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UK gross margin up 21% in Q1 2018 for Hudson Global

Hudson Global, Inc. has reported its financial results for the first quarter ended 31st March 2018.

 

Revenue of $16.2m increased 15.9% from the first quarter of 2017, or 10.7% in constant currency.

 

Gross margin of $10.2m increased 1.5% from the first quarter of 2017, but declined 2.5% in constant currency.

 

Net income of $10.7m, or $0.33 per basic and diluted share, including income from discontinued operations of $13.6m related to the sale of its recruitment and talent management businesses, compared with net loss of $1.3m, or $0.04 per basic and diluted share, for the first quarter of 2017.
 

An adjusted EBITDA loss of $2.2m, including $1.8m of severance expense relating to the resignation of the former chief executive officer, compared with adjusted EBITDA loss of $0.2m in the first quarter of 2017.

 

Jeff Eberwein, chief executive officer at Hudson Global, commented, “Revenue growth in the first quarter was boosted by growth in Asia Pacific, while revenue was impacted by the loss of a global contract in 2017 in the Americas and Europe. We are pleased to have completed our recent divestitures and are focused squarely on the recruitment process outsourcing (“RPO”) business. 

 

“After a busy first month in this new role, I look forward to continuing to work closely with our global leaders, developing strong client relationships, driving growth in our RPO business, improving our cost structure and delivering improved performance going forward.”

 

On 31st March 2018, Hudson Global completed the sales of its recruitment and talent management operations in Europe and Asia Pacific to strategic buyers in three transactions. Hudson Global intends to focus on its growing, global RPO business going forward. Hudson Global received gross proceeds of $39.0m in cash at closing, subject to customary post-closing adjustments. The proceeds included $24.8m for recruitment and talent management operations in Benelux, $7.7m for the recruitment and talent management operations in the rest of Europe, and $6.4m for the recruitment and talent management operations in Asia Pacific. All Hudson Global debt was transferred to the buyers with the divestitures.

 

In the first quarter of 2018, Hudson Global Americas' revenue of $3.7m decreased 14% while gross margin of $3.1m decreased 19% compared with the first quarter of 2017. Growth in financial service and life sciences was offset by lower volumes elsewhere including the conclusion of a large global contract in the third quarter of 2017. EBITDA was $0.3m in the first quarter, unchanged from a year ago. The region delivered adjusted EBITDA of $0.4m for the first quarter, compared with adjusted EBITDA of $0.3m a year ago.

 

Hudson Global Asia Pacific's revenue of $8.8m increased 35% while gross margin of $4.9m increased 14% in constant currency in the first quarter of 2018 compared with the same period in 2017. Growth was driven by a new client win in the fourth quarter of 2017 and higher volumes at existing clients. EBITDA was $0.5m in the first quarter, compared with EBITDA of $0.7m a year ago. Asia Pacific delivered adjusted EBITDA of $0.6m, compared with adjusted EBITDA of $0.8 million in the first quarter of 2017.

 

Hudson Global Europe's revenue of $3.7m decreased 2% while gross margin of $2.1m decreased 6% in constant currency in the first quarter of 2018 compared with the first quarter of 2017. Gross margin growth in the UK of 21% was offset by declines in Continental Europe, due to a large global contract that ended in the third quarter of 2017. EBITDA was $0.0m in the first quarter, compared with $0.2m a year ago. Adjusted EBITDA was $0.1m in the first quarter of 2018, compared with $0.2m a year ago.

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