Heidrick & Struggles Reports Third Quarter 2024 Results
Heidrick & Struggles reported strong Q3 2024 financial results with net revenue increasing 5.9% year-over-year to $278.6 million. The company achieved growth across all business segments, with Executive Search revenue up 2.8%, On-Demand Talent up 12.6%, and Heidrick Consulting up 19.9%. Net income was $14.8 million with diluted EPS of $0.71. The company maintained strong profitability with an Adjusted EBITDA of $30.4 million and a margin of 10.9%. The Board declared a quarterly cash dividend of $0.15 per share. For Q4 2024, the company projects consolidated net revenue between $255 million and $275 million.
Heidrick & Struggles ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un incremento del fatturato netto del 5,9% rispetto all'anno precedente, raggiungendo $278,6 milioni. L'azienda ha registrato crescita in tutti i segmenti di business, con il fatturato per Executive Search in aumento del 2,8%, Talent On-Demand in crescita del 12,6% e Heidrick Consulting in aumento del 19,9%. Il reddito netto è stato di $14,8 milioni con un utile per azione diluito di $0,71. L'azienda ha mantenuto una forte redditività con un EBITDA rettificato di $30,4 milioni e un margine del 10,9%. Il Consiglio ha dichiarato un dividendo in contante trimestrale di $0,15 per azione. Per il quarto trimestre del 2024, l'azienda prevede un fatturato netto consolidato tra $255 milioni e $275 milioni.
Heidrick & Struggles reportó resultados financieros sólidos para el tercer trimestre de 2024, con un aumento de ingresos netos del 5,9% en comparación con el año anterior, alcanzando $278,6 millones. La empresa logró crecimiento en todos los segmentos de negocio, con ingresos de Executive Search aumentando un 2,8%, On-Demand Talent creciendo un 12,6% y Heidrick Consulting subiendo un 19,9%. El ingreso neto fue de $14,8 millones con un EPS diluido de $0,71. La compañía mantuvo una fuerte rentabilidad con un EBITDA ajustado de $30,4 millones y un margen del 10,9%. La Junta declaró un dividendo en efectivo trimestral de $0,15 por acción. Para el cuarto trimestre de 2024, la empresa proyecta ingresos netos consolidados entre $255 millones y $275 millones.
Heidrick & Struggles는 2024년 3분기 재무 성과가 양호하다고 보고했으며, 순수익이 지난해 대비 5.9% 증가하여 $278.6 백만에 도달했습니다. 회사는 모든 비즈니스 부문에서 성장을 달성했으며, Executive Search 수익은 2.8%, On-Demand Talent는 12.6%, Heidrick Consulting은 19.9% 증가했습니다. 순이익은 $14.8 백만으로 희석 EPS는 $0.71이었습니다. 회사는 조정된 EBITDA가 $30.4 백만으로, 마진이 10.9%로 강력한 수익성을 유지했습니다. 이사회는 주당 $0.15의 분기 현금 배당금을 선언했습니다. 2024년 4분기를 위해 회사는 총순수익을 $255 백만에서 $275 백만 사이로 예상하고 있습니다.
Heidrick & Struggles a rapporté des résultats financiers solides pour le troisième trimestre 2024, avec des revenus nets en hausse de 5,9 % par rapport à l'année précédente, atteignant $278,6 millions. L'entreprise a connu une croissance dans tous les segments d'activité, avec des revenus d'Executive Search en hausse de 2,8 %, d'On-Demand Talent en hausse de 12,6 % et de Heidrick Consulting en hausse de 19,9 %. Le revenu net s'élevait à $14,8 millions, avec un BPA dilué de $0,71. L'entreprise a maintenu une forte rentabilité avec un EBITDA ajusté de $30,4 millions et une marge de 10,9 %. Le Conseil a déclaré un dividende en espèces trimestriel de $0,15 par action. Pour le quatrième trimestre 2024, l'entreprise prévoit un revenu net consolidé compris entre $255 millions et $275 millions.
