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CTPartners Executive Search Inc. Announces Third Quarter and Nine-Month 2012 Financial Results



  CTPartners Executive Search Inc. Announces Third Quarter and Nine-Month 2012
  Financial Results

  * Revenue Increases 5.5% Year-over-Year to $32 Million
  * GAAP Net Loss per Share of $0.04; Non-GAAP Net Earnings per Share of $0.04
  * New Search Assignments Increase 18.2% over Last Year

Business Wire

NEW YORK -- November 12, 2012

CTPartners Executive Search Inc. (NYSE MKT:CTP), a leading global retained
executive search firm, today announced its financial results for the third
quarter and nine-months, ended September 30, 2012.

Revenue for the third quarter was $32.0 million, a 5.5% increase from $30.3
million reported in last year’s third quarter. Revenues decreased sequentially
from $33.8 million reported in the second quarter 2012. On a GAAP basis, the
operating loss was $551,000, or fully diluted net loss per share of $0.04.
Excluding the one-time reorganization charge announced on August 9, 2012,
operating income was $413,289, or fully diluted earnings of $0.04 per share.
The Company reported operating income of $98,000, or fully diluted earnings
per share of $0.01, for the third quarter last year. Revenue and operating
income per share excluding the reorganization charge were at the high end of
the previously announced guidance for the third quarter 2012. A reconciliation
of reported to adjusted results, excluding reorganization charges, is included
in this press release.

“Our solid revenue growth of 5.5% to $32.0 million reflects our growing
position in the global executive recruitment industry,” said Brian Sullivan,
Chief Executive Officer. “During the quarter, we experienced strong
contributions from our newer Industrial and Consumer practices which
complemented the positive growth we saw in our Life Sciences industry
practice. Financial Services revenue was up slightly over last year
demonstrating our ability to move quickly into market segments where executive
recruitment services were in demand. We reduced G&A expense in the quarter and
began to realize the operational and financial benefits of our recent
reorganization. We continue to operate in a challenging market and will
continue to take the necessary steps to continue to deliver above market
revenue growth and improved profitability when the global economy improves.”

Revenue Breakdown by Region

YEAR
OVER      Q3 2012                 Q3 2011                                   
YEAR
By        Revenue        %        Revenue        %        Increase /       %      
Region                                                    (Decrease)
North     $ 19,114,200   59.7 %   $ 20,331,600   67.0 %   $ (1,217,400 )   -6.0  %
America
EMEA        7,012,500    21.9 %     8,021,700    26.4 %     (1,009,200 )   -12.6 %
Latin       3,865,300    12.1 %     -            0.0  %     3,865,300      100.0 %
America
Asia        2,013,400    6.3  %     1,984,000    6.6  %     29,400         1.5   %
Pacific
TOTAL     $ 32,005,400   100  %   $ 30,337,300   100  %   $ 1,668,100      5.5   %
                                                                          

Revenue Breakdown by Practice

YEAR OVER YEAR    Q3 2012                 Q3 2011                                   
By Practice       Revenue        %        Revenue        %        Increase /       %      
                                                                  (Decrease)
Financial         $ 9,562,000    29.9 %   $ 9,548,700    31.5 %   $ 13,300         0.1   %
Services
Life Sciences       6,639,100    20.7 %     5,232,300    17.3 %     1,406,800      26.9  %
TMT                 4,881,400    15.3 %     5,334,300    17.6 %     (452,900   )   -8.5  %
Professional        4,164,700    13.0 %     5,566,100    18.3 %     (1,401,400 )   -25.2 %
Services
Consumer/Retail     3,869,300    12.1 %     2,671,300    8.8  %     1,198,000      44.8  %
Industrial          2,888,900    9.0  %     1,984,600    6.5  %     904,300        45.6  %
TOTAL             $ 32,005,400   100  %   $ 30,337,300   100  %   $ 1,668,100      5.5   %
                                                                                  

Performance Metrics

                         Three Month Period Ended    Increase /   % Increase /
                         September 30                (Decrease)   (Decrease)
                           2012          2011                      
# of new search            318           269           49         18.2%
assignments
# of executive search      102           94            8          8.5%
consultants
Productivity             $ 1,255,100   $ 1,291,000   $ (35,900)   -2.8%
Avg. revenue per         $ 93,800      $ 100,100     $ (6,300)    -6.3%
executive search
Avg. revenue per
executive search excl.   $ 113, 640    $ 100,000     $ 13,540     13.5%
Latin America
                                                                 

Excluding Latin America, productivity and average revenue per executive search
would have been $1,308,800 and $113,640, respectively, in the current quarter,
compared to $1,291,000 and $100,100 in the third quarter of last year.

