Hudson Global Reports 2014 Third Quarter Results and Announces Sale of Legal eDiscovery Business to DTI

Third Quarter Revenue and Gross Margin From Continuing Operations Grew 7% and 10% Respectively vs Prior Year

NEW YORK, Nov. 10, 2014 (GLOBE NEWSWIRE) -- Hudson Global, Inc. (Nasdaq:HSON), a leading global talent solutions company, today announced financial results for the third quarter ended September 30, 2014 and the sale of its Legal eDiscovery business to DTI, the largest privately-held legal process outsourcing company in the U.S.

DTI paid $23 million in cash for the assets of Hudson's Legal eDiscovery business, subject to a customary post-closing net working capital adjustment.

2014 Third Quarter Summary

With the sale of its Legal eDiscovery business, and the previously reported cessation of direct operations in Sweden, the results of both businesses are treated as discontinued operations in the third quarter 2014 financial statements for all periods presented. Other than net income, the financial information discussed herein refers to continuing operations only.

Revenue from continuing operations of $149.3 million, up 7.2 percent from the third quarter of 2013, or 4.3 percent in constant currency.
 Gross margin from continuing operations of $55.7 million, an increase of 10.3 percent from the third quarter of 2013, or 8.3 percent in constant currency.
 Adjusted EBITDA* loss from continuing operations of $2.9 million, an improvement of 30.9 percent or 31.1 percent in constant currency, as compared with a loss of $4.1 million in the same period last year.
 Restructuring charges from continuing operations of $0.8 million in the third quarter of 2014, as compared with $0.6 million in the third quarter of 2013.
 Net loss** of $7.0 million, or $0.21 per basic and diluted share, as compared with net loss of $5.0 million, or $0.15 per basic and diluted share in the same period last year.

* Adjusted EBITDA is defined in the segment tables at the end of this release.

** Net income/loss includes continuing and discontinued operations.

Year-over-year gross margin growth in the Americas and Asia Pacific was 19 percent and 15 percent, respectively. Third quarter gross margin was nearly flat in Europe, up 1 percent on a year-over-year basis, as some countries were affected by deteriorating economic conditions. In terms of business lines, RPO and talent management led the way with gross margin growth of 27 percent and 28 percent respectively, all in constant currency.

"Having successfully sold our Legal eDiscovery business, we are narrowing our focus and enhancing our ability to deliver improved results from our core business lines," said Manolo Marquez, chairman and chief executive officer at Hudson. "We expect to continue to invest selectively to accelerate growth in our core businesses, while driving additional efficiencies in our operations to deliver sustained profitability."

Stephen Nolan, chief financial officer at Hudson said, "Our investments in people and processes during the last year are having a greater impact on the organization. We will maintain our focus on disciplined execution in our core businesses as we push for continued improvements in productivity and business results in the coming quarters."

Strategic Actions

The divestiture of the Legal eDiscovery business is an important component of the company's previously announced strategic efforts to focus on its core business lines and growth opportunities. In the short-term, the company will have certain support costs remaining in its existing Americas business, as it transitions to a more efficient support structure. The company estimates these costs totaled approximately $1 million in the third quarter of 2014.

During the third quarter, the company also implemented some of the changes associated with its engagement of AlixPartners, LLP to assist management in identifying opportunities to better align the organization model to a more focused business after the divestiture of Legal eDiscovery and support profitable growth in core areas. Among the changes implemented in the third quarter were the streamlining of the front office administrative support in the Asia Pacific region and parts of Europe. The restructuring charges associated with the third quarter changes were $0.8 million. The Hudson Board of Directors had previously approved restructuring charges of up to $7 million to be taken by the end of the first half of 2015. The company expects an ongoing annualized return of 1.5 to 2x the charge.

Regional Highlights

Americas

Americas' gross margin increased 19 percent in the third quarter as compared with the same period in 2013. After becoming the company's largest practice in the Americas on a gross margin basis in the first quarter of 2014, RPO continued to deliver strong results with 38 percent gross margin growth in the third quarter. The remaining business grew by 3 percent. The quarterly growth in gross margin helped deliver adjusted EBITDA of $0.7 million for the third quarter, or 5.7 percent of revenue, compared with adjusted EBITDA of $0.1 million, or 1.0 percent of revenue for the same quarter a year ago.

