Korn Ferry Announces First Quarter Fiscal 2021 Results of Operations
Korn Ferry reported Q1 FY'21 fee revenue of $344.1 million, a 29% decrease year-over-year, largely attributed to COVID-19 impacts. The company experienced a net loss of $30.8 million and an operating loss of $43.8 million, with an operating margin of (12.7%). Adjusted EBITDA stood at $10.6 million (margin of 3.1%). CEO Gary D. Burnison noted early signs of recovery, citing improving new business metrics. However, due to ongoing pandemic uncertainties, specific revenue or earnings guidance for Q2 FY'21 was not provided.
- Early signs of recovery indicated by improved new business metrics in July compared to previous months.
- Fee revenue decreased by 29% year-over-year, down to $344.1 million.
- Net loss of $30.8 million compared to net income of $43.0 million in Q1 FY'20.
- Operating loss of $43.8 million with an operating margin of (12.7%).
- Adjusted EBITDA margin decreased to 3.1% from 15.5%.
LOS ANGELES, Sept. 3, 2020 /PRNewswire/ --
FY' 21 First Quarter Performance
- Korn Ferry reports fee revenue of
$344.1 million in Q1 FY'21, a decrease of29% (decrease of27.8% on a constant currency basis) from Q1 FY'20. - Net loss attributable to Korn Ferry was
$30.8 million in Q1 FY'21. - Operating loss was
$43.8 million in Q1 FY'21 with an operating margin of (12.7% ). Adjusted EBITDA was$10.6 million with an Adjusted EBITDA margin of3.1% . - Q1 FY'21 diluted loss per share and adjusted diluted loss per share was
$0.58 and$0.19 , respectively.
Korn Ferry (NYSE: KFY), a global organizational consulting firm, today announced first quarter fee revenue of
"It's been nearly six months since the pandemic was declared, and the world temporarily paused. Certainly, that pause impacted our business – during the fiscal first quarter we generated
"I am incredibly proud and motivated by how we've positioned ourselves and the opportunity ahead. From the beginning our firm has faced this crisis from a position of strength when you consider our balance sheet, the depth and breadth of our solutions and the actions we've taken to protect the company and preserve its muscle. Almost every company on the planet is and will have to reimagine their business — their structure, roles, responsibilities and how they compensate, engage, and develop their workforce. They will need to hire learning-agile, diverse talent and do so in a more inclusive ethos and in an increasingly digital world. This is in essence Korn Ferry's businesses – to enable people and organizations to exceed their potential."
Selected Financial Results
(dollars in millions, except per share amounts) (a)
First Quarter | |||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Fee revenue | $ | 344.1 | $ | 484.5 | |||||||||||||
Total revenue | $ | 346.9 | $ | 496.2 | |||||||||||||
Operating (loss) income | $ | (43.8) | $ | 60.3 | |||||||||||||
Operating margin | ( | ||||||||||||||||
Net (loss) income attributable to Korn Ferry | $ | (30.8) | $ | 43.0 | |||||||||||||
Basic (loss) earnings per share | $ | (0.58) | $ | 0.77 | |||||||||||||
Diluted (loss) earnings per share | $ | (0.58) | $ | 0.76 | |||||||||||||
EBITDA Results (b): | First Quarter | ||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
EBITDA | $ | (17.6) | $ | 74.9 | |||||||||||||
EBITDA margin | ( | ||||||||||||||||
Adjusted Results (c): | First Quarter | ||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Adjusted EBITDA (b) | $ | 10.6 | $ | 74.9 | |||||||||||||
Adjusted EBITDA margin (b) | |||||||||||||||||
Adjusted net (loss) income attributable to Korn Ferry | $ | (10.2) | $ | 43.0 | |||||||||||||
Adjusted basic (loss) earnings per share | $ | (0.19) | $ | 0.77 | |||||||||||||
Adjusted diluted (loss) earnings per share | $ | (0.19) | $ | 0.76 | |||||||||||||
(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 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): | ||||||||||||||||
First Quarter | |||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Integration/acquisition costs | $ | 0.7 | $ | — | |||||||||||||
Restructuring charges, net | $ | 27.5 | $ | — | |||||||||||||
Fee revenue was
Actions taken by various government and other authoritative bodies in response to the COVID-19 pandemic caused a severe contraction in economic activity during the quarter which translated into the decrease in fee revenue. This decline in fee revenue was partially offset by savings associated with actions taken to align our cost structure with the lower level of business demand, and resulted in a net loss attributable to Korn Ferry of
