Press Release Details
Hudson Global Reports 2014 Third Quarter Results and Announces Sale of Legal eDiscovery Business to DTI
DTI paid
2014 Third Quarter Summary
With the sale of its Legal eDiscovery business, and the previously reported cessation of direct operations in
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Revenue from continuing operations of
$149.3 million , up 7.2 percent from the third quarter of 2013, or 4.3 percent in constant currency.
-
Gross margin from continuing operations of
$55.7 million , an increase of 10.3 percent from the third quarter of 2013, or 8.3 percent in constant currency.
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Adjusted EBITDA* loss from continuing operations of
$2.9 million , an improvement of 30.9 percent or 31.1 percent in constant currency, as compared with a loss of$4.1 million in the same period last year.
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Restructuring charges from continuing operations of
$0.8 million in the third quarter of 2014, as compared with$0.6 million in the third quarter of 2013.
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Net loss** of
$7.0 million , or$0.21 per basic and diluted share, as compared with net loss of$5.0 million , or$0.15 per basic and diluted share in the same period last year.
* Adjusted EBITDA is defined in the segment tables at the end of this release.
** Net income/loss includes continuing and discontinued operations.
Year-over-year gross margin growth in the
"Having successfully sold our Legal eDiscovery business, we are narrowing our focus and enhancing our ability to deliver improved results from our core business lines," said
Strategic Actions
The divestiture of the Legal eDiscovery business is an important component of the company's previously announced strategic efforts to focus on its core business lines and growth opportunities. In the short-term, the company will have certain support costs remaining in its existing
During the third quarter, the company also implemented some of the changes associated with its engagement of
Regional Highlights
Liquidity and Capital Resources
The company ended the third quarter of 2014 with
Business Outlook
Given current economic conditions, and in particular the significant weakening of the EuroZone economy, the company expects fourth quarter 2014 revenue of between
Conference Call/Webcast
Hudson will conduct a conference call today at
The archived call will be available on the investor information section of the company's web site at Hudson.com.
About Hudson
Hudson is a global talent solutions company with expertise in leadership and specialized recruitment, recruitment process outsourcing, talent management and contracting solutions. We help our clients and candidates succeed by leveraging our expertise, deep industry and market knowledge, and proprietary assessment tools and techniques. Operating in nearly 20 countries through relationships with millions of specialized professionals, we bring an unparalleled ability to match talent with opportunities by assessing, recruiting, developing and engaging the best and brightest people for our clients. We combine broad geographic presence, world-class talent solutions and a tailored, consultative approach to help businesses and professionals achieve higher performance and outstanding results. More information is available at Hudson.com.
Forward-Looking Statements
