Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 23, 2022 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38704 | |
Entity Registrant Name | HUDSON GLOBAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 59-3547281 | |
Entity Address, Address Line One | 53 Forest Avenue | |
Entity Address, Address Line Two | Suite 102 | |
Entity Address, City or Town | Old Greenwich | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06870 | |
City Area Code | 203 | |
Local Phone Number | 409-5628 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,804,779 | |
Entity Central Index Key | 0001210708 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Common Stock, $0.001 par value | The NASDAQ Stock Market LLC | ||
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | HSON | |
Security Exchange Name | NASDAQ | |
Preferred Share Purchase Rights | The NASDAQ Stock Market LLC | ||
Title of 12(b) Security | Preferred Share Purchase Rights | |
Security Exchange Name | NASDAQ | |
No Trading Symbol Flag | true |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 51,917 | $ 34,461 |
Operating expenses: | ||
Direct contracting costs and reimbursed expenses | 26,344 | 21,743 |
Salaries and related | 18,261 | 10,590 |
Office and general | 2,431 | 1,624 |
Marketing and promotion | 955 | 376 |
Depreciation and amortization | 324 | 110 |
Total operating expenses | 48,315 | 34,443 |
Operating income | 3,602 | 18 |
Non-operating income (expense): | ||
Interest income, net | 2 | 10 |
Other income (expense), net | (49) | (53) |
Income (loss) before income taxes | 3,555 | (25) |
Provision for income taxes | 536 | 178 |
Net income (loss) | $ 3,019 | $ (203) |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ 1.02 | $ (0.07) |
Diluted (in dollars per share) | $ 0.97 | $ (0.07) |
Weighted-average shares outstanding: | ||
Basic (in shares) | 2,967 | 2,891 |
Diluted (in shares) | 3,117 | 2,891 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 3,019 | $ (203) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment, net of income taxes | 137 | (226) |
Total other comprehensive income (loss), net of income taxes | 137 | (226) |
Comprehensive income (loss) | $ 3,156 | $ (429) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 19,154 | $ 21,714 |
Accounts receivable, less allowance for doubtful accounts of $197 and $196, respectively | 28,924 | 25,748 |
Restricted cash, current | 173 | 222 |
Prepaid and other | 2,426 | 1,476 |
Total current assets | 50,677 | 49,160 |
Property and equipment, net of accumulated depreciation of $849 and $807, respectively | 422 | 371 |
Operating lease right-of-use assets | 1,110 | 477 |
Deferred tax assets, net | 1,471 | 1,345 |
Restricted cash | 195 | 177 |
Goodwill | 4,219 | 4,219 |
Intangible assets, net of accumulated amortization of $809 and $532, respectively | 5,211 | 5,488 |
Other assets | 5 | 5 |
Total assets | 63,310 | 61,242 |
Current liabilities: | ||
Accounts payable | 1,062 | 871 |
Accrued salaries, commissions, and benefits | 8,251 | 10,961 |
Accrued expenses and other current liabilities | 7,606 | 6,748 |
Note payable – short term | 750 | 750 |
Operating lease obligations, current | 521 | 363 |
Total current liabilities | 18,190 | 19,693 |
Income tax payable | 77 | 470 |
Operating lease obligations | 599 | 118 |
Note payable – long term | 1,250 | 1,250 |
Other liabilities | 402 | 395 |
Total liabilities | 20,518 | 21,926 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 10,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.001 par value, 20,000 shares authorized; 3,799 and 3,694 shares issued; 2,805 and 2,707 shares outstanding, respectively | 4 | 4 |
Additional paid-in capital | 489,795 | 489,249 |
Accumulated deficit | (431,504) | (434,523) |
Accumulated other comprehensive income (loss), net of applicable tax | 52 | (85) |
Treasury stock, 994 and 987 shares, respectively, at cost | (15,555) | (15,329) |
Total stockholders' equity | 42,792 | 39,316 |
Total liabilities and stockholders' equity | $ 63,310 | $ 61,242 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 197 | $ 196 |
Property and equipment, accumulated depreciation | 849 | 807 |
Intangibles assets, accumulated amortization | $ (809) | $ (532) |
Preferred stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued (in shares) | 3,799,000 | 3,694,000 |
Common stock, shares, outstanding (in shares) | 2,805,000 | 2,707,000 |
Treasury stock, shares (in shares) | 994,000 | 987,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,019 | $ (203) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 324 | 110 |
Provision for doubtful accounts | 9 | 0 |
Benefit from deferred income taxes | (84) | (70) |
Stock-based compensation | 546 | 302 |
Changes in operating assets and liabilities, net of effect of dispositions: | ||
Increase in accounts receivable | (2,981) | (3,813) |
Increase in prepaid and other assets | (955) | (22) |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (2,264) | 1,284 |
Net cash used in operating activities | (2,386) | (2,412) |
Cash flows from investing activities: | ||
Capital expenditures | (93) | (40) |
Net cash used in investing activities | (93) | (40) |
Cash flows from financing activities: | ||
Purchase of restricted stock from employees | (226) | 0 |
Net cash used in financing activities | (226) | 0 |
Effect of exchange rates on cash, cash equivalents and restricted cash | 114 | (156) |
Net decrease in cash, cash equivalents and restricted cash | (2,591) | (2,608) |
Cash, cash equivalents, and restricted cash, beginning of the period | 22,113 | 26,199 |
Cash, cash equivalents, and restricted cash, end of the period | 19,522 | 23,591 |
Supplemental disclosures of cash flow information: | ||
Cash received during the period for interest | 3 | 10 |
Net cash payments during the period for income taxes | 867 | 299 |
Cash paid for amounts included in operating lease liabilities | 124 | 112 |
Supplemental non-cash disclosures: | ||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 772 | $ 611 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common stock and additional paid-in capital | Treasury Stock | Accumulated other comprehensive income (loss) | Retained Earnings |
Beginning Balance (in shares) at Dec. 31, 2020 | 2,685 | 3,672 | |||
Beginning Balance (in shares) at Dec. 31, 2020 | (987) | ||||
Beginning Balance at Dec. 31, 2020 | $ 34,280 | $ 486,829 | $ (15,325) | $ 526 | $ (437,750) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (in shares) | 3 | ||||
Stock-based compensation | $ 302 | ||||
Purchase of treasury stock (in shares) | 0 | ||||
Purchase of treasury stock | $ (2) | ||||
Purchase of restricted stock from employees (in shares) | 0 | ||||
Purchase of restricted stock from employees | $ 0 | ||||
Other comprehensive income (loss) | (226) | ||||
Net income (loss) | $ (203) | (203) | |||
Ending Balance (in shares) at Mar. 31, 2021 | 2,688 | 3,675 | |||
Ending Balance (in shares) at Mar. 31, 2021 | (987) | ||||
Ending Balance at Mar. 31, 2021 | $ 34,151 | $ 487,131 | $ (15,327) | 300 | (437,953) |
Beginning Balance (in shares) at Dec. 31, 2021 | 2,707 | 3,694 | |||
Beginning Balance (in shares) at Dec. 31, 2021 | 987 | (987) | |||
Beginning Balance at Dec. 31, 2021 | $ 39,316 | $ 489,253 | $ (15,329) | (85) | (434,523) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (in shares) | 105 | ||||
Stock-based compensation | $ 546 | ||||
Purchase of treasury stock (in shares) | 0 | ||||
Purchase of treasury stock | $ 0 | ||||
Purchase of restricted stock from employees (in shares) | (7) | ||||
Purchase of restricted stock from employees | $ (226) | ||||
Other comprehensive income (loss) | 137 | ||||
Net income (loss) | $ 3,019 | 3,019 | |||
Ending Balance (in shares) at Mar. 31, 2022 | 2,805 | 3,799 | |||
Ending Balance (in shares) at Mar. 31, 2022 | 994 | (994) | |||
Ending Balance at Mar. 31, 2022 | $ 42,792 | $ 489,799 | $ (15,555) | $ 52 | $ (431,504) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION These interim unaudited condensed consolidated financial statements have been prepared in accordance with United States of America (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting and should be read in conjunction with the consolidated financial statements and related notes of Hudson Global, Inc. and its subsidiaries (the “Company”) filed in its Annual Report on Form 10-K for the year ended December 31, 2021. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of operating revenues and expenses. These estimates are based on management’s knowledge and judgments. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results of operations for the full year. The condensed consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. Intra-entity balances and transactions between and among the Company and its subsidiaries have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation with no material impact on the condensed consolidated financial statements. For more information, see Note 2 to the Condensed Consolidated Financial Statements. |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2022 | |
Description of Business [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS The Company is comprised of the operations, assets, and liabilities of the Company’s three regional businesses: the Americas, Asia Pacific, and Europe. The Company provides Recruitment Process Outsourcing (“RPO”) permanent recruitment and contracting outsourced recruitment solutions. These services are tailored to the individual needs of primarily mid-to-large-cap multinational companies. The Company’s RPO delivery teams utilize state-of-the-art recruitment process methodologies and project management expertise in their flexible, turnkey solutions to meet clients’ ongoing business needs. The Company’s RPO services include complete recruitment outsourcing, project-based outsourcing, contingent workforce solutions, and recruitment consulting. On October 29, 2021, Hudson completed the acquisition of Karani, LLC, a Chicago-headquartered recruiting services provider that primarily serves U.S.-based customers from its operations in India and the Philippines. Karani, LLC partners with recruitment and staffing firms to assist with recruiting, sourcing, screening, onboarding, and other talent-related services across a variety of industries. This acquisition has enhanced the Company’s global delivery capability by adding a substantial presence in India and the Philippines, fostering business in new markets, and further developing the Company’s technology recruitment capabilities. On October 1, 2020, the Company completed its acquisition of Coit Staffing, Inc., which expanded its presence in the technology sector and established a Technology Group located in San Francisco. In addition to providing RPO services to clients in the tech sector, the Technology Group operates jointly with the Company’s existing teams in the Americas, Asia Pacific, and Europe to provide continuous access to knowledge regarding new and emerging technologies in the RPO, Managed Solutions Provider, and Total Talent Solutions space, enabling the Company to better serve its clients around the world. The Company operates directly in fourteen countries with three reportable geographic business segments: Americas, Asia Pacific, and Europe. See Note 13 to the Condensed Consolidated Financial Statements for further details regarding the reportable segments. In December 2019, a novel strain of coronavirus, referred to as COVID-19, was reported. On March 11, 2020, the World Health Organization declared the outbreak to be a pandemic, based on the rapid increase in exposure globally. Many countries around the world have imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus. COVID-19 continues to have an impact around the world and presents risks to the Company, which the Company is unable to fully evaluate or foresee at the current time. However, the Company is vigilantly monitoring the business environment surrounding COVID-19 and continues to proactively address this situation as it evolves. The Company believes it can continue |
ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
