Core Insights - The company reported a signed backlog of $17.2 million at year-end, indicating strong demand for its Building Solutions division, which is expected to benefit from structural tailwinds as factory-built construction gains market share [1] - The company experienced a 7.2% decline in gross profit for the full year 2024, primarily due to a one-time accounting adjustment and lower revenues in certain business segments, but saw a positive shift in momentum in the second half of 2024 [2] - Revenue for Q4 2024 increased by 21.1% to $17.1 million compared to Q4 2023, driven by M&A activities, particularly the acquisition of Timber Technologies [4][3] Financial Performance - Full year 2024 revenue rose 16.5% to $53.4 million from $45.8 million in 2023, with Q4 gross profit increasing 55.3% to $4.5 million compared to $2.9 million in Q4 2023 [4][3] - Consolidated gross profit for Q4 2024 was $4.4 million, up 55.9% year-over-year, but full year gross profit decreased by 7.3% to $11.1 million due to lower margins in the first half of the year [7] - SG&A expenses increased by 31.7% in Q4 2024 compared to the same period in 2023, largely due to the impacts of recent acquisitions [8] Strategic Developments - The company has enhanced contract language to mitigate risks associated with input cost changes and has implemented a hedging strategy to manage lumber price fluctuations [5][28] - The acquisition of Alliance Drilling Tools has diversified the company's portfolio and is expected to contribute significantly to future growth, with ADT generating approximately $10.5 million in revenue and a gross margin of 48% for the full year 2024 [5][6] - The company is optimistic about its sales pipeline and backlog, anticipating substantial growth beginning in Q4 2024 and continuing into 2025 [16][17] Market Conditions - The Building Solutions division faced demand softness in the first half of 2024 due to interest rate sensitivity and credit availability, but project momentum improved in the latter half of the year [2] - The company is closely monitoring the impact of fiscal policies, including tariffs, on its operations, particularly regarding lumber sourcing from Canada [1][27]

Summary of Hudson Global Conference Call - September 17, 2025 Company Overview - **Company**: Hudson Global (NasdaqGS:HSON) - **Recent Merger**: Hudson Global merged with Star Equity Holdings, completed on August 21, 2025, with Hudson as the surviving entity due to its $240 million net operating loss (NOL) [4][3] Core Business Strategy - **Vision**: Aim to be the "Berkshire Hathaway of microcaps" by focusing on excellent businesses, management, and capital allocation [3] - **Revenue Projections for 2026**: Expected revenue of $250 million, adjusted EBITDA of $15 million, and adjusted earnings per share of approximately $1.50 [5][11] - **Long-term EBITDA Goal**: Anticipate reaching $40 million in EBITDA by the end of the decade, driven by organic growth and market share increase in growing industries [6] Acquisition Strategy - **Focus on Bolt-on Acquisitions**: Targeting acquisitions that enhance existing businesses, aiming for each to generate at least $10 million in EBITDA [6][20] - **Capital Allocation**: Plans to use cash, debt, and preferred stock for acquisitions, avoiding stock issuance due to perceived undervaluation [8][9] - **Asset Monetization**: Over $20 million in non-EBITDA generating assets expected to be monetized, which could significantly impact market cap [9] Financial Metrics and Valuation - **Current Valuation**: Stock is considered undervalued with a PE ratio of 6 and EV/EBITDA of 3 based on 2026 estimates [12][11] - **Preferred Stock**: Approximately $27 million in preferred stock, viewed as a flexible acquisition currency [12][30] - **Free Cash Flow Yield**: High free cash flow yield available for shareholder value creation through acquisitions or stock buybacks [34] Industry Dynamics - **Staffing Business Outlook**: Experienced a peak in 2022, followed by a decline, but is seeing a gradual return to normal hiring levels, particularly among Fortune 500 clients [31][33] - **Attrition Rates**: Noted a significant drop in attrition rates post-COVID, indicating a stabilization in the workforce [32] Key Business Segments - **Building Solutions**: Expected to grow at an average of 10% revenue growth over the next five years, with a focus on engineered wood products [22] - **Business Services**: Largest division, aiming to return to 2022 profitability levels with a focus on long-term contracts with Fortune 500 companies [23] - **Energy Services**: Looking for acquisitions in non-capital intensive, mission-critical products and services [24] Management and Team Structure - **Management Team**: Comprised of experienced individuals from both Hudson and Star, with a focus on operational efficiency and strategic growth [36] Conclusion - **Future Outlook**: Hudson Global is positioned for long-term value creation through strategic acquisitions, organic growth, and effective capital allocation, with a strong focus on enhancing shareholder value [5][9][34]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 increased by 41.7% compared to Q1 2024, primarily due to the inclusion of revenues from Timber Technologies and Alliance Drilling Tools acquisitions [5] - Gross margin improved to 24.3% from 17.3% in the same quarter last year, attributed to higher revenues and the addition of Timber Technologies [5] - Net loss from continuing operations was $1,200,000 in Q1 2025, an improvement from a net loss of $2,200,000 in Q1 2024 [9] - Non-GAAP adjusted EBITDA from continuing operations was a loss of $800,000 in Q1 2025, compared to a loss of $1,100,000 in the same period last year [10] Business Line Data and Key Metrics Changes - Building Solutions segment revenues increased by 32.9% compared to Q1 2024, although