SecProbe.io

CORRESP
1
filename1.htm

Correspondence Letter

 December 23, 2005

 Ms. Melissa Hauber

 Senior Staff Accountant

 Securities and Exchange Commission

 Division of Corporate Finance

 Mail Stop 3561

 Washington, D.C. 20549

Re:
Hudson Highland Group, Inc.

Form 10-K for Fiscal Year Ended December 31, 2004

Filed March 14, 2005

Forms 10-Q for Fiscal Quarters Ended

March 31, 2005 and June 30, 2005

File No. 0-50129

 Your letter of August 25, 2005 and

 Your letter of October 4, 2005

 Ladies and Gentlemen:

 In response to your
letter of October 4, 2005 and our discussion with you on November 22, 2005, we are supplementally providing to you (i) our financial reports for the September 30, 2005 fiscal period, which is an example of all of the reports
provided on a regular basis to our chief operating decision maker and (ii) our organizational chart.

 Further, in accordance with your request, we acknowledge that:

•

The company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

•

The company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 We appreciate your consideration of this response. I am available to discuss these matters and can be contacted at
(212) 351-7232.

 Sincerely,

 /s/ Mary Jane Raymond

 Mary Jane Raymond

 Executive Vice President & Chief Financial Officer

 Enclosures – as noted

 2

 Exhibit 99.1

 September 2005 Board Report

 Profit & Loss Summary

 US$ millions (except per share amounts)

September 2005

September 2004

Month

Quarter

Year

Month

Quarter

Year

 Revenue

*

$
356.6

$
1,074.3

*

$
315.0

$
912.3

 Direct costs

*

221.4

669.8

*

198.6

571.0

 Gross margin

*

135.2

404.5

*

116.4

341.3

*

37.9
%

37.7
%

*

37.0
%

37.4
%

 Salaries and related

*

93.8

283.3

*

84.9

254.1

 Office and general

*

32.9

98.7

*

30.9

92.1

 Adjusted EBITDA

*

8.5

22.6

*

0.6

(4.9
)

 M&I/reorg/spin

*

(0.1
)

0.1

*

3.0

3.1

 EBITDA

*

8.7

22.5

*

(2.4
)

(8.0
)

 Non-operating (income) expense

*

(0.4
)

(0.4
)

*

(0.1
)

1.8

 Depreciation & amortization

*

4.2

13.7

*

4.4

14.4

 Interest

*

0.3

1.3

*

(0.2
)

0.1

 Tax

*

2.2

5.4

*

0.5

1.3

 Net income (loss)

*

$
2.3

$
2.5

*

$
(6.9
)

$
(25.4
)

 Income (loss) per share:

 Basic

$
0.10

$
0.12

$
(0.34
)

$
(1.33
)

 Diluted

$
0.09

$
0.11

$
(0.34
)

$
(1.33
)

 Weighted average shares outstanding:

 Basic

23.9

21.7

20.3

19.1

 Diluted

25.5

23.0

20.3

19.1

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 Detailed Monthly Profit & Loss

 US$ millions (except headcount information)

 Actual

 Sep 2005

PF3

Prior Year

Sep 2005

Var F/(U)

Sep 2004

Var F/(U)

$

%

$

%

 Temporary contracting revenue

*

*

*

*

*

*

*

 Permanent placement revenue

*

*

*

*

*

*

*

 Human capital solutions revenue

*

*

*

*

*

*

*

 Other revenue

*

*

*

*

*

*

*

 Revenue

*

*

*

*

*

*

*

 Temporary contracting gross margin

*

*

*

*

*

*

*

 Permanent placement gross margin

*

*

*

*

*

*

*

 Human capital solutions gross margin

*

*

*

*

*

*

*

 Other gross margin

*

*

*

*

*

*

*

 Gross margin

*

*

*

*

*

*

*

 Temporary contracting gross margin

*

*

*

*

*

*

*

 Gross margin

*

*

*

*

*

*

*

 Salaries and related

*

*

*

*

*

*

*

 Office and general

*

*

*

*

*

*

*

 Adjusted EBITDA

*

*

*

*

*

*

*

 M&I/reorg/spin

*

*

*

*

*

*

*

 EBITDA

*

*

*

*

*

*

*

 EBITDA as % of revenue

*

*

*

*

*

*

*

 EBITDA as % of gross margin

*

*

*

*

*

*

*

 Non-operating (income) expense

*

*

*

*

*

*

*

 Depreciation & amortization

*

*

*

*

*

*

*

 Interest

*

*

*

*

*

*

*

 Tax

*

*

*

*

*

*

*

 Net income (loss)

