Korn Ferry Announces Second Quarter Fiscal 2014 Results of Operations

    Korn Ferry Announces Second Quarter Fiscal 2014 Results of Operations

Key highlights for the second quarter of fiscal 2014 are as follows:

-- Korn Ferry reports record quarterly fee revenue of $238.0 million in Q2
FY'14, an increase of 23% on a constant currency basis compared to Q2 FY'13
(21% at actual exchange rates). Excluding the prior year acquisitions,
quarterly fee revenue increased 8% on a constant currency basis from Q2 FY'13.

-- Fee revenue in Executive Recruitment was $140.1 million in Q2 FY'14, which
grew 11%, on a constant currency basis, from Q2 FY'13.

-- Fee revenue in Leadership & Talent Consulting was $66.0 million in Q2
FY'14, up 73%, on a constant currency basis, from Q2 FY'13 and up 9%
sequentially.

-- Fee revenue in Futurestep was $31.9 million in Q2 FY'14, up 8%, on a
constant currency basis, from Q2 FY'13.

-- Q2 FY'14 adjusted EBITDA margin was 15.4% compared to adjusted EBITDA
margin of 12.5% in Q2 FY'13.

-- Q2 FY'14 adjusted diluted earnings per share, excluding separation charges
of $2.0 million, was a record $0.41 compared to adjusted diluted earnings per
share, excluding net restructuring charges of $15.5 million, of $0.25 in Q2
FY'13. Including such costs, Q2 FY'14 and Q2 FY'13 diluted earnings per share
was $0.38 and $0.03, respectively.

PR Newswire

LOS ANGELES, Dec. 4, 2013

LOS ANGELES, Dec. 4, 2013 /PRNewswire/ --Korn Ferry (NYSE: KFY), a single
source of leadership and talent consulting services, today announced record
second quarter results with fee revenue of $238.0 million and adjusted diluted
earnings per share of $0.41, excluding separation charges of $2.0 million.
Including such charges, diluted earnings per share was $0.38 in the three
months ended October 31, 2013.

"I am extremely proud of what Korn Ferry has accomplished. The second quarter
represented the strongest top line results in the company's history and
represents a 23% year over year increase in fee revenue, or 8% excluding the
prior year acquisitions, on a constant currency basis. Once again, we
delivered strong margin expansion and earnings per share growth in the
quarter. Our firm's alignment to broad talent management offerings is taking
hold, as evidenced by our non-Search businesses generating 41% of the revenue
mix aided by the performance of the prior year acquisitions – an all-time
high," said Gary D. Burnison, CEO of Korn Ferry. "In the current economy, the
winning companies will be those that can find and develop outperforming
leaders in an underperforming economy. This environment is creating an
opportunity for Korn Ferry – as we help clients drive growth by more
effectively linking their business and talent strategies."

Financial Results
(dollars in millions, except per share amounts)
                           Second Quarter               Year to Date
                           FY'14        FY'13           FY'14      FY'13
Fee revenue                $        $    196.2  $       $    
                           238.0                       466.4      382.9
Total revenue              $        $    204.8  $       $    
                           246.2                       483.8      400.8
Operating income           $       $         $      $     
                           23.2        2.8             39.8       19.8
Operating margin           9.7%         1.4%            8.5%       5.2%
Net income                 $       $          $      $     
                           18.8        1.2            30.2       11.6
Basic earnings per share   $       $           $      $     
                           0.39        0.03           0.63       0.25
Diluted earnings per share $       $           $      $     
                           0.38        0.03           0.62       0.24
EBITDA Results (a):        Second Quarter               Year to Date
                           FY'14        FY'13           FY'14      FY'13
EBITDA                     $       $         $      $     
                           34.7        8.9             60.0       29.3
EBITDA margin              14.6%        4.6%            12.9%      7.7%
Adjusted Results (b):      Second Quarter               Year to Date
                           FY'14        FY'13           FY'14      FY'13
Operating income           $       $           $      $     
                           25.2        18.3           48.4       35.3
Operating margin           10.6%        9.3%            10.4%      9.2%
EBITDA (a)                 $       $           $      $     
                           36.7        24.4           68.6       44.8
EBITDA margin (a)          15.4%        12.5%           14.7%      11.7%
Net income                 $       $           $      $     
                           20.0        11.8           36.0       22.2
Basic earnings per share   $       $           $      $     
                           0.41        0.25           0.75       0.47
Diluted earnings per share $       $           $      $     
                           0.41        0.25           0.74       0.47

____________
    EBITDA refers to earnings before interest, taxes, depreciation and
    amortization. Adjusted EBITDA further adjusts EBITDA to exclude
(a) restructuring charges (net of recoveries) and/or transaction,
    integration/acquisition 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):

