hsii-20210331
false2021Q1000106660512/31P3YP3YP3Y00010666052021-01-012021-03-31xbrli:shares00010666052021-04-26iso4217:USD00010666052021-03-3100010666052020-12-31iso4217:USDxbrli:shares00010666052020-01-012020-03-310001066605hsii:ReimbursementsMember2021-01-012021-03-310001066605hsii:ReimbursementsMember2020-01-012020-03-310001066605us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-12-310001066605us-gaap:TreasuryStockMember2020-12-310001066605us-gaap:AdditionalPaidInCapitalMember2020-12-310001066605us-gaap:RetainedEarningsMember2020-12-310001066605us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001066605us-gaap:RetainedEarningsMember2021-01-012021-03-310001066605us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001066605us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001066605us-gaap:TreasuryStockMember2021-01-012021-03-310001066605us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-03-310001066605us-gaap:TreasuryStockMember2021-03-310001066605us-gaap:AdditionalPaidInCapitalMember2021-03-310001066605us-gaap:RetainedEarningsMember2021-03-310001066605us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001066605us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2019-12-310001066605us-gaap:TreasuryStockMember2019-12-310001066605us-gaap:AdditionalPaidInCapitalMember2019-12-310001066605us-gaap:RetainedEarningsMember2019-12-310001066605us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100010666052019-12-310001066605us-gaap:RetainedEarningsMember2020-01-012020-03-310001066605us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-03-310001066605srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-03-310001066605us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001066605us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001066605us-gaap:TreasuryStockMember2020-01-012020-03-310001066605us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-03-310001066605us-gaap:TreasuryStockMember2020-03-310001066605us-gaap:AdditionalPaidInCapitalMember2020-03-310001066605us-gaap:RetainedEarningsMember2020-03-310001066605us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100010666052020-03-310001066605us-gaap:OtherNoncurrentAssetsMember2021-03-310001066605us-gaap:OtherNoncurrentAssetsMember2020-03-310001066605us-gaap:OtherNoncurrentAssetsMember2020-12-310001066605us-gaap:OtherNoncurrentAssetsMember2019-12-310001066605us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001066605us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-310001066605us-gaap:PerformanceSharesMember2021-01-012021-03-310001066605us-gaap:PerformanceSharesMember2020-01-012020-03-3100010666052020-01-012020-12-310001066605us-gaap:InvestmentsMember2020-12-310001066605us-gaap:LeaseholdImprovementsMember2021-03-310001066605us-gaap:LeaseholdImprovementsMember2020-12-310001066605us-gaap:FurnitureAndFixturesMember2021-03-310001066605us-gaap:FurnitureAndFixturesMember2020-12-310001066605us-gaap:ComputerEquipmentMember2021-03-310001066605us-gaap:ComputerEquipmentMember2020-12-310001066605hsii:OfficeLeasesMembersrt:MinimumMember2021-03-310001066605srt:MaximumMemberhsii:OfficeLeasesMember2021-03-310001066605hsii:OfficeLeaseMember2020-01-012020-03-310001066605srt:MinimumMemberhsii:EquipmentLeaseMember2021-03-310001066605srt:MaximumMemberhsii:EquipmentLeaseMember2021-03-31xbrli:pure0001066605us-gaap:CashMember2021-03-310001066605us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-03-310001066605us-gaap:FairValueInputsLevel1Member2021-03-310001066605us-gaap:CashMember2020-12-310001066605us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001066605us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001066605us-gaap:FairValueInputsLevel1Member2020-12-310001066605us-gaap:InvestmentsMemberus-gaap:FairValueInputsLevel1Member2021-03-310001066605us-gaap:FairValueInputsLevel2Member2021-03-310001066605us-gaap:OtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2021-03-310001066605us-gaap:FairValueInputsLevel2Memberhsii:AssetsDesignatedForRetirementAndPensionPlansMember2021-03-310001066605us-gaap:FairValueInputsLevel2Memberus-gaap:OtherCurrentLiabilitiesMember2021-03-310001066605us-gaap:FairValueInputsLevel2Memberus-gaap:OtherPensionPlansDefinedBenefitMember2021-03-310001066605us-gaap:OtherCurrentAssetsMember2021-03-310001066605hsii:AssetsDesignatedForRetirementAndPensionPlansMember2021-03-310001066605us-gaap:InvestmentsMember2021-03-310001066605us-gaap:OtherCurrentLiabilitiesMember2021-03-310001066605us-gaap:OtherPensionPlansDefinedBenefitMember2021-03-310001066605us-gaap:InvestmentsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