Market Overview

/C O R R E C T I O N -- Korn/Ferry International Corrects Guidance in Earnings Release

In the news release, Korn/Ferry International Announces Fourth Quarter and Fiscal 2013 Results of Operations, issued today by Korn/Ferry International over PR Newswire, we are advised by the company that the final sentence of the Outlook section should read "Excluding these charges, adjusted diluted earnings per share in the first quarter are likely to be in the range of $0.26 to $0.32 with diluted earnings per share as measured by generally accepted accounting principles likely to be in the range of $0.19 to $0.27," rather than "fourth quarter" as originally issued inadvertently. The complete, corrected release follows:

Korn/Ferry International Announces Fourth Quarter and Fiscal 2013 Results of Operations Highlights - Korn/Ferry reports record quarterly fee revenue of $227.9 million in the fourth quarter of 2013, an increase of 17% compared to Q4 FY'12, on a constant currency basis. Excluding current year acquisitions, quarterly fee revenues increased 2% on a constant currency basis. - Fee revenue in Leadership & Talent Consulting services grew 92% from Q4 FY'12 to Q4 FY'13 on a constant currency basis. Excluding current year acquisitions, fourth quarter revenues were essentially flat year-over-year, on a constant currency basis. - Fee revenue in Futurestep grew 7 %, from Q4 FY'12 to Q4 FY'13, on a constant currency basis. - For the full year of FY'13, Korn/Ferry reports record annual fee revenue of $812.8 million, an increase of 5% over FY'12, on a constant currency basis. Excluding current year acquisitions, annual fee revenues were down 1% on a constant currency basis. LOS ANGELES, June 17, 2013 /PRNewswire/ -- Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced record quarterly and annual fee revenues of $227.9 million and $812.8 million for the fourth quarter and full year of FY'13, respectively. Fourth quarter adjusted diluted earnings per share were $0.32, excluding restructuring and transaction and integration costs of $3.5 million. Full year adjusted diluted earnings per share were $1.10, excluding restructuring, transaction and integration, and separation costs of $26.5 million. Including such costs, diluted earnings per share was $0.25 and $0.70 in the three months and year ended April 30, 2013, respectively.

"I am pleased with our strategic progress and operating results for the fourth quarter, which includes accelerating the integration of our recent acquisitions as well as further diversifying and differentiating our Company. In the fourth quarter, Korn/Ferry's broader talent management offerings accounted for 40% of fee revenue which reflects the Company's transformation as a talent management consultancy," said Gary D. Burnison, CEO of Korn/Ferry International. "As global companies fight for growth and relevancy in this decade, talent will be the differentiator - Korn/Ferry is the bridge between a client's business and talent strategy - delivering solutions that help our clients with the design, building and attraction of that talent."

Financial Results

(dollars in millions, except per share amounts)

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Fee revenue $ 227.9 $ 198.1 $ 812.8 $ 790.5 Total revenue $ 238.6 $ 207.6 $ 849.7 $ 826.8 Operating income $ 15.4 $ 15.4 $ 43.9 $ 82.9 Operating margin 6.8% 7.8% 5.4% 10.5% Net income $ 12.2 $ 12.0 $ 33.3 $ 54.3 Basic earnings per share $ 0.26 $ 0.26 $ 0.71 $ 1.17 Diluted earnings per share $ 0.25 $ 0.25 $ 0.70 $ 1.15

EBITDA Results (a): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 EBITDA $ 24.3 $ 22.4 $ 71.3 $ 98.5 EBITDA margin 10.7% 11.3% 8.8% 12.5%

Adjusted Results (b): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Operating income $ 18.9 $ 17.3 $ 70.4 $ 85.7 Operating margin 8.3% 8.7% 8.7% 10.8% EBITDA (a) $ 27.8 $ 24.3 $ 97.8 $ 101.3 EBITDA margin (a) 12.2% 12.2% 12.0% 12.8% Net income $ 15.6 $ 13.3 $ 52.8 $ 56.2 Basic earnings per share $ 0.33 $ 0.28 $ 1.12 $ 1.21 Diluted earnings per share $ 0.32 $ 0.28 $ 1.10 $ 1.19

____________

(a) EBITDA refers to earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA to exclude restructuring charges, transaction and integration costs and separation costs. EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures (see attached reconciliation).

