Form: 8-K

Current report filing

June 15, 2016

Exhibit 99.1

For Immediate Release

Contacts:

Investor Relations: Gregg Kvochak, (310) 556-8550

For Media: Dan Gugler, (310) 226-2645

Korn Ferry International Announces Fourth Quarter and Fiscal 2016 Results of Operations

Highlights

 

  •   Korn Ferry reports record annual and fourth quarter fee revenue, driven by organic growth, as well as the Hay Group acquisition.

 

  •   The North America region of Executive Search and the Futurestep segment continued to deliver strong revenue growth.

 

  •   Significant progress continues to be made on the Hay Group integration.

 

  •   The Company entered into a Credit Agreement with a syndicate of banks providing for enhanced financial flexibility.

 

  •   The Company declared a quarterly dividend of $0.10 per share on June 15, 2016, payable on July 15, 2016 to stockholders of record on June 27, 2016.

Los Angeles, CA, June 15, 2016 – Korn/Ferry International (NYSE: KFY), the preeminent global people and organizational advisory firm, today announced record fourth quarter and annual fee revenue of $399.9 million and $1.3 billion, or $405.0 million and $1.3 billion on an adjusted basis, respectively. Fourth quarter diluted earnings per share and adjusted diluted earnings per share were $0.10 and $0.58, respectively. FY’16 diluted earnings per share were $0.58 and adjusted diluted earnings per share were $2.08. The adjusted diluted earnings per share for the fourth quarter and the full year excluded $32.9 million and $103.9 million, respectively, of restructuring charges, net, integration/acquisition and separation costs, a deferred revenue adjustment related to the Hay Group acquisition (which also impacted adjusted fee revenue) and a non-cash loss relating to the Venezuelan currency devaluation.

“Korn Ferry closed strong in the final quarter of its fiscal year with fee revenue of $399.9 million representing 47% growth, or adjusted fee revenue of $405.0 million representing 49% growth, and diluted earnings per share of $0.10, or adjusted diluted earnings per share of $0.58,” said Gary D. Burnison, CEO Korn Ferry. “I am enormously proud of our company and the results we have achieved during the quarter, and at the same time, continuing to deliver on the Hay Group integration at a scope and pace that has exceeded our initial expectations.

“We are in the midst of creating a new firm – with 65% of our colleagues new to the organization in the last three years, due to expansion and growth. We are a company that accelerates our clients’ business performance through solutions and productized services that span from strategy implementation and organizational design to recruitment and leadership development to compensation and reward strategies. Our advisory business, now bolstered by our Hay Group combination, has given us more reasons to engage with clients. Also, our recruiting businesses, Executive Search and Futurestep, have never been stronger than they were in the fourth quarter. We are indeed creating the preeminent organizational and people advisory firm,” Burnison added.


Hay Group Integration

In the fourth quarter of FY’16, we continued to make significant progress on the Hay Group integration. The majority of our fourth quarter efforts were focused on activities associated with integration of our go-to-market activities, our intellectual property and content, our solution sets and service offerings, and our back office systems and business processes. We incurred a minimal amount of restructuring costs, including real estate co-location. The fourth quarter results benefitted from the third quarter restructuring and integration actions with the new Hay Group segment EBITDA margin coming in at 5.6%, or 15.9% on an adjusted basis.

As previously disclosed, the integration of Hay Group will be substantially complete in Q1 FY’17, which will include additional consolidation of office space and the elimination of other redundant operational and general and administrative expenses. We estimate the cost of these actions to be in the range of $20 million to $26 million, resulting in incremental annualized savings of approximately $17 million to $23 million.

Selected Financial Results

(dollars in millions, except per share amounts)

 

     Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Fee revenue

   $ 399.9      $ 271.8      $ 1,292.1      $ 1,028.2   

Total revenue

   $ 417.1      $ 282.2      $ 1,346.7      $ 1,066.1   

Operating income

   $ 4.9      $ 28.1      $ 52.7      $ 114.0   

Operating margin

     1.2     10.3     4.1     11.1

Net income attributable to Korn Ferry

   $ 5.8      $ 25.5      $ 30.9      $ 88.4   

Basic earnings per share

   $ 0.10      $ 0.51      $ 0.58      $ 1.78   

Diluted earnings per share

   $ 0.10      $ 0.51      $ 0.58      $ 1.76   
EBITDA Results (a):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

EBITDA

   $ 21.4      $ 40.2      $ 85.8      $ 151.3   

EBITDA margin

     5.4     14.8     6.6     14.7
Adjusted Results (b):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Adjusted fee revenue

   $ 405.0      $ 271.8      $ 1,303.1      $ 1,028.2   

Adjusted EBITDA (a)

   $ 54.3      $ 40.7      $ 189.7      $ 161.7   

Adjusted EBITDA margin (a)

     13.4     15.0     14.6     15.7

Adjusted net income attributable to Korn Ferry

   $ 32.8      $ 25.6      $ 110.9      $ 95.5   

Adjusted basic earnings per share

   $ 0.58      $ 0.52      $ 2.10      $ 1.93   

Adjusted diluted earnings per share

   $ 0.58      $ 0.51      $ 2.08      $ 1.90   

 

