– Fourth Quarter Beats High End of
– Continued Cost Discipline Drives Improved SG&A, Beating Favorable End of
Fourth Quarter Fiscal 2024 Highlights Compared to Prior
-
Revenue of
$148.2 million compared to$184.4 million , a decline of 19.7% - Same-day constant currency revenue, a non-GAAP measure, a decline of 19.6%
- Gross margin remained strong at 40.2% compared to 41.1%
-
Selling, general and administrative expenses (“SG&A”) of
$46.4 million , net of$(4.4) million of non-cash contingent consideration adjustment, compared to$56.5 million , an improvement of 18.0% -
Net income of
$10.5 million (net income margin of 7.1%) compared to$11.8 million (net income margin of 6.4%) -
Diluted earnings per common share of
$0.31 compared to$0.35 -
Adjusted EBITDA, a non-GAAP measure, of
$13.1 million (Adjusted EBITDA margin of 8.8%) compared to$23.2 million (Adjusted EBITDA margin of 12.6%) -
Cash dividends declared of
$0.14 per share consistent with the prior year quarter -
Cash and cash equivalents plus borrowings available under senior secured revolving loan facility of
$282.5 million compared to$291.0 million at fiscal year-end 2023
Full Fiscal Year 2024 Highlights Compared to Prior Year:
-
Revenue of
$632.8 million compared to$775.6 million , a decline of 18.4% - Same-day constant currency revenue, a non-GAAP measure, declined 18.8%
- Gross margin of 38.9% compared to 40.4%
-
SG&A of
$208.9 million , net of$(4.4) million of non-cash contingent consideration adjustment, compared to$228.8 million , an improvement of 8.7% -
Net income of
$21.0 million (net income margin of 3.3%), compared to$54.4 million (net income margin of 7.0%) -
Diluted earnings per common share of
$0.62 compared to$1.59 -
Adjusted EBITDA, a non-GAAP measure, of
$51.5 million (Adjusted EBITDA margin of 8.1%) compared to$100.2 million (Adjusted EBITDA margin of 12.9%)
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
Fourth Quarter Fiscal 2024 Results
Revenue was
Gross margin was 40.2% compared to 41.1% in the prior year quarter primarily due to less favorable leverage on indirect cost of services as a result of lower revenue. Pay/bill ratio remains healthy.
SG&A for the fourth quarter of fiscal 2024 was
The fourth quarter of fiscal 2024 had income tax expense of
Net income was
Full Fiscal Year 2024 Results
Annual revenue of
Gross margin was 38.9% compared to 40.4% in the prior year primarily due to less favorable leverage on indirect cost of services as a result of lower revenue. The annual pay/bill ratio remained relatively consistent with the prior year.
The Company’s continued focus on cost discipline supported an SG&A of
Income tax expense was
|
|
||||||||||||||||||||||||
|
|
|
Three Months Ended |
|
For the Years Ended |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2022 |
|||||||||||||||
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
|
|
|
|
||||||||||
|
Revenue |
$ |
148,198 |
|
|
$ |
184,449 |
|
|
$ |
632,801 |
|
|
$ |
775,643 |
|
|
$ |
805,018 |
|
|||||
|
Direct cost of services |
|
|
88,615 |
|
|
|
|
108,731 |
|
|
|
|
386,733 |
|
|
|
|
462,501 |
|
|
|
|
488,376 |
|
|
Gross profit |
|
|
59,583 |
|
|
|
|
75,718 |
|
|
|
|
246,068 |
|
|
|
|
313,142 |
|
|
|
|
316,642 |
|
|
Selling, general and administrative expenses |
|
|
46,350 |
|
|
|
|
56,507 |
|
|
|
|
208,864 |
|
|
|
|
228,842 |
|
|
|
|
224,721 |
|
|
Amortization expense |
|
|
1,330 |
|
|
|
|
1,275 |
|
|
|
|
5,378 |
|
|
|
|
5,018 |
|
|
|
|
4,908 |
|
|
Depreciation expense |
|
|
618 |
|
|
|
|
887 |
|
|
|
|
3,050 |
|
|
|
|
3,539 |
|
|
|
|