(b) Adjusted results are non-GAAP financial measures that exclude the following (see attached reconciliations):

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Restructuring charges, net of recoveries $ 2.9 $ - $ 22.8 $ 0.9 Transaction and integration costs $ 0.6 $ - $ 3.1 $ - Separation costs $ - $ 1.9 $ 0.6 $ 1.9

Fiscal 2013 Fourth Quarter Results

Fee revenue was $227.9 million in Q4 FY'13, an increase of $29.8 million, or 15%, compared to the year-ago quarter (foreign exchange rates negatively impacted fee revenue by $2.9 million), primarily driven by a $28.5 million and a $1.7 million increase in fee revenue in Leadership & Talent Consulting and Futurestep. Excluding the PDI Ninth House and Global Novations acquisitions (the "current year acquisitions"), fee revenue was $199.1 million in Q4 FY'13, an increase of 1% compared to the year-ago quarter (2% on a constant currency basis) driven by all market sectors with the largest increases in life science/healthcare, technology and the industrial sector.

Compensation and benefit expenses were $154.4 million in Q4 FY'13, an increase of $14.8 million, or 11%, compared to the year-ago quarter. The current year acquisitions contributed $18.6 million to the increase in compensation and benefit expenses, offset by a reduction of $3.8 million primarily in salaries and related payroll taxes due to lower average headcount in Executive Recruitment.

General and administrative expenses were $40.1 million in Q4 FY'13, an increase of $5.4 million, or 16%, from the year-ago quarter, resulting primarily from the current year acquisitions.

As previously disclosed, during Q4 FY'13, the Company took steps to integrate PDI Ninth House by consolidating and eliminating redundant office space around the world. As a result, the Company recorded net restructuring charges of $2.9 million in Q4 FY'13 and incurred transaction and integration costs of $0.6 million in Q4 FY'13. Excluding these costs, adjusted EBITDA was $27.8 million during Q4 FY'13, an increase of $3.5 million, or 14%, compared to Q4 FY'12. Adjusted EBITDA margin was 12.2% in both periods.

On a GAAP basis, operating income was $15.4 million in both Q4 FY'13 and Q4 FY'12 resulting in a margin of 6.8% in the current quarter compared to 7.8% in the year-ago quarter.

Fiscal 2013 Results

Fee revenue was $812.8 million in FY'13, an increase of $22.3 million, or 3%, compared to FY'12 (foreign exchange rates negatively impacted fee revenue by $15.1 million). Excluding current year acquisitions, fee revenue was $767.2 million in FY'13, a decrease of 3% (1% on a constant currency basis) compared to FY'12.

As previously disclosed, during FY'13, the Company took steps to rationalize its cost structure and to integrate the current year acquisitions. As a result, the Company recorded restructuring charges of $22.8 million to reduce its workforce and consolidate premises and incurred acquisition-related transaction and integration costs of $3.1 million in FY'13.

Adjusted EBITDA was $97.8 million during FY'13, a decrease of $3.5 million, or 3%, compared to FY'12. Adjusted EBITDA margin was 12.0%, down 80 basis points from the prior year. This decrease was primarily associated with the change in business mix and costs associated with incremental infrastructure and support services relating to the newly acquired businesses.

On a GAAP basis, operating income was $43.9 million in FY'13, a decrease of $39.0 million, or 47%, compared to FY'12 resulting in an operating margin of 5.4% in the current year compared to 10.5% in the prior year.

Balance Sheet and Liquidity

Cash and marketable securities were $366.0 million at April 30, 2013, compared to $417.7 million at April 30, 2012. Cash and marketable securities include $98.0 million held in trust for deferred compensation plans at April 30, 2013, compared to $82.2 million at April 30, 2012. Cash and marketable securities decreased by $51.7 million from April 30, 2012, mainly due to the payment of FY'12 annual bonuses in Q1 FY'13 and the payment for the current year acquisitions, partially offset by cash provided by operating activities.

Results by Segment

In Q1 FY'13, the Company began reporting its Leadership & Talent Consulting business as a separate segment. The Company reports its results in three global business segments: Executive Recruitment, Leadership & Talent Consulting and Futurestep. This change has no impact on previously reported consolidated net income or earnings per share.

