index=74&type=chunk)[83](index=83&type=chunk) - **Cybersecurity breaches, system interruptions, and failure to comply with evolving data privacy laws like GDPR** pose significant risks, potentially leading to legal liability and financial penalties[77](index=77&type=chunk)[81](index=81&type=chunk) - The **reclassification of independent contractors as employees** by foreign authorities could negatively impact the business model and result in significant retroactive costs[92](index=92&type=chunk) [Properties](index=17&type=section&id=ITEM%202.%20PROPERTIES.) RGP maintains 62 offices globally, mostly leased, and owns its 57,000 square foot corporate headquarters in Irvine, California - As of May 30, 2020, the company maintained **39 domestic and 23 international offices**, primarily through operating leases[95](index=95&type=chunk) - The company owns its corporate office building in Irvine, California, which is approximately 57,000 square feet[95](index=95&type=chunk) [Legal Proceedings](index=17&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS.) The company is not currently subject to any material legal proceedings - The company is not currently involved in any material legal proceedings[96](index=96&type=chunk) [Part II](index=18&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=18&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES.) The company changed its ticker to 'RGP', maintained its quarterly dividend, and made no stock repurchases in Q4 fiscal 2020 - On April 2, 2020, the company's ticker symbol changed from 'RECN' to **'RGP'** to align with its trade name[100](index=100&type=chunk) - The company declared a quarterly dividend of **$0.14 per share** in fiscal 2020, up from $0.13 in fiscal 2019[101](index=101&type=chunk) - The company has a **$150.0 million stock repurchase program** authorized in July 2015, with no repurchases made in the fourth quarter of fiscal 2020[103](index=103&type=chunk)[104](index=104&type=chunk) [Selected Financial Data](index=20&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA.) The company presents a five-year summary of key financial data, showing a revenue decrease to $703.4 million in fiscal 2020 Selected Financial Data (FY2016-FY2020) | | FY 2020 (53 wks) | FY 2019 (52 wks) | FY 2018 (52 wks) | FY 2017 (52 wks) | FY 2016 (52 wks) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $703,353 | $728,999 | $654,129 | $583,411 | $598,521 | | **Income from operations** | $36,652 | $50,159 | $30,624 | $34,402 | $53,803 | | **Net income** | $28,285 | $31,470 | $18,826 | $18,651 | $30,443 | | **Diluted EPS** | $0.88 | $0.98 | $0.60 | $0.56 | $0.81 | | **Total assets** | $529,181 | $428,370 | $432,674 | $364,128 | $417,255 | | **Long-term debt** | $88,000 | $43,000 | $63,000 | $48,000 | $ - | | **Stockholders' equity** | $303,661 | $282,396 | $268,825 | $238,142 | $342,649 | *All amounts in thousands, except per share data.* [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) Fiscal 2020 revenue decreased 3.5% due to COVID-19, while a global restructuring plan aims for future savings and liquidity remains sufficient [Fiscal 2020 Strategic Focus and Restructuring](index=21&type=section&id=Fiscal%202020%20Strategic%20Focus%20and%20Restructuring) RGP acquired Veracity Consulting to enhance digital offerings and initiated a global restructuring plan expected to generate significant cost savings - Acquired Veracity Consulting Group, a digital transformation firm, to offer end-to-end digital solutions[120](index=120&type=chunk) - Initiated a global restructuring plan, which included a reduction in force (RIF) eliminating 73 positions and a plan to shrink the global real estate footprint by 26%[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) Fiscal 2020 Restructuring Costs | Cost Type | Amount (in millions) | Note | | :--- | :--- | :--- | | Employee Termination Costs | $3.9 | For RIF in North America & Asia Pacific | | Real Estate Exit Costs | $1.1 | Non-cash charges for lease terminations | | **Total FY2020 Costs** | **$5.0** | | - The restructuring plan is expected to yield savings of **$10.0 million to $12.0 million** in fiscal 2021[125](index=125&type=chunk) [COVID-19 Impact and Outlook](index=22&type=section&id=COVID-19%20Impact%20and%20Outlook) The pandemic negatively impacted Q4 fiscal 2020 revenue and consultant count, but the company believes its strong liquidity position is sufficient to manage uncertainty - Average weekly revenue **declined 9.1%** during the last 12 non-holiday weeks of Q4 fiscal 2020 compared to the first eight non-holiday weeks of the 2020 calendar year[127](index=127&type=chunk) - The number of consultants on assignment decreased from 2,965 at the end of fiscal 2019 to **2,495 at the end of fiscal 2020**[127](index=127&type=chunk) - As of May 30, 2020, the company had **$95.6 million in cash and cash equivalents** and an additional $30.7 million available under its credit facility[128](index=128&type=chunk) - The company deferred **$2.9 million in U.S. payroll tax payments** under the CARES Act but does not intend to file for other funding[129](index=129&type=chunk) [Critical Accounting Policies](index=22&type=section&id=Critical%20Accounting%20Policies) The company's critical accounting policies require significant management judgment, particularly for goodwill, income taxes, and revenue recognition - Key areas requiring significant management estimates include allowance for doubtful accounts, income taxes, revenue recognition, stock-based compensation, and valuation of goodwill, long-lived assets, and business combinations[133](index=133&type=chunk) - **Goodwill is tested for impairment annually** by comparing the fair value of the single reporting unit to its carrying value; no impairment was recorded in fiscal 2020[142](index=142&type=chunk) - Contingent consideration from acquisitions is recorded at fair value at the acquisition date and remeasured each reporting period, with changes in fair value recognized in the results of operations[144](index=144&type=chunk) [Results of Operations (FY2020 vs. FY2019)](index=25&type=section&id=Results%20of%20Operations%20(FY2020%20vs.