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.