Updates 2019 Annual Revenue and Adjusted EBITDA Guidance
ATLANTA, July 30, 2019 (GLOBE NEWSWIRE) — 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, 2019.
Quarterly Highlights
- Revenue from continuing operations of $42.0 million, essentially unchanged from the prior year, and growth of 1.2% on a currency adjusted basis
- Adjusted EBITDA from continuing operations of $2.9 million and net loss from continuing operations of $4.2 million
- Significant cost reduction and business line rationalization underway to improve Adjusted EBITDA and free cash flow from operations; Includes goal to make Adjacent Services segment breakeven by the end of 2019
- Revised annual guidance for 2019 to revenue of between $172 million to $178 million and Adjusted EBITDA of between $25 million to $27 million
- Preliminary expectation for 2020 to achieve at least 17% Adjusted EBITDA margin and low- to mid-single digit revenue growth
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
| Selected Financial Data (dollars in thousands) | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||||
| Revenue | ||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 28,935 | $ | 28,912 | 0.1 | % | $ | 56,308 | $ | 54,870 | 2.6 | % | ||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 11,836 | 11,445 | 3.4 | % | 21,595 | 21,472 | 0.6 | % | ||||||||||||||
| Adjacent Services | 1,203 | 1,745 | -31.1 | % | 2,875 | 2,481 | 15.9 | % | ||||||||||||||
| Total | $ | 41,974 | $ | 42,102 | -0.3 | % | $ | 80,778 | $ | 78,823 | 2.5 | % | ||||||||||
| Net loss from continuing operations | (4,176 | ) | (2,880 | ) | -45.0 | % | (8,417 | ) | (5,208 | ) | -61.6 | % | ||||||||||
| Non-GAAP Financial Measures | ||||||||||||||||||||||
| Adjusted EBITDA from continuing operations | $ | 2,856 | $ | 4,092 | -30.2 | % | $ | 4,589 | $ | 7,371 | -37.7 | % | ||||||||||
“While we delivered growth in our Europe/Asia Pacific retail recovery audit business as well as our U.S. commercial and contract compliance businesses in the second quarter, overall financial results were lower than our expectations. Our revenue performance was adversely impacted by unanticipated reductions in audit scope and claims delays at several of our significant Americas retail recovery audit clients. In addition, contract compliance did not meet our expectations due to delays and lower than expected claims settlements; however, the service line grew year over year. In Adjacent Services, existing projects did not yield expected results and fewer than expected new projects came online,” said Ron Stewart, president and chief executive officer.
“During the quarter we took steps to improve our profitability. We initiated an aggressive cost reduction program, increased our scrutiny of client profitability and expect to renegotiate or exit unprofitable client arrangements. While we are taking swift and aggressive actions to improve our financial performance, we expect some of the revenue headwinds experienced in the second quarter to continue through the end of 2019. Given this expectation and the uncertainty in the timing of revenue realization inherent in our contingency fee-based businesses, we believe it is prudent to reduce our revenue and Adjusted EBITDA guidance for 2019,” continued Stewart.
“Looking ahead, our new business pipeline, particularly in our commercial recovery audit business, remains strong. I am very pleased with the momentum of our sales team, with over 50% more new client engagements signed in the first half of 2019 compared to the first half of 2018. We believe this momentum, along with our redoubled efforts to actively manage our costs, will drive increased revenues, profitability and free cash flow in 2020 and beyond,” concluded Stewart.
Consolidated Results from Continuing Operations for the Three Months Ended June 30, 2019
Consolidated revenue from continuing operations for the second quarter of 2019 was $42.0 million, compared to $42.1 million for the same period in 2018, a decrease of 0.3%. Second quarter 2019 revenue from the Recovery Audit Services segments was $40.8 million compared to $40.4 million in the prior year, and from the Adjacent Services segment was $1.2 million compared to $1.7 million in 2018. On a constant dollar basis adjusted for changes in foreign exchange rates, revenue increased by 1.2% in the second quarter of 2019 compared to the same period in the prior year.