001066605us-gaap:FairValueInputsLevel2Member2020-12-310001066605us-gaap:OtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2020-12-310001066605us-gaap:FairValueInputsLevel2Memberhsii:AssetsDesignatedForRetirementAndPensionPlansMember2020-12-310001066605us-gaap:FairValueInputsLevel2Memberus-gaap:OtherCurrentLiabilitiesMember2020-12-310001066605us-gaap:FairValueInputsLevel2Memberus-gaap:OtherPensionPlansDefinedBenefitMember2020-12-310001066605us-gaap:FairValueInputsLevel3Member2020-12-310001066605us-gaap:FairValueInputsLevel3Memberus-gaap:GoodwillMember2020-12-310001066605us-gaap:OtherCurrentAssetsMember2020-12-310001066605us-gaap:GoodwillMember2020-12-310001066605hsii:AssetsDesignatedForRetirementAndPensionPlansMember2020-12-310001066605us-gaap:OtherCurrentLiabilitiesMember2020-12-310001066605us-gaap:OtherPensionPlansDefinedBenefitMember2020-12-310001066605hsii:EuropeAndAsiaPacificMember2020-12-310001066605us-gaap:FairValueInputsLevel3Memberhsii:ContingentCompensationMember2020-12-310001066605us-gaap:FairValueInputsLevel3Memberhsii:ContingentCompensationMember2021-01-012021-03-310001066605us-gaap:FairValueInputsLevel3Memberhsii:ContingentCompensationMember2021-03-310001066605srt:AmericasMemberhsii:ExecutiveSearchMemberMember2021-03-310001066605srt:AmericasMemberhsii:ExecutiveSearchMemberMember2020-12-310001066605srt:EuropeMemberhsii:ExecutiveSearchMemberMember2020-12-310001066605hsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2020-12-310001066605srt:AmericasMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605srt:EuropeMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605hsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2021-01-012021-03-310001066605srt:EuropeMemberhsii:ExecutiveSearchMemberMember2021-03-310001066605hsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2021-03-310001066605hsii:ExecutiveSearchMemberMember2021-03-310001066605hsii:ExecutiveSearchMemberMember2020-12-310001066605us-gaap:CustomerRelationshipsMember2021-01-012021-03-310001066605us-gaap:CustomerRelationshipsMember2021-03-310001066605us-gaap:CustomerRelationshipsMember2020-12-310001066605us-gaap:TradeNamesMember2021-01-012021-03-310001066605us-gaap:TradeNamesMember2021-03-310001066605us-gaap:TradeNamesMember2020-12-3100010666052020-07-012020-09-3000010666052020-05-282020-05-280001066605hsii:LaborAndRelatedExpensesMember2021-01-012021-03-310001066605hsii:LaborAndRelatedExpensesMember2020-01-012020-03-310001066605us-gaap:RestrictedStockUnitsRSUMember2020-12-310001066605us-gaap:RestrictedStockUnitsRSUMember2021-03-310001066605srt:ExecutiveOfficerMemberus-gaap:PerformanceSharesMember2021-01-012021-03-310001066605srt:ExecutiveOfficerMembersrt:MinimumMemberus-gaap:PerformanceSharesMember2021-01-012021-03-310001066605srt:MaximumMembersrt:ExecutiveOfficerMemberus-gaap:PerformanceSharesMember2021-01-012021-03-310001066605us-gaap:PerformanceSharesMember2020-12-310001066605us-gaap:PerformanceSharesMember2020-03-310001066605us-gaap:PerformanceSharesMember2021-03-310001066605us-gaap:PhantomShareUnitsPSUsMember2020-12-310001066605us-gaap:PhantomShareUnitsPSUsMember2021-01-012021-03-310001066605us-gaap:PhantomShareUnitsPSUsMember2020-03-310001066605us-gaap:PhantomShareUnitsPSUsMember2021-03-310001066605us-gaap:EmployeeSeveranceMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605srt:EuropeMemberus-gaap:EmployeeSeveranceMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:EmployeeSeveranceMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2021-01-012021-03-310001066605hsii:HeidrickConsultingMemberus-gaap:EmployeeSeveranceMember2021-01-012021-03-310001066605us-gaap:CorporateNonSegmentMemberus-gaap:EmployeeSeveranceMember2021-01-012021-03-310001066605us-gaap:EmployeeSeveranceMember2021-01-012021-03-310001066605us-gaap:FacilityClosingMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:FacilityClosingMembersrt:EuropeMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:FacilityClosingMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2021-01-012021-03-310001066605us-gaap:FacilityClosingMemberhsii:HeidrickConsultingMember2021-01-012021-03-310001066605us-gaap:FacilityClosingMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001066605us-gaap:FacilityClosingMember2021-01-012021-03-310001066605us-gaap:OtherRestructuringMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605srt:EuropeMemberus-gaap:OtherRestructuringMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:OtherRestructuringMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2021-01-012021-03-310001066605hsii:HeidrickConsultingMemberus-gaap:OtherRestructuringMember