Company Quick10K Filing
PRGX Global
Price5.66 EPS-0
Shares23 P/E-14
MCap131 P/FCF41
Net Debt25 EBIT-7
TEV156 TEV/EBIT-23
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-06
10-Q 2020-06-30 Filed 2020-08-07
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-03-12
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-18
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-03-13
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-05-09
10-K 2016-12-31 Filed 2017-03-16
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-03-15
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-07
10-Q 2014-03-31 Filed 2014-05-12
10-K 2013-12-31 Filed 2014-03-14
10-Q 2013-09-30 Filed 2013-11-05
10-Q 2013-06-30 Filed 2013-08-06
10-Q 2013-03-31 Filed 2013-05-07
10-K 2012-12-31 Filed 2013-03-13
10-Q 2012-09-30 Filed 2012-11-06
10-Q 2012-06-30 Filed 2012-08-06
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-03-15
10-Q 2011-09-30 Filed 2011-11-07
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-09
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-15
10-Q 2010-06-30 Filed 2010-08-13
10-Q 2010-03-31 Filed 2010-05-17
10-K 2009-12-31 Filed 2010-03-29
8-K 2020-10-27
8-K 2020-09-16
8-K 2020-07-28
8-K 2020-06-18
8-K 2020-04-28
8-K 2020-02-25
8-K 2020-02-13
8-K 2020-01-28
8-K 2019-10-30
8-K 2019-07-30
8-K 2019-06-06
8-K 2019-04-30
8-K 2019-04-16
8-K 2019-03-26
8-K 2019-03-07
8-K 2019-01-03
8-K 2018-11-01
8-K 2018-09-27
8-K 2018-08-30
8-K 2018-08-09
8-K 2018-06-26
8-K 2018-06-04
8-K 2018-05-29
8-K 2018-05-16
8-K 2018-05-01
8-K 2018-03-01

PRGX 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 ex3112020q3.htm
EX-31.2 ex3122020q3.htm
EX-32.1 ex3212020q3.htm

PRGX Global Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
14511687582902012201420172020
Assets, Equity
554229163-102012201420172020
Rev, G Profit, Net Income
1593-3-9-152012201420172020
Ops, Inv, Fin

