OLD GREENWICH, Conn., May 06, 2020 (GLOBE NEWSWIRE) — Hudson Global, Inc. (Nasdaq: HSON), a leading global total talent solutions company, announced today financial results for the first quarter ended March 31, 2020.
2020 First Quarter SummaryRevenue of $24.1 million increased 49.1% from the first quarter of 2019 and 55.2% in constant currency.Adjusted net revenue of $9.8 million increased 4.3% from the first quarter of 2019 and 7.8% in constant currency.Net loss improved to $0.5 million, or $0.17 per basic and diluted share, from a net loss of $1.9 million, or $0.58 per basic and diluted share, for the first quarter of 2019. Adjusted net loss per diluted share (Non-GAAP measure)* of $(0.08) improved from $(0.50) in the first quarter of 2019.Adjusted EBITDA (Non-GAAP measure)* loss improved to $0.1 million from an adjusted EBITDA loss of $1.5 million in the first quarter of 2019.Share count reduced by 16% since December 31, 2018.Total cash including restricted cash was $26.5 million at March 31, 2020.“In the first quarter, we reported solid year on year growth despite starting to experience the economic impact of the COVID-19 pandemic in March,” said Jeff Eberwein, Chief Executive Officer of Hudson Global. “We grew adjusted net revenue in constant currency, as well as adjusted EBITDA, in all three regions.”Mr. Eberwein continued, “Our top priority during these unprecedented times continues to be the health and safety of our talented team and prestigious clients. As our clients and employees around the globe have transitioned to new ways of working, we are pleased with the resilience of our team and business.”* The Company provides Non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA, EBITDA, and Adjusted net loss per diluted share are defined in the segment tables at the end of this release and a reconciliation of such Non-GAAP measures to the most directly comparable GAAP measures is included within such segment tables.Regional HighlightsAsia PacificAsia Pacific revenue of $17.0 million increased 109% while adjusted net revenue of $4.5 million increased 5% in constant currency in the first quarter of 2020 compared to the same period in 2019. Revenue growth was driven by a significant contract in Australia signed in the second quarter of 2019 to manage a portion of the contingent workforce for a large Asia-based technology company. EBITDA was $0.3 million in the first quarter compared to breakeven EBITDA in the same period one year ago, and adjusted EBITDA was $0.6 million compared to adjusted EBITDA of $0.2 million in the first quarter of 2019.AmericasIn the first quarter of 2020, Americas revenue of $3.2 million increased 2%, while adjusted net revenue of $2.9 million increased 4% in constant currency from the first quarter of 2019. EBITDA loss was $0.1 million in the first quarter compared to EBITDA loss of $0.4 million in same period of last year. The region delivered adjusted EBITDA of $0.1 million compared to adjusted EBITDA loss of $0.3 million a year ago.EuropeEurope revenue in the first quarter of 2020 declined 7% to $4.0 million while adjusted net revenue of $2.4 million increased 21% in constant currency from the first quarter of 2019. The UK and Continental Europe both contributed to adjusted net revenue growth, increasing by $0.2 million each. EBITDA was $0.1 million in the first quarter of 2020 compared to EBITDA loss of $0.3 million in the same period of 2019. Adjusted EBITDA was $0.1 million for the first quarter of 2020 compared to adjusted EBITDA loss of $0.2 million a year ago.Corporate CostsIn the first quarter of 2020, the Company’s corporate costs were $0.8 million compared to $1.2 million in the prior year quarter, mainly due to lower compensation costs. Corporate costs in each first quarter period excluded non-recurring expenses of $0.3 million.Liquidity and Capital ResourcesThe Company ended the first quarter of 2020 with $26.5 million in cash, including $0.4 million in restricted cash. The Company used $2.7 million in cash flow from operations during the first quarter of 2020 compared to using $6.2 million of cash flow from operations in the first quarter of 2019.Share Repurchase ProgramUnder its $10 million common stock share repurchase program initiated in the third quarter of 2015, the Company has acquired 432,563 shares for a total of $8.3 million through the end of the first quarter of 2020.In addition, the Company completed a tender offer in March 2019 for 246,863 shares of the its common stock for an aggregate cost of $3.7 million, excluding fees and expenses relating to the tender offer. The 246,863 shares purchased as part of this tender offer were in addition to the 432,563 shares purchased under the above-referenced common stock repurchase plan.On March 27, 2020, the Company completed transactions with certain shareholders to repurchase 259,331 shares of the Company’s common stock for an aggregate cost of approximately $2.2 million, representing approximately 8.8% of the Company’s shares outstanding as of February 29, 2020. The 259,331 shares purchased as part of these transactions were in addition to the 432,563 shares purchased under the above-referenced common stock repurchase plan and the 246,863 