UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 11, 2008
Hudson Highland Group, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-50129 | 59-3547281 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
560 Lexington Avenue, New York, New York 10022
(Address of principal executive offices, including zip code)
(212) 351-7300
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
On February 11, 2008, Hudson Highland Group, Inc. posted on its web site unaudited pro forma consolidated condensed statements of operations of Hudson Highland Group, Inc. (the “Company”) for the three months ended March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007, September 30, 2007 and December 31, 2007 reflecting the sale (the “Sale”) of the Company’s energy and engineering staffing business. The unaudited pro forma consolidated condensed statements of operations give effect to the Sale as if it occurred on January 1, 2006. The unaudited pro forma consolidated condensed statements of operations of the Company for September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007, September 30, 2007 reflect the restatement as previously disclosed in the Company’s Current Report on Form 8-K filed on February 4, 2008. A copy of the unaudited pro forma consolidated condensed statements of operations as posted to the Company’s web site is furnished as Exhibit 99.1 to this Current Report.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(a) Financial Statements.
None.
(b) Pro Forma Financial Information.
None.
(c) Shell Company Transactions
None.
(d) Exhibits
| 99.1 | Unaudited pro forma consolidated condensed statements of operations of Hudson Highland Group, Inc. posted to Company’s web site. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HUDSON HIGHLAND GROUP, INC. | ||||
| Date: February 11, 2008 | By: | /s/ MARY JANE RAYMOND | ||
| Mary Jane Raymond | ||||
| Executive Vice President and Chief Financial Officer | ||||
3
HUDSON HIGHLAND GROUP, INC.
Exhibit Index to Current Report on Form 8-K
| Exhibit Number |
||
| 99.1 |
Unaudited pro forma consolidated condensed statements of operations of Hudson Highland Group, Inc. posted to Company’s web site. |
4
Exhibit 99.1
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
The unaudited pro forma consolidated condensed statements of operations of Hudson Highland Group, Inc. (the “Company”) for the three months ended March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007, September 30, 2007 and December 31, 2007 reflect the sale (the “Sale”) of the Company’s energy and engineering staffing business. The unaudited pro forma consolidated condensed statements of operations give effect to the Sale as if it occurred on January 1, 2006. The unaudited pro forma financial information is based on the historical financial statements of the Company after giving effect to the Sale and is not necessarily indicative of the financial position or results of operations of the Company that would have actually occurred had the Sale occurred as of January 1, 2006. The unaudited pro forma consolidated condensed financial statements have been prepared based on preliminary estimates. In the opinion of management, all adjustments have been made that are necessary to present fairly the unaudited pro forma financial information. The unaudited pro forma consolidated condensed statements of operations should be read in conjunction with the Company’s Form 8-K filed with the Securities and Exchange Commission on February 6, 2008 and the historical financial statements included in its Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006, September 30, 2006, March 31, 2007, June 30, 2007 and September 30, 2007.
Restatement
As previously disclosed in the Company’s Current Report on Form 8-K filed on February 4, 2008, the Company has concluded that it will restate the consolidated financial statements in its previously issued Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the quarters ended September 30, 2006, March 31, 2007, June 30, 2007, September 30, 2007 and December 31, 2007. The Company will include the restated financial information in a filing with the Securities and Exchange Commission prior to or in connection with timely filing its Annual Report on Form 10-K for the year ended December 31, 2007.
The restatement relates to the timing of recording contingent payments related to the acquisition of Balance Ervaring Op Projectbasis B.V. (“Balance”) and to expense a portion of the contingent payments, including €1.3 million that was previously recorded as goodwill when the amount was paid in the second quarter of 2007. The restatement results in an increase in the Company’s and the Hudson Europe segment’s reported operating expenses and an equivalent reduction in EBITDA, operating income, income from continuing operations and net income for each of the periods as follows:
| Three months ended September 30, 2006 |
$0.8 million ($0.03 per basic and diluted share) | |
| Three months ended December 31, 2006 |
$0.9 million ($0.03 per basic and diluted share) | |
| Three months ended March 31, 2007 |
$0.3 million ($0.01 per basic and diluted share) | |
| Three months ended June 30, 2007 |
$0.3 million ($0.01 per basic and diluted share) | |
| Three months ended September 30, 2007 |
$0.3 million ($0.01 per basic and diluted share) | |
| Three months ended December 31, 2007 |
$0.8 million ($0.03 per basic and diluted share) |
The financial information herein has been restated to reflect this restatement.
