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Korn Ferry
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Ladies and gentlemen, thank you for standing by. And welcome to the Korn Ferry Second Quarter Fiscal Year 2019 Conference Call. At this time, all participants are in a listen-only mode. Following the 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 Web site at 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 in the periodic reports filed by the company with the SEC, including the company's annual report for the fiscal year 2018.
Also, some of the comments today may reference non-GAAP financial measures such as adjusted fee revenue, 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 earnings release relating to this call, both of which are posted in the Investor Relations section of the company's Web site at www.kornferry.com.
With that, I will turn the call over to Mr. Burnison. Please go ahead.
Okay. Thanks John. Season greetings to everybody. Thank you for joining us. And certainly at this special time of the year, but particularly for Korn Ferry, we achieved the best top line and bottom line results in our history to say that I'm proud of our performance is an understatement.
Growth in constant currency was up about 15% pretty balanced all geographies, industries were up. Advisory which was great to see was up 12%, products were up 11%, profits were extraordinary, adjusted EBITDA was $80 million and the margin -- adjusted EBITDA margin was 16%. For any CEO leading a company today, it's not just about strategy but its about how you synchronize that strategy with your organization and your talent and that's exactly the company that we are creating, a company that is clearly the pre-eminent global organizational consulting firm, a company that has real impact in the world and if you take a look at the data and the foundation that we have built to truly have impact in the world, it's impressive when you consider that a 1.2 million people a year take part in our leadership development program. We have engagement reward and management data on 25 million professionals at 25,000 companies, 120 million data points on global professionals, organizational benchmarking data on 2500 organizations. I mean clearly Korn Ferry has this unique ability to be able to synchronize strategy and talent for clients and it's all built on IP. So I'm very, very proud of what we have achieved, but equally I'm very optimistic about the future for us.
New business has been very good. Gregg and Bob are with me they'll talk about that October, I think was our best month of new business in the company's history. We're going to continue to execute on our strategy of driving and integrating go-to-market strategy. We're going to continue to take IP and data and infuse it into the foundation of the house that we're building. What we're doing around the brand, we're going to continue to push to make this brand synonymous with driving superior performance for our clients by combining talent and strategy.
We're also going to continue pragmatic M&A effort. And we also have to innovate and one example is a new offering that we've got. It's in the B2C area subscription based offering for professionals called KF Advance. It's like a gym membership but to get careers in shape where people can go for coaching and guidance and tools to help them with their career we've seen some very, very good traction in that and hope to see more in 2019.
Before I turn the call over to Bob and Gregg, I wanted to share some real exciting news related to our Board. Christina Gold who's been appointed to the position of Non-Executive Chair that's going to be effective January 1. That's part of a planned succession. She's going to succeed George Shaheen. And George is just has had an incredible impact on our company, for our management team in terms of mentorship and he's going to continue to do so and he is going to serve through the 2019 stockholders meeting. So with that, Bob Rozek and Gregg Kvochak here. Bob, I turn it over to you.
Great. Thanks Gary and good morning everybody. Before I get into my highlights I guess there's three sound bites as I look at the quarter that I'm focused on. One, obviously, record revenue across each line of business. We had record profitability as a company with our earnings growth outpacing our revenue growth and we had record new business in executive search and advisory with also very strong new business in IPO and professional search. So with those three sound bites it was a very, very good quarter for Korn Ferry.
Our financial results continue to accelerate highlighting both the continued momentum of our integrated solution base go-to-market approach and the power of our brand. In the second quarter, we achieved record highs in revenue earnings and profitability. Global fee revenue reached $495 million, which was up 12% year-over-year at actual exchange rate and nearly 15% at constant currency. And this marks the fifth consecutive quarter in which we achieved double-digit revenue growth.
Once again our growth was broad based with each of our operating segments benefiting from synergies across our core and integrated solution offerings. At constant currency RPO and professional search grew 25%. Executive search grew 14% and revenue growth for advisory was nearly 12% and $217 million our Q2 advisory revenue was an all time high.
Earnings and profitability, obviously, kept pace and exceeded revenue growth in the second quarter also reaching new record highs. Adjusted EBITDA was 80.3, which is an improvement of almost $10 million or 14% year-over-year, while our adjusted EBITDA margin improved 30 basis points to a new high of 16.2%. And consistent with our policy to maintain a balanced approach to capital allocation in the second quarter, we repurchased approximately 446,000 shares of stock spending about $22 million and our Board just approved the declaration of a quarterly dividend of $0.10 per share.