Total cost of revenue from continuing operations for the second quarter of 2019 was $26.3 million, or 62.7% of revenue, compared to $27.4 million, or 65.1% of revenue, for the same period in the prior year, representing a 2.4% improvement as a percentage of revenue.
Selling, general and administrative expenses from continuing operations for the second quarter of 2019 were $15.7 million compared to $12.8 million in the prior year period.
Consolidated net loss from continuing operations for the second quarter of 2019 was $4.2 million, or $(0.18) per basic and diluted share, compared to net loss of $2.9 million, or $(0.13) per basic and diluted share, for the same period in 2018.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) from continuing operations for the second quarter of 2019 was $2.9 million, or 6.8% of revenue, compared to Adjusted EBITDA of $4.1 million, or 9.7% of revenue, for the second quarter of 2018, a decrease of $1.2 million or 30.2%.
Schedule 3 attached to this press release provides a reconciliation of net loss to each of Earnings Before Interest and Taxes (EBIT), Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA.
Consolidated Results from Continuing Operations for the Six Months Ended June 30, 2019
Consolidated revenue from continuing operations for the six months ended June 30, 2019 was $80.8 million, compared to $78.8 million for the same period in 2018, an increase of 2.5%. For the six months ended June 30, 2019, revenue from the Recovery Audit Services segments was $77.9 million compared to $76.3 million in the prior year, and from the Adjacent Services segment was $2.9 million compared to $2.5 million in 2018. On a constant dollar basis adjusted for changes in foreign exchange rates, revenue increased by 4.6% for the six months ended June 30, 2019 compared to the same period in the prior year.
Total cost of revenue from continuing operations for the six months ended June 30, 2019 was $51.5 million, or 63.8% of revenue, compared to $52.2 million, or 66.2% of revenue, for the same period in the prior year, representing a 2.4% improvement as a percentage of revenue.
Selling, general and administrative expenses from continuing operations for the six months ended June 30, 2019 were $29.7 million compared to $24.1 million in the prior year period.
Consolidated net loss from continuing operations for the six months ended June 30, 2019 was $8.4 million, or $(0.37) per basic and diluted share, compared to net loss of $5.2 million, or $(0.23) per basic and diluted share, for the same period in 2018.
Adjusted EBITDA from continuing operations for the second quarter of 2019 was $4.6 million, or 5.7% of revenue, compared to Adjusted EBITDA of $7.4 million, or 9.4% of revenue, for the second quarter of 2018, a decrease of $2.8 million or 37.7%.
Schedule 3 attached to this press release provides a reconciliation of net loss to each of EBIT, EBITDA and Adjusted EBITDA.
Cash Flow and Liquidity
Net cash used by operating activities for the second quarter of 2019 was $0.1 million, compared to $3.5 million in the second quarter of the prior year, and net cash used was $2.4 million for the six months ended June 30, 2019 compared to $6.4 million in the same period in the prior year.
At June 30, 2019, the Company had unrestricted cash and cash equivalents of $11.5 million, and borrowings of $33.0 million against its $60.0 million revolving credit facility.
Annual Guidance for 2019 and 2020
The Company is updating its annual guidance for 2019 and providing preliminary annual guidance for 2020. For 2019, revenue is expected be in the range of $172 million to $178 million and Adjusted EBITDA is expected to be in the range of $25 million to $27 million. The guidance for 2019 reflects an updated view of the performance of the business segments, as well as cost reduction initiatives executed during the second quarter and planned for the balance of the year. The guidance for 2019 includes an expectation for the Adjacent Services segment to achieve positive quarterly Adjusted EBITDA no later than the fourth quarter of 2019. For 2020, the Company is establishing preliminary annual guidance for a revenue growth rate of low- to mid-single digits and Adjusted EBITDA margins of at least 17%.
Stock Repurchase Program
Since the February 2014 announcement of the Company’s stock repurchase program, as of June 30, 2019, the Company has repurchased 9.3 million shares. The Company repurchased approximately 0.2 million shares of its outstanding common stock for an aggregate price of $2.2 million in the six months ended June 30, 2019.
