Attached files
file | filename |
---|---|
8-K - Hudson Global, Inc. | v210594_8k.htm |
EX-99.2 - Hudson Global, Inc. | v210594_ex99-2.htm |
Exhibit
99.1
For Immediate Release
|
Contact:
|
David
F. Kirby
|
||
Hudson
Highland Group
|
||||
212-351-7216
|
||||
|
|
david.kirby@hudson.com
|
Hudson
Highland Group Reports 2010
Fourth
Quarter and Full Year Financial Results
NEW YORK, NY – February 9, 2011 –
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
HUDSON
HIGHLAND GROUP, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in
thousands, except share and per share amounts)
(unaudited)
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenue
|
$ | 219,061 | $ | 182,504 | $ | 794,542 | $ | 691,149 | ||||||||
Direct
costs
|
136,137 | 113,129 | 495,969 | 430,696 | ||||||||||||
Gross
margin
|
82,924 | 69,375 | 298,573 | 260,453 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling,
general and administrative expenses
|
80,192 | 69,192 | 294,313 | 277,634 | ||||||||||||
Depreciation
and amortization
|
1,730 | 3,174 | 8,184 | 12,543 | ||||||||||||
Business
reorganization and integration expenses
|
988 | 5,900 | 1,694 | 18,180 | ||||||||||||
Goodwill
and other impairment charges
|
- | - | - | 1,549 | ||||||||||||
Total
operating expenses
|
82,910 | 78,266 | 304,191 | 309,906 | ||||||||||||
Operating
income (loss)
|
14 | (8,891 | ) | (5,618 | ) | (49,453 | ) | |||||||||
Other
income (expense):
|
||||||||||||||||
Interest,
net
|
(306 | ) | (225 | ) | (1,278 | ) | (694 | ) | ||||||||
Other,
net
|
1,812 | 669 | 4,500 | 1,444 | ||||||||||||
Fee
for early extinguishment of credit facility
|
- | - | (563 | ) | - | |||||||||||
Income
(loss) from continuing operations before provision for income
taxes
|
1,520 | (8,447 | ) | (2,959 | ) | (48,703 | ) | |||||||||
Provision
for (benefit from) income taxes
|
116 | (3,450 | ) | 1,482 | (5,750 | ) | ||||||||||
Income
(loss) from continuing operations
|
1,404 | (4,997 | ) | (4,441 | ) | (42,953 | ) | |||||||||
Income
(loss) from discontinued operations, net of income taxes
|
(213 | ) | (5,429 | ) | (244 | ) | 2,344 | |||||||||
Net
income (loss)
|
$ | 1,191 | $ | (10,426 | ) | $ | (4,685 | ) | $ | (40,609 | ) | |||||
Basic
earnings (loss) per share:
|
||||||||||||||||
Income
(loss) from continuing operations
|
$ | 0.04 | $ | (0.19 | ) | $ | (0.15 | ) | $ | (1.65 | ) | |||||
Income
(loss) from discontinued operations
|
(0.01 | ) | (0.21 | ) | (0.01 | ) | 0.09 | |||||||||
Net
income (loss)
|
$ | 0.04 | $ | (0.40 | ) | $ | (0.16 | ) | $ | (1.56 | ) | |||||
Diluted
earnings (loss) per share:
|
||||||||||||||||
Income
(loss) from continuing operations
|
$ | 0.04 | $ | (0.19 | ) | $ | (0.15 | ) | $ | (1.65 | ) | |||||
Income
(loss) from discontinued operations
|
(0.01 | ) | (0.21 | ) | (0.01 | ) | 0.09 | |||||||||
Net
loss
|
$ | 0.04 | $ | (0.40 | ) | $ | (0.16 | ) | $ | (1.56 | ) | |||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
31,234 | 26,329 | 29,931 | 26,036 | ||||||||||||
Diluted
|
31,754 | 26,329 | 29,931 | 26,036 |
HUDSON
