Gary Burnison - CEO Bob Rozek - EVP & CFO Gregg Kvochak - SVP, Finance

George Tong - Piper Jaffray Tim McHugh - William Blair & Company Mark Marcon - Robert Baird Tobey Sommer - Suntrust Robinson Humphrey

Ladies and gentlemen, thank you for standing by. And welcome to the Korn Ferry Fourth Quarter Fiscal Year 2015 Conference Call. At this time, all participants are in a listen only mode. Following their prepared remarks we will conduct a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes. We have also made available on the investor relations section of our website at www.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 the company's Annual Report for fiscal 2015 and the other periodic reports filed by the company with the SEC. Also, some of the comments made today may refer to 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 financial presentation and release relating to this call. Both of which are posted on the company's website at www.kornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, sir.

Okay. Thank you, Cathy. And good afternoon, everybody. And thank you for joining us. We just finished the fiscal year here and our fourth quarter and to say that I am pleased is an incredible understatement. This firm is I am just so proud of our colleagues here at Korn Ferry and what we are doing and what we've achieved particularly in this last quarter we closed out the year with a record high $272 million and I just point out that on a constant currency basis like any global company, currency hit us big time and on a constant currency basis that our revenue would have been $288 million just absolutely phenomenal. That represents 14% growth year-over-year, 11% growth sequentially. Both of those are constant currency. EBITDA was $41 million about 15% margins in the quarter. EPS was $0.51 and the fourth quarter results propelled this firm to over a $1 billion for the first time in our history on a constant currency basis. For the full year we would have been $1.52 billion I mean amazing. Our balance sheet per stain got $525 million in cash and marketable securities. And as I reflect back on this last year and what we are driving to be which is the preemptive authority on Leadership and Talent. I just highlight a couple things. I mean this last year we qualitatively and financially knocked the cover off the ball with our flagship search business number one we account for 30% of our revenue generated by those firms. We integrated all of the acquisitions, we took all the IP traded a number of new solutions, one out of four employees here at Korn Ferry is new over the last 24 months or so we put 35,000 professionals into new jobs over the last year. Every month about 50,000 professionals benefit from the IP and the development programs that we have. And financially ROIC, we increase that a 100 bips to about 12.5% and Greg and Bob can talk to that. When you look at our service lines, again I am really proud our Leadership business is now alone it's 26% of the revenue that grew in the quarter, is up over 14%, revenue there was about $73 million constant currency. We added a new leader to that business Matt Riley who joined us from Accenture and he is got a great track record of growing professional services organization and our predecessor and very good colleague of ours RJ Heckman, is now going to be doing what he loves which is part of the office to the Chief Executive program really client facing, so we first we congratulate RJ and what he has done to bring us to this point. Our Futurestep team has been the highlight clearly for the year. The business in the quarter was up, I think about 22%. We are doing great work, high quality work there with significant brands and our search business as I talked about being the flagship we lead with the search business it opens door for us, changing people's lives, that business in the quarter that grew 12%. So you know I look on this last quarter this last year, half of our revenue comes from -- 20% of our clients and engages in more than one line of business. You look at our Top 100 clients and most of those were doing multi solutions or multi geographies really, really good news. As we look forward, we are going to continue to orient this firm in knowledge and IP, going to continue to invest there and in addition to making that the anchor of the organization really for other pillars; one is to have a proactive go-to-market strategy going together as one firm. Secondly, continue to make the brand more elastic and elevating the brand. Clearly M&A is part of our playbook and we are going to make investments there carefully, systematically like we've done in the past. And finally make this the best place to work. That's really it; I am very, very proud about our colleagues here at Korn Ferry. With that I'm going to turn it over Bob and Bob Rozek and Gregg Kvochak are here. Bob, I'll turn it over to you.

