Gary D. Burnison - Chief Executive Officer Robert P. Rozek - Chief Financial Officer and Executive Vice President Gregg Kvochak - Investor Relations

Kevin D. McVeigh - Macquarie Research Frank Atkins - SunTrust Robinson Humphrey, Inc., Research Division Timothy McHugh - William Blair & Company L.L.C., Research Division Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Ladies and gentlemen, thank you very much for standing by and welcome to the Korn/Ferry International Fourth Quarter Fiscal Year 2013 Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded for replay purposes. [Operator Instructions] Before I turn the call over to your host, Mr. Gary Burnison, let me first read the 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, in the company's annual report for fiscal 2012 and in the other periodic reports filed by the company with the SEC. Also, some of the comments today may reflect non-GAAP financial measures, such as 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 release relating to this call, which is posted on the company's website at www.kornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. Burnison. Gary D. Burnison: Well, thank you. Thank you, everybody, for joining us. I think this is my 45th earnings call, something like that, with this organization. And I'll tell you, that I've never been more proud about Korn/Ferry and what we're doing, particularly when I consider that today, that 1 out of every 5 colleagues is new to Korn/Ferry in the last 8 months. I mean, that's because of investment. I think that, that's absolutely a testament to our transformation and our ongoing efforts to promote and attract the industry's top talent, as well as key acquisitions we've made, such as Global Novations and PDI Ninth House. So again, thank you for joining us. I'm pleased with our quarterly results, but as I said, I'm as importantly, more importantly, our strategic progress in this most recent quarter. For example, accelerating the integration of our recent acquisitions, our broader talent management offerings that now represent 40% of Korn/Ferry's business, which is an all-time high. Our fee revenue in the quarter was $228 million, that's up 2% constant currency on an organic basis. It's obviously up higher with the acquisitions that we made. Our EBITDA margin was a little over 12% and adjusted EPS was $0.32. Our balance sheet is absolutely pristine and the strategic progress that we're making is truly remarkable. We're differentiating this brand. We're diversifying our business by continuing to invest in solutions that give us reasons to talk to clients throughout the whole year, to broaden the conversation with clients, to make the brand more elastic and really, the opportunity to participate in larger, strategically aligned addressable markets. That really is our goal. To really be the bridge between a CEO's vision, their business strategy and their talent strategy. That's Korn/Ferry. Make the brand synonymous with talent management and be the anchor between business and talent strategy. So as we closed out this year -- the word transformation, I think, is sometimes overused, but I do believe that here that we've gone from a monoline business to a multi-solutions organization and I think that as I reflect on this last year, we have reached several key milestones, a couple of which I've mentioned already. But you think about the organization and the fact that 40% of the business now comes from outside our flagship heritage business, I can recall when I joined this company; in this quarter we almost did as much revenue, not quite, but almost, that we did an entire year about 12 years ago on a run-rate basis. Futurestep is continuing to accelerate the brand; it's about 15% of the company today. And more importantly, well over half their business is in the RPO area, major assignments, producing more regular multi-year revenue streams. And we've amassed an array of intellectual property of unique assets, great people, at the same time, while building an infrastructure to really scale this organization. So as I look forward now, we're going to continue to focus on a few key pillars of our strategy. Number one, we're going to drive an integrated solutions-based go-to-market strategy, leveraging our R&D and intellectual property, continuing to move this firm to a knowledge-based organization. We're going to secondly, not only elevate the brand like we've been doing, but continue to make it more elastic. And I'm certainly very, very proud of our search business and the marquee assignments we've gotten there, the