In the third quarter of 2012, the Company made 257 placements with a placement
rate of 72%. The Company stated that this softened rate highlights the
heightened scrutiny corporations have in adding to headcount in this difficult
environment. Average days to placement remained low at 145, compared to 142 in
the second quarter of 2012 and 139 in the year-ago period.

“In the third quarter, our performance metrics continued to exceed industry
averages and reflect our ability to deliver superior results for our clients,”
Brian Sullivan, CEO, added.

Cost Savings Initiatives

In the third quarter of 2012, the Company completed a plan to reorganize its
operations resulting in certain organizational changes in its Canadian and
EMEA locations. Workforce reorganization and elimination of redundant
positions allowed the Company to continue servicing all existing markets more
efficiently. In connection with this reorganization, CTPartners incurred
pretax costs of $964,000, principally severance and other employee-related
costs, or $0.08 per share, of which approximately $603,000 were or will become
cash expenditures. The Company expects that these cost savings will result in
annualized savings of $1.1 million.

Compensation and Benefits

Compensation and employee benefits expense for the third quarter 2012
increased to $25.8 million from $23.0 million for the year-ago quarter. As a
percentage of net revenue, compensation and benefits increased to 80.5% from
75.9% of net revenue in the third quarter 2011. Excluding the reorganization
charge, compensation and benefits expense was 77.0% of net revenue.

General and Administrative Expenses

General and administrative expenses decreased to $6.7 million, comprising
20.9% of net revenue compared to $7.1 million, or 23.5% of net revenue for the
third quarter 2011. After the reorganization credit of $150,000, the decline
in general and administrative expenses was due to decreases of $400,000 in
foreign currency transactions, $250,000 in bad debt expense, $200,000 in
consulting and professional fees, and $100,000 in IT infrastructure expense,
offset by the inclusion of $700,000 of operating expenses from the Latin
America offices.

Income Tax Rate

For the three-month period ended September 30, 2012, the Company reported a
loss before taxes of $595,000 and recorded an income tax benefit of $320,000,
compared to income before income taxes of $99,000 and income tax expense of
$9,000 for the three month period ended September 30, 2011. Due principally to
the recovery of tax credits not benefited in the prior two quarters of 2012
the Company realized an income tax benefit of $320,000 in the third quarter.

Cash

The cash balance at September 30, 2012 was $14.9 million compared to $23.0
million in the third quarter 2011, reflecting cash used in investing
activities related to the purchase of the Company’s Latin America affiliate
and share repurchase program. The cash balance at June 30, 2012 was $13.8
million.

Share Repurchase

During the third quarter 2012, CTPartners repurchased 213,300 shares of its
common stock at an average price per share of $4.03. As of September 30, 2012,
235,253 shares had been repurchased at an average price per share of $4.24, a
cost of $998,169, which is the cumulative amount used to repurchase shares
under the 2012 Share Repurchase Program.

Nine-Month Financial Results

For the nine months ended September 30, 2012, revenue totaled $98.2 million, a
4.5% increase over the $93.9 million reported for the nine months ended
September 30, 2011. Operating income for the nine-month period was $1.2
million compared with $2.1 million for the prior year period. Excluding
reorganization charge, operating income for the nine months ended September
30, 2012 was $2.2 million, compared to $2.1 million for the year-ago period.

Guidance

For the fourth quarter 2012, the Company expects revenue and EPS to be in the
range of $30.5 million to $31.5 million and a net loss of $(0.01) to earnings
per share of $0.02, respectively. Excluding the reorganization charges
incurred in the third quarter of 2012, the Company expects fully diluted EPS
for the full year 2012 to be in the range of $0.15 to $0.18.

Conference Call and Webcast

The Company will host a conference call and webcast on Tuesday, November 13,
at 9:00 AM ET. A replay of the event will be available for one week following
the conclusion of the live call.

