Quarterly Revenue of $263M, 3% Year Over Year Growth
13th Consecutive Quarter of Double-Digit
Adjusted EBITDA Margin
CHICAGO, Oct. 25,
2023 /PRNewswire/ -- Today Heidrick & Struggles
International, Inc. (Nasdaq: HSII) ("Heidrick & Struggles",
"Heidrick" or the "Company") announced financial results for its
third quarter ended September 30,
2023.
Third Quarter Highlights:
- Net revenue of $263.2 million
increased 3% year over year
- Operating income of $22.1 million
increased $8.6 million sequentially
and operating margin was 8.4%
- Adjusted operating income of $22.1
million increased $1.3 million
sequentially and adjusted operating margin was 8.4%
- Adjusted EBITDA of $32.3 million
decreased $4.1 million sequentially
and adjusted EBITDA margin was 12.3%
- Net income was $15.0 million and
diluted earnings per share was $0.73
"We are very pleased with our third quarter results, posting
year over year revenue growth and another double-digit adjusted
EBITDA margin quarter despite ongoing macro uncertainty," stated
Heidrick & Struggles' President and Chief Executive Officer,
Krishnan Rajagopalan. "These results
reflect the benefits of our One
Heidrick strategy, which is to bring the best permanent
executive level and on-demand talent to our clients, and to help
leadership and organizations be more effective through our
diversified product offering. Our diversified solutions of
On-Demand Talent, Heidrick Consulting, and soon to include Heidrick
Digital, will continue to be an increasing percentage of our
business, and now contribute nearly 25% of our revenues."
2023 Third Quarter Results
Consolidated net revenue was $263.2
million in the 2023 third quarter compared to consolidated
net revenue of $255.2 million in the
2022 third quarter. The Company experienced growth in On-Demand
Talent, Heidrick Consulting, and Executive Search in Europe, partially offset by declines in
Executive Search in Asia Pacific
and the Americas.
On a sequential basis, 2023 third quarter operating income was
$22.1 million compared to
$13.6 million in the 2023 second
quarter. Adjusted operating income was $22.1
million compared to $20.8
million in the 2023 second quarter, and adjusted operating
margin was 8.4% compared to 7.7% in the 2023 second quarter.
Adjusted operating income in the 2023 second quarter reflects the
exclusion of a non-cash impairment charge of $7.2 million. Adjusted EBITDA was $32.3 million in the 2023 third quarter compared
to $36.4 million in the 2023 second
quarter, and 2023 third quarter adjusted EBITDA margin was 12.3%
compared to 13.4% in the 2023 second quarter. 2023 third quarter
net income was $15.0 million compared
to $9.0 million in the 2023 second
quarter. This generated diluted earnings per share in the 2023
third quarter of $0.73, compared to
$0.44 in the 2023 second quarter.
Adjusted net income of $15.0 million
and adjusted diluted earnings per share of $0.73 in the 2023 third quarter were consistent
with 2023 second quarter results.
Executive Search net revenue was $198.8 million compared to net revenue of
$212.8 million in the 2022 third
quarter reflecting a decrease in the volume of executive search
confirmations. Net revenue decreased 7.9%, or $16.8 million on a constant currency basis from
the 2022 third quarter. Net revenue decreased 7.9% in the Americas
(down 8.1% on a constant currency basis), increased 8.4% in
Europe (up 1.0% on a constant
currency basis), and decreased 21.6% in Asia Pacific (down 19.8% on a constant
currency basis) when compared to the prior year third quarter.
The Company had 417 Executive Search consultants at September 30, 2023, compared to 389 at
September 30, 2022. Productivity, as
measured by annualized Executive Search net revenue per consultant,
was $1.9 million compared to
$2.2 million in the 2022 third
quarter, reflecting a higher number of consultants combined with
lower revenue. Average revenue per executive search was
approximately $153,000 compared to
$155,000 in the prior year
period. The number of search confirmations decreased 5.1%
compared to the year-ago period.
On-Demand Talent net revenue was $41.1 million, an increase of 76.6% compared to
net revenue of $23.2 million in the
2022 third quarter, primarily due to the acquisition of Atreus
Group GmbH ("Atreus"), partially offset by a decrease in the volume
of legacy on-demand projects.
Heidrick Consulting net revenue was $23.3 million compared to net revenue of
$19.1 million in the 2022 third
quarter due to organic growth coupled with the acquisition of
businessfourzero. The Company had 90 Heidrick Consulting
consultants at September 30, 2023,
compared to 72 at September 30,
2022.
Consolidated salaries and benefits decreased $4.3 million, or 2.5%, to $167.2 million compared to $171.5 million in the 2022 third quarter.
Year-over-year, fixed compensation expense increased $9.2 million due to increases in base salaries
and payroll taxes, expenses related to the deferred compensation
plan, separation costs, and talent acquisition and retention costs,
partially offset by decreases in stock compensation, and retirement
and benefits. Variable compensation decreased $13.5 million due to lower bonus accruals related
to decreased consultant productivity. Salaries and benefits expense
was 63.5% of net revenue for the quarter compared to 67.2% in the
2022 third quarter.
General and administrative expenses increased $5.4 million, or 16.7%, to $37.6 million compared to $32.2 million in the 2022 third quarter. The
increase was due to intangible amortization and accretion,
increases in expenses related to office occupancy, and marketing,
as well as the acquisitions of Atreus and businessfourzero,
partially offset by a decrease in business development travel. As a
percentage of net revenue, general and administrative expenses were
14.3% for the 2023 third quarter compared to 12.6% in the 2022
third quarter.