Great. Thanks, Gary. And good afternoon, everyone. As Gary indicated fiscal 2015 was another very strong year for Korn Ferry, year on which we achieved many major financial and operational milestones. While we continue to position the firm for future growth with key investments in people, processes and then intellectual property. Before I get into remarks so I do want to congratulate the whole Korn Ferry family for surpassing the $1 billion revenue threshold, they are truly is, at least in my view an exceptional feat. As investments spending around the world continues, we also continue to help our clients achieve their business objectives by assisting them in the design of talent strategies that enable them to build, develop and attract the best talent for the workforce. Our fourth quarter and total year financial results really demonstrate our success and validate the demand for our industry leading services. As Gary indicated our fee revenue in the fourth quarter reaching all time high of $272 million and it propelled the company's full year fee revenue to $1,028 million. At constant currency fee revenue for all of fiscal 2015 grew nearly $92 million or 9.6%. And out of that 42% of that annual fee revenue was generated from services outside of executive recruitment. Also at constant currency our fourth quarter fee revenue of $272 million was up $35.8 million, or 14.2% year-over-year and up $28.3 million or 11.3% sequentially. Some positive factors that impacted our fourth quarter fee revenues were the Pivot acquisition that contributed about $3.7 million for the two months. We had seasonally strong upticks which are up about $5.5 million sequentially and $3.5 million year-over-year. We also had seasonally strong sales of our perpetual licenses. We are up about $1 million sequentially and kind of flat year-over-year. Also as we previously mentioned we did faced some currency headwinds which negatively impacted our fourth quarter revenues by about $16 million year-over-year. Finally, if we adjust for the acquisition of Pivot whose operations work consolidated with L&TC as of March 1. That was the date that we acquired them. The consolidated fee revenue in the fourth quarter grew 12.5% year-over-year and 9.8% sequentially on a constant currency basis. As expected, executive search new business was seasonally strong in a fourth quarter. Worldwide executive search new business was up 4.1% compared to the fourth quarter of last year and up 12.5% compared to the sequential third quarter of this year. Seasonally strong uptick activity was a main factor driving the overall new business growth year-over-year. In LTC, our new business awards in the fourth quarter were also seasonally strong growing over 12% compared to a third quarter of FY15. And finally Futurestep which as Gary indicated had a just a fantastic year reach another record high for new business in the fourth quarter with the total dollar amount of concerned -- confirmed assignment up 95% year-over-year and up 61% sequentially. For all of fiscal 2015, Futurestep was awarded approximately $118 million of new solutions contracts which is up 11% year-over-year. Despite the negative impact to our expenses, our foreign currency losses and investment hiring targeted to drive growth in future period, our profitability remains strong in the fourth quarter. Excluding acquisition cost of $500,000, adjusted EBITDA in the fourth quarter improves $6.2 million or 18% year-over-year to $40.7 million. Compared to the third quarter of fiscal 2015, adjusted EBITDA was up $1.6 million or 4.2% with foreign currency losses in investment hiring tampering some of the near term earnings growth. However, adjusted EBITDA margin did remain strong in the quarter at 15% which compares to 15.7% in the third quarter and 30.7% in the fourth quarter of fiscal 2014. For all of fiscal 2015, our adjusted EBITDA was up $23.4 million or over 17% reaching $161.7 million with earnings growth in all service lines. Consolidated adjusted EBITDA margin was 15.7% for fiscal 2015 compared to 14.4% for fiscal 2014. And as Gary indicated our financial position continues to strengthen the fourth quarter. We ended up with total cash of marketable securities of $525 million which was up $72 million compared to the third quarter of fiscal 2015 and up $57 million compared to last year. Excluding cash and marketable securities that we reserve for deferred comp arrangements and for accrued bonuses which we will pay within a next month. An extra payment for quarterly dividends and acquisitions, our current investable cash balance is approximately $236 million, up $31 million or 15% compared to the third quarter of fiscal 2015. And out of that amount about 39% of that resides in the US. If you pullout our working capital needs, our net investable cash is approximately $160 million and about 38% of that reside in the US. And finally our adjusted fully diluted earnings per share were $0.51 in the fourth quarter; it's an improvement of $0.08 or 19% year-over-year. And $0.05 or 11% sequentially. The impact of lower tax rate in the fourth quarter help adjusted fully diluted earnings per share by about $0.03 to $0.04. This was however substantially offset by cost associated with foreign currency losses as well as the cost associated with the investment hiring as our new hires take time to ramp up the fully productivity. For all of fiscal 2015, adjusted earnings per share were $1.90, a year-over-year improvement of $0.30 or 19%. With that I'll turn it over Gregg who will cover our operating segment in more detail.