                                 Second Quarter          Year to Date
                                 FY'14        FY'13      FY'14      FY'13
Separation costs                 $       $      $      $    
                                    2.0       —     4.5         —
Restructuring charges, net of    $       $      $      $    
recoveries                          —      15.5      3.7       15.5
Integration/acquisition costs    $       $      $      $    
                                    —        —     0.4         —

Fee revenue was $238.0 million in Q2 FY'14, an increase of $41.8 million, or
23% on a constant currency basis (21% at actual exchange rates), compared to
Q2 FY'13, primarily due to an increase of $27.6 million and $12.3 million in
fee revenue in Leadership & Talent Consulting and Executive Recruitment,
respectively. The overall fee revenue increase was driven by fee revenue
growth in the life science/healthcare, industrial, technology and financial
services sectors. Excluding the PDI Ninth House and Global Novations
acquisitions (the "prior year acquisitions"), fee revenue increased 7% in Q2
FY'14 compared to the year-ago quarter (8% on a constant currency basis) to
$204.7 million in Q2 FY'14 from $191.0 million in Q2 FY'13.

Compensation and benefit expenses were $161.3 million in Q2 FY'14, an increase
of $28.2 million, or 21%, compared to Q2 FY'13. The prior year acquisitions
contributed $14.5 million to the increase in compensation and benefit
expenses. The remainder of the increase was due to an increase in performance
related bonus expense, salaries and related payroll taxes and an increase in
expense associated with company contributions to deferred compensation plans.
The increase in the performance related bonus expense resulted from an
increase in fee revenue and profitability. The increase in salaries and
related payroll taxes was due to an increase in the headcount in both
Futurestep and Leadership & Talent Consulting.

General and administrative expenses were $35.8 million in Q2 FY'14, an
increase of $2.4 million, or 7%, compared to Q2 FY'13.The prior year
acquisitions contributed $3.6 million to the increase in general and
administrative expenses in Q2 FY'14 compared to Q2 FY'13. Excluding the costs
from the prior year acquisitions, there was a decline in general and
administrative expenses of $1.2 million during the same period. The decline
was due to a gain as a result of favorable exchange rates in Q2 FY'14 compared
to Q2 FY'13 and a decrease in business development expenses.

Adjusted EBITDA was $36.7 million in Q2 FY'14, an increase of $12.3 million,
or 50%, compared to Q2 FY'13. Adjusted EBITDA margin was 15.4% and 12.5% in
Q2 FY'14 and Q2 FY'13, respectively.

On a GAAP basis, operating income was $23.2 million in Q2 FY'14, an increase
of $20.4 million, or 729%, compared to Q2 FY'13 resulting in a margin of 9.7%
in the current quarter compared to 1.4% in the year-ago quarter.

Balance Sheet and Liquidity

Cash and marketable securities were $314.9 million at October 31, 2013,
compared to $366.0 million at April 30, 2013. Cash and marketable securities
include $118.0 million held in trust for deferred compensation plans at
October 31, 2013, compared to $98.0 million at April 30, 2013. Cash and
marketable securities decreased by $51.1 million from April 30, 2013, mainly
due to Q1 FY'14 payments of FY'13 annual bonuses and contingent consideration
paid to selling shareholders of PDI Ninth House partially offset by cash
provided by operating activities.



Results by Segment
Selected Executive Recruitment Data
(dollars in millions)
                        Second Quarter              Year to Date
                        FY'14          FY'13        FY'14        FY'13
Fee revenue             $          $         $         $    
                        140.1          127.8        276.7        255.2
Total revenue           $          $         $         $    
                        145.3          133.1        287.8        266.3
Operating income        $         $        $        $     
                        28.1           10.5         56.4         32.9
Operating margin        20.1%          8.1%         20.4%        12.9%
Ending number of        412            402          412          402
consultants
Average number of       414            409          406          401
consultants
Engagements billed      2,965          2,656        4,690        4,377
New engagements (a)     1,300          1,172        2,516        2,381
EBITDA Results (b):     Second Quarter              Year to Date
                        FY'14          FY'13        FY'14        FY'13
EBITDA                  $         $        $        $     
                        30.7           12.5         61.2         37.4
EBITDA margin           21.9%          9.8%         22.1%        14.7%
Adjusted Results (c):   Second Quarter              Year to Date
                        FY'14          FY'13        FY'14        FY'13
Operating income        $         $        $        $     
                        28.1          21.2         57.7         43.6
Operating margin        20.1%          16.6%        20.9%        17.1%
EBITDA (b)              $         $        $        $     
                        30.7          23.2         62.5         48.1
EBITDA margin (b)       21.9%          18.2%        22.6%        18.9%

