10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2015

OR

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

For the transition period from to

Commission File Number 0-28000

PRGX Global, Inc.

(Exact name of registrant as specified in its charter)

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)

Registrant’s telephone number, including area code: (770) 779-3900

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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

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

¨  Large accelerated filer	ý	Accelerated filer
¨  Non-accelerated filer     (Do not check if a smaller reporting company)	¨	Smaller reporting company

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

Common shares of the registrant outstanding at November 6, 2015 were 22,859,734.

PRGX GLOBAL, INC.

FORM 10-Q

For the Quarter Ended September 30, 2015

INDEX

	Page No.
Part I. Financial Information
Item 1. Financial Statements (Unaudited)	1
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	1
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2015 and 2014	1
Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	2
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	3
Notes to Condensed Consolidated Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	28
Part II. Other Information
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	29
Item 6. Exhibits	30
Signatures	31

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PRGX GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenue	$	33,923		$	42,988		$	104,344		$	122,870
Operating expenses:
Cost of revenue	24,387			28,681			73,085			87,457
Selling, general and administrative expenses	8,487			10,492			26,043			31,505
Depreciation of property and equipment	1,262			1,428			3,858			4,696
Amortization of intangible assets	517			895			2,017			2,700
Total operating expenses	34,653			41,496			105,003			126,358
Operating (loss) income	(730		)	1,492			(659		)	(3,488		)
Foreign currency transaction losses on short-term intercompany balances	654			1,221			1,930			1,073
Interest (income), net	(8		)	(44		)	(103		)	(33		)
Other loss	1,612			—			1,612			—
(Loss) income before income taxes	(2,988		)	315			(4,098		)	(4,528		)
Income tax expense	421			554			1,172			853
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Basic loss per common share (Note B)	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)
Diluted loss per common share (Note B)	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)
Weighted-average common shares outstanding (Note B):
Basic	25,167			27,744			26,015			29,203
Diluted	25,167			27,744			26,015			29,203

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Foreign currency translation adjustments	(844		)	(619		)	(692		)	(112		)
Comprehensive loss	$	(4,253	)	$	(858	)	$	(5,962	)	$	(5,493	)

See accompanying Notes to Condensed Consolidated Financial Statements.

1

PRGX GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)

	September 30, 2015			December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents (Note E)	$	15,673		$	25,735
Restricted cash	98			53
Receivables:
Contract receivables, less allowances of $1,752 in 2015 and $2,243 in 2014:
Billed	24,255			32,373
Unbilled	1,288			2,809
	25,543			35,182
Employee advances and miscellaneous receivables, less allowances of $834 in 2015 and $692 in 2014	1,781			1,993
Total receivables	27,324			37,175
Prepaid expenses and other current assets	3,141			3,421
Total current assets	46,236			66,384
Property and equipment	58,333			56,174
Less accumulated depreciation and amortization	(46,993		)	(43,954		)
Property and equipment, net	11,340			12,220
Goodwill	11,589			13,036
Intangible assets, less accumulated amortization of $35,163 in 2015 and $33,973 in 2014	7,131			9,439
Noncurrent portion of unbilled receivables	825			1,196
Other assets	828			507
Total assets	$	77,949		$	102,782
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	6,437		$	7,397
Accrued payroll and related expenses	12,103			15,415
Refund liabilities	4,953			5,393
Deferred revenue	1,094			2,173
Other current liabilities	254			—
Total current liabilities	24,841			30,378
Noncurrent refund liabilities	716			857
Other long-term liabilities	1,218			561
Total liabilities	26,775			31,796
Commitments and contingencies (Note H)
Shareholders’ equity (Note B):
Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 22,872,100 shares issued and outstanding at September 30, 2015 and 26,762,861 shares issued and outstanding at December 31, 2014	229			268
Additional paid-in capital	576,256			590,067
Accumulated deficit	(526,182		)	(520,912		)
Accumulated other comprehensive income	871			1,563
Total shareholders’ equity	51,174			70,986
Total liabilities and shareholders’ equity	$	77,949		$	102,782

See accompanying Notes to Condensed Consolidated Financial Statements.

2

PRGX GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(5,270	)	$	(5,381	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	5,875			7,396
Amortization of deferred loan costs	(100		)	67
Stock-based compensation expense	4,530			3,409
Loss/gain on sale of assets/investments	1,561			—
Deferred income taxes	61			(933		)
Foreign currency transaction (gains) losses on short-term intercompany balances	1,930			1,073
Changes in operating assets and liabilities:
Restricted cash	(45		)	(64		)
Billed receivables	6,843			(2,762		)
Unbilled receivables	1,815			7,921
Prepaid expenses and other current assets	211			541
Other assets	(40		)	15
Accounts payable and accrued expenses	(822		)	(2,871		)
Accrued payroll and related expenses	(2,861		)	(445		)
Refund liabilities	(581		)	(1,058		)
Deferred revenue	(645		)	(265		)
Noncurrent compensation obligations	—			414
Other long-term liabilities	(99		)	73
Net cash provided by operating activities	12,363			7,130
Cash flows from investing activities:
Purchases of property and equipment, net of disposal proceeds	(3,169		)	(3,574		)
Net cash used in investing activities	(3,169		)	(3,574		)
Cash flows from financing activities:
Payment of deferred loan costs	—			(104		)
Restricted stock repurchased from employees for withholding taxes	(311		)	(568		)
Proceeds from option exercises	45			2,790
Payments of deferred acquisition consideration	—			(2,208		)
Repurchase of common stock	(17,261		)	(20,000		)
Net cash used in financing activities	(17,527		)	(20,090		)
Effect of exchange rates on cash and cash equivalents	(1,729		)	(873		)
Net decrease in cash and cash equivalents	(10,062		)	(17,407		)
Cash and cash equivalents at beginning of period	25,735			43,700
Cash and cash equivalents at end of period	$	15,673		$	26,293
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	51		$	80
Cash paid during the period for income taxes, net of refunds received	$	734		$	2,405

See accompanying Notes to Condensed Consolidated Financial Statements.

3

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note A – Basis of Presentation

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 for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America 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-month and nine-month periods ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

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 Footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2014.

New Accounting Standards

A summary of the new accounting standards issued by the Financial Accounting Standards Board (“FASB”) and included in the Accounting Standards Codification (“ASC”) that apply to PRGX is set forth below:

    FASB ASC Update No. 2015-15. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Interest - Imputations of Interest (Subtopic 835-30). The amendments in this update clarify the stance by the SEC allowing an entity to defer and present debt issuance costs for a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.We are currently evaluating the impact of ASU 2015-15 on our consolidated financial statements.

FASB ASC Update No. 2015-05. In April 2015, the FASB issued Accounting Standards Update 2015-05, Goodwill and Other - Internal - Use Software (Subtopic 350-40). The amendments in this update provide guidance about whether a cloud computing arrangement includes a software license. Specifically the amendment states that if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments in this update are effective for those annual periods beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-05 on our consolidated financial statements.

FASB ASC Update No. 2015-03. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”). ASU 2015-03 simplifies presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 with early adoption permitted. The guidance also requires retrospective application to all prior periods presented. We are currently evaluating the impact of ASU 2015-03 on our consolidated financial statements.

FASB ASC Update No. 2015-02. In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810). The amendments in this update revise the consolidation model for all entities. Specifically the amendments:

1. Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities.

2. Eliminate the presumption that a general partner should consolidate a limited partnership.

3. Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships.

4

4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The amendments in this update are effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-02 on our consolidated financial statements.

FASB ASC Update No. 2015-01. In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20). This update eliminates the concept of extraordinary items and their use in financial statements and corresponding disclosure. The amendments in this update are effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-01 on our consolidated financial statements.

FASB ASC Update No. 2014-15. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 provides guidance on management's responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and related disclosure requirements. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 with early adoption permitted. We do not expect the adoption of ASU 2014-15 to have a material impact on our consolidated financial statements.

FASB ASC Update No. 2014-09. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the transferring entity expects to be entitled in exchange for those goods or services. ASU 2014-09 allows for adoption using either of two methods; retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of application recognized at the date of initial adoption. In August 2015, the FASB issued ASU 2015-14 to defer the effective date by one year. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements.

5

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note B – Earnings (Loss) Per Common Share

The following tables set forth the computations of basic and diluted loss per common share for the three and nine months ended September 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
Basic loss per common share:	2015			2014			2015			2014
Numerator:
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Denominator:
Weighted-average common shares outstanding	25,167			27,744			26,015			29,203
Basic loss per common share	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)

	Three Months Ended September 30,						Nine Months Ended September 30,
Diluted loss per common share:	2015			2014			2015			2014
Numerator:
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Denominator:
Weighted-average common shares outstanding	25,167			27,744			26,015			29,203
Incremental shares from stock-based compensation plans	—			—			—			—
Denominator for diluted loss per common share	25,167			27,744			26,015			29,203
Diluted loss per common share	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)

For the three and nine months ended September 30, 2015, weighted-average common shares outstanding excludes from the computation of diluted earnings (loss) per common share antidilutive shares underlying options that totaled 3.6 million shares. For the three and nine months ended September 30, 2014, weighted-average common shares outstanding excludes from the computation of diluted earnings (loss) per common share antidilutive shares underlying options that totaled 3.8 million shares and antidilutive Performance Units related to the Company's 2006 Management Incentive Plan that totaled less than 0.1 million shares. As a result of the net loss for the three months ended September 30, 2015 and September 30, 2014 and the nine months ended September 30, 2015 and September 30, 2014, all shares underlying stock options and Performance Units were considered antidilutive for such periods. The number of common shares used in the basic and diluted earnings (loss) per common share computations include nonvested restricted shares of 0.4 million and 0.6 million for the three and nine months ended September 30, 2015 and 2014, respectively, and nonvested restricted share units that we consider to be participating securities of 2.6 million and 0.1 million for the three and nine months ended September 30, 2015 and 2014, respectively.

We repurchased 1,735,277 shares of our common stock during the three months ended September 30, 2015 for $6.9 million, and 3,912,037 shares of our common stock during the nine months ended September 30, 2015 for $17.3 million. We repurchased 1,413,017 shares of our common stock during the three months ended September 30, 2014 for $9.0 million, and 3,117,277 shares of our common stock during the nine months ended September 30, 2014 for $20.0 million.

Pursuant to exercises of outstanding stock options, we issued no shares of our common stock in the three months ended September 30, 2015 and 12,863 shares of our common stock having a value of less than $0.1 million in the nine months ended September 30, 2015. We issued 105,478 shares of our common stock having a value of less than $0.5 million in the three months ended September 30, 2014 and 710,063 shares of our common stock having a value of $2.8 million in the nine months ended September 30, 2014. Stock option exercises during the nine-month period ended September 30, 2014 primarily consisted of exercises by a former executive officer of the Company.

In partial satisfaction of a business acquisition obligation, we issued 187,620 shares of our common stock having a value of $1.3 million in the nine months ended September 30, 2014. There were no shares issued to satisfy business acquisition obligations in the nine months ended September 30, 2015.

6

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note C – Stock-Based Compensation

The Company currently has two stock-based compensation plans: (1) the 2006 Management Incentive Plan (“2006 MIP”) and (2) the 2008 Equity Incentive Plan (“2008 EIP”) (collectively, the “Plans”). We describe the Plans in the Company’s Annual Report on Form 10–K for the fiscal year ended December 31, 2014. For all periods presented herein, awards outside the Plans are referred to as inducement awards.

2008 EIP Awards and Inducement Awards

Stock options granted under the 2008 EIP generally have a term of seven years and vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. The following table summarizes stock option grants during the nine months ended September 30, 2015 and 2014:

Grantee Type	# of Options Granted	Vesting Period	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
2015
Director	249,273	1 year or less	$	4.49	$	2.44
Director	17,092	3 years	$	3.99	$	1.33
Employee inducements (1)	135,000	3 years	$	5.51	$	1.42
2014
Director	51,276	1 year or less	$	6.45	$	1.89
Employee group (2)	1,480,000	3 years	$	6.99	$	1.81
Employee inducements (3)	270,000	3 years	$	6.64	$	1.71

(1) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the first nine months of 2015 to three employees in connection with the employees joining the Company.

(2) The exercise price for these options is $6.36 for the options that vested on June 27, 2015, $6.99 for the options that vest on June 27, 2016 and $7.63 for the options that vest on June 27, 2017.

(3) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the third quarter of 2014 to two executive officers in connection with the employees joining the Company. The weighted average exercise price for these options is calculated based on an exercise price of $6.04 for the options that vested on September 11, 2015, $6.64 for the options that vest on September 11, 2016 and $7.24 for the options that vest on September 11, 2017.

Nonvested stock awards, including both restricted stock and restricted stock units, granted under the 2008 EIP generally are nontransferable until vesting and the holders are entitled to receive dividends with respect to the nonvested shares. Prior to vesting, the grantees of restricted stock are entitled to vote the shares, but the grantees of restricted stock units are not entitled to vote the shares. Generally, nonvested stock awards with time-based vesting criteria vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. Nonvested stock awards with performance-based vesting criteria vest in accordance with specific performance criteria associated with the awards.

7

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes nonvested stock awards granted during the nine months ended September 30, 2015 and 2014:

Grantee Type	# of Shares Granted	Vesting Period	Weighted Average Grant Date Fair Value
2015
Director	4,273	1 year or less	$	4.02
Director	17,092	3 years	$	3.99
Employee group (1)	2,533,333	2 years	$	3.99
Employee inducements (2)	10,000	3 years	$	5.29
2014
Director group	51,276	1 year or less	$	6.45
Employee group	120,000	3 years	$	6.36
Employee inducements (3)	70,000	3 years	$	6.04

(1) The Company granted nonvested performance-based stock awards (restricted stock units) in the first quarter of 2015 to eight executive officers totaling 1,325,000 units. During the third quarter of 2015, the Company issued 1,208,333 units to key employees.

(2) The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the first quarter of 2015 to two employees in connection with the employees joining the Company.

(3) The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the third quarter of 2014 to two executive officers in connection with the employees joining the Company.

2006 MIP Performance Units

On June 19, 2012, seven executive officers of the Company were granted 154,264 Performance Units under the 2006 MIP, comprising all of the then remaining available awards under the 2006 MIP. The awards had an aggregate grant date fair value of $1.2 million and vest ratably over three years. Upon vesting, the Performance Units were settled by the issuance of Company common stock equal to 60% of the number of Performance Units being settled and the payment of cash in an amount equal to 40% of the fair market value of that number of shares of common stock equal to the number of Performance Units being settled. During the nine months endedSeptember 30, 2015, an aggregate of 16,530 Performance Units were settled, which resulted in the issuance of 9,918 shares of common stock and cash payments of less than $0.1 million. There were no shares issued during the third quarter of 2015 in settlement of Performance Units and 16,526 shares issued during the third quarter of 2014 in settlement of Performance Units. Since the June 19, 2012 grant date to September 30, 2015, an aggregate of 137,740 Performance Units were settled by two current executive officers and four former executive officers, and 16,524 Performance Units were forfeited by one former executive officer and currently are available to be granted. Such settlements resulted in the issuance of 79,356 shares of common stock and cash payments totaling $0.3 million. As of September 30, 2015, no Performance Units were outstanding.

Performance-Based Restricted Stock Units

On March 30, 2015, eight executive officers of the Company were granted 1,325,000 performance-based restricted stock units (“PBUs”) under the 2008 EIP. Upon vesting, the PBUs will be settled by the issuance of Company common stock equal to 50% of the number of PBUs being settled and the payment of cash in an amount equal to 50% of the fair market value of that number of shares of common stock equal to the number of PBUs being settled. The PBUs vest and become payable based on the cumulative adjusted EBITDA that the Company (excluding the Healthcare Claims Recovery Audit business) achieves for the two-year performance period ending December 31, 2016. At the threshold performance level, 35% of the PBUs will become vested and payable; at the target performance level, 100% of the PBUs will become vested and payable; and at the maximum performance level, 200% of the PBUs will become vested and payable. If performance falls between the stated performance levels, the percentage of PBUs that shall become vested and payable will be based on straight line interpolation between such stated performance levels (although the PBUs may not become vested and payable for more than 200% of the PBUs and no PBUs shall become vested and payable if performance does not equal or exceed the threshold performance level).

On September 28, 2015, certain employees of the Company were granted 1,208,333 PBUs under the 2008 EIP. Upon vesting, the PBUs will be settled by the issuance of Company common stock equal to 25% of the number of PBUs being settled and the payment of cash in an amount equal to 75% of the fair market value of that number of shares of common stock equal to the number of PBUs being settled. The PBUs vest and become payable based on the cumulative adjusted EBITDA that the Company (excluding the Healthcare Claims Recovery Audit business) achieves for the two-year performance period ending

8

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

December 31, 2016. At the threshold performance level, 35% of the PBUs will become vested and payable and at the target performance level, 100% of the PBUs will become vested and payable. If performance falls between the stated performance levels, the percentage of PBUs that shall become vested and payable will be based on straight line interpolation between such stated performance levels (although the PBUs may not become vested and payable for more than 100% of the PBUs and no PBUs shall become vested and payable if performance does not equal or exceed the threshold performance level).

Selling, general and administrative expenses for the three months ended September 30, 2015 and 2014 include $1.4 million related to stock-based compensation charges. Selling, general and administrative expenses for the nine months ended September 30, 2015 and 2014 include $4.5 million and $3.4 million, respectively, related to stock-based compensation charges. At September 30, 2015, there was $11.2 million of unrecognized stock-based compensation expense related to stock options, restricted stock awards and restricted stock unit awards, which we expect to recognize over a weighted-average period of 1.17 years. The unrecognized stock-based compensation expense related to restricted stock unit awards with performance vesting criteria is based on our estimate of both the number of shares of the Company's common stock that will ultimately be issued and cash payments that will be made when the restricted stock units are settled.