Selected Executive Recruitment Data

(dollars in millions)

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Fee revenue $ 136.8 $ 137.2 $ 522.5 $ 561.2 Total revenue $ 142.8 $ 143.4 $ 544.8 $ 586.5 Operating income $ 26.5 $ 22.4 $ 81.0 $ 109.9 Operating margin 19.4% 16.3% 15.5% 19.6%

Ending number of consultants 399 400 399 400 Average number of consultants 395 399 400 420 Engagements billed 2,718 2,692 7,554 7,879 New engagements (a) 1,231 1,175 4,750 4,963

EBITDA Results (b): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 EBITDA $ 29.4 $ 24.9 $ 91.2 $ 118.1 EBITDA margin 21.5% 18.2% 17.5% 21.0%

Adjusted Results (c): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Operating income $ 23.9 $ 22.4 $ 89.7 $ 110.7 Operating margin 17.5% 16.3% 17.2% 19.7% EBITDA (a) $ 26.8 $ 24.9 $ 99.9 $ 118.9 EBITDA margin (a) 19.6% 18.2% 19.1% 21.2%

____________

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

(b) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures (see attached reconciliations).

(c) Adjusted results are non-GAAP financial measures that exclude the following (see attached reconciliations):

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Restructuring charges, net of recoveries $ (2.6) $ - $ 8.1 $ 0.8 Separation costs $ - $ - $ 0.6 $ -

Executive Recruitment

Fee revenue was $136.8 million in Q4 FY'13, essentially flat with the year-ago quarter (foreign exchange rates negatively impacted fee revenue by $1.9 million). Fee revenue increases in North America were offset by decreases in Europe, Asia and Latin America. Fee revenues were impacted by a 1% decrease in the weighted-average fee billed per engagement, offset by a 1% increase in the number of executive recruitment engagements billed compared to the year-ago quarter.

On a GAAP basis, operating income was $26.5 million in Q4 FY'13, an increase of $4.1 million, or 18%, compared to Q4 FY'12 resulting in an operating margin of 19.4% in the current quarter compared to 16.3% in the year-ago quarter.

Adjusted EBITDA was $26.8 million during Q4 FY'13, an increase of $1.9 million, or 8%, compared to Q4 FY'12. This increase is primarily attributable to a decrease in the average headcount and associated compensation and benefits costs during the quarter compared to the year-ago quarter. For the full year, adjusted EBITDA declined by $19.0 million due to a 5% decrease in fee revenue on a constant currency basis offset by reduced compensation and benefits and general and administrative expenses.

Selected Leadership & Talent Consulting Data

(dollars in millions)

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Fee revenue $ 60.1 $ 31.6 $ 168.1 $ 115.4 Total revenue $ 63.1 $ 33.2 $ 176.6 $ 120.3 Operating (loss) income $ (1.3) $ 5.0 $ 6.4 $ 16.4 Operating margin (2.1)% 15.7% 3.8% 14.2%

Ending number of consultants (a) 133 51 133 51 Staff utilization (b) 67% 67% 64% 62%

EBITDA Results (c): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 EBITDA $ 1.2 $ 5.6 $ 12.4 $ 19.1 EBITDA margin 2.0% 17.9% 7.4% 16.6%

Adjusted Results (d): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Operating income $ 3.8 $ 5.0 $ 16.6 $ 16.4 Operating margin 6.3% 15.7% 9.9% 14.2% EBITDA (c) $ 6.3 $ 5.6 $ 22.6 $ 19.1 EBITDA margin (c) 10.4% 17.9% 13.4% 16.6%

____________

(a) Represents number of employees originating consulting services. FY'13 includes approximately 81 consultants from the current year acquisitions.

(b) Calculated by dividing the number of hours of our full-time LTC professional staff, who recorded time to an engagement during the period, by the total available working hours during the same period. Excluding the current year acquisitions, staff utilization was 64% and 63% for the three months and year ended April 30, 2013, respectively.

(c) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures (see attached reconciliations).

(d) Adjusted results are non-GAAP financial measures that exclude the following (see attached reconciliations):

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Restructuring charges, net of recoveries $ 5.1 $ — $ 10.2 $ —

Leadership & Talent Consulting

Fee revenue was $60.1 million in Q4 FY'13, an increase of $28.5 million, or 90%, from the year-ago quarter. Excluding the current year acquisitions, fee revenue in Q4 FY'13 was essentially flat compared to Q4 FY'12.

On a GAAP basis, operating loss was $1.3 million, a decrease of $6.3 million compared to the year-ago quarter resulting in an operating margin of (2.1%) in the current quarter compared to 15.7% in the year-ago quarter.

