Business Segments |
In the first
quarter of fiscal 2013, the Company changed the composition of its
global business segments. Given the importance to the
Company’s strategy and development of financial and
operational metrics for the LTC business services, the
Company’s chief operating decision maker (“CODM”)
began to regularly make resource allocation decisions and assess
performance separately for Executive Recruitment and LTC.
Therefore, under the new reporting format Executive Recruitment and
LTC are reported separately. Revenues are directly attributed to a
segment and expenses not directly associated with a specific
segment are allocated based on the most relevant measures
applicable, including revenues, headcount and other factors.
Operating results for fiscal 2012 and 2011 have been revised to
conform to the new segment reporting. During fiscal 2012 and 2011,
the Company also revised the presentation of expenses that are not
directly associated with Futurestep resulting in an increase in
Futurestep’s operating income of $2.2 million and $2.0
million, respectively, offset by a decrease in Executive
Recruitment operating income.
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 provider and technology
industries. LTC provides a comprehensive blend of leadership and
talent management solutions including both consulting services and
product revenue. Service and product offerings in this segment
include: Leadership Strategy, Board, CEO and Top Team
Effectiveness, Succession Planning, Assessment, Leadership and
Employee Development, Diversity and Inclusion as well as a rich
library of online and blended learning modules. Futurestep is a
global industry leader in high impact enterprise-wide consulting
and recruitment solutions. Their portfolio of services includes
recruitment process outsourcing, talent acquisition and management
consulting services, project-based recruitment, mid-level
recruitment and interim professionals. The Executive Recruitment
business segment is managed by geographic regional leaders.
LTC’s and Futurestep’s worldwide operations are managed
by their respective Chief Executive Officers. The Executive
Recruitment geographic regional leaders, 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
CODM’s review of (1) fee revenue and (2) earnings
before interest, taxes, depreciation and amortization
(“EBITDA”), which is further adjusted to exclude
restructuring charges, transaction and integration costs, and
certain separation costs (adjusted EBITDA). The accounting policies
for the reportable segments are the same as those described in the
summary of significant accounting policies, except that unusual or
infrequent items are excluded from adjusted EBITDA.
Financial
highlights by business segment are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
April 30, 2013 |
|
|
|
Executive
Recruitment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
EMEA |
|
|
Asia
Pacific |
|
|
South
America |
|
|
Subtotal |
|
|
LTC |
|
|
Futurestep |
|
|
Corporate |
|
|
Consolidated |
|
|
|
(in
thousands) |
|
Fee revenue
|
|
$ |
290,317 |
|
|
$ |
128,807 |
|
|
$ |
