Korn/Ferry International Announces Fourth Quarter Fiscal 2010 Results of Operations

Highlights

- Fourth quarter fiscal 2010 fee revenue increased 58% to $168.7 million, compared to $107.0 million in the same quarter last year.

- Q4 FY'10 diluted earnings per share was $0.19, compared to diluted loss per share of $0.40 in Q4 FY'09. Excluding restructuring charges, Q4 FY'10 diluted earnings per share was $0.19 compared to diluted loss per share of $0.06 in Q4 FY'09.

- Cash and marketable securities were $296.5 million at April 30, 2010.

News provided by

Korn/Ferry International

Jun 14, 2010, 04:30 ET

LOS ANGELES, June 14 /PRNewswire-FirstCall/ -- Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced Q4 FY'10 diluted earnings per share of $0.19 compared to diluted loss per share of $0.40 in Q4 FY'09.  Excluding net restructuring charges of $0.1 million and $25.1 million, respectively, diluted earnings per share was $0.19 in Q4 FY'10, compared to diluted loss per share of $0.06 in Q4 FY'09.

"Over the past year we remained focused on preserving our brand, positioning our company for long-term growth and remaining close to clients," said Gary Burnison, Chief Executive Officer of Korn/Ferry International. "With growth of 58% year over year and 15% sequentially we are leading our industry.  We believe the combination of our multi-services, geographic reach and pristine brand have positioned us to become the leading diversified talent solutions company in the world. It is clear that our differentiation strategy is working and I am enormously proud of the collective effort and accomplishments of our worldwide colleagues during fiscal 2010."

Financial Results

(dollars in millions, except per share amounts)



Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Fee revenue

$  168.7


$  107.0


$  572.4


$  638.2


Total revenue

$  176.9


$  114.4


$  599.6


$  676.1


Operating income (loss)

$  13.6


$  (30.3)


$  (2.7)


$  3.7


Operating margin

8.1

%

(28.3)

%

(0.5)

%

0.6

%

Net income (loss)

$  8.9


$  (17.2)


$  5.3


$  (10.1)


Basic earnings (loss) per share

$  0.20


$  (0.40)


$  0.12


$  (0.23)


Diluted earnings (loss) per share

$  0.19


$  (0.40)


$  0.12


$  (0.23)






Adjusted Results (a):

Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Operating income (loss)

$  13.7


$  (5.2)


$  17.9


$  45.6


Operating margin

8.1

%

(4.9)

%

3.1

%

7.2

%

Net income (loss)

$  9.0


$  (2.5)


$  15.8


$  15.0


Basic earnings (loss) per share

$  0.20


$  (0.06)


$  0.36


$  0.35


Diluted earnings (loss) per share

$  0.19


$  (0.06)


$  0.35


$  0.34



(a) Adjusted results are non-GAAP financial measures that exclude the following:





Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Restructuring charges, net

$  0.1


$  25.1


$  20.6


$  41.9


Certain tax adjustments (b)

$  —


$  —


$  (2.8)


$  —



(b) Includes reversal of a reserve previously taken against an uncertain tax position and an increased valuation allowance related to cash repatriations and foreign tax credits.





Fee revenue was $168.7 million in Q4 FY'10 compared to $107.0 million in Q4 FY'09, an increase of 58% (or an increase of 50%, or $53.7 million, on a constant currency basis), which reflects improving economic conditions in North America and abroad and stronger demand for permanent recruitment.  Q4 FY'10 includes fee revenue from the acquisition of Whitehead Mann, which closed on June 11, 2009.  Fee revenue improved globally due to an increase in revenue from all segments of the business resulting from a 45% increase in the number of executive recruitment engagements billed as well as a 13% increase in the weighted-average fee billed per executive recruitment engagement compared to the prior year (an increase of 8% excluding the impact of exchange rates).    Furthermore, the Company experienced a 15% increase in fee revenue compared to Q3 FY'10 as a result of the improving economic conditions.

Compensation and benefits were $118.1 million in Q4 FY'10, an increase of $41.3 million, or 54%, compared to $76.8 million in Q4 FY'09.  This increase is attributable mainly to an increase in the variable component of compensation when compared to the prior year, which was lower than normal in Q4 FY'09 due to the challenging economic conditions.  Changes in exchange rates impacted compensation and benefits in Q4 FY'10 unfavorably by $4.8 million compared to Q4 FY'09.

