Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Feb. 23, 2019 | Mar. 26, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 23, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | recn | |
Entity Registrant Name | RESOURCES CONNECTION INC | |
Entity Central Index Key | 0001084765 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Current Fiscal Year End Date | --05-25 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,020,503 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 23, 2019 | May 26, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 47,967 | $ 56,470 |
Trade accounts receivable, net of allowance for doubtful accounts of $2,133 and $1,640 as of February 23, 2019 and May 26, 2018, respectively | 138,545 | 130,452 |
Prepaid expenses and other current assets | 8,059 | 7,230 |
Income taxes receivable | 3,462 | 729 |
Total current assets | 198,033 | 194,881 |
Goodwill | 191,149 | 191,950 |
Intangible assets, net | 15,570 | 18,531 |
Property and equipment, net | 25,748 | 22,413 |
Deferred income taxes | 1,413 | 2,850 |
Other assets | 3,218 | 2,049 |
Total assets | 435,131 | 432,674 |
Current liabilities: | ||
Accounts payable and accrued expenses | 22,404 | 23,280 |
Accrued salaries and related obligations | 46,580 | 58,418 |
Other liabilities | 12,340 | 12,826 |
Total current liabilities | 81,324 | 94,524 |
Long-term debt | 58,000 | 63,000 |
Deferred income taxes | 4,301 | |
Other long-term liabilities | 8,206 | 6,325 |
Total liabilities | 151,831 | 163,849 |
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; 63,002 and 61,252 shares issued, and 32,020 and 31,614 shares outstanding as of February 23, 2019 and May 26, 2018, respectively | 630 | 613 |
Additional paid-in capital | 458,003 | 429,578 |
Accumulated other comprehensive loss | (11,836) | (10,385) |
Retained earnings | 344,966 | 335,741 |
Treasury stock at cost, 30,982 and 29,638 shares as of February 23, 2019 and May 26, 2018, respectively | (508,463) | (486,722) |
Total stockholders' equity | 283,300 | 268,825 |
Total liabilities and stockholders' equity | $ 435,131 | $ 432,674 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Feb. 23, 2019 | May 26, 2018 |
Consolidated Balance Sheets [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 2,133 | $ 1,640 |
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 | 63,002,000 | 61,252,000 |
Common stock, shares outstanding | 32,020,000 | 31,614,000 |
Treasury stock at cost, shares | 30,982,000 | 29,638,000 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | |
Consolidated Statements Of Operations [Abstract] | ||||
Revenue | $ 179,498 | $ 172,414 | $ 546,855 | $ 470,338 |
Direct cost of services, primarily payroll and related taxes for professional services employees | 111,587 | 109,904 | 337,372 | 294,711 |
Gross margin | 67,911 | 62,510 | 209,483 | 175,627 |
Selling, general and administrative expenses | 55,587 | 55,268 | 166,912 | 150,181 |
Amortization of intangible assets | 948 | 1,004 | 2,855 | 1,326 |
Depreciation expense | 1,163 | 1,089 | 3,429 | 2,976 |
Income from operations | 10,213 | 5,149 | 36,287 | 21,144 |
Interest expense | 655 | 542 | 1,902 | 1,276 |
Interest income | (60) | (34) | (173) | (94) |
Income before provision for income taxes | 9,618 | 4,641 | 34,558 | 19,962 |
Provision for income taxes | 3,822 | 46 | 12,457 | 5,117 |
Net income | $ 5,796 | $ 4,595 | $ 22,101 | $ 14,845 |
Net income per common share: | ||||
Basic (per share) | $ 0.18 | $ 0.15 | $ 0.70 | $ 0.49 |
Diluted (per share) | $ 0.18 | $ 0.14 | $ 0.68 | $ 0.48 |
Weighted average common shares outstanding: | ||||
Basic (shares) | 31,890 | 31,440 | 31,784 | 30,473 |
Diluted (shares) | 32,370 | 32,066 | 32,428 | 30,901 |
Cash dividends declared per common share | $ 0.13 | $ 0.12 | $ 0.39 | $ 0.36 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | |
COMPREHENSIVE INCOME: | ||||
Net income | $ 5,796 | $ 4,595 | $ 22,101 | $ 14,845 |
Foreign currency translation adjustment, net of tax | 577 | 2,263 | (1,451) | 4,368 |
Total comprehensive income | $ 6,373 | $ 6,858 | $ 20,650 | $ 19,213 |
Consolidated Statement Of Stock
Consolidated Statement Of Stockholders' Equity - 9 months ended Feb. 23, 2019 - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total |
Balances at May. 26, 2018 | $ 613 | $ 429,578 | $ (486,722) | $ (10,385) | $ 335,741 | $ 268,825 |
Balances (in shares) at May. 26, 2018 | 61,252 | 29,638 | 31,614 | |||
Exercise of stock options | $ 14 | 19,125 | $ 19,139 | |||
Exercise of stock options (in shares) | 1,392 | 1,392 | ||||
Stock-based compensation expense | 4,804 | $ 4,804 | ||||
Issuance of common stock under Employee Stock Purchase Plan | $ 3 | 4,496 | 4,499 | |||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 358 | |||||
Issuance of restricted stock out of treasury stock to board of director members | $ 510 | (510) | ||||
Issuance of restricted stock out of treasury stock to board of director members (in shares) | (21) | |||||
Purchase of shares | $ (22,251) | (22,251) | ||||
Purchase of shares (in shares) | 1,365 | |||||
Cash dividends declared ($0.39 per share) | (12,366) | (12,366) | ||||
Currency translation adjustment | (1,451) | (1,451) | ||||
Net income | 22,101 | 22,101 | ||||
Balances at Feb. 23, 2019 | $ 630 | $ 458,003 | $ (508,463) | $ (11,836) | $ 344,966 | $ 283,300 |
Balances (in shares) at Feb. 23, 2019 | 63,002 | 30,982 | 32,020 |
Consolidated Statement Of Sto_2
Consolidated Statement Of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | |
Consolidated Statement Of Stockholders' Equity | ||||
Cash dividends declared per common share | $ 0.13 | $ 0.12 | $ 0.39 | $ 0.36 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows | 9 Months Ended | |
Feb. 23, 2019USD ($) | Feb. 24, 2018USD ($) | |
Cash flows from operating activities: | ||
Net income | $ 22,101,000 | $ 14,845,000 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 6,284,000 | 4,302,000 |
Stock-based compensation expense | 4,961,000 | 4,499,000 |
Contingent consideration adjustment | (374,000) | |
Loss on disposal of assets | 346,000 | 12,000 |
Bad debt expense | 477,000 | 709,000 |
Deferred income taxes | 5,699,000 | (156,000) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Trade accounts receivable | (9,416,000) | (13,040,000) |
Prepaid expenses and other current assets | (848,000) | (1,209,000) |
Income taxes | (4,988,000) | (2,094,000) |
Other assets | (1,186,000) | (23,000) |
Accounts payable and accrued expenses | (407,000) | 1,523,000 |
Accrued salaries and related obligations | (11,608,000) | (11,488,000) |
Other liabilities | 2,455,000 | (134,000) |
Net cash provided by (used in) operating activities | 13,496,000 | (2,254,000) |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 4,000 | |
Acquisition of Accretive | (3,000) | (20,047,000) |
Acquisition of taskforce, net of cash acquired | (3,423,000) | |
Purchase of property and equipment | (5,936,000) | (1,620,000) |
Net cash used in investing activities | (5,939,000) | (25,086,000) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 19,139,000 | 4,907,000 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 4,499,000 | 3,951,000 |
Purchase of common stock | (22,251,000) | (5,116,000) |
(Repayment on) proceeds from Revolving Credit Facility | (5,000,000) | 15,000,000 |
Cash dividends paid | (12,011,000) | (10,509,000) |
Net cash (used in) provided by financing activities | (15,624,000) | 8,233,000 |
Effect of exchange rate changes on cash | (436,000) | (5,000) |
Net decrease in cash | (8,503,000) | (19,112,000) |
Cash and cash equivalents at beginning of period | 56,470,000 | 62,329,000 |
Cash and cash equivalents at end of period | 47,967,000 | $ 43,217,000 |
Taskforce [Member] | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Contingent consideration adjustment | $ (376,000) |
Description Of The Company And
Description Of The Company And Its Business | 9 Months Ended |
Feb. 23, 2019 | |
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 business consulting firm; its operating entities provide services primarily under the name Resources Global Professionals (“RGP” or the “Company”). The Company provides agile consulting services and talent to its global client base utilizing experienced professionals in the areas of accounting; finance; governance, risk and compliance management; corporate advisory, strategic communications and restructuring; information management; human capital; supply chain management; 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 third quarters of fiscal 201 9 and 201 8 each consisted of 13 weeks. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 9 Months Ended |