Heidrick & Struggles berichtete über starke finanzielle Ergebnisse im 3. Quartal 2024, mit einem Anstieg des Nettoumsatzes um 5,9 % im Vergleich zum Vorjahr auf $278,6 Millionen. Das Unternehmen erzielte Wachstum in allen Geschäftsbereichen, wobei die Einnahmen aus Executive Search um 2,8 %, On-Demand Talent um 12,6 % und Heidrick Consulting um 19,9 % anstiegen. Das Nettoergebnis betrug $14,8 Millionen bei einem verwässerten EPS von $0,71. Das Unternehmen hielt eine starke Rentabilität mit einem bereinigten EBITDA von $30,4 Millionen und einer Marge von 10,9 %. Der Vorstand erklärte eine vierteljährliche Bar-Dividende von $0,15 pro Aktie. Für das 4. Quartal 2024 prognostiziert das Unternehmen einen konsolidierten Nettoumsatz zwischen $255 Millionen und $275 Millionen.
- Revenue growth of 5.9% YoY to $278.6 million
- Strong growth in On-Demand Talent (12.6%) and Heidrick Consulting (19.9%)
- Improved consultant productivity to $2.0 million from $1.9 million YoY
- Search confirmations increased 5.4% compared to prior year
- Strong cash position of $409.4 million, up from $334.0 million YoY
- Adjusted EBITDA margin declined to 10.9% from 11.2% YoY
- Salaries and benefits expense increased to 65.7% of revenue from 63.5% YoY
- Slight decrease in Executive Search consultants to 414 from 417 YoY
- Average revenue per executive search decreased to $149,000 from $153,000
- European Executive Search revenue declined 3.3% YoY
Insights
The Q3 results demonstrate solid performance with
Key financial metrics reveal healthy profitability with an Adjusted EBITDA margin of
The Q4 guidance of
The company's market positioning shows resilience in a challenging environment. Geographic performance varies significantly, with Asia Pacific leading growth at
Productivity metrics are encouraging, with annualized Executive Search revenue per consultant reaching
The diversification strategy across Executive Search, On-Demand Talent and Consulting services provides multiple growth vectors and helps maintain competitive advantage in the global leadership advisory market.
Quarterly Revenue Up
All Business Segments Contribute to Top Line Growth
Delivers Strong Profitability with Diluted EPS of
Declares
Third Quarter Highlights:
- Net revenue of
increased$278.6 million 5.9% year-over-year - Adjusted EBITDA of
$30.4 million - Adjusted EBITDA margin of
10.9%
"Our Heidrick colleagues delivered solid quarterly results, outperforming industry trends and reaching the upper end of our outlook. This performance reflects our team's sharp focus on market opportunities and client needs even as we implemented significant change across our organization," said CEO Tom Monahan. "Looking ahead, there is still much work to be done as we pursue growth opportunities in Executive Search, more tightly focus our suite of leadership solutions, and drive profitability and scalability across the portfolio."
"This work will allow us to take advantage of a large and growing market opportunity as clients increasingly put leadership strategy at the heart of their corporate strategy. With an iconic brand, deep expertise across regions and sectors, and a robust financial position, we believe Heidrick is well positioned to attract top talent and cultivate deeper and more durable client relationships. Combining these assets with disciplined execution will enable us to achieve sustained and profitable organic growth while enhancing long-term shareholder value."
2024 Third Quarter Results
Consolidated net revenue of
Adjusted EBITDA was
Net income was
Executive Search net revenue of
The Company had 414 Executive Search consultants at September 30, 2024, compared to 417 at September 30, 2023. Productivity, as measured by annualized Executive Search net revenue per consultant, was
On-Demand Talent net revenue of
Heidrick Consulting net revenue of
Consolidated salaries and benefits increased
General and administrative expenses increased
The Company's cost of services was
The Company's research and development expenses were
Net cash provided by operating activities was
Dividend
The Board of Directors declared a 2024 fourth quarter cash dividend of
2024 Fourth Quarter Outlook
The Company expects 2024 fourth quarter consolidated net revenue of between
Quarterly Webcast and Conference Call
Heidrick & Struggles will host a conference call to review its third quarter results today, November 4, 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
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, other income or expense, income 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.