shares purchased in the above-referenced tender offer.COVID-19 UpdateAs disclosed in the Company’s press releases issued on March 13, 2020 and March 30, 2020, as well as in our 2019 Form 10-K, our business has begun to be adversely impacted by the recent COVID-19 outbreak and the accompanying economic downturn. This downturn, as well as the uncertainty regarding the duration, spread, and intensity of the outbreak, has led to an initial reduction in demand for our services. Some of our customers have instituted hiring freezes, while other customers that are more capable of working remotely have been allowed to operate as usual. The expected timeline for this reduction in demand for our services remains uncertain and difficult to predict considering the rapidly evolving landscape.The Company is vigilantly monitoring the situation surrounding COVID-19 and will continue to proactively address this situation as it evolves. Due to the flexibility of its workforce and the actions it is taking, the Company is confident it can continue to efficiently manage its business and mitigate risks in this challenging environment, while retaining the ability to meet clients’ needs when activity improves.Conference Call/WebcastHudson 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 hudsonrpo.com.If you wish to join the conference call, please use the dial-in information below:Toll-Fee Dial-In Number: (866) 220-5784International Dial-In Number: (615) 622-8063Conference ID #: 4471797The archived call will be available on the investor information section of the Company’s web site at hudsonrpo.com.About Hudson GlobalHudson Global, Inc. is a leading global total talent solutions provider operating under the brand name Hudson RPO. We deliver innovative, customized recruitment outsourcing and total talent solutions to organizations worldwide. Through our consultative approach, we develop tailored talent solutions designed to meet our clients’ strategic growth initiatives. As a trusted advisor, we meet our commitments, deliver quality and value, and always aim to exceed expectations.For more information, please visit us at hudsonrpo.com or contact us at ir@hudsonrpo.com.Investor Relations:
The Equity Group
Lena Cati
212 836-9611 / lcati@equityny.comForward-Looking StatementsThis press release contains statements that the company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the company’s future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “predict,” “believe” and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to, global economic fluctuations; the adverse impacts of the recent coronavirus, or COVID-19 outbreak; the Company’s ability to successfully achieve its strategic initiatives; risks related to the Company’s large cash balance relative to its market capitalization as a small public company; risks related to potential acquisitions or dispositions of businesses by the Company; the Company’s ability to retain and recruit qualified management and/or advisors; the Company’s ability to operate successfully as a company focused on its RPO business; risks related to fluctuations in the Company’s operating results from quarter to quarter; the ability of clients to terminate their relationship with the Company at any time; competition in the Company’s markets; the negative cash flows and operating losses that may recur in the future; risks relating to how future credit facilities may affect or restrict our operating flexibility; risks associated with the Company’s investment strategy; risks related to international operations, including foreign currency fluctuations, political events, natural disasters or health crises, including the ongoing COVID-19 outbreak; the Company’s dependence on key management personnel; the Company’s ability to attract and retain highly skilled professionals; the Company’s ability to collect accounts receivable; the Company’s ability to maintain costs at an acceptable level; the Company’s heavy reliance on information systems and the impact of potentially losing or failing to develop technology; risks related to providing uninterrupted service to clients; the Company’s exposure to employment-related claims from clients, employers and regulatory authorities, current and former employees in connection with the Company’s business reorganization initiatives, and limits on related insurance coverage; the Company’s ability to utilize net operating loss carry-forwards; volatility of the Company’s stock price; the impact of government regulations; and restrictions imposed by blocking arrangements. Additional information concerning these, and other factors is contained in the Company’s filings with the 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
(a) Earnings per share and weighted average shares outstanding for all periods presented reflect the Company’s 1-for-10 reverse stock split, which was effective June 10, 2019.
The Company operates on a global basis, with the majority of its revenue 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, adjusted net revenue, selling, general and administrative expenses (“SG&A”), 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.
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