Korn Ferry (KFY) 2018 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry First Quarter Fiscal Year 2018 Conference Call.

(Operator Instructions) As a reminder, this conference call is being recorded for replay purposes.

We have also made available in the Investor Relations section of our website at kornferry.com a copy of the financial presentation that we will be reviewing with you today.

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

Certain statements made in the call today, such as those relating to future performance, plans and goals, 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 and in the periodic reports filed by the company with the SEC, including the company's annual report for fiscal 2017.

Also, some of the comments today may reference non-GAAP financial measures such as adjusted fee revenue, constant-currency amounts, EBITDA and adjusted EBITDA.

Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the Investor Relations section of the company's website at www.kornferry.com.

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

Please go ahead, Mr. Burnison.

Okay.

Good afternoon, and thank you for joining us.

I've got Bob Rozek and Gregg Kvochak here.

I'm going to make a couple of brief overall comments and turn it over to Bob.

I think number one here, this is our first quarter of the fiscal year, and I'm incredibly proud of the company that we're building.

I really believe that we're laying the foundation for a multibillion-dollar firm, a Korn Ferry, a firm that stands at the intersection of talent and strategy from organizational advisory, strategy execution, leadership development, to compensation and reward offerings.

This is a firm that helps clients drive performance through people.

And I think when you actually look at the results that we just released, it's pretty clear that our actions speak louder than the words and that the progress is, indeed, very tangible.

The top line was up 7% year-over-year at constant currency.

That's up about $25 million over the prior year.

New business in search is up a little over 10% or so over the last few months.

Hay Group new business is up 5%, 6% last several months compared to the prior year.

I would say that our profits were -- I'd say profits were good.

They weren't great primarily because of the investments that we've talked about that we've made in the business.

Yet I'm still very proud of the EPS -- adjusted EPS of $0.55 and the adjusted EBITDA of $59 million for the quarter.

During the quarter, all business lines grew.

Executive Search was really solid, generating double-digit growth at constant currency in North America, Europe and Asia.

Since we last spoke, we made -- we've made a number of leadership changes.

Mark Arian has come in to lead our advisory business.

Mike Distefano, we moved him over to Asia to reshape our Asian strategy.

And Byrne Mulrooney is settling into his new role, leading our products business, which for today is about a $230 million, $240 million annual business for us that we think has tremendous upside.

We've brought in a new board member that I'm very excited about.

Angel Martinez joined us here in the past quarter.

We also bought back to date now through yesterday 2 million shares in the open market.

We're continuing with again exactly what we said, a consistent capital allocation plan.

And finally, one thing that I'm really proud of is we were ranked #1 in the U.K. in board and CEO search.

Hay Group, our advisory business, was up 2% at constant currency year-over-year.

And for us, I mean, the real key in the growth in that business going forward as well as the enterprise, I think, comes down to really the following factors: I mean, number one, we've got to drive an integrative approach, and that's an enterprise-wide approach, which includes pipeline management; two, we've got to move more of the business towards bigger-ticket, more impactful assignments; we've got to continue to bring talent into the firm, develop the talent that we have; and finally, migrate the firm towards industries and solutions.

When you look at the Hay Group business this last quarter and you kind of look at it by solution area, about 30% of it is around assessment and succession.

Leadership development is 22%.

Rewards, consulting and products is about 21%.

Those are the big pieces.

And when we think about the future and the investments that we're making, we're making those investments really around those areas, so where we've got a distinct advantage, where the market's big, where it's growing, so leadership development, rewards and benefits and our products business.

So that's really the quarter.

I'm very, very proud of this company that we have here.

I'm proud of the results for the quarter.

And I think off to a very, very good start for this fiscal 2018.

So with that, I'll turn it over to Mr. Rozek.

Great.

Thanks, Gary, and good afternoon, everyone.

I'm going to start, like I always do, with a few key highlights.

First, globally, our fee revenue in the first quarter was approximately $401 million, improvement of nearly 7% when measured at constant currency.

All 3 of our major business segments had revenue growth in the first quarter.

And our growth was strongest for the talent acquisition businesses, with Executive Search and Futurestep growing at year-over-year constant currency by about 11% and 12%, respectively.

And then as Gary mentioned, for Executive Search, our fee revenue growth in the first quarter was broad based with double-digit growth in North America, Europe and Asia Pacific.