Third Quarter 2012 Financial Results Conference Call and Webcast
Date: Tuesday, November 13, 2012
Time: 9:00 AM ET
 
Audio Webcast: http://investor.ctnet.com
Conference Line (U.S.): 800.901.5231
Conference Line (International): +1 617.786.2961
Participant Passcode: 59287051
 
Replay Conference Line (U.S.): 888.286.8010
Replay Conference Line (International): +1 617.801.6888
Replay Passcode: 91758044

About CTPartners

CTPartners is a leading performance-driven executive search firm serving
clients across the globe. Committed to a philosophy of partnering with its
clients, CTPartners offers a proven record in C-Suite, senior executive, and
board searches, as well as expertise serving private equity and venture
capital firms.

With origins dating back to 1980, CTPartners serves clients with a global
organization of more than 400 professionals and employees, offering expertise
in board advisory services and executive recruiting services in the financial
services, life sciences, industrial, professional services, retail and
consumer, and technology, media and telecom industries. Headquartered in New
York, CTPartners has 22 offices in 14 countries.

www.ctnet.com

Safe Harbor Statement

The following is a Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995:

This press release includes forward-looking statements. As a general matter,
forward-looking statements reflect our current expectations and projections
relating to our financial condition, results of operations, plans, objectives,
future performance and business. These statements may be identified by the use
of forward looking terminology such as "outlook," "believes," "expects,"
"potential," "continues," "may," "will," "should," "seeks," "approximately,"
"predicts," "intends," "plans," "estimates," "anticipates," or the negative
version of those words or other comparable words, but the absence of these
words does not necessarily mean that a statement is not forward-looking. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
the disclosure of forward-looking statements.

The forward-looking statements contained in this press release are based upon
our historical performance, current plans, estimates, expectations and other
factors we believe are appropriate under the circumstances. The inclusion of
this forward-looking information should not be regarded as a representation by
us that the future plans, estimates or expectations contemplated by us will be
achieved since these forward-looking statements are subject to various risks
and uncertainties and assumptions relating to our operations, financial
results, financial condition, business prospects, growth strategy and
liquidity. If one or more of these or other risks or uncertainties
materialize, or if our underlying assumptions prove to be incorrect, our
actual results may vary materially from those indicated in these statements.
Some of the key uncertainties and factors that could affect our future
performance and cause actual results to differ materially from those expressed
or implied by forward-looking statements are: our expectations regarding our
revenues, expenses and operations and our ability to sustain profitability;
our ability to recruit and retain qualified executive search consultants to
staff our operations appropriately; our ability to expand our customer base
and relationships, especially given the off-limit arrangements we are required
to enter into with certain of our clients; further declines in the global
economy and our ability to execute successfully through business cycles; our
anticipated cash needs; projected cost savings as a result of reorganization;
our anticipated growth strategies and sources of new revenues; unanticipated
trends and challenges in our business and the markets in which we operate;
social or political instability in markets where we operate; the impact of
foreign currency exchange rate fluctuations; price competition; the ability to
forecast, on a quarterly basis, variable compensation accruals that ultimately
are determined based on the achievement of annual results; and the mix of
profit and loss by country in which we operate.

The above list should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included in our
annual report on Form 10-K filed on March 22, 2012. The forward looking
statements included in this press release are made only as of the date hereof.
We do not undertake any obligation to update or review any forward-looking
statement, whether as a result of new information, future developments or
otherwise. You should, however, review the factors and risks we describe in
the reports we will file from time to time with the Securities and Exchange
Commission.

