Heidrick & Struggles Reports Second Quarter 2014 Financial Results
Heidrick & Struggles International, Inc., a provider of senior-level executive search, culture shaping and leadership consulting services, has announced the financial results for its second quarter ended June 30, 2014.
Consolidated net revenue (revenue before reimbursements) increased 11.5 percent, or $14.0 million, to $136.1 million from $122.0 million in the 2013 second quarter.
Executive Search and Leadership Consulting net revenue increased 8.7 percent year over year, or $10.1 million, to $126.7 million. The increase was driven by a 34.0 percent increase in Europe (approximately 25 percent on a constant currency basis), and a 3.4 percent increase in the Americas. Revenue from Asia Pacific in the 2014 second quarter was essentially unchanged compared to the prior year quarter (increased approximately 2 percent on a constant currency basis). From a global practices perspective, the Consumer Markets, Financial Services and Global Technology and Services industry practices, three of the firm's four largest, were the primary drivers of year-over-year growth.
Net revenue from Culture Shaping services increased 71.9 percent, or $3.9 million, to $9.4 million from $5.4 million in the 2013 second quarter. Exchange rate fluctuations positively impacted net revenue by $0.1 million, or about 2 percent. Reported results in the 2013 second quarter excluded $1.5 million of pre-acquisition deferred revenue that the company was unable to recognize related to Senn Delaney as a result of purchase accounting.
The company ended the second quarter with 311 Executive Search and Leadership Consulting consultants compared to 303 at March 31, 2014 and 315 at June 30, 2013. Productivity, as measured by annualized net revenue per consultant, increased to $1.6 million compared to $1.5 million in the 2013 second quarter. Specific to Executive Search, the company's primary business, the number of confirmed searches increased 3.5 percent compared to the 2013 second quarter and the average revenue per executive search grew to $117,400 from $108,800 in the 2013 second quarter.
"Our second quarter results reflect year-over-year and sequential improvements in almost all of our operating segments and key metrics," said Tracy R. Wolstencroft, Heidrick and Struggles' President and Chief Executive Officer. "We are encouraged by the progress and by the continued growth in our consultant base since the beginning of the year. At the same time, we recognize there is still much work to be done to deliver a fully integrated service platform to our clients and to improve our financial performance."
The company is forecasting 2014 third quarter consolidated net revenue of between $123 million and $133 million. Among other factors, this forecast reflects assumptions for the anticipated volume of new Executive Search confirmations, Leadership Consulting assignments, expectations for Culture Shaping services, the current backlog, consultant productivity, consultant retention, the seasonality of its business, the global economic climate and for no change in future currency rates.
Mr Wolstencroft commented: "Our year-to-date results provide a stable foundation to pursue our growth strategy as a fully integrated leadership solutions provider. We are committed to investing in our people and in our client relationships in order to grow revenue and enhance shareholder value."
search-consult is published by Dillistone Systems, supplier of FileFinder Executive Search software. Dillistone Systems is part of Dillistone Group Plc, as are Voyager Recruitment Software and FCP Internet, supplier of the Evolve Recruitment Software SaaS system.