____________
(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):

                         Second Quarter              Year to Date
                         FY'14          FY'13        FY'14        FY'13
Restructuring charges,   $        $       $       $     
net of recoveries          —         10.7         1.3         10.7

Executive Recruitment

Fee revenue was $140.1 million in Q2 FY'14, an increase of $12.3 million, or
11% on a constant currency basis (10% at actual exchange rates), compared to
Q2 FY'13. The increase in fee revenue was driven by fee revenue increases in
all regions with the largest increases in North America and Asia. This
increase is primarily attributed to a 12% increase in the number of executive
recruitment engagements billed, partially offset by a 2% decrease in the
weighted-average fee billed per engagement compared to the year-ago quarter.

Adjusted EBITDA was $30.7 million during Q2 FY'14, an increase of $7.5
million, or 32%, compared to Q2 FY'13. Adjusted EBITDA margin was 21.9%, in
Q2 FY'14 compared to 18.2% in Q2 FY'13. This increase is primarily attributed
to the $12.3 million increase in fee revenue in Q2 FY'14 as compared to Q2
FY'13, combined with a decrease of $1.1 million in general and administrative
expenses, partially offset by an increase of $6.8 million in compensation and
benefit expenses driven primarily by an increase in performance related bonus
expense.

On a GAAP basis, operating income was $28.1 million in Q2 FY'14, an increase
of $17.6 million, or 168% ($6.9 million, or 33% on an adjusted basis),
compared to Q2 FY'13, resulting in an operating margin of 20.1% in the current
quarter compared to 8.1% in the year-ago quarter.



Selected Leadership & Talent Consulting Data
(dollars in millions)
                          Second Quarter                Year to Date
                          FY'14           FY'13         FY'14      FY'13
Fee revenue               $          $         $       $     
                          66.0            38.4          126.1      66.8
Total revenue             $          $         $       $     
                          68.2            40.6          130.3      70.4
Operating income          $         $        $      $     
                          7.0             6.2           11.3       10.5
Operating margin          10.6%           16.3%         9.0%       15.7%
Ending number of          129             72            129        72
consultants (a)
Staff utilization (b)     70%             67%           68%        66%

                          Second Quarter                Year to Date
EBITDA Results (c):
                          FY'14           FY'13         FY'14      FY'13
EBITDA                    $          $        $      $     
                          10.3            7.3           17.5       12.2
EBITDA margin             15.5%           18.9%         13.8%      18.2%

                          Second Quarter                Year to Date
Adjusted Results (d):
                          FY'14           FY'13         FY'14      FY'13
Operating income          $         $        $      $     
                          7.0            6.9          12.5       11.2
Operating margin          10.6%           18.0%         9.9%       16.7%
EBITDA (c)                $          $        $      $     
                          10.3           8.0          18.7       12.9
EBITDA margin (c)         15.5%           20.7%         14.7%      19.2%

____________
    Represents number of employees originating consulting services. FY'14 and
(a) FY'13 include approximately 70 consultants and 22 consultants,
    respectively, from the prior year acquisitions.
    Calculated by dividing the number of hours of our full-time LTC
(b) professional staff, who recorded time to an engagement during the period,
    by the total available working hours during the same period.
(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):

                         Second Quarter              Year to Date
                         FY'14          FY'13        FY'14        FY'13
Restructuring charges,   $        $       $       $     
net of recoveries          —          0.7        1.2          0.7

Leadership & Talent Consulting

Fee revenue was $66.0 million in Q2 FY'14, an increase of $27.6 million, or
73% on a constant currency basis (72% at actual exchange rates), from the
year-ago quarter. Excluding the prior year acquisitions, fee revenue was
essentially flat on a constant currency basis, in Q2 FY'14 compared to Q2
FY'13, but up 3% sequentially. 

Adjusted EBITDA was $10.3 million during Q2 FY'14, an increase of $2.3
million, or 29%, compared to Q2 FY'13. Adjusted EBITDA margin was 15.5%
compared to 20.7% in Q2 FY'13. The increase in adjusted EBITDA is due to an
increase in fee revenue, partially offset by an increase in compensation and
benefit expenses, both primarily related to the prior year acquisitions.

On a GAAP basis, operating income was $7.0 million in Q2 FY'14, an increase of
$0.8 million, or 13%, compared to Q2 FY'13 driven by an increase in
productivity as measured by staff utilization. Operating margin was 10.6% in
the current quarter compared to 16.3% in the year-ago quarter.



