CTPartners Executive Search announces record Q1 2014 results
“We are pleased to report that the strong momentum established in last year’s second half accelerated in the first quarter of 2014. We successfully executed the strategic plan implemented last year, including key hires, acquisitions and cost cutting initiatives leading to strong increases in new search assignments, productivity and revenue per search, all core metrics of our business. This enabled us to achieve record revenue of almost $40 million and $0.21 cents of adjusted earnings per share, nearly matching the level reported for all of 2013,” said Brian Sullivan, Chief Executive Officer. “As we enter the traditionally strong second quarter and progress through the year we anticipate our investments in adding high quality talent and acquisitions across the globe in growing practice areas, such as industrial, energy and professional services will further contribute to the increased financial results we expect in 2014 and beyond,” concluded Mr. Sullivan.
First Quarter 2014 Results
Net revenue for the first quarter was $39.9 million, a record high for the Company, and represented a 36.6% increase compared to $29.2 million in the prior year’s first quarter. Compared to last year’s first quarter, North America revenue increased 35.8% to $23.7 million EMEA was up 58.4% at $10.6 million compared to $6.7 million and Asia Pacific revenue grew 42.8% to $2.5 million compared to $1.7 million. Latin America revenue of $3.2 million was relatively flat compared to the prior year first quarter. On a practice basis, year-over-year, Financial Services improved 78.0% to $12.2 million, Professional Services increased 72.7% to $8.5 million and Industrial grew 33.7% to $4.8 million. Technology Media & Telecom grew 32.1% to $4.5 as Life Sciences increased 6.1% to$6.1 million. Consumer/Retail revenue was $3.8 million compared with$4.7 million in the 2013 first quarter.
Compensation expense, excluding non-operating expenses, was $29.3 million, or 73.5% of revenue, compared to $22.2 million, or 76.0% of revenue, in the first quarter of 2013. General and administrative expenses, excluding non-operating expenses, were $7.8 million, or 19.7% of revenue compared with 25.3% in the first quarter of 2013.
GAAP net income attributable to the Company for the first quarter was $1.2 million, or $0.15 per share, compared to a net loss of $2.0 million, or $0.29 per share loss, for last year’s first quarter. Excluding after-tax non-operating items of $0.04 million and $1.6 million for 2014 and 2013, respectively, adjusted net income was $1.6 million, or $0.21 per share, compared to an adjusted net loss of $0.4 million, or $0.05 per share, in the prior year’s first quarter. A reconciliation of non-GAAP measures is included in this news release.
Adjusted operating income was $2.6 million in the first quarter compared to an adjusted operating loss of $0.4 million in the year-ago first quarter. Adjusted operating margin was 6.6% in the first quarter compared to negative 1.5% in the 2013 first quarter. Adjusted EBITDA was $3.2 million in the 2014 first quarter compared to a loss of $0.02 million in the year-ago first quarter. Adjusted EBITDA margin was 8.0% and negative 0.1% in the 2014 and 2013 first quarters, respectively.
Performance Metrics - First Quarter 2014
• The Company was engaged in 441 new search assignments, a 27% increase compared to 348 in the year-ago quarter.
• The number of placements was 279 compared with 231 in last year’s comparable quarter. The placement rate for this year’s first quarter was 83%.
• CTPartners had 136 consultants in the first quarter compared with 107 consultants in 2013. The net revenue per consultant was $1.2 million.
• Average revenue per search was up 13% at $102,200 compared to $90,300in the year-ago quarter.
• The Company’s voluntary turnover was three consultants in the first quarter of 2014, allowing CTPartners to maintain one of the lowest turnover rate in the executive search industry.
• The number of clients representing repeat business was 71% in the first quarter compared with 72% in last year’s first quarter and 79% in the 2013 fourth quarter.
For the second quarter ending June 30, 2014, the Company expects to report net revenue in the range of $42 million to $45 million and adjusted EPS between $0.24 to $0.30, excluding non-operating items.