Korn Ferry (KFY) 8-K Results of Operations and Financial Condition

Exhibit 99.1

For Immediate Release

Contacts:
Investor Relations: Stephen Giusto, (310) 843-4144
Gregg Kvochak, (310) 556-8550
For Media: Stephanie Mitchell, (650) 508-7465

Korn/Ferry International Announces Fiscal 2008 Results:
The Highest Revenue and Earnings in the Company’s Thirty-Eight Year History

Highlights

• Fourth quarter fiscal 2008 fee revenue was a record $208.2 million, an increase of $28.5 million, or 16%, from $179.7 million in the same quarter last year.

• Fourth quarter fiscal 2008 diluted earnings per share was $0.36 compared to $0.30 in Q4’07. Adjusted diluted earnings per share in Q4’07, which excludes the impact of previously announced one-time charges in Q4’07, was $0.36.

Los Angeles, CA, June 11, 2008- Korn/Ferry International (NYSE:KFY), a premier global provider of talent management solutions, announced fourth quarter fiscal 2008 diluted earnings per share of $0.36 compared to $0.30 in Q4’07. Excluding the impact of previously announced one-time charges in Q4’07, diluted earnings per share was $0.36.

“Fiscal 2008 produced the most revenue and earnings in Korn/Ferry’s 38 year history,” said Gary D. Burnison, Chief Executive Officer, Korn/Ferry. “Given the economically challenging environment which began with the credit crisis in the United States last summer, we are proud of our results. It is clear that we are making great progress in building a diversified talent management solutions organization. Moving forward, we will continue to manage the business in balance with the macroeconomic environment and with a focused eye toward long-term transformation of the industry and our firm.”

Financial Results

(dollars in millions, except per share amounts)

	Fourth Quarter						Year Ended
	Q4’08			Q4’07			2008			2007
Fee Revenue	$	208.2		$	179.7		$	790.6		$	653.4
Revenue	$	220.5		$	189.8		$	835.6		$	689.2
Operating Income	$	20.2		$	19.4		$	91.9		$	82.3
Operating Margin		9.7	%		10.8	%		11.6	%		12.6	%
Net Income	$	15.7		$	13.5		$	66.2		$	55.5
Diluted Earnings Per Share	$	0.36		$	0.30		$	1.46		$	1.24
Reconciliation of GAAP Net Income to Adjusted Results*
Net Income, GAAP	$	15.7		$	13.5		$	66.2		$	55.5
Reconciling Income Items, Net of Taxes:
Employment Contract Changes		—		$	3.3			—		$	3.3
Reversal of Lease Reserve		—			($0.4	)		—			($0.4	)
Adjusted Results:
Net Income	$	15.7		$	16.4		$	66.2		$	58.4
Operating Margin		9.7	%		13.3	%		11.6	%		13.3	%
Diluted Earnings Per Share	$	0.36		$	0.36		$	1.46		$	1.30

* Adjusted Q4’07 results, net of taxes, exclude the effect of a $3.3 million charge for employment contract changes and a $0.4 million reversal of a previously established lease restructuring reserve. This is a non-GAAP measure the Company’s management believes provide useful information regarding the ongoing results of operations because they have been prepared on a basis comparable to that used in prior periods. These measures are not intended to replace Net Income, EPS or Operating Margin measured in accordance with U.S. Generally Accepted Accounting Principles (see attached reconciliation).

Fee revenue of $208.2 million in Q4’08 increased $28.5 million, or 16%, from $179.7 million in Q4’07. Fee revenue improved globally due to an increase in revenue from all segments of the business resulting from an increase in the number of search engagements opened as well as a 7% increase in the average fee billed per executive search engagement compared to the prior year. Exchange rates impacted fee revenue in Q4’08 favorably by $11.3 million compared to Q4’07 and excluding this favorable impact revenues increased 10% over the prior year’s fourth quarter.

Compensation and benefits, excluding the $6.8 million unfavorable impact of exchanges rates, were $141.3 million in Q4‘08, an increase of $17.7 million, or 14%, compared to $123.6 million in Q4’07 which excludes a $5.2 million charge for executive employment contract changes. The increase is primarily attributable to productivity based compensation and, to a lesser extent, higher headcount in all segments of the Company. Actual compensation and benefits

for Q4’08 was $148.1 million compared to $128.8 million in Q4’07, an increase of 15%.

General and administrative expenses, excluding the $2.4 million unfavorable impact of exchange rates, were $31.0 million in Q4’08 and increased by $5.1 million, or 20%, from $25.9 million in Q4’07. The increase is primarily attributable to costs associated with business growth such as rent and utilities, higher bad debt provisions in line with increased accounts receivable balances, advertising and promotion costs to elevate our market-leading brand. Actual general and administrative expenses were $33.4 million in Q4’08 compared to $25.9 million in Q4’07 resulting in a 29% increase.

