Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 28, 2020 | Jan. 04, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-32113 | |
Entity Registrant Name | RESOURCES CONNECTION, INC. | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 33-0832424 | |
Entity Address Address Line 1 | 17101 Armstrong Avenue | |
Entity Address City Or Town | Irvine | |
Entity Address State Or Province | CA | |
Entity Address Postal Zip Code | 92614 | |
City Area Code | 714 | |
Local Phone Number | 430-6400 | |
Security 12b Title | Common stock, par value $0.01 per share | |
Trading Symbol | RGP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,508,305 | |
Current Fiscal Year End Date | --05-29 | |
Amendment Flag | false | |
Entity Central Index Key | 0001084765 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 28, 2020 | May 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 97,195 | $ 95,624 |
Trade accounts receivable, net of allowance for doubtful accounts of $2,361 and $3,067 as of November 28, 2020 and May 30, 2020, respectively | 111,686 | 124,986 |
Prepaid expenses and other current assets | 7,084 | 6,222 |
Income taxes receivable | 2,593 | 4,167 |
Total current assets | 218,558 | 230,999 |
Goodwill | 216,246 | 214,067 |
Intangible assets, net | 21,062 | 20,077 |
Property and equipment, net | 22,270 | 23,644 |
Operating right-of-use assets | 30,009 | 34,287 |
Deferred income taxes | 1,908 | 1,597 |
Other assets | 1,913 | 4,510 |
Total assets | 511,966 | 529,181 |
Current liabilities: | ||
Accounts payable and accrued expenses | 20,340 | 15,799 |
Accrued salaries and related obligations | 46,680 | 52,407 |
Operating lease liabilities, current | 10,970 | 11,223 |
Other liabilities | 13,646 | 15,472 |
Total current liabilities | 91,636 | 94,901 |
Long-term debt | 68,000 | 88,000 |
Operating lease liabilities, noncurrent | 26,442 | 30,672 |
Deferred income taxes | 6,123 | 6,215 |
Other long-term liabilities | 12,818 | 5,732 |
Total liabilities | 205,019 | 225,520 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 5,000 shares authorized; zero shares issued and outstanding | ||
Common stock, $0.01 par value, 70,000 shares authorized; 64,199 and 63,910 shares issued, and 32,433 and 32,144 shares outstanding as of November 28, 2020 and May 30, 2020, respectively | 642 | 639 |
Additional paid-in capital | 483,087 | 477,438 |
Accumulated other comprehensive loss | (8,606) | (13,862) |
Retained earnings | 352,716 | 360,534 |
Treasury stock at cost, 31,766 shares as of both November 28, 2020 and May 30, 2020 | (520,892) | (521,088) |
Total stockholders' equity | 306,947 | 303,661 |
Total liabilities and stockholders' equity | $ 511,966 | $ 529,181 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Nov. 28, 2020 | May 30, 2020 |
Consolidated Balance Sheets [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 2,361 | $ 3,067 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, shares issued | 64,199,000 | 63,910,000 |
Common stock, shares outstanding | 32,433,000 | 32,144,000 |
Treasury stock at cost, shares | 31,766,000 | 31,766,000 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Consolidated Statements Of Operations [Abstract] | ||||
Revenue | $ 153,222 | $ 184,507 | $ 300,567 | $ 356,732 |
Direct cost of services, primarily payroll and related taxes for professional services employees | 95,044 | 110,130 | 184,493 | 214,852 |
Gross profit | 58,178 | 74,377 | 116,074 | 141,880 |
Selling, general and administrative expenses | 54,552 | 53,755 | 105,707 | 110,733 |
Amortization of intangible assets | 1,393 | 1,510 | 2,923 | 2,604 |
Depreciation expense | 984 | 1,424 | 1,991 | 2,793 |
Income from operations | 1,249 | 17,688 | 5,453 | 25,750 |
Interest expense, net | 460 | 551 | 955 | 1,033 |
Other income | (475) | (537) | (1,007) | (537) |
Income before provision for income taxes | 1,264 | 17,674 | 5,505 | 25,254 |
Provision for income taxes | 2,256 | 5,337 | 4,213 | 7,978 |
Net (loss) income | $ (992) | $ 12,337 | $ 1,292 | $ 17,276 |
Net (loss) income per common share: | ||||
Basic (per share) | $ (0.03) | $ 0.39 | $ 0.04 | $ 0.54 |
Diluted (per share) | $ (0.03) | $ 0.38 | $ 0.04 | $ 0.54 |
Weighted average common shares outstanding: | ||||
Basic (shares) | 32,356 | 31,984 | 32,270 | 31,852 |
Diluted (shares) | 32,356 | 32,369 | 32,317 | 32,287 |
Cash dividends declared per common share | $ 0.14 | $ 0.14 | $ 0.28 | $ 0.28 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
COMPREHENSIVE (LOSS) INCOME: | ||||
Net (loss) income | $ (992) | $ 12,337 | $ 1,292 | $ 17,276 |
Foreign currency translation adjustment, net of tax | 940 | 48 | 5,256 | (638) |
Total comprehensive (loss) income | $ (52) | $ 12,385 | $ 6,548 | $ 16,638 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total |
Balances at May. 25, 2019 | $ 631 | $ 460,226 | $ (516,103) | $ (12,588) | $ 350,230 | $ 282,396 |
Balances (in shares) at May. 25, 2019 | 63,054 | 31,466 | ||||
Exercise of stock options | $ 2 | 3,465 | 3,467 | |||
Exercise of stock options (in shares) | 257 | |||||
Stock-based compensation expense | 2,999 | 2,999 | ||||
Issuance of common stock under Employee Stock Purchase Plan | $ 2 | 2,597 | 2,599 | |||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 215 | |||||
Cancellation of restricted stock (in shares) | (5) | |||||
Cash dividends declared | (8,975) | (8,975) | ||||
Issuance of common stock in connection with the acquisition of Accretive | $ 1 | 1,140 | 1,141 | |||
Issuance of common stock in connection with the acquisition of Accretive (in shares) | 83 | |||||
Currency translation adjustment | (638) | (638) | ||||
Net (loss) income | 17,276 | 17,276 | ||||
Balances at Nov. 23, 2019 | $ 636 | 470,427 | $ (516,103) | (13,226) | 358,531 | 300,265 |
Balances (in shares) at Nov. 23, 2019 | 63,604 | 31,466 | ||||
Balances at Aug. 24, 2019 | $ 634 | 466,481 | $ (516,103) | (13,274) | 350,693 | 288,431 |
Balances (in shares) at Aug. 24, 2019 | 63,436 | 31,466 | ||||
Exercise of stock options | $ 1 | 1,215 | 1,216 | |||
Exercise of stock options (in shares) | 85 | |||||
Stock-based compensation expense | 1,591 | 1,591 | ||||
Cash dividends declared | (4,499) | (4,499) | ||||
Issuance of common stock in connection with the acquisition of Accretive | $ 1 | 1,140 | 1,141 | |||
Issuance of common stock in connection with the acquisition of Accretive (in shares) | 83 | |||||
Currency translation adjustment | 48 | 48 | ||||
Net (loss) income | 12,337 | 12,337 | ||||
Balances at Nov. 23, 2019 | $ 636 | 470,427 | $ (516,103) | (13,226) | 358,531 | 300,265 |
Balances (in shares) at Nov. 23, 2019 | 63,604 | 31,466 | ||||
Balances at May. 30, 2020 | $ 639 | 477,438 | $ (521,088) | (13,862) | 360,534 | $ 303,661 |
Balances (in shares) at May. 30, 2020 | 63,910 | 31,766 | 32,144 | |||
Exercise of stock options | $ 1 | 503 | $ 504 | |||
Exercise of stock options (in shares) | 44 | 44 | ||||
Stock-based compensation expense | 2,824 | $ 2,824 | ||||
Issuance of common stock under Employee Stock Purchase Plan | $ 2 | 2,458 | 2,460 | |||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 245 | |||||
Amortization of restricted stock issued out of treasury stock to board of director members | (136) | $ 196 | (60) | |||
Cash dividends declared | (9,050) | (9,050) | ||||
Currency translation adjustment | 5,256 | 5,256 | ||||
Net (loss) income | 1,292 | 1,292 | ||||
Balances at Nov. 28, 2020 | $ 642 | 483,087 | $ (520,892) | (8,606) | 352,716 | $ 306,947 |
Balances (in shares) at Nov. 28, 2020 | 64,199 | 31,766 | 32,433 | |||
Balances at Aug. 29, 2020 | $ 642 | 481,571 | $ (521,033) | (9,546) | 358,294 | $ 309,928 |
Balances (in shares) at Aug. 29, 2020 | 64,199 | 31,766 | ||||
Stock-based compensation expense | 1,612 | 1,612 | ||||
Amortization of restricted stock issued out of treasury stock to board of director members | (96) | $ 141 | (45) | |||
Cash dividends declared | (4,541) | (4,541) | ||||
Currency translation adjustment | 940 | 940 | ||||
Net (loss) income | (992) | (992) | ||||
Balances at Nov. 28, 2020 | $ 642 | $ 483,087 | $ (520,892) | $ (8,606) | $ 352,716 | $ 306,947 |
Balances (in shares) at Nov. 28, 2020 | 64,199 | 31,766 | 32,433 |
Consolidated Statements Of St_2
Consolidated Statements Of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Consolidated Statements Of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per common share | $ 0.14 | $ 0.14 | $ 0.28 | $ 0.28 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 28, 2020 | Nov. 23, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ 1,292 | $ 17,276 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,914 | 5,397 |
Stock-based compensation expense | 3,105 | 3,158 |
Contingent consideration adjustment | 342 | (262) |
Loss on disposal of assets | 167 | 66 |
Impairment of operating right-of-use assets | 650 | |
Adjustment to allowance for doubtful accounts | (260) | 616 |
Non-cash benefit | (46) | |
Deferred income taxes | (403) | (337) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Trade accounts receivable | 13,547 | (1,383) |
Prepaid expenses and other current assets | (888) | (499) |
Income taxes | 1,919 | 2,070 |
Other assets | 58 | (634) |
Accounts payable and accrued expenses | 3,769 | (1,570) |
Accrued salaries and related obligations | (81) | (7,380) |
Other liabilities | 1,446 | 746 |
Net cash provided by operating activities | 29,577 | 17,218 |
Cash flows from investing activities: | ||
Redemption of short-term investments | 5,981 | |
Proceeds from sale of assets | 168 | 105 |
Acquisition of Veracity, net of cash acquired | (30,293) | |
Acquisition of property and equipment and internal-use software | (1,802) | (1,264) |
Net cash used in investing activities | (1,634) | (25,471) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 522 | 3,467 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 2,460 | 2,599 |