Discontinued Operations
On December 14, 2007, the Company completed the sale of all of the outstanding shares of its Netherlands reintegration subsidiary, Hudson Human Capital Solutions B.V. (“HHCS”). On October 2, 2007, certain of the Company’s subsidiaries entered into a purchase agreement to sell Hudson Asia Pacific’s trade and industrial business (“T&I”). The financial information herein for the three months ended March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007, September 30, 2007 and December 31, 2007 (called “restated” in the unaudited pro forma consolidated condensed statements of operations) have been restated to reflect HHCS and T&I as discontinued operations. In the attached unaudited pro forma consolidated condensed statements of operations, “Pro Forma Adjustments” reflects the Sale and “Pro Forma Results” reflects the information for the company’s ongoing operations. Unaudited pro forma financial information for the sales of HHCS and T&I were included in a Current Report on Form 8-K filed December 19, 2007 and October 29, 2007, respectively.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended March 31, 2006 | ||||||||||||
| Restated | Pro Forma Adjustments (A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 312,302 | $ | (37,768 | ) | $ | 274,534 | |||||
| Direct costs |
204,900 | (33,351 | ) | 171,549 | ||||||||
| Gross margin |
107,402 | (4,417 | ) | 102,985 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
111,120 | (3,624 | ) | 107,496 | ||||||||
| Acquisition-related expenses |
— | — | — | |||||||||
| Depreciation and amortization |
4,079 | (32 | ) | 4,047 | ||||||||
| Business reorganization expenses |
— | — | — | |||||||||
| Merger and integration recoveries |
— | — | — | |||||||||
| Operating loss |
(7,797 | ) | (761 | ) | (8,558 | ) | ||||||
| Other income (expense): |
||||||||||||
| Other, net |
926 | 5 | 931 | |||||||||
| Interest, net |
(382 | ) | — | (382 | ) | |||||||
| Loss from continuing operations before provision for income taxes |
(7,253 | ) | (756 | ) | (8,009 | ) | ||||||
| Provision for income taxes |
1,379 | — | 1,379 | |||||||||
| Loss from continuing operations |
$ | (8,632 | ) | $ | (756 | ) | $ | (9,388 | ) | |||
| Basic and diluted per share: |
||||||||||||
| Loss from continuing operations |
$ | (0.36 | ) | $ | (0.39 | ) | ||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic and diluted |
24,224,000 | 24,224,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended June 30, 2006 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 336,370 | $ | (38,968 | ) | $ | 297,402 | |||||
| Direct costs |
211,277 | (33,752 | ) | 177,525 | ||||||||
| Gross margin |
125,093 | (5,216 | ) | 119,877 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
116,282 | (3,677 | ) | 112,605 | ||||||||
| Acquisition-related expenses |
— | — | — | |||||||||
| Depreciation and amortization |
3,936 | (29 | ) | 3,907 | ||||||||
| Business reorganization expenses |
658 | (2 | ) | 656 | ||||||||
| Merger and integration expenses |
72 | (11 | ) | 61 | ||||||||
| Operating income |
4,145 | (1,497 | ) | 2,648 | ||||||||
| Other income (expense): |
||||||||||||
| Other, net |
144 | 5 | 149 | |||||||||
| Interest, net |
(763 | ) | — | (763 | ) | |||||||
| Income from continuing operations before provision for income taxes |
3,526 | (1,492 | ) | 2,034 | ||||||||
| Provision for income taxes |
2,409 | — | 2,409 | |||||||||
| Income (loss) from continuing operations |
$ | 1,117 | $ | (1,492 | ) | $ | (375 | ) | ||||
| Earnings (loss) per share: |
||||||||||||
| Basic income (loss) from continuing operations |
$ | 0.05 | $ | (0.02 | ) | |||||||
| Diluted income (loss) from continuing operations |
$ | 0.04 | $ | (0.02 | ) | |||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
24,414,000 | 24,414,000 | ||||||||||
| Diluted |
25,172,000 | 24,414,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended September 30, 2006 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 337,165 | $ | (37,648 | ) | $ | 299,517 | |||||
| Direct costs |
213,472 | (32,282 | ) | 181,190 | ||||||||
| Gross margin |
123,693 | (5,366 | ) | 118,327 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
112,913 | (3,549 | ) | 109,364 | ||||||||
| Acquisition-related expenses |
829 | — | 829 | |||||||||
| Depreciation and amortization |
