Hudson Global Posts 49 Percent Revenue Gain; Adverse COVID-19 Impact Expected in Q2
May 8, 2020 – Hudson Global Inc. / (NASDAQ:HSON) posted first quarter revenues of $24.1 million, up 49.1 percent from a year ago. By region, Hudson Asia Pacific led the charge, recording a revenue gain of 109 percent. Revenue growth in Asia-Pacific was driven by the start of a significant contract in Australia to manage a portion of the contingent workforce for a “large Asia-based technology company,” according to Hudson.
Hudson Europe posted a revenue decline of seven percent while Hudson America recorded a two percent increase. The Old Greenwich, Conn.-based recruiting firm posted a net loss of $0.5 million, or $0.17 per basic and diluted share, compared with a net loss of $1.9 million, or $0.58 per basic and diluted share, for the first quarter of 2019.
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“In the first quarter, we reported solid year-on-year growth despite starting to experience the economic impact of the COVID-19 pandemic in March,” said Jeff Eberwein, CEO of Hudson Global. “We grew adjusted net revenue in constant currency, as well as adjusted EBITDA, in all three regions. Our top priority during these unprecedented times continues to be the health and safety of our talented team and prestigious clients. As our clients and employees around the globe have transitioned to new ways of working, we are pleased with the resilience of our team and business.”
Share Repurchase Program
Under its $10 million common stock share repurchase program initiated in the third quarter of 2015, Hudson Global has acquired 432,563 shares for a total of $8.3 million through the end of the first quarter of 2020. In addition, the company completed a tender offer in March 2019 for 246,863 shares of the its common stock for an aggregate cost of $3.7 million, excluding fees and expenses relating to the tender offer. The 246,863 shares purchased as part of this tender offer were in addition to the 432,563 shares purchased under the above-referenced common stock repurchase plan.
On March 27, 2020, Hudson Global completed transactions with certain shareholders to repurchase 259,331 shares of the company’s common stock for an aggregate cost of approximately $2.2 million, representing approximately 8.8 percent of the company’s shares outstanding as of Feb. 29, 2020. The 259,331 shares purchased as part of these transactions were in addition to the 432,563 shares purchased under the above-referenced common stock repurchase plan and the 246,863 shares purchased in the above-referenced tender offer.
COVID-19 Update
“As disclosed in the Hudson Global’s press releases issued on March 13, 2020 and March 30, 2020, as well as in our 2019 Form 10-K, our business has begun to be adversely impacted by the recent COVID-19 outbreak and the accompanying economic downturn,” the company said. “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. 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.”
“The company is vigilantly monitoring the situation surrounding COVID-19 and will continue to proactively address this situation as it evolves,” Hudson Global said. “Due to the flexibility of its workforce and the actions it is taking, the company is confident it can continue to efficiently manage its business and mitigate risks in this challenging environment, while retaining the ability to meet clients’ needs when activity improves.”
Shares in Hudson Global were unchanged at $9.45 upon the release of its numbers. The company has a market cap of $25.3 million, according to Google.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
