Technology
Heidrick & Struggles Reports Third Quarter 2024 Results
Published
2 days agoon
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Quarterly Revenue Up 6% Year Over Year to $279 Million
All Business Segments Contribute to Top Line Growth
Delivers Strong Profitability with Diluted EPS of $0.71
Declares $0.15 Per Share Cash Dividend
CHICAGO, Nov. 4, 2024 /PRNewswire/ — Heidrick & Struggles International, Inc. (Nasdaq: HSII) (“Heidrick & Struggles”, “Heidrick” or the “Company”), a premier provider of global leadership advisory and on-demand talent solutions, today announced financial results for its third quarter ended September 30, 2024.
Third Quarter Highlights:
Net revenue of $278.6 million increased 5.9% year-over-yearAdjusted EBITDA of $30.4 millionAdjusted EBITDA margin of 10.9%
“Our Heidrick colleagues delivered solid quarterly results, outperforming industry trends and reaching the upper end of our outlook. This performance reflects our team’s sharp focus on market opportunities and client needs even as we implemented significant change across our organization,” said CEO Tom Monahan. “Looking ahead, there is still much work to be done as we pursue growth opportunities in Executive Search, more tightly focus our suite of leadership solutions, and drive profitability and scalability across the portfolio.”
“This work will allow us to take advantage of a large and growing market opportunity as clients increasingly put leadership strategy at the heart of their corporate strategy. With an iconic brand, deep expertise across regions and sectors, and a robust financial position, we believe Heidrick is well positioned to attract top talent and cultivate deeper and more durable client relationships. Combining these assets with disciplined execution will enable us to achieve sustained and profitable organic growth while enhancing long-term shareholder value.”
2024 Third Quarter Results
Consolidated net revenue of $278.6 million increased $15.4 million, or 5.9%, compared to $263.2 million in the 2023 third quarter. The Company experienced revenue growth in On-Demand Talent, Heidrick Consulting, and Executive Search in the Americas and Asia Pacific, partially offset by a decrease in Executive Search in Europe.
Adjusted EBITDA was $30.4 million compared to $29.3 million in the 2023 third quarter. Adjusted EBITDA margin was 10.9%, compared to 11.2% in the 2023 third quarter. In Executive Search, Adjusted EBITDA was $50.7 million compared to $51.0 million in the prior year period. In On-Demand Talent, Adjusted EBITDA was $1.8 million versus a loss of $0.6 million in the prior year period. In Heidrick Consulting, Adjusted EBITDA was a loss of $1.0 million compared to a loss of $2.4 million in the prior year period.
Net income was $14.8 million and diluted earnings per share was $0.71 with an effective tax rate of 29.7% compared to net income of $15.0 million and diluted earnings per share of $0.73, with an effective tax rate of 37.5% in the 2023 third quarter. The 2024 third quarter effective tax rate was positively impacted by a decrease in the Company’s estimated annual effective tax rate. 2024 third quarter adjusted net income was $15.1 million and adjusted diluted earnings per share was $0.72, with an adjusted effective tax rate of 28.5%.
Executive Search net revenue of $204.4 million increased $5.6 million, or 2.8%, compared to net revenue of $198.8 million in the 2023 third quarter. Excluding the impact of exchange rate fluctuations, which positively impacted results by $0.2 million, or 0.1%, net revenue increased 2.7%, or $5.4 million from the 2023 third quarter. Net revenue increased 1.7% in the Americas (up 2.1% on a constant currency basis), decreased 3.3% in Europe (down 5.0% on a constant currency basis), and increased 22.0% in Asia Pacific (up 22.0% on a constant currency basis) when compared to the prior year third quarter.
The Company had 414 Executive Search consultants at September 30, 2024, compared to 417 at September 30, 2023. Productivity, as measured by annualized Executive Search net revenue per consultant, was $2.0 million compared to $1.9 million in the 2023 third quarter, reflecting a lower number of consultants combined with higher revenue. Average revenue per executive search was approximately $149,000 compared to $153,000 in the prior year period. The number of search confirmations increased 5.4% compared to the year-ago period.
On-Demand Talent net revenue of $46.2 million increased $5.2 million, or 12.6%, compared to net revenue of $41.1 million in the 2023 third quarter. Excluding the impact of exchange rate fluctuations, which positively impacted results by $0.4 million, or 0.9%, net revenue increased 11.7%, or $4.8 million from the 2023 third quarter.
Heidrick Consulting net revenue of $27.9 million increased $4.6 million, or 19.9%, compared to net revenue of $23.3 million in the 2023 third quarter. Excluding the impact of exchange rate fluctuations, which positively impacted results by $0.3 million, or 1.1%, net revenue increased 18.9%, or $4.4 million. The Company had 84 Heidrick Consulting consultants at September 30, 2024, compared to 90 at September 30, 2023.
Consolidated salaries and benefits increased $15.8 million, or 9.5%, to $183.0 million compared to $167.2 million in the 2023 third quarter. Year-over-year, fixed compensation expense increased $9.9 million primarily reflecting increases in expenses related to the non-cash mark-to-market adjustments associated with the deferred compensation and stock compensation plans. Variable compensation increased $5.9 million due to an increase in consultant production. Salaries and benefits expense was 65.7% of net revenue for the quarter, compared to 63.5% in the 2023 third quarter.
