What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-07-28 compared with 2024-07-22 · 447 added, 269 removed, 776 unchanged (48% of the section changed)

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Consolidated Statements of Operations for each of the three years in the period ended May 31 , 20 25

Consolidated Statements of Comprehensive Income for each of the three years in the period ended May 2 5 , 20 24

Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended May 31 , 20 25

Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended May 31 , 202 5

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Notes to Consolidated Financial Statements

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Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Resources Connection, Inc.

and its subsidiaries (the “Company”) as of May 25, 2024 and May 27, 2023, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended May 25, 2024, and the related notes (collectively the “financial statements”).

and its subsidiaries (the Company) as of May 31, 2025 and May 25, 2024, and the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity and cash flows for each of the three years in the period ended May 31, 2025, and the related notes (collectively, the financial statements).

We also have audited the Company’s internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

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and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee of the board of directors and that:

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee of the board of directors and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of RGP Reporting Unit for Goodwill Impairment Testing

As described in Notes 2 and 5 to the financial statements, the Company’s goodwill balance assigned to the RGP reporting unit was $216.6 million.

The Company tests for impairment of goodwill at the reporting unit level at least annually and whenever events occur or circumstances indicate that a carrying amount of goodwill may not be recoverable.

The Company determined the fair value of the RGP reporting unit using a discounted cash flow methodology.

When determining the fair value of the RGP reporting unit management makes significant estimates and assumptions, including revenue growth rates, projected operating costs, and discount rates.

We identified the valuation of the RGP reporting unit for goodwill impairment testing as a critical audit matter given the significant estimates and assumptions management makes to determine the fair value of the RGP reporting unit including revenue growth rates, projected operating costs, and discount rates utilized.

Auditing the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment and an increased audit effort, including the involvement of our valuation specialists.

Our audit procedures related to the valuation of the Company’s RGP reporting unit included the following, among others:

• We obtained an understanding of the relevant controls related to the valuation of the Company’s RGP reporting unit and tested such controls for design and operating effectiveness, including management review controls.

• We evaluated the reasonableness of management’s forecasts of revenue growth rates by comparing the forecasts to (1) historical results, and (2) external market and industry data.

• We tested the reasonableness of management’s revenue projections by comparing management’s prior forecasts of future revenues to historical results for the Company.

• We evaluated the reasonableness of management’s forecasts of operating costs as a percentage of revenue by comparing the forecasts to the historical results, and comparison to guideline public companies.

• With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation methodology and significant assumptions by:

◦ Evaluating the reasonableness of the discount rate by comparing the underlying source information to publicly available market data and verifying the accuracy of the calculations.

◦ Evaluating the appropriateness of the valuation method used by management and testing their mathematical accuracy.

Valuation of CloudGo Pte Ltd.

acquisition-date contingent consideration

As described in Note 3 to the financial statements, the Company acquired CloudGo Pte Ltd.

(“CloudGo”) in November 2023.

The total consideration on the acquisition date for CloudGo amounted to approximately $12.2 million, which included an estimated acquisition-date fair value contingent consideration of approximately $4.4 million.

The contingent consideration may be paid based on the achievement of certain revenue and operating profit margin performance during two one-year performance periods that begin after the acquisition date.

The acquisition-date fair value of the contingent consideration was estimated using a Monte Carlo simulation model.

In estimating the acquisition-date fair value of the contingent consideration, management was required to make significant judgments in formulating the significant estimates and assumptions about future revenue and operating expenses when utilizing the aforementioned valuation method.

We identified the Company’s valuation of the contingent consideration related to the acquisition of CloudGo as a critical audit matter due to the high degree of auditor judgment, including the use of our valuation specialists, involved in

performing procedures and evaluating audit evidence related to significant estimates and assumptions utilized by management, including revenue and operating expenses, when calculating the fair value of the contingent consideration.

Our audit procedures related to the Company’s valuation of the contingent consideration in connection with the aforementioned acquisition included the following, among others:

• We obtained an understanding of the relevant controls related to the valuation of the contingent consideration and tested such controls for design and operating effectiveness, including management review controls.

• We evaluated the reasonableness of management’s forecasts of revenue and operating expenses by comparing the forecasts to (1) the historical results, and (2) external market and industry data.

• With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation model that reflects the use of multiple probabilities.

The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Annual and Interim Goodwill Impairment Assessments

As described in Notes 2 and 5 to the financial statements, the Company’s consolidated net goodwill balance was $28.8 million as of May 31, 2025.

The Company tests for goodwill impairment at the reporting unit level at least annually on the first day of the last quarter of the fiscal year or more frequently if facts, events or circumstances indicate that the carrying amount of goodwill may not be recoverable.

On May 26, 2024, management realigned its reporting units due to a change in organizational structure.

Reporting units under the former structure were tested for impairment prior to the realignment, and no impairment was identified.

As a result of the realignment, the Company reallocated its existing goodwill to its new reporting units which resulted from the change in its operating segments.

Goodwill was reassigned to each of the new reporting units using a relative fair value approach and reconciled to its market capitalization.

Management assessed the goodwill of the new reporting units for impairment as of May 26, 2024 and determined that there was $3.8 million of goodwill impairment in the Europe & Asia Pacific reporting unit.

During the second, third and fourth quarters of 2025, the Company experienced a sustained decline in its stock price resulting in the market capitalization being less than the carrying value of the combined reporting units.

After considering all available evidence in the evaluation of goodwill impairment indicators, management determined it appropriate to perform interim quantitative assessments of the reporting units during those periods.

As a result of these quantitative assessments performed, the Company incurred an aggregate impairment charge of $190.6 million for fiscal year 2025 in the On-Demand Talent, Consulting and Europe & Asia Pacific reporting units.

The Company’s determination of the estimated fair value for each reporting unit was based on a market-based approach, income-based approach or a combination of both approaches.

The market-based approach was based on the guideline public company method, which uses market multiples of revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) for a group of comparable public companies.

The income-based approach was based on the present value of discounted cash flows of each reporting unit, using the Company’s assumptions regarding revenue growth rates, forecasted gross profit margins, forecasted earnings and free cash flows, terminal period growth rates, and other economic and market trends.

Additionally, the present value was based on applying a weighted average cost of capital, which considered long-term interest rates and cost of equity based on the reporting segment’s risk profile.

We identified the valuation of goodwill as a critical audit matter given the significant estimates and assumptions the Company makes to determine the fair value of the reporting unit including revenue growth rates, adjusted EBITDA margin and discount rates.

Auditing the reasonableness of the Company’s estimates and assumptions required a high degree of auditor judgment and an increased audit effort, including the involvement of our valuation specialists.

Our audit procedures related to the valuation of goodwill for each reporting unit included the following, among others:

• We obtained an understanding of the relevant controls related to the Company’s goodwill valuation and tested such controls for design and operating effectiveness, including management’s review of the significant assumptions used in the estimate of fair value.

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• We evaluated the reasonableness of management’s forecasts of revenue growth rates by comparing the forecasts to (1) historical results, and (2) external market data.

• We evaluated the reasonableness of management’s forecasts of adjusted EBITDA margin as a percentage of revenue by comparing the forecasts to the historical results, and comparison to guideline public companies.

• With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation methodologies and significant assumptions by:

• Evaluating the reasonableness of the discount rates by comparing the underlying source information to publicly available market data and verifying the accuracy of the calculations.

• Evaluating the appropriateness of the valuation methods used by management and testing the mathematical accuracy.

/s/ RSM US LLP

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July 28, 2025

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RESOURCES CONNECTION, INC.

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Accumulated other comprehensive loss ( 17,863 ) ( 17,713 )

Retained earnings 88,595 87,648

Retained earnings (Accumulated deficit) ( 121,575 ) 88,595

Treasury stock at cost, 3,952 and 2,638 shares as of May 31, 2025 and May 25, 2024, respectively

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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Selling, general and administrative expenses 202,024 208,864 228,842

Goodwill impairment 194,409 - 2,955

Amortization expense 5,880 5,378 5,018

Depreciation expense 1,868 3,050 3,539

Goodwill impairment - 2,955 -

Income from operations 28,776 72,788 83,438

Income (loss) from operations ( 196,757 ) 28,776 72,788

Interest (income) expense, net ( 544 ) ( 1,064 ) 552

Other expense (income) 11 ( 382 ) ( 594 )

Income before income tax expense 29,829 72,618 82,968

Income tax expense 8,795 18,259 15,793

Net income $ 21,034 $ 54,359 $ 67,175

Net income per common share:

Other (income) expense ( 138 ) 11 ( 382 )

Income (loss) before income tax (benefit) expense ( 196,075 ) 29,829 72,618

Income tax (benefit) expense ( 4,295 ) 8,795 18,259

Net income (loss) $ ( 191,780 ) $ 21,034 $ 54,359

Net income (loss) per common share:

Basic $ ( 5.80 ) $ 0.63 $ 1.63

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

For the Years Ended

Net income $ 21,034 $ 54,359 $ 67,175

Net income (loss) $ ( 191,780 ) $ 21,034 $ 54,359

Foreign currency translation adjustment, net of tax ( 150 ) ( 423 ) ( 806 )

Total comprehensive income $ 20,611 $ 53,553 $ 58,084

Total comprehensive income (loss) $ ( 191,930 ) $ 20,611 $ 53,553

The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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Loss Retained

Earnings Total

Earnings (Accumulated deficit)

Stockholders'

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Issuance of common stock upon vesting of restricted stock units, net shares withheld to cover taxes 79 1 ( 1,763 ) - - - ( 5 ) ( 1,767 )

Amortization of restricted stock issued out of treasury stock to board of director members - - ( 24 ) - 114 - ( 50 ) 40

Cash dividends declared ($ 0.56 per share)

- - - - - - ( 18,816 ) ( 18,816 )

Retirement of treasury stock ( 31,739 ) ( 317 ) ( 157,646 ) ( 31,739 ) 520,686 - ( 362,723 ) -

Repurchase of common stock - - - 915 ( 15,199 ) - - ( 15,199 )

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Balances as of May 25, 2024 36,194 $ 363 $ 389,720 2,638 $ ( 42,202 ) $ ( 17,713 ) $ 88,595 $ 418,763

Exercise of stock options 32 1 451 - - - - 452

Stock-based compensation expense - - 7,249 - - - - 7,249

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Currency translation adjustment - - 3 - - ( 150 ) - ( 147 )

Net income for the year ended May 25, 2024 - - - - - - 21,034 21,034

Net loss for the year ended May 31, 2025 - - - - - - ( 191,780 ) ( 191,780 )

Balances as of May 31, 2025 37,027 $ 370 $ 400,180 3,952 $ ( 54,031 ) $ ( 17,863 ) $ ( 121,575 ) $ 207,081

