LOS ANGELES, Dec. 6, 2018 /PRNewswire/ --
Highlights
- Korn Ferry reports fee revenue
of $495.2 million in Q2 FY'19, an
11.8% increase (14.6% on a constant currency basis) from Q2 FY'18,
driven by organic growth in all segments.
- Operating income was $71.0
million in Q2 FY'19 with an operating margin of 14.3%.
Adjusted EBITDA was $80.3 million
with Adjusted EBITDA margin of 16.2%.
- Q2 FY'19 diluted earnings per share was $0.81 compared to diluted earnings per share of
$0.64 in Q2 FY'18. Adjusted diluted
earnings per share was $0.85 in Q2
FY'19 compared to Adjusted diluted earnings per share of
$0.67 in Q2 FY'18.
- The Company continued with its balanced approach to capital
allocation, buying back $22.7 million
of stock during the quarter and declaring a quarterly dividend of
$0.10 per share on December 5, 2018 payable on January 15, 2019 to stockholders of record on
December 20, 2018.
- In connection with the previously announced rebranding, the
firm also announced that it will be formally changing its name from
Korn/Ferry International to Korn
Ferry, effective January 1,
2019 – a move reflecting the transformation of the
organization to one unified brand.
Korn/Ferry International (NYSE: KFY), a global organizational
consulting firm, today announced first quarter fee revenue of
$495.2 million. Second quarter
diluted earnings per share was $0.81
and Adjusted diluted earnings per share was $0.85. Adjusted diluted earnings per share
for the second quarter excludes $2.8
million related to retention awards from a prior
acquisition, or $0.04 per share.
"For Korn Ferry's recently completed second quarter, we achieved
the highest top line and bottom line results in our history, with
fee revenue of approximately $495
million and Adjusted EBITDA and Adjusted EBITDA margin of
approximately $80 million and 16.2%,
respectively. Our fee revenue grew approximately 12%
year-over-year in the second quarter, 14.6% at constant currency,
with strong growth across all of our geographies and
solutions. Additionally, during the quarter we continued to
effectively deploy capital, repurchasing over $22 million of our shares. Our return on
invested capital continues to accelerate. From the end of FY'18 to
the end of Q2 FY'19, our return on invested capital has now
increased by over 200 basis points," said Gary D. Burnison, CEO, Korn Ferry.
"Calendar year 2018 is the year we established ourselves as the
preeminent global organizational consulting firm, a company whose
purpose is to enable people and organizations to exceed their
potential. When looking at the one professional we put in a
new job every three minutes, the 1.2 million people we develop each
year and 98% of the Fortune 500 who work with us – it is clear we
are making a notable impact. I look forward to what the future
holds as we ring in a New Year."
Selected Financial Results
(dollars in millions, except per share amounts) (a)
|
|
|
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
$
|
495.2
|
|
$
|
443.0
|
|
$
|
960.8
|
|
$
|
844.3
|
Total
revenue
|
$
|
506.8
|
|
$
|
455.5
|
|
$
|
985.2
|
|
$
|
870.4
|
Operating
income
|
$
|
71.0
|
|
$
|
52.5
|
|
$
|
15.9
|
|
$
|
94.4
|
Operating
margin
|
|
14.3%
|
|
|
11.8%
|
|
|
1.7%
|
|
|
11.2%
|
Net income
attributable to Korn Ferry
|
$
|
46.0
|
|
$
|
36.3
|
|
$
|
7.4
|
|
$
|
65.4
|
Basic earnings per
share
|
$
|
0.82
|
|
$
|
0.65
|
|
$
|
0.13
|
|
$
|
1.16
|
Diluted earnings per
share
|
$
|
0.81
|
|
$
|
0.64
|
|
$
|
0.13
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Results
(b):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
$
|
77.5
|
|
$
|
68.4
|
|
$
|
38.6
|
|
$
|
126.0
|
EBITDA
margin
|
|
15.7%
|
|
|
15.4%
|
|
|
4.0%
|
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Results
(c):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Adjusted EBITDA
(b)
|
$
|
80.3
|
|
$
|
70.6
|
|
$
|
151.1
|
|
$
|
131.0
|
Adjusted EBITDA
margin (b)
|
|
16.2%
|
|
|
15.9%
|
|
|
15.7%
|
|
|
15.5%
|
Adjusted net income
attributable to Korn Ferry
|
$
|
48.2
|
|
$
|
37.8
|
|
$
|
92.4
|
|
$
|
69.0
|
Adjusted basic
earnings per share
|
$
|
0.86
|
|
$
|
0.68
|
|
$
|
1.65
|
|
$
|
1.23
|
Adjusted diluted
earnings per share
|
$
|
0.85
|
|
$
|
0.67
|
|
$
|
1.62
|
|
$
|
1.21
|
___________
|
(a)
|
Numbers may not total
due to rounding.
|
(b)
|
EBITDA refers to
earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA further adjusts EBITDA to
exclude tradename write-offs, integration/acquisition costs and
restructuring (recoveries) charges, net. EBITDA, EBITDA
margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures (see attached reconciliations).
|
(c)
|
Adjusted results are
non-GAAP financial measures that adjust for the following, as
applicable (see attached reconciliations):
|
|
|
|
|
|
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Tradename
write-offs
|
$
|
-
|
|
$
|
-
|
|
$
|
106.6
|
|
$
|
-
|
Integration/acquisition costs
|
$
|
2.8
|
|
$
|
2.4
|
|
$
|
5.9
|
|
$
|
5.0
|
Restructuring
(recoveries) charges, net
|
$
|
-
|
|
$
|
(0.2)
|
|
$
|
-
|
|
$
|
0.1
|
Fee revenue was $495.2 million in
Q2 FY'19, an increase of 11.8% (14.6% increase on a constant
currency basis) compared to Q2 FY'18. The increase in fee
revenue was due to organic growth in all segments.
Operating margin was 14.3% in Q2 FY'19 compared to 11.8% in the
year-ago quarter. The increase in operating income was
primarily due to the increase in fee revenue, partially offset by
an increase in compensation and benefits.
