PRGX Global, Inc. Announces Fourth Quarter and Full Year 2017 Financial Results
Date : 03/01/2018 @ 4:02PM
Source : GlobeNewswire Inc.
Stock : Prgx Global, Inc. (PRGX)
Quote : 8.5 0.55 (6.92%) @ 4:16PM
PRGX Global, Inc. Announces Fourth Quarter and Full Year 2017 Financial Results
PRG Schultz (NASDAQ:PRGX)
PRGX Global, Inc. (Nasdaq:PRGX), a global leader in Recovery Audit and Spend Analytics services, today announced its unaudited financial results for the fourth quarter and year ended December 31, 2017.
“We are pleased to report a strong finish for 2017, with fourth quarter revenue and adjusted EBITDA from continuing operations growing 17% and 41%, respectively, on a year-over-year, constant dollar basis. These results mark our sixth consecutive quarter of revenue and adjusted EBITDA growth. For the year, we grew revenue by over 14% and adjusted EBITDA from continuing operations by over 25% on a year-over-year, constant dollar basis, with each service line and region showing revenue growth on a constant dollar basis. Cash flow from operations in 2017 exceeded $13 million, an increase of over 30% compared to the prior year,” said Ron Stewart, president and chief executive officer.
“Four years ago, we laid out a strategy to refocus on our core recovery audit business and invest in people, processes and technology to drive growth and extend our client value proposition. Our 2017 performance confirms that we are making significant progress in our transformation journey, delivering meaningful, sustainable and more predictable growth,” continued Stewart.
“Looking ahead, we believe our ability to generate meaningful operating cash flow, coupled with our increasing financial strength and flexibility, positions us to continue growing in 2018 and beyond. For 2018, we are projecting continued growth, including year-over-year revenue growth in the range of 8% to 10% and adjusted EBITDA growth in the range of 17% to 22%,” concluded Stewart.
Consolidated Results from Continuing Operations for the Three Months Ended December 31, 2017
Consolidated revenue from continuing operations for the fourth quarter of 2017 was $47.1 million, compared to $39.2 million for the same period last year, an increase of 20.2%. Fourth quarter 2017 revenue from the Recovery Audit Services segments was $46.4 million compared to $38.1 million in the prior year, and from the Adjacent Services segment was $0.7 million compared to $1.1 million in 2016. On a constant dollar basis adjusted for changes in foreign exchange rates, revenue increased by 17.0% in the fourth quarter of 2017, compared to the same period in the prior year. On a constant dollar basis, revenue from the Recovery Audit Services segments increased 18.7% in the fourth quarter of 2017 compared to the same period in 2016.
Total cost of revenue from continuing operations for the fourth quarter of 2017 was $26.7 million, or 56.8% of revenue, compared to $23.9 million, or 60.9% of revenue, in the same period last year, representing a 4.1 % improvement as a percentage of revenue.
SG&A expenses from continuing operations for the fourth quarter of 2017 were $12.8 million, compared to $11.0 million in the prior year period. The increase in SG&A expenses was primarily attributable to operating costs associated with the Cost & Compliance Associates (“C&CA”) acquired business that was not in the prior year and incentive-based compensation expense.
Consolidated net income from continuing operations for the fourth quarter of 2017 was $5.7 million, or $0.26 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per basic and diluted share, for the same period in 2016. The year-over-year change was primarily driven by the increase in revenue and improvement in cost of revenue and a $2.3 million acquisition-related income item resulting from an earn-out adjustment.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) from continuing operations for the fourth quarter of 2017 was $9.3 million, or 19.8% of revenue, compared to Adjusted EBITDA of $6.3 million, or 16.2% of revenue, in the fourth quarter of 2016, an increase of $3.0 million or 46.8%. Schedule 3 attached to this press release provides a reconciliation of net income (loss) to each of EBIT (Earnings Before Interest and Taxes), EBITDA and Adjusted EBITDA.
Consolidated Results from Continuing Operations for the Year Ended December 31, 2017
Consolidated revenue from continuing operations for the year ended December 31, 2017 was $161.6 million, compared to $140.8 million in 2016, an increase of 14.8%. On a constant dollar basis adjusted for changes in foreign exchange rates, revenue increased by 14.1% in the year ended December 31, 2017, compared to the prior year. On a constant dollar basis, revenue from the Recovery Audit Services segments increased 14.2% in the year ended December 31, 2017 compared to 2016. Revenue from the Adjacent Services segment increased 11.5% on a constant dollar basis for the year ended December 31, 2017 compared to the prior year.
Total cost of revenue from continuing operations for the year ended December 31, 2017 was $102.1 million, or 63.1% of revenue, compared to $91.3 million, or 64.8% of revenue, in 2016, an improvement of 1.7% as a percentage of revenue.
SG&A expenses from continuing operations for the year ended December 31, 2017 were $46.9 million, compared to $39.4 million in the prior year. The increase in SG&A expenses was primarily attributable to operating costs associated with the Lavante and C&CA acquired businesses that were not in the prior year and an increase in our stock-based compensation. The increase was partially offset by other cost reductions.
Consolidated net income from continuing operations for the year ended December 31, 2017 was $4.6 million, or $0.21 per basic and diluted share, compared to net income of $2.2 million, or $0.10 per basic and diluted share, for the prior year.
Adjusted EBITDA from continuing operations for the year ended December 31, 2017 was $21.3 million, or 13.2% of revenue, compared to Adjusted EBITDA of $16.6 million, or 11.8% of revenue, for the prior year, an increase of $4.8 million or 28.6%. Schedule 3 attached to this press release provides a reconciliation of net income (loss) to each of EBIT, EBITDA and Adjusted EBITDA.
Cash Flow and Liquidity
Net cash provided by operating activities for the fourth quarter of 2017 was $10.0 million, compared to $3.9 million in the fourth quarter of the prior year, and $13.5 million for the year ended December 31, 2017 compared to $10.1 million in in the prior year.
At December 31, 2017, the Company had unrestricted cash and cash equivalents of $18.8 million, and borrowings of $13.6 million against its $35.0 million revolving credit facility.
Fourth Quarter Earnings Call
As previously announced, management will hold a conference call later today at 5:00 PM (Eastern time) to discuss the Company’s fourth quarter and full year 2017 financial results. To access the conference call, listeners in the U.S. and Canada should dial (877) 755-7423 at least 5 minutes prior to the start of the conference. Listeners outside the U.S. and Canada should dial (678) 894-3069. To be admitted to the call, listeners should use passcode 4470009.
This teleconference will also be audiocast on the Internet at www.prgx.com (click on "Events & Presentations" under "Investors"). A replay of the audiocast will be available at the same location on www.prgx.com beginning approximately two hours after the conclusion of the live audiocast, extending through June 30, 2018. Please note that the Internet audiocast is “listen-only.” Microsoft Windows Media Player is required to access the live audiocast and the replay and can be downloaded from www.microsoft.com/en-us/downloads.
About PRGX
PRGX Global, Inc. is a global leader in Recovery Audit and Spend Analytics services. With over 1,500 employees, the Company serves clients in more than 30 countries and provides its services to 75% of the top 20 global retailers and over 30% of the top 50 companies in the Fortune 500. PRGX delivers more than $1 billion in cash flow improvement for its clients each year. The creator of the recovery audit industry more than 40 years ago, PRGX continues to innovate through technology and expanded service offerings. In addition to Recovery Audit, PRGX provides Contract Compliance, Spend Analytics and Supplier Information Management services to improve clients' financial performance and manage risk. For additional information on PRGX, please visit www.prgx.com
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