Second, despite the recent investment spending focused primarily on consultant hiring, our profitability remained good in the first quarter.

Adjusted EBITDA was $59.4 million.

That's an improvement of $3 million and nearly 5% compared to the first quarter of fiscal '17.

Third, operationally, we continued the reshaping of our workforce with the hiring and onboarding of many seasoned consultants that bring us talents and skills that will complement and enhance the productivity of our existing consultant base.

Compared to the fourth quarter of fiscal '17, we've added 15 net new fee earners in Executive Search and 26 at the Hay Group.

After a period of ramp-up, we expect many of these new fee earners to be fully productive within the year and to really start making positive contributions to growth later in the second half of fiscal '18.

And then last, as we discussed on our last earnings call, we've continued to deploy a balanced approach to allocating our capital.

This includes the payment of our quarterly dividend of $6 million as well as the ongoing repurchase of our shares.

As of yesterday, over the last 4 quarters, we've now spent about $57 million and have repurchased about 2 million shares, which approximates 3.5% of our outstanding fully diluted share base.

Our current average repurchase price is about $28.50, which is about a 14% discount to our current market price.

We currently have approximately $93 million remaining on our corporate share repurchase authorization.

Now turning to new business trends.

First, for Executive Search, on a global basis, the seasonally strong momentum of new business that we saw in the fourth quarter of fiscal '17 continued into the first quarter of fiscal '18.

In the first quarter, consolidated Executive Search new business was approximately $169 million, up over 15% year-over-year.

North America, Europe and the Asia Pacific regions all achieved double-digit new order growth in the first quarter.

And similar to Executive Search, new business growth in the first quarter for Hay Group also improved and was up, as Gary mentioned, between 5% and 6% measured year-over-year.

Finally, in the first quarter, Futurestep achieved another record new business quarter with total awards of approximately $110 million.

Now included in this $110 million is approximately $82 million of RPO solution work, which consists of a mix of large current customer renewals and expansions, which totaled about $42 million, as well as new logo wins of approximately $40 million.

At the end of the first quarter, our total cash and marketable securities were $408 million, up approximately $27 million compared to the first quarter of fiscal '17.

Excluding amounts reserved for deferred comp, accrued bonuses, our investable cash balance at the end of the first quarter was approximately $235 million, and that's up about $40 million year-over-year.

At the end of the quarter, we had outstanding debt of about $251 million.

And then finally, our adjusted fully diluted earnings per share were $0.55 in the first quarter.

That's up $0.03 or 6% compared to the first quarter of FY '17.

And on a GAAP basis, our fully diluted earnings per share were $0.51.

Now with that, I'll turn it over to Gregg to review the operating segments in a little more detail.

Okay.

Thanks, Bob.

Following a seasonally strong fourth quarter, our Executive Search segment continued its strong pace of growth in the first quarter of fiscal '18, achieving $161.2 million of global fee revenue.

Measured year-over-year at actual exchange rates, our Executive Search segment grew $14.8 million or 10.1% in the first quarter and grew approximately 11% measured at constant currency.

Regionally, at constant currency, growth in the first quarter was broad based and driven by double-digit growth in North America, up 12.4%; Europe, up 16.5%; and Asia Pacific, up 10.3%.

By specialty practice, Executive Search fee revenue growth was mixed in the first quarter.

Compared to the first quarter a year ago, growth in our technology practice, up 37%, and industrial practice, up 35%, was offset by slower demand in our consumer goods, financial services and life sciences and health care practices, which were down 7%, 4% and 3%, respectively.

The total number of dedicated executive recruitment consultants worldwide at the end of the first quarter was 532, up 44 year-over-year and up 15 sequentially.

Annualized fee revenue production per consultant in the first quarter was $1.23 million, and the number of new search assignments opened worldwide in the first quarter was 1,659, which was up approximately 15% year-over-year.

Consolidated adjusted EBITDA for Executive Search in the first quarter was $35.2 million, which was up $3.5 million or 11% compared to the first quarter of fiscal '17.

This improvement was primarily driven by stronger fee revenue in our largest Executive Search segments: North America and Europe.

The consolidated adjusted EBITDA margin for Executive Search in the first quarter of fiscal '18 was 21.8% compared to 21.6% in the first quarter of fiscal '17.

Now turning to Hay Group where improving new business trends are beginning to translate into fee revenue growth.

