Hudson Global(US:HSON)2024-03-14 20:54Revenue Performance - Revenue for the year ended December 31, 2023, was $161.3 million, a decrease of $39.6 million, or 20%, compared to $200.9 million in 2022[112] - On a constant currency basis, revenue decreased by $34.7 million, or 18%, primarily due to a decrease in RPO revenue of $18.1 million, or 19%, and a decline in contracting revenue of $16.6 million, or 17%[112] - In the Americas, revenue decreased by $20.4 million, or 39%, with RPO revenue down by $19.0 million, or 39%, and contracting revenue down by $1.4 million, or 59%[120] - Adjusted net revenue in the Americas for 2023 was $30.1 million, a decrease of $18.8 million, or 38%, compared to $49.0 million in 2022[121] - In Asia Pacific, total revenue for 2023 was $103.9 million, a decrease of $9.6 million, or 9%, compared to $113.5 million in 2022[126] - In Europe, total revenue decreased by $4.8 million, or 15%, to $26.2 million for the year ended December 31, 2023, driven by a 32% decline in contracting revenue[136] Financial Metrics - SG&A and Non-Op expenses were $76.6 million for 2023, a decrease of $11.9 million, or 13%, compared to $88.5 million in 2022[112] - EBITDA for 2023 was $3.7 million, down from $10.8 million in 2022, representing a decrease of $6.8 million on a constant currency basis[116] - Net income for 2023 was $2.2 million, compared to $7.1 million in 2022, reflecting a decrease of $5.1 million on a constant currency basis[116] - Total adjusted net revenue as a percentage of revenue increased to 96% in 2023 from 95% in 2022, primarily due to a higher mix of RPO to contracting revenue[122] - Operating loss in the Americas was $2.5 million for 2023, a decline of $6.8 million or 158% compared to operating income of $4.3 million in 2022[124] - EBITDA loss in the Americas was $0.7 million, or 2% of revenue, compared to EBITDA of $4.9 million, or 9% of revenue, in 2022[125] - Adjusted net revenue in Asia Pacific increased by $0.7 million, or 2%, to $33.7 million in 2023, with adjusted net revenue as a percentage of revenue rising from 29% to 32%[129] - Adjusted net revenue in Europe increased by $0.3 million, or 2%, to $16.5 million in 2023, with adjusted net revenue as a percentage of revenue rising from 52% to 63%[138] - Operating income in Europe was $2.0 million for 2023, an increase of $0.2 million, or 14%, compared to $1.8 million in 2022[142] - EBITDA in Europe was $1.6 million, or 6% of revenue, for the year ended December 31, 2023, compared to $1.5 million in 2022[143] Cash Flow and Liquidity - Cash and cash equivalents totaled $23.2 million as of December 31, 2023, down from $27.5 million in 2022[150] - Net cash provided by operating activities fell to $0.3 million in 2023 from $9.5 million in 2022, a decrease of $9.1 million[151] - Net cash used in investing activities increased to $2.2 million in 2023 from $1.3 million in 2022, reflecting a $2.1 million acquisition in Singapore[152] - Net cash used in financing activities was $2.5 million in 2023, compared to $2.0 million in 2022, mainly due to higher loan repayments[153] - As of December 31, 2023, the company had $22.6 million in cash and cash equivalents, with additional borrowing capacity of 4 million Australian dollars and 1 million Singapore dollars[156] - The company faces uncertain external market conditions that may affect future cash requirements and liquidity[158] Strategic Outlook - The company anticipates continued challenging market conditions into 2024 due to higher inflation and interest rates[107] - The company is exploring strategic alternatives to maximize shareholder value, including potential acquisitions and share repurchases[105] Tax and Accounting - The Company has unrecognized tax benefits that, if recognized in the future, would impact the annual effective income tax rate[170] - Tax reserves are provided for federal, state, local, and international exposures, requiring subjective estimates about potential outcomes[171] - The Company recognizes tax on Global Intangible Low Taxed Income (GILTI) as a period expense in the year incurred[172] - Business combinations are accounted for under the acquisition method, with goodwill recorded when the purchase price exceeds the net fair value of acquired assets[173] - Asset acquisitions allocate costs to individual assets based on relative fair value, with no goodwill recognized[174] - The Company is subject to various risks and uncertainties that could materially affect future results, including global economic fluctuations and competition[176] - The Company does not provide quantitative disclosures about market risk as it qualifies as a smaller reporting company[177]