##### Table of Contents



UNITED STATESSECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (MARK ONE)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended November 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 0-32113
 RESOURCES CONNECTION, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 DELAWARE
    
    33-0832424(State or Other Jurisdiction
    
    (I.R.S. Employerof Incorporation or Organization)
    
    Identification No.)
 17101 Armstrong Avenue, Irvine, California 92614(Address of Principal Executive Offices and Zip Code)
 (714) 430-6400
(Registrants Telephone Number, Including Area Code)
 þ o
  þ o o
 o þ




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##### 



RESOURCES CONNECTION, INC.
 INDEX
  
 PART IFINANCIAL INFORMATIONItem 1.
    
    Consolidated Financial Statements (Unaudited)
    
    
    3Consolidated Balance Sheets as of November 30, 2007 and May 31, 2007
    
    
    3Consolidated Statements of Income for the Three and Six Months Ended November 30, 2007 and 2006
    
    
    4Consolidated Statement of Stockholders Equity for the Six Months Ended November 30, 2007
    
    
    5Consolidated Statements of Cash Flows for the Six Months Ended November 30, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4.
    
    Controls and Procedures
    
    
    22PART IIOTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    22Item 1A.
    
    Risk Factors
    
    
    22Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3.
    
    Defaults upon Senior Securities
    
    
    30Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    30Item 5.
    
    Other Information
    
    
    30Item 6.
    
    Exhibits
    
    
    31Signatures
    
    
    32EXHIBIT 10.30EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 
 RESOURCES CONNECTION, INC.
 CONSOLIDATED BALANCE SHEETS(Unaudited)(amounts in thousands, except par value per share)
 November 30, 2007
    
    
    May 31, 2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    103,668
    
    
    $
    121,095Short-term investments
    
    
    11,000
    
    
    
    55,000Trade accounts receivable, net of allowance
for doubtful accounts of $4,113 and $4,588
as of November 30, 2007 and May 31, 2007,
respectively
    
    
    116,621
    
    
    
    105,146Prepaid expenses and other current assets
    
    
    4,127
    
    
    
    5,966Deferred income taxes
    
    
    8,123
    
    
    
    8,123Total current assets
    
    
    243,539
    
    
    
    295,330U.S. Government agency securities
    
    
    6,000
    
    
    
    47,000Goodwill
    
    
    91,237
    
    
    
    83,263Intangible assets, net
    
    
    316
    
    
    
    654Property and equipment, net
    
    
    38,345
    
    
    
    35,347Deferred income taxes
    
    
    2,870
    
    
    
    2,068Other assets
    
    
    1,434
    
    
    
    799Total assets
    
    $
    383,741
    
    
    $
    464,461LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    16,873
    
    
    $
    16,850Accrued salaries and related obligations
    
    
    56,308
    
    
    
    60,407Income taxes payable and other liabilities
    
    
    6,188
    
    
    
    10,426Total current liabilities
    
    
    79,369
    
    
    
    87,683Other long-term liabilities
    
    
    5,708
    
    
    
    6,301Deferred income taxes
    
    
    5,422
    
    
    
    7,178Total liabilities
    
    
    90,499
    
    
    
    101,162Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value, 5,000
shares authorized; zero shares issued and
outstandingCommon stock, $0.01 par value, 70,000 shares
authorized; 51,722 and 50,731 shares issued;
and 45,930 and 47,777 outstanding as of
November 30, 2007 and May 31, 2007,
respectively
    
    
    517
    
    
    
    507Additional paid-in capital
    
    
    229,263
    
    
    
    199,741Accumulated other comprehensive income
    
    
    5,567
    
    
    
    2,629Retained earnings
    
    
    205,938
    
    
    
    242,628Treasury stock at cost, 5,792 and 2,954
shares at November 30, 2007 and May 31,
2007, respectively
    
    
    (148,043
    )
    
    
    (82,206
    )Total stockholders equity
    
    
    293,242
    
    
    
    363,299Total liabilities and stockholders equity
    
    $
    383,741
    
    
    $
    464,461
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RESOURCES CONNECTION, INC.
 CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
 Three Months
    
    
    Six MonthsEnded
    
    
    EndedNovember 30,
    
    
    November 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    206,638
    
    
    $
    182,804
    
    
    $
    400,758
    
    
    $
    347,911Direct cost of services, primarily payroll
and related taxes for professional services
employees
    
