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Heidrick & Struggles Reports Fourth Quarter and 2010 Financial Results

CHICAGO, Feb 22, 2011 (GlobeNewswire via COMTEX) -- Heidrick & Struggles International, Inc. (Nasdaq:HSII), the leadership advisory firm providing executive search and leadership consulting services worldwide, today announced financial results for its fourth quarter and year ended December 31, 2010.

2010 Fourth Quarter Results

Consolidated net revenue of $127.2 million increased 15.8 percent from $109.9 million in the 2009 fourth quarter, or approximately 16 percent on a constant currency basis. Net revenue increased 19.1 percent in the Americas, 7.8 percent in Europe (approximately 14 percent on a constant currency basis), and 19.3 percent in the Asia Pacific region (approximately 13 percent on a constant currency basis). Net revenue from Leadership Consulting Services increased 93.6 percent to $14.0 million and represented 11.0 percent of consolidated net revenue in the quarter.

Operating income in the quarter was $9.3 million and the operating margin (measured as a percentage of net revenue) was 7.3 percent, compared to operating income of $10.5 million and operating margin of 9.6 percent in the 2009 fourth quarter.

The number of executive search and leadership consulting consultants at December 31, 2010 was 347, compared to 359 at December 31, 2009, and 343 at September 30, 2010. Productivity, as measured by annualized net revenue per consultant, was $1.5 million compared to $1.2 million in the 2009 fourth quarter and $1.5 million in the 2010 third quarter. The number of executive search confirmations in the quarter increased 3.1 percent compared to the 2009 fourth quarter, but declined 1.3 percent compared to the 2010 third quarter. The average revenue per executive search was $112,600 compared to $104,900 in the 2009 fourth quarter and $114,200 in the 2010 third quarter.

Consolidated salaries and employee benefits increased 19.1 percent to $82.7 million, from $69.4 million in the comparable quarter of 2009. The increase mostly reflects higher bonus accruals associated with the increase in net revenue, but also includes an increase in base compensation and payroll taxes associated with an 8.3 percent increase in employee headcount as well as the restoration in 2010 of certain salaries and employee benefits that were eliminated in 2009 as part of cost cutting initiatives. Salaries and employee benefits were 65.0 percent of net revenue for the quarter, compared to 63.2 percent in the 2009 fourth quarter.

Consolidated general and administrative expenses increased 16.0 percent to $35.2 million from $30.3 million in the 2009 fourth quarter. The increase reflects a number of initiatives that the company believes will yield cost savings and increase productivity in the future, such as the outsourcing of a portion of its information technology, additional training and development programs, and the development of its proprietary search system. As a percentage of net revenue, consolidated general and administrative expenses remained flat at 27.6 percent relative to the 2009 fourth quarter.

Net income was $5.2 million and diluted earnings per share were $0.29, based upon an effective tax rate in the quarter of 47.3 percent. In the 2009 fourth quarter, net income was $9.4 million and diluted earnings per share were $0.52, which reflected an effective tax rate of 11.4 percent.

Net cash generated by operating activities in the quarter was $60.6 million, compared to $47.3 million in the 2009 fourth quarter. Cash and cash equivalents at December 31, 2010 were $181.1 million, compared to $123.0 million at December 31, 2009, and $122.8 million at September 30, 2010.

  Regional Review


   $ in millions         4Q 10     4Q 09    Change    2010      2009     Change
                        --------  -------  -------  --------  --------  --------
  Americas
   Net revenue            $ 66.5   $ 55.9   $ 10.7   $ 255.7   $ 201.5    $ 54.2
   Operating income       $ 10.2   $ 12.3  $ (2.1)    $ 40.3    $ 18.5    $ 21.8
   Consultants               157      166      (9)

  Europe
   Net revenue            $ 34.9   $ 32.4    $ 2.5   $ 127.3   $ 119.4     $ 7.8
   Operating income
    (loss)                 $ 4.3    $ 1.9    $ 2.5   $ (0.6)     $ 2.7   $ (3.3)
   Consultants               116      116        0

  Asia Pacific
   Net revenue            $ 25.8   $ 21.6    $ 4.2   $ 110.1    $ 74.7    $ 35.5
   Operating income        $ 6.3    $ 4.0    $ 2.3    $ 24.5     $ 9.5    $ 15.1
   Consultants                74       77      (3)

  Global Operations
   Support              $ (11.5)  $ (8.0)  $ (3.5)  $ (46.1)  $ (32.4)  $ (13.8)
  Restructuring
   charges                  $ --  $ (1.3)    $ 1.3   $ (1.6)  $ (26.7)    $ 25.1
  Other operating
   income                   $ --    $ 1.7  $ (1.7)     $ 1.1     $ 1.7   $ (0.6)
                        --------  -------  -------  --------  --------  --------
  Total operating
   income (loss)           $ 9.3   $ 10.5  $ (1.2)    $ 17.5  $ (26.7)    $ 44.2
                        --------  -------  -------  --------  --------  --------

  Totals and subtotals may not equal the sum of individual
   line items due to rounding.