relationships that we have there are incredibly important. They cascade down throughout an organization and really create multiple opportunities along the broad talent management spectrum. We're going to continue to make this Korn/Ferry the premier career destination, developing our own people, using our own intellectual property. Today, we have about 700 business developers in the organization. We are relentless right now around developing those folks as well as the broader organization, giving them hands-on development programs designed with our own IP, taught by our own colleagues, really on -- really anchored around how one broadens the conversation with our clients and finally, as evidenced by our recent actions, we're going to pursue a long-term growth strategy by taking a very pragmatic approach to M&A, that accelerates our reach and further extends our footprint and offerings and most importantly, differentiates this great organization that we have. When I look around the world today, it's -- CEOs, it doesn't really make any difference what industry, are really in a fight for relevancy and growth. And regardless of the path they choose, what's clear to me in my conversations with clients is it's really the organization's workforce, that, that's what matters most, particularly in this knowledge-based economy. The growth drivers are not as transparent. You don't have conspicuous consumption in the last, like we did for a couple of decades. But when you really look at pulling those growth levers, a workforce's learning agility, their cultural dexterity, the ability to drive growth across borders, I really believe that plays right in to the organization that we're building here. And today, when you look at global organizations, they are really buying talent-oriented services, kind of piecemeal, by the fact that there's no global category leader. And I strongly believe that Korn/Ferry is absolutely on its way to being that leader in a market that we're now defining. So with that, I'll turn it over to -- I've got Bob Rozek here and Gregg Kvochak. And I'll turn it over to you, Bob. Robert P. Rozek: Very good. Thanks, Gary, and good afternoon, everyone. As I sit here today, I've completed my first full year at Korn/Ferry and I'm very pleased with everything we're able to accomplish over the course of the past year and I would say as pleased as I am, I'm even more proud to be part of the organization. And as I look around, this company, the energy and drive that folks bring to work every day and how they translate that into accomplishments is just simply amazing. In fiscal '13, Korn/Ferry achieved, as Gary indicated, many major milestones, has positioned itself as a clear leader in the evolving talent management industry. Despite the challenging labor market that we find ourselves in, our consolidated fee revenue reached record highs for both the fourth quarter and the full year and we accomplished that by strategically investing in complementary acquisitions throughout fiscal '13 and then also by immediately beginning the integration of these investments into our L&TC line of business, and then further into our Executive Search and Futurestep lines of business. And with today's deep line of industry-leading product and services, my view is, I believe, we have never been better positioned to address the broader talent management needs of organizations across the world. As Gary said, we finished fiscal '13 with a strong fourth quarter, posting record revenues of $228 million. In the fourth quarter, on a constant currency basis, our fee revenue grew $27.5 million or 13.6% sequentially and was up $32.7 million or 16.5% compared to Q4 fiscal '12. Our recent acquisitions of Global Novations and PDI Ninth House contributed $28.8 million of fee revenue in the fourth quarter on a combined basis. We also reported record annual consolidated fee revenue of $812.8 million and as Gary mentioned, nearly 40% of this was being generated from services, that fall outside of Executive Recruitment. On a constant currency basis, our consolidated fiscal '13 fee revenue grew over $37 million or nearly 5%. Our recent acquisitions contributed about $45.5 million for all of fiscal '13 in terms of additional revenues and our growth in fiscal '13 continued to outpace many of our major industry competitors. New business awards were seasonally strong in the fourth quarter. We saw a little bit of weakening in late March and that extended into April. In general, however, measured over a full quarter, our new business trends improved modestly in all of our