Heidrick & Struggles International, Inc. (NASDAQ:HSII) Q1 2022 Earnings Conference Call April 25, 2022 5:00 PM ET Company Participants Suzanne Rosenberg - VP, IR Krishnan Rajagopalan - President and CEO Mark Harris - CFO Conference Call Participants Marc Riddick - Sidoti Kevin Steinke - Barrington Research Tobey Sommer - Truist Securities Operator Good afternoon, ladies and gentlemen, and welcome to the Heidrick & Struggles Q1 2022 Earnings Conference Call. Just a reminder, today's call is being recorded. A ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 0-25837 HEIDRICK & STRUGGLES INTERNATIONAL, INC. (State or Other Jurisdiction of Incorporation or Organization) Delaware 36-268 ...

Heidrick & Struggles International, Inc. (NASDAQ:HSII) Q4 2021 Earnings Conference Call February 28, 2022 5:00 PM ET Company Participants Krishnan Rajagopalan - President and Chief Executive Officer Mark Harris - Chief Financial Officer Conference Call Participants Tobey Sommer - Truist Securities Kevin Steinke - Barrington Research Operator Good afternoon. I am Norah, today's conference call operator. Welcome to the Heidrick & Struggles 2021 Fourth Quarter and Fiscal Year End Conference call. Joining toda ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-25837 HEIDRICK & STRUGGLES INTERNATIONAL, INC. FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or Organization) Indicate by check ...

Heidrick & Struggles International, Inc. (NASDAQ:HSII) Q3 2021 Earnings Conference Call October 25, 2021 5:00 PM ET Company Participants Krishnan Rajagopalan - President and CEO Mark Harris - CFO Conference Call Participants Josh Vogel - Sidoti & Company Tobey Sommer - Truist Securities Kevin Steinke - Barrington Research Operator Good afternoon. I am Blu, today's conference call operator. Welcome to the Heidrick & Struggles 2021 Third Quarter Conference call. Joining today's call is Company's President and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 0-25837 HEIDRICK & STRUGGLES INTERNATIONAL, INC. (Exact Name of Registrant as Specified in its Charter) (State or Other Jur ...

HEIDRICK & STRUGGLES SECOND QUARTER 2021 RESULTS July 26, 2021 SAFE HARBOR STATEMENT This press release contains forward-looking statements. The forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management's beliefs and assumptions. Forward-looking statements may be identified by the use of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," and simil ...

