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Executives

Julie Creed - Vice President of Investor Relations and Director of Workplace Strategies

L. Kevin Kelly - Chief Executive Officer, President and Director

Richard W. Pehlke - Chief Financial Officer and Executive Vice President

Analysts

Stephen Sheldon

Kevin D. McVeigh - Macquarie Research

Randle G. Reece - Avondale Partners, LLC, Research Division

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Heidrick & Struggles International (HSII) Q1 2013 Earnings Call May 9, 2013 10:00 AM ET

Operator

Good morning. Welcome to today's Heidrick & Struggles First Quarter 2013 Conference Call. This call is being recorded. It may not be reproduced or retransmitted without the company's consent. [Operator Instructions] Now I'd like to turn the call over to your host for today's call, Julie Creed, Vice President of Investor Relations and Real Estate. Please go ahead.

Julie Creed

Good morning, everyone, and thank you for participating in Heidrick & Struggles 2013 first quarter conference call. Joining me on the call today are Kevin Kelly, Chief Executive Officer; and Rich Pehlke, our Chief Financial Officer. As a reminder, we'll be referring to supporting slides that are available on our website at heidrick.com in the Investor Relations home page, and we encourage you to follow along or print them.

As always, we advise you that this call may not be reproduced or retransmitted without our consent. In today's call, we're going to be using the terms adjusted EBITDA and adjusted EBITDA margin. These are non-GAAP financial measures that we believe better explain some of our results. A reconciliation between GAAP and non-GAAP financial measures can be found on Page 3 of our press release and on Slide 13 in our supporting slides. We'll be making forward-looking statements on today's call and ask that you please refer to the Safe Harbor language contained in our news release and on Slide 1 of our presentation. The slide numbers that we're going to be referring to are shown in the bottom right-hand corner of each slide.

And now, I'll turn the call over to you, Kevin. Please start on Slide 2.

L. Kevin Kelly

Thanks, Julie. Good morning, and thank you for joining today's call. With the acquisition of Senn Delaney at the beginning of 2013, we're making great progress enhancing our leadership services platform and positioning ourselves as a leadership advisor. But our first priority remains growing our core Executive Search business. Although Heidrick & Struggles maintains an enviable position within the ranks of the C-suite and Boards of the leading Fortune 500 companies, and continues to win some of the most coveted search assignments, we believe we can achieve better results in our core search business.

We saw signs of improvement in the first quarter of 2013 in the Americas and Asia Pacific, and provide some encouragement for the remainder of the year. Specifically in the Americas, the Financial Services, Life Sciences, Education & Social Enterprise and Global Technology & Services for search practices achieved double-digit year-over-year growth. The New York office was also up 25%, a good indication that the Financial Services sector may be stabilizing. And Asia, which started off the year a little slow, revenue picked up later in the quarter and was down just $800,000 year-over-year or 4%. The Industrial practice posted a 37% increase in year-over-year revenue, and there were 6 offices in the region that achieved at least 20% year-over-year revenue growth.

Dubai achieved the highest year-over-year increase, highlighting that the team we acquired there last year is performing well. Hong Kong, where we also were seeing encouraging signs from the Financial Services practice, also had a great quarter. But as you saw in this morning's earnings release, our European business continues to struggle. Continued weak economic positions in the region, as well as fewer consultants, resulted in a 30% decline in revenue year-over-year. We can't count on the economy to improve in this region. Just last week, the European Commission confirmed that the Eurozone economy will contract by more than expected this year, and budget deficits will decline more slowly. But we are taking actions to restore the growth of this region, including increasing our talents and capability levels across the company, which I'll talk more about later in the call.

Turning to Slide 2, our Leadership Consulting business reported a $5.4 million decline compared to last year. As we mentioned in previous calls, the departure of a top producer at the end of the first quarter last year impacted the results, as did the European economy. Our strategic initiatives are focused on building a more scalable business model for Leadership Consulting.