Feb. 23, 2019 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Financial Information The financia l information as of and for the three and nine months ended February 23, 2019 and February 24, 2018 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) 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 201 8 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 U.S. (“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 full fiscal year. These condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended May 26, 2018 , which are included in the Company’s Annual Report on Form 10-K which was filed with the SEC on July 23, 2018 (File No. 0-32113). Revenue Recognition Effective May 27, 2018, the Company adopted Accounting Standards Codification (“AS C ”) Topic 606 , Revenue from Contracts with Customer s (“ASC 606”), using the modified retrospective method, which allows companies to apply the new revenue standard to reporting periods beginning in the year the standard is first implemented, while prior periods continue to be reported in accordance with previous accounting guidance. The adoption of ASC 606 did not have a significant impact o n revenue recognition; therefore, the Company did not have an opening retained earnings adjustment for the nine months ended February 23, 2019 . Revenues are recognized when control of the promised service is transferred to the Company’s clients , in an amount that reflects the consideration expected in exchange for the services. Revenue is recorded net of sales or other transaction taxes collected from clients and remitted to taxing authorities. R evenues from contracts are recognized over time, based on hours worked by the Company’s professionals. The performance of the agreed-to service over time is the single performance obligation for revenues. Certain c lients may receive discounts ( for example , volume discounts or rebates) to the amounts billed. These discounts or rebates are considered variable consideration. Management evaluates the facts and circumstances of each contract and client relationship to estimate the variable consideration assessing the most likely amount to recognize and considering management’s expectation of the volume of services to be provided over the applicable period. Rebates are the largest component of variable consideration and are estimated using the most likely amount method prescribed by ASC 606, contracts terms and estimates of revenue. Revenues are recognized net of variable consideration to the extent that it is probable that a significant reversal of revenues will not occur in subsequent periods. On a limited basis, the Company may have fixed-price contracts, for which revenues are recognized over time using the input method based on time incurred as a proportion of estimated total time. Time incurred represents work performed, which corresponds with, and therefore best depicts, the transfer of control to the client. Management uses significant judgments when estimating the total hours expected to complete the contract performance obligation. It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate . The Company recognizes revenues on a gross basis as it acts as a principal for primarily all of its revenue transactions. The Company has concluded that gross reporting is appropriate because the Company a) has the risk of identifying and hiring qualified consultants; b) has the discretion to select the consultants and establish the price and responsibilities for services to be provided; and c) bears the risk for services provided that are not fully paid for by clients. 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 were $2.7 million and $2.9 million for the three months ended February 23, 2019 and February 24, 2018 , respectively, and $9.2 million and $8.4 million for the nine months ended February 23, 2019 and February 24, 2018 , respectively. The Company’s clients are contractually obligated to pay the Company for all hours billed. We invoice the majority of our clients on a weekly basis or, in certain circumstances, on a monthly basis, in accordance with our typical arrangement of payment due within 30 days. To a much lesser extent, the Company also earns revenue if one of its consultants is hired by, or if the Company places an outside candidate with, its client. Conversion fees or permanent placement fees are recognized when one of the Company’s professionals or a candidate identified by the Company, accepts an offer of permanent employment from a client and all requisite terms of the agreement have been met. Such conversion fees or permanent placement fees are recognized when the performance obligation is considered complete, which the Company considers a) when the consultant or candidate accepts the position; b) the consultant or candidate has notified either RGP or their current employer of their decision; and c) the start date is within the Company’s current quarter. Conversion fees wer e 0.6% and 0.4% of revenue for the three months ended February 23, 2019 and February 24, 2018 , respectively, and 0.5% and 0.4% of revenue for the nine months ended February 23, 2019 and February 24, 2018 , respectively. Permanent placement fees were 0.5% of revenue for each of the three months ended February 23, 2019 and February 24, 2018 , respectively, and 0.6% and 0.3% of reven ue for the nine months ended February 23, 2019 and February 24, 2018 , respectively. The Company’s contracts generally have termination for convenience provisions and do not have termination penalties. While our clients are contractually obligated to pay the Company for all hours billed, the Company does not have long-term agreements with its clients for the provision of services and the Company’s clients may terminate engagements at any time. All costs of compensating the Company’s professionals are the responsibility of the Company and are included in direct cost of services. 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 and the amount of compensation cost for future services the Company has not yet recognized. 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 (in thousands, except per share amounts): Three Months Ended Nine Months Ended February 23, February 24, February 23, February 24, 2019 2018 2019 2018 Net income $ 5,796 $ 4,595 $ 22,101 $ 14,845 Basic: Weighted average shares 31,890 31,440 31,784 30,473 Diluted: Weighted average shares 31,890 31,440 31,784 30,473 Potentially dilutive shares 480 626 644 428 Total dilutive shares 32,370 32,066 32,428 30,901 Net income per common share: Basic $ 0.18 $ 0.15 $ 0.70 $ 0.49 Dilutive $ 0.18 $ 0.14 $ 0.68 $ 0.48 Anti-dilutive shares not included above 3,716 4,166 3,313 4,872 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, restricted stock units (“RSUs”) 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 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 (the “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 9 — 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. |
Acquisitions
Acquisitions | 9 Months Ended |
Feb. 23, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | 3. Acquisitions During fiscal 2018, the Company completed two acquisitions. The first acquisition, completed August 31, 2017 ( the second quarter of fiscal 2018 ) , was of taskforce – Management on Demand AG (“taskforce”) , a German based professional services firm founded in 2007, that provides clients with senior interim management and project management expertise. Subsequent to the acquisition, taskforce continues to operate as a separate brand. The Company paid initial consideration of €5.8 million (approximately $6.9 million at the date of acquisition) in a combination of cash and restricted stock. In addition, the purchase agreement for taskforce requires additional earn-out payments to be made based on performance in calendar years 2017, 2018 and 2019. Under accounting rules for business combinations, obligations that are contingently payable to the sellers based upon the occurrence of one or more future events are recorded as a discounted liability on the Company’s balance sheet. The Company is obligated to pay the sellers in Euros as follows: for calendar year 2017, Adjusted EBITDA times 6.1 times 20% ; and for both calendar years 2018 and 2019, Adjusted EBITDA times 6.1 times 15% ; (Adjusted EBITDA is calculated as defined in the purchase agreement). The payment for calendar year 2017 of €2.1 million (approximately $2.6 million) was made March 28, 2018. The payment for calendar year 2018 of €1 .6 million (approximately $1.9 million) was made on March 27, 2019; the payment represented an increase of €0.1 million (approximately $0. 