Okay. Thanks Bob. I'll start with our executive recruitment segment, globally, revenue for our Executive Recruitment segment was seasonally strong in the fourth quarter and actual foreign exchange consolidated Executive Recruitment fee revenue in the fourth quarter was $156.6 million, up $8.4 million, or 5.7% year-over-year and up $13.1 million, or 9.1% sequentially. As discussed on our third quarter earnings call, the current strength of the US dollar continued to be a significant headwind for growth for executive recruitment segment. Adjusting to constant currency, our consolidated executive recruitment fee revenue in the fourth quarter was up $18 million, or 12.1% year-over-year and up $16.8 million or 11.7% sequentially. On a regional basis at constant currency, North America was 10%, Europe was up 13.7%, Asia Pacific was up 10.6% and South America was up 37% year-over-year. On quarter sequential basis, also at constant currency North America grew 12.8%, Europe grew 13.5%, Asia Pacific was up 10.4% and South America was down 4% in the fourth quarter. For the full year at constant currency the Executive Recruitment segment was up 7.6% with growth in every region led by North America and Europe which were up 8.5% and 8.6% respectively. Compared to the fourth quarter a year ago growth in our Executive Recruitment specialty practice was mix in the fourth quarter. Worldwide growth was strongest in our financial services practice, up 17%, life sciences and healthcare practice up 11% and our consumer good practice up 6%; all our industrial and technologies practices were down 4% and 9% respectively. Financial services accounted for approximately 21% of all Executive Recruitment fee revenue in the fourth quarter which was up 190 basis points sequentially. Sequentially all of our specialty practices grew in the fourth quarter with the exception of the industrial practice. Financial services were up 20%, life sciences and healthcare was up 12%, while consumer good and technology were each up 8%. Worldwide the industrial practice was down 4% driven primarily by softer market conditions in North America. For all of fiscal 2015, all of our global specialty practices except technology grew led by the financial services, industrial and consumer good practices which were up 10%, 10% and 8% respectively. Consultant hiring accelerated in the fourth quarter. The total number of dedicated executive recruiting consultants worldwide at the end of the fourth quarter was 452, up 20 year-over-year and up 8 sequentially. Annualized fee revenue production per consultant in the fourth quarter improved to $1.4 million which was up approximately 2% year-over-year and up approximately 8% sequentially. The number of new search assignments opened worldwide in the fourth quarter was 1,382 which were up 6% year-over-year and up 4.8% sequentially. Consolidated executive search EBITDA in the fourth quarter was $33.4 million with the 21.3% margin, an improvement of $1.7 million or 5.2% year-over-year with an essentially flat margin. On a sequential basis, higher cost associated with investment hiring and higher incentive compensation expense associated with greater consultant productivity reduced the EBITDA by $1.6 million with a 310 basis point drop in margin. For the full year, executive search adjusted EBITDA was $132.3 million with a 22.2% margin compared to $127.8 million with a 22.5% margin for all fiscal 2014. Now turning to our Leadership and Talent Consulting segment. Rebounding from seasonally slow third quarter worldwide fee revenue for L&TC improved to $72.8 million in the fourth quarter. Measured on a constant currency basis, L&TC's fee revenue in the fourth quarter grew by $9.6 million or 14.5% with a year-over-year growth in every region. Compared to the third quarter of fiscal 2015, also on constant currency basis L&TC's fee revenue grew $9.6 million or 14.9%. Regionally, North America accounted for approximately 72% of total L&TC worldwide fee revenue in the fourth quarter compared to 73% in the third quarter of fiscal 2015. Excluding the impact of Pivot on L&TC's fourth quarter fee revenue, growth at constant currency was 8.8% year-over-year and 9.2% sequentially. For the full year also excluding the impact of the Pivot acquisition L&TC's fee revenue grew $12.9 million or 5% at constant currency. L&TC also ramped up investment hiring in the fourth quarter. At the end of the fourth quarter there were 164 dedicated L&TC consultants compared to 140 in the third quarter of fiscal 2015 and 127 in the fourth quarter fiscal 2014. Professional staff utilization improved to 74% in the fourth quarter from a seasonal low of 65% in the third quarter. Compared to the fourth quarter fiscal 2014, L&TC's EBITDA in the fourth quarter of fiscal 2015 was up approximately $2.1 million or 20.7% to $12 million with 150 basis point improvement in margin. Sequentially, L&TC's EBITDA grew $300,000 or 2.6% with earnings growth negatively impacted by recent investment hiring. Finally turning to our firm's fastest growing segment Futurestep which grew for the 10th consecutive quarter and generated $42.4 million of fee revenue in the fourth quarter. Measured on a constant currency basis, Futurestep's fourth quarter fee revenue was up $8.2 million, or 22% year-over-year and up $1.8 million or 4.5% sequentially. On a regional basis measured year-over-year at constant currency North America was up 28.7%, Europe was up 14.9%, Asia Pacific was up 18% and South America was up 36.4%. Sequentially, constant currency growth was the strongest in North America which grew over 10%. For all fiscal 2015, Futurestep generate the strongest growth improving to $163.7 million of fee revenue which was up nearly $32 million, or $0.23 at constant currency. Finally, driven by improving fee revenue, Futurestep's EBITDA in the fourth quarter grew $1.2 million or nearly 26% year-over-year reaching $6.1 million with 130 basis point improvement in margin. For all of fiscal 2015, Futurestep's EBITDA grew $6.2 million or 37% reaching $23 million. Now turn the call back over to Bob to discuss our outlook for the first quarter of fiscal 2016.

