The Profit Recovery Group International Reports First Quarter 2001 Financial Results

Pro-Forma Results in Line with Previous Guidance; Annual Guidance Reaffirmed



Apr 26, 2001, 01:00 ET from The Profit Recovery Group International, Inc.

    ATLANTA, April 26 /PRNewswire/ --
 The Profit Recovery Group International, Inc. (Nasdaq: PRGX) today announced
 results for the first quarter ended March 31, 2001.
 
     Results from Continuing Operations
     Revenues from continuing operations for the first quarter of 2001 totaled
 $65.5 million, compared to $63.9 million for the first quarter of 2000.
 Excluding non-recurring charges (see "Non-Recurring Charges" below), the
 Company reported a loss from continuing operations in the first quarter of
 2001 of $1.0 million, or a loss of $0.02 per diluted share.  Earnings from
 continuing operations for the first quarter of 2000 were $0.6 million, or
 $0.01 per diluted share.  Reported diluted per-share amounts are based on
 48.0 million shares outstanding for the first quarter of 2001, compared with
 50.9 million for the year-earlier period.
     Excluding non-recurring charges, first-quarter 2001 operating income
 (EBIT) from continuing operations was $0.3 million, a decrease from
 $2.6 million from the year-earlier period.  Earnings before interest, taxes,
 depreciation and amortization (EBITDA) from continuing operations, excluding
 non-recurring charges, were $6.2 million or 9.5 percent of revenues in the
 first quarter of 2001, compared to $8.6 million or 13.5 percent of revenues in
 the first quarter of 2000.
     John Cook, chairman and chief executive officer, commented, "In January,
 we announced a strategic realignment plan designed to build on the strengths
 of our business by restoring a solid foundation of fundamentals.  I am
 encouraged by the progress we have made since January and the resilient
 commitment of our employees, resulting in an increased momentum that I believe
 will deliver solid performance in the second half of the year, historically
 our strongest period."
 
     Continuing Operations Segment Financial Highlights
     Please refer to Schedule 3 of this press release for a presentation of
 pro-forma segment operating results in table form.
 
     Accounts Payable: Revenues for the first quarter 2001 were $57.6 million,
 compared to $57.5 million for the same period a year ago.  Excluding
 non-recurring charges, operating income (EBIT) for the first quarter 2001 was
 $11.1 million (19.2 percent of revenues), compared to 12.3 million
 (21.3 percent of revenues) for the first quarter of 2000.  Earnings before
 interest, taxes, depreciation and amortization (EBITDA), excluding
 non-recurring charges, were $14.6 million or 25.3 percent of revenues in the
 first quarter of 2001, compared to $16.2 million or 28.2 percent of revenues
 in the first quarter of 2000.
     The US Retail Accounts Payable operation met its revenue plan in the first
 quarter while the US Commercial Accounts Payable operation fell short.  As a
 result, US Accounts Payable revenue in the first quarter was nearly flat
 compared to the first quarter of 2000.  Internationally, all regions exhibited
 positive year-over-year revenue growth with the exception of Latin America
 which experienced negative revenue growth due to client-specific timing issues
 in Mexico.  Latin America is still expected to generate some of the highest
 percentage revenue growth for the company in 2001.
     French Taxation Services: Revenues for the first quarter 2001 were
 $7.9 million, compared to $6.4 million for the same period a year ago.
 Operating loss for the first quarter 2001 was $0.9 million (10.8 percent of
 revenues), compared to a similar loss of $0.9 million (13.4 percent of
 revenues) for the first quarter of 2000.  Earnings before interest, taxes,
 depreciation and amortization (EBITDA) were $0.2 million or 2.6 percent of
 revenues in the first quarter of 2001, compared to $0.1 million or 2.0 percent
 of revenues in the first quarter of 2000.
     The similar operating loss in this segment year-over-year, despite higher
 revenues, is attributed to an increase in accounts receivable reserves
 necessitated by negative judicial rulings in the first quarter of 2001 for a
 particular revenue claim type, full implementation of the 35-hour work week in
 France, as well as higher investment in sales infrastructure.
     While no final determinations have yet been made, the Company is exploring
 its strategic alternatives with respect to its French Taxation operations.
     Corporate Overhead: Segment operating income (EBIT) and EBITDA as reported
 above does not include corporate overhead.  Excluding non-recurring charges,
 corporate overhead totaled $9.9 million, representing 15.1 percent of revenues
 from continuing operations in the first quarter of 2001, compared to
 $8.8 million, or 13.7 percent of revenues from continuing operations in the
 first quarter of 2000.
 