%20FY2019)) Fiscal 2020 revenue and operating income declined due to the pandemic and project wind-downs, though gross margin improved and the tax rate fell significantly Fiscal 2020 vs. 2019 Results of Operations | Metric | FY 2020 | FY 2019 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $703.4M | $729.0M | (3.5)% | | Same Day Organic Revenue | $671.0M | $716.9M | (6.4)% | | Gross Margin | 39.2% | 38.7% | +0.5 ppt | | SG&A as % of Revenue | 32.4% | 30.7% | +1.7 ppt | | Income from Operations | $36.7M | $50.2M | (26.9)% | | Net Income | $28.3M | $31.5M | (10.1)% | | Effective Tax Rate | 19.7% | 34.4% | -14.7 ppt | - The decrease in revenue was attributed to the adverse impact of the COVID-19 pandemic and the wind-down of large projects, particularly related to lease accounting implementation[159](index=159&type=chunk) - The increase in SG&A was primarily driven by **$5.0 million in restructuring costs** and a $1.4 million swing in contingent consideration adjustments[164](index=164&type=chunk) - The effective tax rate decreased significantly from 34.4% to 19.7% mainly due to a **$6.6 million net tax benefit from a worthless stock deduction** related to exiting certain European markets[167](index=167&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash from operations and its credit facility, despite increased borrowings and cash outlays for acquisitions and dividends Cash Flow Summary (in millions) | Cash Flow Activity | FY 2020 | FY 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $49.5 | $43.6 | | Net Cash used in Investing Activities | ($26.8) | ($12.9) | | Net Cash from (used in) Financing Activities | $30.9 | ($43.6) | - As of May 30, 2020, the company had **$95.6 million in cash and cash equivalents** and **$88.0 million outstanding** on its $120.0 million credit facility[176](index=176&type=chunk)[178](index=178&type=chunk) - Key investing activities in FY2020 included the **$30.3 million net cash used for the Veracity acquisition**[180](index=180&type=chunk) - Key financing activities in FY2020 included **net borrowings of $45.0 million** from the credit facility, $17.6 million in dividend payments, and $5.0 million in share repurchases[182](index=182&type=chunk) [Contractual Obligations](index=32&type=section&id=Contractual%20Obligations) As of May 30, 2020, the company had future minimum commitments totaling $138.6 million, primarily for long-term debt and operating leases Contractual Obligations as of May 30, 2020 (in thousands) | Obligation Type | Total | Fiscal 2021 | Fiscal 2022-2023 | Fiscal 2024-2025 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating lease obligations | $45,762 | $12,610 | $19,526 | $10,458 | $3,168 | | Purchase obligations | $4,855 | $2,797 | $2,058 | $ - | $ - | | Long-term debt | $88,000 | $ - | $88,000 | $ - | $ - | [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) The company is exposed to market risks from interest rate fluctuations on its variable-rate debt and foreign currency exchange rates - The company is exposed to interest rate risk on its **$88.0 million of variable-rate debt**, where a 10% change in rates would impact annual interest expense by approximately $0.2 million[194](index=194&type=chunk) - The company is exposed to foreign currency exchange rate risk, as approximately **19.1% of its fiscal 2020 revenues were generated outside the United States**, and does not currently use financial hedges[195](index=195&type=chunk)[197](index=197&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA.) This section contains the company's audited consolidated financial statements and accompanying notes for the three years ended May 30, 2020 [Consolidated Financial Statements](index=35&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, results of operations, and cash flows for the last three fiscal years Consolidated Balance Sheet Highlights (in thousands) | | May 30, 2020 | May 25, 2019 | | :--- | :--- | :--- | | Total Current Assets | $230,999 | $191,657 | | Total Assets | $529,181 | $428,370 | | Total Current Liabilities | $94,901 | $91,416 | | Total Liabilities | $225,520 | $145,974 | | Total Stockholders' Equity | $303,661 | $282,396 | Consolidated Statement of Operations Highlights (in thousands) | | FY 2020 | FY 2019 | FY 2018 | | :--- | :--- | :--- | :--- | | Revenue | $703,353 | $728,999 | $654,129 | | Gross Margin | $275,483 | $282,439 | $246,055 | | Income from Operations | $36,652 | $50,159 | $30,624 | | Net Income | $28,285 | $31,470 | $18,826 | [Notes to Consolidated Financial Statements](index=41&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies and events, including the