December 6, 2006 - PRESS RELEASE - 8-K: Current report filing

Exhibit 99.1

For Immediate Release

Contacts: For investors:

Gary Burnison (310) 226-2613

For media:

Anneli Ballard (212) 984-9350

Korn/Ferry International Achieves a 24% increase in Fee

Revenue in the Second Quarter

Highlights

Second quarter fiscal 2007 fee revenue of $155.7 million increased $29.9 million, or 24%, from $125.8 million in the same quarter last year.

Adjusted second quarter fiscal 2007 diluted earnings per share, which excludes the impact of the implementation of SFAS 123(R), was $0.33, an increase of 32% over Q206 diluted earnings per share of $0.25. Q207 actual diluted earnings per share was $0.31 compared to $0.25 in the prior year second quarter.

Los Angeles, CA, December 6, 2006 - Korn/Ferry International (NYSE:KFY), a premier global provider of talent management solutions, announced second quarter fiscal 2007 diluted earnings per share of $0.31 compared to $0.25 in Q206. Diluted earnings per share was $0.33 in Q207 excluding the effect of SFAS 123(R).

These are quite exciting times at Korn/Ferry, said Paul C. Reilly, Chairman and CEO. Demand for talent remains strong around the world and we have been pleased with the favorable acceptance by our clients to our non-search related offerings. Despite normal year-end seasonality, we are optimistic about the second half of our Fiscal Year.

Financial Results

(dollars in millions, except per share amounts)


	Second Quarter						Year to Date
	Q207			Q206			Q207			Q206
Fee Revenue	$	155.7		$	125.8		$	308.5		$	248.0
Revenue	$	164.8		$	132.9		$	325.9		$	262.0
Operating Income	$	21.1		$	18.1		$	41.5		$	36.8
Operating Margin		13.6	%		14.4	%		13.5	%		14.9	%
Net Income	$	13.6		$	10.9		$	27.2		$	22.5
Basic Earnings Per Share		0.35			0.27			0.70			0.57
Diluted Earnings Per Share		0.31			0.25			0.62			0.51
Adjusted Results*
Net Income	$	14.4					$	29.3
Operating Margin		14.5	%					14.5	%
Diluted Earnings Per Share	$	0.33					$	0.66

Adjusted results exclude the effect of SFAS 123(R), which was implemented in Q107. This is a non-GAAP measure that is provided for comparative purposes and is not intended to replace Net Income or EPS measured in accordance with U.S. Generally Accepted Accounting Principles (see attached reconciliation).

Fee revenue of $155.7 million in Q207 increased $29.9 million, or 24%, from $125.8 million in Q206. Fee revenue improved globally due to an increase in revenues from all segments of the business and an increase in the number of search engagements opened as well as a 7% increase in the average fee billed per executive search engagement compared to the prior year.

Compensation and benefits of $102.1 million in Q207 increased $20.9 million, or 26%, compared to $81.2 million in Q206. The increase is a reflection of higher headcount in all segments of the Company as the business continues to grow and the Company continues to invest in its operations.

General and administrative expense of $28.3 million in Q207 increased by $4.3 million, or 18%, from $24.0 million in Q206 as a result of an overall increase in business and increased other administrative expense as compared to the same period last year.

Operating income was $21.1 million in Q207, an improvement of $3.0 million or 17%, over Q206. Adjusted for the effect of SFAS 123(R) operating margin for the quarter was 14.5%.

Balance Sheet and Liquidity

Cash, cash equivalents and marketable securities was $229.4 million at October 31, 2006 compared to $188.5 million at October 31, 2005. The increase was due to improved operating cash flows.

Interest expense was $2.6 million in both Q207 and Q206. Interest expense in both years related primarily to borrowings under Korn/Ferrys convertible securities and COLI policies. At October 31, 2006, Korn/Ferry had no outstanding borrowings under its credit facility.

Results by Segment

Selected Executive Recruitment Data

(dollars in millions)


	Second Quarter						Year to Date
	Q207			Q206			Q207			Q206
Fee revenue	$	135.1		$	109.0		$	267.5		$	214.4
Revenue	$	142.2		$	114.3		$	281.6		$	225.2
Operating Income	$	26.6		$	24.1		$	53.3		$	46.8
Operating Margin		19.7	%		22.1	%		19.9	%		21.8	%
Average number of consultants		472			427			461			415
Engagements (a)		1,656			1,535			3,375			2,947

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

Fee revenue was $135.1 million in Q207, an increase of $26.1 million, or 24%, from $109.0 million in Q206. Fee revenue improved in all regions due to an increase in the number of engagements and average fee per engagement, as compared to the same quarter last year.

