Korn/Ferry International (KFY, Financial) filed Quarterly Report for the period ended 2011-01-31.
Korn/ferry International has a market cap of $925.72 million; its shares were traded at around $19.95 with a P/E ratio of 18.82 and P/S ratio of 1.54.
Our cash, cash equivalents and marketable securities increased $7.1 million, or 2%, to $303.6 million at January 31, 2011 compared to $296.5 million at April 30, 2010, mainly due to cash provided by operating activities, partially offset by bonuses earned in fiscal 2010 and paid in fiscal 2011. As of January 31, 2011, we held marketable securities, to settle obligations under our Executive Capital Accumulation Plan (ECAP) with a cost value of $64.7 million and a fair value of $68.6 million. Our working capital increased by $0.7 million in the nine months ended January 31, 2011 to $183.5 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 January 31, 2011; however, we had $8.4 million of standby letters of credit issued under our facility, for which we pledged $9.0 million.
Futurestep. Futurestep reported fee revenue of $23.4 million, an increase of $5.8 million, or 33%, in the three months ended January 31, 2011 compared to $17.6 million in the three months ended January 31, 2010. The increase in Futuresteps fee revenue was due to a 16% increase in the weighted-average fees billed per engagement and a 14% increase in the number of engagements billed in the three months ended January 31, 2011 compared to the three months ended January 31, 2010. The increase in Futuresteps fee revenue consisted of North America fee revenue increase of $3.2 million, or 50%, to $9.6 million; Europe fee revenue increase of $1.3 million, or 24%, to $6.7 million; and an increase in Asia Pacific fee revenue of $1.3 million, or 22%, to $7.1 million. Improvement in Futurestep fee revenue is due to increases in middle-management recruitment and RPO.
Compensation and benefits expense increased $23.4 million, or 23%, to $126.1 million in the three months ended January 31, 2011 from $102.7 million in the three months ended January 31, 2010. The increase in compensation and benefits expenses is primarily due to an $11.2 million increase in the variable component of compensation, coupled with a 9% increase in global headcount in the three months ended January 31, 2011 as compared to the three months ended January 31, 2010. Exchange rates favorably impacted compensation and benefits expenses by $0.6 million during the three months ended January 31, 2011.
Executive recruitment general and administrative expenses increased $0.7 million, or 3%, to $23.2 million in the three months ended January 31, 2011 from $22.5 million in the three months ended January 31, 2010. The increase in general and administrative expenses was driven by an increase of $1.1 million in travel expenses, coupled with an increase in business development expenses of $0.5 million, which were partially offset by a $0.6 million decrease in net foreign exchange losses. Travel and business development expenses increased primarily due to the increase in our overall business activities reflected in the 26% increase in fee revenues. Executive recruitment general and administrative expenses as a percentage of fee revenue was 14% in the three months ended January 31, 2011 compared to 17% in the three months ended January 31, 2010.
Corporate general and administrative expenses decreased $1.4 million, or 25%, to $4.3 million in the three months ended January 31, 2011 compared to $5.7 million in the three months ended January 31, 2010, primarily due to decreases of $0.5 million in professional fees, $0.5 million in business development expenses and $0.2 million in travel and meetings expenses.
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Korn/ferry International has a market cap of $925.72 million; its shares were traded at around $19.95 with a P/E ratio of 18.82 and P/S ratio of 1.54.
Highlight of Business Operations:
Fee revenue increased $39.7 million in the three months ended January 31, 2011 to $186.5 million compared to $146.8 million in the three months ended January 31, 2010, with increases in fee revenue in all regions of executive search and Futurestep. The North America region in executive recruitment experienced the largest dollar increase in fee revenue. During the three months ended January 31, 2011, we recorded operating income of $20.5 million with executive recruitment and Futurestep contributing $29.1 million and $1.3 million, respectively, offset by corporate expenses of $9.9 million. This represents an increase of $14.1 million in the three months ended January 31, 2011, from operating income of $6.4 million in the three months ended January 31, 2010.Our cash, cash equivalents and marketable securities increased $7.1 million, or 2%, to $303.6 million at January 31, 2011 compared to $296.5 million at April 30, 2010, mainly due to cash provided by operating activities, partially offset by bonuses earned in fiscal 2010 and paid in fiscal 2011. As of January 31, 2011, we held marketable securities, to settle obligations under our Executive Capital Accumulation Plan (ECAP) with a cost value of $64.7 million and a fair value of $68.6 million. Our working capital increased by $0.7 million in the nine months ended January 31, 2011 to $183.5 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 January 31, 2011; however, we had $8.4 million of standby letters of credit issued under our facility, for which we pledged $9.0 million.
Futurestep. Futurestep reported fee revenue of $23.4 million, an increase of $5.8 million, or 33%, in the three months ended January 31, 2011 compared to $17.6 million in the three months ended January 31, 2010. The increase in Futuresteps fee revenue was due to a 16% increase in the weighted-average fees billed per engagement and a 14% increase in the number of engagements billed in the three months ended January 31, 2011 compared to the three months ended January 31, 2010. The increase in Futuresteps fee revenue consisted of North America fee revenue increase of $3.2 million, or 50%, to $9.6 million; Europe fee revenue increase of $1.3 million, or 24%, to $6.7 million; and an increase in Asia Pacific fee revenue of $1.3 million, or 22%, to $7.1 million. Improvement in Futurestep fee revenue is due to increases in middle-management recruitment and RPO.
Compensation and benefits expense increased $23.4 million, or 23%, to $126.1 million in the three months ended January 31, 2011 from $102.7 million in the three months ended January 31, 2010. The increase in compensation and benefits expenses is primarily due to an $11.2 million increase in the variable component of compensation, coupled with a 9% increase in global headcount in the three months ended January 31, 2011 as compared to the three months ended January 31, 2010. Exchange rates favorably impacted compensation and benefits expenses by $0.6 million during the three months ended January 31, 2011.
Executive recruitment general and administrative expenses increased $0.7 million, or 3%, to $23.2 million in the three months ended January 31, 2011 from $22.5 million in the three months ended January 31, 2010. The increase in general and administrative expenses was driven by an increase of $1.1 million in travel expenses, coupled with an increase in business development expenses of $0.5 million, which were partially offset by a $0.6 million decrease in net foreign exchange losses. Travel and business development expenses increased primarily due to the increase in our overall business activities reflected in the 26% increase in fee revenues. Executive recruitment general and administrative expenses as a percentage of fee revenue was 14% in the three months ended January 31, 2011 compared to 17% in the three months ended January 31, 2010.
Corporate general and administrative expenses decreased $1.4 million, or 25%, to $4.3 million in the three months ended January 31, 2011 compared to $5.7 million in the three months ended January 31, 2010, primarily due to decreases of $0.5 million in professional fees, $0.5 million in business development expenses and $0.2 million in travel and meetings expenses.
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