2019 Q3 Form 10-Q Financial Statement

#000121070819000044 Filed on November 01, 2019

View on sec.gov

Income Statement

Concept 2019 Q3 2018 Q3 2018 Q2
Revenue $25.76M $17.13M $17.02M
YoY Change 50.42% 0.66% -85.02%
Cost Of Revenue $14.37M $6.246M $6.214M
YoY Change 130.0% 32.11% 63.01%
Gross Profit $11.40M $10.88M $10.80M
YoY Change 4.73% -2.59% 0.9%
Gross Profit Margin 44.24% 63.53% 63.48%
Selling, General & Admin $10.90M $11.60M $11.50M
YoY Change -6.03% 4.5% 3.6%
% of Gross Profit 95.65% 106.61% 106.47%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $20.00K $0.00 $0.00
YoY Change -100.0% -100.0%
% of Gross Profit 0.18% 0.0% 0.0%
Operating Expenses $25.27M $11.70M $11.50M
YoY Change 115.97% 4.46% 2.68%
Operating Profit $494.0K -$741.0K -$1.259M
YoY Change -166.67% 74000.0% 168.44%
Interest Expense $88.00K $102.0K $60.00K
YoY Change -13.73% -3500.0% -1600.0%
% of Operating Profit 17.81%
Other Income/Expense, Net -$87.00K -$72.00K -$45.00K
YoY Change 20.83% 278.95% 200.0%
Pretax Income $495.0K -$711.0K -$1.244M
YoY Change -169.62% 2991.3% 154.92%
Income Tax $149.0K $112.0K $109.0K
% Of Pretax Income 30.1%
Net Earnings $364.0K -$870.0K -$1.364M
YoY Change -141.84% 2.59% -211.26%
Net Earnings / Revenue 1.41% -5.08% -8.02%
Basic Earnings Per Share $0.12 -$0.26
Diluted Earnings Per Share $0.12 -$0.26 -$437.5K
COMMON SHARES
Basic Shares Outstanding 3.082M shares 3.310M shares 3.228M shares
Diluted Shares Outstanding 3.118M shares 3.310M shares 3.228M shares

Balance Sheet

Concept 2019 Q3 2018 Q3 2018 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $28.40M $38.40M $38.60M
YoY Change -26.04% 128.57% 159.06%
Cash & Equivalents $28.38M $38.44M $38.64M
Short-Term Investments
Other Short-Term Assets $1.200M $600.0K $1.000M
YoY Change 100.0% -88.0% -83.33%
Inventory
Prepaid Expenses
Receivables $15.69M $14.50M $14.20M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $45.32M $53.53M $53.85M
YoY Change -15.33% -42.52% -42.11%
LONG-TERM ASSETS
Property, Plant & Equipment $189.0K $149.0K $5.000K
YoY Change 26.85% -97.59% -99.92%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $7.000K $55.00K $373.0K
YoY Change -87.27% -98.56% -89.77%
Total Long-Term Assets $1.825M $906.0K $670.0K
YoY Change 101.43% -101.22% -100.89%
TOTAL ASSETS
Total Short-Term Assets $45.32M $53.53M $53.85M
Total Long-Term Assets $1.825M $906.0K $670.0K
Total Assets $47.15M $54.44M $54.52M
YoY Change -13.39% 191.93% 204.25%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.484M $1.206M $806.0K
YoY Change 23.05% -74.27% -89.11%
Accrued Expenses $9.200M $9.600M $8.900M
YoY Change -4.17% -77.98% -79.01%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $10.69M $10.83M $10.07M
YoY Change -1.25% -80.88% -82.22%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Other Long-Term Liabilities $172.0K $295.0K $578.0K
YoY Change -41.69% -92.63% -86.09%
Total Long-Term Liabilities $172.0K $295.0K $578.0K
YoY Change -41.69% -92.63% -86.09%
TOTAL LIABILITIES
Total Short-Term Liabilities $10.69M $10.83M $10.07M
Total Long-Term Liabilities $172.0K $295.0K $578.0K
Total Liabilities $13.19M $13.12M $12.63M
YoY Change 0.51% -79.82% -80.7%
SHAREHOLDERS EQUITY
Retained Earnings -$438.0M -$434.9M -$434.1M
YoY Change 0.7% -1.47% -1.48%
Common Stock $485.9M $484.9M $484.5M
YoY Change 0.21% 0.35% 0.3%
Preferred Stock
YoY Change
Treasury Stock (at cost) $13.01M $8.281M $8.267M
YoY Change 57.09% 9.32% 11.81%
Treasury Stock Shares 721.0K shares 4.087M shares 4.079M shares
Shareholders Equity $33.96M $41.31M $41.89M
YoY Change
Total Liabilities & Shareholders Equity $47.15M $54.44M $54.52M
YoY Change -13.39% -50.43% -50.46%

