Korn Ferry (KFY) 2010 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Korn/Ferry International conference call.

At this time all participants are in a listen-only mode.

Later we will conduct a question-and-answer session.

As a reminder, this conference is being recorded.

Before I turn the call over to your host, Mr.

Gary D.

Burnison, let me first read a cautionary statement to investors.

Certain statements made in the presentation today will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements.

Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, which are beyond the Company's control.

Additional information concerning such risks and uncertainties can be found in the release relating to this presentation in the Company's annual report for fiscal 2009, and in other periodic reports filed by the Company with the SEC.

With that I'll now turn the call over to Mr.

Burnison.

Please go ahead, Mr.

Burnison.

Well, thank you, Kaley, and good morning to everyone and thanks for joining us.

Today I'm very pleased and proud to report our fourth consecutive quarter of sequential fee growth.

And in fact it is the second largest quarterly sequential increase in our firm's 40 year history.

The growth was in nearly every market sector and business.

It was up 17% sequentially, and we hit revenues of about, fee revenues of almost $169 million.

I would also say that based on the recent report issued by our trade organization, the AESC, our growth has tripled the industry over the last year.

And in fact our quarterly run rate of revenue has grown by almost 60% from the trough last year, and boy, what a difference a year makes.

The year-ago, where businesses were in the midst of the worst recession that certainly we have seen in generations, financial markets were frozen, CEOs were hoarding cash, and every business around the world had fallen.

And I think the thing that I am most proud of our organization, is that we have done absolutely everything that we said we were going to do.

Number one, we preserved the brand.

We positioned the Company for growth, and we are successfully accelerating through the economic turn.

We've absolutely done it.

We've far exceeded the industry's growth rate.

We've made two acquisitions, we've added and developed people in the organization.

We are profitable, and we ended the year with almost $300 million in cash.

And for us, indeed for Korn/Ferry, the other side of crisis was opportunity.

We used the past 12 months as a time to continue our transformation, helping clients achieve extraordinary results through their people.

For the year, a full quarter of our revenue came from our leadership and talent consulting business, as well as Futurestep, our outsource recruiting subsidiary, and this growth really I think validates the strength of our strategy.

We are going to continue to seize on the momentum that we got, in the year ahead, by accelerating our strategic initiatives, capitalizing on our strong balance sheet, and developing and retaining the fabulous talent in this organization, all while balancing investment and profitability.

We are going to systematically and proactively drive deeper and more scalable client relationships, while accelerating our evolution as a consultative solutions-based firm.

We are more effectively broadening the conversations with clients, and we are driving opportunities every day for our diversified solutions business.

It all starts with how we go to market, driving an integrated approach that is solutions-based and it really is anchored in unparalleled client excellence.

Last year, across all businesses, by nearly all measures, we raised the overall quality of our services.

At the same time, we are elevating and extending the Korn/Ferry brand to create the top of mind brand in human capital.

And our strategy for increasing mind share and relationships at the highest level is driving a significant increase in our CEO and Board related consulting assignments.

We've also elevated and extended the brand through both online and offline marketing initiatives, and our substantial thought leadership platform.

Last year we launched our new quarterly periodical briefings, that is complemented by a host of cutting edge research from the Korn/Ferry Institute.

In the next year we are going to continue to scale our leadership and talent consulting group, as well as our Futurestep business.

We exited the year in our leadership business at over a $90 million run rate, which is a far cry from the $8 million assessment practice we had five and a half years ago.

Our leadership business now represents 14% of our firm.

I'm equally proud that Futurestep gained sequentially, and it was driven by growth in all regions.

Revenue came in a little over $18 million, and for the next year we are going to continue to focus and refine our efforts around RPO and driving large sustainable projects.

We are also going to have a pragmatic M&A strategy.

I think we have demonstrated that over the last several years, and I would point to the last year, both in a acquisition we made at the beginning of this calendar year, in SENSA which is a governmental consulting business, as well as almost a year ago here in London with a firm called Whitehead Mann which was a leading executive search firm in the UK.

And I think that the combination of Whitehead Mann and Korn/Ferry has resulted in exceptional footing for us in the European market.

