RESOURCES CONNECTION, INC.RGP

RESOURCES CONNECTION, INC. Leases Disclosure

10-KFiled Jul 28, 20252 min read
Leases
Lease cost components included within selling, general and administrative expenses in the Consolidated Statements of Operations were as follows (in thousands):
For the Years Ended
May 31, 2025May 25, 2024May 27, 2023
Operating lease cost$7,096 $7,280 $7,242 
Short-term lease cost297 192 118 
Variable lease cost1,367 1,586 1,279 
Sublease income (1)
(702)(740)(516)
Total lease cost$8,058 $8,318 $8,123 
(1)Sublease income represents rental income received by the Company as sublessor.
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:
As of
May 31, 2025		As of
May 25, 2024
Weighted-average remaining lease term6.2 years3.5 years
Weighted-average discount rate5.12%4.37%
Cash flow and other information related to operating leases is included in the following table (in thousands):
For the Years Ended
May 31, 2025May 25, 2024May 27, 2023
Cash paid for amounts included in the measurement of operating lease liabilities$7,005 $8,406 $9,258 
Right-of-use assets obtained in exchange for new operating lease obligations$16,252 $3,707 $4,688 
Future maturities of operating lease liabilities at May 31, 2025 are presented in the following table (in thousands):
Fiscal YearsOperating Lease Maturity
2026$6,657 
20274,909 
20284,491 
20293,638 
20302,902 
Thereafter7,713 
Total future lease payments30,310 
Less: interest(5,005)
Present value of operating lease liabilities$25,305 
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.

Historical Timeline

Fiscal YearFiled
2025Jul 28, 2025Showing above
2024Jul 22, 2024
2023Jul 25, 2023
2022Jul 28, 2022
2021Jul 23, 2021
2020Jul 27, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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