Okay. Turning to new business trends, first, for executive search, we saw sustained high double-digit growth in the second quarter. Globally executive search new business was approximately $210 million; it's up 15% year-over-year driven by strong growth in North America, Europe and Asia Pac and advisory global new business in the second quarter, again, was an all time high at $233 million that's up 8% year-over-year.
Finally RPO and professional search achieved another quarter of strong new business totaling $73 million and that consist of $41 million of long-term RPO awards and $32 million of professional search. At the end of the second quarter, our total cash and marketable securities were $523 million, it's up about $109 million compared to the second quarter of fiscal '18. And then excluding amounts reserved for deferred comp and accrued bonuses, our investable cash balance at the end of the second quarter was about $244 million and that's up approximately $59 million year-over-year and at the end of the quarter our outstanding debt balance was about $225 million.
Last adjusted fully diluted earnings per share in the second quarter were a record $0.85, it's up $0.18 or 27% compared to Q2 of last year. And on a GAAP basis which includes the last full quarter of amortization of the retention bonuses related to Hay Group acquisition fully diluted earnings per share were $0.81.
Gregg let's go through some of the operating segments in detail.
Thanks Bob.
Okay. Growth for our Executive Search segment remains strong in the second quarter as global revenue reached $198 million, a new all time high. Compared to year-over-year and measured actual exchange rate, global executive search fee revenue grew $20.9 million or 11.8% in the second quarter and 14.1% measured at constant currency. Consistent with recent trends, growth for our executive search segment remains broad based with each of our geographic regions posting strong gains.
At constant currency North America was up 14%, Europe was up 11%, Asia Pacific was up 12% and Latin America was up 31%. By industry specialty practice growth was also broad based compared to the second quarter a year ago at actual exchange rates our financial services practice was up 5%, our industrial practice was up 7%, our life sciences and healthcare practice was up 4% and we achieved double- digit growth in our consumer goods and technology practices which were up 14% and 33% respectively.
The total number of dedicated executive search consultants worldwide at the end of the second quarter was 556 up 18 year-over-year and up 11 sequentially. Annualized fee revenue production per consultant in the second quarter improved to $1.44 million and the number of new search assignments opened worldwide in the second quarter was 1,757 which was up approximately 11% year-over-year.
Adjusted EBITDA for executive search in the second quarter was $49.2 million up $11.2 million or 29% year-over-year. The consolidated adjusted EBITDA margin for executive search in the second quarter of fiscal '19 was 24.9% compared to 21.5% in the second quarter fiscal '18.
Now turning to advisory, in the second quarter global advisory fee revenue also reached a new all time high of $217 million which was up year-over-year by 8.6% or 11.8% measured at constant currency. All geographic regions achieved growth in the second quarter led by Europe and Asia Pacific, which both grew at a double- digit pace.
As previously mentioned global new business awards for the advisory segment in the second quarter were up approximately 8% measured year-over- year. Growth in earnings and profitability for advisory in the second quarter were in line with fee revenue growth. In the second quarter, adjusted EBITDA was $39.4 million an improvement of $2.6 million or 7% year-over-year with an adjusted EBITDA margin of 18.2%.
Finally, turning to RPO and professional search, when the second quarter growth continued at a high double-digit pace, the RPO and professional search segment generated $80.5 million of fee revenue in the second quarter, which was up 21.4% year-over-year actual rates and up 24.5% at constant currency. All geographic regions grew double digits in the second quarter led by North America and Europe which were up 29% and 25% respectively.
As previously mentioned new business was also strong for the RPO and professional search segment in the second quarter with awards totaling $73 million consisting of $41 million of larger long-term RPO assignments and $32 million a smaller shorter term professional search assignments.
Earnings also improved in the second quarter for the RPO and professional search segment with record EBITDA of $13.2 million and an EBITDA margin of 16.4% which were both up year-over-year.
I will turn the call back over to Bob to discuss our outlook for the third quarter fiscal '19.
Great. Thanks Gregg. New business awards in October exiting our fiscal second quarter were very strong compared to the prior year in new business awards in November, which began our fiscal third quarter continues to be strong measured year-over-year. For Executive Search global new business awards in the month of October and November were up year-over-year at 30% and almost 10% respectively.
The fiscal third quarter is typically a seasonally slower quarter due to less working days resulting from the year end holidays. And if monthly new business patterns are consistent with prior years, we expect December awards to be down sequentially relative to November and then to rebound in peak to a quarter high in January.
