Good afternoon. This is Heidrick & Struggles’ Fourth Quarter and 2018 Quarterly Conference Call. This call is being recorded. It may not be reproduced or retransmitted without the company’s consent. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be provided at that time.

Now I will turn the call over to Julie Creed, Vice President of Investor Relations and Real Estate. Please go ahead..

Good afternoon, everyone, and thank you for participating in Heidrick & Struggles Fourth quarter and 2018 conference call. Joining me on today’s call is our President and CEO, Krishnan Rajagopalan; and our Chief Financial Officer, Mark Harris.

We posted our third quarter slides on the IR homepage of our website at heidrick.com, and we encourage you to print them for additional context, but we won’t be referring to specific page numbers during our opening comments. In our opening remarks and in our quarterly slides, we are referring to adjusted EBITDA and adjusted EBITDA margin.

Specific to 2017 results we'll also speak to adjusted operating income, adjusted operating margin, adjusted net income and adjusted EPS. 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 in the last schedule of our press release and in our supporting slides. Also, in our remarks, we’ll be making forward-looking statements and ask that you please refer to the Safe Harbor language contained in our news release and on Slide 1 of our presentation.

And Krishnan, now I’ll turn the call over to you..

Julie, thank you. Good afternoon everyone, and thank you for joining our call. On behalf of our employees around the world, I'm pleased to report Heidrick & Struggles' 2018 fourth quarter and annual results. It was a year in which we achieved a number of company records.

We were front and center on the most relevant leadership issues including succession planning, culture, diversity and inclusion and data privacy. We made great progress on our transformational journey to enhance our data-driven, tech enabled solutions and service experience. First, let me share some of the annual financial highlights of 2018.

Net revenue was a company record in our 65-year history, $716 million, up 15% compared to last year. This was the sixth year in a row of year-over-year revenue growth. This growth was driven by our Executive Search business for which net revenue of $653 million increased 18% compared to 2017.

Every region and every practice group contributed to our growth in Executive Search. More than 5000 confirmed searches, productivity of nearly $1.9 million per consultant and average revenue per search of more than $127,000 were also key to revenue growth.

2018 was a transformational year for Heidrick Consulting following the integration of leadership consulting and culture shaping. We are now going to our clients with a single integrated line of advisory services and are focused on growth.

We're seeing a meaningful increase in the number of integrated search and consulting assignments and this is reflected in a higher quality of revenue. Turning back to our consolidated results, we reduce general and administrative expenses to under 20% of net revenue. We increased operating income to $68.9 million.

We achieved operating margin of 9.6% and delivered diluted earnings per share of $2.52, all of these the best in 11 years. Finally, reflecting our strong cash position and confidence in the future, we are increasing our quarterly cash dividend to $0.15 per share, an increase of more than 15%.

Key to having achieved these financial results was our steadfast focus on the four priorities for our business that we communicated last year.

To increase the scale and impact of our two businesses, to increase cross enterprise collaborations, to drive a premium data-driven tech enabled service experience for our clients and to maintain a focus on streamlining our cost structure.

Some examples of these initiatives were, we continued to increase the collaboration between our Executive Search and Heidrick Consulting businesses driving new business opportunities through our strategic accounts program and numerous cross training sessions.

We establish a larger, broader presence in the Nordic region through an acquisition in Denmark and we expanded our footprint with a new office in Dublin, Ireland.

We trained more than 900 employees on the Heidrick Way, our platform for consistently and more effectively assessing candidates, capturing data, and communicating with our search clients globally.

More than 4000 searches were executed via Heidrick Connect, our proprietary client portal for sharing and delivering our data and insights to clients and adoption continues to increase.

We were the first executive search firm to publicly committed to diversity in our Board of Director searches recognizing that diverse leadership is a business imperative.

We launched two new practice areas, the first the disruptive innovators team supports fast growing emerging companies with their leadership strategies and talent needs and the second, artificial intelligence is helping our clients identify executives who can drive enterprise wide transformation through AI and machine learning solutions.

We are living our values, especially to win as one firm in achieving our strategic, operational and financial goals. I'm excited about our progress and our future potential. I'm going to turn the call over to Mark to further discuss the financial results, then I'll finish by discussing some of our key growth initiatives in 2019.

Mark?.

Thank you, Krishnan. Good afternoon to everyone on the call and thank you for joining us today. Krishnan hit on the annual highlights of 2018, so I'll focus on the fourth quarter results. Revenue in the fourth quarter was $185.3 million, an increase of almost $16 million or 9.4% year-over-year.

