NEW YORK, Apr 28, 2010 (GlobeNewswire via COMTEX) --Hudson Highland Group, Inc. (Nasdaq:HHGP), one of the world's leading providers of permanent recruitment, contract professionals and talent management solutions, today announced financial results for the first quarter ended March 31, 2010.
2010 First Quarter Summary
-- Revenue of $180.1 million, an increase of 9.1 percent from $165.2
million for the first quarter of 2009, and a decrease of $2.4 million or
1.3 percent from the fourth quarter of 2009
-- Gross margin of $66.4 million, or 36.9 percent of revenue, up 7.1
percent from $62.0 million, or 37.5 percent of revenue for the same
period last year, and a decrease of $3.0 million or 4.3 percent from the
fourth quarter of 2009
-- EBITDA* loss of $1.4 million, or 0.8 percent of revenue, improved from
an EBITDA loss of $14.9 million for the first quarter of 2009, which
included $5.8 million of restructuring charges
-- Net loss from continuing operations of $4.1 million, or $0.16 per basic
and diluted share, compared with net loss from continuing operations of
$14.8 million, or $0.59 per basic and diluted share, for the first
quarter of 2009
-- Net loss of $4.2 million, or $0.16 per basic and diluted share, compared
with net loss of $5.6 million, or $0.22 per basic and diluted share, for
the first quarter of 2009
* EBITDA is defined in the segment tables at the end of this release and includes other non-operating income.
"The first quarter was characterized by improving economic conditions globally, stronger than expected demand for permanent recruitment, and better year-over-year and sequential performance from all of our regional operations" said Jon Chait, Hudson Highland Group's chairman and chief executive officer.
"We are particularly encouraged by the growth in our UK and Asian operations during the period," said Mary Jane Raymond, the company's executive vice president and chief financial officer. "In markets where demand was somewhat less robust at this stage of the recovery, we still delivered improved profitability over the prior year period as a result of previous cost reduction actions."
Liquidity and Capital Resources
At the end of the first quarter of 2010, the company had $24.1 million in cash and $10.5 million in borrowings under its primary credit facility and $0.9 million in borrowings under its local credit facilities, down from $36.1 million in cash and $10.5 million in borrowings at the end of the fourth quarter of 2009. The primary use of cash in the first quarter was to fund the increase in temporary contracting revenue. In addition, the company had availability as of March 31, 2010 under its primary credit facility of $10.3 million and under local country credit facilities of $4.8 million, for a total of $15.1 million. Subsequent to March 31, 2010, the company raised an additional $19.2 million of net cash proceeds from its recent public offering of common stock.
Guidance
The company currently expects second quarter 2010 revenue of $190 - $200 million at prevailing exchange rates and EBITDA of $1 - $4 million. This compares with revenue of $173.8 million and an EBITDA loss of $9.5 million in the second quarter of 2009.
Additional Information
Additional information about the company's quarterly results can be found in the shareholder letter and the quarterly earnings slides in the investor information section of the company's Web site at www.hudson.com.
Conference Call/Webcast
Hudson Highland Group will conduct a conference call Thursday, April 29, 2010 at 9:00 a.m. ET to discuss this announcement. Individuals wishing to listen can access the Web cast on the investor information section of the company's Web site at www.hudson.com.
The archived call will be available on the investor information section of the company's Web site at www.hudson.com.
About Hudson Highland Group
Hudson Highland Group, Inc. is a leading provider of permanent recruitment, contract professionals and talent management services worldwide. From single placements to total outsourced solutions, Hudson helps clients achieve greater organizational performance by assessing, recruiting, developing and engaging the best and brightest people for their businesses. The company employs approximately 2,000 professionals serving clients and candidates in approximately 20 countries. More information is available at www.hudson.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 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 ability of clients to terminate their relationship with the company at any time; risks in collecting the company's accounts receivable; the company's history of negative cash flows and operating losses may continue; the company's limited borrowing availability under its credit facility, which may negatively impact its liquidity; restrictions on the company's operating flexibility due to the terms of its credit facility; risks related to fluctuations in the company's operating results from quarter to quarter; risks related to international operations, including foreign currency fluctuations; risks associated with the company's investment strategy; risks and financial impact associated with dispositions of underperforming assets; implementation of the company's cost reduction initiatives effectively; the company's heavy reliance on information systems and the impact of potentially losing or failing to develop technology; competition in the company's markets; the company's exposure to employment-related claims from both clients and employers and limits on related insurance coverage; the company's dependence on key management personnel; the company's ability to attract and retain highly skilled professionals; 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
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HUDSON HIGHLAND GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended
March 31,
----------------------
2010 2009
---------- ----------
Revenue $ 180,118 $ 165,150
Direct costs 113,697 103,146
---------- ----------
Gross margin 66,421 62,004
---------- ----------
Operating expenses:
Selling, general and
administrative expenses 68,333 71,702
Depreciation and amortization 2,287 3,788
Business reorganization and
integration expenses 113 5,839
Goodwill and other impairment
charges -- --
---------- ----------
Total operating expenses 70,733 81,329
---------- ----------
Operating (loss) income (4,312) (19,325)
Other (expense) income:
Interest, net (232) (191)
Other, net 658 621
---------- ----------
(Loss) income from continuing
operations before income taxes (3,886) (18,895)
Provision (benefit) for income
taxes 252 (4,060)
---------- ----------
(Loss) income from continuing
operations (4,138) (14,835)
(Loss) income from discontinued
operations, net of income taxes (69) 9,276
---------- ----------
Net (loss) income $ (4,207) $ (5,559)
========== ==========
Basic and duluted (loss) income
per share:
(Loss) income from continuing
operations $ (0.16) $ (0.59)
(Loss) income from discontinued
operations -- 0.37
---------- ----------
Net (loss) income $ (0.16) $ (0.22)
========== ==========
Weighted average shares
outstanding:
Basic and diluted 26,257 25,171
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HUDSON HIGHLAND GROUP, INC.
