x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 59-3547281 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.001 par value | The NASDAQ Stock Market LLC | |
Preferred Share Purchase Rights | The NASDAQ Stock Market LLC |
Large accelerated filer | o | Accelerated filer | x | |
Non-accelerated filer | o | Smaller reporting company | o |
Class | Outstanding on January 31, 2013 | |
Common Stock - $0.001 par value | 33,021,211 |
Table of Contents | ||
Page | ||
PART I | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 1B. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II | ||
ITEM 5. | ||
ITEM 6. | ||
ITEM 7. | ||
ITEM 7A. | ||
ITEM 8. | ||
ITEM 9. | ||
ITEM 9A. | ||
PART III | ||
ITEM 10. | ||
ITEM 11. | ||
ITEM 12. | ||
ITEM 13. | ||
ITEM 14. | ||
PART IV | ||
ITEM 15. | ||
Gross Margin | |||||||
Amount | Percentage | ||||||
Hudson Americas | $ | 43,164 | 15 | % | |||
Hudson Asia Pacific | 117,428 | 41 | % | ||||
Hudson Europe | 124,275 | 44 | % | ||||
Total | $ | 284,867 | 100 | % |
• | restrictions on our ability to make additional borrowings, or to consolidate, merge or otherwise fundamentally change our ownership; |
• | limitations on capital expenditures, investments, dispositions of assets, guarantees of indebtedness, permitted acquisitions and repurchases of stock; and |
• | limitations on certain intercompany payments of expenses, interest and dividends. |
• | claims of misconduct or negligence on the part of our employees; |
• | claims by our employees of discrimination or harassment directed at them, including claims relating to actions of our clients; |
• | claims related to the employment of illegal aliens or unlicensed personnel; |
• | claims for payment of workers' compensation and other similar claims; |
• | claims for violations of wage and hour requirements; |
• | claims for retroactive entitlement to employee benefits; |
• | claims of errors and omissions of our temporary employees; |
• | claims by taxing authorities related to our independent contractors and the risk that such contractors could be considered employees for tax purposes; |
• | claims by candidates that we place for wrongful termination or denial of employment; |
• | claims related to our non-compliance with data protection laws, which require the consent of a candidate to transfer resumes and other data; and |
• | claims by our clients relating to our employees' misuse of client proprietary information, misappropriation of funds, other misconduct, criminal activity or similar claims. |
• | create additional regulations that prohibit or restrict the types of employment services that we currently provide; |
• | impose new or additional benefit requirements; |
• | require us to obtain additional licensing to provide staffing services; |
• | impose new or additional visa restrictions on movements between countries; |
• | increase taxes, such as sales or value-added taxes, payable by the providers of staffing services; |
• | increase the number of various tax and compliance audits relating to a variety of regulations, including wage and hour laws, unemployment taxes, workers' compensation, immigration, and income, value-added and sales taxes; or |
• | revise transfer pricing laws or successfully challenge our transfer prices, which may result in higher foreign taxes or tax liabilities or double taxation of our foreign operations. |
• | dividing our Board of Directors into three classes to be elected on a staggered basis, one class each year; |
• | authorizing our Board of Directors to issue shares of our preferred stock in one or more series without further authorization of our stockholders; |
• | requiring that stockholders provide advance notice of any stockholder nomination of directors or any of new business to be considered at any meeting of stockholders; |
• | permitting removal of directors only for cause by a super-majority vote; |
• | providing that vacancies on our Board of Directors will be filled by the remaining directors then in office; |
• | requiring that a super-majority vote be obtained to amend or repeal specified provisions of our certificate of incorporation or by-laws; and |
• | eliminating the right of stockholders to call a special meeting of stockholders or take action by written consent without a meeting of stockholders. |
Name | Age | Title | ||
Manuel Marquez Dorsch | 54 | Chairman and Chief Executive Officer | ||
Mary Jane Raymond | 52 | Executive Vice President and Chief Financial Officer | ||
Latham Williams | 60 | Senior Vice President, Legal Affairs and Administration, Corporate Secretary | ||
Frank P. Lanuto | 50 | Senior Vice President, Controller and Chief Accounting Officer | ||
Neil J. Funk | 61 | Vice President, Internal Audit |
ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Market Price | ||||||||
High | Low | |||||||
2012 | ||||||||
Fourth quarter | $ | 4.71 | $ | 3.82 | ||||
Third quarter | $ | 4.73 | $ | 3.78 | ||||
Second quarter | $ | 5.98 | $ | 3.23 | ||||
First quarter | $ | 5.91 | $ | 4.29 | ||||
2011 | ||||||||
Fourth quarter | $ | 5.48 | $ | 3.05 | ||||
Third quarter | $ | 6.16 | $ | 3.17 | ||||
Second quarter | $ | 6.66 | $ | 4.39 | ||||
First quarter | $ | 7.11 | $ | 4.87 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) | |||||||||
October 1, 2012 - October 31, 2012 (b) | — | — | — | 6,792,000 | |||||||||
November 1, 2012 - November 30, 2012 (b) | 10,794 | $ | 4.35 | — | 6,792,000 | ||||||||
December 1, 2012 - December 31, 2012 (b) | 2,600 | $ | 4.44 | — | 6,792,000 | ||||||||
Total | 13,394 | $ | 4.37 | — | 6,792,000 |
(a) | On February 4, 2008, the Company announced that its Board of Directors authorized the repurchase of a maximum of $15 million of the Company's common stock. The Company has repurchased 1,491,772 shares for a total cost of approximately $8.2 million under this authorization. Repurchases of common stock are restricted under the Company's revolver agreement entered on August 5, 2010, as amended. |
(b) | Consisted of shares of restricted stock withheld from employees upon the vesting of such shares to satisfy employees' income tax withholding requirements. |
December 31, | ||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |||||||||||||||||||
HSON | $ | 100.00 | $ | 39.83 | $ | 56.48 | $ | 69.32 | $ | 56.96 | $ | 53.27 | ||||||||||||
RUSSELL 2000 INDEX | $ | 100.00 | $ | 65.20 | $ | 81.64 | $ | 102.30 | $ | 96.72 | $ | 110.87 | ||||||||||||
PEER GROUP | $ | 100.00 | $ | 74.54 | $ | 92.86 | $ | 114.51 | $ | 80.94 | $ | 94.08 |
Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||
SUMMARY OF OPERATIONS: | ||||||||||||||||||||
Revenue | $ | 777,577 | $ | 933,736 | $ | 794,542 | $ | 691,149 | $ | 1,079,085 | ||||||||||
Gross margin | $ | 284,867 | $ | 354,305 | $ | 298,573 | $ | 260,453 | $ | 454,986 | ||||||||||
Business reorganization and integration expense | $ | 7,782 | $ | 720 | $ | 1,694 | $ | 18,180 | $ | 11,217 | ||||||||||
Goodwill and other impairment charges (a) | $ | — | $ | — | $ | — | $ | 1,549 | $ | 67,087 | ||||||||||
Depreciation and amortization | $ | 6,438 | $ | 6,251 | $ | 8,184 | $ | 12,543 | $ | 14,662 | ||||||||||
Operating income (loss) | $ | (6,638 | ) | $ | 17,435 | $ | (5,618 | ) | $ | (49,453 | ) | $ | (70,783 | ) | ||||||
Income (loss) from continuing operations | $ | (5,335 | ) | $ | 10,909 | $ | (4,441 | ) | $ | (42,953 | ) | $ | (73,096 | ) | ||||||
Income (loss) from discontinued operations, net of income taxes | $ | — | $ | — | $ | (244 | ) | $ | 2,344 | $ | (1,222 | ) | ||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | $ | (40,609 | ) | $ | (74,318 | ) | ||||||
Basic income (loss) per share from continuing operations | $ | (0.17 | ) | $ | 0.35 | $ | (0.15 | ) | $ | (1.65 | ) | $ | (2.90 | ) | ||||||
Basic net income (loss) per share | $ | (0.17 | ) | $ | 0.35 | $ | (0.16 | ) | $ | (1.56 | ) | $ | (2.95 | ) | ||||||
Diluted income (loss) per share from continuing operations | $ | (0.17 | ) | $ | 0.34 | $ | (0.15 | ) | $ | (1.65 | ) | $ | (2.90 | ) | ||||||
Diluted net income (loss) per share | $ | (0.17 | ) | $ | 0.34 | $ | (0.16 | ) | $ | (1.56 | ) | $ | (2.95 | ) | ||||||
OTHER FINANCIAL DATA: | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 13,159 | $ | 13,396 | $ | (15,658 | ) | $ | (26,988 | ) | $ | 11,860 | ||||||||
Net cash provided by (used in) investing activities | $ | (8,272 | ) | $ | (6,584 | ) | $ | 1,140 | $ | 6,804 | $ | 4,196 | ||||||||
Net cash provided by (used in) financing activities | $ | (4,274 | ) | $ | 1,639 | $ | 7,578 | $ | 4,371 | $ | (646 | ) | ||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Current assets | $ | 157,412 | $ | 181,923 | $ | 172,087 | $ | 148,366 | $ | 194,149 | ||||||||||
Total assets | $ | 193,468 | $ | 216,546 | $ | 205,834 | $ | 181,944 | $ | 230,953 | ||||||||||
Current liabilities | $ | 67,168 | $ | 90,515 | $ | 93,760 | $ | 86,154 | $ | 104,581 | ||||||||||
Total stockholders’ equity | $ | 106,541 | $ | 107,357 | $ | 93,278 | $ | 76,260 | $ | 107,992 | ||||||||||
OTHER DATA: | ||||||||||||||||||||
EBITDA (loss) (b) | $ | 54 | $ | 23,642 | $ | 6,503 | $ | (35,466 | ) | $ | (52,852 | ) |
(a) | The results for the year ended December 31, 2009 principally consisted of an impairment charge of $1,669 related to goodwill associated with the Tong Zhi (Beijing) Consulting Service Ltd. and Guangzhou Dong Li Consulting Service Ltd. (collectively, “TKA”) acquisition. The results for the year ended December 31, 2008 included impairment charges related to goodwill of $64,495, a write down of long-term assets of $2,224 and impairment charges related to intangible assets of $368. |
(b) | SEC Regulation S-K 229.10(e)1(ii)(A) defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is presented to provide additional information to investors about the Company's operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses this measurement to evaluate working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income and net income prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability. See Note 15 to the Consolidated Financial Statements for further EBITDA segment and reconciliation information. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Executive Overview |
• | Results of Operations |
• | Liquidity and Capital Resources |
• | Contingencies |
• | Critical Accounting Policies |
• | Recent Accounting Pronouncements |
• | Forward-Looking Statements |
• | Leveraging the value of our global business as exemplified by the launch of the global practices in Legal eDiscovery and RPO. |
• | Attracting, developing and retaining the right people to increase productivity and profitability. |
• | Focusing on selected clients and services to provide higher value recruitment solutions to their businesses. |
• | Creating a compelling digital presence to help attract both highly-skilled candidates and new clients to grow our business. |
• | Redirecting resources to high-potential strategic businesses, such as RPO and Legal eDiscovery, and growth markets of the world. |
• | Optimizing its operations in under-performing sectors and markets to deliver improved performance, re-engineering of its delivery model, and consolidating operations globally. |
• | Streamlining its back office support areas and business processes, and establishing a shared services operation and global centers of excellence to gain efficiencies of operation. |
• | Revenue was $777.6 million for the year ended December 31, 2012, compared to $933.7 million for 2011, a decrease of $156.2 million, or 16.7%. On a constant currency basis, the Company's revenue decreased $145.9 million, or 15.8%. Of this decrease, $107.6 million was in contracting revenue (down 15.6% compared to 2011) and $40.8 million was in permanent recruitment revenue (down 21.9% compared to 2011). |
• | Gross margin was $284.9 million for the year ended December 31, 2012, compared to $354.3 million for 2011, a decrease of $69.4 million, or 19.6%. On a constant currency basis, gross margin decreased $63.6 million, or 18.2%. Of this decrease, $40.0 million was in permanent recruitment gross margin (down 21.9% compared to 2011) and $25.2 million was in contracting gross margin (down 19.9% compared to 2011). |
• | Selling, general and administrative expenses and other non-operating income (expense) (“SG&A and Non-Op”) were $277.0 million for the year ended December 31, 2012, compared to $329.9 million for 2011, a decrease of $52.9 million, or 16.0%. On a constant currency basis, SG&A and Non-Op decreased $47.0 million, or 14.5%. SG&A and Non-Op, as a percentage of revenue, was 35.6% for the year ended December 31, 2012, compared to 35.1% for 2011. |
• | Business reorganization expenses were $7.8 million for the year ended December 31, 2012, compared to $0.7 million in for 2011, an increase of $7.1 million on both a reported and constant currency basis. |
• | EBITDA was $0.1 million for the year ended December 31, 2012, compared to EBITDA of $23.6 million for 2011. On a constant currency basis, EBITDA decreased $23.7 million in 2012 compared to 2011. |
• | Net loss was $5.3 million for the year ended December 31, 2012, compared to net income of $10.9 million for 2011. On a constant currency basis, net income decreased $16.4 million in 2012 compared to 2011. |
Year Ended December 31, | ||||||||||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||||||||||
As | As | Currency | Constant | As | Currency | Constant | ||||||||||||||||||||||
$ in thousands | reported | reported | translation | currency | reported | translation | currency | |||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||
Hudson Americas | $ | 169,216 | $ | 192,217 | $ | (20 | ) | $ | 192,197 | $ | 162,432 | $ | 36 | $ | 162,468 | |||||||||||||
Hudson Asia Pacific | 288,144 | 359,108 | 1,745 | 360,853 | 303,619 | 35,621 | 339,240 | |||||||||||||||||||||
Hudson Europe | 320,217 | 382,411 | (11,983 | ) | 370,428 | 328,491 | 3,138 | 331,629 | ||||||||||||||||||||
Total | $ | 777,577 | $ | 933,736 | $ | (10,258 | ) | $ | 923,478 | $ | 794,542 | $ | 38,795 | $ | 833,337 | |||||||||||||
Gross margin: | ||||||||||||||||||||||||||||
Hudson Americas | $ | 43,164 | $ | 50,778 | $ | (20 | ) | $ | 50,758 | $ | 39,417 | $ | 36 | $ | 39,453 | |||||||||||||
Hudson Asia Pacific | 117,428 | 146,917 | 845 | 147,762 | 121,965 | 13,134 | 135,099 | |||||||||||||||||||||
Hudson Europe | 124,275 | 156,610 | (6,697 | ) | 149,913 | 137,191 | (31 | ) | 137,160 | |||||||||||||||||||
Total | $ | 284,867 | $ | 354,305 | $ | (5,872 | ) | $ | 348,433 | $ | 298,573 | $ | 13,139 | $ | 311,712 | |||||||||||||
SG&A and Non-Op (a): | ||||||||||||||||||||||||||||
Hudson Americas | $ | 40,876 | $ | 47,306 | $ | (52 | ) | $ | 47,254 | $ | 37,308 | $ | 45 | $ | 37,353 | |||||||||||||
Hudson Asia Pacific | 110,798 | 132,653 | 741 | 133,394 | 113,134 | 12,109 | 125,243 | |||||||||||||||||||||
Hudson Europe | 122,101 | 147,919 | (6,633 | ) | 141,286 | 134,817 | (318 | ) | 134,499 | |||||||||||||||||||
Corporate | 3,256 | 2,065 | 1 | 2,066 | 4,554 | 1 | 4,555 | |||||||||||||||||||||
