Press Release Details
Hudson Global Reports 2018 Third Quarter Results
2018 Third Quarter Summary
- Revenue of
$17.1 million increased 7.7 percent from the third quarter of 2017 and increased 11.6 percent in constant currency. - Gross profit of
$10.9 million decreased 2.6 percent from the third quarter of 2017 but increased 0.3 percent in constant currency. - Net loss of
$0.9 million , or$0.03 per basic and diluted share, compared to net loss of$0.8 million , or$0.03 per basic and diluted share, for the third quarter of 2017. The results in the third quarter of 2017 included net loss from continuing operations of$0.5 million and net loss from discontinued operations of$0.4 million related to the sale of the recruitment and talent management businesses. - Adjusted EBITDA (Non-GAAP measure)* loss of
$0.3 million compared to adjusted EBITDA of$0.2 million in the third quarter of 2017.
"Similar to last quarter, the
Mr. Eberwein continued, "We have begun to invest in technology, sales personnel, and marketing in order to drive profitable growth in 2019 and beyond. In addition to these internal investments, we may also begin to look at profitable, bolt-on acquisition opportunities in 2019 after we have finished building the platform for our new company. Looking to the future, we are very excited about our pipeline of potential new business opportunities and the business we are building. As the only publicly-traded, pure-play RPO company, Hudson is uniquely positioned to capitalize on the fast-growing, global RPO market. Also, I am proud to say that Hudson RPO ranked among HRO Today's Bakers Dozen for 2018, which is the ninth consecutive year we have made this prestigious list of the top RPO providers in the world."
* The Company provides Non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in
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.
In the third quarter of 2018,
Liquidity and Capital Resources
The Company ended the third quarter of 2018 with
Share Repurchase Program
The Company has a common stock share repurchase authorization in place of
Business Outlook
With respect to forward-looking non-GAAP measures, a reconciliation of the non-GAAP measures to the corresponding GAAP measures is not available without unreasonable efforts due to the variability, complexity and low visibility of the non-cash and other items described below that we exclude from the non-GAAP outlook measures. The variability of these items is likely to have a significant impact on our future GAAP financial results.
The Company expects RPO operations before corporate costs to generate adjusted EBITDA of
Conference Call/Webcast
Hudson will conduct a conference call today at
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 #: 1597881
The archived call will be available on the investor information section of the Company's web site at hudsonrpo.com.
About Hudson
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
HUDSON GLOBAL, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue | $ | 17,127 | $ | 15,898 | $ | 50,357 | $ | 44,371 | ||||||||
Direct costs | 6,246 | 4,728 | 18,521 | 12,492 | ||||||||||||
Gross profit | 10,881 | 11,170 | 31,836 | 31,879 | ||||||||||||
Operating expenses: | ||||||||||||||||
Salaries and related | 8,925 | 9,331 | 28,586 | 26,884 | ||||||||||||
Other selling, general and administrative | 2,696 | 1,761 | 7,905 | 5,633 | ||||||||||||
Depreciation and amortization | 1 | 79 | 3 | 238 | ||||||||||||
Business reorganization | — | — | — | (112 | ) | |||||||||||
Total operating expenses | 11,622 | 11,171 | 36,494 | 32,643 | ||||||||||||
Operating income (loss) | (741 | ) | (1 | ) | (4,658 | ) | (764 | ) | ||||||||
Non-operating income (expense): | ||||||||||||||||
Interest income (expense), net | 102 | (3 | ) | 162 | (7 | ) | ||||||||||
Other income (expense), net | (72 | ) | (19 | ) | (184 | ) | (71 | ) | ||||||||
Income (loss) from continuing operation before provision for income taxes | (711 | ) | (23 | ) | (4,680 | ) | (842 | ) | ||||||||
Provision for income taxes from continuing operations | 112 | 459 | 393 | 850 | ||||||||||||
Income (loss) from continuing operations | (823 | ) | (482 | ) | (5,073 | ) | (1,692 | ) | ||||||||
Income (loss) from discontinued operations, net of income taxes | (47 | ) | (366 | ) | 13,560 | 756 | ||||||||||
Net income (loss) | $ | (870 | ) | $ | (848 | ) | $ | 8,487 | $ | (936 | ) | |||||
Basic and diluted earnings (loss) per share: | ||||||||||||||||
Basic and diluted earnings (loss) per share from continuing operations | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.15 | ) | $ | (0.05 | ) | ||||
Basic and diluted earnings (loss) per share from discontinued operations | — | (0.01 | ) | 0.41 | 0.02 | |||||||||||
Basic and diluted earnings (loss) per share | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.26 | $ | (0.03 | ) | |||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 33,101 | 32,151 | 32,746 | 32,120 | ||||||||||||
Diluted | 33,101 | 32,151 | 32,746 | 32,120 | ||||||||||||
