Hudson Global Posts Notable Revenue Decline
March 3, 2017 – Hudson Global Inc. / (NASDAQ:HSON) posted 2016 full-year revenues of $422.7 million, an 8.7 percent decrease from revenues of $463.2 million a year ago.
The New York-based recruiting company recorded a net loss of $8.8 million, or $0.26 per basic and diluted share, compared with net income of $2.3 million, or $0.07 per basic and diluted share, the prior year.
During the fourth quarter, Hudson posted revenue of $100.3 million, a 5.5 percent drop from its previous fourth quarter. The company also recorded a loss of $0.3 million, or $0.01 per basic and diluted share, compared with net loss of $2.6 million, or $0.07 per basic and diluted share, last year.
“We continued to deliver gross margin growth i many of our markets, including Americas, Australia / New Zealand, Belgium, France, Hong Kong and Spain,” said Stephen Nolan, chief executive officer. “We generated over $5 million in cash flow from operations in the fourth quarter and delivered year-over-year improvement in adjusted EBITDA in 2016.” Nevertheless, the numbers produced are anemic, especially considering the recent results that rivals are posting up.
Business Outlook
Hudson expects first quarter 2017 revenue of between $95 million and $105 million and adjusted EBITDA of between a $1.5 million loss and $0.5 million gain at prevailing exchange rates. In the first quarter of 2016, revenue was $101.2 million and adjusted EBITDA was a loss of $2.0 million.
During the fourth quarter, Hudson continued its share repurchase program for which it has an authorization of up to $10 million of its common stock. The company purchased 142,671 shares for $0.2 million as part of the buyback program during the fourth quarter. Since the inception of this program in the third quarter of 2015 through the end of 2016, the company has purchased just under three million shares for $6.5 million.
Shareholder Activity
Zacks Investment Research raised shares of Hudson Global from a “strong sell” rating to a “hold” rating. In addition, major shareholder Sagard Capital Partners, L.P. sold 1.1 million shares of the stock in a recent transaction. The shares were sold at an average price of $1.80, for a total value of $1,980,000. The sale was disclosed in a filing with the Securities & Exchange Commission. Currently, just 12.2 percent of the stock is owned by company insiders.
Several institutional investors have recently added to or reduced their stakes in Hudson. Renaissance Technologies LLC boosted its position in the company by 14.8 percent in the first quarter. Renaissance Technologies LLC now owns 248,096 shares of the company’s stock valued at $588,000 after buying an additional 31,996 shares during the period. Geode Capital Management LLC boosted its position in Hudson Global by 2.3 percent in the first quarter. Geode Capital now owns 95,731 shares of the company’s stock valued at $226,000 after buying an additional 2,119 shares during the period. And Frontier Investment Mgmt Co. boosted its position by 0.8 percent in the second quarter. Frontier now owns 521,901 shares valued at $1,028,000 after buying an additional 4,269 shares during the period. Institutional investors currently own just under 75 percent of the company’s stock.
Hudson’s shares recently closed at $1.04. A year ago, they were trading at $2.70.
Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media
