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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Georgia						58-2213805
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)
600 Galleria Parkway						30339-5986
Suite 100						(Zip Code)
Atlanta, Georgia
(Address of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.  

¨  Large accelerated filer

☒

Accelerated filer

¨  Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, no par value			PRGX			Nasdaq Global Select Market

			Page No.
Part I. Financial Information
Item 1. Financial Statements (Unaudited)			1
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019			1
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2020 and 2019			2
Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019			3
Condensed Consolidated Statements of Shareholders' Equity for the Three and Six Months Ended June 30, 2020 and 2019			4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosures About Market Risk			32
Item 4. Controls and Procedures			33
Part II. Other Information
Item 1. Legal Proceedings			34
Item 1A. Risk Factors			34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			36
Signatures			37

						Three Months Ended June 30,																		Six Months Ended June 30,
						2020						2019						2020						2019
Revenue, net						$	39,011					$	41,974					$	75,850					$	80,778
Operating expenses:
Cost of revenue						20,584						26,312						43,118						51,547
Selling, general and administrative expenses						14,726						15,748						28,190						29,665
Depreciation of property, equipment and software assets						1,965						2,381						4,106						4,584
Amortization of intangible assets						828						872						1,657						1,734
Total operating expenses						38,103						45,313						77,071						87,530
Operating income (loss) from continuing operations						908						(3,339)						(1,221)						(6,752)
Foreign currency transaction (gains) losses on short-term intercompany balances						(819)						(77)						637						129
Interest expense, net						303						592						645						1,065
Other loss (income)						2						11						2						(8)
Income (loss) from continuing operations before income tax						1,422						(3,865)						(2,505)						(7,938)
Income tax expense						1,004						311						960						479
Net income (loss) from continuing operations						$	418					$	(4,176)					$	(3,465)					$	(8,417)
Discontinued operations:
Loss from discontinued operations						$	—					$	(103)					$	—					$	(258)
Net loss from discontinued operations						$	—					$	(103)					$	—					$	(258)
Net income (loss)						$	418					$	(4,279)					$	(3,465)					$	(8,675)
Basic income (loss) per common share (Note 2):
Basic income (loss) from continuing operations						$	0.02					$	(0.18)					$	(0.15)					$	(0.37)
Basic loss from discontinued operations						—						—						—						(0.01)
Total basic income (loss) per common share						$	0.02					$	(0.18)					$	(0.15)					$	(0.38)
Diluted income (loss) per common share (Note 2):
Diluted income (loss) from continuing operations						$	0.02					$	(0.18)					$	(0.15)					$	(0.37)
Diluted loss from discontinued operations						—						—						—						(0.01)
Total diluted income (loss) per common share						$	0.02					$	(0.18)					$	(0.15)					$	(0.38)
Weighted-average common shares outstanding (Note 2):
Basic						22,606						22,763						22,542						22,687
Diluted						22,716						22,763						22,542						22,687

						Three Months Ended June 30,																		Six Months Ended June 30,
						2020						2019						2020						2019
Net income (loss)						$	418					$	(4,279)					$	(3,465)					$	(8,675)
Foreign currency translation adjustments, net of tax						748						(269)						(1,200)						244
Comprehensive income (loss)						$	1,166					$	(4,548)					$	(4,665)					$	(8,431)

