Q4 net revenue up almost 20% for Heidrick & Struggles
Heidrick & Struggles International, Inc. has announced financial results for its fourth quarter and fiscal year ended 31st December 2015.
Consolidated net revenue (revenue before reimbursements) increased 19.2%, or $23.2m, to $144.5m from $121.3m in the 2014 fourth quarter. Excluding the impact of exchange rate fluctuations which negatively impacted results by $5.1m, or 4.2%, consolidated net revenue increased $28.4m or 23.4%.
Adjusted EBITDA in the 2015 fourth quarter increased 19.0%, or $1.9m, to $11.4m compared to $9.5m in the 2014 fourth quarter. The adjusted EBITDA margin (adjusted EBITDA as a percentage of net revenue) in the 2015 fourth quarter was 7.9%, the same as in the 2014 fourth quarter.
Operating income in the 2015 fourth quarter increased 38.9% year-over-year, or $1.5m, to $5.3m, and operating margin (operating income as a percentage of net revenue) was 3.7%. This compares to operating income of $3.8m and operating margin of 3.1% in the 2014 fourth quarter. The year-over-year improvements in adjusted EBITDA and operating income reflect higher net revenue, partially offset by the increases in salaries and employee benefits and general and administrative expenses.
Net income in the 2015 fourth quarter increased to $1.3m and diluted earnings per share were $0.07, based on an effective tax rate of 73.6% in the quarter. In the 2014 fourth quarter, the company reported net income of $0.8 million and diluted earnings per share of $0.04 based on an effective tax rate of 62.2% in the quarter.
Net cash provided by operating activities in the 2015 fourth quarter was $77.6m, compared to $58.8m in the 2014 fourth quarter. Cash and cash equivalents at 31st December 2015 were $190.5m compared to $211.4m at 31st December 2014 ($181.9m net of debt). On 30th September 2015, the company repaid in full the outstanding debt of $26.5m on its revolving credit facility.
For the fiscal year ended 31st December 2015 consolidated net revenue of $531.1m increased 7.5%, or $36.8m, from $494.3m in 2014. Excluding the impact of exchange rate fluctuations which negatively impacted results by $24.2m, or 4.9%, consolidated net revenue increased $61.0m or 12.3%.
Adjusted EBITDA in 2015 improved to $55.8m and adjusted EBITDA margin was 10.5%, compared to adjusted EBITDA of $48.9m and adjusted EBITDA margin of 9.9% in 2014. Operating income in 2015 improved to $34.1m and operating margin was 6.4% compared to operating income of $26.7m and operating margin of 5.4% in 2014.
Net income in 2015 was $17.1m and diluted earnings per share were $0.92 reflecting an effective tax rate of 45.7%. Net income in 2014 was $6.8m and diluted earnings per share were $0.37, reflecting an effective tax rate of 71.9%.
Tracy Wolstencroft, Heidrick & Struggles' president and chief executive officer, commented, "Our fourth quarter and 2015 results reflect a second year of year-over-year growth in net revenue, profitability, and consultant headcount.
"The results show continued progress on our four priorities –our talent, clients, diversified solutions and internal operations. In 2015, Heidrick & Struggles attracted and retained exceptional consultant talent across our global platform, delivered valuable leadership expertise and service to our clients, improved revenue growth and profitability, and increased shareholder value."