Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Aug. 29, 2015 | Sep. 28, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 29, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | recn | |
Entity Registrant Name | RESOURCES CONNECTION INC | |
Entity Central Index Key | 1,084,765 | |
Current Fiscal Year End Date | --05-28 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,142,845 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 76,235 | $ 87,250 |
Short-term investments | 24,985 | 24,988 |
Trade accounts receivable, net of allowance for doubtful accounts of $3,162 and $3,291 as of August 29, 2015 and May 30, 2015, respectively | 94,510 | 96,574 |
Prepaid expenses and other current assets | 4,990 | 4,066 |
Income taxes receivable | 257 | |
Deferred income taxes | 8,573 | 8,571 |
Total current assets | 209,293 | 221,706 |
Goodwill | 171,317 | 170,878 |
Intangible assets, net | 60 | 90 |
Property and equipment, net | 21,999 | 22,001 |
Deferred income taxes | 193 | 335 |
Other assets | 1,864 | 1,971 |
Total assets | 404,726 | 416,981 |
Current liabilities: | ||
Accounts payable and accrued expenses | 12,795 | 13,310 |
Accrued salaries and related obligations | 31,585 | 48,637 |
Other liabilities | 10,018 | 6,999 |
Total current liabilities | 54,398 | 68,946 |
Other long-term liabilities | 7,222 | 7,583 |
Total liabilities | $ 61,620 | $ 76,529 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 5,000 shares authorized; zero shares issued and outstanding | ||
Common stock, $0.01 par value, 70,000 shares authorized; 57,753 and 57,488 shares issued, and 37,143 and 37,273 shares outstanding as of August 29, 2015 and May 30, 2015, respectively | $ 578 | $ 575 |
Additional paid-in capital | 379,764 | 374,285 |
Accumulated other comprehensive loss | (10,946) | (10,917) |
Retained earnings | 316,686 | 313,268 |
Treasury stock at cost, 20,610 and 20,215 shares at August 29, 2015 and May 30, 2015, respectively | (342,976) | (336,759) |
Total stockholders' equity | 343,106 | 340,452 |
Total liabilities and stockholders' equity | $ 404,726 | $ 416,981 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Consolidated Balance Sheets [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 3,162 | $ 3,291 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, shares issued | 57,753,000 | 57,488,000 |
Common stock, shares outstanding | 37,143,000 | 37,273,000 |
Treasury stock at cost, shares | 20,610,000 | 20,215,000 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Consolidated Statements Of Operations [Abstract] | ||
Revenue | $ 148,340 | $ 143,447 |
Direct cost of services, primarily payroll and related taxes for professional services employees | 90,877 | 87,222 |
Gross margin | 57,463 | 56,225 |
Selling, general and administrative expenses | 43,957 | 44,279 |
Amortization of intangible assets | 30 | 424 |
Depreciation expense | 858 | 854 |
Income from operations | 12,618 | 10,668 |
Interest income | (32) | (38) |
Income before provision for income taxes | 12,650 | 10,706 |
Provision for income taxes | 5,517 | 5,311 |
Net income | $ 7,133 | $ 5,395 |
Net income per common share: | ||
Basic | $ 0.19 | $ 0.14 |
Diluted | $ 0.19 | $ 0.14 |
Weighted average common shares outstanding: | ||
Basic | 37,295 | 38,180 |
Diluted | 37,847 | 38,335 |
Cash dividends declared per common share | $ 0.10 | $ 0.08 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
COMPREHENSIVE INCOME: | ||
Net income | $ 7,133 | $ 5,395 |
Foreign currency translation adjustment, net of tax | (29) | (1,226) |
Total comprehensive income | $ 7,104 | $ 4,169 |
Consolidated Statement Of Stock
Consolidated Statement Of Stockholders' Equity - 3 months ended Aug. 29, 2015 - USD ($) shares in Thousands, $ in Thousands | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED OTHER COMPREHENSIVE LOSS | RETAINED EARNINGS | TREASURY STOCK | Total |
Balance at May. 30, 2015 | $ 575 | $ 374,285 | $ (10,917) | $ 313,268 | $ (336,759) | $ 340,452 |
Balance (in shares) at May. 30, 2015 | 57,488 | 20,215 | 37,273 | |||
Exercise of stock options | $ 1 | 1,289 | ||||
Exercise of stock options (in shares) | 105 | 105 | ||||
Stock-based compensation expense related to share-based awards and employee stock purchases | 2,155 | |||||
Tax shortfall from employee stock option plans | (149) | |||||
Issuance of common stock under Employee Stock Purchase Plan | $ 2 | 2,184 | ||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 160 | |||||
Purchase of shares | $ (6,217) | |||||
Purchase of shares (in shares) | 395 | |||||
Cash dividends declared | (3,715) | |||||
Foreign currency translation adjustment, net of tax | (29) | $ (29) | ||||
Net income | 7,133 | 7,133 | ||||
Balance at Aug. 29, 2015 | $ 578 | $ 379,764 | $ (10,946) | $ 316,686 | $ (342,976) | $ 343,106 |
Balance (in shares) at Aug. 29, 2015 | 57,753 | 20,610 | 37,143 |
Consolidated Statement Of Stoc7
Consolidated Statement Of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Consolidated Statement Of Stockholders' Equity | ||
Cash dividends declared per common share | $ 0.10 | $ 0.08 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 7,133,000 | $ 5,395,000 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 888,000 | 1,278,000 |
Stock-based compensation expense | 2,155,000 | 1,546,000 |
