DGAP-News 298 0 Kommentare Hudson Highland Group Reports 2011 Full Year and Fourth Quarter Results (deutsch)

Hudson Highland Group Reports 2011 Full Year and Fourth Quarter Results

Hudson Highland Group, Inc.

23.02.2012 22:00

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Full Year Revenue Grew 17.5 Percent, 10.9 Percent in Constant Currency; EBITDA

Grew 264 Percent to $23.6 Million

NEW YORK, 2012-02-23 22:00 CET (GLOBE NEWSWIRE) --

Hudson Highland Group, Inc. (Nasdaq:HHGP), a leading global provider of

professional recruitment and related talent solutions, today announced

financial results for the full year and fourth quarter ended December 31, 2011.

'During 2011, we launched new strategic initiatives to maximize the value of

Hudson's global platform and achieve greater operating efficiencies. In more

than 20 countries, our teams placed over 16,000 professionals and managed on

average 5,800 highly skilled contract consultants per day to deliver solutions

that helped our clients grow and address these uncertain times,' said Manuel

Marquez, chairman and chief executive officer of Hudson Highland Group.

'Despite headwinds in the fourth quarter, we achieved double digit revenue

growth, generated positive cash flow and realized record net income from

continuing operations in 2011. We believe we are now better positioned to

confront the market contraction in Europe and its ripple effect in Asia

Pacific.'

2011 Full Year Summary

-- Revenue of $933.7 million, an increase of 17.5 percent from 2010, or 10.9

percent in constant currency.

-- Gross margin of $354.3 million, or 37.9 percent of revenue, grew 18.7

percent in 2011, or 11.9 percent in constant currency.

-- EBITDA* of $23.6 million, or 2.5 percent of revenue in 2011, compared with

$6.5 million, or 0.8 percent of revenue, in 2010.

-- Net income of $10.9 million, or $0.35 per basic share and $0.34 per diluted

share, compared with net loss of $4.7 million, or $0.16 per basic and

diluted share, in 2010.

'Improvements in our earnings and cash position in 2011 resulted from our

global commitment to move our company to solid profitability and liquidity,'

said Mary Jane Raymond, the company's chief financial officer. 'In the fourth

quarter, we took steps to further optimize our operations by moving from four

to three regional units. This structure helped us weather the deteriorating

conditions at the end of the year. We expect to generate additional synergies

in 2012 to drive our earnings.'

2011 Fourth Quarter Summary

-- Revenue of $222.7 million, an increase of 1.7 percent over the fourth

quarter of 2010, or 1.0 percent in constant currency.

-- Gross margin increased to $84.6 million in the fourth quarter, or 38.0

percent of revenue, representing a 2.1 percent increase from the same

period last year, or 1.4 percent in constant currency.

-- EBITDA* of $6.0 million, or 2.7 percent of revenue in the fourth quarter,

improved from $3.6 million, or 1.6 percent of revenue, for the fourth

quarter of 2010.

-- Net income of $3.3 million, or $0.10 per basic and diluted share, compared

with net income of $1.2 million, or $0.04 per basic and diluted share, for

the fourth quarter of 2010.

-- Cash flow from operations was $20.4 million in the fourth quarter.

Liquidity increased to $89.1 million, composed of $37.3 million in cash and

$51.8 million in available borrowings.

* EBITDA and adjusted EBITDA are defined in the segment tables at the end of

this release.

Key Strategic Initiatives

During 2011, the company launched a new global strategy focused on four key

initiatives which were instrumental in delivering the full year results:

-- Reap the value of Hudson's global business

To further align operations with the needs of its global clients, Hudson

established global practices for two of its fastest growing businesses, Legal

eDiscovery and RPO, which represented 70 percent of constant currency gross

margin growth in 2011. In addition, the company simplified its operating

platform, organizing operations into three regions, which it believes will

facilitate greater alignment with its global clients' needs, better

coordination of global activities and more efficient utilization of resources.

