Key Highlights

● Fiscal 2026 revenue was $452.0 million, down 18.0% from $551.3 million.

● The net loss was $40.6 million, narrower than $191.8 million a year earlier.

● The company reported it was not in compliance with all financial covenants at year-end.

● A new secured revolver of up to $30.0 million replaced the old facility.

Resources Connection (NASDAQ:RGP), the professional services firm known for its on-demand talent model, finished fiscal 2026 with sharply lower revenue, a covenant shortfall and a replacement credit facility. Management says it is aligning costs with revenue and refocusing its core business while it builds consulting and artificial intelligence offerings.

Latest Company Context

For the fiscal year ended May 30, 2026, revenue was $452.0 million, down 18.0% from $551.3 million. Fourth-quarter revenue was $106.1 million versus $139.3 million. The net loss was $40.6 million, or $1.21 per share, much narrower than $191.8 million a year earlier, and adjusted EBITDA was $5.0 million. The fourth quarter showed an adjusted EBITDA loss of $0.6 million. Cash was $82.4 million, and operating cash flow was $1.4 million. The company reported it was not in compliance with all financial covenants at year-end, ended its old facility on July 13, 2026, and entered a new secured revolver on July 15 worth up to the lesser of $30.0 million or a borrowing base tied to receivables.

Key Business and Index Drivers

Restructuring costs reached $8.4 million for the year, including workforce reductions in October 2025 and January 2026, and executive transition costs were $12.2 million after the former CEO and COO departed. The Sitrick business was sold on May 2, 2026, at a $2.4 million loss. CEO Roger Carlile said Europe was weak while North America and Asia performed as expected. The company paid a $0.07 quarterly dividend on June 19, repurchased no shares in fiscal 2026, and had about $79.2 million left under repurchase authorizations.

It did not provide numeric first-quarter guidance, saying only that recent investments should drive growth after a ramp-up period. No index membership has been confirmed.

The year-over-year improvement in net loss largely reflects the comparison with a much heavier loss in fiscal 2025, so it should not be read as an operating recovery. Adjusted EBITDA of $5.0 million on $452.0 million of revenue shows how thin margins have become, and executive transition costs of $12.2 million add to the sense of a reset under new leadership.

What Investors Should Watch

The fiscal first-quarter report, covering the period to late August, is the next scheduled disclosure, though its date is unconfirmed. Investors may want to see whether revenue stabilizes near the fourth-quarter level of $106.1 million, whether adjusted EBITDA turns positive again, and how much the cost actions have reduced the base. Details on borrowings under the new revolver, covenant terms and headroom could matter given the borrowing-base structure. Other items include progress in the Consulting segment, signs of recovery in Europe, any change to the dividend, and whether the repurchase authorization is used.

A Smaller Facility and an Unfinished Recovery

Resources Connection has resolved its immediate financing question with a smaller, receivables-backed facility, but the underlying demand picture remains the larger test. A cost base tuned to lower revenue could help if volumes steady, while further declines could keep pressure on margins and covenants. The new facility's borrowing-base design means available liquidity may track receivables, which in turn follow revenue. That link could make the stability of billings especially relevant over the coming quarters. Scenarios range from gradual stabilization as cost cuts take hold to further revenue pressure that strains the new arrangement.