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Korn/Ferry International (KFY)
Q3 2013 Earnings Call
March 06, 2013 4:30 pm ET
Gary D. Burnison - Chief Executive Officer, President, Treasurer and Executive Director
Robert P. Rozek - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Frank Atkins - SunTrust Robinson Humphrey, Inc., Research Division
Kelly A. Flynn - Crédit Suisse AG, Research Division
Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division
Previous Statements by KFY
» Korn/Ferry International F1Q10 (Qtr End 07/31/09) Earnings Call Transcript
» Korn/Ferry International F3Q09 (Qtr End 01/31/09) Earnings Call Transcript
» Korn/Ferry International F2Q09 (Quarter End 10/31/08) Earnings Call Transcript
Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, plans and goals, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties which are beyond the company's control. Additional information concerning such risks and uncertainties can be found in the release relating to this presentation, in the company's annual report for fiscal 2012 and in other periodic reports filed by the company with the SEC.
Also, some of the comments today may reference non-GAAP financial measures, such as constant currency amounts. Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measure, is contained in the release relating to this call, which is posted on the company's website at www.kornferry.com.
With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. Burnison.
Gary D. Burnison
Well, thank you, everybody, and good afternoon. I'm pleased with our results for the quarter and, more importantly, our strategic progress as a firm. The revenue for the quarter was $202 million. That's up 9% over last year, 2% on an organic basis. Our adjusted operating margin was 8%, and we achieved $0.31 of adjusted EPS. The balance sheet continues to be very strong with $305 million of cash and marketable securities and no debt.
The pull of our strategy that we put in place several years ago was evident again this quarter with the overall growth year-over-year within our broader talent management offerings. Futurestep was up 17% year-over-year, and our Leadership business was up about 5% organically. Obviously, it was up a lot more if you include the recent acquisition. And our flagship search business was up 2% sequentially and still continues to maintain its industry-leading position.
We talk a lot at Korn/Ferry about common purpose, and our common purpose is to accelerate the destination of our clients and change the lives of people, of clients, candidates and colleagues. And today, when you look around the world, CEOs are faced with a wide variety of issues, most importantly, a fight for relevancy and growth.
And, ultimately, regardless of the path that they choose, their organizations, workforce, their people, that's what matters most. So questions like, how can a workforce become better aligned with the strategy? What skills are required to execute on their vision? What talent is needed? How will they overcome fatigue, accelerate engagement and establish a common purpose in an overly-connected world? And that's exactly what this firm is poised to do.
When I think about our organization and the strategic progress that we've made, I would use the word transformation. I mean, if you did Google Earth on us today, it looks substantially different than it did just a few years ago. If you consider today that almost 40% of our revenue is being driven across broader talent solutions, that really wasn't in place not that long ago. And so, as an organization, as the premier provider of talent management solutions, our mission is to accelerate our clients' success, and doing that by more effectively linking their business and talent strategies.
And if you look at the organization today, we essentially do 3 things: We can help an organization design a talent strategy; we can help an organization develop its people; and, finally, we can help an organization with the attraction of new talent into the organization. Within the talent strategy design bucket, there's a whole host of solutions, from organizational design to strategy and talent alignment.
When you look at developing a workforce, our solutions there would range from Board effectiveness to succession planning, CEO and top team effectiveness, leadership development, diversity and inclusion and then the online and blended learning products.
And finally, when you look at the bucket around talent attraction, that would include our flagship Executive Search business, our Board-recruiting business, our RPO business, onboarding, interviewing techniques and the like. So this is a definitely -- when you look at our company today, it's a different firm. But I'd point out that Search, for us, is the anchor, and it provides a significant competitive advantage, namely access and permission to talk about a client's broader talent agenda. And so, we're going to go forward following the strategy that we put in place several years ago to be able to deliver a comprehensive approach to talent.
So #1, we're going to continue to drive a solutions-based, go-to-market strategy; secondly, deliver client excellence through intellectual property and process and technology. We obviously are extending the brand of Korn/Ferry and also elevating it. We have to make our own organization, continue to make that a premiere career destination, developing, building bottom-up capabilities within our workforce. So then, finally, as evidenced by our most recent acquisition of PDI Ninth House, pursue a long-term growth strategy through a pragmatic approach to M&A that really serves to differentiate our organization and give us reasons to talk to clients throughout the whole year.