     Non-Recurring Charges
     During the first quarter of 2001, the Company incurred severance and other
 personnel costs of approximately $0.8 million, or $0.01 per diluted share on
 an after-tax basis, related to the implementation of its strategic realignment
 announced on January 31, 2001.
     The Company may incur additional non-recurring charges during the final
 three quarters of 2001 to effect additional realignments in its continuing
 operations.  These non-recurring charges, if incurred, are not expected to
 exceed $0.01 per diluted share in the aggregate.
 
     Results From Discontinued Operations
     The Company generated a loss from discontinued operations in the first
 quarter of 2001 of $0.2 million, which has been deferred as required under
 generally accepted accounting principles, since it is expected to be recovered
 upon ultimate sale of these businesses.  This compares to a loss of
 $24.4 million, or $0.48 per diluted share, for the first quarter of 2000.  The
 loss in the first quarter of 2000 resulted from the cumulative effect of an
 accounting change of $26.1 million.
     The Company and investment bankers Houlihan Lokey Howard & Zukin, who have
 been engaged to assist with the sale of the US-based discontinued operations,
 have finalized and begun distribution of the information memorandums for those
 entities.  Progress continues to be made with Close Brothers, the firm engaged
 to assist with the sale of Meridian VAT Reclaim, in the preparation of the
 information memorandum for that entity.
 
     Cash Flow and Days Sales Outstanding (DSO's)
     Net use of cash from operating activities for the three months ended
 March 31, 2001 was approximately $4.3 million, compared to $4.1 million in
 2000.  Due to the seasonality of the Company's core business, the first
 quarter results historically reflect a net use of cash from operating
 activities.
     DSO's (Days Sales Outstanding) from continuing operations as of March 31,
 2001 stood at 81 days, the same level as a year earlier.
 
     2001 Outlook
     PRG also reiterated its outlook for continuing operations for the year
 2001.  Revenues from continuing operations for the full year 2001 are expected
 to be in the range of $335 million to $345 million, representing growth over
 2000 revenues from continuing operations of approximately 12 percent to
 15 percent.  Excluding non-recurring charges related to realignments,
 including severance and other personnel costs, earnings per diluted share from
 continuing operations are expected to be between $0.45 and $0.50 for full year
 2001.
     The Company also provided its outlook for continuing operations for the
 second quarter of 2001.  Revenues from continuing operations for the second
 quarter 2001 are expected to be in the range of $81 million to $84 million,
 representing growth over second quarter 2000 revenues from continuing
 operations of approximately 6 percent to 10 percent.  Excluding non-recurring
 charges related to any further realignment, earnings per diluted share from
 continuing operations for the second quarter of 2001 are expected to be
 between $0.05 and $0.07.
 
     Bank Credit Facility
     The Company has determined that, as of March 31, 2001, it was not in
 compliance with certain financial ratio covenants in its bank credit facility
 agreement.  Under the current bank credit facility agreement, financial ratio
 covenants are calculated on a trailing four-quarter basis without giving
 effect to SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
 Financial Statements" ("SAB 101").  During the first quarter of 2001, one of
 the Company's discontinued operations achieved revenues and earnings on a
 pre-SAB 101 basis which were significantly below expectations and were the
 principal cause of the non-compliance.  The Company is presently negotiating
 with the bank syndicate to reestablish ratio covenants as of March 31, 2001
 and for the duration of 2001.  If such an agreement is not concluded by the
 May 15, 2001 due date of the Form 10-Q, the Company will be required to
 reclassify its long-term debt to the banks as a current liability as of
 March 31, 2001.  Based upon current discussions with leadership of the
 Company's bank syndicate, management is highly confident that a credit
 facility amendment to reestablish ratio covenants as of March 31, 2001 and for
 the duration of 2001 will be finalized prior to May 15, 2001.  The Company
 intends to issue a press release immediately upon resolution of this matter.
 
