Investor Relations

Press Release

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

March 11, 2009

Highlights

- Excluding a $16.8 million restructuring charge and a $15.3 million asset impairment charge recorded in the period, Q3'09 diluted earnings per share was $0.08. Third quarter fiscal 2009 diluted loss per share was $0.52 compared to diluted earnings per share of $0.37 in Q3'08.

- Third quarter fiscal 2009 fee revenue was $136.2 million, a 32% decline (27% decline on a constant currency basis) from the same quarter last year.

LOS ANGELES, March 11 /PRNewswire-FirstCall/ -- Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced third quarter fiscal 2009 diluted loss per share of $0.52 compared to diluted earnings per share of $0.37 in Q3'08. Excluding a $16.8 million restructuring charge and a $15.3 million non-cash asset impairment charge recorded in the period, earnings per share would have been $0.08.

Gary D. Burnison, Chief Executive Officer, Korn/Ferry stated, "The unprecedented economic environment has impeded business throughout the world. Despite our leading brand and diversified strategy, unfortunately we have not been immune from the recession that has affected virtually every company conducting business today. Nevertheless, we plan to leverage the strengths of our world-class client relationships, trusted brand, global footprint, leading consultants and diversified solutions mix to not only navigate the current environment, but more importantly, to best position us for acceleration through this economic storm and the inevitable recovery, paving the way for our continued transformation as a talent management solutions provider."




    Financial Results
    (dollars in millions, except per share amounts)

                                     Third Quarter        Year to date
                                     Q3'09      Q3'08    Q3'09      Q3'08
                                     -----      -----    -----      -----
    Fee revenue                      $136.2     $201.2   $531.2     $582.4
    Revenue                          $144.5     $212.1   $561.7     $615.2
    Operating (loss) income          $(11.3)     $21.2    $34.0      $71.7
    Operating margin                  (8.3%)      10.5%     6.4%      12.3%
    Net (loss) income                $(22.4)     $16.3     $7.1      $50.5
    Basic (loss) earnings per share  $(0.52)     $0.38    $0.16      $1.14
    Diluted (loss) earnings per
     share                           $(0.52)     $0.37    $0.16      $1.10



    Adjusted Results (a):             Third               Year to
                                     Quarter               date
                                      Q3'09                Q3'09
                                      -----                -----
    Operating income                   $5.5               $50.8
    Operating margin                    4.1%                9.6%
    Net income                         $3.5               $33.4
    Basic earnings per share          $0.08               $0.77
    Diluted earnings per share        $0.08               $0.75

    (a)  Adjusted results are non-GAAP financial measures that exclude
         restructuring charges of $16.8 million during the three and nine
         months ended January 31, 2009 and an impairment charge on marketable
         securities of $15.3 million and $15.9 million during the three and
         nine months ended January 31, 2009, respectively (see attached
         reconciliations).

Fee revenue was $136.2 million in Q3'09 compared to $201.2 million in Q3'08, a decrease of 32.3% (and a decrease of 26.7% on a constant currency basis). As the global economic and financial crisis intensified the Company experienced a 33.5% decline in the number of executive search engagements opened compared to a year ago and the average fee billed per engagement decreased by 16.6% compared to the prior year.

Compensation and benefits were $94.0 million in Q3'09, a decrease of $44.6 million, or 32.2% (and a decrease of 26.3% on a constant currency basis), compared to $138.6 million in Q3'08. 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 Q3'09 favorably by $8.2 million from Q3'08.

General and administrative expenses were $31.0 million in Q3'09, a decrease of $4.3 million, or 12.2% from $35.3 million in Q3'08. The decrease is attributable to the Company's cost control initiatives. Changes in exchange rates impacted general and administrative expenses in Q3'09 favorably by $2.2 million from Q3'08.

The Company previously announced it would incur expenses to rationalize its cost structure to the changing economic environment. During the quarter the Company recorded a $16.8 million restructuring charge with $13.5 million of severance costs related to a reduction in work force, of which approximately $5.5 million was paid in cash during the quarter, and $3.3 million relating to the consolidation of premises.

Excluding the previously mentioned restructuring costs of $16.8 million, Q3'09 operating income was $5.5 million. Including the restructuring charge, the Company recorded an operating loss of $11.3 million in Q3'09 compared to operating income of $21.2 million in Q3'08, a decrease of $32.5 million.

Balance Sheet and Liquidity

Cash, cash equivalents and marketable securities were $289.9 million at January 31, 2009 compared to $298.3 million at January 31, 2008. The Company generated $18.3 million of cash flow in Q3'09.

