Controls and Procedures
−Removed: Evaluation of Disclosure Controls and Procedures.
+Added: a) Evaluation of Disclosure Controls and Procedures.
As of the end of the period covered by this Annual Report on Form 10-K, management, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal controls over financial reporting.
Based on their evaluation of our disclosure controls and procedures conducted as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934 (the “Exchange Act”)) were effective as of April 30, 2023.
−Removed: Changes in Internal Control over Financial Reporting.
+Added: b) Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting during the fourth fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
4 unchanged sentences
Directors, Executive Officers and Corporate Governance
−Removed: The information required by this Item will be included under the captions “The Board of Directors” and, when applicable, “Delinquent Section 16(a) Reports” and elsewhere in our 2022 Proxy Statement and is incorporated herein by reference.
+Added: The information required by this Item will be included under the captions “The Board of Directors,” "Culture of Integrity and Code of Business Conduct and Ethics," "Board Committees," and, when applicable, “Delinquent Section 16(a) Reports” in our 2023 Proxy Statement and is incorporated herein by reference.
The information under the heading “Information about our Executive Officers” in Part I of this Annual Report on Form 10-K is also incorporated by reference in this section.
3 unchanged sentences
Executive Compensation
−Removed: The information required by this Item will be included under the captions “Compensation Discussion and Analysis” and “Compensation of Executive Officers and Directors” and elsewhere in our 2022 Proxy Statement and is incorporated herein by reference.
+Added: The information required by this Item will be included under the captions “Compensation Discussion and Analysis,” “Compensation of Executive Officers and Directors,” "Assessment of Risk Related to Compensation Programs," and is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
−Removed: The information required by this Item will be included under the caption “Security Ownership of Certain Beneficial Owners and Management” and elsewhere in our 2022 Proxy Statement and is incorporated herein by reference.
+Added: The information required by this Item will be included under the captions “Security Ownership of Certain Beneficial Owners and Management” and "Equity Compensation Plan Information" and is incorporated herein by reference.
Certain Relationships and Related Transactions, and Director Independence
−Removed: The information required by this Item will be included under the caption “Certain Relationships and Related Transactions” and elsewhere in our 2022 Proxy Statement and is incorporated herein by reference.
+Added: The information required by this Item will be included under the captions “Certain Relationships and Related Transactions," "Related Person Transaction Approval Policy," "Director Independence," and "Board Committees," and is incorporated herein by reference.
Principal Accountant Fees and Services
−Removed: The information required by this Item will be included under the captions “Fees Paid to Ernst & Young LLP” and “Audit Committee Pre-Approval Policies and Procedures,” and elsewhere in our 2022 Proxy Statement, and is incorporated herein by reference.
+Added: The information required by this Item will be included under the captions “Fees Paid to Ernst & Young” and “Audit Committee Pre-Approval Policies and Procedures” and is incorporated herein by reference.
Exhibits and Financial Statement Schedules
Financial Statements.
−Removed: The following documents are filed as part of this report:
+Added: a) The following documents are filed as part of this report:
Index to Financial Statements :
4 unchanged sentences
See exhibits listed under Part (b) below.
+Added: Number Description
2.1+ Stock Purchase Agreement by and between HG (Bermuda) Limited and Korn/Ferry International, dated as of September 23, 2015, filed as Exhibit 2.1 to the Company’s Form 8-K, filed September 24, 2015.
2 unchanged sentences
3.1+ Restated Certificate of Incorporation of the Company, dated January 7, 2019, filed as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q, filed March 11, 2019.
−Removed: Seventh Amended and Restated Bylaws, effective January 1, 2019, filed as Exhibit 3.2 to the Company’s Report on Form 8-K, filed December 13, 2018.
+Added: 3.2+ Eighth Amended and Restated Bylaws, effective May 26, 2023, filed as Exhibit 3.1 to the Company’s Report on Form 8-K, filed May 30, 2023.
4.1+ Form of Common Stock Certificate of the Company, filed as Exhibit 4.1 to the Company's Annual Report on Form 10-K, filed June 28, 2019.
3 unchanged sentences
333-61697), filed December 24, 1998.
+Added: 10.2*+ Form of U.S.
and International Worldwide Executive Benefit Retirement Plan, filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1/A (No.
333-61697), filed September 4, 1998.
+Added: 10.3*+ Form of U.S.
and International Worldwide Executive Benefit Life Insurance Plan, filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-1 (No.
2 unchanged sentences
333-61697), filed September 4, 1998.
+Added: 10.5*+ Form of U.S.
and International Enhanced Executive Benefit and Wealth Accumulation Plan, filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (No.
333-61697), filed September 4, 1998.
+Added: 10.6*+ Form of U.S.
and International Senior Executive Incentive Plan, filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (No.
6 unchanged sentences
333-61697), filed September 4, 1998.
+Added: 10.10*+ Form of U.S.
and Foreign Executive Participation Program, filed as Exhibit 10.27 to the Company’s Registration Statement on Form S-1 (No.
28 unchanged sentences
10.37*+ Amended and Restated Korn Ferry Long Term Performance Unit Plan, effective July 1, 2021, filed as Exhibit 10.51 to the Company’s Annual Report on Form 10-K, filed June 28, 2021.
−Removed: Form of Unit Award Agreement under Amended and Restated Korn Ferry Long Term Performance Unit Plan, filed as Exhibit 10.52 to the Company’s Annual Report on Form 10-K.
−Removed: Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Gary Burnison, filed as Exhibit 10.53 to the Company’s Annual Report on Form 10-K.
−Removed: Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Robert Rozek, filed as Exhibit 10.54 to the Company’s Annual Report on Form 10-K.
−Removed: Employment Agreement dated June 28, 2021 between the Company and Byrne Mulrooney, filed as Exhibit 10.55 to the Company’s Annual Report on Form 10-K.
−Removed: Employment Agreement dated June 28, 2021 between the Company and Mark Arian, filed as Exhibit 10.56 to the Company’s Annual Report on Form 10-K.
−Removed: First Amendment to Credit Agreement, dated June 24, 2022, by and among Korn Ferry, Bank of America, N.A., as administrative agent, and other lender parties thereto.
+Added: 10.38*+ Form of Unit Award Agreement under Amended and Restated Korn Ferry Long Term Performance Unit Plan, filed as Exhibit 10.52 to the Company’s Annual Report on Form 10-K , filed June 28, 2021 .
+Added: 10.39*+ Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Gary Burnison, filed as Exhibit 10.53 to the Company’s Annual Report on Form 10-K, filed June 28, 2021.
+Added: 10.40*+ Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Robert Rozek, filed as Exhibit 10.54 to the Company’s Annual Report on Form 10-K, filed June 28, 2021 .
+Added: 10.41*+ Employment Agreement dated June 28, 2021 between the Company and Byrne Mulrooney, filed as Exhibit 10.55 to the Company’s Annual Report on Form 10-K , filed June 28, 2021 .
+Added: 10.42*+ Employment Agreement dated June 28, 2021 between the Company and Mark Arian, filed as Exhibit 10.56 to the Company’s Annual Report on Form 10-K , filed June 28, 2021 .
+Added: 10.43+ First Amendment to Credit Agreement, dated June 24, 2022, by and among Korn Ferry, Bank of America, N.A., as administrative agent, and other lender parties thereto , filed as Exhibit 10.
+Added: 43 to the Company’s Annual Report on Form 10-K , filed June 28, 202 2 .
+Added: 10.44*+ Korn Ferry 2022 Stock Incentive Plan, effective September 22, 2022, filed as Exhibit 10.1 to the Company's Report on Form 8-K, filed September 26, 2022.
+Added: 10.45*+ Korn Ferry Amended and Restated Employees Stock Purchase Plan, effective September 22, 2022, filed as Exhibit 10.2 to the Company's Report on Form 8-K, filed September 26, 2022.
+Added: 10.46*+ Korn Ferry 2022 Stock Incentive Plan US RSA Notice and Restricted Stock Award Agreement, filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed December 9, 2022.
+Added: 10.47*+ Korn Ferry 2022 Stock Incentive Plan US and Foreign RSU Performance Award Notice TSR and Restricted Stock Unit Performance Award Agreement, filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed December 9, 2022.
+Added: 10.48*+ Korn Ferry 2022 Stock Incentive Plan Foreign RSU Notice and Restricted Stock Unit Award Agreement, filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed December 9, 2022.
+Added: 10.49*+ Korn Ferry 2022 Stock Incentive Plan BOD RSU Notice and Nonemployee Director Restricted Stock Unit Award Agreement, filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed December 9, 2022.
+Added: 10.50*+ Summary of Non-Employee Director Compensation Program as effective December 15, 2022, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed March 10, 2023.
+Added: 10.51* Employment Agreement dated July 1, 2022 between the Company and Michael Distefano .
21.1 Subsidiaries of Korn Ferry.
5 unchanged sentences
Section 1350.
−Removed: Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
−Removed: Inline XBRL Taxonomy Extension Schema Document.
−Removed: Inline XBRL Taxonomy Extension Calculation Linkbase Document.
−Removed: Inline XBRL Taxonomy Extension Definition Linkbase Document.
−Removed: Inline XBRL Taxonomy Extension Label Linkbase Document.
−Removed: Inline XBRL Taxonomy Extension Presentation Linkbase Document.
+Added: 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
+Added: 101.SCH Inline XBRL Taxonomy Extension Schema Document.
+Added: 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
+Added: 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
+Added: 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
+Added: 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 This cover page from the Company’s Annual Report on Form 10-K for the year ended April 30, 2023, had been formatted in Inline XBRL and included as Exhibit 101.
+Added: _______________________________
* Management contract, compensatory plan or arrangement.
10 unchanged sentences
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
−Removed: /s/ CHRISTINA A.
−Removed: Chairman of the Board and Director
−Removed: June 28, 2022
−Removed: President & Chief Executive Officer
+Added: Signature Title Date
+Added: LEAMON Chairman of the Board and Director June 28, 2023
+Added: BURNISON President & Chief Executive Officer
(Principal Executive Officer) and Director
1 unchanged sentence
/s/ ROBERT P.
−Removed: Executive Vice President, Chief Financial Officer and
+Added: ROZEK Executive Vice President, Chief Financial Officer and
Chief Corporate Officer
1 unchanged sentence
June 28, 2023
−Removed: June 28, 2022
−Removed: /s/ LAURA BISHOP
−Removed: June 28, 2022
−Removed: /s/ JERRY LEAMON
−Removed: June 28, 2022
−Removed: /s/ ANGEL MARTINEZ
−Removed: Angel Martinez
−Removed: June 28, 2022
−Removed: June 28, 2022
−Removed: /s/ LORI ROBINSON
−Removed: Lori Robinson
−Removed: June 28, 2022
−Removed: /s/ GEORGE T.
−Removed: June 28, 2022
+Added: BENEBY Director June 28, 2023
+Added: BISHOP Director June 28, 2023
+Added: /s/ CHARLES L.
+Added: HARRINGTON Director June 28, 2023
+Added: MARTINEZ Director June 28, 2023
+Added: PERRY Director June 28, 2023
+Added: ROBINSON Director June 28, 2023
KORN FERRY AND SUBSIDIARIES
2 unchanged sentences
Management’s Report on Internal Control over Financial Reporting
−Removed: Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (PCAOB ID:
Report of Independent Registered Public Accounting Firm (PCAOB ID:
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID:
Consolidated Balance Sheets as of April 30, 2023 and 2022
18 unchanged sentences
June 28, 2023
−Removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING
−Removed: To the Stockholders and Board of Directors of Korn Ferry:
+Added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
+Added: To the Stockholders and the Board of Directors of Korn Ferry
Opinion on Internal Control over Financial Reporting
21 unchanged sentences
June 28, 2023
−Removed: REPORT OF INDEPEN DENT REGISTERED
+Added: REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
−Removed: To the Stockholders and Board of Directors of Korn Ferry
+Added: To the Stockholders and the Board of Directors of Korn Ferry
Opinion on the Financial Statements
19 unchanged sentences
Revenue recognition
−Removed: Description of the Matter
−Removed: As described in Note 1 to the consolidated financial statements, the Company recognizes revenue when control of the goods and services are transferred to the customer.
+Added: Description of the Matter As described in Note 1 to the consolidated financial statements, the Company recognizes revenue when control of the goods and services are transferred to the customer.
Revenue recognition includes management estimates of uptick fee variable consideration for Search engagements and estimates of the total hours at completion used to recognize revenue as services are rendered under Consulting contracts.
1 unchanged sentence
Auditing revenue recognition also incorporates testing the underlying data supporting management estimates mentioned above that are used in recognizing revenues under Search and Consulting contracts.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s processes and controls related to the recognition of each revenue stream, including, among others, controls over management review of contractual terms, management’s determination of when control of goods and services are transferred to customers as well as management’s review of the accuracy and completeness of underlying data used in the estimates mentioned above.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s processes and controls related to the recognition of each revenue stream, including, among others, controls over management review of contractual terms, management’s determination of when control of goods and services are transferred to customers as well as management’s review of the accuracy and completeness of underlying data used in the estimates mentioned above.
Our audit procedures included, among others, testing a sample of contracts to determine whether terms that may affect revenue recognition were identified and properly considered, performance obligations were appropriately identified in the Company’s evaluation of the accounting for the contracts and revenue was recognized when control of the goods or services is transferred to the customer.
