Hudson Global Reports 2015 Second Quarter Results
(Thomson Reuters ONE) -
Announces $10 Million Share Repurchase Program
NEW YORK, July 30, 2015 (GLOBE NEWSWIRE) -- Hudson Global, Inc. (Nasdaq:HSON), a
leading global talent solutions company, today announced financial results for
the second quarter ended June 30, 2015.
2015 Second Quarter Summary
* Revenue of $122.7 million, a decrease of 18.8 percent from the second
quarter of 2014, and a decrease of 6.9 percent in constant currency.
* On a retained** basis, excluding Americas IT and the Netherlands which were
sold during the quarter, revenue of $113.4 million declined 12.0 percent in
reported currency but increased 1.1 percent in constant currency from the
prior year period.
* Gross margin of $50.2 million or 40.9 percent of revenue, a decrease of
16.1 percent from the same period in 2014, or 4.2 percent in constant
currency.
* On a retained** basis, excluding Americas IT and the Netherlands which were
sold during the quarter, gross margin of $ 48.0 million declined 11.7
percent in reported currency but increased 1.0 percent in constant currency
from the prior year period.
* Adjusted EBITDA* loss of $0.8 million, compared with adjusted EBITDA loss of
$0.3 million in the second quarter of 2014.
* EBITDA* of $14.6 million, including a $20.0 million gain on sale of assets,
compared with EBITDA loss of $1.8 million in the second quarter of 2014.
* Net income of $13.9 million, or $0.41 per basic and diluted share, compared
with net loss of $4.4 million, or $0.13 per basic and diluted share, for the
second quarter of 2014.
* Adjusted EBITDA and EBITDA are defined in the segment tables at the end of
this release.
** See reconciliation for retained revenue and gross margin tables at the end of
this release.
"We completed the divestitures of our Americas IT staffing business
and Netherlands business in the second quarter, as we continued to implement our
strategy to narrow our focus on core businesses," said Stephen Nolan, chief
executive officer at Hudson. "We delivered constant currency gross margin growth
in key markets and practices, including Asia Pacific and RPO. We remain focused
on returning to profitability by reducing costs while selectively investing in
key markets and practices."
Strategic Actions
During the second quarter, the company continued to execute on strategic actions
in its previously announced efforts to focus on its core business lines and
growth opportunities. These completed actions included:
* Completed the divestiture of the company's Netherlands operations to
InterBalance Group B.V. for ?8.1 million in cash, effective on April
30, 2015.
* Completed the divestiture of the company's Americas IT staffing business to
Mastech, Inc. for $17.0 million in cash as well as retained working capital,
effective June 15, 2015.
* Substantially completed the exit of the company's non-profitable operations
in countries in Central and Eastern Europe (Ukraine, Czech Republic and
Slovakia). The company also approved the exit of operations in Luxembourg,
which is expected to cease operations during the course of 2015. For the
full year 2014, operations in these countries generated a total of $2.9
million, $2.3 million and $0.5 million in Revenue, Gross Margin and EBITDA
loss respectively.
With these strategic divestitures complete, the company is now a more
streamlined organization that is focused on delivering sustainable profitability
in its core businesses, RPO, Talent Management and Recruitment, where we
continue to invest in fee earners to drive growth.
During the second quarter, the company incurred $2 million in restructuring
charges for headcount and real estate actions in corporate and Europe. These
actions will allow the company to continue to lower its corporate support cost
structure. The company will take further actions in the second half of 2015 to
reduce stranded support costs, particularly in the Americas following the sale
of non-core businesses.
Share Repurchase Program
The company ended the quarter with $34.8 million in cash, including divestiture
proceeds, and considering the company's current stock price, the board of
directors has authorized a share repurchase program, initially for up to $10
million of the company's common stock. The company will commence purchases
promptly during the third quarter.
Regional Highlights
Americas
In the second quarter, Hudson Americas' gross margin decreased 5 percent in
constant currency on a reported basis and increased 18 percent on a retained**
basis as compared with the second quarter in 2014. This was driven by growth in
RPO, from continued demand from new and existing clients. Adjusted EBITDA was a
loss of $0.3 million, compared with adjusted EBITDA of $0.8 million for the same
period a year ago.
