Hudson Highland Group Reports 2011 Third Quarter Financial Results
Hudson Highland Group, Inc.
01.11.2011 12:00
---------------------------------------------------------------------------
NEW YORK, 2011-11-01 12:00 CET (GLOBE NEWSWIRE) --
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 third quarter ended
September 30, 2011.
2011 Third Quarter Summary
-- Revenue of $245.1 million, an increase of 22.3 percent over the third
quarter of 2010, or 13.5 percent in constant currency
-- Permanent recruitment revenue increased 22.7 percent from the prior year
quarter, or 13.3 percent in constant currency
-- Temporary contracting revenue increased 23.6 percent in the third quarter,
or 15.1 percent in constant currency
-- Gross margin of $93.0 million, or 37.9 percent of revenue, up 24.0 percent
from the same period last year, or 14.9 percent in constant currency
-- EBITDA* of $7.4 million, or 3.0 percent of revenue, improved from $1.2
million in the third quarter of 2010
-- Net income of $3.4 million, or $0.11 per basic and diluted share, compared
with a net loss of $1.9 million, or $0.06 per basic and diluted share, in
the third quarter of 2010
* EBITDA is defined in the segment tables at the end of this release and
includes other non-operating income.
'Our diversified portfolio of professional recruitment practices and global
presence supported the delivery of meaningful year-over-year growth during the
third quarter,' said Manuel Marquez, chairman and chief executive officer of
Hudson Highland Group. 'We are also encouraged by the continued momentum of our
legal and recruitment process outsourcing (RPO) solution businesses, two
practice areas specifically tailored to respond to the growing international
needs of our global clients.'
'We continued to make strides on profitability metrics in the third quarter,'
added Mary Jane Raymond, the company's chief financial officer. 'Our results
are starting to reflect steps we are taking to heighten productivity and
leverage, which should help offset the effects of challenging macro-economic
conditions.'
Regional Results
Regional results for the third quarter in constant currency were:
-- Europe gross margin increased 10.4 percent, led by 12.6 percent growth in
continental Europe and 8.6 percent growth in the U.K., compared with third
quarter 2010
-- Australia/New Zealand gross margin increased 13.3 percent compared with the
prior year period, led by 22.3 percent growth in permanent recruitment
-- Americas gross margin increased 46.5 percent compared with the prior year
period, driven by 32.6 percent growth in temporary contracting and
continued strong growth in permanent recruitment
-- Asia gross margin increased 4.9 percent compared with third quarter 2010
Liquidity and Capital Resources
The company ended the third quarter of 2011 with $72.2 million in liquidity,
composed of $22.5 million in cash and $49.7 million in availability under its
credit facilities. The company used $6.8 million in cash flow from operations
during the quarter and reduced its outstanding borrowings from $10.1 million at
the end of the second quarter to $6.6 million at the end of the third quarter.
Guidance
The company currently expects fourth quarter 2011 revenue of $225 - $240
million and EBITDA of $6 - $9 million at prevailing exchange rates. This
compares with revenue of $219.1 million and EBITDA of $3.6 million in the
fourth quarter of 2010.
