|
|
|
|
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
|
|
|
|
|
|
|
|
PAGE
|
PART I.
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II.
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
105,314
|
|
|
$
|
279,906
|
|
Marketable securities
|
|
38,698
|
|
|
—
|
|
||
Accounts receivable, net
|
|
146,982
|
|
|
114,977
|
|
||
Prepaid expenses
|
|
23,193
|
|
|
22,766
|
|
||
Other current assets
|
|
30,082
|
|
|
29,598
|
|
||
Income taxes recoverable
|
|
6,171
|
|
|
3,620
|
|
||
Total current assets
|
|
350,440
|
|
|
450,867
|
|
||
|
|
|
|
|
||||
Non-current assets
|
|
|
|
|
||||
Property and equipment, net
|
|
30,788
|
|
|
33,871
|
|
||
Operating lease right-of-use assets
|
|
104,449
|
|
|
—
|
|
||
Assets designated for retirement and pension plans
|
|
14,909
|
|
|
15,035
|
|
||
Investments
|
|
23,647
|
|
|
19,442
|
|
||
Other non-current assets
|
|
21,725
|
|
|
22,276
|
|
||
Goodwill
|
|
122,070
|
|
|
122,092
|
|
||
Other intangible assets, net
|
|
1,730
|
|
|
2,216
|
|
||
Deferred income taxes
|
|
34,252
|
|
|
34,830
|
|
||
Total non-current assets
|
|
353,570
|
|
|
249,762
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
704,010
|
|
|
$
|
700,629
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
8,107
|
|
|
$
|
9,166
|
|
Accrued salaries and benefits
|
|
124,923
|
|
|
227,653
|
|
||
Deferred revenue
|
|
37,424
|
|
|
40,673
|
|
||
Operating lease liabilities
|
|
31,895
|
|
|
—
|
|
||
Other current liabilities
|
|
26,186
|
|
|
33,219
|
|
||
Income taxes payable
|
|
6,779
|
|
|
8,240
|
|
||
Total current liabilities
|
|
235,314
|
|
|
318,951
|
|
||
|
|
|
|
|
||||
Non-current liabilities
|
|
|
|
|
||||
Accrued salaries and benefits
|
|
47,852
|
|
|
57,234
|
|
||
Retirement and pension plans
|
|
43,922
|
|
|
39,865
|
|
||
Operating lease liabilities
|
|
84,156
|
|
|
—
|
|
||
Other non-current liabilities
|
|
4,317
|
|
|
17,423
|
|
||
Total non-current liabilities
|
|
180,247
|
|
|
114,522
|
|
||
|
|
|
|
|
||||
Total liabilities
|
|
415,561
|
|
|
433,473
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 17)
|
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at June 30, 2019 and December 31, 2018
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 100,000,000 shares authorized, 19,585,777 shares issued, 19,127,401 and 18,954,275 shares outstanding at June 30, 2019 and December 31, 2018, respectively
|
|
196
|
|
|
196
|
|
||
Treasury stock at cost, 458,376 and 631,502 shares at June 30, 2019 and December 31, 2018, respectively
|
|
(14,795
|
)
|
|
(20,298
|
)
|
||
Additional paid in capital
|
|
222,148
|
|
|
227,147
|
|
||
Retained earnings
|
|
76,513
|
|
|
56,049
|
|
||
Accumulated other comprehensive income
|
|
4,387
|
|
|
4,062
|
|
||
Total stockholders’ equity
|
|
288,449
|
|
|
267,156
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
704,010
|
|
|
$
|
700,629
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Revenue before reimbursements (net revenue)
|
$
|
173,122
|
|
|
$
|
183,059
|
|
|
$
|
344,716
|
|
|
$
|
343,130
|
|
Reimbursements
|
5,051
|
|
|
4,630
|
|
|
9,731
|
|
|
9,217
|
|
||||
Total revenue
|
178,173
|
|
|
187,689
|
|
|
354,447
|
|
|
352,347
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Salaries and benefits
|
120,601
|
|
|
127,679
|
|
|
241,419
|
|
|
239,088
|
|
||||
General and administrative expenses
|
34,168
|
|
|
36,919
|
|
|
68,553
|
|
|
72,460
|
|
||||
Reimbursed expenses
|
5,051
|
|
|
4,630
|
|
|
9,731
|
|
|
9,217
|
|
||||
Total operating expenses
|
159,820
|
|
|
169,228
|
|
|
319,703
|
|
|
320,765
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income
|
18,353
|
|
|
18,461
|
|
|
34,744
|
|
|
31,582
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest, net
|
412
|
|
|
(2
|
)
|
|
1,220
|
|
|
237
|
|
||||
Other, net
|
708
|
|
|
(48
|
)
|
|
2,351
|
|
|
(496
|
)
|
||||
Net non-operating income (expense)
|
1,120
|
|
|
(50
|
)
|
|
3,571
|
|
|
(259
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
19,473
|
|
|
18,411
|
|
|
38,315
|
|
|
31,323
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes
|
5,193
|
|
|
6,948
|
|
|
11,948
|
|
|
9,692
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
14,280
|
|
|
11,463
|
|
|
26,367
|
|
|
21,631
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(7
|
)
|
|
(3,816
|
)
|
|
313
|
|
|
(2,226
|
)
|
||||
Net unrealized gain on available-for-sale investments
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Other comprehensive income (loss), net of tax
|
5
|
|
|
(3,816
|
)
|
|
325
|
|
|
(2,226
