UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
|
☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended October 31, 2018
or
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to ___________
Commission File Number 001-14505
KORN/FERRY INTERNATIONAL
(Exact Name of Registrant as Specified in its Charter)
|
Delaware |
|
95-2623879 |
|
(State or Other Jurisdiction of Incorporation or Organization) |
|
(I.R.S. Employer Identification No.) |
1900 Avenue of the Stars, Suite 2600, Los Angeles, California 90067
(Address of principal executive offices) (Zip Code)
(310) 552-1834
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer ☑ |
|
|
Accelerated filer ☐ |
|
|
|
|
|
|
Non-accelerated filer ☐ |
|
|
Smaller reporting company ☐ |
|
|
|
|
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares outstanding of our common stock as of December 3, 2018 was 56,675,056 shares.
Table of Contents
|
Item # |
|
Description |
|
Page |
|
|
|
|
|
|
|
|
|
Part I. Financial Information |
|
|
|
|
|
|
|
|
|
Item 1. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets as of October 31, 2018 (unaudited) and April 30, 2018 |
|
1 |
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows (unaudited) for the six months ended October 31, 2018 and 2017 |
|
5 |
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
25 |
|
|
|
|
|
|
|
Item 3. |
|
|
42 |
|
|
|
|
|
|
|
|
Item 4. |
|
|
43 |
|
|
|
|
|
|
|
|
|
|
Part II. Other Information |
|
|
|
|
|
|
|
|
|
Item 1. |
|
|
44 |
|
|
|
|
|
|
|
|
Item 1A. |
|
|
44 |
|
|
|
|
|
|
|
|
Item 2. |
|
Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
|
44 |
|
|
|
|
|
|
|
Item 6. |
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
46 |
Item 1. Consolidated Financial Statements
KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
|
|
|
October 31, 2018 |
|
|
April 30, 2018 |
|
||
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
(in thousands, except per share data) |
|
|||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
387,679 |
|
|
$ |
520,848 |
|
|
Marketable securities |
|
|
6,686 |
|
|
|
14,293 |
|
|
Receivables due from clients, net of allowance for doubtful accounts of $20,197 and $17,845 at October 31, 2018 and April 30, 2018, respectively |
|
|
433,557 |
|
|
|
384,996 |
|
|
Income taxes and other receivables |
|
|
29,009 |
|
|
|
29,089 |
|
|
Unearned compensation |
|
|
41,804 |
|
|
|
37,333 |
|
|
Prepaid expenses and other assets |
|
|
32,953 |
|
|
|
27,700 |
|
|
Total current assets |
|
|
931,688 |
|
|
|
1,014,259 |
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities, non-current |
|
|
128,913 |
|
|
|
122,792 |
|
|
Property and equipment, net |
|
|
126,242 |
|
|
|
119,901 |
|
|
Cash surrender value of company owned life insurance policies, net of loans |
|
|
123,205 |
|
|
|
120,087 |
|
|
Deferred income taxes |
|
|
37,776 |
|
|
|
25,520 |
|
|
Goodwill |
|
|
579,863 |
|
|
|
584,222 |
|
|
Intangible assets, net |
|
|
89,662 |
|
|
|
203,216 |
|
|
Unearned compensation, non-current |
|
|
94,927 |
|
|
|
78,295 |
|
|
Investments and other assets |
|
|
22,191 |
|
|
|
19,622 |
|
|
Total assets |
|
$ |
2,134,467 |
|
|
$ |
2,287,914 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
34,764 |
|
|
$ |
35,196 |
|
|
Income taxes payable |
|
|
19,453 |
|
|
|
23,034 |
|
|
Compensation and benefits payable |
|
|
231,688 |
|
|
|
304,980 |
|
|
Term loan |
|
|
26,629 |
|
|
|
24,911 |
|
|
Other accrued liabilities |
|
|
153,088 |
|
|
|
170,339 |
|
|
Total current liabilities |
|
|
465,622 |
|
|
|
558,460 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation and other retirement plans |
|
|
234,098 |
|
|
|
227,729 |
|
|
Term loan, non-current |
|
|
197,997 |
|
|
|
211,311 |
|
|
Deferred tax liabilities |