(a) EBITDA refers to earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA to exclude restructuring charges (recoveries), net, integration/acquisition costs, and includes the deferred revenue adjustment related to the Hay Group acquisition and separation costs. EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures (see attached reconciliations).
(b) Adjusted results are non-GAAP financial measures that adjust for the following (see attached reconciliations):


     Fourth Quarter      Year to Date  
     FY’16      FY’15      FY’16      FY’15  

Deferred revenue adjustment related to the Hay Group acquisition

   $ 5.1       $        —         $        11.0       $        —     

Restructuring charges, net

   $ 2.4       $ —         $ 33.0       $ 9.5   

Integration/acquisition costs

   $      11.7       $ 0.5       $ 45.5       $ 0.9   

Venezuelan foreign currency loss

   $ 13.7       $ —         $ 13.7       $ —     

Separation costs

   $ —         $ —         $ 0.7       $ —     

Fiscal 2016 Fourth Quarter Results

Fee revenue was $399.9 million in Q4 FY’16 and adjusted fee revenue was $405.0 million (including $5.1 million in deferred revenue adjustment related to the Hay Group acquisition).

 

  •   Excluding fee revenue related to the Hay Group acquisition, fee revenue in Q4 FY’16 increased 4.9% (7.1% on a constant currency basis), compared to Q4 FY’15.

 

  •   The growth was primarily due to increases in fee revenue in the North America region of Executive Search and the Futurestep segment.

Operating margin was 1.2% in Q4 FY’16 compared to 10.3% in the year-ago quarter. The decrease in operating margin was due to an increase in integration/acquisition costs as well as restructuring charges, net, a foreign currency loss relating to the devaluation of the Venezuelan currency and the deferred revenue adjustment referenced above.

EBITDA margin was 5.4% and Adjusted EBITDA margin was 13.4%. The year-over-year decline in Adjusted EBITDA margin (160 bps) was primarily due to an increase in compensation and benefits expense in the Futurestep segment and North America region of Executive Search to support the growth in revenue and an increased bonus expense associated with better than budgeted performance.

Fiscal 2016 Results

Fee revenue was $1,292.1 million in FY’16 and adjusted fee revenue was $1,303.1 million (including $11.0 million in deferred revenue adjustment related to the Hay Group acquisition).

 

  •   Excluding fee revenue related to the Hay Group acquisition, fee revenue increased 7.5% (12.4% on a constant currency basis), compared to FY’15.

 

  •   Similar to the fourth quarter, the increase in fee revenue was primarily in the North America region of Executive Search and the Futurestep segment. In addition, a portion of the growth relates to Pivot Leadership which was acquired on March 1, 2015.

Operating income was $52.7 million in FY’16, resulting in an operating margin of 4.1% in FY’16 compared to 11.1% in FY’15. The decrease in operating income and margin was due to an increase in integration/acquisition and restructuring costs as well as a foreign currency loss relating to the devaluation of the Venezuelan currency and the deferred revenue adjustment referenced above.

In FY’16, the Company’s EBITDA margin was 6.6% and Adjusted EBITDA margin was 14.6%. The year-over-year decline (110 bps) in Adjusted EBITDA margin was caused by the net impact of adverse market movements on the assets and liabilities associated with our deferred compensation programs, foreign currency losses, and the effect of a non-recurring gain in FY’15 relating to an insurance reimbursement for expenses incurred in prior years. The EBITDA margin for the combined Hay Group business was 3.7% and on an adjusted basis, the EBITDA margin was 16.4%, which is consistent with the prior year.


Results by Segment

Selected Executive Search Data

(dollars in millions)

 

     Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Fee revenue

   $ 159.7      $ 156.6      $ 622.9      $ 597.4   

Total revenue

   $ 165.4      $ 161.7      $ 644.5      $ 619.3   

Operating income

   $ 23.0      $ 31.3      $ 131.7      $ 119.0   

Operating margin

     14.4     20.0     21.1     19.9

Ending number of consultants

     488        452        488        452   

Average number of consultants

     490        448        470        442   

Engagements billed

     3,395        3,175        8,375        8,480   

New engagements (a)

     1,463        1,382        5,517        5,165   
EBITDA Results (b):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

EBITDA

   $ 24.6      $ 33.4      $ 137.8      $ 127.0   

EBITDA margin

     15.4     21.3     22.1     21.3
Adjusted Results (c):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Adjusted EBITDA (b)

   $ 31.2      $ 33.4      $ 151.7      $ 132.4   

Adjusted EBITDA margin (b)

     19.5     21.3     24.3     22.2

 

(a) Represents new engagements opened in the respective period.
(b) 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 exclude the following (see attached reconciliations):

 

     Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Restructuring charges, net

   $     —          $    —          $     7.3        $    5.4      

Venezuelan foreign currency loss

   $ 6.6      $ —        $ 6.6      $ —     

Executive Search

Fee revenue was $159.7 million in Q4 FY’16, an increase of 2.0% (4.5% on a constant currency basis) compared to Q4 FY’15. The overall increase in fee revenue was primarily attributable to higher fee revenues in our North America region.

Operating income was $23.0 million in Q4 FY’16. Operating margin was 14.4% in Q4 FY’16 compared to 20.0% in Q4 FY’15. Operating income and margin were negatively impacted by the foreign currency loss relating to the devaluation of the Venezuelan currency and higher compensation and benefits expense associated with better revenue performance.

