Quarterly Revenue of $265 Million, 11% Year Over Year
Growth
Maintains Strong Profitability with Diluted
EPS of $0.67
Declares $0.15 Per Share Cash Dividend
CHICAGO, May 6, 2024
/PRNewswire/ -- Today Heidrick & Struggles International, Inc.
(Nasdaq: HSII) ("Heidrick & Struggles", "Heidrick" or the
"Company") announced financial results for its first quarter ended
March 31, 2024.
First Quarter Highlights:
- Net revenue of $265.2 million
increased 11% year over year
- Adjusted EBITDA of $25.9
million
- Adjusted EBITDA margin was 9.8%
- Net income was $14.0 million and
diluted earnings per share was $0.67
"During the first quarter we generated double-digit top line
growth achieving the high end of our guidance range with solid
margin performance," stated CEO Tom
Monahan. "For the clients we serve, more than ever before,
driving great corporate performance requires discovering,
accessing, evaluating and enabling exceptional leadership. During
my first two months as CEO, I have come to fully appreciate the
vast market opportunity we have in front of us given the vital and
expanding nature of the client needs we address, and our inherent
strengths including our strong collection of intellectual property
and people, trust in the Heidrick brand and our deep relationships
at the c-suite and board levels."
"Looking ahead, it is clear we need to more consistently and
forcefully use these tremendous assets to create value for our
clients, people and shareholders. Together with our leadership
team, I am tightly focused on empowering our highly talented people
to effectively meet client needs through clearer offer strategies,
an intense focus on organic service innovation and even more robust
technology."
2024 First Quarter Results
Consolidated net revenue of $265.2
million included the acquisition of Atreus Group GmbH
("Atreus") completed on February 1,
2023 and the acquisition businessfourzero completed on
April 1, 2023. Consolidated net
revenue was $239.3 million in the
2023 first quarter. The Company experienced revenue growth in
On-Demand Talent, Heidrick Consulting, and Executive Search in the
Americas and Europe, partially
offset by a decrease in Executive Search in Asia Pacific.
Adjusted EBITDA was $25.9 million
compared to $25.6 million in the 2023
first quarter. Adjusted EBITDA margin was 9.8%, compared to 10.7%
in the 2023 first quarter. In Executive Search, Adjusted EBITDA was
$48.4 million compared to
$47.8 million in the prior year
period. In On-Demand Talent, Adjusted EBITDA was a loss of
$0.9 million versus a loss of
$1.3 million in the prior year
period. In Heidrick Consulting, Adjusted EBITDA was a loss of
$2.0 million compared to a loss of
$2.8 million in the prior year
period.
Net income was $14.0 million and
diluted earnings per share was $0.67,
with an effective tax rate of 38.8% driven by the non-deductibility
of earnout expense associated with the acquisitions of Atreus and
businessfourzero. This compares to net income of $15.6 million and diluted earnings per share of
$0.76, with an effective tax rate of
31.7%, in the 2023 first quarter.
Executive Search net revenue of $201.5
million increased 5.8% compared to net revenue of
$190.5 million in the 2023 first
quarter. Excluding the impact of exchange rate fluctuations, which
positively impacted results by 0.2%, or $0.5
million, net revenue increased 5.5%, or $10.5 million from the 2023 first quarter. Net
revenue increased 7.3% in the Americas (up 7.1% on a constant
currency basis), increased 6.6% in Europe (up 4.3% on a constant currency basis),
and decreased 3.7% in Asia Pacific
(down 0.9% on a constant currency basis) when compared to the prior
year first quarter. All practice groups, except for Consumer
and Industrial, exhibited growth over the prior year
period.
The Company had 424 Executive Search consultants at March 31, 2024, compared to 432 at March 31, 2023. Productivity, as measured by
annualized Executive Search net revenue per consultant, was
$1.9 million compared to $1.8 million in the 2023 first quarter,
reflecting a lower number of consultants combined with higher
revenue. Average revenue per executive search was
approximately $136,000 compared to
$124,000 in the prior year period.
