Heidrick & Struggles Reports 2002 Third Quarter Financial Results
CHICAGO, Oct. 30 -- Heidrick & Struggles International, Inc. (Nasdaq: HSII), the world's premier executive search and leadership consulting firm, today announced its financial results for the 2002 third quarter. Profitability improved in the quarter, despite a decline in revenue because of the ongoing softness in economies around the world. The company also announced that it believes these weak economic conditions will continue longer than previously anticipated. As a result the company plans to reduce its excess search capacity further, and will incur a special charge in the 2002 fourth quarter related to these actions.
For the 2002 third quarter, on a U.S. GAAP basis, Heidrick & Struggles reported diluted earnings per share of $0.05, compared to a loss per share of $0.69 in the 2001 third quarter. Net income was $924,000, compared to a net loss of $13.0 million in last year's third quarter. Consolidated net revenue was $87.4 million, a decrease of 17 percent from $104.6 million in the comparable quarter of 2001. Excluding the impact of exchange rate fluctuations, net revenue decreased 19 percent. On an adjusted basis, diluted earnings per share were $0.07 in the 2002 third quarter compared to a loss per share of $0.18 in last year's same period. Adjusted net income was $1.2 million, compared to a net loss of $3.3 million reported in last year's third quarter. Adjusted-basis results exclude gains and losses on the company's equity and warrant portfolio, write-downs on investments, special charges, goodwill amortization, and reimbursements of out-of-pocket expenses.
"We are encouraged to see an improvement in our profitability despite the lower revenue base," said Piers Marmion, Chairman and Chief Executive Officer of Heidrick & Struggles. "This is a clear indicator of the strides we have made in rationalizing our cost structure over the past 15 months."
The reconciliation between U.S. GAAP results and adjusted results appears below.
Three Months Ended September 30,
Per Share(A) $Millions
2002 2001 2002 2001
U.S. GAAP Reported
Net Income (Loss) $0.05 $(0.69) $0.9 $(13.0)
Goodwill Amortization - 0.03 - 0.5
Net Realized and
Unrealized (Gains)
Losses on Equity and
Warrant Portfolio 0.02 0.09 0.3 1.7
Write-down of
Long-term Investment - 0.31 - 5.9
Special Charges - 0.09 - 1.6
Adjusted Net Income
(Loss) $0.07 $(0.18) $1.2 $(3.3)
(A) Earnings per share are on a diluted basis
Columns may not add due to rounding
Consolidated salaries and employee benefits expense in the 2002 third quarter was $56.2 million, down 27 percent from $77.5 million in the comparable quarter last year. The decrease was primarily attributable to lower fixed costs as a result of the reductions to the company's workforce and lower bonus accruals related in part to the lower revenue levels.
On an adjusted basis, consolidated general and administrative expenses declined 14 percent to $27.6 million in the 2002 third quarter, compared to $32.1 million in the 2001 third quarter. The decrease was primarily due to lower fixed costs resulting from office consolidations, reduced spending on discretionary items, and lower bad debt expense.
In the 2002 third quarter, confirmed executive searches decreased 21 percent from the 2001 third quarter. Compared to the 2002 second quarter, the number of confirmed executive searches declined by 19 percent. As of September 30, 2002, the company employed 376 executive search consultants, compared to 383 as of June 30, 2002, and 485 as of September 30, 2001.
Third quarter results include nearly $4.0 million in revenue generated by the company's Leadership Services offerings, as client interest in these products for boards and executive teams increases. These services include Executive Assessment, which provides objective appraisals of clients' senior managers; Interim Executive Placement, which provides clients with immediate access to high-impact, proven business leaders; and, through an alliance with Lore International Institute, executive coaching and professional development.
On a sequential basis, comparing 2002 third quarter performance to the 2002 second quarter, consolidated net revenue was down approximately 7 percent. The diluted earnings per share, as adjusted, of $0.07 in the third quarter represents an improvement of $0.03 per share from the diluted earnings per share, as adjusted, of $0.04 in the 2002 second quarter, as the company continues to benefit from the actions it has taken to reduce its cost structure.
Results by Geographic Region
(Note: All results in this section are on an adjusted basis.)