The Company's cost of services was $30.7
million, or 11.7% of net revenue for the quarter, compared
to $17.8 million, or 7.0% of net
revenue in the 2022 third quarter. This related to an increase in
the volume of On-Demand Talent projects driven by the acquisition
of Atreus.
The Company's research and development expenses were
$5.6 million, or 2.1% of net revenue
for the quarter compared to $5.4
million, or 2.1%, of net revenue for the third quarter
2022.
Operating income was $22.1 million
for the quarter compared to $28.3
million in the 2022 third quarter. Operating income margin
was 8.4% versus 11.1% in the 2022 third quarter. Adjusted
operating income in the 2023 third quarter was $22.1 million and adjusted operating income
margin was 8.4% compared to 2022 third quarter adjusted operating
income of $27.8 million and adjusted
operating margin of 10.9%. Adjusted operating income in the 2022
third quarter reflects an adjustment to exclude a reduction in the
fair value of an On-Demand Talent earnout by $0.5 million.
Adjusted EBITDA was $32.3 million
compared to $33.3 million in the 2022
third quarter. Adjusted EBITDA margin was 12.3%, compared to 13.0%
in the 2022 third quarter. In Executive Search, adjusted EBITDA was
$51.9 million compared to
$51.5 million in the prior year
period. In On-Demand Talent, adjusted EBITDA was a loss of
$0.6 million versus income of
$0.2 million in the prior year
period. In Heidrick Consulting, adjusted EBITDA was a loss of
$2.2 million compared to a loss of
$5.2 million in the prior year
period.
Net income was $15.0 million and
diluted earnings per share was $0.73,
with an effective tax rate of 37.5%. This compares to net income of
$20.8 million and diluted earnings
per share of $1.02, with an effective
tax rate of 29.5% in the 2022 third quarter. Adjusted net income
was $15.0 million and adjusted
diluted earnings per share was $0.73,
with an adjusted effective tax rate of 37.5% compared to 2022 third
quarter adjusted net income of $20.5
million and adjusted diluted earnings per share of
$1.00, which reflects the
aforementioned earnout fair value adjustment.
Net cash provided by operating activities was $109.5 million, compared to $138.5 million in the 2022 third quarter. Cash,
cash equivalents and marketable securities at September 30, 2023 was $334.0 million compared to $456.0 million at September 30, 2022 and $621.6 million at December
31, 2022. The Company's cash position typically builds
throughout the year as employee bonuses are accrued, mostly to be
paid out in the first half of the year.
Dividend
The Board of Directors declared a 2023 fourth quarter cash
dividend of $0.15 per share payable
on November 21, 2023, to shareholders
of record at the close of business on November 7, 2023.
2023 Fourth Quarter Outlook
The Company expects 2023 fourth quarter consolidated net revenue
of between $240 million and
$260 million, which may be impacted
by external factors, such as the foreign exchange and interest rate
environments, foreign conflicts, inflation and macroeconomic
constraints on pricing actions. In addition, this outlook is based
on the average currency rates in September
2023 and reflects, among other factors, management's
assumptions for the anticipated volume of new Executive Search
confirmations, On-Demand Talent projects, and Heidrick Consulting
assignments, consultant productivity, consultant retention, and the
seasonality of the business along with the current backlog.
Quarterly Webcast and Conference Call
Heidrick & Struggles will host a conference call to review
its third quarter results today, October 25,
2023 at 5:00 pm Eastern Time.
Participants may access the Company's call and supporting slides
through its website at www.heidrick.com or by dialing (888)
440-4091 or (646) 960-0846, conference ID# 6106012. For those
unable to participate on the live call, a webcast and copy of the
slides will be archived at www.heidrick.com and available for up to
30 days following the investor call.
About Heidrick & Struggles International, Inc.
Heidrick & Struggles (Nasdaq: HSII) is a premier provider of
global leadership advisory and on-demand talent solutions, serving
the senior-level talent and consulting needs of the world's top
organizations. In our role as trusted leadership advisors, we
partner with our clients to develop future-ready leaders and
organizations, bringing together our services and offerings in
executive search, diversity and inclusion, leadership assessment
and development, organization and team acceleration, culture
shaping and on-demand, independent talent solutions. Heidrick &
Struggles pioneered the profession of executive search more than 65
years ago. Today, the firm provides integrated talent and human
capital solutions to help our clients change the world, one
leadership team at a time. ® www.heidrick.com
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States ("GAAP"), Heidrick &
Struggles presents certain non-GAAP financial measures. A "non-GAAP
financial measure" is defined as a numerical measure of a company's
financial performance that excludes or includes amounts different
than the most directly comparable measure calculated and presented
in accordance with GAAP in the statements of comprehensive income,
balance sheets or statements of cash flow of the Company.
Non-GAAP financial measures used within this earnings release
are adjusted operating income, adjusted operating income margin,
adjusted net income, adjusted diluted earnings per share, adjusted
effective tax rate, adjusted EBITDA, adjusted EBITDA margin, and
consolidated net revenue excluding the impact of exchange rate
fluctuations (referred to as constant currency). These measures are
presented because management uses this information to monitor and
evaluate financial results and trends. Management believes this
information is also useful for investors to evaluate the
comparability of financial information presented. Reconciliations
of these non-GAAP financial measures to the most directly
comparable measures calculated and presented in accordance with
GAAP are provided as schedules attached to this release.
Adjusted operating income is operating income excluding goodwill
impairment and earnout fair value adjustments.
Adjusted operating income margin refers to adjusted operating
income as a percentage of net revenue in the same period.
Adjusted net income and adjusted diluted earnings per share are
net income and diluted earnings per share excluding goodwill
impairment and earnout fair value adjustments, net of tax.
Adjusted effective tax rate is effective tax rate excluding
goodwill impairment and earnout fair value adjustments, net of
tax.
