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Heidrick & Struggles Reports Second Quarter 2015 Financial Results

CHICAGO, July 28, 2015 /PRNewswire/ -- Heidrick & Struggles International, Inc. (Nasdaq: HSII), a premier provider of senior-level executive search, leadership consulting and culture shaping services globally, today announced financial results for its second quarter ended June 30, 2015. 

Consolidated net revenue (revenue before reimbursements) declined 2.2 percent, or $3.1 million, to $133.0 million from $136.1 million in the 2014 second quarter.  Excluding the impact of exchange rate fluctuations which negatively impacted results by $6.9 million, or 5.0 percent, consolidated net revenue increased $3.8 million or 2.8 percent.

Executive Search and Leadership Consulting net revenue declined 1.6 percent year over year, or $2.1 million, to $124.7 million.  Excluding the impact of exchange rate fluctuations which negatively impacted results by $6.8 million, or 5.3 percent, consolidated net revenue increased $4.7 million or 3.7 percent.  The decline was driven by a 22.8 percent year-over-year decline in Europe (10.6 percent decline on a constant currency basis).  Net revenue in the Americas increased 7.6 percent (9.1 percent increase on a constant currency basis) and declined in Asia Pacific 1.1 percent (an increase of 6.6 percent on a constant currency basis).  From a global practices perspective, year-over-year growth from the Healthcare & Life Sciences and Financial Services practices was offset by declines in the other practices.

Net revenue from Culture Shaping services declined 10.5 percent, or $1.0 million, to $8.4 million from $9.4 million in the 2014 second quarter, primarily reflecting the timing of project executions and the recognition of revenue.  The impact of exchange rate fluctuations negatively impacted results by less than one percent.

"On a constant currency basis, net revenue in the Americas grew 9 percent and in Asia Pacific grew almost 7 percent," said Tracy R. Wolstencroft, Heidrick & Struggles' President and Chief Executive Officer.  "Results from Europe were disappointing, with a decline in revenue that was doubled by the negative impact of currency fluctuations.  Improving our business in Europe is a high management priority."   

The company ended the second quarter with 325 Executive Search and Leadership Consulting consultants compared to 311 at June 30, 2014 and 323 at March 31, 2015.  Productivity, as measured by annualized Executive Search and Leadership Consulting net revenue per consultant, was $1.5 million in the 2015 second quarter, compared to $1.6 million in the 2014 second quarter.  Specific to Executive Search, the company's largest business, the number of confirmed searches in the 2015 second quarter increased 3.0 percent compared to the 2014 second quarter, while the average revenue per executive search was $109,700 compared to $117,400 in the 2014 second quarter, predominantly as a result of currency rate fluctuations.

Salaries and employee benefits expense in the 2015 second quarter declined 1.5 percent, or $1.4 million, to $90.7 million from $92.1 million in the 2014 second quarter.  Variable compensation expense declined $2.3 million primarily related to company performance, as well as the impact of foreign exchange rate fluctuations.  Fixed compensation expense increased $0.9 million, mostly related to the increase in headcount, partially offset by the impact of foreign exchange rate fluctuations.  Salaries and employee benefits expense was 68.2 percent of net revenue for the quarter, compared to 67.7 percent in the 2014 second quarter. 

General and administrative expenses increased 5.5 percent, or $1.7 million, to $33.2 million from $31.5 million in the 2014 second quarter.  The increase primarily reflects the expense related to three regional meetings held in the third quarter and higher professional services incurred primarily for legal fees associated with employee and compensation matters.  The increase in general and administrative expenses was partially offset by the impact of foreign exchange rate fluctuations. As a percentage of net revenue, general and administrative expenses were 24.9 percent compared to 23.1 percent in the 2014 second quarter. 

Adjusted EBITDA(1)  in the 2015 second quarter was $14.0 million compared to $18.9 million in the 2014 second quarter.  The Adjusted EBITDA margin (Adjusted EBITDA as a percentage of net revenue) in the 2015 second quarter was 10.5 percent, compared to 13.9 percent in the 2014 second quarter.  The year-over-year declines reflect lower net revenue and an increase in general and administrative expenses, partially offset by the decline in salaries and employee benefits expense. 

