ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Georgia
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58-2213805
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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600 Galleria Parkway
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30339-5986
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Suite 100
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(Zip Code)
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Atlanta, Georgia
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(Address of principal executive offices)
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Title of each class
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Name of each exchange on which registered
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Common Stock, No Par Value
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The NASDAQ Stock Market LLC (The Nasdaq Global Select Market)
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¨
Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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Page No.
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Part I
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Part II
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Part III
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Part IV
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•
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our ability to successfully execute our recovery audit growth strategy;
|
•
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our continued dependence on our largest clients for significant revenue;
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•
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the use of internal recovery audit groups by our clients, reducing the amount of recoveries available to us;
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•
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commoditization of our services and the effects of rate reductions;
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•
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the significant control that our clients have over assertion or acceptance of recovery audit claims against their suppliers and the corresponding impact on our revenue;
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•
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changes to Medicare and Medicaid recovery audit contractor (“RAC”) programs administered by the Centers for Medicare and Medicaid Services (“CMS”) and other government agencies, and our role in the national Medicare RAC program, the results of operations of which are included in our Healthcare Claims Recovery Audit Services segment;
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•
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changes to revenue as a result of our decision to withdraw from the Medicare RAC program rebid process;
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•
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revenue that does not meet expectations or justify costs incurred;
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•
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our ability to develop material sources of new revenue in addition to revenue from our core accounts payable recovery audit services;
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•
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changes in the market for our services;
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•
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client and vendor bankruptcies and financial difficulties;
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•
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our ability to retain and attract qualified personnel and effectively manage our global workforce;
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•
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our inability to protect and maintain the competitive advantage of our proprietary technology and intellectual property rights;
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•
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our reliance on operations outside the U.S. for a significant portion of our revenue;
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•
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our ability to effectively manage foreign currency fluctuations;
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•
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the highly competitive environments in which our recovery audit services and Adjacent Services businesses operate and the resulting pricing pressure on those businesses;
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•
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our ability to integrate recent and future acquisitions;
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•
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our ability to realize operational cost savings and the transformation severance and related expenses we may incur to generate these savings;
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•
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uncertainty in the global credit markets;
|
•
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our ability to maintain compliance with the financial and non-financial covenants in our financing arrangements;
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•
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our tax positions and other factors that could affect our effective income tax rate or our ability to use our existing deferred tax assets;
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•
|
a cyber-security incident involving the misappropriation, loss or unauthorized disclosure or use of confidential information of our clients;
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•
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effects of changes in accounting policies, standards, guidelines or principles; or
|
•
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terrorist acts, acts of war and other factors over which we have little or no control.
|
•
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Audit acceleration. Our clients are constantly seeking to accelerate the audit process to deliver audit results closer to the time of the transaction to increase recovery yields, provide a greater opportunity to address process errors, and reduce supplier abrasion. We believe that our deep and broad business process experience across thousands of audits, together with new technology initiatives will put us in a unique position to achieve superior acceleration results for our clients.
|
•
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Global audit programs. Our global programs take advantage of our operations that span over 30 countries to provide true global audit capabilities to multi-national companies. This unique perspective gives our clients visibility to their business practice variations around the world and creates value for our clients by allowing them to see their data in new ways.
|
•
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Continue our focus on consistent delivery excellence through standard processes, methodologies and tools across all of our geographic territories;
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•
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Accelerate the implementation of our global shared service delivery model centered on our regional and global shared service centers; and
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•
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Leverage state of the market technologies to drive faster processing and deeper analytics with the massive amount of data we receive from our clients. Technologies enabling large data manipulation and unstructured data analysis are evolving at a very rapid rate. We plan to remain at the forefront of these technologies and maintain the most secure and trusted infrastructure environment in our industry.
|
•
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Full-service accounts payable recovery audit firms. We believe that only one company other than PRGX offers a full suite of U.S. and international recovery audit services;
|
•
|
A large number of smaller accounts payable recovery firms which have a limited client base and which use less sophisticated tools to mine disbursement claim categories at low contingency rates. These firms are most common in the U.S. market. Competition in most international markets, if any, typically comes from small niche providers;
|
•
|
Firms, including one of our two substantial competitors, that offer a hybrid of audit software tools and training for use by internal audit departments, or general accounts payable process improvement enablers; and
|
•
|
Firms with specialized skills focused on recovery audit services for discrete sectors such as sales and use tax, telecom or real estate.
|
•
|
greater exposure to the possibility of economic instability, the disruption of operations from labor and political disturbances, expropriation or war in the international markets we serve;
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•
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difficulties in staffing and managing foreign operations and in collecting accounts receivable;
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•
|
fluctuations in currency exchange rates, particularly weaknesses in the British pound, the euro, the Canadian dollar, the Mexican peso, the Brazilian real, the Australian dollar, the Indian rupee and other currencies of countries in which we transact business, which could result in currency translations that materially reduce our revenue and earnings;
|
•
|
costs associated with adapting our services to our foreign clients’ needs;
|
•
|
unexpected changes in regulatory requirements and laws;
|
•
|
expenses and legal restrictions associated with transferring earnings from our foreign subsidiaries to us;
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•
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difficulties in complying with a variety of foreign laws and regulations, such as those relating to data content retention, privacy and employment as well as U.S. laws affecting operations outside of the United States;
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•
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business interruptions due to widespread disease, potential terrorist activities, or other catastrophes;
|
•
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reduced or limited protection of our intellectual property rights;
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•
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longer accounts receivable cycles; and
|
•
|
competition with large or state-owned enterprises or regulations that effectively limit our operations and favor local competitors.
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•
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we will incur additional amortization expense over the estimated useful lives of certain of the intangible assets acquired in connection with acquisitions during such estimated useful lives;
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•
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we will incur additional depreciation expense as a result of recording purchased tangible assets; and
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•
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to the extent the value of goodwill or intangible assets becomes impaired, we may be required to incur material charges relating to the impairment of those assets.
|
•
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a classified Board of Directors;
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•
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the requirement that our shareholders may only remove directors for cause;
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•
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specified requirements for calling special meetings of shareholders;
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•
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the ability of the Board of Directors to consider the interests of various constituencies, including our employees, clients and creditors and the local community, in making decisions; and
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•
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the ability of the Board of Directors to issue shares of preferred stock with such designations, powers, preferences and rights as it determines, without any further vote or action by our shareholders.
|
2014 Calendar Quarter
|
|
High
|
|
Low
|
||||
1st Quarter
|
|
$
|
7.42
|
|
|
$
|
5.82
|
|
2nd Quarter
|
|
6.90
|
|
|
5.95
|
|
||
3rd Quarter
|
|
6.89
|
|
|
5.50
|
|
||
4th Quarter
|
|
6.05
|
|
|
3.97
|
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||
|
|
|
|
|
|
|
||
2013 Calendar Quarter
|
|
High
|
|
Low
|
||||
1st Quarter
|
|
$
|
7.30
|
|
|
$
|
5.84
|
|
2nd Quarter
|
|
7.01
|
|
|
4.80
|
|
||
3rd Quarter
|
|
6.73
|
|
|
5.35
|
|
||
4th Quarter
|
|
7.76
|
|
|
5.89
|
|
2014
|
|
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
|
||||||
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|
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(millions of dollars)
|
||||||
October 1 - October 31
|
|
—
|
|
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$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
November 1 - November 30
|
|
122,080
|
|
|
$
|
5.43
|
|
|
122,080
|
|
|
$
|
—
|
|
December 1 - December 31
|
|
365,785
|
|
|
$
|
5.53
|
|
|
365,785
|
|
|
$
|
—
|
|
|
|
487,865
|
|
|
$
|
5.50
|
|
|
487,865
|
|
|
$
|
17.3
|
|
(a)
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All shares purchased during the quarter were purchased as part of the Company's stock repurchase program.
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(b)
|
On February 21, 2014, our Board of Directors authorized a stock repurchase program under which we could 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 could 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 December 31, 2014, the Company repurchased a total of 3,605,142 shares under this program for an aggregate purchase price of $22.7 million.
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.
|
Cumulative Total Return
|
||||||||||||||||||
|
|
12/09
|
|
12/10
|
|
12/11
|
|
12/12
|
|
12/13
|
|
12/14
|
||||||
PRGX Global, Inc.
|
|
100.00
|
|
|
107.11
|
|
|
100.68
|
|
|
109.14
|
|
|
113.71
|
|
|
96.79
|
|
NASDAQ Composite
|
|
100.00
|
|
|
117.61
|
|
|
118.70
|
|
|
139.00
|
|
|
196.83
|
|
|
223.74
|
|
RDG Technology Composite
|
|
100.00
|
|
|
111.01
|
|
|
110.85
|
|
|
126.07
|
|
|
167.16
|
|
|
193.22
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Statements of Operations Data:
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Revenue
|
|
$
|
164,192
|
|
|
$
|
195,216
|
|
|
$
|
208,503
|
|
|
$
|
203,117
|
|
|
$
|
184,081
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
115,959
|
|
|
126,102
|
|
|
137,351
|
|
|
139,431
|
|
|
128,482
|
|
|||||
Selling, general and administrative expenses
|
|
40,788
|
|
|
49,200
|
|
|
49,566
|
|
|
47,153
|
|
|
38,322
|
|
|||||
Depreciation of property and equipment
|
|
6,216
|
|
|
8,231
|
|
|
7,084
|
|
|
5,401
|
|
|
4,903
|
|
|||||
Amortization of intangible assets
|
|
3,531
|
|
|
4,997
|
|
|
7,224
|
|
|
4,991
|
|
|
4,131
|
|
|||||
Impairment charges
|
|
—
|
|
|
4,207
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
|
166,494
|
|
|
192,737
|
|
|
201,225
|
|
|
196,976
|
|
|
175,838
|
|
|||||
Operating income (loss)
|
|
(2,302
|
)
|
|
2,479
|
|
|
7,278
|
|
|
6,141
|
|
|
8,243
|
|
|||||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
2,003
|
|
|
(13
|
)
|
|
(377
|
)
|
|
417
|
|
|
422
|
|
|||||
Interest expense (income), net
|
|
(77
|
)
|
|
(77
|
)
|
|
966
|
|
|
1,616
|
|
|
1,305
|
|
|||||
Other (income) loss
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on debt extinguishment and financial restructuring
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,381
|
|
|||||
Income (loss) before income taxes
|
|
(4,285
|
)
|
|
2,569
|
|
|
6,689
|
|
|
4,108
|
|
|
5,135
|
|
|||||
Income tax expense
(1)
|
|
3,241
|
|
|
2,755
|
|
|
1,297
|
|
|
1,292
|
|
|
1,882
|
|
|||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
|
$
|
2,816
|
|
|
$
|
3,253
|
|
Basic earnings (loss) per common share
|
|
$
|
(0.26
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
|
$
|
0.11
|
|
|
$
|
0.14
|
|
Diluted earnings (loss) per common share
|
|
$
|
(0.26
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
|
$
|
0.11
|
|
|
$
|
0.13
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Balance Sheet Data:
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Cash and cash equivalents
|
|
$
|
25,735
|
|
|
$
|
43,700
|
|
|
$
|
37,806
|
|
|
$
|
20,337
|
|
|
$
|
18,448
|
|
Working capital
|
|
36,006
|
|
|
50,506
|
|
|
37,445
|
|
|
16,319
|
|
|
17,678
|
|
|||||
Total assets
|
|
102,782
|
|
|
132,829
|
|
|
143,586
|
|
|
126,413
|
|
|
106,321
|
|
|||||
Long-term debt, excluding current installments
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|
6,000
|
|
|
9,000
|
|
|||||
Total shareholders' equity
|
|
$
|
70,986
|
|
|
$
|
93,828
|
|
|
$
|
84,652
|
|
|
$
|
59,090
|
|
|
$
|
48,843
|
|
(1)
|
The taxes recorded for 2014 were primarily related to the recording of a valuation allowance on the future use of net losses in our UK operations. The high effective tax rate relative to the U.S. federal statutory rate in 2013 is due to taxes on income of foreign subsidiaries with no benefit recognized for losses incurred in the U.S. due to the Company having a deferred tax asset valuation allowance. The low effective tax rate in 2012 is attributable to recognition of certain previously unrecognized tax benefits. See
Note 1 (i)
and
Note 7
of “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K.