EBITDA was $24.6 million in Q4 FY’16 with an EBITDA margin of 15.4% (negatively impacted by the same factors as operating income). Adjusted EBITDA was $31.2 million with an Adjusted EBITDA margin of 19.5%, slightly down from the prior year due primarily to the factors referenced above.


Selected Hay Group Data

(dollars in millions)

 

     Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Fee revenue

   $ 187.7      $ 72.8      $ 471.1      $ 267.1   

Total revenue

   $ 194.7      $ 75.3      $ 488.2      $ 275.2   

Operating income (loss)

   $ 2.9      $ 8.4      $ (3.4   $ 28.2   

Operating margin

     1.5     11.5     (0.7 )%      10.6

Ending number of consultants (a)

     562        164        562        164   

Staff utilization (b)

     70     74     67     71
EBITDA Results (c):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

EBITDA

   $ 10.5      $ 12.1      $ 17.5      $ 41.6   

EBITDA margin

     5.6     16.6     3.7     15.6
Adjusted Results (d):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Adjusted fee revenue

   $ 192.8      $ 72.8      $ 482.1      $ 267.1   

Adjusted EBITDA (c)

   $ 30.7      $ 12.1      $ 78.9      $ 44.4   

Adjusted EBITDA margin (c)

     15.9     16.6     16.4     16.6

 

(a) Represents number of employees originating consulting services. FY’16 includes approximately 393 consultants from the acquisition of Legacy Hay.
(b) Calculated by dividing the number of hours our full-time Hay Group professional staff record to engagements during the period, by the total available working hours during the same period.
(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):

 

     Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Deferred revenue adjustment related to the Hay Group acquisition

   $     5.1      $   —        $   11.0      $     —     

Restructuring charges, net

   $ 2.5        $ —          $ 25.7        $ 2.8      

Integration/acquisition costs

   $ 5.5      $ —        $ 17.6      $ —     

Venezuelan foreign currency loss

   $ 7.1      $ —        $ 7.1      $ —     

Hay Group

Fee revenue was $187.7 million and, on an adjusted basis, fee revenue was $192.8 million in Q4 FY’16 (including $5.1 million in deferred revenue adjustment related to the Hay Group acquisition). The acquisition of Hay Group contributed $114.9 million in fee revenue and $120.0 million on an adjusted basis in Q4 FY’16. Excluding Hay Group revenues, fee revenue was flat quarter-over-quarter and up 1.2% on a constant currency basis.

Operating income was $2.9 million in Q4 FY’16, resulting in an operating margin of 1.5%. The decrease in the margin from the prior year quarter was primarily due to the deferred revenue adjustment related to the Hay Group acquisition, restructuring charges, net, integration/acquisition costs and Venezuelan foreign currency loss.

EBITDA was $10.5 million in Q4 FY’16, with a margin of 5.6%. Adjusted EBITDA was $30.7 million


during Q4 FY’16, at an Adjusted EBITDA margin of 15.9%. As referenced above, the Company continues to make significant progress on the Hay Group integration as reflected in the Q4 FY’16 Adjusted EBITDA margin after only five months of ownership.

Selected Futurestep Data

(dollars in millions)

 

     Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Fee revenue

   $ 52.5      $ 42.4      $ 198.1      $ 163.7   

Total revenue

   $ 57.0      $ 45.2      $ 214.0      $ 171.6   

Operating income

   $ 7.0      $ 5.5      $ 26.7      $ 19.9   

Operating margin

     13.3     13.1     13.5     12.2

Engagements billed (a)

     978        791        2,149        1,968   

New engagements (b)

     547        440        1,913        1,590   
EBITDA Results (c):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

EBITDA

   $ 7.9      $ 6.1      $ 29.5      $ 21.9   

EBITDA margin

     15.0     14.4     14.9     13.4
Adjusted Results (d):    Fourth Quarter     Year to Date  
     FY’16     FY’15     FY’16     FY’15  

Adjusted EBITDA (c)

   $ 7.9      $ 6.1      $ 29.5      $ 23.0   

Adjusted EBITDA margin (c)

     15.0     14.4     14.9     14.1

 

(a) Represents search engagements billed.
(b) Represents new search engagements opened in the respective period.
(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 exclude the following (see attached reconciliations):

 

     Fourth Quarter      Year to Date  
     FY’16      FY’15      FY’16      FY’15  

Restructuring charges, net

   $      —          $      —          $      —          $      1.1    

Futurestep

Fee revenue was $52.5 million in Q4 FY’16, an increase of 23.8% (27.1% on a constant currency basis), compared to the year-ago quarter.

 

  •   The higher fee revenue was driven by a $5.6 million increase in recruitment process outsourcing in Q4 FY’16 compared to Q4 FY’15.

 

  •   The rest of the increase was due to higher fee revenue in professional search due to a 23.6% increase in engagements billed in Q4 FY’16 compared to Q4 FY’15.

Operating income was $7.0 million in Q4 FY’16, an increase of $1.5 million, compared to Q4 FY’15, resulting in an operating margin of 13.3% in the current quarter compared to 13.1% in the year-ago quarter.


EBITDA and Adjusted EBITDA were both $7.9 million during Q4 FY’16. EBITDA and Adjusted EBITDA margin were 15.0%, an increase of 60 bps from the prior year.