General and administrative expenses increased $2.2 million, or 5.8%, to $39.7 million compared to $37.6 million in the 2023 third quarter. The increase was due to bad debt, office occupancy costs, expenses related to information technology, and business development travel, partially offset by decreases in professional fees, intangible amortization, and insurance and bank fees. As a percentage of net revenue, general and administrative expenses were 14.3% for both the 2024 and 2023 third quarters.
The Company’s cost of services was $31.0 million, or 11.1% of net revenue for the quarter, compared to $30.7 million, or 11.7% of net revenue in the 2023 third quarter. This primarily related to an increase in the volume of On-Demand Talent and Heidrick Consulting projects.
The Company’s research and development expenses were $5.7 million, or 2.0%, of net revenue for the quarter compared to $5.6 million, or 2.1%, of net revenue for the third quarter 2023.
Net cash provided by operating activities was $101.1 million compared to net cash provided by operating activities of $109.5 million in the 2023 third quarter. Cash, cash equivalents and marketable securities at September 30, 2024, was $409.4 million compared to $334.0 million at September 30, 2023, and $478.2 million at December 31, 2023. 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 year following the year in which they are earned.
Dividend
The Board of Directors declared a 2024 fourth quarter cash dividend of $0.15 per share payable on November 21, 2024, to shareholders of record at the close of business on November 14, 2024.
2024 Fourth Quarter Outlook
The Company expects 2024 fourth quarter consolidated net revenue of between $255 million and $275 million, while acknowledging that continued fluidity in external factors, such as the foreign exchange and interest rate environments, foreign conflicts, inflation and macroeconomic constraints on pricing actions, may impact quarterly results. In addition, this outlook is based on the average currency rates in September 2024 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, consultant retention, and the seasonality of the business along with the current backlog.
Quarterly Webcast and Conference Call
Heidrick & Struggles will host a conference call to review its third quarter results today, November 4, 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 (800) 715-9871 or (646) 307-1963, conference ID# 4805686. 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 EBITDA, Adjusted EBITDA margin, and consolidated net revenue excluding the impact of exchange rate fluctuations (referred to as on a constant currency basis). These measures are presented because management uses this information to monitor and evaluate financial results and trends. 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 EBITDA refers to net income before interest, other income or expense, income taxes, depreciation and amortization, as adjusted, to the extent they occur, for earnout accretion, earnout fair value adjustments, contingent compensation, deferred compensation plan income or expense, certain reorganization costs, impairment charges and restructuring charges.
Adjusted EBITDA margin refers to Adjusted EBITDA as a percentage of net revenue in the same period.
Adjusted net income and adjusted diluted earnings per share reflect the exclusion of goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.
Adjusted effective tax rate reflects the exclusion of goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.
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 fourth 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, our ability to attract, integrate, develop, manage, retain and motivate 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; our clients’ ability to restrict us from recruiting their employees; our heavy reliance on information management systems; risks arising from our implementation of new technology and intellectual property to deliver new products and services to our clients; our dependence on third parties for the execution of certain critical functions; 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; any challenges to the classification of our on-demand talent as independent contractors; the fact that increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted cyber-related attacks could pose a risk to our systems, networks, solutions, services and data; the fact that our net revenue may be affected by adverse macroeconomic or labor market conditions, including impacts of inflation and effects of geopolitical instability; the aggressive competition we face; the impact of foreign currency exchange rate fluctuations; our ability to access additional credit; social, political, regulatory, legal and economic risks in markets where we operate, including the impact of the ongoing war in Ukraine and the conflict in Israel and the Gaza strip, the risks of an expansion or escalation of those conflicts and our ability to quickly and completely recover from any disruption to our business; unfavorable tax law changes and tax authority rulings; our ability to realize the benefit of our net deferred tax assets; the fact that we may not be able to align our cost structure with net revenue; any impairment of our goodwill, other intangible assets and other long-lived assets; our ability to maintain an effective system of disclosure controls and internal control over our financial reporting and produce accurate and timely financial statements; our ability to execute and integrate future acquisitions; and the fact that we have anti-takeover provisions that make an acquisition of us difficult and expensive. 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, Vice President, Investor Relations
srosenberg@heidrick.com
Media:
Bianca Wilson, Director, Public Relations
bwilson@heidrick.com
Heidrick & Struggles International, Inc.
