10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on December 6, 2019
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to ___________
Commission File Number
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
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(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑ |
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Accelerated filer ☐ |
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Non-accelerated filer ☐ |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares outstanding of our common stock as of December 2, 2019 was
KORN FERRY
Table of Contents
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Description |
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Part I. Financial Information |
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Item 1. |
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Consolidated Balance Sheets as of October 31, 2019 (unaudited) and April 30, 2019 |
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1 |
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2 |
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3 |
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4 |
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Consolidated Statements of Cash Flows (unaudited) for the six months ended October 31, 2019 and 2018 |
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5 |
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6 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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25 |
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Item 3. |
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40 |
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Item 4. |
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41 |
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Part II. Other Information |
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Item 1. |
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42 |
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Item 1A. |
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42 |
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Item 2. |
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Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
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42 |
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Item 6. |
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43 |
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44 |
Item 1. Consolidated Financial Statements
KORN FERRY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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October 31, 2019 |
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April 30, 2019 |
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(unaudited) |
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(in thousands, except per share data) |
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ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Receivables due from clients, net of allowance for doubtful accounts of $ |
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Income taxes and other receivables |
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Unearned compensation |
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Prepaid expenses and other assets |
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Total current assets |
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Marketable securities, non-current |
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Property and equipment, net |
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Operating lease right-of-use assets, net |
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— |
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Cash surrender value of company-owned life insurance policies, net of loans |
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Deferred income taxes |
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Goodwill |
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Intangible assets, net |
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Unearned compensation, non-current |
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Investments and other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Accounts payable |
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$ |
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$ |
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Income taxes payable |
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Compensation and benefits payable |
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Operating lease liability, current |
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— |
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Other accrued liabilities |
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Total current liabilities |
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Deferred compensation and other retirement plans |
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Operating lease liability, non-current |
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— |
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Long-term debt |
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Deferred tax liabilities |
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Other liabilities |
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Total liabilities |
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Stockholders' equity |
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Common stock: $ |
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Retained earnings |
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Accumulated other comprehensive loss, net |
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( |
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Total Korn Ferry stockholders' equity |
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Noncontrolling interest |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
1
KORN FERRY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
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Three Months Ended October 31, |
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Six Months Ended October 31, |
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2019 |
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2018 |
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2019 |
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2018 |
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(in thousands, except per share data) |
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Fee revenue |
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$ |
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$ |
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$ |
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$ |
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Reimbursed out-of-pocket engagement expenses |
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Total revenue |
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Compensation and benefits |
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General and administrative expenses |
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Reimbursed expenses |
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Cost of services |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Other income (loss), net |
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( |
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Interest expense, net |
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Income before provision (benefit) for income taxes |
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Income tax provision (benefit) |
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( |
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Net income |
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Net income attributable to noncontrolling interest |
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( |
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( |
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( |
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Net income attributable to Korn Ferry |
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$ |
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$ |
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$ |
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$ |
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Earnings per common share attributable to Korn Ferry: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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Cash dividends declared per share: |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
2
KORN FERRY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
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Three Months Ended October 31, |
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Six Months Ended October 31, |
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2019 |
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2018 |
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2019 |
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2018 |
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(in thousands) |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation adjustments |
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( |
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( |
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( |
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Deferred compensation and pension plan adjustments, net of tax |
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Net unrealized (loss) gain on interest rate swap, net of tax |
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( |
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( |
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Comprehensive income (loss) |
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( |
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Less: comprehensive income attributable to noncontrolling interest |
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( |
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( |
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( |
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( |
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Comprehensive income (loss) attributable to Korn Ferry |
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$ |
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$ |
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$ |
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$ |
( |
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The accompanying notes are an integral part of these consolidated financial statements.
3
KORN FERRY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
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Accumulated Other |
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Total |
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Comprehensive |
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Korn Ferry |
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Total |
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Common Stock |
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Retained |
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(Loss) Income, |
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Stockholders' |
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Noncontrolling |
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Stockholder's |
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Shares |
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Amount |
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Earnings |
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Net |
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Equity |
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Interest |
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Equity |
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(in thousands) |
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Balance as of April 30, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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Other comprehensive (loss) income |
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— |
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— |
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— |
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( |
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( |
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( |
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Dividends paid to shareholders |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Purchase of stock |
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( |
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( |
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— |
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— |
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( |
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— |
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( |
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Issuance of stock |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Balance as of July 31, 2019 |
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( |
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Net income |
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— |
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— |
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— |
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Other comprehensive income (loss) |
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— |
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— |
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— |
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( |
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Dividends paid to shareholders |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Dividends paid to noncontrolling interest |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Purchase of stock |
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( |
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( |
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— |
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— |
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( |
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— |
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( |
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Issuance of stock |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Balance as of October 31, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Accumulated |
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Total |
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Other |
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Korn Ferry |
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Total |
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Common Stock |
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Retained |
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Comprehensive |
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Stockholders' |
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Noncontrolling |
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Stockholder's |
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Shares |
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Amount |
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Earnings |
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Loss, Net |
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Equity |
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Interest |
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Equity |
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(in thousands) |
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Balance as of April 30, 2018 |
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$ |
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$ |
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