Korn Ferry Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Restructuring Charges, Net

Restructuring Charges, Net

12 Months Ended

Apr. 30, 2013

7.	Restructuring Charges, Net

During fiscal 2013, the Company implemented restructuring plans in order to align its cost structure to anticipated revenue levels and to integrate PDI Ninth House (“PDI”) in order to eliminate redundant positions and consolidate premises. This resulted in restructuring charges of $22.8 million against operations during fiscal 2013 of which $16.3 million relates to severance and $6.5 million relates to consolidation of premises.

During fiscal 2012 and 2011, the Company increased previously recorded restructuring charges resulting in restructuring costs of $0.9 million and $2.1 million, respectively. The increase in restructuring expense primarily relates to the inability to sublease space, which was included in the original estimate.

Changes in the restructuring liability are as follows:


	Severance			Facilities			Total
	(in thousands)
Liability as of April 30, 2011	$	978		$	3,943		$	4,921
Restructuring (reductions) charges, net		(324	)		1,253			929
Reductions for cash payments		(586	)		(2,324	)		(2,910	)
Exchange rate fluctuations		(30	)		(140	)		(170	)

Liability as of April 30, 2012		38			2,732			2,770
Restructuring charges, net(1)		16,369			6,488			22,857
Reductions for cash payments, net of recoveries		(11,561	)		(2,437	)		(13,998	)
Exchange rate fluctuations		(27	)		(54	)		(81	)

Liability as of April 30, 2013	$	4,819		$	6,729		$	11,548

(1)	During fiscal 2013, the Company recovered $1.0 million from a legal settlement (related to premises) attributable to a previous restructuring action.

As of April 30, 2013 and 2012, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $2.4 million and $1.4 million, respectively, of facilities costs which primarily relate to commitments under operating leases, net of sublease income, which are included in other long-term liabilities and will be paid over the next five years.

The restructuring liability by segment is summarized below:


	April 30, 2013
	Severance		Facilities		Total
	(in thousands)
Executive Recruitment
North America	$	918	$	659	$	1,577
Europe, Middle East and Africa (“EMEA”)		678		856		1,534
Asia Pacific		—		69		69

Total Executive Recruitment		1,596		1,584		3,180
LTC		2,497		3,956		6,453
Futurestep		277		1,189		1,466
Corporate		449		—		449

Liability as of April 30, 2013	$	4,819	$	6,729	$	11,548


	April 30, 2012
	Severance		Facilities		Total
	(in thousands)
Executive Recruitment
North America	$	—	$	43	$	43
EMEA		38		1,780		1,818

Total Executive Recruitment		38		1,823		1,861
Futurestep		—		909		909

Liability as of April 30, 2012	$	38	$	2,732	$	2,770

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details