						June 30,						December 31,
						2020						2019
ASSETS
Current assets:
Cash and cash equivalents						$	21,061					$	14,982
Restricted cash						123						46
Receivables:
Contract receivables, less allowances of $1,379 in 2020 and $1,781 in 2019
Billed						32,748						38,201
Unbilled						3,312						4,911
						36,060						43,112
Employee advances and miscellaneous receivables, net						740						704
Total receivables						36,800						43,816
Prepaid expenses and other current assets						4,062						5,582
Total current assets						62,046						64,426
Property, equipment and software						66,950						63,557
Less accumulated depreciation and amortization						(47,813)						(45,811)
Property, equipment and software, net						19,137						17,746
Operating lease right-of-use assets (Note 9)						11,044						10,969
Goodwill						14,962						15,070
Intangible assets, less accumulated amortization of $48,206 in 2020 and $47,097 in 2019						9,714						11,506
Unbilled receivables						865						1,282
Deferred income taxes						3,636						3,921
Other assets						531						546
Total assets						$	121,935					$	125,466
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses						$	2,094					$	4,326
Accrued payroll and related expenses						14,070						12,951
Current portion of operating lease liabilities (Note 9)						4,077						3,717
Refund liabilities						4,152						4,513
Deferred revenue						1,970						2,217
Current portion of debt (Note 5)						—						17
Total current liabilities						26,363						27,741
Long-term debt (Note 5)						36,650						36,603
Long-term operating lease liabilities (Note 9)						7,368						7,435
Refund liabilities						21						9
Deferred income taxes (Note 8)						628						628
Total liabilities						71,030						72,416
Commitments and contingencies (Note 7)
Shareholders’ equity (Note 2):
Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 23,612,686 shares issued and outstanding at June 30, 2020 and 23,369,433 shares issued and outstanding at December 31, 2019						236						234
Additional paid-in capital						584,922						582,404
Accumulated deficit						(532,641)						(529,176)
Accumulated other comprehensive loss						(1,612)						(412)
Total shareholders’ equity						50,905						53,050
Total liabilities and shareholders' equity						$	121,935					$	125,466

						Common Stock
						Shares						Amount						Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Total Shareholders' Equity
Balance at March 31, 2020						23,595,079						$	236					$	583,161					$	(533,059)					$	(2,360)					$	47,978
Net income						—						—						—						418						—						418
Foreign currency translation adjustments						—						—						—						—						748						748
Issuances of common stock:
Restricted share awards						30,769						—						—						—						—						—
Restricted shares remitted by employees for taxes						(27,977)						—						(115)						—						—						(115)
Restricted stock unit settlement						17,519						—						—						—						—						—
Forfeited restricted share awards						(2,704)						—						—						—						—						—
Stock-based compensation expense						—						—						1,876						—						—						1,876
Balance at June 30, 2020						23,612,686						$	236					$	584,922					$	(532,641)					$	(1,612)					$	50,905
Balance at March 31, 2019						23,438,058						$	234					$	581,356					$	(519,852)					$	(508)					$	61,230
Net loss						—						—						—						(4,279)						—						(4,279)
Foreign currency translation adjustments						—						—						—						—						(269)						(269)
Issuances of common stock:
Restricted share awards						183,403						2						(2)						—						—						—
Restricted shares remitted by employees for taxes						(38,304)						—						(246)						—						—						(246)
Stock option exercises						35,319						—						170						—						—						170
Restricted stock unit settlement						17,517						—						—						—						—						—
Forfeited restricted share awards						(24,590)						—						—						—						—						—
Stock-based compensation expense						—						—						1,704						—						—						1,704
Balance at June 30, 2019						23,611,403						$	236					$	582,982					$	(524,131)					$	(777)					$	58,310

						Common Stock
						Shares						Amount						Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Total Shareholders' Equity
Balance at December 31, 2019						23,369,433						$	234					$	582,404					$	(529,176)					$	(412)					$	53,050
Net loss						—						—						—						(3,465)						—						(3,465)
Foreign currency translation adjustments						—						—						—						—						(1,200)						(1,200)
Issuances of common stock:
Restricted share awards						429,269						4						(4)						—						—						—
Restricted shares remitted by employees for taxes						(112,020)						(1)						(397)						—						—						(398)
Restricted stock unit settlement						61,521						—						—						—						—						—
Forfeited restricted share awards						(31,655)						—						—						—						—						—
Repurchase of common stock						(103,862)						(1)						(283)						—						—						(284)
Stock-based compensation expense						—						—						3,202						—						—						3,202
Balance at June 30, 2020						23,612,686						$	236					$	584,922					$	(532,641)					$	(1,612)					$	50,905
Balance at December 31, 2018						23,186,258						$	232					$	582,574					$	(515,456)					$	(1,021)					$	66,329
Net loss						—						—						—						(8,675)						—						(8,675)
Foreign currency translation adjustments						—						—						—						—						244						244
Issuances of common stock:
Restricted share awards						516,955						5						(5)						—						—						—
Restricted shares remitted by employees for taxes						(99,885)						(1)						(749)						—						—						(750)
Stock option exercises						45,380						—						221						—						—						221
Performance-based restricted stock unit settlement						203,524						2						(2)						—						—						—
Restricted stock unit settlement						27,516						—						—						—						—						—
Forfeited restricted share awards						(24,590)						—						—						—						—						—
Repurchase of common stock						(243,755)						(2)						(2,226)																		(2,228)
Stock-based compensation expense						—						—						3,169						—						—						3,169
Balance at June 30, 2019						23,611,403						$	236					$	582,982					$	(524,131)					$	(777)					$	58,310

