Gary Burnison - CEO Bob Rozek - CFO Gregg Kvochak - IR

Tim McHugh - William Blair & Company Tobey Sommer - SunTrust Robinson Humphrey Mark Marcon - Robert W. Baird Adrian Paz - Piper Jaffray

Welcome to the Korn/Ferry Third Quarter FY '16 Conference Call. [Operator Instructions]. 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 kornferry.com, a copy of the financial presentation that we will be reviewing with you today. Before I turn the conference 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 that 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 the 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 FY '15 and in the other periodic reports filed by the Company with the SEC. Also some of the comments today may reference non-GAAP financial measures such as constant currency amounts, EBIDTA and adjusted EBIDTA. Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measures is contained in the financial presentation and earnings release related to this call, both of which are posted on the Company's website at www.kornferry.com. With that, I'll turn the conference over to Mr. Burnison. Please go ahead, Mr. Burnison.

Okay. Good morning, everybody. Thank you for joining us. I'm incredibly proud sitting here just 90 some days after our combination with Hay Group and pleased to report that the results for the quarter came in as we expected, about a 14% year-over-year growth in revenue at constant currency. Of course that's without the benefit of Hay Group. All three lines of our business grew during the quarter, led by Futurestep which was up 24% year-over-year constant currency. I would point out within the Futurestep business, the North American part was up about 36%. Search was strong, it was up year-over-year, about 13%. North America, again, within Executive Search was strong, up 21%. Legacy LTC was up about 10% year-over-year at constant currency. I've thought a lot about where we're as an organization and what we're trying to achieve in this decade and so many times I hear the word, transformation. It's pretty commonplace in today's business jargon but, I really believe that's what we're doing here. We're completely changing our form, our appearance and what we can do for clients. I thought about our firm today, the revenue run rate is about $1.6 billion. In the last couple years' dollars, that's $1.9 billion. 50% of that business, despite our strong brand in Executive Search, 50% of that top line comes from our advisory business, the business that we're calling Hay Group. That's astonishing to me. In fact, after giving effect for Hay Group, we're going to produce almost as much EBIDTA in a year as we did in sales when I joined the Company. It's mind-boggling. We're establishing a new category, that's being the preeminent strategy organizational and people advisory. Years ago, I talked about this as a multi-$100 million opportunity, but I was wrong. This is a multi-$100 billion opportunity, a multi-billion-dollar opportunity. This is a firm, Korn/Ferry, that for clients, we can connect business and organizational strategy with talent. That's what it's all about as a CEO. It's one thing to design a great offense or a defense, but you've got to marry that -- you've got to intersect that with talent. That's the magic about being a leader, about being a CEO. That's what we're doing for clients. This is a Korn/Ferry that can span and flex for our clients. From strategy implementation and org design to obviously, finding the right talent, to helping clients develop that talent, but also help them align their compensation, their motivation, their reward processes to their strategy. That doesn't even talk about our other capabilities around employer branding and job design or workforce planning or succession or culture or team effectiveness. All of this for the purpose of driving superior business performance for our clients. So, I do believe transformation is the word about what we're doing. I'm very, very proud to think over these last 90 days with our combination with Hay Group and the colleagues that have joined us and I'm more confident than ever that this is going to be a game changer. Now, Bob is going to talk to you about the integration plan. We finished Phase 1 already of our plan. That was largely focused on synergies. But more importantly, over the last several weeks, we started Phase 2 which really revolves around growth areas, such as the expansion of our IP solutions, offerings. The other thing that I'm happy to report is we have accelerated the unification, the combination plan. Our current intent is to substantially complete the last phase of our integration activities in the July 31 quarter of this calendar year which will be seven months. Seven months from the closing date of the transaction. I think about this Hay business, we said it was about a $500 million business at the time we bought it. Now, currency has gone the other way, so that $500 million was probably $475 million, but we told you in late September it was a $500 million business and $40 million of EBIDTA. I think when Bob's done here, describing our plans, this is a $500 million business that's going to give us about $100 million of EBIDTA versus the $40 million that we told you in September. Bottom line, we've got momentum. Make no mistake, our path forward has to be about growth. More importantly, we've got to continue to be a Firm that moves the organization from who we know to what we know. That's going to be accomplished by six key initiatives. Number one, we've got to do a better job of promulgating what our brand could be, not what it's been and ensuring that Korn/Ferry is synonymous with being the talent pylon in the world. Secondly, we've got to drive a, one, Korn/Ferry go-to-market strategy, proactively deepening client relationships. We've also got to develop our colleagues to be able to do things. Now we've got 7,000 colleagues strong. Third, we have to institutionalize our global enterprise-wide solutions sets. We also have to take the Korn/Ferry Institute now where we have many colleagues and professionals and we do need to make that the pylon for all things talent. We have to further leverage our world-class IP data and analytics to our clients. Fifth, we're, making targeted growth investments against mega trends in the world, for example, healthcare, that is an enormous opportunity for us. We're, as I said, run rate's about $1.6 billion. You look at our healthcare practice which is phenomenal in terms of Executive Search. Our healthcare business is $100 million. This is less than 10% of the Company. In the United States, healthcare is going to be 20% of GDP. We have to do better. We're making investments in the healthcare area. Just like we're going to make investments, for example, in the area of compensation and rewards. Finally, point six, were going to continue to optimize this combination with Hay Group and not around a cost cutting exercise. Unfortunately, that was something that we've had to do. Look, we're going to leverage the technology and systems and infrastructure that we have. That's the reality. But, more importantly, this combination and this unification is all about growth. So, I am very proud of where we're, particularly when I consider how the stock market has started out this year and certainly the events in Asia. So, look, enough about the strategy. I'm joined here with Bob Rozek and Gregg Kvochak. So Bob, I'll turn it over to you.