And in fact London is now our largest office in the world.

Lastly, we are going to continue to make this Korn/Ferry a premier career destination.

We are going to add to our talent, industry leading consultants who are attracted to a differentiated strategy, and we are also going to continue to develop and retain the fabulous colleagues we have in the organization today.

In terms of our outlook, clearly many, many western economies face staggering debt levels.

There are questions about the European economy, as well as the pace of the global economic recovery.

But one thing is absolutely sure.

I am 200% confident that we are heading in the right course.

Our performance over the last year absolutely illustrates the strength of our brand and our differentiated business.

We are going to continue to position our firm for growth, and accelerate through the economic turn, all with keeping a watchful eye of the global macroeconomic environment.

So with that I would like to turn it over to our CFO, Mike DiGregorio.

Mike?

Thanks, Gary, and good morning, everyone.

As Gary said, fiscal 2010, quarter four, marked the fourth consecutive sequential quarter of growth for Korn/Ferry, as our fee revenue continued to sharply accelerate from the current cycle load just a few quarters ago.

On a constant currency basis, fiscal 2010 fourth quarter fee revenue grew $24.6 million, or nearly 17% sequentially, and was up 50% plus year-over-year, reaching $169 million.

For all of fiscal 2010, fee revenues at constant currency was down 11%.

However, throughout the year we believe we have taken market share significantly, outperforming the industry and our major competitors.

The number of newly awarded assignments in the fourth quarter was up nearly 70% from the trough 12 months ago.

Additionally, growth continues to be broad based, with all of our major operating regions and divisions posting positive constant currency growth in the quarter on both a year-over-year and sequential basis.

Just as importantly, profitability continues to rise with revenues as we continue to leverage our fixed cost base, and realize the benefits of our recent restructuring and other cost reduction initiatives.

Excluding all restructuring related charges and recoveries in the current and prior periods, fourth quarter consolidated operating earnings grew $7.7 million, or 128% sequentially, reaching $13.7 million with a 400 basis point improvement in operating margin to 8.1%.

On the same basis, compared to the fourth quarter of fiscal 2009, fourth quarter consolidated operating earnings improved by over $19 million.

Cash collections also improved in the quarter, as worldwide cash and marketable securities balance jumped by over $45 million to $296.5 million.

During the quarter, we reinitiated our share repurchase program.

From April 30 to June 11, we repurchased approximately 640,000 shares with total cash proceeds of approximately $10 million.

There are now approximately $25 million of unused share repurchase funds that had been previously authorized by our Board of Directors.

Finally, excluding all restructuring related charges and recoveries in the current and prior periods, fourth quarter earnings per share were $0.19 per share, an improvement of $0.25 year-over-year and $0.08 sequentially.

Earnings per share have now improved for the fourth consecutive quarter.

At this point I'll turn the call over to our VP of Finance, Gregg Kvochak, to review our operating segments in a little more detail, and we'll talk some more.

Gregg?

Thanks, Mike.

I'm going to start with the executive recruiting segment.

Consolidated fourth quarter executive recruiting fee revenue improved to $150.6 million, which is up $21.4 million or 17% sequentially, and up $58.7 million or 64% year-over-year.

On a constant currency basis, executive search fiscal 2010 fourth quarter fee revenue was up over $23.7 million or 18% sequentially, and up $52.3 million or 57% year-over-year.

For all of fiscal 2010, constant currency consolidated executive search fee revenue was down 8%.

As previously stated, fourth quarter sequential and year-over-year fee revenue growth was broad based with all major operating regions higher.

The number of newly opened assignments was up 14% in the three months ending April 2010 versus the three months ending January 2010.

Sequentially, the financial services and technology specialty practices grew the fastest, up 43% and 42% respectively.

In the North American region, fourth quarter fee revenue was up $14.8 million, or 21% sequentially, and up $28.2 million, or 50% year-over-year, reaching $85 million.

Sequential growth was strongest in the financial services, technology and life sciences practices, which were up 50%, 46% and 33% respectively.

Newly confirmed assignments grew 23% in the fourth quarter versus the third quarter.

