Hudson Global, Inc.
Hudson Global Reports 2014 Fourth Quarter and Full-Year Results
DGAP-News: Hudson Global, Inc. 2015-02-26 / 13:00 --------------------------------------------------------------------- NEW YORK, 2015-02-26 13:00 CET (GLOBE NEWSWIRE) -- Hudson Global, Inc. (Nasdaq:HSON), a leading global talent solutions company, today announced financial results for the fourth quarter and full-year ended December 31, 2014. 2014 Fourth Quarter Summary -- Revenue of $136.7 million, a decrease of 2.4 percent from the fourth quarter of 2013, and an increase of 2.8 percent in constant currency. -- Gross margin of $53.3 million or 39.0 percent of revenue, an increase of 0.8 percent from the same period in 2013, or 6.4 percent in constant currency. -- Adjusted EBITDA* loss of $2.4 million, compared with adjusted EBITDA loss of $2.0 million in the fourth quarter of 2013. -- Restructuring charges of $1.8 million, asset impairments of $0.7 million and other income of $0.5 million in the fourth quarter of 2014. -- Net loss from continuing operations of $3.5 million, or $0.11 per basic and diluted share, compared with net loss of $10.3 million, or $0.32 per basic and diluted share, for the fourth quarter of 2013. -- Net income** of $2.7 million, or $0.08 per basic and diluted share, compared with net loss of $11.3 million, or $0.35 per basic and diluted share, for the fourth quarter of 2013. 2014 Full-Year Summary -- Revenue of $581.2 million, an increase of 3.3 percent from 2013, or 3.5 percent in constant currency. -- Gross margin of $222.8 million, or 38.3 percent of revenue, an increase of 6.4 percent from 2013, or 7.1 percent in constant currency. -- Adjusted EBITDA* loss of $7.5 million, compared with adjusted EBITDA loss of $14.4 million in 2013. -- Restructuring charges of $3.8 million, asset impairments of $0.7 million and other income of $0.2 million in 2014. -- Net loss from continuing operations of $15.8 million, or $0.48 per basic and diluted share, compared with net loss of $30.2 million, or $0.93 per basic and diluted share, in 2013. -- Net loss** of $13.2 million, or $0.40 per basic and diluted share, compared with net loss of $30.4 million, or $0.94 per basic and diluted share, in 2013. * Adjusted EBITDA are defined in the segment tables at the end of this release. ** Includes continuing and discontinued operations. 'We delivered our fourth consecutive quarter of constant currency revenue and gross margin growth,' said Manolo Marquez, chairman and chief executive officer at Hudson. 'In 2014, we realized double-digit constant currency growth in Recruitment Process Outsourcing (RPO), talent management and permanent recruitment. We have made meaningful progress in the company's transformation, narrowed our focus on our core business lines with the sale of Legal eDiscovery and further strengthened our path to profitability.' Stephen Nolan, chief financial officer at Hudson said, 'We are encouraged by the growth we are experiencing in most of our key markets and the benefits of our cost reduction actions. With strong liquidity and a focus on core markets, we are committed to delivering positive adjusted EBITDA in 2015.' Strategic Actions The company's strategic actions are focused on driving consistent, sustainable growth and profitability. To accelerate the implementation of the company's strategy, we have engaged in the following initiatives: -- Investing in the core businesses and practices that present the greatest potential for profitable growth. -- Further improving the company's cost structure and efficiency of its support functions and infrastructure. -- Building and differentiating the company's brand through its unique talent solutions offerings. During the fourth quarter, the company continued to implement its strategy narrowing its focus on core businesses by divesting its Legal eDiscovery business. To better align the organization model and support profitable growth in core areas, the company continued driving cost reductions in the expense base, particularly in support and real estate, based on the recommendations of AlixPartners, LLP. The Hudson Board of Directors has approved restructuring charges of up to $11.1 million to be taken by the third quarter of 2015. This includes $4.1 million approved in December 2014 for real estate optimization costs, including real estate related to the company's former Legal eDiscovery