Hudson Global, Inc. (Nasdaq: HSON), a leading global talent
solutions company, announced today financial results for the fourth
quarter and full year ended December 31, 2022.
2022 Fourth
Quarter Summary
- Revenue of $43.6 million decreased
12.9% from the fourth quarter of 2021, or 5.5% in constant
currency.
- Adjusted net revenue of $22.2
million decreased 0.7% from the fourth quarter of 2021, and
increased 4.8% in constant currency.
- Net income of $0.1 million, or
$0.02 per basic and diluted share, versus net income of $2.1
million, or $0.70 per basic and $0.67 per diluted share, in the
fourth quarter of 2021. Adjusted net income per diluted share
(Non-GAAP measure)* decreased to $0.33 from adjusted net income per
diluted share of $1.02 in the fourth quarter of 2021.
- Adjusted EBITDA (Non-GAAP measure)*
decreased to $2.4 million, versus adjusted EBITDA of $4.6 million
in the fourth quarter of 2021.
2022 Full-Year
Summary
- Revenue of $200.9 million increased
18.7% from 2021, or 27.1% in constant currency.
- Adjusted net revenue of $99.2
million increased 45.6% from 2021, or 52.9% in constant
currency.
- Net income of $7.1 million, or
$2.37 per basic and $2.27 per diluted share, compared to net income
of $3.2 million, or $1.11 per basic and $1.07 per diluted share, in
2021. Adjusted net income per diluted share (Non-GAAP measure)* of
$3.38 increased from adjusted net income per diluted share of $2.04
in the prior year.
- Adjusted EBITDA (Non-GAAP measure)*
was $16.4 million, versus adjusted EBITDA of $10.0 million in
2021.
Jeff Eberwein, Chief Executive Officer at Hudson
Global, said, “We grew adjusted net revenue 5% in the fourth
quarter (in constant currency) as strong top-line growth in the UK
and Australia was partially offset by the slowdown in the US
technology sector and by lower hiring volumes in China due to
COVID-19-related lockdowns. Although adjusted EBITDA declined
versus last year's fourth quarter, we were able to reduce SG&A
by more than $1 million versus Q3 2022 and can make further
adjustments to our cost structure, if needed. We continue to win
new business and have a very experienced team with a history of
navigating different market cycles. We believe we are well
positioned to respond quickly to the needs of our clients at
various activity levels.”
* The Company provides Non-GAAP measures as a
supplement to financial results based on accounting principles
generally accepted in the United States ("GAAP"). Constant
currency, adjusted EBITDA, EBITDA, and adjusted net income or 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 Highlights
Americas
In the fourth quarter of 2022, Americas revenue
of $10.1 million decreased 12% and adjusted net revenue of $9.6
million also decreased 12% in constant currency compared to the
fourth quarter of 2021. EBITDA loss was $0.6 million in the fourth
quarter of 2022 compared to EBITDA of $1.6 million in same period
last year. Adjusted EBITDA was $0.5 million for the fourth quarter
of 2022 compared to adjusted EBITDA of $2.7 million a year ago. The
decline in results versus the prior year quarter was driven largely
by the slowdown in the U.S. technology sector, which began in the
third quarter of 2022.
For full year 2022, Americas revenue of $51.6
million increased 80% and adjusted net revenue of $49.0 million
increased 81% in constant currency from 2021. EBITDA was $4.9
million for full year 2022 compared to EBITDA of $1.8 million in
2021. Adjusted EBITDA was $9.3 million for full year 2022 compared
to adjusted EBITDA of $4.7 million in 2021. The strong improvement
versus the prior year was driven primarily by the performance of
our U.S. technology sector business in the first half of 2022.
Asia Pacific
Asia Pacific revenue of $27.1 million decreased
7% and adjusted net revenue of $8.6 million increased 17% in
constant currency in the fourth quarter of 2022 compared to the
same period in 2021. EBITDA was $1.7 million in the fourth quarter
of 2022 compared to EBITDA of $1.9 million a year ago. Asia Pacific
delivered adjusted EBITDA of $2.1 million in the fourth quarter of
2022 versus adjusted EBITDA of $2.4 million in the fourth quarter
of 2021. The decline in results versus the prior year quarter was
driven by the COVID-19-related lockdowns in China.
