Heidrick & Struggles International, Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2017; Provides Revenue Guidance for the Fourth Quarter and Tax Rate Guidance for the Full Year 2017
October 26, 2017 at 04:01 pm
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Heidrick & Struggles International, Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2017. For the quarter, the company's net revenue (revenue before reimbursements) increased 11.3%, or $16.3 million, to $159.8 million from $143.5 million in the 2016 third quarter. Operating income in the 2017 third quarter increased 16.8%, or $2.0 million, to $14.0 million. This compares to operating income of $12.0 million in the 2016 third quarter. Adjusted EBITDA(1) in the 2017 third quarter increased $0.5 million to $18.0 million from $17.5 million in the 2016 third quarter. Net income in the 2017 third quarter increased 17.7% to $8.2 million and diluted earnings per share was $0.43, based on an effective tax rate of 42.7% in the quarter. In the 2016 third quarter, net income was $6.9 million and diluted earnings per share was $0.37 based on an effective tax rate of 44.0% in the quarter. Net cash provided by operating activities in the 2017 third quarter was $50.2 million, compared to $35.9 million in the 2016 third quarter. Income before income taxes was $14,263,000 compared to $12,388,000 a year ago. Capital expenditures was $2,718,000 compared to $1,087,000 a year ago. Adjusted EBITDA was $17,951,000 compared to $17,459,000 a year ago.
For the nine months ended September 30, 2017, the company's net revenue increased 7.0%, or $29.5 million, to $452.0 million from $422.6 million in the first nine months of 2016. The operating loss for the first nine months of 2017 was $7.8 million compared to operating income of $27.6 million in the first nine months of 2016. Adjusted EBITDA for the first nine months of 2017 was $46.9 million compared to Adjusted EBITDA of $46.4 million for the same period of 2016. Net loss for the first nine months of 2017 was $9.4 million and the diluted loss per share was $0.50, reflecting an effective tax rate of 8.7%. Net income for the first nine months of 2016 was $14.9 million and diluted earnings per share were $0.79, reflecting an effective tax rate of 47.0%. Loss before income taxes was $10,329,000 compared to income of $28,158,000 a year ago. Net cash used in operating activities was $36,001,000 compared to $49,014,000 a year ago. Capital expenditures was $13,161,000 compared to $2,179,000 a year ago. Adjusted EBITDA was $46,906,000 compared to $18,796,000 a year ago.
The company is forecasting fourth quarter 2017 consolidated net revenue of between $150 million and $160 million. This forecast is based on the average currency rates in September 2017 and reflects, among other factors, management's assumptions for the anticipated volume of new Executive Search confirmations, Heidrick Consulting assignments, the current backlog, consultant productivity, consultant retention, and the seasonality of its business.
For the full year, the projected tax rate of approximately 8%. The full-year projected tax rate for 2017 reflects the deferred tax benefit on the long-lived assets and goodwill impairment.
Heidrick & Struggles International, Inc. is an advisory firm providing executive search, consulting and on-demand talent services to businesses and business leaders worldwide. It provides its services to a range of clients through the expertise of over 500 consultants located in cities around the world. Its service offerings include Executive Search, On-Demand Talent and Heidrick Consulting. Executive search firms are generally separated into two categories: retained search and contingency search. Its on-demand services provide clients seamless on-demand access to top independent talent, including professionals with deep industry and functional expertise for interim leadership roles and critical, project-based initiatives. Heidrick Consulting offers its clients impactful approaches to human capital development through a myriad of solutions, ranging from leadership assessment and development, team and organization acceleration, diversity and inclusion advisory services and others.
Heidrick & Struggles International, Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2017; Provides Revenue Guidance for the Fourth Quarter and Tax Rate Guidance for the Full Year 2017