New Credit Agreement

On June 15, 2016, the Company entered into a new senior secured $400 million Credit Agreement (the “Agreement”) with a syndicate of banks and Wells Fargo Bank, National Association as administrative agent, to provide for enhanced financial flexibility and in recognition of the accelerated pace of the Hay Group integration. The Agreement provides for, among other things: (a) a new senior secured term loan facility in an aggregate principal amount of $275 million (the “Term Facility”); (b) a new senior secured revolving credit facility (the “Revolver”) in an aggregate principal amount of $125 million, (c) annual term loan amortization of 7.5%, 7.5%, 10.0%, 10.0%, and 10.0%, with the remaining principal due at maturity (d) certain customary affirmative and negative covenants, including a maximum consolidated total leverage ratio and a minimum interest coverage ratio, and (e) an expanded definition of permitted add-backs to Adjusted EBITDA in recognition of the accelerated integration actions referenced above. The proceeds from the Agreement will be used to repay existing indebtedness and for working capital and general corporate purposes.

Both the Revolver and the Term Facility mature on June 15, 2021 and may be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary LIBOR breakage fees).

Outlook

Assuming worldwide economic conditions, financial markets and foreign exchange rates remain steady, on a consolidated basis:

 

  •   Q1 FY’17 fee revenue is expected to be in the range of $371 million and $391 million; and

 

  •   Q1 FY’17 diluted earnings per share is likely to range between $0.02 to $0.20.

On a consolidated as adjusted basis:

 

  •   Q1 FY’17 adjusted fee revenue is expected to be in the range of $375 million and $395 million; and

 

  •   Q1 FY’17 adjusted diluted earnings per share is likely to range from $0.50 to $0.58.


     Q1 FY’17
Fee Revenue
Outlook (1)
 
     Low      High  
     (in millions)  

Korn Ferry consolidated fee revenue

   $ 371       $ 391   

Legacy Hay Group deferred revenue adjustment

     4         4   
  

 

 

    

 

 

 

Korn Ferry consolidated adjusted fee revenue

   $ 375       $ 395   
  

 

 

    

 

 

 
     Q1 FY’17;
Earnings Per Share
Outlook (2)
 
     Low      High  
               

Consolidated diluted earnings per share

   $ 0.02       $ 0.20   

Legacy Hay Group deferred revenue adjustment

     0.05         0.05   

Integration/ acquisition costs

     0.06         0.03   

Restructuring charges, net

     0.30         0.23   

Retention bonuses

     0.05         0.05   

Tax rate impact

     0.02         0.02   
  

 

 

    

 

 

 

Consolidated as adjusted diluted earnings per share

   $ 0.50       $ 0.58   
  

 

 

    

 

 

 
 

 

(1) Korn Ferry consolidated adjusted fee revenue is a non-GAAP financial measure that includes revenue that Hay Group would have realized over the ensuing year if not for business combination accounting that requires a company to record the acquisition balance sheet at fair value and write-off deferred revenue where no future services are required to be performed to earn that revenue.
(2) Consolidated as adjusted diluted earnings per share is a non-GAAP financial measure that excludes the items listed below in the table above.

Earnings Conference Call Webcast

The earnings conference call will be held today at 4:30 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 www.kornferry.com, accessible through the Investor Relations section. 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 the preeminent global people and organizational advisory firm. We help leaders, organizations and societies succeed by releasing the full power and potential of people. Our nearly 7,000 colleagues deliver services through Executive Search, Hay Group and Futurestep divisions. Visit www.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. 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 competition, the dependence on attracting and retaining qualified and experienced consultants, our ability to successfully integrate acquired businesses including Hay Group, our ability to recognize the anticipated benefits of the acquisition of Hay Group which may be affected by, among other things, competition, our ability to grow and manage growth profitability, maintain relationships with customers and suppliers and retain key employees, costs related to the acquisition of Hay Group, maintaining our brand name and professional reputation, potential legal liability, the portability of client relationships, global and local political or economic developments in or affecting countries where we have operations, currency fluctuations in our international operations, risks related to growth, alignment of our cost structure with our growth, restrictions imposed by off-limits agreements, reliance on information processing systems, cyber security vulnerabilities, limited protection of our intellectual property, our ability to enhance and develop new technology, our ability to develop new products and services, consolidation of industries we serve, our ability to successfully recover from a disaster or other business continuity problems, changes in our accounting estimates/assumptions, impairment of goodwill and other intangible assets, deferred tax assets, seasonality, our ability to successfully rationalize our cost structure 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 income attributable to Korn/Ferry International, adjusted to exclude restructuring charges, net, integration/acquisition costs, separation costs and includes the deferred revenue adjustment related to the Hay Group acquisition, net of income tax effect;

 

  •   adjusted basic and diluted earnings per share, adjusted to exclude restructuring charges, net, integration/acquisition costs, separation costs and includes the deferred revenue adjustment related to the Hay Group acquisition, net of income tax effect; and in the case of the outlook section, also adjusted for Venezuelan exchange rate and tax rate impact;

 

  •   constant currency amounts that represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period;

 

  •   EBITDA, or earnings before interest, taxes, depreciation and amortization and EBITDA margin;

 

  •   Adjusted EBITDA, which is EBITDA further adjusted to exclude restructuring charges, net, integration/acquisition costs, separation costs and includes the deferred revenue adjustment related to the Hay Group acquisition, and Adjusted EBITDA margin;


