##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-28000
 
 PRG-Schultz International, Inc.
  Georgia
    
    58-2213805(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)600 Galleria Parkway
    
    30339-5986Suite 100
    
    (Zip Code)Atlanta, Georgia(Address of principal executive offices)
 Registrant s telephone number, including area code: (770) 779-3900
 þ o
  o Large accelerated filer
    
    þ Accelerated filer
    
    o Non-accelerated filer
    
    o Smaller reporting company(Do not check if a smaller reporting company)
 o þ




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##### 



PRG-SCHULTZ INTERNATIONAL, INC.
 FORM 10-Q
For the Quarter Ended March 31, 2008
 INDEX
 Page No.Part I.Financial InformationItem 1. Financial Statements (Unaudited)
    
    
    1Condensed Consolidated Statements of Operations for the Three Months Ended
March 31, 2008 and 2007
    
    
    1Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2008 and 2007
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    22Part II.Other InformationItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3. Defaults Upon Senior Securities
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    24Signatures
    
    
    26EX-10.1 2008 PRG-SCHULTZ PERFORMANCE BONUS PLANEX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEO AND CFO




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements (Unaudited)
 PRG-SCHULTZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
 Three Months EndedMarch 31,2008
    
    
    2007Revenues
    
    $
    48,263
    
    
    $
    57,030Cost of revenues
    
    
    30,252
    
    
    
    37,241Gross margin
    
    
    18,011
    
    
    
    19,789Selling, general and administrative expenses
    
    
    12,843
    
    
    
    13,682Operating income
    
    
    5,168
    
    
    
    6,107Interest expense, net
    
    
    (991
    )
    
    
    (4,141
    )Earnings from continuing operations before income taxes and
discontinued operations
    
    
    4,177
    
    
    
    1,966Income taxes
    
    
    593
    
    
    
    531Earnings from continuing operations before discontinued operations
    
    
    3,584
    
    
    
    1,435Discontinued operations (Note B):Earnings from discontinued operations, net of income taxes
    
    
    
    
    
    
    88Net earnings
    
    $
    3,584
    
    
    $
    1,523Basic earnings per common share (Note C):Earnings from continuing operations before discontinued operations
    
    $
    0.17
    
    
    $
    0.15Earnings from discontinued operations
    
    
    
    
    
    
    0.01Net earnings
    
    $
    0.17
    
    
    $
    0.16Diluted earnings per common share (Note C):Earnings from continuing operations before discontinued operations
    
    $
    0.16
    
    
    $
    0.12Earnings from discontinued operations
    
    
    
    
    
    
    0.01Net earnings
    
    $
    0.16
    
    
    $
    0.13Weighted-average common shares outstanding (Note C):Basic
    
    
    21,524
    
    
    
    8,373Diluted
    
    
    22,843
    
    
    
    12,164
 See accompanying Notes to Condensed Consolidated Financial Statements.
 1




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PRG-SCHULTZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 March 31,2008
    
    
    December 31,(Unaudited)
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents (Note G)
    
    $
    19,440
    
    
    $
    42,364Restricted cash
    
    
    83
    
    
    
    Receivables:Contract receivables, less allowances of $821 in 2008 and $826 in 2007Billed
    
    
    44,940
    
    
    
    30,251Unbilled
    
    
    4,875
    
    
    
    6,44049,815
    
    
    
    36,691Employee advances and miscellaneous receivables, less allowances of $2,004 in 2008 and
$1,831 in 2007
    
    
    366
    
    
    
    1,118Total receivables
    
    
    50,181
    
    
    
    37,809Prepaid expenses and other current assets
    
    
    2,461
    
    
    
    2,676Deferred income taxes
    
    
    
    
    
    
    64Total current assets
    
    
    72,165
    
    
    
    82,913Property and equipment, at cost
    
    
    41,398
    
    
    
    41,148Less accumulated depreciation and amortization
    
    
    (33,804
    )
    
    
    (33,113
    )Property and equipment, net
    
    
    7,594
    
    
    
    8,035Goodwill
    
    
    4,600
    
    
    
    4,600Intangible assets, less accumulated amortization of $9,279 in 2008 and $8,728 in 2007
    
    
    20,621
    
    
    
    21,172Unbilled receivables
    
    
    1,546
    
    
    
    2,072Deferred income taxes
    
    
    144
    
    
    
    279Other assets
    
    
    3,287
    
    
    
