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Segments | 12 Months Ended
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Apr. 30, 2019
Segment Reporting [Abstract] |
Segments | 11. Segments The Company currently operates through three global segments: Executive Search, Advisory and RPO & Professional Search. The Executive Search segment focuses on recruiting board level, chief executive and other senior executive and general management positions, in addition to research-based interviewing and onboarding solutions, for clients predominantly in the consumer goods, financial services, industrial, life sciences/healthcare and technology industries. Advisory assists clients to synchronize strategy and talent by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership Development and Rewards and Benefits, all underpinned by a comprehensive array of world-leading IP, products and tools. RPO & Professional Search 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 segment is managed by geographic regional leaders and Advisory and RPO & Professional Search worldwide operations are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Advisory and RPO & Professional Search 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. For fiscal 2017, Adjusted EBITDA included deferred revenue adjustment related to the Hay Group acquisition, reflecting revenue that Advisory would have realized if not for business combination accounting that requires a company to record the acquisition balance sheet at fair value and write-off deferred revenue where no future services are required to be performed to earn that revenue. For fiscal 2019 and 2018, management no longer had adjusted fee revenue. 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 operating segment are as follows:
|  | Year Ended April 30, 2019 |
|  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | Advisory |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 455,826 |  |  | $ | 182,829 |  |  | $ | 104,291 |  |  | $ | 31,896 |  |  | $ | 774,842 |  |  | $ | 821,048 |  |  | $ | 330,143 |  |  | $ | — |  |  | $ | 1,926,033 |
Total revenue |  | $ | 469,743 |  |  | $ | 186,131 |  |  | $ | 105,543 |  |  | $ | 31,960 |  |  | $ | 793,377 |  |  | $ | 838,620 |  |  | $ | 341,865 |  |  | $ | — |  |  | $ | 1,973,862 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 102,651 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,145 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (10,094 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 16,891 |
Equity in earnings of unconsolidated subsidiaries, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (311 | )
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29,544 |
Operating income (loss) |  | $ | 120,754 |  |  | $ | 29,974 |  |  | $ | 24,364 |  |  | $ | 3,998 |  |  | $ | 179,090 |  |  | $ | 5,617 |  |  | $ | 50,884 |  |  | $ | (94,765 | ) |  | $ | 140,826 |
Depreciation and amortization |  |  | 3,890 |  |  |  | 1,254 |  |  |  | 1,428 |  |  |  | 410 |  |  |  | 6,982 |  |  |  | 29,057 |  |  |  | 3,255 |  |  |  | 7,195 |  |  |  | 46,489 |
Other income (loss), net |  |  | 6,388 |  |  |  | 432 |  |  |  | 281 |  |  |  | 322 |  |  |  | 7,423 |  |  |  | 3,198 |  |  |  | 268 |  |  |  | (795 | ) |  |  | 10,094 |
Equity in earnings of unconsolidated subsidiaries, net |  |  | 311 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 311 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 311 |
EBITDA |  |  | 131,343 |  |  |  | 31,660 |  |  |  | 26,073 |  |  |  | 4,730 |  |  |  | 193,806 |  |  |  | 37,872 |  |  |  | 54,407 |  |  |  | (88,365 | ) |  |  | 197,720 |
Integration/acquisition costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,559 |  |  |  | — |  |  |  | 187 |  |  |  | 6,746 |
Tradename write-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 106,555 |  |  |  | — |  |  |  | — |  |  |  | 106,555 |
Adjusted EBITDA |  | $ | 131,343 |  |  | $ | 31,660 |  |  | $ | 26,073 |  |  | $ | 4,730 |  |  | $ | 193,806 |  |  | $ | 150,986 |  |  | $ | 54,407 |  |  | $ | (88,178 | ) |  | $ | 311,021 |
Identifiable assets (1) |  | $ | 427,089 |  |  | $ | 171,120 |  |  | $ | 116,006 |  |  | $ | 24,600 |  |  | $ | 738,815 |  |  | $ | 1,045,432 |  |  | $ | 166,492 |  |  | $ | 384,113 |  |  | $ | 2,334,852 |
Long-lived assets (1) |  | $ | 19,864 |  |  | $ | 9,266 |  |  | $ | 9,255 |  |  | $ | 2,711 |  |  | $ | 41,096 |  |  | $ | 46,689 |  |  | $ | 8,980 |  |  | $ | 34,740 |  |  | $ | 131,505 |
Goodwill (1) |  | $ | 46,571 |  |  | $ | 45,480 |  |  | $ | 972 |  |  | $ | — |  |  | $ | 93,023 |  |  | $ | 457,361 |  |  | $ | 27,914 |  |  | $ | — |  |  | $ | 578,298 |
(1) | As of the end of the fiscal year.