The acquisition of Senn Delaney was a significant milestone in our strategy to build the premier Professional Services firm focused on serving the leadership talent needs of the world's top organizations. We are now 4 months into our integration, and I'm very pleased to report that Senn Delaney has performed exactly as expected. Senn Delaney's unique service offering and unmatched brands has already begun to demonstrate value for our firm and for our clients. Just within the last month, Senn Delaney played a key role in our win of several high-level search assignments. One client, a U.K.-based global financial service provider, told us that the breadth of our Financial Services, Technology and culture-shaping capabilities are what stood out when they selected Heidrick over its longtime search partner. We believe this is just the start of what we envision to be an exciting growth opportunity and in the months and years ahead, we expect to yield more benefits from leveraging the strength of Senn Delaney across our practices and regions. I'm going to stop here so Rich can provide further detail on the first quarter.

Richard W. Pehlke

Thanks, Kevin, and good morning, everyone. I'll begin with Slide 5. First quarter net revenue of $103 million was down 3% year-over-year. The first quarter is traditionally our lowest revenue and operating margin quarter because it is impacted by November and December confirmations, which are seasonally lower because of the holiday season. Senn Delaney's operations were just as expected in the first quarter. You may remember from our call in February that we are limited in the amount of pre-acquisition deferred revenue that we are able to recognize in our reported results related to the purchase accounting of Senn Delaney. The total amount of this permanent difference around recognizable revenue is $4.4 million for the year 2013.

During the first quarter, we recorded $5.6 million of revenue from Senn Delaney versus the $7.6 million of revenue that would've been reported on a standalone basis. We anticipate the majority of the remaining $2.4 million difference that we cannot recognize will be -- will impact both the second and third quarters of 2013.

As a result of the revenue deferral at Senn Delaney, our reported results show that Senn Delaney is dilutive for Heidrick & Struggles in its first year. But from an economic and cash flow perspective, Senn Delaney will be -- is expected to be accretive.

Looking at Slide 6, we ended the quarter with 322 consultants in Executive Search and Leadership Consulting. We've been actively recruiting throughout the first and second quarter, and we continue to attract many professionals to Heidrick & Struggles. 10 consultants have been hired since March 31, with 2 in the Americas, 4 in Europe and 6 in Asia. And we also promoted 4 new principals in the beginning of the second quarter. Many of our first quarter recruits are already bringing new business to the firm and contributing to revenue. On Slide 7, first quarter Executive Search confirmations were down 6% compared to last year's first quarter, but up 10% sequentially compared to the fourth quarter, given us better momentum heading into the second quarter.

Slide 8 shows annualized consultant productivity, which is the revenue from Executive Search and Leadership Consulting divided by the average number of consultants during the quarter. It was $1.2 million in the first quarter, the same as in last year's first quarter.

Turning to Slide 9, revenue for search confirmation continues to improve, with $103,000 in the first quarter, up 3% year-over-year. But as in the past, we think it is more relevant to look at this metric on a trailing 12-month basis where it's at almost $115,000, an improvement over the prior year to the fourth quarter, and speaking to the strengths of our C-suite and Board level.

Referring to Slides 10 and 11, salaries and employee benefits expense was $71.5 million, down $5.2 million or about 7% compared to last year's first quarter. Variable compensation accounted for $3.6 million of the decline, reflecting the lower bonus accruals related to lower net revenue levels in the Executive Search and Leadership Consulting businesses. And fixed compensation expense also was lowered by $1.6 million, reflecting lower consultant headcount and a decline in guarantee and sign-on bonus expense. And these factors were partially offset by the addition of the Senn Delaney employee base.

Turning to Slide 12, G&A expenses increased $4.7 million year-over-year or 18% to $31.1 million in the first quarter. Of this increase, $3.3 million is related to the inclusion of Senn Delaney, which includes our ongoing G&A expense run rate, as well as $1.4 million for intangible asset amortization, and $500,000 associated with the accretion expense of the earnout payment. Significant items driving the balance and the G&A increase are $1.4 million included expenses related to our proprietary search database, a regional consultants' meeting in Asia Pacific in the first quarter and professional fees associated with the integration of Senn Delaney. We continue to be diligent in our oversight of operating expenses, and we are striving to continue to reduce costs wherever we can.