Total | $ | 277,031 | $ | 329,943 | $ | (5,943 | ) | $ | 324,000 | $ | 289,813 | $ | 11,837 | $ | 301,650 | |||||||||||||
Business reorganization expenses: | ||||||||||||||||||||||||||||
Hudson Americas | $ | 1,007 | $ | — | $ | — | $ | — | $ | 307 | $ | 3 | $ | 310 | ||||||||||||||
Hudson Asia Pacific | 1,285 | — | (1 | ) | (1 | ) | (15 | ) | (12 | ) | (27 | ) | ||||||||||||||||
Hudson Europe | 5,131 | 720 | (24 | ) | 696 | 1,402 | 46 | 1,448 | ||||||||||||||||||||
Corporate | 359 | — | — | — | — | — | — | |||||||||||||||||||||
Total | $ | 7,782 | $ | 720 | $ | (25 | ) | $ | 695 | $ | 1,694 | $ | 37 | $ | 1,731 | |||||||||||||
Operating income (loss): | ||||||||||||||||||||||||||||
Hudson Americas | $ | 3,318 | $ | 5,351 | $ | 21 | $ | 5,372 | $ | (2,499 | ) | $ | 5 | $ | (2,494 | ) | ||||||||||||
Hudson Asia Pacific | 7,988 | 18,384 | 191 | 18,575 | 10,822 | 1,042 | 11,864 | |||||||||||||||||||||
Hudson Europe | 1,326 | 14,156 | (525 | ) | 13,631 | 5,050 | 82 | 5,132 | ||||||||||||||||||||
Corporate | (19,270 | ) | (20,456 | ) | 1 | (20,455 | ) | (18,991 | ) | (9 | ) | (19,000 | ) | |||||||||||||||
Total | $ | (6,638 | ) | $ | 17,435 | $ | (312 | ) | $ | 17,123 | $ | (5,618 | ) | $ | 1,120 | $ | (4,498 | ) | ||||||||||
Net income (loss), consolidated | $ | (5,335 | ) | $ | 10,909 | $ | 179 | $ | 11,088 | $ | (4,685 | ) | $ | (81 | ) | $ | (4,766 | ) | ||||||||||
EBITDA (loss) (b): | ||||||||||||||||||||||||||||
Hudson Americas | $ | 1,268 | $ | 3,482 | $ | 29 | $ | 3,511 | $ | 1,687 | $ | (12 | ) | $ | 1,675 | |||||||||||||
Hudson Asia Pacific | 5,355 | 14,180 | 106 | 14,286 | 8,847 | 1,033 | 9,880 | |||||||||||||||||||||
Hudson Europe | (2,955 | ) | 8,071 | (42 | ) | 8,029 | 1,086 | 243 | 1,329 | |||||||||||||||||||
Corporate | (3,614 | ) | (2,091 | ) | 1 | (2,090 | ) | (5,117 | ) | — | (5,117 | ) | ||||||||||||||||
Total | $ | 54 | $ | 23,642 | $ | 94 | $ | 23,736 | $ | 6,503 | $ | 1,264 | $ | 7,767 |
(a) | SG&A and Non-Op is a measure that management uses to evaluate the segments’ expenses, which include the following captions on the Consolidated Statements of Operations and Other Comprehensive Income (Loss): Selling, general and administrative expenses, and other income (expense), net. Corporate management service allocations are included in the segments’ other income (expense). |
(b) | See EBITDA reconciliation in the following section. |
Year Ended December 31, | ||||||||||||
$ in thousands | 2012 | 2011 | 2010 | |||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | ||||
Adjustment for income (loss) from discontinued operations, net of income taxes | — | — | (244 | ) | ||||||||
Income (loss) from continuing operations | $ | (5,335 | ) | $ | 10,909 | $ | (4,441 | ) | ||||
Adjustments to income (loss) from continuing operations | ||||||||||||
Provision for (benefit from) income taxes | (1,684 | ) | 5,339 | 1,482 | ||||||||
Interest expense, net | 635 | 1,143 | 1,278 | |||||||||
Depreciation and amortization expense | 6,438 | 6,251 | 8,184 | |||||||||
Total adjustments from income (loss) from continuing operations to EBITDA (loss) | 5,389 | 12,733 | 10,944 | |||||||||
EBITDA | $ | 54 | $ | 23,642 | $ | 6,503 |
Year Ended December 31, | ||||||||||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||||||||||
$ in thousands | As reported | As reported | Currency translation | Constant currency | As reported | Currency translation | Constant currency | |||||||||||||||||||||
TEMPORARY CONTRACTING DATA (a): | ||||||||||||||||||||||||||||
Temporary contracting revenue: | ||||||||||||||||||||||||||||
Hudson Americas | $ | 157,554 | $ | 181,272 | $ | — | $ | 181,272 | $ | 156,961 | $ | — | $ | 156,961 | ||||||||||||||
Hudson Asia Pacific | 195,438 | 244,562 | 1,057 | 245,619 | 208,267 | 25,819 | 234,086 | |||||||||||||||||||||
Hudson Europe | 226,922 | 266,831 | (6,237 | ) | 260,594 | 220,093 | 3,533 | 223,626 | ||||||||||||||||||||
Total | $ | 579,914 | $ | 692,665 | $ | (5,180 | ) | $ | 687,485 | $ | 585,321 | $ | 29,352 | $ | 614,673 | |||||||||||||
Temporary contracting gross margin: | ||||||||||||||||||||||||||||
Hudson Americas | $ | 31,906 | $ | 40,202 | $ | 9 | $ | 40,211 | $ | 33,870 | $ | 1 | $ | 33,871 | ||||||||||||||
Hudson Asia Pacific | 30,317 | 37,642 | 169 | 37,811 | 32,168 | 3,974 | 36,142 | |||||||||||||||||||||
Hudson Europe | 39,565 | 50,359 | (1,369 | ) | 48,990 | 37,108 | 384 | 37,492 | ||||||||||||||||||||
Total | $ | 101,788 | $ | 128,203 | $ | (1,191 | ) | $ | 127,012 | $ | 103,146 | $ | 4,359 | $ | 107,505 | |||||||||||||
Temporary contracting gross margin as a percent of temporary contracting revenue: | ||||||||||||||||||||||||||||
Hudson Americas | 20.25 | % | 22.18 | % | N/A | 22.18 | % | 21.58 | % | N/A | 21.58 | % | ||||||||||||||||
Hudson Asia Pacific | 15.51 | % | 15.39 | % | N/A | 15.39 | % | 15.45 | % | N/A | 15.44 | % | ||||||||||||||||
Hudson Europe | 17.44 | % | 18.87 | % | N/A | 18.80 | % | 16.86 | % | N/A | 16.77 | % | ||||||||||||||||
Total | 17.55 | % | 18.51 | % | N/A | 18.47 | % | 17.62 | % | N/A | 17.49 | % |
(a) | Temporary contracting gross margin and gross margin as a percentage of revenue are shown to provide additional information regarding the Company’s ability to manage its cost structure and to provide further comparability relative to the Company’s peers. Temporary contracting gross margin is derived by deducting the direct costs of temporary contracting from temporary contracting revenue. The Company’s calculation of gross margin may differ from those of other companies. |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | As reported | As reported | |||||||||||||||||||||||
Hudson Americas | ||||||||||||||||||||||||||
Revenue | $ | 169.2 | $ | 192.2 | $ | (23.0 | ) | (12.0 | )% | $ | 162.4 | $ | 29.8 | 18.3 | % |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | As reported | As reported | |||||||||||||||||||||||
Hudson Americas | ||||||||||||||||||||||||||
Gross margin | $ | 43.2 | $ | 50.8 | $ | (7.6 | ) | (15.0 | )% | $ | 39.4 | $ | 11.4 | 28.8 | % | |||||||||||
Gross margin as a percentage of revenue | 25.5 | % | 26.4 | % | N/A | N/A | 24.3 | % | N/A | N/A | ||||||||||||||||
Contracting gross margin as a percentage of contracting revenue | 20.3 | % | 22.2 | % | N/A | N/A | 21.6 | % | N/A | N/A |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | As reported | As reported | |||||||||||||||||||||||
Hudson Americas | ||||||||||||||||||||||||||
SG&A and Non-Op | $ | 40.9 | $ | 47.3 | $ | (6.4 | ) | (13.6 | )% | $ | 37.3 | $ | 10.0 | 26.8 | % | |||||||||||
SG&A and Non-Op as a percentage of revenue | 24.2 | % | 24.6 | % | N/A | N/A | 23.0 | % | N/A | N/A |
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | |||||||||||||||||||
$ in millions | As reported | As reported | As reported | ||||||||||||||||||||||
Hudson Americas | |||||||||||||||||||||||||
Operating income (loss): | $ | 3.3 | $ | 5.4 | $ | (2.0 | ) | (38.0 | )% | $ | (2.5 | ) | $ | 7.9 | (a) | ||||||||||
EBITDA | $ | 1.3 | $ | 3.5 | $ | (2.2 | ) | (63.6 | )% | $ | 1.7 | $ | 1.8 | (a) | |||||||||||
EBITDA as a percentage of revenue | 0.7 | % | 1.8 | % | N/A | N/A | 1.0 | % | N/A | N/A | |||||||||||||||
(a) Information was not provided because the Company did not consider the change in percentage as a meaningful measure for the years in comparison. |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | |||||||||||||||||||||||
Hudson Asia Pacific | ||||||||||||||||||||||||||
Revenue | $ | 288.1 | $ | 360.9 | $ | (72.7 | ) | (20.1 | )% | $ | 339.2 | $ | 21.6 | 6.4 | % |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
As reported | Constant currency | Constant currency | ||||||||||||||||||||||||
Hudson Asia Pacific | ||||||||||||||||||||||||||
Gross margin | $ | 117.4 | $ | 147.8 | $ | (30.3 | ) | (20.5 | )% | $ | 135.1 | $ | 12.7 | 9.4 | % | |||||||||||
Gross margin as a percentage of revenue | 40.8 | % | 40.9 | % | N/A | N/A | 39.8 | % | N/A | N/A | ||||||||||||||||
Contracting gross margin as a percentage of contracting revenue | 15.5 | % | 15.4 | % | N/A | N/A | 15.4 | % | N/A | N/A |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | |||||||||||||||||||||||
Hudson Asia Pacific | ||||||||||||||||||||||||||
SG&A and Non-Op | $ | 110.8 | $ | 133.4 | $ | (22.6 | ) | (16.9 | )% | $ | 125.2 | $ | 8.2 | 6.5 | % | |||||||||||
SG&A and Non-Op as a percentage of revenue | 38.5 | % | 37.0 | % | N/A | N/A | 36.9 | % | N/A | N/A |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | |||||||||||||||||||||||
Hudson Asia Pacific | ||||||||||||||||||||||||||
Operating income: | $ | 8.0 | $ | 18.6 | $ | (10.6 | ) | (57.0 | )% | $ | 11.9 | $ | 6.7 | 56.6 | % | |||||||||||
EBITDA | $ | 5.4 | $ | 14.3 | $ | (8.9 | ) | (62.5 | )% | $ | 9.9 | $ | 4.4 | 44.6 | % | |||||||||||
EBITDA as a percentage of revenue | 1.9 | % | 4.0 | % | N/A | N/A | 2.9 | % | N/A | N/A |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | |||||||||||||||||||||||
Hudson Europe | ||||||||||||||||||||||||||
Revenue | $ | 320.2 | $ | 370.4 | $ | (50.2 | ) | (13.6 | )% | $ | 331.6 | $ | 38.8 | 11.7 | % |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | |||||||||||||||||||||||
Hudson Europe | ||||||||||||||||||||||||||
Gross margin | $ | 124.3 | $ | 149.9 | $ | (25.6 | ) | (17.1 | )% | $ | 137.2 | $ | 12.8 | 9.3 | % | |||||||||||
Gross margin as a percentage of revenue | 38.8 | % | 40.5 | % | N/A | N/A | 41.4 | % | N/A | N/A | ||||||||||||||||
Contracting gross margin as a percentage of contracting revenue | 17.4 | % | 18.8 | % | N/A | N/A | 16.8 | % | N/A | N/A |
Year Ended December 31, | ||||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | ||||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | |||||||||||||||||||||||
Hudson Europe | ||||||||||||||||||||||||||
SG&A and Non-Op | $ | 122.1 | $ | 141.3 | $ | (19.2 | ) | (13.6 | )% | $ | 134.5 | $ | 6.8 | 5.0 | % | |||||||||||
SG&A and Non-Op as a percentage of revenue | 38.1 | % | 38.1 | % | N/A | N/A | 40.6 | % | N/A | N/A |
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2011 | Change in amount | Change in % | 2010 | Change in amount | Change in % | |||||||||||||||||||
$ in millions | As reported | Constant currency | Constant currency | ||||||||||||||||||||||
Hudson Europe | |||||||||||||||||||||||||
Operating income: | $ | 1.3 | $ | 13.6 | $ | (12.3 | ) | (90.3 | )% | $ | 5.1 | $ | 8.5 | (a) | |||||||||||
EBITDA (loss) | $ | (3.0 | ) | $ | 8.0 | $ | (11.0 | ) | (a) | $ | 1.3 | $ | 6.7 | (a) | |||||||||||
EBITDA (loss) as a percentage of revenue | (0.9 | )% | 2.2 | % | N/A | N/A | 0.4 | % | N/A | N/A | |||||||||||||||
(a) Information was not provided because the Company did not consider the change in percentage as a meaningful measure for the years in comparison. |
For the Year Ended December 31, | ||||||||||||
(In millions) | 2012 | 2011 | 2010 | |||||||||
Net cash provided by (used in) operating activities | $ | 13.2 | $ | 13.4 | $ | (15.7 | ) | |||||
Net cash provided by (used in) investing activities | (8.3 | ) | (6.6 | ) | 1.1 | |||||||
Net cash provided by (used in) financing activities | (4.3 | ) | 1.6 | 7.6 | ||||||||
Effect of exchange rates on cash and cash equivalents | 0.7 | (0.7 | ) | 0.4 | ||||||||
Net increase (decrease) in cash and cash equivalents | 1.4 | 7.8 | (6.5 | ) |
Level | Fixed Charge Coverage Ratio | Base Rate Revolving Loans | LIBOR Revolving Loans or Letter of Credit Obligations | |||
I | Greater than or equal to 1.25:1.0 | 1.25 | % | 2.25 | % | |
II | Less than 1.25:1.0 but greater than or equal to 1.10:1.0 | 1.50 | % | 2.50 | % | |
III | Less than 1.10:1.0 | 1.75 | % | 2.75 | % |
(In millions) | December 31, 2012 | ||
Borrowing base | $ | 29.0 | |
Less: adjustments to the borrowing base | |||
Minimum excess availability | (10.0 | ) | |
Outstanding letters of credits | (2.1 | ) | |
Adjusted borrowing base | 16.9 | ||
Less: outstanding borrowing | — | ||
Additional borrowing availability | $ | 16.9 | |
Interest rates on outstanding borrowing | 4.50 | % |
(In millions) | December 31, 2012 | ||
Tranche A: | |||
Borrowing capacity | $ | 16.4 | |
Less: outstanding borrowing | — | ||
Additional borrowing availability | $ | 16.4 | |
Interest rates on outstanding borrowing | 5.08 | % | |
Tranche B: | |||
Borrowing capacity | $ | 2.9 | |
Less: outstanding borrowing | — | ||
Additional borrowing availability | $ | 2.9 | |
Interest rates on outstanding borrowing | 6.03 | % | |
Tranche C: | |||
Borrowing capacity | $ | 5.2 | |
Less: outstanding borrowing | (2.9 | ) | |
Additional borrowing availability | $ | 2.3 | |
Interest rates on outstanding borrowing | 1.10 | % |
Less than | More than | |||||||||||||||||||
Contractual Obligation (a) | 1 year | 1 to 3 years | 3 to 5 years | 5 years | Total | |||||||||||||||
Operating lease obligations | $ | 24,024 | $ | 34,408 | $ | 24,454 | $ | 21,840 | $ | 104,726 | ||||||||||
Other long term liabilities: | ||||||||||||||||||||
Reorganization expenses | 1,916 | 1,504 | — | — | 3,420 | |||||||||||||||
Total | $ | 25,940 | $ | 35,912 | $ | 24,454 | $ | 21,840 | $ | 108,146 |
a. | The Company's other non-current liabilities of $18.3 million in the Consolidated Balance Sheet as of December 31, 2012 are primarily comprised of income taxes, unrecognized tax benefits, deferred rent, and other various accruals. As the timing and/or amounts of any cash payment is uncertain, the related amounts have not been reflected in the table above. |
Year Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Revenue | $ | 777,577 | $ | 933,736 | $ | 794,542 | ||||||
Direct costs | 492,710 | 579,431 | 495,969 | |||||||||
Gross margin | 284,867 | 354,305 | 298,573 | |||||||||
Operating expenses: | ||||||||||||
Salaries and related | 205,412 | 252,785 | 222,185 | |||||||||
Office and general | 65,747 | 69,298 | 65,185 | |||||||||
Marketing and promotion | 6,126 | 7,816 | 6,943 | |||||||||
Depreciation and amortization | 6,438 | 6,251 | 8,184 | |||||||||
Business reorganization expenses | 7,782 | 720 | 1,694 | |||||||||
Total operating expenses | 291,505 | 336,870 | 304,191 | |||||||||
Operating income (loss) | (6,638 | ) | 17,435 | (5,618 | ) | |||||||
Non-operating income (expense): | ||||||||||||
Interest income (expense), net | (635 | ) | (1,143 | ) | (1,278 | ) | ||||||
Other income (expense), net | 254 | (44 | ) | 4,500 | ||||||||
Fee for early extinguishment of credit facility | — | — | (563 | ) | ||||||||
Income (loss) from continuing operations before provision for income taxes | (7,019 | ) | 16,248 | (2,959 | ) | |||||||
Provision for (benefit from) income taxes | (1,684 | ) | 5,339 | 1,482 | ||||||||
Income (loss) from continuing operations | (5,335 | ) | 10,909 | (4,441 | ) | |||||||
Income (loss) from discontinued operations, net of income taxes | — | — | (244 | ) | ||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | ||||
Earnings (loss) per share: | ||||||||||||
Basic | ||||||||||||
Income (loss) from continuing operations | $ | (0.17 | ) | $ | 0.35 | $ | (0.15 | ) | ||||
Income (loss) from discontinued operations | — | — | (0.01 | ) | ||||||||
Net income (loss) - basic | $ | (0.17 | ) | $ | 0.35 | $ | (0.16 | ) | ||||
Diluted | ||||||||||||
