LOS ANGELES, June 20, 2019 /PRNewswire/ --
Highlights
- Korn Ferry reports annual fee
revenue of $1,926.0 million, an
increase of 9% year-over-year (12% increase on a constant currency
basis), with growth coming from all three lines of business.
- Net income attributable to Korn
Ferry was $102.7 million in
FY'19 with an operating margin of 7.3% and Adjusted EBITDA margin
of 16.1%.
- Fee revenue was $490.8 million in
Q4 FY'19, an increase of 3% (8% increase on a constant currency
basis) from Q4 FY'18.
- Net income attributable to Korn
Ferry was $50.3 million and
operating income was $62.3 million in
Q4 FY'19 with an operating margin of 12.7%. Q4 FY'19 Adjusted
EBITDA was $82.2 million with an
Adjusted EBITDA margin of 16.7%.
- Q4 FY'19 diluted earnings per share was $0.89 compared to diluted earnings per share of
$0.73 in Q4 FY'18. Adjusted diluted
earnings per share was $0.88 in Q4
FY'19 compared to Adjusted diluted earnings per share of
$0.80 in Q4 FY'18.
- The Company continued with its balanced approach to capital
allocation, buying back $37.4 million
of stock during the year and declaring a quarterly dividend of
$0.10 per share on June 20, 2019 payable on July 31, 2019 to stockholders of record on
July 2, 2019.
Korn Ferry (NYSE: KFY), a global
organizational consulting firm, today announced fourth quarter and
annual fee revenue of $490.8 million
and $1,926.0 million,
respectively. In addition, fourth quarter diluted earnings
per share was $0.89 and Adjusted
diluted earnings per share was $0.88.
"I am pleased to report fee revenue of $491 million and strong profitability, with
diluted earnings per share and Adjusted diluted earnings per share
of $0.89 and $0.88 during our recently completed fourth
quarter. Net income attributable to Korn Ferry was $50.3
million and operating margin was 12.7%. Adjusted
EBITDA was $82.2 million and EBITDA
margin was 16.7% -- both all-time highs. We achieved the
highest fiscal year fee revenue in our firm's history – up 9% on a
US GAAP basis year-over-year and 12% at constant currency," said
Gary D. Burnison, CEO of
Korn Ferry.
"We have made tremendous progress in the recently completed
fiscal year. Korn Ferry is now
the organizational consultancy that helps companies look at talent
and strategy together. We help companies make sure they have
the right people, in the right places and for the right
rewards. We bring their strategies to life by redesigning
their organizational structure, helping them hire, motivate and
hold on to the best people, with the right skills and mindset for
the future. In the fiscal year ahead, we will continue to
bridge our clients' talent and organizational strategies, unlocking
their potential and driving superior performance."
Selected Financial Results
(dollars in millions,
except per share amounts) (a)
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
|
$
|
490.8
|
|
$
|
475.4
|
|
$
|
1,926.0
|
|
$
|
1,767.2
|
Total
revenue
|
|
$
|
502.5
|
|
$
|
488.4
|
|
$
|
1,973.9
|
|
$
|
1,819.5
|
Operating
income
|
|
$
|
62.3
|
|
$
|
64.2
|
|
$
|
140.8
|
|
$
|
208.4
|
Operating
margin
|
|
|
12.7%
|
|
|
13.5%
|
|
|
7.3%
|
|
|
11.8%
|
Net income
attributable to Korn Ferry
|
|
$
|
50.3
|
|
$
|
41.2
|
|
$
|
102.7
|
|
$
|
133.8
|
Basic earnings per
share
|
|
$
|
0.90
|
|
$
|
0.74
|
|
$
|
1.84
|
|
$
|
2.39
|
Diluted earnings per
share
|
|
$
|
0.89
|
|
$
|
0.73
|
|
$
|
1.81
|
|
$
|
2.35
|
|
EBITDA Results
(b):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
|
$
|
82.2
|
|
$
|
72.8
|
|
$
|
197.7
|
|
$
|
268.5
|
EBITDA
margin
|
|
|
16.7%
|
|
|
15.3%
|
|
|
10.3%
|
|
|
15.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Results
(c):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Adjusted EBITDA
(b)
|
|
$
|
82.2
|
|
$
|
75.6
|
|
$
|
311.0
|
|
$
|
278.0
|
Adjusted EBITDA
margin (b)
|
|
|
16.7%
|
|
|
15.9%
|
|
|
16.1%
|
|
|
15.7%
|
Adjusted net income
attributable to Korn Ferry
|
|
$
|
49.7
|
|
$
|
45.6
|
|
$
|
187.9
|
|
$
|
154.6
|
Adjusted basic
earnings per share
|
|
$
|
0.89
|
|
$
|
0.82
|
|
$
|
3.36
|
|
$
|
2.76
|
Adjusted diluted
earnings per share
|
|
$
|
0.88
|
|
$
|
0.80
|
|
$
|
3.31
|
|
$
|
2.72
|
|
|
|
|
|
|
|
(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 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):
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Income tax impact due
to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax
Act")
|
|
$
|
—
|
|
$
|
2.2
|
|
$
|
—
|
|
$
|
13.6
|
Tradename
write-offs
|
|
$
|
—
|
|
$
|
—
|
|
$
|
106.6
|
|
$
|
—
|
Integration/acquisition costs
|
|
$
|
—
|
|
$
|
2.8
|
|
$
|
6.7
|
|
$
|
9.4
|
Restructuring
charges, net
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.1
|
Fiscal 2019 Fourth Quarter Results
The Company reported fee revenue in Q4 FY'19 of $490.8 million, an increase of 3% (8% increase on
a constant currency basis) compared to Q4 FY'18. The increase
in fee revenue was mainly due to organic growth in RPO and
Professional Search of 20%.