This was higher than our guidance as a result of strong uptick revenue in Executive Search, which is difficult to forecast due to the variability of the market.

Irrespective Executive Search finished the quarter up $19.6 million or 13.2% year-over-year driven by growth in the Americas region of 20.2% as a result of higher confirmations, average retainers, and upticks. Without the impact of strong performance of upticks we would have been at the high-end of our guidance.

Heidrick Consulting revenue declined $3.7 million or 18% in the fourth quarter; however, 1.1 million of that decline was related to the adoption of ASC 606 which impacted our revenue recognition methodology for enterprise license agreements. Enterprise license agreements are now recognized over five years compared to one year in previous years.

However, when looking at this annually, Heidrick Consulting was impacted by ASC 606 x $3.8 million. Thus revenue annually on a pro forma basis was only marginally down 4% year-on-year.

Given we have discussed numerous times that 2018 was going to be a pivot year for the business, we were pleased with their performance in 2018 and look forward to their growth strategy in 2019.

Salaries and employee benefits increased by $8.3 million or 6.6% from 2017's fourth quarter, $7.4 million of the increase was related to fixed compensation primarily related to higher costs for consultant talent as we continue to invest into our future.

The other $900,000 of the increase was related to variable compensation associated with the strong performance in search. For the fifth consecutive quarter, general and administration expenses declined year-over-year. G&A was $35.3 million down 1.6% or approximately $600,000.

Much of this decline was the result of lowering our external service costs, travel and entertainment costs, and office occupancy costs. G&A as a percentage of revenue fell to 19% in the fourth quarter of 2018 down from the 21.2% in the same quarter last year.

It is worth noting that we will have a global consultant meeting in the second quarter of 2019 in lieu of last year's regional meetings and practice meeting. As such, we only expect incremental G&A expense of approximately $500,000 for the year pertaining to these meetings. Now turning to operating income.

Operating income in the fourth quarter of 2018 was $16.7 million and operating margin was 9% which improved significantly from last year's adjusted fourth quarter 2017 operating income of $8.5 million and operating margin of 5%. We're very proud of this achievement enabled in part through the increasing adoption of our technology platform.

Finally, net income in 2018's fourth quarter at $11.2 million and diluted earnings per share of $0.58 were also far improved to last year's adjusted fourth quarter net income of $2.8 million and diluted earnings per share of $0.15.

I know I commented to just focus on the fourth quarter, but I really want to highlight what our shareholders achieved this year. Net income for the full year was $49.3 million and diluted earnings per share of $2.52 were the highest in 11 years.

This growth with nearly 2.5 times over last year's adjusted earnings per share of $1.09 and demonstrates what we can achieve. Now turning to our balance sheet, we entered the fourth quarter and 2018 with cash and cash equivalents of $279.9 million compared to $207.5 million at the end of 2017, an increase of 35%.

The increase in cash balance compared to that of 2017 reflects stronger operating cash flows and lower capital expenditures, partially offset by higher bonus payments paid in 2018, payments for severance related to late 2017 restructuring and our investment in Denmark.

As most of you know, our cash position billed throughout the year as we accrue for bonuses. Earlier this quarter we paid approximately $14 million in compensation related to the portion of consultant bonuses that are deferred each year.

And in March and April this year we will pay out approximately $202 million in variable compensation related to last year's performance. As a result of strong operating cash flows, we don't anticipate using any leverage in the first quarter pertaining to our working capital needs, different from the past two years.

We would expect free cash flow to increase in 2019 assuming approved operating performance, lower capital expenditures, and absent acquisitions. Based on the above and our commitment to our shareholders, Heidrick & Struggles' capital allocation strategy will always be evolving.

Thus we will always balance our ability to adequately invest for future growth and return excess cash to our shareholders. This strategy has led us to increase our dividend by 15% to $0.15 this quarter from our long time run rate of $0.13 a quarter. Now let me provide you the outlook in the first quarter.

As a reminder, our guidance is based on the seasonality of search confirmation trends in the fourth and first quarters, the search backlog at the end of the fourth quarter, our expectations for Heidrick Consulting assignments, anticipated confirms and fees, and the economic climate.

With this, we expect the 2019 first quarter net revenue will be in the range of $165 million to $175 million, compared to $160.1 million in last year's first quarter. In summary, we delivered another outstanding quarter and finished the year with many historical achievements.