it was below internal expectations due to delays in commercial projects [5] - The Building Solutions division backlog reached a record $27,900,000 at quarter end, up from $14,800,000 at the end of Q1 2024, indicating strong future demand [6] - The Energy Services division was established with the acquisition of Alliance Drilling Tools, and integration is proceeding smoothly [6] Market Data and Key Metrics Changes - The company noted a significant uptick in customer interest and activity over the past couple of quarters, indicating a positive market environment [6] - There were no signs of projects being put on hold due to tariff impacts, with a strong backlog supporting future growth [19] Company Strategy and Development Direction - The management team is focused on creating shareholder value through targeted business development initiatives and identifying additional accretive opportunities across all divisions [12] - The company is exploring organic growth opportunities within the Energy Services division and considering further acquisitions [6] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong backlog and ongoing projects, suggesting that the construction demand built up over time is now being realized [19] - The company is monitoring input costs, such as lumber prices, but does not foresee significant negative impacts on their operations [20] Other Important Information - Consolidated cash flow from operations for Q1 2025 was an inflow of $600,000, a significant improvement from an outflow of $2,400,000 in Q1 2024 [10] - The company's unrestricted cash balance at the end of Q1 2025 was $1,900,000, down from $4,000,000 at the end of 2024, primarily due to acquisition-related cash outflows [10] Q&A Session Summary Question: Inquiry about project delays due to tariffs - Management clarified that delays were specific to a large project at EdgeBuilder, which experienced a temporary pause but is expected to resume and recognize revenue in Q2 [16][17] Question: Signs of projects being put on hold - Management indicated that there are no signs of projects being put on hold, with a strong backlog supporting ongoing construction activities [19] Question: Gross profit margin changes in Alliance Drilling - Management explained that the gross profit margin fluctuations are a function of quarterly activity levels and reaffirmed the high-margin nature of the Alliance Drilling business [26][27] Question: Equipment rental revenue structure - Management described the rental terms as project-based, with high rental rates due to the nature of the equipment used in drilling operations [30]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 increased by 41.7% compared to Q1 2024, primarily due to the inclusion of revenues from Timber Technologies and Alliance Drilling Tools acquisitions [5] - Gross margin improved to 24.3% from 17.3% in the same quarter last year, attributed to higher revenues and the addition of Timber Technologies [5] - Gross profit was $3,100,000, up 99.2% versus Q1 2024, driven by increased revenue at KBS and the addition of TT and ADT [8] - The net loss from continuing operations was $1,200,000 in Q1 2025, an improvement from a net loss of $2,200,000 in Q1 2024 [10] - Non-GAAP adjusted EBITDA from continuing operations was a loss of $800,000, compared to a loss of $1,100,000 in the same period last year [11] Business Line Data and Key Metrics Changes - Building Solutions segment revenues increased by 32.9% compared to Q1 2024, although still below internal expectations due to delays in commercial projects [5] - The Building Solutions division backlog reached a record $27,900,000 at quarter end, compared to $14,800,000 at the end of Q1 2024, indicating strong future demand [6] - The establishment of the Energy Services division was highlighted by the acquisition of Alliance Drilling Tools, with a focus on organic growth and potential additional acquisitions [6] Market Data and Key Metrics Changes - The company noted a significant uptick in customer interest and activity over the past couple of quarters, indicating a positive market environment [6] - There were no signs of projects being put on hold due to tariff impacts, with a strong backlog supporting confidence in future quarters [19] Company Strategy and Development Direction - The management team is focused on creating shareholder value through targeted business development initiatives and identifying additional accretive opportunities across all divisions [13] - The company is monitoring input costs like lumber and OSB, but does not see significant exposure to new home construction, which has slowed down [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the backlog and the momentum in the Building Solutions division, with no signs of a temporary situation regarding project delays [19] - The company is optimistic about the integration of Alliance Drilling Tools and the growth opportunities within the Energy Services division [6] Other Important Information - Consolidated cash flow from operations for Q1 2025 was an inflow of $600,000, a significant improvement from an outflow of $2,400,000 in Q1 2024 [11] - The unrestricted cash balance at the end of the quarter was $1,900,000, down from $4,000,000 at the end of 2024, primarily due to cash used for the acquisition of ADT [11] Q&A Session Summary Question: Dynamics between Edge Builder and Building Solutions regarding project delays - Management clarified that delays were specific to a large project at EdgeBuilder, which paused for two months but is back on track for revenue recognition in Q2 [16] Question: Early signs of projects being put on hold due to pricing - Management indicated that there are no signs of projects being put on hold, with a strong backlog supporting ongoing construction demand [18] Question: Gross profit margin changes in Alliance Drilling - Management explained that the gross profit margin fluctuation is a function of intra-quarter activity and that Alliance Drilling maintains high gross margins [25][27] Question: Equipment rental revenue terms in Alliance - Management described the rental terms as project-based, with high rental rates due to the nature of the equipment used in drilling operations [30]