Adjusted EBITDA was $6.3 million during Q4 FY'13, an increase of $0.7 million, or 13%, compared to Q4 FY'12, primarily due to the current year acquisitions. Adjusted EBITDA margin was 10.4% compared to 17.9% in Q4 FY'12 and was negatively impacted, in part, by the incremental infrastructure and support services costs related to the current year acquisitions. For the full year, adjusted EBITDA increased from $19.1 million in FY'12 to $22.6 million in FY'13 due to the current year acquisitions, offset by the incremental infrastructure costs described above.

Selected Futurestep Data

(dollars in millions)

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Fee revenue $ 31.0 $ 29.3 $ 122.2 $ 113.9 Total revenue $ 32.7 $ 31.0 $ 128.3 $ 120.0 Operating income $ 3.9 $ 1.4 $ 11.0 $ 8.5 Operating margin 12.4% 4.6% 9.0% 7.4%

Engagements billed 1,703 1,611 5,605 4,916 New engagements (a) 863 998 4,434 3,924

EBITDA Results (b): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 EBITDA $ 4.1 $ 1.7 $ 12.2 $ 9.6 EBITDA margin 13.3% 5.6% 10.0% 8.4%

Adjusted Results (c): Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Operating income $ 4.3 $ 2.3 $ 14.5 $ 9.5 Operating margin 13.8% 7.7% 11.9% 8.4% EBITDA (b) $ 4.5 $ 2.6 $ 15.7 $ 10.6 EBITDA margin (b) 14.7% 8.7% 12.9% 9.3%

____________

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

(b) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures (see attached reconciliations).

(c) Adjusted results are non-GAAP financial measures that exclude the following (see attached reconciliations):

Fourth Quarter Year to Date

FY'13 FY'12 FY'13 FY'12 Restructuring charges, net of recoveries $ 0.4 $ - $ 3.5 $ 0.1 Separation costs $ - $ 0.9 $ - $ 0.9

Futurestep

Fee revenue was $31.0 million in Q4 FY'13, an increase of $1.7 million, or 6%, compared to the year-ago quarter (foreign exchange rates negatively impacted fee revenue by $0.4 million). The increase in fee revenue was due to an increase in recruitment process outsourcing and recruitment.

On a GAAP basis, operating income was $3.9 million in Q4 FY'13, an increase of $2.5 million, compared to Q4 FY'12 resulting in an operating margin of 12.4% in the current quarter compared to 4.6% in the year-ago quarter.

Adjusted EBITDA was $4.5 million during Q4 FY'13, an increase of $1.9 million, or 73%, compared to Q4 FY'12, due primarily to the increase in fee revenue and a decrease in performance related bonus expenses. For the full year, adjusted EBITDA increased $5.1 million due to the $8.3 million increase in fee revenue.

Outlook

Assuming worldwide economic conditions, financial markets and foreign exchange rates remain steady, fee revenue is expected to be in the range of $215 million to $227 million in Q1 FY'14. Also during FY'14, we are continuing with our efforts to integrate the newly acquired businesses and to reduce the incremental infrastructure and support services costs in an effective and thoughtful manner, which will be enabled through investments to align and enhance our technology platform. In line with this, in Q1 FY'14, we expect to incur charges associated with these cost reduction efforts in the range of $3.8 million to $5.0 million which will yield $4.7 million to $5.5 million in annual savings starting late in the fiscal first quarter. Excluding these charges, adjusted diluted earnings per share in the first quarter are likely to be in the range of $0.26 to $0.32 with diluted earnings per share as measured by generally accepted accounting principles likely to be in the range of $0.19 to $0.27.

Earnings Conference Call Webcast

The earnings conference call will be held today at 5:00 PM (EDT) and hosted by CEO Gary Burnison, CFO Robert Rozek and SVP Finance Gregg Kvochak. 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, deploy, develop and reward 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. These statements, which include words such as "believes", "expects" or "likely" include references to our outlook. 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 include those relating to competition, the dependence on attracting and retaining qualified and experienced consultants, our ability to successfully integrate acquired businesses, including current year acquisitions, maintaining our brand name and professional reputation, potential legal liability, the portability of client relationships, global and local political or economic developments in or affecting countries where we have operations, currency fluctuations in our international operations, risks related to the growth, alignment of our cost structure with our growth, restrictions imposed by off-limits agreements, reliance on information processing systems, cyber security vulnerabilities, limited protection of our intellectual property, our ability to enhance and develop new technology, our ability to develop new products and services, consolidation of industries we serve, our ability to successfully recover from a disaster or other business continuity problems, changes in our accounting estimates/assumptions, impairment of goodwill and other intangible assets, deferred tax assets 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"). In particular, it includes:

adjusted operating income and operating margin, adjusted to exclude restructuring, transaction and integration and separation costs; adjusted net income, adjusted to exclude restructuring, transaction and integration and separation costs, net of income tax effect; adjusted basic and diluted earnings per share, adjusted to exclude restructuring, transaction and integration and separation costs, net of income tax effect; constant currency amounts that represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period; EBITDA, or earnings before interest, taxes, depreciation and amortization and EBITDA margin; and adjusted EBITDA, which is EBITDA further adjusted to exclude restructuring, transaction and integration and separation costs, and adjusted EBITDA margin. 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 and other items that may not be indicative of Korn/Ferry's ongoing 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 they are 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. In the case of constant currency amounts, management believes the presentation of such information provides meaningful supplemental information regarding Korn/Ferry's performance as excluding the impact of exchange rate changes on Korn/Ferry's financial performance allows investors to make more meaningful period-to-period comparisons of the Company's operating results, to better identify operating trends that may otherwise be masked or distorted by exchange rate changes and to perform related trend analysis, and provides a higher degree of transparency of 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 INCOME (in thousands, except per share amounts)

Three Months Ended Year Ended

April 30, April 30,

2013 2012 2013 2012

(unaudited) Fee revenue $ 227,902 $ 198,087 $ 812,831 $ 790,505 Reimbursed out-of-pocket engagement expenses 10,705 9,471 36,870 36,254 Total revenue 238,607 207,558 849,701 826,759

Compensation and benefits 154,487 139,593 555,346 534,186 General and administrative expenses 40,096 34,668 142,771 138,872 Engagement expenses 19,834 14,295 65,847 55,889 Depreciation and amortization 5,877 3,650 19,004 14,017 Restructuring charges, net 2,921 - 22,857 929 Total operating expenses 223,215 192,206 805,825 743,893

Operating income 15,392 15,352 43,876 82,866 Other income (loss), net 2,501 2,761 6,309 (271) Interest expense, net (644) (511) (2,365) (1,791) Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries 17,249 17,602 47,820 80,804 Income tax provision 5,595 6,152 16,637 28,351 Equity in earnings of unconsolidated subsidiaries, net 543 578 2,110 1,850 Net income $ 12,197 $ 12,028 $ 33,293 $ 54,303

Earnings per common share: Basic $ 0.26 $ 0.26 $ 0.71 $ 1.17 Diluted $ 0.25 $ 0.25 $ 0.70 $ 1.15

Weighted-average common shares outstanding: Basic 47,452 46,591 47,224 46,397 Diluted 48,345 47,524 47,883 47,261

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

Three Months Ended April 30, Year Ended April 30,

2013 2012 % Change 2013 2012 % Change

Fee Revenue: Executive recruitment:

North America $ 77,511 $ 76,268 2% $ 290,317 $ 305,717 (5%)

EMEA 32,242 32,728 (1%) 128,807 141,409 (9%)

Asia Pacific 19,199 19,524 (2%) 73,221 82,230 (11%)

South America 7,839 8,642 (9%) 30,134 31,846 (5%) Total executive recruitment 136,791 137,162 (0%) 522,479 561,202 (7%) Leadership & Talent Consulting 60,116 31,650 90% 168,115 115,407 46% Futurestep 30,995 29,275 6% 122,237 113,896 7%

Total fee revenue 227,902 198,087 15% 812,831 790,505 3% Reimbursed out-of-pocket engagement expenses 10,705 9,471 13% 36,870 36,254 2%

Total revenue $ 238,607 $ 207,558 15% $ 849,701 $ 826,759 3%

Reconciliation of Operating Income (GAAP) to Adjusted Operating Income

Operating Income: Margin Margin Margin Margin Executive recruitment:

North America $ 17,104 22.1% $ 17,148 22.5% $ 58,832 20.3% $ 75,580 24.7%

EMEA 4,137 12.8% (266) (0.8%) 9,173 7.1% 13,288 9.4%

Asia Pacific 3,482 18.1% 3,001 15.4% 6,973 9.5% 11,859 14.4%

South America 1,761 22.5% 2,536 29.3% 5,987 19.9% 9,207 28.9% Total executive recruitment 26,484 19.4% 22,419 16.3% 80,965 15.5% 109,934 19.6% Leadership & Talent Consulting (1,292) (2.1%) 4,971 15.7% 6,424 3.8% 16,360 14.2% Futurestep 3,834 12.4% 1,333 4.6% 10,975 9.0% 8,445 7.4% Corporate (13,634) (13,371) (54,488) (51,873)