The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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Cash flows from operating activities:

Net income $ 21,034 $ 54,359 $ 67,175

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 191,780 ) $ 21,034 $ 54,359

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense 7,748 8,428 8,557

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Contingent consideration adjustment - ( 4,400 ) -

Loss or (gain) on dissolution of subsidiaries

- 220 ( 884 )

Goodwill impairment - 2,955 -

Loss on dissolution of subsidiaries - - 220

(Gain) loss on sale of assets ( 3,687 ) 574 38

Impairment of goodwill 194,409 - 2,955

Adjustment to allowances 1,239 137 1,440

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Other, net 612 336 ( 268 )

Changes in operating assets and liabilities, net of dispositions:

Changes in operating assets and liabilities, net of acquisitions and dispositions:

Trade accounts receivable 10,416 29,631 13,552

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Proceeds from sale of taskforce

Proceeds from sale of assets - 2 -

Net proceeds from the sale of assets 12,309 - 2

Acquisition of Reference Point, net of cash acquired ( 23,169 ) - -

Acquisition of CloudGo, net of cash acquired - ( 7,411 ) -

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Repurchase of common stock ( 12,999 ) ( 8,000 ) ( 15,199 )

Payment of contingent consideration liabilities - - ( 3,575 )

Proceeds from Revolving Credit Facility - - 15,000

Repayments on Revolving Credit Facility - - ( 69,000 )

Payment of debt issuance costs - - ( 222 )

Payment of cash dividends ( 18,646 ) ( 18,825 ) ( 18,784 )

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Cash and cash equivalents at beginning of period 108,892 116,784 104,224

Cash, cash equivalents and restricted cash at end of period 108,892 116,784 104,469

Restricted cash at end of period - - ( 245 )

Cash and cash equivalents at end of period $ 86,147 $ 108,892 $ 116,784

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The accompanying notes are an integral part of these consolidated financial statements.

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RESOURCES CONNECTION, INC.

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The Company’s operating entities provide services primarily under the name Resources Global Professionals (“RGP”).

RGP is a global consulting firm focused on project execution services that power clients’ operational needs and change initiatives utilizing on-demand experienced and diverse talent.

As a next-generation human capital partner for its clients, the Company specializes in co-delivery of enterprise initiatives typically precipitated by business transformation, strategic transactions, or regulatory change.

RGP is a professional services firm focused on delivering consulting execution services that power clients’ operational needs and change initiatives utilizing a combination of bench and on-demand, expert and diverse talent.

As a next-generation human capital partner for its clients, the Company specializes in leadership and co-delivery of enterprise initiatives typically precipitated by business transformation, strategic transactions, or regulatory change.

The Company’s principal markets of operations are North America, Europe, and Asia Pacific.

The Company’s fiscal year consists of 52 or 53 weeks, ending on the Saturday in May closest to May 31.

Fiscal year 2025 consisted of three 13-week quarters and one 14-week fourth quarter for a total of 53 weeks.

Fiscal years 2024 and 2023 consisted of four 13-week quarters and included a total of 52 weeks of activity in each fiscal year.

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Reporting Segments

Effective May 31, 2022, the Company’s operating segments consist of the following:

• RGP – a global consulting firm focused on project execution services that power clients’ operational needs and change initiatives utilizing on-demand, experienced and diverse talent;

• Sitrick – a crisis communications and public relations firm which operates under the Sitrick brand, providing corporate, financial, transactional and crisis communication and management services.

Each of these segments reports through a separate management team to the Company’s Chief Executive Officer, who is designated as the Chief Operating Decision Maker (“CODM”) for segment reporting purposes.

RGP is the Company’s only reportable segment.

Sitrick does not individually meet the quantitative threshold to qualify as a reportable segment.

Therefore, Sitrick is the only entity disclosed in Other Segments in fiscal 2024 and 2023.

During the first quarter of fiscal 2025, the Chief Executive Officer announced a decision to reorganize the Company’s business by forming multiple discrete operational business units.

To align the new operating model and financial reporting, the Company made management organizational changes and implemented new reporting modules and processes to provide discrete information to manage the business.

During the first quarter of fiscal 2025, the Company completed its assessment of the Company's operating segments and identified the following newly defined operating segments:

• On-Demand Talent – this segment provides businesses with a go-to source for bringing in experts when they need them.

• Consulting – this segment drives transformation across people, processes and technology across domain areas including finance, technology and digital, risk and compliance and supply chain transformation.

• Europe & Asia Pacific – is a geographically defined segment that offers both on-demand and consulting services (excluding the digital consulting business, which is included in our Consulting segment) to clients throughout Europe and Asia Pacific.

• Outsourced Services – operating under the Countsy by RGP TM brand, this segment offers finance, accounting and HR services provided to startups, spinouts and scale-up enterprises, utilizing a technology platform and fractional team.

• Sitrick – a crisis communications and public relations firm that provides corporate, financial, transactional and crisis communication and management services.

Each of these segments reports through a separate segment manager to the Company’s Chief Executive Officer and Chief Operating Officer, who are collectively designated as the Chief Operating Decision Maker (“CODM”) for segment reporting purposes.

The Company's reportable segments are comprised of On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services.

Sitrick does not individually meet the quantitative thresholds to qualify as a reportable segment.

Therefore, Sitrick is disclosed under the “All Other” segment.

Each of these segments represents a reporting unit for the purposes of assessing goodwill for impairment.

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On November 15, 2023, the Company acquired CloudGo Pte Ltd.

and its subsidiaries (collectively, “CloudGo”).

CloudGo is reported as part of the RGP operating segment.

See Note 3 – Acquisitions and Dispositions for further information.

On May 31, 2022, the Company divested taskforce – Management on Demand GmbH, and its wholly-owned subsidiary skillforce – Executive Search GmbH, a German professional services firm operating under the taskforce brand (“ taskforce ”);

see Note 3 – Acquisitions and Dispositions for further information.

Since the second quarter of fiscal 2021 and prior to the divestment, the business operated by taskforce , along with its parent company, Resources Global Professionals (Germany) GmbH (“RGP Germany”), an affiliate of the Company, represented an operating segment of the Company and was reported as a part of Other Segments in fiscal 2022.

Prior-period comparative segment information was not restated as a result of the divestiture of taskforce as the Company did not have a change in internal organization or the financial information that the CODM uses to assess performance and allocate resources.

See Note 18 – Segment Information and Enterprise Reporting for further information.

On July 1, 2024, the Company acquired Reference Point LLC (“Reference Point”).

CloudGo and Reference Point are both reported as part of the Consulting operating segment.

See Note 3 – Acquisitions and Dispositions in the Notes to Consolidated Financial Statements for further information.

Reclassifications

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The Company’s clients are contractually obligated to pay the Company for all hours billed.

The Company invoices most of its clients on a weekly basis or, in certain circumstances, on a bi-weekly or monthly basis, and its typical arrangement of payment is due within 30 days.

The Company invoices most of its clients on a weekly basis or, in certain circumstances, on a bi-weekly or monthly basis, and its typical

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arrangement of payment is due within 30 days.

To a much lesser extent, in certain circumstances, the Company also earns revenue if one of its consultants is hired by, or if the Company places an outside candidate with, its client.

Conversion fees or permanent placement fees are recognized when one of the Company’s professionals, or a candidate identified by the Company, accepts an offer of permanent employment from a client and all requisite terms of the agreement have been met.

Such conversion fees or permanent placement fees are recognized when the performance obligation is considered complete,

which the Company considers a) when the consultant or candidate accepts the position;

Such conversion fees or permanent placement fees are recognized when the performance obligation is considered complete, which the Company considers a) when the consultant or candidate accepts the position;

b) the consultant or candidate has notified either RGP or their current employer of their decision;

and c) the start date is within the Company’s current quarter.

Conversion fees were 0.3 %, of revenue for each of the years ended May 25, 2024, May 27, 2023 and May 28, 2022.

Conversion fees were 0.2 % of revenue for the year ended May 31, 2025, and 0.3 % of revenue for each of the years ended May 25, 2024 and May 27, 2023.

Permanent placement fees were 0.1 %, 0.2 % and 0.3 % of revenue for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively.

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Per Share Information

The Company presents both basic and diluted earnings per share (“EPS”).

Basic EPS is calculated by dividing net income by the weighted-average number of common shares outstanding during the period.

Performance stock units are excluded from the basic EPS calculation, since the number of shares subject to the award that will vest will not be determined until after the end of the applicable performance period.

Diluted EPS is based upon the weighted-average number of common shares and common equivalent shares outstanding during the period, calculated using the treasury stock method.

Under the treasury stock method, exercise proceeds include the amount the employee must pay for exercising stock options, the amount of compensation cost related to stock awards for future services that the Company has not yet recognized and the amount of tax benefits that would be recorded when the award becomes deductible.

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.

The following table summarizes the calculation of net income per share for the years ended May 25, 2024, May 27, 2023 and May 28, 2022 (in thousands, except per share amounts):

The Company presents both basic and diluted earnings (loss) per share (“EPS”).

Basic EPS is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted EPS is based upon the weighted-average number of common shares and potentially dilutive common shares outstanding during the period.

Potentially dilutive shares of common stock include the assumed exercise of outstanding in-the-money stock options, assumed issuance of common stock under the Company's 2019 Employee Stock Purchase Plan, as amended (“ESPP”), assumed release of outstanding restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) using the treasury stock method.

However, potentially dilutive shares of common stock are excluded from the computation in periods in which they have an anti-dilutive effect.

During the year ended May 31, 2025, the Company incurred a net loss, and as a result potentially dilutive common shares issuable from the assumed exercise of stock options and the assumed release of shares of common stock under the outstanding ESPP, RSAs, RSUs, and PSUs awards were not included in the diluted shares used to calculate net loss per share, as their inclusion would have been anti-dilutive.

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The following table summarizes the calculation of net income (loss) per share for the years ended May 31, 2025, May 25, 2024 and May 27, 2023 (in thousands, except per share amounts):

For the Years Ended

Net income $ 21,034 $ 54,359 $ 67,175

Net income (loss) $ ( 191,780 ) $ 21,034 $ 54,359

Weighted-average shares outstanding:

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Diluted weighted-average shares outstanding 33,063 33,895 34,185

Net income per common share:

Net income (loss) per common share:

Basic $ ( 5.80 ) $ 0.63 $ 1.63

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Contingent consideration liability is for estimated future contingent consideration payments related to the Company’s acquisitions.

Total contingent consideration liabilities related to the acquisition of CloudGo were preliminarily valued at $ 4.4 million as of November 25, 2023 and zero as of May 25, 2024.

