Investor Relations

Press Release

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

June 9, 2009

Highlights

- Excluding a $25.1 million restructuring charge recorded in the period, Q4'09 diluted loss per share was $0.11. Fourth quarter fiscal 2009 diluted loss per share was $0.45 compared to diluted earnings per share of $0.36 in Q4'08.

- Fourth quarter fiscal 2009 fee revenue was $107.0 million, a 44% decline on a constant currency basis (49% decline including the impact of exchange rates) from the same quarter last year.

- Cash and marketable securities were $326.3 million at April 30, 2009 compared to $289.9 million at January 31, 2009.

LOS ANGELES, June 9 /PRNewswire-FirstCall/ -- Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced fourth quarter fiscal 2009 diluted loss per share of $0.45 compared to diluted earnings per share of $0.36 in Q4'08. Excluding a $25.1 million restructuring charge recorded in the period, diluted loss per share would have been $0.11.

"Although our industry, the global capital markets and most businesses have been under siege since the Fall of 2008, Korn/Ferry is successfully navigating this historic global recession. For Fiscal 2009, we ended the year with a fortified balance sheet that includes $326 million of cash and marketable securities and we maintained our position as the largest firm in the industry," said Gary Burnison, Chief Executive Officer, Korn/Ferry International. "We have used this tumultuous time to make strides in enhancing our value proposition to clients and to further diversify Korn/Ferry as a true talent management provider."


    Financial Results

    (dollars in millions, except per share amounts)

                                         Fourth Quarter         Year to date
                                        Q4'09      Q4'08      2009       2008
                                        -----      -----      ----       ----
    Fee revenue                        $107.0     $208.2    $638.2     $790.6
    Revenue                            $114.4     $220.5    $676.1     $835.6
    Operating (loss) income            $(33.9)     $20.2      $0.1      $91.9
    Operating margin                    (31.7%)      9.7%      0.0%      11.6%
    Net (loss) income                  $(19.5)     $15.7    $(12.4)     $66.2
    Basic (loss) earnings per share    $(0.45)     $0.36    $(0.28)     $1.50
    Diluted (loss) earnings per share  $(0.45)     $0.36    $(0.28)     $1.46



    Adjusted Results (a):              Fourth               Year to
                                       Quarter                date
                                        Q4'09                 2009
                                        -----                 ----
    Operating (loss) income             $(8.8)               $42.0
    Operating margin                     (8.3%)                6.6%
    Net (loss) income                   $(4.7)               $12.8
    Basic (loss) earnings per share    $(0.11)               $0.29
    Diluted (loss) earnings per share  $(0.11)               $0.29

    (a) Adjusted results are non-GAAP financial measures that exclude
        restructuring charges of $25.1 million and $41.9 million during the
        three and twelve months ended April 30, 2009, respectively (see
        attached reconciliations).

Fee revenue was $107.0 million in Q4'09 compared to $208.2 million in Q4'08, a decrease of 43.5% on a constant currency basis (and a decrease of 48.6% including the impact of exchange rates). The global economic and financial crisis persisted during the quarter, which lead to deteriorating labor markets throughout the world. Under these conditions the Company experienced a 36.5% decline in the number of executive search engagements opened compared to a year ago and the average fee billed per engagement decreased by 25.2% compared to the prior year.

Compensation and benefits were $80.5 million in Q4'09, a decrease of $67.6 million, or 45.6% compared to $148.1 million in Q4'08. The decrease is attributable mainly to a reduction in worldwide headcount and a reduction in profitability based compensation. Changes in exchange rates impacted compensation and benefits in Q4'09 favorably by $6.9 million from Q4'08.

General and administrative expenses were $29.6 million in Q4'09, a decrease of $3.8 million, or 11.4% from $33.4 million in Q4'08. The decrease is attributable to the Company's cost control initiatives. Changes in exchange rates impacted general and administrative expenses in Q4'09 favorably by $3.5 million from Q4'08.

The Company previously announced it would incur expenses to further rationalize its costs structure due to the deteriorating labor markets. Therefore in the fourth quarter, the Company recorded a $25.1 million restructuring charge with $13.4 million of severance costs related to a reduction in work force, of which approximately $4.9 million was paid in cash during the quarter, and $11.7 million relating to the consolidation of premises.

Operating loss was $8.8 million in Q4'09, excluding the previously mentioned restructuring costs of $25.1 million. Including the restructuring charge, the Company recorded an operating loss of $33.9 million in Q4'09 compared to operating income of $20.2 million in Q4'08, a decrease of $54.1 million.