-- Attract, develop and retain the right people

Following the appointment of a new chief people officer, the company started to

deploy best-practice processes to help its teams be more successful. These

efforts contributed to Hudson's adjusted EBITDA leverage on incremental gross

margin of 49 percent in constant currency in 2011.

-- Focus on selected clients and services in the market

The company further developed its professional recruitment and talent solutions

services to bring more value to clients. Higher value solutions helped improve

the gross margin on contract talent and interim management by 100 basis points

in constant currency to 18.5 percent. In permanent recruitment, Hudson's RPO

clients increasingly use the company's talent management offerings to further

align recruitment processes with their business needs.

-- Create a compelling digital presence

To deliver a more compelling digital presence for its clients and candidates -

critical to the company's future - Hudson began integrating its existing

technology, information, social media and branding efforts. Under the direction

of its chief knowledge officer, in December 2011, Hudson launched a new search

engine optimized web site in more than 20 countries. The new web platform is

already generating an increasing flow of targeted candidates and business

leads.

Regional Highlights

Americas

In 2011, Hudson Americas delivered one of its best-performing years. Gross

margin increased 29 percent compared with 2010, while adjusted EBITDA reached

$6.4 million compared with $0.2 million in 2010. A 19 percent increase in

contracting gross margin was driven primarily by the company's Legal eDiscovery

practice. This business provides end-to-end eDiscovery solutions, process

management and managed review services tailored to meet client needs. Temporary

contracting gross margin increased 60 basis points to 22.2 percent in 2011,

driven primarily by higher margins in eDiscovery. Permanent recruiting gross

margin grew by 95 percent, attributable to the early success of RPO in the

Americas, a strategic service that allows clients to transfer all or part of

their recruitment process to Hudson.

For the fourth quarter, Hudson Americas' gross margin increased 27 percent

compared with the prior year period, driven by 14 percent gross margin growth

in temporary contracting, including eDiscovery. Permanent recruitment more than

doubled due to growth in RPO. Adjusted EBITDA reached $2.4 million for the

fourth quarter, more than doubling from the prior year period.

Asia Pacific

Asia Pacific delivered strong adjusted EBITDA gains in 2011 on 10 percent gross

margin growth in constant currency, driven by the expansion of RPO and

efficient leverage. Gross margin growth was driven by 14 percent growth in

permanent recruitment and 5 percent growth in temporary contracting. Permanent

recruitment growth was led by 35 percent growth in RPO across the region as

well as 23 percent growth in China.

Adjusted EBITDA was $21.3 million, or 5.9 percent of revenue, an increase of 56

percent or $7.6 million from 2010. Asia Pacific continued to be the most

profitable region in the organization, and benefitted from 51 percent constant

currency leverage in 2011.

During the fourth quarter, European economic conditions created a ripple effect

in Asia Pacific as some multi-national clients delayed hiring decisions. Gross

margin was down 5 percent in constant currency in the fourth quarter from prior

year, but despite this, adjusted EBITDA reached $5.0 million, or 6.0 percent of

revenue, an increase of 24 percent or $1.0 million from the fourth quarter of

2010.

Europe

For the full year 2011, Hudson Europe's gross margin increased 9 percent in

constant currency compared with the prior year. Adjusted EBITDA of $16.5

million increased 79 percent from $9.2 million in 2010.

Temporary contracting gross margin increased 30 percent in constant currency,

driven by the expansion of Legal eDiscovery in the U.K., as well as growth in

the Netherlands professional contracting business and Belgium's interim

management business. The temporary contracting gross margin increased to 18.9

percent, up from 16.9 percent in 2010, driven primarily by higher margins in

eDiscovery. Permanent recruitment delivered modest growth in 2011, a

combination of growth in retained search in Belgium and France, and declines in

the U.K.

The second half of 2011 was notable for volatile economic conditions in Europe,

marked by the sovereign debt crisis and the contraction of the banking and

finance industry. During the fourth quarter, several clients delayed permanent

hiring decisions. Nonetheless, the balanced service portfolio helped maintain

gross margin flat compared with the fourth quarter of 2010 in constant

currency. Adjusted EBITDA of $3.0 million increased 18 percent over the fourth

quarter of 2010.