Net income attributable to Korn
Ferry was $50.3 million in Q4
FY'19 as compared to $41.2 million in
Q4 FY'18. The increase in net income attributable to
Korn Ferry resulted from an increase
in fee revenue partially offset by an increase in compensation and
benefits primarily due to an increase in average headcount and an
increase in general and administrative expenses.
Operating income was $62.3 million
in Q4 FY'19 with an operating margin of 12.7% as compared to
$64.2 million and 13.5%,
respectively, in the year-ago quarter. The decrease in
operating income resulted from an increase in compensation and
benefits and general and administrative expenses, partially offset
by higher fee revenue. The increase in compensation and benefits
was primarily driven by an increase in amounts owed under certain
deferred compensation and retirement plans due to increases in the
fair value of participants' accounts in Q4 FY'19 compared to
decreases in the year-ago quarter and to a lesser extent an
increase in average headcount.
Adjusted EBITDA was $82.2 million
in Q4 FY'19 with an Adjusted EBITDA margin of 16.7%, as compared to
$75.6 million and 15.9%,
respectively, in Q4 FY'18. The increase in Adjusted EBITDA
was impacted by higher fee revenue, partially offset by increases
in compensation and benefits expense and general and administrative
expenses.
Fiscal 2019 Results
The Company reported record fee revenue in FY'19 of $1,926.0 million, an increase of $158.8 million or 9% (12% increase on a constant
currency basis) compared to FY'18. The organic growth was
driven by all three lines of business:
RPO and Professional
Search
|
|
21%
|
Executive
Search
|
|
9%
|
Advisory
|
|
5%
|
Net income attributable to Korn
Ferry was $102.7 million in
FY'19 as compared to $133.8 million
in FY'18. The decrease in net income attributable to
Korn Ferry was primarily due to the
tradename write-off and an increase in compensation and benefits
expense, partially offset by an increase in fee revenue and a lower
income tax provision.
Operating income was $140.8
million in FY'19 with an operating margin of 7.3% compared
to $208.4 million and 11.8% in
FY'18. The decrease in operating income was primarily due to
the $106.6 million tradename
write-off and an increase of $112.1
million in compensation and benefits expense, partially
offset by an increase of $158.8
million in fee revenue.
Adjusted EBITDA was $311.0 million
in FY'19 with Adjusted EBITDA margin of 16.1%, compared to
$278.0 million and 15.7%,
respectively, in the year-ago period.
Results by Segment
Selected Executive Search Data
(dollars in millions)
(a)
|
|
|
|
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
|
$
|
190.9
|
|
$
|
190.7
|
|
$
|
774.8
|
|
$
|
709.0
|
Total
revenue
|
|
$
|
195.3
|
|
$
|
195.4
|
|
$
|
793.4
|
|
$
|
727.3
|
Operating
income
|
|
$
|
42.0
|
|
$
|
47.0
|
|
$
|
179.1
|
|
$
|
149.6
|
Operating
margin
|
|
|
22.0%
|
|
|
24.6%
|
|
|
23.1%
|
|
|
21.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of
consultants
|
|
|
565
|
|
|
541
|
|
|
565
|
|
|
541
|
Average number of
consultants
|
|
|
558
|
|
|
539
|
|
|
553
|
|
|
529
|
Engagements
billed
|
|
|
3,943
|
|
|
3,792
|
|
|
10,318
|
|
|
9,706
|
New engagements
(b)
|
|
|
1,717
|
|
|
1,590
|
|
|
6,790
|
|
|
6,325
|
|
|
|
|
|
EBITDA Results
(c):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
|
$
|
49.7
|
|
$
|
48.7
|
|
$
|
193.8
|
|
$
|
159.0
|
EBITDA
margin
|
|
|
26.0%
|
|
|
25.5%
|
|
|
25.0%
|
|
|
22.4%
|
|
|
|
|
|
Adjusted Results
(d):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Adjusted EBITDA
(c)
|
|
$
|
49.7
|
|
$
|
48.7
|
|
$
|
193.8
|
|
$
|
159.3
|
Adjusted EBITDA
margin (c)
|
|
|
26.0%
|
|
|
25.5%
|
|
|
25.0%
|
|
|
22.5%
|
___________
|
|
|
(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):
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Restructuring
charges, net
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.3
|
Fee revenue was $190.9 million in
Q4 FY'19, an increase of $0.2 million
(3% increase on a constant currency basis) compared to Q4
FY'18.
Operating income was $42.0 million
in Q4 FY'19 compared to $47.0 million
in Q4 FY'18. Operating margin was 22.0% in Q4 FY'19 compared
to 24.6% in the year-ago quarter. The decrease in operating
income was due to an increase in compensation and benefits expense
primarily from amounts owed under certain deferred compensation and
retirement plans driven by increases in the fair value of
participants' accounts in Q4 FY'9 compared to decreases in the
year-ago quarter, partially offset by a decline in performance
related bonus expense.
Adjusted EBITDA was $49.7 million
in Q4 FY'19 with an Adjusted EBITDA margin of 26.0% compared to
$48.7 million and 25.5%,
respectively, in the year-ago quarter.
