On July 18, 2024, Resources Connection Inc (RGP, Financial) released its 8-K filing detailing its financial results for the fourth quarter and full fiscal year ended May 25, 2024. Resources Connection Inc provides consulting and business initiative support services primarily through its operative subsidiary, Resources Global Professionals. The company operates in two segments: RGP (Resources Global Professionals) and Other segments, offering services in transformation and improvement, financial reporting and analysis, strategy development, and program and project management.
Fourth Quarter Fiscal 2024 Highlights
Resources Connection Inc reported revenue of $148.2 million for the fourth quarter, a decline of 19.7% compared to $184.4 million in the same period last year. Despite the revenue drop, the company managed to maintain a strong gross margin of 40.2%, only slightly down from 41.1% in the prior year quarter. Net income for the quarter was $10.5 million, translating to a net income margin of 7.1%, compared to $11.8 million and a 6.4% margin in the previous year.
Key metrics from the fourth quarter include:
| Metric | Q4 FY2024 | Q4 FY2023 |
|---|---|---|
| Revenue | $148.2 million | $184.4 million |
| Gross Margin | 40.2% | 41.1% |
| Net Income | $10.5 million | $11.8 million |
| Diluted EPS | $0.31 | $0.35 |
Full Fiscal Year 2024 Performance
For the full fiscal year 2024, Resources Connection Inc reported revenue of $632.8 million, an 18.4% decline from $775.6 million in the previous year. The gross margin for the year was 38.9%, down from 40.4% in fiscal 2023. Net income for the year was $21.0 million, with a net income margin of 3.3%, compared to $54.4 million and a 7.0% margin in the prior year.
Key metrics from the full fiscal year include:
| Metric | FY2024 | FY2023 |
|---|---|---|
| Revenue | $632.8 million | $775.6 million |
| Gross Margin | 38.9% | 40.4% |
| Net Income | $21.0 million | $54.4 million |
| Diluted EPS | $0.62 | $1.59 |
Management Commentary
"We are pleased to see stabilization in the business in the fourth quarter enabling us to deliver results above our outlook ranges, which is a testament to our people and their tenacity in a time of macro environment challenge," said Kate W. Duchene, Chief Executive Officer. "We are controlling what we can while setting the foundation for competitive advantage and growth once broader macroeconomic conditions impacting the human capital sector improve."
Analysis and Outlook
Resources Connection Inc's performance in the fourth quarter and full fiscal year 2024 reflects the broader economic challenges, including inflation and interest rate hikes, which have led to cautious client spending and investment decisions. Despite these challenges, the company has demonstrated strong cost discipline, resulting in improved SG&A expenses and maintaining healthy margins.
The company's focus on cost control and strategic initiatives, such as digital transformation and technology migration, positions it well for future growth once economic conditions stabilize. The continued emphasis on unlocking cross-sell opportunities within its client base and expanding into high-growth areas will be crucial for sustaining long-term growth.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Resources Connection Inc for further details.
