Resources nection(US:RGP)2025-04-03 21:23Financial Performance - For the three months ended February 22, 2025, the company recorded pre-tax goodwill impairment charges of $12.4 million in the On-Demand Talent segment and $29.6 million in the Consulting segment[143]. - Same-day constant currency revenue for the three months ended February 22, 2025, was $134,415 thousand, a decrease from $151,307 thousand for the same period in 2024, reflecting a decline of approximately 11.1%[149]. - Adjusted EBITDA for the three months ended February 22, 2025, was $1,651 thousand, representing 1.3% of revenue, compared to $10,786 thousand or 7.1% of revenue for the same period in 2024[151]. - The net loss for the three months ended February 22, 2025, was $(44,052) thousand, which is a margin of (34.0%), compared to a net income of $2,550 thousand or 1.7% margin for the same period in 2024[151]. - Total consolidated revenue for the nine months ended February 22, 2025, was $413,902 thousand, down from $484,603 thousand for the same period in 2024, indicating a decrease of approximately 14.6%[149]. - Revenue decreased by $21.9 million, or 14.5%, to $129.4 million for the three months ended February 22, 2025, compared to $151.3 million for the same period in 2024[155]. - Revenue decreased by $72.6 million, or 15.0%, to $412.0 million for the nine months ended February 22, 2025, compared to $484.6 million for the same period in 2024[166]. - The company reported a goodwill impairment charge of $42,039 thousand for the three months ended February 22, 2025, which accounted for 32.5% of EBITDA[151]. Business Segments - The company reorganized its business into three engagement models: On-Demand Talent, Consulting, and Outsourced Services, aiming to enhance clarity and service delivery[136]. - The acquisition of Reference Point LLC on July 1, 2024, is expected to enhance tailored technology and data modernization offerings for financial services clients[139]. - The company expects its new organizational structure to provide greater optionality for clients and improve cross-selling opportunities[137]. - The company’s consulting segment reported same-day constant currency revenue of $54,661 thousand for the three months ended February 22, 2025, compared to $55,828 thousand for the same period in 2024[149]. - The company’s on-demand talent segment reported same-day constant currency revenue of $48,956 thousand for the three months ended February 22, 2025, down from $64,162 thousand for the same period in 2024, reflecting a decline of approximately 23.6%[149]. - On-Demand Talent segment revenue decreased by $17.1 million or 26.6%, to $47.1 million in Q3 FY2025 compared to $64.2 million in Q3 FY2024, primarily due to lower demand and a 24.8% decrease in billable hours[184]. - Consulting segment revenue declined by $3.2 million or 5.8%, to $52.6 million in Q3 FY2025, with an 18.8% decrease in billable hours, partially offset by a 12.8% increase in average bill rate[185]. - Europe and Asia Pacific segment revenue decreased by $1.1 million or 5.4%, to $18.6 million in Q3 FY2025, primarily due to a 5.5% decrease in billable hours[186]. - Outsourced Services segment revenue remained flat at $9.4 million in Q3 FY2025, with steady billable hours and average bill rates[187]. - All Other segment revenue declined by $0.5 million or 21.7%, to $1.8 million in Q3 FY2025, with a 31.9% decrease in billable hours[188]. Operational Challenges - The company anticipates continued uncertainty in macroeconomic conditions, which may adversely impact financial results through at least the rest of fiscal 2025[140]. - The company has experienced both voluntary and involuntary attrition, particularly within the sales team, which may affect near-term revenue performance[140]. - The company is focused on driving long-term growth by refining its operating model and enhancing consulting capabilities in digital transformation[135]. - Billable hours decreased by 17.0%, while the average bill rate increased by 3.4% for the three months ended February 22, 2025[155]. - Selling, general and administrative expenses increased to $51.2 million, or 39.5% of revenue, for the three months ended February 22, 2025, compared to $49.6 million, or 32.8% of revenue, for the same period in 2024[160]. Cash Flow and Investments - As of February 22, 2025, the company had $72.5 million in cash and cash equivalents, including $39.2 million held in international operations[197]. - The company has a $175.0 million senior secured revolving credit facility, with no debt outstanding as of February 22, 2025, and up to $173.5 million of potential remaining capacity[200]. - Cash provided by operating activities for the nine months ended February 22, 2025 was $2.1 million, a decrease from $18.8 million for the same period in the previous year, primarily due to a net loss of $118.5 million[212]. - Net cash used in investing activities was $13.1 million for the nine months ended February 22, 2025, primarily related to a $23.0 million acquisition of Reference Point[214]. - Net cash used in financing activities totaled $23.1 million for the nine months ended February 22, 2025, including $13.0 million for stock repurchases and $14.0 million in cash dividends[216]. - The company capitalized $21.6 million related to its technology platform initiative, which went live in most of North America in December 2024[205]. Tax and Dividend - Income tax benefit was $12.3 million, reflecting an effective tax rate of 9.4%, for the nine months ended February 22, 2025[172]. - The company paid a quarterly dividend of $0.14 per share on March 14, 2025, to stockholders of record as of February 14, 2025[206].