*

*

*

*

*

*

*

 Total head count

*

*

*

*

*

*

*

 Total HC turnover

*

*

*

*

*

*

*

 Consultant : Admin FTE

*

*

*

*

*

*

*

 Consult+Admin : Support FTE

*

*

*

*

*

*

*

 GM / FTE (’000)

*

*

*

*

*

*

*

 Salary & related / FTE (’000)

*

*

*

*

*

*

*

 Office & general / FTE (’000)

*

*

*

*

*

*

*

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 Detailed Quarterly Profit & Loss

 US$ millions (except headcount information)

 Actual

 Sep 2005

PF3

Prior Year

Sep 2005

Var F/(U)

Sep 2004

Var F/(U)

$

%

$

%

 Temporary contracting revenue

258.5

*

*

*

223.7

34.8

16
%

 Permanent placement revenue

*

*

*

*

*

*

*

 Human capital solutions revenue

*

*

*

*

*

*

*

 Other revenue

*

*

*

*

*

*

*

 Revenue

$
356.6

*

*

*

$
315.0

41.6

13
%

 Temporary contracting gross margin

47.9

*

*

*

39.3

8.6

22
%

 Permanent placement gross margin

*

*

*

*

*

*

*

 Human capital solutions gross margin

*

*

*

*

*

*

*

 Other gross margin

*

*

*

*

*

*

*

 Gross margin

$
135.2

*

*

*

$
116.4

18.8

16
%

 Temporary contracting gross margin

18.5
%

*

*

*

17.6
%

0.9
%

 Gross margin

37.9
%

*

*

*

37.0
%

1.0
%

 Salaries and related

93.8

*

*

*

84.9

(8.9
)

-10
%

 Office and general

32.9

*

*

*

30.9

(2.0
)

-6
%

 Adjusted EBITDA

$
8.5

*

*

*

$
0.6

7.9

1275
%

 M&I/reorg/spin

(0.1
)

*

*

*

3.0

3.1

105
%

 EBITDA

$
8.7

*

*

*

$
(2.4
)

11.0

464
%

 EBITDA as % of revenue

2.4
%

*

*

*

-0.8
%

3.2
%

 EBITDA as % of gross margin

6.4
%

*

*

*

-2.0
%

8.4
%

 Non-operating (income) expense

(0.4
)

*

*

*

(0.1
)

0.3

197
%

 Depreciation & amortization

4.2

*

*

*

4.4

0.2

3
%

 Interest

0.3

*

*

*

(0.2
)

(0.5
)

-263
%

 Tax

2.2

*

*

*

0.5

(1.7
)

-313
%

 Net income (loss)

$
2.3

*

*

*

$
(6.9
)

9.2

133
%

 Total head count

3,840

*

*

*

3,767

73

2
%

 Consultant : Admin FTE

*

*

*

*

*

*

*

 Consult+Admin : Support FTE

*

*

*

*

*

*

*

 GM / FTE (’000)

*

*

*

*

*

*

*

 Salary & related / FTE (’000)

*

*

*

*

*

*

*

 Office & general / FTE (’000)

*

*

*

*

*

*

*

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 Detailed Year to Date Profit & Loss

 US$ millions (except headcount information)

 Actual

 Sep 2005

PF3

Prior Year

Sep 2005

Var F/(U)

Sep 2004

Var F/(U)

