PRGX Global, Inc. (Nasdaq:PRGX), a global leader in Recovery Audit
and Spend Analytics services, today announced its unaudited
financial results for the second quarter and six months ended June
30, 2016.
“The highlight of our second quarter results is the performance
of our largest business, Retail Recovery Audit, which grew revenue
by 4.4% in the Americas and 1.5% globally compared to the same
period last year on a constant dollar basis. Our
investments in audit acceleration and high performance technology
infrastructure significantly contributed to this success and we
believe we are well positioned to continue this growth into the
second half of 2016,” said Ron Stewart, president and chief
executive officer.
“After experiencing contracting delays in the first quarter, we
also had a strong second quarter in our Adjacent Services business,
growing revenue by 30% compared to the prior year on a constant
dollar basis and after adjusting for the sale of our document
service business in 2015,” continued Stewart.
“During the second quarter, we continued to make solid progress
on our path to sustainable revenue growth with revenues essentially
flat year over year on a constant dollar basis and adjusted for the
sale of the document services business. We continue to invest
in our European audit operations, global business development
resources and emerging growth platforms as we position the
company for second half and longer term revenue growth,” concluded
Stewart.
Consolidated Results from Continuing Operations
for the Three Months Ended June 30, 2016
Consolidated revenue from continuing operations for the second
quarter of 2016 was $35.3 million compared to $37.0 million for the
same period last year. On a constant dollar basis adjusted
for changes in foreign exchange rates, revenue decreased by 1.8% in
2016 compared to the same period in 2015. Revenue for the
Americas Recovery Audit segment in the second quarter of 2016
decreased 0.9% compared to the second quarter of 2015. On a
constant dollar basis, Recovery Audit - Americas revenue increased
1.3% after excluding revenue from a large client that filed
bankruptcy in 2015. Revenue for the Europe/Asia-Pacific
Recovery Audit segment declined 12.6% for the second quarter of
2016 compared to the same period in 2015. On a constant
dollar basis, the year over year decline in Recovery Audit -
Europe/Asia-Pacific revenue was 7.5%. Revenue for the
Adjacent Services segment decreased 13.3% in the second quarter of
2016 compared to the same period in 2015. On a constant
dollar basis, Adjacent Services revenue increased 30.2% after
excluding the document services business we sold in the third
quarter of 2015.
Total cost of revenue from continuing operations for the second
quarter of 2016 was $23.4 million, or 66.4% of revenue, compared to
$24.1 million, or 65.2% of revenue, in the same period last year.
This increase was primarily related to the Company’s costs
associated with new regional senior operations leaders that were
not in place in the second quarter of 2015, which were partially
offset by operational cost and productivity improvements.
SG&A expenses from continuing operations for the second
quarter of 2016 were $9.6 million compared to $9.2 million in the
prior year period. This increase was primarily driven by
increases in compensation costs including investments associated
with new sales personnel who were not in place in the second
quarter of 2015, and an increase in legal and U.S. healthcare
benefit costs.
Consolidated net income (loss) from continuing operations for
the three months ended June 30, 2016 was essentially breakeven
compared to net income of $1.8 million, or $0.07 per basic and
diluted share, for the same period in 2015.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization (Adjusted EBITDA) from continuing operations for the
second quarter of 2016 was $3.5 million, or 9.9% of revenue,
compared to Adjusted EBITDA of $6.1 million, or 16.4% of revenue,
in the second quarter of 2015. Schedule 3 attached to this
press release provides a reconciliation of net income (loss) to
each of EBIT (Earnings Before Interest and Taxes), EBITDA and
Adjusted EBITDA.
Consolidated Results from Continuing Operations
for the Six Months Ended June 30, 2016
Consolidated revenue from continuing operations for the six
months ended June 30, 2016 was $66.5 million compared to $70.0
million for the same period last year. On a constant dollar
basis adjusted for changes in foreign exchange rates, revenue
decreased by 2.2% in 2016 compared to the same period in
2015. Revenue for the Americas Recovery Audit segment for the
six months ended June 30, 2016 decreased 2.3% compared to the same
period in 2015. On a constant dollar basis, Recovery Audit -
Americas revenue was essentially unchanged after excluding
revenue from the large client that filed bankruptcy in 2015.