    
    127,025
    
    
    
    110,152
    
    
    
    247,656
    
    
    
    210,071Gross profit
    
    
    79,613
    
    
    
    72,652
    
    
    
    153,102
    
    
    
    137,840Selling, general and administrative expenses
    
    
    55,514
    
    
    
    46,658
    
    
    
    108,543
    
    
    
    91,456Amortization of intangible assets
    
    
    84
    
    
    
    344
    
    
    
    338
    
    
    
    762Depreciation expense
    
    
    2,007
    
    
    
    1,444
    
    
    
    3,882
    
    
    
    2,800Income from operations
    
    
    22,008
    
    
    
    24,206
    
    
    
    40,339
    
    
    
    42,822Interest income
    
    
    1,629
    
    
    
    2,013
    
    
    
    4,171
    
    
    
    3,922Income before provision for income taxes
    
    
    23,637
    
    
    
    26,219
    
    
    
    44,510
    
    
    
    46,744Provision for income taxes
    
    
    10,601
    
    
    
    11,562
    
    
    
    19,892
    
    
    
    21,136Net income
    
    $
    13,036
    
    
    $
    14,657
    
    
    $
    24,618
    
    
    $
    25,608Net income per common share:Basic
    
    $
    0.28
    
    
    $
    0.30
    
    
    $
    0.51
    
    
    $
    0.53Diluted
    
    $
    0.27
    
    
    $
    0.29
    
    
    $
    0.49
    
    
    $
    0.51Weighted average common shares outstanding:Basic
    
    
    47,315
    
    
    
    48,123
    
    
    
    48,363
    
    
    
    48,133Diluted
    
    
    48,754
    
    
    
    50,470
    
    
    
    50,226
    
    
    
    50,123Cash dividends declared per share
    
    $
    
    
    
    $
    
    
    
    $
    1.25
    
    
    $
    
  4




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RESOURCES CONNECTION, INC.
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(Unaudited)
(amounts in thousands)
 Six Months EndedNovember 30, 2007COMMON STOCKSHARES:Balance at beginning of period
    
    
    50,731Exercise of stock options
    
    
    858Issuance of common stock under Employee Stock Purchase Plan
    
    
    143Cancellation of shares held in treasury
    
    
    (10
    )Balance at end of period
    
    
    51,722COMMON STOCKPAR VALUE:Balance at beginning of period
    
    $
    507Exercise of stock options
    
    
    9Issuance of common stock under Employee Stock Purchase Plan
    
    
    1Cancellation of shares held in treasury
    
    
    Balance at end of period
    
    $
    517ADDITIONAL PAID-IN CAPITAL:Balance at beginning of period
    
    $
    199,741Exercise of stock options
    
    
    10,626Stock-based compensation expense related to employee stock options and
employee stock purchases
    
    
    11,262Tax benefit from employee stock option plans
    
    
    3,175Issuance of common stock under Employee Stock Purchase Plan
    
    
    3,871Issuance of treasury stock for Compliance Solutions (UK) Ltd. transaction
    
    
    777Cancellation of shares held in treasury
    
    
    (189
    )Balance at end of period
    
    $
    229,263ACCUMULATED OTHER COMPREHENSIVE INCOME:Balance at beginning of period
    
    $
    2,629Translation adjustments
    
    
    2,938Balance at end of period
    
    $
    5,567RETAINED EARNINGS:Balance at beginning of period
    
    $
    242,628Cash dividends-$1.25 per share
    
    
    (60,652
    )Cumulative impact from adoption of FASB Interpretation No. 48
    
    
    (656
    )Net income
    
    
    24,618Balance at end of period
    
    $
    205,938TREASURY STOCKSHARES:Balance at beginning of period
    
    
    2,954Repurchase of shares
    
    
    2,915Issuance of treasury stock for Compliance Solutions (UK) Ltd. transaction
    
    
    (67
    )Cancellation of shares held in treasury
    
    
    (10
    )Balance at end of period
    
    
    5,792TREASURY STOCKCOST:Balance at beginning of period
    
    $
    (82,206
    )Repurchase of shares
    
    
    (67,401
    )Issuance of treasury stock for Compliance Solutions (UK) Ltd. transaction
    
