Korn/Ferry International (KFY, Financial) filed Quarterly Report for the period ended 2010-10-31.
Korn/ferry International has a market cap of $1.01 billion; its shares were traded at around $21.86 with a P/E ratio of 34.7 and P/S ratio of 1.6. KFY is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, Chuck Royce of Royce& Associates, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Jim Simons of Renaissance Technologies LLC.
Our cash, cash equivalents and marketable securities decreased $31.8 million, or 11%, to $264.7 million at October 31, 2010 compared to $296.5 million at April 30, 2010, mainly due to the payment of fiscal 2010 annual bonuses, partially offset by cash provided by operating activities. As of October 31, 2010, we held marketable securities, to settle obligations under our Executive Capital Accumulation Plan (ECAP) with a cost value of $63.6 million and a fair value of $67.0 million. Our working capital decreased by $5.1 million in the six months ended October 31, 2010 to $177.7 million. We believe that cash on hand and funds from operations will be sufficient to meet our anticipated working capital, capital expenditures and general corporate requirements in the next twelve months. We had no long-term debt nor any outstanding borrowings under our credit facility at October 31, 2010; however, we had $8.5 million of standby letters of credit issued under our facility, for which we pledged $9.0 million.
Futurestep. Futurestep reported fee revenue of $21.3 million, an increase of $4.5 million, or 27%, in the three months ended October 31, 2010 compared to $16.8 million in the three months ended October 31, 2009. The increase in Futuresteps fee revenue was due to a 30% increase in the number of engagements billed, slightly offset by a 3% decrease in the average fees billed per engagement in the three months ended October 31, 2010 compared to the three months ended October 31, 2009. The increase in Futuresteps fee revenue consisted of North America fee revenue increase of $2.3 million, or 38%, to $8.3 million; Europe fee revenue increase of $2.1 million, or 49%, to $6.4 million; and an increase in Asia Pacific fee revenue of $0.1 million, or 2%, to $6.6 million. Improvement in Futurestep fee revenue is due to increases in middle-management recruitment and RPO.
General and administrative expenses increased $0.2 million, or 1%, to $27.4 million in the three months ended October 31, 2010 compared to $27.2 million in the three months ended October 31, 2009 primarily due to increases of $1.7 million, $1.0 million and $0.4 million in bad debt expense, net foreign exchange and business development expenses, respectively. These were offset by a $1.9 million reduction in the estimated fair value of acquisition-related contingent consideration and $0.9 million in premises and office expense. Exchange rates favorably impacted general and administrative expenses by $0.4 million in the three months ended October 31, 2010. General and administrative expenses as a percentage of fee revenue were 15% in the three months ended October 31, 2010 as compared to 19% in the three months ended October 31, 2009.
Executive recruitment general and administrative expenses increased $0.8 million, or 4%, to $21.0 million in the three months ended October 31, 2010 from $20.2 million in the three months ended October 31, 2009. The increase in general and administrative expenses was driven by an increase of $1.3 million in bad debt expense, coupled with increases in business development expenses of $0.3 million and $0.9 million in net foreign exchange loss, which were partially offset by decreases of $1.0 million in premises and office expense and $0.7 million in all other general and administrative expense. Business development expense increased primarily due to the increase in our overall business activities. The increase in bad debt expense was in line with the increase in our account receivable balances and revenues. Executive recruitment general and administrative expenses, as a percentage of fee revenue, was 13% in the three months ended October 31, 2010 compared to 16% in the three months ended October 31, 2009.
Futurestep general and administrative expenses increased $1.1 million, or 31%, to $4.7 million in the three months ended October 31, 2010 compared to $3.6 million in the three months ended October 31, 2009, primarily due to increases of $0.3 million in business development expense, $0.3 million in bad debt expense, $0.2 million in premises and office expense, and $0.2 million in other general and administrative expense. The increase in bad debt expense was in line with the increase in our account receivable balances and revenues. General expenses increased primarily due to the increase in our overall business activities. Futurestep general and administrative expenses, as a percentage of fee revenue, was 22% in the three months ended October 31, 2010 compared to 21% in the three months ended October 31, 2009.
