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Sep 30, 2020
Heidrick & Struggles Q3 2020 Earnings Report
Heidrick & Struggles' Q3 2020 results were announced, revealing a sequential revenue growth that exceeded expectations and a bolstered balance sheet with no outstanding debt.
Key Takeaways
Heidrick & Struggles reported a net revenue of $143.5 million for Q3 2020, compared to $182.2 million in Q3 2019. The company experienced an operating loss of $38.2 million due to a restructuring charge, but adjusted operating income was $9.9 million. Despite the challenges, the company maintains a cash dividend of $0.15 per share and sees strengthening business trends.
Restructuring charge of $48.1 million led to an operating loss of $38.2 million, but is expected to yield $30 million to $40 million in annual cost savings.
Adjusted operating income reached $9.9 million with an adjusted operating margin of 6.9%, a sequential increase of 70 basis points.
Net revenue was $143.5 million, a decrease from $182.2 million in Q3 2019, primarily due to the pandemic's impact.
Net loss amounted to $26.2 million, including restructuring charges; however, adjusted net income was $7.7 million, with adjusted diluted earnings per share at $0.39.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The Company expects 2020 fourth quarter consolidated net revenue of between $140 million and $150 million, while acknowledging the continued fluidity of the COVID-19 pandemic that will continue to impact quarterly results.
Positive Outlook
- Based on average currency rates in September 2020
- Management's assumptions for the anticipated volume of new Executive Search confirmations
- Heidrick Consulting assignments
- The current backlog
- Consultant productivity
Challenges Ahead
- Continued fluidity of the COVID-19 pandemic
- Seasonality of the business
- Consultant retention
- Volume of new Executive Search confirmations
- Heidrick Consulting assignments
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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