Heidrick & Struggles Records 41.8 Percent Drop in Q1 Revenues

May 5, 2009 – Chicago-based executive search firm Heidrick & Struggles International/(NASDAQ:HSII) has posted net revenue of $89.1 million, a decline of 41.8 percent from $153.1 million in the 2008 first quarter. Net revenue declined 40 percent in the Americas, 46.9 percent in Europe, and 36 percent in the Asia Pacific region. The firm reported a net loss of $18.9 million, or $1.15 per share, compared with a profit of $7.1 million, or 38 cents per share, in the same period a year earlier. The number of executive searches confirmed in the quarter dropped 38 percent compared to the 2008 first quarter. Productivity, as measured by annualized net revenue per consultant, was $900,000 compared to $1.5 million in the 2008 first quarter. The average fee per executive search was $98,900, compared to $106,700 in last year's first quarter. Chief executive officer L. Kevin Kelly said: "The negative impact of the global financial crisis and recession is no longer contained to one or two industries. Each of our practice groups and every region experienced double-digit revenue declines in the first quarter. Search confirmations hit a low in December and showed a modest but steady improvement through March. However, the improvement was not as strong as we had anticipated and operating losses in each region were a result of a cost structure that, despite cost-cutting initiatives, was not supported by first quarter revenue."

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