HUDSON GLOBAL, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
September 30, 2018 |
December 31, 2017 |
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 38,436 | $ | 5,580 | ||||
Accounts receivable, less allowance for doubtful accounts of $52 and $69, respectively | 14,500 | 11,545 | ||||||
Prepaid and other | 594 | 388 | ||||||
Current assets of discontinued operations | — | 79,530 | ||||||
Total current assets | 53,530 | 97,043 | ||||||
Property and equipment, net | 149 | 1 | ||||||
Deferred tax assets, non-current | 350 | 324 | ||||||
Restricted cash, non-current | 352 | 102 | ||||||
Other assets | 55 | 269 | ||||||
Non-current assets of discontinued operations | — | 13,901 | ||||||
Total assets | $ | 54,436 | $ | 111,640 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,206 | $ | 1,193 | ||||
Accrued expenses and other current liabilities | 9,561 | 7,259 | ||||||
Current liabilities of discontinued operations | 61 | 51,952 | ||||||
Total current liabilities | 10,828 | 60,404 | ||||||
Income tax payable, non-current | 2,001 | 1,682 | ||||||
Other non-current liabilities | 295 | 192 | ||||||
Non-current liabilities of discontinued operations | — | 6,210 | ||||||
Total liabilities | 13,124 | 68,488 | ||||||
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; issued 36,135 and 34,959 shares, respectively | 34 | 34 | ||||||
Additional paid-in capital | 484,890 | 483,558 | ||||||
Accumulated deficit | (434,932 | ) | (443,419 | ) | ||||
Accumulated other comprehensive income | (399 | ) | 10,709 | |||||
Treasury stock, 4,087 and 3,800 shares, respectively, at cost | (8,281 | ) | (7,730 | ) | ||||
Total stockholders’ equity | 41,312 | 43,152 | ||||||
Total liabilities and stockholders' equity | $ | 54,436 | $ | 111,640 | ||||
HUDSON GLOBAL, INC. | ||||||||||||||||||||
SEGMENT ANALYSIS - QUARTER TO DATE | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For The Three Months Ended September 30, 2018 | Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total | |||||||||||||||
Revenue, from external customers | $ | 3,590 | $ | 9,306 | $ | 4,231 | $ | — | $ | 17,127 | ||||||||||
Gross profit, from external customers | $ | 2,990 | $ | 5,741 | $ | 2,150 | $ | — | $ | 10,881 | ||||||||||
Adjusted EBITDA (loss) (1) | $ | 323 | $ | 725 | $ | (39 | ) | $ | (1,293 | ) | $ | (284 | ) | |||||||
Stock-based compensation expense | 23 | 17 | 12 | 404 | 456 | |||||||||||||||
Non-operating expense (income), including corporate administration charges |
213 | 248 | 175 | (564 | ) | 72 | ||||||||||||||
EBITDA (loss) (1) | $ | 87 | $ | 460 | $ | (226 | ) | $ | (1,133 | ) | $ | (812 | ) | |||||||
Depreciation and amortization expenses | 1 | |||||||||||||||||||
Interest expense (income), net | (102 | ) | ||||||||||||||||||
Provision for (benefit from) income taxes | 112 | |||||||||||||||||||
Income (loss) from continuing operations | $ | (823 | ) | |||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (47 | ) | ||||||||||||||||||
Net income (loss) | $ | (870 | ) | |||||||||||||||||
For The Three Months Ended September 30, 2017 | Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total | |||||||||||||||
Revenue, from external customers | $ | 4,043 | $ | 8,081 | $ | 3,774 | $ | — | $ | 15,898 | ||||||||||
Gross profit, from external customers | $ | 3,667 | $ | 5,173 | $ | 2,330 | $ | — | $ | 11,170 | ||||||||||
Adjusted EBITDA (loss) (1) | $ | 579 | $ | 1,492 | $ | 408 | $ | (2,238 | ) | $ | 241 | |||||||||
Stock-based compensation expense | 20 | 3 | — | 140 | 163 | |||||||||||||||
Non-operating expense (income), including corporate administration charges |
76 | 110 | 93 | (260 | ) | 19 | ||||||||||||||
EBITDA (loss) (1) | $ | 483 | $ | 1,379 | $ | 315 | $ | (2,118 | ) | $ | 59 | |||||||||
Depreciation and amortization expenses | 79 | |||||||||||||||||||
Interest expense (income), net | 3 | |||||||||||||||||||
Provision for (benefit from) income taxes | 459 | |||||||||||||||||||
Income (loss) from continuing operations | $ | (482 | ) | |||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (366 | ) | ||||||||||||||||||
Net income (loss) | $ | (848 | ) | |||||||||||||||||
(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, stock-based compensation expense 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. However, EBITDA and adjusted EBITDA are not measures of financial performance under GAAP and 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 GAAP 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) | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For The Three Months Ended June 30, 2018 | Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total | |||||||||||||||
Revenue, from external customers | $ | 3,509 | $ | 9,600 | $ | 3,906 | $ | — | $ | 17,015 | ||||||||||
Gross profit, from external customers | $ | 2,923 | $ | 5,759 | $ | 2,119 | $ | — | $ | 10,801 | ||||||||||
Adjusted EBITDA (loss) (1) | $ | 148 | $ | 862 | $ | 188 | $ | (2,275 | ) | $ | (1,077 | ) | ||||||||