Asia Pacific

Asia Pacific's gross margin increased 15 percent in constant currency in the third quarter as compared with the same period in 2013. This was the third consecutive quarter of year-over-year gross margin growth. Results were fueled by growth in Australia and China with gross margin increasing 22 percent and 27 percent, respectively, against the prior year. Talent management delivered 30 percent growth in Asia Pacific, led by large assessment and career transition projects in Australia. This gross margin growth resulted in adjusted EBITDA of $0.6 million, or 0.9 percent of revenue, as compared to a loss of $0.5 million in the third quarter of 2013.

Europe

Europe's gross margin showed minimal growth in the third quarter, increasing by 1 percent in constant currency compared with the third quarter of 2013. Gross margin increases in Belgium and Spain were partially offset by a mixed performance in other markets in Europe. The UK delivered growth in permanent recruitment against softness in RPO. Strength in talent management, particularly in Belgium, more than compensated for the softness in permanent recruitment, with gross margin increasing by 27 percent in Europe against prior year. Europe delivered an adjusted EBITDA loss of $0.3 million, as compared with adjusted EBITDA of $0.4 million, or 0.5 percent of revenue, for the quarter a year ago.

Liquidity and Capital Resources

The company ended the third quarter of 2014 with $46.8 million in liquidity, composed of $18.8 million in cash and $28.0 million in availability under its credit facilities. This compares with $17.9 million in cash and $34.1 million in availability under its credit facilities at the end of the second quarter of 2014, and $33.2 million in cash and $38.8 million in availability under its credit facilities at the end of the third quarter of 2013. The company used $2.4 million in cash flow from operations during the third quarter, and had $8.2 million in outstanding borrowings at the end of the third quarter.

Business Outlook

Given current economic conditions, and in particular the significant weakening of the EuroZone economy, the company expects fourth quarter 2014 revenue of between $135 million and $145 million and adjusted EBITDA of between negative $1 million and negative $3 million at prevailing exchange rates. In the fourth quarter of 2013, revenue was $140.0 million and adjusted EBITDA was a loss of $2.0 million.