$

%

$

%

 Temporary contracting revenue

772.8

*

*

*

641.7

131.0

20
%

 Permanent placement revenue

*

*

*

*

*

*

*

 Human capital solutions revenue

*

*

*

*

*

*

*

 Other revenue

*

*

*

*

*

*

*

 Revenue

$
1,074.3

*

*

*

$
912.3

162.0

18
%

 Temporary contracting gross margin

138.4

*

*

*

110.2

28.2

26
%

 Permanent placement gross margin

*

*

*

*

*

*

*

 Human capital solutions gross margin

*

*

*

*

*

*

*

 Other gross margin

*

*

*

*

*

*

*

 Gross margin

$
404.5

*

*

*

$
341.3

63.2

19
%

 Temporary contracting gross margin

17.9
%

*

*

*

17.2
%

0.7
%

 Gross margin

37.7
%

*

*

*

37.4
%

0.2
%

 Salaries and related

283.3

*

*

*

254.1

(29.2
)

-11
%

 Office and general

98.7

*

*

*

92.1

(6.6
)

-7
%

 Adjusted EBITDA

$
22.6

*

*

*

$
(4.9
)

27.5

559
%

 M&I/reorg/spin

0.1

*

*

*

3.1

3.0

97
%

 EBITDA

$
22.5

*

*

*

$
(8.0
)

30.5

380
%

 EBITDA as % of revenue

2.1
%

*

*

*

-0.9
%

3.0
%

 EBITDA as % of gross margin

5.6
%

*

*

*

-2.3
%

7.9
%

 Non-operating (income) expense

(0.4
)

*

*

*

1.8

2.1

121
%

 Depreciation & amortization

13.7

*

*

*

14.4

0.7

5
%

 Interest

1.3

*

*

*

0.1

(1.2
)

-2250
%

 Tax

5.4

*

*

*

1.3

(4.1
)

-328
%

 Net income (loss)

$
2.5

*

*

*

$
(25.4
)

28.0

110
%

 Total head count

3,840

*

*

*

3,767

73

2
%

 Total HC turnover

*

*

*

*

*

*

*

 Consultant : Admin FTE

*

*

*

*

*

*

*

 Consult+Admin : Support FTE

 GM / FTE (’000)

*

*

*

*

*

*

*

 Salary & related / FTE (’000)

*

*

*

*

*

*

*

 Office & general / FTE (’000)

*

*

*

*

*

*

*

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 Monthly Comparative Profit & Loss Summary

 US$ millions

 Actual

 Sep 2005

 PF3

 Sep 2005

 Var

 F/(U)

 Prior Year

 Sep 2004

 Var

 F/(U)

 Hudson Highland Group, Inc.

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Hudson North America

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Hudson Europe

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Hudson Asia Pacific

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Hudson Development

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Hudson Eliminations

 Revenue

 Gross Margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Hudson Global Resources

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Highland North America

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Highland Europe

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Highland Asia Pacific

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Highland Partners

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 Corporate & Eliminations

 Revenue

 Gross margin

 SG&A

 EBITDA

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

*
*
*
*

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 Quarterly Comparative Profit & Loss Summary

 US$ millions

 Actual

 Sep 2005

 PF3

 Sep 2005

 Var

 F/(U)

 Prior Year

 Sep 2004

 Var

 F/(U)

 Hudson Highland Group, Inc.

Revenue

$
 356.6

*

*

$
 315.0

$
41.6

Gross margin

135.2

*

*

116.4

18.8

SG&A

(126.5
)

*

*

(118.8
)

(7.7
)

EBITDA

$
 8.7

*

*

$
(2.4
)

$
11.0

 Hudson North America

Revenue

$
109.1

*

*

$
83.0

$
26.0

Gross margin

28.4

*

*

22.7

5.7

SG&A

(23.3
)

*

*

(20.8
)

(2.6
)

EBITDA

$
5.1

*

*

$
2.0

$
3.1

 Hudson Europe

Revenue

$
117.6

*

*

$
115.0

$
2.7

Gross margin

49.8

*

*

43.1

6.7

SG&A

(46.3
)

*

*

(43.4
)

(2.9
)

EBITDA

$
3.5

*

*

$
(0.3
)