General and administrative expenses were $28.4 million in Q4 FY'10, a decrease of $1.2 million, or 4% from $29.6 million in Q4 FY'09.  This decrease is attributable to a $2.1 million decrease in the provision for bad debts, partially offset by an increase in business development and marketing costs and unrealized foreign exchange losses.  The decrease in the provision for bad debts is due to a higher than normal provision in the prior year, as a result of the challenging macroeconomic conditions experienced in Q4 FY'09.  Changes in exchange rates impacted general and administrative expenses in Q4 FY'10 unfavorably by $1.5 million compared to Q4 FY'09.

Operating income was $13.6 million in Q4 FY'10 compared to operating loss of $30.3 million in Q4 FY'09, an increase of $43.9 million.  Excluding restructuring charges of $0.1 million in Q4 FY'10 and $25.1 million in Q4 FY'09, operating income was $13.7 million in Q4 FY'10 and the operating loss was $5.2 million in Q4 FY'09, an increase of $18.9 million as compared to Q4 FY'09.

Balance Sheet and Liquidity

Cash and marketable securities were $296.5 million at April 30, 2010 compared to $330.3 million at April 30, 2009.  Cash and marketable securities include $69.0 million and $60.8 million, held in trust for deferred compensation plans, at April 30, 2010 and 2009, respectively.  Cash and marketable securities decreased by $33.8 million from Q4 FY'09 mainly due to payments on previously disclosed acquisitions in the current fiscal year.  

Results by Segment


Selected Executive Recruitment Data

(dollars in millions)



Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Fee revenue

$  150.6


$  91.9


$  504.4


$  543.3


Total revenue

$  157.4


$  98.3


$  526.6


$  572.3


Operating income (loss)

$  23.1


$  (16.1)


$  38.2


$  47.4


Operating margin

15.4

%

(17.5)

%

7.6

%

8.7

%

Ending number of consultants

473


460


473


460


Average number of consultants

479


479


482


509


Engagements billed

3,673


2,536


9,164


9,227











New engagements (a)

1,925


1,139


6,505


5,945











Adjusted Results (b):

Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Operating income

$  23.1


$  3.3


$  61.6


$  77.9


Operating margin

15.4

%

3.6

%

12.2

%

14.3

%


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


(b) Adjusted results are non-GAAP financial measures that exclude restructuring charges (net of reductions) of $23.4 million during the year ended April 30, 2010 (see attached reconciliations).  Comparative results exclude restructuring charges of $19.4 million and $30.5 million during the three months and year ended April 30, 2009, respectively.



Fee revenue was $150.6 million in Q4 FY'10, an increase of $58.7 million, or 64%, when compared to fee revenue of $91.9 million in Q4 FY'09.  On a constant currency basis, fee revenue increased by $52.4 million or 57%, when compared to the same quarter a year ago.  Fee revenue increased in all regions due to a 45% increase in the overall number of engagements billed and an increase in the average fee per engagement billed of 13% when compared to Q4 FY'09 (an increase of 8% excluding the impact of exchange rates).  

Operating income was $23.1 million in Q4 FY'10 compared to operating loss of $16.1 million in Q4 FY'09.  Excluding restructuring charges of $19.4 million incurred in Q4 FY'09, operating income was $3.3 million in Q4 FY'09 compared to $23.1 million in Q4 FY'10.

The total number of consultants at April 30, 2010 was 473, an increase of 13 from April 30, 2009.

Selected Futurestep Data

(dollars in millions)



Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Fee revenue

$  18.1


$  15.1


$  68.0


$  94.9


Total revenue

$  19.5


$  16.1


$  73.0


$  103.8


Operating (loss) income

$  (1.1)


$  (7.8)


$  1.3


$  (12.0)


Operating margin

(5.9)

%

(51.7)

%

1.9

%

(12.7)

%










Adjusted Results (a):

Fourth Quarter


Year to Date



FY'10


FY'09


FY'10


FY'09


Operating loss

$  (1.0)


$  (2.1)


$  (1.5)


$  (0.6)


Operating margin

(5.5)

%

(14.2)

%

(2.2)

%

(0.6)

%


(a) Adjusted results are non-GAAP financial measures that exclude restructuring charges of $0.1 million and restructuring reductions of $2.8 million during the three months and year ended April 30, 2010, respectively (see attached reconciliations).  Comparative results exclude restructuring charges of $5.6 million and $11.4 million during the three months and year ended April 30, 2009, respectively.




Fee revenue was $18.1 million in Q4 FY'10, an increase of $3.0 million, or 20%, from $15.1 million in Q4 FY'09.  On a constant currency basis, fee revenue increased by $1.3 million in Q4 FY'10, compared to the same quarter a year ago.  Increases in fee revenue were driven by a 21% increase in the average fee per engagement billed, partially offset by a decrease in the number of engagements billed.

