Connecting to LinkedIn...

Blank

Heidrick & Struggles Reports 2012 First Quarter Financial Results

Heidrick & Struggles Reports 2012 First Quarter Financial Results

Heidrick & Struggles International, Inc. the leadership advisory firm providing executive search and leadership consulting services worldwide, has announced financial results for its first quarter ended March 31, 2012.
           
2012 First Quarter Year-over-Year Highlights

  --  Operating income improved to $3.2 million, from a loss of $4.1 million

   in the prior year quarter, and operating margin improved to 3.0 percent

  --  The company realized the expected benefits of its restructuring and other initiatives taken to manage the cost structure and improve profitability in a difficult economic environment

  --  Salaries and employee benefits expense decreased $11.7 million or 13.2 percent

  --  General and administrative expenses declined by $5.0 million or 15.8 percent

  --  As part of the company's successful develop-from-within strategy, 16 Associate Principals were promoted to Principal Consultants effective April 1

"We demonstrated considerable progress in managing expenses, which resulted in improvements in operating income and operating margin in a very tough revenue climate," said Chief Executive Officer L. Kevin Kelly. "Net revenue reflected weak confirmation trends in the 2011 fourth quarter, which continued to some extent into the first quarter. And given the mixed headlines from financial services companies globally, it wasn't surprising that this practice showed the largest decline in revenue, with Asia Pacific impacted most on a percentage basis. Despite uneven market conditions, we remain focused on helping our clients navigate their talent needs through our integrated approach to Executive Search and Leadership Consulting."

Consolidated net revenue was $106.5 million in the first quarter, down 7.9 percent from $115.6 million in the 2011 first quarter. Exchange rate fluctuations had less than one percent impact on consolidated net revenue. Year over year, net revenue declined 7.3 percent in the Americas, 1.8 percent in Europe (but increased approximately 3 percent on a constant currency basis), and 16.2 percent in Asia Pacific (approximately 19 percent on a constant currency basis). Declines in the Financial Services, Global Technology & Services, and Industrial practices offset revenue growth in the Life Sciences and Education & Social Enterprise practices. Net revenue from Leadership Consulting Services was $10.0 million, an increase of 18.0 percent from the 2011 first quarter, and represented 9.3 percent of total net revenue.

The number of executive search and leadership consulting consultants at March 31, 2012 was 343, compared to 372 at March 31, 2011, and 347 at December 31, 2011. The year-over-year comparison primarily reflects a global workforce reduction in the 2011 fourth quarter. The number of executive search confirmations in the quarter declined 9.1 percent compared to the 2011 first quarter, but increased 7.0 percent compared to the 2011 fourth quarter. Productivity, as measured by annualized net revenue per consultant, was $1.2 million, compared to $1.3 million in the 2011 first quarter and $1.4 million in the 2011 fourth quarter. Average revenue per executive search was $100,300 compared to $101,200 in the 2011 first quarter and $128,300 in the 2011 fourth quarter.

Salaries and employee benefits decreased 13.2 percent, or $11.7 million, to $76.7 million from $88.4 million in the 2011 first quarter. Variable compensation expense decreased $6.3 million, primarily reflecting lower bonus accruals in the quarter related to lower net revenue. Fixed compensation expense decreased $5.4 million, mostly reflecting a reduction in worldwide headcount of approximately 6 percent compared to the 2011 first quarter. Salaries and employee benefits were 72.0 percent of net revenue for the quarter, compared to 76.4 percent in the 2011 first quarter.

General and administrative expenses decreased 15.8 percent to $26.4 million, from $31.3 million in the 2011 first quarter, as a result of a number of expense reductions, the largest being lower fees for professional services. As a percentage of net revenue, consolidated general and administrative expenses were 24.7 percent, compared to 27.1 percent in the 2011 first quarter.

Operating income was $3.2 million and operating margin was 3.0 percent. The improvement, compared to an operating loss of $4.1 million in the 2011 first quarter, reflects the decrease in salaries and employee benefits and general and administrative expenses, partially offset by the decline in net revenue.

Net income was $0.7 million and diluted earnings per share were $0.04. The effective tax rate in the quarter of 84.9 percent included losses not benefitted for tax purposes and current period tax expense, but is based on a full year projected tax rate of approximately 47 percent. In the 2011 first quarter, the net loss was $4.7 million and the net loss per share was $0.26, based upon an effective tax benefit rate in the quarter of 21.1 percent.

Net cash used in operating activities in the quarter was $99.1 million, compared to $79.3 million in the 2011 first quarter. Following the payment of bonuses related to 2011 performance, cash and cash equivalents at March 31, 2012 were $82.6 million, compared to $185.4 million at December 31, 2011, and $92.2 million at March 31, 2011.

 

 

 

Tags:

Articles similar to

Articles similar to