Korn Ferry

Ladies and gentlemen, thank you for standing by and welcome to the Korn Ferry second quarter fiscal year 2020 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 in 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 call over to our host, Mr. Gary Bernenson, let me first read a cautionary statement to the investors. Certain statements made on the call today, such as those relating to the 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 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. And in the periodic reports filed the company with the SEC, including the company's annual report for fiscal year 2019, also some of the comments today may reference non-GAAP financial measures such as constant currency amounts, EBITDA, and adjusted EBITDA. Additional information concerning these measures, including reconciliation to the most direct comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the investor relations section of the company's website at www.cornferry.com. With that, I will turn the call over to Mr. Bernenson. Please go ahead, Mr. Bernenson.

Okay, Cammie. Good afternoon, everybody, and season's greetings. Thank you for joining us. Clearly, this has been an eventful year for Corn Ferry. November 14th, about a month ago, we celebrated our 50th anniversary, and it really capped an unprecedented moment in our history as the preeminent global consulting firm. Fee revenue in the quarter was up 1% in constant currency. We had an adjusted EBITDA margin of almost 16%. And in the quarter, we continued to have a long-term balanced approach to capital deployment. We repurchased about $50 million of stock during the quarter in addition to our normal quarterly dividend. On November 1st, we completed the acquisitions of Miller-Hyman, Strategy Execution, and Achieve Forum. Historically, we've only focused on a 10% subset of the $300 billion market for learning and development. With these acquisitions, we've added professional development, upskill capabilities, and that combined with our current offerings in leadership development, that will leverage our digital platform, tapping a much bigger opportunity in learning development outsourcing. And the companies that have joined us now, they train more than 210,000 people a year. As I think about this calendar year and the past few years, the investments that we've made in our business and operations, including folding the firm under one brand with one unified team to handle all of our clients' needs. It's really set the foundation to accelerate our growth in the years ahead. The foundation for us and the foundation of our go-forward strategy is around our IP. Arguably, we have the most comprehensive organizational and people databases in the world. We have rewards data on more than 20 million professionals, more than 20,000 companies. We've conducted almost 70 million assessments. We have organizational benchmark data on 12,000 companies. We have 3,900 success profiles, 30,000 job titles. You know, we've got rich IP. And, you know, certainly last but not least, Every business hour, we put somebody in a job every three minutes. And so, you know, building on this IP and the investments that we've made, our growth levers going forward are really going to be anchored around six key activities. One is to continue to extend and reposition the Corn Fairy brand, a brand that's synonymous with enabling people and organizations to exceed their potentials. It's about creating opportunity for individuals and for companies. Secondly, we're going to continue the path that we've very systematically gone down around a pragmatic, programmatic, go-to-market strategy. We've made investments around account planning and account management talent, and at the end of the quarter, end of our second quarter, we had more than 300 people marquee and regional accounts, and those represented about 30% of the revenue, and our long-term goal is to have those represent 40, 45% of the portfolio. Three, we've got to create scalable, repeatable, outcome-based solution sets. Four, we have to monetize this fabulous IP that we have, and that's the whole thinking behind a new business that we're going to be breaking out separately this quarter, the third quarter, called KF Digital. We're going to continue to pursue strategic acquisitions. And finally, we will be the premier career destination in the consulting world. And so the integration of these acquisitions is well underway. We expect the Revenue from these acquisitions will add another $120 to $130 million of revenue. And combined with what was our legacy products business, initially creates a $400 million Corn Ferry digital business. We would expect that the adjusted EBITDA margin of the Corn Ferry digital business after synergies that Bob will talk about will be 27% to 30%. And as I said, in the current quarter, in our third quarter, we're going to begin breaking out digital in our segment reporting. And after synergies, we expect that this will contribute about $100 million of EBITDA, approximately a third of the company's annualized EBITDA run rate, or approximately 19%. of the company's annualized run rate net income. And that's obviously very meaningful because that revenue stream is durable. The IP changes a lot of people's lives, and it's really about knowledge transfer. You know, as we look ahead, I think one word sums up the current economic environment, and that would be confused. Part of this results from the sociopolitical climate, whether it's social unrest or inequality, elections, Brexit, trade skirmishes. We could go on and on. But the important thing is what do you do about it and how do you position your organization? And I think we've been very transparent over the last few quarters, and we've taken a number of steps that we feel are enable us to seize opportunity. Number one, we introduced this regional account program. Two, we've continued driving the marquee account program and the aggressive recruiting of account leaders. We talked about how we've been moderating headcount for some time. We've also shared with you our view around professional search and moving that more towards knowledge-based assignments. M&A, you know our track record there. I talked about the recent acquisitions we completed. And finally, we've laid plans here to monetize the Korn Ferry digital and technology platform that we're building. And, you know, in markets like these, it's great companies that make their best moves. And we indeed have a history of seeking opportunity in more turbulent times. And as such, we've evolved. We've evolved into a broad-based consulting firm, and our offerings span way more than talent acquisition to organizational advisory services, learning and development, assessment, succession, rewards and benefits, and more. So today, Korn Ferry is a much more diversified, balanced firm. Based on the year-to-date quarter results, quarter two year-to-date results, and the expected top line contribution from the recent learning development acquisitions that we just talked about. You know, we'd have about almost two-thirds of our revenue outside of our historical executive search business. That includes almost a billion dollars in revenue from four solution areas, org strategy, assessment succession, learning development, and rewards and benefits. So I believe that this diversification strategy is absolutely taking hold. And as we enter another new year, we're going to continue our strategic commitment to build the preeminent global organizational consultancy, helping our clients synchronize strategy operations and their talent to drive superior performance. That's what it's all about for us. So with that, I'm joined here with Bob and Paul. Greg, the vote, Chuck. And so, Bob, I'll turn it over to you.