Total contingent consideration liabilities related to the acquisition of CloudGo were preliminarily valued at $ 4.4 million as of November 25, 2023 and zero as of May 31, 2025 and May 25, 2024, respectively.

As a result, no further remeasurements or revisions are required.

The fair value measurement of the liability was 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 were the Company’s measures of the estimated payouts based on internally generated financial projections and discount rates.

The fair value of contingent consideration liability will be remeasured on a quarterly basis until settlement by the Company using additional

information as it becomes available, and any change in the fair value estimates will be recorded in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations.

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 significant unobservable inputs used in the fair value measurement of the contingent consideration liability at these dates were the Company’s measures of the estimated payouts based on internally generated financial projections and discount rates.

The fair value of contingent

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consideration liability will be remeasured on a quarterly basis until settlement by the Company using additional information as it becomes available, and any change in the fair value estimates will be recorded in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations.

Future revisions to these significant unobservable inputs and the assumptions underlying them could materially change the estimate of the fair value of contingent consideration and therefore could materially affect the Company’s future operating results.

The Company’s remaining financial instruments, including cash and cash equivalents, trade accounts receivable, accounts payable and other 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.

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Assets and Liabilities Held for Sale

Assets and liabilities held for sale primarily represent property and equipment, and other assets and liabilities that have met the criteria of “held for sale” accounting, as specified by ASC 360, Property, Plant, and Equipment .

The effect of suspending amortization on noncurrent assets held for sale is immaterial to the results of operations.

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Conversely, gains are not recognized on the sale of a long-lived asset or disposal group until the date of sale.

On February 24, 2024, the Company determined the asset groups associated with the corporate office in Irvine, California met the criteria of held for sale, since the Company intends to complete the sale of these assets within the twelve months following the end of the third quarter of fiscal 2024.

On February 24, 2024, the Company determined the asset groups associated with the Company's former corporate office in Irvine, California met the criteria of held for sale, since the Company intended to complete the sale of these assets within the twelve months following the end of the third quarter of fiscal 2024.

The Company concluded that the offering price of the disposal assets was an approximate fair value.

The Company sold its Irvine, California corporate office in August 2024.

See Note 4 – Assets and Liabilities Held for Sale for further information.

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Depreciation is computed using the straight-line method over the following estimated useful lives:

Building 30 years

Furniture and fixtures 5 to 10 years

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Costs for normal repairs and maintenance are expensed to operations as incurred, while renewals and major refurbishments are capitalized.

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Long-lived Assets

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If the sum of expected undiscounted future cash flows is less than the carrying amount of the asset, a second step is warranted and an impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value calculated using the present value of estimated net future cash flows.

The Company recorded an impairment against its right of use ("ROU") assets and leasehold improvements of $ 0.2 million , zero and $ 0.8 million for the years ended May 25, 2024, May 27, 2023 and May 28, 2022, respectively, primarily associated with exiting certain real estate leases as part of its restructuring initiatives.

The Company recorded an impairment against its right of use (“ROU”) assets and leasehold improvements of zero , $ 0.2 million and zero for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively, primarily associated with exiting certain real estate leases as part of its restructuring initiatives.

The impairment charges are included in selling, general and administrative expense in the Company’s Consolidated Statements of Operations.

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Goodwill is recorded at the time of an acquisition and is calculated as the difference between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired.

Goodwill is not subject to amortization but the carrying value is tested for impairment on an annual basis in the fourth quarter of the fiscal year, or more frequently if the Company believes indicators of impairment exist.

Impairment evaluations involve management’s assessment of qualitative factors to determine whether it is more likely than not that goodwill is impaired.

If management concludes from its assessment of qualitative factors that it is more likely than not that impairment exists, then a quantitative impairment test will be performed.

Significant management judgment is required in the forecasts of future operating results that are used in these evaluations.

Impairment testing is conducted at the reporting unit level.

Application of the goodwill impairment test requires judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Company’s business, and determination of the Company’s weighted average cost of capital.

Under Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other , the qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows or planned revenue or earnings of the reporting unit as potential indicators when determining the need for a quantitative assessment of impairment.

During the fourth quarter, we voluntarily changed the date of the annual impairment test from the last day of the fourth quarter to the first day of the fourth quarter.

This voluntary change is preferable under the circumstances as it results in better alignment with our business operating process.

Goodwill is not subject to amortization but the carrying value is tested for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist.

During the fourth quarter of fiscal 2024, the Company voluntarily changed the date of the annual impairment test from the last day of the fourth quarter to the first day of the fourth quarter to better align with our internal operations.

This change was applied prospectively and was not material to the Company’s consolidated financial statements as it did not delay, accelerate or avoid an impairment charge.

On the first day of the fourth quarter of fiscal 2024, the Company performed an annual goodwill impairment on its RGP reporting unit and elected to perform a quantitative goodwill impairment analysis.

As a result of the quantitative impairment test performed on February 25, 2024, the Company concluded that there was no goodwill impairment.

Furthermore, there have been no changes in facts, circumstances or events, since the date of the Company's goodwill impairment test through May 25, 2024 that would give rise to modifying this conclusion regarding our goodwill impairment assessment or require further testing.

However, the Company concluded in fiscal 2023 that the carrying amount of the Sitrick reporting unit exceeded its fair value, which resulted in an impairment charge of $ 3.0 million on the goodwill associated with the Other Segments on the Consolidated Statements of Operations as of May 27, 2023.

There was no goodwill impairment during the year-ended May 28, 2022.

Impairment testing is conducted at the reporting unit level.

Under ASC 350, Intangibles - Goodwill and Other , the qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows or planned revenue or earnings of the reporting unit as potential indicators when determining the need for a quantitative assessment of impairment.

Under the quantitative analysis, the fair value of the reporting units is determined by using a market-based approach, an income-based approach or a combination thereof.

The market-based approach estimates fair value by applying revenue and EBITDA multiples to each reporting unit’s operating performance.

The multiples are derived from guideline public companies with similar operating and investment characteristics to the Company's reporting units, and are evaluated and adjusted, if needed, based on specific characteristics of the reporting units relative to the selected guideline companies.

The market-based approach requires the Company to make a series of assumptions that involve significant judgment, such as the selection of comparable companies and the evaluation of the multiples.

The income-based approach estimates fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital that reflects the relevant risks associated with each reporting unit and the time value of money.

The income approach also requires a series of assumptions that involve significant judgment, such as revenue projections and Adjusted EBITDA margin projections, which are based on historical experience and internal forecasts about future performance.

While the Company believes that the assumptions underlying its quantitative assessment are reasonable, these assumptions could have a significant impact on whether a non-cash impairment charge is recognized and the magnitude of such charge.

The results of an impairment analysis are as of a point in time.

There is no assurance that the actual future earnings or cash flows of the reporting units will be consistent with the Company’s projections.

The Company’s identifiable intangible assets include customer contracts and relationships, and computer software, including internally-developed software.

These assets are amortized on a straight-line basis over lives ranging from two to thirteen years .

These assets are amortized on a straight-line basis over lives ranging from one to twelve years .

For intangible assets subject to amortization, if the estimated undiscounted expected future cash flows are less than the net book value, an impairment loss is recognized equal to the amount by which the net book value exceeds the estimated fair value of assets.

The Company reviewed its intangible assets and did not identify any impairment as of May 25, 2024, May 27, 2023 and May 28, 2022.

The Company reviewed its intangible assets and did not identify any impairment during the years ended May 31, 2025, May 25, 2024 and May 27, 2023.

See Note 5 — Goodwill and Intangible Assets for a further description of the Company’s goodwill and intangible assets, including information about the Company’s goodwill impairment assessment.

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The Company currently leases office space, vehicles and certain equipment under operating leases expiring through 2034.

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The Company’s operating leases are primarily for real estate, which include fixed payments plus, in some cases, scheduled base rent increases over the term of the lease.

leases require variable payments of common area maintenance, operating expenses and real estate taxes applicable to the property.

Certain leases require variable payments of common area maintenance, operating expenses and real estate taxes applicable to the property.

Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred.

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Capitalized hosting arrangements are stated at historical cost and amortized on a straight-line basis over an estimated useful life of the expected term of the hosting arrangement, taking into consideration several other factors such as, but not limited to, options to extend the hosting arrangement or options to terminate the hosting arrangement.

The amortization of capitalized implementation costs for hosting arrangements will commence when the systems are ready for their intended use and will be presented as operating expenses on the Company’s Consolidated Statements of Operations consistent with the presentation for expensing the fees for the associated hosting arrangement.

The amortization of capitalized

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implementation costs for hosting arrangements will commence when the systems are ready for their intended use and will be presented as operating expenses on the Company’s Consolidated Statements of Operations consistent with the presentation for expensing the fees for the associated hosting arrangement.

As of May 31, 2025 and May 25, 2024, the capitalized costs related to hosting arrangements incurred during the application development stage were $ 20.8 million and $ 16.1 million, respectively.

These capitalized hosting arrangements are included in other non-current assets on the Consolidated Balance Sheets.

During the year ended May 25, 2024, there was less than $ 0.2 million of amortization.

These capitalized hosting arrangements are included in current and other non-current assets on the Consolidated Balance Sheets.

During the years ended May 31, 2025 and May 25, 2024, amortization was $ 1.8 million and less than $ 0.2 million, respectively.

No costs were amortized during the year ended May 27, 2023.

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Share Repurchases and Retirement of Treasury Shares

The Company’s stock repurchase program authorizes the Company to repurchase shares at the discretion of the Company’s senior executives based on numerous factors, including, without limitation, share price and other market conditions, the Company’s ongoing capital allocation planning, the levels of cash and debt balances, and other demands for cash.

The Company’s stock repurchase programs authorize the Company to repurchase shares at the discretion of the Company’s senior executives based on numerous factors, including, without limitation, share price and other market conditions, the Company’s ongoing capital allocation planning, the levels of cash and debt balances, and other demands for cash.

The Company records the shares repurchased as treasury stock based on the amount paid to repurchase its shares.

Direct costs incurred to acquire treasury stock are treated like stock issue costs and added to the cost of the treasury stock.

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The Company accounts for the retirement of treasury shares using the par-value method under which the cost of repurchased and retired treasury shares in excess of the par value is allocated between additional paid-in capital and retained earnings.

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The Company uses the weighted-average cost flow assumption to identify and assign the original issue proceeds to the cost of the repurchased and retired treasury shares.

The Company believes that this allocation method is preferable

because it more accurately reflects its paid-in capital balances by allocating the cost of the repurchased and retired treasury shares to paid-in capital in proportion to paid-in capital associated with the original issuance of those shares.

The Company believes that this allocation method is preferable because it more accurately reflects its paid-in capital balances by allocating the cost of the repurchased and retired treasury shares to paid-in capital in proportion to paid-in capital associated with the original issuance of those shares.

