Resources nection(US:RGP)2019-01-04 01:41Financial Data and Key Metrics Changes - Total revenues for Q2 2019 were $188.8 million, a 20.5% increase year-over-year and a 5.7% sequential increase [7][34] - Adjusted EBITDA was $20 million, or 10.6% of revenue, compared to $13.4 million, or 8.5% of revenue in the prior year [9][35] - Net income improved to $10.6 million, or $0.33 per diluted share, compared to $8.1 million, or $0.27 per diluted share in the prior year [35] Business Line Data and Key Metrics Changes - Solutions practices, particularly transaction services and technical accounting, grew 36% year-over-year [15][16] - The technical accounting practice is a leading driver, helping clients comply with new accounting standards [16] - The standalone business from the Accretive acquisition, Countsy, continues to grow positively [14] Market Data and Key Metrics Changes - North America revenue increased approximately 25% year-over-year, reflecting the Accretive acquisition and organic growth [7][36] - Europe’s revenue increased 1% year-over-year, with a sequential increase of 12% [38] - Asia Pacific growth was driven by China, with positive trends noted [41][79] Company Strategy and Development Direction - The company is focused on improving gross margins by expanding its mix of higher-value work and implementing institutional pricing [23][25] - There is a strategic emphasis on project management services for large companies, with a shift towards more agile workforce strategies [19][73] - The company aims to differentiate itself from the Big Four by enhancing its capabilities and client service [29][74] Management's Comments on Operating Environment and Future Outlook - Management noted macro challenges such as slower growth in China and uncertainties due to trade tensions and Brexit [27][76] - Despite these challenges, the company believes it is well-positioned for growth due to a stronger sales foundation and a focus on agile models [28][74] - The company is optimistic about growth opportunities in China and has made leadership changes to enhance its presence in the region [79] Other Important Information - SG&A expenses were $55 million, or 29.1% of revenue, down from 30.3% in the prior year [35][48] - The average hourly bill rate was approximately $124, consistent with the previous quarter [46] - The company repurchased $5.5 million in stock during the quarter, with $107 million remaining in the stock buyback program [56][57] Q&A Session Summary Question: Expectations on bill rates and wage rates - Management is committed to bill rate improvement and believes it will continue through the calendar year, while wage rates are holding steady [66][68] Question: Insights on macroeconomic conditions and client feedback - Clients are focusing on bottom-line initiatives, and there is a shift towards more agile workforce strategies, providing opportunities for the company [72][73] Question: Impact of Brexit and growth in China - Clients in the UK do not anticipate significant operational migration due to Brexit, while growth in China remains strong with new leadership in place [76][79] Question: Performance of lease accounting services - Lease accounting services are growing and opening new client opportunities, although they may replace some fundamental finance work [84][86] Question: Progress in specific regional offices - Leadership changes in the Tri-State area are stabilizing, while Chicago and Southern California are showing positive growth trends [90][95]