During the quarter, given the severity and duration of the decline in the market value of marketable securities held on behalf of participants in certain long-term compensation programs, management recorded an impairment charge of $15.3 million to interest and other (loss) income. Because the impaired assets mirror liabilities to participants which have previously been adjusted to the market value of the assets, this non-cash charge does not impact the Company's operations, operating income or liquidity.

Interest expense was $1.3 million in Q3'09 and $1.2 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)
                                        Third Quarter         Year to date
                                      Q3'09      Q3'08      Q3'09      Q3'08
                                      -----      -----      -----      -----
    Fee revenue                      $116.6     $173.0     $451.4     $501.9
    Revenue                          $123.3     $179.9     $474.0     $523.1
    Operating income                   $5.2      $29.0      $63.5      $94.7
    Operating margin                    4.5%      16.8%      14.1%      18.9%
    Average number of consultants       516        521        521        512
    Engagements (a)                   1,217      1,830      4,806      5,483

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



    Adjusted Results (b):             Third                Year to
                                     Quarter                date
                                      Q3'09                 Q3'09
                                      -----                 -----
    Operating income                  $16.3                 $74.6
    Operating margin                   14.0%                 16.5%

    (b)  Adjusted results are non-GAAP financial measures that exclude
         restructuring charges of $11.1 million (see attached
         reconciliation).

Fee revenue was $116.6 million in Q3'09, a decrease of $56.4 million, or 32.6% from $173.0 million in Q3'08 (and a decrease of 27.6% on a constant currency basis). Fee revenue decreased in all regions due to a decrease in the overall number of engagements billed and an overall decrease of 11.1% in the average fee per engagement.

The Q3'09 operating income includes restructuring costs of $11.1 million without which operating income would have been $16.3 million. Operating income was $5.2 million in Q3'09 compared to $29.0 million in Q3'08, resulting in a decrease of $23.8 million from the prior year.

The total number of consultants at January 31, 2009 was 497, a decrease of 21 from January 31, 2008.



    Selected Futurestep Data
    (dollars in millions)
                                     Third Quarter       Year to date
                                   Q3'09      Q3'08    Q3'09      Q3'08
                                   -----      -----    -----      -----
    Fee revenue                    $19.6      $28.2    $79.8      $80.5
    Revenue                        $21.2      $32.2    $87.7      $92.1
    Operating (loss) income        $(8.3)      $2.0    $(4.2)      $5.6
    Operating margin              (42.5%)       7.1%   (5.3%)       7.0%



    Adjusted Results (a):          Third               Year to
                                  Quarter               date
                                   Q3'09                Q3'09
                                   -----                -----
    Operating (loss) income        $(2.5)               $1.5
    Operating margin               (12.9%)               1.9%

    (a)  Adjusted results are non-GAAP financial measures that exclude
         restructuring charges of $5.8 million (see attached reconciliation).

Fee revenue was $19.6 million in Q3'09, a decrease of $8.6 million, or 30.5% (and a decrease of 21.3% on a constant currency basis), from $28.2 million in Q3'08. 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 Q3'09 operating loss includes restructuring costs of $5.8 million without which the operating loss would have been $2.5 million. Operating loss was $8.3 million in Q3'09 compared to operating income of $2.0 million in Q3'08.

Outlook

The global economic crisis has had a significant impact on many of our client's people initiatives; as such, the demand for the Company's suite of services experienced a precipitous decline in the last eight weeks of calendar 2008. Although the demand for the Company's services has remained relatively consistent over the past two months, the macroeconomic climate remains uncertain. The Company plans to take further steps including a reduction of work force and possible consolidation of premises in Q4'09 to align its cost structure with anticipated revenue levels and currently plans to incur $10 million to $13 million of expenses to implement these steps. Based on new business confirmed subsequent to the end of Q3'09, revenues would be approximately $110 million in Q4'09. However, this presumes an equivalent level of confirmations for the remainder of Q4'09. Given the unprecedented economic environment, 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 stock compensation. To the extent that business conditions continue to decline, further efforts to align the Company's cost structure may not occur in time to retain positive cash flows by that measure in the final quarter of the fiscal year.

Earnings Conference Call Webcast

The earnings conference call will be held today at 9:00 AM (EDT) and hosted by Gary Burnison, Chief Executive Officer, and Stephen Giusto, Chief Financial Officer. 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 more than 90 offices in 40 countries, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to identify, deploy, develop, retain and reward their talent. For more information on the Korn/Ferry International family of companies, visit www.kornferry.com.

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 and operating margin, adjusted to exclude restructuring charges, and adjusted net income, basic earnings per share and diluted earnings per share, adjusted to exclude restructuring charges and an impairment charge on marketable securities.