Payment of contingent consideration | (3,020) | |
Proceeds from Revolving Credit Facility | 35,000 | |
Repayments on Revolving Credit Facility | (20,000) | (24,000) |
Cash dividends paid | (9,059) | (8,581) |
Net cash (used in) provided by financing activities | (29,097) | 8,485 |
Effect of exchange rate changes on cash | 2,725 | (244) |
Net increase (decrease) in cash | 1,571 | (12) |
Cash and cash equivalents at beginning of period | 95,624 | 43,045 |
Cash and cash equivalents at end of period | $ 97,195 | $ 43,033 |
Description Of The Company And
Description Of The Company And Its Business | 6 Months Ended |
Nov. 28, 2020 | |
Description Of The Company And Its Business [Abstract] | |
Description Of The Company And Its Business | 1. Description of the Company and its Business Resources Connection, Inc. (“Resources Connection”), a Delaware corporation, was incorporated on November 16, 1998. The Company’s operating entities provide services primarily under the name Resources Global Professionals (the “Company”). Resources Connection is a global consulting firm that enables rapid business outcomes by bringing together the right people to create transformative change. As a human capital partner to its global client base, the Company supports its clients’ needs through both professional staffing and project execution in the areas of transactions, regulations and transformations. The Company’s principal markets of operation are the United States (“U.S.”), Asia, Australia, Canada, Europe and Mexico. The Company’s fiscal year consists of 52 or 53 weeks, ending on the Saturday in May closest to May 31 . The second quarters of fiscal 2021 and 2020 each consisted of 13 weeks. The Company’s fiscal 2021 will consist of 52 weeks. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 6 Months Ended |
Nov. 28, 2020 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Financial Information The accompanying unaudited financial statements of the Company as of and for the three and six months ended November 28, 2020 and November 23, 2019 have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements include all adjustments (consisting only of normal recurring adjustments) management of the Company considers necessary for a fair presentation of its financial position at such dates and the operating results and cash flows for those periods. The fiscal 2020 year-end balance sheet data was derived from audited consolidated financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. The unaudited consolidated results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended May 30, 2020, which are included in the Company’s Annual Report on Form 10-K (“Fiscal Year 2020 Form 10-K”) filed with the SEC on July 27, 2020 (File No. 0-32113). The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the Fiscal Year 2020 Form 10-K. The Company has reviewed its accounting policies and identified those that it believes to be critical to the preparation and understanding of its consolidated financial statements in the list set forth below. See the disclosure under the heading “Critical Accounting Policies” in Item 7 of Part II of the Fiscal Year 2020 Form 10-K for a detailed description of these policies and their potential effects on the Company’s results of operations and financial condition. Allowance for doubtful accounts Income taxes Revenue recognition Stock-based compensation Valuation of long-lived assets Valuation of goodwill Business combinations With the execution of its restructuring plan in Europe, the Company changed its internal management structure and its reporting structure of financial information used to assess performance and allocate resources during the second quarter of fiscal 2021. As a result, the Company revised its segment reporting effective in the second quarter of fiscal 2021. These changes impacted the Company’s reportable segments but did not impact the Company’s consolidated financial statements. See Note 12 – Segment Information for additional information about the segment change . Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. Net (Loss) Income Per Share Information The Company presents both basic and diluted earnings (loss) per common share (“EPS”). Basic EPS is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period, calculated using the treasury stock method. Under the treasury stock method, assumed proceeds include the amount the employee must pay for exercising stock options and the amount of compensation cost for future services the Company has not yet recognized for the Company’s share-based payment awards. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and are excluded from the calculation. For the three months ended November 28, 2020, all common equivalent shares are excluded from the computation of weighted average number of common and common equivalent shares outstanding in the diluted EPS calculation due to the net loss position. The following table summarizes the calculation of net (loss) income per common share for the periods indicated (in thousands, except per share amounts): Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Net (loss) income $ ( 992 ) $ 12,337 $ 1,292 $ 17,276 Basic: Weighted average shares 32,356 31,984 32,270 31,852 Diluted: Weighted average shares 32,356 31,984 32,270 31,852 Potentially dilutive shares - 385 47 435 Total dilutive shares 32,356 32,369 32,317 32,287 Basic $ ( 0.03 ) $ 0.39 $ 0.04 $ 0.54 Dilutive $ ( 0.03 ) $ 0.38 $ 0.04 $ 0.54 Anti-dilutive shares not included above 5,083 4,809 5,185 3,684 Financial Instruments The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels: Level 1 – Quoted prices in active markets for identical assets and liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. Level 3 – Unobservable inputs. Contingent consideration liability is for estimated future contingent consideration payments related to the Company’s acquisitions. Total contingent consideration liabilities were $ 3.0 million and $ 7.9 million as of November 28, 2020 and May 30, 2020, respectively. The fair value measurement of the liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are the Company’s measures of the estimated payouts based on internally generated financial projections and discount rates. The fair value of contingent consideration liability is reassessed on a quarterly basis by the Company using additional information as it becomes available, and any change in the fair value estimates are recorded in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations. See Note 3 – Acquisition . The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and long-term debt are carried at cost, which approximates their fair value because of the short - term maturity of these instruments or because their stated interest rates are indicative of market interest rates. Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Under ASU 2016-13, companies are required to present financial assets, measured at amortized cost basis, at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis, such as trade receivables. The measurement of expected credit loss will be based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company adopted this guidance using the modified retrospective adoption method beginning with its first quarter of fiscal 2021, and applied it to all applicable accounts. The application of this new guidance did not have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. |
Acquisition
Acquisition | 6 Months Ended |
Nov. 28, 2020 | |
Acquisition [Abstract] | |
Acquisition | 3. Acquisition On July 31, 2019, the Company acquired Veracity Consulting Group, LLC (“Veracity”) with a total purchase price of approximately $ 38.6 million. Veracity is a fast-growing, digital transformation firm based in Richmond, Virginia, that delivers innovative solutions to the Fortune 500 and leading healthcare organizations. The purchase agreement requires earn-out payments to be made based on performance after each of the first and second anniversary of the acquisition date. The Company is obligated to pay the former owners of Veracity contingent consideration if certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) requirements are achieved. In determining the fair value of the contingent consideration liability, the Company uses the Monte Carlo simulation modeling which includes the application of an appropriate discount rate (Level 3 fair value) . Each reporting period, the Company estimates changes in the fair value of contingent consideration and records any change in fair value in selling, general and administrative expense in the Company’s Consolidated Statements of Operations. The estimate of fair value of contingent consideration requires very subjective assumptions to be made of various potential EBITDA results and discount rates. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and therefore could materially affect the Company’s future operating results. The fair value of the Veracity contingent consideration decreased $ 0.2 million during the three months ended November 28, 2020 and increased $ 0.3 million during the six months ended November 28, 2020, respectively, due to the remeasurement to fair value each period. In November 2020, the Company paid $ 5.3 million in contingent consideration to the former owners of Veracity relating to the first earn-out period. As of November 28, 2020, the contingent consideration liability related to Veracity for the second and final earn-out period was $ 2.6 million, which is included in Other current liabilities in the Consolidated Balance Sheet. |
Intangible Assets And Goodwill
Intangible Assets And Goodwill | 6 Months Ended |
Nov. 28, 2020 | |
Intangible Assets And Goodwill [Abstract] | |