|
|
1,751 |
|
|
|
9,105 |
|
|
Other liabilities |
|
|
58,402 |
|
|
|
61,694 |
|
|
Total liabilities |
|
|
957,870 |
|
|
|
1,068,299 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
Common stock: $0.01 par value, 150,000 shares authorized, 72,202 and 71,631 shares issued at October 31, 2018 and April 30, 2018, respectively, and 56,511 and 56,517 shares outstanding at October 31, 2018 and April 30, 2018, respectively |
|
|
664,486 |
|
|
|
683,942 |
|
|
Retained earnings |
|
|
577,333 |
|
|
|
572,800 |
|
|
Accumulated other comprehensive loss, net |
|
|
(68,581 |
) |
|
|
(40,135 |
) |
|
Total Korn/Ferry International stockholders' equity |
|
|
1,173,238 |
|
|
|
1,216,607 |
|
|
Noncontrolling interest |
|
|
3,359 |
|
|
|
3,008 |
|
|
Total stockholders' equity |
|
|
1,176,597 |
|
|
|
1,219,615 |
|
|
Total liabilities and stockholders' equity |
|
$ |
2,134,467 |
|
|
$ |
2,287,914 |
|
The accompanying notes are an integral part of these consolidated financial statements.
1
KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
|
|
|
Three Months Ended October 31, |
|
|
Six Months Ended October 31, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
|
|
(in thousands, except per share data) |
|
|||||||||||||
|
Fee revenue |
|
$ |
495,205 |
|
|
$ |
443,018 |
|
|
$ |
960,773 |
|
|
$ |
844,272 |
|
|
Reimbursed out-of-pocket engagement expenses |
|
|
11,588 |
|
|
|
12,450 |
|
|
|
24,382 |
|
|
|
26,113 |
|
|
Total revenue |
|
|
506,793 |
|
|
|
455,468 |
|
|
|
985,155 |
|
|
|
870,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
335,835 |
|
|
|
299,819 |
|
|
|
657,740 |
|
|
|
572,575 |
|
|
General and administrative expenses |
|
|
57,738 |
|
|
|
58,603 |
|
|
|
226,462 |
|
|
|
116,864 |
|
|
Reimbursed expenses |
|
|
11,588 |
|
|
|
12,450 |
|
|
|
24,382 |
|
|
|
26,113 |
|
|
Cost of services |
|
|
19,627 |
|
|
|
19,883 |
|
|
|
37,954 |
|
|
|
35,696 |
|
|
Depreciation and amortization |
|
|
11,018 |
|
|
|
12,447 |
|
|
|
22,749 |
|
|
|
24,656 |
|
|
Restructuring (recoveries) charges, net |
|
|
— |
|
|
|
(202 |
) |
|
|
— |
|
|
|
78 |
|
|
Total operating expenses |
|
|
435,806 |
|
|
|
403,000 |
|
|
|
969,287 |
|
|
|
775,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
70,987 |
|
|
|
52,468 |
|
|
|
15,868 |
|
|
|
94,403 |
|
|
Other (loss) income, net |
|
|
(4,600 |
) |
|
|
3,447 |
|
|
|
(109 |
) |
|
|
6,801 |
|
|
Interest expense, net |
|
|
(4,337 |
) |
|
|
(3,624 |
) |
|
|
(8,440 |
) |
|
|
(7,304 |
) |
|
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries |
|
|
62,050 |
|
|
|
52,291 |
|
|
|
7,319 |
|
|
|
93,900 |
|
|
Equity in earnings of unconsolidated subsidiaries |
|
|
100 |
|
|
|
60 |
|
|
|
129 |
|
|
|
90 |
|
|
Income tax provision (benefit) |
|
|
14,833 |
|
|
|
15,619 |
|
|
|
(1,277 |
) |
|
|
27,829 |
|
|
Net income |
|
|
47,317 |
|
|
|
36,732 |
|
|
|
8,725 |
|
|
|
66,161 |
|
|
Net income attributable to noncontrolling interest |
|
|
(1,283 |
) |
|
|
(401 |
) |
|
|
(1,302 |
) |
|
|
(789 |
) |
|
Net income attributable to Korn/Ferry International |
|
$ |
46,034 |
|
|
$ |
36,331 |
|
|
$ |
7,423 |
|
|
$ |
65,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share attributable to Korn/Ferry International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.82 |
|
|
$ |
0.65 |
|
|
$ |
0.13 |
|
|
$ |
1.16 |
|
|
Diluted |
|
$ |
0.81 |
|
|
$ |
0.64 |
|
|
$ |
0.13 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
55,461 |
|
|
|
55,390 |
|
|
|
55,420 |
|
|
|
55,592 |
|
|
Diluted |
|
|
56,239 |
|
|
|
55,978 |
|
|
|
56,306 |
|
|
|
56,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share: |
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
The accompanying notes are an integral part of these consolidated financial statements.