For full year 2022, Asia Pacific revenue of
$118.1 million increased 8% and adjusted net revenue of $34.3
million increased 29% in constant currency compared to 2021. EBITDA
for full year 2022 was $7.3 million, compared to EBITDA of $5.5
million in 2021. Adjusted EBITDA for full year 2022 was $8.8
million versus $7.2 million in 2021.
Europe
Europe revenue of $6.4 million increased 14% and
adjusted net revenue of $4.0 million increased 33% in constant
currency in the fourth quarter of 2022 compared to the fourth
quarter of 2021. EBITDA was $0.5 million in the fourth quarter of
2022, compared to EBITDA of $0.4 million in the same period one
year ago. Adjusted EBITDA was $0.5 million in the fourth quarter of
2022 compared to $0.5 million a year ago.
For full year 2022, Europe revenue of $31.1
million increased 60% and adjusted net revenue of $15.9 million
increased 42% in constant currency compared to 2021. EBITDA was
$1.5 million for full year 2022 compared to $1.0 million in 2021.
Adjusted EBITDA was $2.0 million for full year 2022 compared to
adjusted EBITDA of $1.6 million in 2021.
Corporate Costs
The Company's corporate costs of $0.7 million
for the fourth quarter of 2022 excluded $0.2 million of
non-recurring expenses. This compares to corporate costs of $0.9
million in the fourth quarter of 2021, which excluded $0.3 million
of non-recurring expenses.
The Company's corporate costs of $3.7 million
for the year ended 2022 excluded $0.3 million of non-recurring
expenses. This compares to corporate costs of $3.4 million for the
year ended 2021, which excluded $0.6 million of non-recurring
expenses.
Liquidity and Capital Resources
The Company ended the fourth quarter of 2022
with $27.5 million in cash, including $0.4 million in restricted
cash. The Company generated $4.4 million in cash flow from
operations in the fourth quarter of 2022 compared to $1.7 million
in the fourth quarter of 2021. For the full year, the company
generated $9.5 million in cash flow from operations compared to
$2.5 million a year ago.
Share Repurchase Program
The Company has reduced its share count by 12%
since December 31, 2018 and continues to view share repurchases as
an attractive use of capital. Under its $10 million common stock
share repurchase program, the Company has $0.6 million
remaining.
NOL Carryforward
Hudson Global has $303 million of usable net
operating losses (“NOL”) in the U.S., which the Company considers
to be a very valuable asset for its stockholders. In order to
protect the value of the NOL for all stockholders, the Company has
a rights agreement and charter amendment in place that limit
beneficial ownership of Hudson Global common stock to 4.99%.
Stockholders who wish to own more than 4.99% of Hudson Global
common stock, or who already own more than 4.99% of Hudson Global
common stock and wish to buy more, may only acquire additional
shares with the Board’s prior written approval.
COVID-19 Update
The Company is vigilantly monitoring the
business environment surrounding COVID-19 and continues to
proactively address this situation as it evolves. The Company
believes it can continue to take appropriate actions to manage the
business in this challenging environment due to the flexibility of
its workforce and the strength of its balance sheet.
Conference Call/Webcast
The Company will conduct a conference call
today, March 30, 2023, 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-Free Dial-In Number: (866)
652-5200
- International Dial-In Number: (412)
317-6060
The archived call will be available on the
investor information section of the Company's web site at
hudsonrpo.com.
About Hudson Global
Hudson 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 strive to exceed expectations.
For more information, please visit us at
hudsonrpo.com or contact us at ir@hudsonrpo.com.