Now I'll refer to Slides 13 and 15. As you read in our release, we've introduced adjusted EBITDA and adjusted EBITDA margin. We've done this in order to provide you with more meaningful comparative results of our core operations that exclude the noncash expenses, many of which are specific to the purchase accounting treatment of Senn Delaney. You'll see our definition of adjusted EBITDA on Slide 13 and on Page 3 of the release. Adjusted EBITDA in the first quarter was $6.6 million, or 6.5% of revenue. The decline -- this compared to adjusted EBITDA of $7.6 million or 7.2% margin in last year's first quarter, reflecting the decline in revenue.

Moving to Slides 16 and 17, we reported a net loss in the quarter of $1.2 million and a net loss per share of $0.07 after an income tax provision of $1.3 million. The unusually high effective tax rate in the first quarter of 2013 is the result of our incurring $4.3 million of losses in foreign countries, primarily in Europe, that are not benefited for tax purposes. Our adjusted full year expected annualized tax rate is approximately 58%, the tax loss carryforwards that are not permanent and can be used in the future when we begin to report operating profits in those regions.

Please turn to Slide 18. Our cash position remains strong. In the first quarter, we added $40 million in the form of a 5-year term loan facility to finance a portion of the acquisition of Senn Delaney, and the interest rate for that loan is just under 2.3%. We paid approximately $81 million -- a combined $81 million related to the bonus payments for 2012 and for deferred bonuses from prior years during the quarter. At March 31, cash and cash equivalents were $85.7 million. We expect to build on this position throughout the year. And we have ample financial flexibility to continue to invest and grow our business.

As we stated in the release, we are forecasting second quarter net revenue of between $110 million and $120 million. The factors we based our forecast include our current backlog, which is shown on Slide 19; our confirmation trends for Executive Search and Leadership Consulting, which are illustrated on Slide 20; our anticipated fees from those businesses; the expectations for Senn Delaney; the number of consultants that we expect; the current economic climate and stable currency rates. With that, I'll turn it back to Kevin.

L. Kevin Kelly

Thanks, Rich. For our company to perform optimally, each of our businesses must contribute, which is why our focus continues to be on strengthening our platforms to meet the increasingly complex needs of our clients and broadening our Leadership Consulting capabilities. We are aggressively investing in our core Executive Search business to ensure that we are recruiting and retaining the best consultants in the industry, while working at the top of client organizations and delivering the best service.

In addition, we are investing and increasing the talent and production levels of our existing consultants through training and development. In February, we held our Asia Pacific regional meeting in Bangkok. And in June, we'll hold regional meetings in Europe and the Americas. The worldwide and regional meetings have proven year-after-year that bringing consultants together to share ideas and best practices increases the value we deliver to our clients globally. At the same time, we must ensure that we fully realize the promise of our investments in Leadership Consulting. As such, we are investing in scalable intellectual property platforms around the 6 core solutions we provide that will help our consultants around the world deliver projects for our global client base more efficiently. We're also pursuing more robust business development channels to complement our Executive Search relationships. We are also focused and committed to improving our business in Europe and returning it to growth and importantly, profitability despite the persistent economic slowdown there.

As Rich mentioned earlier, we are actively recruiting in this region despite the economy, 8 consultants so far this year and more in the pipeline. We have also stepped up our training development efforts in this region. Among the many objectives for upcoming regional conference, one in particular is to provide training designed to better equip our existing consultants to compete in the current market conditions.

Heidrick & Struggles is a premium global brand it is today because of our overriding commitment to providing clients with the best leadership talent solutions. We will maintain our position by continuing to innovate and capitalize on emerging talent trends, investing in our people, attracting new talents and utilizing technology to make us work more efficiently. By leveraging our strengths, managing our business more effectively and providing our clients with outstanding service, I'm very confident that we'll return Heidrick to growth and profitability. At this time, Rich and I would like to open it up for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll take our first question from Tim McHugh with William Blair & Company.

Stephen Sheldon

This is the Stephen Sheldon for Tim today. First, I wanted to ask about Senn, the acquisition, you said it was dilutive for the quarter. I was wondering if you could give more detail on how dilutive it was during the first quarter?

L. Kevin Kelly

Well, again, because of the loss of about $2 million of revenue, that's almost a straight pass-through because we recognized the full expense base of Senn Delaney in the quarter. So it's basically about 2% -- a little over $2 million on a pretax basis.