Market conditions in Europe remained stable in the fourth quarter with fee revenue of $36.3 million.

On a constant currency basis, Europe fourth quarter fee revenue was up $2.1 million, or 5% sequentially, and up $13.4 million, or 65% year-over-year.

Nine of 20 individual country markets grew sequentially in the fourth quarter, led by Germany, which was up 33%.

On a specialty practice basis, financial services and technology improved the most sequentially, and were up 20% and 32% respectively.

For the second consecutive quarter, sequential growth trends were strongest in Asia Pacific, where fourth quarter fee revenue grew $5.2 million, or over 32%, reaching $21.7 million.

On a constant currency basis, fiscal 2010 fourth quarter fee revenue improved $5.1 million, or 31% sequentially, and $9.7 million, or 95% year-over-year.

Nine of 11 Asia Pacific country markets grew sequentially, led by India up 63%, Hong Kong up 61%, and China up 18%.

All major Asia Pacific specialty practices were up sequentially, led by financial services up 72%, technology up 28%, and consumer goods up 20%.

In South America, fee revenue improved sharply to $7.6 million, up $1.8 million or nearly 31% sequentially.

Measured on a constant currency basis, Latin America fourth quarter fee revenue was up 39% sequentially and up 59% year-over-year.

At the regional level, six of seven individual country markets were up sequentially, led by Brazil, which was up $1.9 million, or 64%.

The total number of executive search consultants at the end of the fourth quarter was 473, down 10 sequentially but up 13 year-over-year.

Annualized fourth quarter fee revenue production per consultant grew 16% sequentially to approximately $1.15 million.

Excluding all restructuring charges and recoveries in the current and prior periods, consolidated fourth quarter executive search operating earnings were $23.2 million, up $19.8 million year-over-year, and up $4.7 million or 25% sequentially.

The consolidated executive search operating margin was 15.4% compared to 3.6% in the fourth quarter of fiscal 2009 and 14.3% in the third quarter of fiscal 2010.

Now turning to Futurestep.

Fiscal fourth quarter fee revenue grew for the fourth consecutive quarter, reaching $18.1 million.

Measured on a constant currency basis, fourth quarter fee revenue was up 5% or $800,000 sequentially, and up 9% or $1.3 million year-over-year.

For all of fiscal 2010, Futurestep fee revenue was off 30% on a constant currency basis.

Geographically, all three regions grew sequentially, led by Europe which was up $700,000 or 13% on a constant currency basis.

Futurestep lost $1.0 million in the fourth quarter due primarily to $1.2 million of severance costs associated with targeted staff reductions designed to further right-size their cost base for projected near term demand, and to improve future profitability.

Now I'll turn the call back over to Mike to discuss our outlook for the first quarter of fiscal 2011.

Okay.

Because of the strong finish to fiscal year 2010, our consolidated backlog of assignments carried into fiscal 2011 quarter one is the highest it has been in almost two years.

Additionally, overall recent new business trends have remained favorable for us around the world.

Consolidated May new business awards were similar to April.

However, we realize that the pace of economic recovery in different regions around the world is uneven and unpredictable.

The near term effect, if any, of recent continued volatility in worldwide financial markets on the demand for executive recruiting, leadership and talent consulting, and middle management RPO solutions in key Korn/Ferry markets is a little unclear, as are currency cross rates.

Given these conditions, and factoring in a slight seasonal slowing in new business awards that is typical in July driven by the beginning of the summer vacation season, fiscal 2011 first quarter fee revenue will likely range between $155 million and $175 million, and earnings per share from $0.15 per share to $0.25.

This guidance assumes foreign exchange rates remain at or near current spot rates for the first quarter.

With that, we conclude our prepared remarks, and we'd be glad to take any questions, and answer any questions you might have.

Thank you.

(Operator Instructions).

We'll go to the line of Kelly Flynn at Credit Suisse.

Please go ahead.

Hi.

Thanks.

I have a couple of questions.

First of all, on Whitehead Mann, I know you are not really breaking it out, but can you give us kind of an idea of organic growth and if possible, a contribution from that business?