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 in nearly 20 countries 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; 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 negative cash flows and operating losses that the company has experienced in recent periods and may experience from time to time in the future; restrictions on the company's operating flexibility due to the terms of its credit facilities; the company's ability to achieve anticipated cost savings through its cost reduction initiatives; 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; restrictions imposed by blocking arrangements; risks related to activist stockholders; and risks related to limited availability under the company's credit facilities. 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 September 30,Nine Months Ended September 30,   2014201320142013 Revenue  $ 149,278  $ 139,287  $ 444,515  $ 422,573 Direct costs  93,591  88,796  274,927  265,982 Gross margin  55,687  50,491  169,588  156,591 Operating expenses:         Selling, general and administrative expenses  58,539  54,614  174,672  169,039 Depreciation and amortization  1,467  1,408  4,242  4,461 Business reorganization expenses  794  594  2,026  3,803 Total operating expenses  60,800  56,616  180,940  177,303 Operating income (loss)  (5,113)  (6,125)  (11,352)  (20,712) Non-operating income (expense):         Interest income (expense), net  (192)  (146)  (533)  (422) Other income (expense), net  176  294  (325)  475 Income (loss) from continuing operations before provision for income taxes  (5,129)  (5,977)  (12,210)  (20,659) Provision for (benefit from) income taxes  (558)  (392)  37  (775) Income (loss) from continuing operations  (4,571)  (5,585)  (12,247)  (19,884) Income (loss) from discontinued operations, net of income taxes  (2,448)  538  (3,690)  785 Net income (loss)  $ (7,019)  $ (5,047)  $ (15,937)  $ (19,099) Earnings (loss) per share:         Basic and diluted         Income (loss) from continuing operations  $ (0.14)  $ (0.17)  $ (0.38)  $ (0.61) Income (loss) from discontinued operations  (0.07)  0.02   (0.11)  0.02  Net income (loss)  $ (0.21)  $ (0.15)  $ (0.49)  $ (0.59) Weighted-average shares outstanding:         Basic  32,910  32,600  32,769  32,468 Diluted  32,910  32,600  32,769  32,468
  HUDSON GLOBAL, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited)         September 30,
2014December 31,
2013ASSETS     Current assets:     Cash and cash equivalents  $ 18,753  $ 37,378 Accounts receivable, less allowance for doubtful accounts of $1,065 and $1,041, respectively  83,116  76,467 Prepaid and other  8,753  7,960 Current assets of discontinued operations  13,310  12,518 Total current assets  123,932  134,323 Property and equipment, net  12,031  11,989 Deferred tax assets, non-current  6,134  7,124 Other assets  4,927  5,393 Total assets  $ 147,024  $ 158,829 LIABILITIES AND STOCKHOLDERS' EQUITY     Current liabilities:     Accounts payable  $ 5,888  $ 8,899 Accrued expenses and other current liabilities  52,347  51,917 Short-term borrowings  8,217  476 Accrued business reorganization expenses  2,430  3,275 Current liabilities of discontinued operations  5,762  5,251 Total current liabilities  74,644  69,818 Deferred rent and tenant improvement contributions  6,328  5,333 Income tax payable, non-current  2,468  3,872 Other non-current liabilities  5,297  5,421 Total liabilities  88,737  84,444 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 33,240 and 33,543 shares, respectively  34  34 Additional paid-in capital  476,271  475,461 Accumulated deficit  (433,359)  (417,422) Accumulated other comprehensive income  15,797  17,173 Treasury stock, 127 and 211 shares, respectively, at cost  (456)  (861) Total stockholders' equity  58,287  74,385 Total liabilities and stockholders' equity  $ 147,024  $ 158,829
  HUDSON GLOBAL, INC.SEGMENT ANALYSIS - QUARTER TO DATE(in thousands)(unaudited)             For The Three Months Ended September 30, 2014Hudson
AmericasHudson
Asia PacificHudson