Operating income in the 2015 second quarter declined $3.3 million to $9.2 million, and operating margin (operating income as a percentage of net revenue) was 6.9 percent.  This compares to operating income of $12.5 million and operating margin of 9.2 percent in the 2014 second quarter. 

Net income in the 2015 second quarter was $5.0 million and diluted earnings per share were $0.27, based on an effective tax rate of 45.6 percent in the quarter and a full-year projected tax rate of approximately 45 percent.   In the 2014 second quarter, the company reported net income of $3.8 million and diluted earnings per share of $0.21 based on an effective tax rate of 70.3 percent in the quarter and a full-year projected tax rate of approximately 73 percent. 

Net cash provided by operating activities in the 2015 second quarter was $24.6 million, compared to $29.9 million in the 2014 second quarter.   Cash and cash equivalents at June 30, 2015 were $119.9 million ($93.4 million net of debt) compared to $123.4 million at June 30, 2014 ($90.9 million net of debt) and $107.6 million at March 31, 2015 ($79.6 million net of debt).

Six Months Results

For the six months ended June 30, 2015 consolidated net revenue of $248.2 million increased 0.4 percent, or $1.0 million, from $247.2 million in the first six months of 2014.  Excluding the impact of exchange rate fluctuations which negatively impacted results by $11.8 million, or 4.8 percent, consolidated net revenue increased $12.8 million or 5.2 percent.

(1) Adjusted EBITDA refers to earnings before interest, taxes, depreciation, intangible amortization, stock-based compensation expense, compensation expense associated with Senn Delaney retention awards, earn-out accretion expense related to acquisitions, restructuring charges, and other non-operating income (expense).  Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures which the company believes are useful to management and meaningful to investors because they provide insight into the ongoing operating results of the company's core business.  A reconciliation to the most directly comparable GAAP measures are provided on the last page of the financial statements in this release.

Executive Search and Leadership Consulting net revenue was $231.7 million, essentially unchanged from $231.3 million in the first six months of 2014.  Excluding the impact of exchange rate fluctuations which negatively impacted results by $11.6 million, or 5.0 percent, consolidated net revenue increased $12.0 million or 5.2 percent.  Revenue growth in the Americas of 9.6 percent (approximately 11 percent on a constant currency basis) and in Asia Pacific of 4.0 percent (approximately 11 percent on a constant currency basis) was mostly offset by a decline in Europe of 23.8 percent (approximately 12 percent on a constant currency basis).    From a global practices perspective, growth in the Financial Services, Healthcare & Life Sciences and Industrial practices was mostly offset by declines in the other practices.

Net revenue from Culture Shaping services increased 3.9 percent, or $0.6 million, to $16.5 million from $15.9 million in the second six months of 2014.  Exchange rate fluctuations negatively impacted net revenue by $0.2 million, or about 1 percent. 

Productivity, as measured by annualized Executive Search and Leadership Consulting net revenue per consultant, was $1.5 million for the first six months of 2015, unchanged from the first six months of 2014.  The number of executive searches confirmed in the first six months of 2014 increased 2.5 percent and the average revenue per executive search was $106,300 compared to $109,500 for the same period in 2014, reflecting the negative impact of current rate fluctuations. 

Adjusted EBITDA(1)  for the first six months of 2015 improved to $26.3 million and Adjusted EBITDA margin was 10.6 percent, compared to Adjusted EBITDA of $24.8 million and Adjusted EBITDA margin of 10.1 percent for the same period of 2014. Operating income for the first six months of 2015 improved to $15.8 million and operating margin was 6.4 percent compared to operating income of $13.3 million and operating margin of 5.4 percent for the first six months of 2014.

Net income for the first six months of 2015 was $8.4 million and diluted earnings per share were $0.45, reflecting an effective tax rate of 46.4 percent.  Net income for the first six months of 2014 was $3.0 million and diluted earnings per share were $0.17, reflecting an effective tax rate of 77.0 percent.  In addition to the valuation allowance established in the 2014 second quarter, the effective tax rate in 2014 was higher than the statutory rate because of losses incurred that could not be benefitted for tax purposes due to valuation allowances in certain jurisdictions.