Operating margin was (
Adjusted EBITDA margin was
Results by Segment
Selected Consulting Data(a)
(dollars in millions) (b)
First Quarter | ||||||||||||||||||||||
FY'21 | FY'20 | |||||||||||||||||||||
Fee revenue | $ | 99.3 | $ | 137.5 | ||||||||||||||||||
Total revenue | $ | 99.6 | $ | 141.3 | ||||||||||||||||||
Operating (loss) income | $ | (10.9) | $ | 11.8 | ||||||||||||||||||
Operating margin | ( | |||||||||||||||||||||
Ending number of consultants and execution staff (c) | 1,511 | 1,928 | ||||||||||||||||||||
Hours worked in thousands (d) | 367 | 452 | ||||||||||||||||||||
Average billed rate (e) | $ | 271 | $ | 304 | ||||||||||||||||||
EBITDA Results (f): | First Quarter | |||||||||||||||||||||
FY'21 | FY'20 | |||||||||||||||||||||
EBITDA | $ | (6.1) | $ | 16.7 | ||||||||||||||||||
EBITDA margin | ( | |||||||||||||||||||||
Adjusted Results (g): | First Quarter | |||||||||||||||||||||
FY'21 | FY'20 | |||||||||||||||||||||
Adjusted EBITDA (f) | $ | 6.6 | $ | 16.7 | ||||||||||||||||||
Adjusted EBITDA margin (f) | ||||||||||||||||||||||
(a) | In the third quarter of fiscal 2020, the Company changed the composition of its global segments. Consulting segment represents the | |||||||||||||||||||||
(b) | Numbers may not total due to rounding. | |||||||||||||||||||||
(c) | Represents number of employees originating, delivering and executing consulting services. | |||||||||||||||||||||
(d) | The number of hours worked by consultant and execution staff during the period. | |||||||||||||||||||||
(e) | The amount of fee revenue divided by the number of hours worked by consultants and executive staff. | |||||||||||||||||||||
(f) | EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures (see attached | |||||||||||||||||||||
(g) | Adjusted results are non-GAAP financial measures that adjust for the following (see attached reconciliations): | |||||||||||||||||||||
First Quarter | ||||||||||||||||||||||
FY'21 | FY'20 | |||||||||||||||||||||
Restructuring charges, net | $ | 12.7 | $ | — | ||||||||||||||||||
Fee revenue was
Operating loss was
Adjusted EBITDA was
Selected Digital Data(a)
(dollars in millions) (b)
Digital is an integrated platform that gives clients direct access to people and organizational data, insights, analytics, and digital assets that when used together, give clients a common language for all talent matters.
First Quarter | |||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Fee revenue | $ | 56.0 | $ | 58.0 | |||||||||||||
Total revenue | $ | 56.0 | $ | 58.0 | |||||||||||||
Operating (loss) income | $ | (2.6) | $ | 14.0 | |||||||||||||
Operating margin | ( | ||||||||||||||||
Ending number of consultants | 352 | 348 | |||||||||||||||
Subscription & License fee revenue | $ | 21.1 | $ | 15.4 | |||||||||||||
EBITDA Results (c): | First Quarter | ||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
EBITDA | $ | 4.5 | $ | 17.8 | |||||||||||||
EBITDA margin | |||||||||||||||||
Adjusted Results (d): |
First Quarter | ||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Adjusted EBITDA (c) | $ | 7.9 | $ | 17.8 | |||||||||||||
Adjusted EBITDA margin (c) | |||||||||||||||||
(a) | In the third quarter of fiscal 2020, the Company changed the composition of its global segments. Digital segment represents the products business that was previously included in the Advisory segment. Segment data for Q1 FY'20 has been recast to reflect the division of the Advisory segment into the Consulting and Digital segments. | ||||||||||||||||
(b) | Numbers may not total due to rounding. | ||||||||||||||||
(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 adjust for the following (see attached reconciliations): | ||||||||||||||||
First Quarter | |||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Integration/acquisition costs | $ | 0.6 | $ | — | |||||||||||||
Restructuring charges, net | $ | 2.9 | $ | — | |||||||||||||
Fee revenue was
Operating loss was
Adjusted EBITDA was
Selected Executive Search Data
(dollars in millions) (a)
First Quarter | |||||||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||||||
Fee revenue | $ | 120.1 | $ | 193.2 | |||||||||||||||||
