2023 Annual Net Revenue Exceeds
$1 Billion for Third Consecutive
Year
Record Annual Net Revenue for On-Demand
Talent and Heidrick Consulting
CHICAGO, Feb. 26,
2024 /PRNewswire/ -- Today Heidrick & Struggles
International, Inc. (Nasdaq: HSII) ("Heidrick & Struggles",
"Heidrick" or the "Company") announced financial results for its
fourth quarter and year ended December 31,
2023.
Fourth Quarter Highlights:
- Net revenue of $253.2 million
increased 7% year over year
- Adjusted EBITDA of $35.8 million
increased 38% year over year
- Adjusted EBITDA margin was 14.1%, 310 bps improvement year over
year
- Net income was $14.9 million and
diluted earnings per share was $0.72
FY 2023 Highlights:
- Net revenue of $1,026.9 million
decreased 4% year over year
- Adjusted EBITDA of $125.6 million
increased 4% year over year
- Adjusted EBITDA margin was 12.2%, 90 bps improvement year over
year
- Adjusted net income was $60.5
million and adjusted diluted earnings per share was
$2.91
"We are very pleased with how we finished the year and what is
reflected by our fourth quarter results, having delivered solid
year over year growth in both revenue and adjusted EBITDA," stated
Heidrick & Struggles' President and Chief Executive Officer,
Krishnan Rajagopalan. "These results
cap off an impressive year in which we made meaningful strides on
our strategic goals of growing and diversifying our revenue. Our
Diversified Solutions of On-Demand Talent, Heidrick Consulting, and
our nascent Heidrick Digital grew 44% during 2023, and exited the
year representing 27% of our fourth quarter revenue. Additionally,
our full year consolidated adjusted EBITDA margins were 12%, and
our free cash flow allowed us to invest in two key businesses. We
also continued to invest in Heidrick Digital, which not only
yielded our first customers for the Heidrick Navigator SaaS
product, but also advanced our enterprise platform by digitally
enabling our businesses."
Rajagopalan continued, "As a world-class leadership advisory
firm, we believe we are well positioned to take advantage of
improving market conditions to grow both revenue and profitability
in 2024. We will continue to partner with our clients to provide
them with the most comprehensive suite of services to help find
them the world's best leaders, create diverse and inclusive
cultures, and transform their teams to achieve the highest levels
of profitability and performance."
2023 Fourth Quarter Results
Consolidated net revenue was $253.2
million in the 2023 fourth quarter compared to consolidated
net revenue of $235.7 million in the
2022 fourth quarter. The Company experienced growth in On-Demand
Talent and Heidrick Consulting, partially offset by declines in
Executive Search in Asia Pacific
and the Americas.
Adjusted EBITDA was $35.8 million
in the 2023 fourth quarter compared to $25.9
million in the 2022 fourth quarter, and 2023 fourth quarter
adjusted EBITDA margin was 14.1% compared to 11.0% in the 2022
fourth quarter.
2023 fourth quarter net income was $14.9
million compared to $16.0
million in the 2022 fourth quarter. This generated diluted
earnings per share in the 2023 fourth quarter of $0.72, compared to $0.78 in the 2022 fourth quarter.
Executive Search net revenue was $184.0 million compared to net revenue of
$192.7 million in the 2022 fourth
quarter. However, executive search confirmations increased by 4.0%
in the fourth quarter of 2023 when compared to the same period last
year. Net revenue decreased 5.6%, or $10.7
million on a constant currency basis from the 2022 fourth
quarter. Net revenue decreased 4.4% in the Americas (down 4.7% on a
constant currency basis), was flat in Europe (down 4.9% on a constant currency
basis), and decreased 11.8% in Asia
Pacific (down 11.2% on a constant currency basis) when
compared to the prior year fourth quarter.
The Company had 414 Executive Search consultants at December 31, 2023, compared to 390 at
December 31, 2022. Productivity, as
measured by annualized Executive Search net revenue per consultant,
was $1.8 million compared to
$2.0 million in the 2022 fourth
quarter, reflecting a higher number of consultants combined with
lower revenue. Average revenue per executive search was
approximately $138,000 compared to
$150,000 in the prior year
period.
On-Demand Talent net revenue was $41.1 million, an increase of 83.7% compared to
net revenue of $22.4 million in the
2022 fourth quarter, primarily due to the acquisition of Atreus
Group GmbH ("Atreus").
Heidrick Consulting net revenue was $28.1 million compared to net revenue of
$20.7 million in the 2022 fourth
quarter due to organic growth coupled with the acquisition of
businessfourzero. The Company had 89 Heidrick Consulting
consultants at December 31, 2023,
compared to 70 at December 31,
2022.
Consolidated salaries and benefits decreased $5.8 million, or 3.7%, to $151.0 million compared to $156.8 million in the 2022 fourth quarter.
Year-over-year, fixed compensation expense increased $7.5 million due to increases in base salaries
and payroll taxes, expenses related to the deferred compensation
plan, talent acquisition and retention costs, and retirement and
benefits, partially offset by decreases in stock compensation and
separation costs. Variable compensation decreased $13.3 million due to lower bonus accruals related
to decreased consultant productivity. Salaries and benefits expense
was 59.7% of net revenue for the quarter compared to 66.5% in the
2022 fourth quarter.
General and administrative expenses increased $8.6 million, or 24.2%, to $44.1 million compared to $35.5 million in the 2022 fourth quarter. The
increase was due to intangible amortization and accretion, bad
debt, office occupancy, taxes and licenses, IT, marketing, and
business development travel, partially offset by a decrease in
professional fees. As a percentage of net revenue, general and
administrative expenses were 17.4% for the 2023 fourth quarter
compared to 15.1% in the 2022 fourth quarter.