business segments, but are still uneven month to month. Our adjusted profitability also improved in the fourth quarter. Excluding restructuring, transaction and integration and separation charges in the current and prior periods, our adjusted EBITDA improved both sequentially and year-over-year, growing $2.7 million or 10.6%, sequentially, and $3.5 million or 14% year-over-year, reaching $27.8 million in the fourth quarter. Our adjusted EBITDA margin was 12.2% in the fourth quarter, compared to 12.5% in the third quarter and 12.2% in the fourth quarter of fiscal '12. While the margin benefited from cost-saving efforts during the year, as well as our additional fee revenues, the adjusted EBITDA and adjusted EBITDA margin were negatively impacted by the change in the mix of our business, as well as the incremental infrastructure and support services relating to the newly acquired businesses. On a GAAP basis, including all transaction, integration and restructuring charges in the prior period and $3.5 million of additional real estate consolidation and integration costs in the current quarter, our fiscal fourth quarter -- fiscal '13 fourth quarter operating earnings were $15.4 million with a margin of 6.8% compared to $8.7 million and a 4.3% margin in the third quarter and $15.4 million and a 7.8% margin in the fourth quarter of fiscal '12. One item that I would like to really highlight that we accomplished during the fourth quarter was the PDI Korn/Ferry, sort of, office co-location program that we carried out. We co-located offices in 12 different cities and this really entailed -- we'd combined over 1,200 of our employees, nearly 1/3 of our workforce, into common workspace. A truly significant accomplishment for us during the fourth quarter. Also during Q4, our financial positioning continued to strengthen, as our cash and marketable securities grew $61 million to $366 million in the fourth quarter, driven primarily by strong year end collections. Excluding cash and marketable securities reserved for deferred comp arrangements and for our accrued bonuses, the current investable cash balance is approximately $157 million; that's up about $29 million versus the third quarter. After considering our working capital needs, our net investable cash is about $57 million and about 25% of that amount is sitting here in the U.S. Finally, excluding all restructuring, acquisition and integration charges in the current and prior quarters, our fourth quarter adjusted diluted earnings per share were $0.32, an improvement of $0.01 sequentially and $0.04 year-over-year. On the same basis, adjusted earnings per share for all of fiscal '13 was $1.10, and that's down about $0.09 year-over-year. On a GAAP basis, including the impact to net income of all restructuring transaction, integration and separation charges, fiscal '13 diluted earnings per share were $0.70 compared to $1.15 in fiscal '12. Now I'm going to turn it over to Gregg, who will review our operating segments in a little bit more detail.

Okay. Thanks, Bob. I'm going to start with our Executive Recruitment segment. Worldwide demand for our Executive Recruitment services were significantly strong in the fourth quarter. Consolidated Executive Recruitment fee revenue in the fourth quarter was $136.8 million, up $6.3 million or 4.8% sequentially and essentially flat year-over-year. Excluding the effect of foreign currency exchange rates, fourth quarter consolidated Executive Recruitment fee revenue was up 5.6% sequentially and up 1.2% year-over-year. Regionally, also at constant currency, North America was up 9%, Asia-Pacific was up 6.2%, South America was up 6%, while Europe was down 1.8% on a sequential basis. Year-over-year, also on a constant currency basis, North America was up 1.9%, Europe was up 1.3%, Asia-Pacific was up 50 basis points and South America was down 3.5%. Growth in our Executive Recruitment specialty practices was primarily positive in the fourth quarter. On a sequential basis at actual rates, financial services grew 8%, life sciences and health care grew 15%, technology was up 7%, consumer goods was flat, while the industrial practice was down 5%. Financial services accounted for approximately 16.7% of all Executive Recruitment fee revenue in the fourth quarter, up approximately 50 basis points from the third quarter. Year-over-year, also at actual rates, all of our specialty practices, except industrial, were up. Consumer goods and technology were both up 7%, life sciences and healthcare was up 6% and financial services was up 1%. Worldwide, the industrial practice was