2013 Q2 Form 10-Q Financial Statement

#000121070813000028 Filed on July 31, 2013

View on sec.gov

Income Statement

Concept 2013 Q2 2012 Q2
Revenue $171.4M $204.8M
YoY Change -16.34% -17.2%
Cost Of Revenue $110.9M $127.8M
YoY Change -13.24% -15.89%
Gross Profit $55.11M $77.07M
YoY Change -28.5% -19.27%
Gross Profit Margin 32.16% 37.62%
Selling, General & Admin $63.02M $73.54M
YoY Change -14.3% -15.87%
% of Gross Profit 114.37% 95.42%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $1.650M $1.610M
YoY Change 2.48% -1.23%
% of Gross Profit 2.99% 2.09%
Operating Expenses $63.02M $73.54M
YoY Change -14.3% -15.87%
Operating Profit -$5.941M -$3.167M
YoY Change 87.59% -152.52%
Interest Expense -$155.0K -$189.0K
YoY Change -17.99% -49.6%
% of Operating Profit
Other Income/Expense, Net -$94.00K -$369.0K
YoY Change -74.53% 7280.0%
Pretax Income -$5.673M -$3.725M
YoY Change 52.3% -165.93%
Income Tax $138.0K -$4.119M
% Of Pretax Income
Net Earnings -$5.811M $394.0K
YoY Change -1574.87% -90.67%
Net Earnings / Revenue -3.39% 0.19%
Basic Earnings Per Share -$0.18 $0.01
Diluted Earnings Per Share -$0.18 $0.01
COMMON SHARES
Basic Shares Outstanding 32.72M shares 32.12M shares
Diluted Shares Outstanding 32.72M shares 32.49M shares

Balance Sheet

Concept 2013 Q2 2012 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $28.30M $28.90M
YoY Change -2.08% -17.19%
Cash & Equivalents $28.31M $28.94M
Short-Term Investments
Other Short-Term Assets $11.50M $13.40M
YoY Change -14.18% -10.67%
Inventory
Prepaid Expenses
Receivables $103.6M $126.0M
Other Receivables $0.00 $0.00
Total Short-Term Assets $143.4M $168.4M
YoY Change -14.8% -19.56%
LONG-TERM ASSETS
Property, Plant & Equipment $16.68M $21.19M
YoY Change -21.3% 23.91%
Goodwill $2.033M $1.998M
YoY Change 1.75% 2.62%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $5.704M $5.608M
YoY Change 1.71% -69.02%
Total Long-Term Assets $31.92M $38.30M
YoY Change -16.65% 8.75%
TOTAL ASSETS
Total Short-Term Assets $143.4M $168.4M
Total Long-Term Assets $31.92M $38.30M
Total Assets $175.4M $206.7M
YoY Change -15.14% -15.49%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $9.144M $11.00M
YoY Change -16.83% -20.33%
Accrued Expenses $60.30M $67.80M
YoY Change -11.06% -31.24%
Deferred Revenue
YoY Change
Short-Term Debt $659.0K $1.460M
YoY Change -54.86% -85.54%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $70.10M $80.28M
YoY Change -12.68% -34.46%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $6.389M $6.131M
YoY Change 4.21% -67.9%
Total Long-Term Liabilities $6.389M $6.131M
YoY Change 4.21% -67.9%
TOTAL LIABILITIES
Total Short-Term Liabilities $70.10M $80.28M
Total Long-Term Liabilities $6.389M $6.131M
Total Liabilities $87.15M $99.66M
YoY Change -12.55% -29.62%
SHAREHOLDERS EQUITY
Retained Earnings -$401.1M -$400.1M
YoY Change 0.24%
Common Stock $474.9M $472.7M
YoY Change 0.47%
Preferred Stock
YoY Change
Treasury Stock (at cost) $843.0K $296.0K
YoY Change 184.8%
Treasury Stock Shares 204.0K shares 61.00K shares
Shareholders Equity $88.21M $107.0M
YoY Change
Total Liabilities & Shareholders Equity $175.4M $206.7M
YoY Change -15.14% -15.48%

Cashflow Statement

Concept 2013 Q2 2012 Q2
OPERATING ACTIVITIES
Net Income -$5.811M $394.0K
YoY Change -1574.87% -90.67%
Depreciation, Depletion And Amortization $1.650M $1.610M
YoY Change 2.48% -1.23%
Cash From Operating Activities -$3.430M $8.200M
YoY Change -141.83% -19.13%
INVESTING ACTIVITIES
Capital Expenditures -$470.0K -$5.060M
YoY Change -90.71% 118.1%
Acquisitions
YoY Change
Other Investing Activities $0.00
YoY Change
Cash From Investing Activities -$470.0K -$5.060M
YoY Change -90.71% 118.1%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 430.0K 1.370M
YoY Change -68.61% -191.95%
NET CHANGE
Cash From Operating Activities -3.430M 8.200M
Cash From Investing Activities -470.0K -5.060M
Cash From Financing Activities 430.0K 1.370M
Net Change In Cash -3.470M 4.510M
YoY Change -176.94% -28.75%
FREE CASH FLOW
Cash From Operating Activities -$3.430M $8.200M
Capital Expenditures -$470.0K -$5.060M
Free Cash Flow -$2.960M $13.26M
YoY Change -122.32% 6.42%