Adjusted EBITDA refers to earnings before interest, taxes,
depreciation, intangible amortization, equity-settled stock
compensation expense, earnout accretion, earnout fair value
adjustments, acquisition contingent compensation, deferred
compensation plan income and expense, reorganization costs,
impairment charges, restructuring charges, and other non-operating
income (expense).
Adjusted EBITDA margin refers to adjusted EBITDA as a percentage
of net revenue in the same period.
The Company evaluates its results of operations on both an as
reported and a constant currency basis. The constant currency
presentation is a non-GAAP financial measure, which excludes the
impact of fluctuations in foreign currency exchange rates. The
Company believes providing constant currency information provides
valuable supplemental information regarding its results of
operations, consistent with how it evaluates its performance. The
Company calculates constant currency percentages by converting its
financial results in a local currency for a period using the
average exchange rate for the prior period to which it is
comparing. This calculation may differ from similarly titled
measures used by other companies.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the federal securities laws, including statements
regarding guidance for the fourth quarter of 2023 and the Company's
expectations regarding its One
Heidrick strategy and associated investment initiatives. The
forward-looking statements are based on current expectations,
estimates, forecasts, and projections about the industry in which
we operate and management's beliefs and assumptions.
Forward-looking statements may be identified by the use of words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "outlook," "projects," "forecasts," "aim" and
similar expressions. Forward-looking statements are not guarantees
of future performance, rely on a number of assumptions, and involve
certain known and unknown risks and uncertainties that are
difficult to predict, many of which are beyond our control. Factors
that may cause actual outcomes and results to differ materially
from what is expressed, forecasted, or implied in the
forward-looking statements include, among other things, our ability
to attract, integrate, develop, manage and retain qualified
consultants and senior leaders; our ability to prevent our
consultants from taking our clients with them to another firm; our
ability to maintain our professional reputation and brand name; our
clients' ability to restrict us from recruiting their employees;
our heavy reliance on information management systems; risks arising
from our implementation of new technology and intellectual property
to deliver new products and services to our clients; our dependence
on third parties for the execution of certain critical functions;
the fact that we face the risk of liability in the services we
perform; the fact that data security, data privacy and data
protection laws and other evolving regulations and cross-border
data transfer restrictions may limit the use of our services and
adversely affect our business; any challenges to the classification
of our on-demand talent as independent contractors; the increased
cybersecurity requirements, vulnerabilities, threats and more
sophisticated and targeted cyber-related attacks that could pose a
risk to our systems, networks, solutions, services and data; the
impacts, direct and indirect, of the COVID-19 pandemic (including
the emergence of variant strains) or other highly infectious or
contagious disease on our business, our consultants and employees,
and the overall economy; the aggressive competition we face; the
fact that our net revenue may be affected by adverse economic
conditions including inflation, the impact of foreign currency
exchange rate fluctuations; our ability to access additional
credit; social, political, regulatory, legal and economic risks in
markets where we operate, including the impact of the ongoing war
in Ukraine and the conflict in
Israel and the Gaza Strip and the risks of an expansion or
escalation of those conflicts; unfavorable tax law changes and tax
authority rulings; the timing of the establishment or reversal of
valuation allowance on deferred tax assets; the fact that we may
not be able to align our cost structure with net revenue; any
impairment of our goodwill, other intangible assets and other
long-lived assets; our ability to execute and integrate future
acquisitions; and the fact that we have anti-takeover provisions
that could make an acquisition of us difficult and expensive. We
caution the reader that the list of factors may not be exhaustive.
For more information on these risks, uncertainties and other
factors, refer to our Annual Report on Form 10-K for the year ended
December 31, 2022, under the heading
"Risk Factors" in Item 1A, as updated in Part II of our subsequent
Quarterly Reports on Form 10-Q, and other filings with the
Securities and Exchange Commission. The forward-looking statements
contained in this press release speak only as of the date of this
press release. We undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Contacts:
Investors & Analysts:
Steven Horwitz, Interim Head of Investor
Relations
shorwitz@heidrick.com
Media:
Nina Chang, Vice
President, Corporate Communications
nchang@heidrick.com
Heidrick &
Struggles International, Inc.
Consolidated
Statements of Comprehensive Income
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
$
263,160
|
|
$
255,185
|
|
$
7,975
|
|
3.1 %
|
Reimbursements
|
4,736
|
|
3,086
|
|
1,650
|
|
53.5 %
|
Total
revenue
|
267,896
|
|
258,271
|
|
9,625
|
|
3.7 %
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries and
benefits
|
167,219
|
|
171,473
|
|
(4,254)
|
|
(2.5) %
|
General and
administrative expenses
|
37,564
|
|
32,189
|
|
5,375
|
|
16.7 %
|
Cost of
services
|
30,680
|
|
17,801
|
|
12,879
|
|
72.3 %
|
Research and
development
|
5,560
|
|
5,400
|
|
160
|
|
3.0 %
|
Reimbursed
expenses
|
4,736
|
|
3,086
|
|
1,650
|
|
53.5 %
|
Total operating
expenses
|
245,759
|
|
229,949
|
|
15,810
|
|
6.9 %
|
|
|
|
|
|
|
|
|
Operating
income
|
22,137
|
|
28,322
|
|
(6,185)
|
|
(21.8) %
|
|
|
|
|
|
|
|
|
Non-operating income
(expense)
|
|
|
|
|
|
|
|
Interest,
net
|
2,505
|
|
1,255
|
|
|
|
|
Other, net
|
(649)
|
|
(43)
|
|
|
|
|
Net non-operating
income
|
1,856
|
|
1,212
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
23,993
|
|
29,534
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
9,006
|
|
8,708
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
14,987
|
|
20,826
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax
|
(4,001)
|
|
(5,454)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$ 10,986
|
|
$ 15,372
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
20,076
|
|
19,816
|
|
|
|
|
Diluted
|
20,553
|
|
20,413
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
0.75
|
|
$
1.05
|
|
|
|
|
Diluted
|
$
0.73
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
as a % of net revenue
|
63.5 %
|
|
67.2 %
|
|
|
|
|
General and
administrative expenses as a % of net revenue
|
14.3 %
|
|
12.6 %
|
|
|
|
|
Cost of services as a %
of net revenue
|
11.7 %
|
|
7.0 %
|
|
|
|
|
Research and
development as a % of net revenue
|
2.1 %
|
|
2.1 %
|
|
|
|
|
Operating income
margin
|
8.4 %
|
|
11.1 %
|
|
|
|
|
Heidrick &
Struggles International, Inc.