Intangible Assets And Goodwill | 4. Intangible Assets and Goodwill The following table sets forth the Company’s intangible assets, including acquired intangible assets and internal-use software (amounts in thousands): As of November 28, 2020 As of May 30, 2020 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Customer contracts and relationships ( 3 - 8 years) $ 23,914 $ ( 8,435 ) $ 15,479 $ 23,779 $ ( 6,707 ) $ 17,072 Tradenames ( 3 - 10 years) 5,104 ( 3,420 ) 1,684 4,960 ( 2,735 ) 2,225 Backlog ( 17 months) 1,210 ( 1,113 ) 97 1,210 ( 694 ) 516 Consultant list ( 3 years) 838 ( 838 ) - 776 ( 718 ) 58 Non-compete agreements ( 3 years) 957 ( 957 ) - 888 ( 821 ) 67 Computer software ( 2 - 3.5 years) 3,988 ( 186 ) 3,802 185 ( 46 ) 139 Total $ 36,011 $ ( 14,949 ) $ 21,062 $ 31,798 $ ( 11,721 ) $ 20,077 The Company recorded amortization expense of $ 1.4 million and $ 1.5 million for the three months ended November 28, 2020 and November 23, 2019, respectively, and $ 2.9 million and $ 2.6 million for the six months ended November 28, 2020 and November 23, 2019, respectively. The following table summarizes future estimated amortization expense related to intangible assets (in thousands): 2021 (remaining 6 months) $ 2,313 2022 4,456 2023 4,247 2024 4,124 2025 3,121 2026 2,327 Thereafter 474 Total $ 21,062 The estimates of future intangible asset amortization expense do not incorporate the potential impact of future currency fluctuations when translating the financial results of the Company’s international operations that have amortizable intangible assets into U.S. dollars. As further described in Note 12 – Segment Information , the Company changed its segment reporting effective in the second quarter of fiscal 2021, and reallocated goodwill to the new reporting units on the relative fair value basis. Concurrent with the segment change, the Company completed a goodwill impairment assessment, and concluded that no goodwill impairment existed immediately before and after the change in segment reporting. The following table summarizes the activity in the Company’s goodwill balance. The balance as of May 30, 2020 was recast to reflect the impact of the preceding segment change. Amounts are in thousands. RGP Other Segments Total Company Balance as of May 30, 2020 $ 208,958 $ 5,109 $ 214,067 Impact of foreign currency exchange rate changes - 2,179 2,179 Balance as of November 28, 2020 $ 208,958 $ 7,288 $ 216,246 |
Leases
Leases | 6 Months Ended |
Nov. 28, 2020 | |
Leases [Abstract] | |
Leases | 5. Leases The Company currently leases office space, vehicles and certain equipment under operating leases. The following table summarizes components of the total lease cost, which were included within selling, general and administrative expenses in the Consolidated Statements of Operations (in thousands): Three Months Ended Six Months Ended November 28, 2020 November 23, 2019 November 28, 2020 November 23, 2019 Operating lease cost $ 2,745 $ 3,036 $ 5,618 $ 6,116 Short-term lease cost 29 120 92 198 Variable lease cost 681 596 1,248 1,200 Sublease income ( 222 ) ( 185 ) ( 444 ) ( 306 ) Total lease cost $ 3,233 $ 3,567 $ 6,514 $ 7,208 Supplemental cash flow information related to the Company’s operating leases were as follows (in thousands): Three Months Ended Six Months Ended November 28, 2020 November 23, 2019 November 28, 2020 November 23, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 3,683 $ 3,230 $ 6,957 $ 6,559 Right-of-use assets obtained in exchange for new operating lease obligations $ 535 $ 2,924 $ 1,555 $ 4,384 The weighted average remaining lease term and weighted average discount rate for the Company’s operating leases were as follows: As of As of November 28, 2020 May 30, 2020 Weighted average remaining lease term 4.1 years 4.3 years Weighted average discount rate 3.98 % 4.09 % The m aturities of operating lease liabilities were as follows as of November 28, 2020 (in thousands): Years Ending : Operating Lease Maturity May 29, 2021 $ 6,301 May 28, 2022 11,291 May 27, 2023 8,923 May 25, 2024 7,156 May 31, 2025 3,474 Thereafter 3,376 Total minimum payments $ 40,521 Less: discount ( 3,109 ) Present value of operating lease liabilities $ 37,412 The Company owns its headquarters office building located in Irvine, California and leases approximately 13,000 square feet of the approximately 57,000 square feet building to independent third parties under operating lease agreements expiring through fiscal 2025. Rental income recognized totaled $ 55,000 and $ 70,000 for the three months ended November 28, 2020 and November 23, 2019, respectively, and $ 110,000 and $ 106,000 for the six months ended November 28, 2020 and November 23, 2019, respectively. Under the terms of these operating lease agreements, rental income is expected to be $ 107,000 , $ 219,000 , $ 226,000 , $ 232,000 and $ 78,000 in the remaining six months of fiscal 2021 and fiscal years 2022 through 2025, respectively. Rental income is included in selling, general and administrative expenses in the Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Nov. 28, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes For the three months ended November 28, 2020 and November 23, 2019, respectively, the Company’s provision for income taxes was $ 2.3 million, an effective tax rate of 178.5 %, and $ 5.3 million, an effective tax rate of 30.2 %. For the six months ended November 28, 2020 and November 23, 2019, respectively, the Company’ provision for income taxes was $ 4.2 million, an effective tax rate of 76.5 %, and $ 8.0 million, an effective tax rate of 31.6 %. Tax provision of $ 2.3 million for the second quarter was primarily associated with pre-tax income from regions outside of Europe. The majority of the restructuring charges incurred during the second quarter were incurred in the Company’s European entities resulting in a pre-tax loss in Europe. With significant required valuation allowances on tax benefits related to these net operating losses, no tax benefits were recognized in connection with the pre-tax loss. The Company’s total liability for unrecognized tax benefits was $ 0.8 million as of both November 28, 2020 and May 30, 2020, which, if ultimately recognized, would impact the effective tax rate in future periods. The unrecognized tax benefits are included in long-term liabilities in the Consolidated Balance Sheets based on the closing of the statute of limitations. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Nov. 28, 2020 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 7. Long-Term Debt Pursuant to the terms of the Credit Agreement dated October 17, 2016 between the Company and Resources Connection LLC, as borrowers, and Bank of America, N.A. as lender (as amended, the “Credit Agreement”), the Company has a $ 120.0 million secured revolving credit facility (“Facility”) with Bank of America, which, until September 3, 2020, consisted of (i) a $ 90.0 million revolving loan facility (“Revolving Commitment”), which includes a $ 5.0 million sublimit for the issuance of standby letters of credit, and (ii) a $ 30.0 million reducing revolving loan facility (“Reducing Revolving Commitment”), any amounts of which could not be reborrowed after being repaid. On September 3, 2020, the Company and Resources Connection LLC, as borrowers, entered into the Fifth Amendment to the Credit Agreement (the “Fifth Amendment”) with Bank of America, N.A. as lender, which amended the terms of the Facility pursuant to the Credit Agreement. The Fifth Amendment, among other things, modifies the commitments to (1) eliminate the $ 30.0 million Reducing Revolving Commitment and (2) increase the Revolving Commitment by $ 30.0 million to $ 120.0 million. The Facility is available for working capital and general corporate purposes, including potential acquisitions and stock repurchases. The Company’s obligations under the Facility are guaranteed by all of the Company’s domestic subsidiaries and secured by essentially all assets of the Company, Resources Connection LLC and their respective domestic subsidiaries, subject to certain customary exclusions. Borrowings under the Facility bear interest at a rate per annum of either, at the Company’s option, (i) a London Interbank Offered Rate (“LIBOR”) defined in the Facility plus a margin or (ii) an alternate base rate, plus a margin, with the applicable margin depending on the Company’s consolidated leverage ratio. The alternate base rate is the highest of (i) Bank of America’s prime rate, (ii) the federal funds rate plus 0.50 % and (iii) the Eurodollar rate plus 1.0 %. Prior to entering into the Fifth Amendment, the margin for loans based on LIBOR was 1.25 % to 1.50 %, and the margin for loans based on the alternate base rate was 0.25 % to 0.50 %. Effective upon entering into the Fifth Amendment, the applicable margin increased by 0.25 % and the LIBOR interest rate floor increased from 0 % to 0.25 %. The Company pays an unused commitment fee on the average daily unused portion of the Facility, which, prior to entering into the Fifth Amendment, was a rate of 0.15 % to 0.25 % per annum depending on the Company’s consolidated leverage ratio and, effective upon entering into the Fifth Amendment, is 0.25 % per annum. The Facility expires on October 17, 2022 . The Facility contains both affirmative and negative covenants. Covenants include, but are not limited to, limitations on the Company’s and its subsidiaries’ ability to incur liens, incur additional indebtedness, make certain restricted payments, merge or consolidate and make dispositions of assets. In addition, the Facility requires the Company to comply with financial covenants limiting the Company’s total funded debt, minimum interest coverage ratio and maximum leverage ratio. The Company was compliant with all financial covenants under the Facility as of November 28, 2020. Upon the occurrence of an event of default under the Facility, the lender may cease making loans, terminate the Facility and declare all amounts outstanding to be immediately due and payable. The Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. On September 21, 2020, the Company repaid $ 20.0 million on its Facility, reducing its outstanding borrowing under the Facility to $ 68.0 million as of November 28, 2020. In addition, the Company had $ 1.3 million of outstanding letters of credit issued as of November 28, 2020. There was $ 50.7 million remaining capacity under the Revolving Commitment as of November 28, 2020. As of November 28, 2020, the interest rates on the Company’s borrowings under the Facility ranged from 2.00 % to 2.23 %. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Nov. 28, 2020 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Stock Repurchase Program In July 2015, the Company’s board of directors approved a stock repurchase program (the “July 2015 program”), authorizing the repurchase, at the discretion of the Company’s senior executives, of the Company’s common stock for an aggregate dollar limit not to exceed $ 150 million. Repurchases under the program may take place in the open market or in privately negotiated transactions and may be made pursuant to a Rule 10b5-1 plan. During the three and six months ended November 28, 2020, the Company made no repurchase of its common stock. As of November 28, 2020, approximately $ 85.1 million remained available for future repurchases of the Company’s common stock under the July 2015 program. Quarterly Dividend Subject to approval each quarter by its board of directors, the Company pays a regular quarterly cash dividend. On October 22, 2020, the Company’s board of directors declared a quarterly cash dividend of $ 0.14 per common share. The dividend of approximately $ 4.5 million was paid on December 17, 2020 to the holders of record on November 19, 2020 and is accrued in the Company’s Consolidated Balance Sheet as of November 28, 2020. Continuation of the quarterly dividend is at the discretion of the board of directors and depends upon the Company’s financial condition, results of operations, capital requirements, general business condition, contractual restrictions contained in the Credit Agreement and other agreements, and other factors deemed relevant by the board of directors. |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Nov. 28, 2020 | |
Restructuring Activities [Abstract] | |
Restructuring Activities | 9. Restructuring Activities The Company initiated its global restructuring and business transformation plan in North America and Asia Pacific (the “North America and APAC Plan”) in March 2020 and in Europe (the “European Plan”) in September 2020. Both the North America and APAC Plan and the European Plan consist of two key components: (i) an effort to streamline the management and organizational structure and eliminate certain positions as well as exit certain markets to focus on core solution offerings and core high growth clients; and (ii) a strategic rationalization of the Company’s physical geographic footprint and real estate spend to focus investment dollars in high growth core markets for greater impact. In connection with the execution of the European Plan, the Company changed its internal management structure and its reporting structure of financial information used to assess performance and allocate resources during the second quarter of fiscal 2021. The Company revised its operating segments accordingly effective in the second quarter of fiscal 2021, resulting in a change to the Company’s reportable segments into RGP and Other Segments. All of the employee termination and facility exit costs associated with the Company’s restructuring initiatives are within its RGP segment, and are recorded in selling, general and administrative expenses in the Company’s Consolidated Statement of Operations. See further discussion about the Company’s segment position in Note 12 – Segment Information . Restructuring costs for the three and six months ended November 28, 2020 and November 23, 2019 were as follows (in thousands): Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Employee termination costs $ 5,455 $ - $ 6,393 $ - Real estate exit costs 1,082 - 1,104 - Other costs 238 - 294 - Total restructuring costs $ 6,775 $ - $ 7,791 $ - The following table summarizes the employee termination activity under both the North America and APAC Plan and the European Plan for the year ended May 30, 2020 and the six months ended November 28, 2020 (in thousands): Liability balance at May 25, 2019 $ - Increase in liability (restructuring costs) 3,927 Reduction in liability (payments and others) ( 2,053 ) Liability balance at May 30, 2020 1,874 Increase in liability (restructuring costs) 6,393 Reduction in liability (payments and others) ( 2,965 ) Liability balance at November 28, 2020 $ 5,302 Under the North America and APAC Plan, cumulative restructuring costs incurred as of November 28, 2020 totaled $ 6.8 million. This consisted of $ 5.0 million in employee termination costs and $ 1.8 million of other costs primarily related to exiting the facilities, including $ 1.3 million in non-cash impairment of operating right-of-use assets and $ 0.5 million in loss on disposal of fixed assets. The Company has substantially completed the planned employee headcount reduction under the North America and APAC Plan, and expects the remaining liability of $ 1.1 million as of November 28, 2020 to be paid out prior to the end of calendar 2021. Under the European Plan, cumulative restructuring costs incurred as of November 28, 2020 totaled $ 6.0 million, including $ 5.3 million in employee termination costs and $ 0.7 million of other costs primarily related to exiting the facilities. The Company has substantially completed the consultation and negotiation with impacted employees under the European Plan as of November 28, 2020. The Company had $ 4.2 million in employee termination liability as of November 28, 2020, and expects to incur an additional $ 0.1 million of employee termination costs in connection with the reduction in force in Europe during the remainder of fiscal 2021. The Company expects the remaining employee termination costs under the European Plan to be paid out prior to the end of calendar 2021. |
Supplemental Disclosure Of Cash
Supplemental Disclosure Of Cash Flow Information | 6 Months Ended |
Nov. 28, 2020 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | |
Supplemental Disclosure Of Cash Flow Information | 10. Supplemental Disclosure of Cash Flow Information The following table presents information regarding income taxes paid, interest paid and non-cash investing and financing activities (amounts in thousands): Six Months Ended November 28, November 23, 2020 2019 Income taxes paid $ 2,627 $ 6,394 Interest paid $ 876 $ 1,140 Non-cash investing and financing activities: Capitalized leasehold improvements paid directly by landlord $ - $ 59 Acquisition of Veracity: Liability for contingent consideration $ - $ 6,440 Acquisition of Accretive: Issuance of common stock $ - $ 1,141 Dividends declared, not paid $ 4,541 $ 4,499 : |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 6 Months Ended |
Nov. 28, 2020 | |
Stock-Based Compensation Plans [Abstract] | |
Stock-Based Compensation Plans | 11. Stock-Based Compensation Plans General T he Company’s stockholders approved the 2020 Performance Incentive Plan (the “2020 Plan”) on October 22, 2020, which replaced and succeeded in its entirety the 2014 Performance Incentive Plan (the “2014 Plan”). Executive officers and certain employees, as well as non-employee directors of the Company and certain consultants and advisors are eligible to participate in the 2020 Plan. The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2020 Plan equals: (1) 1,797,440 (which represents the number of shares that were available for additional award grant purposes under the 2014 Plan immediately prior to the termination of the authority to grant new awards under the 2014 Plan as of October 22, 2020, plus (2) the number of any shares subject to stock options granted under the 2014 Plan or the Resources Connection, Inc. 2004 Performance Incentive Plan (collectively with the 2014 Plan, the “Prior Plans”) and outstanding as of October 22, 2020 which expire, or for any reason are cancelled or terminated, after that date without being exercised, plus (3) the number of any shares subject to restricted stock and restricted stock unit awards granted under the Prior Plans that are outstanding and unvested as of October 22, 2020 which are forfeited, terminated, cancelled, or otherwise reacquired after that date without having become vested. Awards under the 2020 Plan may include, but are not limited to, stock options, restricted stock units, performance stock units and restricted stock grants, including restricted stock units under the Company’s Directors Deferred Compensation Plan. These stock awards typically vest in equal annual installments over four years , and stock option grants typically terminate ten years from the date of grant. As of November 28, 2020, there were 1,880,646 shares available for further award grants under the 2020 Plan. Stock-Based Compensation Expense Stock-based compensation expense included in selling, general and administrative expenses was $ 1.7 million and $ 1.6 million for the three months ended November 28, 2020 and November 23, 2019, respectively, and $ 3.1 million and $ 3.2 million for the six months ended November 28, 2020 and November 23, 2019, respectively. These amounts consisted of stock-based compensation expense related to employee stock options, employee stock purchases made via the Employee Stock