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Hudson Global Reports 2016 Fourth Quarter and Full-Year Results

March 2, 2017 7:00 AM

NEW YORK, March 02, 2017 (GLOBE NEWSWIRE) -- Hudson Global, Inc. (Nasdaq: HSON), a leading global talent solutions company, today announced financial results for the fourth quarter and full-year ended December 31, 2016.

2016 Fourth Quarter Summary

2016 Full-Year Summary

* Includes continuing and discontinued operations.** Adjusted EBITDA and EBITDA are defined in the segment tables at the end of this release.*** See reconciliation for retained revenue and gross margin tables at the end of this release.

“We continued to deliver gross margin growth in many of our markets, including Americas, Australia/New Zealand, Belgium, France, Hong Kong and Spain," said Stephen Nolan, chief executive officer at Hudson. "We generated over $5 million in cash flow from operations in the fourth quarter and delivered year-over-year improvement in adjusted EBITDA in 2016.”

Regional Highlights

Americas

In the fourth quarter of 2016, Hudson Americas' gross margin increased 5 percent compared with the fourth quarter of 2015. RPO gross margin increased in the quarter on continued client growth and expansion. EBITDA was $0.5 million in the fourth quarter, compared with EBITDA of $0.6 million a year ago. The region delivered adjusted EBITDA of $0.6 million in the fourth quarter, compared with $0.7 million in the fourth quarter of 2015.

Hudson Americas' gross margin in 2016 decreased 15 percent on a reported basis in constant currency from 2015, but increased 7 percent on a retained*** basis. RPO gross margin increased by 7 percent in 2016, driven by new client wins and increased business with some existing clients. On a reported basis, EBITDA was $0.8 million, compared with $13.4 million in 2015, which included the $15.9 million gain on sale of the Americas IT business. On a reported basis, adjusted EBITDA was $1.2 million in 2016, compared with adjusted EBITDA loss of $0.7 million in 2015.

Asia Pacific

Hudson Asia Pacific's gross margin decreased 6 percent in constant currency in the fourth quarter of 2016 compared with the same period in 2015. Gross margin growth in Australia/New Zealand of 3 percent was offset by a 23 percent decline in Asia, driven by tougher market conditions and internal challenges in China following rapid growth in recent years. RPO gross margin declined by 11 percent, driven by 9 percent decline in Australia due to reduced client demand, as well as a 29 percent decline in China as the company shifts its focus to longer-term contracts. EBITDA was $0.0 million in the fourth quarter, compared with EBITDA of $1.0 million a year ago. Asia Pacific delivered adjusted EBITDA of $0.4 million, down from adjusted EBITDA of $1.7 million in the fourth quarter of 2015.

In 2016, gross margin decreased 5 percent in Hudson Asia Pacific in constant currency compared with 2015. Results were driven by 16 percent growth in temporary contracting, 14 percent decline in permanent recruitment, and 2 percent growth in RPO against 2015. Growth by country was led by Australia, up 6 percent, as well as New Zealand and Hong Kong, both up 16 percent, though weighed down by lower results in China, off by 33 percent against prior year. EBITDA in 2016, was a loss of $0.3 million, compared with EBITDA of $2.9 million in 2015. Adjusted EBITDA was $2.6 million, down from adjusted EBITDA of $7.0 million in 2015.

Europe

Hudson Europe's gross margin increased 6 percent in constant currency in the fourth quarter of 2016 from the fourth quarter of 2015. Continental Europe gross margin increased by 20 percent in constant currency in the quarter. France, Belgium and Spain continued to deliver gross margin growth, up 35 percent, 16 percent and 9 percent respectively. Gross margin in the U.K. was down 11 percent, as 18 percent growth in permanent recruitment did not offset declines in temporary contracting, driven by reduced demand in Financial Services and slower hiring patterns following the U.K. vote to exit the European Union. EBITDA was $0.3 million in the fourth quarter, compared with EBITDA of $0.6 million a year ago. Adjusted EBITDA of $1.3 million compared with adjusted EBITDA of $1.1 million a year ago.