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 company's ability to successfully achieve its strategic initiatives; 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; the company's ability to collect accounts receivable; the negative cash flows and operating losses that the company has experienced in recent periods and may experience from time to time in the future; restrictions on the company's operating flexibility due to the terms of its credit facilities; the company's ability to achieve anticipated cost savings through its cost reduction initiatives; 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; restrictions imposed by blocking arrangements; risks related to activist stockholders; and risks related to limited availability under the company's credit facilities. Additional information concerning these and other factors is contained in the company's filings with the
Financial Tables Follow
HUDSON GLOBAL, INC. | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(in thousands, except per share amounts) | ||||
(unaudited) | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||
2014 | 2013 | 2014 | 2013 | |
Revenue | $ 149,278 | $ 139,287 | $ 444,515 | $ 422,573 |
Direct costs | 93,591 | 88,796 | 274,927 | 265,982 |
Gross margin | 55,687 | 50,491 | 169,588 | 156,591 |
Operating expenses: | ||||
Selling, general and administrative expenses | 58,539 | 54,614 | 174,672 | 169,039 |
Depreciation and amortization | 1,467 | 1,408 | 4,242 | 4,461 |
Business reorganization expenses | 794 | 594 | 2,026 | 3,803 |
Total operating expenses | 60,800 | 56,616 | 180,940 | 177,303 |
Operating income (loss) | (5,113) | (6,125) | (11,352) | (20,712) |
Non-operating income (expense): | ||||
Interest income (expense), net | (192) | (146) | (533) | (422) |
Other income (expense), net | 176 | 294 | (325) | 475 |
Income (loss) from continuing operations before provision for income taxes | (5,129) | (5,977) | (12,210) | (20,659) |
Provision for (benefit from) income taxes | (558) | (392) | 37 | (775) |
Income (loss) from continuing operations | (4,571) | (5,585) | (12,247) | (19,884) |
Income (loss) from discontinued operations, net of income taxes | (2,448) | 538 | (3,690) | 785 |
Net income (loss) | $ (7,019) | $ (5,047) | $ (15,937) | $ (19,099) |
Earnings (loss) per share: | ||||
Basic and diluted | ||||
Income (loss) from continuing operations | $ (0.14) | $ (0.17) | $ (0.38) | $ (0.61) |
Income (loss) from discontinued operations | (0.07) | 0.02 | (0.11) | 0.02 |
Net income (loss) | $ (0.21) | $ (0.15) | $ (0.49) | $ (0.59) |
Weighted-average shares outstanding: | ||||
Basic | 32,910 | 32,600 | 32,769 | 32,468 |
Diluted | 32,910 | 32,600 | 32,769 | 32,468 |
HUDSON GLOBAL, INC. | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(in thousands) | ||
(unaudited) | ||
September 30, 2014 |
December 31, 2013 |
|
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 18,753 | $ 37,378 |
Accounts receivable, less allowance for doubtful accounts of $1,065 and $1,041, respectively | 83,116 | 76,467 |
Prepaid and other | 8,753 | 7,960 |
Current assets of discontinued operations | 13,310 | 12,518 |
Total current assets | 123,932 | 134,323 |
Property and equipment, net | 12,031 | 11,989 |
Deferred tax assets, non-current | 6,134 | 7,124 |
Other assets | 4,927 | 5,393 |
Total assets | $ 147,024 | $ 158,829 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 5,888 | $ 8,899 |
Accrued expenses and other current liabilities | 52,347 | 51,917 |
Short-term borrowings | 8,217 | 476 |
Accrued business reorganization expenses | 2,430 | 3,275 |
Current liabilities of discontinued operations | 5,762 | 5,251 |
Total current liabilities | 74,644 | 69,818 |
Deferred rent and tenant improvement contributions | 6,328 | 5,333 |
Income tax payable, non-current | 2,468 | 3,872 |
Other non-current liabilities | 5,297 | 5,421 |
Total liabilities | 88,737 | 84,444 |
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 33,240 and 33,543 shares, respectively | 34 | 34 |