Executive recruitment operating income improved $2.5 million in Q207, or 10%, to $26.6 million compared to $24.1 million in Q206. Without the $1.3 million effect of SFAS 123(R) operating income was $27.9 million, or a 16% increase over the prior year.

The total number of consultants at October 31, 2006 was 478, an increase of 46 from October 31, 2005.

Selected Futurestep Data

(dollars in millions)


	Second Quarter						Year to Date
	Q207			Q206			Q207			Q206
Fee revenue	$	20.6		$	16.8		$	41.0		$	33.6
Revenue	$	22.6		$	18.6		$	44.4		$	36.8
Operating Income	$	1.8		$	1.5		$	2.9		$	3.4
Operating Margin		9.0	%		8.7	%		7.1	%		10.1	%

Fee revenue was $20.6 million in Q207, an increase of $3.8 million, or 23%, from $16.8 million in Q206. Improvements in fee revenue were driven by an increase in the number of new engagements opened and continuing development of Futuresteps recruitment process outsourcing operations.

Futurestep had operating income of $1.8 million in Q207, an increase of $0.3 million from operating income of $1.5 million in Q206 primarily due to a shift in the mix of business to recruitment process outsourcing projects with a higher margin.

Outlook

Assuming constant foreign exchange rates, Korn/Ferry estimates that third quarter fiscal 2007 fee revenue is likely to be in the range of $150.0 million to $158.0 million and diluted earnings per share is likely to be in the range of $0.29 to $0.33.

Earnings Conference Call Webcast

The earnings conference call will be held today at 9:00 AM (EDT) and hosted by Paul C. 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 more than 70 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.

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

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended October 31,						Six Months Ended October 31,
	2006			2005			2006			2005
Fee revenue	$	155,718		$	125,789		$	308,481		$	247,990
Reimbursed out-of-pocket engagement expenses		9,069			7,143			17,452			14,037

Total revenue		164,787			132,932			325,933			262,027
Compensation and benefits		102,072			81,209			206,509			159,164
General and administrative expense		28,260			24,012			52,625			46,729
Out-of-pocket engagement expense		10,939			7,406			20,646			14,884
Depreciation and amortization		2,368			2,219			4,657			4,420

Total operating expense		143,639			114,846			284,437			225,197

Operating income		21,148			18,086			41,496			36,830
Interest and other income (expense), net		(872	)		(1,420	)		(953	)		(2,546	)

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		20,276			16,666			40,543			34,284
Provision for income taxes		7,484			6,342			15,084			12,790
Equity in earnings of unconsolidated subsidiaries		774			580			1,770			1,023

Net income	$	13,566		$	10,904		$	27,229		$	22,517

Interest expense on convertible securities, net of taxes		785			785			1,570			1,569

Net income adjusted for computation of diluted EPS	$	14,351		$	11,689		$	28,799		$	24,086

Basic earnings per common share	$	0.35		$	0.27		$	0.70		$	0.57

Basic weighted average common shares outstanding		39,018			40,054			39,019			39,719

Diluted earnings per common share	$	0.31		$	0.25		$	0.62		$	0.51

Diluted weighted average common shares outstanding		46,568			47,185			46,667			47,133

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

EXCLUDING IMPACT OF 123(R)

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended October 31,										Six Months Ended October 31,
	2006 - As Reported			123(R) Expense	2006 - As Adjusted			2005			2006 - As Reported			123(R) Expense	2006 - As Adjusted			2005
Fee revenue	$	155,718			$	155,718		$	125,789		$	308,481			$	308,481		$	247,990
Reimbursed out-of-pocket engagement expenses		9,069				9,069			7,143			17,452				17,452			14,037

Total revenue		164,787				164,787			132,932			325,933				325,933			262,027
Compensation and benefits		102,072		1,410		100,662			81,209			206,509		3,292		203,217			159,164
General and administrative expense		28,260				28,260			24,012			52,625				52,625			46,729
Out-of-pocket engagement expense		10,939				10,939			7,406			20,646				20,646			14,884
Depreciation and amortization		2,368				2,368			2,219			4,657				4,657			4,420

Total operating expense		143,639		1,410		142,229			114,846			284,437		3,292		281,145			225,197

Operating income		21,148				22,558			18,086			41,496				44,788			36,830
Interest and other income (expense), net		(872	)			(872	)		(1,420	)		(953	)			(953	)		(2,546	)