business. During the fourth quarter the company incurred restructuring charges in continuing operations totaling $1.8 million for headcount reductions primarily in Europe and Corporate, and $2.3 million in discontinued operations primarily related to real estate exit costs. The company expects an ongoing annualized return of 1.5 to 2x on continuing operations charges. The company also made investments in core markets to drive profitable growth, expanding consultant headcount by 14 percent during 2014. The productivity of new hires gradually increased during 2014 and is expected to continue improving in 2015. Regional Highlights Americas In the fourth quarter, Hudson Americas' gross margin increased 8 percent as compared with the fourth quarter in 2013. This was driven by growth in RPO, up 46 percent in the fourth quarter against prior year, partially offset by a 19 percent decline in IT. The company continues to support some stranded costs remaining in the Americas following the November 2014 sale of its eDiscovery business, which totaled approximately $0.5 million in the fourth quarter. Adjusted EBITDA declined to $0.1 million or 1.2 percent of revenue for the fourth quarter, compared with $1.2 million or 10.0 percent of revenue for the same period a year ago. Hudson Americas' gross margin in 2014 increased 11 percent from 2013. RPO gross margin increased by 47 percent in 2014 and is now the largest gross margin practice in the Americas. In November 2014, the company sold its Legal eDiscovery business for $23 million. Adjusted EBITDA was $1.4 million, or 2.9 percent of revenue, compared with $2.3 million, or 4.5 percent of revenue, in 2013. Asia Pacific Hudson Asia Pacific's gross margin increased 21 percent in constant currency in the fourth quarter of 2014 from the same period in 2013. This was the fourth consecutive quarter of year-over-year gross margin growth. Results were fueled by permanent recruitment, up 40 percent, and RPO, up 17 percent, against the fourth quarter of 2013. This growth was primarily realized in China and Australia with gross margin increasing 52 percent and 16 percent, respectively, against the prior year. Asia Pacific delivered adjusted EBITDA of $0.2 million, or 0.3 percent of revenue, improving from adjusted EBITDA loss of $1.3 million in the fourth quarter of 2013. In 2014, gross margin increased 11 percent in Hudson Asia Pacific in constant currency compared with 2013. Results were driven by 18 percent growth in permanent recruitment, 19 percent growth in RPO and 20 percent growth in talent management against 2013. Growth by country was led by Australia and China, up 12 percent and 33 percent, respectively, against prior year. During 2014, Hudson invested in additional consultants, up 24 percent from 2013, with their productivity improving throughout the year. Adjusted EBITDA was $1.9 million, or 0.8 percent of revenue, improving from adjusted EBITDA loss of $1.4 million in 2013. Europe During the fourth quarter of 2014, Hudson Europe's gross margin decreased 5 percent in constant currency from the fourth quarter of 2013. Continental Europe increased 1 percent in the quarter on strength in permanent recruitment and talent management, particularly in Belgium. This was offset by softer results in the UK, as permanent recruitment was particularly strong a year ago. Adjusted EBITDA of $1.8 million, or 2.8 percent of revenue, improved from $1.0 million, or 1.3 percent of revenue, in the fourth quarter of 2013. Hudson Europe's gross margin increased 3 percent in 2014 in constant currency compared with 2013. Both Continental Europe and the UK delivered gross margin growth for the year, up 5 percent and 1 percent, respectively. Growth was led by strength in permanent recruitment, up 12 percent from 2013, and talent management, up 8 percent. Those were offset by declines in RPO, down 21 percent as some projects concluded, and temporary contracting, down 4 percent. The region delivered full year adjusted EBITDA of $6.1 million, or 2.2 percent of revenue, improved from $0.6 million, or 0.2 percent of revenue in 2013. Liquidity and Capital Resources The company ended the fourth quarter of 2014 with $58.0 million in liquidity, composed of $34.0 million in cash and $24.0 million in availability under its credit facilities. This compares with $37.4 million in cash and $29.8 million in availability under its credit facilities