Consolidated Statements of Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
2024
2023
$ Change
% Change
Revenue
Revenue before reimbursements (net revenue)
$ 278,559
$ 263,160
$ 15,399
5.9 %
Reimbursements
4,256
4,736
(480)
(10.1) %
Total revenue
282,815
267,896
14,919
5.6 %
Operating expenses
Salaries and benefits
183,025
167,219
15,806
9.5 %
General and administrative expenses
39,740
37,564
2,176
5.8 %
Cost of services
31,030
30,680
350
1.1 %
Research and development
5,682
5,560
122
2.2 %
Reimbursed expenses
4,256
4,736
(480)
(10.1) %
Total operating expenses
263,733
245,759
17,974
7.3 %
Operating income
19,082
22,137
(3,055)
(13.8) %
Non-operating income (loss)
Interest, net
2,570
2,505
Other, net
(555)
(649)
Net non-operating income
2,015
1,856
Income before income taxes
21,097
23,993
Provision for income taxes
6,268
9,006
Net income
14,829
14,987
Other comprehensive income (loss), net of tax
6,996
(4,001)
Comprehensive income
$ 21,825
$ 10,986
Weighted-average common shares outstanding
Basic
20,357
20,076
Diluted
21,024
20,553
Earnings per common share
Basic
$ 0.73
$ 0.75
Diluted
$ 0.71
$ 0.73
Salaries and benefits as a % of net revenue
65.7 %
63.5 %
General and administrative expenses as a % of net revenue
14.3 %
14.3 %
Cost of services as a % of net revenue
11.1 %
11.7 %
Research and development as a % of net revenue
2.0 %
2.1 %
Operating margin
6.9 %
8.4 %
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
Three Months Ended September 30,
2024
2023
$
Change
%
Change
2024
Margin1
2023
Margin1
Revenue
Executive Search
Americas
$ 134,545
$ 132,320
$ 2,225
1.7 %
Europe
43,143
44,606
(1,463)
(3.3) %
Asia Pacific
26,701
21,888
4,813
22.0 %
Total Executive Search
204,389
198,814
5,575
2.8 %
On-Demand Talent
46,231
41,053
5,178
12.6 %
Heidrick Consulting
27,939
23,293
4,646
19.9 %
Revenue before reimbursements (net revenue)
278,559
263,160
15,399
5.9 %
Reimbursements
4,256
4,736
(480)
(10.1) %
Total revenue
$ 282,815
$ 267,896
$ 14,919
5.6 %
Adjusted EBITDA
Executive Search
Americas
$ 40,465
$ 39,354
$ 1,111
2.8 %
30.1 %
29.7 %
Europe
5,022
8,950
(3,928)
(43.9) %
11.6 %
20.1 %
Asia Pacific
5,247
2,704
2,543
94.0 %
19.7 %
12.4 %
Total Executive Search
50,734
51,008
(274)
(0.5) %
24.8 %
25.7 %
On-Demand Talent
1,763
(580)
2,343
NM
3.8 %
(1.4) %
Heidrick Consulting
(1,025)
(2,391)
1,366
57.1 %
(3.7) %
(10.3) %
Total segments
51,472
48,037
3,435
7.2 %
18.5 %
18.3 %
Research and Development
(4,606)
(4,927)
321
6.5 %
(1.7) %
(1.9) %
Global Operations Support
(16,451)
(13,761)
(2,690)
(19.5) %
(5.9) %
(5.2) %
Total Adjusted EBITDA
$ 30,415
$ 29,349
$ 1,066
3.6 %
10.9 %
11.2 %
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)
Nine Months Ended
September 30,
2024
2023
$ Change
% Change
Revenue
Revenue before reimbursements (net revenue)
$ 822,382
$ 773,702
$ 48,680
6.3 %
Reimbursements
12,408
10,090
2,318
23.0 %
Total revenue
834,790
783,792
50,998
6.5 %
Operating expenses
Salaries and benefits
535,330
504,994
30,336
6.0 %
General and administrative expenses
127,556
112,405
15,151
13.5 %
Cost of services
88,158
78,818
9,340
11.9 %
Research and development
17,002
16,746
256
1.5 %
Impairment charges
16,224
7,246
8,978
123.9 %
Restructuring charges
6,939
—
6,939
100.0 %
Reimbursed expenses
12,408
10,090
2,318
23.0 %
Total operating expenses
803,617
730,299
73,318
10.0 %
Operating income
31,173
53,493
(22,320)
(41.7) %
Non-operating income
Interest, net
9,268
7,667
Other, net
3,013
2,537
Net non-operating income
12,281
10,204
Income before income taxes
43,454
63,697
Provision for income taxes
19,750
24,142
Net income
23,704
39,555
Other comprehensive income (loss), net of tax
811
(3,633)
Comprehensive income
$ 24,515
$ 35,922
Weighted-average common shares outstanding
Basic
20,254
19,998
Diluted
21,144
20,716
Earnings per common share
Basic
$ 1.17
$ 1.98
Diluted
$ 1.12
$ 1.91
Salaries and benefits as a % of net revenue
65.1 %
65.3 %
General and administrative expenses as a % of net revenue
15.5 %
14.5 %
Cost of services as a % of net revenue
10.7 %
10.2 %
Research and development as a % of net revenue
2.1 %
2.2 %
Operating margin
3.8 %
6.9 %
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2024
2023
$
Change
%
Change
2024
Margin1
2023
Margin1
Revenue
Executive Search
Americas
$ 418,302
$ 398,210
$ 20,092
5.0 %
Europe
124,706
129,104
(4,398)
(3.4) %
Asia Pacific
72,829
68,766
4,063
5.9 %
Total Executive Search
615,837
596,080
