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US – CTPartners revenue up amid acquisition, will amend past results

March 21 2013

Fourth-quarter net revenue rose 11.2 percent at CTPartners Executive Search Inc. (NYSE MKT: CTP) to $30.2 million when compared to the previous year. Revenue fell in North America and Asia Pacific. However, revenue got a boost from the company’s Latin American acquisition and its Europe, Middle East and Africa segment. In addition, the New York-based executive search firm reported plans to amend results for the first three quarters of the year in an accounting change related to its acquisition of the Latin American operation.

  • North America fourth-quarter net revenue fell 4.6 percent to approximately $17.0 million in the fourth quarter. The segment represents the firm’s largest geographic region.
  • Fourth-quarter revenue in Europe, the Middle East and Africa rose 11.3 percent to almost $8.0 million. CTPartners acquired Cheverny CEO Search S.A., a Paris-based executive search firm, on Oct. 10, 2012.
  • Asia Pacific revenue fell 10.1 percent to $1.8 million in the fourth quarter.

Latin America revenue totaled $3.5 million in the fourth quarter and came as the result of CTPartners’ acquisition of its independently owned licensee in Latin America during the first quarter of 2012. However, the company said it will restate results for the first through third quarters of 2012 to reflect the some purchase consideration for the deal as compensation expense for post-combination services rather than as a component of the purchase price.

The deal called for the sellers to remain with the company for 36 months past the acquisition or repay CTPartners $7.2 million. The company said accounting rules call for this to be classified as compensation for post-combination services. As a result, the company plans to post net losses in the first and second quarters, during which it had posted net income. In addition, the net loss for the third quarter will increase to $2.1 million from an earlier reported net loss of $275,309.

“It was not the company’s intention, nor the company’s belief that the purchase documents would be interpreted to trigger post-combination compensation, but because of the application of the accounting rules, we were required to restate our financial reports,” said CEO Brian Sullivan. “On an operating basis, Latin America has delivered significant strategic value and continues to make a positive contribution to our financial results.”

For the fourth quarter, CTPartners reported a net loss of $1.5 million compared to a net loss of $4.6 million in the year-ago quarter.

CTPartners Executive Search Inc. (NYSE MKT: CTP)
 For the fourth quarter ended Dec. 31, 2012, compared to the year-ago quarter.
 Net revenue: $30.2 million, +11.2 percent
 Net loss: $1.5 million vs. net loss of $4.6 million

For the fiscal year ended Dec. 31, 2012, compared to the previous year.
 Net revenue: $128.4 million, +6.0 percent
 Net loss: $3.6 million vs. net loss of $3.2 million

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