PRGX Global (PRGX) Misses Q1 EPS by 2c; Reaffirms FY20 Adj. EBITDA Outlook

PRGX Global (NASDAQ: PRGX) reported Q1 EPS of ($0.17), $0.02 worse than the analyst estimate of ($0.15). Revenue for the quarter came in at $36.84 million versus the consensus estimate of $36.08 million.

Quarterly Highlights

• Revenue of $36.8 million, which was negatively impacted by approximately $0.7 million from a strengthening US dollar during the first quarter of 2020
• Adjusted EBITDA from continuing operations of $3.5 million, the highest first quarter Adjusted EBITDA in seven years; net loss from continuing operations of $3.9 million
• Over 75% of Revenue from clients in sectors providing essential goods and services during the COVID-19 pandemic
• Reaffirms 2020 annual guidance for Adjusted EBITDA from continuing operations of $28 million to $30 million

“The first quarter of 2020 marks the Company’s highest first quarter Adjusted EBITDA in seven years, continuing the momentum we saw in the fourth quarter of last year, which was our strongest in over ten years. Expense rationalization actions taken in 2019, along with additional reductions made during the quarter, have enabled us to significantly improve our Adjusted EBITDA performance, as well as our ability to generate free cash flow. It is worth noting in this pandemic environment that over 75% of our revenue comes from clients providing essential goods and services, such as e-commerce, grocery, drug retail, pharmaceutical, consumer packed goods and telecommunications sectors. To date, these sectors have demonstrated economic resilience, limiting our revenue risk exposure. Thus far during the pandemic period, our recovery audit and contract compliance services are generally performing at historical levels of productivity or higher, indicating that the large majority of our clients place high value on our ability to generate working capital during these challenging times,” said Ron Stewart, President and Chief Executive Officer.

“Based on strong results in the first quarter, our solid client base and robust audit operations productivity during this crisis, we remain confident in delivering improved efficiency and profitability in 2020 and reiterate our expectation of delivering 2020 Adjusted EBITDA within a range of $28 million to $30 million, as well as significant improvement in free cash flow.” concluded Stewart.

Guidance

For 2020, Adjusted EBITDA from continuing operations is expected to be in the range of $28 million to $30 million.

For earnings history and earnings-related data on PRGX Global (PRGX) click here.

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