ACCOUNTING PRONOUNCEMENTS | ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Pronouncements On January 1, 2021, the Company adopted Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (“Topic 740”): Simplifying the Accounting for Income Taxes”. The standard simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also clarifies and amends existing guidance to improve consistent application. For public business entities, this standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Recent Accounting Standard Update Not Yet Adopted |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Nature of Services We account for a contract when both parties to the contract have approved the contract, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Revenues are recognized over time, using an input or output method, as the control of the promised services is transferred to the client in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The majority of our contracts are short-term in nature as they include termination clauses that allow either party to cancel within a short termination period, without cause. Revenue includes billable travel and other reimbursable costs and is reported net of sales or use taxes collected from clients and remitted to taxing authorities. We generally determine standalone selling prices based on the prices included in our client contracts, using expected cost plus profit, or other observable prices. The price as specified in our client contracts is generally considered the standalone selling price as it is an observable input that depicts the price as if sold to a similar client in similar circumstances. Certain client contracts have variable consideration, including usage-based fees that increase the transaction price and volume rebates or other similar items that generally reduce the transaction price. We estimate variable consideration using the expected value method based on the terms of the client contract and historical evidence. These amounts may be constrained and are only included in revenue to the extent we do not expect a significant reversal when the uncertainty associated with the variable consideration is resolved. Our estimated amounts of variable consideration subject to constraints are not material and we do not believe that there will be significant changes to our estimates. We record accounts receivable when our right to consideration becomes unconditional. Contract assets primarily relate to our rights to consideration for services provided that such rights to consideration are conditional on satisfaction of future performance obligations. A contract liability for deferred revenue is recorded when consideration is received, or is unconditionally due, from a client prior to transferring control of services to the client under the terms of a contract. Deferred revenue balances typically result from advance payments received from clients prior to transferring control of services. Other than deferred revenue, we do not have any material contract assets or liabilities as of and for the three months ended March 31, 2022 and 2021. As of March 31, 2022 and December 31, 2021, deferred revenue was $318 and $533, respectively. Payment terms vary by client and the services offered. We consider payment terms that exceed one year to be extended payment terms. Substantially all of the Company’s contracts include payment terms of 90 days or less, and we do not extend payment terms beyond one year. We primarily record revenue on a gross basis in the Consolidated Statements of Operations and Comprehensive Income based upon the following key factors: • We maintain the direct contractual relationship with the client and are responsible for fulfilling the service promised to the client. • We maintain control over our contractors while the services to the client are being performed, including our contractors’ billing rates, and are ultimately responsible for paying them. RPO Recruitment. We provide complete recruitment outsourcing, project-based outsourcing, and recruitment consulting for clients’ permanent staff hires. We recognize revenue for our RPO recruitment over time in an amount that reflects the consideration we expect to be entitled to and have an enforceable right to payment in exchange for our services. The client simultaneously receives and consumes the benefits of the services as they are provided. The transaction prices contain both fixed fees and variable consideration. Variable consideration is constrained by candidates accepting offers of permanent employment. We recognize revenue on fixed fees as the performance obligations are satisfied and variable fees as the constraint is lifted. We do not incur incremental costs to obtain our RPO recruitment contracts. The costs to fulfill these contracts are expensed as incurred. We recognize permanent placement revenue when employment candidates accept offers of permanent employment. We have a substantial history of estimating the financial impact of permanent placement candidates who do not remain with our clients through a guarantee period. Fees to clients are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement services are charged to employment candidates. Contracting. We provide RPO clients with a range of outsourced professional contract staffing services and managed service provider services, sometimes offered on a standalone basis and sometimes offered as part of a blended total talent solution. We recognize revenue for our contracting services over time as services are performed in an amount that reflects the consideration we expect to be entitled to and have an enforceable right to payment in exchange for our services, which is generally calculated as hours worked multiplied by the agreed-upon hourly bill rate. The client simultaneously receives and consumes the benefits of the services as they are provided. We do not incur incremental costs to obtain our contracting contracts. The costs incurred to fulfill these contracts are expensed as incurred. In the first quarter of 2022, one contracting customer ended its agreement with the Company. For the full year ended December 31, 2021, the contracting customer had revenue of $44,888, or 27% of the Company's revenue, which is reported as revenue in the Company’s Condensed Consolidated Statements of Operations, and Direct contracting costs and reimbursed expenses of $43,980, which is reported as Direct contracting costs and reimbursed expenses in the Company’s Condensed Consolidated Statements of Operations. Revenue less direct contracting costs and reimbursed expenses for this customer was $908, or 1% of the Company's total revenue less direct contracting costs and reimbursed expenses of $68,157, for the full year ended December 31, 2021. The Company does not believe that the loss of this customer will have a material adverse impact on the Company and its subsidiaries. Unsatisfied performance obligations. As a practical expedient, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an expected original duration of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Disaggregation of Revenue The following table presents our disaggregated revenues by revenue source. For additional information on the revenues by geographical segment, see Note 13 to the Condensed Consolidated Financial Statements. Three Months Ended March 31, 2022 2021 RPO Recruitment $ 25,260 $ 12,386 Contracting 26,657 22,075 Total Revenue $ 51,917 $ 34,461 |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
ACQUISITION | ACQUISITION Karani, LLC On October 29, 2021, the Company entered into a membership interest purchase agreement (the “MIPA”) by and among the Company, Hudson Global Resources Management, Inc. (“HGRM”), a wholly owned subsidiary of the Company, and Daniel Williams (“Williams”), and completed the acquisition (the “Karani Acquisition”) by HGRM of all of the membership interests of Karani, LLC, a Delaware limited liability company. Karani, LLC partners with recruitment and staffing firms to assist with recruiting, sourcing, screening, onboarding, and other talent-related services across a variety of industries to customers primarily located in the United States. On the date of acquisition, Karani, LLC had approximately 560 employees in India and 120 employees in the Philippines. As outlined in the MIPA, Williams received (i) $6,805 in cash subject to certain adjustments set forth in the MIPA at the closing of the Karani Acquisition; and (ii) a non-interest bearing promissory note in the aggregate principal amount of $2,000, payable in installments on the six-month and eighteen-month anniversaries of the closing date subject to the satisfaction of certain conditions as further described in the MIPA. There are no employment stipulations for Williams associated with the MIPA. The Karani Acquisition was accounted for as a business combination under the acquisition method of accounting. Th e purchase price of $8,673, which consists of the amount paid in cash of $6,805, a promissory note of $2,000, and a working capital credit of $132, was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date of October 29, 2021, with the excess recorded as goodwill. The purchase price included $737 of cash and cash equivalents acquired. The Company incurred transaction costs related to the acquisition of approximately $200 that were expensed as part of Office and general on the Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In addition to the purchase price, Hudson agreed to pay a $250 retention payment to the Chief Financial Officer of Karani, LLC, which is classified as compensation expense, recorded on a straight-line basis. The Company’s Consolidated Statements of Operations for the three months ended March 31, 2022 included external revenue of $2,568 and net income of $235, from the acquired company. Below is a summary of the fair value of the net assets acquired on the acquisition date based on external valuations at the date of acquisition. Fair Value Assets Acquired: Cash and cash equivalents $ 737 Accounts receivable 1,521 Restricted cash, current 50 Prepaid expenses and other assets 177 Property and equipment 119 Operating lease right-of-use assets 100 Restricted cash 3 Other long-term assets 19 Intangible assets 4,540 Goodwill 2,131 Assets Acquired $ 9,397 Liabilities Assumed: Accrued expenses and other current liabilities $ 436 Operating lease obligations, current 88 Operating lease obligations, non current 12 Other long-term liabilities 188 Liabilities Assumed $ 724 Fair value of assets acquired and consideration transferred $ 8,673 Intangible assets are amortized on a straight-line basis over their estimated useful lives. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives on the date of acquisition. Fair Value Useful Life Developed technology $ 640 3 years Customer lists 2,800 6 years Trade name 1,100 10 years Total identifiable assets $ 4,540 Unaudited Pro Forma Financial Information The following unaudited consolidated pro forma information gives effect to the acquisition of Karani, LLC as if the transaction had occurred on January 1, 2021. Three Months Ended March 31, 2021 Revenue $ 36,152 Net loss $ (228) The unaudited pro forma supplemental information provided above is based on estimates and assumptions that the Company believes are reasonable, and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets for the three months ended March 31, 2021. This supplemental pro forma information has been prepared for comparative purposes and is not intended to reflect what would have occurred had the Karani Acquisition taken place on January 1, 2021. Coit Staffing, Inc. On October 1, 2020, the Company, entered into an asset purchase agreement (the “APA”) by and among the Company, Hudson Coit, Inc. (“Buyer”), a wholly-owned subsidiary of the Company, Coit Staffing, Inc. (“Seller”), Joe Belluomini, and Tim Farrelly (together with Mr. Belluomini, the “Principals”) and completed the acquisition by Buyer of substantially all of the assets used in the business of the Seller, as set forth in the APA (the “Coit Acquisition”). Per the terms of the APA, the Seller received (i) $3,997 in cash subject to certain adjustments set forth in the APA at the closing of the Coit Acquisition; (ii) a promissory note in the aggregate principal amount of $1,350 , payable in annual installments of $450 per year on the first, second, and third anniversaries of the closing; (iii) $500 in shares of the Company’s common stock, with the amount of such shares to be determined by dividing $500 by the weighted average price of the Company’s common stock for the five trading days prior to the closing date, to be issued in three equal installments on each of the 10-month, 20-month, and 30-month anniversaries of the closing date; and (iv) earn-out payments not to exceed $1,500 and $2,030 in the years ended December 31, 2021 and 2022, respectively, based upon the achievement of certain performance thresholds in those years. In addition, the Principals each entered into employment agreements with the Company for a term of two years. The Coit Acquisition was accounted for as a business combination under the acquisition method of accounting. Th e purchase price consists of the amount paid in cash of $3,997, which was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date of October 1, 2020, with the excess recorded as goodwill. The Company incurred transaction costs related to the acquisition of $436 that were expensed as part of Office and general on the Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The promissory note and shares of the Company’s common stock to be paid to the Seller as outlined in the APA are tied to the continuing employment of the Principals at the Company, and therefore have been accounted for as compensation expense. This compensation expense is recorded on a straight-line basis under the assumption that the Principals will remain employed by the Company, and therefore that the note will be paid in full and the shares will be issued. For the three months ended March 31, 2022 and 2021, the Company recognized $42 and $90, respectively in stock-based compensation associated with the 52,226 restricted shares of common stock which were issued over 30 months (see Note 6 to the Condensed Consolidated Financial Statements). In addition, in the three months ended March 31, 2022, the Company recognized expense of $112 related to the promissory note, and $508 related to earn-out payments. For the three months ended March 31, 2021, the Company recognized expense of $91 related to the promissory note, and $200 related to earn-out payments . The amount due associated with the promissory note payable to the Principals is reflected in Accrued salaries, commissions, and benefits on the Condensed Consolidated Balance Sheets. The compensation expense recognized of $662 and $381 for the three months ended March 31, 2022 and 2021, respectively, is reflected in Salaries and related expenses on the Condensed Consolidated Statements of Operations. The Company’s Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 included revenue of $5,982, and $1,316, respectively, and net income of $1,259 and net loss of $334, respectively, from the acquired company. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Incentive Compensation Plan The Company maintains the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended and restated on May 24, 2016 and further amended on September 14, 2020 (the “ISAP”), pursuant to which it can issue equity-based compensation incentives to eligible participants. The ISAP permits the granting of stock options, restricted stock, restricted stock units, and other types of equity-based awards. The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) will establish such conditions as it deems appropriate on the granting or vesting of stock options, restricted stock, restricted stock units, and other types of equity-based awards. As determined by the Compensation Committee, equity awards also may be subject to immediate vesting upon the occurrence of certain events following a change in control of the Company. The Company primarily grants restricted stock and restricted stock units to its employees. A restricted stock unit is equivalent to one share of the Company’s common stock and is payable only in common stock of the Company issued under the ISAP. The Compensation Committee administers the ISAP and may designate any of the following as a participant under the ISAP: any officer or other employee of the Company or its affiliates or individuals engaged to become an officer or employee; consultants or other independent contractors who provide services to the Company or its affiliates; and non-employee directors of the Company. The Company has included an amendment to the ISAP in its proxy statement for its 2022 Annual Meeting of Stockholders to increase the number of shares of the Company's common stock that are reserved for issuance by 250,000 shares. As of March 31, 2022, there were 24,690 shares of the Company’s common stock available for future issuance under the ISAP. All share issuances related to stock compensation plans are issued from the aforementioned stock available for future issuance under stockholder approved compensation plan. In the first quarter of 2021, the Company granted restricted stock units subject to performance vesting conditions for the years ended December 31, 2021 and December 31, 2020 of 73,596 and 53,075, respectively. In addition, in the first quarter of 2021, the Company granted 25,500 of discretionary time-vested stock units to certain employees that were not subject to performance conditions. For three months ended March 31, 2022, the Company granted 20,667 restricted stock units subject to performance vesting conditions. The Compensation Committee approved the grant of additional restricted stock units to executives of the Company, subject to approval of the amendment to the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended (the “Plan”), to increase the number of shares of the Company’s common stock issuable under the Plan by the Company’s stockholders at the Company’s 2022 Annual Meeting of Stockholders. A summary of the quantity and vesting conditions for stock-based units granted to the Company's employees for the three months ended March 31, 2022 was as follows: Vesting conditions Number of Restricted Stock Units Granted Performance and service conditions - Type 1 (1) (2) 15,667 Performance and service conditions - Type 2 (1) (2) 5,000 Total shares of stock award granted 20,667 (1) For grants to Corporate office employees subject to 2022 performance conditions, 100% of the restricted stock units may be earned on the basis of performance as measured by a “group adjusted EBITDA”. (2) To the extent restricted stock units are earned, such restricted stock units will vest on the basis of service as follows: (a) 33% and 66.6% for Type 1 and Type 2, respectively, of the restricted stock units will vest on the first anniversary of the grant date; (b) 33% and 16.7% for Type 1 and Type 2, respectively, of the restricted stock units will vest on the second anniversary of the grant date; and (c) 34% and 16.7% for Type 1 and Type 2, respectively, of the restricted stock units will vest on the third anniversary of the grant date; provided that, in each case, the employee remains employed by the Company from the grant date through the applicable service vesting date. The Company also maintains the Director Deferred Share Plan (the “Director Plan”) as part of the ISAP pursuant to which it can issue restricted stock units to its non-employee directors. A restricted stock unit is equivalent to one share of the Company’s common stock and is payable only in common stock issued under the ISAP upon a director ceasing service as a member of the Company's Board. The restricted stock units vest immediately upon grant and are credited to each of the non-employee director's retirement accounts under the Director Plan. Restricted stock units issued under the Director Plan contain the right to a dividend equivalent award in the form of additional restricted stock units. The dividend equivalent award is calculated using the same rate as the cash dividend paid on a share of the Company ’ s common stock, and then divided by the closing price of the Company’s common stock on the date the dividend is paid to determine the number of additional restricted stock units to grant. Dividend equivalent awards have the same vesting terms as the underlying awards. During the three months ended March 31, 2022, the Company granted 1,352 restricted stock units to its non-employee directors pursuant to the Director Plan. As of March 31, 2022, 212,287 restricted stock units are deferred under the Company’s ISAP. On October 1, 2020, the Company granted 52,226 restricted shares of common stock to be issued over 30 months in connection with the acquisition of Coit Staffing, Inc. Accordingly, for the three months ended March 31, 2022 and 2021, the Company recognized $42 and $90 in stock-based compensation. See Note 5 for additional information. For the three months ended March 31, 2022 and 2021, the Company’s stock-based compensation expense related to restricted stock units and restricted shares of common stock were as follows: Three Months Ended March 31, 2022 2021 Restricted shares of common stock (see Note 5) $ 42 $ 90 Restricted stock units 504 212 Total $ 546 $ 302 Restricted Stock Units As of March 31, 2022, the Company had $1,739 of unrecognized stock-based compensation expense related to outstanding unvested restricted stock units. The Company expects to recognize that cost over a weighted average service period of 1.45 years. Restricted stock units have no voting or dividend rights until the awards are vested. Changes in the Company’s restricted stock units for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 Performance-based Time-based/Director Total Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Unvested restricted stock units at January 1, 121,393 $ 15.88 46,500 $ 17.15 167,893 $ 16.23 Granted 20,667 $ 30.00 1,352 $ 33.90 22,019 $ 30.24 Shares earned above target (a) 36,884 $ 16.70 — $ — 36,884 $ 16.70 Vested (74,900) $ 16.03 (9,437) $ 17.31 (84,337) $ 16.17 Forfeited — $ — (1,675) $ 14.54 (1,675) $ 14.54 Unvested restricted stock units at March 31, 104,044 $ 18.86 36,740 $ 17.84 140,784 $ 18.60 (a) The number of shares earned above target are based on the performance targets established by the Compensation Committee at the initial grant date. (a) he number of shares earned above target are based on the performance target established by the Compensation Committee at the initial grant date. Three Months Ended March 31, 2021 Performance-based Time-based/Director Total Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Unvested restricted stock units at January 1, 14,676 $ 15.45 — $ — 14,676 $ 15.45 Granted 126,671 $ 15.79 28,240 $ 14.75 154,911 $ 15.60 Vested (2,699) $ 15.30 (2,740) $ 16.71 (5,439) $ 16.01 Forfeited (11,411) $ 14.54 — $ — (11,411) $ 14.54 Unvested restricted stock units at March 31, 127,237 $ 15.88 25,500 $ 14.54 152,737 $ 15.65 (a) The number of shares earned above target are based on the performance target established by the Compensation Committee at the initial grant date. Shares of Common Stock As of March 31, 2022, the Company had approximately $83 of unrecognized stock-based compensation expense related to outstanding unvested restricted shares of common stock issued in connection with the Coit Acquisition (see Note 5). These shares had a grant price of $9.57 and a remaining average expected life of 0.58 years. Restricted shares of common stock have no voting or dividend rights until the awards are vested. Changes in the Company’s restricted shares of common stock for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 2021 Number of Weighted Number of Weighted Unvested restricted shares of common stock at January 1, 34,818 $ 9.57 52,226 $ 9.57 Vested — $ — — $ — Unvested restricted shares of common stock at March 31, 34,818 $ 9.57 52,226 $ 9.57 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Tax Provision Under ASC 270, “Interim Reporting”, and ASC 740-270, “Income Taxes – Intra Period Tax Allocation”, the Company is required to adjust its effective tax rate for each quarter to be consistent with the estimated annual effective tax rate. Jurisdictions with a projected loss for the full year where no tax benefit can be recognized are excluded from the calculation of the estimated annual effective tax rate. Applying the provisions of ASC 270 and ASC 740-270 could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. Effective Tax Rate The provision for income taxes for the three months ended March 31, 2022 was $536 on a pre-tax income of $3,555, compared to a provision for income taxes of $178 on pre-tax loss of $25 for the same period in 2021. The Company’s effective income tax rate was positive 15% and negative 721% for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022 and 2021, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to changes in valuation allowances in the U.S. and certain foreign jurisdictions, which reduces or eliminates the effective tax rate on current year profits or losses, foreign tax rate differences, and non-deductible expenses. Uncertain Tax Positions As of both March 31, 2022 and December 31, 2021, the Company had $360 of unrecognized tax benefits, excluding interest and penalties, which if recognized in the future, would lower the Company’s effective income tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. As of March 31, 2022 and December 31, 2021, the Company had $115 and $110, respectively, of accrued interest and penalties associated with unrecognized tax benefits. Based on information available as of March 31, 2022, it is reasonably possible that the total amount of unrecognized tax benefits could decrease by up to $400 over the next 12 months as a result of projected resolutions of global tax examinations and controversies and potential expirations of the applicable statutes of limitations. In many cases, the Company’s unrecognized tax benefits are related to tax years that remain subject to examination by the relevant tax authorities. Tax years with net operating losses (“NOLs”) remain open until such losses expire or until the statutes of limitations for those years when the NOLs are used expire. As of March 31, 2022, the Company ’ s open tax years, which remain subject to examination by the relevant tax authorities, are between 2014 and 2020 depending on the jurisdiction. The Company believes that its unrecognized tax benefits as of March 31, 2022 are appropriately reflected for all years subject to examination above. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is 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 is 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”, unvested restricted stock, and unvested restricted stock units. The dilutive impact of stock options, unvested restricted stock, and unvested restricted stock units 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. A reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share calculations for the three months ended March 31, 2022 and 2021 are as follows: Three Months Ended March 31, 2022 2021 Earnings (loss) per share (“EPS”): Basic $ 1.02 $ (0.07) Diluted $ 0.97 $ (0.07) EPS numerator - basic and diluted: Net income (loss) $ 3,019 $ (203) EPS denominator (in thousands): Weighted average common stock outstanding - basic 2,967 2,891 Common stock equivalents: restricted stock units and restricted shares of common stock 150 — (a) Weighted average number of common stock outstanding - diluted 3,117 2,891 (a) 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 6 to the Condensed Consolidated Financial Statements for further details on unvested restricted stock units) were anti-dilutive and therefore not included in the calculation of the denominator of dilutive earnings (loss) per share. The weighted average number of shares outstanding used in the computation of diluted net earnings or loss per share for the three months ended March 31, 2022 and 2021 did not include the effect of the following potentially outstanding shares of common stock because the effect would have been anti-dilutive: Three Months Ended March 31, 2022 2021 Unvested restricted shares of common stock — 52,226 Unvested restricted stock units — 152,737 Total — 204,963 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company recorded goodwill of $2,131 on October 29, 2021 in connection with the Karani Acquisition and goodwill of $2,088 in connection with the Coit Acquisition. (see Note 5 for further information) . Intangible Assets The Company’s intangible assets consisted of the following components: March 31, 2022 Weighted Average Remaining Amortization Useful Lives Gross Carrying Accumulated Net Carrying Non-compete agreements 0.5 $ 80 $ (60) $ 20 Trade name 8.0 1,500 (166) 1,334 Customer lists 5.0 3,800 (494) 3,306 Developed technology 2.6 640 (89) 551 $ 6,020 $ (809) $ 5,211 December 31, 2021 Weighted Average Remaining Amortization Useful Lives Gross Carrying Accumulated Net Carrying Non-compete agreements 0.8 $ 80 $ (50) $ 30 Trade name 8.2 1,500 (118) 1,382 Customer lists 5.3 3,800 (328) 3,472 Developed technology 2.8 640 (36) 604 $ 6,020 $ (532) $ 5,488 Amortization expense for the three months ended March 31, 2022 and 2021 was $277 and $80, respectively. Intangible assets are amortized on a straight-line basis over their estimated useful lives. No impairment in the value of amortizable intangible assets was recognized during three months ended March 31, 2022 and 2021. Estimated future amortization expense for intangible assets for the remainder of the fiscal year ending December 31, 2022, and for each of the next fiscal years are as follows: 2022 $ 823 2023 1,070 2024 1,034 2025 787 2026 577 Thereafter 920 $ 5,211 The change in the book value of amortizable intangible assets is as follows: January 1, 2022 Beginning Balance Amortization March 31, 2022 Ending Balance Non-compete agreements $ 30 $ (10) $ 20 Trade name 1,382 (48) 1,334 Customer lists 3,472 (166) 3,306 Developed technology 604 (53) 551 $ 5,488 $ (277) $ 5,211 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation and Complaints The Company is subject, from time to time, to various claims, lawsuits, contracts disputes, and other complaints from, for example, clients, candidates, suppliers, landlords for both leased and subleased properties, former and current employees, and regulators or tax authorities arising in the ordinary course of business. The Company routinely monitors claims such as these, and records provisions for losses when the claim becomes probable and the amount due is estimable. Although the outcome of these claims cannot be determined, the Company believes that the final resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or liquidity. For matters that reach the threshold of probable and estimable, the Company establishes reserves for legal, regulatory, and other contingent liabilities. The legal reserves are included under the caption “Other non-current liabilities” in the Condensed Consolidated Balance Sheets. The Company did not have any legal reserves as of March 31, 2022 and December 31, 2021. Operating Leases Our office space leases have lease terms of one year to five years. Some of these operating leases include options to extend the lease terms, and some operating leases include options to terminate the leases earlier than the expiration of the full terms. These options are considered in our determination of the valuation of our right-of-use assets and lease liabilities. None of our operating leases include implicit rates, and we have determined that the difference between the contractual cost basis and the present value of lease payments calculated using incremental borrowing rates is not material. Our operating lease costs for the three months ended March 31, 2022 and 2021 were $277 and $177, respectively (reflected in Net cash used in operating activities). The weighted average remaining lease term of our operating leases as of March 31, 2022 was 2.8 years. As of March 31, 2022, future minimum operating lease payments are as follows: 2022 2023 2024 2025 2026 2027 Total Minimum lease payments $ 404 $ 352 $ 151 $ 90 $ 92 $ 31 $ 1,120 Invoice Finance Credit Facility On April 8, 2019, the Company’s Australian subsidiary (“Australian Borrower”) entered into an invoice finance credit facility agreement (the “NAB Facility Agreement”) with National Australia Bank Limited (“NAB”). The NAB Facility Agreement provides the Australian Borrower with the ability to borrow funds based on a percentage of eligible trade receivables up to a maximum of 4 million Australian dollars. No receivables have terms greater than 90 days, and any risk of loss is retained by the Australian Borrower. The interest rate is calculated as the variable receivable finance indicator rate, plus a margin of 1.60% per annum. Borrowings under this facility are secured by substantially all of the assets of the Australian Borrower. The NAB Facility Agreement does not have a stated maturity date and can be terminated by either the Australian Borrower or NAB upon 90 days written notice. As of March 31, 2022, there were no amounts outstanding under the NAB Facility Agreement. Interest expense and fees incurred on the NAB Facility Agreement was $5 for each of the three months ended March 31, 2022 and 2021. The NAB Facility Agreement contains various restrictions and covenants for the Australian Borrower including (1) that EBITDA must be at least two times total interest paid on debt on a 12-month rolling basis; (2) minimum tangible net worth must be at least 2.5 million Australian dollars and be equal to at least 25% of total tangible assets on June 30 and December 31 (as defined in the NAB Facility Agreement); and (3) additional periodic reporting requirements to NAB. The Australian Borrower was in compliance with all financial covenants under the NAB Facility Agreement as of December 31, 2021. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss), net of applicable tax, consisted of the following: March 31, December 31, 2022 2021 Foreign currency translation adjustments $ 52 $ (85) Accumulated other comprehensive income (loss) $ 52 $ (85) |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Common Stock On July 30, 2015, the Company announced that its Board authorized the repurchase of up to $10,000 of the Company ’ s common stock. The Company intends to make purchases from time to time as market conditions warrant. This authorization does not expire. During the three months ended March 31, 2022 and 2021, no purchases of shares were made by the Company under this authorization. As of March 31, 2022, under the July 30, 2015 authorization, the Company had repurchased an aggregate of 432,563 shares for a total cost of $8,297. On October 15, 2018, the Company’s Board of Directors declared a dividend to the Company’s stockholders of record as of the close of business on October 25, 2018 (the “Record Date”), for each outstanding share of the Company’s common stock, of one right (a “Right”) to purchase one one-hundredth of a share of a new series of participating preferred stock of the Company. The terms of the Rights are set forth in the Rights Agreement, dated as of October 15, 2018 (as amended, the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as rights agent (the “Rights Agent”). The Company ’ s stockholders approved the Rights Agreement at the Company’s 2019 Annual Meeting of Stockholders held on May 6, 2019. On September 28, 2021, the Company and the Rights Agent entered into a First Amendment to Rights Agreement (the “Amendment”) that amended the Rights Agreement to extend its term through October 15, 2024. The amendment was approved by the Board on September 28, 2021, subject to stockholder approval. The Company has included the Amendment in its proxy statement for its 2022 Annual Meeting of Stockholders and recommends that its stockholders approve the Amendment. Each Right allows its holder to purchase from the Company one one-hundredth of a share of the Company’s Series B Junior Participating Preferred Stock (“Series B Preferred Stock”) for a purchase price of $3.50. Each fractional share of Series B Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of common stock. Prior to exercise, however, a Right does not give its holder any dividend, voting or liquidation rights. The Board entered into the Rights Agreement in an effort to preserve the value of the Company’s significant U.S. NOLs and other tax benefits. The Company’s ability to utilize its NOLs may be substantially limited if the Company experiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an “ownership change” would occur if the percentage of the Company’s ownership by one or more “5-percent shareholders” (as defined in the Code) increases by more than 50 percent over the lowest percentage owned by such stockholders at any time during the prior three years. The Rights Agreement is designed to preserve the Company’s tax benefits by deterring transfers of common stock that could result in an “ownership change” under Section 382 of the Code. The Rights Agreement replaced the Company’s prior rights agreement designed to preserve the value of the Company’s NOLs, which was approved by stockholders in 2015 and expired in accordance with its terms in January 2018. The Company also has a provision in its Amended and Restated Certificate of Incorporation (the “Charter Provision”) which generally prohibits transfers of its common stock that could result in an ownership change. The Company believes that in light of the significant amount of the NOLs, it is advisable for the Company ’s stockholders to approve the Amendment to extend the term of the Rights Agreement. In general terms, the Rights Agreement imposes a significant penalty upon any person or group that acquires beneficial ownership (as defined under the Rights Agreement) of 4.99% or more of the outstanding common stock without the prior approval of the Board (an “Acquiring Person”). Any Rights held by an Acquiring Person are void and may not be exercised. The Rights will not be exercisable until the earlier of (i) 10 days after a public announcement by the Company that a person or group has become an Acquiring Person; and (ii) 10 business days (or a later date determined by the Board) after a person or group begins a tender or an exchange offer that, if completed, would result in that person or group becoming an Acquiring Person. Until the date that the Rights become exercisable (the “Distribution Date”), common stock certificates will also evidence the Rights and will contain a notation to that effect. Any transfer of shares of common stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, the Rights will separate from the common stock and be evidenced by Right certificates, which the Company will mail to all holders of Rights that have not become void. After the Distribution Date, if a person or group already is or becomes an Acquiring Person, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price to purchase shares of common stock (or other securities or assets as determined by the Board) with a market value of two times the purchase price (a “Flip-in Event”). After the Distribution Date, if a Flip-in Event has already occurred and the Company is acquired in a merger or similar transaction, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price, to purchase shares of the acquiring or other appropriate entity with a market value of two times the purchase price of the Rights. Rights may be exercised to purchase Series B Preferred Stock only after the Distribution Date occurs and prior to the occurrence of a Flip-in Event as described above. A Distribution Date resulting from the commencement of a tender offer or an exchange offer as described in the second bullet point above could precede the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase Series B Preferred Stock. A Distribution Date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase shares of common stock (or other securities or assets) as described above. If the Amendment is approved at the Company’s 2022 Annual Meeting of Stockholders, the Rights will expire on the earliest of (i) October 15, 2024, or such earlier date as of which the Board determines that the Rights Agreement is no longer necessary for the preservation of the Company’s tax benefits, (ii) the time at which the Rights are redeemed, (iii) the time at which the Rights are exchanged, (iv) the effective time of the repeal of Section 382 of the Code if the Board determines that the Rights Agreement is no longer necessary for the preservation of the Company’s tax benefits, (v) the first day of a taxable year to which the Board determines that no NOLs or other tax benefits may be carried forward, and (vi) the close of business on the first business day following the certification of the voting results of the Company’s 2022 Annual Meeting of Stockholders, if stockholder approval has not been obtained prior to such date. The Board may redeem all (but not less than all) of the Rights for a redemption price of $0.001 per Right at any time before the later of the Distribution Date and the date of the first public announcement or disclosure by the Company that a person or group has become an Acquiring Person. Once the Rights are redeemed, the right to exercise the Rights will terminate, and the only right of the holders of such Rights will be to receive the redemption price. The Board may adjust the purchase price of the Series B Preferred Stock, the number of shares of Series B Preferred Stock issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including, among others, a stock dividend, a stock split or a reclassification of the Series B Preferred Stock or common stock. Before the time the Rights cease to be redeemable, the Board may amend or supplement the Rights Agreement without the consent of the holders of the Rights, except that no amendment may decrease the redemption price below $0.001 per Right. |
