10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 001-14505

KORN/FERRY INTERNATIONAL

(Exact Name of Registrant as Specified in its Charter)

Delaware	95-2623879
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

1900 Avenue of the Stars, Suite 2600, Los Angeles, California 90067

(Address of principal executive offices) (Zip code)

(310) 552-1834

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The number of shares outstanding of our common stock as of September 6, 2016 was 57,901,738 shares.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

Table of Contents

Item #	Description	Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements		1
	Consolidated Balance Sheets as of July 31, 2016 (unaudited) and April 30, 2016		1
	Unaudited Consolidated Statements of Income for the three months ended July 31, 2016 and 2015		2
	Unaudited Consolidated Statements of Comprehensive (Loss)/Income for the three months ended July 31, 2016 and 2015		3
	Unaudited Consolidated Statements of Cash Flows for the three months ended July 31, 2016 and 2015		4
	Notes to Unaudited Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		33
Item 4.	Controls and Procedures		34
Part II. Other Information
Item 1.	Legal Proceedings		35
Item 1A.	Risk Factors		35
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities		35
Item 6.	Exhibits		36
	Signatures		37

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	July 31, 2016			April 30, 2016
	(unaudited)
	(in thousands, except per share data)
ASSETS
Cash and cash equivalents	$	244,073		$	273,252
Marketable securities		3,475			11,338
Receivables due from clients, net of allowance for doubtful accounts of $12,674 and $11,292, respectively		341,984			315,975
Income taxes and other receivables		28,672			20,579
Prepaid expenses and other assets		53,196			43,130
Total current assets		671,400			664,274
Marketable securities, non-current		133,502			130,092
Property and equipment, net		99,980			95,436
Cash surrender value of company owned life insurance policies, net of loans		110,195			107,296
Deferred income taxes, net		26,232			27,163
Goodwill		587,615			590,072
Intangible assets, net		228,992			233,027
Investments and other assets		67,447			51,240
Total assets	$	1,925,363		$	1,898,600
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	33,719		$	26,634
Income taxes payable		4,351			8,396
Compensation and benefits payable		147,617			266,211
Term loan		19,754			30,000
Other accrued liabilities		149,865			145,023
Total current liabilities		355,306			476,264
Deferred compensation and other retirement plans		217,957			216,113
Term loan, non-current		251,038			110,000
Deferred tax liabilities		13,664			5,088
Other liabilities		51,056			43,834
Total liabilities		889,021			851,299
Stockholders’ equity:
Common stock: $0.01 par value, 150,000 shares authorized, 70,576 and 69,723 shares issued and 57,898 and 57,272 shares outstanding, respectively		705,792			702,098
Retained earnings		398,412			401,113
Accumulated other comprehensive loss, net		(70,577	)		(57,911	)
Total Korn/Ferry International stockholders’ equity		1,033,627			1,045,300
Noncontrolling interest		2,715			2,001
Total stockholders’ equity		1,036,342			1,047,301
Total liabilities and stockholders’ equity	$	1,925,363		$	1,898,600

The accompanying notes are an integral part of these consolidated financial statements.

1

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended July 31,
	2016			2015
	(in thousands, except per share data)
Fee revenue	$	375,621		$	267,394
Reimbursed out-of-pocket engagement expenses		17,312			11,941
Total revenue		392,933			279,335
Compensation and benefits		262,967			179,456
General and administrative expenses		55,342			37,491
Reimbursed expenses		17,312			11,941
Cost of services		16,832			10,120
Depreciation and amortization		11,444			7,423
Restructuring charges, net		24,520			—
Total operating expenses		388,417			246,431
Operating income		4,516			32,904
Other income (loss), net		4,259			(74	)
Interest expense, net		(3,061	)		(299	)
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		5,714			32,531
Equity in earnings of unconsolidated subsidiaries, net		79			725
Income tax provision		1,725			10,174
Net income		4,068			23,082
Net income attributable to noncontrolling interest		(860	)		—
Net income attributable to Korn/Ferry International	$	3,208		$	23,082
Earnings per common share attributable to Korn/Ferry International:
Basic	$	0.06		$	0.46
Diluted	$	0.06		$	0.46
Weighted-average common shares outstanding:
Basic		56,189			49,493
Diluted		56,576			50,014
Cash dividends declared per share	$	0.10		$	0.10

The accompanying notes are an integral part of these consolidated financial statements.

2

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME

(unaudited)

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Net income	$	4,068		$	23,082
Other comprehensive (loss) income:
Foreign currency translation adjustments		(13,274	)		(15,632	)
Deferred compensation and pension plan adjustments, net of tax		462			447
Unrealized losses on marketable securities, net of tax		—			(4	)
Comprehensive (loss) income		(8,744	)		7,893
Less: comprehensive income attributable to noncontrolling interest		(714	)		—
Comprehensive (loss) income attributable to Korn/Ferry International	$	(9,458	)	$	7,893

The accompanying notes are an integral part of these consolidated financial statements.

3

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Cash flows from operating activities:
Net income	$	4,068		$	23,082
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		11,444			7,423
Stock-based compensation expense		4,915			3,691
Provision for doubtful accounts		2,577			2,068
Gain on cash surrender value of life insurance policies		(2,498	)		(2,494	)
Gain on marketable securities		(3,915	)		(665	)
Deferred income taxes		5,410			5,124
Change in other assets and liabilities:
Deferred compensation		(5,866	)		(1,820	)
Receivables due from clients		(28,586	)		(13,058	)
Income tax and other receivables		(8,093	)		1,145
Prepaid expenses and other assets		(10,066	)		(4,869	)
Investment in unconsolidated subsidiaries		(79	)		(725	)
Income taxes payable		(4,346	)		(1,990	)
Accounts payable and accrued liabilities		(93,866	)		(96,737	)
Other		(7,137	)		(10,368	)
Net cash used in operating activities		(136,038	)		(90,193	)
Cash flows from investing activities:
Purchase of property and equipment		(15,079	)		(5,485	)
Cash paid for acquisition, net of cash acquired		(2,880	)		—
Purchase of marketable securities		(5,430	)		(9,116	)
Proceeds from sales/maturities of marketable securities		13,764			16,364
Premium on company-owned life insurance policies		(401	)		(404	)
Proceeds from life insurance policies		—			1,659
Dividends received from unconsolidated subsidiaries		230			806
Net cash (used in) provided by investing activities		(9,796	)		3,824
Cash flows from financing activities:
Proceeds from term loan facility		275,000			—
Principal payment on term loan facility		(140,000	)		—
Payment of contingent consideration from acquisition		(1,070	)		—
Purchase of common stock		(4,161	)		(6,573	)
Proceeds from issuance of common stock upon exercise of employee stock options and in connection with an employee stock purchase plan		2,430			2,379
Tax benefit related to stock-based compensation		332			4,064
Dividends paid to shareholders		(5,909	)		(5,115	)
Payments on life insurance policy loans		—			(1,151	)
Net cash provided by (used in) financing activities		126,622			(6,396	)
Effect of exchange rate changes on cash and cash equivalents		(9,967	)		(11,559	)
Net decrease in cash and cash equivalents		(29,179	)		(104,324	)
Cash and cash equivalents at beginning of period		273,252			380,838
Cash and cash equivalents at end of period	$	244,073		$	276,514

The accompanying notes are an integral part of these consolidated financial statements.

4

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2016

1. Organization and Summary of Significant Accounting Policies

Nature of Business

Korn/Ferry International, a Delaware corporation (the “Company”), and its subsidiaries are engaged in the business of providing talent management solutions, including executive search on a retained basis, recruitment for non-executive professionals, recruitment process outsourcing and leadership & talent consulting services. The Company’s worldwide network of 128 offices in 52 countries enables it to meet the needs of its clients in all industries.

Basis of Consolidation and Presentation

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended April 30, 2016 for the Company and its wholly and majority owned/controlled domestic and international subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements conform with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and prevailing practice within the industry. The consolidated financial statements include all adjustments, consisting of normal recurring accruals and any other adjustments that management considers necessary for a fair presentation of the results for these periods. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year.

Investments in affiliated companies, which are 50% or less owned and where the Company exercises significant influence over operations, are accounted for using the equity method.

The Company considers events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.

Use of Estimates and Uncertainties

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates, and changes in estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. The most significant areas that require management judgment are revenue recognition, restructuring, deferred compensation, annual performance related bonuses, evaluation of the carrying value of receivables, goodwill and other intangible assets, fair value of contingent consideration, share-based payments and the recoverability of deferred income taxes.

Revenue Recognition

Substantially all fee revenue is derived from fees for professional services related to executive search performed on a retained basis, recruitment for non-executive professionals, recruitment process outsourcing, people and organizational advisory services and the sale of productized services. Fee revenue from executive search activities and recruitment for non-executive professionals is generally one-third of the estimated first year compensation of the placed executive or non-executive professional, as applicable, plus a percentage of the fee to cover indirect engagement related expenses. The Company generally recognizes such revenue on a straight-line basis over a three-month period, commencing upon client acceptance, as this is the period over which the recruitment services are performed. Fees earned in excess of the initial contract amount are recognized upon completion of the engagement, which reflect the difference between the final actual compensation of the placed executive and the estimate used for purposes of the previous billings. Since the initial contract fees are typically not contingent upon placement of a candidate, our assumptions primarily relate to establishing the period over which such service is performed. These assumptions determine the timing of revenue recognition and profitability for the reported period. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved. In addition to recruitment for non-executive professionals, Futurestep provides recruitment process outsourcing (“RPO”) services and fee revenue is recognized as services are rendered and/or as milestones are achieved. Fee revenue from Hay Group is recognized as services are rendered for consulting engagements and other time based services,

5

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

measured by total hours incurred to the total estimated hours at completion. It is possible that updated estimates for the consulting engagement may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate. Hay Group revenue is also derived from the sale of productized services, which includes revenue from licenses and from the sale of products. Revenue from licenses is recognized using a straight-line method over the term of the contract (generally 12 months). Under the fixed term licenses, the Company is obligated to provide the licensee with access to any updates to the underlying intellectual property that are made by the Company during the term of the license. Once the term of the agreement expires, the client’s right to access or use the intellectual property expires and the Company has no further obligations to the client under the license agreement. Revenue from perpetual licenses is recognized when the license is sold since the Company’s only obligation is to provide the client access to the intellectual property but is not obligated to provide maintenance, support, updates or upgrades. Products sold by the Company mainly consist of books and automated services covering a variety of topics including performance management, team effectiveness, and coaching and development. The Company recognizes revenue for its products when the product has been sold or shipped in the case of books. As of July 31, 2016 and April 30, 2016, the Company included deferred revenue of $88.9 million and $95.9 million, respectively, in other accrued liabilities.

Allowance for Doubtful Accounts

An allowance is established for doubtful accounts by taking a charge to general and administrative expenses. The amount of the allowance is based on historical loss experience, assessment of the collectability of specific accounts, as well as expectations of future collections based upon trends and the type of work for which services are rendered. After the Company exhausts all collection efforts, the amount of the allowance is reduced for balances identified as uncollectible.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of July 31, 2016 and April 30, 2016, the Company’s investments in cash equivalents, consist of money market funds for which market prices are readily available.

Marketable Securities

The Company currently has investments in mutual funds that are classified as trading securities based upon management’s intent and ability to hold, sell or trade such securities. The classification of the investments in mutual funds is assessed upon purchase and reassessed at each reporting period. The investments in mutual funds (for which market prices are readily available) are held in trust to satisfy obligations under the Company’s deferred compensation plans (see Note 6 — Financial Instruments). Such investments are based upon the employees’ investment elections in their deemed accounts in the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (“ECAP”) from a pre-determined set of securities and the Company invests in marketable securities to mirror these elections. These investments are recorded at fair value and are classified as marketable securities in the accompanying consolidated balance sheets. The investments that the Company may sell within the next twelve months are carried as current assets. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis, dividends are recorded as earned on the ex-dividend date. Interest and dividend income are recorded in the accompanying consolidated statements of income in other income (loss), net.

Foreign Currency Forward Contracts Not Designated as Hedges

Beginning in the third quarter of fiscal 2016, the Company established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures which increased as a result of the Hay Group acquisition. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to Accounting Standards Codification 815, Derivatives and Hedging. Accordingly, the fair value of these contracts are recorded as of the end of the reporting period in the accompanying consolidated balance sheets, while the change in fair value is recorded to the accompanying consolidated statements of income.

6

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

Fair Value of Financial Instruments

Fair value is the price the Company would receive to sell an asset or transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities recorded or disclosed at fair value, the Company determines the fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, the fair value is based upon the quoted market price of similar assets. The fair values are assigned a level within the fair value hierarchy as defined below:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

As of July 31, 2016 and April 30, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis. These included cash, cash equivalents, accounts receivable, marketable securities and foreign currency forward contracts. The carrying amount of cash, cash equivalents and accounts receivable approximates fair value due to the short maturity of these instruments. The fair values of marketable securities classified as trading are obtained from quoted market prices, and the fair values of foreign currency forward contracts are obtained from a third party, which are based on quoted prices or market prices for similar financial instruments.

Business Acquisitions

Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). Results of the annual impairment test performed as of January 31, 2016, indicated that the fair value of each reporting unit exceeded its carrying amount and no reporting units were at risk of failing the impairment test. As a result, no impairment charge was recognized. There were no indicators of impairment as of July 31, 2016 and April 30, 2016 that would have required further testing.

7

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

Intangible assets primarily consist of customer lists, non-compete agreements, proprietary databases, intellectual property and trademarks and are recorded at their estimated fair value at the date of acquisition and are amortized in a pattern in which the asset is consumed if that pattern can be reliably determined, or using the straight-line method over their estimated useful lives which range from one to 24 years. For intangible assets subject to amortization, an impairment loss is recognized if the carrying amount of the intangible assets is not recoverable and exceeds fair value. The carrying amount of the intangible assets is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset. Intangible assets with indefinite lives are not amortized, but are reviewed annually for impairment or more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying amount. As of July 31, 2016 and April 30, 2016, there were no indicators of impairment with respect to the Company’s intangible assets.

Compensation and Benefits Expense

Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and administrative and support personnel. The most significant portions of this expense are salaries and the amounts paid under the annual performance related bonus plan to employees. The portion of the expense applicable to salaries is comprised of amounts earned by employees during a reporting period. The portion of the expenses applicable to annual performance related bonuses refers to the Company’s annual employee performance related bonus with respect to a fiscal year, the amount of which is communicated and paid to each eligible employee following the completion of the fiscal year.

Each quarter, management makes its best estimate of its annual performance related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by executive search consultants and revenue and other performance metrics for Hay Group and Futurestep consultants), the level of engagements referred by a fee earner in one line of business to a different line of business, Company performance including profitability, competitive forces and future economic conditions and their impact on the Company’s results. At the end of each fiscal year, annual performance related bonuses take into account final individual consultant productivity (including referred work), Company results including profitability, the achievement of strategic objectives and the results of individual performance appraisals, and the current economic landscape. Accordingly, each quarter the Company reevaluates the assumptions used to estimate annual performance related bonus liability and adjusts the carrying amount of the liability recorded on the consolidated balance sheet and reports any changes in the estimate in current operations.

Because annual performance-based bonuses are communicated and paid only after the Company reports its full fiscal year results, actual performance-based bonus payments may differ from the prior year’s estimate. Such changes in the bonus estimate historically have been immaterial and are recorded in current operations in the period in which they are determined. The performance related bonus expense was $42.4 million and $41.8 million during the three months ended July 31, 2016 and 2015, respectively, included in compensation and benefits expense in the consolidated statements of income.