Revenue for the Europe/Asia-Pacific Recovery Audit segment declined
6.8% for the six months ended June 30, 2016 compared to the same
period in 2015. On a constant dollar basis, the decline in Recovery
Audit - Europe/Asia-Pacific revenue was 2.1%. Revenue for the
Adjacent Services segment decreased $1.1 million for the six months
ended June 30, 2016 compared to the same period in 2015. On a
constant dollar basis, Adjacent Services revenue was essentially
unchanged excluding the documents service business which was sold
in the third quarter of 2015.
Total cost of revenue from continuing operations for the six
months ended June 30, 2016 was $45.1 million, or 67.9% of revenue,
compared to $47.3 million, or 67.6% of revenue, for the same period
in 2015.
SG&A expenses from continuing operations for the six months
ended June 30, 2016 were $18.5 million compared to $17.1 million in
the prior year period.
Consolidated net income (loss) from continuing operations for
the six months ended June 30, 2016 was essentially breakeven
compared to a net loss of $(0.4) million, or loss per basic and
diluted share of $(0.02), for the same period in 2015.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization (Adjusted EBITDA) from continuing operations for the
six months ended June 30, 2016 was $5.5 million, or 8.3% of
revenue, compared to Adjusted EBITDA of $9.2 million, or 13.1% of
revenue, in the 2015 period. Schedule 3 attached to this press
release provides a reconciliation of net income (loss) to each of
EBIT (Earnings Before Interest and Taxes), EBITDA and Adjusted
EBITDA.
Cash Flow and Liquidity
Net cash provided by operating activities for the second quarter
of 2016 was $0.5 million compared to $2.0 million in the second
quarter of the prior year, and $5.5 million for the six months
ended June 30, 2016 compared to $7.5 million in the same period in
the prior year. At June 30, 2016, the Company had
unrestricted cash and cash equivalents of $15.2 million, no
borrowings against its $20.0 million revolving credit facility, and
no bank debt outstanding.
Stock Repurchase Program
Since the February 2014 announcement of the Company’s stock
repurchase program, as of June 30, 2016, the Company has
repurchased 8.6 million shares, or 28.6% of its common stock
outstanding on the date of the announcement. As previously
announced in October 2015, the Company’s Board of Directors
approved a $10 million increase (to $50 million) in the program and
extended the duration of the program to December 31, 2016.
The Company repurchased 0.9 million shares of its outstanding
common stock for an aggregate cost of $3.6 million in the six
months ended June 30, 2016. As of July 20, 2016, the Company
had approximately 21.8 million shares of common stock
outstanding.
Second Quarter Earnings
Call
As previously announced, management will hold a conference call
later this morning at 8:30 AM (Eastern time) to discuss the
Company’s second quarter 2016 financial results. To access
the conference call, listeners in the U.S. and Canada should dial
(877) 755-7423 at least 5 minutes prior to the start of the
conference. Listeners outside the U.S. and Canada should dial
(678) 894-3069. To be admitted to the call, listeners should
use passcode 45168761.
This teleconference will also be audiocast on the Internet at
www.prgx.com (click on "Events & Presentations" under
"Investors"). A replay of the audiocast will be available at
the same location on www.prgx.com beginning approximately two hours
after the conclusion of the live audiocast, extending through
September 30, 2016. Please note that the Internet audiocast
is “listen-only.” Microsoft Windows Media Player is required to
access the live audiocast and the replay and can be downloaded from
www.microsoft.com/windows/mediaplayer.
About PRGX
PRGX Global, Inc. is a global leader in Recovery Audit and Spend
Analytics services. With over 1,400 employees, the Company
serves clients in more than 30 countries and provides its services
to 75% of the top 20 global retailers and over 20% of the top 50
companies in the Fortune 500. PRGX delivers more than $1
billion in cash flow improvement for its clients each year.
The creator of the recovery audit industry more than 40 years ago,
PRGX continues to innovate through technology and expanded service
offerings. In addition to Recovery Audit, the Company
provides Contract Compliance, Spend Analytics and Supplier
Information Management services to improve clients’ financial
performance and manage risk. For additional information on
PRGX, please visit www.prgx.com
Forward-Looking Statements
In addition to historical information, this press release
includes certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such
statements include both implied and express statements regarding
the Company's overall condition and growth prospects, the Company's
execution of its business strategy, and the Company's investments
in, and opportunities associated with, audit acceleration and its
high performance technology infrastructure, European audit
operations, global business development resources and
emerging growth platforms. Such forward-looking
statements are not guarantees of future performance and are subject
to risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to differ
materially from the historical results or from any results
expressed or implied by such forward-looking statements.
