Korn/Ferry International Announces Fourth Quarter Fiscal 2011 Results of Operations

Highlights

-- Fourth quarter fiscal 2011 fee revenue increased 17% to $197.3 million, compared to $168.7 million in the same quarter last year.

-- Q4 FY'11 diluted earnings per share was $0.43, compared to diluted earnings per share of $0.19 in Q4 FY'10. Excluding certain tax adjustments, Q4 FY'11 diluted earnings per share was $0.39.

-- FY'11 fee revenue increased $171.9 million, or 30%, to $744.3 million, compared to $572.4 million last year.

-- FY'11 diluted earnings per share was $1.27, compared to diluted earnings per share of $0.12 in FY'10. Excluding restructuring charges and certain tax adjustments, FY'11 and FY'10 diluted earnings per share was $1.25 and $0.35, respectively.

-- Cash and marketable securities were $369 million at April 30, 2011 compared to $296 million at April 30, 2010.

News provided by

Korn/Ferry International

Jun 15, 2011, 07:45 ET

LOS ANGELES, June 15, 2011 /PRNewswire/ -- Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced fourth quarter fiscal 2011 diluted earnings per share of $0.43 compared to $0.19 in Q4 FY'10.  Excluding certain tax adjustments, Q4 FY'11 diluted earnings per share was $0.39.

"I am enormously proud of the Korn/Ferry organization," said Gary Burnison, Chief Executive Officer, Korn/Ferry International.  "Once again, our growth was driven by the strength of our differentiated strategy.  Thanks to the dedication of our colleagues in serving our clients, we achieved an operating margin of almost 12% for the full year.  As we enter a new fiscal year, we will continue to build a Korn/Ferry brand that is synonymous with talent management, assisting our clients in linking their business and people strategies."

Financial Results

(dollars in millions, except per share amounts)




Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Fee revenue

$           197.3


$  168.7


$        744.3


$  572.4


Total revenue

$           205.8


$  176.9


$        776.3


$  599.6


Operating income (loss)

$         26.2


$  13.6


$          85.8


$  (2.7)


Operating margin

13.3%


8.1%


11.5%


(0.5)%


Net income

$             20.4


$  8.9


$      58.9


$  5.3


Basic earnings per share

$          0.45


$  0.20


$          1.30


$  0.12


Diluted earnings per share

$          0.43


$  0.19


$          1.27


$  0.12











Adjusted Results (a):


Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Operating income

$             26.2


$  13.7


$     87.9


$  17.9


Operating margin

13.3%


8.1%


11.8%


3.1%


Net income

$             18.3


$  9.0


$          58.1


$  15.8


Basic earnings per share

$       0.40


$  0.20


$    1.28


$  0.36


Diluted earnings per share

$       0.39


$  0.19


$    1.25


$  0.35






(a)

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




Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Restructuring charges

$  —


$  0.1


$  2.1


$  20.6


Certain tax adjustments  (b)

$  (2.1)


$  —


$  (2.1)


$  (2.8)






(b)

In fiscal year 2011 and 2010, adjusted results include reversal of reserves previously taken against an uncertain tax position and in fiscal 2010, adjustments include an increased valuation allowance related to cash repatriations and foreign tax credits.



Fee revenue was $197.3 million in Q4 FY'11 compared to $168.7 million in Q4 FY'10, an increase of $28.6 million, or 17%, which reflects increases in fee revenue from all segments of the business driven primarily by a 15% increase in the overall number of engagements billed as well as a 2% increase in the weighted-average fee billed per engagement compared to the year-ago fiscal quarter. On a constant currency basis fee revenue increased $21.9 million, or 13%.

Compensation and benefits were $133.5 million in Q4 FY'11, an increase of $15.4 million, or 13%, compared to $118.1 million in Q4 FY'10.  This increase is attributable mainly to an increase in the variable component of compensation when compared to the year-ago fiscal quarter and to a lesser extent to an increase in worldwide headcount.  On a constant currency basis compensation and benefits increased $10.8 million, or 9%.

General and administrative expenses were $29.0 million in Q4 FY'11 and $28.4 million in Q4 FY'10, an increase of $0.6 million, or 2%.  The increase is due primarily to an increase in bad debt provisions as a result of higher revenues and accounts receivable, an increase in premise and office expense and other general and administrative expenses, partially offset by a decrease in unrealized foreign exchange losses and a fair value contingent consideration adjustment from a prior acquisition.  On a constant currency basis general and administrative expenses decreased $0.6 million, or 2%.