19,757
3.3 %
On-Demand Talent
125,983
111,410
14,573
13.1 %
Heidrick Consulting
80,562
66,212
14,350
21.7 %
Revenue before reimbursements (net revenue)
822,382
773,702
48,680
6.3 %
Reimbursements
12,408
10,090
2,318
23.0 %
Total revenue
$ 834,790
$ 783,792
$ 50,998
6.5 %
Adjusted EBITDA
Executive Search
Americas
$ 130,448
$ 127,557
$ 2,891
2.3 %
31.2 %
32.0 %
Europe
11,215
16,487
(5,272)
(32.0) %
9.0 %
12.8 %
Asia Pacific
10,182
7,901
2,281
28.9 %
14.0 %
11.5 %
Total Executive Search
151,845
151,945
(100)
(0.1) %
24.7 %
25.5 %
On-Demand Talent
(787)
660
(1,447)
NM
(0.6) %
0.6 %
Heidrick Consulting
(4,447)
(6,848)
2,401
35.1 %
(5.5) %
(10.3) %
Total segments
146,611
145,757
854
0.6 %
17.8 %
18.8 %
Research and Development
(14,312)
(15,396)
1,084
7.0 %
(1.7) %
(2.0) %
Global Operations Support
(47,205)
(40,501)
(6,704)
(16.6) %
(5.7) %
(5.2) %
Total Adjusted EBITDA
$ 85,094
$ 89,860
$ (4,766)
(5.3) %
10.3 %
11.6 %
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
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net income
$ 14,829
$ 14,987
$ 23,704
$ 39,555
Adjustments
Impairment charges, net of tax(1)
—
—
14,190
6,038
Earnout fair value adjustment, net of tax(2)(4)
39
—
788
—
Restructuring charges, net of tax(3)(4)
225
—
4,516
—
Total adjustments
264
—
19,494
6,038
Adjusted net income
$ 15,093
$ 14,987
$ 43,198
$ 45,593
Weighted-average common shares outstanding
Basic
20,357
20,076
20,254
19,998
Diluted
21,024
20,553
21,144
20,716
Earnings per common share
Basic
$ 0.73
$ 0.75
$ 1.17
$ 1.98
Diluted
$ 0.71
$ 0.73
$ 1.12
$ 1.91
Adjusted earnings per common share
Basic
$ 0.74
$ 0.75
$ 2.13
$ 2.28
Diluted
$ 0.72
$ 0.73
$ 2.04
$ 2.20
1
The Company recorded goodwill impairment charges of $14.8 million in the On-Demand Talent segment and $1.5 million in the Europe segment for the nine months ended September 30, 2024. The Company recorded a goodwill impairment charge of $7.2 million in the Heidrick Consulting segment for the nine months ended September 30, 2023.
2
The Company recorded a fair value adjustment to increase the On-Demand Talent earnout by $1.1 million and increase the Heidrick Consulting earnout by $0.1 million for the nine months ended September 30, 2024.
3
The Company recorded restructuring charges of $6.9 million for the nine months ended September 30, 2024.
4
Amounts for the three months ended September 30, 2024 reflect the impact of a change to the estimated annual effective tax rate. There were no further impairment charges, earnout fair value adjustments, or restructuring charges recorded during the period.
Heidrick & Struggles International, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30,
2024
December 31,
2023
Current assets
Cash and cash equivalents
$ 363,422
$ 412,618
Marketable securities
46,005
65,538
Accounts receivable, net
186,252
133,128
Prepaid expenses
27,682
23,597
Other current assets
48,928
47,923
Income taxes recoverable
10,795
10,410
Total current assets
683,084
693,214
Non-current assets
Property and equipment, net
53,508
35,752
Operating lease right-of-use assets
83,262
86,063
Assets designated for retirement and pension plans
11,203
11,105
Investments
59,089
47,287
Other non-current assets
25,507
17,071
Goodwill
185,400
202,252
Other intangible assets, net
15,110
20,842
Deferred income taxes
29,617
28,005
Total non-current assets
462,696
448,377
Total assets
$ 1,145,780
$ 1,141,591
Current liabilities
Accounts payable
$ 21,517
$ 20,837
Accrued salaries and benefits
277,498
322,744
Deferred revenue
47,106
45,732
Operating lease liabilities
18,985
21,498
Other current liabilities
23,394
21,823
Income taxes payable
6,891
6,057
Total current liabilities
395,391
438,691
Non-current liabilities
Accrued salaries and benefits
55,338
52,108
Retirement and pension plans
75,048
62,100
Operating lease liabilities
84,623
78,204
Other non-current liabilities
46,158
41,808
Deferred income taxes
5,937
6,402
Total non-current liabilities
267,104
240,622
Total liabilities
662,495
679,313
Stockholders’ equity
483,285
462,278
Total liabilities and stockholders’ equity
$ 1,145,780
$ 1,141,591
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
September 30,
2024
2023
Cash flows – operating activities
Net income
$ 14,829
$ 14,987
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
4,950
4,740
Deferred income taxes
273
(6,994)
Stock-based compensation expense
3,792
3,559
Accretion expense related to earnout payments