Excess tax benefits from stock-based compensation | (29,000) | (14,000) |
(Gain) loss on disposal of assets | (2,000) | 1,000 |
Bad debt expense | 205,000 | |
Deferred income taxes | (268,000) | (184,000) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 1,682,000 | (1,890,000) |
Prepaid expenses and other current assets | (997,000) | 271,000 |
Income taxes | 3,311,000 | 1,781,000 |
Other assets | 105,000 | (12,000) |
Accounts payable and accrued expenses | (591,000) | (484,000) |
Accrued salaries and related obligations | (17,010,000) | (16,573,000) |
Other liabilities | (1,135,000) | 216,000 |
Net cash used in operating activities | (4,553,000) | (8,669,000) |
Cash flows from investing activities: | ||
Redemption of short-term investments | 10,000,000 | 24,000,000 |
Purchase of short-term investments | (9,997,000) | (14,998,000) |
Purchase of property and equipment | (575,000) | (357,000) |
Net cash (used in) provided by investing activities | (572,000) | 8,645,000 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 1,290,000 | 1,597,000 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 2,186,000 | 1,900,000 |
Purchase of common stock | (6,217,000) | (5,684,000) |
Cash dividends paid | (2,982,000) | (2,686,000) |
Excess tax benefits from stock-based compensation | 29,000 | 14,000 |
Net cash used in financing activities | (5,694,000) | (4,859,000) |
Effect of exchange rate changes on cash | (196,000) | (277,000) |
Net decrease in cash | (11,015,000) | (5,160,000) |
Cash and cash equivalents at beginning of period | 87,250,000 | 80,291,000 |
Cash and cash equivalents at end of period | $ 76,235,000 | $ 75,131,000 |
Description Of The Company And
Description Of The Company And Its Business | 3 Months Ended |
Aug. 29, 2015 | |
Description Of The Company And Its Business [Abstract] | |
Description Of The Company And Its Business | 1. Description of the Company and its Business Resources Connection, Inc. (“Resources Connection”), a Delaware corporation, was incorporated on November 16, 1998. Resources Connection is a multinational professional services firm; its operating entities primarily provide services under the name Resources Global Professionals (“RGP” or the “Company”). The Company is organized around client service teams utilizing experienced professionals and provides consulting and business support services in the areas of accounting; finance; corporate governance, risk and compliance; corporate advisory, strategic communications and restructuring; information management; human capital; supply chain management; healthcare solutions; and legal and regulatory. The Company has offices in the United States (“U.S.”), Asia, Australia, Canada, Europe and Mexico. The Company’s fiscal year consists of 52 or 53 weeks, ending on the last Saturday in May. The first quarters of fiscal 2016 and 2015 consisted of 13 weeks each. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 3 Months Ended |
Aug. 29, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Financial Information The financial information as of and for the three months ended August 29, 2015 and August 30, 2014 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of its financial position at such dates and the operating results and cash flows for those periods. The fiscal 2015 year-end balance sheet data was derived from audited financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the fiscal year. These condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended May 30, 2015, which are included in the Company’s Annual Report on Form 10-K for the year then ended (File No. 0-32113). Cash, Cash Equivalents and Short-Term Investments The Company considers cash on hand, deposits in banks, and short-term investments purchased with an original maturity date of three months or less to be cash and cash equivalents. The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents and short-term investments approximate the fair values due to the short maturities of these instruments. Client Reimbursements of “Out-of-Pocket” Expenses The Company recognizes all reimbursements received from clients for “out-of-pocket” expenses as revenue and all such expenses as direct cost of services. Reimbursements received from clients we re $2.9 million and $ 2.2 million for the three months ended August 29, 2015 and August 30, 2014 , respectively . Foreign Currency Translation The financial statements of subsidiaries outside the U.S. are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rates effective at the end of the period, income and expense items are translated at average exchange rates prevailing during the period and the related translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the Consolidated Balance Sheets. Gains and losses from foreign currency transactions are included in the Consolidated Statements of Operations. Net Income Per Share Information The Company presents both basic and diluted earnings per common share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period, calculated using the treasury stock method for stock options. Under the treasury stock method, assumed proceeds include the amount the employee must pay for exercising stock options, the amount of compensation cost for future services