Korn Ferry International Announces Fourth Quarter and Fiscal 2014 Results of Operations

 Korn Ferry International Announces Fourth Quarter and Fiscal 2014 Results of
                                  Operations

Highlights

-- Korn Ferry reports record quarterly fee revenue of $251.7 million in the
fourth quarter of 2014, an increase of 10.4% (the effect of exchange rates was
not significant), from Q4 FY'13, with increases realized across all segments:

Futurestep 20.3%

Leadership and Talent Consulting 10.1%

Executive Recruitment 8.3%

-- Adjusted EBITDA margin was 13.7% in Q4 FY'14 compared to 12.2% in Q4 FY'13.

-- Q4 FY'14 diluted earnings per share was $0.43 compared to $0.25 in Q4
FY'13. Adjusted diluted earnings per share was $0.32 in Q4 FY'13, which
excludes $3.5 million of net restructuring and integration/acquisition costs.
No such costs were incurred in Q4 FY'14.

-- For the full year of FY'14, Korn Ferry reports record annual fee revenue of
$960.3 million, an increase of 18.1% (19.1% on a constant currency basis) over
FY'13. Adjusting for the prior year acquisitions, annual fee revenue increased
9.3% over FY'13.

-- FY'14 diluted earnings per share was $1.48 compared to $0.70 in FY'13.
Adjusted diluted earnings per share was $1.60 in FY'14 and $1.10 in FY'13,
excluding $8.6 million and $26.5 million of net restructuring,
integration/acquisition and separation costs, respectively.

PR Newswire

LOS ANGELES, June 16, 2014

LOS ANGELES, June 16, 2014 /PRNewswire/ --Korn/Ferry International (NYSE:
KFY), a single source of leadership and talent consulting services, today
announced record quarterly and annual fee revenues of $251.7 million and
$960.3 million for the fourth quarter and FY'14, respectively. Fourth quarter
diluted earnings per share were $0.43. Full year adjusted diluted earnings
per share were $1.60, excluding restructuring, integration/acquisition, and
separation costs of $8.6 million. Including such costs, diluted earnings per
share was $1.48 for the year ended April 30, 2014.

"Korn Ferry closed out the fiscal year with a strong quarter – 10.7% growth in
fee revenue for the quarter and 19.1% growth for the year, at constant
currency – which represents the strongest top line results in the company's
history, with earnings per share of $0.43," said Gary D. Burnison, CEO, Korn
Ferry. "Korn Ferry's performance is a testament to our differentiated
strategy, robust intellectual property and talented people."

Financial Results
(dollars in millions, except per share amounts)
                     Fourth Quarter                Year to Date
                     FY'14          FY'13          FY'14        FY'13
Fee revenue          $    251.7  $   227.9   $   960.3  $   812.8
Total revenue        $    260.8  $   238.6   $   995.6  $   849.7
Operating income     $          $    15.4  $         $    43.9
                     24.5                          91.6
Operating margin     9.7%           6.8%           9.5%         5.4%
Net income           $          $    12.2  $         $    33.3
                     21.2                          72.7
Basic earnings per   $          $    0.26  $         $    0.71
share                0.44                          1.51
Diluted earnings per $          $    0.25  $         $    0.70
share                0.43                          1.48

EBITDA Results (a):   Fourth Quarter                Year to Date
                      FY'14          FY'13          FY'14        FY'13
EBITDA                $          $    24.3  $   129.7  $   
                      34.5                                       71.3
EBITDA margin         13.7%          10.7%          13.5%        8.8%
Adjusted Results (b): Fourth Quarter                Year to Date
                      FY'14          FY'13          FY'14        FY'13
Operating income      $          $    18.9  $   100.2  $   
                      24.5                                       70.4
Operating margin      9.7%           8.3%           10.4%        8.7%
EBITDA (a)            $          $    27.8  $   138.3  $   
                      34.5                                       97.8
EBITDA margin (a)     13.7%          12.2%          14.4%        12.0%
Net income            $          $    15.6  $         $   
                      21.2                          78.5         52.8
Basic earnings per    $          $    0.33  $         $   
share                 0.44                          1.63         1.12
Diluted earnings per  $          $    0.32  $         $   
share                 0.43                          1.60         1.10

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



                                 Fourth Quarter          Year to Date
                                 FY'14        FY'13      FY'14      FY'13
Restructuring charges, net of    $       $      $      $    
recoveries                          —       2.9     3.7      22.8
Integration/acquisition costs    $       $      $      $    
                                    —       0.6     0.4       3.1
Separation costs                 $       $      $      $    
                                    —       —      4.5       0.6

Fiscal 2014 Fourth Quarter Results

Fee revenue was $251.7 million in Q4 FY'14, an increase of $23.8 million, or
10.4% (the effect of exchange rates was not significant), compared to the
year-ago quarter, primarily driven by an $11.4 million, $6.3 million, and a
$6.1 million increase in fee revenue in Executive Recruitment, Futurestep and
Leadership & Talent Consulting, respectively. The overall fee revenue
increase was driven by fee revenue growth in financial services, technology,
life science/healthcare and the industrial sectors.