     Conference Call and Webcast Information
     PRG will hold a conference call today, April 26, 2001 at 9 a.m. ET to
 further discuss the information in this press release, as well as provide an
 update with respect to strategic realignment activities and other Company
 developments.  Listeners in the US should dial 888-396-0289 at least 5 minutes
 prior to the start of the conference.  Listeners outside the US should dial
 712-271-0562.  To access the call, provide the leader's name 'John Cook' and
 the passcode 'PRGX.'
     The teleconference will also be audiocast on the Internet at www.prgx.com.
 Real Network's Real Player or Microsoft Windows Media Player is required to
 access the audiocast.  Real Player can be downloaded from www.real.com .
 Media Player can be downloaded from www.microsoft.com/windows/mediaplayer .
 
     About The Profit Recovery Group International, Inc.
     Headquartered in Atlanta, The Profit Recovery Group International, Inc.
 (PRG) is the leading worldwide provider of recovery audit services.  PRG's
 continuing operations employ approximately 2,500 professionals in
 34 countries.  The Company's core Accounts Payable business provides more than
 2,500 clients with insightful value to optimize and expertly manage their
 business transactions.  For additional information visit our web site at
 www.prgx.com .
 
     Forward Looking Statements
     Statements made in this news release which look forward in time 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 possibilities that (i) our announced divestitures
 may require a longer time to accomplish than we anticipate, and we may incur
 additional losses if, upon disposal, we do not receive the proceeds we
 anticipate for such businesses and we may incur unanticipated further charges
 as a result of our disposal initiatives, (ii) the announced intention to
 dispose of the discontinued operations may result in the loss of key personnel
 and diminished operating results in such operations, (iii) we may not achieve
 anticipated costs savings, (iv) our future investments in technology and
 e-commerce may not benefit our business, (v) our Accounts Payable business may
 not grow as expected, (vi) our international expansion may prove unprofitable,
 (vii), we may not be able to successfully integrate acquired businesses,
 (viii) timing or other issues could cause Latin American revenue growth to
 fail to meet our expectations, (ix) we may experience greater than expected
 severance or other costs in connection with our announced strategic
 realignment, and (x) we may be unsuccessful in negotiating a remedial
 amendment with our banking syndicate with respect to our current
 non-compliance with certain financial ratio covenants as of March 31, 2001,
 as set forth in our bank credit facility agreement, and substantially all of
 our long-term debt could be declared immediately due and payable by our
 banking syndicate, or even if the financial ratio covenants are successfully
 renegotiated, there is no guarantee that future financial results will comply
 with the adjusted financial ratio covenants.  Other risks and uncertainties
 that may affect our business include (i) our ability to effectively manage
 during the divestitures, (ii) the possibility of an adverse judgment in
 pending securities litigation, (iii) the impact of certain accounting
 pronouncements by the Securities and Exchange Commission, (iv) potential
 timing issues that could delay revenue recognition, (v) the effect of strikes,
 (vi) future weakness in the currencies of countries in which we transact
 business, (vii) changes in economic cycles, (viii) competition from other
 companies, (ix) the effect of bankruptcies of our larger clients, (x) changes
 in governmental regulations applicable to us, and other risk factors, detailed
 in our Securities and Exchange Commission filings, including the Company's
 Form 10-K filed March 27, 2001.  The Company disclaims any obligation or duty
 to update or modify these forward-looking statements.
 
 
                                   SCHEDULE 1
         The Profit Recovery Group International, Inc. and Subsidiaries
                Condensed Consolidated Statements of Operations
                 (Amounts  in thousands, except per share data)
                                  (Unaudited)
 
                                                            Three Months
                                                           Ended March 31,
                                                       2001               2000
 
     Revenues                                       $65,527            $63,894
     Cost of revenues                                34,999             35,350
     Selling, general and administrative expenses    30,994             25,910
 
       Operating income (loss)                         (466)             2,634
 
     Interest (expense), net                         (2,021)            (1,570)
 
       Earnings (loss) from continuing operations
        before income taxes and loss
        from discontinued operations                 (2,487)             1,064
 
     Income taxes                                      (995)               447
 
       Earnings (loss) from continuing operations
        before loss from discontinued operations     (1,492)               617
 
     Discontinued operations:
       Loss from operations of discontinued divisions
        (2000), net of income taxes of $(427) and
        including cumulative effect of accounting
        change of $(26,145)                              --            (24,413)
 
       Gain (loss) on disposal from discontinued
        operations including operating results
        for phase-out period, net of income taxes        --                 --
 
       Loss from discontinued operations                 --            (24,413)
 
       Net loss                                    $ (1,492)          $(23,796)
 