Q4 FY'10 and Q4 FY'09 operating loss includes restructuring costs of $0.1 million and $5.6 million, respectively, without such charges, operating loss would have been $1.0 million  in Q4 FY'10 compared $2.1 million in Q4 FY'09.  Operating loss was $1.1 million in Q4 FY'10 compared to an operating loss of $7.8 million in Q4 FY'09. Q4 FY'10 operating loss includes $1.2 million in severance costs, excluding severance and restructuring costs, operating income would have been $0.2 million.

Outlook

Assuming constant foreign exchange rates, Q1 FY'11 fee revenue is likely to be in the range of $155 million to $175 million and diluted earnings per share is likely to be in the range of $0.15 to $0.25.  

Earnings Conference Call Webcast

The earnings conference call will be held tomorrow at 9:00 AM (EDT) and hosted by Gary Burnison, Chief Executive Officer, Mike DiGregorio, Chief Financial Officer and Gregg Kvochak, Vice President of Finance.  The conference call will be webcast and available online at www.kornferry.com, accessible through the Investor Relations section.

Korn/Ferry International (NYSE: KFY), with a presence throughout the Americas, Asia Pacific, Europe, the Middle East and Africa, is a premier global provider of talent management solutions celebrating 40 years in business. Based in Los Angeles, the firm delivers an array of solutions that help clients to attract, develop, retain and sustain their talent. Visit www.kornferry.com for more information on the Korn/Ferry International family of companies, and www.kornferryinstitute.com for thought leadership, intellectual property and research.

Forward-Looking Statements

Statements in this press release and our conference call that relate to future results and events ("forward-looking statements") are based on Korn/Ferry's current expectations.  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 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, global economic developments, restrictions imposed by off-limits agreements, reliance on information systems, the successful integration of acquired businesses 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").  These non-GAAP financial measures include:

  • adjusted operating income (loss) and operating margin, adjusted to exclude restructuring charges (reductions), net,
  • adjusted net income (loss), basic and diluted earnings (loss) per share, adjusted to exclude restructuring charges (reductions) and certain tax adjustments and;
  • constant currency amounts that represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period.

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 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 it is 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.

[Tables attached]



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)






















Three Months Ended


Year Ended



April 30,


April 30,



2010


2009


2010


2009



(unaudited)





Fee revenue


$           168,690


$           106,980


$           572,380


$           638,223

Reimbursed out-of-pocket engagement expenses


8,215


7,446


27,269


37,905

          Total revenue


176,905


114,426


599,649


676,128










Compensation and benefits


118,225


76,783


413,340


442,632

General and administrative expenses


28,427


29,566


115,280


126,882

Out-of-pocket engagement expenses


13,495


10,317


41,585


49,388

Depreciation and amortization


3,049


2,946


11,493


11,583

Restructuring charges, net


80


25,070


20,673


41,915

          Total operating expenses


163,276


144,682


602,371


672,400










Operating income (loss)


13,629


(30,256)


(2,722)


3,728










Interest and other income (loss), net


2,080


1,064


7,444


(15,801)

          Income (loss) before provision (benefit) for income taxes









                 and equity in earnings of unconsolidated subsidiaries


15,709


(29,192)


4,722


(12,073)

Income tax provision (benefit)


6,245


(11,943)


(485)


384

Equity in (loss) earnings of unconsolidated subsidiaries, net


(548)


49


91


2,365

           Net income (loss)


$               8,916


$           (17,200)


$               5,298


$           (10,092)










Earnings (loss) per common share:









     Basic


$                 0.20


$               (0.40)


$                 0.12


$               (0.23)

     Diluted


$                 0.19


$               (0.40)


$                 0.12


$               (0.23)










Weighted-average common shares outstanding:









     Basic


44,783


43,475


44,413


43,522

     Diluted


46,220


43,475


45,457


43,522



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

FINANCIAL SUMMARY BY SEGMENT

(in thousands)

(unaudited)




















Three Months Ended



Year Ended




April 30,



April 30,




2010




2009




2010




2009




















Fee Revenue:
















Executive recruitment:

















North America

$                85,037




$               56,865




$             278,746




$             309,514




EMEA (1)

36,257




20,685




137,497




143,184




Asia Pacific

21,695




10,151




64,132




66,332




South America

7,630




4,260




24,026




24,323



Total executive recruitment

150,619




91,961




504,401




543,353



Futurestep

18,071




15,019




67,979




94,870




Total fee revenue

168,690




106,980




572,380




638,223



Reimbursed out-of-pocket engagement expenses

8,215




7,446




27,269




37,905




Total revenue

$              176,905




$             114,426




$             599,649




$             676,128





































Adjusted Operating Income (Loss):
