For advisory, the third quarter is also typically seasonally weaker for new business and revenue due to the same less working days resulting from year-end holidays. Exiting the second quarter and beginning the third quarter advisory monthly new business trends have been strong with record new business in the quarter in November new business continued with that year-over-year growth. Like executive search, we expect December new business for advisory to be slower and then peak to a quarter high in January.
With regards to our RPO and professional search, business under contract in the pipeline of potential new business opportunities continues to remain strong and we expect both will continue to drive growth in the third quarter.
Considering all of these factors assuming worldwide economic conditions, financial markets, foreign exchange rates remain steady and assuming a 25% to 26% effective tax rate for the quarter. We expect our consolidated fee revenue in the third quarter of fiscal '19 to range from $470 million to $490 million and we expect our consolidated adjusted diluted earnings per share to range from $0.77 to $0.85.
And then, finally in the third quarter we will expense the last remaining month of the Hay Group retention bonuses which will impact earnings in the third quarter by about $1 million. Considering this, we estimate that fiscal '19 third quarter fully diluted earnings per share measured under U.S. GAAP will likely be in the range of $0.76 to $0.84. That concludes our prepared remarks and we'll be glad to answer questions that any one has.
[Operator Instructions] Our first question from line of Tim McHugh with William Blair. Please go ahead.
Good morning. It's actually Trevor Romeo in for Tim today. Thanks for taking the call. Just wanted to touch on advisory a bit more. I think you mentioned that EMEA and Asia were up double digits for advisory, but how's the growth in the U.S. in the quarter and also are there any particular types of consulting projects that are strong right now?
Couple of things, I mean I think one to set the context, we are very much repositioning the business. And if you look at it today about 40% or so of the new engagement are over $500,000. And so what we built and what we bought were much smaller, less impactful size engagements.
And so we're moving the entire organization towards more of a business outcome solution focus because for any CEO, it's about how you synchronize your strategy with your talent. So there a major shift going on. And one of the things that I point to that's giving me great hope is the migration of the business to bigger more impactful solutions based engagement. So that's number one.
The second is, the last acquisition that we did which is actually we did three years ago almost to the day about three days ago. And that's been enormously transformative for Korn Ferry. When you look at that acquisition, the people, the IP that we picked up it was largely outside the United States. And so 80% of the assets were in essence outside the U.S. And when you look at the growth in this quarter is no exception.
EMEA and Asia-Pacific advisory were just off the charts, I mean Asia Pacific advisory this quarter was like 34% constant currency. So that's good.
When you look at the U.S. and you look over the last couple of quarters what you're going to see is a very, very positive trend. So increasing levels of new business and increasing growth. So for the quarter, the U.S. consulting business was up 8%. So the trend lines pointing the right way but the bigger story is the actual changes to the business.
Yes. And Trevor this is Bob. The other thing I would add to the point Gary is making in terms of the migration of the business. We're also migrating our products business from selling a sort of what I would call a static file to more of a subscription base. So we used to sell the static file book revenue on day one and that was it. Now it is a subscription model. It's more like sort of software as a service, so we're getting -- we're not getting the day one revenue that we did under a static sale. But we are getting subscription revenue which comes in over a one, two or three year period which is a much more favorable model to be on there.
Okay, great. Thanks. That's very helpful. And then, just one follow-up, how do you think about headcount growth going forward between search and advisory segments and do you see any risk of higher turnover in advisory since the Hay Group retention program is ending so soon?
This is a professional services firm. This is a consulting firm. We have almost 10,000 people when you include the part-time folks that we have. And so with any professional services firm, you're going to see classic [indiscernible] model and corresponding levels of turnover, but we don't guide out in terms of headcount. I will tell you that we are very, very aggressive in the marketplace looking for talent right now.
Okay, great. Thank you very much.
Our next question is from Tobey Sommer with SunTrust. Please go ahead.
Thanks. If I can start maybe with the RPO business. What is the pipeline look like, I can recall a few quarters ago, you cited some very large deals that will be folded into the business. Just kind of curious about the pipeline and in particular the presence of those mega deal opportunities.
Yes. Bob, you can talk about the numbers, but I would say that there are a handful of really large engagements that are currently being implemented. And I would say for those four or five that are global deals, big impact deals and we're talking hiring thousands of people a year for branded organizations. I would say with those we're probably in the third or fourth inning in terms of implementing. So that's extremely positive.