  •   Consolidated adjusted fee revenue, which includes revenue that Hay Group would have realized over the ensuing year if not for business combination accounting that requires a company to record the acquisition balance sheet at fair value and write-off deferred revenue where no future services are required to be performed to earn that revenue; and

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 and other items 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 represent 1) costs we incurred to acquire and integrate the Hay Group acquisition, 2) charges we incurred to restructure the combined company due to the acquisition of Hay Group, 3) foreign currency losses due to the devaluation of the Venezuelan currency and 4) revenue that Hay Group would have realized if not for business combination accounting that requires a company to record the acquisition balance sheet at fair value and write-off deferred revenue where no future services are required to be performed to earn that revenue. As such, reported fee revenue can make fee revenue and operating results appear to fluctuate more than they would if business combination accounting did not require deferred revenue to be written off. Adjusted fee revenue is not a measure that substitutes an individually tailored revenue recognition or measurement method for those of GAAP, rather, it is an adjustment for a short period of time that will provide better comparability in the current and future periods. Management believes the presentation of adjusted fee revenue assists management in its evaluation of ongoing operations and provides useful information to investors because it 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 distorted by write-offs required under business combination accounting 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. Management will no longer have adjusted fee revenue after Q1 FY’17. The use of these non-GAAP financial measures facilitates comparisons to Korn Ferry’s historical performance. Korn Ferry includes these 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. In the case of constant currency amounts, management believes the presentation of such information provides meaningful 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

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

 

     Three Months Ended
April 30,
    Year Ended
April 30,
 
     2016     2015     2016     2015  
     (unaudited)              

Fee revenue

   $ 399,960      $ 271,717      $ 1,292,112      $ 1,028,152   

Reimbursed out-of-pocket engagement expenses

     17,201        10,436        54,602        37,914   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     417,161        282,153        1,346,714        1,066,066   
  

 

 

   

 

 

   

 

 

   

 

 

 

Compensation and benefits

     286,852        182,886        897,345        691,450   

General and administrative expenses

     73,569        41,637        213,018        145,917   

Reimbursed expenses

     17,201        10,436        54,602        37,914   

Cost of services

     20,974        11,868        59,824        39,692   

Depreciation and amortization

     11,287        7,234        36,220        27,597   

Restructuring charges, net

     2,436        —          33,013        9,468   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     412,319        254,061        1,294,022        952,038   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     4,842        28,092        52,692        114,028   

Other income (loss), net

     5,645        4,397        (4,167     7,458   

Interest income (expense), net

     1,452        (358     237        (1,784
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries

     11,939        32,131        48,762        119,702   

Equity in earnings of unconsolidated subsidiaries

     185        485        1,631        2,181   

Income tax provision

     5,749        7,134        18,960        33,526   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     6,375        25,482        31,433        88,357   

Net income attributable to noncontrolling interest

     (520     —          (520     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Korn/Ferry International

   $ 5,855      $ 25,482      $ 30,913      $ 88,357   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share attributable to Korn/Ferry International:

        

Basic

   $ 0.10      $ 0.51      $ 0.58      $ 1.78   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.10      $ 0.51      $ 0.58      $ 1.76   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding:

        

Basic

     56,012        49,288        52,372        49,052   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     56,574        49,890        52,929        49,766   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per share:

   $ 0.10      $ 0.10      $ 0.40      $ 0.10   
  

 

 

   

 

 

   

 

 

   

 

 

 


KORN FERRY AND SUBSIDIARIES

FINANCIAL SUMMARY BY SEGMENT

(in thousands)

(unaudited)

 

     Three Months Ended April 30,     Year Ended April 30,  
     2016           2015     % Change     2016           2015     % Change  

Fee Revenue:

                

Executive search:

                

North America

   $ 94,678        $ 87,579        8   $ 371,345        $ 330,634        12

EMEA

     36,161          39,677        (9 %)      144,319          153,465        (6 %) 

Asia Pacific

     21,199          22,533        (6 %)      80,506          84,148        (4 %) 

Latin America

     7,661          6,794        13     26,744          29,160        (8 %) 
  

 

 

     

 

 

     

 

 

     

 

 

   

Total executive search

     159,699          156,583        2     622,914          597,407        4

Hay Group

     187,795          72,749        158     471,145          267,018        76

Futurestep

     52,466          42,385        24     198,053          163,727        21
  

 

 

     

 

 

     

 

 

     

 

 

   

Total fee revenue

     399,960          271,717        47     1,292,112          1,028,152        26

Reimbursed out-of-pocket engagement expenses

     17,201          10,436        65     54,602          37,914        44
  

 

 

     

 

 

     

 

 

     

 

 

   

Total revenue

   $ 417,161        $ 282,153        48   $ 1,346,714        $ 1,066,066        26
  

 

 

     

 

 

     

 

 

     

 

 

   
Operating Income (Loss):          Margin           Margin           Margin           Margin  

Executive search:

                

North America

   $ 19,857        21.0   $ 20,030        22.9   $ 100,381        27.0   $ 80,818        24.4

EMEA

     5,695        15.7     5,530        13.9     20,607        14.3     18,867        12.3

Asia Pacific

     2,904        13.7     4,589        20.4     12,572        15.6     14,631        17.4