adoption of a new lease standard, acquisitions, restructuring, and debt facilities - Adopted new lease standard ASC 842 on May 26, 2019, recognizing **$43.2 million of ROU assets and $51.0 million of operating lease liabilities** on the balance sheet[261](index=261&type=chunk) - Acquired Veracity on July 31, 2019, for total consideration of **$38.6 million**, including $32.3 million in cash and $6.3 million in estimated contingent consideration, adding $23.0 million in goodwill[268](index=268&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk) - In fiscal 2020, the company initiated a global restructuring plan, incurring **$3.9 million in employee termination costs and $1.1 million in facility exit costs**[322](index=322&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - As of May 30, 2020, borrowings under the **$120.0 million credit facility were $88.0 million**, with the facility expiring on October 17, 2021[300](index=300&type=chunk)[303](index=303&type=chunk) - The company has foreign net operating loss carryforwards of **$53.2 million**, of which $44.1 million have an unlimited carryforward period[308](index=308&type=chunk)[309](index=309&type=chunk) [Controls and Procedures](index=63&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES.) Management and the independent auditor concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective - Management concluded that the company's **disclosure controls and procedures were effective** as of May 30, 2020[345](index=345&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of May 30, 2020, based on the COSO 2013 framework[348](index=348&type=chunk) - The independent auditor, RSM US LLP, provided an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting as of May 30, 2020[349](index=349&type=chunk)[352](index=352&type=chunk) - There were **no material changes in internal control** over financial reporting during the fourth quarter of fiscal 2020[349](index=349&type=chunk) [Part III](index=65&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=65&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE.) This section incorporates by reference information on directors, officers, and governance from the company's 2020 proxy statement - Information regarding directors, executive officers, and corporate governance is **incorporated by reference** from the forthcoming 2020 proxy statement[361](index=361&type=chunk) - The company has adopted a code of business conduct and ethics applicable to all directors and employees, available on its website[360](index=360&type=chunk) [Executive Compensation](index=65&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION.) This section incorporates by reference all information regarding executive and director compensation from the company's 2020 proxy statement - All information related to executive compensation is **incorporated by reference** from the company's 2020 proxy statement[362](index=362&type=chunk) [Security Ownership and Related Stockholder Matters](index=65&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS.) Information on security ownership is incorporated by reference, and details of equity compensation plans are provided Equity Compensation Plan Information as of May 30, 2020 | Plan Category | Securities to Be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining Available for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by security holders | 5,755,018 | $16.07 | 3,093,776 | | Not approved by security holders | - | - | - | | **Total** | **5,755,018** | **$16.07** | **3,093,776** | - The **3,093,776 shares available for future issuance** consist of 1,640,778 shares under the ESPP and 1,452,998 shares under the 2014 Performance Incentive Plan[367](index=367&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=66&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE.) This section incorporates by reference information on related party transactions and director independence from the 2020 proxy statement - Information regarding related party transactions and director independence is **incorporated by reference** from the 2020 proxy statement[368](index=368&type=chunk) [Principal Accounting Fees and Services](index=66&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES.) This section incorporates by reference information regarding fees paid to the independent accounting firm from the 2020 proxy statement - Information on principal accounting fees and services is **incorporated by reference** from the 2020 proxy statement[369](index=369&type=chunk) [Part IV](index=67&type=section&id=PART%20IV) [Exhibit and Financial Statement Schedules](index=67&type=section&id=ITEM%2015.%20EXHIBIT%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES.) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K, including material contracts and certifications - Lists the consolidated financial statements included in Item 8 of the report[370](index=370&type=chunk) - Provides an index of all exhibits filed with the report, including the company's bylaws, credit agreement, key employment agreements, and Sarbanes-Oxley certifications[373](index=373&type=chunk)[374](index=374&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q4 was $178.6 million, a decrease of 2% year-over-year and a 6.3% sequential increase [40] - Adjusted EBITDA increased to $18.6 million, representing 10.4% of revenue, up from 9.6% in the prior year quarter [10][43] - Net income for Q4 was $4.1 million, or $0.13 per diluted share, compared to $9.4 million, or $0.29 per diluted share in the prior year [42] Business Line Data and Key Metrics Changes - Organic revenue decreased by $18 million, or 10%, compared to Q4 of fiscal '19, with a constant currency decline of 9.5% [45] - Revenue from the largest clients increased by 9.1% year-over-year and 10.1% sequentially [47] - North American professional staffing revenue increased by 5.3% compared to Q4 last year [47] Market Data and Key Metrics Changes - Organic same-day revenue declined by 8.8% in North America, 12.7% in Europe, and 19.5% in Asia Pacific compared to Q4 fiscal '19 [46] - The average hourly bill rate for the quarter was approximately $127, up from $124 in the prior year quarter [50] Company Strategy and Development Direction - The company is focusing on cost control, building core client relationships, and digital expansion, including the launch of the HuGo platform [18][23] - The company anticipates a shift towards agile and contingent workers, with a predicted 5% increase in the use of contingent labor over the next two years [15] - The company aims to expand its presence in the healthcare industry, which is seen as a robust opportunity [22] Management's Comments on Operating Environment and Future Outlook - Management noted a slight uptick in the buying environment in June but indicated that new project signings remain soft [11] - The company expects continued challenges in revenue until greater clarity exists in the macro environment [11] - Management expressed optimism about the long-term sustainability of virtual delivery and borderless talent [29] Other Important Information - The company ended the fiscal year with cash and cash equivalents of $95.6 million, compared to $35.9 million at the end of Q3 [57] - The effective tax rate for the fourth quarter was 42%, impacted by lower pre-tax income and an increase in valuation allowance [56] Q&A Session Summary Question: How much of the business will remain virtual long-term? - Management estimates that about 50% of knowledge workers will remain virtual post-pandemic, finding it efficient and cost-effective [65][66] Question: Can you provide details on the real estate footprint? - The company plans to continue its real estate contraction strategy, having exited or sublet approximately half of its North American locations [71] Question: How has Veracity performed relative to expectations? - Management is pleased with Veracity's performance, expecting growth in the fiscal year despite some impact from COVID [76][78] Question: What are the trends in international operations, particularly in Asia Pacific? - Asia Pacific has shown stabilization, with consistent velocity and pipeline activity throughout the quarter [86] Question: What is the current headcount status and productivity? - The company has reduced headcount by approximately 8% in North America, with ongoing evaluations to ensure productivity [87][88]

Financial Data and Key Metrics Changes - Total revenue for Q3 fiscal '20 was $168.1 million, a 6.4% decrease year-over-year and an 8.9% decrease sequentially [59] - Gross margin for Q3 was 36.5%, down 130 basis points year-over-year and 380 basis points sequentially [60] - Net income for Q3 was $6.9 million or $0.21 per diluted share, up from $5.8 million or $0.18 per diluted share in the prior year quarter [61] Business Line Data and Key Metrics Changes - North America revenue decreased by $8 million or 5.4% year-over-year, with Veracity contributing $5.4 million [63] - Europe’s revenue decreased 13.8% year-over-year, with a $2.4 million decrease due to exit from the Nordics and Belgium markets [67] - Asia-Pacific revenue decreased 4.8% year-over-year, with significant impacts from COVID-19, particularly in China and Hong Kong [68] Market Data and Key Metrics Changes - North America saw a decline in revenue due to holiday impacts, while some markets like San Antonio and Seattle showed improvement [66] - The UK performed strongly compared to the prior year quarter, while Asia-Pacific showed signs of stabilization in China as the spread of COVID-19 slowed [69] Company Strategy and Development Direction - The company is undergoing a restructuring initiative called Project Strength, focusing on streamlining management, eliminating non-essential headcount, and reducing real estate spend [16][18] - The strategic shift towards a more virtual operating model aligns with the development of a human cloud platform expected in fiscal '21 [17] - The company aims to capitalize on macro trends favoring agile workforce strategies and project-oriented approaches [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to the challenges posed by the COVID-19 pandemic [36][39] - The company anticipates that many transformation initiatives will continue despite the uncertain environment, with a focus on outreach and innovative client support [43] - There is significant uncertainty regarding the impact of COVID-19 on demand and client decisions, with some cancellations and delays already observed [77] Other Important Information - The company expects annual pre-tax savings of $13 million to $15 million from personnel cost reductions and $3 million to $4 million from reduced occupancy costs [81][83] - Cash and cash equivalents at the end of Q3 were $35.9 