Business Outlook

The company remains optimistic about 2012, but the European debt situation has

persisted and the weaker economic conditions witnessed in the fourth quarter

have continued into the first quarter. Given the current environment, the

company expects first quarter 2012 revenue to be down between 4 - 8 percent to

prior year at prevailing exchange rates, and EBITDA about breakeven from

operations. This compares with revenue of $218.5 million and EBITDA of $2.5

million in the first quarter of 2011.

Conference Call/Webcast

Hudson Highland Group will conduct a conference call today at 00 p.m. ET to

discuss this announcement. Individuals wishing to listen can access the webcast

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.

Forward-Looking Statements

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 facilities; the company's ability to implement 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

HUDSON HIGHLAND GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Three Months Ended Year Ended

December 31, December 31,

-------------------------------------------

2011 2010 2011 2010

-------------------------------------------

Revenue $ 222,738 $ 219,061 $ 933,736 $ 794,542

Direct costs 138,090 136,137 579,431 495,969

-------------------------------------------

Gross margin 84,648 82,924 354,305 298,573

-------------------------------------------

Operating expenses:

Selling, general and 78,379 80,192 329,899 294,313

administrative expenses

Depreciation and amortization 1,501 1,730 6,251 8,184

Business reorganization and (27) 988 720 1,694

integration expenses

-------------------------------------------

Total operating expenses 79,853 82,910 336,870 304,191

-------------------------------------------

Operating income (loss) 4,795 14 17,435 (5,618)

Other income (expense):

Interest income (expense), net (234) (306) (1,143) (1,278)

Other income (expense), net (290) 1,812 (44) 4,500

Fee for early extinguishment of -- -- -- (563)

credit facility

-------------------------------------------

Income (loss) from continuing 4,271 1,520 16,248 (2,959)

operations before provision for

income taxes

Provision for (benefit from) income 962 116 5,339 1,482

taxes

-------------------------------------------

Income (loss) from continuing 3,309 1,404 10,909 (4,441)

operations

Income (loss) from discontinued -- (213) -- (244)

operations, net of income taxes

-------------------------------------------

Net income (loss) $ 3,309 $ 1,191 $ 10,909 $ (4,685)

===========================================

Basic earnings (loss) per share:

Income (loss) from continuing $ 0.10 $ 0.04 $ 0.35 $ (0.15)

operations

Income (loss) from discontinued -- (0.01) -- (0.01)

operations

-------------------------------------------

Net income (loss) $ 0.10 $ 0.04 $ 0.35 $ (0.16)

===========================================

Diluted earnings (loss) per share:

Income (loss) from continuing $ 0.10 $ 0.04 $ 0.34 $ (0.15)

operations

Income (loss) from discontinued -- (0.01) -- (0.01)

operations

-------------------------------------------

Net income (loss) $ 0.10 $ 0.04 $ 0.34 $ (0.16)

===========================================

Weighted average shares outstanding:

Basic 31,639 31,234 31,566 29,931

Diluted 32,118 31,754 31,989 29,931

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HUDSON HIGHLAND GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

December 31,

2011 2010

---------------------

ASSETS

Current assets:

Cash and cash equivalents $ 37,302 $ 29,523

Accounts receivable, less allowance for doubtful accounts 131,489 128,576

of $1,772 and $2,145, respectively

Prepaid and other 13,132 13,988

---------------------

Total current assets 181,923 172,087

Property and equipment, net 17,838 16,593

Other assets 16,785 17,154

---------------------

Total assets $ 216,546 $ 205,834

=====================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 12,025 $ 14,812

Accrued expenses and other current liabilities 74,248 74,990

Short-term borrowings 3,384 1,339

Accrued business reorganization expenses 858 2,619

---------------------

Total current liabilities 90,515 93,760

Other non-current liabilities 10,867 10,493

Income tax payable, non-current 7,807 8,303

---------------------

Total liabilities 109,189 112,556

=====================

Stockholders' equity:

Preferred stock, $0.001 par value, 10,000 shares -- --

authorized; none issued or outstanding

Common stock, $0.001 par value, 100,000 shares authorized; 33 32

issued 32,776 and 32,181 shares, respectively

Additional paid-in capital 470,786 466,582

Accumulated deficit (397,290) (408,199)

Accumulated other comprehensive income--translation 34,255 34,902

adjustments

Treasury stock, 79 and 9 shares, respectively, at cost (427) (39)

---------------------

Total stockholders' equity 107,357 93,278

---------------------

Total liabilities and stockholders' equity $ 216,546 $ 205,834

=====================

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HUDSON HIGHLAND GROUP, INC.

SEGMENT ANALYSIS - QUARTER TO DATE

(in thousands)

(unaudited)

For The Three Months Ended Hudson Hudson Hudson Corporate Total

December 31, 2011 Americas Asia Europe

Pacific

----------------------------------------------------

Revenue, from external $ 47,802 $ 83,185 $ 91,751 $ -- $ 222,738

customers

====================================================

Gross margin, from external $ 13,738 $ 33,598 $ 37,312 $ -- $ 84,648

customers

====================================================

Adjusted EBITDA (loss) (1) $ 2,445 $ 4,988 $ 2,967 $ (4,131) $ 6,269

Business reorganization and $ -- $ -- $ (27) $ -- $ (27)

integration expenses

(recovery)

Non-operating expense 1,204 1,847 1,854 (4,615) 290

(income),

including corporate

administration charges

----------------------------------------------------

EBITDA (loss) (1) $ 1,241 $ 3,141 $ 1,140 $ 484 $ 6,006

Depreciation and 1,501

amortization expenses

Interest expense (income), 234

net

Provision for (benefit 962

from) income taxes

Loss (income) from --

discontinued operations,

net of taxes

----------

Net income (loss) $ 3,309

==========

For The Three Months Ended Hudson Hudson Hudson Corporate Total

December 31, 2010 Americas Asia Europe

Pacific

----------------------------------------------------

Revenue, from external $ 44,268 $ 84,177 $ 90,616 $ -- $ 219,061

customers

====================================================

Gross margin, from external $ 10,775 $ 34,681 $ 37,468 $ -- $ 82,924

customers

====================================================

Adjusted EBITDA (loss) (1) $ 1,109 $ 4,009 $ 2,516 $ (4,902) 2,732

Business reorganization and $ 21 $ 102 $ 865 $ -- $ 988

integration expenses

(recovery)

Non-operating expense (1,298) 1,129 1,337 (2,980) (1,812)

(income),

including corporate

administration charges

----------------------------------------------------

EBITDA (loss) (1) $ 2,386 $ 2,778 $ 314 $ (1,922) $ 3,556

Depreciation and 1,730

amortization expenses

Interest expense (income), 306

net

Provision for (benefit 116

from) income taxes

Loss (income) from 213

discontinued operations,

net of taxes

----------

Net income (loss) $ 1,191

==========

For the Three Months Ended Hudson Hudson Hudson Corporate Total

March 31, 2011 Americas Asia Europe

Pacific

----------------------------------------------------

Revenue, from external $ 45,812 $ 79,017 $ 93,710 $ -- $ 218,539

customers

====================================================

Gross margin, from external $ 10,357 $ 31,903 $ 38,938 $ -- $ 81,198

customers

====================================================

Adjusted EBITDA (loss) (1) $ 204 $ 3,151 $ 4,136 $ (5,100) $ 2,391

Business reorganization and $ -- $ -- $ 351 $ -- $ 351

integration expenses

(recovery)

Non-operating expense 583 1,137 1,610 (3,816) (486)

(income),

including corporate

administration charges

----------------------------------------------------

EBITDA (loss) (1) $ (379) $ 2,014 $ 2,175 $ (1,284) $ 2,526

Depreciation and 1,576

amortization expenses

Interest expense (income), 206

net

Provision for (benefit 750

from) income taxes

Loss (income) from --

discontinued operations,

net of taxes

----------

Net income (loss) $ (6)