Great. Thanks, Gary. And good afternoon, everyone. Financial results for the second quarter of fiscal 20 continue to highlight the strength of our business model and the impact that the diverse mix of products and solutions that we have really contributes to the growing durability of our revenue base. As Gary indicated, we're operating in a confused economic environment driven by a whole host of factors that which really accentuates the importance of our diversification strategy. Our consolidated fee revenue in the second quarter was $492.4 million, which was down less than 1% year-over-year at actual currency and up about 1% measured at constant currency. From a solution perspective at constant currency, RPO and ProSearch continue to accelerate with fee revenue growth of 20%. While our advisory segment was down 1%, exec search was down 3%. We continued to diligently manage our cost base, which resulted in adjusted EBITDA of approximately $78 million and an adjusted EBITDA margin of 15.9%. Turning to new business trends globally, new business in the second quarter for all of Korn Ferry was up about 11% over last year's second quarter. Demand for RPO and professional search services continues to be strong. Total new business awards of approximately $150 million in the quarter consisting of $32 million of new professional search assignments and $118 million of longer-term RPO contracts. Now, of the 118 of RPO contracts, Approximately $49 million are with new clients, or what we call new logos, and approximately $69 million of extensions and renewals with current clients. Second quarter RPO awards were broad-based geographically with strong growth in the U.S., the U.K., and China. At Constant Currency, our advisory new business was up about 1%. with particular strength in North America, which was up 5% year-over-year, and our exec search new business was down about 5% year-over-year. At the end of the second quarter, total cash and marketable securities were $609 million. That's up about $86 million compared to the second quarter of fiscal 19. Excluding amounts reserved for deferred comp arrangements and for accrued bonuses, our investable cash balance at the end of the second quarter was was about $346 million. That's up about $102 million year over year. We also had outstanding debt at the end of the second quarter of about $273 million. It should be noted that the second quarter ending cash balance and outstanding debt balance both include an incremental $50 million drawn on our revolver to finance a portion of the recent acquisitions that Gary spoke about. In addition to our recent acquisition investments and consistent with our philosophy to maintain a balanced approach to capital allocation in FY20 through the second quarter and including activity to date for the third quarter, we have now repurchased in open market transactions about 1.74 million shares using total cash of approximately $66 million. Currently, we have about $184 million remaining on our authorization for share repurchases. And last, on December 4th, the Board declared a $0.10 per share dividend payable on January 15th, 2020. Finally, adjusted diluted earnings per share in the second quarter were $0.81, down approximately $0.04 compared to the adjusted fully diluted earnings per share in the second quarter of fiscal 19th. And it's mainly driven by a higher effective tax rate in this year's second fiscal quarter, which is about 26.8%, compared to 23.8% in the second quarter of fiscal 19. I'm now going to turn the call over to Greg, who will review our operating segments in a little bit more detail. Okay, thanks, Bob.