No.

We are not managing the business that way.

It's been fully integrated.

I mean obviously it has had an impact on our growth, but it wouldn't at all distort same-store sales.

Okay, great.

And then can we talk a bit more about Europe?

I think broadly it would be helpful, maybe Gary, if you could just make some more qualitative comments about how you are thinking about all the negative headlines in Europe?

And I know the business has been strong.

And I think you guys used the word stable, but it was down a bit sequentially.

Is that normal from your perspective or was there any hit at all from what we are reading about the economy over there?

Well, I am in Europe today.

I think you invest in a crisis, and I'm not suggesting that there's a crisis because the United States in the public sector has significant debt loads as well, but for us it represents an enormous opportunity, for us as an organization.

And it's hard for me to speak about the next two months or the next four months, but in terms of the next five years, the next ten years, I'm extremely optimistic about what we can do with our European business.

And it's hard to say, again, what the cards hold in the very, very short term, but our strategy is simple, and that is, within Europe we want every board and CEO when they have a people opportunity or issue to think of one brand and that is Korn/Ferry and that is what we are going to create.

Okay, and what about the sequential albeit slight, but slight sequential decrease in Europe.

Is that, from your perspective, normal or does that reflect a bit of an impact from what is going on?

There is nothing that we see right now that would call us to put up the white flag.

Okay.

And that was partly exchange rates.

Okay, that's helpful, thanks.

Just a couple more, the Asia Pac margin was very high, like 27%.

I thought your target was mid-teens.

Can you just clarify in I'm wrong on the target, or how sustainable do you think that margin is or if there were any one-offs in there?

Well, we would love that to be the target.

From quarter to quarter you are going to see in the regions, there's going to be things that go in and out.

So it's hard to judge on one quarter.

Our Asian business has been extremely profitable if you look back over the last 40 quarters or so, you'll see a very consistent theme emerging.

But we would have great expectations for our targets there, and although they may not necessarily be what they could be in the United States, they should be quite high.

Okay, great.

And then one final one.

Can you give us the confirmation trends so far in this quarter?

Well, actually how they tracked month to month in the fourth quarter, and then what you have seen so far in terms of year-over-year growth in the first quarter?

Sure.

Mike, Gregg, you guys want to handle that?

Gregg, do you have the numbers?

Sure.

Actually if you look at this last quarter, March was our best quarter of newly awarded assignments.

We were down about 5% in April versus March, and so far May, as Mike said, looks very or does or is very similar to April.

And you are talking sequentially?

Yes.

Sequential.

Okay, great.

Thanks a lot.

I appreciate it.

Next we'll go to the line of Kevin McVeigh at Macquarie.

Please go ahead.

Great, thank you.

Real nice job on the quarter.

I wonder if you can just help us understand, obviously you had a pretty sizable beep on the top and bottom line.

What changed inter-quarter that caused the quarter to be so much stronger?

What changed in the quarter to be so much stronger than what?

Than what your guidance was.

What came in much better?

Was it the US?

Was it Europe?

You beat the high end of your range by $0.03, and the revenue was pretty strong, where was it much stronger than what you had expected?

I think it was pretty broad based.

This is now my 34th quarter, and we've hit expectations every single quarter.

So we tend to be pretty, have an open eye in terms of the macroenvironment, and certainly as you pick up the paper every day, it gives you pause.

And today is no different than yesterday.

But if you look, it was a pretty broad basis in terms of performance relative to our own internal expectations.

Great.

And then if I look at the leverage on the SG&A line, it seems like a nice leverage sequentially.

Is that a function of where you are coming out on the consultant headcount or were there any other initiatives at work there?

Well, we do have initiatives that are ongoing around SG&A, but it's probably more of a -- due to revenue than it is anything else.

But we do have an ongoing initiative to be absolutely as efficient as possible.

Great.

Okay, and then just in terms of use of capital going forward, you obviously reengaged the buyback.

Do you have a certain percentage of the free cash flow you dedicate to buyback versus acquisitions, or is it, any thoughts around that?

No.