CTPARTNERS EXECUTIVE SEARCH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                                               
                                              September 30,     December 31,
                                              2012              2011
Assets
Current Assets
Cash                                          $  14,903,138     $ 21,830,120
Accounts receivable, net                         24,555,670       19,612,236
Other receivables                                120,688          559,526
Prepaid expenses                                 2,619,917        2,394,872
Deferred income taxes                            637,697          1,769,936
Income taxes receivable                          1,761,601        1,592,562
Other                                            1,702,508        712,519
Total current assets                             46,301,219       48,471,771
Non-current Assets
Leasehold Improvements and Equipment, net        3,685,417        4,332,865
Goodwill                                         7,406,879        0
Intangibles, net                                 2,497,500        0
Other Assets                                     2,485,767        2,056,931
Deferred Income Taxes                            1,466,962        678,554
                                              $  63,843,744     $ 55,540,121
Liabilities and Stockholders' Equity
Current Liabilities
Current portion of long-term debt             $  2,676,094      $ 155,340
Accounts payable                                 1,014,918        993,558
Accrued compensation                             26,138,153       23,660,070
Accrued business taxes                           1,449,218        741,141
Accrued expenses                                 3,138,453        3,032,950
Total current liabilities                        34,416,836       28,583,059
Long-Term Liabilities
Long-term debt, less current maturities          2,950,431        470,109
Deferred rent, less current maturities           1,452,997        1,649,070
Total long-term liabilities                      4,403,428        2,119,179
Stockholders' Equity
Preferred stock: 1,000,000 shares
authorized, no shares issued and                 0                0
outstanding
Common stock: $0.001 par value, 15,000,000
shares authorized, 7,409,247 shares issued;
6,983,561 and 7,110,360 shares outstanding       7,407            7,287
at September 30, 2012 and December 31,
2011, respectively.
Additional paid-in capital                       36,703,092       35,737,584
Accumulated deficit                              (8,402,275 )     (9,026,290 )
Accumulated other comprehensive loss             (1,234,932 )     (881,997   )
Treasury stock, at cost 425,686 and 176,271
shares at September 30, 2012 and December        (2,049,812 )     (998,701   )
31, 2011, respectively.
                                                 25,023,480       24,837,883
                                              $  63,843,744     $ 55,540,121
                                                                              

CTPARTNERS EXECUTIVE SEARCH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                                                      
                   Three Months Ended                Nine Months Ended

                   September 30,                     September 30,
                   2012             2011             2012              2011
                                                                      
Revenue
Net revenue        $ 32,005,389     $ 30,337,331     $ 98,162,399      $ 93,903,191
Reimbursable         1,151,349        1,401,167        3,342,755         3,837,491
expenses
Total Revenue        33,156,738       31,738,498       101,505,154       97,740,682
Operating
Expenses
Compensation and     25,761,870       23,026,941       76,076,047        71,933,882
benefits
General and          6,682,084        7,123,679        20,616,564        19,694,325
administrative
Reimbursable         1,263,675        1,490,133        3,608,776         4,002,965
expenses
Total Operating      33,707,629       31,640,753       100,301,387       95,631,172
Expenses
Operating income     (550,891   )     97,745           1,203,767         2,109,510
(loss)
Interest
(expense)            (44,214    )     1,445            (123,840    )     (2,021     )
income, net
Income (loss)
before income        (595,105   )     99,190           1,079,927         2,107,489
taxes
Income tax
benefit              319,796          (8,958     )     (455,912    )     (758,269   )
(expense)
Net income         $ (275,309   )   $ 90,232         $ 624,015         $ 1,349,220
(loss)
                                                                                     
Basic income
(loss) per         $ (0.04      )   $ 0.01           $ 0.09            $ 0.19
common share
Diluted income
(loss) per         $ (0.04      )   $ 0.01           $ 0.09            $ 0.18
common share
Basic
weighted-average     7,081,963        7,226,466        7,122,758         7,196,293
common shares
Diluted
weighted-average     7,081,963        7,498,137        7,215,356         7,467,964
common shares
                                                                                     

CTPARTNERS EXECUTIVE SEARCH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                               
                                               For the Nine Months Ended
                                               September 30,
                                               2012             2011
                                                               
Cash Flows From Operating Activities
Net income                                     $ 624,015        $ 1,349,220
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization                    1,175,226        941,482
Loss on leasehold improvements and equipment     1,019            37,430
disposal
Share-based compensation                         590,630          1,563,005
Reorganization charge                            882,088          0
Amortization of discount on seller note          130,470          0
Deferred income taxes                            343,831          405,161
Changes in operating assets and liabilities,
net of effects of acquired business
Accounts receivable, net                         (4,789,476 )     (1,788,191 )
Prepaid expenses                                 (336,064   )     (261,990   )
Income taxes receivable                          (169,039   )     (1,172,649 )
Other assets and receivables                     (1,436,979 )     (2,386,095 )
Accounts payable                                 18,180           (1,097,936 )
Accrued compensation                             2,615,748        5,356,561
Accrued business taxes                           722,983          (391,390   )
Accrued expenses                                 (199,749   )     (757,057   )
Deferred rent                                    (113,659   )     198,985     
Net cash provided by operating activities        59,224           1,996,536
Cash Flows From Investing Activities
Acquisition of a business                        (5,250,000 )     0
Purchase of leasehold improvements and           (177,903   )     (2,284,012 )
equipment
Net cash used in investing activities            (5,427,903 )     (2,284,012 )
Cash Flows From Financing Activities
Payments on long-term debt                       (116,091   )     (143,779   )
Repurchase of common stock                       (998,169   )     (436,061   )
Net cash used in financing activities            (1,114,260 )     (579,840   )
Net decrease in cash                             (6,482,939 )     (867,316   )
Effect of foreign currency on cash               (444,043   )     (165,608   )
Cash:
Beginning                                        21,830,120       24,030,543  
Ending                                         $ 14,903,138     $ 22,997,619  
                                                               