The number of search confirmations decreased 3.2% compared to the
year-ago period.
On-Demand Talent net revenue of $37.9 million increased 21.7% compared to net
revenue of $31.1 million in the 2023
first quarter, primarily due to the acquisition of Atreus. Foreign
exchange rate fluctuations positively impacted results by
$0.3 million, or 0.8%.
Heidrick Consulting net revenue of $25.9 million increased 46.0% compared to net
revenue of $17.7 million in the 2023
first quarter due to the acquisition of businessfourzero and
increases in leadership assessment and development engagements.
Excluding the impact of exchange rate fluctuations, which
positively impacted results by 2.2%, or $0.4
million, Heidrick Consulting net revenue increased 43.8%, or
$7.8 million, compared to the prior
year period. The Company had 95 Heidrick Consulting consultants at
March 31, 2024, compared to 78 at
March 31, 2023.
Consolidated salaries and benefits increased $15.6 million, or 9.8%, to $174.4 million compared to $158.9 million in the 2023 first quarter and
include the acquisitions of Atreus and businessfourzero.
Year-over-year, fixed compensation expense increased $5.4 million due to increases in base salaries
and payroll taxes, as well as increases in talent acquisition and
retention costs, stock compensation, separation expense and
expenses related to the deferred compensation plan, partially
offset by a decrease in retirement and benefits. Variable
compensation increased $10.2 million
due to an increase in consultant production. Salaries and benefits
expense was 65.8% of net revenue for the quarter, compared to 66.4%
in the 2023 first quarter.
General and administrative expenses increased $7.0 million, or 20.5%, to $41.4 million compared to $34.3 million in the 2023 first quarter and
include the acquisitions of Atreus and businessfourzero. The
increase was due to increases in business development travel,
office occupancy costs, intangible amortization and accretion,
marketing expenses, hiring fees, bad debt, and taxes and licenses
costs, partially offset by a decrease in insurance and bank
fees. As a percentage of net revenue, general and
administrative expenses were 15.6% for the 2024 first quarter
compared to 14.3% in the 2023 first quarter.
The Company's cost of services was $27.4
million, or 10.3% of net revenue for the quarter, compared
to $22.8 million, or 9.5% of net
revenue in the 2023 first quarter. This primarily 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
$5.7 million, or 2.2%, of net revenue
for the quarter compared to $5.5
million, or 2.3%, of net revenue for the first quarter
2023.
Net cash used in operating activities was $203.4 million, compared to net cash used by
operating activities of $337.0
million in the 2023 first quarter. Cash, cash equivalents
and marketable securities at March 31,
2024 was $252.8 million
compared to $204.7 million at
March 31, 2023 and $478.2 million at December
31, 2023. 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 following the year in which
they are earned.
Dividend
The Board of Directors declared a 2024 first quarter cash
dividend of $0.15 per share payable
on May 23, 2024, to shareholders of
record at the close of business on May
16, 2024.
2024 Second Quarter Outlook
The Company expects 2024 second quarter consolidated net revenue
of between $255 million and
$275 million, while acknowledging
that continued fluidity in external factors, such as the foreign
exchange and interest rate environments, foreign conflicts,
inflation and macroeconomic constraints on pricing actions, may
impact quarterly results. In addition, this outlook is based on the
average currency rates in March 2024
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 first quarter results today, May 6,
2024 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 (800)
715-9871 or (646) 307-1963, conference ID# 4805686. 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 70
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 EBITDA, Adjusted EBITDA margin, and consolidated net
revenue excluding the impact of exchange rate fluctuations
(referred to as on a constant currency basis). 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 EBITDA refers to net income before interest, taxes,
depreciation and amortization, as adjusted, to the extent they
occur, for earnout accretion, earnout fair value adjustments,
contingent compensation, deferred compensation plan income or
expense, certain reorganization costs, impairment charges and
restructuring charges.