prgx-20200930
0001007330false2020Q3--12-3123,561,493us-gaap:ServiceMember00010073302020-01-012020-09-30xbrli:shares00010073302020-10-30iso4217:USD00010073302020-07-012020-09-3000010073302019-07-012019-09-3000010073302019-01-012019-09-30iso4217:USDxbrli:shares00010073302020-09-3000010073302019-12-310001007330us-gaap:CommonStockMember2020-06-300001007330us-gaap:AdditionalPaidInCapitalMember2020-06-300001007330us-gaap:RetainedEarningsMember2020-06-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000010073302020-06-300001007330us-gaap:RetainedEarningsMember2020-07-012020-09-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001007330us-gaap:CommonStockMember2020-07-012020-09-300001007330us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001007330us-gaap:CommonStockMember2020-09-300001007330us-gaap:AdditionalPaidInCapitalMember2020-09-300001007330us-gaap:RetainedEarningsMember2020-09-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001007330us-gaap:CommonStockMember2019-06-300001007330us-gaap:AdditionalPaidInCapitalMember2019-06-300001007330us-gaap:RetainedEarningsMember2019-06-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-3000010073302019-06-300001007330us-gaap:RetainedEarningsMember2019-07-012019-09-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300001007330us-gaap:CommonStockMember2019-07-012019-09-300001007330us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300001007330us-gaap:CommonStockMember2019-09-300001007330us-gaap:AdditionalPaidInCapitalMember2019-09-300001007330us-gaap:RetainedEarningsMember2019-09-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-3000010073302019-09-300001007330us-gaap:CommonStockMember2019-12-310001007330us-gaap:AdditionalPaidInCapitalMember2019-12-310001007330us-gaap:RetainedEarningsMember2019-12-310001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001007330us-gaap:RetainedEarningsMember2020-01-012020-09-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300001007330us-gaap:CommonStockMember2020-01-012020-09-300001007330us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001007330us-gaap:CommonStockMember2018-12-310001007330us-gaap:AdditionalPaidInCapitalMember2018-12-310001007330us-gaap:RetainedEarningsMember2018-12-310001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-3100010073302018-12-310001007330us-gaap:RetainedEarningsMember2019-01-012019-09-300001007330us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300001007330us-gaap:CommonStockMember2019-01-012019-09-300001007330us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-30prgx:compensation_plan0001007330us-gaap:RestrictedStockMember2020-01-012020-09-300001007330us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300001007330prgx:PerformanceBasedRestrictedStockUnitsMember2020-01-012020-09-300001007330us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockMember2020-01-012020-09-300001007330us-gaap:RestrictedStockMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-01-012020-09-300001007330us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-01-012020-09-300001007330us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-30xbrli:pureprgx:segment0001007330srt:AmericasMember2020-07-012020-09-300001007330prgx:EuropeAsiaandPacificMember2020-07-012020-09-300001007330prgx:AdjacentServicesMember2020-07-012020-09-300001007330us-gaap:CorporateMember2020-07-012020-09-300001007330us-gaap:CorporateMember2020-01-012020-09-300001007330srt:AmericasMember2019-07-012019-09-300001007330prgx:EuropeAsiaandPacificMember2019-07-012019-09-300001007330prgx:AdjacentServicesMember2019-07-012019-09-300001007330us-gaap:CorporateMember2019-07-012019-09-300001007330srt:AmericasMember2020-01-012020-09-300001007330prgx:EuropeAsiaandPacificMember2020-01-012020-09-300001007330prgx:AdjacentServicesMember2020-01-012020-09-300001007330srt:AmericasMember2019-01-012019-09-300001007330prgx:EuropeAsiaandPacificMember2019-01-012019-09-300001007330prgx:AdjacentServicesMember2019-01-012019-09-300001007330us-gaap:CorporateMember2019-01-012019-09-300001007330us-gaap:LineOfCreditMemberprgx:BankOfAmericaMemberus-gaap:RevolvingCreditFacilityMember2019-03-142019-03-140001007330us-gaap:LineOfCreditMemberprgx:BankOfAmericaMemberus-gaap:RevolvingCreditFacilityMember2019-03-140001007330us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMemberprgx:BankOfAmericaMember2019-03-140001007330us-gaap:LineOfCreditMemberprgx:BankOfAmericaMemberus-gaap:BridgeLoanMember2019-03-140001007330srt:MinimumMemberus-gaap:SeniorNotesMember2019-03-140001007330us-gaap:LondonInterbankOfferedRateLIBORMembersrt:MaximumMemberus-gaap:SeniorNotesMember2019-03-140001007330srt:MinimumMemberus-gaap:BaseRateMemberus-gaap:SeniorNotesMember2019-03-140001007330srt:MaximumMemberus-gaap:BaseRateMemberus-gaap:SeniorNotesMember2019-03-140001007330us-gaap:LineOfCreditMemberprgx:BankOfAmericaMemberus-gaap:RevolvingCreditFacilityMember2020-09-300001007330us-gaap:LineOfCreditMemberprgx:BankOfAmericaMemberus-gaap:RevolvingCreditFacilityMember2020-01-012020-09-300001007330us-gaap:RevolvingCreditFacilityMember2020-09-300001007330us-gaap:RevolvingCreditFacilityMember2019-12-310001007330prgx:FinanceLeaseObligationsMember2020-09-300001007330prgx:FinanceLeaseObligationsMember2019-12-310001007330us-gaap:BankLoanObligationsMember2020-09-300001007330us-gaap:BankLoanObligationsMember2019-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
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) 
Registrants telephone number, including area code: (770779-3900
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      No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.  
¨  Large accelerated filer
Accelerated filer
¨  Non-accelerated filer     
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  




Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par valuePRGXNasdaq Global Select Market
Common shares of the registrant outstanding at October 30, 2020 were 23,561,493.