down 13% year-over-year in the fourth quarter. The total number of the dedicated Executive Recruiting consultants worldwide at the end of the fourth quarter was 399, down 1, year-over-year, and up 9, sequentially. Annualized fee revenue production per consultant in the fourth quarter was approximately $1.39 million compared to approximately $1.32 million in the third quarter of fiscal '13, and $1.38 million in the fourth quarter of fiscal '12. The number of new search assignments opened worldwide in the fourth quarter was 1,231, which was up 8% sequentially and up 4.8% year-over-year. Excluding all restructuring and separation charges, consolidated Executive Search adjusted EBITDA improved in the fourth quarter measured both sequentially and year-over-year. Consolidated Executive Search adjusted EBITDA was $26.8 million in the fourth quarter, up $1.9 million or 7.6% sequentially. On the same basis, when compared to the fourth quarter of fiscal '12, consolidated Executive Search adjusted EBITDA in the fourth quarter of fiscal '13 was up $1.9 million or 7.5%, due primarily to the cost reduction initiatives executed in the first half of fiscal '13. The worldwide consolidated Executive Search adjusted EBITDA margin was 19.6% in the fourth quarter of fiscal '13 compared to 19.1% in the third quarter and 18.2% in the fourth quarter of fiscal '12. Now turning to our Leadership & Talent Consulting segment. In the fourth quarter of fiscal '13, worldwide fee revenue for L&TC was $60.1 million, up $28.4 million or 90% year-over-year and excluding fee revenue from acquisitions, essentially flat. Sequentially, excluding the effect of PDI's Ninth House acquisition, L&TC's fourth quarter fee revenue was up $2.3 million or 6.5%. Regionally, North America accounted for approximately 71% of the total L&TC worldwide revenue in the fourth quarter compared to 69% in the third quarter. For all of fiscal '13, L&TC's fee revenue was $168.1 million, up nearly 48% on a constant currency basis. Global Novations and PDI Ninth House combined generated $45.6 million of fee revenue in fiscal '13. At the end of the fourth quarter, there were 133 dedicated L&TC consultants including 81 combined from Global Novations and PDI Ninth House. Consultant utilization remained flat, while sequentially in year-over-year at 67%. Excluding restructuring charges, L&TC's fiscal '13 fourth quarter adjusted EBITDA was $6.3 million, up $2.8 million or 82% sequentially and up $600,000 or 10.7% year-over-year. Quarter sequential earnings growth was driven by both stronger revenue and the realization of cost savings from our ongoing business integration initiatives. Adjusted EBITDA margin in the fourth quarter was 10.4% compared to 8.4% in the third quarter of fiscal '13 and 17.9% in the fourth quarter of fiscal '12. Finally, turning to Futurestep, which generated $31 million of fee revenue in the fourth quarter. Measured on a constant currency basis, Futurestep's fourth quarter fee revenue was up $2.1 million or 7.2% year-over-year and up $850,000 or 2.7% sequentially. Geographically, year-over-year, on a constant currency basis, North America was up 13.6%, Europe was essentially flat, while the Asia-Pacific region was down 2%. Sequentially, North America was up 7.8%, Europe was up 5.1% and Asia-Pacific was down 9.3%. Futurestep's profitability continued to improve in the fourth quarter and was up both year-over-year and sequentially. Excluding restructuring and separation charges, Futurestep's adjusted EBITDA margin was 14.7% in the fourth quarter compared to 8.7% in the fourth quarter of fiscal '12 and 13.3% in the third quarter of fiscal '13. For all of fiscal '13, Futurestep's fee revenue grew 9.5% on a constant currency basis, with a $5.1 million or 48% improvement in adjusted EBITDA and an adjusted EBITDA margin improvement of approximately 360 basis points. Now I'll turn the call back over to Bob, to discuss our outlook for the first quarter of fiscal '14. Robert P. Rozek: Thanks, Gregg. Overall, new orders were strong during the fourth quarter and really benefited from our usual seasonally strong year-end uptick activity. We had a particularly good month in April. Monthly trends, however, remained a little bit choppy and still somewhat unpredictable. February, for example, our new awards were the highest of the fiscal year. It slipped slightly in both March and April and then rebounded partially in May and what we're seeing so far is somewhat consistent with May and the month of June. Looking ahead the first quarter of fiscal '14, we expect new orders towards the end