478
455
Gain on marketable securities
(1,343)
(346)
Loss on disposal of property and equipment
3
61
Changes in assets and liabilities, net of effects of acquisition:
Accounts receivable
4,135
7,785
Accounts payable
(10,968)
1,257
Accrued expenses
83,375
76,113
Restructuring accrual
(1,396)
—
Deferred revenue
1,836
(2,165)
Income taxes recoverable and payable, net
(5,021)
9,205
Retirement and pension plan assets and liabilities
585
294
Prepaid expenses
595
(1,136)
Other assets and liabilities, net
5,022
1,659
Net cash provided by operating activities
101,145
109,474
Cash flows – investing activities
Acquisition of businesses, net of cash acquired
—
(2,204)
Capital expenditures
6,891
(2,805)
Purchases of marketable securities and investments
(346)
(47,781)
Proceeds from sales of marketable securities and investments
62,496
21,571
Net cash provided by (used in) investing activities
69,041
(31,219)
Cash flows – financing activities
Cash dividends paid
(3,211)
(3,149)
Payment of employee tax withholdings on equity transactions
(53)
—
Acquisition earnout payments
—
(2,038)
Net cash used in financing activities
(3,264)
(5,187)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
6,578
(4,414)
Net increase in cash, cash equivalents and restricted cash
173,500
68,654
Cash, cash equivalents and restricted cash at beginning of period
189,922
217,817
Cash, cash equivalents and restricted cash at end of period
$ 363,422
$ 286,471
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Cash flows – operating activities
Net income
$ 23,704
$ 39,555
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
13,650
13,432
Deferred income taxes
(2,060)
(548)
Stock-based compensation expense
9,901
7,331
Accretion expense related to earnout payments
1,413
1,097
Gain on marketable securities
(2,323)
(2,040)
Loss on disposal of property and equipment
264
192
Impairment charges
16,224
7,246
Changes in assets and liabilities:
Accounts receivable
(51,707)
(52,205)
Accounts payable
(13,292)
(1,657)
Accrued expenses
(41,372)
(197,698)
Restructuring accrual
2,990
—
Deferred revenue
1,163
(1,622)
Income taxes recoverable and payable, net
347
6,617
Retirement and pension plan assets and liabilities
6,385
6,697
Prepaid expenses
(4,057)
(3,771)
Other assets and liabilities, net
(987)
(3,243)
Net cash used in operating activities
(39,757)
(180,617)
Cash flows – investing activities
Acquisition of business, net of cash acquired
—
(37,953)
Capital expenditures
(9,647)
(9,619)
Purchases of marketable securities and investments
(115,608)
(75,464)
Proceeds from sales of marketable securities and investments
129,070
289,689
Net cash provided by investing activities
3,815
166,653
Cash flows – financing activities
Repurchases of common stock
—
(904)
Cash dividends paid
(9,609)
(9,383)
Payment of employee tax withholdings on equity transactions
(3,800)
(4,141)
Acquisition earnout payments
—
(37,984)
Net cash used in financing activities
(13,409)
(52,412)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
155
(2,642)
Net decrease in cash, cash equivalents and restricted cash
(49,196)
(69,018)
Cash, cash equivalents and restricted cash at beginning of period
412,618
355,489
Cash, cash equivalents and restricted cash at end of period
$ 363,422
$ 286,471
Heidrick & Struggles International, Inc.
Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue before reimbursements (net revenue)
$ 278,559
$ 263,160
$ 822,382
$ 773,702
Net income
14,829
14,987
23,704
39,555
Interest, net
(2,570)
(2,505)
(9,268)
(7,667)
Other, net
555
649
(3,013)
(2,537)
Provision for income taxes
6,268
9,006
19,750
24,142
Operating income
19,082
22,137
31,173
53,493
Adjustments
Depreciation
2,997
2,387
7,480
6,563
Intangible amortization
1,953
2,353
6,170
6,869
Earnout accretion
478
455
1,413
1,097
Earnout fair value adjustments
—
—
1,211
—
Acquisition contingent consideration
2,947
3,268
8,220
8,711
Deferred compensation plan
2,958
(1,427)
6,264
2,309
Reorganization costs
—
176
—
3,572
Impairment charges
—
—
16,224
7,246
Restructuring charges
—
—
6,939
—
Total adjustments
11,333
7,212
53,921
36,367
Adjusted EBITDA
$ 30,415
$ 29,349
$ 85,094
$ 89,860
Adjusted EBITDA margin
10.9 %
11.2 %
10.3 %
11.6 %
Heidrick & Struggles International, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Line of Business (Non-GAAP)
(In thousands)
(Unaudited)
Three Months Ended September 30, 2024
Executive