						Six Months Ended June 30,
						2020						2019
Cash flows from operating activities:
Net loss						$	(3,465)					$	(8,675)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization						5,763						6,318
Operating lease right-of-use asset expense						2,195						2,248
Amortization of deferred loan costs						48						117
Noncash interest expense						643						—
Stock-based compensation expense						3,196						3,046
Foreign currency transaction losses on short-term intercompany balances						637						129
Deferred income taxes						338						—
Changes in operating assets and liabilities
Billed receivables						4,550						6,593
Unbilled receivables						2,018						(851)
Prepaid expenses and other current assets						1,438						(1,296)
Operating lease liabilities						(1,979)						—
Other assets						(53)						(1,567)
Accounts payable and accrued expenses						(3,890)						(2,930)
Accrued payroll and related expenses						1,326						(4,970)
Refund liabilities						(270)						(314)
Deferred revenue						(224)						(292)
Net cash provided by (used in) operating activities						12,271						(2,444)
Cash flows from investing activities:
Purchases of property, equipment and software, net of disposal proceeds						(5,620)						(7,640)
Net cash used in investing activities						(5,620)						(7,640)
Cash flows from financing activities:
Repayments of credit facility						(38,000)						(3,000)
Proceeds from credit facility						38,000						14,400
Payment of deferred loan costs						—						(394)
Payment of earnout liability related to business acquisitions						—						(479)
Restricted stock repurchased from employees for withholding taxes						(398)						(750)
Repurchases of common stock						(284)						(2,228)
Proceeds from option exercises						—						221
Net cash (used in) provided by financing activities						(682)						7,770
Effect of exchange rates on cash and cash equivalents						187						(55)
Net increase (decrease) in cash, cash equivalents and restricted cash						6,156						(2,369)
Cash, cash equivalents and restricted cash at beginning of period						15,028						14,019
Cash, cash equivalents and restricted cash at end of period						$	21,184					$	11,650
Supplemental disclosure of cash flow information:
Cash paid during the period for interest						$	716					$	385
Cash paid during the period for income taxes, net of refunds received						$	804					$	1,638

The accompanying Condensed Consolidated Financial Statements (Unaudited) of PRGX Global, Inc. and its wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions for the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

Except as otherwise indicated or unless the context otherwise requires, “PRGX,” “we,” “us,” “our” and the “Company” refer to PRGX Global, Inc. and its subsidiaries. For further information, refer to the Consolidated Financial Statements and the related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

A summary of the Company's significant accounting policies is included in Note 1 of the “Notes to Consolidated Financial Statements” contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company did not experience any significant changes during the quarter ended June 30, 2020 in any of the Critical Accounting Policies from those contained in the Company's Form 10-K for the year ended December 31, 2019. 

In December 2019, a novel strain of coronavirus was first identified, and in March 2020, the World Health Organization categorized COVID-19, the disease resulting from this coronavirus strain, as a pandemic. To help control the spread of the virus and protect the health and safety of our employees and customers, many of the Company's teams worldwide have been working remotely since the middle of March.

The Company evaluates the recoverability of goodwill annually in the fourth quarter of each year or sooner if events or changes in circumstances indicate that the carrying amount may exceed its fair value. The impairment test performed in the fourth quarter of 2019 indicated significant excess fair value over carrying value for the Recovery Audit Services reporting units. The Company evaluated whether there were indicators of impairment as of June 30, 2020 as a result of COVID-19 conditions including deterioration in the macro-economic environment and the volatility in our share price. While there were negative macro-economic factors, the positive evidence outweighed the negative evidence of the fair value of our reporting units more likely than not exceeding the carrying amount of those units as of June 30, 2020. Further, since the negative financial impacts on the Company from the COVID-19 pandemic have not been significant to date, COVID-19 considerations do not significantly affect the assumptions underpinning our long-term revenue and cash flow growth rates, operating models and business strategies. Therefore, the Company did not consider the COVID-19 pandemic to require an interim quantitative goodwill impairment analysis. As a result, no impairment charges for goodwill and indefinite-lived intangible assets were recorded during the three and six months ended June 30, 2020.

