August 6, 2020 – Hudson Global Inc. / (NASDAQ:HSON) posted first quarter of $24.6 million, down seven percent from a year ago. This surpassed the Zacks consensus estimate by 6.84 percent. By region, Hudson Asia Pacific was up 14 percent, while the Americas and Europe were down 44 percent and 27 percent, respectively.
The Old Greenwich, Conn.-based recruiting firm posted a net loss of $0.8 million, or $0.27 per basic and diluted share, compared with a net loss of $0.9 million, or $0.29 per basic and diluted share, for the second quarter of 2019. The Zacks consensus estimate was expecting a loss of $0.02.
“Our business in the second quarter of 2020 was impacted by the challenging macroeconomic environment caused by COVID-19,” said Jeff Eberwein, CEOof Hudson Global. “Our Asia Pacific region performed the best, growing revenue and adjusted EBITDA versus the prior year. Globally, we have now right-sized the business to better match clients’ current needs while retaining the ability to respond quickly as activity rebounds.”
“Our top priority during this difficult time continues to be the health and safety of our team and clients,” Mr. Eberwein said. “We are pleased with the resilience of our business thus far, which is a testament to the strength of our clients and the flexibility of our team. Our partnerships with our clients have deepened during this challenging time, and we are well positioned to emerge from this crisis as a stronger partner for our clients.”
During the quarter, Hudson Global reduced its share count by 16 percent since December 31, 2018 and continues to view share repurchases as an attractive use of capital. Under its $10 million common stock share repurchase program, the firm has $1.7 million remaining.
As disclosed in previously issued Hudson Gloabl 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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Largest search firm posts fiscal year-end revenues of $1.92 billion as it navigates pandemic and economic crisis. $300 million cost savings efforts include pay cuts and furloughs, with “more change” in the works, according to CEO Gary D. Burnison. The fiscal fourth quarter was impacted by COVID-19 with revenues falling 19 percent in Asia Pacific, 17. 2 percent in Latin America, 12.5 percent in Europe, the Middle East and Africa, and 10.1 percent in North America.
Hudson Global is vigilantly 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.
Hudson Global shares have lost about 16.2 percent since the beginning of the year versus the S&P 500’s gain of 2.3 percent.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media