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
14,285
|
|
|
$
|
7,647
|
|
|
$
|
26,692
|
|
|
$
|
19,405
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
19,120
|
|
|
18,934
|
|
|
19,062
|
|
|
18,880
|
|
||||
Dilutive common shares
|
311
|
|
|
394
|
|
|
469
|
|
|
509
|
|
||||
Diluted weighted average common shares outstanding
|
19,431
|
|
|
19,328
|
|
|
19,531
|
|
|
19,389
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per common share
|
$
|
0.75
|
|
|
$
|
0.61
|
|
|
$
|
1.38
|
|
|
$
|
1.15
|
|
Diluted net income per common share
|
$
|
0.73
|
|
|
$
|
0.59
|
|
|
$
|
1.35
|
|
|
$
|
1.12
|
|
Cash dividends paid per share
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
$
|
0.30
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Paid in
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
|
||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
|||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2018
|
19,586
|
|
|
$
|
196
|
|
|
632
|
|
|
$
|
(20,298
|
)
|
|
$
|
227,147
|
|
|
$
|
56,049
|
|
|
$
|
4,062
|
|
|
$
|
267,156
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,087
|
|
|
—
|
|
|
12,087
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
320
|
|
||||||
Common and treasury stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,343
|
|
|
—
|
|
|
—
|
|
|
1,343
|
|
||||||
Vesting of equity, net of tax withholdings
|
—
|
|
|
—
|
|
|
(160
|
)
|
|
5,155
|
|
|
(9,707
|
)
|
|
—
|
|
|
—
|
|
|
(4,552
|
)
|
||||||
Cash dividends declared ($0.15 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,848
|
)
|
|
—
|
|
|
(2,848
|
)
|
||||||
Dividend equivalents on restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87
|
)
|
|
—
|
|
|
(87
|
)
|
||||||
Balance at March 31, 2019
|
19,586
|
|
|
$
|
196
|
|
|
472
|
|
|
$
|
(15,143
|
)
|
|
$
|
218,783
|
|
|
$
|
65,201
|
|
|
$
|
4,382
|
|
|
$
|
273,419
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,280
|
|
|
|
|
14,280
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||
Common and treasury stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,368
|
|
|
—
|
|
|
—
|
|
|
3,368
|
|
||||||
Vesting of equity, net of tax withholdings
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Re-issuance of treasury stock
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
348
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
345
|
|
||||||
Cash dividends declared ($0.15 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,867
|
)
|
|
—
|
|
|
(2,867
|
)
|
||||||
Dividend equivalents on restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
(101
|
)
|
||||||
Balance at June 30, 2019
|
19,586
|
|
|
$
|
196
|
|
|
458
|
|
|
$
|
(14,795
|
)
|
|
$
|
222,148
|
|
|
$
|
76,513
|
|
|
$
|
4,387
|
|
|
$
|
288,449
|
|
|
|
|
|
|
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
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,168
|
|
|
—
|
|
|
10,168
|
|
||||||
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,043
|
|
|
(6,089
|
)
|
|
8,954
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,590
|
|
|
1,590
|
|
||||||
Common and treasury stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,776
|
|
|
—
|
|
|
—
|
|
|
1,776
|
|
||||||
Vesting of equity, net of tax withholdings
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
4,614
|
|
|
(6,847
|
)
|
|
—
|
|
|
—
|
|
|
(2,233
|
)
|
||||||
Cash dividends declared ($0.13 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,460
|
)
|
|
—
|
|
|
(2,460
|
)
|
||||||
Dividend equivalents on restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||||
Balance at March 31, 2018
|
19,586
|
|
|
$
|
196
|
|
|
667
|
|
|
$
|
(21,482
|
)
|
|
$
|
220,935
|
|
|
$
|
22,024
|
|
|
$
|
8,816
|
|
|
$
|
230,489
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,463
|
|
|
|
|
11,463
|
|
|||||||
Other comprehensive (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,816
|
)
|
|
(3,816
|
)
|
||||||
Common and treasury stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,076
|
|
|
—
|
|
|
—
|
|
|
2,076
|
|
||||||
Vesting of equity, net of tax withholdings
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
989
|
|
|
(989
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Re-issuance of treasury stock
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
194
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
225
|
|
||||||
Cash dividends declared ($0.13 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,465
|
)
|
|
—
|
|
|
(2,465
|
)
|
||||||
Dividend equivalents on restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