2 million) from the estimate provided in the second quarter of fiscal 2019. The Company estimated the fair value of the obligation to pay the remaining contingent consideration for calendar year 2019 based on a number of different projections of the estimated Adjusted EBITDA for the year. The Company recorded this future obligation using a discount rate of approximately 11.0% , representing the Company’s weighted average cost of capital. The current estimated fair value of the contractual obligation to pay the contingent consideration for calendar year 2019 totals €2.1 million (approximately $2.4 million based on the exchange rate on the last day of the third quarter of fiscal 2019) as of February 23, 2019 . Each reporting period, the Company will estimate changes in the fair value of contingent consideration and any change in fair value will be recognized in the Company’s Consolidated Statements of Operations. The estimate of fair value of contingent consideration requires very subjective assumptions to be made of various potential Adjusted EBITDA results and discount rates. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and therefore could materially affect the Company’s future operating results. During the three and nine months ended February 23, 2019 , the Company decreased the estimated contingent consideration by €302,000 ( $343,000 ) and €332,000 ( $376,000 ), respectively, and also recognized accretion expense on the discounted liability. These amounts are included in S, G & A for the respective periods. Results of operations of taskforce are included in the Consolidated Statements of Operations from the date of acquisition. The second acquisition occurred December 4, 2017 (the third quarter of fiscal 2018) when the Company acquired substantially all of the assets and assumed certain liabilities of Accretive Solutions, Inc. (“Accretive”). Accretive was a professional services firm that provided expertise in accounting and finance, enterprise governance, business technology and business transformation solutions to a wide variety of organizations in the U.S. and supported startups through its Countsy suite of back office services. The Company paid consideration of $20.0 million in cash and issued 1,072,000 shares of Resources Connection, Inc. common stock restricted for sale for four years; additional cash and shares of Company stock will be due after settlement of working capital adjustments. In addition, additional amounts may be paid to the sellers at the end of a certain period of time if there are no claims or may be used to satisfy any preacquisition claims in favor of the buyers. As of the end of the third quarter of fiscal 2019, the amounts due based on initial estimates of the resolution of these items are $0.1 million in cash and 108,000 in additional shares of common stock and are accrued as a liability on the balance sheet as of February 23, 2019 . The Company completed its integration of the operations of Accretive into its business model as of the first day of fiscal 2019 and thus the Company is unable to estimate the impact of additional revenue attributable to the Accretive acquisition during fiscal 2019. |
Intangible Assets And Goodwill
Intangible Assets And Goodwill | 9 Months Ended |
Feb. 23, 2019 | |
Intangible Assets And Goodwill [Abstract] | |
Intangible Assets And Goodwill | 4. Intangible Assets and Goodwill The following table summarizes details of the Company’s intangible assets and related accumulated amortization (amounts in thousands): As of February 23, 2019 As of May 26, 2018 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Customer contracts and relationships ( 3 -8 years) $ 14,515 $ (2,899) $ 11,616 $ 14,565 $ (1,263) $ 13,302 Tradenames ( 3 -10 years) 4,429 (1,316) 3,113 4,481 (560) 3,921 Consultant list ( 3 years) 792 (400) 392 815 (205) 610 Non-compete agreements ( 3 years) 906 (457) 449 932 (234) 698 Total $ 20,642 $ (5,072) $ 15,570 $ 20,793 $ (2,262) $ 18,531 The Company recorded amortization expense of $0.9 million and $1.0 million for the three months ended February 23, 2019 and February 24, 2018 , respectively, and $2.9 million and $1.3 million for the nine months ended February 23, 2019 and February 24, 2018 , respectively . The 2019 fiscal year period includes a full year of amortization of intangible assets acquired from the Accretive and taskforce transactions while the prior year included amortization expense from the dates of acquisition. Future estimated intangible asset amortization expense (based on existing intangible assets) is $3.8 million, $3.8 million, $2.5 million, $1.8 million and $1.8 million for the y ears ending May 2 5 , 201 9 , May 30 , 20 20 , May 29 , 202 1 , May 2 8 , 202 2 and May 2 7 , 202 3 , respectively. The estimates of future i ntangible asset amortization expense do not incorporate the potential impact of future currency fluctuations when translating the financial results of the Company’s international operations that have amortizable intangible assets into U.S. dollars. The following table summarizes the activity in the Company’s goodwill balance (in thousands): February 23, February 24, 2019 2018 Goodwill, beginning of year $ 191,950 $ 171,088 Acquisitions- taskforce (see Note 3) - 8,762 Acquisitions-Accretive (see Note 3) 3 11,536 Impact of foreign currency exchange rate changes (804) 2,195 Goodwill, end of period $ 191,149 $ 193,581 |
Income Taxes
Income Taxes | 9 Months Ended |
Feb. 23, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 5 . Income Taxes On December 22, 2017, Congress enacted H.R.1, the “Tax Cuts and Jobs Act” (“Tax Reform Act”), which made significant changes to U.S. federal income tax laws including reducing the corporate rate from 35% to 21% effective January 1, 2018. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) which allows the Company to record provisional amounts related to the impact of the Tax Reform Act and adjust those amounts during a measurement period not to extend more than one year from date of enactment. During fiscal 2018 , the Company recorded a provisional income tax benefit of approximately $0.8 million upon re-measurement of U.S. deferred tax assets and liabilities at the rate the balances are expected to be realized. During the third quarter of fiscal 2019, the Company completed its accounting for the impact of the Tax Reform Act and determined that no adjustments were required to the income tax benefit of $0.8 million recorded in fiscal 2018 to reflect the tax impact of re-measuring its U.S. net deferred tax liability. The Tax Reform Act also includes the Global Intangible Low-Tax Income (“GILTI”) provision, a new mechanism for taxing certain foreign profits, the Base Erosion Anti-Abuse Tax, a minimum tax on payments to related parties, and the Foreign-Derived Intangible Income provision, a tax incentive to earn income abroad. The Company is permitted to make an accounting policy election to account for GILTI as either a period charge when the tax arises or as a part of deferred taxes. T he Company has determined to account for GILTI as a period cost and has recognized provisional tax impacts associated with GILTI as a current expense for the nine months ended February 23, 2019 . The Company’s provision for income taxes was $ 3.8 million (effective tax rate of approximately 40% ) and $ 0 .1 million (effective tax rate of approximately 1.0% ) for the three months ended February 23, 2019 and February 24, 2018 , respectively, and $ 12.5 million (effective tax rate of approximately 36% ) and $ 5 . 