Selected Advisory Data
(dollars in millions)
(a)
|
|
|
|
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
|
$
|
207.1
|
|
$
|
207.6
|
|
$
|
821.0
|
|
$
|
785.0
|
Total
revenue
|
|
$
|
211.4
|
|
$
|
211.9
|
|
$
|
838.6
|
|
$
|
801.0
|
Operating
income
|
|
$
|
30.0
|
|
$
|
28.1
|
|
$
|
5.6
|
|
$
|
100.5
|
Operating
margin
|
|
|
14.5%
|
|
|
13.5%
|
|
|
0.7%
|
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of
consultants (b)
|
|
|
579
|
|
|
577
|
|
|
579
|
|
|
577
|
Staff utilization
(c)
|
|
|
68%
|
|
|
70%
|
|
|
66%
|
|
|
66%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Results
(d):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA
|
|
$
|
38.9
|
|
$
|
36.3
|
|
$
|
37.9
|
|
$
|
134.6
|
EBITDA
margin
|
|
|
18.8%
|
|
|
17.5%
|
|
|
4.6%
|
|
|
17.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Results
(e):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Adjusted EBITDA
(d)
|
|
$
|
38.9
|
|
$
|
39.0
|
|
$
|
151.0
|
|
$
|
143.5
|
Adjusted EBITDA
margin (d)
|
|
|
18.8%
|
|
|
18.8%
|
|
|
18.4%
|
|
|
18.3%
|
___________
|
|
|
(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):
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Tradename
write-offs
|
|
$
|
—
|
|
$
|
—
|
|
$
|
106.6
|
|
$
|
—
|
Integration/acquisition costs
|
|
$
|
—
|
|
$
|
2.7
|
|
$
|
6.6
|
|
$
|
9.2
|
Restructuring
recoveries, net
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.2)
|
Fee revenue was essentially flat at $207.1 million in Q4 FY'19 compared to
$207.6 million in Q4 FY'18 (5%
increase on a constant currency basis).
Operating income was $30.0 million
in Q4 FY'19 with an operating margin of 14.5% compared to operating
income of $28.1 million and an
operating margin of 13.5% in the year-ago quarter. The
increase in operating income was primarily due to a decrease in
compensation and benefits expense driven by lower performance
related bonus expense in Q4 FY'19 compared to the year-ago
quarter.
Adjusted EBITDA was $38.9 million
in Q4 FY'19 with an Adjusted EBITDA margin of 18.8% compared to
$39.0 million and 18.8%,
respectively, in the year-ago quarter.
Selected RPO and Professional Search Data
(dollars in
millions) (a)
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
Fee
revenue
|
|
$
|
92.8
|
|
$
|
77.1
|
|
$
|
330.1
|
|
$
|
273.2
|
Total
revenue
|
|
$
|
95.8
|
|
$
|
81.1
|
|
$
|
341.9
|
|
$
|
291.2
|
Operating
income
|
|
$
|
14.5
|
|
$
|
11.7
|
|
$
|
50.9
|
|
$
|
39.4
|
Operating
margin
|
|
|
15.7%
|
|
|
15.1%
|
|
|
15.4%
|
|
|
14.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engagements billed
(b)
|
|
|
1,409
|
|
|
1,313
|
|
|
3,595
|
|
|
3,423
|
New engagements
(c)
|
|
|
781
|
|
|
748
|
|
|
2,935
|
|
|
2,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and
Adjusted Results (d):
|
|
Fourth
Quarter
|
|
Year to
Date
|
|
|
FY'19
|
|
FY'18
|
|
FY'19
|
|
FY'18
|
EBITDA and Adjusted
EBITDA
|
|
$
|
15.6
|
|
$
|
12.6
|
|
$
|
54.4
|
|
$
|
42.6
|
EBITDA and Adjusted
EBITDA margin
|
|
|
16.9%
|
|
|
16.3%
|
|
|
16.5%
|
|
|
15.6%
|
___________
|
|
|
(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, EBITDA
margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures (see attached reconciliations).
|
Fee revenue was $92.8 million in
Q4 FY'19, an increase of $15.7
million or 20% (25% 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 recruitment process
outsourcing and professional search of $11.0
million and $4.7 million,
respectively, in Q4 FY'19 compared to Q4 FY'18.
Operating income was $14.5 million
in Q4 FY'19, an increase of $2.8
million compared to Q4 FY'18 operating income of
$11.7 million. The increase in
operating income resulted from higher fee revenue offset by
increases in compensation and benefits expense driven by a 29%
increase in average headcount and higher performance related bonus
expense. Operating margin was 15.7% in the current quarter compared
to 15.1% in the year-ago quarter.
EBITDA was $15.6 million during Q4
FY'19, an increase of $3.0 million
compared to Q4 FY'18. EBITDA margin was 16.9% in Q4 FY'19 and
16.3% in Q4 FY'18.
Outlook
Assuming worldwide economic conditions, financial markets and
foreign exchange rates remain steady, on a consolidated basis:
- Q1 FY'20 fee revenue is expected to be in the range of
$466 million and $486 million; and
- Q1 FY'20 diluted earnings per share is likely to range between
$0.73 to $0.81.
