June 8, 2005 - PRESS RELEASE - 8-K: Current report filing

Exhibit 99.1

For Immediate Release

Contacts: For investors:

Gary Burnison (310) 226-2613

For media:

Michael Distefano (310) 843-4199

Korn/Ferry International Announces Record Fourth Quarter and Fiscal Year Earnings

Highlights:

Fiscal 2005 diluted earnings per share was $0.90 compared to $0.13 in the prior year. Fourth quarter fiscal 2005 diluted earnings per share was $0.27 compared to $0.21 in the prior year fourth quarter.

Net income was $38.6 million in the current year compared to $5.4 million in the prior year. Net income for the quarter was $11.7 million, an improvement of 34% from $8.7 million in the prior year.

Fiscal 2005 fee revenue was $452.2 million, an increase of $123.9 million, or 38%, from $328.3 million in the prior year. Fourth quarter fiscal 2005 fee revenue of $124.0 million, increased $26.3 million, or 27%, from $97.7 million in the prior year.

Los Angeles, CA, June 8, 2005 - Korn/Ferry International (NYSE:KFY), the leading provider of executive search, outsourced recruiting and leadership development solutions, announced fiscal 2005 diluted earnings per share of $0.90 compared to $0.13 last year. Fourth quarter fiscal 2005 diluted earnings per share was $0.27 compared to $0.21 in Q404.

Were seeing continued strong global demand for executive-level jobs despite high oil prices and volatile equity markets, said Paul C. Reilly, Chairman and CEO of Korn/Ferry. As companies have wrung out inefficiencies in the marketplace, the stronger competitive environment is heating up the war for talent. The result is a greater sense of urgency on hiring managers and increased pressure for effective talent management and retention strategies.

Financial Results

Actual and Adjusted Results

(dollars in millions, except per share amounts)


	Fourth Quarter						Year to Date
	Actual						Actual						Adjusted (a)
	Q405			Q404			FY05			FY04			FY04
Fee Revenue	$	124.0		$	97.7		$	452.2		$	328.3		$	328.3
Revenue	$	131.0		$	103.7		$	476.4		$	350.7		$	350.7
Operating Income	$	18.6		$	11.3		$	65.8		$	15.8		$	24.3
Operating Margin		15.0	%		11.6	%		14.5	%		4.8	%		7.4	%
Net Income	$	11.7		$	8.7		$	38.6		$	5.4		$	13.9
Basic Earnings Per Share	$	0.30		$	0.23		$	1.00		$	0.14		$	0.37
Diluted Earnings Per Share	$	0.27		$	0.21		$	0.90		$	0.13		$	0.35

Adjusted amounts are non-GAAP financial measures and exclude a restructuring charge of $8.5 million for the year ended April 30, 2004. 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 2005 fee revenue of $452.2 million increased $123.9 million, or 38%, from $328.3 million in the prior year. Fourth quarter fiscal fee revenue of $124.0 million increased $26.3 million, or 27%, from Q404 of $97.7 million. Fee revenue improved in all regions due to an increase in the number of new engagements opened in addition to increases in average fees. Exchange rates impacted fee revenue favorably by $12.1 million in the year and $2.6 million in the quarter compared to prior year.

Compensation and benefits expense of $292.9 million for the year increased $71.7 million, or 32%, from $221.2 million last year. For the quarter, compensation and benefits expense of $84.4 million increased $19.5 million, or 30%, compared to $64.9 million in Q404. The increase reflects additional profitability based rewards as well as an increase due to new consultants joining the firm. Exchange rates impacted compensation and benefit expense unfavorably by $7.3 million in the year and $1.7 million in the quarter compared to last year.

Fiscal 2005 general and administrative expense of $83.5 million increased $11.9 million, or 17%, from $71.6 million in the prior year. Business development costs, bad debt expenses and other professional fees increased as a result of increased business activity. The increase also reflects compliance costs associated with Section 404 Sarbanes Oxley Act. General and administrative expense for the quarter was $18.6 million, consistent with Q404.

Fiscal year operating income improved $50.0 million to $65.8 million from $15.8 million last year. Prior year operating income was impacted by $8.5 million in restructuring costs. Operating margin for the year improved to 14.5% from 4.8% last year. Operating income for the quarter was $18.6 million, an improvement of $7.3 million, or 65%, compared to Q404. Operating margin for the quarter increased to 15.0% from 11.6% in the prior year.

Balance Sheet and Liquidity

Cash, cash equivalents and marketable securities was $206.9 million at April 30, 2005 compared to $108.1 million at April 30, 2004.

Interest expense, primarily related to borrowings under Company Owned Life Insurance (COLI) policies and Korn/Ferrys convertible securities, was $10.5 million and $2.4 million in the current year and quarter, respectively, consistent with prior year. At April 30, 2005, Korn/Ferry had no outstanding borrowings under its credit facility.