Income (loss) from continuing operations | $ | (0.17 | ) | $ | 0.34 | $ | (0.15 | ) | ||||
Income (loss) from discontinued operations | — | — | (0.01 | ) | ||||||||
Net income (loss) - diluted | $ | (0.17 | ) | $ | 0.34 | $ | (0.16 | ) | ||||
Weighted-average shares outstanding: | ||||||||||||
Basic | 32,060 | 31,566 | 29,931 | |||||||||
Diluted | 32,060 | 31,989 | 29,931 | |||||||||
Comprehensive income (loss): | ||||||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | ||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustment, net of income taxes | 2,169 | (647 | ) | 393 | ||||||||
Defined benefit pension plans - unrecognized net actuarial gain (loss) and prior service costs (credit), net of income taxes | (290 | ) | — | — | ||||||||
Total other comprehensive income (loss), net of income taxes | 1,879 | (647 | ) | 393 | ||||||||
Comprehensive income (loss) | $ | (3,456 | ) | $ | 10,262 | $ | (4,292 | ) |
December 31, | |||||||
2012 | 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 38,653 | $ | 37,302 | |||
Accounts receivable, less allowance for doubtful accounts of $1,167 and $1,772, respectively | 107,216 | 131,489 | |||||
Prepaid and other | 11,543 | 13,132 | |||||
Total current assets | 157,412 | 181,923 | |||||
Property and equipment, net | 20,050 | 17,838 | |||||
Deferred tax assets, non-current | 9,816 | 8,628 | |||||
Other assets | 6,190 | 8,157 | |||||
Total assets | $ | 193,468 | $ | 216,546 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,292 | $ | 12,025 | |||
Accrued expenses and other current liabilities | 55,960 | 74,248 | |||||
Short-term borrowings | — | 3,384 | |||||
Accrued business reorganization expenses | 1,916 | 858 | |||||
Total current liabilities | 67,168 | 90,515 | |||||
Other non-current liabilities | 7,853 | 6,388 | |||||
Deferred rent and tenant improvement contributions | 8,061 | 4,479 | |||||
Income tax payable, non-current | 3,845 | 7,807 | |||||
Total liabilities | 86,927 | 109,189 | |||||
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 33,100 and 32,776 shares, respectively | 33 | 33 | |||||
Additional paid-in capital | 473,372 | 470,786 | |||||
Accumulated deficit | (387,027 | ) | (381,692 | ) | |||
Accumulated other comprehensive income | 20,536 | 18,657 | |||||
Treasury stock, 79 and 79 shares, respectively, at cost | (373 | ) | (427 | ) | |||
Total stockholders’ equity | 106,541 | 107,357 | |||||
Total liabilities and stockholders' equity | $ | 193,468 | $ | 216,546 |
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 6,438 | 6,251 | 8,184 | ||||||||
Provision for (recovery of) doubtful accounts | (149 | ) | 132 | 392 | |||||||
Provision for (benefit from) deferred income taxes | (310 | ) | 1,272 | (223 | ) | ||||||
Stock-based compensation | 2,574 | 3,221 | 1,724 | ||||||||
Fee for early extinguishment of credit facility | — | — | 563 | ||||||||
Gains on sale of assets | (558 | ) | — | (3,369 | ) | ||||||
Other, net | 481 | 131 | 462 | ||||||||
Changes in assets and liabilities: | |||||||||||
Decrease (increase) in accounts receivable | 27,144 | (3,983 | ) | (27,252 | ) | ||||||
Decrease (increase) in prepaid and other assets | 3,448 | (202 | ) | (2,789 | ) | ||||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | (22,452 | ) | (2,534 | ) | 17,366 | ||||||
Increase (decrease) in accrued business reorganization expenses | 1,878 | (1,801 | ) | (6,031 | ) | ||||||
Net cash provided by (used in) operating activities | 13,159 | 13,396 | (15,658 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (8,647 | ) | (6,832 | ) | (3,264 | ) | |||||
Proceeds from sale of assets | 375 | 248 | 81 | ||||||||
Proceeds from note and sale of warrants | — | — | 6,179 | ||||||||
Payment for acquisitions | — | — | (1,856 | ) | |||||||
Net cash provided by (used in) investing activities | (8,272 | ) | (6,584 | ) | 1,140 | ||||||
Cash flows from financing activities: | |||||||||||
Borrowings under credit agreements | 74,534 | 237,779 | 99,914 | ||||||||
Repayments under credit agreements | (77,765 | ) | (235,752 | ) | (109,304 | ) | |||||
Repayment of capital lease obligations | (443 | ) | — | — | |||||||
Payment for early extinguishment of credit facility | — | — | (563 | ) | |||||||
Payment of deferred financing costs | — | — | (1,565 | ) | |||||||
Proceeds from issuance of common stock, net | — | — | 19,167 | ||||||||
Purchase of restricted stock from employees | (600 | ) | (388 | ) | (71 | ) | |||||
Net cash provided by (used in) financing activities | (4,274 | ) | 1,639 | 7,578 | |||||||
Effect of exchange rates on cash and cash equivalents | 738 | (672 | ) | 399 | |||||||
Net increase (decrease) in cash and cash equivalents | 1,351 | 7,779 | (6,541 | ) | |||||||
Cash and cash equivalents, beginning of the period | 37,302 | 29,523 | 36,064 | ||||||||
Cash and cash equivalents, end of the period | $ | 38,653 | $ | 37,302 | $ | 29,523 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash payments during the period for interest | $ | 333 | $ | 1,059 | $ | 1,098 | |||||
Cash payments during the period for income taxes, net of refunds | $ | 2,985 | $ | 4,046 | $ | 1,905 |
Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Treasury stock | Total | ||||||||||||||||||||||
Shares | Value | ||||||||||||||||||||||||||
Balance at January 1, 2010 | 26,722 | $ | 27 | $ | 445,541 | $ | (387,916 | ) | $ | 18,911 | $ | (303 | ) | $ | 76,260 | ||||||||||||
Net income (loss) | — | — | — | (4,685 | ) | — | — | (4,685 | ) | ||||||||||||||||||
Other comprehensive income (loss), translation adjustments | — | — | — | — | 393 | — | 393 | ||||||||||||||||||||
Issuance of shares | 4,830 | 5 | 19,111 | — | — | — | 19,116 | ||||||||||||||||||||
Purchase of restricted stock from employees | (16 | ) | — | — | — | — | (71 | ) | (71 | ) | |||||||||||||||||
Issuance of shares for 401(k) plan contribution | 121 | — | 206 | — | — | 335 | 541 | ||||||||||||||||||||
Stock-based compensation | 514 | — | 1,724 | — | — | — | 1,724 | ||||||||||||||||||||
Balance at December 31, 2010 | 32,171 | $ | 32 | $ | 466,582 | $ | (392,601 | ) | $ | 19,304 | $ | (39 | ) | $ | 93,278 | ||||||||||||
Net income (loss) | — | $ | — | $ | — | $ | 10,909 | $ | — | $ | — | 10,909 | |||||||||||||||
Other comprehensive income (loss), translation adjustments | — | $ | — | $ | — | $ | — | $ | (647 | ) | $ | — | (647 | ) | |||||||||||||
Purchase of restricted stock from employees | (70 | ) | $ | — | $ | — | $ | — | — | $ | (388 | ) | (388 | ) | |||||||||||||
Issuance of shares for 401(k) plan contribution | 92 | $ | — | $ | 602 | $ | — | $ | — | $ | — | 602 | |||||||||||||||
Stock-based compensation | 504 | $ | 1 | $ | 3,602 | $ | — | $ | — | $ | — | 3,603 | |||||||||||||||
Balance at December 31, 2011 | 32,697 | $ | 33 | $ | 470,786 | $ | (381,692 | ) | $ | 18,657 | $ | (427 | ) | $ | 107,357 | ||||||||||||
Net income (loss) | — | — | — | (5,335 | ) | — | — | (5,335 | ) | ||||||||||||||||||
Other comprehensive income (loss), translation adjustments | — | — | — | — | 2,169 | — | 2,169 | ||||||||||||||||||||
Other comprehensive income (loss), pension liability adjustment | (290 | ) | (290 | ) | |||||||||||||||||||||||
Purchase of restricted stock from employees | (124 | ) | — | — | — | — | (600 | ) | (600 | ) | |||||||||||||||||
Issuance of shares for 401(k) plan contribution | 124 | — | 12 | — | — | 654 | 666 | ||||||||||||||||||||
Stock-based compensation | 324 | — | 2,574 | — | — | — | 2,574 | ||||||||||||||||||||
Balance at December 31, 2012 | 33,021 | $ | 33 | $ | 473,372 | $ | (387,027 | ) | $ | 20,536 | $ | (373 | ) | $ | 106,541 |
For The Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||
Gross Margin ($) | % | Gross Margin ($) | % | Gross Margin ($) | % | |||||||||||||||
Hudson Americas | $ | 43,164 | 15.15 | % | $ | 50,778 | 14.33 | % | $ | 39,417 | 13.20 | % | ||||||||
Hudson Asia Pacific | 117,428 | 41.22 | % | 146,917 | 41.47 | % | 121,965 | 40.85 | % | |||||||||||
Hudson Europe | 124,275 | 43.63 | % | 156,610 | 44.20 | % | 137,191 | 45.95 | % | |||||||||||
Total | $ | 284,867 | 100.00 | % | $ | 354,305 | 100.00 | % | $ | 298,573 | 100.00 | % |
Years | ||
Furniture and equipment | 3 - 8 | |
Capitalized software costs | 3 - 5 | |
Computer equipment | 2 - 5 |
For The Year Ended | |||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | |||||||||||||||||||||||||||||||||
Temporary Contracting | Other | Total | Temporary Contracting | Other | Total | Temporary Contracting | Other | Total | |||||||||||||||||||||||||||
Revenue | $ | 579,914 | $ | 197,663 | $ | 777,577 | $ | 692,665 | $ | 241,071 | $ | 933,736 | $ | 585,321 | $ | 209,221 | $ | 794,542 | |||||||||||||||||
Direct costs (1) | 478,126 | 14,584 | 492,710 | 564,462 | 14,969 | 579,431 | 482,175 | 13,794 | 495,969 | ||||||||||||||||||||||||||
Gross margin | $ | 101,788 | $ | 183,079 | $ | 284,867 | $ | 128,203 | $ | 226,102 | $ | 354,305 | $ | 103,146 | $ | 195,427 | $ | 298,573 |
(1) | Direct costs include the direct staffing costs of salaries, payroll taxes, employee benefits, travel expenses and insurance costs for the Company’s contractors and reimbursed out-of-pocket expenses and other direct costs. Other than reimbursed out-of-pocket expenses, there are no other direct costs associated with the Other category, which includes the search, permanent recruitment and other human resource solutions’ revenue. Gross margin represents revenue less direct costs. The region where services are provided, the mix of contracting and permanent recruitment, and the functional nature of the staffing services provided can affect gross margin. The salaries, commissions, payroll taxes and employee benefits related to recruitment professionals are included in selling, general and administrative expenses. |
For The Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Stock options | $ | 704 | $ | 515 | $ | 158 | |||||
Restricted stock | 1,275 | 2,411 | 1,566 | ||||||||
Restricted stock units | 595 | 295 | — | ||||||||
Total | $ | 2,574 | $ | 3,221 | $ | 1,724 | |||||
Tax benefits recognized in jurisdictions where the Company has taxable income | $ | 105 | $ | 285 | $ | 132 |
As of December 31, | ||||||||||||||
2012 | 2011 | |||||||||||||
Unrecognized Expense | Weighted Average Period in Years | Unrecognized Expense | Weighted Average Period in Years | |||||||||||
Stock options | $ | 445 | 1.08 | $ | 1,037 | 1.89 | ||||||||
Restricted stock | $ | 1,806 | 1.38 | $ | 2,426 | 1.46 | ||||||||
Restricted stock units | $ | 182 | 1.52 | $ | 387 | 2.19 |
For The Year Ended December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Volatility | (a) | 75.1 | % | (a) | |||||
Risk free interest rate | (a) | 2.3 | % | (a) | |||||
Dividends | (a) | — | % | (a) | |||||
Expected life (years) | (a) | 6.25 | (a) | ||||||
Weighted average fair value of options granted during the period | (a) | $ | 3.50 | (a) | |||||
(a) | Stock option assumptions are not provided above because there were no options granted during the years ended December 31, 2012 and 2010. |
For The Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||
Number of Options | Weighted Average Exercise Price per Share | Number of Options | Weighted Average Exercise Price per Share | Number of Options | Weighted Average Exercise Price per Share | |||||||||||||||
Options outstanding at January 1, | 1,396,350 | $ | 11.36 | 1,548,300 | $ | 12.64 | 1,763,250 | $ | 12.79 | |||||||||||
Granted | — | — | 400,000 | 5.18 | — | — | ||||||||||||||
Expired | (157,700 | ) | 12.55 | (551,950 | ) | 10.47 | (214,950 | ) | 13.86 | |||||||||||
Options outstanding at December 31, | 1,238,650 | $ | 11.21 | 1,396,350 | $ | 11.36 | 1,548,300 | $ | 12.64 | |||||||||||
Options exercisable at December 31, | 838,650 | $ | 14.09 | 983,850 | $ | 13.96 | 1,508,000 | $ | 12.71 |
As of December 31, | ||||||||||||||
2012 | 2011 | |||||||||||||
Remaining Contractual Term in Years | Aggregated Intrinsic Value | Remaining Contractual Term in Years | Aggregated Intrinsic Value | |||||||||||
Stock options outstanding | 4.4 | $ | — | 5.1 | $ | — | ||||||||
Stock options exercisable | 2.5 | $ | — | 3.4 | $ | — |
Vesting conditions | Number of Shares of Restricted Stock Granted | ||
Performance and service conditions (1) (2) | 566,830 | ||
Vest 50% on each of the second and third anniversaries of the grant date with service conditions only | 35,000 | ||
Immediately vested | 1,400 | ||
Vest two-thirds on the second anniversary of the grant date and one-third on the third anniversary of the grant date with service conditions only | 20,000 | ||
Vest one-third on each of the first three anniversaries of the grant date with service conditions only | 15,000 | ||
Total shares of restricted stock granted for the year ended December 31, 2012 | 638,230 |
(1) | The performance conditions with respect to restricted stock may be satisfied as follows: |
(a) | 50% of the shares of restricted stock may be earned on the basis of performance as measured by a “Take-out Ratio,” defined as the percentage of the direct, front line costs incurred for the year ended December 31, 2012 divided by the gross margin for the year ended December 31, 2012; |
(b) | 25% of the shares of restricted stock may be earned on the basis of performance as measured by an employee engagement score for the year ended December 31, 2012 based on an employee survey conducted by a global human resources consulting firm; and |
(c) | 25% of the shares of restricted stock may be earned on the basis of performance as measured by “Cash Efficiency,” defined as (1) cash flow from operations for the year ended December 31, 2012 divided by (2) gross margin minus selling, general and administrative expenses for the year ended December 31, 2012. |
(2) | To the extent shares are earned on the basis of performance, such shares will vest on the basis of service as follows: |
(a) | 33% of the shares vest on the later of the first anniversary of the grant date or the determination that the performance conditions have been satisfied; |
(b) | 33% of the shares vest on the second anniversary of the grant date; and |
(c) | 34% of the shares vest on the third anniversary of the grant date; provided that, in each case, the named executive officer remains employed by the Company from the grant date through the applicable service vesting date. |
For The Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||
Number of Shares of Restricted Stock | Weighted Average Grant Date Fair Value | Number of Shares of Restricted Stock | Weighted Average Grant Date Fair Value | Number of Shares of Restricted Stock | Weighted Average Grant Date Fair Value | |||||||||||||||
Unvested restricted stock at January 1, | 1,166,082 | $ | 5.12 | 953,037 | $ | 3.64 | 531,083 | $ | 2.70 | |||||||||||
Granted | 638,230 | 4.59 | 743,625 | 6.22 | 597,732 | 4.56 | ||||||||||||||
Vested | (461,200 | ) | 4.86 | (295,065 | ) | 4.09 | (111,112 | ) | 4.33 | |||||||||||
Forfeited | (314,196 | ) | 5.26 | (235,515 | ) | 3.86 | (64,666 | ) | 3.19 | |||||||||||
Unvested restricted stock at December 31, | 1,028,916 | $ | 4.87 | 1,166,082 | $ | 5.12 | 953,037 | $ | 3.64 |