The Company also evaluated its remaining assets, particularly accounts receivable. The allowance for doubtful accounts is calculated based on historical experience and various other information available. The Company also assessed incremental risks due to the COVID-19 pandemic on our customers' financial viability. The Company did not experience a significant deterioration of its accounts receivable portfolio during the quarter ended June 30, 2020. The Company will continue to monitor the collectability of its accounts receivable balances.

The Company received an immaterial amount of COVID-19-related rent concessions for certain office space leases in the second quarter of 2020. Consistent with updated guidance from the Financial Accounting Standards Board (“FASB”) in April 2020, the Company elected to treat COVID-19-related rent concessions as variable rent. While the Company is having ongoing conversations with landlords, it does not expect significant concessions for the remainder of the year.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 pandemic and options to defer payroll tax payments. Based on evaluation of the CARES Act, the Company is deferring qualified payroll and other tax payments as permitted by the CARES Act.

The full extent of the future impact of COVID-19 on the Company’s operations is uncertain. Such events, including a prolonged or recurring outbreak, are generally outside of our control and could have a material adverse impact on our business, operating results and financial conditions in future reporting periods.

A summary of the new accounting standards issued by the FASB and included in the Accounting Standards Codification ("ASC") that apply to PRGX is included below:

Adopted by the Company in Fiscal Year 2020

FASB ASU 2018-13 - In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies are required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. Certain provisions of the ASU must be applied retrospectively, while others must be applied prospectively. The Company adopted this ASU on January 1, 2020. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.

FASB ASU 2018-15 - In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this ASU prospectively on January 1, 2020. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

FASB ASU 2016-13 - In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those annual periods, and early adoption is permitted. The Company is currently evaluating the effect that the adoption of this standard will have on the Company's condensed consolidated financial statements.

FASB ASU 2019-12 - In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies accounting for income taxes, changes the accounting for certain income tax transactions and makes certain improvements to the codification. These amendments will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the new standard to determine the impact it will have on the Company’s condensed consolidated financial statements.

FASB ASU 2020-04 - In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. Companies may adopt this guidance at any time but no later than December 31, 2022. The Company is currently evaluating the new standard to determine the impact it will have on the Company’s condensed consolidated financial statements.

The following table sets forth the computations of basic and diluted net income (loss) per common share for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share data):

						Three Months Ended June 30,																		Six Months Ended June 30,
						2020						2019						2020						2019
Numerator:
Net income (loss) from continuing operations						$	418					$	(4,176)					$	(3,465)					$	(8,417)
Net loss from discontinued operations						$	—					$	(103)					$	—					$	(258)
Denominator:
Weighted-average common shares outstanding						22,606						22,763						22,542						22,687
Effect of dilutive securities from stock-based compensation plans						110						—						—						—
Weighted-average diluted common shares outstanding						22,716						22,763						22,542						22,687
Basic net income (loss) per common share from continuing operations						$	0.02					$	(0.18)					$	(0.15)					$	(0.37)
Basic net loss per common share from discontinued operations						—						—						—						(0.01)
Total basic net income (loss) per common share						$	0.02					$	(0.18)					$	(0.15)					$	(0.38)
Diluted income (loss) per common share from continuing operations						$	0.02					$	(0.18)					$	(0.15)					$	(0.37)
Diluted loss per common share from discontinued operations						—						—						—						(0.01)
Total diluted income (loss) per common share						$	0.02					$	(0.18)					$	(0.15)					$	(0.38)
Anti-dilutive securities excluded from diluted net income (loss) per share calculation						4,011						4,277						4,120						4,277

The Company has two stock-based compensation plans under which outstanding equity awards have been granted, the 2008 Equity Incentive Plan ("2008 EIP") and the 2017 Equity Incentive Compensation Plan ("2017 EICP") (collectively, the "Plans"). No additional awards may be granted under the 2008 EIP. Awards granted outside of the Plans are referred to as inducement awards.