Financial Data and Key Metrics Changes - The company reported record net revenue of $260 million in Q2 2021, representing a 79% year-over-year increase and a 34% sequential increase [6][26] - Adjusted EBITDA margin expanded by 590 basis points to 14.4%, with adjusted EPS of $1.14 more than tripling from the previous year and increasing over 30% sequentially [6][35] - Adjusted net income for Q2 2021 was $22.9 million, a 31.6% increase from Q1 2021 [36] Business Line Data and Key Metrics Changes - Executive Search net revenue was $224.1 million, up 24.8% from the previous quarter, with growth across all regions: Americas up 26.5%, Europe up 19.3%, and Asia Pacific up 25% [27] - Heidrick Consulting net revenue increased by 22% to $17.1 million, driven by a 74% increase in confirmations [30] - The newly established on-demand talent segment generated $18.7 million in revenue, reflecting over 50% growth year-over-year [31] Market Data and Key Metrics Changes - The company noted strong demand for services as clients adapt to post-pandemic challenges, with a significant increase in diverse placements, particularly at the Board level [15][16] - The integration of digital solutions has allowed the company to execute searches faster, reducing completion times by approximately 25% [49] Company Strategy and Development Direction - The company is focused on three growth initiatives: expanding search and consulting services, developing leadership solutions, and investing in new product development [20] - The acquisition of BTG is seen as a strategic move to enhance the company's offerings in the high-growth on-demand talent market [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the ongoing pandemic and geopolitical events, highlighting positive market trends and opportunities [17][40] - The company anticipates continued strong performance, with Q3 revenue guidance projected between $245 million and $255 million [40] Other Important Information - The company ended Q2 2021 with cash and cash equivalents of $237.8 million, a 27% increase from the previous year [37] - A dividend of $0.15 per share was announced for August, reflecting the company's strong financial position [36] Q&A Session Summary Question: Is the elevated war for talent yielding any uptick in revenue? - Management confirmed that there has been an uptick in revenue due to higher demand and confirmation trends, with notable increases in various regions [46] Question: Can you quantify the faster pace of executing searches enabled by technology? - Management indicated a 25% reduction in days to complete searches due to technology adoption, suggesting this may become the new norm [49] Question: How should we think about the cost of service line going forward with BTG? - Management explained that BTG will have a variable cost of service model, with expectations for margins to improve as the business scales [50][51] Question: How do you view the company's performance versus growth in the end markets? - Management believes the company is holding its own and possibly gaining market share, although specific metrics are difficult to quantify [64][68] Question: What are the implications of remote work on the Executive Search business? - Management noted that remote work has expanded the candidate pool and improved placement speed, indicating a lasting trend [60][61]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's financial performance and condition for the period ended June 30, 2021 [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the period ended June 30, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased, primarily driven by goodwill and accounts receivable, leading to growth in total stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$832,066** | **$787,812** | | Cash and cash equivalents | $237,832 | $316,473 | | Accounts receivable, net | $168,504 | $88,123 | | Goodwill | $137,401 | $91,643 | | **Total Liabilities** | **$532,513** | **$520,210** | | Accrued salaries and benefits (Current) | $198,120 | $217,908 | | **Total Stockholders' Equity** | **$299,553** | **$267,602** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The company reported a significant turnaround to net income, driven by a substantial 78% increase in revenue for Q2 2021 Key Income Statement Data (in thousands, except per share amounts) | Metric | Q2 2021 | Q2 2020 | 6 Months 2021 | 6 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $259,981 | $145,603 | $453,637 | $317,084 | | Operating Income (Loss) | $28,706 | $(23,986) | $48,314 | $(5,834) | | Net Income (Loss) | $20,765 | $(25,733) | $35,597 | $(17,067) | | Diluted EPS | $1.03 | $(1.33) | $1.76 | $(0.89) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved, while investing activities focused on the BTG acquisition and financing used for dividends Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(52,343) | $(124,765) | | Net cash used in investing activities | $(16,031) | $(13,508) | | Net cash (used in) provided by financing activities | $(9,155) | $89,664 | | **Net decrease in cash** | **$(78,641)** | **$(52,959)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the BTG acquisition, goodwill impairment, and restructuring charges - On April 1, 2021, the Company acquired Business Talent Group (BTG) for **$32.6 million** in initial cash consideration, plus a potential earnout of **$20-30 million**, adding a new 'On-Demand Talent' operating segment[64](index=64&type=chunk) - As a result of the BTG acquisition, the company recorded **$45.5 million** in goodwill and **$10.6 million** in other intangible assets (customer relationships, software, trade name)[64](index=64&type=chunk)[67](index=67&type=chunk) - The company implemented a restructuring plan in Q3 2020, incurring **$7.1 million** in charges in the first six months of 2021, primarily for real estate optimization, with total charges to date of **$59.4 million**[86](index=86&type=chunk)[87](index=87&type=chunk) - In Q2 2020, the company recorded a non-cash goodwill impairment charge of **$33.0 million** (**$24.5 million** in Europe and **$8.5 million** in Asia Pacific) due to the economic impact of COVID-19[61](index=61&type=chunk)[96](index=96&type=chunk)[145](index=145&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strong recovery, segment growth, and the impact of the BTG acquisition, with a positive Q3 outlook - The company's business now comprises three main services: Executive Search, Heidrick Consulting, and the newly added On-Demand Talent service following the acquisition of Business Talent Group (BTG) on April 1, 2021[104](index=104&type=chunk)[106](index=106&type=chunk) - The company forecasts Q3 2021 net revenue to be between **$245 million** and **$255 million**, indicating continued strong performance[131](index=131&type=chunk) - The company's digital platforms, Heidrick Connect for Executive Search and new digital solutions for Heidrick Consulting, were critical in navigating the remote work environment and contributed to the strong operational recovery[109](index=109&type=chunk)[123](index=123&type=chunk)[128](index=128&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2021 consolidated net revenue surged **78.6%** to **$260.0 million**, driving a significant shift to operating income Net Revenue by Segment - Three Months Ended June 30 (in thousands) | Segment | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Executive Search | $224,133 | $134,154 | +67.1% | | On-Demand Talent | $18,719 | $— | N/A | | Heidrick Consulting | $17,129 | $11,449 | +49.6% | | **Total Net Revenue** | **$259,981** | **$145,603** | **+78.6%** | Operating Income (Loss) by Segment - Three Months Ended June 30 (in thousands) | Segment | 2021 | 2020 | | :--- | :--- | :--- | | Executive Search | $42,958 | $(7,294) | | On-Demand Talent | $153 | $— | | Heidrick Consulting | $(3,631) | $(8,321) | | Global Operations Support | $(10,774) | $(8,371) | | **Total Operating Income (Loss)** | **$28,706** | **$(23,986)** | - Executive Search productivity surged, with annualized net revenue per consultant at **$2.4 million** for Q2 2021, compared to **$1.4 million** in Q2 2020[140](index=140&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong cash reserves with no outstanding borrowings, and subsequently increased its credit facility - The company had **$237.8 million** in cash, cash equivalents, and marketable securities at June 30, 2021, with no outstanding borrowings on its credit facility[217](index=217&type=chunk)[216](index=216&type=chunk) - Cash used in operations for the first six months of 2021 was **$52.3 million**, mainly due to **$200.3 million** in cash bonus payments related to 2020 performance[218](index=218&type=chunk) - On July 13, 2021, the company amended its credit agreement, increasing the revolving credit facility from **$175 million** to **$200 million** and extending the maturity date to July 2026[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risk is foreign currency fluctuations, with a 10% change impacting net income by approximately **$1.1 million** - The company's main market risk is foreign currency exchange rate risk from its operations in the Americas, Europe, and Asia Pacific[228](index=228&type=chunk) - A **10%** change in average foreign currency exchange rates would have impacted net income by about **$1.1 million** for the six months ended June 30, 2021[228](index=228&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal controls over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[230](index=230&type=chunk) - No material changes were made to the internal control over financial reporting during the second quarter of 2021[231](index=231&type=chunk) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides information on legal proceedings, risk factors, and exhibits filed with the Form 10-Q [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and litigation, not expected to materially affect financial condition - The company faces various claims and litigation from the ordinary course of business but does not expect them to have a material adverse effect on its financial condition[99](index=99&type=chunk)[232](index=232&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor concerns potential misclassification of on-demand talent as independent contractors post-BTG acquisition - A new risk factor has been introduced following the BTG acquisition regarding the potential misclassification of on-demand talent as independent contractors[234](index=234&type=chunk) - A misclassification determination could result in significant monetary exposure from unpaid taxes, wage and hour claims, and other employee-related liabilities, potentially impacting both the company and its clients[236](index=236&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) Key exhibits filed include the amended Credit Agreement and CEO/CFO certifications under Sarbanes-Oxley - Key exhibits filed include the First Amendment to the Credit Agreement and CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906[238](index=238&type=chunk)

HEIDRICK & STRUGGLES FIRST QUARTER 2021 RESULTS April 26, 2021 SAFE HARBOR STATEMENT The 2021 first quarter news release, conference call webcast, and the following slides contain forward-looking statements. The forwardlooking statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management's beliefs and assumptions. Forward-looking statements may be identified by the use of words such as "expects," "anticipates," "intends," "plans," "b ...