|
•
|
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.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
106,533
|
|
|
$
|
118,649
|
|
|
$
|
121,638
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
44,319
|
|
|
46,436
|
|
|
53,783
|
|
|||
Adjacent Services
|
|
10,700
|
|
|
13,183
|
|
|
14,990
|
|
|||
Healthcare Claims Recovery Audit Services
|
|
2,640
|
|
|
16,948
|
|
|
18,092
|
|
|||
Total
|
|
$
|
164,192
|
|
|
$
|
195,216
|
|
|
$
|
208,503
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
68,163
|
|
|
$
|
65,977
|
|
|
$
|
69,341
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
31,103
|
|
|
34,945
|
|
|
39,540
|
|
|||
Adjacent Services
|
|
11,624
|
|
|
11,931
|
|
|
14,277
|
|
|||
Healthcare Claims Recovery Audit Services
|
|
5,069
|
|
|
13,249
|
|
|
14,193
|
|
|||
Total
|
|
$
|
115,959
|
|
|
$
|
126,102
|
|
|
$
|
137,351
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
10,211
|
|
|
$
|
14,140
|
|
|
$
|
14,746
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
6,829
|
|
|
5,884
|
|
|
7,155
|
|
|||
Adjacent Services
|
|
2,124
|
|
|
3,312
|
|
|
2,532
|
|
|||
Healthcare Claims Recovery Audit Services
|
|
2,207
|
|
|
3,057
|
|
|
2,965
|
|
|||
Subtotal for reportable segments
|
|
21,371
|
|
|
26,393
|
|
|
27,398
|
|
|||
Corporate Support
|
|
19,417
|
|
|
22,807
|
|
|
22,168
|
|
|||
Total
|
|
$
|
40,788
|
|
|
$
|
49,200
|
|
|
$
|
49,566
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
4,711
|
|
|
$
|
5,617
|
|
|
$
|
4,651
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
592
|
|
|
514
|
|
|
322
|
|
|||
Adjacent Services
|
|
722
|
|
|
723
|
|
|
770
|
|
|||
Healthcare Claims Recovery Audit Services
|
|
191
|
|
|
1,377
|
|
|
1,341
|
|
|||
Total
|
|
$
|
6,216
|
|
|
$
|
8,231
|
|
|
$
|
7,084
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
2,002
|
|
|
$
|
2,792
|
|
|
$
|
4,355
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
1,195
|
|
|
1,508
|
|
|
2,062
|
|
|||
Adjacent Services
|
|
334
|
|
|
697
|
|
|
807
|
|
|||
Healthcare Claims Recovery Audit Services
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
3,531
|
|
|
$
|
4,997
|
|
|
$
|
7,224
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
—
|
|
|
$
|
2,702
|
|
|
$
|
—
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Adjacent Services
|
|
—
|
|
|
71
|
|
|
—
|
|
|||
Healthcare Claims Recovery Audit Services
|
|
—
|
|
|
1,434
|
|
|
—
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
4,207
|
|
|
$
|
—
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
Income tax expense
|
|
3,241
|
|
|
2,755
|
|
|
1,297
|
|
|||
Interest expense (income), net
|
|
(77
|
)
|
|
(77
|
)
|
|
966
|
|
|||
EBIT
|
|
(4,362
|
)
|
|
2,492
|
|
|
7,655
|
|
|||
Depreciation of property and equipment
|
|
6,216
|
|
|
8,231
|
|
|
7,084
|
|
|||
Amortization of intangible assets
|
|
3,531
|
|
|
4,997
|
|
|
7,224
|
|
|||
EBITDA
|
|
5,385
|
|
|
15,720
|
|
|
21,963
|
|
|||
Impairment charges
|
|
—
|
|
|
4,207
|
|
|
—
|
|
|||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
2,003
|
|
|
(13
|
)
|
|
(377
|
)
|
|||
Acquisition-related charges (benefits)
|
|
249
|
|
|
602
|
|
|
(231
|
)
|
|||
Transformation severance and related expenses
|
|
4,050
|
|
|
2,544
|
|
|
2,107
|
|
|||
Other (income) loss
|
|
57
|
|
|
—
|
|
|
—
|
|
|||
Wage claim costs
|
|
—
|
|
|
—
|
|
|
984
|
|
|||
Stock-based compensation
|
|
4,532
|
|
|
6,294
|
|
|
6,321
|
|
|||
Adjusted EBITDA
|
|
$
|
16,276
|
|
|
$
|
29,354
|
|
|
$
|
30,767
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Recovery Audit Services – Americas
|
|
$
|
29,507
|
|
|
$
|
39,954
|
|
|
$
|
38,620
|
|
Recovery Audit Services – Europe/Asia-Pacific
|
|
7,672
|
|
|
5,842
|
|
|
7,632
|
|
|||
Adjacent Services
|
|
(2,381
|
)
|
|
(1,792
|
)
|
|
(1,072
|
)
|
|||
Healthcare Claims Recovery Audit Services
|
|
(4,226
|
)
|
|
729
|
|
|
1,370
|
|
|||
Subtotal for reportable segments
|
|
30,572
|
|
|
44,733
|
|
|
46,550
|
|
|||
Corporate Support
|
|
(14,296
|
)
|
|
(15,379
|
)
|
|
(15,783
|
)
|
|||
Total
|
|
$
|
16,276
|
|
|
$
|
29,354
|
|
|
$
|
30,767
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
Adjustments for certain non-cash items
|
|
18,009
|
|
|
23,886
|
|
|
19,667
|
|
|||
|
|
10,483
|
|
|
23,700
|
|
|
25,059
|
|
|||
Changes in operating assets and liabilities
|
|
(436
|
)
|
|
(5,276
|
)
|
|
(6,216
|
)
|
|||
Net cash provided by operating activities
|
|
$
|
10,047
|
|
|
$
|
18,424
|
|
|
$
|
18,843
|
|
|
|
Payments Due by Period (in thousands)
|
||||||||||||||||||
Contractual obligations
|
|
Total
|
|
Less
Than
1 Year
|
|
1-3 Years
|
|
3-5
Years
|
|
More
Than
5 Years
|
||||||||||
Interest and commitment fee on Secured Credit Facility
(1)
|
|
$
|
149
|
|
|
$
|
50
|
|
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease obligations
|
|
16,477
|
|
|
4,186
|
|
|
5,799
|
|
|
3,221
|
|
|
3,271
|
|
|||||
Payments to Messrs. Cook and Toma
(2)
|
|
780
|
|
|
62
|
|
|
129
|
|
|
137
|
|
|
452
|
|
|||||
Severance
|
|
2,161
|
|
|
2,139
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
19,567
|
|
|
$
|
6,437
|
|
|
$
|
6,049
|
|
|
$
|
3,358
|
|
|
$
|
3,723
|
|
(1)
|
Represents the estimated commitment fee and interest due on the Secured Credit Facility using the interest rate as of
December 31, 2014
and assuming no borrowings on the revolver. See
Note 5
of the Notes to Consolidated Financial Statements for additional information regarding the Secured Credit Facility.
|
(2)
|
Represents estimated reimbursements payable for healthcare costs incurred by these former executives.
|
•
|
Revenue Recognition.
We generally recognize revenue for a contractually specified percentage of amounts recovered when we have determined that our clients have received economic value (generally through credits taken against existing accounts payable due to the involved vendors or refund checks received from those vendors), and when we have met the following criteria: (a) persuasive evidence of an arrangement exists; (b) services have been rendered; (c) the fee billed to the client is fixed or determinable; and (d) collectability is reasonably assured.
|
•
|
Unbilled Receivables & Refund Liabilities.
Unbilled receivables relate to claims for which our clients have received economic value but for which we contractually have agreed not to invoice the clients. These unbilled receivables arise when a portion of our fee is deferred at the time of the initial invoice. At a later date (which can be up to a year after the original invoice, or a year after completion of the audit period), we invoice the unbilled receivable amount. Notwithstanding the deferred due date, our clients acknowledge that we have earned this unbilled receivable at the time of the original invoice, but have agreed to defer billing the client for the related services. Unbilled receivables also arise in our Healthcare Claims Recovery Audit services as we generally cannot invoice the prime contractors for whom we operate as a subcontractor under the Medicare RAC program until cash is collected by the prime contractors.
|
•
|
Goodwill, Other Intangible Assets, Long-lived Assets, and Impairment Charges.
Goodwill represents the excess of the purchase price over the estimated fair market value of net identifiable assets of acquired businesses. Intangible assets are assets that lack physical substance. We evaluate the recoverability of goodwill and other intangible assets in accordance with ASC 350,
Intangibles—Goodwill and Other
, 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. This evaluation includes a preliminary assessment of qualitative factors to determine if it is necessary to perform a two-step impairment testing process. The first step identifies potential impairments by comparing the fair value of the reporting unit with its carrying value, including goodwill. If the calculated fair value of a reporting unit exceeds the carrying value, goodwill is not impaired, and the second step is not necessary. If the carrying value of a reporting unit exceeds the fair value, the second step calculates the possible impairment loss by comparing the implied fair value of goodwill with the carrying value. If the fair value is less than the carrying value, we would record an impairment charge.
|
•
|
Income Taxes.