HIGHLAND GROUP, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
thousands, except per share amounts)
(unaudited)
December 31,
|
||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 29,523 | $ | 36,064 | ||||
Accounts
receivable, net
|
128,576 | 98,994 | ||||||
Prepaid
and other
|
13,988 | 13,308 | ||||||
Total
current assets
|
172,087 | 148,366 | ||||||
Property
and equipment, net
|
16,593 | 19,433 | ||||||
Other
assets
|
17,154 | 14,145 | ||||||
Total
assets
|
$ | 205,834 | $ | 181,944 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 14,812 | $ | 12,811 | ||||
Accrued
expenses and other current liabilities
|
74,990 | 54,103 | ||||||
Short-term
borrowings
|
1,339 | 10,456 | ||||||
Accrued
business reorganization expenses
|
2,619 | 8,784 | ||||||
Total
current liabilities
|
93,760 | 86,154 | ||||||
Other
non-current liabilities
|
10,493 | 11,115 | ||||||
Income
tax payable, non-current
|
8,303 | 8,415 | ||||||
Total
liabilities
|
112,556 | 105,684 | ||||||
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; issued 32,181 and
26,836 shares, respectively
|
32 | 27 | ||||||
Additional
paid-in capital
|
466,582 | 445,541 | ||||||
Accumulated
deficit
|
(408,199 | ) | (403,514 | ) | ||||
Accumulated
other comprehensive income—translation adjustments
|
34,902 | 34,509 | ||||||
Treasury
stock, 9 and 114 shares, respectively, at cost
|
(39 | ) | (303 | ) | ||||
Total
stockholders’ equity
|
93,278 | 76,260 | ||||||
Total
liabilities and stockholders' equity
|
$ | 205,834 | $ | 181,944 |
HUDSON
HIGHLAND GROUP, INC.
SEGMENT
ANALYSIS - QUARTER TO DATE
(in
thousands)
(unaudited)
For The Three Months Ended December 31, 2010
|
Hudson
Europe
|
Hudson ANZ
|
Hudson
Americas
|
Hudson Asia
|
Corporate
|
Total
|
||||||||||||||||||
Revenue,
from external customers
|
$ | 90,616 | $ | 74,338 | $ | 44,268 | $ | 9,839 | $ | - | $ | 219,061 | ||||||||||||
Gross
margin, from external customers
|
$ | 37,468 | $ | 25,231 | $ | 10,775 | $ | 9,450 | $ | - | $ | 82,924 | ||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 865 | $ | 102 | $ | 21 | $ | - | $ | - | $ | 988 | ||||||||||||
Non-operating
expense (income), including corporate administration
charges
|
1,337 | 886 | (1,298 | ) | 243 | (2,980 | ) | (1,812 | ) | |||||||||||||||
EBITDA
(Loss) (1)
|
$ | 314 | $ | 1,254 | $ | 2,386 | $ | 1,524 | $ | (1,922 | ) | $ | 3,556 | |||||||||||
Depreciation
and amortization expenses
|
1,730 | |||||||||||||||||||||||
Interest
expense (income), net
|
306 | |||||||||||||||||||||||
Provision
for (benefit from) income taxes
|
116 | |||||||||||||||||||||||
Loss
(income) from discontinued operations, net of taxes
|
213 | |||||||||||||||||||||||
Net
income (loss)
|
$ | 1,191 |
For The Three Months Ended December 31, 2009
|
Hudson
Europe
|
Hudson ANZ
|
Hudson
Americas
|
Hudson Asia
|
Corporate
|
Total
|
||||||||||||||||||
Revenue,
from external customers
|
$ | 74,502 | $ | 61,494 | $ | 39,011 | $ | 7,497 | $ | - | $ | 182,504 | ||||||||||||
Gross
margin, from external customers
|