Net revenue in North America was $47.4 million, a decrease of 21 percent from $60.2 million in the 2001 third quarter. Only the Consumer practice reported higher revenue in the 2002 third quarter compared to the 2001 third quarter. Operating income for the region increased 95 percent to $10.3 million from $5.3 million in last year's third quarter because of a better alignment of the fixed cost structure with revenue, reduced discretionary spending, and lower bad debt expense. The operating margin increased to 21.7 percent from 8.8 percent in the 2001 third quarter.
In Latin America, net revenue was $3.2 million, a decrease of 12 percent from $3.7 million in the 2001 third quarter. There was an operating loss of $1.1 million in the 2002 third quarter, compared to an operating loss of $702,000 in the 2001 third quarter. Improvement in the region's cost structure was offset by a one-time adjustment for value-added taxes (VAT).
Net revenue in Europe was $31.2 million, a decrease of 8 percent from $33.9 million in the 2001 third quarter. Excluding the impact of exchange rate fluctuations, net revenue decreased 17 percent from the same quarter in 2001. All of the practices experienced revenue declines. Operating income in the region was $1.0 million in the 2002 third quarter, compared to an operating loss of $2.1 million in the prior year's third quarter. The improvement was because of lower bonus accruals reflecting lower revenue versus the year-ago period, and consultant departures.
In Asia Pacific, net revenue was $5.5 million, a decrease of 18 percent from $6.8 million in the 2001 third quarter. Excluding the impact of exchange rate fluctuations, net revenue decreased 21 percent from the comparable quarter in 2001. Operating income was $431,000 in the 2002 third quarter, compared to $692,000 last year.
Nine Month Results
On a U.S. GAAP basis for the nine months ended September 30, 2002, the net loss was $20.2 million or $1.12 per share compared to a net loss of $7.6 million or $0.40 per share in the same period last year. Consolidated net revenue was $272.6 million, a decrease of 26 percent from $367.1 million in the comparable period last year.
On an adjusted basis for the nine months ended September 30, 2002, the loss per share was $0.05 compared to diluted earnings per share of $0.20 in last year's same period. The adjusted net loss was $842,000, compared to net income of $4.0 million in the first nine months of 2001.
Outlook, Reduction in Excess Search Capacity, and Related Special Charges
Revenue in the fourth quarter is typically affected negatively by the holiday season, and the current soft economies worldwide are likely to compound this situation. With that in mind, Heidrick & Struggles believes net revenue for the 2002 fourth quarter will be in the range of $70 million to $80 million. At those revenue levels, the company estimates that 2002 fourth quarter diluted earnings per share on an adjusted basis could range from $0.01 to $0.05.
Heidrick & Struggles is assuming that worldwide economic weakness will continue, resulting in little or no revenue growth next year. In addition, the cost structure in Europe continues to be too high for its present revenue level. Therefore the company intends to trim excess search capacity by further reducing its workforce. This reduction is expected to include approximately 200 positions, of which more than 50 will be search consultants. More than half of the total positions eliminated will be in Europe. The company will also close or downsize up to 20 additional offices. During the 2002 fourth quarter, the company estimates that it will incur between $20 million and $25 million in special charges for severance and other costs related to these actions and that its annual cost savings associated with these actions will be in the range of $18 million to $20 million.
"We have examined our spending priorities and identified three objectives for 2003: first, to provide investors with a reasonable return; second, to pay our top performers competitively; and third, to invest selectively in our business. In order to achieve these goals in this economic environment we can no longer afford to carry all of our existing excess search capacity," said Marmion. "By taking these steps we expect to improve our profitability and create the best platform for healthy growth over the longer term."
Webcast of Investor Call Available
To review its 2002 third quarter financial results, the company will provide a real-time webcast of the related investor call on Thursday, October 31, 2002, at 9:00 a.m. Central Time. The call will last up to one hour and will feature remarks by Piers Marmion, Chairman and Chief Executive Officer, and Kevin Smith, Chief Financial Officer. The webcast will be available online at www.heidrick.com . Listeners should log on approximately ten minutes in advance to ensure they are set up to receive the webcast. A replay will be available for up to 30 days. The webcast will also be available through CCBN's Investor Distribution Network. Individual investors can listen to the webcast through CCBN's individual investor center at biz.yahoo.com/cc/. Institutional investors can access the webcast via CCBN's password-protected event management site, StreetEvents, at www.streetevents.com .