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 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
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 more
than 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; 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; 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; risks in collecting the company's accounts receivable; the
company's history of negative cash flows and operating losses may continue;
restrictions on the company's operating flexibility due to the terms of its
credit facilities; the company's ability to refinance its existing AUD 17
million finance agreement with the Commonwealth Bank of Australia prior to the
December 5, 2011 termination date of the existing agreement; 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; risks related to our dependence on uninterrupted service
to clients; the company's exposure to employment-related claims from both
clients and employers and limits on related insurance coverage; 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 per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------
2011 2010 2011 2010
-------------------------------------------
Revenue $ 245,081 $ 200,394 $ 710,998 $ 575,481
Direct costs 152,089 125,403 441,341 359,833
-------------------------------------------
Gross margin 92,992 74,991 269,657 215,648
-------------------------------------------
Operating expenses:
Selling, general and 85,305 74,378 251,517 214,121
administrative expenses
Depreciation and amortization 1,537 1,981 4,750 6,453
Business reorganization and -- 41 747 705
integration expenses
-------------------------------------------
Total operating expenses 86,842 76,400 257,014 221,279
-------------------------------------------
Operating income (loss) 6,150 (1,409) 12,643 (5,631)
Other (expense) income:
Interest, net (328) (497) (910) (972)
Other, net (238) 1,184 244 2,687
Fee for early extinguishment of -- (563) -- (563)
credit facility
-------------------------------------------
Income (loss) from continuing 5,584 (1,285) 11,977 (4,479)
operations before provision for
income taxes
Provision for (benefit from) income 2,202 599 4,377 1,366
taxes
-------------------------------------------
Income (loss) from continuing 3,382 (1,884) 7,600 (5,845)
operations
Income (loss) from discontinued -- (14) -- (31)
operations, net of income taxes
-------------------------------------------
Net income (loss) $ 3,382 $ (1,898) $ 7,600 $ (5,876)
===========================================
Basic earnings (loss) per share:
Income (loss) from continuing $ 0.11 $ (0.06) $ 0.24 $ (0.20)
operations
Income (loss) from discontinued -- (0.00) -- (0.00)
operations
-------------------------------------------
Net income (loss) $ 0.11 $ (0.06) $ 0.24 $ (0.20)
===========================================
Diluted earnings (loss) per share:
Income (loss) from continuing $ 0.11 $ (0.06) $ 0.24 $ (0.20)
operations
Income (loss) from discontinued -- (0.00) -- (0.00)
operations
-------------------------------------------
Net income (loss) $ 0.11 $ (0.06) $ 0.24 $ (0.20)
===========================================
Weighted average shares outstanding:
Basic 31,620 31,225 31,541 29,493
Diluted 32,085 31,225 31,988 29,493
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HUDSON HIGHLAND GROUP, INC.
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-
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
September December
30, 31,
2011 2010
---------------------
ASSETS
Current assets:
Cash and cash equivalents $ 22,482 $ 29,523
Accounts receivable, less allowance for doubtful accounts 151,517 128,576
of $1,973 and $2,145, respectively
Prepaid and other 12,501 13,988
---------------------
Total current assets 186,500 172,087
Property and equipment, net 17,126 16,593
Other assets 16,561 17,154
---------------------
Total assets $ 220,187 $ 205,834
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,500 $ 14,812
Accrued expenses and other current liabilities 80,709 74,990
Short-term borrowings 6,561 1,339
Accrued business reorganization expenses 1,200 2,619
---------------------
Total current liabilities 98,970 93,760
Other non-current liabilities 10,955 10,493
Income tax payable, non-current 8,272 8,303
---------------------
Total liabilities 118,197 112,556
=====================
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; 33 32
issued 32,922 and 32,181 shares, respectively
Additional paid-in capital 470,005 466,582
Accumulated deficit (400,599) (408,199)
Accumulated other comprehensive income--translation 32,943 34,902
adjustments
Treasury stock, 71 and 9 shares, respectively, at cost (392) (39)
---------------------
Total stockholders' equity 101,990 93,278
---------------------
Total liabilities and stockholders' equity $ 220,187 $ 205,834
=====================
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-
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-
HUDSON HIGHLAND GROUP, INC.