Investor Relations:The Equity GroupLena Cati212 836-9611 /
lcati@equityny.com
Forward-Looking Statements
This press release contains statements that the
Company believes to be "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
Section 21E of the Securities Exchange Act of 1934, as amended, and
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; rising inflationary
pressures and interest rates; the adverse impacts of the
coronavirus, or COVID-19 pandemic; the Company’s ability to
successfully achieve its strategic initiatives; risks related to
potential acquisitions or dispositions of businesses by the
Company; 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 loss of or
material reduction in our business with any of the Company’s
largest customers; 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 pandemic and the Russian invasion of Ukraine
conflict; the Company's dependence on key management personnel; the
Company's ability to attract and retain highly skilled
professionals, management, and advisors; 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
HUDSON GLOBAL, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Revenue |
$ |
43,591 |
|
$ |
50,062 |
|
|
$ |
200,917 |
(1) |
$ |
169,207 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Direct contracting costs and reimbursed expenses |
|
21,427 |
|
|
27,745 |
|
|
|
101,707 |
(1) |
|
101,050 |
|
Salaries and related |
|
17,994 |
|
|
16,037 |
|
|
|
74,373 |
|
|
53,038 |
|
Office and general |
|
2,481 |
|
|
2,583 |
|
|
|
10,344 |
|
|
8,108 |
|
Marketing and promotion |
|
729 |
|
|
720 |
|
|
|
3,778 |
|
|
2,020 |
|
Depreciation and amortization |
|
361 |
|
|
257 |
|
|
|
1,378 |
|
|
597 |
|
Total operating expenses |
|
42,992 |
|
|
47,342 |
|
|
|
191,580 |
|
|
164,813 |
|
Operating income |
|
599 |
|
|
2,720 |
|
|
|
9,337 |
|
|
4,394 |
|
Non-operating income
(expense): |
|
|
|
|
|
|
|
Interest income, net |
|
55 |
|
|
6 |
|
|
|
83 |
|
|
33 |
|
Other income (expense), net |
|
82 |
|
|
(26 |
) |
|
|
40 |
|
|
(83 |
) |
Income before income
taxes |
|
736 |
|
|
2,700 |
|
|
|
9,460 |
|
|
4,344 |
|
Provision for income
taxes |
|
674 |
|
|
642 |
|
|
|
2,331 |
|
|
1,117 |
|
Net income |
$ |
62 |
|
$ |
2,058 |
|
|
$ |
7,129 |
|
$ |
3,227 |
|
Earnings per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
$ |
0.70 |
|
|
$ |
2.37 |
|
$ |
1.11 |
|
Diluted |
$ |
0.02 |
|
$ |
0.67 |
|
|
$ |
2.27 |
|
$ |
1.07 |
|
Weighted-average
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
3,016 |
|
|
2,939 |
|
|
|
3,011 |
|
|
2,917 |
|
Diluted |
|
3,139 |
|
|
3,081 |
|
|
|
3,138 |
|
|
3,003 |
|
- Year-to-date
amounts shown for revenue and direct contracting costs and
reimbursed expenses do not equal the sum of previously published
quarters due to an adjustment to increase both accounts by $5,762
in the second quarter of 2022. No other accounts are impacted by
this change. Amended Form 10-Qs for the second and third quarters
of 2022 will be filed to reflect this adjustment in the coming
weeks. The Company has filed a current report on Form 8-K further
describing this matter, under Item 4.02, disclosing the
non-reliance on the unaudited consolidated financial statements
from the Company’s Form 10-Qs from the second and third quarters of
2022. The error had no impact on the Company’s consolidated balance
sheet, consolidated statement of cash flows, net income, the
presentation of non-GAAP metrics, EBITDA and adjusted EBITDA, or
any other accounts for such periods.
