(Source: PRNewswire)
IRVINE, Calif., April 7 /PRNewswire-FirstCall/ -- Resources Connection, Inc. (Nasdaq: RECN), a multinational professional services firm that provides to clients - through its operating subsidiary, Resources Global Professionals ("Resources") - accomplished professionals in accounting and finance, risk management and internal audit, information management, human capital, supply chain management and legal services, today announced financial results for its fiscal third quarter ended February 28, 2009.
Total revenue for the third quarter of fiscal 2009 was $156.0 million versus $202.8 million for the third quarter in fiscal 2008, a decrease of 23.1%. Revenues in the U.S. declined 24.0% quarter- over-quarter while international revenues declined 20.6% (9.6% on a constant dollar basis).
"Our current business, like many other professional services companies, continues to be challenged by the negative macroeconomic environment around the world," said Thomas D. Christopoul, President and CEO of Resources. "While our clients are approaching their business initiatives much more cautiously, we believe that our value proposition to our clients remains compelling despite the obvious uncertainty in the global economy."
Total revenue for the nine months ended February 28, 2009 was $553.5 million, a decrease of 8.3% from $603.6 million for the comparable period of fiscal 2008. Revenues in the U.S. declined 11.6% versus the comparable prior year period while international revenues improved 1.0% (4.5% on a constant dollar basis).
Gross margin decreased 10 basis points to 37.2% in the third quarter of fiscal 2009 compared with 37.3% in the comparable period of fiscal 2008, primarily as a result of decreased leverage on certain employee benefit costs. Selling, general and administrative expenses, which include stock compensation expense, were $50.8 million for the third quarter of fiscal 2009, down from $57.5 million in the third quarter of fiscal 2008.
Net income was $2.1 million for the third quarter ended February 28, 2009 compared with $8.7 million for the quarter ended February 23, 2008; earnings per diluted share were $0.05 per diluted share for the third quarter of fiscal 2009 versus $0.19 per diluted share for the third quarter of the prior year. Net income includes stock compensation expense of $3.2 million and $4.8 million, net of tax, for the quarters ended February 28, 2009 and February 23, 2008, respectively.
Adjusted earnings before interest, taxes, depreciation, amortization and stock compensation expense or "Adjusted EBITDA" for the third quarter of fiscal 2009 was $11.4 million or 7.3% of revenue versus $24.1 million or 11.9% of revenue for the same quarter of fiscal 2008.
Net income was $24.0 million for the nine months ended February 28, 2009 compared with $33.3 million for the nine months ended February 23, 2008; earnings per diluted share were $0.53 per diluted share for the first nine months of fiscal 2009 versus $0.67 per diluted share for the first nine months of the prior year. Net income includes stock compensation expense of $10.6 million and $13.7 million, net of tax for the nine months ended February 28, 2009 and February 23, 2008, respectively.
Adjusted EBITDA for the first nine months of fiscal 2009 was $65.1 million or 11.8% of revenue versus $79.9 million or 13.2% of revenue for the same period of fiscal 2008.
For the nine months ended February 28, 2009, Resources generated $47.7 million in cash from operations and as of February 28, 2009 had $146 million in cash and short-term investments.
"Undoubtedly, the economic climate will continue to challenge Resources," said Christopoul. "We remain convinced that our flexible business model, combined with the strength of our balance sheet, gives us a distinct competitive advantage. While our primary focus will always be on growing revenue, we cannot ignore our infrastructure costs in this environment, and we have executed a plan to consolidate certain offices over the next few months. These actions are being taken in connection with our continued focus on client development where we see substantial potential to shift additional share of consulting spend from our traditional competitors."
In March 2009, the Company commenced a plan to consolidate seven offices into existing, larger market practices. In conjunction with this activity and other personnel actions, the Company will record a charge during the fourth quarter of approximately $3.4 million related to the estimated lease abandonment costs, including leasehold improvements, and severance. On an annualized basis, these actions, when combined with other cost reduction activities, should produce cost savings of approximately $12 million.