at the end of 2013. The company generated $2.9 million in cash flow from operations during the fourth quarter and used $17.8 million in cash flow from operations for the year of 2014. The company had no outstanding borrowings at the end of the fourth quarter of 2014. Business Outlook Given current economic conditions, the company expects first quarter 2015 revenue of between $115 million and $125 million and an adjusted EBITDA loss of between $2.0 million and $4.0 million at prevailing exchange rates. This outlook assumes an average exchange rate of 1.52 US Dollars to the British Pound, 1.13 US Dollars to the Euro and 0.78 US Dollars to the Australian Dollar. In the first quarter of 2014, revenue was $144.2 million and adjusted EBITDA was a loss of $1.9 million. Conference Call/Webcast Hudson will conduct a conference call today at 10:00 a.m. ET to discuss this announcement. Individuals wishing to listen can access the webcast on the investor information section of the company's web site at Hudson.com. The archived call will be available on the investor information section of the company's web site at Hudson.com. About Hudson Hudson is a global talent solutions company with expertise in leadership and specialized recruitment, recruitment process outsourcing, talent management and contracting solutions. We help our clients and candidates succeed by leveraging our expertise, deep industry and market knowledge, and proprietary assessment tools and techniques. Operating in nearly 20 countries through relationships with millions of specialized professionals, we bring an unparalleled ability to match talent with opportunities by assessing, recruiting, developing and engaging the best and brightest people for our clients. We combine broad geographic presence, world-class talent solutions and a tailored, consultative approach to help businesses and professionals achieve higher performance and outstanding results. More information is available at Hudson.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 company's ability to successfully achieve its strategic initiatives; risks related to fluctuations in the company's operating results from quarter to quarter; the ability of clients to terminate their relationship with the company at any time; competition in the company's markets; the negative cash flows and operating losses that may recur in the future; restrictions on the company's operating flexibility due to the terms of its credit facilities; risks associated with the company's investment strategy; risks related to international operations, including foreign currency fluctuations; the company's dependence on key management personnel; the company's ability to attract and retain highly skilled professionals; the company's ability to collect accounts receivable; the company's ability to achieve anticipated cost savings through its cost reduction initiatives; the company's heavy reliance on information systems and the impact of potentially losing or failing to develop technology; risks related to providing uninterrupted service to clients; the company's exposure to employment-related claims from clients, employers and regulatory authorities, current and former employees in connection with the company's business reorganization initiatives and limits on related insurance coverage; the company's ability to utilize net operating loss carry-forwards; volatility of the company's stock price; the impact of government regulations; restrictions imposed by blocking arrangements; and risks related to activist stockholders. Additional information concerning these and other factors is contained in the company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. The company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise. Financial Tables Follow HUDSON GLOBAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) Three Months Ended Year Ended December 31, December 31, ---------------------------------------------- 2014 2013 2014 2013 ---------------------------------------------- Revenue $ 136,677 $ 139,999 $ 581,192 $ 562,572 Direct costs 83,421 87,161 358,347 353,143 ---------------------------------------------- Gross margin 53,256 52,838 222,845 209,429 Operating expenses: Selling, general and 55,649 54,845 230,321 223,877 administrative expenses Depreciation and amortization 1,317 1,461 5,559 5,922 Business reorganization 1,763 1,637 3,789 5,440 