million, with receivables at $130.9 million [85] - The company has adopted a new stock ticker symbol, RGP, to enhance market clarity [91] Q&A Session Summary Question: What percentage of billable associates are able to work remotely? - Almost 100% of billable consultants are delivering remotely and continue to bill [99] Question: What might be the decremental margins in the fourth quarter? - Management indicated that there would be downward pressure on margins as they aim to preserve revenue and remain flexible for clients, but specific numbers are difficult to predict due to the fluid situation [102] Question: What percentage of revenue is associated with the practices being terminated? - The eight offices being closed represent less than 1% of total revenue [104][106] Question: How is the pipeline and ability to generate new engagements being impacted? - While the pipeline has seen some degradation, it remains higher than the previous year, with specific impacts noted in the Tri-State area due to the pandemic [109] Question: What is the current situation in China regarding business normalization? - Business in Shanghai is reported to be about 80% back to normal, with revenue streams starting to stabilize [116]

PART I—FINANCIAL INFORMATION [Consolidated Financial Statements](index=4&type=section&id=ITEM%201.%20Consolidated%20Financial%20Statements) The unaudited financial statements show decreased revenue and operating income, with net income rising due to a one-time tax benefit [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities increased, driven by goodwill from acquisitions and the adoption of new lease accounting standards Consolidated Balance Sheet Highlights (in thousands) | Account | Feb 22, 2020 | May 25, 2019 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$485,974** | **$428,370** | **+13.4%** | | Cash and cash equivalents | $35,944 | $43,045 | -16.5% | | Goodwill | $213,451 | $190,815 | +11.9% | | Operating right-of-use assets | $38,176 | $ - | N/A | | **Total Liabilities** | **$183,172** | **$145,974** | **+25.5%** | | Long-term debt | $49,000 | $43,000 | +14.0% | | Operating lease liabilities | $44,776 | $ - | N/A | | **Total Stockholders' Equity** | **$302,802** | **$282,396** | **+7.2%** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Quarterly and nine-month revenues declined, but net income increased due to a significant income tax benefit Three Months Ended Performance (in thousands, except per share data) | Metric | Q3 FY2020 | Q3 FY2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $168,052 | $179,498 | -6.4% | | Gross Margin | $61,420 | $67,911 | -9.6% | | Income from Operations | $3,452 | $10,213 | -66.2% | | Net Income | $6,942 | $5,796 | +19.8% | | Diluted EPS | $0.21 | $0.18 | +16.7% | Nine Months Ended Performance (in thousands, except per share data) | Metric | 9M FY2020 | 9M FY2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $524,784 | $546,855 | -4.0% | | Gross Margin | $203,300 | $209,483 | -2.9% | | Income from Operations | $29,202 | $36,287 | -19.5% | | Net Income | $24,218 | $22,101 | +9.6% | | Diluted EPS | $0.75 | $0.68 | +10.3% | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased while investing cash use grew significantly due to the Veracity acquisition Cash Flow Summary for Nine Months Ended (in thousands) | Cash Flow Activity | Feb 22, 2020 | Feb 23, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,563 | $13,496 | | Net cash used in investing activities | ($26,469) | ($5,939) | | Net cash used in financing activities | ($1,824) | ($15,624) | | **Net decrease in cash** | **($7,101)** | **($8,503)** | | Cash at end of period | $35,944 | $47,967 | - The significant increase in cash used for investing activities was driven by the **$30.3 million acquisition of Veracity**, net of cash acquired[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the adoption of a new lease standard, acquisitions, a major tax benefit, and subsequent events like restructuring and COVID-19 impacts - The company adopted ASU No 2016-02 (Leases) on May 26, 2019, resulting in the recognition of **material right-of-use assets and lease liabilities** on the Consolidated Balance Sheet[33](index=33&type=chunk)[37](index=37&type=chunk) - On July 31, 2019, the company acquired Veracity Consulting Group for initial cash consideration of **$30.3 million** to enhance its digital transformation capabilities[43](index=43&type=chunk) - A net tax benefit of **$6.6 million** was recorded in Q3 FY2020 due to a worthless stock deduction related to the company's decision to exit markets in Belgium, Luxembourg, and the Nordics[70](index=70&type=chunk)[141](index=141&type=chunk) - Subsequent to the quarter end, the company initiated a restructuring plan to reduce its workforce by **7.5%** and consolidate real estate, expecting to incur **$4-5 million** in termination costs[93](index=93&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue declines, strategic acquisitions, a major restructuring plan, and the emerging risks from the COVID-19 pandemic [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Revenue fell across all geographic regions in Q3, driven by fewer billable days and exits from certain European markets Revenue by Geography - Three Months Ended (in thousands) | Region | Q3 FY2020 | Q3 FY2019 | % Change | | :--- | :--- | :--- | :--- | | North America | $138,819 | $146,817 | -5.4% | | Europe | $18,031 | $20,911 | -13.8% | | Asia Pacific | $11,202 | $11,770 | -4.8% | | **Total** | **$168,052** | **$179,498** | **-6.4%** | Revenue by Geography - Nine Months Ended (in thousands) | Region | 9M FY2020 | 9M FY2019 | % Change | | :--- | :--- | :--- | :--- | | North America | $431,617 | $446,811 | -3.4% | | Europe | $56,163 | $64,758 | -13.3% | | Asia Pacific | $37,004 | $35,286 | +4.9% | | **Total** | **$524,784** | **$546,855** | **-4.0%** | - Direct cost of services as a percentage of revenue increased to **63.5%** in Q3 FY2020 from 62.2% in Q3 FY2019, primarily due to an increase in holiday pay for consultants in the U.S[131](index=131&type=chunk) - SG&A expenses were flat at **$55.3 million** for Q3 FY2020 compared to $55.6 million in the prior year, but increased as a percentage of revenue to **32.9%** from 31.0%[133](index=133&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash from operations and its credit facility, from which it drew an additional $39.0 million post-quarter-end - As of February 22, 2020, the company had **$49.0 million** in borrowings and **$69.5 million** available under its revolving credit facility[162](index=162&type=chunk) - In March 2020, the company borrowed an additional **$39.0 million** from its credit facility as a precautionary measure in response to the COVID-19 pandemic[94](index=94&type=chunk)[163](index=163&type=chunk) - Cash provided by operating activities for the nine-month period increased to **$21.6 million** from $13.5 million in the prior year[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk on its variable-rate debt and foreign currency exchange rate risk - The company is exposed to interest rate risk on its **$49.0 million** of variable-rate debt, with a 10% rate change estimated to impact annual interest expense by approximately **$0.2 million**[177](index=177&type=chunk)[180](index=180&type=chunk) - Approximately **19.0%** of revenues for the three months ended February 22, 2020, were generated outside the U.S, creating exposure to foreign currency exchange rate fluctuations[181](index=181&type=chunk) [Controls and Procedures](index=49&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period, February 22, 2020[184](index=184&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company states it is **not party to any material legal proceedings**[185](index=185&type=chunk) [Risk Factors](index=49&type=section&id=ITEM%201A.%20Risk%20Factors) A new significant risk factor has been added concerning the business impact of the COVID-19 pandemic - A new risk factor has been introduced concerning the business impact of epidemic diseases, specifically the **COVID-19 pandemic**[186](index=186&type=chunk) - The company notes that COVID-19 had an adverse impact on its business in Asia Pacific during the quarter and expects an **adverse impact on operating results** in the fourth quarter of fiscal 2020[186](index=186&type=chunk)[189](index=189&type=chunk) - Potential impacts from COVID-19 include **reduced demand**, delayed client decisions, and deterioration in clients' ability to pay, which could also lead to a goodwill impairment assessment[187](index=187&type=chunk)[188](index=188&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased approximately $5.0 million of its common stock during the third quarter Share Repurchases for Q3 FY2020 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Nov 24, 2019 – Feb 22, 2020 | 318,430 | $15.70 | - As of February 22, 2020, approximately **$85.1 million** remained available for repurchase under the company's authorized stock repurchase program[79](index=79&type=chunk)[192](index=192&type=chunk) [Other Information](index=51&type=section&id=ITEM%205.%20Other%20Information) The company details a significant restructuring plan to reduce its workforce and real estate footprint, expecting substantial annual savings - On February 27, 2020, the company committed to a restructuring plan to reduce its management and administrative workforce by approximately **7.5%** and consolidate its geographic presence[193](index=193&type=chunk) - The company expects to incur a restructuring charge of **$4 million to $5 million** for employee termination costs and anticipates annual pre-tax savings of **$13 million to $15 million** upon completion[194](index=194&type=chunk) - In March 2020, the company borrowed **$39.0 million** under its Credit Facility as a precautionary measure due to the uncertainty caused by the COVID-19 pandemic[196](index=196&type=chunk) [Exhibits](index=53&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and employment agreements - The Exhibit Index lists documents filed with the report, including employment agreements for Jennifer Ryu, Kate W Duchene, and Tim Brackney, as well as required Sarbanes-Oxley certifications[197](index=197&type=chunk)[200](index=200&type=chunk)

Resources Connection, Inc. (NASDAQ:RECN) Q2 2020 Earnings Conference Call January 2, 2020 5:00 PM ET Company Participants Alice Washington - General Counsel Kate Duchene - Chief Executive Officer Tim Brackney - President and Chief Operating Officer Jennifer Ryu - Interim Chief Financial Officer Conference Call Participants Andrew Steinerman - JP Morgan Mark Marcon - Baird Operator Good afternoon, ladies and gentlemen, and welcome to the Resources Connection Incorporated Conference Call. At this time, all p ...

