Press Release Details
Hudson Global Reports 2019 Fourth Quarter and Full-Year Results
2019 Fourth Quarter Summary
- Revenue of
$25.4 million increased 53.5 percent from the fourth quarter of 2018, or 56.6 percent in constant currency.
- Revenue less certain direct costs of
$11.1 million increased 8.3 percent from the fourth quarter of 2018, or 10.3 percent in constant currency.
- Net income improved to
$1.5 million , or$0.48 per basic and diluted share, from a net loss of$0.6 million , or$0.19 per basic and diluted share, in the fourth quarter of 2018.
- Adjusted EBITDA (Non-GAAP measure)* improved to
$0.9 million from an adjusted EBITDA loss of$0.3 million in the fourth quarter of 2018.
2019 Full-Year Summary
- Revenue of
$93.8 million increased 40.2 percent from 2018, or 46.5 percent in constant currency.
- Revenue less certain direct costs of
$43.6 million increased 3.5 percent from 2018, or 7.6 percent in constant currency.
- Net loss of
$1.0 million , or$0.30 per basic and diluted share, compared to net income of$7.9 million , or$2.39 per basic and diluted share, in 2018.
- Adjusted EBITDA (Non-GAAP measure)* improved to
$0.5 million from an adjusted EBITDA loss of$1.5 million in 2018.
“We delivered solid growth in the fourth quarter, particularly in
* The company provides Non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in
Regional Highlights
For full year 2019,
In the fourth quarter of 2019,
For full year 2019,
For full year 2019,
Corporate Costs
In the fourth quarter of 2019, the Company's corporate costs were
Liquidity and Capital Resources
The Company ended the fourth quarter of 2019 with
Share Repurchase Program
Under its
In addition, the Company completed a tender offer in
The Company continues to view opportunistic share repurchases as an attractive use of capital and expects to continue its aggressive share repurchase strategy going forward. As an example, on
NOL Carryforward
COVID-19 Update
As disclosed in the Company's press release issued
The Company is vigilantly monitoring the situation surrounding COVID-19 and will continue to proactively address this situation as it evolves. The Company is confident that it can continue to take appropriate actions to manage the business in this challenging environment due to the flexibility of its workforce and the strength of its balance sheet.
Conference Call/Webcast
The Company will conduct a conference call tomorrow,
If you wish to join the conference call, please use the dial-in information below:
- Toll-
Fee Dial -In Number: (866) 220-5784 - International Dial-In Number: (615) 622-8063
- Conference ID #: 5881638
The archived call will be available on the investor information section of the Company's web site at hudsonrpo.com.
About
For more information, please visit us at hudsonrpo.com or contact us at ir@hudsonrpo.com.
Investor Relations:
The Equity Group
212 836-9611 / lcati@equityny.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, global economic fluctuations; the adverse impacts of the recent coronavirus, or COVID-19 outbreak; the Company’s ability to successfully achieve its strategic initiatives; risks related to the Company’s large cash balance relative to its market capitalization as a small public company; risks related to potential acquisitions or dispositions of businesses by the Company; the Company’s ability to retain and recruit qualified management and/or advisors; the Company’s ability to operate successfully as a company focused on its RPO business; 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; competition in the Company's markets; the negative cash flows and operating losses that may recur in the future; risks relating to how future credit facilities may affect or restrict our operating flexibility; risks associated with the Company's investment strategy; risks related to international operations, including foreign currency fluctuations, political events, natural disasters or health crises, including the ongoing COVID-19 outbreak; 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; and restrictions imposed by blocking arrangements. Additional information concerning these, and other factors is contained in the Company's filings with the
Financial Tables Follow
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | $ | 25,448 | $ | 16,575 | $ | 93,811 | $ | 66,932 | |||||||
Operating expenses: | |||||||||||||||
Direct contracting costs and reimbursed expenses | 14,333 | 6,307 | 50,245 | 24,828 | |||||||||||
Selling, general and administrative expenses | 10,473 | 10,814 | 45,142 | 47,305 | |||||||||||
Depreciation and amortization | 23 | 13 | 85 | 16 | |||||||||||
Total operating expenses | 24,829 | 17,134 | 95,472 | 72,149 | |||||||||||
Operating income (loss) | 619 | (559 | ) | (1,661 | ) | (5,217 | ) | ||||||||
Non-operating income (expense): | |||||||||||||||
Interest income, net | 91 | 136 | 617 | 298 | |||||||||||
Other expense, net | (123 | ) | (64 | ) | (338 | ) | (248 | ) | |||||||
Income (loss) before provision for income taxes from continuing operations | 587 | (487 | ) | (1,382 | ) | (5,167 | ) | ||||||||
(Benefit from) provision for income taxes | (896 | ) | (294 | ) | (540 | ) | 99 | ||||||||
Income (loss) from continuing operations | 1,483 | (193 | ) | (842 | ) | (5,266 | ) | ||||||||
Income (loss) from discontinued operations, net of income taxes | — | (427 | ) | (113 | ) | 13,133 | |||||||||
Net income (loss) | $ | 1,483 | $ | (620 | ) | $ | (955 | ) | $ | 7,867 | |||||
Earnings per share:(a) | |||||||||||||||
Basic | |||||||||||||||
Earnings (loss) per share from continuing operations | $ | 0.48 | $ | (0.06 | ) | $ | (0.27 | ) | $ | (1.60 | ) | ||||
Earnings (loss) per share from discontinued operations | — | (0.13 | ) | (0.04 | ) | 4.00 | |||||||||
Earnings (loss) per share | $ | 0.48 | $ | (0.19 | ) | $ | (0.30 | ) | $ | 2.39 | |||||
Diluted | |||||||||||||||
Earnings (loss) per share from continuing operations | $ | 0.48 | $ | (0.06 | ) | $ | (0.27 | ) | $ | (1.60 | ) | ||||
Earnings (loss) per share from discontinued operations | — | (0.13 | ) | (0.04 | ) | 4.00 | |||||||||
Earnings (loss) per share | $ | 0.48 | $ | (0.19 | ) | $ | (0.30 | ) | $ | 2.39 | |||||
Weighted-average shares outstanding:(a) | |||||||||||||||
Basic | 3,072 | 3,315 | 3,131 | 3,285 | |||||||||||
Diluted | 3,111 | 3,315 | 3,131 | 3,285 |
(a) Earnings per share and weighted average shares outstanding for all periods presented reflect the Company's 1-for-10 reverse stock split, which was effective
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except per share amounts) | |||||||
(unaudited) | |||||||
2019 |
2018 |
||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 31,190 | $ | 40,562 | |||
Accounts receivable, less allowance for doubtful accounts of |
12,795 | 9,893 | |||||
Prepaid and other | 952 | 671 | |||||
Current assets of discontinued operations | — | 941 | |||||
Total current assets | 44,937 | 52,067 | |||||
Property and equipment, net | 186 | 170 | |||||
Operating lease right-of-use assets | 401 | — | |||||
Deferred tax assets | 793 | 583 | |||||
Restricted cash | 380 | 352 | |||||
Other assets | 7 | 7 | |||||
Total assets | $ | 46,704 | $ | 53,179 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,064 | $ | 1,461 | |||
Accrued expenses and other current liabilities | 8,178 | 8,984 | |||||
Operating lease obligations, current | 246 | — | |||||
Current liabilities of discontinued operations | — | 115 | |||||
Total current liabilities | 9,488 | 10,560 | |||||
Income tax payable | 845 | 1,982 | |||||
Operating lease obligations | 160 | — | |||||
Other liabilities | 177 | 150 | |||||
Total liabilities | 10,670 | 12,692 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, |
— | — | |||||
Common stock, 3,613 shares issued; 2,936 and 3,190 shares outstanding, respectively (a) |
4 | 4 | |||||
Additional paid-in capital | 486,088 | 485,127 | |||||
Accumulated deficit | (436,507 | ) | (435,552 | ) | |||
Accumulated other comprehensive loss, net of applicable tax | (479 | ) | (606 | ) | |||
(13,072 | ) | (8,486 | ) | ||||
Total stockholders’ equity | 36,034 | 40,487 | |||||
Total liabilities and stockholders' equity | $ | 46,704 | $ | 53,179 | |||
(a) Common stock and
SEGMENT ANALYSIS - QUARTER TO DATE | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For The Three Months Ended |
Corporate | Total | ||||||||||||||||||
Revenue, from external customers | $ | 17,869 | $ | 2,933 | $ | 4,646 | $ | — | $ | 25,448 | ||||||||||
Revenue less certain direct costs, from external customers (1) | $ | 5,593 | $ | 2,733 | $ | 2,789 | $ | — | $ | 11,115 | ||||||||||
Net income | $ | 1,483 | ||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | |||||||||||||||||||
Income from continuing operations | 1,483 | |||||||||||||||||||
Benefit from income taxes | (896 | ) | ||||||||||||||||||
Interest income, net | (91 | ) | ||||||||||||||||||
Depreciation and amortization expenses | 23 | |||||||||||||||||||
EBITDA (loss) (2) | $ | 1,059 | $ | 43 | $ | 223 | $ | (806 | ) | 519 | ||||||||||
Non-operating expense (income), including corporate administration charges |
147 | 114 | 137 | (275 | ) | 123 | ||||||||||||||
Stock-based compensation expense | 22 | 6 | 3 | 119 | 150 | |||||||||||||||
Non-recurring severance and professional fees | — | — | — | 97 | 97 | |||||||||||||||
Adjusted EBITDA (loss) (2) | $ | 1,228 | $ | 163 | $ | 363 | $ | (865 | ) | $ | 889 | |||||||||
For The Three Months Ended |
Corporate | Total | ||||||||||||||||||
Revenue, from external customers | $ | 9,215 | $ | 3,124 | $ | 4,236 | $ | — | $ | 16,575 | ||||||||||
Revenue less certain direct costs, from external customers (1) | $ | 5,513 | $ | 2,686 | $ | 2,069 | $ | — | $ | 10,268 | ||||||||||
Net loss | $ | (620 | ) | |||||||||||||||||
Loss from discontinued operations, net of income taxes | (427 | ) | ||||||||||||||||||
Loss from continuing operations | (193 | ) | ||||||||||||||||||
Benefit from income taxes | (294 | ) | ||||||||||||||||||
Interest income, net | (136 | ) | ||||||||||||||||||
Depreciation and amortization expenses | 13 | |||||||||||||||||||
EBITDA (loss) (2) | $ | 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 | ||||||||||||||
Non-recurring severance and professional fees | — | — | — | 34 | 34 | |||||||||||||||
Adjusted EBITDA (loss) (1) | $ | 946 | $ | 241 | $ | (275 | ) | $ | (1,215 | ) | $ | (303 | ) | |||||||
- Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations.
- 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, business reorganization expenses, stock-based compensation expense, and other non-recurring 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.
SEGMENT ANALYSIS - YEAR TO DATE | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For The Year Ended |
Corporate | Total | ||||||||||||||||||
Revenue, from external customers | $ | 61,438 | $ | 13,565 | $ | 18,808 | $ | — | $ | 93,811 | ||||||||||
Revenue less certain direct costs, from external customers (1) | $ | 21,177 | $ | 12,291 | $ | 10,098 | $ | — | $ | 43,566 | ||||||||||
Net loss | $ | (955 | ) | |||||||||||||||||
Loss from discontinued operations, net of income taxes | (113 | ) | ||||||||||||||||||
Loss from continuing operations | (842 | ) | ||||||||||||||||||
Benefit from income taxes | (540 | ) | ||||||||||||||||||
Interest income, net | (617 | ) | ||||||||||||||||||
Depreciation and amortization expenses | 85 | |||||||||||||||||||
EBITDA (loss) (2) | $ | 2,194 | $ | 60 | $ | 84 | $ | (4,252 | ) | (1,914 | ) | |||||||||
Non-operating expense (income), including corporate administration charges |
957 | 563 | 544 | (1,726 | ) | 338 | ||||||||||||||
Stock-based compensation expense | 102 | 26 | 8 | 825 | 961 | |||||||||||||||
Non-recurring severance and professional fees | — | — | — | 1,072 | 1,072 | |||||||||||||||
Adjusted EBITDA (loss) (2) | $ | 3,253 | $ | 649 | $ | 636 | $ | (4,081 | ) | $ | 457 | |||||||||
For The Year Ended |
Corporate | Total | ||||||||||||||||||
Revenue, from external customers | $ | 36,946 | $ | 13,924 | $ | 16,062 | $ | — | $ | 66,932 | ||||||||||
Revenue less certain direct costs, from external customers (1) | $ | 21,936 | $ | 11,726 | $ | 8,442 | $ | — | $ | 42,104 | ||||||||||
Net income | $ | 7,867 | ||||||||||||||||||
Income from discontinued operations, net of income taxes | 13,133 | |||||||||||||||||||
Loss from continuing operations | (5,266 | ) | ||||||||||||||||||
Provision for income taxes | 99 | |||||||||||||||||||
Interest income, net | (298 | ) | ||||||||||||||||||
Depreciation and amortization expenses | 16 | |||||||||||||||||||
EBITDA (loss) (2) | $ | 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 | |||||||||||||||
Non-recurring severance and professional fees | — | — | — | 2,415 | 2,415 | |||||||||||||||
Adjusted EBITDA (loss) (2) | $ | 3,157 | $ | 1,082 | $ | (75 | ) | $ | (5,644 | ) | $ | (1,480 | ) | |||||||
- Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations.
- 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, business reorganization expenses, stock-based compensation expense, and other non-recurring 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.
RECONCILIATION FOR CONSTANT CURRENCY
(in thousands)
(unaudited)
The Company operates on a global basis, with the majority of its revenue generated outside of
For The Three Months Ended |
|||||||||||||||
2019 | 2018 | ||||||||||||||
As | As | Currency | Constant | ||||||||||||
reported | reported | translation | currency | ||||||||||||
Revenue: | |||||||||||||||
$ | 17,869 | $ | 9,215 | $ | (330 | ) | $ | 8,885 | |||||||
2,933 | 3,124 | 1 | 3,125 | ||||||||||||
4,646 | 4,236 | 6 | 4,242 | ||||||||||||
Total | $ | 25,448 | $ | 16,575 | $ | (323 | ) | $ | 16,252 | ||||||
Revenue less certain direct costs (1): | |||||||||||||||
$ | 5,593 | $ | 5,513 | $ | (188 | ) | $ | 5,325 | |||||||
2,733 | 2,686 | 1 | 2,687 | ||||||||||||
2,789 | 2,069 | (7 | ) | 2,062 | |||||||||||
Total | $ | 11,115 | $ | 10,268 | $ | (194 | ) | $ | 10,074 | ||||||
SG&A (2): | |||||||||||||||
$ | 4,387 | $ | 4,568 | $ | (157 | ) | $ | 4,411 | |||||||
2,576 | 2,480 | (1 | ) | 2,479 | |||||||||||
2,430 | 2,332 | — | 2,332 | ||||||||||||
Corporate | 1,080 | 1,434 | (3 | ) | 1,431 | ||||||||||
Total | $ | 10,473 | $ | 10,814 | $ | (161 | ) | $ | 10,653 | ||||||
Operating income (loss): | |||||||||||||||
$ | 1,194 | $ | 918 | $ | (26 | ) | $ | 892 | |||||||
152 | 225 | 2 | 227 | ||||||||||||
355 | (271 | ) | (8 | ) | (279 | ) | |||||||||
Corporate | (1,082 | ) | (1,431 | ) | (2 | ) | (1,433 | ) | |||||||
Total | $ | 619 | $ | (559 | ) | $ | (34 | ) | $ | (593 | ) | ||||
EBITDA (loss): | |||||||||||||||
$ | 1,059 | $ | 705 | $ | (21 | ) | $ | 684 | |||||||
43 | 137 | 2 | 139 | ||||||||||||
223 | (265 | ) | (10 | ) | (275 | ) | |||||||||
Corporate | (806 | ) | (1,187 | ) | 4 | (1,183 | ) | ||||||||
Total | $ | 519 | $ | (610 | ) | $ | (25 | ) | $ | (635 | ) | ||||
- Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations.
- 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.
RECONCILIATION FOR CONSTANT CURRENCY (continued)
(in thousands)
(unaudited)
For The Year Ended |
|||||||||||||||
2019 | 2018 | ||||||||||||||
As | As | Currency | Constant | ||||||||||||
reported | reported | translation | currency | ||||||||||||
Revenue: | |||||||||||||||
$ | 61,438 | $ | 36,946 | $ | (2,198 | ) | $ | 34,748 | |||||||
13,565 | 13,924 | (19 | ) | 13,905 | |||||||||||
18,808 | 16,062 | (667 | ) | 15,395 | |||||||||||
Total | $ | 93,811 | $ | 66,932 | $ | (2,884 | ) | $ | 64,048 | ||||||
Revenue less certain direct costs (1): | |||||||||||||||
$ | 21,177 | $ | 21,936 | $ | (1,216 | ) | $ | 20,720 | |||||||
12,291 | 11,726 | (17 | ) | 11,709 | |||||||||||
10,098 | 8,442 | (370 | ) | 8,072 | |||||||||||
Total | $ | 43,566 | $ | 42,104 | $ | (1,603 | ) | $ | 40,501 | ||||||
SG&A (2): | |||||||||||||||
$ | 17,957 | $ | 18,811 | $ | (1,093 | ) | $ | 17,718 | |||||||
11,739 | 10,742 | (18 | ) | 10,724 | |||||||||||
9,473 | 8,527 | (358 | ) | 8,169 | |||||||||||
Corporate | 5,973 | 9,225 | — | 9,225 | |||||||||||
Total | $ | 45,142 | $ | 47,305 | $ | (1,469 | ) | $ | 45,836 | ||||||
Operating income (loss): | |||||||||||||||
$ | 3,112 | $ | 3,103 | $ | (124 | ) | $ | 2,979 | |||||||
605 | 1,000 | 2 | 1,002 | ||||||||||||
605 | (93 | ) | (14 | ) | (107 | ) | |||||||||
Corporate | (5,983 | ) | (9,227 | ) | — | (9,227 | ) | ||||||||
Total | $ | (1,661 | ) | $ | (5,217 | ) | $ | (136 | ) | $ | (5,353 | ) | |||
EBITDA (loss): | |||||||||||||||
$ | 2,194 | $ | 2,221 | $ | (77 | ) | $ | 2,144 | |||||||
60 | 440 | 2 | 442 | ||||||||||||
84 | (450 | ) | 11 | (439 | ) | ||||||||||
Corporate | (4,252 | ) | (7,660 | ) | — | (7,660 | ) | ||||||||
Total | $ | (1,914 | ) | $ | (5,449 | ) | $ | (64 | ) | $ | (5,513 | ) | |||
- Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations.
- 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.
Source: Hudson Global, Inc.