Compensation and benefit expenses were $170.6 million in Q4 FY'14, an increase
of $16.2 million, or 10.5%, compared to the year-ago quarter. The increase
was due to an increase in performance related bonus expense resulting from the
increase in fee revenue and profitability, as well as an increase in salaries
and related payroll taxes. The increase in salaries and related payroll taxes
was due to a 3.5% increase in the average headcount in Q4 FY'14 compared to Q4
FY'13.

General and administrative expenses were $39.1 million in Q4 FY'14, a decrease
of $1.0 million, or 2.5%, from the year-ago quarter, primarily due to a
decrease in office and premise expense of $1.6 million due to synergies
obtained from the PDI Ninth House and Global Novations acquisitions (the
"prior year acquisitions") and a decrease in foreign exchange loss of $0.6
million, offset by an increase in travel and business development related
expenses in Q4 FY'14 compared to the year-ago quarter.

Adjusted EBITDA was $34.5 million in Q4 FY'14, an increase of $6.7 million, or
24.1%, compared to Q4 FY'13. Adjusted EBITDA margin was 13.7% and 12.2% in Q4
FY'14 and Q4 FY'13, respectively.

On a GAAP basis, operating income was $24.5 million in Q4 FY'14 and $15.4
million in Q4 FY'13 resulting in a margin of 9.7% in the current quarter
compared to 6.8% in the year-ago quarter.

Fiscal 2014 Results

Fee revenue was $960.3 million in FY'14, an increase of $147.5 million, or
18.1% (19.1% on a constant currency basis), compared to FY'13. Adjusting for
the prior year acquisitions, fee revenue was $888.4 million in FY'14, an
increase of $75.6 million, or 9.3%, compared to FY'13. The increase in fee
revenue was driven by a 9.2% increase in the number of engagements billed in
FY'14 compared to FY'13. The overall fee revenue increase was driven by fee
revenue growth in life science/healthcare, industrial, technology and
financial services sectors.

Adjusted EBITDA was $138.3 million during FY'14, an increase of $40.5 million,
or 41.4%, compared to FY'13. Adjusted EBITDA margin was 14.4% and 12.0% in
FY'14 and FY'13, respectively.

On a GAAP basis, operating income was $91.6 million in FY'14, an increase of
$47.7 million, or 108.7%, compared to FY'13, resulting in an operating margin
of 9.5% in the current year compared to 5.4% in the prior year.

Balance Sheet and Liquidity

Cash and marketable securities were $468.3 million at April 30, 2014, compared
to $366.0 million at April 30, 2013. Cash and marketable securities include
$116.2 million held in trust for deferred compensation plans at April 30,
2014, compared to $98.0 million at April 30, 2013. Cash and marketable
securities increased by $102.3 million from April 30, 2013, primarily
attributable to cash provided by operating activities, partially offset by
bonuses earned in fiscal 2013 and paid during the first quarter of fiscal 2014
and $15.0 million in contingent consideration paid to selling stockholders of
PDI Ninth House.

Results by Segment

Selected Executive Recruitment Data
(dollars in millions)
                             Fourth Quarter               Year to Date
                             FY'14          FY'13         FY'14  FY'13
Fee revenue                  $   148.2   $   136.8   $    $   522.5
                                                          568.9
Total revenue                $   153.7   $   142.8   $    $   544.8
                                                          591.2
Operating income             $    28.4  $    26.5  $    $   
                                                          116.4  81.0
Operating margin             19.1%          19.4%         20.5%  15.5%
Ending number of consultants 432            399           432    399
Average number of            431            395           416    400
consultants
Engagements billed           3,048          2,718         8,144  7,554
New engagements (a)          1,303          1,231         5,052  4,750



EBITDA Results (b):   Fourth Quarter                Year to Date
                      FY'14          FY'13          FY'14       FY'13
EBITDA                $    31.7  $    29.4   $  126.5  $    91.2
EBITDA margin         21.4%          21.5%          22.2%       17.5%
Adjusted Results (c): Fourth Quarter                Year to Date
                      FY'14          FY'13          FY'14       FY'13
Operating income      $    28.4  $    23.9  $  117.7  $    89.7
Operating margin      19.1%          17.5%          20.7%       17.2%
EBITDA (b)            $    31.7  $    26.8  $  127.8  $    99.9
EBITDA margin (b)     21.4%          19.6%          22.5%       19.1%