Growth for RPO and professional search continued at a high double-digit pace in the second quarter of fiscal 20. In the second quarter, RPO and Professional Search generated $94.8 million of fee revenue, which was up 20% year-over-year measured at constant currency. All geographic regions grew in the second quarter. As Bob previously mentioned, in the second quarter, RPO and Professional Search's new business was strong, the second highest quarter ever. Earnings and profitability for RPO and Professional Search also grew in the second quarter. EBITDA was $16.1 million, up 2.9 million, or 22% year-over-year, and EBITDA margin improved year-over-year to 17%. Now turning to advisory. In the second quarter, global advisory fee revenue was $209.8 million, which was down 1% year-over-year measured at constant currency. In North America and Europe, advisory fee revenue grew modestly year-over-year at constant currency, but was down in both Asia Pacific and Latin America. In the second quarter, EBITDA for advisory was $36.9 million, which was with a 17.6% margin. Finally, for executive search, global fee revenue in the second quarter of fiscal 20 was $187.8 million, which compared year-over-year and measured at constant currency was down approximately 3%. The total number of dedicated executive search consultants worldwide at the end of the second quarter was 585, up 29 year-over-year, and up 16 sequentially. Annualized fee revenue production per consultant in the second quarter was $1.3 million, and the number of new search assignments open worldwide in the second quarter was 1,719, which was down approximately 2% year-over-year. EBITDA for executive search in the second quarter was $44 million, with an EBITDA margin of 23.4%. Now I'm going to turn the call back over to Bob to discuss the outlook for the third quarter fiscal 20.

Great. Thanks, Greg. As Gary talked about, starting in fiscal 20Q3, we're going to be modifying our segment reporting, and we'll be breaking what we call advisory today into two separate reporting segments, KF Consulting and KF Digital. The new KF Digital segment will include our legacy products, financial results, as well as the financial results of our recently acquired companies, Miller-Hyman Group, Achieve Forum, and Strategy Execution. Over the past 18 months, we've invested into our digital business to digitize and harmonize the structure of our IP content and data, and we are building a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consulting engagement. Now, these investments, when combined with the investments made in the recent acquisitions, they really provided us with the opportunity to step back and re-look at the advisory business and split it into our two new reporting segments. Further, as we recently announced, we implemented a restructuring plan to rationalize the company's cross-structure to realize the efficiencies and operational improvements that these investments have enabled us to or positioned us to realize. Now, the plan will impact the whole of our existing advisory reporting segment, and it includes the elimination of redundant positions and the consolidation of office space. As we previously announced, the costs associated with these actions are estimated to range from $20 to $26 million, primarily paid in cash, and we expect to recognize these charges beginning in Q3 of FY20 and expect to conclude the actions early in Q1 of FY21, with approximately $18 to $22 million of the charges recognized in Q3 of FY20. The annual cost savings in KF Digital associated with these actions is estimated to be $25 to $30 million. As Gary indicated earlier, at the conclusion of the plan, the new KF digital segment is expected to have a run rate adjusted EBITDA margin of 27% to 30% and a run rate operating margin of 23% to 26%. Now, from an overall Korn Ferry perspective, the acquisitions and the totality of the restructuring actions are expected to contribute significantly $35 to $40 million of incremental annual EBITDA, which translates to about $22 to $25 million of incremental annual net income, and about 40 to 45 cents of incremental annual EPS. Globally, in consolidation, our backlog of undelivered work entering the fiscal third quarter, which is typically a seasonally slower quarter for us, is pretty solid. For the month of October, Korn Ferry consolidated new business was up 10% at constant currency. However, in November, new business for the whole of Korn Ferry was down about 5% in constant currency. Now, considering these factors, assuming worldwide economic conditions, financial markets, foreign exchange rates stay as they are, we expect our consolidated fee revenue in the third quarter of fiscal 20 to range from $490 million to $510 million. Now, of that amount, we expect about $30 million to be coming from the recent acquisitions. Additionally, we expect our consolidated diluted earnings per share adjusted to exclude all the restructuring, integration, and acquisition charges to range from 70 to 78 cents. And finally, our diluted earnings per share for Q3 of FY20 measured on the U.S. GAAP are expected to range from $0.35 to $0.52 per share. That concludes our prepared remarks, and we'd be glad to answer any questions you have.