Asia Pacific
Hudson Asia Pacific's gross margin increased 11 percent in constant currency in
the second quarter of 2015 from the same period in 2014. This was the sixth
consecutive quarter of year-over-year constant currency gross margin growth.
Results were fueled by permanent recruitment, up 22 percent, and temporary
contracting, up 11 percent, against the second quarter of 2014. This growth in
recruitment was realized in both of the company's major Asia Pacific markets,
China and Australia, with gross margin increasing 51 percent and 9 percent,
respectively, against the prior year period. Asia Pacific delivered adjusted
EBITDA of $1.9 million, or 3.4 percent of revenue, improving from adjusted
EBITDA of $1.0 million in the second quarter of 2014.
Europe
During the second quarter of 2015, Hudson Europe's gross margin decreased 17
percent in constant currency from the second quarter of 2014 on a reported
basis, and 11 percent on a retained** basis. Excluding the impact of the
Netherlands sale, Continental Europe gross margin declined 1 percent in constant
currency in the quarter. Belgium and Spain continued to deliver gross margin
growth, up 2 percent and 40 percent respectively. In the UK, 18 percent growth
in RPO was offset by 24 percent declines in recruitment, which was particularly
strong a year ago. Adjusted EBITDA of $1.0 million, or 1.8 percent of revenue,
was down from $2.7 million, or 3.7 percent of revenue, in the second quarter of
2014.
Liquidity and Capital Resources
The company ended the second quarter of 2015 with $57.1 million in liquidity,
composed of $34.8 million in cash and $22.3 million in availability under its
credit facilities. This compares with $13.9 million in cash and $26.0 million
in availability under its credit facilities at the end of the first quarter of
2015. The change in cash was driven primarily by gains from the second quarter
sales of the Americas IT business and the Netherlands business, generating $25.9
million in cash during the quarter. The company used $4.6 million in cash flow
from operations during the second quarter, unchanged from the second quarter of
2014. The company had $1.3 million in outstanding borrowings at the end of the
second quarter of 2015.
Business Outlook
Given current economic conditions, the company expects third quarter 2015
revenue of between $105 million and $115 million and an adjusted EBITDA loss of
between breakeven and $2 million at prevailing exchange rates. This outlook
assumes an average exchange rate of 1.56 US Dollars to the British Pound, 1.11
US Dollars to the Euro and 0.73 US Dollars to the Australian Dollar. In the
third quarter of 2014, revenue was $149.3 million and adjusted EBITDA was a loss
of $2.9 million. Third quarter 2014 revenue would have been $38 million lower
including the impact of prevailing exchange rates cited above and excluding
revenue attributable to businesses divested in the second quarter of 2015. The
company expects to deliver positive adjusted EBITDA in the second half of
2015.
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 atHudson.com.
The archived call will be available on the investor information section of the
company's web site atHudson.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 around the globe 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 atHudson.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 execute 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 its 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; 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 June Six Months Ended June 30,
30,
--------------------------- --------------------------
2015 2014 2015 2014
------------- ------------- ------------- ------------
Revenue $ 122,743 $ 151,070 $ 247,060 $ 295,237
Direct costs 72,521 91,199 148,934 181,337
------------- ------------- ------------- ------------
Gross margin 50,222 59,871 98,126 113,900
Operating expenses:
Selling, general and
administrative
expenses 53,550 60,215 105,716 116,133
Depreciation and
amortization 974 1,404 2,085 2,774
Business
reorganization
expenses and
impairment of long-
lived assets 2,060 1,117 3,403 1,231
------------- ------------- ------------- ------------
Total operating
expenses 56,584 62,736 111,204 120,138