Great. Thanks a lot, Gary. Good morning, everybody. As Gary indicated, we were extremely pleased with our third quarter results. I'm going to start off with a couple of highlights. First, we continued to see strong growth in our North American Search business as well as Futurestep. In the third quarter, these segments achieved year-over-year constant currency growth of 21% and 24% respectively. Next, in the third quarter, we made great progress integrating the Hay Group. We're already realizing synergy benefits. In the quarter, we got the adjusted EBIDTA margin for the legacy Hay business up to 11% which when you combine that with the legacy L&TC business was 15.6% for our new Hay Group segment. I will get into a little bit more detail on that later. Finally, we achieved $0.52 of adjusted fully diluted earnings per share in the quarter. This result was impacted by a couple of non-operating factors which separately had a large impact on net earnings but in combination were offsetting. First, Gary referenced, the turbulent financial markets within the quarter and primarily in January, that resulted in a net loss on the Company's deferred compensation program assets which negatively impacted our adjusted EBIDTA margin by about 100 basis points and our adjusted fully diluted earnings per share by $0.05 to $0.06. Now, offsetting this, the Company favorably concluded an income tax audit during the quarter which drove our third quarter adjusted tax rate down to 22.4% which when you compare that to our normalized long term rate had a positive impact on adjusted diluted EPS of about $0.05 to $0.06. So those two offset each other. Now, turning to our operations for the third quarter, despite the year-end holiday seasonality, the mixed economic headlines in the turbulent financial markets, demand for our services continued to hold up really steady. Including the two months of results for our legacy Hay Group operations, our consolidated adjusted fee revenue in the third quarter was $350 million. In the seasonally weaker months of December and January, the legacy Hay Group generated approximately $78 million of adjusted fee revenue. That includes the $5.9 million of deferred revenue that under GAAP purchase accounting rules could not be recognized. Excluding the results of legacy Hay Group, our consolidated fee revenue was $272.2 million in the third quarter which was up nearly $23 million or 9% year-over-year. At constant currency, it was up $34.5 million or 14%. year-over-year, our growth continues to be broad-based with improvement on a constant currency basis in nearly all of our operating segments, again, led by North American Search and Futurestep. Now, turning to new business, first for Executive Search, monthly new business trends experienced the normal seasonal fluctuations in the third quarter. We had better than expected confirms in November which fell in December as expected and then rebounded strongly in January. At actual foreign exchange rates, our worldwide Executive Search new business was up 4% year-over-year. Now, for the new Hay Group segment, again which only included the legacy Hay Group for two of the three months in the quarter, our new business awards reached nearly $130 million. Finally, Futurestep achieved another strong quarter of new business in the third quarter with the total dollar amount of confirmed assignments up 25% year-over-year. Now, for the first three quarters of FY '16, Futurestep has won a combined $212 million of new assignments. That includes approximately $159 million of longer term recruitment process outsourcing and related services work which we expect to recognize revenue on over the next three or four years. Now, during the quarter, we incurred a restructuring charge of $30.6 million. These actions will improve the Firm's consolidated cost base by driving operational efficiencies and to a lesser extent, by consolidating a number of our offices. Due to the timing of these actions, the savings were only partially realized in the quarter and again resulted in the legacy Hay Group delivering an adjusted EBIDTA margin of 11% which when you combine that with the legacy L&TC business was 15.6% in the quarter. In the third quarter, our adjusted EBIDTA which excludes restructuring charges, integration acquisition and separation costs as well as the deferred revenue purchase accounting adjustment, reached $47.7 million with a 13.6% adjusted margin. As previously discussed, the result was negatively impacted by the non-operating market-driven losses tied to the Firm's deferred comp assets. Again, that was about a 1 percentage point decline in margin as a result of that. On a year-over-year basis, the adjusted EBIDTA was up $8.6 million or 22%. Now, if you exclude the legacy Hay Group operations and the 100 basis point impact from the markets, our adjusted EBIDTA margin for the third quarter was essentially flat when comparing it to the third quarter of FY '15. At the end of the third quarter, our total cash and marketable securities were $343 million, down $110 million compared to the third quarter of FY '15. Excluding cash and marketable securities reserve for deferred comp arrangements and for accrued bonuses, the investable cash balance at the end of the third quarter was approximately $81 million or down $124 million year-over-year. The primary use of cash in the quarter was related to the funding in December of the cash portion of the Hay Group acquisition. So obviously we're starting to deploy capital that we had built up. Also associated with the Hay Group acquisition, the Firm had outstanding debt at the end of the third quarter of approximately $147 million. Finally, excluding all previously disclosed adjustment items, our adjusted fully diluted earnings per share were $0.52 in the quarter, up $0.06 or 13% compared to the fiscal third quarter of FY '15. On a GAAP basis, our fully diluted loss per share for the third quarter was about minus $0.30. That really results from the restructuring integration costs that we incurred in the quarter. Okay. With that, I'm going to turn it over to Gregg to review our operating segments in a little bit more detail.