2021-01-012021-03-310001066605us-gaap:CorporateNonSegmentMemberus-gaap:OtherRestructuringMember2021-01-012021-03-310001066605us-gaap:OtherRestructuringMember2021-01-012021-03-310001066605hsii:HeidrickConsultingMember2021-01-012021-03-310001066605us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001066605us-gaap:EmployeeSeveranceMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605srt:EuropeMemberus-gaap:EmployeeSeveranceMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605us-gaap:EmployeeSeveranceMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2019-09-302021-03-310001066605hsii:HeidrickConsultingMemberus-gaap:EmployeeSeveranceMember2019-09-302021-03-310001066605us-gaap:CorporateNonSegmentMemberus-gaap:EmployeeSeveranceMember2019-09-302021-03-310001066605us-gaap:EmployeeSeveranceMember2019-09-302021-03-310001066605us-gaap:FacilityClosingMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605us-gaap:FacilityClosingMembersrt:EuropeMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605us-gaap:FacilityClosingMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2019-09-302021-03-310001066605us-gaap:FacilityClosingMemberhsii:HeidrickConsultingMember2019-09-302021-03-310001066605us-gaap:FacilityClosingMemberus-gaap:CorporateNonSegmentMember2019-09-302021-03-310001066605us-gaap:FacilityClosingMember2019-09-302021-03-310001066605us-gaap:OtherRestructuringMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605srt:EuropeMemberus-gaap:OtherRestructuringMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605us-gaap:OtherRestructuringMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2019-09-302021-03-310001066605hsii:HeidrickConsultingMemberus-gaap:OtherRestructuringMember2019-09-302021-03-310001066605us-gaap:CorporateNonSegmentMemberus-gaap:OtherRestructuringMember2019-09-302021-03-310001066605us-gaap:OtherRestructuringMember2019-09-302021-03-310001066605srt:AmericasMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605srt:EuropeMemberhsii:ExecutiveSearchMemberMember2019-09-302021-03-310001066605hsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2019-09-302021-03-310001066605hsii:HeidrickConsultingMember2019-09-302021-03-310001066605us-gaap:CorporateNonSegmentMember2019-09-302021-03-3100010666052019-09-302021-03-310001066605srt:MinimumMember2021-03-310001066605srt:MaximumMember2021-03-310001066605us-gaap:EmployeeSeveranceMember2020-12-310001066605us-gaap:FacilityClosingMember2020-12-310001066605us-gaap:OtherRestructuringMember2020-12-310001066605us-gaap:EmployeeSeveranceMember2021-03-310001066605us-gaap:FacilityClosingMember2021-03-310001066605us-gaap:OtherRestructuringMember2021-03-310001066605us-gaap:EmployeeRelatedLiabilitiesCurrent2021-03-310001066605hsii:AccruedSalariesAndBenefits2021-03-310001066605us-gaap:EmployeeRelatedLiabilitiesCurrent2020-12-310001066605hsii:AccruedSalariesAndBenefits2020-12-310001066605us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310001066605us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310001066605us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-03-310001066605us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-03-310001066605us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310001066605us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310001066605us-gaap:OperatingSegmentsMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:OperatingSegmentsMembersrt:AmericasMemberhsii:ExecutiveSearchMemberMember2020-01-012020-03-310001066605us-gaap:OperatingSegmentsMembersrt:EuropeMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:OperatingSegmentsMembersrt:EuropeMemberhsii:ExecutiveSearchMemberMember2020-01-012020-03-310001066605us-gaap:OperatingSegmentsMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2021-01-012021-03-310001066605us-gaap:OperatingSegmentsMemberhsii:ExecutiveSearchMemberMembersrt:AsiaPacificMember2020-01-012020-03-310001066605us-gaap:OperatingSegmentsMemberhsii:ExecutiveSearchMemberMember2021-01-012021-03-310001066605us-gaap:OperatingSegmentsMemberhsii:ExecutiveSearchMemberMember2020-01-012020-03-310001066605hsii:HeidrickConsultingMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001066605hsii:HeidrickConsultingMemberus-gaap:OperatingSegmentsMember2020-01-012020-03-310001066605us-gaap:OperatingSegmentsMember2021-01-012021-03-310001066605us-gaap:OperatingSegmentsMember2020-01-012020-03-310001066605us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001066605us-gaap:CorporateNonSegmentMember2020-01-012020-03-310001066605srt:AmericasMember2021-01-012021-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021

OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 0-25837
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-2681268
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification Number)
233 South Wacker Drive-Suite 4900
Chicago, Illinois
60606-6303
(Address of Principal Executive Offices)

(312) 496-1200
(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange On Which Registered
Common Stock, $0.01 par valueHSIIThe NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer 
¨
  Accelerated filer 
Non-Accelerated filer 
¨
  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 26, 2021, there were 19,498,734 shares of the Company’s common stock outstanding.



HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
 
  PAGE
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 6.



PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
March 31,
2021
December 31,
2020
 (Unaudited) 
Current assets
Cash and cash equivalents$184,055 $316,473 
Marketable securities 19,999 
Accounts receivable, net of allowances of $6,624 and $6,557, respectively
128,419 88,123 
Prepaid expenses26,600 18,956 
Other current assets25,496 23,279 
Income taxes recoverable5,205 5,856 
Total current assets369,775 472,686 
Non-current assets
Property and equipment, net22,373 23,492 
Operating lease right-of-use assets85,318 92,671 
Assets designated for retirement and pension plans13,853 14,425 
Investments33,545 31,369 
Other non-current assets27,617 24,439 
Goodwill91,452 91,643 
Other intangible assets, net961 1,129 
Deferred income taxes35,712 35,958 
Total non-current assets310,831 315,126 
Total assets$680,606 $787,812 
Current liabilities
Accounts payable$10,149 $8,799 
Accrued salaries and benefits112,830 217,908 
Deferred revenue38,847 38,050 
Operating lease liabilities27,947 28,984 
Other current liabilities20,114 23,311 
Income taxes payable7,383 1,186 
Total current liabilities217,270 318,238 
Non-current liabilities
Accrued salaries and benefits44,301 56,925 
Retirement and pension plans54,826 53,496 
Operating lease liabilities81,536 86,816 
Other non-current liabilities4,103 4,735 
Total non-current liabilities184,766 201,972 
Total liabilities402,036 520,210 
Commitments and contingencies (Note 17)
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at March 31, 2021 and December 31, 2020
  
Common stock, $0.01 par value, 100,000,000 shares authorized, 19,585,777 shares issued, 19,497,365 and 19,359,586 shares outstanding at March 31, 2021 and December 31, 2020, respectively
196 196 
Treasury stock at cost, 88,412 and 226,191 shares at March 31, 2021 and December 31, 2020, respectively
(3,090)(8,041)
Additional paid in capital225,998 231,048 
Retained earnings52,742 40,982 
Accumulated other comprehensive income2,724 3,417 
Total stockholders’ equity278,570 267,602 
Total liabilities and stockholders’ equity$680,606 $787,812 

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
1



HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended
March 31,
 20212020
Revenue
Revenue before reimbursements (net revenue)$193,656 $171,481 
Reimbursements1,075 3,366 
Total revenue194,731 174,847 
Operating expenses
Salaries and benefits141,363 121,089 
General and administrative expenses28,824 32,240 
Restructuring charges3,861  
Reimbursed expenses1,075 3,366 
Total operating expenses175,123 156,695 
Operating income19,608 18,152 
Non-operating income (expense)
Interest, net82 679 
Other, net3,082 (4,435)
Net non-operating income (expense)3,164 (3,756)
Income before income taxes22,772 14,396 
Provision for income taxes7,940 5,730 
Net income14,832 8,666 
Other comprehensive loss, net of tax
Foreign currency translation adjustment(693)(3,716)
Net unrealized loss on available-for-sale investments (30)
Other comprehensive loss, net of tax(693)(3,746)
Comprehensive income$14,139 $4,920 
Weighted-average common shares outstanding
Basic19,387 19,192 
Diluted20,171 19,776 
Earnings per common share
Basic$0.77 $0.45 
Diluted$0.74 $0.44 
Cash dividends paid per share$0.15 $0.15 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
2



HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 
   Additional
Paid in
Capital
Retained EarningsAccumulated
Other
Comprehensive
Income
Total
Common StockTreasury Stock
SharesAmountSharesAmount
Balance at December 31, 202019,586 $196 226 $(8,041)$231,048 $40,982 $3,417 $267,602 
Net income— — — — — 14,832 — 14,832 
Other comprehensive loss, net of tax— — — — — — (693)(693)
Common and treasury stock transactions:
Stock-based compensation— — — — 2,991 — — 2,991 
Vesting of equity awards, net of tax withholdings— — (138)4,951 (8,041)— — (3,090)
Cash dividends declared ($0.15 per share)
— — — — — (2,905)— (2,905)
Dividend equivalents on restricted stock units— — — — — (167)— (167)
Balance at March 31, 202119,586 $196 88 $(3,090)$225,998 $52,742 $2,724 $278,570 

   Additional
Paid in
Capital
Retained EarningsAccumulated
Other
Comprehensive
Income
Total
Common StockTreasury Stock
SharesAmountSharesAmount
Balance at December 31, 201919,586 $196 420 $(14,795)$228,807 $91,083 $3,824 $309,115 
Net income— — — — — 8,666 — 8,666 
Adoption of accounting standards— — — — — (332)— (332)
Other comprehensive loss, net of tax— — — — — — (3,746)(3,746)
Common and treasury stock transactions:
Stock-based compensation— — — — 2,614 — — 2,614 
Vesting of equity awards, net of tax withholdings— — (109)3,838 (5,388)— — (1,550)
Cash dividends declared ($0.15 per share)
— — — — — (2,876)— (2,876)
Dividend equivalents on restricted stock units— — — — — (126)— (126)
Balance at March 31, 202019,586 $196 311 $(10,957)$226,033 11$96,415 $78 $311,765 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
3



HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 Three Months Ended
March 31,
 20212020
Cash flows - operating activities
Net income$14,832 $8,666 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization6,068 2,337 
Deferred income taxes(495)110 
Stock-based compensation expense2,991 2,614 
Gain on marketable securities(1)(111)
Loss on disposal of property and equipment21 1 
Changes in assets and liabilities:
Accounts receivable(41,209)(24,656)
Accounts payable1,365 1,897 
Accrued expenses(116,327)(147,265)
Restructuring accrual(2,902)(138)
Deferred revenue963 837 
Income taxes recoverable and payable, net6,819 4,082 
Retirement and pension plan assets and liabilities1,235 2,033 
Prepaid expenses(7,894)(6,566)
Other assets and liabilities, net(8,037)(9,441)
Net cash used in operating activities(142,571)(165,600)
Cash flows - investing activities
Capital expenditures(945)(1,753)
Purchases of marketable securities and investments(1,354)(2,125)
Proceeds from sales of marketable securities and investments20,153 61,395 
Net cash provided by investing activities17,854 57,517 
Cash flows - financing activities
Proceeds from line of credit 100,000 
Cash dividends paid(3,072)(3,002)
Payment of employee tax withholdings on equity transactions(3,090)(1,550)
Acquisition earnout payments (2,788)
Net cash (used in) provided by financing activities(6,162)92,660 
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash(1,539)(5,296)
Net decrease in cash, cash equivalents and restricted cash(132,418)(20,719)
Cash, cash equivalents and restricted cash at beginning of period316,489 271,719 
Cash, cash equivalents and restricted cash at end of period$184,071 $251,000 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4



HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All tables in thousands, except per share figures)
(Unaudited) 

1.    Basis of Presentation of Interim Financial Information

The accompanying unaudited Condensed Consolidated Financial Statements of Heidrick & Struggles International, Inc. and subsidiaries (the “Company”) have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Significant items subject to estimates and assumptions include revenue recognition, income taxes, interim effective tax rate and the assessment of goodwill, other intangible assets and long lived assets for impairment. Estimates are subject to a degree of uncertainty and actual results could differ from these estimates. In the opinion of management, all adjustments necessary to fairly present the financial position of the Company at March 31, 2021 and December 31, 2020, the results of operations for the three months ended March 31, 2021 and 2020 and its cash flows for the three months ended March 31, 2021 and 2020 have been included and are of a normal, recurring nature except as otherwise disclosed. These financial statements and notes are to be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 24, 2021.

2.    Summary of Significant Accounting Policies

A complete listing of the Company’s significant accounting policies is discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Revenue Recognition

See Note 3, Revenue.

Marketable Securities

The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months.

Restricted Cash

The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statement of Cash Flows as of March 31, 2021 and 2020, and December 31, 2020 and 2019:
March 31,December 31,
2021202020202019
Cash and cash equivalents$184,055 $251,000 $316,473 $271,719 
Restricted cash included within other non-current assets$16 $ $16 $ 
Total cash, cash equivalents and restricted cash$184,071 $251,000 $316,489 $271,719 

Earnings per Common Share

Basic earnings per common share is computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect.