Latin America

     (5,498     (71.8 %)      1,191        17.5     (1,854     (6.9 %)      4,704        16.1
  

 

 

     

 

 

     

 

 

     

 

 

   

Total executive search

     22,958        14.4     31,340        20.0     131,706        21.1     119,020        19.9

Hay Group

     2,871        1.5     8,376        11.5     (3,415     (0.7 %)      28,175        10.6

Futurestep

     6,987        13.3     5,573        13.1     26,702        13.5     19,940        12.2

Corporate

     (27,974       (17,197       (102,301       (53,107  
  

 

 

     

 

 

     

 

 

     

 

 

   

Total operating (loss) income

   $ 4,842        1.2   $ 28,092        10.3   $ 52,692        4.1   $ 114,028        11.1
  

 

 

     

 

 

     

 

 

     

 

 

   


KORN FERRY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

 

     April 30,  
     2016     2015  

ASSETS

    

Cash and cash equivalents

   $ 273,252      $ 380,838   

Marketable securities

     11,338        25,757   

Receivables due from clients, net of allowance for doubtful accounts of $11,292 and $9,958 respectively

     315,975        188,543   

Income taxes and other receivables

     20,579        10,966   

Prepaid expenses and other assets

     43,130        31,054   
  

 

 

   

 

 

 

Total current assets

     664,274        637,158   
  

 

 

   

 

 

 

Marketable securities, non-current

     130,092        118,819   

Property and equipment, net

     95,436        62,088   

Cash surrender value of company owned life insurance policies, net of loans

     107,296        102,691   

Deferred income taxes

     83,715        59,841   

Goodwill

     590,072        254,440   

Intangible assets, net

     233,027        47,901   

Investments and other assets

     51,240        34,863   
  

 

 

   

 

 

 

Total assets

   $ 1,955,152      $ 1,317,801   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Accounts payable

   $ 26,634      $ 19,238   

Income taxes payable

     8,396        3,813   

Compensation and benefits payable

     266,211        219,364   

Term loan

     30,000        —     

Other accrued liabilities

     145,023        63,595   
  

 

 

   

 

 

 

Total current liabilities

     476,264        306,010   
  

 

 

   

 

 

 

Deferred compensation and other retirement plans

     216,113        173,432   

Term loan, non-current

     110,000        —     

Deferred tax liabilities

     61,640        —     

Other liabilities

     43,834        23,110   
  

 

 

   

 

 

 

Total liabilities

     907,851        502,552   
  

 

 

   

 

 

 

Stockholders’ equity

    

Common stock: $0.01 par value, 150,000 shares authorized, 69,723 and 62,863 shares issued and 57,272 and 50,573 shares outstanding, respectively

     702,098        463,839   

Retained earnings

     401,113        392,033   

Accumulated other comprehensive loss, net

     (57,911     (40,623

Noncontrolling interest

     2,001        —     
  

 

 

   

 

 

 

Total stockholders’ equity

     1,047,301        815,249   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 1,955,152      $ 1,317,801   
  

 

 

   

 

 

 


KORN FERRY AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

 

     Three Months Ended
April 30,
    Year Ended
April 30,
 
     2016     2015     2016     2015  
     (unaudited)              

Fee revenue

   $ 399,960      $ 271,717      $ 1,292,112      $ 1,028,152   

Deferred revenue adjustment due to acquisition (1)

     5,096        —          10,967        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted fee revenue

   $ 405,056      $ 271,717      $ 1,303,079      $ 1,028,152   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 4,842      $ 28,092      $ 52,692      $ 114,028   

Depreciation and amortization

     11,287        7,234        36,220        27,597   

Other income (loss), net

     5,645        4,397        (4,167     7,458   

Equity in earnings of unconsolidated subsidiaries, net

     185        485        1,631        2,181   

Net income attributable to noncontrolling interest

     (520     —          (520     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     21,439        40,208        85,856        151,264   

Deferred revenue adjustment due to acquisition (1)

     5,096        —          10,967        —     

Restructuring charges, net (2)

     2,436        —          33,013        9,468   

Integration/acquisition costs (3)

     11,594        514        45,409        959   

Venezuelan foreign currency loss (4)

     13,720        —          13,720        —     

Separation costs (5)

     —          —          744        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 54,285      $ 40,722      $ 189,709      $ 161,691   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating margin

     1.2     10.3     4.1     11.1

Depreciation and amortization

     2.8     2.7     2.8     2.7

Other income (loss), net

     1.4     1.6     (0.3 %)      0.7

Equity in earnings of unconsolidated subsidiaries, net

     0.1     0.2     0.1     0.2

Net income attributable to noncontrolling interest

     (0.1 %)      —          (0.1 %)      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin

     5.4     14.8     6.6     14.7

Deferred revenue adjustment due to acquisition (1)

     1.2     —          0.8     —     

Restructuring charges, net (2)

     0.6     —          2.5     0.9

Integration/acquisition costs (3)

     2.8     0.2     3.5     0.1

Venezuelan foreign currency loss (4)

     3.4     —          1.1     —     

Separation costs (5)

     —          —          0.1     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     13.4     15.0     14.6     15.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Korn/Ferry International

   $ 5,855      $ 25,482      $ 30,913      $ 88,357   

Deferred revenue adjustment due to acquisition (1)

     5,096        —          10,967        —     

Restructuring charges, net (2)