Total revenue | $ | 120.9 | $ | 198.0 | |||||||||||||||||
Operating (loss) income | $ | (12.3) | $ | 45.6 | |||||||||||||||||
Operating margin | ( | ||||||||||||||||||||
Ending number of consultants | 510 | 569 | |||||||||||||||||||
Average number of consultants | 533 | 567 | |||||||||||||||||||
Engagements billed | 2,671 | 3,855 | |||||||||||||||||||
New engagements (b) | 1,115 | 1,695 | |||||||||||||||||||
EBITDA Results (c): |
First Quarter | ||||||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||||||
EBITDA | $ | (1.1) | $ | 48.9 | |||||||||||||||||
EBITDA margin | ( | ||||||||||||||||||||
Adjusted Results (d): |
First Quarter | ||||||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||||||
Adjusted EBITDA (c) | $ | 8.1 | $ | 48.9 | |||||||||||||||||
Adjusted EBITDA margin (c) | |||||||||||||||||||||
(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 | ||||||||||||||||||||
(d) | Adjusted results are non-GAAP financial measures that adjust for the following (see attached reconciliations): | ||||||||||||||||||||
First Quarter | |||||||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||||||
Restructuring charges, net | $ | 9.2 | $ | — | |||||||||||||||||
Fee revenue was
Operating loss was
Adjusted EBITDA was
Selected RPO and Professional Search Data
(dollars in millions) (a)
First Quarter | |||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Fee revenue | $ | 68.7 | $ | 95.8 | |||||||||||||
Total revenue | $ | 70.4 | $ | 98.9 | |||||||||||||
Operating income | $ | 2.2 | $ | 15.0 | |||||||||||||
Operating margin | |||||||||||||||||
Engagements billed (b) | 1,027 | 1,436 | |||||||||||||||
New engagements (c) | 564 | 767 | |||||||||||||||
EBITDA Results (d): | First Quarter | ||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
EBITDA | $ | 3.3 | $ | 16.1 | |||||||||||||
EBITDA margin | |||||||||||||||||
Adjusted Results (e): | First Quarter | ||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Adjusted EBITDA (d) | $ | 6.0 | $ | 16.1 | |||||||||||||
Adjusted EBITDA margin (d) | |||||||||||||||||
(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 | ||||||||||||||||
(e) | Adjusted results are non-GAAP financial measures that adjust for the following (see attached reconciliations):
| ||||||||||||||||
First Quarter | |||||||||||||||||
FY'21 | FY'20 | ||||||||||||||||
Restructuring charges, net | $ | 2.7 | $ | — | |||||||||||||
Fee revenue was
Operating income was
Outlook
Approximately two months have passed since our last earnings call, yet there remains significant uncertainty about the ultimate impact of COVID-19 on society and global economies. The pandemic, which spread across the globe during the past five to six months, continues to infect different parts of the world at varying points in time and with varying levels of intensity, including significant recurrences in a number of locations. The response also continues to be conducted at varying levels, including very local levels in many instances, with societies and economies closing and reopening at different points in time and in different ways. The mandates that governments and companies have put in place largely remain in effect including rules regarding working from home, social distancing, and severely restricted travel and in-person interaction.
Right now, governments are struggling to balance reopening and re-engaging in an effective way against the maintenance of an environment that fosters the health and safety of everyone. As there is no "playbook", this effort takes on many forms, with no clear path to success. Further, certain governments have put in place aide programs that provide financial assistance to businesses and individuals who have been dislocated by this pandemic. Whether or not these programs will remain in place or for how long remains a significant open question. The unprecedented nature of what we are currently experiencing, combined with all of the unanswered questions and ever-changing datapoints, continues to cloud the near-term predictability of our business. Consequently, and consistent with our approach to the fourth quarter of FY'20 and first quarter of FY'21, we will not issue any specific revenue or earnings guidance for the second quarter of FY'21. We plan to reassess the suspension of our guidance once we are comfortable that the coronavirus uncertainties have largely passed.
