Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.3.1.900
Business Segments
 6 Months Ended
Oct. 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 October 31, 2015  
    Executive Recruitment     LTC     Futurestep     Corporate     Consolidated  
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal          
    (in thousands)  

Fee revenue

   $ 92,788      $ 36,570      $ 20,998      $ 6,116      $ 156,472      $ 73,602      $ 50,526      $ —        $ 280,600   

Total revenue

   $ 96,198      $ 37,509      $ 21,617      $ 6,118      $ 161,442      $ 75,991      $ 53,906      $ —        $ 291,339   

Net income

                   $ 17,971   

Other loss, net

                     2,646   

Interest expense, net

                     544   

Equity in earnings of unconsolidated subsidiaries, net

                     (540 ) 

Income tax provision

                     8,392   
                 

 

 

  

Operating income (loss)

   $ 27,422      $ 6,929      $ 3,907      $ 970      $ 39,228      $ 7,778      $ 6,896      $ (24,889 )    $ 29,013   

Depreciation and amortization

     832        232        223        73        1,360        3,588        578        1,654        7,180   

Other (loss) income, net

     (127 )      7        (6 )      33        (93 )      (17 )      8        (2,544 )      (2,646 ) 

Equity in earnings of unconsolidated subsidiaries, net

     140        —          —          —          140        —          —          400        540   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     28,267        7,168        4,124        1,076        40,635        11,349        7,482        (25,379 )      34,087   

Integration/acquisition costs

     —          —          —          —          —          3,310        —          8,684        11,994   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 28,267      $ 7,168      $ 4,124      $ 1,076      $ 40,635      $ 14,659      $ 7,482      $ (16,695 )    $ 46,081   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

Fee revenue

   $ 82,729      $ 36,675      $ 21,157      $ 8,369      $ 148,930      $ 66,408      $ 40,364      $ —        $ 255,702   

Total revenue

   $ 86,252      $ 38,054      $ 21,716      $ 8,383      $ 154,405      $ 68,477      $ 41,835      $ —        $ 264,717   

Net income

                   $ 25,403   

Other income, net

                     (2,362 ) 

Interest expense, net

                     920   

Equity in earnings of unconsolidated subsidiaries, net

                     (452 ) 

Income tax provision

                     10,907   
                 

 

 

  

Operating income (loss)

   $ 19,117      $ 5,621      $ 3,424      $ 1,699      $ 29,861      $ 7,762      $ 5,150      $ (8,357 )    $ 34,416   

Depreciation and amortization

     891        446        261        85        1,683        3,279        459        1,358        6,779   

Other income (loss), net

     194        (1 )      149        13        355        (172 )      25        2,154        2,362   

Equity in earnings of unconsolidated subsidiaries, net

     110        —          —          —          110        —          —          342        452   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     20,312        6,066        3,834        1,797        32,009        10,869        5,634        (4,503 )      44,009   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 20,312      $ 6,066      $ 3,834      $ 1,797      $ 32,009      $ 10,869      $ 5,634      $ (4,503 )    $ 44,009   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

Fee revenue

   $ 183,147      $ 72,660      $ 40,213      $ 12,542      $ 308,562      $ 142,842      $ 96,590      $ —        $ 547,994   

Total revenue

   $ 190,597      $ 74,680      $ 41,607      $ 12,550      $ 319,434      $ 147,432      $ 103,808      $ —        $ 570,674   

Net income

                   $ 41,053   

Other loss, net

                     2,720   

Interest expense, net

                     843   

Equity in earnings of unconsolidated subsidiaries, net

                     (1,265 ) 

Income tax provision

                     18,566   
                 

 

 

  

Operating income (loss)

   $ 51,567      $ 13,205      $ 6,893      $ 2,478      $ 74,143      $ 15,273      $ 13,085      $ (40,584 )    $ 61,917   

Depreciation and amortization

     1,659        597        469        151        2,876        7,336        1,163        3,228        14,603   

Other (loss) income, net

     (95 )      150        12        272        339        (880 )      8        (2,187 )      (2,720 ) 

Equity in earnings of unconsolidated subsidiaries, net

     226        —          —          —          226        —          —          1,039        1,265   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     53,357        13,952        7,374        2,901        77,584        21,729        14,256        (38,504 )      75,065   

Integration/acquisition costs

     —          —          —          —          —          3,639        —          9,029        12,668   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 53,357      $ 13,952      $ 7,374      $ 2,901      $ 77,584      $ 25,368      $ 14,256      $ (29,475 )    $ 87,733   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

Fee revenue

   $ 165,029      $ 76,972      $ 40,691      $ 14,653      $ 297,345      $ 129,956      $ 79,589      $ —        $ 506,890   

Total revenue

   $ 172,334      $ 79,483      $ 42,085      $ 14,692      $ 308,594      $ 133,897      $ 82,551      $ —        $ 525,042   

Net income

                   $ 39,936   

Other income, net

                     (4,539 ) 

Interest expense, net

                     1,714   

Equity in earnings of unconsolidated subsidiaries, net

                     (918 ) 

Income tax provision

                     16,816   
                 

 

 

  

Operating income (loss)

   $ 38,115      $ 8,264      $ 5,946      $ 1,772      $ 54,097      $ 11,222      $ 8,607      $ (20,917 )    $ 53,009   

Depreciation and amortization

     1,795        935        555        170        3,455        6,531        905        2,658        13,549   

Other income, net

     323        45        258        46        672        45        23        3,799        4,539   

Equity in earnings of unconsolidated subsidiaries, net

     178        —          —          —          178        —          —          740        918   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     40,411        9,244        6,759        1,988        58,402        17,798        9,535        (13,720 )      72,015   

Restructuring charges, net

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 41,562      $ 13,231      $ 6,776      $ 2,365      $ 63,934      $ 20,556      $ 10,959      $ (13,548 )    $ 81,901