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.



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


                                  Three Months Ended   Nine Months Ended
                                     January 31,         January 31,
                                     ----------         -----------
                                   2009      2008      2009      2008
                                   ----      ----      ----      ----

    Fee revenue                 $136,210  $201,156   $531,243  $582,366
    Reimbursed out-of-pocket
     engagement expenses           8,283    10,935     30,459    32,826
                                   -----    ------     ------    ------
        Total revenue            144,493   212,091    561,702   615,192

    Compensation and benefits     93,978   138,594    365,849   391,984
    General and administrative
     expense                      30,963    35,255     97,316   101,168
    Out-of-pocket engagement
     expenses                     11,041    14,250     39,071    42,664
    Depreciation and amortization  2,924     2,812      8,637     7,701
    Restructuring charges         16,845         -     16,845         -
                                  ------     -----     ------     -----
        Total operating expense  155,751   190,911    527,718   543,517
                                 -------   -------    -------   -------
    Operating (loss) income      (11,258)   21,180     33,984    71,675

    Interest and other (loss)
     income, net                 (16,061)    3,777    (16,865)    6,074
                                 -------     -----    -------     -----

        (Loss) income before
         (benefit) provision for
         income taxes and
         equity in earnings of
         unconsolidated
         subsidiaries            (27,319)   24,957     17,119    77,749
    (Benefit) provision for
     income taxes                 (4,549)    9,353     12,327    29,753
    Equity in earnings of
     unconsolidated
     subsidiaries, net               414       652      2,316     2,469
                                     ---       ---      -----     -----
        Net (loss) income       $(22,356)  $16,256     $7,108   $50,465
                                ========   =======     ======   =======

    Basic (loss) earnings
     per common share             $(0.52)    $0.38      $0.16     $1.14
                                  ======     =====      =====     =====

    Basic weighted average
     common shares
     outstanding                  43,406    43,247     43,538    44,273
                                  ======    ======     ======    ======

    Diluted (loss) earnings
     per common share             $(0.52)    $0.37      $0.16     $1.10
                                  ======     =====      =====     =====

    Diluted weighted average
     common shares outstanding    43,406    44,303     44,352    45,839
                                  ======    ======     ======    ======



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


                                        Three Months Ended
                                            January 31,
                                            -----------
                              2009 - As                    2009 - As
                               Reported     Adjustments     Adjusted
                              ----------    -----------    ----------

    Fee revenue                 $136,210                     $136,210
    Reimbursed out-of-pocket
     engagement expenses           8,283                        8,283
                                   -----                        -----
        Total revenue            144,493                      144,493

    Compensation and benefits     93,978                       93,978
    General and administrative
     expense                      30,963                       30,963
    Out-of-pocket engagement
     expenses                     11,041                       11,041
    Depreciation and
     amortization                  2,924                        2,924
    Restructuring charges (1)     16,845      (16,845)              -
                                  ------                        -----
        Total operating expense  155,751      (16,845)        138,906
                                 -------                      -------
    Operating (loss) income      (11,258)                       5,587

    Interest and other (loss)
     income, net (2)             (16,061)      15,348            (713)
                                 -------                         ----
        (Loss) income before
         (benefit) provision
         for income taxes
         and equity in earnings
         of unconsolidated
         subsidiaries            (27,319)                       4,874
    (Benefit) provision for
     income taxes (3)             (4,549)       6,381           1,832
    Equity in earnings of
     unconsolidated
     subsidiaries, net               414                          414
                                     ---                          ---
        Net (loss) income       $(22,356)                      $3,456
                                ========                       ======

    Basic (loss) earnings
     per common share             $(0.52)                       $0.08
                                  ======                        =====

    Basic weighted average
     common shares
     outstanding                  43,406                       43,406
                                  ======                       ======

    Diluted (loss) earnings
     per common share             $(0.52)                       $0.08
                                  ======                        =====

    Diluted weighted average
     common shares
     outstanding                  43,406                       43,406
                                  ======                       ======



                                         Nine Months Ended
                                            January 31,
                                            -----------
                               2009 - As                    2009 - As
                               Reported     Adjustments     Adjusted
                              ----------    -----------    ----------

    Fee revenue                 $531,243                     $531,243
    Reimbursed out-of-pocket
     engagement expenses          30,459                       30,459
                                  ------                       ------
        Total revenue            561,702                      561,702