About Heidrick & Struggles International, Inc.
Heidrick & Struggles International, Inc. is the world's premier provider of executive search and leadership consulting services. Currently, approximately 1,600 Heidrick & Struggles search professionals and employees operate from locations primarily in North America, Latin America, Europe, and Asia Pacific. For nearly 50 years, Heidrick & Struggles has specialized in chief executive, board member and senior-level management search assignments for a broad spectrum of clients: multi-national corporations, mid-cap and start-up companies, nonprofit entities, educational institutions, foundations, associations and governmental units. The company is expanding its range of complementary services to offer solutions to senior management teams for their leadership needs, including recruitment of emerging talent, executive assessment, interim executive placement, and professional development. For more information about Heidrick & Struggles, visit www.heidrick.com .
Safe Harbor Statement
This news 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," and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. Factors that may affect the outcome of the forward-looking statements include, among other things, our ability to attract and retain qualified executive search consultants; further deterioration of the economies in the United States, Europe or elsewhere; social or political instability in overseas markets; price competition; an inability to achieve the planned cost savings from our cost-reduction initiatives; an inability to sublease or assign unused office space; and delays in the development and/or implementation of new technology and systems. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Heidrick & Struggles International, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended September 30,
2002 2001
Actual Adjust Pro Actual Adjust Pro
forma forma
Revenue:
Revenue before
reimbursements
(net revenue) $87,356 $- $87,356 $104,618 $- $104,618
Reimbursements (A) 6,507 (6,507) - 6,779 (6,779) -
Total revenue 93,863 (6,507) 87,356 111,397 (6,779) 104,618
Operating expense:
Salaries and
employee benefits 56,244 - 56,244 77,465 - 77,465
General and
administrative
expenses (B) 27,558 - 27,558 32,873 (744) 32,129
Reimbursed
expenses (A) 6,507 (6,507) - 6,779 (6,779) -
Special charges (C) - - - 2,272 (2,272) -
Total operating
expenses 90,309 (6,507) 83,802 119,389 (9,795) 109,594
Operating income
(loss) 3,554 - 3,554 (7,992) 3,016 (4,976)
Non-operating
income (expense):
Interest income 479 - 479 1,124 - 1,124
Interest expense (71) - (71) (34) - (34)
Net realized and
unrealized gains
(losses) on equity
and warrant
portfolio (D)(E) (801) 801 - (2,626) 2,626 -
Write-down of
long-term
investment (F) - - - (9,760) 9,760 -
Other, net (576) - (576) (14) - (14)
Net non-operating
income (expense) (969) 801 (168) (11,310) 12,386 1,076
Income (loss)
before income
taxes 2,585 801 3,386 (19,302) 15,402 (3,900)
Provision for
(benefit from)
income taxes 1,661 482 2,143 (6,295) 5,722 (573)
Net income (loss) $924 $319 $1,243 $(13,007) $9,680 $(3,327)
Basic earnings (loss)
per common share $0.05 $0.07 $(0.69) $(0.18)
Basic weighted
average common
shares outstanding 18,129 18,129 18,735 18,735
Diluted earnings
(loss) per common
share $0.05 $0.07 $(0.69) $(0.18)
Diluted weighted
average common
shares outstanding 19,008 19,008 18,735 18,735
Salaries and
employee benefits
margin 64.4% 64.4% 74.0% 74.0%
General and
administrative
expense margin 31.5% 31.5% 31.4% 30.7%
Effective tax rate 64.3% 63.3% 32.6% 14.7%
Notes for the three months ended September 30, 2002 and September 30, 2001:
(A) In November 2001, the Emerging Issues Task Force reached a consensus on Issue No. 01-14, "Income Statement Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses Incurred" (EITF 01-14). EITF 01-14 establishes that reimbursements received for certain out-of-pocket expenses should be reported as revenue. Historically, the Company classified reimbursements of out-of-pocket expenses as a reduction of operating expenses. The Company has adopted this guidance in 2002. The pro forma results exclude the impact of adopting EITF 01-14.