1 million (effective tax rate of approximately 26% ) for the nine months ended February 23, 2019 and February 24, 2018 , 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 that span numerous tax jurisdictions. The provision for income taxes in the three and nine months ended February 23, 2019 and February 24, 2018 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 provision for income taxes increased for the three months ended February 23, 2019 compared to the prior year quarter because of improved global income . Also in the prior year quarter, the Tax Reform Act was enacted and the Company reversed $2.2 million as a result of the reduction in the U.S. statutory rate applied to its year-to-date U.S. earnings and cumulative net deferred tax liability . Although the effective rate for the three months ended February 23, 2019 is positively impacted by the reduced U.S. tax rate, the effective rate increased as the prior year quarter benefited from the aforementioned initial impact of the reduction upon enactment. The Company recognized a tax expense of approximately $0.2 million and a tax benefit of $0.2 million during the third quarter of fiscal 2019 and 2018, respectively , and a tax expense of approximately $0.2 million and a tax benefit of $0.8 million, during the first nine months of fiscal 2019 and 2018, respectively, related to stock-based compensation for nonqualified stock options expensed and for disqualifying dispositions under the ESPP . |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Feb. 23, 2019 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 6. Long-Term Debt The Company has a $120 million secured revolving credit facility (“Facility”) with Bank of America, consisting of (i) a $90 million revolving loan facility (“Revolving Loan”), which includes a $5 million sublimit for the issuance of standby letters of credit, and (ii) a $30 million reducing revolving loan facility (“Reducing Revolving Loan”), any amounts of which may not be reborrowed after being repaid. The Facility is available for working capital and general corporate purposes, including potential acquisitions and stock repurchases. The Company’s obligations under the Facility are guaranteed by all of the Company’s domestic subsidiaries and secured by essentially all assets of the Company, Resources Connection LLC and their domestic subsidiaries, subject to certain customary exclusions. Borrowings under the Facility bear interest at a rate per annum of either, at the Company’s option, (i) a London Interbank Offered Rate (“LIBOR”) defined in the Facility plus a margin of 1.25% or 1.50% or (ii) an alternate base rate, plus a margin of 0.25% o r 0.50% , with the applicable margin depending on the Company's consolidated leverage ratio. The alternate base rate is the highest of (i) Bank of America’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the Eurodollar rate plus 1.0% . The Company pays an unused commitment fee on the average daily unused portion of the Facility at a rate of 0.15% to 0.25% depending upon on the Company’s consolidated leverage ratio. The Facility expires October 17, 2021 . The Facility contains both affirmative and negative covenants. Covenants include, but are not limited to, limitations on the Company’s and its subsidiaries’ ability to incur liens, incur additional indebtedness, make certain restricted payments, merge or consolidate and make disposition of assets. In addition, the Facility requires the Company to comply with financial covenants limiting the Company’s total funded debt, minimum interest coverage ratio and maximum leverage ratio. The Company was in compliance with all financial covenants under the Facility as of February 23, 2019 . Upon the occurrence of an event of default under the Facility, the lender may cease making loans, terminate the Facility and declare all amounts outstanding to be immediately due and payable. The Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. The Company’s borrowings on the Facility were $ 58 .0 million as of February 23, 2019 , all of which were under the Revolving Loan. In addition, the Company has $1.3 million of outstanding letters of credit issued under the Revolving Loan. The Company has $30.7 million remaining to borrow under the Revolving Loan and $30.0 million remaining under the Reducing Revolving Loan as of February 23, 2019 . As of February 23, 2019 , the interest rate on the Company’s borrowings was 4.0% on a tranche of $19.0 million (1-month LIBOR plus 1.50% ), 4.1% on a tranche of $24.0 million (6-month LIBOR plus 1.50% ) and 4.3% on a tranche of $15.0 million (6-month LIBOR plus 1.50% ). Subsequent to quarter end, on February 28, 2019, the Company made a $10.0 million principal payment on the Facility. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Feb. 23, 2019 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Stock Repurchase Program In July 2015, the Company’s board of directors approved a stock repurchase program (the “July 2015 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 February 23, 2019 , the Company purchased 558,755 shares of its common stock on the open market at an average price of $16.55 per share, for approximately $ 9.2 million, and during the nine months ended February 23, 2019 , the Company purchased 1,365,203 shares of its common stock on the open market at an average price of $16.30 per share, for approximately $22.3 million . As of February 23, 2019 , approximately $97.7 million remained available for future repurchases of the Company’s common stock under the July 2015 program. |
Supplemental Disclosure Of Cash
Supplemental Disclosure Of Cash Flow Information | 9 Months Ended |
Feb. 23, 2019 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | |
Supplemental Disclosure Of Cash Flow Information | 8 . Supplemental Disclosure of Cash Flow Information The following table presents information regarding income taxes paid, interest paid and non-cash investing and financing activities (amounts in thousands): For the Nine Months Ended February 23, February 24, 2019 2018 Income taxes paid $ 11,640 $ 9,189 Interest paid $ 1,878 $ 1,202 Non-cash investing and financing activities: Capitalized leasehold improvements paid directly by landlord $ 1,211 $ - Acquisition of taskforce : Issuance of common stock $ - $ 2,602 Liability for contingent consideration $ 4,202 $ 6,952 Acquisition of Accretive: Issuance of common stock $ - $ 11,754 Dividends declared, not paid $ 4,147 $ 3,780 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 9 Months Ended |
Feb. 23, 2019 | |
Stock-Based Compensation Plans [Abstract] | |
Stock-Based Compensation Plans | 9. 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 (together 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, RSUs 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 February 23, 2019 , 1,506,000 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. Awards under the 2014 Plan may include, but are not limited to, stock options, RSUs 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 nine months ended February 23, 2019 (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 26, 2018 6,869 $ 15.10 5.50 $ 12,310 Granted, at fair market value 1,290 18.96 Exercised (1,392) 13.74 Forfeited (193) 15.65 Expired (404) 18.89 Outstanding at February 23, 2019 6,170 $ 15.95 6.29 $ 12,956 Exercisable at February 23, 2019 3,644 $ 15.10 4.54 $ 10,205 Vested and expected to vest at February 23, 2019 5,858 $ 15.83 6.13 $ 12,794 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 third quarter of fiscal 2019 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 February 23, 2019 . This amount will change based on changes in the fair market value of the Company’s common stock. The total pre-tax intrinsic value related to stock options exercised during the three months ended February 23, 2019 and February 24, 2018 was $1.9 million and $0.9 million, respectively, and during the nine months ended February 23, 2019 and February 24, 2018 was $5.0 million and $1.3 mill i on, respectively. Stock-Based Compensation Expense As of February 23, 2019 , there was $9.3 million of total unrecognized compensation cost related to unvested employee stock options granted. That cost is expected to be recognized over a weighted-average period of 36 months. Stock-based compensation expense included in selling, general and administrative expenses was $1.9 million and $ 1.4 million for the three months ended February 23, 2019 and February 24, 2018 , respectively, and $ 5.0 million and $4.5 million for the nine months ended February 23, 2019 and February 24, 2018 , respectively. These amounts consisted of stock-based compensation expense related to employee stock options , employee stock purchases made via the ESPP and restricted stock awards. In addition, commencing in the third quarter of fiscal 2018, stock-based compensation expense includes expense related to stock units credited under the Directors Deferred Compensation Plan. For the three and nine months ended February 23, 2019 , this expense was $83,000 and $157,000 , respectively , and $18,000 for both the three and nine months ended February 24, 2018 . As of February 23, 2019 , there were 77,789 stock units not vested, with approximately $1.2 million of remaining unrecognized compensation cost . There were no capitalized share-based compensation costs during the nine months ended February 23, 2019 or February 24, 2018 . The Company granted 21,537 shares of restricted stock during the three and nine months ended February 23, 2019 and granted 37,778 shares and 117,588 of restricted stock during the three and nine months ended February 24, 2018 , respectively . Stock-based compensation expense for restricted stock awards was $ 0.4 million for both the three months ended February 23, 2019 and February 24, 2018 , and $1.2 million and $1.0 million for the nine months ended February 23, 2019 and February 24, 2018 , respectively. As of February 23, 2019 , there were 158,926 unvested restricted shares, with approximately $ 2.2 million of remaining unrecognized compensation cost. 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. Employee Stock Purchase Plan The 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. The Company issued 359 ,000 and 338,000 shares of common stock pursuant to the ESPP during the nine months ended February 23, 2019 and the year ended May 26, 2018, respectively. There were 221,000 shares of common stock available for issuance under the ESPP as of February 23, 2019 . |