Adjusted EBITDA margin was 16.2%, compared to 15.9% in the
year-ago quarter.
Results by Segment
Selected Executive Search Data
(dollars in millions) (a)
|
|
|
|
|
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
$
|
197.6
|
|
$
|
176.8
|
|
$
|
390.6
|
|
$
|
338.0
|
Total
revenue
|
$
|
202.0
|
|
$
|
180.6
|
|
$
|
400.1
|
|
$
|
346.4
|
Operating
income
|
$
|
51.5
|
|
$
|
35.3
|
|
$
|
92.3
|
|
$
|
68.2
|
Operating
margin
|
|
26.0%
|
|
|
20.0%
|
|
|
23.6%
|
|
|
20.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of
consultants
|
|
556
|
|
|
538
|
|
|
556
|
|
|
538
|
Average number of
consultants
|
|
550
|
|
|
535
|
|
|
548
|
|
|
528
|
Engagements
billed
|
|
3,968
|
|
|
3,723
|
|
|
6,144
|
|
|
5,752
|
New engagements
(b)
|
|
1,757
|
|
|
1,578
|
|
|
3,465
|
|
|
3,171
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Results
(c):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
$
|
49.2
|
|
$
|
37.7
|
|
$
|
96.0
|
|
$
|
73.0
|
EBITDA
margin
|
|
24.9%
|
|
|
21.4%
|
|
|
24.6%
|
|
|
21.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Results
(d):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Adjusted EBITDA
(c)
|
$
|
49.2
|
|
$
|
38.0
|
|
$
|
96.0
|
|
$
|
73.3
|
Adjusted EBITDA
margin (c)
|
|
24.9%
|
|
|
21.5%
|
|
|
24.6%
|
|
|
21.7%
|
___________
|
(a)
|
Numbers may not total
due to rounding.
|
(b)
|
Represents new
engagements opened in the respective period.
|
(c)
|
EBITDA, EBITDA
margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures (see attached reconciliations).
|
(d)
|
Adjusted results are
non-GAAP financial measures that exclude the following (see
attached reconciliations):
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Restructuring
charges, net
|
$
|
—
|
|
$
|
0.3
|
|
$
|
—
|
|
$
|
0.3
|
Fee revenue was $197.6 million in
Q2 FY'19, an increase of $20.8
million or 11.8% (14.0% on a constant currency basis)
compared to Q2 FY'18. The increase in fee revenue was
attributable to higher fee revenue in all regions.
Operating income was $51.5 million
in Q2 FY'19 compared to $35.3 million
in Q2 FY'18. Operating margin was 26.0% in Q2 FY'19 compared
to 20.0% in the year-ago quarter. The increase in operating
income was due to higher fee revenue in Q2 FY'19 compared to Q2
FY'18, partially offset by an increase in compensation and benefits
expense driven by an increase in performance related bonus expense
and an increase in average headcount.
Adjusted EBITDA was $49.2 million
in Q2 FY'19 with an Adjusted EBITDA margin of 24.9% compared to
$38.0 million and 21.5%,
respectively, in the year-ago quarter.
Selected Advisory Data
(dollars in millions) (a)
|
|
|
|
|
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
$
|
217.1
|
|
$
|
200.0
|
|
$
|
412.5
|
|
$
|
379.4
|
Total
revenue
|
$
|
221.4
|
|
$
|
203.8
|
|
$
|
421.6
|
|
$
|
387.1
|
Operating income
(loss)
|
$
|
29.4
|
|
$
|
26.3
|
|
$
|
(53.7)
|
|
$
|
45.4
|
Operating
margin
|
|
13.6%
|
|
|
13.2%
|
|
|
(13.0)%
|
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of
consultants (b)
|
|
570
|
|
|
594
|
|
|
570
|
|
|
594
|
Staff utilization
(c)
|
|
67%
|
|
|
67%
|
|
|
67%
|
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Results
(d):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
$
|
36.7
|
|
$
|
34.9
|
|
$
|
(38.4)
|
|
$
|
62.5
|
EBITDA
margin
|
|
16.9%
|
|
|
17.5%
|
|
|
(9.3)%
|
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Results
(e):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Adjusted EBITDA
(d)
|
$
|
39.4
|
|
$
|
36.8
|
|
$
|
73.9
|
|
$
|
67.1
|
Adjusted EBITDA
margin (d)
|
|
18.2%
|
|
|
18.4%
|
|
|
17.9%
|
|
|
17.7%
|
___________
|
(a)
|
Numbers may not total
due to rounding.
|
(b)
|
Represents number of
employees originating consulting services.
|
(c)
|
Calculated by
dividing the number of hours our full-time Advisory professional
staff record to engagements during the period, by the total
available working hours during the same period.
|
(d)
|
EBITDA, EBITDA
margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures (see attached reconciliations).
|
(e)
|
Adjusted results are
non-GAAP financial measures that adjust for the following (see
attached reconciliations):
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Tradename
write-offs
|
$
|
—
|
|
$
|
—
|
|
$
|
106.6
|
|
$
|
—
|
Integration/acquisition costs
|
$
|
2.8
|
|
$
|
2.3
|
|
$
|
5.8
|
|
$
|
4.9
|
Restructuring
recoveries, net
|
$
|
—
|
|
$
|
(0.5)
|
|
$
|
—
|
|
$
|
(0.2)
|
Fee revenue was $217.1 million in
Q2 FY'19 compared to $200.0 million
in Q2 FY'18, an increase of $17.1
million or 8.6% (11.8% on a constant currency basis)
compared to Q2 FY'18. The increase in fee revenue was
primarily driven by Consulting across each of our Advisory solution
areas.
Operating income was $29.4 million
in Q2 FY'19 with an operating margin of 13.6% compared to operating
income of $26.3 million and an
operating margin of 13.2% in the year-ago quarter. The
increase in operating income was primarily due to higher fee
revenue compared to the year-ago quarter, partially offset by an
increase in compensation and benefits expense driven by an increase
in performance related bonus expense.
Adjusted EBITDA was $39.4 million
in Q2 FY'19 with an Adjusted EBITDA margin of 18.2% compared to
$36.8 million and 18.4%,
respectively, in the year-ago quarter.