We haven't publicly said, as Mike said, there's technically $25 million left under the current buyback.

If you look in the last cycle, you'll see that it was a pretty equal distribution between investing in the business, returning cash to shareholders and acquisitions.

And certainly as we sit here today, our first priority and first emphasis would be to invest it in the business above anything else just because we think the opportunities long-term are substantial for us to transform this industry.

But we haven't publicly broken out any, in any kind of framework other than what I've just described.

Great.

Thank you.

Thank you.

And we'll go next to the line of Tobey Sommer with Suntrust.

Please go ahead.

Hi, this is Frank in for Tobey.

I wanted to ask about the average fee per engagement, there was a nice increase there.

Was that due to any sector drivers of financials and technology?

Or was that kind of broad based pricing strength across segments?

Any color you can give there would be great.

No.

I mean, if you look sequentially, financial services was very strong as was technology, but our average fee during this great credit debacle like the industry overall suffered, because CEOs hoarded cash and cash compensation levels were lower.

So we would hope and trust as we continue to elevate this brand and extend it, that there is quite a bit of upside here in the average fee.

It's hard to speak one quarter at a time, but our average fee six, seven quarters ago was about $92,000 I think.

Something like that.

Okay.

Great.

And could you talk a little bit about the change in the provision for bad debts and the adjustment you made there?

Any color you can give.

Sure.

Mike?

We have a system that fundamentally tracks very, very precisely, not only overall days outstanding but the aging, and we had a very significant improvement in the aging in the fourth quarter.

So effectively, quarter to quarter, we book, I will tell you that going forward this year I think we are going to do it a little bit different.

I think it's important for you to know because whereas in the past we've been very finite, looking at it on a quarterly basis based on the aging.

What we are going to start doing this year is looking at the year as a whole and factoring both our historical experience on an annual basis.

What we are going to try to do this year is look at the year as a whole, look where we are currently in collections, look at current days outstanding, look at the aging, and make an estimate of the annual expected bad debt, and fundamentally end up with quarterly charges that are much more regulated instead of moving up and down.

Okay, great.

That's very helpful.

And finally, two quick numbers questions.

Can I get cash flow from operation and CapEx for the quarter?

Gregg, do you have those handy?

Sure.

Cash flow from operations in the fourth quarter was about $50 million.

And CapEx was about $3 million.

Great.

Thanks so much.

Thank you.

Our next question will come from the line of Mark Marcon at RW Baird.

Please go ahead.

Good morning, and congratulations on the terrific results.

Thanks, Mark.

I was wondering, could you talk a little bit more about Asia Pac.

That growth there was pretty impressive.

Were there any special projects that came across or was it just all the way across the board just a big ramp?

Well, it was also, Asia was, like the industry, was down considerably too, right?

Sure.

Sequentially there was a pretty big lift in China, in India and Hong Kong, and some of that was financial services.

Some of it was technology, but there wasn't any one time big projects, Mark.

Great.

And can you give us a general sense for the relative size of the major markets in Asia Pac at this point?

Gregg?

Sure.

Roughly, China, excluding Hong Kong, of course, is about 19%.

Hong Kong is about 22% of overall revenue for the region.

And let's see, India is about 11%.

Terrific.

So it sounds like everything is firing on all cylinders over there, and it looks like over there the outlook should continue to be quite positive.

Can you get back in Asia Pac to your 2006 kind of margin levels or is there anything structural that's changed?

We better.

Okay, great, that's fantastic.

And then in South America, you also had a very big sequential jump.

Was there anything unusual there?

No.

Nothing in terms of one time projects and the like.

There the strength was not in financial services and technology.

The strength was in life sciences and industrial.

And then Gary, over the last six months you've made 12 announcements in terms of senior consultants.

Some of them quite high profile.

Can you talk a little bit about strategically what is attracting them to Korn/Ferry?

Are there any big guarantees that are being given?

How would you expect them to fit in and what should we, how should we think about your expansion plans given that you are seeing great growth but at the same time you've always been very forward-looking in terms of keeping your eye out for any sort of negative changes that could occur in the broader economy.