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 second quarter of 2024. 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, retain and motivate
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 fact that increased cybersecurity
requirements, vulnerabilities, threats and more sophisticated and
targeted cyber-related attacks could pose a risk to our systems,
networks, solutions, services and data; the fact that our net
revenue may be affected by adverse macroeconomic or labor market
conditions, including impacts of inflation and effects of
geopolitical instability; the aggressive competition we face; 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, the risks of an expansion or
escalation of those conflicts and our ability to quickly and
completely recover from any disruption to our business; unfavorable
tax law changes and tax authority rulings; our ability to realize
the benefit of our net 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 maintain an effective system of
disclosure controls and internal control over our financial
reporting and produce accurate and timely financial statements; our
ability to execute and integrate future acquisitions; and the fact
that we have anti-takeover provisions that 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,
2023, under the heading "Risk Factors" in Item 1A. 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:
Suzanne Rosenberg, Vice President, Investor
Relations
srosenberg@heidrick.com
Media:
Bianca Wilson,
Director, Public Relations
bwilson@heidrick.com
Heidrick & Struggles International,
Inc.
Consolidated Statements of Comprehensive
Income
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
$
265,197
|
|
$
239,317
|
|
$
25,880
|
|
10.8 %
|
Reimbursements
|
3,901
|
|
2,802
|
|
1,099
|
|
39.2 %
|
Total
revenue
|
269,098
|
|
242,119
|
|
26,979
|
|
11.1 %
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries and
benefits
|
174,413
|
|
158,859
|
|
15,554
|
|
9.8 %
|
General and
administrative expenses
|
41,363
|
|
34,327
|
|
7,036
|
|
20.5 %
|
Cost of
services
|
27,432
|
|
22,832
|
|
4,600
|
|
20.1 %
|
Research and
development
|
5,715
|
|
5,528
|
|
187
|
|
3.4 %
|
Reimbursed
expenses
|
3,901
|
|
2,802
|
|
1,099
|
|
39.2 %
|
Total operating
expenses
|
252,824
|
|
224,348
|
|
28,476
|
|
12.7 %
|
|
|
|
|
|
|
|
|
Operating
income
|
16,274
|
|
17,771
|
|
(1,497)
|
|
(8.4) %
|
|
|
|
|
|
|
|
|
Non-operating
income
|
|
|
|
|
|
|
|
Interest,
net
|
4,086
|
|
3,249
|
|
|
|
|
Other, net
|
2,571
|
|
1,809
|
|
|
|
|
Net non-operating
income
|
6,657
|
|
5,058
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
22,931
|
|
22,829
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
8,899
|
|
7,243
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
14,032
|
|
15,586
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax
|
(4,091)
|
|
443
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
9,941
|
|
$ 16,029
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
20,144
|
|
19,904
|
|
|
|
|
Diluted
|
21,040
|
|
20,569
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
0.70
|
|
$
0.78
|
|
|
|
|
Diluted
|
$
0.67
|
|
$
0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
as a % of net revenue
|
65.8 %
|
|
66.4 %
|
|
|
|
|
General and
administrative expenses as a % of net revenue
|
15.6 %
|
|
14.3 %
|
|
|
|
|
Cost of services as a %
of net revenue
|
10.3 %
|
|
9.5 %
|
|
|
|
|
Research and
development as a % of net revenue
|
2.2 %
|
|
2.3 %
|
|
|
|
|
Operating income
margin
|
6.1 %
|
|
7.4 %
|
|
|
|
|
Heidrick & Struggles International,
Inc.
