Hudson Global Inc (HSON) 2013 Q2 法說會逐字稿

Good morning.

My name is Connie and I will be your conference operator today.

At this time, I would like to welcome everyone to the Hudson Global Q2 2013 earnings call.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer session.

(Operator Instructions)

I would now like to turn the call over to your host, Mr. David Kirby.

Please go ahead.

Thank you, Connie, and good morning everyone.

Welcome to the Hudson Global conference call for the second quarter of 2013.

Our call this morning will be led by Chairman and Chief Executive Officer, Manuel Marquez and Executive Vice President and Chief Financial Officer, Stephen Nolan.

In addition, during the question-and-answer portion of our call, Frank Lanuto, our Controller and Chief Accounting Officer and I will be available for answering questions.

At this time, I will read the Safe-Harbor statement.

Please be advised that except for historical information, the statements made during the presentation constitute forward-looking statements under applicable securities laws.

Such forward-looking statements involve certain risks and uncertainties, including statements regarding the Company's strategic direction, prospects and future results.

Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, risks associated with competition, seasonality and the other risks discussed in our filings made with the SEC.

These forward-looking statements speak only as of today.

The Company assumes no obligation and expressly disclaims any obligation to review or confirm analyst expectations or estimates or update any forward-looking statements, whether as the result of new information, future events or otherwise.

During the course of this call, references will be made to non-GAAP terms, such as EBITDA.

An EBITDA reconciliation is included in our earnings release and quarterly slides, both posted on our website, hudson.com.

I encourage you to access our earnings materials at this time.

They are posted on the website under Featured Documents and will serve as a helpful reference guide during our speakers' remarks.

I will now turn the call over to Manuel Marquez.

Thank you, David, and good morning everyone.

Earlier today, we've released results for the second quarter of 2013.

Our year-over-year comparisons continue to be tough.

We have started to experience sequential traction.

Compared to the second quarter last year, revenue declined by 16% and gross margin by 21%.

During the quarter, adjusted EBITDA was minus $2.5 million, including $700,000 of cost related to the CFO transition.

Our results continue to reflect the challenges of implementing a transformation plan in a difficult economic environment.

Let me be clear first.

We cannot be and I'm not satisfied with these financial results.

However, when we embarked on our Company's newest strategy to optimize our operations in mid-2011, we recognized that this would be a multi-year effort.

And we are encouraged by the clear signs of progress we made on both strategy and business performance in this past quarter.

Our gross margin and adjusted EBITDA grew sequentially in nearly all markets.

This includes our largest single country, Australia, the Americas and some of our Continental European businesses, which grew at a rate that exceeded last year's sequential growth in the second quarter.

In Europe, where economic conditions are particularly poor, our Netherlands specialty contracting business remained a solid performer, with revenue holding steady, as compared to the same quarter in 2012.

And our business in Spain increased its revenue, gross margin and adjusted EBITDA over the same quarter a year earlier, despite 26% unemployment in the country.

In France, we successfully completed the social plan required by the French government for restructuring and reorganization.

And we renegotiated our Paris Office lease.

We expect to save over $2 million annually, with a combination of just these two actions.

We are further encouraged by the renewed momentum of our two global practices, RPO and eDiscovery.

Our RPO business had significant wins in the quarter, including three sizable new agreements in the utilities, pharma and professional services sectors.

And our [success] on expanding global RPO relationships drove [quarter year-over-year] gross margin growth over the same period last year in both Europe, as well as in Asia Pacific.

Although the business is still far from its record levels of 2011, US Legal eDiscovery enjoyed significant contractor volume growth during the quarter.

Most importantly, our eDiscovery technology partnerships with Kroll and Lighthouse, which were just announced in January, resulted in a number of new agreements, including two projects successfully completed in the quarter.

We're really excited about the potential for these partnerships to further extend our presence in the market and expand our opportunities to identify and win new business.

Nearly two years ago, when we established our vision to make Hudson a world-class provider of talent solutions, delivering the highest quality service to clients and candidates, we emphasized that our most important priority was to enhance Hudson's potential to attract, engage and retain the best people in the business.

As a professional services firm, our success depends upon the quality and professionalism of our people.

We have made major strides in recent months in strengthening our leadership rank at Hudson by attracting world-class industry experience talent, who share our vision and optimism for the future of Hudson.

We believe that they will substantially improve our capabilities to execute on our strategy and drive topline growth.

I'd like to mention a few of those that have joined recently.