Our effective tax rate is based on historical and anticipated future taxable income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining the effective tax rate and in evaluating our tax positions. Tax regulations require items to be included in the tax returns at different times than the items are reflected in the financial statements. As a result, our effective tax rate reflected in our Consolidated Financial Statements included in Item 8 of this Form 10-K is different than that reported in our tax returns. Some of these differences are permanent, such as expenses that are not deductible on our tax returns, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit in our Consolidated Statements of Operations. We establish valuation allowances to reduce net deferred tax assets to the amounts that we believe are more likely than not to be realized. We adjust these valuation allowances in light of changing facts and circumstances. Deferred tax liabilities generally represent tax expense recognized in our consolidated financial statements for which payment has been deferred, or expense for which a deduction has already been taken on our tax returns but has not yet been recognized as an expense in our consolidated financial statements.
|
•
|
Stock-Based Compensation.
We account for awards of equity instruments issued to employees and directors under the fair value method of accounting and recognize such amounts in our Consolidated Statements of Operations. We measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense using the straight-line method over the service period over which we expect the awards to vest. We recognize compensation costs for awards with performance conditions based on the probable outcome of the performance conditions. We accrue compensation cost if we believe it is probable that the performance condition(s) will be achieved and do not accrue compensation cost if we believe it is not probable that the performance condition(s) will be achieved. In the event that it becomes probable that performance condition(s) will no longer be achieved, we reverse all of the previously recognized compensation expense in the period such a determination is made.
|
|
Page No.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Revenue
|
|
$
|
164,192
|
|
|
$
|
195,216
|
|
|
$
|
208,503
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Cost of revenue
|
|
115,959
|
|
|
126,102
|
|
|
137,351
|
|
|||
Selling, general and administrative expenses
|
|
40,788
|
|
|
49,200
|
|
|
49,566
|
|
|||
Depreciation of property and equipment
|
|
6,216
|
|
|
8,231
|
|
|
7,084
|
|
|||
Amortization of intangible assets
|
|
3,531
|
|
|
4,997
|
|
|
7,224
|
|
|||
Impairment charges
|
|
—
|
|
|
4,207
|
|
|
—
|
|
|||
Total operating expenses
|
|
166,494
|
|
|
192,737
|
|
|
201,225
|
|
|||
Operating income (loss)
|
|
(2,302
|
)
|
|
2,479
|
|
|
7,278
|
|
|||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
2,003
|
|
|
(13
|
)
|
|
(377
|
)
|
|||
Interest expense
|
|
(351
|
)
|
|
(138
|
)
|
|
(1,116
|
)
|
|||
Interest income
|
|
428
|
|
|
215
|
|
|
150
|
|
|||
Other (income) loss
|
|
57
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) before income taxes
|
|
(4,285
|
)
|
|
2,569
|
|
|
6,689
|
|
|||
Income tax expense (
Note 7
)
|
|
3,241
|
|
|
2,755
|
|
|
1,297
|
|
|||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per common share (
Note 3
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per common share
(Note 3)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
Weighted-average common shares outstanding
(Note 3)
:
|
|
|
|
|
|
|
||||||
Basic
|
|
28,707
|
|
|
29,169
|
|
|
25,566
|
|
|||
Diluted
|
|
28,707
|
|
|
29,169
|
|
|
26,137
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2011
|
||||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
Foreign currency translation adjustments
|
|
(551
|
)
|
|
(1,414
|
)
|
|
363
|
|
|||
Comprehensive income (loss)
|
|
$
|
(8,077
|
)
|
|
$
|
(1,600
|
)
|
|
$
|
5,755
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
ASSETS
|
||||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
25,735
|
|
|
$
|
43,700
|
|
Restricted cash
|
|
53
|
|
|
57
|
|
||
Receivables:
|
|
|
|
|
||||
Contract receivables, less allowances of $2,243 in 2014 and $1,996 in 2013:
|
|
|
|
|
||||
Billed
|
|
32,373
|
|
|
28,175
|
|
||
Unbilled
|
|
2,809
|
|
|
9,904
|
|
||
|
|
35,182
|
|
|
38,079
|
|
||
Employee advances and miscellaneous receivables, less allowances of $692 in 2014 and $402 in 2013
|
|
1,993
|
|
|
2,242
|
|
||
Total receivables
|
|
37,175
|
|
|
40,321
|
|
||
Prepaid expenses and other current assets
|
|
3,416
|
|
|
3,910
|
|
||
Deferred income taxes
(Note 7)
|
|
5
|
|
|
7
|
|
||
Total current assets
|
|
66,384
|
|
|
87,995
|
|
||
|
|
|
|
|
||||
Property and equipment:
|
|
|
|
|
||||
Computer and other equipment
|
|
28,864
|
|
|
28,810
|
|
||
Furniture and fixtures
|
|
2,926
|
|
|
3,050
|
|
||
Leasehold improvements
|
|
3,450
|
|
|
3,401
|
|
||
Software
|
|
20,934
|
|
|
23,535
|
|
||
|
|
56,174
|
|
|
58,796
|
|
||
Less accumulated depreciation and amortization
|
|
(43,954
|
)
|
|
(44,802
|
)
|
||
Property and equipment, net
|
|
12,220
|
|
|
13,994
|
|
||
|
|
|
|
|
||||
Goodwill
(Note 4)
|
|
13,036
|
|
|
13,686
|
|
||
Intangible assets, less accumulated amortization of $33,973 in 2014 and $32,717 in 2013
|
|
9,439
|
|
|
13,582
|
|
||
Unbilled receivables
|
|
1,196
|
|
|
1,379
|
|
||
Deferred income taxes
(Note 7)
|
|
36
|
|
|
1,701
|
|
||
Other assets
|
|
471
|
|
|
492
|
|
||
Total assets
|
|
$
|
102,782
|
|
|
$
|
132,829
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
7,397
|
|
|
$
|
10,809
|
|
Accrued payroll and related expenses
|
|
15,415
|
|
|
15,415
|
|
||
Refund liabilities
|
|
5,393
|
|
|
6,597
|
|
||
Deferred revenue
|
|
2,173
|
|
|
1,512
|
|
||
Business acquisition obligations
(Note 12)
|
|
—
|
|
|
3,156
|
|
||
Total current liabilities
|
|
30,378
|
|
|
37,489
|
|
||
|
|
|
|
|
||||
Refund liabilities
|
|
857
|
|
|
950
|
|
||
Other long-term liabilities
|
|
561
|
|
|
562
|
|
||
Total liabilities
|
|
31,796
|
|
|
39,001
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
(Notes 5, 6, 9 and 10)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Shareholders’ equity
(Notes 9 and 11):
|
|
|
|
|
||||
Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 26,762,861 shares issued and outstanding at December 31, 2014 and 29,367,439 shares issued and outstanding at December 31, 2013
|
|
268
|
|
|
294
|
|
||
Additional paid-in capital
|
|
590,067
|
|
|
604,806
|
|
||
Accumulated deficit
|
|
(520,912
|
)
|
|
(513,386
|
)
|
||
Accumulated other comprehensive income
|
|
1,563
|
|
|
2,114
|
|
||
Total shareholders’ equity
|
|
70,986
|
|
|
93,828
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
102,782
|
|
|
$
|
132,829
|
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income
|
|
Total Shareholders' Equity
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2011
|
|
25,108,754
|
|
|
$
|
251
|
|
|
$
|
574,266
|
|
|
$
|
(518,592
|
)
|
|
$
|
3,165
|
|
|
$
|
59,090
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,392
|
|
|
—
|
|
|
5,392
|
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
363
|
|
|
363
|
|
|||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Restricted share awards
|
|
500,128
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares issued for stock offering
|
|
2,500,000
|
|
|
25
|
|
|
14,657
|
|
|
—
|
|
|
—
|
|
|
14,682
|
|
|||||
Restricted shares remitted by employees for taxes
|
|
(161,514
|
)
|
|
(2
|
)
|
|
(1,603
|
)
|
|
—
|
|
|
—
|
|
|
(1,605
|
)
|
|||||
Stock option exercises
|
|
141,849
|
|
|
2
|
|
|
557
|
|
|
—
|
|
|
—
|
|
|
559
|
|
|||||
Forfeited restricted share awards
|
|
(196,085
|
)
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
6,171
|
|
|
—
|
|
|
—
|
|
|
6,171
|
|
|||||
Balance at December 31, 2012
|
|
27,893,132
|
|
|
279
|
|
|
594,045
|
|
|
(513,200
|
)
|
|
3,528
|
|
|
84,652
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
—
|
|
|
(186
|
)
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,414
|
)
|
|
(1,414
|
)
|
|||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Restricted share awards
|
|
665,629
|
|
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares issued for acquisition
|
|
217,155
|
|
|
2
|
|
|
1,470
|
|
|
—
|
|
|
—
|
|
|
1,472
|
|
|||||
Shares issued for stock offering
|
|
687,385
|
|
|
7
|
|
|
4,111
|
|
|
—
|
|
|
—
|
|
|
4,118
|
|
|||||
Restricted shares remitted by employees for taxes
|
|
(259,116
|
)
|
|
(3
|
)
|
|
(1,754
|
)
|
|
—
|
|
|
—
|
|
|
(1,757
|
)
|
|||||
Stock option exercises
|
|
202,159
|
|
|
2
|
|
|
914
|
|
|
—
|
|
|
—
|
|
|
916
|
|
|||||
2006 MIP Performance Unit settlements
|
|
52,912
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Forfeited restricted share awards
|
|
(91,817
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
6,027
|
|
|
—
|
|
|
—
|
|
|
6,027
|
|
|||||
Balance at December 31, 2013
|
|
29,367,439
|
|
|
294
|
|
|
604,806
|
|
|
(513,386
|
)
|
|
2,114
|
|
|
93,828
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,526
|
)
|
|
—