The Company's cost of services was $30.2
million, or 11.9% of net revenue for the quarter, compared
to $17.5 million, or 7.4% of net
revenue in the 2022 fourth quarter. This increase is related to an
increase in the volume of projects driven by the acquisitions of
Atreus and businessfourzero.
The Company's research and development expenses were
$6.0 million, or 2.4% of net revenue
for the quarter compared to $6.1
million, or 2.6%, of net revenue for the fourth quarter
2022.
Adjusted EBITDA was $35.8 million
compared to $25.9 million in the 2022
fourth quarter. Adjusted EBITDA margin was 14.1%, compared to 11.0%
in the 2022 fourth quarter. In Executive Search, adjusted EBITDA
was $54.7 million compared to
$53.9 million in the prior year
period. In On-Demand Talent, adjusted EBITDA was $0.8 million versus a loss of $1.4 million in the prior year period. In
Heidrick Consulting, adjusted EBITDA was $1.0 million compared to a loss of $2.4 million in the prior year period.
Net income was $14.9 million and
diluted earnings per share was $0.72,
with an effective tax rate of 40.5%. This compares to net income of
$16.0 million and diluted earnings
per share of $0.78, with an effective
tax rate of 29.9% in the 2022 fourth quarter.
Net cash provided by operating activities was $155.9 million, compared to $160.3 million in the 2022 fourth quarter. Cash,
cash equivalents and marketable securities at December 31, 2023 was $478.2 million compared to $621.6 million at December
31, 2022, the decrease was due to earnout payments in 2023
related to the acquisition of Business Talent Group in 2021, as
well as the acquisitions of Atreus and businessfourzero. The
Company's cash position typically builds throughout the year as
employee bonuses are accrued, mostly to be paid out in the first
half of the following year.
Fiscal 2023 Results
Consolidated net revenue decreased 4.3%, or $46.6 million, to $1,026.9
million compared to $1,073.5
million in 2022 (down 4.6%, or $49.5
million on a constant currency basis).
Executive Search net revenue decreased 13.5%, or
$121.9 million, to $780.0 million from $901.9
million in 2022 (down 13.5%, or $121.6 million on a constant currency basis). In
2023, net revenue decreased 14.7% in the Americas, decreased 5.6%
in Europe, and decreased 19.6% in
Asia Pacific. All industry
practices exhibited decline over the prior year with the exception
of the Social Impact and Industrial practice groups. Productivity
was $1.9 million, compared to
$2.3 million in 2022. The average
revenue per executive search was approximately $139,000 compared to $144,000 in 2022, while confirmations decreased
10.5%.
On-Demand Talent increased 66.9% to a record net revenue of
$152.5 million compared to
$91.3 million in 2022 (up 64.1% on a
constant currency basis). The increase in net revenue was primarily
due to the acquisition of Atreus.
Heidrick Consulting net revenue increased 17.6%, to a
record $94.3 million from
$80.2 million in 2022 (up 16.9% on a
constant currency basis). The increase in net revenue was primarily
due to the acquisition of businessfourzero.
Adjusted EBITDA was $125.6 million
and adjusted EBITDA margin was 12.2%, compared to adjusted EBITDA
of $120.9 million and adjusted EBITDA
margin of 11.3% in 2022. In Executive Search, Adjusted EBITDA was
$206.7 million compared to
$206.2 million in the prior year. In
On-Demand Talent, Adjusted EBITDA was $1.4
million versus a loss of $0.3
million in the prior year. In Heidrick Consulting, Adjusted
EBITDA was a loss of $5.8 million
compared to a loss of $6.4 million in
the prior year.
Net income was $54.4 million and
diluted earnings per share was $2.62,
with an effective tax rate of 38.6%. This compares to net income of
$79.5 million and diluted earnings
per share of $3.86 with an effective
tax rate of 31.0% in 2022. Excluding the goodwill impairment
charges in 2023, adjusted net income was $60.4 million compared to $79.2 million in 2022 and adjusted diluted
earnings per share was $2.91 compared
to $3.84 in 2022, with adjusted
effective tax rates of 37.0% and 31.0%, respectively, for the 2023
and 2022 periods.
Dividend
The Board of Directors declared a 2024 first quarter cash
dividend of $0.15 per share payable
on March 21, 2024, to shareholders of
record at the close of business on March
8, 2024.
2024 First Quarter Outlook
The Company expects 2024 first quarter consolidated net revenue
of between $245 million and
$265 million, which may be impacted
by external factors, such as the foreign exchange and interest rate
environments, foreign conflicts, inflation and macroeconomic
constraints on pricing actions. In addition, this outlook is based
on the average currency rates in December
2023 and reflects, among other factors, management's
assumptions for the anticipated volume of new Executive Search
confirmations, On-Demand Talent projects, and Heidrick Consulting
assignments, consultant productivity, and consultant retention
along with the current backlog.
Quarterly Webcast and Conference Call
Heidrick & Struggles will host a conference call to review
its fourth quarter results today, February
26, 2024 at 5:00 pm Eastern
Time. Participants may access the Company's call and
supporting slides through its website at www.heidrick.com or by
dialing (888) 440-4091 or (646) 960-0846, conference ID# 6106012.
For those unable to participate on the live call, a webcast and
copy of the slides will be archived at www.heidrick.com and
available for up to 30 days following the investor call.
About Heidrick & Struggles International, Inc.