(106
|
)
|
||||||
Balance at June 30, 2018
|
19,586
|
|
|
$
|
196
|
|
|
632
|
|
|
$
|
(20,299
|
)
|
|
$
|
222,053
|
|
|
$
|
30,916
|
|
|
$
|
5,000
|
|
|
$
|
237,866
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2019
|
|
2018
|
||||
Cash flows - operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
26,367
|
|
|
$
|
21,631
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
5,348
|
|
|
6,493
|
|
||
Deferred income taxes
|
|
512
|
|
|
(347
|
)
|
||
Stock-based compensation expense
|
|
4,711
|
|
|
3,852
|
|
||
Accretion expense related to earnout payments
|
|
327
|
|
|
647
|
|
||
Gain on marketable securities
|
|
(116
|
)
|
|
—
|
|
||
Changes in assets and liabilities, net of effects of acquisition:
|
|
|
|
|
||||
Accounts receivable
|
|
(32,093
|
)
|
|
(55,397
|
)
|
||
Accounts payable
|
|
(978
|
)
|
|
(1,797
|
)
|
||
Accrued expenses
|
|
(115,500
|
)
|
|
(60,116
|
)
|
||
Restructuring accrual
|
|
(1,189
|
)
|
|
(8,885
|
)
|
||
Deferred revenue
|
|
(3,240
|
)
|
|
(2,626
|
)
|
||
Income taxes recoverable and payable, net
|
|
(4,035
|
)
|
|
(3,066
|
)
|
||
Retirement and pension plan assets and liabilities
|
|
1,686
|
|
|
121
|
|
||
Prepaid expenses
|
|
(3,507
|
)
|
|
(5,879
|
)
|
||
Other assets and liabilities, net
|
|
(176
|
)
|
|
(1,691
|
)
|
||
Net cash used in operating activities
|
|
(121,883
|
)
|
|
(107,060
|
)
|
||
|
|
|
|
|
||||
Cash flows - investing activities
|
|
|
|
|
||||
Acquisition of business
|
|
—
|
|
|
(3,161
|
)
|
||
Capital expenditures
|
|
(1,793
|
)
|
|
(2,548
|
)
|
||
Purchases of available-for-sale investments and marketable securities
|
|
(40,477
|
)
|
|
(1,891
|
)
|
||
Proceeds from sales of available-for-sale investments and marketable securities
|
|
232
|
|
|
1,564
|
|
||
Net cash used in investing activities
|
|
(42,038
|
)
|
|
(6,036
|
)
|
||
|
|
|
|
|
||||
Cash flows - financing activities
|
|
|
|
|
||||
Proceeds from line of credit
|
|
—
|
|
|
20,000
|
|
||
Payments on line of credit
|
|
—
|
|
|
(20,000
|
)
|
||
Cash dividends paid
|
|
(5,903
|
)
|
|
(5,042
|
)
|
||
Payment of employee tax withholdings on equity transactions
|
|
(4,552
|
)
|
|
(2,233
|
)
|
||
Acquisition earnout payments
|
|
(407
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(10,862
|
)
|
|
(7,275
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
|
|
(165
|
)
|
|
(1,359
|
)
|
||
|
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricted cash
|
|
(174,948
|
)
|
|
(121,730
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
280,262
|
|
|
208,162
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
105,314
|
|
|
$
|
86,432
|
|
1
.
|
Basis of Presentation of Interim Financial Information
|
2
.
|
Summary of Significant Accounting Policies
|
|
June 30,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2018
|
|
2017
|
||||||||
Cash and cash equivalents
|
$
|
105,314
|
|
|
$
|
85,825
|
|
|
$
|
279,906
|
|
|
$
|
207,534
|
|
Restricted cash included within other current assets
|
—
|
|
|
508
|
|
|
108
|
|
|
526
|
|
||||
Restricted cash included within other non-current assets
|
—
|
|
|
99
|
|
|
248
|
|
|
102
|
|
||||
Total cash, cash equivalents and restricted cash
|
$
|
105,314
|
|
|
$
|
86,432
|
|
|
$
|
280,262
|
|
|
$
|
208,162
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
14,280
|
|
|
$
|
11,463
|
|
|
$
|
26,367
|
|
|
$
|
21,631
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
19,120
|
|
|
18,934
|
|
|
19,062
|
|
|
18,880
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
202
|
|
|
250
|
|
|
300
|
|
|
355
|
|
||||
Performance stock units
|
109
|
|
|
144
|
|
|
169
|
|
|
153
|
|
||||
Diluted
|
19,431
|
|
|
19,328
|
|
|
19,531
|
|
|
19,389
|
|
||||
Basic earnings per share
|
$
|
0.75
|
|
|
$
|
0.61
|
|
|
$
|
1.38
|
|
|
$
|
1.15
|
|
Diluted earnings per share
|
$
|
0.73
|
|
|
$
|
0.59
|
|
|
$
|
1.35
|
|
|
$
|
1.12
|
|
3
.
|
Revenue
|
|
December 31,
2018 |
|
June 30,
2019 |
|
Change
|
||||||
Contract assets
|
|
|
|
|
|
||||||
Unbilled receivables
|
$
|
8,684
|
|
|
$
|
10,237
|
|
|
$
|
1,553
|
|
Contract assets
|
15,291
|
|
|
14,506
|
|
|
(785
|
)
|
|||
Total contract assets
|
23,975
|
|
|
24,743
|
|
|
768
|
|
|||
|
|
|
|
|
|
||||||
Contract liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
40,673
|
|
|
$
|
37,424
|
|
|
$
|
(3,249
|
)
|
4
.
|
Allowance for Doubtful Accounts
|
Balance at December 31, 2018
|
$
|
3,502
|
|
Provision charged to income
|
1,821
|
|
|
Write-offs, net of recoveries
|
(1,099
|
)
|
|
Balance at June 30, 2019
|
$
|
4,224
|
|
5
.