Additional paid-in capital | 476,271 | 475,461 |
Accumulated deficit | (433,359) | (417,422) |
Accumulated other comprehensive income | 15,797 | 17,173 |
Treasury stock, 127 and 211 shares, respectively, at cost | (456) | (861) |
Total stockholders' equity | 58,287 | 74,385 |
Total liabilities and stockholders' equity | $ 147,024 | $ 158,829 |
HUDSON GLOBAL, INC. | |||||
SEGMENT ANALYSIS - QUARTER TO DATE | |||||
(in thousands) | |||||
(unaudited) | |||||
For The Three Months Ended September 30, 2014 |
Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total |
Revenue, from external customers | $ 13,036 | $ 66,990 | $ 69,252 | $ — | $ 149,278 |
Gross margin, from external customers | $ 5,570 | $ 24,654 | $ 25,463 | $ — | $ 55,687 |
Adjusted EBITDA (loss) (1) | $ 738 | $ 616 | $ (288) | $ (3,917) | $ (2,851) |
Business reorganization expenses (recovery) | — | 140 | 421 | 233 | 794 |
Non-operating expense (income), including corporate administration charges | 705 | 226 | 1,583 | (2,689) | (175) |
EBITDA (loss) (1) | $ 33 | $ 250 | $ (2,292) | $ (1,461) | $ (3,470) |
Depreciation and amortization expenses | 1,467 | ||||
Interest expense (income), net | 192 | ||||
Provision for (benefit from) income taxes | (558) | ||||
Net income (loss) from continuing operations | $ (4,571) | ||||
For The Three Months Ended September 30, 2013 |
Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total |
Revenue, from external customers | $ 12,760 | $ 58,274 | $ 68,253 | $ — | $ 139,287 |
Gross margin, from external customers | $ 4,682 | $ 21,348 | $ 24,461 | $ — | $ 50,491 |
Adjusted EBITDA (loss) (1) | $ 126 | $ (460) | $ 368 | $ (4,157) | $ (4,123) |
Business reorganization expenses (recovery) | 74 | — | 152 | 368 | 594 |
Office integration expense and (gains) on disposal of business | — | — | — | — | — |
Non-operating expense (income), including corporate administration charges | 432 | (335) | 913 | (1,304) | (294) |
EBITDA (loss) (1) | $ (380) | $ (125) | $ (697) | $ (3,221) | $ (4,423) |
Depreciation and amortization expenses | 1,408 | ||||
Interest expense (income), net | 146 | ||||
Provision for (benefit from) income taxes | (392) | ||||
Net income (loss) from continuing operations | $ (5,585) | ||||
(1) 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, goodwill and other impairment charges, business reorganization expenses and other expenses ("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. |
HUDSON GLOBAL, INC. | |||||
SEGMENT ANALYSIS - QUARTER TO DATE (continued) | |||||
(in thousands) | |||||
(unaudited) | |||||
For The Three Months Ended June 30, 2014 |
Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total |
Revenue, from external customers | $ 13,158 | $ 65,101 | $ 72,811 | $ — | $ 151,070 |
Gross margin, from external customers | $ 5,393 | $ 24,519 | $ 29,959 | $ — | $ 59,871 |
Adjusted EBITDA (loss) (1) | $ 843 | $ 996 | $ 2,678 | $ (4,860) | $ (343) |
Business reorganization expenses (recovery) | 3 | 1,115 | — | — | 1,118 |
Non-operating expense (income), including corporate administration charges | 741 | 462 | 1,566 | (2,463) | 306 |
EBITDA (loss) (1) | $ 99 | $ (581) | $ 1,112 | $ (2,397) | $ (1,767) |
Depreciation and amortization expenses | 1,404 | ||||
Interest expense (income), net | 202 | ||||
Provision for (benefit from) income taxes | 193 | ||||
Net income (loss) from continuing operations | $ (3,566) | ||||
For The Three Months Ended December 31, 2013 |
Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total |
Revenue, from external customers | $ 12,348 | $ 55,404 | $ 72,247 | $ — | $ 139,999 |
Gross margin, from external customers | $ 4,894 | $ 20,045 | $ 27,899 | $ — | $ 52,838 |
