Hudson Global, Inc.

Good morning and welcome to the Hudson Global Conference call for the second quarter of 2021. 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 performance of Such forward-looking statements involve certain risks and uncertainties that may cause actual resource to differ materially from those contained in the forward-looking statements. These risks are discussed in our Form 8-K filed today and in our 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 these measures are included in our earnings release and quarterly slides, both posted on our website, hudsonrpo.com. I encourage you to access our earning 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 Everwine.

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 second quarter 2021 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 second quarter of 2021, we reported revenue of $39.7 million, up 41% year-over-year in constant currency. Adjusted net revenue, formerly referred to as gross profit, was $15.1 million and increased 53% year over year in constant currency. SG&A costs were $13.4 million in the second quarter, up 33% versus the same period last year in constant currency. We reported adjusted EBITDA of 1.7 million up from an adjusted EBITDA loss of 0.4 million a year ago. In addition, we reported a net loss of $100,000 or 4 cents a share versus a net loss of $800,000 or 27 cents a share in the same period last year. We reported adjusted net income per share of 15 cents in the second quarter 2021 versus an adjusted net loss per share of 13 cents a year ago. I'll now turn the call over to Matt Diamond, our CFO, to review our financial results by region as well as provide some additional details from the second quarter.

Thank you, Jeff, and good morning, everyone. Our Asia Pacific business grew revenue 32% in constant currency and grew adjusted net revenue 26% in constant currency. Adjusted EBITDA of $1.4 million increased from adjusted EBITDA of $1.0 million a year ago. Our Americas business grew revenue and adjusted net revenue 139% and 159% in constant currency, respectively, with approximately 40% of this increase attributable to organic growth with the remainder due to the acquisition of the Quik Group. Adjusted EBITDA of $0.5 million increased versus last year's adjusted EBITDA loss of $0.6 million. Our EMEA business grew revenue 39% in constant currency and 30% in constant currency adjusted net revenue. Adjusted EBITDA of $0.6 million in Q2 2021 increased compared to adjusted EBITDA of $0.1 million in Q2 of last year. Lastly, we believe it's important to highlight that adjusted net revenue grew at a faster rate than SG&A in Q2 across each of our three regions. This operational leverage we are seeing is critical to achieving our goal of growing adjusted EBITDA before corporate costs as a percentage of adjusted net revenue to 20% over the long term. Turning to some additional financial details from the second quarter, we ended Q2 with $24.5 million in cash and restricted cash. Days sales outstanding was 41 days at June 2021, slightly below DSO of 42 days that we had in June 2020. In connection with the acquisition of Coit Group in the fourth quarter of 2020, our balance sheet as of June 30, 2021, reflects $2.1 million of goodwill and $1.2 million of net intangible assets. The company's working capital, excluding cash, increased to $6.4 million in the second quarter of 2021, up from $4.5 million at the end of the fourth quarter of 2020. 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 on this facility at the end of Q2. The company generated $1.0 million in cash flow from operations during the second quarter. 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.