(B) On January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Under the new rule, goodwill is no longer amortized. The 2001 third quarter pro forma results exclude $744,000 of goodwill amortization.
(C) During the 2001 second quarter, the Company announced a reduction of its workforce. As a result of this workforce reduction, the Company incurred special charges of $2.3 million for severance and related costs in the 2001 third quarter. The pro forma results for the 2001 third quarter exclude the impact of these special charges.
(D) The pro forma results for the three months ended September 30, 2002 and 2001, respectively, exclude realized gains of $950,000 and $219,000, resulting from sales of equity securities, net of consultants' bonuses and administrative and other costs.
(E) On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and its subsequent amendments. For the three months ended September 30, 2002 and 2001, respectively, the Company recorded unrealized losses of $1.8 million and $2.8 million, net of consultants' bonuses and administrative and other costs, due to SFAS No. 133. The 2002 and 2001 pro forma results exclude the impact of these unrealized losses.
(F) During the 2001 third quarter, the Company wrote-down its investment in Silicon Valley Internet Capital, incurring a charge of $9.8 million. The pro forma results exclude the impact of this write-down.
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
SEGMENT INFORMATION - AS ADJUSTED
(In thousands)
Three Months Ended September 30,
2002 2001
2002 2001 $ Change % Change Margin Margin
Net Revenue (A) (B)
North America $47,426 $60,234 $(12,808) -21.3%
Latin America 3,199 3,651 (452) -12.4%
Europe 31,182 33,939 (2,757) -8.1%
Asia Pacific 5,549 6,794 (1,245) -18.3%
Total Company $87,356 $104,618 $(17,262) -16.5%
Operating Income
(Loss) (B)
North America (C) $10,274 $5,278 $4,996 94.7% 21.7% 8.8%
Latin America (1,071) (702) (369) -52.6%
Europe (C) 1,028 (2,113) 3,141 3.3%
Asia Pacific (C) 431 692 (261) -37.7% 7.8% 10.2%
Total Search 10,662 3,155 7,507 12.2% 3.0%
Corporate (C) (7,108) (8,131) 1,023 12.6%
Total Company (D) $3,554 $(4,976) $8,530 4.1%
Notes for the three months ended September 30, 2002 and September 30,
2001:
(A) In November 2001, the Emerging Issues Task Force reached a consensus on Issue No. 01-14, "Income Statement Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses Incurred" (EITF 01-14). EITF 01-14 establishes that reimbursements received for certain out-of-pocket expenses should be reported as revenue. Historically, the Company classified reimbursements of out-of-pocket expenses as a reduction of operating expenses. The Company has adopted this guidance in 2002. The pro forma segment information for the three months ended September 30, 2002 and 2001 excludes the impact of
adopting EITF 01-14.
(B) As of January 1, 2002, the Company completed the integration of LeadersOnline, its mid-level recruiting business, into the Executive Search business. The 2001 third quarter segment information has been restated to reflect this change.
(C) On January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill is no longer amortized. For the three months ended September 30, 2001, the pro forma operating
results exclude goodwill amortization of $189,000 in North America, $195,000 in Europe, $17,000 in Asia Pacific and $343,000 in Corporate.
(D) During the 2001 second quarter, the Company announced a reduction of its workforce. As a result of this workforce reduction, the Company incurred special charges of $2.3 million for severance and related costs in the 2001 third quarter. The 2001 third quarter pro forma segment information excludes the impact of these special charges.