See Note 12 — Stockholders’ Equity for further information on the repurchase of shares.

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Recently Issued Accounting Guidance

On December 14, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses requiring disaggregated disclosure of certain expense captions into specified categories in the notes to financial statements on an annual and interim basis.

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with updates to be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company expects to adopt this guidance in its fiscal year beginning May 30, 2027.

The Company is evaluating the potential impact of this guidance on its financial statement disclosures.

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

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The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is evaluating the potential impact of this guidance on its financial statement disclosures.

On November 27, 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280):

The Company has adopted ASU 2023-09 for fiscal year 2026, which began on June 1, 2025, and is in the process of implementing the related disclosure requirements.

Recently Adopted Accounting Guidance

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

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This guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

The Company is evaluating the potential impact of this guidance on its financial statement disclosures.

Recently Adopted Accounting Guidance

On October 9, 2023, FASB issued ASU 2023-06, Disclosure Improvements.

The effective date for the ASU is immediately after the new Accounting Standards Codification (“ASC”) 260, Earnings Per Share is updated.

The Company adopted the guidance effective with the quarter ending November 25, 2023 and prior periods to the date of adoption are presented in accordance with ASC 260 – Earnings Per Share.

The Company adopted this guidance in the fiscal year ending May 31, 2025.

For additional information, refer to Note 18 – Segment Information and Enterprise Reporting .

Other recent changes in authoritative accounting pronouncements did not, or are not expected to, have a materially significant effect on the Company’s consolidated financial statements.

Acquisitions and Dispositions

Acquisition of Reference Point

On July 1, 2024, the Company entered into an Amended and Restated Membership Interest Purchase Agreement (the “Reference Point MIPA”) with Reference Point LLC (“Reference Point”) and the holder of all the outstanding membership interests of Reference Point LLC, in which the Company acquired 100 % of the membership interests of Reference Point.

Reference Point is a strategy, management, and technology consulting firm serving the financial services sector across four areas of focus:

Strategy & Management, Risk & Regulatory Compliance, Digital & Technology and Data & Analytics.

The Company paid cash consideration of $ 23.2 million (net of $ 0.2 million cash acquired).

Results of operations of Reference Point are included within the Consulting Services operating segment in the Consolidated Statements of Operations from the date of acquisition.

Reference Point contributed $ 16.1 million of revenue and $ 1.9 million of operating income to the Consolidated Statements of Operations during the year ended May 31, 2025.

During the year ended May 31, 2025, the Company recognized approximately $ 2.8 million of acquisition-related costs in connection with the acquisition of Reference Point that were recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

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In accordance with ASC 805 Business Combinations , the Company made an initial provisional allocation of the purchase price for Reference Point based on the fair value of the assets acquired and liabilities assumed, with the residual amount recorded as goodwill.

The Company’s purchase price allocation considered a number of factors, including the valuation of identifiable intangible assets.

In connection with this acquisition, the Company recorded total intangible assets consisting of $ 14.4 million for customer relationships (to be amortized over 12 years), $ 0.7 million related to a non-compete agreement (to be amortized over 5 years) and $ 0.6 million for trade name (to be amortized over 1 year).

The Company also recorded $ 6.9 million of goodwill, which is expected to be deductible for tax purposes.

The goodwill is attributable primarily to expected synergies and the assembled workforce of Reference Point.

The following table summarizes the consideration for the acquisition of Reference Point and the amounts of the identified assets acquired and liabilities assumed at the acquisition date:

Fair value of consideration transferred (in thousands):

Cash $ 23,417

Recognized provisional amounts of identifiable assets acquired and liabilities assumed (in thousands):

Cash and cash equivalents $ 248

Trade accounts receivable (1) 2,013

Prepaid expenses and other current assets 52

Intangible assets 15,720

Property and equipment 28

Other non-current assets 63

Total identifiable assets 18,124

Accounts payable and other accrued expenses 47

Accrued salaries and related obligations 988

Other liabilities 527

Total liabilities assumed 1,562

Net identifiable assets acquired 16,562

Goodwill 6,855

Net assets acquired $ 23,417

(1) As of the acquisition date, the gross contractual amount of accounts receivable of $ 2.0 million was expected to be fully collected, and was fully collected during fiscal 2025.

The weighted-average useful life of all Reference Point's intangible assets is 11.3 years.

Acquisition of CloudGo

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The preliminary fair value of the contractual obligation to pay the contingent consideration amounted to $ 4.4 million.

Due to a revision in the Company's estimate in the fourth quarter of fiscal 2024, the Company decreased the fair value of the CloudGo contingent consideration liability to zero as of May 25, 2024.

Due to a revision in the Company's estimate in the fourth quarter of fiscal 2024, the Company decreased the fair value of the CloudGo contingent consideration liability to zero .

The Company has concluded that a fair value of zero for the contingent consideration liability as of May 31, 2025 was appropriate.

The estimate of fair value of contingent consideration liability requires assumptions to be made of various levels of potential revenue and operating profit performance as well as discount rates.

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Results of operations of CloudGo are included in the Consolidated Statements of Operations from the date of acquisition.

CloudGo contributed $ 4.2 million of revenue to the consolidated results of operations during the year ended May 25, 2024 post close of the transaction.

During the year ended May 25, 2024, the Company incurred $ 2.0 million of

acquisition related costs in connection with the acquisition of CloudGo and Reference Point .

Results of operations of CloudGo are included within the Consulting Services operating segment in the Consolidated Statements of Operations from the date of acquisition.

CloudGo contributed $ 6.5 million and $ 4.2 million of revenue to the consolidated results of operations during the years ended May 31, 2025 and May 25, 2024, respectively.

During the year ended May 25, 2024, the Company recognized approximately $ 2.0 million of acquisition-related costs in connection with the acquisition of CloudGo .

Such costs were recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

In accordance with ASC 805, the Company made an initial provisional allocation of the purchase price for CloudGo based on the fair value of the assets acquired and liabilities assumed, with the residual amount recorded as goodwill.

The Company’s provisional purchase price allocation considered a number of factors, including the valuation of identifiable intangible assets.

In connection with this acquisition, the Company provisionally recorded total intangible assets consisting of $ 3.1 million for customer relationships (to be amortized over 9 to 12 years).

The Company also provisionally recorded $ 9.6 million of goodwill.

In accordance with ASC 805 Business Combinations , the Company made an allocation of the purchase price for CloudGo based on the fair value of the assets acquired and liabilities assumed, with the residual amount recorded as goodwill.

The Company’s purchase price allocation considered a number of factors, including the valuation of identifiable intangible assets.

In connection with this acquisition, the Company recorded total intangible assets consisting of $ 3.1 million for customer relationships (to be amortized over 9 to 12 years).

The Company also recorded $ 9.6 million of goodwill.

The goodwill is attributable primarily to expected synergies and the assembled workforce of CloudGo.

The following table summarizes the consideration for the acquisition of CloudGo and the provisional amounts of the identified assets acquired and liabilities assumed at the acquisition date:

The following table summarizes the consideration for the acquisition of CloudGo and the amounts of the identified assets acquired and liabilities assumed at the acquisition date:

Fair value of consideration transferred (in thousands):

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Total $ 12,153

Recognized provisional amounts of identifiable assets acquired and liabilities assumed (in thousands):

Recognized amounts of identifiable assets acquired and liabilities assumed (in thousands):

Cash and cash equivalents $ 342

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(1) As of the acquisition date, the gross contractual amount of accounts receivable of $ 0.8 million was expected to be fully collected, and was subsequently collected.

The purchase price allocation described above is preliminary with respect to the valuation of intangible assets acquired, goodwill, tax related matters, and the amount of contingent consideration.

A final determination of fair value of assets acquired and liabilities assumed relating to the acquisition could differ from the preliminary purchase price allocation.

The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

The weighted-average useful life of CloudGo’s customer relationships and intangible assets is approximately 10.9 years.

Sale of taskforce

On April 21, 2022, RGP Germany entered into a Sale and Purchase Agreement (the “ taskforce SPA”) to sell its business in taskforce to MoveVision – Management-, Beteiligungs- und Servicegesellschaft mbH and Blue Elephant – Management-, Beteiligungs- und Servicegesellschaft mbH (collectively, the “Purchasers”), which are owned by the original founder and a member of the senior leadership team of taskforce , respectively.

The taskforce SPA provided for the sale of all of the shares of taskforce from RGP Germany to the Purchasers for a purchase price of approximately EUR 5.5 million, subject to final working capital adjustments, with 50 % of the consideration to be paid in cash in connection with the closing and the remaining 50 % payable on July 1, 2024 and bearing interest based on the Company’s average borrowing interest rate plus 285 basis points, compounded annually.

On May 31, 2022, the Company completed the sale of taskforce .

Upon conclusion of the Final Completion Accounts and Calculation (as defined in the taskforce SPA), the final purchase price was determined to be EUR 5.5 million (approximately $ 6.0 million), of which EUR 2.8 million (approximately $ 3.0 million) was received in cash and EUR 2.7 million (approximately $ 3.0 million) should become due in July 2024 in accordance with the taskforce SPA.

During fiscal year 2023, the Company received full payment from the purchasers of taskforce on the note receivable in the amount of EUR 2.7 million (approximately $ 3.0 million), which included an interest payment.

The Company recognized a $ 0.2 million gain on the sale during the year ended May 27, 2023, which was recorded in other income in the Company’s Consolidated Statements of Operations.

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During fiscal 2023, the Company completed the dissolution of the following three foreign subsidiaries:

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The Company recognized a total net loss on dissolutions of $ 0.5 million during fiscal 2023.

As part of its restructuring effort in Europe which began in fiscal 2021, the Company initiated the wind-down and dissolution of certain entities.

During fiscal 2022, the Company completed the dissolution of the following three foreign subsidiaries:

RGP France SAS, RGP Denmark A/S, and RGP Italy SRL, as it continued to complete its exit from certain non-core markets in Europe.

The Company recognized a total gain on dissolutions of $ 0.9 million during fiscal 2022.

The net gain or loss on the dissolutions of these subsidiaries in both fiscal years was primarily related to the recognition of the accumulated translation adjustment associated with the foreign subsidiaries, which was reclassified from accumulated other comprehensive loss in the Company’s Consolidated Balance Sheet and included in selling, general and administrative expenses in the Company’s Consolidated Statement of Operations for the year ended May 27, 2023 and May 28, 2022, respectively.

See Note 14 – Restructuring Activities for further information on the Company’s restructuring initiatives.

None of the markets sold or exited in fiscal 2023 and 2022 were considered strategic components of the Company’s operations.