==========

For the Three Months Ended Hudson Hudson Hudson Corporate Total

September 30, 2011 Americas Asia Europe

Pacific

----------------------------------------------------

Revenue, from external $ 47,691 $ 100,637 $ 96,753 $ -- $ 245,081

customers

====================================================

Gross margin, from external $ 13,662 $ 41,201 $ 38,129 $ -- $ 92,992

customers

====================================================

Adjusted EBITDA (loss) (1) $ 1,956 $ 7,069 $ 3,893 $ (5,232) $ 7,686

Business reorganization and $ -- $ -- $ -- $ -- $ --

integration expenses

(recovery)

Non-operating expense 497 1,848 1,873 (3,982) 236

(income),

including corporate

administration charges

----------------------------------------------------

EBITDA (loss) (1) $ 1,459 $ 5,221 $ 2,020 $ (1,252) $ 7,450

Depreciation and 1,537

amortization expenses

Interest expense (income), 328

net

Provision for (benefit 2,202

from) income taxes

Loss (income) from --

discontinued operations,

net of taxes

----------

Net income (loss) $ 3,382

==========

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(1) Non-GAAP earnings before interest, income taxes, and depreciation and

amortization ('EBITDA') and non-GAAP earnings before interest, income taxes,

depreciation and amortization, non-operating income, goodwill and other

impairment charges, business reorganization expenses and acquisition-related

expenses ('Adjusted 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 and adjusted 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 and adjusted EBITDA as

presented above may not be comparable with similarly titled measures reported

by other companies.

--------------------------------------------------------------------------------

HUDSON HIGHLAND GROUP, INC.

SEGMENT ANALYSIS - YEAR TO DATE

(in thousands)

(unaudited)

For The Year Ended Hudson Hudson Hudson Corporate Total

December 31, 2011 Americas Asia Europe

Pacific

-------------------------------------------------------

Revenue, from external $ 192,217 $ 359,108 $ 382,411 $ -- $ 933,736

customers

=======================================================

Gross margin, from $ 50,778 $ 146,917 $ 156,610 $ -- $ 354,305

external customers

=======================================================

Adjusted EBITDA (loss) $ 6,442 $ 21,306 $ 16,517 $ (19,860) $ 24,405

(1)

Business reorganization $ -- $ -- $ 720 $ -- $ 720

and integration

expenses (recovery)

Non-operating expense 2,962 7,126 7,727 (17,771) 44

(income),

including corporate

administration charges

-------------------------------------------------------

EBITDA (loss) (1) $ 3,482 $ 14,180 $ 8,071 $ (2,091) $ 23,642

Depreciation and 6,251

amortization expenses

Interest expense 1,143

(income), net

Provision for (benefit 5,339

from) income taxes

Loss (income) from --

discontinued

operations, net of

taxes

----------

Net income (loss) $ 10,909

==========

For The Year Ended Hudson Hudson Hudson Corporate Total

December 31, 2010 Americas Asia Europe

Pacific

-------------------------------------------------------

Revenue, from external $ 162,432 $ 303,619 $ 328,491 $ -- $ 794,542

customers

=======================================================

Gross margin, from $ 39,417 $ 121,965 $ 137,191 $ -- $ 298,573

external customers

=======================================================

Adjusted EBITDA (loss) $ 172 $ 13,695 $ 9,239 $ (18,845) $ 4,261

(1)

Business reorganization 307 (15) 1,402 -- 1,694

and integration

expenses (recovery)

Non-operating expense (1,822) 4,863 6,751 (13,729) (3,937)

(income),

including corporate

administration charges

(2)

-------------------------------------------------------

EBITDA (loss) (1) $ 1,687 $ 8,847 $ 1,086 $ (5,117) $ 6,503

Depreciation and 8,184

amortization expenses

Interest expense 1,278

(income), net

Provision for (benefit 1,482

from) income taxes

Loss (income) from 244

discontinued

operations, net of

taxes

----------

Net income (loss) $ (4,685)