Results by Segment

Selected Executive Recruitment Data - Actual and Adjusted

(dollars in millions)


	Fourth Quarter						Year to Date
	Actual						Actual						Adjusted (a)
	Q405			Q404			FY05			FY04			FY05			FY04
Fee Revenue	$	109.1		$	87.6		$	398.3		$	294.1		$	398.3		$	294.1
Revenue	$	114.6		$	92.4		$	417.9		$	312.5		$	417.9		$	312.5
Operating Income	$	24.6		$	16.2		$	84.1		$	38.2		$	82.8		$	43.6
Operating Margin		22.5	%		18.5	%		21.1	%		13.0	%		20.8	%		14.8	%
Average number of Consultants		394			382			388			380			388			380
Engagements (b)		1,722			1,628			6,372			5,427			6,372			5,427

Adjusted amounts are non-GAAP financial measures and exclude restructuring charges of ($1.3) million and $5.4 million for the year ended April 30, 2005 and 2004, respectively. 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.

Fourth quarter fee revenue was $109.1 million, an increase of $21.5 million, or 25%, from $87.6 million in Q404. Fee revenue improved in all regions due to an increase in the number of new engagements opened as well as increased average fees. Exchange rates impacted fee revenue favorably by $2.2 million in Q405 compared to Q404.

Executive recruitment operating income improved $8.4 million or 52% to $24.6 million in the quarter compared to $16.2 million in Q404. Operating margin for the quarter improved to 22.5% compared to 18.5% in the prior year.

The total number of consultants at April 30, 2005 was 398, an increase of 19 consultants from April 30, 2004.

Selected Futurestep Data - Actual and Adjusted

(dollars in millions)


	Fourth Quarter						Year to Date
	Actual						Actual						Adjusted (a)
	Q405			Q404			FY05			FY04			FY05			FY04
Fee Revenue	$	14.9		$	10.1		$	53.9		$	34.2		$	53.9		$	34.2
Revenue	$	16.4		$	11.3		$	58.5		$	38.2		$	58.5		$	38.2
Operating Income (loss)	$	1.5		$	0.9		$	6.4			($1.6	)	$	7.7		$	1.4
Operating Margin		9.9	%		8.4	%		12.1	%		(4.6	%)		14.4	%		4.1	%

Adjusted amounts are non-GAAP financial measures and exclude restructuring charges of $1.3 million and $3.0 million for the year ended April 30, 2005 and 2004, respectively. These charges 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.

Fourth quarter fee revenue was $14.9 million, an increase of $4.8 million, or 48%, from Q404. Fee revenue improved in all regions driven by an increase in the number of new engagements opened combined with Futuresteps strategic movement toward outsourced recruiting solutions.

Futurestep operating income in the quarter improved $0.6 million or 67% to $1.5 million compared to $0.9 million in Q404. Operating margin improved to 9.9% from 8.4% in Q404.

Outlook

Assuming constant foreign exchange rates, Korn/Ferry estimates that first quarter fiscal 2006 fee revenue is likely to be in the range of $120 million to $127 million and diluted earnings per share is likely to be in the range of $0.24 to $0.28.

Earnings Conference Call Webcast

The earnings conference call will be held today at 10:00 AM (EDT) 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 36 countries, is the leading provider of executive search, outsourced recruiting 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 April 30,						Year Ended April 30,
	2005			2004			2005			2004
Fee revenue	$	123,996		$	97,732		$	452,194		$	328,331
Reimbursed out-of-pocket engagement expense		7,035			5,988			24,183			22,372

Total revenue		131,031			103,720			476,377			350,703
Compensation and benefits		84,412			64,879			292,913			221,177
General and administrative expense		18,562			18,597			83,544			71,623
Out-of-pocket engagement expense		7,719			6,757			25,702			23,557
Depreciation and amortization		1,714			2,197			8,437			10,030
Restructuring charges											8,526

Total operating expense		112,407			92,430			410,596			334,913

Operating income		18,624			11,290			65,781			15,790
Interest and other (expense) income, net		(719	)		(1,392	)		(7,103	)		(8,124	)

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		17,905			9,898			58,678			7,666
Provision for income taxes		4,963			1,543			20,251			3,218
Equity in earnings of unconsolidated subsidiaries		(1,227	)		379			193			955

Net income	$	11,715		$	8,734		$	38,620		$	5,403

Interest expense on convertible securities, net of taxes		759			1,019			3,103

Net income adjusted for computation of diluted EPS	$	12,474		$	9,753		$	41,723		$	5,403

Basic earnings per common share	$	0.30			0.23		$	1.00		$	0.14

Basic weighted average common shares outstanding		39,139			37,445			38,516			37,466

Diluted earnings per common share	$	0.27		$	0.21		$	0.90		$	0.13

Diluted weighted average common shares outstanding		46,675			46,019			46,229			40,311