3,575 |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
2,955 |
|
|
|
|
— |
|
|
Income from operations |
|
|
11,285 |
|
|
|
|
17,049 |
|
|
|
|
28,776 |
|
|
|
|
72,788 |
|
|
|
|
83,438 |
|
|
Interest (income) expense, net |
|
|
(234 |
) |
|
|
|
(110 |
) |
|
|
|
(1,064 |
) |
|
|
|
552 |
|
|
|
|
1,064 |
|
|
Other expense (income) |
|
|
17 |
|
|
|
|
(1 |
) |
|
|
|
11 |
|
|
|
|
(382 |
) |
|
|
|
(594 |
) |
|
Income before income tax expense |
|
|
11,502 |
|
|
|
|
17,160 |
|
|
|
|
29,829 |
|
|
|
|
72,618 |
|
|
|
|
82,968 |
|
|
Income tax expense |
|
|
1,030 |
|
|
|
|
5,392 |
|
|
|
|
8,795 |
|
|
|
|
18,259 |
|
|
|
|
15,793 |
|
|
Net income |
$ |
10,472 |
|
|
$ |
11,768 |
|
|
$ |
21,034 |
|
|
$ |
54,359 |
|
|
$ |
67,175 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
$ |
0.31 |
|
|
$ |
0.35 |
|
|
$ |
0.63 |
|
|
$ |
1.63 |
|
|
$ |
2.04 |
|
|||||
|
Diluted |
$ |
0.31 |
|
|
$ |
0.35 |
|
|
$ |
0.62 |
|
|
$ |
1.59 |
|
|
$ |
2.00 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
|
33,497 |
|
|
|
|
33,374 |
|
|
|
|
33,445 |
|
|
|
|
33,407 |
|
|
|
|
32,953 |
|
|
Diluted |
|
|
33,725 |
|
|
|
|
33,886 |
|
|
|
|
33,895 |
|
|
|
|
34,185 |
|
|
|
|
33,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash dividends declared per common share |
$ |
0.14 |
|
|
$ |
0.14 |
|
|
$ |
0.56 |
|
|
$ |
0.56 |
|
|
$ |
0.56 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Revenue by Geography |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
126,554 |
|
|
$ |
160,999 |
|
|
$ |
543,926 |
|
|
$ |
680,993 |
|
|
$ |
676,419 |
|
|||||
|
|
|
|
8,518 |
|
|
|
|
10,757 |
|
|
|
|
38,383 |
|
|
|
|
42,509 |
|
|
|
|
76,075 |
|
|
|
|
|
13,126 |
|
|
|
|
12,693 |
|
|
|
|
50,492 |
|
|
|
|
52,141 |
|
|
|
|
52,524 |
|
|
Total consolidated revenue |
$ |
148,198 |
|
|
$ |
184,449 |
|
|
$ |
632,801 |
|
|
$ |
775,643 |
|
|
$ |
805,018 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash dividend |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total cash dividends paid |
$ |
4,732 |
|
|
$ |
4,819 |
|
|
$ |
18,825 |
|
|
$ |
18,784 |
|
|
$ |
18,600 |
|
|||||
Conference Call Information
RGP will hold a conference call for analysts and investors at
About RGP
Recently named among Forbes’ America’s Best Management Consulting Firms for 2024, RGP is a global consulting firm focused on delivering consulting execution services that power clients’ operational needs and change initiatives utilizing a combination of bench and on-demand, expert and diverse talent. As a next-generation human capital partner for our clients, we specialize in co-delivery of enterprise initiatives typically precipitated by business transformation, strategic transactions or regulatory change. Our engagements are designed to leverage human connection and collaboration to deliver practical solutions and more impactful results that power our clients’, employees’, and partners’ success.
We attract top-caliber professionals with in-demand skill sets who seek a workplace environment characterized by choice and control, collaboration and human connection. The trends in today’s marketplace favor flexibility and agility as businesses confront transformation pressures and skilled labor shortages even in the face of protracted economic uncertainty. Our client engagement and talent delivery model offer speed and agility, strongly positioning us to help our clients transform their businesses and workplaces. Our model is especially relevant at a time where cost reduction initiatives drive an enhanced reliance on a flexible workforce to execute transformational projects.