Great. Thanks, Gregg. Globally across all of our operating segment, the new business awards were seasonally strong in a fiscal fourth quarter. And they really provide us with a strong backlog of assignments as we enter into the first quarter of fiscal 2015. Our main new business was down compared to April and historically both June and July have been stronger month for us in terms of new business in advance of a seasonally softer August due to vacations. We also expect upticks and perpetual licenses sales to return to historical levels off of the fourth quarter seasonal high that I previously talked about. And in spite of the time required to ramp up the full productivity we do expect revenue contribution from our new hire consultants right onboard in both the fourth quarter of fiscal 2015 as well as some of those that we continue to bring on to date. Given all the above and assuming worldwide economic conditions, financial markets and foreign exchange rates remains steady, fee revenue in the first quarter of fiscal 2016 is likely to range from $258 million to $270 million and diluted earnings per share are likely to range from $0.44 to $0.50. So that concludes our prepared remarks. And we will be glad to answer any questions you may have.

[Operator Instructions] And we'll go first to George Tong of Piper Jaffray. Go ahead please.

Hi, good afternoon. Can you talk about trends we are seeing in North American exec search in May and June and how this compares to April and how they are tracking versus expectations?

Yes, I think, George, this is Bob. May the dollars that we saw in North America search in May were roughly flat with what we saw last year in May. But -- and it was interesting last year in May we had three very large search engagements, two CEOs and one Chief Compliance, Risk Compliance Officer. But the number of units this year is up about 20 over last year that's about 12%. And so we continue to see pretty robust activity in North American search.

Got it. That's helpful. As a follow up, can you discuss a bit your investment spending outlook in terms of the hiring of sales and recruiters. And which areas you think hires are growing into, what the anticipated impact will be on operating margin et cetera?

Well, we continue to bring talent into the organization. We also promote from within. So on beginning of May we probably promoted 20 or 30 colleagues to partner, so that would certainly -- that would hit when we talk next quarter. We've also got some consultants that we've hired but they hadn't started as of April 30. So we are continuing to add talent and on the leadership side we are following the same playbook.

And which areas are you hiring the most? If you had to breakout proportionally where these hires are going?

Well, we look at the opportunity really across the globe. And I wouldn't say that we are over weighted strategically in any one place. When you look at some recent activity a lot of that has been focused in the United States. But that's not -- that just -- that was kind of opportunistic. We are trying to bring talent in pretty evenly across the world.

Thank you. Our next question is from Tim McHugh with William Blair. Go ahead please.

Thank you. Just on the North American market. Does it feel like the environment change? I guess also the growth really picked up, you talked a little bit about factors that was driven partially by upticks which I know are lumpy but I guess how do you -- how does the market feel versus what it did 6, 12 months ago to you?

I don't think the market is substantially different. I don't think there is a huge tailwind nor do I think that there is a big headwind. It feels about the same, obviously you got softness in energy. You got the CEO confidence numbers that came out were weaker this week, we got a big jolts number which was substantially higher. So there are puts and takes but I don't really think I haven't seen any marked change in the last few weeks or months compared to six months ago.

So is the hiring more it feels like a picked up both in LTC and executive searcher as you said opportunistic or is there I guess is there another reason that it picked up pace?

Well we listen we've -- it is all about talent in any kind of industry. And talent is as important as strategy, so we've had it as a stated goal for a long time that we would add talent into our leadership, Futurestep, search business and that's what we've done.

Okay. And then just a number questions. Tax rate was I guess abnormally low this quarter. What are you assuming for Q1 and do you have any sense of what then for the full year of 2016?