Segment
Information
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
|
2023
Margin1
|
|
2022
Margin1
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$ 132,320
|
|
$ 143,747
|
|
$
(11,427)
|
|
(7.9) %
|
|
|
|
|
Europe
|
44,606
|
|
41,141
|
|
3,465
|
|
8.4 %
|
|
|
|
|
Asia
Pacific
|
21,888
|
|
27,919
|
|
(6,031)
|
|
(21.6) %
|
|
|
|
|
Total Executive
Search
|
198,814
|
|
212,807
|
|
(13,993)
|
|
(6.6) %
|
|
|
|
|
On-Demand
Talent
|
41,053
|
|
23,247
|
|
17,806
|
|
76.6 %
|
|
|
|
|
Heidrick
Consulting
|
23,293
|
|
19,131
|
|
4,162
|
|
21.8 %
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
263,160
|
|
255,185
|
|
7,975
|
|
3.1 %
|
|
|
|
|
Reimbursements
|
4,736
|
|
3,086
|
|
1,650
|
|
53.5 %
|
|
|
|
|
Total
revenue
|
$ 267,896
|
|
$ 258,271
|
|
$
9,625
|
|
3.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$ 39,285
|
|
$ 39,741
|
|
$
(456)
|
|
(1.1) %
|
|
29.7 %
|
|
27.6 %
|
Europe
|
8,519
|
|
5,652
|
|
2,867
|
|
50.7 %
|
|
19.1 %
|
|
13.7 %
|
Asia
Pacific
|
2,486
|
|
4,503
|
|
(2,017)
|
|
(44.8) %
|
|
11.4 %
|
|
16.1 %
|
Total Executive
Search
|
50,290
|
|
49,896
|
|
394
|
|
0.8 %
|
|
25.3 %
|
|
23.4 %
|
On-Demand
Talent
|
(4,595)
|
|
(276)
|
|
(4,319)
|
|
NM
|
|
(11.2) %
|
|
(1.2) %
|
Heidrick
Consulting
|
(4,075)
|
|
(2,000)
|
|
(2,075)
|
|
(103.8) %
|
|
(17.5) %
|
|
(10.5) %
|
Total
segments
|
41,620
|
|
47,620
|
|
(6,000)
|
|
(12.6) %
|
|
15.8 %
|
|
18.7 %
|
Research and
Development
|
(5,560)
|
|
(5,400)
|
|
(160)
|
|
(3.0) %
|
|
(2.1) %
|
|
(2.1) %
|
Global Operations
Support
|
(13,923)
|
|
(13,898)
|
|
(25)
|
|
(0.2) %
|
|
(5.3) %
|
|
(5.4) %
|
Total operating
income
|
$ 22,137
|
|
$ 28,322
|
|
$
(6,185)
|
|
(21.8) %
|
|
8.4 %
|
|
11.1 %
|
1 Margin based on revenue
before reimbursements (net revenue).
|
Heidrick &
Struggles International, Inc.
Consolidated
Statements of Comprehensive Income
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
$
773,702
|
|
$
837,747
|
|
$ (64,045)
|
|
(7.6) %
|
Reimbursements
|
10,090
|
|
7,170
|
|
2,920
|
|
40.7 %
|
Total
revenue
|
783,792
|
|
844,917
|
|
(61,125)
|
|
(7.2) %
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries and
benefits
|
504,994
|
|
580,602
|
|
(75,608)
|
|
(13.0) %
|
General and
administrative expenses
|
112,405
|
|
97,186
|
|
15,219
|
|
15.7 %
|
Cost of
services
|
78,818
|
|
53,192
|
|
25,626
|
|
48.2 %
|
Research and
development
|
16,746
|
|
14,347
|
|
2,399
|
|
16.7 %
|
Impairment
charges
|
7,246
|
|
—
|
|
7,246
|
|
100.0 %
|
Reimbursed
expenses
|
10,090
|
|
7,170
|
|
2,920
|
|
40.7 %
|
Total operating
expenses
|
730,299
|
|
752,497
|
|
(22,198)
|
|
(2.9) %
|
|
|
|
|
|
|
|
|
Operating
income
|
53,493
|
|
92,420
|
|
(38,927)
|
|
(42.1) %
|
|
|
|
|
|
|
|
|
Non-operating income
(expense)
|
|
|
|
|
|
|
|
Interest,
net
|
7,667
|
|
1,664
|
|
|
|
|
Other, net
|
2,537
|
|
(1,740)
|
|
|
|
|
Net non-operating
income (expense)
|
10,204
|
|
(76)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
63,697
|
|
92,344
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
24,142
|
|
28,902
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
39,555
|
|
63,442
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax
|
(3,633)
|
|
(14,060)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$ 35,922
|
|
$ 49,382
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
19,998
|
|
19,723
|
|
|
|
|
Diluted
|
20,716
|
|
20,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
1.98
|
|
$
3.22
|
|
|
|
|
Diluted
|
$
1.91
|
|
$
3.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
as a % of net revenue
|
65.3 %
|
|
69.3 %
|
|
|
|
|
General and
administrative expenses as a % of net revenue
|
14.5 %
|
|
11.6 %
|
|
|
|
|
Cost of services as a %
of net revenue
|
10.2 %
|
|
6.3 %
|
|
|
|
|
Research and
development as a % of net revenue
|
2.2 %
|
|
1.7 %
|
|
|
|
|
Operating income
margin
|
6.9 %
|
|
11.0 %
|
|
|
|
|
Heidrick &
Struggles International, Inc.