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		20,276				21,686			16,666			40,543				43,835			34,284
Provision for income taxes		7,484		530		8,014			6,342			15,084		1,238		16,322			12,790
Equity in earnings of unconsolidated subsidiaries		774				774			580			1,770				1,770			1,023

Net income	$	13,566			$	14,446		$	10,904		$	27,229			$	29,283		$	22,517

Interest expense on convertible securities, net of taxes		785				785			785			1,570				1,570			1,569

Net income adjusted for computation of diluted EPS	$	14,351			$	15,231		$	11,689		$	28,799			$	30,853		$	24,086

Basic earnings per common share	$	0.35			$	0.37		$	0.27		$	0.70			$	0.75		$	0.57

Basic weighted average common shares outstanding		39,018				39,018			40,054			39,019				39,019			39,719

Diluted earnings per common share	$	0.31			$	0.33		$	0.25		$	0.62			$	0.66		$	0.51

Diluted weighted average common shares outstanding		46,568				46,568			47,185			46,667				46,667			47,133

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

FINANCIAL SUMMARY BY SEGMENT

(in thousands)

(unaudited)


	Three Months Ended October 31,										Six Months Ended October 31,
Fee Revenue:	2006					2005					2006					2005
Executive recruitment:
North America	$	80,006				$	62,754				$	155,490				$	124,481
Europe		32,819					27,846					67,006					54,867
Asia/Pacific		18,297					14,692					36,561					28,011
South America		3,987					3,663					8,466					7,034

Total executive recruitment		135,109					108,955					267,523					214,393
Futurestep		20,609					16,834					40,958					33,597

Total fee revenue		155,718					125,789					308,481					247,990

Reimbursed out-of-pocket engagement expenses		9,069					7,143					17,452					14,037

Total revenue	$	164,787				$	132,932				$	325,933				$	262,027


Operating Income (Loss):				Margin					Margin					Margin					Margin
Executive recruitment:
North America	$	16,778		21	%	$	15,093		24	%	$	33,858		22	%	$	29,406		24	%
Europe		6,191		19	%		5,508		20	%		11,395		17	%		10,595		19	%
Asia/Pacific		3,297		18	%		3,195		22	%		6,987		19	%		5,886		21	%
South America		360		9	%		281		8	%		1,098		13	%		947		13	%

Total executive recruitment		26,626		20	%		24,077		22	%		53,338		20	%		46,834		22	%
Futurestep		1,845		9	%		1,466		9	%		2,889		7	%		3,397		10	%
Corporate		(7,323	)				(7,457	)				(14,731	)				(13,401	)

Total operating income	$	21,148		14	%	$	18,086		14	%	$	41,496		14	%	$	36,830		15	%

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)


	As of October 31, 2006			As of April 30, 2006
ASSETS
Cash and cash equivalents	$	201,263		$	257,543
Marketable securities		28,111			20,654
Receivables due from clients, net of allowance for doubtful accounts of $10,643 and $8,818, respectively		114,320			87,287
Income taxes and other receivables		5,570			5,328
Deferred income taxes		9,832			9,669
Prepaid expenses		15,297			14,019

Total current assets		374,393			394,500

Property and equipment, net		23,045			20,533
Cash surrender value of company owned life insurance policies, net of loans		72,930			70,592
Deferred income taxes		33,951			32,267
Goodwill and intangible assets, net		135,750			109,484
Deferred financing costs, investments and other		10,816			8,115

Total assets	$	650,885		$	635,491

LIABILITIES AND SHAREHOLDERS EQUITY
Accounts payable	$	12,251		$	9,731
Income taxes payable		24,169			17,138
Compensation and benefits payable		86,189			121,885
Other accrued liabilities		31,276			27,537

Total current liabilities		153,885			176,291

Deferred compensation and other retirement plans		82,076			71,790
Long-term debt		47,275			45,147
Other liabilities		6,750			7,523
7.5% Convertible mandatorily redeemable preferred stock, net of unamortized discount and issuance costs, redemption value $11,387		11,088			10,989

Total liabilities		301,074			311,740
Shareholders equity
Common stock: $0.01 par value, 150,000 shares authorized, 45,789 and 43,628 shares issued and 42,016 and 41,201 shares outstanding, respectively		358,663			344,285
Retained earnings (deficit)		4,075			(23,154	)
Unearned restricted stock compensation		(24,062	)		(7,731	)
Accumulated other comprehensive income		11,690			10,910

Shareholders equity		350,366			324,310
Less: Notes receivable from shareholders		(555	)		(559	)

Total shareholders equity		349,811			323,751

Total liabilities and shareholders equity	$	650,885		$	635,491

Form: 8-K

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