Resources Connection Inc (NASDAQ:RECN) Q3 2020 Earnings Conference Call - Final Transcript

Apr 02, 2020 • 05:00 pm ET

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Resources Connection Inc (NASDAQ:RECN) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Andrew Simon from JP Morgan. Please go ahead.

Analyst
Andrew Simon

Hi. I have two questions, The first one, I know you spoke a multiple times about that some of your work for your billable associates has been able to be delivered remotely. So my question is, what percentage of your billables have been able to continue their work remotely meaning the work is getting done and they continue to bill. That's my first question. And my second question is, I realize it's uncertain you're not giving potential revenue guidance for the fourth quarter, but my question is more just about decremental margins, in the sense that when revenue is down in the fourth quarter at what margin is that revenue, likely to be associated with?

Executive
Kate Duchene

Okay. Andrew, I'll take the first part of the question, then I'll turn it over, probably to Tim. I would say almost a 100% of our consultants who are billable are delivering remotely. So we've pivoted and been able to do that fairly seamlessly. And they continue to bill, they continue to issue their weekly status reports to clients and we're really following our clients leads. With respect to the margin question, Tim, I'll turn that to you or to Jenn.

Executive
Tim Brackney

I can take that. Andrew, could you repeat that question. I'm sorry, I'm on a cell phone, it broke up a little bit.

Analyst
Andrew Simon

Sure. So the question is, in the fourth quarter what might be decremental margins just to define it for you. It means when revenues are down in the fourth quarter, what margin will be associated with that revenue decline?

Executive
Tim Brackney

Well, it's hard for me to give you an answer that isn't speculative. What I would say is that, what we're trying to do from both the revenue preservation standpoint and to be flexible for our clients is that we are going to, we will make -- we'll have some downward pressure on our margins for as an investment in making sure that we are doing the right thing. But in terms of, as you can see from our trends today through the first bit of the quarter, our revenue has been strong and our margins have been strong. So it's difficult to put an absolute number on that, because tomorrow, I mean, the situation is so fluid. It feels like we have to kind of deal with these situations day-by-day, week-by-week.

Analyst
Andrew Simon

Okay. All right. Thank you.

Operator
Operator

Thank you. Our next question comes from Mark Marcon from Baird. Please go ahead.

Analyst
Mark Marcon

Good afternoon. Hope you guys were all staying safe. Just wondering with regards to the office reductions that you've got in place, what percentage of your revenue is associated with the practices that you're terminating?

Executive
Kate Duchene

Tim, do you want to take that. Do you have the idea of the eight offices?

Executive
Tim Brackney

I do. Mark, I'd like to hear you hope you're saying that as well. The eight office that we're closing, it's a very small percentage is