     Basic loss per share
       Earnings (loss) from continuing operations
        before discontinued operations             $  (0.03)          $   0.01
       Discontinued operations                           --              (0.49)
       Net loss                                    $  (0.03)          $  (0.48)
 
     Diluted loss per share
       Earnings (loss) from continuing operations
        before discontinued operations             $  (0.03)          $   0.01
       Discontinued operations                           --              (0.48)
       Net loss                                    $  (0.03)          $  (0.47)
 
     Weighted average shares outstanding
       Basic                                         48,025             49,433
       Diluted                                       48,025             50,942
 
 
                                   SCHEDULE 2
         The Profit Recovery Group International, Inc. and Subsidiaries
                     Condensed Consolidated Balance Sheets
                             (Amounts in thousands)
                                  (Unaudited)
 
                                                   March 31,      December 31,
                                                       2001              2000
                                            ASSETS
     Current assets:
       Cash and cash equivalents                    $14,516           $23,870
       Receivables
         Contract receivables                        58,771            67,399
         Employee advances and miscellaneous
          receivables                                 4,978             5,073
           Total receivables                         63,749            72,472
       Prepaid expenses and other current assets      3,213             3,470
       Deferred income taxes                         12,565            12,565
       Net assets of discontinued operations         86,658            80,682
         Total current assets                       180,701           193,059
     Property and equipment                          24,142            26,904
     Noncompete agreements                              704               937
     Deferred loan costs                              1,935             1,701
     Goodwill                                       227,413           235,153
     Deferred income taxes                            6,096             6,236
     Other assets                                       883               841
           Total assets                            $441,874          $464,831
 
                              LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Current installments of long-term debt      $    384          $    391
       Accounts payable and accrued expenses         14,875            17,284
       Accrued business acquisition consideration     5,722             7,567
       Accrued payroll and related expenses          26,562            38,017
       Deferred tax recovery audit revenue              708               694
         Total current liabilities                   48,251            63,953
     Long-term debt, excluding current installments 154,991           154,563
     Deferred compensation                            4,036             5,615
     Other long-term liabilities                      1,346             1,544
         Total liabilities                          208,624           225,675
     Shareholders' equity:
       Preferred stock                                   --                --
       Common stock                                      50                50
       Additional paid-in capital                   315,857           316,127
       Accumulated deficit                          (41,527)          (40,035)
       Accumulated other comprehensive loss         (18,536)          (14,237)
       Less treasury stock at cost                  (21,024)          (21,024)
       Unearned portion of restricted stock          (1,570)           (1,725)
         Total shareholders' equity                 233,250           239,156
 
         Total liabilities and
          shareholders' equity                     $441,874          $464,831
 
 
                                   SCHEDULE 3
         The Profit Recovery Group International, Inc. and Subsidiaries
       Pro-Forma Operating Results From Continuing Operations By Segment
                             (Amounts in millions)
                                  (Unaudited)
 
                                               Accounts Payable Services
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                57.6    100.0%    57.5    100.0%
 
     Pro-Forma Operating Income (EBIT)       11.1     19.2%    12.3     21.3%
 
     Pro-Forma EBITDA                        14.6     25.3%    16.2     28.2%
 
 
                                                French Taxation Services
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                 7.9    100.0%     6.4    100.0%
 
     Pro-Forma Operating Income (EBIT)       (0.9)   -10.8%    (0.9)   -13.4%
 
     Pro-Forma EBITDA                         0.2      2.6%     0.1      2.0%
 
 
                                                   Corporate Support
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                  --                --
 
     Pro-Forma Operating Income (EBIT)       (9.9)   -15.1%    (8.8)   -13.7%
 
     Pro-Forma EBITDA                        (8.6)   -13.1%    (7.7)   -12.1%
 
 
                                                         Total
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                65.5    100.0%    63.9    100.0%
 
     Pro-Forma Operating Income (EBIT)        0.3      0.5%     2.6      4.1%
 
     Pro-Forma EBITDA                         6.2      9.5%     8.6     13.5%
 
     Notes:
     Pro Forma Operating Income (EBIT) and EBITDA excludes non-recurring
     charges in Q1 2001 of approximately $0.8 million related to implementation
     of a strategic realignment.  Accounts Payable Services and French Taxation
     Services "% of Revenues" is calculated based on segment revenues.
     Corporate Support and Total "% of Revenues" is calculated based on total
     revenues.
 
