November 9, 2020 – Hudson Global Inc. / (NASDAQ:HSON) posted third quarter of $25.4 million, a decrease 1.4 percent from the third quarter of 2019 and 4.7 percent in constant currency. This surpassed the Zacks consensus estimate by 3.73 percent. By region, Hudson Asia Pacific was up 10 percent, while the Americas and Europe were down 45 percent and 29 percent, respectively.
The Old Greenwich, Conn.-based recruiting firm posted a net loss of $1.2 million, or $0.41 per basic and diluted share, compared with a net loss of $0.4 million, or $0.12 per basic and diluted share, for the third quarter of 2019. Adjusted net loss per diluted share was $0.38 compared to adjusted net income per diluted share of $0.13 last year. The Zacks consensus estimate was expecting a loss of $0.13.
In the third quarter, Hudson Global’s corporate costs were $0.9 million compared to $0.8 million in the prior year quarter. Corporate costs in the third quarter of 2020 period excluded non-recurring expenses of $0.1 million compared to $0.0 million in the third quarter of 2019.
“Our business in the third quarter of 2020 continued to be impacted by the challenging macroeconomic environment caused by COVID-19,” said CEO Jeff Eberwein. “We are positioned to respond quickly as activity begins to rebound. We are excited about the recent acquisition of Coit Group and what our new, combined team can accomplish together in the technology space. We believe this accretive combination will generate considerable value for our clients, team, and stockholders.”
Through 2019 and 2020 year-to-date, the company reduced its share count by 16 percent and continues to view share repurchases as an attractive use of capital. Under its $10 million common stock share repurchase program, the company has $1.7 million remaining.
In October, Hudson Global acquired San Francisco-based RPO provider Coit Group. Financial terms of the deal were not disclosed. Founded 20 years ago by Joe Belluomini and Tim Farrelly, Coit is an RPO provider specializing in procuring top talent for high-growth companies, predominately in the San Francisco Bay area. They will become co-CEOs of Hudson RPO’s newly-formed technology group.
“This transaction represents a significant achievement for the Coit team and is a testament to the team’s dedication and performance,” said Mr. Farrelly. “We believe our long history of providing excellent service to companies in the Bay Area combined with Hudson RPO’s global market position creates an exciting growth opportunity to meet the global talent needs of our clients.”
As disclosed in previously issued Hudson Global press releases as well as in its 2019 Form 10-K and first quarter 2020 Form 10-Q, the business has been adversely impacted by the COVID-19 outbreak and the accompanying economic downturn. “This downturn, as well as the uncertainty regarding the duration, spread and intensity of the outbreak, led to an initial reduction in demand for our services in the first and second quarter of 2020,” Hudson Global said. “Some of our customers have instituted hiring freezes, while other customers that are more capable of working remotely have been allowed to operate somewhat as usual. The expected timeline for this reduction in demand for our services remains uncertain and difficult to predict considering the rapidly evolving landscape.”
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Hudson Global is monitoring the business environment surrounding COVID-19 and continues to proactively address this situation as it evolves. “The company 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,” Hudson Global said.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media