Heidrick & Struggles International, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Nine Months Ended September 30,
2002 2001
Actual Adjust Pro Actual Adjust Pro
forma forma
Revenue:
Revenue before
reimbursements
(net revenue) $272,555 $- $272,555 $367,057 $- $367,057
Reimbursements
(A) 19,824 (19,824) - 21,043 (21,043) -
Total
revenue 292,379 (19,824) 272,555 388,100 (21,043) 367,057
Operating expense:
Salaries and
employee
benefits 189,414 - 189,414 245,105 - 245,105
General and
administrative
expenses (B) 83,618 - 83,618 118,942 (1,823) 117,119
Reimbursed
expenses (A) 19,824 (19,824) - 21,043 (21,043) -
Special
charges (C) 23,169 (23,169) - 10,435 (10,435) -
Total
operating
expenses 316,025 (42,993) 273,032 395,525 (33,301) 362,224
Operating
income
(loss) (23,646) 23,169 (477) (7,425) 12,258 4,833
Non-operating income
(expense):
Interest income 1,390 - 1,390 4,604 - 4,604
Interest expense (159) - (159) (113) - (113)
Net realized and
unrealized gains
(losses) on
equity and
warrant
portfolio (D)(E) (2,043) 2,043 - (4,647) 4,647 -
Write-down of
long-term
investments (F) (5,000) 5,000 - (9,760) 9,760 -
Other, net (469) - (469) (440) - (440)
Net non-
operating
income
(expense) (6,281) 7,043 762 (10,356) 14,407 4,051
Income (loss) before
income taxes and
cumulative effect
of accounting
change (29,927) 30,212 285 (17,781) 26,665 8,884
Provision for
(benefit from)
income taxes (9,719) 10,846 1,127 (5,641) 10,566 4,925
Net income (loss)
before cumulative
effect of
accounting
change (20,208) 19,366 (842) (12,140) 16,099 3,959
Cumulative effect
of accounting
change (G) - - - 4,494 (4,494) -
Net income
(loss) $(20,208) $19,366 $(842) $(7,646) $11,605 $3,959
Basic earnings
(loss) per
common share $(1.12) $(0.05) $(0.40) $0.21
Basic weighted
average common
shares
outstanding 18,093 18,093 19,115 19,115
Diluted earnings
(loss) per common
share $(1.12) $(0.05) $(0.40) $0.20
Diluted weighted
average common
shares
outstanding 18,093 18,093 19,115 20,166
Salaries and
employee benefits
margin 69.5% 69.5% 66.8% 66.8%
General and
administrative
expense margin 30.7% 30.7% 32.4% 31.9%
Effective tax
rate 32.5% 395.4% 31.7% 55.4%
Notes for the nine months ended September 30, 2002 and September 30, 2001:
(A) In November 2001, the Emerging Issues Task Force reached a consensus on Issue No. 01-14, "Income Statement Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses Incurred" (EITF 01-14). EITF 01-14 establishes that reimbursements received for certain out-of-pocket expenses should be reported as revenue. Historically, the Company classified reimbursements of out-of-pocket expenses as a reduction of operating expenses. The Company has adopted this guidance in 2002. The pro forma results exclude the impact of adopting EITF 01-14.
(B) On January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." Under the new rule, goodwill is no longer amortized. The pro forma results for the nine months ended September 30, 2001 exclude approximately $1.8 million of goodwill amortization.
(C) During the 2001 second quarter, the Company announced a reduction of its workforce and recognized special charges of $10.4 million for severance and related costs.
During the 2001 fourth quarter, the Company announced additional reductions of its workforce and the consolidation and closing of offices. In the 2002 first quarter, the Company recognized special charges of $23.2 million related to these announced initiatives.
The pro forma results for the nine months ended September 30, 2002 and 2001 exclude the impact of these special charges.
(D) The pro forma results for the nine months ended September 30, 2002 and 2001, respectively, exclude realized gains of $997,000 and $867,000 resulting from sales of equity securities, net of consultants' bonuses and administrative and other costs.
(E) On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and its subsequent amendments. For the nine months ended September 30, 2002 and 2001, respectively, the Company recorded unrealized losses of $3.0 million and $5.5 million, net of consultants' bonuses and administrative and other costs, due to SFAS No. 133. The 2002 and 2001 pro forma results exclude the impact of these unrealized losses.
(F) During the second quarter of 2002, the Company wrote-down its investment in the ETF Group, incurring a non-cash charge of $5.0 million. During the 2001 third quarter, the Company wrote-down its investment in Silicon Valley Internet Capital, incurring a charge of $9.8 million. The 2002 and 2001 pro forma results exclude the impact of these write-downs.