2
KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
|
|
|
Three Months Ended October 31, |
|
|
Six Months Ended October 31, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
|
|
(in thousands) |
|
|||||||||||||
|
Net income |
|
$ |
47,317 |
|
|
$ |
36,732 |
|
|
$ |
8,725 |
|
|
$ |
66,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(12,778 |
) |
|
|
(4,255 |
) |
|
|
(27,334 |
) |
|
|
11,934 |
|
|
Deferred compensation and pension plan adjustments, net of tax |
|
|
273 |
|
|
|
352 |
|
|
|
546 |
|
|
|
704 |
|
|
Net unrealized gain on interest rate swap, net of tax |
|
|
145 |
|
|
|
456 |
|
|
|
278 |
|
|
|
393 |
|
|
Comprehensive income (loss) |
|
|
34,957 |
|
|
|
33,285 |
|
|
|
(17,785 |
) |
|
|
79,192 |
|
|
Less: comprehensive income attributable to noncontrolling interest |
|
|
(1,016 |
) |
|
|
(165 |
) |
|
|
(1,041 |
) |
|
|
(658 |
) |
|
Comprehensive income (loss) attributable to Korn/Ferry International |
|
$ |
33,941 |
|
|
$ |
33,120 |
|
|
$ |
(18,826 |
) |
|
$ |
78,534 |
|
The accompanying notes are an integral part of these consolidated financial statements.
3
KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
Total |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
Korn/Ferry |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive |
|
|
International |
|
|
|
|
|
|
Total |
|
|||
|
|
Common Stock |
|
|
Retained |
|
|
(Loss) Income, |
|
|
Stockholders' |
|
|
Noncontrolling |
|
|
Stockholder's |
|
||||||||||
|
|
Shares |
|
|
Amount |
|
|
Earnings |
|
|
Net |
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
|||||||
|
|
(in thousands) |
|
|||||||||||||||||||||||||
|
Balance as of April 30, 2018 |
|
56,517 |
|
|
$ |
683,942 |
|
|
$ |
572,800 |
|
|
$ |
(40,135 |
) |
|
$ |
1,216,607 |
|
|
$ |
3,008 |
|
|
$ |
1,219,615 |
|
|
Net loss |
|
— |
|
|
|
— |
|
|
|
(38,611 |
) |
|
|
— |
|
|
|
(38,611 |
) |
|
|
19 |
|
|
|
(38,592 |
) |
|
Other Comprehensive (loss) income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14,156 |
) |
|
|
(14,156 |
) |
|
|
6 |
|
|
|
(14,150 |
) |
|
Effect of adopting new accounting standards |
|
— |
|
|
|
— |
|
|
|
8,853 |
|
|
|
(2,197 |
) |
|
|
6,656 |
|
|
|
— |
|
|
|
6,656 |
|
|
Dividends paid to shareholders |
|
— |
|
|
|
— |
|
|
|
(6,027 |
) |
|
|
— |
|
|
|
(6,027 |
) |
|
|
— |
|
|
|
(6,027 |
) |
|
Purchase of stock |
|
(200 |
) |
|
|
(13,054 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,054 |
) |
|
|
— |
|
|
|
(13,054 |
) |
|
Issuance of stock |
|
621 |
|
|
|
4,803 |
|
|
|
— |
|
|
|
— |
|
|
|
4,803 |
|
|
|
— |
|
|
|
4,803 |
|
|
Stock-based compensation |
|
— |
|