|
|
|
(7,526
|
)
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(551
|
)
|
|
(551
|
)
|
|||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Restricted share awards
|
|
220,442
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares issued for acquisition
|
|
187,620
|
|
|
2
|
|
|
1,277
|
|
|
—
|
|
|
—
|
|
|
1,279
|
|
|||||
Restricted shares remitted by employees for taxes
|
|
(72,834
|
)
|
|
(1
|
)
|
|
(567
|
)
|
|
—
|
|
|
—
|
|
|
(568
|
)
|
|||||
Stock option exercises
|
|
716,780
|
|
|
7
|
|
|
2,816
|
|
|
—
|
|
|
—
|
|
|
2,823
|
|
|||||
2006 MIP Performance Unit settlements
|
|
16,526
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Forfeited restricted share awards
|
|
(67,970
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchases of common stock
|
|
(3,605,142
|
)
|
|
(36
|
)
|
|
(22,649
|
)
|
|
—
|
|
|
—
|
|
|
(22,685
|
)
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
4,386
|
|
|
—
|
|
|
—
|
|
|
4,386
|
|
|||||
Balance at December 31, 2014
|
|
26,762,861
|
|
|
$
|
268
|
|
|
$
|
590,067
|
|
|
$
|
(520,912
|
)
|
|
$
|
1,563
|
|
|
$
|
70,986
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Impairment charges
|
|
—
|
|
|
4,207
|
|
|
—
|
|
|||
Depreciation and amortization
|
|
9,747
|
|
|
13,228
|
|
|
14,308
|
|
|||
Amortization of deferred loan costs
|
|
104
|
|
|
193
|
|
|
183
|
|
|||
Stock-based compensation expense
|
|
4,532
|
|
|
6,294
|
|
|
6,321
|
|
|||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
2,003
|
|
|
(13
|
)
|
|
(377
|
)
|
|||
Deferred income taxes
|
|
1,566
|
|
|
(23
|
)
|
|
(799
|
)
|
|||
Other loss from sale of assets
|
|
57
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of business acquisitions:
|
|
|
|
|
|
|
||||||
Restricted cash
|
|
4
|
|
|
8
|
|
|
(1
|
)
|
|||
Billed receivables
|
|
(6,351
|
)
|
|
4,206
|
|
|
(1,598
|
)
|
|||
Unbilled receivables
|
|
7,278
|
|
|
2,609
|
|
|
(2,179
|
)
|
|||
Prepaid expenses and other current assets
|
|
1,575
|
|
|
(1,326
|
)
|
|
693
|
|
|||
Other assets
|
|
5
|
|
|
17
|
|
|
(179
|
)
|
|||
Accounts payable and accrued expenses
|
|
(3,432
|
)
|
|
(3,512
|
)
|
|
(1,125
|
)
|
|||
Accrued payroll and related expenses
|
|
536
|
|
|
(5,720
|
)
|
|
(1,258
|
)
|
|||
Refund liabilities
|
|
(1,297
|
)
|
|
(591
|
)
|
|
392
|
|
|||
Deferred revenue
|
|
720
|
|
|
(72
|
)
|
|
(157
|
)
|
|||
Noncurrent compensation obligations
|
|
414
|
|
|
329
|
|
|
345
|
|
|||
Other long-term liabilities
|
|
112
|
|
|
(1,224
|
)
|
|
(1,118
|
)
|
|||
Net cash provided by operating activities
|
|
10,047
|
|
|
18,424
|
|
|
18,843
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Business (acquisition) divestiture, net of cash
|
|
1,100
|
|
|
—
|
|
|
(1,542
|
)
|
|||
Purchases of property and equipment, net of disposal proceeds
|
|
(4,709
|
)
|
|
(6,875
|
)
|
|
(7,931
|
)
|
|||
Net cash used in investing activities
|
|
(3,609
|
)
|
|
(6,875
|
)
|
|
(9,473
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Repayments of long-term debt
|
|
—
|
|
|
(6,000
|
)
|
|
(3,000
|
)
|
|||
Payments for deferred loan costs
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|||
Payments of deferred acquisition consideration
|
|
(2,208
|
)
|
|
(1,902
|
)
|
|
(2,837
|
)
|
|||
Net proceeds from issuance of common stock
|
|
—
|
|
|
4,118
|
|
|
14,682
|
|
|||
Repurchase of common stock
|
|
(22,685
|
)
|
|
—
|
|
|
—
|
|
|||
Restricted stock repurchased from employees for withholding taxes
|
|
(568
|
)
|
|
(1,757
|
)
|
|
(1,605
|
)
|
|||
Proceeds from option exercises
|
|
2,823
|
|
|
916
|
|
|
559
|
|
|||
Net cash (used in) provided by financing activities
|
|
(22,742
|
)
|
|
(4,625
|
)
|
|
7,799
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
(1,661
|
)
|
|
(1,030
|
)
|
|
300
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(17,965
|
)
|
|
5,894
|
|
|
17,469
|
|
|||
Cash and cash equivalents at beginning of period
|
|
43,700
|
|
|
37,806
|
|
|
20,337
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
25,735
|
|
|
$
|
43,700
|
|
|
$
|
37,806
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
|
$
|
132
|
|
|
$
|
567
|
|
|
$
|
340
|
|
Cash paid during the period for income taxes, net of refunds received
|
|
$
|
3,892
|
|
|
$
|
3,245
|
|
|
$
|
2,730
|
|
Deferred and contingent business acquisition consideration
(Note 12)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
189
|
|
•
|
retailers such as discount, department, specialty, grocery and drug stores, and wholesalers who sell to these retailers;
|
•
|
business enterprises other than retailers such as manufacturers, financial services firms, and pharmaceutical companies;
|
•
|
healthcare payers, both private sector health insurance companies and state and federal government payers such as the Centers for Medicare and Medicaid Services (“CMS”); and
|
•
|
federal and state government agencies.
|
|
|
Years Ended December 31,
|
||||
|
|
2014
|
|
2013
|
|
2012
|
Risk-free interest rates
|
|
0.88% - 1.79%
|
|
0.37% - 1.55%
|
|
0.33% - 0.83%
|
Dividend yields
|
|
—%
|
|
—%
|
|
—%
|
Volatility factor of expected market price
|
|
.370 - .390
|
|
.446 - .675
|
|
.530 - .710
|
Weighted-average expected term of option
|
|
3.5 - 4.5 years
|
|
3.7 - 5 years
|
|
3.8 - 5 years
|
Forfeiture rate
|
|
—%
|
|
—%
|
|
—%
|
|
|
Recovery
Audit
Services –
Americas
|
|
Recovery Audit
Services –
Europe/Asia-
Pacific
|
|
Adjacent
Services
|
|
Healthcare Claims Recovery Audit Services
|
|
Corporate
Support
|
|
Total
|
||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
106,533
|
|
|
$
|
44,319
|
|
|
$
|
10,700
|
|
|
$
|
2,640
|
|
|
$
|
—
|
|
|
$
|
164,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(7,526
|
)
|
||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
3,241
|
|
|||||||||||
Interest income, net
|
|
|
|
|
|
|
|
|
|
|
|
(77
|
)
|
|||||||||||
EBIT
|
|
$
|
21,066
|
|
|
$
|
2,772
|
|
|
$
|
(4,161
|
)
|
|
$
|
(4,827
|
)
|
|
$
|
(19,212
|
)
|
|
(4,362
|
)
|
|
Depreciation of property and equipment
|
|
4,711
|
|
|
592
|
|
|
722
|
|
|
191
|
|
|
—
|
|
|
6,216
|
|
||||||
Amortization of intangible assets
|
|
2,002
|
|
|
1,195
|
|
|
334
|
|
|
—
|
|
|
—
|
|
|
3,531
|
|
||||||
EBITDA
|
|
27,779
|
|
|
4,559
|
|
|
(3,105
|
)
|
|
(4,636
|
)
|
|
(19,212
|
)
|
|
5,385
|
|
||||||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
380
|
|
|
1,828
|
|
|
—
|
|
|
—
|
|
|
(205
|
)
|
|
2,003
|
|
||||||
Acquisition-related charges
|
|
—
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
249
|
|
||||||
Transformation severance and related expenses
|
|
1,348
|
|
|
1,285
|
|
|
418
|
|
|
410
|
|
|
589
|
|
|
4,050
|
|
||||||
Other (income) loss
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,532
|
|
|
4,532
|
|
||||||
Adjusted EBITDA
|
|
$
|
29,507
|
|
|
$
|
7,672
|
|
|
$
|
(2,381
|
)
|
|
$
|
(4,226
|
)
|
|
$
|
(14,296
|
)
|
|
$
|
16,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
$
|
3,930
|
|
|
$
|
651
|
|
|
$
|
123
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
4,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allocated assets
|
|
$
|
50,252
|
|
|
$
|
18,556
|
|
|
$
|
4,596
|
|
|
$
|
820
|
|
|
$
|
—
|
|
|
$
|
74,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unallocated assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,735
|
|
|
25,735
|
|
||||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
||||||
Deferred income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
||||||
Prepaid expenses and other assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,729
|
|
|
2,729
|
|
||||||
Total assets
|
|
$
|
50,252
|
|
|
$
|
18,556
|
|
|
$
|
4,596
|
|
|
$
|
820
|
|
|
$
|
28,558
|
|
|
$
|
102,782
|
|
|
|
Recovery
Audit
Services –
Americas
|
|
Recovery Audit
Services –
Europe/Asia-
Pacific
|
|
Adjacent
Services
|
|
Healthcare Claims Recovery Audit Services
|
|
Corporate
Support
|
|
Total
|
||||||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
118,649
|
|
|
$
|
46,436
|
|
|
$
|
13,183
|
|
|
$
|
16,948
|
|
|
$
|
—
|
|
|
$
|
195,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(186
|
)
|
||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
2,755
|
|
|||||||||||
Interest income, net
|
|
|
|
|
|
|
|
|
|
|
|
(77
|
)
|
|||||||||||
EBIT
|
|
$
|
27,094
|
|
|
$
|
3,901
|
|
|
$
|
(3,480
|
)
|
|
$
|
(2,240
|
)
|
|
$
|
(22,783
|
)
|
|
2,492
|
|
|
Depreciation of property and equipment
|
|
5,617
|
|
|
514
|
|
|
652
|
|
|
1,448
|
|
|
—
|
|
|
8,231
|
|
||||||
Amortization of intangible assets
|
|
2,792
|
|
|
1,508
|
|
|
697
|
|
|
—
|
|
|
—
|
|
|
4,997
|
|
||||||
EBITDA
|
|
35,503
|
|
|
5,923
|
|
|
(2,131
|
)
|
|
(792
|
)
|
|
(22,783
|
)
|
|
15,720
|
|
||||||
Impairment charges
|
|
2,702
|
|
|
—
|
|
|
71
|
|
|
1,434
|
|
|
—
|
|
|
4,207
|
|
||||||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
327
|
|
|
(316
|
)
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(13
|
)
|
||||||
Acquisition-related charges (benefits)
|
|
1,315
|
|
|
(900
|
)
|
|
187
|
|
|
—
|
|
|
—
|
|
|
602
|
|
||||||
Transformation severance and related expenses
|
|
107
|
|
|
1,135
|
|
|
81
|
|
|
87
|
|
|
1,134
|
|
|
2,544
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,294
|
|
|
6,294