Heidrick & Struggles (Nasdaq: HSII) is a premier provider of
global leadership advisory and on-demand talent solutions, serving
the senior-level talent and consulting needs of the world's top
organizations. In our role as trusted leadership advisors, we
partner with our clients to develop future-ready leaders and
organizations, bringing together our services and offerings in
executive search, diversity and inclusion, leadership assessment
and development, organization and team acceleration, culture
shaping and on-demand, independent talent solutions. Heidrick &
Struggles pioneered the profession of executive search more than 70
years ago. Today, the firm provides integrated talent and human
capital solutions to help our clients change the world, one
leadership team at a time. ® www.heidrick.com
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States ("GAAP"), Heidrick &
Struggles presents certain non-GAAP financial measures. A "non-GAAP
financial measure" is defined as a numerical measure of a company's
financial performance that excludes or includes amounts different
than the most directly comparable measure calculated and presented
in accordance with GAAP in the statements of comprehensive income,
balance sheets or statements of cash flow of the Company.
Non-GAAP financial measures used within this earnings release
are adjusted net income, adjusted diluted earnings per share,
adjusted effective tax rate, adjusted EBITDA, adjusted EBITDA
margin, and net revenue excluding the impact of exchange rate
fluctuations (referred to as constant currency). These measures are
presented because management uses this information to monitor and
evaluate financial results and allocate resources. Management
believes this information is also useful for investors to evaluate
the comparability of financial information presented.
Reconciliations of these non-GAAP financial measures to the most
directly comparable measures calculated and presented in accordance
with GAAP are provided as schedules attached to this release.
Adjusted net income and adjusted diluted earnings per share are
net income and diluted earnings per share excluding goodwill
impairment and earnout fair value adjustments, net of tax.
Adjusted effective tax rate is effective tax rate excluding
goodwill impairment and earnout fair value adjustments, net of
tax.
Adjusted EBITDA refers to earnings before interest, taxes,
depreciation, intangible amortization, earnout accretion, earnout
fair value adjustments, acquisition contingent compensation,
deferred compensation plan income and expense, reorganization
costs, impairment charges, restructuring charges, and other
non-operating income (expense).
Adjusted EBITDA margin refers to adjusted EBITDA as a percentage
of net revenue in the same period.
The Company evaluates its results of operations on both an as
reported and a constant currency basis. The constant currency
presentation is a non-GAAP financial measure, which excludes the
impact of fluctuations in foreign currency exchange rates. The
Company believes providing constant currency information provides
valuable supplemental information regarding its results of
operations, consistent with how it evaluates its performance. The
Company calculates constant currency percentages by converting its
financial results in a local currency for a period using the
average exchange rate for the prior period to which it is
comparing. This calculation may differ from similarly titled
measures used by other companies.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the federal securities laws, including statements
regarding guidance for the first quarter of 2024. The
forward-looking statements are based on current expectations,
estimates, forecasts, and projections about the industry in which
we operate and management's beliefs and assumptions.
Forward-looking statements may be identified by the use of words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "outlook," "projects," "forecasts," "aim" and
similar expressions. Forward-looking statements are not guarantees
of future performance, rely on a number of assumptions, and involve
certain known and unknown risks and uncertainties that are
difficult to predict, many of which are beyond our control. Factors
that may cause actual outcomes and results to differ materially
from what is expressed, forecasted or implied in the
forward-looking statements include, among other things, leadership
changes, our ability to attract, integrate, develop, manage and
retain qualified consultants and senior leaders; our ability to
prevent our consultants from taking our clients with them to
another firm; our ability to maintain our professional reputation
and brand name; the fact that our net revenue may be affected by
adverse economic conditions; our clients' ability to restrict us
from recruiting their employees; the aggressive competition we
face; our heavy reliance on information management systems; the
fact that we face the risk of liability in the services we perform;
the fact that data security, data privacy and data protection laws
and other evolving regulations and cross-border data transfer
restrictions may limit the use of our services and adversely affect
our business; social, political, regulatory and legal risks in
markets where we operate; any challenges to the classification of
our on-demand talent as independent contractors; the impact of
foreign currency exchange rate fluctuations; the fact that we may
not be able to align our cost structure with net revenue;
unfavorable tax law changes and tax authority rulings; our ability
to realize our tax losses; the timing of the establishment or
reversal of valuation allowance on deferred tax assets; any
impairment of our goodwill, other intangible assets and other
long-lived assets; our ability to execute and integrate future
acquisitions; the fact that we have anti-takeover provisions that
make an acquisition of us difficult and expensive; our ability to
access additional credit; and the increased cybersecurity
requirements, vulnerabilities, threats and more sophisticated and
targeted cyber-related attacks that could pose a risk to our
systems, networks, solutions, services and data. We caution the
reader that the list of factors may not be exhaustive. For more
information on these risks, uncertainties and other factors, refer
to our Annual Report on Form 10-K for the year ended December 31, 2023, under the heading "Risk
Factors" in Item 1A. The forward-looking statements contained in
this press release speak only as of the date of this press release.
We undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Contacts:
Investors & Analysts:
Suzanne Rosenberg, VP, Investor Relations
srosenberg@heidrick.com
Media:
Bianca Wilson,
Director, Public Relations, Americas
bwilson@heidrick.com
Heidrick & Struggles International,
Inc.