Earnings Conference Call Webcast
The earnings conference call will be held today at 12:00 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 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 as well as the expected benefits of the acquisition of the acquired companies (as defined below), the timing and expected benefits of our recently adopted restructuring plan and the magnitude and duration of the impact of the COVID-19 outbreak on our business, employees, customers and our ability to provide services in affected regions. 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 the magnitude and duration of the negative impact of the COVID-19 outbreak on our business, employees, customers and our ability to provide services in affected regions, global and local political or economic developments in or affecting countries where we have operations, competition, changes in demand for our services as a result of automation, the dependence on and costs of 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, consolidation of the industries we serve, 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, dependence on third parties for the execution of critical functions, our ability to successfully recover from a disaster or other business continuity problems, changes in our accounting estimates/assumptions, technical guidance relating to the Tax Act, treaties, or regulations on our business and our company, impairment of goodwill and other intangible assets, deferred tax assets that we may not be able to use, our indebtedness, the phase-out of the London Interbank Offered Rate, expansion of social media platforms, seasonality, ability to effect acquisition and integrate recently acquired companies, including those of Miller Heiman Group, AchieveForum, and Strategy Execution (collectively, the "acquired companies"); the ability to recognize the anticipated benefits of the acquisition of the acquired companies; the costs related to the acquisition of the acquired companies and employment liability risk. 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 (loss) income attributable to Korn Ferry, adjusted to exclude integration/acquisition costs and restructuring charges, net of income tax effect;
- Adjusted basic and diluted (loss) earnings per share, adjusted to exclude integration/acquisition costs and restructuring charges, net of income tax effect;
- Constant currency (calculated using a quarterly average) percentages that represent the percentage change that would have resulted had exchange rates in the prior period been the same as those in effect in the current period;
- EBITDA, or earnings before interest, taxes, depreciation and amortization and EBITDA margin; and
- Adjusted EBITDA, which is EBITDA further adjusted to exclude integration/acquisition costs and restructuring charges, 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 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, which are described in the footnotes in the attached reconciliations, represent 1) costs we incurred to acquire and integrate a portion of our Digital business and 2) charges we incurred to restructure the Company as a result of COVID-19. 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 (loss) income attributable to Korn Ferry, adjusted basic and diluted (loss) 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 percentages, 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 | ||||||||
Three Months Ended | ||||||||
July 31, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Fee revenue | $ | 344,097 | $ | 484,549 | ||||
Reimbursed out-of-pocket engagement expenses | 2,786 | 11,649 | ||||||
Total revenue | 346,883 | 496,198 | ||||||
Compensation and benefits | 284,012 | 328,496 | ||||||
General and administrative expenses | 47,089 | 65,807 | ||||||