PRGX GLOBAL, INC.
FORM 10-Q
For the Quarter Ended September 30, 2020
INDEX
 
 Page No.
Part I. Financial Information
Part II. Other Information



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,
 2020201920202019
Revenue, net $41,532 $42,290 $117,382 $123,068 
Operating expenses:
Cost of revenue20,813 25,539 63,931 77,086 
Selling, general and administrative expenses13,751 13,544 41,941 43,209 
Depreciation of property, equipment and software assets1,295 2,648 5,401 7,232 
Amortization of intangible assets830 864 2,487 2,598 
Impairment charges553  553  
Acquisition-related adjustment income (250) (250)
Total operating expenses37,242 42,345 114,313 129,875 
Operating income (loss) from continuing operations4,290 (55)3,069 (6,807)
Foreign currency transaction (gains) losses on short-term intercompany balances(418)905 219 1,034 
Interest expense, net216 376 861 1,441 
Other loss (income)2 4 4 (4)
      Income (loss) from continuing operations before income tax4,490 (1,340)1,985 (9,278)
Income tax expense1,456 202 2,416 681 
Net income (loss) from continuing operations$3,034 $(1,542)$(431)$(9,959)
Discontinued operations:
Income from discontinued operations$ $900 $ $642 
Net income from discontinued operations$ $900 $ $642 
Net income (loss)$3,034 $(642)$(431)$(9,317)
Basic income (loss) per common share (Note 2):
Basic income (loss) from continuing operations$0.13 $(0.07)$(0.02)$(0.44)
Basic income from discontinued operations 0.04  0.03 
Total basic income (loss) per common share$0.13 $(0.03)$(0.02)$(0.41)
Diluted income (loss) per common share (Note 2):
Diluted income (loss) from continuing operations$0.13 $(0.07)$(0.02)$(0.44)
Diluted income from discontinued operations 0.04  0.03 
Total diluted income (loss) per common share$0.13 $(0.03)$(0.02)$(0.41)
Weighted-average common shares outstanding (Note 2):
Basic22,695 22,770 22,597 22,715 
Diluted23,018 22,770 22,597 22,715 
See accompanying Notes to Condensed Consolidated Financial Statements.
1


PRGX GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
 Three Months
Ended September 30,
Nine Months
Ended September 30,
 2020201920202019
Net income (loss)$3,034 $(642)$(431)$(9,317)
Foreign currency translation adjustments, net of tax414 (275)(786)(31)
Comprehensive income (loss)$3,448 $(917)$(1,217)$(9,348)

See accompanying Notes to Condensed Consolidated Financial Statements.
2


PRGX GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
September 30,December 31,
20202019
ASSETS
Current assets:
Cash and cash equivalents$22,625 $14,982 
Restricted cash121 46 
Receivables:
Contract receivables, less allowances of $1,391 in 2020 and $1,781 in 2019
Billed35,977 38,201 
Unbilled2,786 4,911 
38,763 43,112 
Employee advances and miscellaneous receivables, net995 704 
Total receivables39,758 43,816 
Prepaid expenses and other current assets3,586 5,582 
Total current assets66,090 64,426 
Property, equipment and software69,832 63,557 
Less accumulated depreciation and amortization(49,266)(45,811)
Property, equipment and software, net20,566 17,746 
Operating lease right-of-use assets (Note 9)10,226 10,969 
Goodwill15,027 15,070 
Intangible assets, less accumulated amortization of $49,369 in 2020 and $47,097 in 2019
8,963 11,506 
Unbilled receivables1,065 1,282 
Deferred income taxes3,689 3,921 
Other assets519 546 
Total assets$126,145 $125,466 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses$4,462 $4,326 
Accrued payroll and related expenses17,148 12,951 
Current portion of operating lease liabilities (Note 9)4,117 3,717 
Refund liabilities4,443 4,513 
Deferred revenue1,821 2,217 
Current portion of debt (Note 5) 17 
Total current liabilities31,991 27,741 
Long-term debt (Note 5)30,673 36,603 
Long-term operating lease liabilities (Note 9)6,482 7,435 
Refund liabilities64 9 
Deferred income taxes (Note 8)628 628 
Total liabilities69,838 72,416 
Commitments and contingencies (Note 7)
Shareholders’ equity (Note 2):
Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 23,561,493 shares issued and outstanding at September 30, 2020 and 23,369,433 shares issued and outstanding at December 31, 2019
236 234 
Additional paid-in capital586,876 582,404 
Accumulated deficit(529,607)(529,176)
Accumulated other comprehensive loss(1,198)(412)
Total shareholders’ equity56,307 53,050 
Total liabilities and shareholders' equity$126,145 $125,466 
See accompanying Notes to Condensed Consolidated Financial Statements.
3