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Korn/ferry International has a market cap of $1.01 billion; its shares were traded at around $21.86 with a P/E ratio of 34.7 and P/S ratio of 1.6. KFY is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, Chuck Royce of Royce& Associates, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Fee revenue increased $45.3 million in the three months ended October 31, 2010 to $185.4 million compared to $140.1 million in the three months ended October 31, 2009, with increases in fee revenue in all regions of executive search and Futurestep. The North America and Asia Pacific regions in executive recruitment experienced the largest dollar increases in fee revenue. During the three months ended October 31, 2010, we recorded operating income of $19.8 million with operating income from executive recruitment and Futurestep of $23.9 million and $1.2 million, respectively, offset by corporate expenses of $5.3 million. This represents an increase of $17.5 million in the three months ended October 31, 2010, from operating income of $2.3 million in the three months ended October 31, 2009.Our cash, cash equivalents and marketable securities decreased $31.8 million, or 11%, to $264.7 million at October 31, 2010 compared to $296.5 million at April 30, 2010, mainly due to the payment of fiscal 2010 annual bonuses, partially offset by cash provided by operating activities. As of October 31, 2010, we held marketable securities, to settle obligations under our Executive Capital Accumulation Plan (ECAP) with a cost value of $63.6 million and a fair value of $67.0 million. Our working capital decreased by $5.1 million in the six months ended October 31, 2010 to $177.7 million. We believe that cash on hand and funds from operations will be sufficient to meet our anticipated working capital, capital expenditures and general corporate requirements in the next twelve months. We had no long-term debt nor any outstanding borrowings under our credit facility at October 31, 2010; however, we had $8.5 million of standby letters of credit issued under our facility, for which we pledged $9.0 million.
Futurestep. Futurestep reported fee revenue of $21.3 million, an increase of $4.5 million, or 27%, in the three months ended October 31, 2010 compared to $16.8 million in the three months ended October 31, 2009. The increase in Futuresteps fee revenue was due to a 30% increase in the number of engagements billed, slightly offset by a 3% decrease in the average fees billed per engagement in the three months ended October 31, 2010 compared to the three months ended October 31, 2009. The increase in Futuresteps fee revenue consisted of North America fee revenue increase of $2.3 million, or 38%, to $8.3 million; Europe fee revenue increase of $2.1 million, or 49%, to $6.4 million; and an increase in Asia Pacific fee revenue of $0.1 million, or 2%, to $6.6 million. Improvement in Futurestep fee revenue is due to increases in middle-management recruitment and RPO.
General and administrative expenses increased $0.2 million, or 1%, to $27.4 million in the three months ended October 31, 2010 compared to $27.2 million in the three months ended October 31, 2009 primarily due to increases of $1.7 million, $1.0 million and $0.4 million in bad debt expense, net foreign exchange and business development expenses, respectively. These were offset by a $1.9 million reduction in the estimated fair value of acquisition-related contingent consideration and $0.9 million in premises and office expense. Exchange rates favorably impacted general and administrative expenses by $0.4 million in the three months ended October 31, 2010. General and administrative expenses as a percentage of fee revenue were 15% in the three months ended October 31, 2010 as compared to 19% in the three months ended October 31, 2009.
Executive recruitment general and administrative expenses increased $0.8 million, or 4%, to $21.0 million in the three months ended October 31, 2010 from $20.2 million in the three months ended October 31, 2009. The increase in general and administrative expenses was driven by an increase of $1.3 million in bad debt expense, coupled with increases in business development expenses of $0.3 million and $0.9 million in net foreign exchange loss, which were partially offset by decreases of $1.0 million in premises and office expense and $0.7 million in all other general and administrative expense. Business development expense increased primarily due to the increase in our overall business activities. The increase in bad debt expense was in line with the increase in our account receivable balances and revenues. Executive recruitment general and administrative expenses, as a percentage of fee revenue, was 13% in the three months ended October 31, 2010 compared to 16% in the three months ended October 31, 2009.
Futurestep general and administrative expenses increased $1.1 million, or 31%, to $4.7 million in the three months ended October 31, 2010 compared to $3.6 million in the three months ended October 31, 2009, primarily due to increases of $0.3 million in business development expense, $0.3 million in bad debt expense, $0.2 million in premises and office expense, and $0.2 million in other general and administrative expense. The increase in bad debt expense was in line with the increase in our account receivable balances and revenues. General expenses increased primarily due to the increase in our overall business activities. Futurestep general and administrative expenses, as a percentage of fee revenue, was 22% in the three months ended October 31, 2010 compared to 21% in the three months ended October 31, 2009.
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