Consolidated Statements of Comprehensive
Income
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
$
253,162
|
|
$
235,717
|
|
$
17,445
|
|
7.4 %
|
Reimbursements
|
4,228
|
|
2,952
|
|
1,276
|
|
43.2 %
|
Total
revenue
|
257,390
|
|
238,669
|
|
18,721
|
|
7.8 %
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries and
benefits
|
151,036
|
|
156,828
|
|
(5,792)
|
|
(3.7) %
|
General and
administrative expenses
|
44,089
|
|
35,492
|
|
8,597
|
|
24.2 %
|
Cost of
services
|
30,221
|
|
17,484
|
|
12,737
|
|
72.8 %
|
Research and
development
|
5,952
|
|
6,067
|
|
(115)
|
|
(1.9) %
|
Reimbursed
expenses
|
4,228
|
|
2,952
|
|
1,276
|
|
43.2 %
|
Total operating
expenses
|
235,526
|
|
218,823
|
|
16,703
|
|
7.6 %
|
|
|
|
|
|
|
|
|
Operating
income
|
21,864
|
|
19,846
|
|
2,018
|
|
10.2 %
|
|
|
|
|
|
|
|
|
Non-operating income
(expense)
|
|
|
|
|
|
|
|
Interest,
net
|
3,950
|
|
3,673
|
|
|
|
|
Other, net
|
(840)
|
|
(627)
|
|
|
|
|
Net non-operating
income
|
3,110
|
|
3,046
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
24,974
|
|
22,892
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
10,119
|
|
6,848
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
14,855
|
|
16,044
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of tax
|
7,951
|
|
8,196
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$ 22,806
|
|
$ 24,240
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
20,122
|
|
19,861
|
|
|
|
|
Diluted
|
20,670
|
|
20,499
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
0.74
|
|
$
0.81
|
|
|
|
|
Diluted
|
$
0.72
|
|
$
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
as a % of net revenue
|
59.7 %
|
|
66.5 %
|
|
|
|
|
General and
administrative expenses as a % of net revenue
|
17.4 %
|
|
15.1 %
|
|
|
|
|
Cost of services as a %
of net revenue
|
11.9 %
|
|
7.4 %
|
|
|
|
|
Research and
development as a % of net revenue
|
2.4 %
|
|
2.6 %
|
|
|
|
|
Operating income
margin
|
8.6 %
|
|
8.4 %
|
|
|
|
|
Heidrick & Struggles International,
Inc.
Segment Information
(In
thousands)
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
|
2023
Margin1
|
|
2022
Margin1
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$ 124,778
|
|
$ 130,561
|
|
$
(5,783)
|
|
(4.4) %
|
|
|
|
|
Europe
|
37,275
|
|
37,258
|
|
17
|
|
— %
|
|
|
|
|
Asia
Pacific
|
21,912
|
|
24,838
|
|
(2,926)
|
|
(11.8) %
|
|
|
|
|
Total Executive
Search
|
183,965
|
|
192,657
|
|
(8,692)
|
|
(4.5) %
|
|
|
|
|
On-Demand
Talent
|
41,096
|
|
22,368
|
|
18,728
|
|
83.7 %
|
|
|
|
|
Heidrick
Consulting
|
28,101
|
|
20,692
|
|
7,409
|
|
35.8 %
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
253,162
|
|
235,717
|
|
17,445
|
|
7.4 %
|
|
|
|
|
Reimbursements
|
4,228
|
|
2,952
|
|
1,276
|
|
43.2 %
|
|
|
|
|
Total
revenue
|
$ 257,390
|
|
$ 238,669
|
|
$ 18,721
|
|
7.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$ 45,801
|
|
$ 44,103
|
|
$
1,698
|
|
3.9 %
|
|
36.7 %
|
|
33.8 %
|
Europe
|
5,759
|
|
4,264
|
|
1,495
|
|
35.1 %
|
|
15.5 %
|
|
11.4 %
|
Asia
Pacific
|
3,169
|
|
5,517
|
|
(2,348)
|
|
(42.6) %
|
|
14.5 %
|
|
22.2 %
|
Total Executive
Search
|
54,729
|
|
53,884
|
|
845
|
|
1.6 %
|
|
29.7 %
|
|
28.0 %
|
On-Demand
Talent
|
774
|
|
(1,430)
|
|
2,204
|
|
154.1 %
|
|
1.9 %
|
|
(6.4) %
|
Heidrick
Consulting
|
1,025
|
|
(2,370)
|
|
3,395
|
|
143.2 %
|
|
3.6 %
|
|
(11.5) %
|
Total
segments
|
56,528
|
|
50,084
|
|
6,444
|
|
12.9 %
|
|
22.3 %
|
|
21.2 %
|
Research and
Development
|
(5,139)
|
|
(5,788)
|
|
649
|
|
11.2 %
|
|
(2.0) %
|
|
(2.5) %
|
Global Operations
Support
|
(15,632)
|
|
(18,357)
|
|
2,725
|
|
14.8 %
|
|
(6.2) %
|
|
(7.8) %
|
Total operating
income
|
$ 35,757
|
|
$ 25,939
|
|
$
9,818
|
|
37.9 %
|
|
14.1 %
|
|
11.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Margin based on revenue
before reimbursements (net revenue).
|
Heidrick & Struggles International,
Inc.