|
|
5,369 |
|
|
|
— |
|
|
|
— |
|
|
|
5,369 |
|
|
|
— |
|
|
|
5,369 |
|
|
Balance as of July 31, 2018 |
|
56,938 |
|
|
|
681,060 |
|
|
|
537,015 |
|
|
|
(56,488 |
) |
|
|
1,161,587 |
|
|
|
3,033 |
|
|
|
1,164,620 |
|
|
Net income |
|
— |
|
|
|
— |
|
|
|
46,034 |
|
|
|
— |
|
|
|
46,034 |
|
|
|
1,283 |
|
|
|
47,317 |
|
|
Other Comprehensive (loss) income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,093 |
) |
|
|
(12,093 |
) |
|
|
(267 |
) |
|
|
(12,360 |
) |
|
Dividends paid to shareholders |
|
— |
|
|
|
— |
|
|
|
(5,716 |
) |
|
|
— |
|
|
|
(5,716 |
) |
|
|
— |
|
|
|
(5,716 |
) |
|
Dividends paid to noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(690 |
) |
|
|
(690 |
) |
|
Purchase of stock |
|
(459 |
) |
|
|
(22,875 |
) |
|
|
— |
|
|
|
— |
|
|
|
(22,875 |
) |
|
|
— |
|
|
|
(22,875 |
) |
|
Issuance of stock |
|
32 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation |
|
— |
|
|
|
6,301 |
|
|
|
— |
|
|
|
— |
|
|
|
6,301 |
|
|
|
— |
|
|
|
6,301 |
|
|
Balance as of October 31, 2018 |
|
56,511 |
|
|
$ |
664,486 |
|
|
$ |
577,333 |
|
|
$ |
(68,581 |
) |
|
$ |
1,173,238 |
|
|
$ |
3,359 |
|
|
$ |
1,176,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
Total |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
Korn/Ferry |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive |
|
|
International |
|
|
|
|
|
|
Total |
|
|||
|
|
Common Stock |
|
|
Retained |
|
|
(Loss) Income, |
|
|
Stockholders' |
|
|
Noncontrolling |
|
|
Stockholder's |
|
||||||||||
|
|
Shares |
|
|
Amount |
|
|
Earnings |
|
|
Net |
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
|||||||
|
|
(in thousands) |
|
|||||||||||||||||||||||||
|
Balance as of April 30, 2017 |
|
56,938 |
|
|
$ |
692,527 |
|
|
$ |
461,976 |
|
|
$ |
(71,064 |
) |
|
$ |
1,083,439 |
|
|
$ |
3,609 |
|
|
$ |
1,087,048 |
|
|
Net income |
|
— |
|
|
|
— |
|
|
|
29,041 |
|
|
|
— |
|
|
|
29,041 |
|
|
|
388 |
|
|
|
29,429 |
|
|
Other Comprehensive income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
16,373 |
|
|
|
16,373 |
|
|
|
105 |
|
|
|
16,478 |
|
|
Dividends paid to shareholders |
|
— |
|
|
|
— |
|
|
|
(5,823 |
) |
|
|
— |
|
|
|
(5,823 |
) |
|
|
— |
|
|
|
(5,823 |
) |
|
Purchase of stock |
|
(217 |
) |
|
|
(7,372 |
) |
|
|
— |
|
|
|
— |
|
|
|
(7,372 |
) |
|
|
— |
|
|
|
(7,372 |
) |
|
Issuance of stock |
|
525 |
|
|
|
4,586 |
|
|
|
— |
|
|
|
— |
|
|
|
4,586 |
|
|
|
— |
|
|
|
4,586 |
|
|
Stock-based compensation |
|
— |
|
|
|
4,405 |
|
|
|
— |
|
|
|
— |
|
|
|
4,405 |
|
|
|
— |
|
|
|
4,405 |
|
|
Balance as of July 31, 2017 |
|
57,246 |
|
|
|
694,146 |
|
|
|