    Compensation and benefits    365,849                      365,849
    General and administrative
     expense                      97,316                       97,316
    Out-of-pocket engagement
     expenses                     39,071                       39,071
    Depreciation and
     amortization                  8,637                        8,637
    Restructuring charges (1)     16,845      (16,845)              -
                                  ------                            -
         Total operating
          expense                527,718      (16,845)        510,873
                                 -------                      -------
    Operating (loss) income       33,984                       50,829

    Interest and other (loss)
     income, net (2)             (16,865)      15,893            (972)
                                 -------                         ----
        (Loss) income before
         (benefit) provision
         for income taxes
         and equity in earnings
         of unconsolidated
         subsidiaries             17,119                       49,857
    (Benefit) provision for
     income taxes (3)             12,327        6,401          18,728
    Equity in earnings of
     unconsolidated
     subsidiaries, net             2,316                        2,316
                                   -----                        -----
        Net (loss) income         $7,108                      $33,445
                                  ======                      =======

    Basic (loss) earnings
     per common share              $0.16                        $0.77
                                   =====                        =====

    Basic weighted average common
     shares outstanding           43,538                       43,538
                                  ======                       ======

    Diluted (loss) earnings
     per common share              $0.16                        $0.75
                                   =====                        =====

    Diluted weighted average
     common shares
     outstanding                  44,352                       44,352
                                  ======                       ======

    Explanation of Non-GAAP Adjustments
    -----------------------------------
    For the three and nine months ended January 31, 2009:
      (1) Restructuring charges
      (2) Asset impairment on marketable securities
      (3) Tax effect related to net operating expense adjustments



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

                                         Three Months Ended
                                             January 31,
                                       2009               2008
                                       ----               ----

    Fee Revenue:
    Executive recruitment:
      North America                 $66,978            $94,812
      EMEA                           30,423             46,292
      Asia Pacific                   13,591             25,322
      South America                   5,650              6,617
                                      -----              -----
    Total executive recruitment     116,642            173,043
    Futurestep                       19,568             28,113
                                     ------             ------
      Total fee revenue             136,210            201,156
    Reimbursed out-of-pocket
     engagement expenses              8,283             10,935
                                      -----             ------
      Total revenue                $144,493           $212,091
                                   ========           ========

    Operating (Loss) Income:                 Margin             Margin
                                             ------             ------
    Executive recruitment:
      North America                 $10,767    16.1%   $16,167    17.1%
      EMEA                           (6,291)  (20.7%)    7,116    15.4%
      Asia Pacific                      367     2.7%     5,444    21.5%
      South America                     373     6.6%       291     4.4%
                                        ---                ---
    Total executive recruitment       5,216     4.5%    29,018    16.8%
    Futurestep                       (8,309)  (42.5%)    2,026     7.2%
    Corporate                        (8,165)            (9,864)
                                     ------             ------
      Total operating
       (loss) income               $(11,258)   (8.3%)  $21,180    10.5%
                                   ========            =======


    Restructuring Charges:
    Executive recruitment:
      North America                  $2,557     3.8%        $-     0.0%
      EMEA                            6,606    21.7%         -     0.0%
      Asia Pacific                      947     7.0%         -     0.0%
      South America                     956    16.9%         -     0.0%
                                        ---                  -
    Total executive recruitment      11,066     9.5%         -     0.0%
    Futurestep                        5,779    29.6%         -     0.0%
    Corporate                             -                  -
                                        ---                ---
       Total operating income       $16,845    12.4%        $-     0.0%
                                    =======                ===


    Adjusted Operating Income:
      (Excluding Restructuring
       charges)                              Margin             Margin
                                             ------             ------
    Executive recruitment:
      North America                 $13,324    19.9%   $16,167    17.1%
      EMEA                              315     1.0%     7,116    15.4%
      Asia Pacific                    1,314     9.7%     5,444    21.5%
      South America                   1,329    23.5%       291     4.4%
                                      -----                ---
    Total executive recruitment      16,282    14.0%    29,018    16.8%
    Futurestep                       (2,530)  (12.9%)    2,026     7.2%
    Corporate                        (8,165)            (9,864)
                                     ------             ------
       Total adjusted
        operating income             $5,587     4.1%   $21,180    10.5%
                                     ======            =======



                                          Nine Months Ended
                                             January 31,
                                       2009               2008
                                       ----               ----

    Fee Revenue:
    Executive recruitment:
      North America                $252,649           $276,988
      EMEA                          122,499            133,072
      Asia Pacific                   56,181             72,639
      South America                  20,063             19,184
                                     ------             ------
    Total executive recruitment     451,392            501,883
    Futurestep                       79,851             80,483
                                     ------             ------
      Total fee revenue             531,243            582,366
    Reimbursed out-of-pocket
     engagement expenses             30,459             32,826
                                     ------             ------
      Total revenue                $561,702           $615,192
                                   ========           ========