This net loss was primarily related to the recognition of the accumulated translation adjustment associated with the foreign subsidiaries, which was reclassified from accumulated other comprehensive loss in the Company’s Consolidated Balance Sheet and included in selling, general and administrative expenses in the Company’s Consolidated Statement of Operations for the year ended May 27, 2023.

None of the markets sold or exited in fiscal 2023 were considered strategic components of the Company’s operations.

Assets and Liabilities Held for Sale

As of February 24, 2024, the Company determined the asset groups associated with its corporate office in Irvine, California met the criteria of held for sale, since the Company intends to complete the sale of these assets within the twelve months following the end of the third quarter of fiscal 2024.

As of February 24, 2024, the Company determined the asset groups associated with its former corporate office in Irvine, California met the criteria of held for sale, since the Company intended to complete the sale of these assets within the twelve months following the end of the third quarter of fiscal 2024.

Accordingly, the related assets classified as held for sale are separately presented in our Consolidated Balance Sheets as of May 25, 2024.

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Total assets held for sale, net $ 8,909

The Company entered into a Purchase and Sale Agreement dated May 15, 2024, and as amended and restated as of May 20, 2024, with a third-party buyer for the sale of its Irvine Building for a total purchase price of $ 13.0 million.

The anticipated closing date for the sale of the property is August 15, 2024.

The Company entered into a Purchase and Sale Agreement dated May 15, 2024, and as amended and restated as of May 20, 2024, with a third-party buyer for the sale of its Irvine building.

In August 2024, the Company completed the sale for total consideration of $ 13.0 million, resulting in a net gain of $ 3.4 million.

The sale does not constitute a discontinued operation.

As such, the gain has been recorded as a reduction of selling, general, and administrative expenses in the Consolidated Statement of Operations for the year ended May 31, 2025.

Goodwill and Intangible Assets

There were no impairments during the fiscal years ended May 25, 2024 and May 28, 2022.

During the third quarter of fiscal 2023, the Company completed an interim goodwill impairment analysis for Sitrick, a strategic and crisis communications business acquired in 2009.

Many of Sitrick’s target clients were impacted by the initial closures of U.S.

courts during the COVID-19 pandemic (the “Pandemic”) and the continued lingering impact on the court system despite the reopening, resulting in less opportunities and a slower revenue conversion typically provided by Sitrick.

The Company determined that the carrying value of Sitrick, also a reporting unit, was in excess of its fair value and recorded a non-cash impairment charge of $ 3.0 million during the third quarter of fiscal 2023.

As described in Note 2 – Summary of Significant Accounting Policies , the Company performs its annual impairment test for goodwill impairment in the fourth quarter, unless indicators of impairment exist, the Company will perform interim quantitative goodwill impairment analysis more frequently.

As a result of impairment indicators related to business performance and decline in share price throughout the fiscal year, the Company performed four interim quantitative goodwill impairment assessments for its reporting units, each of which is also a reporting segment, and recorded an aggregate impairment charge of $ 194.4 million for fiscal 2025.

During the year ended May 25, 2024, the Company performed an annual goodwill impairment on its reporting units and elected to perform a quantitative goodwill impairment analysis.

As a result of the quantitative impairment test performed on February 25, 2024, the Company concluded that there was no goodwill impairment.

There were no changes in facts, circumstances or events from February 25, 2024 through May 25, 2024, the end of the fiscal year, that would give rise to modifying the conclusion regarding goodwill impairment assessment or require further testing,

During the year ended May 27, 2023, the Company completed an interim goodwill impairment analysis in the third fiscal quarter for Sitrick, which is included in Other Segments.

Many of Sitrick’s target clients were impacted by the

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initial closures of U.S.

courts during the COVID-19 pandemic and the continued lingering impact on the court system despite the reopening, resulting in less opportunities and a slower revenue conversion typically provided by Sitrick.

The Company determined that the carrying value of Sitrick, also a reporting unit, was in excess of its fair value and recorded a non-cash impairment charge of $ 3.0 million.

This impairment reduced the goodwill within the Other Segments to zero as of May 27, 2023.

See Note 2 – Summary of Significant Accounting Policies for further information.

The following table summarizes the activity in the Company’s goodwill balance (in thousands):

RGP Other Segments Total Company

The Company’s determination of the estimated fair value may be based on the market-based approach, the income-based approach or a combination of both approaches.

Additionally, the present value was based on applying a weighted average cost of capital, which considered long-term interest rates and cost of equity based on the reporting segment’s risk profile.

As part of the goodwill impairment test, the Company reconciled the aggregated estimated fair value of the Company's operating segments to the Company’s market capitalization, including consideration of any asymmetry in information, and control premium representing the estimated amount a market participant would pay to obtain a controlling interest in the Company.

Fourth Quarter 2025 Interim Impairment Assessments

During the fourth quarter of fiscal 2025, and subsequent to the Company's annual impairment test date, a decrease in market capitalization and slow business recovery in the Consulting segment triggered a goodwill impairment assessment.

Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with associated goodwill, the Company determined that the carrying value of the Consulting segment exceeded its fair value by $ 58.8 million.

In addition to recording this excess as a goodwill impairment charge, the Company also recorded a $ 10.2 million charge related to the deferred tax impacts from the excess carrying value.

The Company therefore recorded an aggregate of $ 69.0 million in goodwill impairment charges for the Consulting segment.

Third Quarter 2025 Interim Impairment Assessments

During the third quarter of fiscal 2025, slow business recovery in the On-Demand Talent and Consulting segments triggered a goodwill impairment assessment.

Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with associated goodwill, the Company determined that the carrying values of On-Demand Talent and Consulting segments exceeded their fair values.

As a result, a non-cash goodwill impairment charge of $ 42.0 million was recorded, comprised of excess in carrying value over fair value of $ 12.4 million for On-Demand Talent and $ 24.8 million for Consulting, as well as a $ 4.8 million related to deferred tax impacts from the charge recorded in the Consulting segment.

Second Quarter 2025 Interim Impairment Assessments

During the second quarter of fiscal 2025, a decrease in market capitalization and slower-than-expected recovery in the On-Demand Talent and Europe and Asia Pacific segments triggered a goodwill impairment assessment.

Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with goodwill, the Company determined that the carrying values of On-Demand Talent and Europe and Asia Pacific segments exceeded their fair values.

As a result, a non-cash goodwill impairment charge of $ 79.5 million was recorded, comprised of the excess in carrying value over fair value of $ 48.4 million for On-Demand Talent and $ 21.7 million for Europe and Asia Pacific, as well as $ 9.3 million related to deferred tax impacts from the charges recorded in the On-Demand Talent segment.

First Quarter 2025 Interim Impairment Assessments

During the first quarter of fiscal 2025, concurrent with the change in the Company’s operating segments, which were aligned to the Company’s reporting units and reportable segments, the Company allocated goodwill to each of its reporting units under the new organizational structure on a relative fair value basis.

The Company estimated the fair values of the reporting units based on the income-based approach.

As a result, a non-cash goodwill impairment charge of $ 3.9 million was recorded for the excess in carrying value over fair value of the Europe and Asia Pacific segment.

In performing the goodwill impairment assessments, the Company considers the assumptions used in determining the estimated fair values of its reporting units to be reasonable and appropriate.

However, the assumptions are complex and

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subjective, and additional adverse changes in a key assumption or a combination of key assumptions may significantly affect the Company’s assessment of the fair value and goodwill impairment.

These assumptions include, among other things, a failure to meet expected earnings or other financial plans;

changes in the discount rate, the terminal growth rate or tax rates;

or significant changes in industry or economic trends.

If the assumptions noted above adversely change, negative macroeconomic conditions worsen or the Company’s market capitalization decreases for a sustained period of time, the Company may be required to perform an additional impairment analysis that could result in additional impairment charges and materially adversely affect the Company’s financial condition and results of operations.

The following table summarizes the activity in the Company’s goodwill balance.

The balance as of May 25, 2024 was recast to reflect the impact of the Company's change in segment reporting and the final fair value allocation of the reporting units that became effective during the first quarter of fiscal 2025 (in thousands):

On-Demand Talent Consulting Europe & Asia Pacific Outsourced Services All Other Total

Balance as of May 27, 2023

Goodwill impairment - ( 2,955 ) ( 2,955 )

$ 70,202 $ 82,115 $ 25,648 $ 28,757 $ - $ 206,722

Acquisition (see Note 3)

- 9,637 - - - 9,637

Impact of foreign currency exchange rate changes - 18 202 - - 220

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Acquisition (see Note 3) - 6,855 - - - 6,855

Goodwill Impairment ( 70,202 ) ( 98,625 ) ( 25,582 ) - - ( 194,409 )

Impact of foreign currency exchange rate changes - - ( 268 ) - - ( 268 )

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- - - 7,870 ( 6,539 ) 1,331

Trade names 1 year

600 ( 550 ) 50 - - -

Non-Compete Agreements 5 years

720 ( 132 ) 588 - - -

Total $ 40,820 $ ( 21,842 ) $ 18,978 $ 32,970 $ ( 23,397 ) $ 9,573

The weighted-average useful lives of the customer contracts and relationships, and computer software are approximately 5.0 years, and 2.5 years, respectively.

The weighted-average useful life of all of the Company’s intangible assets is 4.6 years.

The remaining weighted-average useful life of all of the Company’s intangible assets is approximately 4.7 years.

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For the year ended May 31, 2025, the Company determined that the computer software component of its intangible assets no longer provides future economic benefit and recorded a $ 0.4 million charge to write-off the unamortized asset.

The Company recorded amortization expense of $ 5.9 million, $ 5.4 million, and $ 5.0 million for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively.

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Fiscal Years:

2030 and thereafter $ 10,024

Total $ 18,978

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May 31, 2025 As of

Building and land $ — $ 14,309

Computers, equipment and software 6,859 8,303

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Property and equipment, net $ 4,423 $ 3,763

On February 24, 2024, the Company determined the asset groups associated with the corporate office in Irvine, California met the criteria of held for sale.

On February 24, 2024, the Company determined the asset groups associated with its former corporate office in Irvine, California met the criteria of held for sale.

As a result, the Company transferred such asset groups previously used in operations to assets held for sale in its Consolidated Balance Sheet as of May 25, 2024.

The Company's corporate office in Irvine, California was subsequently sold in August 2024.

See Note 4 - Assets and Liabilities Held for Sale for more information.

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Total lease cost $ 8,058 $ 8,318 $ 8,123

(1) Sublease income does not include rental income received from owned property.

(1) Sublease income represents rental income received by the Company as sublessor.

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Following the sale of the building in Irvine, California, on August 1, 2024, the Company entered into a lease agreement for an office space in Irvine.

The lease commenced on November 1, 2024 and has an expiration date of June 30, 2032.

See Note 4 – Assets Held for Sale for further discussion.