Risks that could affect the Company's future performance
include revenue that does not meet expectations or justify costs
incurred, the Company's ability to develop material sources of new
revenue in addition to revenue from its core recovery audit
services, changes in the market for the Company's services, the
Company's ability to retain and attract qualified personnel, the
Company's ability to integrate recent and future acquisitions,
uncertainty in the credit markets, the Company's ability to
maintain compliance with its financial covenants, client
bankruptcies, loss of major clients, and other risks generally
applicable to the Company's business. For a discussion of
other risk factors that may impact the Company's business, please
see the Company's filings with the Securities and Exchange
Commission, including its Form 10-K filed on March 15, 2016.
The Company disclaims any obligation or duty to update or
modify these forward-looking statements
Non-GAAP Financial
Measures
EBIT, EBITDA and Adjusted EBITDA are all "non-GAAP financial
measures" presented as supplemental measures of the Company’s
performance. They are not presented in accordance with
accounting principles generally accepted in the United States, or
GAAP. The Company believes these measures provide additional
meaningful information in evaluating its performance over time, and
that the rating agencies and a number of lenders use EBITDA and
similar measures for similar purposes. In addition, a measure
similar to Adjusted EBITDA is used in the restrictive covenants
contained in the Company’s secured credit facility. However,
EBIT, EBITDA and Adjusted EBITDA have limitations as analytical
tools, and you should not consider them in isolation, or as
substitutes for analysis of the Company’s results as reported under
GAAP. In addition, in evaluating EBIT, EBITDA and Adjusted
EBITDA, you should be aware that, as described above, the
adjustments may vary from period to period and in the future the
Company will incur expenses such as those used in calculating these
measures. The Company’s presentation of these measures should
not be construed as an inference that future results will be
unaffected by unusual or nonrecurring items. Schedule 3 to
this press release provides a reconciliation of net income (loss)
to each of EBIT, EBITDA and Adjusted EBITDA.
This news release was distributed by
GlobeNewswire, www.globenewswire.com
|
|
SCHEDULE 1 |
|
PRGX Global, Inc. and
Subsidiaries |
|
Condensed Consolidated Statements of
Operations |
|
(Amounts in thousands, except per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Six Months |
|
|
Ended June 30, |
|
Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
35,291 |
|
|
$ |
36,995 |
|
|
$ |
66,524 |
|
|
$ |
69,980 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
23,431 |
|
|
|
24,111 |
|
|
|
45,077 |
|
|
|
47,278 |
|
|
|
Selling,
general and administrative expenses |
|
9,620 |
|
|
|
9,185 |
|
|
|
18,468 |
|
|
|
17,129 |
|
|
|
Depreciation of property and equipment |
|
1,216 |
|
|
|
1,294 |
|
|
|
2,448 |
|
|
|
2,573 |
|
|
|
Amortization of intangible assets |
|
395 |
|
|
|
754 |
|
|
|
789 |
|
|
|
1,500 |
|
|
|
Total
operating expenses |
|
34,662 |
|
|
|
35,344 |
|
|
|
66,782 |
|
|
|
68,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
629 |
|
|
|
1,651 |
|
|
|
(258 |
) |
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency transaction (gains) losses |
|
|
|
|
|
|
|
|
|
on
short-term intercompany balances |
|
196 |
|
|
|
(416 |
) |
|
|
(811 |
) |
|
|
1,276 |
|
|
Interest
