|
|
|
|
Delaware
|
|
36-2681268
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification Number)
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
x
|
Non-Accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
Emerging growth company
|
|
o
|
|
|
|
|
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|
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PAGE
|
PART I.
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
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||
|
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Item 2.
|
||
|
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Item 3.
|
||
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Item 4.
|
||
|
|
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PART II.
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
164,216
|
|
|
$
|
207,534
|
|
Accounts receivable, net
|
|
158,107
|
|
|
98,700
|
|
||
Prepaid expenses
|
|
25,083
|
|
|
22,003
|
|
||
Other current assets
|
|
29,783
|
|
|
11,620
|
|
||
Income taxes recoverable
|
|
5,763
|
|
|
3,933
|
|
||
Total current assets
|
|
382,952
|
|
|
343,790
|
|
||
|
|
|
|
|
||||
Non-current assets
|
|
|
|
|
||||
Property and equipment, net
|
|
35,491
|
|
|
39,514
|
|
||
Assets designated for retirement and pension plans
|
|
16,554
|
|
|
17,130
|
|
||
Investments
|
|
21,013
|
|
|
21,319
|
|
||
Other non-current assets
|
|
19,546
|
|
|
8,999
|
|
||
Goodwill
|
|
122,445
|
|
|
118,892
|
|
||
Other intangible assets, net
|
|
2,535
|
|
|
2,158
|
|
||
Deferred income taxes
|
|
32,320
|
|
|
35,402
|
|
||
Total non-current assets
|
|
249,904
|
|
|
243,414
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
632,856
|
|
|
$
|
587,204
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
8,979
|
|
|
$
|
9,824
|
|
Accrued salaries and employee benefits
|
|
177,930
|
|
|
177,426
|
|
||
Deferred revenue
|
|
42,870
|
|
|
31,272
|
|
||
Other current liabilities
|
|
35,127
|
|
|
40,346
|
|
||
Income taxes payable
|
|
7,866
|
|
|
6,924
|
|
||
Total current liabilities
|
|
272,772
|
|
|
265,792
|
|
||
|
|
|
|
|
||||
Non-current liabilities
|
|
|
|
|
||||
Accrued salaries and employee benefits
|
|
40,946
|
|
|
40,308
|
|
||
Retirement and pension plans
|
|
43,536
|
|
|
44,802
|
|
||
Other non-current liabilities
|
|
21,769
|
|
|
23,597
|
|
||
Total non-current liabilities
|
|
106,251
|
|
|
108,707
|
|
||
|
|
|
|
|
||||
Total liabilities
|
|
379,023
|
|
|
374,499
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 18)
|
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at September 30, 2018 and December 31, 2017
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 100,000,000 shares authorized, 19,585,777 shares issued, 18,954,275 and 18,781,433 shares outstanding at September 30, 2018 and December 31, 2017, respectively
|
|
196
|
|
|
196
|
|
||
Treasury stock at cost, 631,502 and 804,344 shares at September 30, 2018 and December 31, 2017, respectively
|
|
(20,298
|
)
|
|
(26,096
|
)
|
||
Additional paid in capital
|
|
224,962
|
|
|
226,006
|
|
||
Retained earnings (deficit)
|
|
44,854
|
|
|
(716
|
)
|
||
Accumulated other comprehensive income
|
|
4,119
|
|
|
13,315
|
|
||
Total stockholders’ equity
|
|
253,833
|
|
|
212,705
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
632,856
|
|
|
$
|
587,204
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Revenue before reimbursements (net revenue)
|
$
|
187,588
|
|
|
$
|
159,800
|
|
|
$
|
530,718
|
|
|
$
|
452,020
|
|
Reimbursements
|
4,753
|
|
|
4,665
|
|
|
13,970
|
|
|
13,740
|
|
||||
Total revenue
|
192,341
|
|
|
164,465
|
|
|
544,688
|
|
|
465,760
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits
|
133,933
|
|
|
108,546
|
|
|
373,021
|
|
|
309,159
|
|
||||
General and administrative expenses
|
33,072
|
|
|
37,232
|
|
|
105,532
|
|
|
111,454
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
39,158
|
|
||||
Reimbursed expenses
|
4,753
|
|
|
4,665
|
|
|
13,970
|
|
|
13,740
|
|
||||
Total operating expenses
|
171,758
|
|
|
150,443
|
|
|
492,523
|
|
|
473,511
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
20,583
|
|
|
14,022
|
|
|
52,165
|
|
|
(7,751
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest, net
|
259
|
|
|
94
|
|
|
496
|
|
|
195
|
|
||||
Other, net
|
2,345
|
|
|
147
|
|
|
1,849
|
|
|
(2,773
|
)
|
||||
Net non-operating income (expense)
|
2,604
|
|
|
241
|
|
|
2,345
|
|
|
(2,578
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
23,187
|
|
|
14,263
|
|
|
54,510
|
|
|
(10,329
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Provision for (benefit from) income taxes
|
6,718
|
|
|
6,092
|
|
|
16,410
|
|
|
(902
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
16,469
|
|
|
8,171
|
|
|
38,100
|
|
|
(9,427
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(881
|
)
|
|
995
|
|
|
(3,107
|
)
|
|
5,779
|
|
||||
Net unrealized gain on available-for-sale investments
|
—
|
|
|
624
|
|
|
—
|
|
|
1,858
|
|
||||
Other comprehensive income (loss), net of tax
|
(881
|
)
|
|
1,619
|
|
|
(3,107
|
)
|
|
7,637
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
$
|
15,588
|
|
|
$
|
9,790
|
|
|
$
|
34,993
|
|
|
$
|
(1,790
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
18,954
|
|
|
18,781
|
|
|
18,905
|
|
|
18,720
|
|
||||
Diluted
|
19,401
|
|
|
19,016
|
|
|
19,444
|
|
|
18,720
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.87
|
|
|
$
|
0.44
|
|
|
$
|
2.02
|
|
|
$
|
(0.50
|
)
|
Diluted
|
$
|
0.85
|
|
|
$
|
0.43