The average annual rent for the lease term will be $ 0.7 million.

On December 20, 2023, the Company entered into a lease agreement for an office space in New York that commenced on July 1, 2024 with an expiration date of July 31, 2034.

The annual fixed rent for the first five years and the last five years are $ 1.2 million and $ 1.3 million respectively.

The weighted-average lease terms and discount rates for operating leases are presented in the following table:

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Present value of operating lease liabilities $ 25,305

The Company, as a lessor, leases approximately 13,000 square feet of the approximately 57,000 square feet of a company-owned building located in Irvine, California to independent third parties and has operating lease agreements for sublet space with independent third parties expiring in fiscal 2025.

Rental income received for the years ended May 25, 2024, May 27, 2023 and May 28, 2022 totaled $ 142,000 , $ 195,000 and $ 199,000 , respectively.

Under the terms of these operating lease agreements, rental income from such third-party leases is expected to be $ 8,344 in fiscal 2025.

The Company owned no assets that it leases to third-parties, as a lessor, at May 31, 2025.

Prior to the sale of the company-owned building located in Irvine, California to independent third parties, as described in Note 4 – Assets Held for Sale, the Company, as lessor, had operating lease agreements for office space with independent third parties for which it received rental income during the years ended May 31, 2025, May 25, 2024 and May 27, 2023 totaling $ 8,000 , $ 142,000 and $ 195,000 , respectively.

The terms of those operating lease agreements were terminated upon the sale of the building.

Long-Term Debt

On November 12, 2021, the Company and Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors entered into a credit agreement with the lenders that are party thereto and Bank of America, N.A.

as administrative agent for the lenders (the “Credit Agreement”), and concurrently terminated the then existing credit facility, which provided a $ 120.0 million revolving loan.

The Credit Agreement provides for a $ 175.0 million senior secured revolving loan (the “Credit Facility”), which includes a $ 10.0 million sublimit for the issuance of standby letters of credit and a swingline sublimit of $ 20.0 million.

The Credit Facility also includes an option to increase the amount of the revolving loan up to an additional $ 75.0 million, subject to the terms of the Credit Agreement.

The Credit Facility matures on November 12, 2026.

The obligations under the Credit Facility are secured by substantially all assets of the Company, Resources Connection LLC and all of the Company’s domestic subsidiaries.

Future borrowings under the Credit Facility bear interest at a rate per annum of either, at the Company’s election, (i) Term SOFR (as defined in the Credit Agreement) plus a margin ranging from 1.25 % to 2.00 % or (ii) the Base Rate (as defined in the Credit Agreement), plus a margin of 0.25 % to 1.00 % with the applicable margin depending on the Company’s consolidated leverage ratio.

In addition, the Company pays an unused commitment fee on the average daily unused portion of the Credit Facility, which ranges from 0.20 % to 0.30 % depending upon the Company’s consolidated leverage ratio.

The Credit Agreement 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 Credit Agreement requires the Company to comply with financial covenants including limitations on the Company’s total funded debt, minimum interest coverage ratio and maximum leverage ratio.

The Company was compliant with all financial covenants under the Credit Agreement as of May 25, 2024.

Prior to July 2, 2025, the Company had a revolving credit facility with Bank of America, pursuant to the terms of the credit Agreement dated November 12, 2021 by the Company and Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, with the lenders that are party thereto and Bank of America, N.A.

as administrative agent for the lenders (the “2021 Credit Facility”).

The 2021 Credit Facility provided for a $ 175.0 million senior secured revolving loan, which included a $ 10.0 million sublimit for the issuance of standby letters of credit and a swingline sublimit of $ 20.0 million.

The 2021 Credit Facility also included an option to increase the amount of the revolving loan up to an additional $ 75.0 million, subject to the terms of the 2021 Credit Facility.

The 2021 Credit Facility was originally set to mature on November 12, 2026;

however it was terminated on July 2, 2025 in connection with a new credit agreement entered into between the Company, and Resources Connection LLC, as borrowers, and all of the

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Company’s domestic subsidiaries, as guarantors, with the lenders that are party thereto and Bank of America, N.A.

as administrative agent for the lenders (the “New Credit Facility”).

See Note 19 - Subsequent Events for further discussion.

The obligations under the 2021 Credit Facility were secured by substantially all assets of the Company, Resources Connection LLC and all of the Company’s domestic subsidiaries.

On December 31, 2024 and March 28, 2025, the parties then entered into amendments to the 2021 Credit Agreement (collectively, the “Fiscal 2025 Amendments”) to waive the Company's non-compliance with a financial covenant related to the consolidated interest coverage ratio under the Credit Agreement due to the goodwill impairment recognized during the second and third quarters of fiscal 2025, respectively.

The Fiscal 2025 Amendments also amended certain definitions under the Credit Agreement to exclude the impact of goodwill impairments recognized in the first, second, and third quarters of fiscal 2025.

As of May 31, 2025 and May 25, 2024, the Company had no debt outstanding under the 2021 Credit Facility.

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( 6,255 ) 532 ( 10,326 )

Income tax expense $ 8,795 $ 18,259 $ 15,793

Income before income tax expense is as follows (in thousands):

Income tax expense (benefit) $ ( 4,295 ) $ 8,795 $ 18,259

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Income (loss) before income tax expense (benefit) is as follows (in thousands):

For the Years Ended

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Foreign ( 14,342 ) 6,745 11,783

Income before income tax expense $ 29,829 $ 72,618 $ 82,968

Income (loss) before income tax expense (benefit) $ ( 196,075 ) $ 29,829 $ 72,618

The income tax expense (benefit) differs from the amount that would result from applying the federal statutory rate as follows:

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international tax impact, net of credits

Worthless stock deduction - - ( 3.2 )

FIN48 0.2 0.1 -

( 0.3 ) 0.9 0.4

Contingent consideration

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Capital loss carryforward

Goodwill impairment

Permanent items ( 0.2 ) 2.5 0.3

Tax impact of foreign rate changes 0.2 ( 0.4 ) ( 0.2 )

Return-to-provision & other adjustments 0.1 ( 0.5 ) ( 1.6 )

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Effective tax rate 2.2 % 29.5 % 25.1 %

(1) Our current year rate primarily benefited from the nontaxable income on the reversal of CloudGo's contingent liability, a foreign exchange loss as a result of the repatriation of funds from our Japan subsidiary and the benefit of the capital loss carryforward, partially offset with a valuation allowance as a result of the pending sale of the Company’s Irvine building.

The impact of state taxes, net of federal benefit, and foreign income taxed at other than U.S.

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tax effects of global intangible low-taxed income as a component of income tax expense in the period it arises.

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The components of the net deferred tax asset (liability) consist of the following (in thousands):

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Property and equipment 520 782

Goodwill and intangibles

Gross deferred tax asset 44,424 34,185

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We have considered the applicability of the CAMT and determined that it does not have a material impact on our consolidated financial statements in fiscal 2025.

The Company recognized a tax benefit of approximately $ 1.3 million, $ 2.1 million and $ 2.0 million for the years ended May 25, 2024, May 27, 2023 and May 28, 2022, respectively, associated with the exercise of nonqualified stock options, vesting of restricted stock awards, restricted stock units, and disqualifying dispositions by employees of shares acquired under the ESPP.

The Company has tax-effected foreign net operating loss carryforwards of $ 17.3 million ($ 69.7 million on a gross basis), tax-effected state net operating loss carryforwards of $ 0.4 million, capital loss carryforwards of $ 2.3 million, and foreign tax credit carryforwards of $ 0.5 million.

The Company recognized a tax benefit of approximately $ 1.5 million, $ 1.3 million and $ 2.1 million for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively, associated with the exercise of nonqualified stock options, vesting of restricted stock awards, restricted stock units, performance-based stock units, and disqualifying dispositions by employees of shares acquired under the Company's Employee Stock Purchase Plan.

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The Company has tax-effected foreign net operating loss carryforwards of $ 18.9 million ($ 76.1 million on a gross basis), tax-effected federal net operating loss carryforwards of $ 0.1 million, tax-effected state net operating loss carryforwards of $ 0.7 million, capital loss carryforwards of $ 1.6 million, and foreign tax credit carryforwards of $ 0.3 million.

The federal net operating loss is carried forward indefinitely, but it may only reduce 80 % of taxable income in a carryforward tax year.

The state net operating loss carryforwards will expire beginning in fiscal 2030, the capital loss carryforwards will expire in fiscal 2028, and the foreign tax credits will expire beginning in fiscal 2028.

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Realization of deferred tax assets is dependent upon generating sufficient future taxable income of the appropriate character.

Management believes that it is more likely than not that all remaining deferred tax assets will be realized through future taxable earnings or alternative tax strategies.

Management believes that it is more likely than not that all remaining deferred tax assets will be realized through future taxable earnings.

Given the current economic outlook, management believes there is a reasonable possibility that within the next 12 months, sufficient evidence may become available to allow it to reach a conclusion to establish or release a valuation allowance on the deferred tax assets of certain foreign entities.

We repatriated $ 2.9 million from our Japan subsidiary during the year ended May 31, 2025.

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The Company’s total liability for unrecognized gross tax benefits was $ 1.1 million, $ 1.0 million and $ 1.0 million as of May 31, 2025, May 25, 2024 and May 27, 2023, respectively, which, if ultimately recognized, any differences in assessment or non-assessment would impact the effective tax rate in future periods.

The unrecognized tax benefits are included in long-term liabilities in the Consolidated Balance Sheets.

The unrecognized tax benefits are

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included in long-term liabilities in the Consolidated Balance Sheets.

None of the unrecognized tax benefits are short-term liabilities as management does not anticipate any cash payments within 12 months to settle the liability.

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During the fiscal years ended May 31, 2025, May 25, 2024 and May 27, 2023, the Company accrued interest of $ 82,000 , $ 71,000 and $ 54,000 , respectively, as a component of the liability for unrecognized tax benefits.

The Company's cumulative accrued interest was $ 267,000 , $ 185,000 and $ 114,000 as of May 31, 2025, May 25, 2024 and May 27, 2023, respectively.

Accrued Salaries and Related Obligations

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No single client accounted for more than 10% of revenue for the years ended May 31, 2025, May 25, 2024 and May 27, 2023.

No single client accounted for more than 10% of trade accounts receivable as of May 25, 2024 and one single client accounted for more than 10% of trade accounts receivable as of May 27, 2023.

No single client accounted for more than 10% of trade accounts receivable as of May 31, 2025, or May 25, 2024.

Stockholders’ Equity

Stock Repurchase Program

The Company’s Board of Directors has periodically approved a stock repurchase program authorizing the repurchase, at the discretion of the Company’s senior executives, of the Company’s common stock for a designated aggregate dollar limit.

