Resources Connection Q4 revenue falls on demand concerns

Overview

• Resources Connection Q4 fiscal revenue falls to $139.3 mln from $148.2 mln amid challenging demand environment

• Adjusted EBITDA beats analyst expectations

• Net loss of $73.3 mln due to $69.0 mln goodwill impairment charge

Outlook

• Company focuses on cross-sell execution for long-term growth

• Resources Connection aims to improve cost efficiency

• Committed to unlocking future growth with diversification strategy

Result Drivers

• DEMAND CHALLENGES - Revenue decline attributed to challenging demand environment and extended client decision-making cycles

• ATTRITION IMPACT - Voluntary and involuntary attrition within sales team also affected revenue performance

• BILL RATE IMPROVEMENT - Focus on value-based pricing and shift towards higher value consulting projects improved average bill rate

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the business support services peer group is "buy."

• Wall Street's median 12-month price target for Resources Connection Inc is $12.00, about 54.2% above its July 23 closing price of $5.50

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release: ID:nBw824MWja