The Americas reported a 19.1 percent year-over-year increase in fourth quarter net revenue driven by strong growth in the Industrial and Global Technology & Services practices, as well as in Leadership Consulting Services. Fourth quarter operating income declined 16.9 percent year-over-year and the operating margin was 15.4 percent. Net revenue in the 2010 fourth quarter was essentially the same as in the 2010 third quarter.

Europe's fourth quarter net revenue increased 7.8 percent year-over-year (approximately 14 percent on a constant currency basis) driven by especially strong performance in Leadership Consulting Services. Operating income increased 134.1 percent and the operating margin improved to 12.5 percent. Compared to the 2010 third quarter, net revenue increased 25.2 percent.

The Asia Pacific region reported a 19.3 percent year-over-year increase in fourth quarter net revenue (approximately 13 percent on a constant currency basis) driven by especially strong growth in the Industrial and Education & Social Enterprise practice groups, as well as from Leadership Consulting Services. Operating income increased 57.7 percent and the operating margin improved to 24.5 percent. Compared to the 2010 third quarter, net revenue decreased 18.4 percent.

Expenses related to Global Operations Support of $11.5 million increased from $8.0 million in the 2009 fourth quarter. The increase reflects the restoration of certain salaries and employee benefits in 2010 that were eliminated in 2009 as part of cost cutting initiatives, professional services fees, severance, and search and corporate support previously provided primarily through the regions.

2010 Results

For the year ended December 31, 2010, consolidated net revenue of $493.1 million increased 24.6 percent from $395.7 million in 2009, or approximately 23 percent on a constant currency basis. Net revenue increased 26.9 percent in the Americas region, 6.6 percent in Europe (approximately 9 percent on a constant currency basis), and 47.5 percent in Asia Pacific (approximately 39 percent on a constant currency basis). Net revenue from Leadership Consulting Services increased 52.7 percent to $39.6 million, representing 8.0 percent of total net revenue in 2010.

There were 4,181 confirmed executive searches in 2010, a 14.5 percent increase compared to 2009. Productivity, as measured by 2010 net revenue per consultant, increased to $1.4 million, compared to $1.0 million in 2009, and the average fee per executive search increased to $108,500 compared to $101,000 in 2009.

Operating income was $17.5 million (inclusive of $1.6 million of restructuring charges) and the operating margin was 3.6 percent. This compares to an operating loss of $26.7 million for the year ended December 31, 2009 (which included $26.7 million of restructuring and impairment charges). Net income in 2010 was $7.5 million and diluted earnings per share were $0.42, reflecting an effective tax rate of 55.8 percent. The reported net loss in 2009 was $20.9 million and the net loss per share was $1.24, reflecting an effective tax benefit rate of 29.6 percent.

Commenting on 2010 results Chief Executive Officer L. Kevin Kelly said, "Following the historic drop in our business in 2009, we achieved a number of significant improvements in 2010. Search confirmations were up 15%, consolidated net revenue increased 25%, Leadership Consulting Services revenue increased 53%, and we achieved near-record consultant productivity levels. To improve our competitiveness and better position us for future growth, we invested heavily in hiring, development, and retention initiatives, as well as our business processes. These investments weighed on our margins, as did challenges we faced in Europe. However, our business in Europe is beginning to show improvement and we are confident that the investments we are making further position us as an integrated provider of leadership advisory services."

2011 Outlook

The company expects that 2011 first quarter net revenue will be between $122 million and $128 million and that full year 2011 net revenue will be between $515 million and $545 million. The company is currently forecasting a 2011 first quarter operating margin of between 1 and 5 percent and a full year 2011 operating margin of between 6 and 10 percent. Net income and earnings per share in 2011 are expected to reflect a full-year effective tax rate of between 42 percent and 50 percent, but will be impacted by country-level results.