9

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note D – Operating Segments and Related Information

We conduct our operations through the following four reportable segments:

Recovery Audit Services – Americas represents recovery audit services (other than Healthcare Claims 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 (other than Healthcare Claims Recovery Audit services) provided in Europe, Asia and the Pacific region.

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

Healthcare Claims Recovery Audit Services represents recovery audit services for healthcare claims, which consist primarily of services provided under subcontracts related to the Medicare Recovery Audit Contractor program.

Additionally, Corporate Support includes the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the four reportable segments.

We evaluate the performance of our reportable segments based upon revenue and measures of profit or loss we refer to as EBITDA and Adjusted EBITDA. We define 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. We do not have any inter-segment revenue.

10

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Segment information for the three and nine months ended September 30, 2015 and 2014 (in thousands) is as follows:

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Three Months Ended September 30, 2015
Revenue	$	23,981	$	8,052	$	1,332		$	558		$	—		$	33,923
Net loss														$	(3,409	)
Income tax expense														421
Interest income, net														(8		)
EBIT	$	5,255	$	365	$	(2,373	)	$	(532	)	$	(5,711	)	$	(2,996	)
Depreciation of property and equipment	947		148		160			7			—			1,262
Amortization of intangible assets	437		47		33			—			—			517
EBITDA	$	6,639	$	560	$	(2,180	)	$	(525	)	$	(5,711	)	$	(1,217	)
Foreign currency transaction (gains) losses on short-term intercompany balances	393		287		(714		)	—			688			654
Transformation severance and related expenses	101		—		—			472			272			845
Loss on sale/disposal of assets	—		—		1,612			—			—			1,612
Stock-based compensation	—		—		—			—			1,381			1,381
Adjusted EBITDA	$	7,133	$	847	$	(1,282	)	$	(53	)	$	(3,370	)	$	3,275

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific			Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Three Months Ended September 30, 2014
Revenue	$	28,550	$	10,708		$	3,586		$	144		$	—		$	42,988
Net loss															$	(239	)
Income tax expense															554
Interest income, net															(44		)
EBIT	$	7,155	$	(151	)	$	(265	)	$	(1,133	)	$	(5,335	)	$	271
Depreciation of property and equipment	1,111		150			145			22			—			1,428
Amortization of intangible assets	500		299			96			—			—			895
EBITDA	$	8,766	$	298		$	(24	)	$	(1,111	)	$	(5,335	)	$	2,594
Foreign currency transaction (gains) losses on short-term intercompany balances	208		1,192			—			—			(179		)	1,221
Transformation severance and related expenses	44		7			18			26			318			413
Stock-based compensation	—		—			—			—			1,405			1,405
Adjusted EBITDA	$	9,018	$	1,497		$	(6	)	$	(1,085	)	$	(3,791	)	$	5,633

11

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Nine Months Ended September 30, 2015
Revenue	$	71,748	$	27,307	$	4,290		$	999		$	—		$	104,344
Net loss														$	(5,270	)
Income tax expense														1,172
Interest income, net														(103		)
EBIT	$	15,838	$	1,719	$	(5,019	)	$	(1,961	)	$	(14,778	)	$	(4,201	)
Depreciation of property and equipment	2,895		454		479			30			—			3,858
Amortization of intangible assets	1,319		600		98			—			—			2,017
EBITDA	$	20,052	$	2,773	$	(4,442	)	$	(1,931	)	$	(14,778	)	$	1,674
Foreign currency transaction (gains) losses on short-term intercompany balances	651		1,359		7			—			(87		)	1,930
Transformation severance and related expenses	265		268		30			683			308			1,554
Loss on sale/disposal of assets	—		—		1,612			—			—			1,612
Stock-based compensation	—		—		—			—			4,530			4,530
Adjusted EBITDA	$	20,968	$	4,400	$	(2,793	)	$	(1,248	)	$	(10,027	)	$	11,300

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Nine Months Ended September 30, 2014
Revenue	$	80,377	$	32,792	$	8,150		$	1,551		$	—		$	122,870
Net loss														$	(5,381	)
Income tax expense														853
Interest income, net														(33		)
EBIT	$	16,632	$	1,309	$	(3,607	)	$	(4,785	)	$	(14,110	)	$	(4,561	)
Depreciation of property and equipment	3,612		445		463			176			—			4,696
Amortization of intangible assets	1,501		911		288			—			—			2,700
EBITDA	$	21,745	$	2,665	$	(2,856	)	$	(4,609	)	$	(14,110	)	$	2,835
Foreign currency transaction (gains) losses on short-term intercompany balances	164		1,079		—			—			(170		)	1,073
Acquisition-related charges	—		—		249			—			—			249
Transformation severance and related expenses	510		569		396			431			446			2,352
Stock-based compensation	—		—		—			—			3,409			3,409
Adjusted EBITDA	$	22,419	$	4,313	$	(2,211	)	$	(4,178	)	$	(10,425	)	$	9,918

12

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note E – Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less from date of purchase. We place our temporary cash investments with high credit quality financial institutions. At times, certain investments may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit or otherwise may not be covered by FDIC insurance. Some of our cash and cash equivalents are held at banks in jurisdictions outside the U.S. that have restrictions on transferring such assets outside of these countries on a temporary or permanent basis. Such restricted net assets are not significant in comparison to our consolidated net assets.

Our cash and cash equivalents included short-term investments of approximately $3.7 million as of September 30, 2015 and $12.2 million as of December 31, 2014, of which approximately $2.4 million and $2.5 million, respectively, were held at banks outside of the United States, primarily in Brazil and Canada.

Note F – Debt

On January 19, 2010, we entered into a four-year revolving credit and term loan agreement (the “2010 Credit Agreement”) with SunTrust Bank (“SunTrust”). Subsequent modifications of the 2010 Credit Agreement were entered into with SunTrust. Most recently, on December 23, 2014, we entered into an amended and restated revolving credit agreement (the “Credit Facility”) with SunTrust. The Credit Facility, and provisions of the 2010 Credit Agreement where applicable, is guaranteed by the Company and all of its material domestic subsidiaries and secured by substantially all of the assets of the Company.

The amount available for borrowing under the Credit Facility is $20.0 million, and as of September 30, 2015 we had no outstanding borrowings. With the Credit Facility provision of a fixed applicable margin of 1.75% plus a specified index rate based on one-month LIBOR, the interest rate that would have applied at September 30, 2015 had any borrowings been outstanding was approximately 1.95%. We also must pay a commitment fee of 0.25% per annum, payable quarterly, on the unused portion of the Credit Facility.

The Credit Facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financial statements and other reports, maintenance of existence, and transactions with affiliates. The negative covenants limit the ability of the Company, among other things, to incur debt, incur liens, make investments, sell assets or declare or pay dividends on its capital stock. The financial covenants included in the Credit Facility, among other things, limit the amount of capital expenditures the Company can make, set forth maximum leverage and net funded debt ratios for the Company and a minimum fixed charge coverage ratio, and also require the Company to maintain minimum consolidated earnings before interest, taxes, depreciation and amortization. In addition, the Credit Facility includes customary events of default. The Company was in compliance with the covenants in its Credit Facility as of September 30, 2015.

Note G – Fair Value of Financial Instruments

We state cash equivalents at cost, which approximates fair market value. The carrying values for receivables from clients, unbilled services, accounts payable, deferred revenue and other accrued liabilities reasonably approximate fair market value due to the nature of the financial instrument and the short term maturity of these items.

We had no debt outstanding as of September 30, 2015 and December 31, 2014. Should we have debt outstanding in the future, we would consider the factors used in determining the fair value of debt to be Level 3 inputs (significant unobservable inputs).

Note H – Commitments and Contingencies

Legal Proceedings

We are party to a variety of legal proceedings arising in the normal course of business. While the results of these proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on our financial position, results of operations or cash flows.

13

PRGX GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note I – Income Taxes

Reported income tax expense in each period primarily results from taxes on the income of foreign subsidiaries. The effective tax rates generally differ from the expected tax rate due primarily to the Company’s deferred tax asset valuation allowance on the domestic earnings and taxes on income of foreign subsidiaries.

Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service in the U.S. and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.

We apply a “more-likely-than-not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We refer to GAAP for guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. In accordance with FASB ASC 740, our policy for recording interest and penalties associated with tax positions is to record such items as a component of income before income taxes. A number of years may elapse before a particular tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments also varies by tax jurisdiction.

Note J - Business Acquisitions and Divestitures

We completed several acquisitions and divestitures in recent years (see Note 12 in our Annual Report on Form 10-K for the year ended December 31, 2014). Generally, we acquire businesses that we believe advance our business strategy and we divest assets or businesses that we no longer find strategically aligned with our service offerings.

In August 2015, we divested certain assets from a document service offering purchased as part of the Business Strategy, Inc. acquisition in 2011.

We did not receive any initial cash payments at closing of the transaction and recognized a loss on the sale of $1.6 million, which we recognized in Other loss in the Consolidated Statements of Operations. We may receive a portion of revenue recognized by the buyer for the period from January 1, 2016 to December 31, 2016 that is based on a percentage of revenue from the clients transferred in connection with the disposition. The revenue sharing percentage ranges from 10% to 30% based on the type of solution or service to be performed.

Note K – Subsequent Events

None.

14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We conduct our operations through four reportable segments: Recovery Audit Services - Americas, Recovery Audit Services - Europe/Asia-Pacific, Adjacent Services and Healthcare Claims Recovery Audit Services. The Recovery Audit Services - Americas segment represents recovery audit services (other than Healthcare Claims Recovery Audit Services) we provide in the U.S., Canada and Latin America. The Recovery Audit Services - Europe/Asia-Pacific segment represents recovery audit services (other than Healthcare Claims Recovery Audit Services) we provide in Europe, Asia and the Pacific region. The Adjacent Services segment represents data transformation, data analytics and associated advisory services. The Healthcare Claims Recovery Audit Services segment represents recovery audit services that involve the identification of overpayments and underpayments made by healthcare payers to healthcare providers such as hospitals and physicians’ practices and includes services we provide as a subcontractor to three of the four prime contractors in the Medicare Recovery Audit Contractor program (the “Medicare RAC program”) of the Centers for Medicare and Medicaid Services (“CMS”). We include the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the four reportable segments in Corporate Support.

Recovery auditing is a business service focused on finding overpayments created by errors in payment transactions, such as missed or inaccurate discounts, allowances and rebates, vendor pricing errors, erroneous coding and duplicate payments. Generally, we earn our recovery audit revenue by identifying overpayments made by our clients, assisting our clients in recovering the overpayments from their vendors, and collecting a specified percentage of the recoveries from our clients as our fee. The fee percentage we earn is based on specific contracts with our clients that generally also specify: (a) time periods covered by the audit; (b) the nature and extent of services we are to provide; and (c) the client’s responsibilities to assist and cooperate with us. Clients generally recover claims by either taking credits against outstanding payables or future purchases from the relevant vendors, or receiving refund checks directly from those vendors. The manner in which a claim is recovered by a client is often dictated by industry practice. In addition, many clients establish client-specific procedural guidelines that we must satisfy prior to submitting claims for client approval. Our recovery audit business also includes contract compliance services which focus on auditing supplier billings against large and complex services, construction and licensing contracts. Such services include verification of the accuracy of third party reporting, appropriateness of allocations and other charges in cost or revenue sharing types of arrangements, adherence to contract covenants and other risk mitigation requirements and numerous other reviews and procedures to assist our clients with proper monitoring and enforcement of the obligations of their contractors. For some services we provide, such as certain of our services in our Adjacent Services segment, we earn our compensation in the form of a fixed fee, a fee per hour, or a fee per other unit of service.

We earn the vast majority of our recovery audit revenue from clients in the retail industry due to many factors, including the high volume of transactions and the complicated pricing and allowance programs typical in this industry. Changes in consumer spending associated with economic fluctuations generally impact our recovery audit revenue to a lesser degree than they affect individual retailers due to several factors, including:

• Diverse client base – our clients include a diverse mix of discounters, grocery, pharmacy, department and other stores that tend to be impacted to varying degrees by general economic fluctuations, and even in opposite directions from each other depending on their position in the market and their market segment;

• Motivation – when our clients experience a downturn, they frequently are more motivated to use our services to recover prior overpayments to make up for relatively weaker financial performance in their own business operations;

• Nature of claims – the relationship between the dollar amount of recovery audit claims identified and client purchases is non-linear. Claim volumes are generally impacted by purchase volumes, but a number of other factors may have an even more significant impact on claim volumes, including new items being purchased, changes in discount, rebate, marketing allowance and similar programs offered by vendors and changes in a client’s or a vendor’s information processing systems; and

• Timing – the client purchase data on which we perform our recovery audit services is historical data that typically reflects transactions between our clients and their vendors that took place 3 to 15 months prior to the data being provided to us for audit. As a result, we generally experience a delayed impact from economic changes that varies by client and the impact may be positive or negative depending on the individual clients’ circumstances.

While the net impact of the economic environment on our recovery audit revenue is difficult to determine or predict, we believe that for the foreseeable future, our revenue will remain at a level that will not have a significant adverse impact on our liquidity, and we have taken steps to mitigate the adverse impact of an economic downturn on our revenue and overall financial health. These steps include devoting substantial efforts to develop an improved service delivery model to enable us to more cost

15

effectively serve our clients. Further, we continue to pursue our ongoing growth strategy to expand our business beyond our core recovery audit services to retailers by growing the portion of our business that provides recovery audit services to enterprises other than retailers, such as our offerings to commercial clients; contract compliance service offerings; expansion into new industry verticals, such as oil and gas; and growth within our Adjacent Services segment.

Our Adjacent Services business targets client functional and process areas where we have established expertise, enabling us to provide services to finance and procurement executives to improve working capital, optimize purchasing leverage in vendor pricing negotiations, improve insight into product margin and true cost of goods for resale, identify and manage risks associated with vendor compliance, improve quality of vendor master data and improve visibility and diagnostics of direct and indirect spend. As our clients’ data volumes and complexity levels continue to grow, we are using our deep data management experience to develop new actionable insight solutions, as well as to develop custom analytics and data transformation services. Taken together, our deep understanding of our clients’ procure-to-pay data and our technology-based solutions provide multiple routes to help our clients achieve greater profitability.

During 2013, auditing under our current Medicare RAC program subcontracts became subject to significant additional restrictions imposed by CMS on all Medicare recovery auditors, including deadlines for requesting medical records from providers and submitting claims and the types of claims that may be audited. These restrictions began to limit our Medicare RAC program revenue in the third quarter of 2013 and had a significant negative impact on our fourth quarter 2013 and annual 2014 Medicare RAC program revenue. For a number of reasons, including the significant uncertainties and financial risks inherent in the Medicare RAC program, we withdrew from the Medicare RAC program rebid process in February 2014. On April 28, 2015, the Company announced its decision to exit its Healthcare Claims Recovery Audit Services business due to the continued challenges in the Medicare RAC business and our lack of a diversified client base in that segment. The Company has incurred and will likely continue to incur employee termination and other exit costs as a result of this strategic decision. In connection with certain Medicare RAC program overpayment findings under appeal, CMS has proposed to settle with hospitals willing to withdraw such appeals by offering to pay the hospitals 68% of the original inpatient claim paid amount for all eligible claims that they have billed to Medicare. Although we have accrued an estimated liability for our fee repayment obligations under the Medicare RAC program subcontracts, such accrual is based on our historical experience with appeals. As a subcontractor, we are not a party to communications with CMS regarding the settlement; however, we have been in communication with the prime contractors regarding the proposal and its financial impact remains uncertain at this time. Our financial condition and results of operations could be adversely affected if we are required to return Medicare RAC program fees substantially in excess of our accrued liability.

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. We include a reconciliation of net loss to each of EBIT, EBITDA and Adjusted EBITDA and a calculation of Adjusted EBITDA by segment below in “–Adjusted EBITDA”.

16

Results of Operations

The following table sets forth the percentage of revenue represented by certain items in the Company’s Condensed Consolidated Statements of Operations (Unaudited) for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
Cost of revenue	71.9		66.7		70.0		71.2
Selling, general and administrative expenses	25.0		24.4		25.0		25.6
Depreciation of property and equipment	3.7		3.3		3.7		3.8
Amortization of intangible assets	1.5		2.1		1.9		2.2
Total operating expenses	102.1		96.5		100.6		102.8
Operating income (loss)	(2.1	)	3.5		(0.6	)	(2.8	)
Foreign currency transaction losses on short-term intercompany balances	1.9		2.8		1.8		0.9
Interest income, net	—		—		(0.1	)	—
Other loss	4.2		—		1.4		—
Income (loss) before income taxes	(8.2	)	0.7		(3.7	)	(3.7	)
Income tax expense	1.2		1.3		1.1		0.7
Net income (loss)	(9.4	)%	(0.6	)%	(4.8	)%	(4.4	)%

Three and Nine Months Ended September 30, 2015 Compared to the Corresponding Period of the Prior Year

Revenue. Revenue was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Recovery Audit Services – Americas	$	23,981	$	28,550	$	71,748	$	80,377
Recovery Audit Services – Europe/Asia-Pacific	8,052		10,708		27,307		32,792
Adjacent Services	1,332		3,586		4,290		8,150
Healthcare Claims Recovery Audit Services	558		144		999		1,551
Total	$	33,923	$	42,988	$	104,344	$	122,870

Total revenue decreased for the three months ended September 30, 2015 by $9.1 million, or 21.1%, compared to the same period in 2014. Total revenue decreased for the nine months ended September 30, 2015 by $18.5 million, or 15.1%, compared to the same period in 2014.

Below is a discussion of our revenue for our four reportable segments.