expenses Office integration expense and - - - 6 (gains) on disposal of business Impairment of long-lived 662 1,336 662 1,336 assets ---------------------------------------------- Total operating expenses 59,391 59,279 240,331 236,581 ---------------------------------------------- Operating income (loss) (6,135) (6,441) (17,486) (27,152) Non-operating income (expense): Interest income (expense), net (128) (132) (661) (554) Other income (expense), net 528 285 202 759 ---------------------------------------------- Income (loss) before provision (5,735) (6,288) (17,945) (26,947) for income taxes from continuing operations Provision for (benefit from) (2,196) 4,039 (2,159) 3,264 income taxes ---------------------------------------------- Income (loss) from continuing (3,539) (10,327) (15,786) (30,211) operations Income (loss) from discontinued 6,282 (969) 2,592 (184) operations, net of income taxes ---------------------------------------------- Net income (loss) $ 2,743 $ (11,296) $ (13,194) $ (30,395) ============================================== Earnings (loss) per share: Basic and diluted Income (loss) from continuing $ (0.11) $ (0.32) $ (0.48) $ (0.93) operations Income (loss) from discontinued 0.19 (0.03) 0.08 (0.01) operations ---------------------------------------------- Net income (loss) $ 0.08 $ (0.35) $ (0.40) $ (0.94) ---------------------------------------------- Weighted-average shares outstanding: Basic and diluted 32,995 32,600 32,843 32,493 Note: Certain prior year amounts have been reclassified to conform to the current period presentation. HUDSON GLOBAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited) December December 31, 31, 2014 2013 --------------------- ASSETS Current assets: Cash and cash equivalents $ 33,989 $ 37,378 Accounts receivable, less allowance for doubtful accounts 74,079 76,467 of $986 and $1,041, respectively Prepaid and other 9,604 7,960 Current assets of discontinued operations 1,249 12,518 --------------------- Total current assets 118,921 134,323 Property and equipment, net 9,840 11,989 Deferred tax assets, non-current 5,648 7,124 Other assets 5,263 5,393 --------------------- Total assets $ 139,672 $ 158,829 ===================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,371 $ 8,899 Accrued expenses and other current liabilities 54,065 51,917 Short-term borrowings - 476 Accrued business reorganization expenses 3,169 3,275 Current liabilities of discontinued operations 3,512 5,251 --------------------- Total current liabilities 67,117 69,818 Deferred rent and tenant improvement contributions 5,899 5,333 Income tax payable, non-current 2,397 3,872 Other non-current liabilities 5,002 5,421 --------------------- Total liabilities 80,415 84,444 --------------------- 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 34 34 authorized; issued 33,671 and 33,543 shares, respectively Additional paid-in capital 476,689 475,461 Accumulated deficit (430,616) (417,422) Accumulated other comprehensive income 13,613 17,173 Treasury stock, 129 and 211 shares, respectively, at cost (463) (861) --------------------- Total stockholders' equity 59,257 74,385 --------------------- Total liabilities and stockholders' equity $ 139,672 $ 158,829 ===================== HUDSON GLOBAL, INC. SEGMENT ANALYSIS - QUARTER TO DATE (in thousands) (unaudited) For The Three Months Hudson Hudson Hudson Corporate Total Ended December 31, 2014 Americas Asia Europe Pacific ------------------------------------------------------ Revenue, from external $ 11,709 $ 58,351 $ 66,617 $ - $ 136,677 customers ------------------------------------------------------ Gross margin, from $ 5,293 $ 22,930 $ 25,033 $ - $ 53,256 external customers ------------------------------------------------------ Adjusted EBITDA (loss) $ (138) $ 186 $ 1,840 $ (4,280) $ (2,392) (1) Business reorganization - 67 963 733 1,763 expenses (recovery) Impairment of long-lived - 314 348 - 662 assets Non-operating expense (579) 62 1,224 (1,234) (526) (income), including corporate administration charges ------------------------------------------------------ EBITDA (loss) (1) $ 441 $ (257) $ (695) $ (3,779) $ (4,290) Depreciation and 1,317 amortization expenses Interest expense 128 (income), net Provision for (benefit (2,196) from) income taxes ----------- Income (loss) from (3,539) continuing operations Income (loss) from 6,282 discontinued operations, net of income