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View All NewsHeidrick net revenue up 4% in constant currency, but posts loss amid $39.2 million noncash charge
Net revenue rose 4.1% in constant currency in the second quarter at executive search firm Heidrick & Struggles International Inc. (NASD: HSII), but the firm posted a net loss of $18.2 million.
| (US$ thousands) | Q2 2017 | Q2 2016 | % change | constant currency (US$ 000s) |
| Net revenue | $152,214 | $148,861 | 2.3% | 4.1% |
| Reimbursements | $4,904 | $4,955 | -1.0% | |
| Total revenue | $157,118 | $153,816 | 2.1% | |
| Net loss/income | ($18,248) | $6,655 | nm |
Second-quarter revenue from executive search rose across all regions except Asia Pacific at the Chicago-based firm. In addition, revenue rose 35.3% in the company’s leadership consulting operations thanks to both organic growth and the acquisition of Philosophy IB last September.
However, Heidrick’s “culture shaping” business saw revenue decline 35.7%, and the company announced a noncash impairment charge of $39.2 million to write off the long-lived asset and goodwill impairment cause by the business line’s performance.
Heidrick reported it plans to combine leadership consulting and culture shaping into a combined offering going forward called “Heidrick Consulting.” The firm had acquired culture-shaping provider Senn-Delaney Leadership Consulting Group in December 2012.
Revenue by segment and geography
| Q2 2017 | Q2 2016 | % change | % growth in constant currency | |
| Executive search | ||||
| Americas | $83,090 | $81,494 | 2.0% | |
| Europe | $30,335 | $27,538 | 10.2% | 16.4% |
| Asia Pacific | $21,115 | $21,677 | -2.6% | -2.2% |
| Total executive search and leadership consulting | $134,540 | $130,709 | 2.9% | 4.3% |
| Leadership consulting | $11,433 | $8,450 | 35.3% | 43.9% |
| Culture shaping | $6,241 | $9,702 | -35.7% | -34.0% |
Guidance
Heidrick forecasts consolidated third-quarter net revenue of between $148 million and $158 million.
Share price and market cap
Shares in Heidrick fell 13.74% in early afternoon trading today to $19.15, and the company had a market cap of $358.8 million, according to Yahoo.