Segment
Information
(In
thousands)
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
|
2023
Margin1
|
|
2022
Margin1
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
398,210
|
|
$
482,320
|
|
$
(84,110)
|
|
(17.4) %
|
|
|
|
|
Europe
|
129,104
|
|
139,017
|
|
(9,913)
|
|
(7.1) %
|
|
|
|
|
Asia
Pacific
|
68,766
|
|
87,928
|
|
(19,162)
|
|
(21.8) %
|
|
|
|
|
Total Executive
Search
|
596,080
|
|
709,265
|
|
(113,185)
|
|
(16.0) %
|
|
|
|
|
On-Demand
Talent
|
111,410
|
|
68,981
|
|
42,429
|
|
61.5 %
|
|
|
|
|
Heidrick
Consulting
|
66,212
|
|
59,501
|
|
6,711
|
|
11.3 %
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
773,702
|
|
837,747
|
|
(64,045)
|
|
(7.6) %
|
|
|
|
|
Reimbursements
|
10,090
|
|
7,170
|
|
2,920
|
|
40.7 %
|
|
|
|
|
Total
revenue
|
$
783,792
|
|
$
844,917
|
|
$
(61,125)
|
|
(7.2) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
121,128
|
|
$
123,842
|
|
$
(2,714)
|
|
(2.2) %
|
|
30.4 %
|
|
25.7 %
|
Europe
|
12,663
|
|
15,661
|
|
(2,998)
|
|
(19.1) %
|
|
9.8 %
|
|
11.3 %
|
Asia
Pacific
|
7,132
|
|
13,469
|
|
(6,337)
|
|
(47.0) %
|
|
10.4 %
|
|
15.3 %
|
Total Executive
Search
|
140,923
|
|
152,972
|
|
(12,049)
|
|
(7.9) %
|
|
23.6 %
|
|
21.6 %
|
On-Demand
Talent
|
(11,821)
|
|
(1,207)
|
|
(10,614)
|
|
NM
|
|
(10.6) %
|
|
(1.7) %
|
Heidrick
Consulting2
|
(17,877)
|
|
(4,492)
|
|
(13,385)
|
|
NM
|
|
(27.0) %
|
|
(7.5) %
|
Total
segments
|
111,225
|
|
147,273
|
|
(36,048)
|
|
(24.5) %
|
|
14.4 %
|
|
17.6 %
|
Research and
Development
|
(16,746)
|
|
(14,347)
|
|
(2,399)
|
|
(16.7) %
|
|
(2.2) %
|
|
(1.7) %
|
Global Operations
Support
|
(40,986)
|
|
(40,506)
|
|
(480)
|
|
(1.2) %
|
|
(5.3) %
|
|
(4.8) %
|
Total operating
income
|
$ 53,493
|
|
$ 92,420
|
|
$
(38,927)
|
|
(42.1) %
|
|
6.9 %
|
|
11.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Margin based on revenue
before reimbursements (net revenue).
|
2
|
Includes impairment
charges of $7.2 million for the nine months ended September
30, 2023.
|
Heidrick &
Struggles International, Inc.
Reconciliation of
Net Income and Adjusted Net Income (Non-GAAP)
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
income
|
$
14,987
|
|
$
20,826
|
|
$
39,555
|
|
$
63,442
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
Impairment charges, net
of tax1
|
—
|
|
—
|
|
6,038
|
|
—
|
Earnout fair value
adjustment, net of tax2
|
—
|
|
(350)
|
|
—
|
|
(350)
|
Total
adjustments
|
—
|
|
(350)
|
|
6,038
|
|
(350)
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
14,987
|
|
$
20,476
|
|
$
45,593
|
|
$
63,092
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
20,076
|
|
19,816
|
|
19,998
|
|
19,723
|
Diluted
|
20,553
|
|
20,413
|
|
20,716
|
|
20,558
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
0.75
|
|
$
1.05
|
|
$
1.98
|
|
$
3.22
|
Diluted
|
$
0.73
|
|
$
1.02
|
|
$
1.91
|
|
$
3.09
|
|
|
|
|
|
|
|
|
Adjusted earnings
per common share
|
|
|
|
|
|
|
|
Basic
|
$
0.75
|
|
$
1.03
|
|
$
2.28
|
|
$
3.20
|
Diluted
|
$
0.73
|
|
$
1.00
|
|
$
2.20
|
|
$
3.07
|
1
|
The Company recorded a
goodwill impairment charge of $7.2 million in the Heidrick
Consulting segment for the nine months ended September 30,
2023.
|
2
|
The Company recorded a
fair value adjustment to reduce the On-Demand Talent earnout by
$0.5 million for the three and nine months ended September 30,
2022.
|
Heidrick &
Struggles International, Inc.
