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Korn Ferry International Announces Fourth Quarter and Fiscal 2018 Results of Operations

·         Korn Ferry reports record annual fee revenue of $1,767.2           million, an increase of almost 13% year-over-year.

·         Korn Ferry reports record fee revenue of $475.4 million in Q4 FY'18 an increase of 17% as compared to Q4 FY'17.

·         Operating income was $63.3 million in Q4 FY'18 with an operating margin of 13.3%. Adjusted EBITDA was $74.6 million with an Adjusted EBITDA margin of            15.7%.

·         Q4 FY'18 diluted earnings per share was $0.73 compared to diluted earnings per share of $0.47 in Q4 FY'17.  Adjusted diluted earnings per share     was $0.80 in Q4 FY'18, compared to Adjusted diluted earnings per share in Q4 FY'17 of $0.62.

·         The Company declared a quarterly dividend of $0.10 per share on June 12, 2018payable on July 13, 2018 to stockholders of record on June 26, 2018.


Korn/Ferry International (NYSE: KFY), a global organizational consulting firm, today announced record fourth quarter and annual fee revenue of $475.4 million and $1,767.2 million, respectively.  In addition, fourth quarter diluted earnings per share and Adjusted diluted earnings per share were $0.73 and $0.80, respectively.  Adjusted diluted earnings per share for the fourth quarter excluded $4.5 million, or $0.07 per share, comprised of the impact of the United States Tax Cut and Jobs Act ("Tax Act") and retention awards related to the Hay Group acquisition.


"I am pleased to report fee revenue of $475 million and strong profitability, with diluted earnings per share and Adjusted diluted earnings per share of $0.73 and $0.80 and Adjusted EBITDA of approximately $75 million during our recently completed fourth quarter.  We achieved the highest fiscal year fee revenue in our firm's history – up 13% year over year," said Gary D. Burnison, CEO of Korn Ferry.  "We've come a long way on our journey and I'm excited about the future – to be the preeminent organizational consultancy.


 Today's Korn Ferry is all about synchronizing our clients' strategy and talent to help them drive superior performance.  We are never more powerful than when we come together as one firm – to help companies design their organization, to offer expertise on how they compensate, develop and motivate their people and to find out who candidates are.  Korn Ferry has the proven expertise to transform individuals, teams, even entire organizations.  In the fiscal year ahead, we will continue to bring talent and organizational strategies to life and unlock the potential within global workforces."


Fiscal 2018 Fourth Quarter Results

The Company reported record fee revenue in Q4 FY'18 of $475.4 million, an increase of $69.3 million or 17.1% (an increase of $51.7 million or 12.7% on a constant currency basis) compared to Q4 FY'17.  The organic growth was driven by all three lines of business:





Futurestep


31.4%


Executive Search


17.5%


Hay Group


12.1%




Fee revenue growth in the fourth quarter was partially offset by increased compensation and benefits as well as general and administrative expenses resulting in operating income and Adjusted EBITDA growing 93.0% and 24.1%, respectively, as compared to Q4 FY'17 and diluted earnings per share and Adjusted diluted earnings per share growing 55.3% and 29.0%, respectively, as compared to Q4 FY'17.
                                                                                                                                                                                          

Fiscal 2018 Results

The Company reported record fee revenue in FY'18 of $1,767.2 million, an increase of $201.7 million or 12.9% (10.6% increase on a constant currency basis) compared to FY'17.  The organic growth was driven by all three lines of business:






Futurestep


22.1%


Executive Search


14.8%


Hay Group


8.4%




Operating income was $203.9 million in FY'18 with an operating margin of 11.5% as compared to $114.4 million and 7.3%, respectively, in FY'17.  This increase in operating income resulted from higher fee revenue and a decrease in restructuring charges, net offset by increases in compensation and benefits expense and in general and administrative expenses.

Adjusted EBITDA was $273.8 million in FY'18 with an Adjusted EBITDA margin of 15.5% compared to $235.0 million and 15.0%, respectively, in the year-ago period.

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