----------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
March 31, December
2010 31, 2009
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 24,128 $ 36,064
Accounts receivable, net 113,213 98,994
Prepaid and other 13,752 13,308
---------- ----------
Total current assets 151,093 148,366
Property and equipment, net 17,874 19,433
Other assets 12,420 14,145
---------- ----------
Total assets $ 181,387 $ 181,944
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 12,844 $ 12,811
Accrued expenses and other
current liabilities 62,395 54,103
Short-term borrowings 11,380 10,456
Accrued business reorganization
expenses 5,315 8,784
---------- ----------
Total current liabilities 91,934 86,154
Other non-current liabilities 9,603 10,768
Income tax payable, non-current 8,573 8,415
Accrued business reorganization
expenses, non-current 369 347
---------- ----------
Total liabilities 110,479 105,684
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 27,319 and 26,836
shares, respectively 27 27
Additional paid-in capital 446,118 445,541
Accumulated deficit (407,721) (403,514)
Accumulated other comprehensive
income--translation
adjustments 32,484 34,509
Treasury stock, 0 and 114
shares, respectively, at cost -- (303)
---------- ----------
Total stockholders' equity 70,908 76,260
---------- ----------
Total liabilities and
stockholders' equity $ 181,387 $ 181,944
========== ==========
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HUDSON HIGHLAND GROUP, INC.
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SEGMENT ANALYSIS
(in thousands)
(unaudited)
For The Three Months Ended Hudson Hudson Hudson Hudson
March 31, 2010 Americas Europe ANZ Asia Corporate Total
---------- ---------- --------- ---------- ---------- -----------
Revenue $ 39,507 $ 76,654 $ 56,822 $ 7,135 $ -- $ 180,118
========== ========== ========= ========== ========== ===========
Gross margin $ 9,279 $ 32,530 $ 17,776 $ 6,836 $ -- $ 66,421
========== ========== ========= ========== ========== ===========
Business reorganization and
integration expenses (recovery) $ 142 $ 87 $ (116) $ -- $ -- $ 113
Non-operating expense (income),
including corporate
administration charges (509) 1,178 582 188 (2,097) (658)
---------- ---------- --------- ---------- ---------- -----------
EBITDA (Loss) (1) $ (241) $ 436 $ 249 $ 597 $ (2,408) $ (1,367)
Depreciation and amortization
expenses 2,287
Interest expense (income) 232
Provision for (benefits from)
income taxes 252
Loss (income) from discontinued
operations, net of taxes 69
-----------
Net Income (loss) $ (4,207)
===========
For The Three Months Ended Hudson Hudson Hudson Hudson
March 31, 2009 (2) Americas Europe ANZ Asia Corporate Total
---------- ---------- --------- ---------- ---------- -----------
Revenue (2) $ 44,023 $ 66,387 $ 49,997 $ 4,743 $ -- $ 165,150
========== ========== ========= ========== ========== ===========
Gross margin $ 10,962 $ 30,313 $ 16,303 $ 4,426 $ -- $ 62,004
========== ========== ========= ========== ========== ===========
Business reorganization and
integration expenses (recovery) $ 1,624 $ 2,338 $ 1,884 $ (7) $ -- $ 5,839
Non-operating expense (income),
including corporate
administration charges 605 192 172 (389) (1,201) (621)
---------- ---------- --------- ---------- ---------- -----------
EBITDA (Loss) (1) (5,391) (3,611) (1,751) (615) (3,548) (14,916)
Depreciation and amortization
expenses 3,788
Interest expense (income) 191
Provision for (benefits from)
income taxes (4,060)
Loss (income) from discontinued
operations, net of taxes (9,276)
-----------
Net Income (loss) $ (5,559)
===========
For the Three Months Ended Hudson Hudson Hudson Hudson
June 30, 2009 Americas Europe ANZ Asia Corporate Total
---------- ---------- --------- ---------- ---------- -----------
Revenue $ 43,133 $ 68,187 $ 56,653 $ 5,875 $ -- $ 173,848
========== ========== ========= ========== ========== ===========
Gross margin $ 10,512 $ 31,280 $ 17,660 $ 5,432 $ -- $ 64,884
========== ========== ========= ========== ========== ===========
Business reorganization and
integration expenses (recovery) $ 1,124 $ 2,328 $ (8) $ 104 $ 14 $ 3,562
Goodwill and other impairment
charges (recovery) (120) -- -- 1,669 -- 1,549
Non-operating expense (income),
including corporate
administration charges 531 690 (243) 168 (1,200) (54)
---------- ---------- --------- ---------- ---------- -----------
EBITDA (Loss) (1) $ (2,002) $ (2,220) $ 817 $ (2,063) $ (4,035) $ (9,503)
Depreciation and amortization
expenses 2,840
Interest expense (income) 182
Provision for (benefits from)
income taxes 2,975
Loss (income) from discontinued
operations, net of taxes 2,272
-----------
Net Income (loss) $ (17,771)
===========
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(1) Non-GAAP earnings before interest, income taxes, 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. 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
as presented above may not be comparable with similarly titled measures reported by other companies.
(2) Prior year revenue has been reclassed to conform to current year presentation.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Hudson Highland Group, Inc.
CONTACT: Hudson Highland Group
David F. Kirby
212-351-7216
david.kirby@hudson.com