that the Company has not yet recognized and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price per common share over the period are anti-dilutive and are excluded from the calculation. The following table summarizes the calculation of net income per common share for the periods indicated (amounts in thousands, except per share amounts): Three Months Ended August 29, 2015 August 30, 2014 Net income $ $ Basic: Weighted average shares Diluted: Weighted average shares Potentially dilutive shares Total dilutive shares Net income per common share: Basic $ $ Dilutive $ $ Anti-dilutive shares not included above Stock-Based Compensation The Company recognizes compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock grants and employee stock purchases made via the Company’s Employee Stock Purchase Plan (the “ESPP”), based on estimated fair value at the date of grant. The Company estimates the fair value of share-based awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods. Stock option awards vest over four years and restricted stock award vesting is determined on an individual grant basis under the Company’s 2014 Performance Incentive Plan (“2014 Plan”). The Company determines the estimated value of stock option awards using the Black-Scholes valuation model. The Company recognizes stock-based compensation expense on a straight-line basis over the service period for options and restricted stock that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates. See Note 7 — Stock-Based Compensation Plans for further information on the 2014 Plan and stock-based compensation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. |
Intangible Assets And Goodwill
Intangible Assets And Goodwill | 3 Months Ended |
Aug. 29, 2015 | |
Intangible Assets And Goodwill [Abstract] | |
Intangible Assets And Goodwill | 3. Intangible Assets and Goodwill The following table presents details of the Company’s gross intangible asset balances, accumulated amortization balances and estimated lives (amounts in thousands): As of August 29, 2015 As of May 30, 2015 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Trade name and trademark (5 years) $ $ $ $ $ $ The following table summarizes amortization expense for the three months ended August 29, 2015 and August 30, 2014 (amounts in thousands): Three Months Ended August 29, August 30, 2015 2014 Amortization expense $ $ The Company expects a total of $90,000 of intangible asset amortization expense for the year ending May 28, 2016. After fiscal 2016, absent an acquisition, there will be no remaining unamortized balance of intangible assets. The following table summarizes the activity in the Company’s goodwill balance (amounts in thousands): For the Three Months Ended August 29, August 30, 2015 2014 Goodwill, beginning of year $ $ Impact of foreign currency exchange rate changes Goodwill, end of period $ $ |
Income Taxes
Income Taxes | 3 Months Ended |
Aug. 29, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 4. Income Taxes The Company’s provision for income taxes was $ 5.5 million (effective tax rate of approximately 44 %) and $ 5 . 3 million (effective tax rate of approximately 50 %) for the three months ended August 29, 2015 and August 30, 2014 , respectively . The Company records tax expense based upon an actual effective tax rate versus a forecasted tax rate because of the volatility in its international operations which span numerous tax jurisdictions. The provision for income taxes in the first quarter of fiscal 2016 and 2015 results from taxes on income in the U.S. and certain other foreign jurisdictions, no benefit for losses in jurisdictions in which a full valuation allowance on operating loss carryforwards had previously been established and a lower benefit for losses in certain foreign jurisdictions with tax rates lower than the U.S. statutory rates. The effective tax rate improved for the three months ended August 29, 2015 from an increase in profits in already profitable foreign entities and a decrease in losses of the remaining foreign entities with losses without any tax benefit. In addition, the Company’s effective tax rate is further impacted by the inability to benefit from losses in jurisdictions with a full valuation allowance and the unpredictability of the timing and amount of eligible disqualifying incentive stock option (“ISO”) exercises, including disqualifying dispositions under the ESPP. The Company recognized a benefit of approximate ly $ 787,000 and $ 586,000 related to stock-based compensation for nonqualified stock options expensed and for disqualifying dispositions under the ESPP during the three months ended August 29, 2015 and August 30, 2014 , respectively . |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Aug. 29, 2015 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity In April 2011, the Company’s board of directors approved a stock repurchase program (the “April 2011 program”), authorizing the repurchase, at the discretion of the Company’s senior executives, of the Company’s common stock for an aggregate dollar limit not to exceed $ 150 million. Repurchases under the program may take place in the open market or in privately negotiated transactions and may be made pursuant to a Rule 10b5-1 plan. During the three months ended August 29, 2015, the Company purchased approximately 395,000 shares of its common stock on the open market at an average price of $ 15.76 pe r share, respectively, for approximately $ 6.2 million. As of August 29, 2015, approximately $ 10.5 million remains available for future repurchases of the Company’s common stock under the April 2011 program. In July 2015 , the Company's board of directors approved a stock repurchase program, authorizing the repurchase, at the discretion of the Company's senior executives, of the Company's common stock for an aggregate dollar limit not to exceed $150 million. |