Second Quarter Earnings Call
As previously announced, management will hold a conference call later today at 5:00 PM (Eastern time) to discuss the Company’s second quarter 2019 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 3629918.
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 December 31, 2019. 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/en-us/downloads.
About PRGX
PRGX Global, Inc. is a global leader in Recovery Audit and Spend Analytics services. With over 1,500 employees, the Company serves clients in more than 30 countries and provides its services to 80% of the top 15 global retailers and over 25% 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 effectiveness of the Company’s efforts to improve profitability, revenue and free cash flow, the strength of the Company’s new business pipeline, the Company’s updated expectations regarding its 2019 financial performance and the Company’s preliminary expectations regarding its 2020 financial performance. 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 execute on its profitability improvement efforts, 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. 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.
CONTACT: PRGX Global, Inc.
[email protected]
Phone: 770-779-3011
| SCHEDULE 1 PRGX Global, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data) (Unaudited) |
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| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue, net | $ | 41,974 | $ | 42,102 | $ | 80,778 | $ | 78,823 | ||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenue | 26,312 | 27,389 | 51,547 | 52,186 | ||||||||||||
| Selling, general and administrative expenses | 15,748 | 12,809 | 29,665 | 24,073 | ||||||||||||
| Depreciation of property, equipment and software assets | 2,381 | 2,360 | 4,584 | 3,583 | ||||||||||||
| Amortization of intangible assets | 872 | 864 | 1,734 | 1,652 | ||||||||||||
| Total operating expenses | 45,313 | 43,422 | 87,530 | 81,494 | ||||||||||||
| Operating loss from continuing operations | (3,339 | ) | (1,320 | ) | (6,752 | ) | (2,671 | ) | ||||||||
| Foreign currency transaction (gains) losses on short-term intercompany balances | (77 | ) | 880 | 129 | 660 | |||||||||||
| Interest expense, net | 592 | 486 | 1,065 | 884 | ||||||||||||
| Other loss (income) | 11 | 5 | (8 | ) | 17 | |||||||||||
| Loss from continuing operations before income tax | (3,865 | ) | (2,691 | ) | (7,938 | ) | (4,232 | ) | ||||||||
| Income tax expense | 311 | 189 | 479 | 976 | ||||||||||||
| Net loss from continuing operations | $ | (4,176 | ) | $ | (2,880 | ) | $ | (8,417 | ) | $ | (5,208 | ) | ||||
| Discontinued operations: | ||||||||||||||||
| Loss from discontinued operations | (103 | ) | (26 | ) | (258 | ) | (359 | ) | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss from discontinued operations | (103 | ) | (26 | ) | (258 | ) | (359 | ) | ||||||||
| Net loss | $ | (4,279 | ) | $ | (2,906 | ) | $ | (8,675 | ) | $ | (5,567 | ) | ||||
| Basic loss per common share: | ||||||||||||||||
| Basic loss from continuing operations | $ | (0.18 | ) | $ | (0.13 | ) | $ | (0.37 | ) | $ | (0.23 | ) | ||||
| Basic loss from discontinued operations | — | — | (0.01 | ) | (0.01 | ) | ||||||||||
| Total basic loss per common share | $ | (0.18 | ) | $ | (0.13 | ) | $ | (0.38 | ) | $ | (0.24 | ) | ||||
| Diluted loss per common share: | ||||||||||||||||
| Diluted loss from continuing operations | $ | (0.18 | ) | $ | (0.13 | ) | $ | (0.37 | ) | $ | (0.23 | ) | ||||
| Diluted loss from discontinued operations | — | — | (0.01 | ) | (0.01 | ) | ||||||||||