Okay. Thanks, Bob. Let's start with our executive recruitment segment. Despite year-end holiday seasonality, demand for our executive recruitment services remained strong in the third quarter. At actual foreign exchange rates consolidated executive recruitment fee revenue in the third quarter was $154.7 million which was up $11.2 million or 7.8% year-over-year. Adjusting to a constant currency basis of measurement, our consolidated executive recruitment fee revenue in the third quarter was up $18.2 million or 12.8% year-over-year. On a regional basis, compared to year-over-year at constant currency, strong growth in North America which was up 20.8%; Europe, up 4.7%; and South America, up 8.9%, was offset by weakness in Asia-Pacific which was down 2% compared to the third quarter a year ago, growth in our executive recruitment specialty practices was positive with growth in our technology practice up 21%; our consumer goods practice up 13%; our financial services practice up 10%; and our life sciences and healthcare practice up 6%. This was offset by weakness in our industrial practice which was down 10%. Financial services accounted for approximately 19% of all executive recruitment fee revenue in the third quarter which was flat year-over-year. The total number of executive recruiting consultants worldwide at the end of the third quarter was 492 which was up 38 year-over-year and down 2 sequentially. Annualized fee revenue production per consultant in the third quarter was seasonally slower at $1.25 million. The number of new search assignments opened worldwide in the third quarter was 1,302 which was up 3% year-over-year. Consolidated Executive Search EBIDTA in the third quarter was $42.9 million, with a 27.7% margin, an improvement of $7.8 million or 22% year-over-year. Now turning to our Hay Group segment. In combination with our legacy leadership and talent consulting operations, the new Hay Group segment produced adjusted fee revenue of $146.4 million. At constant currency, our legacy Leadership & Talent Consulting operations grew $6.5 million or 10.4% year-over-year. The adjusted EBIDTA margin or adjusted EBIDTA for the new Hay Group segment was $22.8 million which was up $11.1 million or 94% measured year-over-year. The adjusted EBIDTA margin for the new Hay Group segment was 15.6% in the third quarter compared to 18.3% in the third quarter FY '15. Finally, turning to our Firm's fastest growing segment, Futurestep. In the third quarter, Futurestep generated $49 million of fee revenue which measured at constant currency was up 24% year-over-year. On a regional basis, constant currency growth measured year-over-year were strongest in, North America up 36%; Europe up 17%; and Asia-Pacific up 9%. Futurestep's earnings continue to grow in the third quarter. EBIDTA in the third quarter was $7.3 million which was up $1.3 million or nearly 23% year-over-year. Futurestep's EBIDTA margin in the third quarter was 14.9% which was up 50 basis points year-over-year. Now, I'll turn the call back over to Bob to review our outlook for the fiscal fourth quarter.