Hay Group achieved fee revenue of $179.4 million in the first quarter or approximately $181.1 million translated at constant currency.

Measured year-over-year at constant currency, double-digit growth in both Europe and Latin America was offset by softer demand in North America and the Asia Pacific region.

As previously mentioned, new business activity for the Hay Group in the first quarter improved 5% measured year-over-year.

Despite the sharp increase in consultant hiring over the last 2 quarters, earnings and profitability for the Hay Group have remained solid.

In the first quarter, adjusted EBITDA for the Hay Group was $30 million with an adjusted EBITDA margin of 16.7%, both essentially flat measured year-over-year.

Finally, turning to Futurestep, which started the new fiscal year with another quarter of double-digit growth.

In the first quarter, Futurestep generated $60.6 million of fee revenue, which, measured at constant currency, was up 11.6% year-over-year.

Balancing investments to support delivery capacity related to many recent new business wins, Futurestep was also able to deliver earnings growth in the first quarter with EBITDA of $9 million, which is a year-over-year improvement of over 11%.

Now I'll turn the call back over to Bob to discuss our outlook for the second quarter fiscal '18.

Thanks, Gregg.

As previously discussed, our new business activity in the first quarter improved in all of our operating segments globally.

For Executive Search, new business awards in the first quarter were up 15% year-over-year, and we saw this trend of double-digit growth continue into the month of August.

If monthly new business patterns remain consistent with prior years, we expect Executive Search new business awards to improve sequentially in September and then peak at a quarter high in October.

For the Hay Group, the second quarter is typically a seasonally strong quarter for both new business and revenue, and growth should marginally benefit from the ramp-up in productivity of many of our recent consultant hires.

With regards to Futurestep, business under contract remains at an all-time high, and the pipeline of new business opportunities is expected to remain strong in the quarter.

Now during the last couple of quarters, as we previously discussed, we have aggressively hired fee earners and select support staff in all of our operating segments.

As is usually the case in the short term, due to the time required for ramp-up, many of these new-hire consultants will not immediately bill at full capacity, which could create a little bit of downward pressure on earnings and margins.

Now considering all of these factors and assuming worldwide economic conditions, financial markets and foreign exchange rates remain steady, we expect our consolidated fee revenue in the second quarter to range from $412 million to $428 million with year-over-year growth from all of our lines of business, and we expect consolidated adjusted diluted earnings per share to range from $0.58 to $0.66.

And finally, consistent with our prior quarters, our financial results in the second quarter will include the amortization of integration and acquisition costs of approximately $2.6 million for retention bonuses related to the Hay Group acquisition.

Including these costs, we estimate that the fiscal second quarter -- fiscal '18 second quarter fully diluted earnings per share measured by U.S. GAAP will likely be in the range of $0.54 to $0.62.

And with that, I'll conclude our prepared remarks, and we'd be glad to answer any questions you may have.

(Operator Instructions) And our first question comes from the line of Kevin McVeigh with Deutsche Bank.

Wanted to -- either Bob, Gregg or Gary, any sense -- was any of the burst kind of pent-up demand given some of the uneasiness in the economy last year?

Or this -- I mean, obviously, the trends continued in October.

Was it kind of a new run rate in the business?

And then just along those lines, is there any way to quantify the production that you've hired as we think about the outyears?

The -- no, I -- look, if you go back a year ago, we have Brexit, right?

So when you go year-over-year, clearly, there was a lot of malaise last summer.

And quite frankly, even I was just there, there actually still is in the U.K. Companies are still reluctant to invest there.

But over the last several -- I would not say it's a burst.

I mean, we've definitely seen an uptick in industrial around energy and manufacturing, but I wouldn't say it makes any kind of outlying trend.

In terms of the talent that we're bringing in, we're up big time in terms of consultant numbers, and you could easily subscribe $1 million, $2 million per partner.

And depending on if we really are successful here, which I think we are and will be with our Hay Group business, that leverage could be quite meaningful, much higher than that.

But I wouldn't count on that here in the next investment horizon.

But we're trying to lay the foundation for a firm 5 years out that's multibillion dollars in revenue.

Got it.

And Gary, you do that based on what you have now?

Or would you look to maybe enhance that?

Because obviously, a multibillion -- you've been doing a great job, but it would be a double plus from kind of where you are.