Recovery Audit Services – Americas revenue decreased by $4.6 million, or 16.0%, for the third quarter of 2015 compared to the third quarter of 2014. For the nine months ended September 30, 2015, revenue decreased by $8.6 million, or 10.7%, compared to the same period in the prior year. One of the factors contributing to changes in our reported revenue is the strength of the U.S. dollar relative to foreign currencies. Changes in the average value of the U.S. dollar during the periods relative to foreign currencies negatively impacted our revenue for the reported periods. On a constant dollar basis, adjusted for changes in foreign exchange (“FX”) rates, revenue for the third quarter of 2015decreased by 11.5% compared to a decrease of 16.0% as reported and decreased by 7.1% during the first nine months of 2015 compared to a decrease of 10.7% as reported.

In addition to the impact of the change in FX rates, the year over year net decrease in our Recovery Audit Services – Americas revenue in the three and nine months ended September 30, 2015 was due to a number of factors. Revenue at our existing clients declined 8.5% in the three-month period and 8.1% in the nine-month period primarily due to lower contingency

17

fee rates at several clients, delays in claims conversion at key clients and a change in position from primary auditor to secondary auditor at a large client. Additionally, the 2014 third quarter included revenue of approximately $0.9 million from a large contract compliance claim and revenue from a large client who filed bankruptcy in the third quarter of this year, which together combined for approximately $1.4 million of revenue in the prior year. Partially offsetting these declines, revenue increased 4.1% and 3.5% in the three and nine-month periods, respectively, due to new clients.

Recovery Audit Services – Europe/Asia-Pacific revenue decreased by $2.7 million, or 24.8%, for the three months ended September 30, 2015 compared to the same period in 2014. For the nine months ended September 30, 2015, revenue decreased by $5.5 million, or 16.7%, compared to the same period in the prior year. The changes in the value of the U.S. dollar relative to foreign currencies in Europe, Asia and the Pacific region negatively impacted reported revenue for the third quarter and first nine months of 2015 compared to the same periods in 2014. On a constant dollar basis, adjusted for changes in FX rates, revenue decreased by 15.2% for the third quarter of 2015 and decreased by 4.9% during the first nine months of 2015 compared to the same periods in 2014. The 15.2% net decrease on a constant dollar basis for the three-month period included net decreases in revenue of 13.3% attributable to existing clients and 2.0% attributable to lost clients. The 4.9% net decrease in revenue on a constant dollar basis for the nine-month period included decreases in revenue of 4.6% attributable to lost clients and 1.6% attributable to cyclical clients, which were partially offset by an increase in revenue of 2.0% for new clients.

Adjacent Services revenue decreased by $2.3 million, or 62.9%, for the three months ended September 30, 2015 and decreased$3.9 million, or 47.4%, for the nine months ended September 30, 2015 compared to the same periods in 2014 primarily due to the sale of our Chicago, Illinois-based consulting practice on October 1, 2014 and reduced revenue from delays associated with the transition between phases of a few large engagements.

Healthcare Claims Recovery Audit Services revenue increased $0.4 million for the three months ended September 30, 2015 when compared to the same period in 2014 and decreased$0.6 million for the nine months ended September 30, 2015 when compared to the same period in 2014. On April 28, 2015, the Company announced its decision to exit its Healthcare Claims Recovery Audit Services business.

Cost of Revenue (“COR”). COR consists principally of commissions and other forms of variable compensation we pay to our auditors based primarily on the level of overpayment recoveries and/or profit margins derived therefrom, fixed auditor salaries, compensation paid to various types of hourly support staff and salaries for operational and client service managers for our recovery audit services and our Adjacent Services businesses. COR also includes other direct and indirect costs incurred by these personnel, including office rent, travel and entertainment, telephone, utilities, maintenance and supplies and clerical assistance. A significant portion of the components comprising COR is variable and will increase or decrease with increases or decreases in revenue.

COR was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Recovery Audit Services – Americas	$	15,139	$	17,074	$	45,272	$	50,148
Recovery Audit Services – Europe/Asia-Pacific	5,883		7,608		18,927		23,698
Adjacent Services	2,485		3,284		6,586		9,168
Healthcare Claims Recovery Audit Services	880		715		2,300		4,443
Total	$	24,387	$	28,681	$	73,085	$	87,457

COR as a percentage of revenue for Recovery Audit Services – Americas was 63.1% and 59.8% for the three months ended September 30, 2015 and 2014, respectively, and 63.1% and 62.4% for the nine months ended September 30, 2015 and 2014, respectively. The increase in COR as a percentage of revenue for the three and nine months ended September 30, 2015 compared to the same periods in 2014 is primarily due to the declines in revenue for the the 2015 periods and our continued investment in our contract compliance service offering.

COR as a percentage of revenue for Recovery Audit Services – Europe/Asia-Pacific was 73.1% and 71.0% for the three months ended September 30, 2015 and 2014, respectively, and 69.3% and 72.3% for the nine months ended September 30, 2015 and 2014, respectively. The increase in COR as a percentage of revenue for the three months ended September 30, 2015 compared to the same period in 2014 is primarily due to the decline in revenue for the third quarter of 2015.

COR as a percentage of revenue for Recovery Audit Services – Europe/Asia-Pacific is generally higher than COR as a percentage of revenue for Recovery Audit Services – Americas primarily due to differences in service delivery models, scale

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and geographic fragmentation. The Recovery Audit Services – Europe/Asia-Pacific segment generally serves fewer clients in each geographic market and on average generates lower revenue per client than those served by the Company’s Recovery Audit Services – Americas segment.

COR as a percentage of revenue for Adjacent Services was 186.6% and 91.6% for the three months ended September 30, 2015 and 2014, respectively, and 153.5% and 112.5% for the nine months ended September 30, 2015 and 2014, respectively. The increase in COR as a percentage of revenue for the three and nine months ended September 30, 2015 compared to the same periods in 2014 is primarily due to carrying costs associated with the delays in transitioning between phases of a few large engagements while continuing to focus on closing new client sales.

Healthcare Claims Recovery Audit Services COR relates primarily to costs associated with the Medicare RAC program subcontracts. COR increased $0.2 million for the three months ended September 30, 2015 and decreased $2.1 million for the nine months ended September 30, 2015 compared to the same periods in 2014. The decrease for the nine months ended September 30, 2015 was primarily due to personnel reductions and reduced direct costs associated with the Medicare RAC program such as costs for medical records and other costs associated with the generation of claims. These reductions were not sufficient to enable us to achieve revenue in excess of COR for our services under the Medicare RAC program, resulting in COR exceeding revenue in the 2015 periods.

Selling, General and Administrative Expenses (“SG&A”). SG&A expenses for all segments other than Corporate Support include the expenses of sales and marketing activities, information technology services and allocated corporate data center costs, human resources, legal, accounting, administration, foreign currency transaction gains and losses other than those relating to short-term intercompany balances and gains and losses on asset disposals. Corporate Support SG&A represents the unallocated portion of SG&A expenses which are not specifically attributable to our segment activities and include the expenses of information technology services, the corporate data center, human resources, legal, accounting, treasury, administration and stock-based compensation charges.

SG&A expenses were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Recovery Audit Services – Americas	$	1,810	$	2,502	$	5,773	$	8,320
Recovery Audit Services – Europe/Asia-Pacific	1,322		1,610		4,248		5,350
Adjacent Services	129		326		527		1,838
Healthcare Claims Recovery Audit Services	203		540		630		1,717
Subtotal for reportable segments	3,464		4,978		11,178		17,225
Corporate Support	5,023		5,514		14,865		14,280
Total	$	8,487	$	10,492	$	26,043	$	31,505

Recovery Audit Services – Americas SG&A decreased by $0.7 million, or 27.7%, for the three months ended September 30, 2015 and decreased by $2.5 million, or 30.6%, for the nine months ended September 30, 2015 compared to the same periods in 2014 due primarily to lower compensation expense that resulted from our transformation efforts and reductions in bad debt expense.

Recovery Audit Services – Europe/Asia-Pacific SG&A decreased$0.3 million, or 17.9%, in the three months ended September 30, 2015 and decreased$1.1 million, or 20.6%, in the nine months ended September 30, 2015 compared to the same periods in 2014. These decreases are primarily due to an increase in the value of the U.S. dollar relative to foreign currencies in Europe, Asia and the Pacific region between the 2015 and 2014 periods.

Adjacent Services SG&A decreased$0.2 million, or 60.4%, in the three months ended September 30, 2015 and decreased$1.3 million, or 71.3%, in the nine months ended September 30, 2015 compared to the same periods in 2014. These decreases are primarily due to lower compensation, travel and office-related expenses that declined as a result of personnel reductions that were made as we rationalized our service offerings in this segment.

Healthcare Claims Recovery Audit Services SG&A decreased$0.3 million, or 62.4%, in the three months ended September 30, 2015 and decreased$1.1 million, or 63.3%, in the nine months ended September 30, 2015 compared to the same periods in 2014. These decreases are primarily due to reductions in overhead charges and occupancy costs that resulted from staff reductions in this segment necessitated by the decline in Healthcare Claims Recovery Audit Services revenue.

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Corporate Support SG&A decreased$0.5 million, or 8.9%, for the three months ended September 30, 2015 and increased$0.6 million, or 4.1%, for the nine months ended September 30, 2015 compared to the same periods in 2014. The decrease for the three-month period is primarily due to a decrease in incentive compensation expenses. The increase for the nine-month period is primarily due to an increase in equity compensation expenses which were partially offset by reductions in legal and accounting costs.

Depreciation of property and equipment. Depreciation of property and equipment was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Recovery Audit Services – Americas	$	947	$	1,111	$	2,895	$	3,612
Recovery Audit Services – Europe/Asia-Pacific	148		150		454		445
Adjacent Services	160		145		479		463
Healthcare Claims Recovery Audit Services	7		22		30		176
Total	$	1,262	$	1,428	$	3,858	$	4,696

The overall decrease in depreciation relates primarily to the mix and timing of our capital expenditures and the associated useful lives for such purchases.

Amortization of intangible assets. Amortization of intangible assets was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Recovery Audit Services – Americas	$	437	$	500	$	1,319	$	1,501
Recovery Audit Services – Europe/Asia-Pacific	47		299		600		911
Adjacent Services	33		96		98		288
Total	$	517	$	895	$	2,017	$	2,700

The decreases in amortization expense for the three and nine months ended September 30, 2015 compared to the same periods in 2014 are primarily due to the end of the finite lives of certain intangible assets, added no new intangible assets since 2013, the disposition of intangible assets as a result of the sale of our Chicago, Illinois-based consulting practice on October 1, 2014 and the August 2015 disposal of certain non-core assets related to a document service offering purchased as part of the Business Strategy, Inc. acquisition in 2011. We have not recorded any amortization of intangible assets in our Healthcare Claims Recovery Audit Services segment because there have been no business acquisitions in this segment. Unless we complete an acquisition in any of our reportable segments in 2015, we anticipate that amortization expense will continue to decrease in 2015 compared to 2014.

Foreign Currency Transaction (Gains) Losses on Short-Term Intercompany Balances. Foreign currency transaction gains and losses on short-term intercompany balances result from fluctuations in the exchange rates for foreign currencies and the U.S. dollar and the impact of these fluctuations, primarily on balances payable by our foreign subsidiaries to their U.S. parent. Substantial changes from period to period in foreign currency exchange rates may significantly impact the amount of such gains and losses. The strengthening of the U.S. dollar relative to other currencies results in recorded losses on short-term intercompany balances receivable from our foreign subsidiaries while the relative weakening of the U.S. dollar results in recorded gains. In the three months ended September 30, 2015 and 2014, we recorded foreign currency transaction losses of $0.7 million and $1.2 million, respectively, on short-term intercompany balances. In the nine months ended September 30, 2015 and 2014 we recorded foreign currency transaction losses of $1.9 million and $1.1 million, respectively, on short-term intercompany balances.

Income Tax Expense. Our income tax expense amounts as reported in the accompanying Condensed Consolidated Financial Statements (Unaudited) do not reflect amounts that normally would be expected due to several factors. The most significant of these factors is that for U.S. tax reporting purposes we have net operating loss carryforwards and other tax attributes which created deferred tax assets on our balance sheet. We reduce our deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. Generally, these factors result in our recording no net income tax expense or benefit relating to our operations in the United States. Reported income tax expense for the three and nine months ended September 30, 2015 and 2014 primarily resulted from taxes on the income of certain of our foreign subsidiaries.

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Adjusted EBITDA. We evaluate the performance of our reportable segments based upon revenue and measures of profit or loss we refer to as EBITDA and Adjusted EBITDA. We define 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.

Reconciliations of net income (loss) to each of EBIT, EBITDA and Adjusted EBITDA for the periods included in this report are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Income tax expense	421			554			1,172			853
Interest (income), net	(8		)	(44		)	(103		)	(33		)
EBIT	$	(2,996	)	$	271		$	(4,201	)	$	(4,561	)
Depreciation of property and equipment	1,262			1,428			3,858			4,696
Amortization of intangible assets	517			895			2,017			2,700
EBITDA	$	(1,217	)	$	2,594		$	1,674		$	2,835
Foreign currency transaction (gains) losses on short-term intercompany balances	654			1,221			1,930			1,073
Acquisition-related charges	—			—			—			249
Transformation severance and related expenses	845			413			1,554			2,352
Loss on sale/disposal of assets	1,612			—			1,612			—
Stock-based compensation	1,381			1,405			4,530			3,409
Adjusted EBITDA	$	3,275		$	5,633		$	11,300		$	9,918

Transformation severance and related expenses increased$0.4 million for the three months ended September 30, 2015 and $0.8 million for the nine months ended September 30, 2015 compared to the same periods in 2014. Transformation severance and related expenses fluctuate with staff reductions and lease expenses associated with vacating office space across all segments in order to reduce our cost structure.

Stock-based compensation was essentially unchanged for the three months ended September 30, 2015 compared to the prior year and increased $1.1 million, or 32.9% for the nine months ended September 30, 2015 compared to the same period in 2014. The year over year increase for the nine-month period is due to higher expenses associated with equity awards granted during the 2015 fiscal year.

We include a detailed calculation of Adjusted EBITDA by segment in Note D of “Notes to Consolidated Financial Statements” in Item 1 of this Form 10-Q. A summary of Adjusted EBITDA by segment for the three and nine months ended September 30, 2015 and 2014 is as follows (in thousands):

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Recovery Audit Services – Americas	$	7,133		$	9,018		$	20,968		$	22,419
Recovery Audit Services – Europe/Asia-Pacific	847			1,497			4,400			4,313
Adjacent Services	(1,282		)	(6		)	(2,793		)	(2,211		)
Healthcare Claims Recovery Audit Services	(53		)	(1,085		)	(1,248		)	(4,178		)
Subtotal for reportable segments	6,645			9,424			21,327			20,343
Corporate Support	(3,370		)	(3,791		)	(10,027		)	(10,425		)
Total	$	3,275		$	5,633		$	11,300		$	9,918

Recovery Audit Services – Americas Adjusted EBITDA decreased $1.9 million, or 20.9%, in the three months ended September 30, 2015 and $1.5 million, or 6.5%, for the nine months ended September 30, 2015 compared to the same periods in 2014 due primarily to reductions in revenue and continuing investments in our contract compliance service offering.

Recovery Audit Services – Europe/Asia-Pacific Adjusted EBITDA for the three months ended September 30, 2015 decreased $0.6 million, or 43.4%, compared to the same period in 2014 due mainly to reductions in revenue. Adjusted EBITDA increased $0.1 million, or 2.0%, for the nine months ended September 30, 2015 compared to the same period in 2014.

Adjacent Services Adjusted EBITDA declined $1.3 million for the three months ended September 30, 2015 and $0.6 million for the nine months ended September 30, 2015 compared to the same periods in 2014. Excluding the impact of the sale of the Chicago-Illinois based consulting practice on October 1, 2014, the decline in Adjusted EBITDA for both periods is primarily due to the reduction in Adjacent Services revenue and carrying costs associated with the delays in transitioning between phases of a few large engagements while continuing to focus on closing new client sales.

Healthcare Claims Recovery Audit Services Adjusted EBITDA improved $1.0 million, or 95.1%, for the three months ended September 30, 2015 and $1.9 million, or 45.4%, for the nine months ended September 30, 2015 compared to the same periods in 2014. These improvements are due to reductions in COR and SG&A expenses.

Corporate Support Adjusted EBITDA improved by $0.4 million, or 11.1%, for the three and nine months ended September 30, 2015 compared to the same period in 2014. This increase in Adjusted EBITDA is due primarily to reduced legal and incentive compensation costs. Adjusted EBITDA for the nine-month period ended September 30, 2015 improved $0.3 million, or 3.2% compared to the same period in 2014 due mainly to reduced incentive compensation costs.

Liquidity and Capital Resources

As of September 30, 2015, we had $15.7 million in cash and cash equivalents, of which $5.6 million was held in U.S. bank accounts, and no borrowings outstanding against our $20.0 million revolving credit facility.

Operating Activities. Net cash provided by operating activities was $12.4 million and $7.1 million during the nine months ended September 30, 2015 and 2014, respectively. These amounts consist of two components, specifically, net loss adjusted for certain non-cash items (such as depreciation, amortization, stock-based compensation expense, and deferred income taxes) and changes in assets and liabilities, primarily working capital, as follows (in thousands):

	Nine Months Ended September 30,
	2015			2014
Net loss	$	(5,270	)	$	(5,381	)
Adjustments for certain non-cash items	13,857			11,012
	8,587			5,631
Changes in operating assets and liabilities	3,776			1,499
Net cash provided by operating activities	$	12,363		$	7,130

The change in net cash provided by operating activities resulted primarily from reductions in COR and SG&A expenses in excess of revenue reductions, the net effect of which significantly improved operating income. In addition to the improved operating income, there was also a small improvement in working capital. We include an itemization of these changes in our Condensed Consolidated Statements of Cash Flows (Unaudited) in Item 1 of this Form 10-Q.