For The Year Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Fair value of restricted stock vested | $ | 2,239 | $ | 1,207 | $ | 481 |
For The Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||
Number of Shares of Restricted Stock Unit | Weighted Average Grant-Date Fair Value | Number of Shares of Restricted Stock Unit | Weighted Average Grant-Date Fair Value | Number of Shares of Restricted Stock Unit | Weighted Average Grant-Date Fair Value | |||||||||||||||
Unvested restricted stock units at January 1, | 100,000 | $ | 5.18 | — | $ | — | — | $ | — | |||||||||||
Granted | 76,023 | 5.13 | 127,376 | 5.37 | 25,521 | 5.76 | ||||||||||||||
Vested | (76,023 | ) | 5.13 | (27,376 | ) | 6.05 | (25,521 | ) | 5.76 | |||||||||||
Unvested restricted stock units at December 31, | 100,000 | $ | 5.18 | 100,000 | $ | 5.18 | — | $ | — |
For The Year Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Fair value of restricted stock units vested | $ | 390 | $ | 166 | $ | 147 |
For The Year Ended December 31, | ||||||||||||
($ in thousands, except otherwise stated) | 2012 | 2011 | 2010 | |||||||||
Expense recognized for the 401(k) plan | $ | 635 | $ | 686 | $ | 610 | ||||||
Contributions to satisfy prior years' employer-matching liability | ||||||||||||
Number of shares of the Company's common stock issued (in thousands) | 124 | 92 | 121 | |||||||||
Market value per share of the Company's common stock on contribution date (in dollars) | $ | 5.35 | $ | 6.55 | $ | 4.47 | ||||||
Non-cash contribution made for employer matching liability | $ | 666 | $ | 602 | $ | 541 | ||||||
Additional cash contribution made for employer-matching liability | — | — | 111 | |||||||||
Total contribution made for employer-matching liability | $ | 666 | $ | 602 | $ | 652 |
Year ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Domestic | $ | (400 | ) | $ | 6,313 | $ | 1,821 | |||||
Foreign | (6,619 | ) | 9,935 | (4,780 | ) | |||||||
Income (loss) from continuing operations before provision for income taxes | $ | (7,019 | ) | $ | 16,248 | $ | (2,959 | ) |
Year ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Current tax provision (benefit): | ||||||||||||
U.S. Federal | $ | — | $ | — | $ | — | ||||||
State and local | (3,214 | ) | 239 | (819 | ) | |||||||
Foreign | 1,840 | 3,828 | 2,524 | |||||||||
Total current provision for (benefit from) income taxes | (1,374 | ) | 4,067 | 1,705 | ||||||||
Deferred tax provision (benefit): | ||||||||||||
U.S. Federal | — | — | — | |||||||||
State and local | — | — | — | |||||||||
Foreign | (310 | ) | 1,272 | (223 | ) | |||||||
Total deferred provision for (benefit from) income taxes | (310 | ) | 1,272 | (223 | ) | |||||||
Total provision for (benefit from) income taxes from continuing operations | $ | (1,684 | ) | $ | 5,339 | $ | 1,482 |
Year ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Provision for (benefit from) continuing operations at Federal statutory rate of 35% | $ | (2,457 | ) | $ | 5,687 | $ | (1,036 | ) | ||||
State income taxes, net of Federal income tax effect | (2,089 | ) | 155 | (532 | ) | |||||||
Change in valuation allowance | 2,545 | (3,284 | ) | 2,970 | ||||||||
Taxes related to foreign income | (2,505 | ) | (112 | ) | (467 | ) | ||||||
Nondeductible expenses and others | 2,822 | 2,893 | 547 | |||||||||
Provision for (benefit from) income tax | $ | (1,684 | ) | $ | 5,339 | $ | 1,482 |
As of December 31, | ||||||||
2012 | 2011 | |||||||
Current deferred tax assets (liabilities): | ||||||||
Allowance for doubtful accounts | $ | 145 | $ | 362 | ||||
Prepaid expenses | — | (543 | ) | |||||
Accrued and other current liabilities | 1,015 | 1,077 | ||||||
Accrued compensation liabilities | 2,886 | 3,763 | ||||||
Tax loss carry-forwards | — | — | ||||||
Current deferred tax assets (liabilities), gross, total | 4,046 | 4,659 | ||||||
Valuation allowance | (610 | ) | (566 | ) | ||||
Total current deferred tax asset, net of valuation allowance | 3,436 | 4,093 | ||||||
Non-current deferred tax assets (liabilities): | ||||||||
Property and equipment | 3,355 | 2,093 | ||||||
Goodwill and intangibles | 14,434 | 18,467 | ||||||
Accrued and other non-current liabilities | 1,775 | 1,062 | ||||||
Deferred compensation | 3,613 | 3,735 | ||||||
Other | — | 1,873 | ||||||
Tax loss carry-forwards | 140,068 | 132,298 | ||||||
Non-current deferred tax assets (liabilities), gross, total | 163,245 | 159,528 | ||||||
Valuation allowance | (153,718 | ) | (151,217 | ) | ||||
Total non-current deferred tax asset (liabilities), net of valuation allowance | 9,527 | 8,311 | ||||||
Deferred tax assets (liabilities), net of valuation allowance, total | $ | 12,963 | $ | 12,404 |
As of December 31, | ||||||||
2012 | 2011 | |||||||
Unrecognized tax benefits, excluding interest and penalties | $ | 3,144 | $ | 6,163 | ||||
Accrued interest and penalties | 701 | 1,644 | ||||||
Total unrecognized tax benefits that would impact effective tax rate | $ | 3,845 | $ | 7,807 |
Balance at January 1, 2012 | $ | 6,163 | ||
Additions based on tax positions related to the current year | 225 | |||
Additions for tax positions of prior years | 65 | |||
Reductions for tax positions of prior years | (2,868 | ) | ||
Settlements | (83 | ) | ||
Lapse of statute of limitations | (410 | ) | ||
Currency Translation | 52 | |||
Balance at December 31, 2012 | $ | 3,144 |
Year ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Expense for (benefit of) estimated interest and penalties related to unrecognized tax benefits | $ | (909 | ) | $ | (230 | ) | $ | (93 | ) |
Year | ||
Earliest tax years remain subject to examination by the relevant tax authorities: | ||
U.S. Federal | 2009 | |
Other U.S. state and local jurisdictions | 2008 | |
U.K. | 2011 | |
Australia | 2008 | |
Other foreign jurisdictions | 2007 | |
Currently under income tax examination: | ||
New Zealand | 2009 |
Year Ended | ||||||||||||
December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Earnings (loss) per share ("EPS"): | ||||||||||||
Basic | ||||||||||||
Income (loss) from continuing operations | $ | (0.17 | ) | $ | 0.35 | $ | (0.15 | ) | ||||
Income (loss) from discontinued operations | — | — | (0.01 | ) | ||||||||
Net income (loss) - basic EPS | $ | (0.17 | ) | $ | 0.35 | $ | (0.16 | ) | ||||
Diluted | ||||||||||||
Income (loss) from continuing operations | $ | (0.17 | ) | $ | 0.34 | $ | (0.15 | ) | ||||
Income (loss) from discontinued operations | — | — | (0.01 | ) | ||||||||
Net income (loss) - diluted EPS | $ | (0.17 | ) | $ | 0.34 | $ | (0.16 | ) | ||||
EPS numerator - basic and diluted: | ||||||||||||
Income (loss) from continuing operations | $ | (5,335 | ) | $ | 10,909 | $ | (4,441 | ) | ||||
Income (loss) from discontinued operations, net of income taxes | — | — | (244 | ) | ||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | ||||
EPS denominator (in thousands): | ||||||||||||
Weighted average common stock outstanding - basic | 32,060 | 31,566 | 29,931 | |||||||||
Common stock equivalents: stock options and other stock-based awards (a) | — | 423 | — | |||||||||
Weighted average number of common stock outstanding - diluted | 32,060 | 31,989 | 29,931 |
(a) | For the periods in which net losses are presented, the diluted weighted average number of shares of common stock outstanding did not differ from the basic weighted average number of shares of common stock outstanding because the effects of any potential common stock equivalents (see Note 4 for further details on outstanding stock options, unvested restricted stock units and unvested restricted stock) were anti-dilutive and therefore not included in the calculation of the denominator of dilutive earnings per share. |
Year Ended | |||||||||
December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Unvested restricted stock | 1,028,916 | 104,175 | 1,034,597 | ||||||
Unvested restricted stock units | 100,000 | — | — | ||||||
Stock options | 1,238,650 | 1,396,350 | 1,548,300 | ||||||
Total | 2,367,566 | 1,500,525 | 2,582,897 |
As of December 31, | |||||||
2012 | 2011 | ||||||
Included under the caption "Other assets": | |||||||
Collateral accounts | $ | 619 | $ | 3,120 | |||
Rental deposits | 1,301 | 268 | |||||
Total amount under the caption "Other assets": | $ | 1,920 | $ | 3,388 | |||
Included under the caption "Prepaid and other": | |||||||
Client guarantees | $ | 102 | $ | 133 | |||
Collateral accounts | — | 117 | |||||
Other | 142 | 3 | |||||
Total amount under the caption "Prepaid and other" | $ | 244 | $ | 253 | |||
Total restricted cash | $ | 2,164 | $ | 3,641 |
As of December 31, | |||||||
2012 | 2011 | ||||||
Computer equipment | $ | 10,889 | $ | 13,666 | |||
Furniture and equipment | 7,840 | 9,692 | |||||
Capitalized software costs | 28,877 | 30,920 | |||||
Leasehold and building improvements | 24,650 | 21,650 | |||||
72,256 | 75,928 | ||||||
Less: accumulated depreciation and amortization | 52,206 | 58,090 | |||||
Property and equipment, net | $ | 20,050 | $ | 17,838 |
As of December 31, | |||||||
2012 | 2011 | ||||||
Capital lease obligation, current | $ | 467 | $ | 420 | |||
Capital lease obligation, non-current | $ | 324 | $ | 720 |
Carrying Value | |||||||
2012 | 2011 | ||||||
Goodwill, January 1, | $ | 1,992 | $ | 1,909 | |||
Additions | — | — | |||||
Impairments | — | — | |||||
Currency translation | 28 | 83 | |||||
Goodwill, December 31, | $ | 2,020 | $ | 1,992 |
December 31, | ||||||||
2012 | 2011 | |||||||
Salaries, commissions and benefits | $ | 30,051 | $ | 44,625 | ||||
Sales, use and income taxes | 11,161 | 13,119 | ||||||
Fees for professional services | 1,773 | 1,635 | ||||||
Rent | 2,299 | 1,806 | ||||||
Deferred revenue | 1,623 | 1,840 | ||||||
Other accruals | 9,053 | 11,223 | ||||||
Total accrued expenses and other liabilities | $ | 55,960 | $ | 74,248 |
Year Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
2006 Plan | $ | 2,280 | $ | 739 | $ | 1,393 | ||||||
2008 Plan | — | — | 74 | |||||||||
2009 Plan | 49 | (19 | ) | 227 | ||||||||
2012 Plan | 5,453 | — | — | |||||||||
Total | $ | 7,782 | $ | 720 | $ | 1,694 |
For The Year Ended December 31, 2012 | December 31, 2011 | Changes in Estimate | Additional Charges | Payments | December 31, 2012 | ||||||||||||||
Lease termination payments | $ | 1,309 | $ | 2,230 | $ | 1,053 | $ | (1,914 | ) | $ | 2,678 | ||||||||
Employee termination benefits | 75 | 97 | 4,286 | (3,743 | ) | 715 | |||||||||||||
Other associated costs | 5 | — | 116 | (94 | ) | 27 | |||||||||||||
Total | $ | 1,389 | $ | 2,327 | $ | 5,455 | $ | (5,751 | ) | $ | 3,420 |
Lease termination payments for the year ended December 31, | Hudson | Hudson | Hudson | |||||||||||||||||
America | Asia Pacific | Europe | Corporate | Total | ||||||||||||||||
2012 | $ | 179 | $ | 613 | $ | 2,491 | $ | — | $ | 3,283 | ||||||||||
2011 | $ | — | $ | — | $ | 708 | $ | — | $ | 708 | ||||||||||
2010 | $ | 134 | $ | (18 | ) | $ | 1,348 | $ | — | $ | 1,464 |
Employee termination benefits for the year ended December 31, | Hudson | Hudson | Hudson | |||||||||||||||||
America | Asia Pacific | Europe | Corporate | Total | ||||||||||||||||
2012 | $ | 811 | $ | 674 | $ | 2,539 | $ | 359 | $ | 4,383 | ||||||||||
2011 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
2010 | $ | 173 | $ | (17 | ) | $ | 67 | $ | — | $ | 223 |
2013 | $ | 24,024 | ||
2014 | 18,837 | |||
2015 | 15,571 | |||
2016 | 13,926 | |||
2017 | 10,528 | |||
Thereafter | 21,840 | |||
$ | 104,726 |
As of December 31, | |||||||
2012 | 2011 | ||||||
Current portion of asset retirement obligations | $ | 52 | $ | 301 | |||
Non-current portion of asset retirement obligations | 2,769 | 2,507 | |||||
Total asset retirement obligations | $ | 2,821 | $ | 2,808 |
Level | Fixed Charge Coverage Ratio | Base Rate Revolving Loans | LIBOR Revolving Loans or Letter of Credit Obligations | |||
I | Greater than or equal to 1.25:1.0 | 1.25 | % | 2.25 | % | |
II | Less than 1.25:1.0 but greater than or equal to 1.10:1.0 | 1.50 | % | 2.50 | % | |
III | Less than 1.10:1.0 | 1.75 | % | 2.75 | % |
December 31, 2012 | |||
Borrowing base | $ | 29,012 | |
Less: adjustments to the borrowing base | |||
Minimum excess availability | (10,000 | ) | |
Outstanding letters of credits | (2,099 | ) | |
Adjusted borrowing base | 16,913 | ||
Less: outstanding borrowing | — | ||
Additional borrowing availability | $ | 16,913 | |
Interest rates on outstanding borrowing | 4.50 | % |
December 31, 2012 | |||
Tranche A: | |||
Borrowing capacity | $ | 16,434 | |
Less: outstanding borrowing | — | ||
Additional borrowing availability | $ | 16,434 | |
Interest rates on outstanding borrowing | 5.08 | % | |
Tranche B: | |||
Borrowing capacity | $ | 2,898 | |
Less: outstanding borrowing | — | ||
Additional borrowing availability | $ | 2,898 | |
Interest rates on outstanding borrowing | 6.03 | % | |
Tranche C: | |||
Financial guarantee capacity | $ | 5,197 | |
Less: outstanding financial guarantee requested | (2,934 | ) | |
Additional availability for financial guarantee | $ | 2,263 | |
Interest rates on financial guarantee requested | 1.10 | % |
Hudson Americas | Hudson Asia Pacific | Hudson Europe | Corporate | Inter- segment elimination | Total | ||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||||
Revenue, from external customers | $ | 169,216 | $ | 288,144 | $ | 320,217 | $ | — | $ | — | $ | 777,577 | |||||||||||
Inter-segment revenue | — | 91 | 88 | — | (179 | ) | — | ||||||||||||||||
Total revenue | $ | 169,216 | $ | 288,235 | $ | 320,305 | $ | — | $ | (179 | ) | $ | 777,577 | ||||||||||
Gross margin, from external customers | $ | 43,164 | $ | 117,428 | $ | 124,275 | $ | — | $ | — | $ | 284,867 | |||||||||||
Inter-segment gross margin | (13 | ) | 12 | 1 | — | — | — | ||||||||||||||||
Total gross margin | $ | 43,151 | $ | 117,440 | $ | 124,276 | $ | — | $ | — | $ | 284,867 | |||||||||||
Business reorganization expenses (recovery) | $ | 1,007 | $ | 1,285 | $ | 5,131 | $ | 359 | $ | — | $ | 7,782 | |||||||||||
EBITDA (loss) (a) | $ | 1,268 | $ | 5,355 | $ | (2,955 | ) | $ | (3,614 | ) | $ | — | $ | 54 | |||||||||
Depreciation and amortization | 1,097 | 3,197 | 1,503 | 641 | — | 6,438 | |||||||||||||||||
Intercompany interest income (expense), net | — | (3,988 | ) | (435 | ) | 4,423 | — | — | |||||||||||||||
Interest income (expense), net | (57 | ) | (236 | ) | 51 | (393 | ) | — | (635 | ) | |||||||||||||
Income (loss) from continuing operations before income taxes | $ | 114 | $ | (2,066 | ) | $ | (4,842 | ) | $ | (225 | ) | $ | — | $ | (7,019 | ) | |||||||
Provision for (benefit from) income taxes | $ | (3,061 | ) | $ | (527 | ) | $ | 1,486 | $ | 418 | $ | — | $ | (1,684 | ) | ||||||||
As of December 31, 2012 | |||||||||||||||||||||||
Accounts receivable, net | $ | 26,168 | $ | 32,835 | $ | 48,213 | $ | — | $ | — | $ | 107,216 | |||||||||||
Long-lived assets, net of accumulated depreciation and amortization | $ | 2,230 | $ | 12,909 | $ | 5,048 | $ | 1,971 | $ | — | $ | 22,158 | |||||||||||
Total assets | $ | 31,399 | $ | 72,517 | $ | 76,381 | $ | 13,171 | $ | — | $ | 193,468 |
Hudson Americas | Hudson Asia Pacific | Hudson Europe | Corporate | Inter- segment elimination | Total | ||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||||
