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Business Segments
 3 Months Ended
Jul. 31, 2016
Business Segments
9. Business Segments

The Company currently operates in three global businesses: Executive Search, Hay Group and Futurestep. The Executive Search 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. Hay Group assists clients with ongoing assessment, compensation and development of their senior executives and management teams, and addresses three fundamental needs: Talent Strategy, Succession Management, and Leadership Development, all underpinned by a comprehensive array of world-leading IP, products and tools. Futurestep is a global industry leader in high-impact talent acquisition solutions. Its portfolio of services includes global and regional RPO, project recruitment, individual professional search and consulting. The Executive Search business segment is managed by geographic regional leaders and Hay Group and Futurestep worldwide operations are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Hay Group 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 Company’s chief operating decision maker’s (“CODM”) review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA.

Financial highlights by business segment are as follows:

 

    Three Months Ended July 31, 2016  
    Executive Search                          
    North
America		     EMEA     Asia Pacific     Latin
America		     Subtotal     Hay Group     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 81,802      $ 35,370      $ 19,626      $ 9,563      $ 146,361      $ 174,582      $ 54,678      $ —        $ 375,621   

Deferred revenue adjustment due to acquisition

     —          —          —          —          —          3,535        —          —          3,535   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted fee revenue

   $ 81,802      $ 35,370      $ 19,626      $ 9,563      $ 146,361      $ 178,117      $ 54,678      $ —        $ 379,156   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenue

   $ 85,425      $ 36,249      $ 20,180      $ 9,614      $ 151,468      $ 181,508      $ 59,957      $ —        $ 392,933   

Net income

                     4,068   

Other income, net

                     (4,259 ) 

Interest expense, net

                     3,061   

Equity in earnings of unconsolidated subsidiaries, net

                     (79 ) 

Income tax provision

                     1,725   
                 

 

 

  

Operating income (loss)

   $ 16,468      $ 6,027      $ 2,102      $ 2,330      $ 26,927      $ (7,743 )    $ 7,513      $ (22,181 )    $ 4,516   

Depreciation and amortization

     830        211        225        114        1,380        8,016        623        1,425        11,444   

Other income (loss), net

     288        24        87        73        472        235        (2 )      3,554        4,259   

Equity in earnings of unconsolidated subsidiaries, net

     79        —          —          —          79        —          —          —          79   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     17,665        6,262        2,414        2,517        28,858        508        8,134        (17,202 )      20,298   

Restructuring charges, net

     1,706        128        622        360        2,816        21,488        —          216        24,520   

Integration/acquisition costs

     —          —          —          —          —          4,264        —          3,763        8,027   

Deferred revenue adjustment due to acquisition

     —          —          —          —          —          3,535        —          —          3,535   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 19,371      $ 6,390      $ 3,036      $ 2,877      $ 31,674      $ 29,795      $ 8,134      $ (13,223 )    $ 56,380   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

    Three Months Ended July 31, 2015  
    Executive Search                          
    North
America		     EMEA     Asia Pacific     Latin
America		     Subtotal     Hay Group     Futurestep     Corporate     Consolidated  
    (in thousands)  

Fee revenue

   $ 90,359      $ 36,090      $ 19,215      $ 6,426      $ 152,090      $ 69,240      $ 46,064      $ —        $ 267,394   

Total revenue

   $ 94,399      $ 37,171      $ 19,990      $ 6,432      $ 157,992      $ 71,441      $ 49,902      $ —        $ 279,335   

Net income

                   $ 23,082   

Other loss, net

                     74   

Interest expense, net

                     299   

Equity in earnings of unconsolidated subsidiaries, net

                     (725 ) 

Income tax provision

                     10,174   
                 

 

 

  

Operating income (loss)

   $ 24,145      $ 6,276      $ 2,986      $ 1,508      $ 34,915      $ 7,495      $ 6,189      $ (15,695 )    $ 32,904   

Depreciation and amortization

     827        365        246        78        1,516        3,748        585        1,574        7,423   

Other income (loss), net

     32        143        18        239        432        (863 )      —          357        (74 ) 

Equity in earnings of unconsolidated subsidiaries, net

     86        —          —          —          86        —          —          639        725   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

     25,090        6,784        3,250        1,825        36,949        10,380        6,774        (13,125 )      40,978   

Integration/acquisition costs

     —          —          —          —          —          329        —          345        674   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ 25,090      $ 6,784      $ 3,250      $ 1,825      $ 36,949      $ 10,709      $ 6,774      $ (12,780 )    $ 41,652