9 unchanged sentences
CONSOLIDATED BALANCE SHEETS
−Removed: (in thousands,
−Removed: except per share data)
+Added: (in thousands, except per share data)
Cash and cash equivalents $ 844,024 $ 978,070
1 unchanged sentence
Receivables due from clients, net of allowance for doubtful accounts of $ 44,377 and $ 36,384 at April 30, 2023 and 2022, respectively
+Added: 569,601 590,260
Income taxes and other receivables 67,512 31,884
7 unchanged sentences
Deferred income taxes 102,057 84,712
+Added: Goodwill 909,491 725,592
Intangible assets, net 114,426 89,770
1 unchanged sentence
Investments and other assets 24,590 21,267
+Added: Total assets $ 3,574,444 $ 3,464,546
LIABILITIES AND STOCKHOLDERS’ EQUITY
15 unchanged sentences
$ 0.01 par value, 150,000 shares authorized, 76,693 and 75,409 shares issued and 52,269 and 53,190 shares outstanding at April 30, 2023 and 2022, respectively
+Added: 429,754 502,008
Retained earnings 1,311,081 1,134,523
8 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands, except per share data)
+Added: Fee revenue $ 2,835,408 $ 2,626,718 $ 1,810,047
Reimbursed out-of-pocket engagement expenses 28,428 16,737 9,899
8 unchanged sentences
Operating income 316,340 470,074 155,784
−Removed: Other (loss) income, net
+Added: Other income (loss), net 5,261 ( 11,880 ) 37,194
Interest expense, net ( 25,864 ) ( 25,293 ) ( 29,278 )
1 unchanged sentence
Income tax provision 82,683 102,056 48,138
+Added: Net income 213,054 330,845 115,562
Net income attributable to noncontrolling interest ( 3,525 ) ( 4,485 ) ( 1,108 )
1 unchanged sentence
Earnings per common share attributable to Korn Ferry:
+Added: Basic $ 3.98 $ 6.04 $ 2.11
+Added: Diluted $ 3.95 $ 5.98 $ 2.09
Weighted-average common shares outstanding:
+Added: Basic 51,482 52,807 52,928
+Added: Diluted 51,883 53,401 53,405
Cash dividends declared per share:
+Added: $ 0.60 $ 0.48 $ 0.40
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
+Added: Net income $ 213,054 $ 330,845 $ 115,562
Other comprehensive (loss) income:
1 unchanged sentence
Deferred compensation and pension plan adjustments, net of tax 3,420 19,096 5,419
−Removed: Net unrealized (loss) gain on marketable securities, net of tax
−Removed: Net unrealized loss on interest rate swap, net of tax
+Added: Net unrealized gain (loss) on marketable securities, net of tax 144 ( 410 ) ( 53 )
Comprehensive income 213,362 290,304 170,997
4 unchanged sentences
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
+Added: Common Stock Retained
+Added: Earnings Accumulated
Comprehensive
+Added: Loss, Net Total
Stockholders'
−Removed: Noncontrolling
+Added: Equity Noncontrolling
+Added: Interest Total
Stockholders'
+Added: Shares Amount
(in thousands)
Balance at May 1, 2020 54,450 $ 585,560 $ 742,993 $ ( 107,172 ) $ 1,221,381 $ 2,310 $ 1,223,691
−Removed: Other comprehensive loss
+Added: Net income — — 114,454 — 114,454 1,108 115,562
+Added: Other comprehensive income — — — 55,352 55,352 83 55,435
Dividends paid to shareholders — — ( 22,498 ) — ( 22,498 ) — ( 22,498 )
4 unchanged sentences
Balance at April 30, 2021 54,008 583,260 834,949 ( 51,820 ) 1,366,389 2,386 1,368,775
−Removed: Other comprehensive income
+Added: Net income — — 326,360 — 326,360 4,485 330,845
+Added: Other comprehensive loss — — — ( 40,365 ) ( 40,365 ) ( 176 ) ( 40,541 )
Dividends paid to shareholders — — ( 26,786 ) — ( 26,786 ) — ( 26,786 )
4 unchanged sentences
Balance at April 30, 2022 53,190 502,008 1,134,523 ( 92,185 ) 1,544,346 5,243 1,549,589
−Removed: Other comprehensive loss
+Added: Net income — — 209,529 — 209,529 3,525 213,054
+Added: Other comprehensive (loss) income — — — ( 579 ) ( 579 ) 887 308
Dividends paid to shareholders — — ( 32,971 ) — ( 32,971 ) — ( 32,971 )
8 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
Cash flows from operating activities:
+Added: Net income $ 213,054 $ 330,845 $ 115,562
Adjustments to reconcile net income to net cash provided by operating activities:
1 unchanged sentence
Stock-based compensation expense 36,285 29,210 27,157
−Removed: Impairment of right to use assets
+Added: Impairment of right-of-use assets 5,471 7,392 —
Impairment of fixed assets 4,375 1,915 —
1 unchanged sentence
Gain on cash surrender value of life insurance policies ( 10,576 ) ( 5,819 ) ( 13,017 )
−Removed: Loss (gain) on marketable securities
+Added: (Gain) loss on marketable securities ( 2,874 ) 11,978 ( 38,529 )
Deferred income taxes ( 14,403 ) ( 16,963 ) ( 14,140 )
7 unchanged sentences
Accounts payable and accrued liabilities ( 27,821 ) 191,447 122,687
+Added: Other ( 1,320 ) ( 5,751 ) 10,294
Net cash provided by operating activities 343,894 501,658 251,433
Cash flows from investing activities:
+Added: Cash paid for acquisitions, net of cash acquired ( 254,750 ) ( 133,802 ) —
Purchase of property and equipment ( 70,382 ) ( 49,406 ) ( 31,122 )
1 unchanged sentence
Proceeds from sales/maturities of marketable securities 65,878 92,472 69,683
−Removed: Cash paid for acquisitions, net of cash acquired
Premium on company-owned life insurance policies ( 15,219 ) ( 15,218 ) ( 15,353 )
10 unchanged sentences
Dividends paid to noncontrolling interest ( 4,721 ) ( 1,452 ) ( 1,115 )
−Removed: Proceeds from long term debt
−Removed: Principal payments on long term debt
−Removed: Payment of debt issuance costs
−Removed: Payment of contingent consideration from acquisitions
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities ( 152,180 ) ( 137,444 ) ( 66,886 )
Effect of exchange rate changes on cash and cash equivalents ( 2,283 ) ( 52,590 ) 38,366
−Removed: Net increase in cash and cash equivalents
+Added: Net (decrease) increase in cash and cash equivalents ( 134,046 ) 127,292 161,534
Cash and cash equivalents at beginning of year 978,070 850,778 689,244
−Removed: Cash and cash equivalents at end of the period
+Added: Cash and cash equivalents at end of the year $ 844,024 $ 978,070 $ 850,778
Supplemental cash flow information:
11 unchanged sentences
The Company helps organizations hire the right people to bring their strategy to life and advise them on how to reward, develop, and motivate their people.
−Removed: The Company is pursuing a strategy that will help Korn Ferry to focus on clients and collaborate intensively across the organization.
−Removed: This approach builds on the best of the Company’s past and gives the Company a clear path to the future with focused initiatives to increase its client and commercial impact.
+Added: The Company is pursuing a strategy designed to help Korn Ferry focus on clients and collaborate intensively across the organization.
+Added: This approach is intended to build on the best of the Company’s past and give the Company a clear path to the future with focused initiatives to increase its client and commercial impact.
Korn Ferry is transforming how clients address their talent management needs.
The Company has evolved from a mono-line to a diversified business, giving its consultants more frequent and expanded opportunities to engage with clients.
−Removed: The Company has seven reportable segments that operate through the following four lines of business:
−Removed: Consulting aligns organization structure, culture, performance and people to drive sustainable growth by addressing four fundamental needs:
+Added: In fiscal year 2023 and 2022, the Company acquired companies that have added critical mass to our existing professional search and interim operations, as described in Note 12.
+Added: This provided the Company with the opportunity to reassess how it manages the Recruitment Process Outsourcing ("RPO") & Professional Search segment.
+Added: Therefore, beginning in fiscal 2023, the Company separated RPO & Professional Search into two segments to align with the Company's strategy and the decisions of the Company's chief operating decision maker ("CODM"), who began to regularly make separate resource allocation decisions and assess performance separately between Professional Search & Interim and RPO.
+Added: The Company now has eight reportable segments that operate through the following five lines of business:
+Added: Consulting aligns organizational structure, culture, performance and people to drive sustainable growth by addressing four fundamental needs:
Organizational Strategy, Assessment and Succession, Leadership and Professional Development and Total Rewards.
−Removed: This work is supported by a comprehensive range of some of the world’s leading intellectual property (“lP”) and data.
−Removed: The Consulting teams employ an integrated approach across core solutions each one strengthening our work and thinking in the next, to help clients execute their strategy in a digitally enabled world.
−Removed: Digital delivers scalable tech-enabled solutions that identify the best structures, roles, capabilities and behaviors to drive businesses forward.
−Removed: Powered by the Korn Ferry Intelligence Cloud, the end-to-end system combines Korn Ferry proprietary data, client data and external market data to deliver clear insights with the training tools needed to align organizational structure with business strategy.
+Added: This work is enabled by a comprehensive set of Digital Performance Management Tools, based on some of the world’s leading intellectual property (“lP”) and data.
+Added: The Consulting teams employ an integrated approach across core capabilities and integrated solutions, each one intended to strengthen the work and thinking in the next, to help clients execute their strategy in a digitally enabled world.
+Added: Digital develops technology-enabled Performance Management Tools that empower our clients.
+Added: The digital products give clients direct access to Korn Ferry proprietary data, client data and analytics to deliver clear insights with the training and tools needed to align organizational structure with business strategy.
Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent to deliver lasting impact.
−Removed: Korn Ferry’s approach to placing talent brings together our research-based IP, proprietary assessments, and behavioral interviewing with our practical experience to determine the ideal organizational fit.
−Removed: Salary benchmarking then builds appropriate frameworks for compensation and retention.
−Removed: This business is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific and Executive Search Latin America).
−Removed: Recruitment Process Outsourcing (“RPO”) & Professional Search focuses on delivering enterprise talent acquisition solutions to our clients, at the professional level.
−Removed: The Company leverages the power of people, process expertise, IP-enabled technology, and compensation information to do this.
−Removed: Transaction sizes range from single professional searches to team, department, line of business projects, and global outsource recruiting solutions.
+Added: The Company’s approach to placing talent is bringing together research-based IP, proprietary assessments and behavioral interviewing with practical experience to determine ideal organizational fit.
+Added: Salary benchmarking then helps the Company build appropriate frameworks for compensation and retention.
+Added: This business is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search Europe, the Middle East and Africa ("EMEA"), Executive Search Asia Pacific and Executive Search Latin America).
+Added: Professional Search & Interim delivers enterprise talent acquisition solutions for professional level middle and upper management.
+Added: The Company helps clients source high-quality candidates at speed and scale globally, covering single-hire to multi-hire permanent placements and interim contractors.
+Added: RPO offers scalable recruitment outsourcing solutions leveraging customized technology and talent insights.
+Added: The Company's scalable solutions, built on science and powered by best-in-class technology and consulting expertise, enable the Company to act as a strategic partner in clients’ quest for superior recruitment outcomes and better candidate fit.
Basis of Consolidation and Presentation
14 unchanged sentences
Revenue Recognition
−Removed: Substantially all fee revenue is derived from talent and organizational consulting services and digital sales, stand-alone or as part of a solution, fees for professional services related to executive and professional recruitment performed on a retained basis and RPO, either stand-alone or as part of a solution.
+Added: Substantially all fee revenue is derived from talent and organizational consulting services and digital sales, stand-alone or as part of a solution, fees for professional services related to executive and professional recruitment performed on a retained basis, interim services and RPO, either stand-alone or as part of a solution.
Revenue is recognized when control of the goods and services are transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods and services.
23 unchanged sentences
These assumptions determine the timing of revenue recognition for the reported period.
+Added: In addition to talent acquisition for permanent placement roles, the Professional Search & Interim segment also offers recruitment services for interim roles.
+Added: Interim roles are short term in duration, generally less than 12 months.
+Added: Generally, each interim role is a separate performance obligation.
+Added: The Company recognizes fee revenue over the duration that the interim resources' services are provided which also aligns to the contracted invoicing plan and enforceable right to payment.
RPO fee revenue is generated through two distinct phases:
10 unchanged sentences
The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers’ trade accounts receivable.
−Removed: Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience.
+Added: Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience.
When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions.
3 unchanged sentences
The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents.
−Removed: As of April 30, 2022 and 2021, the Company’s investments in cash equivalents consisted of money market funds and commercial paper with initial maturity of less than 90 days for which market prices are readily available.
+Added: As of April 30, 2023 and 2022, the Company’s investments in cash equivalents consisted of money market funds, and as of April 30, 2022 also consisted of commercial paper with initial maturity of less than 90 days for which market prices are readily available.
Marketable Securities
8 unchanged sentences
dividends are recorded as earned on the ex-dividend date.
−Removed: Interest, dividend income and the changes in fair value in marketable securities are recorded in the accompanying consolidated statements of income in other (loss) income, net.
+Added: Interest, dividend income and the changes in fair value in marketable securities are recorded in the accompanying consolidated statements of income in other income (loss), net.
The Company also invests cash in excess of its daily operating requirements and capital needs primarily in marketable fixed income (debt) securities in accordance with the Company’s investment policy, which restricts the type of investments that can be made.
−Removed: The Company’s investment portfolio includes commercial paper, corporate notes/bonds and US Treasury and Agency securities as of April 30, 2022 and 2021.
+Added: The Company’s investment portfolio includes commercial paper and corporate notes/bonds as of April 30, 2023 and 2022 and also included US Treasury and Agency securities as of April 30, 2022.
These marketable fixed income (debt) securities are classified as available-for-sale securities based on management’s decision, at the date such securities are acquired, not to hold these securities to maturity or actively trade them.
1 unchanged sentence
The changes in fair values, net of applicable taxes, are recorded as unrealized gains or losses as a component of comprehensive income unless the change is due to credit loss.
−Removed: A credit loss is recorded in the statements of income in other (loss) income, net;
−Removed: any amount in excess of the credit loss is recorded as unrealized gains or losses as a component of comprehensive income.
