Caldwell Sees COVID-19 Pandemic Impacting Search Business
April 6, 2020 – Toronto-based Caldwell posted Q2 revenues of $16.8 million (Canadian), a 15.8 percent jump from a year ago. But an impact from the pandemic is expected in coming quarters.
“Our team had a fantastic quarter but given the rapidly changing state of the world and the markets, our attention is solidly on the here and now,” said John Wallace, chief executive officer. “The COVID-19 pandemic is having a significant impact on the world, and we are certainly seeing follow-on effects on our business.”
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“Since the beginning of March, the actual and projected impact of the COVID-19 health crisis has deepened in our primary markets of Canada, the U.S. and the U.K., and developed into a global economic crisis,” he said.
In light of the uncertainty created by COVID-19, Caldwell is suspending its quarterly dividend, proactively managing its costs, preserving capital and enhancing liquidity.
Statement from Caldwell
“On Jan. 30, 2020, the World Health Organization (WHO) characterized COVID-19 a public health emergency,” Caldwell said. “At that time, there had not been a direct negative impact seen in the regions we operate in. On March 11, the WHO expanded its characterization of COVID-19 to a global pandemic. The duration and intensity of the impact of COVID-19 and resulting disruption to Caldwell’s operations are uncertain. Given the dynamic nature of these circumstances, it is unknown how the firm may be affected if such an epidemic persists for an extended period. Caldwell has evaluated subsequent events through April 2, 2020, the date the consolidated financial statements were available to be issued. While not yet quantifiable, the firm believes this situation could have a material adverse impact to its operating results in the short-term and will continue to assess the financial impact for the remainder of the year.”
Meanwhile, Caldwell said, the second quarter increase in revenues was attributable to an increase in the number of assignments to 124 (vs 2019: 89) partially offset by a lower average fee per assignment of $136,000 ($137,000 excluding exchange rate fluctuations; vs 2019: $163,000) resulting from executing searches with a lower average compensation level. The number of assignments grew on a higher number of assignments per partner at 3.1 (vs 2019: 2.3) and a slightly higher average number of partners at 39.5 (vs 2019: 39.3).
The firm also recently further expanded its Caldwell Advance team – focused on the recruitment of emerging leaders and advancing professionals – with the addition of talent optimization executive Todd Lingle. “This addition strengthens our ability to connect our clients with transformational talent in a more comprehensive way,” said Mr. Wallace. “We will continue to make strategic additions to our teams where it allows us to deliver long-term value to our clients.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