of the quarter to be negatively impacted by the beginning of the summer vacation season. Assuming worldwide economic conditions, financial markets and foreign exchange rates remain steady, our fiscal '14 first quarter fee revenue is likely to range from $215 million to $227 million. Additionally, in connection with our recent acquisitions, we're continuing to evaluate and rationalize the firms' consolidated infrastructure costs. In the first quarter, we expect to eliminate approximately 60 positions across all of our business segments. And in addition, we're continuing with our office co-location program, with offices in 3 additional cities being combined in the first quarter. These actions are expected to result in charges of about $4 million to $5 million and are also expected to result in annual savings ranging from about $4.7 million to $5.5 million. In addition, for the rest of fiscal '14, in accordance with our annual operating plan, we're going to be making investments to drive common technology systems across all of our business segments and once these systems are fully implemented and operational, we expect to drive further synergies from the recently acquired businesses. Excluding the above restructuring charges, our adjusted diluted earnings per share in the first quarter are likely to range from $0.26 to $0.32, with diluted earnings per share, as measured by GAAP, likely to be in the range of $0.19 to $0.27. [Audio Gap]

[Operator Instructions] First, we'll hear from the line of Kevin McVeigh with Macquarie. Kevin D. McVeigh - Macquarie Research: And obviously, with the still pretty tough environment, I wanted to just get a sense, obviously, it was a nice sequential uptick in new engagements. We hadn't seen that in terms of strength. It seems pretty encouraging. Just thoughts on the environment overall and just then if you could get specific by region, that would be helpful. Gary D. Burnison: Well, we are -- we were encouraged this as well. When we looked at the flagship business, we saw a very good sequential growth in almost every region except for Europe. That continues to be -- obviously, continues to be a challenge, but we were particularly heartened by what we saw in North America, in the quarter. And when we just think about the organization overall, certainly financial services, as you well know, has been deeply, deeply challenged over the last several years. But on the other hand, for us, life sciences and healthcare where, I believe, we've just got an incredible opportunity across all the businesses, showed real strength in the quarter. And also, we saw strength in financial services in North America in the quarter. Kevin D. McVeigh - Macquarie Research: Gary, has this been the first sequential uptick in financial services since the downturn? Gary D. Burnison: I can't say that off the top of my head. I wouldn't want to call that, but it was certainly encouraging. One quarter doesn't make a trend, but it was encouraging. Kevin D. McVeigh - Macquarie Research: Sure. And then, just if I could real quick, I mean, real nice job on the margins. And that was obviously with some investment in Leadership & Talent Consulting. And then, it looks like the corporate line was high, too. As this normalizes, can we expect just continued margin expansion? Gary D. Burnison: Well, we hope so. We've made a number of strategic investments and acquisitions over the past 2 or 3 years. And what we really haven't done is fully integrated the support areas. The front office, we've gone all out. But in terms of the support areas, there's opportunity there. And that's what Bob is driving and we're going to continue to work at that, putting in process and systems to be able to really drive scale in the company and hopefully efficiency as well. Robert P. Rozek: Yes and one of the things, Kevin during the quarter -- this is Bob, that we -- Gary and I talked about doing was putting that integration on an accelerated path. And so that's the sort of the playing field that we're going after right now. Kevin D. McVeigh - Macquarie Research: Got it. And then -- and my last question, obviously there's been some rumors out there, one of your competitors potentially being acquired. Does that change the competitive landscape in terms of how you folks think about the positioning of the organization? And just any thoughts around that would be helpful? Gary D. Burnison: No, not at all. We want to go in front of clients and broaden the conversation and really help accelerate their growth, and that's all we care about is our clients and our employees.