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-
SEGMENT ANALYSIS - QUARTER TO DATE
(in thousands)
(unaudited)
For The Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2011
--------------------------------------------------------------
Revenue, from $ 96,753 $ 90,437 $ 47,691 $ 10,200 $ -- $ 245,081
external
customers
==============================================================
Gross margin, $ 38,129 $ 31,439 $ 13,662 $ 9,762 $ -- $ 92,992
from external
customers
==============================================================
Business $ -- $ -- $ -- $ -- $ -- $ --
reorganization
and integration
expenses
(recovery)
Non-operating 1,873 1,421 497 427 (3,980) 238
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ 2,020 $ 3,934 $ 1,459 $ 1,289 $ (1,253) $ 7,449
Depreciation and 1,537
amortization
expenses
Interest expense 328
(income), net
Provision for 2,202
(benefit from)
income taxes
Loss (income) from --
discontinued operations,
net of taxes
----------
Net income (loss) $ 3,382
==========
For The Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2010
--------------------------------------------------------------
Revenue, from $ 80,503 $ 72,974 $ 37,839 $ 9,078 $ -- $ 200,394
external
customers
==============================================================
Gross margin, $ 32,647 $ 24,259 $ 9,311 $ 8,774 $ -- $ 74,991
from external
customers
==============================================================
Business $ -- $ -- $ 41 $ -- $ -- $ 41
reorganization
and integration
expenses
(recovery)
Non-operating 3,088 1,433 (407) 478 (5,776) (1,184)
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ (2,128) $ 1,376 $ 532 $ 1,169 $ 244 $ 1,193
Depreciation and 1,981
amortization
expenses
Interest expense 497
(income), net
Provision for 599
(benefit from)
income taxes
Loss (income) from 14
discontinued operations,
net of taxes
----------
Net income (loss) $ (1,898)
==========
For the Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
December 31,
2010
--------------------------------------------------------------
Revenue, from $ 90,616 $ 74,338 $ 44,268 $ 9,839 $ -- $ 219,061
external
customers
==============================================================
Gross margin, $ 37,468 $ 25,231 $ 10,775 $ 9,450 $ -- $ 82,924
from external
customers
==============================================================
Business $ 865 $ 102 $ 21 $ -- $ -- $ 988
reorganization
and integration
expenses
(recovery)
Non-operating 1,337 886 (1,298) 243 (2,979) (1,811)
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ 314 $ 1,254 $ 2,386 $ 1,523 $ (1,921) $ 3,556
Depreciation and 1,730
amortization
expenses
Interest expense 306
(income), net
Provision for 116
(benefit from)
income taxes
Loss (income) from 212
discontinued operations,
net of taxes
----------
Net income (loss) $ 1,191
==========
For the Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
June 30, 2011
--------------------------------------------------------------
Revenue, from $ 100,191 $ 86,143 $ 50,912 $ 10,132 $ -- $ 247,378
external
customers
==============================================================
Gross margin, $ 42,228 $ 30,534 $ 13,021 $ 9,684 $ -- $ 95,467
from external
customers
==============================================================
Business $ 396 $ -- $ -- $ -- $ -- $ 396
reorganization
and integration
expenses
(recovery)
Non-operating 2,390 1,375 678 920 (5,358) 5
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ 2,735 $ 3,037 $ 1,160 $ 773 $ (44) $ 7,661
Depreciation and 1,636
amortization
expenses
Interest expense 375
(income), net
Provision for 1,426
(benefit from)
income taxes
Loss (income) from --
discontinued operations,
net of taxes
----------
Net income (loss) $ 4,224
==========
--------------------------------------------------------------------------------
-
(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.
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
-
HUDSON HIGHLAND GROUP, INC.