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SOURCE The Profit Recovery Group International, Inc.
    ATLANTA, April 26 /PRNewswire/ --
 The Profit Recovery Group International, Inc. (Nasdaq: PRGX) today announced
 results for the first quarter ended March 31, 2001.
 
     Results from Continuing Operations
     Revenues from continuing operations for the first quarter of 2001 totaled
 $65.5 million, compared to $63.9 million for the first quarter of 2000.
 Excluding non-recurring charges (see "Non-Recurring Charges" below), the
 Company reported a loss from continuing operations in the first quarter of
 2001 of $1.0 million, or a loss of $0.02 per diluted share.  Earnings from
 continuing operations for the first quarter of 2000 were $0.6 million, or
 $0.01 per diluted share.  Reported diluted per-share amounts are based on
 48.0 million shares outstanding for the first quarter of 2001, compared with
 50.9 million for the year-earlier period.
     Excluding non-recurring charges, first-quarter 2001 operating income
 (EBIT) from continuing operations was $0.3 million, a decrease from
 $2.6 million from the year-earlier period.  Earnings before interest, taxes,
 depreciation and amortization (EBITDA) from continuing operations, excluding
 non-recurring charges, were $6.2 million or 9.5 percent of revenues in the
 first quarter of 2001, compared to $8.6 million or 13.5 percent of revenues in
 the first quarter of 2000.
     John Cook, chairman and chief executive officer, commented, "In January,
 we announced a strategic realignment plan designed to build on the strengths
 of our business by restoring a solid foundation of fundamentals.  I am
 encouraged by the progress we have made since January and the resilient
 commitment of our employees, resulting in an increased momentum that I believe
 will deliver solid performance in the second half of the year, historically
 our strongest period."
 
     Continuing Operations Segment Financial Highlights
     Please refer to Schedule 3 of this press release for a presentation of
 pro-forma segment operating results in table form.
 
     Accounts Payable: Revenues for the first quarter 2001 were $57.6 million,
 compared to $57.5 million for the same period a year ago.  Excluding
 non-recurring charges, operating income (EBIT) for the first quarter 2001 was
 $11.1 million (19.2 percent of revenues), compared to 12.3 million
 (21.3 percent of revenues) for the first quarter of 2000.  Earnings before
 interest, taxes, depreciation and amortization (EBITDA), excluding
 non-recurring charges, were $14.6 million or 25.3 percent of revenues in the
 first quarter of 2001, compared to $16.2 million or 28.2 percent of revenues
 in the first quarter of 2000.
     The US Retail Accounts Payable operation met its revenue plan in the first
 quarter while the US Commercial Accounts Payable operation fell short.  As a
 result, US Accounts Payable revenue in the first quarter was nearly flat
 compared to the first quarter of 2000.  Internationally, all regions exhibited
 positive year-over-year revenue growth with the exception of Latin America
 which experienced negative revenue growth due to client-specific timing issues
 in Mexico.  Latin America is still expected to generate some of the highest
 percentage revenue growth for the company in 2001.
     French Taxation Services: Revenues for the first quarter 2001 were
 $7.9 million, compared to $6.4 million for the same period a year ago.
 Operating loss for the first quarter 2001 was $0.9 million (10.8 percent of
 revenues), compared to a similar loss of $0.9 million (13.4 percent of
 revenues) for the first quarter of 2000.  Earnings before interest, taxes,
 depreciation and amortization (EBITDA) were $0.2 million or 2.6 percent of
 revenues in the first quarter of 2001, compared to $0.1 million or 2.0 percent
 of revenues in the first quarter of 2000.
     The similar operating loss in this segment year-over-year, despite higher
 revenues, is attributed to an increase in accounts receivable reserves
 necessitated by negative judicial rulings in the first quarter of 2001 for a
 particular revenue claim type, full implementation of the 35-hour work week in
 France, as well as higher investment in sales infrastructure.
     While no final determinations have yet been made, the Company is exploring
 its strategic alternatives with respect to its French Taxation operations.
     Corporate Overhead: Segment operating income (EBIT) and EBITDA as reported
 above does not include corporate overhead.  Excluding non-recurring charges,
 corporate overhead totaled $9.9 million, representing 15.1 percent of revenues
 from continuing operations in the first quarter of 2001, compared to
 $8.8 million, or 13.7 percent of revenues from continuing operations in the
 first quarter of 2000.
 