Ladies and gentlemen, if you wish to ask a question, please press 1 then 0 on your telephone. If you're using a speakerphone, please pick up the handset before pressing the numbers. Once again, if you have a question, you may press 1, then 0 at this time. Our first question is from Kevin McVey, Credit Suisse. Go ahead.

Kevin McVey Great. Thanks so much. Hey, thank you, folks. A lot of really, really good detail. Hey, Gary, you know, given the digital initiatives, I wonder if you can give us a sense of how that impacts the core business. And I guess what I mean is, you know, a lot of strategies today lever kind of the digital strategy to kind of reinvigorate or kind of enhance, not reinvigorate, but enhance kind of the core revenue stream of the business, in this case the search business. Any sense of, you know, the growth prospects for that business? And I guess I mean longer term, obviously, independent of kind of where we are given some of the macro uncertainty?

Well, you know, when you look at the trouble with any consulting business is a question of scale. And, you know, it's hard to scale people. And what we are doing here is creating a foundation where we can scale IP. And for any company, for any CEO, We would say that organizational performance is based on five things, leadership, strategy, purpose, accountability, and capability. The people equation and the organizational equation is absolutely paramount to a CEO's success. And so we've got IP that can help companies identify people and assess the right kind of people. We have IP they can use to design their organization. We have IP that can be used for learning and development. And we have IP that can be used for figuring out how to compensate a workforce. And so, as I said in my remarks, I really do believe that it's arguably the most comprehensive organizational and people database in the world. And so the question for us is how can we change more people's lives? How can we create greater impact? How can we do knowledge transfer? Because not every company wants armies of consultants around. So we've got IP that we think we can use for knowledge transfer to help an organization and its people exceed their potential. So I look at it from that lens and from the lens of scale. And initially we're going to start out here with a $400 million business that will throw off initially almost $100 million of EBITDA. And that business is more durable in many, many respects. How it impacts the search business is I fundamentally believe that that is a very precious business that we have. And I talk a lot about IP, but the fact that we put somebody in a job, you know, every three minutes is powerful and people return our calls. And so if we can give our company more reasons to dialogue with clients throughout the year, I think you're going to create a much more powerful organization. And I think it will, benefit the search part of the business. But when you look at the market opportunity for us, you know, it is, you know, it's arguably $200, $300 billion. And the executive search market is actually rather small. I don't think it's any more than $5 to $8 billion. It's very powerful. but it's not by any stretch of the imagination the big component of the market opportunity for us. And so we've seen a demonstrated track record of consultants throughout the organization referring engagements across solutions. So, for example, in this last quarter, when we look at the consulting business that we have today, 22% of it came from search partners. And I could go on and on. So I think we have a track record of delivering quality services and solutions that our client-facing colleagues actually take advantage of.