--------------------------------------------------------------------------------
-
SEGMENT ANALYSIS - YEAR TO DATE
(in thousands)
(unaudited)
For The Nine Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2011
----------------------------------------------------------------
Revenue, from $ 290,656 $ 247,383 $ 144,415 $ 28,544 $ -- $ 710,998
external
customers
================================================================
Gross margin, $ 119,294 $ 85,992 $ 37,040 $ 27,331 $ -- $ 269,657
from external
customers
================================================================
Business $ 747 $ -- $ -- $ -- $ -- $ 747
reorganization
and
integration
expenses
(recovery)
Non-operating 5,873 3,840 1,758 1,438 (13,153) (244)
expense
(income),
including
corporate
administration
charges
----------------------------------------------------------------
EBITDA (Loss) $ 6,930 $ 8,011 $ 2,242 $ 3,034 $ (2,580) $ 17,637
(1)
Depreciation and 4,750
amortization expenses
Interest expense (income), 910
net
Provision for (benefit 4,377
from) income taxes
Loss (income) from discontinued --
operations, net of taxes
----------
Net income $ 7,600
(loss)
==========
For The Nine Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2010
----------------------------------------------------------------
Revenue, from $ 237,875 $ 195,045 $ 118,165 $ 24,396 $ -- $ 575,481
external
customers
================================================================
Gross margin, $ 99,722 $ 63,758 $ 28,643 $ 23,525 $ -- $ 215,648
from external
customers
================================================================
Goodwill and $ -- $ -- $ -- $ -- $ -- $ --
other
impairment
(recovery)
Business 536 (116) 285 -- -- 705
reorganization
and
integration
expenses
(recovery)
Non-operating 5,414 3,030 (523) 704 (11,312) (2,687)
expense
(income),
including
corporate
administration
charges
----------------------------------------------------------------
EBITDA (Loss) $ 771 $ 2,994 $ (699) $ 3,076 $ (3,196) $ 2,946
(1)
Depreciation and 6,453
amortization expenses
Interest expense (income), 972
net
Provision for (benefit 1,366
from) income taxes
Loss (income) from discontinued 31
operations, net of taxes
----------
Net income $ (5,876)
(loss)
==========
--------------------------------------------------------------------------------
-
(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.
--------------------------------------------------------------------------------
-
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-
HUDSON HIGHLAND GROUP, INC.
--------------------------------------------------------------------------------
-
Reconciliation For Constant Currency
(in thousands)
(unaudited)
The company operates on a global basis, with the majority of our gross margin
generated outside of the United States. Accordingly, fluctuations in foreign
currency exchange rates can affect our 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, direct costs, gross margin, and selling, general and
administrative expenses 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. Earnings from subsidiaries are rarely
repatriated to the United States, and 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 and not
the company's economic condition.
For The Three Months Ended September 30,
---------------------------------------------
2011 2010
---------------------------------------------
As As Currency Constant
reported reported translatio currency
n
---------------------------------------------
Revenue:
Hudson Europe $ 96,753 $ 80,503 $ 4,031 $ 84,534
Hudson ANZ 90,437 72,974 10,854 83,828
Hudson Americas 47,691 37,839 15 37,854
Hudson Asia 10,200 9,078 552 9,630
---------------------------------------------
Total 245,081 200,394 15,452 215,846
---------------------------------------------
Direct costs:
Hudson Europe 58,624 47,856 2,144 50,000
Hudson ANZ 58,998 48,715 7,374 56,089
Hudson Americas 34,029 28,528 -- 28,528
Hudson Asia 438 304 24 328
---------------------------------------------
Total 152,089 125,403 9,542 134,945
---------------------------------------------
Gross margin:
Hudson Europe 38,129 32,647 1,887 34,534
Hudson ANZ 31,439 24,259 3,480 27,739
Hudson Americas 13,662 9,311 15 9,326
Hudson Asia 9,762 8,774 528 9,302
---------------------------------------------
Total $ 92,992 $ 74,991 $ 5,910 $ 80,901
=============================================
Selling, general and
administrative (a):
Hudson Europe $ 34,630 $ 32,473 $ 2,000 $ 34,473
Hudson ANZ 26,759 22,083 3,463 25,546
Hudson Americas 11,970 9,572 18 9,590
Hudson Asia 8,114 7,224 455 7,679
Corporate 5,369 5,007 2 5,009
---------------------------------------------
Total $ 86,842 $ 76,359 $ 5,938 $ 82,297
=============================================
(a) Selling, general and administrative expenses include depreciation and
amortization expenses and insurance recovery.
CONTACT: David F. Kirby
Hudson Highland Group
212-351-7216
david.kirby@hudson.com
News Source: NASDAQ OMX
01.11.2011 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
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---------------------------------------------------------------------------
Language: English
Company: Hudson Highland Group, Inc.
United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US4437921061
WKN:
End of Announcement DGAP News-Service
---------------------------------------------------------------------------
Hudson Highland Group, Inc.
