December 9, 2004 - PRESS RELEASE - 8-K: Current report filing

Exhibit 99.1


For Immediate Release
		Contacts: For investors:
		Gary Burnison (310) 226-2613
		For media:
		Anneli S. Ballard (212) 984-9350

Korn/Ferry International Announces a 42% increase in

Second Quarter Fiscal 2005 Fee Revenue

Highlights:

Fee revenue was $108.5 million, an increase of 42% from $76.7 million in the prior year second quarter.

Operating income tripled to $15.5 million over the prior year second quarter.

Diluted earnings per share of $0.21 improved $0.15 compared to prior year second quarter.

Los Angeles, CA, December 8, 2004 - Korn/Ferry International (NYSE:KFY), a leading provider of recruitment and leadership development services, announced second quarter fiscal 2005 diluted earnings per share of $0.21 compared to $0.06 in Q204.

Not only is overall demand for recruitment services up, but we are seeing an increase of activity in every product offering and in every region we serve, said Paul C. Reilly, Chairman and CEO of Korn/Ferry International. It appears that many companies are moving into growth mode and recruitment and development activity is on the rise.

Financial Results

Actual and Adjusted Results

(dollars in millions, except per share amounts)


	Second Quarter						Year to Date
	Actual						Actual						Adjusted (a)
	Q205			Q204			Q205			Q204			Q204
Fee Revenue	$	108.5		$	76.7		$	211.3		$	149.2		$	149.2
Revenue	$	113.5		$	82.0		$	221.7		$	160.3		$	160.3
Operating Income (Loss)	$	15.5		$	5.2		$	30.1		$	(1.7	)	$	6.8
Operating Margin		14.3	%		6.7	%		14.2	%		(1.2	)%		4.5	%
Net Income (Loss)	$	8.7		$	2.2		$	17.1		$	(7.2	)	$	1.3
Basic Earnings (Loss) Per Share		0.23		$	0.06			0.45		$	(0.19	)	$	0.03
Diluted Earnings (Loss) Per Share		0.21		$	0.06			0.40		$	(0.19	)	$	0.03

Adjusted amounts are non-GAAP financial measures and exclude restructuring charges of $8.5 million for the six months ended October 31, 2003. These charges primarily related to severance and facility charges and did not affect fee revenue or revenue. Korn/Ferry presents adjusted amounts as alternative measures to the actual amounts for comparison purposes. Korn/Ferry uses the adjusted amounts to analyze its operating results since it believes that the restructuring charges do not reflect, and make it difficult to compare, Korn/Ferrys ongoing operations over various quarters.

Fiscal second quarter fee revenue of $108.5 million increased $31.8 million or 42% from Q204 of $76.7 million. The increase in fee revenue, across all regions, is primarily attributable to an increase in the number of new engagements opened and an increase in average fees. Exchange rates impacted fee revenue favorably by $3.0 million.

Compensation and benefits expense of $69.0 million increased $17.6 million, or 34%, compared to $51.4 million in Q204. The increase reflects an increase in bonus expense as a result of increased profitability, an increase in existing employees salary base as well as an increase due to new consultants hired. Exchange rates impacted compensation and benefit expense unfavorably by $1.7 million.

General and administrative expense was $21.4 million compared to $17.5 million in Q204. The increase of $3.9 million, or 22%, is primarily due to the increase in provision for bad debts resulting from an increase in fee revenue as well as an increase in accounts receivable of $23.4 million from prior year. The increase was also attributed to an increase in professional fees.

Operating income of $15.5 million improved $10.3 million compared to Q204.

Balance Sheet and Liquidity

Cash and cash equivalents and marketable securities was $122.3 million at October 31, 2004 compared to $108.1 million at April 30, 2004.

Interest expense, primarily related to the borrowings under Company Owned Life Insurance (COLI) policies and Korn/Ferrys convertible securities, was $2.7 million in the current quarter, consistent with prior year. At October 31, 2004, Korn/Ferry had no outstanding borrowings under its credit facility.

Results by Segment

Selected Executive Recruitment Data - Actual and Adjusted

(dollars in millions)


	Second Quarter						Year to Date
	Actual						Actual						Adjusted (a)
	Q205			Q204			Q205			Q204			Q204
Fee revenue	$	95.5		$	69.2		$	186.6		$	133.7		$	133.7
Revenue	$	99.8		$	73.5		$	195.4		$	142.9		$	142.9
Operating Income	$	19.3		$	9.2		$	38.5		$	10.7		$	16.1
Operating Margin		20.2	%		13.2	%		20.6	%		8.0	%		12.0	%
Average number of consultants		395			384			395			388			388
Engagements (b)		1,485			1,348			3,007			2,501			2,501

Adjusted amounts are non-GAAP financial measures and exclude restructuring charges of $5.4 million for the six months ended October 31, 2003. These charges primarily related to severance and facility charges and did not affect fee revenue or revenue. Korn/Ferry presents adjusted amounts as alternative measures to the actual amounts for comparison purposes. Korn/Ferry uses the adjusted amounts to analyze its operating results since it believes that the restructuring charges do not reflect, and make it difficult to compare, Korn/Ferrys ongoing operations over various quarters.

b)	Represents new engagements opened in the respective period.

