Hudson Global, Inc.

Good morning and welcome to the Hudson Global Conference Call for the third 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 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 8K filed today and in our other filings made with the Securities and Exchange Commission, including our annual report on Form 10K. 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 deleted 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 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 Eberwein.

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 third 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 third quarter of 2021, we reported revenue of $45 million, up 72% year-over-year in cost of currency. Adjusted net revenue, formerly referred to as gross profit, was $18 million and increased 93% year-over-year in cost of currency. Estimate costs were $15.1 million in the third quarter, up 51% versus the same period last year in cost of currency. We reported adjusted EBITDA of $3 million up from an adjusted EBITDA loss of $700,000 a year ago. In addition, we reported net income of $1.5 million or $0.49 per diluted share versus a net loss of $1.2 million or $0.41 per diluted share in the same period last year. We reported adjusted net income per diluted share of $0.78 in the third quarter of 2021 versus an adjusted net loss per share of 38 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 some additional financial details from the third quarter.

Thank you, Jeff, and good morning, everyone. Our Asia-Pacific business grew revenue 58% and adjusted net revenue 54% in constant currency. Adjusted EBITDA of $2.2 million increased from adjusted EBITDA of $900,000 a year ago. Our Americas business grew revenue and adjusted net revenue 280% and 315% in constant currency, respectively, with over 40% of this growth attributable to organic results, while the remainder was due to the acquisition of Quake Group. Adjusted EBITDA of $1.4 million increased versus last year's adjusted EBITDA loss of $800,000. Our EMEA business grew revenue 39%, and adjusted net revenue 22% in constant currency. Adjusted EBITDA of 0.2 million in Q3 2021 increased compared to breakeven adjusted EBITDA in Q3 of last year. Lastly, we believe it's important to highlight that adjusted net revenue grew at a faster rate than SG&A across each of our three regions in Q3. 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 the 20% level over the long term. Turning to some additional financial details from the third quarter, we ended Q3 with $26.5 million in cash and restricted cash. Price sales outstanding was 39 days at September 2021, in line with DSO we had at September 2020. In connection with the acquisition of the Coit Group in the fourth quarter of 2020, our balance sheet as of September 30th, 2021, reflects $2.1 million of goodwill and $1.2 million of net intangible assets. The company's working capital, excluding cash, increased to $5.7 million in the third quarter of 2021 from $4.5 million at the end 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 Q3. The company generated $2.3 million in cash flow from operations during the third 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.