Stephen Sheldon

Okay, great. And then as we go forward, I think you said on the last call that it was a 30% EBITDA margin business in 2012. Is that how we should be thinking about that as we move forward?

L. Kevin Kelly

Yes, yes. It's performing very much in line, and we're very confident about the level of cash flow and EBITDA that it will produce. And we'll receive the full economic benefit of that throughout the year. But we just don't recognize the revenue -- we just lost a portion of the recognizable revenue in this current year because of the purchase accounting.

Operator

And we'll go next to Kevin McVeigh with Macquarie.

Kevin D. McVeigh - Macquarie Research

I wonder -- kind of the integration sounds like it's been going real well in terms of Senn Delaney. How's it been from a cultural perspective? And as you go to market, it sounds like you've been -- had some success on kind of winning some engagements. Just any sense of, culturally, how the integration's been going, and then just as you build the brand here and ultimately into Europe? Just any thoughts on that will be helpful?

Richard W. Pehlke

Absolutely, it's going very well from a cultural standpoint. one of the reasons they selected us, and given that this is what they do for a living, was the culture at Heidrick & Struggles. And that's carried over into client relationships. We have a number of joint clients, which have been very happy with the acquisition of Senn Delaney. They've passed off Executive Search work, we've passed off culture-shaping work, and we've been going to market together here in North America and Europe. We just started in Europe, and we're looking forward to actually rolling more of Senn Delaney's clients -- excuse me, our clients up in conjunction with the Senn Delaney partners in Asia Pacific. So, so far, so good. It's been very well received in the market. And on both sides, it's helped us win senior-level engagements.

Kevin D. McVeigh - Macquarie Research

And then, Kevin, if we're thinking about kind of Europe obviously not counting on the economy getting any better, how does that kind of change the approach longer term, be it thoughts around expense or revenue opportunities? Or just your approach to Europe, does it change longer term, just given the macro headwinds that we've been seeing? And just any thoughts on ultimately how that would impact margins?

L. Kevin Kelly

I think one of the things we're excited about, and I just spent time in Europe is the fact that we're hiring a number of high-caliber consultants to fill in gaps. There is market share to be had. And we believe by investing in training and development and getting the right talent in place, we can increase our revenue over there, and that falls, as Rich mentioned earlier to the bottom line. Also, using Senn Delaney right now, who just had an office in the U.K., but they have European coverage out of there. So using that as a tip of the spear, if you will, for many of our clients has been well received. And so we're going to use that as well, as well as leveraging our assessment capabilities on the Leadership Consulting side. So it's really a three-pronged approach over there, and we believe we have a tremendous opportunity in certain industry sectors to still capture market share.

Operator

And we'll will take our next question from Randy Reece with Avondale Partners.

Randle G. Reece - Avondale Partners, LLC, Research Division

I was wondering if you could talk about whether there's anything interesting going on in the mix of demand, the types and levels of engagements that are going on -- coming in the door versus what's being completed.

L. Kevin Kelly

Well, I would say that, overall, if you look at the first quarter, it was interesting. Financial Services, they did a great job. Our team did a fantastic job, and either somebody would turn around in Financial Services from the fourth to the first quarter. We've seen great trends in senior-level work across Asia Pacific at the end of the quarter, which will carry into Q2. Europe, we saw an increase, particularly in GTS and the Industrial practices at the senior level. So we've seen some very good and solid trends quite frankly across the globe coming into the end of the first quarter and -- excuse me, at the end of the first quarter moving into the second. And it's still at the C-level and Board level or the executive level, where we work, which I guess goes back to one of the slides where we showed the average revenue for search maintaining or increasing year-over-year.

Operator

And we'll take our next question from Kevin Steinke with Barrington Research.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

I just wanted to follow up a little bit more on the dilutive nature of Senn Delaney. As we go throughout the year, you separated out some of the noncash expenses in the quarter, including intangible amortization, the earnout accretion and the retention awards. Should we expect those expenses to remain at a similar level throughout each of the quarters as we go forward this year?

