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CTPartners Executive Search Inc. Announces Second Quarter 2013 Financial Results

CTPartners Executive Search Inc. Announces Second Quarter 2013 Financial Results

Net Revenue Increased to $34.2 Million

Reported Net Loss Per Share of $0.05 Adjusted Net Income Per Share of $0.08

Third Quarter 2013 Net Revenue Guidance Between $32.5 million to $34.5 million Adjusted Earnings Per Share in the Range of $0.07 to $0.09

CTPartners Executive Search Inc. has announced its financial results for the second quarter and six months ended June 30, 2013.

“Our strong second quarter financial results reflect a combination of execution by our experienced consultants and improved market conditions. Revenue growth was higher than our original expectation, and came in at 1% year over year and 17% sequentially with all six practices showing improvement over the first quarter of 2013. Augmentum, acquired in May, performed as expected in the quarter and has already made a significant contribution to our business development activities. We improved the leverage in our business model and delivered better than expected adjusted earnings per share of $.08 cents, an increase over last year’s second quarter, and a significant improvement over this year’s first quarter result,” said Brian Sullivan, Chief Executive Officer.

SECOND QUARTER RESULTS

Net revenue for the second quarter increased to a record high $34.2 million compared with $33.8 million in the prior year’s second quarter. North American revenue increased 1.7% to $21.7 million EMEA was up 24.5% at $8.3 million, including a $0.9 million contribution from Augmentum Consulting Ltd and Latin America was relatively flat at $3.0 million. Asia Pacific revenue was $1.2 million compared to $2.6 million in the prior year quarter. On a practice basis, year-over-year, Professional Services increased 39.1% to $5.8 million, Industrial grew 28.4% to $3.7 million, Life Sciences improved 24.9% to $6.8 million and Technology Media & Telecom rose 19.1% to $4.5 million. Financial Services and Consumer/Retail declined 27.6% and 15.1%, respectively, due to tougher comparables.

Compensation expense, excluding reorganization costs, increased $0.5 million to $25.9 million compared to the second quarter of 2012. This represented 75.7% of revenue, one of the lowest levels in CTPartners history. General and Administrative expenses, excluding non-operating expenses, remained flat year over year at $7.2 million or approximately 20.9% of revenue.

GAAP net loss attributable to the Company for the second quarter was $0.4 million, or $0.05 per share, compared to a net loss of $0.3 million, or $0.05 per share for last year’s second quarter. Excluding after-tax non-operating charges of $1.0 million, adjusted net income was $0.6 million, or $0.08 per share compared to adjusted net income of $0.5 million, or $0.07 per share in the prior year’s second quarter. A reconciliation of non-GAAP measures is included in this news release.

PERFORMANCE METRICS

The Company was engaged in 364 new search assignments compared to 350 in the year-ago quarter, and up sequentially from 348 in the 2013 first quarter.

The number of placements was 272, a 77% placement rate flat with 272, or a 75% placement rate in last year’s comparable quarter and 231 placements, or a 78% placement rate in the 2013 first quarter.

CTPartners had 121 consultants compared with 109 consultants in the year-ago quarter and up sequentially from 107 consultants, reflecting the Augmentum Consulting Ltd acquisition.

The Company’s voluntary turnover was one consultant, maintaining one of the lowest turnovers in the executive search industry.

Net revenue per consultant was $1.2 million, flat with the year-ago second quarter and up 9%, or $0.1 million, from the 2013 first quarter.

Average revenue per search increased to $103,100, an increase of 9% compared to $94,400 in last year’s second quarter and a 14% increase compared to $90,300 in the 2013 first quarter.

The number of clients representing repeat business was 72% in the quarter compared with 76% in both last year’s second quarter and 2013 first quarter.

Six-Month Financial Results

For the six months ended June 30, 2013, net revenue totaled $63.4 million compared to net revenue $66.2 million reported for the six months ended June 30, 2012. GAAP net loss attributable to the Company for the six months ended June 30, 2013 was $2.4 million, or $0.34 per share compared to a net loss of $0.9 million, or $0.12 per share for the six months ended June 30, 2012. Excluding after-tax non-operating charges of $2.7 million, adjusted net income was $0.3 million, or $0.04 per share compared to adjusted net income of $0.9 million, or $0.13 per share in the prior year’s six month period. A reconciliation of non-GAAP measures is included in this news release.

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