     Non-Recurring Charges
     During the first quarter of 2001, the Company incurred severance and other
 personnel costs of approximately $0.8 million, or $0.01 per diluted share on
 an after-tax basis, related to the implementation of its strategic realignment
 announced on January 31, 2001.
     The Company may incur additional non-recurring charges during the final
 three quarters of 2001 to effect additional realignments in its continuing
 operations.  These non-recurring charges, if incurred, are not expected to
 exceed $0.01 per diluted share in the aggregate.
 
     Results From Discontinued Operations
     The Company generated a loss from discontinued operations in the first
 quarter of 2001 of $0.2 million, which has been deferred as required under
 generally accepted accounting principles, since it is expected to be recovered
 upon ultimate sale of these businesses.  This compares to a loss of
 $24.4 million, or $0.48 per diluted share, for the first quarter of 2000.  The
 loss in the first quarter of 2000 resulted from the cumulative effect of an
 accounting change of $26.1 million.
     The Company and investment bankers Houlihan Lokey Howard & Zukin, who have
 been engaged to assist with the sale of the US-based discontinued operations,
 have finalized and begun distribution of the information memorandums for those
 entities.  Progress continues to be made with Close Brothers, the firm engaged
 to assist with the sale of Meridian VAT Reclaim, in the preparation of the
 information memorandum for that entity.
 
     Cash Flow and Days Sales Outstanding (DSO's)
     Net use of cash from operating activities for the three months ended
 March 31, 2001 was approximately $4.3 million, compared to $4.1 million in
 2000.  Due to the seasonality of the Company's core business, the first
 quarter results historically reflect a net use of cash from operating
 activities.
     DSO's (Days Sales Outstanding) from continuing operations as of March 31,
 2001 stood at 81 days, the same level as a year earlier.
 
     2001 Outlook
     PRG also reiterated its outlook for continuing operations for the year
 2001.  Revenues from continuing operations for the full year 2001 are expected
 to be in the range of $335 million to $345 million, representing growth over
 2000 revenues from continuing operations of approximately 12 percent to
 15 percent.  Excluding non-recurring charges related to realignments,
 including severance and other personnel costs, earnings per diluted share from
 continuing operations are expected to be between $0.45 and $0.50 for full year
 2001.
     The Company also provided its outlook for continuing operations for the
 second quarter of 2001.  Revenues from continuing operations for the second
 quarter 2001 are expected to be in the range of $81 million to $84 million,
 representing growth over second quarter 2000 revenues from continuing
 operations of approximately 6 percent to 10 percent.  Excluding non-recurring
 charges related to any further realignment, earnings per diluted share from
 continuing operations for the second quarter of 2001 are expected to be
 between $0.05 and $0.07.
 
     Bank Credit Facility
     The Company has determined that, as of March 31, 2001, it was not in
 compliance with certain financial ratio covenants in its bank credit facility
 agreement.  Under the current bank credit facility agreement, financial ratio
 covenants are calculated on a trailing four-quarter basis without giving
 effect to SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
 Financial Statements" ("SAB 101").  During the first quarter of 2001, one of
 the Company's discontinued operations achieved revenues and earnings on a
 pre-SAB 101 basis which were significantly below expectations and were the
 principal cause of the non-compliance.  The Company is presently negotiating
 with the bank syndicate to reestablish ratio covenants as of March 31, 2001
 and for the duration of 2001.  If such an agreement is not concluded by the
 May 15, 2001 due date of the Form 10-Q, the Company will be required to
 reclassify its long-term debt to the banks as a current liability as of
 March 31, 2001.  Based upon current discussions with leadership of the
 Company's bank syndicate, management is highly confident that a credit
 facility amendment to reestablish ratio covenants as of March 31, 2001 and for
 the duration of 2001 will be finalized prior to May 15, 2001.  The Company
 intends to issue a press release immediately upon resolution of this matter.
 
     Conference Call and Webcast Information
     PRG will hold a conference call today, April 26, 2001 at 9 a.m. ET to
 further discuss the information in this press release, as well as provide an
 update with respect to strategic realignment activities and other Company
 developments.  Listeners in the US should dial 888-396-0289 at least 5 minutes
 prior to the start of the conference.  Listeners outside the US should dial
 712-271-0562.  To access the call, provide the leader's name 'John Cook' and
 the passcode 'PRGX.'
     The teleconference will also be audiocast on the Internet at www.prgx.com.
 Real Network's Real Player or Microsoft Windows Media Player is required to
 access the audiocast.  Real Player can be downloaded from www.real.com .
 Media Player can be downloaded from www.microsoft.com/windows/mediaplayer .
 