Consolidated Balance
Sheets
(In
thousands)
(Unaudited)
|
|
|
September
30,
2023
|
|
December 31,
2022
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
286,429
|
|
$
355,447
|
Marketable
securities
|
47,560
|
|
266,169
|
Accounts receivable,
net
|
189,442
|
|
126,437
|
Prepaid
expenses
|
28,333
|
|
24,098
|
Other current
assets
|
50,611
|
|
40,722
|
Income taxes
recoverable
|
10,799
|
|
10,946
|
Total current
assets
|
613,174
|
|
823,819
|
|
|
|
|
Non-current
assets
|
|
|
|
Property and equipment,
net
|
34,034
|
|
30,207
|
Operating lease
right-of-use assets
|
65,412
|
|
71,457
|
Assets designated for
retirement and pension plans
|
11,195
|
|
11,332
|
Investments
|
43,154
|
|
34,354
|
Other non-current
assets
|
19,528
|
|
25,788
|
Goodwill
|
198,241
|
|
138,361
|
Other intangible
assets, net
|
22,509
|
|
6,333
|
Deferred income
taxes
|
33,999
|
|
33,987
|
Total non-current
assets
|
428,072
|
|
351,819
|
|
|
|
|
Total
assets
|
$ 1,041,246
|
|
$ 1,175,638
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
18,966
|
|
$
14,613
|
Accrued salaries and
benefits
|
264,625
|
|
451,161
|
Deferred
revenue
|
41,502
|
|
43,057
|
Operating lease
liabilities
|
20,994
|
|
19,554
|
Other current
liabilities
|
33,171
|
|
56,016
|
Income taxes
payable
|
12,709
|
|
4,076
|
Total current
liabilities
|
391,967
|
|
588,477
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Accrued salaries and
benefits
|
48,598
|
|
59,467
|
Retirement and pension
plans
|
57,351
|
|
48,456
|
Operating lease
liabilities
|
55,832
|
|
63,299
|
Other non-current
liabilities
|
40,985
|
|
5,293
|
Deferred income
taxes
|
7,365
|
|
—
|
Total non-current
liabilities
|
210,131
|
|
176,515
|
|
|
|
|
Total
liabilities
|
602,098
|
|
764,992
|
|
|
|
|
Stockholders'
equity
|
439,148
|
|
410,646
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$ 1,041,246
|
|
$ 1,175,638
|
Heidrick &
Struggles International, Inc.
Consolidated
Statements of Cash Flows
(In
thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
September
30,
|
|
|
2023
|
|
2022
|
Cash flows -
operating activities
|
|
|
|
|
Net income
|
|
$
14,987
|
|
$
20,826
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
4,740
|
|
2,583
|
Deferred income
taxes
|
|
(6,994)
|
|
(730)
|
Stock-based
compensation expense
|
|
3,559
|
|
4,209
|
Accretion expense
related to earnout payments
|
|
455
|
|
275
|
Gain on marketable
securities
|
|
(346)
|
|
(113)
|
Loss on disposal of
property and equipment
|
|
61
|
|
67
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
|
7,785
|
|
20,030
|
Accounts
payable
|
|
1,257
|
|
694
|
Accrued
expenses
|
|
76,113
|
|
91,867
|
Deferred
revenue
|
|
(2,165)
|
|
(4,386)
|
Income taxes
recoverable and payable, net
|
|
9,205
|
|
2,453
|
Retirement and pension
plan assets and liabilities
|
|
294
|
|
179
|
Prepaid
expenses
|
|
(1,136)
|
|
(1,967)
|
Other assets and
liabilities, net
|
|
1,659
|
|
2,477
|
Net cash provided by
operating activities
|
|
109,474
|
|
138,464
|
|
|
|
|
|
Cash flows -
investing activities
|
|
|
|
|
Acquisition of
business, net of cash acquired
|
|
(2,204)
|
|
—
|
Capital
expenditures
|
|
(2,805)
|
|
(3,940)
|
Purchases of marketable
securities and investments
|
|
(47,781)
|
|
(180,739)
|
Proceeds from sales of
marketable securities and investments
|
|
21,571
|
|
226
|
Net cash used in
investing activities
|
|
(31,219)
|
|
(184,453)
|
|
|
|
|
|
Cash flows -
financing activities
|
|
|
|
|
Cash dividends
paid
|
|
(3,149)
|
|
(3,120)
|
Acquisition earnout
payments
|
|
(2,038)
|
|
—
|
Net cash used in
financing activities
|
|
(5,187)
|
|
(3,120)
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash, cash equivalents and restricted
cash
|
|
(4,414)
|
|
(12,031)
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
68,654
|
|
(61,140)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
217,817
|
|
336,650
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
286,471
|
|
$
275,510
|
|
|
|
|
|
Heidrick &
Struggles International, Inc.