Third Quarter 2015 Outlook

The company is forecasting third quarter 2015 consolidated net revenue of between $130 million and $140 million. This forecast is based on the average currency rates in June 2015 and reflects, among other factors, management's assumptions for the anticipated volume of new Executive Search confirmations, Leadership Consulting assignments and Culture Shaping services, the current backlog, consultant productivity, consultant retention, and the seasonality of its business.

"We continue to grow and improve the talent base within our firm," Wolstencroft said. "We are investing capital to fill targeted industry practice and geographic gaps in order to provide increasing value to our clients as a trusted leadership advisory firm."

Quarterly Conference Call

Executives of Heidrick & Struggles will host a conference call to review its second quarter 2015 results today, July 28, at 9 a.m. Central Time. Participants may access the company's call and supporting slides through its website 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 (Nasdaq: HSII) serves the executive talent and leadership needs of the world's top organizations as the premier provider of leadership consulting, culture shaping and senior-level executive search services. Heidrick & Struggles pioneered the profession of executive search more than 60 years ago. Today, the firm serves as a trusted advisor, providing integrated leadership solutions and helping its clients change the world, one leadership team at a time. www.heidrick.com.

Non-GAAP Financial Measures

This earnings release contains 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. Pursuant to the requirements of Regulation G, this earnings release contains the most directly comparable GAAP financial measure to the non-GAAP financial measure.

The non-GAAP financial measures used within this earnings release are Adjusted EBITDA and Adjusted EBITDA margin.  Adjusted EBITDA refers to earnings before interest, taxes, depreciation, intangible amortization, stock-based compensation expense, compensation expense associated with Senn Delaney retention awards, earnout accretion expense related to acquisitions, restructuring charges, and other non-operating income (expense).  Adjusted EBITDA margin refers to Adjusted EBITDA (as explained above) as a percentage of net revenue in the same period. A reconciliation of Adjusted EBITDA to Net Income is provided on the last page of this release.

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.

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, integrate, manage and retain qualified executive search consultants; our ability to develop and maintain strong, long-term relationships with our clients; 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; unfavorable tax law changes and tax authority rulings; 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 utilize 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; our reliance on information management systems; any impairment of our goodwill and other intangible assets; and the ability to align our cost structure and headcount with net revenue. For more information on the factors that could affect the outcome of forward-looking statements, refer to our Annual Report on Form 10-K for the year ended December 31, 2014, under Risk Factors in Item 1A and our quarterly filings with the SEC. We caution the reader that the list of factors may not be exhaustive. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Press Release Contacts:

H&S Investors & Analysts Contact:
Julie Creed - Vice President, Investor Relations & Real Estate
1 312 496 1774, jcreed@heidrick.com

H&S Media Contact:
Jon Harmon -  Vice President, Corporate Communications
1 312.496.1593, jharmon@heidrick.com

 



 Heidrick & Struggles International, Inc. 

 Condensed Consolidated Statements of Comprehensive Income 

 (In thousands, except per share data) 

  (Unaudited) 


















Three months ended






June 30,






2015


2014


 $ Change 


 % Change 

Revenue:








Revenue before reimbursements (net revenue)

$133,045


$136,080


($3,035)


-2.2%

Reimbursements

4,641


4,878


(237)


-4.9%

Total revenue

137,686


140,958


(3,272)


-2.3%









Operating expenses:








Salaries and employee benefits

90,717


92,128


(1,411)


-1.5%

General and administrative expenses

33,156


31,440


1,716


5.5%

Reimbursed expenses

4,641


4,878


(237)


-4.9%

Total operating expenses

128,514


128,446


68


0.1%

Operating income

9,172


12,512


(3,340)


-26.7%









Non-operating (expense) income:








Interest, net

(175)


(110)





Other, net

121


342





Net non-operating (expense) income

(54)


232













Income before income taxes

9,118


12,744





Provision for income taxes

4,162


8,957





Net income 

4,956


3,787





Other comprehensive (loss) income, net of tax

(555)


591





Comprehensive income

$4,401


$4,378













Basic weighted average common shares outstanding

18,315


18,215





Dilutive common shares

283


169





Diluted weighted average common shares outstanding

18,598


18,384













Basic net income per common share

$0.27


$0.21





Diluted net income per common share

$0.27


$0.21













Salaries and employee benefits as a % of net revenue

68.2%


67.7%





General and administrative expense as a % of net revenue

24.9%


23.1%





Operating income as a % of net revenue

6.9%


9.2%





 





Heidrick & Struggles International, Inc.