And at the same time, we're pursuing I can think of 10 to 20, I wouldn't call the mega deals, but several million dollars a year engagements across different industries. So Bob on the…
Our pipeline Tobey and I feel right now is somewhere between $260 million and $270 million of contract awards.
Perfect. From a competitive positioning standpoint, is the company in the RPO business able to bid on just about any size of any geography at this point or are there still things you need to do to open up and increase the addressable market?
Yes. Now we still need to add some -- we can add some resources particularly in pockets of Asia, which we're looking to do. But obviously, the business has pretty nice impact and reach. It's a business that's grown 25% or so quarter-on-quarter for several quarters. I mean it's been impressive and the quality is what I'm more proud of than anything.
Okay. With respect to the product business group, I guess just about in line with advisory as a whole. Bob referenced transformation to subscription business model. Are you just checking in on when you think we'll see demonstrably kind of faster growth in the whole. Is that still two three quarters away?
Yes. I said last quarter that I thought it was three to four quarters. I'm going to stick with that. There's really two aspects to what we're doing. One is what Bob referenced, which is building the platform. So building a platform that companies can use to hire to SaaS, to compensate, to develop to empower inspire their employee base. And so that's one aspect of it that we're working on very, very hard and what we're doing is taking all the data that we have is -- which I think is unprecedented.
We develop a 1.2 million people a year. We've got data points on 25,000 organizations, 25 million people, the IP is pretty rich. So we're trying to take that IP and put it in as Bob said into software as a service platform what we would call talent hub that we can license. So that's one aspect. One strategic aspect.
The second strategic aspect is the commercialization. And so building the sales force, helping to integrate that with the broader Korn Ferry platform. Because remember I mean no product should drive services and services should drive products. So that that's where we are.
Yes. And Tobey, the other thing I would add to that too is, if you step back and look at across our solutions sets we have what we call the pay hub, which obviously is the rewards and benefit solution, we have talent hub, which really underlies the sort of assessment and succession solution. And what we're focused on now is building our products in talent acquisition. So Gary referenced [indiscernible] we have what we call talent direct which is the technology piece that goes into our RPO engagements using that as more of a standalone product. Looking at leadership development to build a product platform there. So we've got enormous opportunity, but some with the job to get there.
Okay. With respect to new business trends since the quarter you said October was, I think is a great month maybe the best in a while. Has the market volatility but in anything what you hear in terms of your customer conversations?
No. Obviously, the Dow is down 800 points right now. So the last three or four days have been extremely volatile. But, no, October was absolutely the best month for new business in the company's history. November was right in line with what we would expect. November and December you're going to lose. I mean we're going to lose probably 12 or 13 days of consulting time because of the holidays and the rest. But hopefully all of our colleagues can take. So now we haven't seen any -- nothing in the data.
Perfect. Just two last questions for me. If you could comment about pricing in the business in which segments are kind of seeing the most benefit from price currently? And then, maybe add your opinion about which one -- which segment has the most opportunity going forward in terms of pricing?
I think that to the extent that we continue to move this organization towards solutions rather than vitamins that the impact and the value will be reflected in the price. So that's how I would look at it. You look at the company today essentially 55% of it is talent acquisition, 45% is advisory. And so, we've clearly been moving the organization on the advisory side to have more impactful engagements. And so I would hope that over time the pricing follows the impact and the value that we deliver to the clients.
And Gary, you mentioned that ROIC improved substantially. Are you any closer to having some goals that you can share with us over time because that is part of the improvement recently I think was probably the brand actually was probably due to contributor, so what kind of operational improvements we might be able to look for going forward?
Yes. It was a contributor not the overwhelming contributor, but it was a contributor. So the ROIC was 12.5%. I'd like to see that 14.5%, 15% plus and that's what we're sticking to.
Thank you.
Our next question is from Mark Marcon with R.W. Baird. Please go ahead.
Good morning. And I just want to start off by just saying to the extent that George Shaheen is listening, congratulations to him. For those who aren't familiar with what Boards do, Korn sports really been heavily involved and George is clearly a big contributor over the years. So on that Gary, any anticipation of any change with regards to Christina's leadership on the board now.
No. And I'll echo what you say about George. He's a legend not only in his own mind, but lots people's minds and professional services firms. And Christina is equally talented. We have a great Board. And the reality is, we all age and we have a retirement age as a Board unfortunately. And for George was coming up on that date and so the Board gratefully said hey, let's do this the right way. What we would advise clients to do and so Christina is outstanding, I've got a great relationship with her as does the management team. She's been a CEO of numerous companies including Western Union and we've worked very, very closely together.