The current program was authorized in July 2015 (the “July 2015 Program”) and set an aggregate dollar limit not to exceed $ 150 million.

Subject to the aggregate dollar limit, the currently authorized stock repurchase program does not have an expiration date.

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.

The Company’s Board of Directors has previously approved two stock repurchase programs authorizing the repurchase, at the discretion of the Company’s senior executives, of the Company’s common stock for a designated aggregate dollar limit.

In July 2015, the first program was authorized for an aggregate dollar limit not to exceed $ 150 million, and in October 2024, the second program was authorized for an additional dollar limit not to exceed $ 50 million (collectively, the “Stock Repurchase Programs”).

Subject to the aggregate dollar limits, the currently authorized Stock Repurchase Programs do not have an expiration date.

Repurchases under the programs 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 years ended May 31, 2025 and May 25, 2024, respectively, the Company purchased 1,382,820 and 606,254 shares of its common stock on the open market at an average price of $ 9.40 and $ 13.20 per share, for an aggregate total purchase price of approximately $ 13.0 million and $ 8.0 million.

As of May 25, 2024, approximately $ 42.2 million remained available for future repurchases of the Company’s common stock under the July 2015 Program.

As of May 31, 2025, approximately $ 79.2 million remained available for future repurchases of the Company’s common stock under the Stock Repurchase Programs.

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Quarterly Dividend

Subject to approval each quarter by its Board of Directors, the Company pays a regular dividend.

On April 18, 2024, the Board of Directors declared a regular quarterly dividend of $ 0.14 per share of the Company’s common stock.

The dividend was paid on June 13, 2024 to stockholders of record at the close of business on May 16, 2024.

As of May 25, 2024 and May 27, 2023, approximately $ 4.7 million was accrued and recorded in other current liabilities in each of the Company’s Consolidated Balance Sheets for dividends declared but not yet paid.

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 Company’s current credit agreements and other agreements, and other factors deemed relevant by the Board of Directors.

On April 29, 2025, the Board of Directors approved a regular quarterly dividend of $ 0.07 per share of the Company’s common stock.

The dividend was paid on July 21, 2025 to stockholders of record at the close of business on June 23, 2025.

As of May 31, 2025 and May 25, 2024, approximately $ 2.3 million and $ 4.7 million was accrued and recorded in other current liabilities in each of the Company’s Consolidated Balance Sheets for dividends declared but not yet paid.

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 Company’s current credit agreements and other agreements, and other factors deemed relevant by the Board of Directors.

Revenue Recognition

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Contract assets represent the Company’s rights to consideration for completed performance under the contract (e.g., unbilled receivables), in which the Company has transferred control of the product or services before there is an unconditional right to payment.

Contract assets were $ 29.3 million and $ 35.4 million as of May 25, 2024 and May 27, 2023, respectively, which were included in trade accounts receivable in the Consolidated Balance Sheets.

Contract assets were $ 30.7 million, $ 29.3 million, and $ 35.4 million as of May 31, 2025, May 25, 2024, and May 27, 2023, respectively, which were included in trade accounts receivable in the Consolidated Balance Sheets.

Contract liabilities represent deferred revenue when cash is received in advance of performance and are presented in other liabilities in the Consolidated Balance Sheets.

Contract liabilities were $ 3.5 million and $ 3.1 million as of May 25, 2024 and May 27, 2023, respectively.

Contract liabilities were $ 4.3 million, $ 3.5 million, and $ 3.1 million as of May 31, 2025, May 25, 2024, and May 27, 2023, respectively.

Revenues recognized during the year ended May 31, 2025 that were included in deferred revenues as of May 25, 2024 were $ 1.9 million.

Revenues recognized during the year ended May 25, 2024 that were included in deferred revenues as of May 27, 2023 were $ 2.5 million.

Revenues recognized during the year ended May 27, 2023 that were included in deferred revenues as of May 28, 2022 were $ 3.0 million.

Restructuring Activities

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The Company incurred employee termination costs of $ 4.1 million associated with the U.S.

Restructuring Plan within its RGP segment during the year ended May 25, 2024, and were recorded in selling, general and administrative expenses in its Consolidated Statements of Operations.

Restructuring Plan within its RGP segment during the year ended May 25, 2024, which were recorded in selling, general and administrative expenses in its Consolidated Statements of Operations.

Restructuring Plan was substantially completed during the year ended May 25, 2024.

The Restructuring adjustments and costs were $( 0.4 ) million and $ 0.8 million for the year ended May 27, 2023 and May 28, 2022, respectively, related to restructuring efforts in previous fiscal years.

Restructuring liability recorded in accounts payable and accrued expenses in the Consolidated Balance Sheet was $ 0.8 million and zero as of May 25, 2024 and May 27, 2023, respectively.

The Restructuring adjustments and costs of $( 0.4 ) million for the year ended May 27, 2023 related to restructuring efforts in previous fiscal years.

In December, 2024, the Company authorized a global cost reduction plan, including a reduction in force (the “2025 Restructuring Plan”) intended to reduce costs and streamline operations.

In May 2025, the Company authorized additional global cost reductions.

The 2025 Restructuring Plan resulted in a reduction of force of the Company’s global management and administrative workforce.

The Company incurred employee termination costs associated with the 2025 Restructuring Plan, which were recorded in selling, general and administrative expenses in its Consolidated Statements of Operations.

Restructuring costs were $ 5.1 million for the year ended May 31, 2025 .

The restructuring liability was nominal and $ 0.8 million as of May 31, 2025 and May 25, 2024, respectively.

Stock-Based Compensation Plans

T he Company’s stockholders approved the 2020 Plan on October 22, 2020, which replaced and succeeded in its entirety the 2014 Plan.

On October 17, 2024, the Company’s stockholders approved an amendment and restatement of the 2020 Plan, which increased the maximum number of shares of the Company’s common stock authorized for issuance under the 2020 Plan by 815,000 shares.

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.

(1) 815,000 shares, plus (2) 1,797,440 (which represents the number of shares that were available for additional award grant

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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 (3) the number of any shares subject to stock options granted under the 2014 Plan or the Resources Connection, Inc.

2004 Performance Incentive Plan (together 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 (4) 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.

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Awards outstanding at May 25, 2024

2,185 $ 16.36 3.21 $ -

Exercised - -

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Awards outstanding at May 31, 2025

1,527 $ 16.89 2.62 $ -

Exercisable at May 31, 2025

1,527 $ 16.89 2.62 $ -

Vested and expected to vest as of May 31, 2025 (1)

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As of May 31, 2025, all outstanding options have met the vesting requirement.

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The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $ 5.22 as of May 30, 2025 (the last trading day of fiscal 2025), which would have been received by the option holders had all option holders exercised their options as of that date.

The total pre-tax intrinsic value related to stock options exercised during the years ended May 25, 2024, May 27, 2023 and May 28, 2022 was $ 0.5 million, $ 11.9 million and $ 15.1 million, respectively.

The total estimated fair value of stock options that vested during the years ended May 25, 2024, May 27, 2023 and May 28, 2022 was $ 0.3 million, $ 1.2 million and $ 2.2 million, respectively.

As of May 25, 2024 , there was no unrecognized compensation cost related to unvested and outstanding employee stock options.

The total pre-tax intrinsic value related to stock options exercised during the years ended May 25, 2024 and May 27, 2023 was $ 0.5 million and $ 11.9 million, respectively.

The total estimated fair value of stock options that vested during the years ended May 25, 2024 and May 27, 2023 was $ 0.3 million and $ 1.2 million, respectively.

There were no stock options exercised during the year ended May 31, 2025.

As of May 31, 2025, there was no unrecognized compensation cost relate d to unvested and outstanding employee stock options.

Valuation and Expense Information for Stock Based Compensation Plans

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Stock Units credited to a director pursuant to an election to defer cash compensation (and any dividend equivalents credited thereon) are fully vested at all times.

Stock Units credited to a director pursuant to an election to defer an equity award are subject to the vesting conditions applicable to the equity award, except that dividend equivalents credited to a director with respect to such Stock Units are vested at all times.

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such Stock Units are vested at all times.

These liability-classified awards are re-measured at each reporting date and on settlement using the closing price of the Company’s common stock on that date.

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Performance Stock Units (“PSUs”)

The Company issued PSUs to certain members of management and other select employees.

The Company granted PSUs to certain members of management and other select employees.

The total number of shares that will vest under the PSUs will be determined at the end of a three-year performance period based on the Company’s achievement of certain revenue and Adjusted EBITDA percentage targets over the performance period.

3 unchanged sentences

Unvested at May 25, 2024 621 $ 16.15

Vested ( 164 ) 18.41

Forfeited ( 125 ) 13.65

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Actual shares that vest may be 0 - 150 % of the target based on the achievement of the specific company-wide performance targets.

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(2) The dividend equivalents are included in the granted shares.

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Segment Information and Enterprise Reporting

As discussed in Note 2 — Summary of Significant Accounting Policies , from May 29, 2022 to May 31, 2022, the Company had three operating segments – RGP, Sitrick and taskforce .

Upon completing the sale of the taskforce operating segment, effective May 31, 2022, the Company’s operating segments consist of RGP and Sitrick.

RGP is the Company’s only reportable segment.

Sitrick does not individually meet the quantitative thresholds to qualify as a reportable segment.

Therefore, Sitrick is disclosed as Other Segments.

Prior-period comparative segment information was not restated.

During the first quarter of fiscal 2025, the Company reorganized its business segments to better align with changes in its internal operating model and financial reporting, which is used for performance assessment and resource allocation by the CODMs.

All prior year periods presented were recast to reflect the impact of the preceding segment changes.

See Note 2 – Summary of Significant Accounting Policies for further discussion about the Company’s operating and reportable segments.

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Performance measurement is based on segment Adjusted EBITDA, a non-GAAP measure.

Adjusted EBITDA is defined as net income before amortization expense, depreciation expense, interest and income taxes plus or minus stock-based compensation expense, technology transformation costs, goodwill impairment, restructuring costs, and contingent consideration adjustments.

Adjusted EBITDA is defined as net income (loss) before amortization expense, depreciation expense, interest and income taxes excluding stock-based compensation expense, amortized Enterprise Resource Planning (“ERP”) system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, and restructuring costs.

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.

The following table discloses the Company’s revenue and Adjusted EBITDA by segment for all periods presented (in thousands):

The Company’s CODMs do not evaluate segments using asset information.