(a)             Represents new engagements opened in the respective period.
                EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA
(b)             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'14        FY'13        FY'14       FY'13
Restructuring charges, net  $       $       $      $     
of recoveries                  —     (2.6)        1.3       8.1
Separation costs            $       $      $      $     
                               —       —         —        0.6

Executive Recruitment

Fee revenue was $148.2 million in Q4 FY'14, an increase of $11.4 million, or
8.3% (the effect of exchange rates was not significant), compared to Q4
FY'13. The increase in fee revenue was driven by increases in Europe, North
America and Asia Pacific, partially offset by a decrease in Latin America.
This increase is primarily attributed to a 12.1% increase in the number of
executive recruitment engagements billed, offset by a 3.4% decrease in the
weighted-average fees billed per engagement in Q4 FY'14 compared to the Q4
FY'13.

Adjusted EBITDA was $31.7 million during Q4 FY'14, an increase of $4.9
million, or 18.3%, compared to Q4 FY'13. This increase is primarily
attributed to the $11.4 million increase in fee revenue in Q4 FY'14 as
compared to Q4 FY'13, partially offset by an increase of $5.9 million in
compensation and benefit expenses driven primarily by an increase in
performance related bonus expense and salaries and related payroll taxes. For
the full year, adjusted EBITDA increased by $27.9 million due to a $46.4
million increase in fee revenue and a decrease in general and administrative
expenses offset by an increase in compensation and benefit expenses.

On a GAAP basis, operating income was $28.4 million in Q4 FY'14, an increase
of $1.9 million, or 7.2%, compared to Q4 FY'13, resulting in an operating
margin of 19.1% in the current quarter compared to 19.4% in the year-ago
quarter. On a GAAP basis, operating income was $116.4 million in FY'14, an
increase of $35.4 million, or 43.7%, compared to FY'13, resulting in an
operating margin of 20.5% in FY'14 compared to 15.5% in FY'13.



Selected Leadership & Talent Consulting Data
(dollars in millions)
                             Fourth Quarter             Year to Date
                             FY'14       FY'13          FY'14    FY'13
Fee revenue                  $        $    60.1   $      $   168.1
                             66.2                      254.6
Total revenue                $        $    63.1   $      $   176.6
                             68.4                      263.0
Operating (loss) income      $       $           $     $    
                             6.8        (1.3)          23.8     6.4
Operating margin             10.3%       (2.1)%         9.4%     3.8%
Ending number of consultants 127         133            127      133
(a)
Staff utilization (b)        70%         67%            67%      64%
EBITDA Results (c):          Fourth Quarter             Year to Date
                             FY'14       FY'13          FY'14    FY'13
EBITDA                       $        $    1.2   $     $   
                             10.0                      36.4     12.4
EBITDA margin               15.1%       2.0%           14.3%    7.4%
Adjusted Results (d):        Fourth Quarter             Year to Date
                             FY'14       FY'13          FY'14    FY'13
Operating income             $       $     3.8  $     $   
                             6.8                       25.0     16.6
Operating margin             10.3%       6.3%           9.8%     9.9%
EBITDA (c)                   $       $     6.3  $     $   
                             10.0                       37.6     22.6
EBITDA margin (c)            15.1%       10.4%          14.8%    13.4%

(a)       Represents number of employees originating consulting services.
          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):



                         Fourth Quarter              Year to Date
                         FY'14          FY'13        FY'14        FY'13
Restructuring charges,   $        $       $       $     
net of recoveries          —          5.1        1.2         10.2

Leadership & Talent Consulting

Fee revenue was $66.2 million in Q4 FY'14, an increase of $6.1 million, or
10.1% (the effect of exchange rates was not significant), from the year-ago
quarter. The increase in fee revenue was driven by increases in North America
and Europe. This increase is primarily attributed to an increase in
consulting fee revenue of $3.8 million and an increase in product revenue of
$2.3 million in Q4 FY'14 compared to the year-ago quarter.

Adjusted EBITDA was $10.0 million during Q4 FY'14, an increase of $3.7
million, or 58.7%, compared to Q4 FY'13. Adjusted EBITDA margin was 15.1% in
Q4 FY'14 compared to 10.4% in Q4 FY'13 due to an increase in fee revenue of
$6.1 million and a decrease in general administrative expenses of $1.2
million, offset by an increase in compensation and benefit expense of $4.2
million. The decrease in general and administrative expenses was due to a
decrease in office and premise expense due to synergies obtained from the
prior year acquisitions. The increase in compensation and benefit expenses
was due to an increase in performance related bonus expense, salaries and
related payroll taxes, and an increase in the use of outside contractors. For
the full year, adjusted EBITDA was $37.6 million, an increase of $15.0
million, or 66.4%, compared to FY'13. Adjusted EBITDA margin was 14.8%
compared 13.4% in FY'13.

