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

May 03, 2010 | About:
10qk

10qk

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Heidrick & Struggles International Inc. (HSII) filed Quarterly Report for the period ended 2010-03-31.

Heidrick & Struggles International Inc. has a market cap of $451.46 million; its shares were traded at around $26.44 with a P/E ratio of 38.88 and P/S ratio of 1.09. The dividend yield of Heidrick & Struggles International Inc. stocks is 1.97%.HSII is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Revenue before reimbursements (net revenue). Consolidated net revenue increased $24.5 million, or 27.5%, to $113.7 million for the three months ended March 31, 2010 from $89.1 million for the three months ended March 31, 2009. The positive impact of exchange rate fluctuations resulted in approximately 6 percentage points of the increase. The number of confirmed executive searches was approximately 27 percent higher than in the 2009 first quarter. The year-over-year revenue increase was driven by growth in the Consumer Markets, Global Technology and Services, and Financial Services practices. The number of consultants was 367 as of March 31, 2010 compared to 359 at December 31, 2009, and 403 as of March 31, 2009. Productivity, as measured by annualized net revenue per consultant, was $1.2 million in the first quarter of 2010 compared to $0.9 million in the first quarter of 2009, and average fee per executive search was $98,400 in the 2010 first quarter compared to $98,900 in the 2009 first quarter.

Net revenue in the Americas was $57.5 million for the three months ended March 31, 2010, an increase of $11.1 million, or 24.0%, from $46.4 million in the first quarter of 2009. Net revenue in Europe was $32.8 million for the three months ended March 31, 2010, an increase of $4.7 million, or 16.9%, from $28.1 million in the first quarter of 2009. The positive impact of exchange rate fluctuations resulted in approximately 7 percentage points of the increase in the first quarter of 2010. In Asia Pacific, net revenue was $23.4 million for the three months ended March 31, 2010, an increase of $8.7 million, or 59.0%, from $14.7 million in the first quarter of 2009. The positive impact of exchange rate fluctuations resulted in approximately 16 percentage points of the increase in the first quarter of 2010.

Restructuring charges. There were no restructuring charges taken in the first quarter of 2010. In the first quarter of 2009, we recorded restructuring charges of $13.4 million in connection with initiatives to reduce our overall costs and improve operational efficiencies, consisting of $12.5 million of cash charges and $0.9 million of non-cash write-offs. These charges relate to severance and other employee-related costs associated with reductions in our workforce. The workforce reductions affected 197 employees globally, of which 108 were in the Americas, 41 in Europe, 31 in Asia Pacific and 17 in Corporate. By segment, the restructuring charges recorded in the first quarter of 2009 were $6.4 million in the Americas, $5.7 million in Europe, $0.7 million in Asia Pacific and $0.6 million in Corporate.

In the Americas, operating income for the three months ended March 31, 2010 increased $11.9 million to $4.4 million from an operating loss of $7.5 million for the three months ended March 31, 2009. The increase is due to an increase in net revenue of $11.1 million and a $2.1 million decrease in general and administrative expenses, offset by a $1.3 million increase in salaries and employee benefits expense.

In Europe, operating loss for the three months ended March 31, 2010 increased $1.4 million to $4.0 million from operating loss of $2.6 million for the three months ended March 31, 2009. The increase is due to other charges of $3.2 million related to exit and settlement expenses for a lease obligation at our former London office, and $1.0 million due to an unfavorable judgment in a lawsuit filed by a former European employee separated from us in 2006. Additionally, a $2.2 million increase in general and administrative expense was partially offset by an increase in net revenue of $4.7 million and a $0.4 million decrease in salary and employee benefits expense.

In Asia Pacific, operating income for the three months ended March 31, 2010 increased $4.4 million to $3.3 million from an operating loss of $1.1 million for the three months ended March 1, 2009. The increase is due to an increase in net revenue of $8.7 million offset by a $3.3 million increase in salaries and employee benefits expense and a $0.9 million increase in general and administrative expenses.

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