Selected RPO and Professional Search Data
(dollars in millions) (a)
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
$
|
80.5
|
|
$
|
66.3
|
|
$
|
157.8
|
|
$
|
126.9
|
Total
revenue
|
$
|
83.4
|
|
$
|
71.0
|
|
$
|
163.5
|
|
$
|
136.9
|
Operating
income
|
$
|
12.5
|
|
$
|
9.4
|
|
$
|
24.2
|
|
$
|
17.7
|
Operating
margin
|
|
15.6%
|
|
|
14.2%
|
|
|
15.3%
|
|
|
13.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Engagements billed
(b)
|
|
1,338
|
|
|
1,228
|
|
|
2,134
|
|
|
1,907
|
New engagements
(c)
|
|
731
|
|
|
711
|
|
|
1,502
|
|
|
1,443
|
|
EBITDA Results
(d):
|
Second
Quarter
|
|
Year to
Date
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
$
|
13.2
|
|
$
|
10.2
|
|
$
|
25.7
|
|
$
|
19.3
|
EBITDA
margin
|
|
16.4%
|
|
|
15.4%
|
|
|
16.3%
|
|
|
15.2%
|
___________
|
(a)
|
Numbers may not total
due to rounding.
|
(b)
|
Represents
professional search engagements billed.
|
(c)
|
Represents new
professional search engagements opened in the respective
period.
|
(d)
|
EBITDA and EBITDA
margin are non-GAAP financial measures (see attached
reconciliations).
|
Fee revenue was $80.5 million in
Q2 FY'19, an increase of $14.2
million or 21.4% (24.4% increase on a constant currency
basis), compared to the year-ago quarter. The higher fee
revenue was driven by an increase in fee revenue in professional
search and recruitment process outsourcing of $8.2 million and $6.0
million, respectively, in Q2 FY'19 compared to Q2 FY'18.
Operating income was $12.5 million
in Q2 FY'19, an increase of $3.1
million compared to Q2 FY'18 operating income of
$9.4 million. Operating margin
was 15.6% in the current quarter compared to 14.2% in the year-ago
quarter.
EBITDA was $13.2 million during Q2
FY'19, an increase of $3.0 million
compared to Q2 FY'18. EBITDA margin was 16.4% in Q2 FY'19 and 15.4%
in Q2 FY'18.
Outlook
Assuming worldwide economic conditions, financial markets and
foreign exchange rates remain steady, on a consolidated basis:
- Q3 FY'19 fee revenue is expected to be in the range of
$470 million and $490 million; and
- Q3 FY'19 diluted earnings per share is likely to range between
$0.76 to $0.84.
On a consolidated adjusted basis:
- Q3 FY'19 Adjusted diluted earnings per share is expected to be
in the range from $0.77 to
$0.85.
|
|
Q3
FY'19 Earnings Per Share
Outlook (1)
|
|
|
|
Low
|
|
|
High
|
|
Consolidated diluted
earnings per share
|
|
$
|
0.76
|
|
|
$
|
0.84
|
|
Retention
bonuses
|
|
|
0.01
|
|
|
|
0.01
|
|
Tax rate
impact
|
|
|
—
|
|
|
|
—
|
|
Consolidated Adjusted
diluted earnings per share
|
|
$
|
0.77
|
|
|
$
|
0.85
|
|
___________
|
(1)
|
Consolidated Adjusted
diluted earnings per share is a non-GAAP financial measure that
excludes the items listed in the table.
|
Earnings Conference Call Webcast
The earnings conference call will be held today at 11:00 AM (EST) and hosted by CEO Gary Burnison, CFO Robert Rozek and SVP Finance Gregg Kvochak. The conference call will be
webcast and available online at ir.kornferry.com. We will
also post to this section of our website earnings slides, which
will accompany our webcast, and other important information, and
encourage you to review the information that we make available on
our website.
About Korn
Ferry
Korn Ferry is a global
organizational consulting firm. We help clients synchronize
strategy and talent to drive superior performance. We work
with organizations to design their structures, roles, and
responsibilities. We help them hire the right people to bring
their strategy to life. And we advise them on how to reward,
develop, and motivate their people. Visit kornferry.com for
more information.
Forward-Looking Statements
Statements in this press release and our conference call that
relate to future results and events ("forward-looking statements")
are based on Korn Ferry's current
expectations. These statements, which include words such as
"believes", "expects" or "likely", include references to our
outlook. Readers are cautioned not to place undue reliance on
such statements. Actual results in future periods may differ
materially from those currently expected or desired because of a
number of risks and uncertainties that are beyond the control of
Korn Ferry. The
potential risks and uncertainties include those relating to
competition, changes in demand for our services as a result of
automation, the dependence on attracting and retaining qualified
and experienced consultants, our ability to maintain relationships
with customers and suppliers and retain key employees, maintaining
our brand name and professional reputation, potential legal
liability and regulatory developments, the
portability of client relationships, global and local political or
economic developments in or affecting countries where we have
operations, currency fluctuations in our international operations,
risks related to growth, alignment of our cost structure,
restrictions imposed by off-limits agreements, reliance on
information processing systems, cyber security vulnerabilities,
changes to data security, data privacy and data protection laws,
limited protection of our intellectual property, our ability to
enhance and develop new technology, our ability to develop new
products and services, the utilization and billing rates of
our consultants, our ability to successfully recover from a
disaster or other business continuity problems, changes in our
accounting estimates/assumptions, tax accounting effects of the Tax
Act, impairment of goodwill and other intangible assets,
deferred tax assets that we may not be able to use,
seasonality, risks related to the integration of recently
acquired businesses, employment liability risk, the impact
of rebranding on the Company's products and services; the expected
timing of the Company's rebranding and entity rationalization plan,
and the costs of the Company's rebranding and entity
rationalization plan. For a detailed description of risks and
uncertainties that could cause differences, please refer to
Korn Ferry's periodic filings with
the Securities and Exchange Commission. Korn Ferry disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
This press release contains financial information calculated
other than in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP"). In particular, it includes:
- Adjusted net income attributable to Korn/Ferry
International, adjusted to exclude restructuring (recoveries)
charges, net, integration/acquisition costs and tradename
write-offs, net of income tax effect;
- Adjusted basic and diluted earnings per share, adjusted to
exclude restructuring (recoveries) charges, net,
integration/acquisition costs and tradename write-offs, net of
income tax effect; and in the case of the outlook section, also
adjusted for tax rate impact;
- Constant currency (calculated using a quarterly average)
amounts that represent the outcome that would have resulted had
exchange rates in the reported period been the same as those in
effect in the comparable prior year period;
- EBITDA, or earnings before interest, taxes, depreciation and
amortization and EBITDA margin; and
- Adjusted EBITDA, which is EBITDA further adjusted to exclude
restructuring (recoveries) charges, net, integration/acquisition
costs and tradename write-offs, and Adjusted EBITDA
margin.