     2,436        —          33,013        9,468   

Integration/acquisition costs (3)

     11,594        514        45,409        959   

Venezuelan foreign currency loss (4)

     13,720        —          13,720        —     

Separation costs (5)

     —          —          744        —     

Tax effect on the above items (6)

     (5,846     (332     (23,819     (3,282
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income attributable to Korn/Ferry International

   $ 32,855      $ 25,664      $ 110,947      $ 95,502   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share

   $ 0.10      $ 0.51      $ 0.58      $ 1.78   

Deferred revenue adjustment due to acquisition (1)

     0.09        —          0.20        —     

Restructuring charges, net (2)

     0.04        —          0.63        0.19   

Integration/acquisition costs (3)

     0.21        0.01        0.87        0.02   

Venezuelan foreign currency loss (4)

     0.24        —          0.26        —     

Separation costs (5)

     —          —          0.01        —     

Tax effect on the above items (6)

     (0.10     —          (0.45     (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted basic earnings per share

   $ 0.58      $ 0.52      $ 2.10      $ 1.93   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per common share

   $ 0.10      $ 0.51      $ 0.58      $ 1.76   

Deferred revenue adjustment due to acquisition (1)

     0.09        —          0.20        —     

Restructuring charges, net (2)

     0.04        —          0.62        0.19   

Integration/acquisition costs (3)

     0.21        —          0.86        0.02   

Venezuelan foreign currency loss (4)

     0.24        —          0.26        —     

Separation costs (5)

     —          —          0.01        —     

Tax effect on the above items (6)

     (0.10     —          (0.45     (0.07
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted diluted earnings per share

   $ 0.58      $ 0.51      $ 2.08      $ 1.90   
  

 

 

   

 

 

   

 

 

   

 

 

 

Explanation of Non-GAAP Adjustments

(1) Increase in fee revenue relating to the deferred revenue recorded on the opening balance sheet of Hay Group, required by fair value accounting. The adjustment is included in the Hay Group segment. On a GAAP basis, Hay Group fee revenue was $187.7 million and $471.1 million during the three months and year ended April 30, 2016, respectively. On an adjusted basis, Hay Group fee revenue was $192.8 million and $482.1 million during the three months and year ended April 30, 2016, respectively.
(2) Restructuring plan implemented in order to rationalize our cost structure by eliminating redundant positions and consolidating office space due to the acquisition of Legacy Hay on December 1, 2015.
(3) Cost associated with completing the acquisition of Hay Group, such as legal and professional fees, and the on-going integration expenses to combine the companies.
(4) Foreign currency loss associated with the devaluation of the Venezuelan currency.
(5) Certain senior management separation charges.
(6) Tax effect on deferred revenue adjustment associated with the acquisition of Hay Group, restructuring charges, net, integration/acquisition costs, foreign currency loss associated with the devaluation of the Venezuelan currency and separation costs.


KORN FERRY AND SUBSIDIARIES

RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO

EBITDA AND ADJUSTED EBITDA (NON-GAAP)

(in thousands)

(unaudited)

 

    Three Months Ended April 30, 2016  
    Executive Search                          
    North
America
    EMEA     Asia Pacific     Latin
America
    Subtotal     Hay Group     Futurestep     Corporate     Consolidated  

Fee revenue

  $ 94,678      $ 36,161      $ 21,199      $ 7,661      $ 159,699      $ 187,795      $ 52,466      $ —        $ 399,960   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

                  $ 6,375   

Other income, net

                    (5,645

Interest income, net

                    (1,452

Equity in earnings of unconsolidated subsidiaries, net

                    (185

Income tax provision

                    5,749   
                 

 

 

 

Operating income (loss)

  $ 19,857      $ 5,695      $ 2,904      $ (5,498   $ 22,958      $ 2,871      $ 6,987      $ (27,974     4,842   

Depreciation and amortization

    796        219        237        88        1,340        7,796        614        1,537        11,287   

Other income (loss), net

    278        206        123        31        638        (131     277        4,861        5,645   

Equity in earnings of unconsolidated subsidiaries, net

    185        —          —          —          185        —          —          —          185   

Net income attributable to noncontrolling interest

    —          —          —          (491     (491     (29     —          —          (520
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

    21,116        6,120        3,264        (5,870     24,630        10,507        7,878        (21,576     21,439   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin

    22.3     16.9     15.4     (76.6 %)      15.4     5.6     15.0       5.4

Restructuring charges, net

    15        (59     —          (6     (50     2,441        49        (4     2,436   

Integration/acquisition costs

    —          —          —          —          —          5,555        —          6,039        11,594   

Venezuelan foreign currency loss

    —          —          —          6,635        6,635        7,085        —          —          13,720   

Deferred revenue adjustment due to acquisition

    —          —          —          —          —          5,096        —          —          5,096   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 21,131      $ 6,061      $ 3,264      $ 759      $ 31,215      $ 30,684      $ 7,927      $ (15,541   $ 54,285   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

    22.3     16.8     15.4     9.9     19.5     15.9     15.0       13.4
    Three Months Ended April 30, 2015  
    Executive Search                          
    North
America
    EMEA     Asia Pacific     Latin
America
    Subtotal     Hay Group     Futurestep     Corporate     Consolidated  