taxes ----------- Net income (loss) $ 2,743 =========== For The Three Months Hudson Hudson Hudson Corporate Total Ended December 31, 2013 Americas Asia Europe Pacific ------------------------------------------------------ Revenue, from external $ 12,348 $ 55,404 $ 72,247 $ - $ 139,999 customers ------------------------------------------------------ Gross margin, from $ 4,894 $ 20,044 $ 27,900 $ - $ 52,838 external customers ------------------------------------------------------ Adjusted EBITDA (loss) $ 1,235 $ (1,271) $ 953 $ (2,924) $ (2,007) (1) Business reorganization 88 887 635 27 1,637 expenses (recovery) Impairment of long-lived - 257 1,079 - 1,336 assets Non-operating expense 715 43 1,470 (2,514) (286) (income), including corporate administration charges ------------------------------------------------------ EBITDA (loss) (1) $ 432 $ (2,458) $ (2,231) $ (437) $ (4,694) Depreciation and 1,461 amortization expenses Interest expense 132 (income), net Provision for (benefit 4,039 from) income taxes ----------- Income (loss) from (10,327) continuing operations Income (loss) from (969) discontinued operations, net of income taxes ----------- Net income (loss) $ (11,296) =========== 1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization ('EBITDA') and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses ('Adjusted EBITDA') are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. HUDSON GLOBAL, INC. SEGMENT ANALYSIS - QUARTER TO DATE (continued) (in thousands) (unaudited) For The Three Months Ended Hudson Hudson Hudson Corporate Total September 30, 2014 Americas Asia Europe Pacific ---------------------------------------------------- Revenue, from external $ 13,036 $ 66,990 $ 69,252 $ - $ 149,278 customers ---------------------------------------------------- Gross margin, from external $ 5,570 $ 24,654 $ 25,463 $ - $ 55,687 customers ---------------------------------------------------- Adjusted EBITDA (loss) (1) $ 738 $ 616 $ (288) $ (3,917) $ (2,851) Business reorganization - 140 421 234 795 expenses (recovery) Non-operating expense 705 227 1,583 (2,692) (177) (income), including corporate administration charges ---------------------------------------------------- EBITDA (loss) (1) $ 33 $ 249 $ (2,292) $ (1,459) $ (3,469) Depreciation and 1,467 amortization expenses Interest expense (income), 192 net Provision for (benefit (558) from) income taxes ---------- Income (loss) from (4,570) continuing operations Income (loss) from (2,452) discontinued operations, net of income taxes ---------- Net income (loss) $ (7,022) ========== For The Three Months Ended Hudson Hudson Hudson Corporate Total March 31, 2014 Americas Asia Europe Pacific ---------------------------------------------------- Revenue, from external $ 12,244 $ 56,430 $ 75,493 $ - $ 144,167 customers ---------------------------------------------------- Gross margin, from external $ 4,502 $ 20,911 $ 28,616 $ - $ 54,029 customers ---------------------------------------------------- Adjusted EBITDA (loss) (1) $ 4 $ 110 $ 1,884 $ (3,888) $ (1,890) Business reorganization 91 - 23 - 114 expenses (recovery) Non-operating expense 370 414 1,173 (1,761) 196 (income), including corporate administration charges ---------------------------------------------------- EBITDA (loss) (1) $ (457) $ (304) $ 688 $ (2,127) $ (2,200) Depreciation and 1,371 amortization expenses Interest expense (income), 139 net Provision for (benefit 402 from) income taxes ---------- Income (loss) from (4,112) continuing operations Income (loss) from (432) discontinued operations, net of income taxes ---------- Net income (loss) $ (4,544) ========== 1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization ('EBITDA') and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses ('Adjusted EBITDA') are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. HUDSON GLOBAL, INC. SEGMENT ANALYSIS - YEAR TO DATE (in thousands) (unaudited) For The Year Ended Hudson Hudson Hudson Corporate Total December 31, 2014 Americas Asia Europe Pacific ------------------------------------------------------- Revenue, from external $ 50,146 $ 246,873 $ 284,173 $ - $ 581,192 customers ------------------------------------------------------- Gross margin, from $ 20,757 $ 93,014 $ 109,074 $ - $ 222,845 external customers ------------------------------------------------------- Adjusted EBITDA (loss) $ 1,446 $ 1,908 $ 6,114 $ (16,946) $ (7,478) (1) Business reorganization 94 1,322 1,407 966 3,789 expenses (recovery) Impairment of long-lived - 314 348 - 662 assets Non-operating expense 1,235 1,162 5,546 (8,147) (204) (income), including corporate administration charges ------------------------------------------------------- EBITDA (loss) (1) $ 117 $ (890) $ (1,187) $ (9,765) $ (11,725) Depreciation and 5,559 amortization expenses Interest expense 661 (income), net Provision for (benefit (2,159) from) income taxes ----------- Income (loss) from (15,786) continuing operations Income (loss) from 2,592 discontinued operations, net of income taxes ----------- Net income (loss) $ (13,194) =========== For The Year Ended Hudson Hudson Hudson Corporate Total December 31, 2013 Americas Asia Europe Pacific ------------------------------------------------------- Revenue, from external $ 51,857 $ 232,748 $ 277,967 $ - $ 562,572 customers ------------------------------------------------------- Gross margin, from $ 18,692 $ 87,162 $ 103,575 $ - $ 209,429 external customers ------------------------------------------------------- Adjusted EBITDA (loss) $ 2,315 $ (1,446) $ 634 $ (15,952) $ (14,449) (1) Business reorganization 448 989 3,214 789 5,440 expenses (recovery) Impairment of long-lived - 257 1,079 - 1,336 assets Office integration 6 - - - 6 expense and (gains) on disposal of business Non-operating expense 2,578 535 5,538 (9,411) (760) (income), including corporate administration charges ------------------------------------------------------- EBITDA (loss) (1) $ (717) $ (3,227) $ (9,197) $ (7,330) $ (20,471) Depreciation and 5,922 amortization expenses Interest expense 554 (income), net Provision for (benefit 3,264 from) income taxes ----------- Income (loss) from (30,211) continuing operations Income (loss) from (184) discontinued operations, net of income taxes ----------- Net income (loss) $ (30,395) =========== 1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization ('EBITDA') and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses ('Adjusted EBITDA') are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. HUDSON GLOBAL, INC. RECONCILIATION FOR CONSTANT CURRENCY (in thousands) (unaudited) The company operates on a global basis, with the majority of its gross margin generated outside of the United States. Accordingly, fluctuations in foreign currency exchange rates can affect its results of operations. Constant currency information compares financial results between periods as if exchange rates had remained constant period-over-period. The company currently defines the term 'constant currency' to mean that financial data for a previously reported period are translated into U.S. dollars using the same foreign currency exchange rates that were used to translate financial data for the current period. Changes in revenue, gross margin, selling, general and administrative expenses ('SG&A'), business reorganization expenses and other non-operating income (expense), operating income (loss) and EBITDA (loss) include the effect of changes in foreign currency exchange rates. Variance analysis usually describes period-to-period variances that are calculated using constant currency as a percentage. The company's management reviews and analyzes business results in constant currency and believes these results better represent the company's underlying business trends. The company believes that these calculations are a useful measure, indicating the actual change in operations. There are no significant gains or losses on foreign currency transactions between subsidiaries. Therefore, changes in foreign currency exchange rates generally impact only reported earnings. For The Three Months Ended December 31, 2014 2013 --------------------------------------------- As As Currency Constant reported reported translation currency --------------------------------------------- Revenue: Hudson Americas $ 11,709 $ 12,348 $ (17) $ 12,331 Hudson Asia Pacific 58,351 55,404 (3,701) 51,703 Hudson Europe 66,617 72,247 (3,276) 68,971 --------------------------------------------- Total $ 136,677 $ 139,999 $ (6,994) $ 133,005 ============================================= Gross margin: Hudson Americas $ 5,293 $ 4,894 $ (16) $ 4,878 Hudson Asia Pacific 22,930 20,044 (1,131) 18,913 Hudson Europe 25,033 27,900 (1,647) 26,253 --------------------------------------------- Total $ 53,256 $ 52,838 $ (2,794) $ 50,044 ============================================= SG&A (1): Hudson Americas $ 5,430 $ 3,658 $ (15) $ 3,643 Hudson Asia Pacific 22,728 21,318 (1,144) 20,174 Hudson Europe 23,211 26,947 (1,551) 25,396 Corporate 4,280 2,922 1 2,923 --------------------------------------------- Total $ 55,649 $ 54,845 $ (2,709) $ 52,136 ============================================= Business reorganization expenses: Hudson Americas $ - $ 88 $ - $ 88 Hudson Asia Pacific 67 887 (63) 824 Hudson Europe 963 635 (53) 582 Corporate 733 27 1 28 --------------------------------------------- Total $ 1,763 $ 1,637 $ (115) $ 1,522 ============================================= Operating income (loss): Hudson Americas $ (261) $ 1,027 $ - $ 1,027 Hudson Asia Pacific (1,017) (3,192) 136 (3,056) Hudson Europe 288 (1,164) 37 (1,127) Corporate (5,144) (3,112) - (3,112) --------------------------------------------- Total $ (6,134) $ (6,441) $ 173 $ (6,268) ============================================= EBITDA (loss): Hudson Americas $ 441 $ 432 $ 9 $ 441 Hudson Asia Pacific (257) (2,458) 69 (2,389) Hudson Europe (695) (2,231) 155 (2,076) Corporate (3,779) (437) (4) (441) --------------------------------------------- Total $ (4,290) $ (4,694) $ 229 $ (4,465) ============================================= Note: Certain prior year amounts have been reclassified to conform to the current period presentation. 1. SG&A and other non-operating income (expense) is a measure that management uses to evaluate the segments' expenses. HUDSON GLOBAL, INC. RECONCILIATION FOR CONSTANT CURRENCY (continued) (in thousands) (unaudited) For The Year Ended December 31, 2014 2013 ------------------------------------------------ As As Currency Constant reported reported translation currency ------------------------------------------------ Revenue: Hudson Americas $ 50,146 $ 51,857 $ (67) $ 51,790 Hudson Asia Pacific 246,873 232,748 (10,321) 222,427 Hudson Europe 284,173 277,967 9,109 287,076 ------------------------------------------------ Total $ 581,192 $ 562,572 $ (1,279) $ 561,293 ================================================ Gross margin: Hudson Americas $ 20,757 $ 18,692 $ (63) $ 18,629 Hudson Asia Pacific 93,014 87,162 (3,352) 83,810 Hudson Europe 109,074 103,575 2,144 105,719 ------------------------------------------------ Total $ 222,845 $ 209,429 $ (1,271) $ 208,158 ================================================ SG&A (1): Hudson Americas $ 19,343 $ 16,374 $ (58) $ 16,316 Hudson Asia Pacific 90,962 88,537 (3,462) 85,075 Hudson Europe 103,068 103,027 2,045 105,072 Corporate 16,948 15,939 2 15,941 ------------------------------------------------ Total $ 230,321 $ 223,877 $ (1,473) $ 222,404 ================================================ Business reorganization expenses: Hudson Americas $ 94 $ 448 $ - $ 448 Hudson Asia Pacific 1,322 989 (72) 917 Hudson Europe 1,407 3,214 92 3,306 Corporate 966 789 (1) 788 ------------------------------------------------ Total $ 3,789 $ 5,440 $ 19 $ 5,459 ================================================ Operating income (loss): Hudson Americas $ 870 $ 1,367 $ (5) $ 1,362 Hudson Asia Pacific (3,013) (5,883) 353 (5,530) Hudson Europe 3,112 (5,251) 18 (5,233) Corporate (18,455) (17,385) (2) (17,387) ------------------------------------------------ Total $ (17,486) $ (27,152) $ 364 $ (26,788) ================================================ EBITDA (loss): Hudson Americas $ 117 $ (717) $ 15 $ (702) Hudson Asia Pacific (890) (3,227) 171 (3,056) Hudson Europe (1,187) (9,197) (55) (9,252) Corporate (9,765) (7,330) (5) (7,335) ------------------------------------------------ Total $ (11,725) $ (20,471) $ 126 $ (20,345) ================================================ Note: Certain prior year amounts have been reclassified to conform to the current period presentation. 1. SG&A and other non-operating income (expense) is a measure that management uses to evaluate the segments' expenses. CONTACT: David F. Kirby Hudson 212-351-7216 david.kirby@hudson.com News Source: NASDAQ OMX --------------------------------------------------------------------- 2015-02-26 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Hudson Global, Inc. United States ISIN: US4437921061 End of News DGAP News-Service --------------------------------------------------------------------- 327289 2015-02-26
Latest News
Latest Reports
No Reports found
Upcoming Events
No Events found
Webcasts
No Webcasts found