Consolidated Statements of Comprehensive
Income
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
|
|
|
Twelve Months
Ended
December
31,
|
|
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
$ 1,026,864
|
|
$ 1,073,464
|
|
$ (46,600)
|
|
(4.3) %
|
Reimbursements
|
14,318
|
|
10,122
|
|
4,196
|
|
41.5 %
|
Total
revenue
|
1,041,182
|
|
1,083,586
|
|
(42,404)
|
|
(3.9) %
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries and
benefits
|
656,030
|
|
737,430
|
|
(81,400)
|
|
(11.0) %
|
General and
administrative expenses
|
156,494
|
|
132,678
|
|
23,816
|
|
18.0 %
|
Cost of
services
|
109,039
|
|
70,676
|
|
38,363
|
|
54.3 %
|
Research and
development
|
22,698
|
|
20,414
|
|
2,284
|
|
11.2 %
|
Impairment
charges
|
7,246
|
|
—
|
|
7,246
|
|
100.0 %
|
Reimbursed
expenses
|
14,318
|
|
10,122
|
|
4,196
|
|
41.5 %
|
Total operating
expenses
|
965,825
|
|
971,320
|
|
(5,495)
|
|
(0.6) %
|
|
|
|
|
|
|
|
|
Operating
income
|
75,357
|
|
112,266
|
|
(36,909)
|
|
(32.9) %
|
|
|
|
|
|
|
|
|
Non-operating income
(expense)
|
|
|
|
|
|
|
|
Interest,
net
|
11,617
|
|
5,337
|
|
|
|
|
Other, net
|
1,697
|
|
(2,367)
|
|
|
|
|
Net non-operating
income
|
13,314
|
|
2,970
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
88,671
|
|
115,236
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
34,261
|
|
35,750
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
54,410
|
|
79,486
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax
|
4,318
|
|
(5,864)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$ 58,728
|
|
$ 73,622
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
20,029
|
|
19,758
|
|
|
|
|
Diluted
|
20,766
|
|
20,618
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
2.72
|
|
$
4.02
|
|
|
|
|
Diluted
|
$
2.62
|
|
$
3.86
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
as a % of net revenue
|
63.9 %
|
|
68.7 %
|
|
|
|
|
General and
administrative expenses as a % of net revenue
|
15.2 %
|
|
12.4 %
|
|
|
|
|
Cost of services as a %
of net revenue
|
10.6 %
|
|
6.6 %
|
|
|
|
|
Research and
development as a % of net revenue
|
2.2 %
|
|
1.9 %
|
|
|
|
|
Operating income
margin
|
7.3 %
|
|
10.5 %
|
|
|
|
|
Heidrick & Struggles International,
Inc.
Segment Information
(In
thousands)
(Unaudited)
|
|
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
|
2023
Margin1
|
|
2022
Margin1
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
522,988
|
|
$
612,881
|
|
$
(89,893)
|
|
(14.7) %
|
|
|
|
|
Europe
|
166,379
|
|
176,275
|
|
(9,896)
|
|
(5.6) %
|
|
|
|
|
Asia
Pacific
|
90,678
|
|
112,766
|
|
(22,088)
|
|
(19.6) %
|
|
|
|
|
Total Executive
Search
|
780,045
|
|
901,922
|
|
(121,877)
|
|
(13.5) %
|
|
|
|
|
On-Demand
Talent
|
152,506
|
|
91,349
|
|
61,157
|
|
66.9 %
|
|
|
|
|
Heidrick
Consulting
|
94,313
|
|
80,193
|
|
14,120
|
|
17.6 %
|
|
|
|
|
Revenue before
reimbursements (net revenue)
|
1,026,864
|
|
1,073,464
|
|
(46,600)
|
|
(4.3) %
|
|
|
|
|
Reimbursements
|
14,318
|
|
10,122
|
|
4,196
|
|
41.5 %
|
|
|
|
|
Total
revenue
|
$
1,041,182
|
|
$
1,083,586
|
|
$
(42,404)
|
|
(3.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
173,358
|
|
$
164,193
|
|
$ 9,165
|
|
5.6 %
|
|
33.1 %
|
|
26.8 %
|
Europe
|
22,246
|
|
22,150
|
|
96
|
|
0.4 %
|
|
13.4 %
|
|
12.6 %
|
Asia
Pacific
|
11,070
|
|
19,813
|
|
(8,743)
|
|
(44.1) %
|
|
12.2 %
|
|
17.6 %
|
Total Executive
Search
|
206,674
|
|
206,156
|
|
518
|
|
0.3 %
|
|
26.5 %
|
|
22.9 %
|
On-Demand
Talent
|
1,434
|
|
(336)
|
|
1,770
|
|
NM
|
|
0.9 %
|
|
(0.4) %
|
Heidrick
Consulting
|
(5,823)
|
|
(6,444)
|
|
621
|
|
9.6 %
|
|
(6.2) %
|
|
(8.0) %
|
Total
segments
|
202,285
|
|
199,376
|
|
2,909
|
|
1.5 %
|
|
19.7 %
|
|
18.6 %
|
Research and
Development
|
(20,535)
|
|
(19,965)
|
|
(570)
|
|
(2.9) %
|
|
(2.0) %
|
|
(1.9) %
|
Global Operations
Support
|
(56,133)
|
|
(58,533)
|
|
2,400
|
|
4.1 %
|
|
(5.5) %
|
|
(5.5) %
|
Total operating
income
|
$
125,617
|
|
$
120,878
|
|
$ 4,739
|
|
3.9 %
|
|
12.2 %
|
|
11.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Margin based on revenue
before reimbursements (net revenue).
|
Heidrick & Struggles International,
Inc.
Reconciliation of Net Income and Adjusted Net Income
(Non-GAAP)
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
income
|
$
14,855
|
|
$
16,044
|
|
$
54,410
|
|
$
79,486
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
Impairment charges, net
of tax1
|
—
|
|
—
|
|
6,038
|
|
—
|
Earnout fair value
adjustment, net of tax2
|
—
|
|
29
|
|
—
|
|
(320)
|
Total
adjustments
|
—
|
|
29
|
|
6,038
|
|
(320)
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
14,855
|
|
$
16,073
|
|
$
60,448
|
|
$
79,166
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
20,122
|
|
19,861
|
|
20,029
|
|
19,758
|
Diluted
|
20,670
|
|
20,499
|
|
20,766
|
|
20,618
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
0.74
|
|
$
0.81
|
|
$
2.72
|
|
$
4.02
|
Diluted
|
$
0.72
|
|
$
0.78
|
|
$
2.62
|
|
$
3.86
|
|
|
|
|
|
|
|
|
Adjusted earnings
per common share
|
|
|
|
|
|
|
|
Basic
|
$
0.74
|
|
$
0.81
|
|
$
3.02
|
|
$
4.01
|
Diluted
|
$
0.72
|
|
$
0.78
|
|
$
2.91
|
|
$
3.84
|
|
|
|
|
|
|
|
|
1
|
The Company recorded a
goodwill impairment charge of $7.2 million in the Heidrick
Consulting segment for the year ended December 31, 2023.
|
2
|
The Company recorded a
fair value adjustment to increase the On-Demand Talent earnout by
$0.1 million for the three months ended December 31, 2022. The
Company recorded a fair value adjustment to reduce the On-Demand
Talent earnout by $0.5 million for the year ended December 31,
2022.
|
Heidrick & Struggles International,
Inc.