Balance Sheet and Liquidity

Cash and marketable securities were $326.3 million at April 30, 2009 compared to $289.9 million at January 31, 2009. The Company generated $36.4 million of cash and marketable securities in Q4'09.

Interest expense was $1.8 million in Q4'09 and $1.1 million in the same period last year. Interest expense in both years related primarily to borrowings under Korn/Ferry's COLI policies.


    Results by Segment

    Selected Executive Recruitment Data

    (dollars in millions)

                                      Fourth Quarter          Year to date
                                     Q4'09      Q4'08       2009       2008
                                     -----      -----       ----       ----
    Fee revenue                      $91.9     $177.5     $543.3     $679.4
    Revenue                          $98.3     $185.7     $572.3     $708.8
    Operating (loss) income         $(16.1)     $27.3      $47.4     $122.0
    Operating margin                 (17.5%)     15.4%       8.7%      18.0%
    Average number of consultants      479        516        509        515
    Engagements (a)                  1,139      1,794      5,945      7,276

    (a) Represents new engagements opened in the respective period.

    Adjusted Results (b):           Fourth                 Year to
                                    Quarter                 date
                                     Q4'09                  2009
                                     -----                  ----
    Operating income                  $3.3                 $77.9
    Operating margin                   3.6%                 14.3%

    (b) Adjusted results are non-GAAP financial measures that exclude
        restructuring charges of $19.4 million and $30.5 million during the
        three and twelve months ended April 30, 2009, respectively (see
        attached reconciliation).

Fee revenue was $91.9 million in Q4'09, a decrease of $85.6 million, or 43.8% on a constant currency basis from $177.5 million in Q4'08 (and a decrease of 48.2% including the impact of exchange rates). Fee revenue decreased in all regions due to a 35.7% decrease in the overall number of engagements billed and an overall decrease of 19.3% in the average fee per engagement.

The Q4'09 operating income was $3.3 million, excluding restructuring costs of $19.4 million. Executive search recorded an operating loss of $16.1 million in Q4'09 including restructuring costs compared to operating income of $27.3 million in Q4'08 or a decrease of $43.4 million from the prior year.

The total number of consultants at April 30, 2009 was 460, a decrease of 54 from April 30, 2008.


    Selected Futurestep Data


    (dollars in millions)

                               Fourth Quarter          Year to date
                              Q4'09      Q4'08       2009       2008
                              -----      -----       ----       ----
    Fee revenue               $15.1      $30.7      $94.9     $111.2
    Revenue                   $16.1      $34.7     $103.8     $126.9
    Operating (loss) income   $(7.8)      $2.9     $(12.0)      $8.5
    Operating margin          (51.7%)      9.5%     (12.7%)      7.7%

    Adjusted Results (a):    Fourth                 Year to
                             Quarter                 date
                              Q4'09                  2009
                              -----                  ----
    Operating (loss) income   $(2.1)                $(0.6)
    Operating margin          (14.2%)                (0.6%)

    (a) Adjusted results are non-GAAP financial measures that exclude
        restructuring charges of $5.6 million and $11.4 million during the
        three and twelve months ended April 30, 2009 (see attached
        reconciliation).

Fee revenue was $15.1 million in Q4'09, a decrease of $15.6 million, or 42.0% on a constant currency basis (and a decrease of 50.8% including the impact of exchange rates), from $30.7 million in Q4'08. Reductions in fee revenue were driven by a decrease in the average fee per engagement and to a lesser extent by a decrease in the number of engagements billed.

The Q4'09 operating loss would have been $2.1 million, excluding restructuring costs of $5.6 million. Operating loss was $7.8 million including restructuring costs in Q4'09 compared to operating income of $2.9 million in Q4'08.

Outlook

The global economic crisis has had a significant impact on many of our client's people initiatives; as such, the demand for executive searches and leadership and talent consulting services declined precipitously throughout the world during the second half of Fiscal 2009. Although demand for the Company's services has begun to stabilize, the macroeconomic climate and labor markets remain uncertain. Based on new business confirmed subsequent to the end of Q4'09 and anticipating a decline in new business in the summer due to seasonality, revenues would be approximately $90 million to $100 million in Q1'10. Given the uncertain economic environment and labor markets, predicting revenues is extremely imprecise, making a meaningful prediction about earnings impractical. Given these business conditions, the Company's primary operating goal in the short run is to maintain neutral to positive cash flows as measured by earnings before interest, taxes, depreciation and amortization and non-cash long-term incentive compensation. Given the continued uncertain economic conditions, the Company is taking further, less significant actions to align the Company's cost structure in an effort to retain positive cash flow.