PRGX GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands, except share data)
Common Stock
SharesAmountAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Shareholders' Equity
Balance at June 30, 202023,612,686 $236 $584,922 $(532,641)$(1,612)$50,905 
Net income— — — 3,034 — 3,034 
Foreign currency translation adjustments— — — — 414 414 
Issuances of common stock:
Restricted shares remitted by employees for taxes(1,052)— (5)— — (5)
Restricted stock unit settlement1,626 — — — —  
Forfeited restricted share awards(51,767)— — — —  
Stock-based compensation expense— — 1,959 — — 1,959 
Balance at September 30, 202023,561,493 $236 $586,876 $(529,607)$(1,198)$56,307 
Balance at June 30, 201923,611,403 $236 $582,982 $(524,131)$(777)$58,310 
Net loss— — — (642)— (642)
Foreign currency translation adjustments— — — — (275)(275)
Issuances of common stock:
Restricted shares remitted by employees for taxes(1,817)— (10)— — (10)
Restricted stock unit settlement1,626 — — — —  
Forfeited restricted share awards(39,574)— — — —  
Repurchase of common stock(369,088)(4)(1,980)— — (1,984)
Stock-based compensation expense— — 541 — — 541 
Balance at September 30, 201923,202,550 $232 $581,533 $(524,773)$(1,052)$55,940 

See accompanying Notes to Condensed Consolidated Financial Statements.









4


PRGX GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands, except share data)

Common Stock
SharesAmountAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Shareholders' Equity
Balance at December 31, 201923,369,433 $234 $582,404 $(529,176)$(412)$53,050 
Net loss— — — (431)— (431)
Foreign currency translation adjustments— — — — (786)(786)
Issuances of common stock:
Restricted share awards429,269 4 (4)— —  
Restricted shares remitted by employees for taxes(113,072)(1)(402)— — (403)
Restricted stock unit settlement63,147 1 (1)— —  
Forfeited restricted share awards(83,422)(1)1 — —  
Repurchase of common stock(103,862)(1)(283)— — (284)
Stock-based compensation expense— — 5,161 — — 5,161 
Balance at September 30, 202023,561,493 $236 $586,876 $(529,607)$(1,198)$56,307 
Balance at December 31, 201823,186,258 $232 $582,574 $(515,456)$(1,021)$66,329 
Net loss— — — (9,317)— (9,317)
Foreign currency translation adjustments— — — — (31)(31)
Issuances of common stock:
Restricted share awards516,955 5 (5)— —  
Restricted shares remitted by employees for taxes(101,702)(1)(759)— — (760)
Stock option exercises45,380 — 221 — — 221 
Performance-based restricted stock unit settlement203,524 2 (2)— — — 
Restricted stock unit settlement29,142 — — — —  
Forfeited restricted share awards(64,164)— — — —  
Repurchase of common stock(612,843)(6)(4,206)(4,212)
Stock-based compensation expense— — 3,710 — — 3,710 
Balance at September 30, 201923,202,550 $232 $581,533 $(524,773)$(1,052)$55,940 