With approximately 3,400 professionals, we annually engage with over 1,800 clients around the world from 38 physical practice offices and multiple virtual offices. We are their partner in delivering on the “now of work.” Headquartered in
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 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to expectations concerning matters that are not historical facts. 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 expected recovery and 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, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, potential adverse effects to our and our clients’ liquidity and financial performances from bank failures or other events affecting financial institutions, risks arising from epidemic diseases or pandemics, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, our ability to realize the level of benefit that we expect from our restructuring initiatives, risks that our recent digital expansion and technology transformation efforts may not be successful, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities possible disruption of our business from our past and future acquisitions, the possibility that our recent rebranding efforts may not be successful, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or interpretations, the possible adverse effect on our business model from the reclassification of our independent contractors by foreign tax and regulatory authorities, the possible difficulty for a third party to acquire us and resulting depression of our stock price, the operating and financial restrictions from our credit facility, risks related to the variable rate of interest in our credit facility, the possibility that we are unable to or elect not to pay our quarterly dividend payment, and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to assess our financial and operating performance that are not defined by or calculated in accordance with accounting principles generally accepted in the
-
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 same-day 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.
- EBITDA is calculated as net income before amortization expense, depreciation expense, interest and income taxes.
- Adjusted EBITDA is calculated as EBITDA plus or minus stock-based compensation expense, technology transformation costs, goodwill impairment, acquisition costs, restructuring costs, and 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 income tax expense 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 or minus the per share impact of stock-based compensation expense, technology transformation costs, goodwill impairment, acquisition costs, restructuring costs, contingent consideration adjustments, and adjusted for the related tax effects of these adjustments.
We believe the above-mentioned non-GAAP financial 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 revenue, net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our revenue, 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.
|
|
|||||||||||||||||||
|
|
|
Three Months Ended |
|
|
For the Years Ended |
||||||||||||||
|
Revenue by Geography |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
||||||||||
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
(Unaudited) |
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
