HUDSON GLOBAL, INC. Q2 2016 EARNINGS CALL July 28, 2016
Forward-Looking Statements Please be advised that except for historical information, the comments made during this presentation and in these slides constitute forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the company's strategic direction, prospects and future results. Certain factors may cause actual results to differ materially from those contained in the forward- looking statements, including global economic fluctuations, risks related to fluctuations in our operating results, the ability of clients to terminate their relationship at anytime, competition, limited availability under our credit facilities and our ability to successfully achieve our strategic initiatives and the other risks discussed in our filings made with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this presentation. The company assumes no obligation, and expressly disclaims any obligation, to review or confirm analysts' expectations or estimates or to update any forward- looking statements, whether as a result of new information, future events or otherwise. 2
Q2 2016: Consolidated Financial Results $US in Millions, except EPS Q2 2016 Q2 2015 B+ / W- (2) Revenue - 8% $113.1 $122.7 - 4% CC (1 ) Gross Margin - 7% $46.8 $50.2 - 4% CC SG&A + 5% $47.6 $50.3 + 3% CC Adjusted EBITDA NM ($0.7) ($0.1) NM CC Net Income (Loss) - 123% ($3.1) $13.9 - 123% CC Basic and Diluted EPS ($0.09) $0.41 (1) CC represents constant currency variance. (2) B/W indicates whether the result was better (+) or worse (-) than the comparison period. (3) NM: Not meaningful 3
Q2 2016: Hudson Americas $US in Millions Q2 2016 Q2 2015 B+ / W- (1 ) Revenue - 64% $3.7 $10.2 Gross Margin - 37% $3.2 $5.1 SG&A + 40% $3.2 $5.3 Adjusted EBITDA + 82% ($0.0) ($0.2) Adjusted EBITDA, as a % of Revenue -1.2% -2.4% (1) B/W indicates whether the result was better (+) or worse (-) than the comparison period. 4
Q2 2016: Hudson Asia Pacific $US in Millions Q2 2016 Q2 2015 B+ / W- (2) Revenue + 8% $62.0 $57.4 + 13% CC (1 ) Gross Margin - 6% $22.4 $23.8 - 2% CC SG&A + 2% $21.2 $21.8 - 2% CC Adjusted EBITDA - 37% $1.3 $2.0 - 33% CC Adjusted EBITDA, as a % of Revenue 2.0% 3.5% (1) CC represents constant currency variance. (2) B/W indicates whether the result was better (+) or worse (-) than the comparison period. 5
Q2 2016: Hudson Europe $US in Millions Q2 2016 Q2 2015 B+ / W- (2) Revenue - 14% $47.4 $55.2 - 11% CC (1 ) Gross Margin - 0% $21.2 $21.3 + 2% CC SG&A + 7% $18.9 $20.3 + 5% CC Adjusted EBITDA + 121% $2.3 $1.0 + 116% CC Adjusted EBITDA, as a % of Revenue 4.9% 1.9% (1) CC represents constant currency variance. (2) B/W indicates whether the result was better (+) or worse (-) than the comparison period. 6
H1 2016: Consolidated Financial Results $US in Millions, except EPS H1 2016 H1 2015 B+ / W- (2) Revenue - 13% $214.3 $247.1 - 9% CC (1 ) Gross Margin - 10% $88.1 $98.1 - 7% CC SG&A + 11% $90.8 $101.9 + 8% CC Adjusted EBITDA + 28% ($2.7) ($3.8) + 25% CC Net Income (Loss) NM ($6.6) $7.0 NM Basic and Diluted EPS ($0.20) $0.21 (1) CC represents constant currency variance. (2) B/W indicates whether the result was better (+) or worse (-) than the comparison period. (3) NM: Not meaningful 7
H1 2016: Hudson Americas $US in Millions H1 2016 H1 2015 B+ / W- (1 ) Revenue - -65% $7.5 $21.2 Gross Margin - -33% $6.5 $9.7 SG&A + 41% $6.3 $10.8 Adjusted EBITDA + 119% $0.2 ($1.1) Adjusted EBITDA, as a % of Revenue 2.6% -5.0% (1) B/W indicates whether the result was better (+) or worse (-) than the comparison period. 8
H1 2016: Hudson Asia Pacific $US in Millions H1 2016 H1 2015 B+ / W- (2) Revenue + 2% $113.1 $110.5 + 8% CC (1 ) Gross Margin - 8% $41.2 $44.7 - 3% CC SG&A + 4% $40.1 $41.8 - 2% CC Adjusted EBITDA - 62% $1.1 $2.9 - 63% CC Adjusted EBITDA, as a % of Revenue 1.0% 2.6% (1) CC represents constant currency variance. (2) B/W indicates whether the result was better (+) or worse (-) than the comparison period. 9