+Added: A credit loss is recorded in the statements of income in other income (loss), net;
+Added: any amount in excess of the credit loss is recorded as unrealized losses as a component of comprehensive income.
Generally, the amount of the loss is the difference between the cost or amortized cost and its then current fair value;
1 unchanged sentence
During fiscal 2023, 2022 and 2021, no amount was recognized as a credit loss for the Company’s available for sales debt securities.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Fair Value of Financial Instruments
4 unchanged sentences
Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
16 unchanged sentences
The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination.
−Removed: During fiscal 2021, the Company recorded an adjustment of $ 2.6 million to increase goodwill as a result of additional tax liabilities from the Miller Heiman Group, Achieve Forum and Strategy Execution (the “Acquired Companies”) acquisition completed on November 1, 2019.
The Company determines if an arrangement is a lease at inception.
1 unchanged sentence
Finance leases are included in property and equipment, net, other accrued liabilities and other liabilities in the consolidated balance sheets.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
ROU assets represent the Company's right to use an underlying asset for the lease term, and the lease liabilities represent the Company's obligation to make lease payments arising from the lease.
11 unchanged sentences
All other property and equipment is depreciated or amortized on a straight-line basis over the estimated useful lives of three to ten years .
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Impairment of Long-Lived Assets
5 unchanged sentences
During fiscal 2023, the Company reduced its real estate footprint and as a result, the Company took an impairment charge of ROU assets of $ 5.5 million and an impairment of leasehold improvements and furniture and fixtures of $ 4.4 million, both recorded in the consolidated statements of income in general and administrative expenses.
−Removed: During fiscal 2020, the Company decided that it would exit 16 office leases as part of the integration of the Acquired Companies.
−Removed: This resulted in an impairment charge of the ROU asset of $ 2.3 million and impairment of leasehold improvements and furniture and fixtures of $ 0.4 million, both recorded in the consolidated statements of income in general and administrative expenses in the Digital reportable segment.
+Added: During fiscal 2022, the Company reduced its real estate footprint and as a result, the Company took an impairment charge of ROU assets of $ 7.4 million and an impairment of leasehold improvements and furniture and fixtures of $ 1.9 million, both recorded in the consolidated statements of income in general and administrative expenses.
During fiscal 2021, there were no impairment charges recorded.
11 unchanged sentences
Compensation and Benefits Expense
−Removed: Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
−Removed: administrative and support personnel.
+Added: Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and administrative and support personnel.
The most significant portions of this expense are salaries and the amounts paid under the annual performance-related bonus plan to employees.
1 unchanged sentence
The portion of the expenses applicable to annual performance-related bonuses refers to the Company’s annual employee performance-related bonus with respect to a fiscal year, the amount of which is communicated and paid to each eligible employee following the completion of the fiscal year.
−Removed: Each quarter, management makes its best estimate of its annual performance-related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by Executive Search consultants and revenue and other performance/profitability metrics for Consulting, Digital and RPO & Professional Search consultants), the level of engagements referred by a consultant in one line of business to a different line of business, and Company performance, including profitability, competitive forces and future economic conditions and their impact on the Company’s results.
+Added: Each quarter, management makes its best estimate of its annual performance-related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by Executive Search and Professional Search consultants and revenue and other performance/profitability metrics for Consulting, Digital, Interim and RPO consultants), the level of engagements referred by a consultant in one line of business to a different line of business, and Company performance, including profitability, competitive forces and future economic conditions and their impact on the Company’s results.
At the end of each fiscal year, annual performance-related bonuses take into account final individual consultant productivity (including referred work), Company/line of business results, including profitability, the achievement of strategic objectives, the results of individual performance appraisals and the current economic landscape.
3 unchanged sentences
The performance-related bonus expense was $ 409.4 million, $ 447.6 million and $ 287.3 million for the years ended April 30, 2023, 2022 and 2021, respectively, included in compensation and benefits expense in the consolidated statements of income.
−Removed: Other expenses included in compensation and benefits expense are due to changes in deferred compensation and pension plan liabilities, changes in cash surrender value (“CSV”) of company-owned life insurance (“COLI”) contracts, amortization of stock-based compensation awards, payroll taxes and employee insurance benefits.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
+Added: Other expenses included in compensation and benefits expense are due to changes in deferred compensation and pension plan liabilities, changes in cash surrender value (“CSV”) of company-owned life insurance (“COLI”) contracts, amortization of stock-based compensation awards, commissions, payroll taxes and employee insurance benefits.
Unearned compensation on the consolidated balance sheets includes long-term retention awards that are generally amortized over four -to- five years .
15 unchanged sentences
The Company amortizes these contributions on a straight-line basis as they vest, generally over a five-year period.
−Removed: The amounts that are expected to be paid to employees over the
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
−Removed: next 12 months are classified as a current liability included in compensation and benefits payable in the accompanying consolidated balance sheets.
+Added: The amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable in the accompanying consolidated balance sheets.
The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs.
15 unchanged sentences
Changes in the estimates of the restructuring charges are recorded in the period the change is determined.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Stock-Based Compensation
2 unchanged sentences
The Company recognizes compensation expense related to restricted stock units, restricted stock and the estimated fair value of stock purchases under the ESPP on a straight-line basis over the service period for the entire award.
+Added: Reclassification
+Added: Certain reclassifications have been made to the amounts in the prior periods in order to conform to the current period's presentation.
Translation of Foreign Currencies
1 unchanged sentence
Assets and liabilities are translated into U.S.
−Removed: dollars at exchange rates in effect at the balance sheet date, while revenue and expenses are translated at weighted-average exchange rates during the fiscal year.
+Added: dollars at exchange rates in effect at the balance sheet date, while revenue and expenses are translated using the daily exchange rates during the fiscal year.
Resulting translation adjustments are recorded as a component of accumulated comprehensive loss.
9 unchanged sentences
Valuation allowances are then recorded to reduce deferred tax assets to the amounts management concludes are more likely than not to be realized.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Income tax benefits are recognized and measured based upon a two-step model:
4 unchanged sentences
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, investments, foreign currency forward contracts, receivables due from clients and net CSV due from insurance companies, which are discussed above.
−Removed: Cash equivalents include investments in money market securities and commercial papers while investments include mutual funds, commercial papers, corporate notes/bonds and US Treasury and Agency securities.
+Added: Cash equivalents include investments in money market securities and may include commercial papers while investments include mutual funds, commercial papers, corporate notes/bonds and may include US Treasury and Agency securities.
Investments are diversified throughout many industries and geographic regions.
+Added: The Company maintains its cash and cash equivalents in bank accounts that exceed federally insured FDIC limits.
+Added: The Company has not experiences any losses in such accounts.
The Company conducts periodic reviews of its customers’ financial condition and customer payment practices to minimize collection risk on accounts receivable.
−Removed: At April 30, 2022 and 2021, the Company had no other significant credit concentrations.
−Removed: Recently Adopted Accounting Standards
−Removed: In March 2020, the Financial Accounting Standards Board (the “FASB”) issued guidance on Facilitation of the Effects of Reference Rate Reform on Financial Reporting.
−Removed: This guidance provides optional expedients and exceptions to the guidance on contract modifications and hedge accounting related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative rates.
−Removed: Entities can elect to adopt this guidance as of any date within an interim period that includes or is subsequent to March 12, 2020 and can adopt it for new contracts and contract modifications entered into through December 31, 2022.
−Removed: The Company adopted this guidance in its fiscal year beginning May 1, 2021 and the Company elected to apply the amendments prospectively through December 12, 2022.
−Removed: The adoption of this guidance did not have a material impact on the consolidated financial statements.
+Added: As of April 30, 2023 and 2022, the Company had no other significant credit concentrations.
Recently Proposed Accounting Standards - Not Yet Adopted
3 unchanged sentences
The Company will adopt this guidance in its fiscal year beginning May 1, 2023.
−Removed: The Company is currently evaluating the impact of this accounting guidance but does not anticipate that it will have a material impact on the consolidated financial statements.
+Added: The Company does not anticipate this accounting guidance will have a material impact on the consolidated financial statements.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Basic and Diluted Earnings Per Share
5 unchanged sentences
The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding.
5 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands, except per share data)
13 unchanged sentences
Diluted earnings per share $ 3.95 $ 5.98 $ 2.09
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Comprehensive Income
7 unchanged sentences
Accumulated other comprehensive loss, net $ ( 92,764 ) $ ( 92,185 )
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
The following table summarizes the changes in each component of accumulated other comprehensive loss, net:
−Removed: Unrealized Gains (Losses) on Marketable Securities (2)
−Removed: Interest Rate
+Added: Translation Deferred
+Added: Plan (1) Unrealized Gains
+Added: (Losses) on Marketable
+Added: Securities (2) Accumulated
Comprehensive
1 unchanged sentence
Balance as of May 1, 2020 $ ( 83,652 ) $ ( 23,554 ) $ 34 $ ( 107,172 )
−Removed: Unrealized (losses) gains arising during the period
−Removed: Reclassification of realized net losses (gains) to net income
−Removed: Balance as of April 30, 2020
Unrealized gains (losses) arising during the period 49,986 2,660 ( 53 ) 52,593
4 unchanged sentences
Balance as of April 30, 2022 ( 92,717 ) 961 ( 429 ) ( 92,185 )
−Removed: The tax effects on unrealized gains (losses) were $ 6.0 million, $ 1.1 million and $( 3.1 ) million as of April 30, 2022, 2021 and 2020, respectively.
+Added: Unrealized (losses) gains arising during the period ( 4,143 ) 3,211 144 ( 788 )
+Added: Reclassification of realized net losses to net income — 209 — 209
+Added: Balance as of April 30, 2023 $ ( 96,860 ) $ 4,381 $ ( 285 ) $ ( 92,764 )
+Added: _______________________________
+Added: (1) The tax effects on unrealized gains were $ 1.1 million, $ 6.0 million and $ 1.1 million as of April 30, 2023, 2022 and 2021, respectively.
The tax effects on reclassifications of realized net losses were $ 0.1 million, $ 0.5 million and $ 1.0 million as of April 30, 2023, 2022 and 2021, respectively.
−Removed: The tax effects on unrealized (losses) were $( 0.1 ) million as of April 30, 2022.
−Removed: The tax effects on unrealized (losses) were $( 0.2 ) million as of April 30, 2020.
−Removed: The tax effects on the reclassification of realized net losses to net income was $ 0.1 million as of April 30, 2020.
+Added: (2) The tax effects on unrealized gain (losses) were $ 0.1 million and $( 0.1 ) million as of April 30, 2023 and 2022, respectively.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Employee Stock Plans
2 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
Restricted stock $ 35,433 $ 28,361 $ 26,516
+Added: ESPP 852 849 641
Total stock-based compensation expense $ 36,285 $ 29,210 $ 27,157
Stock Incentive Plan
−Removed: At the Company’s 2019 Annual Meeting of Stockholders, held on October 3, 2019, the Company’s stockholders approved an amendment and restatement to the Korn Ferry Amended and Restated 2008 Stock Incentive Plan (the 2019 amendment and restatement being the “Fourth A&R 2008 Plan”), which, among other things, eliminated the fungible share counting provision and decreased the total number of shares of the Company’s common stock available for stock-based awards by 2,141,807 shares, leaving 3,600,000 shares available for issuance, subject to certain changes in the Company’s capital structure and other extraordinary events.
−Removed: The Fourth A&R 2008 Plan was also amended to generally require a minimum one-year vesting for all future awards and provides for the grant of awards to eligible participants, designated as either nonqualified or incentive stock options, restricted stock and restricted stock units, any of which are market-based, and incentive bonuses, which may be paid in cash or stock or a combination thereof.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
+Added: At the Company’s 2022 Annual Meeting of Stockholders, held on September 22, 2022, the Company’s stockholders approved the Korn Ferry 2022 Stock Incentive Plan (the "2022 Plan"), which, among other things, increased the total number of shares of the Company’s common stock available for stock-based awards by 1,700,000 shares, leaving 2,248,284 shares available for issuance, subject to certain changes in the Company’s capital structure and other extraordinary events.
+Added: The 2022 Plan requires a minimum one-year vesting for all future awards, and provides for the grant of awards to eligible participants, designated as either nonqualified or incentive stock options, restricted stock and restricted stock units, any of which are market-based, and incentive bonuses, which may be paid in cash or stock or a combination thereof.
Restricted Stock
−Removed: The Company grants time-based restricted stock awards to executive officers and other senior employees generally vesting over a four-year period.
+Added: The Company grants time-based restricted stock awards to executive officers and other senior employees that generally vest over a four-year period.
In addition, certain key management members typically receive time-based restricted stock awards upon commencement of employment and may receive them annually in conjunction with the Company’s performance review.
6 unchanged sentences
Restricted stock activity is summarized below:
+Added: 2023 2022 2021
+Added: Shares Weighted-
+Added: Fair Value Shares Weighted-
+Added: Fair Value Shares Weighted-
(in thousands, except per share data)
Non-vested, beginning of year 1,980 $ 40.32 2,370 $ 34.34 1,365 $ 44.59
+Added: Granted 1,143 $ 49.12 483 $ 65.05 1,606 $ 27.63
+Added: Vested ( 1,006 ) $ 37.72 ( 821 ) $ 43.76 ( 516 ) $ 39.78
+Added: Forfeited ( 54 ) $ 52.58 ( 52 ) $ 34.30 ( 85 ) $ 22.35
Non-vested, end of year 2,063 $ 50.12 1,980 $ 40.32 2,370 $ 34.34
As of April 30, 2023, there were 0.4 million shares outstanding relating to market-based restricted stock units with total unrecognized compensation totaling $ 17.7 million.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
As of April 30, 2023, there was $ 69.8 million of total unrecognized compensation cost related to all non-vested awards of restricted stock, which is expected to be recognized over a weighted-average period of 2.4 years.
−Removed: During fiscal 2022 and 2021, 271,794 shares of restricted stock for $ 18.5 million and 172,749 shares for $ 5.0 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to the vesting of restricted stock.
