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The Hudson Highland Group Inc. (NASD: HHGP) sold its energy and engineering staffing business to System One Holdings LLC. Hudson also announced fourth-quarter revenue of $290.5 million and restated 2006 and 2007 results due to a change in accounting for a 2005 acquisition.
System One Holding is owned and operated by Troy Gregory, former chairman of Hudson Legal North America. The energy and engineering staffing business posted revenue of $146.2 million in fiscal year 2007.
Hudson received $11.0 million in cash in the sale, as well as a five-year $5 million note and a warrant for up to 10% of System One equity. In addition, Hudson kept $3.6 million in receivables and may get $600,000 based on the resolution of certain liabilities. Hudson will record a gain on the sale of approximately $4 million.
Hudson said fourth-quarter 2007 revenue of $290.5 million treats the energy and engineering business and a Netherlands business it sold in December 2007 as discontinued operations. Including them would have raised revenue to $331.5 million. Hudson said it plans to cut its North American cost structure to match the current size of its business in the wake of the energy and engineering sale.
The company also reported that earn-outs on a 2005 acquisition originally recorded as purchase price should have instead been recorded as expense in the third and fourth quarters of 2006 and first three quarters of 2007. The restatement resulted in decreases in net income for all six quarters.
In addition, Hudson said its board approved the repurchase of up to $15 million in stock.