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World – Troubled CTPartners reports Q4 and full year revenue growth

16 April 2015

Global retained executive search firm CTPartners (CTP: NYSE) reported revenue for the fourth quarter ending 31 December 2014 of USD 42.1 million, an increase of 22.7% compared with USD 34.3 million in Q4 2013.

The company had filed a form with the US Securities and Exchange Commission (SEC) to extend the deadline filing its latest financial results (10-K) until 15 April 2015.

The company was engaged in 391 new search assignments during Q4 2014, an increase of 14.3% compared with the 342 searches undertaken during the same period last year. On an annual basis, search assignments rose by 24.9% to 1,742, up from 1,395 in 2013.

Average revenue per search was USD 98,300 in Q4, down by 3.4% from USD 101,800 in Q4 2013. For the full year 2014, the average revenue per search was up by 4.1% to USD 101,300. 

Foreign currency exchanges did not have a material impact on revenue during Q4 2014 or full-year 2014; however, the company believes that its impact on the financial results in 2015 will be greater as a result of the company’s anticipated revenue mix moving forward.

The company operates across four regions, with revenue broken down during Q4 2014 as follows:

  Q4 2014 Q4 2013 Change
North America USD 23.1 million USD 20.3 million +13.9%
EMEA USD 10.8 million USD 9.0 million +19.8%
Asia Pacific USD 4.5 million USD 2.4 million +84.8%
Latin America USD 3.7 million USD 2.6 million +42.5%

CTPartners conducts executive searches across six primary operations segments. During Q4 2014. Professional Services was the only segment to report a decrease in revenue when compared with the same quarter last year.

Broken down, revenue during Q4 2014 was as follows:

  Q4 2014 Q4 2013 Change
Financial Services USD 14.4 million USD 10.2 million +41.5%
Tech, Media & Telecom USD 4.7 million USD 4.0 million +15.9%
Life Sciences USD 8.0 million USD 5.7 million +42.2%
Professional Services USD 5.2 million USD 6.9 million -23.9%
Consumer/Retail USD 5.0 million USD 4.0 million +25.4%
Industrial USD 4.7 million USD 3.6 million +32.4%

In December 2014, CTPartners announced that it had completed its acquisition of Austrian-based executive search and leadership consulting firm Neumann, which has operations in Germany, Switzerland, and across Eastern Europe.

Neumann was the third acquisition by CTPartners during 2014; following its purchase of Australian independent executive search and leadership advisory firm Johnson; and the acquisition of the Australian office only of executive search firm Park Brown International.

On an annual basis, CTPartners reported net revenue growth of 32.4% to USD 1762.5 million, up from USD 130.3 million a year ago. The company also reported a return to growth, after reporting operating and net loss in 2013. 

  FY 2014 FY 2013 Change
Net Revenue USD 176.8 million USD 134.3 million 32.4%
Operating Income (loss) USD 5.7 million (USD 2.7 million) -
Net Income (loss) USD 3.4 million (USD 1.8 million) -

CTPartners achieved revenue growth in all regions during 2014, compared with 2013. The strongest growth was achieved across Asia Pacific, which nearly doubled during the period.

Revenue broken down by geographical region during 2014 was as follows:

  FY 2014 FY 2013 Change
North America USD 100.3 million USD 78.1 million +28.3%
EMEA USD 42.8 million USD 32.6 million +31.3%
Asia Pacific USD 13.5 million USD 7.0 million +93.1%
Latin America USD 16.0 million USD 12.5 million +27.3%

While Professional Services proved to be the most challenging operating segment during the fourth quarter, it achieved strong revenue growth throughout the year, indicating that the Q4 results were seasonally impacted.

Revenue growth was reported across all six operating segment, and was broken down as follows:

  FY 2014 FY 2013 Change
Financial Services USD 51.3 million USD 34.0 million +51.0%
Tech, Media & Telecom USD 21.4 million USD 14.8 million +45.2%
Life Sciences USD 31.0 million USD 24.4 million +27.0%
Professional Services USD 29.2 million USD 24.0 million +21.6%
Consumer/Retail USD 20.3 million USD 18.5 million +9.8%
Industrial USD 19.3 million USD 14.6 million +32.0%

CTPartners’ Chief Operating Officer David Nocifora was appointed to the position of Chief Executive Officer effective 16 April 2015, replacing Brian Sullivan. Mr Nocifora has also been elected to the Company’s Board of Directors.

Mr Nocifora was previously the company’s Chief Financial Officer and has held executive level positions at the Company since 1994. Prior to being named CEO he was responsible for the firm’s entire operating organization including Administration, Human Resources, Information Technology, Research and Office Operations.

On a preliminary basis, search assignments in Q1 2015 increased by 11.5% compared with Q4 2014, rising to 436 up from 391 assignments last quarter. Also, the Company expects to report approximately USD 35 million in revenue during the first quarter 2015.

The company announced in February 2015 that its board of directors had formed a special committee to review strategic alternatives for the company, including a proposal from DHR International to acquire all of the outstanding shares of the company.

CTPartners also stated that it has withdrawn its full year 2015 revenue guidance which was released on 28 January 2015.

In trading today, the company’s share price decreased by 5.7% to USD 3.80, a decrease of 60.3% compared with a year ago. Based on its current share price, the company has a market value of USD 33.2 million.