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Resources Connection, Inc. Reports Financial Results for Second Quarter Fiscal 2022

– Strongest Quarterly Revenue in Ten Years –

– Sustained Strength in SG&A Leverage –

IRVINE, Calif.–(BUSINESS WIRE)–Resources Connection, Inc. (Nasdaq: RGP), a multinational business consulting firm operating as RGP (the “Company”), today announced financial results for its fiscal second quarter ended November 27, 2021.

Second Quarter Fiscal 2022 Highlights:

  • Revenue of $200.2 million, up 30.7% from the prior year quarter and 9.3% sequentially
  • Same day constant currency revenue up 30.7% from the prior year quarter and 11.4% sequentially
  • Gross margin of 39.3%, up 130 basis points from the prior year quarter
  • SG&A reduced to 28.4% of revenue, an improvement of 720 basis points from the prior year quarter
  • Net income grew to $14.3 million (net income margin of 7.1%), compared to a net loss of $1.0 million (net loss margin of 0.6%) in the prior year quarter
  • Adjusted EBITDA, a non-GAAP measure, increased to $24.9 million, doubling versus the prior year quarter, reflecting an Adjusted EBITDA margin of 12.5%, up 440 basis points
  • Diluted earnings per common share grew to $0.42, compared to diluted loss per common share of $0.03 in the prior year quarter
  • Adjusted diluted earnings per common share, a non-GAAP measure, improved to $0.47 compared to $0.21 in the prior year quarter
  • Declared cash dividends of $0.14 per share

Management Commentary

“We generated very strong quarterly results and remain pleased with our pipeline and outlook for the balance of the fiscal year,” said Kate W. Duchene, chief executive officer. “Our business model aligns perfectly with the needs and wants of both clients and professional talent. Clients have operational gaps in non-discretionary roles and are increasingly turning to RGP for agile quality talent. Clients are also pursuing transformation initiatives at accelerated levels and, therefore, need project resources for execution. RGP is their trusted provider of agile talent to accomplish finance, technology, compliance and digital transformation work. Over the past three years, we have invested in our business to deliver on the rapidly evolving needs of the marketplace while also emphasizing shareholder returns. It is an exciting time for RGP, as we continue to enhance consultant experience and provide an increasingly suitable talent platform to the best professionals who are making enlightened and strategic choices in how, when and where to work.”

Second Quarter Fiscal 2022 Results

Revenue growth continued to accelerate in the second quarter of fiscal 2022, benefiting from strong client demand and better operational execution and delivery. The increased client demand across most of the markets and solution offerings reflected macro trends accelerated by the COVID-19 pandemic. Such trends include workforce agility, workforce gaps caused by the “Great Resignation”, the demand for digital transformation services, and the increase in client spending on significant and transformational initiatives, as evidenced by larger deal size, longer project duration and record high pipelines and closed deals. The strong revenue growth across all geographies was led by solution areas in Finance and Accounting and Business Transformation and the Company’s strategic client account program. Additionally, revenue conversion benefited from the sustained improvement in operational execution and delivery, as the Company continued to refine its client-centric and borderless approach. The Company’s focus on value-based pricing also continued to drive year-over-year improvement in average bill rate, contributing to the overall revenue growth.

Gross margin was 39.3%, compared to 38.0% in the prior year quarter, primarily attributable to an improvement of 80 basis points in overall pay/bill ratio, better leverage in healthcare cost and other indirect benefits, and lower passthrough revenue from client reimbursement.

SG&A as a percentage of revenue in the second quarter of fiscal 2022 was 28.4%, a favorable reduction of 720 basis points from the second quarter of fiscal 2021. Excluding restructuring costs in both periods, SG&A as a percentage of revenue improved 310 basis points compared to the second quarter of fiscal 2021. This is primarily driven by improvements of 440 basis points in management compensation and 80 basis points in occupancy costs as a percentage of revenue, as we continue to optimize sales productivity and operating efficiency while reducing our fixed cost structure. These were partially offset by a 280-basis-point increase in bonuses and commissions as a percentage of revenue, as a direct result of significant growth in both topline and profitability.