     About The Profit Recovery Group International, Inc.
     Headquartered in Atlanta, The Profit Recovery Group International, Inc.
 (PRG) is the leading worldwide provider of recovery audit services.  PRG's
 continuing operations employ approximately 2,500 professionals in
 34 countries.  The Company's core Accounts Payable business provides more than
 2,500 clients with insightful value to optimize and expertly manage their
 business transactions.  For additional information visit our web site at
 www.prgx.com .
 
     Forward Looking Statements
     Statements made in this news release which look forward in time 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 possibilities that (i) our announced divestitures
 may require a longer time to accomplish than we anticipate, and we may incur
 additional losses if, upon disposal, we do not receive the proceeds we
 anticipate for such businesses and we may incur unanticipated further charges
 as a result of our disposal initiatives, (ii) the announced intention to
 dispose of the discontinued operations may result in the loss of key personnel
 and diminished operating results in such operations, (iii) we may not achieve
 anticipated costs savings, (iv) our future investments in technology and
 e-commerce may not benefit our business, (v) our Accounts Payable business may
 not grow as expected, (vi) our international expansion may prove unprofitable,
 (vii), we may not be able to successfully integrate acquired businesses,
 (viii) timing or other issues could cause Latin American revenue growth to
 fail to meet our expectations, (ix) we may experience greater than expected
 severance or other costs in connection with our announced strategic
 realignment, and (x) we may be unsuccessful in negotiating a remedial
 amendment with our banking syndicate with respect to our current
 non-compliance with certain financial ratio covenants as of March 31, 2001,
 as set forth in our bank credit facility agreement, and substantially all of
 our long-term debt could be declared immediately due and payable by our
 banking syndicate, or even if the financial ratio covenants are successfully
 renegotiated, there is no guarantee that future financial results will comply
 with the adjusted financial ratio covenants.  Other risks and uncertainties
 that may affect our business include (i) our ability to effectively manage
 during the divestitures, (ii) the possibility of an adverse judgment in
 pending securities litigation, (iii) the impact of certain accounting
 pronouncements by the Securities and Exchange Commission, (iv) potential
 timing issues that could delay revenue recognition, (v) the effect of strikes,
 (vi) future weakness in the currencies of countries in which we transact
 business, (vii) changes in economic cycles, (viii) competition from other
 companies, (ix) the effect of bankruptcies of our larger clients, (x) changes
 in governmental regulations applicable to us, and other risk factors, detailed
 in our Securities and Exchange Commission filings, including the Company's
 Form 10-K filed March 27, 2001.  The Company disclaims any obligation or duty
 to update or modify these forward-looking statements.
 
 
                                   SCHEDULE 1
         The Profit Recovery Group International, Inc. and Subsidiaries
                Condensed Consolidated Statements of Operations
                 (Amounts  in thousands, except per share data)
                                  (Unaudited)
 
                                                            Three Months
                                                           Ended March 31,
                                                       2001               2000
 
     Revenues                                       $65,527            $63,894
     Cost of revenues                                34,999             35,350
     Selling, general and administrative expenses    30,994             25,910
 
       Operating income (loss)                         (466)             2,634
 
     Interest (expense), net                         (2,021)            (1,570)
 
       Earnings (loss) from continuing operations
        before income taxes and loss
        from discontinued operations                 (2,487)             1,064
 
     Income taxes                                      (995)               447
 
       Earnings (loss) from continuing operations
        before loss from discontinued operations     (1,492)               617
 
     Discontinued operations:
       Loss from operations of discontinued divisions
        (2000), net of income taxes of $(427) and
        including cumulative effect of accounting
        change of $(26,145)                              --            (24,413)
 
       Gain (loss) on disposal from discontinued
        operations including operating results
        for phase-out period, net of income taxes        --                 --
 
       Loss from discontinued operations                 --            (24,413)
 
       Net loss                                    $ (1,492)          $(23,796)
 
     Basic loss per share
       Earnings (loss) from continuing operations
        before discontinued operations             $  (0.03)          $   0.01
       Discontinued operations                           --              (0.49)
       Net loss                                    $  (0.03)          $  (0.48)
 
