Professional service provider Resources Connection, Inc. (RECN), Wednesday revealed its financial results for the fourth quarter, reporting a swing to loss, hurt by a 44.2% decline in revenues and lower gross margin. Resources Connection shares trading on the Nasdaq, fell 7.70% in after-hours trade.
Net loss for the fourth quarter was $6.284 million or $0.14 per share, compared to net income of $15.902 million or $0.35 per share in the same quarter a year ago.
On average, eight analysts polled by Thomson Reuters expected fourth-quarter earnings of $0.04 per share. Analyst's estimates typically exclude one-time special charges.
For the fourth quarter, Resources Connection recorded tax charges aggregating $3.5 million, which included a valuation allowance of $2.4 million against deferred tax assets in certain foreign locations and $1.1 million stemming from forgiveness of inter-company debt related to the capitalization of its French subsidiary. This impacted fourth-quarter loss per share by $0.05 and $0.08, respectively.
Operating loss for the fourth quarter was $3.095 million, compared to an operating income of $28.492 million in the fourth quarter last year.
Revenues for the fourth quarter plummeted 44.2% to $132.049 million from $236.724 million in the same quarter last year, below the Street estimates of $143.62 million, hurt by a drop in both U.S and international revenues.
Quarterly revenues from the U.S were down 42.9% from a year ago, while international revenues were down 47.4%, of which 37.5% of the decline was on a constant dollar basis.
Fourth quarter revenues, however, included revenues from an extra week and associated expenses , when compared to corresponding quarter a year ago.
Gross margin for the quarter was 38.2%, down from 39.4% in the comparable period of fiscal 2008.
Excluding stock based compensation expense, selling, general and administrative expenses for the fourth quarter declined to $50.984 million from $61.792 million in the same quarter last year.
Adjusted EBITDA for the fourth quarter also plunged to $3.449 million from $36.449 million in the corresponding quarter a year ago.
For the full year, net income declined to $17.764 million or $0.39 per share from $49.185 million or $1.03 per share from last year, below the analysts' earnings forecast of $0.56 per share.
Revenues for the full year declined to $685.576 million from $840.285 million a year ago, below the Street estimate of 697.21 million.
RECN closed Wednesday's trading at $17.53, up $0.49 or 2.88% on the Nasdaq. In the after hours, the Stock fell $1.35 or 7.70% to trade at $16.18.
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