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Hudson Revenue Falls, Plans $10 Million Restructuring

May 01 2012

First-quarter revenue fell 8.2 percent year-over-year at Hudson Global Inc. (NASD: HSON) to $200.6 million. The New York-based staffing provider also reported it plans to take a restructuring charge of up to $10 million in 2012.

Hudson Global is the new name for Hudson Highland Group Inc. The change took place last month.

Restructuring activity in the first quarter totaled $1.3 million and, primarily, included severance expenses in Europe. Hudson plans a strategic transformation to direct resources to high growth areas including RPO and eDiscovery, optimize operations in underperforming markets and streamline its back office and business processes.

“Our action plan is designed to address some of the more embedded aspects of our operating model that have caused our earnings progress to be too slow,” said CFO Mary Jane Raymond. “We have taken the initial steps to move to a leaner regional structure and more consistent global operations. Our 2011 efforts to build greater global coordination have prepared the organization to undertake this work.”

First-quarter revenue fell in all of Hudson’s segments.

  • Hudson Americas revenue edged down 1.4 percent in the first quarter to $45.2 million from $45.8 million in the year-ago quarter. However, gross margin in the segment rose 14 percent.
  • Hudson Asia Pacific first-quarter revenue fell 6.0 percent to $74.3 million.
  • Hudson Europe first-quarter revenue fell 13.4 percent to $81.2 million.

First-quarter gross margin for the company narrowed to 36.5 percent from 37.2 percent in the same period in the previous year.

Hudson posted a first-quarter net loss of $3.2 million compared to a net loss of $6,000 in the first quarter of last year.

The company forecast second-quarter revenue to fall 20 percent on a year-over-year basis at prevailing exchange rates.

Hudson Global Inc. (NASD: HSON)
For the first quarter ended March 31, 2012, compared with the same period in 2011.
Revenue: $200.6 million, -8.2 percent
Net loss: $3.2 million vs. net loss of $6,000

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