See accompanying Notes to Condensed Consolidated Financial Statements
5


PRGX GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended September 30,
 20202019
Cash flows from operating activities:
Net loss$(431)$(9,317)
Adjustments to reconcile net loss to net cash provided by operating activities:
Impairment charges553  
Depreciation and amortization7,888 9,830 
Operating lease right-of-use asset expense3,100 3,363 
Amortization of deferred loan costs71 121 
Noncash interest expense205 707 
Stock-based compensation expense5,155 3,573 
Change in fair value of contingent consideration (250)
Foreign currency transaction losses on short-term intercompany balances219 1,034 
Deferred income taxes250 4 
Changes in operating assets and liabilities
Billed receivables1,760 8,796 
Unbilled receivables2,343 551 
Prepaid expenses and other current assets1,726 (980)
Operating lease liabilities(2,912)(3,264)
Other assets(30)(60)
Accounts payable and accrued expenses(1,405)(4,117)
Accrued payroll and related expenses4,216 (3,514)
Refund liabilities19 (2,437)
Deferred revenue(378)(832)
Net cash provided by operating activities22,349 3,208 
Cash flows from investing activities:
Purchases of property, equipment and software, net of disposal proceeds(8,321)(11,679)
Net cash used in investing activities(8,321)(11,679)
Cash flows from financing activities:
Repayments of credit facility(44,000)(8,000)
Proceeds from credit facility38,000 22,400 
Payment of deferred loan costs (394)
Payment of earnout liability related to business acquisitions (4,229)
Restricted stock repurchased from employees for withholding taxes(404)(760)
Repurchases of common stock(284)(4,212)
Proceeds from option exercises 221 
Net cash (used in) provided by financing activities(6,688)5,026 
Effect of exchange rates on cash and cash equivalents378 663 
Net increase (decrease) in cash, cash equivalents and restricted cash7,718 (2,782)
Cash, cash equivalents and restricted cash at beginning of period15,028 14,019 
Cash, cash equivalents and restricted cash at end of period$22,746 $11,237 
Supplemental disclosure of cash flow information:
Cash paid during the period for interest$1,014 $728 
Cash paid during the period for income taxes, net of refunds received$1,486 $2,118 

See accompanying Notes to Condensed Consolidated Financial Statements.
6

Table of Contents
PRGX GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1) 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 ("GAAP") for interim financial information and with the instructions for the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.
Except as otherwise indicated or unless the context otherwise requires, “PRGX,” “we,” “us,” “our” and the “Company” refer to PRGX Global, Inc. and its subsidiaries. For further information, refer to the Consolidated Financial Statements and the related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Significant Accounting Policies
A summary of the Company's significant accounting policies is included in Note 1 of the “Notes to Consolidated Financial Statements” contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company did not experience any significant changes during the quarter ended September 30, 2020 in any of the Critical Accounting Policies from those contained in the Company's Form 10-K for the year ended December 31, 2019. 

COVID-19
In December 2019, a novel strain of coronavirus was first identified, and in March 2020, the World Health Organization categorized COVID-19, the disease resulting from this coronavirus strain, as a pandemic. To help control the spread of the virus and protect the health and safety of our employees and customers, many of the Company's teams worldwide have been working remotely since the middle of March.
The Company evaluates the recoverability of goodwill annually in the fourth quarter of each year or sooner if events or changes in circumstances indicate that the carrying amount may exceed its fair value. The impairment test performed in the fourth quarter of 2019 indicated significant excess fair value over carrying value for the Recovery Audit Services reporting units. The Company evaluated whether there were indicators of impairment as of September 30, 2020 as a result of COVID-19 conditions including deterioration in the macro-economic environment and the volatility in our share price. While there were negative macro-economic factors, the positive evidence outweighed the negative evidence of the fair value of our reporting units more likely than not exceeding the carrying amount of those units as of September 30, 2020. Further, since the negative financial impacts on the Company from the COVID-19 pandemic have not been significant to date, COVID-19 considerations do not significantly affect the assumptions underpinning our long-term revenue and cash flow growth rates, operating models and business strategies. Therefore, the Company did not consider the COVID-19 pandemic to require an interim quantitative goodwill impairment analysis. As a result, no impairment charges for goodwill and indefinite-lived intangible assets were recorded during the three and nine months ended September 30, 2020.
The Company also evaluated its remaining assets, particularly accounts receivable. The allowance for doubtful accounts is calculated based on historical experience and various other information available. The Company also assessed incremental risks due to the COVID-19 pandemic on our customers' financial viability. The Company did not experience a significant deterioration of its accounts receivable portfolio during the quarter ended September 30, 2020. The Company will continue to monitor the collectability of its accounts receivable balances.
The Company has received an immaterial amount of COVID-19-related rent concessions for certain office space leases during the nine months ended September 30, 2020. Consistent with updated guidance from the Financial Accounting Standards Board (“FASB”) in April 2020, the Company elected to treat COVID-19-related rent concessions as variable rent. While the Company is having ongoing conversations with landlords, it does not expect significant concessions for the remainder of the year.
On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 pandemic and options to defer payroll tax payments. Based on evaluation of the CARES Act, the Company is deferring qualified payroll and other tax payments as permitted by the CARES Act.
7