Richard W. Pehlke

That's correct. The difference you'll see, Kevin, is that the amount of unrecognized revenue will drop ratably. It will probably be closer to about $1.2, $1.3 million in the second quarter and closer to $1 million in the third. And by that time, we'll be back on an even keel. But the rate of noncash expenses that we're now adjusting for in the adjusted EBITDA reconciliation is pretty consistent.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Okay. You talked about a pickup in Asia Pacific, I think, near the end of the first quarter and good trends continuing into the second quarter. Should we -- I don't know if you want to get into this level of detail, but I'm just wondering perhaps, if you could, what's embedded in your second quarter guidance in terms of growth by region, particularly Asia Pac, could we see that perhaps return to growth here in the second quarter?

Richard W. Pehlke

Sure. This is Rich. I'll start. We're not going to give individual forecast by region, but I will tell you that we feel a lot better about the Asia Pacific region coming out of the end of the first quarter and into the second quarter. You may recall that we did the restructuring in late 2011. We pretty much left that region alone because we believe longer term that is a growth area for our business, and we continue to feel that way. As Kevin indicated in his remarks, across some of our key industries, Financial Services being one of them, we're seeing some recovery in that region, in particular as well as across the globe. So we feel better, at least in the near-term outlook relative to our business, we feel better about Americas and Asia Pacific. Europe's a longer-term play. As Kevin indicated in his earlier answer, we're going to be -- we're still going to maintain a strong presence in Europe. The strength of Europe is really based upon some of our key offices, which are obviously the U.K., France and the offices in Germany. And we are well-positioned to experience good profitability on an after-tax basis and a cash flow basis as we work off those tax loss carryforwards as well as we return those areas to profitability. But that's a region that has multiple factors at play. And so we feel better about the other 2 in the near term than we do about Europe, but we're going to continue to focus on that. And we're at the point in Europe right now where, as you know about our business, the negative leverage works a little stronger than the positive leverage because of our fixed cost. And in Europe, in this particular quarter, we kind of fell below that line. And so we continue to look at the cost basis as well. But we're committed to making sure that we return that to profitability.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Okay. And the more positive trends you're seeing in the Americas and Asia Pacific, would you attribute that to a better economic environment or pent-up demand? Or what are you hearing from your clients in those regions?

L. Kevin Kelly

I say it's a combination of both, actually, what pent-up demand as you know going into last year with the U.S. elections, so a number of people -- excuse me, clients have started to hire at the beginning of the year. Through April, most of the industry practices have been up substantially. Some of the offices I mentioned in there in terms of New York was up 25%. So it's a combination of both. It's a combination of pent-up demand and some of our recruits getting up to speed and are still performing well at the senior level.

Richard W. Pehlke

And Kevin, this is Rich, you'll recall that our business really follows the -- our trends tend to follow business confidence and capital investment. And I think we're a little bit encouraged that it seems like there's been some uptick in indicators of capital and direct investment across some areas of the globe and across some industries that give us a little bit of encouragement. The people are a little bit more aggressive with their capital. And that's usually a good sign for our business, but it's not in any way in a runaway rate, but at least the indications are a bit more positive.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Okay. And last one for me, I was -- you've done some investments in the business recently, including the search database. Obviously, that's a lot further along, I think, than you mentioned today on the call, investment in some intellectual property platforms and Leadership Consulting. Can you just touch on maybe what you see the benefits of those investments being going forward?

Richard W. Pehlke

Sure. Well, let me speak a little bit to the more IT-related expenses. I'll turn it over to Kevin on the more strategic side. One of the reasons you saw the blip in some of the run rate expenses on our search database is the fact that you may recall, we introduced that on the platform midyear last year. So year-over-year, the expense run rate was slightly higher. There's not -- we'll continue to refine it, but it's not a situation where we're going to have increasing capital commitments or expense commitments expected in the year other than just normal tweaks. The great thing about that platform, and I don't think we begun to even scratch the surface of using it to our advantage yet, we're continuing to refine that. It's built on one of the most powerful platforms for our business. It gives our people a lot of great tools that we're just starting to integrate throughout. It will help us over time to build better pipelines and business development and more visibility into our business. So I'm encouraged as we continue to work with our operations that we'll get more productivity out of that over time. So at the end of the day, our best investment is in or around our people. Our asset is the great people of Heidrick & Struggles, our consultant base, our associate base, all our researchers that do client work every day. And we're going to do everything we can to make sure that we're giving them the right opportunity and the right tools to serve our clients. And I'll turn it over to Kevin for the strategic side.