Kelly added, "There are still mixed assessments of economic prospects around the world, but we expect growth in each of our regions, industry practice groups, and Leadership Consulting Services in 2011. Twenty-two new consultants have started to date in 2011 and we continue to recruit. We are delivering integrated solutions to our clients that address their leadership challenges. Simply put, Heidrick & Struggles is the leadership advisory firm helping the world be better led."

Quarterly Conference Call

Executives of Heidrick & Struggles will host a conference call to review the fourth quarter and 2010 results today, February 22, at 9:00 am Central time. Participants may access the company's call and supporting slides through the internet at www.heidrick.com. 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 International, Inc., (Nasdaq:HSII) is the leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment, talent retention management, executive development, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles leadership experts operate from principal business centers around the world. For more information about Heidrick & Struggles, please visit www.heidrick.com.

Safe Harbor Statement

This press release contains forward-looking statements. 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," "projects," "forecasts," and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. Factors that may affect the outcome of the forward-looking statements include, among other things: our ability to attract and retain qualified executive search consultants; further declines in the global economy and our ability to execute successfully through business cycles; the timing, speed or robustness of any future economic recovery; social or political instability in markets where we operate; the impact of foreign currency exchange rate fluctuations; price competition; the ability to forecast, on a quarterly basis, variable compensation accruals that ultimately are determined based on the achievement of annual results; our ability to realize our tax losses; the timing of the establishment or reversal of valuation allowance on deferred tax assets; the mix of profit and loss by country; an impairment of our goodwill and other intangible assets; delays in the development and/or implementation of new technology and systems; and the ability to meet and achieve the expected savings resulting from cost-reduction initiatives and restructuring activities. Our reports filed with the U.S. Securities and Exchange Commission also include information on factors that may affect the outcome of forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

                     Heidrick & Struggles International, Inc.
                       Consolidated Statements of Operations
                       (In thousands, except per share data)


                                        Three Months Ended
                                          December 31,
                                     -----------------------

                                                                            %
                                        2010         2009      $ Change   Change
                                     -----------  ----------  ---------  -------
                                     (Unaudited)
  Revenue:
   Revenue before reimbursements
    (net revenue)                      $ 127,223   $ 109,872   $ 17,351    15.8%

   Reimbursements                          5,771       5,255        516
                                     -----------  ----------  ---------     9.8%
     Total revenue                       132,994     115,127     17,867    15.5%

  Operating expenses:
   Salaries and employee benefits         82,729      69,435     13,294    19.1%
   General and administrative
    expenses                              35,167      30,311      4,856    16.0%
   Reimbursed expenses                     5,771       5,255        516     9.8%
   Restructuring and impairment
    charges                                   --       1,281    (1,281)  -100.0%

   Other operating income                     --     (1,661)      1,661
                                     -----------  ----------  ---------

     Total operating expenses            123,667     104,621     19,046
                                     -----------  ----------  ---------    18.2%
     Operating income                      9,327      10,506    (1,179)   -11.2%

  Non-operating income:
   Interest income, net                      240         289

   Other, net                                272       (215)
                                     -----------  ----------
     Net non-operating income                512          74

  Income before income taxes               9,839      10,580

  Provision for income taxes               4,656       1,202


  Net income                             $ 5,183     $ 9,378
                                     ===========  ==========


  Basic weighted average common
   shares outstanding                     17,548      17,070
  Diluted weighted average common
   shares outstanding                     17,893      17,958
  Basic earnings per common share         $ 0.30      $ 0.55
  Diluted earnings per common share       $ 0.29      $ 0.52
  Salaries and employee benefits as
   a percentage of net revenue             65.0%       63.2%
  General and administrative
   expense as a percentage of net
   revenue                                 27.6%       27.6%
  Operating income as a percentage
   of net revenue                           7.3%        9.6%
  Effective tax rate                       47.3%       11.4%

                       Heidrick & Struggles International, Inc.
                                 Segment Information
                                   (In thousands)
                                     (Unaudited)


                                      Three Months Ended December 31,
                         ----------------------------------------------------------
                                                                      2010    2009

                                                                %    Margin  Margin
                            2010        2009      $ Change   Change     *       *
                         ----------  ----------  ----------  ------  ------  ------
  Revenue:
    Americas               $ 66,513    $ 55,861    $ 10,652   19.1%
    Europe                   34,879      32,366       2,513    7.8%