|
Property and Equipment, net
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Leasehold improvements
|
$
|
46,741
|
|
|
$
|
48,455
|
|
Office furniture, fixtures and equipment
|
17,586
|
|
|
17,919
|
|
||
Computer equipment and software
|
26,830
|
|
|
27,063
|
|
||
Property and equipment, gross
|
91,157
|
|
|
93,437
|
|
||
Accumulated depreciation
|
(60,369
|
)
|
|
(59,566
|
)
|
||
Property and equipment, net
|
$
|
30,788
|
|
|
$
|
33,871
|
|
6.
|
Leases
|
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
||||
Operating lease cost
|
$
|
5,907
|
|
|
$
|
12,480
|
|
Variable lease cost
|
2,057
|
|
|
3,914
|
|
||
Total lease cost
|
$
|
7,964
|
|
|
$
|
16,394
|
|
|
Six Months Ended
June 30, 2019 |
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
16,886
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
||
Operating leases
|
$
|
11,441
|
|
|
Operating Lease Maturity
|
||
2019
|
$
|
15,392
|
|
2020
|
30,774
|
|
|
2021
|
25,991
|
|
|
2022
|
22,388
|
|
|
2023
|
19,429
|
|
|
Thereafter
|
13,455
|
|
|
Total lease payments
|
127,429
|
|
|
Less: Interest
|
(11,378
|
)
|
|
Present value of lease liabilities
|
$
|
116,051
|
|
7
.
|
Financial Instruments and 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.
|
|
Fair Value
|
|
Balance Sheet Classification
|
||||||||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||
Balance at June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
|
|
|
|
|
|
|
|
$
|
78,982
|
|
|
$
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
5,518
|
|
|
—
|
|
|
—
|
|
|
5,518
|
|
|
5,518
|
|
|
—
|
|
||||||
U.S. Treasury securities
|
57,501
|
|
|
12
|
|
|
—
|
|
|
57,513
|
|
|
18,815
|
|
|
38,698
|
|
||||||
Total Level 1
|
63,019
|
|
|
12
|
|
|
—
|
|
|
63,031
|
|
|
24,333
|
|
|
38,698
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial paper
|
1,999
|
|
|
—
|
|
|
—
|
|
|
1,999
|
|
|
1,999
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
65,018
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
65,030
|
|
|
$
|
105,314
|
|
|
$
|
38,698
|
|
|
Fair Value
|
|
Balance Sheet Classification
|
||||||||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||
Balance at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
|
|
|
|
|
|
|
|
$
|
279,829
|
|
|
$
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
77
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
77
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
$
|
279,906
|
|
|
$
|
—
|
|
(1)
|
Level 1 – Quoted prices in active markets for identical assets and liabilities.
|
(2)
|
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.
|
|
|
|
|
Balance Sheet Classification
|
||||||||||||||||||||
|
|
Fair Value
|
|
Other Current Assets
|
|
Assets Designated for Retirement and Pension Plans
|
|
Investments
|
|
Other Current Liabilities
|
|
Retirement and Pension Plans
|
||||||||||||
Balance at June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. non-qualified deferred compensation plan
|
|
$
|
23,647
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,647
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement and pension plan assets
|
|
16,246
|
|
|
1,337
|
|
|
14,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Pension benefit obligation
|
|
(20,275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,338
|
)
|
|
(18,937
|
)
|
||||||
Total Level 2
|
|
(4,029
|
)
|
|
1,337
|
|
|
14,909
|
|
|
—
|
|
|
(1,338
|
)
|
|
(18,937
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
$
|
19,618
|
|
|
$
|
1,337
|
|
|
$
|
14,909
|
|
|
$
|
23,647
|
|
|
$
|
(1,338
|
)
|
|
$
|
(18,937
|
)
|
|
|
|
|
Balance Sheet Classification
|
||||||||||||||||||||
|
|
Fair Value
|
|
Other Current Assets
|
|
Assets Designated for Retirement and Pension Plans
|
|
Investments
|
|
Other Current Liabilities
|
|
Retirement and Pension Plans
|
||||||||||||
Balance at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. non-qualified deferred compensation plan
|
|
$
|
19,442
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,442
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement and pension plan assets
|
|
16,384
|
|
|
1,349
|
|
|
15,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Pension benefit obligation
|
|
(20,908
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,349
|
)
|
|
(19,559
|
)
|
||||||
Total Level 2
|
|
(4,524
|
)
|
|
1,349
|
|
|
15,035
|
|
|
—
|
|
|
(1,349
|
)
|
|
(19,559
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
$
|
14,918
|
|
|
$
|
1,349
|
|
|
$
|
15,035
|
|
|
$
|
19,442
|
|
|
$
|
(1,349
|
)
|
|
$
|
(19,559
|
)
|
(1)
|
Level 1 – Quoted prices in active markets for identical assets and liabilities.
|
(2)
|
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.
|
|
Acquisition
Earnout Accruals |
||
Balance at December 31, 2018
|
$
|
(6,627
|
)
|
Earnout accretion
|
(327
|
)
|
|
Earnout payments
|
553
|
|
|
DSI earnout adjustment
|
(56
|
)
|
|
Foreign currency translation
|
20
|
|
|
Balance at June 30, 2019
|
$
|
(6,437
|
)
|
8
.