$ | 33,006 | $ | 18,970 | $ | 10,220 | $ | 7,179 | $ | - | $ | 69,375 | ||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 3,135 | $ | 849 | $ | 1,794 | $ | - | $ | 122 | $ | 5,900 | ||||||||||||
Non-operating
expense (income), including corporate administration
charges
|
91 | 177 | (936 | ) | (22 | ) | 21 | (669 | ) | |||||||||||||||
EBITDA
(Loss) (1)
|
$ | (1,553 | ) | $ | (492 | ) | $ | (1,162 | ) | $ | 1,167 | $ | (3,008 | ) | $ | (5,048 | ) | |||||||
Depreciation
and amortization expenses
|
3,174 | |||||||||||||||||||||||
Interest
expense (income), net
|
225 | |||||||||||||||||||||||
Provision
for (benefit from) income taxes
|
(3,450 | ) | ||||||||||||||||||||||
Loss
(income) from discontinued operations, net of taxes
|
5,429 | |||||||||||||||||||||||
Net
income (loss)
|
$ | (10,426 | ) |
For the Three Months Ended September 30, 2010
|
Hudson
Europe
|
Hudson ANZ
|
Hudson
Americas
|
Hudson Asia
|
Corporate
|
Total
|
||||||||||||||||||
Revenue,
from external customers
|
$ | 80,503 | $ | 72,974 | $ | 37,839 | $ | 9,078 | $ | - | $ | 200,394 | ||||||||||||
Gross
margin, from external customers
|
$ | 32,647 | $ | 24,259 | $ | 9,311 | $ | 8,774 | $ | - | $ | 74,991 | ||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | - | $ | - | $ | 41 | $ | - | $ | - | $ | 41 | ||||||||||||
Non-operating
expense (income), including corporate administration
charges
|
3,088 | 1,433 | (407 | ) | 478 | (5,213 | ) | (621 | ) | |||||||||||||||
EBITDA
(Loss) (1)
|
$ | (2,128 | ) | $ | 1,376 | $ | 532 | $ | 1,169 | $ | 244 | $ | 1,193 | |||||||||||
Depreciation
and amortization expenses
|
1,981 | |||||||||||||||||||||||
Interest
expense (income), net
|
497 | |||||||||||||||||||||||
Provision
for (benefit from) income taxes
|
599 | |||||||||||||||||||||||
Loss
(income) from discontinued operations, net of taxes
|
14 | |||||||||||||||||||||||
Net
income (loss)
|
$ | (1,898 | ) |
For the Three Months Ended March 31, 2010
|
Hudson
Europe
|
Hudson ANZ
|
Hudson
Americas
|
Hudson Asia
|
Corporate
|
Total
|
||||||||||||||||||
Revenue,
from external customers
|
$ | 76,654 | $ | 56,822 | $ | 39,507 | $ | 7,135 | $ | - | $ | 180,118 | ||||||||||||
Gross
margin, from external customers
|
$ | 32,530 | $ | 17,776 | $ | 9,279 | $ | 6,836 | $ | - | $ | 66,421 | ||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 87 | $ | (116 | ) | $ | 142 | $ | - | $ | - | $ | 113 | |||||||||||
Non-operating
expense (income), including corporate administration
charges
|
1,178 | 582 | (509 | ) | 188 | (2,097 | ) | (658 | ) | |||||||||||||||
EBITDA
(Loss) (1)
|
$ | 436 | $ | 249 | $ | (241 | ) | $ | 597 | $ | (2,408 | ) | $ | (1,367 | ) | |||||||||
Depreciation
and amortization expenses
|
2,287 | |||||||||||||||||||||||
Interest
expense (income), net
|
232 | |||||||||||||||||||||||
Provision
for (benefit from) income taxes
|
252 | |||||||||||||||||||||||
Loss
(income) from discontinued operations, net of taxes
|
69 | |||||||||||||||||||||||
Net
income (loss)
|
$ | (4,207 | ) |
(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.
|
HUDSON
HIGHLAND GROUP, INC.
