UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 30, 2005
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PRG-SCHULTZ INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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GEORGIA 000-28000 58-2213805
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
600 GALLERIA PARKWAY, SUITE 100, ATLANTA, GEORGIA 30339-5949
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(Address of principal executive office) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 779-3900
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
On September 30, 2005, PRG-Schultz International, Inc. (the "Company") committed
to implementation of the major expense restructuring plan (the "Restructuring
Plan") previously announced on August 19, 2005 (as filed under Form 8-K on
August 23, 2005). On October 3, 2005, the Company issued a press release (the
"Press Release") announcing that it had completed the Restructuring Plan and
begun implementation of the major expense restructuring elements in such plan.
Annualized savings from the Restructuring Plan will be approximately $42.2
million, including approximately $4.5 million announced on August 19, 2005. Most
of the savings will come in the area of Selling, General and Administrative
("SG&A") expense, and only a small percentage of the Company's auditor staff
will be directly impacted by the reductions. The Company expects that
implementation of the plan will result in severance-related and other charges of
approximately $8.5 million, of which approximately $1.6 million will be accrued
during the third quarter and the remainder during the fourth quarter. Most cash
outlays for severance costs will be paid out over future months. The Company
expects to reduce Atlanta corporate headquarters SG&A headcount by approximately
30%, or 71 people. Worldwide headcount reductions will be 378, or approximately
14% of the Company's total workforce. Substantial savings will also come from
areas other than headcount, including travel and travel-related expenses and
fees for professional services and other purchased services. Implementation of
the restructuring is to begin immediately, and the Company expects that
virtually all of the reductions will be implemented during the fourth quarter of
this year.
On August 17, 2005, the Company committed to an initial step as part of a
broader expense Restructuring Plan that was being developed for approval by the
Company's Board of Directors. The actions taken in the initial step (which were
executed during the third fiscal quarter ended September 30, 2005) and the
formulation of the broader Restructuring Plan resulted from the determination
that the expense of the Company's overhead structure and processes is too high
relative to the nature and size of the Company's business. On September 30,
2005, the Company's Board of Directors approved and authorized management to
carry out the Restructuring Plan. On October 3, 2005, management commenced
implementation of the Restructuring Plan. The amount of the financial charge and
future cash expenditures related to termination benefits under the expense
Restructuring Plan is estimated to be $8.5 million.
The Press Release is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
The statements made by PRG-Schultz are forward-looking statements that involve
risks and uncertainties. All such statements are subject to the safe harbor
created by the Private Securities Litigation Reform Act of 1995. PRG-Schultz's
future financial performance could differ significantly from the expectations of
management and from results expressed or implied in the Press Release. See the
risk factors contained in the Press Release for a discussion of certain risks
and uncertainties that may impact such forward looking statements. For further
information on other risk factors, please refer to the "Risk Factors" contained
in PRG-Schultz's Form 10-K for the year ended December 31, 2004 filed with the
Securities and Exchange Commission, and in its subsequent filings with the SEC.
PRG-Schultz disclaims any obligation or duty to update or modify these
forward-looking statements
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
N/A
(b) Pro Forma Financial Information.
N/A
(c) Exhibits.
Exhibit Number Description
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99.1* Press Release dated October 3, 2005
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* This exhibit is filed, not furnished.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
PRG-Schultz International, Inc. has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
PRG-SCHULTZ INTERNATIONAL, INC.
Date: October 5, 2005 By: /s/ Clinton McKellar
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Clinton McKellar, Jr.
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit Number Description
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99.1* Press Release dated October 3, 2005
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* This exhibit is filed, not furnished.