Supplemental Disclosure Of Cash
Supplemental Disclosure Of Cash Flow Information | 3 Months Ended |
Aug. 29, 2015 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | |
Supplemental Disclosure Of Cash Flow Information | 6. Supplemental Disclosure of Cash Flow Information The following table presents non-cash investing and financing activities (amounts in thousands): For the Three Months Ended August 29, August 30, 2015 2014 Non-cash investing and financing activities: Dividends declared, not paid $ $ Capitalized leasehold improvements paid directly by landlord $ $ - |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 3 Months Ended |
Aug. 29, 2015 | |
Stock Based Compensation Plans [Abstract] | |
Stock Based Compensation Plans | 7. Stock-Based Compensation Plans Stock Options and Restricted Stock The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2014 Plan equals the sum of: (1) 2,400,000 shares, plus (2) the number of shares subject to stock options granted under the Resources Connection, Inc. 2004 Performance Incentive Plan and the 1999 Long Term Incentive Plan (the “Prior Stock Plans”) and outstanding as of September 3, 2014 (the date at which the Prior Stock Plans terminated), which expire, or for any reason are cancelled or terminated, after that date without being exercised, plus (3) the number of shares subject to restricted stock, restricted stock unit and other full-value awards granted under the Prior Stock Plans that were outstanding and unvested as of September 3, 2014, which are forfeited, terminated, cancelled, or otherwise reacquired after that date without having become vested. As of August 29, 2015, 3,589,000 shares were available for award grant purposes under the 2014 Plan, subject to future increases as described in (2) and (3) above and subject to increase as then-outstanding awards expire or terminate without having become vested or exercised, as applicable. After the end of the first quarter of fiscal 2016, on August 31, 2015, the Company granted 1,152,000 stock option and restricted stock awards to then current employees at the closing market price of $15.69 on that day as a part of its annual grant process. Awards under the 2014 Plan may include, but are not limited to, stock options and restricted stock grants. Stock option grants generally vest in equal annual installments over four years and terminate ten years from the date of grant. Restricted stock award vesting is determined on an individual grant basis. Awards of restricted stock under the 2014 Plan will be counted against the available share limit as two and a half shares for every one share actually issued in connection with the award. The Company’s policy is to issue shares from its authorized shares upon the exercise of stock options. The following table summarizes the stock option activity for the three months ended August 29, 2015 (number of shares under option and aggregate intrinsic value in thousands): Number of Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at May 30, 2015 $ $ Exercised Forfeited Expired Outstanding at August 29, 2015 $ $ Exercisable at August 29, 2015 $ $ Vested and expected to vest at August 29, 2015 $ $ The aggregate intrinsic value in the table above represents the total pretax intrinsic value, which is the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal 2016 and the exercise price multiplied by the number of shares that would have been received by the option holders if they had exercised their “in the money” options on August 29, 2015. This amount will change based on changes in the fair market value of the Company’s common stock. The aggregate intrinsic value of stock options exercised for the three months ended August 29, 2015 and August 30, 2014 was $421,000 an d $347,000 , r espectively . Stock-Based Compensation Expense As of August 29, 2015 , there was $5.9 million of total unrecognized compensation cost related to non-vested employee stock options granted. That cost is expected to be recognized over a weighted-average period of 28 months. Stock-based compensation expense included in selling, general and administrative expenses for the three months ended August 29, 2015 and August 30, 2014 was $2.2 million and $ 1.5 million, respectively; this consisted of stock-based compensation expense related to employee stock options, employee stock purchases made via the Company’s ESPP and restricted stock awards. Also included in the stock-based compensation expense for the three months ended August 29, 2015 was approximately $900,000 related to the accelerated vesting of options held by Donald Murray in connection with his transition from