Earnings Conference Call Webcast
The earnings conference call will be held today at 4:30 PM (EDT) 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 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, adjusted to exclude the tax impact
associated with the Tax Act, 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 the tax impact associated with the Tax Act, 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) the tax impact associated with the Tax
Act, 2) costs we incurred to acquire and integrate a portion of our
Advisory business, 3) charges we incurred or recoveries we received
to restructure the combined company due to the acquisition of a
portion of our Advisory business, and 4) 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. Adjusted net income
attributable to Korn Ferry, adjusted
basic and diluted earnings per share and Adjusted EBITDA, exclude
certain charges that management does not consider on-going in
nature and allows management and investors to make more meaningful
period-to-period comparisons of the Company's operating
results. 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
|
|
Year
Ended
|
|
|
April
30,
|
|
April
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
|
|
|
|
|
|
Fee
revenue
|
|
$
|
490,756
|
|
$
|
475,364
|
|
$
|
1,926,033
|
|
$
|
1,767,217
|
Reimbursed
out-of-pocket engagement expenses
|
|
|
11,779
|
|
|
13,000
|
|
|
47,829
|
|
|
52,302
|
Total revenue
|
|
|
502,535
|
|
|
488,364
|
|
|
1,973,862
|
|
|
1,819,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
and benefits
|
|
|
331,665
|
|
|
316,955
|
|
|
1,311,240
|
|
|
1,199,057
|
General and
administrative expenses
|
|
|
64,350
|
|
|
62,010
|
|
|
351,991
|
|
|
237,390
|
Reimbursed
expenses
|
|
|
11,779
|
|
|
13,000
|
|
|
47,829
|
|
|
52,302
|
Cost of
services
|
|
|
20,467
|
|
|
20,495
|
|
|
75,487
|
|
|
73,658
|
Depreciation
and amortization
|
|
|
11,999
|
|
|
11,707
|
|
|
46,489
|
|
|
48,588
|
Restructuring
charges, net
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
78
|
Total operating expenses
|
|
|
440,260
|
|
|
424,167
|
|
|
1,833,036
|
|
|
1,611,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
62,275
|
|
|
64,197
|
|
|
140,826
|
|
|
208,446
|
Other income
(loss), net
|
|
|
7,802
|
|
|
(3,192)
|
|
|
10,094
|
|
|
11,119
|
Interest
expense, net
|
|
|
(4,169)
|
|
|
(2,818)
|
|
|
(16,891)
|
|
|
(13,832)
|
Income before provision for income taxes and equity in earnings of
unconsolidated subsidiaries
|
|
|
65,908
|
|
|
58,187
|
|
|
134,029
|
|
|
205,733
|
Equity in
earnings of unconsolidated subsidiaries, net
|
|
|
120
|
|
|
110
|
|
|
311
|
|
|
297
|
Income tax
provision
|
|
|
15,401
|
|
|
15,988
|
|
|
29,544
|
|
|
70,133
|
Net
income
|
|
|
50,627
|
|
|
42,309
|
|
|
104,796
|
|
|
135,897
|
Net income attributable to noncontrolling interest
|
|
|
(363)
|
|
|
(1,149)
|
|
|
(2,145)
|
|
|
(2,118)
|
Net income
attributable to Korn Ferry
|
|
$
|
50,264
|
|
$
|
41,160
|
|
$
|
102,651
|
|
$
|
133,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share attributable to Korn Ferry:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.90
|
|
$
|
0.74
|
|
$
|
1.84
|
|
$
|
2.39
|
Diluted
|
|
$
|
0.89
|
|
$
|
0.73
|
|
$
|
1.81
|
|
$
|
2.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
55,173
|
|
|
55,266
|
|
|
55,311
|
|
|
55,426
|
Diluted
|
|
|
55,666
|
|
|
56,147
|
|
|
56,096
|
|
|
56,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share:
|
|
$
|
0.10
|
|
$
|
0.10
|
|
$
|
0.40
|
|
$
|
0.40
|
KORN FERRY AND
SUBSIDIARIES
|
FINANCIAL SUMMARY
BY SEGMENT
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
|
2019
|
|
|
|
2018
|
|
% Change
|
|
2019
|
|
|
|
2018
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Search:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
113,651
|
|
|
|
$
|
112,005
|
|
1.5%
|
|
$
|
455,826
|
|
|
|
$
|
408,098
|
|
11.7%
|
|
EMEA
|
|
45,307
|
|
|
|
|
45,476
|
|
(0.4%)
|
|
|
182,829
|
|
|
|
|
173,725
|
|
5.2%
|
|
Asia
Pacific
|
|
24,373
|
|
|
|
|
24,612
|
|
(1.0%)
|
|
|
104,291
|
|
|
|
|
96,595
|
|
8.0%
|
|
Latin
America
|
|
7,557
|
|
|
|
|
8,576
|
|
(11.9%)
|
|
|
31,896
|
|
|
|
|
30,624
|
|
4.2%
|
Total Executive
Search
|
|
190,888
|
|
|
|
|
190,669
|
|
0.1%
|
|
|
774,842
|
|
|
|
|
709,042
|
|
9.3%
|
Advisory
|
|
207,082
|
|
|
|
|
207,551
|
|
(0.2%)
|
|