+Added: During fiscal 2023 and 2022, 372,556 shares and 271,794 shares of restricted stock totalling $ 22.2 million and $ 18.5 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to the vesting of restricted stock.
Employee Stock Purchase Plan
2 unchanged sentences
This amendment became effective July 1, 2020.
+Added: At the Company's 2022 Annual Meeting of Stockholders, held on September 22, 2022, the Company's stockholders approved the Korn Ferry Amended and Restated Employee Stock Purchase Plan, which, among other things, increased the total number of shares of the Company's common stock that may be purchased thereunder by 1,500,000 shares.
Employees may not purchase more than $ 25,000 in stock during any calendar year.
3 unchanged sentences
During fiscal 2023, 2022 and 2021, the Company repurchased (on the open market or privately negotiated transactions) 1,709,867 shares of the Company’s common stock for $ 93.9 million, 1,470,983 shares for $ 98.8 million and 973,451 shares for $ 30.4 million, respectively.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Financial Instruments
1 unchanged sentence
April 30, 2023
−Removed: Fair Value Measurement
−Removed: Balance Sheet Classification
−Removed: Other Accrued Liabilities
+Added: Fair Value Measurement Balance Sheet Classification
+Added: Cost Unrealized
+Added: Gains Unrealized
+Added: Value Cash and
+Added: Equivalents Marketable
+Added: Current Marketable
+Added: Non-current Income Taxes & Other
(in thousands)
3 unchanged sentences
Corporate notes/bonds 24,754 — ( 355 ) 24,399 — 21,492 2,907 —
−Removed: Treasury and Agency Securities
Total debt investments $ 36,505 $ — $ ( 385 ) $ 36,120 $ — $ 33,213 $ 2,907 $ —
1 unchanged sentence
Mutual funds (1)
+Added: $ 187,757 $ — $ 11,624 $ 176,133 $ —
Total equity investments $ 187,757 $ — $ 11,624 $ 176,133 $ —
+Added: Cash $ 696,180 $ 696,180 $ — $ — $ —
Money market funds 147,844 147,844 — — —
Foreign currency forward contracts 2,133 — — — 2,133
+Added: Total $ 1,070,034 $ 844,024 $ 44,837 $ 179,040 $ 2,133
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
April 30, 2022
−Removed: Fair Value Measurement
−Removed: Balance Sheet Classification
−Removed: Other Accrued Liabilities
+Added: Fair Value Measurement Balance Sheet Classification
+Added: Cost Unrealized
+Added: Gains Unrealized
+Added: Value Cash and
+Added: Equivalents Marketable
+Added: Current Marketable
+Added: Non-current Other Accrued
(in thousands)
Changes in Fair Value Recorded in
−Removed: Other Comprehensive Income
+Added: Other Comprehensive Loss
Commercial paper $ 41,627 $ — $ ( 126 ) $ 41,501 $ 15,489 $ 26,012 $ — $ —
4 unchanged sentences
Mutual funds (1)
+Added: $ 168,742 $ — $ 10,003 $ 158,739 $ —
Total equity investments $ 168,742 $ — $ 10,003 $ 158,739 $ —
+Added: Cash $ 874,490 $ 874,490 $ — $ — $ —
Money market funds 88,091 88,091 — — —
Foreign currency forward contracts ( 204 ) — — — ( 204 )
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
+Added: Total $ 1,210,893 $ 978,070 $ 57,244 $ 175,783 $ ( 204 )
+Added: _______________________________
(1) These investments are held in trust for settlement of the Company’s vested obligations of $ 172.2 million and $ 160.8 million as of April 30, 2023 and 2022, respectively, under the ECAP (see Note 6 — Deferred Compensation and Retirement Plans ).
Unvested obligations under the deferred compensation plans totaled $ 21.9 million and $ 24.0 million as of April 30, 2023 and 2022, respectively.
−Removed: During fiscal 2022 and 2020, the fair value of the investments decreased;
−Removed: therefore, the Company recognized a loss of $ 12.0 million and $ 1.8 million, respectively, which was recorded in other (loss) income, net.
−Removed: During fiscal 2021, the fair value of the investments increased;
−Removed: therefore, the Company recognized income of $ 38.5 million which was recorded in other (loss) income, net.
+Added: During fiscal 2023 and 2021, the fair value of the investments increased;
+Added: therefore, the Company recognized income of $ 2.9 million and $ 38.5 million, respectively, which was recorded in other income (loss), net.
+Added: During fiscal 2022, the fair value of the investments decreased;
+Added: therefore, the Company recognized a loss of $ 12.0 million which was recorded in other income (loss), net.
Investments in marketable securities classified as available-for-sale securities are made based on the Company’s investment policy, which restricts the types of investments that can be made.
−Removed: As of April 30, 2022 and 2021, marketable securities classified as available-for-sale consisted of commercial paper, corporate notes/bonds and US Treasury and Agency securities, for which market prices for similar assets are readily available.
+Added: As of April 30, 2023 and 2022 marketable securities classified as available-for-sale consisted of commercial paper and corporate notes/bonds, and also included US Treasury and Agency securities as of April 30, 2022, for which market prices for similar assets are readily available.
Investments that have an original maturity of 90 days or less and are considered highly liquid investments are classified as cash equivalents.
−Removed: As of April 30, 2022, available-for-sale marketable securities had remaining maturities ranging from one to twenty-one months .
+Added: As of April 30, 2023, available-for-sale marketable securities had remaining maturities ranging from 1 month to 13 months.
During fiscal 2023, 2022 and 2021, there were $ 58.6 million, $ 79.3 million and $ 60.6 million in sales/maturities of available-for-sale marketable securities, respectively.
1 unchanged sentence
As of April 30, 2023 and 2022, the Company’s investments in equity securities consisted of mutual funds for which market prices are readily available.
−Removed: Unrealized losses that relate to equity securities still held as of April 30, 2022 and 2020, was $ 27.3 million and $ 8.2 million while unrealized gains that relate to equity securities held as of April 30, 2021, was $ 32.7 million.
+Added: Unrealized losses that relate to equity securities still held as of April 30, 2023 and 2022, was $ 3.8 million and $ 27.3 million, respectively, while unrealized gains that relate to equity securities held as of April 30, 2021, was $ 32.7 million.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Foreign Currency Forward Contracts Not Designated as Hedges
8 unchanged sentences
The Company recognizes forward contracts as a net asset or net liability on the consolidated balance sheets as such contracts are covered by master netting agreements.
−Removed: During fiscal 2022 and 2020, the Company incurred losses of $ 0.2 million and $ 0.3 million, respectively, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.
−Removed: These foreign currency losses offset foreign currency gains that result from transactions denominated in a currency other than the Company’s functional currency.
−Removed: During fiscal 2021, the Company incurred gains of $ 2.7 million related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.
−Removed: These foreign currency gains offset foreign currency losses that result from transactions denominated in a currency other than the Company’s functional currency.
+Added: During fiscal 2023 and 2021, the Company incurred gains of $ 2.1 million and $ 2.7 million, respectively, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.
+Added: During fiscal 2022, the Company incurred losses of $ 0.2 million, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.
+Added: These foreign currency gains/losses offset foreign currency losses/gains that result from transactions denominated in a currency other than the Company’s functional currency.
The cash flows related to foreign currency forward contracts are included in cash flows from operating activities.
1 unchanged sentence
The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
The total benefit obligations for these plans were as follows:
7 unchanged sentences
current portion of benefit obligation (1)
+Added: ( 27,219 ) ( 18,916 )
Non-current benefit obligation $ 396,534 $ 357,175
+Added: _______________________________
(1) Current portion of benefit obligation is included in Compensation and benefits payable in the consolidated balance sheet.
5 unchanged sentences
In June 2003, the Company amended the EWAP and WAP, so as not to allow new participants or the purchase of additional deferral units by existing participants.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
In conjunction with the acquisition of Hay Group, the Company acquired multiple pension and savings plans covering certain of its employees worldwide.
5 unchanged sentences
Each vested unit award will pay out an annual benefit of either $ 12,500 or $ 25,000 for each of five years commencing on the seventh anniversary of the grant date.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Deferred Compensation and Pension Plans
4 unchanged sentences
Benefit obligation, beginning of year $ 211,598 $ 205,740
+Added: Service cost 40,843 37,952
Interest cost 9,511 4,028
12 unchanged sentences
Funded status and balance, end of year (1)
+Added: $ ( 227,255 ) $ ( 189,608 )
Current liability $ 15,447 $ 8,833
4 unchanged sentences
Equity securities 52 % 55 %
+Added: Other 4 % 3 %
+Added: Total 100 % 100 %
+Added: _______________________________
(1) The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans.
−Removed: As the COLI contracts are held in trust and are not separated from our general corporate assets, they are not included in the funded status.
+Added: As the COLI contracts are held in trust and are not separated from
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
+Added: our general corporate assets, they are not included in the funded status.
As of April 30, 2023 and 2022, the Company held contracts with gross CSV of $ 275.1 million and $ 263.2 million, offset by outstanding policy loans of $ 77.1 million and $ 79.8 million, respectively.
The pension obligation in fiscal 2023 increased compared to fiscal 2022 due to the ongoing accruals for the LTPU Plan for additional awards issued in fiscal 2023.
−Removed: Additionally, the change in mortality assumption from the MP-2020 to the MP-2021 mortality projection scale, and the actual return on plan assets being lower than the assumed return caused our funded position to deteriorate.
+Added: Additionally, the actual return on plan assets was lower than the expected return and this caused our funded position to decrease.
The increase in pension benefit obligations was partially offset by the actuarial gain which was primarily due to an increase in discount rates.
The fair value measurements of the defined benefit plan assets fall within the following levels of the fair value hierarchy as of April 30, 2023 and 2022:
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
+Added: Level 1 Level 2 Level 3 Total
(in thousands)
April 30, 2023:
+Added: Mutual funds $ — $ 18,350 $ — $ 18,350
Money market funds 735 — — 735
+Added: Total $ 735 $ 18,350 $ — $ 19,085
April 30, 2022:
+Added: Mutual funds $ — $ 21,353 $ — $ 21,353
Money market funds 637 — — 637
+Added: Total $ 637 $ 21,353 $ — $ 21,990
Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term.
7 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
+Added: Service cost $ 40,843 $ 37,952 $ 31,947
Interest cost 9,511 4,028 4,035
3 unchanged sentences
Net periodic benefit cost (1)
−Removed: The service cost, interest cost and other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other (loss) income, net, respectively, on the consolidated statements of income.
+Added: $ 50,046 $ 42,499 $ 38,598
+Added: _______________________________
+Added: (1) The service cost, interest cost and other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
The weighted-average assumptions used in calculating the benefit obligations were as follows:
Year Ended April 30,
+Added: 2023 2022 2021
Discount rate, beginning of year 4.08 % 2.17 % 2.29 %
3 unchanged sentences
Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:
−Removed: Year Ending April 30,
−Removed: Deferred Retirement Plans
+Added: Year Ending April 30, Deferred Retirement Plans
(in thousands)
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
+Added: 2024 $ 17,219
+Added: 2029-2033 237,542
Medical and Life Insurance Plan
13 unchanged sentences
Total liability $ 4,838 $ 5,365
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
The components of net periodic benefits costs are as follows:
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
+Added: Service cost $ — $ — $ —
Interest cost 195 110 140
2 unchanged sentences
Net periodic benefit cost (1)
−Removed: The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other (loss) income, net, respectively, on the consolidated statements of income.
+Added: $ ( 187 ) $ ( 198 ) $ ( 168 )
+Added: _______________________________
+Added: (1) The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.
The weighted-average assumptions used in calculating the medical and life insurance plan were as follows:
Year Ended April 30,
+Added: 2023 2022 2021
Discount rate, beginning of year 4.25 % 2.54 % 2.45 %
2 unchanged sentences
Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:
−Removed: Year Ending April 30,
−Removed: Medical and Life Insurance
+Added: Year Ending April 30, Medical and Life Insurance
(in thousands)
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
+Added: 2029-2033 1,869
International Retirement Plans
9 unchanged sentences
The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying consolidated balance sheets.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
The Company issued ECAP awards during fiscal 2023, 2022 and 2021 of $ 6.5 million, $ 7.5 million and $ 8.2 million, respectively.
The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs.
−Removed: During both fiscal 2022 and 2020, the deferred compensation liability decreased;
−Removed: therefore, the Company recognized a reduction in compensation expense of $ 10.6 million and $ 0.8 million, respectively.
−Removed: Offsetting the decreases in compensation and benefits expense in fiscal 2022 and 2020 was decreases in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 12.0 million and $ 1.8 million in fiscal 2022 and 2020, respectively, recorded in other (loss) income, net on the consolidated statements of income.
−Removed: During fiscal 2021, deferred compensation liability increased;
−Removed: therefore, the Company recognized a compensation expense of $ 37.3 million.
−Removed: Offsetting the increase in compensation and benefits expense in fiscal 2021 was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 38.5 million in fiscal 2021, recorded in other (loss) income, net on the consolidated statement of income.
+Added: During both fiscal 2023 and 2021, the deferred compensation liability increased;
+Added: therefore, the Company recognized a compensation expense of $ 3.5 million and $ 37.3 million, respectively.
+Added: Offsetting the increase in compensation and benefits expense in fiscal 2023 and 2021 was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 2.9 million and $ 38.5 million in fiscal 2023 and 2021, respectively, recorded in other income (loss), net on the consolidated statements of income.
+Added: During fiscal 2022, deferred compensation liability decreased;
+Added: therefore, the Company recognized a reduction in compensation expense of $ 10.6 million.
+Added: Offsetting the decrease in compensation and benefits expense in fiscal 2022 was a decrease in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 12.0 million in fiscal 2022, recorded in other income (loss), net on the consolidated statement of income.