SEGMENT AND GEOGRAPHIC DATA
SEGMENT AND GEOGRAPHIC DATA | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DATA | SEGMENT AND GEOGRAPHIC DATA Segment Reporting The Company operates in three reportable segments: the Hudson regional businesses of Americas, Asia Pacific, and Europe. Corporate expenses are reported separately for the three reportable segments and pertain to certain functions, such as executive management, corporate governance, investor relations, legal, accounting, tax, and treasury. A portion of these expenses are attributed to the reportable segments for providing the above services to them, and have been allocated to the segments as management service expenses, and are included in the segments’ non-operating other income (expense). Segment information is presented in accordance with ASC 280, “ Segment Reporting. ” This standard is based on a management approach that requires segmentation based upon the Company’s internal organization and disclosure of revenue and certain expenses based upon internal accounting methods. The Company’s financial reporting systems present various data for management to run the business, including internal profit and loss statements prepared on a basis not consistent with U.S. GAAP. Accounts receivable and long-lived assets are the only significant asset separated by segment for internal reporting purposes. Americas Asia Pacific Europe Corporate Inter-Segment Elimination Total For The Three Months Ended March 31, 2022 Revenue, from external customers $ 14,611 $ 31,133 $ 6,173 $ — $ — $ 51,917 Inter-segment revenue 53 12 31 — (96) — Total revenue $ 14,664 $ 31,145 $ 6,204 $ — $ (96) $ 51,917 Adjusted net revenue, from external customers (a) $ 13,702 $ 8,213 $ 3,658 $ — $ — $ 25,573 Inter-segment adjusted net revenue 16 (8) (8) — — — Total adjusted net revenue $ 13,718 $ 8,205 $ 3,650 $ — $ — $ 25,573 EBITDA (loss) (b) $ 2,414 $ 2,027 $ 147 $ (711) $ — $ 3,877 Depreciation and amortization (305) (11) (7) (1) — (324) Intercompany (expense) interest income, net — (75) — 75 — — Interest income, net — 1 — 1 — 2 Provision for (benefit from) income taxes $ (42) $ (531) $ 16 $ 21 $ — $ (536) Net income (loss) $ 2,067 $ 1,411 $ 156 $ (615) $ — $ 3,019 As of March 31, 2022 Accounts receivable, net $ 11,711 $ 11,761 $ 5,452 $ — $ — $ 28,924 Long-lived assets, net of accumulated depreciation and amortization (b) $ 9,735 $ 57 $ 56 $ 4 $ — $ 9,852 Total assets $ 26,047 $ 24,119 $ 8,472 $ 4,672 $ — $ 63,310 Americas Asia Pacific Europe Corporate Inter- Total For The Three Months Ended March 31, 2021 Revenue, from external customers $ 4,561 $ 25,340 $ 4,560 $ — $ — $ 34,461 Inter-segment revenue — — — — — — Total revenue $ 4,561 $ 25,340 $ 4,560 $ — $ — $ 34,461 Adjusted net revenue, from external customers (a) $ 4,209 $ 5,758 $ 2,751 $ — $ — $ 12,718 Inter-segment adjusted net revenue — — — — — — Total adjusted net revenue $ 4,209 $ 5,758 $ 2,751 $ — $ — $ 12,718 EBITDA (loss) (b) $ (278) $ 762 $ 70 $ (479) $ — $ 75 Depreciation and amortization (86) (14) (9) (1) — (110) Intercompany (expense) interest income, net — (85) — 85 — — Interest (expense) income, net — 1 — 9 — 10 Provision for (benefit from) income taxes $ (9) $ (194) $ (17) $ 42 $ — $ (178) Net income (loss) $ (373) $ 470 $ 44 $ (344) $ — $ (203) As of December 31, 2021 Accounts receivable, net $ 8,765 $ 12,073 $ 4,910 $ — $ — $ 25,748 Long-lived assets, net of accumulated depreciation and amortization (b) $ 9,964 $ 68 $ 42 $ 4 $ — $ 10,078 Total assets $ 22,214 $ 21,744 $ 9,370 $ 7,914 $ — $ 61,242 (a) Adjusted net revenue is net of the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations. Direct contracting costs and reimbursed expenses 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. The region where services are provided, the mix of RPO recruitment and contracting, and the functional nature of the staffing services provided can affect operating income and EBITDA. The salaries, commissions, payroll taxes, and employee benefits related to recruitment professionals are included under the caption “Salaries and related” in the Consolidated Statements of Operations. (b) SEC Regulation S-K Item 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. Geographic Data Reporting A summary of revenues for three months ended March 31, 2022 and 2021 and net assets by geographic area as of March 31, 2022 and December 31, 2021, were as follows: Australia United United Other Total For The Three Months Ended March 31, 2022 Revenue (a) $ 28,386 $ 13,895 $ 5,773 $ 3,863 $ 51,917 For The Three Months Ended March 31, 2021 Revenue (a) $ 23,474 $ 4,248 $ 3,871 $ 2,868 $ 34,461 As of March 31, 2022 Long-lived assets, net of accumulated depreciation and amortization (b) $ 27 $ 9,739 $ 56 $ 30 $ 9,852 Net assets $ 9,472 $ 22,624 $ 2,931 $ 7,765 $ 42,792 As of December 31, 2021 Long-lived assets, net of accumulated depreciation and amortization (b) $ 29 $ 9,968 $ 42 $ 39 $ 10,078 Net assets $ 7,925 $ 21,510 $ 2,729 $ 7,152 $ 39,316 (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. (b) Comprised of property and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization. |
STOCKHOLDER RIGHTS PLAN
STOCKHOLDER RIGHTS PLAN | 3 Months Ended |
Mar. 31, 2022 | |
Stockholder Rights Plan [Abstract] | |
Stockholders' Rights Plan | STOCKHOLDERS' EQUITY Common Stock On July 30, 2015, the Company announced that its Board authorized the repurchase of up to $10,000 of the Company ’ s common stock. The Company intends to make purchases from time to time as market conditions warrant. This authorization does not expire. During the three months ended March 31, 2022 and 2021, no purchases of shares were made by the Company under this authorization. As of March 31, 2022, under the July 30, 2015 authorization, the Company had repurchased an aggregate of 432,563 shares for a total cost of $8,297. On October 15, 2018, the Company’s Board of Directors declared a dividend to the Company’s stockholders of record as of the close of business on October 25, 2018 (the “Record Date”), for each outstanding share of the Company’s common stock, of one right (a “Right”) to purchase one one-hundredth of a share of a new series of participating preferred stock of the Company. The terms of the Rights are set forth in the Rights Agreement, dated as of October 15, 2018 (as amended, the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as rights agent (the “Rights Agent”). The Company ’ s stockholders approved the Rights Agreement at the Company’s 2019 Annual Meeting of Stockholders held on May 6, 2019. On September 28, 2021, the Company and the Rights Agent entered into a First Amendment to Rights Agreement (the “Amendment”) that amended the Rights Agreement to extend its term through October 15, 2024. The amendment was approved by the Board on September 28, 2021, subject to stockholder approval. The Company has included the Amendment in its proxy statement for its 2022 Annual Meeting of Stockholders and recommends that its stockholders approve the Amendment. Each Right allows its holder to purchase from the Company one one-hundredth of a share of the Company’s Series B Junior Participating Preferred Stock (“Series B Preferred Stock”) for a purchase price of $3.50. Each fractional share of Series B Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of common stock. Prior to exercise, however, a Right does not give its holder any dividend, voting or liquidation rights. The Board entered into the Rights Agreement in an effort to preserve the value of the Company’s significant U.S. NOLs and other tax benefits. The Company’s ability to utilize its NOLs may be substantially limited if the Company experiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an “ownership change” would occur if the percentage of the Company’s ownership by one or more “5-percent shareholders” (as defined in the Code) increases by more than 50 percent over the lowest percentage owned by such stockholders at any time during the prior three years. The Rights Agreement is designed to preserve the Company’s tax benefits by deterring transfers of common stock that could result in an “ownership change” under Section 382 of the Code. The Rights Agreement replaced the Company’s prior rights agreement designed to preserve the value of the Company’s NOLs, which was approved by stockholders in 2015 and expired in accordance with its terms in January 2018. The Company also has a provision in its Amended and Restated Certificate of Incorporation (the “Charter Provision”) which generally prohibits transfers of its common stock that could result in an ownership change. The Company believes that in light of the significant amount of the NOLs, it is advisable for the Company ’s stockholders to approve the Amendment to extend the term of the Rights Agreement. In general terms, the Rights Agreement imposes a significant penalty upon any person or group that acquires beneficial ownership (as defined under the Rights Agreement) of 4.99% or more of the outstanding common stock without the prior approval of the Board (an “Acquiring Person”). Any Rights held by an Acquiring Person are void and may not be exercised. The Rights will not be exercisable until the earlier of (i) 10 days after a public announcement by the Company that a person or group has become an Acquiring Person; and (ii) 10 business days (or a later date determined by the Board) after a person or group begins a tender or an exchange offer that, if completed, would result in that person or group becoming an Acquiring Person. Until the date that the Rights become exercisable (the “Distribution Date”), common stock certificates will also evidence the Rights and will contain a notation to that effect. Any transfer of shares of common stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, the Rights will separate from the common stock and be evidenced by Right certificates, which the Company will mail to all holders of Rights that have not become void. After the Distribution Date, if a person or group already is or becomes an Acquiring Person, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price to purchase shares of common stock (or other securities or assets as determined by the Board) with a market value of two times the purchase price (a “Flip-in Event”). After the Distribution Date, if a Flip-in Event has already occurred and the Company is acquired in a merger or similar transaction, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price, to purchase shares of the acquiring or other appropriate entity with a market value of two times the purchase price of the Rights. Rights may be exercised to purchase Series B Preferred Stock only after the Distribution Date occurs and prior to the occurrence of a Flip-in Event as described above. A Distribution Date resulting from the commencement of a tender offer or an exchange offer as described in the second bullet point above could precede the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase Series B Preferred Stock. A Distribution Date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase shares of common stock (or other securities or assets) as described above. If the Amendment is approved at the Company’s 2022 Annual Meeting of Stockholders, the Rights will expire on the earliest of (i) October 15, 2024, or such earlier date as of which the Board determines that the Rights Agreement is no longer necessary for the preservation of the Company’s tax benefits, (ii) the time at which the Rights are redeemed, (iii) the time at which the Rights are exchanged, (iv) the effective time of the repeal of Section 382 of the Code if the Board determines that the Rights Agreement is no longer necessary for the preservation of the Company’s tax benefits, (v) the first day of a taxable year to which the Board determines that no NOLs or other tax benefits may be carried forward, and (vi) the close of business on the first business day following the certification of the voting results of the Company’s 2022 Annual Meeting of Stockholders, if stockholder approval has not been obtained prior to such date. The Board may redeem all (but not less than all) of the Rights for a redemption price of $0.001 per Right at any time before the later of the Distribution Date and the date of the first public announcement or disclosure by the Company that a person or group has become an Acquiring Person. Once the Rights are redeemed, the right to exercise the Rights will terminate, and the only right of the holders of such Rights will be to receive the redemption price. The Board may adjust the purchase price of the Series B Preferred Stock, the number of shares of Series B Preferred Stock issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including, among others, a stock dividend, a stock split or a reclassification of the Series B Preferred Stock or common stock. Before the time the Rights cease to be redeemable, the Board may amend or supplement the Rights Agreement without the consent of the holders of the Rights, except that no amendment may decrease the redemption price below $0.001 per Right. |