Consolidated Balance Sheets
(In
thousands)
(Unaudited)
|
|
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
412,618
|
|
$
355,447
|
Marketable
securities
|
65,538
|
|
266,169
|
Accounts receivable,
net
|
133,128
|
|
126,437
|
Prepaid
expenses
|
23,597
|
|
24,098
|
Other current
assets
|
47,923
|
|
40,722
|
Income taxes
recoverable
|
10,410
|
|
10,946
|
Total current
assets
|
693,214
|
|
823,819
|
|
|
|
|
Non-current
assets
|
|
|
|
Property and equipment,
net
|
35,752
|
|
30,207
|
Operating lease
right-of-use assets
|
86,063
|
|
71,457
|
Assets designated for
retirement and pension plans
|
11,105
|
|
11,332
|
Investments
|
47,287
|
|
34,354
|
Other non-current
assets
|
17,071
|
|
25,788
|
Goodwill
|
202,252
|
|
138,361
|
Other intangible
assets, net
|
20,842
|
|
6,333
|
Deferred income
taxes
|
28,005
|
|
33,987
|
Total non-current
assets
|
448,377
|
|
351,819
|
|
|
|
|
Total
assets
|
$ 1,141,591
|
|
$ 1,175,638
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
20,837
|
|
$
14,613
|
Accrued salaries and
benefits
|
322,744
|
|
451,161
|
Deferred
revenue
|
45,732
|
|
43,057
|
Operating lease
liabilities
|
21,498
|
|
19,554
|
Other current
liabilities
|
21,823
|
|
56,016
|
Income taxes
payable
|
6,057
|
|
4,076
|
Total current
liabilities
|
438,691
|
|
588,477
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Accrued salaries and
benefits
|
52,108
|
|
59,467
|
Retirement and pension
plans
|
62,100
|
|
48,456
|
Operating lease
liabilities
|
78,204
|
|
63,299
|
Other non-current
liabilities
|
41,808
|
|
5,293
|
Deferred income
taxes
|
6,402
|
|
—
|
Total non-current
liabilities
|
240,622
|
|
176,515
|
|
|
|
|
Total
liabilities
|
679,313
|
|
764,992
|
|
|
|
|
Stockholders'
equity
|
462,278
|
|
410,646
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$ 1,141,591
|
|
$ 1,175,638
|
Heidrick & Struggles International,
Inc.
Consolidated Statements of Cash
Flows
(In
thousands)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
2023
|
|
2022
|
Cash flows -
operating activities
|
|
|
|
|
Net income
|
|
$
14,855
|
|
$
16,044
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
5,076
|
|
2,779
|
Deferred income
taxes
|
|
12,448
|
|
8,064
|
Stock-based
compensation expense
|
|
3,499
|
|
4,998
|
Accretion expense
related to earnout payments
|
|
457
|
|
—
|
Gain on marketable
securities
|
|
(878)
|
|
(2,293)
|
Loss on disposal of
property and equipment
|
|
17
|
|
16
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
|
59,118
|
|
69,275
|
Accounts
payable
|
|
1,526
|
|
(2,481)
|
Accrued
expenses
|
|
54,668
|
|
65,306
|
Deferred
revenue
|
|
3,657
|
|
(1,324)
|
Income taxes
recoverable and payable, net
|
|
(13,309)
|
|
(7,945)
|
Retirement and pension
plan assets and liabilities
|
|
796
|
|
(3,955)
|
Prepaid
expenses
|
|
5,004
|
|
3,787
|
Other assets and
liabilities, net
|
|
8,979
|
|
8,065
|
Net cash provided by
operating activities
|
|
155,913
|
|
160,336
|
|
|
|
|
|
Cash flows -
investing activities
|
|
|
|
|
Acquisition of
business, net of cash acquired
|
|
(11,905)
|
|
—
|
Capital
expenditures
|
|
(3,814)
|
|
(2,958)
|
Purchases of marketable
securities and investments
|
|
(65,518)
|
|
(83,727)
|
Proceeds from sales of
marketable securities and investments
|
|
48,183
|
|
143
|
Net cash used in
investing activities
|
|
(33,054)
|
|
(86,542)
|
|
|
|
|
|
Cash flows -
financing activities
|
|
|
|
|
Cash dividends
paid
|
|
(3,154)
|
|
(3,123)
|
Net cash used in
financing activities
|
|
(3,154)
|
|
(3,123)
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash, cash equivalents and restricted
cash
|
|
6,442
|
|
9,308
|
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
126,147
|
|
79,979
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
286,471
|
|
275,510
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
412,618
|
|
$
355,489
|
Heidrick & Struggles International,
Inc.
