Korn/Ferry International (NYSE:KFY) Q2 2018 Earnings Conference Call Transcript

Dec 06, 2017 • 04:30 pm ET


Korn/Ferry International (NYSE:KFY) Q2 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Korn/Ferry Second Quarter Fiscal Year 2018 Conference Call. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. We've also made available in the Investor Relations section of our website at kornferry.com, a copy of the financial presentation that we will be reviewing with you today.

Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors.

(Forward-Looking Cautionary Statements). Also, some of the comments today may reference non-GAAP financial measures such as adjusted fee revenues, constant currency amounts, EBITDA and adjusted EBITDA. Additional information concerning these measures, including the reconciliations to the most directly comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the Investor Relations section of the company's website at www.kornferry.com.

With that, I'll turn the conference over to our host, Mr. Burnison. Please go ahead, sir.

Gary Burnison

Okay, thank you, everybody. But first, I just want to say thank you to our colleagues at Korn/Ferry, and I'll tell you why. Because this quarter was the best top line results in the company's history.

To say that I'm proud is an absolutely -- that's just an understatement. The firm is on a roll. We generated $443 million in fee revenue in the quarter, which is up about 10%.

Profits were solid, adjusted EPS was $0.67, adjusted EBITDA was about $70 million. Asia knocked the cover off the ball, Asia was up 17%, Europe was up 10% and North America was up about 6%.

And from an industry perspective, financial services was absolutely spectacular. That business grew about 36% or so in the quarter.

It's been two years to the day, almost -- actually, it's two years and three days since we completed the acquisition of Hay Group and although we've still got a lot of work to do, there's no doubt about it, I will tell you that this has been a game changer. Korn/Ferry has evolved into an organizational consulting firm.

So what does that mean? Well, most clients can develop a sound strategy, but they often struggle to make it stick. And that's where Korn Ferry comes in, combining a client strategy with their talent to drive superior performance. And a strategy without talent is helpless and talent without strategy is hopeless. And that's what we did. We combined these essential elements for our clients' success, and that's what makes our firm unique.

And so there are really two aspects to our business. First, we help companies design their organization, the structure, roles, responsibilities, as well as how they compensate, develop and motivate their people. And secondly, we help organizations select and hire the talent that they need to execute the strategy.

The acquisitions that we've made over the years, the talent that we're developing internally and bringing on-board, as well as our real relentless focus on solutions