|
|
|
$
|
1.96
|
|
|
$
|
(0.50
|
)
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends paid per share
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
|
|
|
|
Additional
Paid in
Capital
|
|
Retained Earnings (Deficit)
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
|
||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
|||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2017
|
19,586
|
|
|
$
|
196
|
|
|
805
|
|
|
$
|
(26,096
|
)
|
|
$
|
226,006
|
|
|
$
|
(716
|
)
|
|
$
|
13,315
|
|
|
$
|
212,705
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,100
|
|
|
—
|
|
|
38,100
|
|
||||||
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,043
|
|
|
(6,089
|
)
|
|
8,954
|
|
||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,107
|
)
|
|
(3,107
|
)
|
||||||
Common and treasury stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,763
|
|
|
—
|
|
|
—
|
|
|
6,763
|
|
||||||
Vesting of equity, net of tax withholdings
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
5,604
|
|
|
(7,838
|
)
|
|
—
|
|
|
—
|
|
|
(2,234
|
)
|
||||||
Re-issuance of treasury stock
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
194
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
225
|
|
||||||
Cash dividends declared ($0.39 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,389
|
)
|
|
—
|
|
|
(7,389
|
)
|
||||||
Dividend equivalents on restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(184
|
)
|
|
—
|
|
|
(184
|
)
|
||||||
Balance at September 30, 2018
|
19,586
|
|
|
$
|
196
|
|
|
632
|
|
|
$
|
(20,298
|
)
|
|
$
|
224,962
|
|
|
$
|
44,854
|
|
|
$
|
4,119
|
|
|
$
|
253,833
|
|
|
|
Nine Months Ended
September 30, |
||||||
|
|
2018
|
|
2017
|
||||
Cash flows - operating activities
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
38,100
|
|
|
$
|
(9,427
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
9,558
|
|
|
11,270
|
|
||
Deferred income taxes
|
|
(438
|
)
|
|
(15,340
|
)
|
||
Stock-based compensation expense
|
|
6,763
|
|
|
3,915
|
|
||
Accretion expense related to earnout payments
|
|
963
|
|
|
836
|
|
||
Impairment charges
|
|
—
|
|
|
39,158
|
|
||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
||||
Accounts receivable
|
|
(60,057
|
)
|
|
(32,603
|
)
|
||
Accounts payable
|
|
(761
|
)
|
|
49
|
|
||
Accrued expenses
|
|
3,834
|
|
|
(38,043
|
)
|
||
Restructuring accrual
|
|
(10,833
|
)
|
|
—
|
|
||
Deferred revenue
|
|
185
|
|
|
6,061
|
|
||
Income taxes payable, net
|
|
(2,003
|
)
|
|
(44
|
)
|
||
Retirement and pension plan assets and liabilities
|
|
(1,019
|
)
|
|
2,798
|
|
||
Prepaid expenses
|
|
(3,416
|
)
|
|
(1,631
|
)
|
||
Other assets and liabilities, net
|
|
(3,761
|
)
|
|
(3,000
|
)
|
||
Net cash used in operating activities
|
|
(22,885
|
)
|
|
(36,001
|
)
|
||
|
|
|
|
|
||||
Cash flows - investing activities
|
|
|
|
|
||||
Acquisition of business
|
|
(3,119
|
)
|
|
(364
|
)
|
||
Capital expenditures
|
|
(4,939
|
)
|
|
(13,161
|
)
|
||
Purchases of available-for-sale investments
|
|
(2,046
|
)
|
|
(2,117
|
)
|
||
Proceeds from sales of available-for-sale investments
|
|
2,890
|
|
|
1,271
|
|
||
Net cash used in investing activities
|
|
(7,214
|
)
|
|
(14,371
|
)
|
||
|
|
|
|
|
||||
Cash flows - financing activities
|
|
|
|
|
||||
Proceeds from line of credit
|
|
20,000
|
|
|
40,000
|
|
||
Payments on line of credit
|
|
(20,000
|
)
|
|
(40,000
|
)
|
||
Cash dividends paid
|
|
(7,573
|
)
|
|
(7,676
|
)
|
||
Payment of employee tax withholdings on equity transactions
|
|
(2,234
|
)
|
|
(2,392
|
)
|
||
Acquisition earnout payments
|
|
—
|
|
|
(4,557
|
)
|
||
Net cash used in financing activities
|
|
(9,807
|
)
|
|
(14,625
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
|
|
(3,442
|
)
|
|
5,766
|
|
||
|
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricted cash
|
|
(43,348
|
)
|
|
(59,231
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
208,162
|
|
|
165,569
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
164,814
|
|
|
$
|
106,338
|
|
1.
|
Basis of Presentation of Interim Financial Information
|
2.
|
Summary of Significant Accounting Policies
|
|
September 30,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2017
|
|
2016
|
||||||||
Cash and cash equivalents
|
$
|
164,216
|
|
|
$
|
105,718
|
|
|
$
|
207,534
|
|
|
$
|
165,011
|
|
Restricted cash included within other current assets
|
598
|
|
|
265
|
|
|
526
|
|
|
139
|
|
||||
Restricted cash included within other non-current assets
|
—
|
|
|
355
|
|
|
102
|
|
|
419
|
|
||||
Total cash, cash equivalents and restricted cash
|
$
|
164,814
|
|
|
$
|
106,338
|
|
|
$
|
208,162
|
|
|
$
|
165,569
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
16,469
|
|
|
$
|
8,171
|
|
|
$
|
38,100
|
|
|
$
|
(9,427
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
18,954
|
|
|
18,781
|
|
|
18,905
|
|
|
18,720
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
278
|
|
|
187
|
|
|
345
|
|
|
—
|
|
||||
Performance stock units
|
169
|
|
|
48
|
|
|
194
|
|
|
—
|
|
||||
Diluted
|
19,401
|
|
|
19,016
|
|
|
19,444
|
|
|
18,720
|
|
||||
Basic earnings per share
|
$
|
0.87
|
|
|
$
|
0.44
|
|
|
$
|
2.02
|
|
|
$
|
(0.50
|
)
|
Diluted earnings per share
|
$
|
0.85
|
|
|
$
|
0.43
|
|
|
$
|
1.96
|
|
|
$
|
(0.50
|
)
|
|
December 31,
2017 |
|
ASU 2014-09 Adjustments
|
|
ASU 2016-01 Adjustments
|
|
January 1,
2018 |
||||||||
Current assets
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
$
|
11,620
|
|
|
$
|