Yes, for sure.

Clearly, M&A is going to have to be part of that, but we have to be balanced.

We have to make sure we're returning the cost to capital plus some to our shareholders and investing for the future and taking care of our colleagues.

It's definitely going to -- M&A is going to have to play a part.

Our next question comes from the line of Tim McHugh with William Blair & Company.

Wondering if you could elaborate on the new business for the leadership business.

I know -- or at least, it sounded like in the quarter it was the product side of leadership that drove the improvement.

Just curious, are you seeing the leading indicators, I guess, turn at all for kind of the consulting or advisory side of that business?

I mean, it's still too early.

I mean, I do think that the products business is much more scalable by -- just by definition.

And that, literally, we have the chance to double or even triple that business over some reasonable time lines.

So in terms of the result, yes, products was a little bit better than the advisory or the consulting business.

But I think it's really too soon to say, "Well, we're really seeing something where we're breaking out." Give us a quarter, give us maybe 2 quarters, and we'll be able to really make that read.

When you look at our solutions within Hay Group, clearly, in the quarter, we had a little bit more in the assessment and succession areas.

That's about 31% of the portfolio.

So that's up a little bit from, say, a year ago.

And our leadership development, which is about 22% of our Hay Group business, was up slightly, too.

Okay.

And just the -- I guess, on that assessment side.

Is there something you did differently?

Or what do you ascribe that to, that it got a little bit better?

I think we really got a pretty cool value proposition, starting with the boardroom and around CEO succession and how we cascade that down through a company strategy.

So we clearly picked up some very nice marquee wins over the last 6 months.

And I think it's just a testimony to the people and the IP that we have.

And hopefully, we'll see more of it.

Okay.

And then the last question.

Just the accelerated hiring when we think about it.

Obviously, it's starting to show a little bit of signs of life on growth for you.

But I guess, the question I'm sure people are going to have is, how much further is the hiring intentions going to go, I guess?

In other words, is there more -- do we need to continue to do this?

No, no.

I think we're -- we've bitten off a lot here.

And you always have to have a pipeline as a professional services firm of developing from within and also going to the outside.

But I think we've brought in a fair number of people.

And I don't think you would see this kind of pace necessarily over the next 3 or 4 months.

Not because of anything we're seeing in the market, but I think we've invested like we said we would do, and now we need to demonstrate to shareholders that we can reap rewards of that.

Our next question comes from the line of Tobey Sommer with SunTrust.

If I could start on the product business.

What's a reasonable time line to double or triple that business?

Oh, geez.

Well, man, I think honestly, it's -- we're really 2 quarters -- we're really 3 to 6 months before giving a really articulate answer to that.

But if you just assume a CAGR that should be above double -- should be kind of low double digit.

I mean, man, 3 to 5 years, why shouldn't that business double?

I think that should absolutely be what we're -- what we have our eye on.

But we're a ways from that.

But it is highly profitable, and it is very scalable, and we'll see.

I think in 3 to 6 months, we'll be able to give a real read on that.

Okay.

I'll be here and ask the question.

And we'll be here to answer.

On the same topic.

Without talking about specific margins, could you give us a sense for on a -- like a relative basis or a range of how much profitable the product business is?

Yes.

That one -- we've been looking at the numbers, Tobey, internally.

I would say that the products business is generally 1.5x, 2x more profitable than what we see on the advisory side.

But as we look at it, there's a lot of shared costs.

A lot of the products are sold through a consulting solution.

So it's -- again, I used this analogy in the past.

It's kind of sometimes trying to pull apart a milkshake.

It gets a little bit challenging.

And from a kind of a medium-term perspective, maybe in a long-term one.

Do you see an opportunity to, speaking of the milkshake and taking that same analogy, to weave more of the IP into what have been kind of long-standing services in the recruiting side to boost the price and/or kind of differentiation in the eyes of customers of those services?

We absolutely do.

And the starting place there -- and that is what we're doing with our RPO and Futurestep business.

That's the place to begin, and that's exactly the plan.

If you think about it, Tobey, you can bake into the recruiting process the assessment protocol that we have.

You can bake into the recruiting process job descriptions, information on pay, compensation and rewards and so on.

So I think the IP will naturally feed into the talent acquisition side of the house very nicely.

And my final question here, and I'll get back in the queue.