Segment Information And Enterpr
Segment Information And Enterprise Reporting | 9 Months Ended |
Feb. 23, 2019 | |
Segment Information And Enterprise Reporting [Abstract] | |
Segment Information And Enterprise Reporting | 10. 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 Annual Report on Form 10-K for the fiscal year ended May 26, 2018. Summarized information regarding the Company’s domestic and international operations is shown in the following table (amounts in thousands): Revenue for the Revenue for the Three Months Ended Nine Months Ended Long-Lived Assets (1) as of February 23, February 24, February 23, February 24, February 23, May 26, 2019 2018 2019 2018 2019 2018 United States $ 142,409 $ 134,334 $ 432,539 $ 366,902 $ 200,057 $ 198,280 International 37,089 38,080 114,316 103,436 32,410 34,614 Total $ 179,498 $ 172,414 $ 546,855 $ 470,338 $ 232,467 $ 232,894 (1) Long-lived assets are comprised of goodwill, intangible assets and property and equipment. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Feb. 23, 2019 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 11. 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 | 9 Months Ended |
Feb. 23, 2019 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 12. Recent Accounting Pronouncements Accounting Pronouncements Adopted During Current Fiscal Year Revenue from Contracts with Customers (Topic 606) : In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, a comprehensive new revenue recognition standard that supersedes current revenue recognition guidance and is intended to improve and converge revenue recognition and related financial reporting requirements. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Effective the beginning of fiscal year 2019 ( May 27, 2018 ) , the Company adopted AS C 606 , Revenue from Contracts with Customer s , using the modified retrospective method, which allows companies to apply the new revenue standard to reporting periods beginning in the year the standard is first implemented, while prior periods continue to be reported in accordance with previous accounting guidance. The adoption of ASC 606 did not have a significant impact o n revenue recognition; therefore, the Company did not have an opening retained earnings adjustment for the nine months ended February 23, 2019 . See Note 2 — Summary of Significant Accounting Policies for additional information. Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). An entity in a hosting arrangement that is a service contract must determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Costs that cannot be capitalized include training costs, certain data conversion costs, costs incurred during preliminary project and post implementation stages. Costs that are subject to evaluation for potential capitalization are incurred during the application development stage. The guidance also specifies factors to consider when developing the period over which to amortize the capitalized costs once the arrangement is deployed for usage by the entity and elements to consider in analyzing potential impairment of the asset. The guidance is effective for financial statements for annual periods beginning after December 15, 2019 (for the Company, fiscal 2021) and for interim periods within those fiscal years. However, early adoption is permitted. The Company adopted this guidance prospectively in the first quarter of fiscal 2019 as the Company has an initiative involving a cloud computing arrangement that is a service contract for its processing of payroll. The initiative is now complete and the amount capitalized during fiscal 2019 was approximately $0.8 million and is accounted for in Other Assets in the Company’s Consolidated Balance Sheet. Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting. In May 2017, the FASB issued ASU 2017-09, which clarifies when changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the new guidance, modification accounting is only required if the fair value, vesting conditions or classification (equity or liability) of the new award are different from the original award immediately before the original award is modified. The new standard is effective for financial statements for annual periods beginning after December 15, 2017 and was adopted by the Company effective May 27, 2018. The guidance must be applied prospectively to awards modified on or after the adoption date. The future impact of ASU 2017-09 will be dependent on the nature of future stock award modifications. Accounting Pronouncements Pending Adoption Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, which eliminates, adds and modifies certain fair value measurement disclosures. The ASU is effect ive for annual reporting periods beginning after December 15, 2019 (for the Company, fiscal 2021), including interim reporting periods within those annual periods, with early adoption permitted. We do not expect the adoption of this standard to have a material impact to our C onsolidated F inancial S tatements and related disclosures. Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued ASU 2017-04, which provides guidance regarding the goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an impairment for that difference must be recorded in the income statement, rather than proceeding to Step 2. The new standard is effective for financial statements for annual periods beginning after December 15, 2019 (for the Company, fiscal 2021). Early adoption is permitted. Based on the Company’s most recent annual goodwill impairment test completed in fiscal 2018, the Company expects no initial impact on adoption. Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued ASU 2016-13, which provides guidance on accounting for credit losses, including trade receivables. The guidance requires the application of a current expected credit loss model, which measure credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The guidance is effective for annual periods beginning after December 15, 2019 (for the Company, fiscal 2021). The guidance requires companies to apply the requirements using a modified retrospective approach. The Company is currently evaluating the potential impact of the adoption of this standard on the Consolidated Financial Statements and required disclosures. Leases (Topic 842): Leases. In February 2016, the FASB issued ASU 2016-02, which amends the existing guidance to require lessees to recognize operating lease obligations on their balance sheets by recording the rights and obligations created by those leases. ASU 2016-02 will be effective for the Company beginning May 26 , 2019 . The Company will adopt this standard utilizing the optional transition method by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on the adoption date without retrospective application to comparative periods . The Company will elect the package of practical expedients permitted under the transition guidance within the new standard. The Company will also elect the practical expedient to keep leases with an initial term of 12 months or less off of the balance sheet. While the Company is still finalizing the impact this guidance will have on the Company’s C onsolidated F inancial S tatements, based on its lease portfolio as of February 23, 2019 , the Company currently expect s the adoption of this guidance to result in an initial lease liability balance up to $65 million, and an initial right of use asset balance up to $60 million. The difference between these two amounts will be recorded as a decrease to the Company’s deferred lease incentive liability and restructuring charge liability on the Consolidated Balance Sheets . 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 Accoun_2
Summary Of Significant Accounting Policies (Policy) | 9 Months Ended |
Feb. 23, 2019 | |