And, Kevin, this is Bob. I would just add one thing to what you said. Hey, how are you doing? You know, the other thing where I think the exec search business will benefit and, you know, be differentiated is that the intellectual property that Gary discussed, the data that we have that sits at the center of the organization gets fed into each of our solution areas, including ExecSearch. And so to the extent that what we have is unique and different, the ExecSearch community has the ability to integrate that into their offering and go to market in a differentiated way versus our competitors.

Our next question is from Mark McGrann from Baird. Please go ahead.

Good afternoon. First, when we take a look at the RPO and professional search, you're obviously doing tremendously well there. It seems to us like you're growing faster than the market. Can you talk a little bit about some of the key drivers that you're seeing there and how much of the growth would you attribute to the market relative to just your out-execution relative to others?

Yeah, I think we're out-executing. I would say, and Bob can add, I say that it's number one, the one corn ferry approach has worked. This last quarter, you know, it varies by quarter, but when you look at the referrals from, say, executive search, just take that lens for a second. Into RPO, it was 35%. Into professional search, it was 50%. So number one, that is absolutely working. But I think the biggest differentiator is what Bob talked about, which is the IP. And I think that's where we've done a good job of integrating the IP holistically through the organization. You know, I would absolutely say IP. I think we are then taking a one-firm approach. Then the quality of the work that we're doing, it's obviously phenomenal because you just don't – this kind of growth we're putting up here, you know, it is stellar. I mean, there's just no other way to describe it.

Yeah, listen, Mark, I would echo what Gary just said. If you think about our, you know, again, the IP at the center of the organization, you know, I grew up in a public accounting environment which had, you know, lines of business, audit tax consulting, IP rich, but the IP for tax was unique to tax, IP for audit was unique to audit, and so on. Ours is not. Ours is sort of ubiquitous across the whole of the organization. So everything... that sits in that center fueled by box, if you will, permeates all of our lines of business. And if you think about our RPO offering, they can bring into the offering successful profiles. They can bring into the offering interview questions. They can bring assessment protocol into their offering. They can bring in pay data into their offering. Other folks can't do that. And so I think that's why we're winning.

Next question is from the line of George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good morning, or good afternoon. The advisory business is splitting into KF Consulting and KF Digital. How would you distinguish the near and intermediate term growth prospects of both of those businesses separately, and what initiatives do you have to accelerate the growth of KF Consulting?

The KF consulting business, the real opportunity there is in the United States. And let me just provide a little bit of context. You know, we've been in business 50 years, and the search business in North America, call it roughly, you know, $400 million a year. The consulting business that we have, and it's been, you know – a lot less than 50 years and more like five, is already $200 million. But if you just think that you've got this search business that's 400 and you think about the market opportunity there, then the enormous market opportunity in consulting around organizational strategy, around change management, around M&A, that is multiples. And so I look at that and say, number one, that is very tangible, very practical, and not that the entire world isn't important because it is, but in the last, not the last acquisition, but the acquisition we did three years ago with the Hay Group, 80% of the assets were outside the U.S. So that's That's really why I'm highlighting the United States, because it is a big market, and the business right now there is a couple hundred million dollars annually. What we can do to accelerate that market is to, number one, be relentless around these marquee and regional accounts, put account teams against them, be proactive in selecting them, and, you know, having a long game in mind. Secondly, we have to bring in account leaders. You know, third, we have to aggressively recruit and promote consultants into that organization. And I think we also need to move the business over time to bigger engagements because, you know, Where you're going is one thing, but you also have to look at where you've come from. And where we came from in that business through inorganic and organic means, a lot of it has been anchored around individual transactions, smaller ticket sizes around assessment and succession, leadership development. And so we have to move that business towards, you know, bigger, more impactful engagements, sizable engagements that have to be anchored around business outcomes, which one where we're having quite a bit of success is M&A. Another one is culture change. So those are the things we have to do on the consulting business. On the digital business, you also have to recognize where we came from. And we came from books and placemats, and we've got to go analog to digital. So we're putting in the business, Bob can tell you the exact amounts, probably five or six million bucks a quarter into the underlying platform. And I think we have to continue to do that. because that will be the differentiator. Our IP is world-class. We know what separates great from good. The other part of that is in the learning development outsourcing. I think we can create a business much like we did with RPO around LDO, learning development outsourcing. And finally, I'd say the other thing is that With that digital business, a lot of the work that we've done up to this point has focused on the top 10% or so of a company. That's not always true, but it's more true than not. Well, the reality is there are many, many, many others in an organization. I think that through these last three acquisitions we've done, we've got a real focus on scale. And how can we create platforms where companies can license RIP to touch thousands of people's lives?