5



The following table sets forth the computation of basic and diluted earnings per share:
Three Months Ended
March 31,
20212020
Net income$14,832 $8,666 
Weighted average shares outstanding:
Basic19,387 19,192 
Effect of dilutive securities:
Restricted stock units589 418 
Performance stock units195 166 
Diluted20,171 19,776 
Basic earnings per share$0.77 $0.45 
Diluted earnings per share$0.74 $0.44 
Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating Lease Right-of-Use Assets, Operating Lease Liabilities - Current and Operating Lease Liabilities - Non-Current in our Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately.

Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance is intended to provide temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact of this accounting guidance. The effect is not known or reasonably estimable at this time.

Recently Adopted Financial Accounting Standards

On January 1, 2021, the Company adopted ASU No. 2019-12, Simplifying the Accounting for Income Taxes. The guidance simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification ("ASC") 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The adoption had no impact on the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Cash Flows and Condensed Consolidated Statement of Changes in Stockholders' Equity in any period presented.


6



3.    Revenue

Executive Search

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed compensation is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred.

The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred.

Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance.  Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months.

The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in ASC 460 - Guarantees.

Heidrick Consulting

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of our consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of our consulting revenue is recognized over time utilizing both input and output methods. Contracts that contain coaching sessions, training sessions or the completion of assessments are recognized using the output method as each session or assessment is delivered to the client. Contracts that contain general consulting work are recognized using the input method utilizing a measure of progress that is based on time incurred on the project.
The Company enters into enterprise agreements with clients to provide a license for online access, via the Company's Culture Connect platform, to training and other proprietary material related to the Company's culture shaping programs. The consideration the Company expects to receive under the terms of an enterprise agreement is comprised of a single fixed fee. The enterprise agreements contain multiple performance obligations, the delivery of materials via Culture Connect and material rights related to options to renew enterprise agreements at a significant discount. The Company allocates the transaction price to the performance obligations in the contract on a stand-alone selling price basis. The stand-alone selling price for the initial term of the enterprise agreement is outlined in the contract and is equal to the price paid by the client for the agreement over the initial term of the contract. The stand-alone selling price for the options to renew, or material right, are not directly observable and must be estimated. This estimate is required to reflect the discount the client would obtain when exercising the option to renew, adjusted for the likelihood that the option will be exercised. The Company estimates the likelihood of renewal using a historical analysis of client renewals. Access to Culture Connect represents a right to access the Company’s intellectual
7



property that the client simultaneously receives and consumes as the Company performs under the agreement, and therefore the Company recognizes revenue over time. Given the continuous nature of this commitment, the Company utilizes straight-line ratable revenue recognition over the estimated subscription period as the Company's clients will receive and consume the benefits from Culture Connect equally throughout the contract period. Revenue related to client renewals of enterprise agreements is recognized over the term of the renewal, which is generally twelve months. Enterprise agreements do not comprise a significant portion of the Company's revenue.

Contract Balances

Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Other Current Assets on the Condensed Consolidated Balance Sheets.

Unbilled receivables: Unbilled revenue represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed executive search retainers and Heidrick Consulting fees.

Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts.

Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized.

The following table outlines the changes in the contract asset and liability balances from December 31, 2020 to March 31, 2021:
March 31,
2021
December 31,
2020
Change
Contract assets
Unbilled receivables, net$11,806 $9,907 $1,899 
Contract assets9,826 9,745 81 
Total contract assets
21,632 19,652 1,980 
Contract liabilities
Deferred revenue$38,847 $38,050 $797 

During the three months ended March 31, 2021, the Company recognized revenue of $26.3 million that was included in the contract liabilities balance at the beginning of the period. The amount of revenue recognized during the three months ended March 31, 2021, from performance obligations partially satisfied in previous periods as a result of changes in the estimates of variable consideration was $13.6 million.

Each of the Company's contracts has an expected duration of one year or less. Accordingly, the Company has elected to utilize the available practical expedient related to the disclosure of the transaction price allocated to the remaining performance obligations under its contracts. The Company has also elected the available practical expedients related to adjusting for the effects of a significant financing component and the capitalization of contract acquisition costs. The Company charges and collects from its clients sales tax and value added taxes as required by certain jurisdictions. The Company has made an accounting policy election to exclude these items from the transaction price in its contracts.

4.    Credit Losses

The Company is exposed to credit losses primarily through the provision of its executive search and consulting services. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The
8



Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted.

