Stock Ticker

HSON (Common Stock)

ExchangeNASDAQ (US Dollar)
Price$1.50
Change (%) Stock is Down 0.03 (1.96%)
Volume7,783
As of 03/18/19 4:00 p.m. ET
Minimum 20 minute delay
Refresh quote

Press Releases

<< Back

Hudson Global Reports 2018 Fourth Quarter and Full-Year Results

OLD GREENWICH, Conn., March 08, 2019 (GLOBE NEWSWIRE) -- Hudson Global, Inc. (Nasdaq: HSON), a leading global talent solutions company, today announced financial results for the fourth quarter and full-year ended December 31, 2018.

2018 Fourth Quarter Summary

  • Revenue of $16.6 million increased 8.7 percent from the fourth quarter of 2017, or 13.3 percent in constant currency.
     
  • Gross profit of $10.3 million increased 0.8 percent from the fourth quarter of 2017, or 4.6 percent in constant currency.
     
  • Net loss of $0.6 million, or $0.02 per basic and diluted share, compared to net loss of $2.0 million, or $0.06 per basic and diluted share, for the fourth quarter of 2017.
     
  • Adjusted EBITDA* loss of $0.3 million, compared to an adjusted EBITDA loss of $0.6 million in the fourth quarter of 2017.

2018 Full-Year Summary

  • Revenue of $66.9 million increased 12.3 percent from 2017, or 12.7 percent in constant currency.
     
  • Gross profit of $42.1 million increased 0.1 percent from 2017, or 0.2 percent in constant currency.
     
  • Net income of $7.9 million, or $0.24 per basic and diluted share, compared to net loss of $2.9 million, or $0.09 per basic and diluted share, in 2017.
     
  • Adjusted EBITDA* loss of $3.9 million, which includes $2.4 million of severance expense, compared to an adjusted EBITDA loss of $0.5 million in 2017.

"We delivered solid revenue and gross profit growth in the fourth quarter in constant currency, particularly so in the Asia Pacific region," said Jeff Eberwein, chief executive officer at Hudson Global.  "In addition, we are pleased to report positive cash flow from operations in the fourth quarter.  For 2018, we delivered revenue and gross profit growth while also focusing on carving out the RPO business from legacy entities and right-sizing the new company by reducing corporate costs.  I am proud of how hard the team has worked over the past year to build the systems and infrastructure necessary for a successful separation from the legacy businesses."

As previously announced, the company sold all of its recruitment agency and talent management businesses in three separate transactions that closed at the end of March 2018.  These transactions were all structured as equity sales, meaning all the assets and liabilities of the legacy entities were assumed by the buyers, except for the RPO business which remained with the company but was largely embedded inside the businesses being sold.  Since that time, the company has had a strong internal focus on creating new legal entities and obtaining new business licenses in each country in which it operates, creating an accounting and finance system from scratch, as well as creating a new IT system and website.  Now that the platform for the operating business has been built and corporate overhead costs have been right sized, the company has begun to look at bolt-on acquisition opportunities in addition to focusing intensively on organic growth.  As highlighted in the Investor Presentation issued in December 2018, Hudson Global will focus on acquisition targets that are profitable, complementary to its RPO business, and accretive to stockholder value.

Given the company's cash balance and financial strength, it can pursue both stock buybacks and bolt-on acquisition opportunities simultaneously going forward, and will continually evaluate both options in order to achieve its mission of maximizing stockholder value over the long term.

* The company provides Non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in the United States ("GAAP").  Constant currency, Adjusted EBITDA, and EBITDA are defined in the segment tables at the end of this release and a reconciliation of such Non-GAAP measures to the most directly comparable GAAP measures is included within such segment tables.

Regional Highlights

The divested businesses are treated as discontinued operations; therefore, the discussion below is focused on the continuing operations of the RPO business for all periods presented.  Prior period EBITDA and Adjusted EBITDA may not be comparable due to regional support and infrastructure cost allocation treatment between continuing and discontinued operations following the divestitures.