Changes in ECAP liability were as follows:
4 unchanged sentences
Amortization of employer contributions 5,886 7,060
−Removed: (Loss) gain on investment
+Added: Gain (loss) on investment 3,464 ( 10,602 )
Employee distributions ( 14,306 ) ( 10,880 )
9 unchanged sentences
In addition, the Company has the option to make matching contributions.
−Removed: Beginning in fiscal 2022, the Company began to match a portion of the employee contributions each pay period and made $ 2.1 million matching contributions during fiscal 2022.
+Added: Beginning in fiscal 2022, the Company began to match 10 % of the employee contributions each pay period up to the IRS limit (excluding catch-up contributions) and then making an additional discretionary match after the fiscal year.
+Added: The Company made $ 3.5 million in matching contributions during fiscal 2023.
In addition, the Company intends to make an additional matching contribution relating to fiscal 2023 of $ 3.1 million in fiscal 2024, which are accrued in compensation and benefits payable on the consolidated balance sheet.
−Removed: The Company made a
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
−Removed: $ 3.0 million matching contribution in fiscal 2022 related to contributions made by employees in fiscal 2021 .
−Removed: Due to the impact of COVID-19, the Company did no t make a matching contribution related to fiscal 2020.
+Added: The Company made $ 2.1 million matching contributions during fiscal 2022 and an additional $ 2.7 million matching contribution in fiscal 2023 related to contributions made by employees in fiscal 2022.
+Added: The Company made a $ 3.0 million matching contribution in fiscal 2022 related to contributions made by employees in fiscal 2021.
Company Owned Life Insurance
4 unchanged sentences
however, there may not be a direct correlation between the timing of the future cash receipts and disbursements under these arrangements.
−Removed: The CSV of the underlying COLI investments increased by $ 5.8 million, $ 13.0 million and $ 6.6 million during fiscal 2022, 2021 and 2020, respectively, recorded as a decrease in compensation and benefits expense.
−Removed: In addition, certain policies are held in trusts to provide additional benefit security for the deferred compensation and pension plans.
+Added: The CSV of the underlying COLI investments increased by $ 10.6 million, $ 5.8 million and $ 13.0 million during fiscal 2023, 2022 and 2021, respectively, recorded as a decrease in
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
+Added: compensation and benefits expense.
+Added: Certain of the policies are held in trusts to provide additional benefit security for the deferred compensation and pension plans.
As of April 30, 2023, COLI contracts with a net CSV of $ 173.9 million and death benefits, net of loans, of $ 393.3 million were held in trust for these purposes.
10 unchanged sentences
Performance Obligations
−Removed: The Company has elected to apply the practical expedient to exclude the value of unsatisfied performance obligations for contracts with a duration of one year or less, which applies to all executive search and professional search fee revenue.
+Added: The Company has elected to apply the practical expedient to exclude the value of unsatisfied performance obligations for contracts with a duration of one year or less, which applies to all executive search, professional search and to most of the fee revenue from the interim business.
As of April 30, 2023, the aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year at inception was $ 1,118.0 million.
5 unchanged sentences
This information is presented in Note 12—Segments.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
The following table provides further disaggregation of fee revenue by industry:
Year Ended April 30,
+Added: 2023 2022 2021
+Added: Dollars % Dollars % Dollars %
(dollars in thousands)
+Added: Industrial $ 805,241 28.4 % $ 688,902 26.2 % $ 490,863 27.1 %
Life Sciences/Healthcare 522,372 18.4 501,463 19.1 355,668 19.7
Financial Services 494,299 17.4 475,326 18.1 331,976 18.3
+Added: Technology 483,787 17.1 456,498 17.4 275,510 15.2
Consumer Goods 386,409 13.6 372,720 14.2 239,457 13.2
Education/Non–Profit/General 143,300 5.1 131,809 5.0 116,573 6.5
+Added: Fee Revenue $ 2,835,408 100.0 % $ 2,626,718 100.0 % $ 1,810,047 100.0 %
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Credit Losses
−Removed: The Company is exposed to credit losses primarily through the provision of its Executive Search, Consulting, Digital and RPO & Professional Search services.
+Added: The Company is exposed to credit losses primarily through the services it provides.
The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables.
9 unchanged sentences
Provision for credit losses 15,763
+Added: Write-offs ( 12,073 )
Recoveries of amounts previously written off 311
2 unchanged sentences
Provision for credit losses 21,552
+Added: Write-offs ( 14,052 )
Recoveries of amounts previously written off 702
2 unchanged sentences
Provision for credit losses 22,493
+Added: Write-offs ( 15,806 )
Recoveries of amounts previously written off 585
1 unchanged sentence
Balance at April 30, 2023 $ 44,377
−Removed: The fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position as of April 30, 2022 and 2021, are as follows:
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: Less Than 12 Months
−Removed: 12 Months or longer
−Removed: Balance Sheet Classification
−Removed: Unrealized Losses
−Removed: Unrealized Losses
−Removed: Cash and Cash
−Removed: Marketable Securities, Current
−Removed: Marketable Securities, Non-Current
+Added: The fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position as of April 30, 2023 and 2022, are as follows:
+Added: Less Than 12 Months 12 Months or longer Balance Sheet Classification
+Added: Fair Value Unrealized Losses Fair Value Unrealized Losses Cash and Cash
+Added: Equivalents Marketable Securities,
+Added: Current Marketable
+Added: Securities, Non-
(in thousands)
2 unchanged sentences
Corporate notes/bonds $ 32,186 $ 446 $ 3,800 $ 4 $ — $ 18,942 $ 17,044
+Added: Treasury and Agency Securities $ 987 $ 8 $ — $ — $ — $ 987 $ —
Balance at April 30, 2023
1 unchanged sentence
Corporate notes/bonds $ 9,581 $ 123 $ 13,815 $ 232 $ — $ 20,489 $ 2,907
−Removed: Treasury and Agency Securities
−Removed: The unrealized losses on 27 and 18 investments in commercial paper securities, 23 and 15 investments in corporate notes/bonds, and 1 investment and no investments in U.S treasury and agency securities on April 30, 2022 and 2021, respectively, were caused by fluctuations in market interest rates.
+Added: The unrealized losses on 7 and 27 investments in commercial paper securities, 16 and 23 investments in corporate notes/bonds, and no investment and 1 investment in U.S treasury and agency securities on April 30, 2023 and 2022, respectively, were caused by fluctuations in market interest rates.
The Company only purchases high grade bonds that have a maturity from the date of purchase of no more than two years .
3 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
+Added: Domestic $ 136,269 $ 184,877 $ 34,661
+Added: Foreign 159,468 248,024 129,039
Income before provision for income taxes $ 295,737 $ 432,901 $ 163,700
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
The provision for domestic and foreign income taxes was as follows:
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
Current income taxes:
+Added: Federal $ 39,188 $ 43,993 $ 16,913
+Added: State 15,879 15,962 4,719
+Added: Foreign 42,019 59,064 40,646
Current provision for income taxes 97,086 119,019 62,278
Deferred income taxes:
+Added: Federal ( 13,228 ) ( 13,858 ) ( 5,809 )
+Added: State ( 5,723 ) ( 3,936 ) ( 5,025 )
+Added: Foreign 4,548 831 ( 3,306 )
Deferred benefit for income taxes ( 14,403 ) ( 16,963 ) ( 14,140 )
Total provision for income taxes $ 82,683 $ 102,056 $ 48,138
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
The reconciliation of the statutory federal income tax rate to the effective consolidated tax rate is as follows:
Year Ended April 30,
+Added: 2023 2022 2021
federal statutory income tax rate 21.0 % 21.0 % 21.0 %
1 unchanged sentence
Foreign tax rates differential 4.0 2.5 4.5
−Removed: Non-deductible officers compensation
+Added: Non-deductible officer's compensation 1.0 0.7 2.3
Excess tax (benefit) expense on stock-based compensation ( 0.9 ) ( 0.6 ) 0.8
3 unchanged sentences
R&D tax credit ( 0.6 ) ( 1.3 ) ( 0.9 )
+Added: Other 1.1 ( 0.5 ) 1.0
Effective income tax rate 28.0 % 23.6 % 29.4 %
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Components of deferred tax assets and liabilities were as follows:
13 unchanged sentences
Prepaid expenses ( 20,037 ) ( 24,453 )
−Removed: Marketable securities
+Added: Other ( 4,581 ) ( 1,951 )
Gross deferred tax liabilities ( 88,937 ) ( 106,368 )
5 unchanged sentences
Although realization is not assured, management believes that it is more-likely-than-not that the net deferred tax assets will be realized.
−Removed: In fiscal 2022, the Company’s valuation allowance decreased by $ 1.1 million primarily due to the reversal of valuation allowance previously recorded against deferred tax assets, including net operating losses, of certain foreign subsidiaries that had returned to profitability and were now more-likely-than-not to realize those deferred tax assets.
−Removed: In fiscal 2021 and 2020, the Company’s valuation allowance increased by $ 7.3 million and $ 3.8 million, respectively, primarily due to increases in net operating losses in certain foreign jurisdictions that were not more-likely-than-not to be realized.
+Added: In fiscal 2023, the Company’s valuation allowance increased by $ 1.2 million primarily due to increases in deferred tax asset balances, including net operating loss carryforwards, in certain foreign jurisdictions that were not more-likely-than-not to be realized.
+Added: In fiscal 2022 and 2021, the Company’s valuation allowance decreased by $ 1.1 million and increased by $ 7.3 million, respectively, primarily due to changes in deferred tax asset balances, including net operating loss carryforwards in certain foreign jurisdictions that were not more-likely-than-not to be realized.
Deferred tax assets and deferred tax liabilities are presented net on the consolidated balance sheets by tax jurisdiction.
3 unchanged sentences
The Company also has foreign net operating loss carryforwards of $ 103.7 million, which, if unutilized, will begin to expire in fiscal 2024 .
−Removed: We continue to consider approximately $ 662.1 million of undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, have provided no state, local or foreign withholding income taxes on such
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
+Added: We continue to consider approximately $ 730.9 million of undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, have provided no state, local or foreign withholding income taxes on such earnings.
While we do not anticipate a need to repatriate funds to the U.S.
1 unchanged sentence
Under current U.S.
−Removed: federal tax law, w e do not expect to incur a U .
+Added: federal tax law, we do not expect to incur a U.S.
federal income tax liability on the undistributed earnings in the event they are repatriated to the United States.
3 unchanged sentences
as well as in foreign jurisdictions.
−Removed: These income tax returns are subject to audit by the Internal Revenue Service (the “IRS”) and various state and foreign tax authorities.
+Added: These income tax returns are subject to audit by the Internal Revenue Service (the “IRS”) and various state and foreign tax
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Currently, income tax returns of the Company’s subsidiaries are under audit in Brazil, Germany, Switzerland, Japan, and India.
7 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
Unrecognized tax benefits, beginning of year $ 10,682 $ 9,954 $ 6,037
−Removed: Settlement with tax authority
Additions based on tax positions related to the current year 1,257 456 1,716
Additions based on tax positions related to prior years 28 272 2,201
+Added: Settlement with tax authority ( 545 ) — —
+Added: Lapse of applicable statute of limitations ( 856 ) — —
Unrecognized tax benefits, end of year $ 10,566 $ 10,682 $ 9,954
10 unchanged sentences
Computer equipment and software (1)
+Added: $ 383,701 $ 331,371
Leasehold improvements 73,980 81,743
Furniture and fixtures 37,844 41,999
+Added: Automobiles 3,346 3,460
+Added: 498,871 458,573
accumulated depreciation and amortization ( 336,995 ) ( 320,401 )
Property and equipment, net $ 161,876 $ 138,172
+Added: _______________________________
(1) Depreciation expense for capitalized software was $ 29.3 million, $ 28.0 million and $ 25.4 million during fiscal 2023, 2022 and 2021, respectively.
The net book value of the Company’s computer software costs included in property and equipment, net was $ 121.9 million and $ 94.7 million as of April 30, 2023 and 2022, respectively.
+Added: Depreciation expense for property and equipment was $ 44.6 million, $ 43.2 million and $ 42.6 million during fiscal 2023, 2022 and 2021, respectively.
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: Depreciation expense for property and equipment was $ 43.2 million, $ 42.6 million and $ 39.0 million during fiscal 2022, 2021 and 2020, respectively.
Long-Term Debt
4 unchanged sentences
The Company may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes.
−Removed: At any time prior to December 15, 2022, the Company may redeem the Notes at a redemption price equal to 100 % of the principal plus the Applicable Premium (as defined in the indenture governing the Notes), and accrued and unpaid interest.
−Removed: At any time prior to December 15, 2022, the Company may use the proceeds of certain equity offerings to redeem up to 35 % of the aggregate principal amount of the Notes, including any permitted additional notes, at a redemption price equal to 104.625 % of the principal amount and accrued and unpaid interest.
−Removed: At any time and from time to time on or after December 15, 2022, the Company may redeem the Notes at the applicable redemption prices set forth in the table below, plus accrued and unpaid interest, if redeemed during the 12-month period beginning on December 15 of each of the years indicated:
+Added: Prior to December 15, 2022, the Company was permitted to redeem the Notes at a redemption price equal to 100 % of the principal plus the Applicable Premium (as defined in the indenture governing the Notes), and accrued and unpaid interest.
+Added: Also, prior to December 15, 2022, the Company was permitted to use the proceeds of certain equity offerings to redeem up to 35 % of the aggregate principal amount of the Notes, including any permitted additional notes, at a redemption price equal to 104.625 % of the principal amount and accrued and unpaid interest.
+Added: Since December 15, 2022, the Company may redeem the Notes at the applicable redemption prices set forth in the table below, plus accrued and unpaid interest, if redeemed during the 12-month period beginning on December 15 of each of the years indicated:
+Added: Year Percentage
+Added: 2022 102.313 %
+Added: 2023 101.156 %
2024 and thereafter 100.000 %
The Notes allow the Company to pay $ 25 million of dividends per fiscal year with no restrictions, plus an unlimited amount of dividends so long as the Company’s consolidated total leverage ratio is not greater than 3.50 to 1.00, and the Company is not in default under the indenture governing the Notes.
