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Business Segments
 6 Months Ended
Oct. 31, 2014
Business Segments
8. 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 provides a comprehensive blend of leadership and talent management solutions including both consulting services and product offerings. Service and product offerings in this segment include: Talent Strategy and Organizational Alignment, Succession Management, Board and CEO Services, Leadership Development and Workforce Performance, Inclusion and Diversity, all underpinned by a comprehensive array of world-leading IP, products and tools. Futurestep is a global industry leader in enterprise-wide consulting and recruitment solutions. Its portfolio of services includes RPO, talent acquisition and management consulting services, project-based recruitment, non-executive and other professional recruitment. The Executive Recruitment business segment is managed by geographic regional leaders and LTC and Futurestep worldwide operations are managed by its President and Chief Executive Officer, respectively. The Executive Recruitment geographic regional leaders, the president of LTC and Chief Executive Officer of 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) earnings before interest, taxes, depreciation and amortization (“EBITDA”), which is further adjusted to exclude restructuring charges (net of recoveries) and/or integration/acquisition 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 that do not recur on a regular basis are excluded from Adjusted EBITDA.

 

Financial highlights by business segment are as follows:

 

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

    Three Months Ended October 31, 2013  
    Executive Recruitment                          
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal     LTC     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 75,183      $ 34,221      $ 21,722      $ 8,866      $ 139,992      $ 66,078      $ 31,898      $ —        $ 237,968   

Total revenue

   $ 78,734      $ 35,240      $ 22,340      $ 8,926      $ 145,240      $ 68,202      $ 32,795      $ —        $ 246,237   

Net income

                   $ 18,759   

Other income, net

                     (4,352 ) 

Interest expense, net

                     638   

Equity in earnings of unconsolidated subsidiaries, net

                     (557 ) 

Income tax provision

                     8,677   
                 

 

 

  

Operating income (loss)

   $ 15,530      $ 5,860      $ 4,472      $ 2,265      $ 28,127      $ 7,006      $ 2,539      $ (14,507 )    $ 23,165   

Depreciation and amortization

     920        452        529        99        2,000        3,161        440        979        6,580   

Other income (loss), net

     321        48        75        7        451        45        (17 )      3,873        4,352   

Equity in earnings of unconsolidated subsidiaries, net

     120        —          —          —          120        —          —          437        557   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     16,891        6,360        5,076        2,371        30,698        10,212        2,962        (9,218 )      34,654   

Separation costs

     —          —          —          —          —          —          —          2,000        2,000   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 16,891      $ 6,360      $ 5,076      $ 2,371      $ 30,698      $ 10,212      $ 2,962      $ (7,218 )    $ 36,654   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

    Six Months Ended October 31, 2013  
    Executive Recruitment                          
    North
America		     EMEA     Asia
Pacific		     South
America		     Subtotal     LTC     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 149,330      $ 68,598      $ 42,850      $ 15,869      $ 276,647      $ 126,140      $ 63,618      $ —        $ 466,405   

Total revenue

   $ 156,845      $ 70,697      $ 44,267      $ 15,962      $ 287,771      $ 130,284      $ 65,769      $ —        $ 483,824   

Net income

                   $ 30,176   

Other income, net

                     (6,619 ) 

Interest expense, net

                     1,229   

Equity in earnings of unconsolidated subsidiaries, net

                     (1,022 ) 

Income tax provision

                     16,062   
                 

 

 

  

Operating income (loss)

   $ 31,854      $ 11,820      $ 8,972      $ 3,761      $ 56,407      $ 11,341      $ 5,084      $ (33,006 )    $ 39,826   

Depreciation and amortization

     1,883        887        835        173        3,778        6,058        848        1,840        12,524   

Other income, net

     448        282        92        10        832        53        548        5,186        6,619   

Equity in earnings of unconsolidated subsidiaries, net

     222        —          —          —          222        —          —          800        1,022   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     34,407        12,989        9,899        3,944        61,239        17,452        6,480        (25,180 )      59,991   

Restructuring charges, net

     816        460        60        —          1,336        1,149        1,134        63        3,682   

Separation costs

     —          —          —          —          —          —          —          4,500        4,500   

Integration costs

     —          —          —          —          —          —          —          394        394   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 35,223      $ 13,449      $ 9,959      $ 3,944      $ 62,575      $ 18,601      $ 7,614      $ (20,223 )    $ 68,567