expense (income), net |
|
(12 |
) |
|
|
(53 |
) |
|
|
(41 |
) |
|
|
(95 |
) |
|
Other
(income) loss |
|
18 |
|
|
|
- |
|
|
|
28 |
|
|
|
- |
|
|
|
Income
(loss) from continuing operations before income taxes |
|
427 |
|
|
|
2,120 |
|
|
|
566 |
|
|
|
319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
460 |
|
|
|
296 |
|
|
|
664 |
|
|
|
751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) from continuing operations |
$ |
(33 |
) |
|
$ |
1,824 |
|
|
$ |
(98 |
) |
|
$ |
(432 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Income
(loss) from discontinued operations |
$ |
(559 |
) |
|
$ |
(727 |
) |
|
|
(1,046 |
) |
|
|
(1,428 |
) |
|
Other
(income) loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Income tax
expense (benefit) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Net income
(loss) from discontinued operations |
|
(559 |
) |
|
|
(727 |
) |
|
|
(1,046 |
) |
|
|
(1,428 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
(592 |
) |
|
$ |
1,097 |
|
|
$ |
(1,144 |
) |
|
$ |
(1,860 |
) |
|
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per common share: |
|
|
|
|
|
|
|
|
Basic from
continuing operations |
|
(0.00 |
) |
|
|
0.07 |
|
|
|
(0.00 |
) |
|
|
(0.02 |
) |
|
Basic from
discontinued operations |
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
Total basic
earnings (loss) per common share |
|
(0.03 |
) |
|
|
0.04 |
|
|
|
(0.05 |
) |
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per common share: |
|
|
|
|
|
|
|
|
Diluted
from continuing operations |
|
(0.00 |
) |
|
|
0.07 |
|
|
|
(0.00 |
) |
|
|
(0.02 |
) |
|
Diluted
from discontinued operations |
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
Total
diluted earnings (loss) per common share |
|
(0.03 |
) |
|
|
0.04 |
|
|
|
(0.05 |
) |
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
21,969 |
|
|
|
26,497 |
|
|
|
22,202 |
|
|
|
26,446 |
|
|
|
Diluted |
|
21,969 |
|
|
|
26,553 |
|
|
|
22,202 |
|
|
|
26,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 2 |
|
PRGX Global, Inc. and
Subsidiaries |
|
Condensed Consolidated Balance Sheets |
|
(Amounts in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
$ |
15,174 |
|
|
$ |
15,122 |
|
|
|
Restricted
cash |
|
|
|
|
144 |
|
|
|
48 |
|
|
|
Receivables: |
|
|
|
|
|
|
|
|
|
Contract
receivables, net |
|
|
25,882 |
|
|
|
28,543 |
|
|
|
|
Employee
advances and miscellaneous receivables, net |
|
|
1,675 |
|
|
|
1,740 |
|
|
|
|
|
Total
receivables |
|
|
|
27,557 |
|
|
|
30,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses and other current assets |
|
|
2,911 |
|
|
|
2,323 |
|
|
|
|
|
Total current
assets |
|
|
|
45,786 |
|
|
|
47,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
|
11,120 |
|
|
|
11,580 |
|
|
Goodwill |
|
|
|
|
|
11,729 |
|
|
|
11,810 |
|
|
Intangible
assets, net |
|
|
|
5,874 |
|
|
|
6,684 |
|
|
Deferred
income taxes |
|
|
|
1,628 |
|
|
|
1,361 |
|
|
Other
assets |
|
|
|
|
1,283 |
|
|
|
1,180 |
|
|
Noncurrent
assets of discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
|
|
Total
assets |
|
|
$ |
77,420 |
|
|
$ |
80,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
6,834 |
|
|
$ |
5,966 |
|
|
|
Accrued
payroll and related expenses |
|
|
10,920 |
|
|
|
11,278 |
|
|
|
Refund
liabilities and deferred revenue |
|
|
8,913 |
|
|
|
7,887 |
|
|
|
Other current
liabilities |
|
|
|
39 |
|
|
|
1,004 |
|
|
|
|
|
Total current
liabilities |
|
|
26,706 |
|
|
|
26,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Refund
liabilities |
|
|
|
|
786 |
|
|
|
752 |
|
|
Other
long-term liabilities |
|
|
|
1,322 |
|
|
|
1,089 |
|
|
|
|
|
Total