Executive Chairman to Chairman. There were no capitalized share-based compensation costs during the three months ended August 29, 2015 and August 30, 2014 . The Company granted zero and 6,314 shares of restricted stock during the three months ended August 29, 2015 and August 30, 2014, respectively . Stock-based compensation expense for existing restricted stock awards for the three months ended August 29, 2015 and August 30, 2014 was $ 124,000 and $ 123,000 , respectively. There were 92,498 unvested restricted shares, with approximately $1.0 million of remaining unrecognized compensation cost, as of August 29, 2015 . The Company recognizes compensation expense for only the portion of stock options and restricted stock that is expected to vest, rather than recording forfeitures when they occur. If the actual number of forfeitures differs from that estimated by management, additional adjustments to compensation expense may be required in future periods. The Company reflects, in its Consolidated Statements of Cash Flows, the tax impact resulting from tax deductions in excess of expense recognized in its Consolidated Statements of Operations as a financing cash flow, which will impact the Company’s future reported cash flows from operating activities. Gross excess tax benefits totaled $ 29,000 and $ 14,000 for the three months ended August 29, 2015 and August 30, 2014, respectively. Employee Stock Purchase Plan The Company’s ESPP allows qualified employees (as defined in the ESPP) to purchase designated shares of the Company’s common stock at a price equal to 85 % of the lesser of the fair market value of common stock at the beginning or end of each semi-annual stock purchase period. The ESPP’s term expires October 16, 2024. A total of 5,900,000 shares of common stock may be issued under the ESPP. T here were 1,442,000 shares of common stock available for issuance under the ESPP as of August 29, 2015. The Company issued 160,000 and 337,000 shares of common stock pursuant to the ESPP for the three m onths ended August 29, 2015 and the year ended May 3 0 , 201 5 , respectively. |
Segment Information And Enterpr
Segment Information And Enterprise Reporting | 3 Months Ended |
Aug. 29, 2015 | |
Segment Information And Enterprise Reporting [Abstract] | |
Segment Information And Enterprise Reporting | 8. Segment Information and Enterprise Reporting The Company discloses information regarding operations outside of the U.S. The Company operates as one segment. The accounting policies for the domestic and international operations are the same as those described in Note 2 -- Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in the Company’s 2015 Annual Report on Form 10-K for the fiscal year ended May 30, 2015. Summarized information regarding the Company’s domestic and international operations is shown in the following table (amounts in thousands): Revenue for the Three Months Ended Long-Lived Assets (1) as of August 29, August 30, August 29, May 30, 2015 2014 2015 2015 United States $ $ $ $ The Netherlands Other Total $ $ $ $ (1) Long-lived assets are comprised of goodwill, intangible assets and property and equipment. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Aug. 29, 2015 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 9. Legal Proceedings The Company is involved in certain legal matters arising in the ordinary course of business. In the opinion of management, all such matters, if disposed of unfavorably, would not have a material adverse effect on the Company’s financial position, cash flows or results of operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Aug. 29, 2015 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 10. Recent Accounting Pronouncements Business Combinations: Pushdown Accounting. In Novem ber 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance which provides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. If an acquired entity elects the option to apply pushdown accounting in its separate financial statements, it should disclose information that users need to evaluate the effects of pushdown accounting on its financial statements. This guidance was effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available for issuance, the application of this guidance would be a change in accounting principle. The Company will utilize this guidance in future acquisitions. Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In August 2014, the FASB issued new guidance regarding management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for the Company for fiscal 2017 with early adoption permitted. The Company does not believe adoption of this guidance will have an impact on its consolidated financial statements and related disclosures. Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. In June 2014, the FASB issued new guidance requiring that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. The guidance is effective for the Company for fiscal 2017 with early adoption permitted. The Company does not currently have performance based awards and thus does not believe adoption of this guidance will have a material impact on its consolidated financial statements. Revenue from Contracts with Customers. In May 2014, the FASB issued a comprehensive new revenue recognition standard that will supersede most existing revenue recognition guidance and is intended to improve and converge revenue recognition and related financial reporting requirements. The standard will require companies to review contract arrangements with customers and ensure all separate performance obligations are properly recognized in compliance with the new guidance. In July 2015, the FASB delayed the required implementation date for the Company until fiscal 2019, although the Company has the option to adopt beginning in fiscal 2018. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all periods presented, or “cumulative effect” adoption, meaning the standard is applied only to the most current period presented in the financial statements. The Company is currently assessing whether the adoption of the guidance will have a material impact on its consolidated financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, or are not expected to, have a material effect on the Company’s results of operations, financial position or cash flows. |
Summary Of Significant Accoun19
Summary Of Significant Accounting Policies (Policy) | 3 Months Ended |
Aug. 29, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information The financial information as of and for the three months ended August 29, 2015 and August 30, 2014 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of its financial position at such dates and the operating results and cash flows for those periods. The fiscal 2015 year-end balance sheet data was derived from audited financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the fiscal year. These condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended May 30, 2015, which are included in the Company’s Annual Report on Form 10-K for the year then ended (File No. 0-32113). |
Client Reimbursements Of "Out-Of-Pocket" Expenses | Client Reimbursements of “Out-of-Pocket” Expenses The Company recognizes all reimbursements received from clients for “out-of-pocket” expenses as revenue and all such expenses as direct cost of services. Reimbursements received from clients we re $2.9 million and $ 2.2 million for the three months ended August 29, 2015 and August 30, 2014 , respectively . |
Foreign Currency Translation | Foreign Currency Translation The financial statements of subsidiaries outside the U.S. are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rates effective at the end of the period, income and expense items are translated at average exchange rates prevailing during the period and the related translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the Consolidated Balance Sheets. Gains and losses from foreign currency transactions are included in the Consolidated Statements of Operations. |
Net Income Per Share Information | Net Income Per Share Information The Company presents both basic and diluted earnings per common share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period, calculated using the treasury stock method for stock options. Under the treasury stock method, assumed proceeds include the amount the employee must pay for exercising stock options, the amount of compensation cost for future services that the Company has not yet recognized and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price per common share over the period are anti-dilutive and are excluded from the calculation. The following table summarizes the calculation of net income per common share for the periods indicated (amounts in thousands, except per share amounts): Three Months Ended August 29, 2015 August 30, 2014 Net income $ $ Basic: Weighted average shares Diluted: Weighted average shares Potentially dilutive shares Total dilutive shares Net income per common share: Basic $ $ Dilutive $ $ Anti-dilutive shares not included above |
Cash And Cash Equivalents | Cash, Cash Equivalents and Short-Term Investments The Company considers cash on hand, deposits in banks, and short-term investments purchased with an original maturity date of three months or less to be cash and cash equivalents. The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents and short-term investments approximate the fair values due to the short maturities of these instruments. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock grants and employee stock purchases made via the Company’s Employee Stock Purchase Plan (the “ESPP”), based on estimated fair value at the date of grant. The Company estimates the fair value of share-based awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods. Stock option awards vest over four years and restricted stock award vesting is determined on an individual grant basis under the Company’s 2014 Performance Incentive Plan (“2014 Plan”). The Company determines the estimated value of stock option awards using the Black-Scholes valuation model. The Company recognizes stock-based compensation expense on a straight-line basis over the service period for options and restricted stock that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates. See Note 7 — Stock-Based Compensation Plans for further information on the 2014 Plan and stock-based compensation. |
Use Of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. |
Summary Of Significant Accoun20