Consolidated
Statements of Cash Flows
(In
thousands)
(Unaudited)
|
|
|
|
Nine Months
Ended
September
30,
|
|
|
2023
|
|
2022
|
Cash flows -
operating activities
|
|
|
|
|
Net income
|
|
$
39,555
|
|
$
63,442
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
13,432
|
|
7,824
|
Deferred income
taxes
|
|
(548)
|
|
(976)
|
Stock-based
compensation expense
|
|
7,331
|
|
11,691
|
Accretion expense
related to earnout payments
|
|
1,097
|
|
820
|
Gain on marketable
securities
|
|
(2,040)
|
|
(113)
|
Loss on disposal of
property and equipment
|
|
192
|
|
376
|
Impairment
charges
|
|
7,246
|
|
—
|
Changes in assets and
liabilities, net of effects of acquisition:
|
|
|
|
|
Accounts
receivable
|
|
(52,205)
|
|
(64,753)
|
Accounts
payable
|
|
(1,657)
|
|
(3,250)
|
Accrued
expenses
|
|
(197,698)
|
|
(32,414)
|
Deferred
revenue
|
|
(1,622)
|
|
(5,913)
|
Income taxes
recoverable and payable, net
|
|
6,617
|
|
(5,661)
|
Retirement and pension
plan assets and liabilities
|
|
6,697
|
|
3,476
|
Prepaid
expenses
|
|
(3,771)
|
|
(6,637)
|
Other assets and
liabilities, net
|
|
(3,243)
|
|
(8,960)
|
Net cash used in
operating activities
|
|
(180,617)
|
|
(41,048)
|
|
|
|
|
|
Cash flows -
investing activities
|
|
|
|
|
Acquisition of
businesses, net of cash acquired
|
|
(37,953)
|
|
—
|
Capital
expenditures
|
|
(9,619)
|
|
(8,176)
|
Purchases of marketable
securities and investments
|
|
(75,464)
|
|
(186,097)
|
Proceeds from sales of
marketable securities and investments
|
|
289,689
|
|
1,216
|
Net cash provided by
(used in) investing activities
|
|
166,653
|
|
(193,057)
|
|
|
|
|
|
Cash flows -
financing activities
|
|
|
|
|
Repurchases of common
stock
|
|
(904)
|
|
—
|
Cash dividends
paid
|
|
(9,383)
|
|
(9,343)
|
Payment of employee tax
withholdings on equity transactions
|
|
(4,141)
|
|
(3,219)
|
Acquisition earnout
payments
|
|
(37,984)
|
|
—
|
Net cash used in
financing activities
|
|
(52,412)
|
|
(12,562)
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash, cash equivalents and restricted
cash
|
|
(2,642)
|
|
(23,082)
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
(69,018)
|
|
(269,749)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
355,489
|
|
545,259
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$ 286,471
|
|
$ 275,510
|
Heidrick &
Struggles International, Inc.
Reconciliation of
Net Income and Operating Income to Adjusted EBITDA
(Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue before
reimbursements (net revenue)
|
$
263,160
|
|
$
255,185
|
|
$
773,702
|
|
$
837,747
|
|
|
|
|
|
|
|
|
Net
income
|
14,987
|
|
20,826
|
|
39,555
|
|
63,442
|
Interest,
net
|
(2,505)
|
|
(1,255)
|
|
(7,667)
|
|
(1,664)
|
Other, net
|
649
|
|
43
|
|
(2,537)
|
|
1,740
|
Provision for income
taxes
|
9,006
|
|
8,708
|
|
24,142
|
|
28,902
|
Operating
income
|
22,137
|
|
28,322
|
|
53,493
|
|
92,420
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
2,927
|
|
3,778
|
|
6,254
|
|
10,804
|
Depreciation
|
2,387
|
|
1,785
|
|
6,563
|
|
5,403
|
Intangible
amortization
|
2,353
|
|
799
|
|
6,869
|
|
2,421
|
Earnout
accretion
|
455
|
|
276
|
|
1,097
|
|
820
|
Earnout fair value
adjustments
|
—
|
|
(507)
|
|
—
|
|
(507)
|
Acquisition contingent
consideration
|
3,268
|
|
911
|
|
8,711
|
|
2,971
|
Deferred compensation
plan
|
(1,427)
|
|
(2,102)
|
|
2,309
|
|
(8,589)
|
Reorganization
costs
|
176
|
|
—
|
|
3,572
|
|
—
|
Impairment
charges
|
—
|
|
—
|
|
7,246
|
|
—
|
Total
adjustments
|
10,139
|
|
4,940
|
|
42,621
|
|
13,323
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 32,276
|
|
$ 33,262
|
|
$ 96,114
|
|
$
105,743
|
Adjusted EBITDA
margin
|
12.3 %
|
|
13.0 %
|
|
12.4 %
|
|
12.6 %
|
Heidrick &
Struggles International, Inc.
Reconciliation of
Operating Income to Adjusted EBITDA by Line of Business
(Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
September 30, 2023
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
198,814
|
|
$ 41,053
|
|
$ 23,293
|
|
$
—
|
|
$
—
|
|
$
263,160
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
50,290
|
|
(4,595)
|
|
(4,075)
|
|
(5,560)
|
|
(13,923)
|
|
22,137
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
881
|
|
7
|
|
146
|
|
89
|
|
1,804
|
|
2,927
|
Depreciation
|
1,288
|
|
125
|
|
156
|
|
655
|
|
163
|
|
2,387
|
Intangible
amortization
|
40
|
|
1,869
|
|
444
|
|
—
|
|
—
|
|
2,353
|
Earnout
accretion
|
—
|
|
397
|
|
58
|
|
—
|
|
—
|
|
455
|
Acquisition contingent
compensation
|
649
|
|
1,559
|
|
1,060
|
|
—
|
|
—
|
|
3,268
|
Deferred compensation
plan
|
(1,370)
|
|
—
|
|
(34)
|
|
(22)
|
|
(1)
|
|
(1,427)
|
Reorganization
costs
|
111
|
|
65
|
|
—
|
|
—
|
|
—
|
|
176
|
Total
adjustments
|
1,599
|
|
4,022
|
|
1,830
|
|
722
|
|
1,966
|
|
10,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 51,889