Did -- it seems like in the quarter, and I guess, the quarter, which maybe there are some compensation stuff to think about.

But with strong balance sheet and cash flows, the share repurchase was relatively modest.

Are you husbanding your resources to kind of further the acquisition program?

No, we're not, we're not.

No, absolutely not.

We've got a balanced program.

We've got $150 million stock repurchase program.

We've gone through $50 million.

Our plan is to be again systematic about it and carry on, but we're not -- we weren't -- there wasn't some ulterior motive.

Our next question comes from the line of Mark Marcon with R.W. Baird.

I was wondering if you could talk a little bit about the new business trends that you're seeing within Hay and the differences that you're seeing geographically.

What's underlying that, do you think?

I think that when you look at it, there is a slight increase in products versus consulting, but only slight.

I would say that our European business within Hay Group has been very strong and particularly our U.K. business, although not only the U.K. But you look at our business in the U.K and despite the malaise that companies still have, the U.K. was one of our best-performing businesses.

Kind of enterprise-wide across the 3 lines of business in the quarter, it was up pretty substantially.

So we've -- as I had mentioned, we've seen a little bit of an uptick in leadership development.

That's about 22% of the Hay Group business.

It's about 10% of the company.

We have almost 1,000 people doing leadership development.

We've seen some nice wins there, one in particular with a government to train civil servant workers.

At any assessment in succession, we've seen a little bit of an uptick there, Mark.

The only thing I would add to that, Mark, as well, is Asia is starting to show some real signs of strength on new business as well.

Great.

What do you think it would take to get North America going on the new business front with Hay?

That's been a disappointment, for sure.

I think it comes down to the tenets of the strategy.

We have to move towards more -- towards bigger assignments that are more leverageable, which means to do that, we've got to make sure that we're driving a real, integrated go-to-market strategy across as one firm.

And I think we can do and we must do a better job of that.

I think those are really kind of a couple key things.

We have developed talent and we've brought talent in from the outside.

So it can't be an excuse of leverage or talent.

The market is there.

The IP is there.

We have to move the company again more towards solutions and industries, for sure.

But I think we've got to be much more disciplined as an enterprise go-to-market strategy in the United States.

When we take a look at the various segments within Hay within North America, what's doing the best right now?

Is it rewards?

Rewards is actually -- it has.

We've seen some good progress there.

About a year ago, we hired a number of consultants into that business.

But we've also seen the assessment in succession has actually been good in North America.

But I would say that is the -- out of the Hay Group business, that is the one that we will do a better job.

All right.

And then with regards to Futurestep.

Obviously, impressive new business wins.

The new logos, are they brand-new to RPO?

Or are they takeaways from other competitors?

I would say, Mark, I don't know specifics for this quarter, but generally, over time, we're probably about 50-50 right now in terms of the makeup.

At one point in time, it was more skewed towards where we would take engagements away.

But I think now, it's generally more about 50-50.

Great.

And then with regards to the guidance.

The revenue guidance at the midpoint is about consensus.

The EPS is a little bit lower.

Is there -- are there some specific areas where you would expect margins to vary a little bit from the normal seasonal pattern that we typically would see going into this quarter because of investments?

We have salary increases rolling through, and that's several million dollars that are going to hit.

And so it's really a combination of that, plus the carryover of the investments that we've made in talent.

And so those are the 2 -- really, the 2 biggest reasons.

But no specific segment that will -- where we should see, like, maybe because of the investment, a higher level of degradation?

It might be a little bit more on the Hay Group side, Mark.

But again, I think as we talked on our -- I think on our last call, we said that we felt the downward pressure from the investment spending would be 100 basis points.

Maybe it's -- if the pay raise is [100.5], I would say that the pay raise should be spread pretty equally across all lines of business and then the investments are more heavily focused on the Hay Group side.

So there might be a little bit of downward pressure there.

Great.

And then one last one.

Gary, you've got a tremendous long-term history in terms of reading how chief executives are thinking about the economy.

Last quarter, you basically said if we don't see much legislative process -- progress, probably people are going to lose a little bit of confidence.

It doesn't seem to be materializing in your results.

What are you reading from just the execs that you're interacting with?

I think there is still that feeling.

You're coming off a period where many people took some time off.

But I'm still a believer in that, that if there is not real legislative progress other than extending a debt limit by 3 months to give relief down to the people in Texas that need it.

