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Resources Connection, Inc. Reports First Quarter Results for Fiscal 2012

Resources Connection, Inc. Reports First Quarter Results for Fiscal 2012

Revenues increase 11.6% quarter-over-quarter

First quarter GAAP earnings of $2.6 million or $0.06 per diluted share

Company buys back 1,461,000 shares, increases dividend and returns over $18 million in capital to shareholders during first quarter

First quarter adjusted EBITDA improves quarter-over-quarter to $11.5 million

Resources Connection, Inc. (NASDAQ: RECN), a multinational professional services firm that provides to clients - through its operating subsidiary, Resources Global Professionals ("Resources") - accomplished professionals in accounting, finance, information management, corporate advisory, strategic communications and restructuring, human capital, supply chain management, risk management and internal audit and legal services, today announced financial results for its fiscal first quarter ended August 27, 2011.

Total revenue for the first quarter of fiscal 2012 was $138.0 million, up 11.6% from last year's first quarter revenue of $123.7 million and down 5.3% on a sequential quarter basis as anticipated due to the summer holiday season. Revenues in the U.S. were up 5.0% quarter-over-quarter and down 3.5% sequentially, while international revenues increased 34.0% quarter-over-quarter and were down 9.6% sequentially (up 19.9% quarter-over-quarter and down 10.3% sequentially on a constant dollar basis).

Gross margin was 37.8% in the first quarter of fiscal 2012, down 30 basis points from the fourth quarter of fiscal 2011. Selling, general and administrative expenses for the first quarter of fiscal 2012 were $42.6 million, down $1.1 million from $43.7 million in the fourth quarter of fiscal 2011.

Cash flow from operations and adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stock based compensation and contingent consideration adjustments) were $1.6 million and $11.5 million (8.3% of revenue), respectively, for the first quarter of fiscal 2012.

"We are pleased to see our revenues grow more than $14.0 million over the comparable period a year ago, giving us six consecutive periods of quarter-over-quarter revenue growth," said Tony Cherbak, chief operating officer. "All of our geographies contributed to our first quarter growth."

The Company's pre-tax income for the first quarter ended August 27, 2011 was $6.9 million. The Company's net income for the first quarter was $2.6 million, or $0.06 per diluted share. This compares with net income for the first quarter ended August 28, 2010 of $1.2 million, or $0.03 per diluted share (the $0.03 per diluted share included $0.01 per diluted share of non-cash charges related to an increase in the estimated fair value of contingent consideration).

During the first quarter of fiscal 2012, the Company purchased 1,461,000 shares of common stock for $16.6 million. On September 22, 2011, the Company paid $2.2 million to shareholders, representing the increased quarterly dividend of $0.05 per share.

"Our talented employees continue to help our clients execute strategies to improve efficiencies," said Don Murray, chief executive officer of Resources. "I am pleased to report we returned over $18 million in capital to our shareholders this quarter. We remain focused on improving our operating margins while positioning ourselves for future growth."

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