Earnings Conference Call Webcast

The earnings conference call will be held today at 2:00 PM (EDT) and hosted by Gary Burnison, Chief Executive Officer, and he will be joined by Mike DiGregorio, Chief Financial Officer and Mark Neal and Gregg Kvochak, Vice Presidents of Finance. The conference call will be webcast and available online at www.kornferry.com, accessible through the Investor Relations section.

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.

Forward Looking Statements

Statements in this press release and our conference call that relate to future results and events ("forward-looking statements") are based on Korn/Ferry's current expectations. Readers 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 that are beyond the control of Korn/Ferry. The potential risks and uncertainties relate to competition, the dependence on attracting and retaining qualified and experienced consultants, the portability of client relationships, local political or economic developments in or affecting countries where we have operations, including fluctuations in exchange rates, risks related to the growth and results of Futurestep, global economic developments, restrictions imposed by off-limits agreements, reliance on information systems and employment liability risk. For a detailed description of risks and uncertainties that could cause differences, please refer to Korn/Ferry's periodic filings with the Securities and Exchange Commission. Korn/Ferry disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

This press release contains financial information calculated other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). These non-GAAP financial measures include adjusted operating income, operating margin, net (loss) income, basic (loss) earnings per share and diluted (loss) earnings per share, adjusted to exclude restructuring charges.

This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Management believes the presentation of non-GAAP financial measures in this press release provides meaningful supplemental information regarding Korn/Ferry's performance by excluding certain charges that may not be indicative of Korn/Ferry's operating results. The use of these non-GAAP financial measures facilitate comparisons to Korn/Ferry's historical performance. Korn/Ferry includes these non-GAAP financial measures because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn/Ferry's ongoing operations and financial and operational decision-making.

                                [Tables attached]



                   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          80,457   148,072  446,306   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       148,356   200,272  676,074   743,789
                                       -------   -------  -------   -------

     Operating (loss) income           (33,930)   20,178       54    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   (32,866)   21,241  (15,747)   98,990
    (Benefit) provision for income
     taxes                             (13,339)    6,328   (1,012)   36,081
    Equity in earnings of
     unconsolidated subsidiaries, net       49       833    2,365     3,302
                                            --       ---    -----     -----
        Net (loss) income             $(19,478)  $15,746 $(12,370)  $66,211
                                      ========   ======= ========   =======

    Basic (loss) earnings per
     common share                       $(0.45)    $0.36   $(0.28)    $1.50
                                        ======     =====   ======     =====

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

    Diluted (loss) earnings per
     common share                       $(0.45)    $0.36   $(0.28)    $1.46
                                        ======     =====   ======     =====

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



                     KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                          EXCLUDING NON-GAAP ADJUSTMENTS
                     (in thousands, except per share amounts)
                                    (unaudited)


                                                   Three Months Ended
                                                        April 30,
                                                      -------------
                                              2009 - As  Adjust-  2009 - As
                                              Reported    ments    Adjusted
                                             ----------  -------  ---------

    Fee revenue                                $106,980            $106,980
    Reimbursed out-of-pocket engagement
    expenses                                      7,446               7,446
                                                  -----               -----
        Total revenue                           114,426             114,426
                                                -------             -------

    Compensation and benefits                    80,457              80,457
    General and administrative expenses          29,566              29,566
    Out-of-pocket engagement expenses            10,317              10,317
    Depreciation and amortization                 2,946               2,946
    Restructuring charges (1)                    25,070  (25,070)         -
                                                 ------                   -
        Total operating expenses                148,356  (25,070)   123,286
                                                -------             -------

    Operating (loss) income                     (33,930)             (8,860)

    Interest and other
    income (loss), net                            1,064               1,064
                                                  -----               -----
        (Loss) income before (benefit)
         provision for income taxes
         and equity in earnings of
         unconsolidated subsidiaries            (32,866)             (7,796)
    (Benefit) provision for income taxes (2)    (13,339)  10,377     (2,962)
    Equity in earnings of
    unconsolidated subsidiaries, net                 49                  49
                                                     --                  --
        Net (loss) income                      $(19,478)            $(4,785)
                                               ========             =======

    Basic (loss) earnings per common share       $(0.45)             $(0.11)
                                                 ======              ======

    Basic weighted average common
     shares outstanding                          43,475              43,475
                                                 ======              ======