    3,367$
    109,957
    
    
    $
    122,438LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    13,046
    
    
    $
    16,117Accrued payroll and related expenses
    
    
    41,079
    
    
    
    31,435Refund liabilities
    
    
    8,375
    
    
    
    9,897Deferred revenue
    
    
    751
    
    
    
    620Current portions of debt obligations
    
    
    5,289
    
    
    
    7,846Total current liabilities
    
    
    68,540
    
    
    
    65,915Long term debt (Note H)
    
    
    18,320
    
    
    
    38,078Noncurrent compensation obligations
    
    
    8,967
    
    
    
    8,548Refund liabilities
    
    
    1,276
    
    
    
    1,676Other long-term liabilities
    
    
    5,683
    
    
    
    5,872Total liabilities
    
    
    102,786
    
    
    
    120,089Shareholders equity (Note D):Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares;
issued 22,100,090 in 2008 and 2007
    
    
    221
    
    
    
    221Additional paid-in capital
    
    
    607,831
    
    
    
    605,592Accumulated deficit
    
    
    (555,434
    )
    
    
    (559,018
    )Accumulated other comprehensive income
    
    
    3,263
    
    
    
    4,264Treasury stock, at cost; 576,453 shares in 2008 and 2007
    
    
    (48,710
    )
    
    
    (48,710
    )Total shareholders equity
    
    
    7,171
    
    
    
    2,349Commitments and contingencies (Note I)
    
    $
    109,957
    
    
    $
    122,438
 See accompanying Notes to Condensed Consolidated Financial Statements.
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PRG-SCHULTZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Three Months EndedMarch 31,2008
    
    
    2007Cash flows from operating activities:Net earnings
    
    $
    3,584
    
    
    $
    1,523Earnings from discontinued operations
    
    
    
    
    
    
    88Earnings from continuing operations
    
    
    3,584
    
    
    
    1,435Adjustments to reconcile earnings from continuing operations to
net cash used in operating activities:Depreciation and amortization
    
    
    1,401
    
    
    
    2,011Amortization of debt discount, premium and deferred loan costs
    
    
    194
    
    
    
    492Stock-based compensation costs
    
    
    3,034
    
    
    
    2,734Loss on sale of property, plant and equipment
    
    
    8
    
    
    
    92Deferred income taxes
    
    
    199
    
    
    
    359Changes in assets and liabilities:Restricted cash
    
    
    (80
    )
    
    
    104Billed receivables
    
    
    (13,982
    )
    
    
    3,904Unbilled receivables
    
    
    2,091
    
    
    
    2,285Prepaid expenses and other current assets
    
    
    206
    
    
    
    363Other assets
    
    
    (78
    )
    
    
    28Accounts payable and accrued expenses
    
    
    (4,230
    )
    
    
    (5,197
    )Accrued payroll and related expenses
    
    
    9,515
    
    
    
    (10,485
    )Refund liabilities
    
    
    (1,922
    )
    
    
    208Deferred revenue
    
    
    130
    
    
    
    159Noncurrent compensation obligations
    
    
    (376
    )
    
    
    (372
    )Other long-term liabilities
    
    
    (137
    )
    
    
    (111
    )Net cash used in operating activities
    
    
    (443
    )
    
    
    (1,991
    )Cash flows from investing activities:Purchases of property and equipment, net of disposal proceeds
    
    
    (417
    )
    
    
    (358
    )Net cash used in investing activities
    
    
    (417
    )
    
    
    (358
    )Cash flows from financing activities:Net repayments of debt
    
    
    (22,315
    )
    
    
    (9,580
    )Payments for deferred loan cost
    
    
    (30
    )
    
    
    (203
    )Net cash used in financing activities
    
    
    (22,345
    )
    
    
    (9,783
    )Cash flows from discontinued operations:Operating cash flows
    
    
    
    
    
    
    (46
    )Investing cash flows
    
    
    
    
    
    
    (37
    )Net cash used in discontinued operations
    
    
    
    
    
    
    (83
    )Effect of exchange rates on cash and cash equivalents
    
    
    281
    
    
    
    188Net change in cash and cash equivalents
    
    
    (22,924
    )
    
    
    (12,027
    )Cash and cash equivalents at beginning of period
    
    
    42,364
    
    
    
    30,228Cash and cash equivalents at end of period
    
    $
    19,440
    
    
    $
    18,201Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    1,133
    
    
    $
    6,986Cash paid during the period for income taxes, net of refunds
    
    $
    874
    
    
    $
    318
 See accompanying Notes to Condensed Consolidated Financial Statements.
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PRG-SCHULTZ INTERNATIONAL, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2008 and 2007
 (Unaudited)
 Note A  Basis of Presentation
      New Accounting Standards
 Fair Value Measurements
       4