Segment Information

(In thousands)

(Unaudited)





























Three Months Ended June 30,







$


%


2015


2014



2015


2014


Change


 Change


Margin *


Margin *

Revenue:












    Executive Search and Leadership Consulting













Americas

$75,820


$70,466


$5,354


7.6%






Europe

24,075


31,201


(7,126)


-22.8%






Asia Pacific

24,777


25,062


(285)


-1.1%






      Total Executive Search and Leadership Consulting

124,672


126,729


(2,057)


-1.6%





    Culture Shaping

8,373


9,351


(978)


-10.5%






      Revenue before reimbursement (net revenue)

133,045


136,080


(3,035)


-2.2%






Reimbursements

4,641


4,878


(237)


-4.9%






      Total revenue

$137,686


$140,958


($3,272)


-2.3%


















Operating income (loss): ^












    Executive Search and Leadership Consulting













Americas

$18,468


$17,140


$1,328


7.7%


24.4%


24.3%


Europe

45


1,787


(1,742)


-97.5%


0.2%


5.7%


Asia Pacific

2,568


2,387


181


7.6%


10.4%


9.5%


      Total Executive Search and Leadership Consulting

21,081


21,314


(233)


-1.1%


16.9%


16.8%

    Culture Shaping

588


1,307


(719)


-55.0%


7.0%


14.0%


      Total segments

21,669


22,621


(952)


-4.2%


16.3%


16.6%

    Global Operations Support

(12,497)


(10,109)


(2,388)


-23.6%


-9.4%


-7.4%


      Operating income

$9,172


$12,512


($3,340)


-26.7%


6.9%


9.2%




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




^   In the third quarter of 2014, consistent with the Company's practice to periodically review its reporting structure and segments, the Company evaluated its allocation of corporate and support costs to each of its regions. In conjunction with that review, to better align its cost and reporting structure, additional costs were allocated to the regions reflecting the Company's current view of the costs necessary to support the regional operations. The prior period results have been recast to reflect these changes and present comparative year-over-year results.






 



Heidrick & Struggles International, Inc.

Condensed Consolidated Statements of Comprehensive Income 

(In thousands, except per share amounts)

(Unaudited)


















Six months ended






June 30, 






2015


2014


$ Change


% Change

Revenue:








Revenue before reimbursements (net revenue)

$248,198


$247,201


$997


0.4%

Reimbursements

7,967


9,289


(1,322)


-14.2%

Total revenue

256,165


256,490


(325)


-0.1%









Operating expenses:








Salaries and employee benefits

169,190


168,043


1,147


0.7%

General and administrative expenses

63,164


65,866


(2,702)


-4.1%

Reimbursed expenses

7,967


9,289


(1,322)


-14.2%

Total operating expenses

240,321


243,198


(2,877)


-1.2%

Operating income

15,844


13,292


2,552


19.2%









Non-operating expense:








Interest, net

(246)


(80)





Other, net

46


44





Net non-operating expense

(200)


(36)












Income before income taxes

15,644


13,256





Provision for income taxes

7,262


10,213





Net income 

8,382


3,043





Other comprehensive (loss) income, net of tax

(1,237)


1,688





Comprehensive income

$7,145


$4,731













Basic weighted average common shares outstanding

18,282


18,184





Dilutive common shares

283


178





Diluted weighted average common shares outstanding

18,565


18,362













Basic net income per common share

$0.46


$0.17





Diluted net income per common share

$0.45


$0.17













Salaries and employee benefits as a % of net revenue

68.2%


68.0%





General and administrative expense as a % of net revenue

25.4%


26.6%





Operating income as a % of net revenue

6.4%


5.4%





 




Heidrick & Struggles International, Inc.