Our next question is from the line of Mark Riddick with Siddhoti. Please go ahead.

Hi, good evening. Good evening. We wanted to... Good evening. I wanted to touch on sort of now with the – and we're certainly looking forward to making this part of the recording and having access to that information going forward as you go through this part of the journey. But I wanted to sort of discuss where this puts you on your thoughts on M&A going forward and the prioritization that you currently have when you look at the overall – Does this put you on the sidelines for a little while, or how should we think about that going forward?

Well, we're never on the sidelines, but the question is, do we actually throw the ball? And so we're very much always in the market. And so what I can't answer is whether we're actually going to pull the trigger on something. because that depends on a whole host. But clearly, you've got an enormous market opportunity, very fragmented market. I don't think there's one consultancy that's solely focused on an organization, its strategy, and its people, and how you synchronize that. So when you look out, you have to believe that the core party is going to continue to not only grow organically, but has to make meaningful investments and acquisitions. We're always on the field. We're never on the sidelines. I think this integration here will be done rather quickly. We've already taken a number of steps, even though it just closed November 1st. I'm not concerned about our capability to digest something. We're always on the field. We're also very, very pragmatic and systematic about how we go about this. We're disciplined. We're price disciplined. We're culture disciplined. We'll continue to be that way. We're also mindful that the capital has an implied cost. And we have to be beating that cost of capital.

Yeah, Mark, this is Bob. So if you think about, go back to when we did the Hay Group transaction in December of 15, that one, at the time, we were about a billion dollars. They were half a billion. So it was kind of a big bite. And we digested that over, say, 18 months. This transaction, obviously, we're close to $2 billion, $120 billion, $130 billion of revenue. We fully expect to be integrated sort of beginning of next fiscal year, so much quicker than what we saw with the Hay Group.

And we have a question coming from the line of Mark. Mark Hahn from Baird. Please go ahead.

Okay. Good afternoon. Can you talk a little bit more about Miller-Hyman and what it specifically will be adding when we think about the $120 million to $130 million in revenue, what the margin profile is? if we could disaggregate what the contribution there is going to be relative to some of the restructuring efforts that you're going to put in place in terms of what that contribution would be. Just a lot to unpack there.

Let me hopefully provide a little bit of context, and Bob, you can maybe talk about the margins and the like. We would expect, based on... the current environment as we see it today, that we would have a $400 million corporate digital business. When you break that down, about $100 million of it would be around rewards, where companies license our data. $120 million would be around assessment succession. 60 million would be around org strategy. They're licensing our IP to set up an organization. Spans and layers, job profiles, all of that. The final piece is 120 million around learning development. And that is principally anchored around the professional and below level. And so the Miller-Hyman piece... comes in to that $120 million. And I'm not going to break out the exact size of that yet because it's just too soon, but it's certainly more than 50% of the $120 million. What it does for us is that in any kind of environment, a CEO will always be looking for at the way that they're selling. And what Miller Hyman gives for us is rich IP and great people around how a company can drive growth. And in turbulent times, it's actually even more important than when the wind's behind your back. So it gives us the ability to do sales performance. It also fits very, very nicely with our business because we place many, you know, hundreds if not thousands of sales professionals. And so there is synergy there with parts of our talent acquisition business. So that's how I would set the context around the $400 million we would expect after we do the synergies, that that would essentially be today's environment, run rate of 100 million bucks, something like that.