Well, you know us well, and I've been here now eight and a half years, and we do tend to be opportunistic.

And it is true that the other side of crisis is opportunity.

We believe in that wholeheartedly.

The time to invest in these businesses is not in a bull market, rather in a bear market.

The more difficult time to manage these business is in a bull market, not a bear market.

A bear market is time for planting the seeds for spring.

We absolutely have been an organization that does not buy people.

I fundamentally believe that if people join for money, they'll leave for money, and I would like to think that our strategy and our platform is substantially different, and the firm that we are building is quite unique and is leading the industry.

So I would hope that the people that are joining this organization are joining for those reasons, as well as the fabulous colleagues that we have in the business today.

Great.

And can you also talk a little bit about your differentiated strategy as it relates to leadership development services, sound like it's up to 14%.

Any thoughts about what the plans are going to be like there, at what point should we see profitability.

How are we thinking about that?

Well, for us it all begins with the flagship business, and how you can take an episodic business and differentiate it, and to essentially broaden the conversation with clients around how a Board or CEO deploys, develops, keeps and pays the workforce.

And so both our outsourcing business and our leadership business play towards that strategic framework.

Great.

And how big do you think LDS will be this coming year?

We haven't publicly disclosed numbers like that in terms of forward numbers.

I believe that it's a multi-hundred million dollar opportunity, Mark.

Just look at where it was the in the fourth quarter, over $90 million.

That was $8 million five years ago.

Now, half of that has been organic, and half of that has been acquisitive growth.

But I just look out and I say, that is a multi-hundred million dollar opportunity.

We will create the most globally relevant leadership business in the world.

I have no question about that.

How big that is, the precise number, it's hard to say.

In terms of a margin profile, what should we aspire to there?

Well, that margin should -- there are several different pieces to the business.

The products business has extraordinarily high margins, operating margins that are 37%, 38%.

The services side of the business will have a margin that will be somewhere between the executive search in terms of cycle to cycle margins and the outsourcing business, Futurestep.

Great.

I'll jump back on with some additional questions.

Thanks.

Thank you.

(Operator Instructions).

We'll go to the line of Josh Vogel at Sidoti & Company.

Please go ahead.

Good morning.

Thank you.

Just a couple of quick ones here.

With regard to your guidance, I know the summer months are seasonally softer in Europe, and I was just wondering what your fee revenue assumptions were built into your guidance for Q1, at least based on a sequential basis.

What do you mean by that?

Based on your fee revenue guidance, what are your expectations for Europe in Q1?

Well, our expectations for Europe and for the other businesses is that there will be some summer seasonality.

We have not factored into our guidance any kind of significant deterioration in the European landscape.

Okay, that's helpful.

Thank you.

And in the interest and other income line, was there anything one time in there besides just interest income?

I'll ask my esteemed colleagues, Gregg or Mike, to help me there.

Gregg, you have some of the detail there?

No, Josh, nothing unusual.

We do record gains on our ECAP portfolio, which is a deferred compensation program for our consultants, as the marketable securities that back that program go up, the unvested amounts, the unvested gains in this case would be recorded below the line, about $1.1 million or so in this quarter, but that's not unusual in the sense that we've had gains pretty much every quarter this fiscal year.

Okay.

And I'm sorry, I may have missed the commentary on this, but what are your expectations for Futurestep in fiscal 2011 in terms of return to profitability?

Are you pretty much done with restructuring there or additional action needs to be taken?

With all of our businesses, we continually look to make sure that we are optimizing the platform that we have.

And I think looking back and it's absolutely my mistake and my responsibility, but I think we probably tried to be too many things to too many people, and I hope now that we have refined the operating model so that we don't have to take those kind of cost elimination steps.

Okay.

And I'm sorry, I may have missed this as well but what is the expected bonus payment you are going to be paying out this quarter?

The expected bonus payment will probably be in the 70s, in terms of millions of dollars, $80 million, something like that.

Okay, great.

Thank you very much.

Thank you.

We'll go back to the line of Mark Marcon at RW Baird.

I wonder if you can talk a little bit more about Europe in terms of what you are seeing there.