Yes. Based on our preliminary replan for next year, Tim, it looks like the mix of earnings we have we are anticipating about 32% rate.

Is that for Q1, 2?

Yes. Yes.

Then our next question is from Mark Marcon with RW Baird. Go ahead please.

Good afternoon and congratulation and great to see. Gary you mentioned the environment doesn't feel that different than it did six months ago. But clearly the results are better. What would you primarily attribute that to? Would you say it's basically the gelling of the strategy and the go-to-market philosophy that you are executing against or what's driving it?

I think it is the -- yes I think it is a combination, I think it is the differentiated platform. I think it is the intellectual property and increase solutions. And then it is a talent that we are bringing in. I think all three or four those things combined are really resonating with our clients.

So it sounds like you are probably gaining share then as a result of these steps?

Again you look at the market opportunity and I think that you just take the -- what company spend in learning and development. I mean that's a $150 billion market. So I think if you look at myopically through an executive search lens you are going to find the market $3 billion to $5 billion. If you reorient yourself to what a CEO really thinks about driving talent to deliver superior business outcomes and I think your market sizing becomes larger. And that's what we are focused on.

Great. And can you talk a little bit about Pivot in terms of how it fits in with PDI and the other assets that you got there? How do you view that, the solutions set now?

It is -- where -- we've got a focus on adding capabilities around organizational design; around development and in the third case that we have a very big appetite forward would be around rewards. So those are some areas that we get at a great deal of capability too. And would not at all be redundant and in fact would be, would resonate with clients. So Pivot more is on the development side. A high end development team effectiveness say sweet kind of stuff.

Great. And then with regard to -- this was asked different way but in terms of the additional that you had on the executive search side. Is it been primarily focused on any one particular practice area and as a follow up to that really strong growth in financial services where is that coming from?

The financial services growth I mean you are right, we saw definitely an uptick there and it would be really spread across asset management. Even capital market to some extent I mean not like it was but even banking. So we saw kind of steady improvement there. That our business can tend to be impacted by one time kinds of things. So yes I wouldn't read too much into that. And then in terms of your specific question, we recently made a good investment into a team to help build out our capabilities in professional services. Now professional service organization spend billion of dollars in how they develop people, how they hire people and so we made an investment into a group of people that I think will deliver great things for us here in the future. But other than Mark I mean I think it has been, it's been pretty balanced.

Great. And then one last Gary. With regards to Futurestep and the RPO market. How much of Futurestep's growth is or what percentage of Futurestep is now RPO and what are you seeing in terms of RPO internationally now?

So we just signed a huge engagement with a European company, I mean multi million dollars to help build out technical capabilities. So it is a number one what we are seeing is this increasing desire in companies to find highly skilled, highly technical talent, it is kind of difficult to come by. So that's really playing quite well for that Futurestep business. And that's pretty consistent across the globe. But I think your question and Bob can you-- our RPO project business what was that.

Yes, Mark, I would say if you look at Futurestep's growth, the RPO projects, its solution business is about 60% of the total and single search is the remaining 40%. And both of those businesses grew and a rate they are contributed pretty evenly to the overall growth in that line of business this year. So we saw really good growth both the single search and the solution set side.

Thank you. We now have a question from Tobey Sommer with Suntrust. Go ahead please.

Thank you very much. Gary, the margins improved substantially, how do you structurally try to improve the margin profile of the firm from here? Thanks.

I think two things. I mean I think that the one is deeper penetration on current clients. We deal with 5000 clients a year. And to the extent that we can be smarter and deliver more value, broaden the services to existing clients that has a greater impact on profitability than anything else. So that's absolutely got to be the focus is outside and how you go to market and how you dedicate your talent pool towards opportunity. That's clearly number one. The second is to go into businesses that are more I'd say product oriented that where you can leverage IT, that would contribute to margins. So it is really those two things. Those aren't dreams, those are real possibilities. And we have to keep executing against both those path.

Thanks. That's kind of goes to my next question. Could you speak to the differentiation in the market place and how IP comes into play? So I understand you can probably leverage it across the segments perhaps supplying it more intensively to the executive search segment but I would love you speak about that. Thanks.