|
Goodwill and Other Intangible Assets
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Executive Search
|
|
|
|
||||
Americas
|
$
|
88,547
|
|
|
$
|
88,410
|
|
Europe
|
24,782
|
|
|
24,924
|
|
||
Asia Pacific
|
8,741
|
|
|
8,758
|
|
||
Total Executive Search
|
122,070
|
|
|
122,092
|
|
||
Heidrick Consulting
|
36,257
|
|
|
36,257
|
|
||
Goodwill, gross
|
158,327
|
|
|
158,349
|
|
||
Accumulated impairment
|
(36,257
|
)
|
|
(36,257
|
)
|
||
Goodwill, net
|
$
|
122,070
|
|
|
$
|
122,092
|
|
|
Executive Search
|
|
|
|
|
||||||||||||||
|
Americas
|
|
Europe
|
|
Asia Pacific
|
|
Heidrick Consulting
|
|
Total
|
||||||||||
Gross goodwill at December 31, 2018
|
$
|
88,410
|
|
|
$
|
24,924
|
|
|
$
|
8,758
|
|
|
$
|
36,257
|
|
|
$
|
158,349
|
|
Accumulated impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,257
|
)
|
|
(36,257
|
)
|
|||||
Net goodwill at December 31, 2018
|
88,410
|
|
|
24,924
|
|
|
8,758
|
|
|
—
|
|
|
122,092
|
|
|||||
Foreign currency translation
|
137
|
|
|
(142
|
)
|
|
(17
|
)
|
|
—
|
|
|
(22
|
)
|
|||||
Net goodwill at June 30, 2019
|
$
|
88,547
|
|
|
$
|
24,782
|
|
|
$
|
8,741
|
|
|
$
|
—
|
|
|
$
|
122,070
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Executive Search
|
|
|
|
||||
Americas
|
$
|
13
|
|
|
$
|
52
|
|
Europe
|
1,645
|
|
|
2,086
|
|
||
Asia Pacific
|
72
|
|
|
78
|
|
||
Total Executive Search
|
1,730
|
|
|
2,216
|
|
||
Heidrick Consulting
|
—
|
|
|
—
|
|
||
Total other intangible assets, net
|
$
|
1,730
|
|
|
$
|
2,216
|
|
|
Weighted
Average Life (Years) |
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||||
Client relationships
|
6.7
|
|
$
|
15,905
|
|
|
$
|
(14,175
|
)
|
|
$
|
1,730
|
|
|
$
|
15,910
|
|
|
$
|
(13,694
|
)
|
|
$
|
2,216
|
|
Total intangible assets
|
6.7
|
|
$
|
15,905
|
|
|
$
|
(14,175
|
)
|
|
$
|
1,730
|
|
|
$
|
15,910
|
|
|
$
|
(13,694
|
)
|
|
$
|
2,216
|
|
9
.
|
Other Current Assets and Liabilities and Non-Current Liabilities
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Contract assets
|
$
|
24,743
|
|
|
$
|
23,975
|
|
Other
|
5,339
|
|
|
5,623
|
|
||
Total other current assets
|
$
|
30,082
|
|
|
$
|
29,598
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Restructuring charges
|
$
|
89
|
|
|
$
|
1,286
|
|
Other
|
26,097
|
|
|
31,933
|
|
||
Total other current liabilities
|
$
|
26,186
|
|
|
$
|
33,219
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Premise related costs
|
$
|
2,421
|
|
|
$
|
15,473
|
|
Other
|
1,896
|
|
|
1,950
|
|
||
Total other non-current liabilities
|
$
|
4,317
|
|
|
$
|
17,423
|
|
10
.
|
Line of Credit
|
11
.
|
Stock-Based Compensation
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Salaries and benefits (1)
|
$
|
2,976
|
|
|
$
|
1,513
|
|
|
$
|
4,647
|
|
|
$
|
3,289
|
|
General and administrative expenses
|
460
|
|
|
563
|
|
|
460
|
|
|
563
|
|
||||
Income tax benefit related to stock-based compensation included in net income
|
908
|
|
|
550
|
|
|
1,349
|
|
|
1,021
|
|
|
Number of
Restricted Stock Units |
|
Weighted-
Average Grant-Date Fair Value |
|||
Outstanding on December 31, 2018
|
512,446
|
|
|
$
|
28.83
|
|
Granted
|
109,298
|
|
|
39.57
|
|
|
Vested and converted to common stock
|
(175,792
|
)
|
|
24.19
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding on June 30, 2019
|
445,952
|
|
|
$
|
33.10
|
|
|
Number of
Performance
Stock Units
|
|
Weighted-
Average Grant-Date Fair Value |
|||
Outstanding on December 31, 2018
|
197,117
|
|
|
$
|
27.58
|
|
Granted
|
64,701
|
|
|
37.62
|
|
|
Vested and converted to common stock
|
(99,219
|
)
|
|
25.04
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding on June 30, 2019
|
162,599
|
|
|
$
|
33.13
|
|
|
Number of
Phantom
Stock Units
|
|
Outstanding on December 31, 2018
|
111,673
|
|
Granted
|
—
|
|
Vested and converted to common stock
|
—
|
|
Forfeited
|
—
|
|
Outstanding on June 30, 2019
|
111,673
|
|
|
Employee Related
|
|
Other
|
|
Total
|
||||||
Outstanding on December 31, 2018
|
$
|
1,269
|
|
|
$
|
17
|
|
|
$
|
1,286
|
|
Cash payments
|
(1,127
|
)
|
|
—
|
|
|
(1,127
|
)
|
|||
Other
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|||
Exchange rate fluctuations
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Outstanding on June 30, 2019
|
$
|
72
|
|
|
$
|
17
|
|
|
$
|
89
|
|
13
.