Operating income was $26.2 million in Q4 FY'11 compared to $13.6 million in Q4 FY'10 (or $13.7 million excluding restructuring charges in Q4 FY'10), an increase of $12.6 million (or $12.5 million excluding restructuring charges in Q4 FY'10).

Balance Sheet and Liquidity

Cash and marketable securities were $369.1 million at April 30, 2011 compared to $296.5 million at April 30, 2010.  Cash and marketable securities included $71.4 million and $69.0 million, held in trust for deferred compensation plans, at April 30, 2011 and 2010, respectively.  Cash and marketable securities increased by $72.6 million from April 30, 2010, mainly due to cash provided by operating activities partially offset by bonuses earned in FY'10 which were paid in FY'11.

Results by Segment


Selected Executive Recruitment Data

(dollars in millions)




Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Fee revenue

$          172.0


$  150.6


$        654.1


$  504.4


Total revenue

$          178.8


$  157.4


$        680.3


$  526.6


Operating income

$            30.7


$  23.1


$        111.4


$  38.2


Operating margin

17.9%


15.4%


17.0%


7.6%











Ending number of consultants

471


473


471


473


Average number of consultants

472


479


474


482


Engagements billed

4,096


3,673


11,501


9,164


New engagements (a)

2,131


1,925


7,905


6,505











Adjusted Results (b):

Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Operating income

$            30.7


$  23.1


$        113.6


$  61.6


Operating margin

17.9%


15.4%


17.4%


12.2%






(a)

Represents new engagements opened in the respective period.



(b)

Adjusted results are non-GAAP financial measures that exclude restructuring charges, net of recoveries, of $2.2 million and $23.4 million during the year ended April 30, 2011 and 2010, respectively (see attached reconciliations).  There were no adjustments during the three months ended April 30, 2011 and 2010.



Fee revenue was $172.0 million in Q4 FY'11, an increase of $21.4 million, or 14%, when compared to fee revenue of $150.6 million in Q4 FY'10.    Fee revenue increased in all regions due to a 12% increase in the number of executive recruitment engagements billed and a 2% increase in the weighted-average fee per engagement billed when compared to Q4 FY'10.  Fee revenue increased $16.7 million on a constant currency basis.

Operating income was $30.7 million in Q4 FY'11 compared to $23.1 million in Q4 FY'10, an increase of $7.6 million. This increase is primarily attributed to the $21.4 million increase in executive recruitment fee revenue in Q4 FY'11 as compared to Q4 FY'10, which was partially offset by an $11.3 million and $2.5 million increase in compensation and benefits expense and general and administrative expenses, respectively. The increase in compensation and benefits expense primarily resulted from an increase in the variable component of compensation, and the increase in general and administrative expense was primarily driven by an increase in bad debt provisions and premise and office expense.

The total number of consultants at April 30, 2011 and 2010 was 471 and 473, respectively.

Selected Futurestep Data

(dollars in millions)




Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Fee revenue

$            25.3


$  18.1


$          90.2


$  68.0


Total revenue

$            27.0


$  19.5


$          96.0


$  73.0


Operating income (loss)

$            1.5


$  (1.1)


$            5.0


$  1.3


Operating margin

6.0%


(5.9)%


5.5%


1.9%











Adjusted Results (a):


Fourth Quarter


Year to Date



FY'11


FY'10


FY'11


FY'10


Operating income (loss)

$              1.5


$  (1.0)


$          4.9


$  (1.5)


Operating margin

6.0%


(5.5)%


5.4%


(2.2)%






(a)

Adjusted results are non-GAAP financial measures that exclude recoveries of restructuring charges of $0.1 million and $2.8 million during year ended April 30, 2011 and 2010, respectively.  Adjusted results for the three months ended April 30, 2010 exclude restructuring charges of $0.1 million (see attached reconciliations).  There were no adjustments during the three months ended April 30, 2011.



Fee revenue was $25.3 million in Q4 FY'11, an increase of $7.2 million, or 40%, from $18.1 million in Q4 FY'10.  The improvement in fee revenue was driven by a 26% increase in the number of engagements billed, as well as an 11% increase in the weighted-average fee billed per engagement. On a constant currency basis fee revenue increased $5.2 million, or 29%.

Operating income was $1.5 million in Q4 FY'11 compared to an operating loss of $1.1 million in Q4 FY'10.  Q4 FY'10 operating loss includes $1.2 million in severance costs and $0.1 million restructuring costs which primarily relates to facility lease costs; without such charges, operating income would have been $0.2 million.

Outlook

Assuming constant foreign exchange rates, stable economic conditions and steady financial markets, Q1 FY'12 fee revenue is likely to be in the range of $190 million to $205 million and diluted earnings per share is likely to be in the range of $0.30 to $0.36.

