DGAP-News: Hudson Highland Group Reports 2010 Fourth Quarter and Full Year Financial Results

Hudson Highland Group, Inc.

09.02.2011 22:00
—————————————————————————

NEW YORK, 2011-02-09 22:00 CET (GLOBE NEWSWIRE) –Hudson Highland Group, Inc. (Nasdaq:HHGP), one of the world–s leading providers
of permanent recruitment, contract professionals and talent management
solutions, today announced financial results for the fourth quarter and full
year ended December 31, 2010.

Hudson delivered net income of $1.2 million, or $0.04 per basic and diluted
share, driven by strong revenue and gross margin growth, in the fourth quarter
of 2010. The company achieved $219.1 million in revenue and $3.6 million in
EBITDA during that period. These results were driven by 40 percent revenue
growth in permanent recruitment and 17 percent revenue growth in temporary
contracting, compared with the prior year quarter. Sequentially, revenue grew 9
percent and cash flow from operations in the quarter was $5.7 million.

2010 Fourth Quarter Summary

— Revenue of $219.1 million, an increase of 20.0 percent over the fourth
quarter of 2009, and an increase of 9.3 percent from the third quarter of
2010

— Gross margin of $82.9 million, or 37.9 percent of revenue, up 19.5 percent
from the same period last year, and an increase of 10.6 percent from the
third quarter of 2010

— EBITDA* of $3.6 million, or 1.6 percent of revenue, improved from an EBITDA
loss of $5.0 million for the fourth quarter of 2009, which included $5.9
million of restructuring charges

— Net income of $1.2 million, or $0.04 per basic and diluted share, compared
with net loss of $10.4 million, or $0.40 per basic and diluted share, for
the fourth quarter of 2009

2010 Full Year Summary

— Revenue of $794.5 million, an increase of 15.0 percent from $691.1 million
for 2009

— Gross margin of $298.6 million, or 37.6 percent of revenue, up 14.6 percent
from $260.5 million, or 37.7 percent of revenue for prior year

— EBITDA* of $6.5 million, or 0.8 percent of revenue, up from an EBITDA loss
of $35.5 million for 2009

— Net loss of $4.7 million, or $0.16 per basic and diluted share, compared
with net loss of $40.6 million, or $1.56 per basic and diluted share, for
2009

* EBITDA is defined in the segment tables at the end of this release and
includes other non-operating income.

–Hudson delivered its fourth consecutive quarter of increasing year-over-year
revenue and gross margin growth during the fourth quarter, led by continued
strong growth in permanent recruitment and a double-digit increase in temporary
contracting,– said Jon Chait, Hudson Highland Group–s chairman and chief
executive officer. –Sequential results were also outstanding, indicating a
strong trend going into 2011.–

–The company achieved $5.7 million of positive cash flow from operations in the
fourth quarter and a greatly improved net cash position,– said Mary Jane
Raymond, the company–s executive vice president and chief financial officer.
–Despite a still-challenging macroeconomic environment, the company delivered
strengthening financial results in 2010.–

Regional Results

Regional results for the fourth quarter in constant currency were:

— Europe gross margin was up 20 percent, led by 30 percent growth in the
U.K., compared with fourth quarter 2009. Sequentially, Europe gross margin
was up 12 percent compared with third quarter 2010.

— Australia/New Zealand (ANZ) gross margin was up 23 percent compared with
fourth quarter 2009, led by an increase of 53 percent in permanent
recruitment. Sequentially, ANZ gross margin was seasonally down 4 percent
compared with third quarter 2010.

— Asia gross margin was up 26 percent compared with fourth quarter 2009 and
up 6 percent compared with third quarter 2010.

— North America gross margin was up 5 percent compared with fourth quarter
2009 and up 16 percent compared with third quarter 2010, delivering
positive EBITDA for the second consecutive quarter.

Liquidity and Capital Resources

The company ended the fourth quarter of 2010 with $73.4 million in liquidity,
composed of $29.5 million in cash and $43.9 million in availability under its
credit facilities. The company generated $5.7 million in cash flow from
operations during the quarter and reduced its outstanding borrowings by $12.5
million from $13.9 million at the end of the third quarter to $1.3 million at
the end of the fourth quarter. Availability under the U.S., U.K., and
Australian facilities at the end of the fourth quarter totaled $36.7 million,
while availability under other local country facilities totaled $7.1 million.

Guidance

The company currently expects first quarter 2011 revenue of $200 – $210 million
and EBITDA of $1 – $4 million at prevailing exchange rates. This compares with
revenue of $180.1 million and an EBITDA loss of $1.4 million in the first
quarter of 2010.

Additional Information

Additional information about the company–s quarterly results can be found in
the shareholder letter and the quarterly earnings slides in the investor
information section of the company–s Web site at www.hudson.com.

Conference Call/Webcast

Hudson Highland Group will conduct a conference call Thursday, February 10,
2011 at 9:00 a.m. ET to discuss this announcement. Individuals wishing to
listen can access the Web cast on the investor information section of the
company–s Web site at www.hudson.com.

The archived call will be available on the investor information section of the
company–s Web site at www.hudson.com.

About Hudson Highland Group

Hudson Highland Group, Inc. is a leading provider of permanent recruitment,
contract professionals and talent management services worldwide. From single
placements to total outsourced solutions, Hudson helps clients achieve greater
organizational performance by assessing, recruiting, developing and engaging
the best and brightest people for their businesses. The company employs more
than 2,000 professionals serving clients and candidates in approximately 20
countries. More information is available at www.hudson.com.