Selected Futurestep Data
(dollars in millions)
                     Second Quarter                Year to Date
                     FY'14           FY'13         FY'14         FY'13
Fee revenue          $         $         $         $      
                     31.9            30.0          63.6          60.9
Total revenue        $         $         $         $      
                     32.7            31.1          65.7          64.1
Operating income     $         $        $        $      
                      2.6           0.2           5.1            3.4
Operating margin     8.0%            0.8%          8.0%          5.6%
Engagements billed   1,195           1,152         1,952         2,005
New engagements (a)  620             626           1,245         1,271
EBITDA Results (b):  Second Quarter                Year to Date
                     FY'14           FY'13         FY'14         FY'13
EBITDA               $         $        $        $      
                      3.0           0.5          6.5           4.0
EBITDA margin        9.3%            1.9%          10.2%         6.6%
Adjusted Results     Second Quarter                Year to Date
(c):
                     FY'14           FY'13         FY'14         FY'13
                    $         $        $        $      
                      2.6           3.3          6.3            6.5
Operating income

                     8.0%            11.1%         9.8%          10.7%
Operating margin
                    $         $        $        $      
                      3.0           3.6          7.7            7.1
EBITDA (b)

                     9.3%            12.1%         12.0%         11.7%
EBITDA margin (b)

____________
(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):

                         Second Quarter              Year to Date
                         FY'14          FY'13        FY'14        FY'13
Restructuring charges,   $        $       $       $     
net of recoveries          —          3.1        1.2          3.1

Futurestep

Fee revenue was $31.9 million in Q2 FY'14, an increase of $1.9 million, or 8%
on a constant currency basis (6% at actual exchange rates), compared to the
year-ago quarter. The increase in fee revenue was driven by a 4% increase in
the number of engagements billed and a 2% increase in weighted-average fee
billed per engagement in Q2 FY'14 compared to Q2 FY'13 driven by increases in
recruitment process outsourcing and non-executive and other professional
recruitment.

Adjusted EBITDA was $3.0 million during Q2 FY'14, a decrease of $0.6 million,
or 17%, compared to Q2 FY'13. Adjusted EBITDA margin decreased to 9.3% in Q2
FY'14 compared to 12.1% in Q2 FY'13. The decrease in Adjusted EBITDA and
Adjusted EBITDA margin was primarily due to an increase of $1.9 million in
compensation and benefit expenses, an increase in cost of services expense of
$0.4 million, and an increase in general and administrative of $0.2 million,
partially offset by an increase in fee revenue of $1.9 million. The increase
in compensation and benefit expenses was driven by an increase in salaries and
related payroll taxes due to a 13% increase in the average headcount primarily
associated with an increase in staffing to accommodate a number of larger
recruitment process outsourcing contracts won by the Company in the quarter
and for which delivery will occur in subsequent periods.

On a GAAP basis, operating income was $2.6 million in Q2 FY'14, an increase of
$2.4 million, compared to Q2 FY'13 resulting in an operating margin of 8.0% in
the current quarter compared to 0.8% in the year-ago quarter.

Outlook

The third quarter is our seasonal low quarter due to the heavy concentration
of holidays which results in lower productivity. Given this and assuming
worldwide economic conditions, financial markets and foreign exchange rates
remain steady, fee revenue is expected to be in the range of $221 million to
$237 million in Q3 FY'14 and diluted earnings per share are likely to be in
the range of $0.30 to $0.38.

Earnings Conference Call Webcast

The earnings conference call will be held today at 5:00 PM (EST) 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.

About Korn Ferry

At Korn Ferry, we design, build, attract and ignite talent. Since our
inception, clients have trusted us to help recruit world-class leadership.
Today, we are a single source for leadership and talent consulting services to
empower businesses and leaders to reach their goals. Our solutions range from
executive recruitment and leadership development programs, to enterprise
learning, succession planning and recruitment process outsourcing (RPO).
Visit www.kornferry.com for more information on Korn Ferry, 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, 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,
seasonality 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:

  oadjusted operating income and operating margin, adjusted to exclude
    restructuring (net of recoveries) and/or transaction,
    integration/acquisition and separation costs;
  oadjusted net income, adjusted to exclude restructuring (net of recoveries)
    and/or transaction, integration/acquisition and separation costs, net of
    income tax effect;
  oadjusted basic and diluted earnings per share, adjusted to exclude
    restructuring (net of recoveries) and/or transaction,
    integration/acquisition and separation costs, net of income tax effect;
  oconstant 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;
  oEBITDA, or earnings before interest, taxes, depreciation and amortization
    and EBITDA margin; and
  oadjusted EBITDA, which is EBITDA further adjusted to exclude restructuring
    (net of recoveries) and/or transaction, integration/acquisition 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 AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
                               Three Months Ended     Six Months Ended
                               October 31,            October 31,
                               2013        2012         2013        2012
                               (unaudited)
Fee revenue                  $ 237,968   $ 196,231    $ 466,405   $ 382,925
Reimbursed out-of-pocket      8,269       8,568        17,419      17,897
engagement expenses
 Total revenue      246,237     204,799      483,824     400,822
Compensation and benefits    161,296     133,035      314,066     261,071
General and administrative    35,795      33,317       75,666      66,760
expenses
Reimbursed expenses          8,269       8,568        17,419      17,897
Cost of services             11,132      7,318        20,641      11,782
Depreciation and              6,580       4,297        12,524      8,039
amortization
Restructuring charges, net   -           15,495       3,682       15,495
 Total operating     223,072     202,030      443,998     381,044
expenses
Operating income            23,165      2,769        39,826      19,778
Other income, net            4,352       1,529        6,619       512
Interest expense, net        (638)       (762)        (1,229)     (1,361)
  Income before
provision for income
taxesand equity in earnings
of unconsolidated              26,879      3,536        45,216      18,929
subsidiaries
Equity in earnings of         557         344          1,022       974
unconsolidated subsidiaries
Income tax provision        8,677       2,684        16,062      8,289
 Net income        $  18,759  $   1,196  $  30,176  $  11,614
Earnings per common share:
 Basic                   $        $         $        $   
                               0.39        0.03         0.63        0.25
 Diluted                 $        $         $        $   
                               0.38        0.03         0.62        0.24
Weighted-average common
shares outstanding:
 Basic                   48,118      47,269       47,892      47,040
 Diluted                 48,816      47,834       48,748      47,658



KORN FERRY AND SUBSIDIARIES
FINANCIAL SUMMARY BY SEGMENT
(in thousands)
(unaudited)
                         Three Months Ended October 31,      Six Months Ended October 31,
                         2013              2012      %       2013              2012      %
                                                     Change                              Change
Fee Revenue:
Executive recruitment:
 North America           $                $        8%      $                 $         5%
                         75,183            69,441            149,330           141,547
 EMEA                   34,221            33,142    3%      68,598            62,965    9%
 Asia Pacific            21,722            18,338    18%     42,850            35,721    20%
 South America           8,866             6,827     30%     15,869            14,961    6%
Total executive          139,992           127,748   10%     276,647           255,194   8%
recruitment
Leadership & Talent      66,078            38,452    72%     126,140           66,844    89%
Consulting
Futurestep               31,898            30,031    6%      63,618            60,887    4%
 Total fee revenue       237,968           196,231   21%     466,405           382,925   22%
Reimbursed
out-of-pocket engagement 8,269             8,568     (3%)    17,419            17,897    (3%)
expenses
 Total revenue           $                 $         20%     $                 $         21%
                         246,237           204,799           483,824           400,822
Reconciliation of Operating Income (GAAP) to Adjusted Operating Income
Operating Income:                  Margin            Margin            Margin            Margin
Executive recruitment:
 North America           $        20.7%   $       13.0%   $        21.3%   $        19.1%
                         15,530            9,017             31,854            27,091
 EMEA                    5,860     17.1%   (929)     (2.8%)  11,820    17.2%   859       1.4%
 Asia Pacific            4,472     20.6%   1,080     5.9%    8,972     20.9%   1,578     4.4%
 South America           2,265     25.5%   1,217     17.8%   3,761     23.7%   3,306     22.1%
Total executive          28,127    20.1%   10,385    8.1%    56,407    20.4%   32,834    12.9%
recruitment
Leadership & Talent      7,006     10.6%   6,252     16.3%   11,341    9.0%    10,514    15.7%
Consulting
Futurestep               2,539     8.0%    237       0.8%    5,084     8.0%    3,419     5.6%
Corporate                (14,507)          (14,105)          (33,006)          (26,989)
 Total operating income $        9.7%    $       1.4%    $        8.5%    $        5.2%
                         23,165            2,769             39,826            19,778
Restructuring, Separation, and Integration/Acquisition Costs, net:
Executive recruitment:
 North America           $      -       $       7.8%    $      0.6%    $       3.9%
                           -            5,436             816              5,436
 EMEA                    -         -       4,752     14.3%   460       0.7%    4,752     7.5%
 Asia Pacific            -         -       613       3.3%    60        0.2%    613       1.7%
 South America           -         -       -         -       -         -       -         -
Total executive          -         -       10,801    8.5%    1,336     0.5%    10,801    4.2%
recruitment
Leadership & Talent      -         -       677       1.7%    1,149     0.9%    677       1.0%
Consulting
Futurestep               -         -       3,086     10.3%   1,134     1.8%    3,086     5.1%
Corporate                2,000             931               4,957             931
 Total restructuring,
 separation, and         $       0.9%    $        7.9%    $       1.9%    $        4.0%
 integration/acquisition 2,000             15,495            8,576             15,495
 costs, net
Adjusted Operating Income:
 (Excluding Restructuring,
Separation, and                    Margin            Margin            Margin            Margin
Integration/Acquisition Costs,
net)
Executive recruitment:
 North America           $        20.7%   $        20.8%   $        21.9%   $        23.0%
                         15,530            14,453            32,670            32,527
 EMEA                    5,860     17.1%   3,823     11.5%   12,280    17.9%   5,611     8.9%
 Asia Pacific            4,472     20.6%   1,693     9.2%    9,032     21.1%   2,191     6.1%
 South America           2,265     25.5%   1,217     17.8%   3,761     23.7%   3,306     22.1%
Total executive          28,127    20.1%   21,186    16.6%   57,743    20.9%   43,635    17.1%
recruitment
Leadership & Talent      7,006     10.6%   6,929     18.0%   12,490    9.9%    11,191    16.7%
Consulting
Futurestep               2,539     8.0%    3,323     11.1%   6,218     9.8%    6,505     10.7%
Corporate               (12,507)          (13,174)          (28,049)          (26,058)
 Total adjusted         $        10.6%   $        9.3%    $        10.4%   $        9.2%
 operating income       25,165            18,264            48,402            35,273