Adjusted net income and adjusted diluted earnings per share reflect the exclusion of goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.
Adjusted effective tax rate reflects the exclusion of goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.
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 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
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 September 30, | |||||||
2024 | 2023 | $ Change | % Change | ||||
Revenue | |||||||
Revenue before reimbursements (net revenue) | $ 278,559 | $ 263,160 | $ 15,399 | 5.9 % | |||
Reimbursements | 4,256 | 4,736 | (480) | (10.1) % | |||
Total revenue | 282,815 | 267,896 | 14,919 | 5.6 % | |||
Operating expenses | |||||||
Salaries and benefits | 183,025 | 167,219 | 15,806 | 9.5 % | |||
General and administrative expenses | 39,740 | 37,564 | 2,176 | 5.8 % | |||
Cost of services | 31,030 | 30,680 | 350 | 1.1 % | |||
Research and development | 5,682 | 5,560 | 122 | 2.2 % | |||
Reimbursed expenses | 4,256 | 4,736 | (480) | (10.1) % | |||
Total operating expenses | 263,733 | 245,759 | 17,974 | 7.3 % | |||
Operating income | 19,082 | 22,137 | (3,055) | (13.8) % | |||
Non-operating income (loss) | |||||||
Interest, net | 2,570 | 2,505 | |||||
Other, net | (555) | (649) | |||||
Net non-operating income | 2,015 | 1,856 | |||||
Income before income taxes | 21,097 | 23,993 | |||||
Provision for income taxes | 6,268 | 9,006 | |||||
Net income | 14,829 | 14,987 | |||||
Other comprehensive income (loss), net of tax | 6,996 | (4,001) | |||||
Comprehensive income | $ 21,825 | $ 10,986 | |||||
Weighted-average common shares outstanding | |||||||
Basic | 20,357 | 20,076 | |||||
Diluted | 21,024 | 20,553 | |||||
Earnings per common share | |||||||
Basic | $ 0.73 | $ 0.75 | |||||
Diluted | $ 0.71 | $ 0.73 | |||||
Salaries and benefits as a % of net revenue | 65.7 % | 63.5 % | |||||
General and administrative expenses as a % of net revenue | 14.3 % | 14.3 % | |||||
Cost of services as a % of net revenue | 11.1 % | 11.7 % | |||||
Research and development as a % of net revenue | 2.0 % | 2.1 % | |||||
Operating margin | 6.9 % | 8.4 % |
Heidrick & Struggles International, Inc. Segment Information (In thousands) (Unaudited) | |||||||||||
Three Months Ended September 30, | |||||||||||
2024 | 2023 | $ Change | % | 2024 | 2023 | ||||||
Revenue | |||||||||||
Executive Search | |||||||||||
$ 2,225 | 1.7 % | ||||||||||
43,143 | 44,606 | (1,463) | (3.3) % | ||||||||
26,701 | 21,888 | 4,813 | 22.0 % | ||||||||
Total Executive Search | 204,389 | 198,814 | 5,575 | 2.8 % | |||||||
On-Demand Talent | 46,231 | 41,053 | 5,178 | 12.6 % | |||||||
Heidrick Consulting | 27,939 | 23,293 | 4,646 | 19.9 % | |||||||
Revenue before reimbursements (net revenue) | 278,559 | 263,160 | 15,399 | 5.9 % | |||||||
Reimbursements | 4,256 | 4,736 | (480) | (10.1) % | |||||||
Total revenue | 5.6 % | ||||||||||
Adjusted EBITDA | |||||||||||
Executive Search | |||||||||||
$ 1,111 | 2.8 % | 30.1 % | 29.7 % | ||||||||
5,022 | 8,950 | (3,928) | (43.9) % | 11.6 % | 20.1 % | ||||||
5,247 | 2,704 | 2,543 | 94.0 % | 19.7 % | 12.4 % | ||||||
Total Executive Search | 50,734 | 51,008 | (274) | (0.5) % | 24.8 % | 25.7 % | |||||
On-Demand Talent | 1,763 | (580) | 2,343 | NM | 3.8 % | (1.4) % | |||||