As reported (GAAP) |
|
$ |
126,554 |
|
|
$ |
160,999 |
|
|
$ |
543,926 |
|
|
$ |
680,993 |
||||
|
Currency impact |
|
|
|
(359 |
) |
|
|
|
|
|
|
|
(2,153 |
) |
|
|
|
||
|
Business days impact |
|
|
|
— |
|
|
|
|
|
|
|
|
– |
|
|
|
|
||
|
Same-day constant currency revenue |
|
$ |
126,195 |
|
|
|
|
|
|
$ |
541,773 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
As reported (GAAP) |
|
$ |
8,518 |
|
|
$ |
10,757 |
|
|
$ |
38,383 |
|
|
$ |
42,509 |
||||
|
Currency impact |
|
|
|
(105 |
) |
|
|
|
|
|
|
|
(1,687 |
) |
|
|
|
||
|
Business days impact |
|
|
|
(109 |
) |
|
|
|
|
|
|
|
(639 |
) |
|
|
|
||
|
Same-day constant currency revenue |
|
$ |
8,304 |
|
|
|
|
|
|
$ |
36,057 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
As reported (GAAP) |
|
$ |
13,126 |
|
|
$ |
12,693 |
|
|
$ |
50,492 |
|
|
$ |
52,141 |
||||
|
Currency impact |
|
|
|
734 |
|
|
|
|
|
|
|
|
1,915 |
|
|
|
|
||
|
Business days impact |
|
|
|
(46 |
) |
|
|
|
|
|
|
|
(624 |
) |
|
|
|
||
|
Same-day constant currency revenue |
|
$ |
13,814 |
|
|
|
|
|
|
$ |
51,783 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
As reported (GAAP) |
|
$ |
148,198 |
|
|
$ |
184,449 |
|
|
$ |
632,801 |
|
|
$ |
775,643 |
||||
|
Currency impact |
|
|
|
270 |
|
|
|
|
|
|
|
|
(1,925 |
) |
|
|
|
||
|
Business days impact |
|
|
|
(155 |
) |
|
|
|
|
|
|
|
(1,263 |
) |
|
|
|
||
|
Same-day constant currency revenue |
|
$ |
148,313 |
|
|
|
|
|
|
$ |
629,613 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Number of Business Days |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
65 |
|
|
|
|
65 |
|
|
|
|
251 |
|
|
|
|
251 |
|
|
|
|
|
62 |
|
|
|
|
61 |
|
|
|
|
253 |
|
|
|
|
248 |
|
|
|
|
|
61 |
|
|
|
|
61 |
|
|
|
|
248 |
|
|
|
|
245 |
|
(1) |
|
This represents the number of business days in the |
|
(2) |
|
The business days in international regions represents the weighted average number of business days. |
|
|
|||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||
|
|
|
|
% of |
|
|
|
|
% of |
|||||||||
|
Adjusted EBITDA |
2024 |
|
Revenue |
|
|
2023 |
|
Revenue |
|||||||||
|
|
(Unaudited) |
|
(Unaudited) |
||||||||||||||
|
Net income |
$ |
10,472 |
|
|
7.1 |
|
% |
|
$ |
11,768 |
|
|
6.4 |
|
% |
||
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Amortization expense |
|
|
1,330 |
|
|
0.9 |
|
|
|
|
|
1,275 |
|
|
0.7 |
|
|
|
Depreciation expense |
|
|
618 |
|
|
0.4 |
|
|
|
|
|
887 |
|
|
0.5 |
|
|
|
Interest income, net |
|
|
(234 |
) |
|
(0.2 |
) |
|
|
|
|
(110 |
) |
|
(0.1 |
) |
|
|
Income tax expense |
|
|
1,030 |
|
|
0.7 |
|
|
|
|
|
5,392 |
|
|
2.9 |
|
|
|
EBITDA |
|
|
13,216 |
|
|
8.9 |
|
|
|
|
|
19,212 |
|
|
10.4 |
|
|
|
Stock-based compensation expense |
|
|
1,483 |
|
|
1.0 |
|
|
|
|
|
2,146 |
|
|
1.2 |
|
|
|
Technology transformation costs (1) |
|
|
1,914 |
|
|
1.3 |
|
|
|
|
|
1,879 |
|
|
1.0 |
|
|
|
Acquisition costs (2) |
|
|
688 |
|
|
0.5 |
|
|
|
|
|
— |
|
|
— |
|
|
|
Restructuring costs (3) |
|
|
189 |
|
|
0.1 |
|
|
|
|
|
— |
|
|
— |
|
|
|
Contingent consideration adjustment |
|
|
(4,400 |
) |
|
(3.0 |
) |
|
|
|
|
— |
|
|
— |
|
|
|
Adjusted EBITDA |
$ |
13,090 |
|
|
8.8 |
|
% |
|
$ |
23,237 |
|
|
12.6 |
|
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Adjusted Diluted Earnings per Common Share |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share, as reported |
$ |
0.31 |
|
|
|
|
|
$ |
0.35 |
|
|
|
|
||||
|
Stock-based compensation expense |