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Investing Activities. Net cash used for property and equipment capital expenditures was $3.2 million and $3.6 million during the nine months ended September 30, 2015 and 2014, respectively. These capital expenditures primarily related to investments we made to upgrade our information technology infrastructure.

Capital expenditures are discretionary and we currently expect to continue to make capital expenditures to enhance our information technology infrastructure and proprietary audit tools in 2015. Should we experience changes in our operating results, we may alter our capital expenditure plans.

Financing Activities. Net cash used by financing activities was $17.5 million for the nine months ended September 30, 2015 and $20.1 million for the same period in 2014. The decrease in net cash used by financing activities in the nine months ended September 30, 2015 compared to same period in 2014 is primarily due to the reduced cost of repurchased common stock in the 2015 period.

Secured Credit Facility

On January 19, 2010, we entered into a four-year revolving credit and term loan agreement with SunTrust Bank (“SunTrust”). The SunTrust credit facility initially consisted of a $15.0 million committed revolving credit facility and a $15.0 million term loan. The SunTrust term loan required quarterly principal payments of $0.8 million beginning in March 2010, and a final principal payment of $3.0 million due in January 2014 that we paid in December 2013. The SunTrust credit facility is guaranteed by the Company and all of its material domestic subsidiaries and secured by substantially all of the assets of the Company.

On January 17, 2014, we entered into an amendment of the SunTrust credit facility that increased the committed revolving credit facility from $15.0 million to $25.0 million, lowered the applicable margin to a fixed rate of 1.75%, eliminated the provision limiting availability under the revolving credit facility based on eligible accounts receivable, increased our stock repurchase program limits, and extended the scheduled maturity of the revolving credit facility to January 16, 2015 (subject to earlier termination as provided therein).

On December 23, 2014, we entered into an amended and restated SunTrust credit facility that reduced the committed revolving credit facility from $25.0 million to $20.0 million. The credit facility bears interest at a rate per annum comprised of a specified index rate based on one-month LIBOR, plus an applicable margin (1.75% per annum). The credit facility includes two financial covenants (a maximum leverage ratio and a minimum fixed charge coverage ratio) that apply only if we have borrowings under the credit facility that arise or remain outstanding during the final 30 calendar days of any fiscal quarter. These financial covenants also will be tested, on a modified pro forma basis, in connection with each new borrowing under the credit facility. This amendment also extends the scheduled maturity of the revolving credit facility to December 23, 2017 and lowered the commitment fee to 0.25% per annum, payable quarterly, on the unused portion of the revolving credit facility.

As of September 30, 2015, we had no outstanding borrowings under the SunTrust credit facility. With the provision of a fixed applicable margin of 1.75% per the amendment of the SunTrust credit facility, the interest rate that would have applied at September 30, 2015 had any borrowings been outstanding was approximately 1.95%.

The SunTrust credit facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financial statements and other reports, maintenance of existence, and transactions with affiliates. The negative covenants limit the ability of the Company, among other things, to incur debt, incur liens, make investments, sell assets or declare or pay dividends on its capital stock. The financial covenants included in the SunTrust credit facility, among other things, limit the amount of capital expenditures the Company can make, set forth maximum leverage and net funded debt ratios for the Company and a minimum fixed charge coverage ratio, and also require the Company to maintain minimum consolidated earnings before interest, taxes, depreciation and amortization. In addition, the SunTrust credit facility includes customary events of default.

We believe that we will have sufficient borrowing capacity and cash generated from operations to fund our capital and operational needs for at least the next twelve months.

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Stock Repurchase Program

On February 21, 2014, our Board of Directors authorized a stock repurchase program under which we may repurchase up to $10.0 million of our common stock from time to time through March 31, 2015. On March 25, 2014, our Board of Directors authorized a $10.0 million increase to the stock repurchase program. On October 24, 2014, our Board of Directors authorized a

$20.0 million increase to the stock repurchase program, increasing the total stock repurchase program since its inception to

$40.0 million, and extended the duration of the program to December 31, 2015. From the February 2014 announcement of the Company’s current stock repurchase program through September 30, 2015, the Company has repurchased 7.5 million shares, or 25.0%, of its common stock outstanding on the date of the announcement, for an aggregate cost of approximately $40.0 million. For the nine months ended September 30, 2015, we repurchased 3.9 million shares under this plan for an aggregate cost of $17.3 million. These shares were retired and accounted for as a reduction to Shareholders' equity in the Condensed Consolidated Balance Sheet (Unaudited). Direct costs incurred to acquire the shares are included in the total cost of the shares. During October 2015, the Company’s Board of Directors approved a $10 million increase in the program and extended the duration of the program to December 31, 2016.

The timing and amount of future repurchases, if any, will depend upon the Company’s stock price, the amount of the Company’s available cash, regulatory requirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase program at any time.

Off-Balance Sheet Arrangements

As of September 30, 2015, the Company did not have any material off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of the SEC’s Regulation S-K.

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Critical Accounting Policies

We describe the Company’s significant accounting policies in Note 1 of Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. We consider certain of these accounting policies to be “critical” to the portrayal of the Company’s financial position and results of operations, as they require the application of significant judgment by management. As a result, they are subject to an inherent degree of uncertainty. We identify and discuss these “critical” accounting policies in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Management bases its estimates and judgments on historical experience and on various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, management evaluates its estimates and judgments, including those considered “critical”. Management has discussed the development, selection and evaluation of accounting estimates, including those deemed “critical,” and the associated disclosures in this Form 10-Q with the Audit Committee of the Board of Directors.

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Forward-Looking Statements

Some of the information in this Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which statements involve substantial risks and uncertainties including, without limitation, statements regarding: (1) future results of operations or of the Company’s financial condition, (2) the adequacy of the Company’s current working capital and other available sources of funds, (3) the Company's goals and plans for the future, including its strategic initiatives and growth opportunities, (4) expectations regarding future revenue trends, and (5) the expected impact of the Company’s decision to exit the Company's Healthcare Claims Recovery Audit Services business. All statements that cannot be assessed until the occurrence of a future event or events should be considered forward-looking. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue” or similar words. Risks and uncertainties that may potentially impact these forward-looking statements include, without limitation, those set forth under Part I, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and its other periodic reports filed with the Securities and Exchange Commission. The Company disclaims any obligation or duty to update or modify these forward-looking statements.

There may be events in the future, however, that the Company cannot accurately predict or over which the Company has no control. The risks and uncertainties listed in this section, as well as any cautionary language in this Form 10-Q, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of any of the events denoted above as risks and uncertainties and elsewhere in this Form 10-Q could have a material adverse effect on our business, financial condition and results of operations.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Market Risk. Our reporting currency is the U.S. dollar, although we transact business in various foreign locations and currencies. As a result, our financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we provide our services. Our operating results are exposed to changes in exchange rates between the U.S. dollar and the currencies of the other countries in which we operate. When the U.S. dollar strengthens against other currencies, the value of foreign functional currency revenue decreases. When the U.S. dollar weakens, the value of the foreign functional currency revenue increases. Overall, we are a net receiver of currencies other than the U.S. dollar and, as such, benefit from a weaker dollar. We therefore are adversely affected by a stronger dollar relative to major currencies worldwide. During the three months ended September 30, 2015, we recognized $1.6 million of operating income from operations located outside the U.S., virtually all of which was originally accounted for in currencies other than the U.S. dollar. Upon translation into U.S. dollars, such operating income would increase or decrease, assuming a hypothetical 10% change in weighted-average foreign currency exchange rates against the U.S. dollar, by $0.2 million for the three months ended September 30, 2015. We currently do not have any arrangements in place to hedge our foreign currency risk.

Interest Rate Risk. Our interest income and expense are sensitive to changes in the general level of U.S. interest rates. In this regard, changes in U.S. interest rates affect the interest earned on our cash equivalents as well as interest paid on amounts outstanding under our revolving credit facility, if any. As of September 30, 2015, we had no borrowings outstanding against our $20.0 million revolving credit facility. Interest on our revolving credit facility is payable monthly and accrues at an index rate using the one-month LIBOR rate plus an applicable margin of 1.75%. Assuming full utilization of the revolving credit facility, a hypothetical 100 basis point change in interest rates applicable to the revolver would result in an approximate $0.6 million change in annual pre-tax income.

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Item 4. Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2015.

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are party to a variety of legal proceedings arising in the normal course of business. While the results of these proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes in the risks facing the Company as described in the Company’s Form 10-K for the year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s current credit facility prohibits the payment of any cash dividends on the Company’s capital stock.

The following table sets forth information regarding the purchases of the Company’s equity securities made by or on behalf of the Company or any affiliated purchaser (as defined in Exchange Act Rule 10b-18) during the three-month period ended September 30, 2015:

2015	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
					(millions of dollars)
July 1 - July 31	500,000	3.92		500,000	—
Aug 1 - Aug 31	713,130	4.14		713,130	—
Sept 1 - Sept 30	529,928	3.85		522,147	—
	1,743,058	$	3.99	1,735,277	$	—

(a) Shares purchased during the quarter include shares surrendered by employees to satisfy tax withholding obligations upon vesting of restricted stock and shares from the Company's stock repurchase program.

(b) On February 21, 2014, our Board of Directors authorized a stock repurchase program under which we may repurchase up to $10.0 million of our common stock from time to time through March 31, 2015. On March 25, 2014, our Board of Directors authorized a $10.0 million increase to the stock repurchase program, bringing the total amount of its common stock that the Company may repurchase under the program to $20.0 million. On October 24, 2014, our Board of Directors authorized a $20.0 million increase to the stock repurchase program, increasing the total share repurchase program to $40.0 million, and extended the duration of the program to December 31, 2015. From the February 2014 announcement through September 30, 2015, the Company repurchased a total of 7,517,179 shares under this program for an aggregate purchase price of approximately $40.0 million. During October 2015, the Company’s Board of Directors approved a $10 million increase in the program and extended the duration of the program to December 31, 2016. The timing and amount of repurchases, if any, will depend upon the Company’s stock price, economic and market conditions, regulatory requirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase program at any time.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number	Description
3.1	Restated Articles of Incorporation of the Registrant, as amended and corrected through August 11, 2006 (restated solely for the purpose of filing with the Commission) (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on August 17, 2006).
3.1.1	Articles of Amendment of the Registrant effective January 20, 2010 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on January 25, 2010).
3.2	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on December 11, 2007).
4.1	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-K for the year ended December 31, 2001).
4.2	See Restated Articles of Incorporation and Bylaws of the Registrant, filed as Exhibits 3.1 and 3.2, respectively.
10.1	Separation Agreement between the Registrant and Catherine Lee dated September 25, 2015
31.1	Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the quarter ended September 30, 2015.
31.2	Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the quarter ended September 30, 2015.
32.1	Certification of the Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for the quarter ended September 30, 2015.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PRGX GLOBAL, INC.
November 6, 2015	By:	/s/ Ronald E. Stewart
		Ronald E. Stewart
		President, Chief Executive Officer, Director (Principal Executive Officer)
November 6, 2015	By:	/s/ Peter Limeri
		Peter Limeri
		Chief Financial Officer and Treasurer (Principal Financial Officer)

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EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (this “Agreement”) is made and entered into this 25th day of September, 2015, by and between CATHERINE LEE (“Executive”) and PRGX GLOBAL, INC., a Georgia corporation (“Company”). Executive and Company are sometimes hereinafter referred to together as the “Parties” and individually as a “Party.”

BACKGROUND:

A.    Executive is employed as the Senior Vice President – Human Resources of Company pursuant to an employment agreement between Executive and Company effective as of January 19, 2015 (“Employment Agreement”).

B.    Executive and Company now mutually desire to (i) provide for the end of Executive’s employment and (ii) terminate the Employment Agreement effective as of the date hereof.

C.     Company and Executive wish to avoid any disputes which could arise under the Employment Agreement and have therefore compromised any claims or rights they have or may have under the Employment Agreement by agreeing to the terms of this Agreement.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual promises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Termination of Employment. The Parties agree that (a) the Employment Agreement is hereby terminated as of the date hereof, (b) the initial presentation of this Agreement to Executive on August 25, 2015 constituted written notice of termination of Executive’s employment as set forth in Section 7(d) of her Employment Agreement, (c) Executive’s employment with Company shall terminate effective September 30, 2015 (the “Termination Date”) (although Company reserves the right to elect to pay Executive her base salary and Company’s contribution to the cost of Executive’s welfare benefits through the Termination Date, in accordance with the established payroll practices of Company, but no less frequently than monthly, and remove her from active service), and (c) all benefits, privileges and authorities related to Executive’s employment with Company shall hereby cease, except as otherwise specifically set forth in this Agreement.

2.No Admission. The Parties agree that their entry into this Agreement is not and shall not be construed to be an admission of liability or wrongdoing on the part of either Party.

3.Future Cooperation. Executive agrees that, notwithstanding the termination of Executive’s employment, Executive upon reasonable notice will make herself available to Company or its designated representatives for the purposes of: (a) providing information regarding the projects and files on which Executive worked for the purpose of transitioning such projects; and (b) providing

information regarding any other matter, file, project and/or client with whom Executive was involved while employed by Company.

4.Consideration.

(a)    In consideration for Executive’s agreement to terminate the Employment Agreement, to fully release Company from any and all Claims as described below, and to perform the other duties and obligations of Executive contained herein, Company will, subject to ordinary and lawful deductions and Sections 4(b) and (c) below:

(i)    Pay severance to Executive in the form of salary continuation for the twelve (12) months immediately following the Termination Date (“Severance Period”). Such payments shall be made in accordance with Company’s standard pay practices in an amount equal to nine thousand two hundred thirty and 77/100dollars ($9,230.77) per bi-weekly pay period during the Severance Period.

(ii)    Continue after the Termination Date any health care (medical, dental and vision) plan coverage, other than under a flexible spending account, provided to Executive and Executive’s spouse and dependents at the Termination Date for the Severance Period, on a monthly or more frequent basis, on the same basis and at the same cost to Executive as available to similarly-situated active employees during such Severance Period, provided that such continued coverage shall terminate in the event Executive becomes eligible for any such coverage under another employer’s plans.

(iii)    Pay an amount equal to three-fourths (3/4) of Executive’s actual earned full-year bonus for 2015, payable at the time Executive’s annual bonus for such year otherwise would have been paid had Executive continued employment. Payment of such pro-rated 2015 bonus hereunder, if any, will be dependent upon Company’s achievement of certain revenue and adjusted EBITDA performance goals established by the Compensation Committee for 2015 in the same manner as are applicable to similarly-situated executives of Company who participate in the annual bonus plan for 2015.

(iv)    Vest, effective as of the date upon which the revocation period for the Release described in Section 4(b) below expires without Executive having elected to revoke the Release, (A) 5,555 of Executive’s outstanding unvested options, with an exercise price of $5.30 per share, that were granted as of January 19, 2015, (B) 1,111 shares of Executive’s outstanding unvested restricted stock that were granted as of January 19, 2015, and (C) a prorated number of Executive’s outstanding unvested restricted stock units that were granted as of March 30, 2105 equal to the number of such restricted stock units multiplied by a fraction, the numerator of which is 273, and the denominator of which is (x) the number of days in the two-year period beginning with calendar year 2015 and ending with calendar year 2016 (the “Cumulative Performance Period”) if no Change in Control (as defined in the restricted stock units award agreement) occurs prior to the end of the Cumulative Performance Period or (y) the number of days in the Cumulative Performance Period until the Change in Control occurs if a Change in Control occurs prior to the end of

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the Cumulative Performance Period. Such prorated number of Executive’s restricted stock units shall remain outstanding and be eligible to become payable in accordance with the terms of such restricted stock units, except Executive shall not be entitled to receive any dividend equivalents with respect to such prorated number of Executive’s restricted stock units after the date Executive’s employment with the Company terminates. Additionally, all of Executive’s outstanding vested stock options shall remain outstanding until the earlier of (i) one year after the Termination Date or (ii) the original expiration date of the options (disregarding any earlier expiration date provided for in any other agreement, including without limitation any related grant agreement, based solely on the termination of Executive’s employment). All of Executive’s outstanding stock options, restricted stock and restricted stock units that are not otherwise vested as set forth herein shall expire and be forfeited as of the Termination Date without any payment therefor.

(v)    Payment of one year of outplacement services from Executrak or an outplacement service provider of Executive’s choice, limited to $20,000 in total. This outplacement services benefit will be forfeited if Executive does not begin using such services within 60 days after the Termination Date.

(b)    Notwithstanding anything else contained herein to the contrary, no payments shall be made or benefits delivered under this Agreement (other than the payments required to be made by Company pursuant to Section 5 below) unless, within thirty (30) days after the Termination Date: (i) Executive has signed and delivered to Company a Release in the form attached hereto as Exhibit A (the “Release”); and (ii) the applicable revocation period under the Release has expired without Executive having elected to revoke the Release. Executive agrees and acknowledges that Executive would not be entitled to such consideration absent execution of the Release and expiration of the applicable revocation period without Executive having revoked the Release. Any payments to be made, or benefits to be delivered, under this Agreement (other than the payments required to be made by Company pursuant to Section 5 below and the vesting of outstanding unvested options, restricted stock and restricted stock unitsas set forth in Section 4(a)(iv) above) within the thirty (30) days after the Termination Date shall be accumulated and paid in a lump sum, or as to benefits continued at Executive’s expense subject to reimbursement, with such reimbursement to be made, on the first bi-weekly pay period occurring more than thirty (30) days after the Termination Date, provided Executive delivers the signed Release to Company and the revocation period thereunder expires without Executive having elected to revoke the Release.