Other expenses included in compensation and benefits expense are due to changes in deferred compensation and pension plan liabilities, changes in cash surrender value (“CSV”) of company owned life insurance (“COLI”) contracts, amortization of stock compensation awards, payroll taxes and employee insurance benefits.

Restructuring Charges, Net

The Company accounts for its restructuring charges as a liability when the obligations are incurred and records such charges at fair value. Such charges included one-time employee termination benefits and the cost to terminate an office lease including remaining lease payments. Changes in the estimates of the restructuring charges are recorded in the period the change is determined.

8

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

Stock-Based Compensation

The Company has employee compensation plans under which various types of stock-based instruments are granted. These instruments principally include restricted stock units, restricted stock, stock options and an Employee Stock Purchase Plan (“ESPP”). The Company recognizes compensation expense related to restricted stock units, restricted stock and the estimated fair value of stock options and stock purchases under the ESPP on a straight-line basis over the service period for the entire award.

Recently Adopted Accounting Standards

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued guidance simplifying the presentation of debt issue costs. The guidance requires debt issuance costs related to a debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, rather than being classified as an asset. The Company adopted this guidance during the three months ended July 31, 2016 and as a result, $4.2 million of unamortized debt issuance costs associated with its senior secured Credit Agreement were classified as a direct deduction to the term loan as of July 31, 2016, of which $0.9 million was recorded to term loan, current, and $3.3 million was recorded to term loan, non-current. The adoption did not have a material impact on the consolidated financial statements as of April 30, 2016.

In September 2015, the FASB issued guidance requiring an acquirer to recognize adjustments to provisional amounts recorded in an acquisition that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer is required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The acquirer is also required to present separately on the face of the income statement or disclose in the footnotes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date. The Company adopted this guidance during the three months ended July 31, 2016 and the adoption did not have an impact on the financial statements of the Company.

Recently Proposed Accounting Standards

In May 2014, the FASB issued guidance that supersedes revenue recognition requirements regarding contracts with customers to transfer goods or services or for the transfer of nonfinancial assets. Under the new guidance, entities are required to recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis to be performed on transactions to determine when and how revenue is recognized. In July 2015, the FASB decided to approve a one-year deferral of the effective date as well as providing an option to early adopt the standard on the original effective date. This new guidance is effective for fiscal years and interim periods within those annual years beginning after December 15, 2017 as opposed to the original effective date of December 15, 2016. The Company will adopt this guidance in its fiscal year beginning May 1, 2018. The Company is currently evaluating the effect the guidance will have on our financial condition and results of operations.

In January 2016, the FASB issued guidance on the classification and measurement of financial instruments, which requires that (i) all equity investments, other than equity-method investments, in unconsolidated entities, generally be measured at fair value through earnings and (ii) when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk, be recognized separately in other comprehensive income. Additionally, it changes the disclosure requirements for financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, with early adoption permitted for certain provisions. The Company is currently evaluating the effect the guidance will have on the consolidated financial statements.

In February 2016, the FASB issued guidance on accounting for leases that generally requires all leases to be recognized in the consolidated balance sheet. The provisions of the guidance are effective for fiscal years beginning after December 15, 2018; early adoption is permitted. The provisions of the guidance are to be applied using a modified retrospective approach. The Company is currently evaluating the effect that this guidance will have on the consolidated financial statements.

In March 2016, the FASB issued guidance on accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Furthermore, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The guidance also allows companies to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifying that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity in the consolidated statements of cash flows and provides an accounting policy election to account for forfeitures as they occur. The provisions of the guidance are effective for fiscal years beginning after December 15, 2016; early adoption is permitted. The Company is currently evaluating the effect that this guidance will have on the consolidated financial statements.

9

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

2. Basic and Diluted Earnings Per Share

Accounting Standards Codification 260, Earnings Per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends prior to vesting as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant to certain employees under our restricted stock agreements, grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities. Therefore, we are required to apply the two-class method in calculating earnings per share. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.

Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net earnings attributable to common stockholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding options or other contracts to issue common stock as if they were exercised or converted.

During the three months ended July 31, 2016 and 2015, all shares of outstanding options were included in the computation of diluted earnings per share. During both the three months ended July 31, 2016 and 2015, restricted stock awards of 0.5 million were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.

The following table summarizes basic and diluted earnings per common share attributable to common stockholders:

	Three Months Ended July 31,
	2016		2015
	(in thousands, except per share data)
Net income attributable to Korn/Ferry International	$	3,208	$	23,082
Less: distributed and undistributed earnings to nonvested restricted stockholders		44		224
Basic net earnings attributable to common stockholders		3,164		22,858
Add: undistributed earnings to nonvested restricted stockholders		—		176
Less: reallocation of undistributed earnings to nonvested restricted stockholders		—		174
Diluted net earnings attributable to common stockholders	$	3,164	$	22,860
Weighted-average common shares outstanding:
Basic weighted-average number of common shares outstanding		56,189		49,493
Effect of dilutive securities:
Restricted stock		316		452
Stock options		60		66
ESPP		11		3
Diluted weighted-average number of common shares outstanding		56,576		50,014
Net earnings per common share:
Basic earnings per share	$	0.06	$	0.46
Diluted earnings per share	$	0.06	$	0.46

10

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

3. Stockholders’ Equity

The following table summarizes the changes in stockholders’ equity for the three months ended July 31, 2016:

	Total Korn/Ferry International Stockholders’ Equity			Noncontrolling Interest			Total Stockholders’ Equity
	(in thousands)
Balance as of April 30, 2016	$	1,045,300		$	2,001		$	1,047,301
Comprehensive income (loss):
Net income		3,208			860			4,068
Foreign currency translation adjustments		(13,128	)		(146	)		(13,274	)
Deferred compensation and pension plan adjustments, net of tax		462			—			462
Dividends declared		(5,909	)		—			(5,909	)
Purchase of stock		(4,161	)		—			(4,161	)
Issuance of stock		2,784			—			2,784
Stock-based compensation		4,739			—			4,739
Tax benefit from exercise of stock options and vesting of restricted stock		332			—			332
Balance as of July 31, 2016	$	1,033,627		$	2,715		$	1,036,342

4. Comprehensive (Loss) Income

Comprehensive (loss) income is comprised of net income and all changes to stockholders’ equity, except those changes resulting from investments by stockholders (changes in paid in capital) and distributions to stockholders (dividends) and is reported in the accompanying consolidated statements of comprehensive (loss)/income. Accumulated other comprehensive loss, net of taxes, is recorded as a component of stockholders’ equity.

The components of accumulated other comprehensive loss were as follows:

	July 31, 2016			April 30, 2016
	(in thousands)
Foreign currency translation adjustments	$	(49,467	)	$	(36,339	)
Deferred compensation and pension plan adjustments, net of tax		(21,110	)		(21,572	)
Accumulated other comprehensive loss, net	$	(70,577	)	$	(57,911	)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the three months ended July 31, 2016:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Marketable Securities		Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2016	$	(36,339	)	$	(21,572	)	$	—	$	(57,911	)
Unrealized losses arising during the period		(13,128	)		—			—		(13,128	)
Reclassification of realized net losses to net income		—			462			—		462
Balance as of July 31, 2016	$	(49,467	)	$	(21,110	)	$	—	$	(70,577	)

11

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the three months ended July 31, 2015:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Marketable Securities			Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2015	$	(20,919	)	$	(19,708	)	$	4		$	(40,623	)
Unrealized losses arising during the period		(15,632	)		—			(4	)		(15,636	)
Reclassification of realized net losses to net income		—			447			—			447
Balance as of July 31, 2015	$	(36,551	)	$	(19,261	)	$	—		$	(55,812	)

(1) The tax effect on the reclassifications of realized net losses was $0.3 million for both the three months ended July 31, 2016 and 2015.

5. Employee Stock Plans

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of income for the periods indicated:

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Restricted stock	$	4,739		$	3,554
ESPP		176			120
Stock options		—			17
Total stock-based compensation expense, pre-tax		4,915			3,691
Tax benefit from stock-based compensation expense		(1,484	)		(1,154	)
Total stock-based compensation expense, net of tax	$	3,431		$	2,537

Stock Incentive Plans

At the Company’s 2012 Annual Meeting of Stockholders, held on September 27, 2012, the Company’s stockholders approved an amendment and restatement to the Korn/Ferry International Amended and Restated 2008 Stock Incentive Plan (the 2012 amendment and restatement being the “Second A&R 2008 Plan”), which among other things, increased the current maximum number of shares that may be issued under the plan to 5,700,000 shares, subject to certain changes in the Company’s capital structure and other extraordinary events. The Second A&R 2008 Plan provides for the grant of awards to eligible participants, designated as either nonqualified or incentive stock options, restricted stock and restricted stock units, any of which may be performance-based or market-based, and incentive bonuses, which may be paid in cash or a combination thereof. Under the Second A&R 2008 Plan, the ability to issue full-value awards is limited by requiring full-value stock awards to count 1.91 times as much as stock options.

Restricted Stock

The Company grants time-based restricted stock awards to executive officers and other senior employees generally vesting over a three to four year period. In addition, certain key management members typically receive time-based restricted stock awards upon commencement of employment and may receive them annually in conjunction with the Company’s performance review. Time-based restricted stock awards are granted at a price equal to fair value, which is determined based on the closing price of the Company’s common stock on the grant date. The Company recognizes compensation expense for time-based restricted stock awards on a straight-line basis over the vesting period.

The Company also grants market-based and performance-based restricted stock units to executive officers and other senior employees. The market-based units vest after three years depending upon the Company’s total stockholder return over the

12

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

three-year performance period relative to other companies in its selected peer group. The fair value of these market-based restricted stock units are determined by using extensive market data that is based on historical Company and peer group information. The Company recognizes compensation expense for market-based restricted stock units on a straight-line basis over the vesting period.

Performance-based restricted stock units vest after three years depending upon the Company meeting certain objectives that are set at the time the restricted stock unit is issued. Performance-based restricted stock units are granted at a price equal to the fair value, which is determined based on the closing price of the Company’s common stock on the grant date. The Company recognizes compensation expense for performance-based restricted stock units on a straight-line basis over the vesting period. At the end of each reporting period, the Company estimates the number of restricted stock units expected to vest, based on the probability that certain performance objectives will be met, exceeded, or fall below target levels, and the Company takes into account these estimates when calculating the expense for the period.

Restricted stock activity during the three months ended July 31, 2016 is summarized below:

	Shares			Weighted- Average Grant Date Fair Value
	(in thousands, except per share data)
Non-vested, April 30, 2016		1,506		$	34.12
Granted		718		$	19.89
Vested		(666	)	$	21.80
Forfeited/expired		(11	)	$	26.35
Non-vested, July 31, 2016		1,547		$	32.87

As of July 31, 2016, there were 0.6 million shares and 0.1 million shares outstanding relating to market-based and performance-based restricted stock units, respectively, with total unrecognized compensation totaling $11.7 million and $9.3 million, respectively.

As of July 31, 2016, there was $41.6 million of total unrecognized compensation cost related to all non-vested awards of restricted stock, which is expected to be recognized over a weighted-average period of 2.7 years. During the three months ended July 31, 2016 and 2015, 185,754 shares and 188,104 shares of restricted stock totaling $4.2 million and $6.6 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to vesting of restricted stock.

Employee Stock Purchase Plan

The Company has an ESPP that, in accordance with Section 423 of the Internal Revenue Code, allows eligible employees to authorize payroll deductions of up to 15% of their salary to purchase shares of the Company’s common stock at 85% of the fair market price of the common stock on the last day of the enrollment period. Employees may not purchase more than $25,000 in stock during any calendar year. The maximum number of shares that may be issued under the ESPP is 3.0 million shares. During the three months ended July 31, 2016, employees purchased 114,011 shares at $17.60 per share. During the three months ended July 31, 2015, employees purchased 44,334 shares at $29.55 per share. As of July 31, 2016, the ESPP had approximately 1.4 million shares remaining available for future issuance.

Common Stock

During the three months ended July 31, 2016 and 2015, the Company issued 32,470 shares and 71,428 shares of common stock, respectively, as a result of the exercise of stock options, with cash proceeds from the exercise of $0.4 million and $1.1 million, respectively.

No shares were repurchased during the three months ended July 31, 2016 and 2015, other than to satisfy minimum tax withholding requirements upon the vesting of restricted stock as described above.

13

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

6. Financial Instruments

The following tables show the Company’s cash, trading securities and foreign currency forward contracts’ cost, gross unrealized gains, gross unrealized losses and fair value by significant category recorded as cash and cash equivalents, current portion of current marketable securities, non-current marketable securities, or other accrued liabilities as of July 31, 2016 and April 30, 2016:

	July 31, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	119,660	$	—	$	—		$	119,660		$	119,660	$	—	$	—	$	—
Money market funds		124,413		—		—			124,413			124,413		—		—		—
Mutual funds (1)		134,447		3,477		(947	)		136,977			—		3,475		133,502		—
Total	$	378,520	$	3,477	$	(947	)	$	381,050		$	244,073	$	3,475	$	133,502	$	—
Level 2:
Foreign currency forward contracts	$	—	$	419	$	(966	)	$	(547	)	$	—	$	—	$	—	$	(547	)

	April 30, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	155,702	$	—	$	—		$	155,702		$	155,702	$	—	$	—	$	—
Money market funds		117,550		—		—			117,550			117,550		—		—		—
Mutual funds (1)		142,588		1,395		(2,553	)		141,430			—		11,338		130,092		—
Total	$	415,840	$	1,395	$	(2,553	)	$	414,682		$	273,252	$	11,338	$	130,092	$	—
Level 2:
Foreign currency forward contracts	$	—	$	324	$	(1,041	)	$	(717	)	$	—	$	—	$	—	$	(717	)

(1) These investments are held in trust for settlement of the Company’s vested and unvested obligations of $133.9 million and $138.8 million as of July 31, 2016 and April 30, 2016, respectively, under the ECAP (see Note 7 — Deferred Compensation and Retirement Plans). During the three months ended July 31, 2016 and 2015, the fair value of the investments increased; therefore, the Company recognized income of $3.9 million and $0.7 million, respectively, which was recorded in other income (loss), net.

Investments in marketable securities classified as trading are based upon investment selections the employee elects from a pre-determined set of securities in the ECAP and the Company invests in marketable securities to mirror these elections. As of July 31, 2016 and April 30, 2016, the Company’s investments in marketable securities classified as trading consist of mutual funds for which market prices are readily available. Investments in marketable securities classified as available-for-sale securities are made based on the Company’s investment policy, which restricts the types of investments that can be made. As of July 31, 2016 and April 30, 2016, the Company does not hold marketable securities classified as available-for-sale. During the three months ended July 31, 2015, the Company received $3.0 million in proceeds from maturities of available-for-sale marketable securities.

14

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

Non-Designated Derivatives

The fair value of derivatives not designated as hedge instruments are as follows:

	July 31, 2016		April 30, 2016
	(in thousands)
Derivative assets:
Foreign currency forward contracts	$	419	$	324
Derivative liabilities:
Foreign currency forward contracts	$	966	$	1,041

As of July 31, 2016, the total notional amounts of the forward contracts purchased and sold were $13.1 million and $58.5 million, respectively. As of April 30, 2016, the total notional amounts of the forward contracts purchased and sold were $14.5 million and $44.3 million, respectively. The Company recognizes forward contracts as a net asset or net liability on the consolidated balance sheets as such contracts are covered by master netting agreements. The Company incurred an immaterial net gain related to forward contracts during the three months ended July 31, 2016, which is recorded in general and administrative expenses in the accompanying consolidated statements of income. The cash flows related to foreign currency forward contracts are included in net cash used in operating activities.