14,689
|
|
|
$
|
—
|
|
|
$
|
26,309
|
|
Total current assets
|
343,790
|
|
|
14,689
|
|
|
—
|
|
|
358,479
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
|
|
|
|
|
|
|
||||||||
Deferred income taxes
|
35,402
|
|
|
(3,099
|
)
|
|
—
|
|
|
32,303
|
|
||||
Total non-current assets
|
243,414
|
|
|
(3,099
|
)
|
|
—
|
|
|
240,315
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
587,204
|
|
|
$
|
11,590
|
|
|
$
|
—
|
|
|
$
|
598,794
|
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
|
|
|
|
|
|
|
||||||||
Deferred revenue
|
31,272
|
|
|
(1,059
|
)
|
|
—
|
|
|
30,213
|
|
||||
Other current liabilities
|
40,346
|
|
|
3,695
|
|
|
—
|
|
|
44,041
|
|
||||
Total current liabilities
|
265,792
|
|
|
2,636
|
|
|
—
|
|
|
268,428
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total liabilities
|
$
|
374,499
|
|
|
$
|
2,636
|
|
|
$
|
—
|
|
|
$
|
377,135
|
|
|
|
|
|
|
|
|
|
||||||||
Stockholders' equity
|
|
|
|
|
|
|
|
||||||||
Retained earnings (deficit)
|
(716
|
)
|
|
8,954
|
|
|
6,089
|
|
|
14,327
|
|
||||
Accumulated other comprehensive income
|
13,315
|
|
|
—
|
|
|
(6,089
|
)
|
|
7,226
|
|
||||
Total stockholders’ equity
|
212,705
|
|
|
8,954
|
|
|
—
|
|
|
221,659
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
587,204
|
|
|
$
|
11,590
|
|
|
$
|
—
|
|
|
$
|
598,794
|
|
|
September 30, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of ASU 2014-09
|
|
Effect of Adoption Higher/(Lower)
|
||||||
Current assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
29,783
|
|
|
$
|
12,678
|
|
|
$
|
17,105
|
|
Total current assets
|
382,952
|
|
|
365,847
|
|
|
17,105
|
|
|||
|
|
|
|
|
|
||||||
Non-current assets
|
|
|
|
|
|
||||||
Deferred income taxes
|
32,320
|
|
|
35,419
|
|
|
(3,099
|
)
|
|||
Total non-current assets
|
249,904
|
|
|
253,003
|
|
|
(3,099
|
)
|
|||
|
|
|
|
|
|
||||||
Total assets
|
$
|
632,856
|
|
|
$
|
618,850
|
|
|
$
|
14,006
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
||||||
Accrued salaries and employee benefits
|
177,930
|
|
|
176,984
|
|
|
946
|
|
|||
Deferred revenue
|
42,870
|
|
|
43,531
|
|
|
(661
|
)
|
|||
Other current liabilities
|
35,127
|
|
|
30,760
|
|
|
4,367
|
|
|||
Income taxes payable
|
7,866
|
|
|
7,746
|
|
|
120
|
|
|||
Total current liabilities
|
272,772
|
|
|
268,000
|
|
|
4,772
|
|
|||
|
|
|
|
|
|
||||||
Total liabilities
|
$
|
379,023
|
|
|
$
|
374,251
|
|
|
$
|
4,772
|
|
|
|
|
|
|
|
||||||
Stockholders' equity
|
|
|
|
|
|
||||||
Retained earnings (deficit)
|
44,854
|
|
|
35,620
|
|
|
9,234
|
|
|||
Total stockholders’ equity
|
253,833
|
|
|
244,599
|
|
|
9,234
|
|
|||
|
|
|
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
632,856
|
|
|
$
|
618,850
|
|
|
$
|
14,006
|
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
|
As Reported
|
|
Balances Without Adoption of ASU 2014-09
|
|
Effect of Adoption
Higher/(Lower)
|
|
As Reported
|
|
Balances Without Adoption of ASU 2014-09
|
|
Effect of Adoption
Higher/(Lower)
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue before reimbursements (net revenue)
|
$
|
187,588
|
|
|
$
|
187,720
|
|
|
$
|
(132
|
)
|
|
$
|
530,718
|
|
|
$
|
529,372
|
|
|
$
|
1,346
|
|
Reimbursements
|
4,753
|
|
|
4,753
|
|
|
—
|
|
|
13,970
|
|
|
13,970
|
|
|
—
|
|
||||||
Total revenue
|
192,341
|
|
|
192,473
|
|
|
(132
|
)
|
|
544,688
|
|
|
543,342
|
|
|
1,346
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Salaries and employee benefits
|
133,933
|
|
|
134,017
|
|
|
(84
|
)
|
|
373,021
|
|
|
372,075
|
|
|
946
|
|
||||||
General and administrative expenses
|
33,072
|
|
|
33,072
|
|
|
—
|
|
|
105,532
|
|
|
105,532
|
|
|
—
|
|
||||||
Reimbursed expenses
|
4,753
|
|
|
4,753
|
|
|
—
|
|
|
13,970
|
|
|
13,970
|
|
|
—
|
|
||||||
Total operating expenses
|
171,758
|
|
|
171,842
|
|
|
(84
|
)
|
|
492,523
|
|
|
491,577
|
|
|
946
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
20,583
|
|
|
20,631
|
|
|
(48
|
)
|
|
52,165
|
|
|
51,765
|
|
|
400
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest, net
|
259
|
|
|
259
|
|
|
—
|
|
|
496
|
|
|
496
|
|
|
—
|
|
||||||
Other, net
|
2,345
|
|
|
2,345
|
|
|
—
|
|
|
1,849
|
|
|
1,849
|
|
|
—
|
|
||||||
Net non-operating income (expense)
|
2,604
|
|
|
2,604
|
|
|
—
|
|
|
2,345
|
|
|
2,345
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
23,187
|
|
|
23,235
|
|
|
(48
|
)
|
|
54,510
|
|
|
54,110
|
|
|
400
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes
|
6,718
|
|
|
6,736
|
|
|
(18
|
)
|
|
16,410
|
|
|
16,290
|
|
|
120
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
16,469
|
|
|
$
|
16,499
|
|
|
$
|
(30
|
)
|
|
$
|
38,100
|
|
|
$
|
37,820
|
|
|
$
|
280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per share
|
$
|
0.87
|
|
|
$
|
0.87
|
|
|
$
|
—
|
|
|
$
|
2.02
|
|
|
$
|
2.00
|
|
|
$
|
0.02
|
|
Diluted earnings per share
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
—
|
|
|
$
|
1.96
|
|
|
$
|
1.95
|
|
|
$
|
0.01
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of ASU 2014-09
|
|
Effect of Adoption
Higher/(Lower)
|
||||||
Cash flows - operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
38,100
|
|
|
$
|
37,820
|
|
|
$
|
280
|
|
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accrued expenses
|
3,834
|
|
|
(1,479
|
)
|
|
5,313
|
|
|||
Deferred revenue
|
185
|
|
|
2,843
|
|
|
(2,658
|
)
|
|||
Income taxes payable, net
|
(2,003
|
)
|
|
(2,123
|
)
|
|
120
|
|
|||
Other assets and liabilities, net
|
$
|
(3,761
|
)
|
|
$
|
(705
|
)
|
|
$
|
(3,056
|
)
|
3.
