Ladies and gentlemen, thank you for standing by, and welcome to the Korn/Ferry Third Quarter Fiscal Year 2014 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. [Operator Instructions] Before I turn the call over to your host, Mr. Gary Burnison, let me first read the 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, in the company's annual report for fiscal 2013 and in other periodic reports filed by the company with the SEC. Also, some of the comments today may reference non-GAAP financial measures such as the 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 release relating to this call, both of which are posted on the company's website at www.kornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, sir.

Thanks, Rochelle, and good afternoon, everybody. I've got here with me Bob Rozek, our CFO; and Gregg Kvochak. First, I'd like to thank you for making the time to listen to our results and earnings call here. I am extremely proud of this organization. Our absolute performance, our relative performance, I think that this is clearly a transformative time for Korn/Ferry. And we're becoming a firm that's not only known for talent management but talent intelligence, a firm that helps a CEO to link their business strategy with their talent strategy. This quarter was a good one for us. We reported about 21% growth year-over-year, 14% organic growth year-over-year on a constant currency basis. Revenue was about $242 million or $970 million quarter annualized. EBITDA was $140 million on an annualized basis. The margin was 14.5%, that was up 200 bps year-over-year. EPS was $0.43. We continue to see steady strong growth across all of our market sectors. Our global industry areas are up double digits year-to-date organically. And so for us, as we look forward, we think there's a lot of runway left here. The environment today is one where growth is slow but change is fast, and you got to really create an organization that's nimble, that's agile and an organization that can really link up business and talent strategies. And that's -- I think that's the firm that we're creating to accelerate the growth of our clients and really become the single source for leadership and talent consulting services. Our flagship business, Search, leads the way. It had another very good quarter. It was up about 11.5% on a constant currency basis. Our leadership business was up as well. It was about $62 million or so in fees, call it $250 million on an annualized basis. It was up 15% year-over-year organically constant currency, and it was profitable with an EBITDA margin of 14.5%. And we continue to win notable engagements in that business from talent strategy design to leadership development, succession management, workforce performance and diversity and inclusion. Our Futurestep business had a strong quarter. It was up 18% year-over-year. It was also up sequentially at about 13%. The RPO work was up 15%. And as we talked about in the past, certainly, the last call and even the one before that, that we were really starting to build a pipeline and it was certainly very heartening to see that pipeline work its way through revenue in our third quarter. With that, I think I'm going to turn it over to our CFO, Bob Rozek and then Gregg could go through a little bit more detail. Bob?

Great. Thanks, Gary, and good afternoon, everybody. Similar to Gary, I'm incredibly proud of what our folks at Korn/Ferry have accomplished this quarter. I think the overall environment remains challenging and our employees come to work every day, continuing to drive our strategy and really fighting for growth. The global demand for our industry-leading talent management solutions continues to gain momentum. In our third quarter, despite the year end kind of holiday seasonality, we achieved record revenue for the company. At constant currency, our consolidated fee revenue in the third quarter grew $40.2 million or 21.1% year-over-year, reaching $242.2 million, with growth in all of our operating segments. Also measuring on a constant currency basis, our fee revenue improved $3 million or a little bit over 1% sequentially, with growth in both Executive Recruitment and Futurestep, which offset the expected seasonal weakness in the L&TC segment. Additionally, on an organic basis, excluding fee revenue from the acquisition of PDI Ninth House, our consolidated fee revenues were up $25 million or 14% year-over-year net, as well as in constant currency. And in the third quarter, nearly 41% of our total fee revenues was generated in services outside of our core executive Search offering, and our overall growth continues to outpace many of our major industry competitors. As expected, the Executive Search new business awards were seasonally volatile in the third quarter. Confirmations were sequentially down in the months of November and December due to holidays, but rebounded strongly in January. Our Executive Search new business confirmations in the third quarter were down approximately 3% compared to the second quarter of fiscal '14, but our new business was up nearly 9% when compared to the third quarter of fiscal '13. In L&TC, the new business awards were similarly slower in the third…