Revenue, from external customers | $ | 192,217 | $ | 359,108 | $ | 382,411 | $ | — | $ | — | $ | 933,736 | |||||||||||
Inter-segment revenue | 20 | 39 | 135 | — | (194 | ) | — | ||||||||||||||||
Total revenue | $ | 192,237 | $ | 359,147 | $ | 382,546 | $ | — | $ | (194 | ) | $ | 933,736 | ||||||||||
Gross margin, from external customers | $ | 50,778 | $ | 146,917 | $ | 156,610 | $ | — | $ | — | $ | 354,305 | |||||||||||
Inter-segment gross margin | (1 | ) | (83 | ) | 107 | — | (23 | ) | — | ||||||||||||||
Total gross margin | $ | 50,777 | $ | 146,834 | $ | 156,717 | $ | — | $ | (23 | ) | $ | 354,305 | ||||||||||
Business reorganization expenses (recovery) | $ | — | $ | — | $ | 720 | $ | — | $ | — | $ | 720 | |||||||||||
EBITDA (loss) (a) | $ | 3,482 | $ | 14,180 | $ | 8,071 | $ | (2,091 | ) | $ | — | $ | 23,642 | ||||||||||
Depreciation and amortization | 1,092 | 2,922 | 1,642 | 595 | — | 6,251 | |||||||||||||||||
Intercompany interest income (expense), net | — | (7,339 | ) | (523 | ) | 7,864 | (2 | ) | — | ||||||||||||||
Interest income (expense), net | (42 | ) | (659 | ) | 55 | (497 | ) | — | (1,143 | ) | |||||||||||||
Income (loss) from continuing operations before income taxes | $ | 2,348 | $ | 3,260 | $ | 5,961 | $ | 4,681 | $ | (2 | ) | $ | 16,248 | ||||||||||
Provision for (benefit from) income taxes | 500 | 900 | 3,214 | 725 | — | 5,339 | |||||||||||||||||
As of December 31, 2011 | |||||||||||||||||||||||
Accounts receivable, net | $ | 24,750 | $ | 49,918 | $ | 56,821 | $ | — | $ | — | $ | 131,489 | |||||||||||
Long-lived assets, net of accumulated depreciation and amortization | $ | 2,557 | $ | 9,997 | $ | 4,939 | $ | 2,536 | $ | — | $ | 20,029 | |||||||||||
Total assets | $ | 29,818 | $ | 81,161 | $ | 86,156 | $ | 19,411 | $ | — | $ | 216,546 |
Hudson Americas | Hudson Asia Pacific | Hudson Europe | Corporate | Inter- segment elimination | Total | ||||||||||||||||||
For the Year Ended December 31, 2010 | |||||||||||||||||||||||
Revenue, from external customers | $ | 162,432 | $ | 303,619 | $ | 328,491 | $ | — | $ | — | $ | 794,542 | |||||||||||
Inter-segment revenue | (3 | ) | 70 | 195 | — | (262 | ) | — | |||||||||||||||
Total revenue | $ | 162,429 | $ | 303,689 | $ | 328,686 | $ | — | $ | (262 | ) | $ | 794,542 | ||||||||||
Gross margin, from external customers | $ | 39,417 | $ | 121,965 | $ | 137,191 | $ | — | $ | — | $ | 298,573 | |||||||||||
Inter-segment gross margin | (116 | ) | (1 | ) | 125 | — | (8 | ) | — | ||||||||||||||
Total gross margin | $ | 39,301 | $ | 121,964 | $ | 137,316 | $ | — | $ | (8 | ) | $ | 298,573 | ||||||||||
Business reorganization expenses (recovery) | $ | 307 | $ | (15 | ) | $ | 1,402 | $ | — | $ | — | $ | 1,694 | ||||||||||
EBITDA (loss) (a) | $ | 1,687 | $ | 8,847 | $ | 1,086 | $ | (5,117 | ) | $ | — | $ | 6,503 | ||||||||||
Depreciation and amortization | 2,356 | 2,887 | 2,789 | 152 | — | 8,184 | |||||||||||||||||
Intercompany interest income (expense), net | — | (8,198 | ) | (290 | ) | 8,487 | 1 | — | |||||||||||||||
Interest income (expense), net | (7 | ) | (36 | ) | (16 | ) | (1,219 | ) | — | (1,278 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | $ | (676 | ) | $ | (2,274 | ) | $ | (2,009 | ) | $ | 1,999 | $ | 1 | $ | (2,959 | ) | |||||||
Provision for (benefit from) income taxes | $ | (504 | ) | $ | (120 | ) | $ | 1,266 | $ | 840 | $ | — | $ | 1,482 | |||||||||
As of December 31, 2010 | |||||||||||||||||||||||
Accounts receivable, net | $ | 26,388 | $ | 45,913 | $ | 56,275 | $ | — | $ | — | $ | 128,576 | |||||||||||
Long-lived assets, net of accumulated depreciation and amortization | $ | 1,487 | $ | 10,271 | $ | 4,819 | $ | 2,248 | $ | — | $ | 18,825 | |||||||||||
Total assets | $ | 30,130 | $ | 77,204 | $ | 86,133 | $ | 12,367 | $ | — | $ | 205,834 |
(a) | SEC Regulation S-K 229.10(e)1(ii)(A) defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is presented to provide additional information to investors about the Company's operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses this measurement to evaluate working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income and net income prepared in accordance with U.S. GAAP or as a measure of the Company's profitability. |
Information by geographic region | United Kingdom | Australia | United States | Continental Europe | Other Asia Pacific | Other Americas | Total | ||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Revenue (a) | $ | 210,933 | $ | 218,537 | $ | 167,196 | $ | 109,100 | $ | 69,791 | $ | 2,020 | $ | 777,577 | |||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||||||||
Revenue (a) | $ | 258,766 | $ | 277,646 | $ | 190,094 | $ | 121,935 | $ | 83,172 | $ | 2,123 | $ | 933,736 | |||||||||||||
For the Year Ended December 31, 2010 | |||||||||||||||||||||||||||
Revenue (a) | $ | 221,538 | $ | 232,936 | $ | 161,241 | $ | 104,984 | $ | 72,652 | $ | 1,191 | $ | 794,542 | |||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||
Long-lived assets, net of accumulated depreciation and amortization (b) | $ | 3,629 | $ | 9,015 | $ | 4,152 | $ | 1,411 | $ | 3,895 | $ | 56 | $ | 22,158 | |||||||||||||
Net assets | $ | 26,750 | $ | 31,036 | $ | 26,404 | $ | 7,975 | $ | 14,122 | $ | 254 | $ | 106,541 | |||||||||||||
As of December 31, 2011 | |||||||||||||||||||||||||||
Long-lived assets, net of accumulated depreciation and amortization (b) | $ | 3,122 | $ | 5,972 | $ | 5,067 | $ | 1,805 | $ | 4,029 | $ | 34 | $ | 20,029 | |||||||||||||
Net assets | $ | 29,290 | $ | 30,521 | $ | 22,223 | $ | 10,933 | $ | 14,028 | $ | 362 | $ | 107,357 | |||||||||||||
As of December 31, 2010 | |||||||||||||||||||||||||||
Long-lived assets, net of accumulated depreciation and amortization (b) | $ | 3,086 | $ | 6,841 | $ | 3,743 | $ | 1,725 | $ | 3,430 | $ | — | $ | 18,825 | |||||||||||||
Net assets | $ | 27,636 | $ | 23,348 | $ | 16,947 | $ | 13,099 | $ | 11,774 | $ | 474 | $ | 93,278 |
(a) | Revenue by geographic region disclosed above is net of any inter-segment revenue and, therefore, represents only revenue from external customers according to the location of the operating subsidiary. |
For The Year Ended December 31, 2012 | ||||||||||||||||
First quarter | Second quarter | Third quarter | Fourth quarter | |||||||||||||
Revenue | $ | 200,590 | $ | 204,838 | $ | 187,873 | $ | 184,276 | ||||||||
Gross margin | $ | 73,208 | $ | 77,068 | $ | 67,666 | $ | 66,925 | ||||||||
Operating income (loss) | $ | (3,702 | ) | $ | (3,167 | ) | $ | (1,600 | ) | $ | 1,831 | |||||
Net income (loss) | $ | (3,221 | ) | $ | 394 | $ | (2,165 | ) | $ | (343 | ) | |||||
Basic earnings (loss) per share | $ | (0.10 | ) | $ | 0.01 | $ | (0.07 | ) | $ | (0.01 | ) | |||||
Diluted earnings (loss) per share | $ | (0.10 | ) | $ | 0.01 | $ | (0.07 | ) | $ | (0.01 | ) | |||||
Basic weighted average shares outstanding (in thousands) | 31,765 | 32,122 | 32,156 | 32,169 | ||||||||||||
Diluted weighted average shares outstanding (in thousands) | 31,765 | 32,486 | 32,156 | 32,169 | ||||||||||||
Common stock equivalents and outstanding stock options excluded from the calculation of diluted earnings (loss) per share (in thousands) | 2,793 | 1,939 | 2,654 | 2,368 | ||||||||||||
For The Year Ended December 31, 2011 | ||||||||||||||||
First quarter | Second quarter | Third quarter | Fourth quarter | |||||||||||||
Revenue | $ | 218,539 | $ | 247,378 | $ | 245,081 | $ | 222,738 | ||||||||
Gross margin | $ | 81,198 | $ | 95,467 | $ | 92,992 | $ | 84,648 | ||||||||
Operating income (loss) | $ | 463 | $ | 6,030 | $ | 6,150 | $ | 4,792 | ||||||||
Net income (loss) | $ | (6 | ) | $ | 4,224 | $ | 3,382 | $ | 3,309 | |||||||
Basic earnings (loss) per share | $ | — | $ | 0.13 | $ | 0.11 | $ | 0.10 | ||||||||
Diluted earnings (loss) per share | $ | — | $ | 0.13 | $ | 0.11 | $ | 0.10 | ||||||||
Basic weighted average shares outstanding | 31,325 | 31,593 | 31,620 | 31,639 | ||||||||||||
Diluted weighted average shares outstanding | 31,325 | 32,039 | 32,085 | 32,118 | ||||||||||||
Common stock equivalents and outstanding stock options excluded from the calculation of diluted earnings (loss) per share (in thousands) | 2,928 | 2,224 | 1,717 | 1,396 |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Number of shares to be issued upon exercise of outstanding options | Weighted average exercise price of outstanding options | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in Column A) | |||||||||
A | B | C | |||||||||
Equity Compensation Plans approved by stockholders: | |||||||||||
Long Term Incentive Plan | 838,650 | $ | 14.09 | — | (1) | ||||||
2009 Incentive Stock and Awards Plan | — | — | 2,746,145 | (1) | |||||||
Employee Stock Purchase Plan | — | — | 116,329 | (2) | |||||||
Equity Compensation Plans not approved by stockholders | 400,000 | (3) | 5.18 | — | (4) | ||||||
Total | 1,238,650 | $ | 11.21 | 2,862,474 |
(1) | Excludes 1,028,916 shares of unvested restricted common stock previously issued under the Hudson Global, Inc. Long Term Incentive Plan and 2009 Incentive Stock and Awards Plan. |
(2) | The Company suspended the Hudson Global, Inc. Employee Stock Purchase Plan effective January 1, 2009. |
(3) | Represents stock options granted to Manuel Marquez on May 13, 2011 pursuant to the terms of his employment agreement as an inducement to him to join the Company as Chairman and Chief Executive Officer. |
(4) | Excludes 100,000 unvested restricted stock units granted to Manuel Marquez on May 13, 2011 pursuant to the terms of his employment agreement as an inducement to him to join the Company as Chairman and Chief Executive Officer. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
Page | ||
Reports of Independent Registered Public Accounting Firm | ||
Consolidated Statements of Operations and Other Comprehensive Income (Loss) For The Years Ended December 31, 2012, 2011 and 2010 | ||
Consolidated Balance Sheets As Of December 31, 2012 and 2011 | ||
Consolidated Statements of Cash Flows For The Years Ended December 31, 2012, 2011 and 2010 | ||
Consolidated Statement of Changes in Stockholders’ Equity For The Years Ended December 31, 2012, 2011 and 2010 | ||
Notes to Consolidated Financial Statements |
HUDSON GLOBAL, INC. | ||||||||||||
CONDENSED STATEMENTS OF OPERATIONS (PARENT COMPANY ONLY) | ||||||||||||
(in thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative expenses | $ | 18,272 | $ | 19,860 | $ | 18,848 | ||||||
Depreciation and amortization | 641 | 595 | 152 | |||||||||
Business reorganization expenses | 359 | — | — | |||||||||
Operating loss | (19,272 | ) | (20,455 | ) | (19,000 | ) | ||||||
Other income (expense): | ||||||||||||
Interest, net | 43 | 28 | 3,084 | |||||||||
Corporate costs allocation and other, net | 15,016 | 17,770 | 14,293 | |||||||||
Equity in earnings (losses) of subsidiaries, net of income taxes | (1,103 | ) | 13,557 | (1,833 | ) | |||||||
Fee for early extinguishment of credit facility | — | — | (563 | ) | ||||||||
Income (loss) from continuing operations before provision for income taxes | (5,316 | ) | 10,900 | (4,019 | ) | |||||||
Provision for (benefit from) income taxes | 19 | (9 | ) | 422 | ||||||||
Income (loss) from continuing operations | (5,335 | ) | 10,909 | (4,441 | ) | |||||||
Income (loss) from discontinued operations, net of income taxes | — | — | (244 | ) | ||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | ||||
See notes to condensed financial statements. |
HUDSON GLOBAL, INC. | ||||||||
CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) | ||||||||
(in thousands) | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,475 | $ | 13,628 | ||||
Prepaid and other | 534 | 869 | ||||||
Total current assets | 10,009 | 14,497 | ||||||
Property and equipment, net | 1,971 | 2,536 | ||||||
Investment in and advances to/from subsidiaries | 98,648 | 95,755 | ||||||
Other assets | 1,193 | 2,377 | ||||||
Total assets | $ | 111,821 | $ | 115,165 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable, accrued expenses and other current liabilities | 3,523 | $ | 5,417 | |||||
Total current liabilities | 3,523 | 5,417 | ||||||
Deferred rent and other non-current liabilities | 1,757 | 2,391 | ||||||
Total liabilities | 5,280 | 7,808 | ||||||
Stockholders’ equity | 106,541 | 107,357 | ||||||
Total liabilities and stockholders' equity | $ | 111,821 | $ | 115,165 | ||||
See notes to condensed financial statements. |
HUDSON GLOBAL, INC. | ||||||||||||
CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) | ||||||||||||
(in thousands) | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | (5,335 | ) | $ | 10,909 | $ | (4,685 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Dividends received from subsidiaries | 6,255 | 4,515 | 3,123 | |||||||||
Non-cash (income) losses from subsidiaries, net of taxes | 1,103 | (13,557 | ) | 5,599 | ||||||||
Depreciation and amortization | 641 | 595 | 152 | |||||||||
Stock-based compensation | 1,479 | 1,292 | 693 | |||||||||
Fee for early extinguishment of credit facility | — | — | 563 | |||||||||
Other, net | 368 | 365 | 460 | |||||||||
Changes in assets and liabilities: | ||||||||||||
(Increase) decrease in prepaid and other assets | 1,151 | (987 | ) | 1,751 | ||||||||
(Increase) decrease in due from subsidiaries | (6,736 | ) | 7,093 | (13,200 | ) | |||||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | (2,443 | ) | (828 | ) | 2,696 | |||||||
Increase (decrease) in accrued business reorganization expenses | 40 | — | (210 | ) | ||||||||
Net cash provided by (used in) operating activities | (3,477 | ) | 9,397 | (3,058 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (76 | ) | (367 | ) | (16 | ) | ||||||
Payment for acquisitions | — | — | (2,438 | ) | ||||||||
Advances to and investments in subsidiaries, net | — | (1,438 | ) | (5,667 | ) | |||||||
Net cash provided by (used in) investing activities | (76 | ) | (1,805 | ) | (8,121 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Borrowings under credit facility | 6,862 | 37,963 | 10,869 | |||||||||
Repayments under credit facility | (6,862 | ) | (37,963 | ) | (21,325 | ) | ||||||
Payment for early extinguishment of credit facility | — | — | (563 | ) | ||||||||
Payment of deferred financing costs | — | — | (1,565 | ) | ||||||||
Proceeds from issuance of common stock, net | — | — | 19,116 | |||||||||
Purchase of restricted stock from employees | (600 | ) | (388 | ) | (71 | ) | ||||||
Net cash provided by (used in) financing activities | (600 | ) | (388 | ) | 6,461 | |||||||
Net (decrease) increase in cash and cash equivalents | (4,153 | ) | 7,204 | (4,718 | ) | |||||||
Cash and cash equivalents, beginning of the period | 13,628 | 6,424 | 11,142 | |||||||||
Cash and cash equivalents, end of the period | $ | 9,475 | $ | 13,628 | $ | 6,424 | ||||||
See notes to condensed financial statements. |
Column A | Column B | Column C | Column D | Column E | ||||||||||
Additions | ||||||||||||||
Balance at | Charged to | Balance at | ||||||||||||
Beginning | Costs/Expenses | End | ||||||||||||
Descriptions | of Period | (Recoveries) | Deductions | of Period | ||||||||||
Allowance for Doubtful Accounts (a) | ||||||||||||||