Asia Pacific

Asia Pacific's gross profit increased 10 percent in constant currency in the fourth quarter of 2018 compared to the same period in 2017.  Gross profit growth across the region was led by Asia, up 46 percent, with strong growth in China and Hong Kong, up 53 percent and 44 percent respectively, from a year ago.  EBITDA was $0.7 million in the fourth quarter, compared to EBITDA of $1.6 million a year ago. Asia Pacific delivered adjusted EBITDA of $0.9 million, versus adjusted EBITDA of $1.7 million in the fourth quarter of 2017.

In 2018, gross profit increased 15 percent in Hudson Asia Pacific in constant currency compared to 2017.  Results were driven largely by new contract wins in Asia.  EBITDA in 2018 was $2.2 million, compared to EBITDA of $4.8 million in 2017.  Adjusted EBITDA was $3.2 million, down from $5.1 million in 2017.

Americas

In the fourth quarter of 2018, Americas' gross profit decreased 15 percent in constant currency compared to the fourth quarter of 2017, primarily due to weaker volumes at two existing clients.  EBITDA was $0.1 million in the fourth quarter, down from $0.5 million last year.  The region delivered adjusted EBITDA of $0.2 million for the fourth quarter, compared to adjusted EBITDA of $0.5 million a year ago.

Americas' gross profit in 2018 decreased 19 percent in constant currency from 2017, due to the loss of a global client in 2017 as well as lower volumes at existing clients.  EBITDA was $0.4 million in 2018, compared to $1.6 million in 2017.  Adjusted EBITDA was $1.1 million in 2018, compared to adjusted EBITDA of $1.8 million in 2017.

Europe

Europe's gross profit increased 26 percent in constant currency in the fourth quarter of 2018 compared to the fourth quarter of 2017.  Gross profit growth was driven by the UK, which was up 26 percent.  EBITDA loss was $0.3 million in the fourth quarter, compared to EBITDA of $0.1 million a year ago.  Adjusted EBITDA loss was $0.3 million in the fourth quarter of 2018, compared to adjusted EBITDA of $0.1 million a year ago.

Europe's gross profit decreased 2 percent in 2018 in constant currency compared to 2017.  In the U.K., gross profit grew 26%, a reflection of a very strong year for the region.  This growth was offset by the loss of the global client in 2017 mentioned above.  EBITDA loss was $0.5 million in 2018, compared to EBITDA of $0.9 million in 2017.  Adjusted EBITDA loss was $0.1 million, compared to adjusted EBITDA of $1.2 million in 2017.

Liquidity and Capital Resources

The company ended the fourth quarter of 2018 with $41.1 million in cash, which includes $0.5 million in restricted cash.  The company had no credit facilities in place at the end of the fourth quarter of 2018, but remains in discussions with various lenders about new credit facilities to fund the working capital needs of the RPO business.  The company generated $2.8 million in cash flow from operations during the fourth quarter due to improvements in working capital.
           
Share Repurchase Program

During the fourth quarter, the company continued its share repurchase program which has an authorization of up to $10 million of the company’s common stock.  The company purchased 142,608 shares for $0.2 million as part of its existing Rule 10b5-1 repurchase program during the fourth quarter.  Since the inception of this program in the third quarter of 2015 through the end of the fourth quarter of 2018, the company has purchased 3,784,213 shares for $7.6 million.

On February 19, 2019 the Board of Directors announced a tender offer to buy up to 3.15 million shares of the company's common stock at a price of $1.50 per share.  The tender offer commenced on February 22, 2019 and expires on March 22, 2019.

Corporate Costs

Immediately following the closing of the divestitures at the end of the first quarter of 2018, management reviewed the company's corporate costs on a line-by-line basis.  The company believes the run rate for corporate costs in 2019 should be approximately $4 million, which is about 50% lower than in 2018 including severance costs, or about one-third lower excluding severance costs.  This reduction has come without any impact on its operating business.