ACCOUNTING PRONOUNCEMENTS (Poli
ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Adoption of New Accounting Pronouncements and Recent Accounting Standard Update Not Yet Adopted | Adoption of New Accounting Pronouncements On January 1, 2021, the Company adopted Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (“Topic 740”): Simplifying the Accounting for Income Taxes”. The standard simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also clarifies and amends existing guidance to improve consistent application. For public business entities, this standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Recent Accounting Standard Update Not Yet Adopted |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our disaggregated revenues by revenue source. For additional information on the revenues by geographical segment, see Note 13 to the Condensed Consolidated Financial Statements. Three Months Ended March 31, 2022 2021 RPO Recruitment $ 25,260 $ 12,386 Contracting 26,657 22,075 Total Revenue $ 51,917 $ 34,461 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Below is a summary of the fair value of the net assets acquired on the acquisition date based on external valuations at the date of acquisition. Fair Value Assets Acquired: Cash and cash equivalents $ 737 Accounts receivable 1,521 Restricted cash, current 50 Prepaid expenses and other assets 177 Property and equipment 119 Operating lease right-of-use assets 100 Restricted cash 3 Other long-term assets 19 Intangible assets 4,540 Goodwill 2,131 Assets Acquired $ 9,397 Liabilities Assumed: Accrued expenses and other current liabilities $ 436 Operating lease obligations, current 88 Operating lease obligations, non current 12 Other long-term liabilities 188 Liabilities Assumed $ 724 Fair value of assets acquired and consideration transferred $ 8,673 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives on the date of acquisition. Fair Value Useful Life Developed technology $ 640 3 years Customer lists 2,800 6 years Trade name 1,100 10 years Total identifiable assets $ 4,540 |
Business Acquisition, Pro Forma Information | The following unaudited consolidated pro forma information gives effect to the acquisition of Karani, LLC as if the transaction had occurred on January 1, 2021. Three Months Ended March 31, 2021 Revenue $ 36,152 Net loss $ (228) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Restricted stock unit, vesting information | A summary of the quantity and vesting conditions for stock-based units granted to the Company's employees for the three months ended March 31, 2022 was as follows: Vesting conditions Number of Restricted Stock Units Granted Performance and service conditions - Type 1 (1) (2) 15,667 Performance and service conditions - Type 2 (1) (2) 5,000 Total shares of stock award granted 20,667 (1) For grants to Corporate office employees subject to 2022 performance conditions, 100% of the restricted stock units may be earned on the basis of performance as measured by a “group adjusted EBITDA”. (2) To the extent restricted stock units are earned, such restricted stock units will vest on the basis of service as follows: (a) 33% and 66.6% for Type 1 and Type 2, respectively, of the restricted stock units will vest on the first anniversary of the grant date; (b) 33% and 16.7% for Type 1 and Type 2, respectively, of the restricted stock units will vest on the second anniversary of the grant date; and (c) 34% and 16.7% for Type 1 and Type 2, respectively, of the restricted stock units will vest on the third anniversary of the grant date; provided that, in each case, the employee remains employed by the Company from the grant date through the applicable service vesting date. |
Schedule of stock-based compensation expense | For the three months ended March 31, 2022 and 2021, the Company’s stock-based compensation expense related to restricted stock units and restricted shares of common stock were as follows: Three Months Ended March 31, 2022 2021 Restricted shares of common stock (see Note 5) $ 42 $ 90 Restricted stock units 504 212 Total $ 546 $ 302 |
Disclosure of share based compensation arrangements other than options fair value vested | Changes in the Company’s restricted stock units for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 Performance-based Time-based/Director Total Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Unvested restricted stock units at January 1, 121,393 $ 15.88 46,500 $ 17.15 167,893 $ 16.23 Granted 20,667 $ 30.00 1,352 $ 33.90 22,019 $ 30.24 Shares earned above target (a) 36,884 $ 16.70 — $ — 36,884 $ 16.70 Vested (74,900) $ 16.03 (9,437) $ 17.31 (84,337) $ 16.17 Forfeited — $ — (1,675) $ 14.54 (1,675) $ 14.54 Unvested restricted stock units at March 31, 104,044 $ 18.86 36,740 $ 17.84 140,784 $ 18.60 (a) The number of shares earned above target are based on the performance targets established by the Compensation Committee at the initial grant date. (a) he number of shares earned above target are based on the performance target established by the Compensation Committee at the initial grant date. Three Months Ended March 31, 2021 Performance-based Time-based/Director Total Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Number of Shares of Restricted Stock Units Weighted Average Grant-Date Fair Value Unvested restricted stock units at January 1, 14,676 $ 15.45 — $ — 14,676 $ 15.45 Granted 126,671 $ 15.79 28,240 $ 14.75 154,911 $ 15.60 Vested (2,699) $ 15.30 (2,740) $ 16.71 (5,439) $ 16.01 Forfeited (11,411) $ 14.54 — $ — (11,411) $ 14.54 Unvested restricted stock units at March 31, 127,237 $ 15.88 25,500 $ 14.54 152,737 $ 15.65 (a) The number of shares earned above target are based on the performance target established by the Compensation Committee at the initial grant date. |
Changes in restricted stock units and shares | Changes in the Company’s restricted shares of common stock for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 2021 Number of Weighted Number of Weighted Unvested restricted shares of common stock at January 1, 34,818 $ 9.57 52,226 $ 9.57 Vested — $ — — $ — Unvested restricted shares of common stock at March 31, 34,818 $ 9.57 52,226 $ 9.57 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | A reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share calculations for the three months ended March 31, 2022 and 2021 are as follows: Three Months Ended March 31, 2022 2021 Earnings (loss) per share (“EPS”): Basic $ 1.02 $ (0.07) Diluted $ 0.97 $ (0.07) EPS numerator - basic and diluted: Net income (loss) $ 3,019 $ (203) EPS denominator (in thousands): Weighted average common stock outstanding - basic 2,967 2,891 Common stock equivalents: restricted stock units and restricted shares of common stock 150 — (a) Weighted average number of common stock outstanding - diluted 3,117 2,891 (a) 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 6 to the Condensed Consolidated Financial Statements for further details on unvested restricted stock units) were anti-dilutive and therefore not included in the calculation of the denominator of dilutive earnings (loss) per share. |
Schedule of antidilutive securities excluded from computation of earnings per share | The weighted average number of shares outstanding used in the computation of diluted net earnings or loss per share for the three months ended March 31, 2022 and 2021 did not include the effect of the following potentially outstanding shares of common stock because the effect would have been anti-dilutive: Three Months Ended March 31, 2022 2021 Unvested restricted shares of common stock — 52,226 Unvested restricted stock units — 152,737 Total — 204,963 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The Company’s intangible assets consisted of the following components: March 31, 2022 Weighted Average Remaining Amortization Useful Lives Gross Carrying Accumulated Net Carrying Non-compete agreements 0.5 $ 80 $ (60) $ 20 Trade name 8.0 1,500 (166) 1,334 Customer lists 5.0 3,800 (494) 3,306 Developed technology 2.6 640 (89) 551 $ 6,020 $ (809) $ 5,211 December 31, 2021 Weighted Average Remaining Amortization Useful Lives Gross Carrying Accumulated Net Carrying Non-compete agreements 0.8 $ 80 $ (50) $ 30 Trade name 8.2 1,500 (118) 1,382 Customer lists 5.3 3,800 (328) 3,472 Developed technology 2.8 640 (36) 604 $ 6,020 $ (532) $ 5,488 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense for intangible assets for the remainder of the fiscal year ending December 31, 2022, and for each of the next fiscal years are as follows: 2022 $ 823 2023 1,070 2024 1,034 2025 787 2026 577 Thereafter 920 $ 5,211 |
Schedule of Amortizable Intangible Assets | The change in the book value of amortizable intangible assets is as follows: January 1, 2022 Beginning Balance Amortization March 31, 2022 Ending Balance Non-compete agreements $ 30 $ (10) $ 20 Trade name 1,382 (48) 1,334 Customer lists 3,472 (166) 3,306 Developed technology 604 (53) 551 $ 5,488 $ (277) $ 5,211 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity | As of March 31, 2022, future minimum operating lease payments are as follows: 2022 2023 2024 2025 2026 2027 Total Minimum lease payments $ 404 $ 352 $ 151 $ 90 $ 92 $ 31 $ 1,120 |
ACCUMUATED OTHER COMPREHENSIVE
ACCUMUATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss), net of applicable tax, consisted of the following: March 31, December 31, 2022 2021 Foreign currency translation adjustments $ 52 $ (85) Accumulated other comprehensive income (loss) $ 52 $ (85) |
SEGMENT AND GEOGRAPHIC DATA (Ta
SEGMENT AND GEOGRAPHIC DATA (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Americas Asia Pacific Europe Corporate Inter-Segment Elimination Total For The Three Months Ended March 31, 2022 Revenue, from external customers $ 14,611 $ 31,133 $ 6,173 $ — $ — $ 51,917 Inter-segment revenue 53 12 31 — (96) — Total revenue $ 14,664 $ 31,145 $ 6,204 $ — $ (96) $ 51,917 Adjusted net revenue, from external customers (a) $ 13,702 $ 8,213 $ 3,658 $ — $ — $ 25,573 Inter-segment adjusted net revenue 16 (8) (8) — — — Total adjusted net revenue $ 13,718 $ 8,205 $ 3,650 $ — $ — $ 25,573 EBITDA (loss) (b) $ 2,414 $ 2,027 $ 147 $ (711) $ — $ 3,877 Depreciation and amortization (305) (11) (7) (1) — (324) Intercompany (expense) interest income, net — (75) — 75 — — Interest income, net — 1 — 1 — 2 Provision for (benefit from) income taxes $ (42) $ (531) $ 16 $ 21 $ — $ (536) Net income (loss) $ 2,067 $ 1,411 $ 156 $ (615) $ — $ 3,019 As of March 31, 2022 Accounts receivable, net $ 11,711 $ 11,761 $ 5,452 $ — $ — $ 28,924 Long-lived assets, net of accumulated depreciation and amortization (b) $ 9,735 $ 57 $ 56 $ 4 $ — $ 9,852 Total assets $ 26,047 $ 24,119 $ 8,472 $ 4,672 $ — $ 63,310 Americas Asia Pacific Europe Corporate Inter- Total For The Three Months Ended March 31, 2021 Revenue, from external customers $ 4,561 $ 25,340 $ 4,560 $ — $ — $ 34,461 Inter-segment revenue — — — — — — Total revenue $ 4,561 $ 25,340 $ 4,560 $ — $ — $ 34,461 Adjusted net revenue, from external customers (a) $ 4,209 $ 5,758 $ 2,751 $ — $ — $ 12,718 Inter-segment adjusted net revenue — — — — — — Total adjusted net revenue $ 4,209 $ 5,758 $ 2,751 $ — $ — $ 12,718 EBITDA (loss) (b) $ (278) $ 762 $ 70 $ (479) $ — $ 75 Depreciation and amortization (86) (14) (9) (1) — (110) Intercompany (expense) interest income, net — (85) — 85 — — Interest (expense) income, net — 1 — 9 — 10 Provision for (benefit from) income taxes $ (9) $ (194) $ (17) $ 42 $ — $ (178) Net income (loss) $ (373) $ 470 $ 44 $ (344) $ — $ (203) As of December 31, 2021 Accounts receivable, net $ 8,765 $ 12,073 $ 4,910 $ — $ — $ 25,748 Long-lived assets, net of accumulated depreciation and amortization (b) $ 9,964 $ 68 $ 42 $ 4 $ — $ 10,078 Total assets $ 22,214 $ 21,744 $ 9,370 $ 7,914 $ — $ 61,242 (a) Adjusted net revenue is net of the Direct contracting costs and reimbursed expenses caption on the Condensed Consolidated Statements of Operations. Direct contracting costs and reimbursed expenses 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. The region where services are provided, the mix of RPO recruitment and contracting, and the functional nature of the staffing services provided can affect operating income and EBITDA. The salaries, commissions, payroll taxes, and employee benefits related to recruitment professionals are included under the caption “Salaries and related” in the Consolidated Statements of Operations. (b) SEC Regulation S-K Item 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. |
Revenue and long-lived assets by geographic area | A summary of revenues for three months ended March 31, 2022 and 2021 and net assets by geographic area as of March 31, 2022 and December 31, 2021, were as follows: Australia United United Other Total For The Three Months Ended March 31, 2022 Revenue (a) $ 28,386 $ 13,895 $ 5,773 $ 3,863 $ 51,917 For The Three Months Ended March 31, 2021 Revenue (a) $ 23,474 $ 4,248 $ 3,871 $ 2,868 $ 34,461 As of March 31, 2022 Long-lived assets, net of accumulated depreciation and amortization (b) $ 27 $ 9,739 $ 56 $ 30 $ 9,852 Net assets $ 9,472 $ 22,624 $ 2,931 $ 7,765 $ 42,792 As of December 31, 2021 Long-lived assets, net of accumulated depreciation and amortization (b) $ 29 $ 9,968 $ 42 $ 39 $ 10,078 Net assets $ 7,925 $ 21,510 $ 2,729 $ 7,152 $ 39,316 (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. (b) Comprised of property and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization. |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 3 Months Ended |
