May 13, 2019 – Hudson Global Inc. / (NASDAQ:HSON) posted first quarter revenues of $16.2 million, up 9.2 percent in constant currency, from a year ago. By region, Hudson Asia Pacific led the charge, recording a revenue gain of 13 percent. Meanwhile, Hudson America and Hudson Europe struggled, posting a decrease of 15 percent and flat revenues, respectively.
The Old Greenwich, Conn-based recruiting firm posted net loss of $1.9 million, or six cents per basic and diluted share, compared with net income of $10.7 million, or 33 cents per basic and diluted share, for the first quarter of 2018. The results in the first quarter of 2018 included net loss from continuing operations of $2.9 million and income from discontinued operations of $13.6 million related to the sale of the recruitment and talent management businesses.
“The Asia Pacific region once again led with the strongest performance while results in Europe and the Americas were mixed,” said Jeff Eberwein, chief executive officer at Hudson Global. “With a significant transition year in 2018 behind us, our global RPO business is now primed for growth.”
“We have an exciting new client relationship starting in Australia in Q2 and several other new client wins ramping up in all three regions as the year unfolds,” he said. “We reaffirm our 2019 guidance for revenue and gross profit growth to exceed 10 percent versus 2018 and for Adjusted EBITDA to grow faster than this rate.”
Stock Repurchase Program
Hudson Global has a common stock share repurchase authorization in place of $10 million. Since the inception of this program in the third quarter of 2015 through the end of the first quarter of 2019, the company has purchased 3.9 million shares for a total cost of $7.7 million. Hudson Global continues to view share repurchases as an attractive use of capital.
Vast Majority of Recruiting Firms Expect Increases in 2019
A brand new report by Bullhorn has found that 79 percent of recruiting firms expect to bring in more revenue this year than last. Optimism reigns across the sector despite growing concerns and emerging challenges related to automation, macroeconomics and politics.
Hudson Global recently added Mimi Drake and Connia Nelson as new independent directors to its board of directors. Ms. Drake is the co-CEO of Permit Capital Advisors, an investment advisory firm based in suburban Philadelphia. Ms. Nelson is the SVP and CHRO for LifeWay.
“Last year we began a formal process to identify potential new directors to enhance our board,” said Richard Coleman, Hudson Global’s chairman of the board. “After conducting a thorough search, we are excited to announce the addition of Ms. Drake and Ms. Nelson to the Hudson Global board. Their extensive management, leadership, and human resources experience make them exceptionally qualified to serve as independent directors.”
“Ms. Drake’s board experience coupled with her passion for improving workplace diversity and inclusion will make a significant and immediate contribution to the company,” Mr. Coleman said. “Ms. Nelson’s human resources background and talent management expertise lend themselves particularly well to Hudson Global’s business and she brings a strong client perspective to our board. Both appointments reflect our strong belief that the makeup of our board should reflect the values, experiences, and diversity of thought of our employees and clients.”
For 2019, Hudson Global continues to expect to grow revenue and gross profit more than 10 percent versus 2018, and adjusted EBITDA before corporate costs should grow faster than this rate. This combination of growth in its RPO business and reduction in corporate costs should enable the company to generate positive adjusted EBITDA in 2019.
Hudson Global shares closed at $1.58 upon the release of its first quarter numbers. A year ago, they were trading at $1.93.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media