Second quarter fee revenue was $95.5 million, an increase of $26.3 million or 38% from $69.2 million in Q204. The increase in fee revenue is due to an increase in the number of new engagements opened and an increase in average fees. Exchange rates impacted fee revenue favorably by $2.4 million.

Executive recruitment operating income was $19.3 million in the current quarter, an increase of $10.1 million compared to Q204 of $9.2 million.

The total number of consultants at October 31, 2004 was 398, an increase of 13 consultants compared to October 31, 2003.

Selected Futurestep Data - Actual and Adjusted

(dollars in millions)


	Second Quarter						Year to Date
	Actual						Actual						Adjusted (a)
	Q205			Q204			Q205			Q204			Q204
Fee revenue	$	13.0		$	7.5		$	24.7		$	15.6		$	15.6
Revenue	$	13.8		$	8.4		$	26.4		$	17.4		$	17.4
Operating Income (loss)	$	2.4		$	0.5		$	4.3		$	(3.0	)
Operating Margin		18.4	%		6.4	%		17.4	%		(19.6	)%			%

Adjusted amounts are non-GAAP financial measures and exclude restructuring charges of $3.0 million for the six months ended October 31, 2003. These charges related to severance and write-off of assets and facility charges and did not affect fee revenue or revenue. Korn/Ferry presents adjusted amounts as alternative measures to the actual amounts for comparison purposes. Korn/Ferry uses the adjusted amounts to analyze its operating results since it believes that the restructuring charges do not reflect, and make it difficult to compare, Korn/Ferrys ongoing operations over various quarters.

Second quarter fee revenue was $13.0 million, an increase of $5.5 million, or 73%, from Q204. Fee revenue increased in all regions driven by Futuresteps strategic movement toward outsourced recruiting solutions.

Futurestep operating income was $2.4 million compared to $0.5 million in Q204.

Outlook

Assuming constant foreign exchange rates, Korn/Ferry estimates that third quarter fiscal 2005 fee revenue is likely to be in the range of $100 million to $108 million and earnings per share is likely to be in the range of $0.16 to $0.21.

Earnings Conference Call Webcast

The earnings conference call will be held today at 10:00 AM (EST) and hosted by Paul Reilly, Chairman and CEO, and Gary Burnison, Chief Operating 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 70 offices in 35 countries, is a leading provider of executive search and leadership development solutions. Based in Los Angeles, the firm partners with clients worldwide to deliver unparalleled senior-level search, management assessment, coaching and development and middle management recruitment services through its Futurestep subsidiary. For more information, visit the Korn/Ferry International Web site at www.kornferry.com or the Futurestep Web site at www.futurestep.com.

Statements in this press release and our conference call that relate to future results and events (forward-looking statements) are based on Korn/Ferrys 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 which 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, risks related to the growth and results of Futurestep, 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/Ferrys 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.

[Tables attached]

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)


	Three Months Ended October 31,						Six Months Ended October 31,
	2004			2003			2004			2003
Fee revenue	$	108,506		$	76,650		$	211,313		$	149,237
Reimbursed out-of-pocket engagement expense		5,036			5,315			10,412			11,061

Total revenue		113,541			81,965			221,724			160,298

Compensation and benefits		69,009			51,355			133,885			102,673
General and administrative expense		21,402			17,492			42,246			34,302
Out-of-pocket engagement expense		5,520			5,460			11,158			11,256
Depreciation and amortization		2,140			2,500			4,382			5,287
Restructuring charges											8,526

Total operating expense		98,071			76,807			191,671			162,044

Operating income (loss)		15,470			5,158			30,053			(1,746	)

Interest and other (expense) income, net		(2,348	)		(2,705	)		(4,497	)		(4,953	)

Income (Loss) before provision for income taxes and equity in earnings of unconsolidated subsidiaries		13,123			2,453			25,557			(6,699	)
Provision for income taxes		4,905			475			9,391			931
Equity in earnings of unconsolidated subsidiaries		492			243			915			414

Net income (loss)	$	8,710		$	2,221		$	17,081		$	(7,216	)

Interest expense on convertible securities, net of taxes		785			254			1,560		$	1,010

Net income (loss) adjusted for computation of diluted EPS	$	9,495		$	2,475		$	18,641		$	(6,206	)

Basic net income (loss) per common share	$	0.23		$	0.06		$	0.45		$	(0.19	)

Basic weighted average common shares outstanding		38,399			37,491			38,100			37,457

Diluted net income (loss) per common share	$	0.21		$	0.06		$	0.40		$	(0.19	)