Earnings Conference Call Webcast

The earnings conference call will be held today at 5:00 PM (EDT) and hosted by CEO Gary Burnison, CFO Mike DiGregorio and SVP Finance Gregg Kvochak.  The conference call will be webcast and available online at www.kornferry.com, accessible through the Investor Relations section.

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

Forward-Looking Statements

Statements in this press release and our conference call that relate to future results and events ("forward-looking statements") are based on Korn/Ferry's current expectations.  These statements, which include words such as "believes", "expects" or "likely" include references to our outlook.  Readers are cautioned not to place undue reliance on such statements.  Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties that are beyond the control of Korn/Ferry.  The potential risks and uncertainties include those relating to competition, the dependence on attracting and retaining qualified and experienced consultants, 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, our ability to enhance and develop new technology, the successful integration of acquired businesses, our ability to develop new products and services,  impairment of goodwill and other intangible assets, deferred tax assets and employment liability risk.  For a detailed description of risks and uncertainties that could cause differences, please refer to Korn/Ferry's periodic filings with the Securities and Exchange Commission.  Korn/Ferry disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

This press release contains financial information calculated other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").  These non-GAAP financial measures include the following:

  • adjusted operating income (loss) and operating margin, adjusted to exclude charges (reductions) of restructuring charges, net;
  • adjusted net income, adjusted to exclude restructuring charges (reductions), net and certain tax adjustments;
  • adjusted basic and diluted earnings per share, adjusted to exclude restructuring charges (reductions) net, 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 INCOME

(in thousands, except per share amounts)













Three Months Ended


Year Ended



April 30,


April 30,



2011


2010


2011


2010



(unaudited)





Fee revenue


$ 197,298


$ 168,690


$ 744,249


$ 572,380

Reimbursed out-of-pocket engagement expenses


8,478


8,215


32,002


27,269

          Total revenue


205,776


176,905


776,251


599,649










Compensation and benefits


133,554


118,225


507,405


413,340

General and administrative expenses


28,982


28,427


116,494


115,280

Out-of-pocket engagement expenses


13,674


13,495


51,766


41,585

Depreciation and amortization


3,320


3,049


12,671


11,493

Restructuring charges, net


-


80


2,130


20,673

          Total operating expenses


179,530


163,276


690,466


602,371










Operating income (loss)


26,246


13,629


85,785


(2,722)










Interest and other income, net


3,024


2,080


3,919


7,444

          Income before provision (benefit) for income taxes









              and equity in earnings (loss) of unconsolidated subsidiaries


29,270


15,709


89,704


4,722

Income tax provision (benefit)


9,285


6,245


32,692


(485)

Equity in earnings (loss) of unconsolidated subsidiaries, net


354


(548)


1,862


91

           Net income


$   20,339


$     8,916


$   58,874


$     5,298










Earnings per common share:









     Basic


$       0.45


$       0.20


$       1.30


$       0.12

     Diluted


$       0.43


$       0.19


$       1.27


$       0.12










Weighted-average common shares outstanding:









     Basic


45,700


44,783


45,205


44,413

     Diluted


47,165


46,220


46,280


45,457



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

FINANCIAL SUMMARY BY SEGMENT

(in thousands)

(unaudited)




















Three Months Ended


Year Ended



April 30,


April 30,



2011




2010


% Change


2011




2010


% Change


















Fee Revenue:
















Executive recruitment:

















North America

$   96,939




$   85,037


14%


$ 375,971




$ 278,746


35%


EMEA (1)

42,022




36,257


16%


155,782




137,497


13%


Asia Pacific

24,661




21,695


14%


90,346




64,132


41%


South America

8,357




7,630


10%


31,959




24,026


33%

Total executive recruitment

171,979




150,619


14%


654,058




504,401


30%

Futurestep

25,319




18,071


40%


90,191




67,979


33%


Total fee revenue

197,298




168,690


17%


744,249




572,380


30%

Reimbursed out-of-pocket engagement expenses

8,478




8,215


3%


32,002




27,269


17%


Total revenue

$ 205,776




$ 176,905


16%


$ 776,251




$ 599,649


29%



































Adjusted Operating Income (Loss):
















 (Excluding Restructuring Charges)



Margin




Margin




Margin




Margin

Executive recruitment:

