|
|
||||||
Adjusted EBITDA
|
|
$
|
39,954
|
|
|
$
|
5,842
|
|
|
$
|
(1,792
|
)
|
|
$
|
729
|
|
|
$
|
(15,379
|
)
|
|
$
|
29,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
$
|
5,292
|
|
|
$
|
781
|
|
|
$
|
376
|
|
|
$
|
426
|
|
|
$
|
—
|
|
|
$
|
6,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allocated assets
|
|
$
|
55,978
|
|
|
$
|
16,706
|
|
|
$
|
4,993
|
|
|
$
|
7,433
|
|
|
$
|
—
|
|
|
$
|
85,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unallocated assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,700
|
|
|
43,700
|
|
||||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
57
|
|
||||||
Deferred income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,708
|
|
|
1,708
|
|
||||||
Prepaid expenses and other assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,254
|
|
|
2,254
|
|
||||||
Total assets
|
|
$
|
55,978
|
|
|
$
|
16,706
|
|
|
$
|
4,993
|
|
|
$
|
7,433
|
|
|
$
|
47,719
|
|
|
$
|
132,829
|
|
|
|
Recovery
Audit
Services –
Americas
|
|
Recovery Audit
Services –
Europe/Asia-
Pacific
|
|
Adjacent
Services
|
|
Healthcare Claims Recovery Audit Services
|
|
Corporate
Support
|
|
Total
|
||||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
121,638
|
|
|
$
|
53,783
|
|
|
$
|
14,990
|
|
|
$
|
18,092
|
|
|
$
|
—
|
|
|
$
|
208,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,392
|
|
||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
1,297
|
|
|||||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
966
|
|
|||||||||||
EBIT
|
|
$
|
28,589
|
|
|
$
|
5,035
|
|
|
$
|
(3,396
|
)
|
|
$
|
(407
|
)
|
|
$
|
(22,166
|
)
|
|
7,655
|
|
|
Depreciation of property and equipment
|
|
4,651
|
|
|
322
|
|
|
770
|
|
|
1,341
|
|
|
—
|
|
|
7,084
|
|
||||||
Amortization of intangible assets
|
|
4,355
|
|
|
2,062
|
|
|
807
|
|
|
—
|
|
|
—
|
|
|
7,224
|
|
||||||
EBITDA
|
|
37,595
|
|
|
7,419
|
|
|
(1,819
|
)
|
|
934
|
|
|
(22,166
|
)
|
|
21,963
|
|
||||||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
(44
|
)
|
|
(331
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(377
|
)
|
||||||
Acquisition-related charges (benefits)
|
|
(1
|
)
|
|
(612
|
)
|
|
382
|
|
|
—
|
|
|
—
|
|
|
(231
|
)
|
||||||
Transformation severance and related expenses
|
|
493
|
|
|
1,156
|
|
|
365
|
|
|
29
|
|
|
64
|
|
|
2,107
|
|
||||||
Wage claim costs
|
|
577
|
|
|
—
|
|
|
—
|
|
|
407
|
|
|
—
|
|
|
984
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,321
|
|
|
6,321
|
|
||||||
Adjusted EBITDA
|
|
$
|
38,620
|
|
|
$
|
7,632
|
|
|
$
|
(1,072
|
)
|
|
$
|
1,370
|
|
|
$
|
(15,783
|
)
|
|
$
|
30,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
$
|
5,699
|
|
|
$
|
846
|
|
|
$
|
369
|
|
|
$
|
1,017
|
|
|
$
|
—
|
|
|
$
|
7,931
|
|
|
|
December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
||||
United States
|
|
$
|
29,392
|
|
|
$
|
33,686
|
|
|
United Kingdom
|
|
4,416
|
|
|
6,690
|
|
|
||
All Other
|
|
1,359
|
|
|
1,378
|
|
|
||
|
|
$
|
35,167
|
|
|
$
|
41,754
|
|
|
|
|
Years Ended December 31,
|
||||||||||
Basic earnings (loss) per common share:
|
|
2014
|
|
2013
|
|
2012
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
|
28,707
|
|
|
29,169
|
|
|
25,566
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per common share
|
|
$
|
(0.26
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
|
|
Years Ended December 31,
|
||||||||||
Diluted earnings (loss) per common share:
|
|
2014
|
|
2013
|
|
2012
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(7,526
|
)
|
|
$
|
(186
|
)
|
|
$
|
5,392
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
|
28,707
|
|
|
29,169
|
|
|
25,566
|
|
|||
Incremental shares from stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
571
|
|
|||
Denominator for diluted earnings per common share
|
|
28,707
|
|
|
29,169
|
|
|
26,137
|
|
|||
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per common share
|
|
$
|
(0.26
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
|
|
Recovery
Audit
Services –
Americas
|
|
Recovery Audit
Services –
Europe/Asia-
Pacific
|
|
Adjacent
Services
|
|
Total
|
||||||||
Balance, January 1, 2013
|
|
$
|
12,177
|
|
|
$
|
896
|
|
|
$
|
596
|
|
|
$
|
13,669
|
|
Foreign currency translation
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Balance, December 31, 2013
|
|
12,177
|
|
|
913
|
|
|
596
|
|
|
13,686
|
|
||||
Goodwill disposed in connection with business divestiture
|
|
—
|
|
|
—
|
|
|
(596
|
)
|
|
(596
|
)
|
||||
Foreign currency translation
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
||||
Balance, December 31, 2014
|
|
$
|
12,177
|
|
|
$
|
859
|
|
|
$
|
—
|
|
|
$
|
13,036
|
|
|
|
Customer
Relationships
|
|
Trademarks
|
|
Non-
compete
Agreements
|
|
Trade
Names
|
|
Total
|
||||||||||
Gross carrying amount:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, January 1, 2013
|
|
$
|
39,665
|
|
|
$
|
1,081
|
|
|
$
|
2,508
|
|
|
$
|
2,865
|
|
|
$
|
46,119
|
|
FX adjustments and other
|
|
150
|
|
|
9
|
|
|
21
|
|
|
—
|
|
|
180
|
|
|||||
Balance, December 31, 2013
|
|
39,815
|
|
|
1,090
|
|
|
2,529
|
|
|
2,865
|
|
|
46,299
|
|
|||||
Disposition of TJG assets
|
|
(829
|
)
|
|
—
|
|
|
(808
|
)
|
|
(665
|
)
|
|
(2,302
|
)
|
|||||
FX adjustments and other
|
|
(490
|
)
|
|
(31
|
)
|
|
(64
|
)
|
|
—
|
|
|
(585
|
)
|
|||||
Balance, December 31, 2014
|
|
$
|
38,496
|
|
|
$
|
1,059
|
|
|
$
|
1,657
|
|
|
$
|
2,200
|
|
|
$
|
43,412
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, January 1, 2013
|
|
$
|
(23,655
|
)
|
|
$
|
(473
|
)
|
|
$
|
(1,565
|
)
|
|
$
|
(2,027
|
)
|
|
$
|
(27,720
|
)
|
Amortization expense
|
|
(3,355
|
)
|
|
(215
|
)
|
|
(552
|
)
|
|
(680
|
)
|
|
(4,802
|
)
|
|||||
FX adjustments and other
|
|
(158
|
)
|
|
(12
|
)
|
|
(25
|
)
|
|
—
|
|
|
(195
|
)
|
|||||
Balance, December 31, 2013
|
|
(27,168
|
)
|
|
(700
|
)
|
|
(2,142
|
)
|
|
(2,707
|
)
|
|
(32,717
|
)
|
|||||
Amortization expense
|
|
(3,122
|
)
|
|
(197
|
)
|
|
(137
|
)
|
|
(75
|
)
|
|
(3,531
|
)
|
|||||
Disposition of TJG assets
|
|
371
|
|
|
—
|
|
|
808
|
|
|
582
|
|
|
1,761
|
|
|||||
FX adjustments and other
|
|
423
|
|
|
28
|
|
|
63
|
|
|
—
|
|
|
514
|
|
|||||
Balance, December 31, 2014
|
|
$
|
(29,496
|
)
|
|
$
|
(869
|
)
|
|
$
|
(1,408
|
)
|
|
$
|
(2,200
|
)
|
|
$
|
(33,973
|
)
|
Net carrying amount:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, December 31, 2013
|
|
$
|
12,647
|
|
|
$
|
390
|
|
|
$
|
387
|
|
|
$
|
158
|
|
|
$
|
13,582
|
|
Balance, December 31, 2014
|
|
$
|
9,000
|
|
|
$
|
190
|
|
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
9,439
|
|
Estimated useful life (years)
|
|
6-20 years
|
|
|
6 years
|
|
|
1-5 years
|
|
|
4-5 years
|
|
|
|
Year Ending December 31,
|
|
Gross
|
|
Sublease Income
|
|
Net
|
||||||
2015
|
|
$
|
4,186
|
|
|
$
|
(49
|
)
|
|
$
|
4,137
|
|
2016
|
|
3,305
|
|
|
(32
|
)
|
|
3,273
|
|
|||
2017
|
|
2,494
|
|
|
(16
|
)
|
|
2,478
|
|
|||
2018
|
|
1,638
|
|
|
—
|
|
|
1,638
|
|
|||
2019
|
|
1,583
|
|
|
—
|
|
|
1,583
|
|
|||
Thereafter
|
|
3,271
|
|
|
—
|
|
|
3,271
|
|
|||
Total payments
|
|
$
|
16,477
|
|
|
$
|
(97
|
)
|
|
$
|
16,380
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Statutory federal income tax rate
|
|
$
|
(1,457
|
)
|
|
$
|
873
|
|
|
$
|
2,274
|
|
State income taxes, net of federal effect
|
|
(189
|
)
|
|
(657
|
)
|
|
24
|
|
|||
Change in deferred tax asset valuation allowance
|
|
3,735
|
|
|
(142
|
)
|
|
(1,883
|
)
|
|||
Foreign taxes in excess of U.S. statutory rate
|
|
714
|
|
|
1,784
|
|
|
486
|
|
|||
Compensation deduction limitation
|
|
381
|
|
|
820
|
|
|
265
|
|
|||
Other, net
|
|
57
|
|
|
77
|
|
|
131
|
|
|||
Total
|
|
$
|
3,241
|
|
|
$
|
2,755
|
|
|
$
|
1,297
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Deferred income tax assets:
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
1,712
|
|
|
$
|
1,864
|
|
Accrued payroll and related expenses
|
|
2,530
|
|
|
1,933
|
|
||
Stock-based compensation expense
|
|
10,226
|
|
|
9,811
|
|
||
Depreciation of property and equipment
|
|
5,480
|
|
|
5,836
|
|
||
Non-compete agreements
|
|
1
|
|
|
8
|
|
||
Unbilled receivables and refund liabilities
|
|
904
|
|
|
—
|
|
||
Operating loss carry-forwards of foreign subsidiary
|
|
1,920
|
|
|
1,690
|
|
||
Federal operating loss carry-forwards
|
|
30,669
|
|
|
31,003
|
|
||
Intangible assets
|
|
—
|
|
|
865
|
|
||
State operating loss carry-forwards
|
|
2,671
|
|
|
2,925
|
|
||
Other
|
|
1,930
|
|
|
2,165
|
|
||
Gross deferred tax assets
|
|
58,043
|
|
|
58,100
|
|
||
Less valuation allowance
|
|
52,002
|
|
|
48,453
|
|
||
Gross deferred tax assets net of valuation allowance
|
|
6,041
|
|
|
9,647
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Intangible assets
|
|
3,049
|
|
|
3,970
|
|
||
Unbilled receivables and refund liabilities
|
|
—
|
|
|
1,765
|
|
||
Capitalized software
|
|
1,834
|
|
|
984
|
|
||
Other
|
|
1,117
|
|
|
1,220
|
|
||
Gross deferred tax liabilities
|
|
6,000
|
|
|
7,939
|
|
||
Net deferred tax assets
|
|
$
|
41
|
|
|
$
|
1,708
|
|
|
|
Unrecognized Tax Benefits
|
|
Accrued Interest and Penalties
|
||||
Balance at January 1, 2012
|
|
$
|
2,649
|
|
|
$
|
2,218
|
|
Additions based on tax positions related to the current year