Stock-based compensation expense | 16 | 9 | 6 | 149 | 180 | |||||||||||||||
Non-operating expense (income), including corporate administration charges |
208 | 345 | 148 | (656 | ) | 45 | ||||||||||||||
EBITDA (loss) (1) | $ | (76 | ) | $ | 508 | $ | 34 | $ | (1,768 | ) | $ | (1,302 | ) | |||||||
Depreciation and amortization expenses | 2 | |||||||||||||||||||
Interest expense (income), net | (60 | ) | ||||||||||||||||||
Provision for (benefit from) income taxes | 109 | |||||||||||||||||||
Income (loss) from continuing operations | $ | (1,353 | ) | |||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (11 | ) | ||||||||||||||||||
Net income (loss) | $ | (1,364 | ) | |||||||||||||||||
For The Three Months Ended December 31, 2017 | Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total | |||||||||||||||
Revenue, from external customers | $ | 3,677 | $ | 8,528 | $ | 3,074 | $ | — | $ | 15,279 | ||||||||||
Gross profit, from external customers | $ | 3,181 | $ | 5,307 | $ | 1,729 | $ | 10,217 | ||||||||||||
Adjusted EBITDA (loss) (1) | $ | 517 | $ | 1,661 | $ | 136 | $ | (2,913 | ) | $ | (599 | ) | ||||||||
Business reorganization expenses (recovery) | 10 | — | (7 | ) | — | 3 | ||||||||||||||
Stock-based compensation expense | 23 | 2 | — | 262 | 287 | |||||||||||||||
Non-operating expense (income), including corporate administration charges |
23 | 62 | 53 | (55 | ) | 83 | ||||||||||||||
EBITDA (loss) (1) | $ | 461 | $ | 1,597 | $ | 90 | $ | (3,120 | ) | $ | (972 | ) | ||||||||
Depreciation and amortization expenses | 122 | |||||||||||||||||||
Interest expense (income), net | 1 | |||||||||||||||||||
Provision for (benefit from) income taxes | 18 | |||||||||||||||||||
Income (loss) from continuing operations | $ | (1,113 | ) | |||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (892 | ) | ||||||||||||||||||
Net income (loss) | $ | (2,005 | ) | |||||||||||||||||
(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, stock-based compensation expense 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. However, EBITDA and adjusted EBITDA are not measures of financial performance under GAAP and 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 GAAP 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 (continued) | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For The Nine Months Ended September 30, 2018 | Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total | |||||||||||||||
Revenue, from external customers | $ | 10,799 | $ | 27,731 | $ | 11,827 | $ | — | $ | 50,357 | ||||||||||
Gross profit, from external customers | $ | 9,039 | $ | 16,423 | $ | 6,374 | $ | — | $ | 31,836 | ||||||||||
Adjusted EBITDA (loss) (1) | $ | 841 | $ | 2,211 | $ | 200 | $ | (6,809 | ) | $ | (3,557 | ) | ||||||||
Stock-based compensation expense | 66 | 30 | 18 | 984 | 1,098 | |||||||||||||||
Non-operating expense (income), including corporate administration charges |
472 | 670 | 358 | (1,316 | ) | 184 | ||||||||||||||
EBITDA (loss) (1) | $ | 303 | $ | 1,511 | $ | (176 | ) | $ | (6,477 | ) | $ | (4,839 | ) | |||||||
Depreciation and amortization expenses | 3 | |||||||||||||||||||
Interest expense (income), net | (162 | ) | ||||||||||||||||||
Provision for (benefit from) income taxes | 393 | |||||||||||||||||||
Income (loss) from continuing operations | (5,073 | ) | ||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | 13,560 | |||||||||||||||||||
Net income (loss) | $ | 8,487 | ||||||||||||||||||
For The Nine Months Ended September 30, 2017 | Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total | |||||||||||||||
Revenue, from external customers | $ | 12,519 | $ | 21,240 | $ | 10,612 | $ | — | $ | 44,371 | ||||||||||
Gross profit, from external customers | $ | 11,239 | $ | 14,084 | $ | 6,556 | $ | — | $ | 31,879 | ||||||||||
Adjusted EBITDA (loss) (1) | $ | 1,317 | $ | 3,488 | $ | 1,081 | $ | (5,766 | ) | $ | 120 | |||||||||
Business reorganization expenses (recovery) | (91 | ) | — | 1 | (22 | ) | (112 | ) | ||||||||||||
Stock-based compensation expense | 73 | 7 | — | 677 | 757 | |||||||||||||||
Non-operating expense (income), including corporate administration charges |
218 | 308 | 215 | (669 | ) | 72 | ||||||||||||||
EBITDA (loss) (1) | $ | 1,117 | $ | 3,173 | $ | 865 | $ | (5,752 | ) | $ | (597 | ) | ||||||||
Depreciation and amortization expenses | 238 | |||||||||||||||||||
Interest expense (income), net | 7 | |||||||||||||||||||
Provision for (benefit from) income taxes | 850 | |||||||||||||||||||
Income (loss) from continuing operations | (1,692 | ) | ||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | 756 | |||||||||||||||||||
Net income (loss) | $ | (936 | ) | |||||||||||||||||
(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, stock-based compensation expense 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. However, EBITDA and adjusted EBITDA are not measures of financial performance under GAAP and 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 GAAP 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.