(c)    As a further condition to receipt of the payments and benefits in Section 4(a) above, Executive also waives any and all rights to any other amounts payable to her upon the termination of her employment relationship with Company, other than those specifically set forth in this Agreement, including without limitation any severance, notice rights, payments, benefits and other amounts to which Executive may be entitled under the laws of any jurisdiction and/or her Employment Agreement, and Executive agrees not to pursue or claim any of such payments, benefits or rights.

(d)    The payments and benefits set forth in Section 4(a)(i) – (iv) above shall continue as set forth above notwithstanding Executive’s death.

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5.Other Benefits. Nothing in this Agreement or the Release shall:

(a)    alter or reduce any vested, accrued benefits (if any) Executive may be entitled to receive under any 401(k) plan established by Company;

(b)    affect Executive’s right (if any) to elect and (subject to Section 4(a)(ii) above) pay for continuation of Executive’s health insurance coverage under Company’s health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (C.O.B.R.A.), as amended;

(c)    affect Executive’s right (if any) to receive (i) any base salary that has accrued through the Termination Date and is unpaid, (ii) any reimbursable expenses that Executive has incurred before the Termination Date but are unpaid (subject to Company’s expense reimbursement policy) and (iii) any unused paid time off days to which Executive will be entitled to payment, all of which shall be paid as soon as administratively practicable (and in any event within thirty (30) days) after the Termination Date; or

(d)    affect Executive’s right to continue to receive her base salary and benefits through the Termination Date, as in effect as of the date hereof, which base salary and benefits will continue through the Termination Date, except with respect to any changes in benefits that are applicable generally to the other executives of Company.

6.Confidentiality of Agreement Terms. Except as otherwise expressly provided in this Section 6, Executive agrees that this Agreement and the terms, conditions and amount of consideration set forth in this Agreement are and shall be deemed to be confidential and hereafter shall not be disclosed by Executive to any other person or entity. The only disclosures excepted by this paragraph are (a) as may be required by law; (b) Executive may tell prospective employers the dates of Executive’s employment, positions held, evaluations received, Executive’s duties and responsibilities and salary history with Company; (c) Executive may disclose the terms and conditions of this Agreement to Executive’s attorneys and tax advisers; and (d) Executive may disclose the terms of this Agreement to Executive’s spouse, if any; provided, however, that any spouse, attorney or tax adviser learning about the terms of this Agreement must be informed about this confidentiality provision, and Executive will be responsible for any breaches of this confidentiality provision by her spouse, attorneys or tax advisers to the same extent as if Executive had directly breached this Agreement.

7.Restrictive Covenants.

(a)    Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings:

(i)    “Business of Company” means services to (A) identify clients’ erroneous or improper payments to vendors and assist clients in the recovery of monies owed to clients as a result of overpayments and overlooked discounts, rebates, allowances

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and credits, (B) identify and assist clients in recovering amounts owed to them by other third parties, including amounts owed to clients due to non-compliance with applicable contracts, course of dealing or usual and customary terms, (C) assist clients in efforts to organize, manage and analyze their purchasing and payment data, and (D) assist clients in analyzing and managing vendor-related risks.

(ii)    “Confidential Information” means any information about Company or its subsidiaries and their employees, customers and/or suppliers which is not generally known outside of Company, which Executive learned in connection with Executive’s employment with Company, and which would be useful to competitors or the disclosure of which would be damaging to Company or any subsidiary of Company. Confidential Information includes, but is not limited to: (A) business and employment policies, marketing methods and the targets of those methods, finances, business plans, promotional materials and price lists; (B) the terms upon which Company or any subsidiary of Company obtains products from its suppliers and sells services and products to customers; (C) the nature, origin, composition and development of Company’s or any subsidiary’s services and products; and (D) the manner in which Company or any subsidiary of Company provides products and services to its customers.

(iii)    “Material Contact” means contact in person, by telephone, or by paper or electronic correspondence in furtherance of the Business of Company.

(iv)    “Restricted Territory” means, and is limited to, the geographic area included in the Atlanta-Sandy Springs-Marietta, Georgia metropolitan statistical area. Executive acknowledges and agrees that this is a portion of the area in which Company and its subsidiaries does business at the time of the execution of this Agreement, and in which Executive had responsibility on behalf of Company.

(v)    “Trade Secrets” means Confidential Information of Company and its subsidiaries which meets the definition of a trade secret under applicable law.

(b)    Confidentiality. Executive agrees that Executive will not, directly or indirectly, use, copy, disclose, distribute or otherwise make use of on her own behalf or on behalf of any other person or entity (i) any Confidential Information for a period of five (5) years after the Termination Date or (ii) any Trade Secret at any time such information constitutes a trade secret under applicable law.

(c)    Non-Competition. Executive agrees that for a period of two (2) years following the Termination Date, Executive will not, either for herself or on behalf of any other person or entity, compete with the Business of Company within the Restricted Territory by performing activities which are the same as or similar to those performed by Executive for Company or Company’s subsidiaries.

(d)    Non-Solicitation of Customers. Executive agrees that for a period of two (2) yearsfollowing the Termination Date, Executive shall not, directly or indirectly, solicit any

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actual or prospective customers of Company or any subsidiary with whom Executive had Material Contact, for the purpose of selling any products or services which compete with the Business of Company.

(e)    Non-Recruitment of Employees or Contractors. Executive agrees that for a period of two (2) years following the Termination Date, Executive will not, directly or indirectly, solicit or attempt to solicit any employee or contractor of Company or any subsidiary with whom Executive had Material Contact, to terminate or lessen such employment or contract.

(f)    Acknowledgments. Executive hereby acknowledges and agrees that the covenants contained in (b) through (e) of this Section 7 hereof are reasonable as to time, scope and territory given Company’s and Company’s subsidiaries’ need to protect their business, customer relationships, personnel, Trade Secrets and Confidential Information. For purposes of the covenants contained in (b) through (e) of this Section 7, Company shall refer also to Company’s subsidiaries as applicable. In the event any covenant or other provision in this Agreement shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it shall be interpreted to extend only over the maximum period of time for which it may be enforceable and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action, and the invalidity of any one or more of the covenants or other provisions in this Agreement shall not cause or render any other covenants or provisions in this Agreement invalid or voidable. Executive acknowledges and represents that Executive has substantial experience and knowledge such that Executive can readily obtain subsequent employment which does not violate this Agreement.

(g)    Specific Performance. Executive acknowledges and agrees that any breach of the provisions of this Section 7 by her will cause irreparable damage to Company or Company’s subsidiaries, the exact amount of which will be difficult to determine, and that the remedies at law for any such breach will be inadequate. Accordingly, Executive agrees that, in addition to any other remedy that may be available at law, in equity, or hereunder, Company shall be entitled to specific performance and injunctive relief, without posting bond or other security, to enforce or prevent any violation of any of the provisions of this Section 7 by Executive. Additionally, notwithstanding the obligations within Section 11 of this Agreement regarding the exclusive jurisdiction of the United States District Court for the Northern District of Georgia and the State and Superior Courts of Cobb County, Georgia pertaining to actions arising out of this Agreement, and in addition to Company’s right to seek injunctive relief in any state or federal court located in Cobb County, Georgia, the Parties hereby acknowledge and agree that Company may seek specific performance and injunctive relief in any jurisdiction, court or forum applicable to Executive’s then current residency in order to prevent or to restrain any breach by Executive, or any and all of Executive’s partners, co-venturers, employers, employees, or agents, acting directly or indirectly on behalf of or with Executive, of any of the provisions of the restrictive covenants contained in this Section 7.

8.Return of all Property and Information of Company. Executive agrees to return all property of Company and its subsidiaries within seven (7) days following the execution of this

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Agreement. Such property includes, but is not limited to, the original and any copy (regardless of the manner in which it is recorded) of all information provided by Company or any subsidiary thereof to Executive or which Executive has developed or collected in the scope of Executive’s employment related to Company and its subsidiaries or affiliates as well as all Company or subsidiary-issued equipment, supplies, accessories, vehicles, keys, instruments, tools, devices, computers, cell phones, pagers, materials, documents, plans, records, notebooks, drawings, or papers. Upon request by Company, Executive shall certify in writing that Executive has complied with this provision, and has deleted all information of Company and its subsidiaries from any computers or other electronic storage devices owned by Executive. Executive may only retain information relating to Executive’s benefit plans and compensation to the extent needed to prepare Executive’s tax returns.

9.No Harassing or Disparaging Conduct. Executive further agrees and promises that Executive will not engage in, or induce other persons or entities to engage in, any harassing or disparaging conduct or negative or derogatory statements directed at or about Company or its subsidiaries or affiliates, the activities of Company or its subsidiaries or affiliates, or the Releasees at any time in the future. Notwithstanding the foregoing, this Section 9 may not be used to penalize Executive for providing truthful testimony under oath in a judicial or administrative proceeding or complying with an order of a court or government agency of competent jurisdiction.

10.References. Following the Termination Date, Executive agrees to direct any third party seeking an employment reference to Company’s Chief Executive Officer and Company agrees to give any potential employers who inquire about Executive’s work history at Company a neutral reference consisting of Employee’s dates of employment, title and compensation. Company will not be responsible with respect to any references which are directed by Executive to anyone other than Company’s Chief Executive Officer.

11.Construction of Agreement and Venue for Disputes. This Agreement shall be deemed to have been jointly drafted by the Parties and shall not be construed against either Party. This Agreement shall be governed by the law of the State of Georgia, and the Parties agree that any actions arising out of or relating to this Agreement or Executive’s employment with Company must be brought exclusively in either the United States District Court for the Northern District of Georgia, or the State or Superior Courts of Cobb County, Georgia. Notwithstanding the pendency of any proceeding, either Party shall be entitled to injunctive relief in a state or federal court located in Cobb County, Georgia upon a showing of irreparable injury. The Parties consent to personal jurisdiction and venue solely within these forums and solely in Cobb County, Georgia and waive all otherwise possible objections thereto. The prevailing Party shall be entitled to recover its costs and attorneys fees from the non-prevailing Party in any such proceeding no later than 90 days following the settlement or final resolution of any such proceeding. The existence of any claim or cause of action by Executive against Company or Company’s subsidiaries or affiliates, including any dispute relating to the termination of Executive’s employment or under this Agreement, shall not constitute a defense to enforcement of said covenants by injunction.

12.Severability. If any provision of this Agreement shall be held void, voidable, invalid or inoperative, no other provision of this Agreement shall be affected as a result thereof, and

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accordingly, the remaining provisions of this Agreement shall remain in full force and effect as though such void, voidable, invalid or inoperative provision had not been contained herein.

13.No Reliance Upon Other Statements. This Agreement is entered into without reliance upon any statement or representation of any Party hereto or any Party hereby released other than the statements and representations contained in writing in this Agreement (including all Exhibits hereto).

14.Entire Agreement. This Agreement, including all Exhibits hereto (which are incorporated herein by this reference), contains the entire agreement and understanding concerning the subject matter hereof between the Parties hereto. No waiver, termination or discharge of this Agreement, or any of the terms or provisions hereof, shall be binding upon either Party hereto unless confirmed in writing. This Agreement may not be modified or amended, except by a writing executed by both Parties hereto. No waiver by either Party hereto of any term or provision of this Agreement or of any default hereunder shall affect such Party’s rights thereafter to enforce such term or provision or to exercise any right or remedy in the event of any other default, whether or not similar.

15.Further Assurance. Upon the reasonable request of the other Party, each Party hereto agrees to take any and all actions, including, without limitation, the execution of certificates, documents or instruments, necessary or appropriate to give effect to the terms and conditions set forth in this Agreement.

16.No Assignment. Neither Party may assign this Agreement, in whole or in part, without the prior written consent of the other Party, and any attempted assignment not in accordance herewith shall be null and void and of no force or effect.

17.Binding Effect. This Agreement shall be binding on and inure to the benefit of the Parties and their respective heirs, representatives, successors and permitted assigns.

18.Indemnification. Company understands and agrees that any indemnification obligations under its governing documents or the indemnification agreement between Company and Executive with respect to Executive’s service as an officer of Company remain in effect and survive the termination of Executive’s employment under this Agreement as set forth in such governing documents or indemnification agreement.

19.Nonqualified Deferred Compensation.

(a)    It is intended that any payment or benefit which is provided pursuant to or in connection with this Agreement which is considered to be deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Section 409A of the Code to avoid the unfavorable tax consequences provided therein for non-compliance.

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(b)    Neither Company nor Executive shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in any manner which would not be in compliance with Section 409A of the Code (including any transition or grandfather rules thereunder).

(c)    For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code.

(d)    Notwithstanding any other provision of this Agreement, neither Company nor its subsidiaries or affiliates shall be liable to Executive if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Section 409A of the Code otherwise fails to comply with, or be exempt from, the requirements of Section 409A of the Code.

[signature page to follow]

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IN WITNESS WHEREOF, the Parties have executed, or caused their duly authorized representatives to execute, this Agreement as of the day and year first above written.

“Executive”

/s/ Catherine Lee                

Catherine Lee

“Company”

PRGX GLOBAL, INC.

By:    /s/ Victor A. Allums            

Title:    SVP & General Counsel        

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EXHIBIT A

Form of Release

RELEASE

In consideration for the undertakings and promises set forth in that certain Separation Agreement, dated as of September ___, 2015 (the “Agreement”), between CATHERINE LEE (“Executive”) and PRGX GLOBAL, INC. (“Company”), Executive (on behalf of herself and her heirs, assigns and successors in interest) unconditionally releases, discharges, and holds harmless Company and its subsidiaries and affiliates and their respective officers, directors, employees, agents, insurers, assigns and successors in interest (collectively, “Releasees”) from each and every claim, cause of action, right, liability or demand of any kind and nature, and from any claims which may be derived therefrom (collectively “Released Claims”), that Executive had, has, or might claim to have against Releasees at the time Executive executes this Agreement, whether presently known or unknown to Executive, including, without limitation, any and all claims listed below, other than any such claims Executive has or might have under the Agreement:

(a)    arising from Executive’s employment, pay, bonuses, vacation or any other Executive benefits, and other terms and conditions of employment or employment practices of Company;

(b)    arising out of or relating to the termination of Executive’s employment with Company or the surrounding circumstances thereof;

(c)    based on discrimination and/or harassment on the basis of race, color, religion, sex, national origin, handicap, disability, age or any other category protected by law under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, Executive Order 11246, the Age Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Equal Pay Act, the Americans With Disabilities Act, the Rehabilitation Act of 1973, C.O.B.R.A. (as any of these laws may have been amended) or any other similar labor, employment or anti-discrimination law under state, federal or local law;

(d)    based on any contract, tort, whistleblower, personal injury wrongful discharge theory or other common law theory; or

(e)    arising under the Employment Agreement or any other written or oral agreements between Executive and Company or any of Company’s subsidiaries (other than the Agreement).

Executive covenants not to sue or initiate any claims against any of the Releasees on account of any Released Claim or to incite, assist or encourage other persons or entities to bring claims of any nature whatsoever against Company or Releasees. Executive further covenants not to accept, recover or receive any monetary damages or any other form of relief which may arise out of or in

connection with any administrative remedies which may be filed with or pursued independently by any governmental agency or agencies, whether federal, state or local.

Executive hereby acknowledges that Executive has no interest in reinstatement, reemployment or employment with Company, and Executive forever waives any interest in or claim of right to any future employment by Company. Executive further covenants not to apply for future employment with Company or otherwise seek or encourage reinstatement.

By signing this Release, Executive certifies that:

(a)    Executive has carefully read and fully understands the provisions of this Release;

(b)    Executive was advised by Company in writing, via this Release, to consult with an attorney before signing this Release;

(c)    Executive understands that any discussions she may have had with counsel for Company regarding his employment or this Release does not constitute legal advice to her and that she has retained her own independent counsel to render such advice;

(d)    Executive understands that this Agreement FOREVER RELEASES Company and all other Releasees from any legal action arising prior to the date of execution of this Agreement;

(e)    In signing this Agreement, Executive DOES NOT RELY ON AND HAS NOT RELIED ON ANY REPRESENTATION OR STATEMENT (WRITTEN OR ORAL) NOT SPECIFICALLY SET FORTH IN THIS RELEASE OR THE AGREEMENT by Company or any other Releasee, or by any of their agents, representatives, or attorneys with regard to the subject matter, basis, or effect of this Agreement or otherwise;

(f)    Company hereby allows Executive no less than twenty-one (21) days from its initial presentation to Executive to consider this Release before signing it, should Executive so desire; and

(g)    Executive agrees to its terms knowingly, voluntarily and without intimidation, coercion or pressure.

Executive may revoke this Release within seven (7) calendar days after signing it. To be effective, such revocation must be received in writing by the General Counsel of Company at the offices of Company at 600 Galleria Parkway, Suite 100, Atlanta, Georgia 30339. Revocation can be made by hand delivery or facsimile before the expiration of this seven (7) day period.

[signature page to follow]

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IN WITNESS WHEREOF, the undersigned has executed this Release as of the date set forth below.

