Korn/Ferry International (KFY, Financial) filed Quarterly Report for the period ended 2009-07-31.
Korn/Ferry International is the world's leading and largestexecutive recruitment firm with the broadest global presence in the executive recruitment industry. KFY provides executive recruitment services exclusively on a retained basis and serve the global recruitment needs of our clients from middle to executive management. KFY's clients are many of the world's largest and most prestigious public and private companies middle-market and emerging growth companies as well as governmental and not-for-profit organizations. Korn/ferry International has a market cap of $596.3 million; its shares were traded at around $13.32 with a P/E ratio of 21.1 and P/S ratio of 0.9. Korn/ferry International had an annual average earning growth of 21.1% over the past 5 years.
Futurestep. Futurestep reported fee revenue of $15.5 million, a decrease of $15.7 million, or 50%, in the three months ended July 31, 2009 compared to $31.2 million in the three months ended July 31, 2008. The decline in Futuresteps fee revenue is due to a 36% decrease in the number of engagements billed in the three months ended July 31, 2009 as compared to the three months ended July 31, 2008 and a 23% decrease in average fees billed per engagement during the same period. Of the total decrease in fee revenue in the three months ended July 31, 2009 compared to the three months ended July 31, 2008, North America experienced the largest dollar decline, with a decrease in fee revenue of $6.6 million, or 55%, to $5.4 million; Europe fee revenue decreased by $6.1 million, or 58%, to $4.4 million and Asia fee revenue decreased $3.0 million, or 34%, to $5.7 million. All regions reflect decreased revenue from search engagements. Exchange rates unfavorably impacted fee revenue by $1.5 million in the three months ended July 31, 2009.
Executive recruitment general and administrative expenses decreased $4.5 million, or 18%, to $20.1 million in the three months ended July 31, 2009 from $24.6 million in the three months ended July 31, 2008. The decrease in general and administrative expenses was driven by a decrease in business development expense of $1.3 million, premises and office expense of $1.3 million, meeting and travel expenses of $0.9 million and $0.6 million in bad debt expense. General expenses decreased primarily due to the decline in our overall business activities as a result of the global economic crisis, including lower premises and office expense due to the closure of offices in the second half of fiscal 2009. Executive recruitment general and administrative expenses, as a percentage of fee revenue, was 20% in the three months ended July 31, 2009 compared to 14% in the three months ended July 31, 2008.
Futurestep general and administrative expenses decreased $2.5 million, or 42%, to $3.4 million in the three months ended July 31, 2009 compared to $5.9 million in the three months ended July 31, 2008 primarily due to decreases of $0.9 million in premises and office expense, $0.8 million in miscellaneous expenses including travel and meetings, $0.4 million in business development expense and $0.4 million in bad debt expenses. General expenses decreased primarily due to the decline in our overall business activities. Bad debt expense decreased due to an overall lower accounts receivable balance contributing to fewer bad debt write-offs during the three months ended July 31, 2009 as compared to the year-ago period. Futurestep general and administrative expenses, as a percentage of fee revenue, was 22% in the three months ended July 31, 2009 compared to 19% in the three months ended July 31, 2008.
Operating income decreased $48.8 million, to an operating loss of $25.0 million in the three months ended July 31, 2009 compared to operating income of $23.8 million in the three months ended July 31, 2008. This decrease in operating income resulted from an $88.9 million decrease in fee revenue during the three months ended July 31, 2009 as compared to the three months ended July 31, 2008, which was partially offset by a decrease in operating expenses of $45.5 million during the same period. The decrease in operating expenses is primarily attributable to a decrease in compensation and benefits, offset by an increase in restructuring charges of $18.2 million, of which $2.5 million was paid in cash as of July 31, 2009.
As of July 31, 2009 and April 30, 2009, our marketable securities included $65.3 million (net of unrealized losses of $5.2 million) and $60.8 million (net of unrealized losses of $10.0 million) respectively, held in trust for settlement of our obligations under certain deferred compensation plans, of which $61.6 million and $58.5 million are classified as noncurrent. Our obligations for which these assets were held in trust totaled $65.2 million and $60.7 million as of July 31, 2009 and April 30, 2009, respectively.
Read the The complete ReportKFY is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.
Korn/Ferry International is the world's leading and largestexecutive recruitment firm with the broadest global presence in the executive recruitment industry. KFY provides executive recruitment services exclusively on a retained basis and serve the global recruitment needs of our clients from middle to executive management. KFY's clients are many of the world's largest and most prestigious public and private companies middle-market and emerging growth companies as well as governmental and not-for-profit organizations. Korn/ferry International has a market cap of $596.3 million; its shares were traded at around $13.32 with a P/E ratio of 21.1 and P/S ratio of 0.9. Korn/ferry International had an annual average earning growth of 21.1% over the past 5 years.