Operating income was $20.2 million in Q4’08 compared to $19.4 million in Q4’07 resulting in an increase of $0.8 million or 4% over Q4’07. The Company’s results in the quarter include a modest amount of severence and related costs aimed at maintaining our record consultant productivity in the face of an uncertain macroeconomic environment.

Balance Sheet and Liquidity

Cash, cash equivalents and marketable securities were $389.3 million at April 30, 2008 compared to $324.3 million at April 30, 2007. The increase was due primarily to improved operating cash flows.

Through April 30, 2008, the Company has used $6.5 million of the $50 million of share repurchase funds authorized in November 2007 to buy back approximately 0.4 million shares. Under this program, shares may be repurchased from time to time in open market transactions or privately negotiated transactions at the Company’s discretion, subject to market conditions and other factors.

Interest expense was $1.1 million in Q4’08 compared to $2.5 million in the same period last year. Interest expense in both years related primarily to borrowings under Korn/Ferry’s convertible securities and COLI policies. The decrease in interest expense is primarily due to the conversion of the Company’s convertible preferred stock and subordinates notes to common shares during Q4’07. At April 30, 2008, Korn/Ferry had no outstanding borrowings under its credit facility.

Results by Segment

Selected Executive Recruitment Data
(dollars in millions)

	Fourth Quarter						Year Ended
	Q4’08			Q4’07			2008			2007
Fee Revenue	$	177.5		$	157.1		$	679.4		$	567.6
Revenue	$	185.7		$	164.2		$	708.8		$	594.9
Operating Income	$	27.3		$	31.3		$	122.0		$	111.9
Operating Margin		15.4	%		19.9	%		18.0	%		19.7	%
Average number of consultants		516			488			515			474
Engagements (a)		1,794			1,797			7,276			6,894

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

Fee revenue was $177.5 million in Q4’08, an increase of $20.4 million, or 13%, from $157.1 million in Q4’07. Fee revenue improved in all regions due to an increase in the overall number of engagements billed and average fee per engagement. Exchange rates impacted fee revenue in Q4’08 favorably by $8.6 million compared to Q4’07.

Operating income was $27.3 million in Q4’08 compared to $31.3 million in Q4’07 resulting in a decrease of $4.0 million or 13% from the prior year.

The total number of consultants at April 30, 2008 was 514, an increase of 24 from April 30, 2007.

Selected Futurestep Data
(dollars in millions)

	Fourth Quarter						Year Ended
	Q4’08			Q4’07			2008			2007
Fee Revenue	$	30.7		$	22.6		$	111.2		$	85.8
Revenue	$	34.7		$	25.5		$	126.9		$	94.3
Operating Income	$	2.9		$	2.7		$	8.5		$	7.9
Operating Margin		9.5	%		11.9	%		7.7	%		9.2	%

Fee revenue was $30.7 million in Q4’08, an increase of $8.1 million, or 36%, from $22.6 million in Q4’07. Improvements in fee revenue were driven by an increase in the average fee for engagements. Exchange rates impacted fee revenue in Q4’08 favorably by $2.6 million compared to Q4’07.

Operating income was $2.9 million in Q4’08 compared to $2.7 million in Q4’07.

Outlook

Assuming constant foreign exchange rates, Korn/Ferry estimates that first quarter fiscal 2009 fee revenue is likely to be in the range of $190 million to $200 million and diluted earnings per share is likely to be in the range of $0.28 to $0.32.

Earnings Conference Call Webcast

The earnings conference call will be held today at 9:00 AM (EDT) and hosted by Gary Burnison, Chief Executive Officer, and Stephen Giusto, Chief Financial Officer. The conference call will be webcast and available online at www.kornferry.com, accessible through the Investor Relations section.

Korn/Ferry International (NYSE:KFY), with more than 80 offices in 39 countries, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to identify, deploy, develop, retain and reward their talent. For more information on the Korn/Ferry International family of companies, visit www.kornferry.com.

Statements in this press release and our conference call that relate to future results and events (“forward-looking statements”) are based on Korn/Ferry’s current expectations. Readers are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties which are beyond the control of Korn/Ferry. The potential risks and uncertainties relate to competition, the dependence on attracting and retaining qualified and experienced consultants, the portability of client relationships, local political or economic developments in or affecting countries where we have operations, including fluctuations in exchange rates, risks related to the growth and results of Futurestep, restrictions imposed by off-limits agreements, reliance on information systems and employment liability risk. For a detailed description of risks and uncertainties that could cause differences, please refer to Korn/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.