Segment Information

(In thousands)

(Unaudited)





























Six Months Ended June 30,







$


%


2015


2014



2015


2014


Change


 Change


Margin *


Margin *

Revenue:












    Executive Search and Leadership Consulting













Americas

$140,295


$128,052


$12,243


9.6%






Europe

43,733


57,425


(13,692)


-23.8%






Asia Pacific

47,681


45,857


1,824


4.0%






      Total Executive Search and Leadership Consulting

231,709


231,334


375


0.2%





    Culture Shaping

16,489


15,867


622


3.9%






      Revenue before reimbursements (net revenue)

248,198


247,201


997


0.4%






Reimbursements

7,967


9,289


(1,322)


-14.2%






      Total revenue

$256,165


$256,490


($325)


-0.1%


















Operating income (loss): ^












    Executive Search and Leadership Consulting













Americas

$32,370


$29,009


$3,361


11.6%


23.1%


22.7%


Europe

(452)


2,427


(2,879)


-118.6%


-1.0%


4.2%


Asia Pacific

5,458


2,562


2,896


113.0%


11.4%


5.6%


      Total Executive Search and Leadership Consulting

37,376


33,998


3,378


9.9%


16.1%


14.7%

    Culture Shaping

1,409


777


632


81.3%


8.5%


4.9%


      Total segments

38,785


34,775


4,010


11.5%


15.6%


14.1%

    Global Operations Support

(22,941)


(21,483)


(1,458)


-6.8%


-9.2%


-8.7%


      Operating income

$15,844


$13,292


$2,552


19.2%


6.4%


5.4%


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


^    In the third quarter of 2014, consistent with the Company's practice to periodically review its reporting structure and segments, the Company evaluated its allocation of corporate and support costs to each of its regions. In conjunction with that review, to better align its cost and reporting structure, additional costs were allocated to the regions reflecting the Company's current view of the costs necessary to support the regional operations. The prior period results have been recast to reflect these changes and present comparative year-over-year results.

 



Heidrick & Struggles International, Inc.

Condensed Consolidated Balance Sheets

(In thousands)












June 30,


December 31,





2015


2014





(Unaudited)



Current assets:






Cash and cash equivalents


$119,884


$211,352


Restricted cash


7,238


6,501


Accounts receivable, net


97,270


68,353


Other receivables


11,660


10,613


Prepaid expenses


15,369


14,536


Other current assets


1,355


1,592


Income taxes recoverable


5,541


5,288


Deferred income taxes


12,380


12,094



Total current assets


270,697


330,329








Non-current assets:






Property and equipment, net


34,579


30,417


Restricted cash


592


1,411


Assets designated for retirement and pension plans

17,901


19,426


Investments


15,248


13,989


Other non-current assets


10,844


6,601


Goodwill


121,020


122,176


Other intangible assets, net


18,595


20,939


Deferred income taxes


22,682


23,413



Total non-current assets


241,461


238,372








Total assets


$512,158


$568,701








Current liabilities:






Current portion of debt


$6,000


$6,000


Accounts payable


5,702


5,493


Accrued salaries and employee benefits

83,099


130,434


Deferred revenue, net


33,345


30,452


Other current liabilities


27,923


26,835


Income taxes payable


3,376


6,684



Total current liabilities


159,445


205,898








Non-current liabilities:






Non-current debt, less current maturities

20,500


23,500


Retirement and pension plans


39,156


39,892


Other non-current liabilities


43,794


54,747



Total non-current liabilities


103,450


118,139








Stockholders' equity


249,263


244,664








Total liabilities and stockholders' equity


$512,158


$568,701

 



Heidrick & Struggles International, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)






























 Six Months Ended 






 June 30,  






2015


2014









Cash flows - operating activities:





Net income

$8,382


$3,043


Adjustments to reconcile net income to net cash used in operating activities:





Depreciation and amortization

6,660


7,648



Deferred income taxes

(34)


4,562



Stock-based compensation expense

2,590


1,841



Accretion expense related to earnout payments

585


899



Changes in assets and liabilities:







Accounts and other receivables

(33,489)


(34,023)




Accounts payable

258


(2,466)




Accrued expenses

(48,620)


(30,247)




Deferred revenue

3,139


8,309




Income taxes payable, net

(3,763)


(1,060)




Retirement and pension assets and liabilities

1,223


(170)




Prepaid expenses

(561)