Business Outlook

For 2019, the company expects to grow revenue and gross profit more than 10 percent versus 2018, and adjusted EBITDA before corporate costs should grow faster than this rate.  This combination of growth in its RPO business and reduction in corporate costs should enable the company to generate positive adjusted EBITDA in 2019.

NOL Carryforward

Hudson Global has $341 million of net operating losses (“NOL”) in the U.S., which the company considers to be a very valuable asset for its stockholders.  In order to protect the value of the NOL for all stockholders, the company has a rights agreement and charter amendment in place that limit beneficial ownership of Hudson Global common stock to 4.99%.  Stockholders who wish to own more than 4.99% of Hudson Global common stock, or who already own more than 4.99% of Hudson Global common stock and wish to buy more, may only acquire additional shares with the Board’s prior written approval.

Conference Call/Webcast

Hudson will conduct a conference call today at 10:00 a.m. ET to discuss this announcement.  Individuals wishing to listen can access the webcast on the investor information section of the company's web site at hudsonrpo.com.  Questions can be emailed to ir@hudsonrpo.com.

If you wish to join the conference call, please use the dial-in information below:

  • Toll-Fee Dial-In Number: (877) 497-1434
  • International Dial-In Number: (929) 387-3951
  • Conference ID #: 7265969

The archived call will be available on the investor information section of the company's web site at hudsonrpo.com.

About Hudson RPO

Hudson Global, Inc. is a leading total talent solutions provider operating under the brand name Hudson RPO.  We deliver innovative, customized recruitment outsourcing and total talent solutions to organizations worldwide.  Through our consultative approach, we develop tailored talent solutions designed to meet our clients’ strategic growth initiatives.  As a trusted advisor, we meet our commitments, deliver quality and value, and always aim to exceed expectations.

For more information, please visit us at hudsonrpo.com or contact us at ir@hudsonrpo.com.

Forward-Looking Statements

This press release contains statements that the company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to, Hudson Global’s ability to achieve anticipated benefits from the sales of its recruitment and talent management operations in Europe and Asia Pacific and operate successfully as a company focused on its RPO business; global economic fluctuations; the company’s ability to successfully achieve its strategic initiatives; risks related to fluctuations in the company's operating results from quarter to quarter; the ability of clients to terminate their relationship with the company at any time and the impact of any loss of a significant client; competition in the company's markets; the negative cash flows and operating losses that may recur in the future; risks associated with the company's investment strategy; risks related to international operations, including foreign currency fluctuations; the company's dependence on key management personnel; the company's ability to attract and retain highly skilled professionals; the company's ability to collect accounts receivable; the company’s ability to maintain costs at an acceptable level; the company's heavy reliance on information systems and the impact of potentially losing or failing to develop technology; risks related to providing uninterrupted service to clients; the company's exposure to employment-related claims from clients, employers and regulatory authorities, current and former employees in connection with the company’s business reorganization initiatives and limits on related insurance coverage; the company’s ability to utilize net operating loss carry-forwards; volatility of the company's stock price; the impact of government regulations; restrictions imposed by blocking arrangements; and risks related to potential acquisitions or dispositions of businesses by the company. Additional information concerning these and other factors is contained in the company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. The company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Financial Tables Follow