EuropeCorporateTotal Revenue, from external customers  $ 13,036   $ 66,990   $ 69,252   $ -  $ 149,278 Gross margin, from external customers  $ 5,570   $ 24,654   $ 25,463   $ -  $ 55,687 Adjusted EBITDA (loss) (1)  $ 738   $ 616   $ (288)  $ (3,917)  $ (2,851) Business reorganization expenses (recovery)  -  140   421   233   794 Non-operating expense (income), including corporate administration charges  705   226   1,583   (2,689)  (175) EBITDA (loss) (1) $ 33  $ 250  $ (2,292) $ (1,461) $ (3,470) Depreciation and amortization expenses          1,467  Interest expense (income), net          192  Provision for (benefit from) income taxes          (558) Net income (loss) from continuing operations          $ (4,571)             For The Three Months Ended September 30, 2013Hudson
AmericasHudson
Asia PacificHudson
EuropeCorporateTotal Revenue, from external customers  $ 12,760   $ 58,274   $ 68,253   $ -  $ 139,287  Gross margin, from external customers  $ 4,682   $ 21,348   $ 24,461   $ -  $ 50,491  Adjusted EBITDA (loss) (1)  $ 126   $ (460)  $ 368   $ (4,157)  $ (4,123) Business reorganization expenses (recovery)  74   -  152   368   594  Office integration expense and (gains) on disposal of business  -  -  -  -  - Non-operating expense (income), including corporate administration charges  432   (335)  913   (1,304)  (294) EBITDA (loss) (1)  $ (380)  $ (125)  $ (697)  $ (3,221)  $ (4,423) Depreciation and amortization expenses          1,408  Interest expense (income), net          146  Provision for (benefit from) income taxes          (392) Net income (loss) from continuing operations          $ (5,585)             (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 June 30, 2014Hudson
AmericasHudson
Asia PacificHudson
EuropeCorporateTotal Revenue, from external customers  $ 13,158   $ 65,101   $ 72,811   $ -  $ 151,070  Gross margin, from external customers  $ 5,393   $ 24,519   $ 29,959   $ -  $ 59,871  Adjusted EBITDA (loss) (1)  $ 843   $ 996   $ 2,678   $ (4,860)  $ (343) Business reorganization expenses (recovery)  3   1,115   -  -  1,118  Non-operating expense (income), including corporate administration charges  741   462   1,566   (2,463)  306  EBITDA (loss) (1)  $ 99   $ (581)  $ 1,112   $ (2,397)  $ (1,767) Depreciation and amortization expenses          1,404  Interest expense (income), net          202  Provision for (benefit from) income taxes          193  Net income (loss) from continuing operations          $ (3,566)             For The Three Months Ended December 31, 2013Hudson
AmericasHudson
Asia PacificHudson
EuropeCorporateTotal Revenue, from external customers  $ 12,348   $ 55,404   $ 72,247   $ -  $ 139,999  Gross margin, from external customers  $ 4,894   $ 20,045   $ 27,899   $ -  $ 52,838  Adjusted EBITDA (loss) (1)  $ 1,235   $ (1,272)  $ 953   $ (2,924)  $ (2,008) Business reorganization expenses (recovery)  88   887   635   29   1,639  Non-operating expense (income), including corporate administration charges  714   299   2,550   (2,514)  1,049  EBITDA (loss) (1)  $ 433   $ (2,458)  $ (2,232)  $ (439)  $ (4,696) Depreciation and amortization expenses          1,461  Interest expense (income), net          132  Provision for (benefit from) income taxes          4,039  Net income (loss) from continuing operations          $ (10,328)             (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 (continued)(in thousands)(unaudited)             For The Nine Months Ended September 30, 2014Hudson
AmericasHudson
Asia PacificHudson
EuropeCorporateTotal Revenue, from external customers  $ 38,437   $ 188,522   $ 217,556   $ -  $ 444,515  Gross margin, from external customers  $ 15,464   $ 70,083   $ 84,041   $ -  $ 169,588  Adjusted EBITDA (loss) (1)  $ 1,585   $ 1,724   $ 4,274   $ (12,667)  $ (5,084) Business reorganization expenses (recovery)  93   1,255   444   234   2,026  Non-operating expense (income), including corporate administration charges  1,818   1,104   4,321   (6,918)  325  EBITDA (loss) (1)  $ (326)  $ (635)  $ (491)  $ (5,983)  $ (7,435) Depreciation and amortization expenses          4,242  Interest expense (income), net          533  Provision for (benefit from) income taxes          37  Net income (loss) from continuing operations          $ (12,247)             For The Nine Months Ended September 30, 2013Hudson