This non-GAAP disclosure has limitations as an analytical
tool, should not be viewed as a substitute for financial
information determined in accordance with GAAP, and should not be
considered in isolation or as a substitute for analysis of the
Company's results as reported under GAAP, nor is it necessarily
comparable to non-GAAP performance measures that may be presented
by other companies.
Management believes the presentation of non-GAAP financial
measures in this press release provides meaningful supplemental
information regarding Korn Ferry's
performance by excluding certain charges and other items that may
not be indicative of Korn Ferry's
ongoing operating results. These non-GAAP financial measures
are performance measures and are not indicative of the liquidity of
Korn Ferry. These charges and
other items represent 1) costs we incurred to acquire and integrate
a portion of our Advisory business, 2) charges we incurred or
recoveries we received to restructure the combined company due to
the acquisition of a portion of our Advisory business, and 3)
tradename write-offs associated with the rebranding plan initiated
by Korn Ferry. The use of
non-GAAP financial measures facilitates comparisons to Korn Ferry's historical performance.
Korn Ferry includes non-GAAP
financial measures because management believes they are useful to
investors in allowing for greater transparency with respect to
supplemental information used by management in its evaluation of
Korn Ferry's ongoing operations and
financial and operational decision-making. Management further
believes that EBITDA is useful to investors because it is
frequently used by investors and other interested parties to
measure operating performance among companies with different
capital structures, effective tax rates and tax attributes and
capitalized asset values, all of which can vary substantially from
company to company. In the case of constant currency amounts,
management believes the presentation of such information provides
useful supplemental information regarding Korn Ferry's performance as excluding the impact
of exchange rate changes on Korn
Ferry's financial performance allows investors to make more
meaningful period-to-period comparisons of the Company's operating
results, to better identify operating trends that may otherwise be
masked or distorted by exchange rate changes and to perform related
trend analysis, and provides a higher degree of transparency of
information used by management in its evaluation of Korn Ferry's ongoing operations and financial
and operational decision-making.
[Tables attached]
KORN FERRY AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands,
except per share amounts)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
October
31,
|
|
October
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(unaudited)
|
Fee
revenue
|
$
|
495,205
|
|
$
|
443,018
|
|
$
|
960,773
|
|
$
|
844,272
|
Reimbursed
out-of-pocket engagement expenses
|
|
11,588
|
|
|
12,450
|
|
|
24,382
|
|
|
26,113
|
Total revenue
|
|
506,793
|
|
|
455,468
|
|
|
985,155
|
|
|
870,385
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
and benefits
|
|
335,835
|
|
|
299,819
|
|
|
657,740
|
|
|
572,575
|
General and
administrative expenses
|
|
57,738
|
|
|
58,603
|
|
|
226,462
|
|
|
116,864
|
Reimbursed
expenses
|
|
11,588
|
|
|
12,450
|
|
|
24,382
|
|
|
26,113
|
Cost of
services
|
|
19,627
|
|
|
19,883
|
|
|
37,954
|
|
|
35,696
|
Depreciation
and amortization
|
|
11,018
|
|
|
12,447
|
|
|
22,749
|
|
|
24,656
|
Restructuring
(recoveries) charges, net
|
|
-
|
|
|
(202)
|
|
|
-
|
|
|
78
|
Total operating expenses
|
|
435,806
|
|
|
403,000
|
|
|
969,287
|
|
|
775,982
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
70,987
|
|
|
52,468
|
|
|
15,868
|
|
|
94,403
|
Other (loss)
income, net
|
|
(4,600)
|
|
|
3,447
|
|
|
(109)
|
|
|
6,801
|
Interest
expense, net
|
|
(4,337)
|
|
|
(3,624)
|
|
|
(8,440)
|
|
|
(7,304)
|
Income before provision (benefit) for income taxes and equity in
earnings of unconsolidated subsidiaries
|
|
62,050
|
|
|
52,291
|
|
|
7,319
|
|
|
93,900
|
Equity in
earnings of unconsolidated subsidiaries
|
|
100
|
|
|
60
|
|
|
129
|
|
|
90
|
Income tax
provision (benefit)
|
|
14,833
|
|
|
15,619
|
|
|
(1,277)
|
|
|
27,829
|
Net
income
|
|
47,317
|
|
|
36,732
|
|
|
8,725
|
|
|
66,161
|
Net income attributable to noncontrolling interest
|
|
(1,283)
|
|
|
(401)
|
|
|
(1,302)
|
|
|
(789)
|
Net income
attributable to Korn/Ferry International
|
$
|
46,034
|
|
$
|
