Thank you, operator, and good morning, everyone. Welcome to the Hudson Global Conference Call for the First Quarter of 2012.

Our call this morning will be led by Chairman and Chief Executive Officer, Manolo Marquez; and Executive Vice President and Chief Financial Officer, Mary Jane Raymond.

At this time, I'll 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 involves 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 analysts' expectations or estimates or to update any forward-looking statements, whether as a 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 and adjusted EBITDA. A reconciliation is included in our earnings release and on our quarterly slides, both posted on our website, hudson.com.

I encourage you to access our earnings call slide at this time. They are posted under FEATURED DOCUMENTS on the website.

With that, I will turn the call over to Manolo Marquez.

Thank you, David, and good morning, everyone. Earlier today, we released results for the first quarter of 2012.

In this period, we were even more challenged by the economic environment than during the fourth quarter of 2011. The global economic headwinds created difficult market conditions, including delayed hiring decisions, pricing pressure and extreme weakness in the financial services sector.

Continuing soundness in Europe has spread to the Asia Pacific region, most notably to Australia and drove our first quarter results to the low end of our outlook.

Last year, we had started working on the transformation of Hudson. We defined our strategic focus areas and made initial progress on key global initiatives.

As we embark on our second year, we change gears from planning to execution. We will create a truly competitive organization that can succeed in good times and bad, and deliver significantly-improved bottom line performance.

Although we are now facing the additional challenge of confronting the global economic slowdown while we implement these changes, today's market conditions are also a catalyst for unleashing all of Hudson's potential. We will accomplish this by undertaking the necessary actions to build resilience to the harsh global economic environment of the moment and position our organization to capture future growth opportunities when the headwinds subside.

Before I provide details on this next phase of our transformation, let me give you an overview of the first quarter financials and highlights of our performance. Our CFO, Mary Jane Raymond, will take you through the financials in more detail later on the call.

Revenue for the quarter was $201 million, 8% lower from the year-ago period. In constant currency, revenue was 9% lower.

Gross margin was $73.2 million or 36.5% of revenue, down $8 million or 10% in reported and constant currency from the year-ago period. We anticipated the revenue decline this quarter and will reduce SG&A by 6% in both reported and constant currency compared to 1 year ago.

Our actions require $1.3 million in severance and other onetime costs taking due [ph] in Q1.

Adjusted EBITDA was a loss of $900,000, down $3.3 million when compared to a positive $2.4 1 year ago. After restructuring charges, EBITDA was a loss of $2.2 million, which compares to the positive $2.5 million 1 year ago.

As expected, the greatest negative in our first quarter was the continued reduced demand on our financial services sector, which accounted for about $3.7 million of the company's gross margin decline this quarter.

In terms of regional performance, the decline in Asia Pacific, following a sudden drop in the demand of permanent recruitment, accelerated from 5% in Q4 2011 to 12% in the first quarter of 2012 in constant currency. Together, financial services globally and permanent recruitment in Australia and New Zealand were responsible for $5.5 million in lower gross margin, or 70% of our gross margin difference from the previous year.

That said, there were a number of positive highlights this quarter as we continue to advance the strategy we put in place last year. The efforts of our teams across the world and the changes we began to make to our organization and operations from a local and global level in 2011 boosted performance in a number of key practices and geographies during the quarter.

We established RPO and eDiscovery as global practices in 2011 and they continue to make progress in the first quarter. RPO gross margin grew 16% in constant currency and 19% on a reported basis.

Growth was particularly strong in the Americas, over 100%, and solid in Europe as well, 27% in constant currency. We are capitalizing on the ongoing shift of companies seeking greater expertise and efficiencies through outsourcing talent acquisition functions.

With much of the demand for RPO requiring multiregional or global solutions, the ability to know and share multiple markets is a competitive advantage for us.

While legal eDiscovery declined this quarter by 12% due to gaps in large project workflow, this follows 8 consecutive quarters of year-over-year growth that averaged over 30%. We continue to advance our strategy in this market.