Summary Of Significant Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information The financia l information as of and for the three and nine months ended February 23, 2019 and February 24, 2018 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) 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 201 8 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 U.S. (“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 full fiscal year. These condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended May 26, 2018 , which are included in the Company’s Annual Report on Form 10-K which was filed with the SEC on July 23, 2018 (File No. 0-32113). |
Revenue Recognition | Revenue Recognition Effective May 27, 2018, the Company adopted Accounting Standards Codification (“AS C ”) Topic 606 , Revenue from Contracts with Customer s (“ASC 606”), using the modified retrospective method, which allows companies to apply the new revenue standard to reporting periods beginning in the year the standard is first implemented, while prior periods continue to be reported in accordance with previous accounting guidance. The adoption of ASC 606 did not have a significant impact o n revenue recognition; therefore, the Company did not have an opening retained earnings adjustment for the nine months ended February 23, 2019 . Revenues are recognized when control of the promised service is transferred to the Company’s clients , in an amount that reflects the consideration expected in exchange for the services. Revenue is recorded net of sales or other transaction taxes collected from clients and remitted to taxing authorities. R evenues from contracts are recognized over time, based on hours worked by the Company’s professionals. The performance of the agreed-to service over time is the single performance obligation for revenues. Certain c lients may receive discounts ( for example , volume discounts or rebates) to the amounts billed. These discounts or rebates are considered variable consideration. Management evaluates the facts and circumstances of each contract and client relationship to estimate the variable consideration assessing the most likely amount to recognize and considering management’s expectation of the volume of services to be provided over the applicable period. Rebates are the largest component of variable consideration and are estimated using the most likely amount method prescribed by ASC 606, contracts terms and estimates of revenue. Revenues are recognized net of variable consideration to the extent that it is probable that a significant reversal of revenues will not occur in subsequent periods. On a limited basis, the Company may have fixed-price contracts, for which revenues are recognized over time using the input method based on time incurred as a proportion of estimated total time. Time incurred represents work performed, which corresponds with, and therefore best depicts, the transfer of control to the client. Management uses significant judgments when estimating the total hours expected to complete the contract performance obligation. It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate . The Company recognizes revenues on a gross basis as it acts as a principal for primarily all of its revenue transactions. The Company has concluded that gross reporting is appropriate because the Company a) has the risk of identifying and hiring qualified consultants; b) has the discretion to select the consultants and establish the price and responsibilities for services to be provided; and c) bears the risk for services provided that are not fully paid for by clients. 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 were $2.7 million and $2.9 million for the three months ended February 23, 2019 and February 24, 2018 , respectively, and $9.2 million and $8.4 million for the nine months ended February 23, 2019 and February 24, 2018 , respectively. The Company’s clients are contractually obligated to pay the Company for all hours billed. We invoice the majority of our clients on a weekly basis or, in certain circumstances, on a monthly basis, in accordance with our typical arrangement of payment due within 30 days. To a much lesser extent, the Company also earns revenue if one of its consultants is hired by, or if the Company places an outside candidate with, its client. Conversion fees or permanent placement fees are recognized when one of the Company’s professionals or a candidate identified by the Company, accepts an offer of permanent employment from a client and all requisite terms of the agreement have been met. Such conversion fees or permanent placement fees are recognized when the performance obligation is considered complete, which the Company considers a) when the consultant or candidate accepts the position; b) the consultant or candidate has notified either RGP or their current employer of their decision; and c) the start date is within the Company’s current quarter. Conversion fees wer e 0.6% and 0.4% of revenue for the three months ended February 23, 2019 and February 24, 2018 , respectively, and 0.5% and 0.4% of revenue for the nine months ended February 23, 2019 and February 24, 2018 , respectively. Permanent placement fees were 0.5% of revenue for each of the three months ended February 23, 2019 and February 24, 2018 , respectively, and 0.6% and 0.3% of reven ue for the nine months ended February 23, 2019 and February 24, 2018 , respectively. The Company’s contracts generally have termination for convenience provisions and do not have termination penalties. While our clients are contractually obligated to pay the Company for all hours billed, the Company does not have long-term agreements with its clients for the provision of services and the Company’s clients may terminate engagements at any time. All costs of compensating the Company’s professionals are the responsibility of the Company and are included in direct cost of services. |
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 and the amount of compensation cost for future services the Company has not yet recognized. 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 (in thousands, except per share amounts): Three Months Ended Nine Months Ended February 23, February 24, February 23, February 24, 2019 2018 2019 2018 Net income $ 5,796 $ 4,595 $ 22,101 $ 14,845 Basic: Weighted average shares 31,890 31,440 31,784 30,473 Diluted: Weighted average shares 31,890 31,440 31,784 30,473 Potentially dilutive shares 480 626 644 428 Total dilutive shares 32,370 32,066 32,428 30,901 Net income per common share: Basic $ 0.18 $ 0.15 $ 0.70 $ 0.49 Dilutive $ 0.18 $ 0.14 $ 0.68 $ 0.48 Anti-dilutive shares not included above 3,716 4,166 3,313 4,872 |
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, restricted stock units (“RSUs”) 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 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 (the “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 9 — 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 Accoun_3
Summary Of Significant Accounting Policies (Tables) | 9 Months Ended |
Feb. 23, 2019 | |
Summary Of Significant Accounting Policies [Abstract] | |
Calculation Of Net Income Per Share | Three Months Ended Nine Months Ended February 23, February 24, February 23, February 24, 2019 2018 2019 2018 Net income $ 5,796 $ 4,595 $ 22,101 $ 14,845 Basic: Weighted average shares 31,890 31,440 31,784 30,473 Diluted: Weighted average shares 31,890 31,440 31,784 30,473 Potentially dilutive shares 480 626 644 428 Total dilutive shares 32,370 32,066 32,428 30,901 Net income per common share: Basic $ 0.18 $ 0.15 $ 0.70 $ 0.49 Dilutive $ 0.18 $ 0.14 $ 0.68 $ 0.48 Anti-dilutive shares not included above 3,716 4,166 3,313 4,872 |
Intangible Assets And Goodwill
Intangible Assets And Goodwill (Tables) | 9 Months Ended |
Feb. 23, 2019 | |
Intangible Assets And Goodwill [Abstract] | |
Summary Of Intangible Assets And Related Accumulated Amortization | As of February 23, 2019 As of May 26, 2018 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Customer contracts and relationships ( 3 -8 years) $ 14,515 $ (2,899) $ 11,616 $ 14,565 $ (1,263) $ 13,302 Tradenames ( 3 -10 years) 4,429 (1,316) 3,113 4,481 (560) 3,921 Consultant list ( 3 years) 792 (400) 392 815 (205) 610 Non-compete agreements ( 3 years) 906 (457) 449 932 (234) 698 Total $ 20,642 $ (5,072) $ 15,570 $ 20,793 $ (2,262) $ 18,531 |
Summary Of Activity In Goodwill Balance | February 23, February 24, 2019 2018 Goodwill, beginning of year $ 191,950 $ 171,088 Acquisitions- taskforce (see Note 3) - 8,762 Acquisitions-Accretive (see Note 3) 3 11,536 Impact of foreign currency exchange rate changes (804) 2,195 Goodwill, end of period $ 191,149 $ 193,581 |
Supplemental Disclosure Of Ca_2
Supplemental Disclosure Of Cash Flow Information (Tables) | 9 Months Ended |