Yeah, and Mark, I would also add, I would encourage you not to look at it as sort of individual pieces. I use an analogy I used when we did the Hay Group transaction. When we integrate these businesses, we do it as quickly as possible. And, you know, it's like creating a milkshake. Once you hit blend, you can't pull it apart, right? And I'll tell you, at, you know, 12.01 a.m. November 1st, you know, Gary hit blend. And we're working, you know, as hard as we can to not only to integrate the back offices, but to integrate the go-to-market activities. And we're folding these businesses into, you know, the one corner for every model. So we don't even think about them as individual businesses any longer. So I think if you step back, what we bought, probably mid-single-digit EBITDA margins, and when we get through everything that we're doing, it's guaranteed 27% to 30% EBITDA margins on sort of the digital milkshake, if you will.

That's great. And what about the KF consulting, the traditional consulting? How should we think about that?

Yeah, I think some of the actions we're taking, Mark, impact that business. And, again, when we get through all of this, you should be thinking about EBITDA margins in the, say, the 12% to 15% range for that business.

Great. Thank you.

Next question is from Mark Riddick with Sidoti. Please go ahead.

Hey there again. I did just want to ask a follow-up as to, I know it's been a fairly short period of time, but I was wondering if there was any feedback that you've received from some of the marquee clients that you deal with and what their receptivity was to where you're from the transaction and some of the opportunities that you see as far as the feedback you've received from them as well.

Thank you. Yeah, we already secured a million and a half dollar deal, actually a win together. And, again, as Bob said, it's hard to, you know, if you focus on one, you know, again, the other two companies that we bought have tremendous capability and tremendous people, particularly around professional development, broad-based professional development. You know, Miller-Hyman, you know, it's a brand that is very, very, very well-known. And so we have gotten positive feedback, not only actually from clients, but from many consultants in our own organization that have gone through Miller-Hyman training. And, in fact, we're going to use it like we do with all of our IP on ourselves. So the feedback has been good, and we have absolutely incorporated their team's into the marquee and regional account program.

All right. The next question is from Mark McRon from Baird. Please go ahead.

Hey, Gary. We've been through multiple cycles together. You've got tremendous perspective in terms of talking to global leaders all around the globe. From your perspective and where you're sitting, and obviously there's lots of different opinions out there, but from where you're sitting, do you think things from a macro perspective feel the same, better, or worse today than they did, say, three months ago?

I think the ADP report on the job market was more right than wrong. and I think there is more cautiousness now on the part of CEOs than there was three months ago. And whether you put that on the December 12th election in Britain, whether you put it on all the other things that are happening, but I would say there's certainly more caution today than there was three months ago.

Thank you.

It appears there are no further questions in the queue right now, Mr. Bernenson.

Okay. Thank you. You know, for any company, you know, successful strategy implementation is about execution, and that's about, you know, getting the people and the organizational and the cultural aspects right. And that's, you know, that's what we do. We're more than talent acquisition, more than leadership development, more than rewards. You know, we focus on making change happen, and we're going to make change happen in 2020. So have a great holiday season, and we'll talk to you, if not sooner, in the new calendar year. Thank you very much. Bye-bye.

Ladies and gentlemen, this conference call will be available for replay for one week starting today at 7.30 p.m. Eastern Time, running through December 12th, ending at midnight. You may access the AT&T Executive Playback Service by dialing 866-207-1041 and entering the access code 954-3885. International participants may dial 402-970-0847. Additionally, the replay will be available for playback at the company's website, www.at&t.gov. cornferry.com in the investor relations section. That does conclude your conference for today. You may now disconnect.