During the first quarter, we strengthened our project management office internally, and we also forged alliances with leading technology providers of advanced computer-assisted review, further developing an array of best-in-class solutions customized to meet our clients' needs.

In terms of our regional performance, our move toward higher value-added services delivered additional benefits through an expansion of our professional contract solutions businesses. We experienced 15% gross margin growth in the particularly well-penetrated markets of the Netherlands and Belgium.

These are higher-margin solutions where we serve as a trusted advisor, helping clients solve issues and improve business performance.

In Asia Pacific, we had some notable positives in the quarter. Our business in China continued to grow, where, excluding financial services, gross margin was up 20%.

Talent management in Asia Pacific also delivered solid growth in Q1, with increased demand for outplacement and assessment driving 31% gross margin growth in constant currency.

Looking at our sector data. Although the financial services sector underperformed this quarter as previously mentioned, we saw positive development in other industries.

Gross margin increased 12% in the energy and industrial sector and 11% in fast-moving consumer goods.

We are particularly proud of the confidence our clients place in us to find the right talent for their organization and to deliver the talent-based solutions that will help them succeed. I'd like to highlight just 2 of the new policies that we've forged in the first quarter.

Out of our Melbourne office, we formed an exclusive relationship with the International Cricket Counsel, ICC, to recruit the executive leadership team and a number of auxiliary positions across Australia and New Zealand for the Cricket World Cup. Cricket, as you know, is the second most popular sport in the world after soccer, with a potential television audience for this event of nearly 1 billion people.

And the leadership team for this event requires a unique set of capabilities that the ICC felt we were best suited to deliver.

In the Netherlands, the strategy to extend the Dutch public sector project solution business into the private sector was accelerated by our selection as the multiyear preferred partner for infrastructure talent projects by the Amsterdam Schiphol Airport, now an autonomous organization. We'll be providing engineering contracting solutions for the development of office complexes, hotels, parking facilities, terminal development and other large infrastructure works.

For all of the progress that we have made in our strategic priorities, we remain vulnerable to the economic uncertainty at the moment as are many other global companies. A relatively stable economy, as we experienced in the first 3 quarters of 2011, would have allow us to evolve our business structure and delivery model more gradually.

It's clear that we now need to be making progress faster. We must strengthen our organization to meet unstable economic conditions, advance our developments in markets of strength and protect our early successes.

first, continue investing in high-growth markets and services. We will redirect resources to drive sustainable growth from our higher potential opportunities.

This includes our strategic businesses such as RPO and eDiscovery, but also especially recruitment practices and sectors, contracting solutions, and markets like China, where growth has continued even during these last 2 difficult quarters.

Second, maintaining focus and commitment to high-performing teams, markets and services. We have many teams, practices and geographies that -- these businesses continue to receive our focus, and that we apply the lessons of the success and the skills of the leadership to inform our overall business.

Third, optimizing operations in underperforming markets. Now is the time to reevaluate our portfolio of businesses, offices and clients to focus on those that will deliver profitable growth and to reengineer our delivery model to successfully compete in all segments of the market in which we choose to operate.

Fourth, aligning our support functions for global efficiency. In 2011, we moved from 5 regions to 3.

We will establish shared services operations and global centers of excellence and move to further consolidate back-office support and streamline our business processes. These steps will result in significant efficiencies, add to organization flexibility and deliver improved operating performance.

And five, do the above while building the highest levels of employee engagement. In 2011, we articulated our long-term strategy and began to develop the programs that would allow us to engage and motivate our employees, provide the training that they would need and create a highly-productive work environment.

In 2012, we already launched a consistent global performance agreement process, with review timetables and measurable objectives and a global award program to recognize those who contribute the most to the company and live the company's values. We also implemented specific actions to address the most important areas of engagement, as suggested by our own employees.

By accelerating our transformation, as I just outlined, we are creating a dynamic market-leading company, more receiving to the vagaries of the economy and positioned to deliver consistent growth and profitability. However, as we equip Hudson to benefit from future opportunities, the combination of the current adverse market conditions, particularly in financial services, and reduced exposure to less profitable clients and markets will inevitably result in revenue decline in the short term.

