Hudson Global Reports 2024 First Quarter Results
2024 First Quarter Summary
- Revenue of
$33.9 million decreased 21.3% from the first quarter of 2023 and 20.1% in constant currency. - Adjusted net revenue of
$16.3 million decreased 25.0% from the first quarter of 2023 and 24.6% in constant currency. - Net loss was
$2.9 million , or$0.95 per diluted share, compared to net income of$0.4 million , or$0.11 per diluted share, for the first quarter of 2023. Adjusted net loss per diluted share (non-GAAP measure)* was$0.72 compared to adjusted net income per diluted share of$0.22 in the first quarter of 2023. - Adjusted EBITDA loss (non-GAAP measure)* was
$1.5 million , a decrease versus adjusted EBITDA of$1.1 million in the first quarter of 2023. - Total cash including restricted cash was
$21.0 million atMarch 31, 2024 .
“As expected, our first quarter 2024 results were weak due to lower than normal hiring volumes at many of our clients,” said
* The Company provides non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in
Regional Highlights
All growth rate comparisons are in constant currency.
In the first quarter of 2024,
Corporate Costs
In the first quarter of 2024, the Company's corporate costs were
Liquidity and Capital Resources
The Company ended the first quarter of 2024 with
Share Repurchase Program
As a reminder, the Company approved a new
NOL Carryforward
As of
Conference Call/Webcast
The Company will conduct a conference call today,
If you wish to join the conference call, please use the dial-in information below:
- Toll-Free Dial-In Number: (833) 816-1383
- International Dial-In Number: (412) 317-0476
The archived call will be available on the investor information section of the Company's web site at hudsonrpo.com.
About
For more information, please visit us at hudsonrpo.com or contact us at ir@hudsonrpo.com.
Investor Relations:
The Equity Group
212 836-9611 / lcati@equityny.com
Forward-Looking Statements
This press release contains statements that the Company believes to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties, and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to, global economic fluctuations; the Company’s ability to successfully achieve its strategic initiatives ; risks related to potential acquisitions or dispositions of businesses by the Company; the Company’s ability to operate successfully as a company focused on its RPO business; risks related to fluctuations in the Company’s operating results from quarter to quarter due to various factors such as rising inflationary pressures and interest rates; the loss of or material reduction in our business with any of the Company’s largest customers; the ability of clients to terminate their relationship with the Company at any time; competition in the Company’s markets; the negative cash flows and operating losses that may recur in the future; risks relating to how future credit facilities may affect or restrict our operating flexibility; risks associated with the Company’s investment strategy; risks related to international operations, including foreign currency fluctuations, political events, natural disasters or health crises, including the
Financial Tables Follow
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (in thousands, except per share amounts) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended |
||||||||
| 2024 | 2023 | |||||||
| Revenue | $ | 33,891 | $ | 43,072 | ||||
| Operating expenses: | ||||||||
| Direct contracting costs and reimbursed expenses | 17,561 | 21,308 | ||||||
| Salaries and related | 15,166 | 17,478 | ||||||
| Office and general | 2,929 | 2,939 | ||||||
| Marketing and promotion | 878 | 981 | ||||||
| Depreciation and amortization | 397 | 348 | ||||||
| Total operating expenses | 36,931 | 43,054 | ||||||
| Operating (loss) income | (3,040 | ) | 18 | |||||
| Non-operating income (expense): | ||||||||
| Interest income, net | 93 | 64 | ||||||
| Other (expense) income, net | (39 | ) | 133 | |||||
| (Loss) income before income taxes | (2,986 | ) | 215 | |||||
| Benefit from income taxes | (88 | ) | (139 | ) | ||||
| Net (loss) income | $ | (2,898 | ) | $ | 354 | |||
| Earnings per share: | ||||||||
| Basic | $ | (0.95 | ) | $ | 0.12 | |||
| Diluted | $ | (0.95 | ) | $ | 0.11 | |||
| Weighted-average shares outstanding: | ||||||||
| Basic | 3,041 | 3,033 | ||||||