(G) As a result of the adoption of SFAS No. 133, the Company recorded, as a cumulative effect of a change in accounting principle, a transition adjustment of $4.5 million, net of consultants' bonuses and other costs, and taxes. The pro forma results for the nine months ended September 30, 2001 exclude the impact of this change in accounting principle.
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
SEGMENT INFORMATION - AS ADJUSTED
(In thousands)
Nine Months Ended September 30,
2002 2001
2002 2001 $ Change % Change Margin Margin
Net Revenue (A) (B)
North America $149,487 $208,198 $(58,711) -28.2%
Latin America 8,670 11,520 (2,850) -24.7%
Europe 97,477 125,227 (27,750) -22.2%
Asia Pacific 16,921 22,112 (5,191) -23.5%
Total Company $272,555 $367,057 $(94,502) -25.7%
Operating Income
(Loss) (B)
North America (C) $22,883 $18,225 $4,658 25.6% 15.3% 8.8%
Latin America (2,648) (1,297) (1,351)
Europe (C) (229) 8,832 (9,061) 7.1%
Asia Pacific (C) 1,522 2,410 (888) -36.8% 9.0% 10.9%
Total Search 21,528 28,170 (6,642) -23.6% 7.9% 7.7%
Corporate (C) (22,005) (23,337) 1,332 5.7%
Total Company
(D) $(477) $4,833 $(5,310) 1.3%
Notes for the nine months ended September 30, 2002 and September 30, 2001:
(A) In November 2001, the Emerging Issues Task Force reached a consensus on Issue No. 01-14, "Income Statement Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses Incurred" (EITF 01-14). EITF 01-14 establishes that reimbursements received for certain out-of-pocket expenses should be reported as revenue. Historically, the Company classified reimbursements of out-of-pocket expenses as a reduction of operating expenses. The Company has adopted this guidance in 2002. The pro forma segment information for the nine months ended September 30, 2002 and 2001 excludes the impact of adopting EITF 01-14.
(B) As of January 1, 2002, the Company completed the integration of LeadersOnline, its mid-level recruiting business, into the Executive Search business. The 2001 pro forma year to date segment information has been restated to reflect this change.
(C) On January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill is no longer amortized. For the nine months ended September 30, 2001, the pro forma operating results exclude goodwill amortization of $567,000 in North America, $408,000 in Europe, $92,000 in Asia Pacific and $756,000 in Corporate.
(D) During the 2001 second quarter, the Company announced a reduction of its workforce, and recognized $10.4 million of special charges for severance and related costs.
During the 2001 fourth quarter, the Company announced additional reductions of its workforce and the consolidation and closing of offices. In the 2002 first quarter, the Company incurred special charges of $23.2 million related to these initiatives.
The pro forma segment information for the nine months ended September 30, 2002 and 2001 excludes the impact of these special charges.
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2002 2001
Current assets:
Cash and cash equivalents $109,670 $108,732
Accounts receivable, net of
allowance for doubtful accounts 57,134 54,241
Other receivables 3,749 5,870
Prepaid expenses 11,811 11,445
Income taxes recoverable - 22,958
Deferred income taxes 35,578 36,605
Total current assets 217,942 239,851
Property and equipment, net 41,585 54,364
Non-current assets:
Assets designated for pension plans 19,497 16,624
Investments 2,782 14,836
Other non-current assets 9,479 14,637
Deferred income taxes 24,287 7,089
Goodwill, net 51,769 51,110
Other intangibles, net 11,186 12,595
Total non-current assets 119,000 116,891
Total assets $378,527 $411,106
Current liabilities:
Current maturities of long-term debt $1,652 $2,480
Accounts payable 8,082 13,391
Accrued expenses-
Salaries and employee benefits 80,649 96,991
Other 20,793 18,955
Current portion of special charges 10,529 15,248
Income taxes payable 1,202 -
Total current liabilities 122,907 147,065
Non-current liabilities
Long-term debt, less current
maturities 693 1,959
Retirement and pension plans 23,226 19,092
Non-current portion of special charges 14,147 13,282
Other non-current liabilities 341 117
Total non-current liabilities 38,407 34,450
Stockholders' equity 217,213 229,591
Total liabilities and
stockholders' equity $378,527 $411,106
Source: Heidrick & Struggles International, Inc.