Heidrick & Struggles (HSII) hunts for more business

Filed under: Earnings reports

As the economy plunged in Q4, Corporate America pulled back from recruiting top talent. No doubt, this was a big drag on Heidrick & Struggles International, Inc. (NASDAQ: HSII), which is a top global executive search firm.

In the quarter, revenues fell 12.1% to $134.9 million. Net income was $5.3 million or $0.30 per share, which compares to net income of $9.2 million, or $0.49 per share in the same period a year ago.

But there were some bright spots. For example, Heidrick & Struggles saw growth in segments like life sciences, technology, education, renewable energy and professional services. Moreover, last year the firm saw a 7% increase in average fees per search to $122,600. A big help was growth in Europe and Asia. Another boost came from snagging assignments for top-level executives.

While Heidrick & Struggles has a strong capital position, the company wants to take a conservative stance. To this end, there has been a reduction in headcount by 12%.

Unfortunately, it looks like Heidrick & Struggles' performance can drag until the second half of the year. So, the stock may not have much action, but there is likely to be much pent-up demand when things comeback.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a free online business valuation tool for small businesses.

 

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