Human Resources: Hudson Highland Group Reports 2007 Third Quarter Financial Results

NEW YORK, NY - October 24, 2007 - Hudson Highland Group, Inc. (Nasdaq: HHGP), one of the world's leading providers of permanent recruitment, contract professionals and talent management solutions, today announced financial results for the third quarter ended September 30, 2007.

2007 Third Quarter Highlights

Revenue of $341.3 million, a decrease of 0.1 percent from $341.5 million for the third quarter of 2006
Gross margin of $136.1 million, or 39.9 percent of revenue, up 8.2 percent from $125.9 million, or 36.9 percent of revenue, for the same year-ago period
Adjusted EBITDA of $11.8 million, or 3.4 percent of revenue, up 3.5 percent from $11.4 million for the third quarter of 2006
EBITDA of $12.6 million, or 3.7 percent of revenue, up 35.7 percent from $9.3 million for the same period last year
Net income of $3.9 million, or $0.15 per basic and diluted share, compared with net income of $4.3 million, or $0.18 per basic and $0.17 per diluted share, for the third quarter of 2006
"Our strong third quarter results stemmed from continued execution of our strategic objectives, including higher temporary contracting margins in every region and signing a definitive agreement to divest our Australian Trade and Industrial business," said Jon Chait, Hudson Highland Group chairman and chief executive officer. "As well, our actions in Hudson Americas have begun to pay off with improved sequential performance."

"Led by Europe and Asia Pacific, our international operations continued to demonstrate steady performance improvement," added Mary Jane Raymond, executive vice president and chief financial officer. "Given the current global concerns about a slowing economy, we continue to focus on improving our liquidity."

Unresolved Accounting Issue

The company is examining an accounting issue with its external auditors relating to contingent cash earn out payments the company made in connection with the JMT acquisition between 2004 and 2007. The company accounted for the contingent cash earn out payments as goodwill. The company is determining whether up to $19 million of those payments must be reclassified from goodwill to compensation expense. Any such reclassification could require a restatement of prior period financial statements, but would not affect the company's cash flows for such periods. The company intends to resolve this accounting issue prior to the timely filing of its Form 10-Q for the third quarter of 2007.

Sale of Australia Trade and Industrial Business

On October 2, 2007, the company announced it had signed a definitive agreement to sell its Australian Trade and Industrial business to the Skilled Group Limited. This represents the company's exit from the Australian blue-collar labor market, no longer core to its long-term business strategy of specialized professional recruitment, talent management and managed services solutions. The company will record a gain on sale from this transaction in the fourth quarter, as this is expected to close at the end of October, but will treat this business as a discontinued operation in the third quarter of 2007.

Guidance

The company currently expects fourth quarter 2007 revenue of $325 - $340 million at prevailing exchange rates and adjusted EBITDA of $12 - $14 million, excluding the impact of any future restructuring, acquisitions or divestures. This compares with revenue of $329.3 million and adjusted EBITDA of $14.8 million in the fourth quarter of 2006.

Additional Information

Please find additional information about the company's quarterly results in the shareholder letter in the investor information section of the company's website at www.hudson.com.

Conference Call / Webcast

Hudson Highland Group will conduct a conference call Thursday, October 25, 2007 at 9:00 AM ET to discuss this announcement. Investors wishing to participate can join the conference call by dialing 1-800-374-1532 followed by the participant passcode 20262666 at 8:50 AM ET. For those outside the United States, please call in on 1-706-634-5594 followed by the participant passcode 20262666. Hudson Highland Group's quarterly conference call can also be accessed online through Yahoo! Finance at www.yahoo.com and the investor information section of the company's website at www.hudson.com.

The archived call will be available for one week by dialing 1-800-642-1687 followed by the participant passcode 20262666. For those outside the United States, the call will be available on 1-706-645-9291 followed by the participant passcode 20262666.

About Hudson Highland Group

Hudson Highland Group, Inc. is a leading provider of permanent recruitment, contract professionals and talent management services worldwide. From single placements to total outsourced solutions, Hudson helps clients achieve greater organizational performance by assessing, recruiting, developing and engaging the best and brightest people for their businesses. The company employs more than 3,600 professionals serving clients and candidates in more than 20 countries. More information is available at www.hudson.com.

Safe Harbor Statement

This press release contains statements that the company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including those under the caption "Guidance" and other statements regarding the company's future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors include, but are not limited to, the impact of global economic fluctuations on temporary contracting operations; the cyclical nature of the company's mid-market professional staffing businesses; the company's ability to manage its growth; risks associated with expansion; risks and financial impact associated with disposition of non-strategic assets; the company's reliance on information systems and technology; competition; fluctuations in operating results; risks relating to foreign operations, including foreign currency fluctuations; dependence on highly skilled professionals and key management personnel; risks maintaining professional reputation and brand name; restrictions imposed by blocking arrangements; exposure to employment-related claims, and limits on insurance coverage related thereto; government regulations; restrictions on the company's operating flexibility due to the terms of its credit facility; risks associated with the remediation work being performed on the company's PeopleSoft system; and the company's ability to maintain effective internal control over financial reporting. Additional information concerning these and other factors is contained in the company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this press release. 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.