HUDSON GLOBAL, INC. |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except per share amounts) |
(unaudited) |
|
|
|
|
|
December 31,2022 |
|
December 31,2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
27,123 |
|
|
$ |
21,714 |
|
Accounts receivable, less allowance for doubtful accounts of $51
and $196, respectively |
|
26,270 |
|
|
|
25,748 |
|
Restricted cash, current |
|
160 |
|
|
|
222 |
|
Prepaid and other |
|
1,959 |
|
|
|
1,476 |
|
Total current assets |
|
55,512 |
|
|
|
49,160 |
|
Property and equipment, net of
accumulated depreciation of $950 and $807, respectively |
|
673 |
|
|
|
371 |
|
Operating lease right-of-use
assets |
|
685 |
|
|
|
477 |
|
Goodwill |
|
4,875 |
|
|
|
4,219 |
|
Intangible assets, net of
accumulated amortization of $1,647 and $532, respectively |
|
4,516 |
|
|
|
5,488 |
|
Deferred tax assets |
|
1,475 |
|
|
|
1,345 |
|
Restricted cash |
|
194 |
|
|
|
177 |
|
Other assets |
|
12 |
|
|
|
5 |
|
Total assets |
$ |
67,942 |
|
|
$ |
61,242 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
1,678 |
|
|
$ |
871 |
|
Accrued salaries, commissions, and benefits |
|
11,509 |
|
|
|
10,961 |
|
Accrued expenses and other current liabilities |
|
6,348 |
|
|
|
6,748 |
|
Note payable – short term |
|
1,250 |
|
|
|
750 |
|
Operating lease obligations, current |
|
337 |
|
|
|
363 |
|
Total current liabilities |
|
21,122 |
|
|
|
19,693 |
|
Income tax payable |
|
81 |
|
|
|
470 |
|
Operating lease
obligations |
|
348 |
|
|
|
118 |
|
Note payable
– long term |
|
— |
|
|
|
1,250 |
|
Other liabilities |
|
599 |
|
|
|
395 |
|
Total liabilities |
|
22,150 |
|
|
|
21,926 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.001 par value, 10,000 shares authorized; none
issued or outstanding |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value, 20,000 shares authorized; 3,823 and
3,694 shares issued; 2,794 and 2,707 shares outstanding,
respectively |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
491,567 |
|
|
|
489,249 |
|
Accumulated deficit |
|
(427,394 |
) |
|
|
(434,523 |
) |
Accumulated other comprehensive loss, net of applicable tax |
|
(1,639 |
) |
|
|
(85 |
) |
Treasury stock, 1,029 and 987 shares, respectively, at cost |
|
(16,746 |
) |
|
|
(15,329 |
) |
Total stockholders’ equity |
|
45,792 |
|
|
|
39,316 |
|
Total liabilities and stockholders' equity |
$ |
67,942 |
|
|
$ |
61,242 |
|
HUDSON GLOBAL, INC. |
SEGMENT ANALYSIS - QUARTER TO DATE |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For The Three Months
Ended December 31, 2022 |
|
Americas |
|
Asia Pacific |
|
Europe |
|
Corporate |
|
Total |
Revenue, from external customers |
|
$ |
10,058 |
|
|
$ |
27,107 |
|
$ |
6,426 |
|
|
$ |
— |
|
|
$ |
43,591 |
|
Adjusted net revenue, from
external customers (1) |
|
$ |
9,553 |
|
|
$ |
8,567 |
|
$ |
4,044 |
|
|
$ |
— |
|
|
$ |
22,164 |
|
Net income |
|
|
|
|
|
|
|
|
|
$ |
62 |
|
Provision for income
taxes |
|
|
|
|
|
|
|
|
|
|
674 |
|
Interest income, net |
|
|
|
|
|
|
|
|
|
|
(55 |
) |
Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
|
361 |
|
EBITDA (loss) (2) |
|
$ |
(638 |
) |
|
$ |
1,749 |
|
$ |
524 |
|
|
$ |
(593 |
) |
|
|
1,042 |
|
Non-operating expense
(income), including corporate administration charges |
|
|
236 |
|
|
|
232 |
|
|
(72 |
) |
|
|
(478 |
) |
|
|
(82 |
) |
Stock-based compensation
expense |
|
|
197 |
|
|
|
75 |
|
|
87 |
|
|
|
173 |
|
|
|
532 |
|
Non-recurring severance and
professional fees |
|
|
123 |
|
|
|
49 |
|
|
1 |
|
|
|
153 |
|
|
|
326 |
|
Compensation expense related
to acquisitions (3) |
|
|
620 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
620 |
|
Adjusted EBITDA (loss)
(2) |
|
$ |
538 |
|
|
$ |
2,105 |
|
$ |
540 |
|
|
$ |
(745 |
) |
|
$ |
2,438 |
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months
Ended December 31, 2021 |
|
Americas |
|
Asia Pacific |
|
Europe |
|
Corporate |
|
Total |
Revenue, from external
customers |
|
$ |
11,447 |
|
|
$ |
32,183 |
|
$ |
6,432 |
|
|
$ |
— |
|
|
$ |
50,062 |
|
Adjusted net revenue, from
external customers (1) |
|
$ |
10,855 |
|
|
$ |
7,998 |
|
$ |
3,464 |
|
|
$ |
— |
|
|
$ |
22,317 |
|
Net income |
|
|
|
|
|
|
|
|
|
$ |
2,058 |
|
Benefit from income taxes |
|
|
|
|
|
|
|
|
|
|
642 |
|
Interest income, net |
|
|
|
|
|
|
|
|
|
|
(6 |
) |
Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
|
257 |
|
EBITDA (loss) (2) |
|
$ |
1,648 |
|
|
$ |
1,878 |
|
$ |
350 |
|
|
$ |
(925 |
) |
|
|
2,951 |
|
Non-operating expense
(income), including corporate administration charges |
|
|
152 |
|
|
|
413 |
|
|
75 |
|
|
|
(614 |
) |
|
|
26 |
|
Stock-based compensation
expense |
|
|
161 |
|
|
|
93 |
|
|
74 |
|
|
|
301 |
|
|
|
629 |
|
Non-recurring severance and
professional fees |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
307 |
|
|
|
307 |
|
Compensation expense related
to acquisitions (3) |
|
|
722 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
722 |
|
Adjusted EBITDA (loss)
(2) |
|
$ |
2,683 |
|
|
$ |
2,384 |
|
$ |
499 |
|
|
$ |
(931 |
) |
|
$ |
4,635 |
|
- Represents Revenue less the Direct
contracting costs and reimbursed expenses caption on the
Consolidated Statements of Operations.