Provision for income taxes was $5.6 million (effective tax rate of 28.0%), compared to $2.3 million (effective tax rate of 178.5%) in the prior year quarter. The decrease in effective tax rate resulted primarily from the improvement in operating results globally, enabling the Company to utilize the benefits from historical net operating losses in the foreign jurisdictions. In Q2 2021, the majority of the restructuring charges were incurred in our European entities resulting in a pre-tax loss in Europe. With significant required valuation allowances on tax benefits related to these net operating losses, no tax benefits were recognized in connection with the pre-tax loss, resulting in an effective tax rate of 178.5% in Q2 2021.

Net income increased to $14.3 million (net income margin of 7.1%), compared to a net loss of $1.0 million (net loss margin of 0.6%) in the prior year quarter, which included restructuring costs of $6.8 million. With accelerated revenue growth and improvement in cost leverage, the Company delivered an Adjusted EBITDA margin, a non-GAAP measure, of 12.5%, an improvement of 440 basis points from the prior year quarter.

SUMMARY OF CONSOLIDATED FINANCIAL RESULTS

(Unaudited. Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

November 27,

 

August 28,

 

November 28,

 

November 27,

 

November 28,

 

2021

 

2021

 

2020

 

2021

 

2020

Revenue

$

200,238

 

 

$

183,140

 

 

$

153,222

 

 

$

383,378

 

$

300,567

 

Direct cost of services

 

121,497

 

 

 

111,708

 

 

 

95,044

 

 

 

233,204

 

 

 

184,493

 

Gross profit

 

78,741

 

 

 

71,432

 

 

 

58,178

 

 

 

150,174

 

 

 

116,074

 

Selling, general and administrative expenses

 

56,881

 

 

 

51,392

 

 

 

54,552

 

 

 

108,274

 

 

 

105,707

 

Amortization of intangible assets

 

1,184

 

 

 

1,103

 

 

 

1,393

 

 

 

2,287

 

 

 

2,923

 

Depreciation expense

 

893

 

 

 

919

 

 

 

984

 

 

 

1,812

 

 

 

1,991

 

Income from operations

 

19,783

 

 

 

18,018

 

 

 

1,249

 

 

 

37,801

 

 

 

5,453

 

Interest expense, net

 

222

 

 

 

215

 

 

 

460

 

 

 

438

 

 

 

955

 

Other income (1)

 

(311

)

 

 

(306

)

 

 

(475

)

 

 

(617

)

 

(1,007

)

Income before provision for income taxes

 

19,872

 

 

 

18,109

 

 

 

1,264

 

 

 

37,980

 

 

 

5,505

 

Provision for income taxes

 

5,567

 

 

 

5,186

 

 

 

2,256

 

 

 

10,752

 

 

 

4,213

 

Net income (loss)

$

14,305

 

 

$

12,923

 

 

$

(992

)

 

$

27,228

 

$

1,292

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

$

0.43

 

 

$

0.39

 

 

$

(0.03

)

 

$

0.82

 

 $

0.04

 

Diluted

$

0.42

 

 

$

0.39

 

 

$

(0.03

)

 

$

0.81

 

$

0.04

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

33,221

 

 

 

32,894

 

 

 

32,356

 

 

 

33,058

 

 

32,270

 

Diluted

 

33,950

 

 

 

33,313

 

 

 

32,356

 

 

 

33,652

 

 

32,317

 

Cash dividends declared per common share

$

0.14

 

 

$

0.14

 

 

$

0.14

 

 

$

0.28

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

Revenue by Geography

 

 

 

 

 

 

 

 

 

North America

$

167,154

 

 

$

151,879

 

 

122,732

 

 

$

319,033

 

 

243,346

 

Europe

 

19,921

 

 

 

18,865

 

 

 