Table of Contents
PRGX GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The full extent of the future impact of COVID-19 on the Company’s operations is uncertain. Such events, including a prolonged or recurring outbreak, are generally outside of our control and could have a material adverse impact on our business, operating results and financial conditions in future reporting periods.
Impact of Recently Issued Accounting Standards
A summary of the new accounting standards issued by the FASB and included in the Accounting Standards Codification ("ASC") that apply to PRGX is included below:
Adopted by the Company in Fiscal Year 2020
FASB ASU 2018-13 - In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies are required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. Certain provisions of the ASU must be applied retrospectively, while others must be applied prospectively. The Company adopted this ASU on January 1, 2020. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.
FASB ASU 2018-15 - In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this ASU prospectively on January 1, 2020. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.
Accounting Standards Not Yet Adopted
FASB ASU 2016-13 - In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those annual periods, and early adoption is permitted. The Company is currently evaluating the effect that the adoption of this standard will have on the Company's condensed consolidated financial statements.
FASB ASU 2019-12 - In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies accounting for income taxes, changes the accounting for certain income tax transactions and makes certain improvements to the codification. These amendments will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the new standard to determine the impact it will have on the Company’s condensed consolidated financial statements.
FASB ASU 2020-04 - In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. Companies may adopt this guidance at any time but no later than December 31, 2022. The Company is currently evaluating the new standard to determine the impact it will have on the Company’s condensed consolidated financial statements.





8

Table of Contents
PRGX GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(2) Net Income (Loss) Per Common Share
The following table sets forth the computations of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share data):
Three Months
Ended September 30,
Nine Months
Ended September 30,
2020201920202019
Numerator:
Net income (loss) from continuing operations$3,034 $(1,542)$(431)$(9,959)
Net income from discontinued operations$ $900 $ $642 
Denominator:
Weighted-average common shares outstanding22,695 22,770 22,597 22,715 
Effect of dilutive securities from stock-based compensation plans323    
Weighted-average diluted common shares outstanding23,018 22,770 22,597 22,715 
Basic net income (loss) per common share from continuing operations$0.13 $(0.07)$(0.02)$(0.44)
Basic net income per common share from discontinued operations 0.04  0.03 
Total basic net income (loss) per common share$0.13 $(0.03)$(0.02)$(0.41)
Diluted income (loss) per common share from continuing operations$0.13 $(0.07)$(0.02)$(0.44)
Diluted income per common share from discontinued operations 0.04  0.03 
Total diluted income (loss) per common share$0.13 $(0.03)$(0.02)$(0.41)
Anti-dilutive securities excluded from diluted net income (loss) per share calculation3,713 3,960 4,036 3,960 

(3) Stock-Based Compensation
The Company has two stock-based compensation plans under which outstanding equity awards have been granted, the 2008 Equity Incentive Plan ("2008 EIP") and the 2017 Equity Incentive Compensation Plan ("2017 EICP") (collectively, the "Plans"). No additional awards may be granted under the 2008 EIP. Awards granted outside of the Plans are referred to as inducement awards.
    During the nine months ended September 30, 2020, equity awards were granted to non-employee directors and certain key employees. The awards included restricted stock, restricted stock units, and performance-based restricted stock units ("PBUs").
Summary of Grant Activity
    The following is a summary of grant activity for the nine months ended September 30, 2020 (in thousands, except number of awards):
9

Table of Contents
PRGX GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Nine Months Ended September 30, 2020
# of Awards GrantedGrant Date Fair Value
Restricted stock429,269 $1,830 
Restricted stock units142,076 562 
PBUs659,301 2,828 
1,230,646 $5,220 

The awards granted in the nine months ended September 30, 2020 had the following terms:

398,500 shares of the restricted stock vest over three years in approximately equal annual installments and 30,769 shares of the restricted stock vest one year from grant date.
123,076 restricted stock units vest one year from grant date and 19,000 restricted stock units vest over three years in approximately equal annual installments.
The vesting of the PBUs is subject to the satisfaction of certain specified financial performance conditions for the two-year performance period ending on December 31, 2021. PBUs that vest will be settled in shares of the Company's common stock. Stock-based compensation expense for these PBUs is being recognized at the target level of financial performance, as if 100% of the awards will vest. The Company reevaluates this likelihood on a quarterly basis.