In Q2, this will likely result in a revenue decline of about 20%. On a full year basis, revenue may decline about 15% compared to 2011.

Through the efficiencies that we will already achieve during the year, we anticipate delivering positive EBITDA in 2012 despite the $8 million to $10 million restructuring charge required to implement them. As we are taking actions early in the year, we expect to recover half of the charge this year and realize and annualize return on the charge that will approximately average twice the amount incurred.

I would like to reiterate our deep commitment to the expansion and optimization of Hudson higher value recruitment and contracting solutions businesses and appreciate the confidence that our investors, employees, clients and candidates have placed in us.

And with that, I will now turn the presentation over to Mary Jane who will provide more specific details.

Thank you, Manolo, and thanks to all of you for joining us today. We've posted some slides showing our results on the Hudson website, which you can refer to during the call.

First, let me give you a short summary of each region's first quarter performance. Market conditions remain soft through the first quarter and our revenue came in at the low end of our guidance at 8% below prior year, 9% in constant currency.

We took actions to address this as we said we would. Our EBITDA guidance was about breakeven at the operating level or before onetime items and we came in at a small loss of $900,000 at the adjusted EBITDA level.

We took $1.3 million of actions to address the prevailing conditions.

The Americas revenue was essentially flat to last year, with gross margin increasing 14%. Gross margin growth was driven by client expansion in RPO, offset somewhat by delays in project workflows and legal.

As you know, throughout the year, we often have a few major legal projects, but the timing of which quarter they fall into isn't always the same. Last year, 2 clients with a combination of regulatory and M&A work were strong contributors to the first and second quarter.

EBITDA before corporate charges was essentially flat to last year, owing to investments in our strategic businesses. We're proud of the profitability contributions that the Americas region is making, and that is helping our tax rate as well.

Europe's revenue declined 11% in constant currency and gross margins declined 15%. The entire revenue decline was in the U.K., which was affected by the continued weakness in financial services, and was in both contracting and perm.

In Continental Europe, despite ongoing sovereign debt issues and the lack of economic growth, our revenue grew 3% in constant currency. Gross margin, however, fell across Europe, generally due to the mix of the decline being more heavily weighted to perm.

Financial services accounts were about half the decline across Europe. The progress in our Scotland business and in our business in the Benelux region offset some of this decline and we expect to expand the delivery model advancements done in Scotland to similar areas of the business.

From a cost management point of view, we offset 60, 6-0 percent of the gross margin decline, and adjusted EBITDA was about 35% of last year.

In Asia Pacific, revenue declined 11% in constant currency and gross margin declined 12%. The retrenchment here, as well in the financial services sector, affected the whole region and that caused ripple effects in other industries.

Our 20% growth in China outside of financial services was, however, across a wide variety of industries. We offset 70, 7-0 percent of the gross margin decline, resulting in adjusted EBITDA that was approximately 1/3 lower than the first quarter of last year.

Turning to our second major topic, we have accelerated the implementation of our strategic initiatives. As clients' needs and hiring patterns have evolved, our model needs to evolve faster.

Our operating model today is fairly homogeneous, except for RPO, and that is not particularly well matched to important differences in client needs which are becoming more pronounced. Some of our client relationships today are unprofitable using a one at a time fulfillment method.

We will change our approach using best methods for the type of service being delivered, including, for example, delivery concepts from RPO. In some cases, some relationships or some practices or even offices, we may need to reevaluate what is required and make some hard calls on whether those requirements are best served by Hudson.

This more individualized approach to fulfillment has driven support function requirements as well. Now that we are operating as a more integrated global company, we can extract synergies in our operating platforms and back office functions.

We are taking the charge to accelerate this work, we had hoped to do it more gradually and build the costs of doing so into the increasing earnings. But under the current market conditions, changing gradually will just take too long.

I won't repeat the details Manolo gave you with respect to the charge other than to say that going forward, we will seek on a continuous basis additional opportunities to ensure that our business model is flexible to respond to market conditions.