Reimbursed expenses | 2,786 | 11,649 | ||||||
Cost of services | 14,269 | 17,135 | ||||||
Depreciation and amortization | 15,035 | 12,777 | ||||||
Restructuring charges, net | 27,487 | - | ||||||
Total operating expenses | 390,678 | 435,864 | ||||||
Operating (loss) income | (43,795) | 60,334 | ||||||
Other income, net | 11,162 | 1,826 | ||||||
Interest expense, net | (6,894) | (4,057) | ||||||
(Loss) income before (benefit) provision for income taxes | (39,527) | 58,103 | ||||||
Income tax (benefit) provision | (8,672) | 14,453 | ||||||
Net (loss) income | (30,855) | 43,650 | ||||||
Net loss (income) attributable to noncontrolling interest | 22 | (699) | ||||||
Net (loss) income attributable to Korn Ferry | $ | (30,833) | $ | 42,951 | ||||
(Loss) earnings per common share attributable to Korn Ferry: | ||||||||
Basic | $ | (0.58) | $ | 0.77 | ||||
Diluted | $ | (0.58) | $ | 0.76 | ||||
Weighted-average common shares outstanding: | ||||||||
Basic | 53,264 | 55,266 | ||||||
Diluted | 53,264 | 55,635 | ||||||
Cash dividends declared per share: | $ | 0.10 | $ | 0.10 | ||||
KORN FERRY AND SUBSIDIARIES | |||||||||||||||||
Three Months Ended July 31, | |||||||||||||||||
2020 | 2019 | % Change | |||||||||||||||
Fee revenue: | |||||||||||||||||
Consulting | $ | 99,318 | $ | 137,542 | ( | ||||||||||||
Digital | 55,973 | 57,984 | ( | ||||||||||||||
Executive Search: | |||||||||||||||||
North America | 69,315 | 111,722 | ( | ||||||||||||||
EMEA | 30,081 | 46,530 | ( | ||||||||||||||
Asia Pacific | 17,252 | 27,362 | ( | ||||||||||||||
Latin America | 3,495 | 7,585 | ( | ||||||||||||||
Total Executive Search | 120,143 | 193,199 | ( | ||||||||||||||
RPO and Professional Search | 68,663 | 95,824 | ( | ||||||||||||||
Total fee revenue | 344,097 | 484,549 | ( | ||||||||||||||
Reimbursed out-of-pocket engagement expenses | 2,786 | 11,649 | ( | ||||||||||||||
Total revenue | $ | 346,883 | $ | 496,198 | ( | ||||||||||||
Operating (loss) income: | Margin | Margin | |||||||||||||||
Consulting | $ | (10,927) | ( | $ | 11,783 | ||||||||||||
Digital | (2,627) | ( | 14,008 | ||||||||||||||
Executive Search: | |||||||||||||||||
North America | (5,735) | ( | 30,322 | ||||||||||||||
EMEA | (6,219) | ( | 7,311 | ||||||||||||||
Asia Pacific | 861 | 6,993 | |||||||||||||||
Latin America | (1,217) | ( | 1,010 | ||||||||||||||
Total Executive Search | (12,310) | ( | 45,636 | ||||||||||||||
RPO and Professional Search | 2,165 | 15,041 | |||||||||||||||
Corporate | (20,096) | (26,134) | |||||||||||||||
Total operating (loss) income | $ | (43,795) | ( | $ | 60,334 | ||||||||||||
KORN FERRY AND SUBSIDIARIES | ||||||||
July 31, | April 30, | |||||||
2020 | 2020 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 542,786 | $ | 689,244 | ||||
Marketable securities | 49,870 | 41,951 | ||||||
Receivables due from clients, net of allowance for doubtful accounts of | 375,157 | 397,165 | ||||||
Income taxes and other receivables | 42,243 | 38,755 | ||||||
Unearned compensation | 48,243 | 43,117 | ||||||
Prepaid expenses and other assets | 34,983 | 26,851 | ||||||
Total current assets | 1,093,282 | 1,237,083 | ||||||
Marketable securities, non-current | 140,330 | 132,134 | ||||||
Property and equipment, net | 139,930 | 142,728 | ||||||
Operating lease right-of-use assets, net | 191,608 | 195,077 | ||||||
Cash surrender value of company-owned life insurance policies, net of loans | 148,382 | 146,408 | ||||||
Deferred income taxes | 51,686 | 55,479 | ||||||
Goodwill | 619,239 | 613,943 | ||||||
Intangible assets, net | 107,202 | 111,926 | ||||||
Unearned compensation, non-current | 98,701 | 79,510 | ||||||
Investments and other assets | 27,743 | 29,540 | ||||||
Total assets | $ | 2,618,103 | $ | 2,743,828 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Accounts payable | $ | 36,975 | $ | 45,684 | ||||