Hudson Europe's gross margin decreased 1 percent on a reported basis in 2016 in constant currency compared with 2015, but increased 3 percent on a retained*** basis. Continental Europe delivered 15 percent growth on a retained*** basis, driven by Belgium and France, up 15 percent and 21 percent, respectively, offset by the U.K., which was down 10 percent against 2015. In the U.K., growth in RPO of 11 percent was offset by recruitment, down 15 percent from 2015. On a reported basis, EBITDA was $1.1 million in 2016, compared with a loss of $0.2 million in 2015. On a reported basis, adjusted EBITDA was $4.2 million, compared with $2.3 million in 2015.

Liquidity and Capital Resources

The company ended the fourth quarter of 2016 with $40.0 million in liquidity, composed of $21.3 million in cash and $18.6 million in availability under its credit facilities. This compares with $37.7 million in cash and $20.5 million in availability under its credit facilities at the end of 2015. The company generated $5.6 million in cash flow from operations during the fourth quarter and used $9.4 million in cash flow from operations for the year of 2016. The company had $7.8 million of outstanding borrowings at the end of the fourth quarter of 2016. Share Repurchase Program

During the fourth quarter of 2016, the company continued its share repurchase program for which it has an authorization of up to $10 million of the company’s common stock. The company purchased 142,671 shares for $0.2 million as part of the buyback program during the fourth quarter. Since the inception of this program in the third quarter of 2015 through the end of 2016, the company has purchased 2,989,127 shares for $6.5 million.

Business Outlook

With respect to forward-looking non-GAAP measures, a reconciliation of the non-GAAP measures to the corresponding GAAP measures is not available without unreasonable efforts due to the variability, complexity and low visibility of the non-cash and other items described below that we exclude from the non-GAAP outlook measures. The variability of these items is likely to have a significant impact on our future GAAP financial results.

Given current economic conditions, the company expects first quarter 2017 revenue of between $95 million and $105 million and adjusted EBITDA of between $1.5 million loss and $0.5 million gain at prevailing exchange rates. In the first quarter of 2016, revenue was $101.2 million and adjusted EBITDA was a loss of $2.0 million. This outlook assumes an average exchange rate of 1.25 US Dollars to the British Pound, 1.07 US Dollars to the Euro and 0.76 US Dollars to the Australian Dollar.

Conference Call/Webcast

Hudson will conduct a conference call today at 10:00 a.m. ET to discuss this announcement. Individuals wishing to listen can access the webcast on the investor information section of the company's web site at Hudson.com.

The archived call will be available on the investor information section of the company's web site at Hudson.com.

About Hudson

Hudson is a global talent solutions company with expertise in leadership and specialized recruitment, recruitment process outsourcing, talent management and contracting solutions. We help our clients and candidates succeed by leveraging our expertise, deep industry and market knowledge, and proprietary assessment tools and techniques. Operating around the globe through relationships with millions of specialized professionals, we bring an unparalleled ability to match talent with opportunities by assessing, recruiting, developing and engaging the best and brightest people for our clients. We combine broad geographic presence, world-class talent solutions and a tailored, consultative approach to help businesses and professionals achieve higher performance and outstanding results. More information is available at Hudson.com.

Forward-Looking Statements

This press release contains statements that the company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “predict,” “believe” and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties and assumptions, including industry and economic conditions' that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to, global economic fluctuations; the company’s ability to successfully achieve its strategic initiatives; risks related to fluctuations in the company's operating results from quarter to quarter; the ability of clients to terminate their relationship with the company at any time; competition in the company's markets; the negative cash flows and operating losses that may recur in the future; restrictions on the company's operating flexibility due to the terms of its credit facilities; risks associated with the company's investment strategy; risks related to international operations, including foreign currency fluctuations; the company's dependence on key management personnel; the company's ability to attract and retain highly skilled professionals; the company's ability to collect accounts receivable; the company’s ability to maintain costs at an acceptable level; the company's heavy reliance on information systems and the impact of potentially losing or failing to develop technology; risks related to providing uninterrupted service to clients; the company's exposure to employment-related claims from clients, employers and regulatory authorities, current and former employees in connection with the company’s business reorganization initiatives and limits on related insurance coverage; the company’s ability to utilize net operating loss carry-forwards; volatility of the company's stock price; the impact of government regulations; and restrictions imposed by blocking arrangements. Additional information concerning these and other factors is contained in the company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document. The company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Financial Tables Follow

HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2016 2015 2016 2015
Revenue $100,314 $106,109 $422,744 $463,197
Direct costs 57,540 61,670 248,327 275,487
Gross margin 42,774 44,439 174,417 187,710
Operating expenses:
Selling, general and administrative expenses 42,033 43,350 177,334 194,631
Depreciation and amortization 796 805 3,090 3,845
Business reorganization 616 161 1,580 5,828
Total operating expenses 43,445 44,316 182,004 204,304
Gain (loss) on sale and exit of businesses — 17 — 19,835
Operating income (loss) (671) 140 (7,587) 3,241
Non-operating income (expense):
Interest income (expense), net (93) (180) (357) (722)
Other income (expense), net 198 (481) (247) (266)
Income (loss) before provision for income taxes from continuing operations (566) (521) (8,191) 2,253
Provision for (benefit from) income taxes (458) 1,963 742 646
Income (loss) from continuing operations (108) (2,484) (8,933) 1,607
Income (loss) from discontinued operations, net of income taxes (184) (142) 143 722
Net income (loss) $(292) $(2,626) $(8,790) $2,329
Earnings (loss) per share:
Basic and diluted
Income (loss) from continuing operations $— $(0.07) $(0.27) $0.05
Income (loss) from discontinued operations (0.01) — 0.01 0.02
Net income (loss) $(0.01) $(0.08) $(0.26) $0.07
Weighted-average shares outstanding:
Basic 32,227 34,274 33,174 33,869
Diluted 32,227 34,274 33,174 34,084

HUDSON GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
December 31, 2016 December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents$21,322 $37,663
Accounts receivable, less allowance for doubtful accounts of $799 and $860, respectively58,517 62,420
Prepaid and other4,265 5,979
Current assets of discontinued operations38 81
Total current assets84,142 106,143
Property and equipment, net7,041 7,928
Deferred tax assets, non-current6,494 6,724
Other assets4,135 4,154
Total assets$101,812 $124,949
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$4,666 $5,184
Accrued expenses and other current liabilities36,154 40,344
Short-term borrowings7,770 2,368
Accrued business reorganization1,756 2,252
Current liabilities of discontinued operations233 1,443
Total current liabilities50,579 51,591
Deferred rent and tenant improvement contributions2,968 4,244
Income tax payable, non-current2,211 2,279
Other non-current liabilities4,169 5,655
Total liabilities59,927 63,769
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized; none issued or outstanding— —
Common stock, $0.001 par value, 100,000 shares authorized; issued 34,910 and 35,260 shares, respectively34 34
Additional paid-in capital482,265 480,816
Accumulated deficit(440,478) (428,287)
Accumulated other comprehensive income6,931 10,292
Treasury stock, 3,145 and 646 shares, respectively, at cost(6,867) (1,675)
Total stockholders’ equity41,885 61,180
Total liabilities and stockholders' equity$101,812 $124,949

HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - QUARTER TO DATE
(in thousands)
(unaudited)
For The Three Months Ended December 31, 2016 HudsonAmericas HudsonAsia Pacific HudsonEurope Corporate Total
Revenue, from external customers $3,901 $59,122 $37,291 $— $100,314
Gross margin, from external customers $3,400 $20,524 $18,850 $— $42,774
Adjusted EBITDA (loss) (1) $587 $373 $1,302 $(1,355) $907
Business reorganization expenses (recovery) 2 (24) 606 32 616
Stock-based compensation expense 27 (4) 13 130 166
Non-operating expense (income),including corporate administration charges 100 383 378 (1,059) (198)
EBITDA (loss) (1) $458 $18 $305 $(458) $323
Depreciation and amortization expenses 796
Interest expense (income), net 93
Provision for (benefit from) income taxes (458)
Income (loss) from continuing operations (108)
Income (loss) from discontinued operations, net of income taxes (184)
Net income (loss) $(292)
For The Three Months Ended December 31, 2015 HudsonAmericas HudsonAsia Pacific HudsonEurope Corporate Total
Revenue, from external customers $3,731 $53,268 $49,110 $— $106,109
Gross margin, from external customers $3,235 $21,609 $19,595 $— $44,439
Adjusted EBITDA (loss) (1) $673 $1,706 $1,114 $(2,136) $1,357
Business reorganization expenses (recovery) 102 — 205 (146) 161
Stock-based compensation expense 4 43 17 204 268
Gain (loss) on sale and exit of businesses — — 17 — 17
Non-operating expense (income),including corporate administration charges 4 665 325 (513) 481
EBITDA (loss) (1) $563 $998 $584 $(1,681) $464
Depreciation and amortization expenses 805
Interest expense (income), net 180
Provision for (benefit from) income taxes 1,963
Income (loss) from continuing operations (2,484)
Income (loss) from discontinued operations, net of income taxes (142)
Net income (loss) $(2,626)
  1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.

HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - QUARTER TO DATE (continued)
(in thousands)
(unaudited)
For The Three Months Ended September 30, 2016 HudsonAmericas HudsonAsia Pacific HudsonEurope Corporate Total
Revenue, from external customers $4,163 $64,607 $39,366 $— $108,136
Gross margin, from external customers $3,691 $22,414 $17,437 $— $43,542
Adjusted EBITDA (loss) (1) $423 $1,122 $100 $(1,294) $351
Business reorganization expenses (recovery) (3) (1) 188 (1) 183
Stock-based compensation expense 5 (41) 55 134 153
Non-operating expense (income),including corporate administration charges 95 889 323 (1,012) 295
EBITDA (loss) (1) $326 $275 $(466) $(415) $(280)
Depreciation and amortization expenses 801
Interest expense (income), net 109
Provision for (benefit from) income taxes 718
Income (loss) from continuing operations (1,908)
Income (loss) from discontinued operations, net of income taxes 35
Net income (loss) $(1,873)
For The Three Months Ended March 31, 2016 HudsonAmericas HudsonAsia Pacific HudsonEurope Corporate Total
Revenue, from external customers $3,837 $51,071 $46,319 $— $101,227
Gross margin, from external customers $3,341 $18,771 $19,150 $— $41,262
Adjusted EBITDA (loss) (1) $241 $(152) $471 $(2,569) $(2,009)
Business reorganization expenses (recovery) (16) 197 484 (28) 637
Stock-based compensation expense 28 80 44 219 371
Non-operating expense (income),including corporate administration charges 67 802 273 (1,005) 137
EBITDA (loss) (1) $162 $(1,231) $(330) $(1,755) $(3,154)
Depreciation and amortization expenses 688
Interest expense (income), net 54
Provision for (benefit from) income taxes (326)
Income (loss) from continuing operations (3,570)
Income (loss) from discontinued operations, net of income taxes 83
Net income (loss) $(3,487)
  1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.

HUDSON GLOBAL, INC.
SEGMENT ANALYSIS - YEAR TO DATE
(in thousands)
(unaudited)
For The Year Ended December 31, 2016 HudsonAmericas HudsonAsia Pacific HudsonEurope Corporate Total
Revenue, from external customers $15,561 $236,839 $170,344 $— $422,744
Gross margin, from external customers $13,609 $84,126 $76,682 $— $174,417
Adjusted EBITDA (loss) (1) $1,209 $2,614 $4,194 $(9,485) $(1,468)
Business reorganization expenses (recovery) (39) 248 1,387 (16) 1,580
Stock-based compensation expense 108 161 206 974 1,449
Non-operating expense (income),including corporate administration charges 370 2,543 1,537 (4,203) 247
EBITDA (loss) (1) $770 $(338) $1,064 $(6,240) $(4,744)
Depreciation and amortization expenses 3,090
Interest expense (income), net 357
Provision for (benefit from) income taxes 742
Income (loss) from continuing operations (8,933)
Income (loss) from discontinued operations, net of income taxes 143
Net income (loss) $(8,790)
For The Year Ended December 31, 2015 HudsonAmericas HudsonAsia Pacific HudsonEurope Corporate Total
Revenue, from external customers $28,627 $219,391 $215,179 $— $463,197
Gross margin, from external customers $16,111 $89,682 $81,917 $— $187,710
Adjusted EBITDA (loss) (1) $(703) $6,955 $2,318 $(11,260) $(2,690)
Business reorganization expenses (recovery) 1,108 669 2,883 1,168 5,828
Stock-based compensation expense 569 787 808 2,067 4,231
Gain (loss) on sale and exit of businesses 15,918 — 3,917 — 19,835
Non-operating expense (income),including corporate administration charges 184 2,648 2,751 (5,317) 266
EBITDA (loss) (1) $13,354 $2,851 $(207) $(9,178) $6,820
Depreciation and amortization expenses 3,845
Interest expense (income), net 722
Provision for (benefit from) income taxes 646
Income (loss) from continuing operations 1,607
Income (loss) from discontinued operations, net of income taxes 722
Net income (loss) $2,329
  1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income, goodwill and other impairment charges, business reorganization expenses and other expenses (“Adjusted EBITDA”) are presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Furthermore, EBITDA and adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.

