CTPartners Executive Search Inc. Announces First Quarter 2011 Financial Results

CTPartners Executive Search Inc. Announces First Quarter 2011 Financial Results

Quarterly net revenue increased by 18.3%

CTPartners Executive Search Inc. the leading global retained executive search firm, has announced results for the quarter ended March 31, 2011.

First Quarter 2011 Results

For the quarter ended March 31, 2011, net revenue of $30.5 million increased 18.3% from $25.8 million in the corresponding period in 2010. The net revenue growth was the result of an increase in the number of search assignments and the number of executive search consultants employed.

Revenue breakdown by region:

Revenue breakdown by industry vertical:

There were 300 confirmed searches in the first quarter of 2011, a 17.2% increase compared to the first quarter of 2010. Productivity, defined as average annualized net revenue per executive search consultant, was in line with the prior year. The average fee per search was $89,540 in the first quarter of 2011 compared to $104,020 in the corresponding period in 2010.

Performance metrics:

Compensation and employee benefits expense increased $5.7 million, or 32.5%, to $23.3 million for the first quarter ended March 31, 2011 from $17.6 million for the quarter ended March 31, 2010. As a percentage of net revenue, first quarter 2011 compensation and benefits increased to 76.6% compared to 68.4% for the same period in 2010. The increase in compensation and benefits expense was primarily the result of a $2.2 million increase in salaries related to the hiring of 18 new consultants and 62 new support staff since the first quarter of last year, a $1.3 million increase in incentive compensation for executive search consultants which was the direct result of higher consolidated net revenue and a $0.6 million increase in sign-on incentives related to the hiring of new consultants.

General and administrative expenses increased approximately $1.0 million, or 18.2%, to $6.1 million for the quarter ended March 31, 2011 from $5.1 million for the same period in 2010. The increase was partially due to a $350,000 increase in business development expense which is a direct result of an increase in the number of consultants, a $250,000 increase in professional fees which included accounting, audit and tax preparation services and an $180,000 increase in travel expenses related to growth opportunities and aggressive recruiting efforts. General and administrative expenses as a percentage of net revenue remained at 19.9% for the quarters ended March 31, 2011 and March 31, 2010, respectively.

Operating income decreased $2.0 million to $1.0 million for the quarter ended March 31, 2011, compared to operating income of $3.0 million for the same period in 2010. The decrease primarily reflects an increase in net revenues of $4.7 million offset by a $5.7 million increase in compensation and benefits expense, and a $1.0 million increase in general and administrative expenses.

For the three-month period ended March 31, 2011, income before taxes was $0.9 million and the recorded income tax expense was $0.3 million, as compared to income before taxes of $3.0 million and income tax expense of $0.1 million for the three-month period ended March 31, 2010. The increase in income tax expense was primarily due to a $0.6 million increase in the current tax provision offset by a $0.4 million deferred tax benefit.

Net income for the quarter ended March 31, 2011 was $0.6 million.