Purchase Plan (“ESPP”), restricted stock awards, restricted stock units and stock units credited under the Directors Deferred Compensation Plan. Stock Options The following table summarizes the stock option activity for the six months ended November 28, 2020 (amounts in thousands, except weighted average exercise price): Number of Weighted Shares Average Under Exercise Option Price Awards outstanding at May 30, 2020 5,755 $ 16.07 Granted, at fair market value Exercised ( 44 ) 11.36 Forfeited ( 183 ) 17.44 Expired ( 245 ) 15.84 Awards outstanding at November 28, 2020 5,283 $ 16.07 Exercisable at November 28, 2020 3,863 $ 15.48 Vested and expected to vest at November 28, 2020 5,173 $ 16.04 As of November 28, 2020, there was $ 5.4 million of total unrecognized compensation cost related to unvested employee stock options granted. That cost is expected to be recognized over a weighted-average period of 1.61 years. Employee Stock Purchase Plan On October 15, 2019, the Company’s stockholders approved the ESPP which superseded the Company’s previous Employee Stock Purchase Plan. The maximum number of shares of the Company’s common stock that are authorized for issuance under the ESPP is 1,825,000 . The ESPP allows qualified employees (as defined in the ESPP) to purchase designated shares of the Company’s common stock at a price equal to 85 % of the lesser of the fair market value of common stock at the beginning or end of each semi-annual stock purchase period. The ESPP’s term expires July 16, 2029. The Company issued 245,000 and 215,000 shares of common stock pursuant to the ESPP during the six months ended November 28, 2020 and November 23, 2019, respectively. There were 1,396,000 shares of common stock available for issuance under the ESPP as of November 28, 2020. Restricted Stock Awards The following table summarizes the activities for the unvested restricted stock awards for the six months ended November 28, 2020 (amounts in thousands, except weighted average grant-date fair value): Shares Weighted Average Grant-Date Fair Value Outstanding at May 30, 2020 90 $ 15.90 Granted - - Vested ( 41 ) 15.74 Forfeited/canceled - - Unvested as of November 28, 2020 49 $ 16.03 Expected to vest as of November 28, 2020 49 $ 16.04 As of November 28, 2020, there was $ 0.5 million of total unrecognized compensation cost related to unvested restricted stock awards. The cost is expected to be recognized over a weighted-average period of 1.7 years. Restricted Stock Units The following table summarizes the activities for the unvested restricted stock units for the six months ended November 28, 2020 (amounts in thousands, except weighted average grant-date fair value): Shares Weighted Average Grant-Date Fair Value Outstanding at May 30, 2020 87 $ 10.99 Granted 511 11.64 Vested ( 3 ) 11.51 Forfeited/canceled - - Unvested as of November 28, 2020 595 $ 11.76 Expected to vest as of November 28, 2020 520 $ 11.78 As of November 28, 2020, there was $ 6.6 million of total unrecognized compensation cost related to unvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.38 years. |
Segment Information
Segment Information | 6 Months Ended |
Nov. 28, 2020 | |
Segment Information [Abstract] | |
Segment Information | 12. Segment Information With the execution of the European Plan, discussed in Note 9— Restructuring Activities , the Company changed its internal management structure and its reporting structure of financial information used to assess performance and allocate resources during the second quarter of fiscal 2021. As a result, the Company revised its historical one segment position and identified the following new operating segments effective in the second quarter of fiscal 2021: RGP – a global business consulting practice which operates primarily under the RGP brand and focuses on professional project consulting and staffing services in areas such as finance and accounting, business strategy and transformation, risk and compliance, and technology and digital; taskforce – a German professional services firm that operates under the taskforce brand. It utilizes a distinct independent contractor/partner business model and infrastructure and focuses on providing senior interim management and project management services to middle market clients in the German market; Sitrick – a crisis communications and public relations firm which operates under the Sitrick brand, providing corporate, financial, transactional and crisis communication and management services. RGP also includes the operations of Veracity, which is being integrated with the rest of the RGP business operations. RGP is the Company’s only reportable segment. taskforce and Sitrick do not individually meet the quantitative thresholds to qualify as reportable segments. Therefore, they are combined and disclosed as Other Segments. The tables below reflect the operating results of the Company’s segments consistent with the management and performance measurement system utilized by the Company. All prior year periods presented were recast to reflect the impact of the preceding segment changes. Performance measurement is based on segment Adjusted EBITDA. Adjusted EBITDA is defined as net (loss) income before amortization of intangible assets, depreciation expense, interest and income taxes plus stock-based compensation expense, restructuring costs, and plus or minus contingent consideration adjustments. Adjusted EBITDA at the segment level excludes certain shared corporate administrative costs that are not practical to allocate. The Company’s CODM does not evaluate segments using asset information. Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 (Amounts in thousands) Revenues: RGP $ 142,002 $ 173,987 $ 279,111 $ 335,997 Other Segments 11,220 10,520 21,456 20,735 Total revenues $ 153,222 $ 184,507 $ 300,567 $ 356,732 Gross profit: RGP $ 54,079 $ 70,206 $ 108,026 $ 133,466 Other Segments 4,099 4,171 8,048 8,414 Total gross profit $ 58,178 $ 74,377 $ 116,074 $ 141,880 Adjusted EBITDA: RGP $ 18,401 $ 28,598 $ 34,859 $ 48,068 Other Segments 1,251 868 2,417 2,099 Reconciling items (1) ( 7,257 ) ( 6,795 ) ( 14,664 ) ( 15,587 ) Total Adjusted EBITDA $ 12,395 $ 22,671 $ 22,612 $ 34,580 (1) Reconciling items are generally comprised of u nallocated corporate administrative costs, including management and board compensation, back office support function costs and other general corporate costs that are not allocated to segments. The below is a reconciliation of the Company's net (loss) income to adjusted EBITDA for all periods presented. Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Consolidated (Amounts in thousands) Net (loss) income $ ( 992 ) $ 12,337 $ 1,292 $ 17,276 Adjustments: Amortization of intangible assets 1,393 1,510 2,923 2,604 Depreciation expense 984 1,424 1,991 2,793 Interest expense, net 460 551 955 1,033 Provision for income taxes 2,256 5,337 4,213 7,978 EBITDA 4,101 21,159 11,374 31,684 Stock-based compensation expense 1,708 1,643 3,105 3,158 Restructuring costs 6,775 - 7,791 - Contingent consideration adjustment ( 189 ) ( 131 ) 342 ( 262 ) Total Adjusted EBITDA $ 12,395 $ 22,671 $ 22,612 $ 34,580 |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Nov. 28, 2020 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 13. Legal Proceedings The Company is involved in certain legal matters arising in the ordinary course of business. In the opinion of management, none of such matters, if disposed of unfavorably, would have a material adverse effect on the Company’s financial position, cash flows or results of operations. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policy) | 6 Months Ended |
Nov. 28, 2020 | |
Summary Of Significant Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information The accompanying unaudited financial statements of the Company as of and for the three and six months ended November 28, 2020 and November 23, 2019 have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements include all adjustments (consisting only of normal recurring adjustments) management of the Company considers necessary for a fair presentation of its financial position at such dates and the operating results and cash flows for those periods. The fiscal 2020 year-end balance sheet data was derived from audited consolidated financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. The unaudited consolidated results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended May 30, 2020, which are included in the Company’s Annual Report on Form 10-K (“Fiscal Year 2020 Form 10-K”) filed with the SEC on July 27, 2020 (File No. 0-32113). The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the Fiscal Year 2020 Form 10-K. The Company has reviewed its accounting policies and identified those that it believes to be critical to the preparation and understanding of its consolidated financial statements in the list set forth below. See the disclosure under the heading “Critical Accounting Policies” in Item 7 of Part II of the Fiscal Year 2020 Form 10-K for a detailed description of these policies and their potential effects on the Company’s results of operations and financial condition. Allowance for doubtful accounts Income taxes Revenue recognition Stock-based compensation Valuation of long-lived assets Valuation of goodwill Business combinations With the execution of its restructuring plan in Europe, the Company changed its internal management structure and its reporting structure of financial information used to assess performance and allocate resources during the second quarter of fiscal 2021. As a result, the Company revised its segment reporting effective in the second quarter of fiscal 2021. These changes impacted the Company’s reportable segments but did not impact the Company’s consolidated financial statements. See Note 12 – Segment Information for additional information about the segment change . |