We intend to maintain the same discipline we showed in 2018 with regards to balancing investment for future growth, continued focus on cost reduction initiatives and deliver shareholder value. With that, I'll turn the call back over to Krishnan..

Mark, thank you. We've delivered another great quarter results and we continue to see a robust market across all our regions. We experienced the usual seasonal trends around the holidays with regard to search confirmations which you can see in Slide 16 January was the strongest it's been in four years. We are continuing to see a solid market.

Our four priorities serviced well in 2018. They will continue to drive our initiatives in 2019. We already increased the scale and impact of our two businesses, increased cross enterprise collaboration, drive a premium service experience for our clients and maintain a focus on cost containment initiatives to further improve our cost structure.

We will continue to opportunistically hire new consultants and strategically drive expansion into markets and practices where we see good opportunities for growth. Simultaneously, we will continue to focus on internal training and development programs for our consultant support teams.

Effective January 1, we promoted 12 women and 12 men in total 24 individuals to principal consultants as part of our annual consultant promotions process, almost double the number we promoted last year and a huge testament to our internal development programs. We will announce our partner promotions in March. What a fantastic start to 2019.

In Heidrick Consulting we continue to build the business that we launched last year and we expect momentum to continue. Our backlog going into 2019 is higher than it was going into 2018.

As a result of the training and development initiatives in 2018, we have a much stronger collaborative relationship between search and consulting and are bringing greater value to our clients seeking holistic leadership advisory services.

Our 2018 hires are starting to hit their stride and we have increased our hiring plan for partners and principals in 2019. Recent investments in thought leadership and solutions in the areas of digital acceleration, diversity and inclusion, and organizational simplicity are in strong demand in the market.

Earlier this month, we launched a new book, Goliath's revenge, which looks at how established companies are battling back in age of disruption and how they can attract the right talent and build a culture of continuous innovation and our digital acceleration offerings which are aligned with our accelerating performance framework are helping business leaders understand and manage the leadership, talent, culture and human capital implications that come with ongoing digital disruption.

These are just a few of the drivers of the growth we are aiming for in 2019. To increase the impact of both our businesses, we need to continuously expand our value proposition and strengthen our overall positioning of the trusted leadership advisor who can provide a wide range of executive talent and human capital solutions.

For example, on January 15 we announced an exclusive agreement with a premier company called Business Talent Group to offer high impact, on demand executive talent solutions. BTG is absolutely the best at what they do.

This is yet another way we can help our clients and candidates we place be more successful by providing seamless access to BTG's high end on-demand talent solutions that can help our clients and placements fulfill their most pressing business needs.

I am highly energized about our priority to drive a premium service experience for our clients, one that differentiates us from our competitors. This focus has led us on an exciting transformation journey at Heidrick.

Last year we finished rolling out our new data-driven tech enabled assessment tools and platforms to better serve our clients and help them accelerate their performance. The response internally and externally has been incredibly positive.

In 2019 you will see us capitalize on our momentum because the results are getting better and more valuable with time. It is improving the efficiency of search and providing us with deeper assessment of candidates allowing us to capture formidable collection of leadership data points.

Again, I want to thank our employees around the globe for their hard work this year. I'd also like to thank our Board of Directors for their continued support and guidance and welcome Stacey Rauch, who joined the board at the end of January. We are looking forward to continuing momentum in 2019 and are excited about the future.

Now we'll be happy to take your questions..

Thank you. [Operator Instructions] Our first question comes from Kevin Steinke with Barrington Research..

Good afternoon. So obviously you had a really nice year in 2018 in terms of driving margin expansion and streamlining your cost base.

As we look forward to 2019, are there still continued opportunities to streamline the cost base and drive operating margin expansion assuming you get a reasonable level of top line growth going forward?.

Sure Kevin, it's Mark Harris. I'll take the first stab at it and the answer is yes. And I think we have to look at it in kind of two different lenses, the first on the search side and as we look at expanding Europe, as we look at expanding into Asia Pacific and we grab scale within those markets we would expect their respective margins also to expand.

The second one would be over on Heidrick Consulting where again in 2018 we made the pivot and 2019 we're really focused on their growth strategy organically for the most part potentially and organically and see again some expansion on the margin on that side of it.

What those will lead you to overall would be continued expansion from an enterprise point of view.

I think if I was addressing the question as it pertains to G&A, I think we're doing a heck of a job that's up 20%, I don't think there's a lot more to do on that side of the fence, but as we continue to enable our technology improvements in search and consulting, we think we will also derive some margin from that as well..