36,331
|
|
$
|
7,423
|
|
$
|
65,372
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share attributable to Korn/Ferry International:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.82
|
|
$
|
0.65
|
|
$
|
0.13
|
|
$
|
1.16
|
Diluted
|
$
|
0.81
|
|
$
|
0.64
|
|
$
|
0.13
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
55,461
|
|
|
55,390
|
|
|
55,420
|
|
|
55,592
|
Diluted
|
|
56,239
|
|
|
55,978
|
|
|
56,306
|
|
|
56,252
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share:
|
$
|
0.10
|
|
$
|
0.10
|
|
$
|
0.20
|
|
$
|
0.20
|
KORN FERRY AND
SUBSIDIARIES
|
FINANCIAL SUMMARY
BY SEGMENT
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months Ended
October 31,
|
|
Six Months Ended
October 31,
|
|
|
2018
|
|
|
|
2017
|
|
%
Change
|
|
2018
|
|
|
|
2017
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
115,863
|
|
|
|
$
|
101,544
|
|
14.1%
|
|
$
|
227,960
|
|
|
|
$
|
193,377
|
|
17.9%
|
|
EMEA
|
|
44,928
|
|
|
|
|
41,346
|
|
8.7%
|
|
|
91,582
|
|
|
|
|
81,467
|
|
12.4%
|
|
Asia
Pacific
|
|
27,936
|
|
|
|
|
25,912
|
|
7.8%
|
|
|
54,231
|
|
|
|
|
47,490
|
|
14.2%
|
|
Latin
America
|
|
8,907
|
|
|
|
|
7,964
|
|
11.8%
|
|
|
16,785
|
|
|
|
|
15,623
|
|
7.4%
|
Total Executive
Search
|
|
197,634
|
|
|
|
|
176,766
|
|
11.8%
|
|
|
390,558
|
|
|
|
|
337,957
|
|
15.6%
|
Advisory
|
|
217,089
|
|
|
|
|
199,953
|
|
8.6%
|
|
|
412,464
|
|
|
|
|
379,406
|
|
8.7%
|
RPO and Professional
Search
|
|
80,482
|
|
|
|
|
66,299
|
|
21.4%
|
|
|
157,751
|
|
|
|
|
126,909
|
|
24.3%
|
|
Total fee
revenue
|
|
495,205
|
|
|
|
|
443,018
|
|
11.8%
|
|
|
960,773
|
|
|
|
|
844,272
|
|
13.8%
|
Reimbursed
out-of-pocket engagement expenses
|
|
11,588
|
|
|
|
|
12,450
|
|
(6.9)%
|
|
|
24,382
|
|
|
|
|
26,113
|
|
(6.6)%
|
|
Total
revenue
|
$
|
506,793
|
|
|
|
$
|
455,468
|
|
11.3%
|
|
$
|
985,155
|
|
|
|
$
|
870,385
|
|
13.2%
|
|
Operating income
(loss):
|
|
|
|
Margin
|
|
|
|
|
Margin
|
|
|
|
|
Margin
|
|
|
|
|
Margin
|
Executive
Search:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
35,328
|
|
30.5%
|
|
$
|
23,039
|
|
22.7%
|
|
$
|
61,842
|
|
27.1%
|
|
$
|
45,109
|
|
23.3%
|
|
EMEA
|
|
7,319
|
|
16.3%
|
|
|
6,345
|
|
15.3%
|
|
|
14,288
|
|
15.6%
|
|
|
13,020
|
|
16.0%
|
|
Asia
Pacific
|
|
6,767
|
|
24.2%
|
|
|
4,381
|
|
16.9%
|
|
|
13,408
|
|
24.7%
|
|
|
7,522
|
|
15.8%
|
|
Latin
America
|
|
2,053
|
|
23.0%
|
|
|
1,527
|
|
19.2%
|
|
|
2,807
|
|
16.7%
|
|
|
2,553
|
|
16.3%
|
Total Executive
Search
|
|
51,467
|
|
26.0%
|
|
|
35,292
|
|
20.0%
|
|
|
92,345
|
|
23.6%
|
|
|
68,204
|
|
20.2%
|
Advisory
|
|
29,426
|
|
13.6%
|
|
|
26,347
|
|
13.2%
|
|
|
(53,653)
|
|
(13.0)%
|
|
|
45,402
|
|
12.0%
|
RPO and Professional
Search
|
|
12,516
|
|
15.6%
|
|
|
9,418
|
|
14.2%
|
|
|
24,161
|
|
15.3%
|
|
|
17,663
|
|
13.9%
|
Corporate
|
|
(22,422)
|
|
|
|
|
(18,589)
|
|
|
|
|
(46,985)
|
|
|
|
|
(36,866)
|
|
|
|
Total operating
income
|
$
|
70,987
|
|
14.3%
|
|
$
|
52,468
|
|
11.8%
|
|
$
|
15,868
|
|
1.7%
|
|
$
|
94,403
|
|
11.2%
|
KORN FERRY AND
SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except per share amounts)
|
|
|
October
31,
|
|
April
30,
|
|
2018
|
|
2018
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
387,679
|
|
$
|
520,848
|
Marketable
securities
|
|
6,686
|
|
|
14,293
|
Receivables due from
clients, net of allowance for doubtful accounts of $20,197 and $17,845 at October 31, 2018 and April
30, 2018, respectively
|
|
433,557
|
|
|
384,996
|
Income taxes and
other receivables
|
|
29,009
|
|
|
29,089
|
Unearned
compensation
|
|
41,804
|
|
|
37,333
|
Prepaid expenses and
other assets
|
|
32,953
|
|
|
27,700
|
Total current
assets
|
|
931,688
|
|
|
1,014,259
|
|
|
|
|
|
|
Marketable
securities, non-current
|
|
128,913
|
|
|
122,792
|
Property and
equipment, net
|
|
126,242
|
|
|
119,901
|
Cash surrender value
of company owned life insurance policies, net of loans
|
|
123,205
|
|
|
120,087
|
Deferred income
taxes
|
|
37,776
|
|
|
25,520
|
Goodwill
|
|
579,863
|
|
|
584,222
|
Intangible assets,
net
|
|
89,662
|
|
|
203,216
|
Unearned
compensation, non-current
|
|
94,927
|
|
|
78,295
|
Investments and other
assets
|
|
22,191
|
|
|
19,622
|
Total
assets
|
$
|
2,134,467
|
|
$
|
2,287,914
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts
payable
|
$
|
34,764
|
|
$
|
35,196
|
Income taxes
payable
|
|
19,453
|
|
|
23,034
|
Compensation and
benefits payable
|
|
231,688
|
|
|
304,980
|
Term loan
|
|
26,629
|
|
|
24,911
|
Other accrued
liabilities
|
|
153,088
|
|
|
170,339
|
Total current
liabilities
|
|
465,622
|
|
|
558,460
|
|
|
|
|
|
|