 
HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
               
  Three Months Ended   Year Ended
  December 31,   December 31,
  2018   2017   2018   2017
Revenue $ 16,575     $ 15,244     $ 66,932     $ 59,615  
Direct costs 6,307     5,061     24,828     17,555  
Gross profit 10,268     10,183     42,104     42,060  
Operating expenses:              
Selling, general and administrative expenses 10,814     11,102     47,305     43,617  
Depreciation and amortization 13     120     16     361  
Business reorganization     3         (109 )
Total operating expenses 10,827     11,225     47,321     43,869  
Operating income (loss) (559 )   (1,042 )   (5,217 )   (1,809 )
Non-operating income (expense):              
Interest income (expense), net 136     (1 )   298     (8 )
Other income (expense), net (64 )   (88 )   (248 )   (158 )
Income (loss) before provision for income taxes from continuing operations (487 )   (1,131 )   (5,167 )   (1,975 )
Provision for (benefit from) income taxes (294 )   18     99     869  
Income (loss) from continuing operations (193 )   (1,149 )   (5,266 )   (2,844 )
Income (loss) from discontinued operations, net of income taxes (427 )   (856 )   13,133     (97 )
Net income (loss) $ (620 )   $ (2,005 )   $ 7,867     $ (2,941 )
Earnings (loss) per share:              
Basic and diluted              
Income (loss) from continuing operations $ (0.01 )   $ (0.04 )   $ (0.16 )   $ (0.09 )
Income (loss) from discontinued operations (0.01 )   (0.03 )   0.40      
Net income (loss) $ (0.02 )   $ (0.06 )   $ 0.24     $ (0.09 )
Weighted-average shares outstanding:              
Basic 33,149     32,063     32,847     32,106  
Diluted 33,149     32,063     32,847     32,106  


 
HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
       
  December 31,
 2018
  December 31,
 2017
ASSETS      
Current assets:      
Cash and cash equivalents $ 40,562     $ 5,580  
Accounts receivable, less allowance for doubtful accounts of $41 and $69, respectively 9,893     11,545  
Prepaid and other 671     388  
Current assets of discontinued operations 941     79,530  
Total current assets 52,067     97,043  
Property and equipment, net 170     1  
Deferred tax assets, non-current 583     324  
Restricted cash, non-current 352     102  
Other assets 7     269  
Non-current assets of discontinued operations     13,901  
Total assets $ 53,179     $ 111,640  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 1,461     $ 1,193  
Accrued expenses and other current liabilities 8,984     7,259  
Current liabilities of discontinued operations 115     51,952  
Total current liabilities 10,560     60,404  
Income tax payable, non-current 1,982     1,682  
Other non-current liabilities 150     192  
Non-current liabilities of discontinued operations     6,210  
Total liabilities 12,692     68,488  
Commitments and contingencies      
Stockholders’ equity:      
Preferred stock, $0.001 par value, 10,000 shares authorized; none issued or outstanding      
Common stock, $0.001 par value, 100,000 shares authorized; 36,135 and 34,959 shares issued; 31,905 and 31,159 shares outstanding, respectively 36
    34  
Additional paid-in capital 485,095     483,558  
Accumulated deficit (435,552 )   (443,419 )
Accumulated other comprehensive income (606 )   10,709  
Treasury stock, 4,230 and 3,800 shares, respectively, at cost (8,486 )   (7,730 )
Total stockholders’ equity 40,487     43,152  
Total liabilities and stockholders' equity $ 53,179     $ 111,640  
               


HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - QUARTER TO DATE
(in thousands)
(unaudited)
                     
For The Three Months Ended December 31, 2018   Hudson
Asia Pacific
  Hudson
Americas
  Hudson
Europe
  Corporate   Total
Revenue, from external customers   $ 9,215     $ 3,124     $ 4,236     $     $ 16,575  
Gross profit, from external customers   $ 5,513     $ 2,686     $ 2,069     $     $ 10,268  
Net income (loss)                   $ (620 )
Income (loss) from discontinued operations, net of income taxes                   (427 )
Income (loss) from continuing operations                   (193 )
Provision for (benefit from) income taxes                   (294 )
Interest expense (income), net                   (136 )
Depreciation and amortization expenses                   13  
EBITDA (loss) (1)   $ 705     $ 137     $ (265 )   $ (1,187 )   (610 )
Non-operating expense (income),
including corporate administration charges
  220     91     (1 )   (246 )   64  
Stock-based compensation expense   21     13     (9 )   184     209  
Adjusted EBITDA (loss) (1)   $ 946     $ 241     $ (275 )   $ (1,249 )   $ (337 )
                     
