CTPartners Executive Search announces record Q2 results
- Net Revenue Grew 32% to $45.1 Million Year over Year and 16% Sequentially
- Earnings Per Share of $0.27 Adjusted Earnings Per Share Increases to $0.30 Compared to $0.08 in Last Year’s Second Quarter
- Search Assignments Increased 28% Year over Year
- Third Quarter 2014 Guidance of Net Revenue of $41.0 Million to $43.0 Million and Adjusted EPS in the Range of$0.20 to $0.22
CTPartners Executive Search Inc. a global retained executive search firm, today announced its financial results for the second quarter and first six months ended onJune 30, 2014.
“Our second quarter revenue growth of 32% marks the fifth consecutive quarter of year over year revenue increases and establishes yet another record performance for CTPartners. Our success spanned across our entire organization as we experienced growth in all of our practice areas and geographic markets. This strong top line performance combined with solid expense control allowed us to deliver adjusted earnings of $0.30 cents per share, at the high end of our guidance, demonstrating the operating leverage in our business model,” said Brian Sullivan, Chief Executive Officer. “The increased productivity of our seasoned consultants and initial contributions of our more recent hires and acquisitions support our confidence that our strong financial performance will continue. We will continue to invest in building the CTPartners brand globally and seek out quality consultants in our existing practices to build shareholder value over the long term,” concluded Mr. Sullivan.
Second Quarter 2014 Results
Net revenue for the second quarter was $45.1 million, a record high for the Company, and represented a 32% increase compared to $34.2 million in the prior year’s second quarter. Compared to last year’s second quarter,North America revenue increased 27% to $27.6 million compared to $21.7 million in the prior year second quarter EMEA was up 20% at $10.0 million compared to $8.3 million Asia Pacific revenue grew 133% to $2.8 millioncompared to $1.2 million and Latin America with revenue of $4.8 million grew 61% compared to $3.0 million. On a practice basis, year-over-year, Financial Services improved 62% to $13.1 million Professional Services increased 35% to $7.8 million Industrial grew 21% to $4.5 million Technology Media & Telecom grew 33% to $6.0 million Life Sciences increased 15% to $7.8 million and Consumer/Retail revenue grew 10% to $5.9 million.
Compensation expense, excluding non-operating expenses, was $32.7 million, or 72.5% of revenue, compared to$25.9 million, or 75.7% of revenue, in the second quarter of 2013. General and administrative expenses, excluding non-operating expenses, were $8.4 million, or 18.7% of revenue compared with 7.2%, or 20.9% of revenue, in the second quarter of 2013.
GAAP net income attributable to the Company for the second quarter was $2.1 million, or $0.27 per share, compared to a net loss of $0.4 million, or $0.05 per share loss, for last year’s second quarter. Excluding after-tax non-operating items of $0.1 million and $0.9 million for 2014 and 2013, respectively, adjusted net income was $2.3 million, or $0.30 per share, compared to an adjusted net income of $0.6 million, or $0.08 per share, in the prior year’s second quarter. A reconciliation of non-GAAP measures is included in this news release.
Adjusted operating income was $3.8 million in the second quarter compared to an adjusted operating income of$1.0 million in the year-ago second quarter. Adjusted operating margin was 8.5% in the second quarter compared to 3.1% in the 2013 second quarter. Adjusted EBITDA was $4.4 million in the 2014 second quarter compared to $1.5 million in the year-ago second quarter. Adjusted EBITDA margin was 9.8% and 4.3% in the 2014 and 2013 second quarters, respectively.
Performance Metrics - Second Quarter 2014
• The Company was engaged in a record 465 new search assignments, a 28% increase compared to 364 in the year-ago quarter.
• The number of placements was 348 compared with 272 in last year’s comparable quarter. The placement rate for this year’s second quarter was 88%, a record quarterly performance.
• CTPartners had 136 consultants at June 30, 2014, the end of the second quarter compared with 121 consultants at the end of last year’s comparable quarter. The net revenue per consultant was $1.3 million. As of July 30, 2014 the Company has 145 consultants.
• Average revenue per search increased 4% to $106,800 compared to $103,100 in the year-ago quarter.
• The Company’s voluntary turnover was 1 consultant, or less than one percent, in the second 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 74% in the second quarter compared with 71% in both last year’s second quarter and 2013 first quarter.
Six-Month Financial Results
For the six months ended June 30, 2014, net revenue totalled $85.0 million compared to net revenue $63.4 reported for the six months ended June, 30, 2013. GAAP net income attributable to the Company for the six months endedJune 30, 2014 was $3.3 million, or $0.43 per share compared to net loss of $2.4 million or $0.34 per share for the six months ended June 30, 2013. Excluding after-tax non-operating charges of $0.6 million, adjusted net income was$3.9 million, or $0.51 per share compared to adjusted net income of $0.3 million, or $0.04 per share in the prior year’s six month period. Adjusted EBITDA was $7.6 million for the six months ended June 30, 2014 compared to $1.5 million in the year-ago six month period. A reconciliation of non-GAAP measures is included in this news release.