Deferred compensation
and other retirement plans
|
|
234,098
|
|
|
227,729
|
Term loan,
non-current
|
|
197,997
|
|
|
211,311
|
Deferred tax
liabilities
|
|
1,751
|
|
|
9,105
|
Other
liabilities
|
|
58,402
|
|
|
61,694
|
Total
liabilities
|
|
957,870
|
|
|
1,068,299
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common stock: $0.01
par value, 150,000 shares authorized, 72,202 and 71,631
shares issued and 56,511 and
56,517 shares outstanding at October 31, 2018 and April 30,
2018, respectively
|
|
664,486
|
|
|
683,942
|
Retained
earnings
|
|
577,333
|
|
|
572,800
|
Accumulated other
comprehensive loss, net
|
|
(68,581)
|
|
|
(40,135)
|
Total Korn/Ferry
International stockholders' equity
|
|
1,173,238
|
|
|
1,216,607
|
Noncontrolling
interest
|
|
3,359
|
|
|
3,008
|
Total stockholders'
equity
|
|
1,176,597
|
|
|
1,219,615
|
Total liabilities and
stockholders' equity
|
$
|
2,134,467
|
|
$
|
2,287,914
|
KORN FERRY AND
SUBSIDIARIES
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(in thousands,
except per share amounts)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
October
31,
|
|
October
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(unaudited)
|
Operating
income
|
$
|
70,987
|
|
$
|
52,468
|
|
$
|
15,868
|
|
$
|
94,403
|
Depreciation
and amortization
|
|
11,018
|
|
|
12,447
|
|
|
22,749
|
|
|
24,656
|
Other (loss)
income, net
|
|
(4,600)
|
|
|
3,447
|
|
|
(109)
|
|
|
6,801
|
Equity in
earnings of unconsolidated subsidiaries, net
|
|
100
|
|
|
60
|
|
|
129
|
|
|
90
|
EBITDA
|
|
77,505
|
|
|
68,422
|
|
|
38,637
|
|
|
125,950
|
Restructuring
(recoveries) charges, net (1)
|
|
-
|
|
|
(202)
|
|
|
-
|
|
|
78
|
Integration/acquisition costs (2)
|
|
2,835
|
|
|
2,393
|
|
|
5,942
|
|
|
4,981
|
Tradename
write-offs (3)
|
|
-
|
|
|
-
|
|
|
106,555
|
|
|
-
|
Adjusted EBITDA
|
$
|
80,340
|
|
$
|
70,613
|
|
$
|
151,134
|
|
$
|
131,009
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
14.3%
|
|
|
11.8%
|
|
|
1.7%
|
|
|
11.2%
|
Depreciation
and amortization
|
|
2.3%
|
|
|
2.8%
|
|
|
2.3%
|
|
|
2.9%
|
Other (loss)
income, net
|
|
(0.9)%
|
|
|
0.8%
|
|
|
-
|
|
|
0.8%
|
Equity in
earnings of unconsolidated subsidiaries, net
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
EBITDA margin
|
|
15.7%
|
|
|
15.4%
|
|
|
4.0%
|
|
|
14.9%
|
Restructuring
(recoveries) charges, net (1)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Integration/acquisition costs (2)
|
|
0.5%
|
|
|
0.5%
|
|
|
0.6%
|
|
|
0.6%
|
Tradename
write-offs (3)
|
|
-
|
|
|
-
|
|
|
11.1%
|
|
|
-
|
Adjusted EBITDA margin
|
|
16.2%
|
|
|
15.9%
|
|
|
15.7%
|
|
|
15.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn/Ferry International
|
$
|
46,034
|
|
$
|
36,331
|
|
$
|
7,423
|
|
$
|
65,372
|
Restructuring
(recoveries) charges, net (1)
|
|
-
|
|
|
(202)
|
|
|
-
|
|
|
78
|
Integration/acquisition costs (2)
|
|
2,835
|
|
|
2,393
|
|
|
5,942
|
|
|
4,981
|
Tradename
write-offs (3)
|
|
-
|
|
|
-
|
|
|
106,555
|
|
|
-
|
Tax effect on
the above items (4)
|
|
(634)
|
|
|
(681)
|
|
|
(27,527)
|
|
|
(1,405)
|
Adjusted net income attributable to Korn/Ferry
International
|
$
|
48,235
|
|
$
|
37,841
|
|
$
|
92,393
|
|
$
|
69,026
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per common share
|
$
|
0.82
|
|
$
|
0.65
|
|
$
|
0.13
|
|
$
|
1.16
|
Restructuring
(recoveries) charges, net (1)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Integration/acquisition costs (2)
|
|
0.05
|
|
|
0.04
|
|
|
0.11
|
|
|
0.10
|
Tradename
write-offs (3)
|
|
-
|
|
|
-
|
|
|
1.92
|
|
|
-
|
Tax effect on
the above items (4)
|
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.51)
|
|
|
(0.03)
|
Adjusted basic earnings per share
|
$
|
0.86
|
|
$
|
0.68
|
|
$
|
1.65
|
|
$
|
1.23
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per common share
|
$
|
0.81
|
|
$
|
0.64
|
|
$
|
0.13
|
|
$
|
1.15
|
Restructuring
(recoveries) charges, net (1)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Integration/acquisition costs (2)
|
|
0.05
|
|
|
0.04
|
|
|
0.11
|
|
|
0.09
|
Tradename
write-offs (3)
|
|
-
|
|
|
-
|
|
|
1.88
|
|
|
-
|
Tax effect on
the above items (4)
|
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.50)
|
|
|
(0.03)
|
Adjusted diluted earnings per share
|
$
|
0.85
|
|
$
|
0.67
|
|
$
|
1.62
|
|
$
|
1.21
|
|
|
Explanation of
Non-GAAP Adjustments
|
(1)
|
Restructuring plan
implemented in order to rationalize our cost structure by
eliminating redundant positions and consolidating office space due
to a previous acquisition that took place on December 1,
2015.