Feb. 23, 2019 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | |
Schedule Of Additional Information Regarding Cash Flows | For the Nine Months Ended February 23, February 24, 2019 2018 Income taxes paid $ 11,640 $ 9,189 Interest paid $ 1,878 $ 1,202 Non-cash investing and financing activities: Capitalized leasehold improvements paid directly by landlord $ 1,211 $ - Acquisition of taskforce : Issuance of common stock $ - $ 2,602 Liability for contingent consideration $ 4,202 $ 6,952 Acquisition of Accretive: Issuance of common stock $ - $ 11,754 Dividends declared, not paid $ 4,147 $ 3,780 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 9 Months Ended |
Feb. 23, 2019 | |
Stock-Based Compensation Plans [Abstract] | |
Summary Of Share-Based Award Activity | Number of Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at May 26, 2018 6,869 $ 15.10 5.50 $ 12,310 Granted, at fair market value 1,290 18.96 Exercised (1,392) 13.74 Forfeited (193) 15.65 Expired (404) 18.89 Outstanding at February 23, 2019 6,170 $ 15.95 6.29 $ 12,956 Exercisable at February 23, 2019 3,644 $ 15.10 4.54 $ 10,205 Vested and expected to vest at February 23, 2019 5,858 $ 15.83 6.13 $ 12,794 |
Segment Information And Enter_2
Segment Information And Enterprise Reporting (Tables) | 9 Months Ended |
Feb. 23, 2019 | |
Segment Information And Enterprise Reporting [Abstract] | |
Schedule Of Revenue From External Customers And Long-Lived Assets, By Geographical Areas | Revenue for the Revenue for the Three Months Ended Nine Months Ended Long-Lived Assets (1) as of February 23, February 24, February 23, February 24, February 23, May 26, 2019 2018 2019 2018 2019 2018 United States $ 142,409 $ 134,334 $ 432,539 $ 366,902 $ 200,057 $ 198,280 International 37,089 38,080 114,316 103,436 32,410 34,614 Total $ 179,498 $ 172,414 $ 546,855 $ 470,338 $ 232,467 $ 232,894 (1) Long-lived assets are comprised of goodwill, intangible assets and property and equipment. |
Summary Of Significant Accoun_4
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue | $ 179,498 | $ 172,414 | $ 546,855 | $ 470,338 |
Stock options vesting period | 4 years | |||
Reimbursements [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue | $ 2,700 | $ 2,900 | $ 9,200 | $ 8,400 |
Conversion Fees [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue percentage | 0.60% | 0.40% | 0.50% | 0.40% |
Permanent Placement Fees [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue percentage | 0.50% | 0.50% | 0.60% | 0.30% |
Stock Incentive Plan 2014 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Stock options vesting period | 4 years |
Summary Of Significant Accoun_5
Summary Of Significant Accounting Policies (Calculation Of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | |
Summary Of Significant Accounting Policies [Abstract] | ||||
Net income | $ 5,796 | $ 4,595 | $ 22,101 | $ 14,845 |
Basic: | ||||
Weighted average shares | 31,890 | 31,440 | 31,784 | 30,473 |
Diluted: | ||||
Weighted average shares | 31,890 | 31,440 | 31,784 | 30,473 |
Potentially dilutive shares | 480 | 626 | 644 | 428 |
Total dilutive shares | 32,370 | 32,066 | 32,428 | 30,901 |
Net income per common share: | ||||
Basic (per share) | $ 0.18 | $ 0.15 | $ 0.70 | $ 0.49 |
Dilutive (per share) | $ 0.18 | $ 0.14 | $ 0.68 | $ 0.48 |
Anti-dilutive shares not included above | 3,716 | 4,166 | 3,313 | 4,872 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) | Mar. 27, 2019EUR (€) | Mar. 27, 2019USD ($) | Mar. 28, 2018EUR (€) | Mar. 28, 2018USD ($) | Dec. 04, 2017USD ($)shares | Aug. 31, 2017EUR (€) | Aug. 31, 2017USD ($) | Feb. 23, 2019EUR (€)shares | Feb. 23, 2019USD ($) | Nov. 24, 2018EUR (€) | Nov. 24, 2018USD ($) | Feb. 23, 2019EUR (€)shares | Feb. 23, 2019USD ($) | May 26, 2018entity | Feb. 23, 2019USD ($)shares |
Business Acquisition [Line Items] | |||||||||||||||
Number of businesses acquired | entity | 2 | ||||||||||||||
Contingent consideration adjustment | $ (374,000) | ||||||||||||||
Contingent Consideration Due For Calendar Year 2018 [Member] | Subsequent Event [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration paid | € 1,600,000 | $ 1,900,000 | |||||||||||||
Taskforce [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Consideration paid | € 5,800,000 | $ 6,900,000 | |||||||||||||
Discount rate | 0.110 | ||||||||||||||
Contingent consideration adjustment | € (302,000) | $ (343,000) | € (332,000) | $ (376,000) | |||||||||||
Taskforce [Member] | Contingent Consideration Due For Calendar Year 2017 [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration, factor by which EBITDA is multiplied to calculate consideration payable | 610.00% | 610.00% | 610.00% | ||||||||||||
Contingent consideration, percentage payable to employees of the acquired business | 20.00% | 20.00% | 20.00% | ||||||||||||
Contingent consideration paid | € 2,100,000 | $ 2,600,000 | |||||||||||||
Taskforce [Member] | Contingent Consideration Due For Calendar Years 2018 And 2019 [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration, factor by which EBITDA is multiplied to calculate consideration payable | 610.00% | 610.00% | 610.00% | ||||||||||||
Contingent consideration, percentage payable to employees of the acquired business | 15.00% | 15.00% | 15.00% | ||||||||||||
Contingent consideration liability | € 2,100,000 | € 2,100,000 | $ 2,400,000 | ||||||||||||
Accretive [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration liability | $ 100,000 | ||||||||||||||
Contingent consideration, shares | shares | 108,000 | 108,000 | 108,000 | ||||||||||||
Acquisition of business, cash paid | $ 20,000,000 | ||||||||||||||
Acquisition of business, shares issued | shares | 1,072,000 | ||||||||||||||
Acquisition of business, shares issued, sale restriction period | 4 years | 4 years | |||||||||||||
Scenario, Adjustment [Member] | Taskforce [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration adjustment | € 100,000 | $ 200,000 |
Intangible Assets And Goodwil_2
Intangible Assets And Goodwill (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | |
Intangible Assets And Goodwill [Abstract] | ||||
Amortization expense | $ 948 | $ 1,004 | $ 2,855 | $ 1,326 |
Estimated amortization expense for year ending May 25, 2019 | 3,800 | 3,800 | ||
Estimated amortization expense for year ending May 30, 2020 | 3,800 | 3,800 | ||
Estimated amortization expense for year ending May 29, 2021 | 2,500 | 2,500 | ||
Estimated amortization expense for year ending May 28, 2022 | 1,800 | 1,800 | ||
Estimated amortization expense for year ending May 27, 2023 | $ 1,800 | $ 1,800 |
Intangible Assets And Goodwil_3
Intangible Assets And Goodwill (Summary Of Intangible Assets And Related Accumulated Amortization) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 23, 2019 | May 26, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 20,642 | $ 20,793 |
Accumulated Amortization | (5,072) | (2,262) |
Net | 15,570 | 18,531 |
Customer Contracts And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 14,515 | 14,565 |
Accumulated Amortization | (2,899) | (1,263) |
Net | $ 11,616 | 13,302 |
Customer Contracts And Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Customer Contracts And Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 8 years | |
Tradenames [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 4,429 | 4,481 |
Accumulated Amortization | (1,316) | (560) |
Net | $ 3,113 | 3,921 |
Tradenames [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Tradenames [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 10 years | |
Consultant List [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Gross | $ 792 | 815 |
Accumulated Amortization | (400) | (205) |
Net | $ 392 | 610 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Gross | $ 906 | 932 |
Accumulated Amortization | (457) | (234) |
Net | $ 449 | $ 698 |
Intangible Assets And Goodwil_4
Intangible Assets And Goodwill (Summary Of Activity In Goodwill Balance) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 23, 2019 | Feb. 24, 2018 | |
Goodwill [Line Items] | ||
Goodwill, beginning of year | $ 191,950 | $ 171,088 |
Impact of foreign currency exchange rate changes | (804) | 2,195 |
Goodwill, end of period | 191,149 | 193,581 |
Taskforce [Member] | ||
Goodwill [Line Items] | ||
Acquisitions (see Note 3) | 8,762 | |
Accretive [Member] | ||
Goodwill [Line Items] | ||
Acquisitions (see Note 3) | $ 3 | $ 11,536 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | Dec. 31, 2018 | May 26, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | |||||||
Statutory tax rate | 21.00% | 35.00% | |||||
Remeasurement of deferred tax assets and liabilities, income tax benefit | $ 0 | $ 800,000 | |||||