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

FINANCIAL SUMMARY BY SEGMENT

(in thousands)


	Three Months Ended April 30,										Year Ended April 30,
	2005					2004					2005					2004
Fee Revenue:
Executive recruitment:
North America	$	63,207				$	51,582				$	225,850				$	170,678
Europe		30,590					22,344					110,455					78,236
Asia/Pacific		12,015					11,604					51,196					36,818
South America		3,327					2,097					10,828					8,371

Total executive recruitment		109,139					87,627					398,329					294,103
Futurestep		14,857					10,105					53,865					34,228

Total fee revenue		123,996					97,732					452,194					328,331

Reimbursed out-of-pocket engagement expenses		7,035					5,988					24,183					22,372

Total revenue	$	131,031				$	103,720				$	476,377				$	350,703


				Margin					Margin					Margin					Margin
Operating Income (Loss):
Executive recruitment:
North America	$	18,156		29	%	$	12,361		24	%	$	53,635		24	%	$	35,983		21	%
Europe		4,081		13	%		2,047		9	%		19,531		18	%		(1,912	)	(2	%)
Asia/Pacific		1,989		17	%		1,948		17	%		9,594		19	%		3,998		11	%
South America		337		10	%		(139	)	(7	%)		1,320		12	%		177		2	%

Total executive recruitment		24,563		23	%		16,217		19	%		84,080		21	%		38,246		13	%
Futurestep		1,476		10	%		850		8	%		6,483		12	%		(1,574	)	(5	%)
Corporate		(7,415	)				(5,777	)				(24,782	)				(20,882	)

Total operating income	$	18,624		15	%	$	11,290		12	%	$	65,781		15	%	$	15,790		5	%


				Margin					Margin					Margin					Margin
*Adjusted Operating Income (Loss):
Executive recruitment:
North America	$	18,156		29	%	$	12,361		24	%	$	52,752		23	%	$	36,247		21	%
Europe		4,081		13	%		2,047		9	%		19,185		17	%		2,998		4	%
Asia/Pacific		1,989		17	%		1,948		17	%		9,567		19	%		4,158		11	%
South America		337		10	%		(139	)	(7	%)		1,320		12	%		235		3	%

Total executive recruitment		24,563		23	%		16,217		19	%		82,824		21	%		43,638		15	%
Futurestep		1,476		10	%		850		8	%		7,739		14	%		1,408		4	%
Corporate		(7,415	)				(5,777	)				(24,782	)				(20,730	)

Total adjusted operating income	$	18,624		15	%	$	11,290		12	%	$	65,781		15	%	$	24,316		7	%

Adjusted operating income (loss) excludes restructuring charges related to severance and facilities of $8.5 million for the year ended April 30, 2004. Executive recruitment restructuring adjustments were $(1.3) million and $5.4 million, Futurestep restructuring charges were $1.3 million and $3.0 million and Corporate restructuring charges were $0 million and $0.1 million, respectively, for the year ended April 30, 2005 and 2004, respectively.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	As of April 30, 2005			As of April 30, 2004
ASSETS
Cash and cash equivalents	$	199,133		$	108,102
Marketable Securities		7,815
Receivables due from clients, net of allowance for doubtful accounts of $7,307 and $6,159		68,942			52,306
Income taxes and other receivables		5,579			5,812
Deferred income taxes		8,864			9,320
Prepaid expenses		13,710			10,128

Total current assets		304,043			185,668

Property and equipment, net		18,287			19,603
Cash surrender value of company owned life insurance policies, net of loans		65,047			58,868
Deferred income taxes		30,889			27,352
Goodwill		107,014			98,481
Deferred financing costs, investments and other		8,362			7,670

Total assets	$	533,642		$	397,642

LIABILITIES AND SHAREHOLDERS EQUITY
Accounts payable	$	7,196		$	8,676
Income taxes payable		15,400			2,956
Compensation and benefits payable		107,009			60,957
Other accrued liabilities		28,792			24,785

Total current liabilities		158,397			97,374

Deferred compensation and other retirement plans		59,134			53,018
Long-term debt		44,949			44,400
Other liabilities		7,991			11,456
7.5% Convertible mandatorily redeemable preferred stock, net of unamortized discount and issuance costs, redemption value $11,387		10,795			10,512

Total liabilities		281,266			216,760
Shareholders equity
Common stock: $0.01 par value, 150,000 shares authorized, 41,097 and 39,363 shares issued and 39,887 and 38,170 shares outstanding		330,745			307,003
Retained deficit		(82,584	)		(121,204	)
Unearned restricted stock compensation		(4,355	)		(2,341	)
Accumulated other comprehensive income (loss)		9,679			(1,596	)

Shareholders equity		253,485			181,862
Less: Notes receivable from shareholders		(1,109	)		(980	)

Total shareholders equity		252,376			180,882

Total liabilities and shareholders equity	$	533,642		$	397,642

Form: 8-K

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