    
    1,375Cancellation of shares held in treasury
    
    
    189Balance at end of period
    
    $
    (148,043
    )COMPREHENSIVE INCOME:Net income
    
    $
    24,618Translation adjustments
    
    
    2,938Total comprehensive income
    
    $
    27,556
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RESOURCES CONNECTION, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(amounts in thousands)
 Six Months EndedNovember 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    24,618
    
    
    $
    25,608Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    4,220
    
    
    
    3,562Stock-based compensation expense related to employee stock options and
employee stock purchases
    
    
    11,262
    
    
    
    9,363Excess tax benefits from stock-based compensation
    
    
    (2,157
    )
    
    
    (1,209
    )Bad debt expense
    
    
    
    
    
    
    184Deferred income tax benefit
    
    
    (2,304
    )
    
    
    (1,535
    )Changes in operating assets and liabilities, net of effect of acquisitions:Trade accounts receivable
    
    
    (7,658
    )
    
    
    (14,410
    )Prepaid expenses and other current assets
    
    
    2,093
    
    
    
    120Income taxes payable
    
    
    (4,101
    )
    
    
    6,130Other assets
    
    
    (667
    )
    
    
    (132
    )Accounts payable and accrued expenses
    
    
    (1,075
    )
    
    
    (1,234
    )Accrued salaries and related obligations
    
    
    (5,271
    )
    
    
    (2,080
    )Other liabilities
    
    
    819
    
    
    
    (210
    )Net cash provided by operating activities
    
    
    19,779
    
    
    
    24,157Cash flows from investing activities:Redemption of long-term investments
    
    
    49,000
    
    
    
    12,000Purchase of long-term investments
    
    
    (14,000
    )
    
    
    (32,000
    )Redemption of short-term investments
    
    
    50,000
    
    
    
    18,000Cash used to complete Compliance Solutions (UK) Ltd. transaction
    
    
    (6,028
    )
    
    
    Cash used to complete Nordic Spring transaction
    
    
    
    
    
    
    (1,488
    )Purchases of property and equipment
    
    
    (6,176
    )
    
    
    (4,599
    )Net cash provided by (used in) investing activities
    
    
    72,796
    
    
    
    (8,087
    )Cash flows from financing activities:Proceeds from exercise of stock options
    
    
    10,635
    
    
    
    5,957Proceeds from issuance of common stock under Employee Stock Purchase Plan
    
    
    3,872
    
    
    
    2,532Repurchase of common stock
    
    
    (67,401
    )
    
    
    (14,130
    )Excess tax benefits from stock-based compensation
    
    
    2,157
    
    
    
    1,209Cash dividends paid
    
    
    (60,652
    )
    
    
    Net cash used in financing activities
    
    
    (111,389
    )
    
    
    (4,432
    )Effect of exchange rate changes on cash
    
    
    1,387
    
    
    
    136Net (decrease) increase in cash and cash equivalents
    
    
    (17,427
    )
    
    
    11,774Cash and cash equivalents at beginning of period
    
    
    121,095
    
    
    
    88,439Cash and cash equivalents at end of period
    
    $
    103,668
    
    
    $
    100,213
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RESOURCES CONNECTION, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Six months ended November 30, 2007 and 2006
 1. Description of the Company and its Business
   2. Summary of Significant Accounting Policies
 Interim Financial Information
   Short and Long-Term Investments
   7




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Stock-Based Compensation
   Stock-Based Compensation Plans
 Use of Estimates
  3. Stockholders Equity
  4. Net Income Per Share
  8




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Three months ended
    
    
    Six months endedNovember 30,
    
    
    November 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    13,036
    
    
    $
    14,657
    
    
    $
    24,618
    
    
    $
    25,608Basic:Weighted average shares
    
    
    47,315
    
    
    
    48,123
    
    
    
    48,363
    
    
    
    48,133Diluted:Weighted average shares
    
    
    47,315
    
    
    
    48,123
    
    
    
    48,363
    
    
    
    48,133Potentially dilutive shares
    
    
    1,439
    
    
    
    2,347
    
    
    
    1,863
    
    
    
    1,990Total dilutive shares
    
    
    48,754
    
    
    
    50,470
    
    
    
    50,226
    
    
    
    50,123Net income per share:Basic
    
    $
    0.28
    
    
    $
    0.30
    
    
    $
    0.51
    
    
    $
    0.53Diluted
    
    $
    0.27
    
    
    $
    0.29
    
    
    $
    0.49
    
    
    $
    0.51
  5. Acquisition
   6. Intangible Assets and Goodwill
  As of November 30, 2007
    
