Hudson Global, Inc.

Good morning and welcome to the Hudson Global conference call for the fourth 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 8-K filed 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 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 help of 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 fourth 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 fourth quarter of 2021, we reported revenue of 50.1 million, up 83% year over year in constant currency. Adjusted net revenue was 22.3 million and increased 97% year over year in constant currency. Organic revenue growth, excluding the impact of the Karani acquisition we made in the fourth quarter of 2021, was 77% in constant currency. Adjusted net revenue growth was 83% in constant currency. SG&A costs were $17.7 million in the fourth quarter, up 67% versus the same period last year in constant currency. We reported adjusted EBITDA of $4.6 million, up from $700,000 a year ago. In addition, We reported net income of 2.1 million or 67 cents per diluted share versus net income of 1.2 million or 41 cents per diluted share in the same period last year. We reported adjusted net income per diluted share of $1.02 in the fourth quarter of 2021 versus 20 cents a year ago. And now I'll 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 fourth quarter.

Thank you, Jeff. Good morning, everyone. Our Asia-Pacific business grew revenue 61% and adjusted net revenue 46% in constant currency. Adjusted EBITDA of $2.4 million increased from adjusted EBITDA of $1.5 million a year ago. Our America's business grew revenue and adjusted net revenue 222% and 242% in constant currency, respectively, with approximately 80% of this growth attributable to organic growth, while the remainder was due to the acquisition of Karani in the fourth quarter of 2021. Adjusted EBITDA of $2.7 million increased versus last year's adjusted EBITDA loss of $0.1 million. Our EMEA business grew revenue 66% and adjusted net revenue 30% in constant currency. Adjusted EBITDA of 0.5 million in Q4 2021 increased compared to adjusted EBITDA of 0.2 million in Q4 of last year. Lastly, we believe it is important to highlight that adjusted net revenue again grew at a faster rate than SG&A across each of our regions in Q4. 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 fourth quarter, we ended Q4 with $22.1 million in cash and restricted cash. Days sales outstanding was 43 days at December 2021, slightly higher than DSO of 41 days. in December 2020. In connection with the acquisition of Coit Group in the fourth quarter of 2020 and Karani in the fourth quarter of 2021, our balance sheet, as of December 31st, 2021, reflects $4.2 million of goodwill and $5.5 million of net intangible assets. The company's working capital, excluding cash, increased to $7.8 million in the fourth quarter of 2021 from $4.5 million at the end of 2020. As a reminder, in April 2019, we finalized a 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 Q4. Our balance sheet, as of December 31, 2021, reflects a $2 million promissory note payable as a result of the Karani acquisition, with $1.25 million shown as a long-term note payable on the balance sheet and the remainder of $750,000 is included within other current liabilities. The company generated $1.7 million in cash flow from operations during the fourth quarter. I'll now turn the call back over to Jeff to give more perspective on our RPO business and to review current trends in our business.