XML 29 R16.htm IDEA: XBRL DOCUMENT v3.24.3
Goodwill and Other Intangible Assets
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
Goodwill

The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows:
September 30,
2024		December 31,
2023
Executive Search
Americas$91,323 $91,740 
Europe1,463 1,494 
Total Executive Search92,786 93,234 
On-Demand Talent108,838 109,018 
Heidrick Consulting7,246 7,246 
Goodwill, gross208,870 209,498 
Accumulated impairment(23,470)(7,246)
Total goodwill$185,400 $202,252 

Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the nine months ended September 30, 2024, are as follows:
Executive SearchOn-Demand TalentHeidrick Consulting
AmericasEuropeTotal
Goodwill$91,740 $1,494 $109,018 $7,246 $209,498 
Accumulated impairment losses— — — (7,246)(7,246)
Balance at December 31, 2023
91,740 1,494 109,018 — 202,252 
Impairment— (1,463)(14,761)— (16,224)
Foreign currency translation(417)(31)(180)— (628)
Goodwill91,323 1,463 108,838 7,246 208,870 
Accumulated impairment losses— (1,463)(14,761)(7,246)(23,470)
Balance at September 30, 2024
$91,323 $— $94,077 $— $185,400 
During the three months ended June 30, 2024, as a result of the Company's mid-year forecasting process, it was determined that a reduction in the On-Demand Talent reporting unit forecast was required. Due to the reduction in the forecasted results for the reporting unit, in addition to the 6% passing margin in the most recent impairment analysis conducted as of October 31, 2023, the Company determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2024.

During the three months ended June 30, 2023, the Company acquired businessfourzero and recorded approximately $7.1 million of goodwill in the Heidrick Consulting reporting unit. Due to the inclusion of goodwill in a reporting unit with a pre-existing fair value shortfall, the Company evaluated the recent and anticipated future financial performance of the Heidrick Consulting reporting unit and determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2023.
Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions to evaluate the impact of operating and macroeconomic changes on each reporting unit. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of each of its reporting units. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) working capital investments; (4) macroeconomic conditions; and (5) other factors. As part of the goodwill impairment evaluation, the Company performed a reconciliation of its market capitalization to the aggregated estimated fair value of all reporting units, including consideration of a control premium.

Based on the results of the 2024 impairment evaluation, the Company determined that the goodwill within the On-Demand Talent and Europe reporting units were impaired, which resulted in impairment charges of $14.8 million and $1.5 million, respectively, during the three months ended June 30, 2024. Based on the results of the 2023 impairment evaluation, the Company determined that the goodwill within the Heidrick Consulting reporting unit was impaired, which resulted in an impairment charge of $7.2 million during the three months ended June 30, 2023. The impairment charges are recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024, and 2023, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024, and 2023. The impairments were non-cash in nature and they did not affect the Company's current liquidity, cash flows, borrowing capability or operations; nor did they impact the debt covenants under the Company's credit agreement.

Other Intangible Assets, net

The Company’s other intangible assets, net by segment, are as follows:
September 30,
2024		December 31,
2023
Executive Search
Americas$7 $22 
Europe54 95 
Total Executive Search61 117 
On-Demand Talent12,789 17,689 
Heidrick Consulting2,260 3,036 
Total other intangible assets, net$15,110 $20,842 
The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows:
 Weighted
Average
Life (Years)		September 30, 2024December 31, 2023
 Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Client relationships10.3$26,637 $(15,153)$11,484 $26,195 $(11,443)$14,752 
Trade name3.05,083 (3,932)1,151 5,067 (3,069)1,998 
Software3.08,678 (6,203)2,475 8,629 (4,537)4,092 
Total intangible assets8.6$40,398 $(25,288)$15,110 $39,891 $(19,049)$20,842 

Intangible asset amortization expense for the three months ended September 30, 2024, and 2023, was $2.0 million and $2.4 million, respectively. Intangible asset amortization expense for the nine months ended September 30, 2024, and 2023, was $6.2 million and $6.9 million, respectively.

The Company's estimated future amortization expense related to intangible assets as of September 30, 2024, for the following years ended December 31, is as follows:
2024$1,877 
20256,051 
20262,561 
20271,555 
2028909 
Thereafter2,157 
Total$15,110