Safe Harbor Statement

This press release contains statements that the company believes to be
–forward-looking statements– within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact included in this press release, including statements regarding
the company–s future financial condition, results of operations, business
operations and business prospects, are forward-looking statements. Words such
as –anticipate,– –estimate,– –expect,– –project,– –intend,– –plan,– –predict,–
–believe– and similar words, expressions and variations of these words and
expressions are intended to identify forward-looking statements. All
forward-looking statements are subject to important factors, risks,
uncertainties and assumptions, including industry and economic conditions that
could cause actual results to differ materially from those described in the
forward-looking statements. Such factors, risks, uncertainties and assumptions
include, but are not limited to, global economic fluctuations; risks related to
fluctuations in the company–s operating results from quarter to quarter; the
ability of clients to terminate their relationship with the company at any
time; competition in the company–s markets; risks associated with the company–s
investment strategy; risks related to international operations, including
foreign currency fluctuations; the company–s dependence on key management
personnel; the company–s ability to attract and retain highly skilled
professionals; risks in collecting the company–s accounts receivable; the
company–s history of negative cash flows and operating losses may continue;
restrictions on the company–s operating flexibility due to the terms of its
credit facility; implementation of the company–s cost reduction initiatives
effectively; the company–s heavy reliance on information systems and the impact
of potentially losing or failing to develop technology; risks related to our
dependence on uninterrupted service to clients; the company–s exposure to
employment-related claims from both clients and employers and limits on related
insurance coverage; volatility of the company–s stock price; the impact of
government regulations; and restrictions imposed by blocking arrangements.
Additional information concerning these and other factors is contained in the
company–s filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date of this document. The
company assumes no obligation, and expressly disclaims any obligation, to
update any forward-looking statements, whether as a result of new information,
future events or otherwise.

Financial Tables Follow

Possible table in table detected.
Object reference not set to an instance of an object.
Possible table in table detected.
Object reference not set to an instance of an object.
Possible table in table detected.
Object reference not set to an instance of an object.

——————————————————————————–
–
——————————————————————————–
–
HUDSON HIGHLAND GROUP, INC.
SEGMENT ANALYSIS – YEAR TO DATE
(in thousands)
(unaudited)

For The Year Hudson Hudson Hudson Hudson Corporate Total
Ended Europe ANZ Americas Asia
December 31,
2010
——————————————————————-
Revenue, $ 328,491 $ 269,383 $ 162,432 $ 34,236 $ — $ 794,542
from
external
customers
===================================================================
Gross $ 137,191 $ 88,989 $ 39,417 $ 32,976 $ — $ 298,573
margin, from
external
customers
===================================================================
Business $ 1,402 $ (15) $ 307 $ — $ — $ 1,694
reorganizati
on and
integration
expenses
(recovery)
Non-operatin 6,751 3,916 (1,822) 947 (13,729) (3,937)
g expense
(income),
including
corporate
administrati
on charges
——————————————————————-
EBITDA $ 1,086 $ 4,248 $ 1,687 $ 4,599 $ (5,117) $ 6,503
(Loss) (1)
Depreciation 8,184
and
amortization
expenses
Interest 1,278
expense
(income),
net
Provision 1,482
for (benefit
from) income
taxes
Loss 244
(income)
from
discontinued
operations,
net of taxes
———–
Net income $ (4,685)
(loss)
===========

For The Year Hudson Hudson Hudson Hudson Corporate Total
Ended Europe ANZ Americas Asia
December 31,
2009
——————————————————————-
Revenue, $ 276,975 $ 227,169 $ 161,872 $ 25,133 $ — $ 691,149
from
external
customers
===================================================================
Gross $ 124,162 $ 71,689 $ 40,959 $ 23,643 $ — $260,453
margin, from
external
customers
===================================================================
Goodwill and $ — $ — $ (120) $ 1,669 $ — $ 1,549
other
impairment
(recovery)
Business 9,682 3,130 5,133 98 137 18,180
reorganizati
on and
integration
expenses
(recovery)
Non-operatin 1,528 94 769 (173) (3,662) (1,444)
g expense
(income),
including
corporate
administrati
on charges
——————————————————————-
EBITDA $ (9,787) $ (274) $ (11,349) $ (551) $ (13,505) $ (35,466)
(Loss) (1)
Depreciation 12,543
and
amortization
expenses
Interest 694
expense
(income),
net
Provision (5,750)
for (benefit
from) income
taxes
Loss (2,344)
(income)
from
discontinued
operations,
net of taxes
———–
Net income $ (40,609)
(loss)
===========

——————————————————————————–
–

(1) Non-GAAP earnings before interest, income taxes, and depreciation and
amortization (–EBITDA–) are presented to provide additional information about
the company–s operations on a basis consistent with the measures which the
company uses to manage its operations and evaluate its performance. Management
also uses these measurements to evaluate capital needs and working capital
requirements. EBITDA should not be considered in isolation or as a substitute
for operating income, cash flows from operating activities, and other income or
cash flow statement data prepared in accordance with generally accepted
accounting principles or as a measure of the company–s profitability or
liquidity. Furthermore, EBITDA as presented above may not be comparable with
similarly titled measures reported by other companies.
(2) Prior year revenue has been reclassed to conform to current year
presentation.

Possible table in table detected.
Object reference not set to an instance of an object.

CONTACT: David F. Kirby
Hudson Highland Group
212-351-7216
david.kirby@hudson.com
News Source: NASDAQ OMX

09.02.2011 Dissemination of a Corporate News, transmitted by DGAP –
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP–s Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

—————————————————————————

Language: English
Company: Hudson Highland Group, Inc.

United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US4437921061
WKN:

End of Announcement DGAP News-Service

—————————————————————————