Segment Information
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
$
Change
|
|
%
Change
|
|
2024
Margin1
|
|
2023
Margin1
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
136,679
|
|
$
127,327
|
|
$ 9,352
|
|
7.3 %
|
|
|
|
|
Europe
|
41,481
|
|
38,931
|
|
2,550
|
|
6.6 %
|
|
|
|
|
Asia
Pacific
|
23,321
|
|
24,229
|
|
(908)
|
|
(3.7) %
|
|
|
|
|
Total Executive
Search
|
201,481
|
|
190,487
|
|
10,994
|
|
5.8 %
|
|
|
|
|
On-Demand
Talent
|
37,857
|
|
31,117
|
|
6,740
|
|
21.7 %
|
|
|
|
|
Heidrick
Consulting
|
25,859
|
|
17,713
|
|
8,146
|
|
46.0 %
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
265,197
|
|
239,317
|
|
25,880
|
|
10.8 %
|
|
|
|
|
Reimbursements
|
3,901
|
|
2,802
|
|
1,099
|
|
39.2 %
|
|
|
|
|
Total
revenue
|
$
269,098
|
|
$
242,119
|
|
$
26,979
|
|
11.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$ 41,871
|
|
$ 42,124
|
|
$
(253)
|
|
(0.6) %
|
|
30.6 %
|
|
33.1 %
|
Europe
|
3,353
|
|
2,081
|
|
1,272
|
|
61.1 %
|
|
8.1 %
|
|
5.3 %
|
Asia
Pacific
|
3,195
|
|
3,567
|
|
(372)
|
|
(10.4) %
|
|
13.7 %
|
|
14.7 %
|
Total Executive
Search
|
48,419
|
|
47,772
|
|
647
|
|
1.4 %
|
|
24.0 %
|
|
25.1 %
|
On-Demand
Talent
|
(921)
|
|
(1,347)
|
|
426
|
|
31.6 %
|
|
(2.4) %
|
|
(4.3) %
|
Heidrick
Consulting
|
(2,027)
|
|
(2,795)
|
|
768
|
|
27.5 %
|
|
(7.8) %
|
|
(15.8) %
|
Total
segments
|
45,471
|
|
43,630
|
|
1,841
|
|
4.2 %
|
|
17.1 %
|
|
18.2 %
|
Research and
Development
|
(4,925)
|
|
(5,251)
|
|
326
|
|
6.2 %
|
|
(1.9) %
|
|
(2.2) %
|
Global Operations
Support
|
(14,678)
|
|
(12,752)
|
|
(1,926)
|
|
(15.1) %
|
|
(5.5) %
|
|
(5.3) %
|
Total Adjusted
EBITDA
|
$ 25,868
|
|
$ 25,627
|
|
$
241
|
|
0.9 %
|
|
9.8 %
|
|
10.7 %
|
|
1 Margin based on revenue before reimbursements (net
revenue).
|
Heidrick & Struggles International,
Inc.
Consolidated Balance Sheets
(In
thousands)
(Unaudited)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
252,831
|
|
$
412,618
|
Marketable
securities
|
—
|
|
65,538
|
Accounts receivable,
net
|
172,953
|
|
133,128
|
Prepaid
expenses
|
31,426
|
|
23,597
|
Other current
assets
|
48,865
|
|
47,923
|
Income taxes
recoverable
|
5,957
|
|
10,410
|
Total current
assets
|
512,032
|
|
693,214
|
|
|
|
|
Non-current
assets
|
|
|
|
Property and equipment,
net
|
40,452
|
|
35,752
|
Operating lease
right-of-use assets
|
85,053
|
|
86,063
|
Assets designated for
retirement and pension plans
|
10,854
|
|
11,105
|
Investments
|
54,835
|
|
47,287
|
Other non-current
assets
|
16,680
|
|
17,071
|
Goodwill
|
200,089
|
|
202,252
|
Other intangible
assets, net
|
18,305
|
|
20,842
|
Deferred income
taxes
|
27,170
|
|
28,005
|
Total non-current
assets
|
453,438
|
|
448,377
|
|
|
|
|
Total
assets
|
$
965,470
|
|
$ 1,141,591
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
19,776
|
|
$
20,837
|
Accrued salaries and
benefits
|
133,735
|
|
322,744
|
Deferred
revenue
|
47,377
|
|
45,732
|
Operating lease
liabilities
|
20,351
|
|
21,498
|
Other current
liabilities
|
24,449
|
|
21,823
|
Income taxes
payable
|
6,190
|
|
6,057
|
Total current
liabilities
|
251,878
|
|
438,691
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Accrued salaries and
benefits
|
50,263
|
|
52,108
|
Retirement and pension
plans
|
69,572
|
|
62,100
|
Operating lease
liabilities
|
78,050
|
|
78,204
|
Other non-current
liabilities
|
41,152
|
|
41,808
|
Deferred income
taxes
|
5,770
|
|
6,402
|
Total non-current
liabilities
|
244,807
|
|
240,622
|
|
|
|
|
Total
liabilities
|
496,685
|
|
679,313
|
|
|
|
|
Stockholders'
equity
|
468,785
|
|
462,278
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$
965,470
|
|
$ 1,141,591
|
Heidrick & Struggles International,
Inc.