Fee revenue

  $ 87,579      $ 39,677      $ 22,533      $ 6,794      $ 156,583      $ 72,749      $ 42,385      $ —        $ 271,717   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

                  $ 25,482   

Other income, net

                    (4,397

Interest expense, net

                    358   

Equity in earnings of unconsolidated subsidiaries, net

                    (485

Income tax provision

                    7,134   
                 

 

 

 

Operating income (loss)

  $ 20,030      $ 5,530      $ 4,589      $ 1,191      $ 31,340      $ 8,376      $ 5,573      $ (17,197     28,092   

Depreciation and amortization

    853        398        274        101        1,626        3,579        508        1,521        7,234   

Other income, net

    190        14        86        22        312        89        27        3,969        4,397   

Equity in earnings of unconsolidated subsidiaries, net

    145        —          —          —          145        —          —          340        485   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

    21,218        5,942        4,949        1,314        33,423        12,044        6,108        (11,367     40,208   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin

    24.2     15.0     22.0     19.3     21.3     16.6     14.4       14.8

Acquisition costs

    —          —          —          —          —          —          —          514        514   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 21,218      $ 5,942      $ 4,949      $ 1,314      $ 33,423      $ 12,044      $ 6,108      $ (10,853   $ 40,722   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

    24.2     15.0     22.0     19.3     21.3     16.6     14.4       15.0


KORN FERRY AND SUBSIDIARIES

RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO

EBITDA AND ADJUSTED EBITDA (NON-GAAP)

(in thousands)

(unaudited)

 

    Year Ended April 30, 2016  
    Executive Search                          
    North
America
    EMEA     Asia Pacific     Latin
America
    Subtotal     Hay Group     Futurestep     Corporate     Consolidated  

Fee revenue

  $ 371,345      $ 144,319      $ 80,506      $ 26,744      $ 622,914      $ 471,145      $ 198,053      $ —        $ 1,292,112   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

                  $ 31,433   

Other loss, net

                    4,167   

Interest income, net

                    (237

Equity in earnings of unconsolidated subsidiaries, net

                    (1,631

Income tax provision

                    18,960   
                 

 

 

 

Operating income (loss)

  $ 100,381      $ 20,607      $ 12,572      $ (1,854   $ 131,706      $ (3,415   $ 26,702      $ (102,301     52,692   

Depreciation and amortization

    3,267        1,029        941        312        5,549        21,854        2,386        6,431        36,220   

Other (loss) income, net

    (147     433        21        312        619        (868     364        (4,282     (4,167

Equity in earnings of unconsolidated subsidiaries, net

    437        —          —          —          437        —          —          1,194        1,631   

Net income attributable to noncontrolling interest

    —          —          —          (491     (491     (29     —          —          (520
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

    103,938        22,069        13,534        (1,721     137,820        17,542        29,452        (98,958     85,856   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin

    28.0     15.3     16.8     (6.4 %)      22.1     3.7     14.9       6.6

Restructuring charges, net

    499        5,807        577        322        7,205        25,682        49        77        33,013   

Integration/acquisition costs

    —          —          —          —          —          17,607        —          27,802        45,409   

Venezuelan foreign currency loss

    —          —          —          6,635        6,635        7,085        —          —          13,720   

Deferred revenue adjustment due to acquisition

    —          —          —          —          —          10,967        —          —          10,967   

Separation costs

    —          —          —          —          —          —          —          744        744   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 104,437      $ 27,876      $ 14,111      $ 5,236      $ 151,660      $ 78,883      $ 29,501      $ (70,335   $ 189,709   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

    28.1     19.3     17.5     19.6     24.3     16.4     14.9       14.6
    Year Ended April 30, 2015  
    Executive Search                          
    North
America
    EMEA     Asia Pacific     Latin
America
    Subtotal     Hay Group     Futurestep     Corporate     Consolidated  

Fee revenue

  $ 330,634      $ 153,465      $ 84,148      $ 29,160      $ 597,407      $ 267,018      $ 163,727      $ —        $ 1,028,152   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

                  $ 88,357   

Other income, net

                    (7,458

Interest expense, net

                    1,784   

Equity in earnings of unconsolidated subsidiaries, net

                    (2,181

Income tax provision

                    33,526   
                 

 

 

 

Operating income (loss)

  $ 80,818      $ 18,867      $ 14,631      $ 4,704      $ 119,020      $ 28,175      $ 19,940      $ (53,107     114,028   

Depreciation and amortization

    3,515        1,764        1,045        350        6,674        13,427        1,882        5,614        27,597   

Other income (loss), net

    288        83        369        109        849        (22     54        6,577        7,458   

Equity in earnings of unconsolidated subsidiaries, net

    426        —          —          —          426        —          —          1,755        2,181   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

    85,047        20,714        16,045        5,163        126,969        41,580        21,876        (39,161     151,264   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin

    25.7     13.5     19.1     17.7     21.3     15.6     13.4       14.7

Restructuring charges, net

    1,151        3,987        17        229        5,384        2,758        1,154        172        9,468   

Acquisition costs

    —          —          —          —          —          —          —          959        959   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 86,198      $ 24,701      $ 16,062      $ 5,392      $ 132,353      $ 44,338      $ 23,030      $ (38,030   $ 161,691   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

    26.1     16.1     19.1     18.5     22.2     16.6     14.1       15.7