Well, number one the IP is being leveraged in all of the recruiting assignments that we do. So whether it is in the Futurestep business or the search business, that kind of talent if not about what those people have done, the candidates it is really who they are. So we've got a proprietary assessment that we just rolled out 4D that we think is the best anywhere and it is actually -- it is built on success, so what has been success of executives. And so that continue, all that given that we put somebody in a job every 3.5 minutes, you can imagine how many people we are seeing. When we put them through the assessment, it refreshes and we think we can show any client the difference between good and great in any country across any function. So that's number one. In terms of the product capability and what you can do there. There is opportunities not only to license that kind of a assessment tools to companies for them to use in hiring but we can also use those same kinds of things on the development side. Where clients can use our intellectual property on a license basis to develop their own people. So that's how we do it.

Thanks. Just two other questions for me. Could you repeat the new business award for Futurestep in the quarter? And then I was curious if from your perspective the upticks in the quarter, how you would view those in light of just kind of a cyclical potential for executive compensation growth to pickup? Thanks.

Okay. Tobey, this is Bob. In Futurestep, the new orders, I'll give you two by that the two line sort of segments so there are line of business. So the solutions piece was roughly say $45 million-ish and then the single search new orders in the quarter were about $18. So net-net it is little bit above $63 million.

Then in terms of your question on-- wage growth, this last number, you look at the BLS number it is 2.9%. We are definitely seeing a trend where used to be salary increases were 10% of payroll right I mean 20 years ago. That's not the case. Companies are going to more variable structures giving people Apple watches or time off but I don't -- analytically you would say that our average fee constant currency was $119,000 for the year, so that's highest during the quarter I guess, Gregg, it was quarter.

That's for the year.

For the year, yes.

So $119,000, that’s up a little bit for sure, I am not so sure I would -- I don't think you can extrapolate that [Technical Difficulty] growth I mean that's thing it is very difficult for us to measure and set guidance is that uptick piece. I mean it is several million dollars in a month and a fourth quarter does tend to be richer for sure. And there was a lot of uptick that came through.

Thank you. Bob, in terms of the -- can you split that for Futurestep? What was the growth for the overall new business?

Sequentially it was about 60%, I think 62% or 63% and then year-over-year it was about 90%, Tobey.

Okay, that's the part I was double checking. I thought I was too high or something, all right, thanks for your help.

Thank you. And we do have a follow up from Mark Marcon with RW Baird. Please go ahead.

With the 90% new business growth in a year-over-year basis for the RPO side, wouldn't that imply some acceleration?

Mark, listen it is very difficult to really assess that. I mean this quarter was definitely this last quarter was impacted for sure by some license sales, some higher than normal upticks. You are moving into the summer months. So I wouldn't make that call, intuitively I could see how one would say that. I just not so, we have to see if that actually flow through.

Yes, Mark, and specific to Futurestep because I had said of the business, I asked that very question and what's happening there is the tenure of the contract is stretching out longer and longer. So if you take the -- you maybe take the 118 and you play it out over time it will be fairly consistent with what we saw or what we've seen historically so you get like a third in the first year, third the second year and then the rest would spread out over the next say 18 months or so. So even though the dollar value of the awards are growing, the length of contracts is extending out as well which I mean both those obviously very good facts for us.

Certainly is. Then with regards to L&TC, in the past we've talked about there is a little bit of constraint in terms of the number of individuals who are skilled at selling those solutions. Can you give us a progress report in terms of how that's been going?

Well, the progress report I think we will be next quarter. And the quarter after, we've now -- we are up now Mark almost 40 consultant year-over-year, so that's about 28% up, we are 24 up sequentially, so we have made a marked investment in those colleagues. And it does take time to ramp up but they are still very, very difficult to come by. And quite candidly that's why, if you can make a bigger investment and not only get capabilities and solutions but people, that's an interesting way to do that at a faster pace. So that's a Pivot is a great example of that.

Thank you. And it appears there is no further question Mr. Burnison.

Okay. Well, listen I wanted to thank everybody for joining us and we look forward to reporting on our progress as we continue to build on our leadership position of helping companies deliver superior business outcomes through impactful people's strategy. So with that thank you very much and we'll talk to you next time.

Thank you. And ladies and gentlemen, this conference will be available for replay for one week starting today at 7:30 PM Eastern Day light time and running through the day June 18 ending at Midnight. You may access the AT&T executive playback service by dialing 1800-475-6701 and entering the access code 361940. International participants may dial 320-365-3844. Additionally, the replay will be available for replay at the company's website, www.kornferry.com in the investor relations section. That does conclude our conference for today. Thank you for your participation and for using AT&T executive teleconference. You may now disconnect.