    Asia Pacific             25,831      21,645       4,186
                         ----------  ----------  ----------   19.3%
     Revenue before
      reimbursements
      (net revenue)         127,223     109,872      17,351   15.8%

    Reimbursements            5,771       5,255         516
                         ----------  ----------  ----------    9.8%

     Total revenue        $ 132,994   $ 115,127    $ 17,867
                         ==========  ==========  ==========   15.5%


  Operating income
   (loss):
    Americas               $ 10,215    $ 12,298   $ (2,083)  -16.9%   15.4%   22.0%
    Europe                    4,344       1,856       2,488  134.1%   12.5%    5.7%

    Asia Pacific              6,316       4,004       2,312
                         ----------  ----------  ----------   57.7%   24.5%   18.5%
     Total regions           20,875      18,158       2,717   15.0%   16.4%   16.5%
    Global Operations
     Support               (11,548)     (8,032)     (3,516)
                         ----------  ----------  ----------  -43.8%
       Operating income
        before
        restructuring
        and
       impairment
        charges and
        other operating
        income                9,327      10,126       (799)   -7.9%    7.3%    9.2%
    Restructuring and
     impairment charges          --     (1,281)       1,281
   Other operating
    income                       --       1,661     (1,661)
                         ----------  ----------  ----------

       Operating income     $ 9,327    $ 10,506   $ (1,179)
                         ==========  ==========  ==========  -11.2%    7.3%    9.6%

       * Margin based on revenue before reimbursements (net revenue).

                         Heidrick & Struggles International, Inc.
                          Consolidated Statements of Operations
                          (In thousands, except per share data)


                                               Twelve Months Ended
                                                  December 31,
                                            ------------------------

                                                                                    %
                                               2010         2009       $ Change  Change
                                            -----------  -----------  ---------  ------
                                            (unaudited)
  Revenue:
   Revenue before reimbursements (net
    revenue)                                  $ 493,091    $ 395,651   $ 97,440   24.6%

   Reimbursements                                20,145       19,067      1,078
                                            -----------  -----------  ---------    5.7%
     Total revenue                              513,236      414,718     98,518   23.8%

  Operating expenses (income):
   Salaries and employee benefits               340,178      281,545     58,633   20.8%
   General and administrative expenses          130,622      115,758     14,864   12.8%
   Other charges                                  4,218           --      4,218
   Reimbursed expenses                           20,145       19,067      1,078    5.7%
   Restructuring and impairment charges           1,621       26,720   (25,099)

   Other operating income                       (1,072)      (1,661)        589
                                            -----------  -----------  ---------

     Total operating expenses                   495,712      441,429     54,283
                                            -----------  -----------  ---------   12.3%
     Operating income (loss)                     17,524     (26,711)     44,235  165.6%

  Non-operating income (expense):
   Interest income, net                             813        1,201

   Other, net                                   (1,389)      (4,189)
                                            -----------  -----------
     Net non-operating expense                    (576)      (2,988)

  Income (loss) before income taxes              16,948     (29,699)

  Provision for (benefit from) income
   taxes                                          9,455      (8,791)
                                            -----------  -----------


  Net income (loss)                             $ 7,493   $ (20,908)
                                            ===========  ===========


  Basic weighted average common shares
   outstanding                                   17,437       16,901
  Diluted weighted average common shares
   outstanding                                   17,869       16,901
  Basic earnings (loss) per common share         $ 0.43     $ (1.24)
  Diluted earnings (loss) per common share       $ 0.42     $ (1.24)
  Salaries and employee benefits as a
   percentage of net revenue                      69.0%        71.2%
  General and administrative expense as a
   percentage of net revenue                      26.5%        29.3%
  Operating income as a percentage of net
   revenue                                         3.6%          n/a
  Effective tax rate                              55.8%        29.6%

                         Heidrick & Struggles International, Inc.
                                   Segment Information
                                     (In thousands)
                                       (Unaudited)


                                         Twelve Months Ended December 31,
                            -----------------------------------------------------------
                                                                          2010    2009

                                                                   %     Margin  Margin
                               2010        2009       $ Change   Change     *       *
                            ----------  -----------  ---------  -------  ------  ------
  Revenue:
    Americas                 $ 255,690    $ 201,530   $ 54,160    26.9%
    Europe                     127,267      119,441      7,826     6.6%

    Asia Pacific               110,134       74,680     35,454
                            ----------  -----------  ---------    47.5%
     Revenue before
      reimbursements (net
      revenue)                 493,091      395,651     97,440    24.6%

