Jobless recovery brings hope of further gains to recruiter.KORN/Ferry International shareholders aren't had much to celebrate over the last two years. First, the recruiting giant went through a wrenching restructuring after getting hit by both the jobs recession and the dot-com bust Refers to the years 2000 to 2002, when the bottom fell out of the dot-com industry and hundreds of dot-com companies went bankrupt. All the rest lost a huge amount, if not almost all, of their stock valuation. See dot-com bubble. . Then, it found itself averting a·vert tr.v. a·vert·ed, a·vert·ing, a·verts 1. To turn away: avert one's eyes. 2. a liquidity crisis. But recently, the company's shares have hit new highs on encouraging news for the recruitment sector. Shares in Los Angeles-based Korn/Ferry reached a 52-week high of $12.50 on Dec. 16, more than double its 52-week low of $5.59 reached Feb. 13. At a closing price of $12.38 on Dec. 17. Korn/Ferry's shares were up 65.5 percent year to date. The gains followed Korn/Ferry's announcement on Dec. 10 of its first profitable quarter in more than two years. It reported net income of $2.2 million for the second quarter ended Oct. 31, compared with a net loss of $18 million loss for the like period a year earlier. Founded in 1969 as a two-man shop, Korn/Ferry became the nation's largest executive recruiter, in terms of revenues, by creating practices for specific industries. In 1998, it began moving downmarket, launching an online recruiting division called FutureStep that targeted middle managers. It expanded into college recruiting two years later by acquiring another online recruiter, JobDirect.com. With costs from these ventures and a recession cutting into fees from its historical recruitment business, Korn/Ferry ran up a string of nine unprofitable quarters. To turn things around, it shut down JobDirect, then turned FutureStep--then losing $1 million a month--from a dot-com to a more conventional recruiter. It began focusing on large-scale hiring projects, such as a contract it signed with the Securities and Exchange Commission in October to recruit 80 new accountants. Korn/Ferry also halved halve tr.v. halved, halv·ing, halves 1. To divide (something) into two equal portions or parts. 2. To lessen or reduce by half: halved the recipe to serve two. 3. its workforce to 1,400, jettisoning top executives such as James Boone, president of the Americas and its chief financial officer. It took other cost-saving measures, such as eliminating two of its three e-mail systems and subletting The leasing of part or all of the property held by a tenant, as opposed to a landlord, during a portion of his or her unexpired balance of the term of occupancy. A landlord may prohibit a tenant from subletting the leased premises without the land-lord's permission by more than 400,000 square feet of excess office space. "We were cutting costs before anyone else and we got criticized for it," said Korn/Ferry Chief Executive Paul Reilly Paul Reilly (born May 10 1976 in Huddersfield, England) is a rugby league player who plays for the Huddersfield Giants. He plays in the full back position. He was born and bred in Huddersfield and has played for the club for 10 years. . "But now we're in position for growth while everyone else is still cutting." Rough landing Reilly found himself in cost-cutting mode upon joining the firm in June 2001 after running accounting giant KPMG's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . More than a year later, he had to seek a rescue after the company breached covenants on its $100 million line of credit. It found a white knight White Knight falls off his horse every time it stops. [Br. Lit.: Lewis Carroll Through the Looking-Glass] See : Awkwardness White Knight invents clever objects that never work. [Br. Lit. in private equity firm Friedman Fleischer & Lowe, which bought a $50 million package of debt and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. convertible to an 11 percent stake. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. its SEC filings, Friedman Fleischer hasn't yet converted any of the shares. From here, Korn/Ferry is betting on corporate expansion in sectors such as financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and tech, as well as replacement of positions that went unfilled during the recession. In the last six months, the company picked up 31 new "senior client partners," including Amy De Rahm, a financial recruiting specialist it lured from rival Spencer Stuart. The company is also looking to expand its presence in Europe, where it gets 23 percent of its recruiting revenues. Reilly spent part of last week in Frankfurt, Germany looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. new recruiters. But many parts of the European market are still reeling reel·ing n. Maine Sustained noise, as from hammering: "Hark that reeling, now, you'll wake the baby!" Anonymous. from recession. Germany has seen a string of bankruptcies, including the collapse of the aviation outfit Fairchild Dornier. Another cloud is an economic recovery that has been short on job growth, leaving Korn/Ferry and its rivals, including Spencer Stuart and Hedrick & Struggles, fighting it out with boutiques and one-man shops. There's word that some recruiters are cutting their employer-paid fee. normally about 33 percent of a new hire's total compensation package, to 25 percent and lower in some cases. "A guy working out of his home can cut his fees more than a Korn/Ferry could ever possibly do," said Ron Anderson Ron Anderson could mean any of the following people:
Reilly said Korn/Ferry hasn't cut its fees to lure new business, although its lee revenue has been on a downward trend. Revenues for the third quarter were $82 million, down 4.3 percent versus the like year-earlier period. He attributes the decrease to the company's smaller size after the restructuring. Korn/Ferry International [GRAPHIC OMITTED] YEAR (April 30) 2003 2002 Revenues (millions) $338.5 $406.7 Total Expenses (millions) 351.7 512.4 Operating Loss (millions) (13.3) (105.6) Net Loss (millions) (22.9) (98.3) Loss Per Share ($0.63) ($2.62) [GRAPHIC OMITTED] SUMMARY Business: Recruiting Headquarters: Loa Angeles CEO: Paul Reilly Market Cap: $465.7 million Total Liabilities: $178.8 million Long-Term Debt: $24.9 million Dividend Yield: N/A * P/E Ratio: N/A ** * Company does not pay a dividend. ** Company is not profitable |
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