On a GAAP basis, operating income was $6.8 million in Q4 FY'14, an increase of
$8.1 million compared to the year-ago quarter, resulting in an operating
margin of 10.3% in the current quarter compared to (2.1%) in the year-ago
quarter. On a GAAP basis, operating income was $23.8 million in FY'14, an
increase of $17.4 million compared to FY'13 resulting in an operating margin
of 9.4% in FY'14 compared to 3.8% in FY'13.

Selected Futurestep Data
(dollars in millions)
                     Fourth Quarter               Year to Date
                     FY'14           FY'13        FY'14          FY'13
Fee revenue          $    37.3   $         $   136.8   $   122.2
                                     31.0
Total revenue        $    38.7   $         $   141.4   $   128.3
                                     32.7
Operating income     $     4.3  $        $           $   
                                     3.9          13.3          11.0
Operating margin     11.7%           12.4%        9.8%           9.0%
Engagements billed   1,205           1,032        3,246          3,074
New engagements (a)  598             524          2,427          2,308
EBITDA Results (b):   Fourth Quarter              Year to Date
                      FY'14          FY'13        FY'14          FY'13
EBITDA               $     4.8  $        $           $   
                                     4.1          15.7          12.2
EBITDA margin        13.1%           13.3%        11.5%          10.0%
Adjusted Results (c): Fourth Quarter              Year to Date
                      FY'14          FY'13        FY'14          FY'13
Operating income      $          $        $    14.5  $   
                      4.3           4.3                         14.5
Operating margin      11.7%          13.8%        10.6%          11.9%
EBITDA (b)            $          $        $    16.9  $   
                      4.8           4.5                         15.7
EBITDA margin (b)     13.1%          14.7%        12.3%          12.9%

(a)           Represents new engagements opened in the respective period.
              EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA
(b)           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'14          FY'13        FY'14        FY'13
Restructuring charges,   $        $       $       $     
net of recoveries          —          0.4        1.2          3.5

Futurestep

Fee revenue was $37.3 million in Q4 FY'14, an increase of $6.3 million, or
20.3% (21.0% on a constant currency basis), compared to the year-ago quarter.
The increase in fee revenue was driven by a 16.8% increase in the number of
engagements billed and a 3.0% increase in the weighted average fees billed per
engagement in Q4 FY'14 compared to Q4 FY'13. The increase was primarily due
to large recruitment process outsourcing contracts entered into in the first
six months of FY'14, which continued to be delivered in the current quarter
and an increase in professional recruitment.

Adjusted EBITDA was $4.8 million during Q4 FY'14, an increase of $0.3 million,
or 6.7%, compared to Q4 FY'13, due primarily to the increase in fee revenue of
$6.3 million, offset by an increase in compensation and benefit expenses of
$4.6 million (due to an increase in performance related bonus expense and
headcount), an increase in cost of services expense of $0.7 million and an
increase in general and administrative expenses of $0.5 million. For the full
year, adjusted EBITDA increased $1.2 million due to the $14.6 million increase
in fee revenue, partially offset by an increase in compensation and benefit
expenses of $11.0 million and $2.3 million in cost of services expenses. The
increase in compensation and benefit expenses for the full year is primarily
driven by an increase in staffing to accommodate a number of larger
recruitment process outsourcing contracts won by the Company in the current
fiscal year and an increase in performance related bonus expense.

On a GAAP basis, operating income was $4.3 million in Q4 FY'14, an increase of
$0.4 million, compared to Q4 FY'13, resulting in an operating margin of 11.7%
in the current quarter compared to 12.4% in the year-ago quarter. On a GAAP
basis, operating income was $13.3 million in FY'14, an increase of $2.3
million, compared to FY'13, resulting in an operating margin of 9.8% in FY'14
compared to 9.0% in FY'13.

Outlook

As previously disclosed, over the past year we have implemented common
technology systems designed to allow us to further integrate our legacy
businesses with our recent acquisitions. Due to the efficiencies we expect to
gain from these investments, other integration items from recent acquisitions
and other cost savings initiatives, we plan to take additional actions to
rationalize our cost structure in Q1 FY'15. We estimate the realized savings
in FY'15 associated with these actions to be in the range of $0.08 to $0.10
per diluted earnings share with the cost of these actions in Q1 FY'15 to be in
the range of $0.06 to $0.08 per diluted earnings share. Assuming worldwide
economic conditions, financial markets and foreign exchange rates remain
steady, Q1 FY'15 fee revenue is likely to range from $240 million to $250
million and, after taking into consideration the actions discussed above,
adjusted diluted earnings per share are likely to range from $0.37 to $0.43
with diluted earnings per share as measured by Generally Accepted Accounting
Principles likely to range from $0.29 to $0.37

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. We will also post to this
section of our website earnings slides, which will accompany our webcast, and
other important information, and encourage you to review the information that
we make available on our website.