Search
On-Demand
Talent
Heidrick
Consulting
Research &
Development
Global
Operations
Support
Total
Revenue before reimbursements (net
revenue)
$ 204,389
$ 46,231
$ 27,939
$ —
$ —
$ 278,559
Operating income (loss)1
46,270
(2,036)
(2,835)
(5,682)
(16,635)
19,082
Adjustments
Depreciation
1,389
175
227
1,029
177
2,997
Intangible amortization
17
1,560
376
—
—
1,953
Earnout accretion
—
436
42
—
—
478
Acquisition contingent compensation
209
1,628
1,110
—
—
2,947
Deferred compensation plan
2,849
—
55
47
7
2,958
Total adjustments
4,464
3,799
1,810
1,076
184
11,333
Adjusted EBITDA
$ 50,734
$ 1,763
$ (1,025)
$ (4,606)
$ (16,451)
$ 30,415
Adjusted EBITDA margin
24.8 %
3.8 %
(3.7) %
(1.7) %
(5.9) %
10.9 %
Three Months Ended September 30, 2023
Executive
Search
On-Demand
Talent
Heidrick
Consulting
Research &
Development
Global
Operations
Support
Total
Revenue before reimbursements (net
revenue)
$ 198,814
$ 41,053
$ 23,293
$ —
$ —
$ 263,160
Operating income (loss)1
50,290
(4,595)
(4,075)
(5,560)
(13,923)
22,137
Adjustments
Depreciation
1,288
125
156
655
163
2,387
Intangible amortization
40
1,869
444
—
—
2,353
Earnout accretion
—
397
58
—
—
455
Acquisition contingent compensation
649
1,559
1,060
—
—
3,268
Deferred compensation plan
(1,370)
—
(34)
(22)
(1)
(1,427)
Reorganization costs
111
65
—
—
—
176
Total adjustments
718
4,015
1,684
633
162
7,212
Adjusted EBITDA
$ 51,008
$ (580)
$ (2,391)
$ (4,927)
$ (13,761)
$ 29,349
Adjusted EBITDA margin
25.7 %
(1.4 %)
(10.3 %)
(1.9) %
(5.2) %
11.2 %
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 (Loss) to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
Nine Months Ended September 30, 2024
Executive
Search
On-Demand
Talent
Heidrick
Consulting
Research &
Development
Global
Operations
Support
Total
Revenue before reimbursements (net
revenue)
$ 615,837
$ 125,983
$ 80,562
$ —
$ —
$ 822,382
Operating income (loss)1
138,623
(28,580)
(13,207)
(17,002)
(48,661)
31,173
Adjustments
Depreciation
3,493
423
506
2,592
466
7,480
Intangible amortization
54
4,928
1,188
—
—
6,170
Earnout accretion
—
1,251
162
—
—
1,413
Earnout fair value adjustments
—
1,125
86
—
—
1,211
Acquisition contingent compensation
(126)
5,019
3,327
—
—
8,220
Deferred compensation plan
6,028
—
124
98
14
6,264
Impairment charges
1,463
14,761
—
—
—
16,224
Restructuring charges
2,310
286
3,367
—
976
6,939
Total adjustments
13,222
27,793
8,760
2,690
1,456
53,921
Adjusted EBITDA
$ 151,845
$ (787)
$ (4,447)
$ (14,312)
$ (47,205)
$ 85,094
Adjusted EBITDA margin
24.7 %
(0.6 %)
(5.5 %)
(1.7 %)
(5.7) %
10.3 %
Nine Months Ended September 30, 2023
Executive
Search
On-Demand
Talent
Heidrick
Consulting
Research &
Development
Global
Operations
Support
Total
Revenue before reimbursements (net
revenue)
$ 596,080
$ 111,410
$ 66,212
$ —
$ —
$ 773,702
Operating income (loss)1
140,923
(11,821)
(17,877)
(16,746)
(40,986)
53,493
Adjustments
Depreciation
3,928
326
507
1,319
483
6,563
Intangible amortization
145
5,737
987
—
—
6,869
Earnout accretion
—
982
115
—
—
1,097
Acquisition contingent compensation
2,449
4,144
2,118
—
—
8,711
Deferred compensation plan
2,220
—
56
31
2
2,309
Reorganization costs
2,280
1,292
—
—
—
3,572
Impairment charges
—
—
7,246
—
—
7,246
Total adjustments
11,022
12,481
11,029
1,350
485
36,367
Adjusted EBITDA
$ 151,945
$ 660
$ (6,848)
$ (15,396)
$ (40,501)
$ 89,860
Adjusted EBITDA margin
25.5 %
0.6 %
(10.3 %)
(2.0 %)
(5.2 %)
11.6 %
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 to download multimedia:https://www.prnewswire.com/news-releases/heidrick–struggles-reports-third-quarter-2024-results-302295804.html
SOURCE Heidrick & Struggles
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‘Global Top-tier’ KT&G Expands Into Europe full-scale, Starting with Romania
Published
60 mins agoon
November 7, 2024By
SEOUL, South Korea, Nov. 7, 2024 /PRNewswire/ — KT&G (KRX:033780), a global ‘top-tier’ cigarette manufacturer, has begun its expansion into Europe, starting with Romania in April, followed by Portugal, Andorra, and Spain with its representative superslim brand ESSE.
KT&G is South Korea’s leading company holding the No. 1 position in each of its Next Generation Products (NGP), Health Functional Foods, and Combustible Cigarettes (CC) businesses. To further consolidate its position as a global top-tier player, KT&G is accelerating overseas growth in its three core growth business areas, NGP, Health Functional Food, and Global CC.