Kevin, it is Krishnan here. Let me just add, look I think that we are still continuing to implement our technology and see the advantages of that on the search platforms, so we expect to get some additional benefits through that as well. So the journey is midway through and we will continue to be driving this..

Okay helpful. Do you anticipate any meaningful investments in 2019? I know you referenced increasing your hiring plan for this year.

I mean could you give us a sense of the scale of that increase and perhaps touch on any other investments you have planned for this year?.

Sure, yes Kevin, so just from a headcount perspective on the search side, I think that look we've got a great internal development program and we're going to be continuing to promote people. As I said we will be promoting a new class of partners here in March. We will be doing some hiring.

It will be probably less than the levels you've seen historically, but we'll continue that hiring and to search in strategic markets and areas, but I don't think that's going to be an extraordinary level.

We need to continue to grow Heidrick Consulting, so we'll be investing in hiring partners and principals into that platform while we continue to develop our internal talent pool as well which is also terrific in that area.

So you'll see some more aggressive growth in the Heidrick Consulting and you'll probably see modest growth on the search platform. In addition to that, we'll continue to invest in becoming a more data-driven business before we see with our H Labs and we will be putting a little bit of money towards driving that agenda in [indiscernible] as well..

Okay, great. And following up on Heidrick Consulting, obviously you had the headwind from ASC 606 in 2018, Mark you mentioned potentially driving some margin expansion in Heidrick Consulting in 2019.

Do you think the business is at a point now where you're pretty much done with their realignment and integration where in the pipeline is solid enough that you know maybe you can start to generate some organic growth in 2019 in Heidrick Consulting?.

Yes Kevin, it's Krishnan. Let me take that and then Mark you can jump in as well. Look, I think that's exactly where we are. 2018 was a pivot year for Heidrick Consulting, we created one team, this is all done. We've now got some new offerings as well and we're poised and ready to grow this business. The culture of business is back. It's performing well.

That next generation of talent is doing great and we've got a lot of good talent here that this business can grow. Our backlog is better as we mentioned in the previous year. Our total contract value that we pulled in, in 2018 was larger 2017 for the business. Our new partners we hired are beginning to hit their stride.

So we're optimistic and think we're at the point to grow this business.

Mark do you want add…?.

No, not much more to add to it..

Got it, okay.

Just a housekeeping question here and it seems did you change the presentation of the consultant headcount for Heidrick Consulting? You talked about a number in the 60s, previously you've kind of talked I think partners only, what is your headcount?.

Kevin, we did change that and I think it was an important change we wanted to make.

As you know, we used to report it that way and what it really demonstrate is, I think when you just showed the partner level, the bench that we have which is also a critical component which is the principal side of it, we've really felt like as search we do in search where we show both partners and principals all the consultants.

We want to do the same thing on the consultancy side. So what this tells you when see from 64 to 66 it continues to grow which is where earlier where Krishnan was speaking to in terms of the pivot and what we are trying to do.

I think not only do we have a strong quality of partners on the partner range but we also have very strong quality principals as well and we're going to continue that growth plan..

Okay, good.

I guess lastly from me, there's been some signs of economic weakness in Europe, what are you hearing from your clients there, any signs that things might be slowing it all in Europe or anywhere else globally in terms of the economic outlook and its impact on your business?.

Yes Kevin, so I think we hear those conversations, but we haven’t quite seen anything materialize is what I would tell you. Clearly in Europe we've seen little less volume in Europe –but in the UK, but it's been more than offset by France, Germany and the rest. So as we actually look at the data that's what we're seeing.

We read the same headlines and probably see some of the same conversations, hear some of the same conversations that you're having, but our data is pretty solid on this right now..

Okay, got it, thank you very much..

Thank you..

Thank you. Our next question comes from Tobey Sommer with SunTrust..

I had one question about the [indiscernible] diversification of quality and of the revenue what metrics would you use to kind of describe that quality improvement? Thanks..

Yes, there was a little bit of echo on that line.

I think your question was if I can reframe it here it was around the comment I made on quality of revenue, is that right?.

That's exactly right, sorry for that..

Yes, and then, no problem.

Yes, so when I look at the quality of the revenue, we think about it in terms of the brands that we're working with as well as how many of them are long-term search clients now that we are beginning to work collaboratively with across search and across Heidrick Consulting, and that's what gives us optimism there is that we're seeing a nice uptick in that.

