Hudson Global, Inc.

Good morning and welcome to the Hudson Global's fourth quarter 2023 Financial Results Conference call. Our call today 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 law. 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 to be filed today and in our other filings made by 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 helpful reference guide during our call. I will now turn the call over to Jeff Everwan.

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 2024 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 2023, we reported revenue of $34 million, down 22% year-over-year in constant currency. Adjusted net revenue was $17 million and decreased 26% year-over-year in constant currency. SG&A costs were $16 million in the fourth quarter, down 17% versus the same period last year in constant currency. down from $2.4 million a year ago. In addition, we reported a net income of $0.7 million or $0.23 per diluted share versus net income of $0.1 million or $0.02 per diluted share in the same period last year. We reported adjusted net income per diluted share of $0.04 in fourth quarter 2023 versus $0.33 a year ago. For further context, I would add that our fourth quarter 2023 adjusted EBITDA included $400,000 of expenses related to a true-up to our accounts receivable and related reserves. These kind of expenses tend to be lumpy in nature, and our team is working hard to hydrate our client portfolio and therefore our AR going forward. So adjusted EBITDA would have been $0.5 million excluding these expenses. I'll now turn the call over to Matt Diamond, our CFO. to review our financial results by region, as well as add some additional financial details from the fourth quarter.

Thank you, Jeff, and good morning, everyone. Revenue for America's business decreased 38%, and adjusted net revenue decreased 37% in constant currency. Adjusted EBITDA loss of $0.7 million decreased versus last year's adjusted EBITDA of $0.5 million. Revenue and adjusted net revenue for our Asia Pacific business each decreased 18% year-over-year in constant currency. Adjusted EBITDA of $0.9 million decreased from adjusted EBITDA of $2.1 million a year ago. Revenue and adjusted net revenue for our Europe business each decreased 17% versus the prior quarter in constant currency. Adjusted EBITDA of 0.6 million in the fourth quarter of 2023 increased slightly from adjusted EBITDA of 0.5 million a year ago. Turning to some additional financial details from the fourth quarter. We ended the fourth quarter with 23 million in cash and restricted cash. Day sales outstanding was 49 days at December 2023, down slightly from DSO of 50 days in December 2022. In connection with the acquisitions of Coit Group in 2020, Karani in 2021, Hunt & Badge in 2022, and Hudson Singapore in the fourth quarter of 2023, our balance sheet as of December 31, 2023 reflects $5.7 million of goodwill and $3.6 million of net amortizable intangible assets. The company's working capital, excluding cash, increased significantly to $12.0 million at year-end 2023 from $7.3 million at the end of 2022. The company generated $3.3 million in cash flow from operations during the fourth 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.