Hudson Highland Group Reports 2005 First Quarter Financial Results
NEW YORK, May 5 /PRNewswire-FirstCall/ -- Hudson Highland Group,
Inc. (NASDAQ:HHGP), one of the world's leading providers of
specialized professional staffing, retained executive search and
human capital solutions, today announced financial results for the
first quarter ended March 31, 2005. 2005 First Quarter Highlights *
Revenue of $352.9 million, an increase of 21.8 percent from $289.8
million for the first quarter of 2004 * Gross margin of $128.2
million, or 36.3 percent of revenue, up 20.5 percent from $106.4
million, or 36.7 percent of revenue, for the same year ago period *
EBITDA of $2.8 million, compared to a loss of $11.2 million in the
first quarter of 2004 * Net loss of $4.1 million, or $0.20 per
basic and diluted share, compared to a net loss of $18.7 million,
or $1.09 per basic and diluted share for the first quarter of 2004
"The company performed admirably in the first quarter, recording
strong year-over-year revenue growth -- particularly Hudson North
America where revenue increased 54 percent -- and our sixth
consecutive quarter of improved year-over-year operating
profitability," said Jon Chait, chairman and chief executive
officer of Hudson Highland Group. "This progress can be attributed
to continuing strength in the employment market and our focus on
key, high-value offerings for segments with strong growth
potential." Richard W. Pehlke, executive vice president and chief
financial officer of Hudson Highland Group added, "All around, the
first quarter was fundamentally sound, with strong top-line and
gross margin growth, solid expense control, good operating leverage
and EBITDA ahead of plan." Guidance Given the current economic
environment, the company expects EBITDA as a percent of revenue to
be 1.5 to 2 percent in 2005 and 3.5 to 4 percent in 2006. The
company now believes that an assumption of 12 to 15 percent revenue
growth for 2005 is reasonable, resulting in a full-year EBITDA
range of $22 to 29 million. This is based on expectations of
constant currency revenue and gross margin growth of 30 to 35
percent in Hudson North America, 10 to 15 percent in Hudson Europe,
and 0 to 5 percent in Hudson Asia Pacific and Highland Partners.
Conference Call / Webcast Hudson Highland Group will conduct a
conference call today Thursday, May 5, 2005 at 10:30 AM EDT to
discuss this announcement. Investors wishing to participate can
join the conference call by dialing 1-800-374-1532 followed by the
participant passcode 5580704 at 10:20 AM EDT. For those outside the
United States, please call in on 1-706-634-5594 followed by the
participant passcode 5580704. Hudson Highland Group's quarterly
conference call can also be accessed online through Yahoo! Finance
at http://www.yahoo.com/ and the investor information section of
the company's website at http://www.hhgroup.com/. Hudson Highland
Group Hudson Highland Group is one of the world's leading
professional staffing, retained executive search and human capital
solution providers. We help our clients achieve greater
organizational performance by attracting, selecting, engaging and
developing the best and brightest people for their businesses. Our
approximately 3,800 employees in more than 20 countries are
dedicated to providing unparalleled service and value to our
clients. More information about Hudson Highland Group is available
at http://www.hhgroup.com/. Safe Harbor Statement 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 risks and uncertainties that could cause actual results
to differ materially from those described in the forward- looking
statements. These factors include, but are not limited to, the
impact of global economic fluctuations on temporary contracting
operations; the cyclical nature of the company's executive search
and mid-market professional staffing businesses; the company's
ability to manage its growth and fund working capital associated
therewith; risks associated with expansion; the company's reliance
on information systems and technology; competition; fluctuations in
operating results; risks relating to foreign operations, including
foreign currency fluctuations; dependence on highly skilled
professionals and key management personnel; the impact of employees
departing with existing executive search clients; risks maintaining
professional reputation and brand name; restrictions imposed by
blocking arrangements; exposure to employment-related claims, and
limits on insurance coverage related thereto; government
regulations; the company's ability to successfully operate as an
independent company and the level of costs associated therewith;
and restrictions on the company's operating flexibility due to the
terms of its credit facility. 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 press release. The
company assumes no obligation, and expressly disclaims any
obligation, to review or confirm analysts' expectations or
estimates or to update any forward-looking statements, whether as a
result of new information, future events or otherwise. Hudson
Highland Group, Inc. Consolidated Condensed Statements Of
Operations (in thousands, except share and per share amounts)
(unaudited) Three Months Ended March 31, 2005 2004 Revenue $
352,869 $ 289,804 Direct costs 224,662 183,413 Gross margin 128,207
106,391 Selling, general and administrative expenses 124,899
117,596 Depreciation and amortization 4,857 5,079 Business
reorganization expenses 529 60 Merger and integration recoveries
(43) (37) Operating loss (2,035) (16,307) Other expenses: Other 276
1,597 Interest, net 426 401 Loss before provision for income taxes
and accounting change (2,737) (18,305) Provision for income taxes
1,400 403 Net loss $ (4,137) $ (18,708) Basic and diluted loss per
share: Net loss $(.20) $(1.09) Weighted average shares outstanding
20,504,000 17,231,000 Hudson Highland Group, Inc. Consolidated
Condensed Balance Sheets (in thousands, except share and per share
amounts) March 31, December 31, 2005 2004 (unaudited) ASSETS
Current assets: Cash and cash equivalents $12,316 $ 21,064 Accounts
receivable, net 222,804 197,582 Other current assets 14,142 14,187
Total current assets 249,262 232,833 Property and equipment, net
34,492 36,360 Other assets 6,335 6,081 Intangibles, net 5,896 6,104
$295,985 $281,378 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $28,754 $27,023 Accrued expenses and
other current liabilities 140,019 140,903 Short-term borrowings and
current portion of long-term debt 23,354 4,066 Accrued business
reorganization expenses 8,031 8,930 Accrued merger and integration
expenses 1,751 1,872 Total current liabilities 201,909 182,794
Accrued business reorganization expenses, non-current 5,674 6,832
Accrued merger and integration expenses, non-current 2,843 3,329
Other non-current liabilities 2,564 2,648 Long-term debt, less
current portion 2,367 2,041 Total liabilities 215,357 197,644
Commitments and Contingencies Stockholders' equity: Preferred
stock, $0.001 par value, 10,000,000 shares authorized; none issued
or outstanding -� -� Common stock, $0.001 par value, 100,000,000
shares authorized; issued 20,739,722 and 20,612,966 shares,
respectively 21 21 Additional paid-in capital 355,707 353,825
Retained deficit (315,713) (311,576) Accumulated other
comprehensive income - translation adjustments 40,843 41,694
Treasury stock, 15,798 shares (230) (230) Total stockholders'
equity 80,628 83,734 $295,985 $281,378 Hudson Highland Group, Inc.