Thanks, Bob. Starting with our Executive Recruitment segment; despite year-end holiday seasonality, global revenues for our Executive Recruitment segment improved in the third quarter. Consolidated Executive Recruitment fee revenue in the third quarter was $144 million, up $4 million or 2.9% sequentially, and up $13.5 million or 10.4% year-over-year. Measured at constant currency, third quarter consolidated Executive Recruitment fee revenue was up 2.4% sequentially and up 11.6% year-over-year. Regionally, also at constant currency, North America was up 2.9%; Europe was up 11.3%; while Asia Pacific and South America were down 6.8% and 13.9%, respectively, on a sequential basis. Year-over-year, also on a constant currency basis, North America grew 9%; Europe grew 13.5%; Asia Pacific was up 17.8%; and South America was up 12.7%. Sequential growth on our Executive Recruitment Specialty Practices was mixed in the third quarter. Worldwide growth was strongest in our financial services practice, up 17%; technology practice, up 17%; and our consumer goods practice, up 15%; while our life sciences and health care and industrial practices were down 4% and 13%, respectively. Financial services accounted for approximately 19% of all Executive Recruitment fee revenue in the third quarter, up approximately 240 basis points from the second quarter of fiscal '14. Year-over-year, also at actual rates, all of our Specialty Practices grew in the third quarter with the exception of the industrial practice. Financial services was up 29%; technology was up 22%; life sciences and health care was up 21%, and Consumer Goods was up 6%. Worldwide, the industrial practice was down 13% year-over-year in the third quarter, driven primarily by softer market conditions in North America and South America. The total number of dedicated executive recruiting consultants worldwide, at the end of the third, quarter was 429, up 39 year-over-year and up 17 sequentially. Annualized fee revenue…

Thanks, Gregg. As projected, our overall monthly new order trends in the third quarter were relatively consistent with our historical patterns. And to start the fourth quarter, the February new orders, also in line with our expectations, roughly equivalent to what we saw in January. Assuming worldwide economic conditions, financial markets and foreign exchange rates remain steady, our fiscal '14 fourth quarter fee revenue is likely to range from $240 million to $250 million, and diluted earnings per share are likely to range from $0.35 to $0.41. That concludes our prepared remarks, and we will be glad to answer any questions you may have.

[Operator Instructions] And our first question comes from the line of Tim McHugh of William Blair.

This is actually Stephen Sheldon in for Tim. First, it's a really strong quarter for Futurestep and it's finally broke out of its prior revenue range. So can we think about the contribution this quarter as kind of the sustainable level to build upon moving forward?

Well, listen, this is a -- first of all, we ought to have tailwinds, economic tailwinds, so it's certainly hard to predict any kind of consulting business out too far. But we would hope, given the market opportunity that Futurestep competes in, that this business would be multi-hundred million dollar opportunity. So we have big hopes. Our Futurestep team is a great team. It's fired up. It's got a lot of services that it anchors around it from employer branding to technology. And so I would certainly hope that this will be sustained for sure in this quarter. And moving beyond, we've got bigger goals for that business.

Okay, great. And then margins in the business also moved up sequentially, but we're still down some year-over-year. Is that still from the drag of the setup costs from the large RPO win last quarter? And what's kind of your expectation for margin for the Futurestep?

Yes, it is, for sure. But again, if you're thinking, like I am, that this is a bigger opportunity for us, we're going to, obviously, have to invest to really create scale. So a couple of quarters ago, they really shot up high in terms of the margin. It was great to see this come back. We said it would, it did. And we would expect it to at least be at this level.

Okay. And then lastly, the improvement for the Executive Search for this in Europe, was there anything in particular that you're noticing from your clients that drove the improvement? And did you see any change in their sentiment during and exiting the quarter?