     Diluted loss per share
       Earnings (loss) from continuing operations
        before discontinued operations             $  (0.03)          $   0.01
       Discontinued operations                           --              (0.48)
       Net loss                                    $  (0.03)          $  (0.47)
 
     Weighted average shares outstanding
       Basic                                         48,025             49,433
       Diluted                                       48,025             50,942
 
 
                                   SCHEDULE 2
         The Profit Recovery Group International, Inc. and Subsidiaries
                     Condensed Consolidated Balance Sheets
                             (Amounts in thousands)
                                  (Unaudited)
 
                                                   March 31,      December 31,
                                                       2001              2000
                                            ASSETS
     Current assets:
       Cash and cash equivalents                    $14,516           $23,870
       Receivables
         Contract receivables                        58,771            67,399
         Employee advances and miscellaneous
          receivables                                 4,978             5,073
           Total receivables                         63,749            72,472
       Prepaid expenses and other current assets      3,213             3,470
       Deferred income taxes                         12,565            12,565
       Net assets of discontinued operations         86,658            80,682
         Total current assets                       180,701           193,059
     Property and equipment                          24,142            26,904
     Noncompete agreements                              704               937
     Deferred loan costs                              1,935             1,701
     Goodwill                                       227,413           235,153
     Deferred income taxes                            6,096             6,236
     Other assets                                       883               841
           Total assets                            $441,874          $464,831
 
                              LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Current installments of long-term debt      $    384          $    391
       Accounts payable and accrued expenses         14,875            17,284
       Accrued business acquisition consideration     5,722             7,567
       Accrued payroll and related expenses          26,562            38,017
       Deferred tax recovery audit revenue              708               694
         Total current liabilities                   48,251            63,953
     Long-term debt, excluding current installments 154,991           154,563
     Deferred compensation                            4,036             5,615
     Other long-term liabilities                      1,346             1,544
         Total liabilities                          208,624           225,675
     Shareholders' equity:
       Preferred stock                                   --                --
       Common stock                                      50                50
       Additional paid-in capital                   315,857           316,127
       Accumulated deficit                          (41,527)          (40,035)
       Accumulated other comprehensive loss         (18,536)          (14,237)
       Less treasury stock at cost                  (21,024)          (21,024)
       Unearned portion of restricted stock          (1,570)           (1,725)
         Total shareholders' equity                 233,250           239,156
 
         Total liabilities and
          shareholders' equity                     $441,874          $464,831
 
 
                                   SCHEDULE 3
         The Profit Recovery Group International, Inc. and Subsidiaries
       Pro-Forma Operating Results From Continuing Operations By Segment
                             (Amounts in millions)
                                  (Unaudited)
 
                                               Accounts Payable Services
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                57.6    100.0%    57.5    100.0%
 
     Pro-Forma Operating Income (EBIT)       11.1     19.2%    12.3     21.3%
 
     Pro-Forma EBITDA                        14.6     25.3%    16.2     28.2%
 
 
                                                French Taxation Services
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                 7.9    100.0%     6.4    100.0%
 
     Pro-Forma Operating Income (EBIT)       (0.9)   -10.8%    (0.9)   -13.4%
 
     Pro-Forma EBITDA                         0.2      2.6%     0.1      2.0%
 
 
                                                   Corporate Support
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                  --                --
 
     Pro-Forma Operating Income (EBIT)       (9.9)   -15.1%    (8.8)   -13.7%
 
     Pro-Forma EBITDA                        (8.6)   -13.1%    (7.7)   -12.1%
 
 
                                                         Total
                                               Q1 2001           Q1 2000
                                                       % of              % of
                                             $     Revenues    $     Revenues
     Revenues                                65.5    100.0%    63.9    100.0%
 
     Pro-Forma Operating Income (EBIT)        0.3      0.5%     2.6      4.1%
 
     Pro-Forma EBITDA                         6.2      9.5%     8.6     13.5%
 
     Notes:
     Pro Forma Operating Income (EBIT) and EBITDA excludes non-recurring
     charges in Q1 2001 of approximately $0.8 million related to implementation
     of a strategic realignment.  Accounts Payable Services and French Taxation
     Services "% of Revenues" is calculated based on segment revenues.
     Corporate Support and Total "% of Revenues" is calculated based on total
     revenues.
 
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 SOURCE  The Profit Recovery Group International, Inc.