The table below represents a reconciliation of the Company’s net income (loss) to Adjusted EBITDA for all periods presented (in thousands):

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For the Years Ended

RGP $ 622,895 $ 764,511 $ 764,350

Other Segments (1)

On-Demand Talent

$ 205,976 $ 272,600 $ 372,679

Total revenue $ 632,801 $ 775,643 $ 805,018

Consulting 219,215 227,967 259,946

Europe & Asia Pacific

77,602 84,207 93,166

Outsourced Services 39,618 38,122 38,950

8,920 9,905 10,902

Total consolidated revenue

$ 551,331 $ 632,801 $ 775,643

Adjusted EBITDA:

RGP $ 84,677 $ 132,377 $ 134,187

Other Segments ( 676 ) 1,179 3,527

Reconciling items (2)

On-Demand Talent

$ 17,116 $ 31,673 $ 60,484

Total Adjusted EBITDA (3)

Consulting 31,718 38,420 53,477

Europe & Asia Pacific 4,478 5,289 9,913

Outsourced Services 7,581 7,641 7,408

All Other ( 1,838 ) ( 675 ) 1,131

Unallocated items (1)

( 35,598 ) ( 30,865 ) ( 32,219 )

(1) Amounts reported for the year ended May 27, 2023 include Sitrick and an immaterial amount from taskforce from May 29, 2022 through May 31, 2022, the completion date of the sale.

Amounts previously reported for the year ended May 28, 2022 included the Sitrick and taskforce operating segments.

(2) Reconciling items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments.

(3) A reconciliation of the Company’s net income to Adjusted EBITDA on a consolidated basis is presented below.

The table below represents a reconciliation of the Company’s net income to Adjusted EBITDA for all periods presented (in thousands):

For the Years Ended

Net income $ 21,034 $ 54,359 $ 67,175

Amortization expense 5,378 5,018 4,908

Depreciation expense 3,050 3,539 3,575

Interest expense, net ( 1,064 ) 552 1,064

Income tax expense (benefit) 8,795 18,259 15,793

EBITDA 37,193 81,727 92,515

Stock-based compensation expense ( 6,754 ) ( 5,732 ) ( 9,521 )

Amortized ERP system costs (2)

( 1,287 ) - -

Technology transformation costs (3)

( 5,474 ) ( 6,901 ) ( 6,355 )

Goodwill impairment (2)

Acquisition costs (4)

Restructuring costs (4)

( 2,763 ) ( 1,970 ) -

Goodwill impairment (5)

( 194,409 ) - ( 2,955 )

Gain on sale of assets (6)

Restructuring cost (7)

( 5,061 ) ( 4,087 ) 364

Amortization expense ( 5,880 ) ( 5,378 ) ( 5,018 )

Depreciation expense ( 1,868 ) ( 3,050 ) ( 3,539 )

Contingent consideration adjustment (8)

Adjusted EBITDA $ 51,483 $ 100,194 $ 103,131

(1) Technology transformation costs represent costs included in net income related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based enterprise resource planning system and talent

acquisition and management systems.

Interest income, net 544 1,064 ( 552 )

Income (loss) before income tax benefit (expense)

( 196,075 ) 29,829 72,618

Income tax benefit (expense)

4,295 ( 8,795 ) ( 18,259 )

Net income (loss)

$ ( 191,780 ) $ 21,034 $ 54,359

(1) Unallocated items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments.

(2) Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within selling, general, and administrative expenses on the Consolidated Statement of Operations.

(3) Technology transformation costs represent costs included in net income (loss) related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems.

Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized.

(2) The effect of the goodwill impairment charge recognized during the year ended May 27, 2023 was related to Sitrick's operating segment.

(3) Acquisition costs primarily represent one-time costs included in net income related to the Company’s acquisitions, which include fees paid to the Company’s brokers and other professional services firms.

See Note 3 – Acquisitions and Dispositions in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

(4) The Company initiated the cost reduction plan (the “U.S.

Restructuring Plan”) in October 2023 and substantially completed the U.S.

Restructuring Plan during fiscal 2024.

In addition, the Company substantially completed its global restructuring and business transformation plans in North America, Asia Pacific and Europe in fiscal 2021 and the remaining accrued restructuring liability was released in fiscal 2023.

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(4) Acquisition costs primarily represent costs included in net income (loss) related to the Company’s business acquisition.

These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms.

See Note 3 – Acquisitions and Dispositions for further discussion.

(5) The effect of the goodwill impairment charge recognized during the year ended May 31, 2025 was related to the On-Demand Talent, Consulting, and Europe and Asia Pacific segments and during the year ended May 27, 2023 related to the Sitrick segment.

(6) Gain on sale of assets was related to the Company’s sale of its Irvine office building, which was completed on August 15, 2024.

(7) Restructuring costs for the year ended May 31, 2025 related to the 2025 Restructuring Plan, which were authorized in December 2024 and May 2025.

Restructuring costs for the year ended May 25, 2024 related to U.S.

Restructuring Plan, which was authorized in October 2023, and was substantially completed during fiscal 2024.

The restructuring credits for the year ended May 27, 2023 related to the release of accrued restructuring liabilities upon completion of the global restructuring and business transformation plans from fiscal 2021.

(8) Contingent consideration adjustment related to the remeasurement of contingent liabilities related to the CloudGo acquisition.

The tables below disclose the Company’s revenue, gross profit, significant expenses, Adjusted EBITDA, gross margin and Adjusted EBITDA margin by segment (amount in thousands):

Year Ended May 31, 2025

On-Demand Talent Consulting Europe and Asia Pacific Outsourced Services All Other

Revenue $ 205,976 $ 219,215 $ 77,602 $ 39,618 $ 8,920

Cost of services 127,195 137,619 50,216 23,646 5,231

Gross Profit 78,781 81,596 27,386 15,972 3,689

Compensation, bonus and commissions (1)

47,048 38,313 16,390 5,977 2,134

Other segment expenses (2)

14,617 11,565 6,518 2,414 3,393

Adjusted EBITDA $ 17,116 $ 31,718 $ 4,478 $ 7,581 $ ( 1,838 )

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Gross Margin 38.2 % 37.2 % 35.3 % 40.3 % 41.4 %

Adjusted EBITDA margin (3)

8.3 % 14.5 % 5.8 % 19.1 % ( 20.6 ) %

Year Ended May 25, 2024

On-Demand Talent Consulting Europe and Asia Pacific Outsourced Services All Other

Revenue $ 272,600 $ 227,967 $ 84,207 $ 38,122 $ 9,905

Cost of services 167,796 138,119 53,231 22,239 5,348

Gross Profit 104,804 89,848 30,976 15,883 4,557

Compensation, bonus and commissions (1)

53,910 41,714 17,804 6,472 2,098

Other segment expenses (2)

19,221 9,714 7,883 1,770 3,134

Adjusted EBITDA $ 31,673 $ 38,420 $ 5,289 $ 7,641 $ ( 675 )

Gross Margin 38.4 % 39.4 % 36.8 % 41.7 % 46.0 %

Adjusted EBITDA margin (3)

11.6 % 16.9 % 6.3 % 20.0 % ( 6.8 ) %

Year Ended May 27, 2023

On-Demand Talent Consulting Europe and Asia Pacific Outsourced Services All Other

Revenue $ 372,679 $ 259,946 $ 93,166 $ 38,950 $ 10,902

Cost of services 222,595 152,898 58,624 22,978 5,406

Gross Profit 150,084 107,048 34,542 15,972 5,496

Compensation, bonus and commissions (1)

67,835 45,215 17,640 6,467 2,481

Other segment expenses (2)

21,765 8,356 6,989 2,097 1,884

Adjusted EBITDA $ 60,484 $ 53,477 $ 9,913 $ 7,408 $ 1,131

Gross Margin 40.3 % 41.2 % 37.1 % 41.0 % 50.4 %

Adjusted EBITDA margin (3)

16.2 % 20.6 % 10.6 % 19.0 % 10.4 %

(1) The significant expense category and amounts align with the segment-level information that is regularly provided to the CODMs.

(2) Other segment expenses include occupancy expenses, business expenses, marketing expenses, recruiting expenses and other operating expenses.

(3) Segment Adjusted EBITDA Margin is calculated by dividing segment Adjusted EBITDA by segment revenue.

The table below represents the Company’s revenue and long-lived assets by geographic location (in thousands):

4 unchanged sentences

(1) Long-lived assets are comprised of property and equipment and ROU assets .

Subsequent Event

The Company entered into a Membership Interest Purchase Agreement, dated as of March 27, 2024, and as amended and restated as of June 30, 2024 (the “Reference Point MIPA”) with Reference Point LLC (“Reference Point”) and the sole member of Reference Point, to acquire 100 % of the membership interests of Reference Point.

The Company paid an initial cash consideration of $ 23.8 million on the acquisition date of July 1, 2024.

The initial consideration is subject to final post-closing adjustments for the final working capital, cash, indebtedness and transaction expenses as described in the Reference Point MIPA.

Reference Point is a strategy, management, and technology consulting firm serving the financial services sector and is headquartered in New York.

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Subsequent Events

On July 2, 2025, the Company, Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, entered into the New Credit Facility, and concurrently terminated the 2021 Credit Facility.

The New Credit Facility provides for a secured revolving loan, available in an amount up to the lesser of $ 50.0 million and a borrowing base formula tied to eligible receivables, which includes a $ 10.0 million sublimit for the issuance of standby letters of credit.

The New Credit Facility also includes an option to increase the amount of the revolving loan up to an additional $ 15.0 million.

The New Credit Facility will mature on November 30, 2029.

The obligations under the New Credit Facility are secured by substantially all assets of the Company, Resources Connection LLC and all of the Company’s domestic subsidiaries.

Borrowings under the New Credit Facility bear interest at a rate per annum of either, at the Company's election (i) Term SOFR (as defined in the New Credit Facility) plus a margin ranging from 1.25 % to 2.50 % or (ii) the Base Rate (as defined in the New Credit Facility), plus a margin of 0.25 % to 1.50 %, in either case, with the applicable margin depending on the Company's Consolidated EBITDA (as defined in the New Credit Facility).

The Company is also obligated to pay other customary facility fees for a credit facility of this size and type.

The New Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and make dispositions of assets and financial covenants to maintain a certain consolidated total net leverage ratio and a consolidated fixed charge coverage ratio.

Upon the occurrence of an event of default under the New Credit Facility, the lender may cease making loans, terminate the New Credit Facility, and declare all amounts outstanding to be immediately due and payable.

The New Credit 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 July 4, 2025, One Big Beautiful Bill Act (“OBBBA”) was signed into law.

Among other changes, OBBBA makes permanent several expiring provisions from the Tax Cuts and Jobs Act of 2017, restores favorable tax treatment of various business provisions, and modifies the international tax regime.

These changes were not reflected in the income tax provision for fiscal 2025, as enactment occurred after the balance sheet date.

We are currently evaluating the potential impact of OBBBA on our consolidated financial statements going forward.

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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data