|
821,048
|
|
|
|
|
785,013
|
|
4.6%
|
RPO and Professional
Search
|
|
92,786
|
|
|
|
|
77,144
|
|
20.3%
|
|
|
330,143
|
|
|
|
|
273,162
|
|
20.9%
|
|
Total fee
revenue
|
|
490,756
|
|
|
|
|
475,364
|
|
3.2%
|
|
|
1,926,033
|
|
|
|
|
1,767,217
|
|
9.0%
|
Reimbursed
out-of-pocket engagement expenses
|
|
11,779
|
|
|
|
|
13,000
|
|
(9.4%)
|
|
|
47,829
|
|
|
|
|
52,302
|
|
(8.6%)
|
|
Total
revenue
|
$
|
502,535
|
|
|
|
$
|
488,364
|
|
2.9%
|
|
$
|
1,973,862
|
|
|
|
$
|
1,819,519
|
|
8.5%
|
|
Operating income
(loss):
|
|
|
|
Margin
|
|
|
|
|
Margin
|
|
|
|
|
Margin
|
|
|
|
|
Margin
|
Executive
Search:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
28,316
|
|
24.9%
|
|
$
|
33,880
|
|
30.2%
|
|
$
|
120,754
|
|
26.5%
|
|
$
|
100,397
|
|
24.6%
|
|
EMEA
|
|
8,161
|
|
18.0%
|
|
|
6,419
|
|
14.1%
|
|
|
29,974
|
|
16.4%
|
|
|
26,768
|
|
15.4%
|
|
Asia
Pacific
|
|
5,027
|
|
20.6%
|
|
|
5,614
|
|
22.8%
|
|
|
24,364
|
|
23.4%
|
|
|
18,425
|
|
19.1%
|
|
Latin
America
|
|
538
|
|
7.1%
|
|
|
1,061
|
|
12.4%
|
|
|
3,998
|
|
12.5%
|
|
|
4,022
|
|
13.1%
|
Total Executive
Search
|
|
42,042
|
|
22.0%
|
|
|
46,974
|
|
24.6%
|
|
|
179,090
|
|
23.1%
|
|
|
149,612
|
|
21.1%
|
Advisory
|
|
29,991
|
|
14.5%
|
|
|
28,076
|
|
13.5%
|
|
|
5,617
|
|
0.7%
|
|
|
100,535
|
|
12.8%
|
RPO and Professional
Search
|
|
14,547
|
|
15.7%
|
|
|
11,669
|
|
15.1%
|
|
|
50,884
|
|
15.4%
|
|
|
39,396
|
|
14.4%
|
Corporate
|
|
(24,305)
|
|
|
|
|
(22,522)
|
|
|
|
|
(94,765)
|
|
|
|
|
(81,097)
|
|
|
|
Total operating
income
|
$
|
62,275
|
|
12.7%
|
|
$
|
64,197
|
|
13.5%
|
|
$
|
140,826
|
|
7.3%
|
|
$
|
208,446
|
|
11.8%
|
KORN FERRY AND
SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except per share amounts)
|
|
|
|
April
30,
|
|
April
30,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
626,360
|
|
$
|
520,848
|
Marketable
securities
|
|
|
8,288
|
|
|
14,293
|
Receivables due from
clients, net of allowance for doubtful accounts of $21,582 and
$17,845 at April 30, 2019 and 2018, respectively
|
|
|
404,857
|
|
|
384,996
|
Income taxes and
other receivables
|
|
|
26,767
|
|
|
29,089
|
Unearned
compensation
|
|
|
42,003
|
|
|
37,333
|
Prepaid expenses and
other assets
|
|
|
28,535
|
|
|
27,700
|
Total current
assets
|
|
|
1,136,810
|
|
|
1,014,259
|
|
|
|
|
|
|
|
Marketable
securities, non-current
|
|
|
132,463
|
|
|
122,792
|
Property and
equipment, net
|
|
|
131,505
|
|
|
119,901
|
Cash surrender value
of company owned life insurance policies, net of loans
|
|
|
126,000
|
|
|
120,087
|
Deferred income
taxes
|
|
|
43,220
|
|
|
25,520
|
Goodwill
|
|
|
578,298
|
|
|
584,222
|
Intangible assets,
net
|
|
|
82,948
|
|
|
203,216
|
Unearned
compensation, non-current
|
|
|
80,924
|
|
|
78,295
|
Investments and other
assets
|
|
|
22,684
|
|
|
19,622
|
Total
assets
|
|
$
|
2,334,852
|
|
$
|
2,287,914
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
39,156
|
|
$
|
35,196
|
Income taxes
payable
|
|
|
21,145
|
|
|
23,034
|
Compensation and
benefits payable
|
|
|
328,610
|
|
|
304,980
|
Current portion of
long-term debt
|
|
|
-
|
|
|
24,911
|
Other accrued
liabilities
|
|
|
162,047
|
|
|
170,339
|
Total current
liabilities
|
|
|
550,958
|
|
|
558,460
|
|
|
|
|
|
|
|
Deferred compensation
and other retirement plans
|
|
|
257,635
|
|
|
227,729
|
Long-term
debt
|
|
|
222,878
|
|
|
211,311
|
Deferred tax
liabilities
|
|
|
1,103
|
|
|
9,105
|
Other
liabilities
|
|
|
58,891
|
|
|
61,694
|
Total
liabilities
|
|
|
1,091,465
|
|
|
1,068,299
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Common stock: $0.01
par value, 150,000 shares authorized, 72,442 and 71,631 shares
issued and 56,431 and 56,517 shares outstanding at April 30, 2019
and 2018, respectively
|
|
|
656,463
|
|
|
683,942
|
Retained
earnings
|
|
|
660,845
|
|
|
572,800
|
Accumulated other
comprehensive loss, net
|
|
|
(76,652)
|
|
|
(40,135)
|
Total Korn Ferry
stockholders' equity
|
|
|
1,240,656
|
|
|
1,216,607
|
Noncontrolling
interest
|
|
|
2,731
|
|
|
3,008
|
Total stockholders'
equity
|
|
|
1,243,387
|
|
|
1,219,615
|
Total liabilities and
stockholders' equity
|
|
$
|
2,334,852
|
|
$
|
2,287,914
|
KORN FERRY AND
SUBSIDIARIES
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(in thousands,
except per share amounts)
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
April
30,
|
|