[Tables attached]

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

	Three Months Ended				Year Ended
	April 30,				April 30,
	2008		2007		2008		2007
	(unaudited)		(unaudited)
Fee revenue	$	208,204	$	179,702	$	790,570	$	653,422
Reimbursed out-of-pocket engagement expenses		12,246		10,058		45,072		35,779
Total revenue		220,450		189,760		835,642		689,201
Compensation and benefits		148,072		128,840		540,056		447,692
General and administrative expense		33,374		25,881		134,542		105,312
Out-of-pocket engagement expenses		16,086		13,622		58,750		44,662
Depreciation and amortization		2,740		2,066		10,441		9,280
Total operating expense		200,272		170,409		743,789		606,946
Operating income		20,178		19,351		91,853		82,255
Interest and other income, net		1,063		533		7,137		244
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		21,241		19,884		98,990		82,499
Provision for income taxes		6,328		6,980		36,081		30,164
Equity in earnings of unconsolidated subsidiaries, net		833		635		3,302		3,163
Net income	$	15,746	$	13,539	$	66,211	$	55,498
Interest expense on convertible securities, net of taxes		36		509		145		2,863
Net income adjusted for computation of diluted EPS	$	15,782	$	14,048	$	66,356	$	58,361
Basic earnings per common share	$	0.36	$	0.33	$	1.50	$	1.40
Basic weighted average common shares outstanding		43,230		41,408		44,012		39,774
Diluted earnings per common share	$	0.36	$	0.30	$	1.46	$	1.24
Diluted weighted average common shares outstanding		44,333		47,252		45,528		46,938

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

	Three Months Ended												Year Ended
	April 30,												April 30,
	2008						2007						2008						2007
Fee Revenue:
Executive recruitment:
North America	$	97,903					$	91,398					$	374,891					$	329,065
EMEA		49,970						41,277						183,042						146,155
Asia Pacific		23,276						19,818						95,915						74,987
South America		6,372						4,649						25,556						17,426
Total executive recruitment		177,521						157,142						679,404						567,633
Futurestep		30,683						22,560						111,166						85,789
Total fee revenue		208,204						179,702						790,570						653,422
Reimbursed out-of-pocket engagement expenses		12,246						10,058						45,072						35,779
Total revenue	$	220,450					$	189,760					$	835,642					$	689,201
				Margin						Margin						Margin						Margin
Operating Income (Loss):
Executive recruitment:
North America	$	13,282			13.6	%	$	18,529			20.3	%	$	70,628			18.8	%	$	69,815			21.2	%
EMEA		8,949			17.9	%		6,775			16.4	%		29,820			16.3	%		24,166			16.5	%
Asia Pacific		4,704			20.2	%		5,401			27.3	%		19,299			20.1	%		16,010			21.4	%
South America		394			6.2	%		565			12.2	%		2,230			8.7	%		1,894			10.9	%
Total executive recruitment		27,329			15.4	%		31,270			19.9	%		121,977			18.0	%		111,885			19.7	%
Futurestep		2,903			9.5	%		2,713			12.0	%		8,545			7.7	%		7,854			9.2	%
Corporate		(10,054	)					(14,632	)					(38,669	)					(37,484	)
Total operating income	$	20,178			9.7	%	$	19,351			10.8	%	$	91,853			11.6	%	$	82,255			12.6	%

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

	As of April 30,
	2008			2007
ASSETS
Cash and cash equivalents	$	318,918		$	232,531
Marketable securities		49,869			91,736
Receivables due from clients, net of allowance for doubtful accounts of $11,504 and $9,822, respectively		119,952			107,751
Income taxes and other receivables		7,071			6,357
Deferred income taxes		10,401			9,524
Prepaid expenses		20,057			16,861
Total current assets		526,268			464,760
Marketable securities, non-current		20,475			—
Property and equipment, net		32,462			25,999
Cash surrender value of company owned life insurance policies, net of loans		81,377			76,478
Deferred income taxes		43,587			42,013
Goodwill		142,699			124,268
Intangible assets, net		15,519			18,040
Deferred financing costs and other assets		14,286			9,933
Total assets	$	876,673		$	761,491
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	15,309		$	10,383
Income taxes payable		17,407			22,432
Compensation and benefits payable		199,081			158,145
Other accrued liabilities		37,120			38,529
Total current liabilities		268,917			229,489
Deferred compensation and other retirement plans		105,719			91,360
Other liabilities		5,903			7,687
Total liabilities		380,539			328,536
Shareholders’ equity
Common stock: $0.01 par value, 150,000 shares authorized, 54,786 and 53,323 shares issued and 46,412 and 47,174 shares outstanding, respectively		389,844			400,126
Retained earnings		95,014			32,344
Unearned restricted stock compensation		(31,276	)		(19,567	)
Accumulated other comprehensive income		43,097			20,605
Shareholders’ equity		496,679			433,508
Less: Notes receivable from shareholders		(545	)		(553	)
Total shareholders’ equity		496,134			432,955
Total liabilities and shareholders’ equity	$	876,673		$	761,491