Segment Analysis (in thousands) (unaudited) For the Three Months
Ended March 31, Corporate 2005 Americas Europe Asia Pac & Other
Total Revenue Hudson $111,131 $122,399 $103,501 $974 $338,005
Highland 11,785 1,921 1,158 -- 14,864 $122,916 $124,320 $104,659
$974 $352,869 Gross Margin Hudson $26,800 $50,451 $36,116 $774
$114,141 Highland 11,093 1,862 1,111 -- 14,066 $37,893 $52,313
$37,227 $774 $128,207 Adjusted EBITDA (1) Hudson $3,324 $3,234
$6,825 $(858) $12,525 Highland 654 (86) (118) 450 Corporate -- --
-- (9,667) (9,667) $3,978 $3,148 $6,707 $(10,525) $3,308 EBITDA (1)
Hudson $2,758 $3,314 $6,825 $(858) $12,039 Highland 654 (86) (118)
450 Corporate -- -- -- (9,667) (9,667) $3,412 $3,228 $6,707
$(10,525) $2,822 For the Three Months Ended March 31, Corporate
2004 Americas Europe Asia Pac & Other Total Revenue Hudson
$72,234 $103,016 $99,877 $148 $275,275 Highland 9,564 2,047 2,918
-- 14,529 $81,798 $105,063 $102,795 $148 $289,804 Gross Margin
Hudson $16,752 $43,372 $32,524 $117 $92,765 Highland 8,906 1,965
2,755 -- 13,626 $25,658 $45,337 $35,279 $117 $106,391 Adjusted
EBITDA (1) Hudson $(986) $(2,665) $2,120 $(1,596) $(3,127) Highland
(404) (68) 528 56 Corporate -- -- -- (8,134) (8,134) $(1,390)
$(2,733) $2,648 $(9,730) $(11,205) EBITDA (1) Hudson $(916)
$(2,665) $2,103 $(1,596) $(3,074) Highland (314) (234) 528 (20)
Corporate -- -- -- (8,134) (8,134) $(1,230) $(2,899) $2,631
$(9,730) $(11,228) See following page for descriptions of note (1).
Hudson Highland Group, Inc. Reconciliation Of Adjusted Ebitda To
Operating Loss (in thousands) (unaudited) Three Months Ended March
31 Hudson Adjusted EBITDA (1) $12,525 $(3,127) Business
reorganization (expenses) recoveries (529) 16 Merger and
integration recoveries 43 37 EBITDA (1) 12,039 (3,074) Depreciation
and amortization (4,371) (3,733) Operating income (loss) $ 7,668
$(6,807) Highland Adjusted EBITDA (1) $450 $56 Business
reorganization expenses -- (76) EBITDA (1) 450 (20) Depreciation
and amortization (354) (423) Operating income (loss) $96 $(443)
Corporate & Other Adjusted EBITDA and EBITDA (1) $(9,667)
$(8,134) Depreciation and amortization (132) (923) Corporate
expenses $(9,799) $(9,057) Hudson Highland Group consolidated
Adjusted EBITDA (1) $ 3,308 $(11,205) Business reorganization
expenses (529) (60) Merger and integration recoveries 43 37 EBITDA
(1) 2,822 (11,228) Depreciation and amortization (4,857) (5,079)
Operating loss $(2,035) $(16,307) (1) Non-GAAP earnings before
interest, income taxes, special charges, other non-operating
expense, and depreciation and amortization ("Adjusted EBITDA") and
non-GAAP earnings before interest, income taxes, other
non-operating expense, and depreciation and amortization ("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. Adjusted EBITDA and 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, adjusted EBITDA and EBITDA
as presented above may not be comparable with similarly titled
measures reported by other companies. DATASOURCE: Hudson Highland
Group, Inc. CONTACT: Richard W. Pehlke of Hudson Highland Group,
+1-212-351-7285, ; or Thomas Smith of Ogilvy Public Relations
Worldwide, +1-212-880-5269, for Hudson Highland Group Web site:
http://www.hhgroup.com/
Copyright
Hudson Highland (NASDAQ:HHGP)
Historical Stock Chart
From May 2024 to Jun 2024
Hudson Highland (NASDAQ:HHGP)
Historical Stock Chart
From Jun 2023 to Jun 2024