Okay. Thanks, Gregg. As I sit here, it's really hard to believe that we only have a little bit less than two months left in this year. As you reflect on everything that the organization has accomplished this year, it's pretty mind-boggling when you look at where we're today versus where we were when we entered this year. As previously discussed, our new business awards in executive recruitment segment remained steady in the third quarter. Globally, January new business returned to pre-holiday levels. Actually, our February new business was incrementally stronger which is in line with our expectations and our typical fourth quarter pattern. While we remain optimistic, we're cognizant of the recent conflicting economic data points and the volatility that exists out in the world today. Assuming worldwide economic conditions, financial markets and foreign exchange rates remain steady, our consolidated Korn/Ferry adjusted fee revenue is likely to range from $385 million to $405 million. Our consolidated adjusted diluted earnings per share are likely to range from $0.50 to $0.58. This guidance includes approximately $115 million to $121 million of adjusted fee revenue for the legacy Hay Group operations, with an adjusted EBIDTA margin contribution of 12% to 13%, as the business continues to benefit from the previously discussed Q3 restructuring actions. When combined with our legacy Leadership & Talent Consulting business, the Q4 FY '16 adjusted EBIDTA margins are expected to range from 15.5% to 16%. Now, exiting the fourth quarter of FY '16, the Company expects to be realizing the full benefit of the Q3 FY '16 restructuring actions, at which point, the new Hay Group segment's adjusted EBIDTA margin is expected to be 16% to 17%. At the conclusion of the fourth quarter, we will have several more months of integration activity completed. In the fourth quarter in connection with these efforts, we expect to incur approximately $7 million to $9 million of additional integration charges, as well as $4 million of acquisition related retention payments. Going forward, visibility to legacy Hay Group results become more difficult and therefore, our guidance for future quarters beyond the fourth quarter will not include any separate data for the legacy Hay Group. The integration of the Hay Group is an ongoing effort and includes a consolidation of office space and the elimination of associated redundant general administrative expenses, the focus of which is to drive incremental savings. We expect the majority of these actions to take place in Q1 FY '17. In that quarter, we estimate the cost of these actions to be in the range of $20 million to $26 million, resulting in annualized run rate savings of approximately $17 million to $23 million, approximately $15 million to $20 million of which we expect to be realized by the new Hay Group segment. Finally, measured by U.S. GAAP, our FY '16 fourth quarter consolidated revenue is likely to be in the range of $382 million to $399 million and fully diluted earnings per share in the range of $0.11 to $0.26. Included in the fourth quarter GAAP EPS guidance is a negative impact of a non-cash write-down for our Venezuelan operations associated with the recently enacted devaluation of the Venezuelan Bolivar, and that's about a $9 million to $12 million charge for that. It's a non-cash charge by the way. So that concludes our prepared remarks. We would be glad to answer any questions you may have.

[Operator Instructions]. Our first question is from the line of Tim McHugh from William Blair & Company. Please go ahead.

Just first I want to ask on Hay, can you talk about I guess, the revenue trends, just the best you can tell them? How are they trying to strip through the constant currency impact? As well as what impact is some of the restructuring having on their revenue trends, as well as the macro, all those different factors?

We haven't really -- when we announced -- you're talking about the legacy Hay Group, Tim?

Yes.

Yes. So, on September 23 or 24, whenever we announced it, we said it was approximately a $500 million fee revenue business with a $40 million EBIDTA. Currency has now taken that business. Because remember, 80% of it was outside the United States. So currency had taken that business to about a $475 million, if we were dialing back to September. Instead of $40 million of EBIDTA, it would be actually like $37 million or $38 million with the currency, that's actually what it's running. Now, there is a bit of cyclicality. What we've seen in the legacy Hay Group business is that there would be a spike in their business in September, October time frame, November. So there is a little bit of a bias in their revenue when you go back and look months and months and months over years that there's a little bit of an upward trend, call it, fall, early winter on a calendar basis. So it's exactly what we thought. The great news is we've had a number of joint wins as a result of the combination. So, that's the real positive thing.