Total operating income $ 15,392 6.8% $ 15,352 7.8% $ 43,876 5.4% $ 82,866 10.5%

Restructuring, Transaction and Integration, and Separation Costs, net: Executive recruitment:

North America $ (1,853) (2.4%) $ - - $ 3,583 1.2% $ (15) (0.0%)

EMEA (770) (2.4%) - - 4,498 3.5% 897 0.6%

Asia Pacific 16 0.1% - - 629 0.9% - -

South America - - - - - - (99) (0.3%) Total executive recruitment (2,607) (1.9%) - - 8,710 1.7% 783 0.1% Leadership & Talent Consulting 5,080 8.4% - - 10,198 6.1% - - Futurestep 441 1.4% 920 3.1% 3,527 2.9% 1,066 1.0% Corporate 598 999 4,044 999

Total restructuring, transaction and integration, and separation charges, net $ 3,512 1.5% $ 1,919 0.9% $ 26,479 3.3% $ 2,848 0.3%

Adjusted Operating Income: (Excluding Restructuring, Transaction and Integration, and Separation Costs, net) Margin Margin Margin Margin Executive recruitment:

North America $ 15,251 19.7% $ 17,148 22.5% $ 62,415 21.5% $ 75,565 24.7%

EMEA 3,367 10.4% (266) (0.8%) 13,671 10.6% 14,185 10.0%

Asia Pacific 3,498 18.2% 3,001 15.4% 7,602 10.4% 11,859 14.4%

South America 1,761 22.5% 2,536 29.3% 5,987 19.9% 9,108 28.6% Total executive recruitment (1) 23,877 17.5% 22,419 16.3% 89,675 17.2% 110,717 19.7% Leadership & Talent Consulting 3,788 6.3% 4,971 15.7% 16,622 9.9% 16,360 14.2% Futurestep (1) 4,275 13.8% 2,253 7.7% 14,502 11.9% 9,511 8.4% Corporate (13,036) (12,372) (50,444) (50,874)

Total adjusted operating income $ 18,904 8.3% $ 17,271 8.7% $ 70,355 8.7% $ 85,714 10.8%

(1) The Company revised the presentation for expenses that are not directly associated with Futurestep, resulting in an increase in Futurestep's operating income of $0.6 million and $2.2 million offset by a decrease in Executive Recruitment operating income in the three months and year ended April 30, 2012, respectively.

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

April 30,

2013 2012 ASSETS Cash and cash equivalents $ 224,066 $ 282,005 Marketable securities 20,347 40,936 Receivables due from clients, net of allowance for doubtful accounts of $9,097 and $9,437 respectively 161,508 126,579 Income taxes and other receivables 8,944 11,902 Deferred income taxes 3,511 10,830 Prepaid expenses and other assets 28,724 27,815 Total current assets 447,100 500,067

Marketable securities, non-current 121,569 94,798 Property and equipment, net 53,628 49,808 Cash surrender value of company owned life insurance policies, net of loans 85,873 77,848 Deferred income taxes 63,203 57,290 Goodwill 257,293 176,338 Intangible assets, net 58,187 20,413 Investments and other assets 28,376 38,127 Total assets $ 1,115,229 $ 1,014,689

LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 19,460 $ 14,667 Income taxes payable 5,502 8,720 Compensation and benefits payable 160,298 160,810 Other accrued liabilities 83,291 37,527 Total current liabilities 268,551 221,724

Deferred compensation and other retirement plans 159,706 142,577 Other liabilities 22,504 20,912 Total liabilities 450,761 385,213

Stockholders' equity Common stock: $0.01 par value, 150,000 shares authorized, 61,022 and 59,975 shares issued and 48,734 and 47,913 shares outstanding, respectively 431,508 419,998 Retained earnings 236,090 202,797 Accumulated other comprehensive (loss) income, net (2,631) 7,191 Stockholders' equity 664,967 629,986 Less: notes receivable from stockholders (499) (510) Total stockholders' equity 664,468 629,476 Total liabilities and stockholders' equity $ 1,115,229 $ 1,014,689

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP) (in thousands, except per share amounts) (unaudited)