        During the three months ended June 30, 2020, equity awards were granted to non-employee directors, and in the six months ended June 30, 2020, equity awards were granted to non-employee directors and certain key employees. The awards included restricted stock, restricted stock units, and performance-based restricted stock units ("PBUs").

Summary of Grant Activity

			Three Months Ended June 30, 2020																		Six Months Ended June 30, 2020
			# of Awards Granted						Grant Date Fair Value						# of Awards Granted						Grant Date Fair Value
Restricted stock			30,769						$	120					429,269						$	1,830
Restricted stock units			123,076						480						142,076						562
PBUs			—						—						659,301						2,828
			153,845						$	600					1,230,646						$	5,220

•The restricted stock and restricted stock units vest one year from grant date.

•398,500 shares of the restricted stock vest over three years in approximately equal annual installments and 30,769 shares of the restricted stock vest one year from grant date.

•123,076 restricted stock units vest one year from grant date and 19,000 restricted stock units vest over three years in approximately equal annual installments.

•The vesting of the PBUs is subject to the satisfaction of certain specified financial performance conditions for the two-year performance period ending on December 31, 2021. PBUs that vest will be settled in shares of the Company's common stock. Stock-based compensation expense for these PBUs is being recognized at the target level of financial performance, as if 100% of the awards will vest. The Company reevaluates this likelihood on a quarterly basis.

Stock-based compensation expense for the three months ended June 30, 2020 and 2019 was $1.9 million and $1.7 million, respectively, and $3.2 million and $3.0 million for the six months ended June 30, 2020 and 2019, respectively, and is included in Selling, general and administrative expenses in the Company's Condensed Consolidated Statements of Operations. As of June 30, 2020, there was $8.6 million of unrecognized stock-based compensation expense related to the Company's outstanding equity awards which will be recognized over approximately 1.7 years.

The Company conducts its operations through the following three reportable segments:

Recovery Audit Services – Americas represents recovery audit services provided in the United States of America (“U.S.”), Canada and Latin America.

Recovery Audit Services – Europe/Asia-Pacific represents recovery audit services provided in Europe, Asia and the Pacific region.

Adjacent Services represents data transformation, spend analytics and associated advisory services.

The unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the three reportable segments is included in Corporate Support.

Discontinued Operations

There was no activity in the Company's discontinued operations segment for the three and six months ended June 30, 2020. The following table presents the discontinued operations of the Healthcare Claims Recovery Audit ("HCRA") services business in the Consolidated Statements of Operations, for the three and six months ended June 30, 2019 (in thousands):

						Three Months Ended June 30,						Six Months Ended June 30,
						2019						2019
Revenue, net						$	—					$	—
Cost of sales						96						245
Selling, general and administrative expense						7						13
Depreciation and amortization						—						—
Loss from discontinued operations before income taxes						$	(103)					$	(258)
Income tax expense						—						—
Loss from discontinued operations						$	(103)					$	(258)

The following table presents the discontinued operations of the HCRA services business in the Consolidated Statements of Cash Flows, for the six months ended June 30, 2019 (in thousands):

						Six Months Ended June 30,
						2019
Net cash (used in) provided by operating activities						$	(258)
Net cash (used in) provided by investing activities						—
Net cash (used in) provided by financing activities						—
Decrease in cash and cash equivalents						$	(258)

The Company evaluates the performance of its reportable segments based upon revenue and measures of profit or loss referred to as EBITDA and Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings from continuing operations before interest and taxes (“EBIT”), adjusted for depreciation and amortization (“EBITDA”), and then further adjusted for unusual and other significant items that management views as distorting the operating results of the various segments from period to period. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition-related charges and benefits (acquisition transaction costs, acquisition obligations classified as compensation, and fair value adjustments to acquisition-related contingent consideration), tangible and intangible asset impairment charges, certain litigation costs and litigation settlements, certain severance charges and foreign currency transaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant. The Company does not have any inter-segment revenue.

