Key Highlights

  • First-quarter revenue was $98.1 million versus $120.2 million.
  • The net loss was $8.0 million, or $0.23 per share.
  • Cash was $61.2 million, down from $82.4 million at May 30.
  • A $0.07 per share dividend totalling $2.4 million was paid on October 1.

Resources Connection, Inc. (NASDAQ:RGP), the consulting firm trading as RGP, reported first-quarter fiscal 2027 results on October 7, 2026, showing revenue down 18.4% on a same-day constant currency basis, a wider net loss and a lower cash balance. The report follows a fiscal 2026 in which the company breached a covenant and replaced its credit facility.

Latest Company Context

For the quarter ended August 29, 2026, revenue was $98.1 million versus $120.2 million. Gross margin was 37.4% versus 39.5%. GAAP SG&A fell to $43.1 million from $47.9 million, and adjusted SG&A was $40.3 million. Net loss was $8.0 million, or $(0.23) per share, versus $2.4 million, or $(0.07). Adjusted EBITDA was $(3.6) million versus $3.1 million. Cash was $61.2 million, down from $82.4 million at May 30, and cash used in operations was $18.9 million versus $7.8 million. Borrowing capacity is up to $24.1 million under the PNC Bank credit agreement. A $0.07 per share dividend, totalling $2.4 million, was paid on October 1. The company said revenue and gross margin were within the ranges it communicated in July, and adjusted SG&A beat its outlook.

Key Business Drivers

For fiscal 2026 (year ended May 30), revenue was $452.0 million versus $551.3 million, net loss was $40.6 million, and adjusted EBITDA was $5.0 million. The company reported it was not in compliance with all financial covenants on its prior facility at year-end, terminated it on July 13, and on July 15 entered a new secured revolver of up to the lesser of $30.0 million or a borrowing base tied to eligible receivables. Restructuring costs were $8.4 million for the year. CEO Roger Carlile has said that recent investments should drive revenue growth through a ramp-up period, which is management's expectation. Key drivers therefore include demand for consulting services, utilisation and pricing, cost savings, and cash conversion.

What Investors Should Watch

Investors may watch the second-quarter fiscal 2027 results, which would follow the quarter ending in late November. Items of interest include whether the revenue decline narrows, whether gross margin stabilises near the 37% area, and whether adjusted EBITDA returns to positive territory. Cash burn is another focus, given cash fell about $21 million in the quarter and borrowing capacity is tied to receivables. Any change to the quarterly dividend, further restructuring charges, covenant disclosures under the PNC agreement, and evidence that the investments Mr Carlile referenced are producing new business may be relevant. Management's commentary on the October 7 conference call could provide further detail.

Falling Revenue and Cash Test the Cost Actions

RGP's latest quarter shows lower revenue, a wider loss and lower cash, with the dividend still being paid and restructuring under way. Whether cost actions are enough is the question for the next report.