| Total diluted loss per common share | $ | (0.18 | ) | $ | (0.13 | ) | $ | (0.38 | ) | $ | (0.24 | ) | ||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 22,763 | 23,283 | 22,687 | 22,930 | ||||||||||||
| Diluted | 22,763 | 23,283 | 22,687 | 22,930 | ||||||||||||
| SCHEDULE 2 PRGX Global, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) |
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| June 30, 2019 |
December 31, 2018 |
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| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 11,504 | $ | 13,973 | ||||
| Restricted cash | 146 | 46 | ||||||
| Receivables: | ||||||||
| Contract receivables, net | 41,773 | 46,865 | ||||||
| Employee advances and miscellaneous receivables, net | 98 | 567 | ||||||
| Total receivables | 41,871 | 47,432 | ||||||
| Prepaid expenses and other current assets | 4,517 | 3,144 | ||||||
| Total current assets | 58,038 | 64,595 | ||||||
| Property, equipment and software, net | 23,670 | 22,028 | ||||||
| Operating lease right-of-use assets | 11,152 | — | ||||||
| Goodwill | 17,528 | 17,531 | ||||||
| Intangible assets, net | 13,207 | 14,945 | ||||||
| Deferred income taxes | 3,575 | 3,561 | ||||||
| Other assets | 1,665 | 2,169 | ||||||
| Total assets | $ | 128,835 | $ | 124,829 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,064 | $ | 7,515 | ||||
| Accrued payroll and related expenses | 9,906 | 15,073 | ||||||
| Current portion of operating lease liabilities | 4,161 | — | ||||||
| Refund liabilities | 6,196 | 6,497 | ||||||
| Deferred revenue | 2,141 | 2,428 | ||||||
| Current portion of long-term debt | 42 | 48 | ||||||
| Current portion of business acquisition obligations | 4,000 | 4,162 | ||||||
| Total current liabilities | 29,510 | 35,723 | ||||||
| Long-term debt | 32,628 | 21,553 | ||||||
| Long-term operating lease liabilities | 7,647 | — | ||||||
| Refund liabilities | 65 | 100 | ||||||
| Deferred income taxes | 666 | 666 | ||||||
| Other long-term liabilities | 9 | 458 | ||||||
| Total liabilities | 70,525 | 58,500 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock | 236 | 232 | ||||||
| Additional paid-in capital | 582,982 | 582,574 | ||||||
| Accumulated deficit | (524,131 | ) | (515,456 | ) | ||||
| Accumulated other comprehensive income | (777 | ) | (1,021 | ) | ||||
| Total shareholders’ equity | 58,310 | 66,329 | ||||||
| Total liabilities and shareholders’ equity | $ | 128,835 | $ | 124,829 | ||||
| SCHEDULE 3 PRGX Global, Inc. and Subsidiaries Reconciliation of Net Loss to EBIT, EBITDA and Adjusted EBITDA (Amounts in thousands) (Unaudited) |
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| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Reconciliation of net loss to EBIT, EBITDA and Adjusted EBITDA: | ||||||||||||||||
| Net loss | $ | (4,279 | ) | $ | (2,906 | ) | $ | (8,675 | ) | $ | (5,567 | ) | ||||
| Income tax expense | 311 | 189 | 479 | 976 | ||||||||||||
| Interest expense, net | 592 | 486 | 1,065 | 884 | ||||||||||||
| EBIT | (3,376 | ) | (2,231 | ) | (7,131 | ) | (3,707 | ) | ||||||||
| Depreciation of property, equipment and software assets | 2,381 | 2,360 | 4,584 | 3,584 | ||||||||||||
| Amortization of intangible assets | 872 | 864 | 1,734 | 1,652 | ||||||||||||
| EBITDA | (123 | ) | 993 | (813 | ) | 1,529 | ||||||||||
| Foreign currency transaction (gains) losses on short-term intercompany balances | (77 | ) | 880 | 129 | 660 | |||||||||||
| Transformation, severance, and other expenses | 1,280 | 1,315 | 1,977 | 1,989 | ||||||||||||
