Resources Connection, Inc. (RECN)

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Resources Connection, Inc. (RECN)

Q4 2008 Earnings Call

July 16, 2008 5:00 pm ET


Thomas Christopoul – CEO Resources

Don Murray – CEO

Nate Franke – CFO

Anthony Cherbak – Executive VP Operations

Kate Duchene - CLO


Kevin McVeigh – Credit Suisse

James Janesky - Stifel Nicolaus

Brandt Sakakeeny - Deutsche Bank

Michel Morin – Merrill Lynch

Andrew Steinerman – JP Morgan

Gary Bisbee - Lehman Brothers

Mark Marcon – Robert W. Baird & Co.

Scott Schneeberger - Oppenheimer & Co.



Good day and welcome everyone to the Resources Global Professionals fourth quarter fiscal 2008 earnings results conference call. This call is being recorded. At this time for opening remarks I would like to turn the call over to Kate Duchene, Chief Legal Officer; please go ahead.

Kate Duchene

Good afternoon everyone and thank you for participating with us today. Joining me are Don Murray our Executive Chairman, Thomas Christopoul, our Chief Executive Officer, Anthony Cherbak, our Executive Vice President of Operations and our Chief Financial Officer, Nate Franke. Thomas will speak first about the quarter's results, followed by Nate who will discuss the financial details, and then Anthony will conclude the prepared remarks for our call.

During this call we will be providing you with comments on our results for the fourth quarter of fiscal 2008. By now you should have a copy of today's press release. If you need a copy and are unable to access the copy via our website, please call Patricia Marquez at 714-430-6314, and she will fax a copy to you.

Before introducing Thomas, I would like to read an important announcement about certain statements that we may make during this call; specifically, we may make forward-looking statements. In other words, statements regarding future events or future financial performance of the company.

We wish to caution you that such statements are just predictions and actual events or results may differ materially. We refer you to our 10-K report for the year ended May 31, 2007 for a discussion of some of the risks, uncertainties and other factors, such as seasonal and economic conditions that may cause our business, results of operations, and financial condition to differ materially from results of operations and financial conditions, expressed or implied, by forward-looking statements made during this call.

I'll now turn the call over to Thomas Christopoul, our Chief Executive Officer, to give an overview of the fourth quarter.

Thomas Christopoul

Thanks Kate, good afternoon everyone and welcome to the Resources Global fourth quarter conference call. We’ll discuss our financial and operational performance of the business here today but before Anthony, Nate and I do that, I’d like to take a moment to acknowledge Don Murray, our Executive Chairman. Our CEO transition has really just started but it’s important to note that Don’s vision and his guidance of the company has really provided me the opportunity to assume leadership of an enterprise that I’m very happy, has tremendous growth prospects and is in excellent condition.

CEO transitions can often signal underlying concern or challenge in a business. In this case nothing could be further from the truth. Don has and will continue to provide guidance and counsel to me and to resources and as you will hear during this call, that’s nothing but good news. I begun to work closely with the executive management team and collectively we are executing our strategy over the long-term. Recognizing the value this leadership team brings to the company we are in the process of modifying or entering into employment agreements with this group which we will disclose today.

So turning to our results, total revenues for the fourth quarter of fiscal 2008 were the highest quarterly revenues in the company’s history at $236.7 million, that’s up 18% over the fourth quarter a year ago and 17% on a sequential basis. As we have previously noted our fourth quarter was comprised of 14 versus the typical 13 weeks. Average weekly revenue for the quarter totaled $16.9 million compared to $15.4 million in the prior year, which is an increase of 10%. Over the course of the quarter 26 offices hit new weekly revenue highs that were split evenly between domestic and international with 13 each.

We finished fiscal 2008 with total revenue of $840 million which is an increase of 14% over fiscal 2007. If we adjust for the extra week of revenue in this fiscal year of 2008 just finished, our apples to apples growth rate would approximate 12%. Nate will provide additional details of recent revenue trends in his review of our financial information later on in this call.

As fiscal 2008 comes to a close and we head into 2009 I’d like to speak to the strength of our business from my perspective as the new CEO of Resources. We are often categorized by analysts and investors as a staffing firm, but we are far from it. Resources helps its clients by providing influential capital on demand to accomplish a variety of client-driven internal initiatives. These initiatives can range in complexity from reconciling unbalanced inter-company accounts to applying fair value accounting to a portfolio of complex derivative instruments.

A recent client satisfaction survey for work that we performed for a global Fortune 10 energy company we were rated 18% higher then our closest competitor on our ability to transfer knowledge and project data to the client. What this says is we are obviously able to help clients get things done while we ensure their ability to carry on after our work is completed.

We are really proud of the client relationships we have built over the first 12 years that we’ve been in business. We’ve served 84% of the Fortune 100, almost 70% of the Fortune 500 and almost 60% of the Fortune 1000. Its great news that we do business with 570 of Fortune 1000 but its even better news that there are several hundred other companies in that category that we have yet to work with. We would not be able to claim such as impressive list of clients if it were not for our talented employees and associates.

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