Gain on sale and exit
of businesses 20,005 - 20,005 -
------------- ------------- ------------- ------------
Operating income
(loss) 13,643 (2,865 ) 6,927 (6,238 )
Non-operating income
(expense):
Interest income
(expense), net (369 ) (202 ) (449 ) (342 )
Other income
(expense), net (40 ) (305 ) (27 ) (502 )
------------- ------------- ------------- ------------
Income (loss) from
continuing operation
before provision for
income taxes 13,234 (3,372 ) 6,451 (7,082 )
Provision for (benefit
from) income taxes
from continuing
operations 460 193 331 595
------------- ------------- ------------- ------------
Income (loss) from
continuing operations 12,774 (3,565 ) 6,120 (7,677 )
Income (loss) from
discontinued
operations, net of
income taxes 1,103 (809 ) 919 (1,241 )
------------- ------------- ------------- ------------
Net income (loss) $ 13,877 $ (4,374 ) $ 7,039 $ (8,918 )
------------- ------------- ------------- ------------
Basic and diluted
earnings (loss) per
share:
Basic and diluted
earnings (loss) per
share from continuing
operations $ 0.38 $ (0.11 ) $ 0.18 $ (0.23 )
Basic and diluted
earnings (loss) per
share from
discontinued
operations 0.03 (0.02 ) 0.03 (0.04 )
------------- ------------- ------------- ------------
Basic and diluted
earnings (loss) per
share $ 0.41 $ (0.13 ) $ 0.21 $ (0.27 )
------------- ------------- ------------- ------------
Weighted-average
shares outstanding:
Basic 33,525 32,752 33,296 32,697
Diluted 33,525 32,752 33,296 32,697
HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December
June 30, 31,
2015 2014
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 34,841 $ 33,989
Accounts receivable, less allowance for doubtful
accounts of $1,008 and $986 respectively 75,511 74,079
Prepaid and other 8,340 9,604
Current assets of discontinued operations 139 1,249
------------- ------------
Total current assets 118,831 118,921
Property and equipment, net 8,228 9,840
Deferred tax assets, non-current 5,711 5,648
Other assets 4,480 5,263
------------- ------------
Total assets $ 137,250 $ 139,672
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,407 $ 6,371
Accrued expenses and other current liabilities 45,078 54,065
Short-term borrowings 1,340 -
Accrued business reorganization expenses 3,810 3,169
Current liabilities of discontinued operations 2,382 3,512
------------- ------------
Total current liabilities 57,017 67,117
Deferred rent and tenant improvement contributions 4,970 5,899
Income tax payable, non-current 2,331 2,397
Other non-current liabilities 4,317 5,002
------------- ------------
Total liabilities 68,635 80,415
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 34,754 and 33,671 shares,
respectively 34 34
Additional paid-in capital 480,343 476,689
Accumulated deficit (423,577 ) (430,616 )
Accumulated other comprehensive income 12,023 13,613
Treasury stock, 83 and 129 shares, respectively,
at cost (208 ) (463 )
------------- ------------
Total stockholders' equity 68,615 59,257
------------- ------------
Total liabilities and stockholders' equity $ 137,250 $ 139,672
------------- ------------
HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - QUARTER TO DATE
(in thousands)
(unaudited)
For The Three Hudson
Months Ended June Hudson Asia Hudson
30, 2015 Americas Pacific Europe Corporate Total
------------ ------------ ------------ ------------ ------------
Revenue, from
external customers $ 10,183 $ 57,374 $ 55,186 $ - $ 122,743
------------ ------------ ------------ ------------ ------------
Gross margin, from
external customers $ 5,081 $ 23,820 $ 21,321 $ - $ 50,222
------------ ------------ ------------ ------------ ------------
Adjusted EBITDA
(loss) (1) $ (290 ) $ 1,935 $ 986 $ (3,418 ) $ (787 )
Business
reorganization
expenses (recovery)
and impairment of
long-lived assets (5 ) 325 520 1,220 2,060
Change in control
stock-based
compensation
expense 418 647 699 777 2,541
Gain (loss) on sale
and exit of
businesses 15,939 - 4,066 - 20,005
Non-operating
expense
(income), including
corporate
administration
charges (207 ) 1,593 386 (1,732 ) 40
------------ ------------ ------------ ------------ ------------
EBITDA (loss) (1) $ 15,443 $ (630 ) $ 3,447 $ (3,683 ) $ 14,577
Depreciation and
amortization
expenses 974
Interest expense