And starting with Stephen Nolan, together with me today, who is the former CFO of Adecco North America, where he drove disciplined execution, strengthened the company's shared services operation and improved financial performance.

Stephen's presence is already having a meaningful impact.

In just eight weeks with us, Stephen's experience and insight are helping us accelerate the improvements we're making to our business.

And I'm really thrilled to have him as a business partner.

Previously, we announced Lori Hock as CEO of our Americas region, who joined us after 25 years of continuous success and advancement at Adecco.

In just six months, she has made huge strides in the Americas, which will become more and more apparent over time.

In this most recent quarter, only her second with the Company, our American gross margins grew 14% sequentially and the business is gathering increasing momentum.

In fact, two new senior executives joined the Americas this month.

Anthony Martin will lead the Americas RPO and Talent Management business.

He joins us from Randstad, where he held roles leading product development, service delivery, and global strategy for the managed service business of the SourceRight division.

And Tony Caputo, who will take on the Senior Vice President, Sales and Business Development role for our Legal eDiscovery practice.

He has had a highly successful career leading sales organizations to phenomenal growth three consecutive time, including most recently at one of our technology partners, Recommind.

We expect that each of them will have a major impact on our Americas topline growth.

In Europe, Alexis de Bretteville has joined us to work with our European executive team and lead our French business.

Alexis is a 20-year veteran of Michael Page, and was a major contributor to their global growth in his many roles there.

Most recently, he was a member of their global Executive Board and Regional Managing Directors for all of the Americas.

In addition to those I mentioned by name, we have attracted accomplished executives in the Americas, Europe and Asia Pacific from Adecco, [Futurecept], Manpower, Mercuri Urval and (inaudible).

We are making big investments in people selectively, where their value will be greatest and the benefits will appear sooner rather than later.

The significant majority of our new leaders are replacing existing roles and the remaining ones are an important, high potential, revenue generating roles.

Further, a significant portion of their bonus is in equity, demonstrating their confidence in the future of Hudson and aligning their goals with the Company's goals.

With our now strengthened management team, we are much better equipped to drive disciplined execution and effective operational management throughout all our organization, accelerating the returns of our transformation.

And we continue improving our operating leverage, will help incremental gross margin gains convert favorably into our bottom line.

Of course, the converse is true and we'll certainly see some volatility as we advance the transformation over the next several quarters and pick up momentum in our performance.

During this, now second half of the year, our goals will be to continue the following.

First, building on our early traction evident in the second quarter and restoring topline growth to the business.

Second, focusing even more on RPO, eDiscovery and higher value recruitment and talent solution services.

Third, enhancing our processes and building efficiencies into our operations.

And fourth, investing selectively to maintain a solid balance sheet and enable future growth.

In spite of the challenges we still have in front of us, we believe we have left behind the most difficult part of our transformation and we are confident that we are well on our path towards unleashing the full potential of Hudson and delivering meaningful value to our shareholders.

With that I would now like to introduce Stephen Nolan, our new Global CFO and turn it over to him to provide you with more details on our second quarter results.

Thank you, Manuel, and thanks to all of you for joining us this morning.

I'm very pleased to be a part of Hudson.

I'm excited about the Company's prospects and the potential of its underlying business, the signs of progress we are making in our transformation and the great leadership team that has been assembled here.

As I finish my second month at Hudson, I still have a lot to learn, but it's clear that the task ahead of us now is to translate the strategy and the long-term vision into shorter-term success, to topline growth, disciplined execution and process improvements, all the while turning our current cash usage into cash generation.

These will be my areas of focus in the coming months.

While the Company's transformation is well underway and acceleration is a priority, it will take some time to fully deliver on these four critical business drivers.

As Manuel said, our second quarter results were below that of second quarter of 2012, as we expected, but showed progress in small and large ways.

Gross margin grew sequentially 7% on a reported basis and 9% in constant currency.

We experienced sequential gross margin growth in nearly every country, with the highest levels in Spain, Singapore and New Zealand, each growing between 34% and 45% in constant currency.

RPO gross margin was up 15% in Asia-Pac, helped by expansions within existing clients and increased volume at the close of a client contract.

Europe RPO was up 10% over the same period last year in constant currency.

In Australia and New Zealand, temporary and permanent recruitment saw a double-digit sequential increase, as we began to gain some traction in the market there.

Although the Americas gross margin was down year-over-year in the second quarter, as we anniversaried some larger projects in 2012, our Legal eDiscovery business in the US is starting to show traction, as we had 16% more temporary contractors on billing from April to June.