Highlight of Business Operations:
Although global economic conditions and demand for our services appeared to stabilize during the three months ended July 31, 2009, the demand for executive searches has significantly declined as compared to the year-ago period, which caused declines in our results of operations. Fee revenue decreased 43% in the three months ended July 31, 2009 to $116.8 million compared to $205.7 million in the year-ago period, with decreases in fee revenue in all regions. The North America and Europe regions in executive recruitment experienced the largest dollar decreases in fee revenue. During the three months ended July 31, 2009, we incurred an operating loss of $25.0 million with an operating loss from executive recruitment of $13.1 million, an operating loss of $0.8 million from Futurestep and corporate expenses of $11.1 million. This represents a decrease of 205% from operating income of $23.8 million in the three months ended July 31, 2008.Futurestep. Futurestep reported fee revenue of $15.5 million, a decrease of $15.7 million, or 50%, in the three months ended July 31, 2009 compared to $31.2 million in the three months ended July 31, 2008. The decline in Futuresteps fee revenue is due to a 36% decrease in the number of engagements billed in the three months ended July 31, 2009 as compared to the three months ended July 31, 2008 and a 23% decrease in average fees billed per engagement during the same period. Of the total decrease in fee revenue in the three months ended July 31, 2009 compared to the three months ended July 31, 2008, North America experienced the largest dollar decline, with a decrease in fee revenue of $6.6 million, or 55%, to $5.4 million; Europe fee revenue decreased by $6.1 million, or 58%, to $4.4 million and Asia fee revenue decreased $3.0 million, or 34%, to $5.7 million. All regions reflect decreased revenue from search engagements. Exchange rates unfavorably impacted fee revenue by $1.5 million in the three months ended July 31, 2009.
Executive recruitment general and administrative expenses decreased $4.5 million, or 18%, to $20.1 million in the three months ended July 31, 2009 from $24.6 million in the three months ended July 31, 2008. The decrease in general and administrative expenses was driven by a decrease in business development expense of $1.3 million, premises and office expense of $1.3 million, meeting and travel expenses of $0.9 million and $0.6 million in bad debt expense. General expenses decreased primarily due to the decline in our overall business activities as a result of the global economic crisis, including lower premises and office expense due to the closure of offices in the second half of fiscal 2009. Executive recruitment general and administrative expenses, as a percentage of fee revenue, was 20% in the three months ended July 31, 2009 compared to 14% in the three months ended July 31, 2008.
Futurestep general and administrative expenses decreased $2.5 million, or 42%, to $3.4 million in the three months ended July 31, 2009 compared to $5.9 million in the three months ended July 31, 2008 primarily due to decreases of $0.9 million in premises and office expense, $0.8 million in miscellaneous expenses including travel and meetings, $0.4 million in business development expense and $0.4 million in bad debt expenses. General expenses decreased primarily due to the decline in our overall business activities. Bad debt expense decreased due to an overall lower accounts receivable balance contributing to fewer bad debt write-offs during the three months ended July 31, 2009 as compared to the year-ago period. Futurestep general and administrative expenses, as a percentage of fee revenue, was 22% in the three months ended July 31, 2009 compared to 19% in the three months ended July 31, 2008.
Operating income decreased $48.8 million, to an operating loss of $25.0 million in the three months ended July 31, 2009 compared to operating income of $23.8 million in the three months ended July 31, 2008. This decrease in operating income resulted from an $88.9 million decrease in fee revenue during the three months ended July 31, 2009 as compared to the three months ended July 31, 2008, which was partially offset by a decrease in operating expenses of $45.5 million during the same period. The decrease in operating expenses is primarily attributable to a decrease in compensation and benefits, offset by an increase in restructuring charges of $18.2 million, of which $2.5 million was paid in cash as of July 31, 2009.
As of July 31, 2009 and April 30, 2009, our marketable securities included $65.3 million (net of unrealized losses of $5.2 million) and $60.8 million (net of unrealized losses of $10.0 million) respectively, held in trust for settlement of our obligations under certain deferred compensation plans, of which $61.6 million and $58.5 million are classified as noncurrent. Our obligations for which these assets were held in trust totaled $65.2 million and $60.7 million as of July 31, 2009 and April 30, 2009, respectively.
Read the The complete ReportKFY is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.