7. Deferred Compensation and Retirement Plans

The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions. Among these plans is a defined benefit pension plan for Hay Group employees in the United States. The assets of this plan are held separately from the assets of the sponsors in self-administered funds. The plan is funded consistent with local statutory requirements and the Company does not expect to make any contribution to this plan during fiscal 2017. All other defined benefit obligations from other plans are unfunded.

The components of net periodic benefit costs are as follows:

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Interest cost	$	1,062		$	703
Amortization of actuarial loss		763			731
Service cost		609			—
Expected return on plan assets		(390	)		—
Net periodic benefit costs	$	2,044		$	1,434

The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans mentioned above that are unfunded. The gross CSV of these contracts of $178.6 million and $175.7 million is offset by outstanding policy loans of $68.4 million in the accompanying consolidated balance sheets as of July 31, 2016 and April 30, 2016, respectively. The CSV value of the underlying COLI investments increased by $2.5 million during both the three months ended July 31, 2016 and 2015, respectively, recorded as a decrease in compensation and benefits expense in the accompanying consolidated statements of income.

The Company has an ECAP, which is intended to provide certain employees an opportunity to defer salary and/or bonus on a pre-tax basis or make an after-tax contribution. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based upon employee performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. As these contributions vest, the amounts are recorded as a liability in deferred compensation and other retirement plans on the accompanying balance sheet and compensation and benefits on the accompanying consolidated statements of income. Participants generally vest in Company contributions over a four to five year period.

15

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During the three months ended July 31, 2016 and 2015, deferred compensation liability increased; therefore, the Company recognized in compensation expense $3.2 million and $0.7 million, respectively. Offsetting these increases in compensation and benefits expense was an increase in the fair value of marketable securities classified as trading (held in trust to satisfy obligations under certain deferred compensation liabilities) of $3.9 million and $0.7 million during the three months ended July 31, 2016 and 2015, respectively, recorded in other income (loss), net on the consolidated statements of income (see Note 6 —Financial Instruments).

8. Restructuring Charges, Net

The Company continued the implementation of the fiscal 2016 restructuring plan during the three months ended July 31, 2016 in order to integrate the Hay Group entities that were acquired in the prior year acquisition by eliminating redundant positions and operational and general and administrative expenses and consolidating office space. This resulted in restructuring charges of $24.5 million in the three months ended July 31, 2016, of which $11.5 million relates to severance and $13.0 million relates to consolidation of office space.

Changes in the restructuring liability during the three months ended July 31, 2016 are as follows:

	Severance			Facilities			Total
	(in thousands)
Liability as of April 30, 2016	$	5,293		$	669		$	5,962
Restructuring charges, net		11,472			13,048			24,520
Reductions for cash payments		(4,788	)		(1,787	)		(6,575	)
Reductions for non-cash charges		—			(2,480	)		(2,480	)
Exchange rate fluctuations		(111	)		(66	)		(177	)
Liability as of July 31, 2016	$	11,866		$	9,384		$	21,250

As of July 31, 2016 and April 30, 2016, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $4.5 million and $0.6 million, respectively, of facilities costs which primarily relate to commitments under operating leases, net of sublease income, which are included in other long-term liabilities.

The restructuring liability by segment is summarized below:

	July 31, 2016
	Severance		Facilities		Total
	(in thousands)
Executive Search
North America	$	743	$	525	$	1,268
Europe, Middle East and Africa (“EMEA”)		414		84		498
Asia Pacific		6		44		50
Latin America		17		166		183
Total Executive Search		1,180		819		1,999
Hay Group		10,563		8,361		18,924
Futurestep		—		204		204
Corporate		123		—		123
Liability as of July 31, 2016	$	11,866	$	9,384	$	21,250

16

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

	April 30, 2016
	Severance		Facilities		Total
	(in thousands)
Executive Search
North America	$	—	$	5	$	5
EMEA		1,533		23		1,556
Asia Pacific		33		—		33
Total Executive Search		1,566		28		1,594
Hay Group		3,727		396		4,123
Futurestep		—		245		245
Liability as of April 30, 2016	$	5,293	$	669	$	5,962

9. Business Segments

The Company currently operates in three global businesses: Executive Search, Hay Group and Futurestep. The Executive Search segment focuses on recruiting Board of Director and C-level positions, in addition to research-based interviewing and onboarding solutions, for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare and technology industries. Hay Group assists clients with ongoing assessment, compensation and development of their senior executives and management teams, and addresses three fundamental needs: Talent Strategy, Succession Management, and Leadership Development, all underpinned by a comprehensive array of world-leading IP, products and tools. Futurestep is a global industry leader in high-impact talent acquisition solutions. Its portfolio of services includes global and regional RPO, project recruitment, individual professional search and consulting. The Executive Search business segment is managed by geographic regional leaders and Hay Group and Futurestep worldwide operations are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Hay Group and Futurestep report directly to the Chief Executive Officer of the Company. The Company also operates a Corporate segment to record global expenses of the Company.

The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker’s (“CODM”) review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA.

17

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

Financial highlights by business segment are as follows:

	Three Months Ended July 31, 2016
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Hay Group			Futurestep			Corporate			Consolidated
	(in thousands)
Fee revenue	$	81,802	$	35,370	$	19,626	$	9,563	$	146,361	$	174,582		$	54,678		$	—		$	375,621
Deferred revenue adjustment due to acquisition		—		—		—		—		—		3,535			—			—			3,535
Adjusted fee revenue	$	81,802	$	35,370	$	19,626	$	9,563	$	146,361	$	178,117		$	54,678		$	—		$	379,156
Total revenue	$	85,425	$	36,249	$	20,180	$	9,614	$	151,468	$	181,508		$	59,957		$	—		$	392,933
Net income																					4,068
Other income, net																					(4,259	)
Interest expense, net																					3,061
Equity in earnings of unconsolidated subsidiaries, net																					(79	)
Income tax provision																					1,725
Operating income (loss)	$	16,468	$	6,027	$	2,102	$	2,330	$	26,927	$	(7,743	)	$	7,513		$	(22,181	)	$	4,516
Depreciation and amortization		830		211		225		114		1,380		8,016			623			1,425			11,444
Other income (loss), net		288		24		87		73		472		235			(2	)		3,554			4,259
Equity in earnings of unconsolidated subsidiaries, net		79		—		—		—		79		—			—			—			79
EBITDA		17,665		6,262		2,414		2,517		28,858		508			8,134			(17,202	)		20,298
Restructuring charges, net		1,706		128		622		360		2,816		21,488			—			216			24,520
Integration/acquisition costs		—		—		—		—		—		4,264			—			3,763			8,027
Deferred revenue adjustment due to acquisition		—		—		—		—		—		3,535			—			—			3,535
Adjusted EBITDA	$	19,371	$	6,390	$	3,036	$	2,877	$	31,674	$	29,795		$	8,134		$	(13,223	)	$	56,380

	Three Months Ended July 31, 2015
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Hay Group			Futurestep		Corporate			Consolidated
	(in thousands)
Fee revenue	$	90,359	$	36,090	$	19,215	$	6,426	$	152,090	$	69,240		$	46,064	$	—		$	267,394
Total revenue	$	94,399	$	37,171	$	19,990	$	6,432	$	157,992	$	71,441		$	49,902	$	—		$	279,335
Net income																			$	23,082
Other loss, net																				74
Interest expense, net																				299
Equity in earnings of unconsolidated subsidiaries, net																				(725	)
Income tax provision																				10,174
Operating income (loss)	$	24,145	$	6,276	$	2,986	$	1,508	$	34,915	$	7,495		$	6,189	$	(15,695	)	$	32,904
Depreciation and amortization		827		365		246		78		1,516		3,748			585		1,574			7,423
Other income (loss), net		32		143		18		239		432		(863	)		—		357			(74	)
Equity in earnings of unconsolidated subsidiaries, net		86		—		—		—		86		—			—		639			725
EBITDA		25,090		6,784		3,250		1,825		36,949		10,380			6,774		(13,125	)		40,978
Integration/acquisition costs		—		—		—		—		—		329			—		345			674
Adjusted EBITDA	$	25,090	$	6,784	$	3,250	$	1,825	$	36,949	$	10,709		$	6,774	$	(12,780	)	$	41,652

18

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 31, 2016

10. Long-Term Debt

On June 15, 2016, the Company entered into a senior secured $400 million Credit Agreement (the “Credit Agreement”) with a syndicate of banks and Wells Fargo Bank, National Association as administrative agent (to provide for enhanced financial flexibility and in recognition of the accelerated pace of the Hay Group integration). The Credit Agreement provides for, among other things: (a) a senior secured term loan facility in an aggregate principal amount of $275 million (the “ Term Facility”); (b) a senior secured revolving credit facility (the “Revolver” and together with the Term Facility, the “Credit Facilities”) in an aggregate principal amount of $125 million, (c) annual term loan amortization of 7.5%, 7.5%, 10.0%, 10.0%, and 10.0%, with the remaining principal due at maturity (d) certain customary affirmative and negative covenants, including a maximum consolidated total leverage ratio (as defined below) and a minimum interest coverage ratio, and (e) an expanded definition of permitted add-backs to Adjusted EBITDA in recognition of the accelerated integration actions. The Company drew down $275 million on the new term loan and used $140 million of the proceeds to pay-off the term loan that was outstanding as of April 30, 2016. The remaining funds will be used for working capital and general corporate purposes. As of July 31, 2016, the Company was in compliance with its debt covenants.

At the Company’s option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Facilities may fluctuate between LIBOR plus 1.25% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon the Company’s total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated leverage ratio”) at such time. In addition, the Company will be required to pay to the lenders a quarterly fee ranging from 0.20% to 0.35% per annum on the average daily unused amount of the Term Facility, based upon the Company’s consolidated leverage ratio at such time, and fees relating to the issuance of letters of credit.

Both the Revolver and the Term Facility mature on June 15, 2021, and may be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary LIBOR breakage fees). The Term Facility is payable in quarterly installments beginning on September 30, 2016. As of July 31, 2016, $275.0 million was outstanding under the Term Facility compared to $140.0 million as of April 30, 2016, under the previous Facility. During the three months ended July 31, 2016, the average rate on the Term Facility was 2.40%.

As of July 31, 2016 and April 30, 2016, the Company had no borrowings under the Revolver. At July 31, 2016 and April 30, 2016, there were $2.8 million of standby letters of credit issued under its long-term debt arrangements. The Company had a total of $5.6 million and $6.4 million of standby letters of credits with other financial institutions as of July 31, 2016 and April 30, 2016, respectively.

11. Subsequent Events

Quarterly Dividend Declaration

On September 7, 2016, the Board of Directors of the Company declared a cash dividend of $0.10 per share that will be paid on October 14, 2016 to holders of the Company’s common stock of record at the close of business on September 26, 2016. The declaration and payment of future dividends under the quarterly dividend policy will be at the discretion of the Board of Directors and will depend upon many factors, including the Company’s earnings, capital requirements, financial conditions, the terms of the Company’s indebtedness and other factors that the Board of Directors may deem to be relevant. The Board may amend, revoke or suspend the dividend policy at any time and for any reason.

19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

This Quarterly Report on Form 10-Q may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All of these forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, dependence on attracting and retaining qualified and experienced consultants, maintaining our brand name and professional reputation, potential legal liability and regulatory developments, 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 growth, restrictions imposed by off-limits agreements, competition, 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 successfully recover from a disaster or business continuity problems, employment liability risk, an impairment in the carrying value of goodwill and other intangible assets, deferred tax assets that we may not be able to use, our ability to develop new products and services, changes in our accounting estimates and assumptions, alignment of our cost structure, risks related to the integration of recently acquired businesses, the utilization and billing rates of our consultants, seasonality, and the matters disclosed under the heading “Risk Factors” in the Company’s Exchange Act reports, including Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2016 (“Form 10-K”). Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report on Form 10-Q and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

The following presentation of management’s discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. We also make available on the Investor Relations portion of our website at www.kornferry.com earnings slides and other important information, which we encourage you to review.

Executive Summary

Korn/Ferry International (referred to herein as the “Company,” “Korn Ferry,” or in the first person notations “we,” “our,” and “us”) is the preeminent global people and organizational advisory firm. Our services include Executive Search, advisory solutions and products through Hay Group and recruitment for non-executive professionals and recruitment process outsourcing (“RPO”) through Futurestep. Approximately 73% of the executive searches we performed in fiscal 2016 were for board level, chief executive and other senior executive and general management positions. Our 5,575 executive search clients in fiscal 2016 included many of the world’s largest and most prestigious public and private companies, including approximately 54% of the FORTUNE 500, middle market and emerging growth companies, as well as government and nonprofit organizations. We have built strong client loyalty, with 84% of assignments performed (without giving effect to Legacy Hay assignments) during fiscal 2016 having been on behalf of clients for whom we had conducted assignments in the previous three fiscal years. Approximately 62% of our revenues were generated from clients that utilize multiple lines of business.

20

Superior performance comes from having the right conditions for success in two key areas – the organization and its people. Organizational conditions encourage people to put forth their best effort and invest their energy towards achieving the organization’s purpose. We can help operationalize a client’s complete strategy or address any combination of six broad categories:

Organization Design	We establish the conditions for success by clarifying strategy; designing an operating model and organization structure that aligns to it; and defining a high performance culture. We enable strategic change by engaging and motivating people to perform.
Talent Strategy and Work Design	We map talent strategy to business strategy and help organizations put their plan into action. We help organizations to make sure they have the right people, in the right roles, engaged and enabled to do the right things - both now and in the future.
Rewards and Benefits	We help organizations align reward with strategy. We help them pay their people fairly for doing the right things - with rewards they value - at a cost the organization can afford.
Assessment and Succession	We provide actionable, research-backed insight that allows organizations to understand the talent they have, benchmarked against the talent they need to deliver on the business strategy. Our assessments allow leaders to make the right decisions about their people for today, and to prepare the right leaders to be ready - when and where they are needed - in the future.
Executive Search and Recruitment	We integrate scientific research with our practical experience and industry-specific expertise to recruit professionals of all levels and functions at organizations across every sector.
Leadership Development	We combine expertise, science, and proven techniques with forward thinking and creativity to build leadership experiences that help entry- to senior-level leaders grow and deliver superior results.

During fiscal 2016, we implemented a restructuring plan in order to rationalize our cost structure in order to eliminate redundant positions and real estate that were created due to the acquisition of HG (Luxembourg) S.à.r.l (“Legacy Hay”) in December 2015. In particular, the majority of our efforts in fiscal 2016, were focused on activities associated with integration of our go-to-market activities, our intellectual property and content, our solution sets and service offerings, and our back office systems and business processes. We continued to implement this plan during the first quarter of fiscal 2017 and in connection with the plan, recorded $24.5 million of restructuring charges with $11.5 million relating to severance costs and $13.0 million relating to the consolidation of office space during the three months ended July 31, 2016. No restructuring charges were incurred during the three months ended July 31, 2015.