    Reimbursements              20,145       19,067      1,078
                            ----------  -----------  ---------     5.7%

     Total revenue           $ 513,236    $ 414,718   $ 98,518
                            ==========  ===========  =========    23.8%


  Operating income (loss):
    Americas                  $ 40,307     $ 18,509   $ 21,798   117.8%   15.8%    9.2%
    Europe                       (604)        2,741    (3,345)  -122.0%            2.3%

    Asia Pacific                24,517        9,457     15,060
                            ----------  -----------  ---------   159.2%   22.3%   12.7%
     Total regions              64,220       30,707     33,513   109.1%   13.0%    7.8%
    Global Operations
     Support                  (46,147)     (32,359)   (13,788)
                            ----------  -----------  ---------   -42.6%
       Operating income
        (loss) before
        restructuring and
       impairment charges
        and other
        operating income        18,073      (1,652)     19,725  1194.0%
    Restructuring and
     impairment charges        (1,621)     (26,720)     25,099

   Other operating income        1,072        1,661      (589)
                            ----------  -----------  ---------
       Operating income
        (loss)                $ 17,524   $ (26,711)   $ 44,235
                            ==========  ===========  =========   165.6%    3.6%
                            `
       * Margin based on revenue before reimbursements (net revenue).

        Heidrick & Struggles International, Inc.
               Consolidated Balance Sheets
                     (In thousands)


                                December     December
                                   31,         31,
                                  2010         2009
                               -----------  ----------
                               (Unaudited)
  Current assets:
   Cash and cash equivalents     $ 181,124   $ 123,030
   Restricted cash                     393       2,402
   Accounts receivable, net         83,360      64,224
   Other receivables                 7,724       7,964
   Prepaid expenses                 15,323      15,916
   Other current assets              1,871       1,693
   Income taxes recoverable         11,912      15,649

   Deferred income taxes            10,759      10,576
                               -----------  ----------

     Total current assets          312,466     241,454
                               -----------  ----------

  Non-current assets:
   Property and equipment,
    net                             34,406      26,092
   Restricted cash                   1,609       2,250
   Assets designated for
    retirement and pension
    plans                           23,647      25,502
   Investments                      11,021      10,417
   Other non-current assets          8,593       6,843
   Goodwill                        109,888     109,010
   Other intangible assets,
    net                              6,480       8,636

   Deferred income taxes            36,917      44,643
                               -----------  ----------

     Total non-current assets      232,561     233,393
                               -----------  ----------


  Total assets                   $ 545,027   $ 474,847
                               -----------  ----------

  Current liabilities:
   Accounts payable                $ 8,408     $ 5,948
   Accrued salaries and
    employee benefits              124,969      65,096
   Other current liabilities        34,064      37,812
   Income taxes payable              3,208       3,070

   Deferred income taxes             1,807       1,867
                               -----------  ----------
     Total current
      liabilities                  172,456     113,793
                               -----------  ----------

  Non-current liabilities:
   Retirement and pension
    plans                           30,907      31,687
   Other non-current
    liabilities                     47,015      38,476

   Deferred income taxes               107          39
                               -----------  ----------
     Total non-current
      liabilities                   78,029      70,202
                               -----------  ----------


  Stockholders' equity             294,542     290,852
                               -----------  ----------

  Total liabilities and
   stockholders' equity          $ 545,027   $ 474,847
                               -----------  ----------

               Heidrick & Struggles International, Inc.
                Consolidated Statements of Cash Flows
                           (In thousands)


                                               Three Months Ended
                                                 December 31,
                                            -----------------------

                                               2010         2009
                                            -----------  ----------
                                            (Unaudited)


  Cash flows from operating activities:
   Net income                                   $ 5,183     $ 9,378
   Adjustments to reconcile net income to
    net cash provided by operating
    activities:
     Depreciation and amortization                2,260       2,905
     Deferred income taxes                        3,942     (3,893)
     Net realized and unrealized losses on
      investments                                   492         223
     Stock-based compensation expense             1,738       3,989
     Other operating income                          --     (1,661)
     Impairment charge                               --         231
     Restructuring charges                           --       1,050
     Cash paid for restructuring charges          (621)     (1,581)
     Changes in assets and liabilities,
      net of effects of acquisitions:
      Trade and other receivables                30,519      12,136
      Accounts payable                          (2,472)       (414)
      Accrued expenses                           14,141      15,267
      Income taxes recoverable, net               2,409       3,720
      Retirement and pension assets and
       liabilities                              (1,362)       2,097
      Prepayments                                 4,384       5,953

