Hudson Global, Inc.

Good morning and welcome to the Hudson Global Conference call for the first quarter of 2023. Our call today will be led by Chief Executive Officer Jeff Eberwine and Chief Financial Officer Matt Damond. Please be advised that 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 with 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 long-gap terms such as constant currency, adjusted EBITDA, adjusted earnings per diluted share. Reconciliations for these measures are included in our earnings release and in our quarterly slides, both posted on our website, hudsonrpo.com. I encourage you to access the earnings material at this time as they will serve as a helpful reference guide during this call. I would now turn the conference 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 first quarter 2023 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 first quarter of 2023, we reported revenue of $43 million, down 13% year-over-year in constant currency. Adjusted net revenue was $22 million and decreased 12% year-over-year in constant currency. S&A costs were $21 million in the first quarter, 5% versus the same period last year in constant currency. We reported adjusted EBITDA of $1.1 million, down 77% in constant currency versus a year ago. In addition, we reported a net income of $0.4 million, or $0.11 per share, versus a net income of $3 million, or $0.97 per diluted share, in the same period last year. We reported adjusted net income for a diluted share of $0.22 in first quarter 2023 versus $1.23 a year ago. I'll now turn the call over to Matt Diamond, CFO, to review our financial results by region as well as some additional financial details from the first quarter.

Thank you, Jeff, and good morning, everyone. Revenue and adjusted net revenue for our America's business decreased 36% and 35%, respectively, in constant currency. Break-even adjusted EBITDA decreased versus last year's adjusted EBITDA of $3.5 million. Revenue for our Asia Pacific business decreased 8% year-over-year in constant currency, and adjusted net revenue grew 9% in constant currency. Adjusted EBITDA of $1.7 million decreased from adjusted EBITDA of $2.4 million a year ago. Our EMEA business grew revenue 16% and adjusted net revenue 31% in constant currency. Adjusted EBITDA of $0.5 million in the first quarter of 2023 increased from adjusted EBITDA of $0.3 million a year ago. Turning to some additional financial details from the first quarter, we ended Q1 with $22.3 million in cash and restricted cash. Day sales outstanding was 53 days at March 2023, up from DSO of 47 days at March 2022. In connection with the acquisition of Coit Group in the fourth quarter of 2020, Karani in the fourth quarter of 2021, and Hunt & Badge in the third quarter of 2022, our balance sheet as of March 31, 2023, reflects $4.9 million of goodwill and $4.3 million of net amortizable intangible assets. The company's working capital, excluding cash, increased significantly to $12.7 million in the first quarter of 2023 from $7.3 million at the end of 2022. The company used $5 million in cash flow from operations during the first quarter. The cash flow use was due to seasonal moves in working capital that we typically see in Q1, as well as a $2 million outflow for the final earn-out payment related to the COI acquisitions. 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.