Wednesday, October 02, 2024
Resources Connection, Inc. provides agile consulting services in North America, Europe, and the Asia Pacific. The company offers finance and accounting services, including process transformation and optimization, financial reporting and analysis, technical and operational accounting, merger and acquisition due diligence and integration, audit readiness, preparation and response, implementation of new accounting standards, and remediation support. It also provides information management services, such as program and project management, business and technology integration, data strategy, and business performance management. In addition, the company offers corporate advisory, strategic communications, and restructuring services; and corporate governance, risk, and compliance management services, such as contract and regulatory compliance, enterprise risk management, internal controls management, and operation and information technology (IT) audits. Further, it provides supply chain management services comprising strategy development, procurement and supplier management, logistics and materials management, supply chain planning and forecasting, and unique device identification compliance; and human capital services, including change management, organization development and effectiveness, compensation and incentive plan strategies, and optimization of human resources technology and operations. Additionally, the company offers legal and regulatory supporting services for commercial transactions, global compliance initiatives, law department operations, and law department business strategies and analytics. It also provides policyIQ, a proprietary cloud-based governance, risk, and compliance software application. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Overview. While the operating environment remained challenged in 1Q25 as clients continued to delay projects, RGP made strides in evolving its business model and rebuilding its brand architecture and positioning. A full recovery should follow improving client sentiment about the economy, but the Company is seeing pockets of improvement.
1Q25 Results. Revenue came in at $136.9 million, a decline of 19.5% y-o-y, but in-line with guidance. Gross margin was 36.5%, down from 39.4% a year ago and below management’s 37.5%-38.5% guide due to lower consultant utilization and unfavorable leverage on indirect costs. RGP recorded a $3.4 million gain on a sale as well as a $3.9 million impairment charge. Net loss for the quarter was $5.7 million, or a loss of $0.17/sh, compared to net income of $3.1 million, or EPS of $0.09/sh last year. Adjusted EPS was breakeven versus EPS of $0.20/sh in 1Q24.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.