    
    As of May 31, 2007Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedGross
    
    
    Amortization
    
    
    Net
    
    
    Gross
    
    
    Amortization
    
    
    NetCustomer relationships (2  4 years)
    
    $
    5,248
    
    
    $
    (5,160
    )
    
    $
    88
    
    
    $
    5,248
    
    
    $
    (4,942
    )
    
    $
    306Associate and customer database (1  5
years)
    
    
    1,766
    
    
    
    (1,620
    )
    
    
    146
    
    
    
    1,766
    
    
    
    (1,513
    )
    
    
    253Non-compete agreements (1  4 years)
    
    
    802
    
    
    
    (802
    )
    
    
    
    
    
    
    802
    
    
    
    (789
    )
    
    
    13Developed technology (3 years)
    
    
    520
    
    
    
    (520
    )
    
    
    
    
    
    
    520
    
    
    
    (520
    )
    
    
    Trade name and trademark (indefinite life)
    
    
    82
    
    
    
    
    
    
    
    82
    
    
    
    82
    
    
    
    
    
    
    
    82Total
    
    $
    8,418
    
    
    $
    (8,102
    )
    
    $
    316
    
    
    $
    8,418
    
    
    $
    (7,764
    )
    
    $
    654
  9




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Subsequent Event
 7. Segment Reporting
 Summary of Significant
Accounting Policies
 Revenue for the three months ended
    
    
    Revenue for the six months endedNovember 30,
    
    
    November 30,
    
    
    Long-Lived Assets as ofNovember 30,
    
    
    May 31,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007(1)
    
    
    2007(1)United States
    
    $
    151,042
    
    
    $
    138,965
    
    
    $
    296,869
    
    
    $
    267,163
    
    
    $
    31,403
    
    
    $
    29,720The Netherlands
    
    
    19,431
    
    
    
    18,365
    
    
    
    35,893
    
    
    
    34,054
    
    
    
    3,362
    
    
    
    3,020Other
    
    
    36,165
    
    
    
    25,474
    
    
    
    67,996
    
    
    
    46,694
    
    
    
    3,580
    
    
    
    2,607Total
    
    $
    206,638
    
    
    $
    182,804
    
    
    $
    400,758
    
    
    $
    347,911
    
    
    $
    38,345
    
    
    $
    35,347
 
 (1)
    
    Long-lived assets are comprised of building and land, computers and equipment, furniture and
leasehold improvements. 8. Stock-Based Compensation Plans
 Stock Options and Restricted Stock
  
    
    2004 Performance Incentive Plan (2004 Plan)  The 2004 Plan serves as the successor to the
1999 Long Term Incentive Plan (1999 Plan). A total of 5,500,000 new shares of common stock
were made available for awards to employees and non-employee directors and may include, but
are not limited to, stock options and restricted stock grants. Stock options vest in equal
annual installments over four years and terminate ten years from the dates of grant.
Restricted stock award vesting is determined on an individual grant basis. As of November 30,
2007, 1,633,000 shares were available for award grant purposes under the 2004 Plan.
 
    
    The 1999 Plan was terminated in 2004, except as to the outstanding options. Such options vest
in equal annual installments over four years and terminate ten years from the dates of grant.
There is a rollover provision to the 2004 Plan if a then-outstanding award expires or
terminates without having become vested or exercised.
 10




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Weighted-AverageWeighted-
    
    
    RemainingNumber of
    
    
    Average
    
    
    Contractual
    
    
    AggregateShares Subject to Options
    
    
    Exercise Price
    
    
    Term (Years)
    
    
    Intrinsic ValueOutstanding at May 31, 2007
    
    
    9,186
    
    
    $
    20.88
    
    
    
    7.39
    
    
    $
    100,706Granted, at fair market value
    
    
    245
    
    
    $
    29.50Exercised
    
    
    (858
    )
    
    $
    12.39
    
    
    
    
    
    
    $
    16,306Forfeited
    
    
    (370
    )
    
    $
    26.56Outstanding at November 30, 2007
    
    
    8,203
    
    
    $
    21.77
    
    
    
    7.12
    
    
    $
    25,790Exercisable at November 30, 2007
    
    
    3,692
    
    
    $
    15.97
    
    
    