−Removed: The Notes are guaranteed by each of the Company's existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee the Company's revolving credit facility.
+Added: The Notes are guaranteed by each of the Company's existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee the Company's credit facilities.
The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), the Company shall make an offer to purchase all of the Notes at 101 % of their principal amount, and accrued and unpaid interest.
1 unchanged sentence
The remainder of the proceeds were used for general corporate requirements.
−Removed: The effective interest rate on the Notes is 4.86 % as of April 30, 2022.
+Added: The effective interest rate on the Notes was 4.86 % as of April 30, 2023.
As of April 30, 2023 and 2022, the fair value of the Notes was $ 381.5 million and $ 379.5 million, respectively, based on borrowing rates then required of notes with similar terms, maturity and credit risk.
1 unchanged sentence
Long-term debt, at amortized cost, consisted of the following:
−Removed: April 30, 2022
−Removed: April 30, 2021
+Added: In thousands April 30, 2023 April 30, 2022
Senior Unsecured Notes $ 400,000 $ 400,000
1 unchanged sentence
Long-term borrowings, net of unamortized discount and debt issuance costs $ 396,194 $ 395,477
−Removed: Credit Facility
−Removed: On December 16, 2019 , the Company entered into a Credit Agreement (the “Credit Agreement”) with a syndicate of banks and Bank of America, National Association as administrative agent to among other things, provide for enhanced financial flexibility.
−Removed: The Credit Agreement provides for a $ 650.0 million five-year senior secured revolving credit facility (the “Revolver”), and contains certain customary affirmative and negative covenants, including a maximum consolidated net leverage ratio, a maximum consolidated secured net leverage ratio and a minimum interest coverage ratio.
−Removed: The Credit Agreement permits the payment of dividends to stockholders and Company share repurchases so long as there is no default under the Credit Agreement, the total funded debt to adjusted EBITDA ratio (as set forth in the credit agreement, the “consolidated net leverage ratio”), is no greater than 4.25 to 1.00, and
+Added: Credit Facilities
+Added: On June 24, 2022, the Company entered into an amendment (the “Amendment”) to its December 16, 2019 Credit Agreement (the “Credit Agreement”;
+Added: as amended by the Amendment, the “Amended Credit Agreement”) with a syndicate of banks and Bank of America, National Association as administrative agent, to, among other things, (i) extend the existing maturity date of the revolving facility to June 24, 2027, (ii) provide for a new delayed draw term loan facility as described below, (iii) replace the London interbank offered rate with forward-looking SOFR term rate (“Term SOFR”) as described below, and (iv) replace the existing financial covenants with the financial covenant described below.
+Added: The Amended Credit Agreement provides for five-year senior secured credit facilities in an aggregate amount of $ 1,150.0 million comprised of a $ 650.0 million revolving credit facility (the “Revolver”) and a $ 500.0 million delayed draw term loan facility (the “Delayed Draw Facility”, and together with the Revolver, the “Credit Facilities”).
+Added: The Amended Credit Agreement also provides that, under certain circumstances, the Company may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount up to $ 250.0 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00.
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: the pro forma liquidity is at least $ 50.0 million.
−Removed: The principal balance of the Revolver, if any, is due on the date of its termination.
−Removed: The Revolver matures on December 16, 2024 and any unpaid principal balance is payable on this date.
−Removed: The Revolver may also be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary LIBOR breakage fees).
−Removed: At the Company’s option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin.
−Removed: The interest rate applicable to loans outstanding under the Credit Agreement may fluctuate between LIBOR plus 1.125 % per annum to LIBOR plus 2.00 % per annum, in the case of LIBOR borrowings (or between the alternate base rate plus 0.125 % per annum and the alternate base rate plus 1.00 % per annum, in the alternative), based upon the Company’s consolidated net leverage ratio at such time.
−Removed: In addition, the Company will be required to pay to the lenders a quarterly commitment fee ranging from 0.175 % to 0.35 % per annum on the average daily unused amount of the Revolver, based upon the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.
−Removed: The average interest rate on our current and previous term loan for fiscal 2020 was 3.34 %.
−Removed: As of April 30, 2022 and 2021, there was no outstanding liability under the Revolver.
−Removed: The unamortized debt issuance costs associated with the Credit Agreement was $ 2.4 million and $ 3.3 million as of April 30, 2022 and 2021, respectively.
+Added: Extensions of credit under the Delayed Draw Facility were available to the Company in up to two advances through June 24, 2023.
+Added: Any amounts undrawn under the Delayed Draw Facility as of June 24, 2023 are no longer available to the Company.
+Added: The Amended Credit Agreement contains certain customary affirmative and negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments.
+Added: In addition, the Amended Credit Agreement contains a covenant that requires the Company to maintain a maximum consolidated secured leverage ratio of 3.50 to 1.00 (which may be temporarily increased to 4.00 following certain material acquisitions under certain circumstances) (the “Financial Covenant”).
+Added: The principal balance of the Delayed Draw Facility, if any, is subject to annual term loan amortization of 2.5 % for the fiscal quarters ending September 30, 2022 through June 30, 2024, and 5.0 % for the fiscal quarter ending September 30, 2024 through June 30, 2027, with the remaining principal due at maturity.
+Added: The principal balance of the Revolver, if any, is due at maturity.
+Added: The Credit Facilities mature on June 24, 2027 and any unpaid principal balance is payable on this date.
+Added: The Credit Facilities may also be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary breakage fees).
+Added: Amounts outstanding under the Amended Credit Agreement will bear interest at a rate equal to, at the Company’s election, either Term SOFR plus a SOFR adjustment of 0.10 %, plus an interest rate margin between 1.125 % per annum and 2.00 % per annum, depending on the Company’s consolidated net leverage ratio, or base rate plus an interest rate margin between 0.125 % per annum and 1.00 % per annum depending on the Company’s consolidated net leverage ratio.
+Added: In addition, the Company will be required to pay to the lenders a ticking fee of 0.20 % per annum on the actual daily unused portion of the Delayed Draw Facility, and a quarterly commitment fee ranging from 0.175 % to 0.300 % per annum on the actual daily unused amount of the Revolver, based upon the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.
+Added: As of April 30, 2023 and 2022, there was no outstanding liability under the Credit Facilities and the credit facilities under the Credit Agreement prior to the Amendment (the “Prior Credit Facility”), respectively.
+Added: The unamortized debt issuance costs associated with the Amended Credit Agreement was $ 4.2 million as of April 30, 2023 and $ 2.4 million under the Credit Agreement as of April 30, 2022.
The debt issuance costs were included in other current assets and other non-current assets on the consolidated balance sheets.
As of April 30, 2023, the Company was in compliance with its debt covenants.
−Removed: The Company had a total of $ 645.3 million and $ 646.0 million available under the Revolver after $ 4.7 million and $ 4.0 million of standby letters of credit have been issued as of April 30, 2022 and 2021, respectively.
+Added: The Company has a total of $ 1,145.4 million available under the Credit Facilities and had a total $ 645.3 million available under the Prior Credit Facility after $ 4.6 million and $ 4.7 million of standby letters of credit were issued as of April 30, 2023 and 2022, respectively.
+Added: Of the amount available under the Credit Facilities, $ 500.0 million is under the Delayed Draw Facility that expired on June 24, 2023.
The Company had a total of $ 11.5 million and $ 10.0 million of standby letters with other financial institutions as of April 30, 2023 and 2022, respectively.
3 unchanged sentences
Principal payments are not scheduled and interest is payable at least annually at various fixed and variable rates ranging from 4.76 % to 8.00 %.
−Removed: The Company has seven reportable segments:
−Removed: Consulting, Digital, Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, Executive Search Latin America and RPO & Professional Search.
−Removed: Revenues are directly attributed to a reportable segment and expenses not directly associated with a specific segment are allocated based on the most relevant measures applicable, including revenues, headcount and other factors.
−Removed: The Company’s seven reportable segments operate through the following four lines of business:
−Removed: Consulting aligns organization structure, culture, performance and people to drive sustainable growth by addressing four fundamental needs:
−Removed: Organizational Strategy, Assessment and Succession, Leadership and Professional Development and Total Rewards.
−Removed: This work is supported by a comprehensive range of some of the world’s leading lP and data.
−Removed: The Consulting teams employ an integrated approach across our core capabilities and integrated solutions, each one intended to strengthen our work and thinking in the next, to help clients execute their strategy in a digitally enabled world.
−Removed: Digital delivers scalable tech-enabled solutions designed to identify the best structures, roles, capabilities and behaviors to drive businesses forward.
−Removed: Our digital products give clients direct access to our proprietary data, client data and analytics to deliver clear insights with the training and tools needed to align organizational structure with business strategy.
−Removed: Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent to deliver lasting impact.
−Removed: The Company’s approach to placing talent that brings together research-based IP, proprietary assessments, and behavioral interviewing with practical experience to determine the ideal organizational fit.
−Removed: Salary benchmarking then builds appropriate frameworks for compensation and retention.
−Removed: This business is managed and reported on a geographic basis and represents
+Added: In the past two years, the Company has allocated capital to build out its Professional Search and Interim operations through the acquisition of Lucas Group, Patina Solutions Group ("Patina"), Infinity Consulting Solutions ("ICS") and Salo LLC ("Salo").
+Added: These acquisitions provided the Company with the opportunity to reassess how it manages its RPO & Professional Search segment.
+Added: Given the Company’s strategy and development of separate financial and operational metrics for the Professional Search & Interim and RPO operations, the Company’s chief operating decision maker began to regularly make separate resource allocation decisions between Professional Search & Interim and RPO.
+Added: Therefore, on May 1, 2022, the Company changed the composition of its global segments and under the new reporting format, the RPO & Professional Search segment has been separated into two segments:
+Added: Professional Search & Interim and RPO.
+Added: Revenues are directly attributed to a segment and expenses not directly associated with a specific segment are allocated based on the most relevant measures applicable, including revenues, headcount and other factors.
+Added: Due to this change, the Company completed a quantitative assessment for potential goodwill impairment both prior and subsequent to the aforementioned change and determined there was no goodwill impairment.
+Added: The presentation of operating results prior to May 1, 2022 has been revised to conform to the new segment reporting.
+Added: The Company now has eight reportable segments:
+Added: Consulting, Digital, Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, Executive Search Latin America, Professional Search & Interim and RPO.
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: four of the Company’s reportable segments (Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, and Executive Search Latin America) .
−Removed: RPO & Professional Search focuses on delivering enterprise talent acquisition solutions to clients, at the professional level.
−Removed: The Company leverages the power of people, process expertise, IP-enabled technology, and compensation information to do this.
−Removed: Transaction sizes range from single professional searches to team, department, line of business projects, and global outsource recruiting solutions.
+Added: The Company’s eight reportable segments operate through the following five lines of business:
+Added: Consulting aligns organizational structure, culture, performance and people to drive sustainable growth by addressing four fundamental needs:
+Added: Organizational Strategy, Assessment and Succession, Leadership and Professional Development and Total Rewards.
+Added: This work is enabled by a set of Digital Performance Management Tools, based on some of the world’s leading lP and data.
+Added: The Consulting teams employ an integrated approach across our core capabilities and integrated solutions, each one intended to strengthen the work and thinking in the next, to help clients execute their strategy in a digitally enabled world.
+Added: Digital develops technology-enabled Performance Management Tools that empower our clients.
+Added: The digital products give clients direct access to Korn Ferry proprietary data, client data and analytics to deliver clear insights with the training and tools needed to align organizational structure with business strategy.
+Added: Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent to deliver lasting impact.
+Added: The Company’s approach to placing talent is bringing together research-based IP, proprietary assessments and behavioral interviewing with practical experience to determine the ideal organizational fit.
+Added: Salary benchmarking then helps the Company build appropriate frameworks for compensation and retention.
+Added: This business is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, and Executive Search Latin America).
+Added: Professional Search & Interim delivers enterprise talent acquisition solutions for professional level middle and upper management.
+Added: The Company helps clients source high-quality candidates at speed and scale globally, covering single-hire to multi-hire permanent placements and interim contractors.
+Added: RPO offers scalable recruitment outsourcing solutions leveraging customized technology and talent insights.
+Added: The Company's scalable solutions, built on science and powered by best-in-class technology and consulting expertise, enables the Company to act as a strategic partner in clients’ quest for superior recruitment outcomes and better candidate fit.
Executive Search is managed by geographic regional leaders.
−Removed: Worldwide operations for Consulting, Digital, and RPO & Professional Search are managed by their Chief Executive Officers.
−Removed: The Executive Search geographic regional leaders and the Chief Executive Officers of Consulting, Digital, and RPO & Professional Search report directly to the Chief Executive Officer of the Company.
+Added: Worldwide operations for Consulting, Digital, Professional Search & Interim and RPO are managed by their Chief Executive Officers.
+Added: The Executive Search geographic regional leaders and the Chief Executive Officers of Consulting, Digital, Professional Search & Interim and RPO report directly to the Chief Executive Officer of the Company.
The Company also operates Corporate to record global expenses.
−Removed: The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker (“CODM”) review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”).
+Added: The Company evaluates performance and allocates resources based on the Company’s CODM review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”).
To the extent that such costs or charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other impairment charges).
The CODM is not provided asset information by reportable segment.
−Removed: Financial highlights by reportable segments are as follows:
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
+Added: Financial highlights are as follow:
Year Ended April 30,
−Removed: Executive Search
+Added: 2023 2022 2021
(in thousands)
+Added: Fee revenue $ 2,835,408 $ 2,626,718 $ 1,810,047
Total revenue $ 2,863,836 $ 2,643,455 $ 1,819,946
1 unchanged sentence
Net income attributable to noncontrolling interest 3,525 4,485 1,108
−Removed: Other loss, net
+Added: Other (income) loss, net ( 5,261 ) 11,880 ( 37,194 )
Interest expense, net 25,864 25,293 29,278
2 unchanged sentences
Depreciation and amortization 68,335 63,521 61,845
−Removed: Other loss, net
+Added: Other income (loss), net 5,261 ( 11,880 ) 37,194
Integration/acquisition costs 14,922 7,906 737
1 unchanged sentence
Impairment of right of use assets 5,471 7,392 —
+Added: Restructuring charges, net 42,573 — 30,732
Adjusted EBITDA (1)
−Removed: Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs and impairment charges.