No change entering or exiting. There's continued to be this slow recovery that you know about. I would say that our team in Europe across all of our businesses is, they're just incredible. It's the best team in the business. And we certainly saw strength in France and the U.K. in this quarter, particularly sequentially, which is really good to see.

[Operator Instructions] You have a question from the line of Kevin McVeigh of Macquarie.

Hey, I wonder if you could just give us a sense on the Q4 guide. It looks, just given the amount of the revenue beat and I would think what's probably seasonally stronger quarter, are we just being conservative there? Or is there anything across any of the regions that kind of had to some -- kind of come in the way we did from a guidance perspective?

No, there's no change in terms of -- there's no subtleties or anything like that for sure, Kevin.

Yes. Kevin, this is Bob. If you go back to the comments we prepared, you'll note that we were up about 17 Search consultants on a sequential basis, and the increased hiring cost takes those folks a little bit of time to ramp up and actually what you see being reflected in our guidance. It's a continuing investment in the headcount, trying to drive our strategy forward.

And then as we think about kind of the ramp in contribution, Bob, is that kind of 6 months or so as we would start to see the revenue come in from those folks?

Yes, I think it's generally a 6- to 12-month ramp period for folks to really get up and running. Some come with a book of business day 1 and some start a little bit slower.

Got it. And then Gary, as Futurestep and LTC obviously continues to scale, how is that changing kind of the approach to the business from a client perspective? And is it more holistic in terms of -- or are we still kind of leading with the Search and general offerings? Or is the go-to-market strategy, has that morphed at all just given how much this business is scaled?

It's absolutely morphing and it's going to market as one. We do a top-down by industry. There are leaders are assigned to accounts. They could be from any part of the organization. They're responsible for driving activity. That's the opportunity for this company. We have much bigger opportunity to drive more penetration in our clients for sure.

And then if you think about kind of financial services at 19% of total Search, how should we think about that going forward? And then just those Search consultants that came on, were there any particular vertical expertise?

No, it was probably less in financial -- less of the mix was financial services. It's great to see, it's encouraging to see overall as a portfolio at that financial services represents about 16% of the company. As you said on the Executive Search side, it's 19%, and I would -- gosh, Gregg, I think that got down to a low of, what, like...

16%.

Yes, so it's nice to see that ramp-up several percentage points. It's certainly encouraging.

And the next question comes from the line of Tobey Sommer of SunTrust.

I guess I'll start out with the capital deployment in a kind of balance sheet efficiency question, about this up in prior calls, the cash luckily keeps piling up. Are you seeing opportunities here to grow the emerging segments? And do you have a goal to increase them to some sort of a larger percentage?

We don't -- in terms of a larger percentage, we first start with client demand and poll. And we think that there is no one brand that a CEO thinks about when it comes to talent. And that's what Korn/Ferry is going to be. I think there's a big, big market opportunity there. So we're going to have to continue to invest in terms of intellectual property, more scale, more depth and more capability to fully seize that opportunity. So that's first and foremost we think about it from that perspective.

And Tobey, this is Bob. I would just add to that. The thing to focus on as well is where that cash sits as we talked about 28% of it on, what we call, our net investable cash resides in the U.S. So to the extent that builds up significantly and it's overseas, it would be a very high cost to bring that back. Now one of the things we're paying very close attention to, there was a tax reform and simplification act that was drafted up. And in connection with that, they're looking at some dividend receipt deductions of about 95%, which would be significant in terms of our ability to move that cash freely across the system. So we're, obviously, as Gary said, very focused on investing back into the business, but also we want to see what all the variables -- how variables play out externally as well and what we actually have at our disposal.

That makes sense. I wanted to ask, within Futurestep, the backlog that you described, is the preponderance of that backlog RPO-like work? Or is it spread among the various services conducted within the segment?

The backlog, and I'll use that term probably a little bit loosely here, it's really not firm backlog as you would think, like a government fixed-price contract. But it's contract value that we have signed up and that really relates to the RPO business, Tobey.