|
Income Taxes
|
14
.
|
Changes in Accumulated Other Comprehensive Income
|
|
|
Available-
for- Sale Securities |
|
Foreign
Currency Translation |
|
Pension
|
|
AOCI
|
||||||||
Balance at December 31, 2018
|
|
$
|
—
|
|
|
$
|
5,258
|
|
|
$
|
(1,196
|
)
|
|
$
|
4,062
|
|
Other comprehensive income before classification, net of tax
|
|
12
|
|
|
313
|
|
|
—
|
|
|
325
|
|
||||
Amount reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net current period other comprehensive income
|
|
12
|
|
|
313
|
|
|
—
|
|
|
325
|
|
||||
Balance at June 30, 2019
|
|
$
|
12
|
|
|
$
|
5,571
|
|
|
$
|
(1,196
|
)
|
|
$
|
4,387
|
|
15
.
|
Segment Information
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
|
|||||||
Americas
|
$
|
100,517
|
|
|
$
|
102,692
|
|
|
$
|
199,822
|
|
|
$
|
188,995
|
|
Europe
|
34,864
|
|
|
37,286
|
|
|
68,417
|
|
|
72,967
|
|
||||
Asia Pacific
|
23,163
|
|
|
26,517
|
|
|
48,610
|
|
|
50,365
|
|
||||
Total Executive Search
|
158,544
|
|
|
166,495
|
|
|
316,849
|
|
|
312,327
|
|
||||
Heidrick Consulting
|
14,578
|
|
|
16,564
|
|
|
27,867
|
|
|
30,803
|
|
||||
Revenue before reimbursements (net revenue)
|
173,122
|
|
|
183,059
|
|
|
344,716
|
|
|
343,130
|
|
||||
Reimbursements
|
5,051
|
|
|
4,630
|
|
|
9,731
|
|
|
9,217
|
|
||||
Total revenue
|
$
|
178,173
|
|
|
$
|
187,689
|
|
|
$
|
354,447
|
|
|
$
|
352,347
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
28,551
|
|
|
$
|
26,012
|
|
|
$
|
51,000
|
|
|
$
|
46,647
|
|
Europe
|
1,157
|
|
|
2,295
|
|
|
3,322
|
|
|
5,549
|
|
||||
Asia Pacific
|
3,315
|
|
|
2,891
|
|
|
8,221
|
|
|
7,194
|
|
||||
Total Executive Search
|
33,023
|
|
|
31,198
|
|
|
62,543
|
|
|
59,390
|
|
||||
Heidrick Consulting
|
(4,793
|
)
|
|
(3,997
|
)
|
|
(9,620
|
)
|
|
(9,227
|
)
|
||||
Total segment operating income
|
28,230
|
|
|
27,201
|
|
|
52,923
|
|
|
50,163
|
|
||||
Global Operations Support
|
(9,877
|
)
|
|
(8,740
|
)
|
|
(18,179
|
)
|
|
(18,581
|
)
|
||||
Total operating income
|
$
|
18,353
|
|
|
$
|
18,461
|
|
|
$
|
34,744
|
|
|
$
|
31,582
|
|
16
.
|
Guarantees
|
17
.
|
Commitments and Contingencies
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Revenue
|
|
|
|
|
|
|
|
||||
Revenue before reimbursements (net revenue)
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Reimbursements
|
2.9
|
|
|
2.5
|
|
|
2.8
|
|
|
2.7
|
|
Total revenue
|
102.9
|
|
|
102.5
|
|
|
102.8
|
|
|
102.7
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||
Salaries and benefits
|
69.7
|
|
|
69.7
|
|
|
70.0
|
|
|
69.7
|
|
General and administrative expenses
|
19.7
|
|
|
20.2
|
|
|
19.9
|
|
|
21.1
|
|
Reimbursed expenses
|
2.9
|
|
|
2.5
|
|
|
2.8
|
|
|
2.7
|
|
Total operating expenses
|
92.3
|
|
|
92.4
|
|
|
92.7
|
|
|
93.5
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
10.6
|
|
|
10.1
|
|
|
10.1
|
|
|
9.2
|
|
|
|
|
|
|
|
|
|
||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
||||
Interest, net
|
0.2
|
|
|
—
|
|
|
0.4
|
|
|
0.1
|
|
Other, net
|
0.4
|
|
|
—
|
|
|
0.7
|
|
|
(0.1
|
)
|
Net non-operating income (expense)
|
0.6
|
|
|
—
|
|
|
1.0
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
||||
Income before income taxes
|
11.2
|
|
|
10.1
|
|
|
11.1
|
|
|
9.1
|
|
|
|
|
|
|
|
|
|
||||
Provision for income taxes
|
3.0
|
|
|
3.8
|
|
|
3.5
|
|
|
2.8
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
8.2
|
%
|
|
6.3
|
%
|
|
7.6
|
%
|
|
6.3
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
100,517
|
|
|
$
|
102,692
|
|
|
$
|
199,822
|
|
|
$
|
188,995
|
|
Europe
|
34,864
|
|
|
37,286
|
|
|
68,417
|
|
|
72,967
|
|
||||
Asia Pacific
|
23,163
|
|
|
26,517
|
|
|
48,610
|
|
|
50,365
|
|
||||
Total Executive Search
|
158,544
|
|
|
166,495
|
|
|
316,849
|
|
|
312,327
|
|
||||
Heidrick Consulting
|
14,578
|
|
|
16,564
|
|
|
27,867
|
|
|
30,803
|
|
||||
Revenue before reimbursements (net revenue)
|
173,122
|
|
|
183,059
|
|
|
344,716
|
|
|
343,130
|
|
||||
Reimbursements
|
5,051
|
|
|
4,630
|
|
|
9,731
|
|
|
9,217
|
|
||||
Total revenue
|
$
|
178,173
|
|
|
$
|
187,689
|
|
|
$
|
354,447
|
|
|
$
|
352,347
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
||||||||
Executive Search
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
28,551
|
|
|
$
|
26,012
|
|
|
$
|
51,000
|
|
|
$
|
46,647
|
|
Europe
|
1,157
|
|
|
2,295
|
|
|
3,322
|
|
|
5,549
|
|
||||
Asia Pacific
|
3,315
|
|
|
2,891
|
|
|
8,221
|
|
|
7,194
|
|
||||
Total Executive Search
|
33,023
|
|
|
31,198
|
|
|