19,082

 

 

 

38,786

 

 

 

35,374

 

Asia Pacific

 

13,163

 

 

 

12,396

 

 

 

11,408

 

 

 

25,559

 

 

 

21,847

 

Total revenue

$

200,238

 

 

$

183,140

 

 

$

153,222

 

 

$

383,378

 

$

300,567

 

 

 

 

 

 

 

 

 

 

 

Cash dividend

 

 

 

 

 

 

 

 

 

Total cash dividends paid

$

4,647

 

 

$

4,603

 

 

$

4,547

 

 

$

9,250

 

$

9,059

 

Note: The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted-average shares outstanding for each period.

(1) Other income for the current fiscal year primarily consisted of COVID-19 government relief funds received globally and a gain from lease modification. Other income in fiscal 2021 was primarily related to COVID-19 government relief funds received globally.

Conference Call Information

RGP will hold a conference call for analysts and investors at 5:00 p.m., ET, today, January 5, 2022. The dial-in number for the conference call will be: 877-390-5534. No password is required; simply ask for the RGP conference call. This conference call will be available for listening via a webcast on the Company’s website: http://www.rgp.com. An audio replay of the conference call will be available through January 12, 2022 at 855-859-2056. The conference ID number for the replay is 7053709. The call will also be archived on the RGP website for 30 days.

About RGP

RGP is a global consulting firm helping businesses tackle transformation, change, and compliance challenges by supplying the right professional talent and solutions. As a next-generation human capital partner for our clients, we specialize in solving today’s most pressing business problems across the enterprise in the areas of transactions, regulations, and transformations. Our pioneering approach to workforce strategy and our agile human capital model quickly align the right resources for the work at hand with speed and efficiency. Our engagements are designed to leverage human connection and collaboration to deliver practical solutions and more impactful results that power our clients’, consultants’, and partners’ success. Our mission as an employer is to connect our team members to meaningful opportunities that further their career ambitions within the context of a supportive talent community of dedicated professionals. With approximately 5,000 professionals, we annually engage with over 2,100 clients around the world from over 40 physical practice offices and multiple virtual offices. We are their partner in delivering on the “now of work.” Headquartered in Irvine, California, RGP is proud to have served over 85% of the Fortune 100.

The Company is listed on the Nasdaq Global Select Market, the exchange’s highest tier by listing standards. To learn more about RGP, visit: http://www.rgp.com. (RGP-F)

Forward-Looking Statements

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,” “remain,” “should” or “will” or the negative of these terms or other comparable terminology. In this press release, such statements include statements regarding our growth and operational plans. Such statements and all phases of the Company’s operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements, and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include uncertainties regarding the impact of the COVID-19 pandemic on our business and the economy generally, our ability to successfully execute on our strategic initiatives, our ability to realize the level of benefit that we expect from our restructuring initiatives, our ability to compete effectively in the highly competitive professional services market and to secure new projects from clients, our ability to successfully integrate any acquired companies, risks related to the variable interest rate used in our new credit facility, overall economic conditions and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended May 29, 2021 and our other public filings made with the Securities and Exchange Commission (File No. 0-32113). Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or operating results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not intend, and undertakes no obligation, to update the forward-looking statements in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless required by law to do so.

Use of Non-GAAP Financial Measures

The Company utilizes certain financial measures and key performance indicators that are not defined by, or calculated in accordance with, GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of operations; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable GAAP measure so calculated and presented. The following non-GAAP measures are presented in this press release:

  • Same day constant currency revenue is adjusted for the following items:

    • Currency impact. In order to remove the impact of fluctuations in foreign currency exchange rates, the Company calculates constant currency revenue, which represents the outcome that would have resulted had exchange rates in the current period been the same as those in effect in the comparable prior period.
    • Business days impact. In order to remove the fluctuations caused by comparable periods having a different number of business days, the Company calculates same day revenue as current period revenue (adjusted for currency impact) divided by the number of business days in the current period, multiplied by the number of business days in the comparable prior period. The number of business days in each respective period is provided in the “Number of Business Days” section of the “Reconciliation of GAAP to Non-GAAP Financial Measures” table below.
  • Adjusted EBITDA is calculated as net income before amortization of intangible assets, depreciation expense, interest, and income taxes plus stock-based compensation expense, restructuring costs, technology transformation costs, and plus or minus contingent consideration adjustments. Adjusted EBITDA at the segment level excludes certain shared corporate administrative costs that are not practical to allocate.
  • Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.
  • Cash tax rate excludes the non-cash tax impact of stock option expirations, non-cash tax impact of valuation allowances on international deferred tax assets, and other non-cash tax items.
  • Adjusted provision for income taxes is calculated based on the Company’s cash tax rates (as defined above).
  • Adjusted diluted earnings per common share is calculated as diluted earnings per common share, plus the per share impact of stock-based compensation expense, restructuring costs, and technology transformation costs, plus or minus the per share impact of contingent consideration adjustments, and adjusted for the related tax effects of these adjustments.

We believe the above-mentioned non-GAAP measures, which are used by management to assess the core performance of our Company, provide useful information and additional clarity of our operating results to our investors in their own evaluation of the core performance of our Company and facilitate a comparison of such performance from period to period. These are not measurements of financial performance or liquidity under GAAP and should not be considered in isolation or construed as substitutes for net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our profitability or liquidity. These measures should be considered in addition to, and not as a substitute for, revenue, net income, earnings per share, cash flows, or other measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies, as other companies may calculate such financial results differently.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

Three Months Ended

 

Three Months Ended

 

Six Months Ended

Revenue by Geography

November 27,

 

August 28,

 

November 27,

 

November 28,

 

November 27,

 

November 28,

 

2021

 

2021

 

2021

 

2020

 

2021

 

2020

 

(Unaudited)

 

(Unaudited)

 

 

(Unaudited)

(Amounts in thousands, except number of business days)

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported (GAAP)

$

167,154

 

$

151,879

 

$

167,154

 

 

$

122,732

 

$

319,033

 

 

$

243,346

Currency impact

 

46

 

 

 

 

 

(107

)

 

 

 

 

 

(382

)

 

 

 

Business days impact

 

2,697

 

 

 

 

 

 

 

 

 

 

 

2,549

 

 

 

 

Same day constant currency revenue

$

169,897

 

 

 

 

$

167,047

 

 

 

 

 

$

321,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported (GAAP)

$

19,921

 

$

18,865

 

$

19,921

 

 

$

19,082

 

$

38,786

 

 

$

35,374

Currency impact

 

414

 

 

 

 

 

(138

)

 

 

 

 

 

(1,109

)

 

 

 

Same day constant currency revenue

$

20,335

 

 

 

 

$

19,783

 

 

 

 

 

$

37,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported (GAAP)

$

13,163

 

$

12,396

 

$

13,163

 

 

$

11,408

 

$

25,559

 

 

$

21,847

Currency impact

 

117

 

 

 

 

 

238

 

 

 

 

 

 

48

 

 

 

 

Business days impact

 

435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same day constant currency revenue

$

13,715

 

 

 

 

$

13,401

 

 

 

 

 

$

25,607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported (GAAP)

$

200,238

 

$

183,140

 

$

200,238

 

 

$

153,222

 

$

383,378

 

 

$

300,567

Currency impact

 

577

 

 

 

 

 

(7

)

 

 

 

 

 

(1,443

)

 

 

 

Business days impact

 

3,132

 

 

 

 

 

 

 

 

 

 

 

2,549

 

 

 

 

Same day constant currency revenue

$

203,947

 

 

 

 

$

200,231

 

 

 

 

 

$

384,484

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Business Days

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America (1)

 

62

 

 

63

 

 

62

 

 

 

62

 

 

125

 

 

 

126

Europe (2)

 

65

 

 

65

 

 

65

 

 

 

65

 

 

129

 

 

 

129

Asia Pacific (2)

 

61

 

 

63

 

 

61

 

 

 

61

 

 

124

 

 

 

124

(1) This represents the number of business days in the United States.