But if there is not real legislative progress, the sense that I get is that it will be a different conversation.

Our next question comes from the line of Marc Riddick with Sidoti.

So a lot of my questions have been answered, but I did want to touch a little bit on the new personnel being added and the talent pipe.

Actually, more of the talent pipeline, I guess.

I wanted to get a sense of the pace of hires and maybe the -- if you have there some commentary as far as the ease of hires if there -- if you're getting a sense that there is -- is it getting a little easier to find these folks, are -- is Korn Ferry being viewed as a more desirable destination and what your thoughts were on that?

Well, of course, I'm going to say yes, but I think it's true.

I think when you look at the people that we're bringing in, from bulge bracket consulting firms, it has completely changed.

So yes, the type of conversation, who we're having the conversation with, it's night and day.

No doubt about that.

That would not have been possible without the investment we made in Hay Group.

And is there any particular -- I'm sorry.

Go ahead.

Yes.

The only thing I would add to that is that we do, as we bring these new folks on, we obviously are trying to accelerate their time to productivity.

And so we have a fairly extensive onboarding program, and I go down and do one of the sessions.

And then I talk to the folks, and I talk to them about why did you join Korn Ferry?

And without exception, they all say that the platform that you guys are building is unlike anything that exists today.

They -- a lot of times, they tell me that their clients are asking them to do it and that their current -- or their old employers, they weren't able to service their clients properly.

So I think what we've built here and what we continue to build really is different, and it provides us with an advantage in terms of sourcing talent.

Okay.

That's great.

And I was wondering, is there -- and this might be a bit early with the more recent group of hires being the case.

But is there a sense that there are certain pools of areas where certain talent that comes on board maybe gets up to speed a little faster than others or maybe that you've found over the last few quarters?

I would say, I mean, generally, the Executive Search partners, the ramp-up time there is quicker.

I mean, right now, as we're bringing folks on board, it's people who have experience in Executive Search.

So the start-up time is a little bit less.

When we're bringing on consultants into the Hay Group, they need to expend some energy in terms of understanding the IP and so on.

So that takes a little bit longer.

Okay.

And then, I guess, last question for me.

I mean, you touched on the CEO confidence question and some of the obviously -- the concerns around government activity.

I wanted to get a sense of are there any specific concerns that you're hearing from either CEO levels or slightly below that -- it's not really the "keep you up at night" question, but more the -- sort of more the near-term concerns that we should be keeping an eye out for that maybe aren't really rearing their head given the numbers that you're putting up right now.

No.

None that I haven't touched upon.

And we have a follow-up from the line of Tobey Sommer with SunTrust.

I was wondering if you could comment about pricing generally across the segments and seeing if you're experiencing any particular movement there.

I don't think we're seeing anything dramatic, Tobey.

I mean, we're looking at price increases along the lines of the Hay Group, especially on the product side.

I think on the advisory side, it's a pretty competitive environment, and the market is going to dictate.

On the Executive Search, we haven't seen any changes along the lines of price increases or decreases there.

It's pretty -- I think pretty consistent and Futurestep is the same thing.

I mean, the single search business there has remained consistent.

And then RPO is kind of like the Hay Group.

It's a very competitive environment.

So -- but there's no -- but no real sea change in any pricing.

And coincident with the beginnings of improvement you saw at Hay, could you talk about progress in your key account program and if the trends there kind of mirrored the overall progress?

The -- objectively, the key account program is about 19-or-so percent.

I may be off a little bit.

The portfolio in the first quarter outpaced the overall portfolio growth by 50%.

I would say that it has been incredibly, incredibly strong in industrial and not so much in consumer.

And I think that actually reflects the struggles that many traditional companies are dealing with in terms of trying to fight or embrace the digitization and the commoditization of their business.

Gary, would you consider it early days for the key account program?

Or are you a mid full stride?

No, it's early days.

It's absolutely early days, for sure.

It's probably second inning, something like that.

Yes.

That's about as far as we've made it so far.

Coming from a guy in Dodger land, I'll take that.

Yes.

Dodgers have been losing lately.

It appears there are no further questions, Mr. Burnison.

Okay.

Listen, thank you for everybody's time, and thank you for the interest in our firm and company, and we'll talk to you in 2 or 3 months.

Thanks.

Bye-bye.

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