+Added: $ 457,277 $ 538,928 $ 286,292
+Added: _______________________________
+Added: (1) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets, and restructuring charges, net.
+Added: Financial highlights by reportable segments are as follows:
Year Ended April 30, 2023
−Removed: Executive Search
+Added: Fee revenue Total revenue Adjusted EBITDA (1)
(in thousands)
−Removed: Total revenue
−Removed: Net income attributable to Korn Ferry
−Removed: Net income attributable to noncontrolling interest
−Removed: Other income, net
−Removed: Interest expense, net
−Removed: Income tax provision
−Removed: Operating income
−Removed: Depreciation and amortization
−Removed: Other income, net
−Removed: Integration/acquisition costs
−Removed: Restructuring charges, net
−Removed: Adjusted EBITDA ( 1)
+Added: Consulting $ 677,001 $ 686,979 $ 108,502
+Added: Digital 354,651 354,967 97,458
+Added: Executive Search:
+Added: North America 562,139 568,212 140,850
+Added: EMEA 187,014 188,114 31,380
+Added: Asia Pacific 95,598 95,956 24,222
+Added: Latin America 31,047 31,054 9,370
+Added: Professional Search & Interim 503,395 507,058 110,879
+Added: RPO 424,563 431,496 52,588
+Added: Corporate — — ( 117,972 )
+Added: Consolidated $ 2,835,408 $ 2,863,836 $ 457,277
+Added: _______________________________
+Added: (1) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets, and restructuring charges, net.
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs and net restructuring charges.
Year Ended April 30, 2022
+Added: Fee revenue Total revenue Adjusted EBITDA (1)
+Added: (in thousands)
+Added: Consulting $ 650,204 $ 654,199 $ 116,108
+Added: Digital 349,025 349,437 110,050
Executive Search:
+Added: North America 605,704 609,258 181,615
+Added: EMEA 182,192 182,866 31,804
+Added: Asia Pacific 118,596 118,705 35,105
+Added: Latin America 29,069 29,079 9,089
+Added: Professional Search & Interim 297,096 297,974 106,015
+Added: RPO 394,832 401,937 59,126
+Added: Corporate — — ( 109,984 )
+Added: Consolidated $ 2,626,718 $ 2,643,455 $ 538,928
+Added: ______________________________
+Added: (1) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs, impairment of fixed assets and impairment of right-of-use assets.
+Added: Year Ended April 30, 2021
+Added: Fee revenue Total revenue Adjusted EBITDA (1)
(in thousands)
−Removed: Total revenue
−Removed: Net income attributable to Korn Ferry
−Removed: Net income attributable to noncontrolling interest
−Removed: Other loss, net
−Removed: Interest expense, net
−Removed: Income tax provision
−Removed: Operating income
−Removed: Depreciation and amortization
−Removed: Other loss, net
−Removed: Integration/acquisition costs
−Removed: Restructuring charges, net
−Removed: Separation costs
−Removed: Adjusted EBITDA ( 1)
−Removed: Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes, integration/acquisition costs, net restructuring charges and separation costs.
+Added: Consulting $ 515,844 $ 517,046 $ 81,522
+Added: Digital 287,306 287,780 86,095
+Added: Executive Search:
+Added: North America 397,275 399,104 98,099
+Added: EMEA 138,954 139,213 11,742
+Added: Asia Pacific 83,306 83,463 16,676
+Added: Latin America 17,500 17,500 1,289
+Added: Professional Search & Interim 130,831 131,080 36,934
+Added: RPO 239,031 244,760 32,477
+Added: Corporate — — ( 78,542 )
+Added: Consolidated $ 1,810,047 $ 1,819,946 $ 286,292
+Added: _______________________________
+Added: (1) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes, integration/acquisition costs and restructuring charges, net.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Fee revenue attributed to an individual customer or country, other than the U.S.
−Removed: in fiscal year 2022 and the U.S and United Kingdom in fiscal year 2021 and 2020, did not account for more than 10 % of the total revenue in those fiscal years.
+Added: in fiscal year 2023 and 2022, and the U.S and United Kingdom in fiscal year 2021, did not account for more than 10 % of the total fee revenue in those fiscal years.
Fee revenue classified by country in which the Company derives revenues are as follows:
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
+Added: $ 1,568,119 $ 1,348,377 $ 837,682
United Kingdom 255,797 247,617 189,893
2 unchanged sentences
Other than the U.S.
−Removed: in fiscal 2022 and the U.S.
−Removed: and United Kingdom in fiscal 2021 and 2020, no single country had over 10% of the total long-lived assets, excluding financial instruments and tax assets.
+Added: in fiscal 2023 and 2022, and the U.S.
+Added: and United Kingdom in fiscal 2021, no single country had 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 location of the controlling statutory country are as follows:
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
+Added: $ 186,220 $ 185,228 $ 182,218
United Kingdom 22,893 26,711 34,081
1 unchanged sentence
Total long-lived assets $ 304,566 $ 305,906 $ 305,899
+Added: _______________________________
(1) Includes Corporate long-lived assets
Restructuring Charges, Net
+Added: In light of the Company’s evolution to an organization that is selling larger integrated solutions in a world where there are shifts in global trade lanes and persistent inflationary pressures, on January 11, 2023, the Company initiated a plan (the “Plan”) intended to realign its workforce with its business needs and objectives, namely, to invest in areas of potential growth and implement reductions where there is excess capacity.
+Added: Due to the implementation of the Plan, the Company recorded restructuring charges of $ 42.6 million during fiscal 2023 across all lines of business related to severance for positions that were eliminated.
There were no restructuring charges in fiscal 2022.
−Removed: In the fourth quarter of fiscal 2020, in light of the uncertainty in worldwide economic conditions caused by COVID-19 and, as part of a broader program aimed at further enhancing Korn Ferry’s strong balance sheet and liquidity position, the Company adopted a restructuring plan intended to adjust its cost base to the then-current economic environment and to position the Company to invest in its recovery.
−Removed: The Company continued the implementation of this plan in the first quarter of fiscal 2021 and this resulted in restructuring charges, net of $ 30.7 million and $ 40.5 million during fiscal 2021 and 2020, respectively, across all lines of business relating to severance for positions that were eliminated.
+Added: In the fourth quarter of fiscal 2020, in light of the uncertainty in worldwide economic conditions caused by the coronavirus pandemic and, as part of a broader program aimed at further enhancing Korn Ferry’s strong balance sheet and liquidity position, the Company adopted a restructuring plan intended to adjust its cost base to the then-current economic environment and to position the Company to invest in its recovery.
+Added: The Company continued the implementation of this restructuring plan in the first quarter of fiscal 2021 and this resulted in restructuring charges, net of $ 30.7 million during fiscal 2021 across all lines of business relating to severance for positions that were eliminated.
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: In the third quarter of fiscal 2020, the Company adopted a restructuring plan to rationalize its cost structure to realize the efficiencies and operational improvement that the investments in the Digital business have enabled us to realize.
−Removed: This plan impacted the Consulting and Digital segments which resulted in restructuring charges, net of $ 18.1 million in fiscal 2020, relating to severance for redundant positions that were eliminated.
Changes in the restructuring liability were as follows:
7 unchanged sentences
As of April 30, 2021 6,985
−Removed: Restructuring charges, net
Reductions for cash payments ( 4,829 )
−Removed: Non-cash payments
Exchange rate fluctuations ( 654 )
As of April 30, 2022 1,502
+Added: Restructuring charges, net 42,573
Reductions for cash payments ( 24,485 )
+Added: Non-cash payments ( 10,827 )
Exchange rate fluctuations ( 759 )
As of April 30, 2023 $ 8,004
−Removed: As of April 30, 2022 and 2021, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $ 0.5 million and $ 0.6 million, respectively, which are included in other long-term liabilities.
+Added: As of April 30, 2023 and 2022, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $ 0.5 million as of April 30, 2022, which was included in other long-term liabilities.
+Added: Restructuring charges incurred by segment were as follows:
+Added: Year Ended April 30
+Added: 2023 2022 2021
+Added: (in thousands)
+Added: Consulting $ 11,613 $ — $ 14,223
+Added: Digital 2,856 — 2,947
+Added: Executive Search:
+Added: North America 4,515 — 958
+Added: EMEA 12,732 — 8,868
+Added: Asia Pacific 2,129 — 181
+Added: Latin America 697 — 405
+Added: Professional Search & Interim 4,835 — 1,543
+Added: RPO 3,097 — 1,607
+Added: Corporate 99 — —
+Added: Consolidated $ 42,573 $ — $ 30,732
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Goodwill and Intangible Assets
Changes in the carrying value of goodwill by reportable segment were as follows:
−Removed: Executive Search
+Added: Consulting Digital Executive Search Professional
+Added: Search & Interim (1)
+Added: America EMEA Asia
(in thousands)
Balance as of May 1, 2021 $ 173,410 $ 326,628 $ 48,498 $ 47,449 $ 972 $ 15,705 $ 14,007 $ 626,669
+Added: Additions (2)
+Added: — — — — — 55,480 49,482 104,962
Exchange rate fluctuations ( 440 ) ( 1,274 ) ( 934 ) ( 877 ) — ( 1,329 ) ( 1,185 ) ( 6,039 )
1 unchanged sentence
Additions (3)
+Added: — — — — — 184,519 — 184,519
Exchange rate fluctuations 123 204 ( 1,327 ) ( 171 ) — 291 260 ( 620 )
Balance as of April 30, 2023 $ 173,093 $ 325,558 $ 46,237 $ 46,401 $ 972 $ 254,666 $ 62,564 $ 909,491
−Removed: Additions to goodwill in fiscal 2022 was due to $ 76.8 million and $ 28.2 million from the acquisition of the Lucas Group and Patina Solutions Group, respectively .
+Added: _______________________________
+Added: (1) Segment data for FY'22 has been recast to reflect the division of the RPO & Professional Search segment into the RPO segment and Professional Search & Interim segment.
+Added: (2) Additions to goodwill in fiscal 2022 were due to $ 76.8 million and $ 28.2 million from the acquisition of the Lucas Group and Patina, respectively.
+Added: (3) Additions to goodwill in fiscal 2023 were due to $ 68.3 million and $ 116.2 million from the acquisition of the ICS and Salo, respectively.
+Added: Tax deductible goodwill from the acquisitions of Salo and ICS were $ 114.3 million and $ 64.9 million, respectively, as of April 30, 2023.
Tax deductible goodwill from the Miller Heiman acquisition was $ 16.3 million and $ 22.7 million as of April 30, 2023 and 2022, respectively.
Tax deductible goodwill from the PIVOT Leadership acquisition was $ 5.2 million and $ 5.9 million as of April 30, 2023 and 2022, respectively.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Intangible assets include the following:
−Removed: April 30, 2022
−Removed: April 30, 2021
+Added: April 30, 2023 April 30, 2022
(in thousands)
Amortized intangible assets:
+Added: Gross Accumulated
+Added: Amortization Net Gross Accumulated
+Added: Amortization Net
Customer lists $ 192,099 $ ( 104,429 ) $ 87,670 $ 146,799 $ ( 89,024 ) $ 57,775
2 unchanged sentences
Non-compete agreements 910 ( 910 ) — 910 ( 910 ) —
+Added: Trademarks 12,086 ( 7,123 ) 4,963 8,986 ( 5,261 ) 3,725
+Added: $ 278,451 $ ( 163,905 ) 114,546 $ 230,051 $ ( 140,171 ) 89,880
Exchange rate fluctuations ( 120 ) ( 110 )
Total Intangible assets $ 114,426 $ 89,770
−Removed: In fiscal 2022 there were intangible assets additions of $ 11.6 million and $ 5.7 million from the acquisition of the Lucas Group and Patina Solutions Group, respectively.
+Added: _______________________________
+Added: (1) In fiscal 2023 there were intangible assets additions of $ 16.4 million and $ 32.0 million from the acquisition of the ICS and Salo, respectively.
+Added: In fiscal 2022 there were intangible assets additions of $ 11.6 million and $ 5.7 million from the acquisition of the Lucas Group and Patina, respectively.
+Added: Acquisition-related intangible assets acquired in fiscal 2023 consists o f customer relationships and tradenames of $ 45.3 million and $ 3.1 million, respectively, with weighted-average useful lives from the date of purchase of seven years and two years , respectively.
Acquisition-related intangible assets acquired in fiscal 2022 consists of customer relationships and tradenames of $ 15.5 million and $ 1.8 million, respectively, with weighted-average useful lives from the date of purchase of seven years and two years , respectively.
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
Amortization expense for amortized intangible assets was $ 23.7 million, $ 20.3 million and $ 19.2 million during fiscal 2023, 2022 and 2021, respectively.
Estimated annual amortization expense related to amortizing intangible assets is as follows:
−Removed: Year Ending April 30,
+Added: Year Ending April 30, Estimated
(in thousands)
+Added: 2024 $ 25,604
+Added: Thereafter 14,521
All amortizable intangible assets will be fully amortized by the end of fiscal 2032.
10 unchanged sentences
The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments in a similar economic environment.
−Removed: Operating leases contain both office and equipment leases and have remaining terms that range from less than one year to 10 years, some of which also include options to extend or terminate the lease.
−Removed: Finance leases are comprised
+Added: Operating leases contain both office and equipment leases and have remaining terms that range from less than one year to nine years , some of which also include options to extend or terminate the lease.