Next, we'll hear from the line of Tobey Sommer with SunTrust. Frank Atkins - SunTrust Robinson Humphrey, Inc., Research Division: This is Frank in for Tobey. I wanted to ask about Global Novations. Can you give us any color there in terms of monthly revenue trends and kind of update how the integration and everything is going there? Gary D. Burnison: Well, we don't -- no, we're not going to give out any monthly trends, but I'll tell you that overall, this last fiscal year, we made 2 strategic investments, 2 acquisitions overall and we feel stronger today about what those are going to do for this brand. And Global Novations, when you really look at that organization, delivers half their business as kind of broad-based leadership development, the other half is in the same area but geared towards cultural diversity, cultural dexterity. And when you look out over this next decade, that's one of the growth levers that CEOs are going to continue to pull, trying to drive borderless consumption, driving growth across borders and when we believe that we've got an offering that can accelerate a client's ability to have a workforce to match that opportunity. Frank Atkins - SunTrust Robinson Humphrey, Inc., Research Division: Okay. Great. And as you look out or where the portfolio sits right now, are you pretty happy and pretty focused on integration? Or are you looking at additional opportunities and what do you see out there right now? Gary D. Burnison: Well, we continue to look and I think we've got a very systematic approach for sure. But over the last few months, really since the last call for sure, I think that the leadership team has wholeheartedly -- I mean, just incredible job at really driving go-to-market strategy that's anchored kind of from many to one from these different investments we've made. Bob has done an incredible job in terms of driving the integration. As he said, I mean, just think about it, 1/3 of our workforce was actually relocated over the past 2.5 months and at the same time, we were still able to drive organic constant currency growth. So we've got to continue to push that, continue to push broadening the conversation and developing our people. Frank Atkins - SunTrust Robinson Humphrey, Inc., Research Division: Okay. Great. And finally, could you talk a little bit about turnover in the quarter and what the hiring environment is out there right now and what do you see? Robert P. Rozek: I think -- this is Bob, Frank. I think as we look at our turnover, and that's one of the metrics as we communicate with our board at each quarter and year end, we had very low turnover in our, what we call, our senior client partner level and ranks. In fact, it was probably less than 5%. So we're very pleased with our ability to attract individuals to the organization, but also to retain those folks. And we really think the strategy and the platform that we're building goes a long way to help us do that.

Next, we'll hear from the line of Tim McHugh with William Blair. Timothy McHugh - William Blair & Company L.L.C., Research Division: First, I want to ask about organic growth in the leadership business. How are you feeling about that lately? And, I guess, what can you do to reaccelerate it? It's decelerated a fair amount and I understand you're trying to accomplish a lot, but is that market-driven? Is it distractions with integration? I mean, can you give us some more color around that? Gary D. Burnison: Well, we are disappointed by that. And we've certainly -- we look at this as a multi-hundred-million dollar opportunity. We've said that consistently. This was a assessment practice that was $7 million, not that many years ago. And we've really fueled it through investment through acquisition. And over the past year, we made 2 very significant, for us, investments into that business. And certainly, bringing those businesses in, integrating them, relocating everybody. That's certainly a lot to bite off. But as we -- so today, we're sitting on a $240 million leadership business. We look at that as a multi-hundred-million dollar opportunity. So there's a number of initiatives we've put in place to really try to fuel that growth ranging from a go-to-market strategy that's integrated into the firm, to compensation, to development, to training. We just had a big meeting within our LTC business in the Americas for people that have frontline responsibility. So we're doing a lot of those things and I don't think it's the market. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. What is a reasonable target for you guys to get back to with that business over a medium term, a year or 2, here with this? Is there a level you have in mind that you're willing to share? Gary D. Burnison: Well, we really don't guide out that far. I would say that when you look at that business, and it's gone from $7 million to $240 million, and a lot of that's been driven through acquisitions and investments, that, I -- my expectation is, is that, that business better have at least a 10% CAGR on it, for sure. And that's what we're shooting for. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. And then, Bob, just -- as we think about the cost structure for, I guess, more so the G&A, I'm thinking, given all the things you're doing with the real estate and then the additional changes you're doing in Q1, if we looked at Q4, I guess, how much cost improvement is there relative to that run rate of G&A expenses? Robert P. Rozek: Yes. I would say, if you step back and look at coming out of the fourth quarter, we'll get some benefit from the real estate saves going into Q1. And then the actions that we're taking in Q1 will obviously translate Q2 and beyond. I would say, looking at your -- kind of your model, if you will, if you hold relatively consistent, we'll probably get $0.5 million of real estate saves in the first quarter. But we think by the time we put the systems into place and drive the integration the way that, at least we've got a plan at this point in time, we should be able to get 1 point to 1.5 points of overall margin improvement in Korn/Ferry. Timothy McHugh - William Blair & Company L.L.C., Research Division: That's by the end of the year? Robert P. Rozek: That's by the end of the year. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay, so relative to the numbers for this quarter? Robert P. Rozek: That's right. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. I guess -- and then just one other one for you, Bob. Tax rate, I mean it's bounced around a fair amount this year and it ways does, but is the annual number that you ended up with a fair representation of what we could assume going forward or... Robert P. Rozek: Yes, it is. I think, unfortunately, the rate does bounce throughout the course of the year and a lot of that just has to simply do with the way that the accounting rules work and the way they require us to book the provision on a quarterly interim basis. And generally, if you have organizations within your company, which virtually every business does that lose money, the way you book the benefit of that, you don't take it throughout the early portions of the year, you'll only take it as the year rolls on and you're realizing the problems from the other pieces of the business. And so, our rate tends to spike up Q1, Q2 and then that reverses Q3 and Q4. And I think if you go back and look at each of the quarters this year, you'll see that exact pattern. But from an overall kind of an annual run rate perspective in the 36% range, it's probably about where we should be.

