This time last year, the executive search business went into a tailspin. In fact, according to a survey from the Association of Executive Search Consultants, the industry fell close to 50%.
The carnage is has even impacted the top firms in the industry, like Korn/Ferry International (NYSE: KFY). In the company's fiscal Q1 earnings report, revenues fell by a steep 43% to $123.3 million. There was also a loss of $14.3 million, or $0.33 per share. This compares to a gain of $15.9 million, or $0.36 per share in the same period a year ago.
Despite all this, the results were still encouraging. That is, they were not as bad as the Street thought they would be.
What's more, Korn Ferry has been extremely disciplined, gutting about $300 million from its cost structure. As a result, the company has continued to pump out cash flow and has about $266 million in the bank.
Actually, with its solid balance sheet, Korn/Ferry has been able to make selective acquisitions, such as for Whitehead Mann. The deal will provide a strong platform in Europe and a top-notch client base (with 90 of Europe's 200 companies).
It's during recessions that top companies like Korn/Ferry can build on its advantages. And, by all accounts, that's what the company has been doing skillfully.
On news of the earnings report, Korn/Ferry's shares increased 7.4% to $14.31.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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