Upcoming AWS Coverage on ManpowerGroup Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 13, 2017 / Active Wall St. announces its post-earnings coverage on Resources Connection, Inc. (NASDAQ: RECN). The Company, operating as Resources Global Professionals (RGP), reported its third quarter fiscal 2017 financial results on April 05, 2017. The consulting Company missed top- and bottom-line expectations. Register with us now for your free membership at:

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One of Resources Connection's competitors within the Staffing & Outsourcing Services space, ManpowerGroup Inc. (NYSE: MAN), announced on March 29, 2017, that it plans to release its Q1 earnings results before the market opens on Friday, April 21, 2017. Management will discuss the results the same day in a live webcast at 8:30 a.m. EDT, which can be accessed on the company's website. AWS will be initiating a research report on ManpowerGroup in the coming days.

Today, AWS is promoting its earnings coverage on RECN; touching on MAN. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended February 25, 2017, Resources Global's revenue decreased by 2.0%, or 1.2% constant currency, to $143.8 million compared to $146.8 million in Q3 FY16. On a sequential basis, revenue had decreased by 2.5%, or 1.8% in constant currency, compared to $147.6 million. The Company's revenue numbers fell short of analysts' consensus of $145.9 million. Resources Global's revenue for the nine months ended February 25, 2017, was $434.8 million compared to $446.0 million for the nine months ended February 27, 2016.

For Q3 FY17, Resources Global's revenue in the US decreased by 3.4% y-o-y and 0.6% sequentially, primarily impacted by declines in the financial services and energy sectors. The Company's International revenue improved by 4.5% y-o-y, or 8.8% in constant currency, reflecting RGP's improving performance overseas, while decreasing 10.0% sequentially (6.7% constant currency), primarily due to the expected impact of the holiday season.

During Q3 FY17, Resources Global 's gross margin was 36.3% compared to 37.4% in the prior year's third quarter, as a result of an unfavorable change in the bill rate/pay rate ratio and an increase in costs related to the Company's self-insured medical program. Sequentially, gross margin decreased 200 basis points from 38.3%, primarily due to an increase in employer payroll taxes after the reset for the new calendar year and the aforementioned increase in medical coverage costs.

Resources Global's selling, general and administrative expenses (?S, G & A?) for Q3 FY17 were $45.4 million, or 31.5% of revenue, compared to $43.3 million, or 29.5% of revenue, in Q3 FY16 and $46.1 million, or 31.2% of revenue, in Q2 FY17. The y-o-y increase was attributed to compensation and related benefit costs attributable to investments made in the Company's client delivery Managing Consultant program to support the solutions initiatives underway.

Resources Global's net income declined in Q3 FY17 to $2.9 million, or $0.09 per diluted share, compared to $6.0 million, or $0.16 per diluted share, in Q3 FY16. The Company's earnings numbers fell short of market expectations of $0.14 per share.

Resources Global's net income for the nine months was $14.2 million, or $0.41 per diluted share, including $0.03 per diluted share related to severance charges, compared to net income for the nine months ended February 27, 2016, of $21.8 million, or $0.58 per diluted share.

Cash Flow & Balance Sheet

Resources Global reported that cash provided by operations and adjusted EBITDA were $6.9 million and $32.9 million, or 7.6% of revenue, respectively, for the nine months ended February 25, 2017, compared to cash provided by operations and Adjusted EBITDA of $7.0 million and $45.8 million, or 10.3% of revenue, respectively, for the nine months ended February 27, 2016.

In Q3 FY17, the Company repurchased 400,100 shares of its common stock for $6.9 million under its existing share repurchase program and paid a quarterly dividend to shareholders totaling $3.3 million or $0.11 per diluted share. Currently, the Company has a total of $125.1 million available for share purchases under its existing share repurchase program. As of February 25, 2017, the Company's cash, cash equivalents and short-term investments were $44.6 million compared to $116.0 million at fiscal year-end May 28, 2016.

Stock Performance

At the closing bell, on Wednesday, April 12, 2017, Resources Connection's share price finished the trading session at $13.43, declining 1.65%. A total volume of 91.90 thousand shares exchanged hands. The stock has advanced 3.50% in the last six months. The stock is trading at a PE ratio of 21.04 and has a dividend yield of 3.28%. At Wednesday's closing price, the stock's net capitalization stands at $400.47 million.

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SOURCE: Active Wall Street