H1 2016: Hudson Europe $US in Millions H1 2016 H1 2015 B+ / W- (2) Revenue - 19% $93.7 $115.4 - 15% CC (1 ) Gross Margin - 8% $40.4 $43.7 - 5% CC SG&A + 12% $37.6 $42.7 + 9% CC Adjusted EBITDA + 164% $2.8 $1.1 + 142% CC Adjusted EBITDA, as a % of Revenue 3.0% 0.9% (1) CC represents constant currency variance. (2) B/W indicates whether the result was better (+) or worse (-) than the comparison period. 10
Q2 2016: Reconciliation of Retained Revenue $US in Millions Reported Retained (1) Variance Constant Variance Constant Q2 2016 vs Q2 2015 Currency Q2 2016 vs Q2 2015 Currency Americas $ 3.7 -64.0% -64.0% $ 3.7 -7.5% -7.3% Asia Pacific 62.0 8.1% 13.0% 62.0 8.1% 13.0% Europe 47.4 -14.2% -10.7% 47.4 -9.1% -4.8% Total $ 113.1 -7.9% -4.2% $ 113.1 -0.3% 4.1% Retained revenue and gross margin and divested revenue and gross margin are non-GAAP terms (1) that management believes provide a better understanding of the underlying revenue and gross margin trends in the business following the divestitures in the second quarter of 2015. Divested revenue and gross margin includes such items attributable to the following businesses: the Americas IT staffing business, the Netherlands business, Ukraine, Czech Republic, Slovakia and Luxembourg. The non-GAAP financial measures do not replace the presentation of GAAP financial results and should only be used as a supplement to, not as a substitute for, Hudson’s financial results presented in accordance with GAAP. The above table provides a reconciliation of the non-GAAP financial measure used in its financial reporting to the most directly comparable GAAP financial measure. 11
Q2 2016: Reconciliation of Retained Gross Margin $US in Millions Reported Retained (1) Variance Constant Variance Constant Q2 2016 vs Q2 2015 Currency Q2 2016 vs Q2 2015 Currency Americas $ 3.2 -37.4% -37.3% $ 3.2 -8.3% -8.1% Asia Pacific 22.4 -5.9% -1.7% 22.4 -5.9% -1.7% Europe 21.2 -0.4% 1.7% 21.2 2.8% 5.2% Total $ 46.8 -6.7% -4.0% $ 46.8 -2.4% 0.7% Retained revenue and gross margin and divested revenue and gross margin are non-GAAP terms (1) that management believes provide a better understanding of the underlying revenue and gross margin trends in the business following the divestitures in the second quarter of 2015. Divested revenue and gross margin includes such items attributable to the following businesses: the Americas IT staffing business, the Netherlands business, Ukraine, Czech Republic, Slovakia and Luxembourg. The non-GAAP financial measures do not replace the presentation of GAAP financial results and should only be used as a supplement to, not as a substitute for, Hudson’s financial results presented in accordance with GAAP. The above table provides a reconciliation of the non-GAAP financial measure used in its financial reporting to the most directly comparable GAAP financial measure. 12
H1 2016: Reconciliation of Retained Revenue $US in Millions Reported Retained (1) Variance Constant Variance Constant H1 2016 vs H1 2015 Currency H1 2016 vs H1 2015 Currency Americas $ 7.5 -64.6% -64.5% $ 7.5 0.9% 1.2% Asia Pacific 113.1 2.3% 8.4% 113.1 2.3% 8.4% Europe 93.7 -18.8% -15.4% 93.7 -8.4% -4.1% Total $ 214.3 -13.3% -9.3% $ 214.3 -2.7% 2.3% Retained revenue and gross margin and divested revenue and gross margin are non-GAAP terms (1) that management believes provide a better understanding of the underlying revenue and gross margin trends in the business following the divestitures in the second quarter of 2015. Divested revenue and gross margin includes such items attributable to the following businesses: the Americas IT staffing business, the Netherlands business, Ukraine, Czech Republic, Slovakia and Luxembourg. The non-GAAP financial measures do not replace the presentation of GAAP financial results and should only be used as a supplement to, not as a substitute for, Hudson’s financial results presented in accordance with GAAP. The above table provides a reconciliation of the non-GAAP financial measure used in its financial reporting to the most directly comparable GAAP financial measure. 13
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