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): AUGUST 17, 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
(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 August 19, 2005, PRG-Schultz (the "Company") issued a press release (the
"Press Release") announcing that it has taken an initial step in implementing an
expense restructuring plan, currently being developed. The Press Release is
attached hereto as Exhibit 99.1 and incorporated herein by reference. When
completed, the plan will involve a major restructuring of the Company's sales,
general and administrative expenses and is scheduled for completion no later
than early fourth quarter, with implementation to begin immediately thereafter.
The initial step includes headcount reductions in the Company's Atlanta
headquarters, elimination of independent contractor positions in Atlanta,
cancellation of an airplane charter service, termination of retainer contracts
with outside consultants, and elimination of certain perquisites for corporate
executives. Annualized savings from this first step will be approximately $4.5
million, before charges, representing only a small portion of the total savings
expected to be realized from the overall plan, once it is developed and fully
implemented. These initial actions are expected to result in severance-related
and other charges of approximately $1 million, to be accrued during the third
quarter ended September 30, 2005. Implementation of the overall plan is expected
to result in significant additional severance-related and other charges.
On August 17, 2005, the Company committed to this initial step as part of a
broader expense restructuring plan that is being developed for approval by the
Company's Board of Directors. The actions taken in the initial step (which will
be completed by August 26, 2005) and the formulation of the broader plan result
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.
The amount of the financial charge and future cash expenditures for the initial
step in the expense restructuring plan is estimated to be $1 million.
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 August 19, 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: August 23, 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 August 19, 2005
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* This exhibit is filed, not furnished.