Hudson Global, Inc (NASDAQ:HSON) Q1 2019 Earnings Conference Call Transcript

May 09, 2019 • 10:00 am ET


Hudson Global, Inc (NASDAQ:HSON) Q1 2019 Earnings Conference Call Transcript


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Good morning, and welcome to the Hudson Global Conference Call for the First Quarter of 2019. Our call this morning will be led by Chief Executive Officer, Jeff Eberwein; and Chief Financial Officer, Patrick Lyons.

Please be advised that except for historical information, the statements made during the presentation constitute forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are discussed in our Form 8-K filed today and in our other filings made with the Securities and Exchange Commission, including our annual report on Form 10-K. The company disclaims any obligation to update any forward-looking statements.

During the course of this conference call, references will be made to non-GAAP terms such as adjusted EBITDA. An adjusted EBITDA reconciliation is included in our earnings release and quarterly slides, both posted on our website, I encourage you to access our earnings materials at this time as they will serve you as A helpful reference guide during our call.

I would now like to turn the call over to Jeff Eberwein. Sir?

Jeffrey Eberwein

Thank you, operator. And welcome, everyone. We thank you for your interest in Hudson Global and for joining us, today. I'll review the first quarter 2019 results, then give some perspective on our RPO business, Hudson's corporate cost and trends we see going forward. Patrick Lyons, our CFO will then provide some additional details on our first quarter 2019 results. I'll then review our outlook for 2019.

For the first quarter of 2019, we reported revenue of $16.2 million, up 9% year-over-year in constant currency. Gross profit of $9.4 million was down 2% year-over-year in constant currency as strong growth throughout Asia was offset by weakness in the Americas year-over-year. SG&A costs were $11.2 million in the first quarter, down 5% versus the same period last year in constant currency. We reported an adjusted EBITDA loss of $1.8 million compared to an adjusted EBITDA loss of $2.2 million a year ago.

Turning to regional and country performance in the first quarter. Asia Pacific, once again had a great quarter with solid year-on-year growth in revenue, up 13% and gross profit, up 3% in constant currency. Growth in Q1 was particularly strong in Hong Kong and Singapore with gross profit overall in Asia growing 11%, driven by new client wins. Gross profit in Australia was flat year-over-year. America's gross profit was down 12% year-over-year, due to weaker volumes from existing clients but also due to the end of a client engagement in the media sector that occurred at the end of Q1 2018, which went in-house. Adjusted EBITDA loss of $300,000 was down from adjusted EBITDA of $400,000 a year ago.

In Europe, revenue was up 27% while gross profit was flat in constant currency. The revenue growth was driven by both the UK and Continental Europe. While the overall results were mixed for our company in the first quarter