“Executive”

Catherine Lee        

Dated: ______________ ___, 2015

26533813v7

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Ronald E. Stewart, certify that:

1. I have reviewed this Form 10-Q of PRGX Global, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 6, 2015	By:	/s/ Ronald E. Stewart
		Ronald E. Stewart
		President, Chief Executive Officer, Director (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Peter Limeri, certify that:

1. I have reviewed this Form 10-Q of PRGX Global, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 6, 2015	By:	/s/ Peter Limeri
		Peter Limeri
		Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PRGX Global, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald E. Stewart, President and Chief Executive Officer of the Company and I, Peter Limeri, Chief Financial Officer and Treasurer, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of the undersigned’s knowledge: (1) the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 6, 2015	By:	/s/ Ronald E. Stewart
		Ronald E. Stewart
		President, Chief Executive Officer, Director (Principal Executive Officer)
November 6, 2015	By:	/s/ Peter Limeri
		Peter Limeri
		Chief Financial Officer and Treasurer (Principal Financial Officer)

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Stock-Based Compensation (Nonvested Stock Awards) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2015 shares	Mar. 31, 2015 executive_officer employee shares	Sep. 30, 2015 employee $ / shares shares	Sep. 30, 2014 $ / shares shares
Director group [Member]
Summary of nonvested stock awards granted
Vesting Period			1 year
Employee [Member]
Summary of nonvested stock awards granted
Vesting Period			3 years
Employee inducement [Member]
Summary of nonvested stock awards granted
Vesting Period				3 years
Weighted Average Grant Date Fair Value (usd per share)				$ 1.71
2008 Equity Incentive Plan [Member] | Director, Group 2 [Member]
Summary of nonvested stock awards granted
Vesting Period			3 years
Weighted Average Grant Date Fair Value (usd per share)			$ 1.33
2008 Equity Incentive Plan [Member] | Employee [Member]
Summary of nonvested stock awards granted
Vesting Period				3 years
Weighted Average Grant Date Fair Value (usd per share)				$ 1.81
Number of employees, granted stock awards | employee			3
2008 Equity Incentive Plan [Member] | Employee inducement [Member]
Summary of nonvested stock awards granted
Vesting Period			3 years
Weighted Average Grant Date Fair Value (usd per share)			$ 1.42
2008 Equity Incentive Plan [Member] | Restricted Stock and Restricted Stock Units [Member] | Director group [Member]
Summary of nonvested stock awards granted
No. of Shares Granted (shares) | shares			4,273	51,276
Weighted Average Grant Date Fair Value (usd per share)			$ 4.02	$ 6.45
2008 Equity Incentive Plan [Member] | Restricted Stock and Restricted Stock Units [Member] | Director group [Member] | Maximum [Member]
Summary of nonvested stock awards granted
Vesting Period			1 year	1 year
2008 Equity Incentive Plan [Member] | Restricted Stock and Restricted Stock Units [Member] | Director, Group 2 [Member]
Summary of nonvested stock awards granted
No. of Shares Granted (shares) | shares			17,092
Vesting Period			3 years
Weighted Average Grant Date Fair Value (usd per share)			$ 3.99
2008 Equity Incentive Plan [Member] | Restricted Stock and Restricted Stock Units [Member] | Employee [Member]
Summary of nonvested stock awards granted
No. of Shares Granted (shares) | shares		1,325,000	2,533,333	120,000
Vesting Period			2 years	3 years
Weighted Average Grant Date Fair Value (usd per share)			$ 3.99	$ 6.36
Number of executive officers, granted stock awards | executive_officer		8
Issued units to key employees | shares	1,208,333
2008 Equity Incentive Plan [Member] | Restricted Stock and Restricted Stock Units [Member] | Employee inducement [Member]
Summary of nonvested stock awards granted
No. of Shares Granted (shares) | shares			10,000	70,000
Vesting Period			3 years	3 years
Weighted Average Grant Date Fair Value (usd per share)			$ 5.29	$ 6.04
Number of employees, granted stock awards | employee		2

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company currently has two stock-based compensation plans: (1) the 2006 Management Incentive Plan (“2006 MIP”) and (2) the 2008 Equity Incentive Plan (“2008 EIP”) (collectively, the “Plans”). We describe the Plans in the Company’s Annual Report on Form 10–K for the fiscal year ended December 31, 2014. For all periods presented herein, awards outside the Plans are referred to as inducement awards.

2008 EIP Awards and Inducement Awards

Stock options granted under the 2008 EIP generally have a term of seven years and vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. The following table summarizes stock option grants during the nine months ended September 30, 2015 and 2014:

Grantee Type	# of Options Granted	Vesting Period	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
2015
Director	249,273	1 year or less	$	4.49	$	2.44
Director	17,092	3 years	$	3.99	$	1.33
Employee inducements (1)	135,000	3 years	$	5.51	$	1.42
2014
Director	51,276	1 year or less	$	6.45	$	1.89
Employee group (2)	1,480,000	3 years	$	6.99	$	1.81
Employee inducements (3)	270,000	3 years	$	6.64	$	1.71

(1) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the first nine months of 2015 to three employees in connection with the employees joining the Company.

(2) The exercise price for these options is $6.36 for the options that vested on June 27, 2015, $6.99 for the options that vest on June 27, 2016 and $7.63 for the options that vest on June 27, 2017.

(3) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the third quarter of 2014 to two executive officers in connection with the employees joining the Company. The weighted average exercise price for these options is calculated based on an exercise price of $6.04 for the options that vested on September 11, 2015, $6.64 for the options that vest on September 11, 2016 and $7.24 for the options that vest on September 11, 2017.

Nonvested stock awards, including both restricted stock and restricted stock units, granted under the 2008 EIP generally are nontransferable until vesting and the holders are entitled to receive dividends with respect to the nonvested shares. Prior to vesting, the grantees of restricted stock are entitled to vote the shares, but the grantees of restricted stock units are not entitled to vote the shares. Generally, nonvested stock awards with time-based vesting criteria vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. Nonvested stock awards with performance-based vesting criteria vest in accordance with specific performance criteria associated with the awards.

The following table summarizes nonvested stock awards granted during the nine months ended September 30, 2015 and 2014:

Grantee Type	# of Shares Granted	Vesting Period	Weighted Average Grant Date Fair Value
2015
Director	4,273	1 year or less	$	4.02
Director	17,092	3 years	$	3.99
Employee group (1)	2,533,333	2 years	$	3.99
Employee inducements (2)	10,000	3 years	$	5.29
2014
Director group	51,276	1 year or less	$	6.45
Employee group	120,000	3 years	$	6.36
Employee inducements (3)	70,000	3 years	$	6.04

(1) The Company granted nonvested performance-based stock awards (restricted stock units) in the first quarter of 2015 to eight executive officers totaling 1,325,000 units. During the third quarter of 2015, the Company issued 1,208,333 units to key employees.

(2) The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the first quarter of 2015 to two employees in connection with the employees joining the Company.

(3) The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the third quarter of 2014 to two executive officers in connection with the employees joining the Company.

2006 MIP Performance Units

On June 19, 2012, seven executive officers of the Company were granted 154,264 Performance Units under the 2006 MIP, comprising all of the then remaining available awards under the 2006 MIP. The awards had an aggregate grant date fair value of $1.2 million and vest ratably over three years. Upon vesting, the Performance Units were settled by the issuance of Company common stock equal to 60% of the number of Performance Units being settled and the payment of cash in an amount equal to 40% of the fair market value of that number of shares of common stock equal to the number of Performance Units being settled. During the nine months endedSeptember 30, 2015, an aggregate of 16,530 Performance Units were settled, which resulted in the issuance of 9,918 shares of common stock and cash payments of less than $0.1 million. There were no shares issued during the third quarter of 2015 in settlement of Performance Units and 16,526 shares issued during the third quarter of 2014 in settlement of Performance Units. Since the June 19, 2012 grant date to September 30, 2015, an aggregate of 137,740 Performance Units were settled by two current executive officers and four former executive officers, and 16,524 Performance Units were forfeited by one former executive officer and currently are available to be granted. Such settlements resulted in the issuance of 79,356 shares of common stock and cash payments totaling $0.3 million. As of September 30, 2015, no Performance Units were outstanding.

Performance-Based Restricted Stock Units

On March 30, 2015, eight executive officers of the Company were granted 1,325,000 performance-based restricted stock units (“PBUs”) under the 2008 EIP. Upon vesting, the PBUs will be settled by the issuance of Company common stock equal to 50% of the number of PBUs being settled and the payment of cash in an amount equal to 50% of the fair market value of that number of shares of common stock equal to the number of PBUs being settled. The PBUs vest and become payable based on the cumulative adjusted EBITDA that the Company (excluding the Healthcare Claims Recovery Audit business) achieves for the two-year performance period ending December 31, 2016. At the threshold performance level, 35% of the PBUs will become vested and payable; at the target performance level, 100% of the PBUs will become vested and payable; and at the maximum performance level, 200% of the PBUs will become vested and payable. If performance falls between the stated performance levels, the percentage of PBUs that shall become vested and payable will be based on straight line interpolation between such stated performance levels (although the PBUs may not become vested and payable for more than 200% of the PBUs and no PBUs shall become vested and payable if performance does not equal or exceed the threshold performance level).

On September 28, 2015, certain employees of the Company were granted 1,208,333 PBUs under the 2008 EIP. Upon vesting, the PBUs will be settled by the issuance of Company common stock equal to 25% of the number of PBUs being settled and the payment of cash in an amount equal to 75% of the fair market value of that number of shares of common stock equal to the number of PBUs being settled. The PBUs vest and become payable based on the cumulative adjusted EBITDA that the Company (excluding the Healthcare Claims Recovery Audit business) achieves for the two-year performance period ending December 31, 2016. At the threshold performance level, 35% of the PBUs will become vested and payable and at the target performance level, 100% of the PBUs will become vested and payable. If performance falls between the stated performance levels, the percentage of PBUs that shall become vested and payable will be based on straight line interpolation between such stated performance levels (although the PBUs may not become vested and payable for more than 100% of the PBUs and no PBUs shall become vested and payable if performance does not equal or exceed the threshold performance level).

Selling, general and administrative expenses for the three months ended September 30, 2015 and 2014 include $1.4 million related to stock-based compensation charges. Selling, general and administrative expenses for the nine months ended September 30, 2015 and 2014 include $4.5 million and $3.4 million, respectively, related to stock-based compensation charges. At September 30, 2015, there was $11.2 million of unrecognized stock-based compensation expense related to stock options, restricted stock awards and restricted stock unit awards, which we expect to recognize over a weighted-average period of 1.17 years. The unrecognized stock-based compensation expense related to restricted stock unit awards with performance vesting criteria is based on our estimate of both the number of shares of the Company's common stock that will ultimately be issued and cash payments that will be made when the restricted stock units are settled.

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Cash and Cash Equivalents (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Line of Credit Facility [Line Items]
Cash and cash equivalents included short-term investments	$ 3.7	$ 12.2
Foreign Banks [Member]
Line of Credit Facility [Line Items]
Cash and cash equivalents included short-term investments	$ 2.4	$ 2.5

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Operating Segments and Related Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Revenue	$ 33,923	$ 42,988	$ 104,344	$ 122,870
Net loss	(3,409)	(239)	(5,270)	(5,381)
Income tax expense	421	554	1,172	853
Interest income, net	(8)	(44)	(103)	(33)
EBIT	(2,996)	271	(4,201)	(4,561)
Depreciation of property and equipment	1,262	1,428	3,858	4,696
Amortization of intangible assets	517	895	2,017	2,700
EBITDA	(1,217)	2,594	1,674	2,835
Foreign currency transaction (gains) losses on short-term intercompany balances	654	1,221	1,930	1,073
Acquisition-related charges				249
Transformation severance and related expenses	845	413	1,554	2,352
Loss on sale/disposal of assets	1,612		1,612
Stock-based compensation	1,381	1,405	4,530	3,409
Adjusted EBITDA	3,275	5,633	11,300	9,918
Recovery Audit Services - Americas [Member]
Segment Reporting Information [Line Items]
Revenue	23,981	28,550	71,748	80,377
EBIT	5,255	7,155	15,838	16,632
Depreciation of property and equipment	947	1,111	2,895	3,612
Amortization of intangible assets	437	500	1,319	1,501
EBITDA	6,639	8,766	20,052	21,745
Foreign currency transaction (gains) losses on short-term intercompany balances	393	208	651	164
Acquisition-related charges				0
Transformation severance and related expenses	101	44	265	510
Adjusted EBITDA	7,133	9,018	20,968	22,419
Recovery Audit Services - Europe/Asia-Pacific [Member]
Segment Reporting Information [Line Items]
Revenue	8,052	10,708	27,307	32,792
EBIT	365	(151)	1,719	1,309
Depreciation of property and equipment	148	150	454	445
Amortization of intangible assets	47	299	600	911
EBITDA	560	298	2,773	2,665
Foreign currency transaction (gains) losses on short-term intercompany balances	287	1,192	1,359	1,079
Acquisition-related charges				0
Transformation severance and related expenses	0	7	268	569
Adjusted EBITDA	847	1,497	4,400	4,313
Adjacent Services [Member]
Segment Reporting Information [Line Items]
Revenue	1,332	3,586	4,290	8,150
EBIT	(2,373)	(265)	(5,019)	(3,607)
Depreciation of property and equipment	160	145	479	463
Amortization of intangible assets	33	96	98	288
EBITDA	(2,180)	(24)	(4,442)	(2,856)
Foreign currency transaction (gains) losses on short-term intercompany balances	(714)		7
Acquisition-related charges				249
Transformation severance and related expenses	0	18	30	396
Loss on sale/disposal of assets	1,612		1,612
Adjusted EBITDA	(1,282)	(6)	(2,793)	(2,211)
Healthcare Claims Recovery Audit Services [Member]
Segment Reporting Information [Line Items]
Revenue	558	144	999	1,551
EBIT	(532)	(1,133)	(1,961)	(4,785)
Depreciation of property and equipment	7	22	30	176
EBITDA	(525)	(1,111)	(1,931)	(4,609)
Transformation severance and related expenses	472	26	683	431
Adjusted EBITDA	(53)	(1,085)	(1,248)	(4,178)
Corporate Segment [Member]
Segment Reporting Information [Line Items]
EBIT	(5,711)	(5,335)	(14,778)	(14,110)
EBITDA	(5,711)	(5,335)	(14,778)	(14,110)
Foreign currency transaction (gains) losses on short-term intercompany balances	688	(179)	(87)	(170)
Transformation severance and related expenses	272	318	308	446
Stock-based compensation	1,381	1,405	4,530	3,409
Adjusted EBITDA	$ (3,370)	$ (3,791)	$ (10,027)	$ (10,425)

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Debt (Details) - 2010 Credit Agreement [Member] - SunTrust Bank [Member] - USD ($)	Jan. 19, 2010	Sep. 30, 2015
Line of Credit Facility [Line Items]
Period of term loan and the revolving credit facility	4 years
Committed revolving credit facility		$ 20,000,000
Revolving credit facility outstanding		$ 0
Interest rate (percent)		1.95%
Revolving Credit facility commitment fee (percent)	0.25%
LIBOR [Member]
Line of Credit Facility [Line Items]
Revolving Credit facility and Term Loan interest rate (percent)	1.75%

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Fair Value of Financial Instruments (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Bank Loan Obligations [Member]
Fair Value of Financial Instruments (Textual) [Abstract]
Fair value of long term debt	$ 0	$ 0

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Earnings (Loss) Per Common Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings (Loss) Per Common Share

Earnings (Loss) Per Common Share

The following tables set forth the computations of basic and diluted loss per common share for the three and nine months ended September 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
Basic loss per common share:	2015			2014			2015			2014
Numerator:
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Denominator:
Weighted-average common shares outstanding	25,167			27,744			26,015			29,203
Basic loss per common share	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)

	Three Months Ended September 30,						Nine Months Ended September 30,
Diluted loss per common share:	2015			2014			2015			2014
Numerator:
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Denominator:
Weighted-average common shares outstanding	25,167			27,744			26,015			29,203
Incremental shares from stock-based compensation plans	—			—			—			—
Denominator for diluted loss per common share	25,167			27,744			26,015			29,203
Diluted loss per common share	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)

For the three and nine months ended September 30, 2015, weighted-average common shares outstanding excludes from the computation of diluted earnings (loss) per common share antidilutive shares underlying options that totaled 3.6 million shares. For the three and nine months ended September 30, 2014, weighted-average common shares outstanding excludes from the computation of diluted earnings (loss) per common share antidilutive shares underlying options that totaled 3.8 million shares and antidilutive Performance Units related to the Company's 2006 Management Incentive Plan that totaled less than 0.1 million shares. As a result of the net loss for the three months ended September 30, 2015 and September 30, 2014 and the nine months ended September 30, 2015 and September 30, 2014, all shares underlying stock options and Performance Units were considered antidilutive for such periods. The number of common shares used in the basic and diluted earnings (loss) per common share computations include nonvested restricted shares of 0.4 million and 0.6 million for the three and nine months ended September 30, 2015 and 2014, respectively, and nonvested restricted share units that we consider to be participating securities of 2.6 million and 0.1 million for the three and nine months ended September 30, 2015 and 2014, respectively.

We repurchased 1,735,277 shares of our common stock during the three months ended September 30, 2015 for $6.9 million, and 3,912,037 shares of our common stock during the nine months ended September 30, 2015 for $17.3 million. We repurchased 1,413,017 shares of our common stock during the three months ended September 30, 2014 for $9.0 million, and 3,117,277 shares of our common stock during the nine months ended September 30, 2014 for $20.0 million.

Pursuant to exercises of outstanding stock options, we issued no shares of our common stock in the three months ended September 30, 2015 and 12,863 shares of our common stock having a value of less than $0.1 million in the nine months ended September 30, 2015. We issued 105,478 shares of our common stock having a value of less than $0.5 million in the three months ended September 30, 2014 and 710,063 shares of our common stock having a value of $2.8 million in the nine months ended September 30, 2014. Stock option exercises during the nine-month period ended September 30, 2014 primarily consisted of exercises by a former executive officer of the Company.

In partial satisfaction of a business acquisition obligation, we issued 187,620 shares of our common stock having a value of $1.3 million in the nine months ended September 30, 2014. There were no shares issued to satisfy business acquisition obligations in the nine months ended September 30, 2015.