For The Three Months Ended December 31, 2017   Hudson
Asia Pacific
  Hudson
Americas
  Hudson
Europe
  Corporate   Total
Revenue, from external customers   $ 8,527     $ 3,677     $ 3,040     $     $ 15,244  
Gross profit, from external customers   $ 5,306     $ 3,180     $ 1,697     $     $ 10,183  
Net income (loss)                   $ (2,005 )
Income (loss) from discontinued operations, net of income taxes                   (856 )
Income (loss) from continuing operations                   (1,149 )
Provision for (benefit from) income taxes                   18  
Interest expense (income), net                   1  
Depreciation and amortization expenses                   120  
EBITDA (loss) (1)   $ 1,597     $ 461     $ 54     $ (3,122 )   (1,010 )
Non-operating expense (income),
including corporate administration charges
  63     24     53     (52 )   88  
Stock-based compensation expense   2     23         262     287  
Business reorganization expenses (recovery)       9     (6 )       3  
Adjusted EBITDA (loss) (1)   $ 1,662     $ 517     $ 101     $ (2,912 )   $ (632 )
  1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.
 
HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - QUARTER TO DATE (continued)
(in thousands)
(unaudited)
                     
For The Three Months Ended September 30, 2018   Hudson
Asia Pacific
  Hudson
Americas
  Hudson
Europe
  Corporate   Total
Revenue, from external customers   $ 9,306     $ 3,590     $ 4,231     $     $ 17,127  
Gross profit, from external customers   $ 5,741     $ 2,990     $ 2,150     $     $ 10,881  
Net income (loss)                   $ (870 )
Income (loss) from discontinued operations, net of income taxes                   (47 )
Income (loss) from continuing operations                   (823 )
Provision for (benefit from) income taxes                   112  
Interest expense (income), net                   (102 )
Depreciation and amortization expenses                   1  
EBITDA (loss) (1)   $ 460     $ 87     $ (226 )   $ (1,133 )   (812 )
Non-operating expense (income),
including corporate administration charges
  248     213     175     (564 )   72  
Stock-based compensation expense   17     23     12     404     456  
Adjusted EBITDA (loss) (1)   $ 725     $ 323     $ (39 )   $ (1,293 )   $ (284 )
                     
For The Three Months Ended March 31, 2018   Hudson
Asia Pacific
  Hudson
Americas
  Hudson
Europe
  Corporate   Total
Revenue, from external customers   $ 8,825     $ 3,700     $ 3,690     $     $ 16,215  
Gross profit, from external customers   $ 4,923     $ 3,126     $ 2,105     $     $ 10,154  
Net income (loss)                   $ 10,721  
Income (loss) from discontinued operations, net of income taxes                   13,618  
Income (loss) from continuing operations                   (2,897 )
Provision for (benefit from) income taxes                   172  
Interest expense (income), net                    
Depreciation and amortization expenses                    
EBITDA (loss) (1)   $ 544     $ 291     $ 11     $ (3,571 )   (2,725 )
Non-operating expense (income),
including corporate administration charges
  75     52     41     (100 )   68  
Stock-based compensation expense   4     27         432     463  
Adjusted EBITDA (loss) (1)   $ 623     $ 370     $ 52     $ (3,239 )   $ (2,194 )
  1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.
 
HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - YEAR TO DATE
(in thousands)
(unaudited)
                     
For The Year Ended December 31, 2018   Hudson
Asia Pacific
  Hudson
Americas
  Hudson
Europe
  Corporate   Total
Revenue, from external customers   $ 36,946     $ 13,924     $ 16,062     $     $ 66,932  
Gross profit, from external customers   $ 21,936     $ 11,726     $ 8,442     $     $ 42,104  
Net income (loss)                   $ 7,867  
Income (loss) from discontinued operations, net of income taxes                   13,133  
Income (loss) from continuing operations                   (5,266 )
Provision for (benefit from) income taxes                   99  
Interest expense (income), net                   (298 )
Depreciation and amortization expenses                   16  
EBITDA (loss) (1)   $ 2,221     $ 440     $ (450 )   $ (7,660 )   (5,449 )
Non-operating expense (income),
including corporate administration charges
  885     563     366     (1,566 )   248  
Stock-based compensation expense   51     79     9     1,167     1,306  
Adjusted EBITDA (loss) (1)   $ 3,157     $ 1,082     $ (75 )   $ (8,059 )   $ (3,895 )
                     
For The Year Ended December 31, 2017   Hudson
Asia Pacific
  Hudson
Americas
  Hudson
Europe
  Corporate   Total
Revenue, from external customers   $ 29,767     $ 16,196     $ 13,652     $     $ 59,615  
Gross profit, from external customers   $ 19,391     $ 14,419     $ 8,250     $     $ 42,060  
Net income (loss)                   $ (2,941 )
Income (loss) from discontinued operations, net of income taxes                   (97 )
Income (loss) from continuing operations                   (2,844 )
Provision for (benefit from) income taxes                   869  
Interest expense (income), net                   8  
Depreciation and amortization expenses                   361  
EBITDA (loss) (1)   $ 4,770     $ 1,578     $ 923     $ (8,877 )   (1,606 )
Non-operating expense (income),
including corporate administration charges
  370     242     264     (718 )   158  
Stock-based compensation expense   9     96         939     1,044  
Business reorganization expenses (recovery)       (82 )   (5 )   (22 )   (109 )
Adjusted EBITDA (loss) (1)   $ 5,149     $ 1,834     $ 1,182     $ (8,678 )   $ (513 )
  1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.

HUDSON GLOBAL, INC.
RECONCILIATION FOR CONSTANT CURRENCY
(in thousands)
(unaudited)

The company operates on a global basis, with the majority of its gross profit generated outside of the United States. Accordingly, fluctuations in foreign currency exchange rates can affect its results of operations. Constant currency information compares financial results between periods as if exchange rates had remained constant period-over-period. The company currently defines the term “constant currency” to mean that financial data for a previously reported period are translated into U.S. dollars using the same foreign currency exchange rates that were used to translate financial data for the current period.  Changes in revenue, gross profit, selling, general and administrative expenses ("SG&A"), business reorganization expenses and other non-operating income (expense), operating income (loss) and EBITDA (loss) include the effect of changes in foreign currency exchange rates. Variance analysis usually describes period-to-period variances that are calculated using constant currency as a percentage. The company’s management reviews and analyzes business results in constant currency and believes these results better represent the company’s underlying business trends. The company believes that these calculations are a useful measure, indicating the actual change in operations. There are no significant gains or losses on foreign currency transactions between subsidiaries. Therefore, changes in foreign currency exchange rates generally impact only reported earnings.