April
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Net income
attributable to Korn Ferry
|
|
$
|
50,264
|
|
$
|
41,160
|
|
$
|
102,651
|
|
$
|
133,779
|
|
Net income
attributable to non-controlling interest
|
|
|
363
|
|
|
1,149
|
|
|
2,145
|
|
|
2,118
|
|
Net
income
|
|
|
50,627
|
|
|
42,309
|
|
|
104,796
|
|
|
135,897
|
|
Income tax
provision
|
|
|
15,401
|
|
|
15,988
|
|
|
29,544
|
|
|
70,133
|
|
Equity in
earnings of unconsolidated subsidiaries, net
|
|
|
(120)
|
|
|
(110)
|
|
|
(311)
|
|
|
(297)
|
|
Income before
provision for income taxes and equity of unconsolidated
subsidiaries
|
|
|
65,908
|
|
|
58,187
|
|
|
134,029
|
|
|
205,733
|
|
Other (income)
loss, net
|
|
|
(7,802)
|
|
|
3,192
|
|
|
(10,094)
|
|
|
(11,119)
|
|
Interest
Expense
|
|
|
4,169
|
|
|
2,818
|
|
|
16,891
|
|
|
13,832
|
|
Operating
income
|
|
|
62,275
|
|
|
64,197
|
|
|
140,826
|
|
|
208,446
|
|
Depreciation
and amortization
|
|
|
11,999
|
|
|
11,707
|
|
|
46,489
|
|
|
48,588
|
|
Other income
(loss), net
|
|
|
7,802
|
|
|
(3,192)
|
|
|
10,094
|
|
|
11,119
|
|
Equity in
earnings of unconsolidated subsidiaries, net
|
|
|
120
|
|
|
110
|
|
|
311
|
|
|
297
|
|
EBITDA
|
|
|
82,196
|
|
|
72,822
|
|
|
197,720
|
|
|
268,450
|
|
Restructuring
charges, net (1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
78
|
|
Integration/acquisition costs (2)
|
|
|
-
|
|
|
2,776
|
|
|
6,746
|
|
|
9,430
|
|
Tradename
write-offs (3)
|
|
|
-
|
|
|
-
|
|
|
106,555
|
|
|
-
|
|
Adjusted EBITDA
|
|
$
|
82,196
|
|
$
|
75,598
|
|
$
|
311,021
|
|
$
|
277,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
12.7%
|
|
|
13.5%
|
|
|
7.3%
|
|
|
11.8%
|
|
Depreciation
and amortization
|
|
|
2.4%
|
|
|
2.5%
|
|
|
2.4%
|
|
|
2.8%
|
|
Other income
(loss), net
|
|
|
1.6%
|
|
|
(0.7%)
|
|
|
0.6%
|
|
|
0.6%
|
|
Equity in
earnings of unconsolidated subsidiaries, net
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
EBITDA margin
|
|
|
16.7%
|
|
|
15.3%
|
|
|
10.3%
|
|
|
15.2%
|
|
Restructuring
charges, net (1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Integration/acquisition costs (2)
|
|
|
-
|
|
|
0.6%
|
|
|
0.4%
|
|
|
0.5%
|
|
Tradename
write-offs (3)
|
|
|
-
|
|
|
-
|
|
|
5.4%
|
|
|
-
|
|
Adjusted EBITDA margin
|
|
|
16.7%
|
|
|
15.9%
|
|
|
16.1%
|
|
|
15.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn Ferry
|
|
$
|
50,264
|
|
$
|
41,160
|
|
$
|
102,651
|
|
$
|
133,779
|
|
Restructuring
charges, net (1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
78
|
|
Integration/acquisition costs (2)
|
|
|
-
|
|
|
2,776
|
|
|
6,746
|
|
|
9,430
|
|
Tradename
write-offs (3)
|
|
|
-
|
|
|
-
|
|
|
106,555
|
|
|
-
|
|
Tax effect on
the adjusted items (4)
|
|
|
(598)
|
|
|
(541)
|
|
|
(28,094)
|
|
|
(2,314)
|
|
Tax effect on
impact of new tax law (5)
|
|
|
-
|
|
|
2,237
|
|
|
-
|
|
|
13,582
|
|
Adjusted net income attributable to Korn Ferry
|
|
$
|
49,666
|
|
$
|
45,632
|
|
$
|
187,858
|
|
$
|
154,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per common share
|
|
$
|
0.90
|
|
$
|
0.74
|
|
$
|
1.84
|
|
$
|
2.39
|
|
Restructuring
charges, net (1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Integration/acquisition costs (2)
|
|
|
-
|
|
|
0.05
|
|
|
0.12
|
|
|
0.17
|
|
Tradename
write-offs (3)
|
|
|
-
|
|
|
-
|
|
|
1.93
|
|
|
-
|
|
Tax effect on
the adjusted items (4)
|
|
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.53)
|
|
|
(0.04)
|
|
Tax effect on
impact of new tax law (5)
|
|
|
-
|
|
|
0.04
|
|
|
-
|
|
|
0.24
|
|
Adjusted basic earnings per share
|
|
$
|
0.89
|
|
$
|
0.82
|
|
$
|
3.36
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per common share
|
|
$
|
0.89
|
|
$
|
0.73
|
|
$
|
1.81
|
|
$
|
2.35
|
|
Restructuring
charges, net (1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Integration/acquisition costs (2)
|
|
|
-
|
|
|
0.05
|
|
|
0.12
|
|
|
0.17
|
|
Tradename
write-offs (3)
|
|
|
-
|
|
|
-
|
|
|
1.88
|
|
|
-
|
|
Tax effect on
the adjusted items (4)
|
|
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.50)
|
|
|
(0.04)
|
|
Tax effect on
impact of new tax law (5)
|
|
|
-
|
|
|
0.03
|
|
|
-
|
|
|
0.24
|
|
Adjusted diluted earnings per share
|
|
$
|
0.88
|
|
$
|
0.80
|
|
$
|
3.31
|
|
$
|
2.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 charges, net, integration/acquisition costs and
tradename write-offs.
