As the economy plunged in Q4, Corporate America pulled back from recruiting top talent. No doubt, this was a big drag on Heidrick & Struggles International, Inc. (NASDAQ: HSII), which is a top global executive search firm.
In the quarter, revenues fell 12.1% to $134.9 million. Net income was $5.3 million or $0.30 per share, which compares to net income of $9.2 million, or $0.49 per share in the same period a year ago.
But there were some bright spots. For example, Heidrick & Struggles saw growth in segments like life sciences, technology, education, renewable energy and professional services. Moreover, last year the firm saw a 7% increase in average fees per search to $122,600. A big help was growth in Europe and Asia. Another boost came from snagging assignments for top-level executives.
While Heidrick & Struggles has a strong capital position, the company wants to take a conservative stance. To this end, there has been a reduction in headcount by 12%.
Unfortunately, it looks like Heidrick & Struggles' performance can drag until the second half of the year. So, the stock may not have much action, but there is likely to be much pent-up demand when things comeback.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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