North America

$   19,765


20.4%


$   12,183


14.3%


$   80,345


21.4%


$   40,993


14.7%


EMEA

5,131


12.2%


3,514


9.7%


14,197


9.1%


9,423


6.8%


Asia Pacific

4,494


18.2%


5,826


26.9%


11,611


12.9%


8,065


12.6%


South America

1,339


16.0%


1,647


21.6%


7,475


23.4%


3,173


13.2%

Total executive recruitment

30,729


17.9%


23,170


15.4%


113,628


17.4%


61,654


12.2%

Futurestep

1,515


6.0%


(1,002)


(5.5%)


4,856


5.4%


(1,485)


(2.2%)

Corporate (2)

(5,998)




(8,459)




(30,569)




(42,218)




Total adjusted operating income (loss)

$   26,246


13.3%


$   13,709


8.1%


$   87,915


11.8%


$   17,951


3.1%



































Restructuring Charges (Reductions), net:
















Executive recruitment:

















North America

$           -


0.0%


$      (332)


(0.4%)


$      (340)


(0.1%)


$   (1,611)


(0.6%)


EMEA

-


0.0%


136


0.4%


2,569


1.6%


24,934


18.1%


Asia Pacific

-


0.0%


152


0.7%


-


0.0%


239


0.4%


South America

-


0.0%


60


0.8%


-


0.0%


(113)


(0.5%)

Total executive recruitment

-


0.0%


16


0.0%


2,229


0.4%


23,449


4.6%

Futurestep

-


0.0%


64


0.4%


(99)


(0.1%)


(2,776)


(4.1%)

Corporate

-




-




-




-




Total restructuring charges (reductions), net

$           -


0.0%


$          80


0.0%


$     2,130


0.3%


$   20,673


3.6%



































Operating Income (Loss):



Margin




Margin




Margin




Margin

Executive recruitment:

















North America

$   19,765


20.4%


$   12,515


14.7%


$   80,685


21.5%


$   42,604


15.3%


EMEA

5,131


12.2%


3,378


9.3%


11,628


7.5%


(15,511)


(11.3%)


Asia Pacific

4,494


18.2%


5,674


26.2%


11,611


12.9%


7,826


12.2%


South America

1,339


16.0%


1,587


20.8%


7,475


23.4%


3,286


13.7%

Total executive recruitment

30,729


17.9%


23,154


15.4%


111,399


17.0%


38,205


7.6%

Futurestep

1,515


6.0%


(1,066)


(5.9%)


4,955


5.5%


1,291


1.9%

Corporate (2)

(5,998)




(8,459)




(30,569)




(42,218)




Total operating income (loss)

$   26,246


13.3%


$   13,629


8.1%


$   85,785


11.5%


$   (2,722)


(0.5%)



(1)

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

(2)

Lower net expenses primarily related to the change in amounts due under deferred compensation plans determined by an increase (or decrease) in market values, and adjustment to the fair value of contingent consideration for a prior acquisition, totaling $2.8 million and $7.7 million during the three and twelve months ended April 30, 2011 compared to the three and twelve months ended April 30, 2010, respectively.  



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)




As of April 30,



2011


2010

ASSETS





Cash and cash equivalents


$ 246,856


$ 219,233

Marketable securities


20,868


4,114

Receivables due from clients, net of allowance for doubtful accounts





of $9,977 and $5,983, respectively


128,859


107,215

Income taxes and other receivables


5,138


6,292

Deferred income taxes


10,214


20,844

Prepaid expenses and other assets


29,662


23,166

Total current assets


441,597


380,864






Marketable securities, non-current


101,363


73,105

Property and equipment, net


43,142


24,963

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


70,987


69,069

Deferred income taxes


64,418


59,742

Goodwill


183,952


172,273

Intangible assets, net


22,289


25,425

Investments and other assets


43,932


21,657

Total assets


$ 971,680


$ 827,098






LIABILITIES AND STOCKHOLDERS' EQUITY





Accounts payable


$   12,504


$   11,148

Income taxes payable


4,674


6,323

Compensation and benefits payable


173,097


131,550

Other accrued liabilities


43,591


49,062

Total current liabilities


233,866


198,083






Deferred compensation and other retirement plans


139,558


123,794

Other liabilities


19,919


13,879

Total liabilities


393,343


335,756






Stockholders' equity





Common stock: $0.01 par value, 150,000 shares authorized, 59,101 and





57,614 shares issued and 47,003 and 45,979 shares outstanding, respectively


404,703


388,717

Retained earnings


148,494


90,220

Accumulated other comprehensive income, net


25,660


12,934

Stockholders' equity


578,857


491,871

Less:  notes receivable from stockholders


(520)


(529)

Total stockholders' equity


578,337


491,342

Total liabilities and stockholders' equity


$ 971,680


$ 827,098



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

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

(in thousands, except per share amounts)