|
Revenue
|
|
January 1,
2018 |
|
September 30,
2018 |
|
Variance
|
||||||
Contract assets
|
|
|
|
|
|
||||||
Unbilled receivables
|
$
|
5,487
|
|
|
$
|
7,655
|
|
|
$
|
2,168
|
|
Contract assets
|
12,398
|
|
|
14,334
|
|
|
1,936
|
|
|||
|
|
|
|
|
|
||||||
Contract liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
30,370
|
|
|
$
|
42,870
|
|
|
$
|
12,500
|
|
4.
|
Allowance for Doubtful Accounts
|
Balance at December 31, 2017
|
$
|
2,534
|
|
Provision charged to income
|
3,899
|
|
|
Write-offs, net of recoveries
|
(1,203
|
)
|
|
Foreign currency translation
|
(99
|
)
|
|
Balance at September 30, 2018
|
$
|
5,131
|
|
5.
|
Property and Equipment, net
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Leasehold improvements
|
$
|
47,863
|
|
|
$
|
48,216
|
|
Office furniture, fixtures and equipment
|
17,960
|
|
|
17,732
|
|
||
Computer equipment and software
|
27,427
|
|
|
28,300
|
|
||
Property and equipment, gross
|
93,250
|
|
|
94,248
|
|
||
Accumulated depreciation
|
(57,759
|
)
|
|
(54,734
|
)
|
||
Property and equipment, net
|
$
|
35,491
|
|
|
$
|
39,514
|
|
6.
|
Investments
|
7.
|
Fair Value Measurements
|
•
|
Level 1 – Quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
|
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Balance at September 30, 2018
|
|
|
|
|
|
|
|
|
||||||||
U.S. non-qualified deferred compensation plan
|
|
$
|
21,013
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,013
|
|
Assets designated for retirement and pension plans
|
|
—
|
|
|
17,965
|
|
|
—
|
|
|
17,965
|
|
||||
Pension benefit obligation
|
|
—
|
|
|
(23,089
|
)
|
|
—
|
|
|
(23,089
|
)
|
||||
Acquisition earnout accruals
|
|
—
|
|
|
—
|
|
|
(10,490
|
)
|
|
(10,490
|
)
|
||||
|
|
$
|
21,013
|
|
|
$
|
(5,124
|
)
|
|
$
|
(10,490
|
)
|
|
$
|
5,399
|
|
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Balance at December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
U.S. non-qualified deferred compensation plan
|
|
$
|
21,319
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,319
|
|
Assets designated for retirement and pension plans
|
|
—
|
|
|
18,590
|
|
|
—
|
|
|
18,590
|
|
||||
Pension benefit obligation
|
|
—
|
|
|
(23,886
|
)
|
|
—
|
|
|
(23,886
|
)
|
||||
Acquisition earnout accruals
|
|
—
|
|
|
—
|
|
|
(7,213
|
)
|
|
(7,213
|
)
|
||||
|
|
$
|
21,319
|
|
|
$
|
(5,296
|
)
|
|
$
|
(7,213
|
)
|
|
$
|
8,810
|
|
|
Acquisition
Earnout Accruals |
||
Balance at December 31, 2017
|
$
|
(7,213
|
)
|
Acquisition earnouts (Note 8)
|
(3,054
|
)
|
|
Earnout accretion
|
(963
|
)
|
|
Philosophy IB earnout adjustment (1)
|
436
|
|
|
Foreign currency translation
|
304
|
|
|
Balance at September 30, 2018
|
$
|
(10,490
|
)
|
(1)
|
During the
three months ended September 30, 2018
, the Company determined that the software and consulting revenue targets for the period from September 2017 to August 2018, or second installment, would not be achieved. As such, the Company reduced the second installment earnout accrual by
$0.4 million
.
|
8.
|
Acquisitions
|
9.
|
Goodwill and Other Intangible Assets
|
|
September 30,
2018 |
|
December 31, 2017
|
||||
Executive Search
|
|
|
|
||||
Americas
|
$
|
88,595
|
|
|
$
|
88,690
|
|
Europe
|
48,601
|
|
|
44,407
|
|
||
Asia Pacific
|
8,756
|
|
|
9,302
|
|
||
Total Executive Search
|
145,952
|
|
|
142,399
|
|
||
Heidrick Consulting
|
36,257
|
|
|
36,257
|
|
||
Goodwill, gross
|
182,209
|
|
|
178,656
|
|
||
Accumulated impairment
|
(59,764
|
)
|
|
(59,764
|
)
|
||
Goodwill, net
|
$
|
122,445
|
|
|
$
|
118,892
|
|
|
Executive Search
|
|
Heidrick Consulting
|
|
|
||||||||||||||
|
Americas
|
|
Europe
|
|
Asia Pacific
|
|
|
Total
|
|||||||||||
Gross goodwill at December 31, 2017
|
$
|
88,690
|
|
|
$
|
44,407
|
|
|
$
|
9,302
|
|
|
$
|
36,257
|
|
|
$
|
178,656
|
|
Accumulated impairment
|
—
|
|
|
(23,507
|
)
|
|
—
|
|
|
(36,257
|
)
|
|
(59,764
|
)
|
|||||
Net goodwill at December 31, 2017
|
88,690
|
|
|
20,900
|
|
|
9,302
|
|
|
—
|
|
|
118,892
|
|
|||||
Amrop acquisition
|
—
|
|
|
5,102
|
|
|
—
|
|
|
—
|
|
|
5,102
|
|
|||||
Foreign currency translation
|
(95
|
)
|
|
(908
|
)
|
|
(546
|
)
|
|
—
|
|
|
(1,549
|
)
|
|||||
Net goodwill at September 30, 2018
|
$
|
88,595
|
|
|
$
|
25,094
|
|
|
$
|
8,756
|
|
|
$
|
—
|
|
|
$
|
122,445
|
|
|
September 30,
2018 |
|
December 31, 2017
|
||||
Executive Search
|
|
|
|
||||
Americas
|
$
|
73
|
|
|
$
|
252
|
|
Europe
|
2,378
|
|
|
1,799
|
|
||
Asia Pacific
|
84
|
|
|
107
|
|
||
Total Executive Search
|
2,535
|
|
|
2,158
|
|
||
Heidrick Consulting
|
—
|
|
|
—
|
|
||
Total other intangible assets, net
|
$
|
2,535
|
|
|
$
|
2,158
|
|
|
Weighted
Average Life (Years) |
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||||
Client relationships
|
6.8
|
|
$
|
16,053
|
|
|
$
|
(13,518
|
)
|
|
$
|
2,535
|
|
|
$
|
13,703
|
|
|
$
|
(11,612
|
)
|
|
$
|
2,091
|
|
Trade name
|
0.0
|
|
443
|
|
|
(443
|
)
|
|
—
|
|
|
459
|
|
|
(459
|
)
|
|
—
|
|
||||||
Non-compete
|
0.0
|
|
222
|
|
|
(222
|
)
|
|
—
|
|
|
230
|
|
|
(163
|
)
|
|
67
|
|
||||||
Total intangible assets
|
6.8
|
|
$
|
16,718
|
|
|
$
|
(14,183
|
)
|
|
$
|
2,535
|
|
|
$
|
14,392
|
|
|
$
|
(12,234
|
)
|
|
$
|
2,158
|
|
10.
