Korn Ferry (NYSE:KFY) Q3 2015 Earnings Conference Call - Final Transcript

Mar 09, 2015 • 04:30 pm ET

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Korn Ferry (NYSE:KFY) Q3 2015 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question comes from the line of George Tong with Piper Jaffray. Please go ahead.

Analyst
George Tong

Hi. Good afternoon.

Executive
Gary Burnison

Hi, George.

Analyst
George Tong

Could you provide some additional context around why weighted average fee built per engagement stepped down modestly in Executive Search this quarter?

Executive
Gary Burnison

Yeah. I think a lot of it was due to the currency impact from the overseas revenues, George, that we experienced in the quarter. And on any given quarter you get a little bit of a mix in terms of you're doing more CEO or higher level searches versus other senior management positions. The other thing I would say is in this quarter we typically have a handful of relatively large search engagements that we didn't see those in this particular quarter.

Executive
Gregg Kvochak

Yes, and also, George, obviously you noted that we're up four consultants on a sequential basis.

Executive
Gary Burnison

So that there is some ramp up time associated with those.

Executive
Gregg Kvochak

Ramp up time associated with those.

Analyst
George Tong

All right. And then, looking more specifically at North America Executive Search, are you seeing anything that might account for some deceleration in growth on a year-over-year basis? So, stripping out seasonality and December work days, on a constant currency basis, compared to earlier quarters of the fiscal year?

Executive
Gary Burnison

No. We haven't seen anything that would suggest that. You've got the Christmas holidays in there for sure, but there is nothing fundamentally and last month employment numbers would certainly confirm that.

Executive
Robert Rozek

Yes, George, if you go back and you look at -- that's what we tried to highlight that in the script, November and December were just soft months for us, a little bit softer than we expected but January and February have popped back up pretty strongly.

Analyst
George Tong

Okay. That's helpful. And, looking at the LTC segment, do you see additional room for hiring there given where utilization rates are at currently to pursue additional growth opportunities in the segment?

Executive
Gary Burnison

Well, we think there is a ton of opportunity for hiring, and so the issue is finding that talent and some of that you can hire piecemeal and other parts of it, you have to go out and look at making investments into organizations where you get intellectual property and people at the same time and we're looking at both.

Executive
Robert Rozek

An example of that, George, would be the Pivot Leadership acquisition we did there in the quarter.

Analyst
George Tong

And then, last question for me. You are continuing to see very strong double-digit growth in Futurestep. Can you discuss the sustainability of double-digit growth and what factors potentially drive upside or downside to your growth expectations?

Executive
Gary Burnison

Well look, you've got positive GDP growth which generally means you've got positive employment numbers. And today, you've got a real orientation toward skills-based labor and that certainly has had a positive, positive impact on our business in that segment of the market. And our expectation would be that, that would continue. We guide out no further than quarterly, but certainly looking out in the