Income taxes payable | 10,312 | 21,158 | ||||||
Compensation and benefits payable | 184,087 | 280,911 | ||||||
Operating lease liability, current | 55,119 | 54,851 | ||||||
Other accrued liabilities | 204,838 | 221,603 | ||||||
Total current liabilities | 491,331 | 624,207 | ||||||
Deferred compensation and other retirement plans | 304,593 | 289,136 | ||||||
Operating lease liability, non-current | 175,685 | 180,766 | ||||||
Long-term debt | 394,303 | 394,144 | ||||||
Deferred tax liabilities | 637 | 1,056 | ||||||
Other liabilities | 33,533 | 30,828 | ||||||
Total liabilities | 1,400,082 | 1,520,137 | ||||||
Stockholders' equity | ||||||||
Common stock: | 590,897 | 585,560 | ||||||
Retained earnings | 706,353 | 742,993 | ||||||
Accumulated other comprehensive loss, net | (81,592) | (107,172) | ||||||
Total Korn Ferry stockholders' equity | 1,215,658 | 1,221,381 | ||||||
Noncontrolling interest | 2,363 | 2,310 | ||||||
Total stockholders' equity | 1,218,021 | 1,223,691 | ||||||
Total liabilities and stockholders' equity | $ | 2,618,103 | $ | 2,743,828 | ||||
KORN FERRY AND SUBSIDIARIES | ||||||||
Three Months Ended | ||||||||
July 31, | ||||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
Net (loss) income attributable to Korn Ferry | $ | (30,833) | $ | 42,951 | ||||
Net (loss) income attributable to non-controlling interest | (22) | 699 | ||||||
Net (loss) income | (30,855) | 43,650 | ||||||
Income tax (benefit) provision | (8,672) | 14,453 | ||||||
(Loss) income before provision for income taxes | (39,527) | 58,103 | ||||||
Other (income), net | (11,162) | (1,826) | ||||||
Interest expense, net | 6,894 | 4,057 | ||||||
Operating (loss) income | (43,795) | 60,334 | ||||||
Depreciation and amortization | 15,035 | 12,777 | ||||||
Other income, net | 11,162 | 1,826 | ||||||
EBITDA | (17,598) | 74,937 | ||||||
Integration/acquisition costs (1) | 737 | - | ||||||
Restructuring charges, net (2) | 27,487 | - | ||||||
Adjusted EBITDA | $ | 10,626 | $ | 74,937 | ||||
Operating margin | ( | |||||||
Depreciation and amortization | ||||||||
Other income, net | ||||||||
EBITDA margin | ( | |||||||
Integration/acquisition costs (1) | - | |||||||
Restructuring charges, net (2) | - | |||||||
Adjusted EBITDA margin | ||||||||
Net (loss) income attributable to Korn Ferry | $ | (30,833) | $ | 42,951 | ||||
Integration/acquisition costs (1) | 737 | - | ||||||
Restructuring charges, net (2) | 27,487 | - | ||||||
Tax effect on the adjusted items (3) | (7,604) | - | ||||||
Adjusted net (loss) income attributable to Korn Ferry | $ | (10,213) | $ | 42,951 | ||||
Basic (loss) earnings per common share | $ | (0.58) | $ | 0.77 | ||||
Integration/acquisition costs (1) | 0.01 | - | ||||||
Restructuring charges, net (2) | 0.52 | - | ||||||
Tax effect on the adjusted items (3) | (0.14) | - | ||||||
Adjusted basic (loss) earnings per share | $ | (0.19) | $ | 0.77 | ||||
Diluted (loss) earnings per common share | $ | (0.58) | $ | 0.76 | ||||
Integration/acquisition costs (1) | 0.01 | - | ||||||
Restructuring charges, net (2) | 0.52 | - | ||||||
Tax effect on the adjusted items (3) | (0.14) | - | ||||||
Adjusted diluted (loss) earnings per share | $ | (0.19) | $ | 0.76 | ||||
Explanation of Non-GAAP Adjustments | ||||||||
(1) | Costs associated with previous acquisitions, such as legal and professional fees, retention awards and the on-going integration expenses to combine the companies. | |||||||
(2) | Restructuring charges we incurred to rationalize our cost structure by eliminating redundant positions as a result of COVID-19. | |||||||
(3) | Tax effect on integration/acquisition costs and restructuring charges, net. | |||||||
KORN FERRY AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended July 31, 2020 | ||||||||||||||||||||||||||||||||||||||||
Executive Search | ||||||||||||||||||||||||||||||||||||||||