3,757 | (25 | ) | 3,732 | ||||||||
| Business reorganization expenses |
2,089 | (27 | ) | 2,062 | ||||||||
| Merger and integration expenses |
14 | — | 14 | |||||||||
| Operating income |
4,091 | (1,765 | ) | 2,326 | ||||||||
| Other income (expense): |
||||||||||||
| Other, net |
725 | 2 | 727 | |||||||||
| Interest, net |
(662 | ) | — | (662 | ) | |||||||
| Income from continuing operations before provision for income taxes |
4,154 | (1,763 | ) | 2,391 | ||||||||
| Provision for income taxes |
1,994 | — | 1,994 | |||||||||
| Income from continuing operations |
$ | 2,160 | $ | (1,763 | ) | $ | 397 | |||||
| Basic and diluted per share: |
||||||||||||
| Income from continuing operations |
$ | 0.09 | $ | 0.02 | ||||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
24,574,000 | 24,574,000 | ||||||||||
| Diluted |
25,023,000 | 25,023,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended December 31, 2006 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 324,525 | $ | (38,104 | ) | $ | 286,421 | |||||
| Direct costs |
201,398 | (33,043 | ) | 168,355 | ||||||||
| Gross margin |
123,127 | (5,061 | ) | 118,066 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
109,524 | (3,235 | ) | 106,289 | ||||||||
| Acquisition-related expenses |
858 | — | 858 | |||||||||
| Depreciation and amortization |
8,141 | (24 | ) | 8,117 | ||||||||
| Business reorganization expenses |
3,301 | (4 | ) | 3,297 | ||||||||
| Merger and integration expenses |
287 | — | 287 | |||||||||
| Operating income (loss) |
1,016 | (1,798 | ) | (782 | ) | |||||||
| Other income (expense): |
||||||||||||
| Other, net |
(225 | ) | 2 | (223 | ) | |||||||
| Interest, net |
173 | — | 173 | |||||||||
| Income (loss) from continuing operations before provision for income taxes |
964 | (1,796 | ) | (832 | ) | |||||||
| Benefit from income taxes |
(2,011 | ) | — | (2,011 | ) | |||||||
| Income from continuing operations |
$ | 2,975 | $ | (1,796 | ) | $ | 1,179 | |||||
| Basic and diluted per share: |
||||||||||||
| Income from continuing operations |
$ | 0.12 | $ | 0.05 | ||||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
24,668,000 | 24,668,000 | ||||||||||
| Diluted |
25,346,000 | 25,346,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended March 31, 2007 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 324,407 | $ | (36,257 | ) | $ | 288,150 | |||||
| Direct costs |
201,678 | (31,271 | ) | 170,407 | ||||||||
| Gross margin |
122,729 | (4,986 | ) | 117,743 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
116,713 | (3,748 | ) | 112,965 | ||||||||
| Acquisition-related expenses |
298 | — | 298 | |||||||||
| Depreciation and amortization |
3,717 | (22 | ) | 3,695 | ||||||||
| Business reorganization expenses |
3,116 | — | 3,116 | |||||||||
| Merger and integration expenses |
— | — | — | |||||||||
| Operating loss |
(1,115 | ) | (1,216 | ) | (2,331 | ) | ||||||
| Other income (expense): |
||||||||||||
| Other, net |
2,606 | 1 | 2,607 | |||||||||
| Interest, net |
212 | — | 212 | |||||||||
| Loss from continuing operations before provision for income taxes |
1,703 | (1,215 | ) | 488 | ||||||||
| Provision for income taxes |
2,266 | — | 2,266 | |||||||||
| Loss from continuing operations |
$ | (563 | ) | $ | (1,215 | ) | $ | (1,778 | ) | |||
| Basic and diluted per share: |
||||||||||||
| Loss from continuing operations |
$ | (0.02 | ) | $ | (0.07 | ) | ||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic and diluted |
24,919,000 | 24,919,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended June 30, 2007 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 334,313 | $ | (35,785 | ) | $ | 298,528 | |||||
| Direct costs |
199,347 | (31,023 | ) | 168,324 | ||||||||
| Gross margin |
134,966 | (4,762 | ) | 130,204 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
122,184 | (4,206 | ) | 117,978 | ||||||||
| Acquisition-related expenses |
3,853 | — | 3,853 | |||||||||
| Depreciation and amortization |
3,874 | (20 | ) | 3,854 | ||||||||
| Business reorganization expenses |
1,578 | — | 1,578 | |||||||||
| Merger and integration expenses |
(42 | ) | — | (42 | ) | |||||||
| Operating income |
3,519 | (536 | ) | 2,983 | ||||||||
| Other income (expense): |
||||||||||||
| Other, net |
(22 | ) | 3 | (19 | ) | |||||||
| Interest, net |
435 | — | 435 | |||||||||
| Income from continuing operations before provision for income taxes |
