RGP Publishes Letter From CEO Regarding COVID-19

Resources Global Professionals (“RGP”), the operating subsidiary of Resources Connection, Inc. (Nasdaq: RGP), today posted the following letter from its CEO, Kate Duchene, on its website at rgp.com/company/news/:

Dear RGP Community,

At a time when economic uncertainty reigns due to COVID-19, I want to be as transparent as possible with our investor community about what we know and how we’re managing through the pandemic. I’m pleased to share that our overall headline is both positive and steady: We provide an essential service and our management employee teams have adjusted quickly to working from home. We continue to serve our clients effectively around the world, and generally, business remains fairly stable.

Before diving further into the current state of the business, let me start with what we consider to be our greatest asset and top priority, now and always: our people. Ensuring the health and safety of our employees and their families has been our primary focus throughout this challenging time. We’ve been fiercely committed to doing our part to offer support, including through weekly communications from our leadership and Business Continuity Team, access to telemedicine and employee assistance programs, as well as virtual learning and training opportunities. For example, in late April, we launched RGP Kids Academy, a program we created to relieve pressure on our busy working parents with a virtual learning environment supported by tutors from across the RGP community. And while RGP already offers PTO and sick leave benefits to all our employees, we implemented a COVID-specific supplemental paid leave program for consultants unable to work after contracting the virus. I’m immensely proud of the professionalism displayed by our people and the actions we’ve taken to support them during this time of crisis.

Even as we confront the current economic climate, we know we’re fortunate in several important respects. Given the nature of our business, we’ve always had a strong balance sheet, including healthy levels of cash on hand and a modest debt leverage ratio. Our variable expense operating model serves to mitigate our risk profile translating into a fixed-cost load that’s much lower than running an employed-bench model. For example, in our most recent quarter, we consider approximately 70% of our total cost to be variable, and in a time of grave economic uncertainty, it’s hard to overstate the power of this model.