  For The Three Months Ended December 31,
  2018   2017
  As   As   Currency   Constant
  reported   reported   translation   currency
Revenue:              
Hudson Asia Pacific $ 9,215     $ 8,527     $ (516 )   $ 8,011  
Hudson Americas 3,124     3,677     (7 )   3,670  
Hudson Europe 4,236     3,040     (90 )   2,950  
Total $ 16,575     $ 15,244     $ (613 )   $ 14,631  
Gross profit:              
Hudson Asia Pacific $ 5,513     $ 5,306     $ (305 )   $ 5,001  
Hudson Americas 2,686     3,180     (7 )   3,173  
Hudson Europe 2,069     1,697     (52 )   1,645  
Total $ 10,268     $ 10,183     $ (364 )   $ 9,819  
SG&A (1):              
Hudson Asia Pacific $ 4,568     $ 3,646     $ (210 )   $ 3,436  
Hudson Americas 2,480     2,681     (5 )   2,676  
Hudson Europe 2,332     1,600     (43 )   1,557  
Corporate 1,434     3,175         3,175  
Total $ 10,814     $ 11,102     $ (258 )   $ 10,844  
Operating income (loss):              
Hudson Asia Pacific $ 918     $ 1,659     $ (94 )   $ 1,565  
Hudson Americas 225     485     (3 )   482  
Hudson Europe (271 )   108     (7 )   101  
Corporate (1,431 )   (3,294 )       (3,294 )
Total $ (559 )   $ (1,042 )   $ (104 )   $ (1,146 )
EBITDA (loss):              
Hudson Asia Pacific $ 705     $ 1,597     $ (94 )   $ 1,503  
Hudson Americas 137     461     (2 )   459  
Hudson Europe (265 )   54     (5 )   49  
Corporate (1,187 )   (3,122 )       (3,122 )
Total $ (610 )   $ (1,010 )   $ (101 )   $ (1,111 )

Note: Certain prior year amounts have been reclassified to conform to the current period presentation.

  1. SG&A is a measure that management uses to evaluate the segments’ expenses.
 
HUDSON GLOBAL, INC.
RECONCILIATION FOR CONSTANT CURRENCY (continued)
(in thousands)
(unaudited)
 
  For The Year Ended December 31,
  2018   2017
  As   As   Currency   Constant
  reported   reported   translation   currency
Revenue:              
Hudson Asia Pacific $ 36,946     $ 29,767     $ (744 )   $ 29,023  
Hudson Americas 13,924     16,196     5     16,201  
Hudson Europe 16,062     13,652     534     14,186  
Total $ 66,932     $ 59,615     $ (205 )   $ 59,410  
Gross profit:              
Hudson Asia Pacific $ 21,936     $ 19,391     $ (395 )   $ 18,996  
Hudson Americas 11,726     14,419     4     14,423  
Hudson Europe 8,442     8,250     340     8,590  
Total $ 42,104     $ 42,060     $ (51 )   $ 42,009  
SG&A (1):              
Hudson Asia Pacific $ 18,811     $ 14,253     $ (257 )   $ 13,996  
Hudson Americas 10,742     12,710     18     12,728  
Hudson Europe 8,527     7,040     295     7,335  
Corporate 9,225     9,614         9,614  
Total $ 47,305     $ 43,617     $ 56     $ 43,673  
Operating income (loss):              
Hudson Asia Pacific $ 3,103     $ 5,137     $ (137 )   $ 5,000  
Hudson Americas 1,000     1,818     (13 )   1,805  
Hudson Europe (93 )   1,187     43     1,230  
Corporate (9,227 )   (9,951 )       (9,951 )
Total $ (5,217 )   $ (1,809 )   $ (107 )   $ (1,916 )
EBITDA (loss):              
Hudson Asia Pacific $ 2,221     $ 4,770     $ (133 )   $ 4,637  
Hudson Americas 440     1,578     (16 )   1,562  
Hudson Europe (450 )   923     12     935  
Corporate (7,660 )   (8,877 )       (8,877 )
Total $ (5,449 )   $ (1,606 )   $ (137 )   $ (1,743 )
  1. SG&A is a measure that management uses to evaluate the segments’ expenses.

Contact:                                                                       
ir@hudsonrpo.com

HudsonGlobal_logo_highres_red.png

Hudson Global, Inc.

Hudson Global, Inc. (NASDAQ: HSON) is a leading total talent solutions provider. Operating under the brand name Hudson RPO, we deliver innovative, customized recruitment outsourcing and total talent solutions to organizations worldwide. Through our consultative approach, we develop tailored talent solutions designed to meet our clients’ strategic growth initiatives. As a trusted advisor, we meet our commitments, deliver quality and value, and always aim to exceed expectations.