For the Year Ended December 31, 2012 | $ | 1,772 | (76 | ) | 529 | $ | 1,167 | |||||||
For the Year Ended December 31, 2011 | $ | 2,145 | 175 | 548 | $ | 1,772 | ||||||||
For the Year Ended December 31, 2010 | $ | 2,422 | 392 | 669 | $ | 2,145 | ||||||||
(a) | Included in the balances presented here are the allowances for doubtful accounts for the Company's discontinued operations. |
HUDSON GLOBAL, INC. | |||
(Registrant) | |||
By: | /s/ MANUEL MARQUEZ DORSCH | ||
Manuel Marquez Dorsch | |||
Chairman and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | February 26, 2013 |
Signature | Title | Date | ||
/s/ MANUEL MARQUEZ DORSCH | Chairman and Chief Executive Officer (Principal Executive Officer) | February 26, 2013 | ||
Manuel Marquez Dorsch | ||||
/s/ MARY JANE RAYMOND | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | February 26, 2013 | ||
Mary Jane Raymond | ||||
/s/ FRANK P. LANUTO | Senior Vice President, Corporate Controller (Principal Accounting Officer) | February 26, 2013 | ||
Frank P. Lanuto | ||||
/s/ ROBERT B. DUBNER | Director | February 26, 2013 | ||
Robert B. Dubner | ||||
/s/ JOHN J. HALEY | Director | February 26, 2013 | ||
John J. Haley | ||||
/s/ JENNIFER LAING | Director | February 26, 2013 | ||
Jennifer Laing | ||||
/s/ DAVID G. OFFENSEND | Director | February 26, 2013 | ||
David G. Offensend | ||||
/s/ RICHARD J. STOLZ | Director | February 26, 2013 | ||
Richard J. Stolz |
Exhibit Number | Exhibit Description | |
(3.1) | Amended and Restated Certificate of Incorporation of Hudson Global, Inc. (incorporated by reference to Exhibit 3.2 to Hudson Global, Inc.'s Current Report on Form 8-K dated April 26, 2012 (File No. 0-50129)). | |
(3.2) | Certificate of Designations of the Board of Directors Establishing the Series and Fixing the Relative Rights and Preferences of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated February 2, 2005 (File No. 0-50129)). | |
(3.3) | Amended and Restated By-laws of Hudson Global, Inc. (incorporated by reference to Exhibit 3.3 to Hudson Global, Inc.'s Current Report on Form 8-K dated April 26, 2012 (File No. 0-50129)). | |
(4.1) | Rights Agreement, dated as of February 2, 2005, between Hudson Global, Inc. and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A of Hudson Global, Inc. dated February 3, 2005 (File No. 0-50129)). | |
(4.2) | Loan and Security Agreement, dated as of August 5, 2010, by and among Hudson Global, Inc. and each of its subsidiaries that are signatories thereto, as Borrowers, the lenders that are signatories thereto, as Lenders, and RBS Citizens Business Capital, a division of RBS Asset Finance, Inc., as Agent (incorporated by reference to Exhibit 4.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated August 3, 2010 (File No. 0-50129)). | |
(4.3) | Facility Agreement, dated as of November 22, 2011, among Hudson Global Resources (Aust) Pty Limited, Hudson Global Resources (NZ) Limited, Hudson Highland (APAC) Pty Limited, Westpac Banking Corporation and Westpac New Zealand Limited (incorporated by reference to Exhibit 4.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated December 5, 2011 (File No. 0-50129)) | |
(4.4) | Amendment No. 1 to Loan and Security Agreement, dated as of February 22, 2012, by and among Hudson Global, Inc. and each of its subsidiaries that are signatories thereto, as Borrowers, the lenders that are signatories thereto, as Lenders, and RBS Citizens Business Capital, a division of RBS Asset Finance, Inc., as Agent (incorporated by reference to Exhibit 4.4 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-50129)). | |
(4.5) | Amendment No. 2 to Loan and Security Agreement, dated as of June 26, 2012, by and among Hudson Global, Inc. and each of its subsidiaries that are signatories thereto, as Borrowers, the lenders that are signatories thereto, as Lenders, and RBS Citizens Business Capital, a division of RBS Asset Finance, Inc., as Agent (incorporated by reference to Exhibit 99.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated June 26, 2012 (File No. 0-50129)). | |
(4.6) | Amendment No. 3 to Loan and Security Agreement, dated as of December 31, 2012, by and among Hudson Global, Inc. and each of its subsidiaries that are signatories thereto, as Borrowers, the lenders that are signatories thereto, as Lenders, and RBS Citizens Business Capital, a division of RBS Asset Finance, Inc., as Agent (incorporated by reference to Exhibit 4.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated December 31, 2012 (File No. 0-50129)). | |
(10.1)* | Hudson Global, Inc. Long Term Incentive Plan, as amended through October 29, 2007 (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 0-50129)). | |
(10.2)* | Form of Hudson Global, Inc. Long Term Incentive Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated May 1, 2007 (File No. 0-50129)). | |
(10.3)* | Form of Hudson Global, Inc. Long Term Incentive Plan Restricted Stock Award Agreement for share price vesting awards (incorporated by reference to Exhibit 10.2 to Hudson Global, Inc.'s Current Report on Form 8-K dated February 9, 2009 (File No. 0-50129)). | |
(10.4)* | Form of Hudson Global, Inc. Long Term Incentive Plan Stock Option Agreement (Employees) (incorporated by reference to Exhibit 10.4 to Hudson Global, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 0-50129)). | |
(10.5)* | Form of Hudson Global, Inc. Long Term Incentive Plan Stock Option Agreement (Directors) (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc. Current Report on Form 8-K dated May 11, 2006 (File No. 0-50129)). | |
(10.6)* | Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as Amended and Restated (incorporated by reference to Exhibit A to the Company's definitive proxy statement filed with the Securities Exchange Commission on Schedule 14A on March 16, 2012 (File No. 0-50129)). | |
(10.7)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Stock Option Agreement (Employees) for awards made prior to April 26, 2012 (incorporated by reference to Exhibit 4.2 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 7, 2009 (Reg. No. 333-161171)). |
(10.8)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Stock Option Agreement (Employees) for awards made on or after April 26, 2012 (incorporated by reference to Exhibit 4.2 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 1, 2012 (Reg. No. 333-182973)). | |
(10.9)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Stock Option Agreement (Directors) for awards made prior to April 26, 2012 (incorporated by reference to Exhibit 4.3 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 7, 2009 (Reg. No. 333-161171)). | |
(10.10)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Stock Option Agreement (Directors) for awards made on or after April 26, 2012 (incorporated by reference to Exhibit 4.3 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 1, 2012 (Reg. No. 333-182973)). | |
(10.11)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Restricted Stock Award Agreement for awards made prior to April 26, 2012 (incorporated by reference to Exhibit 4.6 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 7, 2009 (Reg. No. 333-161171)). | |
(10.12)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Restricted Stock Award Agreement for awards made on or after April 26, 2012 (incorporated by reference to Exhibit 4.4 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 1, 2012 (Reg. No. 333-182973)). | |
(10.13)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Restricted Stock Award Agreement for EBITDA and gross margin growth performance vesting awards made prior to April 26, 2012 (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated February 11, 2010 (File No. 0-50129)). | |
(10.14)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Restricted Stock Award Agreement for EBITDA and gross margin growth performance vesting awards made on or after April 26, 2012 (incorporated by reference to Exhibit 4.5 to Hudson Global, Inc.'s Registration Statement on Form S-8 dated August 1, 2012 (Reg. No. 333-182973)). | |
(10.15)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Restricted Stock Award Agreement for EBITDA and gross margin growth performance vesting awards with vesting also upon a termination without cause (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated February 14, 2011 (File No. 0-50129)). | |
(10.16)* | Form of Hudson Global, Inc. 2009 Incentive Stock and Awards Plan Restricted Stock Award Agreement for Take-Out Ratio, Employee Engagement Score and Cash Efficiency Score performance vesting awards (incorporated by reference to Exhibit 10.2 to Hudson Global, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (File No. 0-50129)). | |
(10.17)* | CEO Employment Agreement, dated as of March 7, 2011, between Hudson Global, Inc. and Manuel Marquez Dorsch (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc.'s Current Report on Form 8-K dated March 7, 2011 (File No. 0-50129)). | |
(10.18)* | Amendment to Employment Agreement, dated as of March 23, 2011, between Hudson Global, Inc. and Manuel Marquez Dorsch (incorporated by reference to Exhibit 10.1 to Hudson Global, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (File No. 0-50129)). | |
(10.19)* | Executive Employment Agreement, amended and restated effective as of March 1, 2009, between Hudson Global, Inc. and Margaretta R. Noonan (incorporated by reference to Exhibit 10.8 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 0-50129)). | |
(10.20)* | Executive Agreement, dated as of January 20, 2012, between Hudson Global, Inc. and Richard S. Gray (incorporated by reference to Exhibit 10.15 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-50129)). | |
(10.21)* | Executive Employment Agreement, amended and restated effective as of January 25, 2012, between Hudson Global, Inc. and Latham Williams (incorporated by reference to Exhibit 10.16 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-50129)). | |
(10.22)* | Executive Employment Agreement, amended and restated effective as of January 26, 2012, between Hudson Global, Inc. and Neil J. Funk (incorporated by reference to Exhibit 10.17 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-50129)). | |
(10.23)* | Executive Employment Agreement, amended and restated effective as of February 8, 2012, between Hudson Global, Inc. and Frank P. Lanuto (incorporated by reference to Exhibit 10.18 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-50129)). | |
(10.24)* | Executive Employment Agreement, amended and restated effective as of February 7, 2012, between Hudson Global, Inc. and Mary Jane Raymond (incorporated by reference to Exhibit 10.19 to Hudson Global, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 0-50129)). |
(10.25)* | Summary of Hudson Global, Inc. Compensation for Non-employee Members of the Board of Directors (incorporated by reference to Exhibit 10.3 to Hudson Global, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (File No. 0-50129)). | |
(10.26)* | Hudson Global, Inc. Amended and Restated Director Deferred Share Plan (incorporated by reference to Exhibit 10.4 to Hudson Global, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (File No. 0-50129)). | |
(21) | Subsidiaries of Hudson Global, Inc. | |
(23) | Consent of KPMG LLP. | |
(31.1) | Certification by Chairman and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act. | |
(31.2) | Certification by the Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act. | |
(32.1) | Certification of the Chairman and Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | |
(99.1) | Proxy Statement for the 2013 Annual Meeting of Stockholders [To be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after December 31, 2012; except to the extent specifically incorporated by reference, the Proxy Statement for the 2013 Annual Meeting of Stockholders shall not be deemed to be filed with the Securities and Exchange Commission as part of this Annual Report on Form 10-K.] | |
(101) | The following materials from Hudson Global, Inc’s Annual Report on Form 10-K for the year ended December 31, 2012 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the years ended December 31, 2012, 2011 and 2010, (ii) the Consolidated Balance Sheets as of December 31, 2012 and 2011, (iii) the Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010, (iv) the Consolidated Statement of Changes in Stockholders’ Equity for the years ended December 31, 2012, 2011 and 2010, and (v) Notes to Consolidated Financial Statements. | |
* | A management contract or compensatory plan or arrangement |
Subsidiary | State or jurisdiction of incorporation | Percentage owned | |||
Hudson Global Resources Management, Inc. | Pennsylvania | 100 | % | ||
Hudson Highland Group Holdings International, Inc. | Delaware | 100 | % | ||
James Botrie and Associates, Inc. | Canada | 100 | % | ||
Hudson Global Resources Limited | United Kingdom | 100 | % | ||
Hudson Global Resources (Aust) Pty Limited | Australia | 100 | % | ||
Hudson Global Resources (NZ) Ltd | New Zealand | 100 | % | ||
Hudson Global Resources S.A.S. | France | 100 | % | ||
Hudson Global Resources S.L. | Spain | 100 | % | ||
Hudson Global Resources Madrid S.L. | Spain | 100 | % | ||
HH Global Resources A.B. | Sweden | 100 | % | ||
Hudson Global Resources (Singapore) Pte Limited | Singapore | 100 | % | ||
Hudson Global Resources Hong Kong Limited | Hong Kong | 100 | % | ||
Hudson Recruitment Shanghai Limited | China | 100 | % | ||
Hudson Global Resources LLC | Ukraine | 100 | % | ||
Hudson Global Resources s.r.o | Czech Republic | 100 | % | ||
Hudson Global Resources Sp.Zo.O | Poland | 100 | % | ||
Hudson Global Resources s.r.o. | Slovakia | 100 | % | ||
Balance Ervaring op Projectbasis B.V. | Netherlands | 100 | % | ||
Hudson Belgium SA NV | Belgium | 100 | % | ||
Hudson Luxembourg S.A. | Luxembourg | 100 | % | ||
Hudson Europe BV | Netherlands | 100 | % | ||
Hudson Netherlands B.V. | Netherlands | 100 | % |
1. | I have reviewed this annual report on Form 10-K of Hudson Global, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | February 26, 2013 | /s/ MANUEL MARQUEZ DORSCH |
Manuel Marquez Dorsch | ||
Chairman and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Hudson Global, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | February 26, 2013 | /s/ MARY JANE RAYMOND |
Mary Jane Raymond | ||
Executive Vice President and Chief Financial Officer |
/s/ MANUEL MARQUEZ DORSCH | |
Manuel Marquez Dorsch | |
February 26, 2013 |
/s/ MARY JANE RAYMOND | |
Mary Jane Raymond | |
February 26, 2013 |
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SEGMENT AND GEOGRAPHIC DATA (Tables)
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Dec. 31, 2012
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information | For the years ended December 31, 2012, 2011 and 2010, the amounts and percentage of the Company’s total gross margin from the three reportable segments were as follows:
Accounts receivable, net and long-lived assets are the only significant assets separated by segment for internal reporting purposes.