Core Insights - The company reported a significant increase in consolidated revenues for Q1 2025, rising by 41.7% to $12.9 million compared to $9.1 million in Q1 2024, primarily driven by acquisitions and improved performance in its Building Solutions division [4][7][3] - The acquisition of Alliance Drilling Tools marks the company's entry into the Energy Services sector, complementing its existing operations [3] - The Building Solutions backlog reached a record $27.9 million at the end of the quarter, indicating strong future demand [3][4] Financial Performance - Q1 2025 revenues increased to $12.9 million from $9.1 million in Q1 2024, reflecting a 41.7% growth [4][7] - Building Solutions revenue grew by 32.9% year-over-year, attributed to the inclusion of Timber Technologies Solutions and improved results at KBS [5][6] - Gross profit for Q1 2025 was $3.1 million, a 99.2% increase from $1.6 million in Q1 2024, with a gross margin improvement to 24.3% from 17.3% [6][8] Operational Highlights - The integration of Alliance Drilling Tools is progressing smoothly, with a focus on future growth and potential acquisitions in both Building Solutions and Energy Services divisions [3] - The company experienced a net loss of $1.2 million in Q1 2025, an improvement from a net loss of $2.2 million in the same period last year [10][11] - Cash flow from operations improved significantly, with an inflow of $563 thousand compared to an outflow of $2.4 million in Q1 2024, driven by better operational results and strong accounts receivable collections [12] Backlog and Future Outlook - The Building Solutions division's backlog increased to $27.9 million, indicating strong demand for new projects despite some delays in commercial projects [3][5] - The company anticipates strong performance in the second quarter and full-year 2025 based on current backlog and sales pipeline [3][4] Dividends and Stock Information - The board declared a cash dividend of $0.25 per share for Series A Preferred Stock, totaling approximately $0.5 million [14] - As of March 31, 2025, the company had remaining authorization to repurchase up to $721 thousand of its common stock under its stock repurchase program [17]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased by 21.1% to $17.1 million compared to $14.1 million in Q4 2023, while full year 2024 revenue rose 16.5% to $53.4 million from $45.8 million in 2023 [6] - Q4 2024 gross profit increased by 55.3% to $4.5 million from $2.9 million in Q4 2023, primarily due to the acquisition of Timber Technologies [7] - For the full year 2024, gross profit declined by 7.2% to $11.1 million from $11.9 million in 2023, attributed to a one-time purchase price accounting adjustment and lower revenues in certain businesses [7][15] - Q4 2024 net loss from continuing operations was $2.5 million compared to net income of $1.8 million in Q4 2023, while non-GAAP adjusted net income was $0.5 million or $0.15 per diluted share [18] Business Line Data and Key Metrics Changes - The Building Solutions division faced demand softness in the first half of 2024 but saw momentum shift in the second half, with a signed backlog of $17.2 million at year-end [10] - Non-GAAP adjusted EBITDA for the Building Solutions division increased to $2.3 million in Q4 2024 from $0.7 million in Q4 2023 [18] Market Data and Key Metrics Changes - The company is monitoring the impact of current fiscal policies, including tariffs on Canadian lumber, which could affect construction costs and demand [11] - The Energy Services division was established through the acquisition of Alliance Drilling Tools, which generated approximately $10.5 million in revenue for full year 2024 [12][13] Company Strategy and Development Direction - The company is focused on expanding its Building Solutions division, leveraging structural tailwinds as factory-built construction gains market share [10] - The acquisition of Alliance Drilling Tools diversifies the operating portfolio and is expected to contribute significantly to consolidated results [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales pipeline and backlog, indicating substantial growth potential into 2025 [30] - The company is taking preemptive actions to mitigate risks associated with input costs and is optimistic about the long-term growth of its operating companies [11][12] Other Important Information - The company ended 2024 with an outstanding interest-bearing debt of $11.3 million, up from $2.0 million at the end of 2023, largely due to the Timber Technologies acquisition [21] - Cash balance decreased to $5.6 million from $18.9 million at the end of 2023, reflecting the financing related to acquisitions [21] Q&A Session Summary Question: Inquiry about Building Solutions and margin improvement - Management indicated that margin improvements in the Building Solutions division are driven by increased revenues and spreading fixed costs across more projects [28] Question: Clarification on other expenses in the quarter - The $1.7 million in other expenses was primarily due to a write-down on an investment related to Digirad, reclassified from SG&A to other income [34] Question: Impact of Enservco on Alliance Drilling - Management confirmed that the issues with Enservco do not impact Alliance Drilling [46] Question: Thoughts on selling the company or parts of it - Management stated that all options are on the table to maximize shareholder value, acknowledging the stock's undervaluation [66]