The Company currently operates in three global business segments: Executive Search, Hay Group and Futurestep. See Note 9 – Business Segments, in the Notes to Unaudited Consolidated Financial Statements for discussion of the Company’s global business segments. The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs and certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). For the three months ended July 31, 2016, Adjusted EBITDA includes a deferred revenue adjustment related to the Legacy Hay acquisition, reflecting revenue that Hay Group would have realized if not for business combination accounting that requires a company to record the acquisition balance sheet at fair value and write-off deferred revenue where no future services are required to be performed to earn that revenue. Management will no longer have adjusted fee revenue after this quarter. Adjusted EBITDA is a non-GAAP financial measure. It has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with U.S. generally accepted accounting principles (“GAAP”), and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, it may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies. Management believes the presentation of this non-GAAP financial measure provides meaningful supplemental information regarding Korn Ferry’s performance by excluding certain charges, items of income and other items that may not be indicative of Korn Ferry’s ongoing operating results. The use of this non-GAAP financial measure facilitates comparisons to Korn Ferry’s historical performance and identification of operating trends that may otherwise be distorted by certain charges and other items that may not be indicative of Korn Ferry’s ongoing operating results. Korn Ferry includes this non-GAAP financial measure because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation

21

of Korn Ferry’s ongoing operations and financial and operational decision-making. The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in the accompanying consolidated financial statements, except that the above noted items are excluded from EBITDA to arrive at Adjusted EBITDA.

Similarly, adjusted fee revenue is a non-GAAP financial measure. Adjusted fee revenue is not a measure that substitutes an individually tailored revenue recognition or measurement method for those of GAAP, rather, it is an adjustment for a short period of time that will provide better comparability in the current and future periods. Management believes the presentation of adjusted fee revenue assists management in its evaluation of ongoing operations and provides useful information to investors because it 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 distorted by write-offs required under business combination accounting 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.

Fee revenue increased $108.2 million, or 40% in the three months ended July 31, 2016 to $375.6 million compared to $267.4 million in the three months ended July 31, 2015, with increases in fee revenue in Hay Group and Futurestep offset by lower fee revenue in Executive Search. During the three months ended July 31, 2016, we recorded operating income of $4.5 million with Executive Search and Futurestep segments contributing $26.9 million and $7.5 million, respectively, offset by the operating losses from Hay Group and Corporate segments of $7.7 million and $22.2 million, respectively. Net income during the three months ended July 31, 2016 and 2015 was $4.1 million and $23.1 million, respectively. Adjusted EBITDA was $56.4 million during the three months ended July 31, 2016 with Executive Search, Hay Group and Futurestep segments contributing $31.7 million, $29.8 million, and $8.1 million, respectively, offset by corporate expenses net of other income of $13.2 million. Adjusted EBITDA increased $14.7 million during the three months ended July 31, 2016, from Adjusted EBITDA of $41.7 million in the year-ago quarter.

Our cash, cash equivalents and marketable securities decreased $33.6 million, or 8%, to $381.1 million at July 31, 2016, compared to $414.7 million at April 30, 2016. This decrease is mainly due to bonuses earned in fiscal 2016 and paid during the first quarter of fiscal 2017, $15.1 million in payments for the purchase of fixed assets, $5.9 million in dividends paid during first quarter of fiscal 2017, offset by the drawdown of $275 million on the new term loan of which $140 million of the proceeds were used to pay-off the term loan that was outstanding as of April 30, 2016 and cash provided by operating activities. As of July 31, 2016, we held marketable securities to settle obligations under our Executive Capital Accumulation Plan (“ECAP”) with a cost value of $134.4 million and a fair value of $137.0 million. Our vested and unvested obligations for which these assets were held in trust totaled $133.9 million as of July 31, 2016.

Our working capital increased by $128.1 million to $316.1 million in the three months ended July 31, 2016. We believe that cash on hand and funds from operations and other forms of liquidity will be sufficient to meet our anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt obligations incurred in connection with the Legacy Hay acquisition, the retention pool obligations pursuant to the Legacy Hay acquisition and dividend payments under our dividend policy in the next twelve months. We had no outstanding borrowings under our revolving credit facility at July 31, 2016 and April 30, 2016. As of July 31, 2016 and April 30, 2016, there was $2.8 million of standby letters of credit issued under our long-term debt arrangements. We have a total of $5.6 million and $6.4 million of standby letters of credits with other financial institutions as of July 31, 2016 and April 30, 2016, respectively.

22

Results of Operations

The following table summarizes the results of our operations as a percentage of fee revenue:

(Numbers may not total exactly due to rounding)

	Three Months Ended July 31,
	2016			2015
Fee revenue		100.0	%		100.0	%
Reimbursed out-of-pocket engagement expenses		4.6			4.5
Total revenue		104.6			104.5
Compensation and benefits		70.0			67.1
General and administrative expenses		14.7			14.0
Reimbursed expenses		4.6			4.5
Cost of services		4.5			3.8
Depreciation and amortization		3.0			2.8
Restructuring charges, net		6.5			—
Operating income		1.2			12.3
Net income		1.1	%		8.6	%
Net income attributable to Korn/Ferry International		0.9	%		8.6	%

The following tables summarize the results of our operations by business segment:

(Numbers may not total exactly due to rounding)

	Three Months Ended July 31,
	2016					2015
	Dollars		%			Dollars		%
	(dollars in thousands)
Fee revenue
Executive Search:
North America	$	81,802		21.8	%	$	90,359		33.8	%
EMEA		35,370		9.4			36,090		13.5
Asia Pacific		19,626		5.2			19,215		7.2
Latin America.		9,563		2.5			6,426		2.4
Total Executive Search	$	146,361		39.0			152,090		56.9
Hay Group		174,582		46.5			69,240		25.9
Futurestep		54,678		14.6			46,064		17.2
Total fee revenue		375,621		100.0	%		267,394		100.0	%
Reimbursed out-of-pocket engagement expense		17,312					11,941
Total revenue	$	392,933				$	279,335

	Three Months Ended July 31,
	2016						2015
	Dollars			Margin (1)			Dollars			Margin (1)
	(dollars in thousands)
Operating income
Executive Search:
North America	$	16,468			20.1	%	$	24,145			26.7	%
EMEA		6,027			17.0			6,276			17.4
Asia Pacific		2,102			10.7			2,986			15.5
Latin America.		2,330			24.4			1,508			23.5
Total Executive Search		26,927			18.4			34,915			23.0
Hay Group		(7,743	)		(4.4	)		7,495			10.8
Futurestep		7,513			13.7			6,189			13.4
Corporate		(22,181	)					(15,695	)
Total operating income	$	4,516			1.2	%	$	32,904			12.3	%

(1) Margin calculated as a percentage of fee revenue by business segment.

23

	Three Months Ended July 31, 2016
	Executive Search
	North America			EMEA			Asia Pacific			Latin America			Subtotal			Hay Group			Futurestep			Corporate			Consolidated
	(in thousands)
Fee revenue	$	81,802		$	35,370		$	19,626		$	9,563		$	146,361		$	174,582		$	54,678		$	—		$	375,621
Deferred revenue adjustment due to acquisition		—			—			—			—			—			3,535			—			—			3,535
Adjusted fee revenue	$	81,802		$	35,370		$	19,626		$	9,563		$	146,361		$	178,117		$	54,678		$	—		$	379,156
Total revenue	$	85,425		$	36,249		$	20,180		$	9,614		$	151,468		$	181,508		$	59,957		$	—		$	392,933
Net income																									$	4,068
Other income, net																										(4,259	)
Interest expense, net																										3,061
Equity in earnings of unconsolidated subsidiaries, net																										(79	)
Income tax provision																										1,725
Operating income (loss)	$	16,468		$	6,027		$	2,102		$	2,330		$	26,927		$	(7,743	)	$	7,513		$	(22,181	)		4,516
Depreciation and amortization		830			211			225			114			1,380			8,016			623			1,425			11,444
Other income (loss), net		288			24			87			73			472			235			(2	)		3,554			4,259
Equity in earnings of unconsolidated subsidiaries, net		79			—			—			—			79			—			—			—			79
EBITDA		17,665			6,262			2,414			2,517			28,858			508			8,134			(17,202	)		20,298
Restructuring charges, net		1,706			128			622			360			2,816			21,488			—			216			24,520
Integration/acquisition costs		—			—			—			—			—			4,264			—			3,763			8,027
Deferred revenue adjustment due to acquisition		—			—			—			—			—			3,535			—			—			3,535
Adjusted EBITDA	$	19,371		$	6,390		$	3,036		$	2,877		$	31,674		$	29,795		$	8,134		$	(13,223	)	$	56,380
Adjusted EBITDA margin		23.7	%		18.1	%		15.5	%		30.1	%		21.6	%		16.7	%		14.9	%					14.9	%

	Three Months Ended July 31, 2015
	Executive Search
	North America			EMEA			Asia Pacific			Latin America			Subtotal			Hay Group			Futurestep			Corporate			Consolidated
	(in thousands)
Fee revenue	$	90,359		$	36,090		$	19,215		$	6,426		$	152,090		$	69,240		$	46,064		$	—		$	267,394
Total revenue	$	94,399		$	37,171		$	19,990		$	6,432		$	157,992		$	71,441		$	49,902		$	—		$	279,335
Net income																									$	23,082
Other loss, net																										74
Interest expense, net																										299
Equity in earnings of unconsolidated subsidiaries, net																										(725	)
Income tax provision																										10,174
Operating income (loss)	$	24,145		$	6,276		$	2,986		$	1,508		$	34,915		$	7,495		$	6,189		$	(15,695	)		32,904
Depreciation and amortization		827			365			246			78			1,516			3,748			585			1,574			7,423
Other income (loss), net		32			143			18			239			432			(863	)		—			357			(74	)
Equity in earnings of unconsolidated subsidiaries, net		86			—			—			—			86			—			—			639			725
EBITDA		25,090			6,784			3,250			1,825			36,949			10,380			6,774			(13,125	)		40,978
Integration/acquisition costs		—			—			—			—			—			329			—			345			674
Adjusted EBITDA	$	25,090		$	6,784		$	3,250		$	1,825		$	36,949		$	10,709		$	6,774		$	(12,780	)	$	41,652
Adjusted EBITDA margin		27.8	%		18.8	%		16.9	%		28.4	%		24.3	%		15.5	%		14.7	%					15.6	%

24

Three Months Ended July 31, 2016 Compared to Three Months Ended July 31, 2015

Fee Revenue

Fee Revenue. Fee revenue went up by $108.2 million, or 40%, to $375.6 million in the three months ended July 31, 2016 compared to $267.4 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $8.4 million, or 3%, in the three months ended July 31, 2016 compared to the year-ago quarter. The higher fee revenue was attributable to growth in Hay Group and Futurestep, offset with the decrease in Executive Search. The increase in Hay Group was primarily due to the Legacy Hay acquisition, which was consummated in the third quarter of fiscal 2016.

Executive Search. Executive Search reported fee revenue of $146.4 million, a decrease of $5.7 million, or 4%, in the three months ended July 31, 2016 compared to $152.1 million in the year-ago quarter. As detailed below, Executive Search fee revenue was lower in North America and EMEA, offset by higher fee revenue in the Latin America and Asia Pacific regions in the three months ended July 31, 2016 as compared to the year-ago quarter. The lower fee revenue in Executive Search was mainly due to an 11% decrease in the weighted-average fees billed per engagement, partially offset by a 7% increase in engagements billed during the three months ended July 31, 2016 as compared to the year-ago quarter. The consolidation of our Mexico subsidiary that we obtained control of in the fourth quarter of fiscal 2016 drove a 5% decrease in the weighted-average fees billed per engagement. Exchange rates unfavorably impacted fee revenue by $3.6 million, or 2%, in the three months ended July 31, 2016, when compared to the year-ago quarter.

North America reported fee revenue of $81.8 million, a decrease of $8.6 million, or 10%, in the three months ended July 31, 2016 compared to $90.4 million in the year-ago quarter. North America’s fee revenue was lower due to a 6% decrease in the weighted-average fees billed per engagement and a 4% decrease in the number of engagements billed during the three months ended July 31, 2016 compared to the year-ago quarter. The overall decrease in fee revenue was driven by a decline in the industrial, technology, life sciences/healthcare, and financial services sectors as compared to the year-ago quarter, partially offset by the growth in the consumer goods sector. Exchange rates unfavorably impacted fee revenue by $0.2 million in the three months ended July 31, 2016, when compared to the year-ago quarter.

EMEA reported fee revenue of $35.4 million, a decrease of $0.7 million, or 2%, in the three months ended July 31, 2016 compared to $36.1 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $1.5 million, or 4%, in the three months ended July 31, 2016, when compared to the year-ago quarter. EMEA’s fee revenue was lower due to a 4% decrease in the weighted-average fees billed per engagement, offset by a 2% increase in the number of engagements billed during the three months ended July 31, 2016 compared to the year-ago quarter. The performance in existing offices in Switzerland and France were the primary contributors to the decrease in fee revenue in the three months ended July 31, 2016 compared to the year-ago quarter, offset by an increase in fee revenue in Germany and United Arab Emirates. In terms of business sectors, life sciences/healthcare experienced the largest decline in fee revenue in the three months ended July 31, 2016 as compared to the year-ago quarter, partially offset by an increase in the technology sector.

Asia Pacific reported fee revenue of $19.6 million, an increase of $0.4 million, or 2%, in the three months ended July 31, 2016 compared to $19.2 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $0.5 million, or 3%, in the three months ended July 31, 2016, when compared to the year-ago quarter. The increase in fee revenue was due to a 6% increase in the number of engagements billed, offset by a 3% decrease in the weighted-average fees billed per engagement in the three months ended July 31, 2016 compared to the year-ago quarter. The performance in China, Japan, and India were the primary contributors to the increase in fee revenue in the three months ended July 31, 2016 compared to the year-ago quarter, offset by a decrease in fee revenue in Australia. Financial services and consumer goods were the main sectors contributing to the increase in fee revenue in the three months ended July 31, 2016 as compared to the year-ago quarter, partially offset by a decline in fee revenue in the industrial sector.

Latin America reported fee revenue of $9.6 million, an increase of $3.2 million, or 50%, in the three months ended July 31, 2016 compared to $6.4 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue for Latin America by $1.4 million, or 22%, in the three months ended July 31, 2016, when compared to the year-ago quarter. The increase is due to $4.4 million in fee revenue from our Mexican subsidiary that we began consolidating in the fourth quarter of fiscal 2016 as a result of obtaining control of the entity. The rest of the change primarily relates to an increase in fee revenue in Brazil, offset by lower fee revenues in Venezuela in the three months ended July 31, 2016 compared to the year-ago quarter. Industrial, financial services, consumer goods, and life sciences/healthcare were the main sectors contributing to the growth in fee revenue in the three months ended July 31, 2016 compared to the year-ago quarter.

25

Hay Group. Hay Group reported fee revenue of $174.6 million, an increase of $105.4 million, or 152%, in the three months ended July 31, 2016 compared to $69.2 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $3.4 million, or 5%, compared to the year-ago quarter. The increase in fee revenue was primarily due to the legacy Hay acquisition which was consummated in the third quarter of fiscal 2016. As a result of the Legacy Hay acquisition, consulting fee revenue was higher by $70.5 million in the three months ended July 31, 2016 compared to the year-ago quarter, with the remaining increase generated by product revenue.

Futurestep. Futurestep reported fee revenue of $54.7 million, an increase of $8.6 million, or 19%, in the three months ended July 31, 2016 compared to $46.1 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $1.4 million, or 3%, in the three months ended July 31, 2016. Higher fee revenues in RPO and professional search of $5.4 million and $2.9 million, respectively drove the increase in fee revenue. The increase in fee revenue in professional search was due to a 14% increase in the number of engagements billed in the three months ended July 31, 2016 compared to the year-ago quarter.