62,543
|
|
|
59,390
|
|
||||
Heidrick Consulting
|
(4,793
|
)
|
|
(3,997
|
)
|
|
(9,620
|
)
|
|
(9,227
|
)
|
||||
Total segment operating income
|
28,230
|
|
|
27,201
|
|
|
52,923
|
|
|
50,163
|
|
||||
Global Operations Support
|
(9,877
|
)
|
|
(8,740
|
)
|
|
(18,179
|
)
|
|
(18,581
|
)
|
||||
Total operating income
|
$
|
18,353
|
|
|
$
|
18,461
|
|
|
$
|
34,744
|
|
|
$
|
31,582
|
|
(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
. Pursuant to the Program and contingent upon the execution of the Agreement, the Company hereby grants to the Participant a target award of [
_____]
PSUs subject to the terms and conditions herein.
|
(a)
|
The number of [
_____]
PSUs granted under the Agreement that shall vest on [
_____]
is subject to the following conditions:
|
(i)
|
50% of the award will be based upon the attainment of Adjusted Operating Margin (“AOM”) goals for the 3 year period 2019 through 2021. The attainment will be in accordance with the schedule set forth below.
|
3-year Adjusted Operating Margin
|
Percentage of
Target PSUs Vesting
|
Intentionally omitted due to competitive nature of information
|
200% (Maximum)
|
100% (Target)
|
|
50% (Threshold)
|
|
0 %
|
(ii)
|
50% of the award will be based upon the attainment of Total Shareholder Return (R-TSR) performance relative to the HR & Employment Services Industry. The attainment will be in accordance with the schedule set forth below.
|
3-year R-TSR
|
Percentage of
Target PSUs Vesting
|
75
th
Percentile or greater
|
200% (Maximum)
|
50
th
Percentile
|
100% (Target)
|
25
th
Percentile
|
50% (Threshold)
|
Less than 25
th
Percentile
|
0 %
|
(iii)
|
The Participant has been in Continuous Service through the 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, or the Participant’s service as a member of the Board of Directors of the Company, 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.
|
(b)
|
Notwithstanding the terms of Section 3(a) above, if the Participant’s Continuous Service is terminated as a result of the Participant’s death or Disability, the target number of PSUs granted to the Participant under the Agreement will immediately vest.
|
(c)
|
In the case of a Participant who is both an employee of the Company or any Subsidiary or Affiliate and a member of the Board of Directors of the Company, Continuous Service shall not end until the Participant’s service as both an employee and a director terminates.
|
4.
|
Change in Control
. The PSUs are subject to the Change of Control provisions as set forth in detail in the Plan.
|
(a)
|
PSUs are not Shares and the grant of a target number of PSUs shall provide only those rights expressly set forth in the Agreement and the Program. The Participant is not deemed to be a stockholder in the Company or have any of the rights of a stockholder in the Company by virtue of the grant of PSUs.
|
(b)
|
The Participant does not have voting rights or any other rights inherent to the ownership of Shares, including the rights to dividends (other than as provided in Section 10), or other liquidating or non-liquidating distributions, by virtue of being granted PSUs.
|
(c)
|
Neither the PSUs nor any right hereunder or under the Program shall be transferable or be subject to attachment, execution or other similar process. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate or otherwise dispose of the PSUs or of any right hereunder or under the Program, except as provided for in the Program, or in the event of any levy or any attachment, execution or similar process upon the rights or interest conferred by the PSUs, the Company may terminate the PSUs by notice to the Participant and the PSUs and any related rights, including the right to dividend equivalents as described in Section 10, shall thereupon be cancelled.
|
(a)
|
If, and at the time, the Participant’s PSUs vest under the terms of Section 3 or Section 4, such Participant shall receive as full consideration for the PSUs a number of Shares equal to the number of PSUs which vested on such date.
|
(b)
|
The PSUs granted to the Participant shall be maintained in a bookkeeping account with the custodian appointed by the Committee from time to time (the “Custodian”) for such Participant if and until the PSUs are converted into Shares pursuant to this Section 6, at which time the Shares shall be issued to the Participant in accordance with Section 9 below.