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Revenue by geographic area | A summary of revenues for the years ended December 31, 2012, 2011 and 2010 and long-lived assets and net assets by geographic area as of December 31, 2012, 2011 and 2010 were as follows:
(b) Comprised of property and equipment and intangibles. Corporate assets are included in the United States. |
INCOME TAXES FIN 48 accruals (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits, excluding interest and penalties | $ 3,144 | $ 6,163 |
Accrued interest and penalties | 701 | 1,644 |
Total unrecognized tax benefits that would impact effective tax rate | $ 3,845 | $ 7,807 |
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2012
Key members of management
|
Dec. 31, 2012
Consultants and former owners of acquired businesses
Minimum
|
Dec. 31, 2012
Consultants and former owners of acquired businesses
Maximum
|
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Commitments And Contingencies [Line Items] | |||||
Usual length of consulting, employment and non-compete agreements | 1 year | 2 years | 5 years | ||
Asset retirement obligation: | |||||
Current portion of asset retirement obligations | $ 52 | $ 301 | |||
Non-current portion of asset retirement obligations | 2,769 | 2,507 | |||
Total asset retirement obligations | $ 2,821 | $ 2,808 |
INCOME TAXES Summary of Income Tax Contingency (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance at January 1, 2012 | $ 6,163 |
Additions based on tax positions related to the current year | 225 |
Additions for tax positions of prior years | 65 |
Reductions for tax positions of prior years | (2,868) |
Settlements | (83) |
Lapse of statute of limitations | (410) |
Currency Translation | 52 |
Balance at December 31, 2012 | $ 3,144 |
PROPERTY AND EQUIPMENT, NET Property and Equipment, Net (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Property, Plant and Equipment, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | Property and equipment are stated at cost. Depreciation is computed primarily using the straight line method over the following estimated useful lives:
As of December 31, 2012 and 2011, property and equipment, net were as follows:
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Schedule of capital leased assets | A summary of the Company’s equipment acquired under capital lease agreements was as follows:
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INCOME TAXES (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 24.00% | 32.90% | (50.10%) |
Effective income tax rate reconciliation, at federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
NOL not absorbed by former parent | $ 16,584 | ||
Operating Loss Carryforwards, Expiration Dates | 2032 | ||
NOL not reflected on DTA from Stock Compensation Expenses | 5,030 | ||
Expiration date for operating loss carryforward from foreign sunsidiaries | 2032 | ||
Operating Loss Carryforwards, Valuation Allowance | 132,524 | ||
Deferred Tax Assets, Valuation Allowance | 21,804 | ||
Significant change in unrecognized tax benefits is reasonably possible amount of unrecorded benefits | 200 | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound | 700 | ||
Domestic Tax Authority
|
|||
Operating Loss Carryforwards [Line Items] | |||
NOL Carryforward | 288,747 | ||
Operating Loss Carryforwards, Valuation Allowance | 109,724 | ||
Foreign Tax Authority
|
|||
Operating Loss Carryforwards [Line Items] | |||
NOL Carryforward | 108,271 | ||
Operating loss that can carryforward indefinitely from foreign subsidiaries | 95,936 | ||
Operating Loss Carryforwards, Valuation Allowance | 22,800 | ||
Foreign Tax Authority | 2013
|
|||
Operating Loss Carryforwards [Line Items] | |||
Operating loss subject to expiration in the next twelve months from foreign subsidiaries | $ 235 |
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT [Schedule] Notes to Condensed Financial Information of Registrant (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
Dec. 31, 2012
Parent Company
|
Dec. 31, 2011
Parent Company
|
Dec. 31, 2010
Parent Company
|
Dec. 31, 2012
Restricted Net Assets
Parent Company
|
|
Condensed Financial Statements, Captions [Line Items] | ||||||||
Stockholders' equity attributable to parent | $ 106,541 | $ 107,357 | $ 93,278 | $ 76,260 | $ 106,541 | $ 107,357 | $ 37,926 | |
Restricted net asset percentage | 25.00% | |||||||
Dividends received from subsidiaries | $ 6,255 | $ 4,515 | $ 3,123 |
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT [Schedule] Condensed Statement of Operations (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2012
|
Sep. 30, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Operating expenses: | |||||||||||
Depreciation and amortization | $ 6,438 | $ 6,251 | $ 8,184 | ||||||||
Business reorganization expenses | 7,782 | 720 | 1,694 | ||||||||
Operating income (loss) | 1,831 | (1,600) | (3,167) | (3,702) | 4,792 | 6,150 | 6,030 | 463 | (6,638) | 17,435 | (5,618) |
Other income (expense): | |||||||||||
Interest income (expense), net | (635) | (1,143) | (1,278) | ||||||||
Other income (expense), net | 254 | (44) | 4,500 | ||||||||
Fee for early extinguishment of credit facility | 0 | 0 | (563) | ||||||||
Income (loss) from continuing operations before provision for income taxes | (7,019) | 16,248 | (2,959) | ||||||||
Provision for (benefit from) income taxes | (1,684) | 5,339 | 1,482 | ||||||||
Income (loss) from continuing operations | (5,335) | 10,909 | (4,441) | ||||||||
Income (loss) from discontinued operations, net of income taxes | 0 | 0 | (244) | ||||||||
Net income (loss) | (343) | (2,165) | 394 | (3,221) | 3,309 | 3,382 | 4,224 | (6) | (5,335) | 10,909 | (4,685) |
Parent Company
|
|||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 18,272 | 19,860 | 18,848 | ||||||||
Depreciation and amortization | 641 | 595 | 152 | ||||||||
Business reorganization expenses | 359 | 0 | 0 | ||||||||
Operating income (loss) | (19,272) | (20,455) | (19,000) | ||||||||
Other income (expense): | |||||||||||
Interest income (expense), net | 43 | 28 | 3,084 | ||||||||
Other income (expense), net | 15,016 | 17,770 | 14,293 | ||||||||
Equity in earnings (losses) of subsidiaries, net of income taxes | (1,103) | 13,557 | (1,833) | ||||||||
Fee for early extinguishment of credit facility | 0 | 0 | (563) | ||||||||
Income (loss) from continuing operations before provision for income taxes | (5,316) | 10,900 | (4,019) | ||||||||
Provision for (benefit from) income taxes | 19 | (9) | 422 | ||||||||
Income (loss) from continuing operations | (5,335) | 10,909 | (4,441) | ||||||||
Income (loss) from discontinued operations, net of income taxes | 0 | 0 | (244) | ||||||||
Net income (loss) | $ (5,335) | $ 10,909 | $ (4,685) |
CREDIT AGREEMENTS (Details)
|
12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
Tranche
|
Feb. 01, 2012
Base rate revolving loan
Greater than or equal to 1.25:1.0
|
Feb. 01, 2012
Base rate revolving loan
Less than 1.25:1.0 but greater than or equal to 1.10:1.0
|
Feb. 01, 2012
Base rate revolving loan
Less than 1.10:1.0
|
Feb. 01, 2012
LIBOR Revolving Loans or Letter of Credit Obligations
Greater than or equal to 1.25:1.0
|
Feb. 01, 2012
LIBOR Revolving Loans or Letter of Credit Obligations
Less than 1.25:1.0 but greater than or equal to 1.10:1.0
|
Feb. 01, 2012
LIBOR Revolving Loans or Letter of Credit Obligations
Less than 1.10:1.0
|
Dec. 31, 2012
RBS Citizens Business Capital
USD ($)
|
Dec. 31, 2012
RBS Citizens Business Capital
Overdraft Facility
USD ($)
|
Aug. 05, 2010
RBS Citizens Business Capital
Overdraft Facility
USD ($)
|
Dec. 31, 2012
RBS Citizens Business Capital
Overdraft Facility
North American and U.K. Operations
USD ($)
|
Dec. 31, 2012
Westpac Bank
|
Dec. 31, 2012
Westpac Bank
Line of Credit [Member]
USD ($)
|
Dec. 31, 2012
Westpac Bank
Line of Credit [Member]
AUD
|
Dec. 31, 2012
Westpac Bank
Invoice Discounting Facility
USD ($)
|
Nov. 29, 2011
Westpac Bank
Invoice Discounting Facility
USD ($)
|
Nov. 29, 2011
Westpac Bank
Invoice Discounting Facility
AUD
|
Dec. 31, 2012
Westpac Bank
Invoice Discounting Facility
Bank Bill Rate
|
Dec. 31, 2012
Westpac Bank
Overdraft Facility
USD ($)
|
Nov. 29, 2011
Westpac Bank
Overdraft Facility
USD ($)
|
Nov. 29, 2011
Westpac Bank
Overdraft Facility
NZD
|
Dec. 31, 2012
Westpac Bank
Overdraft Facility
Commercial Lending Rate
|
Dec. 31, 2012
Westpac Bank
Financial Guarantee Facility
USD ($)
|
Nov. 29, 2011
Westpac Bank
Financial Guarantee Facility
USD ($)
|
Nov. 29, 2011
Westpac Bank
Financial Guarantee Facility
AUD
|
Dec. 31, 2012
Lending Arrangements Belgium, Netherlands, Singapore, and Mainland China Banks
Overdraft Facility
USD ($)
|
Dec. 31, 2012
Lending Arrangements Belgium Bank
Invoice Discounting Facility
|
Dec. 31, 2012
Lending Arrangements Netherlands and Belgium Banks
Overdraft Facility
EURIBOR
|
Dec. 31, 2012
Netherlands subsidiary
Lending Arrangements Netherlands Bank
Y
|
Dec. 31, 2012
Netherlands subsidiary
Lending Arrangements Netherlands Bank
Overdraft Facility
USD ($)
|
Dec. 31, 2012
Netherlands subsidiary
Lending Arrangements Netherlands Bank
Overdraft Facility
EUR (€)
|
Dec. 31, 2012
Belgium Subsidiary
Lending Arrangements Belgium Bank
|
Dec. 31, 2012
Belgium Subsidiary
Lending Arrangements Belgium Bank
Overdraft Facility
USD ($)
|
Dec. 31, 2012
Belgium Subsidiary
Lending Arrangements Belgium Bank
Overdraft Facility
EUR (€)
|
Dec. 31, 2012
Singapore Subsidiary
Overdraft Facility
Singapore Prime Rate
|
Dec. 31, 2012
Singapore Subsidiary
Lending Arrangements Singapore Bank
USD ($)
Y
|
Dec. 31, 2012
Singapore Subsidiary
Lending Arrangements Singapore Bank
SGD
|
Dec. 31, 2012
Singapore Subsidiary
Lending Arrangements Singapore Bank
Overdraft Facility
Singapore Prime Rate
|
Dec. 31, 2012
Mainland China Subsidiary
Lending Arrangements China Bank
USD ($)
Y
|
Dec. 31, 2012
Mainland China Subsidiary
Lending Arrangements China Bank
Overdraft Facility
|
Dec. 31, 2012
Mainland China Subsidiary
Lending Arrangements China Bank
Overdraft Facility
People's Republic of China Six Month Rate
|
Dec. 31, 2012
Amendment No. 2
RBS Citizens Business Capital
Overdraft Facility
|
Dec. 31, 2012
Amendment No. 3
RBS Citizens Business Capital
Overdraft Facility
USD ($)
|
Dec. 31, 2012
Amendment No. 3
Minimum
RBS Citizens Business Capital
Overdraft Facility
USD ($)
|
Dec. 31, 2012
Trigger Event
Amendment No. 3
RBS Citizens Business Capital
Overdraft Facility
|
|
Line of Credit Facility [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | $ 16,434,000 | 15,813,000 | $ 2,898,000 | 3,500,000 | $ 5,197,000 | 5,000,000 | $ 2,289,000 | € 1,734,000 | $ 1,320,000 | € 1,000,000 | $ 819,000 | 1,000,000 | $ 1,000,000 | |||||||||||||||||||||||||||||||
Line of credit facility, maximum borrowing capacity increased borrowing amount subject to certain conditions | 50,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Deferred financing costs | 1,457,000 | ||||||||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate increase | 1.25% | 1.50% | 1.75% | 2.25% | 2.50% | 2.75% | 0.75% | 0.83% | 1.75% | 2.00% | |||||||||||||||||||||||||||||||||||
Borrowing base | 29,012,000 | ||||||||||||||||||||||||||||||||||||||||||||
Minimum availability | (10,000,000) | 10,000,000 | 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||
Outstanding letters of credit | (2,099,000) | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted borrowing base | 16,913,000 | ||||||||||||||||||||||||||||||||||||||||||||
Less: outstanding borrowing | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Additional borrowing availability | 16,913,000 | 16,434,000 | 2,898,000 | ||||||||||||||||||||||||||||||||||||||||||
Interest rates on outstanding borrowing | 4.50% | 5.08% | 6.03% | 2.61% | 6.00% | 7.60% | |||||||||||||||||||||||||||||||||||||||
Line of credit facility, minimum excess availability | 1.1 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||
Earnings before interest, taxes, depreciation, and amortization | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Debt convenant, dividend restrictions | 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Debt covenant, business acquisition, cost of acquired entity, cash limit | 25,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Debt covenant, business acquisition, cost of acquired entity, noncash consideration limit | 25,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Debt covenant, disposition of assets, limit | 4,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Number of Tranches | 3 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.65% | 1.10% | |||||||||||||||||||||||||||||||||||||||||||
Borrowing capacity | 16,434,000 | 2,898,000 | |||||||||||||||||||||||||||||||||||||||||||
Financial guarantee capacity | 5,197,000 | ||||||||||||||||||||||||||||||||||||||||||||
Less: outstanding financial guarantee requested | (2,934,000) | ||||||||||||||||||||||||||||||||||||||||||||
Additional availability for financial guarantee | 2,263,000 | ||||||||||||||||||||||||||||||||||||||||||||
Interest rates on financial guarantee requested | 1.10% | ||||||||||||||||||||||||||||||||||||||||||||
Tangible net worth | 85.00% | 85.00% | |||||||||||||||||||||||||||||||||||||||||||
Minimum tangible net amount | 18,188,000 | 17,500,000 | |||||||||||||||||||||||||||||||||||||||||||
Fixed charges coverage ratio | 1.5 | 1.5 | |||||||||||||||||||||||||||||||||||||||||||
Maximum borrowing base ratio | 0.8 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||
Lending arrangement expiration | 1 | 1 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||
Terminated notice period | 90 days | 30 days | 15 days | ||||||||||||||||||||||||||||||||||||||||||
Line of credit facility, average outstanding amount | $ 1,140,000 | ||||||||||||||||||||||||||||||||||||||||||||
Debt, weighted average interest rate | 4.90% | ||||||||||||||||||||||||||||||||||||||||||||
Number of Consecutive Quarters, Fixed Coverage Ratio Trigger | 6 months |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
|
12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
|||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Unless otherwise stated, amounts are presented in United States of America (“U.S.”) dollars and all amounts are in thousands, except for number of shares and per share amounts. Certain prior year amounts have been reclassified to conform to the current period presentation. |
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Comparability of Prior Year Financial Data | Revision of Prior Period Balances During the fourth quarter of fiscal year 2012, the Company identified certain balances requiring correction in its consolidated financial statements that originated during the year ended December 31, 2003. The balances were isolated and limited to the reported balance of Cumulative Translation Adjustment “CTA” and include amounts principally for (i) the incorrect retention of CTA upon the substantial liquidation of two foreign subsidiaries; and (ii) the write-off of CTA in connection with the recording of goodwill impairment charges. The corrections, have been recorded in this Form 10-K as an adjustment to the January 1, 2010 opening balance in the Consolidated Statement of Changes in Stockholders' Equity and the December 31, 2011 Consolidated Balance Sheet as a decrease to Accumulated Other Comprehensive Income and a corresponding decrease to Accumulated Deficit for $15,598. The revision did not affect the Company's Consolidated Statements of Cash Flows or Consolidated Statements of Operations and Other Comprehensive Income (Loss) for any of the periods presented in this Form 10-K. The revision is not material to any previously issued financial statements. |
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Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions between and among the Company and its subsidiaries have been eliminated in consolidation. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, the disclosures about contingent assets and liabilities, and the reported amounts of revenue and expenses. Such estimates include the value of purchase consideration, allowances for doubtful accounts, insurance recovery receivable, goodwill, intangible assets, and other long-lived assets, legal reserve and provision, estimated self-insured liabilities, assumptions used in the fair value of stock-based compensation and the valuation of deferred tax assets. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates the estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates. Instability in the global credit markets, including the recent European economic and financial turmoil experienced in 2012 related to sovereign debt issues in certain countries, the instability in the geopolitical environment in many parts of the world and other factors may continue to put pressure on global economic conditions and may in turn impact the aforementioned estimates and assumptions. |
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Nature of Business and Credit Risk | Nature of Business and Credit Risk The Company's revenue is earned from professional placement services, mid-level employee professional staffing and temporary contracting services and human capital services. These services are provided to a large number of customers in many different industries. The Company operates throughout North America, the United Kingdom, Continental Europe, Australia, New Zealand and Asia. During 2012, no single client accounted for more than 10% of the Company's revenue. As of December 31, 2012, no single client accounted for more than 10% of the Company's outstanding accounts receivable. Financial instruments, which potentially subject the Company to concentrations of credit risk, are primarily cash and accounts receivable. The Company performs continuing credit evaluations of its customers and does not require collateral. The Company has not experienced significant losses related to receivables. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue for temporary services at the time services are provided and revenue is recorded on a time and materials basis. Temporary contracting revenue is reported on a gross basis when the Company acts as the principal in the transaction and is at risk for collection in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 605-45, “Overall Considerations of Reporting Revenue Gross as a Principal versus Net as an Agent”. The Company's revenues are derived from its gross billings, which are based on (i) the payroll cost of its worksite employees; and (ii) a markup computed as a percentage of the payroll cost. The Company recognizes revenue for permanent placements based on the nature of the fee arrangement. Revenue generated when the Company permanently places an individual with a client on a contingent basis is recorded at the time of acceptance of employment, net of an allowance for estimated fee reversals. Revenue generated when the Company permanently places an individual with a client on a retained basis is recorded ratably over the period services are rendered, net of an allowance for estimated fee reversals. The ASC 605-45-50-3 and ASC 605-45-50-4, “Taxes Collected from Customers and Remitted to Governmental Authorities” provide that the presentation of taxes on either a gross or net basis is an accounting policy decision. The Company collects various taxes assessed by governmental authorities and records these amounts on a net basis. |
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Operating Expenses | Operating Expenses Salaries and related expenses include the salaries, commissions, payroll taxes and employee benefits related to recruitment professionals, executive level employees, administrative staff and other employees of the Company who are not temporary contractors. Office and general expenses include occupancy, equipment leasing and maintenance, utilities, travel expenses, professional fees and provision for doubtful accounts. The Company expenses the costs of advertising as incurred. |
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Stock-Based Compensation | Stock-Based Compensation The Company applies the fair value recognition provisions of ASC 718 "Compensation - Stock Compensation". ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company determines the fair value as of the grant date. For awards with graded vesting conditions, the values of the awards are determined by valuing each tranche separately and expensing each tranche over the required service period. The service period is the period over which the related service is performed, which is generally the same as the vesting period. The Company records stock-based compensation expense net of estimated forfeitures. The Company estimates its forfeiture rate based on historical data such as stock option exercise activities and employee termination patterns. The Company analyzed its historical forfeiture rate, the remaining lives of unvested awards and the amount of vested awards as a percentage of total awards outstanding. If the Company's actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what was recorded in the current periods. For stock options, the Black-Scholes option pricing model considers, among other factors, the expected volatility of the Company's stock price, risk-free interest rates, dividend rate and the expected life of the award. Expected volatilities are calculated based on the historical volatility of the Company's common stock. Volatility is determined using historical prices to estimate the expected future fluctuations in the Company's share price. The risk-free interest rate is based on the U.S. Treasury, the term of which is consistent with the expected term of the option. The dividend rate is assumed to be zero as the Company has never paid dividends on its common stock and does not anticipate paying dividends in the foreseeable future. When the Company estimates the expected life of stock options, the Company determines its assumptions for the Black-Scholes option-pricing model in accordance with ASC 718 and SAB No. 107. Significant assumptions used in the valuation of stock options include: · The expected term of stock options is estimated using the simplified method since the Company currently does not have sufficient stock option exercise history. · The expected risk free interest rate is based on the U.S. Treasury constant maturity interest rate which term is consistent with the expected term of the stock options. · The expected volatility is based on the historic volatility. In December 2007, the Securities and Exchange Commission (“SEC”) staff issued SAB No. 110, “Certain Assumptions Used In Valuation Methods - Expected Term”. SAB No. 110 allows companies to continue to use the simplified method, as defined in SAB No. 107, to estimate the expected term of stock options under certain circumstances. The simplified method for estimating expected term uses the mid-point between the vesting term and the contractual term of the stock option. The Company has analyzed the circumstances in which the use of the simplified method is allowed. The Company has opted to use the simplified method for stock options the Company granted because management believes that the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. In accordance with ASC 718, the Company reflects the tax savings resulting from tax deductions in excess of income tax benefits as a financing cash flow in its Consolidated Statement of Cash Flows. |