|
|
—
|
|
|
—
|
|
||
Additions based on tax positions related to the prior years
|
|
333
|
|
|
456
|
|
||
Decreases based on tax positions related to the prior years
|
|
$
|
(785
|
)
|
|
$
|
(1,214
|
)
|
Balance at December 31, 2013
|
|
$
|
2,197
|
|
|
$
|
1,460
|
|
Additions based on tax positions related to the current year
|
|
—
|
|
|
—
|
|
||
Additions based on tax positions related to the prior years
|
|
—
|
|
|
119
|
|
||
Decreases based on payments made during the year
|
|
(932
|
)
|
|
(385
|
)
|
||
Decreases based on tax positions related to the prior years
|
|
(541
|
)
|
|
(934
|
)
|
||
Balance at December 31, 2014
|
|
$
|
724
|
|
|
$
|
260
|
|
Additions based on tax positions related to the current year
|
|
—
|
|
|
—
|
|
||
Additions based on tax positions related to the prior years
|
|
—
|
|
|
33
|
|
||
Decreases based on payments made during the year
|
|
—
|
|
|
—
|
|
||
Decreases based on tax positions related to the prior years
|
|
(47
|
)
|
|
(73
|
)
|
||
Balance at December 31, 2014
|
|
$
|
677
|
|
|
$
|
220
|
|
Grantee
Type
|
|
# of
Options
Granted
|
|
Vesting Period
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average Grant
Date Fair Value
|
|||||
2014
|
|
|
|
|
|
|
|
|
|||||
Director group
|
|
51,276
|
|
|
1 year or less
|
|
$
|
6.45
|
|
|
$
|
1.89
|
|
Employee group
(1)
|
|
1,480,000
|
|
|
3 years
|
|
$
|
6.99
|
|
|
$
|
1.81
|
|
Employee inducement
(2)
|
|
270,000
|
|
|
3 years
|
|
$
|
6.64
|
|
|
$
|
1.71
|
|
|
|
|
|
|
|
|
|
|
|||||
2013
|
|
|
|
|
|
|
|
|
|||||
Director group
|
|
75,490
|
|
|
1 year or less
|
|
$
|
5.67
|
|
|
$
|
2.00
|
|
Director group
|
|
17,092
|
|
|
3 years
|
|
$
|
6.83
|
|
|
$
|
3.76
|
|
Employee group
|
|
549,875
|
|
|
3 years
|
|
$
|
5.75
|
|
|
$
|
2.48
|
|
Employee inducement
(3)
|
|
20,000
|
|
|
3 years
|
|
$
|
7.14
|
|
|
$
|
3.81
|
|
|
|
|
|
|
|
|
|
|
|||||
2012
|
|
|
|
|
|
|
|
|
|||||
Director group
|
|
56,261
|
|
|
1 year or less
|
|
$
|
7.55
|
|
|
$
|
3.89
|
|
Director group
|
|
8,546
|
|
|
3 years
|
|
$
|
7.72
|
|
|
$
|
4.25
|
|
Employee group
|
|
597,250
|
|
|
3 years
|
|
$
|
7.54
|
|
|
$
|
4.12
|
|
Employee inducement
(4)
|
|
45,000
|
|
|
3 years
|
|
$
|
8.54
|
|
|
$
|
4.58
|
|
(1)
|
The weighted average exercise price for these options is calculated based on an exercise price of
$6.36
for the options that vest 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.
|
(2)
|
The Company granted non-qualified stock options outside its existing stock-based compensation plans in the third quarter of 2014 to
two
executives in connection with the executives joining the Company.
|
(3)
|
The Company granted non-qualified performance-based stock options outside its existing stock-based compensation plans in the first quarter of 2013 to
one
employee in connection with the employee joining the Company.
|
(4)
|
The Company granted non-qualified stock options outside its existing stock-based compensation plans in the third quarter of 2012 to
one
employee in connection with their joining the company. These options were forfeited in 2014.
|
Grantee
Type
|
|
# of Shares
Granted
|
|
Vesting Period
|
|
Weighted
Average Grant
Date Fair Value
|
|||
2014
|
|
|
|
|
|
|
|||
Director group
|
|
51,276
|
|
|
1 year or less
|
|
$
|
6.45
|
|
Director group
|
|
—
|
|
|
3 years
|
|
$
|
—
|
|
Employee group
|
|
120,000
|
|
|
3 years
|
|
$
|
6.36
|
|
Employee inducement
(1)
|
|
70,000
|
|
|
3 years
|
|
$
|
6.04
|
|
|
|
|
|
|
|
|
|||
2013
|
|
|
|
|
|
|
|||
Director group
|
|
75,490
|
|
|
1 year or less
|
|
$
|
5.67
|
|
Director group
|
|
17,092
|
|
|
3 years
|
|
$
|
6.83
|
|
Employee group
|
|
599,875
|
|
|
3 years
|
|
$
|
5.82
|
|
Employee inducement
(2)
|
|
20,000
|
|
|
3 years
|
|
$
|
7.14
|
|
|
|
|
|
|
|
|
|||
2012
|
|
|
|
|
|
|
|||
Director group
|
|
56,261
|
|
|
1 year or less
|
|
$
|
7.55
|
|
Director group
|
|
8,546
|
|
|
3 years
|
|
$
|
7.72
|
|
Employee group
|
|
426,286
|
|
|
3 years
|
|
$
|
7.55
|
|
Employee inducement
(3)
|
|
45,000
|
|
|
3 years
|
|
$
|
8.54
|
|
(1)
|
The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the third quarter of 2014 to
two
executives in connection with the executives joining the Company.
|
(2)
|
The Company granted nonvested performance-based stock awards (restricted stock) outside its existing stock-based compensation plans in the first quarter of 2013 to
one
employee in connection with the employee joining the Company.
|
(3)
|
The Company granted nonvested stock awards (restricted stock units) outside its existing stock-based compensation plans in the third quarter of 2012 to
one
employee in connection with the employee joining the company. These restricted stock unit awards were forfeited in 2014.
|
Options
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
(Per Share)
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
($ 000’s)
|
|||||
Outstanding at January 1, 2013
|
|
3,035,420
|
|
|
$
|
6.49
|
|
|
4.12 years
|
|
$
|
3,558
|
|
Granted
|
|
1,801,276
|
|
|
6.92
|
|
|
|
|
|
|||
Exercised
|
|
(716,780
|
)
|
|
3.94
|
|
|
|
|
$
|
1,737
|
|
|
Forfeited
|
|
(585,640
|
)
|
|
7.55
|
|
|
|
|
|
|||
Expired
|
|
(209,173
|
)
|
|
13.38
|
|
|
|
|
|
|||
Outstanding at December 31, 2014
|
|
3,325,103
|
|
|
$
|
6.66
|
|
|
4.67 years
|
|
$
|
711
|
|
Exercisable at December 31, 2014
|
|
1,210,310
|
|
|
$
|
6.31
|
|
|
3.22 years
|
|
$
|
708
|
|
Nonvested Stock
|
|
Shares
|
|
Weighted
Average Grant
Date Fair Value
(Per Share)
|
|||
Nonvested at January 1, 2013
|
|
896,409
|
|
|
$
|
6.47
|
|
Granted
|
|
241,276
|
|
|
6.29
|
|
|
Vested
|
|
(369,032
|
)
|
|
6.39
|
|
|
Forfeited
|
|
(140,805
|
)
|
|
6.68
|
|
|
Nonvested at December 31, 2014
|
|
627,848
|
|
|
$
|
6.40
|
|
Fair values of net assets acquired:
|
|
|
||
Equipment
|
|
$
|
10
|
|
Intangible assets, primarily non-compete agreements
|
|
171
|
|
|
Working capital, including work in progress
|
|
666
|
|
|
Goodwill
|
|
695
|
|
|
Fair value of net assets acquired
|
|
$
|
1,542
|
|
Fair value of purchase price
|
|
$
|
1,542
|
|
Fair values of net assets acquired:
|
|
Final Allocation
|
||
Equipment
|
|
$
|
70
|
|
Intangible assets, primarily customer relationships
|
|
4,041
|
|
|
Working capital, including work in progress
|
|
1,967
|
|
|
Deferred tax liabilities
|
|
(1,736
|
)
|
|
Goodwill
|
|
7,577
|
|
|
Fair value of net assets acquired
|
|
$
|
11,919
|
|
Fair value of purchase price
|
|
$
|
11,919
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2012
|
|
2011
|
||||
Revenue
|
|
$
|
208,503
|
|
|
$
|
210,073
|
|
Net income (loss)
|
|
$
|
5,913
|
|
|
$
|
4,341
|
|
|
|
2014 Quarter Ended
|
|
2013 Quarter Ended
|
||||||||||||||||||||||||||||
|
|
Mar. 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
Mar. 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
Revenue
|
|
$
|
37,901
|
|
|
$
|
41,981
|
|
|
$
|
42,988
|
|
|
$
|
41,322
|
|
|
$
|
45,101
|
|
|
$
|
50,205
|
|
|
$
|
53,403
|
|
|
$
|
46,507
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of revenue
|
|
28,832
|
|
|
29,944
|
|
|
28,681
|
|
|
28,502
|
|
|
31,538
|
|
|
32,522
|
|
|
31,803
|
|
|
30,239
|
|
||||||||
Selling, general and administrative expenses
|
|
9,976
|
|
|
11,037
|
|
|
10,492
|
|
|
9,283
|
|
|
10,580
|
|
|
11,629
|
|
|
13,017
|
|
|
13,974
|
|
||||||||
Depreciation of property and equipment
|
|
1,682
|
|
|
1,586
|
|
|
1,428
|
|
|
1,520
|
|
|
2,008
|
|
|
2,027
|
|
|
2,034
|
|
|
2,162
|
|
||||||||
Amortization of intangible assets
|
|
903
|
|
|
902
|
|
|
895
|
|
|
831
|
|
|
1,276
|
|
|
1,332
|
|
|
1,204
|
|
|
1,185
|
|
||||||||
Impairment charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,207
|
|
||||||||
Total operating expenses
|
|
41,393
|
|
|
43,469
|
|
|
41,496
|
|
|
40,136
|
|
|
45,402
|
|
|
47,510
|
|
|
48,058
|
|
|
51,767
|
|
||||||||
Operating income (loss)
|
|
(3,492
|
)
|
|
(1,488
|
)
|
|
1,492
|
|
|
1,186
|
|
|
(301
|
)
|
|
2,695
|
|
|
5,345
|
|
|
(5,260
|
)
|
||||||||
Foreign currency transaction (gains) losses on short-term intercompany balances
|
|
15
|
|
|
(163
|
)
|
|
1,221
|
|
|
930
|
|
|
357
|
|
|
225
|
|
|
(636
|
)
|
|
41
|
|
||||||||
Interest expense (income), net
|
|
54
|
|
|
(43
|
)
|
|
(44
|
)
|
|
(44
|
)
|
|
(217
|
)
|
|
53
|
|
|
75
|
|
|
12
|
|
||||||||
Other (income) loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Income (loss) before income taxes
|
|
(3,561
|
)
|
|
(1,282
|
)
|
|
315
|
|
|
243
|
|
|
(441
|
)
|
|
2,417
|
|
|
5,906
|
|
|
(5,313
|
)
|
||||||||
Income tax expense
|
|
113
|
|
|
186
|
|
|
554
|
|
|
2,388
|
|
|
56
|
|
|
586
|
|
|
1,029
|
|
|
1,084
|
|
||||||||
Net income (loss)
|
|
(3,674
|
)
|
|
(1,468
|
)
|
|
(239
|
)
|
|
(2,145
|
)
|
|
(497
|
)
|
|
1,831
|
|
|
4,877
|
|
|
(6,397
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings (loss) per common share
(1)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.06
|
|
|
$
|
0.17
|
|
|
$
|
(0.22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per common share
(1)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.06
|
|
|
$
|
0.16
|
|
|
$
|
(0.22
|
)
|
(1)
|
We calculate each quarter as a discrete period; the sum of the four quarters may not equal the calculated full-year amount.