We're seeing a nice uptick in the opportunities that are coming up as a result of that. So when we think about how we're driving that revenue it's going in the right side. And underneath that, those clients are strong Heidrick clients. So that's what we mean by the quality improvement [ph]..

Okay, sticking with the top-line, do you think that the company as you look at your guidance for the first quarter, are you growing in line with your end markets or how would you describe your trends in market share, understanding, I guess at 2018 it looks like you outgrew the market on an average basis?.

I think that's absolutely right.

So I think what we're able to look at from the data that we get which is similar to yours is not only are we seeing a very good growth from the team in terms of just general revenue, but we're also seeing the fact that we're, we made the comment getting more than what our share was in the past and hopefully getting some increasing market share as well.

What we do know is, the engagements that we're winning and the work that we're doing we're staying at the top which is very important to us. We're able to grow the revenue by staying there and also I think continuing to build on our outstanding brand and reputation with our clients in terms of delivering..

With respect to the sources of market share, can you just clarify whether or not they are larger players or [indiscernible]?.

Sorry, this is Julie. One was the, obviously the public press releases from [indiscernible] and then is the information that we see from ASC..

Okay, what's the trends then entering this year on upticks, because a couple of quarters ago those were going very strong and just curious what's the more recent trend has been?.

Well, we reported in Q4 upticks were actually very strong, stronger than we anticipated and drove us a bit over our guidance that we were looking at. And it really is kind of in this market where you have such low unemployment and the fact that you have to pay people a lot more to leave their current positions to kind of come across into new roles.

It really does become more of an education of the market and that is in terms of what the market really wants or thinks they want to pay for the role versus the reality of what they need to pay for the role and that's really generating the upticks.

Well we have seen in terms of our average retainers et cetera, as those have been moving up quite strongly for us and we're believing that the market is actually internalizing appropriately in terms of what the cost.

For example acquiring a CFO in the market versus maybe what it cost at the beginning of the year and that's great because that really limits down the uptick and then of course you have those that are still believing that they're on the same cycle so to speak and that's really where the uptick revenues kind of come from..

The uptick even though is, you know the one comment I do want to make Tobey is even though they could be chunky, so Q2 and you know Q4 both were a little bit unexpected Qs 1 and 3. The actual annual amount is pretty consistent year-over-year between ‘17 and ‘18 between 13% and 15% in terms of our total revenue.

So again we don't see it when you look at it from a trailing twelve-month basis as much as you see it quarter-to-quarter..

Okay, we've seen only talk about in this space for a long time and have had trouble kind of getting data to see whether or not it's early, we caught the potential effects of the retirement of baby boomers probably at an elevated level of turnover mainly in the C suite and other executive levels.

Do you have any good sense for whether this is a driver of a demand as you are experiencing right now?.

Yes, look I mean we certainly saw a greater number of what we might call CEO level searches this last year than in the past, somewhat due to CEO tenure having been in the roles for a while and retirements et cetera, things going on as well.

So we're definitely seeing some activity in those marketplaces and then continue to - we forecast that we're going to continue to see that due to retirement ages et cetera and things like that that are happening in the industry. So at that level we definitely see it..

Okay, last question from me and then I'll get back into the queue, the pivots the company's been on for a relatively short period of time here is something that we've heard out in the marketplace from others trying to reach larger players trying to diversify their revenue streams to become more strategic to their clients.

Could you comment on that, whether connectivity separately from others and what the potential is for multiple companies pivoting kind of simultaneously and what that means for the ability to make an acquisition or higher that incremental kind of is helping employees to effect that change?.

Yes, so Kevin we definitely are.

It's hard for me to comment on other companies that are pivoting, we think we're somewhat pivoting uniquely in that - in the space that we're in, the assets that we've got, the IP that we've built, how that IP connects across our service offerings to allow us to pivot from one conversation to another that supports the client.

So we kind of think of that as being unique. We believe that the uniqueness of that creates an opportunity for us to attract others onto this platform as well. So we think that those are all positive things. We continue to focus on where our brand resonates the best which is working at the top and that's what you see.

With our numbers that you see with our productivity, if we look at average search et cetera, so that's where we're focusing our advisory service offerings as well. And I think there are opportunities there, the right types of opportunities not just to acquire, but to partner as well.

BTG represented an example of a partnership opportunity we saw over there, where somebody BTG works approximately with 41% of the Fortune 100 as well, they're working with the right types of companies that we work with as well and opportunities for synergies that look like that, so we're looking at acquisitions and partnership opportunities as well..

Thank you very much..