The activity in the allowance for credit losses on the Company's trade receivables is as follows:
Balance at December 31, 2020$6,557 
Provision for credit losses945 
Write-offs(839)
Foreign currency translation(39)
Balance at March 31, 2021$6,624 

The fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, are as follows:
Less Than 12 MonthsBalance Sheet Classification
Balance at December 31, 2020Fair ValueUnrealized LossCash and Cash EquivalentsMarketable Securities
U.S. Treasury securities$31,997 $1 $31,997 $ 

There were no available for sale debt securities in a loss position at March 31, 2021.

5.    Property and Equipment, net

The components of the Company’s property and equipment are as follows:
March 31,
2021
December 31,
2020
Leasehold improvements$40,304 $40,320 
Office furniture, fixtures and equipment14,580 14,816 
Computer equipment and software25,914 25,544 
Property and equipment, gross80,798 80,680 
Accumulated depreciation(58,425)(57,188)
Property and equipment, net$22,373 $23,492 

Depreciation expense for the three months ended March 31, 2021 and 2020 was $1.8 million and $2.1 million, respectively.

6.    Leases

The Company's lease portfolio is comprised of operating leases for office space and equipment. The majority of the Company's leases include both lease and non-lease components, which the Company accounts for differently depending on the underlying class of asset. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. Generally, the renewal and termination options are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in the lease term.

As most of the Company's leases do not provide an implicit interest rate, the Company utilizes an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company has a centrally managed treasury function and therefore, a portfolio approach is applied in determining the incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a fully collateralized basis over a similar term in an amount equal to the total lease payments in a similar economic environment.

Office leases have remaining lease terms that range from less than one year to 12.3 years, some of which also include
9



options to extend or terminate the lease. Most office leases contain both fixed and variable lease payments. Variable lease costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to not separate lease and non-lease components for office leases.

As part of the Company's restructuring plan, a lease component related to one of the Company's offices was abandoned and the useful life of the associated right-of-use asset was shortened to correspond with the cease-use date. As a result of the change in the useful life, approximately $4.0 million of right-of-use asset amortization was accelerated and recorded in Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income and Depreciation and amortization in the Condensed Consolidated Statements of Cash Flows during the three months ended March 31, 2021.

Equipment leases, which are comprised of vehicle and office equipment leases, have remaining terms that range from less than one year to 4.8 years, some of which also include options to extend or terminate the lease. The Company's equipment leases do not contain variable lease payments. The Company separates the lease and non-lease components for its equipment leases. Equipment leases do not comprise a significant portion of the Company's lease portfolio.

Lease cost components included within General and Administrative Expenses in our Condensed Consolidated Statements of Comprehensive Income were as follows:
Three Months Ended
March 31,
20212020
Operating lease cost$4,867 $6,261 
Variable lease cost1,228 2,073 
Total lease cost$6,095 $8,334 

Supplemental cash flow information related to the Company's operating leases is as follows for the three months ended March 31:
20212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$7,566 $7,812 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$791 $1,641 

The weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, is as follows:
20212020
Weighted Average Remaining Lease Term
Operating leases5.9 years4.6 years
Weighted Average Discount Rate
Operating leases3.44 %3.84 %

The future maturities of the Company's operating lease liabilities as of March 31, 2021, for the years ended December 31 is as follows:
Operating Lease Maturity
2021$20,785 
202226,007 
202324,047 
202414,109 
20256,700 
Thereafter30,205 
Total lease payments121,853 
Less: Interest(12,370)
Present value of lease liabilities$109,483 

10



7.    Financial Instruments and Fair Value

Cash, Cash Equivalents and Marketable Securities

The Company's investments in marketable debt securities, which consist of U.S. Treasury bills, are classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets until realized.

The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows:
Cash and Cash Equivalents
Balance at March 31, 2021
Cash$161,049 
Level 1(1):
Money market funds23,006 
Total Level 123,006 
Total$184,055 

Fair ValueBalance Sheet Classification
Amortized CostUnrealized GainsUnrealized LossesFair ValueCash and Cash EquivalentsMarketable Securities
Balance at December 31, 2020
Cash$230,490 $— 
Level 1(1):
Money market funds53,986 — 
U.S. Treasury securities51,996 1 (1)51,996 31,997 19,999 
Total Level 151,996 1 (1)51,996 85,983 19,999 
Total$51,996 $1 $(1)$51,996 $316,473 $19,999 

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.
Investments, Assets Designated for Retirement and Pension Plans and Associated Liabilities

The Company has a U.S. non-qualified deferred compensation plan that consists primarily of U.S. marketable securities and mutual funds. The aggregate cost basis for these investments was $20.8 million and $19.5 million as of March 31, 2021 and December 31, 2020, respectively.