Principles Of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use Of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. |
Net (Loss) Income Per Share Information | Net (Loss) Income Per Share Information The Company presents both basic and diluted earnings (loss) per common share (“EPS”). Basic EPS is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period, calculated using the treasury stock method. Under the treasury stock method, assumed proceeds include the amount the employee must pay for exercising stock options and the amount of compensation cost for future services the Company has not yet recognized for the Company’s share-based payment awards. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and are excluded from the calculation. For the three months ended November 28, 2020, all common equivalent shares are excluded from the computation of weighted average number of common and common equivalent shares outstanding in the diluted EPS calculation due to the net loss position. The following table summarizes the calculation of net (loss) income per common share for the periods indicated (in thousands, except per share amounts): Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Net (loss) income $ ( 992 ) $ 12,337 $ 1,292 $ 17,276 Basic: Weighted average shares 32,356 31,984 32,270 31,852 Diluted: Weighted average shares 32,356 31,984 32,270 31,852 Potentially dilutive shares - 385 47 435 Total dilutive shares 32,356 32,369 32,317 32,287 Basic $ ( 0.03 ) $ 0.39 $ 0.04 $ 0.54 Dilutive $ ( 0.03 ) $ 0.38 $ 0.04 $ 0.54 Anti-dilutive shares not included above 5,083 4,809 5,185 3,684 |
Financial Instruments | Financial Instruments The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels: Level 1 – Quoted prices in active markets for identical assets and liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. Level 3 – Unobservable inputs. Contingent consideration liability is for estimated future contingent consideration payments related to the Company’s acquisitions. Total contingent consideration liabilities were $ 3.0 million and $ 7.9 million as of November 28, 2020 and May 30, 2020, respectively. The fair value measurement of the liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are the Company’s measures of the estimated payouts based on internally generated financial projections and discount rates. The fair value of contingent consideration liability is reassessed on a quarterly basis by the Company using additional information as it becomes available, and any change in the fair value estimates are recorded in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations. See Note 3 – Acquisition . The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and long-term debt are carried at cost, which approximates their fair value because of the short - term maturity of these instruments or because their stated interest rates are indicative of market interest rates. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Under ASU 2016-13, companies are required to present financial assets, measured at amortized cost basis, at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis, such as trade receivables. The measurement of expected credit loss will be based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company adopted this guidance using the modified retrospective adoption method beginning with its first quarter of fiscal 2021, and applied it to all applicable accounts. The application of this new guidance did not have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. |
Summary Of Significant Accoun_3
Summary Of Significant Accounting Policies (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Summary Of Significant Accounting Policies [Abstract] | |
Calculation Of Net (Loss) Income Per Share | Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Net (loss) income $ ( 992 ) $ 12,337 $ 1,292 $ 17,276 Basic: Weighted average shares 32,356 31,984 32,270 31,852 Diluted: Weighted average shares 32,356 31,984 32,270 31,852 Potentially dilutive shares - 385 47 435 Total dilutive shares 32,356 32,369 32,317 32,287 Basic $ ( 0.03 ) $ 0.39 $ 0.04 $ 0.54 Dilutive $ ( 0.03 ) $ 0.38 $ 0.04 $ 0.54 Anti-dilutive shares not included above 5,083 4,809 5,185 3,684 |
Intangible Assets And Goodwill
Intangible Assets And Goodwill (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Intangible Assets And Goodwill [Abstract] | |
Summary Of Intangible Assets And Related Accumulated Amortization | As of November 28, 2020 As of May 30, 2020 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Customer contracts and relationships ( 3 - 8 years) $ 23,914 $ ( 8,435 ) $ 15,479 $ 23,779 $ ( 6,707 ) $ 17,072 Tradenames ( 3 - 10 years) 5,104 ( 3,420 ) 1,684 4,960 ( 2,735 ) 2,225 Backlog ( 17 months) 1,210 ( 1,113 ) 97 1,210 ( 694 ) 516 Consultant list ( 3 years) 838 ( 838 ) - 776 ( 718 ) 58 Non-compete agreements ( 3 years) 957 ( 957 ) - 888 ( 821 ) 67 Computer software ( 2 - 3.5 years) 3,988 ( 186 ) 3,802 185 ( 46 ) 139 Total $ 36,011 $ ( 14,949 ) $ 21,062 $ 31,798 $ ( 11,721 ) $ 20,077 |
Summary Of Future Estimated Amortization Expense | 2021 (remaining 6 months) $ 2,313 2022 4,456 2023 4,247 2024 4,124 2025 3,121 2026 2,327 Thereafter 474 Total $ 21,062 |
Summary Of Activity In Goodwill Balance | RGP Other Segments Total Company Balance as of May 30, 2020 $ 208,958 $ 5,109 $ 214,067 Impact of foreign currency exchange rate changes - 2,179 2,179 Balance as of November 28, 2020 $ 208,958 $ 7,288 $ 216,246 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Leases [Abstract] | |
Lease Cost Components | Three Months Ended Six Months Ended November 28, 2020 November 23, 2019 November 28, 2020 November 23, 2019 Operating lease cost $ 2,745 $ 3,036 $ 5,618 $ 6,116 Short-term lease cost 29 120 92 198 Variable lease cost 681 596 1,248 1,200 Sublease income ( 222 ) ( 185 ) ( 444 ) ( 306 ) Total lease cost $ 3,233 $ 3,567 $ 6,514 $ 7,208 |
Supplemental Cash Flow Information Related To Operating Leases | Three Months Ended Six Months Ended November 28, 2020 November 23, 2019 November 28, 2020 November 23, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 3,683 $ 3,230 $ 6,957 $ 6,559 Right-of-use assets obtained in exchange for new operating lease obligations $ 535 $ 2,924 $ 1,555 $ 4,384 |
Lease Term And Discount Rate | As of As of November 28, 2020 May 30, 2020 Weighted average remaining lease term 4.1 years 4.3 years Weighted average discount rate 3.98 % 4.09 % |
Maturities Of Operating Lease Liabilities | Years Ending : Operating Lease Maturity May 29, 2021 $ 6,301 May 28, 2022 11,291 May 27, 2023 8,923 May 25, 2024 7,156 May 31, 2025 3,474 Thereafter 3,376 Total minimum payments $ 40,521 Less: discount ( 3,109 ) Present value of operating lease liabilities $ 37,412 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Restructuring Activities [Abstract] | |
Summary Of Restructuring Costs | Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Employee termination costs $ 5,455 $ - $ 6,393 $ - Real estate exit costs 1,082 - 1,104 - Other costs 238 - 294 - Total restructuring costs $ 6,775 $ - $ 7,791 $ - |
Summary Of Employee Separation Activity | Liability balance at May 25, 2019 $ - Increase in liability (restructuring costs) 3,927 Reduction in liability (payments and others) ( 2,053 ) Liability balance at May 30, 2020 1,874 Increase in liability (restructuring costs) 6,393 Reduction in liability (payments and others) ( 2,965 ) Liability balance at November 28, 2020 $ 5,302 |
Supplemental Disclosure Of Ca_2
Supplemental Disclosure Of Cash Flow Information (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | |
Schedule Of Additional Information Regarding Cash Flows | Six Months Ended November 28, November 23, 2020 2019 Income taxes paid $ 2,627 $ 6,394 Interest paid $ 876 $ 1,140 Non-cash investing and financing activities: Capitalized leasehold improvements paid directly by landlord $ - $ 59 Acquisition of Veracity: Liability for contingent consideration $ - $ 6,440 Acquisition of Accretive: Issuance of common stock $ - $ 1,141 Dividends declared, not paid $ 4,541 $ 4,499 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Stock-Based Compensation Plans [Abstract] | |
Summary Of Stock Option Activity | Number of Weighted Shares Average Under Exercise Option Price Awards outstanding at May 30, 2020 5,755 $ 16.07 Granted, at fair market value Exercised ( 44 ) 11.36 Forfeited ( 183 ) 17.44 Expired ( 245 ) 15.84 Awards outstanding at November 28, 2020 5,283 $ 16.07 Exercisable at November 28, 2020 3,863 $ 15.48 Vested and expected to vest at November 28, 2020 5,173 $ 16.04 |
Summary Of Unvested Restricted Shares Outstanding | Shares Weighted Average Grant-Date Fair Value Outstanding at May 30, 2020 90 $ 15.90 Granted - - Vested ( 41 ) 15.74 Forfeited/canceled - - Unvested as of November 28, 2020 49 $ 16.03 Expected to vest as of November 28, 2020 49 $ 16.04 |
Summary Unvested Restricted Stock Unit Activity | Shares Weighted Average Grant-Date Fair Value Outstanding at May 30, 2020 87 $ 10.99 Granted 511 11.64 Vested ( 3 ) 11.51 Forfeited/canceled - - Unvested as of November 28, 2020 595 $ 11.76 Expected to vest as of November 28, 2020 520 $ 11.78 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Nov. 28, 2020 | |
Segment Information [Abstract] | |