|
(2)
|
Costs associated with
completing a previous acquisition, such as legal and professional
fees, retention awards and the on-going integration expenses to
combine the companies.
|
(3)
|
The Company is
implementing a plan to go to market under a single, master brand
architecture to simplify the Company's organizational structure by
eliminating and/or consolidating certain legal entities and
implementing a rebranding of the Company to offer the Company's
current products and services using the "Korn Ferry" name, branding
and trademarks. As a result of this the Company was required under
U.S. generally accepted accounting principles to record a one-time,
non-cash tradename write-offs.
|
(4)
|
Tax effect on
restructuring (recoveries) charges, net, integration/acquisition
costs and tradename write-offs.
|
KORN FERRY AND
SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME AND OPERATING INCOME (GAAP) TO
|
EBITDA AND
ADJUSTED EBITDA (NON-GAAP)
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months Ended
October 31, 2018
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
$
|
115,863
|
|
$
|
44,928
|
|
$
|
27,936
|
|
$
|
8,907
|
|
$
|
197,634
|
|
$
|
217,089
|
|
$
|
80,482
|
|
$
|
-
|
|
$
|
495,205
|
Total
revenue
|
$
|
119,322
|
|
$
|
45,636
|
|
$
|
28,146
|
|
$
|
8,912
|
|
$
|
202,016
|
|
$
|
221,419
|
|
$
|
83,358
|
|
$
|
-
|
|
$
|
506,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn/Ferry International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
46,034
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,283
|
Other loss,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,600
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,337
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(100)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,833
|
Operating income
(loss)
|
$
|
35,328
|
|
$
|
7,319
|
|
$
|
6,767
|
|
$
|
2,053
|
|
$
|
51,467
|
|
$
|
29,426
|
|
$
|
12,516
|
|
$
|
(22,422)
|
|
|
70,987
|
Depreciation and
amortization
|
|
968
|
|
|
95
|
|
|
375
|
|
|
101
|
|
|
1,539
|
|
|
6,964
|
|
|
761
|
|
|
1,754
|
|
|
11,018
|
Other (loss) income,
net
|
|
(4,081)
|
|
|
22
|
|
|
77
|
|
|
93
|
|
|
(3,889)
|
|
|
265
|
|
|
(79)
|
|
|
(897)
|
|
|
(4,600)
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
100
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
100
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
100
|
EBITDA
|
|
32,315
|
|
|
7,436
|
|
|
7,219
|
|
|
2,247
|
|
|
49,217
|
|
|
36,655
|
|
|
13,198
|
|
|
(21,565)
|
|
|
77,505
|
EBITDA
margin
|
|
27.9%
|
|
|
16.6%
|
|
|
25.8%
|
|
|
25.2%
|
|
|
24.9%
|
|
|
16.9%
|
|
|
16.4%
|
|
|
|
|
|
15.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration/acquisition costs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,755
|
|
|
-
|
|
|
80
|
|
|
2,835
|
Adjusted
EBITDA
|
$
|
32,315
|
|
$
|
7,436
|
|
$
|
7,219
|
|
$
|
2,247
|
|
$
|
49,217
|
|
$
|
39,410
|
|
$
|
13,198
|
|
$
|
(21,485)
|
|
$
|
80,340
|
Adjusted EBITDA
margin
|
|
27.9%
|
|
|
16.6%
|
|
|
25.8%
|
|
|
25.2%
|
|
|
24.9%
|
|
|
18.2%
|
|
|
16.4%
|
|
|
|
|
|
16.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
October 31, 2017
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
$
|
101,544
|
|
$
|
41,346
|
|
$
|
25,912
|
|
$
|
7,964
|
|
$
|
176,766
|
|
$
|
199,953
|
|
$
|
66,299
|
|
$
|
-
|
|
$
|
443,018
|
Total
revenue
|
$
|
104,329
|
|
$
|
42,073
|
|
$
|
26,187
|
|
$
|
7,994
|
|
$
|
180,583
|
|
$
|
203,836
|
|
$
|
71,049
|
|
$
|
-
|
|
$
|
455,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn/Ferry International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
36,331
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,447)
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,624
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(60)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,619
|
Operating income
(loss)
|
$
|
23,039
|
|
$
|
6,345
|
|
$
|
4,381
|
|
$
|
1,527
|
|
$
|
35,292
|
|
$
|
26,347
|
|
$
|
9,418
|
|
$
|
(18,589)
|
|
|
52,468
|
Depreciation and
amortization
|
|
984
|
|
|
459
|
|
|
371
|
|
|
111
|
|
|
1,925
|
|
|
8,143
|
|
|
784
|
|
|
1,595
|
|
|
12,447
|
Other income,
net
|
|
290
|
|
|
43
|
|
|
94
|
|
|
39
|
|
|
466
|
|
|
455
|
|
|
-
|
|
|
2,526
|
|
|
3,447
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
60
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
60
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
60
|
EBITDA
|
|
24,373
|
|
|
6,847
|
|
|
4,846
|
|
|
1,677
|
|
|
37,743
|
|
|
34,945
|
|
|
10,202
|
|
|
(14,468)
|
|
|
68,422
|
EBITDA
margin
|
|
24.0%
|
|
|
16.6%
|
|
|
18.7%
|
|
|
21.1%
|
|
|
21.4%
|
|
|
17.5%
|
|
|
15.4%
|
|
|
|
|
|
15.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
(recoveries) charges, net
|
|
-
|
|
|
-
|
|
|
273
|
|
|
-
|
|
|
273
|
|
|
(481)
|
|
|
6
|
|
|
-
|
|
|
(202)
|
Integration/acquisition costs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,313
|
|
|
-
|
|
|
80
|
|
|
2,393
|
Adjusted