|
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
||||
2008 Equity Incentive Plan
|
|
3,035,103
|
|
|
6.66
|
|
|
2,874,935
|
|
|
Share awards
(1)
|
|
9,918
|
|
|
—
|
|
|
9,914
|
|
|
Equity compensation plans not approved by security holders
(2), (3)
|
|
290,000
|
|
|
6.67
|
|
|
—
|
|
|
Total
|
|
3,335,021
|
|
|
$
|
6.66
|
|
|
2,884,849
|
|
(1)
|
Amounts presented represent 60% of Performance Unit awards under the Company’s 2006 Management Incentive Plan. Performance Unit awards are required to be settled 60% in common stock and 40% in cash.
|
(2)
|
Inducement Option Grant – during the third quarter of 2014, in connection with two executives joining the Company, the Company made inducement grants outside its existing stock-based compensation plans to the executives. The executives received options to purchase 270,000 shares of the common stock of the Company.
|
(3)
|
Inducement Option Grant – during the first quarter of 2013, in connection with an employee joining the Company, the Company made an inducement grant outside its existing stock-based compensation plans to the employee. The employee received an option to purchase 20,000 shares of the common stock of the Company. Vesting of the grant is subject to certain performance requirements.
|
For the following consolidated financial information included herein, see
Index
on Page 37.
|
|
Page No.
|
Schedule II - Valuation and Qualifying Accounts
|
Exhibit
Number
|
|
Description
|
2.1
|
|
Share Purchase Agreement dated February 28, 2010 by and between PRGX U.K. Limited and Sajid Ghani and Others (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 10-K filed on March 29, 2010).
|
|
|
|
2.2
|
|
Acquisition Agreement dated December 1, 2011, among PRGX Global, Inc., PRGX Commercial LLC, Business Strategy, Inc., Strategic Document Solutions, LLC, DD&C Investments, L.L.C., Charles Fayon, Daniel Geelhoed and Dennis VanDyke. (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed on December 2, 2011).
|
|
|
|
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
|
|
1996 Stock Option Plan, dated as of January 25, 1996, together with Forms of Non-qualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s March 26, 1996 Registration Statement No. 333-1086 on Form S-1).
|
|
|
|
+10.2
|
|
Form of Indemnification Agreement between the Registrant and Directors and certain officers, including named executive officers, of the Registrant (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-K for the year ended December 31, 2003).
|
|
|
|
+10.3
|
|
Form of the Registrant’s Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q for the quarterly period ended June 30, 2001).
|
|
|
|
10.4
|
|
Noncompetition, Nonsolicitation and Confidentiality Agreement among The Profit Recovery Group International, Inc., Howard Schultz & Associates International, Inc., Howard Schultz, Andrew Schultz and certain trusts, dated January 24, 2002 (incorporated by reference to Exhibit 10.34 to the Registrant’s Form 10-K for the year ended December 31, 2001).
|
|
|
|
10.5
|
|
Office Lease Agreement between Galleria 600, LLC and PRG-Schultz International, Inc. (incorporated by reference to Exhibit 10.43 to the Registrant’s Form 10-K for the year ended December 31, 2001).
|
|
|
|
10.6
|
|
First Amendment to Office Lease Agreement between Galleria 600, LLC and PRG-Schultz International, Inc. (incorporated by reference to Exhibit 10.65 to the Registrant’s Form 10-K for the year ended December 31, 2002).
|
|
|
|
10.7
|
|
Third Amendment of Lease, entered into as of January 8, 2014, by and between Galleria 600, LLC and the Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 14, 2014).
|
|
|
|
+10.8
|
|
Amended Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q for the quarterly period ended June 30, 2002).
|
|
|
|
+10.9
|
|
Amended HSA-Texas Stock Option Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q for the quarterly period ended June 30, 2002).
|
|
|
|
+10.10
|
|
Form of Non-employee Director Option Agreement (incorporated by reference to Exhibit 99.1 to the Registrant’s Report on Form 8-K filed on February 11, 2005).
|
|
|
|
+10.11
|
|
Amended and Restated 2006 Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended September 30, 2006).
|
|
|
|
+10.12
|
|
Form of Performance Unit Agreement under 2006 Amended and Restated Management Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 22, 2012).
|
|
|
|
+10.13
|
|
Form of Non-Employee Director Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on September 18, 2007).
|
|
|
|
+10.14
|
|
PRGX Global, Inc. 2008 Equity Incentive Plan, as Amended and Restated Effective April 25, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on June 30, 2014).
|
|
|
|
+10.15
|
|
Form of Restricted Stock Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 4, 2008).
|
|
|
|
+10.16
|
|
Form of Non-Qualified Stock Option Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on June 4, 2008).
|
|
|
|
+10.17
|
|
Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on January 14, 2009).
|
|
|
|
+10.18
|
|
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on January 14, 2009).
|
|
|
|
10.19
|
|
Amended & Restated Revolving Credit Agreement dated as of December 23, 2014, among PRGX Global, Inc. and PRGX USA, Inc., as borrowers, the lenders from time to time party thereto and SunTrust Bank, as administrative agent and issuing bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 30, 2014).
|
|
|
|
10.20
|
|
Subsidiary Guaranty Agreement dated as of January 19, 2010 by and among PRGX Global, Inc. (formerly PRG-Schultz International, Inc), and PRGX USA, Inc. (formerly PRG-Schultz USA, Inc.), as borrowers, each of the subsidiaries of PRGX Global, Inc. listed on Schedule I thereto, as guarantors, and SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on January 25, 2010).
|
|
|
|
10.21
|
|
Security Agreement dated January 19, 2010 among PRGX Global, Inc. (formerly PRG-Schultz International, Inc), PRGX USA, Inc. (formerly PRG-Schultz USA, Inc.), and the other direct and indirect subsidiaries of PRGX Global, Inc. signatory thereto, as grantors, in favor of SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on January 25, 2010).
|
|
|
|
10.22
|
|
Equity Pledge Agreement dated as of January 19, 2010, made by PRGX Global, Inc. (formerly PRG-Schultz International, Inc), PRGX USA, Inc. (formerly PRG-Schultz USA, Inc.), and the other direct and indirect subsidiaries of PRGX Global, Inc. signatory thereto, as grantors, in favor of SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K filed on January 25, 2010).
|
|
|
|
10.23
|
|
Loan Documents Modification Agreement dated June 21, 2010, by and among the Borrowers, the Guarantors and the Lender (incorporated by reference to Exhibit 10.29.4 to the Registrant’s Form 10-K filed on March 15, 2012).
|
|
|
|
10.24
|
|
Second Loan Documents Modification Agreement dated September 30, 2010, by and among the Borrowers and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on October 1, 2010).
|
|
|
|
10.25
|
|
Third Loan Documents Modification Agreement dated October 17, 2011, by and among the Borrowers and the Lender (incorporated by reference to Exhibit 10.29.6 to the Registrant’s Form 10-K filed on March 15, 2012).
|
|
|
|
10.26
|
|
Fourth Loan Documents Modification Agreement, entered into as of January 17, 2014, by and among the Borrowers, the Guarantors and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 24, 2014).
|
|
|
|
10.27
|
|
Fifth Loan Documents Modification Agreement and Waiver, entered into as of May 8, 2014, by and among the Borrowers, the Guarantors and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on May 12, 2014).
|
|
|
|
10.28
|
|
Sixth Loan Documents Modification Agreement and Waiver, entered into as of August 7, 2014, by and among the Borrowers, the Guarantors and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on August 7, 2014).
|
|
|
|
10.29
|
|
Seventh Loan Documents Modification Agreement, entered into as of October 23, 2014, by and among the Borrowers, the Guarantors and the Lender.