AmericasHudson
Asia PacificHudson
EuropeCorporateTotal Revenue, from external customers  $ 39,509   $ 177,344   $ 205,720   $ -  $ 422,573  Gross margin, from external customers  $ 13,798   $ 67,117   $ 75,676   $ -  $ 156,591  Adjusted EBITDA (loss) (1)  $ 1,080   $ (175)  $ (319)  $ (13,027)  $ (12,441) Business reorganization expenses (recovery)  360   102   2,579   762   3,803  Office integration expense and (gains) on disposal of business  6   -  -  -  6  Non-operating expense (income), including corporate administration charges  1,862   495   4,065   (6,896)  (474) EBITDA (loss) (1)  $ (1,148)  $ (772)  $ (6,963)  $ (6,893)  $ (15,776) Depreciation and amortization expenses          4,461  Interest expense (income), net          422  Provision for (benefit from) income taxes          (775) Net income (loss) from continuing operations          $ (19,884)             (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.             Three Months Ended September 30,   20142013   As
reportedAs
reportedCurrency
translationConstant
currency Revenue:         Hudson Americas  $ 13,036  $ 12,760  $ (15)  $ 12,745 Hudson Asia Pacific  66,990  58,274  682  58,956 Hudson Europe  69,252  68,253  3,159  71,412 Total  $ 149,278  $ 139,287  $ 3,826  $ 143,113 Gross margin:         Hudson Americas  $ 5,570  $ 4,682  $ (15)  $ 4,667 Hudson Asia Pacific  24,654  21,348  170  21,518 Hudson Europe  25,463  24,461  752  25,213 Total  $ 55,687  $ 50,491  $ 907  $ 51,398 SG&A (1):         Hudson Americas  $ 4,835  $ 4,556  $ (7)  $ 4,549 Hudson Asia Pacific  23,981  21,781  257  22,038 Hudson Europe  25,806  24,119  676  24,795 Corporate  3,917  4,158  -  4,158 Total  $ 58,539  $ 54,614  $ 926  $ 55,540 Business reorganization expenses:         Hudson Americas  $ -  $ 74  $ -  $ 74 Hudson Asia Pacific  140  -  -  - Hudson Europe  421  152  3  155 Corporate  233  368  -  368 Total  $ 794  $ 594  $ 3  $ 597 Operating income (loss):         Hudson Americas  $ 601  $ (71)  $ (7)  $ (78) Hudson Asia Pacific  (442)  (1,217)  (97)  (1,314) Hudson Europe  (1,010)  (150)  58  (92) Corporate  (4,262)  (4,687)  -  (4,687) Total  $ (5,113)  $ (6,125)  $ (46)  $ (6,171) EBITDA (loss):         Hudson Americas  $ 33  $ (380)  $ (7)  $ (387) Hudson Asia Pacific  250  (125)  (83)  (208) Hudson Europe  (2,292)  (697)  69  (628) Corporate  (1,461)  (3,221)  -  (3,221) Total  $ (3,470)  $ (4,423)  $ (21)  $ (4,444)           (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)             Nine Months Ended September 30,   20142013   As
reportedAs
reportedCurrency
translationConstant
currency Revenue:         Hudson Americas  $ 38,437  $ 39,509  $ (50)  $ 39,459 Hudson Asia Pacific  188,522  177,344  (6,622)  170,722 Hudson Europe  217,556  205,720  12,385  218,105 Total  $ 444,515  $ 422,573  $ 5,713  $ 428,286 Gross margin:         Hudson Americas  $ 15,464  $ 13,798  $ (47)  $ 13,751 Hudson Asia Pacific  70,083  67,117  (2,223)  64,894 Hudson Europe  84,041  75,676  3,789  79,465 Total  $ 169,588  $ 156,591  $ 1,519  $ 158,110 SG&A (1):         Hudson Americas  $ 13,914  $ 12,721  $ (42)  $ 12,679 Hudson Asia Pacific  68,236  67,221  (2,319)  64,902 Hudson Europe  79,857  76,080  3,597  79,677 Corporate  12,665  13,017  -  13,017 Total  $ 174,672  $ 169,039  $ 1,236  $ 170,275 Business reorganization expenses:         Hudson Americas  $ 93  $ 360  $ -  $ 360 Hudson Asia Pacific  1,255  102  (8)  94 Hudson Europe  444  2,579  144  2,723 Corporate  234  762  -  762 Total  $ 2,026  $ 3,803  $ 136  $ 3,939 Operating income (loss):         Hudson Americas  $ 1,131  $ 340  $ (5)  $ 335 Hudson Asia Pacific  (1,997)  (2,690)  215  (2,475) Hudson Europe  2,824  (4,086)  (20)  (4,106) Corporate  (13,310)  (14,276)  -  (14,276) Total  $ (11,352)  $ (20,712)  $ 190  $ (20,522) EBITDA (loss):         Hudson Americas  $ (326)  $ (1,148)  $ 5  $ (1,143) Hudson Asia Pacific  (635)  (772)  103  (669) Hudson Europe  (491)  (6,963)  (214)  (7,177) Corporate  (5,983)  (6,893)  -  (6,893) Total  $ (7,435)  $ (15,776)  $ (106)  $ (15,882)           (1) SG&A is a measure that management uses to evaluate the segments' expenses.