Heidrick Consulting | (1,025) | (2,391) | 1,366 | 57.1 % | (3.7) % | (10.3) % | |||||
Total segments | 51,472 | 48,037 | 3,435 | 7.2 % | 18.5 % | 18.3 % | |||||
Research and Development | (4,606) | (4,927) | 321 | 6.5 % | (1.7) % | (1.9) % | |||||
Global Operations Support | (16,451) | (13,761) | (2,690) | (19.5) % | (5.9) % | (5.2) % | |||||
Total Adjusted EBITDA | $ 1,066 | 3.6 % | 10.9 % | 11.2 % |
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, | |||||||
2024 | 2023 | $ Change | % Change | ||||
Revenue | |||||||
Revenue before reimbursements (net revenue) | $ 822,382 | $ 773,702 | $ 48,680 | 6.3 % | |||
Reimbursements | 12,408 | 10,090 | 2,318 | 23.0 % | |||
Total revenue | 834,790 | 783,792 | 50,998 | 6.5 % | |||
Operating expenses | |||||||
Salaries and benefits | 535,330 | 504,994 | 30,336 | 6.0 % | |||
General and administrative expenses | 127,556 | 112,405 | 15,151 | 13.5 % | |||
Cost of services | 88,158 | 78,818 | 9,340 | 11.9 % | |||
Research and development | 17,002 | 16,746 | 256 | 1.5 % | |||
Impairment charges | 16,224 | 7,246 | 8,978 | 123.9 % | |||
Restructuring charges | 6,939 | — | 6,939 | 100.0 % | |||
Reimbursed expenses | 12,408 | 10,090 | 2,318 | 23.0 % | |||
Total operating expenses | 803,617 | 730,299 | 73,318 | 10.0 % | |||
Operating income | 31,173 | 53,493 | (22,320) | (41.7) % | |||
Non-operating income | |||||||
Interest, net | 9,268 | 7,667 | |||||
Other, net | 3,013 | 2,537 | |||||
Net non-operating income | 12,281 | 10,204 | |||||
Income before income taxes | 43,454 | 63,697 | |||||
Provision for income taxes | 19,750 | 24,142 | |||||
Net income | 23,704 | 39,555 | |||||
Other comprehensive income (loss), net of tax | 811 | (3,633) | |||||
Comprehensive income | $ 24,515 | $ 35,922 | |||||
Weighted-average common shares outstanding | |||||||
Basic | 20,254 | 19,998 | |||||
Diluted | 21,144 | 20,716 | |||||
Earnings per common share | |||||||
Basic | $ 1.17 | $ 1.98 | |||||
Diluted | $ 1.12 | $ 1.91 | |||||
Salaries and benefits as a % of net revenue | 65.1 % | 65.3 % | |||||
General and administrative expenses as a % of net revenue | 15.5 % | 14.5 % | |||||
Cost of services as a % of net revenue | 10.7 % | 10.2 % | |||||
Research and development as a % of net revenue | 2.1 % | 2.2 % | |||||
Operating margin | 3.8 % | 6.9 % |
Heidrick & Struggles International, Inc. Segment Information (In thousands) (Unaudited) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2024 | 2023 | $ Change | % Change | 2024 | 2023 | ||||||
Revenue | |||||||||||
Executive Search | |||||||||||
$ 418,302 | $ 398,210 | $ 20,092 | 5.0 % | ||||||||
124,706 | 129,104 | (4,398) | (3.4) % | ||||||||
72,829 | 68,766 | 4,063 | 5.9 % | ||||||||
Total Executive Search | 615,837 | 596,080 | 19,757 | 3.3 % | |||||||
On-Demand Talent | 125,983 | 111,410 | 14,573 | 13.1 % | |||||||
Heidrick Consulting | 80,562 | 66,212 | 14,350 | 21.7 % | |||||||
Revenue before reimbursements (net revenue) | 822,382 | 773,702 | 48,680 | 6.3 % | |||||||
Reimbursements | 12,408 | 10,090 | 2,318 | 23.0 % | |||||||
Total revenue | $ 834,790 | $ 783,792 | $ 50,998 | 6.5 % | |||||||
Adjusted EBITDA | |||||||||||
Executive Search | |||||||||||
$ 130,448 | $ 127,557 | $ 2,891 | 2.3 % | 31.2 % | 32.0 % | ||||||
11,215 | 16,487 | (5,272) | (32.0) % | 9.0 % | 12.8 % | ||||||