|
|
0.04 |
|
|
|
|
|
|
|
0.06 |
|
|
|
|
||
|
Technology transformation costs (1) |
|
|
0.05 |
|
|
|
|
|
|
|
0.06 |
|
|
|
|
||
|
Acquisition costs (2) |
|
|
0.02 |
|
|
|
|
|
|
|
— |
|
|
|
|
||
|
Restructuring costs (3) |
|
|
0.01 |
|
|
|
|
|
|
|
— |
|
|
|
|
||
|
Contingent consideration adjustment |
|
|
(0.13 |
) |
|
|
|
|
|
|
— |
|
|
|
|
||
|
Income tax impact of adjustments |
|
|
(0.02 |
) |
|
|
|
|
|
|
(0.03 |
) |
|
|
|
||
|
Adjusted diluted earnings per common share |
$ |
0.28 |
|
|
|
|
|
$ |
0.44 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Adjusted Income Tax (Benefit) Expense and Cash Tax Rate |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Income tax expense |
$ |
1,030 |
|
|
|
|
|
$ |
5,392 |
|
|
|
|
||||
|
Effect of non-cash tax items: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Stock option expirations |
|
|
(81 |
) |
|
|
|
|
|
|
(12 |
) |
|
|
|
||
|
Valuation allowance on deferred tax assets |
|
|
(1,415 |
) |
|
|
|
|
|
|
(414 |
) |
|
|
|
||
|
Net uncertain tax position adjustments |
|
|
(20 |
) |
|
|
|
|
|
|
(15 |
) |
|
|
|
||
|
Other adjustments |
|
|
— |
|
|
|
|
|
|
|
(1 |
) |
|
|
|
||
|
Adjusted income tax (benefit) expense |
$ |
(486 |
) |
|
|
|
|
$ |
4,950 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Effective tax rate |
|
|
9.0 |
% |
|
|
|
|
|
|
31.4 |
% |
|
|
|
||
|
Total effect of non-cash tax items on effective tax rate |
|
|
(13.2 |
)% |
|
|
|
|
|
|
(2.5 |
)% |
|
|
|
||
|
Cash tax rate |
|
|
(4.2 |
)% |
|
|
|
|
|
|
28.9 |
% |
|
|
|
||
|
(1) |
|
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 systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized. |
|
(2) |
|
Acquisition costs primarily represent one-time costs included in net income related to the Company’s business acquisitions, which include fees paid to the Company’s broker and other professional services firms. |
|
(3) |
|
The Company initiated the |
|
|
||||||||||||||||||||||||
|
|
For the Years Ended |
|||||||||||||||||||||||
|
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|||||||||||||
|
Adjusted EBITDA |
2024 |
|
Revenue |
|
2023 |
|
Revenue |
|
2022 |
|
Revenue |
|||||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|||||||||||||||||||
|
Net income |
$ |
21,034 |
|
|
3.3 |
|
% |
|
$ |
54,359 |
|
|
7.0 |
% |
|
$ |
67,175 |
|
|
8.3 |
% |
|||
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Amortization expense |
|
|
5,378 |
|
|
0.9 |
|
|
|
|
|
5,018 |
|
|
0.6 |
|
|
|
|
4,908 |
|
|
0.6 |
|
|
Depreciation expense |
|
|
3,050 |
|
|
0.5 |
|
|
|
|
|
3,539 |
|
|
0.4 |
|
|
|
|
3,575 |
|
|
0.4 |
|
|
Interest (income) expense, net |
|
|
(1,064 |
) |
|
(0.2 |
) |
|
|
|
|
552 |
|
|
0.1 |
|
|
|
|
1,064 |
|
|
0.2 |
|
|
Income tax expense |
|
|
8,795 |
|
|
1.4 |
|
|
|
|
|
18,259 |
|
|
2.4 |
|
|
|
|
15,793 |
|
|
2.0 |
|
|
EBITDA |
|
|
37,193 |
|
|
5.9 |
|
|
|
|
|
81,727 |
|
|
10.5 |
|
|
|
|
92,515 |
|
|
11.5 |
|
|
Stock-based compensation expense |
|
|
5,732 |
|
|
0.9 |
|
|
|
|
|
9,521 |
|
|
1.2 |
|
|
|
|
8,168 |
|
|
1.0 |
|
|
Technology transformation costs (1) |
|
|
6,901 |
|
|
1.1 |
|
|
|
|
|
6,355 |
|
|
0.8 |
|
|
|
|
1,449 |
|
|
0.2 |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
2,955 |
|
|
0.4 |
|
|
|
|
— |
|
|
— |
|
|
Acquisition costs (3) |
|
|
1,970 |
|
|
0.3 |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
Restructuring costs (4) |
|
|
4,087 |
|
|
0.6 |
|
|
|
|
|
(364 |
) |
