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Heidrick revenue down 41.8%, plans more cuts

April 28 2009

Heidrick & Struggles International Inc. (NASD: HSII) reported first-quarter net revenue fell 41.8% year-over-year to $89.1 million as the number of executive searches confirmed fell 38.4%. The executive search firm also announced a $13.4 million restructuring charge for the quarter, and plans more staff cuts in the second quarter.

"The negative impact of the global financial crisis and recession is no longer contained to one or two industries," said CEO L. Kevin Kelly. "Each of our practice groups and every region experienced double-digit revenue declines in the first quarter."

Heidrick's largest region, the Americas, posted a 40.0% year-over-year decline in first-quarter net revenue to $46.4 million. Europe fell 46.9% to $28.1 million, and Asia Pacific revenue fell 36.0% to $14.7 million. Heidrick reports net revenue as revenue before reimbursements.

Heidrick reported a first-quarter net loss of $18.9 million compared with net income of $7.1 million in the year-ago quarter. Net loss would have been $11.2 million excluding the $13.4 million restructuring charge.

The company said it plans to cut headcount by 8% to 10% in May, after its cut of 11% in January. In addition, Heidrick plans to reduce base salaries by 5%, where possible, through salary cuts, unpaid days off and reduced hours. It expects a second-quarter restructuring charge of $6 million to $10 million.

Heidrick & Struggles International Inc. (NASD: HSII)
For the first quarter ended March 31, 2009, compared with the same period in 2008.
Net revenue: $89.1 million, -41.8%
Net loss: $18.9 million vs. net income of $7.1 million

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