Hudson Highland Group, Inc. has announced financial results
Hudson Highland Group, Inc. has announced financial results for the second quarter ended June 30, 2010 and New Credit Facilities.
2010 Second Quarter Summary
Revenue of $195.0 million, an increase of 12.1 percent from $173.8 million for the second quarter of 2009, and an increase of $14.9 million or 8.2 percent from the first quarter of 2010
Gross margin of $74.2 million, or 38.1 percent of revenue, up 14.4 percent from $64.9 million, or 37.3 percent of revenue for the same period last year, and an increase of $7.8 million or 11.8 percent from the first quarter of 2010
EBITDA* of $3.1 million, or 1.6 percent of revenue, improved from an EBITDA loss of $9.5 million for the second quarter of 2009, which included $3.6 million of restructuring charges and $1.5 million of goodwill and other impairment charges
Net income of $0.2 million, or $0.01 per basic and diluted share, compared with net loss of $17.8 million, or $0.68 per basic and diluted share, for the second quarter of 2009
* EBITDA is defined in the segment tables at the end of this release and includes other non-operating income.
"Our second quarter was highlighted by strong sequential gross margin growth across every major geography, with particular strength in the U.K., Australia and Asia," said Jon Chait, Hudson Highland Group's chairman and chief executive officer. "We have not seen any signs of client pull back from our key markets, but remain cautious given continuing uncertainties in the broader global economy."
"Our operational cost discipline and targeted market investments have served us well throughout this economic cycle, and helped our return to profitability," said Mary Jane Raymond, the company's executive vice president and chief financial officer.
The regional results in constant currency were as follows:
Europe gross margin up 16 percent compared with second quarter 2009, and up 13 percent compared with first quarter 2010, led by 35 percent growth in the U.K. compared with second quarter 2009 and 19 percent sequentially
Australia and New Zealand gross margin up 8 percent compared with second quarter 2009, and up 26 percent compared with first quarter 2010, led by an increase of 40 percent in permanent recruitment compared with second quarter 2009
Asia gross margin up 43 percent compared with second quarter 2009 and up 16 percent compared with first quarter 2010
North America gross margin down 5 percent compared with second quarter 2009, but up 8 percent compared with first quarter 2010
The company also announced the signing of a new $40 million revolving credit facility with RBS Business Capital.
The company ended the second quarter of 2010 with $37.9 million in cash, an increase from $24.1 million in cash at the end of the first quarter, including the proceeds of the equity offering completed in early April. The company had $12.8 million in borrowings under its existing credit facilities at June 30.
Subsequent to quarter end, the company made certain changes to its credit facilities. On August 3, it completed a new (Aus)$15 million ($13.7 million at current exchange rates) financing agreement in Australia with Commonwealth Bank of Australia (CBA), on more favorable terms than existed in the past. Yesterday, the company entered into a revolving loan agreement with RBS Business Capital. This RBS facility is expected to close no later than August 25. The company expects to have $24.4 million of availability through the combination of the RBS and the CBA facilities based on current levels of accounts receivable and borrowings. This represents an increase of $9.2 million in availability. The other existing local facilities will remain in place, which presently provide an additional $3.8 million of availability.
"We consider the arrangements with RBS and CBA to be a significant improvement in our capital structure. They complete our work over the last several quarters to strengthen our capital foundation for growth and liquidity," said Mary Jane Raymond, Hudson Highland Group's chief financial officer.