|
(5)
|
The tax impact due to
provisional tax charge recorded as a result of the Tax
Act.
|
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
April 30, 2019
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
|
$
|
113,651
|
|
$
|
45,307
|
|
$
|
24,373
|
|
$
|
7,557
|
|
$
|
190,888
|
|
$
|
207,082
|
|
$
|
92,786
|
|
$
|
-
|
|
$
|
490,756
|
Total
revenue
|
|
$
|
116,939
|
|
$
|
46,107
|
|
$
|
24,726
|
|
$
|
7,572
|
|
$
|
195,344
|
|
$
|
211,377
|
|
$
|
95,814
|
|
$
|
-
|
|
$
|
502,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn Ferry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
50,264
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
363
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,802)
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,169
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(120)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,401
|
Operating income
(loss)
|
|
$
|
28,316
|
|
$
|
8,161
|
|
$
|
5,027
|
|
$
|
538
|
|
$
|
42,042
|
|
$
|
29,991
|
|
$
|
14,547
|
|
$
|
(24,305)
|
|
|
62,275
|
Depreciation and
amortization
|
|
|
973
|
|
|
387
|
|
|
345
|
|
|
105
|
|
|
1,810
|
|
|
7,355
|
|
|
930
|
|
|
1,904
|
|
|
11,999
|
Other income,
net
|
|
|
5,433
|
|
|
44
|
|
|
163
|
|
|
59
|
|
|
5,699
|
|
|
1,577
|
|
|
165
|
|
|
361
|
|
|
7,802
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
120
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
120
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
120
|
EBITDA and Adjusted
EBITDA
|
|
$
|
34,842
|
|
$
|
8,592
|
|
$
|
5,535
|
|
$
|
702
|
|
$
|
49,671
|
|
$
|
38,923
|
|
$
|
15,642
|
|
$
|
(22,040)
|
|
$
|
82,196
|
EBITDA and Adjusted
EBITDA margin
|
|
|
30.7%
|
|
|
19.0%
|
|
|
22.7%
|
|
|
9.3%
|
|
|
26.0%
|
|
|
18.8%
|
|
|
16.9%
|
|
|
|
|
|
16.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, 2018
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
|
$
|
112,005
|
|
$
|
45,476
|
|
$
|
24,612
|
|
$
|
8,576
|
|
$
|
190,669
|
|
$
|
207,551
|
|
$
|
77,144
|
|
$
|
-
|
|
$
|
475,364
|
Total
revenue
|
|
$
|
115,394
|
|
$
|
46,340
|
|
$
|
25,053
|
|
$
|
8,603
|
|
$
|
195,390
|
|
$
|
211,912
|
|
$
|
81,062
|
|
$
|
-
|
|
$
|
488,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn Ferry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
41,160
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,149
|
Other loss,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,192
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,818
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(110)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,988
|
Operating income
(loss)
|
|
$
|
33,880
|
|
$
|
6,419
|
|
$
|
5,614
|
|
$
|
1,061
|
|
$
|
46,974
|
|
$
|
28,076
|
|
$
|
11,669
|
|
$
|
(22,522)
|
|
|
64,197
|
Depreciation and
amortization
|
|
|
1,007
|
|
|
344
|
|
|
356
|
|
|
124
|
|
|
1,831
|
|
|
7,417
|
|
|
741
|
|
|
1,718
|
|
|
11,707
|
Other (loss) income,
net
|
|
|
(312)
|
|
|
32
|
|
|
(11)
|
|
|
82
|
|
|
(209)
|
|
|
847
|
|
|
142
|
|
|
(3,972)
|
|
|
(3,192)
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
110
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
110
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
110
|
EBITDA
|
|
|
34,685
|
|
|
6,795
|
|
|
5,959
|
|
|
1,267
|
|
|
48,706
|
|
|
36,340
|
|
|
12,552
|
|
|
(24,776)
|
|
|
72,822
|
EBITDA
margin
|
|
|
31.0%
|
|
|
14.9%
|
|
|
24.2%
|
|
|
14.8%
|
|
|
25.5%
|
|
|
17.5%
|
|
|
16.3%
|
|
|
|
|
|
15.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration/acquisition costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,696
|
|
|
-
|
|
|
80
|
|
|
2,776
|
Adjusted
EBITDA
|
|
$
|
34,685
|
|
$
|
6,795
|
|
$
|
5,959
|
|
$
|
1,267
|
|
$
|
48,706
|
|
$
|
39,036
|
|
$
|
12,552
|
|
$
|
(24,696)
|
|
$
|
75,598
|
Adjusted EBITDA
margin
|
|
|
31.0%
|
|
|
14.9%
|
|
|
24.2%
|
|
|
14.8%
|
|
|
25.5%
|
|
|
18.8%
|
|
|
16.3%
|
|
|
|
|
|
15.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KORN FERRY AND
SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME AND OPERATING INCOME (GAAP) TO
|
EBITDA AND
ADJUSTED EBITDA (NON-GAAP)
|
(in
thousands)
|
|
|
|
Year Ended April
30, 2019
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
|
$
|
455,826
|
|
$
|
182,829
|
|
$
|
104,291
|
|
$
|
31,896
|
|
$
|
774,842
|
|
$
|
821,048
|
|
$
|
330,143
|
|
$
|
-
|
|
$
|
1,926,033
|
Total
revenue
|
|
$
|
469,743
|
|
$
|
186,131
|
|
$
|
105,543
|
|
$
|
31,960
|
|
$
|
793,377
|
|
$
|
838,620
|
|
$
|
341,865