The legal pipeline appears reasonably strong at this point in time.

Still, our business is in the midst of a transformation, with plenty of work to do.

We are more meaningfully affected now by economic headwinds than we expect to be once a strong operational foundation is restored.

And there are some stark realities to our second quarter results.

As you know, the Asia Pacific region and especially Australia and China are particularly important for us and we are closely working with the regional management team to improve our operations there.

In Australia, there has been a hiring pullback and a decline in business confidence, impacting the market for permanent recruitment.

In our case, this contributed to a 24% constant currency drop in gross margin in that market.

New Zealand's performance was better, with gross margin declining by only 6% on a year-over-year basis.

In China, the economic slowdown and the struggles of multinational technology firms, which has been our core client base, resulted in a drop of 25% in gross margin on a year-over-year basis.

Our large European markets of the UK, Belgium and France suffered in the face of challenging economic conditions, with gross margin dropping approximately 20% in constant currency in these markets.

All that said, I've hit the ground running and I'm working with our leaders in every market to find ways to accelerate our performance improvements in the short term.

Here are some additional data points on the second quarter.

We incurred $1.2 million in restructuring charges in Q2 for real estate actions in France and staff actions in the US and corporates.

Year-to-date, we have incurred $3.2 million in restructuring.

We expect to incur the remaining $800,000 of our Board-approved charge in the second half of the year.

We expect approximately 1.5 times annual return on the charges taken so far this year.

Our second quarter results included $900,000 of stock compensation, compared to $1 million a year ago.

As previously noted, the 2013 management grant was allocated in May, as opposed to our traditional February timing and this timing difference impacted first and second quarter costs.

The lower stock price in 2013 also plays a role.

The full-year cost for equity is expected to be approximately $2 million to $2.5 million.

Our Q2 tax provision was $140,000.

A year ago, we disclosed and reversed a tax reserve of $3 million, so the year-over-year comparison is less meaningful.

For the year, we expect to record an overall tax expense of approximately $0.5 million, principally for withholding taxes.

Our DSO was 50 days, flat to a year ago and a one-day improvement from the first quarter.

We ended the quarter with $28 million in cash and $36 million in available borrowings, totaling $64 million in liquidity.

We used $3.4 million in operating cash flow during the quarter and had $700,000 in borrowings at the quarter end.

Most of our availability is based on our accounts receivable and therefore will expand and contract with the size of the business.

In Q2, about 90% of our availability came from our two largest credit facilities, RBS, supported by the US and UK AR, and Westpac, supported by the Australia, New Zealand accounts receivable.

The remaining availability came from our smaller facilities in Continental Europe and Asia.

Capital expenditure was $500,000 in the quarter.

We have postponed some planned CapEx expending and now expect full-year capital expenditures to be between $4 million and $5 million, down from our original estimate of $6 million to $8 million.

In terms of the current outlook, we considered a few factors.

The economic environment remains challenging.

We are still executing a transformation and as a result, the path will likely remain bumpy.

Q3 will likely suffer from traditional seasonality, driven by August slowdowns in Europe and transitions in RPO accounts in Asia Pacific.

With all this in mind, our outlook look for the third quarter is for revenue of $165 million to $175 million at prevailing exchange rates and an adjusted EBITDA loss of between $3 million and $5 million.

This revenue range implies a year-over-year decline of between 7% and 12%.

Regionally, I expect the Americas to perform better than our overall Company year-over-year revenue range, Europe to be within the range and Asia-Pacific to be lagging the range, both because of tough conditions and the weaker Australian dollar.

As I look out beyond Q3, I see a Company with real strength in its underlying assets, its global footprint and its people.

With a focus on our disciplined execution, efficiency gains in our operations and strong recent additions to the team, we expect to show good progress in the coming quarters.

I look forward to working with Manuel and the team on improving the operational and executional drivers I have discussed today.

We welcome your questions at this time.

Connie, please open the lines for Q&A.

(Operator Instructions) Jeff Silber, BMO Capital Markets.

Thank you so much.

I just wanted to follow up on the outlook comments that you were kind enough to give us some color about expectations by geographic segment on the topline.

I was hoping you could do the same thing that underlied your EBITDA forecast?

Morning, Jeff.

The EBITDA by region will depend on what our topline does and within the guidance of the fairly wide range.

But as I've given that, the trends are expected to largely follow the regional revenue statements.