Summary Of Operating Results Of Segments | Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 (Amounts in thousands) Revenues: RGP $ 142,002 $ 173,987 $ 279,111 $ 335,997 Other Segments 11,220 10,520 21,456 20,735 Total revenues $ 153,222 $ 184,507 $ 300,567 $ 356,732 Gross profit: RGP $ 54,079 $ 70,206 $ 108,026 $ 133,466 Other Segments 4,099 4,171 8,048 8,414 Total gross profit $ 58,178 $ 74,377 $ 116,074 $ 141,880 Adjusted EBITDA: RGP $ 18,401 $ 28,598 $ 34,859 $ 48,068 Other Segments 1,251 868 2,417 2,099 Reconciling items (1) ( 7,257 ) ( 6,795 ) ( 14,664 ) ( 15,587 ) Total Adjusted EBITDA $ 12,395 $ 22,671 $ 22,612 $ 34,580 (1) Reconciling items are generally comprised of u nallocated corporate administrative costs, including management and board compensation, back office support function costs and other general corporate costs that are not allocated to segments. |
Reconciliation of Net Income (Loss) to Adjusted EBITDA | Three Months Ended Six Months Ended November 28, November 23, November 28, November 23, 2020 2019 2020 2019 Consolidated (Amounts in thousands) Net (loss) income $ ( 992 ) $ 12,337 $ 1,292 $ 17,276 Adjustments: Amortization of intangible assets 1,393 1,510 2,923 2,604 Depreciation expense 984 1,424 1,991 2,793 Interest expense, net 460 551 955 1,033 Provision for income taxes 2,256 5,337 4,213 7,978 EBITDA 4,101 21,159 11,374 31,684 Stock-based compensation expense 1,708 1,643 3,105 3,158 Restructuring costs 6,775 - 7,791 - Contingent consideration adjustment ( 189 ) ( 131 ) 342 ( 262 ) Total Adjusted EBITDA $ 12,395 $ 22,671 $ 22,612 $ 34,580 |
Summary Of Significant Accoun_4
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions | Nov. 28, 2020 | May 30, 2020 |
Summary Of Significant Accounting Policies [Abstract] | ||
Contingent consideration liability | $ 3 | $ 7.9 |
Summary Of Significant Accoun_5
Summary Of Significant Accounting Policies (Calculation Of Net (Loss) Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Summary Of Significant Accounting Policies [Abstract] | ||||
Net (loss) income | $ (992) | $ 12,337 | $ 1,292 | $ 17,276 |
Basic: | ||||
Weighted average shares | 32,356 | 31,984 | 32,270 | 31,852 |
Diluted: | ||||
Weighted average shares | 32,356 | 31,984 | 32,270 | 31,852 |
Potentially dilutive shares | 385 | 47 | 435 | |
Total dilutive shares | 32,356 | 32,369 | 32,317 | 32,287 |
Net income per common share: | ||||
Basic (per share) | $ (0.03) | $ 0.39 | $ 0.04 | $ 0.54 |
Dilutive (per share) | $ (0.03) | $ 0.38 | $ 0.04 | $ 0.54 |
Anti-dilutive shares not included above | 5,083 | 4,809 | 5,185 | 3,684 |
Acquisition (Narrative) (Detail
Acquisition (Narrative) (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Nov. 28, 2020 | Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | May 30, 2020 |
Business Acquisition [Line Items] | |||||||
Contingent consideration adjustment | $ (189) | $ (131) | $ 342 | $ (262) | |||
Contingent consideration liability | $ 3,000 | 3,000 | 3,000 | $ 7,900 | |||
Veracity [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Consideration paid | $ 38,600 | ||||||
Earn-out payment | 5,300 | ||||||
Contingent consideration adjustment | (200) | 300 | |||||
Contingent consideration liability | $ 2,600 | $ 2,600 | $ 2,600 |
Intangible Assets And Goodwil_2
Intangible Assets And Goodwill (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Intangible Assets And Goodwill [Abstract] | ||||
Amortization expense | $ 1,393,000 | $ 1,510,000 | $ 2,923,000 | $ 2,604,000 |
Goodwill impairment | $ 0 | $ 0 |
Intangible Assets And Goodwil_3
Intangible Assets And Goodwill (Summary Of Intangible Assets And Related Accumulated Amortization) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 28, 2020 | May 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 36,011 | $ 31,798 |
Accumulated Amortization | (14,949) | (11,721) |
Net | 21,062 | 20,077 |
Customer Contracts And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 23,914 | 23,779 |
Accumulated Amortization | (8,435) | (6,707) |
Net | $ 15,479 | 17,072 |
Customer Contracts And Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Customer Contracts And Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 8 years | |
Tradenames [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 5,104 | 4,960 |
Accumulated Amortization | (3,420) | (2,735) |
Net | $ 1,684 | 2,225 |
Tradenames [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Tradenames [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 10 years | |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 17 months | |
Gross | $ 1,210 | 1,210 |
Accumulated Amortization | (1,113) | (694) |
Net | $ 97 | 516 |
Consultant List [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Gross | $ 838 | 776 |
Accumulated Amortization | $ (838) | (718) |
Net | 58 | |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years | |
Gross | $ 957 | 888 |
Accumulated Amortization | (957) | (821) |
Net | 67 | |
Computer Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 3,988 | 185 |
Accumulated Amortization | (186) | (46) |
Net | $ 3,802 | $ 139 |
Computer Software [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 2 years | |
Computer Software [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful lives | 3 years 6 months |
Intangible Assets And Goodwil_4
Intangible Assets And Goodwill (Summary Of Future Estimated Amortization Expense) (Details) $ in Thousands | Nov. 28, 2020USD ($) |
Intangible Assets And Goodwill [Abstract] | |
2021 (remaining 6 months) | $ 2,313 |
2022 | 4,456 |
2023 | 4,247 |
2024 | 4,124 |
2025 | 3,121 |
2026 | 2,327 |
Thereafter | 474 |
Total | $ 21,062 |
Intangible Assets And Goodwil_5
Intangible Assets And Goodwill (Summary Of Activity In Goodwill Balance) (Details) $ in Thousands | 6 Months Ended |
Nov. 28, 2020USD ($) | |
Goodwill [Line Items] | |
Goodwill, beginning of period | $ 214,067 |
Impact of foreign currency exchange rate changes | 2,179 |
Goodwill, end of period | 216,246 |
RGP [Member] | |
Goodwill [Line Items] | |
Goodwill, beginning of period | 208,958 |
Goodwill, end of period | 208,958 |
Other Segments [Member] | |
Goodwill [Line Items] | |
Goodwill, beginning of period | 5,109 |
Impact of foreign currency exchange rate changes | 2,179 |
Goodwill, end of period | $ 7,288 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020USD ($)ft² | Nov. 23, 2019USD ($) | Nov. 28, 2020USD ($)ft² | Nov. 23, 2019USD ($) | |
Area of real estate property | ft² | 57,000 | 57,000 | ||
Rental income | $ 55,000 | $ 70,000 | $ 110,000 | $ 106,000 |
Expected rental income from third party leases in fiscal 2021 | 107,000 | 107,000 | ||
Expected rental income from third party leases in fiscal 2022 | 219,000 | 219,000 | ||
Expected rental income from third party leases in fiscal 2023 | 226,000 | 226,000 | ||
Expected rental income from third party leases in fiscal 2024 | 232,000 | 232,000 | ||
Expected rental income from third party leases in fiscal 2025 | $ 78,000 | $ 78,000 | ||
Leases To Independent Third Parties [Member] | ||||
Area of real estate property | ft² | 13,000 | 13,000 |
Leases (Lease Cost Components)
Leases (Lease Cost Components) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,745 | $ 3,036 | $ 5,618 | $ 6,116 |
Short-term lease cost | 29 | 120 | 92 | 198 |
Variable lease cost | 681 | 596 | 1,248 | 1,200 |
Sublease income | (222) | (185) | (444) | (306) |
Total lease cost | $ 3,233 | $ 3,567 | $ 6,514 | $ 7,208 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information Related To Operating Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Leases [Abstract] | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 3,683 | $ 3,230 | $ 6,957 | $ 6,559 |
Right-of-use assets obtained in exchange for new operating lease obligations | $ 535 | $ 2,924 | $ 1,555 | $ 4,384 |
Leases (Lease Term And Discount
Leases (Lease Term And Discount Rate) (Details) | Nov. 28, 2020 | May 30, 2020 |
Leases [Abstract] | ||
Weighted average remaining lease term | 4 years 1 month 6 days | 4 years 3 months 18 days |
Weighted average discount rate | 3.98% | 4.09% |
Leases (Maturities Of Operating
Leases (Maturities Of Operating Lease Liabilities) (Details) $ in Thousands | Nov. 28, 2020USD ($) |
Leases [Abstract] | |
May 29, 2021 | $ 6,301 |
May 28, 2022 | 11,291 |
May 27, 2023 | 8,923 |
May 25, 2024 | 7,156 |
May 31, 2025 | 3,474 |
Thereafter | 3,376 |
Total minimum payments | 40,521 |
Less: discount | (3,109) |
Present value of operating lease liabilities | $ 37,412 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | May 30, 2020 | |
Income Taxes [Abstract] | |||||
Income tax expense | $ 2,256 | $ 5,337 | $ 4,213 | $ 7,978 | |
Effective tax rate | 178.50% | 30.20% | 76.50% | 31.60% | |
Unrecognized tax benefits | $ 800 | $ 800 | $ 800 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - Credit Facility [Member] - USD ($) $ in Millions | Sep. 21, 2020 | Sep. 03, 2020 | Sep. 02, 2020 | Nov. 28, 2020 |
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 120 | |||
Increase in interest rate spread | 0.25% | |||
Credit facility, commitment fee | 0.25% | |||
Repayment of credit facility | $ 20 | |||
Credit facility, expiration date | Oct. 17, 2022 | |||
Credit facility, remaining borrowing capacity | $ 50.7 | |||
Credit facility, outstanding balance | $ 68 | |||
Federal Funds Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest spread on variable rate | 0.50% | |||
Eurodollar Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest spread on variable rate | 1.00% | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 120 | $ 90 | ||
Credit facility, increase (decrease) in borrowing capacity | $ 30 | |||
Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | 5 | |||
Credit facility, outstanding balance | $ 1.3 | |||
Reducing Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 30 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, commitment fee | 0.15% | |||
Credit facility, effective interest rate | 2.00% | |||
Minimum [Member] | LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest spread on variable rate | 0.25% | 0.00% | 1.25% | |
Minimum [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest spread on variable rate | 0.25% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, commitment fee | 0.25% | |||