| Other loss (income) | 11 | 5 | (8 | ) | 17 | |||||||||||
| Stock-based compensation | 1,662 | 873 | 3,046 | 2,818 | ||||||||||||
| Adjusted EBITDA | $ | 2,753 | $ | 4,066 | $ | 4,331 | $ | 7,013 | ||||||||
| Adjusted EBITDA from continuing operations | $ | 2,856 | $ | 4,092 | $ | 4,589 | $ | 7,371 | ||||||||
| Adjusted EBITDA from discontinued operations | $ | (103 | ) | $ | (26 | ) | $ | (258 | ) | $ | (358 | ) | ||||
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) |
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| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net loss | $ | (4,279 | ) | $ | (2,906 | ) | $ | (8,675 | ) | $ | (5,567 | ) | ||||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||||||||||||
| Depreciation and amortization | 3,253 | 3,224 | 6,318 | 5,235 | ||||||||||||
| Amortization of deferred loan costs | 61 | 24 | 117 | 32 | ||||||||||||
| Deferred income taxes | — | — | — | 169 | ||||||||||||
| Stock-based compensation expense | 1,662 | 873 | 3,046 | 2,818 | ||||||||||||
| Foreign currency transaction (gains) losses on short-term intercompany balances | (77 | ) | 880 | 129 | 660 | |||||||||||
| Long-term incentive compensation payout | — | — | — | (5,380 | ) | |||||||||||
| Decrease (increase) in receivables | 390 | (6,018 | ) | 5,742 | (118 | ) | ||||||||||
| Increase (decrease) in accounts payable, accrued payroll and other accrued expenses | 86 | 96 | (7,900 | ) | (5,609 | ) | ||||||||||
| Other, primarily changes in assets and liabilities | (1,185 | ) | 363 | (1,221 | ) | 1,388 | ||||||||||
| Net cash used in operating activities | (89 | ) | (3,464 | ) | (2,444 | ) | (6,372 | ) | ||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Purchases of property and equipment, net of disposals | (3,199 | ) | (2,807 | ) | (7,640 | ) | (5,327 | ) | ||||||||
| Business acquisition, net of cash acquired | — | — | — | 19 | ||||||||||||
| Net cash used in investing activities | (3,199 | ) | (2,807 | ) | (7,640 | ) | (5,308 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Net borrowings under line of credit | 3,000 | 4,000 | 11,400 | 4,000 | ||||||||||||
| Payment of earnout liability related to business acquisitions | — | (4,000 | ) | (479 | ) | (4,000 | ) | |||||||||
| Payment of deferred loan costs | (47 | ) | (28 | ) | (394 | ) | (28 | ) | ||||||||
| Repurchases of common stock | — | — | (2,228 | ) | — | |||||||||||
| Other, net | (76 | ) | 813 | (529 | ) | 1,985 | ||||||||||
| Net cash provided by financing activities | 2,877 | 785 | 7,770 | 1,957 | ||||||||||||
| Effect of exchange rates on cash and cash equivalents | (225 | ) | 316 | (55 | ) | 739 | ||||||||||
| Net change in cash, cash equivalents and restricted cash | (636 | ) | (5,170 | ) | (2,369 | ) | (8,984 | ) | ||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 12,286 | 15,060 | 14,019 | 18,874 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 11,650 | $ | 9,890 | $ | 11,650 | $ | 9,890 | ||||||||
| SCHEDULE 5 PRGX Global, Inc. and Subsidiaries Results by Operating Segment * (Amounts in thousands) (Unaudited) |
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| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||||
| Revenue, net | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 28,935 | $ | 28,912 | $ | 23 | $ | 56,308 | $ | 54,870 | $ | 1,438 | ||||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 11,836 | 11,445 | 391 | 21,595 | 21,472 | 123 | ||||||||||||||||||
| Adjacent Services | 1,203 | 1,745 | (542 | ) | 2,875 | 2,481 | 394 | |||||||||||||||||