So compared to Q2, we'd expect broadly similar trends in the Americas, with some seasonal weakness in Europe and potentially some weaker results in Asia-Pacific.

Okay.

Great.

And then, just kind of stepping back and looking at the Company as a whole, obviously you've got a lot of different parts that are moving to some extent in different directions, some improving some not.

Is it worth kind of stepping back and maybe taking a strategic review of the entire Company to see what pieces fit in and what pieces may not?

You're asking that question as a newcomer, right?

No.

To some extent, I think that might give you an opportunity to get some fresh eyes on the business?

Okay.

Well, certainly, yes.

I mean on the one hand, Jeff, I bring in fresh eyes, I bring in eyes, I've been in the staffing business for the last eight-plus years.

So used to a kind of multi-practice, multi-disciplined business, based on my experience at Adecco, and each one has its own, sort of, dynamics that go with the cycle.

There are, for sure, some great businesses here.

RPO and eDiscovery, I think, I've seen some real strength there.

There are, I think, some geographies that we seem to be struggling in that we'll be looking at.

And we're heavily dependent on perm and that's been a bit soft for us.

So I think that's my early indication at this point and maybe, Manuel, do you want to add anything else?

Yeah.

I mean, I think that usually what you see -- what we have seen in past recessions is that they will ignore the [static couple] on the same space and we see that when Europe was going down America was holding or vice versa and in 2012, at the beginning, I believe, the emerging markets played an important role.

Now everything is locking into the same place and it looks like everyone is struggling.

Potentially, the Americas is doing a little bit better, but I think that in broader terms, and you can discuss and we've discussed that that we'll always do pruning whenever we need to do pruning.

But in broader terms, I think that's good that we have a diversified platform, with Asia Pacific, Europe and the Americas the three regions.

I think that the one region where we feel that we were underinvested was precisely the Americas.

The Americas today is only 15% of our gross margins.

And in global companies, because of the size of the economy and the opportunities here, the Americas should play more like a 40% weight in your global portfolio.

So the fact that we now have an excellent leader in the Americas and we are seeing her getting traction that we are investing in new leaders here, hopefully will make the Americas grow and take advantage of the green shots that we are seeing in the region.

Okay.

Appreciate the color.

Thanks so much.

Mark Marcon, Robert Baird.

I was wondering if you could add a little more color, Manuel, with regards to what you are seeing in the Americas.

You indicated that things are likely to improve.

The year-over-year change in the Americas was down a little bit worse in Q2 than it was in Q1 against an easier comparisons.

So can you talk a little bit about what you're seeing that's improving and how we should think about those trends going into Q3?

Yes.

Well, I think -- we thought -- I'm going to hesitate to give you a specific date, but I think in the Americas you will see sooner than anywhere else to restore year-on-year growth pretty soon.

So I think that you'll see that coming very soon.

And, obviously, this is work in progress, as I said.

Lori Hock has been in command of the Americas only for six months, and she needs to get some time.

There are two factors that make the comparison on Q2, year-on-year, hard, specifically related to that two practices that carry today most of the weight of the American business, RPO and eDiscovery.

In RPO, we have a very large client that was acquired by another client and decided to put all the RPO business inside.

That happened in Q2.

Not only that business has disappeared, but in Q2 last year, they decided to hire all of the employees that had some [hat] in the account.

And because of the contract that we had, they had a temp to perm type of fee that inflated the Q2 results last year.

So that makes a hard comparison on RPO quarter-to-quarter.

However, we have won sizable new businesses in RPO, which we are implementing during this quarter.

And we know that this business will be ramping up and in Q3 and Q4 we will be compensating that loss of the client.

On eDiscovery, which is the other major practice, last year we had a few large projects with major clients that are still a client of us, but that have no current projects today, because they are not in litigation.

So we have lot of clients, they are still there, but that comparison looks hard.

The good thing and the confidence that I've got in eDiscovery, as Steve and I have underscored, is that we are seeing the traction.

During the Q2, we have increased the number of contractors on billing up 16% from the beginning to the end of the quarter.

We have crossed, again, the mark of 1,000 contractors on billing that we didn't have a few months ago.

And most importantly, the technology deals that we have announced in January with Kroll and Recommind, both generated new business.

That new business came all in Q2.

So they were the first deals that we have signed off.

We have already closed two contracts with them.

The gross margin coming from those contracts was much higher than the one we had on staffing.

So that shows that the strategy is working well.

And also, when you see some of our competitors that are doing better, their growth is fueled by the technology embedded in their solutions.