liabilities |
|
|
|
28,814 |
|
|
|
27,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
|
Common
stock |
|
|
|
|
218 |
|
|
|
227 |
|
|
|
Additional
paid-in capital |
|
|
|
573,363 |
|
|
|
575,532 |
|
|
|
Accumulated
deficit |
|
|
|
(525,282 |
) |
|
|
(524,138 |
) |
|
|
Accumulated
other comprehensive income |
|
|
307 |
|
|
|
794 |
|
|
|
|
|
Total
shareholders' equity |
|
|
48,606 |
|
|
|
52,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
77,420 |
|
|
$ |
80,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 3 |
PRGX Global, Inc. and
Subsidiaries |
Reconciliation of Net Income (Loss) to EBIT,
EBITDA and Adjusted EBITDA |
(Amounts in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Six Months |
|
|
|
|
Ended June 30, |
|
Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Reconciliation of net loss to EBIT, EBITDA |
|
|
|
|
|
|
|
|
|
and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(592 |
) |
|
$ |
1,097 |
|
|
$ |
(1,144 |
) |
|
$ |
(1,860 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
|
460 |
|
|
|
296 |
|
|
|
664 |
|
|
|
751 |
|
|
Interest
expense (income), net |
|
|
(12 |
) |
|
|
(53 |
) |
|
|
(41 |
) |
|
|
(95 |
) |
|
|
|
|
|
|
|
|
|
|
|
EBIT |
|
|
|
(144 |
) |
|
|
1,340 |
|
|
|
(521 |
) |
|
|
(1,204 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
|
1,219 |
|
|
|
1,304 |
|
|
|
2,455 |
|
|
|
2,596 |
|
|
Amortization of intangible assets |
|
|
395 |
|
|
|
754 |
|
|
|
789 |
|
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
1,470 |
|
|
|
3,398 |
|
|
|
2,723 |
|
|
|
2,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency transaction (gains) losses |
|
|
|
|
|
|
|
|
|
on short-term intercompany balances |
|
|
196 |
|
|
|
(416 |
) |
|
|
(811 |
) |
|
|
1,276 |
|
|
Other Gains and Losses |
|
|
18 |
|
|
|
- |
|
|
|
28 |
|
|
|
- |
|
|
Transformation severance and related |
|
|
|
|
|
|
|
|
|
expenses |
|
|
557 |
|
|
|
562 |
|
|
|
1,095 |
|
|
|
708 |
|
|
Stock-based
compensation |
|
|
1,035 |
|
|
|
2,017 |
|
|
|
1,799 |
|
|
|
3,149 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
3,276 |
|
|
$ |
5,561 |
|
|
$ |
4,834 |
|
|
$ |
8,025 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA from continuing operations |
|
$ |
3,500 |
|
|
$ |
6,067 |
|
|
$ |
5,537 |
|
|
$ |
9,220 |
|
Adjusted
EBITDA from discontinued operations |
|
$ |
(224 |
) |
|
$ |
(506 |
) |
|
$ |
(703 |
) |
|
$ |
(1,195 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT, EBITDA and Adjusted EBITDA are all "non-GAAP financial
measures" presented as supplemental measures of our
performance. They are not presented in accordance with
accounting principles generally accepted in the United States, or
GAAP. The Company believes these measures provide additional
meaningful information in evaluating the Company's performance over
time, and that the rating agencies and a number of lenders use
EBIT, EBITDA and similar measures for similar purposes. In
addition, a measure similar to Adjusted EBITDA is used in the
restrictive covenants contained in the Company’s secured credit
facility. However, EBIT, EBITDA and Adjusted EBITDA have
limitations as analytical tools, and you should not consider them
in isolation, or as substitutes for analysis of our results as
reported under GAAP. In addition, in evaluating EBIT, EBITDA and
Adjusted EBITDA, you should be aware that in the future we will
incur expenses such as those used in calculating these measures.
Our presentation of these measures should not be construed as an
inference that our future results will be unaffected by unusual or
nonrecurring items. |
