-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kp22Y+fwceYc6qSVvS/NypP1LEaowMhmezzfDCjvhdZy3XwA6mQTRZ/dNcFsjRO4 p9fg8b4Q362cDsz3uC4tNg== 0000914062-05-000674.txt : 20051110 0000914062-05-000674.hdr.sgml : 20051110 20051110151843 ACCESSION NUMBER: 0000914062-05-000674 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051109 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051110 DATE AS OF CHANGE: 20051110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRG SCHULTZ INTERNATIONAL INC CENTRAL INDEX KEY: 0001007330 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 582213805 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28000 FILM NUMBER: 051193591 BUSINESS ADDRESS: STREET 1: 600 GALLERIA PARKWAY STREET 2: STE 100 CITY: ATLANTA STATE: GA ZIP: 30339-5949 BUSINESS PHONE: 7707793311 MAIL ADDRESS: STREET 1: 600 GALLERIA PARKWAY STREET 2: STE 100 CITY: ATLANTA STATE: GA ZIP: 30339-5949 FORMER COMPANY: FORMER CONFORMED NAME: PROFIT RECOVERY GROUP INTERNATIONAL INC DATE OF NAME CHANGE: 19960207 8-K 1 prg8k110905.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- FORM 8-K -------------------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): November 9, 2005 ----------------------- PRG-SCHULTZ INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) -------------------------
GEORGIA 000-28000 58-2213805 -------------- -------------- ------------------ (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.)
600 GALLERIA PARKWAY, SUITE 100, ATLANTA, GEORGIA 30339-5949 ------------------------------------------------------------------------------- (Address of principal executive office) (zip code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 779-3900 ------------------------------------------------------------- (Former name or former address, if changed since last report) ------------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - -------------------------------------------------------------------------------- ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The information provided pursuant to this Item 2.02 is to be considered "filed" under the Securities Exchange Act of 1934 ("Exchange Act") and incorporated by reference into those filings of PRG-Schultz International, Inc. ("PRG-Schultz") that provide for the incorporation of all reports and documents filed by PRG-Schultz under the Exchange Act. On November 9, 2005, PRG-Schultz issued a press release announcing its results for the quarter ended September 30, 2005. PRG-Schultz hereby incorporates by reference herein the information set forth in its Press Release dated November 9, 2005, a copy of which is attached hereto as Exhibit 99.1. Except as otherwise provided in the press release, the press release speaks only as of the date of such press release and such press release shall not create any implication that the affairs of PRG-Schultz have continued unchanged since such date. Except for the historical information contained in this report, the statements made by PRG-Schultz are forward-looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. PRG-Schultz's future financial performance could differ significantly from the expectations of management and from results expressed or implied in the Press Release. See the risk factors contained in the Press Release for a discussion of certain risks and uncertainties that may impact such forward looking statements. For further information on other risk factors, please refer to the "Risk Factors" contained in PRG-Schultz's Form 10-K for the year ended December 31, 2004 and to the discussion of risks contained in PRG-Schultz's Form 10-Q for the quarter ended September 30, 2005, each as filed with the Securities and Exchange Commission. PRG-Schultz disclaims any obligation or duty to update or modify these forward-looking statements. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. N/A (b) Pro Forma Financial Information. N/A (c) Exhibits. Exhibit Number Description -------------- ----------- 99.1* Press Release dated November 9, 2005 ----------------- * This exhibit is filed, not furnished. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, PRG-Schultz International, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PRG-SCHULTZ INTERNATIONAL, INC. Date: November 9, 2005 By: /s/ Clinton McKellar, Jr. ----------------------------------- Clinton McKellar, Jr. General Counsel and Secretary 3 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1* Press Release dated November 9, 2005 - ----------------- * This exhibit is filed, not furnished. 4 EX-99.1 2 prg8k110905ex99.txt PRESS RELEASE EXHIBIT 99.1 PRG-Schultz Announces Third-Quarter 2005 Results Reports Progress in Financial Restructuring ATLANTA--(BUSINESS WIRE)--Nov. 9, 2005--PRG-Schultz International, Inc. (Nasdaq: PRGX - News), the world's largest recovery audit firm, today announced financial results for the third quarter 2005. In addition, the company provided a progress update on the financial restructuring process that was initiated during the quarter. Revenues were $67.7 million, down 20.5% compared to $85.1 million for the third quarter of 2004. Net loss for the quarter was ($20.8) million, or ($0.34) per diluted share, compared to net earnings of $0.5 million, or $0.01 per diluted share for the third quarter of 2004. The quarter's results included a charge of $7.9 million, or $0.13 per share, associated with a major expense restructuring that was initiated during the quarter. Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) were ($14.6) million compared to $6.6 million for the third quarter of 2004. EBITDA for the quarter was also reduced by the $7.9 million restructuring charge. A number of significant actions were taken by the company during the quarter with the objectives of improving operating results and strengthening the company's financial health. James B. McCurry was appointed President and Chief Executive Officer, effective July 25, 2005, replacing John M. Cook, who retired as Chairman and Chief Executive Officer. Management initiated a major expense restructuring that is expected to provide annualized savings of approximately $42 million. The company also began a process to obtain additional financing, improve its liquidity and strengthen its balance sheet. It retained the investment banking firm Rothschild, Inc. to advise it during the process. "We have acted rapidly to turn the company's financial performance around and to provide a financial structure that provides the resources and time needed for the turnaround to be successful," said James B. McCurry, PRG-Schultz's President and Chief Executive Officer. "We are bringing expenses into alignment with the size and nature of our business in order to restore our operating profits, and we are focusing our organizational resources on our most important clients and most promising new audit services in order to stabilize our revenue." Third Quarter 2005 Operating Results Revenues from Accounts Payable Services were $58.0 million for the quarter, down 23.3% from $75.6 million during the same quarter last year. Revenues from Meridian VAT Reclaim increased to $9.7 million, compared to $9.5 million a year ago. Within Accounts Payable Services, revenues from U.S. operations declined 31.8% to $34.7 million compared to $50.9 million in the same quarter of 2004. Revenues from international operations were $23.3 million, down 5.9% compared to $24.8 million in the third quarter of 2004. Within international operations, revenue increases in Canada and Latin America were more than offset by a revenue decline in the United Kingdom. Cost of revenue (COR) for Accounts Payable Services was 75.0% of revenues for the third quarter of 2005 compared to 64.0% of revenues in the third quarter of the prior year. Total selling, general and administrative expenses (S,G&A) were 41.3% of revenues, compared to 33.4% of revenues for the same period last year. The higher costs and expenses as a percentage of sales compared to last year resulted from the fact that the 20.5% decline in revenues was not accompanied by a commensurate reduction in either COR or S,G&A. Management initiated a major expense reduction program during the quarter that is expected to provide annualized savings of approximately $42 million. Meridian revenues for the third quarter of 2005 increased $0.2 million, to $9.7 million, compared to the same quarter a year ago. Cost of revenue for Meridian was 68.0% of revenue compared to 61.8% for the prior year quarter. Cash Flow and Capital Expenditures Net cash used in operating activities for the third quarter of 2005 was ($1.5) million, compared to ($1.1) million in the third quarter of 2004. Net borrowings on the company's bank credit facility were down slightly to $12.4 million at September 30, 2005, compared to $12.5 million at the end of the second quarter. Capital expenditures totaled approximately $1.5 million for the third quarter of 2005, compared to $1.9 million in the same period last year. Bank Credit Facility and Convertible Notes The company has a bank credit facility with Bank of America that offers total potential availability of $30 million, limited by the company's accounts receivable balance. The facility currently has maximum borrowing capacity of about $21 million. With $12.4 million borrowed under the facility, including $0.4 million in the form of a letter of credit, the company had $8.0 million available under the facility as of September 30, 2005. The company also has $125 million principal amount of convertible notes outstanding. Although the company currently has borrowing capacity under its credit facility, it projects that it will be unable to make the $3.0 million interest payment to the convertible note holders that is due November 28, 2005. In addition, the company's financial performance during the third quarter did not meet several financial covenants in its credit facility. The company is addressing these problems. It has entered into a forbearance agreement with its bank that, among other things, provides that the bank will not exercise certain of its rights and remedies as a result of the financial covenant defaults and certain additional technical defaults and allows the company continued use of the credit facility provided that the company obtains financing sufficient to retire the credit facility. The forbearance agreement expires no sooner than December 23, 2005 and no later than March 31, 2006 (subject to terms and conditions as described in the company's Form 10-Q for the third quarter ended September 