Exhibit 99.1
FOR IMMEDIATE RLEASE
Contact: At Hudson Highland Group
Richard W. Pehlke
Executive VP & CFO
212-351-7285
At FRB | Weber Shandwick
Joe Calabrese
212-445-8434
HUDSON HIGHLAND GROUP REPORTS 2003
SECOND QUARTER AND SIX MONTH RESULTS
NEW YORK, NY - July 29, 2003 - Hudson Highland Group, Inc. (NASDAQ: HHGP), a
leading global professional staffing, HR consulting and executive search
enterprise, today announced results for the second quarter and six months ended
June 30, 2003. The Company reported revenues of $269.3 million and a net loss of
$15.1 million, or $1.79 per basic and diluted shares, for the second quarter
ended June 30, 2003.
2003 Second Quarter Summary
o Revenues of $269.3 million
o Gross margin of $103.7 million or 38.5%
o Adjusted EBITDA loss, excluding business reorganization and merger and
integration effects, of $12.4 million
o Cash and cash equivalents of $39.6 million
"Hudson Highland completed its first quarter as an independent company, with
financial results in line with our expectations and sequential improvement in
both our top and bottom-line results. We continue to aggressively manage our
balance sheet and during the quarter maintained our cash position at
approximately $40 million," commented Jon Chait, Chairman and Chief Executive
Officer of Hudson Highland Group.
Mr. Chait added, "We remain focused on growing the top line and increasing
productivity in our operating segments. Of note, during the quarter we achieved
improvement in operating performance in each of our major geographic regions.
Looking ahead, we are on plan to return to profitability by the middle of 2004.
Near term, as a result of the current global economic uncertainty, we have
become more cautious about our outlook for the remainder of 2003."
2003 Six Month Results
For the first six months of 2003, Hudson Highland Group reported revenues of
$528.5 million and an operating loss of $52.5 million. Hudson Highland Group's
net loss for the first six months of 2003 was $59.1 million, or $7.03 per basic
and diluted shares.
Historical Results
Historical results for 2002 relate to the company's businesses as they were
operated as a business unit of Monster Worldwide, Inc. (formerly TMP Worldwide
Inc.). On a historical basis for the second quarter ended June 30, 2002, Hudson
Highland Group reported revenues of $277.8 million and an operating loss of
$55.1 million. The Company's net loss for the second quarter of 2002 was $54.0
million, or $6.46 per basic and diluted share.
For the first six months of 2002, Hudson Highland Group reported revenues of
$541.9 million and an operating loss of $70.4 million. The Company's net loss
for the first six months of 2002 was $362.0 million, or $43.36 per basic and
diluted share. The six month net loss included a loss from the cumulative effect
of an accounting change for the write-off of $293.0 million of impaired
goodwill; excluding the accounting change, the net loss was $69.0 million or
$8.26 per basic and diluted share.
Conference Call / Webcast Hudson Highland Group will conduct a conference call
on Wednesday July 30, 2003 at 10:00 am ET to discuss this announcement.
Individuals wishing to participate can join the conference call by dialing
1-888-343-1848 at 9:50 AM ET. For those outside the United States, please call
in on 1-212-271-4760. Hudson Highland Group's quarterly conference call can also
be accessed online through Yahoo! Finance at www.yahoo.com and the investor
information section of the company's website at www.hhgroup.com.
About Hudson Highland Group
Hudson Highland Group, Inc. delivers a full suite of professional staffing,
recruitment, HR consulting services worldwide and executive search. Spun off
from human capital solutions provider Monster Worldwide, Inc. on March 31, 2003,
the company consists of three divisions: TMP/Hudson Global Resources, TMP/Hudson
Human Resource Consulting and TMP/Highland Partners. The two enterprises of
TMP/Hudson Global Resources and TMP/Hudson Human Resource Consulting work
together to assess, recruit, develop and deploy professional staffing, project
management and consulting services. TMP/Hudson Global Resources provides a wide
range of midlevel search, professional staffing and consulting services. At the
top end of the recruitment services spectrum, TMP/Highland Partners recruits at
the CEO, COO, CIO, CFO and Board of Director level, as well as senior level
operations and staff positions. With an employee base of 4,000 in nearly 30
countries, Hudson Highland Group is dedicated to providing unparalleled service
and value to clients and consumers. More information about the company is
available at www.hhgroup.com.
Safe Harbor Statement
This press release contains statements that the company believes to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact included in this press release, including statements regarding
the company's future financial condition, results of operations, business
operations and business prospects, are forward-looking statements. Words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "predict,"
"believe" and similar words, expressions and variations of these words and
expressions are intended to identify forward-looking statements. All
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. These factors include, but are not limited to, the
company's ability to manage its growth; risks associated with expansion; the
company's reliance on information systems and technology; competition;
fluctuations in operating results; the impact of global economic fluctuations on
temporary contracting operations; the cyclical nature of the company's executive
search and mid-market professional staffing businesses; risks relating to
foreign operations, including foreign currency fluctuations; dependence on
highly skilled professionals; the impact of employees departing with existing
executive search clients; risks maintaining professional reputation and brand
name; restrictions imposed by blocking arrangements; exposure to
employment-related claims, legal liability and costs and limitations on
insurance coverage related thereto; dependence on key management personnel;
government regulations; the company's ability to successfully operate as an
independent company and the level of costs associated therewith; and the
company's ability to obtain financing on a stand-alone basis and restrictions on
the company's operating flexibility due to the terms of its credit facility.