Supplemental Disclosure of Noncash Financing
Activities
Treasury stock (9,395 shares) acquired in      $ (52,942    )   $ 0
lieu of shareholder receivable
Employee discount stock purchase award in      $ 375,000        $ 0
lieu of cash compensation
                                                               
Supplemental Disclosure of Noncash Investing
Activities
Acquisition of a business
Total identifiable assets acquired             $ 2,829,818      $ 0
Goodwill                                         7,406,879        0           
                                               $ 10,236,697     $ 0
Less: Due to seller                              (4,986,697 )     0           
                                               $ 5,250,000      $ 0           
                                                                              

SELECTED FINANCIAL DATA EXCLUDING REORGANIZATION CHARGE OF $964,000
                                                                                                 
                 Selected Financial Data and Reconciliation of Non-GAAP Financial Measures for the Three Months
                 Ended
                 September 30, 2012                               September 30, 2011
                                  Effect of        Adjusted                      Effect of        Adjusted
                 Results of       Reorganization   Results of     Results of     Reorganization   Results of
                 Operations       Charge           Operations     Operations     Charge           Operations^(1)
                                                   ^(1)
Revenue
Net revenue      $ 32,005,389     $  0             $ 32,005,389   $ 30,337,331   $       0        $  30,337,331
Reimbursable       1,151,349         0               1,151,349      1,401,167            0           1,401,167
expenses
Total revenue      33,156,738        0               33,156,738     31,738,498           0           31,738,498
                                                                                  
Operating
expenses
Compensation       25,761,870        1,110,694       24,651,176     23,026,941           0           23,026,941
and benefits
General and        6,682,084         (146,514  )     6,828,598      7,123,679            0           7,123,679
administrative
Reimbursable       1,263,675         0               1,263,675      1,490,133            0           1,490,133
expenses
Total
Operating          33,707,629        964,180         32,743,449     31,640,753           0           31,640,753
Expenses
                                                                                                   
Operating          (550,891   )      (964,180  )     413,289        97,745       0                   97,745
income (loss)
                                                                                                   
Net income       $ (275,309   )   $  (575,615  )   $ 300,306      $ 90,232       $       0        $  90,232
(loss)
                                                                                                   
                                                                                                   
Basic income
per common       $ (0.04      )   $  (0.08     )   $ 0.04         $ 0.01         $       0        $  0.01
share
                                                                                                   
Diluted income
per common       $ (0.04      )   $  (0.08     )   $ 0.04         $ 0.01         $       0        $  0.01
share

^(1) Adjusted results are non-GAAP financial measures that exclude
reorganization charges of $964,000 (or $575,615, net of tax effect), for the
three and nine-month period ended September 30, 2012. No reorganization costs
were incurred during the three and nine-month period ended September 30, 2011.

Use of non-GAAP measures: The table above contains selected financial
information calculated other than in accordance with U.S. Generally Acceptable
Accounting Principles (“GAAP”). We define adjusted results of operations as:

  * Adjusted operating income is defined as operating income adjusted to
    exclude reorganization charges, net.
  * Adjusted net income is defined as net income adjusted to exclude
    reorganization charges, net of tax effect.
  * Adjusted basic and diluted earnings per share are calculated by adjusting
    the numerator by reorganization charges net of tax effect.

Contact:

CTPartners
Jennifer Silver, 617-316-5527
jsilver@ctnet.com
or
Investor Relations
EVC Group
Aimee Gordon, 646-445-4800
agordon@evcgroup.com
Robert Jones, 646-201-5447
bjones@evcgroup.com
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