10,182 | 7,901 | 2,281 | 28.9 % | 14.0 % | 11.5 % | ||||||
Total Executive Search | 151,845 | 151,945 | (100) | (0.1) % | 24.7 % | 25.5 % | |||||
On-Demand Talent | (787) | 660 | (1,447) | NM | (0.6) % | 0.6 % | |||||
Heidrick Consulting | (4,447) | (6,848) | 2,401 | 35.1 % | (5.5) % | (10.3) % | |||||
Total segments | 146,611 | 145,757 | 854 | 0.6 % | 17.8 % | 18.8 % | |||||
Research and Development | (14,312) | (15,396) | 1,084 | 7.0 % | (1.7) % | (2.0) % | |||||
Global Operations Support | (47,205) | (40,501) | (6,704) | (16.6) % | (5.7) % | (5.2) % | |||||
Total Adjusted EBITDA | $ 85,094 | $ 89,860 | $ (4,766) | (5.3) % | 10.3 % | 11.6 % |
1 | Margin based on revenue before reimbursements (net revenue). |
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, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net income | $ 14,829 | $ 14,987 | $ 23,704 | $ 39,555 | |||
Adjustments | |||||||
Impairment charges, net of tax(1) | — | — | 14,190 | 6,038 | |||
Earnout fair value adjustment, net of tax(2)(4) | 39 | — | 788 | — | |||
Restructuring charges, net of tax(3)(4) | 225 | — | 4,516 | — | |||
Total adjustments | 264 | — | 19,494 | 6,038 | |||
Adjusted net income | $ 15,093 | $ 14,987 | $ 43,198 | $ 45,593 | |||
Weighted-average common shares outstanding | |||||||
Basic | 20,357 | 20,076 | 20,254 | 19,998 | |||
Diluted | 21,024 | 20,553 | 21,144 | 20,716 | |||
Earnings per common share | |||||||
Basic | $ 0.73 | $ 0.75 | $ 1.17 | $ 1.98 | |||
Diluted | $ 0.71 | $ 0.73 | $ 1.12 | $ 1.91 | |||
Adjusted earnings per common share | |||||||
Basic | $ 0.74 | $ 0.75 | $ 2.13 | $ 2.28 | |||
Diluted | $ 0.72 | $ 0.73 | $ 2.04 | $ 2.20 |
1 | The Company recorded goodwill impairment charges of |
2 | The Company recorded a fair value adjustment to increase the On-Demand Talent earnout by |
3 | The Company recorded restructuring charges of |
4 | Amounts for the three months ended September 30, 2024 reflect the impact of a change to the estimated annual effective tax rate. There were no further impairment charges, earnout fair value adjustments, or restructuring charges recorded during the period. |
Heidrick & Struggles International, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) | |||
September 30, | December 31, | ||
Current assets | |||
Cash and cash equivalents | $ 363,422 | $ 412,618 | |
Marketable securities | 46,005 | 65,538 | |
Accounts receivable, net | 186,252 | 133,128 | |
Prepaid expenses | 27,682 | 23,597 | |
Other current assets | 48,928 | 47,923 | |
Income taxes recoverable | 10,795 | 10,410 | |
Total current assets | 683,084 | 693,214 | |
Non-current assets | |||
Property and equipment, net | 53,508 | 35,752 | |
Operating lease right-of-use assets | 83,262 | 86,063 | |
Assets designated for retirement and pension plans | 11,203 | 11,105 | |
Investments | 59,089 | 47,287 | |
Other non-current assets | 25,507 | 17,071 | |
Goodwill | 185,400 | 202,252 | |
Other intangible assets, net | 15,110 | 20,842 | |
Deferred income taxes | 29,617 | 28,005 | |
Total non-current assets | 462,696 | 448,377 | |
Total assets | $ 1,145,780 | $ 1,141,591 | |
Current liabilities | |||
Accounts payable | $ 21,517 | $ 20,837 | |
Accrued salaries and benefits | 277,498 | 322,744 | |
Deferred revenue | 47,106 | 45,732 | |
Operating lease liabilities | 18,985 | 21,498 | |