01.11.2011 12:00
---------------------------------------------------------------------------
NEW YORK, 2011-11-01 12:00 CET (GLOBE NEWSWIRE) --
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 third quarter ended
September 30, 2011.
2011 Third Quarter Summary
-- Revenue of $245.1 million, an increase of 22.3 percent over the third
quarter of 2010, or 13.5 percent in constant currency
-- Permanent recruitment revenue increased 22.7 percent from the prior year
quarter, or 13.3 percent in constant currency
-- Temporary contracting revenue increased 23.6 percent in the third quarter,
or 15.1 percent in constant currency
-- Gross margin of $93.0 million, or 37.9 percent of revenue, up 24.0 percent
from the same period last year, or 14.9 percent in constant currency
-- EBITDA* of $7.4 million, or 3.0 percent of revenue, improved from $1.2
million in the third quarter of 2010
-- Net income of $3.4 million, or $0.11 per basic and diluted share, compared
with a net loss of $1.9 million, or $0.06 per basic and diluted share, in
the third quarter of 2010
* EBITDA is defined in the segment tables at the end of this release and
includes other non-operating income.
'Our diversified portfolio of professional recruitment practices and global
presence supported the delivery of meaningful year-over-year growth during the
third quarter,' said Manuel Marquez, chairman and chief executive officer of
Hudson Highland Group. 'We are also encouraged by the continued momentum of our
legal and recruitment process outsourcing (RPO) solution businesses, two
practice areas specifically tailored to respond to the growing international
needs of our global clients.'
'We continued to make strides on profitability metrics in the third quarter,'
added Mary Jane Raymond, the company's chief financial officer. 'Our results
are starting to reflect steps we are taking to heighten productivity and
leverage, which should help offset the effects of challenging macro-economic
conditions.'
Regional Results
Regional results for the third quarter in constant currency were:
-- Europe gross margin increased 10.4 percent, led by 12.6 percent growth in
continental Europe and 8.6 percent growth in the U.K., compared with third
quarter 2010
-- Australia/New Zealand gross margin increased 13.3 percent compared with the
prior year period, led by 22.3 percent growth in permanent recruitment
-- Americas gross margin increased 46.5 percent compared with the prior year
period, driven by 32.6 percent growth in temporary contracting and
continued strong growth in permanent recruitment
-- Asia gross margin increased 4.9 percent compared with third quarter 2010
Liquidity and Capital Resources
The company ended the third quarter of 2011 with $72.2 million in liquidity,
composed of $22.5 million in cash and $49.7 million in availability under its
credit facilities. The company used $6.8 million in cash flow from operations
during the quarter and reduced its outstanding borrowings from $10.1 million at
the end of the second quarter to $6.6 million at the end of the third quarter.
Guidance
The company currently expects fourth quarter 2011 revenue of $225 - $240
million and EBITDA of $6 - $9 million at prevailing exchange rates. This
compares with revenue of $219.1 million and EBITDA of $3.6 million in the
fourth quarter of 2010.
