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Business Segments
 6 Months Ended
Oct. 31, 2012
Business Segments

8. 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 Leadership & Talent Consulting 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 Leadership & Talent Consulting. Therefore, under the new reporting format Executive Recruitment and Leadership & Talent Consulting 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 three and six month ended October 31, 2011 have been revised to conform to the new segment reporting. During the three and six months ended October 31, 2012, 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 $0.6 million and $1.1 million, respectively, offset by a decrease in Executive Recruitment operating income.

The Company currently operates in three global business segments: Executive Recruitment, Leadership & Talent Consulting and Futurestep. The Executive Recruitment segment focuses on recruiting board-level, chief executive and other senior executive positions for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare provider and technology industries. Leadership & Talent Consulting provides a comprehensive blend of leadership and talent management solutions that assist clients with their ongoing assessment of executives, organizational alignment and leadership development efforts and provides other services related to recruiting. These solutions address five fundamental needs, board effectiveness, CEO & top team effectiveness, leadership development & enterprise learning, organization transformation and integrated talent management. Futurestep creates customized and flexible recruitment solutions to meet specific workforce needs of organizations around the world. 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. Leadership & Talent Consulting’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 Leadership & Talent Consulting 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) segment income (loss). 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 segment income (loss).

Financial highlights by business segment are as follows:

 

    Three Months Ended October 31, 2012  
    Executive Recruitment     Leadership                    
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal     and Talent
Consulting		     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 69,441      $ 33,142      $ 18,338      $ 6,827      $ 127,748      $ 38,452      $ 30,031      $ —        $ 196,231   

Segment income (loss)

   $ 14,453      $ 3,823      $ 1,693      $ 1,217      $ 21,186      $ 6,929      $ 3,323      $ (13,174 )    $ 18,264   

Restructuring charges, net

     5,436        4,752        613        —          10,801        677        3,086        931        15,495   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss)

   $ 9,017      $ (929 )    $ 1,080      $ 1,217      $ 10,385      $ 6,252      $ 237      $ (14,105 )    $ 2,769   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    Three Months Ended October 31, 2011  
    Executive Recruitment     Leadership                    
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal     and Talent
Consulting		     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 77,525      $ 35,408      $ 21,827      $ 7,707      $ 142,467      $ 29,085      $ 28,584      $ —        $ 200,136   

Segment income (loss)

   $ 21,291      $ 5,028      $ 3,590      $ 2,215      $ 32,124      $ 4,227      $ 2,815      $ (13,759 )    $ 25,407   
    Six Months Ended October 31, 2012  
    Executive Recruitment     Leadership                    
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal     and Talent
Consulting		     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 141,547      $ 62,965      $ 35,721      $ 14,961      $ 255,194      $ 66,844      $ 60,887      $ —        $ 382,925   

Segment income (loss)

   $ 32,527      $ 5,611      $ 2,191      $ 3,306      $ 43,635      $ 11,191      $ 6,505      $ (26,058 )    $ 35,273   

Restructuring charges, net

     5,436        4,752        613        —          10,801        677        3,086        931        15,495   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss)

   $ 27,091      $ 859      $ 1,578      $ 3,306      $ 32,834      $ 10,514      $ 3,419      $ (26,989 )    $ 19,778   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    Six Months Ended October 31, 2011  
    Executive Recruitment     Leadership                    
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal     and Talent
Consulting		     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 157,449      $ 74,239      $ 44,323      $ 15,948      $ 291,959      $ 55,726      $ 58,782      $ —        $ 406,467   

Segment income (loss)

   $ 42,816      $ 10,032      $ 7,461      $ 4,885      $ 65,194      $ 6,194      $ 5,671      $ (25,710 )    $ 51,349