Other current liabilities | 23,394 | 21,823 | |
Income taxes payable | 6,891 | 6,057 | |
Total current liabilities | 395,391 | 438,691 | |
Non-current liabilities | |||
Accrued salaries and benefits | 55,338 | 52,108 | |
Retirement and pension plans | 75,048 | 62,100 | |
Operating lease liabilities | 84,623 | 78,204 | |
Other non-current liabilities | 46,158 | 41,808 | |
Deferred income taxes | 5,937 | 6,402 | |
Total non-current liabilities | 267,104 | 240,622 | |
Total liabilities | 662,495 | 679,313 | |
Stockholders' equity | 483,285 | 462,278 | |
Total liabilities and stockholders' equity | $ 1,145,780 | $ 1,141,591 |
Heidrick & Struggles International, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) | ||||
Three Months Ended September 30, | ||||
2024 | 2023 | |||
Cash flows - operating activities | ||||
Net income | $ 14,829 | $ 14,987 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 4,950 | 4,740 | ||
Deferred income taxes | 273 | (6,994) | ||
Stock-based compensation expense | 3,792 | 3,559 | ||
Accretion expense related to earnout payments | 478 | 455 | ||
Gain on marketable securities | (1,343) | (346) | ||
Loss on disposal of property and equipment | 3 | 61 | ||
Changes in assets and liabilities, net of effects of acquisition: | ||||
Accounts receivable | 4,135 | 7,785 | ||
Accounts payable | (10,968) | 1,257 | ||
Accrued expenses | 83,375 | 76,113 | ||
Restructuring accrual | (1,396) | — | ||
Deferred revenue | 1,836 | (2,165) | ||
Income taxes recoverable and payable, net | (5,021) | 9,205 | ||
Retirement and pension plan assets and liabilities | 585 | 294 | ||
Prepaid expenses | 595 | (1,136) | ||
Other assets and liabilities, net | 5,022 | 1,659 | ||
Net cash provided by operating activities | 101,145 | 109,474 | ||
Cash flows - investing activities | ||||
Acquisition of businesses, net of cash acquired | — | (2,204) | ||
Capital expenditures | 6,891 | (2,805) | ||
Purchases of marketable securities and investments | (346) | (47,781) | ||
Proceeds from sales of marketable securities and investments | 62,496 | 21,571 | ||
Net cash provided by (used in) investing activities | 69,041 | (31,219) | ||
Cash flows - financing activities | ||||
Cash dividends paid | (3,211) | (3,149) | ||
Payment of employee tax withholdings on equity transactions | (53) | — | ||
Acquisition earnout payments | — | (2,038) | ||
Net cash used in financing activities | (3,264) | (5,187) | ||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | 6,578 | (4,414) | ||
Net increase in cash, cash equivalents and restricted cash | 173,500 | 68,654 | ||
Cash, cash equivalents and restricted cash at beginning of period | 189,922 | 217,817 | ||
Cash, cash equivalents and restricted cash at end of period | $ 363,422 | $ 286,471 |
Heidrick & Struggles International, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) | ||||
Nine Months Ended September 30, | ||||
2024 | 2023 | |||
Cash flows - operating activities | ||||
Net income | $ 23,704 | $ 39,555 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization | 13,650 | 13,432 | ||
Deferred income taxes | (2,060) | (548) | ||
Stock-based compensation expense | 9,901 | 7,331 | ||
Accretion expense related to earnout payments | 1,413 | 1,097 | ||
Gain on marketable securities | (2,323) | (2,040) | ||
Loss on disposal of property and equipment | 264 | 192 | ||