(
2) This represents the number of business days in the countries in which the revenues are most concentrated within the geography.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

November 27,

% of

 

 

August 28,

% of

 

November 28,

% of

Adjusted EBITDA

2021

Revenue

 

 

2021

Revenue

 

2020

Revenue

 

(Unaudited, amounts in thousands, except percentages)

Net income (loss)

$

14,305

 

7.1

 %

 

 

$

12,923

 

7.1

 %

 

$

(992

)

(0.6

)%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

1,184

 

0.6

 

 

 

 

1,103

 

0.6

 

 

 

1,393

 

0.9

 

Depreciation expense

 

893

 

0.5

 

 

 

 

919

 

0.5

 

 

 

984

 

0.7

 

Interest expense, net

 

222

 

0.1

 

 

 

 

215

 

0.1

 

 

 

460

 

0.3

 

Provision for income taxes

 

5,567

 

2.8

 

 

 

 

5,186

 

2.8

 

 

 

2,256

 

1.4

 

EBITDA

 

22,171

 

11.1

 

 

 

 

20,346

 

11.1

 

 

 

4,101

 

2.7

 

Stock-based compensation expense

 

2,019

 

1.0

 

 

 

 

1,629

 

0.9

 

 

 

1,708

 

1.1

 

Restructuring costs

 

583

 

0.3

 

 

 

 

156

 

0.1

 

 

 

6,775

 

4.4

 

Technology transformation costs (1)

 

229

 

0.1

 

 

 

 

 

 

 

 

 

 

Contingent consideration adjustment

 

(54

)

(0.0

)

 

 

 

221

 

0.1

 

 

 

(189

)

(0.1

)

Adjusted EBITDA

$

24,948

 

12.5

 %

 

 

$

22,352

 

12.2

 %

 

$

12,395

 

8.1

 %

 

(1) Commencing with the three months ended November 27, 2021, Adjusted EBITDA also excludes the impact of technology transformation costs. Technology transformation costs represent costs included in net income related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based enterprise resource planning system and talent acquisition and management system. Such costs primarily include third-party consulting fees and costs associated with dedicated internal resources that are not capitalized through the duration of the system implementations.

 

Adjusted Diluted Earnings per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share, as reported

$

0.42

 

 

 

 

$

0.39

 

 

 

$

(0.03

)

 

Stock-based compensation expense

 

0.06

 

 

 

 

 

0.05

 

 

 

 

0.05

 

 

Restructuring costs

 

0.02

 

 

 

 

 

 

 

 

 

0.21

 

 

Contingent consideration adjustment

 

 

 

 

 

 

0.01

 

 

 

 

(0.01

)

 

Technology transformation costs

 

0.01

 

 

 

 

 

 

 

 

 

 

 

Income tax impact of adjustments

 

(0.04

)

 

 

 

 

(0.02

)

 

 

 

(0.01

)

 

Adjusted diluted earnings per common share

$

0.47

 

 

 

 

$

0.43

 

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Provision for Income Taxes and Cash Tax Rate

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

$

5,567

 

 

 

 

$

5,186

 

 

 

$

2,256

 

 

Effect of non-cash tax items:

 

 

 

 

 

 

 

 

 

 

 

 

Stock option expirations

 

(139

)

 

 

 

 

(108

)

 

 

 

(123

)

 

Valuation allowance on international deferred tax assets

 

254

 

 

 

 

 

310

 

 

 

 

(1,096

)

 

Net uncertain tax position adjustments

 

(6

)

 

 

 

 

(9

)

 

 

 

 

 

Other adjustments

 

(16

)

 

 

 

 

1

 

 

 

 

(68

)

 