Segment information for the three and six months ended June 30, 2020 and 2019 (in thousands) is as follows:

						Recovery Audit Services – Americas						Recovery Audit Services – Europe/Asia- Pacific						Adjacent Services						Corporate Support						Total
Three Months Ended June 30, 2020
Revenue, net						$	26,962					$	11,157					$	892					$	—					$	39,011
Net income from continuing operations																														418
Income tax expense																														1,004
Interest expense, net																														303
EBIT						$	8,895					$	4,426					$	24					$	(11,620)					$	1,725
Depreciation of property, equipment and software						1,777						155						33						—						1,965
Amortization of intangible assets						408						41						379						—						828
EBITDA						$	11,080					$	4,622					$	436					$	(11,620)					$	4,518
Other loss						—						—						—						2						2
Foreign currency transaction (gains) losses on short-term intercompany balances						(176)						(752)						—						109						(819)
Transformation, severance, and other expenses						327						181						47						117						672
Investigation and settlement of employment matter						—						—						—						1,306						1,306
Stock-based compensation						—						—						—						1,876						1,876
Adjusted EBITDA from continuing operations						$	11,231					$	4,051					$	483					$	(8,210)					$	7,555

						Recovery Audit Services – Americas						Recovery Audit Services – Europe/Asia- Pacific						Adjacent Services						Corporate Support						Total
Three Months Ended June 30, 2019
Revenue, net						$	28,935					$	11,836					$	1,203					$	—					$	41,974
Net loss from continuing operations																														(4,176)
Income tax expense																														311
Interest expense, net																														592
EBIT						$	6,960					$	1,877					$	(2,914)					$	(9,196)					$	(3,273)
Depreciation of property, equipment and software						1,919						182						280						—						2,381
Amortization of intangible assets						438						48						386						—						872
EBITDA						$	9,317					$	2,107					$	(2,248)					$	(9,196)					$	(20)
Other loss						1						—						—						10						11
Foreign currency transaction (gains) losses on short-term intercompany balances						(106)						(99)						6						122						(77)
Transformation, severance, and other expenses						250						122						605						303						1,280
Stock-based compensation						—						—						—						1,662						1,662
Adjusted EBITDA from continuing operations						$	9,462					$	2,130					$	(1,637)					$	(7,099)					$	2,856

						Recovery Audit Services – Americas						Recovery Audit Services – Europe/Asia- Pacific						Adjacent Services						Corporate Support						Total
Six Months Ended June 30, 2020
Revenue, net						$	53,185					$	20,942					$	1,723					$	—					$	75,850
Net loss from continuing operations																														(3,465)
Income tax expense																														960
Interest expense, net																														645
EBIT						$	13,373					$	5,865					$	162					$	(21,260)					$	(1,860)
Depreciation of property, equipment and software						3,715						324						67						—						4,106
Amortization of intangible assets						816						83						758						—						1,657
EBITDA						$	17,904					$	6,272					$	987					$	(21,260)					$	3,903
Other loss						—						—						—						2						2
Foreign currency transaction (gains) losses on short-term intercompany balances						720						122						4						(209)						637
Transformation, severance, and other expenses						1,015						389						127						448						1,979
Investigation and settlement of employment matter						—						—						—						1,306						1,306
Stock-based compensation						—						—						—						3,196						3,196
Adjusted EBITDA from continuing operations						$	19,639					$	6,783					$	1,118					$	(16,517)					$	11,023

						Recovery Audit Services – Americas						Recovery Audit Services – Europe/Asia- Pacific						Adjacent Services						Corporate Support						Total
Six Months Ended June 30, 2019
Revenue, net						$	56,308					$	21,595					$	2,875					$	—					$	80,778
Net loss from continuing operations																														(8,417)
Income tax expense																														479
Interest expense, net																														1,065
EBIT						$	12,964					$	2,190					$	(5,059)					$	(16,968)					$	(6,873)
Depreciation of property, equipment and software						3,681						344						559						—						4,584
Amortization of intangible assets						876						85						773						—						1,734
EBITDA						$	17,521					$	2,619					$	(3,727)					$	(16,968)					$	(555)
Other loss (income)						1						9						—						(18)						(8)
Foreign currency transaction (gains) losses on short-term intercompany balances						(179)						300						—						8						129
Transformation, severance, and other expenses						378						245						623						731						1,977
Stock-based compensation						—						—						—						3,046						3,046
Adjusted EBITDA from continuing operations						$	17,721					$	3,173					$	(3,104)					$	(13,201)					$	4,589