|
Other Current Assets and Liabilities and Non-Current Liabilities
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Contract assets
|
$
|
21,989
|
|
|
$
|
3,538
|
|
Other
|
7,794
|
|
|
8,082
|
|
||
Total other current assets
|
$
|
29,783
|
|
|
$
|
11,620
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Restructuring charges
|
$
|
2,124
|
|
|
$
|
13,023
|
|
Other
|
33,003
|
|
|
27,323
|
|
||
Total other current liabilities
|
$
|
35,127
|
|
|
$
|
40,346
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Premise related costs
|
$
|
16,180
|
|
|
$
|
18,360
|
|
Accrued earnout payments
|
3,373
|
|
|
3,076
|
|
||
Restructuring charges
|
—
|
|
|
10
|
|
||
Other
|
2,216
|
|
|
2,151
|
|
||
Total other non-current liabilities
|
$
|
21,769
|
|
|
$
|
23,597
|
|
11.
|
Line of Credit
|
12.
|
Stock-Based Compensation
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Salaries and employee benefits
|
$
|
2,911
|
|
|
$
|
199
|
|
|
$
|
6,200
|
|
|
$
|
3,915
|
|
General and administrative expenses
|
—
|
|
|
—
|
|
|
563
|
|
|
338
|
|
||||
Income tax benefit related to stock-based compensation included in net income
|
771
|
|
|
79
|
|
|
1,792
|
|
|
1,561
|
|
|
Number of
Restricted Stock Units |
|
Weighted-
Average Grant-Date Fair Value |
|||
Outstanding on December 31, 2017
|
491,154
|
|
|
$
|
21.92
|
|
Granted
|
297,664
|
|
|
34.64
|
|
|
Vested and converted to common stock
|
(199,550
|
)
|
|
21.66
|
|
|
Forfeited
|
(70,506
|
)
|
|
25.66
|
|
|
Outstanding on September 30, 2018
|
518,762
|
|
|
$
|
28.81
|
|
|
Number of
Performance
Stock Units
|
|
Weighted-
Average Grant-Date Fair Value |
|||
Outstanding on December 31, 2017
|
185,891
|
|
|
$
|
23.82
|
|
Granted
|
102,138
|
|
|
25.81
|
|
|
Vested and converted to common stock
|
(43,361
|
)
|
|
23.64
|
|
|
Forfeited
|
(47,551
|
)
|
|
23.87
|
|
|
Outstanding on September 30, 2018
|
197,117
|
|
|
$
|
24.88
|
|
|
Number of
Phantom
Stock Units
|
|
Outstanding on December 31, 2017
|
—
|
|
Granted
|
114,118
|
|
Vested
|
—
|
|
Forfeited
|
—
|
|
Outstanding on September 30, 2018
|
114,118
|
|
13.
|
Restructuring
|
|
Employee Related
|
|
Office Related
|
|
Other
|
|
Total
|
||||||||
Outstanding on December 31, 2017
|
$
|
11,866
|
|
|
$
|
148
|
|
|
$
|
1,011
|
|
|
$
|
13,025
|
|
Cash payments
|
(7,940
|
)
|
|
(248
|
)
|
|
(981
|
)
|
|
(9,169
|
)
|
||||
Other
|
(1,793
|
)
|
|
100
|
|
|
27
|
|
|
(1,666
|
)
|
||||
Exchange rate fluctuations
|
(59
|
)
|
|
—
|
|
|
(7
|
)
|
|
(66
|
)
|
||||
Outstanding on September 30, 2018
|
$
|
2,074
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
2,124
|
|
14.
|
Income Taxes
|
15.
|
Changes in Accumulated Other Comprehensive Income
|
|
|
Available-
for- Sale Securities |
|
Foreign
Currency Translation |
|
Pension
|
|
AOCI
|
||||||||
Balance at December 31, 2017
|
|
$
|
6,089
|
|
|
$
|
9,143
|
|
|
$
|
(1,917
|
)
|
|
$
|
13,315
|
|
Other comprehensive income before classification, net of tax
|
|
—
|
|
|
(3,107
|
)
|
|
—
|
|
|
(3,107
|
)
|
||||
Amount reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net current period other comprehensive income
|
|
—
|
|
|
(3,107
|
)
|
|
—
|
|
|
(3,107
|
)
|
||||
Adoption of accounting standards (1)
|
|
(6,089
|
)
|
|
—
|
|
|
—
|
|
|
(6,089
|
)
|
||||
Balance at September 30, 2018
|
|
$
|
—
|
|
|
$
|
6,036
|
|
|
$
|
(1,917
|
)
|
|
$
|
4,119
|
|
16.
|
Segment Information
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
|
|||||||
Americas
|
$
|
106,504
|
|
|
$
|
88,254
|
|
|
$
|
295,499
|
|
|
$
|
248,442
|
|
Europe
|
37,452
|
|
|
33,994
|
|
|
110,419
|
|
|
90,534
|
|
||||
Asia Pacific
|
28,095
|
|
|
21,865
|
|
|
78,460
|
|
|
64,162
|
|
||||
Total Executive Search
|
172,051
|
|
|
144,113
|
|
|
484,378
|
|
|
403,138
|
|
||||
Heidrick Consulting
|
15,537
|
|
|
15,687
|
|
|
46,340
|
|
|
48,882
|
|
||||
Revenue before reimbursements (net revenue)
|
187,588
|
|
|
159,800
|
|
|
530,718
|
|
|
452,020
|
|
||||
Reimbursements
|
4,753
|
|
|
4,665
|
|
|
13,970
|
|
|
13,740
|
|
||||
Total revenue
|
$
|
192,341
|
|
|
$
|
164,465
|
|
|
$
|
544,688
|
|
|
$
|
465,760
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
23,341
|
|
|
$
|
21,140
|
|
|
$
|
69,988
|
|
|
$
|
60,958
|
|
Europe
|
904
|
|
|
3,047
|
|
|
6,453
|
|
|
4,207
|
|
||||
Asia Pacific
|
6,414
|
|
|
369
|
|
|
13,608
|
|
|
3,966
|
|
||||
Total Executive Search
|
30,659
|
|
|
24,556
|
|
|
90,049
|
|
|
69,131
|
|
||||
Heidrick Consulting
|
(1,761
|
)
|
|
(2,625
|
)
|
|
(10,988
|
)
|
|
(49,849
|
)
|
||||
Total segment operating income
|
28,898
|
|
|
21,931
|
|
|
79,061
|
|
|
19,282
|
|
||||
Global Operations Support
|
(8,315
|
)
|
|
(7,909
|
)
|
|
(26,896
|
)
|
|
(27,033
|
)
|
||||
Total operating income (loss)
|
$
|
20,583
|
|
|
$
|
14,022
|
|
|
$
|
52,165
|
|
|
$
|
(7,751
|
)
|
17.