(income), net 369
Provision for
(benefit from)
income taxes 460
------------
Income (loss) from
continuing
operations 12,774
Income (loss) from discontinued operations, net of income
taxes 1,103
------------
Net income (loss) $ 13,877
------------
For The Three Hudson
Months Ended June Hudson Asia Hudson
30, 2014 Americas Pacific Europe Corporate Total
------------ ------------ ------------ ------------ ------------
Revenue, from
external customers $ 13,158 $ 65,101 $ 72,811 $ - $ 151,070
------------ ------------ ------------ ------------ ------------
Gross margin, from
external customers $ 5,393 $ 24,519 $ 29,959 $ - $ 59,871
------------ ------------ ------------ ------------ ------------
Adjusted EBITDA
(loss) (1) $ 843 $ 996 $ 2,678 $ (4,860 ) $ (343 )
Business
reorganization
expenses (recovery) 3 1,114 - - 1,117
Non-operating
expense
(income), including
corporate
administration
charges 741 462 1,566 (2,464 ) 305
------------ ------------ ------------ ------------ ------------
EBITDA (loss) (1) $ 99 $ (580 ) $ 1,112 $ (2,396 ) $ (1,765 )
Depreciation and
amortization
expenses 1,404
Interest expense
(income), net 202
Provision for
(benefit from)
income taxes 193
------------
Income (loss) from
continuing
operations $ (3,564 )
Income (loss) from discontinued operations, net of income
taxes (809 )
------------
Net income (loss) $ (4,373 )
------------
(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 Hudson
Months Ended March Hudson Asia Hudson
31, 2015 Americas Pacific Europe Corporate Total
------------ ------------ ------------ ------------ ------------
Revenue, from
external customers $ 10,978 $ 53,139 $ 60,200 $ - $ 124,317
------------ ------------ ------------ ------------ ------------
Gross margin, from
external customers $ 4,621 $ 20,876 $ 22,407 $ - $ 47,904
------------ ------------ ------------ ------------ ------------
Adjusted EBITDA
(loss) (1) $ (906 ) $ 891 $ (23 ) $ (4,224 ) $ (4,262 )
Business
reorganization
expenses (recovery) 421 8 880 34 1,343
Non-operating
expense
(income), including
corporate
administration
charges 292 80 1,246 (1,631 ) (13 )
------------ ------------ ------------ ------------ ------------
EBITDA (loss) (1) $ (1,619 ) $ 803 $ (2,149 ) $ (2,627 ) $ (5,592 )
Depreciation and
amortization
expenses 1,111
Interest expense
(income), net 80
Provision for
(benefit from)
income taxes (129 )
------------
Income (loss) from
continuing
operations (6,654 )
Income (loss) from discontinued operations, net of income
taxes (184 )
------------
Net income (loss) $ (6,838 )
------------
For The Three Hudson
Months Ended Hudson Asia Hudson
September 30, 2014 Americas Pacific Europe Corporate Total
------------ ------------ ------------ ------------ ------------
Revenue, from
external customers $ 13,036 $ 66,990 $ 69,252 $ - $ 149,278
------------ ------------ ------------ ------------ ------------
Gross margin, from
external customers $ 5,570 $ 24,654 $ 25,463 $ 55,687
------------ ------------ ------------ ------------ ------------
Adjusted EBITDA
(loss) (1) $ 738 $ 616 $ (288 ) $ (3,917 ) $ (2,851 )
Business
reorganization
expenses (recovery) - 140 421 233 794
Non-operating
expense
(income), including
corporate
administration
charges 705 226 1,583 (2,689 ) (175 )
------------ ------------ ------------ ------------ ------------
EBITDA (loss) (1) $ 33 $ 250 $ (2,292 ) $ (1,461 ) $ (3,470 )
Depreciation and
amortization
expenses 1,467
Interest expense
(income), net 192
Provision for
(benefit from)
income taxes (558 )
------------
Income (loss) from
continuing
operations (4,571 )
Income (loss) from discontinued operations, net of income
taxes (2,448 )
------------
Net income (loss) $ (7,019 )
------------
(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 (continued)
(in thousands)
(unaudited)
Hudson
For The Six Months Hudson Asia Hudson
Ended June 30, 2015 Americas Pacific Europe Corporate Total
------------ ------------- ------------- ------------ ------------
Revenue, from
external customers $ 21,161 $ 110,514 $ 115,385 $ - $ 247,060
------------ ------------- ------------- ------------ ------------
Gross margin, from
external customers $ 9,702 $ 44,697 $ 43,727 $ - $ 98,126
------------ ------------- ------------- ------------ ------------
Adjusted EBITDA