So I share your sentiment for George and if George is listening, he knows what the company thinks and the management team and we look forward to his continued contribution.
Right. I mean just between -- when he first started on the Board and where Korn Ferry is now and obviously that's due to Paul and your efforts initially in instituting the turnaround and then obviously Gary, you and Gregg and Bob are continuing that. So it's just going back from the BofA days that's kind of interesting.
Well, yes, I mean it's a company that's transformed, couple billion dollars now half the business from advisory, it is quite remarkable and a lot of people have contributed to that. So thank you for those words.
With regards to the executive search, you got 1.44 million in terms of current productivity out of the consultants. How do you see that progressing and I know you've got lots of consultants that are doing more than that obviously, but what's the pace that you think is sustainable.
Yes. In the United States to just -- add to that just to be average it's a million nine. So that number is impacted greatly by the global footprint that we have. So you look at that number and when you'd actually dissect it and take the U.S., it's substantially higher than that. I continue to believe that there's room there for that to improve. As part of that our financial services business is a smaller part of our business than I would like. Today it's only about 19%. It would be great if that would be higher with respect to the executive search business. You tend to see much higher fees there given the compensation levels so that -- Mark that's what I would say.
Okay. And then everything's happening real-time. Gary you've got a ton of experience with cycles. How long do you think it takes before the recent volatility ends up impacting a little bit of psychology in terms of the confidence or how are you thinking about planning under those circumstances?
I think if you look back in time it would be two to three quarters is what you would -- that's what you would analytically look at. Clearly, there is a lot of geopolitical risk happening as we speak. Forget the cycle and how long it's been there. But I think that and I have some personal views, but I do believe that this is trade skirmish will be sorted out. I think rational heads will prevail over time and somebody is going to give. The situation in Europe and Brexit, I would not be surprised if there was a second vote. But I tend to believe there that there's not -- I just don't see people driving a car off the cliff. I did. That's hard for me to say. And I think the monetary policy in the [indiscernible] I think that that will be tempered versus what has been previously communicated say eight weeks ago.
Whether we're at full employment now in the United States is a bit of a question, the numbers today would -- people would suggest that. But I can only tell you that what we're seeing I can report on new business. Yes I can tell you that companies have been adjusting supply chains in China now for several months. So that would kind of be my read on things.
Just on the China element, I mean they have been adjusting things -- how much of an impact does that have on you in terms of just when we took a look at your APAC business that was quite strong, it sounds like the orders are still strong. How should we think about that?
Yes. The orders are strong. The growth does take China for example the growth in the quarter was 11%, 12% constant currency. Year-to-date, it's been 13%. So you could say that maybe okay there's a slight impact, but I think that's been happening now for many, many months and now we're going to head into the Chinese New Year and all that good stuff. But marginally is probably what I would say up to this point.
Okay. And then, with regards to the advisory it sounds like things are moving in the right direction there. How long do you think it'll take before North America really gets up to kind of a targeted 10% growth rate?
We need talent Mark. So we've got a strategy -- several fold strategy there. But the fundamental issue is not the market place. It's scale and talent and just we just don't have enough of it. And so we're out very aggressively and also we're on college campuses recruiting building our own farm team so it's not just going out into the marketplace and doing lateral hires but we're also on college campuses. We'll have another class start here in January.
So there is several fold. There's -- it's to ensure that we have solutions based business that's focused on what the CEO cares about. So for example, around M&A or digitization we're moving the business towards solutions. That's well under its way.
We have a pretty strong account strategy account focus, we're executing on that. And then there's the talent piece and we just don't have enough coverage in the United States. And the acquisition -- the last acquisition you notice it just -- it added great people just not enough creative people in the U.S.
Your success in advisory hasn't gone unnoticed. You've got copycats out there that are you know I guess that's the highest form of accomplishment is, when you take the path. What are you seeing from a competitive perspective in terms of what the other players are doing and how does that affect the ability to recruit and retain.
There are -- I'm not going to mention names there. There are two strategy firms that are very well-known, arguably two of the largest in the world. I've seen they enjoy after market work. And what I mean by that is they go in and diagnose the strategy and invariably the CEO starts asking questions about people and talent and organizational structure. And so that has certainly -- I definitely have seen that. Then there is one of the big four that comes at it from a technology perspective and it gets into things that we do. Not in terms of the RPO talent acquisition business, but in terms of the advisory and neither of those two they will have the IP or the data that they don't have the products business. So that's what I would say.