(unaudited)





























Three Months Ended



April 30, 2011


April 30, 2010



As Reported


Adjustments


As Adjusted


As Reported


Adjustments


As Adjusted





Fee revenue


$             197,298




$             197,298


$             168,690




$             168,690

Reimbursed out-of-pocket engagement expenses


8,478




8,478


8,215




8,215

          Total revenue


205,776




205,776


176,905




176,905














Compensation and benefits


133,554




133,554


118,225




118,225

General and administrative expenses


28,982




28,982


28,427




28,427

Out-of-pocket engagement expenses


13,674




13,674


13,495




13,495

Depreciation and amortization


3,320




3,320


3,049




3,049

Restructuring charges (reductions), net


-


-


-


80


(80)


-

          Total operating expenses


179,530


-


179,530


163,276


(80)


163,196














Operating income


26,246


-


26,246


13,629


80


13,709














Interest and other income, net


3,024




3,024


2,080




2,080

          Income before provision for income taxes













                 and equity in earnings (loss) of unconsolidated subsidiaries


29,270


-


29,270


15,709


80


15,789

Income tax provision (1) (2)


9,285


2,131


11,416


6,245


32


6,277

Equity in earnings (loss) of unconsolidated subsidiaries, net


354




354


(548)




(548)

           Net income


$               20,339


$                    (2,131)


$               18,208


$                 8,916


$                           48


$                 8,964














Earnings per common share:













     Basic


$                   0.45




$                   0.40


$                   0.20




$                   0.20

     Diluted


$                   0.43




$                   0.39


$                   0.19




$                   0.19














Weighted-average common shares outstanding:













     Basic


45,700




45,700


44,783




44,783

     Diluted


47,165




47,165


46,220




46,220
















Explanation of Non-GAAP Adjustments

(1)

Calculated using an annual effective tax rate of 39% and 40%, adjusted for the three months ended April 30, 2011 and 2010, respectively.

(2)

The quarter ended April 30, 2011 includes a $2.1 million reversal of a reserve previously taken against an uncertain tax position.



KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

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

(in thousands, except per share amounts)

(unaudited)





























Year Ended



April 30, 2011


April 30, 2010



As Reported


Adjustments


As Adjusted


As Reported


Adjustments


As Adjusted





Fee revenue


$             744,249




$             744,249


$             572,380




$             572,380

Reimbursed out-of-pocket engagement expenses


32,002




32,002


27,269




27,269

          Total revenue


776,251




776,251


599,649




599,649














Compensation and benefits


507,405




507,405


413,340




413,340

General and administrative expenses


116,494




116,494


115,280




115,280

Out-of-pocket engagement expenses


51,766




51,766


41,585




41,585

Depreciation and amortization


12,671




12,671


11,493




11,493

Restructuring charges (reductions), net


2,130


(2,130)


-


20,673


(20,673)


-

          Total operating expenses


690,466


(2,130)


688,336


602,371


(20,673)


581,698














Operating income (loss)


85,785


2,130


87,915


(2,722)


20,673


17,951














Interest and other income, net


3,919




3,919


7,444




7,444

          Income before provision (benefit) for income taxes













                 and equity in earnings of unconsolidated subsidiaries


89,704


2,130


91,834


4,722


20,673


25,395

Income tax provision (benefit) (1) (2) (3)


32,692


2,952


35,644


(485)


10,172


9,687

Equity in earnings of unconsolidated subsidiaries, net


1,862




1,862


91




91

           Net income  


$               58,874


$                       (822)


$               58,052


$                 5,298


$                    10,501


$               15,799














Earnings per common share:













     Basic


$                   1.30




$                   1.28


$                   0.12




$                   0.36

     Diluted


$                   1.27




$                   1.25


$                   0.12




$                   0.35














Weighted-average common shares outstanding:













     Basic


45,205




45,205


44,413




44,413

     Diluted


46,280




46,280


45,457




45,457
















Explanation of Non-GAAP Adjustments


(1)

Calculated using an annual effective tax rate of 39% and 38%, adjusted for the year ended April 30, 2011 and 2010, respectively.

(2)

The year ended April 30, 2011 includes a $2.1 million reversal which is the net of a reserve previously taken against an uncertain tax position and the tax effect of restructuring charges.

(3)

The year ended April 30, 2010 includes a $10.3 million reversal of a reserve which is the net of previously taken against an uncertain tax position, tax effect of restructuring charges and an increased valuation allowance related to cash repatriations and foreign tax credits.



SOURCE Korn/Ferry International