Back to GetFilings.com



Table of Contents
 

 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 10-Q
 
(MARK ONE)
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended November 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                                  to                                 
 
 

 
 
Commission File Number: 0-32113
 
 
RESOURCES CONNECTION, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
DELAWARE
  
33-0832424
(State or Other Jurisdiction of Incorporation or Organization)
  
(I.R.S. Employer Identification No.)
 
695 TOWN CENTER DRIVE, SUITE 600, COSTA MESA, CALIFORNIA 92626
(Address of Principal Executive Offices and Zip Code)
 
(714) 430-6400
(Registrant’s Telephone Number, Including Area Code)
 

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x     No  ¨
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes  x     No  ¨
 
As of January 3, 2003, 21,930,337 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.
 


Table of Contents
 
RESOURCES CONNECTION, INC.
 
INDEX
 
Part I—Financial Information
 
Item 1.
     
3
       
3
       
4
       
5
       
6
       
7
Item 2.
     
9
Item 3.
     
20
Item 4.
     
20
Part II—Other Information
 
Item 1.
     
21
Item 2.
     
21
Item 3.
     
21
Item 4.
     
21
Item 5.
     
21
Item 6.
     
21
  
22
 

2


Table of Contents
 
PART I.    FINANCIAL INFORMATION
 
ITEM 1.     CONSOLIDATED FINANCIAL STATEMENTS
 
RESOURCES CONNECTION, INC.
 
CONSOLIDATED BALANCE SHEETS
    
November 30, 2002

    
May 31, 2002

 
    
(unaudited)
        
ASSETS
                 
Current assets:
                 
Cash and cash equivalents
  
$
44,129,000
 
  
$
31,745,000
 
Trade accounts receivable, net of allowance for doubtful accounts of $2,378,000 and $2,157,000 as of November 30, 2002 and May 31, 2002, respectively
  
 
23,764,000
 
  
 
19,961,000
 
Prepaid expenses and other current assets
  
 
1,185,000
 
  
 
1,607,000
 
Prepaid income taxes
  
 
788,000
 
  
 
3,505,000
 
Deferred income taxes
  
 
2,560,000
 
  
 
2,560,000
 
    


  


Total current assets
  
 
72,426,000
 
  
 
59,378,000
 
Investments in marketable securities
  
 
12,000,000
 
  
 
24,000,000
 
Intangible assets, net
  
 
48,945,000
 
  
 
41,372,000
 
Property and equipment, net
  
 
4,672,000
 
  
 
4,885,000
 
Other assets
  
 
1,912,000
 
  
 
1,842,000
 
    


  


Total assets
  
$
139,955,000
 
  
$
131,477,000
 
    


  


LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
Current liabilities:
                 
Accounts payable and accrued expenses
  
$
2,768,000
 
  
$
2,401,000
 
Accrued salaries and related obligations
  
 
12,110,000
 
  
 
13,152,000
 
Other liabilities
  
 
666,000
 
  
 
690,000
 
    


  


Total current liabilities
  
 
15,544,000
 
  
 
16,243,000
 
Deferred income taxes
  
 
1,763,000
 
  
 
1,763,000
 
    


  


Total liabilities
  
 
17,307,000
 
  
 
18,006,000
 
    


  


Commitments and contingencies
                 
Stockholders’ equity:
                 
Preferred stock, $0.01 par value, 5,000,000 shares authorized; zero shares issued and outstanding
                 
Common stock, $0.01 par value, 35,000,000 shares authorized; 21,956,000 and 21,661,000 shares issued and outstanding as of November 30, 2002 and May 31, 2002, respectively
  
 
220,000
 
  
 
216,000
 
Additional paid-in capital
  
 
82,995,000
 
  
 
79,991,000
 
Deferred stock compensation
  
 
(635,000
)
  
 
(909,000
)
Accumulated other comprehensive gain (loss)
  
 
3,000
 
  
 
(51,000
)
Notes receivable from stockholders
  
 
(55,000
)
  
 
(109,000
)
Retained earnings
  
 
40,121,000
 
  
 
34,334,000
 
Treasury stock at cost, 122,000 shares at November 30, 2002 and 101,000 shares at May 31, 2002
  
 
(1,000
)
  
 
(1,000
)
    


  


Total stockholders’ equity
  
 
122,648,000
 
  
 
113,471,000
 
    


  


Total liabilities and stockholders’ equity
  
$
139,955,000
 
  
$
131,477,000
 
    


  


 
The accompanying notes are an integral part of these financial statements.