|
7.
|
Forfeiture of PSUs
. Subject to the next following sentence, the Participant’s PSUs shall be forfeited to the Company upon the Participant’s termination of Continuous Service with the Company and its Subsidiaries and Affiliates (a) for any reason other than the Participant’s death or Disability that occurs prior to the date the PSUs vest as provided in Section 3 above or (b) for any reason other than the Participant’s termination by the Company 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 4 above. The foregoing provisions of this Section 7 shall be subject to the provisions of the Company’s Bonus, Restricted Stock Unit, Performance Stock Unit and Bonus Cash Deferral Retirement Policy (the “Retirement Policy”), and any other Company plan or written employment, severance or similar agreement that has been or may be executed by the Participant and the Company, and the provisions in such Retirement Policy or agreement concerning the vesting of the PSUs in connection with the Participant’s termination of Continuous Service shall supersede any inconsistent or contrary provision of this Section 7.
|
8.
|
Compensation Recovery
. The Participant’s PSUs are subject to the Clawback Policy adopted by the Board of Directors.
|
9.
|
Delivery of Shares to the Participant
. As soon as practicable after the PSUs vest and are converted into Shares, and subject to Section 11, 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, (a) a statement from the Custodian referencing the number of Shares held in the Participant’s name in a book entry account, or (b) at the Participant’s request, certificate(s) for the number of Shares as to which the PSUs vested. In any event, Shares due the Participant shall be delivered as described above no later than March 15 of the year following the calendar year in which such PSUs vest.
|
10.
|
Dividend Equivalents
. The Company shall credit the Participant’s PSU account with an amount equal to the dividends, if any, that would be paid with respect to the unvested PSUs as if the PSUs were actual Shares to a shareholder as of the Record date. Such amount shall be credited to the Participant’s PSU 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 7 of the Agreement, and shall be paid to the Participant in cash, on the first payroll date following the date the Participant’s related PSUs vest and are issued as Shares to the Participant.
|
(a)
|
The Company or any Subsidiary or Affiliate is authorized to withhold from any payment to be made to the Participant, 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 under Section 6. The Participant shall hold the Company
|
(b)
|
The Participant may pay withholding taxes attributable to the receipt of Shares in cash, by having Shares withheld by the Company from any Shares that would otherwise be received by the Participant under the Agreement (in which case, the number of Shares so withheld shall have an aggregate Fair Market Value at the time of such withholding sufficient to satisfy the applicable withholding taxes), or by any other method approved by the Committee. If the Participant does not satisfy the withholding obligation by cash payment within a reasonable time established by the Committee, the Participant’s withholding obligation shall be satisfied by the Company’s withholding of Shares from the vested PSUs.
|
(c)
|
The Company shall deduct from the dividend equivalents paid to the Participant pursuant to Section 10 the Participant’s withholding obligation arising from such payment.
|
(a)
|
The granting of an Award under the Program and the Agreement shall impose no obligation on the Company or any Subsidiary or Affiliate to continue the employment relationship or any other relationship between it and the Participant and shall not lessen or affect the Company’s, Subsidiary’s or Affiliate’s right to terminate its relationship with the Participant. The Participant shall have no claim to be granted any further or other Award under the Program, and there is no obligation for uniformity of treatment of the Participants. 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 PSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of PSUs, or benefits in lieu of PSUs, even if PSUs have been granted repeatedly in the past; (iii) all decisions with respect to future PSU grants, if any, will be at the sole discretion of the Company; (iv) participation in the Program is voluntary; (v) the PSUs are not a part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (vi) the future value of the underlying shares is unknown and cannot be predicted with certainty; and (vii) in consideration of the grant of PSUs, no claim or entitlement to compensation or damages shall arise from termination of the PSUs or diminution in value of the PSUs or Shares received upon vesting including (without limitation) any claim or entitlement resulting from termination of the Participant’s active employment by the Company or a Subsidiary or Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant hereby releases the Company and its Subsidiaries and Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, the Participant shall be deemed irrevocably to have waived the Participant’s entitlement to pursue such claim.
|
(b)
|
The Agreement shall, subject to the terms hereof, terminate upon the forfeiture and/or vesting of all PSUs and dividend equivalents granted to the Participant hereunder, unless otherwise agreed upon by the parties hereto.
|
(c)
|
The Agreement may be amended by the written agreement of the Company and the Participant. Notwithstanding the foregoing, (i) 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; and (ii) 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.
|
(d)
|
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 PSUs 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.
|
(e)
|
Unless waived by the Company, any notice to the Company required under or relating to the Agreement shall be in writing and addressed to:
|
13.
|
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.
|
14.
|
Data Privacy.
By signing below, the Participant voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 14. 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
|
(a)
|
The Parties agree that this Agreement shall be considered executed by both parties executing the Agreement as 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:
|
July 29, 2019
|
|
/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:
|
July 29, 2019
|
|
/s/ Mark R. Harris
|
|
|
|
Mark R. Harris
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Dated:
|
July 29, 2019
|
|
/s/ Krishnan Rajagopalan
|
|
|
|
Krishnan Rajagopalan
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Dated:
|
July 29, 2019
|
|
/s/ Mark R. Harris
|
|
|
|
Mark R. Harris
|
|
|
|
Executive Vice President and Chief Financial Officer
|