    5.82
    
    
    $
    21,688
 Stock-Based Compensation Expense
     Employee Stock Purchase Plan
  11




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Provision for Income Taxes under SFAS 123 (R)
   9. Income Taxes
     10. Recent Accounting Pronouncements
   12




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11. Supplemental Cash Flow Information
   12. Subsequent Event
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  13




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Overview
  
    
    finance and accounting services, such as mergers and acquisitions due diligence,
financial analyses (e.g., product costing and margin analyses), corporate
reorganizations, budgeting and forecasting, audit preparation, public entity reporting
and tax-related projects;
    
    information management services, such as financial system/enterprise resource
planning implementation and post implementation optimization;
    
    human capital services, such as change management and compensation program design
and implementation;
    
    risk management and internal audit services (provided via our subsidiary
Resources Audit Solutions or RAS), including compliance reviews, internal audit
co-sourcing and assisting clients with their compliance efforts under the Sarbanes-Oxley
Act of 2002 (Sarbanes);
    
    supply chain management (SCM) services, such as leading strategic sourcing
efforts, contract negotiations and purchasing strategy; and
    
    legal services such as providing attorneys, paralegals and contract managers to
assist clients (including law firms) with project-based or peak period needs.
   Number of United States
    
    Number of InternationalFiscal Year
    
    Offices Opened
    
    Offices Opened
    
    Service Line Established1997
    
    Nine
    
    
    
    Finance and accounting services1998
    
    Nine1999
    
    Ten
    
    
    
    Information management services2000
    
    Four
    
    Three
    
    Human capital services2001
    
    Nine
    
    One2002
    
    Two2003
    
    Six
    
    One
    
    RAS; SCM (via acquisition)
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Number of United States
    
    Number of InternationalFiscal Year
    
    Offices Opened
    
    Offices Opened
    
    Service Line Established2004
    
    Two opened; two consolidation closures
    
    Seven opened via acquisition; one organic2005
    
    Two opened; two consolidation closures
    
    One opened via acquisition; two organic
    
    Legal services2006
    
    Three
    
    Two opened via acquisition; eight organic2007
    
    One
    
    Eight organic opened; three
consolidation closures2008
    
    Two (including corporate headquarters)
    
    Two opened via acquisition; one organic;
two consolidation closures
  Critical Accounting Policies
   Valuation of long-lived assets
 Allowance for doubtful accounts
 Income taxes
 Revenue recognition 
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Stock - based Compensation 
  Three months endedNovember 30, 2007Expected volatility
    
    
    39.9
    %Risk-free interest rate
    
    
    4.18-4.25
    %Expected dividends
    
    
    0.0
    %Expected life
    
    5.23 years
   Three Months Ended November 30, 2007 Compared to Three Months Ended November 30, 2006
  Revenue .
 16




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Direct Cost of Services .
  Selling, General and Administrative Expenses .
 Amortization and Depreciation Expense .
 17




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Interest Income .
  Income Taxes .
   18




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Six Months Ended November 30, 2007 Compared to Six Months Ended November 30, 2006
  Revenue .
   Direct Cost of Services .
 Selling, General and Administrative Expenses .
 Amortization and Depreciation Expense .
  19




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Interest Income .
 Income Taxes .
  Comparability of Quarterly Results .
 Liquidity and Capital Resources
    20




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Recent Accounting Pronouncements
  Off-Balance Sheet Arrangements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk .
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Foreign Currency Exchange Rate Risk .
    
 ITEM 4. CONTROLS AND PROCEDURES
  
 PART II
 OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 There have been no material changes in our risk factors from those disclosed in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended May 31, 2007, which was filed with the
Securities and Exchange Commission on July 25, 2007. For convenience, our updated risk factors are
included in this Item 1A. below. The order in which the risks appear is not intended as an
indication of their relative weight or importance.
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We must provide our clients with highly qualified and experienced associates, and the loss of a
significant number of our associates, or an inability to attract and retain new associates, could
adversely affect our business and operating results.
  
    
    provide our associates with full-time employment;
    
    obtain the type of challenging and high-quality projects that our associates seek;
    
    pay competitive compensation and provide competitive benefits; and
    
    provide our associates with flexibility as to hours worked and assignment of client engagements.
  Decreased effectiveness of equity compensation could adversely affect our ability to attract and
retain employees.
  The market for professional services is highly competitive, and if we are unable to compete
effectively against our competitors, our business and operating results could be adversely
affected.
  