Regarding our outlook for the second quarter, over the last 3 years, our sequential revenue growth from the first quarter to the second quarter has averaged roughly around 9%. Last second quarter was particularly strong, with some considerable year end hiring by RPO clients in Australia for clients with the June 30 year end, and 2 large projects in legal eDiscovery that were both full time for the entire quarter.

This year, sequential revenue growth could range from slightly down to up 5% over the first quarter. On a year-on-year basis, that would mean a decline of about 20% of prevailing exchange rates.

Of this, about 1/3 is expected from continued retrenchment in the financial services sector, about 20% is due to uncertainty in timing for larger projects from our global practices, at least 10% is from unprofitable client relationships we will not renew, and the remaining is from generally weak conditions.

The revenue will decline. We expect to deliver positive EBITDA for the full year because of the actions we are taking.

We expect the second quarter adjusted EBITDA to be between 0 and $3 million before restructuring charges. We expect the charge in the quarter to range from $4 million to 6 million and if we can accelerate the actions under our plan, we will.

In the second quarter of 2011, revenue was $247 million and EBITDA was $7.7 million.

Finally, I'll give you a few specific financial data points from the first quarter. Our first quarter included $900,000 of stock compensation expense compared to $600,000 in Q1 of last year.

Our primary driver was new hire grants in the second quarter of last year. Our tax rate was 17% for the quarter.

The rate will vary quarter-to-quarter, but the tax provision for the year should be between $2 million and $3 million, borrowing any unusual items and depending somewhat on exactly how we implement the actions in the charge.

Our DSO stayed consistent with Q1 of 2011 at 53 days, with notable improvements in Asia Pacific. CapEx was $1.8 million in the quarter.

We expect 2012 to be consistent with 2011 on a cash basis, not including some landlord-funded improvements for properties where the move will both lower the rent expense and create other operating efficiencies.

We ended the first quarter with $25 million in cash and $56 million in available borrowings, totaling $81 million in liquidity. We used $7 million in operating cash flow during the quarter, consistent with our expectations and down from last year's use of $10 million.

We also paid down our short-term borrowings that were outstanding at the end of Q4. All of this gives us significant financial flexibility going forward.

Overall, we are facing a market that has a mix of good and challenging opportunities. We also have incomparable assets in our company, in our people, our clients and our balance sheet.

The goal of our implementation program is to make our business stronger, more flexible and more profitable on a more continuous basis.

With that, Manolo and I would be happy to take your questions.

I was wondering, Mary Jane, if we can get a little bit more color on the guidance for the current quarter by geographic region.

Well, we don't give guidance by region. But I think generally speaking, we would expect North America to be flat conceptually to a little bit up.

We would also expect though, as we say with the trends that we indicated, to see both Europe and Asia Pac down a fair bit.

And you're talking year-to-year or sequentially?

Year-to-year.

Okay, great. And just to help us out a little bit, you mentioned the issues with the financial services area.

Can you give us a little bit more color on your exposure to financial services by geographic region?

Sure. The -- first of all, let me just say I wouldn't describe our company as inordinately dependent on financial services.

It is though, however, a fairly big part of our business in the U.K. As we said on prior calls, some of that is due to the fact that financial services tends to dominate the U.K.

economy as a general matter. The U.K., generally our financial services and exposure, is about -- it's a little north of 35%.

In the U.S. market, it's in the neighborhood of about 20%, more by serving the banks with services other than necessarily providing services to the direct banking area.

Continental Europe is relatively small at under 10%, and ANZ and Asia are in the range of about 15% to 20%.

Okay, great. That's helpful.

I just want to clarify something on the guidance for the year. In terms of expectations for positive EBITDA, is that after the expected restructuring charge, or is that before the expected restructuring charge?

It's after it.

It's after. Okay, great.

And then just a couple of other numbers-related questions. For 2012, what should we be modeling for capital spending and stock-based comp?

Well, for stock-based comp -- sorry, let's do the capital. The capital is in the neighborhood of about $7 million to $8 million, which should be pretty consistent with last year.

Stock-based comp was $900,000 in the current quarter and probably is in the range of about $4 million, $4.5 million.