Three Months Ended Three Months Ended

April 30, 2013 April 30, 2012

As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted

Fee revenue $ 227,902 $ 227,902 $ 198,087 $ 198,087 Reimbursed out-of-pocket engagement expenses 10,705 10,705 9,471 9,471 Total revenue 238,607 238,607 207,558 207,558

Compensation and benefits 154,487 154,487 139,593 (1,919) 137,674 General and administrative expenses 40,096 (591) 39,505 34,668 34,668 Engagement expenses 19,834 19,834 14,295 14,295 Depreciation and amortization 5,877 5,877 3,650 3,650 Restructuring charges, net 2,921 (2,921) - - - - Total operating expenses 223,215 (3,512) 219,703 192,206 (1,919) 190,287

Operating income 15,392 3,512 18,904 15,352 1,919 17,271

Other income, net 2,501 2,501 2,761 2,761 Interest expense, net (644) (644) (511) (511) Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries 17,249 3,512 20,761 17,602 1,919 19,521 Income tax provision (1) (2) 5,595 119 5,714 6,152 671 6,823 Equity in earnings of unconsolidated subsidiaries, net 543 543 578 578 Net income $ 12,197 $ 3,393 $ 15,590 $ 12,028 $ 1,248 $ 13,276

Earnings per common share: Basic $ 0.26 $ 0.33 $ 0.26 $ 0.28 Diluted $ 0.25 $ 0.32 $ 0.25 $ 0.28

Weighted-average common shares outstanding: Basic 47,452 47,452 46,591 46,591 Diluted 48,345 48,345 47,524 47,524

Explanation of Non-GAAP Adjustments

(1) The adjustments result in an effective tax rate of 28% and 35% for the as adjusted amounts for the three months ended April 30, 2013 and 2012, respectively. (2) The three months ended April 30, 2013 includes the tax effect on restructuring charges and transaction & integration costs associated with the acquisition of PDI Ninth House, while the three months ended April 30, 2012 includes the tax effect on the separation costs related to changes in certain leadership positions.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP) (in thousands, except per share amounts) (unaudited)

Year Ended Year Ended

April 30, 2013 April 30, 2012

As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted

Fee revenue $ 812,831 $ 812,831 $ 790,505 $ 790,505 Reimbursed out-of-pocket engagement expenses 36,870 36,870 36,254 36,254 Total revenue 849,701 849,701 826,759 826,759

Compensation and benefits 555,346 (516) 554,830 534,186 (1,919) 532,267 General and administrative expenses 142,771 (3,106) 139,665 138,872 138,872 Engagement expenses 65,847 65,847 55,889 55,889 Depreciation and amortization 19,004 19,004 14,017 14,017 Restructuring charges, net 22,857 (22,857) - 929 (929) - Total operating expenses 805,825 (26,479) 779,346 743,893 (2,848) 741,045

Operating income 43,876 26,479 70,355 82,866 2,848 85,714

Other income (loss), net 6,309 6,309 (271) (271) Interest expense, net (2,365) (2,365) (1,791) (1,791) Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries 47,820 26,479 74,299 80,804 2,848 83,652 Income tax provision (1) (2) 16,637 6,953 23,590 28,351 999 29,350 Equity in earnings of unconsolidated subsidiaries, net 2,110 2,110 1,850 1,850 Net income $ 33,293 $ 19,526 $ 52,819 $ 54,303 $ 1,849 $ 56,152

Earnings per common share: Basic $ 0.71 $ 1.12 $ 1.17 $ 1.21 Diluted $ 0.70 $ 1.10 $ 1.15 $ 1.19

Weighted-average common shares outstanding: Basic 47,224 47,224 46,397 46,397 Diluted 47,883 47,883 47,261 47,261

Explanation of Non-GAAP Adjustments (1) The adjustments result in an annual effective tax rate of 32% and 35% for the as adjusted amounts for the year ended April 30, 2013 and 2012, respectively. (2) The year ended April 30, 2013 includes the tax effect on restructuring charges, transaction and integration costs associated with the acquisition of PDI Ninth House, and separation costs, while the year ended April 30, 2012 includes the tax effect on the separation costs related to changes in certain leadership positions and restructuring charges.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO EBITDA AND ADJUSTED EBITDA (NON-GAAP) (in thousands) (unaudited)

Three Months Ended April 30, 2013

Executive Recruitment Leadership & Talent Consulting Futurestep Corporate Consolidated