Cashflow Statement

Concept 2019 Q3 2018 Q3 2018 Q2
OPERATING ACTIVITIES
Net Income $364.0K -$870.0K -$1.364M
YoY Change -141.84% 2.59% -211.26%
Depreciation, Depletion And Amortization $20.00K $0.00 $0.00
YoY Change -100.0% -100.0%
Cash From Operating Activities $190.0K -$70.00K -$3.540M
YoY Change -371.43% -106.93% -184.69%
INVESTING ACTIVITIES
Capital Expenditures $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Acquisitions
YoY Change
Other Investing Activities $0.00 -$70.00K -$10.00K
YoY Change -100.0%
Cash From Investing Activities $0.00 -$60.00K -$10.00K
YoY Change -100.0% -76.0% -80.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -270.0K -10.00K -500.0K
YoY Change 2600.0% -101.08% -89.75%
NET CHANGE
Cash From Operating Activities 190.0K -70.00K -3.540M
Cash From Investing Activities 0.000 -60.00K -10.00K
Cash From Financing Activities -270.0K -10.00K -500.0K
Net Change In Cash -80.00K -140.0K -4.050M
YoY Change -42.86% -108.28% 440.0%
FREE CASH FLOW
Cash From Operating Activities $190.0K -$70.00K -$3.540M
Capital Expenditures $0.00 $0.00 $0.00
Free Cash Flow $190.0K -$70.00K -$3.540M
YoY Change -371.43% -105.56% -183.69%

