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Resources Connection, Inc. Reports First Quarter Results for Fiscal 2013

Resources Connection, Inc. Reports First Quarter Results for Fiscal 2013

First quarter net income of $4.8 million improves from $2.6 million in prior year first quarter adjusted EBITDA* improves to $13.1 million from $11.5 million in prior year first quarter

Company reports first quarter earnings per share of $0.12, up $0.06 from prior year first quarter while revenue of $136.9 million compares to revenue of $138.0 million a year ago

Gross margin improves to 39.0% in first quarter compared to 37.8% in prior year first quarter

Company buys back 765,000 shares and returns over $11 million in capital to shareholders during first quarter

*Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, stock based compensation and contingent consideration adjustments

Resources Connection, Inc. the multinational professional services firm that provides to clients - through its operating subsidiary, Resources Global Professionals ("Resources") - accomplished professionals in accounting, finance, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, healthcare solutions, and legal and regulatory services, today announced financial results for its fiscal first quarter ended August 25, 2012.

Total revenue for the first quarter of fiscal 2013 was $136.9 million, down 0.8% (up 1.2% on a constant dollar basis) compared to the prior year's first quarter revenue and down 5.9% (down 5.3% on a constant dollar basis) on a sequential quarter basis. Revenues in the U.S. were up 4.5% quarter-over-quarter and down 3.6% sequentially due primarily to summer holidays. International revenues decreased 15.1% quarter-over-quarter and 13.0% sequentially (the decrease was partially influenced by the stronger dollar compared to European currencies and would have declined 7.9% quarter-over-quarter and 10.6% sequentially on a constant dollar basis).

The Company's net income for the first quarter ended August 25, 2012, was $4.8 million, or $0.12 per diluted share. This compares with a net income for the first quarter ended August 27, 2011 of $2.6 million, or $0.06 per diluted share.

"Although the global economic environment is challenging, we continue to improve our operating metrics," said Tony Cherbak, chief operating officer of Resources. "During the quarter, we returned over $11 million in capital to our shareholders in the form of stock buy-backs and dividend payments, including increasing our dividend payment by 20% to $0.06 per share this quarter."

Gross margin was 39.0% in the first quarter of fiscal 2013, up 120 basis points from the first quarter of fiscal 2012 and seasonally down 120 basis points from the fourth quarter of fiscal 2012. Selling, general and administrative expenses for the first quarter of fiscal 2013 were $42.1 million, a decrease of $500,000 from the comparable quarter a year ago and the same as the fourth quarter of fiscal 2012.

Cash flow from operations and adjusted EBITDA were $3.7 million and $13.1 million (9.6% of revenue), respectively, for the first quarter of fiscal 2013 compared to $1.6 million and $11.5 million (8.3% of revenue), respectively, for the first quarter of fiscal 2012.

"Our clients continue to invest in business initiatives, but remain cautious about global economic conditions," said Don Murray, chief executive officer. "We remain focused on our growth initiatives and continuing to improve our operating metrics."

During the first quarter of fiscal 2013, the Company purchased 765,000 shares of common stock for $8.9 million. On September 21, 2012, the Company paid its quarterly dividend of $2.5 million to shareholders, representing a dividend of $0.06 per share.

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