    Diluted (loss) earnings
     per common share                            $(0.45)             $(0.11)
                                                 ======              ======

    Diluted weighted average
     common shares outstanding                   43,475              43,475
                                                 ======              ======



                                                       Year Ended
                                                        April 30,
                                                      -------------
                                              2009 - As  Adjust-  2009 - As
                                              Reported    ments    Adjusted
                                             ----------  -------  ---------

    Fee revenue                                $638,223            $638,223
    Reimbursed out-of-pocket engagement
     expenses                                    37,905              37,905
                                                 ------              ------
        Total revenue                           676,128             676,128
                                                -------             -------

    Compensation and benefits                   446,306             446,306
    General and administrative expenses         126,882             126,882
    Out-of-pocket engagement expenses            49,388              49,388
    Depreciation and amortization                11,583              11,583
    Restructuring charges (1)                    41,915  (41,915)         -
                                                 ------                   -
        Total operating expenses                676,074  (41,915)   634,159
                                                -------             -------

    Operating (loss) income                          54              41,969

    Interest and other income (loss), net       (15,801)            (15,801)
                                                -------             -------
        (Loss) income before (benefit)
         provision for income taxes
         and equity in earnings of
         unconsolidated subsidiaries            (15,747)             26,168
    (Benefit) provision for
     income taxes (2)                            (1,012)  16,778     15,766
    Equity in earnings of
     unconsolidated subsidiaries, net             2,365               2,365
                                                  -----               -----
        Net (loss) income                      $(12,370)            $12,767
                                               ========             =======

    Basic (loss) earnings
    per common share                             $(0.28)              $0.29
                                                 ======               =====

    Basic weighted average common
    shares outstanding                           43,522              43,522
                                                 ======              ======

    Diluted (loss) earnings
    per common share                             $(0.28)              $0.29
                                                 ======               =====

    Diluted weighted average
    common shares outstanding                    43,522              44,272
                                                 ======              ======


    Explanation of Non-GAAP Adjustments
    -----------------------------------
    For the three and twelve months ended April 30, 2009:
      (1) Restructuring charges
      (2) Tax effect related to net operating expense adjustments



                   KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
                          FINANCIAL SUMMARY BY SEGMENT
                                 (in thousands)
                                  (unaudited)

                                              Three Months Ended
                                                   April 30,
                                           2009               2008
                                           ----               ----

    Fee Revenue:
    Executive recruitment:
      North America                     $56,865            $97,903
      EMEA                               20,685             49,970
      Asia Pacific                       10,151             23,276
      South America                       4,260              6,372
                                          -----              -----
    Total executive recruitment          91,961            177,521
    Futurestep                           15,019             30,683
                                         ------             ------
      Total fee revenue                 106,980            208,204
    Reimbursed out-of-pocket
     engagement expenses                  7,446             12,246
                                          -----             ------
      Total revenue                    $114,426           $220,450
                                       ========           ========

    Operating (Loss) Income:                      Margin             Margin
                                                  ------             ------
    Executive recruitment:
      North America                     $(8,085)  (14.2%)  $13,282    13.6%
      EMEA                               (6,044)  (29.2%)    8,949    17.9%
      Asia Pacific                       (1,714)  (16.9%)    4,704    20.2%
      South America                        (226)   (5.3%)      394     6.2%
                                           ----                ---
    Total executive recruitment         (16,069)  (17.5%)   27,329    15.4%
    Futurestep                           (7,770)  (51.7%)    2,903     9.5%
    Corporate                           (10,091)           (10,054)
                                        -------            -------
       Total operating (loss)
        income                         $(33,930)  (31.7%)  $20,178     9.7%
                                       ========            =======

    Restructuring Charges:
    Executive recruitment:
      North America                      $9,447    16.6%        $-     0.0%
      EMEA                                7,756    37.5%         -     0.0%
      Asia Pacific                        1,293    12.8%         -     0.0%
      South America                         909    21.3%         -     0.0%
                                            ---                  -
    Total executive recruitment          19,405    21.1%         -     0.0%
    Futurestep                            5,641    37.5%         -     0.0%
    Corporate                                24                  -
                                             --                  -
       Total restructuring charges      $25,070    23.4%        $-     0.0%
                                        =======                 ==