Diluted weighted average common shares outstanding		46,262			39,669			46,349			37,457

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

FINANCIAL SUMMARY BY SEGMENT

(in thousands)


	Three Months Ended October 31,										Six Months Ended October 31,
	2004					2003					2004					2003
Fee Revenue:
Executive recruitment:
North America	$	55,657				$	40,615				$	107,313				$	77,022
Europe		23,837					17,860					48,655					36,015
Asia/Pacific		13,554					8,314					26,056					16,321
South America		2,497					2,380					4,603					4,301

Total executive recruitment		95,546					69,169					186,628					133,659
Futurestep		12,960					7,481					24,685					15,578

Total fee revenue		108,506					76,650					211,313					149,237

Reimbursed out-of-pocket engagement expenses		5,036					5,315					10,412					11,061

Total revenue	$	113,541				$	81,965				$	221,724				$	160,298


				Margin					Margin					Margin					Margin
Operating Income (Loss):
Executive recruitment:
North America	$	11,957		21	%	$	8,260		20	%	$	24,057		22	%	$	14,074		18	%
Europe		4,022		17	%		324		2	%		8,583		18	%		(4,563	)	(13	)%
Asia/Pacific		3,064		23	%		217		3	%		5,262		20	%		816		5	%
South America		272		11	%		350		15	%		552		12	%		342		8	%

Total executive recruitment		19,314		20	%		9,151		13	%		38,453		21	%		10,669		8	%
Futurestep		2,383		18	%		479		6	%		4,293		17	%		(3,052	)	(20	)%
Corporate		(6,227	)				(4,472	)				(12,693	)				(9,363	)

Total operating income (loss)	$	15,470		14	%	$	5,158		7	%	$	30,053		14	%	$	(1,746	)	(1	)%


				Margin					Margin					Margin					Margin
*Adjusted Operating Income (Loss):
Executive recruitment:
North America	$	11,957		21	%	$	8,260		20	%	$	24,057		22	%	$	14,338		19	%
Europe		4,022		17	%		324		2	%		8,583		18	%		347		1	%
Asia/Pacific		3,064		23	%		217		3	%		5,262		20	%		976		6	%
South America		272		11	%		350		15	%		552		12	%		400		9	%

Total executive recruitment		19,314		20	%		9,151		13	%		38,453		21	%		16,061		12	%
Futurestep		2,383		18	%		479		6	%		4,293		17	%		(70	)	(0	)%
Corporate		(6,227	)				(4,472	)				(12,693	)				(9,211	)

Total adjusted operating income	$	15,470		14	%	$	5,158		7	%	$	30,053		14	%	$	6,780		5	%

Adjusted operating income (loss) excludes restructuring charges related to severance and facilities of $8.5 million for the three and six months ended October 31, 2003. Executive recruitment, Futurestep and Corporate restructuring charges were $5.4 million, $3.0 million and $0.1 million, respectively, for the three and six months ended October 31, 2003.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	As of October 31, 2004			As of April 30, 2004
ASSETS
Cash and cash equivalents	$	116,219		$	108,102
Marketable Securities		6,092
Receivables due from clients, net of allowance for doubtful accounts of $8,894 and $6,159		71,858			52,306
Income taxes and other receivables		6,743			5,812
Deferred income taxes		9,320			9,320
Prepaid expenses		11,938			10,128

Total current assets		222,170			185,668

Property and equipment, net		19,209			19,603
Cash surrender value of company owned life insurance policies, net of loans		60,503			58,868
Deferred income taxes		27,996			27,352
Goodwill		101,945			98,481
Deferred financing costs, investments and other		8,177			7,670

Total assets	$	440,000		$	397,642

LIABILITIES AND SHAREHOLDERS EQUITY
Accounts payable	$	8,530		$	8,676
Income taxes payable		10,569			2,956
Compensation and benefits payable		56,076			60,957
Other accrued liabilities		29,115			24,785

Total current liabilities		104,290			97,374

Deferred compensation and other retirement plans		56,676			53,018
Long-term debt		44,852			44,400
Other liabilities		8,649			11,456
7.5% Convertible mandatorily redeemable preferred stock, net of unamortized discount and issuance costs, redemption value $11,674		10,698			10,512

Total liabilities		225,165			216,760

Shareholders equity
Common stock: $0.01 par value, 150,000 shares authorized, 40,223 and 39,363 shares issued and 39,074 and 38,170 shares outstanding		318,782			307,003
Retained deficit		(104,123	)		(121,204	)
Unearned restricted stock compensation		(4,982	)		(2,341	)
Accumulated other comprehensive loss		5,932			(1,596	)

Shareholders equity		215,609			181,862
Less: Notes receivable from shareholders		(774	)		(980	)

Total shareholders equity		214,835			180,882

Total liabilities and shareholders equity	$	440,000		$	397,642

Form: 8-K

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