| Diluted | 3,041 | 3,122 | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except per share amounts) | ||||||||
| (unaudited) | ||||||||
2024 |
2023 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 20,414 | $ | 22,611 | ||||
| Accounts receivable, less allowance for expected credit losses of |
20,970 | 19,710 | ||||||
| Restricted cash, current | 391 | 354 | ||||||
| Prepaid and other | 2,768 | 3,172 | ||||||
| Total current assets | 44,543 | 45,847 | ||||||
| Property and equipment, net of accumulated depreciation of |
317 | 421 | ||||||
| Operating lease right-of-use assets | 1,245 | 1,431 | ||||||
| 5,728 | 5,749 | |||||||
| Intangible assets, net of accumulated amortization of |
3,336 | 3,628 | ||||||
| Deferred tax assets, net | 3,562 | 3,360 | ||||||
| Restricted cash | 194 | 205 | ||||||
| Other assets | 277 | 317 | ||||||
| Total assets | $ | 59,202 | $ | 60,958 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,974 | $ | 868 | ||||
| Accrued salaries, commissions, and benefits | 5,452 | 4,939 | ||||||
| Accrued expenses and other current liabilities | 5,701 | 4,635 | ||||||
| Operating lease obligations, current | 766 | 768 | ||||||
| Total current liabilities | 13,893 | 11,210 | ||||||
| Income tax payable | 88 | 87 | ||||||
| Operating lease obligations | 479 | 664 | ||||||
| Other liabilities | 439 | 443 | ||||||
| Total liabilities | 14,899 | 12,404 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, |
— | — | ||||||
| Common stock, 3,896 shares issued; 2,833 and 2,807 shares outstanding, respectively |
4 | 4 | ||||||
| Additional paid-in capital | 493,414 | 493,036 | ||||||
| Accumulated deficit | (428,145 | ) | (425,247 | ) | ||||
| Accumulated other comprehensive loss, net of applicable tax | (1,926 | ) | (1,290 | ) | ||||
| (19,044 | ) | (17,949 | ) | |||||
| Total stockholders’ equity | 44,303 | 48,554 | ||||||
| Total liabilities and stockholders’ equity | $ | 59,202 | $ | 60,958 | ||||
| SEGMENT ANALYSIS - QUARTER TO DATE | |||||||||||||||||||
| RECONCILIATION OF ADJUSTED EBITDA | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| For The Three Months Ended |
Pacific |
Corporate | Total | ||||||||||||||||
| Revenue, from external customers | $ | 5,994 | $ | 21,509 | $ | 6,388 | $ | — | $ | 33,891 | |||||||||
| Adjusted net revenue, from external customers (1) | $ | 5,805 | $ | 6,546 | $ | 3,979 | $ | — | $ | 16,330 | |||||||||
| Net loss | $ | (2,898 | ) | ||||||||||||||||
| Benefit from income taxes | (88 | ) | |||||||||||||||||
| Interest income, net | (93 | ) | |||||||||||||||||
| Depreciation and amortization | 397 | ||||||||||||||||||
| EBITDA (loss) (2) | $ | (864 | ) | $ | (601 | ) | $ | 268 | $ | (1,485 | ) | (2,682 | ) | ||||||
| Non-operating expense (income), including corporate administration charges | 62 | 118 | 10 | (151 | ) | 39 | |||||||||||||
| Stock-based compensation expense | 94 | 127 | 58 | 99 | 378 | ||||||||||||||
| Non-recurring severance and professional fees | — | 186 | 7 | 530 | 723 | ||||||||||||||
| Adjusted EBITDA (loss) (2) | $ | (708 | ) | $ | (170 | ) | $ | 343 | $ | (1,007 | ) | $ | (1,542 | ) | |||||
| For The Three Months Ended |
Corporate | Total | |||||||||||||||||
| Revenue, from external customers | $ | 9,272 | $ | 27,276 | $ | 6,524 | $ | — | $ | 43,072 | |||||||||
| Adjusted net revenue, from external customers (1) | $ | 8,922 | $ | 8,459 | $ | 4,383 | $ | — | $ | 21,764 | |||||||||
| Net income | $ | 354 | |||||||||||||||||
| Benefit from income taxes | (139 | ) | |||||||||||||||||
| Interest income, net | (64 | ) | |||||||||||||||||
| Depreciation and amortization | 348 | ||||||||||||||||||
| EBITDA (loss) (2) | $ | (430 | ) | $ | 1,434 | $ | 444 | $ | (949 | ) | 499 | ||||||||
| Non-operating expense (income), including corporate administration charges | 116 | 241 | 25 | (515 | ) | (133 | ) | ||||||||||||
| Stock-based compensation expense | 161 | 73 | 77 | 162 | 473 | ||||||||||||||
| Non-recurring severance and professional fees | 34 | — | — | 162 | 196 | ||||||||||||||
| Compensation expense related to acquisitions (3) | 113 | — | — | — | 113 | ||||||||||||||
| Adjusted EBITDA (loss) (2) | $ | (6 | ) | $ | 1,748 | $ | 546 | $ | (1,140 | ) | $ | 1,148 | |||||||
| (1) | Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations. |