SEGMENT
ANALYSIS - YEAR TO DATE
(in
thousands)
(unaudited)
For The Year Ended December 31, 2010
|
Hudson
Europe
|
Hudson ANZ
|
Hudson
Americas
|
Hudson Asia
|
Corporate
|
Total
|
||||||||||||||||||
Revenue,
from external customers
|
$ | 328,491 | $ | 269,383 | $ | 162,432 | $ | 34,236 | $ | - | $ | 794,542 | ||||||||||||
Gross
margin, from external customers
|
$ | 137,191 | $ | 88,989 | $ | 39,417 | $ | 32,976 | $ | - | $ | 298,573 | ||||||||||||
Business
reorganization and integration expenses (recovery)
|
$ | 1,402 | $ | (15 | ) | $ | 307 | $ | - | $ | - | $ | 1,694 | |||||||||||
Non-operating
expense (income), including corporate administration
charges
|
6,751 | 3,916 | (1,822 | ) | 947 | (13,729 | ) | (3,937 | ) | |||||||||||||||
EBITDA
(Loss) (1)
|
$ | 1,086 | $ | 4,248 | $ | 1,687 | $ | 4,599 | $ | (5,117 | ) | $ | 6,503 | |||||||||||
Depreciation
and amortization expenses
|
8,184 | |||||||||||||||||||||||
Interest
expense (income), net
|
1,278 | |||||||||||||||||||||||
Provision
for (benefit from) income taxes
|
1,482 | |||||||||||||||||||||||
Loss
(income) from discontinued operations, net of taxes
|
244 | |||||||||||||||||||||||
Net
income (loss)
|
$ | (4,685 | ) |
For The Year Ended December 31, 2009
|
Hudson
Europe
|
Hudson ANZ
|
Hudson
Americas
|
Hudson Asia
|
Corporate
|
Total
|
||||||||||||||||||
Revenue,
from external customers
|
$ | 276,975 | $ | 227,169 | $ | 161,872 | $ | 25,133 | $ | - | $ | 691,149 | ||||||||||||
Gross
margin, from external customers
|
$ | 124,162 | $ | 71,689 | $ | 40,959 | $ | 23,643 | $ | - | $ | 260,453 | ||||||||||||
Goodwill
and other impairment (recovery)
|
$ | - | $ | - | $ | (120 | ) | $ | 1,669 | $ | - | $ | 1,549 | |||||||||||
Business
reorganization and integration expenses (recovery)
|
9,682 | 3,130 | 5,133 | 98 | 137 | 18,180 | ||||||||||||||||||
Non-operating
expense (income), including corporate administration
charges
|
1,528 | 94 | 769 | (173 | ) | (3,662 | ) | (1,444 | ) | |||||||||||||||
EBITDA
(Loss) (1)
|
$ | (9,787 | ) | $ | (274 | ) | $ | (11,349 | ) | $ | (551 | ) | $ | (13,505 | ) | $ | (35,466 | ) | ||||||
Depreciation
and amortization expenses
|
12,543 | |||||||||||||||||||||||
Interest
expense (income), net
|
694 | |||||||||||||||||||||||
Provision
for (benefit from) income taxes
|
(5,750 | ) | ||||||||||||||||||||||
Loss
(income) from discontinued operations, net of taxes
|
(2,344 | ) | ||||||||||||||||||||||
Net
income (loss)
|
$ | (40,609 | ) |
(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.
|
Reconciliation
For Constant Currency
(in
thousands)
(unaudited)
The
company operates on a global basis, with the majority of our gross margin
generated outside of the United States. Accordingly, fluctuations in foreign
currency exchange rates can affect our results of operations. Constant currency
information compares financial results between periods as if exchange rates had
remained constant period-over-period. The company currently defines the term
“constant currency” to mean that financial data for a previously reported period
are translated into U.S. dollars using the same foreign currency exchange rates
that were used to translate financial data for the current period.