To this end, KT&G is currently focusing on expanding its global business with subsidiaries or offices in 10 countries around the world, including Europe, Indonesia, Taiwan and Kazakhstan. Last year, the company introduced a company-in-company (CIC) system for each region with the aim of expanding overseas markets more aggressively and expanding local distribution coverage, and is accelerating growth in Eurasia and Asia-Pacific. As of the end of ’23, KT&G sold about 717 brands with 5,184 employees in 143 countries around the world, strengthening its position as a global top-tier company.
In particular, KT&G is expanding direct management from production to marketing and sales by building a localized value chain centered on CICs in each overseas region. To this end, KT&G began construction of a new factory in Almaty, Kazakhstan, last year and has begun construction of the second and third factories in Indonesia, in addition to its existing factories there, speeding up its efforts to secure a global production base. In particular, once the construction of the second and third factories in Indonesia is completed, Indonesia will become the largest overseas production base for KT&G’s business and a key growth engine for achieving its mid- to long-term vision.
The fruits of growth investments for global business expansion efforts are already being realized. Last year, KT&G’s overseas sales of cigarettes reached 53.2 billion pieces, a new record for the company. This year’s second quarter was also the largest quarterly sales quarter, and according to analysts’ forecasts, overseas cigarettes are expected to break the record again in the third quarter.
KT&G is not resting on its laurels, and is preparing for new growth by establishing its status as a “Global Top-tier” company in accordance with the “2027 KT&G Vision,” which was newly established in 2023. KT&G is strengthening its intrinsic competitiveness and structural innovation centered on its three core businesses, and has set ‘50% of sales from overseas business’ and ‘60% of sales from non-tobacco business’ as its main business KPIs for 2027, and is focusing its company-wide capabilities to achieve them. Through this, KT&G plans to surpass the No. 1 ranking in Korea and achieve the Global Top 4.
Logo – https://mma.prnewswire.com/media/2316472/KT_G_Logo.jpg
View original content:https://www.prnewswire.co.uk/news-releases/global-top-tier-ktg-expands-into-europe-full-scale-starting-with-romania-302298230.html
Technology
Big C Teams Up with Vpon to Elevate Tourist Shopping Experience
Published
60 mins agoon
November 7, 2024By
BANGKOK, Nov. 7, 2024 /PRNewswire/ — Big C Supercenter is taking major strides to become the leading destination for tourists seeking Thai souvenirs. Partnering with Vpon AI Big Data Group, a specialist in online-to-offline (O2O) solutions, Big C aims to enhance its reach, particularly in the Chinese market, and solidify its global presence.
Big C’s Strategic Vision:
Leader in Thai Souvenirs: Big C welcomes millions of travellers annually, achieving impressive sales across 5 flagship branches in major cities and 45 convenient locations in secondary destinations. As the top choice for authentic Thai shopping, Big C is committed to delivering a world-class experience for every traveller’s journey.O2O Marketing Focus: With Vpon’s expertise, Big C is building a strong online community in China, driving offline engagement and expanding to other tourist segments next year.WeChat Mini Program: To cater to mainland Chinese customers, Big C has launched a WeChat Mini Program, allowing customers to place orders directly from home in China. Whether they choose doorstep delivery, pick-up at a Big C store, or hotel delivery, this service provides unparalleled convenience, especially for those with limited time.Tailored Offerings: Big C is enhancing its branches with faith-based attractions like the Siva God shrine at Rajdamri, customised product ranges, and multilingual support for a seamless tourist experience.
Promotions and Pricing: Iconic shopping bags and targeted promotions during peak seasons like Chinese New Year and Golden Week will attract and engage tourists.Next Step: Expanding Thai products through platforms like WeChat mini program and promoting Thai culture, attractions, and cuisine via video content in China.
https://youtu.be/6oIMnep8uKs
https://youtu.be/jY41ks1bbgc
Big C kick-started their global digital transformation journey strongly by choosing China as the first destination, and appointed Vpon as the global tourist activation consultant.
Travel Data Tech in Retail: To precisely target Chinese and international tourists, Vpon developed a travel data dashboard uniquely for Big C. Supported by the accumulation of massive data from 900 million mobile devices, the dashboard visualises real-time insights tailored to their business needs. These valuable insights empower Big C to plan data-driven strategies for tourist activation, identifying highly potential customers through a deep understanding of traveller behaviour, preferences, travel trend and pattern.Localised social strategies: To achieve a successful China market entry, Vpon built a localised social image for Big C on mainstream Chinese social channels including Xiaohungshu, Douyin and WeChat, and achieved a viral success of 24 million total impression in just one week for Big C’s golden week promotion, showcasing a successful cultural blend in and community building.O2O strategies: To drive users from online to physical stores, and from stores to online channels, Vpon and Big C developed seasonal campaigns, personalised ad targeting and community engagement by integrating multi-dimensional data, including Big C’s own mobile and e-commerce data, in-store analysis, customer profile, and traveller insight. The actionable items are further tailored to reach individual audiences’ pre-trip, during-trip and after-trip, ensuring a rich brand presence throughout the whole journey.Influencers engagement: With the support of an extensive influencers data dashboard, Big C can analyse and select high-quality influencers around the world in one-click. Vpon has connected Big C with top-tier Xiaohongshu influencers with over 1 million followers, boosting the key words “Big C” and “travelling to Thailand” to the Viral Hot Topic. The strategic influencer marketing strategy successfully imprints Big C as one of the top-of-mind Thailand brands among international tourists.