Impairment charges | 16,224 | 7,246 | ||
Changes in assets and liabilities: | ||||
Accounts receivable | (51,707) | (52,205) | ||
Accounts payable | (13,292) | (1,657) | ||
Accrued expenses | (41,372) | (197,698) | ||
Restructuring accrual | 2,990 | — | ||
Deferred revenue | 1,163 | (1,622) | ||
Income taxes recoverable and payable, net | 347 | 6,617 | ||
Retirement and pension plan assets and liabilities | 6,385 | 6,697 | ||
Prepaid expenses | (4,057) | (3,771) | ||
Other assets and liabilities, net | (987) | (3,243) | ||
Net cash used in operating activities | (39,757) | (180,617) | ||
Cash flows - investing activities | ||||
Acquisition of business, net of cash acquired | — | (37,953) | ||
Capital expenditures | (9,647) | (9,619) | ||
Purchases of marketable securities and investments | (115,608) | (75,464) | ||
Proceeds from sales of marketable securities and investments | 129,070 | 289,689 | ||
Net cash provided by investing activities | 3,815 | 166,653 | ||
Cash flows - financing activities | ||||
Repurchases of common stock | — | (904) | ||
Cash dividends paid | (9,609) | (9,383) | ||
Payment of employee tax withholdings on equity transactions | (3,800) | (4,141) | ||
Acquisition earnout payments | — | (37,984) | ||
Net cash used in financing activities | (13,409) | (52,412) | ||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | 155 | (2,642) | ||
Net decrease in cash, cash equivalents and restricted cash | (49,196) | (69,018) | ||
Cash, cash equivalents and restricted cash at beginning of period | 412,618 | 355,489 | ||
Cash, cash equivalents and restricted cash at end of period | $ 363,422 | $ 286,471 |
Heidrick & Struggles International, Inc. Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP) (In thousands) (Unaudited) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenue before reimbursements (net revenue) | $ 278,559 | $ 263,160 | $ 822,382 | $ 773,702 | |||
Net income | 14,829 | 14,987 | 23,704 | 39,555 | |||
Interest, net | (2,570) | (2,505) | (9,268) | (7,667) | |||
Other, net | 555 | 649 | (3,013) | (2,537) | |||
Provision for income taxes | 6,268 | 9,006 | 19,750 | 24,142 | |||
Operating income | 19,082 | 22,137 | 31,173 | 53,493 | |||
Adjustments | |||||||
Depreciation | 2,997 | 2,387 | 7,480 | 6,563 | |||
Intangible amortization | 1,953 | 2,353 | 6,170 | 6,869 | |||
Earnout accretion | 478 | 455 | 1,413 | 1,097 | |||
Earnout fair value adjustments | — | — | 1,211 | — | |||
Acquisition contingent consideration | 2,947 | 3,268 | 8,220 | 8,711 | |||
Deferred compensation plan | 2,958 | (1,427) | 6,264 | 2,309 | |||
Reorganization costs | — | 176 | — | 3,572 | |||
Impairment charges | — | — | 16,224 | 7,246 | |||
Restructuring charges | — | — | 6,939 | — | |||
Total adjustments | 11,333 | 7,212 | 53,921 | 36,367 | |||
Adjusted EBITDA | $ 30,415 | $ 29,349 | $ 85,094 | $ 89,860 | |||
Adjusted EBITDA margin | 10.9 % | 11.2 % | 10.3 % | 11.6 % |
Heidrick & Struggles International, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Line of Business (Non-GAAP) (In thousands) (Unaudited) | |||||||||||
Three Months Ended September 30, 2024 | |||||||||||
Executive | On-Demand | Heidrick | Research & | Global | Total | ||||||
Revenue before reimbursements (net | $ 204,389 | $ 46,231 | $ 27,939 | $ — | $ — | $ 278,559 | |||||