 (Excluding Restructuring Charges)



Margin




Margin




Margin




Margin

Executive recruitment:

















North America

$                12,183


14.3%


$                 1,362


2.4%


$               40,993


14.7%


$               49,520


16.0%


EMEA

3,514


9.7%


1,712


8.3%


9,423


6.8%


16,423


11.5%


Asia Pacific

5,826


26.9%


(421)


(4.1%)


8,065


12.6%


7,636


11.5%


South America

1,647


21.6%


683


16.0%


3,173


13.2%


4,305


17.7%

Total executive recruitment

23,170


15.4%


3,336


3.6%


61,654


12.2%


77,884


14.3%

Futurestep

(1,002)


(5.5%)


(2,129)


(14.2%)


(1,485)


(2.2%)


(582)


(0.6%)

Corporate

(8,459)




(6,393)




(42,218)




(31,659)




Total adjusted operating income (loss)

$                13,709


8.1%


$               (5,186)


(4.9%)


$               17,951


3.1%


$               45,643


7.2%



































Restructuring Charges (Reductions), net:
















Executive recruitment:

















North America

$                   (332)


(0.4%)


$                 9,447


16.6%


$               (1,611)


(0.6%)


$               12,004


3.9%


EMEA

136


0.4%


7,756


37.5%


24,934


18.1%


14,362


10.1%


Asia Pacific

152


0.7%


1,293


12.8%


239


0.4%


2,240


3.4%


South America

60


0.8%


909


21.3%


(113)


(0.5%)


1,864


7.7%

Total executive recruitment

16


0.0%


19,405


21.1%


23,449


4.6%


30,470


5.6%

Futurestep

64


0.4%


5,641


37.5%


(2,776)


(4.1%)


11,421


12.1%

Corporate

-




24




-




24




Total restructuring charges (reductions), net

$                       80


0.0%


$               25,070


23.4%


$               20,673


3.6%


$               41,915


6.6%



































Operating Income (Loss):



Margin




Margin




Margin




Margin

Executive recruitment:

















North America

$                12,515


14.7%


$               (8,085)


(14.2%)


$               42,604


15.3%


$               37,516


12.1%


EMEA

3,378


9.3%


(6,044)


(29.2%)


(15,511)


(11.3%)


2,061


1.4%


Asia Pacific

5,674


26.2%


(1,714)


(16.9%)


7,826


12.2%


5,396


8.1%


South America

1,587


20.8%


(226)


(5.3%)


3,286


13.7%


2,441


10.0%

Total executive recruitment

23,154


15.4%


(16,069)


(17.5%)


38,205


7.6%


47,414


8.7%

Futurestep

(1,066)


(5.9%)


(7,770)


(51.7%)


1,291


1.9%


(12,003)


(12.7%)

Corporate

(8,459)




(6,417)




(42,218)




(31,683)




Total operating income (loss)

$                13,629


8.1%


$             (30,256)


(28.3%)


$               (2,722)


(0.5%)


$                 3,728


0.6%



































  (1)  Includes revenues from acquisition of Whitehead Mann, closed on June 11, 2009.



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)




As of April 30,



2010


2009

ASSETS





Cash and cash equivalents


$             219,233


$             255,000

Marketable securities


4,114


4,263

Receivables due from clients, net of allowance for doubtful accounts





of $5,983 and $11,197, respectively


107,215


67,308

Income taxes and other receivables


6,292


9,001

Deferred income taxes


20,844


14,583

Prepaid expenses and other assets


28,753


21,442

Total current assets


386,451


371,597






Marketable securities, non-current


73,105


70,992

Property and equipment, net


24,963


27,970

Cash surrender value of company owned life insurance policies, net of loans


69,069


63,108

Deferred income taxes


59,742


45,141

Goodwill


172,273


133,331

Intangible assets, net


25,425


16,928

Investments and other assets


16,070


11,812

Total assets


$             827,098


$             740,879






LIABILITIES AND STOCKHOLDERS' EQUITY





Accounts payable


$               11,148


$               10,282

Income taxes payable


6,323


2,059

Compensation and benefits payable


131,550


116,705

Other accrued liabilities


49,062


44,301

Total current liabilities


198,083


173,347






Deferred compensation and other retirement plans


123,794


99,238

Other liabilities


13,879


9,195

Total liabilities


335,756


281,780






Stockholders' equity





Common stock: $0.01 par value, 150,000 shares authorized, 57,614 and





56,185 shares issued and 45,979 and 44,729 shares outstanding, respectively


388,717


368,430

Retained earnings


90,220


84,922

Accumulated other comprehensive income, net


12,934


6,285

Stockholders' equity


491,871


459,637

Less:  notes receivable from stockholders


(529)