Adjusted EBITDA (loss) (1) | $ 1,235 | $ (1,272) | $ 953 | $ (2,924) | $ (2,008) |
Business reorganization expenses (recovery) | 88 | 887 | 635 | 29 | 1,639 |
Non-operating expense (income), including corporate administration charges | 714 | 299 | 2,550 | (2,514) | 1,049 |
EBITDA (loss) (1) | $ 433 | $ (2,458) | $ (2,232) | $ (439) | $ (4,696) |
Depreciation and amortization expenses | 1,461 | ||||
Interest expense (income), net | 132 | ||||
Provision for (benefit from) income taxes | 4,039 | ||||
Net income (loss) from continuing operations | $ (10,328) | ||||
(1) 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, goodwill and other impairment charges, business reorganization expenses and other expenses ("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. |
HUDSON GLOBAL, INC. | |||||
SEGMENT ANALYSIS - YEAR TO DATE (continued) | |||||
(in thousands) | |||||
(unaudited) | |||||
For The Nine Months Ended September 30, 2014 |
Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total |
Revenue, from external customers | $ 38,437 | $ 188,522 | $ 217,556 | $ — | $ 444,515 |
Gross margin, from external customers | $ 15,464 | $ 70,083 | $ 84,041 | $ — | $ 169,588 |
Adjusted EBITDA (loss) (1) | $ 1,585 | $ 1,724 | $ 4,274 | $ (12,667) | $ (5,084) |
Business reorganization expenses (recovery) | 93 | 1,255 | 444 | 234 | 2,026 |
Non-operating expense (income), including corporate administration charges | 1,818 | 1,104 | 4,321 | (6,918) | 325 |
EBITDA (loss) (1) | $ (326) | $ (635) | $ (491) | $ (5,983) | $ (7,435) |
Depreciation and amortization expenses | 4,242 | ||||
Interest expense (income), net | 533 | ||||
Provision for (benefit from) income taxes | 37 | ||||
Net income (loss) from continuing operations | $ (12,247) | ||||
For The Nine Months Ended September 30, 2013 |
Hudson Americas |
Hudson Asia Pacific |
Hudson Europe |
Corporate | Total |
Revenue, from external customers | $ 39,509 | $ 177,344 | $ 205,720 | $ — | $ 422,573 |
Gross margin, from external customers | $ 13,798 | $ 67,117 | $ 75,676 | $ — | $ 156,591 |
Adjusted EBITDA (loss) (1) | $ 1,080 | $ (175) | $ (319) | $ (13,027) | $ (12,441) |
Business reorganization expenses (recovery) | 360 | 102 | 2,579 | 762 | 3,803 |
Office integration expense and (gains) on disposal of business | 6 | — | — | — | 6 |
Non-operating expense (income), including corporate administration charges | 1,862 | 495 | 4,065 | (6,896) | (474) |
EBITDA (loss) (1) | $ (1,148) | $ (772) | $ (6,963) | $ (6,893) | $ (15,776) |
Depreciation and amortization expenses | 4,461 | ||||
Interest expense (income), net | 422 | ||||
Provision for (benefit from) income taxes | (775) | ||||
Net income (loss) from continuing operations | $ (19,884) | ||||
(1) 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, goodwill and other impairment charges, business reorganization expenses and other expenses ("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. |
HUDSON GLOBAL, INC. | ||||
RECONCILIATION FOR CONSTANT CURRENCY | ||||
(in thousands) (unaudited) | ||||
The company operates on a global basis, with the majority of its gross margin 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, gross margin, selling, general and administrative expenses ("SG&A"), business reorganization expenses 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. | ||||
Three Months Ended September 30, | ||||
2014 | 2013 | |||
As reported |
As reported |
Currency translation |
Constant currency |
|
Revenue: | ||||
Hudson Americas | $ 13,036 | $ 12,760 | $ (15) | $ 12,745 |
Hudson Asia Pacific | 66,990 | 58,274 | 682 | 58,956 |
Hudson Europe | 69,252 | 68,253 | 3,159 | 71,412 |
Total | $ 149,278 | $ 139,287 | $ 3,826 | $ 143,113 |
Gross margin: | ||||