KORN FERRY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
                                                  October 31,    April 30,
                                                  2013           2013
ASSETS                                            (unaudited)
Cash and cash equivalents                         $  182,628   $  224,066
Marketable securities                             6,531          20,347
Receivables due from clients, net of allowance
for doubtful accounts
                                                  199,247        161,508
of $9,775 and $9,097 respectively
Income taxes and other receivables                6,675          8,944
Deferred income taxes                             2,622          3,511
Prepaid expenses and other assets                 31,097         28,724
Total current assets                              428,800        447,100
Marketable securities, non-current                125,754        121,569
Property and equipment, net                       52,651         53,628
Cash surrender value of company owned life        90,898         85,873
insurance policies, net of loans
Deferred income taxes                             60,552         63,203
Goodwill                                          259,071        257,293
Intangible assets, net                            53,879         58,187
Investments and other assets                      28,841         28,376
Total assets                                      $ 1,100,446    $ 1,115,229
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                                  $   18,281  $   19,460
Income taxes payable                              9,251          5,502
Compensation and benefits payable                 119,163        160,298
Other accrued liabilities                         61,332         83,291
Total current liabilities                         208,027        268,551
Deferred compensation and other retirement plans  167,792        159,706
Other liabilities                                 20,800         22,504
Total liabilities                                 396,619        450,761
Stockholders' equity
Common stock: $0.01 par value, 150,000 shares
authorized, 61,729 and

61,022 shares issued and 49,441 and 48,734        439,377        431,508
shares outstanding, respectively
Retained earnings                                 266,266        236,090
Accumulated other comprehensive loss, net         (1,322)        (2,631)
Stockholders' equity                              704,321        664,967
Less: notes receivable from stockholders         (494)          (499)
Total stockholders' equity                        703,827        664,468
Total liabilities and stockholders' equity        $ 1,100,446    $ 1,115,229



KORN FERRY 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
                   October 31, 2013                 October 31, 2012
                   As        Adjustments  As        As        Adjustments  As
                   Reported               Adjusted  Reported               Adjusted
Fee revenue      $                      $         $                      $  
                   237,968                237,968   196,231                196,231
Reimbursed
out-of-pocket      8,269                  8,269     8,568                  8,568
engagement
expenses
 Total   246,237                246,237   204,799                204,799
revenue
Compensation and  161,296   (2,000)      159,296   133,035                133,035
benefits
General and
administrative     35,795                 35,795    33,317                 33,317
expenses
Reimbursed        8,269                  8,269     8,568                  8,568
expenses
Cost of           11,132                 11,132    7,318                  7,318
services
Depreciation and  6,580                  6,580     4,297                  4,297
amortization
Restructuring     -                      -         15,495    (15,495)     -
charges, net
 Total
operating          223,072   (2,000)      221,072   202,030   (15,495)     186,535
expenses
Operating         23,165    2,000        25,165    2,769     15,495       18,264
income
Other income,     4,352                  4,352     1,529                  1,529
net
Interest          (638)                  (638)     (762)                  (762)
expense, net
 Income
before provision
for income
taxesand equity
in earnings of     26,879    2,000        28,879    3,536     15,495       19,031
unconsolidated
subsidiaries
Equity in
earnings of        557                    557       344                    344
unconsolidated
subsidiaries
Income tax
provision (1)      8,677     791          9,468     2,684     4,889        7,573
(2)
 Net    $        $       $        $       $        $   
income            18,759    1,209        19,968    1,196     10,606       11,802
Earnings per
common share:
                   $                   $      $                   $   
 Basic       0.39                   0.41      0.03                    
                                                                           0.25
                   $                   $      $                   $   
 Diluted     0.38                   0.41      0.03                    
                                                                           0.25
Weighted-average
common shares
outstanding:
 Basic       48,118                 48,118    47,269                 47,269
 Diluted     48,816                 48,816    47,834                 47,834