Consolidated Statements of Cash
Flows
(In
thousands)
(Unaudited)
|
|
|
|
|
|
Twelve Months
Ended
December
31,
|
|
|
2023
|
|
2022
|
Cash flows -
operating activities
|
|
|
|
|
Net income
|
|
$
54,410
|
|
$
79,486
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
18,508
|
|
10,603
|
Deferred income
taxes
|
|
11,900
|
|
7,088
|
Stock-based
compensation expense
|
|
10,830
|
|
16,689
|
Accretion expense
related to earnout payments
|
|
1,554
|
|
820
|
Gain on marketable
securities
|
|
(2,918)
|
|
(2,406)
|
Loss on disposal of
property and equipment
|
|
209
|
|
392
|
Impairment
charges
|
|
7,246
|
|
—
|
Changes in assets and
liabilities, net of effects of acquisition:
|
|
|
|
|
Accounts
receivable
|
|
6,913
|
|
4,522
|
Accounts
payable
|
|
(131)
|
|
(5,731)
|
Accrued
expenses
|
|
(145,118)
|
|
32,892
|
Deferred
revenue
|
|
2,035
|
|
(7,237)
|
Income taxes
recoverable and payable, net
|
|
(6,692)
|
|
(13,606)
|
Retirement and pension
plan assets and liabilities
|
|
7,493
|
|
(479)
|
Prepaid
expenses
|
|
1,233
|
|
(2,850)
|
Other assets and
liabilities, net
|
|
5,736
|
|
(895)
|
Net cash provided by
(used in) operating activities
|
|
(26,792)
|
|
119,288
|
|
|
|
|
|
Cash flows -
investing activities
|
|
|
|
|
Acquisition of
businesses, net of cash acquired
|
|
(49,858)
|
|
—
|
Capital
expenditures
|
|
(13,433)
|
|
(11,134)
|
Purchases of marketable
securities and investments
|
|
(140,982)
|
|
(269,824)
|
Proceeds from sales of
marketable securities and investments
|
|
337,872
|
|
1,359
|
Net cash provided by
(used in) investing activities
|
|
133,599
|
|
(279,599)
|
|
|
|
|
|
Cash flows -
financing activities
|
|
|
|
|
Repurchases of common
stock
|
|
(904)
|
|
—
|
Cash dividends
paid
|
|
(12,537)
|
|
(12,466)
|
Payment of employee tax
withholdings on equity transactions
|
|
(4,141)
|
|
(3,219)
|
Acquisition earnout
payments
|
|
(35,946)
|
|
—
|
Net cash used in
financing activities
|
|
(53,528)
|
|
(15,685)
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash, cash equivalents and restricted
cash
|
|
3,850
|
|
(13,774)
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
57,129
|
|
(189,770)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
355,489
|
|
545,259
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$ 412,618
|
|
$ 355,489
|
Heidrick & Struggles International,
Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue before
reimbursements (net revenue)
|
$
253,162
|
|
$
235,717
|
|
$
1,026,864
|
|
$
1,073,464
|
|
|
|
|
|
|
|
|
Net
income
|
14,855
|
|
16,044
|
|
54,410
|
|
79,486
|
Interest,
net
|
(3,950)
|
|
(3,673)
|
|
(11,617)
|
|
(5,337)
|
Other, net
|
840
|
|
627
|
|
(1,697)
|
|
2,367
|
Provision for income
taxes
|
10,119
|
|
6,848
|
|
34,261
|
|
35,750
|
Operating
income
|
21,864
|
|
19,846
|
|
75,357
|
|
112,266
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
Depreciation
|
2,550
|
|
1,991
|
|
9,113
|
|
7,394
|
Intangible
amortization
|
2,526
|
|
788
|
|
9,395
|
|
3,209
|
Earnout
accretion
|
457
|
|
—
|
|
1,554
|
|
820
|
Earnout fair value
adjustments
|
—
|
|
43
|
|
—
|
|
(464)
|
Acquisition contingent
consideration
|
3,223
|
|
914
|
|
11,934
|
|
3,885
|
Deferred compensation
plan
|
3,823
|
|
2,357
|
|
6,132
|
|
(6,232)
|
Reorganization
costs
|
1,314
|
|
—
|
|
4,886
|
|
—
|
Impairment
charges
|
—
|
|
—
|
|
7,246
|
|
—
|
Total
adjustments
|
13,893
|
|
6,093
|
|
50,260
|
|
8,612
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 35,757
|
|
$ 25,939
|
|
$
125,617
|
|
$
120,878
|
Adjusted EBITDA
margin
|
14.1 %
|
|
11.0 %
|
|
12.2 %
|
|
11.3 %
|
Heidrick & Struggles International,
Inc.
Reconciliation of Operating Income to Adjusted EBITDA
by Line of Business (Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
|
Three Months Ended
December 31, 2023
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
183,965
|
|
$ 41,096
|
|
$ 28,101
|
|
$
—
|
|
$
—
|
|
$
253,162
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
49,086
|
|
(4,616)
|
|
(852)
|
|
(5,952)
|
|
(15,802)
|
|
21,864
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
1,310
|
|
74
|
|
247
|
|
754
|
|
165
|
|
2,550
|
Intangible
amortization
|
28
|
|
2,060
|
|
438
|
|
—
|
|
—
|
|
2,526
|
Earnout
accretion
|
—
|
|
399
|
|
58
|
|
—
|
|
—
|
|
457
|
Acquisition contingent
compensation
|
640
|
|
1,543
|
|
1,040
|
|
—
|
|
—
|
|
3,223
|
Deferred compensation
plan
|
3,665
|
|
—
|
|
94
|
|
59
|
|
5
|
|
3,823
|
Reorganization
costs
|
—
|
|
1,314
|
|
—
|
|
—
|
|
—
|
|
1,314
|
Total
adjustments
|
5,643
|
|
5,390
|
|
1,877
|
|
813
|
|
170
|
|
13,893
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 54,729
|
|
$
774
|
|
$
1,025
|
|
$
(5,139)
|
|
$ (15,632)
|
|
$ 35,757
|
Adjusted EBITDA
margin
|
29.7 %
|
|
1.9 %
|
|
3.6 %
|
|
(2.0) %
|
|
(6.2) %
|
|
14.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2022
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
192,657
|
|
$ 22,368
|
|
$ 20,692
|
|
$
—
|
|
$
—
|
|
$
235,717
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
49,214
|
|
(2,154)
|
|
(2,663)
|
|
(6,067)
|
|
(18,484)
|
|
19,846
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
1,434
|
|
51
|
|
132
|
|
248
|
|
126
|
|
1,991
|
Intangible
amortization
|
58
|
|
630
|
|
100
|
|
—
|
|
—
|
|
788
|
Earnout
accretion
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Earnout fair value
adjustments
|
—
|
|
43
|
|
—
|
|
—
|
|
—
|
|
43
|
Acquisition contingent
compensation
|
914
|
|
—
|
|
—
|
|
—
|
|
—
|
|
914
|
Deferred compensation
plan
|
2,264
|
|
—
|
|
61
|
|
31
|
|
1
|
|
2,357
|
Total
adjustments
|
4,670
|
|
724
|
|
293
|
|
279
|
|
127
|
|
6,093
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 53,884
|
|
$
(1,430)
|
|
$
(2,370)
|
|
$
(5,788)
|
|
$ (18,357)
|
|
$ 25,939
|
Adjusted EBITDA
margin
|
28.0 %
|
|
(6.4 %)
|
|
(11.5 %)
|
|
(2.5) %
|
|
(7.8) %
|
|
11.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The Company does not
allocate interest income or expense, other income or expense, and
the provision for income taxes to the Company's reportable
operating segments. As such, the Company has concluded that
operating income (loss) represents the most directly comparable
measure of financial performance presented in accordance with U.S.