485,194 |
|
|
|
(54,691 |
) |
|
|
1,124,649 |
|
|
|
4,102 |
|
|
|
1,128,751 |
|
|
Net income |
|
— |
|
|
|
— |
|
|
|
36,331 |
|
|
|
— |
|
|
|
36,331 |
|
|
|
401 |
|
|
|
36,732 |
|
|
Other Comprehensive loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,211 |
) |
|
|
(3,211 |
) |
|
|
(236 |
) |
|
|
(3,447 |
) |
|
Dividends paid to shareholders |
|
— |
|
|
|
— |
|
|
|
(5,714 |
) |
|
|
— |
|
|
|
(5,714 |
) |
|
|
— |
|
|
|
(5,714 |
) |
|
Dividends paid to noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,558 |
) |
|
|
(1,558 |
) |
|
Purchase of stock |
|
(777 |
) |
|
|
(25,350 |
) |
|
|
— |
|
|
|
— |
|
|
|
(25,350 |
) |
|
|
— |
|
|
|
(25,350 |
) |
|
Issuance of stock |
|
42 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation |
|
— |
|
|
|
5,309 |
|
|
|
— |
|
|
|
— |
|
|
|
5,309 |
|
|
|
— |
|
|
|
5,309 |
|
|
Balance as of October 31, 2017 |
|
56,511 |
|
|
$ |
674,105 |
|
|
$ |
515,811 |
|
|
$ |
(57,902 |
) |
|
$ |
1,132,014 |
|
|
$ |
2,709 |
|
|
$ |
1,134,723 |
|
The accompanying notes are an integral part of these consolidated financial statements.
4
KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
|
|
Six Months Ended October 31, |
|
|||||
|
|
|
2018 |
|
|
2017 |
|
||
|
|
|
(in thousands) |
|
|||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8,725 |
|
|
$ |
66,161 |
|
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
22,749 |
|
|
|
24,656 |
|
|
Stock-based compensation expense |
|
|
12,369 |
|
|
|
10,283 |
|
|
Tradename write-offs |
|
|
106,555 |
|
|
|
— |
|
|
Provision for doubtful accounts |
|
|
7,471 |
|
|
|
6,960 |
|
|
Gain on cash surrender value of life insurance policies |
|
|
(3,003 |
) |
|
|
(4,227 |
) |
|
Loss (gain) on marketable securities |
|
|
836 |
|
|
|
(6,797 |
) |
|
Deferred income taxes |
|
|
(19,838 |
) |
|
|
7,802 |
|
|
Change in other assets and liabilities: |
|
|
|
|
|
|
|
|
|
Deferred compensation |
|
|
(1,646 |
) |
|
|
12,560 |
|
|
Receivables due from clients |
|
|
(52,536 |
) |
|
|
(59,020 |
) |
|
Income taxes and other receivables |
|
|
345 |
|
|
|
(7,207 |
) |
|
Prepaid expenses and other assets |
|
|
(5,326 |
) |
|
|
(2,129 |
) |
|
Unearned compensation |
|
|
(21,103 |
) |
|
|
(45,589 |
) |
|
Investment in unconsolidated subsidiaries |
|
|
(129 |
) |
|
|
(90 |
) |
|
Income taxes payable |
|
|
(5,898 |
) |
|
|
9,459 |
|
|
Accounts payable and accrued liabilities |
|
|
(76,544 |
) |
|
|
(66,089 |
) |
|
Other |
|
|
(5,216 |
) |
|
|
(2,893 |
) |
|
Net cash used in operating activities |
|
|
(32,189 |
) |
|
|
(56,160 |
) |
|
Cash flows from investing activities: |
|
|||||||