(loss) (1) $ (1,196 ) $ 2,827 $ 963 $ (7,644 ) $ (5,050 )
Business
reorganization
expenses (recovery)
and impairment of
long-lived assets 417 333 1,400 1,253 3,403
Change in control
stock-based
compensation
expense 418 647 699 777 2,541
Gain (loss) on sale
and exit of
businesses 15,939 - 4,066 - 20,005
Non-operating
expense
(income), including
corporate
administration
charges 85 1,672 1,632 (3,362 ) 27
------------ ------------- ------------- ------------ ------------
EBITDA (loss) (1) $ 13,823 $ 175 $ 1,298 $ (6,312 ) $ 8,984
Depreciation and
amortization
expenses 2,085
Interest expense
(income), net 449
Provision for
(benefit from)
income taxes 331
------------
Income (loss) from
continuing
operations 6,119
Income (loss) from discontinued operations, net of income
taxes 919
------------
Net income (loss) $ 7,038
------------
Hudson
For The Six Months Hudson Asia Hudson
Ended June 30, 2014 Americas Pacific Europe Corporate Total
------------ ------------- ------------- ------------ ------------
Revenue, from
external customers $ 25,401 $ 121,532 $ 148,304 $ - $ 295,237
------------ ------------- ------------- ------------ ------------
Gross margin, from
external customers $ 9,894 $ 45,430 $ 58,576 $ - $ 113,900
------------ ------------- ------------- ------------ ------------
Adjusted EBITDA
(loss) (1) $ 846 $ 1,107 $ 4,562 $ (8,748 ) $ (2,233 )
Business
reorganization
expenses (recovery) 93 1,115 23 - 1,231
Non-operating
expense
(income), including
corporate
administration
charges 1,125 876 2,727 (4,226 ) 502
------------ ------------- ------------- ------------ ------------
EBITDA (loss) (1) $ (372 ) $ (884 ) $ 1,812 $ (4,522 ) $ (3,966 )
Depreciation and
amortization
expenses 2,774
Interest expense
(income), net 342
Provision for
(benefit from)
income taxes 595
------------
Income (loss) from
continuing
operations (7,677 )
Income (loss) from discontinued operations, net of income
taxes (1,241 )
------------
Net income (loss) $ (8,918 )
------------
(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.
Three Months Ended June 30,
2015 2014
------------- ----------------------------------------
As As Currency Constant
reported reported translation currency
------------- ------------- ------------- ------------
Revenue:
Hudson Americas $ 10,183 $ 13,158 $ (22 ) $ 13,136
Hudson Asia Pacific 57,374 65,101 (9,688 ) 55,413
Hudson Europe 55,186 72,811 (9,479 ) 63,332
------------- ------------- ------------- ------------
Total $ 122,743 $ 151,070 $ (19,189 ) $ 131,881
------------- ------------- ------------- ------------
Gross margin:
Hudson Americas $ 5,081 $ 5,393 $ (21 ) $ 5,372
Hudson Asia Pacific 23,820 24,519 (3,071 ) 21,448
Hudson Europe 21,321 29,959 (4,369 ) 25,590
------------- ------------- ------------- ------------
Total $ 50,222 $ 59,871 $ (7,461 ) $ 52,410
------------- ------------- ------------- ------------
SG&A (1):
Hudson Americas $ 5,787 $ 4,584 $ (23 ) $ 4,561
Hudson Asia Pacific 22,323 23,523 (2,857 ) 20,666
Hudson Europe 21,244 27,247 (3,986 ) 23,261
Corporate 4,196 4,861 - 4,861
------------- ------------- ------------- ------------
Total $ 53,550 $ 60,215 $ (6,866 ) $ 53,349
------------- ------------- ------------- ------------
Business reorganization
expenses:
Hudson Americas $ (5 ) $ 3 $ - $ 3
Hudson Asia Pacific 325 1,114 (140 ) 974
Hudson Europe 520 - (1 ) (1 )
Corporate 1,220 - - -
------------- ------------- ------------- ------------
Total $ 2,060 $ 1,117 $ (141 ) $ 976
------------- ------------- ------------- ------------
Operating income (loss):
Hudson Americas $ 15,130 $ 736 $ 3 $ 739
Hudson Asia Pacific 391 (920 ) 38 (882 )
Hudson Europe 3,615 2,318 (339 ) 1,979
Corporate (5,493 ) (4,999 ) 1 (4,998 )
------------- ------------- ------------- ------------
Total $ 13,643 $ (2,865 ) $ (297 ) $ (3,162 )
------------- ------------- ------------- ------------
EBITDA (loss):
Hudson Americas $ 15,444 $ 101 $ 6 $ 107
Hudson Asia Pacific (630 ) (581 ) (61 ) (642 )
Hudson Europe 3,449 1,113 (153 ) 960
Corporate (3,686 ) (2,399 ) 1 (2,398 )
------------- ------------- ------------- ------------
Total $ 14,577 $ (1,766 ) $ (207 ) $ (1,973 )
------------- ------------- ------------- ------------
(1) SG&A is a measure that management uses to evaluate the segments' expenses.