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PRG-SCHULTZ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  The Fair Value Option for Financial Assets
and Financial Liabilities  Including an amendment of FASB Statement No. 115
 Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statements
 Note B  Discontinued Operations
  Three MonthsEndedMarch 31,2008
    
    
    2007Revenues
    
    $
    
    
    
    $
    9,878Operating income from discontinued operations
    
    
    
    
    
    
    612Gain (loss) on disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    612Income tax expense
    
    
    
    
    
    
    524Earnings from discontinued operations
    
    $
    
    
    
    $
    88
  5




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PRG-SCHULTZ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 
 Note C  Earnings Per Common Share
  Three Months EndedMarch 31,2008
    
    
    2007Basic earnings per common share:Numerator for earnings per common share calculations:Earnings from continuing operations before discontinued operations
    
    $
    3,584
    
    
    $
    1,435Preferred dividends
    
    
    
    
    
    
    (158
    )Earnings for purposes of computing basic earnings
per common share from continuing operations
    
    
    3,584
    
    
    
    1,277Earnings from discontinued operations
    
    
    
    
    
    
    88Earnings for purposes of computing basic net earnings
per common share
    
    $
    3,584
    
    
    $
    1,365Denominator:Denominator for basic earnings per common share  weighted-average common shares
outstanding during the period
    
    
    21,524
    
    
    
    8,373Basic earnings per common share:Earnings from continuing operations before discontinued operations
    
    $
    0.17
    
    
    $
    0.15Earnings from discontinued operations
    
    
    
    
    
    
    0.01Net earnings
    
    $
    0.17
    
    
    $
    0.16
 Three Months EndedMarch 31,2008
    
    
    2007Diluted earnings per common share:Numerator for earnings per common share calculations:Earnings from continuing operations before discontinued operations
    
    $
    3,584
    
    
    $
    1,435Preferred dividends
    
    
    
    
    
    
    Earnings for purposes of computing diluted earnings
per common share from continuing operations
    
    
    3,584
    
    
    
    1,435Earnings from discontinued operations
    
    
    
    
    
    
    88Earnings for purposes of computing diluted net earnings
per common share
    
    $
    3,584
    
    
    $
    1,523Denominator:Denominator for basic earnings per common share  weighted-average
common shares outstanding during the period
    
    
    21,524
    
    
    
    8,373Effect of dilutive securities:Incremental shares from stock-based compensation plans
    
    
    1,319
    
    
    
    452Incremental shares from conversion of convertible preferred stock
    
    
    
    
    
    
    3,339Denominator for diluted earnings per common share
    
    
    22,843
    
    
    
    12,164Diluted earnings per common share:Earnings from continuing operations before discontinued operations
    
    $
    0.16
    
    
    $
    0.12Earnings from discontinued operations
    
    
    
    
    
    
    0.01Net earnings
    
    $
    0.16
    
    
    $
    0.13
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PRG-SCHULTZ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Note D  Stock-Based Compensation
      Note E  Operating Segments and Related Information
  Domestic Accounts Payable Services
  International Accounts Payable Services
  Corporate Support
  7




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PRG-SCHULTZ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Domestic
    
    
    InternationalAccounts
    
    
    AccountsPayable
    
    
    Payable
    
    
    CorporateServices
    
    
    Services
    
    
    Support
    
    
    TotalQuarter Ended March 31, 2008Revenues
    
    $
    28,214
    
    
    $
    20,049
    
    
    $
    
    
    
    $
    48,263EBITDA
    
    $
    9,384
    
    
    $
    3,784
    
    
    $
    (6,599
    )
    
    $
    6,569Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    3,034
    
    
    
    3,034Adjusted EBITDA
    
    $
    9,384
    
    
    $
    3,784
    
    
    $
    (3,565
    )
    
    $
    9,603Quarter Ended March 31, 2007Revenues
    
    $
    37,004
    
    
    $
    20,026
    
    
    $
    
    
    
    $
    57,030EBITDA
    
    $
    13,022
    
    
    $
    2,351
    
    
    $
    (7,255
    )
    
    $
    8,118Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,734
    
    
    
    2,734Adjusted EBITDA
    
    $
    13,022
    
    
    $
    2,351
    
    
    $
    (4,521
    )
    