|  | Year Ended April 30, 2018 |
|  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | Advisory |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 408,098 |  |  | $ | 173,725 |  |  | $ | 96,595 |  |  | $ | 30,624 |  |  | $ | 709,042 |  |  | $ | 785,013 |  |  | $ | 273,162 |  |  | $ | — |  |  | $ | 1,767,217 |
Total revenue |  | $ | 421,260 |  |  | $ | 177,234 |  |  | $ | 98,062 |  |  | $ | 30,717 |  |  | $ | 727,273 |  |  | $ | 801,005 |  |  | $ | 291,241 |  |  | $ | — |  |  | $ | 1,819,519 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 133,779 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,118 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (11,119 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 13,832 |
Equity in earnings of unconsolidated subsidiaries, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (297 | )
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 70,133 |
Operating income (loss) |  | $ | 100,397 |  |  | $ | 26,768 |  |  | $ | 18,425 |  |  | $ | 4,022 |  |  | $ | 149,612 |  |  | $ | 100,535 |  |  | $ | 39,396 |  |  | $ | (81,097 | ) |  | $ | 208,446 |
Depreciation and amortization |  |  | 3,930 |  |  |  | 1,689 |  |  |  | 1,408 |  |  |  | 455 |  |  |  | 7,482 |  |  |  | 31,527 |  |  |  | 3,054 |  |  |  | 6,525 |  |  |  | 48,588 |
Other income, net |  |  | 845 |  |  |  | 168 |  |  |  | 373 |  |  |  | 181 |  |  |  | 1,567 |  |  |  | 2,501 |  |  |  | 152 |  |  |  | 6,899 |  |  |  | 11,119 |
Equity in earnings of unconsolidated subsidiaries, net |  |  | 297 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 297 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 297 |
EBITDA |  |  | 105,469 |  |  |  | 28,625 |  |  |  | 20,206 |  |  |  | 4,658 |  |  |  | 158,958 |  |  |  | 134,563 |  |  |  | 42,602 |  |  |  | (67,673 | ) |  |  | 268,450 |
Restructuring charges (recoveries), net |  |  | — |  |  |  | — |  |  |  | 313 |  |  |  | — |  |  |  | 313 |  |  |  | (241 | ) |  |  | 6 |  |  |  | — |  |  |  | 78 |
Integration/acquisition costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,151 |  |  |  | — |  |  |  | 279 |  |  |  | 9,430 |
Adjusted EBITDA |  | $ | 105,469 |  |  | $ | 28,625 |  |  | $ | 20,519 |  |  | $ | 4,658 |  |  | $ | 159,271 |  |  | $ | 143,473 |  |  | $ | 42,608 |  |  | $ | (67,394 | ) |  | $ | 277,958 |
Identifiable assets (1) |  | $ | 411,347 |  |  | $ | 198,815 |  |  | $ | 98,599 |  |  | $ | 23,832 |  |  | $ | 732,593 |  |  | $ | 1,092,474 |  |  | $ | 144,160 |  |  | $ | 318,687 |  |  | $ | 2,287,914 |
Long-lived assets (1) |  | $ | 22,813 |  |  | $ | 11,018 |  |  | $ | 10,834 |  |  | $ | 3,203 |  |  | $ | 47,868 |  |  | $ | 42,605 |  |  | $ | 6,390 |  |  | $ | 23,038 |  |  | $ | 119,901 |
Goodwill (1) |  | $ | 47,757 |  |  | $ | 47,501 |  |  | $ | 972 |  |  | $ | — |  |  | $ | 96,230 |  |  | $ | 458,169 |  |  | $ | 29,823 |  |  | $ | — |  |  | $ | 584,222 |
(1) | As of the end of the fiscal year.
