[8-K] Resources Connection Reports Material Event

Rhea-AI Filing Summary

Resources Connection, Inc. (Nasdaq: RGP) entered into a new secured revolving Credit Facility with Bank of America on 2 July 2025. The agreement replaces the 2021 facility and offers:

• Commitment: up to the lesser of $50 million and a receivables-based borrowing base, plus an $15 million accordion option.
• Maturity: 30 November 2029 – extending the company’s debt horizon by nearly four years versus the prior line.
• Pricing: borrower election of Term SOFR + 1.25%–2.50% or Base Rate + 0.25%–1.50%, scaled to consolidated EBITDA; includes customary commitment and letter-of-credit fees (LC sub-limit: $10 million).
• Collateral: substantially all assets of the parent, Resources Connection LLC and domestic subs under a new Security and Pledge Agreement.
• Use of proceeds: working capital, general corporate purposes, acquisitions, and full repayment/termination of the 2021 Credit Agreement.
• Covenants & defaults: limits on liens, additional debt, restricted payments, M&A, and asset sales; maintenance tests for net leverage and fixed-charge coverage. Standard acceleration and cross-default provisions apply.

The facility increases liquidity headroom, lengthens tenor and aligns borrowing costs with market rates, but introduces asset security and tighter covenant discipline.

Positive

• Extended maturity to 2029 removes near-term refinancing risk and improves balance-sheet visibility.
• Up to $65 million total availability (including accordion) increases liquidity for working capital and acquisitions.
• Pricing tied to EBITDA creates an incentive to improve profitability, potentially lowering borrowing costs.

Negative

• All-asset collateral pledge limits future unsecured borrowing capacity and heightens asset-loss risk on default.
• Variable SOFR/Base-rate structure leaves interest expense exposed to rate volatility.
• Covenant package may restrict strategic flexibility if performance weakens.

Insights

Senior Credit Analyst

TL;DR – New $50 m revolver lengthens tenor and boosts liquidity; covenant package introduces discipline but seems manageable.

The five-year secured revolver removes near-term refinancing risk, pushing maturity to 2029 and adding an accordion that could lift availability to $65 m if conditions warrant. Pricing at SOFR +1.25-2.50% is broadly in line with upper-BB/split-BBB middle-market benchmarks; the leverage-based grid rewards deleveraging. Collateralization of substantially all assets improves lender protection but signals modest tightening of credit terms versus the prior unsecured line. Financial covenants (net leverage and FCCR) look standard and should be serviceable given RGP’s historically low leverage profile. Overall impact skews positive: liquidity improves, strategic flexibility expands for bolt-on acquisitions, and refinancing uncertainty is removed.

Equity Research Analyst – Professional Services

TL;DR – Facility ups liquidity for growth, but secured stance could slightly raise balance-sheet risk if end markets soften.

Operationally, the revolver gives management headroom to fund working-capital swings and tuck-in deals, both vital in a project-based consulting model. The extended maturity reduces covenant-driven cash hoarding, supporting potential shareholder returns should free cash flow allow. However, the blanket lien limits future unencumbered borrowing capacity and exposes assets if macro conditions deteriorate. No immediate earnings effect appears, yet incremental interest expense could rise if rates remain elevated. Net, I view the filing as moderately positive for strategic optionality without materially altering the equity thesis.

0001084765FALSE00010847652025-07-022025-07-02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 8-K

_______________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 2, 2025

RESOURCES CONNECTION, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

0-32113

33-0832424

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

15950 North Dallas Parkway, Suite 330, Dallas, Texas 75248

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (214) 777-0600

(Former Name or Former Address, if Changed Since Last Report)

________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o						Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o						Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o						Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o						Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

RGP

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 1.01    Entry into a Material Definitive Agreement.

On July 2, 2025, Resources Connection, Inc. (the “Company”), Resources Connection LLC, and the Company’s domestic subsidiaries entered into a Credit Agreement (the “Credit Facility”) with the lenders party thereto and Bank of America, N.A., as administrative agent, L/C issuer, and the swingline lender. The 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 $10,000,000 sublimit for the issuance of standby letters of credit. The Credit Facility also includes an option to increase the amount of the revolving loan up to an additional $15.0 million. The proceeds of the Credit Facility may be used to fund the Company’s working capital and other general corporate purposes, pay fees and expenses in connection with the transaction, fund potential acquisitions and refinance the outstanding indebtedness under that certain Credit Agreement, dated as of November 12, 2021, by and among the Company, Resources Connection LLC, the Company’s domestic subsidiaries, the lenders party thereto and Bank of America, N.A., as administrative agent (as amended, the “2021 Credit Agreement”). The Credit Facility is scheduled to mature November 30, 2029.

The obligations under the Credit Facility are secured by substantially all assets of the Company, Resources Connection LLC, and the Company’s domestic subsidiaries, pursuant to the Security and Pledge Agreement, dated July 2, 2025 (the “Security and Pledge Agreement”).

Borrowings under the Credit Facility will bear interest at a rate per annum of either, at the Company’s election, (i) Term SOFR (as defined in the Credit Facility) plus a margin ranging from 1.25% to 2.50% or (ii) the Base Rate (as defined in the 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 Credit Facility). The Company is also obligated to pay other customary facility fees for a credit facility of this size and type.

The 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 Credit Facility, the lender may cease making loans, terminate the Credit Facility, and declare all amounts outstanding to be immediately due and payable. The 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.

The foregoing description of the Credit Facility and the Security and Pledge Agreement is subject to, and qualified in its entirety by, the full text of the Credit Facility, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and the full text of the Security and Pledge Agreement, which is attached as Exhibit 10.2 to this Current Report on Form 8-K.

Item 1.02    Termination of Material Definitive Agreement.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.The material terms of the 2021 Credit Agreement were previously disclosed in the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on November 16, 2021. The Company terminated the 2021 Credit Agreement effective July 2, 2025 in connection with entering into the new Credit Facility.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off- Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01    Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.						Description
10.1						Credit Agreement, dated as of July 2, 2025, by and among, Resources Connection, Inc. and Resources Connection LLC, as borrowers, Veracity Consulting Group, LLC, Sitrick Group, LLC and Reference Point LLC, as guarantors, and Bank of America, N.A., as administrative agent, L/C issuer, and the swingline lender.
10.2						Security and Pledge Agreement, dated as of July 2, 2025, by and among Resources Connection, Inc. and Resources Connection LLC, as borrowers, Veracity Consulting Group, LLC, Sitrick Group, LLC and Reference Point LLC, as guarantors, and Bank of America, N.A., as administrative agent.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			RESOURCES CONNECTION, INC.
Date: July 7, 2025			By:			/s/ JENNIFER Y. RYU
						Jennifer Y. Ryu
						Executive Vice President and Chief Financial Officer

FAQ

What is the size of Resources Connection's new credit facility?

The revolver is available up to the lesser of $50 million and a receivables-based borrowing base, with an additional $15 million accordion option.

When does the new RGP credit facility mature?

The facility matures on 30 November 2029.

What interest rates will RGP pay under the facility?

Borrowings bear Term SOFR +1.25%–2.50% or Base Rate +0.25%–1.50%, depending on consolidated EBITDA.

Why did RGP terminate its 2021 Credit Agreement?

The 2021 facility was fully refinanced and terminated on 2 July 2025 in conjunction with entering the new agreement.

What can RGP use the new credit facility for?

Permitted uses include working capital, general corporate purposes, acquisitions, and refinancing prior debt.