"�RGP" Investor Presentation &RGP® F o r w a r d L o o k i n g S t a t e m e n t s During this presentation, we may make forward-looking statements – in other words, statements regarding future events or future financial performance of the Company. We wish to caution you that such statements are only predictions and actual events or results may differ materially. We refer you to our 10-K report for the year ended May 26, 2018 for a discussion of some of the risks, uncertainties and other factors such as sea ...

Table of Contents 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 23, 2019 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 (S ...

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements, management's discussion, market risk disclosures, and controls and procedures for the period [ITEM 1. Consolidated Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the three months ended August 24, 2019, including Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows, with accompanying notes detailing significant accounting policies, acquisitions, divestitures, and new lease accounting standard adoption [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity as of specific dates Consolidated Balance Sheet Highlights (as of August 24, 2019 vs. May 25, 2019) | Account | August 24, 2019 ($ thousands) | May 25, 2019 ($ thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **496,611** | **428,370** | **+15.9%** | | Goodwill | 216,420 | 190,815 | +13.4% | | Operating right-of-use assets | 40,198 | - | New | | **Total Liabilities** | **208,180** | **145,974** | **+42.6%** | | Long-term debt | 73,000 | 43,000 | +69.8% | | Operating lease liabilities | 47,048 | - | New | | **Total Stockholders' Equity** | **288,431** | **282,396** | **+2.1%** | - The significant increase in assets and liabilities is primarily due to the acquisition of Veracity, which increased goodwill, and the adoption of the new lease accounting standard (ASC 842), which resulted in the recognition of operating right-of-use assets and lease liabilities[10](index=10&type=chunk)[34](index=34&type=chunk)[39](index=39&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, including revenue, expenses, and net income over a period Statement of Operations Summary (Three Months Ended) | Metric | August 24, 2019 ($ thousands) | August 25, 2018 ($ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 172,225 | 178,558 | -3.5% | | Gross Margin | 67,503 | 68,151 | -0.9% | | Income from Operations | 8,062 | 9,761 | -17.4% | | Net Income | 4,939 | 5,741 | -14.0% | | Diluted EPS | $0.15 | $0.18 | -16.7% | - Cash dividends declared per common share increased to **$0.14** from **$0.13** in the prior-year quarter[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the sources and uses of cash from operating, investing, and financing activities - Net cash used in operating activities was **$3.0 million**, a significant improvement compared to **$16.6 million** used in the same period last year[17](index=17&type=chunk) - Investing activities used **$24.8 million**, driven by the **$30.3 million** acquisition of Veracity (net of cash acquired)[17](index=17&type=chunk) - Financing activities provided **$30.7 million**, primarily from **$35.0 million** in proceeds from the Revolving Credit Facility, which was used to fund the Veracity acquisition[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements - On July 31, 2019, the Company acquired Veracity Consulting Group for initial cash consideration of **$30.3 million** (net of **$2.1 million** cash acquired), plus potential earn-out payments, provisionally adding **$25.8 million** to goodwill[36](index=36&type=chunk)[39](index=39&type=chunk) - The company adopted the new lease accounting standard (ASC 842) on May 26, 2019, which resulted in the recognition of right-of-use assets and lease liabilities for its operating leases, materially impacting the balance sheet[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The company divested its business in Sweden and closed its office in Belgium during the quarter, incurring **$0.7 million** in exit costs[43](index=43&type=chunk) - As of August 24, 2019, borrowings on the secured revolving credit facility were **$73.0 million**[58](index=58&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **3.6%** year-over-year revenue decrease to **$172.2 million** for the first quarter of fiscal 2020, attributing it to reduced client demand in the Nordics and the conclusion of certain technical accounting projects, highlighting the acquisition of Veracity as a key strategic initiative to bolster digital transformation services, and detailing operational results, including a decline in Adjusted EBITDA margin to **6.9%**, and improved operating cash flow with increased borrowing to fund the acquisition [Overview and Business Strategy](index=22&type=section&id=Overview%20and%20Business%20Strategy) This section outlines the company's strategic objectives and key initiatives for business growth and market positioning - The company's core business strategy focuses on hiring and retaining highly qualified consultants, maintaining a distinctive corporate culture, building consultative client relationships, and strengthening the RGP brand[75](index=75&type=chunk) - A key strategic move in the quarter was the acquisition of Veracity Consulting Group to enhance digital transformation capabilities and offer comprehensive end-to-end solutions[81](index=81&type=chunk) - As part of a strategic review, the company divested its