L. Kevin Kelly

Sure. And I'll just build on Rich's word, which was productivity, is how do we get our consultants more productive, both on the LC side and the search side? So as I mentioned in my remarks earlier, our key focal point is scaling the Leadership Consulting business through having IP. And when I talk specifically around IP, it's helping from an assessment standpoint, a development standpoint, a succession standpoint, having the tools in place that we can couple with the Executive Search business to really help drive productivity through our consultant ranks. And that's what we're focused on today.

Operator

And we'll go next to Tobey Sommer with SunTrust.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

On the same vein, what practice group -- to what practice groups are you adding consultants? It seemed like you did a decent amount of hiring in the first quarter headed into the second. And you've touched on the geographics. So I was wondering if you could approach it from the industry perspective.

L. Kevin Kelly

Sure. I mean, I would say that we -- as we've analyzed the business, depending on the geography in which we're operating in, Tobey, we're adding consultants across-the-board. We have tremendous opportunity, I would say, in the Life Sciences practice. So that's where a key focal point of ours is. But we've added Financial Services consultants to cover some of the sectors that we didn't have. We've added in Consumer Goods, Industrial and Technology. So I'd say it's pretty much across-the-board. And we'll continue to do that to make sure, as we, Rich and I, have mentioned before, we have a broad portfolio of both functions and industry practices across the firm to offset any potential fall or risk in one industry sector.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Right, that's helpful. From a background perspective, do the new hires tend to skew towards experienced Executive Search consultants? Are they more from industry? Any color you could give on that will be great.

L. Kevin Kelly

We've done a lot of analysis, as you know, and we're trying to skew the hiring towards highly productive consultants at other search firms and/or boutiques that can be accretive right away. Rich mentioned, and we've been very impressed with the number of consultants who have joined over the last 3 to 5 months, who have gotten up to speed fairly quickly. They tend in these markets to ramp up faster. So that's been where we're focusing.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Okay. And then any color you could give us on the turnover in the quarter on the involuntary side, where your sense is, kind of what jobs they were moving onto, staying in the industry, going out to the industry?

L. Kevin Kelly

4.8%, 16 were voluntary, 4 went to competitors, 6 went to search boutiques, which it's getting somewhat tougher in these markets. So sometimes, they feel more comfortable in boutiques, and 6 resigned for unknown reasons. So just 4 in direct competitors and 6 to boutiques is what we know.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

And then from a cash flow perspective, do you have a sense for how that will trend through the year? And do you have a sense for where it may end up in 2013?

Richard W. Pehlke

I don't have a projection for final cash number, but as you may be aware, if you follow our business, our cash flow -- we are a positive cash flow business. We expect our cash balance to build throughout the year largely because of the deferral of things like bonus payments, as well as the fact that as we even indicated in our second quarter forecast, we forecast a higher level of revenue in the second quarter than the first quarter. So we'll continue to accumulate cash throughout the year, and we have ample financial flexibility to do what we need to do. You may recall, we have a $75 million credit facility that backstops any of our working capital needs. We don't draw on that, don't expect to draw on that. And we'll slowly amortize our debt that we indicated from the Senn Delaney over the course of the next 5 years on a quarterly basis. So the balance sheet's extremely strong and should be of no concern.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Last question for me is what was the bonus accrual in the quarter?

L. Kevin Kelly

The specific number?

Julie Creed

We gave the bonus expense. Tobey, it's on one of the slides. And in the first quarter, it was $11.3 million.

L. Kevin Kelly

Yes.

Operator

And at this time, we have no further questions from the phone lines.

L. Kevin Kelly

Great. I'd like to thank our colleagues across the globe. I'd also say that we're optimistic about our opportunity to capture more market share in both the search business and the Leadership Consulting business and also in conjunction with Senn Delaney, both by region and by practice. And thanks for joining today's call, and we hope you have a great day.

Operator

This does conclude today's conference. Thank you for your participation.

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