RECONCILIATION FOR CONSTANT CURRENCY
(in thousands) (unaudited)
The Company operates on a global basis, with the majority of its gross profit generated outside of
Three Months Ended September 30, | |||||||||||||||
2018 | 2017 | ||||||||||||||
As | As | Currency | Constant | ||||||||||||
reported | reported | translation | currency | ||||||||||||
Revenue: | |||||||||||||||
Hudson Americas | $ | 3,590 | $ | 4,043 | $ | (6 | ) | $ | 4,037 | ||||||
Hudson Asia Pacific | 9,306 | 8,081 | (525 | ) | 7,556 | ||||||||||
Hudson Europe | 4,231 | 3,774 | (23 | ) | 3,751 | ||||||||||
Total | $ | 17,127 | $ | 15,898 | $ | (554 | ) | $ | 15,344 | ||||||
Gross profit: | |||||||||||||||
Hudson Americas | $ | 2,990 | $ | 3,667 | $ | (6 | ) | $ | 3,661 | ||||||
Hudson Asia Pacific | 5,741 | 5,173 | (303 | ) | 4,870 | ||||||||||
Hudson Europe | 2,150 | 2,330 | (32 | ) | 2,298 | ||||||||||
Total | $ | 10,881 | $ | 11,170 | $ | (341 | ) | $ | 10,829 | ||||||
SG&A (1): | |||||||||||||||
Hudson Americas | $ | 2,689 | $ | 3,153 | $ | 3 | $ | 3,156 | |||||||
Hudson Asia Pacific | 5,032 | 3,687 | (221 | ) | 3,466 | ||||||||||
Hudson Europe | 2,202 | 1,878 | (10 | ) | 1,868 | ||||||||||
Corporate | 1,698 | 2,374 | — | 2,374 | |||||||||||
Total | $ | 11,621 | $ | 11,092 | $ | (228 | ) | $ | 10,864 | ||||||
Operating income (loss): | |||||||||||||||
Hudson Americas | $ | 300 | $ | 558 | $ | (10 | ) | $ | 548 | ||||||
Hudson Asia Pacific | 708 | 1,486 | (80 | ) | 1,406 | ||||||||||
Hudson Europe | (53 | ) | 408 | (7 | ) | 401 | |||||||||
Corporate | (1,696 | ) | (2,453 | ) | — | (2,453 | ) | ||||||||
Total | $ | (741 | ) | $ | (1 | ) | $ | (97 | ) | $ | (98 | ) | |||
EBITDA (loss): | |||||||||||||||
Hudson Americas | $ | 87 | $ | 483 | $ | (12 | ) | $ | 471 | ||||||
Hudson Asia Pacific | 460 | 1,379 | (73 | ) | 1,306 | ||||||||||
Hudson Europe | (226 | ) | 315 | (23 | ) | 292 | |||||||||
Corporate | (1,133 | ) | (2,118 | ) | — | (2,118 | ) | ||||||||
Total | $ | (812 | ) | $ | 59 | $ | (108 | ) | $ | (49 | ) |
(1) SG&A is a measure that management uses to evaluate the segments’ expenses and includes salaries and related costs and other selling, general and administrative costs.
Contact: | Patrick Lyons | |
Hudson | ||
212-351-7425 | ||
patrick.lyons@hudsonrpo.com |