- 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 (expense), stock-based
compensation expense, and other non-recurring severance and
professional fees (“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.
- Represents compensation expense
payable per the terms of acquisition agreements.
HUDSON GLOBAL, INC. |
SEGMENT ANALYSIS - YEAR TO DATE |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended December 31, 2022 |
|
Americas |
|
Asia Pacific |
|
Europe |
|
Corporate |
|
Total |
Revenue, from external customers |
|
$ |
51,639 |
|
$ |
118,149 |
|
$ |
31,129 |
|
$ |
— |
|
|
$ |
200,917 |
|
Adjusted net revenue, from
external customers (1) |
|
$ |
48,990 |
|
$ |
34,278 |
|
$ |
15,942 |
|
$ |
— |
|
|
$ |
99,210 |
|
Net income |
|
|
|
|
|
|
|
|
|
$ |
7,129 |
|
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
2,331 |
|
Interest income, net |
|
|
|
|
|
|
|
|
|
|
(83 |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
1,378 |
|
EBITDA (loss) (2) |
|
$ |
4,877 |
|
$ |
7,282 |
|
$ |
1,501 |
|
$ |
(2,905 |
) |
|
|
10,755 |
|
Non-operating expense
(income), including corporate administration charges |
|
|
711 |
|
|
1,151 |
|
|
253 |
|
|
(2,155 |
) |
|
|
(40 |
) |
Stock-based compensation expense |
|
|
713 |
|
|
302 |
|
|
282 |
|
|
1,021 |
|
|
|
2,318 |
|
Non-recurring severance and professional fees |
|
|
306 |
|
|
86 |
|
|
1 |
|
|
324 |
|
|
|
717 |
|
Compensation expense related
to acquisitions (3) |
|
|
2,651 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
2,651 |
|
Adjusted EBITDA (loss) (2) |
|
$ |
9,258 |
|
$ |
8,821 |
|
$ |
2,037 |
|
$ |
(3,715 |
) |
|
$ |
16,401 |
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended December 31, 2021 |
|
Americas |
|
Asia Pacific |
|
Europe |
|
Corporate |
|
Total |
Revenue, from external customers |
|
$ |
28,797 |
|
$ |
118,597 |
|
$ |
21,813 |
|
$ |
— |
|
|
$ |
169,207 |
|
Adjusted net revenue, from
external customers (1) |
|
$ |
27,087 |
|
$ |
28,561 |
|
$ |
12,509 |
|
$ |
— |
|
|
$ |
68,157 |
|
Net income |
|
|
|
|
|
|
|
|
|
$ |
3,227 |
|
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
1,117 |
|
Interest income, net |
|
|
|
|
|
|
|
|
|
|
(33 |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
597 |
|
EBITDA (loss) (2) |
|
$ |
1,801 |
|
$ |
5,452 |
|
$ |
1,007 |
|
$ |
(3,352 |
) |
|
|
4,908 |
|
Non-operating expense
(income),including corporate administration charges |
|
|
386 |
|
|
1,399 |
|
|
331 |
|
|
(2,033 |
) |
|
|
83 |
|
Stock-based compensation expense |
|
|
556 |
|
|
324 |
|
|
246 |
|
|
1,298 |
|
|
|
2,424 |
|
Non-recurring severance and professional fees |
|
|
23 |
|
|
— |
|
|
— |
|
|
637 |
|
|
|
660 |
|
Compensation expense related
to acquisitions (3) |
|
|
1,969 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,969 |
|
Adjusted EBITDA (loss) (2) |
|
$ |
4,735 |
|
$ |
7,175 |
|
$ |
1,584 |
|
$ |
(3,450 |
) |
|
$ |
10,044 |
|
- Represents Revenue less the Direct
contracting costs and reimbursed expenses caption on the
Consolidated Statements of Operations.