|
Guarantees
|
18.
|
Commitments and Contingencies
|
19.
|
Subsequent Event
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
|
|
|
|
||||
Revenue before reimbursements (net revenue)
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Reimbursements
|
2.5
|
|
|
2.9
|
|
|
2.6
|
|
|
3.0
|
|
Total revenue
|
102.5
|
|
|
102.9
|
|
|
102.6
|
|
|
103.0
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||
Salaries and employee benefits
|
71.4
|
|
|
67.9
|
|
|
70.3
|
|
|
68.4
|
|
General and administrative expenses
|
17.6
|
|
|
23.3
|
|
|
19.9
|
|
|
24.7
|
|
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
Reimbursed expenses
|
2.5
|
|
|
2.9
|
|
|
2.6
|
|
|
3.0
|
|
Total operating expenses
|
91.6
|
|
|
94.1
|
|
|
92.8
|
|
|
104.8
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss)
|
11.0
|
|
|
8.8
|
|
|
9.8
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
||||
Interest, net
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
Other, net
|
1.3
|
|
|
0.1
|
|
|
0.3
|
|
|
(0.6
|
)
|
Net non-operating income (expense)
|
1.4
|
|
|
0.2
|
|
|
0.4
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes
|
12.4
|
|
|
8.9
|
|
|
10.3
|
|
|
(2.3
|
)
|
|
|
|
|
|
|
|
|
||||
Provision for (benefit from) income taxes
|
3.6
|
|
|
3.8
|
|
|
3.1
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
8.8
|
%
|
|
5.1
|
%
|
|
7.2
|
%
|
|
(2.1
|
)%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
106,504
|
|
|
$
|
88,254
|
|
|
$
|
295,499
|
|
|
$
|
248,442
|
|
Europe
|
37,452
|
|
|
33,994
|
|
|
110,419
|
|
|
90,534
|
|
||||
Asia Pacific
|
28,095
|
|
|
21,865
|
|
|
78,460
|
|
|
64,162
|
|
||||
Total Executive Search
|
172,051
|
|
|
144,113
|
|
|
484,378
|
|
|
403,138
|
|
||||
Heidrick Consulting
|
15,537
|
|
|
15,687
|
|
|
46,340
|
|
|
48,882
|
|
||||
Revenue before reimbursements (net revenue)
|
187,588
|
|
|
159,800
|
|
|
530,718
|
|
|
452,020
|
|
||||
Reimbursements
|
4,753
|
|
|
4,665
|
|
|
13,970
|
|
|
13,740
|
|
||||
Total revenue
|
$
|
192,341
|
|
|
$
|
164,465
|
|
|
$
|
544,688
|
|
|
$
|
465,760
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
23,341
|
|
|
$
|
21,140
|
|
|
$
|
69,988
|
|
|
$
|
60,958
|
|
Europe
|
904
|
|
|
3,047
|
|
|
6,453
|
|
|
4,207
|
|
||||
Asia Pacific
|
6,414
|
|
|
369
|
|
|
13,608
|
|
|
3,966
|
|
||||
Total Executive Search
|
30,659
|
|
|
24,556
|
|
|
90,049
|
|
|
69,131
|
|
||||
Heidrick Consulting
|
(1,761
|
)
|
|
(2,625
|
)
|
|
(10,988
|
)
|
|
(49,849
|
)
|
||||
Total segment operating income
|
28,898
|
|
|
21,931
|
|
|
79,061
|
|
|
19,282
|
|
||||
Global Operations Support
|
(8,315
|
)
|
|
(7,909
|
)
|
|
(26,896
|
)
|
|
(27,033
|
)
|
||||
Total operating income (loss)
|
$
|
20,583
|
|
|
$
|
14,022
|
|
|
$
|
52,165
|
|
|
$
|
(7,751
|
)
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control Over Financial Reporting
|
Exhibit
No.
|
|
Description
|
|
|
|
*31.1
|
|
|
|
|
|
*31.2
|
|
|
|
|
|
*32.1
|
|
|
|
|
|
*32.2
|
|
|
|
|
|
*10.1
|
|
|
|
|
|
*101.INS
|
|
XBRL Instance Document
|
|
|
|
*101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
*101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
*101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
*101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
*101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
|
|
|
Heidrick & Struggles International, Inc.
|
|
(Registrant)
|
|
|
|
|
|
/s/ Stephen A. Bondi
|
|
Stephen A. Bondi
|
|
Vice President, Controller
|
1.
|
Definitions
. All capitalized terms used herein, unless specifically defined herein, shall have the same meanings as established in the Program.
|
2.
|
Participation
. Contingent upon the execution of the Agreement, the Company hereby grants to the Participant
[______]
RSUs subject to the terms and conditions herein. In accordance with Section 4 and Section 5 below, 50% of the RSUs scheduled to vest on each vesting date will be settled in Shares (the “Share-Settled RSUs”) and 50% of the RSUs scheduled to vest on each vesting date will be settled in cash, based on the then-current Fair Market Value of the Shares (“Cash-Settled RSUs”).
|
3.
|
Vesting of RSUs
.
|
a.
|
Subject to Section 3(b) and Section 4 below, all RSUs granted under the Agreement shall vest in accordance with the schedule set forth below; provided the Participant has been in Continuous Service through each vesting date. For purposes of the Agreement, “Continuous Service” shall mean the Participant’s service with the Company or any Subsidiary or Affiliate as an employee has not been interrupted or terminated, and shall include any period during which the Participant is on an approved leave of absence from the Company or its Subsidiaries or Affiliates.
|
Vesting Date
|
Percentage of RSUs Vesting
|
July 31, 2020
|
20%
|
July 31, 2021
|
30%
|
July 31, 2022
|
50%
|
b.