Credit facility, effective interest rate | 2.23% | |||
Maximum [Member] | LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest spread on variable rate | 1.50% | |||
Maximum [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest spread on variable rate | 0.50% |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 17, 2020 | Nov. 28, 2020 | Nov. 28, 2020 | Nov. 23, 2019 | Oct. 22, 2020 | Jul. 31, 2015 |
Stockholders' Equity Disclosure [Line Items] | ||||||
Purchase of common stock (in shares) | 0 | 0 | ||||
Dividends payable (per share) | $ 0.14 | |||||
Cash dividends paid | $ 9,059 | $ 8,581 | ||||
Subsequent Event [Member] | ||||||
Stockholders' Equity Disclosure [Line Items] | ||||||
Cash dividends paid | $ 4,500 | |||||
July 2015 Program [Member] | ||||||
Stockholders' Equity Disclosure [Line Items] | ||||||
Amount authorized under a stock repurchase program | $ 150,000 | |||||
Stock repurchase plan, remaining amount | $ 85,100 | $ 85,100 |
Restructuring Activities (Narra
Restructuring Activities (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Nov. 28, 2020 | May 30, 2020 | May 25, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Impairment of operating right-of-use assets | $ 650 | ||
North America And Asia Pacific Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs incurred to date | 6,800 | ||
Restructuring liability | 1,100 | ||
European Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs incurred to date | 6,000 | ||
Employee Termination Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring liability | 5,302 | $ 1,874 | |
Employee Termination Costs [Member] | North America And Asia Pacific Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs incurred to date | 5,000 | ||
Employee Termination Costs [Member] | European Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs incurred to date | 5,300 | ||
Expected restructuring costs | 100 | ||
Restructuring liability | 4,200 | ||
Real Estate Exit Costs [Member] | North America And Asia Pacific Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of operating right-of-use assets | 1,800 | ||
Real Estate Exit Costs [Member] | European Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs incurred to date | 700 | ||
Impairment Of Operating Right Of Use Assets [Member] | North America And Asia Pacific Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of operating right-of-use assets | 1,300 | ||
Gain Loss On Disposal Of Fixed Assets [Member] | North America And Asia Pacific Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs incurred to date | $ 500 |
Restructuring Activities (Summa
Restructuring Activities (Summary Of Restructuring Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Nov. 28, 2020 | Nov. 28, 2020 | May 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 6,775 | $ 7,791 | |
Employee Termination Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 5,455 | 6,393 | $ 3,927 |
Real Estate Exit Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 1,082 | 1,104 | |
Other Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 238 | $ 294 |
Restructuring Activities (Sum_2
Restructuring Activities (Summary Of Employee Separation Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Nov. 28, 2020 | Nov. 28, 2020 | May 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Increase in liability (restructuring costs) | $ 6,775 | $ 7,791 | |
Employee Termination Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability balance, beginning of period | 1,874 | ||
Increase in liability (restructuring costs) | 5,455 | 6,393 | 3,927 |
Reduction in liability (payments and others) | (2,965) | (2,053) | |
Liability balance, end of period | $ 5,302 | $ 5,302 | $ 1,874 |
Supplemental Disclosure Of Ca_3
Supplemental Disclosure Of Cash Flow Information (Schedule Of Additional Information Regarding Cash Flows) (Details) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Nov. 28, 2020 | Nov. 23, 2019 | |
Supplemental Disclosure Of Cash Flow Information [Abstract] | ||
Income taxes paid | $ 2,627 | $ 6,394 |
Interest paid | 876 | 1,140 |
Capitalized leasehold improvements paid directly by landlord | 59 | |
Liability for contingent consideration | $ 6,440 | |
Issuance of common stock | 1,141 | |
Dividends declared, not paid | $ 4,541 | $ 4,499 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,708 | $ 1,643 | $ 3,105 | $ 3,158 |
Performance Incentive Plan 2020 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock made available for awards | 1,797,440 | 1,797,440 | ||
Stock options vesting period | 4 years | |||
Stock options termination period | 10 years | |||
Shares available for grant | 1,880,646 | 1,880,646 | ||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock made available for awards | 1,825,000 | 1,825,000 | ||
Shares available for grant | 1,396,000 | 1,396,000 | ||
Percentage of exercise price per share out of fair market value | 85.00% | |||
Common stock issued | 245,000 | 215,000 | ||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to stock-based compensation | $ 5,400 | $ 5,400 | ||
Weighted-average period of cost to be recognized | 1 year 7 months 9 days | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to stock-based compensation | 500 | $ 500 | ||
Weighted-average period of cost to be recognized | 1 year 8 months 12 days | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to stock-based compensation | $ 6,600 | $ 6,600 | ||
Weighted-average period of cost to be recognized | 2 years 4 months 17 days |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans (Summary Of Stock Option Activity) (Details) shares in Thousands | 6 Months Ended |
Nov. 28, 2020$ / sharesshares | |
Stock-Based Compensation Plans [Abstract] | |
Awards outstanding, Beginning balance | shares | 5,755 |
Exercised | shares | (44) |
Forfeited | shares | (183) |
Expired | shares | (245) |
Awards outstanding, Ending balance | shares | 5,283 |
Exercisable | shares | 3,863 |
Vested and expected to vest | shares | 5,173 |
Beginning balance, Weighted Average Exercise Price (per share) | $ / shares | $ 16.07 |
Exercised, Weighted Average Exercise Price (per share) | $ / shares | 11.36 |
Forfeited, Weighted Average Exercise Price (per share) | $ / shares | 17.44 |
Expired, Weighted Average Exercise Price (per share) | $ / shares | 15.84 |
Ending balance, Weighted Average Exercise Price (per share) | $ / shares | 16.07 |
Exercisable, Weighted Average Exercise Price (per share) | $ / shares | 15.48 |
Vested and expected to vest, Weighted Average Exercise Price (per share) | $ / shares | $ 16.04 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans (Summary Of Unvested Restricted Shares Outstanding) (Details) - Restricted Stock [Member] shares in Thousands | 6 Months Ended |
Nov. 28, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding, beginning balance | shares | 90 |
Vested, Shares | shares | (41) |
Unvested, ending balance, Shares | shares | 49 |
Expected to vest, Shares | shares | 49 |
Outstanding, beginning balance, Weighted Average Grant-Date Fair Value | $ / shares | $ 15.90 |
Vested, Weighted Average Grant-Date Fair Value | $ / shares | 15.74 |
Unvested, ending balance, Weighted Average Grant-Date Fair Value | $ / shares | 16.03 |
Expected to vest, Weighted Average Grant-Date Fair Value | $ / shares | $ 16.04 |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans (Summary Unvested Restricted Stock Unit Activity) (Details) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 6 Months Ended |
Nov. 28, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding, beginning balance | shares | 87 |
Granted, Shares | shares | 511 |
Vested, Shares | shares | (3) |
Unvested, ending balance, Shares | shares | 595 |
Expected to vest, Shares | shares | 520 |
Outstanding, beginning balance, Weighted Average Grant-Date Fair Value | $ / shares | $ 10.99 |
Granted, Weighted Average Grant-Date Fair Value | $ / shares | 11.64 |
Vested, Weighted Average Grant-Date Fair Value | $ / shares | 11.51 |
Unvested, ending balance, Weighted Average Grant-Date Fair Value | $ / shares | 11.76 |
Expected to vest, Weighted Average Grant-Date Fair Value | $ / shares | $ 11.78 |
Segment Information (Summary Of
Segment Information (Summary Of Operating Results Of Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 153,222 | $ 184,507 | $ 300,567 | $ 356,732 |
Gross profit | 58,178 | 74,377 | 116,074 | 141,880 |
Adjusted EBITDA | 12,395 | 22,671 | 22,612 | 34,580 |
Reconciling Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | (7,257) | (6,795) | (14,664) | (15,587) |
RGP [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 142,002 | 173,987 | 279,111 | 335,997 |
Gross profit | 54,079 | 70,206 | 108,026 | 133,466 |
Adjusted EBITDA | 18,401 | 28,598 | 34,859 | 48,068 |
Other Segments [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 11,220 | 10,520 | 21,456 | 20,735 |
Gross profit | 4,099 | 4,171 | 8,048 | 8,414 |
Adjusted EBITDA | $ 1,251 | $ 868 | $ 2,417 | $ 2,099 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Net Income (Loss) to Adjusted EBITDA) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 28, 2020 | Nov. 23, 2019 | Nov. 28, 2020 | Nov. 23, 2019 | |
Segment Information [Abstract] | ||||
Net (loss) income | $ (992) | $ 12,337 | $ 1,292 | $ 17,276 |
Amortization of intangible assets | 1,393 | 1,510 | 2,923 | 2,604 |
Depreciation expense | 984 | 1,424 | 1,991 | 2,793 |
Interest expense, net | 460 | 551 | 955 | 1,033 |
Provision for income taxes | 2,256 | 5,337 | 4,213 | 7,978 |
EBITDA | 4,101 | 21,159 | 11,374 | 31,684 |
Stock-based compensation expense | 1,708 | 1,643 | 3,105 | 3,158 |
Restructuring costs | 6,775 | 7,791 | ||
Contingent consideration adjustment | (189) | (131) | 342 | (262) |
Total Adjusted EBITDA | $ 12,395 | $ 22,671 | $ 22,612 | $ 34,580 |