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Business Acquisitions and Divestitures (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 31, 2015	Aug. 31, 2015	Sep. 30, 2015	Sep. 30, 2015
Business Acquisition [Line Items]
Loss on sale of assets			$ 1,612	$ 1,612
Business Strategy, Inc. [Member] | Minimum [Member]
Business Acquisition [Line Items]
Revenue sharing percentage		10.00%
Business Strategy, Inc. [Member] | Maximum [Member]
Business Acquisition [Line Items]
Revenue sharing percentage		30.00%
Business Strategy, Inc. [Member] | Other Nonoperating Income (Expense) [Member]
Business Acquisition [Line Items]
Loss on sale of assets	$ 1,600

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Revenue	$ 33,923	$ 42,988	$ 104,344	$ 122,870
Operating expenses:
Cost of revenue	24,387	28,681	73,085	87,457
Selling, general and administrative expenses	8,487	10,492	26,043	31,505
Depreciation of property and equipment	1,262	1,428	3,858	4,696
Amortization of intangible assets	517	895	2,017	2,700
Total operating expenses	34,653	41,496	105,003	126,358
Operating (loss) income	(730)	1,492	(659)	(3,488)
Foreign currency transaction losses on short-term intercompany balances	654	1,221	1,930	1,073
Interest (income), net	(8)	(44)	(103)	(33)
Other loss	1,612	0	1,612	0
(Loss) income before income taxes	(2,988)	315	(4,098)	(4,528)
Income tax expense	421	554	1,172	853
Net loss	$ (3,409)	$ (239)	$ (5,270)	$ (5,381)
Basic loss per common share (Note B) (usd per share)	$ (0.14)	$ (0.01)	$ (0.20)	$ (0.18)
Diluted loss per common share (Note B) (usd per share)	$ (0.14)	$ (0.01)	$ (0.20)	$ (0.18)
Weighted-average common shares outstanding (Note B):
Basic (shares)	25,167	27,744	26,015	29,203
Diluted (shares)	25,167	27,744	26,015	29,203

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (5,270)	$ (5,381)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	5,875	7,396
Amortization of deferred loan costs	(100)	67
Stock-based compensation expense	4,530	3,409
Loss/gain on sale of assets/investments	1,561	0
Deferred income taxes	61	(933)
Foreign currency transaction losses on short-term intercompany balances	1,930	1,073
Changes in operating assets and liabilities:
Restricted cash	(45)	(64)
Billed receivables	6,843	(2,762)
Unbilled receivables	1,815	7,921
Prepaid expenses and other current assets	211	541
Other assets	(40)	15
Accounts payable and accrued expenses	(822)	(2,871)
Accrued payroll and related expenses	(2,861)	(445)
Refund liabilities	(581)	(1,058)
Deferred revenue	(645)	(265)
Noncurrent compensation obligations	0	414
Other long-term liabilities	(99)	73
Net cash provided by operating activities	12,363	7,130
Cash flows from investing activities:
Purchases of property and equipment, net of disposal proceeds	(3,169)	(3,574)
Net cash used in investing activities	(3,169)	(3,574)
Cash flows from financing activities:
Payment of deferred loan costs	0	(104)
Restricted stock repurchased from employees for withholding taxes	(311)	(568)
Proceeds from option exercises	45	2,790
Payments of deferred acquisition consideration	0	(2,208)
Repurchase of common stock	(17,261)	(20,000)
Net cash used in financing activities	(17,527)	(20,090)
Effect of exchange rates on cash and cash equivalents	(1,729)	(873)
Net decrease in cash and cash equivalents	(10,062)	(17,407)
Cash and cash equivalents at beginning of period	25,735	43,700
Cash and cash equivalents at end of period	15,673	26,293
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	51	80
Cash paid during the period for income taxes, net of refunds received	$ 734	$ 2,405

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Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator:
Net loss	$ (3,409)	$ (239)	$ (5,270)	$ (5,381)
Denominator:
Weighted-average common shares outstanding (shares)	25,167	27,744	26,015	29,203
Basic loss per common share (usd per share)	$ (0.14)	$ (0.01)	$ (0.20)	$ (0.18)
Numerator:
Net loss	$ (3,409)	$ (239)	$ (5,270)	$ (5,381)
Denominator:
Weighted-average common shares outstanding (shares)	25,167	27,744	26,015	29,203
Incremental shares from stock-based compensation plans (shares)	0	0	0	0
Denominator for diluted earnings (loss) per common share (shares)	25,167	27,744	26,015	29,203
Diluted loss per common share (usd per share)	$ (0.14)	$ (0.01)	$ (0.20)	$ (0.18)

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Stock-Based Compensation (Options) (Details)	9 Months Ended
	Sep. 30, 2015 employee $ / shares shares	Sep. 30, 2014 $ / shares shares
Employee inducement [Member]
Summary of stock option grants
No. of Options Granted (shares) | shares		270,000
Vesting Period		3 years
Weighted Average Exercise Price (usd per share)		$ 6.64
Weighted Average Grant Date Fair Value (usd per share)		$ 1.71
Employee [Member]
Summary of stock option grants
Vesting Period	3 years
2008 Equity Incentive Plan [Member] | Director [Member]
Summary of stock option grants
No. of Options Granted (shares) | shares	249,273	51,276
Weighted Average Exercise Price (usd per share)	$ 4.49	$ 6.45
Weighted Average Grant Date Fair Value (usd per share)	$ 2.44	$ 1.89
2008 Equity Incentive Plan [Member] | Director [Member] | Maximum [Member]
Summary of stock option grants
Vesting Period	1 year	1 year
2008 Equity Incentive Plan [Member] | Director, Group 2 [Member]
Summary of stock option grants
No. of Options Granted (shares) | shares	17,092
Vesting Period	3 years
Weighted Average Exercise Price (usd per share)	$ 3.99
Weighted Average Grant Date Fair Value (usd per share)	$ 1.33
2008 Equity Incentive Plan [Member] | Employee inducement [Member]
Summary of stock option grants
No. of Options Granted (shares) | shares	135,000
Vesting Period	3 years
Weighted Average Exercise Price (usd per share)	$ 5.51
Weighted Average Grant Date Fair Value (usd per share)	$ 1.42
2008 Equity Incentive Plan [Member] | Employee inducement [Member] | Vesting Date, September 11, 2015 [Member]
Summary of stock option grants
Weighted Average Exercise Price (usd per share)		$ 6.04
2008 Equity Incentive Plan [Member] | Employee inducement [Member] | Vesting Date, September 11, 2016 [Member]
Summary of stock option grants
Weighted Average Exercise Price (usd per share)		6.64
2008 Equity Incentive Plan [Member] | Employee inducement [Member] | Vesting Date, September 11, 2017 [Member]
Summary of stock option grants
Weighted Average Exercise Price (usd per share)		$ 7.24
2008 Equity Incentive Plan [Member] | Employee [Member]
Summary of stock option grants
No. of Options Granted (shares) | shares		1,480,000
Vesting Period		3 years
Weighted Average Exercise Price (usd per share)		$ 6.99
Weighted Average Grant Date Fair Value (usd per share)		1.81
Number of employees, granted stock awards | employee	3
2008 Equity Incentive Plan [Member] | Employee [Member] | Vesting Date, June 27, 2015 [Member]
Summary of stock option grants
Weighted Average Exercise Price (usd per share)		6.36
2008 Equity Incentive Plan [Member] | Employee [Member] | Vesting Date, June 27, 2016 [Member]
Summary of stock option grants
Weighted Average Exercise Price (usd per share)		6.99
2008 Equity Incentive Plan [Member] | Employee [Member] | Vesting Date, June 27, 2017 [Member]
Summary of stock option grants
Weighted Average Exercise Price (usd per share)		$ 7.63

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Basis of Presentation

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

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 for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America 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-month and nine-month periods ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

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 Footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2014.

New Accounting Standards

A summary of the new accounting standards issued by the Financial Accounting Standards Board (“FASB”) and included in the Accounting Standards Codification (“ASC”) that apply to PRGX is set forth below:

    FASB ASC Update No. 2015-15. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Interest - Imputations of Interest (Subtopic 835-30). The amendments in this update clarify the stance by the SEC allowing an entity to defer and present debt issuance costs for a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.We are currently evaluating the impact of ASU 2015-15 on our consolidated financial statements.

FASB ASC Update No. 2015-05. In April 2015, the FASB issued Accounting Standards Update 2015-05, Goodwill and Other - Internal - Use Software (Subtopic 350-40). The amendments in this update provide guidance about whether a cloud computing arrangement includes a software license. Specifically the amendment states that if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments in this update are effective for those annual periods beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-05 on our consolidated financial statements.

FASB ASC Update No. 2015-03. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”). ASU 2015-03 simplifies presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 with early adoption permitted. The guidance also requires retrospective application to all prior periods presented. We are currently evaluating the impact of ASU 2015-03 on our consolidated financial statements.

FASB ASC Update No. 2015-02. In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810). The amendments in this update revise the consolidation model for all entities. Specifically the amendments:

1. Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities.

2. Eliminate the presumption that a general partner should consolidate a limited partnership.

3. Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships.

4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The amendments in this update are effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-02 on our consolidated financial statements.

FASB ASC Update No. 2015-01. In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20). This update eliminates the concept of extraordinary items and their use in financial statements and corresponding disclosure. The amendments in this update are effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-01 on our consolidated financial statements.

FASB ASC Update No. 2014-15. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 provides guidance on management's responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and related disclosure requirements. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 with early adoption permitted. We do not expect the adoption of ASU 2014-15 to have a material impact on our consolidated financial statements.

FASB ASC Update No. 2014-09. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the transferring entity expects to be entitled in exchange for those goods or services. ASU 2014-09 allows for adoption using either of two methods; retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of application recognized at the date of initial adoption. In August 2015, the FASB issued ASU 2015-14 to defer the effective date by one year. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements.

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net loss	$ (3,409)	$ (239)	$ (5,270)	$ (5,381)
Foreign currency translation adjustments	(844)	(619)	(692)	(112)
Comprehensive loss	$ (4,253)	$ (858)	$ (5,962)	$ (5,493)

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Business Acquisitions and Divestitures

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Business Acquisitions and Divestitures

Business Acquisitions and Divestitures

We completed several acquisitions and divestitures in recent years (see Note 12 in our Annual Report on Form 10-K for the year ended December 31, 2014). Generally, we acquire businesses that we believe advance our business strategy and we divest assets or businesses that we no longer find strategically aligned with our service offerings.

In August 2015, we divested certain assets from a document service offering purchased as part of the Business Strategy, Inc. acquisition in 2011.

We did not receive any initial cash payments at closing of the transaction and recognized a loss on the sale of $1.6 million, which we recognized in Other loss in the Consolidated Statements of Operations. We may receive a portion of revenue recognized by the buyer for the period from January 1, 2016 to December 31, 2016 that is based on a percentage of revenue from the clients transferred in connection with the disposition. The revenue sharing percentage ranges from 10% to 30% based on the type of solution or service to be performed.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 06, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	PRGX GLOBAL, INC.
Entity Central Index Key	0001007330
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Current Fiscal Year Focus	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		22,859,734

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Accounting Standards

New Accounting Standards

A summary of the new accounting standards issued by the Financial Accounting Standards Board (“FASB”) and included in the Accounting Standards Codification (“ASC”) that apply to PRGX is set forth below:

    FASB ASC Update No. 2015-15. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Interest - Imputations of Interest (Subtopic 835-30). The amendments in this update clarify the stance by the SEC allowing an entity to defer and present debt issuance costs for a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.We are currently evaluating the impact of ASU 2015-15 on our consolidated financial statements.

FASB ASC Update No. 2015-05. In April 2015, the FASB issued Accounting Standards Update 2015-05, Goodwill and Other - Internal - Use Software (Subtopic 350-40). The amendments in this update provide guidance about whether a cloud computing arrangement includes a software license. Specifically the amendment states that if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments in this update are effective for those annual periods beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-05 on our consolidated financial statements.

FASB ASC Update No. 2015-03. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”). ASU 2015-03 simplifies presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 with early adoption permitted. The guidance also requires retrospective application to all prior periods presented. We are currently evaluating the impact of ASU 2015-03 on our consolidated financial statements.

FASB ASC Update No. 2015-02. In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810). The amendments in this update revise the consolidation model for all entities. Specifically the amendments:

1. Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities.

2. Eliminate the presumption that a general partner should consolidate a limited partnership.

3. Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships.

4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The amendments in this update are effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-02 on our consolidated financial statements.

FASB ASC Update No. 2015-01. In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20). This update eliminates the concept of extraordinary items and their use in financial statements and corresponding disclosure. The amendments in this update are effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact of ASU 2015-01 on our consolidated financial statements.

FASB ASC Update No. 2014-15. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 provides guidance on management's responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and related disclosure requirements. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 with early adoption permitted. We do not expect the adoption of ASU 2014-15 to have a material impact on our consolidated financial statements.

FASB ASC Update No. 2014-09. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the transferring entity expects to be entitled in exchange for those goods or services. ASU 2014-09 allows for adoption using either of two methods; retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of application recognized at the date of initial adoption. In August 2015, the FASB issued ASU 2015-14 to defer the effective date by one year. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements.

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents (Note E)	$ 15,673	$ 25,735
Restricted cash	98	53
Contract receivables, less allowances of $1,752 in 2015 and $2,243 in 2014:
Billed	24,255	32,373
Unbilled	1,288	2,809
Receivables Net	25,543	35,182
Employee advances and miscellaneous receivables, less allowances of $834 in 2015 and $692 in 2014	1,781	1,993
Total receivables	27,324	37,175
Prepaid expenses and other current assets	3,141	3,421
Total current assets	46,236	66,384
Property and equipment	58,333	56,174
Less accumulated depreciation and amortization	(46,993)	(43,954)
Property and equipment, net	11,340	12,220
Goodwill	11,589	13,036
Intangible assets, less accumulated amortization of $35,163 in 2015 and $33,973 in 2014	7,131	9,439
Noncurrent portion of unbilled receivables	825	1,196
Other assets	828	507
Total assets	77,949	102,782
Current liabilities:
Accounts payable and accrued expenses	6,437	7,397
Accrued payroll and related expenses	12,103	15,415
Refund liabilities	4,953	5,393
Deferred revenue	1,094	2,173
Other current liabilities	254	0
Total current liabilities	24,841	30,378
Noncurrent refund liabilities	716	857
Other long-term liabilities	1,218	561
Total liabilities	$ 26,775	$ 31,796
Commitments and contingencies (Note H)
Shareholders’ equity (Note B):
Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 22,872,100 shares issued and outstanding at September 30, 2015 and 26,762,861 shares issued and outstanding at December 31, 2014	$ 229	$ 268
Additional paid-in capital	576,256	590,067
Accumulated deficit	(526,182)	(520,912)
Accumulated other comprehensive income	871	1,563
Total shareholders’ equity	51,174	70,986
Total liabilities and shareholders’ equity	$ 77,949	$ 102,782

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Debt

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Debt

Debt

On January 19, 2010, we entered into a four-year revolving credit and term loan agreement (the “2010 Credit Agreement”) with SunTrust Bank (“SunTrust”). Subsequent modifications of the 2010 Credit Agreement were entered into with SunTrust. Most recently, on December 23, 2014, we entered into an amended and restated revolving credit agreement (the “Credit Facility”) with SunTrust. The Credit Facility, and provisions of the 2010 Credit Agreement where applicable, is guaranteed by the Company and all of its material domestic subsidiaries and secured by substantially all of the assets of the Company.

The amount available for borrowing under the Credit Facility is $20.0 million, and as of September 30, 2015 we had no outstanding borrowings. With the Credit Facility provision of a fixed applicable margin of 1.75% plus a specified index rate based on one-month LIBOR, the interest rate that would have applied at September 30, 2015 had any borrowings been outstanding was approximately 1.95%. We also must pay a commitment fee of 0.25% per annum, payable quarterly, on the unused portion of the Credit Facility.

The Credit Facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financial statements and other reports, maintenance of existence, and transactions with affiliates. The negative covenants limit the ability of the Company, among other things, to incur debt, incur liens, make investments, sell assets or declare or pay dividends on its capital stock. The financial covenants included in the Credit Facility, among other things, limit the amount of capital expenditures the Company can make, set forth maximum leverage and net funded debt ratios for the Company and a minimum fixed charge coverage ratio, and also require the Company to maintain minimum consolidated earnings before interest, taxes, depreciation and amortization. In addition, the Credit Facility includes customary events of default. The Company was in compliance with the covenants in its Credit Facility as of September 30, 2015.

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Cash and Cash Equivalents

9 Months Ended

Sep. 30, 2015

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less from date of purchase. We place our temporary cash investments with high credit quality financial institutions. At times, certain investments may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit or otherwise may not be covered by FDIC insurance. Some of our cash and cash equivalents are held at banks in jurisdictions outside the U.S. that have restrictions on transferring such assets outside of these countries on a temporary or permanent basis. Such restricted net assets are not significant in comparison to our consolidated net assets.

Our cash and cash equivalents included short-term investments of approximately $3.7 million as of September 30, 2015 and $12.2 million as of December 31, 2014, of which approximately $2.4 million and $2.5 million, respectively, were held at banks outside of the United States, primarily in Brazil and Canada.