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), integration/acquisition and separation
    costs;
  oadjusted net income, adjusted to exclude restructuring (net of
    recoveries), integration/acquisition and separation costs, net of income
    tax effect;
  oadjusted basic and diluted earnings per share, adjusted to exclude
    restructuring (net of recoveries), 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), 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.

KORN FERRY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
                                Three Months Ended    Year Ended
                                April 30,             April 30,
                                2014        2013        2014        2013
                                (unaudited)
Fee revenue                   $ 251,712   $ 227,902   $ 960,301   $ 812,831
Reimbursed out-of-pocket       9,086       10,705      35,258      36,870
engagement expenses
 Total revenue       260,798     238,607     995,559     849,701
Compensation and benefits     170,595     154,487     646,889     555,346
General and administrative     39,109      40,096      152,040     142,771
expenses
Reimbursed expenses           9,086       10,705      35,258      36,870
Cost of services              10,213      9,129       39,910      28,977
Depreciation and               7,315       5,877       26,172      19,004
amortization
Restructuring charges, net    -           2,921       3,682       22,857
 Total operating      236,318     223,215     903,951     805,825
expenses
Operating income             24,480      15,392      91,608      43,876
Other income, net             2,018       2,501       9,769       6,309
Interest expense, net         (261)       (644)       (2,363)     (2,365)
 Income before
provision for income taxes
 and equity in
earnings of unconsolidated      26,237      17,249      99,014      47,820
subsidiaries
Equity in earnings of          677         543         2,169       2,110
unconsolidated subsidiaries
Income tax provision         5,703       5,595       28,492      16,637
 Net income         $  21,211  $  12,197  $  72,691  $  33,293
Earnings per common share:
 Basic                    $        $        $        $   
                                0.44        0.26        1.51        0.71
 Diluted                  $        $        $        $   
                                0.43        0.25        1.48        0.70
Weighted-average common
shares outstanding:
 Basic                    48,523      47,452      48,162      47,224
 Diluted                  49,458      48,345      49,145      47,883



KORN FERRY AND SUBSIDIARIES
FINANCIAL SUMMARY BY SEGMENT
(in thousands)
(unaudited)
                         Three Months Ended April 30,        Year Ended April 30,
                         2014              2013      %       2014              2013      %
                                                     Change                              Change
Fee Revenue:
Executive recruitment:
 North America           $                $        4%      $                 $         6%
                         80,230           77,511           306,768          290,317
 EMEA                   40,175            32,242    25%     147,917           128,807   15%
 Asia Pacific            21,753            19,199    13%     84,816            73,221    16%
 South America           6,028             7,839     (23%)   29,374            30,134    (3%)
Total executive          148,186           136,791   8%      568,875           522,479   9%
recruitment
Leadership & Talent      66,279            60,116    10%     254,636           168,115   51%
Consulting
Futurestep               37,247            30,995    20%     136,790           122,237   12%
 Total fee revenue       251,712           227,902   10%     960,301           812,831   18%
Reimbursed
out-of-pocket engagement 9,086             10,705    (15%)   35,258            36,870    (4%)
expenses
 Total revenue           $                 $         9%      $                 $         17%
                         260,798          238,607          995,559          849,701
Reconciliation of Operating Income (GAAP) to
Adjusted Operating Income
Operating Income:                  Margin            Margin            Margin            Margin
Executive recruitment:
 North America           $        23.0%   $        22.1%   $        22.9%   $        20.3%
                         18,483           17,104           70,256           58,832
 EMEA                    4,699     11.7%   4,137     12.8%   23,168    15.7%   9,173     7.1%
 Asia Pacific            4,380     20.1%   3,482     18.1%   17,274    20.4%   6,973     9.5%
 South America           761       12.6%   1,761     22.5%   5,654     19.2%   5,987     19.9%
Total executive          28,323    19.1%   26,484    19.4%   116,352   20.5%   80,965    15.5%
recruitment
Leadership & Talent      6,855     10.3%   (1,292)   (2.1%)  23,847    9.4%    6,424     3.8%
Consulting
Futurestep               4,343     11.7%   3,834     12.4%   13,352    9.8%    10,975    9.0%
Corporate                (15,041)          (13,634)          (61,943)          (54,488)
 Total operating income $        9.7%    $        6.8%    $        9.5%    $        5.4%
                         24,480           15,392           91,608           43,876
Restructuring, Separation, and
Integration/Acquisition Costs, net:
Executive recruitment:
 North America           $      -       $       (2.4%)  $      0.3%    $       1.2%
                            -           (1,853)            816             3,583
 EMEA                    -         -       (770)     (2.4%)  460       0.3%    4,498     3.5%
 Asia Pacific            -         -       16        0.1%    60        0.0%    629       0.9%
 South America           -         -       -         -       -         -       -         -
Total executive          -         -       (2,607)   (1.9%)  1,336     0.2%    8,710     1.7%
recruitment
Leadership & Talent      -         -       5,080     8.4%    1,149     0.4%    10,198    6.1%
Consulting
Futurestep               -         -       441       1.4%    1,134     0.8%    3,527     2.9%
Corporate                                  598               4,957             4,044
 Total restructuring,
 separation, and         $      -       $       1.5%    $       0.9%    $        3.3%
 integration/acquisition    -           3,512            8,576            26,479
 costs, net
Adjusted Operating Income:
 (Excluding Restructuring,
Separation, and                    Margin            Margin            Margin            Margin
Integration/Acquisition Costs,
net)
Executive recruitment:
 North America           $        23.0%   $        19.7%   $        23.2%   $        21.5%
                         18,483           15,251           71,072           62,415
 EMEA                    4,699     11.7%   3,367     10.4%   23,628    16.0%   13,671    10.6%
 Asia Pacific            4,380     20.1%   3,498     18.2%   17,334    20.4%   7,602     10.4%
 South America           761       12.6%   1,761     22.5%   5,654     19.2%   5,987     19.9%
Total executive          28,323    19.1%   23,877    17.5%   117,688   20.7%   89,675    17.2%
recruitment
Leadership & Talent      6,855     10.3%   3,788     6.3%    24,996    9.8%    16,622    9.9%
Consulting
Futurestep               4,343     11.7%   4,275     13.8%   14,486    10.6%   14,502    11.9%
Corporate               (15,041)          (13,036)          (56,986)          (50,444)
 Total adjusted         $        9.7%    $        8.3%    $         10.4%   $        8.7%
 operating income       24,480           18,904           100,184          70,355