73,221 |
|
|
$ |
30,134 |
|
|
$ |
522,479 |
|
|
$ |
168,115 |
|
|
$ |
122,237 |
|
|
$ |
— |
|
|
$ |
812,831 |
|
Total revenue
|
|
$ |
305,993 |
|
|
$ |
132,988 |
|
|
$ |
75,359 |
|
|
$ |
30,491 |
|
|
$ |
544,831 |
|
|
$ |
176,566 |
|
|
$ |
128,304 |
|
|
$ |
— |
|
|
$ |
849,701 |
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
33,293 |
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,309 |
) |
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,365 |
|
Income tax provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,637 |
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,110 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$ |
58,832 |
|
|
$ |
9,173 |
|
|
$ |
6,973 |
|
|
$ |
5,987 |
|
|
$ |
80,965 |
|
|
$ |
6,424 |
|
|
$ |
10,975 |
|
|
$ |
(54,488 |
) |
|
|
43,876 |
|
Depreciation and
amortization
|
|
|
4,726 |
|
|
|
2,347 |
|
|
|
1,546 |
|
|
|
372 |
|
|
|
8,991 |
|
|
|
6,012 |
|
|
|
1,180 |
|
|
|
2,821 |
|
|
|
19,004 |
|
Other income (loss), net
|
|
|
466 |
|
|
|
95 |
|
|
|
200 |
|
|
|
32 |
|
|
|
793 |
|
|
|
(75 |
) |
|
|
51 |
|
|
|
5,540 |
|
|
|
6,309 |
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
434 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
434 |
|
|
|
— |
|
|
|
— |
|
|
|
1,676 |
|
|
|
2,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
64,458 |
|
|
|
11,615 |
|
|
|
8,719 |
|
|
|
6,391 |
|
|
|
91,183 |
|
|
|
12,361 |
|
|
|
12,206 |
|
|
|
(44,451 |
) |
|
|
71,299 |
|
Restructuring charges,
net
|
|
|
3,583 |
|
|
|
3,982 |
|
|
|
629 |
|
|
|
— |
|
|
|
8,194 |
|
|
|
10,198 |
|
|
|
3,527 |
|
|
|
938 |
|
|
|
22,857 |
|
Transaction and integration
costs
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,106 |
|
|
|
3,106 |
|
Separation costs
|
|
|
— |
|
|
|
516 |
|
|
|
— |
|
|
|
— |
|
|
|
516 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$ |
68,041 |
|
|
$ |
16,113 |
|
|
$ |
9,348 |
|
|
$ |
6,391 |
|
|
$ |
99,893 |
|
|
$ |
22,559 |
|
|
$ |
15,733 |
|
|
$ |
(40,407 |
) |
|
$ |
97,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets(2)
|
|
$ |
209,079 |
|
|
$ |
148,491 |
|
|
$ |
72,303 |
|
|
$ |
23,616 |
|
|
$ |
453,489 |
|
|
$ |
248,611 |
|
|
$ |
93,331 |
|
|
$ |
319,798 |
|
|
$ |
1,115,229 |
|
Long-lived assets(2)
|
|
$ |
19,167 |
|
|
$ |
6,312 |
|
|
$ |
2,784 |
|
|
$ |
894 |
|
|
$ |
29,157 |
|
|
$ |
10,383 |
|
|
$ |
2,523 |
|
|
$ |
11,565 |
|
|
$ |
53,628 |
|
Goodwill(2)
|
|
$ |
54,513 |
|
|
$ |
50,264 |
|
|
$ |
972 |
|
|
$ |
— |
|
|
$ |
105,749 |
|
|
$ |
119,090 |
|
|
$ |
32,454 |
|
|
$ |
— |
|
|
$ |
257,293 |
|
|
|
Year Ended April 30,
2012 |
|
|
|
Executive
Recruitment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
EMEA |
|
|
Asia
Pacific |
|
|
South
America |
|
|
Subtotal |
|
|
LTC |
|
|
Futurestep |
|
|
Corporate (1) |
|
|
Consolidated |
|
|
|
(in
thousands) |
|
Fee revenue
|
|
$ |
305,717 |
|
|
$ |
141,409 |
|
|
$ |
82,230 |
|
|
$ |
31,846 |
|
|
$ |
561,202 |
|
|
$ |
115,407 |
|
|
$ |
113,896 |
|
|
$ |
— |
|
|
$ |
790,505 |
|
Total revenue
|
|
$ |
323,116 |
|
|
$ |
146,573 |
|
|
$ |
84,279 |
|
|
$ |
32,517 |
|
|
$ |
586,485 |
|
|
$ |
120,281 |
|
|
$ |
119,993 |
|
|
$ |
— |
|
|
$ |
826,759 |