Facts In Submission

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us-gaap Income Loss From Discontinued Operations Net Of Tax Per Basic Share
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us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2019Q3 us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Reclassification Adjustment From Aoci Realized Upon Sale Or Liquidation Net Of Tax
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us-gaap Other Comprehensive Income Loss Net Of Tax
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CY2019Q3 us-gaap Other Comprehensive Income Loss Net Of Tax
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us-gaap Other Nonoperating Income Expense
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us-gaap Other Selling General And Administrative Expense
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CY2019Q3 us-gaap Other Selling General And Administrative Expense
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us-gaap Other Selling General And Administrative Expense
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us-gaap Payments To Acquire Productive Assets
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us-gaap Repayments Of Short Term Debt
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CY2018Q3 us-gaap Revenues
Revenues
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us-gaap Revenues
Revenues
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Revenues
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StockholdersEquity
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us-gaap Unrecognized Tax Benefits Income Tax Penalties And Interest Expense
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CY2018Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
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us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
3275000 shares
CY2019Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
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us-gaap Weighted Average Number Of Diluted Shares Outstanding
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CY2018Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
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us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
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CY2019Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
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us-gaap Weighted Average Number Of Shares Outstanding Basic
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us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">ACCOUNTING PRONOUNCEMENTS</font></div><div style="line-height:120%;padding-top:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Adoption of New Accounting Pronouncements</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 1, 2019, we adopted Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)"</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> </font><font style="font-family:inherit;font-size:10pt;">("ASU 2016-02"). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. In July 2018, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2018-11, "Leases (Topic 842): Targeted Improvements" ("ASU 2018-11"). This ASU allows adoption of the standard as of the effective date without restating prior periods. We did not elect to recognize the lease assets and liabilities in the statement of financial position for short-term leases. For more information, see Note 10.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 1, 2019, we adopted&#160;ASU No.&#160;2018-02,</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> </font><font style="font-family:inherit;font-size:10pt;">"Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which provides guidance on reclassification of certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), enacted on December 22, 2017. ASU 2018-02&#160;allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the application of the Tax Act. Additionally, ASU 2018-02&#160;requires financial statement preparers to disclose (1) a description of their accounting policy for releasing income tax effects from accumulated other comprehensive income, (2) whether they elect to reclassify the stranded income tax effects from the Tax Act, and (3) information about other income tax effects related to the application of the Tax Act that are reclassified from accumulated other comprehensive income to retained earnings, if any. The adoption had no impact on the Company's consolidated financial statements.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09") and a series of related accounting standard updates designed to create improved revenue recognition and disclosure comparability in financial statements. For more information, see Note 4.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 1, 2018, we retroactively adopted ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." This ASU requires the statements of cash flows to present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are now included with cash and cash equivalents when reconciling the beginning of period and end of period amounts presented on the statements of cash flows. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;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%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, the FASB issued&#160;ASU No.&#160;2018-15, "Customer Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract." ("ASU 2018-15"), which requires implementation costs incurred by customers in a cloud computing arrangement to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in Accounting Standards Codification ("ASC") 350-40. The amendments in ASU 2018-15 are effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact to its consolidated financial statements.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">There are no other recently issued accounting pronouncements that have had, or that the Company believes will have, a material impact on the Company's condensed consolidated financial statements.</font></div></div>
us-gaap Nature Of Operations
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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;">DESCRIPTION OF BUSINESS</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company is comprised of the operations, assets, and liabilities of the Company's </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> regional businesses of Hudson Americas, Hudson Asia Pacific, and Hudson Europe ("Hudson regional businesses" or "Hudson"). The Company provides specialized professional-level recruitment and related talent solutions. During the first quarter of 2018, the Company&#8217;s core service offerings included Recruitment Process Outsourcing ("RPO") and Contracting, as well as other Permanent Recruitment and Talent Management Solutions. On March 31, 2018 the Company completed the sale of its other Permanent Recruitment and Talent Management Solutions ("RTM") businesses in three separate transactions and retained its RPO and Contracting businesses. The RTM businesses are reported as discontinued operations in 2018. For more information, see Note 5.</font></div><div style="line-height:120%;padding-top:12px;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As a result of the divestiture of the RTM businesses, the Company now operates directly in </font><font style="font-family:inherit;font-size:10pt;">eleven</font><font style="font-family:inherit;font-size:10pt;"> countries with </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> reportable geographic business segments: Americas, Asia Pacific, and Europe. See Note 13 for further details regarding the reportable segments. </font></div><div style="line-height:120%;padding-top:12px;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s core service offering following the divestiture is RPO. The Company delivers RPO permanent recruitment and contracting outsourced recruitment solutions tailored to the individual needs of primarily mid-to-large-cap multinational companies. The Company's RPO delivery teams utilize state-of-the-art recruitment process methodologies and project management expertise in their flexible, turnkey solutions to meet clients' ongoing business needs. The Company's RPO services include complete recruitment outsourcing, project-based outsourcing, contingent workforce solutions, and recruitment consulting.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;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;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:10px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:120%;padding-bottom:10px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On June 10, 2019, the Company announced a reverse stock split of its outstanding shares of common stock at a ratio of 1-for-10 (the &#8220;Reverse Split&#8221;) and that it had filed a Certificate of Amendment of the Company's Amended and Restated Certificate of Incorporation in order to effect the Reverse Split. The filed certificate also reduced the number of authorized shares of common stock to 20 million shares. The Reverse Split and reduction in authorized shares was approved by the Company's Board of Directors (the "Board") on February 25, 2019, and it was approved by the stockholders of the Company at the annual meeting on May 6, 2019. The Board approved the ratio of 1-for-10 on May 24, 2019, and the Reverse Split became effective as of the close of business on June 10, 2019. The Reverse Split had no effect on the par value of the Company's common stock but it reduced the number of issued and outstanding shares of common stock by a factor of 10. Accordingly, the issued and outstanding shares, stock-based compensation disclosures, net loss per share, and other share and per share disclosures for all periods presented have been retrospectively adjusted to reflect the impact of this Reverse Split.</font></div></div>

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