    Explanation of Non-GAAP Adjustments
    The adjustments result in an effective tax rate of 33% and 40% for the as
(1) adjusted amounts for the three months ended October 31, 2013 and 2012,
    respectively.
    The three months ended October 31, 2013, includes the tax effect on
(2) separation charges, while the three months ended October 31, 2012,
    includes the tax effecton restructuring charges.



KORN FERRY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP)
(in thousands, except per share amounts)
(unaudited)
                   Six Months Ended               Six Months Ended
                   October 31, 2013                 October 31, 2012
                   As        Adjustments  As        As        Adjustments  As
                   Reported               Adjusted  Reported               Adjusted
Fee revenue      $                      $         $                      $  
                   466,405                466,405   382,925                382,925
Reimbursed
out-of-pocket      17,419                 17,419    17,897                 17,897
engagement
expenses
 Total   483,824                483,824   400,822                400,822
revenue
Compensation and  314,066   (4,500)      309,566   261,071                261,071
benefits
General and
administrative     75,666    (394)        75,272    66,760                 66,760
expenses
Reimbursed        17,419                 17,419    17,897                 17,897
expenses
Cost of           20,641                 20,641    11,782                 11,782
services
Depreciation and  12,524                 12,524    8,039                  8,039
amortization
Restructuring     3,682     (3,682)      -         15,495    (15,495)     -
charges, net
 Total
operating          443,998   (8,576)      435,422   381,044   (15,495)     365,549
expenses
Operating         39,826    8,576        48,402    19,778    15,495       35,273
income
Other income,     6,619                  6,619     512                    512
net
Interest          (1,229)                (1,229)   (1,361)                (1,361)
expense, net
 Income
before provision
for income taxes

and equity in
earnings of        45,216    8,576        53,792    18,929    15,495       34,424
unconsolidated
subsidiaries
Equity in
earnings of        1,022                  1,022     974                    974
unconsolidated
subsidiaries
Income tax
provision (1)      16,062    2,796        18,858    8,289     4,889        13,178
(2)
 Net    $        $       $        $        $        $   
income           30,176    5,780        35,956    11,614    10,606       22,220
Earnings per
common share:
                   $                   $      $                   $   
 Basic       0.63                   0.75      0.25                    
                                                                           0.47
                   $                   $      $                   $   
 Diluted     0.62                   0.74      0.24                    
                                                                           0.47
Weighted-average
common shares
outstanding:
 Basic       47,892                 47,892    47,040                 47,040
 Diluted     48,748                 48,748    47,658                 47,658

    Explanation of Non-GAAP Adjustments
    The adjustments result in an effective tax rate of 35% and 38% for the as
(1) adjusted amounts for the six months ended October 31, 2013 and 2012,
    respectively.
    The six months ended October 31, 2013 includes the tax effect on
(2) restructuring charges, separation costs, and integration/acquisitioncosts
    associated with the acquisition of PDI Ninth House, while the six months
    ended October 31, 2012, includes the tax effect on restructuring charges.



KORN FERRY AND SUBSIDIARIES
RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO
EBITDA AND ADJUSTED EBITDA (NON-GAAP)
(in thousands)
(unaudited)
                Three Months Ended October 31, 2013
                Executive    Leadership
                Recruitment  & Talent     Futurestep  Corporate  Consolidated
                              Consulting
Fee revenue   $           $         $          $       $    
                139,992      66,078       31,898          -       237,968
Net income                                                          $     
                                                                      18,759
 Other                                                          (4,352)
income, net

Interest                                                              638
expense, net
 Equity
in earnings of                                                        (557)
unconsolidated
subsidiaries
 Income                                                         8,677
tax provision
Operating      $          $        $         $           23,165
income (loss)  28,127       7,006        2,539         (14,507)

Depreciation    2,000         3,161        440           979          6,580
and
amortization
 Other
income (loss),  451           45           (17)          3,873        4,352
net
 Equity
in earnings of  120           -            -             437          557
unconsolidated
subsidiaries
EBITDA        30,698        10,212       2,962         (9,218)      34,654
EBITDA         21.9%         15.5%        9.3%                       14.6%
margin

