Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.2.0.727
Business Segments
 3 Months Ended
Jul. 31, 2015
Business Segments

7. Business Segments

The Company currently operates in three global businesses: Executive Recruitment, LTC and Futurestep. The Executive Recruitment segment focuses on recruiting Board of Director and C-level positions, in addition to research-based interviewing and onboarding solutions, for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare and technology industries. LTC assists clients with ongoing assessment and development of their senior executives and management teams, and addresses three fundamental needs: Talent Strategy, Succession Management, and Leadership Development, all underpinned by a comprehensive array of world-leading IP, products and tools. Futurestep is a global industry leader in high-impact talent acquisition solutions. Its portfolio of services includes global and regional RPO, project recruitment, individual professional search and consulting. The Executive Recruitment business segment is managed by geographic regional leaders and LTC and Futurestep worldwide operations are managed by their respective Chief Executive Officers. The Executive Recruitment geographic regional leaders and the Chief Executive Officers of LTC and Futurestep report directly to the Chief Executive Officer of the Company. The Company also operates a Corporate segment to record global expenses of the Company.

The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker’s (“CODM”) review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration and acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA.

 

Financial highlights by business segment are as follows:

 

     Three Months Ended July 31, 2015  
     Executive Recruitment                           
     North
America		      EMEA      Asia
Pacific		      South
America		      Subtotal      LTC     Futurestep     Corporate     Consolidated  
     (in thousands)  

Fee revenue

    $ 90,359       $ 36,090       $ 19,215       $ 6,426       $ 152,090       $ 69,240      $ 46,064      $ —        $ 267,394   

Total revenue

    $ 94,399       $ 37,171       $ 19,990       $ 6,432       $ 157,992       $ 71,441      $ 49,902      $ —        $ 279,335   

Net income

                         $ 23,082   

Other loss, net

                           74   

Interest expense, net

                           299   

Equity in earnings of unconsolidated subsidiaries, net

                           (725 ) 

Income tax provision

                           10,174   
                       

 

 

  

Operating income (loss)

    $ 24,145       $ 6,276       $ 2,986       $ 1,508       $ 34,915       $ 7,495      $ 6,189      $ (15,695 )    $ 32,904   

Depreciation and amortization

      827         365         246         78         1,516         3,748        585        1,574        7,423   

Other income (loss), net

      32         143         18         239         432         (863 )      —          357        (74 ) 

Equity in earnings of unconsolidated subsidiaries, net

      86         —           —           —           86         —          —          639        725   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

      25,090         6,784         3,250         1,825         36,949         10,380        6,774        (13,125 )      40,978   

Integration/acquisition costs

      —           —           —           —           —           329        —          345        674   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 25,090       $ 6,784       $ 3,250       $ 1,825       $ 36,949       $ 10,709      $ 6,774      $ (12,780 )    $ 41,652   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
     Three Months Ended July 31, 2014  
     Executive Recruitment                           
     North
America		      EMEA      Asia
Pacific		      South
America		      Subtotal      LTC     Futurestep     Corporate     Consolidated  
     (in thousands)  

Fee revenue

    $ 82,300       $ 40,297       $ 19,534       $ 6,284       $ 148,415       $ 63,548      $ 39,225      $ —        $ 251,188   

Total revenue

    $ 86,082       $ 41,429       $ 20,369       $ 6,309       $ 154,189       $ 65,420      $ 40,716      $ —        $ 260,325   

Net income

                         $ 14,533   

Other income, net

                           (2,177 ) 

Interest expense, net

                           794   

Equity in earnings of unconsolidated subsidiaries, net

                           (466 ) 

Income tax provision

                           5,909   
                       

 

 

  

Operating income (loss)

    $ 18,998       $ 2,643       $ 2,522       $ 73       $ 24,236       $ 3,460      $ 3,457      $ (12,560 )      18,593   

Depreciation and amortization

      904         489         294         85         1,772         3,252        446        1,300        6,770   

Other income (loss), net

      129         46         109         33         317         217        (2 )      1,645        2,177   

Equity in earnings of unconsolidated subsidiaries, net

      68         —           —           —           68         —          —          398        466   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

      20,099         3,178         2,925         191         26,393         6,929        3,901        (9,217 )      28,006   

Restructuring charges, net

      1,151         3,987         17         377         5,532         2,758        1,424        172        9,886   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 21,250       $ 7,165       $ 2,942       $ 568       $ 31,925       $ 9,687      $ 5,325      $ (9,045 )    $ 37,892