HUDSON GLOBAL, INC.
RECONCILIATION FOR RETAINED REVENUE AND GROSS MARGIN
(in thousands) (unaudited)
Revenue, Q2 2015 vs Q2 2014
Divested
Reported (1) Retained (1)
--------------------------------- ----------- --------------------------------
Variance Variance
vs Q2 Constant vs Q2 Constant
Q2 2015 2014 Currency Q2 2015 Q2 2015 2014 Currency
--------------------------------- ----------- --------------------------------
Americas $ 10,183 -22.6 % -22.5 % $ 6,227 $ 3,956 9.1 % 9.8 %
Asia
Pacific 57,374 -11.9 % 3.5 % - 57,374 -11.9 % 3.5 %
Europe 55,186 -24.2 % -12.9 % 3,104 52,082 -13.5 % -2.1 %
--------------------------------- ----------- --------------------------------
Total $ 122,743 -18.8 % -6.9 % $ 9,331 $ 113,412 -12.0 % 1.1 %
--------------------------------- ----------- --------------------------------
Gross Margin, Q2 2015 vs Q2 2014
Divested
Reported (1) Retained (1)
--------------------------------- ----------- --------------------------------
Variance Variance
vs Q2 Constant vs Q2 Constant
Q2 2015 2014 Currency Q2 2015 Q2 2015 2014 Currency
--------------------------------- ----------- --------------------------------
Americas $ 5,081 -5.8 % -5.4 % $ 1,615 $ 3,466 16.9 % 17.7 %
Asia
Pacific 23,820 -2.9 % 11.1 % - 23,820 -2.8 % 11.1 %
Europe 21,321 -28.8 % -16.7 % 617 20,704 -23.0 % -10.6 %
--------------------------------- ----------- --------------------------------
Total $ 50,222 -16.1 % -4.2 % $ 2,232 $ 47,990 -11.7 % 1.0 %
--------------------------------- ----------- --------------------------------
(1) Retained revenue and gross margin and divested revenue and gross margin are
non-GAAP terms that management believes provide a better understanding of the
underlying revenue and gross margin trends in the business following the
divestitures in the second quarter of 2015. Divested revenue and gross margin
includes such items attributable to the following businesses: the Americas IT
staffing business, the Netherlands business, Ukraine, Czech Republic, Slovakia
and Luxembourg. The non-GAAP financial measures do not replace the presentation
of GAAP financial results and should only be used as a supplement to, not as a
substitute for, Hudson's financial results presented in accordance with GAAP.
The above table provides a reconciliation of the non-GAAP financial measure used
in its financial reporting to the most directly comparable GAAP financial
measure.
Contact:
David F. Kirby
Hudson
212-351-7216
david.kirby(at)hudson.com
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Hudson Global, Inc. via GlobeNewswire
[HUG#1942351]
Unternehmensinformation / Kurzprofil:
Datum: 30.07.2015 - 13:00 Uhr
Sprache: Deutsch
News-ID 410431
Anzahl Zeichen: 52438
contact information:
Town:
NEW YORK
Kategorie:
Business News
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"Hudson Global Reports 2015 Second Quarter Results"
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