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Income Taxes | Income Taxes Earnings from the Company's global operations are subject to tax in various jurisdictions both within and outside the United States. The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. This standard establishes financial accounting and reporting standards for the effects of income taxes that result from an enterprise's activities. It requires an asset and liability approach for financial accounting and reporting of income taxes. ASC 740-10-55-3 “Recognition and Measurement of Tax Positions - a Two Step Process” provides implementation guidance related to the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a two-step evaluation process for a tax position taken or expected to be taken in a tax return. The first step is recognition and the second is measurement. ASC 740 also provides guidance on derecognition, measurement, classification, disclosures, transition and accounting for interim periods. The Company provides tax reserves for U.S. Federal, state and local and international unrecognized tax benefits for all periods subject to audit. The development of reserves for these exposures requires judgments about tax issues, potential outcomes and timing, and is a subjective critical estimate. The Company assesses its tax positions and records tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances, and information available at the reporting dates. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a tax authority that has full knowledge of all relevant information. For those tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized. Although the outcome related to these exposures is uncertain, in management's opinion, adequate provisions for income taxes have been made for estimable potential liabilities emanating from these exposures. In certain circumstances, the ultimate outcome for exposures and risks involve significant uncertainties which render them inestimable. If actual outcomes differ materially from these estimates, including those that cannot be quantified, they could have material impact on the Company's results of operations. U.S. Federal income and foreign withholding taxes have not been provided on the undistributed earnings of foreign subsidiaries. The Company intends to reinvest these earnings in its foreign operations indefinitely, except where it is able to repatriate these earnings to the United States without a material incremental tax provision. The determination and estimation of the future income tax consequences in all relevant taxing jurisdictions involves the application of highly complex tax laws in the countries involved, particularly in the United States, and is based on the tax profile of the Company in the year of earnings repatriation. Accordingly, it is not practicable to determine the amount of tax associated with such undistributed earnings. |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) are computed by dividing the Company’s net income (loss) by the weighted average number of shares outstanding during the period. When the effects are not anti-dilutive, diluted earnings (loss) per share are computed by dividing the Company’s net income (loss) by the weighted average number of shares outstanding and the impact of all dilutive potential common shares, primarily stock options “in-the-money” and unvested restricted stock. The dilutive impact of stock options and unvested restricted stock is determined by applying the “treasury stock” method. Performance-based restricted stock awards are included in the computation of diluted earnings per share only to the extent that the underlying performance conditions: (i) are satisfied prior to the end of the reporting period, or (ii) would be satisfied if the end of the reporting period were the end of the related performance period and the result would be dilutive under the treasury stock method. Stock awards subject to vesting or exercisability based on the achievement of market conditions are included in the computation of diluted earnings per share only when the market conditions are met. Income (loss) per share calculations for each quarter include the weighted average effect for the quarter; therefore, the sum of quarterly income (loss) per share amounts may not equal year-to-date income (loss) per share amounts, which reflect the weighted average effect on a year-to-date basis. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate fair value because of the immediate or short-term maturity of these financial instruments. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents, which consist primarily of money market funds, are stated at cost, which approximates fair value. For financial statement presentation purposes, the Company considers all highly liquid investments having an original maturity of three months or less as cash equivalents. Outstanding checks in excess of cash account balances that are included in accounts payable on the accompanying Consolidated Balance Sheets were insignificant as of December 31, 2012 and 2011. |
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Accounts Receivable | Accounts Receivable The Company's accounts receivable balances are composed of trade and unbilled receivables. The Company maintains an allowance for doubtful accounts and makes ongoing estimates as to the ability to collect on the various receivables. If the Company determines that the allowance for doubtful accounts is not adequate to cover estimated losses, an expense to provide for doubtful accounts is recorded in office and general expenses. If an account is determined to be uncollectible, it is written off against the allowance for doubtful accounts. Management's assessment and judgment are vital requirements in assessing the ultimate realization of these receivables, including the current credit-worthiness, financial stability and effect of market conditions on each customer. |
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Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight line method over the following estimated useful lives:
Leasehold improvements are amortized over the shorter of their estimated useful lives or the lease term. The amortization periods of material leasehold improvements are estimated at the inception of the lease term. |
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Capitalized Software Costs | Capitalized Software Costs Capitalized software costs consist of costs to purchase and develop software for internal use. The Company capitalizes certain incurred software development costs in accordance with the ASC 350-40, “Intangibles Goodwill and Other: Internal-Use Software.” Costs incurred during the application-development stage for software purchased and further customized by outside vendors for the Company's use and software developed by a vendor for the Company's proprietary use have been capitalized. Costs incurred for the Company's own personnel who are directly associated with software development are capitalized as appropriate. Capitalized software costs are included in property and equipment. |
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Long-Lived Assets and Amortizable Intangibles | Long-Lived Assets and Amortizable Intangibles Intangible assets are amortized on a straight line basis over their estimated useful life. The Company evaluates the recoverability of the carrying value of its long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Under such circumstances, the Company assesses whether the projected undiscounted cash flows of its businesses are sufficient to recover the existing unamortized cost of its long-lived assets. If the undiscounted projected cash flows are not sufficient, the Company calculates the impairment amount by discounting the cash flows using its weighted average cost of capital. The amount of the impairment is written-off against earnings in the period in which the impairment has been determined in accordance with ASC 360-10-35, “Impairment or Disposal of Long-Lived Assets.” |
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Goodwill | Goodwill ASC 350-20-35 “Intangibles-Goodwill and Other, Goodwill Subsequent Measurement” requires that goodwill not be amortized but be tested for impairment on an annual basis, or more frequently if circumstances warrant. The Company tests goodwill for impairment annually as of October 1, or more frequently if circumstances indicate that its carrying value might exceed its current fair value. Per the provisions of ASC 350, the Company elects to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In the qualitative assessment, the Company considers events and circumstances such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and the trend of cash flows, other relevant company-specific events and the ''cushion'' between a reporting unit's fair value and carrying amount in the recent fair value calculation. If it is concluded that it is more likely than not that the fair value of a reporting unit is less than its carrying value, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. The Company tests goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. The Company's reporting units are the components within the reportable segments identified in Note 15. If the fair value of a reporting unit exceeds its carrying amount, the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. Step two compares the implied fair value of the reporting unit's goodwill with the current carrying amount of that goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, an impairment amount equal to the difference is recorded. |
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Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of the Company's international subsidiaries are determined using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each year-end. Statements of Operations accounts are translated at the average rate of exchange prevailing during each period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders' equity, other than translation adjustments on short-term intercompany balances, which are included in other income (expense). Gains and losses resulting from other foreign currency transactions are included in other income (expense). Intercompany receivable balances of a long-term investment nature are considered part of the Company's permanent investment in a foreign jurisdiction and the gains or losses on these balances are reported in other comprehensive income. |
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Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company's other comprehensive income (loss) is primarily comprised of foreign currency translation adjustments, which relate to investments that are permanent in nature, and changes in unrecognized pension and post-retirement benefit costs. To the extent that such amounts relate to investments that are permanent in nature, no adjustments for income taxes are made. |
INCOME TAXES Foreign and Domestic Income Before Tax (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ (400) | $ 6,313 | $ 1,821 |
Foreign | (6,619) | 9,935 | (4,780) |
Income (loss) from continuing operations before provision for income taxes | $ (7,019) | $ 16,248 | $ (2,959) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
|
12 Months Ended |
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Dec. 31, 2012
|
|
Furniture and equipment | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and equipment | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 8 years |
Capitalized software costs | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Capitalized software costs | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer equipment | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Computer equipment | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
SELECTED QUARTERLY FINANCIAL DATA Selected Quarterly Financial Data (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
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Sep. 30, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Revenue | $ 184,276 | $ 187,873 | $ 204,838 | $ 200,590 | $ 222,738 | $ 245,081 | $ 247,378 | $ 218,539 | $ 777,577 | [1] | $ 933,736 | [1] | $ 794,542 | [1] | ||
Gross margin | 66,925 | 67,666 | 77,068 | 73,208 | 84,648 | 92,992 | 95,467 | 81,198 | 284,867 | 354,305 | 298,573 | |||||
Operating income (loss) | 1,831 | (1,600) | (3,167) | (3,702) | 4,792 | 6,150 | 6,030 | 463 | (6,638) | 17,435 | (5,618) | |||||
Net income (loss) | $ (343) | $ (2,165) | $ 394 | $ (3,221) | $ 3,309 | $ 3,382 | $ 4,224 | $ (6) | $ (5,335) | $ 10,909 | $ (4,685) | |||||
Net income (loss) - basic (in dollars per share) | $ (0.01) | $ (0.07) | $ 0.01 | $ (0.10) | $ 0.10 | $ 0.11 | $ 0.13 | $ 0.00 | $ (0.17) | $ 0.35 | $ (0.16) | |||||
Net income (loss) - diluted (in dollars per share) | $ (0.01) | $ (0.07) | $ 0.01 | $ (0.10) | $ 0.10 | $ 0.11 | $ 0.13 | $ 0.00 | $ (0.17) | $ 0.34 | $ (0.16) | |||||
Weighted-average common stock outstanding - basic (in shares) | 32,169,000 | 32,156,000 | 32,122,000 | 31,765,000 | 31,639,000 | 31,620,000 | 31,593,000 | 31,325,000 | 32,060,000 | 31,566,000 | 29,931,000 | |||||
Weighted-average common stock outstanding - diluted (in shares) | 32,169,000 | 32,156,000 | 32,486,000 | 31,765,000 | 32,118,000 | 32,085,000 | 32,039,000 | 31,325,000 | 32,060,000 | 31,989,000 | 29,931,000 | |||||
Common stock equivalents and outstanding stock options excluded from the calculation of diluted earnings (loss) per share (in thousands) | 2,368,000 | 2,654,000 | 1,939,000 | 2,793,000 | 1,396,000 | 1,717,000 | 2,224,000 | 2,928,000 | 2,367,566 | 1,500,525 | 2,582,897 | |||||
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COMMITMENTS AND CONTINGENCIES (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum rental payments for operating leases | As of December 31, 2012, future minimum lease commitments under non-cancelable operating leases, which will be expensed as direct costs (for contractor project space) and office and general expenses, were as follows:
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Schedule of asset retirement obligations | The Company’s asset retirement obligations that are included in the Consolidated Balance Sheets as of December 31, 2012 and 2011 were as follows:
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INCOME TAXES Federal Statutory Income Tax Rate Reconciliation (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Income Tax Disclosure [Abstract] | |||
Provision for (benefit from) continuing operations at Federal statutory rate of 35% | $ (2,457) | $ 5,687 | $ (1,036) |
State income taxes, net of Federal income tax effect | (2,089) | 155 | (532) |
Change in valuation allowance | 2,545 | (3,284) | 2,970 |
Taxes related to foreign income | (2,505) | (112) | (467) |
Nondeductible expenses and others | 2,822 | 2,893 | 547 |
Provision for (benefit from) income taxes | $ (1,684) | $ 5,339 | $ 1,482 |
BUSINESS REORGANIZATION EXPENSES LEASE TERMINATION PAYMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | $ 7,782 | $ 720 | $ 1,694 |
Hudson Americas
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 1,007 | 0 | 307 |
Hudson Asia Pacific
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 1,285 | 0 | (15) |
Hudson Europe
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 5,131 | 720 | 1,402 |
Corporate
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 359 | 0 | 0 |
Lease Termination
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 3,283 | 708 | 1,464 |
Lease Termination | Hudson Americas
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 179 | 0 | 134 |
Lease Termination | Hudson Asia Pacific
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 613 | 0 | (18) |
Lease Termination | Hudson Europe
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | 2,491 | 708 | 1,348 |
Lease Termination | Corporate
|
|||
Restructuring Cost and Reserve [Line Items] | |||
Business reorganization expenses | $ 0 | $ 0 | $ 0 |
RESTRICTED CASH (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 2,164 | $ 3,641 |
Other assets
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 1,920 | 3,388 |
Other assets | Collateral accounts
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 619 | 3,120 |
Other assets | Rental deposits
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 1,301 | 268 |
Prepaid and other
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 244 | 253 |
Prepaid and other | Collateral accounts
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 0 | 117 |
Prepaid and other | Other
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 142 | 3 |
Prepaid and other | Client guarantees
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 102 | $ 133 |
STOCK-BASED COMPENSATION Restricted stock (Details) (Restricted stock, USD $)
In Thousands, except Share data, unless otherwise specified |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
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Restricted stock
|
||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance and service conditions (1) (2) | 566,830 | [1] | ||||
Vest 50% on each of the second and third anniversaries of the grant date with service conditions only | 35,000 | |||||
Immediately vested | 1,400 | |||||
Vest two-thirds on the second anniversary of the grant date and one-third on the third anniversary of the grant date with service conditions only | 20,000 | |||||
Vest one-third on each of the first three anniversaries of the grant date with service conditions only | 15,000 | |||||
Total shares of restricted stock granted for the year ended December 31, 2012 | 638,230 | |||||
Fifty percent of the shares of restricted stock may be earned on the basis of performance | 50.00% | |||||
Twenty five percent of the shares of restricted stock may be earned on the basis of performance as measured by an employee engagement score | 25.00% | |||||
Twenty five percent of the shares of restricted stock may be earned on the basis of performance as measured by Cash Efficiency | 25.00% | |||||
Thirty three percent of the shares vest on the later of the first anniversary of the grant date or the determination that the performance conditions have been satisfied | 33.00% | |||||
Thirty three percent of the shares vest on the second anniversary of the grant date | 33.00% | |||||
Thirty four percent of the shares vest on the third anniversary of the grant date | 34.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||||
Non-vested restricted stock (units) at January 1, weighted average grant date fair value | $ 5.12 | $ 3.64 | $ 2.70 | |||
Granted, weighted average grant date fair value | $ 4.59 | $ 6.22 | $ 4.56 | |||
Vested, weighted average grant date fair value | $ 4.86 | $ 4.09 | $ 4.33 | |||
Forfeited, weighted average grant date fair value | $ 5.26 | $ 3.86 | $ 3.19 | |||
Non-vested restricted stock (units) at December 31, weighted average grant date fair value | $ 4.87 | $ 5.12 | $ 3.64 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Unvested restricted stock (units) at January 1, number of shares of restricted stock (unit) | 1,166,082 | 953,037 | 531,083 | |||
Granted, number of share of restricted stock (units) | 638,230 | 743,625 | 597,732 | |||
Vested, number of share of restricted stock (units) | (461,200) | (295,065) | (111,112) | |||
Forfeited, number of share of restricted stock | (314,196) | (235,515) | (64,666) | |||
Unvested restricted stock (units) at December 31, number of shares of restricted stock (unit) | 1,028,916 | 1,166,082 | 953,037 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | $ 2,239 | $ 1,207 | $ 481 | |||
|
REVENUE, DIRECT COSTS AND GROSS MARGIN
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
|
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Revenue, Direct Costs and Gross Margin [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE, DIRECT COSTS AND GROSS MARGIN | REVENUE, DIRECT COSTS AND GROSS MARGIN The Company’s revenue, direct costs and gross margin were as follows:
|
PROPERTY AND EQUIPMENT, NET Property and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 72,256 | $ 75,928 |
Less: acccumulated depreciation and amortization | 52,206 | 58,090 |
Property and equipment, net | 20,050 | 17,838 |
Property plant and equipment, capital expenditure not yet placed in service | 778 | 1,137 |
Capital lease obligation, current | 467 | 420 |
Capital lease obligation, non-current | 324 | 720 |
Capital lease obligations incurred | 61 | 1,318 |
Noncash or part noncash acquisition, fixed assets acquired | 3,949 | |
Computer equipment
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 10,889 | 13,666 |
Furniture and equipment
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 7,840 | 9,692 |
Capitalized software costs
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 28,877 | 30,920 |
Leasehold and building improvements
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 24,650 | $ 21,650 |
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