Mar. 31, 2022SegmentCountry | |
Description of Business [Abstract] | |
Number of Reportable Segments | Segment | 3 |
Number of Countries in which Entity Operates | Country | 14 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred revenue | $ 318 | $ 533 | |
Concentration Risk [Line Items] | |||
Revenue | 51,917 | $ 34,461 | |
Direct contracting costs and reimbursed expenses | $ 26,344 | $ 21,743 | |
Revenue, net of direct contracting costs and reimbursed expenses | $ 68,157 | ||
One Contracting Customer | Revenue, Net of Direct Contracting Costs and Reimbursed Expenses | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 1.00% | ||
Revenue, net of direct contracting costs and reimbursed expenses | $ 908 | ||
One Contracting Customer | Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Revenue | $ 44,888 | ||
Concentration Risk, Percentage | 27.00% | ||
One Contracting Customer | Direct Contracting Costs and Reimbursed Expenses | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Direct contracting costs and reimbursed expenses | $ 43,980 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 51,917 | $ 34,461 |
RPO Recruitment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25,260 | 12,386 |
Contracting | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 26,657 | $ 22,075 |
ACQUISITION - Narrative (Detail
ACQUISITION - Narrative (Details) $ in Thousands | Oct. 29, 2021USD ($)employees | Mar. 31, 2022USD ($)shares | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Oct. 01, 2020USD ($)shares |
Business Acquisition [Line Items] | |||||||
Stock-based compensation | $ 546 | $ 302 | |||||
Salaries and related | 18,261 | 10,590 | |||||
Restricted common stock | |||||||
Business Acquisition [Line Items] | |||||||
Stock-based compensation | 42 | 90 | |||||
Karani, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses | $ 6,805 | ||||||
Promissory note | 2,000 | ||||||
Fair value of assets acquired and consideration transferred | 8,673 | ||||||
Working capital credit | 132 | ||||||
Cash and cash equivalents | 737 | ||||||
Transaction costs | 200 | ||||||
Revenue since acquisition date | 2,568 | ||||||
Earnings (loss) since acquisition date | 235 | ||||||
Karani, LLC | Former Chief Financial Officer | |||||||
Business Acquisition [Line Items] | |||||||
Retention payment | $ 250 | ||||||
Karani, LLC | Installment payable, six month | Promissory Note | |||||||
Business Acquisition [Line Items] | |||||||
Installment payable period | 6 months | ||||||
Karani, LLC | Installment payable, eighteen month | Promissory Note | |||||||
Business Acquisition [Line Items] | |||||||
Installment payable period | 18 months | ||||||
Karani, LLC | India | |||||||
Business Acquisition [Line Items] | |||||||
Number of employees | employees | 560 | ||||||
Karani, LLC | Philippines | |||||||
Business Acquisition [Line Items] | |||||||
Number of employees | employees | 120 | ||||||
Coit Staffing, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Promissory note | $ 1,350 | ||||||
Fair value of assets acquired and consideration transferred | 3,997 | ||||||
Transaction costs | 436 | ||||||
Revenue since acquisition date | 5,982 | 1,316 | |||||
Earnings (loss) since acquisition date | (1,259) | 334 | |||||
Contingent consideration payable, annual payment | $ 450 | ||||||
Earn out payment | 200 | $ 1,500 | |||||
Employee agreement | 2 years | ||||||
Stock-based compensation | 42 | 90 | |||||
Promissory note payment | 112 | ||||||
Earn-out payment | 508 | ||||||
Contingent consideration payable | 91 | ||||||
Salaries and related | $ 662 | $ 381 | |||||
Coit Staffing, Inc. | Forecast | |||||||
Business Acquisition [Line Items] | |||||||
Earn out payment | $ 2,030 | ||||||
Coit Staffing, Inc. | Restricted common stock | |||||||
Business Acquisition [Line Items] | |||||||
Stock granted during period, amount, acquisitions | $ 500 | ||||||
Share-based compensation arrangement award vesting period | 30 months | ||||||
Stock granted during period, shares, acquisitions (shares) | shares | 52,226 | 52,226 | |||||
Coit Staffing, Inc. | Restricted common stock | First Anniversary | |||||||
Business Acquisition [Line Items] | |||||||
Share-based compensation arrangement award vesting period | 10 months | ||||||
Coit Staffing, Inc. | Restricted common stock | Second Anniversary | |||||||
Business Acquisition [Line Items] | |||||||
Share-based compensation arrangement award vesting period | 20 months | ||||||
Coit Staffing, Inc. | Restricted common stock | Third Anniversary | |||||||
Business Acquisition [Line Items] | |||||||
Share-based compensation arrangement award vesting period | 30 months |
ACQUISITION - Assets Acquired a
ACQUISITION - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Oct. 29, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,219 | $ 4,219 | |
Karani, LLC | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 737 | ||
Accounts receivable | 1,521 | ||
Restricted cash, current | 50 | ||
Prepaid expenses and other assets | 177 | ||
Property and equipment | 119 | ||
Operating lease right-of-use assets | 100 | ||
Restricted cash | 3 | ||
Other long-term assets | 19 | ||
Intangible assets | 4,540 | ||
Goodwill | 2,131 | ||
Assets Acquired | 9,397 | ||
Accrued expenses and other current liabilities | 436 | ||
Operating lease obligations, current | 88 | ||
Operating lease obligations, non current | 12 | ||
Other long-term liabilities | 188 | ||
Liabilities Assumed | 724 | ||
Fair value of assets acquired and consideration transferred | $ 8,673 |
ACQUISITION - Intangible Assets
ACQUISITION - Intangible Assets Acquired (Details) - Karani, LLC $ in Thousands | Oct. 29, 2021USD ($) |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 4,540 |
Developed technology | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 640 |
Useful Life | 3 years |
Customer lists | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 2,800 |
Useful Life | 6 years |
Trade name | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 1,100 |
Useful Life | 10 years |
ACQUISITION - Pro Forma (Detail
ACQUISITION - Pro Forma (Details) - Karani, LLC $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 36,152 |
Net loss | $ (228) |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 14, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, capital shares reserved for future issuance | 250,000 | |||
Common stock reserved for issuance to participants | 24,690 | |||
Granted, Number of share of restricted stock (units) (shares) | 20,667 | |||
Stock-based compensation | $ 546 | $ 302 | ||
Coit Staffing, Inc. | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 42 | $ 90 | ||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, Number of share of restricted stock (units) (shares) | 22,019 | 154,911 | ||
Stock-based compensation | $ 504 | $ 212 | ||
Total compensation cost not yet recognized | $ 1,739 | |||
Weighted average service period | 1 year 5 months 12 days | |||
Granted, weighted average grant date fair value (usd per share) | $ 30.24 | $ 15.60 | ||
Restricted stock units | Vesting period one | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, Number of share of restricted stock (units) (shares) | 73,596 | |||
Restricted stock units | Vesting period two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, Number of share of restricted stock (units) (shares) | 53,075 | |||
Restricted stock units | Non-Employee Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, Number of share of restricted stock (units) (shares) | 1,352 | |||
Number outstanding shares (units)(shares) | 212,287 | |||
Restricted stock units, time | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, Number of share of restricted stock (units) (shares) | 25,500 | |||
Restricted common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 42 | $ 90 | ||
Total compensation cost not yet recognized | $ 83 | |||
Granted, weighted average grant date fair value (usd per share) | $ 9.57 | |||
Remaining expected life | 6 months 29 days | |||
Restricted common stock | Coit Staffing, Inc. | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock granted during period, shares, acquisitions (shares) | 52,226 | 52,226 | ||
Stock granted during period, issuance period | 30 months |
STOCK-BASED COMPENSATION - Vest
STOCK-BASED COMPENSATION - Vesting Conditions (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted, Number of share of restricted stock (units) (shares) | 20,667 |
Restricted stock units, type 1 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted, Number of share of restricted stock (units) (shares) | 15,667 |
Restricted stock units, type 1 | Performance Conditions, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Target, Group adjusted EBITDA, percentage | 100.00% |
Restricted stock units, type 1 | First Anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights, percentage | 33.00% |
Restricted stock units, type 1 | Second Anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights, percentage | 33.00% |
Restricted stock units, type 1 | Third Anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights, percentage | 34.00% |
Restricted stock units, type 2 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted, Number of share of restricted stock (units) (shares) | 5,000 |
Restricted stock units, type 2 | First Anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights, percentage | 66.60% |
Restricted stock units, type 2 | Second Anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights, percentage | 16.70% |
Restricted stock units, type 2 | Third Anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights, percentage | 16.70% |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 546 | $ 302 |
Restricted common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 42 | 90 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 504 | $ 212 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Granted, Number of share of restricted stock (units) (shares) | 20,667 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested restricted shares (units), beginning of the year (shares) | 167,893 | 14,676 |
Granted, Number of share of restricted stock (units) (shares) | 22,019 | 154,911 |
Shares earned above target, number of share of restricted stock (units) (shares) | 36,884 | |
Vested, number of share of restricted stock (units) (shares) | (84,337) | (5,439) |
Forfeited, number of share of restricted stock (units) (shares) | (1,675) | (11,411) |
Unvested restricted shares (units), end of the year (shares) | 140,784 | 152,737 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Unvested restricted shares of common stock (units), beginning of the year (usd per share) | $ 16.23 | $ 15.45 |
Granted, weighted average grant date fair value (usd per share) | 30.24 | 15.60 |
Shares earned above target, weighted average grant date fair value (usd per share) | 16.70 | |
Vested, weighted average grant date fair value (usd per share) | 16.17 | 16.01 |
Forfeited, weighted average grant date fair value (usd per share) | 14.54 | 14.54 |
Unvested restricted shares of common stock (units), end of the year (usd per share) | $ 18.60 | $ 15.65 |
Restricted Stock Units (RSUs), Performance -based | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested restricted shares (units), beginning of the year (shares) | 121,393 | 14,676 |
Granted, Number of share of restricted stock (units) (shares) | 20,667 | 126,671 |
Shares earned above target, number of share of restricted stock (units) (shares) | 36,884 | |
Vested, number of share of restricted stock (units) (shares) | (74,900) | (2,699) |
Forfeited, number of share of restricted stock (units) (shares) | 0 | (11,411) |
Unvested restricted shares (units), end of the year (shares) | 104,044 | 127,237 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Unvested restricted shares of common stock (units), beginning of the year (usd per share) | $ 15.88 | $ 15.45 |
Granted, weighted average grant date fair value (usd per share) | 30 | 15.79 |
Shares earned above target, weighted average grant date fair value (usd per share) | 16.70 | |
Vested, weighted average grant date fair value (usd per share) | 16.03 | 15.30 |
Forfeited, weighted average grant date fair value (usd per share) | 0 | 14.54 |
Unvested restricted shares of common stock (units), end of the year (usd per share) | $ 18.86 | $ 15.88 |
Restricted Stock Units (RSUs), Time-based | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested restricted shares (units), beginning of the year (shares) | 46,500 | 0 |
Granted, Number of share of restricted stock (units) (shares) | 1,352 | 28,240 |
Shares earned above target, number of share of restricted stock (units) (shares) | 0 | |
Vested, number of share of restricted stock (units) (shares) | (9,437) | (2,740) |
Forfeited, number of share of restricted stock (units) (shares) | (1,675) | 0 |
Unvested restricted shares (units), end of the year (shares) | 36,740 | 25,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Unvested restricted shares of common stock (units), beginning of the year (usd per share) | $ 17.15 | $ 0 |
Granted, weighted average grant date fair value (usd per share) | 33.90 | 14.75 |
Shares earned above target, weighted average grant date fair value (usd per share) | 0 | |
Vested, weighted average grant date fair value (usd per share) | 17.31 | 16.71 |
Forfeited, weighted average grant date fair value (usd per share) | 14.54 | 0 |