Additional information concerning these and other factors is contained in the
company's filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date of this press release. The
company assumes no obligation, and expressly disclaims any obligation, to update
any forward-looking statements.
HUDSON HIGHLAND GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenue $269,283 $277,787 $528,472 $541,867
Direct costs 165,565 163,838 327,222 318,594
-------- -------- -------- --------
Gross margin 103,718 113,949 201,250 223,273
Selling, general and administrative expenses 120,920 115,143 245,338 234,031
Business reorganization expenses (recoveries) (500) 52,726 7,461 52,726
Merger and integration expenses 3 1,218 978 6,958
-------- -------- -------- --------
Operating loss (16,705) (55,138) (52,527) (70,442)
Other income (expense):
Other, net 1,566 19 (181) (423)
Interest income (expense), net 38 (14) (255) 14
-------- -------- -------- --------
Loss before provision for (benefit of) income taxes and
accounting change (15,101) (55,133) (52,963) (70,851)
Provision for (benefit of) income taxes (11) (1,180) 6,138 (1,893)
-------- -------- -------- --------
Loss before accounting change (15,090) (53,953) (59,101) (68,958)
Cumulative effect of accounting change - - - (293,000)
-------- -------- -------- --------
Net loss $(15,090) $(53,953) $(59,101) $(361,958)
======== ======== ======== ========
Basic and diluted loss per share:
Loss before accounting change $(1.79) $(6.46) $(7.03) $(8.26)
Net loss $(1.79) $(6.46) $(7.03) $(43.36)
Weighted average shares outstanding 8,429 8,355 8,406 8,347
HUDSON HIGHLAND GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, December 31,
2003 2002
---- ----
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $39,621 $ 25,908
Accounts receivable, net 161,888 161,831
Due from Monster Worldwide, Inc. 11,421 -
Other current assets 25,483 28,177
-------- --------
Total current assets 238,413 215,916
Property and equipment, net 41,984 34,106
Intangibles, net 204,151 201,937
Other assets 16,003 15,145
-------- --------
$500,551 $467,104
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,961 $ 28,305
Accrued expenses and other current liabilities 106,979 84,669
Accrued merger and integration expenses 6,667 8,935
Accrued business reorganization expenses 15,720 25,845
-------- --------
Total current liabilities 168,327 147,754
Other liabilities 2,337 2,776
-------- --------
Total liabilities 170,664 150,530
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $0.001 par value, 10,000 shares authorized; none
issued or outstanding - -
Common stock, $0.001 par value, 100,000 shares authorized; issued and
outstanding: 8,442 and 0 shares, respectively 8 -
Additional paid-in capital 311,704 -
Retained deficit (15,090) -
Accumulated other comprehensive income:
Foreign currency translation adjustments 33,265 24,660
Total divisional equity - 291,914
-------- --------
Total stockholders' equity 329,887 316,574
-------- --------
$500,551 $467,104
======== ========
HUDSON HIGHLAND GROUP, INC.
SEGMENT ANALYSIS
(in thousands)
(unaudited)
For the Three Months Ended
June 30, 2003 Americas Europe Asia Pac Corporate Total
Revenue
Hudson $70,908 $90,427 $91,275 $252,610
Highland 11,216 4,143 1,314 16,673
$82,124 $94,570 $92,589 $269,283
Gross Margin
Hudson $16,373 $40,473 $31,466 $88,312
Highland 10,659 3,619 1,128 15,406
$27,032 $44,092 $32,594 $103,718
Adjusted EBITDA (a)
Hudson $(2,000) $(872) $1,850 $(1,022)
Highland (803) (1,973) (290) (3,066)
Corporate $(8,298) (8,298)
$(2,803) $(2,845) $1,560 $(8,298) $(12,386)
For the Three Months Ended
June 30, 2002
Revenue
Hudson $81,710 $86,726 $90,973 $259,409
Highland 12,358 5,243 777 18,378
$94,068 $91,969 $91,750 $277,787
Gross Margin
Hudson $20,970 $42,314 $33,093 $96,377
Highland 12,358 4,437 777 17,572
$33,328 $46,751 $33,870 $113,949
Adjusted EBITDA (a)
Hudson $377 $1,543 $4,449 $6,369
Highland 2,503 356 172 3,031
Corporate - - - $(4,601) (4,601)
$2,880 $1,899 $4,621 $(4,601) $4,799
(a) Non-GAAP earnings before interest, income taxes, special charges and
depreciation and amortization ("Adjusted EBITDA"), is presented to provide
additional information about the Company's operations on a basis consistent
with the measures which the Company uses to manage its operations and
evaluate its performance. Management also uses this measurement to evaluate
capital needs and working capital requirements. Adjusted EBITDA should not
be considered in isolation or as a substitute for operating income, cash
flows from operating activities and other income or cash flow statement data
prepared in accordance with generally accepted accounting principles or as a
measure of the Company's profitability or liquidity. Furthermore, adjusted
EBITDA as presented above may not be comparable with similarly titled
measures reported by other companies.