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
54,303 |
|
Other loss, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
271 |
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,791 |
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,351 |
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,850 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$ |
75,580 |
|
|
$ |
13,288 |
|
|
$ |
11,859 |
|
|
$ |
9,207 |
|
|
$ |
109,934 |
|
|
$ |
16,360 |
|
|
$ |
8,445 |
|
|
$ |
(51,873 |
) |
|
|
82,866 |
|
Depreciation and
amortization
|
|
|
4,624 |
|
|
|
1,881 |
|
|
|
1,268 |
|
|
|
367 |
|
|
|
8,140 |
|
|
|
2,613 |
|
|
|
1,070 |
|
|
|
2,194 |
|
|
|
14,017 |
|
Other income (loss), net
|
|
|
5 |
|
|
|
(149 |
) |
|
|
60 |
|
|
|
(61 |
) |
|
|
(145 |
) |
|
|
146 |
|
|
|
41 |
|
|
|
(313 |
) |
|
|
(271 |
) |
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
159 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
159 |
|
|
|
— |
|
|
|
— |
|
|
|
1,691 |
|
|
|
1,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
80,368 |
|
|
|
15,020 |
|
|
|
13,187 |
|
|
|
9,513 |
|
|
|
118,088 |
|
|
|
19,119 |
|
|
|
9,556 |
|
|
|
(48,301 |
) |
|
|
98,462 |
|
Restructuring charges, net
|
|
|
(15 |
) |
|
|
897 |
|
|
|
— |
|
|
|
(99 |
) |
|
|
783 |
|
|
|
— |
|
|
|
146 |
|
|
|
— |
|
|
|
929 |
|
Separation costs
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
920 |
|
|
|
999 |
|
|
|
1,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$ |
80,353 |
|
|
$ |
15,917 |
|
|
$ |
13,187 |
|
|
$ |
9,414 |
|
|
$ |
118,871 |
|
|
$ |
19,119 |
|
|
$ |
10,622 |
|
|
$ |
(47,302 |
) |
|
$ |
101,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets(2)
|
|
$ |
171,641 |
|
|
$ |
140,980 |
|
|
$ |
76,027 |
|
|
$ |
22,957 |
|
|
$ |
411,605 |
|
|
$ |
83,576 |
|
|
$ |
90,560 |
|
|
$ |
428,948 |
|
|
$ |
1,014,689 |
|
Long-lived assets(2)
|
|
$ |
22,288 |
|
|
$ |
7,542 |
|
|
$ |
3,938 |
|
|
$ |
955 |
|
|
$ |
34,723 |
|
|
$ |
2,648 |
|
|
$ |
3,420 |
|
|
$ |
9,017 |
|
|
$ |
49,808 |
|
Goodwill(2)
|
|
$ |
55,608 |
|
|
$ |
50,664 |
|
|
$ |
972 |
|
|
$ |
— |
|
|
$ |
107,244 |
|
|
$ |
36,251 |
|
|
$ |
32,843 |
|
|
$ |
— |
|
|
$ |
176,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
April 30, 2011 |
|
|
|
Executive
Recruitment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
EMEA |
|
|
Asia
Pacific |
|
|
South
America |
|
|
Subtotal |
|
|
LTC |
|
|
Futurestep |
|
|
Corporate (1) |
|
|
Consolidated |
|
|
|
(in
thousands) |
|
Fee revenue
|
|
$ |
306,180 |
|
|
$ |
137,398 |
|
|
$ |
81,951 |
|
|
$ |
29,177 |
|
|
$ |
554,706 |
|
|
$ |
99,352 |
|
|
$ |
90,191 |
|
|
$ |
— |
|
|
$ |
744,249 |
|
Total revenue
|
|
$ |
323,251 |
|
|
$ |
141,746 |
|
|
$ |
83,711 |
|
|
$ |
29,739 |
|
|
$ |
578,447 |
|
|
$ |
101,852 |
|
|
$ |
95,952 |
|
|
$ |
— |
|
|
$ |
776,251 |
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
58,874 |
|
Other income,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,454 |
) |
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,535 |
|
Income tax provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,692 |
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$ |
70,782 |
|
|
$ |
12,768 |
|
|
$ |
13,172 |
