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Heidrick's fourth-quarter profit rises 36%

February 26 2008

Fourth-quarter profit rose 36.3% at Chicago-based executive search firm Heidrick & Struggles International Inc. The company reported fourth-quarter 2007 net income of $9.2 million compared with $6.8 million in the fourth quarter of 2006.

Fourth-quarter revenue rose 16.4% to $161.7 million from $138.9 million in the same period last year. That beat analysts' estimate of $142.5 million.

Operating income surged 113.3% to $18.2 million in the fourth quarter from $8.5 million in the same period last year.

Revenue from Heidrick's Asia Pacific region surged 49.1% to $19.6 million in the fourth quarter, while its European revenue rose 18.9% to $54.1 million. However, fourth-quarter revenue in the Americas rose 8.9% to almost $80.0 million.

The company said foreign currency exchange rates boosted its net revenue by five percentage points.

Full-year 2007 net income increased 64.9% to $56.5 million from $34.2 million in 2006. Revenue rose 29.1% to $648.3 million from almost $502.0 million in the previous year.

It was announced in September 2006 that Heidrick was buying the Highland Partners executive search business from the Hudson Highland Group (NASD: HHGP).

Heidrick said it expects net revenue of between $650 million and $670 million for 2008.

"Even though there was more seasonal weakness than usual in December, January confirmations were very strong and we see continued strength in February," said CEO Kevin Kelly. "Despite some uncertainty about the economy, especially in the United States, our clients continue to pursue their strategic initiatives."

The company also said its board approved this month a new $50 million stock repurchase program.

Heidrick & Struggles International Inc. (NASD: HSII)
For the fourth quarter ended Dec. 31, 2007, compared with the same period in 2006.
Revenue: $161.7 million, +16.4%
Net income: $9.2 million, +36.3%

For full-year 2007 ended Dec. 31, 2007, compared with the previous year.
Revenue: $648.3 million, +29.1%
Net income: $56.5 million, +64.9%

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