Separation      -             -            -             2,000        2,000
costs
Adjusted       $          $         $         $          $     
EBITDA         30,698       10,212       2,962         (7,218)     36,654
Adjusted       21.9%         15.5%        9.3%                       15.4%
EBITDA margin
                Three Months Ended October 31, 2012
                Executive    Leadership
                Recruitment  & Talent     Futurestep  Corporate  Consolidated
                              Consulting
Fee revenue   $           $         $          $       $    
                127,748      38,452       30,031          -       196,231
Net income                                                          $      
                                                                      1,196
 Other                                                          (1,529)
income, net

Interest                                                              762
expense, net
 Equity
in earnings of                                                        (344)
unconsolidated
subsidiaries
 Income                                                         2,684
tax provision
Operating      $          $        $        $           2,769
income (loss)  10,385       6,252        237          (14,105)

Depreciation    2,295         1,006        320           676          4,297
and
amortization
 Other
(loss) income,  (108)         19           1             1,617        1,529
net
 Equity
in earnings of  (70)          -            -             414          344
unconsolidated
subsidiaries
EBITDA        12,502        7,277        558           (11,398)     8,939
EBITDA         9.8%          18.9%        1.9%                       4.6%
margin

Restructuring   10,801        677          3,086         931          15,495
charges, net
Adjusted       $          $        $         $           $     
EBITDA         23,303       7,954        3,644         (10,467)    24,434
Adjusted       18.2%         20.7%        12.1%                      12.5%
EBITDA margin



KORN FERRY AND SUBSIDIARIES
RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO
EBITDA AND ADJUSTED EBITDA (NON-GAAP)
(in thousands)
(unaudited)
                         Six Months Ended October 31, 2013
                         Executive    Leadership
                         Recruitment  & Talent     Futurestep  Corporate  Consolidated
                                       Consulting
Fee revenue            $           $          $          $       $    
                         276,647      126,140      63,618          -       466,405
Net income                                                                   $     
                                                                               30,176
 Other income,                                                           (6,619)
net
 Interest                                                                1,229
expense, net
 Equity in
earnings of                                                                    (1,022)
unconsolidated
subsidiaries
 Income tax                                                              16,062
provision
Operating income        $          $         $         $           39,826
(loss)                  56,407       11,341       5,084         (33,006)
 Depreciation and  3,778         6,058        848           1,840        12,524
amortization
 Other income,     832           53           548           5,186        6,619
net
 Equity in
earnings of              222           -            -             800          1,022
unconsolidated
subsidiaries
EBITDA                 61,239        17,452       6,480         (25,180)     59,991
EBITDA margin          22.1%         13.8%        10.2%                      12.9%
 Restructuring     1,336         1,149        1,134         63           3,682
charges, net
 Separation        -             -            -             4,500        4,500
costs

Integration/acquisition  -             -            -             394          394
costs
Adjusted EBITDA        $          $         $         $           $     
                         62,575       18,601       7,614         (20,223)    68,567
Adjusted EBITDA         22.6%         14.7%        12.0%                      14.7%
margin
                         Six Months Ended October 31, 2012
                         Executive    Leadership
                         Recruitment  & Talent     Futurestep  Corporate  Consolidated
                                       Consulting
Fee revenue            $           $         $          $       $    
                         255,194      66,844       60,887          -       382,925
Net income                                                                   $     
                                                                               11,614
 Other income,                                                           (512)
net
 Interest                                                                1,361
expense, net
 Equity in
earnings of                                                                    (974)
unconsolidated
subsidiaries
 Income tax                                                              8,289
provision
Operating income        $          $         $         $           19,778
(loss)                  32,834       10,514       3,419         (26,989)
 Depreciation and  4,501         1,623        616           1,299        8,039
amortization
 Other (loss)      (50)          34           10            518          512
income, net
 Equity in
earnings of              157           -            -             817          974
unconsolidated
subsidiaries
EBITDA                 37,442        12,171       4,045         (24,355)     29,303
EBITDA margin          14.7%         18.2%        6.6%                       7.7%
 Restructuring     10,801        677          3,086         931          15,495
charges, net
Adjusted EBITDA        $          $         $         $           $     
                         48,243       12,848       7,131         (23,424)    44,798
Adjusted EBITDA         18.9%         19.2%        11.7%                      11.7%
margin

SOURCE Korn Ferry

Website: http://www.kornferry.com
Contact: Investor Relations: Gregg Kvochak, (310) 556-8550; or For Media: Mike
Distefano, (310) 843-4199