Fee revenue $ 136,791 $ 60,116 $ 30,995 $ - $ 227,902

Net income $ 12,197 Other income, net 2,501 Interest expense, net (644) Income tax provision 5,595 Equity in earnings of unconsolidated subsidiaries, net 543 Operating income (loss) $ 26,484 $ (1,292) $ 3,834 $ (13,634) 15,392 Depreciation and amortization 2,243 2,625 240 769 5,877 Other income (loss), net 518 (146) 36 2,093 2,501 Equity in earnings of unconsolidated subsidiaries, net 129 - - 414 543 EBITDA 29,374 1,187 4,110 (10,358) 24,313 EBITDA margin 21.5% 2.0% 13.3% 10.7%

Restructuring (recoveries) charges, net (2,607) 5,080 441 7 2,921 Transaction and integration costs - - - 591 591 Adjusted EBITDA $ 26,767 $ 6,267 $ 4,551 $ (9,760) $ 27,825 Adjusted EBITDA margin 19.6% 10.4% 14.7% 12.2%

Three Months Ended April 30, 2012

Executive Recruitment Leadership & Talent Consulting Futurestep Corporate Consolidated

Fee revenue $ 137,162 $ 31,650 $ 29,275 $ - $ 198,087

Net income $ 12,028 Other income, net 2,761 Interest expense, net (511) Income tax provision 6,152 Equity in earnings of unconsolidated subsidiaries, net 578 Operating income (loss) $ 22,419 $ 4,971 $ 1,333 $ (13,371) 15,352 Depreciation and amortization 2,103 671 285 591 3,650 Other income, net 218 18 9 2,516 2,761 Equity in earnings of unconsolidated subsidiaries, net 159 - - 419 578 EBITDA 24,899 5,660 1,627 (9,845) 22,341 EBITDA margin 18.2% 17.9% 5.6% 11.3%

Separation costs - - 920 999 1,919 Adjusted EBITDA $ 24,899 $ 5,660 $ 2,547 $ (8,846) $ 24,260 Adjusted EBITDA margin 18.2% 17.9% 8.7% 12.2%

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO EBITDA AND ADJUSTED EBITDA (NON-GAAP) (in thousands) (unaudited)

Year Ended April 30, 2013

Executive Recruitment Leadership & Talent Consulting Futurestep Corporate Consolidated

Fee revenue $ 522,479 $ 168,115 $ 122,237 $ - $ 812,831

Net income $ 33,293 Other income, net 6,309 Interest expense, net (2,365) Income tax provision 16,637 Equity in earnings of unconsolidated subsidiaries, net 2,110 Operating income (loss) $ 80,965 $ 6,424 $ 10,975 $ (54,488) 43,876 Depreciation and amortization 8,991 6,012 1,180 2,821 19,004 Other income (loss), net 793 (75) 51 5,540 6,309 Equity in earnings of unconsolidated subsidiaries, net 434 - - 1,676 2,110 EBITDA 91,183 12,361 12,206 (44,451) 71,299 EBITDA margin 17.5% 7.4% 10.0% 8.8%

Restructuring charges, net 8,194 10,198 3,527 938 22,857 Transaction and integration costs - - - 3,106 3,106 Separation costs 516 - - - 516 Adjusted EBITDA $ 99,893 $ 22,559 $ 15,733 $ (40,407) $ 97,778 Adjusted EBITDA margin 19.1% 13.4% 12.9% 12.0%

Year Ended April 30, 2012

Executive Recruitment Leadership & Talent Consulting Futurestep Corporate Consolidated

Fee revenue $ 561,202 $ 115,407 $ 113,896 $ - $ 790,505

Net income $ 54,303 Other loss, net (271) Interest expense, net (1,791) Income tax provision 28,351 Equity in earnings of unconsolidated subsidiaries, net 1,850 Operating income (loss) $ 109,934 $ 16,360 $ 8,445 $ (51,873) 82,866 Depreciation and amortization 8,140 2,613 1,070 2,194 14,017 Other (loss) income, net (145) 146 41 (313) (271) Equity in earnings of unconsolidated subsidiaries, net 159 - - 1,691 1,850 EBITDA 118,088 19,119 9,556 (48,301) 98,462 EBITDA margin 21.0% 16.6% 8.4% 12.5%

Restructuring charges, net 783 - 146 - 929 Separation costs - - 920 999 1,919 Adjusted EBITDA $ 118,871 $ 19,119 $ 10,622 $ (47,302) $ 101,310 Adjusted EBITDA margin 21.2% 16.6% 9.3% 12.8%

Posted-In: News Guidance

 

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