Vpon AI Big Data Group is a leading big data company providing mobile data solutions with AI-powered technologies. Supported by the accumulation of massive data from 900 million mobile devices and a daily processing rate of 21 billion transborder data, Vpon integrates premium media resources across APAC, providing clients with all-rounded data and AI solutions, including data analytics services, AI-enhanced results, corporate digitalization, brand awareness and cross border marketing solutions etc., providing strong tools to aid clients in raising brand awareness and generate leads through data.
Vpon has obtained ISO 27001 (Information Security Management) and ISO 27701 (Privacy Information Management) Certification, by the British Standard Institution (BSI).
View original content to download multimedia:https://www.prnewswire.com/apac/news-releases/big-c-teams-up-with-vpon-to-elevate-tourist-shopping-experience-302297337.html
SOURCE Vpon Big Data Group
Technology
Alkami Announces Pricing of Secondary Offering of Common Stock by Selling Stockholders
Published
60 mins agoon
November 7, 2024By
PLANO, Texas, Nov. 6, 2024 /PRNewswire/ — Alkami Technology, Inc. (Nasdaq: ALKT) (“Alkami” or the “Company”), a leading cloud-based digital banking solutions provider for financial institutions in the U.S., today announced the pricing of the previously announced underwritten secondary offering (the “Offering”) of an aggregate of 7,500,000 shares of the Company’s common stock to be sold by entities affiliated with General Atlantic (AL), L.P., S3 Ventures Fund III, L.P., George B. Kaiser and Brian R. Smith (collectively, the “Selling Stockholders”). The Offering is expected to close on November 8, 2024, subject to the satisfaction of customary closing conditions. The underwriter has a 30-day option to purchase up to an additional 1,125,000 shares of the Company’s common stock from the Selling Stockholders at the public offering price, less underwriting discounts and commissions.
The Selling Stockholders will receive all of the net proceeds from the Offering. The Company will not sell any shares of its common stock in the Offering and will not receive any of the proceeds from the sale of shares of the Company’s common stock in the Offering.
J.P. Morgan Securities LLC is acting as the underwriter and sole book-running manager for the Offering.
The underwriter may offer the shares of common stock from time to time for sale in one or more transactions on the Nasdaq Global Select Market, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, subject to their right to reject any order in whole or in part.
The Offering is being made pursuant to an automatically effective shelf registration statement on Form S-3, which has been filed by the Company with the Securities and Exchange Commission (the “SEC”) and became effective on August 8, 2024. The Offering is being made only by means of a free writing prospectus, prospectus supplement and accompanying prospectus that form a part of the registration statement. The prospectus supplement and the accompanying prospectus relating to and describing the terms of the Offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the prospectus supplement, when available, and accompanying prospectus relating to the Offering may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.
This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, these securities, in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Alkami
Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for financial institutions in the United States that enables clients to grow confidently, adapt quickly and build thriving digital communities. Alkami helps clients transform through retail and business banking, digital account opening, payment security, and data and marketing solutions.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking” statements relating to the Offering and expected closing date. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. Factors that may materially affect such forward-looking statements include: our limited operating history and history of operating losses; our ability to manage future growth; our ability to attract new clients and retain and expand existing clients’ use of our solutions; the unpredictable and time-consuming nature of our sales cycles; our ability to maintain, protect and enhance our brand; our ability to accurately predict the long-term rate of client subscription renewals or adoption of our solutions; our reliance on third-party software, content and services; our ability to effectively integrate our solutions with other systems used by our clients; intense competition in our industry; any downturn, consolidation or decrease in technology spend in the financial services industry, including as a result of recent closures of certain financial institutions and liquidity concerns at other financial institutions; our ability and the ability of third parties on which we rely to prevent and identify breaches of security measures (including cybersecurity) and resulting disruptions of our systems or operations and unauthorized access to client customer and other data; our ability to successfully integrate acquired companies or businesses; our ability to comply with regulatory and legal requirements and developments; our ability to attract and retain key employees; the political, economic and competitive conditions in the markets and jurisdictions where we operate; our ability to maintain, develop and protect our intellectual property; our ability to respond to evolving technological requirements to develop or acquire new and enhanced products that achieve market acceptance in a timely manner; our ability to estimate our expenses, future revenues, capital requirements, our needs for additional financing and our ability to obtain additional capital; the completion of the Offering; the satisfaction of customary closing conditions related to the Offering; and other factors described in our filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Investor Relations Contact
Steve Calk
ir@alkami.com
Media Relations Contacts
Marla Pieton
marla.pieton@alkami.com
Valerie Kerner
alkami@fullyvested.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/alkami-announces-pricing-of-secondary-offering-of-common-stock-by-selling-stockholders-302298242.html
SOURCE Alkami Technology, Inc.
‘Global Top-tier’ KT&G Expands Into Europe full-scale, Starting with Romania
Big C Teams Up with Vpon to Elevate Tourist Shopping Experience
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