- 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) expense, stock-based
compensation expense, and other non-recurring severance and
professional fees (“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.
- Represents compensation expense
payable per the terms of acquisition agreements.
HUDSON GLOBAL,
INC.RECONCILIATION FOR CONSTANT
CURRENCY(in
thousands)(unaudited)
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"), 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, |
|
|
2022 |
|
|
|
2021 |
|
|
As |
|
As |
|
Currency |
|
Constant |
|
reported |
|
reported |
|
translation |
|
currency |
Revenue: |
|
|
|
|
|
|
|
Americas |
$ |
10,058 |
|
|
$ |
11,447 |
|
|
$ |
(37 |
) |
|
$ |
11,410 |
|
Asia Pacific |
|
27,107 |
|
|
|
32,183 |
|
|
|
(3,094 |
) |
|
|
29,089 |
|
Europe |
|
6,426 |
|
|
|
6,432 |
|
|
|
(807 |
) |
|
|
5,625 |
|
Total |
$ |
43,591 |
|
|
$ |
50,062 |
|
|
$ |
(3,938 |
) |
|
$ |
46,124 |
|
Adjusted net revenue (1): |
|
|
|
|
|
|
|
Americas |
$ |
9,553 |
|
|
$ |
10,855 |
|
|
$ |
(33 |
) |
|
$ |
10,822 |
|
Asia Pacific |
|
8,567 |
|
|
|
7,998 |
|
|
|
(699 |
) |
|
|
7,299 |
|
Europe |
|
4,044 |
|
|
|
3,464 |
|
|
|
(430 |
) |
|
|
3,034 |
|
Total |
$ |
22,164 |
|
|
$ |
22,317 |
|
|
$ |
(1,162 |
) |
|
$ |
21,155 |
|
SG&A (2): |
|
|
|
|
|
|
|
Americas |
$ |
10,076 |
|
|
$ |
9,079 |
|
|
$ |
(86 |
) |
|
$ |
8,993 |
|
Asia Pacific |
|
6,444 |
|
|
|
5,688 |
|
|
|
(512 |
) |
|
|
5,176 |
|
Europe |
|
3,605 |
|
|
|
3,037 |
|
|
|
(379 |
) |
|
|
2,658 |
|
Corporate |
|
1,079 |
|
|
|
1,536 |
|
|
|
— |
|
|
|
1,536 |
|
Total |
$ |
21,204 |
|
|
$ |
19,340 |
|
|
$ |
(977 |
) |
|
$ |
18,363 |
|
Operating income: |
|
|
|
|
|
|
|
Americas |
$ |
(733 |
) |
|
$ |
1,565 |
|
|
$ |
(23 |
) |
|
$ |
1,542 |
|
Asia Pacific |
|
1,960 |
|
|
|
2,276 |
|
|
|
(185 |
) |
|
|
2,091 |
|
Europe |
|
444 |
|
|
|
419 |
|
|
|
(49 |
) |
|
|
370 |
|
Corporate |
|
(1,072 |
) |
|
|
(1,540 |
) |
|
|
— |
|
|
|
(1,540 |
) |
Total |
$ |
599 |
|
|
$ |
2,720 |
|
|
$ |
(257 |
) |
|
$ |
2,463 |
|
EBITDA (loss): |
|
|
|
|
|
|
|
Americas |
$ |
(638 |
) |
|
$ |
1,648 |
|
|
$ |
(26 |
) |
|
$ |
1,622 |
|
Asia Pacific |
|
1,749 |
|
|
|
1,878 |
|
|
|
(164 |
) |
|
|
1,714 |
|
Europe |
|
524 |
|
|
|
350 |
|
|
|
(45 |
) |
|
|
305 |
|
Corporate |
|
(593 |
) |
|
|
(925 |
) |
|
|
— |
|
|
|
(925 |
) |
Total |
$ |
1,042 |
|
|
$ |
2,951 |
|
|
$ |
(235 |
) |
|
$ |
2,716 |
|
- Represents Revenue less the Direct contracting costs and
reimbursed expenses caption on the Consolidated Statements of
Operations.