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
EXCLUDING NON-GAAP ADJUSTMENTS
(in thousands, except per share amounts)
(unaudited)

	Three Months Ended
	April 30,
	2008 - As				2008 - As		2007 - As					2007 - As
	Reported		Adjustments		Adjusted		Reported		Adjustments			Adjusted
Fee revenue	$	208,204			$	208,204	$	179,702				$	179,702
Reimbursed out-of-pocket engagement expenses		12,246				12,246		10,058					10,058
Total revenue		220,450				220,450		189,760					189,760
Compensation and benefits (1)		148,072		—		148,072		128,840		(5,187	)		123,653
General and administrative expense (2)		33,374		—		33,374		25,881		606			26,487
Out-of-pocket engagement expenses		16,086				16,086		13,622					13,622
Depreciation and amortization		2,740				2,740		2,066					2,066
Total operating expense		200,272				200,272		170,409		(4,581	)		165,828
Operating income		20,178				20,178		19,351					23,932
Interest and other income, net		1,063				1,063		533					533
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		21,241				21,241		19,884					24,465
Provision for income taxes (3)		6,328		—		6,328		6,980		1,672			8,652
Equity in earnings of unconsolidated subsidiaries, net		833				833		635					635
Net income	$	15,746			$	15,746	$	13,539				$	16,448
Interest expense on convertible securities, net of taxes		36				36		509					509
Net income adjusted for computation of diluted EPS	$	15,782			$	15,782	$	14,048				$	16,957
Basic earnings per common share	$	0.36			$	0.36	$	0.33				$	0.40
Basic weighted average common shares outstanding		43,230				43,230		41,408					41,408
Diluted earnings per common share	$	0.36			$	0.36	$	0.30				$	0.36
Diluted weighted average common shares outstanding		44,333				44,333		47,252					47,252

Explanation of Non-GAAP Adjustments
For the Three Months Ended April 30, 2008:
   No adjustments
For the Three Months Ended April 30, 2007:

(1)	$5,187 executive compensation contract termination charge
(2)	Credit adjustment to previously recorded lease restructuring reserve
(3)	Tax effect related to net operating expense adjustments of $4,581

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
EXCLUDING NON-GAAP ADJUSTMENTS
(in thousands, except per share amounts)
(unaudited)

	Year Ended
	April 30,
	2008 - As				2008 - As		2007 - As					2007 - As
	Reported		Adjustments		Adjusted		Reported		Adjustments			Adjusted
Fee revenue	$	790,570			$	790,570	$	653,422				$	653,422
Reimbursed out-of-pocket engagement expenses		45,072				45,072		35,779					35,779
Total revenue		835,642				835,642		689,201					689,201
Compensation and benefits (1)		540,056		—		540,056		447,692		(5,187	)		442,505
General and administrative expense (2)		134,542		—		134,542		105,312		606			105,918
Out-of-pocket engagement expenses		58,750				58,750		44,662					44,662
Depreciation and amortization		10,441				10,441		9,280					9,280
Total operating expense		743,789				743,789		606,946		(4,581	)		602,365
Operating income		91,853				91,853		82,255					86,836
Interest and other income, net		7,137				7,137		244					244
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		98,990				98,990		82,499					87,080
Provision for income taxes (3)		36,081		—		36,081		30,164		1,672			31,836
Equity in earnings of unconsolidated subsidiaries, net		3,302				3,302		3,163					3,163
Net income	$	66,211			$	66,211	$	55,498				$	58,407
Interest expense on convertible securities, net of taxes		145				145		2,863					2,863
Net income adjusted for computation of diluted EPS	$	66,356			$	66,356	$	58,361				$	61,270
Basic earnings per common share	$	1.50			$	1.50	$	1.40				$	1.47
Basic weighted average common shares outstanding		44,012				44,012		39,774					39,774
Diluted earnings per common share	$	1.46			$	1.46	$	1.24				$	1.30
Diluted weighted average common shares outstanding		45,528				45,528		46,938					46,938

Explanation of Non-GAAP Adjustments
For the Year Ended April 30, 2008:
   No adjustments
For the Year Ended April 30, 2007:

(1)	$5,187 executive compensation contract termination charge recorded in Q4’07
(2)	Credit adjustment to previously recorded lease restructuring reserve recorded in Q4’07
(3)	Tax effect related to net operating expense adjustments of $4,581