Investor Relations

Press Release

Korn/Ferry International Amends Fourth Quarter Fiscal 2009 Results of Operations

June 29, 2009
LOS ANGELES, June 29, 2009 /PRNewswire-FirstCall via COMTEX/ -- Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced it has made an adjustment to its fourth quarter fiscal 2009 results of operations subsequent to the issuance of its press release on June 9, 2009. The adjustment was made to correct compensation and benefit expenses that had been recorded twice by the Company during the periods covering fiscal 2002 through fiscal 2009 for expenses relating to employee contributions to a health and welfare benefit plan. The cumulative impact of this adjustment was a $3.7 million decrease in compensation and benefits expense for the quarter and year ended April 30, 2009, a $4.0 million increase in cash and cash equivalents and a $0.3 million increase in accrued compensation and benefits liability as of April 30, 2009. This adjustment increased operating profit by $3.7 million and decreased net loss by $2.3 million, or $0.05 per basic and diluted share for the quarter and year ended April 30, 2009. Based on the Company's analysis of the adjustment it was not considered material to any individual prior period or the current period. A revised balance sheet and income statement reflecting the adjustment are attached.

Korn/Ferry International (NYSE: KFY), with a presence throughout the Americas, Asia Pacific, Europe, the Middle East and Africa, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to attract, develop, retain and sustain their talent. Visit www.kornferry.com for more information on the Korn/Ferry International family of companies, and www.kornferryinstitute.com for thought leadership, intellectual property and research.


                    KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share amounts)

                                    Three Months Ended         Year Ended
                                         April 30,              April 30,
                                     ----------------        --------------
                                     2009        2008        2009      2008
                                     ----        ----        ----      ----
                                 (unaudited) (unaudited)
    Fee revenue                   $106,980    $208,204    $638,223   $790,570
    Reimbursed out-of-pocket
     engagement expenses             7,446      12,246      37,905     45,072
                                     -----      ------      ------     ------
        Total revenue              114,426     220,450     676,128    835,642
                                   -------     -------     -------    -------

    Compensation and benefits       76,783     148,072     442,632    540,056
    General and
     administrative expenses        29,566      33,374     126,882    134,542
    Out-of-pocket
     engagement expenses            10,317      16,086      49,388     58,750
    Depreciation and amortization    2,946       2,740      11,583     10,441
    Restructuring charges           25,070           -      41,915          -
                                    ------         ---      ------        ---
        Total operating
         expenses                  144,682     200,272     672,400    743,789
                                   -------     -------     -------    -------

    Operating (loss) income        (30,256)     20,178       3,728     91,853

    Interest and other income
     (loss), net                     1,064       1,063     (15,801)     7,137
                                     -----       -----     -------      -----
       (Loss) income before
        (benefit) provision
        for income taxes
        and equity in
        earnings of
        unconsolidated
        subsidiaries               (29,192)     21,241     (12,073)    98,990
    (Benefit) provision for
     income taxes                  (11,943)      6,328         384     36,081
    Equity in earnings of
     unconsolidated
     subsidiaries, net                  49         833       2,365      3,302
                                       ---         ---       -----      -----
         Net (loss) income        $(17,200)    $15,746    $(10,092)   $66,211
                                  ========     =======    ========    =======

    Basic (loss) earnings per
     common share                   $(0.40)      $0.36      $(0.23)     $1.50
                                    ======       =====      ======      =====

    Basic weighted average common
     shares outstanding             43,475      43,230      43,522     44,012
                                    ======      ======      ======     ======

    Diluted (loss) earnings per
     common share                   $(0.40)      $0.36      $(0.23)     $1.46
                                    ======       =====      ======      =====

    Diluted weighted
     average common shares
     outstanding                    43,475      44,333      43,522     45,528
                                    ======      ======      ======     ======



                    KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (in thousands, except per share amounts)

                                                             As of April 30,
                                                             2009      2008
                                                             ----      ----
    ASSETS
    ------
    Cash and cash equivalents                             $255,000  $305,296
    Marketable securities                                    4,263     5,940
    Receivables due from clients, net of
     allowance for doubtful accounts
     of $11,197 and $11,504, respectively                   67,308   119,952
    Income taxes and other receivables                       9,001     7,071
    Deferred income taxes                                   14,583    10,401
    Prepaid expenses and other assets                       21,442    20,057
                                                            ------    ------
              Total current assets                         371,597   468,717
                                                           -------   -------

    Marketable securities, non-current                      70,992    78,026
    Property and equipment, net                             27,970    32,462
    Cash surrender value of company owned life
     insurance policies, net of loans                       63,108    81,377
    Deferred income taxes                                   45,141    47,128
    Goodwill                                               133,331   142,699
    Intangible assets, net                                  16,928    15,519
    Other assets                                            11,812    14,286
                                                            ------    ------
              Total assets                                $740,879  $880,214
                                                          ========  ========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    ------------------------------------
    Accounts payable                                       $10,282   $15,309
    Income taxes payable                                     2,059    20,948
    Compensation and benefits payable                      116,705   199,081
    Other accrued liabilities                               44,301    37,120
                                                            ------    ------
              Total current liabilities                    173,347   272,458
                                                           -------   -------

    Deferred compensation and other retirement plans        99,238   105,719
    Other liabilities                                        9,195     5,903
                                                             -----     -----
              Total liabilities                            281,780   384,080

    Shareholders' equity
        Common stock: $0.01 par value, 150,000
         shares authorized, 56,185 and
         54,786 shares issued and 44,729 and 44,593
         shares outstanding, respectively                  368,430   358,568
        Retained earnings                                   84,922    95,014
        Accumulated other comprehensive income               6,285    43,097
                                                             -----    ------
              Shareholders' equity                         459,637   496,679
        Less:  notes receivable from shareholders             (538)     (545)
                                                              ----      ----
              Total shareholders' equity                   459,099   496,134
                                                           -------   -------
              Total liabilities and shareholders' equity  $740,879  $880,214
                                                          ========  ========


SOURCE Korn/Ferry International

http://www.kornferry.com

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