Okay. And is it -- you're feeling that the sales force is up and running and has traction and kind of the intermittent hunting than kind of working projects. That, that kind of -- those fits and starts may be a thing of the past for Futurestep?

Yes, I think Byrne Mulrooney, the president of the business, really has a phenomenal cadence going in the organization right now. The sales force is up and running. They actively manage their pipeline. He sets aggressive targets for them from a total contract value perspective each quarter. And quite honestly, the organization is really rallying around his management system right now.

Okay. And then my last question has to do with internal investments that you've described from time-to-time, about trying to capitalize on the intellectual property and potentially develop some other data and analytics, potentially recurring-type revenue streams. Is there much in the way of an investment that we don't see that, in coming years, may develop into some new businesses for the firm?

Yes, you absolutely don't see it. That's a good point. We've got a whole host of social scientists in the Korn/Ferry Institute and that's exactly what they're working on: big data, talent analytics, predictive analytics. An example that we're bringing to market right now is around cultural dexterity. With the Affordable Care Act in the United States and patient care and the like, we've got a great product that we're actually rolling out this quarter that we invested in several quarters ago that just kind of runs through the P&L that you really don't have any line of sight on. So yes, there is an awful lot that is going through this P&L towards that IP with the hope of monetizing, productizing stuff that's really sticky.

And the next question comes from the line of Josh Vogel with Sidoti & Company. Josh Vogel - Sidoti & Company, LLC: My first question is, I was curious what percent of your consultants you -- do you find at a mature levels versus the ones that have more upside. Because what I want to get at is what -- how much upside you have to productivity and what is your optimal productivity target?

Well, it's interesting because when you actually look at the people -- the number of people that have responsibility for business origination, it's about 650 people. So we've got, as we report here to you, we've got 429 classically defined as Search. You've got 125 classically defined in LTC, and you've got almost 100 in Futurestep. So conceptually, on a run rate basis, you're kind of at $1.4 million, $1.5 million, something like that. And I believe that there is a significant upside to that on a revenue per consultant basis. If you look at any kind of traditional professional services firm, you would find the revenue per partner per originator would be substantially high than those metrics. Now this is an organization that, in many ways, is a start-up within a big brand, and we've brought so many different capabilities and people into the organization. But I can't exactly tell you when. But I can tell you that those metrics, in a classic services business, would be substantially higher. And I don't see any reason for us not to achieve those same metrics, it's just a question of time. Josh Vogel - Sidoti & Company, LLC: Okay, that's helpful. I'm sorry if I missed this, but can you talk about the acquisition pipeline or your appetite there, what markets or sectors you would be targeting?

We're very systematic, very steady. We're always looking at ways to differentiate the brand, make the brand more elastic, give our folks reasons to talk to clients throughout the whole year. And so we continue to do that. We're very interested in employer branding, talent communities, touching passive candidates. We're very interested around predictive analytics relative to executive success. We're very interested in developmental capabilities. We're very interested in terms of strategic capabilities that could be tied with the people strategy. And quite candidly also, organizations that give us more depth and scale just in terms of people. Josh Vogel - Sidoti & Company, LLC: Okay. And lastly, Bob, I think you talked about a favorable IRS audit. So as we go forward, should we expect the tax rate to normalize back in the mid-30% range?

Yes, I would think for this year, probably 34% is a good number. Long term, in the 35% range is probably a good number.

And it appears there are no further questions, Mr. Burnison. Back to you for final comments.

Okay. Well, listen, I wanted to say, first and foremost, thank you to our investors for taking the time to listen to this, for the patience and seeing the strategy really take hold. I also want to thank our employees and their passion around purpose, around changing people's lives and around accelerating the destination of our clients. And I want to thank our board. With that, we will -- we'll talk to you soon. Have a great evening. Bye-bye.