Compensation and Benefits

Compensation and benefits expense increased $83.5 million, or 47%, to $263.0 million in the three months ended July 31, 2016 from $179.5 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits expenses by $5.3 million, or 3%, in the three months ended July 31, 2016 compared to the year-ago quarter. The increase in compensation and benefits was primarily due to the Legacy Hay acquisition and $5.3 million in integration/acquisition costs compared to the year-ago quarter. The acquisition was the main factor for increases of $59.1 million, $2.2 million, $1.7 million and $1.1 million in salaries and related payroll taxes, retirement plans, insurance costs and outside contractors, respectively. Also contributing to the increase in compensation and benefits was an increase in the amortization of long-term incentive awards of $2.6 million, $1.3 million in higher stock based compensation and a change in the fair value of vested amounts owed under certain deferred compensation plans of $2.5 million in the three months ended July 31, 2016 compared to the year-ago quarter due to market movements.

Executive Search compensation and benefits expense decreased by $0.7 million, to $98.7 million in the three months ended July 31, 2016 compared to $99.4 million in the year-ago quarter. This decrease was primarily due to lower performance related bonus expense of $7.3 million, partially offset by an increase of $3.3 million in salaries and related payroll expense, $2.0 million in the amortization of long-term incentive awards and $2.3 million in increased compensation expenses associated with our deferred compensation plans during the three months ended July 31, 2016 compared to the year-ago quarter due to market movements. The decrease in performance related bonus expense was principally due to lower fee revenue and profitability. Executive Search compensation and benefits expense, as a percentage of fee revenue, increased to 67% in the three months ended July 31, 2016 from 65% in the year-ago quarter.

Hay Group compensation and benefits expense increased $73.8 million, or 178%, to $115.3 million in the three months ended July 31, 2016 from $41.5 million in the year-ago quarter. The increase in compensation and benefits was primarily due to the Legacy Hay acquisition and $4.0 million in integration/acquisition costs compared to the year-ago quarter. Due to the acquisition, average headcount increased by 297% during the three months ended July 31, 2016 compared to the year-ago quarter, resulting in higher salaries and related payroll taxes, performance related bonus expense, retirement plans and insurance costs of $50.3 million, $7.8 million, $1.7 million and $1.5 million, respectively. Hay Group compensation and benefits expense, as a percentage of fee revenue, increased to 66% in the three months ended July 31, 2016 from 60% in the year-ago quarter.

Futurestep compensation and benefits expense increased $6.7 million, or 21%, to $38.0 million in the three months ended July 31, 2016 from $31.3 million in the year-ago quarter. Salaries and related payroll taxes were the primary drivers which increased by $5.3 million due to a 29% increase in the average headcount in the three months ended July 31, 2016 compared to the year-ago quarter. The higher average headcount was primarily driven by the need to service an increase in fee revenue in both professional search and RPO businesses. Futurestep compensation and benefits expense, as a percentage of fee revenue, was 69% in the three months ended July 31, 2016 compared to 68% in the year-ago quarter.

Corporate compensation and benefits expense increased by $3.7 million, or 51%, to $11.0 million in the three months ended July 31, 2016 from $7.3 million in the year-ago quarter. Excluding $1.3 million of integration/acquisition costs related to the Legacy Hay acquisition, compensation and benefits expense increased $2.4 million in the three months ended July 31, 2016 as compared to the year-ago quarter. This increase was mainly due to an increase of $1.1 million and $0.9 million in stock based compensation and expenses associated with our deferred compensation plans, respectively in the three months ended July 31, 2016 compared to the year-ago quarter.

26

General and Administrative Expenses

General and administrative expenses increased $17.8 million, or 48%, to $55.3 million in the three months ended July 31, 2016 compared to $37.5 million in the three months ended July 31, 2015. Exchange rates favorably impacted general and administrative expenses by $1.4 million, or 4%, during the three months ended July 31, 2016 compared to the year-ago quarter. The increase in general and administrative expenses was primarily due to the Legacy Hay acquisition that took place in the third quarter of fiscal 2016 and $2.1 million in integration/acquisition costs compared to the year-ago quarter. The acquisition was the main factor for increases of $11.3 million, $2.1 million, $1.6 million and $1.2 million in premise and office expense, business development expenses, legal and other professional expenses and travel related expenses, respectively. General and administrative expenses, as a percentage of fee revenue, was 15% in the three months ended July 31, 2016 compared to 14% in the year-ago quarter.

Executive Search general and administrative expenses decreased $0.5 million, or 3%, to $16.1 million in the three months ended July 31, 2016 from $16.6 million in the year-ago quarter. General and administrative expenses decreased due to higher foreign exchange gains of $0.7 million during the three months ended July 31, 2016 compared to the year-ago quarter. Executive Search general and administrative expenses, as a percentage of fee revenue, was 11% in both the three months ended July 31, 2016 and 2015.

Hay Group general and administrative expenses increased $15.4 million, or 177%, to $24.1 million in the three months ended July 31, 2016 compared to $8.7 million in the three months ended July 31, 2015. The increase in general and administrative expenses was primarily due to the Legacy Hay acquisition. The acquisition was the main factor for increases of $10.7 million, $1.6 million, $ 1.3 million and $1.2 million in premise and office expense, business development expenses, legal and other professional expenses and travel related expenses, respectively. Hay Group general and administrative expenses, as a percentage of fee revenue, was 14% in the three months ended July 31, 2016 compared to 13% in the year-ago quarter.

Futurestep general and administrative expenses were $5.6 million and $5.4 million, respectively, in the three months ended July 31, 2016 and 2015. Futurestep general and administrative expenses, as a percentage of fee revenue, was 10% in the three months ended July 31, 2016 compared to 12% in the year-ago quarter.

Corporate general and administrative expenses increased $2.7 million, or 40%, to $9.5 million in the three months ended July 31, 2016 compared to $6.8 million in the year-ago quarter. The increase in general and administrative expenses was driven by $2.4 million in integration/acquisition costs associated with the Legacy Hay acquisition incurred in the three months ended July 31, 2016.

Cost of Services Expense

Cost of services expense consist primarily of non-billable contractor and product costs related to the delivery of various services and products, primarily in Futurestep and Hay Group. Cost of services expense increased $6.7 million, or 66%, to $16.8 million in the three months ended July 31, 2016 compared to $10.1 million in the year-ago quarter. The increase is mainly due to higher fee revenue in Hay Group due to the Legacy Hay acquisition. Cost of services expense, as a percentage of fee revenue, was 4% in both the three months ended July 31, 2016 and 2015.

Depreciation and Amortization Expenses

Depreciation and amortization expenses were $11.4 million, an increase of $4.0 million, or 54%, in the three months ended July 31, 2016 compared to $7.4 million in the year-ago quarter. The increase is mainly due to the Legacy Hay acquisition. The increase relates primarily to technology investments that were made in the current and prior year in software and computer equipment, in addition to increases in leasehold improvements, furniture and fixtures and intangible assets.

27

Restructuring Charges, Net

During the three months ended July 31, 2016, we continued the implementation of the fiscal 2016 restructuring plan in order to integrate the Hay Group entities that were acquired in the prior year by eliminating redundant positions and operational and general and administrative expenses and consolidation of office space. As a result, we recorded $24.5 million of restructuring charges with $11.5 million of severance costs and $13.0 million relating to the consolidation of office space during the three months ended July 31, 2016. No restructuring charges, net were incurred during the three months ended July 31, 2015.

Operating Income

Operating income was $4.5 million in the three months ended July 31, 2016 as compared to operating income of $32.9 million in the year-ago quarter. This decrease in operating income resulted from increases of $83.5 million in compensation and benefits expense (which included $5.3 million in integration/acquisition costs), $24.5 million in restructuring charges, net, $17.8 million in general and administrative expenses (which included $2.1 million in integration/acquisition costs), $6.7 million cost of services expense and $4.0 million of depreciation and amortization expenses. These changes were partially offset by higher fee revenue of $108.2 million during the three months ended July 31, 2016 as compared to the year-ago quarter.

Executive Search operating income decreased $8.0 million to $26.9 million in the three months ended July 31, 2016 as compared to $34.9 million in the year-ago quarter. The decrease in Executive Search operating income was driven by lower fee revenue of $5.7 million and an increase of $2.8 million in restructuring charges, net. Executive Search operating income, as a percentage of fee revenue, was 18% in the three months ended July 31, 2016 as compared to 23% in the year-ago quarter.

Hay Group operating loss was $7.7 million primarily in the three months ended July 31, 2016 as compared to operating income of $7.5 million in the year-ago quarter. The change was primarily driven by increases in compensation and benefits expense (which included $4.0 million in integration/acquisition costs), restructuring charges, net and general and administrative expenses of $73.8 million, $21.5 million and $15.4 million, respectively in the three months ended July 31, 2016 compared to the year-ago quarter. Further contributing the decline was an increase in cost of services expense and depreciation and amortization expense of $5.6 million and $4.3 million, respectively. Partially offsetting these changes in operating loss was an increase in fee revenue of $105.4 million mainly due to the Legacy Hay acquisition. Hay Group operating loss, as a percentage of fee revenue, was 4% in the three months ended July 31, 2016 compared to operating income as a percentage of fee revenue of 11% in the year-ago quarter.

Futurestep operating income increased by $1.3 million to $7.5 million in the three months ended July 31, 2016 from $6.2 million in the year-ago quarter. The increase in Futurestep operating income was primarily due to $8.6 million in higher fee revenue, partially offset by an increase of $6.7 million in compensation and benefits expense in the three months ended July 31, 2016 compared to the year-ago quarter. The change in compensation and benefits expense was driven by higher salaries and related payroll taxes due to an increase in average headcount. Futurestep operating income, as a percentage of fee revenue, was 14% in the three months ended July 31, 2016 compared to 13% in the three months ended July 31, 2015.

Net Income Attributable to Korn Ferry

Net income attributable to Korn Ferry decreased $19.9 million, or 86%, to $3.2 million in the three months ended July 31, 2016 compared to $23.1 million in the year-ago quarter. The decrease was due to higher operating expenses of $142.0 million, offset by an increase in total revenue of $113.6 million and a decrease in income tax provision of $8.4 million due to lower profitability.

Adjusted EBITDA

Adjusted EBITDA increased $14.7 million to $56.4 million in the three months ended July 31, 2016 as compared to $41.7 million in the year-ago quarter. This increase was driven by higher adjusted fee revenue of $111.8 million (which included a $3.5 million deferred revenue adjustment related to the Legacy Hay acquisition) and an increase in the fair value of our marketable securities of $3.2 million in the three months ended July 31, 2016 compared to the year-ago quarter, offset by increases of $78.2 million, $15.7 million and $6.7 million in compensation and benefits expense (excluding integration/acquisition costs), general and administrative expense (excluding integration/acquisition costs) and cost of services expense, respectively. Adjusted EBITDA, as a percentage of adjusted fee revenue, was 15% in the three months ended July 31, 2016 as compared to 16% in the year-ago quarter.

28

Executive Search Adjusted EBITDA was $31.7 million, a decrease of $5.2 million, or 14%, in the three months ended July 31, 2016 as compared to $36.9 million in the three months ended July 31, 2015. This decrease was due to lower fee revenue of $5.7 million, offset by a decrease of $0.7 million in compensation and benefits expense during the three months ended July 31, 2016 compared to the year-ago quarter. The decrease in compensation and benefits expense was driven by lower performance related bonus expense, offset by an increase in salaries and related payroll expense. Executive Search Adjusted EBITDA, as a percentage of fee revenue, was 22% in the three months ended July 31, 2016 as compared to 24% in the year-ago quarter.

Hay Group Adjusted EBITDA increased by $19.1 million to $29.8 million in the three months ended July 31, 2016 as compared to $10.7 million in the year-ago quarter. This increase was due to higher adjusted fee revenue of $108.9 million (which included a $3.5 million deferred revenue adjustment related to Legacy Hay acquisition), offset by an increase of $69.8 million, $15.4 million and $5.6 million in compensation and benefit expense (excluding integration/acquisition costs), general and administrative expenses and cost of services expense, respectively. Hay Group Adjusted EBITDA, as a percentage of adjusted fee revenue, was 17% in the three months ended July 31, 2016 as compared to 15% in the year-ago quarter.

Futurestep Adjusted EBITDA increased by $1.3 million to $8.1 million in the three months ended July 31, 2016 as compared to $6.8 million in the year-ago quarter. The increase in Futurestep Adjusted EBITDA was primarily due to an increase in fee revenue of $8.6 million, offset by an increase of $6.7 million in compensation and benefits expense during the three months ended July 31, 2016 as compared to the year-ago quarter. The increase in compensation and benefits expense was primarily driven by higher salaries and related payroll taxes due to an increase in average headcount. Futurestep Adjusted EBITDA, as a percentage of fee revenue, was 15% in both the three months ended July 31, 2016 and 2015.

Other Income (Loss), Net

Other income, net was $4.3 million in the three months ended July 31, 2016 as compared to other loss, net of $0.1 million in the year-ago quarter. The change was primarily due to the increase in the fair value of our marketable securities which created a gain of $3.9 million and $0.7 million during the three months ended July 31, 2016 and 2015, respectively.

Interest Expense, Net

Interest expense, net primarily relates to our term loan facility and borrowings under our COLI policies, which is partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $3.1 million in the three months ended July 31, 2016 as compared to $0.3 million in the year-ago quarter. The increase was mainly due to interest expense associated with the term loan facility that we entered into in the current quarter to provide enhanced financial flexibility.

Equity in Earnings of Unconsolidated Subsidiaries

Equity in earnings of unconsolidated subsidiaries is comprised of our less than 50% interest in IGroup, LLC, which is engaged in organizing, planning and conducting conferences and training programs throughout the world for directors, chief executive officers, other senior level executives and business leaders, in three months ended July 31, 2016, and also includes our Mexican subsidiary for the three months ended July 31, 2015. In the fourth quarter of fiscal 2016, we obtained control of our Mexico subsidiary and began to consolidate the operations. Equity in earnings was $0.1 million in the three months ended July 31, 2016 as compared to $0.7 million in the three months ended July 31, 2015. The decrease is due to the consolidation of our Mexico subsidiary for the three months ended July 31, 2016, which is now included in operations.

Income Tax Provision

The provision for income tax was $1.7 million in the three months ended July 31, 2016 compared to $10.1 million in the year-ago quarter. This reflects a 30% and 31% effective tax rate in the three months ended July 31, 2016 and 2015, respectively.

29

Net Income Attributable to Non-Controlling Interest

Net income attributable to non-controlling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the consolidated results of operations. In the fourth quarter of fiscal 2016, we obtained control of our Mexico subsidiary and began to consolidate the operations. Net income attributable to non-controlling interest for the three months ended July 31, 2016 was $0.9 million.

Liquidity and Capital Resources

The Company and its Board of Directors endorse a balanced approach to capital allocation. The Company’s first priority is to invest in growth initiatives, such as the hiring of consultants, the continued development of intellectual property and derivative products and services, and the investment in synergistic accretive M&A transactions that earn a return that is superior to the Company’s cost of capital. Next, the Company’s capital allocation approach contemplates the planned return of a portion of excess capital to stockholders, in the form of a regular quarterly dividend, subject to the factors discussed in the “Risk Factors” sections of the Annual Report on Form 10-K for the fiscal year ending April 30, 2016. Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our credit agreement.

On June 15, 2016, we entered into a new senior secured $400 million Credit Agreement with a syndicate of banks and Wells Fargo Bank, National Association as administrative agent, to provide for enhanced financial flexibility and in recognition of the accelerated pace of the Legacy Hay integration. See Note 10 — Long-Term Debt for a description of the new credit facility. We drew down $275 million on the new term loan and used $140 million of the proceeds to pay-off the term loan that was outstanding as of April 30, 2016. The remaining funds are available for working capital and general corporate purposes.