$
3.8

 Hudson Asia Pacific

Revenue

$
114.4

*

*

$
102.2

$
12.3

Gross margin

42.1

*

*

36.5

5.6

SG&A

(33.4
)

*

*

(28.7
)

(4.7
)

EBITDA

$
8.7

*

*

$
7.8

$
0.9

 Hudson Development

Revenue

$
0.5

*

*

$
0.7

$
(0.2
)

Gross margin

0.3

*

*

0.6

(0.3
)

SG&A

(1.3
)

*

*

(2.0
)

0.7

EBITDA

$
(0.9
)

*

*

$
(1.3
)

$
0.4

 Hudson Eliminations

Revenue

$
(0.3
)

*

*

$
(0.0
)

$
(0.3
)

Gross Margin

—

*

*

—

—

SG&A

—

*

*

—

—

EBITDA

$
—

*

*

$
—

$
—

 Hudson Global Resources

Revenue

$
341.3

*

*

$
300.8

$
40.5

Gross margin

120.7

*

*

103.0

17.7

SG&A

(104.3
)

*

*

(94.8
)

(9.5
)

EBITDA

$
16.4

*

*

$
8.2

$
8.2

 Highland North America

Revenue

$
11.3

*

*

$
11.3

$
(0.0
)

Gross margin

10.6

*

*

10.7

(0.1
)

SG&A

(9.4
)

*

*

(12.0
)

2.6

EBITDA

$
1.2

*

*

$
(1.3
)

$
2.5

 Highland Europe

Revenue

$
3.3

*

*

$
1.3

$
2.0

Gross margin

3.2

*

*

1.3

1.9

SG&A

(3.0
)

*

*

(2.1
)

(0.9
)

EBITDA

$
0.2

*

*

$
(0.9
)

$
1.0

 Highland Asia Pacific

Revenue

$
0.9

*

*

$
1.7

$
(0.8
)

Gross margin

1.0

*

*

1.6

(0.6
)

SG&A

(0.8
)

*

*

(1.5
)

0.7

EBITDA

$
0.2

*

*

$
0.1

$
0.1

 Highland Partners

Revenue

$
15.5

*

*

$
14.3

$
1.2

Gross margin

14.7

*

*

13.5

1.2

SG&A

(13.2
)

*

*

(15.6
)

2.5

EBITDA

$
1.6

*

*

$
(2.1
)

$
3.7

 Corporate & Eliminations

Revenue

$
(0.2
)

*

*

$
(0.1
)

$
(0.1
)

Gross margin

(0.2
)

*

*

(0.1
)

(0.1
)

SG&A

(9.1
)

*

*

(8.4
)

(0.7
)

EBITDA

$
(9.3
)

*

*

$
(8.5
)

$
(0.8
)

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 YTD
Comparative Profit & Loss Summary

 US$ millions

 Actual

 Sep 2005

 PF3

 Sep 2005

 Var

 F/(U)

 Prior Year

 Sep 2004

 Var

 F/(U)

 Hudson Highland Group, Inc.

Revenue

$
 1,074.3

*

*

$
 912.3

$
 162.0

 Gross margin

404.5

*

*

341.3

63.2

 SG&A

(382.1
)

*

*

(349.3
)

(32.8
)

 EBITDA

$
 22.5

*

*

$
 (8.0
)

$
 30.5

 Hudson North America

Revenue

$
327.9

*

*

$
235.4

$
92.6

 Gross margin

82.7

*

*

60.1

22.6

 SG&A

(70.2
)

*

*

(55.0
)

(15.3
)

 EBITDA

$
12.5

*

*

$
5.1

$
7.4

 Hudson Europe

Revenue

$
364.8

*

*

$
327.2

$
37.6

 Gross margin

154.8

*

*

132.4

22.4

 SG&A

(142.2
)

*

*

(132.8
)

(9.4
)

 EBITDA

$
12.6

*

*

$
(0.4
)