30, 2005 as filed with the SEC today). The company has also initiated a process to obtain additional financing and to restructure its financial obligations. Restructuring of Financial Obligations In order to facilitate the process of obtaining additional financing, improving the company's liquidity and strengthening its balance sheet, the company retained Rothschild, Inc. to advise the company in evaluating its financial alternatives. As a part of this process, the company's Board of Directors has now formed a special committee to oversee the financial restructuring. In addition, an ad hoc committee of convertible note holders was recently organized to negotiate the terms of a potential restructuring of the company's 4 3/4% convertible notes due November 26, 2006. On November 7, Peter Limeri joined the company's executive team in the role of Chief Restructuring Officer. Mr. Limeri most recently served as Chief Financial Officer and Chief Operating Officer at Nationwide Furniture Inc., a portfolio company of Sun Capital Partners. Prior to that he served as Chief Financial Officer of Anderson Press, Inc. which experienced a significant business turnaround during his tenure. Before joining Anderson, he served as Vice President-Finance of Cluett American where he was part of the team that led the company's financial restructuring and business turnaround. "We are extremely pleased to have someone with Pete's hands-on business turnaround experience join our team," said McCurry. "His years of successful experience at transforming and rejuvenating companies will be of tremendous value to the turnaround already in progress at PRG-Schultz." About PRG-Schultz International, Inc. Headquartered in Atlanta, PRG-Schultz International, Inc. (PRG) is the world's leading profit improvement firm, providing clients throughout the world with insightful value to optimize and expertly manage their business transactions. Using proprietary software and expert audit methodologies, PRG industry specialists review client purchases and payment information to identify and recover overpayments. Non-GAAP Financial Measures Included in this press release are certain "non-GAAP financial measures," which are measures of the company's historical or estimated future performance that are different from measures calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules, the company believes are useful to investors. EBITDA represents consolidated earnings (loss) before interest expense, income taxes, depreciation and amortization. The company believes EBITDA provides useful information to investors about the company's financial condition and results of operations because EBITDA is helpful for evaluating the company's performance. The company also believes that the rating agencies and a number of lenders use EBITDA for those purposes and a number of restrictive covenants related to the company's credit facility use measures similar to EBITDA used in this release. Schedule 6 provides a reconciliation of net earnings (loss) to EBITDA. Forward Looking Statements Statements made in this news release that look forward in time, including statements regarding the company's need for and ability to obtain future financing, anticipated future expense savings, the ability to negotiate successfully with its convertible note holders, the ability to improve the company's financial performance, liquidity and strengthen its balance sheet, and the ability to restore the company's profitability and stabilize revenue, involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include the following: risks involved in any contract negotiation in addition to risks associated with reversing decreasing revenue and cash flow trends. Should the company be unable to obtain alternate sources of financing, the company may be unable to pay its debts as they come due or fund its operations. Should the company be unable to make scheduled interest payments on its $125 million outstanding convertible notes within the grace periods provided, the trustee or holders of the notes could accelerate payment of the notes. Negotiations with the noteholders are subject to the risks facing all contract negotiations, including the possibility that the parties will be unable to reach an agreement. If the company is unable to refinance the notes, it would be not be able to pay the accelerated amounts due without substantial additional financing, and the likelihood of obtaining such additional financing in the near future is remote. Furthermore, the company believes it is likely that it will need additional financing before year-end. There is no guarantee that the company will be able to raise additional financing on acceptable terms, if at all. Anticipated future expense savings may not be realized as anticipated or could have unexpected adverse effects on the company's revenue stream. For a discussion of other risk factors that may be impact the company's business, please see our Securities and Exchange Commission filings, including the company's Form 10-K as filed with the Securities and Exchange Commission on March 16, 2005 and Form 10-Qs as filed May 10, 2005 and August 9, 2005. The company disclaims any obligation or duty to update or modify these forward-looking statements.