|
|
$ |
7,539 |
|
|
$ |
104,261 |
|
|
$ |
5,138 |
|
|
$ |
6,955 |
|
|
$ |
(30,569 |
) |
|
|
85,785 |
|
Depreciation and
amortization
|
|
|
3,956 |
|
|
|
1,858 |
|
|
|
919 |
|
|
|
335 |
|
|
|
7,068 |
|
|
|
2,801 |
|
|
|
926 |
|
|
|
1,876 |
|
|
|
12,671 |
|
Other income (loss), net
|
|
|
319 |
|
|
|
(156 |
) |
|
|
186 |
|
|
|
56 |
|
|
|
405 |
|
|
|
121 |
|
|
|
11 |
|
|
|
5,917 |
|
|
|
6,454 |
|
Equity in earnings of
unconsolidated subsidiaries, net
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,862 |
|
|
|
1,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
75,057 |
|
|
|
14,470 |
|
|
|
14,277 |
|
|
|
7,930 |
|
|
|
111,734 |
|
|
|
8,060 |
|
|
|
7,892 |
|
|
|
(20,914 |
) |
|
|
106,772 |
|
Restructuring charges, net
|
|
|
(340 |
) |
|
|
2,569 |
|
|
|
— |
|
|
|
— |
|
|
|
2,229 |
|
|
|
— |
|
|
|
(99 |
) |
|
|
— |
|
|
|
2,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$ |
74,717 |
|
|
$ |
17,039 |
|
|
$ |
14,277 |
|
|
$ |
7,930 |
|
|
$ |
113,963 |
|
|
$ |
8,060 |
|
|
$ |
7,793 |
|
|
$ |
(20,914 |
) |
|
$ |
108,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable
assets(2)
|
|
$ |
177,774 |
|
|
$ |
156,485 |
|
|
$ |
77,694 |
|
|
$ |
21,143 |
|
|
$ |
433,096 |
|
|
$ |
79,774 |
|
|
$ |
81,544 |
|
|
$ |
377,266 |
|
|
$ |
971,680 |
|
Long-lived
assets(2)
|
|
$ |
22,249 |
|
|
$ |
5,319 |
|
|
$ |
2,633 |
|
|
$ |
808 |
|
|
$ |
31,009 |
|
|
$ |
1,559 |
|
|
$ |
2,410 |
|
|
$ |
8,164 |
|
|
$ |
43,142 |
|
Goodwill(2)
|
|
$ |
57,319 |
|
|
$ |
53,908 |
|
|
$ |
972 |
|
|
$ |
— |
|
|
$ |
112,199 |
|
|
$ |
36,251 |
|
|
$ |
35,502 |
|
|
$ |
— |
|
|
$ |
183,952 |
|
(1) |
The Company recorded an
adjustment to the fair value of contingent consideration for a
prior acquisition of $2.2 million and $4.9 million during the years
ended April 30, 2012 and 2011, respectively. |
(2) |
As of the end of the fiscal
year. |
Fee revenue
attributed to an individual customer or country, other than the
United States, did not account for more than 10% of the total in
fiscal year 2013, 2012 or 2011. Fee revenue classified by country
in which the Company derives revenues are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
April 30, |
|
|
|
2013 |
|
|
2012 |
|
|
2011 |
|
|
|
(in thousands) |
|
United States
|
|
$ |
416,987 |
|
|
$ |
383,955 |
|
|
$ |
365,919 |
|
Other countries
|
|
|
395,844 |
|
|
|
406,550 |
|
|
|
378,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fee
revenue
|
|
$ |
812,831 |
|
|
$ |
790,505 |
|
|
$ |
744,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets, excluding financial instruments and tax assets, classified
by controlling countries over 10% of the total are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
April 30, |
|
|
|
2013 |
|
|
2012 |
|
|
2011 |
|
|
|
(in thousands) |
|
United States(1)
|
|
$ |
40,200 |
|
|
$ |
33,559 |
|
|
$ |
30,539 |
|
United Kingdom
|
|
|
2,982 |
|
|
|
3,741 |
|
|
|
4,323 |
|
Other countries
|
|
|
10,446 |
|
|
|
12,508 |
|
|
|
8,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-lived
assets
|
|
$ |
53,628 |
|
|
$ |
49,808 |
|
|
$ |
43,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes Corporate
long-lived assets |
|