| Total | $ | 41,974 | $ | 42,102 | $ | (128 | ) | $ | 80,778 | $ | 78,823 | $ | 1,955 | |||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 16,076 | $ | 19,113 | $ | (3,037 | ) | $ | 31,939 | $ | 35,264 | $ | (3,325 | ) | ||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 7,189 | 6,834 | 355 | 13,915 | 13,919 | (4 | ) | |||||||||||||||||
| Adjacent Services | 3,047 | 1,442 | 1,605 | 5,693 | 3,003 | 2,690 | ||||||||||||||||||
| Total | $ | 26,312 | $ | 27,389 | $ | (1,077 | ) | $ | 51,547 | $ | 52,186 | $ | (639 | ) | ||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 3,647 | $ | 2,897 | $ | 750 | $ | 7,026 | $ | 5,688 | $ | 1,338 | ||||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 2,639 | 1,737 | 902 | 4,752 | 3,108 | 1,644 | ||||||||||||||||||
| Adjacent Services | 398 | 523 | (125 | ) | 909 | 854 | 55 | |||||||||||||||||
| Corporate | 9,064 | 7,652 | 1,412 | 16,978 | 14,423 | 2,555 | ||||||||||||||||||
| Total | $ | 15,748 | $ | 12,809 | $ | 2,939 | $ | 29,665 | $ | 24,073 | $ | 5,592 | ||||||||||||
| Depreciation of property, equipment and software assets | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 1,919 | $ | 1,719 | $ | 200 | $ | 3,681 | $ | 2,616 | $ | 1,065 | ||||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 182 | 206 | (24 | ) | 344 | 348 | (4 | ) | ||||||||||||||||
| Adjacent Services | 280 | 435 | (155 | ) | 559 | 619 | (60 | ) | ||||||||||||||||
| Total | $ | 2,381 | $ | 2,360 | $ | 21 | $ | 4,584 | $ | 3,583 | $ | 1,001 | ||||||||||||
| Amortization of intangible assets | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 438 | $ | 436 | $ | 2 | $ | 876 | $ | 773 | $ | 103 | ||||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 48 | 38 | 10 | 85 | 99 | (14 | ) | |||||||||||||||||
| Adjacent Services | 386 | 390 | (4 | ) | 773 | 780 | (7 | ) | ||||||||||||||||
| Total | $ | 872 | $ | 864 | $ | 8 | $ | 1,734 | $ | 1,652 | $ | 82 | ||||||||||||
| Operating income (loss) | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 6,855 | $ | 4,747 | $ | 2,108 | $ | 12,786 | $ | 10,529 | $ | 2,257 | ||||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 1,778 | 2,630 | (852 | ) | 2,499 | 3,998 | (1,499 | ) | ||||||||||||||||
| Adjacent Services | (2,908 | ) | (1,045 | ) | (1,863 | ) | (5,059 | ) | (2,775 | ) | (2,284 | ) | ||||||||||||
| Corporate | (9,064 | ) | (7,652 | ) | (1,412 | ) | (16,978 | ) | (14,423 | ) | (2,555 | ) | ||||||||||||
| Total | $ | (3,339 | ) | $ | (1,320 | ) | $ | (2,019 | ) | $ | (6,752 | ) | $ | (2,671 | ) | $ | (4,081 | ) | ||||||
| Adjusted EBITDA from continuing operations | ||||||||||||||||||||||||
| Recovery Audit Services – Americas | $ | 9,462 | $ | 7,388 | $ | 2,074 | $ | 17,721 | $ | 14,467 | $ | 3,254 | ||||||||||||
| Recovery Audit Services – Europe/Asia-Pacific | 2,130 | 3,346 | (1,216 | ) | 3,173 | 5,460 | (2,287 | ) | ||||||||||||||||
| Adjacent Services | (1,637 | ) | (220 | ) | (1,417 | ) | (3,104 | ) | (1,308 | ) | (1,796 | ) | ||||||||||||
| Corporate | (7,099 | ) | (6,422 | ) | (677 | ) | (13,201 | ) | (11,248 | ) | (1,953 | ) | ||||||||||||
| Total | $ | 2,856 | $ | 4,092 | $ | (1,236 | ) | $ | 4,589 | $ | 7,371 | $ | (2,782 | ) | ||||||||||
* The Recovery Audit Services – Americas segment represents recovery audit services provided in the United States, Canada and Latin America. The Recovery Audit Services – Europe/Asia-Pacific segment represents recovery audit services provided in Europe, Asia and the Pacific region. The Adjacent Services segment represents advisory services, spend analytics and supplier information management services.