    Operating (Loss) Income:                 Margin             Margin
                                             ------             ------
    Executive recruitment:
      North America                 $45,601    18.0%   $57,346    20.7%
      EMEA                            8,105     6.6%    20,871    15.7%
      Asia Pacific                    7,110    12.7%    14,595    20.1%
      South America                   2,667    13.3%     1,836     9.6%
                                      -----              -----
    Total executive recruitment      63,483    14.1%    94,648    18.9%
    Futurestep                       (4,233)   (5.3%)    5,642     7.0%
    Corporate                       (25,266)           (28,615)
                                    -------            -------
       Total operating
        (loss) income               $33,984     6.4%   $71,675    12.3%
                                    =======            =======


    Restructuring Charges:
    Executive recruitment:
      North America                  $2,557     1.1%        $-     0.0%
      EMEA                            6,606     5.4%         -     0.0%
      Asia Pacific                      947     1.6%         -     0.0%
      South America                     956     4.7%         -     0.0%
                                        ---                ---
    Total executive recruitment      11,066     2.4%         -     0.0%
    Futurestep                        5,779     7.2%         -     0.0%
    Corporate                             -                  -
                                        ---                ---
       Total operating income       $16,845     3.2%        $-     0.0%
                                    =======                ===


    Adjusted Operating Income:
      (Excluding Restructuring
       charges)                              Margin             Margin
                                             ------             ------
    Executive recruitment:
      North America                 $48,158    19.1%   $57,346    20.7%
      EMEA                           14,711    12.0%    20,871    15.7%
      Asia Pacific                    8,057    14.3%    14,595    20.1%
      South America                   3,623    18.0%     1,836     9.6%
                                      -----              -----
    Total executive recruitment      74,549    16.5%    94,648    18.9%
    Futurestep                        1,546     1.9%     5,642     7.0%
    Corporate                       (25,266)           (28,615)
                                    -------            -------
       Total adjusted
        operating income            $50,829     9.6%   $71,675    12.3%
                                    =======            =======



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


                                                 As of            As of
                                            January 31, 2009  April 30, 2008
                                            ----------------  --------------
                                               (unaudited)
    ASSETS
    ------
    Cash and cash equivalents                    $217,486        $305,296
    Marketable securities                           2,094           5,940
    Receivables due from clients,
     net of allowance for doubtful
     accounts of $12,501 and $11,504,
     respectively                                  98,200         119,952
    Income taxes and other receivables              6,247           7,071
    Deferred income taxes                          11,636          10,401
    Prepaid expenses and other assets              21,949          20,057
                                                   ------          ------
        Total current assets                      357,612         468,717
                                                  -------         -------

    Marketable securities, non-current             70,299          78,026
    Property and equipment, net                    32,395          32,462
    Cash surrender value of
     company owned life insurance
     policies, net of loans                        62,437          81,377
    Deferred income taxes                          35,072          47,128
    Goodwill                                      131,997         142,699
    Intangible assets, net                         17,146          15,519
    Other assets                                   28,112          14,286
                                                   ------          ------
        Total assets                             $735,070        $880,214
                                                 ========        ========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    ------------------------------------
    Accounts payable                               $9,191         $15,309
    Income taxes payable                            1,180          20,948
    Compensation and benefits payable             113,394         199,081
    Other accrued liabilities                      38,143          37,120
                                                   ------          ------
         Total current liabilities                161,908         272,458
                                                  -------         -------

    Deferred compensation and other
     retirement plans                             100,667         105,719
    Other liabilities                               5,677           5,903
                                                    -----           -----
        Total liabilities                         268,252         384,080

    Shareholders' equity

      Common stock: $0.01 par value, 150,000
       shares authorized, 56,085 and 54,786
       shares issued and 44,696 and 44,593
       shares outstanding, respectively           365,172         358,568
      Retained earnings                           102,122          95,014
      Accumulated other comprehensive income           64          43,097
                                                       --          ------
        Shareholders' equity                      467,358         496,679
      Less:  notes receivable from
       shareholders                                  (540)           (545)
                                                     ----            ----
          Total shareholders' equity              466,818         496,134
                                                  -------         -------
          Total liabilities and
           shareholders' equity                  $735,070        $880,214
                                                 ========        ========



SOURCE Korn/Ferry International
CONTACT: investor relations, Stephen Giusto, +1-310-843-4144, or Gregg
Kvochak, +1-310-556-8550, or media, Mike Distefano, +1-310-843-4199, all for
Korn/Ferry International
Web Site: http://www.kornferry.com

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