Next, we will hear from the line of Ty Govvatis [ph] with TG Research [ph] .

Two questions. The bonus accrual for the quarter. And could you take us deeper into what some of the technology investments will be and over what period of time they'll be made? Gary D. Burnison: Ty [ph] , the bonus accrual was about $32.1 million on the quarter. Robert P. Rozek: And Ty [ph], this is Bob. I'll take you through the technology investments and it gets a little bit complicated because what we're doing, each of the pieces are highly correlated with each other. But essentially, we're going to migrate all the acquisitions on to our SAP platform. We're going to put into place a workforce management tool that will enable us to schedule our workforce, track their hours and so on, and drive our revenue recognition off that. And then the third interrelated component is putting in a consolidated human capital management system. And all those have to come together virtually simultaneously to make it happen. And that's the work that we're planning on right now, and that will take place over the course of FY '14. And the good news is, as we look at the pieces of technology that we're selecting, we're an SAP shop and SAP has pretty good modules in each of these areas. And so when we're all -- it's all said and done, we'll have a completely integrated package, if you will.

In other words, from front to back, or if it's normal, it sounds like it's going to be front to back office, everything. Robert P. Rozek: It will. That's right, it will.

Good luck. I'm almost sorry I asked. I hope nothing goes wrong on that one. Robert P. Rozek: Yes, we're -- we've got plans in place and we're managing this one very, very tightly.

And our final question today will come from Mark Marcon with RW Baird. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: I was wondering, with regards to the LTC business, Gary, you mentioned that the hope is to get the organic growth rate up to 10%. Relative to what you've seen thus far, what would need to occur in order to get there? Gary D. Burnison: Well, I think that it's -- it goes along a few different dimensions. One is we have to continue to be at the top of the house, be at 38,000 feet, selling high-impact, multimillion dollar change management engagement. So I think there's one... [Audio Gap] drive real purpose for growth around products that enable an organization to develop their people, to have a higher retention rate among their workforce, driven really around learning and development. So to the extent that we can continue to move that product's business, that's key. The third component is driving up what we call many to one, broadening the conversation, so inside sales. And what I mean by inside sales is the percentage of the business, of either Futurestep or LTC, that's driven from the heritage and great search business we have. And by the way, vice versa, that could play the other way from Futurestep and LTC to search, so kind of inside sales, we have to continue to work that up. And connected to those is obviously in an investment in intellectual property and R&D and technology that facilitate new products, that facilitate the delivery and growth of not just the products but also our services businesses. So those would be -- there's a number other things but those would be kind of the 3 or 4 top-of-mind initiatives that can drive that kind of growth Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: I mean, do you think that the current engagement level is there in terms of being able to do that? But now that you've integrated, that all the pieces are in place or do you think there's an opportunity for engagement to still increase? Gary D. Burnison: No. We do think that there is that opportunity. The average company will spend $3,000 to $5,000 per employee, depending on whether they are high-po [ph] or whether they're vital many [ph] , but on development. And -- so there's clearly -- there's significant spend there. And we need to drive both the services business and the products business to get that. The other kind of nuance in the business is that there's a fair amount of that business that's anchored in assessment, either low touch or high touch kinds of assessment. So I do believe that we've got the ingredients to be able to drive the kind of mandates that you're talking about over time. Robert P. Rozek: Mike, this is Bob. The other thing I would just throw in as well is we're running a number of programs, we call it our edge training, where we bring the workforce together, the client-facing side, anyways, in are rolling out a session or training session where we're allowing those individuals to learn more and more about this level and depth of the products that we have to bring the market with our clients. So that's an enabler, too, from an inside perspective to our workforce. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Great. And if you were able to get the organic growth rate up into that range, where would you hope that the margins on the LTC base -- on the LTC business could move on a sustainable basis? Robert P. Rozek: Yes. I think, Mark, if you go back to the call that we had right after we bought LTC, I think we said from an EBITDA or adjusted EBITDA perspective, we would expect the margins to be in the 16% to 18% range and I think we stayed consistent with that. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay. I mean, there's nothing that you've seen post- the further integration that would lead you to believe that, that's -- that there should be any change to that target? Robert P. Rozek: No. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay. And the utilization rate, did that move up on the... Robert P. Rozek: It was at 67% this quarter, Mark. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay, that was a nice improvement. Robert P. Rozek: Yes. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Great. And then, what are you seeing in terms of Europe, with regards to the core consulting business? Gary D. Burnison: The Executive Search business, Mark? Or broadly... Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Right, the core Executive Search business. Gary D. Burnison: Yes. Again, when you look sequentially, it was down modestly. It's not a lot of change, still a challenged environment. We did see some pickup in the quarter and in France, but I would still -- to characterize it as a challenged environment. But again, it's not a situation where we're losing 10%, it's one where I think we're continuing to make the brand more elastic and elevate the brand. Robert P. Rozek: Yes, and Mark the only thing I would add there, I think, Bernard, who's our Regional CEO, has really done a nice job when you look at the margin improvement that we've seen over in the EMEA. If you look at this quarter's compared to last quarter compared to the Q2 and even compared to Q4 of last year, I think Bernard has done a really nice job. He's brought on some new folks, I think, sort of turned over his workforce is doing a good job on cost controls and managing his operating expenses. And so we're seeing actually improvement in the profitability of the Europe operations in light of the fact that we're getting some dollar pressure on the top line. So I'm very pleased with that, I know Gary is as well. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: I certainly noticed that and I was wondering if the margins should be stable at these levels? If the top line basically -- environment doesn't change very much, top line kind of stays around these levels, adjusting for seasonality, of course, should we -- is there more improvement that can be done on the margins? Or are we going to retain some additional capacity in the hopes that things improve further? Robert P. Rozek: Yes. I think there's always -- Mark, I think there's always opportunity to drive efficiencies in your spending. And that's one of the things, as an organization, I think we do a pretty good job as constantly staying on top of that. So my desire would be that we continue to show some improvement in those margins, but I think we're also cognizant of the fact that at some point, topline gets pumped back. So you don't want to throw the baby out with the bathwater either. So I think we'll just continue to take a balanced approach, maybe some modest improvement in the margins in the near term. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: And then last question for Gregg. How did the upticks compare this fourth quarter to last year?

They're about the same, Mark. We typically do get a large number of upticks towards the end of the fiscal year, but about the same overall, on the average, for the quarter.

And I'll turn the call back over to you, Mr. Burnison. Gary D. Burnison: Okay. Well, number one, I want to thank our shareholders and for sure for their commitment to our organization. Secondly, I'd like to recognize and thank our Board for their guidance and support and of course, our clients and ultimately, our colleagues that we have around the world. And I don't think we could have asked for a better set of committed, purposeful individuals that are making this organization great. And I thank them for their dedication, stewardship of the brand and their efforts. So with that, I thank you, all, for your time and we'll speak to you soon. Thank you.

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