| (2) | Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income (expense), stock-based compensation expense, and other non-recurring severance and professional fees (“Adjusted EBITDA”) are presented to provide additional information about the Company's operations on a basis consistent with the measures which the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. |
| (3) | Represents compensation expense payable per the terms of acquisition agreements. |
RECONCILIATION OF CONSTANT CURRENCY MEASURES (in thousands) (unaudited) |
The Company operates on a global basis, with the majority of its revenue generated outside of
| Three Months Ended |
|||||||||||||||
| 2024 | 2023 | ||||||||||||||
| As | As | Currency | Constant | ||||||||||||
| reported | reported | translation | currency | ||||||||||||
| Revenue: | |||||||||||||||
| $ | 5,994 | $ | 9,272 | $ | 2 | $ | 9,274 | ||||||||
| 21,509 | 27,276 | (957 | ) | 26,319 | |||||||||||
| 6,388 | 6,524 | 275 | 6,799 | ||||||||||||
| Total | $ | 33,891 | $ | 43,072 | $ | (680 | ) | $ | 42,392 | ||||||
| Adjusted net revenue (1) | |||||||||||||||
| $ | 5,805 | $ | 8,922 | $ | 2 | $ | 8,924 | ||||||||
| 6,546 | 8,459 | (285 | ) | 8,174 | |||||||||||
| 3,979 | 4,383 | 180 | 4,563 | ||||||||||||
| Total | $ | 16,330 | $ | 21,764 | $ | (103 | ) | $ | 21,661 | ||||||
| SG&A:(2) | |||||||||||||||
| $ | 6,662 | $ | 9,245 | $ | (11 | ) | $ | 9,234 | |||||||
| 6,982 | 6,804 | (237 | ) | 6,567 | |||||||||||
| 3,694 | 3,899 | 160 | 4,059 | ||||||||||||
| Corporate | 1,635 | 1,450 | (1 | ) | 1,449 | ||||||||||
| Total | $ | 18,973 | $ | 21,398 | $ | (89 | ) | $ | 21,309 | ||||||
| Operating income (loss): | |||||||||||||||
| $ | (1,152 | ) | $ | (625 | ) | $ | (1 | ) | $ | (626 | ) | ||||
| (520 | ) | 1,647 | (46 | ) | 1,601 | ||||||||||
| 270 | 445 | 19 | 464 | ||||||||||||
| Corporate | (1,638 | ) | (1,449 | ) | — | (1,449 | ) | ||||||||
| Total | $ | (3,040 | ) | $ | 18 | $ | (28 | ) | $ | (10 | ) | ||||
| EBITDA (loss): | |||||||||||||||
| $ | (864 | ) | $ | (430 | ) | $ | (1 | ) | $ | (431 | ) | ||||
| (601 | ) | 1,434 | (44 | ) | 1,390 | ||||||||||
| 268 | 444 | 20 | 464 | ||||||||||||
| Corporate | (1,485 | ) | (949 | ) | 1 | (948 | ) | ||||||||
| Total | $ | (2,682 | ) | $ | 499 | $ | (24 | ) | $ | 475 | |||||
| (1) | Represents Revenue less the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations. |
| (2) | SG&A is a measure that management uses to evaluate the segments’ expenses and includes salaries and related costs and other selling, general and administrative costs. |
(in thousands, except per share amounts) (unaudited) |
||||||||||
| Adjusted | Diluted Shares | Per Diluted | ||||||||
| For The Three Months Ended |
Net Loss | Outstanding | Share (1) | |||||||
| Net loss | $ | (2,898 | ) | 3,041 | $ | (0.95 | ) | |||
| Non-recurring severance and professional fees (after tax) | 723 | 3,041 | 0.24 | |||||||
| Adjusted net loss (3) | $ | (2,175 | ) | 3,041 | $ | (0.72 | ) | |||
| Adjusted | Diluted Shares | Per Diluted | ||||||
| For The Three Months Ended |
Net Income | Outstanding | Share (1) | |||||
| Net income | $ | 354 | 3,122 | $ | 0.11 | |||
| Non-recurring severance and professional fees (after tax) | 196 | 3,122 | 0.06 | |||||
| Compensation expense related to acquisitions (after tax) (2) | 131 | 3,122 | 0.04 | |||||
| Adjusted net income (3) | $ | 681 | 3,122 | $ | 0.22 | |||
| (1) | Amounts may not sum due to rounding. |
| (2) | Represents compensation expense payable per the terms of the Coit acquisition, including a promissory note for |
| (3) | Adjusted net income or loss per diluted share are Non-GAAP measures defined as reported net income or loss and reported net income or loss per diluted share before items such as acquisition-related costs and non-recurring severance and professional fees after tax that are presented to provide additional information about the Company's operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. Adjusted net income or loss per diluted share should not be considered in isolation or as substitutes for net income or loss and net income or loss per share and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as measures of the Company's profitability or liquidity. Further, adjusted net income or loss and adjusted net income or loss per diluted share as presented above may not be comparable with similarly titled measures reported by other companies. |
Source: Hudson Global, Inc.