Unvested restricted shares of common stock (units), end of the year (usd per share) | $ 17.84 | $ 14.54 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Shares (Details) - Restricted stock - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested restricted shares (units), beginning of the year (shares) | 34,818 | 52,226 |
Vested, number of share of restricted stock (units) (shares) | 0 | 0 |
Unvested restricted shares (units), end of the year (shares) | 34,818 | 52,226 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Unvested restricted shares of common stock (units), beginning of the year (usd per share) | $ 9.57 | $ 9.57 |
Vested, weighted average grant date fair value (usd per share) | 0 | 0 |
Unvested restricted shares of common stock (units), end of the year (usd per share) | $ 9.57 | $ 9.57 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Provision for income taxes | $ 536 | $ 178 | |
Pre-tax income (loss) | $ 3,555 | $ (25) | |
Effective income tax rate | 15.00% | (721.00%) | |
U.S. Federal statutory rate | 21.00% | 21.00% | |
Unrecognized tax benefits | $ 360 | $ 360 | |
Income tax penalties and interest accrued | 115 | $ 110 | |
Possible decrease of unrecognized tax benefits | $ 400 |
EARNINGS (LOSS) PER SHARE - Com
EARNINGS (LOSS) PER SHARE - Computation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
EPS - basic and diluted: | ||
Basic (in dollars per share) | $ 1.02 | $ (0.07) |
Diluted (in dollars per share) | $ 0.97 | $ (0.07) |
EPS numerator - basic and diluted: | ||
Net income (loss) | $ 3,019 | $ (203) |
EPS denominator: | ||
Weighted-average common stock outstanding - basic (in shares) | 2,967 | 2,891 |
Common stock equivalents: stock options and restricted stock units (in shares) | 150 | 0 |
Weighted-average number of common stock outstanding - diluted (in shares) | 3,117 | 2,891 |
EARNINGS (LOSS) PER SHARE - Ant
EARNINGS (LOSS) PER SHARE - Antidilutive Securities Excluded From The Computation of Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 204,963 |
Restricted common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 52,226 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 152,737 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Oct. 29, 2021 | Oct. 01, 2020 | |
Goodwill [Line Items] | |||||
Goodwill | $ 4,219,000 | $ 4,219,000 | |||
Amortization expense of intangible assets | 277,000 | $ 80,000 | |||
Impairment of intangible assets, finite-lived | $ 0 | $ 0 | |||
Karani, LLC | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 2,131,000 | ||||
Coit Staffing, Inc. | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 2,088,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,020 | $ 6,020 |
Accumulated Amortization | (809) | (532) |
Net Carrying Amount | 5,211 | 5,488 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 80 | 80 |
Accumulated Amortization | (60) | (50) |
Net Carrying Amount | $ 20 | $ 30 |
Weighted Average Remaining Amortization Useful Lives (in years) | 6 months | 9 months 18 days |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,500 | $ 1,500 |
Accumulated Amortization | (166) | (118) |
Net Carrying Amount | $ 1,334 | $ 1,382 |
Weighted Average Remaining Amortization Useful Lives (in years) | 8 years | 8 years 2 months 12 days |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,800 | $ 3,800 |
Accumulated Amortization | (494) | (328) |
Net Carrying Amount | $ 3,306 | $ 3,472 |
Weighted Average Remaining Amortization Useful Lives (in years) | 5 years | 5 years 3 months 18 days |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 640 | $ 640 |
Accumulated Amortization | (89) | (36) |
Net Carrying Amount | $ 551 | $ 604 |
Weighted Average Remaining Amortization Useful Lives (in years) | 2 years 7 months 6 days | 2 years 9 months 18 days |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 823 | |
2023 | 1,070 | |
2024 | 1,034 | |
2025 | 787 | |
2026 | 577 | |
Thereafter | 920 | |
Net Carrying Amount | $ 5,211 | $ 5,488 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning Balance | $ 5,488 | |
Amortization | (277) | $ (80) |
Ending Balance | 5,211 | |
Non-compete agreements | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning Balance | 30 | |
Amortization | (10) | |
Ending Balance | 20 | |
Trade name | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning Balance | 1,382 | |
Amortization | (48) | |
Ending Balance | 1,334 | |
Customer lists | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning Balance | 3,472 | |
Amortization | (166) | |
Ending Balance | 3,306 | |
Developed technology | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning Balance | 604 | |
Amortization | (53) | |
Ending Balance | $ 551 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Apr. 08, 2019AUD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) |
Commitments And Contingencies [Line Items] | ||||
Legal Reserves | $ 0 | $ 0 | ||
Operating Lease, Cost | $ 277,000 | $ 177,000 | ||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 9 months 18 days | |||
Minimum | ||||
Commitments And Contingencies [Line Items] | ||||
Lessee, Operating Lease, Remaining Lease Term | 1 year | |||
Maximum | ||||
Commitments And Contingencies [Line Items] | ||||
Lessee, Operating Lease, Remaining Lease Term | 5 years | |||
NAB Facility Agreement | Line of Credit | ||||
Commitments And Contingencies [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 | |||
Debt Instrument, Termination of Debt Notice | 90 days | |||
Long-term debt | $ 0 | |||
Interest Expense | $ 5,000 | $ 5,000 | ||
Debt Instrument, Restrictions and Covenants, Number Of Times EBITDA Must Be Paid Total Interest Period Within A Period of Twelve Months Rolling Basis | 2 | |||
Debt Instrument, Restrictions and Covenants, Tangible Net Worth, Minimum | $ 2,500,000 | |||
Debt Instrument, Restrictions and Covenants, Tangible Assets, Minimum | 25.00% | |||
Variable Receivable Finance Indicator | NAB Facility Agreement | Line of Credit | ||||
Commitments And Contingencies [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.60% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 404 |
2023 | 352 |
2024 | 151 |
2025 | 90 |
2026 | 92 |
2027 | 31 |
Total | $ 1,120 |
ACCUMUATED OTHER COMPREHENSIV_2
ACCUMUATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | $ 52 | $ (85) |
Accumulated other comprehensive income (loss) | $ 52 | $ (85) |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Jul. 30, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||
Authorized amount of stock repurchase program | $ 10,000,000 | |
June 30 2015 Authorization | ||
Equity, Class of Treasury Stock [Line Items] | ||
Purchase of treasury stock (in shares) | 432,563 | |
Purchase of treasury stock | $ 8,297,000 |
SEGMENT AND GEOGRAPHIC DATA - S
SEGMENT AND GEOGRAPHIC DATA - Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | Segment | 3 | ||
Revenue, from external customers | $ 51,917 | $ 34,461 | |
Inter-segment revenue | 0 | 0 | |
Revenue | 51,917 | 34,461 | |
Adjusted net revenue, from external customers | 25,573 | 12,718 | |
Inter-segment adjusted net revenue | 0 | 0 | |
Total adjusted net revenue | 25,573 | 12,718 | |
EBITDA (loss) | 3,877 | 75 | |
Depreciation and amortization | (324) | (110) | |
Intercompany (expense) interest income, net | 0 | 0 | |
Interest income, net | 2 | 10 | |
Provision for (benefit from) income taxes | (536) | (178) | |
Net income (loss) | 3,019 | (203) | |
Accounts receivable, net | 28,924 | 25,748 | $ 25,748 |
Long-lived assets, net of accumulated depreciation and amortization | 9,852 | 10,078 | |
Total assets | 63,310 | 61,242 | $ 61,242 |
Inter-Segment Elimination | |||
Segment Reporting Information [Line Items] | |||
Revenue, from external customers | 0 | 0 | |
Inter-segment revenue | (96) | 0 | |
Revenue | (96) | 0 | |
Adjusted net revenue, from external customers | 0 | 0 | |
Inter-segment adjusted net revenue | 0 | 0 | |
Total adjusted net revenue | 0 | 0 | |
EBITDA (loss) | 0 | 0 | |
Depreciation and amortization | 0 | 0 | |
Intercompany (expense) interest income, net | 0 | 0 | |
Interest income, net | 0 | 0 | |
Provision for (benefit from) income taxes | 0 | 0 | |
Net income (loss) | 0 | 0 | |
Accounts receivable, net | 0 | 0 | |
Long-lived assets, net of accumulated depreciation and amortization | 0 | 0 | |
Total assets | 0 | 0 | |
Hudson Americas | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue, from external customers | 14,611 | 4,561 | |
Inter-segment revenue | 53 | 0 | |
Revenue | 14,664 | 4,561 | |
Adjusted net revenue, from external customers | 13,702 | 4,209 | |
Inter-segment adjusted net revenue | 16 | 0 | |
Total adjusted net revenue | 13,718 | 4,209 | |
EBITDA (loss) | 2,414 | (278) | |
Depreciation and amortization | (305) | (86) | |
Intercompany (expense) interest income, net | 0 | 0 | |
Interest income, net | 0 | 0 | |
Provision for (benefit from) income taxes | (42) | (9) | |
Net income (loss) | 2,067 | (373) | |
Accounts receivable, net | 11,711 | 8,765 | |
Long-lived assets, net of accumulated depreciation and amortization | 9,735 | 9,964 | |
Total assets | 26,047 | 22,214 | |
Hudson Asia Pacific | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue, from external customers | 31,133 | 25,340 | |
Inter-segment revenue | 12 | 0 | |
Revenue | 31,145 | 25,340 | |
Adjusted net revenue, from external customers | 8,213 | 5,758 | |
Inter-segment adjusted net revenue | (8) | 0 | |
Total adjusted net revenue | 8,205 | 5,758 | |
EBITDA (loss) | 2,027 | 762 | |
Depreciation and amortization | (11) | (14) | |
Intercompany (expense) interest income, net | (75) | (85) | |
Interest income, net | 1 | 1 | |
Provision for (benefit from) income taxes | (531) | (194) | |
Net income (loss) | 1,411 | 470 | |
Accounts receivable, net | 11,761 | 12,073 | |
Long-lived assets, net of accumulated depreciation and amortization | 57 | 68 | |
Total assets | 24,119 | 21,744 | |
Hudson Europe | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue, from external customers | 6,173 | 4,560 | |
Inter-segment revenue | 31 | 0 | |
Revenue | 6,204 | 4,560 | |
Adjusted net revenue, from external customers | 3,658 | 2,751 | |
Inter-segment adjusted net revenue | (8) | 0 | |
Total adjusted net revenue | 3,650 | 2,751 | |
EBITDA (loss) | 147 | 70 | |
Depreciation and amortization | (7) | (9) | |
Intercompany (expense) interest income, net | 0 | 0 | |
Interest income, net | 0 | 0 | |
Provision for (benefit from) income taxes | 16 | (17) | |
Net income (loss) | 156 | 44 | |
Accounts receivable, net | 5,452 | 4,910 | |
Long-lived assets, net of accumulated depreciation and amortization | 56 | 42 | |
Total assets | 8,472 | 9,370 | |
Corporate Segment | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue, from external customers | 0 | 0 | |
Inter-segment revenue | 0 | 0 | |
Revenue | 0 | 0 | |
Adjusted net revenue, from external customers | 0 | 0 | |
Inter-segment adjusted net revenue | 0 | 0 | |
Total adjusted net revenue | 0 | 0 | |
EBITDA (loss) | (711) | (479) | |
Depreciation and amortization | (1) | (1) | |
Intercompany (expense) interest income, net | 75 | 85 | |
Interest income, net | 1 | 9 | |
Provision for (benefit from) income taxes | 21 | 42 | |
Net income (loss) | (615) | (344) | |
Accounts receivable, net | 0 | 0 | |
Long-lived assets, net of accumulated depreciation and amortization | 4 | 4 | |
Total assets | $ 4,672 | $ 7,914 |
SEGMENT AND GEOGRAPHIC DATA - G
SEGMENT AND GEOGRAPHIC DATA - Geographic Data Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 51,917 | $ 34,461 |
Long-lived assets, net of accumulated depreciation and amortization | 9,852 | 10,078 |
Net assets | 42,792 | 39,316 |
Australia | ||
Segment Reporting Information [Line Items] | ||
Revenue | 28,386 | 23,474 |
Long-lived assets, net of accumulated depreciation and amortization | 27 | 29 |
Net assets | 9,472 | 7,925 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenue | 13,895 | 4,248 |
Long-lived assets, net of accumulated depreciation and amortization | 9,739 | 9,968 |
Net assets | 22,624 | 21,510 |
United Kingdon | ||
Segment Reporting Information [Line Items] | ||
Revenue | 5,773 | 3,871 |
Long-lived assets, net of accumulated depreciation and amortization | 56 | 42 |
Net assets | 2,931 | 2,729 |
Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | 3,863 | 2,868 |
Long-lived assets, net of accumulated depreciation and amortization | 30 | 39 |
Net assets | $ 7,765 | $ 7,152 |
STOCKHOLDER RIGHTS PLAN (Detail
STOCKHOLDER RIGHTS PLAN (Details) - $ / shares | Oct. 15, 2018 | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | |||
Rights | 1 | ||
Number of securities called by each warrant or right | 0.01 | ||
Common stock, par value (dollars per share) | $ 0.001 | $ 0.001 | |
Warrants and Rights, Preferred Stock to Common Stock Conversion, Treatment (in shares) | 1 | ||
Warrants And Rights, Not Exercisable, Number of Days After Public Announcement of Acquiring Person | 10 days | ||
Warrants And Rights, Not Exercisable, Number of Days After Tender or Exchange Offer Is Completed By Acquiring Person | 10 days | ||
Warrants and Rights, Option to Exercise, Market Value Multiplier of Purchase Price | 2 | ||
Temporary Equity, Redemption Price Per Share (dollars per share) | $ 0.001 | ||
Series B Preferred Stock | |||
Class of Stock [Line Items] | |||
Number of securities called by each warrant or right | 0.01 | ||
Common stock, par value (dollars per share) | $ 3.50 | ||
Minimum | |||
Class of Stock [Line Items] | |||
Ownership Percentage, Common Stock, Without Approval of Board | 4.99% |