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CTPartners Executive Search Inc. Announces Second Quarter 2011 Financial Results

CTPartners Executive Search Inc. Announces Second Quarter 2011 Financial Results

CTPartners Executive Search Inc, the leading global retained executive search firm, has announced its results for the quarter ended June 30, 2011.

Second Quarter 2011 Results

For the quarter ended June 30, 2011, net revenue of $33.1 million increased 11.0% from $29.8 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: 

Q2 2011

Q2 2010

Revenue

% of Net Revenue

Revenue

% of Net Revenue

North America

$22,019,433

66.6%

$16,902,510

56.7%

EMEA

$8,378,656

25.3%

$9,421,878

31.6%

AsiaPacific

$2,686,580

8.1%

$3,480,605

11.7%

Revenue breakdown by industry vertical:

Q2 2011

Q2 2010

Revenue

% of Net Revenue

Revenue

% of Net Revenue

Financial Services

$12,346,523

37.3%

$13,456,945

45.1%

TMT

$4,782,053

14.4%

$4,787,183

16.1%

Life Sciences

$6,073,531

18.4%

$3,591,913

12.1%

Professional Services

$5,629,088

17.0%

$4,721,652

15.8%

Consumer/Industrial

$4,253,474

12.9%

$3,247,300

10.9%

There were 287 confirmed searches in the second quarter of 2011, a 2.9% increase compared to the second quarter of 2010. Productivity, defined as average annualized net revenue per executive search consultant, was $1,336,750 in the second quarter 2011 compared to $1,528,460 in the second quarter of 2010. The average revenue per executive search was $111,950 in the second quarter of 2011 compared to $100,520 in the corresponding period in 2010, up 11.4%.

For the three-month period ended June 30, 2011, compensation and employee benefits expense increased $3.9 million, or 18.0%, to $25.5 million from $21.6 million for the same period last year. As a percentage of net revenue, compensation and benefits increased to 77.2% compared to 72.7% last year. The increase in compensation and benefits expense was primarily the result of (i) approximately $1.7 million in connection with guaranteed compensation, signing bonuses and equity based grants made to newly hired executive search consultants (ii) $1.3 million in additional non-consultant compensation costs primarily related to the addition of 48 support staff in recruiting, research and administration and (iii) a $900,000 increase in bonus compensation for executive search consultants which was the direct result of higher consolidated net revenues for the quarter compared to the same period last year.

General and administrative expenses increased to $6.5 million, or 19.7% of net revenue, from $5.5 million, or 18.4% of net revenue, for the same period last year. The increase was mainly due to (i) a $400,000 increase in occupancy costs due to the addition of new offices in Dallas, Dubai and Toronto and expanded offices in Singapore, Paris and Chicago (ii) a $300,000 increase in business development expense, which is a direct result of an increase in the number of executive search consultants and (iii) an additional $100,000 in professional fees principally reflecting the costs of being a public company.

Operating income for the second quarter was $1.1 million, a decrease of $1.4 million compared to operating income of $2.5 million for the second quarter of 2010. The decrease primarily reflects an increase in net revenues of $3.3 million offset by a $3.9 million increase in compensation and benefits expense and a $1.0 million increase in general and administrative expenses.

For the three-month period ended June 30, 2011, CTPartners reported income before taxes of $1.1 million and recorded income tax expense of $400,000, as compared to income before taxes of $2.5 million and income tax expense of $100,000 for the same period last year.

Net income for the quarter ended June 30, 2011 was $700,000.

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