So that was a good bet too.

In addition to that, we will be revamping the way we conduct sales in eDiscovery by having Tony Caputo joining us from one of our other technology partners, Recommind.

Tony is a veteran in the industry, but he's originally an EDS employee.

So he really understands the weight of technology in eDiscovery and has a very successful track record in growing sales in the different companies.

So with our reinforced sales team, with the traction that we are seeing, with the technology partnerships starting to bear fruit and all that under the new leadership from Lori, I'm very confident that Americas is back on track.

Okay.

And can you talk a little bit about some of the specific steps that Lori has implemented to change the operational focus and what are you starting to see from that?

So, I think that Lori is doing three major things that are performing and getting the Americas in gear.

We've mentioned the attraction of leaders, our new leaders, to reinforce our management team.

I think that and I have underscored that also on my script, a professional services company starts turning the corner when you start attracting leaders.

If you become a talent magnet and the new leaders that come on board can attract new leaders that's kind of a path for growth.

It's all about the quality of the people you've got.

So the fact that we have become a talent magnet now, we talk about this of great leaders, it's a very positive outcome of what we have started to do.

The second thing that Lori has done is she has started a project that is similar to something that she ran in Adecco, so she had a high expertise on that front, and by the way, she did that together with Stephen Nolan, so it's great that both of them work together here as well, that we internally codenamed Project Bloom, which is looking at all the way from soup to nut of getting a business, until we execute the business and re-engineer the process to look for effectiveness.

She has started that project in February and we are already starting to get the return from all the effort that she has made on fine-tuning and making much more efficient and productive the delivery part of the chain.

And then the third thing that she is doing and she is great at that is being a leader on the market front, making a much more client-centric organization, activating all our managers and troops to be closer to the client, to be much more selective on the time that we take to ensure that we look for client satisfaction and then we create traction on that front from the target on larger accounts.

Great.

And so, it sounds like the product of all of those efforts is, you know, we should see some -- obviously, July and August are tough periods just from a seasonal perspective, but on a year-over-year basis, we should see some improvement in terms of a lower level of year-over-year decline, is that correct?

Yeah.

And pretty soon a year-over-year growth.

Manuel, are you thinking that's sometime next year, or are you thinking that that's even possible sometime this year?

It is possible sometime this year.

Okay, great.

And then what are you seeing with regards to Europe?

You made some positive comments with regard to Spain.

It looks like the U.K. is improving from a macro perspective.

Can you give us a little bit more of a sense in terms of the country-by-country dynamics over there and how that should unfold in terms of your plans over the next six months?

So, it's all of our leaders and we just talked about Americas and see how much of an impact a new leader that is coming, hitting the road running, with previous market experience and with also a reputation and a network in the market, so that she can be recognized [own] clients and talents, how much that happens.

So, in Europe, we have done the same in France by recruiting Alexis de Bretteville.

Alexis is, as I said, a Michael Page veteran for 20 years.

He is a French national.

He started in Michael Page in France.

And you see his CV, I guess, on our Web page and on the press release that we announced this morning.

But he is very well versed in Europe.

He has started Michael Page in Spain, he ran Southern Europe.

Then he restructured and turned to profit Michael Page in Germany and led Central, Northern Europe.

Then with that he was moved to the Americas in 2006, where he has spearheaded the growth of Michael Page in the U.S., but mainly in South America where he turned that to be second-most profitable region of Michael Page.

So that's our legacy in France.

France is a tough market.

It took us time to restructure that.

We have helped Alexis.

So before he came in, we made the restructuring of a social plan, which took time in France, and also renegotiated our leads, which puts France almost to a breakeven rate, depending on the actions that Alexis would take in the next few months.

And France should be an important market for us.

I mean, unfortunately, we're not in Germany.

In [Continental Europe] that's the other one large market.

We have a fantastic business in Belgium.

We are a market leader over there.

Ivan de Witte, who is the Founder and Chairman of our business in Belgium and he's a major market force over there.

He has been the Founder in Belgium of the Federation of Recruiting Firms and clearly putting Hudson to a top leadership position in the market.

(inaudible) helping us in France and in Sweden, until we secured Alexis and the leader I'm going to talk about in Sweden.

But Ivan is now having Alexis and [Anna Remnelius] in Sweden to help him in Europe and he can concentrate to help us in Belgium.

So I'm sure that Belgium will be benefiting from Ivan's more dedication to the market very soon.