|
If the Participant’s Continuous Service is terminated as a result of the Participant’s death or Disability, all RSUs granted to the Participant under the Agreement will immediately vest.
|
4.
|
Effect of Vesting
.
|
a.
|
If, and at the time, the Participant’s RSUs vest under the terms of Section 3 or Section 9, and subject to Section 7, such Participant shall receive as full consideration for the RSUs (i) a number of Shares equal to the number of Share-Settled RSUs which vested on such date and (ii) the then-current Fair Market Value of a number of Shares equal to the number of Cash-Settled RSUs which vested on such date.
|
b.
|
The RSUs granted to the Participant shall be maintained in a bookkeeping account with the custodian appointed by the Human Resources & Compensation Committee (the “Committee”) from time to time (the “Custodian”) for such Participant if and until the RSUs are converted into Shares or cash pursuant to this Section 4, at which time the Shares or cash shall be issued to the Participant in accordance with Section 5 below.
|
5.
|
Delivery of Shares and Cash to the Participant
.
|
a.
|
Share-Settled RSUs
. As soon as practicable after the Share-Settled RSUs vest and are converted into Shares, and subject to Section 7, the Custodian shall, without transfer or issue tax or other incidental expense to the Participant, deliver to the Participant by first-class insured mail addressed to the Participant at the address shown on page 1 or the last address of record on file with the Custodian, (i) a statement from the Custodian referencing the number of Shares held in the Participant’s name in a book entry account, or (ii) at the Participant’s request, certificate(s) for the number of Shares as to which the Share-Settled RSUs vested. In any event, Shares due to the Participant shall be delivered as described above no later than March 15 of the year following the calendar year in which such Share-Settled RSUs vest.
|
b.
|
Cash-Settled RSUs
. As soon as practicable after the Cash-Settled RSUs vest, and subject to Section 7, the Custodian shall deliver to the Participant a dollar amount equal to (i) the number of Cash-Settled RSUs that have vested pursuant to Section 3 or Section 9 hereof, multiplied by (ii) the Fair Market Value per Share as of the date such Cash-Settled RSUs vested. For the avoidance of doubt, the payment in respect of the Cash-Settled RSUs shall be reduced by any cash withheld by the Company or any Subsidiary or Affiliate for income taxes or other taxes due in connection with the vesting of the Share-Settled and Cash-Settled RSUs as provided hereunder.
|
6.
|
Dividend Equivalents
. The Company shall credit the Participant’s RSU account with an amount equal to the dividends, if any, that would be paid with respect to the unvested RSUs as if the RSUs were actual Shares to a shareholder as of the record date. Such amount shall be credited to the Participant’s RSU account at the same time dividends are paid with respect to the Shares, shall be subject to the vesting and forfeiture provisions set forth in Sections 3, 4 and 10 of the Agreement, and shall be paid to the Participant in cash, on the first payroll date following when the Participant’s related RSUs vest and are issued as Shares to the Participant or settled in cash, or as soon as practical thereafter.
|
7.
|
Tax Withholdings and Payments
.
|
a.
|
The Company or any Subsidiary or Affiliate is authorized to withhold from any payment to be made to the Participant under this Agreement with respect to the Share-Settled RSUs and the Cash-Settled RSUs, amounts of income tax withholding and other taxes due in connection with compensation or any other transaction under the Program, including the receipt of Shares and cash under Section 5. The Participant shall hold the Company and its Subsidiaries and Affiliates harmless for any damages caused by his or her failure to so comply and for any other damages caused by his or her actions or inactions.
|
b.
|
The Participant will pay withholding taxes attributable to the receipt of Shares (from Share-Settled RSUs) and cash (from Cash-Settled RSUs) by having cash withheld by the Company or its Subsidiary or Affiliate from any cash in respect of Cash-Settled RSUs that would otherwise be received by the Participant under the Agreement, or by any other method approved by the Committee.
|
c.
|
The Company shall deduct from the dividend equivalents paid to the Participant pursuant to Section 6 the Participant’s withholding obligation arising from such payment.
|
8.
|
Mandatory Holding Requirement
.
|
a.
|
The Participant agrees that with respect to the Applicable Holding Shares, the Participant may not transfer, sell, pledge, hypothecate or otherwise dispose of such Applicable Holding Shares until the Holding Date. For purposes of this Section 8:
|
i.
|
“Applicable Holding Shares” means the Shares that are delivered to the Participant under this Agreement in respect of any Share-Settled RSUs that become vested in accordance with Section 3(a) hereof.
|
ii.
|
“Holding Date” means the second anniversary of the date of acquisition of any Applicable Holding Shares.
|
b.
|
The program is intended to incent and reward long-term commitment to the Company through long-term wealth accumulation. Accordingly, the Participant is required to achieve and maintain 1x (100%) of his or her annual base salary in Shares within five (5) years of the initial award to Participant under this Program. The Participant is also required to retain ownership of all Shares issued in settlement of the RSUs until the Participant has met this share ownership requirement.
|
9.
|
Change in Control
.
|
a.
|
This Section 9 shall govern the treatment and vesting of the RSUs awarded to the Participant, except to the extent RSU and/or stock awards are either explicitly addressed in the terms of the Participant’s employment agreement, or the Company’s Change in Control plan becomes applicable to the Participant’s employment - in both circumstances, to the extent there is any implicit or explicit conflict with the terms of this Section 9, those agreements and plans shall govern and not this Section.
|
b.
|
If the RSUs are Assumed upon a Change in Control, the RSUs will vest as provided in Section 3(a).
|
c.
|
If, within the two-year period beginning on the date of a Change in Control, the Participant’s Continuous Service is terminated due to: (i) a termination by the Company or any Subsidiary or Affiliate without Cause or (ii) a voluntary termination by the Participant due to the existence of Good Reason, the RSUs will become fully vested.
|
d.
|
If the RSUs are not Assumed upon a Change in Control, the RSUs will become fully vested on the date of the Change in Control.
|
10.
|
Forfeiture of RSUs
.
|
a.
|
Subject to the next following sentence, the Participant’s unvested RSUs shall be forfeited to the Company upon the Participant’s termination of Continuous Service for any reason other than (a) the Participant’s death or Disability that occurs prior to the date the RSUs vest as provided in Section 3 above or (b) the Participant’s termination of Continuous Service by the Company or any Subsidiary or Affiliate without Cause or the Participant’s voluntary termination due to the existence of Good Reason, in either case during the two-year period beginning on the date of a Change in Control, as provided in Section 9 above.
|
b.
|
If, during Participant’s employment with the Company or its Subsidiaries or Affiliates or within a period of two (2) years following the termination of the Participant’s employment with the Company or its Subsidiaries or Affiliates, the Participant:
|
1.
