Hudson Global Posts 40 Percent Revenue Gain; Pandemic Creating Uncertainty Ahead
April 2, 2020 – Hudson Global Inc. / (NASDAQ:HSON) posted 2019 full-year revenues of $93.8 million, a 40.2 percent from a year earlier. The firm’s Americas revenue of $13.6 million decreased two percent, Asia Pacific revenue of $61.4 million increased 77 percent, and Europe revenue of $18.8 million increased 22 percent. The Old Greenwich, Conn-based recruiting firm posted a net loss of $1 million, or $0.30 per basic and diluted share, compared to net income of $7.9 million, or $0.24 per basic and diluted share, in 2018.
During the fourth quarter, Hudson posted revenue of $25.4 million, an increase of 53.5 percent from its previous fourth quarter. The company also recorded a net income of $1.5 million, or $0.48 per basic and diluted share, compared with a net loss of $0.6 million, or $0.02 per basic and diluted share, last year.
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“We delivered solid growth in the fourth quarter, particularly in Europe and Australia,” said Jeff Eberwein, chief executive officer at Hudson Global. “In addition, we are pleased to report positive adjusted EBITDA, cash flow from operations, and net income for the fourth quarter. For the full year, we delivered revenue growth while also reducing corporate costs enabling us to generate positive adjusted EBITDA for 2019, a milestone event for our company.”
Under its $10 million common stock share repurchase program initiated in the third quarter of 2015, Hudson Global acquired 432,563 shares for a total of $8.3 million through the end of the fourth quarter of 2019. In addition, the firm completed a tender offer in March 2019 for 246,863 shares of common stock for approximately $3.7 million, excluding fees and expenses relating to the tender offer.
COVID-19 Update
“Like many other companies doing business globally, we expect our business to be impacted by COVID-19,” said Mr. Eberwein. “Our team is constantly assessing global developments, but the rapidly changing situation creates a lack of visibility currently and makes it difficult to evaluate the virus’ impact on our clients and our business with any certainty at this time. Hudson RPO’s China business, for example, experienced a significant decline in activity in February and early March but is beginning to recover as our clients and employees return to work,” he said. “China represents less than five percent of our total revenue. Our management teams around the world are in continuous communication with our clients and employees, and we are ready to address this situation quickly as it evolves.”
“We are taking a balanced approach to this situation and our priority is the well-being and safety of our clients and employees in all our markets,” Mr. Eberwein said. “We believe the long-term fundamentals of our business are strong, and we remain committed, as always, to maximizing shareholder value over the long term.”
“This downturn, as well as the uncertainty regarding the duration, spread and intensity of the outbreak, has led to an initial reduction in demand for our services,” Mr. Eberwein said. “Some of our customers have instituted hiring freezes, while other customers that are more capable of working remotely have been allowed to operate as usual. The expected timeline for this reduction in demand for our services remains uncertain and difficult to predict considering the rapidly evolving landscape.”
Hudson Global said that it is monitoring the situation surrounding COVID-19 and will continue to proactively address this situation as it evolves. The firm said it is confident that it can continue to take appropriate actions to manage the business in this challenging environment due to the flexibility of its workforce and the strength of its balance sheet.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