I was wondering if you could talk a little bit more about what you're seeing on the legal side within the U.S. and what the prospects are there for the flow of projects to pick back up?

Mark, the Legal eDiscovery field is certainly growing. Where we have -- where we perceive is that over time, the estimated compounded annual growth rate of a whole sector in the U.S.

might be around 14%. The U.S.

today is 80% of the market. We believe that other regions, specifically in Europe, the U.K., will catch up with that, so their growth rate there might be faster.

We're already bullish about the opportunities of the industry. We have had, as we said, 8 consecutive quarters that averaged 30% growth.

I think that what we have seen here is that we have had these big projects that come -- every year, we have a couple of big projects coming in the year, but we cannot predict which quarter they came in. And last year, they came in fortunately for us at the beginning of the year, so that we are now comparing with the business that had these project outliers in last year.

And I think that the overall business in our case, we assume those projects still growing better than the average of the market. And hopefully, this year, we'll have these big projects in as soon as possible, like every other year has happened.

I'd just add 2 points to that, that is just a small point of history, too. I mean, at least once in my time here, I've taken the guidance down in the quarter for a legal project ending only to have them blow it out.

So I think we've seen the vagaries of legal projects in the past. I would just -- as Manolo said, we continue to see very good projects from the legal business in the marketplace, but one thing that we probably should keep in mind is that with the economic conditions of the world not really recovering -- legal cases are expensive, and we could see clients having possibly the same number of projects but working very hard to make them shorter, simply because there's a lot involved in a legal defense.

So we should keep that in mind. We could see a pattern, the differs [ph] a little bit on that, depending on how the economy unfolds this year.

Just to be clear, typically at the beginning of the year, you do see these big projects start up. Have they started up at this point?

Yes. Well, we have a strong business in legal.

The issues that we are comparing with last year where we had 2 big projects that were above the average size of the project that we usually handle.

We've seen some good starts, Mark. I think the fact remains that we do not necessarily always have a project start in the first quarter.

I mean, we've had a fair number that have not only started in the third, they have started in the fourth.

Got it, okay. But, I mean there's -- so from where -- from your perspective, it's just a matter of timing in terms of when those crank up, just nothing aside from that?

That's a fair point. I mean, it's very difficult to estimate the exact ramp up.

But when we look at the business as a whole, if we have vagaries in the project startup, is that seeing the scheme of the world? I think it's not -- there's nothing else going on.

I think there's simply a little bit of timing in how the projects are starting. Our business has done very, very well.

It continues to provide additional services to clients that are very valuable to them. And at the end of the day, as we've said many times, the U.S.

particularly is a very litigious society.

Got it. And can you talk about the expected savings?

What specific areas are those going to come in?

Well, obviously, as we -- let's just talk about the back office activities. As you know, we have a fairly robust infrastructure around the world.

And as we begin to look at ways to combine that, similar to what we did in the fourth quarter when we combined the IT, marketing and HR functions under not only a common leader, but began to combine the staff around the world to work on common sets of projects, we will do that as well in the finance area. We have already begun steps to combine the corporate accounting functions into the North America functions.

So I think one area, obviously, that we will begin to see them is in the support areas. And I think, as we said, as we look at businesses around the world where the delivery model may not be optimized to both the way the client needs the service delivered and frankly the clients' economics, I think we will begin to see changes in how we incur costs, deliver the revenue as well.

But the fact remains that the goal here is to simply make the company more flexible while we're doing that and be sure that we can respond to the client conditions as well.

A couple of questions. You're saying the EBITDA will be high enough this year to offset -- recover the $8 million to $10 million in charges?

Yes.

We are.

Terrific. You are getting rid of some unprofitable customers, which I don't think you've done in quite a while.

Could you elaborate on that?

Yes. Well, I mean, obviously, we are not going to mention anybody by name, but we'll give you an example that is pretty obvious.

We've got a client which was bringing around $4 million in revenue. That translated to only $300,000 in gross margin.

And obviously, the moment that you are bringing that gross margin down to the EBITDA, we were operating there at a loss. We have not focused in the past as much as making sure that every client relationship that we carry, we were able to deliver on a profitable way.