The Company also maintains a pension plan for certain current and former employees in Germany. The pensions are individually fixed Euro amounts that vary depending on the function and the eligible years of service of the employee. The Company’s investment strategy is to support its pension obligations through reinsurance contracts. The BaFin—German Federal Financial Supervisory Authority—supervises the insurance companies and the reinsurance contracts. The BaFin requires each reinsurance contract to guarantee a fixed minimum return. The Company’s pension benefits are fully reinsured by group insurance contracts with ERGO Lebensversicherung AG, and the group insurance contracts are measured in accordance with BaFin guidelines (including mortality tables and discount rates) which are considered Level 2 inputs.

11



The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value:
Balance Sheet Classification
Fair ValueOther Current AssetsAssets Designated for Retirement and Pension PlansInvestmentsOther Current LiabilitiesRetirement and Pension Plans
Balance at March 31, 2021
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan$33,545 $— $— $33,545 $— $— 
Level 2(2):
Retirement and pension plan assets15,229 1,377 13,853 — — — 
Pension benefit obligation(21,463)— — — (1,377)(20,087)
Total Level 2(6,234)1,377 13,853 — (1,377)(20,087)
Total$27,311 $1,377 $13,853 $33,545 $(1,377)$(20,087)

Balance Sheet Classification
Fair ValueOther Current AssetsGoodwillAssets Designated for Retirement and Pension PlansInvestmentsOther Current LiabilitiesRetirement and Pension Plans
Balance at December 31, 2020
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan$31,369 $— $— $— $31,369 $— $— 
Level 2(2):
Retirement and pension plan assets15,859 1,434 — 14,425 — — — 
Pension benefit obligation(22,351)— — — — (1,434)(20,917)
Total Level 2(6,492)1,434 — 14,425 — (1,434)(20,917)
Measured on a non-recurring basis:
Level 3(3)(4):
Goodwill91,643 91,643 
Total$116,520 $1,434 $91,643 $14,425 $31,369 $(1,434)$(20,917)

(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.
(3)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.
12



(4)In accordance with Subtopic 350-20, goodwill with a carrying value of $33.0 million was written down to its implied fair value of zero during the three months ended June 30, 2020, resulting in the revised total goodwill of $91.6 million and an impairment charge of $33.0 million in earnings.

Contingent Consideration

The former owners of the Company's prior year acquisitions are eligible to receive additional cash compensation based on the attainment of certain operating metrics in the periods subsequent to acquisition. Contingent compensation is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of contingent consideration using discounted cash flow models.

The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the three months ended March 31, 2021:
Contingent Compensation
Balance at December 31, 2020$(2,390)
Compensation expense(454)
Foreign currency translation201 
Balance at March 31, 2021$(2,643)

Contingent compensation accruals are recorded within Other non-current liabilities in the Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020.


8.    Goodwill and Other Intangible Assets

Goodwill

The Company's goodwill by segment is as follows:
March 31,
2021
December 31,
2020
Executive Search
Americas$91,452 $91,643 
Total goodwill$91,452 $91,643 

Changes in the carrying amount of goodwill by segment for the three months ended March 31, 2021, are as follows:
Executive Search
AmericasEuropeAsia PacificTotal
Goodwill$91,643 $24,475 $8,495 $124,613 
Accumulated impairment losses (24,475)(8,495)(32,970)
Balance at December 31, 202091,643   91,643 
Foreign currency translation(191)  (191)
Balance at March 31, 2021$91,452 $ $ $91,452 
13



Other Intangible Assets, net

The Company’s other intangible assets, net by segment, are as follows:
March 31,
2021
December 31,
2020
Executive Search
Americas$178 $225 
Europe735 852 
Asia Pacific48 52 
Total other intangible assets, net$961 $1,129 

The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows:
 Weighted
Average
Life (Years)
March 31, 2021December 31, 2020
 Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Client relationships6.6$16,536 $(15,664)$872 $16,600 $(15,587)$1,013 
Trade name5.0258 (169)89 280 (164)116 
Total intangible assets6.5$16,794 $(15,833)$961 $16,880 $(15,751)$1,129 

Intangible asset amortization expense for each of the three months ended March 31, 2021 and 2020 was $0.2 million.
The Company's estimated future amortization expense related to intangible assets as of March 31, 2021, for the years ended December 31 is as follows:
2021$349 
2022309 
2023183 
202473 
202547 
Total$961 

9.    Other Current Assets

The components of other current assets are as follows:
March 31,
2021
December 31,
2020
Contract assets$21,632 $19,652 
Other3,864 3,627 
Total other current assets$