|
— |
|
|
|
|
833 |
|
|
0.1 |
|
|
Contingent consideration adjustment |
|
|
(4,400 |
) |
|
(0.7 |
) |
|
|
|
|
— |
|
|
— |
|
|
|
|
166 |
|
|
— |
|
|
Adjusted EBITDA |
$ |
51,483 |
|
|
8.1 |
|
% |
|
$ |
100,194 |
|
|
12.9 |
% |
|
$ |
103,131 |
|
|
12.8 |
% |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Adjusted Diluted Earnings per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Diluted earnings per common share, as reported |
$ |
0.62 |
|
|
|
|
|
$ |
1.59 |
|
|
|
|
|
$ |
2.00 |
|
|
|
|
||||
|
Stock-based compensation expense |
|
|
0.17 |
|
|
|
|
|
|
|
0.28 |
|
|
|
|
|
|
|
0.24 |
|
|
|
|
|
|
Technology transformation costs (1) |
|
|
0.20 |
|
|
|
|
|
|
|
0.19 |
|
|
|
|
|
|
|
0.04 |
|
|
|
|
|
|
Goodwill Impairment (2) |
|
|
— |
|
|
|
|
|
|
|
0.09 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Acquisition costs (3) |
|
|
0.06 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Restructuring costs (4) |
|
|
0.12 |
|
|
|
|
|
|
|
(0.01 |
) |
|
|
|
|
|
|
0.02 |
|
|
|
|
|
|
Contingent consideration adjustment |
|
|
(0.13 |
) |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Income tax impact of adjustments |
|
|
(0.11 |
) |
|
|
|
|
|
|
(0.14 |
) |
|
|
|
|
|
|
(0.08 |
) |
|
|
|
|
|
Adjusted diluted earnings per common share |
$ |
0.93 |
|
|
|
|
|
$ |
2.00 |
|
|
|
|
|
$ |
2.22 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Adjusted Income Tax Expense and Cash Tax Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Income tax expense |
$ |
8,795 |
|
|
|
|
|
$ |
18,259 |
|
|
|
|
|
$ |
15,793 |
|
|
|
|
||||
|
Effect of non-cash tax items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Stock option expirations |
|
|
(454 |
) |
|
|
|
|
|
|
(34 |
) |
|
|
|
|
|
|
(231 |
) |
|
|
|
|
|
Valuation allowance on deferred tax assets |
|
|
(1,731 |
) |
|
|
|
|
|
|
1,217 |
|
|
|
|
|
|
|
5,371 |
|
|
|
|
|
|
Net uncertain tax position adjustments |
|
|
(72 |
) |
|
|
|
|
|
|
(54 |
) |
|
|
|
|
|
|
(36 |
) |
|
|
|
|
|
Other adjustments |
|
|
(57 |
) |
|
|
|
|
|
|
273 |
|
|
|
|
|
|
|
(129 |
) |
|
|
|
|
|
Adjusted income tax expense |
$ |
6,481 |
|
|
|
|
|
$ |
19,661 |
|
|
|
|
|
$ |
20,768 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Effective tax rate |
|
|
29.5 |
% |
|
|
|
|
|
|
25.1 |
% |
|
|
|
|
|
|
19.0 |
% |
|
|
|
|
|
Total effect of non-cash tax items on effective tax rate |
|
|
(7.8 |
)% |
|
|
|
|
|
|
2.0 |
% |
|
|
|
|
|
|
6.0 |
% |
|
|
|
|
|
Cash tax rate |
|
|
21.7 |
% |
|
|
|
|
|
|
27.1 |
% |
|
|
|
|
|
|
25.0 |
% |
|
|
|
|
|
(1) |
|
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 systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized. |
|
(2) |
|
The effect of the goodwill impairment charge recognized during the year ended |
|
(3) |
|
Acquisition costs primarily represent one-time costs included in net income related to the Company’s business acquisitions, which include fees paid to the Company’s broker and other professional services firms. |
|
(4) |
|
The Company initiated the |
Segment Results
On
Effective
RGP is the Company’s only operating segment that meets the quantitative threshold of a reportable segment. Sitrick does not individually meet the quantitative threshold to qualify as a reportable segment. Therefore, Sitrick is the only entity disclosed in Other Segments during fiscal 2024 and 2023. On
The following table discloses the Company’s revenue and Adjusted EBITDA by segment for each of the periods presented (in thousands):