Consulting | Digital | North America | EMEA | Asia Pacific | Latin America | Subtotal | RPO and Professional Search | Corporate | Consolidated | |||||||||||||||||||||||||||||||
Fee revenue | $ | 99,318 | $ | 55,973 | $ | 69,315 | $ | 30,081 | $ | 17,252 | $ | 3,495 | $ | 120,143 | $ | 68,663 | $ | - | $ | 344,097 | ||||||||||||||||||||
Total revenue | $ | 99,590 | $ | 56,022 | $ | 69,856 | $ | 30,195 | $ | 17,340 | $ | 3,495 | $ | 120,886 | $ | 70,385 | $ | - | $ | 346,883 | ||||||||||||||||||||
Net loss attributable to Korn Ferry | $ | (30,833) | ||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | (22) | |||||||||||||||||||||||||||||||||||||||
Other income net | (11,162) | |||||||||||||||||||||||||||||||||||||||
Interest expense, net | 6,894 | |||||||||||||||||||||||||||||||||||||||
Income tax benefit | (8,672) | |||||||||||||||||||||||||||||||||||||||
Operating (loss) income | $ | (10,927) | $ | (2,627) | $ | (5,735) | $ | (6,219) | $ | 861 | $ | (1,217) | $ | (12,310) | $ | 2,165 | $ | (20,096) | (43,795) | |||||||||||||||||||||
Depreciation and amortization | 4,009 | 6,726 | 730 | 362 | 275 | 202 | 1,569 | 940 | 1,791 | 15,035 | ||||||||||||||||||||||||||||||
Other income, net | 788 | 418 | 9,342 | 19 | 226 | 48 | 9,635 | 196 | 125 | 11,162 | ||||||||||||||||||||||||||||||
EBITDA | (6,130) | 4,517 | 4,337 | (5,838) | 1,362 | (967) | (1,106) | 3,301 | (18,180) | (17,598) | ||||||||||||||||||||||||||||||
EBITDA margin | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Integration/acquisition costs | - | 556 | - | - | - | - | - | - | 181 | 737 | ||||||||||||||||||||||||||||||
Restructuring, charges, net | 12,734 | 2,870 | 975 | 7,548 | 232 | 405 | 9,160 | 2,723 | - | 27,487 | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 6,604 | $ | 7,943 | $ | 5,312 | $ | 1,710 | $ | 1,594 | $ | (562) | $ | 8,054 | $ | 6,024 | $ | (17,999) | $ | 10,626 | ||||||||||||||||||||
Adjusted EBITDA margin | ( | |||||||||||||||||||||||||||||||||||||||
Three Months Ended July 31, 2019 | ||||||||||||||||||||||||||||||||||||||||
Executive Search | ||||||||||||||||||||||||||||||||||||||||
Consulting | Digital | North America | EMEA | Asia Pacific | Latin America | Subtotal | RPO and Professional Search | Corporate | Consolidated | |||||||||||||||||||||||||||||||
Fee revenue | $ | 137,542 | $ | 57,984 | $ | 111,722 | $ | 46,530 | $ | 27,362 | $ | 7,585 | $ | 193,199 | $ | 95,824 | $ | - | $ | 484,549 | ||||||||||||||||||||
Total revenue | $ | 141,336 | $ | 57,984 | $ | 115,446 | $ | 47,312 | $ | 27,668 | $ | 7,587 | $ | 198,013 | $ | 98,865 | $ | - | $ | 496,198 | ||||||||||||||||||||
Net income attributable to Korn Ferry | $ | 42,951 | ||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 699 | |||||||||||||||||||||||||||||||||||||||
Other income, net | (1,826) | |||||||||||||||||||||||||||||||||||||||
Interest expense, net | 4,057 | |||||||||||||||||||||||||||||||||||||||
Income tax provision | 14,453 | |||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 11,783 | $ | 14,008 | $ | 30,322 | $ | 7,311 | $ | 6,993 | $ | 1,010 | $ | 45,636 | $ | 15,041 | $ | (26,134) | 60,334 | |||||||||||||||||||||
Depreciation and amortization | 4,414 | 3,639 | 901 | 456 | 346 | 328 | 2,031 | 992 | 1,701 | 12,777 | ||||||||||||||||||||||||||||||
Other income (loss), net | 525 | 201 | 1,140 | 12 | 15 | 57 | 1,224 | 74 | (198) | 1,826 | ||||||||||||||||||||||||||||||
EBITDA and Adjusted EBITDA | $ | 16,722 | $ | 17,848 | $ | 32,363 | $ | 7,779 | $ | 7,354 | $ | 1,395 | $ | 48,891 | $ | 16,107 | $ | (24,631) | $ | 74,937 | ||||||||||||||||||||
EBITDA and Adjusted EBITDA margin | ||||||||||||||||||||||||||||||||||||||||
View original content:http://www.prnewswire.com/news-releases/korn-ferry-announces-first-quarter-fiscal-2021-results-of-operations-301123475.html
SOURCE Korn Ferry