SCHEDULE 1 PRG-Schultz International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data) (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, ------------------- ------------------- 2005 2004 2005 2004 ---------- -------- --------- --------- Revenues $67,708 $85,137 $224,793 $263,192 Cost of revenues 50,096 54,249 153,405 168,372 Selling, general and administrative expenses 27,944 28,425 88,157 94,875 Restructuring expenses 7,922 0 7,922 0 ---------- -------- --------- --------- Operating income (loss) (18,254) 2,463 (24,691) (55) Interest expense (2,249) (2,253) (6,369) (6,793) Interest income 160 120 409 416 ---------- -------- --------- --------- Earning (loss) from continuing operations before income taxes and discontinued operations (20,343) 330 (30,651) (6,432) Income tax 715 125 1,814 (2,445) ---------- -------- --------- --------- Earnings (loss) from continuing operations before discontinued operations (21,058) 205 (32,465) (3,987) Discontinued operations: Gain on disposal of discontinued operations including operating results for phase-out period, net of income taxes 260 260 479 7,349 ---------- -------- --------- --------- Net earnings (loss) $(20,798) $465 $(31,986) $3,362 ========== ======== ========= ========= Basic earnings (loss) per share: Loss from continuing operations before discontinued operations $(0.34) $0.00 $(0.52) $(0.07) Discontinued operations - 0.01 - 0.12 ---------- -------- --------- --------- Net earnings (loss) $(0.34) $0.01 $(0.52) $0.05 ========== ======== ========= ========= Diluted earnings (loss) per share: Loss from continuing operations before discontinued operations $(0.34) $0.00 $(0.52) $(0.07) Discontinued operations - 0.01 - 0.12 ---------- -------- --------- --------- Net earnings (loss) $(0.34) $0.01 $(0.52) $0.05 ========== ======== ========= ========= Weighted average shares outstanding: Basic 62,029 61,808 62,001 61,734 ========== ======== ========= ========= Diluted 62,029 62,108 62,001 61,734 ========== ======== ========= =========
SCHEDULE 2 PRG-Schultz International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) September 30, December 31, 2005 2004 -------------- ------------ ASSETS Current assets: Cash and cash equivalents $9,988 $12,596 Restricted cash 3,369 120 Receivables: Contract receivables 38,843 59,745 Employee advances and miscellaneous receivables 3,130 3,490 -------------- ------------ Total receivables 41,973 63,235 -------------- ------------ Funds held for client obligations 21,193 30,920 Prepaid expenses and other current assets 5,361 4,129 Deferred income taxes 1,951 1,951 -------------- ------------ Total current assets 83,835 112,951 Property and equipment 20,719 26,473 Goodwill 170,642 170,684 Intangible assets 29,193 30,232 Other assets 3,420 3,827 -------------- ------------ Total assets $307,809 $344,167 ============== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank credit facility $12,400 $- Obligation for client payables 21,193 30,920 Accounts payable and accrued expenses 21,934 26,626 Accrued payroll and related expenses 41,482 41,791 Deferred revenue 3,423 6,466 Convertible notes, net of unamortized discount of $1,157 123,843 - -------------- ------------ Total current liabilities 224,275 105,803 Convertible notes, net of unamortized discount of $1,714 - 123,286 Deferred compensation 1,447 2,195 Deferred income taxes 4,201 4,201 Other long-term liabilities 4,678 5,098 -------------- ------------ Total liabilities 234,601 240,583 -------------- ------------ Shareholders' equity: Preferred stock - - Common stock 68 68 Additional paid-in capital 495,275 493,532 Accumulated deficit (374,965) (342,979) Accumulated other comprehensive income 2,340 1,740 Less treasury stock at cost (48,710) (48,710) Unearned portion of restricted stock (800) (67) -------------- ------------ Total shareholders' equity 73,208 103,584 -------------- ------------ Total liabilities and shareholders' equity $307,809 $344,167 ============== ============