HUDSON GLOBAL, INC.RECONCILIATION FOR CONSTANT CURRENCY(in thousands)(unaudited)

The company operates on a global basis, with the majority of its gross margin generated outside of the United States. Accordingly, fluctuations in foreign currency exchange rates can affect its results of operations. Constant currency information compares financial results between periods as if exchange rates had remained constant period-over-period. The company currently defines the term “constant currency” to mean that financial data for a previously reported period are translated into U.S. dollars using the same foreign currency exchange rates that were used to translate financial data for the current period. Changes in revenue, gross margin, selling, general and administrative expenses ("SG&A"), business reorganization expenses and other non-operating income (expense), operating income (loss) and EBITDA (loss) include the effect of changes in foreign currency exchange rates. Variance analysis usually describes period-to-period variances that are calculated using constant currency as a percentage. The company’s management reviews and analyzes business results in constant currency and believes these results better represent the company’s underlying business trends. The company believes that these calculations are a useful measure, indicating the actual change in operations. There are no significant gains or losses on foreign currency transactions between subsidiaries. Therefore, changes in foreign currency exchange rates generally impact only reported earnings.

For The Three Months Ended December 31,
2016 2015
As As Currency Constant
reported reported translation currency
Revenue:
Hudson Americas $3,901 $3,731 $— $3,731
Hudson Asia Pacific 59,122 53,268 1,453 54,721
Hudson Europe 37,291 49,110 (6,894) 42,216
Total $100,314 $106,109 $(5,441) $100,668
Gross margin:
Hudson Americas $3,400 $3,235 $(1) $3,234
Hudson Asia Pacific 20,524 21,609 185 21,794
Hudson Europe 18,850 19,595 (1,854) 17,741
Total $42,774 $44,439 $(1,670) $42,769
SG&A (1):
Hudson Americas $2,836 $2,609 $(2) $2,607
Hudson Asia Pacific 20,065 19,828 284 20,112
Hudson Europe 17,651 18,580 (1,894) 16,686
Corporate 1,481 2,335 — 2,335
Total $42,033 $43,352 $(1,612) $41,740
Business reorganization expenses:
Hudson Americas $2 $102 $— $102
Hudson Asia Pacific (24) — — —
Hudson Europe 606 205 (21) 184
Corporate 32 (146) — (146)
Total $616 $161 $(21) $140
Operating income (loss):
Hudson Americas $552 $546 $2 $548
Hudson Asia Pacific (53) 1,290 (114) 1,176
Hudson Europe 419 726 94 820
Corporate (1,589) (2,422) — (2,422)
Total $(671) $140 $(18) $122
EBITDA (loss):
Hudson Americas $458 $563 $(2) $561
Hudson Asia Pacific 18 998 (110) 888
Hudson Europe 305 584 97 681
Corporate (458) (1,681) — (1,681)
Total $323 $464 $(15) $449

Note: Certain prior year amounts have been reclassified to conform to the current period presentation.