KORN FERRY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
                                                  April 30,
                                                  2014           2013
ASSETS
Cash and cash equivalents                         $  333,717   $  224,066
Marketable securities                             9,566          20,347
Receivables due from clients, net of allowance
for doubtful accounts
of $9,513 and $9,097 respectively                 175,986        161,508
Income taxes and other receivables                8,244          8,944
Deferred income taxes                             4,486          3,511
Prepaid expenses and other assets                 29,955         28,724
Total current assets                              561,954        447,100
Marketable securities, non-current                124,993        121,569
Property and equipment, net                       60,434         53,628
Cash surrender value of company owned life        94,274         85,873
insurance policies, net of loans
Deferred income taxes                             55,039         63,203
Goodwill                                          257,582        257,293
Intangible assets, net                            49,560         58,187
Investments and other assets                      29,830         28,376
Total assets                                      $ 1,233,666    $ 1,115,229
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                                  $   19,375  $   19,460
Income taxes payable                              13,014         5,502
Compensation and benefits payable                 192,035        160,298
Other accrued liabilities                         62,509         83,291
Total current liabilities                         286,933        268,551
Deferred compensation and other retirement plans  169,235        159,706
Other liabilities                                 21,962         22,504
Total liabilities                                 478,130        450,761
Stockholders' equity
Common stock: $0.01 par value, 150,000 shares
authorized, 62,282 and
61,022 shares issued and 49,811 and 48,734        449,631        431,508
shares outstanding, respectively
Retained earnings                                 308,781        236,090
Accumulated other comprehensive loss, net         (2,388)        (2,631)
Stockholders' equity                              756,024        664,967
Less: notes receivable from stockholders         (488)          (499)
Total stockholders' equity                        755,536        664,468
Total liabilities and stockholders' equity        $ 1,233,666    $ 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
                   April 30, 2014                   April 30, 2013
                   As        Adjustments  As        As        Adjustments  As
                   Reported               Adjusted  Reported               Adjusted
Fee revenue      $                      $         $                      $
                   251,712                251,712   227,902                227,902
Reimbursed
out-of-pocket      9,086                  9,086     10,705                 10,705
engagement
expenses
 Total   260,798                260,798   238,607                238,607
revenue
Compensation and  170,595                170,595   154,487                154,487
benefits
General and
administrative     39,109                 39,109    40,096    (591)        39,505
expenses
Reimbursed        9,086                  9,086     10,705                 10,705
expenses
Cost of           10,213                 10,213    9,129                  9,129
services
Depreciation and  7,315                  7,315     5,877                  5,877
amortization
Restructuring     -                      -         2,921     (2,921)      -
charges, net
 Total
operating          236,318   -            236,318   223,215   (3,512)      219,703
expenses
Operating         24,480    -            24,480    15,392    3,512        18,904
income
Other income,     2,018                  2,018     2,501                  2,501
net
Interest          (261)                  (261)     (644)                  (644)
expense, net
 Income
before provision
for income taxes
and equity in
earnings of        26,237    -            26,237    17,249    3,512        20,761
unconsolidated
subsidiaries
Equity in
earnings of        677                    677       543                    543
unconsolidated
subsidiaries
Income tax
provision (1)      5,703                  5,703     5,595     119          5,714
(2)
 Net    $        $       $        $        $        $ 
income            21,211       -      21,211    12,197    3,393       15,590
Earnings per
common share:
 Basic       $                   $      $                   $   
                   0.44                   0.44      0.26                   0.33
 Diluted     $                   $      $                   $   
                   0.43                   0.43      0.25                   0.32
Weighted-average
common shares
outstanding:
 Basic       48,523                 48,523    47,452                 47,452
 Diluted     49,458                 49,458    48,345                 48,345
Explanation of
Non-GAAP
Adjustments