HUDSON HIGHLAND GROUP, INC.
SEGMENT ANALYSIS
(in thousands)
(unaudited)
For the Six Months Ended
June 30, 2003 Americas Europe Asia Pac Corporate Total
Revenue
Hudson $148,116 $175,359 $173,100 $496,575
Highland 21,648 8,142 2,107 31,897
$169,764 $183,501 $175,207 $528,472
Gross Margin
Hudson $33,930 $78,110 $58,922 $170,962
Highland 21,091 7,318 1,879 30,288
$55,021 $85,428 $60,801 $201,250
Adjusted EBITDA (a)
Hudson $(4,190) $(8,951) $783 $(12,358)
Highland (3,157) (4,375) (635) (8,167)
Corporate $(13,262) (13,262)
$(7,347)$(13,326) $148 $(13,262) $(33,787)
For the Six Months Ended
June 30, 2002
Revenue
Hudson $162,889 $171,547 $171,295 $505,731
Highland 23,871 10,543 1,722 36,136
$186,760 $182,090 $173,017 $541,867
Gross Margin
Hudson $42,059 $83,533 $62,351 $187,943
Highland 23,871 9,737 1,722 35,330
$65,930 $93,270 $64,073 $223,273
Adjusted EBITDA (a)
Hudson $1,002 $(92) $8,526 $9,436
Highland 1,016 394 304 1,714
Corporate $(11,851) (11,851)
$2,018 $302 $8,830 $(11,851) $(701)
(a) Non-GAAP earnings before interest, income taxes, special charges and
depreciation and amortization (_Adjusted EBITDA_), is presented to provide
additional information about the Company's operations on a basis consistent
with the measures which the Company uses to manage its operations and
evaluate its performance. Management also uses this measurement to evaluate
capital needs and working capital requirements. Adjusted EBITDA should not
be considered in isolation or as a substitute for operating income, cash
flows from operating activities and other income or cash flow statement data
prepared in accordance with generally accepted accounting principles or as a
measure of the Company's profitability or liquidity. Furthermore, adjusted
EBITDA as presented above may not be comparable with similarly titled
measures reported by other companies.
HUDSON HIGHLAND GROUP, INC.
RECONCILIATION OF ADJUSTED EBITDA TO OPERATING LOSS
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Hudson
Adjusted EBITDA (a) $(1,022) $6,369 $(12,358) $9,436
Business reorganization (expenses)
recoveries 299 (34,722) (6,540) (34,722)
Merger and integration expenses (3) (1,236) (978) (7,479)
Depreciation and amortization (3,098) (2,790) (6,947) (6,129)
Operating loss $(3,824) $(32,379) $(26,823) $(38,894)
Highland
Adjusted EBITDA (a) $(3,066) $3,031 $(8,167) $1,714
Business reorganization (expenses)
recoveries 202 (13,756) (784) (13,756)
Merger and integration recoveries - 25 - 610
Depreciation and amortization (829) (647) (2,305) (1,372)
Operating loss $(3,693) $(11,347) $(11,256) $(12,804)
Corporate
Adjusted EBITDA (a) $(8,298) $(4,601) $(13,262) $(11,851)
Business reorganization expenses (1) (4,248) (137) (4,248)
Merger and integration expenses - (7) - (89)
Depreciation and amortization (889) (2,556) (1,049) (2,556)
Corporate expenses $(9,188) $(11,412) $(14,448) $(18,744)
Hudson Highland Group consolidated
Adjusted EBITDA (a) $(12,386) $4,799 $(33,787) $(701)
Business reorganization (expenses)
recoveries 500 (52,726) (7,461) (52,726)
Merger and integration expenses (3) (1,218) (978) (6,958)
Depreciation and amortization (4,816) (5,993) (10,301) (10,057)
Operating loss $(16,705) $(55,138) $(52,527) $(70,442)
(a) Non-GAAP earnings before interest, income taxes, special charges and
depreciation and amortization (_Adjusted EBITDA_), is presented to provide
additional information about the Company's operations on a basis consistent
with the measures which the Company uses to manage its operations and
evaluate its performance. Management also uses this measurement to evaluate
capital needs and working capital requirements. Adjusted EBITDA should not
be considered in isolation or as a substitute for operating income, cash
flows from operating activities and other income or cash flow statement data
prepared in accordance with generally accepted accounting principles or as a
measure of the Company's profitability or liquidity. Furthermore, adjusted
EBITDA as presented above may not be comparable with similarly titled
measures reported by other companies.