$
13.1

 Hudson Asia Pacific

Revenue

$
334.3

*

*

$
302.8

$
31.5

 Gross margin

122.1

*

*

104.8

17.3

 SG&A

(96.5
)

*

*

(88.5
)

(8.0
)

 EBITDA

$
25.7

*

*

$
16.3

$
9.3

 Hudson Development

Revenue

$
1.8

*

*

$
1.3

$
0.5

 Gross margin

1.3

*

*

1.2

0.1

 SG&A

(4.6
)

*

*

(5.6
)

1.0

 EBITDA

$
(3.3
)

*

*

$
(4.5
)

$
1.1

 Hudson Eliminations

Revenue

$
(0.4
)

*

*

$
(0.1
)

$
(0.3
)

 Gross Margin

—

*

*

—

—

 SG&A

—

*

*

—

—

 EBITDA

$
—

*

*

$
—

$
—

 Hudson Global Resources

Revenue

$
1,028.4

*

*

$
866.6

$
161.7

 Gross margin

360.9

*

*

298.5

62.5

 SG&A

(313.5
)

*

*

(281.9
)

(31.6
)

 EBITDA

$
47.4

*

*

$
16.6

$
30.9

 Highland North America

Revenue

$
35.1

*

*

$
33.2

$
2.0

 Gross margin

33.0

*

*

31.2

1.8

 SG&A

(29.8
)

*

*

(31.5
)

1.7

 EBITDA

$
3.3

*

*

$
(0.3
)

$
3.6

 Highland Europe

Revenue

$
8.4

*

*

$
5.5

$
3.0

 Gross margin

8.1

*

*

5.2

3.0

 SG&A

(8.0
)

*

*

(6.5
)

(1.5
)

 EBITDA

$
0.2

*

*

$
(1.3
)

$
1.5

 Highland Asia Pacific

Revenue

$
3.0

*

*

$
7.3

$
(4.3
)

 Gross margin

2.9

*

*

6.7

(3.8
)

 SG&A

(3.7
)

*

*

(5.8
)

2.1

 EBITDA

$
(0.7
)

*

*

$
0.9

$
(1.7
)

 Highland Partners

Revenue

$
46.6

*

*

$
45.9

$
0.6

 Gross margin

44.1

*

*

43.1

1.0

 SG&A

(41.4
)

*

*

(43.7
)

2.3

 EBITDA

$
2.7

*

*

$
(0.6
)

$
3.3

 Corporate & Eliminations

Revenue

$
(0.6
)

*

*

$
(0.3
)

$
(0.3
)

 Gross margin

(0.5
)

*

*

(0.3
)

(0.2
)

 SG&A

(27.2
)

*

*

(23.7
)

(3.5
)

 EBITDA

$
(27.7
)

*

*

$
(24.0
)

$
(3.7
)

 * This information is considered confidential and has been omitted.

Confidential - for internal use only. All figures are draft only and subject to change.

12/8/2005

 September 2005 Board Report

 Annual
Results

 US$ millions

 Quarter 1

 Actual

 Quarter 2

 Actual

 Quarter 3

 Actual

 Quarter 4

 PF3

 2005

 Annual

 Estimate

 Hudson Highland Group, Inc.

Revenue

$
 352.9

$
 364.8

$
 356.6

*

*

 Gross margin

128.2

141.2

135.2

*

*

 SG&A

(125.4
)

(130.2
)

(126.5
)

*

*

 EBITDA

$
 2.8

$
 11.0

$
 8.7

*

*

 Hudson North America

Revenue

$
111.2

$
107.6

$
109.1

*

*

 Gross margin

26.8

27.5

28.4

*

*

 SG&A

(24.1
)

(22.8
)

(23.3
)

*

*

 EBITDA

$
2.8

$
4.6

$
5.1

*

*

 Hudson Europe

Revenue

$
122.4

$
124.7

$
117.6

*

*

 Gross margin

50.5

54.5

49.8

*

*

 SG&A

(47.2
)

(48.7
)

(46.3
)

*

*

 EBITDA

$
3.3

$
5.8

$
3.5

*

*

 Hudson Asia Pacific

Revenue

$