    
    consulting firms;
    
    local, regional and national accounting firms;
    
    independent contractors;
    
    traditional and Internet-based staffing firms; and
    
    the in-house resources of our clients.
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An economic downturn or change in the use of outsourced professional services associates could
adversely affect our business.
  Our business depends upon our ability to secure new projects from clients and, therefore, we could
be adversely affected if we fail to do so.
  We may be legally liable for damages resulting from the performance of projects by our associates
or for our clients mistreatment of our associates.
   We may not be able to grow our business, manage our growth or sustain our current business.
  
    
    grow our client base;
    
    expand profitably into new cities;
    
    provide additional professional services offerings;
    
    hire qualified and experienced associates;
    
    maintain margins in the face of pricing pressures;
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
    
    manage costs; and
    
    maintain or grow revenues for both Sarbanes-related and internal audit related services
as well as other service offerings from clients who have initially engaged us for Sarbanes
compliance.
  The increase in our international activities will expose us to additional operational challenges
that we might not otherwise face.
  
    
    difficulties in staffing and managing foreign offices as a result of, among other
things, distance, language and cultural differences;
    
    less flexible labor laws and regulations;
    
    expenses associated with customizing our professional services for clients in foreign
countries;
    
    foreign currency exchange rate fluctuations, when we sell our professional services in
denominations other than United States dollars;
    
    protectionist laws and business practices that favor local companies;
    
    political and economic instability in some international markets;
    
    multiple, conflicting and changing government laws and regulations;
    
    trade barriers;
    
    reduced protection for intellectual property rights in some countries; and
    
    potentially adverse tax consequences.
 We have acquired, and may continue to acquire, companies, and these acquisitions could disrupt our
business.
  
    
    diversion of managements attention from other business concerns;
    
    failure to integrate the acquired company with our existing business;
    
    failure to motivate, or loss of, key employees from either our existing business or the
acquired business;
    
    potential impairment of relationships with our employees and clients;
    
    additional operating expenses not offset by additional revenue;
    
    incurrence of significant non-recurring charges;
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
    
    incurrence of additional debt with restrictive covenants or other limitations;
    
    dilution of our stock as a result of issuing equity securities; and
    
    assumption of liabilities of the acquired company.
 Our business could suffer if we lose the services of one or more key members of our management.
  Our quarterly financial results may be subject to significant fluctuations that may increase the
volatility of our stock price.
  
    
    our ability to attract new clients and retain current clients;
    
    the mix of client projects;
    
    the announcement or introduction of new services by us or any of our competitors;
    
    the expansion of the professional services offered by us or any of our competitors into
new locations both nationally and internationally;
    
    changes in the demand for our services by our clients;
    
    the entry of new competitors into any of our markets;
    
    the number of associates eligible for our offered benefits as the average length of
employment with the Company increases;
    
    the number of holidays in a quarter, particularly the day of the week on which they
occur;
    
    changes in the pricing of our professional services or those of our competitors;
    
    the amount and timing of operating costs and capital expenditures relating to
management and expansion of our business;
    
    the timing of acquisitions and related costs, such as compensation charges that
fluctuate based on the market price of our common stock; and
    
    the periodic fourth quarter consisting of 14 weeks.
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If our internal control over financial reporting does not comply with the requirements of Sarbanes,
our business and stock price could be adversely affected.
    We may be subject to laws and regulations that impose difficult and costly compliance requirements
and subject us to potential liability and the loss of clients.
  It may be difficult for a third party to acquire our Company, and this could depress our stock
price.
  
    
    authorize our board of directors to establish one or more series of undesignated
preferred stock, the terms of which can be determined by the board of directors at the time
of issuance;
    
    divide our board of directors into three classes of directors, with each class serving
a staggered three-year term. Because the classification of the board of directors generally
increases the difficulty of replacing a majority of the directors, it may tend to
discourage a third party from making a tender offer or otherwise
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attempting to obtain control of us and may make it difficult to change the composition of the
board of directors;
    
    prohibit cumulative voting in the election of directors which, if not prohibited, could
allow a minority stockholder holding a sufficient percentage of a class of shares to ensure
the election of one or more directors;
    
    require that any action required or permitted to be taken by our stockholders must be
effected at a duly called annual or special meeting of stockholders and may not be effected
by any consent in writing;
    