Summary Of Significant Accounting Policies (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Calculation Of Net Income Per Share | Three Months Ended August 29, 2015 August 30, 2014 Net income $ $ Basic: Weighted average shares Diluted: Weighted average shares Potentially dilutive shares Total dilutive shares Net income per common share: Basic $ $ Dilutive $ $ Anti-dilutive shares not included above |
Intangible Assets And Goodwill
Intangible Assets And Goodwill (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Intangible Assets And Goodwill [Abstract] | |
Schedule Of Details Of Intangible Assets | As of August 29, 2015 As of May 30, 2015 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Trade name and trademark (5 years) $ $ $ $ $ $ |
Schedule Of Intangible Assets Related Accumulated Amortization | Three Months Ended August 29, August 30, 2015 2014 Amortization expense $ $ |
Summary Of Activity In Goodwill Balance | For the Three Months Ended August 29, August 30, 2015 2014 Goodwill, beginning of year $ $ Impact of foreign currency exchange rate changes Goodwill, end of period $ $ |
Supplemental Disclosure Of Ca22
Supplemental Disclosure Of Cash Flow Information (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | |
Schedule Of Additional Information Regarding Cash Flows | For the Three Months Ended August 29, August 30, 2015 2014 Non-cash investing and financing activities: Dividends declared, not paid $ $ Capitalized leasehold improvements paid directly by landlord $ $ - |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Stock Based Compensation Plans [Abstract] | |
Schedule Of Stock Option Activity | Number of Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at May 30, 2015 $ $ Exercised Forfeited Expired Outstanding at August 29, 2015 $ $ Exercisable at August 29, 2015 $ $ Vested and expected to vest at August 29, 2015 $ $ |
Segment Information And Enter24
Segment Information And Enterprise Reporting (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Segment Information And Enterprise Reporting [Abstract] | |
Schedule Of Revenue From External Customers And Long-Lived Assets, By Geographical Areas | Revenue for the Three Months Ended Long-Lived Assets (1) as of August 29, August 30, August 29, May 30, 2015 2014 2015 2015 United States $ $ $ $ The Netherlands Other Total $ $ $ $ (1) Long-lived assets are comprised of goodwill, intangible assets |
Summary Of Significant Accoun25
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Reimbursements received from clients for "out-of-pocket" expenses | $ 2.9 | $ 2.2 |
Stock Incentive Plan 2014 [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Stock options vesting period | 4 years |
Summary Of Significant Accoun26
Summary Of Significant Accounting Policies (Calculation Of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Summary Of Significant Accounting Policies [Abstract] | ||
Net income | $ 7,133 | $ 5,395 |
Basic: | ||
Weighted average shares | 37,295 | 38,180 |
Diluted: | ||
Weighted average shares | 37,295 | 38,180 |
Potentially dilutive shares | 552 | 155 |
Total dilutive shares | 37,847 | 38,335 |
Net income per common share: | ||
Basic | $ 0.19 | $ 0.14 |
Diluted | $ 0.19 | $ 0.14 |
Anti-dilutive shares not included above | 3,979 | 8,025 |
Intangible Assets And Goodwil27
Intangible Assets And Goodwill (Schedule Of Details Of Intangible Assets) (Details) - USD ($) | 3 Months Ended | |
Aug. 29, 2015 | May. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net | $ 60,000 | $ 90,000 |
Expected amortization expense, 2016 | $ 90,000 | |
Trade Name And Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated lives | 5 years | |
Gross | $ 1,341,000 | 1,341,000 |
Accumulated Amortization | (1,281,000) | (1,251,000) |
Net | $ 60,000 | $ 90,000 |
Intangible Assets And Goodwil28
Intangible Assets And Goodwill (Schedule Of Intangible Assets Related Accumulated Amortization) (Details) - USD ($) | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Intangible Assets And Goodwill [Abstract] | ||
Amortization expense | $ 30,000 | $ 424,000 |
Expected amortization expense, 2016 | $ 90,000 |
Intangible Assets And Goodwil29
Intangible Assets And Goodwill (Summary Of Activity In Goodwill Balance) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Intangible Assets And Goodwill [Abstract] | ||
Goodwill, beginning of year | $ 170,878 | $ 175,427 |
Impact of foreign currency exchange rate changes | 439 | (771) |
Goodwill, end of period | $ 171,317 | $ 174,656 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Income Taxes [Abstract] | ||
Provision for income taxes | $ 5,517,000 | $ 5,311,000 |
Effective tax rate | 44.00% | 50.00% |
Tax benefit related to stock-based compensation | $ 787,000 | $ 586,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Aug. 29, 2015 | Jul. 31, 2015 | May. 30, 2015 | |
Stockholders' Equity Disclosure [Line Items] | |||
Common stock, shares authorized | 70,000,000 | 70,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, shares outstanding | 37,143,000 | 37,273,000 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | |
Preferred stock, shares outstanding | 0 | 0 | |
Stock Repurchase Program 2011 [Member] | |||
Stockholders' Equity Disclosure [Line Items] | |||