- SG&A is a measure that management uses to evaluate the
segments’ expenses and includes salaries and related costs and
other selling, general and administrative costs.
HUDSON GLOBAL,
INC.RECONCILIATION FOR CONSTANT CURRENCY
(continued)(in
thousands)(unaudited)
|
For The Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
As |
|
As |
|
Currency |
|
Constant |
|
reported |
|
reported |
|
translation |
|
currency |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
51,639 |
|
|
$ |
28,797 |
|
|
$ |
(60 |
) |
|
$ |
28,737 |
|
Asia Pacific |
|
118,149 |
|
|
|
118,597 |
|
|
|
(8,761 |
) |
|
|
109,836 |
|
Europe |
|
31,129 |
|
|
|
21,813 |
|
|
|
(2,301 |
) |
|
|
19,512 |
|
Total |
$ |
200,917 |
|
|
$ |
169,207 |
|
|
$ |
(11,122 |
) |
|
$ |
158,085 |
|
Adjusted net revenue (1): |
|
|
|
|
|
|
|
Americas |
$ |
48,990 |
|
|
$ |
27,087 |
|
|
$ |
(55 |
) |
|
$ |
27,032 |
|
Asia Pacific |
|
34,278 |
|
|
|
28,561 |
|
|
|
(1,915 |
) |
|
|
26,646 |
|
Europe |
|
15,942 |
|
|
|
12,509 |
|
|
|
(1,307 |
) |
|
|
11,202 |
|
Total |
$ |
99,210 |
|
|
$ |
68,157 |
|
|
$ |
(3,277 |
) |
|
$ |
64,880 |
|
SG&A (2): |
|
|
|
|
|
|
|
Americas |
$ |
43,696 |
|
|
$ |
24,908 |
|
|
$ |
(108 |
) |
|
$ |
24,800 |
|
Asia Pacific |
|
25,556 |
|
|
|
21,705 |
|
|
|
(1,441 |
) |
|
|
20,264 |
|
Europe |
|
14,199 |
|
|
|
11,169 |
|
|
|
(1,167 |
) |
|
|
10,002 |
|
Corporate |
|
5,044 |
|
|
|
5,384 |
|
|
|
— |
|
|
|
5,384 |
|
Total |
$ |
88,495 |
|
|
$ |
63,166 |
|
|
$ |
(2,716 |
) |
|
$ |
60,450 |
|
Operating income: |
|
|
|
|
|
|
|
Americas |
$ |
4,298 |
|
|
$ |
1,689 |
|
|
$ |
(24 |
) |
|
$ |
1,665 |
|
Asia Pacific |
|
8,378 |
|
|
|
6,785 |
|
|
|
(469 |
) |
|
|
6,316 |
|
Europe |
|
1,726 |
|
|
|
1,309 |
|
|
|
(137 |
) |
|
|
1,172 |
|
Corporate |
|
(5,065 |
) |
|
|
(5,389 |
) |
|
|
— |
|
|
|
(5,389 |
) |
Total |
$ |
9,337 |
|
|
$ |
4,394 |
|
|
$ |
(630 |
) |
|
$ |
3,764 |
|
EBITDA (loss): |
|
|
|
|
|
|
|
Americas |
$ |
4,877 |
|
|
$ |
1,801 |
|
|
$ |
(25 |
) |
|
$ |
1,776 |
|
Asia Pacific |
|
7,282 |
|
|
|
5,452 |
|
|
|
(384 |
) |
|
|
5,068 |
|
Europe |
|
1,501 |
|
|
|
1,007 |
|
|
|
(112 |
) |
|
|
895 |
|
Corporate |
|
(2,905 |
) |
|
|
(3,352 |
) |
|
|
— |
|
|
|
(3,352 |
) |
Total |
$ |
10,755 |
|
|
$ |
4,908 |
|
|
$ |
(521 |
) |
|
$ |
4,387 |
|
- Represents Revenue less the Direct contracting costs and
reimbursed expenses caption on the Consolidated Statements of
Operations.