HUDSON GLOBAL, INC.DISCONTINUED OPERATIONS RECONCILIATION(in thousands) (unaudited)               On July 29, 2014, the company's management and Board of Directors approved a plan for the divestiture of the company's Legal eDiscovery business within the Hudson Americas and Hudson Europe segments. Subsequently, the company has entered into an asset purchase agreement to divest the Legal eDiscovery business on November 7, 2014. Based on the terms of the asset purchase agreement, the company will not have any significant continuing involvement in the operations of the Legal eDiscovery business after the disposal transaction. In addition, other than providing short term transition services, the company expects that continuing cash flows will be eliminated within one year. In addition, the company decided to cease direct operations in Sweden within the Hudson Europe segment during the current quarter.               Reported results for the discontinued operations by period were as follows:                 Three Months Ended September 30, 2014Three Months Ended September 30, 2013   eDiscoverySwedenTotaleDiscoverySwedenTotal Revenue  $ 13,812  $ 214  $ 14,026  $ 23,707  $ 593  $ 24,300 Gross Margin  $ 2,007  $ 55  $ 2,062  $ 4,925  $ 381  $ 5,306 EBITDA (loss)  $ (1,915)  $ (721)  $ (2,636)  $ 1,372  $ (266)  $ 1,106 Other non-operating income (expense)  -  (8)  (8)  -  -  - Depreciation and amortization expense  42  -  42  120  -  120 Operating income (loss)  $ (1,957)  $ (713)  $ (2,670)  $ 1,252  $ (266)  $ 986                 Nine Months Ended September 30, 2014Nine Months Ended September 30, 2013   eDiscoverySwedenTotaleDiscoverySwedenTotal Revenue  $ 46,513  $ 1,502  $ 48,015  $ 76,107  $ 1,944  $ 78,051 Gross Margin  $ 7,647  $ 855  $ 8,502  $ 14,949  $ 1,438  $ 16,387 EBITDA (loss)  $ (2,182)  $ (1,116)  $ (3,298)  $ 2,743  $ (767)  $ 1,976 Other non-operating income (expense)  -  (28)  (28)  -  (3)  (3) Depreciation and amortization expense  270  -  270  370  2  372 Operating income (loss)  $ (2,452)  $ (1,088)  $ (3,540)  $ 2,373  $ (766)  $ 1,607
  HUDSON GLOBAL, INC.DISCONTINUED OPERATIONS RECONCILIATION (continued)(in thousands) (unaudited)                 Three Months Ended June 30, 2014Three Months Ended March 31, 2014   eDiscoverySwedenTotaleDiscoverySwedenTotal Revenue  $ 15,691  $ 604  $ 16,295  $ 17,010  $ 684  $ 17,694 Gross Margin  $ 2,598  $ 343  $ 2,941  $ 3,041  $ 457  $ 3,498 EBITDA (loss)  $ (258)  $ (215)  $ (473)  $ (10)  $ (180)  $ (190) Other non-operating income (expense)  -  (16)  (16)  -  (4)  (4) Depreciation and amortization expense  110  -  110  118  -  118 Operating income (loss)  $ (368)  $ (199)  $ (567)  $ (128)  $ (176)  $ (304)                 Three Months Ended December 31, 2013Three Months Ended September 30, 2013   eDiscoverySwedenTotaleDiscoverySwedenTotal Revenue  $ 18,632  $ 873  $ 19,505  $ 23,707  $ 593  $ 24,300 Gross Margin  $ 3,311  $ 747  $ 4,058  $ 4,925  $ 381  $ 5,306 EBITDA (loss)  $ (558)  $ (544)  $ (1,102)  $ 1,372  $ (266)  $ 1,106 Other non-operating income (expense)  (6)  1  (5)  -  -  - Depreciation and amortization expense  111  -  111  120  -  120 Operating income (loss)  $ (663)  $ (545)  $ (1,208)  $ 1,252  $ (266)  $ 986                 Three Months Ended June 30, 2013Three Months Ended March 31, 2013   eDiscoverySwedenTotaleDiscoverySwedenTotal Revenue  $ 25,305  $ 671  $ 25,976  $ 27,094  $ 679  $ 27,773 Gross Margin  $ 4,874  $ 523  $ 5,397  $ 5,149  $ 533  $ 5,682 EBITDA (loss)  $ 855  $ (212)  $ 643  $ 516  $ (291)  $ 225 Other non-operating income (expense)  2  -  2  -  (2)  (2) Depreciation and amortization expense  120  -  120  130  2  132 Operating income (loss)  $ 733  $ (212)  $ 521  $ 386  $ (291)  $ 95

CONTACT: David F. Kirby
         Hudson
         212-351-7216
         david.kirby@hudson.com

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Source: Hudson Global, Inc. via Globenewswire
HUG#1869990