Additional Information

As of September 30, 2020, there were approximately 1.9 million shares available for future grant under the 2017 EICP.
Stock-based compensation expense for the three months ended September 30, 2020 and 2019 was $2.0 million and $0.5 million, respectively, and $5.2 million and $3.6 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in Selling, general and administrative expenses in the Company's Condensed Consolidated Statements of Operations. As of September 30, 2020, there was $7.0 million of unrecognized stock-based compensation expense related to the Company's outstanding equity awards which will be recognized over approximately 1.5 years.
10

Table of Contents
PRGX GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(4) Operating Segments and Related Information
The Company conducts its operations through the following three reportable segments:
Recovery Audit Services – Americas represents recovery audit services provided in the United States of America (“U.S.”), Canada and Latin America.
Recovery Audit Services – Europe/Asia-Pacific represents recovery audit services provided in Europe, Asia and the Pacific region.
Adjacent Services represents data transformation, spend analytics and associated advisory services.
The unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the three reportable segments is included in Corporate Support.
Discontinued Operations
There was no activity in the Company's discontinued operations segment for the three and nine months ended September 30, 2020. The following table presents the discontinued operations of the Healthcare Claims Recovery Audit ("HCRA") services business in the Consolidated Statements of Operations, for the three and nine months ended September 30, 2019 (in thousands):
Three Months Ended September 30,Nine Months
Ended September 30,
20192019
Revenue, net $ $ 
Cost of sales(907)(662)
Selling, general and administrative expense7 20 
Depreciation and amortization  
Income from discontinued operations before income taxes$900 $642 
Income tax expense  
Net income from discontinued operations$900 $642 
The following table presents the discontinued operations of the HCRA services business in the Consolidated Statements of Cash Flows, for the nine months ended September 30, 2019 (in thousands):
Nine Months Ended September 30,
2019
Net cash used in operating activities$(148)
Net cash (used in) provided by investing activities 
Net cash (used in) provided by financing activities 
Decrease in cash and cash equivalents$(148)
The Company evaluates the performance of its reportable segments based upon revenue and measures of profit or loss referred to as EBITDA and Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings from continuing operations before interest and taxes (“EBIT”), adjusted for depreciation and amortization (“EBITDA”), and then further adjusted for unusual and other significant items that management views as distorting the operating results of the various segments from period to period. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition-related charges and benefits (acquisition transaction costs, acquisition obligations classified as compensation, and fair value adjustments to acquisition-related contingent consideration), tangible and intangible asset impairment charges, certain litigation costs and litigation settlements, certain severance charges and foreign currency transaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant. The Company does not have any inter-segment revenue.
11

Table of Contents
PRGX GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Segment information for the three and nine months ended September 30, 2020 and 2019 (in thousands) is as follows:
 
Recovery
Audit
Services –
Americas
Recovery Audit
Services –
Europe/Asia-
Pacific
Adjacent
Services
Corporate
Support
Total
Three Months Ended September 30, 2020
Revenue, net $28,026 $12,651 $855 $ $41,532 
Net income from continuing operations3,034 
Income tax expense1,456 
Interest expense, net216 
EBIT$10,478 $5,648 $(348)$(11,072)$4,706 
Depreciation of property, equipment and software1,120 162 13  1,295 
Amortization of intangible assets408 43 379  830 
EBITDA$12,006 $5,853 $44 $(11,072)$6,831 
Impairment charges  553  553 
Other loss   2 2 
Foreign currency transaction (gains) losses on short-term intercompany balances(116)(735)(9)442 (418)
Transformation, severance, and other expenses 48 199  175 422 
Stock-based compensation   1,959 1,959 
Adjusted EBITDA from continuing operations$11,938 $5,317 $588 $(8,494)$9,349 
Recovery
Audit
Services –
Americas
Recovery Audit
Services –
Europe/Asia-
Pacific
Adjacent
Services
Corporate
Support
Total
Three Months Ended September 30, 2019
Revenue, net $29,987 $10,803 $1,500 $ $42,290 
Net loss from continuing operations(1,542)
Income tax expense 202 
Interest expense, net