Third-quarter net revenue at Heidrick & Struggles International Inc. (NASDAQ: HSII) fell 21.2%, and the Chicago-based executive search firm reported a restructuring charge of $48.1 million.
President and CEO Krishnan Rajagopalan also said business was improving.
“While economic visibility remains limited, we currently see an acceleration in our business and stronger business trends coming into focus,” Rajagopalan said. “Importantly, we have the financial strength to continue making strategic investments to create long-term shareholder value, and our digital transformation is among multiple opportunities to fortify our position as a trusted global advisor.”
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Net revenue | $143,544 | $182,174 | -21.2% |
| Reimbursements | $957 | $4,344 | -78.0% |
| Total revenue | $144,501 | $186,518 | -22.5% |
| Net loss/income | ($26,178) | $9,947 | nm |
In terms of the restructuring charge, Heidrick reported it expects an annual cost savings of between $30 million and $40 million. The restructuring includes a workforce reduction and decrease in the firm’s real estate expenses among other things. Heidrick anticipates future restructuring charges of between $10 million to $15 million.
Executive search revenue by geography
| (US$ thousands) | Q3 2020 | Q3 2019 | % change | % change constant currency |
| Americas | $79,947 | $108,878 | -26.6% | -26.3% |
| Europe | $28,902 | $34,827 | -17.0% | -20.9% |
| Asia Pacific | $20,394 | $22,784 | -10.5% | -11.5% |
The company had 362 executive search consultants at the end of the third quarter compared to 380 at the end of the third quarter last year.
Heidrick noted that growth in the healthcare and life sciences practice in executive search was offset by reductions in other practices.
Share price and market cap
Shares in Heidrick were up 12.62% to $24.00 as of 11:57 a.m. Eastern time; they were 33.41% above their 52-week low. The company had a market cap of $412.2 million.