In Sweden, we recruited and joining us in January, one of the top leaders of Mercuri Urval, which is a market leader of Sweden.

And Anna is also getting traction in Sweden.

Spain will have a great leadership team.

They have used talent management in a way to counter the fall of permanent recruitment.

So by focusing more on talent management, today the Spanish business is 50% talent management, 50% recruitment, from 30% talent management a couple of years ago.

And that has made the business much more resilient.

In the market we saw our competitors are suffering as well.

In the Netherlands, we had started three years ago on a program to put much more value on our contracting solutions, including some project management and a scope of work type of services, mainly dedicated to the engineering, sophisticated engineering and energy sectors.

That business was almost non-existing for us a few years ago, now it is a major part of the business, a major part of our growth.

We saw the results published by our main competitors in the Netherlands, a major, large recruiting multinational headquartered in the Netherlands, who has a similar business, [Dana] and they were decreasing and we have been staying flat there.

So we are really confident that we are winning market share through this strategy.

So that kind of goes to the major markets of Continental Europe.

Finally, the U.K., in the U.K., as you know, 40% of our business was in financial services, very much is skewed to the city.

That had been suffering.

We have a great leader in the U.K. who was leading our Scottish region in the U.K. who has performed very well, again holding up against the recession.

And we have asked her to take charge of England as well.

She has done that a few months ago.

And we are still in work on progress in England.

So we're not getting all the traction that I would like to have over there.

That's probably the story that -- where we need to stay focused in the next few months.

But I'm also confident that we've got a great leader there.

And we're going to put that back in shape.

[Theo Moscovitz]

Good morning, Manuel.

Good morning.

It's terrific to see some sequential increase in sales here.

That's a real positive.

Congratulations on that.

Thanks.

We'll have to start there and then transform that into year-on-year growth.

Right.

It's been about two years now, so when are shareholders going to see, in your view, a return to profitability?

All these things sound really good, but when are we going to see profitability?

Yes.

Well, that has to happen.

I mean I know that has to happen real soon.

I mean, we have not put that in the guidance and I'm not going to give you an exact date.

But we know, Stephen and I are very conscious that we need to do that really soon.

How soon is soon?

Really soon.

So it has to happen in the next two quarters.

(multiple speakers).

Okay.

Well, what are the things we've noticed with your presentation here it sounds good, attracting key people, leaders.

However, with the Company's priced at just $0.10 on the dollar in terms of sales, one-tenth of sales, why is it we haven't seen any insider buying by either officers or directors?

It questions management's and the Board's commitment and engagements here and alignment with public shareholders?

Well, I think that you have to take into account the restriction that we have on our open windows and with all the information that I've shared with you that I'm sharing with you now, the fact that we're changing our CFO, that we are having conversations with Stephen, we were restricted from buying.

So maybe you want to ask me that same question after the next open window.

Okay.

Fair enough.

Thank you.

[Tai Gabatus].

Hi, Manuel.

Hi, Tai.

Good morning.

How are you?

Your comment that the U.S. is under-represented, I agree, especially with that loss carry-forward.

But are there any steps you have considered, besides just relying on e-legal and RPO to get that representation up?

Well, I mean I think that we are focusing on organic growth at this moment.

We have also a clear mind that we don't want to lose our shareholders.

And at this moment, we cannot consider any acquisitions.

So the best way to grow organically is betting on those two practices.

We are holding on our IT practice, which is very good too, it's profitable.

We are focusing that on large clients.

But it's difficult to scale up the IT practice on the same way that we can scale up RPO and eDiscovery.

Okay, thanks.

That's helpful.

Thank you, Tai.

(Operator Instructions) Jeff Silber.

Sorry, just a couple of quick follow-ups.

You had mentioned about insider potential, insider buying.

When does the window open up again?

August 6.

August 6. Okay, great.

And then from a modeling perspective, what should we be modeling for corporate expenses in the current quarter?

I know it was a little bit high in the second quarter.

It should be about flat -- I would say, excluding the unusual item in Q2.

So probably about $4 million.

I'm sorry.

The unusual item in Q2 was roughly how much?

$700,000.

$700,000.

Okay, great.

Thanks so much.

Okay, Jeff.

There are no further questions at this time.

Thank you, operator and thank you all for joining the Hudson Global Second Quarter Conference Call.

Our call today has been recorded and will be available later today on the Investors section of our website, hudson.com.

Thank you and have a great day.

Ladies and gentlemen, thank you for participating.

This does conclude today's conference call.

You may now disconnect.