Exhibit 99.1
FOR IMMEDIATE RELEASE
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RESOURCES CONNECTION, INC. REPORTS THIRD QUARTER RESULTS
Third Quarter Revenue Improves 19%
Costa Mesa, Calif., March 29, 2006 -- Resources Connection, Inc. (NASDAQ: RECN),
an international professional services firm, today announced financial results
for its third quarter ended February 28, 2006. Through its operating subsidiary,
Resources Global Professionals, the Company provides experienced accounting and
finance, risk management and internal audit, information management, human
capital, supply chain management and legal professionals to clients on a project
basis.
Total revenue for the third quarter of fiscal 2006 improved 18.6% to $160.3
million from $135.2 million for the same quarter in fiscal 2005. Net income for
the quarter ended February 28, 2006, was $13.8 million, or $0.27 per diluted
share, compared to net income of $13.2 million, or $0.26 per diluted share, in
the quarter ended February 28, 2005.
For the first nine months of fiscal 2006, revenue grew 20.7% to $468.0 million
compared to $387.6 million for the nine-month period in the prior year. Net
income for the nine months ended February 28, 2006 was $44.9 million, or $0.87
per diluted share versus $40.3 million, or $0.80 per diluted share, in the prior
year period.
"Our results in the third quarter demonstrate ongoing strong demand for our
services and the effect of our investments needed to build Resources Global
Professionals into a true multinational professional services firm," said Donald
Murray, Chairman and CEO of Resources Global Professionals. "Our company has
grown over 20% so far this year, and cumulatively we are generating revenues
about double where we were three years ago. Our strategy to develop a global
services capability to help our clients with their internal consulting needs is
working very well, and we are reinvesting in our business to prepare for the
years ahead."
ABOUT RESOURCES GLOBAL PROFESSIONALS
Resources Global Professionals is an international professional services firm
that provides accounting and finance, human capital, information management,
supply chain management, internal audit/risk management and legal services on a
project basis. The Company was originally part of Deloitte & Touche LLP in North
America. Its legacy in Europe is from Ernst & Young and in Asia Pacific from
Deloitte Touche Tohmatsu Australia. Today, the Company is completely
independent, autonomous and publicly traded on NASDAQ under its parent entity's
name, Resources Connection, Inc. In addition to its project professional
services, Resources Global Professionals has established itself as a leading
business services provider for companies seeking independent and cost effective
assistance for meeting or complying with many of the complex business and
regulatory issues in today's marketplace.
Headquartered in Costa Mesa, California, the Company operates from more than 70
worldwide offices. The U.S. client portfolio boasts more than 30 of the Fortune
50 companies. The Company was recently named to Forbes' 200 Best Small Companies
list for the fourth consecutive year. More information about the Company is
available at http://www.resourcesglobal.com.
Resources Global Professionals will hold a conference call for interested
analysts and investors at 5:00 pm, EDT today, March 29, 2006. This conference
call will be available for listening via a webcast on the Company's Internet web
site, at http://www.resourcesglobal.com/.
Certain statements in this press release are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may be
identified by words such as "anticipates," "believes," "can," "continue,"
"could," "estimates," "expects," "intends," "may," "plans," "potential,"
"predicts," "should," or "will" or the negative of these terms or other
comparable terminology. Such statements and all phases of Resources Connection's
operations are subject to known and unknown risks, uncertainties and other
factors, including seasonality, overall economic conditions and other factors
and uncertainties as are identified in Resources Connection's Form 10-K for the
year ended May 31, 2005 (File No. 0-32113). Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. Resources Connection's, and its industry's, actual results, levels
of activity, performance or achievements may be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. The Company undertakes no
obligation to update the forward-looking statements in this press release.
Press Contact:
David Bray
(212) 367-6824
David.Bray@eurorscg.com
Company Contact:
Steve Giusto, Chief Financial Officer
(714) 430-6500
steve.giusto@resources-us.com
RESOURCES CONNECTION, INC.
SUMMARY OF OPERATIONS
(in thousands, except per share amounts)
QUARTER NINE MONTHS
ENDED FEBRUARY 28, ENDED FEBRUARY 28,
---------------------------- ----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Revenue $ 160,255 $ 135,199 $ 467,981 $ 387,627
Direct costs of services 99,225 82,874 285,046 234,659
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Gross profit 61,030 52,325 182,935 152,968
Selling, general and administrative
expenses 38,392 29,600 109,310 82,951
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Operating income before amortization
and depreciation 22,638 22,725 73,625 70,017
Amortization of intangible assets 435 477 1,305 1,299
Depreciation expense 887 529 1,924 1,639
------------ ------------ ------------ ------------
Operating income 21,316 21,719 70,396 67,079
Interest income (1,347) (586) (3,433) (1,301)
------------ ------------ ------------ ------------
Income before provision for income taxes 22,663 22,305 73,829 68,380
Provision for income taxes 8,895 9,145 28,977 28,036
------------ ------------ ------------ ------------
Net income $ 13,768 $ 13,160 $ 44,852 $ 40,344
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Diluted net income per share $ 0.27 $ 0.26 $ 0.87 $ 0.80
============ ============ ============ ============
Diluted shares 51,893 50,968 51,779 50,382
============ ============ ============ ============
RESOURCES CONNECTION, INC.
SELECTED BALANCE SHEET INFORMATION
(in thousands)
FEBRUARY 28, MAY 31, 2005
2006 2005
------------ ------------
(unaudited) (unaudited)
Cash, cash equivalents, short-term
investments and long-term marketable
securities $ 149,176 $ 134,741
Accounts receivable, less allowances $ 93,520 $ 80,848
Total assets $ 357,751 $ 319,762
Current liabilities $ 56,691 $ 63,298
Total stockholders' equity $ 292,969 $ 248,367