  1. SG&A is a measure that management uses to evaluate the segments’ expenses.

HUDSON GLOBAL, INC.
RECONCILIATION FOR CONSTANT CURRENCY (continued)
(in thousands)
(unaudited)
For The Year Ended December 31,
2016 2015
As As Currency Constant
reported reported translation currency
Revenue:
Hudson Americas $15,561 $28,627 $(22) $28,605
Hudson Asia Pacific 236,839 219,391 (2,235) 217,156
Hudson Europe 170,344 215,179 (17,537) 197,642
Total $422,744 $463,197 $(19,794) $443,403
Gross margin:
Hudson Americas $13,609 $16,111 $(22) $16,089
Hudson Asia Pacific 84,126 89,682 (1,533) 88,149
Hudson Europe 76,682 81,917 (4,550) 77,367
Total $174,417 $187,710 $(6,105) $181,605
SG&A (1):
Hudson Americas $12,495 $17,413 $(33) $17,380
Hudson Asia Pacific 81,409 83,035 (1,642) 81,393
Hudson Europe 72,978 80,858 (4,716) 76,142
Corporate 10,452 13,327 — 13,327
Total $177,334 $194,633 $(6,391) $188,242
Business reorganization expenses:
Hudson Americas $(39) $1,108 $— $1,108
Hudson Asia Pacific 248 669 29 698
Hudson Europe 1,387 2,883 (141) 2,742
Corporate (16) 1,168 — 1,168
Total $1,580 $5,828 $(112) $5,716
Operating income (loss):
Hudson Americas $1,090 $12,931 $10 $12,941
Hudson Asia Pacific 454 3,548 119 3,667
Hudson Europe 1,709 1,743 381 2,124
Corporate (10,840) (14,981) — (14,981)
Total $(7,587) $3,241 $510 $3,751
EBITDA (loss):
Hudson Americas $770 $13,354 $27 $13,381
Hudson Asia Pacific (338) 2,851 123 2,974
Hudson Europe 1,064 (207) 413 206
Corporate (6,240) (9,178) — (9,178)
Total $(4,744) $6,820 $563 $7,383
  1. SG&A is a measure that management uses to evaluate the segments’ expenses.

HUDSON GLOBAL, INC.
RECONCILIATION FOR RETAINED REVENUE AND GROSS MARGIN
(in thousands)
(unaudited)
Revenue, 2016 vs 2015
For The Year Ended December 31,
Reported Retained (1)
2016Variance vs 2015 ConstantCurrency 2016 Variance vs 2015 ConstantCurrency
Americas $15,561 (45.6)% (45.6)% $15,561 4.5% 4.6%
Asia Pacific 236,839 8.0% 9.1% 236,839 8.0% 9.1%
Europe 170,344 (20.8)% (13.8)% 170,344 (15.7)% (7.7)%
Total $422,744 (8.7)% (4.7)% $422,744 (3.1)% 1.5%
Gross Margin, 2016 vs 2015
For The Year Ended December 31,
Reported Retained (1)
2016 Variance vs 2015 ConstantCurrency 2016Variance vs 2015 ConstantCurrency
Americas $13,609 (15.5)% (15.4)% $13,609 7.0% 7.2%
Asia Pacific 84,126 (6.2)% (4.6)% 84,126 (6.2)% (4.6)%
Europe 76,682 (6.4)% (0.9)% 76,682 (2.9)% 3.1%
Total $174,417 (7.1)% (4.0)% $174,417 (3.8)% (0.5)%
  1. Retained revenue and gross margin and divested revenue and gross margin are non-GAAP terms that management believes provide a better understanding of the underlying revenue and gross margin trends in the business following the divestitures in the second quarter of 2015. Divested revenue and gross margin includes such items attributable to the following businesses: the Americas IT staffing business, the Netherlands business, Ukraine, Czech Republic, Slovakia and Luxembourg. The non-GAAP financial measures do not replace the presentation of GAAP financial results and should only be used as a supplement to, not as a substitute for, Hudson’s financial results presented in accordance with GAAP. The above table provides a reconciliation of the non-GAAP financial measure used in its financial reporting to the most directly comparable GAAP financial measure. 
Contact:
David F. Kirby
Hudson
212-351-7216
[email protected]

Source: Hudson Global, Inc.

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