Here, we want to make sure that we put the objective profitable in all the growth that we bring to the company. And in these cases, we will talk with the client, we will see if we can adjust our delivery model to serve this client profitably, and if not, we'll walk out of those relationships.

Okay, sounds good. Also, Mary Jane, can you give us a little bit more in terms of the direction of the SG&A throughout the year?

Can you close by the fourth quarter below the first quarter levels?

On the SG&A? That is a good question.

Obviously, to have the EBITDA work as we have described, it will do so. I mean, part of the reason for taking some actions, even in the first quarter, was strictly actually to get the savings in the year.

So precisely how the savings will land and how the SG&A will go quarter by quarter, I probably couldn't tell you that precisely between Q2 and Q3. But I do think that it's very fair to say that the Q4 SG&A should be below Q1.

Wondering if you can describe a little bit on the pricing side and the areas that are economically challenged. What's your anticipation in terms of the pricing trends there?

Well, I think first of all, let's talk about clients' behavior around the world. I mean, obviously, with the economy not exactly screamingly thriving, we have clients who are striving to improve their profitability as well.

That's causing them to have a focus on pricing that probably isn't going away. We continue to see the introduction of purchasing into higher and higher levels of services that we provide, something else that's probably there to stay.

I think in some of our larger volume clients, we see trends. For example, like if the contractors are there for a long period of time, the margin falls.

That's hard to say whether or not that trend is permanent, but it certainly is with us today. And that's an area where not having our model flexible to both deal with that and anticipate that, in some cases, has been one of the reasons that I would say our return on revenue has not been as fast as we all might have liked it to be.

So those are some of the areas where we see pricing falling. I would say, in another way, where the per-unit price might not be moving, but as we described earlier in legal, I think increasingly clients are wanting to make projects shorter.

Any client that's defending something would like it to be over sooner rather than later as a general matter, and the discovery actions are very expensive. So some of the way that pricing and quotes is managed is also on the timeline that the project is -- the timeline over which the project is undertaken.

And I think that -- I mean, pricing pressure we have been experiencing in the last 3 years after 2008 recession. What we are doing now is reacting, making sure that when we feel that pricing pressure rather just concede and continue delivering with the same delivery model that we adjust the delivery model to make sure that if we decide to adjust pricing, we do that preserving our margins.

Great. And can you talk a little bit about what you're seeing on the continent with regards to -- obviously, the economic news has been quite choppy and in France and the Netherlands it looks like things are getting a little bit more difficult.

Can you describe what you're seeing on a monthly basis or how the trends are going? And if things deteriorate, if you have the necessary flexibility to adjust?

Yes. And I -- well, I think that is absolutely the key.

And the issues about our recruiting industry is that we are usually an early indicator of the macroeconomic situation. So in fact, we feel it sometimes before the news goes to press.

Today, in The New York Times, there is -- you can see the announcement that the Australia Central Bank is cutting the interest rate way below the expectation, 50 basis points, to react to the slumping of the Australian economy. And 3 months ago, when we were saying in our conference call that we were already seeing ripple effects of the economic condition of Europe into Australia and Asia Pacific, I mean, some people were surprised because that was not in the news.

So we are doing this year, because the economic situation, obviously we cannot control, is take the right actions. And by taking the right actions right at the start of the year, we are producing savings early on the year that we can recover and still deliver profitability as we adapt to the downturn that we are seeing, not only in Europe, as I have said, also in a major portion of Asia Pacific as well.

While we create a leaner organization, better adapt to operate profitably in these market conditions, we're also equipping Hudson to grow faster and more profitably when the headwinds subside. That's all we can do.

And as you say, the economic news vary from week to week. Three months ago, Europe was announcing that they had controlled the Greek debt crisis, and now back again Europe seems to be in trouble.

So it's very, very difficult to have a crystal ball on that economic condition. The only thing we can do is adapt to that and make sure we have a more solid operating model to cope with a weaker market.

If that's the case, operator, we will provide our closing remarks. Thank you all for joining Hudson's first 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.