3,932 | (533 | ) | 3,399 | ||||||||
| Provision for income taxes |
4,491 | — | 4,491 | |||||||||
| Loss from continuing operations |
$ | (559 | ) | $ | (533 | ) | $ | (1,092 | ) | |||
| Basic and diluted per share: |
||||||||||||
| Loss from continuing operations |
$ | (0.02 | ) | $ | (0.04 | ) | ||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic and diluted |
25,247,000 | 25,247,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended September 30, 2007 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 337,652 | $ | (35,739 | ) | $ | 301,913 | |||||
| Direct costs |
203,133 | (31,202 | ) | 171,931 | ||||||||
| Gross margin |
134,519 | (4,537 | ) | 129,982 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
122,879 | (3,920 | ) | 118,959 | ||||||||
| Acquisition-related expenses |
311 | — | 311 | |||||||||
| Depreciation and amortization |
3,563 | (20 | ) | 3,543 | ||||||||
| Business reorganization expenses |
(56 | ) | — | (56 | ) | |||||||
| Merger and integration expenses |
(753 | ) | — | (753 | ) | |||||||
| Operating income |
8,575 | (597 | ) | 7,978 | ||||||||
| Other income (expense): |
||||||||||||
| Other, net |
1,096 | 3 | 1,099 | |||||||||
| Interest, net |
(142 | ) | — | (142 | ) | |||||||
| Income from continuing operations before provision for income taxes |
9,529 | (594 | ) | 8,935 | ||||||||
| Provision for income taxes |
5,721 | — | 5,721 | |||||||||
| Income from continuing operations |
$ | 3,808 | $ | (594 | ) | $ | 3,214 | |||||
| Earnings per share: |
||||||||||||
| Basic income per share from continuing operations |
$ | 0.15 | $ | 0.13 | ||||||||
| Diluted income per share from continuing operations |
$ | 0.15 | $ | 0.12 | ||||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
25,443,000 | 25,443,000 | ||||||||||
| Diluted |
26,058,000 | 26,058,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended December 31, 2007 | ||||||||||||
| Restated | Pro Forma Adjustments(A) |
Pro Forma Results |
||||||||||
| Revenue |
$ | 328,940 | $ | (38,456 | ) | $ | 290,484 | |||||
| Direct costs |
194,541 | (34,041 | ) | 160,500 | ||||||||
| Gross margin |
134,399 | (4,415 | ) | 129,984 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative expenses |
119,944 | (3,433 | ) | 116,511 | ||||||||
| Acquisition-related expenses |
837 | — | 837 | |||||||||
| Depreciation and amortization |
3,552 | (20 | ) | 3,532 | ||||||||
| Business reorganization expenses |
(276 | ) | — | (276 | ) | |||||||
| Merger and integration expenses |
8 | — | 8 | |||||||||
| Operating income |
10,334 | (962 | ) | 9,372 | ||||||||
| Other income (expense): |
||||||||||||
| Other, net |
(243 | ) | 1 | (242 | ) | |||||||
| Interest, net |
195 | — | 195 | |||||||||
| Income from continuing operations before provision for income taxes |
10,286 | (961 | ) | 9,325 | ||||||||
| Provision for income taxes |
4,762 | — | 4,762 | |||||||||
| Income from continuing operations |
$ | 5,524 | $ | (961 | ) | $ | 4,563 | |||||
| Earnings per share: |
||||||||||||
| Basic income per share from continuing operations |
$ | 0.22 | $ | 0.18 | ||||||||
| Diluted income per share from continuing operations |
$ | 0.21 | $ | 0.18 | ||||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
25,479,000 | 25,479,000 | ||||||||||
| Diluted |
25,781,000 | 25,781,000 | ||||||||||
The accompanying note is an integral part of this financial statement.
HUDSON HIGHLAND GROUP, INC.
NOTE TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. Pro Forma Adjustments
The accompanying unaudited pro forma consolidated condensed financial statements give effect to the following pro forma adjustments necessary to reflect the disposition and discontinuation of operations of the Company’s engineering and technical staffing division as outlined in the proceeding introduction as if the disposition occurred on January 1, 2006 in the unaudited pro forma consolidated condensed statements of operations.
| (A) | Reduction of revenue and expenses are the result of the disposition of the Company’s energy and engineering staffing business. These amounts do not consider an allocation of corporate overhead to the companies that are to be divested, and therefore, selling general and administrative expenses do not reflect any potential reductions in costs in response to this change in the Company. |