As part of the Legacy Hay acquisition, the Company has committed to a $40 million retention pool (up to $5 million payable within one year of the closing of the acquisition) for certain employees of Legacy Hay subject to certain circumstances. Of the remaining balance, 50% will be payable within 45 days after November 30, 2017 and the remaining 50% will be payable within 45 days after November 30, 2018.

On December 8, 2014, the Board of Directors adopted a dividend policy to distribute, to our stockholders, a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

On December 8, 2014, the Board of Directors also approved an increase in the Company’s stock repurchase program to an aggregate of $150.0 million. Common stock may be repurchased from time to time in open market or privately negotiated transactions at the Company’s discretion subject to market conditions and other factors.

Our performance is subject to the general level of economic activity in the geographic regions and the industries which we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Credit Agreement we entered into on June 15, 2016 will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt incurred in connection with the Legacy Hay acquisition, the retention pool obligations in connection with the Legacy Hay acquisition and dividend payments under our dividend policy during the next twelve months. However, if the national or global economy, credit market conditions, and/or labor markets were to deteriorate in the future, such changes would put negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows, and it might require us to access our existing credit facility to meet our capital needs and/or discontinue our dividend policy.

Cash and cash equivalents and marketable securities were $381.1 million and $414.7 million as of July 31, 2016 and April 30, 2016, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and marketable securities were $195.0 million and $88.9 million at July 31, 2016 and April 30, 2016, respectively. As of July 31, 2016 and April 30, 2016, we held $127.5 million and $129.0 million, respectively of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay fiscal 2017 and 2016 annual bonuses. If

30

these amounts were distributed to the United States, in the form of dividends, we would be subject to additional U.S. income taxes. The Company has a plan to distribute a small portion of the cash held in foreign locations to the United States. No deferred tax liability has been recorded because no additional taxes would arise in connection with such distributions. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds in the three months ended July 31, 2016. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans.

As of July 31, 2016 and April 30, 2016, marketable securities included trading securities of $137.0 million (net of gross unrealized gains of $3.5 million and gross unrealized losses of $0.9 million) and $141.4 million (net of gross unrealized gains of $1.4 million and gross unrealized losses of $2.6 million), respectively, held in trust for settlement of our obligations under certain deferred compensation plans, of which $133.5 million and $130.1 million, respectively, are classified as non-current. Our vested and unvested obligations for which these assets were held in trust totaled $133.9 million and $138.8 million as of July 31, 2016 and April 30, 2016, respectively.

The net increase in our working capital of $128.1 million as of July 31, 2016 compared to April 30, 2016 is primarily attributable to a decrease in compensation and benefits payable and an increase in accounts receivable, offset by decreases in cash and cash equivalents. The decrease in compensation and benefits payable and cash and cash equivalents was primarily due to payment of annual bonuses earned in fiscal 2016 and paid during the first quarter of fiscal 2017 while accounts receivable increased due to an increase in days of sales outstanding which went from 55 days to 67 days (which is consistent with historical experience) from April 30, 2016 to July 31, 2016. Cash used in operating activities was $136.0 million in the three months ended July 31, 2016 compared to $90.2 million in the year-ago quarter.

Cash used in investing activities was $9.8 million in the three months ended July 31, 2016, an increase of $13.6 million, compared to cash provided by investing activities of $3.8 million in the year-ago quarter. Cash used in investing activities was higher primarily due to an increase in the cash used to purchase property and equipment and a payment made on the final working capital settlement related to the Legacy Hay acquisition.

Cash provided by financing activities was $126.6 million in the three months ended July 31, 2016, an increase of $133.0 million, compared to cash used in financing activities of $6.4 million in the year-ago quarter. Cash provided by financing activities increased primarily due to the borrowing of $275.0 million from the new term loan facility in the three months ended July 31, 2016, offset by $140.0 million used to pay-off the term loan that was outstanding as of April 30, 2016. As of July 31, 2016, $150.0 million remained available for common stock repurchases under our stock repurchase program.

Cash Surrender Value of Company Owned Life Insurance Policies, Net of Loans

The Company purchased COLI policies or contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As of July 31, 2016 and April 30, 2016, we held contracts with gross CSV of $178.6 million and $175.7 million, respectively. Since fiscal 2012, we paid the premiums under our COLI contracts from operating cash, and in prior years, we generally borrowed under our COLI contracts to pay related premiums. Such borrowings do not require annual principal repayments, bear interest primarily at variable rates and are secured by the CSV of COLI contracts. Total outstanding borrowings against the CSV of COLI contracts were $68.4 million as of July 31, 2016 and April 30, 2016. At July 31, 2016 and April 30, 2016, the net cash value of these policies was $110.2 million and $107.3 million, respectively.

31

Long-Term Debt

On June 15, 2016, we entered into a senior secured $400 million Credit Agreement (the “Credit Agreement”) with a syndicate of banks and Wells Fargo Bank, National Association as administrative agent ( to provide for enhanced financial flexibility and in recognition of the accelerated pace of the Hay Group integration). The Credit Agreement provides for, among other things: (a) a senior secured term loan facility in an aggregate principal amount of $275 million (the “ Term Facility”); (b) a senior secured revolving credit facility (the “Revolver” and together with the Term Facility, the “Credit Facilities”) in an aggregate principal amount of $125 million, (c) annual term loan amortization of 7.5%, 7.5%, 10.0%, 10.0%, and 10.0%, with the remaining principal due at maturity (d) certain customary affirmative and negative covenants, including a maximum consolidated total leverage ratio (as defined below) and a minimum interest coverage ratio, and (e) an expanded definition of permitted add-backs to Adjusted EBITDA in recognition of the accelerated integration actions referenced above. We drew down $275 million on the new term loan and used $140 million of the proceeds to pay-off the term loan that was outstanding as of April 30, 2016. The remaining funds will be used for working capital and general corporate purposes. As of July 31, 2016, we were in compliance with our debt covenants.

At our option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Facilities may fluctuate between LIBOR plus 1.25% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon our total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated leverage ratio”) at such time. In addition, the Company will be required to pay to the lenders a quarterly fee ranging from 0.20% to 0.35% per annum on the average daily unused amount of the Term Facility, based upon the Company’s consolidated leverage ratio at such time, and fees relating to the issuance of letters of credit.

Both the Revolver and the Term Facility mature on June 15, 2021 and may be prepaid and terminated early by us at any time without premium or penalty (subject to customary LIBOR breakage fees). The Term Facility is payable in quarterly instalments beginning on September 30, 2016. As of July 31, 2016, $275 million was outstanding under the Term Facility compared to $140 million as of April 30, 2016, under the previous Facility. During the three months ended July 31, 2016, the average rate on the Term Facility was 2.40%

As of July 31, 2016 and April 30, 2016, we had no borrowings under the Revolver. At July 31, 2016 and April 30, 2016, there was $2.8 million of standby letters of credit issued under our long-term debt arrangements. We had a total of $5.6 million and $6.4 million of standby letters of credits with other financial institutions as of July 31, 2016 and April 30, 2016, respectively.

We are not aware of any other trends, demands or commitments that would materially affect liquidity or those that relate to our resources.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and have not entered into any transactions involving unconsolidated, special purpose entities. We had no material changes in contractual obligations as of July 31, 2016, as compared to those disclosed in our table of contractual obligations included in our Annual Report.

Critical Accounting Policies

Preparation of this Quarterly Report on Form 10-Q requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions and changes in the estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. In preparing our interim consolidated financial statements and accounting for the underlying transactions and balances, we apply our accounting policies as disclosed in the notes to our consolidated financial statements. We consider the policies related to revenue recognition, performance related bonuses, restructuring, deferred compensation, carrying values of receivables, goodwill, intangible assets, fair value of contingent consideration, share-based payments and recoverability of deferred income taxes as critical to an understanding of our interim consolidated financial statements because their application places the most significant demands on management’s judgment and estimates. Specific risks for these critical accounting policies are described in our Form 10-K filed with the Securities Exchange Commission. There have been no material changes in our critical accounting policies since fiscal 2016.

32

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of our global operating activities, we are exposed to certain market risks, including foreign currency exchange fluctuations and fluctuations in interest rates. We manage our exposure to these risks in the normal course of our business as described below.

Foreign Currency Risk

Substantially all our foreign subsidiaries’ operations are measured in their local currencies. Assets and liabilities are translated into U.S. dollars at the rates of exchange in effect at the end of each reporting period and revenue and expenses are translated at average rates of exchange during the reporting period. Resulting translation adjustments are reported as a component of accumulated other comprehensive loss, net on our consolidated balance sheets.

Transactions entered in the ordinary course of business, denominated in a currency other than the reporting entity’s functional currency, may give rise to foreign currency gains or losses that impact our results of operations. Historically, we have not realized significant foreign currency gains or losses on such transactions. Foreign currency gains, on an after tax basis, included in net income were $1.0 million in the three months ended July 31, 2016 as compared to foreign currency losses, on an after tax basis, included in net income of $0.2 million in the three months ended July 31, 2015.

Our exposure to foreign currency exchange rates is primarily driven by fluctuations involving the following currencies – U.S. dollars, Euro, Pound Sterling, Swiss Franc, Brazilian Real, Japanese Yen, Australian dollar and Chinese Yuan. Based on balances exposed to fluctuation in exchange rates between these currencies as of July 31, 2016, a 10% increase or decrease equally in the value of these currencies would have resulted in a gain or loss of $6.7 million. Beginning in the third quarter of fiscal 2016, we established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures which increased as a result of the Legacy Hay acquisition. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to Accounting Standards Codification 815, Derivatives and Hedging.

Interest Rate Risk

Our exposure to interest rate risk is limited to our Term Facility and borrowings against the CSV of COLI contracts. As of July 31, 2016, there was $275.0 million outstanding under the Term Facility. At our option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Facilities may fluctuate between LIBOR plus 1.25% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon the Company’s total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated leverage ratio”) at such time. In addition, the Company is required to pay to the lenders a quarterly fee ranging from 0.20% to 0.35% per annum on the average daily unused amount of the Term Facility, based upon the Company’s consolidated leverage ratio at such time, and fees relating to the issuance of letters of credit. A 100 basis point increase in LIBOR rates would have increased our interest expense by approximately $0.5 million for the three months ended July 31, 2016. During the three months ended July 31, 2016, the average interest rate on the new term loan was 2.40%. We had no borrowings under the Revolver as of July 31, 2016. We had $68.4 million of borrowings against the CSV of COLI contracts as of July 31, 2016 and April 30, 2016, bearing interest primarily at variable rates. The risk of fluctuations in these variable rates is minimized by the fact that we receive a corresponding adjustment to our borrowed funds crediting rate which has the effect of increasing the CSV on our COLI contracts.

33

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

Based on their evaluation of our disclosure controls and procedures conducted as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective.

(b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting during the three months ended July 31, 2016 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

34

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company has been and is involved in litigation incidental to its business. The Company is currently not a party to any litigation, which, if resolved adversely against the Company, would, in the opinion of management, after consultation with legal counsel, have a material adverse effect on the Company’s business, financial position or results of operations.

Item 1A. Risk Factors

In our Form 10-K for the year ended April 30, 2016, we described material risk factors facing our business. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. As of the date of this report, there have been no material changes to the risk factors described in our Form 10-K.

Item 2. Unregistered Sale of Equity Securities, Use of Proceeds and Issuers Purchases of Equity Securities

Issuer Purchases of Equity Securities

The following table summarizes common stock repurchased by us during the quarter ended July 31, 2016:

	Shares Purchased(1)		Average Price Paid Per Share		Shares Purchased as Part of Publicly- Announced Programs (2)		Approximate Dollar Value of Shares That May Yet be Purchased Under the Programs (2)
May 1, 2016— May 31, 2016		659	$	27.01		—	$150.0 million
June 1, 2016— June 30, 2016		7,873	$	28.80		—	$150.0 million
July 1, 2016— July 31, 2016		177,222	$	22.10		—	$150.0 million
Total		185,754	$	22.40		—	$150.0 million

(1) Represents withholding of a portion of restricted shares to cover taxes on vested restricted shares.

(2) On December 8, 2014, the Board of Directors approved an increase in the Company’s stock repurchase program to an aggregate of $150.0 million. The shares can be repurchased in open market transactions or privately negotiated transactions at the Company’s discretion.

Our senior secured credit agreement, dated June 15, 2016, permits us to pay dividends to our stockholders and make share repurchases so long as our pro forma leverage ratio, defined as, the ratio of consolidated funded indebtedness to consolidated adjusted EBITDA, is no greater than 2.50 to 1.00, and our pro forma domestic liquidity is at least $50.0 million.

35

Item 6. Exhibits

Exhibit Number	Description
10.1*+	Korn/Ferry International Long Term Performance Unit Plan, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed July 14, 2016.
10.2*+	Korn/Ferry International Long Term Performance Unit Plan Form of Unit Award Agreement, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed July 14, 2016.
10.3+	Credit Agreement, dated June 15, 2016, by and among, Wells Fargo Bank, National Association, as administrative agent and other lender parties thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 17, 2016.
31.1	Chief Executive Officer Certification pursuant to Rule 13a-14(a) under the Exchange Act.
31.2	Chief Financial Officer Certification pursuant to Rule 13a-14(a) under the Exchange Act.
32.1	Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

* Management contract, compensatory plan or arrangement.

+ Incorporated herein by reference.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KORN/FERRY INTERNATIONAL
By:	/s/ Robert P. Rozek
	Robert P. Rozek
	Executive Vice President, Chief Financial Officer, and Chief Corporate Officer

Date: September 9, 2016

37

EXHIBIT INDEX

Exhibit Number	Description
10.1*+	Korn/Ferry International Long Term Performance Unit Plan, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed July 14, 2016.
10.2*+	Korn/Ferry International Long Term Performance Unit Plan Form of Unit Award Agreement, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed July 14, 2016.
10.3+	Credit Agreement, dated June 15, 2016, by and among, Wells Fargo Bank, National Association, as administrative agent and other lender parties thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 17, 2016.
31.1	Chief Executive Officer Certification pursuant to Rule 13a-14(a) under the Exchange Act.
31.2	Chief Financial Officer Certification pursuant to Rule 13a-14(a) under the Exchange Act.
32.1	Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

* Management contract, compensatory plan or arrangement.