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 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
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 more
than 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; 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; 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; risks in collecting the company's accounts receivable; the
company's history of negative cash flows and operating losses may continue;
restrictions on the company's operating flexibility due to the terms of its
credit facilities; the company's ability to refinance its existing AUD 17
million finance agreement with the Commonwealth Bank of Australia prior to the
December 5, 2011 termination date of the existing agreement; 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; risks related to our dependence on uninterrupted service
to clients; the company's exposure to employment-related claims from both
clients and employers and limits on related insurance coverage; 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 HIGHLAND GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------
2011 2010 2011 2010
-------------------------------------------
Revenue $ 245,081 $ 200,394 $ 710,998 $ 575,481
Direct costs 152,089 125,403 441,341 359,833
-------------------------------------------
Gross margin 92,992 74,991 269,657 215,648
-------------------------------------------
Operating expenses:
Selling, general and 85,305 74,378 251,517 214,121
administrative expenses
Depreciation and amortization 1,537 1,981 4,750 6,453
Business reorganization and -- 41 747 705
integration expenses
-------------------------------------------
Total operating expenses 86,842 76,400 257,014 221,279
-------------------------------------------
Operating income (loss) 6,150 (1,409) 12,643 (5,631)
Other (expense) income:
Interest, net (328) (497) (910) (972)
Other, net (238) 1,184 244 2,687
Fee for early extinguishment of -- (563) -- (563)
credit facility
-------------------------------------------
Income (loss) from continuing 5,584 (1,285) 11,977 (4,479)
operations before provision for
income taxes
Provision for (benefit from) income 2,202 599 4,377 1,366
taxes
-------------------------------------------
Income (loss) from continuing 3,382 (1,884) 7,600 (5,845)
operations
Income (loss) from discontinued -- (14) -- (31)
operations, net of income taxes
-------------------------------------------
Net income (loss) $ 3,382 $ (1,898) $ 7,600 $ (5,876)
===========================================
Basic earnings (loss) per share:
Income (loss) from continuing $ 0.11 $ (0.06) $ 0.24 $ (0.20)
operations
Income (loss) from discontinued -- (0.00) -- (0.00)
operations
-------------------------------------------
Net income (loss) $ 0.11 $ (0.06) $ 0.24 $ (0.20)
===========================================
Diluted earnings (loss) per share:
Income (loss) from continuing $ 0.11 $ (0.06) $ 0.24 $ (0.20)
operations
Income (loss) from discontinued -- (0.00) -- (0.00)
operations
-------------------------------------------
Net income (loss) $ 0.11 $ (0.06) $ 0.24 $ (0.20)
===========================================
Weighted average shares outstanding:
Basic 31,620 31,225 31,541 29,493
Diluted 32,085 31,225 31,988 29,493
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-
HUDSON HIGHLAND GROUP, INC.
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-
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
September December
30, 31,
2011 2010
---------------------
ASSETS
Current assets:
Cash and cash equivalents $ 22,482 $ 29,523
Accounts receivable, less allowance for doubtful accounts 151,517 128,576
of $1,973 and $2,145, respectively
Prepaid and other 12,501 13,988
---------------------
Total current assets 186,500 172,087
Property and equipment, net 17,126 16,593
Other assets 16,561 17,154
---------------------
Total assets $ 220,187 $ 205,834
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,500 $ 14,812
Accrued expenses and other current liabilities 80,709 74,990
Short-term borrowings 6,561 1,339
Accrued business reorganization expenses 1,200 2,619
---------------------
Total current liabilities 98,970 93,760
Other non-current liabilities 10,955 10,493
Income tax payable, non-current 8,272 8,303
---------------------
Total liabilities 118,197 112,556
=====================
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; 33 32
issued 32,922 and 32,181 shares, respectively
Additional paid-in capital 470,005 466,582
Accumulated deficit (400,599) (408,199)
Accumulated other comprehensive income--translation 32,943 34,902
adjustments
Treasury stock, 71 and 9 shares, respectively, at cost (392) (39)
---------------------
Total stockholders' equity 101,990 93,278
---------------------
Total liabilities and stockholders' equity $ 220,187 $ 205,834
=====================
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-
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HUDSON HIGHLAND GROUP, INC.