Okay. And then is it fair, the $100 million then, is the synergy target that you think you can get to now around $60 million? What does that imply about this Hay segment margin now? You used to talk about 15% to 18% for that segment. It's now higher.

Yes. So, the legacy Hay Group business, yes, there will be about $60 million of synergies when we're done in the summertime. So assuming that we're in this environment, right? That there's not a big tailwind behind us here or wind against us, so, we will have $60 million of synergies. It will turn out to be a $475 million, $500 million top line with $100 million of EBIDTA, phenomenal. In terms of the consolidated, the new Hay Group business, EBIDTA margin, we're targeting 17% to 18%. Now, we're going to make investments. This is a growth story. We're going to make investments into this economy.

And then just one on the macro. The financial services vertical, I know you said was flat in the quarter, just given the headlines in particular in Europe and the stock market, what are you hearing from your consultants there?

Look, I think there is some concern about financial services. When we look year-over-year there's growth in the business for us that was driven by asset management, wealth management, private equity. But, yes, we certainly are hearing some concern. The flipside of that will be the energy market which has been decimated. That will be probably be poised to turn around here. It may not be this quarter, but it will happen at some point.

Our next question is from Tobey Sommer from SunTrust. Please go ahead.

I wanted to ask you, what do you, in general, outside of financial services, to kind of dovetail on the last question, how did new business look in February? To the extent you have a sense for early March, in terms of the areas in which you're signing up longer term deals as well as the Executive Search? Thanks.

I would say February looked very good in North America. I mean, it looked very, very strong, whether it's the Futurestep business or our Executive Search business. Asia has obviously been challenged for sure. You can see that in the numbers. Europe was in line with my expectations. So, very positive in North America. South America, very challenged, obviously. Europe was good. Asia, challenged.

I would just add to that, again, with the impact of currency when you're comparing dollars it gets challenging at times, but if you look at it from a unit perspective, so the number of new search assignments signed up, February year-over-year growth was a strong 6%.

In the Futurestep business, could you describe the trends either in growth or maybe new business, if you break it down between RPO and mid-market search? I'm kind of curious in triangulating into the differences in how those two pieces are performing.

I think on the RPO side, the business from -- again, I'll do it from a unit perspective, is running at a clip of about 450 new searches a quarter. If you look at the month of February, for example, they did about 165 new engagements that month. So that business continues to hum pretty well. On the RPO side, we had a Board meeting yesterday and Byrne was going through his pipeline, it remains incredibly strong. I think that business continues to enjoy the fruits of their labor in terms of the past successes. They've got a demonstrated track record of delivering on the RPOs. I would say, both the single search and RPO business enjoys really strong pipelines and good new business wins. There's not one part of that business that is overshadowing the other in terms of the growth it's delivering. I think it's happening pretty equal across everything that Futurestep folks do.

In terms of the revenue mix there, what is the current mix? Does the pipeline as you see it of new business imply any kind of change in that mix?

Yes. I think the mix, Tobey, right now, it's about 60% comes from RPOs, 40% comes from single search. I don't see that changing dramatically.

Okay. And then I kind of wanted to ask, Gary, in terms of your investments for growth and the solutions in IP, how should we be thinking about that for milestones in progress and I would imagine that a medium to longer term pipe set of projects? Any kind of clarity you can give would be great.

As I sit here today, it's hard to believe I'm really saying this, but this is a multi billion-dollar opportunity. This intersection of business strategy and talent is what a CEO lives and breathes every day. So, this is an organization that creates real impact for our clients. So one of the things that we look at in terms of those milestones is really looking at repeatable clients of scale. So, looking at clients that would not be $2 million or $3 million, but looking at $25 million, $50 million. I think we've got to continue to orient the organization towards that mindset. That's certainly one KPI that we look to internally. I think the second thing that we would also look at is within our portfolio of $1.6 billion today, we have productized services business of about $250 million, those are different kinds of development of leadership assessment type tools that companies use to develop an entire workforce. Those have the tendency to change a lot of lives. Very scalable. Very sticky. So, I look at that and say, look, we need to triple that business, for many, many different reasons. So one of the yardsticks we would also look at is the productized services business and how we can really create greater impact and scale. I point to those two things, real significant, repeatable clients of scale which is one growth initiative. As we look at our top 100 clients, that's about, say, $250 million today out of the $1.6 billion. We're looking at that and saying, that should be $500 million. That should be true north. So we're probably going to put an Enterprise Solutions Group into this organization to think that way and secondly, is the productized services business.