(1)         The adjustments result in an effective tax rate of 28% for the as
            adjusted amounts for the three months ended April 30, 2013.
            The three months ended April 30, 2013, includes the tax effect on
(2)         restructuring charges and integration/acquisition costs associated
            with the acquisition of PDI Ninth House.



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)
                   Year Ended                     Year Ended
                   April 30, 2014                   April 30, 2013
                   As        Adjustments  As        As        Adjustments  As
                   Reported               Adjusted  Reported               Adjusted
Fee revenue      $                     $        $                     $ 
                   960,301                960,301   812,831                812,831
Reimbursed
out-of-pocket      35,258                 35,258    36,870                 36,870
engagement
expenses
 Total   995,559                995,559   849,701                849,701
revenue
Compensation and  646,889   (4,500)      642,389   555,346   (516)        554,830
benefits
General and
administrative     152,040   (394)        151,646   142,771   (3,106)      139,665
expenses
Reimbursed        35,258                 35,258    36,870                 36,870
expenses
Cost of           39,910                 39,910    28,977                 28,977
services
Depreciation and  26,172                 26,172    19,004                 19,004
amortization
Restructuring     3,682     (3,682)      -         22,857    (22,857)     -
charges, net
 Total
operating          903,951   (8,576)      895,375   805,825   (26,479)     779,346
expenses
Operating         91,608    8,576        100,184   43,876    26,479       70,355
income
Other income,     9,769                  9,769     6,309                  6,309
net
Interest          (2,363)                (2,363)   (2,365)                (2,365)
expense, net
 Income
before provision
for income taxes
and equity in
earnings of        99,014    8,576        107,590   47,820    26,479       74,299
unconsolidated
subsidiaries
Equity in
earnings of        2,169                  2,169     2,110                  2,110
unconsolidated
subsidiaries
Income tax
provision (1)      28,492    2,796        31,288    16,637    6,953        23,590
(2)
 Net    $       $       $       $       $        $  
income           72,691    5,780        78,471    33,293    19,526       52,819
Earnings per
common share:
 Basic       $                   $      $                   $   
                    1.51                 1.63    0.71                 1.12
 Diluted     $                   $      $                   $   
                    1.48                 1.60    0.70                 1.10
Weighted-average
common shares
outstanding:
 Basic       48,162                 48,162    47,224                 47,224
 Diluted     49,145                 49,145    47,883                 47,883
Explanation of Non-GAAP Adjustments

    The adjustments result in an effective tax rate of 29% and 32%
(1) for the as adjusted amounts for the year ended April 30, 2014
    and 2013, respectively.
    The year ended April 30, 2014 and 2013 include the tax effect on
(2) restructuring charges, separation costs, and integration/acquisition costs
    associated with the acquisition of PDI Ninth House.