|
|
|
SCHEDULE 4 |
|
PRGX Global, Inc. and
Subsidiaries |
|
Condensed Consolidated Statements of Cash
Flows |
|
(Amounts in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Six Months |
|
|
|
|
|
Ended June 30, |
|
Ended June 30, |
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
Cash flows
from operating activities: |
|
|
|
|
|
|
|
|
|
Net Income
(loss) |
$ |
(592 |
) |
|
$ |
1,097 |
|
|
$ |
(1,144 |
) |
|
$ |
(1,861 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net loss to net cash |
|
|
|
|
|
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
1,600 |
|
|
|
2,058 |
|
|
|
3,244 |
|
|
|
4,096 |
|
|
|
|
|
Stock-based
compensation expense |
|
1,026 |
|
|
|
2,017 |
|
|
|
1,799 |
|
|
|
3,149 |
|
|
|
|
|
Foreign currency
transaction (gains) losses on |
|
|
|
|
|
|
|
|
|
|
|
short-term
intercompany balances |
|
196 |
|
|
|
(416 |
) |
|
|
(811 |
) |
|
|
1,276 |
|
|
|
|
|
(Increase)/Decrease in
receivables |
|
(816 |
) |
|
|
309 |
|
|
|
2,267 |
|
|
|
6,393 |
|
|
|
|
|
Increase (decrease) in
accounts payable, accrued |
|
|
|
|
|
|
|
|
|
|
|
payroll and
other accrued expenses |
|
(692 |
) |
|
|
(1,729 |
) |
|
|
663 |
|
|
|
(5,162 |
) |
|
|
|
|
Other, primarily
changes in assets and liabilities |
|
(178 |
) |
|
|
(1,278 |
) |
|
|
(556 |
) |
|
|
(409 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
544 |
|
|
|
2,058 |
|
|
|
5,462 |
|
|
|
7,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
|
Purchases
of property and equipment, net of disposals |
|
(1,115 |
) |
|
|
(1,081 |
) |
|
|
(2,138 |
) |
|
|
(2,197 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
(1,115 |
) |
|
|
(1,081 |
) |
|
|
(2,138 |
) |
|
|
(2,197 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
|
|
|
|
|
Repurchase
of common stock |
|
(1,034 |
) |
|
|
(4,852 |
) |
|
|
(3,658 |
) |
|
|
(10,340 |
) |
|
|
Other,
net |
|
(95 |
) |
|
|
(229 |
) |
|
|
(11 |
) |
|
|
(235 |
) |
|
|
|
|
Net cash
(used in) provided by financing activities |
|
(1,129 |
) |
|
|
(5,081 |
) |
|
|
(3,669 |
) |
|
|
(10,575 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rates on cash and cash equivalents |
|
1,175 |
|
|
|
398 |
|
|
|
397 |
|
|
|
(763 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(decrease) increase in cash and cash equivalents |
|
(525 |
) |
|
|
(3,706 |
) |
|
|
52 |
|
|
|
(6,053 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of period |
|
15,699 |
|
|
|
23,388 |
|
|
|
15,122 |
|
|
|
25,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at end of period |
$ |
15,174 |
|
|
$ |
19,682 |
|
|
$ |
15,174 |
|
|
$ |
19,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 5 |
|
PRGX Global, Inc. and
Subsidiaries |
|
Results by Operating Segment * |
|
(Amounts in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
25,122 |
|
|
$ |
25,350 |
|
|
$ |
(228 |
) |
|
|
$ |
46,689 |
|
|
$ |
47,767 |
|
|
$ |
(1,078 |
) |
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
8,698 |
|
|
|
9,950 |
|
|
|
(1,252 |
) |
|
|
|
17,947 |
|
|
|
19,255 |
|
|
|
(1,308 |
) |
|
|
Adjacent Services |
|
1,471 |
|
|
|
1,695 |
|
|
|
(224 |
) |
|
|
|
1,888 |
|
|
|
2,958 |
|
|
|
(1,070 |
) |
|
|
Total |
$ |
35,291 |
|
|
$ |
36,995 |
|
|
$ |
(1,704 |
) |
|
|
$ |
66,524 |
|
|
$ |
69,980 |
|
|
$ |
(3,456 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
15,614 |
|
|
$ |
15,162 |
|
|
$ |
(452 |
) |
|
|
$ |
29,938 |
|
|
$ |
30,133 |
|
|
$ |
195 |
|
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
6,261 |
|
|
|
6,607 |
|
|
|
346 |
|
|
|
|
12,373 |
|
|
|
13,044 |
|
|
|
671 |
|
|
|
Adjacent Services |
|
1,556 |
|
|
|
2,342 |
|
|
|
786 |