You indicated that nine out of the 20 markets grew sequentially.

Which market, are you seeing any sort of weakness in any of the southern markets or how should we think about that?

Well, certainly, again I would say that on a broad basis we have not seen the impact of what we've all been reading about in the newspapers for the last several weeks.

I mean obviously our business in Greece sequentially was down, yet if you look at Greece year-over-year it was actually up quite significantly in the quarter.

It's hard to read into one week, two weeks, three months.

So I would just say, Mark, that in general we have not seen something that would suggest a broad deterioration of the business.

I think that the closer you are to Spain, Portugal, Greece, obviously your concerns have to be heightened, and again we have a watchful eye.

But as of this day and time, there has not been a significant deterioration.

In the northern European markets, are you just continuing to see a steady pace in terms of improvement?

We are continuing to see a broad-based recovery, and Mike and Gregg shared the confirmation trends since April.

And so those confirmation trends that they talked about apply very generally to the world as a whole.

And I'm assuming that March was up nicely relative to February?

I think that is what Gregg referred to, yes.

That's correct, Mark.

Okay, great, and then in North America in terms of the margins there for the quarter, I am assuming that that is partially due to the rejiggering of the bonuses given how much stronger the revenue was for the full year.

Is that--?

Totally.

Totally.

That's absolutely right.

Great.

Thank you very much.

Thank you.

And next we'll go to the line of Kevin McVeigh with Macquarie.

Please go ahead.

Great.

Thanks.

Gregg or Mike, just a couple of housekeeping.

Can you give us CapEx, D&A, share count and the tax rate for the full year, 2011, if you have it.

Sure, depreciation and amortization for the full year was $11.5 million.

No, Gregg, I'm sorry, estimates for 2011.

Oh, 2011.

You should be looking closer to $12.5 million on the depreciation and amortization side.

Okay.

And CapEx for fiscal 2011 somewhere in the $10 million range.

And tax rate about 37.5% to 38%.

Great.

Okay.

Thank you.

Thank you.

We'll go back to the line of Tobey Sommer at Suntrust.

In terms of the new engagement growth which was fairly nice, is that coming from any particular area that you are seeing those new engagements from?

It's very much -- it very much matches the trends that we described in the prepared remarks around revenue.

Okay, great.

And in terms of North America, are you seeing any differences or trends in terms of the geographic regions or segments within North America, any color there.

Well, that is really tough in terms of geographic because we do manage the business as one.

Financial services has been, this last quarter sequentially, was very, very strong.

It was up 43% sequentially in North America as an example, and that was driven by asset management and investment banking, but again, you can't just take a quarter and try to extrapolate it.

I would say that there's been, in the United States there's been nothing that has been, jumped off the radar that would say, wow, there's a real geographic trend, but from an industry perspective, what's been a little bit stronger lately has been technology and financial services.

Of course, those were pretty hard hit a year ago, whereas our life sciences and healthcare business continued to hum along.

So again, it's tough to read it any more than that.

Okay, great.

And finally, the share count implied in guidance?

Gregg?

Share count, as we continue to manage the dilution with the share buyback program, I think for next year, let's just look to the next fiscal quarter, somewhere just south of 47 million shares.

Great.

Thanks a lot.

Thank you.

And it appears there are no further questions, Mr.

Burnison.

Okay.

Well, thank you all for joining us.

I'm, again, I'll end as I started.

I am enormously proud of our colleagues that we have around the world.

You have our commitment that we are going to continue to lead this industry to drive long term shareholder value to transform not just the firm but the industry, to put our clients first, and build awareness around all of our solutions in the global business community.

Once again, thank you very much for your interest and your time today.

Thank you.

Thank you.

And ladies and gentlemen, this conference will be available for replay for one week starting today at 11:00 AM Eastern Daylight Time, and running through the day, June 22 at Midnight.

You may access AT&T executive playback service by dialing 1-800-475-6701 and entering the access code of 158564.

International participants my dial 320-365-3844.

Additionally, the replay will be available for playback at the Company's website, www.kornferry.com in the Investor Relations section.

Thank you for joining us today.

You may now disconnect.