|
becomes employed by, consults for, or otherwise provides executive search and/or leadership advisory products, assessments or services for Korn Ferry, Spencer Stuart, Egon Zehnder, Russell Reynolds or their affiliated or related companies or their successors; or
|
2.
|
promotes or assists, financially or otherwise, any person, firm, association, partnership, corporation or other entity engaged in any business which competes with the Company or its Subsidiaries or Affiliates
|
c.
|
The Participant agrees that the Company or its Subsidiary or Affiliate may deduct from any amounts the Company or its Subsidiary or Affiliate owes the Participant from time to time (such as wages or other compensation, deferred compensation credits, vacation pay, any severance or other payments owed following a termination of employment, as well as any other amounts owed to the Participant by the Company or its Subsidiary or Affiliate) to the extent of any amounts the Participant owes the Company or its Subsidiary or Affiliate under this Section 10. The provisions of this section and any amounts repayable by the Participant hereunder are intended to be in addition to any rights to repayment the Company or its Subsidiary or Affiliate may have under applicable law.
|
d.
|
Because of the global nature of the Participant’s responsibilities and the Company’s client relationships, the phrase “Restricted Territory” is worldwide.
|
e.
|
This Section 10 shall be subject to the Company’s Bonus, Restricted Stock Unit, Performance Stock Unit and Bonus Cash Deferral Retirement Policy (the “Retirement Policy”) and any subsequent amendments, as well as any other Company plan or written employment, severance or similar agreement that has been or may be executed by the Participant and the Company or its Subsidiary or Affiliate, and the provisions in such Retirement Policy or agreement concerning the vesting of RSUs in connection with the Participant’s termination of Continuous Service shall supersede any inconsistent or contrary provision in this Agreement.
|
f.
|
This Section 10 does not constitute the Company’s exclusive remedy for the Participant’s violation of any post-employment obligations owed to the Company, including but not limited to any obligations of confidentiality, or restrictive covenants that may exist in the Participant’s employment agreement.
|
g.
|
Reasonableness
. The Participant acknowledges that the Participant’s obligations under this Section 10 are reasonable in the context of the nature of the Company’s business, its strategic and cumulative investments in longstanding client relationships, and the competitive injuries likely to be sustained by the Company if the Participant were to violate such obligations. The Participant further acknowledges that this Agreement is made in consideration of, and is adequately supported by the agreement of the Company to perform its obligations under this Agreement and by other consideration, which the Participant acknowledges constitutes good, valuable and sufficient consideration.
|
11.
|
Miscellaneous
.
|
a.
|
The Company or any Subsidiary or Affiliate shall have no obligation to continue the employment relationship or any other relationship as a result of an Award under the Program and/or the Agreement. The Participant acknowledges and agrees that: (i) the Program is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time; (ii) the grant of RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted repeatedly in the past; (iii) all decisions with respect to future RSU grants, if any, will be at the sole discretion of the Company; (iv) participation in the Program is voluntary; (v) the RSUs are not a part of normal or expected compensation or salary for any purposes; (vi) the future value of the underlying shares is unknown and cannot be predicted with certainty; and (vii) in consideration of the grant of RSUs, no claim or entitlement to compensation or damages shall arise from termination of the RSUs or diminution in value of the RSUs or Shares received upon vesting.
|
b.
|
The Company may amend, alter or discontinue the Agreement, without the consent of the Participant so long as such amendment, alteration or discontinuance would not impair any of the rights or obligations under any Award theretofore granted to the Participant under the Program. The Committee may amend the Agreement in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Code or other applicable laws.
|
c.
|
The parties agree that the Agreement shall be governed by and interpreted and construed in accordance with the laws of the United States and, in particular, those of the State of Illinois without regard to its conflict of law principles, as Illinois is the situs of the principal corporate office of the Company. Furthermore, to the extent not prohibited under applicable law, and unless the Company affirmatively elects in writing to allow the proceeding to be brought (or itself brings such a proceeding) in a different venue, the parties agree that any suit, action or proceeding with respect to the Program, the RSUs or the Agreement shall be brought in the state courts in Chicago, Illinois or in the U.S. District Court for the Northern District of Illinois. The parties hereby accept the exclusive jurisdiction of those courts for the purpose of any such suit, action or proceeding. Venue for any such action, in addition to any other venue required or otherwise mandated by statute, will be in Chicago, Illinois. Each party further agrees to waive any applicable right to a jury trial, and expressly elects to have the matter heard as a bench trial.
|
d.
|
Unless waived by the Company, any notice to the Company required under or relating to the Agreement shall be in writing and addressed to:
|
12.
|
Program Governs
. All terms and conditions of the Program are incorporated herein and made part hereof as if stated herein. If there is any conflict between the terms and conditions of the Program and the Agreement, the terms and conditions of the Program, as interpreted by the Committee, shall govern.
|
13.
|
Data Privacy.
By signing above, the Participant voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 13. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data. However, the Participant’s failure to provide the consent may affect the Participant’s ability to participate in the Program. The Company and its Subsidiaries and Affiliates hold certain personal information about the Participant, including the Participant’s name, home address and telephone number, date of birth, employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other rights or entitlements to shares of stock in the Participant’s favor, for the purpose of managing and administering the Program (“Data”). The Company, its Subsidiaries and its Affiliates will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of the Participant’s participation in the Program, and the Company and any of its Subsidiaries or Affiliates may each further transfer Data to any third parties assisting in the implementation, administration and management of the Program. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. The Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Program, including any requisite transfer of such Data as may be required for the administration of the Program and/or the subsequent holding of Shares on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any Shares acquired pursuant to the Program. The Participant may, at any time, review
|
14.
|
Execution of the Agreement
.
|
a.
|
The Parties agree that this Agreement shall be considered executed by both parties executing the Agreement on the first page hereof, which is a part hereof.
|
b.
|
This Agreement, or any amendments thereto, may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Heidrick & Struggles International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
Dated:
|
October 29, 2018
|
|
/s/ Krishnan Rajagopalan
|
|
|
|
Krishnan Rajagopalan
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Heidrick & Struggles International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
Dated:
|
October 29, 2018
|
|
/s/ Mark R. Harris
|
|
|
|
Mark R. Harris
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Dated:
|
October 29, 2018
|
|
/s/ Krishnan Rajagopalan
|
|
|
|
Krishnan Rajagopalan
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Dated:
|
October 29, 2018
|
|
/s/ Mark R. Harris
|
|
|
|
Mark R. Harris
|
|
|
|
Executive Vice President and Chief Financial Officer
|