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-
SEGMENT ANALYSIS - QUARTER TO DATE
(in thousands)
(unaudited)
For The Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2011
--------------------------------------------------------------
Revenue, from $ 96,753 $ 90,437 $ 47,691 $ 10,200 $ -- $ 245,081
external
customers
==============================================================
Gross margin, $ 38,129 $ 31,439 $ 13,662 $ 9,762 $ -- $ 92,992
from external
customers
==============================================================
Business $ -- $ -- $ -- $ -- $ -- $ --
reorganization
and integration
expenses
(recovery)
Non-operating 1,873 1,421 497 427 (3,980) 238
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ 2,020 $ 3,934 $ 1,459 $ 1,289 $ (1,253) $ 7,449
Depreciation and 1,537
amortization
expenses
Interest expense 328
(income), net
Provision for 2,202
(benefit from)
income taxes
Loss (income) from --
discontinued operations,
net of taxes
----------
Net income (loss) $ 3,382
==========
For The Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2010
--------------------------------------------------------------
Revenue, from $ 80,503 $ 72,974 $ 37,839 $ 9,078 $ -- $ 200,394
external
customers
==============================================================
Gross margin, $ 32,647 $ 24,259 $ 9,311 $ 8,774 $ -- $ 74,991
from external
customers
==============================================================
Business $ -- $ -- $ 41 $ -- $ -- $ 41
reorganization
and integration
expenses
(recovery)
Non-operating 3,088 1,433 (407) 478 (5,776) (1,184)
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ (2,128) $ 1,376 $ 532 $ 1,169 $ 244 $ 1,193
Depreciation and 1,981
amortization
expenses
Interest expense 497
(income), net
Provision for 599
(benefit from)
income taxes
Loss (income) from 14
discontinued operations,
net of taxes
----------
Net income (loss) $ (1,898)
==========
For the Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
December 31,
2010
--------------------------------------------------------------
Revenue, from $ 90,616 $ 74,338 $ 44,268 $ 9,839 $ -- $ 219,061
external
customers
==============================================================
Gross margin, $ 37,468 $ 25,231 $ 10,775 $ 9,450 $ -- $ 82,924
from external
customers
==============================================================
Business $ 865 $ 102 $ 21 $ -- $ -- $ 988
reorganization
and integration
expenses
(recovery)
Non-operating 1,337 886 (1,298) 243 (2,979) (1,811)
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ 314 $ 1,254 $ 2,386 $ 1,523 $ (1,921) $ 3,556
Depreciation and 1,730
amortization
expenses
Interest expense 306
(income), net
Provision for 116
(benefit from)
income taxes
Loss (income) from 212
discontinued operations,
net of taxes
----------
Net income (loss) $ 1,191
==========
For the Three Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
June 30, 2011
--------------------------------------------------------------
Revenue, from $ 100,191 $ 86,143 $ 50,912 $ 10,132 $ -- $ 247,378
external
customers
==============================================================
Gross margin, $ 42,228 $ 30,534 $ 13,021 $ 9,684 $ -- $ 95,467
from external
customers
==============================================================
Business $ 396 $ -- $ -- $ -- $ -- $ 396
reorganization
and integration
expenses
(recovery)
Non-operating 2,390 1,375 678 920 (5,358) 5
expense
(income),
including
corporate
administration
charges
--------------------------------------------------------------
EBITDA (Loss) (1) $ 2,735 $ 3,037 $ 1,160 $ 773 $ (44) $ 7,661
Depreciation and 1,636
amortization
expenses
Interest expense 375
(income), net
Provision for 1,426
(benefit from)
income taxes
Loss (income) from --
discontinued operations,
net of taxes
----------
Net income (loss) $ 4,224
==========
--------------------------------------------------------------------------------
-
(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.
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
-
HUDSON HIGHLAND GROUP, INC.