EBITDA
|
$
|
24,373
|
|
$
|
6,847
|
|
$
|
5,119
|
|
$
|
1,677
|
|
$
|
38,016
|
|
$
|
36,777
|
|
$
|
10,208
|
|
$
|
(14,388)
|
|
$
|
70,613
|
Adjusted EBITDA
margin
|
|
24.0%
|
|
|
16.6%
|
|
|
19.8%
|
|
|
21.1%
|
|
|
21.5%
|
|
|
18.4%
|
|
|
15.4%
|
|
|
|
|
|
15.9%
|
KORN FERRY AND
SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME AND OPERATING INCOME (GAAP) TO
|
EBITDA AND
ADJUSTED EBITDA (NON-GAAP)
|
(in
thousands)
|
(unaudited)
|
|
|
Six Months Ended
October 31, 2018
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
$
|
227,960
|
|
$
|
91,582
|
|
$
|
54,231
|
|
$
|
16,785
|
|
$
|
390,558
|
|
$
|
412,464
|
|
$
|
157,751
|
|
$
|
-
|
|
$
|
960,773
|
Total
revenue
|
$
|
235,079
|
|
$
|
93,385
|
|
$
|
54,771
|
|
$
|
16,815
|
|
$
|
400,050
|
|
$
|
421,566
|
|
$
|
163,539
|
|
$
|
-
|
|
$
|
985,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn/Ferry International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,423
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,302
|
Other loss,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,440
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(129)
|
Income tax
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,277)
|
Operating income
(loss)
|
$
|
61,842
|
|
$
|
14,288
|
|
$
|
13,408
|
|
$
|
2,807
|
|
$
|
92,345
|
|
$
|
(53,653)
|
|
$
|
24,161
|
|
$
|
(46,985)
|
|
|
15,868
|
Depreciation and
amortization
|
|
1,947
|
|
|
465
|
|
|
745
|
|
|
208
|
|
|
3,365
|
|
|
14,395
|
|
|
1,522
|
|
|
3,467
|
|
|
22,749
|
Other (loss) income,
net
|
|
(609)
|
|
|
362
|
|
|
252
|
|
|
130
|
|
|
135
|
|
|
835
|
|
|
26
|
|
|
(1,105)
|
|
|
(109)
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
129
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
129
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
129
|
EBITDA
|
|
63,309
|
|
|
15,115
|
|
|
14,405
|
|
|
3,145
|
|
|
95,974
|
|
|
(38,423)
|
|
|
25,709
|
|
|
(44,623)
|
|
|
38,637
|
EBITDA
margin
|
|
27.8%
|
|
|
16.5%
|
|
|
26.6%
|
|
|
18.7%
|
|
|
24.6%
|
|
|
(9.3)%
|
|
|
16.3%
|
|
|
|
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration/acquisition costs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,782
|
|
|
-
|
|
|
160
|
|
|
5,942
|
Tradename
write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
106,555
|
|
|
-
|
|
|
-
|
|
|
106,555
|
Adjusted
EBITDA
|
$
|
63,309
|
|
$
|
15,115
|
|
$
|
14,405
|
|
$
|
3,145
|
|
$
|
95,974
|
|
$
|
73,914
|
|
$
|
25,709
|
|
$
|
(44,463)
|
|
$
|
151,134
|
Adjusted EBITDA
margin
|
|
27.8%
|
|
|
16.5%
|
|
|
26.6%
|
|
|
18.7%
|
|
|
24.6%
|
|
|
17.9%
|
|
|
16.3%
|
|
|
|
|
|
15.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
October 31, 2017
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
$
|
193,377
|
|
$
|
81,467
|
|
$
|
47,490
|
|
$
|
15,623
|
|
$
|
337,957
|
|
$
|
379,406
|
|
$
|
126,909
|
|
$
|
-
|
|
$
|
844,272
|
Total
revenue
|
$
|
199,534
|
|
$
|
83,131
|
|
$
|
48,067
|
|
$
|
15,658
|
|
$
|
346,390
|
|
$
|
387,132
|
|
$
|
136,863
|
|
$
|
-
|
|
$
|
870,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn/Ferry International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
65,372
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
789
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,801)
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,304
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(90)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,829
|
Operating income
(loss)
|
$
|
45,109
|
|
$
|
13,020
|
|
$
|
7,522
|
|
$
|
2,553
|
|
$
|
68,204
|
|
$
|
45,402
|
|
$
|
17,663
|
|
$
|
(36,866)
|
|
|
94,403
|
Depreciation and
amortization
|
|
1,933
|
|
|
887
|
|
|
691
|
|
|
218
|
|
|
3,729
|
|
|
16,228
|
|
|
1,580
|
|
|
3,119
|
|
|
24,656
|
Other income,
net
|
|
572
|
|
|
99
|
|
|
199
|
|
|
59
|
|
|
929
|
|
|
886
|
|
|
8
|
|
|
4,978
|
|
|
6,801
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
90
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
90
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
90
|
EBITDA
|
|
47,704
|
|
|
14,006
|
|
|
8,412
|
|
|
2,830
|
|
|
72,952
|
|
|
62,516
|
|
|
19,251
|
|
|
(28,769)
|
|
|
125,950
|
EBITDA
margin
|
|
24.7%
|
|
|
17.2%
|
|
|
17.7%
|
|
|
18.1%
|
|
|
21.6%
|
|
|
16.5%
|
|
|
15.2%
|
|
|
|
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
(recoveries) charges, net
|
|
-
|
|
|
-
|
|
|
313
|
|
|
-
|
|
|
313
|
|
|
(241)
|
|
|
6
|
|
|
-
|
|
|
78
|
Integration/acquisition costs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,862
|
|
|
-
|
|
|
119
|
|
|
4,981
|
Adjusted
EBITDA
|
$
|
47,704
|
|
$
|
14,006
|
|
$
|
8,725
|
|
$
|
2,830
|
|
$
|
73,265
|
|
$
|
67,137
|
|
$
|
19,257
|
|
$
|
(28,650)
|
|
$
|
131,009
|
Adjusted EBITDA
margin
|
|
24.7%
|
|
|
17.2%
|
|
|
18.4%
|
|
|
18.1%
|
|
|
21.7%
|
|
|
17.7%
|
|
|
15.2%
|
|
|
|
|
|
15.5%
|
View original
content:http://www.prnewswire.com/news-releases/korn-ferry-announces-second-quarter-fiscal-2019-results-of-operations-300761030.html
SOURCE Korn Ferry