Hudson Americas | $ 5,570 | $ 4,682 | $ (15) | $ 4,667 |
Hudson Asia Pacific | 24,654 | 21,348 | 170 | 21,518 |
Hudson Europe | 25,463 | 24,461 | 752 | 25,213 |
Total | $ 55,687 | $ 50,491 | $ 907 | $ 51,398 |
SG&A (1): | ||||
Hudson Americas | $ 4,835 | $ 4,556 | $ (7) | $ 4,549 |
Hudson Asia Pacific | 23,981 | 21,781 | 257 | 22,038 |
Hudson Europe | 25,806 | 24,119 | 676 | 24,795 |
Corporate | 3,917 | 4,158 | — | 4,158 |
Total | $ 58,539 | $ 54,614 | $ 926 | $ 55,540 |
Business reorganization expenses: | ||||
Hudson Americas | $ — | $ 74 | $ — | $ 74 |
Hudson Asia Pacific | 140 | — | — | — |
Hudson Europe | 421 | 152 | 3 | 155 |
Corporate | 233 | 368 | — | 368 |
Total | $ 794 | $ 594 | $ 3 | $ 597 |
Operating income (loss): | ||||
Hudson Americas | $ 601 | $ (71) | $ (7) | $ (78) |
Hudson Asia Pacific | (442) | (1,217) | (97) | (1,314) |
Hudson Europe | (1,010) | (150) | 58 | (92) |
Corporate | (4,262) | (4,687) | — | (4,687) |
Total | $ (5,113) | $ (6,125) | $ (46) | $ (6,171) |
EBITDA (loss): | ||||
Hudson Americas | $ 33 | $ (380) | $ (7) | $ (387) |
Hudson Asia Pacific | 250 | (125) | (83) | (208) |
Hudson Europe | (2,292) | (697) | 69 | (628) |
Corporate | (1,461) | (3,221) | — | (3,221) |
Total | $ (3,470) | $ (4,423) | $ (21) | $ (4,444) |
(1) SG&A is a measure that management uses to evaluate the segments' expenses. |
HUDSON GLOBAL, INC. | ||||
RECONCILIATION FOR CONSTANT CURRENCY (Continued) | ||||
(in thousands) (unaudited) | ||||
Nine Months Ended September 30, | ||||
2014 | 2013 | |||
As reported |
As reported |
Currency translation |
Constant currency |
|
Revenue: | ||||
Hudson Americas | $ 38,437 | $ 39,509 | $ (50) | $ 39,459 |
Hudson Asia Pacific | 188,522 | 177,344 | (6,622) | 170,722 |
Hudson Europe | 217,556 | 205,720 | 12,385 | 218,105 |
Total | $ 444,515 | $ 422,573 | $ 5,713 | $ 428,286 |
Gross margin: | ||||
Hudson Americas | $ 15,464 | $ 13,798 | $ (47) | $ 13,751 |
Hudson Asia Pacific | 70,083 | 67,117 | (2,223) | 64,894 |
Hudson Europe | 84,041 | 75,676 | 3,789 | 79,465 |
Total | $ 169,588 | $ 156,591 | $ 1,519 | $ 158,110 |
SG&A (1): | ||||
Hudson Americas | $ 13,914 | $ 12,721 | $ (42) | $ 12,679 |
Hudson Asia Pacific | 68,236 | 67,221 | (2,319) | 64,902 |
Hudson Europe | 79,857 | 76,080 | 3,597 | 79,677 |
Corporate | 12,665 | 13,017 | — | 13,017 |
Total | $ 174,672 | $ 169,039 | $ 1,236 | $ 170,275 |
Business reorganization expenses: | ||||
Hudson Americas | $ 93 | $ 360 | $ — | $ 360 |
Hudson Asia Pacific | 1,255 | 102 | (8) | 94 |
Hudson Europe | 444 | 2,579 | 144 | 2,723 |
Corporate | 234 | 762 | — | 762 |
Total | $ 2,026 | $ 3,803 | $ 136 | $ 3,939 |
Operating income (loss): | ||||
Hudson Americas | $ 1,131 | $ 340 | $ (5) | $ 335 |
Hudson Asia Pacific | (1,997) | (2,690) | 215 | (2,475) |
Hudson Europe | 2,824 | (4,086) | (20) | (4,106) |
Corporate | (13,310) | (14,276) | — | (14,276) |
Total | $ (11,352) | $ (20,712) | $ 190 | $ (20,522) |
EBITDA (loss): | ||||
Hudson Americas | $ (326) | $ (1,148) | $ 5 | $ (1,143) |
Hudson Asia Pacific | (635) | (772) | 103 | (669) |
Hudson Europe | (491) | (6,963) | (214) | (7,177) |
Corporate | (5,983) | (6,893) | — | (6,893) |
Total | $ (7,435) | $ (15,776) | $ (106) | $ (15,882) |
(1) SG&A is a measure that management uses to evaluate the segments' expenses. |
HUDSON GLOBAL, INC. | ||||||
DISCONTINUED OPERATIONS RECONCILIATION | ||||||
(in thousands) (unaudited) | ||||||
