Hudson Global(HSON) - 2022 Q4 - Annual Report

Revenue Performance - Revenue for the year ended December 31, 2022, was $200.9 million, an increase of$31.7 million, or 19%, compared to $169.2 million in 2021[98]. - On a constant currency basis, revenue increased by$42.8 million, or 27%, driven by a 54% increase in RPO recruitment revenue and a 9% increase in contracting revenue[98]. - The Karani Acquisition contributed $8.3 million to revenue growth, accounting for 5 percentage points of the overall increase[99]. - Adjusted net revenue in the Americas for 2022 was$49.0 million, an increase of $21.9 million or 81$34.3 million, an increase of $7.6 million or 29$6.9 million or 29%[116]. - In Europe, total revenue for 2022 was $31.1 million, an increase of$11.6 million or 60% compared to 2021, with RPO recruitment revenue increasing by $5.2 million or 45$88.5 million for 2022, an increase of $25.2 million, or 40$63.2 million in 2021[101]. - SG&A and Non-Op expenses in the Americas rose to $44.4 million, an increase of$19.1 million or 76% compared to 2021, while as a percentage of revenue, it decreased from 88% to 86%[109]. - SG&A and Non-Op expenses in Europe increased to $14.5 million, a rise of$4.1 million or 40% compared to 2021, while as a percentage of revenue, it decreased from 53% to 46%[127]. - EBITDA for 2022 was $10.8 million, compared to$4.9 million in 2021, reflecting an increase of $6.4 million on a constant currency basis[101]. - Operating income in the Americas for 2022 was$4.3 million, a growth of $2.6 million or 155$4.9 million, up 171%[111]. - Operating income for the year ended December 31, 2022, was $1.7 million, a 47$1.2 million in 2021[129]. - EBITDA for the year ended December 31, 2022, was $1.5 million, representing a 68$0.9 million in 2021, and accounted for 5% of revenue[130]. Net Income and Cash Flow - Net income for the year ended December 31, 2022, was $7.1 million, an increase from$3.2 million in 2021, with a constant currency increase of $4.3 million[101]. - Net income increased to$7.1 million for the year ended December 31, 2022, compared to $3.2 million in 2021, with basic and diluted earnings per share of$2.37 and $2.27, respectively[136]. - Cash and cash equivalents totaled$27.5 million as of December 31, 2022, up from $22.1 million in 2021, with net cash provided by operating activities increasing to$9.5 million from $2.5 million[137][138]. - Net cash used in investing activities decreased to$1.3 million in 2022 from $6.3 million in 2021, primarily due to the acquisition of HnB[139]. Strategic Outlook and Risks - The company anticipates continued challenging market conditions into 2023 due to higher inflation and interest rates[91]. - The impact of COVID-19 and its variants continues to present significant risks, affecting operations and financial results[94]. - The Company is subject to various risks and uncertainties that could materially affect actual results, including global economic fluctuations and competition in the market[163]. - The Company has not provided quantitative disclosures about market risk as it qualifies as a smaller reporting company[164]. Tax and Compliance - The provision for income taxes was$2.3 million on $9.5 million of pre-tax income for 2022, with an effective tax rate of 24.6$0.4 million as of December 31, 2022[156]. - The Company assesses tax positions and records tax benefits for all years subject to examination based on management's evaluation, recognizing the largest amount of tax benefit with greater than 50% likelihood of realization[158]. - The Company has provided tax on all unremitted earnings of foreign subsidiaries, recognizing the tax on Global Intangible Low Taxed Income (GILTI) as a period expense in the year incurred[159]. Corporate Governance and Future Investments - The company is exploring strategic alternatives to maximize shareholder value, including potential acquisitions and share repurchases[88]. - The company expects to make capital expenditures of less than $1 million for the full year 2023, focusing on strategic investments for future growth[142]. - Corporate expenses decreased by 13$2.9 million in 2022 from $3.3 million in 2021, mainly due to lower professional fees and stock compensation expenses[131]. - Depreciation and amortization expense rose to$1.4 million in 2022 from $0.6 million in 2021, driven by amortization related to acquisitions[132]. - Business combinations are accounted for under the acquisition method, with goodwill recorded when the purchase price exceeds the net fair value of assets acquired[160].