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Earnings (Loss) Per Common Share (Textual) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items]
Number of common shares in the basic and diluted earnings per common share (shares)	400,000	400,000	600,000	600,000
Nonvested restricted share (shares)	2,600,000	2,600,000	100,000	100,000
Stock issued for exercise of options, shares	0	105,478	12,863	710,063
Stock issued for exercise of options, value		$ 0.5	$ 0.1	$ 2.8
Business Strategy, Inc. [Member]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items]
Business combination, consideration paid in common stock, shares			0	187,620
Business combination, consideration paid in common stock, value				$ 1.3
Common Stock [Member]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items]
Common stock repurchased, shares	1,735,277	1,413,017	3,912,037	3,117,277
Common stock repurchased, value	$ 6.9	$ 9.0	$ 17.3	$ 20.0
Non-qualified Option [Member]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items]
Weighted average shares outstanding excludes anti-dilutive shares underlying options (shares) (less than 0.1 million)	3,600,000	3,800,000	3,600,000	3,800,000
Performance Unit [Member]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items]
Weighted average shares outstanding excludes anti-dilutive shares underlying options (shares) (less than 0.1 million)		100,000		100,000

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Earnings (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Computations of basic and diluted earnings (loss) per common share

The following tables set forth the computations of basic and diluted loss per common share for the three and nine months ended September 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
Basic loss per common share:	2015			2014			2015			2014
Numerator:
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Denominator:
Weighted-average common shares outstanding	25,167			27,744			26,015			29,203
Basic loss per common share	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)

	Three Months Ended September 30,						Nine Months Ended September 30,
Diluted loss per common share:	2015			2014			2015			2014
Numerator:
Net loss	$	(3,409	)	$	(239	)	$	(5,270	)	$	(5,381	)
Denominator:
Weighted-average common shares outstanding	25,167			27,744			26,015			29,203
Incremental shares from stock-based compensation plans	—			—			—			—
Denominator for diluted loss per common share	25,167			27,744			26,015			29,203
Diluted loss per common share	$	(0.14	)	$	(0.01	)	$	(0.20	)	$	(0.18	)

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Reported income tax expense in each period primarily results from taxes on the income of foreign subsidiaries. The effective tax rates generally differ from the expected tax rate due primarily to the Company’s deferred tax asset valuation allowance on the domestic earnings and taxes on income of foreign subsidiaries.

Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service in the U.S. and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.

We apply a “more-likely-than-not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We refer to GAAP for guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. In accordance with FASB ASC 740, our policy for recording interest and penalties associated with tax positions is to record such items as a component of income before income taxes. A number of years may elapse before a particular tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments also varies by tax jurisdiction.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

We state cash equivalents at cost, which approximates fair market value. The carrying values for receivables from clients, unbilled services, accounts payable, deferred revenue and other accrued liabilities reasonably approximate fair market value due to the nature of the financial instrument and the short term maturity of these items.

We had no debt outstanding as of September 30, 2015 and December 31, 2014. Should we have debt outstanding in the future, we would consider the factors used in determining the fair value of debt to be Level 3 inputs (significant unobservable inputs).

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

We are party to a variety of legal proceedings arising in the normal course of business. While the results of these proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on our financial position, results of operations or cash flows.

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

None.

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Operating Segments and Related Information (Tables)

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment information

Segment information for the three and nine months ended September 30, 2015 and 2014 (in thousands) is as follows:

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Three Months Ended September 30, 2015
Revenue	$	23,981	$	8,052	$	1,332		$	558		$	—		$	33,923
Net loss														$	(3,409	)
Income tax expense														421
Interest income, net														(8		)
EBIT	$	5,255	$	365	$	(2,373	)	$	(532	)	$	(5,711	)	$	(2,996	)
Depreciation of property and equipment	947		148		160			7			—			1,262
Amortization of intangible assets	437		47		33			—			—			517
EBITDA	$	6,639	$	560	$	(2,180	)	$	(525	)	$	(5,711	)	$	(1,217	)
Foreign currency transaction (gains) losses on short-term intercompany balances	393		287		(714		)	—			688			654
Transformation severance and related expenses	101		—		—			472			272			845
Loss on sale/disposal of assets	—		—		1,612			—			—			1,612
Stock-based compensation	—		—		—			—			1,381			1,381
Adjusted EBITDA	$	7,133	$	847	$	(1,282	)	$	(53	)	$	(3,370	)	$	3,275

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific			Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Three Months Ended September 30, 2014
Revenue	$	28,550	$	10,708		$	3,586		$	144		$	—		$	42,988
Net loss															$	(239	)
Income tax expense															554
Interest income, net															(44		)
EBIT	$	7,155	$	(151	)	$	(265	)	$	(1,133	)	$	(5,335	)	$	271
Depreciation of property and equipment	1,111		150			145			22			—			1,428
Amortization of intangible assets	500		299			96			—			—			895
EBITDA	$	8,766	$	298		$	(24	)	$	(1,111	)	$	(5,335	)	$	2,594
Foreign currency transaction (gains) losses on short-term intercompany balances	208		1,192			—			—			(179		)	1,221
Transformation severance and related expenses	44		7			18			26			318			413
Stock-based compensation	—		—			—			—			1,405			1,405
Adjusted EBITDA	$	9,018	$	1,497		$	(6	)	$	(1,085	)	$	(3,791	)	$	5,633

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Nine Months Ended September 30, 2015
Revenue	$	71,748	$	27,307	$	4,290		$	999		$	—		$	104,344
Net loss														$	(5,270	)
Income tax expense														1,172
Interest income, net														(103		)
EBIT	$	15,838	$	1,719	$	(5,019	)	$	(1,961	)	$	(14,778	)	$	(4,201	)
Depreciation of property and equipment	2,895		454		479			30			—			3,858
Amortization of intangible assets	1,319		600		98			—			—			2,017
EBITDA	$	20,052	$	2,773	$	(4,442	)	$	(1,931	)	$	(14,778	)	$	1,674
Foreign currency transaction (gains) losses on short-term intercompany balances	651		1,359		7			—			(87		)	1,930
Transformation severance and related expenses	265		268		30			683			308			1,554
Loss on sale/disposal of assets	—		—		1,612			—			—			1,612
Stock-based compensation	—		—		—			—			4,530			4,530
Adjusted EBITDA	$	20,968	$	4,400	$	(2,793	)	$	(1,248	)	$	(10,027	)	$	11,300

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Nine Months Ended September 30, 2014
Revenue	$	80,377	$	32,792	$	8,150		$	1,551		$	—		$	122,870
Net loss														$	(5,381	)
Income tax expense														853
Interest income, net														(33		)
EBIT	$	16,632	$	1,309	$	(3,607	)	$	(4,785	)	$	(14,110	)	$	(4,561	)
Depreciation of property and equipment	3,612		445		463			176			—			4,696
Amortization of intangible assets	1,501		911		288			—			—			2,700
EBITDA	$	21,745	$	2,665	$	(2,856	)	$	(4,609	)	$	(14,110	)	$	2,835
Foreign currency transaction (gains) losses on short-term intercompany balances	164		1,079		—			—			(170		)	1,073
Acquisition-related charges	—		—		249			—			—			249
Transformation severance and related expenses	510		569		396			431			446			2,352
Stock-based compensation	—		—		—			—			3,409			3,409
Adjusted EBITDA	$	22,419	$	4,313	$	(2,211	)	$	(4,178	)	$	(10,425	)	$	9,918

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Stock-Based Compensation (Narrative) (Details) $ in Millions				3 Months Ended		9 Months Ended		39 Months Ended
	Sep. 28, 2015 shares	Mar. 30, 2015 executive_officer shares	Jun. 19, 2012 USD ($) executive_officer shares	Sep. 30, 2015 USD ($) compensation_plan shares	Sep. 30, 2014 USD ($) shares	Sep. 30, 2015 USD ($) shares	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) executive_officer shares	Mar. 31, 2015 executive_officer
Stock-Based Compensation (Textual) [Abstract]
Number of stock-based compensation plans | compensation_plan				2
The Plans [Member]
Stock-Based Compensation (Textual) [Abstract]
Selling, general and administrative expenses | $				$ 1.4	$ 1.4	$ 4.5	$ 3.4
Unrecognized stock-based compensation expense related to stock options | $				$ 11.2		$ 11.2		$ 11.2
Weighted-average period for recognizing stock compensation expense						1 year 2 months 1 day
Employee Group [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period						3 years
Employee Group [Member] | 2008 Equity Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period							3 years
Director Group [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period						1 year
Stock Options [Member] | 2008 Equity Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Stock options expiration period						7 years
Stock Options [Member] | Employee Group [Member] | 2008 Equity Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period						3 years
Stock Options [Member] | Director [Member] | 2008 Equity Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period						1 year
MIP Performance Units [Member] | 2006 Management Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period			3 years
Number of executive officers, granted stock awards			7
Total of performance units were outstanding and fully vested (shares) | shares			154,264	0		0		0
Grant date fair value awards | $			$ 1.2
Percentage of performance units (percent)			60.00%
Percentage of fair market value (percent)			40.00%
Performance units settled in period (shares) | shares						16,530		137,740
Common stock issued during period (shares) | shares				0	16,526	9,918		79,356
Cash payments for shares settled during period | $						$ 0.1		$ 0.3
Number of executive officers that settled performance units in period (executive officers)								2
Number of former executive officers that settled performance units in period (executive officers)								4
Performance units forfeited in period (shares) | shares								16,524
Number of former executive officers that forfeited performance units in period (executive officer)								1
Performance-based Restricted Stock Units [Member] | 2006 Management Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Number of executive officers, granted stock awards		8
Total of performance units were outstanding and fully vested (shares) | shares	1,208,333	1,325,000
Percentage of performance units (percent)	25.00%	50.00%
Percentage of fair market value (percent)	75.00%	50.00%
Requisite performance period	2 years	2 years
Performance-based Restricted Stock Units [Member] | 2006 Management Incentive Plan [Member] | Threshold Performance Level [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting rights (percent)	35.00%	35.00%
Performance-based Restricted Stock Units [Member] | 2006 Management Incentive Plan [Member] | Target Performance Level [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting rights (percent)	100.00%	100.00%
Performance-based Restricted Stock Units [Member] | 2006 Management Incentive Plan [Member] | Maximum Performance Level [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting rights (percent)	100.00%	200.00%
Performance-based Restricted Stock Units [Member] | Employee Group [Member] | 2008 Equity Incentive Plan [Member]
Stock-Based Compensation (Textual) [Abstract]
Award vesting period						2 years	3 years
Number of executive officers, granted stock awards									8

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowances for contract receivables	$ 1,752	$ 2,243
Allowances for employee advances and miscellaneous receivables	834	692
Accumulated amortization on intangible assets	$ 35,163	$ 33,973
Common stock, par value (usd per share)	$ 0	$ 0
Common stock, stated value per share (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	50,000,000	50,000,000
Common stock, shares issued (shares)	22,872,100	26,762,861
Common stock, shares outstanding (shares)	22,872,100	26,762,861

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Operating Segments and Related Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Operating Segments and Related Information

Operating Segments and Related Information

We conduct our operations through the following four reportable segments:

Recovery Audit Services – Americas represents recovery audit services (other than Healthcare Claims 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 (other than Healthcare Claims Recovery Audit services) provided in Europe, Asia and the Pacific region.

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

Healthcare Claims Recovery Audit Services represents recovery audit services for healthcare claims, which consist primarily of services provided under subcontracts related to the Medicare Recovery Audit Contractor program.

Additionally, Corporate Support includes the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the four reportable segments.

We evaluate the performance of our reportable segments based upon revenue and measures of profit or loss we refer to as EBITDA and Adjusted EBITDA. We define 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. We do not have any inter-segment revenue.

Segment information for the three and nine months ended September 30, 2015 and 2014 (in thousands) is as follows:

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Three Months Ended September 30, 2015
Revenue	$	23,981	$	8,052	$	1,332		$	558		$	—		$	33,923
Net loss														$	(3,409	)
Income tax expense														421
Interest income, net														(8		)
EBIT	$	5,255	$	365	$	(2,373	)	$	(532	)	$	(5,711	)	$	(2,996	)
Depreciation of property and equipment	947		148		160			7			—			1,262
Amortization of intangible assets	437		47		33			—			—			517
EBITDA	$	6,639	$	560	$	(2,180	)	$	(525	)	$	(5,711	)	$	(1,217	)
Foreign currency transaction (gains) losses on short-term intercompany balances	393		287		(714		)	—			688			654
Transformation severance and related expenses	101		—		—			472			272			845
Loss on sale/disposal of assets	—		—		1,612			—			—			1,612
Stock-based compensation	—		—		—			—			1,381			1,381
Adjusted EBITDA	$	7,133	$	847	$	(1,282	)	$	(53	)	$	(3,370	)	$	3,275

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific			Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Three Months Ended September 30, 2014
Revenue	$	28,550	$	10,708		$	3,586		$	144		$	—		$	42,988
Net loss															$	(239	)
Income tax expense															554
Interest income, net															(44		)
EBIT	$	7,155	$	(151	)	$	(265	)	$	(1,133	)	$	(5,335	)	$	271
Depreciation of property and equipment	1,111		150			145			22			—			1,428
Amortization of intangible assets	500		299			96			—			—			895
EBITDA	$	8,766	$	298		$	(24	)	$	(1,111	)	$	(5,335	)	$	2,594
Foreign currency transaction (gains) losses on short-term intercompany balances	208		1,192			—			—			(179		)	1,221
Transformation severance and related expenses	44		7			18			26			318			413
Stock-based compensation	—		—			—			—			1,405			1,405
Adjusted EBITDA	$	9,018	$	1,497		$	(6	)	$	(1,085	)	$	(3,791	)	$	5,633

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Nine Months Ended September 30, 2015
Revenue	$	71,748	$	27,307	$	4,290		$	999		$	—		$	104,344
Net loss														$	(5,270	)
Income tax expense														1,172
Interest income, net														(103		)
EBIT	$	15,838	$	1,719	$	(5,019	)	$	(1,961	)	$	(14,778	)	$	(4,201	)
Depreciation of property and equipment	2,895		454		479			30			—			3,858
Amortization of intangible assets	1,319		600		98			—			—			2,017
EBITDA	$	20,052	$	2,773	$	(4,442	)	$	(1,931	)	$	(14,778	)	$	1,674
Foreign currency transaction (gains) losses on short-term intercompany balances	651		1,359		7			—			(87		)	1,930
Transformation severance and related expenses	265		268		30			683			308			1,554
Loss on sale/disposal of assets	—		—		1,612			—			—			1,612
Stock-based compensation	—		—		—			—			4,530			4,530
Adjusted EBITDA	$	20,968	$	4,400	$	(2,793	)	$	(1,248	)	$	(10,027	)	$	11,300

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		Adjacent Services			Healthcare Claims Recovery Audit Services			Corporate Support			Total
Nine Months Ended September 30, 2014
Revenue	$	80,377	$	32,792	$	8,150		$	1,551		$	—		$	122,870
Net loss														$	(5,381	)
Income tax expense														853
Interest income, net														(33		)
EBIT	$	16,632	$	1,309	$	(3,607	)	$	(4,785	)	$	(14,110	)	$	(4,561	)
Depreciation of property and equipment	3,612		445		463			176			—			4,696
Amortization of intangible assets	1,501		911		288			—			—			2,700
EBITDA	$	21,745	$	2,665	$	(2,856	)	$	(4,609	)	$	(14,110	)	$	2,835
Foreign currency transaction (gains) losses on short-term intercompany balances	164		1,079		—			—			(170		)	1,073
Acquisition-related charges	—		—		249			—			—			249
Transformation severance and related expenses	510		569		396			431			446			2,352
Stock-based compensation	—		—		—			—			3,409			3,409
Adjusted EBITDA	$	22,419	$	4,313	$	(2,211	)	$	(4,178	)	$	(10,425	)	$	9,918

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Operating Segments and Related Information (Textual) (Details)	9 Months Ended
	Sep. 30, 2015 segment
Segment Reporting [Abstract]
Number of reportable segments	4

XML

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of stock option grants

The following table summarizes stock option grants during the nine months ended September 30, 2015 and 2014:

Grantee Type	# of Options Granted	Vesting Period	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
2015
Director	249,273	1 year or less	$	4.49	$	2.44
Director	17,092	3 years	$	3.99	$	1.33
Employee inducements (1)	135,000	3 years	$	5.51	$	1.42
2014
Director	51,276	1 year or less	$	6.45	$	1.89
Employee group (2)	1,480,000	3 years	$	6.99	$	1.81
Employee inducements (3)	270,000	3 years	$	6.64	$	1.71

(1) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the first nine months of 2015 to three employees in connection with the employees joining the Company.

(2) The exercise price for these options is $6.36 for the options that vested on June 27, 2015, $6.99 for the options that vest on June 27, 2016 and $7.63 for the options that vest on June 27, 2017.

(3) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the third quarter of 2014 to two executive officers in connection with the employees joining the Company. The weighted average exercise price for these options is calculated based on an exercise price of $6.04 for the options that vested on September 11, 2015, $6.64 for the options that vest on September 11, 2016 and $7.24 for the options that vest on September 11, 2017.

Summary of nonvested stock awards granted

The following table summarizes nonvested stock awards granted during the nine months ended September 30, 2015 and 2014:

Grantee Type	# of Shares Granted	Vesting Period	Weighted Average Grant Date Fair Value
2015
Director	4,273	1 year or less	$	4.02
Director	17,092	3 years	$	3.99
Employee group (1)	2,533,333	2 years	$	3.99
Employee inducements (2)	10,000	3 years	$	5.29
2014
Director group	51,276	1 year or less	$	6.45
Employee group	120,000	3 years	$	6.36
Employee inducements (3)	70,000	3 years	$	6.04

(1) The Company granted nonvested performance-based stock awards (restricted stock units) in the first quarter of 2015 to eight executive officers totaling 1,325,000 units. During the third quarter of 2015, the Company issued 1,208,333 units to key employees.

(2) The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the first quarter of 2015 to two employees in connection with the employees joining the Company.