PRGX Global, Inc. Announces Preliminary First Quarter 2013 Financial Results
and Provides Outlook for HCRA Services for Remainder of 2013
First Quarter 2013 Earnings Conference Call Planned for Tuesday, April 30th at
8:30 a.m. ET
ATLANTA, April 18, 2013 (GLOBE NEWSWIRE) -- PRGX Global, Inc. (Nasdaq:PRGX),
the world's leading provider of recovery audit services and the pioneer in
Profit Discovery™, today announced certain information relevant to its
financial performance in 2013, including preliminary financial results for the
quarter ended March 31, 2013 and information pertaining to its Healthcare
Claims Recovery Audit (HCRA) service line.
Preliminary Financial Results for Quarter Ended March 31, 2013
*As indicated during the fourth quarter and full year 2012 earnings call,
HCRA results (reported as part of the Company's New Services segment) were
negatively impacted in the first quarter of 2013 due to delays in claims
processing resulting from changes to Medicare claims processing systems
and a temporary drop in findings rates in the first half of the quarter.
*Recovery Audit (RA) Services – Europe/Asia Pacific (EAP) continued to
suffer in the first quarter from macro-economic issues and the loss and
bankruptcy (administration) of several clients in Europe.
*Both RA-EAP and RA-Americas were negatively impacted by delays of large
claims at a few clients and certain other audit delays. Revenue related to
these claims and delays is expected to be recognized over the balance of
*Profit Optimization (PO) revenue grew in the first quarter of 2013
compared to the first quarter of 2012 as the Company's PO services
continue to gain momentum.
*For the first quarter of 2013, the Company expects revenue to be in the
range of 12% to 14% lower than revenue in the first quarter of 2012, net
loss per share to be $(0.01) to ($0.03), and adjusted EBITDA to be in the
range of 35% to 45% lower than the same period last year.
The Company's expected results for the first quarter of 2013 are preliminary
and subject to completion of the Company's quarterly closing review
PRGX delivered its proposal to the Centers for Medicare and Medicaid Services
("CMS") for the new Medicare Part A/B Recovery Audit Contractor (RAC) program
in early April. The exact decision timeline is not known, but decision
announcements could come in the second quarter.
Preliminary information regarding the transition from the current RAC
contracts to the new RAC contracts suggests that there may not be any auditing
under the current RAC program for much of the second half of 2013. As a
result, subject to further RAC program or timeline changes, the Company
believes there will be a significant (approximately $12 million) reduction in
its expected revenue from this service line in 2013, with 2013 HCRA revenue
now expected to be relatively flat compared to 2012. Additionally, if PRGX is
awarded one of the five new RAC contracts, the Company will incur significant
costs by continuing to carry HCRA personnel without revenue during the
"ramp-up" of the new RAC program, although the ramp-up period is not expected
to be as long as the ramp-up period at the beginning of the current RAC
contracts. Conversely, if the Company is not awarded a new RAC contract, while
the transition is still expected to have a negative impact on 2013 HCRA
financial results, the near-term impact on EBITDA is expected to be less than
in the event of a new RAC contract award.
The final financial impact of the RAC program transitions and new RAC contract
award decisions are subject to CMS timelines and other RAC program changes.
The Company will continue to monitor this situation carefully and update
shareholders as appropriate.
First Quarter 2013 Earnings Conference Call
PRGX expects to release its financial results for the first quarter of 2013 on
Monday, April 29, 2013 after the market closes. Management plans to hold a
conference call at 8:30 a.m. (Eastern Time) on Tuesday, April 30, 2013 to
discuss those results and answer questions.
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 33409158.
About PRGX Global, Inc.
Headquartered in Atlanta, Georgia, PRGX Global, Inc. is the world's leading
provider of recovery audit services. With over 1,700 employees, the Company
operates and serves clients in more than 30 countries and provides its
services to over 75% of the top 30 global retailers. PRGX is also pioneering
Profit Discovery, a unique combination of audit, analytics and advisory
services that improves client financial performance. For additional
information, please visit PRGX at 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 Company's anticipated financial results for
the first quarter of 2013 and the outcome of the re-bid of Medicare RAC
program contracts and associated transitions and resulting anticipated impacts
on the Company's financial results. 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 revenues that do not
meet expectations or justify costs incurred, the Company's ability to develop
material sources of new revenue in addition to revenues 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, changes to
Medicare and Medicaid recovery audit contractor programs and the outcome of
the re-bid of the Medicare RAC program contracts, 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, including its Form 10-K filed on March
13, 2013. The Company disclaims any obligation or duty to update or modify
these forward-looking statements.
CONTACT: PRGX Global, Inc.
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