On July 29, 2014, the company's management and Board of Directors approved a plan for the divestiture of the company's Legal eDiscovery business within the Hudson Americas and Hudson Europe segments. Subsequently, the company has entered into an asset purchase agreement to divest the Legal eDiscovery business on November 7, 2014. Based on the terms of the asset purchase agreement, the company will not have any significant continuing involvement in the operations of the Legal eDiscovery business after the disposal transaction. In addition, other than providing short term transition services, the company expects that continuing cash flows will be eliminated within one year. | ||||||
In addition, the company decided to cease direct operations in Sweden within the Hudson Europe segment during the current quarter. | ||||||
Reported results for the discontinued operations by period were as follows: | ||||||
Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 | |||||
eDiscovery | Sweden | Total | eDiscovery | Sweden | Total | |
Revenue | $ 13,812 | $ 214 | $ 14,026 | $ 23,707 | $ 593 | $ 24,300 |
Gross Margin | $ 2,007 | $ 55 | $ 2,062 | $ 4,925 | $ 381 | $ 5,306 |
EBITDA (loss) | $ (1,915) | $ (721) | $ (2,636) | $ 1,372 | $ (266) | $ 1,106 |
Other non-operating income (expense) | — | (8) | (8) | — | — | — |
Depreciation and amortization expense | 42 | — | 42 | 120 | — | 120 |
Operating income (loss) | $ (1,957) | $ (713) | $ (2,670) | $ 1,252 | $ (266) | $ 986 |
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | |||||
eDiscovery | Sweden | Total | eDiscovery | Sweden | Total | |
Revenue | $ 46,513 | $ 1,502 | $ 48,015 | $ 76,107 | $ 1,944 | $ 78,051 |
Gross Margin | $ 7,647 | $ 855 | $ 8,502 | $ 14,949 | $ 1,438 | $ 16,387 |
EBITDA (loss) | $ (2,182) | $ (1,116) | $ (3,298) | $ 2,743 | $ (767) | $ 1,976 |
Other non-operating income (expense) | — | (28) | (28) | — | (3) | (3) |
Depreciation and amortization expense | 270 | — | 270 | 370 | 2 | 372 |
Operating income (loss) | $ (2,452) | $ (1,088) | $ (3,540) | $ 2,373 | $ (766) | $ 1,607 |
HUDSON GLOBAL, INC. | ||||||
DISCONTINUED OPERATIONS RECONCILIATION (continued) | ||||||
(in thousands) (unaudited) | ||||||
Three Months Ended June 30, 2014 | Three Months Ended March 31, 2014 | |||||
eDiscovery | Sweden | Total | eDiscovery | Sweden | Total | |
Revenue | $ 15,691 | $ 604 | $ 16,295 | $ 17,010 | $ 684 | $ 17,694 |
Gross Margin | $ 2,598 | $ 343 | $ 2,941 | $ 3,041 | $ 457 | $ 3,498 |
EBITDA (loss) | $ (258) | $ (215) | $ (473) | $ (10) | $ (180) | $ (190) |
Other non-operating income (expense) | — | (16) | (16) | — | (4) | (4) |
Depreciation and amortization expense | 110 | — | 110 | 118 | — | 118 |
Operating income (loss) | $ (368) | $ (199) | $ (567) | $ (128) | $ (176) | $ (304) |
Three Months Ended December 31, 2013 | Three Months Ended September 30, 2013 | |||||
eDiscovery | Sweden | Total | eDiscovery | Sweden | Total | |
Revenue | $ 18,632 | $ 873 | $ 19,505 | $ 23,707 | $ 593 | $ 24,300 |
Gross Margin | $ 3,311 | $ 747 | $ 4,058 | $ 4,925 | $ 381 | $ 5,306 |
EBITDA (loss) | $ (558) | $ (544) | $ (1,102) | $ 1,372 | $ (266) | $ 1,106 |
Other non-operating income (expense) | (6) | 1 | (5) | — | — | — |
Depreciation and amortization expense | 111 | — | 111 | 120 | — | 120 |
Operating income (loss) | $ (663) | $ (545) | $ (1,208) | $ 1,252 | $ (266) | $ 986 |
Three Months Ended June 30, 2013 | Three Months Ended March 31, 2013 | |||||
eDiscovery | Sweden | Total | eDiscovery | Sweden | Total | |
Revenue | $ 25,305 | $ 671 | $ 25,976 | $ 27,094 | $ 679 | $ 27,773 |
Gross Margin | $ 4,874 | $ 523 | $ 5,397 | $ 5,149 | $ 533 | $ 5,682 |
EBITDA (loss) | $ 855 | $ (212) | $ 643 | $ 516 | $ (291) | $ 225 |
Other non-operating income (expense) | 2 | — | 2 | — | (2) | (2) |
Depreciation and amortization expense | 120 | — | 120 | 130 | 2 | 132 |
Operating income (loss) | $ 733 | $ (212) | $ 521 | $ 386 | $ (291) | $ 95 |
CONTACT:David F. Kirby Hudson 212-351-7216 david.kirby@hudson.com