business in Sweden and closed its office in Belgium during the first quarter of fiscal 2020[82](index=82&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue trends, expense management, and profitability Q1 FY2020 vs Q1 FY2019 Performance | Metric | Q1 FY2020 | Q1 FY2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $172.2M | $178.6M | -3.6% | | Revenue (Constant Currency) | - | - | -3.0% | | Adjusted EBITDA | $11.9M | $13.2M | -10.1% | | Adjusted EBITDA Margin | 6.9% | 7.4% | -50 bps | - The revenue decrease was primarily driven by reduced client demand in the Nordics and the wind-down of technical accounting implementation projects[93](index=93&type=chunk) - SG&A expenses increased slightly to **$57.0 million** from **$56.4 million**, mainly due to retention bonuses, severance costs from the Sweden divestiture, and **$0.6 million** in costs related to the Veracity acquisition[99](index=99&type=chunk) - The effective tax rate decreased to approximately **35%** from **38%** in the prior year quarter, attributed to lower global income and fewer stock option expirations[105](index=105&type=chunk)[106](index=106&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet short-term obligations and fund long-term growth through its financial resources - Primary liquidity sources are cash from operations and a **$120 million** secured revolving credit facility[110](index=110&type=chunk) - As of August 24, 2019, the company had **$45.7 million** in cash and cash equivalents and **$73.0 million** in borrowings under its credit facility[110](index=110&type=chunk)[112](index=112&type=chunk) - The company borrowed an additional **$35.0 million** during the quarter to finance the acquisition of Veracity[117](index=117&type=chunk) - No shares of common stock were repurchased during the quarter, with approximately **$90.1 million** remaining available under the stock repurchase program[60](index=60&type=chunk)[118](index=118&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are identified as interest rate risk and foreign currency exchange rate risk, where interest rate fluctuations affect earnings on cash and costs on its **$73.0 million** of variable-rate debt, and foreign currency risk stems from international operations, which constitute **20.5%** of revenue, potentially impacting reported financial results, with the company not currently using hedging instruments - The company is exposed to interest rate risk on its **$73.0 million** of borrowings under its variable-rate credit facility, where a **10%** change in interest rates would impact quarterly interest expense by approximately **$0.1 million**[122](index=122&type=chunk)[124](index=124&type=chunk) - Foreign currency exchange rate risk exists as **20.5%** of revenues were generated outside the U.S., and the company does not currently use financial hedging to mitigate this risk[125](index=125&type=chunk)[129](index=129&type=chunk) [ITEM 4. Controls and Procedures](index=35&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Based on an evaluation as of August 24, 2019, the company's Chief Executive Officer and Interim Chief Financial Officer concluded that the disclosure controls and procedures were effective, with no material changes made to the internal control over financial reporting during the quarter - Management, including the CEO and Interim CFO, concluded that the company's disclosure controls and procedures were effective as of August 24, 2019[130](index=130&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[130](index=130&type=chunk) [PART II—OTHER INFORMATION](index=35&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and a list of exhibits filed with the report [ITEM 1. Legal Proceedings](index=35&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reports that it is not a party to any material legal proceedings, and any ongoing legal matters are considered part of the ordinary course of business and are not expected to have a material adverse effect - The company is not a party to any material legal proceedings[131](index=131&type=chunk) [ITEM 1A. Risk Factors](index=35&type=section&id=ITEM%201A.%20Risk%20Factors) The company states there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended May 25, 2019 - There have been no material changes in risk factors from those disclosed in the company's most recent Form 10-K[132](index=132&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports that it did not purchase any of its common stock during the first quarter of fiscal 2020 - The Company did not repurchase any of its common stock during the first quarter of fiscal 2020[133](index=133&type=chunk) [ITEM 6. Exhibits](index=35&type=section&id=ITEM%206.%20Exhibits) This section provides an index of all exhibits filed with the report, including various consulting and severance agreements, offer letters, and certifications required by the Sarbanes-Oxley Act - The report includes several exhibits, such as consulting agreements, a retention bonus agreement, and CEO/CFO certifications pursuant to the Sarbanes-Oxley Act[137](index=137&type=chunk)

Resources Connection, Inc. (RECN) Q1 2020 Results Earnings Conference Call October 2, 2019 5:00 PM ET Company Participants Alice Washington - General Counsel Kate Duchene - CEO Tim Brackney - COO Jennifer Ryu - Interim CFO Conference Call Participants Andrew Steinerman - JPMorgan Operator Good afternoon, ladies and gentlemen, and welcome to the Resources Connection Incorporated Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would like to turn ...