Adjusted provision for income taxes

$

5,660

 

 

 

 

$

5,380

 

 

 

$

969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

28.0

 %

 

 

 

28.6

 %

 

 

178.5

 %

Total effect of non-cash tax items on effective tax rate

 

0.5

 %

 

 

 

1.1

 %

 

 

(101.8

)%

Cash tax rate

 

28.5

 %

 

 

 

29.7

 %

 

 

76.7

 %

 

 

Six Months Ended

 

 

November 27,

% of

 

November 28,

% of

Adjusted EBITDA

 

2021

Revenue

 

2020

Revenue

 

 

(Unaudited, amounts in thousands, except percentages)

Net income

 

$

27,228

 

7.1

 %

 

$

1,292

 

0.4

 %

Adjustments:

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

2,287

 

0.6

 

 

 

2,923

 

1.0

 

Depreciation expense

 

 

1,812

 

0.5

 

 

 

1,991

 

0.6

 

Interest expense, net

 

 

438

 

0.1

 

 

 

955

 

0.3

 

Provision for income taxes

 

 

10,752

 

2.8

 

 

 

4,213

 

1.4

 

EBITDA

 

 

42,517

 

11.1

 

 

 

11,374

 

3.7

 

Stock-based compensation expense

 

 

3,648

 

0.9

 

 

 

3,105

 

1.1

 

Restructuring costs

 

 

739

 

0.2

 

 

 

7,791

 

2.6

 

Technology transformation costs (1)

 

 

229

 

0.1

 

 

 

 

 

Contingent consideration adjustment

 

 

167

 

0.0

 

 

 

342

 

0.1

 

Adjusted EBITDA

 

$

47,300

 

12.3

 %

 

$

22,612

 

7.5

 %

 

(1) Commencing with the three months ended November 27, 2021, Adjusted EBITDA also excludes the impact of technology transformation costs. Technology transformation costs represent costs included in net income related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based enterprise resource planning system and talent acquisition and management system. Such costs primarily include third-party consulting fees and costs associated with dedicated internal resources that are not capitalized through the duration of the system implementations.

 

Adjusted Diluted Earnings per Common Share

 

 

 

 

 

 

 

 

Diluted earnings per common share, as reported

 

$

0.81

 

 

 

$

0.04

 

 

Stock-based compensation expense

 

 

0.11

 

 

 

 

0.10

 

 

Restructuring costs

 

 

0.02

 

 

 

 

0.24

 

 

Contingent consideration adjustment

 

 

 

 

 

 

0.01

 

 

Technology transformation costs

 

 

0.01

 

 

 

 

 

 

Income tax impact of adjustments

 

 

(0.04

)

 

 

 

(0.04

)

 

Adjusted diluted earnings per common share

 

$

0.91

 

 

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

Adjusted Provision for Income Taxes and Cash Tax Rate

 

 

 

 

 

 

 

 

Provision for income taxes

 

$

10,752

 

 

 

$

4,213

 

 

Effect of non-cash tax items:

 

 

 

 

 

 

 

 

Stock option expirations

 

 

(245

)

 

 

 

(272

)

 

Valuation allowance on international deferred tax assets

 

 

564

 

 

 

 

(1,484

)

 

Net uncertain tax position adjustments

 

 

(15

)

 

 

 

 

 

Other adjustments

 

 

(15

)

 

 

 

(88

)

 

Adjusted provision for income taxes

 

$

11,041

 

 

 

$

2,369

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

28.3

 %

 

 

76.5

 %

Total effect of non-cash tax items on effective tax rate

 

 

0.8

 %

 

 

(33.5

)%

Cash tax rate

 

 

29.1

 %

 

 

43.0

 %

Contacts

Analyst Contact:

Jennifer Ryu, Chief Financial Officer

(US+) 1-714-430-6500

jennifer.ryu@rgp.com

Media Contact:
Michael Sitrick

(US+) 1-310-788-2850

mike_sitrick@sitrick.com

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