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Heidrick & Struggles International Inc. Reports Operating Results (10-Q)

April 30, 2012 | About:
10qk

10qk

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Heidrick & Struggles International Inc. (HSII) filed Quarterly Report for the period ended 2012-03-31.

Heidrick & Strg has a market cap of $355.7 million; its shares were traded at around $19.5 with a P/E ratio of 36.9 and P/S ratio of 0.6. The dividend yield of Heidrick & Strg stocks is 2.6%.

Highlight of Business Operations:

Revenue before reimbursements (net revenue). Consolidated net revenue decreased $9.1 million, or 7.9%, to $106.5 million for the three months ended March 31, 2012 from $115.6 million for the three months ended March 31, 2011. The negative impact of exchange rate fluctuations resulted in less than one percentage point of the decrease. Decreases in the Financial Services, Global Technology and Services, and Industrial industry groups were the primary drivers of the decrease in consolidated net revenue; however, these decreases were partially offset by growth in revenue from the Life Sciences and Education and Social Enterprise industry groups. Net revenue from Leadership Consulting Services increased 18.0% to $10.0 million and represented 9.3% of total net revenue in the quarter. The number of confirmed executive searches decreased 9.1% compared to the first quarter of 2011. The number of consultants was 343 as of March 31, 2012 compared to 372 as of March 31, 2011. Productivity, as measured by annualized net revenue per consultant, was $1.2 million in the first quarter of 2012 compared to $1.3 million in the first quarter of 2011, and average revenue per executive search was $100,300 in the 2012 first quarter compared to $101,200 in the 2011 first quarter.

Net revenue in the Americas was $58.9 million for the three months ended March 31, 2012, a decrease of $4.6 million, or 7.3%, from $63.5 million in the first quarter of 2011. Net revenue in Europe was $27.1 million for the three months ended March 31, 2012, a decrease of $0.5 million, or 1.8%, from $27.6 million in the first quarter of 2011. On a constant currency basis, net revenue increased by approximately 3 percentage points in Europe in the first quarter of 2012. In Asia Pacific, net revenue was $20.6 million for the three months ended March 31, 2012, a decrease of $4.0 million, or 16.2%, from $24.6 million in the first quarter of 2011. On a constant currency basis, net revenue declined by approximately 19 percentage points in Asia Pacific in the first quarter of 2012.

In the Americas, operating income for the three months ended March 31, 2012 increased $4.8 million to $12.4 million from $7.6 million for the three months ended March 31, 2011. The increase in operating income is due to a decrease in salaries and employee benefits expense of $7.8 million and a decrease in general and administrative expense of $1.6 million, which more than offset the decrease in net revenue of $4.6 million. The decrease in net revenue was primarily due to declines in the Financial Services and Global Technology and Services practices. The decrease in salaries and employee benefits is due to decreases in performance related compensation of $4.3 million associated with the decline in net revenue, and fixed compensation of $3.5 million primarily associated with the decrease in headcount due to the restructuring initiatives in the fourth quarter of 2011.

In Europe, operating income for the three months ended March 31, 2012 increased $3.4 million to $1.4 million from an operating loss of $2.1 million for the three months ended March 31, 2011. The increase in operating income is due to decreases in salaries and employee benefits expense of $2.3 million and general and administrative expense of $1.6 million, offset by a decrease in net revenue of $0.5 million. The decrease in net revenue was primarily related to declines in the Financial Services and Consumer Market practices, which was offset by an increase in Leadership Consulting services. The decrease in salaries and benefits is primarily due to the decrease in fixed compensation due to the decrease in headcount due to the restructuring initiatives in the fourth quarter of 2011.

In Asia Pacific, operating income for the three months ended March 31, 2012 decreased $2.3 million to $0.3 million from $2.5 million for the three months ended March 31, 2011. The decrease is due a decline of $4.0 million in net revenue, partially offset by lower general and administrative expenses of $0.9 million and lower salaries and employee benefits of $0.8 million. The decrease in net revenue was primarily due to declines in the Financial Services and Industrial practices. Performance related compensation decreased $2.3 million due primarily to the decrease in revenue, which was offset by an increase in fixed compensation of $1.5 million due to an increase in headcount. General and administrative costs decreased primarily to a reduction in travel and professional costs.

Read the The complete Report

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