Provision for income taxes | $ 3,822,000 | $ 46,000 | $ 12,457,000 | $ 5,117,000 | |||
Effective tax rate | 40.00% | 1.00% | 36.00% | 26.00% | |||
Reversal of liability for uncertain tax position | $ 2,200,000 | ||||||
Tax benefit related to stock-based compensation | $ 200,000 | $ 200,000 | $ 200,000 | $ 800,000 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Feb. 23, 2019 |
Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 120 | |
Credit facility, expiration date | Oct. 17, 2021 | |
Credit facility, remaining borrowing capacity | $ 30.7 | |
Credit facility, outstanding balance | $ 58 | |
Credit Facility [Member] | Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 0.50% | |
Credit Facility [Member] | Eurodollar Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 1.00% | |
Credit Facility [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 90 | |
Credit Facility [Member] | Reducing Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | 30 | |
Credit facility, remaining borrowing capacity | 30 | |
Credit Facility [Member] | Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, maximum borrowing capacity | 5 | |
Credit facility, outstanding balance | $ 1.3 | |
Credit Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, commitment fee | 0.15% | |
Credit Facility [Member] | Minimum [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 1.25% | |
Credit Facility [Member] | Minimum [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 0.25% | |
Credit Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, commitment fee | 0.25% | |
Credit Facility [Member] | Maximum [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 1.50% | |
Credit Facility [Member] | Maximum [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 0.50% | |
Credit Facility Tranche One [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 1.50% | |
Credit facility, effective interest rate | 4.00% | |
Credit facility, outstanding balance | $ 19 | |
Credit Facility Tranche Two [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 1.50% | |
Credit facility, effective interest rate | 4.10% | |
Credit facility, outstanding balance | $ 24 | |
Credit Facility Tranche Three [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest spread on variable rate | 1.50% | |
Credit facility, effective interest rate | 4.30% | |
Credit facility, outstanding balance | $ 15 | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Repayment of Revolving Credit Facility | $ 10 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 23, 2019 | Feb. 23, 2019 | Jul. 31, 2015 | |
Stockholders' Equity Disclosure [Line Items] | |||
Cost of shares repurchased | $ 22,251 | ||
July 2015 Program [Member] | |||
Stockholders' Equity Disclosure [Line Items] | |||
Amount authorized under a stock repurchase program | $ 150,000 | ||
Purchase of common stock (in shares) | 558,755 | 1,365,203 | |
Common stock shares repurchased, price per share | $ 16.55 | $ 16.30 | |
Cost of shares repurchased | $ 9,200 | $ 22,300 | |
Stock repurchase plan, remaining amount | $ 97,700 | $ 97,700 |
Supplemental Disclosure Of Ca_3
Supplemental Disclosure Of Cash Flow Information (Schedule Of Additional Information Regarding Cash Flows) (Details) - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | |
Feb. 23, 2019 | Feb. 24, 2018 | |
Business Acquisition [Line Items] | ||
Income taxes paid | $ 11,640 | $ 9,189 |
Interest paid | 1,878 | 1,202 |
Capitalized leasehold improvements paid directly by landlord | 1,211 | |
Dividends declared, not paid | 4,147 | $ 3,780 |
Taskforce [Member] | ||
Business Acquisition [Line Items] | ||
Issuance of common stock | 2,602 | |
Liability for contingent consideration | $ 4,202 | $ 6,952 |
Accretive [Member] | ||
Business Acquisition [Line Items] | ||
Issuance of common stock | 11,754 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | May 26, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant | 1,506,000 | 1,506,000 | |||
Stock options vesting period | 4 years | ||||
Stock options exercise, intrinsic value | $ 1,900,000 | $ 900,000 | $ 5,000,000 | $ 1,300,000 | |
Unrecognized compensation cost related to stock-based compensation | 9,300,000 | $ 9,300,000 | |||
Weighted-average period of cost to be recognized | 36 months | ||||
Stock-based compensation expense | $ 1,900,000 | $ 1,400,000 | $ 4,961,000 | 4,499,000 | |
Capitalized share based compensation costs | $ 0 | $ 0 | |||
Restricted stock, shares granted | 21,537 | 37,778 | 21,537 | 117,588 | |
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 | 2,400,000 | |||
Stock options vesting period | 4 years | ||||
Stock options termination period | 10 years | ||||
Stock split conversion ratio | 2.5 | ||||
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 | 5,900,000 | |||
Shares available for grant | 221,000 | 221,000 | |||
Percentage of exercise price per share out of fair market value | 85.00% | ||||
Common stock issued | 359,000 | 338,000 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation expense for restricted shares | $ 83,000 | $ 18,000 | $ 157,000 | $ 18,000 | |
Unvested restricted shares | 77,789 | 77,789 | |||
Total unrecognized compensation cost | $ 1,200,000 | $ 1,200,000 | |||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation expense for restricted shares | $ 400,000 | $ 400,000 | $ 1,200,000 | $ 1,000,000 | |
Unvested restricted shares | 158,926 | 158,926 | |||
Total unrecognized compensation cost | $ 2,200,000 | $ 2,200,000 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans (Summary Of Share-Based Award Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Feb. 23, 2019 | May 26, 2018 | |
Stock-Based Compensation Plans [Abstract] | ||
Beginning balance, Number of Shares Under Option | 6,869 | |
Granted, at fair market value, Number of Shares Under Option | 1,290 | |
Exercised, Number of Shares Under Option | (1,392) | |
Forfeited, Number of Shares Under Option | (193) | |
Expired, Number of Shares Under Option | (404) | |
Ending balance, Number of Shares Under Option | 6,170 | 6,869 |
Exercisable, Number of Shares Under Option | 3,644 | |
Vested and expected to vest, Number of Shares Under Option | 5,858 | |
Beginning balance, Weighted Average Exercise Price (per share) | $ 15.10 | |
Granted, at fair market value, Weighted Average Exercise Price (per share) | 18.96 | |
Exercised, Weighted Average Exercise Price (per share) | 13.74 | |
Forfeited, Weighted Average Exercise Price (per share) | 15.65 | |
Expired, Weighted Average Exercise Price (per share) | 18.89 | |
Ending balance, Weighted Average Exercise Price (per share) | 15.95 | $ 15.10 |
Exercisable, Weighted Average Exercise Price (per share) | 15.10 | |
Vested and expected to vest, Weighted Average Exercise Price (per share) | $ 15.83 | |
Weighted Average Remaining Contractual Life (in years) | 6 years 3 months 15 days | 5 years 6 months |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 4 years 6 months 15 days | |
Vested and expected to vest, Weighted Average Remaining Contractual Life (in years) | 6 years 1 month 17 days | |
Ending balance, Aggregate Intrinsic Value | $ 12,956 | $ 12,310 |
Exercisable, Aggregate Intrinsic Value | 10,205 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 12,794 |
Segment Information And Enter_3
Segment Information And Enterprise Reporting (Narrative) (Details) | 9 Months Ended |
Feb. 23, 2019segment | |
Segment Information And Enterprise Reporting [Abstract] | |
Number of operating segments | 1 |
Segment Information And Enter_4
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 | 9 Months Ended | ||||
Feb. 23, 2019 | Feb. 24, 2018 | Feb. 23, 2019 | Feb. 24, 2018 | May 26, 2018 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Revenue | $ 179,498 | $ 172,414 | $ 546,855 | $ 470,338 | ||
Long-Lived Assets | [1] | 232,467 | 232,467 | $ 232,894 | ||
United States [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Revenue | 142,409 | 134,334 | 432,539 | 366,902 | ||
Long-Lived Assets | [1] | 200,057 | 200,057 | 198,280 | ||
International [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Revenue | 37,089 | $ 38,080 | 114,316 | $ 103,436 | ||
Long-Lived Assets | [1] | $ 32,410 | $ 32,410 | $ 34,614 | ||
[1] | Long-lived assets are comprised of goodwill, intangible assets and property and equipment. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Feb. 23, 2019 | May 26, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Capitalized software costs | $ 0.8 | |
Accounting Standards Update 2016-02 [Member] | Maximum [Member] | Scenario, Forecast [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Initial lease liability | $ 65 | |
Initial right of use asset | $ 60 |