    Adjusted Operating (Loss) Income:
     (Excluding Restructuring Charges)
                                                  Margin             Margin
                                                  ------             ------
    Executive recruitment:
      North America                      $1,362     2.4%   $13,282    13.6%
      EMEA                                1,712     8.3%     8,949    17.9%
      Asia Pacific                         (421)   (4.1%)    4,704    20.2%
      South America                         683    16.0%       394     6.2%
                                            ---                ---
    Total executive recruitment           3,336     3.6%    27,329    15.4%
    Futurestep                           (2,129)  (14.2%)    2,903     9.5%
    Corporate                           (10,067)           (10,054)
                                        -------            -------
       Total adjusted operating
        (loss) income                   $(8,860)   (8.3%)  $20,178     9.7%
                                        =======            =======



                                                Year Ended
                                                 April 30,
                                         2009               2008
                                         ----               ----

    Fee Revenue:
    Executive recruitment:
      North America                    $309,514           $374,891
      EMEA                              143,184            183,042
      Asia Pacific                       66,332             95,915
      South America                      24,323             25,556
                                         ------             ------
    Total executive recruitment         543,353            679,404
    Futurestep                           94,870            111,166
                                         ------            -------
      Total fee revenue                 638,223            790,570
    Reimbursed out-of-pocket
     engagement expenses                 37,905             45,072
                                         ------             ------
      Total revenue                    $676,128           $835,642
                                       ========           ========

    Operating (Loss) Income:                      Margin             Margin
                                                  ------             ------
    Executive recruitment:
      North America                     $37,516    12.1%   $70,628    18.8%
      EMEA                                2,061     1.4%    29,820    16.3%
      Asia Pacific                        5,396     8.1%    19,299    20.1%
      South America                       2,441    10.0%     2,230     8.7%
                                          -----              -----
    Total executive recruitment          47,414     8.7%   121,977    18.0%
    Futurestep                          (12,003)  (12.7%)    8,545     7.7%
    Corporate                           (35,357)           (38,669)
                                        -------            -------
       Total operating (loss) income        $54     0.0%   $91,853    11.6%
                                            ===            =======


    Restructuring Charges:
    Executive recruitment:
      North America                     $12,004     3.9%        $-     0.0%
      EMEA                               14,362    10.1%         -     0.0%
      Asia Pacific                        2,240     3.4%         -     0.0%
      South America                       1,864     7.7%         -     0.0%
                                          -----                  -
    Total executive recruitment          30,470     5.6%         -     0.0%
    Futurestep                           11,421    12.1%         -     0.0%
    Corporate                                24                  -
                                             --                  -
       Total restructuring charges      $41,915     6.6%        $-     0.0%
                                        =======                 ==


    Adjusted Operating (Loss) Income:
     (Excluding Restructuring Charges)            Margin             Margin
                                                  ------             ------
    Executive recruitment:
      North America                     $49,520    16.0%   $70,628    18.8%
      EMEA                               16,423    11.5%    29,820    16.3%
      Asia Pacific                        7,636    11.5%    19,299    20.1%
      South America                       4,305    17.7%     2,230     8.7%
                                          -----              -----
    Total executive recruitment          77,884    14.3%   121,977    18.0%
    Futurestep                             (582)   (0.6%)    8,545     7.7%
    Corporate                           (35,333)           (38,669)
                                        -------            -------
       Total adjusted operating
        (loss) income                   $41,969     6.6%   $91,853    11.6%
                                        =======            =======



                    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            $251,007  $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        367,604   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               $736,886  $880,214
                                         ========  ========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    ------------------------------------
    Accounts payable                      $10,282   $15,309
    Income taxes payable                      663    20,948
    Compensation and benefits
     payable                              116,386   199,081
    Other accrued liabilities              44,301    37,120
                                           ------    ------
              Total current
               liabilities                171,632   272,458
                                          -------   -------

    Deferred compensation and
     other retirement plans                99,238   105,719
    Other liabilities                       9,195     5,903
                                            -----     -----
              Total liabilities           280,065   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                  82,644    95,014
        Accumulated other comprehensive
         income                             6,285    43,097
                                            -----    ------
              Shareholders' equity        457,359   496,679
        Less:  notes receivable
         from shareholders                   (538)     (545)
                                             ----      ----
              Total shareholders'
               equity                     456,821   496,134
                                          -------   -------
              Total liabilities
               and shareholders'
               equity                    $736,886  $880,214
                                         ========  ========

SOURCE Korn/Ferry International
CONTACT: Investor Relations: Gregg Kvochak, +1-310-556-8550; or Media: Mike Distefano, +1-310-843-4199, both for Korn/Ferry International
Web Site: http://www.kornferry.com

Take a Closer Look