Next question is from George Tong with Goldman Sachs. Please go ahead.
Hi. Thanks. Good morning. I wanted to ask about marquee accounts, then the layer of managed accounts below that. Can you discuss how revenue growth performed in those categories and any plans to drive account manager growth to augment the cross-selling initiatives that you have with your larger accounts.
The marquee accounts now represent about 21% of the portfolio. There's slightly over 100 of those on those accounts, we have account leaders. The growth in those accounts this last quarter was better than the portfolio average which is good. And year-to-date it's certainly been better. We are going under the -- as we think about one Korn Ferry, one of the changes -- one of the decisions that we've made is, we're going to go a level below the marquee account. And so we are going to target say a couple hundred what we would call not managed but regional accounts. And so we're just now at the beginning of implementing that.
And so we are assigning our current talent to some of those accounts. The accounts have been identified. All that's been done, all the screens have been run. And what we're all -- what we're going to have to do though is go out and hire more account professionals to augment what we have in the marquee account program. So I'm not at this point going to state any goals, but I will in March, but I'm just not ready today to state the goal.
But overall, if you think about this organization having real impact in the world and not being 2 billion but 10 billion or substantially bigger than it is today. There has to be a real focus on several hundred clients where you've got dedicated teams against those clients.
Got it. Very helpful. You talked about healthy October and November trends for new business looking out a little bit beyond that. Can you discuss how your broader pipeline of new business is performing across your segments particularly given where we are in the cycle?
I think George our pipeline is strong as it's ever been manifest itself in what we saw in the new business in Q2 as well as what we're seeing in November. So there's been really no diminished activity in terms of our pipeline.
Got it. Thank you.
And next questions from Marc Riddick with Sidoti. Please go ahead.
Hey good morning.
Good morning, Marc.
I wanted to touch on -- actually just before it started where I was going to go, I just want a quick follow-up on what you just mentioned as far as go into that next level of accounts. Is there sort of a ballpark level of how much of the current business that target group currently represents.
I don't want. I'm going to do it in March. We're just not ready for prime time under this. The one brand initiative is way, way more than a marketing exercise. And so there are several levers that I want to pull as part of that. And one is this account focus. I'll do it in March. I'm sorry. I'm just not -- we're not ready to do that.
No. That's fine. That actually leads to the question where I was originally going to go, which is -- with the announcement of making the shift to the Korn Ferry name and letting go the international part of it at the beginning of the year. I was wondering, if you could try to give a bit of an update as far as -- I guess the original timing that you were looking at for the endeavor was kind of along the lines of a little over a year, year-and-a-half, I suppose.
As you look at it now versus when you began the rebranding process, how do you think that's kind of about and do you see, I guess maybe this is part of it, but other opportunities in that would maybe expand and extend the timeframe of what you're looking and maybe some of discoveries that you've made along the way of where this can go? Thank you.
Yes. No. Thank you. We're right. We announced this in June, so we're essentially six months in and we're right on track with what we thought and there is kind of -- there's kind of again two aspects to it. One is the -- all the infrastructure and legal entity rationalization that that is going on and that's exactly on online. We said in last June 6 months ago that we thought it would be 12 to 18 months. January 1 there's from a legal entity perspective there's four or five countries that are going to go. And those are the big countries. And then, we would anticipate that over the succeeding 9 to 12 months, we will execute on the remaining. So the whole aspect of that contract with clients, employment agreements and all that stuff were exactly on line.
The other aspect of it is the, what I would say the commercialization, so the go-to-market strategy, the reward system, the development of employees, the rotation of employees between assignments. That's what we're working through right now.
Okay. Great. And then, one last thing for me, I was wondering if you could maybe give updated thoughts as far as global acquisition pipeline views and if you think there's been much of any changes given the market pullbacks that we've seen over the last few weeks. Thank you.
We continue to execute. We're continuing to meet with companies. I just haven't seen anything. The volatility has clearly picked up as you said over the last several weeks particularly in the last few days. But now there's nothing that would kind of ring the bell.
Okay, great. Thank you very much.
Okay.
And with no further questions, I'll turn it back to you Mr. Burnison for closing comments.
Okay. Well, listen I really appreciate everybody's time. I certainly appreciate Mark Marcon comments. Thank you for those. And look it's been an incredible calendar year for Korn Ferry and we look forward to this next year as well. And I'd just say seasons greetings to everybody and have a wonderful holiday [Technical Difficulty] before then and we look forward to talking to you in calendar 2019. Thank you.
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