      Other assets and liabilities, net            (14)     (2,090)
                                            -----------  ----------
       Net cash provided by operating
        activities                               60,599      47,310
                                            -----------  ----------

  Cash flows from investing activities:
   Restricted cash                                (142)       5,541
   Capital expenditures                         (1,498)     (2,221)

   Other, net                                        --          72
                                            -----------  ----------
       Net cash provided by (used in)
        investing activities                    (1,640)       3,392
                                            -----------  ----------

  Cash flows from financing activities:
   Cash dividends paid                          (2,329)     (2,269)
   Payment of employee tax withholdings on
    equity transactions                            (16)       (269)
                                            -----------  ----------
       Net cash used in financing
        activities                              (2,345)     (2,538)
                                            -----------  ----------

  Effect of exchange rate fluctuations on
   cash and cash equivalents                      1,747       (428)
                                            -----------  ----------

  Net increase in cash and cash
   equivalents                                   58,361      47,736
  Cash and cash equivalents at beginning
   of period                                    122,763      75,294
                                            -----------  ----------
  Cash and cash equivalents at end of
   period                                     $ 181,124   $ 123,030
                                            ===========  ==========

                Heidrick & Struggles International, Inc.
                 Consolidated Statements of Cash Flows
                             (In thousands)


                                                 Twelve Months Ended
                                                    December 31,
                                              ------------------------

                                                 2010         2009
                                              -----------  -----------
                                              (Unaudited)
  Cash flows from operating activities:
   Net income (loss)                              $ 7,493   $ (20,908)
   Adjustments to reconcile net income (loss) to net cash provided by
   (used in) operating activities:
     Depreciation and amortization                 11,584       11,265
     Write-off of investment                           --        2,977
     Write-off of software development
      project                                          --        1,329
     Deferred income taxes                          7,093     (10,107)
     Net realized and unrealized losses on
      investments                                   1,509        2,054
     Stock-based compensation expense               7,765       19,016
     Other operating income                       (1,072)      (1,661)
     Impairment charge                                 --        4,080
     Restructuring charges                          1,621       22,640
     Cash paid for restructuring charges          (3,439)     (25,020)
     Changes in assets and liabilities, net
      of effects of acquisitions:
      Trade and other receivables                (17,211)        7,786
      Accounts payable                              2,203        (566)
      Accrued expenses                             65,162     (86,708)
      Income taxes recoverable (payable),
       net                                          3,726      (4,848)
      Retirement and pension assets and
       liabilities                                (1,237)        2,097
      Prepayments                                     672        4,397

      Other assets and liabilities, net           (2,329)        (552)
                                              -----------  -----------
       Net cash provided by (used in)
        operating activities                       83,540     (72,729)
                                              -----------  -----------

  Cash flows from investing activities:
   Restricted cash                                  2,620        5,058
   Acquisition of businesses, net of cash
    acquired                                        (554)     (15,453)
   Capital expenditures                          (17,564)     (12,274)
   Purchases of equity method investments              --      (1,300)

   Other, net                                          --           90
                                              -----------  -----------

       Net cash used in investing activities     (15,498)     (23,879)
                                              -----------  -----------

  Cash flows from financing activities:
   Proceeds from stock options exercised               --        1,238
   Cash dividends paid                            (9,696)      (9,332)
   Payment of employee tax withholdings on
    equity transactions                           (4,585)      (3,386)
                                              -----------  -----------

       Net cash used in financing activities     (14,281)     (11,480)
                                              -----------  -----------

  Effect of exchange rate fluctuations on
   cash and cash equivalents                        4,333      (3,413)
                                              -----------  -----------

  Net increase (decrease) in cash and cash
   equivalents                                     58,094    (111,501)
  Cash and cash equivalents at beginning of
   period                                         123,030      234,531
                                              -----------  -----------

  Cash and cash equivalents at end of period    $ 181,124    $ 123,030
                                              ===========  ===========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Heidrick & Struggles International, Inc.

CONTACT: Investors & Analysts:
Julie Creed, Vice President, Investor Relations

& Real Estate:
+1 312 496 1774 or jcreed@heidrick.com

Media:
Wendi Taylor Nations, Senior Vice President, Chief Marketing Officer:
+1 312 496 1810 or wtaylornations@heidrick.com


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