Connecting to LinkedIn...

Blank

Korn/Ferry International Announces Fourth Quarter and Fiscal 2013 Results of Operations

Korn/Ferry International Announces Fourth Quarter and Fiscal 2013 Results of Operations

Highlights

- Korn/Ferry reports record quarterly fee revenue of $227.9 million in the fourth quarter of 2013, an increase of 17% compared to Q4 FY'12, on a constant currency basis. Excluding current year acquisitions, quarterly fee revenues increased 2% on a constant currency basis.

- Fee revenue in Leadership & Talent Consulting services grew 92% from Q4 FY'12 to Q4 FY'13 on a constant currency basis. Excluding current year acquisitions, fourth quarter revenues were essentially flat year-over-year, on a constant currency basis.

- Fee revenue in Futurestep grew 7 %, from Q4 FY'12 to Q4 FY'13, on a constant currency basis.

- For the full year of FY'13, Korn/Ferry reports record annual fee revenue of $812.8 million, an increase of 5% over FY'12, on a constant currency basis. Excluding current year acquisitions, annual fee revenues were down 1% on a constant currency basis.

Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced record quarterly and annual fee revenues of $227.9 million and $812.8 million for the fourth quarter and full year of FY'13, respectively. Fourth quarter adjusted diluted earnings per share were $0.32, excluding restructuring and transaction and integration costs of $3.5 million. Full year adjusted diluted earnings per share were $1.10, excluding restructuring, transaction and integration, and separation costs of $26.5 million. Including such costs, diluted earnings per share was $0.25 and $0.70 in the three months and year ended April 30, 2013, respectively.

"I am pleased with our strategic progress and operating results for the fourth quarter, which includes accelerating the integration of our recent acquisitions as well as further diversifying and differentiating our Company. In the fourth quarter, Korn/Ferry's broader talent management offerings accounted for 40% of fee revenue which reflects the Company's transformation as a talent management consultancy," said Gary D. Burnison, CEO of Korn/Ferry International. "As global companies fight for growth and relevancy in this decade, talent will be the differentiator - Korn/Ferry is the bridge between a client's business and talent strategy - delivering solutions that help our clients with the design, building and attraction of that talent."

Financial Results

(dollars in millions, except per share amounts)

Fourth Quarter

Year to Date

FY'13

FY'12

FY'13

FY'12

Fee revenue

$ 227.9

$ 198.1

$ 812.8

$ 790.5

Total revenue

$ 238.6

$ 207.6

$ 849.7

$ 826.8

Operating income

$ 15.4

$ 15.4

$ 43.9

$ 82.9

Operating margin

6.8%

7.8%

5.4%

10.5%

Net income

$ 12.2

$ 12.0

$ 33.3

$ 54.3

Basic earnings per share

$ 0.26

$ 0.26

$ 0.71

$ 1.17

Diluted earnings per share

$ 0.25

$ 0.25

$ 0.70

$ 1.15

EBITDA Results (a):

Fourth Quarter

Year to Date

FY'13

FY'12

FY'13

FY'12

EBITDA

$ 24.3

$ 22.4

$ 71.3

$ 98.5

EBITDA margin

10.7%

11.3%

8.8%

12.5%

 

 

Adjusted Results (b):

Fourth Quarter

Year to Date

FY'13

FY'12

FY'13

FY'12

Operating income

$ 18.9

$ 17.3

$ 70.4

$ 85.7

Operating margin

8.3%

8.7%

8.7%

10.8%

EBITDA (a)

$ 27.8

$ 24.3

$ 97.8

$ 101.3

EBITDA margin (a)

12.2%

12.2%

12.0%

12.8%

Net income

$ 15.6

$ 13.3

$ 52.8

$ 56.2

Basic earnings per share

$ 0.33

$ 0.28

$ 1.12

$ 1.21

Diluted earnings per share

$ 0.32

$ 0.28

$ 1.10

$ 1.19

Fiscal 2013 Fourth Quarter Results

Fee revenue was $227.9 million in Q4 FY'13, an increase of $29.8 million, or 15%, compared to the year-ago quarter (foreign exchange rates negatively impacted fee revenue by $2.9 million), primarily driven by a $28.5 million and a $1.7 million increase in fee revenue in Leadership & Talent Consulting and Futurestep. Excluding the PDI Ninth House and Global Novations acquisitions (the "current year acquisitions"), fee revenue was $199.1 million in Q4 FY'13, an increase of 1% compared to the year-ago quarter (2% on a constant currency basis) driven by all market sectors with the largest increases in life science/healthcare, technology and the industrial sector.

Compensation and benefit expenses were $154.4 million in Q4 FY'13, an increase of $14.8 million, or 11%, compared to the year-ago quarter. The current year acquisitions contributed $18.6 million to the increase in compensation and benefit expenses, offset by a reduction of $3.8 million primarily in salaries and related payroll taxes due to lower average headcount in Executive Recruitment.

General and administrative expenses were $40.1 million in Q4 FY'13, an increase of $5.4 million, or 16%, from the year-ago quarter, resulting primarily from the current year acquisitions.

As previously disclosed, during Q4 FY'13, the Company took steps to integrate PDI Ninth House by consolidating and eliminating redundant office space around the world. As a result, the Company recorded net restructuring charges of $2.9 million in Q4 FY'13 and incurred transaction and integration costs of $0.6 million in Q4 FY'13. Excluding these costs, adjusted EBITDA was $27.8 million during Q4 FY'13, an increase of $3.5 million, or 14%, compared to Q4 FY'12. Adjusted EBITDA margin was 12.2% in both periods.

On a GAAP basis, operating income was $15.4 million in both Q4 FY'13 and Q4 FY'12 resulting in a margin of 6.8% in the current quarter compared to 7.8% in the year-ago quarter.

Fiscal 2013 Results

Fee revenue was $812.8 million in FY'13, an increase of $22.3 million, or 3%, compared to FY'12 (foreign exchange rates negatively impacted fee revenue by $15.1 million). Excluding current year acquisitions, fee revenue was $767.2 million in FY'13, a decrease of 3% (1% on a constant currency basis) compared to FY'12.

As previously disclosed, during FY'13, the Company took steps to rationalize its cost structure and to integrate the current year acquisitions. As a result, the Company recorded restructuring charges of $22.8 million to reduce its workforce and consolidate premises and incurred acquisition-related transaction and integration costs of $3.1 million in FY'13.

Adjusted EBITDA was $97.8 million during FY'13, a decrease of $3.5 million, or 3%, compared to FY'12. Adjusted EBITDA margin was 12.0%, down 80 basis points from the prior year. This decrease was primarily associated with the change in business mix and costs associated with incremental infrastructure and support services relating to the newly acquired businesses.

On a GAAP basis, operating income was $43.9 million in FY'13, a decrease of $39.0 million, or 47%, compared to FY'12 resulting in an operating margin of 5.4% in the current year compared to 10.5% in the prior year.

Tags:

Articles similar to

Articles similar to