ATLANTA, April 14, 2020 (GLOBE NEWSWIRE) — PRGX Global, Inc. (Nasdaq: PRGX), a global leader in Recovery Audit and Spend Analytics services, today provided the following update regarding the business impact of COVID-19 from Ron Stewart, the Company’s President and Chief Executive Officer:
Over the last several weeks the world has witnessed heightened uncertainty with the spread of COVID-19 and the impact it has had on people, communities and businesses globally. In the face of this challenge, PRGX’s operating model has proven resilient. Prior to the implementation of most shelter-in-place restrictions around the world, we transitioned our global work force to working from home. This was accomplished with little business disruption or declines in productivity. Our priorities remain the health of our employees, serving our clients by generating incremental working capital when they need it most, and ensuring the continuity and financial stability of PRGX’s business.
To date, we have seen minimal impact from the COVID-19 pandemic and our transition to employees working from home on claims generation and our ability to turn those claims to revenue. While we are carefully monitoring business activity on a daily basis, we believe the strength and diversity of our client base across the retail and commercial sectors will continue to support revenue stability near- and intermediate-term. Today, over 75% of PRGX’s revenue is derived from clients in the e-commerce, grocery, drug retail, pharmaceutical, consumer packed goods and telecommunications industries. We have relatively few clients operating in industries impacted most severely by the COVID-19 pandemic, such as airlines, hospitality and specialty retail.
While we plan to announce our first quarter results on April 28, 2020, we can share that we are expecting first quarter revenue of at least $36 million. It is also worth noting that during the quarter, the U.S. dollar strengthened against the currencies of almost all of our international operations, which results in a headwind on our quarterly results as reported in U.S. dollars. During the quarter, we also continued our ongoing efforts to improve our cost structure and profitability, which we began in mid-2019. We expect the results of these actions will become increasingly visible in our results throughout the year. Given our healthy cash balance, existing credit facility and the ability of our business to generate free cash flow, we believe we have the resources necessary to continue to operate our business effectively, invest in our technology infrastructure and platforms, and further strengthen our position in the source-to-pay market.
PRGX helps companies spot value in their source-to-pay processes that other sophisticated solutions didn’t get to before. Having identified more than 300 common points of leakage, we help companies reach wider, dig deeper, and act faster to get more value out of their source-to-pay data. We pioneered this industry nearly 50 years ago, and today we help clients in more than 30 countries take back $1.2 billion in annual cash flow. It’s why 75% of top global retailers and a third of the largest companies in the Fortune 500 rely on us. For additional information on PRGX, please visit www.prgx.com.
In addition to historical information, this press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include both implied and express statements regarding the duration and impact of the COVID-19 pandemic on the Company’s business plans, objectives and operating results, the Company’s overall financial condition and growth prospects, and the Company’s expectations regarding its 2020 financial performance, including its results for the first quarter of 2020. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from the historical results or from any results expressed or implied by such forward-looking statements. Risks that could affect the Company’s future performance include uncertainty regarding the duration and scope of the COVID-19 pandemic and the impact of the pandemic on the Company’s business plans, objectives and operating results, revenue that does not meet expectations or justify costs incurred, the Company’s ability to develop material sources of new revenue in addition to revenue from its core recovery audit services, changes in the market for the Company’s services, the Company’s ability to retain and attract qualified personnel, the Company’s ability to execute on its profitability improvement efforts, the Company’s ability to integrate recent and future acquisitions, uncertainty in the credit markets, the Company’s ability to maintain compliance with its financial covenants, client bankruptcies, loss of major clients, and other risks generally applicable to the Company’s business. For a discussion of other risk factors that may impact the Company’s business, please see the Company’s filings with the Securities and Exchange Commission. The Company disclaims any obligation or duty to update or modify these forward-looking statements.
CONTACT: PRGX Global, Inc.