|
|
Three Months Ended |
|
For the Years Ended |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2022 |
|||||||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
||||||||||||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
RGP |
$ |
145,521 |
|
|
$ |
181,662 |
|
|
$ |
622,895 |
|
|
$ |
764,511 |
|
|
$ |
764,350 |
|
|||||
|
Other Segments (1) |
|
|
2,677 |
|
|
|
|
2,787 |
|
|
|
|
9,906 |
|
|
|
|
11,132 |
|
|
|
|
40,668 |
|
|
Total revenue |
$ |
148,198 |
|
|
$ |
184,449 |
|
|
$ |
632,801 |
|
|
$ |
775,643 |
|
|
$ |
805,018 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
RGP |
$ |
20,980 |
|
|
$ |
31,045 |
|
|
$ |
84,677 |
|
|
$ |
132,377 |
|
|
$ |
134,187 |
|
|||||
|
Other Segments (1) |
|
|
32 |
|
|
|
|
419 |
|
|
|
|
(676 |
) |
|
|
|
1,179 |
|
|
|
|
3,527 |
|
|
Reconciling items (2) |
|
|
(7,922 |
) |
|
|
|
(8,227 |
) |
|
|
|
(32,518 |
) |
|
|
|
(33,362 |
) |
|
|
|
(34,583 |
) |
|
Total Adjusted EBITDA (3) |
$ |
13,090 |
|
|
$ |
23,237 |
|
|
$ |
51,483 |
|
|
$ |
100,194 |
|
|
$ |
103,131 |
||||||
|
(1) |
Amounts reported in Other Segments for the three months and year ended |
|
|
(2) |
Reconciling items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments. |
|
|
(3) |
A reconciliation of the Company’s net income to Adjusted EBITDA on a consolidated basis is presented in tables on page 9 and 10. |
|
|
|||||||||
|
|
|
|
|
||||||
|
SELECTED BALANCE SHEET INFORMATION: |
2024 |
|
2023 |
||||||
|
|
(Unaudited) |
|
|
|
|||||
|
Cash and cash equivalents |
$ |
108,892 |
|
|
$ |
116,784 |
|
||
|
Trade accounts receivable, net of allowance for credit losses |
$ |
108,515 |
|
|
$ |
137,356 |
|
||
|
Total assets |
$ |
510,914 |
|
|
$ |
531,999 |
|
||
|
Current liabilities |
$ |
72,433 |
|
|
$ |
97,084 |
|
||
|
Long-term debt |
$ |
— |
|
|
$ |
— |
|
||
|
Total liabilities |
$ |
92,151 |
|
|
$ |
117,479 |
|
||
|
Total stockholders’ equity |
$ |
418,763 |
|
|
$ |
414,520 |
|
||
|
|
|
|
|
|
|
||||
|
|
For the Years Ended |
||||||||
|
|
|
|
|
||||||
|
SELECTED CASH FLOW INFORMATION: |
2024 |
|
2023 |
||||||
|
|
(Unaudited) |
|
|
||||||
|
Cash flow — operating activities |
$ |
21,919 |
|
|
$ |
81,636 |
|
||
|
Cash flow — investing activities |
$ |
(8,554 |
) |
|
$ |
3,943 |
|
||
|
Cash flow — financing activities |
$ |
(20,709 |
) |
|
$ |
(71,914 |
) |
||
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||||
|
|
|
|
|
||||||
|
SELECTED OTHER INFORMATION: |
2024 |
|
2023 |
||||||
|
|
(Unaudited) |
|
(Unaudited) |
||||||
|
Consultant headcount, end of period |
|
|
2,585 |
|
|
|
|
3,145 |
|
|
Average bill rate (1) |
$ |
120 |
|
|
$ |
129 |
|
||
|
Average pay rate (1) |
$ |
57 |
|
|
$ |
62 |
|
||
|
Common shares outstanding, end of period |
|
|
33,556 |
|
|
|
|
33,475 |
|
|
(1) |
|
Rates represent the weighted average bill rates and pay rates across the countries in which we operate. Such weighted average rates are impacted by the mix of our business across the geographies as well as fluctuations in currency rates. Constant currency average bill and pay rates using the same exchange rates in the fourth quarter of fiscal 2023 were |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240718538199/en/
Analyst Contact:
Chief Financial Officer
(US+) 1-714-430-6500
jennifer.ryu@rgp.com
Media Contact:
Financial Profiles
(US+) 1-310-622-8244
pburek@finprofiles.com
Source:
