x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
DELAWARE
|
59-3547281
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer
Identification
No.)
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
x
|
||
Non-accelerated
filer
|
¨
|
|
Smaller reporting company
|
¨
|
Class
|
Outstanding on September 30,
2010
|
|
Common
Stock - $0.001 par value
|
32,204,758
|
|
|
Page
|
||
|
PART
I – FINANCIAL INFORMATION
|
|
||
Item 1.
|
|
Financial
Statements (Unaudited)
|
|
|
|
Condensed
Consolidated Statements of Operations - Three and Nine Months Ended
September 30, 2010 and 2009
|
|
3
|
|
|
Condensed
Consolidated Balance Sheets – September 30, 2010 and December 31,
2009
|
|
4
|
|
|
Condensed
Consolidated Statements of Cash Flows - Nine Months Ended September 30,
2010 and 2009
|
|
5
|
|
|
||||
|
Condensed
Consolidated Statement of Changes in Stockholders’ Equity – Nine Months
Ended September 30, 2010
|
|
6
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
|
7
|
|
|
||||
Item 2.
|
|
Management’s
Discussion and Analysis of Financial Condition and Results
of Operations
|
|
20
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Item 3.
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
|
39
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Item 4.
|
|
Controls
and Procedures
|
|
39
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|
PART II
– OTHER INFORMATION
|
|
||
Item 1.
|
|
Legal
Proceedings
|
|
40
|
Item 1A.
|
|
Risk
Factors
|
|
40
|
Item 2.
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
|
41
|
Item 3.
|
|
Defaults
Upon Senior Securities
|
|
41
|
Item 4.
|
|
Removed
and Reserved
|
|
41
|
Item 5.
|
|
Other
Information
|
|
41
|
Item 6.
|
|
Exhibits
|
|
41
|
|
Signatures
|
|
42
|
|
|
Exhibit
Index
|
|
43
|
Three Month Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenue
|
$ | 200,394 | $ | 169,647 | $ | 575,481 | $ | 508,645 | ||||||||
Direct
costs
|
125,403 | 105,457 | 359,833 | 317,567 | ||||||||||||
Gross
margin
|
74,991 | 64,190 | 215,648 | 191,078 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling,
general and administrative expenses
|
74,378 | 67,412 | 214,121 | 208,442 | ||||||||||||
Depreciation
and amortization
|
1,981 | 2,741 | 6,453 | 9,369 | ||||||||||||
Business
reorganization and integration expenses
|
41 | 2,878 | 705 | 12,279 | ||||||||||||
Goodwill
and other impairment charges
|
- | - | - | 1,549 | ||||||||||||
Operating
loss
|
(1,409 | ) | (8,841 | ) | (5,631 | ) | (40,561 | ) | ||||||||
Other
(expense) income :
|
||||||||||||||||
Interest,
net
|
(497 | ) | (96 | ) | (972 | ) | (469 | ) | ||||||||
Other,
net
|
1,184 | 99 | 2,687 | 773 | ||||||||||||
Fee
for early extinguishment of credit facility
|
(563 | ) | - | (563 | ) | - | ||||||||||
Loss
from continuing operations before provision for income
taxes
|
(1,285 | ) | (8,838 | ) | (4,479 | ) | (40,257 | ) | ||||||||
Provision
for (benefit from) income taxes
|
599 | (1,215 | ) | 1,366 | (2,300 | ) | ||||||||||
Loss
from continuing operations
|
(1,884 | ) | (7,623 | ) | (5,845 | ) | (37,957 | ) | ||||||||
(Loss)
income from discontinued operations, net of income taxes
|
(14 | ) | 770 | (31 | ) | 7,773 | ||||||||||
Net
loss
|
$ | (1,898 | ) | $ | (6,853 | ) | $ | (5,876 | ) | $ | (30,184 | ) | ||||
(Loss)
earnings per share:
|
||||||||||||||||
Basic
and diluted
|
||||||||||||||||
Loss
from continuing operations
|
$ | (0.06 | ) | $ | (0.29 | ) | $ | (0.20 | ) | $ | (1.47 | ) | ||||
(Loss)
income from discontinued operations
|
(0.00 | ) | 0.03 | (0.00 | ) | 0.30 | ||||||||||
Net
loss
|
$ | (0.06 | ) | $ | (0.26 | ) | $ | (0.20 | ) | $ | (1.17 | ) | ||||
Basic
and diluted weighted average shares outstanding:
|
31,225 | 26,311 | 29,493 | 25,744 |
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 34,174 | $ | 36,064 | ||||
Accounts
receivable, less allowance for doubtful accounts of $2,408 and $2,423,
respectively
|
129,116 | 98,994 | ||||||
Prepaid
and other
|
17,463 | 13,308 | ||||||
Total
current assets
|
180,753 | 148,366 | ||||||
Property
and equipment, net
|
15,360 | 19,433 | ||||||
Other
assets
|
17,975 | 14,145 | ||||||
Total
assets
|
$ | 214,088 | $ | 181,944 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 13,567 | $ | 12,811 | ||||
Accrued
expenses and other current liabilities
|
75,000 | 54,103 | ||||||
Short-term
borrowings
|
13,871 | 10,456 | ||||||
Accrued
business reorganization expenses
|
2,398 | 8,784 | ||||||
Total
current liabilities
|
104,836 | 86,154 | ||||||
Other
non-current liabilities
|
9,260 | 10,768 | ||||||
Income
tax payable, non-current
|
8,476 | 8,415 | ||||||
Accrued
business reorganization expenses, non-current
|
627 | 347 | ||||||
Total
liabilities
|
123,199 | 105,684 | ||||||
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; issued 32,214 and
26,836 shares, respectively
|
32 | 27 | ||||||
Additional
paid-in capital
|
466,178 | 445,541 | ||||||
Accumulated
deficit
|
(409,390 | ) | (403,514 | ) | ||||
Accumulated
other comprehensive income—translation adjustments
|
34,107 | 34,509 | ||||||
Treasury
stock, 9 and 114 shares, respectively, at cost
|
(38 | ) | (303 | ) | ||||
Total
stockholders’ equity
|
90,889 | 76,260 | ||||||
Total
liabilities and stockholders' equity
|
$ | 214,088 | $ | 181,944 |
Nine Months Ended September 30,
|
||||||||
2010
|
2009
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (5,876 | ) | $ | (30,184 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
6,453 | 9,456 | ||||||
Goodwill
and other impairment charges
|
- | 1,549 | ||||||
Provision
(recovery) of doubtful accounts
|
421 | (270 | ) | |||||
Benefit
from deferred income taxes
|
(296 | ) | (3,813 | ) | ||||
Stock-based
compensation
|
1,320 | 819 | ||||||
Net
gain on disposal of assets
|
- | (11,625 | ) | |||||
Fee
for early extinguishment of credit facility
|
563 | - | ||||||
Other,
net
|
(1,706 | ) | - | |||||
Changes
in assets and liabilities, net of effects of business
acquisitions:
|
||||||||
(Increase)
decrease in accounts receivable
|
(29,373 | ) | 40,222 | |||||
(Increase)
decrease in other assets
|
(4,163 | ) | 2,880 | |||||
Increase
(decrease) in accounts payable, accrued expenses and other
liabilities
|
18,613 | (29,063 | ) | |||||
Decrease
in accrued business reorganization expenses
|
(6,104 | ) | (541 | ) | ||||
Net
cash used in operating activities
|
(20,148 | ) | (20,570 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures
|
(2,394 | ) | (1,573 | ) | ||||
Proceeds
from sale of assets
|
81 | 11,625 | ||||||
Payment
received on note from asset sale
|
3,500 | - | ||||||
Change
in restricted cash
|
(1,719 | ) | 514 | |||||
Payment
for acquisitions
|
(1,856 | ) | (1,669 | ) | ||||
Net
cash (used in) provided by investing activities
|
(2,388 | ) | 8,897 | |||||
Cash
flows from financing activities:
|
||||||||
Borrowings
under credit facility and other short term financing
|
60,216 | 51,985 | ||||||
Repayments
under credit facility and other short term financing
|
(56,885 | ) | (46,836 | ) | ||||
Payment
for early extinguishment of credit facility
|
(563 | ) | - | |||||
Payment
of deferred financing costs
|
(1,479 | ) | - | |||||
Proceeds
from issuance of common stock, net
|
19,167 | - | ||||||
Purchase
of treasury stock, including fees
|
- | (703 | ) | |||||
Purchase
of restricted stock from employees
|
(70 | ) | (63 | ) | ||||
Net
cash provided by financing activities
|
20,386 | 4,383 | ||||||
Effect
of exchange rates on cash and cash equivalents
|
260 | 2,564 | ||||||
Net
decrease in cash and cash equivalents
|
(1,890 | ) | (4,726 | ) | ||||
Cash
and cash equivalents, beginning of the period
|
36,064 | 49,209 | ||||||
Cash
and cash equivalents, end of the period
|
$ | 34,174 | $ | 44,483 | ||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the period for interest
|
$ | 880 | $ | 735 | ||||
Cash
payment (refund), net during the period for income taxes
|
$ | 2,923 | $ | (2,039 | ) |
Common stock
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Accumulated
other
comprehensive
income (loss)
|
Treasury
stock
|
Total
|
|||||||||||||||||||||||
Shares
|
Value
|
|||||||||||||||||||||||||||
Balance
at January 1, 2010
|
26,722 | $ | 27 | $ | 445,541 | $ | (403,514 | ) | $ | 34,509 | $ | (303 | ) | $ | 76,260 | |||||||||||||
Net
loss
|
- | - | - | (5,876 | ) | - | - | (5,876 | ) | |||||||||||||||||||
Issuance
of shares
|
4,830 | 5 | 19,111 | - | - | - | 19,116 | |||||||||||||||||||||
Other
comprehensive loss, translation adjustments
|
- | - | - | - | (402 | ) | - | (402 | ) | |||||||||||||||||||
Purchase
of restricted stock from employees
|
(16 | ) | - | - | - | - | (70 | ) | (70 | ) | ||||||||||||||||||
Issuance
of shares for 401(k) plan contribution
|
121 | - | 206 | - | - | 335 | 541 | |||||||||||||||||||||
Stock-based
compensation
|
548 | - | 1,320 | - | - | - | 1,320 | |||||||||||||||||||||
Balance
at September 30, 2010
|
32,205 | $ | 32 | $ | 466,178 | $ | (409,390 | ) | $ | 34,107 | $ | (38 | ) | $ | 90,889 |
Weighted
|
||||||||
Number of
|
Average
|
|||||||
Options
|
Exercise Price
|
|||||||
Outstanding
|
per Share
|
|||||||
Options
outstanding, beginning of year
|
1,763,250 | $ | 12.79 | |||||
Forfeited
|
(15,750 | ) | 15.85 | |||||
Expired
|
(182,575 | ) | 13.63 | |||||
Options
outstanding at September 30, 2010
|
1,564,925 | 12.66 | ||||||
Options
exercisable at September 30, 2010
|
1,503,050 | $ | 12.79 |
Number of
|
Weighted
|
|||||||
Shares of
|
Average
|
|||||||
Restricted
|
Grant-Date
|
|||||||
Stock
|
Fair Value
|
|||||||
Nonvested
restricted stock, beginning of year
|
531,083 | $ | 2.70 | |||||
Granted
|
592,732 | 4.57 | ||||||
Vested
|
(102,587 | ) | 4.14 | |||||
Forfeited
|
(21,750 | ) | 2.96 | |||||
Nonvested
restricted stock at September 30, 2010
|
999,478 | $ | 3.66 |
For The Three Month Ended September 30, 2009
|
||||||||||||||||||||||||
Italy
|
Japan
|
T&I
|
ETS
|
Highland
|
Total
|
|||||||||||||||||||
Revenue
|
$ | - | $ | (20 | ) | $ | - | $ | - | $ | - | $ | (20 | ) | ||||||||||
Gross
margin
|
$ | (3 | ) | $ | (20 | ) | $ | - | $ | 181 | $ | - | $ | 158 | ||||||||||
Operating
(loss) income
|
$ | (298 | ) | $ | 98 | $ | - | $ | 179 | $ | - | $ | (21 | ) | ||||||||||
Other
income (expense)
|
709 | (59 | ) | 202 | - | 123 | 975 | |||||||||||||||||
Provision
for income taxes (a)
|
124 | - | 60 | - | - | 184 | ||||||||||||||||||
(Loss) income from discontinued operations
|
$ | 287 | $ | 39 | $ | 142 | $ | 179 | $ | 123 | $ | 770 |
For The Nine Months Ended September 30, 2009
|
||||||||||||||||||||||||
Italy
|
Japan
|
T&I
|
ETS
|
Highland
|
Total
|
|||||||||||||||||||
Revenue
|
$ | 432 | $ | 1,022 | $ | - | $ | - | $ | - | $ | 1,454 | ||||||||||||
Gross
margin
|
$ | 388 | $ | 986 | $ | - | $ | 645 | $ | - | $ | 2,019 | ||||||||||||
Operating
(loss) income
|
$ | (2,036 | ) | $ | (2,648 | ) | $ | - | $ | 511 | $ | - | $ | (4,173 | ) | |||||||||
Other
income (expense)
|
699 | (238 | ) | 202 | - | (156 | ) | 507 | ||||||||||||||||
Gain
from sale of discontinued operations
|
- | - | - | - | 11,625 | 11,625 | ||||||||||||||||||
Provision
for income taxes (a)
|
126 | - | 60 | - | - | 186 | ||||||||||||||||||
(Loss) income from discontinued operations
|
$ | (1,463 | ) | $ | (2,886 | ) | $ | 142 | $ | 511 | $ | 11,469 | $ | 7,773 |
(a)
|
Income
tax expense is provided at the effective tax rate by taxing jurisdiction
and differs from the U.S. statutory tax rate of 35% due to differences in
the foreign statutory tax rates, as well as the ability to offset certain
net operating losses (“NOLs”) against taxable
profits.
|
For The Three Month Ended September 30, 2010
|
For The Three Month Ended September 30, 2009 (2)
|
|||||||||||||||||||||||
Temporary
|
Other
|
Total
|
Temporary
|
Other
|
Total
|
|||||||||||||||||||
Revenue
|
$ | 147,910 | $ | 52,484 | $ | 200,394 | $ | 128,717 | $ | 40,930 | $ | 169,647 | ||||||||||||
Direct
costs (1)
|
122,161 | 3,242 | 125,403 | 103,358 | 2,099 | 105,457 | ||||||||||||||||||
Gross
margin
|
$ | 25,749 | $ | 49,242 | $ | 74,991 | $ | 25,359 | $ | 38,831 | $ | 64,190 |
For The Nine Months Ended September 30, 2010
|
For The Nine Months Ended
|
|||||||||||||||||||||||
Temporary
|
Other
|
Total
|
Temporary
|
Other
|
Total
|
|||||||||||||||||||
Revenue
|
$ | 425,111 | $ | 150,370 | $ | 575,481 | $ | 385,074 | $ | 123,571 | $ | 508,645 | ||||||||||||
Direct
costs (1)
|
349,695 | 10,138 | 359,833 | 308,946 | 8,621 | 317,567 | ||||||||||||||||||
Gross
margin
|
$ | 75,416 | $ | 140,232 | $ | 215,648 | $ | 76,128 | $ | 114,950 | $ | 191,078 |
(1)
|
Direct
costs include the direct staffing costs of salaries, payroll taxes,
employee benefits, travel expenses and insurance costs for the Company’s
contractors and reimbursed out-of-pocket expenses and other direct costs.
Other than reimbursed out-of-pocket expenses, there are no other direct
costs associated with the Other category, which includes the search,
permanent recruitment and other human resource solutions’ revenue. Gross
margin represents revenue less direct costs. The region where services are
provided, the mix of contracting and permanent recruitment, and the
functional nature of the staffing services provided can affect gross
margin. The salaries, commissions, payroll taxes and employee benefits
related to recruitment professionals are included in selling, general and
administrative expenses.
|
(2)
|
For
the three months ended September 30, 2009, the Company reclassified $1,484
of Temporary revenue, $1,346 of Temporary direct costs and $138 of
Temporary gross margin from Other revenue, Other direct costs and Other
gross margin, respectively. For the nine months ended September 30,
2009, the Company reclassified $3,917 of Temporary revenue, $3,469 of
Temporary direct costs and $448 of Temporary gross margin from Other
revenue, Other direct costs and Other gross margin, respectively. The
Company reclassified these amounts to be consistent with similar
arrangements.
|
September
30,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
Computer
equipment
|
$ | 19,032 | $ | 19,095 | ||||
Furniture
and equipment
|
13,983 | 14,635 | ||||||
Capitalized
software costs
|
33,656 | 32,074 | ||||||
Leasehold
and building improvements
|
23,245 | 24,194 | ||||||
Transportation
equipment
|
21 | 22 | ||||||
89,937 | 90,020 | |||||||
Less:
accumulated depreciation and amortization
|
74,577 | 70,587 | ||||||
Property
and equipment, net
|
$ | 15,360 | $ | 19,433 |
Carrying Value
|
||||||||
2010
|
2009
|
|||||||
Goodwill,
beginning of year
|
$ | - | $ | - | ||||
Additions
and adjustments
|
1,880 | 1,671 | ||||||
Impairments
|
- | (1,671 | ) | |||||
Goodwill
on September 30,
|
$ | 1,880 | $ | - |
For The Nine Months Ended September 30,
|
December 31,
|
Changes in
|
Additional
|
September 30,
|
||||||||||||||||
2010
|
2009
|
Estimate
|
Charges
|
Payments
|
2010
|
|||||||||||||||
Lease
termination payments
|
$ | 4,897 | $ | 483 | $ | - | $ | (3,213 | ) | $ | 2,167 | |||||||||
Employee
termination benefits
|
4,100 | 224 | - | (3,563 | ) | 761 | ||||||||||||||
Contract
cancellation costs
|
134 | 6 | - | (43 | ) | 97 | ||||||||||||||
Total
|
$ | 9,131 | $ | 713 | $ | - | $ | (6,819 | ) | $ | 3,025 |
Three Month Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
loss
|
$ | (1,898 | ) | $ | (6,853 | ) | $ | (5,876 | ) | $ | (30,184 | ) | ||||
Other
comprehensive income (loss) - translation adjustments
|
6,510 | 2,372 | (402 | ) | 7,074 | |||||||||||
Total
comprehensive income (loss)
|
$ | 4,612 | $ | (4,481 | ) | $ | (6,278 | ) | $ | (23,110 | ) |
|
Hudson
Americas
|
Hudson
Europe
|
Hudson
ANZ
|
Hudson
Asia
|
Corporate
|
Inter-
segment
elimination
|
Total
|
|||||||||||||||||||||
For
The Three Month Ended September 30, 2010
|
||||||||||||||||||||||||||||
Revenue,
from external customers
|
$ | 37,839 | $ | 80,503 | $ | 72,974 | $ | 9,078 | $ | - | $ | - | $ | 200,394 | ||||||||||||||
Inter-segment
revenue
|
(3 | ) | 47 | 1 | 12 | - | (57 | ) | - | |||||||||||||||||||
Total
revenue
|
$ | 37,836 | $ | 80,550 | $ | 72,975 | $ | 9,090 | $ | - | $ | (57 | ) | $ | 200,394 | |||||||||||||
Gross
margin, from external customers
|
$ | 9,311 | $ | 32,647 | $ | 24,259 | $ | 8,774 | $ | - | $ | - | $ | 74,991 | ||||||||||||||
Inter-segment
gross margin
|
(5 | ) | 16 | (15 | ) | 4 | - | - | - | |||||||||||||||||||
Total
gross margin
|
$ | 9,306 | $ | 32,663 | $ | 24,244 | $ | 8,778 | $ | - | $ | - | $ | 74,991 | ||||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 41 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 41 | ||||||||||||||
EBITDA
(loss) (a)
|
$ | 532 | $ | (2,128 | ) | $ | 1,376 | $ | 1,169 | $ | 244 | $ | - | $ | 1,193 | |||||||||||||
Depreciation
and amortization
|
433 | 769 | 647 | 94 | 38 | - | 1,981 | |||||||||||||||||||||
Interest
(expense) income , net
|
(3 | ) | - | 43 | 1 | (538 | ) | - | (497 | ) | ||||||||||||||||||
(Loss)
income from continuing operations before income taxes
|
96 | (2,897 | ) | 772 | 1,076 | (332 | ) | - | (1,285 | ) | ||||||||||||||||||
As
of September 30, 2010
|
||||||||||||||||||||||||||||
Accounts
receivable, net
|
$ | 25,505 | $ | 58,159 | $ | 37,835 | $ | 7,617 | $ | - | $ | - | $ | 129,116 | ||||||||||||||
Long-lived
assets, net of accumulated depreciation and amortization
|
$ | 1,502 | $ | 4,927 | $ | 6,673 | $ | 2,130 | $ | 2,361 | $ | - | $ | 17,593 | ||||||||||||||
Total
assets
|
$ | 30,716 | $ | 89,483 | $ | 57,217 | $ | 16,654 | $ | 20,018 | $ | - | $ | 214,088 |
Hudson
Americas
|
Hudson
Europe
|
Hudson
ANZ
|
Hudson
Asia
|
Corporate
|
Inter-segment
elimination
|
Total
|
||||||||||||||||||||||
For
The Three Month Ended September 30, 2009
|
||||||||||||||||||||||||||||
Revenue,
from external customers
|
$ | 35,705 | $ | 67,898 | $ | 59,026 | $ | 7,018 | $ | - | $ | - | $ | 169,647 | ||||||||||||||
Inter-segment
revenue
|
(1 | ) | 6 | - | 7 | - | (12 | ) | - | |||||||||||||||||||
Total
revenue
|
$ | 35,704 | $ | 67,904 | $ | 59,026 | $ | 7,025 | $ | - | $ | (12 | ) | $ | 169,647 | |||||||||||||
Gross
margin, from external customers
|
$ | 9,258 | $ | 29,571 | $ | 18,754 | $ | 6,607 | $ | - | $ | - | $ | 64,190 | ||||||||||||||
Inter-segment
gross margin
|
(3 | ) | 4 | (5 | ) | 5 | - | (1 | ) | - | ||||||||||||||||||
Total
gross margin
|
$ | 9,255 | $ | 29,575 | $ | 18,749 | $ | 6,612 | $ | - | $ | (1 | ) | $ | 64,190 | |||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 592 | $ | 1,881 | $ | 405 | $ | - | $ | - | $ | - | $ | 2,878 | ||||||||||||||
EBITDA
(loss) (a)
|
$ | (2,795 | ) | $ | (2,406 | ) | $ | 1,156 | $ | 961 | $ | (2,917 | ) | $ | - | $ | (6,001 | ) | ||||||||||
Depreciation
and amortization
|
1,047 | 911 | 573 | 166 | 44 | - | 2,741 | |||||||||||||||||||||
Interest income
(expense), net
|
17 | 45 | 53 | 2 | (213 | ) | - | (96 | ) | |||||||||||||||||||
(Loss)
income from continuing operations before income taxes
|
$ | (3,825 | ) | $ | (3,272 | ) | $ | 636 | $ | 797 | $ | (3,174 | ) | $ | - | $ | (8,838 | ) | ||||||||||
As
of September 30, 2009
|
||||||||||||||||||||||||||||
Accounts
receivable, net
|
$ | 18,796 | $ | 48,073 | $ | 24,589 | $ | 5,536 | $ | - | $ | - | $ | 96,994 | ||||||||||||||
Long-lived
assets, net of accumulated depreciation and amortization
|
$ | 4,167 | $ | 7,800 | $ | 5,024 | $ | 752 | $ | 2,794 | $ | - | $ | 20,537 | ||||||||||||||
Total
assets
|
$ | 26,817 | $ | 82,715 | $ | 46,285 | $ | 12,638 | $ | 22,809 | $ | - | $ | 191,264 |
|
Hudson
Americas
|
Hudson
Europe
|
Hudson
ANZ
|
Hudson
Asia
|
Corporate
|
Inter-segment
elimination
|
Total
|
|||||||||||||||||||||
For
The Nine Months Ended September 30, 2010
|
||||||||||||||||||||||||||||
Revenue,
from external customers
|
$ | 118,165 | $ | 237,875 | $ | 195,045 | $ | 24,396 | $ | - | $ | - | $ | 575,481 | ||||||||||||||
Inter-segment
revenue
|
(4 | ) | 73 | 1 | 18 | - | (88 | ) | - | |||||||||||||||||||
Total
revenue
|
$ | 118,161 | $ | 237,948 | $ | 195,046 | $ | 24,414 | $ | - | $ | (88 | ) | $ | 575,481 | |||||||||||||
Gross
margin, from external customers
|
$ | 28,643 | $ | 99,722 | $ | 63,758 | $ | 23,525 | $ | - | $ | - | $ | 215,648 | ||||||||||||||
Inter-segment
gross margin
|
(7 | ) | 58 | (40 | ) | (1 | ) | - | (10 | ) | - | |||||||||||||||||
Total
gross margin
|
$ | 28,636 | $ | 99,780 | $ | 63,718 | $ | 23,524 | $ | - | $ | (10 | ) | $ | 215,648 | |||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 285 | $ | 536 | $ | (116 | ) | $ | - | $ | - | $ | - | $ | 705 | |||||||||||||
EBITDA
(loss) (a)
|
$ | (699 | ) | $ | 771 | $ | 2,994 | $ | 3,076 | $ | (3,196 | ) | $ | - | $ | 2,946 | ||||||||||||
Depreciation
and amortization
|
2,005 | 2,176 | 1,764 | 394 | 114 | - | 6,453 | |||||||||||||||||||||
Interest
(expense) income , net
|
(7 | ) | (27 | ) | 85 | 2 | (1,025 | ) | - | (972 | ) | |||||||||||||||||
(Loss)
income from continuing operations before income taxes
|
$ | (2,711 | ) | $ | (1,432 | ) | $ | 1,315 | $ | 2,684 | $ | (4,335 | ) | $ | - | $ | (4,479 | ) |
|
Hudson
Americas
|
Hudson
Europe
|
Hudson
ANZ
|
Hudson
Asia
|
Corporate
|
Inter-segment
elimination
|
Total
|
|||||||||||||||||||||
For
The Nine Months Ended September 30, 2009
|
||||||||||||||||||||||||||||
Revenue,
from external customers
|
$ | 122,861 | $ | 202,473 | $ | 165,675 | $ | 17,636 | $ | - | $ | - | $ | 508,645 | ||||||||||||||
Inter-segment
revenue
|
4 | 10 | 3 | 22 | - | (39 | ) | - | ||||||||||||||||||||
Total
revenue
|
$ | 122,865 | $ | 202,483 | $ | 165,678 | $ | 17,658 | $ | - | $ | (39 | ) | $ | 508,645 | |||||||||||||
Gross
margin, from external customers
|
$ | 30,741 | $ | 91,155 | $ | 52,718 | $ | 16,464 | $ | - | $ | - | $ | 191,078 | ||||||||||||||
Inter-segment
gross margin
|
22 | (8 | ) | (11 | ) | (2 | ) | - | (1 | ) | - | |||||||||||||||||
Total
gross margin
|
$ | 30,763 | $ | 91,147 | $ | 52,707 | $ | 16,462 | $ | - | $ | (1 | ) | $ | 191,078 | |||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 3,339 | $ | 6,547 | $ | 2,281 | $ | 98 | $ | 14 | $ | - | $ | 12,279 | ||||||||||||||
EBITDA
(loss) (a)
|
$ | (10,187 | ) | $ | (8,236 | ) | $ | 221 | $ | (1,717 | ) | $ | (10,500 | ) | $ | - | $ | (30,419 | ) | |||||||||
Depreciation
and amortization
|
3,100 | 3,731 | 1,753 | 648 | 137 | - | 9,369 | |||||||||||||||||||||
Interest income
(expense), net
|
15 | 84 | 173 | 11 | (752 | ) | - | (469 | ) | |||||||||||||||||||
Loss
from continuing operations before income taxes
|
$ | (13,272 | ) | $ | (11,883 | ) | $ | (1,359 | ) | $ | (2,354 | ) | $ | (11,389 | ) | $ | - | $ | (40,257 | ) |
(a)
|
SEC
Regulation S-K 229.10(e)1(ii)(A) defines EBITDA as earnings before
interest, taxes, depreciation and amortization. EBITDA is presented to
provide additional information to investors 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 this
measurement to evaluate working capital requirements. EBITDA should not be
considered in isolation or as a substitute for operating income and net
income prepared in accordance with generally accepted accounting
principles or as a measure of the Company’s
profitability.
|
Information by geographic region
|
United
States
|
Australia
|
United
Kingdom
|
Continental
Europe
|
Other
Asia
|
Other
Americas
|
Total
|
|||||||||||||||||||||
For
The Three Month Ended September 30, 2010
|
||||||||||||||||||||||||||||
Revenue
(b)
|
$ | 37,548 | $ | 62,604 | $ | 57,274 | $ | 23,229 | $ | 19,448 | $ | 291 | $ | 200,394 | ||||||||||||||
For
The Three Month Ended September 30, 2009
|
||||||||||||||||||||||||||||
Revenue
(b)
|
$ | 35,293 | $ | 50,851 | $ | 42,046 | $ | 25,853 | $ | 15,193 | $ | 412 | $ | 169,648 | ||||||||||||||
For
The Nine Months Ended September 30, 2010
|
||||||||||||||||||||||||||||
Revenue
(b)
|
$ | 117,470 | $ | 168,762 | $ | 161,509 | $ | 76,366 | $ | 50,679 | $ | 695 | $ | 575,481 | ||||||||||||||
For
The Nine Months Ended September 30, 2009
|
||||||||||||||||||||||||||||
Revenue
(b)
|
$ | 121,561 | $ | 141,954 | $ | 120,458 | $ | 82,015 | $ | 41,357 | $ | 1,300 | $ | 508,645 | ||||||||||||||
As
of September 30, 2010
|
||||||||||||||||||||||||||||
Long-lived
assets, net of accumulated depreciation and amortization
(c)
|
$ | 3,716 | $ | 5,395 | $ | 2,991 | $ | 2,083 | $ | 3,408 | $ | - | $ | 17,593 | ||||||||||||||
Net
assets
|
$ | 16,288 | $ | 22,952 | $ | 28,555 | $ | 13,490 | $ | 9,000 | $ | 604 | $ | 90,889 | ||||||||||||||
As
of September 30, 2009
|
||||||||||||||||||||||||||||
Long-lived
assets, net of accumulated depreciation and amortization
(c)
|
$ | 6,961 | $ | 3,259 | $ | 4,234 | $ | 3,566 | $ | 2,517 | $ | - | $ | 20,537 | ||||||||||||||
Net
assets
|
$ | 14,369 | $ | 16,049 | $ | 23,799 | $ | 20,750 | $ | 10,880 | $ | 314 | $ | 86,161 |
(b)
|
Revenue
by geographic region disclosed above is net of any inter-segment revenue
and, therefore, represents only revenue from external customers according
to the location of the operating
subsidiary.
|
(c)
|
Comprised
of property and equipment and intangibles. Corporate assets are included
in the United States.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three Month Ended September 30,
|
Changes
|
|||||||||||
$
in thousands
|
2010
|
2009
|
Amount
|
|||||||||
Revenue
|
$ | 200,394 | $ | 169,647 | $ | 30,747 | ||||||
Gross
margin
|
74,991 | 64,190 | 10,801 | |||||||||
Selling,
general and administrative expenses (a)
|
76,359 | 70,153 | 6,206 | |||||||||
Business
reorganization and integration expenses
|
41 | 2,878 | (2,837 | ) | ||||||||
Operating
loss
|
(1,409 | ) | (8,841 | ) | 7,432 | |||||||
Loss
from continuing operations
|
(1,884 | ) | (7,623 | ) | 5,739 | |||||||
Net
loss
|
$ | (1,898 | ) | $ | (6,853 | ) | $ | 4,955 |
Nine Months Ended September 30,
|
Changes
|
|||||||||||
$
in thousands
|
2010
|
2009
|
Amount
|
|||||||||
Revenue
|
$ | 575,481 | $ | 508,645 | $ | 66,836 | ||||||
Gross
margin
|
215,648 | 191,078 | 24,570 | |||||||||
Selling,
general and administrative expenses (a)
|
220,574 | 217,811 | 2,763 | |||||||||
Business
reorganization and integration expenses
|
705 | 12,279 | (11,574 | ) | ||||||||
Goodwill
and other impairment charges
|
- | 1,549 | (1,549 | ) | ||||||||
Operating
loss
|
(5,631 | ) | (40,561 | ) | 34,930 | |||||||
Loss
from continuing operations
|
(5,845 | ) | (37,957 | ) | 32,112 | |||||||
Net
loss
|
$ | (5,876 | ) | $ | (30,184 | ) | $ | 24,308 |
(a)
|
Selling,
general and administrative expenses include depreciation and amortization
expense of $1,981 and $2,741, respectively, for the three months ended
September 30, 2010 and 2009 and $6,453 and $9,369, respectively, for the
nine months ended September 30, 2010 and
2009.
|
•
|
Revenue
was $200.4 million for the three months ended September 30,
2010, compared to $169.6 million for the same period of 2009, an
increase of $30.7 million, or 18.1%. Of this increase, $19.2 million, or a
14.9% increase compared to the same period, was in contracting and $12
million, or a 41.4% increase compared to the same period, was in permanent
recruitment revenue. The increase in revenue was partially offset by a
$0.7 million, or 6.3%, decline in talent management revenue compared to
the same period of 2009.
|
•
|
Gross
margin was $75 million for the three months ended September 30, 2010,
compared to $64.2 million for the same period of 2009, an increase of
$10.8 million, or 16.8%. Of this increase, $11.2 million, or a 38.8%
increase compared to the same period, was in permanent recruitment gross
margin. The increase was partially offset by a $1 million, or 10.4%,
decline in talent management gross margin. Contracting gross margin was
flat compared to the same period of
2009.
|
•
|
Selling,
general and administrative expenses were $76.4 million for the three
months ended September 30, 2010, as compared to $70.2 million for the same
period of 2009, an increase of $6.2 million, or 8.8%. The
increase was primarily due to increased staff compensation as a
result of the increase in gross margin, partially offset by reductions in
costs resulting from the restructuring program completed in
2009.
|
Three Month Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
$ in thousands
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Net
loss
|
$ | (1,898 | ) | $ | (6,853 | ) | $ | (5,876 | ) | $ | (30,184 | ) | ||||
Adjusted
for (loss) income from discontinued operations, net of income
taxes
|
(14 | ) | 770 | (31 | ) | 7,773 | ||||||||||
Loss
from continuing operations
|
(1,884 | ) | (7,623 | ) | (5,845 | ) | (37,957 | ) | ||||||||
Adjustments to loss from
continuing operations
|
||||||||||||||||
Provision
for (benefit from) income taxes
|
599 | (1,215 | ) | 1,366 | (2,300 | ) | ||||||||||
Interest
expense, net
|
497 | 96 | 972 | 469 | ||||||||||||
Depreciation
and amortization
|
1,981 | 2,741 | 6,453 | 9,369 | ||||||||||||
Total
adjustments from loss from continuing operations to EBITDA
(loss)
|
3,077 | 1,622 | 8,791 | 7,538 | ||||||||||||
EBITDA
(loss)
|
$ | 1,193 | $ | (6,001 | ) | $ | 2,946 | $ | (30,419 | ) |
For The Three Month Ended
September 30,
|
For The Nine Months Ended
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenue:
|
||||||||||||||||
Hudson
Americas
|
$ | 37,839 | $ | 35,705 | $ | 118,165 | $ | 122,861 | ||||||||
Hudson
Europe
|
80,503 | 67,898 | 237,875 | 202,473 | ||||||||||||
Hudson
ANZ
|
72,974 | 59,026 | 195,045 | 165,675 | ||||||||||||
Hudson
Asia
|
9,078 | 7,018 | 24,396 | 17,636 | ||||||||||||
Total
|
$ | 200,394 | $ | 169,647 | $ | 575,481 | $ | 508,645 | ||||||||
Gross
margin:
|
||||||||||||||||
Hudson
Americas
|
$ | 9,311 | $ | 9,258 | $ | 28,643 | $ | 30,741 | ||||||||
Hudson
Europe
|
32,647 | 29,571 | 99,722 | 91,155 | ||||||||||||
Hudson
ANZ
|
24,259 | 18,754 | 63,758 | 52,718 | ||||||||||||
Hudson
Asia
|
8,774 | 6,607 | 23,525 | 16,464 | ||||||||||||
Total
|
$ | 74,991 | $ | 64,190 | $ | 215,648 | $ | 191,078 | ||||||||
Operating
(loss) income:
|
||||||||||||||||
Hudson
Americas
|
$ | (305 | ) | $ | (3,264 | ) | $ | (3,235 | ) | $ | (11,603 | ) | ||||
Hudson
Europe
|
190 | (2,762 | ) | 4,010 | (10,531 | ) | ||||||||||
Hudson
ANZ
|
2,161 | 570 | 4,259 | (1,615 | ) | |||||||||||
Hudson
Asia
|
1,553 | 865 | 3,387 | (2,516 | ) | |||||||||||
Corporate
expenses
|
(5,008 | ) | (4,250 | ) | (14,052 | ) | (14,296 | ) | ||||||||
Total
|
$ | (1,409 | ) | $ | (8,841 | ) | $ | (5,631 | ) | $ | (40,561 | ) | ||||
Loss
from continuing operations
|
$ | (1,884 | ) | $ | (7,623 | ) | $ | (5,845 | ) | $ | (37,957 | ) | ||||
Net
loss
|
$ | (1,898 | ) | $ | (6,853 | ) | $ | (5,876 | ) | $ | (30,184 | ) | ||||
TEMPORARY
CONTRACTING DATA (a):
|
||||||||||||||||
Temporary
contracting revenue:
|
||||||||||||||||
Hudson
Americas
|
$ | 36,477 | $ | 34,437 | $ | 114,148 | $ | 118,528 | ||||||||
Hudson
Europe
|
55,772 | 46,158 | 159,550 | 133,624 | ||||||||||||
Hudson
ANZ
|
55,335 | 47,867 | 150,647 | 132,101 | ||||||||||||
Hudson
Asia
|
326 | 255 | 766 | 821 | ||||||||||||
Total
|
$ | 147,910 | $ | 128,717 | $ | 425,111 | $ | 385,074 | ||||||||
Direct
costs of temporary contracting:
|
||||||||||||||||
Hudson
Americas
|
$ | 28,496 | $ | 26,437 | $ | 89,490 | $ | 92,089 | ||||||||
Hudson
Europe
|
46,200 | 36,959 | 132,041 | 105,520 | ||||||||||||
Hudson
ANZ
|
47,271 | 39,789 | 127,689 | 110,766 | ||||||||||||
Hudson
Asia
|
194 | 173 | 475 | 571 | ||||||||||||
Total
|
$ | 122,161 | $ | 103,358 | $ | 349,695 | $ | 308,946 | ||||||||
Temporary
contracting gross margin:
|
||||||||||||||||
Hudson
Americas
|
$ | 7,981 | $ | 8,000 | $ | 24,658 | $ | 26,439 | ||||||||
Hudson
Europe
|
9,572 | 9,199 | 27,509 | 28,104 | ||||||||||||
Hudson
ANZ
|
8,064 | 8,078 | 22,958 | 21,335 | ||||||||||||
Hudson
Asia
|
132 | 82 | 291 | 250 | ||||||||||||
Total
|
$ | 25,749 | $ | 25,359 | $ | 75,416 | $ | 76,128 | ||||||||
Temporary
contracting gross margin as a percent of temporary contracting
revenue:
|
||||||||||||||||
Hudson
Americas
|
21.9 | % | 23.2 | % | 21.6 | % | 22.3 | % | ||||||||
Hudson
Europe
|
17.2 | % | 19.9 | % | 17.2 | % | 21.0 | % | ||||||||
Hudson
ANZ
|
14.6 | % | 16.9 | % | 15.2 | % | 16.2 | % | ||||||||
Hudson
Asia
|
40.5 | % | 32.2 | % | 38.0 | % | 30.5 | % |
(a)
|
Temporary
contracting revenue is a component of our revenue. Temporary contracting
gross margin and temporary contracting gross margin as a percent of
temporary revenue are shown to provide additional information on the
Company’s ability to manage its cost structure and provide further
comparability relative to the Company’s peers. Temporary contracting gross
margin is derived by deducting the direct costs of temporary contracting
from temporary contracting revenue. The Company’s calculation of gross
margin may differ from those of other
companies.
|
For The Three Month Ended September 30,
|
For The Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||||||||||||
|
Currency
|
Constant
|
|
|
Currency
|
Constant
|
|
|||||||||||||||||||||||||
As
reported
|
translation
|
currency
|
As
reported
|
As
reported
|
translation
|
currency
|
As
reported
|
|||||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||||||||
Hudson
Americas
|
$ | 37,839 | $ | (15 | ) | $ | 37,824 | $ | 35,705 | $ | 118,165 | $ | (73 | ) | $ | 118,092 | $ | 122,861 | ||||||||||||||
Hudson
Europe
|
80,503 | 5,580 | 86,083 | 67,898 | 237,875 | 4,143 | 242,018 | 202,473 | ||||||||||||||||||||||||
Hudson
ANZ
|
72,974 | (5,843 | ) | 67,131 | 59,026 | 195,045 | (29,549 | ) | 165,496 | 165,675 | ||||||||||||||||||||||
Hudson
Asia
|
9,078 | (281 | ) | 8,797 | 7,018 | 24,396 | (647 | ) | 23,749 | 17,636 | ||||||||||||||||||||||
Total
|
200,394 | (559 | ) | 199,835 | 169,647 | 575,481 | (26,126 | ) | 549,355 | 508,645 | ||||||||||||||||||||||
Direct
costs:
|
||||||||||||||||||||||||||||||||
Hudson
Americas
|
28,528 | - | 28,528 | 26,447 | 89,522 | - | 89,522 | 92,120 | ||||||||||||||||||||||||
Hudson
Europe
|
47,856 | 3,144 | 51,000 | 38,327 | 138,153 | 2,032 | 140,185 | 111,318 | ||||||||||||||||||||||||
Hudson
ANZ
|
48,715 | (3,901 | ) | 44,814 | 40,272 | 131,287 | (20,189 | ) | 111,098 | 112,957 | ||||||||||||||||||||||
Hudson
Asia
|
304 | (14 | ) | 290 | 411 | 871 | (33 | ) | 838 | 1,172 | ||||||||||||||||||||||
Total
|
125,403 | (771 | ) | 124,632 | 105,457 | 359,833 | (18,190 | ) | 341,643 | 317,567 | ||||||||||||||||||||||
Gross
margin:
|
||||||||||||||||||||||||||||||||
Hudson
Americas
|
9,311 | (15 | ) | 9,296 | 9,258 | 28,643 | (73 | ) | 28,570 | 30,741 | ||||||||||||||||||||||
Hudson
Europe
|
32,647 | 2,436 | 35,083 | 29,571 | 99,722 | 2,111 | 101,833 | 91,155 | ||||||||||||||||||||||||
Hudson
ANZ
|
24,259 | (1,942 | ) | 22,317 | 18,754 | 63,758 | (9,360 | ) | 54,398 | 52,718 | ||||||||||||||||||||||
Hudson
Asia
|
8,774 | (267 | ) | 8,507 | 6,607 | 23,525 | (614 | ) | 22,911 | 16,464 | ||||||||||||||||||||||
Total
|
$ | 74,991 | $ | 212 | $ | 75,203 | $ | 64,190 | $ | 215,648 | $ | (7,936 | ) | $ | 207,712 | $ | 191,078 | |||||||||||||||
Selling,
general and administrative (a):
|
||||||||||||||||||||||||||||||||
Hudson
Americas
|
$ | 9,572 | $ | (17 | ) | $ | 9,555 | $ | 11,935 | $ | 31,580 | $ | (102 | ) | $ | 31,478 | $ | 39,127 | ||||||||||||||
Hudson
Europe
|
32,473 | 2,435 | 34,908 | 30,456 | 95,223 | 1,844 | 97,067 | 95,130 | ||||||||||||||||||||||||
Hudson
ANZ
|
22,083 | (1,789 | ) | 20,294 | 17,775 | 59,575 | (9,216 | ) | 50,359 | 52,040 | ||||||||||||||||||||||
Hudson
Asia
|
7,224 | (201 | ) | 7,023 | 5,747 | 20,137 | (500 | ) | 19,637 | 17,211 | ||||||||||||||||||||||
Corporate
|
5,007 | - | 5,007 | 4,240 | 14,059 | - | 14,059 | 14,303 | ||||||||||||||||||||||||
Total
|
$ | 76,359 | $ | 428 | $ | 76,787 | $ | 70,153 | $ | 220,574 | $ | (7,974 | ) | $ | 212,600 | $ | 217,811 | |||||||||||||||
Operating
(loss) income:
|
||||||||||||||||||||||||||||||||
Hudson
Americas
|
$ | (305 | ) | $ | 1 | $ | (304 | ) | $ | (3,264 | ) | $ | (3,235 | ) | $ | 40 | $ | (3,195 | ) | $ | (11,603 | ) | ||||||||||
Hudson
Europe
|
190 | 1 | 191 | (2,762 | ) | 4,010 | 227 | 4,237 | (10,531 | ) | ||||||||||||||||||||||
Hudson
ANZ
|
2,161 | (155 | ) | 2,006 | 570 | 4,259 | (173 | ) | 4,086 | (1,615 | ) | |||||||||||||||||||||
Hudson
Asia
|
1,553 | (66 | ) | 1,487 | 865 | 3,387 | (116 | ) | 3,271 | (2,516 | ) | |||||||||||||||||||||
Corporate
|
(5,008 | ) | - | (5,008 | ) | (4,250 | ) | (14,052 | ) | - | (14,052 | ) | (14,296 | ) | ||||||||||||||||||
Total
|
$ | (1,409 | ) | $ | (219 | ) | $ | (1,628 | ) | $ | (8,841 | ) | $ | (5,631 | ) | $ | (22 | ) | $ | (5,653 | ) | $ | (40,561 | ) |
(a)
|
Selling,
general and administrative expenses include depreciation and amortization
expense of $1,981 and $2,741, respectively, for the three months ended
September 30, 2010 and 2009 and depreciation and amortization expense of
$6,453 and $9,369, respectively, for the nine months ended September 30,
2010 and 2009.
|
For The Nine Months Ended September 30,
|
||||||||
(In millions)
|
2010
|
2009
|
||||||
Net
cash used in operating activities
|
$ | (20.1 | ) | $ | (20.6 | ) | ||
Net
cash (used in) provided by investing activities
|
(2.4 | ) | 8.9 | |||||
Net
cash provided by financing activities
|
20.4 | 4.4 | ||||||
Effect
of exchange rates on cash and cash equivalents
|
0.2 | 2.6 | ||||||
Net
decrease in cash and cash equivalents
|
$ | (1.9 | ) | $ | (4.7 | ) |
|
·
|
limitations
on payments of dividends;
|
|
·
|
restrictions
on our ability to make additional borrowings, or to consolidate, merge or
otherwise fundamentally change our
ownership;
|
|
·
|
limitations
on capital expenditures, investments, dispositions of assets, guarantees
of indebtedness, permitted acquisitions and repurchases of stock;
and
|
|
·
|
limitations
on certain intercompany payments of expenses, interest and
dividends
|
Approximate Dollar
|
||||||||||||||||
Total Number of
|
Value of Shares
|
|||||||||||||||
Shares Purchased as
|
that May Yet Be
|
|||||||||||||||
Part of Publicly
|
Purchased Under
|
|||||||||||||||
Total Number of
|
Average Price
|
Announced Plans
|
the Plans or
|
|||||||||||||
Period
|
Shares Purchased
|
Paid per Share
|
or Programs
|
Programs (a)
|
||||||||||||
July
1, 2010 - July 31, 2010 (b)
|
4,528 | $ | 4.26 | - | $ | 6,792,000 | ||||||||||
August
1, 2010 - August 31, 2010 (b)
|
3,170 | $ | 4.06 | - | $ | 6,792,000 | ||||||||||
September
1, 2010 - September 30, 2010
|
- | $ | - | - | $ | 6,792,000 | ||||||||||
Total
|
7,698 | $ | 4.18 | - | $ | 6,792,000 |
(a)
|
On
February 4, 2008, the Company announced that its Board of Directors
authorized the repurchase of a maximum of $15 million of the
Company’s common stock. The Company has repurchased 1,491,772 shares for a
total cost of approximately $8.2 million under this authorization.
Repurchases of common stock are restricted under the Company’s Revolver
Agreement entered on August 5,
2010.
|
(b)
|
Consisted
of restricted stock withheld from employees upon the vesting of such
shares to satisfy employees’ income tax withholding
requirements.
|
HUDSON
HIGHLAND GROUP, INC.
(Registrant)
|
||
By:
|
/s/ Jon F. Chait
|
|
Jon
F. Chait
|
||
Chairman
and Chief Executive Officer
|
||
(Principal
Executive Officer)
|
||
Dated:
October 29, 2010
|
||
By:
|
/s/ Mary Jane
Raymond
|
|
Mary
Jane Raymond
|
||
Executive Vice President and Chief Financial Officer
|
||
|
(Principal
Financial Officer)
|
|
Dated:
October 29, 2010
|
Exhibit
No.
|
Description
|
||
4.1
|
Loan
and Security Agreement, dated as of August 5, 2010, by and among Hudson
Highland Group, Inc. and each of its subsidiaries that are signatories
thereto, as Borrowers, the lenders that are signatories thereto, as
Lenders, and RBS Business Capital, a division of RBS Asset Finance, Inc.,
as Agent (incorporated by reference to Exhibit 4.1 to Hudson Highland
Group, Inc.’s Current Report on Form 8-K dated August 3, 2010 (File No.
0-50129)).
|
||
4.2
|
Receivables
Finance Agreement, dated as of August 3, 2010, by and between Hudson
Global Resources (Aust) Pty Limited and Commonwealth Bank of Australia
(incorporated by reference to Exhibit 4.2 to Hudson Highland Group, Inc.’s
Current Report on Form 8-K dated August 3, 2010 (File No.
0-50129)).
|
||
4.3
|
Receivables
Finance Facility Offer Letter, accepted as of August 3, 2010, from
Commonwealth Bank of Australia to Hudson Global Resources (Aust) Pty
Limited (incorporated by reference to Exhibit 4.3 to Hudson Highland
Group, Inc.’s Current Report on Form 8-K dated August 3, 2010 (File No.
0-50129)).
|
||
4.4
|
Letter
of Approval, accepted as of August 3, 2010, from Commonwealth Bank of
Australia to Hudson Global Resources (Aust) Pty Limited (incorporated by
reference to Exhibit 4.4 to Hudson Highland Group, Inc.’s Current Report
on Form 8-K dated August 3, 2010 (File No. 0-50129)).
|
||
31.1
|
Certification
by Chairman and Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act.
|
||
31.2
|
Certification
by the Executive Vice President and Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act.
|
||
32.1
|
Certification
of the Chairman and Chief Executive Officer pursuant to 18 U.S.C. Section
1350.
|
||
32.2
|
Certification
of the Executive Vice President and Chief Financial Officer pursuant to 18
U.S.C. Section
1350.
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Hudson Highland Group,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
function):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Dated:
October 29, 2010
|
/s/ Jon F. Chait
|
Jon
F. Chait
|
|
Chairman and Chief Executive Officer
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Hudson Highland Group,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
function):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Dated:
October 29, 2010
|
/s/ Mary Jane
Raymond
|
Mary
Jane Raymond
|
|
Executive
Vice President and Chief Financial
Officer
|
/s/ Jon F. Chait
|
Jon
F. Chait
|
October
29, 2010
|
/s/ Mary Jane
Raymond
|
Mary
Jane Raymond
|
October
29, 2010
|