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 April 30, 2014
                         Executive    Leadership
                         Recruitment  & Talent     Futurestep  Corporate  Consolidated
                                       Consulting
Fee revenue            $  148,186  $          $           $       $   
                                       66,279       37,247         -        251,712
Net income                                                                   $     
                                                                               21,211
 Other income,                                                           (2,018)
net
 Interest                                                                261
expense, net
 Equity in
earnings of                                                                    (677)
unconsolidated
subsidiaries
 Income tax                                                              5,703
provision
Operating income        $           $         $          $           24,480
(loss)                  28,323       6,855        4,343        (15,041)
 Depreciation and  2,614         3,161        512           1,028        7,315
amortization
 Other income      683           (39)         7             1,367        2,018
(loss), net
 Equity in
earnings of              125           -            -             552          677
unconsolidated
subsidiaries
EBITDA                 31,745        9,977        4,862         (12,094)     34,490
EBITDA margin          21.4%         15.1%        13.1%                      13.7%
Adjusted EBITDA        $           $         $          $           $     
                         31,745       9,977        4,862        (12,094)     34,490
Adjusted EBITDA         21.4%         15.1%        13.1%                      13.7%
margin
                         Three Months Ended April 30, 2013
                         Executive    Leadership
                         Recruitment  & Talent     Futurestep  Corporate  Consolidated
                                       Consulting
Fee revenue            $  136,791  $          $           $       $   
                                       60,116       30,995         -        227,902
Net income                                                                   $     
                                                                               12,197
 Other income,                                                           (2,501)
net
 Interest                                                                644
expense, net
 Equity in
earnings of                                                                    (543)
unconsolidated
subsidiaries
 Income tax                                                              5,595
provision
Operating income        $           $          $          $           15,392
(loss)                  26,484       (1,292)     3,834        (13,634)
 Depreciation and  2,243         2,625        240           769          5,877
amortization
 Other income      518           (146)        36            2,093        2,501
(loss), net
 Equity in
earnings of              129           -            -             414          543
unconsolidated
subsidiaries
EBITDA                 29,374        1,187        4,110         (10,358)     24,313
EBITDA margin          21.5%         2.0%         13.3%                      10.7%
 Restructuring
(recoveries) charges,    (2,607)       5,080        441           7            2,921
net

Integration/acquisition  -             -            -             591          591
costs
Adjusted EBITDA        $           $         $          $          $     
                         26,767       6,267        4,551        (9,760)      27,825
Adjusted EBITDA         19.6%         10.4%        14.7%                      12.2%
margin



KORN FERRY AND SUBSIDIARIES
RECONCILIATION OF NET INCOME AND OPERATING INCOME (GAAP) TO
EBITDA AND ADJUSTED EBITDA (NON-GAAP)
(in thousands)
(unaudited)
                         Year Ended April 30, 2014
                         Executive    Leadership
                         Recruitment  & Talent     Futurestep  Corporate  Consolidated
                                       Consulting
Fee revenue            $  568,875  $  254,636  $  136,790   $       $   
                                                                    -        960,301
Net income                                                                   $    
                                                                               72,691
 Other income,                                                           (9,769)
net
 Interest expense,                                                       2,363
net
 Equity in
earnings of                                                                    (2,169)
unconsolidated
subsidiaries
 Income tax                                                              28,492
provision
Operating income        $  116,352  $          $   13,352  $ (61,943)  91,608
(loss)                                23,847
 Depreciation and  8,012         12,491       1,797         3,872        26,172
amortization
 Other income,     1,769         106          583           7,311        9,769
net
 Equity in
earnings of              383           -            -             1,786        2,169
unconsolidated
subsidiaries
EBITDA                 126,516       36,444       15,732        (48,974)     129,718
EBITDA margin          22.2%         14.3%        11.5%                      13.5%
 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        $  127,852  $          $   16,866  $ (44,017)  $   
                                       37,593                                  138,294
Adjusted EBITDA margin 22.5%         14.8%        12.3%                      14.4%
                         Year Ended April 30, 2013
                         Executive    Leadership
                         Recruitment  & Talent     Futurestep  Corporate  Consolidated
                                       Consulting
Fee revenue            $  522,479  $  168,115  $  122,237   $       $   
                                                                    -        812,831
Net income                                                                   $    
                                                                               33,293
 Other income,                                                           (6,309)
net
 Interest expense,                                                       2,365
net
 Equity in
earnings of                                                                    (2,110)
unconsolidated
subsidiaries
 Income tax                                                              16,637
provision
Operating income        $           $         $   10,975  $ (54,488)  43,876
(loss)                  80,965       6,424
 Depreciation and  8,991         6,012        1,180         2,821        19,004
amortization
 Other income      793           (75)         51            5,540        6,309
(loss), net
 Equity in
earnings of              434           -            -             1,676        2,110
unconsolidated
subsidiaries
EBITDA                 91,183        12,361       12,206        (44,451)     71,299
EBITDA margin          17.5%         7.4%         10.0%                      8.8%
 Restructuring     8,194         10,198       3,527         938          22,857
charges, net

Integration/acquisition  -             -            -             3,106        3,106
costs
 Separation        516           -            -             -            516
costs
Adjusted EBITDA        $           $          $   15,733  $ (40,407)  $    
                         99,893       22,559                                  97,778
Adjusted EBITDA margin 19.1%         13.4%        12.9%                      12.0%

SOURCE Korn Ferry

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