CHICAGO - Heidrick & Struggles International Inc. (NASDAQ:HSII), a global executive search and leadership consulting firm, announced on Wednesday that its Board of Directors has adopted amended and restated by-laws, effective immediately as of last Thursday, September 26, 2024. The updated by-laws aim to refine the process and requirements for stockholder nominations of directors and stockholder proposal submissions.
The amendments to the by-laws include modifications to the procedural mechanics and disclosure obligations for stockholder nominations and proposals, excluding those intended for inclusion in the company’s proxy statement under Rule 14a-8. These changes are designed to clarify and, in some cases, limit the information and disclosures required about the proposing stockholders, their nominees, and other related parties.
Additionally, the revised by-laws incorporate several ministerial and procedural adjustments for clarity and conformity with existing practices. One notable change is the clarification that special meetings of stockholders can be convened at any time by the Board of Directors, its Chair, or the Chief Executive Officer. A new provision regarding the severability of the by-laws has also been added.
In other recent news, Heidrick & Struggles has seen significant developments. The company reported a robust 3% growth in Q2 2024 revenue, reaching $279 million. This growth was distributed across key business segments, with the Executive Search business growing by 1.5% to $210 million, On-Demand Talent revenue rising by 7% to $42 million, and Heidrick Consulting's revenue increasing by 6% to $27 million. The quarter also saw a non-cash goodwill impairment and a restructuring charge, resulting in an adjusted EBITDA of $28.8 million.
The company has also expanded its board with the addition of Vijaya Kaza and Timothy Carter, while long-serving board member Lyle Logan prepares to depart. Kaza, with her background in technology, and Carter, with his financial leadership experience, are expected to enhance the board's expertise.
In light of these recent developments, Heidrick & Struggles has announced leadership changes and operational realignment aimed at sustained growth. Looking ahead, Q3 revenue is projected to be between $260 million and $280 million, and the company anticipates high single-digit margins for the On-Demand Talent business in the next 6 to 8 quarters. An Investor Day is scheduled for December to discuss R&D and digital investments.
InvestingPro Insights
Heidrick & Struggles International Inc.'s recent governance updates align with its strong financial position and market performance. According to InvestingPro data, the company's market capitalization stands at $770.84 million, with a price-to-earnings ratio of 19.87. This valuation appears reasonable, especially considering the company's solid financial health and growth prospects.
InvestingPro Tips highlight that Heidrick & Struggles holds more cash than debt on its balance sheet, indicating financial stability. This strong financial position supports the company's ability to implement governance changes and maintain shareholder-friendly policies. Additionally, the company has maintained dividend payments for 18 consecutive years, demonstrating a commitment to returning value to shareholders.
The company's recent performance has been impressive, with InvestingPro data showing a 57.11% price total return over the past year. This strong return aligns with another InvestingPro Tip noting high returns over the last year and three months, suggesting that the market has responded positively to the company's strategic decisions and financial performance.
For investors seeking more comprehensive insights, InvestingPro offers 8 additional tips for Heidrick & Struggles, providing a deeper understanding of the company's financial health and market position.
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