(538)

Total stockholders' equity


491,342


459,099

Total liabilities and stockholders' equity


$             827,098


$             740,879



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP)

APRIL 30, 2010

(in thousands, except per share amounts)

(unaudited)





























Three Months Ended


Year Ended



April 30, 2010


April 30, 2010



As Reported


Adjustments


As Adjusted


As Reported


Adjustments


As Adjusted




Fee revenue


$             168,690




$             168,690


$             572,380




$             572,380

Reimbursed out-of-pocket engagement expenses


8,215




8,215


27,269




27,269

          Total revenue


176,905




176,905


599,649




599,649














Compensation and benefits


118,225




118,225


413,340




413,340

General and administrative expenses


28,427




28,427


115,280




115,280

Out-of-pocket engagement expenses


13,495




13,495


41,585




41,585

Depreciation and amortization


3,049




3,049


11,493




11,493

Restructuring charges, net


80


(80)


-


20,673


(20,673)


-

          Total operating expenses


163,276


(80)


163,196


602,371


(20,673)


581,698














Operating income (loss)


13,629


80


13,709


(2,722)


20,673


17,951














Interest and other income, net


2,080




2,080


7,444




7,444

          Income before provision (benefit) for income taxes













                 and equity in earnings of unconsolidated subsidiaries


15,709


80


15,789


4,722


20,673


25,395

Income tax provision (benefit) (1) (2)


6,245


32


6,277


(485)


10,172


9,687

Equity in (loss) earnings of unconsolidated subsidiaries, net


(548)




(548)


91




91

           Net income


$                 8,916


$                     48


$                 8,964


$                 5,298


$              10,501


$               15,799














Earnings per common share:













     Basic


$                   0.20




$                   0.20


$                   0.12




$                   0.36

     Diluted


$                   0.19




$                   0.19


$                   0.12




$                   0.35














Weighted-average common shares outstanding:













     Basic


44,783




44,783


44,413




44,413

     Diluted


46,220




46,220


45,457




45,457














Explanation of Non-GAAP Adjustments

For the three months and year ended April 30, 2010:

  (1) Calculated using an annual effective tax rate of 40% and 38%, respectively, on operating expenses adjustments.

  (2) Includes reversal of a reserve previously taken against an uncertain tax position and an increased valuation allowance

        related to cash repatriations and foreign tax credits.



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP)

APRIL 30, 2009

(in thousands, except per share amounts)

(unaudited)
















Three Months Ended


Year Ended



April 30, 2009


April 30, 2009



As Reported


Adjustments


As Adjusted


As Reported


Adjustments


As Adjusted














Fee revenue


$             106,980




$             106,980


$             638,223




$             638,223

Reimbursed out-of-pocket engagement expenses


7,446




7,446


37,905




37,905

   Total revenue


114,426




114,426


676,128




676,128














Compensation and benefits


76,783




76,783


442,632




442,632

General and administrative expenses


29,566




29,566


126,882




126,882

Out-of-pocket engagement expenses


10,317




10,317


49,388




49,388

Depreciation and amortization


2,946




2,946


11,583




11,583

Restructuring charges  


25,070


(25,070)


-


41,915


(41,915)


-

   Total operating expenses


144,682


(25,070)


119,612


672,400


(41,915)


630,485














Operating (loss) income


(30,256)


25,070


(5,186)


3,728


41,915


45,643














Interest and other income (loss), net


1,064


-


1,064


(15,801)


-


(15,801)

   (Loss) income before (benefit) provision for income taxes













                 and equity in earnings of unconsolidated subsidiaries


(29,192)


25,070


(4,122)


(12,073)


41,915


29,842

Income tax (benefit) provision (1)


(11,943)


10,377


(1,566)


384


16,778


17,162

Equity in earnings of unconsolidated subsidiaries, net


49




49


2,365




2,365

    Net (loss) income


$             (17,200)


$              14,693


$               (2,507)


$             (10,092)


$           25,137


$               15,045














(Loss) earnings per common share:













     Basic


$                 (0.40)




$                 (0.06)


$                 (0.23)




$                   0.35

     Diluted


$                 (0.40)




$                 (0.06)


$                 (0.23)




$                   0.34














Weighted-average common shares outstanding:













     Basic


43,475




43,475


43,522




43,522

     Diluted


43,475




43,475


43,522




44,272














Explanation of Non-GAAP Adjustments

For the three months and year ended April 30, 2009:

  (1) Calculated using an annual effective tax rate of 38% and 58%, respectively, on operating expense adjustments.



SOURCE Korn/Ferry International