- SG&A is a measure that management uses to evaluate the
segments’ expenses and includes salaries and related costs and
other selling, general and administrative costs.
HUDSON GLOBAL,
INC.RECONCILIATION OF ADJUSTED NET INCOME PER
DILUTED SHARE(in thousands, except per share
amounts)(unaudited)
|
|
Adjusted |
|
Diluted Shares |
|
Per Diluted |
For The Three Months
Ended December 31, 2022 |
|
Net Income |
|
Outstanding |
|
Share (1) |
Net income |
|
$ |
62 |
|
3,139 |
|
$ |
0.02 |
Non-recurring severance and
professional fees (after tax) |
|
|
326 |
|
3,139 |
|
|
0.10 |
Compensation expense related
to acquisitions (after tax) (2) |
|
|
636 |
|
3,139 |
|
|
0.20 |
Adjusted net income (3) |
|
$ |
1,024 |
|
3,139 |
|
$ |
0.33 |
|
|
Adjusted |
|
Diluted Shares |
|
Per Diluted |
For The Three Months
Ended December 31, 2021 |
|
Net Income |
|
Outstanding |
|
Share |
Net income |
|
$ |
2,058 |
|
3,081 |
|
$ |
0.67 |
Non-recurring severance and
professional fees (after tax) |
|
|
307 |
|
3,081 |
|
|
0.10 |
Compensation expense related
to acquisitions (after tax) (2) |
|
|
765 |
|
3,081 |
|
|
0.25 |
Adjusted net income (3) |
|
$ |
3,130 |
|
3,081 |
|
$ |
1.02 |
|
|
Adjusted |
|
Diluted Shares |
|
Per Diluted |
For The Year Ended
December 31, 2022 |
|
Net Income |
|
Outstanding |
|
Share |
Net income |
|
$ |
7,129 |
|
3,138 |
|
$ |
2.27 |
Non-recurring severance and
professional fees (after tax) |
|
|
717 |
|
3,138 |
|
|
0.23 |
Compensation expense related
to acquisitions (after tax) (2) |
|
|
2,758 |
|
3,138 |
|
|
0.88 |
Adjusted net income (3) |
|
$ |
10,604 |
|
3,138 |
|
$ |
3.38 |
|
|
Adjusted |
|
Diluted Shares |
|
Per Diluted |
For The Year Ended
December 31, 2021 |
|
Net Income |
|
Outstanding |
|
Share |
Net income |
|
$ |
3,227 |
|
3,003 |
|
$ |
1.07 |
Non-recurring severance and
professional fees (after tax) |
|
|
660 |
|
3,003 |
|
|
0.22 |
Compensation expense related
to acquisitions (after tax) (2) |
|
$ |
2,253 |
|
3,003 |
|
|
0.75 |
Adjusted net income (3) |
|
$ |
6,140 |
|
3,003 |
|
$ |
2.04 |
- Amounts may not sum due to rounding.
- Represents compensation expense
payable per the terms of the Coit acquisition, including a
promissory note for $1.35 million payable over three years, and
$500k of the Company's common stock vesting over 30 months, as well
as earn out payments. In addition, in 2022 represents compensation
expense payable in the form of a CFO retention payment per the
terms of the Karani acquisition.
- Adjusted net income or loss per
diluted share are Non-GAAP measures defined as reported net income
or loss and reported net income or loss per diluted share before
items such as acquisition-related costs and non-recurring severance
and professional fees after tax that are presented to provide
additional information about the Company's operations on a basis
consistent with the measures that the Company uses to manage its
operations and evaluate its performance. Management also uses these
measurements to evaluate capital needs and working capital
requirements. Adjusted net income or loss per diluted share should
not be considered in isolation or as substitutes for net income or
loss and net income or loss per share and other income or cash flow
statement data prepared in accordance with generally accepted
accounting principles or as measures of the Company's profitability
or liquidity. Further, adjusted net income or loss and adjusted net
income or loss per diluted share as presented above may not be
comparable with similarly titled measures reported by other
companies.
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