+Added: Finance leases are comprised of equipment leases and have remaining terms that range from less than one year to six years .
+Added: Finance lease assets are included in property and equipment, net while finance lease liabilities are included in other accrued liabilities and other liabilities.
+Added: During fiscal 2023 and 2022, the Company reduced its real estate footprint and as a result recorded an impairment charge of the ROU assets of $ 5.5 million and $ 7.4 million, respectively, in the consolidated statements of income.
+Added: In fiscal 2023, the Company acquired ICS and Salo and as a result recognized ROU assets of $ 0.8 million and $ 2.1 million, respectively, with corresponding liabilities of $ 1.0 million and $ 2.9 million, respectively.
+Added: In fiscal 2022, the Company acquired Lucas Group and Patina and as a result recognized ROU assets of $ 3.8 million and $ 0.2 million, respectively, with corresponding liabilities of $ 9.4 million and $ 0.7 million, respectively.
+Added: In these acquisitions, the ROU assets were adjusted to reflect unfavorable lease terms when compared with current market rates.
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
−Removed: of equipment leases and have remaining terms that range from less than one year t o five years .
−Removed: Finance lease assets are included in property and equipment, net while finance lease liabilities are included in other accrued liabilities and other liabilities.
−Removed: During fiscal 2022, the Company reduced its real estate footprint and as a result recorded an impairment charge of the ROU assets of $ 7.4 million recorded in the consolidated statements of income.
−Removed: On November 1, 2021, the Company acquired Lucas Group and as a result recognized ROU assets of $ 3.8 million with a corresponding liability of $ 9.4 million.
−Removed: On April 1, 2022, the Company acquired Patina Solutions Group and as a result recognized ROU asset of $ 0.2 million with a corresponding liability of $ 0.7 million.
−Removed: In both acquisitions, the ROU asset was adjusted to reflect unfavorable lease terms when compared with current market rates.
−Removed: As a result of the acquisition of the Acquired Companies in fiscal 2020, the Company recognized ROU assets of $ 3.2 million with a corresponding liability of $ 6.7 million.
−Removed: The ROU asset balance was adjusted by reclassification of pre-existing prepaid expenses, restructuring liabilities and deferred rent totaling $ 3.5 million.
−Removed: As part of the plan for integrating the Acquired Companies, the Company decided to exit 16 office leases and as a result, recorded an impairment charge of the ROU assets of $ 2.3 million in fiscal 2020 recorded in the consolidated statement of income.
The components of lease expense were as follows:
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
2 unchanged sentences
Interest on lease liabilities 190 84 114
+Added: 1,669 1,149 1,335
Operating lease cost 48,901 53,092 56,166
6 unchanged sentences
Year Ended April 30,
+Added: 2023 2022 2021
(in thousands)
5 unchanged sentences
Finance leases $ 3,123 $ 1,586 $ 516
−Removed: Supplemental balance sheet information related to leases was as follows:
KORN FERRY AND SUBSIDIARIES
1 unchanged sentence
April 30, 2023 (continued)
+Added: Supplemental balance sheet information related to leases was as follows:
Year Ended April 30,
8 unchanged sentences
Weighted average remaining lease terms:
−Removed: Operating leases
−Removed: Finance leases
+Added: Operating leases 4.5 years 5.1 years
+Added: Finance leases 3.8 years 3.3 years
Weighted average discount rate:
2 unchanged sentences
Maturities of lease liabilities are as follows:
−Removed: Year Ending April 30,
+Added: Year Ending April 30, Operating Financing
(in thousands)
+Added: 2024 $ 51,760 $ 1,545
+Added: 2025 44,050 1,313
+Added: 2026 39,548 935
+Added: 2027 20,888 597
+Added: 2028 10,125 438
+Added: Thereafter 16,295 —
Total lease payments 182,666 4,828
imputed interest 17,625 403
+Added: Total $ 165,041 $ 4,425
KORN FERRY AND SUBSIDIARIES
2 unchanged sentences
The following table provides a summary of the net assets acquired in the periods indicated (no acquisitions were completed in fiscal 2021).
−Removed: 2022 (2), (3)
+Added: Year Ended April 30
(in thousands)
Current assets (1)
+Added: $ 37,586 $ 36,071
Long-term assets 5,736 9,351
−Removed: Intangibles assets
+Added: Intangible assets 48,400 17,300
Current liabilities 18,327 17,672
2 unchanged sentences
Purchase price 254,750 133,802
+Added: Goodwill $ 184,519 $ 104,962
+Added: _______________________________
(1) Included in current assets is acquired receivables in the amount of $ 35.3 million and $ 24.5 million for acquisitions completed in fiscal 2023 and 2022, respectively.
−Removed: On April 1, 2022, the Company completed its acquisition of Patina Solutions Group for $ 42.9 million, net of cash acquired.
−Removed: We believe Patina Solutions Group brings to the Company substantial interim executive solutions expertise across multiple industry verticals as well as offers ideal solutions for today’s nomadic labor market.
−Removed: Patina’s vast network of C-suite, top-tier, and professional interim talent spans functional area of expertise such as finance, operations, legal, human resources, IT and more.
−Removed: This combination presents real, tangible opportunity for Korn Ferry and our clients looking for the right talent, who are highly agile, with specialized skills and expertise, to help them drive superior performance, including on an interim basis.
−Removed: Actual results of operation of Patina Solution Group are included in the Company’s consolidated financial statement from April 1, 2022, the effective date of the acquisition.
+Added: (2) On February 1, 2023, the Company completed its acquisition of Salo for $ 155.4 million, net of cash acquired.
+Added: Salo is a leading provider of finance, accounting and HR interim talent, with a strong focus on serving organizations in healthcare, among other industries.
+Added: Actual results of operations of Salo are included in the Company's consolidated financial statements from February 1, 2023, the effective date of the acquisition.
+Added: On August 1, 2022, the Company completed its acquisition of ICS for $ 99.3 million, net of cash acquired.
+Added: ICS contributes interim professional placement offerings and expertise that are highly relevant for the new world of work where more workplaces are hybrid or virtual.
+Added: ICS is a highly regarded provider of senior-level IT interim professional solutions with additional expertise in the areas of compliance and legal, accounting and finance, and human resources.
+Added: Actual results of operations of ICS are included in the Company's consolidated financial statements from August 1, 2022, the effective date of the acquisition.
+Added: (3) On April 1, 2022, the Company completed its acquisition of Patina for $ 42.9 million, net of cash acquired.
+Added: Patina brought the Company interim executive solutions expertise across multiple industry verticals as well as offers ideal solutions for today’s nomadic labor market.
+Added: Patina’s vast network of C-suite, top-tier, and professional interim talent spanned functional areas of expertise such as finance, operations, legal, human resources, IT and more.
+Added: Actual results of operation of Patina are included in the Company’s consolidated financial statement from April 1, 2022, the effective date of the acquisition.
On November 1, 2021, the Company completed its acquisition of Lucas Group for $ 90.9 million, net of cash acquired.
−Removed: Lucas Group has contributed a substantial professional search and interim expertise that has enhanced the Company’s search portfolio.
−Removed: The addition of Lucas Group to Korn Ferry’s broader talent acquisition portfolio – spanning Executive Search, RPO, and Professional Search – has accelerated Korn Ferry’s ability to capture additional share of this significant market.
−Removed: Lucas Group is included in the RPO & Professional Search segment.
+Added: Lucas Group contributed a substantial professional search and interim expertise that has enhanced the Company’s search portfolio.
Actual results of operations of Lucas Group are included in the Company’s consolidated financial statements from November 1, 2021, the effective date of the acquisition.
−Removed: On November 1, 2019, the Company completed its acquisition of the Acquired Companies for $ 108.6 million, net of cash acquired.
−Removed: The Acquired Companies contributed a world-class portfolio of learning, development and performance improvement offerings and expertise to Korn Ferry and bolster the Company’s substantial leadership development capabilities.
−Removed: These companies are included in the Digital segment.
−Removed: The addition of the Acquired Companies further expanded Korn Ferry’s vast IP and content and leveraged the firm’s digital delivery platforms.
−Removed: Actual results of operations of the Acquired Companies are included in the Company’s consolidated financial statements from November 1, 2019, the effective date of the acquisition.
−Removed: During fiscal 2021, the Company finalized the purchase price allocation by recording an increase in goodwill of $ 2.6 million as a result of additional tax liabilities.
+Added: We believe the above acquisitions echo the commitment to scale the Company's solutions and further increase the Company's focus at the intersection of talent and strategy-wherever and however the needs of organizations evolve-and present real, tangible opportunities for Korn Ferry and our clients, looking for the right talent, that is highly agile, with specialized skills and expertise, to drive superior performance, including on an interim basis.
+Added: The addition of these acquisitions to Korn Ferry’s broader talent acquisition portfolio–spanning Executive Search, RPO, Professional Search and Interim services–has accelerated Korn Ferry’s ability to capture additional shares of this significant market.
+Added: All of the acquisitions in fiscal 2023 and 2022 are included in the Professional Search & Interim segment.
For each acquisition, the aggregate purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition.
−Removed: As of April 30, 2022, the aggregate purchase price allocations for Lucas Group and Patina Solutions remain preliminary with regard to income taxes .
+Added: As of April 30, 2023, the aggregate purchase price allocations for Salo and ICS remain preliminary with regard to income taxes .
The measurement period for purchase price allocation ends as soon as information on the facts and circumstances become available, not to exceed 12 months.
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
Commitments and Contingencies
1 unchanged sentence
The Company has a policy of entering into offer letters of employment or letters of promotion with vice presidents, which provide for an annual base salary and discretionary and incentive bonus payments.
−Removed: Certain key vice presidents who typically have been employed by the Company for several years may also have a standard form employment agreement.
+Added: Certain key vice presidents who typically
+Added: KORN FERRY AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: April 30, 2023 (continued)
+Added: have been employed by the Company for several years may also have a standard form employment agreement.
Upon termination without cause, the Company is required to pay the amount of severance due under the employment agreement, if any.
4 unchanged sentences
Quarterly Dividend Declaration
−Removed: On June 21, 2022 , the Board of Directors of the Company approved an increase of 25 % in the Company’s quarterly dividend policy to $ 0.15 per share and declared a cash dividend of $ 0.15 per share with a payment date of July 29, 2022 to holders of the Company’s common stock of record at the close of business on July 6, 2022 .
+Added: On June 26, 2023, the Board of Directors of the Company approved an increase of 20 % in the Company's quarterly dividend policy to $ 0.18 per share and declared an $ 0.18 per share dividend with a payment date of July 31, 2023 to holders of the Company’s common stock of record at the close of business on July 7, 2023.
The declaration and payment of future dividends under the quarterly dividend policy will be at the discretion of the Board of Directors and will depend upon many factors, including the Company’s earnings, capital requirements, financial condition, the terms of the Company’s indebtedness and other factors that the Board of Directors may deem to be relevant.
−Removed: The Board may amend, revoke or suspend the dividend policy at any time and for any reason.
−Removed: On June 21, 2022, the Board of Directors approved an increase in the Company’s stock repurchase program of approximately $ 300 million, which brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $ 318 million.
−Removed: Credit Facility
−Removed: On June 24, 2022 , the Company entered into an amendment (the “Amendment”) to its December 16, 2019 Credit Agreement (as amended by the Amendment, the “Amended Credit Agreement”) with the lenders party thereto and Bank of America, National Association as administrative agent, to, among other things, extend the existing maturity date and provide for a new delayed draw term loan facility.
−Removed: The Amended Credit Agreement provides for five-year senior secured credit facilities in an aggregate amount of $ 1,150 million comprised of a $ 650.0 million revolving credit facility (the “Revolver”) and a $ 500 million delayed draw term loan facility (the “Delayed Draw Facility”, and together with the Revolver, the “Credit Facilities”).
−Removed: The Amended Credit Agreement also provides that, under certain circumstances, the Company may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $ 250 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00.
−Removed: Extensions of credit under the Delayed Draw Facility are available to the Company in up to two advances through June 24, 2023.
−Removed: Any amounts undrawn under the Delayed Draw Facility as of June 24, 2023 will no longer be available to the Company.
−Removed: The Amended Credit Agreement contains certain customary affirmative and negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments.
−Removed: In addition, the Amended Credit Agreement contains a covenant that requires the Company to maintain a maximum consolidated secured leverage ratio of 3.50 to 1.00 (which may be temporarily increased to 4.00 following certain material acquisitions under certain circumstances) (the “Financial Covenant”).
−Removed: The principal balance of the Delayed Draw Facility, if any, is subject to annual term loan amortization of 2.5 % for the fiscal quarters ending September 30, 2022 through June 30, 2024 , and 5.0 % for the fiscal quarters ending September 30, 2024 through June 30, 2027 , with the remaining principal due at maturity.
−Removed: The principal balance of the Revolver, if any, is due at maturity.
−Removed: The Credit Facilities mature on June 24, 2027 and any unpaid principal balance is payable on
−Removed: KORN FERRY AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: April 30, 2022 (continued)
−Removed: The Credit Facilities may also be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary breakage fees).
−Removed: Amounts outstanding under the Amended Credit Agreement will bear interest at a rate equal to, at the Company’s election, either Term Secured Financing Overnight Rate (“SOFR”) plus a SOFR adjustment of 0.10 %, plus an interest rate margin between 1.125 % per annum and 2.00 % per annum, depending on the Company’s consolidated net leverage ratio, or base rate plus an interest rate margin between 0.125 % per annum and 1.00 % per annum, depending on the Company’s consolidated net leverage ratio.
−Removed: In addition, the Company will be required to pay to the lenders ticking fee of 0.20 % per annum on the actual daily unused portion of the Delayed Draw facility, and a quarterly commitment fee ranging from 0.175 % to 0.300 % per annum on the actual daily unused amount of the Revolver, based upon the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.
+Added: The Board of Directors may amend, revoke or suspend the dividend policy at any time and for any reason.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.