+ Incorporated herein by reference.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Gary D. Burnison, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Korn/Ferry International;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ GARY D. BURNISON
	Name:	Gary D. Burnison
	Title:	Chief Executive Officer and President

Date: September 9, 2016

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Robert P. Rozek, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Korn/Ferry International;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ ROBERT P. ROZEK
	Name:	Robert P. Rozek
	Title:	Executive Vice President, Chief Financial Officer, and Chief Corporate Officer

Date: September 9, 2016

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officers of Korn/Ferry International, a Delaware corporation (the “Company”), hereby certify that, to the best of their knowledge:

(a) the Quarterly Report on Form 10-Q for the quarter ended July 31, 2016 (the “Report”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: September 9, 2016

By:	/s/ GARY D. BURNISON
	Name:	Gary D. Burnison
	Title:	Chief Executive Officer and President
By:	/s/ ROBERT P. ROZEK
	Name:	Robert P. Rozek
	Title:	Executive Vice President, Chief Financial Officer, and Chief Corporate Officer

XML

Document and Entity Information - shares	3 Months Ended
	Jul. 31, 2016	Sep. 06, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 31, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	KFY
Entity Registrant Name	KORN FERRY INTERNATIONAL
Entity Central Index Key	0000056679
Current Fiscal Year End Date	--04-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,901,738

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
ASSETS
Cash and cash equivalents	$ 244,073	$ 273,252
Marketable securities	3,475	11,338
Receivables due from clients, net of allowance for doubtful accounts of $12,674 and $11,292, respectively	341,984	315,975
Income taxes and other receivables	28,672	20,579
Prepaid expenses and other assets	53,196	43,130
Total current assets	671,400	664,274
Marketable securities, non-current	133,502	130,092
Property and equipment, net	99,980	95,436
Cash surrender value of company owned life insurance policies, net of loans	110,195	107,296
Deferred income taxes, net	26,232	27,163
Goodwill	587,615	590,072
Intangible assets, net	228,992	233,027
Investments and other assets	67,447	51,240
Total assets	1,925,363	1,898,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	33,719	26,634
Income taxes payable	4,351	8,396
Compensation and benefits payable	147,617	266,211
Term loan	19,754	30,000
Other accrued liabilities	149,865	145,023
Total current liabilities	355,306	476,264
Deferred compensation and other retirement plans	217,957	216,113
Term loan, non-current	251,038	110,000
Deferred tax liabilities	13,664	5,088
Other liabilities	51,056	43,834
Total liabilities	889,021	851,299
Stockholders' equity:
Common stock: $0.01 par value, 150,000 shares authorized, 70,576 and 69,723 shares issued and 57,898 and 57,272 shares outstanding, respectively	705,792	702,098
Retained earnings	398,412	401,113
Accumulated other comprehensive loss, net	(70,577)	(57,911)
Total Korn/Ferry International stockholders' equity	1,033,627	1,045,300
Noncontrolling interest	2,715	2,001
Total stockholders' equity	1,036,342	1,047,301
Total liabilities and stockholders' equity	$ 1,925,363	$ 1,898,600

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Allowance for doubtful accounts	$ 12,674	$ 11,292
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	70,576,000	69,723,000
Common stock, shares outstanding	57,898,000	57,272,000

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Fee revenue	$ 375,621	$ 267,394
Reimbursed out-of-pocket engagement expenses	17,312	11,941
Total revenue	392,933	279,335
Compensation and benefits	262,967	179,456
General and administrative expenses	55,342	37,491
Reimbursed expenses	17,312	11,941
Cost of services	16,832	10,120
Depreciation and amortization	11,444	7,423
Restructuring charges, net	24,520
Total operating expenses	388,417	246,431
Operating income	4,516	32,904
Other income (loss), net	4,259	(74)
Interest expense, net	(3,061)	(299)
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries	5,714	32,531
Equity in earnings of unconsolidated subsidiaries, net	79	725
Income tax provision	1,725	10,174
Net income	4,068	23,082
Net income attributable to noncontrolling interest	(860)
Net income attributable to Korn/Ferry International	$ 3,208	$ 23,082
Earnings per common share attributable to Korn/Ferry International:
Basic	$ 0.06	$ 0.46
Diluted	$ 0.06	$ 0.46
Weighted-average common shares outstanding:
Basic	56,189	49,493
Diluted	56,576	50,014
Cash dividends declared per share	$ 0.10	$ 0.10

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Net income	$ 4,068	$ 23,082
Other comprehensive (loss) income:
Foreign currency translation adjustments	(13,274)	(15,632)
Deferred compensation and pension plan adjustments, net of tax	462	447
Unrealized losses on marketable securities, net of tax		(4)
Comprehensive (loss) income	(8,744)	7,893
Less: comprehensive income attributable to noncontrolling interest	(714)
Comprehensive (loss) income attributable to Korn/Ferry International	$ (9,458)	$ 7,893

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Cash flows from operating activities:
Net income	$ 4,068	$ 23,082
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	11,444	7,423
Stock-based compensation expense	4,915	3,691
Provision for doubtful accounts	2,577	2,068
Gain on cash surrender value of life insurance policies	(2,498)	(2,494)
Gain on marketable securities	(3,915)	(665)
Deferred income taxes	5,410	5,124
Change in other assets and liabilities:
Deferred compensation	(5,866)	(1,820)
Receivables due from clients	(28,586)	(13,058)
Income tax and other receivables	(8,093)	1,145
Prepaid expenses and other assets	(10,066)	(4,869)
Investment in unconsolidated subsidiaries	(79)	(725)
Income taxes payable	(4,346)	(1,990)
Accounts payable and accrued liabilities	(93,866)	(96,737)
Other	(7,137)	(10,368)
Net cash used in operating activities	(136,038)	(90,193)
Cash flows from investing activities:
Purchase of property and equipment	(15,079)	(5,485)
Cash paid for acquisition, net of cash acquired	(2,880)
Purchase of marketable securities	(5,430)	(9,116)
Proceeds from sales/maturities of marketable securities	13,764	16,364
Premium on company-owned life insurance policies	(401)	(404)
Proceeds from life insurance policies		1,659
Dividends received from unconsolidated subsidiaries	230	806
Net cash (used in) provided by investing activities	(9,796)	3,824
Cash flows from financing activities:
Proceeds from term loan facility	275,000
Principal payment on term loan facility	(140,000)
Payment of contingent consideration from acquisition	(1,070)
Purchase of common stock	(4,161)	(6,573)
Proceeds from issuance of common stock upon exercise of employee stock options and in connection with an employee stock purchase plan	2,430	2,379
Tax benefit related to stock-based compensation	332	4,064
Dividends paid to shareholders	(5,909)	(5,115)
Payments on life insurance policy loans		(1,151)
Net cash provided by (used in) financing activities	126,622	(6,396)
Effect of exchange rate changes on cash and cash equivalents	(9,967)	(11,559)
Net decrease in cash and cash equivalents	(29,179)	(104,324)
Cash and cash equivalents at beginning of period	273,252	380,838
Cash and cash equivalents at end of period	$ 244,073	$ 276,514

XML

Organization and Summary of Significant Accounting Policies

3 Months Ended

Jul. 31, 2016

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Nature of Business

Korn/Ferry International, a Delaware corporation (the “Company”), and its subsidiaries are engaged in the business of providing talent management solutions, including executive search on a retained basis, recruitment for non-executive professionals, recruitment process outsourcing and leadership & talent consulting services. The Company’s worldwide network of 128 offices in 52 countries enables it to meet the needs of its clients in all industries.

Basis of Consolidation and Presentation

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended April 30, 2016 for the Company and its wholly and majority owned/controlled domestic and international subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements conform with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and prevailing practice within the industry. The consolidated financial statements include all adjustments, consisting of normal recurring accruals and any other adjustments that management considers necessary for a fair presentation of the results for these periods. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year.

Investments in affiliated companies, which are 50% or less owned and where the Company exercises significant influence over operations, are accounted for using the equity method.

The Company considers events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.

Use of Estimates and Uncertainties

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates, and changes in estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. The most significant areas that require management judgment are revenue recognition, restructuring, deferred compensation, annual performance related bonuses, evaluation of the carrying value of receivables, goodwill and other intangible assets, fair value of contingent consideration, share-based payments and the recoverability of deferred income taxes.

Revenue Recognition

Substantially all fee revenue is derived from fees for professional services related to executive search performed on a retained basis, recruitment for non-executive professionals, recruitment process outsourcing, people and organizational advisory services and the sale of productized services. Fee revenue from executive search activities and recruitment for non-executive professionals is generally one-third of the estimated first year compensation of the placed executive or non-executive professional, as applicable, plus a percentage of the fee to cover indirect engagement related expenses. The Company generally recognizes such revenue on a straight-line basis over a three-month period, commencing upon client acceptance, as this is the period over which the recruitment services are performed. Fees earned in excess of the initial contract amount are recognized upon completion of the engagement, which reflect the difference between the final actual compensation of the placed executive and the estimate used for purposes of the previous billings. Since the initial contract fees are typically not contingent upon placement of a candidate, our assumptions primarily relate to establishing the period over which such service is performed. These assumptions determine the timing of revenue recognition and profitability for the reported period. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved. In addition to recruitment for non-executive professionals, Futurestep provides recruitment process outsourcing (“RPO”) services and fee revenue is recognized as services are rendered and/or as milestones are achieved. Fee revenue from Hay Group is recognized as services are rendered for consulting engagements and other time based services, measured by total hours incurred to the total estimated hours at completion. It is possible that updated estimates for the consulting engagement may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate. Hay Group revenue is also derived from the sale of productized services, which includes revenue from licenses and from the sale of products. Revenue from licenses is recognized using a straight-line method over the term of the contract (generally 12 months). Under the fixed term licenses, the Company is obligated to provide the licensee with access to any updates to the underlying intellectual property that are made by the Company during the term of the license. Once the term of the agreement expires, the client’s right to access or use the intellectual property expires and the Company has no further obligations to the client under the license agreement. Revenue from perpetual licenses is recognized when the license is sold since the Company’s only obligation is to provide the client access to the intellectual property but is not obligated to provide maintenance, support, updates or upgrades. Products sold by the Company mainly consist of books and automated services covering a variety of topics including performance management, team effectiveness, and coaching and development. The Company recognizes revenue for its products when the product has been sold or shipped in the case of books. As of July 31, 2016 and April 30, 2016, the Company included deferred revenue of $88.9 million and $95.9 million, respectively, in other accrued liabilities.

Allowance for Doubtful Accounts

An allowance is established for doubtful accounts by taking a charge to general and administrative expenses. The amount of the allowance is based on historical loss experience, assessment of the collectability of specific accounts, as well as expectations of future collections based upon trends and the type of work for which services are rendered. After the Company exhausts all collection efforts, the amount of the allowance is reduced for balances identified as uncollectible.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of July 31, 2016 and April 30, 2016, the Company’s investments in cash equivalents, consist of money market funds for which market prices are readily available.

Marketable Securities

The Company currently has investments in mutual funds that are classified as trading securities based upon management’s intent and ability to hold, sell or trade such securities. The classification of the investments in mutual funds is assessed upon purchase and reassessed at each reporting period. The investments in mutual funds (for which market prices are readily available) are held in trust to satisfy obligations under the Company’s deferred compensation plans (see Note 6 — Financial Instruments). Such investments are based upon the employees’ investment elections in their deemed accounts in the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (“ECAP”) from a pre-determined set of securities and the Company invests in marketable securities to mirror these elections. These investments are recorded at fair value and are classified as marketable securities in the accompanying consolidated balance sheets. The investments that the Company may sell within the next twelve months are carried as current assets. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis, dividends are recorded as earned on the ex-dividend date. Interest and dividend income are recorded in the accompanying consolidated statements of income in other income (loss), net.

Foreign Currency Forward Contracts Not Designated as Hedges

Beginning in the third quarter of fiscal 2016, the Company established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures which increased as a result of the Hay Group acquisition. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to Accounting Standards Codification 815, Derivatives and Hedging. Accordingly, the fair value of these contracts are recorded as of the end of the reporting period in the accompanying consolidated balance sheets, while the change in fair value is recorded to the accompanying consolidated statements of income.

Fair Value of Financial Instruments

Fair value is the price the Company would receive to sell an asset or transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities recorded or disclosed at fair value, the Company determines the fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, the fair value is based upon the quoted market price of similar assets. The fair values are assigned a level within the fair value hierarchy as defined below:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

As of July 31, 2016 and April 30, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis. These included cash, cash equivalents, accounts receivable, marketable securities and foreign currency forward contracts. The carrying amount of cash, cash equivalents and accounts receivable approximates fair value due to the short maturity of these instruments. The fair values of marketable securities classified as trading are obtained from quoted market prices, and the fair values of foreign currency forward contracts are obtained from a third party, which are based on quoted prices or market prices for similar financial instruments.

Business Acquisitions

Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). Results of the annual impairment test performed as of January 31, 2016, indicated that the fair value of each reporting unit exceeded its carrying amount and no reporting units were at risk of failing the impairment test. As a result, no impairment charge was recognized. There were no indicators of impairment as of July 31, 2016 and April 30, 2016 that would have required further testing.

Intangible assets primarily consist of customer lists, non-compete agreements, proprietary databases, intellectual property and trademarks and are recorded at their estimated fair value at the date of acquisition and are amortized in a pattern in which the asset is consumed if that pattern can be reliably determined, or using the straight-line method over their estimated useful lives which range from one to 24 years. For intangible assets subject to amortization, an impairment loss is recognized if the carrying amount of the intangible assets is not recoverable and exceeds fair value. The carrying amount of the intangible assets is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset. Intangible assets with indefinite lives are not amortized, but are reviewed annually for impairment or more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying amount. As of July 31, 2016 and April 30, 2016, there were no indicators of impairment with respect to the Company’s intangible assets.

Compensation and Benefits Expense

Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and administrative and support personnel. The most significant portions of this expense are salaries and the amounts paid under the annual performance related bonus plan to employees. The portion of the expense applicable to salaries is comprised of amounts earned by employees during a reporting period. The portion of the expenses applicable to annual performance related bonuses refers to the Company’s annual employee performance related bonus with respect to a fiscal year, the amount of which is communicated and paid to each eligible employee following the completion of the fiscal year.

Each quarter, management makes its best estimate of its annual performance related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by executive search consultants and revenue and other performance metrics for Hay Group and Futurestep consultants), the level of engagements referred by a fee earner in one line of business to a different line of business, Company performance including profitability, competitive forces and future economic conditions and their impact on the Company’s results. At the end of each fiscal year, annual performance related bonuses take into account final individual consultant productivity (including referred work), Company results including profitability, the achievement of strategic objectives and the results of individual performance appraisals, and the current economic landscape. Accordingly, each quarter the Company reevaluates the assumptions used to estimate annual performance related bonus liability and adjusts the carrying amount of the liability recorded on the consolidated balance sheet and reports any changes in the estimate in current operations.

Because annual performance-based bonuses are communicated and paid only after the Company reports its full fiscal year results, actual performance-based bonus payments may differ from the prior year’s estimate. Such changes in the bonus estimate historically have been immaterial and are recorded in current operations in the period in which they are determined. The performance related bonus expense was $42.4 million and $41.8 million during the three months ended July 31, 2016 and 2015, respectively, included in compensation and benefits expense in the consolidated statements of income.

Other expenses included in compensation and benefits expense are due to changes in deferred compensation and pension plan liabilities, changes in cash surrender value (“CSV”) of company owned life insurance (“COLI”) contracts, amortization of stock compensation awards, payroll taxes and employee insurance benefits.

Restructuring Charges, Net

The Company accounts for its restructuring charges as a liability when the obligations are incurred and records such charges at fair value. Such charges included one-time employee termination benefits and the cost to terminate an office lease including remaining lease payments. Changes in the estimates of the restructuring charges are recorded in the period the change is determined.

Stock-Based Compensation

The Company has employee compensation plans under which various types of stock-based instruments are granted. These instruments principally include restricted stock units, restricted stock, stock options and an Employee Stock Purchase Plan (“ESPP”). The Company recognizes compensation expense related to restricted stock units, restricted stock and the estimated fair value of stock options and stock purchases under the ESPP on a straight-line basis over the service period for the entire award.

Recently Adopted Accounting Standards

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued guidance simplifying the presentation of debt issue costs. The guidance requires debt issuance costs related to a debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, rather than being classified as an asset. The Company adopted this guidance during the three months ended July 31, 2016 and as a result, $4.2 million of unamortized debt issuance costs associated with its senior secured Credit Agreement were classified as a direct deduction to the term loan as of July 31, 2016, of which $0.9 million was recorded to term loan, current, and $3.3 million was recorded to term loan, non-current. The adoption did not have a material impact on the consolidated financial statements as of April 30, 2016.