--------------------------------------------------------------------------------
-
SEGMENT ANALYSIS - YEAR TO DATE
(in thousands)
(unaudited)
For The Nine Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2011
----------------------------------------------------------------
Revenue, from $ 290,656 $ 247,383 $ 144,415 $ 28,544 $ -- $ 710,998
external
customers
================================================================
Gross margin, $ 119,294 $ 85,992 $ 37,040 $ 27,331 $ -- $ 269,657
from external
customers
================================================================
Business $ 747 $ -- $ -- $ -- $ -- $ 747
reorganization
and
integration
expenses
(recovery)
Non-operating 5,873 3,840 1,758 1,438 (13,153) (244)
expense
(income),
including
corporate
administration
charges
----------------------------------------------------------------
EBITDA (Loss) $ 6,930 $ 8,011 $ 2,242 $ 3,034 $ (2,580) $ 17,637
(1)
Depreciation and 4,750
amortization expenses
Interest expense (income), 910
net
Provision for (benefit 4,377
from) income taxes
Loss (income) from discontinued --
operations, net of taxes
----------
Net income $ 7,600
(loss)
==========
For The Nine Hudson Hudson Hudson Hudson Corporate Total
Months Ended Europe ANZ Americas Asia
September 30,
2010
----------------------------------------------------------------
Revenue, from $ 237,875 $ 195,045 $ 118,165 $ 24,396 $ -- $ 575,481
external
customers
================================================================
Gross margin, $ 99,722 $ 63,758 $ 28,643 $ 23,525 $ -- $ 215,648
from external
customers
================================================================
Goodwill and $ -- $ -- $ -- $ -- $ -- $ --
other
impairment
(recovery)
Business 536 (116) 285 -- -- 705
reorganization
and
integration
expenses
(recovery)
Non-operating 5,414 3,030 (523) 704 (11,312) (2,687)
expense
(income),
including
corporate
administration
charges
----------------------------------------------------------------
EBITDA (Loss) $ 771 $ 2,994 $ (699) $ 3,076 $ (3,196) $ 2,946
(1)
Depreciation and 6,453
amortization expenses
Interest expense (income), 972
net
Provision for (benefit 1,366
from) income taxes
Loss (income) from discontinued 31
operations, net of taxes
----------
Net income $ (5,876)
(loss)
==========
--------------------------------------------------------------------------------
-
(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.
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
-
HUDSON HIGHLAND GROUP, INC.
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-
Reconciliation For Constant Currency
(in thousands)
(unaudited)
The company operates on a global basis, with the majority of our gross margin
generated outside of the United States. Accordingly, fluctuations in foreign
currency exchange rates can affect our 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, direct costs, gross margin, and selling, general and
administrative expenses 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. Earnings from subsidiaries are rarely
repatriated to the United States, and 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 and not
the company's economic condition.
For The Three Months Ended September 30,
---------------------------------------------
2011 2010
---------------------------------------------
As As Currency Constant
reported reported translatio currency
n
---------------------------------------------
Revenue:
Hudson Europe $ 96,753 $ 80,503 $ 4,031 $ 84,534
Hudson ANZ 90,437 72,974 10,854 83,828
Hudson Americas 47,691 37,839 15 37,854
Hudson Asia 10,200 9,078 552 9,630
---------------------------------------------
Total 245,081 200,394 15,452 215,846
---------------------------------------------
Direct costs:
Hudson Europe 58,624 47,856 2,144 50,000
Hudson ANZ 58,998 48,715 7,374 56,089
Hudson Americas 34,029 28,528 -- 28,528
Hudson Asia 438 304 24 328
---------------------------------------------
Total 152,089 125,403 9,542 134,945
---------------------------------------------
Gross margin:
Hudson Europe 38,129 32,647 1,887 34,534
Hudson ANZ 31,439 24,259 3,480 27,739
Hudson Americas 13,662 9,311 15 9,326
Hudson Asia 9,762 8,774 528 9,302
---------------------------------------------
Total $ 92,992 $ 74,991 $ 5,910 $ 80,901
=============================================
Selling, general and
administrative (a):
Hudson Europe $ 34,630 $ 32,473 $ 2,000 $ 34,473
Hudson ANZ 26,759 22,083 3,463 25,546
Hudson Americas 11,970 9,572 18 9,590
Hudson Asia 8,114 7,224 455 7,679
Corporate 5,369 5,007 2 5,009
---------------------------------------------
Total $ 86,842 $ 76,359 $ 5,938 $ 82,297
=============================================
(a) Selling, general and administrative expenses include depreciation and
amortization expenses and insurance recovery.
CONTACT: David F. Kirby
Hudson Highland Group
212-351-7216
david.kirby@hudson.com
News Source: NASDAQ OMX
01.11.2011 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
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Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: Hudson Highland Group, Inc.
United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US4437921061
WKN:
End of Announcement DGAP News-Service
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