NEW YORK, Feb. 9, 2011 (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 .
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 .
The archived call will be available on the investor information section of the company's Web site at .
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 .
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
CONTACT: David F. Kirby Hudson Highland Group 212-351-7216 david.kirby@hudson.com