Long-Term Debt |
3 Months Ended |
|---|---|
Aug. 29, 2026 | |
| Debt Disclosure [Abstract] | |
| Long-Term Debt | Long-Term Debt On July 15, 2026, the Company, Resources Connection LLC, and the Company’s other domestic subsidiaries entered into a Revolving Credit, Guaranty and Security Agreement (the “2026 Credit Facility”) with the financial institutions party thereto (the “Lenders”), and PNC Bank, National Association, as agent for the Lenders. The 2026 Credit Facility provides for secured revolving loans, available in an amount up to the lesser of $30.0 million and a borrowing base formula tied to eligible receivables and eligible unbilled receivables and subject to established reserves, which includes a $5.0 million sublimit for the issuance of standby letters of credit and a $15.0 million sublimit for swing loans. The 2026 Credit Facility also includes an uncommitted option at any time prior to the third anniversary of the closing date to increase the amount of the revolving loans up to an additional $20.0 million; provided that the Company may not increase the 2026 Credit Facility more than two times during the term of the 2026 Credit Facility. The proceeds of the 2026 Credit Facility may be used to pay fees and expenses in connection with the transaction, provide for the Company’s working capital needs and reimburse drawings under letters of credit, finance a portion of future capital expenditures, and finance permitted dividends and distributions. The 2026 Credit Facility is scheduled to mature July 15, 2031. The obligations under the 2026 Credit Facility are secured by substantially all assets of the Company and the Company’s domestic subsidiaries. Borrowings under the 2026 Credit Facility will bear interest at a rate per annum of either, at the Company’s election, (i) Term SOFR (as defined in the 2026 Credit Facility) plus a margin ranging from 1.75% to 2.25% or (ii) the Alternate Base Rate (as defined in the 2026 Credit Facility), plus a margin of 0.75% to 1.25%, in either case, with the applicable margin depending on the Company’s Consolidated EBITDA (as defined in the 2026 Credit Facility). The Company is also obligated to pay other customary facility fees for a credit facility of this size and type. The 2026 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 dividends and distributions, merge or consolidate and make dispositions of assets and financial covenants to maintain a certain fixed charge coverage ratio and a certain minimum liquidity. Upon the occurrence of an event of default under the 2026 Credit Facility, the lenders may cease making loans, terminate the 2026 Credit Facility, and declare all amounts outstanding to be immediately due and payable. The 2026 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. In connection with entry into the 2026 Credit Facility, the Company terminated the 2025 Credit Facility, as defined below. The termination was accounted for as an extinguishment of the facility in accordance with the applicable accounting guidance. Accordingly, the Company recognized $0.3 million for the write-off of original debt issuance costs associated with the extinguishment within interest expense during the three months ended August 29, 2026. Debt issuance costs of $0.3 million were incurred in connection with entry into the 2026 Credit Facility and will be amortized to interest expense over the remaining term of the 2026 Credit Facility. Prior to July 15, 2026, the Company had a revolving credit facility with Bank of America, N.A., pursuant to the terms of the credit agreement dated July 2, 2025, by and among the Company and Resources Connection LLC, as borrowers, and all of the Company’s domestic subsidiaries, as guarantors, the lenders party thereto and Bank of America, N.A. as administrative agent, L/C issuer and the swingline lender (the “2025 Credit Facility”). The 2025 Credit Facility provided 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 included a $10.0 million sublimit for the issuance of standby letters of credit. The 2025 Credit Facility also included an option to increase the amount of the revolving loan up to an additional $15.0 million. The 2025 Credit Facility maturity date was November 30, 2029. The obligations under the 2025 Credit Facility were secured by substantially all assets of the Company, Resources Connection LLC and all of the Company’s domestic subsidiaries. As of August 29, 2026, the Company was compliant with all financial covenants under the 2026 Credit Facility. The Company had no debt outstanding under the 2026 Credit Facility as of August 29, 2026 and no debt outstanding under the 2025 Credit Facility as of May 30, 2026. However, the Company had $0.8 million of stand-alone letters of credit with Bank of America as of August 29, 2026 and $0.7 million of outstanding letters of credit issued under the 2025 Credit Facility as of May 30, 2026. As of August 29, 2026, there was $24.1 million of available borrowing capacity under the 2026 Credit Facility
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