Thank you. [Operator Instructions] Our next question comes from Tim McHugh with William Blair and Company..

Thanks.

I just want to follow up on kind of the margin topic, so the comments about the segment margin essentially the opportunity in Europe and Asian in search and in the consulting business makes a lot of sense based on the data you guys report, but the other side of the coin I guess would be essentially you're telling us G&A leverage is probably not going to be the driver so it's about leverage or salary and benefits.

And if I look at your revenue per consultants all time highs and then well above prior high. So I guess the argument that I hear you talk about I guess productivity and using technology but on the other hand your productivity is already much higher than we've ever seen.

So I guess, can you talk about that and how you think about that factor as you - when we think about salary and benefits as the leverage source over the next couple of years here for margins?.

Sure. We also talked about in addition to that, in Europe as an example, we still have a couple of offices in different regions of duplication that we think we'll all be able to eliminate we'll be able to streamline some of those offices, excuse me, et cetera, and we think that will help us out.

So the other thing that - you know when we looked at the 4% margin we achieved this year versus the 0% we achieved last year is we still have some one off accruals that were required this year that again we're hoping won't be around next year. The scale is what it really comes down to more than salaries and benefits.

So my comment would be we're sitting at about $145 million and if we took ourselves up to similar scale of competitors we believe we'd be generating again around that mid team's margin just by that alone without really the focus on the salaries and benefits component being greatly reduced from a trailer reduced.

The productivity would have to be similar in terms of what we're driving. As you know the $1.9 million is an enterprise versus the regional side of it.

But we believe with the current productivity that we're having in the European region and Asia Pacific region as we continue to maintain with scale would really get us those margins that we're trying to attain..

Okay, so there's – on the G&A I guess the comment you are trying to makes there is still leverage mainly as a percentage of revenue, I guess you're not expecting absolute dollar reductions in G&A?.

I would think about, so we're sitting below 20% and my comment I think was really more about how we can maintain that. So again, if we were to increase fictitiously revenue by $100 million we'd still believe, we can maintain that G&A at that 19% to 20% area.

So it would grow in absolute dollars but maintain in terms of being amongst the lowest we've had it, which is really kind of holding G&A type so to speak.

That additional margin as you saw in 2018 really kind of comes down to the shareholders at the bottom line really was a significant contributor to us expanding our operating income by 320 basis points..

Okay thanks.

And the last question maybe on BTG, can you talk how that works? I guess are you our individual search consultants going to directly be cross-selling that, I guess the nature of the partnership and how you plan to deploy that across the business?.

Sure yes. Great, yes, thank you. Yes we've got a partnership with them where there is cross referrals. We've got a program that cuts across each of our regions we're starting in the Americas first and working with them to identify opportunities.

There's a nice pipeline of opportunities and there's cross referrals, that are going back and forth between their clients, our clients, our teams, and that's exactly how it works.

We've got it highly targeted and focused as well in a way where we're talking to our functional teams or large accounts and have a an approach to being able to drive this partnership as well..

Are these the search consultants selling or are they consulting or both trying to sell it?.

Yes, they're both are, they are pretty predominantly search consultants right now, but it's intended for both..

Okay great. Thank you..

Thank you. Our next question comes from Kevin Steinke with Barrington Research..

Just a couple of follow ups here.

You noted that every industry practice contributed to growth in the fourth quarter with the exception of financial services which was down very slightly, so would you attribute that financial services trend to any particular region or is there anything more to read into that as we move throughout the rest of the - throughout 2019?.

Yes, Kevin, it’s Krishnan. I don't really think there's much more to read into that. It was reasonably flat. Fourth quarter had some interesting vacation periods built into it as well. So we don't read too much into that..

Okay. And then lastly tax rate, do you think this kind of 30%, low 30s ranges is sustainable moving forward..

Absolutely. Our view is given where everything is obviously we're susceptible to the governments to which we operate in and the states in which we operate in. But assuming on a constant basis this is exactly where we expect it to be as in the low 30%..

Okay, thank you..

Thanks Kevin..

Thank you. And we have no further questions at this time. I would now like to turn the conference back to our speakers for closing remarks..

Okay, thank you very much. But thank you to all my Heidrick colleagues. 2018 was a perfect year for us our clients and our shareholders. We're transforming our business, addressing the most critical human capital and leadership issues and focused on driving results.

2019 is off to a very good start and promises to be another exciting chapter on this journey. So thank you very much and everybody have a great week..

Ladies and gentlemen this concludes today's presentation. You may now disconnect..