3


Table of Contents
RESOURCES CONNECTION, INC.
 
CONSOLIDATED STATEMENTS OF INCOME
 
    
Three Months Ended

    
Six Months Ended

 
    
November 30, 2002

    
November 30, 2001

    
November 30, 2002

    
November 30, 2001

 
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
 
Revenue
  
$
50,209,000
 
  
$
46,099,000
 
  
$
93,737,000
 
  
$
95,439,000
 
Direct cost of services, primarily payroll and related taxes for professional services employees
  
 
29,909,000
 
  
 
27,716,000
 
  
 
56,210,000
 
  
 
56,973,000
 
    


  


  


  


Gross profit
  
 
20,300,000
 
  
 
18,383,000
 
  
 
37,527,000
 
  
 
38,466,000
 
Selling, general and administrative expenses
  
 
14,526,000
 
  
 
12,348,000
 
  
 
27,544,000
 
  
 
25,223,000
 
Amortization of intangible assets
  
 
126,000
 
  
 
31,000
 
  
 
157,000
 
  
 
62,000
 
Depreciation expense
  
 
312,000
 
  
 
287,000
 
  
 
627,000
 
  
 
544,000
 
    


  


  


  


Income from operations
  
 
5,336,000
 
  
 
5,717,000
 
  
 
9,199,000
 
  
 
12,637,000
 
Interest income
  
 
(270,000
)
  
 
(309,000
)
  
 
(608,000
)
  
 
(591,000
)
    


  


  


  


Income before provision for income taxes
  
 
5,606,000
 
  
 
6,026,000
 
  
 
9,807,000
 
  
 
13,228,000
 
Provision for income taxes
  
 
2,298,000
 
  
 
2,410,000
 
  
 
4,020,000
 
  
 
5,291,000
 
    


  


  


  


Net income
  
$
3,308,000
 
  
$
3,616,000
 
  
$
5,787,000
 
  
$
7,937,000
 
    


  


  


  


Net income per common share:
                                   
Basic
  
$
0.15
 
  
$
0.17
 
  
$
0.27
 
  
$
0.38
 
    


  


  


  


Diluted
  
$
0.15
 
  
$
0.16
 
  
$
0.25
 
  
$
0.35
 
    


  


  


  


Weighted average common shares outstanding:
                                   
Basic
  
 
21,743,000
 
  
 
21,200,000
 
  
 
21,679,000
 
  
 
21,028,000
 
    


  


  


  


Diluted
  
 
22,651,000
 
  
 
22,702,000
 
  
 
22,728,000
 
  
 
22,725,000
 
    


  


  


  


 
The accompanying notes are an integral part of these financial statements.

4


Table of Contents
RESOURCES CONNECTION, INC.
 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 
    
Six Months Ended

 
    
November 30, 2002

    
November 30, 2001

 
    
(unaudited)
    
(unaudited)
 
COMMON STOCK—SHARES:
                 
Balance at beginning of period
  
 
21,661,000
 
  
 
20,735,000
 
Public offering of common stock
           
 
230,000
 
Exercise of stock options
  
 
135,000
 
  
 
293,000
 
Issuance of common stock for the acquisition of The Procurement Centre
  
 
116,000
 
        
Issuance of common stock under Employee Stock Purchase Plan
  
 
44,000
 
  
 
43,000
 
    


  


Balance at end of period
  
 
21,956,000
 
  
 
21,301,000
 
    


  


COMMON STOCK—PAR VALUE:
                 
Balance at beginning of period
  
$
216,000
 
  
$
207,000
 
Public offering of common stock
           
 
2,000
 
Exercise of stock options
  
 
2,000
 
  
 
3,000
 
Issuance of common stock for the acquisition of The Procurement Centre
  
 
1,000
 
        
Issuance of common stock under Employee Stock Purchase Plan
  
 
1,000
 
  
 
1,000
 
    


  


Balance at end of period
  
$
220,000
 
  
$
213,000
 
    


  


ADDITIONAL PAID-IN CAPITAL:
                 
Balance at beginning of period
  
$
79,991,000
 
  
$
66,507,000
 
Public offering of common stock
           
 
4,552,000
 
Cost of stock offering
           
 
(793,000
)
Exercise of stock options
  
 
633,000
 
  
 
1,489,000
 
Issuance of common stock for the acquisition of The Procurement Centre
  
 
1,503,000