Consolidated Statements of Cash
Flows
(In
thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2024
|
|
2023
|
Cash flows -
operating activities
|
|
|
|
|
Net income
|
|
$
14,032
|
|
$
15,586
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
4,790
|
|
3,873
|
Deferred income
taxes
|
|
(87)
|
|
6,669
|
Stock-based
compensation expense
|
|
2,644
|
|
1,853
|
Accretion expense
related to earnout payments
|
|
466
|
|
191
|
Gain on marketable
securities
|
|
(539)
|
|
(1,645)
|
Loss on disposal of
property and equipment
|
|
14
|
|
130
|
Changes in assets and
liabilities, net of effects of acquisition:
|
|
|
|
|
Accounts
receivable
|
|
(41,125)
|
|
(24,332)
|
Accounts
payable
|
|
(2,069)
|
|
(1,137)
|
Accrued
expenses
|
|
(182,590)
|
|
(325,975)
|
Deferred
revenue
|
|
1,951
|
|
147
|
Income taxes
recoverable and payable, net
|
|
4,723
|
|
(3,083)
|
Retirement and pension
plan assets and liabilities
|
|
5,453
|
|
6,070
|
Prepaid
expenses
|
|
(7,991)
|
|
(7,135)
|
Other assets and
liabilities, net
|
|
(3,096)
|
|
(8,243)
|
Net cash used in
operating activities
|
|
(203,424)
|
|
(337,031)
|
|
|
|
|
|
Cash flows -
investing activities
|
|
|
|
|
Acquisition of
businesses, net of cash acquired
|
|
—
|
|
(29,907)
|
Capital
expenditures
|
|
(6,173)
|
|
(3,808)
|
Purchases of marketable
securities and investments
|
|
(5,400)
|
|
(6,172)
|
Proceeds from sales of
marketable securities and investments
|
|
66,285
|
|
267,965
|
Net cash provided by
investing activities
|
|
54,712
|
|
228,078
|
|
|
|
|
|
Cash flows -
financing activities
|
|
|
|
|
Cash dividends
paid
|
|
(3,216)
|
|
(3,112)
|
Payment of employee tax
withholdings on equity transactions
|
|
(2,862)
|
|
(4,141)
|
Acquisition earnout
payments
|
|
—
|
|
(35,946)
|
Net cash used in
financing activities
|
|
(6,078)
|
|
(43,199)
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash, cash equivalents and restricted cash
|
|
(4,997)
|
|
1,396
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
(159,787)
|
|
(150,756)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
412,618
|
|
355,489
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$ 252,831
|
|
$ 204,733
|
Heidrick & Struggles International,
Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
Revenue before
reimbursements (net revenue)
|
$
265,197
|
|
$
239,317
|
|
|
|
|
Net
income
|
14,032
|
|
15,586
|
Interest,
net
|
(4,086)
|
|
(3,249)
|
Other, net
|
(2,571)
|
|
(1,809)
|
Provision for income
taxes
|
8,899
|
|
7,243
|
Operating
income
|
16,274
|
|
17,771
|
|
|
|
|
Adjustments
|
|
|
|
Depreciation
|
2,493
|
|
2,004
|
Intangible
amortization
|
2,297
|
|
1,869
|
Earnout
accretion
|
466
|
|
191
|
Acquisition contingent
consideration
|
1,988
|
|
1,659
|
Deferred compensation
plan
|
2,350
|
|
2,133
|
Total
adjustments
|
9,594
|
|
7,856
|
|
|
|
|
Adjusted
EBITDA
|
$ 25,868
|
|
$ 25,627
|
Adjusted EBITDA
margin
|
9.8 %
|
|
10.7 %
|
Heidrick & Struggles International,
Inc.
