Caldwell Posts 25.8 Percent Revenue Decline

December 1, 2023 – Toronto-based Caldwell posted Q4 revenues of $21.9 million (Canadian), a 6.8 percent decrease from a year ago. For the full year, the firm reported revenues of 77.1 million, a decline of 25.8 percent from the prior year.

“Fiscal 2023 was a challenging year,” said John Wallace, chief executive officer. “We are a talent acquisition services firm fueled by hiring demand, and we saw a significant pullback in hiring at our clients that impacted both of our businesses. In our executive search segment, Caldwell’s fourth quarter revenue of $21.9 million represents a sequential quarterly increase of 2.3 percent and another profitable quarter,” he said. “Our executive search team continues to leverage their experience and expertise to push through a slower market, resulting in positive outcomes. We look forward to leveraging our all-time high partner count at Caldwell when hiring demand returns to historically normal levels.”

“In our on-demand talent acquisition support segment, IQTalent had the dual challenge of being an on-demand business with a heavy weighting in the technology sector, which has been the hardest hit sector during this negative economic cycle,” Mr. Wallace said. “Consequently, we saw both sequential and year-over-year decreases in revenue for the quarter. As hiring demand fell, leadership implemented significant restructuring initiatives to right size our staff to match revenue levels. We took a significant lease impairment charge to our IQTalent Nashville office of $8.1 million in the fourth quarter, reflecting the scaling back of our real estate footprint and intent to sublease two-thirds of our office space to match the reduced size of our operations.”

Caldwell Acquires The Counsel Network
Caldwell has acquired The Counsel Network Inc., a Canada-based executive search firm specializing in the Canadian legal market. The acquisition of was an all-cash deal, and no securities of Caldwell were issued in connection with the acquisition. “The Counsel Network is the most respected, connected, and powerful legal recruitment firm in Canada,” said Michael DeCosta, managing partner of Caldwell’s professional services practice. “This combination brings together two strong executive search brands with exceptional reputations borne of a true passion for achieving the best results for clients and candidates.”

“We are currently negotiating an opportunity to terminate our lease in its entirety which, if successful, may result in a reversal of up to the $8.1 million charge in fiscal 2024,” said Mr. Wallace. “We cannot accurately predict the likelihood of that transaction closing at this time; as such, we have reflected traditional sublease market rates to calculate the charge in our presented financials. We have also proactively adjusted our IQTalent leadership team structure in October, which now reflects a leaner team and stronger go-to-market strategy. With these measures completed, we are positioned for profitable growth with a return of hiring demand.”

Looking Ahead

“We continue to benefit from a solid balance sheet, cash, and liquidity position that has given us the financial flexibility to navigate through this past fiscal year while still allowing us to implement our strategic growth plans,” said Mr. Wallace. “We are confident in the strength of our company, our team, our service offerings, our balance sheet and our future. Our clients value our ability to provide seamless support for their talent acquisition needs at all levels, and by continuing to diversify our mix of services and cross-collaborating between our two business segments, we expect to continue to grow both businesses together.”

Related: Caldwell Recruits CHRO for PFB Corporation

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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