Facts In Submission

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-05, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">&#8220;Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity&#8221;</font><font style="font-family:inherit;font-size:10pt;"> (&#8220;ASU 2013-05&#8221;). ASU 2013-05 provides clarification regarding whether Subtopic 810-10, Consolidation - Overall, or Subtopic 830-30, Foreign Currency Matters - Translation of Financial Statements, applies to the release of cumulative translation adjustments into net income when a reporting entity either sells a part or all of its investment in a foreign entity or ceases to have a controlling financial interest in a subsidiary or group of assets that constitute a business within a foreign entity. ASU 2013-05 is effective prospectively for reporting periods beginning after December 15, 2013, with early adoption permitted. The Company's adoption of ASU 2013-05 is not expected to have a material impact on the Company's Consolidated Financial Statements. </font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2013, the FASB issued ASU 2013-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">"Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income"</font><font style="font-family:inherit;font-size:10pt;">, an amendment to FASB ASC Topic 220. ASU 2013-02 requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of the statement of operations or in the notes to financial statements, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. ASU 2013-02 is effective prospectively for the Company for annual and interim periods beginning January 1, 2013. The Company's adoption of ASU 2013-02 did not have a material impact on the Company's Consolidated Financial Statements.</font></div></div>
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">NOTE 2 &#8211; DESCRIPTION OF BUSINESS</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company is comprised of the operations, assets and liabilities of the three Hudson regional businesses of Hudson Americas, Hudson Asia Pacific, and Hudson Europe (&#8220;Hudson regional businesses&#8221; or &#8220;Hudson&#8221;). The Company provides specialized professional-level recruitment and related talent solutions worldwide. The Company&#8217;s core service offerings include Permanent Recruitment, Contract Consulting, Legal eDiscovery, Recruitment Process Outsourcing (&#8220;RPO&#8221;) and Talent Management Solutions.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has operated as an independent publicly-held company since April 1, 2003 when the eResourcing division of Monster Worldwide, Inc., formerly TMP Worldwide, Inc., composed of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">67</font><font style="font-family:inherit;font-size:10pt;"> acquisitions made between 1999 and 2001, was spun off. As of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June&#160;30, 2013</font><font style="font-family:inherit;font-size:10pt;">, the Company had approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">2,000</font><font style="font-family:inherit;font-size:10pt;">&#160;employees operating in </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">20</font><font style="font-family:inherit;font-size:10pt;"> countries with </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">three</font><font style="font-family:inherit;font-size:10pt;"> reportable geographic business segments: Hudson Americas, Hudson Asia Pacific, and Hudson Europe. See Note </font><font style="font-family:inherit;font-size:10pt;color:#000000;font-weight:normal;text-decoration:none;">16</font><font style="font-family:inherit;font-size:10pt;"> in this Form 10-Q for further details regarding the reportable segments. </font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Corporate expenses are reported separately from the reportable segments and pertain to certain functions, such as executive management, corporate governance, human resources, accounting, tax, marketing, information technology and treasury. A portion of these expenses are attributed to the reportable segments for providing the above services to them and have been allocated to the segments as management service fees and are included in the segments&#8217; non-operating other income (expense).</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s core service offerings include those services described below.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Permanent Recruitment:</font><font style="font-family:inherit;font-size:10pt;"> Offered on both a retained and contingent basis, Hudson&#8217;s Permanent Recruitment services leverage its consultants, psychologists and other professionals in the development and delivery of its proprietary methods to identify, select and engage the best-fit talent for critical client roles.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Contract Consulting:</font><font style="font-family:inherit;font-size:10pt;"> In Contract Consulting, Hudson provides a range of project management, interim management and professional contract staffing services. These services draw upon a combination of specialized recruiting and project management competencies to deliver a wide range of solutions. Hudson-employed professionals &#8211; either individually or as a team &#8211; are placed with client organizations for a defined period of time based on a client's specific business need.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Legal eDiscovery:</font><font style="font-family:inherit;font-size:10pt;"> Hudson&#8217;s Legal eDiscovery services are composed of eDiscovery solutions, managed document review (encompassing logistical deployment, project management, process design and productivity management), and contract attorney staffing. The most comprehensive of these is the Company&#8217;s full-service eDiscovery solution, providing an integrated system of discovery management and review technology deployment for both corporate and law firm clients.&#160;</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">RPO:</font><font style="font-family:inherit;font-size:10pt;"> Hudson RPO delivers outsourced recruitment solutions tailored to the individual needs of mid- to large-cap multinational companies. Hudson RPO&#8217;s delivery teams utilize state-of-the-art recruitment process methodologies and project management expertise in their flexible, turnkey solutions to meet clients&#8217; ongoing business needs. Hudson RPO services include complete recruitment outsourcing, project-based outsourcing, contingent workforce solutions and recruitment consulting.</font></div><div style="line-height:120%;padding-top:12px;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Talent Management Solutions:</font><font style="font-family:inherit;font-size:10pt;"> Featuring embedded proprietary talent assessment and selection methodologies, Hudson&#8217;s Talent Management capability encompasses services such as talent assessment (utilizing a variety of competency, attitude and experiential testing), interview training, executive coaching, employee development and outplacement.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>
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Hudson Global, Inc.

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