|
|
|
|
10.30
|
|
Eighth Loan Documents Modification Agreement, entered into as of December 23, 2014, by and among the Borrowers, the Guarantors and the Lender (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on December 30, 2014).
|
|
|
|
+10.31
|
|
PRGX Global, Inc. Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 30, 2014).
|
|
|
|
+10.32
|
|
Form of PRGX Global, Inc. Restricted Stock Unit Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on June 30, 2014).
|
|
|
|
+10.33
|
|
Employment Agreement between the Registrant and Victor A. Allums dated November 28, 2008 (incorporated by reference to Exhibit 10.31 to the Registrant’s Form 10-K filed on March 29, 2010).
|
|
|
|
+10.34
|
|
Employment Agreement between the Registrant and Puneet Pamnani dated February 8, 2012 (incorporated by reference to Exhibit 10.35 to the Registrant’s Form 10-K filed on March 15, 2012).
|
|
|
|
+10.35
|
|
Employment Agreement between the Registrant and Tushar Sachdev dated June 18, 2013 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on August 6, 2013).
|
|
|
|
+10.36
|
|
Separation Agreement between the Registrant and Romil Bahl dated December 5, 2013 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 11, 2013).
|
|
|
|
+10.37
|
|
Employment Agreement between the Registrant and Ronald E. Stewart dated December 13, 2013 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 19, 2013).
|
|
|
|
+10.38
|
|
Employment Agreement between the Registrant and Michael Cochrane dated April 24, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on April 29, 2014).
|
|
|
|
+10.39
|
|
Separation Agreement between the Registrant and James R. Shand dated August 14, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on August 20, 2014).
|
|
|
|
+10.40
|
|
Separation Agreement between the Registrant and Robert B. Lee dated September 11, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on September 11, 2014).
|
|
|
|
+10.41
|
|
Employment Agreement between the Registrant and Peter Limeri dated September 11, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on November 21, 2014).
|
|
|
|
+10.42
|
|
Employment Agreement between the Registrant and Michael W. Reene dated September 11, 2014.
|
|
|
|
+10.43
|
|
Employment Agreement between the Registrant and Catherine Lee dated January 19, 2015.
|
|
|
|
14.1
|
|
Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14.1 to the Registrant’s Form 10-K for the year ended December 31, 2003).
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant.
|
|
|
|
23.1
|
|
Consent of BDO USA, LLP.
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the year ended December 31, 2014.
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the year ended December 31, 2014.
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for the year ended December 31, 2014.
|
|
|
|
101
|
|
The following financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, formatted in Extensible Business Reporting Language (“XBRL”): (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements.
|
|
|
|
+
|
|
Designates management contract or compensatory plan or arrangement.
|
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
|
||||||||
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
|
||||||||
(In thousands)
|
|
|
|
|
Additions
|
|
Deductions
|
|
|
||||||
Description
|
|
Balance at
Beginning
of Year
|
|
Charge
(Credit) to
Costs and
Expenses
|
|
Credit to
the respective
receivable
(1)
|
|
Balance at
End of
Year
|
||||||
2014
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts receivable
|
|
$
|
1,996
|
|
|
253
|
|
|
(6
|
)
|
|
$
|
2,243
|
|
Allowance for doubtful employee advances and miscellaneous receivables
|
|
$
|
402
|
|
|
1,125
|
|
|
(835
|
)
|
|
$
|
692
|
|
Deferred tax valuation allowance
|
|
$
|
48,453
|
|
|
3,549
|
|
|
—
|
|
|
$
|
52,002
|
|
2013
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts receivable
|
|
$
|
1,693
|
|
|
303
|
|
|
—
|
|
|
$
|
1,996
|
|
Allowance for doubtful employee advances and miscellaneous receivables
|
|
$
|
538
|
|
|
1,176
|
|
|
(1,312
|
)
|
|
$
|
402
|
|
Deferred tax valuation allowance
|
|
$
|
48,489
|
|
|
(36
|
)
|
|
—
|
|
|
$
|
48,453
|
|
2012
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts receivable
|
|
$
|
811
|
|
|
882
|
|
|
—
|
|
|
$
|
1,693
|
|
Allowance for doubtful employee advances and miscellaneous receivables
|
|
$
|
272
|
|
|
584
|
|
|
(318
|
)
|
|
$
|
538
|
|
Deferred tax valuation allowance
|
|
$
|
51,630
|
|
|
(3,141
|
)
|
|
—
|
|
|
$
|
48,489
|
|
(1)
|
Write-offs net of recoveries.
|
|
PRGX GLOBAL, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ RONALD E. STEWART
|
|
|
|
Ronald E. Stewart
|
|
|
|
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
|
|
|
|
Date:
|
|
March 13, 2015
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ RONALD E. STEWART
|
|
President, Chief Executive Officer and Director
|
|
March 13, 2015
|
Ronald E. Stewart
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ PETER LIMERI
|
|
Chief Financial Officer and Treasurer
|
|
March 13, 2015
|
Peter Limeri
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ BRADLEY T. WHITE
|
|
Controller
|
|
March 13, 2015
|
Bradley T. White
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ DAVID A. COLE
|
|
Director
|
|
March 13, 2015
|
David A. Cole
|
|
|
|
|
|
|
|
|
|
/s/ PATRICK G. DILLS
|
|
Chairman of the Board
|
|
March 13, 2015
|
Patrick G. Dills
|
|
|
|
|
|
|
|
|
|
/s/ ARCHELLE GEORGIOU FELDSHON
|
|
Director
|
|
March 13, 2015
|
Archelle Georgiou Feldshon
|
|
|
|
|
|
|
|
|
|
/s/ MYLLE H. MANGUM
|
|
Director
|
|
March 13, 2015
|
Mylle H. Mangum
|
|
|
|
|
|
|
|
|
|
/s/ PHILIP J. MAZZILLI, JR.
|
|
Director
|
|
March 13, 2015
|
Philip J. Mazzilli, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH E. WHITTERS
|
|
Director
|
|
March 13, 2015
|
Joseph E. Whitters
|
|
|
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
(SEAL)
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
(SEAL)
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
(SEAL)
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
(SEAL)
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Robert B. Lee
|
(SEAL)
|
Name:
|
Robert B. Lee
|
|
Title:
|
CFO
|
|
By:
|
/s/ Mark Clegg
|
|
Name:
|
Mark Clegg
|
|
Title:
|
VP Commercial Portfolio Manager
|
|
By:
|
/s/ Ronald E. Stewart
|
|
Its:
|
CEO
|
|
|
Michael Reene
|
|
|
/s/ Michael Reene
|
|
|
3629 HABERSHAM RD NW
|
|
|
ATLANTA, GA 30305
|
|
By:
|
/s/ Ron Stewart
|
|
Its:
|
CEO & President
|
|
|
/s/ Catherine Lee
|
|
|
Catherine Lee
|
|
|
9190 Huntcliff Trace
|
|
|
Atlanta, Georgia 30350
|
|
Company
|
Jurisdiction of Organization
|
PRGX USA, Inc.
|
Georgia
|
PRGX Asia, Inc.
|
Georgia
|
PRGX Australia, Inc.
|
Georgia
|
PRGX Belgium, Inc.
|
Georgia
|
PRGX Canada, LLC
|
Georgia
|
PRGX Commercial LLC
|
Georgia
|
PRGX Costa Rica, Inc.
|
Georgia
|
PRGX New Zealand, Inc.
|
Georgia
|
PRGX Netherlands, Inc.
|
Georgia
|
PRGX Mexico, Inc.
|
Georgia
|
PRGX France, Inc.
|
Georgia
|
PRGX Germany, Inc.
|
Georgia
|
PRGX Acquisition Corp.
|
Georgia
|
PRGX Switzerland, Inc.
|
Georgia
|
PRGX Italy, Inc.
|
Georgia
|
PRGX Spain, Inc.
|
Georgia
|
PRGX Portugal, Inc.
|
Georgia
|
PRG International, Inc.
|
Georgia
|
PRG USA, Inc.
|
Georgia
|
PRGX Scandinavia, Inc.
|
Georgia
|
PRGX Holdings, Inc.
|
Georgia
|
PRGX Puerto Rico, Inc.
|
Georgia
|
PRGX Chile, Inc.
|
Georgia
|
PRGX Europe, Inc.
|
Georgia
|
PRGX Brasil, LLC
|
Georgia
|
PRGX India Private Limited
|
India
|
PRGX Holdings Mexico, S de RL de CV
|
Mexico
|
PRGX Servicios Mexico S de RL de CV
|
Mexico
|
PRGX de Mexico S de RL de CV
|
Mexico
|
PRGX Argentina S.A.
|
Argentina
|
PRGX Brasil Ltda.
|
Brazil
|
PRGX International PTE Limited
|
Singapore
|
PRG-Schultz Suzhou' Co Ltd.
|
China
|
PRGX Shanghai Company Limited
|
China
|
PRGX CR s.r.o.
|
Czech Republic
|
PRGFS, Inc.
|
Delaware
|
PRGX Texas, Inc.
|
Texas
|
Meridian Corporation Limited
|
Jersey (Channel Islands)
|
PRGX UK Holdings Ltd
|
United Kingdom
|
PRGX UK Ltd
|
United Kingdom
|
Etesius Limited
|
United Kingdom
|
PRGX Canada Corp.
|
Canada
|
PRGX Deutschland GmbH
|
Germany
|
PRGX Nederland B.V.
|
Netherlands
|
PRGX Colombia Ltda.
|
Columbia
|
PRGX Svenska AB
|
Sweden
|
PRG-Schultz Venezuela S. R. L.
|
Venezuela
|
PRGX Polska Sp. z o.o.
|
Poland
|
PRGDS, LLC
|
Georgia
|
PRGTS, LLC
|
Georgia
|
|
|
|
|
|
|
|
March 13, 2015
|
|
|
|
By:
|
|
/s/ Ronald E. Stewart
|
|
|
|
|
|
|
Ronald E. Stewart
|
|
|
|
|
|
|
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
|
|
|
|
|
|
|
March 13, 2015
|
|
|
|
By:
|
|
/s/ Peter Limeri
|
|
|
|
|
|
|
Peter Limeri
|
|
|
|
|
|
|
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
|
|
|
|
|
|
March 13, 2015
|
|
|
|
By:
|
|
/s/ Ronald E. Stewart
|
|
|
|
|
|
|
Ronald E. Stewart
|
|
|
|
|
|
|
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
|
|
|
|
|||
March 13, 2015
|
|
|
|
By:
|
|
/s/ Peter Limeri
|
|
|
|
|
|
|
Peter Limeri
|
|
|
|
|
|
|
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|