|
|
|
|
2,766 |
|
|
|
4,101 |
|
|
|
1,335 |
|
|
|
Total |
$ |
23,431 |
|
|
$ |
24,111 |
|
|
$ |
680 |
|
|
|
$ |
45,077 |
|
|
$ |
47,278 |
|
|
$ |
2,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
2,171 |
|
|
$ |
2,442 |
|
|
$ |
271 |
|
|
|
$ |
4,310 |
|
|
$ |
3,963 |
|
|
$ |
(347 |
) |
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
1,608 |
|
|
|
1,360 |
|
|
|
(248 |
) |
|
|
|
3,138 |
|
|
|
2,926 |
|
|
|
(212 |
) |
|
|
Adjacent Services |
|
216 |
|
|
|
198 |
|
|
|
(18 |
) |
|
|
|
336 |
|
|
|
398 |
|
|
|
62 |
|
|
|
Corporate |
|
5,625 |
|
|
|
5,185 |
|
|
|
(440 |
) |
|
|
|
10,684 |
|
|
|
9,842 |
|
|
|
(842 |
) |
|
|
Total |
$ |
9,620 |
|
|
$ |
9,185 |
|
|
$ |
(435 |
) |
|
|
$ |
18,468 |
|
|
$ |
17,129 |
|
|
$ |
(1,339 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
936 |
|
|
$ |
979 |
|
|
$ |
43 |
|
|
|
$ |
1,928 |
|
|
$ |
1,948 |
|
|
$ |
20 |
|
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
140 |
|
|
|
153 |
|
|
|
13 |
|
|
|
|
238 |
|
|
|
306 |
|
|
|
68 |
|
|
|
Adjacent Services |
|
140 |
|
|
|
162 |
|
|
|
22 |
|
|
|
|
282 |
|
|
|
319 |
|
|
|
37 |
|
|
|
Total |
$ |
1,216 |
|
|
$ |
1,294 |
|
|
$ |
78 |
|
|
|
$ |
2,448 |
|
|
$ |
2,573 |
|
|
$ |
125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
373 |
|
|
$ |
441 |
|
|
$ |
68 |
|
|
|
$ |
745 |
|
|
$ |
882 |
|
|
$ |
137 |
|
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
- |
|
|
|
280 |
|
|
|
280 |
|
|
|
|
- |
|
|
|
553 |
|
|
|
553 |
|
|
|
Adjacent Services |
|
22 |
|
|
|
33 |
|
|
|
11 |
|
|
|
|
44 |
|
|
|
65 |
|
|
|
21 |
|
|
|
Total |
$ |
395 |
|
|
$ |
754 |
|
|
$ |
359 |
|
|
|
$ |
789 |
|
|
$ |
1,500 |
|
|
$ |
711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
6,028 |
|
|
$ |
6,326 |
|
|
$ |
(298 |
) |
|
|
$ |
9,768 |
|
|
$ |
10,841 |
|
|
$ |
(1,073 |
) |
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
689 |
|
|
|
1,550 |
|
|
|
(861 |
) |
|
|
|
2,198 |
|
|
|
2,426 |
|
|
|
(228 |
) |
|
|
Adjacent Services |
|
(463 |
) |
|
|
(1,040 |
) |
|
|
577 |
|
|
|
|
(1,540 |
) |
|
|
(1,925 |
) |
|
|
385 |
|
|
|
Corporate |
|
(5,625 |
) |
|
|
(5,185 |
) |
|
|
(440 |
) |
|
|
|
(10,684 |
) |
|
|
(9,842 |
) |
|
|
(842 |
) |
|
|
Total |
$ |
629 |
|
|
$ |
1,651 |
|
|
$ |
(1,022 |
) |
|
|
$ |
(258 |
) |
|
$ |
1,500 |
|
|
$ |
(1,758 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Audit Services
- Americas |
$ |
7,613 |
|
|
$ |
7,854 |
|
|
$ |
(241 |
) |
|
|
$ |
12,861 |
|
|
$ |
13,835 |
|
|
$ |
(974 |
) |
|
|
Recovery Audit Services
- Europe/Asia-Pacific |
|
855 |
|
|
|
2,186 |
|
|
|
(1,331 |
) |
|
|
|
2,532 |
|
|
|
3,553 |
|
|
|
(1,021 |
) |
|
|
Adjacent Services |
|
(301 |
) |
|
|
(831 |
) |
|
|
530 |
|
|
|
|
(1,214 |
) |
|
|
(1,511 |
) |
|
|
297 |
|
|
|
Corporate |
|
(4,667 |
) |
|
|
(3,142 |
) |
|
|
(1,525 |
) |
|
|
|
(8,642 |
) |
|
|
(6,658 |
) |
|
|
(1,984 |
) |
|
|
Total |
$ |
3,500 |
|
|
$ |
6,067 |
|
|
$ |
(2,567 |
) |
|
|
$ |
5,537 |
|
|
$ |
9,219 |
|
|
$ |
(3,682 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The Recovery Audit Services - Americas
segment represents retail, commercial and contract compliance
recovery audit services provided in the United States, Canada and
Latin America. The Recovery Audit Services - Europe/Asia-Pacific
segment represents retail, commercial and contract compliance
recovery audit services provided in Europe, Asia and the Pacific
region. The Adjacent Services segment represents spend analytics
and supplier information management services. |
|
CONTACT: PRGX Global, Inc.
investor-relations@prgx.com
Phone: 770-779-3011
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