Reconciliation of Operating Income to Adjusted EBITDA
(Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
March 31, 2024
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
201,481
|
|
$ 37,857
|
|
$ 25,859
|
|
$
—
|
|
$
—
|
|
$
265,197
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
45,532
|
|
(4,849)
|
|
(3,842)
|
|
(5,715)
|
|
(14,852)
|
|
16,274
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
1,241
|
|
131
|
|
197
|
|
754
|
|
170
|
|
2,493
|
Intangible
amortization
|
17
|
|
1,835
|
|
445
|
|
—
|
|
—
|
|
2,297
|
Earnout
accretion
|
—
|
|
406
|
|
60
|
|
—
|
|
—
|
|
466
|
Acquisition contingent
compensation
|
(630)
|
|
1,556
|
|
1,062
|
|
—
|
|
—
|
|
1,988
|
Deferred compensation
plan
|
2,259
|
|
—
|
|
51
|
|
36
|
|
4
|
|
2,350
|
Total
adjustments
|
2,887
|
|
3,928
|
|
1,815
|
|
790
|
|
174
|
|
9,594
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 48,419
|
|
$
(921)
|
|
$
(2,027)
|
|
$
(4,925)
|
|
$ (14,678)
|
|
$ 25,868
|
Adjusted EBITDA
margin
|
24.0 %
|
|
(2.4 %)
|
|
(7.8 %)
|
|
(1.9 %)
|
|
(5.5) %
|
|
9.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2023
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
190,487
|
|
$ 31,117
|
|
$ 17,713
|
|
$
—
|
|
$
—
|
|
$
239,317
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
43,693
|
|
(4,364)
|
|
(3,116)
|
|
(5,528)
|
|
(12,914)
|
|
17,771
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
1,343
|
|
85
|
|
168
|
|
248
|
|
160
|
|
2,004
|
Intangible
amortization
|
52
|
|
1,717
|
|
100
|
|
—
|
|
—
|
|
1,869
|
Earnout
accretion
|
—
|
|
191
|
|
—
|
|
—
|
|
—
|
|
191
|
Acquisition contingent
compensation
|
635
|
|
1,024
|
|
—
|
|
—
|
|
—
|
|
1,659
|
Deferred compensation
plan
|
2,049
|
|
—
|
|
53
|
|
29
|
|
2
|
|
2,133
|
Total
adjustments
|
4,079
|
|
3,017
|
|
321
|
|
277
|
|
162
|
|
7,856
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 47,772
|
|
$
(1,347)
|
|
$
(2,795)
|
|
$
(5,251)
|
|
$ (12,752)
|
|
$ 25,627
|
Adjusted EBITDA
margin
|
25.1 %
|
|
(4.3 %)
|
|
(15.8 %)
|
|
(2.2 %)
|
|
(5.3 %)
|
|
10.7 %
|
|
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.
|
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SOURCE Heidrick & Struggles