Our next question is from Mark Marcon from RW Baird. Please go ahead.

A couple questions. First of all, with regards to the Hay legacy Group, Gary, you mentioned the $475 million to $500 million revenue run rate and the $100 million in EBIDTA. Can you talk about -- if some of the sensitivity that you're currently seeing in financial services and industrial kind of spills over to Hay, what could their number look like under that circumstance? What would the implication be for the EBIDTA? If things don't change, by what time frame would you expect to achieve that $100 million revenue run rate or $100 million EBIDTA run rate for Hay? Then I have got a follow-up.

Overall, financial services as a portfolio is about, call it, 15% of the portfolio. When you look at the Hay Group business, it's probably a little bit less than that, let's just say for sake of argument, it's in the 10% ballpark area. Overall, when we look at the LTC business, we believe that's a much less cyclical business than the search. So, in the great recession, the Hay Group business was down, call it, 20% in very dire, dire circumstances. You could triangulate, if you will, with financial services being 10% or less of their portfolio. In the worst environment since World War II, you saw a downdraft in their business of say, 20%. So, that's how I would triangulate that. The second part of your question about the EBIDTA, we're completely committed to substantially completing this unification in July of this calendar year. So, our expectation in the current environment that we're in is that we should start to see that run rate, $100 million of EBIDTA in August, September, October. It will start to come into fold here.

And then with regards to your opening comments, Gary, just in terms of changing the positioning of Korn/Ferry overall, where do you think you are with regards to the majority of the search consultants in terms of buying into that and really going out to market with that sort of philosophy?

If it's zero to 10, we're on 10. No question about that. I read to our Board yesterday a note that I got from one of our search colleagues describing a situation at a major life sciences company, in a room with a handful of representatives from the client and our side. We ended up -- his point to me was no other place could he have differentiated what he can do for an organization, Korn/Ferry. So I have no, no question in terms of that. We haven't lost people. We've attracted people. This is the platform. If you're in search, you need to be at Korn/Ferry. No question about that.

And then one last one, just life sciences, it's about a $100 million business. What are you targeting for that over the next couple of years?

Well, that's the healthcare business, Mark. Excluding life sciences, so the healthcare business -- that subset is $100 million of which $85 million is search, believe it or not. So we look at that and say, we need to triple that business. Just sitting here today, why wouldn't it be that, that would be 20% of this like it is in the economy of the United States? Major providers going through all sorts of change. It's all about talent. We think we can help those providers create greater impact for their patients and for their clients and customers.

Our next question is from George Tong from Piper Jaffray.

This is Adrian Paz on for George Tong. Can you discuss customer's feedback on the Hay Group acquisition? Discuss any early cross-selling traction and how you see cross-selling progressing?

I don't like the word cross-selling, that's not what we do. This is a strategy and organizational consulting firm. I will tell you that we have seen about $5 million to $7 million of new business wins in the first 100 days. The thing that's been surprising is the search wins, actually, that have come from our great colleagues in Hay Group. It's been interesting to see that in such a short amount of time.

Are customers requesting any bundling of legacy LTC products with the Hay Group services? Do you see that having any impact on pricing?

I hope we do that. We haven't gotten to that. That's absolutely one of our growth vectors. We do believe there's the opportunity to bundle together in an entire approach to talent management. As a CEO, if a provider came to me, I would love that. We haven't been able to do that to this point. I've challenged our teams that, that's what we actually need to be doing.

Thank you. There are no further questions in queue. Please continue.

Okay everybody, listen, thank you for the time. I know it's early on the East Coast, we're creating the preeminent strategy in organizational and talent consultancy. Korn/Ferry is well-positioned to make the intangible, tangible, helping our clients put the right talent in the right organizational setting, fully empowered and aligned to their business strategy and most important, producing superior business results. So, thank you for the time. We look forward to speaking to you next time. Bye, bye.

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