In prior
periods the company reported constant currency by translating financial data for
the current reported period into U.S. dollars using the same foreign currency
exchange rates that were used to translate financial data for the previously
reported period. The company’s current definition of constant currency produces
similar results to the previous method with inconsequential differences and was
implemented to improve operating efficiencies. The impact to the variance
analysis of presenting constant currency results under the current definition
was a change of less than 2% for any single reportable segment’s revenues, gross
margin and SG&A.
Changes
in revenue, direct costs, gross margin, selling, general and administrative
expenses and operating (loss) income include the effect of changes in foreign
currency exchange rates. Variance analysis usually describes period-to-period
variances that are calculated using constant currency as a percentage. The
company’s management reviews and analyzes business results in constant currency
and believes these results better represent the company’s underlying business
trends.
The
company believes that these calculations are a useful measure, indicating the
actual change in operations. Earnings from subsidiaries are rarely repatriated
to the United States, and there are no significant gains or losses on foreign
currency transactions between subsidiaries. Therefore, changes in foreign
currency exchange rates generally impact only reported earnings and not the
company’s economic condition.
For The Three Months Ended December 31,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Currency
|
Constant
|
|||||||||||||||
As reported
|
As reported
|
translation
|
currency
|
|||||||||||||
Revenue:
|
||||||||||||||||
Hudson
Europe
|
$ | 90,616 | $ | 74,502 | $ | (3,717 | ) | $ | 70,785 | |||||||
Hudson
ANZ
|
74,338 | 61,494 | 5,121 | 66,615 | ||||||||||||
Hudson
Americas
|
44,268 | 39,011 | 12 | 39,023 | ||||||||||||
Hudson
Asia
|
9,839 | 7,497 | 315 | 7,812 | ||||||||||||
Total
|
219,061 | 182,504 | 1,731 | 184,235 | ||||||||||||
Direct
costs:
|
||||||||||||||||
Hudson
Europe
|
53,148 | 41,496 | (1,862 | ) | 39,634 | |||||||||||
Hudson
ANZ
|
49,107 | 42,524 | 3,516 | 46,040 | ||||||||||||
Hudson
Americas
|
33,493 | 28,791 | - | 28,791 | ||||||||||||
Hudson
Asia
|
389 | 318 | 15 | 333 | ||||||||||||
Total
|
136,137 | 113,129 | 1,669 | 114,798 | ||||||||||||
Gross
margin:
|
||||||||||||||||
Hudson
Europe
|
37,468 | 33,006 | (1,855 | ) | 31,151 | |||||||||||
Hudson
ANZ
|
25,231 | 18,970 | 1,605 | 20,575 | ||||||||||||
Hudson
Americas
|
10,775 | 10,220 | 12 | 10,232 | ||||||||||||
Hudson
Asia
|
9,450 | 7,179 | 300 | 7,479 | ||||||||||||
Total
|
$ | 82,924 | $ | 69,375 | $ | 62 | $ | 69,437 | ||||||||
Selling,
general and administrative (a):
|
||||||||||||||||
Hudson
Europe
|
$ | 35,632 | $ | 32,165 | $ | (1,726 | ) | $ | 30,439 | |||||||
Hudson
ANZ
|
23,622 | 19,250 | 1,587 | 20,837 | ||||||||||||
Hudson
Americas
|
9,905 | 11,833 | 11 | 11,844 | ||||||||||||
Hudson
Asia
|
7,824 | 6,210 | 239 | 6,449 | ||||||||||||
Corporate
|
4,937 | 2,908 | - | 2,908 | ||||||||||||
Total
|
$ | 81,920 | $ | 72,366 | $ | 111 | $ | 72,477 |
(a)
|
Selling,
general and administrative expenses include depreciation and amortization
expenses.
|