|  | Year Ended April 30, 2017 |
|  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | Advisory |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 356,625 |  |  | $ | 146,506 |  |  | $ | 80,169 |  |  | $ | 34,376 |  |  | $ | 617,676 |  |  | $ | 724,186 |  |  | $ | 223,659 |  |  | $ | — |  |  | $ | 1,565,521 |
Deferred revenue adjustment due to acquisition |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,535 |  |  |  | — |  |  |  | — |  |  |  | 3,535 |
Adjusted fee revenue |  | $ | 356,625 |  |  | $ | 146,506 |  |  | $ | 80,169 |  |  | $ | 34,376 |  |  | $ | 617,676 |  |  | $ | 727,721 |  |  | $ | 223,659 |  |  | $ | — |  |  | $ | 1,569,056 |
Total revenue |  | $ | 369,803 |  |  | $ | 150,113 |  |  | $ | 81,744 |  |  | $ | 34,533 |  |  | $ | 636,193 |  |  | $ | 741,533 |  |  | $ | 243,943 |  |  | $ | — |  |  | $ | 1,621,669 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 84,181 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,057 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (10,328 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 14,607 |
Equity in earnings of unconsolidated subsidiaries, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (333 | )
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29,104 |
Operating income (loss) |  | $ | 81,621 |  |  | $ | 27,854 |  |  | $ | 8,580 |  |  | $ | 6,268 |  |  | $ | 124,323 |  |  | $ | 47,429 |  |  | $ | 29,995 |  |  | $ | (81,459 | ) |  | $ | 120,288 |
Depreciation and amortization |  |  | 3,812 |  |  |  | 1,030 |  |  |  | 1,060 |  |  |  | 483 |  |  |  | 6,385 |  |  |  | 32,262 |  |  |  | 2,818 |  |  |  | 5,795 |  |  |  | 47,260 |
Other income (loss), net |  |  | 844 |  |  |  | (15 | ) |  |  | 300 |  |  |  | 684 |  |  |  | 1,813 |  |  |  | 1,900 |  |  |  | (91 | ) |  |  | 6,706 |  |  |  | 10,328 |
Equity in earnings of unconsolidated subsidiaries, net |  |  | 333 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 333 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 333 |
EBITDA |  |  | 86,610 |  |  |  | 28,869 |  |  |  | 9,940 |  |  |  | 7,435 |  |  |  | 132,854 |  |  |  | 81,591 |  |  |  | 32,722 |  |  |  | (68,958 | ) |  |  | 178,209 |
Restructuring charges, net |  |  | 1,719 |  |  |  | 629 |  |  |  | 1,495 |  |  |  | 773 |  |  |  | 4,616 |  |  |  | 29,663 |  |  |  | 101 |  |  |  | 220 |  |  |  | 34,600 |
Integration/acquisition costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14,440 |  |  |  | — |  |  |  | 7,939 |  |  |  | 22,379 |
Deferred revenue adjustment due to acquisition |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,535 |  |  |  | — |  |  |  | — |  |  |  | 3,535 |
Separation costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 609 |  |  |  | — |  |  |  | — |  |  |  | 609 |
Adjusted EBITDA |  | $ | 88,329 |  |  | $ | 29,498 |  |  | $ | 11,435 |  |  | $ | 8,208 |  |  | $ | 137,470 |  |  | $ | 129,838 |  |  | $ | 32,823 |  |  | $ | (60,799 | ) |  | $ | 239,332 |
Identifiable assets (1) |  | $ | 340,069 |  |  | $ | 158,927 |  |  | $ | 87,845 |  |  | $ | 26,897 |  |  | $ | 613,738 |  |  | $ | 1,057,611 |  |  | $ | 116,717 |  |  | $ | 274,832 |  |  | $ | 2,062,898 |
Long-lived assets (1) |  | $ | 23,746 |  |  | $ | 11,089 |  |  | $ | 8,371 |  |  | $ | 3,262 |  |  | $ | 46,468 |  |  | $ | 37,846 |  |  | $ | 6,693 |  |  | $ | 18,560 |  |  | $ | 109,567 |
Goodwill (1) |  | $ | 46,201 |  |  | $ | 44,976 |  |  | $ | 972 |  |  | $ | — |  |  | $ | 92,149 |  |  | $ | 457,241 |  |  | $ | 27,475 |  |  | $ | — |  |  | $ | 576,865 |
(1) | As of the end of the fiscal year.
Fee revenue attributed to an individual customer or country, other than the U.S. and United Kingdom, did not account for more than 10% of the total fee revenue in fiscal 2019, 2018 or 2017. Fee revenue classified by country in which the Company derives revenues are as follows:
|  | Year Ended April 30, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
|  | (in thousands) |
U.S. |  | $ | 859,969 |  |  | $ | 778,470 |  |  | $ | 728,871 |
United Kingdom |  |  | 202,055 |  |  |  | 176,091 |  |  |  | 145,551 |
Other countries |  |  | 864,009 |  |  |  | 812,656 |  |  |  | 691,099 |
Total fee revenue |  | $ | 1,926,033 |  |  | $ | 1,767,217 |  |  | $ | 1,565,521 |
Other than the U.S., no single country controlled over 10% of the total long-lived assets, excluding financial instruments and tax assets. Long-lived assets, excluding financial instruments and tax assets, classified by controlling country are as follows:
|  | Year Ended April 30, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
|  | (in thousands) |
U.S. (1) |  | $ | 98,455 |  |  | $ | 80,424 |  |  | $ | 70,949 |
Other countries |  |  | 33,050 |  |  |  | 39,477 |  |  |  | 38,618 |
Total long-lived assets |  | $ | 131,505 |  |  | $ | 119,901 |  |  | $ | 109,567 |
(1) | Includes Corporate long-lived assets

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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