(1,685)




Other assets and liabilities, net

492


(1,693)





Net cash used in operating activities

(63,138)


(45,042)









Cash flows - investing activities:





Restricted cash

-


(102)


Capital expenditures

(10,248)


(1,867)


Purchases of available for sale investments 

(1,276)


(828)


Proceeds from sale of available for sale investments

255


592





Net cash used in investing activities

(11,269)


(2,205)









Cash flows - financing activities:





Debt repayment

(3,000)


(3,000)


Debt issuance costs

(381)


-


Cash dividends paid 

(5,003)


(4,849)


Payment of employee tax withholdings on equity transactions

(820)


(406)


Acquisition earnout payments

(5,496)


(3,390)





Net cash used in financing activities

(14,700)


(11,645)









Effect of exchange rate fluctuations on cash and cash equivalents

(2,361)


596









Net decrease in cash and cash equivalents

(91,468)


(58,296)

Cash and cash equivalents at beginning of period

211,352


181,646

Cash and cash equivalents at end of period

$119,884


$123,350

 



Heidrick & Struggles International, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)




























 Three Month Ended 






 June 30, 






2015


2014









Cash flows - operating activities:





Net income

$4,956


$3,787


Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization

2,928


3,798



Deferred income taxes

(330)


4,163



Stock-based compensation expense

1,557


1,505



Accretion expense related to earnout payments

287


476



Changes in assets and liabilities:







Accounts and other receivables

(15,908)


(20,765)




Accounts payable

(2,057)


(2,680)




Accrued expenses

28,303


34,044




Deferred revenue

2,911


3,312




Income taxes recoverable, net

849


3,509




Retirement and pension assets and liabilities

(85)


(596)




Prepaid expenses

233


(64)




Other assets and liabilities, net

956


(585)





Net cash provided by operating activities

24,600


29,867









Cash flows - investing activities:





Restricted cash

-


(239)


Capital expenditures

(3,966)


(740)


Purchases of available for sale investments 

(122)


(74)


Proceeds from sale of available for sale investments

136


125





Net cash used in investing activities

(3,952)


(928)









Cash flows - financing activities:





Debt repayment

(1,500)


(1,500)


Debt issuance costs

(381)


-


Cash dividends paid 

(2,492)


(2,377)


Payment of employee tax withholdings on equity transactions

-


(24)


Acquisiton earnout payments 

(4,773)


(3,390)





Net cash used in financing activities

(9,146)


(7,291)









Effect of exchange rate fluctuations on cash and cash equivalents

724


297









Net increase in cash and cash equivalents

12,259


21,945

Cash and cash equivalents at beginning of period

107,625


101,405

Cash and cash equivalents at end of period

$119,884


$123,350

 



 Heidrick & Struggles International, Inc. 

 Reconciliation of Net Income and Operating Income (GAAP) to 

 Adjusted EBITDA (Non-GAAP) 

 (In thousands) 

  (Unaudited) 



























 Three Months Ended 


 Six Months Ended 





 June 30,  


June 30, 





2015


2014


2015


2014












 Revenue before reimbursements (net revenue) 

$133,045


$136,080


$248,198


$247,201












 Net income 

4,956


3,787


8,382


3,043


 Interest, net 

(175)


(110)


(246)


(80)


 Other, net 

121


342


46


44


 Provision for income taxes 

4,162


8,957


7,262


10,213

 Operating income 

9,172


12,512


15,844


13,292












 Adjustments 









 Salaries and employee benefits 










 Stock-based compensation expense 

1,107


1,505


2,140


1,841



 Senn Delaney retention awards 

541


583


1,083


1,167


 General and administrative expenses 










 Depreciation 

1,761


2,414


4,327


4,884



 Intangible amortization 

1,167


1,384


2,333


2,764



 Earnout accretion 

287


476


585


899




 Total adjustments 

4,863


6,362


10,468


11,555












 Adjusted EBITDA 

$14,035


$18,874


$26,312


$24,847

 Adjusted EBITDA Margin 

10.5%


13.9%


10.6%


10.1%

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/heidrick--struggles-reports-second-quarter-2015-financial-results-300119444.html

SOURCE Heidrick & Struggles


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