SCHEDULE 3 PRG-Schultz International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) Nine Months Ended September 30, --------------------------------- 2005 2004 --------- -------- Cash flows from operating activities: Net earnings(loss) $(31,986) $3,362 Gain on disposal of discontinued operations (479) (7,349) --------- -------- Loss from continuing operations (32,465) (3,987) Adjustments to reconcile loss from continuing operations to net cash provided by operating activities: Depreciation and amortization 12,198 13,374 Restricted stock compensation expense 279 (23) Gain on sale of property and equipment - 161 Deferred compensation expense (748) (558) Deferred income taxes - (5,542) Income tax benefit (effect) relating to stock option exercises (41) 11 Changes in operating assets and liabilities: Restricted cash (3,243) (217) Receivables 20,392 2,486 Prepaid expenses and other current assets (1,327) (1,203) Other assets (549) (131) Accounts payable and accrued expenses (3,023) (4,550) Accrued payroll and related expenses 723 916 Deferred revenue (2,414) 348 Other long-term liabilities (420) 397 --------- -------- Net cash provided by (used in) operating activities (10,638) 1,482 --------- -------- Cash flows from investing activities: Purchase of property and equipment, net of sale proceeds (5,058) (9,294) Proceeds from sale of certain discontinued operations - 19,116 --------- -------- Net cash provided by (used in) investing activities (5,058) 9,822 --------- -------- Cash flows from financing activities: Net borrowing( repayments) of debt 12,400 (23,700) Payments for issuance costs on convertible notes - (21) Net proceeds from common stock issuances 772 767 --------- -------- Net cash provided by (used in) financing activities 13,172 (22,954) --------- -------- Net cash (used in) provided by discontinued operations 487 (1,146) Effect of exchange rate changes on cash and cash equivalents (571) (127) --------- -------- Net change in cash and cash equivalents (2,608) (12,923) Cash and cash equivalents at beginning of period 12,596 26,658 --------- -------- Cash and cash equivalents at end of period $9,988 $13,735 ========= ========
SCHEDULE 4 PRG-Schultz International, Inc. and Subsidiaries Summary Operating Segment Results from Continuing Operations (Unaudited) Three Months Ended September 30, (Amounts in thousands, except per share data) 2005 2004 --------------------------- ------------------------- $ % Rev. $ % Rev. -------------- ----------- ------------ ----------- Accounts Payable Services - ------------------------- Revenues $57,968 $75,625 Operating income loss ($4,028) -6.9% $11,493 15.2% -------------- ----------- ------------ ----------- Meridian VAT Reclaim - -------------------- Revenues $9,740 $9,512 Operating income $1,065 10.9% $1,979 20.8% -------------- ----------- ------------ ----------- Corporate Support - ----------------- Operating loss ($15,291) -22.6% ($11,009) -12.9% -------------- ----------- ------------ ----------- Total - ----- Revenues $67,708 $85,137 Operating income (loss) ($18,254) -27.0% $2,463 2.9% Earnings (loss) from continuing operations ($21,058) -31.1% $205 0.2% Diluted loss per share from continuing operations $(0.34) $0.00 Diluted shares 62,029 62,108 -------------- ----------- ------------ -----------
Notes: Corporate Support Operating Loss % shown as a % of Total Revenues Loss from Continuing Operations and Diluted Loss Per Share from Continuing Operations are prior to Earnings from Discontinued Operations.