|
|
$
(573)
|
|
$
(2,245)
|
|
$
(4,838)
|
|
$ (11,957)
|
|
$ 32,276
|
Adjusted EBITDA
margin
|
26.1 %
|
|
(1.4) %
|
|
(9.6) %
|
|
(1.8) %
|
|
(4.5) %
|
|
12.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2022
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
212,807
|
|
$ 23,247
|
|
$ 19,131
|
|
$
—
|
|
$
—
|
|
$
255,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
49,896
|
|
(276)
|
|
(2,000)
|
|
(5,400)
|
|
(13,898)
|
|
28,322
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
1,250
|
|
6
|
|
469
|
|
57
|
|
1,996
|
|
3,778
|
Depreciation
|
1,373
|
|
46
|
|
89
|
|
166
|
|
111
|
|
1,785
|
Intangible
amortization
|
71
|
|
628
|
|
100
|
|
—
|
|
—
|
|
799
|
Earnout
accretion
|
—
|
|
276
|
|
—
|
|
—
|
|
—
|
|
276
|
Earnout fair value
adjustments
|
—
|
|
(507)
|
|
—
|
|
—
|
|
—
|
|
(507)
|
Acquisition contingent
compensation
|
911
|
|
—
|
|
—
|
|
—
|
|
—
|
|
911
|
Deferred compensation
plan
|
(2,021)
|
|
—
|
|
(52)
|
|
(28)
|
|
(1)
|
|
(2,102)
|
Total
adjustments
|
1,584
|
|
449
|
|
606
|
|
195
|
|
2,106
|
|
4,940
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 51,480
|
|
$
173
|
|
$
(1,394)
|
|
$
(5,205)
|
|
$ (11,792)
|
|
$ 33,262
|
Adjusted EBITDA
margin
|
24.2 %
|
|
0.7 %
|
|
(7.3 %)
|
|
(2.0) %
|
|
(4.6) %
|
|
13.0 %
|
1 The
Company does not allocate interest income or expense, other income
or expense, and the provision for income taxes to the Company's
reportable operating segments. As such, the Company has concluded
that operating income (loss) represents the most directly
comparable measure of financial performance presented in accordance
with U.S. GAAP for the reconciliation of Adjusted EBITDA in this
presentation.
|
Heidrick &
Struggles International, Inc.
Reconciliation of
Operating Income to Adjusted EBITDA by Line of Business
(Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
Nine Months Ended
September 30, 2023
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
596,080
|
|
$
111,410
|
|
$ 66,212
|
|
$
—
|
|
$
—
|
|
$
773,702
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
140,923
|
|
(11,821)
|
|
(17,877)
|
|
(16,746)
|
|
(40,986)
|
|
53,493
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
2,204
|
|
15
|
|
268
|
|
211
|
|
3,556
|
|
6,254
|
Depreciation
|
3,928
|
|
326
|
|
507
|
|
1,319
|
|
483
|
|
6,563
|
Intangible
amortization
|
145
|
|
5,737
|
|
987
|
|
—
|
|
—
|
|
6,869
|
Earnout
accretion
|
—
|
|
982
|
|
115
|
|
—
|
|
—
|
|
1,097
|
Acquisition contingent
compensation
|
2,449
|
|
4,144
|
|
2,118
|
|
—
|
|
—
|
|
8,711
|
Deferred compensation
plan
|
2,220
|
|
—
|
|
56
|
|
31
|
|
2
|
|
2,309
|
Reorganization
costs
|
2,280
|
|
1,292
|
|
—
|
|
—
|
|
—
|
|
3,572
|
Impairment
charges
|
—
|
|
—
|
|
7,246
|
|
—
|
|
—
|
|
7,246
|
Total
adjustments
|
13,226
|
|
12,496
|
|
11,297
|
|
1,561
|
|
4,041
|
|
42,621
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
154,149
|
|
$
675
|
|
$
(6,580)
|
|
$ (15,185)
|
|
$ (36,945)
|
|
$ 96,114
|
Adjusted EBITDA
margin
|
25.9 %
|
|
0.6 %
|
|
(9.9 %)
|
|
(2.0 %)
|
|
(4.8) %
|
|
12.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
709,265
|
|
$ 68,981
|
|
$ 59,501
|
|
$
—
|
|
$
—
|
|
$
837,747
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
152,972
|
|
(1,207)
|
|
(4,492)
|
|
(14,347)
|
|
(40,506)
|
|
92,420
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
3,418
|
|
20
|
|
738
|
|
147
|
|
6,481
|
|
10,804
|
Depreciation
|
4,351
|
|
99
|
|
346
|
|
276
|
|
331
|
|
5,403
|
Intangible
amortization
|
232
|
|
1,889
|
|
300
|
|
—
|
|
—
|
|
2,421
|
Earnout
accretion
|
—
|
|
820
|
|
—
|
|
—
|
|
—
|
|
820
|
Earnout fair value
adjustments
|
—
|
|
(507)
|
|
—
|
|
—
|
|
—
|
|
(507)
|
Acquisition contingent
compensation
|
2,971
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,971
|
Deferred compensation
plan
|
(8,254)
|
|
—
|
|
(228)
|
|
(106)
|
|
(1)
|
|
(8,589)
|
Total
adjustments
|
2,718
|
|
2,321
|
|
1,156
|
|
317
|
|
6,811
|
|
13,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
155,690
|
|
$
1,114
|
|
$
(3,336)
|
|
$ (14,030)
|
|
$ (33,695)
|
|
$
105,743
|
Adjusted EBITDA
margin
|
22.0 %
|
|
1.6 %
|
|
(5.6 %)
|
|
(1.7 %)
|
|
(4.0 %)
|
|
12.6 %
|
1 The
Company does not allocate interest income or expense, other income
or expense, and the provision for income taxes to the Company's
reportable operating segments. As such, the Company has concluded
that operating income (loss) represents the most directly
comparable measure of financial performance presented in accordance
with U.S. GAAP for the reconciliation of Adjusted EBITDA in this
presentation.
|
View original
content:https://www.prnewswire.com/news-releases/heidrick--struggles-reports-third-quarter-2023-results-301967793.html
SOURCE Heidrick & Struggles International, Inc.