EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
PRG-SCHULTZ CONCLUDES EVALUATION OF STRATEGIC ALTERNATIVES
TUESDAY JUNE 7, 6:43 AM ET
ANNOUNCES JOHN COOK'S DECISION TO RETIRE AS CHAIRMAN, PRESIDENT AND CEO
ATLANTA--(BUSINESS WIRE)--June 7, 2005--PRG-Schultz International, Inc. (Nasdaq:
PRGX - News), the world's largest recovery audit firm, announced today that its
Board of Directors has concluded the evaluation of the company's strategic
alternatives that was previously announced in October 2004. The Board, in
consultation with its financial advisor, CIBC World Markets Corp., through a
special committee established for that purpose, carefully evaluated the
company's options and unanimously determined that, at this time, the best
interests of its shareholders will not be served by continuing to pursue a
strategic transaction, given the current stage of development of certain of the
company's major business initiatives.
PRG-Schultz noted that the scope of the company's recovery audit services
continues to grow. The company sees attractive new growth opportunities both
internationally and in sectors of the domestic U.S. economy, including the
recently awarded contract to provide audit recovery services for the State of
California's Medicare spending. The Board has expressed its view that
PRG-Schultz can best lay the foundation to fulfill its upside potential by
focusing on these opportunities and on its other major business initiatives.
Garth Greimann, Presiding Director of the PRG-Schultz Board, said, "PRG-Schultz
has made significant progress during the past few years in improving its cost
structure and identifying new revenue sources through the evolution of the
service model and expansion into new industries and new international markets.
The Board believes that the interests of the company and its shareholders are
best served by aggressively pursuing further development of its strategic plan
and improvement of its operating and financial performance. To that end, our
Board is working with management to refocus on operational performance including
a reassessment of the company's expected financial results for 2005 and 2006."
Separately, the company also announced that John M. Cook, PRG-Schultz's
Chairman, President and Chief Executive Officer, has informed the Board of
Directors of his decision to retire. The company's Board has assigned
independent directors Garth Greimann, Colin Lind and David Cole to coordinate
the search for a new CEO and has retained Russell Reynolds Associates, one of
the nation's leading executive search firms, to identify qualified internal and
external candidates. Mr. Cook has agreed to remain as Chairman, President and
CEO until his successor is in place.
Mr. Greimann said, "On behalf of the entire PRG-Schultz Board, I want to thank
John Cook for his 16 years of leadership to PRG-Schultz. John's contribution to
the success of PRG-Schultz is immeasurable. The Board supports John's decision
to retire and appreciates his commitment to a successful transition while the
Board conducts its search for a successor."
Colin Lind added, "John's vision created and sustained this company, and with
the many assets of PRG-Schultz, including the depth of our current management
team, a long and growing list of top-tier clients, the strength of our
technology and service, and the existing market opportunities, we believe that
we will be successful in identifying a highly respected executive with a proven
track record to lead the company to future success."
John Cook has served as the Chief Executive Officer of PRG-Schultz International
since he co-founded the company. In 2002, Mr. Cook merged the world's two
largest recovery audit firms, The Profit Recovery Group International and Howard
Schultz & Associates International, to form PRG-Schultz International. John Cook
said, "I am proud of the company we have created working together and believe
that this Board and our strong management team will be good stewards for this
company and its shareholders. Our prospects are exciting and it is now time for
a new CEO to lead PRG-Schultz in its next phase of growth. I have a deep
affection for this company and its employees around the world, and throughout
the transition, I will continue to work tirelessly for our shareholders,
employees and clients."
About PRG-Schultz International, Inc.
Headquartered in Atlanta, PRG-Schultz International, Inc. is the world's largest
recovery audit firm. The company employs approximately 2,800 employees who
provide clients in over 40 countries with insightful value to optimize and
expertly manage their business transactions. Using proprietary software and
expert audit methodologies, PRG-Schultz's industry specialists review client
purchases and payment information to identify and recover overpayments.
Forward Looking Statements
Statements made in this news release that look forward in time, including
statements regarding growth in and growth opportunities for the company's
recovery audit services and the company's ability to successfully recruit a new
CEO, involve risks and uncertainties and are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such risks
and uncertainties include the following: (i) the company may be unable to
recruit a new CEO within a reasonable time frame, (ii) proposed legislative and
regulatory initiatives with respect to European value added taxation could
reduce material portions of the revenues of Meridian VAT Reclaim, (iii) our
Accounts Payable Services business may not grow as expected, and we may not be
able to increase the number of clients, particularly commercial clients,
utilizing contract compliance audits, (iv) our international expansion may take
longer to accomplish or may be more expensive than we anticipate, (v) future
weakness in the currencies of countries in which we transact business could
adversely affect the profitability of our international operations, (vi) our new
services providing management of credit card signature receipts and providing
audits of Medicare payments may not provide expected revenues, and other risk
factors discussed in our Securities and Exchange Commission filings, including
the Company's Form 10-K as filed with the Securities and Exchange Commission on
March 16, 2005. With respect to the Company's recent government Medicare
contract, we will be required to expend substantial resources to prepare for and
perform the Centers for Medicare & Medicaid Services (CMS) audit and there is no
guaranty that actual revenues will justify the required expenditures; until the
CMS pilot program is well underway, there will be no way to accurately predict
the level of recoveries that will be achieved, and there is no guaranty that the
level of recoveries will be significant; even if CMS deems the pilot program
sufficiently successful to justify further ventures, there is no guaranty that
it, or any other medical claims client, will award future contracts to the
Company. The search for a new CEO could be impacted by a number of factors
outside the company's control including the availability of acceptable
candidates and market and economic factors. Until a new CEO is identified, the
Company will be subject to all market and operational risks inherent during any
management succession period. The Company disclaims any obligation or duty to
update or modify these forward-looking statements.
Contact:
PRG-Schultz International, Inc.
James E. Moylan, Jr., 770-779-6605
Source: PRG-Schultz International, Inc.