SCHEDULE 5 PRG-Schultz International, Inc. and Subsidiaries Summary Operating Segment Results from Continuing Operations Unaudited) Nine Months Ended September 30, (Amounts in thousands, except per share data) ---------------------------------------------- 2005 2004 ----------------------- ----------------------- $ % Rev. $ % Rev. ------------ -------- ------------ --------- Accounts Payable Services - ------------------------- Revenues $192,436 $231,460 Operating income $6,352 3.3% $29,853 12.9% ------------ -------- ------------ --------- Meridian VAT Reclaim - -------------------- Revenues $32,357 $31,732 Operating income $6,982 21.6% $8,026 25.3% ------------ -------- ------------ --------- Corporate Support - ----------------- Operating loss ($38,025) -16.9% ($37,934) -14.4% ------------ -------- ------------ --------- Total - ----- Revenues $224,793 $263,192 Operating loss ($24,691) -11.0% ($55) 0.0% Loss from continuing operations ($32,465) -14.4% ($3,987) -1.5% Diluted loss per share from continuing operations $(0.52) $(0.07) Diluted shares 62,001 61,734 ------------ -------- ------------ ---------
Notes: Corporate Support Operating Loss % shown as a % of Total Revenues Loss from Continuing Operations and Diluted Loss Per Share from Continuing Operations are prior to Earnings from Discontinued Operations.
SCHEDULE 6 PRG-Schultz International, Inc. and Subsidiaries Reconciliation of Net Earnings (Loss) to EBITDA (Amounts in thousands) (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- -------- --------- --------- Reconciliation of net loss to EBITDA: - ------------------------------- Net earnings (loss) $(20,798) $465 $(31,986) $3,362 Adjust for: Earnings from discontinued operations 260 260 479 7,349 ---------- -------- --------- --------- Earnings (loss) from continuing operations (21,058) 205 (32,465) (3,987) Adjust for: Income taxes 715 125 1,814 (2,445) Interest 2,089 2,133 5,960 6,377 Depreciation and amortization 3,613 4,093 11,362 11,934 ---------- -------- --------- --------- EBITDA $(14,641) $6,556 $(13,329) $11,879 ========== ======== ========= ========= Total revenues $67,708 $85,137 $224,793 $263,192 EBITDA as % of Revenues -21.6% 7.7% -5.9% 4.5%
In this press release, the Company has provided a financial measure, EBITDA, defined as earnings from continuing operations before taxes, interest, depreciation and amortization disclosed herein. EBITDA is considered a 'non-GAAP' financial measure within the meaning of Regulation G and may not be similar to EBITDA measures employed by other companies. EBITDA is presented solely as a supplemental disclosure because management believes it to be an effective measure of the operating performance of the Company's core business activities. EBITDA is not provided as a measure of liquidity and should not be viewed as such. EBITDA should not be considered in isolation of, or as a substitute for, other measures for determining operating performance that are calculated in accordance with GAAP. This schedule provides a reconciliation of net earnings (loss) to EBITDA in accordance with Securities and Exchange Commission guidance.
SCHEDULE 7 PRG-Schultz International, Inc. and Subsidiaries Reconciliation of Total Revenues and Cost of Revenues (Amounts in thousands) (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, --------------------------- ------------------------------ 2005 2004 2005 2004 ------------ ------------- -------------- -------------- Revenues: U.S. Accounts Payable Services $34,664 $50,864 $117,107 $150,247 International Accounts Payable Services 23,304 24,761 75,329 81,212 Meridian VAT Reclaim 9,740 9,512 32,357 31,733 ------------ ------------- -------------- -------------- Total revenues $67,708 $85,137 $224,793 $263,192 ============ ============= ============== =============== Cost of revenues: U.S. Accounts Payable Services $25,156 $29,914 $76,197 $91,841 International Accounts Payable Services 18,312 18,459 56,990 58,185 Meridian VAT Reclaim 6,628 5,876 20,218 18,346 ------------ ------------- -------------- -------------- Total cost of revenues $50,096 $54,249 $153,405 $168,372 ============ ============= ============== =============== Cost of revenues as a percentage of revenue: U.S. Accounts Payable Services 72.6% 58.8% 65.1% 61.1% International Accounts Payable Services 78.6% 74.5% 75.7% 71.6% Meridian VAT Reclaim 68.0% 61.8% 62.5% 57.8% ------------ ------------- -------------- -------------- Total cost of revenues as a percentage of total revenue 74.0% 63.7% 68.2% 64.0% ============ ============= ============== ===============
Contact: PRG-Schultz International, Inc. James E. Moylan, Jr., 770-779-6605 -----END PRIVACY-ENHANCED MESSAGE-----