        On March 14, 2019, the Company, as co-borrower with PRGX USA, Inc. (“PRGX-USA” and, collectively with the Company, the "Borrowers"), a wholly-owned subsidiary that is the Company’s principal domestic operating subsidiary, entered into a five-year Credit Agreement (the “BOA Credit Facility”) with Bank of America, N.A. (“BOA”) and Synovus Bank as the initial lenders thereunder, and with BOA as the letter-of-credit issuer thereunder, as the swingline lender thereunder, and as the administrative agent (the “Administrative Agent”) for the lenders from time to time party thereto. The BOA Credit Facility consists of a $60.0 million senior revolving credit facility (the “Revolver”), with a $5.0 million subfacility for the issuance of letters of credit, and a $5.0 million swingline loan subfacility (the “Swingline Loan”). The BOA Credit Facility is guaranteed by each of PRGX’s direct and indirect domestic wholly-owned subsidiaries (other than PRGX-USA), except for certain immaterial domestic subsidiaries. None of PRGX’s direct or indirect foreign subsidiaries have guaranteed the BOA Credit Facility. The BOA Credit Facility is secured by substantially all of the assets of PRGX, PRGX-USA and each guarantor (including the equity interests in substantially all of the Company’s domestic subsidiaries and up to sixty-five percent (65%) of the equity interests of certain of the Company’s first-tier material foreign subsidiaries).

        The BOA Credit Facility will mature on March 14, 2024. Interest is payable quarterly in arrears. There are no prepayment penalties in the event the Company elects to prepay and terminate the BOA Credit Facility prior to its scheduled maturity date, subject to breakage and redeployment costs in certain limited circumstances.

        The Revolver bears interest at a rate per annum comprised of a specified index rate based on LIBOR plus an applicable interest rate margin determined under the BOA Credit Facility. For U.S. Dollar-denominated loans under the Revolver, at the option of the Borrowers, such loans shall bear interest at a rate per annum equal to (x) the LIBOR daily floating rate plus an applicable interest rate margin determined under the BOA Credit Facility or (y) the base rate plus the applicable interest rate margin, each as determined under the BOA Credit Facility. Although the Company does not anticipate the need for Swingline Loans, were any Swingline Loans to be made they would bear interest at the base rate plus the applicable interest rate margin for base rate loans, each as determined under the BOA Credit Facility. The applicable interest rate margin varies from 1.50% per annum to 2.25% per annum, for LIBOR daily floating rate loans, and from 0.50% per annum to 1.25% per annum, for loans based on the base rate, and in either case depending on the Company’s consolidated leverage ratio, and is determined in accordance with a pricing grid under the BOA Credit Facility.

        The BOA Credit Facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financial statements and other reports and maintenance of existence. The negative covenants limit the ability of the Company, among other things, to incur debt, incur liens, make investments and sell assets, but does provide for certain permitted repurchases of shares of its capital stock and the declaration and payment of certain dividends on its capital stock. The financial covenants included in the BOA Credit Facility set forth a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio for the Company, each which will be tested on a quarterly basis; and with the Company having the ability to increase the maximum leverage ratio for a limited time when needed in connection with permitted acquisitions. In addition, the BOA Credit Facility includes customary events of default.

        As of June 30, 2020, there was $37.0 million in debt outstanding under the BOA Credit Facility that will be due March 14, 2024. The amount available for additional borrowing under the BOA Credit Facility was $23.0 million as of June 30, 2020. Based on the terms of the BOA Credit Facility, on June 30, 2020 the applicable interest rate (inclusive of the applicable interest rate margin) for LIBOR daily floating rate loans (the only type outstanding on June 30, 2020) was approximately 2.18%. As of June 30, 2020, the Company was required to pay a commitment fee of 0.25% per annum, payable quarterly, on the unused portion of the BOA Credit Facility.

Long-term debt as of June 30, 2020 and December 31, 2019 consists of the following (in thousands):

			As of June 30, 2020									As of December 31, 2019
Credit facility(1)			$	37,000					$	37,000
DFC (2)			(350)