Hudson Global, Inc.

Good morning, and welcome to the Hudson Global Conference call for the fourth quarter of 2020. Our call this morning will be led by Chief Executive Officer Jeff Eberwine and Chief Financial Officer Matt Diamond. Please be advised that the statements made during the presentation include forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties, that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are discussed in our Form 8-K file today and in our other filings made with the Securities and Exchange Commission, including our annual report on Form 10-K. The company disclaims any obligation to update any forward-looking statements. During the course of this conference call, references will be made to non-GAAP terms such as constant currency, adjusted EBITDA, and adjusted earnings per diluted share. Reconciliations for this measure are included in our earnings release and quarterly slides, both posted on our website, hudsonrpo.com. I encourage you to access our earnings materials at this time, as they will serve as a helpful reference guide during our call. I will now turn the call over to Jeff Eberlein.

Thank you, Operator, and welcome, everyone. We thank you for your interest in Hudson Global and for joining us today. I'll start by reviewing the fourth quarter 2020 highlights, and Matt Diamond, our CFO, will provide some additional details on our financial results. I'll then give an update on current business conditions. For the fourth quarter of 2020, we reported revenue of $27.3 million, up 2% year-over-year in constant currency. Adjusted net revenue formerly referred to as gross profit, was $11.3 million and decreased 2% year-over-year in constant currency. SG&A costs were $10.5 million in the fourth quarter, down 1% versus the same period a year ago. We reported adjusted EBITDA of $700,000 compared to adjusted EBITDA of $900,000 a year ago. In addition, we reported net income of $1.2 million or 41 cents per share versus net income of 1.5 million or 48 cents per share in the same period last year. We reported adjusted net income per share of 20 cents in the fourth quarter 2020 versus adjusted net income per share of 51 cents a year ago. Turning to performance for the quarter by region, our Asia Pacific business grew 5% in constant currency while adjusted net revenue declined 8% in constant currency. Adjusted EBITDA of 1.5 million increased from adjusted EBITDA of 1.2 million a year ago. For the full year 2020, our Asia Pacific business grew adjusted EBITDA to 3.9 million from 3.3 million in 2019. To generate this level of growth in 2020 is an amazing accomplishment and I'm very proud of the results our Asia-Pacific team have been able to produce given the headwinds facing them this year. Our Americas business grew revenue and adjusted net revenue 20% and 16% in constant currency, respectively. Adjusted EBITDA loss of $100,000 decreased versus last year's adjusted EBITDA of positive $200,000. Our May of business saw revenue decline 20% in constant currency. Adjusted net revenue declined 9% in constant currency. Adjusted EBITDA of $200,000 in the fourth quarter decreased compared to adjusted EBITDA of $400,000 in the fourth quarter of last year. I'll now turn the call over to Matt Diamond, our CFO, to review some additional financial details from the fourth quarter.

Thank you, Jeff, and good morning, everyone. In connection with the acquisition of Coit Group, our balance sheet, as of December 31, 2020, reflects $2.1 million of goodwill and $1.4 million of net intangible assets. The company used $100,000 in cash flow from operations during the fourth quarter. Days sales outstanding was 41 days at December 2020, which was slightly below DSO of 42 days we had at December 2019. We ended the quarter with $26.2 million in cash and restricted cash. As a reminder, in April 2019, we finalized a new credit facility in Australia to support the expected growth in working capital needs as a result of new client wins in that market. But we had nothing drawn down on this facility at the end of Q4. In April 2020, we received a loan through the SBA PPP program for $1.3 million. In the fourth quarter of 2020, we received full forgiveness for this loan. This was split out into its own line item labeled PPP Loan Forgiveness in our fourth quarter results. I'll now turn the call back over to Jeff to give some more perspective on our RPO business and to review current trends in our business.