Operating income (loss)1 | 46,270 | (2,036) | (2,835) | (5,682) | (16,635) | 19,082 | |||||
Adjustments | |||||||||||
Depreciation | 1,389 | 175 | 227 | 1,029 | 177 | 2,997 | |||||
Intangible amortization | 17 | 1,560 | 376 | — | — | 1,953 | |||||
Earnout accretion | — | 436 | 42 | — | — | 478 | |||||
Acquisition contingent compensation | 209 | 1,628 | 1,110 | — | — | 2,947 | |||||
Deferred compensation plan | 2,849 | — | 55 | 47 | 7 | 2,958 | |||||
Total adjustments | 4,464 | 3,799 | 1,810 | 1,076 | 184 | 11,333 | |||||
Adjusted EBITDA | $ 50,734 | $ 1,763 | $ (1,025) | $ (4,606) | $ (16,451) | $ 30,415 | |||||
Adjusted EBITDA margin | 24.8 % | 3.8 % | (3.7) % | (1.7) % | (5.9) % | 10.9 % | |||||
Three Months Ended September 30, 2023 | |||||||||||
Executive | On-Demand | Heidrick | Research & | Global | Total | ||||||
Revenue before reimbursements (net | $ 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 | |||||||||||
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 | 718 | 4,015 | 1,684 | 633 | 162 | 7,212 | |||||
Adjusted EBITDA | $ 51,008 | $ (580) | $ (2,391) | $ (4,927) | $ (13,761) | $ 29,349 | |||||
Adjusted EBITDA margin | 25.7 % | (1.4 %) | (10.3 %) | (1.9) % | (5.2) % | 11.2 % |
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 |
Heidrick & Struggles International, Inc. Reconciliation of Operating Income (Loss) to Adjusted EBITDA (Non-GAAP) (In thousands) (Unaudited) | |||||||||||
Nine Months Ended September 30, 2024 | |||||||||||
Executive | On-Demand | Heidrick | Research & | Global | Total | ||||||
Revenue before reimbursements (net | $ 615,837 | $ 125,983 | $ 80,562 | $ — | $ — | $ 822,382 | |||||
Operating income (loss)1 | 138,623 | (28,580) | (13,207) | (17,002) | (48,661) | 31,173 | |||||
Adjustments | |||||||||||
Depreciation | 3,493 | 423 | 506 | 2,592 | 466 | 7,480 | |||||
Intangible amortization | 54 | 4,928 | 1,188 | — | — | 6,170 | |||||
Earnout accretion | — | 1,251 | 162 | — | — | 1,413 | |||||
Earnout fair value adjustments | — | 1,125 | 86 | — | — | 1,211 | |||||
Acquisition contingent compensation | (126) | 5,019 | 3,327 | — | — | 8,220 | |||||
Deferred compensation plan | 6,028 | — | 124 | 98 | 14 | 6,264 | |||||
Impairment charges | 1,463 | 14,761 | — | — | — | 16,224 | |||||
Restructuring charges | 2,310 | 286 | 3,367 | — | 976 | 6,939 | |||||
Total adjustments | 13,222 | 27,793 | 8,760 | 2,690 | 1,456 | 53,921 | |||||
Adjusted EBITDA | $ 151,845 | $ (787) | $ (4,447) | $ (14,312) | $ (47,205) | $ 85,094 | |||||
Adjusted EBITDA margin | 24.7 % | (0.6 %) | (5.5 %) | (1.7 %) | (5.7) % | 10.3 % | |||||
Nine Months Ended September 30, 2023 | |||||||||||
Executive | On-Demand | Heidrick | Research & | Global | Total | ||||||
Revenue before reimbursements (net | $ 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 | |||||||||||
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 | 11,022 | 12,481 | 11,029 | 1,350 | 485 | 36,367 | |||||
Adjusted EBITDA | $ 151,945 | $ 660 | $ (6,848) | $ (15,396) | $ (40,501) | $ 89,860 | |||||
Adjusted EBITDA margin | 25.5 % | 0.6 % | (10.3 %) | (2.0 %) | (5.2 %) | 11.6 % |
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 |
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SOURCE Heidrick & Struggles
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