    $
    10,852
  Three MonthsEndedMarch 31,2008
    
    
    2007Earnings from continuing operations
before discontinued operations
    
    $
    3,584
    
    
    $
    1,435Income taxes
    
    
    593
    
    
    
    531Interest, net
    
    
    991
    
    
    
    4,141Depreciation and amortization
    
    
    1,401
    
    
    
    2,011EBITDA
    
    
    6,569
    
    
    
    8,118Stock-based compensation
    
    
    3,034
    
    
    
    2,734Adjusted EBITDA
    
    $
    9,603
    
    
    $
    10,852
  Note F  Comprehensive Income
 Reporting Comprehensive Income
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PRG-SCHULTZ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note G  Cash Equivalents
   Note H  Long Term Debt
    Note I  Commitments and Contingencies
 Legal Proceedings
   9




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PRG-SCHULTZ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Retirement Obligations
  Operational Restructuring Obligations
  10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Introduction
    Medicare
   11




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Critical Accounting Policies
  12




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New Accounting Standards
 Fair Value Measurements
       The Fair Value Option for Financial Assets
and Financial Liabilities  Including an amendment of FASB Statement No. 115
 Business Combinations
 13




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Noncontrolling Interests in Consolidated
Financial Statements
 Results of Operations
  Three Months EndedMarch 31,2008
    
    
    2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenues
    
    
    62.7
    
    
    
    65.3Gross margin
    
    
    37.3
    
    
    
    34.7Selling, general and administrative expenses
    
    
    26.6
    
    
    
    24.0Operating income
    
    
    10.7
    
    
    
    10.7Interest expense, net
    
    
    (2.1
    )
    
    
    (7.2
    )Earnings from continuing operations
before income taxes and discontinued
operations
    
    
    8.6
    
    
    
    3.5Income taxes
    
    
    1.2
    
    
    
    1.0Earnings from continuing operations
before discontinued operations
    
    
    7.4
    
    
    
    2.5Earnings from discontinued
operations
    
    
    
    
    
    
    0.2Net earnings
    
    
    7.4
    %
    
    
    2.7
    %
 Quarter Ended March 31, 2008 Compared to the Quarter Ended March 31, 2007
 Accounts Payable Services
 Revenue
 2008
    
    
    2007Domestic Accounts Payable Services revenue
    
    $
    28.2
    
    
    $
    37.0International Accounts Payable Services revenue
    
    
    20.1
    
    
    
    20.0Total Accounts Payable Services
revenue
    
    $
    48.3
    
    
    $
    57.0
  14




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Cost of Revenues ( ).
 15




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2008
    
    
    2007Domestic Accounts Payable Services COR
    
    $
    15.7
    
    
    $
    21.8International Accounts Payable Services COR
    
    
    14.6
    
    
    
    15.4Total Accounts Payable Services COR
    
    $
    30.3
    
    
    $
    37.2
     Selling, General, and Administrative Expenses .
  2008
    
    
    2007Domestic Accounts Payable Services SG&A
    
    $
    4.3
    
    
    $
    3.6International Accounts Payable Services SG&A
    
    
    1.9
    
    
    
    2.8Total Accounts Payable Services SG&A
    
    $
    6.2
    
    
    $
    6.4
  Corporate Support
 SG&A.
 16




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##### Table of Contents



2008
    
    
    2007Selling, general and administrative expenses
    
    $
    6.6
    
    
    $
    7.3
  Discontinued Operations
  
 Other Items
 Interest Expense.
 Income Tax Expense.
 17




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Liquidity and Capital Resources
    .
 Off Balance Sheet Arrangements
  Executive Severance Payments
  Bankruptcy Litigation
  18




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Secured Credit Facility
    Stock Repurchase Program
  2006 Management Incentive Plan
  19




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Forward Looking Statements
   20




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Market Risk.
 Interest Rate Risk
 Stock-Based Compensation.
 21




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Item 4. Controls and Procedures
    22




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  23




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##### Table of Contents



Item 6. Exhibits
 ExhibitNumber
    
    Description3.1
    
    Restated Articles of Incorporation of the Registrant, as amended
and corrected through August 11, 2006 (restated solely for the
purpose of filing with the Commission) (incorporated by reference
to Exhibit 3.1 to the Registrants Report on Form 8-K filed on
August 17, 2006).3.2
    
    Amended and Restated Bylaws of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrants Form 8-K filed on
December 11, 2007).4.1
    
    Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Registrants Form 10-K for the year ended
December 31, 2001).4.2
    
    See Restated Articles of Incorporation and Bylaws of the
Registrant, filed as Exhibits 3.1 and 3.2, respectively.4.3
    
    Shareholder Protection Rights Agreement, dated as of August 9,
2000, between the Registrant and Rights Agent, effective May 1,
2002 (incorporated by reference to Exhibit 4.3 to the Registrants
Form 10-Q for the quarterly period ended June 30, 2002).4.3.1
    
    First Amendment to Shareholder Protection Rights Agreement, dated
as of March 12, 2002, between the Registrant and Rights Agent
(incorporated by reference to Exhibit 4.3 to the Registrants Form
10-Q for the quarterly period ended September 30, 2002).4.3.2
    
    Second Amendment to Shareholder Protection Rights Agreement, dated
as of August 16, 2002, between the Registrant and Rights Agent
(incorporated by reference to Exhibit 4.3 to the Registrants Form
10-Q for the quarterly period ended September 30, 2002).4.3.3
    
    Third Amendment to Shareholder Protection Rights Agreement, dated
as of November 7, 2006, between the Registrant and Rights Agent
(incorporated by reference to Exhibit 4.1 to the Registrants Form
8-K filed on November 14, 2005).4.3.4
    
    Fourth Amendment to Shareholder Protection Rights Agreement, dated
as of November 14, 2006, between the Registrant and Rights Agent
(incorporated by reference to Exhibit 4.1 to the Registrants Form
8-K filed on November 30, 2005).4.3.5
    
    Fifth Amendment to Shareholder Protection Rights Agreement, dated
as of March 9, 2006, between the Registrant and Rights Agent
(incorporated by reference to Exhibit 4.9 to the Registrants Form
10-K for the year ended December 31, 2005).4.3.6
    
    Sixth Amendment to Shareholder Protection Rights Agreement, dated
as of September 17, 2007, between the Registrant and Rights Agent
(incorporated by reference to Exhibit 4.1 to the Registrants Form
8-K filed on September 21, 2007).4.4
    
    Indenture dated November 26, 2001 by and between Registrant and
Sun Trust Bank (incorporated by reference to Exhibit 4.3 to the
Registrants Registration Statement No. 333-76018 on Form S-3
filed December 27, 2001).4.5
    
    Indenture dated as of March 17, 2006 governing 10% Senior
Convertible Notes due 2011, with Form of Note appended
(incorporated by reference to Exhibit 4.1 to the Registrants Form
8-K filed on March 23, 2006).4.5.1
    
    Supplemental Indenture to 10% Senior Convertible Notes Indenture
dated September 4, 2007 (incorporated by reference to Exhibit 10.2
to the Registrants Form 8-K filed on September 5, 2007).4.6
    
    Indenture dated as of March 17, 2006 governing 11% Senior Notes
due 2011, with Form of Note appended (incorporated by reference to
Exhibit 4.2 to the Registrants Form 8-K filed on March 23,
2006).4.6.1
    
    Supplemental Indenture to 11% Senior Notes Indenture dated
September 4, 2007 (incorporated by reference to Exhibit 10.1 to
the Registrants Form 8-K filed on September 5, 2007).10.1 *
    
    2008 PRG-Schultz Performance Bonus
Plan.31.1
    
    Certification of the Chief Executive Officer, pursuant to Rule
13a-14(a) or 15d-14(a), for the quarter ended March 31, 2008.31.2
    
    Certification of the Chief Financial Officer, pursuant to Rule
13a-14(a) or 15d-14(a), for the quarter ended March 31, 2008.
 24




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##### Table of Contents



ExhibitNumber
    
    Description32.1
    
    Certification of the Chief Executive Officer and Chief Financial
Officer, pursuant to 18 U.S.C. Section 1350, for the quarter ended
March 31, 2008.
 
 *
    
    Confidential treatment, pursuant to 17 CFR Secs. §§ 200.80 and 240.24b-2, has been requested
regarding certain portions of the indicated Exhibit, which portions have been filed separately with
the Commission. 25




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##### Table of Contents



SIGNATURES
  PRG-SCHULTZ INTERNATIONAL, INC.May 12, 2008
    By:
    /s/ James B. McCurryJames B. McCurryPresident, Chairman of the Board and Chief Executive Officer(Principal Executive Officer)May 12, 2008
    By:
    /s/ PETER LIMERIPeter Limeri.Chief Financial Officer and Treasurer(Principal Financial Officer) 26