GAAP for the reconciliation of Adjusted EBITDA in this
presentation.
|
Heidrick & Struggles International,
Inc.
Reconciliation of Operating Income to Adjusted EBITDA
by Line of Business (Non-GAAP)
(In
thousands)
(Unaudited)
|
|
|
|
Twelve Months Ended
December 31, 2023
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
780,045
|
|
$
152,506
|
|
$ 94,313
|
|
$
—
|
|
$
—
|
|
$ 1,026,864
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
190,009
|
|
(16,437)
|
|
(18,729)
|
|
(22,698)
|
|
(56,788)
|
|
75,357
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
5,238
|
|
400
|
|
754
|
|
2,073
|
|
648
|
|
9,113
|
Intangible
amortization
|
173
|
|
7,797
|
|
1,425
|
|
—
|
|
—
|
|
9,395
|
Earnout
accretion
|
—
|
|
1,381
|
|
173
|
|
—
|
|
—
|
|
1,554
|
Acquisition contingent
compensation
|
3,089
|
|
5,687
|
|
3,158
|
|
—
|
|
—
|
|
11,934
|
Deferred compensation
plan
|
5,885
|
|
—
|
|
150
|
|
90
|
|
7
|
|
6,132
|
Reorganization
costs
|
2,280
|
|
2,606
|
|
—
|
|
—
|
|
—
|
|
4,886
|
Impairment
charges
|
—
|
|
—
|
|
7,246
|
|
—
|
|
—
|
|
7,246
|
Total
adjustments
|
16,665
|
|
17,871
|
|
12,906
|
|
2,163
|
|
655
|
|
50,260
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
206,674
|
|
$
1,434
|
|
$
(5,823)
|
|
$ (20,535)
|
|
$ (56,133)
|
|
$
125,617
|
Adjusted EBITDA
margin
|
26.5 %
|
|
0.9 %
|
|
(6.2 %)
|
|
(2.0 %)
|
|
(5.5) %
|
|
12.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2022
|
|
Executive
Search
|
|
On-Demand
Talent
|
|
Heidrick
Consulting
|
|
Research &
Development
|
|
Global
Operations
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before
reimbursements (net
revenue)
|
$
901,922
|
|
$ 91,349
|
|
$ 80,193
|
|
$
—
|
|
$
—
|
|
$ 1,073,464
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)1
|
202,186
|
|
(3,361)
|
|
(7,155)
|
|
(20,414)
|
|
(58,990)
|
|
112,266
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
5,785
|
|
150
|
|
478
|
|
524
|
|
457
|
|
7,394
|
Intangible
amortization
|
290
|
|
2,519
|
|
400
|
|
—
|
|
—
|
|
3,209
|
Earnout
accretion
|
—
|
|
820
|
|
—
|
|
—
|
|
—
|
|
820
|
Earnout fair value
adjustments
|
—
|
|
(464)
|
|
—
|
|
—
|
|
—
|
|
(464)
|
Acquisition contingent
compensation
|
3,885
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,885
|
Deferred compensation
plan
|
(5,990)
|
|
—
|
|
(167)
|
|
(75)
|
|
—
|
|
(6,232)
|
Total
adjustments
|
3,970
|
|
3,025
|
|
711
|
|
449
|
|
457
|
|
8,612
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
206,156
|
|
$
(336)
|
|
$
(6,444)
|
|
$ (19,965)
|
|
$ (58,533)
|
|
$
120,878
|
Adjusted EBITDA
margin
|
22.9 %
|
|
(0.4 %)
|
|
(8.0 %)
|
|
(1.9 %)
|
|
(5.5 %)
|
|
11.3 %
|
|
|
1
|
The Company does not
allocate interest income or expense, other income or expense, and
the provision for income taxes to the Company's reportable
operating segments. As such, the Company has concluded that
operating income (loss) represents the most directly comparable
measure of financial performance presented in accordance with U.S.
GAAP for the reconciliation of Adjusted EBITDA in this
presentation.
|
View original
content:https://www.prnewswire.com/news-releases/heidrick--struggles-reports-fourth-quarter-and-full-year-2023-results-302071506.html
SOURCE Heidrick & Struggles International, Inc.