    state that special meetings of our stockholders may be called only by the chairman of
the board of directors, by our chief executive officer, by the board of directors after a
resolution is adopted by a majority of the total number of authorized directors, or by the
holders of not less than 10% of our outstanding voting stock;
    
    establish advance notice requirements for submitting nominations for election to the
board of directors and for proposing matters that can be acted upon by stockholders at a
meeting;
    
    provide that certain provisions of our certificate of incorporation can be amended only
by supermajority vote of the outstanding shares and that our bylaws can be amended only by
supermajority vote of the outstanding shares of our board of directors;
    
    allow our directors, not our stockholders, to fill vacancies on our board of directors;
and
    
    provide that the authorized number of directors may be changed only by resolution of
the board of directors.
 Stockholders Equity
 Beginning with the first quarter of fiscal 2007 we were required to recognize compensation expense
related to employee stock options and our employee stock purchase plan. There is no assurance that
the expense that we are required to recognize measures accurately the value of our share-based
payment awards, and the recognition of this expense could cause the trading price of our common
stock to decline.
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We may be unable to adequately protect our intellectual property rights, including our brand name.
If we fail to adequately protect our intellectual property rights, the value of such rights may
diminish and our results of operations and financial condition may be adversely affected.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Approximate DollarTotal Number of
    
    
    Value of SharesShares Purchased as
    
    
    that MayTotal Number
    
    
    Average Price
    
    
    Part of Publicly
    
    
    Yet be PurchasedPeriod
    
    of Shares Purchased
    
    
    Paid per Share
    
    
    Announced Program
    
    
    Under the ProgramAugust 26, 2007  September 22, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    September 23, 2007  October 20, 2007
    
    
    2,360,433
    
    
    $
    23.30
    
    
    
    2,360,433
    
    
    $
    92,750,133October 21, 2007  November 24, 2007
    
    
    480,000
    
    
    $
    21.15
    
    
    
    480,000
    
    
    $
    82,598,899Total August 26,
2007  November
24, 2007
    
    
    2,840,433
    
    
    $
    22.94
    
    
    
    2,840,433
    
    
    $
    82,598,899
 
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    The election of two directors. The vote for each director was as follows:
 SharesNominee
    
    Shares For
    
    WithheldNeil Dimick
    
    
    42,644,743
    
    
    
    1,720,105Karen M. Ferguson
    
    
    44,030,701
    
    
    
    344,146
  2.
    
    The approval of a proposal to amend the Resources Connection 2004 Performance
Incentive Plan to increase the number of shares available for award grants by 2,000,000.
 Shares For
    
    Against
    
    Abstain
    
    Broker Non-Votes15,317,695
    
    26,215,140
    
    14,334
    
    2,817,679
 3.
    
    The ratification of the appointment of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm.
 Shares For
    
    Against
    
    Abstain44,318,349
    
    39,555
    
    6,943
 
 Item 5. Other Information
  
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Item 6. Exhibits
  10.30
    
    Amendment No. 3 to Loan Agreement, dated November 28, 2007 by and among Resources Connection, Inc., Resources
Connection LLC and Bank of America, N.A.*10.31
    
    Text of offer letter, dated November 6, 2007 between Nathan W. Franke and Resources Global Professionals (incorporated
by reference to Exhibit 99.2 to the Companys Form 8-K filed with the SEC on November 8, 2007).31.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*32
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    Filed herewith(1)
    
    Stephen J. Giusto resigned as a director of the Company and its Chief Financial Officer in September 2007. 31




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SIGNATURES
  Resources Connection, Inc.Date: January 3, 2008
    
    /s/ Donald B. MurrayDonald B. MurrayPresident and Chief Executive OfficerDate: January 3, 2008
    
    /s/ Nathan W. FrankeNathan W. FrankeChief Financial Officer andExecutive Vice President(Principal Financial Officer) 32




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EXHIBIT INDEX
 Exhibit No.
    
    Description10.30
    
    
    Amendment No. 3 to Loan Agreement, dated November 28, 2007 by and among Resources Connection, Inc., Resources
Connection LLC and Bank of America, N.A.*10.31
    
    
    Text of offer letter, dated November 6, 2007 between Nathan W. Franke and Resources Global Professionals (incorporated
by reference to Exhibit 99.2 to the Companys Form 8-K filed with the SEC on November 8, 2007).31.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*32
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    Filed herewith 33