Amount authorized under a stock repurchase program | $ 150 | ||
Purchase of common stock | 395,000 | ||
Common stock shares repurchased, average price per share | $ 15.76 | ||
Cost of shares repurchased | $ 6.2 | ||
Stock repurchase plan, remaining amount | $ 10.5 | ||
Stock Repurchase Program 2015 [Member] | |||
Stockholders' Equity Disclosure [Line Items] | |||
Amount authorized under a stock repurchase program | $ 150 |
Supplemental Disclosure Of Ca32
Supplemental Disclosure Of Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | ||
Dividends declared, not paid | $ 3,715 | $ 3,046 |
Capitalized leasehold improvements paid directly by landlord | $ 300 |
Stock-Based Compensation Plan33
Stock-Based Compensation Plans (Narrative) (Details) - USD ($) | Aug. 31, 2015 | Aug. 29, 2015 | Aug. 30, 2014 | May. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for grant | 3,589,000 | |||
Share price | $ 15.69 | |||
Stock options exercise, intrinsic value | $ 421,000 | $ 347,000 | ||
Unrecognized compensation cost related to stock-based compensation | $ 5,900,000 | |||
Weighted-average period of cost to be recognized | 28 months | |||
Stock-based compensation expense | $ 2,155,000 | 1,546,000 | ||
Capitalized share based compensation costs | $ 0 | $ 0 | ||
Shares of restricted stock granted | 0 | 6,314 | ||
Share based compensation expense for restricted shares | $ 124,000 | $ 123,000 | ||
Unvested restricted shares | 92,498 | |||
Total unrecognized compensation cost | $ 1,000,000 | |||
Excess tax benefits from stock-based compensation | 29,000 | $ 14,000 | ||
Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option and restricted stock awards issued | 1,152,000 | |||
Chairman [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 900,000 | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock made available for awards | 5,900,000 | |||
Shares available for grant | 1,442,000 | |||
Percentage of exercise price per share out of fair market value | 85.00% | |||
Common stock issued | 160,000 | 337,000 | ||
Stock Incentive Plan 2014 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock made available for awards | 2,400,000 | |||
Stock options vesting period | 4 years | |||
Stock options termination period | 10 years | |||
Stock split conversion ratio | 2.5 |
Stock-Based Compensation Plan34
Stock-Based Compensation Plans (Summary Of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Aug. 29, 2015 | May. 30, 2015 | |
Stock Based Compensation Plans [Abstract] | ||
Options outstanding, Beginning balance, Number of Shares Under Option | 7,647 | |
Exercised, Number of Shares Under Option | (105) | |
Forfeited, Number of Shares Under Option | (39) | |
Expired, Number of Shares Under Option | (101) | |
Options outstanding, Ending balance, Number of Shares Under Option | 7,402 | 7,647 |
Exercisable at August 29, 2015, Number of Shares Under Option | 5,545 | |
Vested and expected to vest at Ausgust 29, 2015, Number of Shares Under Option | 7,234 | |
Options outstanding, Beginning balance, Weighted Average Exercise Price | $ 17.64 | |
Exercised, Weighted Average Exercise Price | 12.26 | |
Forfeited, Weighted Average Exercise Price | 13.09 | |
Expired, Weighted Average Exercise Price | 23.13 | |
Options outstanding, Ending balance, Weighted Average Exercise Price | 17.66 | $ 17.64 |
Exercisable at August 29, 2015, Weighted Average Exercise Price | 19.48 | |
Vested and expected to vest at M, 2015, Weighted Average Exercise Price | $ 17.78 | |
Options outstanding, Weighted Average Remaining Contractual Life (Years) | 5 years 1 month 2 days | 5 years 3 months 29 days |
Vested and expected to vest at May 30, 2015, Weighted Average Remaining Contractual Life (in years) | 4 years 15 days | |
Exercisable at Ausust 29, 2015, Weighted Average Remaining Contractual Life (Years) | 5 years 4 days | |
Options outstanding, Beginning balance, Aggregate Intrinsic Value | $ 12,414 | |
Options outstanding, Ending balance, Aggregate Intrinsic Value | 11,981 | $ 12,414 |
Exercisable at August 29, 2015, Aggregate Intrinsic Value | 5,508 | |
Vested and expected to vest at August 29, 2015, Aggregate Intrinsic Value | $ 11,441 |
Segment Information And Enter35
Segment Information And Enterprise Reporting (Narrative) (Details) | 3 Months Ended |
Aug. 29, 2015segment | |
Segment Information And Enterprise Reporting [Abstract] | |
Number of operating segments | 1 |
Segment Information And Enter36
Segment Information And Enterprise Reporting (Schedule Of Revenue From External Customers And Long-Lived Assets, By Geographical Areas) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 29, 2015 | Aug. 30, 2014 | May. 30, 2015 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 148,340 | $ 143,447 | ||
Long-Lived Assets | [1] | 193,376 | $ 192,969 | |
UNITED STATES [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 121,103 | 115,836 | ||
Long-Lived Assets | [1] | 172,690 | 172,637 | |
The Netherlands [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 3,559 | 4,294 | ||
Long-Lived Assets | [1] | 17,979 | 17,582 | |
Other [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 23,678 | $ 23,317 | ||
Long-Lived Assets | [1] | $ 2,707 | $ 2,750 | |
[1] | Long-lived assets are comprised of goodwill, intangible assets and property and equipment. |