|
|
$
|
-
|
|
$
|
1,973,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn Ferry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
102,651
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,145
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,094)
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,891
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(311)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,544
|
Operating income
(loss)
|
|
$
|
120,754
|
|
$
|
29,974
|
|
$
|
24,364
|
|
$
|
3,998
|
|
$
|
179,090
|
|
$
|
5,617
|
|
$
|
50,884
|
|
$
|
(94,765)
|
|
|
140,826
|
Depreciation and
amortization
|
|
|
3,890
|
|
|
1,254
|
|
|
1,428
|
|
|
410
|
|
|
6,982
|
|
|
29,057
|
|
|
3,255
|
|
|
7,195
|
|
|
46,489
|
Other income (loss),
net
|
|
|
6,388
|
|
|
432
|
|
|
281
|
|
|
322
|
|
|
7,423
|
|
|
3,198
|
|
|
268
|
|
|
(795)
|
|
|
10,094
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
311
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
311
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
311
|
EBITDA
|
|
|
131,343
|
|
|
31,660
|
|
|
26,073
|
|
|
4,730
|
|
|
193,806
|
|
|
37,872
|
|
|
54,407
|
|
|
(88,365)
|
|
|
197,720
|
EBITDA
margin
|
|
|
28.8%
|
|
|
17.3%
|
|
|
25.0%
|
|
|
14.8%
|
|
|
25.0%
|
|
|
4.6%
|
|
|
16.5%
|
|
|
|
|
|
10.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration/acquisition costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,559
|
|
|
-
|
|
|
187
|
|
|
6,746
|
Tradename
write-offs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
106,555
|
|
|
-
|
|
|
-
|
|
|
106,555
|
Adjusted
EBITDA
|
|
$
|
131,343
|
|
$
|
31,660
|
|
$
|
26,073
|
|
$
|
4,730
|
|
$
|
193,806
|
|
$
|
150,986
|
|
$
|
54,407
|
|
$
|
(88,178)
|
|
$
|
311,021
|
Adjusted EBITDA
margin
|
|
|
28.8%
|
|
|
17.3%
|
|
|
25.0%
|
|
|
14.8%
|
|
|
25.0%
|
|
|
18.4%
|
|
|
16.5%
|
|
|
|
|
|
16.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended April
30, 2018
|
|
|
Executive
Search
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
EMEA
|
|
Asia
Pacific
|
|
Latin
America
|
|
Subtotal
|
|
Advisory
|
|
RPO and
Professional
Search
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
|
$
|
408,098
|
|
$
|
173,725
|
|
$
|
96,595
|
|
$
|
30,624
|
|
$
|
709,042
|
|
$
|
785,013
|
|
$
|
273,162
|
|
$
|
-
|
|
$
|
1,767,217
|
Total
revenue
|
|
$
|
421,260
|
|
$
|
177,234
|
|
$
|
98,062
|
|
$
|
30,717
|
|
$
|
727,273
|
|
$
|
801,005
|
|
$
|
291,241
|
|
$
|
-
|
|
$
|
1,819,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Korn Ferry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
133,779
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,118
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,119)
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,832
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(297)
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,133
|
Operating income
(loss)
|
|
$
|
100,397
|
|
$
|
26,768
|
|
$
|
18,425
|
|
$
|
4,022
|
|
$
|
149,612
|
|
$
|
100,535
|
|
$
|
39,396
|
|
$
|
(81,097)
|
|
|
208,446
|
Depreciation and
amortization
|
|
|
3,930
|
|
|
1,689
|
|
|
1,408
|
|
|
455
|
|
|
7,482
|
|
|
31,527
|
|
|
3,054
|
|
|
6,525
|
|
|
48,588
|
Other income,
net
|
|
|
845
|
|
|
168
|
|
|
373
|
|
|
181
|
|
|
1,567
|
|
|
2,501
|
|
|
152
|
|
|
6,899
|
|
|
11,119
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
297
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
297
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
297
|
EBITDA
|
|
|
105,469
|
|
|
28,625
|
|
|
20,206
|
|
|
4,658
|
|
|
158,958
|
|
|
134,563
|
|
|
42,602
|
|
|
(67,673)
|
|
|
268,450
|
EBITDA
margin
|
|
|
25.8%
|
|
|
16.5%
|
|
|
20.9%
|
|
|
15.2%
|
|
|
22.4%
|
|
|
17.1%
|
|
|
15.6%
|
|
|
|
|
|
15.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges
(recoveries), net
|
|
|
-
|
|
|
-
|
|
|
313
|
|
|
-
|
|
|
313
|
|
|
(241)
|
|
|
6
|
|
|
-
|
|
|
78
|
Integration/acquisition costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
9,151
|
|
|
-
|
|
|
279
|
|
|
9,430
|
Adjusted
EBITDA
|
|
$
|
105,469
|
|
$
|
28,625
|
|
$
|
20,519
|
|
$
|
4,658
|
|
$
|
159,271
|
|
$
|
143,473
|
|
$
|
42,608
|
|
$
|
(67,394)
|
|
$
|
277,958
|
Adjusted EBITDA
margin
|
|
|
25.8%
|
|
|
16.5%
|
|
|
21.2%
|
|
|
15.2%
|
|
|
22.5%
|
|
|
18.3%
|
|
|
15.6%
|
|
|
|
|
|
15.7%
|
View original
content:http://www.prnewswire.com/news-releases/korn-ferry-announces-fourth-quarter-and-fiscal-2019-results-of-operations-300872376.html
SOURCE Korn Ferry