In September 2015, the FASB issued guidance requiring an acquirer to recognize adjustments to provisional amounts recorded in an acquisition that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer is required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The acquirer is also required to present separately on the face of the income statement or disclose in the footnotes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date. The Company adopted this guidance during the three months ended July 31, 2016 and the adoption did not have an impact on the financial statements of the Company.

Recently Proposed Accounting Standards

In May 2014, the FASB issued guidance that supersedes revenue recognition requirements regarding contracts with customers to transfer goods or services or for the transfer of nonfinancial assets. Under the new guidance, entities are required to recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis to be performed on transactions to determine when and how revenue is recognized. In July 2015, the FASB decided to approve a one-year deferral of the effective date as well as providing an option to early adopt the standard on the original effective date. This new guidance is effective for fiscal years and interim periods within those annual years beginning after December 15, 2017 as opposed to the original effective date of December 15, 2016. The Company will adopt this guidance in its fiscal year beginning May 1, 2018. The Company is currently evaluating the effect the guidance will have on our financial condition and results of operations.

In January 2016, the FASB issued guidance on the classification and measurement of financial instruments, which requires that (i) all equity investments, other than equity-method investments, in unconsolidated entities, generally be measured at fair value through earnings and (ii) when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk, be recognized separately in other comprehensive income. Additionally, it changes the disclosure requirements for financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, with early adoption permitted for certain provisions. The Company is currently evaluating the effect the guidance will have on the consolidated financial statements.

In February 2016, the FASB issued guidance on accounting for leases that generally requires all leases to be recognized in the consolidated balance sheet. The provisions of the guidance are effective for fiscal years beginning after December 15, 2018; early adoption is permitted. The provisions of the guidance are to be applied using a modified retrospective approach. The Company is currently evaluating the effect that this guidance will have on the consolidated financial statements.

In March 2016, the FASB issued guidance on accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Furthermore, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The guidance also allows companies to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifying that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity in the consolidated statements of cash flows and provides an accounting policy election to account for forfeitures as they occur. The provisions of the guidance are effective for fiscal years beginning after December 15, 2016; early adoption is permitted. The Company is currently evaluating the effect that this guidance will have on the consolidated financial statements.

XML

Basic and Diluted Earnings Per Share

3 Months Ended

Jul. 31, 2016

Basic and Diluted Earnings Per Share

2. Basic and Diluted Earnings Per Share

Accounting Standards Codification 260, Earnings Per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends prior to vesting as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant to certain employees under our restricted stock agreements, grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities. Therefore, we are required to apply the two-class method in calculating earnings per share. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.

Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net earnings attributable to common stockholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding options or other contracts to issue common stock as if they were exercised or converted.

During the three months ended July 31, 2016 and 2015, all shares of outstanding options were included in the computation of diluted earnings per share. During both the three months ended July 31, 2016 and 2015, restricted stock awards of 0.5 million were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.

The following table summarizes basic and diluted earnings per common share attributable to common stockholders:

	Three Months Ended July 31,
	2016		2015
	(in thousands, except per share data)
Net income attributable to Korn/Ferry International	$	3,208	$	23,082
Less: distributed and undistributed earnings to nonvested restricted stockholders		44		224
Basic net earnings attributable to common stockholders		3,164		22,858
Add: undistributed earnings to nonvested restricted stockholders		—		176
Less: reallocation of undistributed earnings to nonvested restricted stockholders		—		174
Diluted net earnings attributable to common stockholders	$	3,164	$	22,860
Weighted-average common shares outstanding:
Basic weighted-average number of common shares outstanding		56,189		49,493
Effect of dilutive securities:
Restricted stock		316		452
Stock options		60		66
ESPP		11		3
Diluted weighted-average number of common shares outstanding		56,576		50,014
Net earnings per common share:
Basic earnings per share	$	0.06	$	0.46
Diluted earnings per share	$	0.06	$	0.46

XML

Stockholders' Equity

3 Months Ended

Jul. 31, 2016

Stockholders' Equity

3. Stockholders’ Equity

The following table summarizes the changes in stockholders’ equity for the three months ended July 31, 2016:

	Total Korn/Ferry International Stockholders’ Equity			Noncontrolling Interest			Total Stockholders’ Equity
	(in thousands)
Balance as of April 30, 2016	$	1,045,300		$	2,001		$	1,047,301
Comprehensive income (loss):
Net income		3,208			860			4,068
Foreign currency translation adjustments		(13,128	)		(146	)		(13,274	)
Deferred compensation and pension plan adjustments, net of tax		462			—			462
Dividends declared		(5,909	)		—			(5,909	)
Purchase of stock		(4,161	)		—			(4,161	)
Issuance of stock		2,784			—			2,784
Stock-based compensation		4,739			—			4,739
Tax benefit from exercise of stock options and vesting of restricted stock		332			—			332
Balance as of July 31, 2016	$	1,033,627		$	2,715		$	1,036,342

XML

Comprehensive (Loss) Income

3 Months Ended

Jul. 31, 2016

Comprehensive (Loss) Income

4. Comprehensive (Loss) Income

Comprehensive (loss) income is comprised of net income and all changes to stockholders’ equity, except those changes resulting from investments by stockholders (changes in paid in capital) and distributions to stockholders (dividends) and is reported in the accompanying consolidated statements of comprehensive (loss)/income. Accumulated other comprehensive loss, net of taxes, is recorded as a component of stockholders’ equity.

The components of accumulated other comprehensive loss were as follows:

	July 31, 2016			April 30, 2016
	(in thousands)
Foreign currency translation adjustments	$	(49,467	)	$	(36,339	)
Deferred compensation and pension plan adjustments, net of tax		(21,110	)		(21,572	)
Accumulated other comprehensive loss, net	$	(70,577	)	$	(57,911	)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the three months ended July 31, 2016:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Marketable Securities		Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2016	$	(36,339	)	$	(21,572	)	$	—	$	(57,911	)
Unrealized losses arising during the period		(13,128	)		—			—		(13,128	)
Reclassification of realized net losses to net income		—			462			—		462
Balance as of July 31, 2016	$	(49,467	)	$	(21,110	)	$	—	$	(70,577	)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the three months ended July 31, 2015:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Marketable Securities			Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2015	$	(20,919	)	$	(19,708	)	$	4		$	(40,623	)
Unrealized losses arising during the period		(15,632	)		—			(4	)		(15,636	)
Reclassification of realized net losses to net income		—			447			—			447
Balance as of July 31, 2015	$	(36,551	)	$	(19,261	)	$	—		$	(55,812	)

(1) The tax effect on the reclassifications of realized net losses was $0.3 million for both the three months ended July 31, 2016 and 2015.

XML

Employee Stock Plans

3 Months Ended

Jul. 31, 2016

Employee Stock Plans

5. Employee Stock Plans

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of income for the periods indicated:

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Restricted stock	$	4,739		$	3,554
ESPP		176			120
Stock options		—			17
Total stock-based compensation expense, pre-tax		4,915			3,691
Tax benefit from stock-based compensation expense		(1,484	)		(1,154	)
Total stock-based compensation expense, net of tax	$	3,431		$	2,537

Stock Incentive Plans

At the Company’s 2012 Annual Meeting of Stockholders, held on September 27, 2012, the Company’s stockholders approved an amendment and restatement to the Korn/Ferry International Amended and Restated 2008 Stock Incentive Plan (the 2012 amendment and restatement being the “Second A&R 2008 Plan”), which among other things, increased the current maximum number of shares that may be issued under the plan to 5,700,000 shares, subject to certain changes in the Company’s capital structure and other extraordinary events. The Second A&R 2008 Plan provides for the grant of awards to eligible participants, designated as either nonqualified or incentive stock options, restricted stock and restricted stock units, any of which may be performance-based or market-based, and incentive bonuses, which may be paid in cash or a combination thereof. Under the Second A&R 2008 Plan, the ability to issue full-value awards is limited by requiring full-value stock awards to count 1.91 times as much as stock options.

Restricted Stock

The Company grants time-based restricted stock awards to executive officers and other senior employees generally vesting over a three to four year period. In addition, certain key management members typically receive time-based restricted stock awards upon commencement of employment and may receive them annually in conjunction with the Company’s performance review. Time-based restricted stock awards are granted at a price equal to fair value, which is determined based on the closing price of the Company’s common stock on the grant date. The Company recognizes compensation expense for time-based restricted stock awards on a straight-line basis over the vesting period.

The Company also grants market-based and performance-based restricted stock units to executive officers and other senior employees. The market-based units vest after three years depending upon the Company’s total stockholder return over the three-year performance period relative to other companies in its selected peer group. The fair value of these market-based restricted stock units are determined by using extensive market data that is based on historical Company and peer group information. The Company recognizes compensation expense for market-based restricted stock units on a straight-line basis over the vesting period.

Performance-based restricted stock units vest after three years depending upon the Company meeting certain objectives that are set at the time the restricted stock unit is issued. Performance-based restricted stock units are granted at a price equal to the fair value, which is determined based on the closing price of the Company’s common stock on the grant date. The Company recognizes compensation expense for performance-based restricted stock units on a straight-line basis over the vesting period. At the end of each reporting period, the Company estimates the number of restricted stock units expected to vest, based on the probability that certain performance objectives will be met, exceeded, or fall below target levels, and the Company takes into account these estimates when calculating the expense for the period.

Restricted stock activity during the three months ended July 31, 2016 is summarized below:

	Shares			Weighted- Average Grant Date Fair Value
	(in thousands, except per share data)
Non-vested, April 30, 2016		1,506		$	34.12
Granted		718		$	19.89
Vested		(666	)	$	21.80
Forfeited/expired		(11	)	$	26.35
Non-vested, July 31, 2016		1,547		$	32.87

As of July 31, 2016, there were 0.6 million shares and 0.1 million shares outstanding relating to market-based and performance-based restricted stock units, respectively, with total unrecognized compensation totaling $11.7 million and $9.3 million, respectively.

As of July 31, 2016, there was $41.6 million of total unrecognized compensation cost related to all non-vested awards of restricted stock, which is expected to be recognized over a weighted-average period of 2.7 years. During the three months ended July 31, 2016 and 2015, 185,754 shares and 188,104 shares of restricted stock totaling $4.2 million and $6.6 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to vesting of restricted stock.

Employee Stock Purchase Plan

The Company has an ESPP that, in accordance with Section 423 of the Internal Revenue Code, allows eligible employees to authorize payroll deductions of up to 15% of their salary to purchase shares of the Company’s common stock at 85% of the fair market price of the common stock on the last day of the enrollment period. Employees may not purchase more than $25,000 in stock during any calendar year. The maximum number of shares that may be issued under the ESPP is 3.0 million shares. During the three months ended July 31, 2016, employees purchased 114,011 shares at $17.60 per share. During the three months ended July 31, 2015, employees purchased 44,334 shares at $29.55 per share. As of July 31, 2016, the ESPP had approximately 1.4 million shares remaining available for future issuance.

Common Stock

During the three months ended July 31, 2016 and 2015, the Company issued 32,470 shares and 71,428 shares of common stock, respectively, as a result of the exercise of stock options, with cash proceeds from the exercise of $0.4 million and $1.1 million, respectively.

No shares were repurchased during the three months ended July 31, 2016 and 2015, other than to satisfy minimum tax withholding requirements upon the vesting of restricted stock as described above.

XML

Financial Instruments

3 Months Ended

Jul. 31, 2016

Financial Instruments

6. Financial Instruments

The following tables show the Company’s cash, trading securities and foreign currency forward contracts’ cost, gross unrealized gains, gross unrealized losses and fair value by significant category recorded as cash and cash equivalents, current portion of current marketable securities, non-current marketable securities, or other accrued liabilities as of July 31, 2016 and April 30, 2016:

	July 31, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	119,660	$	—	$	—		$	119,660		$	119,660	$	—	$	—	$	—
Money market funds		124,413		—		—			124,413			124,413		—		—		—
Mutual funds (1)		134,447		3,477		(947	)		136,977			—		3,475		133,502		—
Total	$	378,520	$	3,477	$	(947	)	$	381,050		$	244,073	$	3,475	$	133,502	$	—
Level 2:
Foreign currency forward contracts	$	—	$	419	$	(966	)	$	(547	)	$	—	$	—	$	—	$	(547	)

	April 30, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	155,702	$	—	$	—		$	155,702		$	155,702	$	—	$	—	$	—
Money market funds		117,550		—		—			117,550			117,550		—		—		—
Mutual funds (1)		142,588		1,395		(2,553	)		141,430			—		11,338		130,092		—
Total	$	415,840	$	1,395	$	(2,553	)	$	414,682		$	273,252	$	11,338	$	130,092	$	—
Level 2:
Foreign currency forward contracts	$	—	$	324	$	(1,041	)	$	(717	)	$	—	$	—	$	—	$	(717	)

(1) These investments are held in trust for settlement of the Company’s vested and unvested obligations of $133.9 million and $138.8 million as of July 31, 2016 and April 30, 2016, respectively, under the ECAP (see Note 7 — Deferred Compensation and Retirement Plans). During the three months ended July 31, 2016 and 2015, the fair value of the investments increased; therefore, the Company recognized income of $3.9 million and $0.7 million, respectively, which was recorded in other income (loss), net.

Investments in marketable securities classified as trading are based upon investment selections the employee elects from a pre-determined set of securities in the ECAP and the Company invests in marketable securities to mirror these elections. As of July 31, 2016 and April 30, 2016, the Company’s investments in marketable securities classified as trading consist of mutual funds for which market prices are readily available. Investments in marketable securities classified as available-for-sale securities are made based on the Company’s investment policy, which restricts the types of investments that can be made. As of July 31, 2016 and April 30, 2016, the Company does not hold marketable securities classified as available-for-sale. During the three months ended July 31, 2015, the Company received $3.0 million in proceeds from maturities of available-for-sale marketable securities.

Non-Designated Derivatives

The fair value of derivatives not designated as hedge instruments are as follows:

	July 31, 2016		April 30, 2016
	(in thousands)
Derivative assets:
Foreign currency forward contracts	$	419	$	324
Derivative liabilities:
Foreign currency forward contracts	$	966	$	1,041

As of July 31, 2016, the total notional amounts of the forward contracts purchased and sold were $13.1 million and $58.5 million, respectively. As of April 30, 2016, the total notional amounts of the forward contracts purchased and sold were $14.5 million and $44.3 million, respectively. The Company recognizes forward contracts as a net asset or net liability on the consolidated balance sheets as such contracts are covered by master netting agreements. The Company incurred an immaterial net gain related to forward contracts during the three months ended July 31, 2016, which is recorded in general and administrative expenses in the accompanying consolidated statements of income. The cash flows related to foreign currency forward contracts are included in net cash used in operating activities.

XML

Deferred Compensation and Retirement Plans

3 Months Ended

Jul. 31, 2016

Deferred Compensation and Retirement Plans

7. Deferred Compensation and Retirement Plans

The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions. Among these plans is a defined benefit pension plan for Hay Group employees in the United States. The assets of this plan are held separately from the assets of the sponsors in self-administered funds. The plan is funded consistent with local statutory requirements and the Company does not expect to make any contribution to this plan during fiscal 2017. All other defined benefit obligations from other plans are unfunded.

The components of net periodic benefit costs are as follows:

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Interest cost	$	1,062		$	703
Amortization of actuarial loss		763			731
Service cost		609			—
Expected return on plan assets		(390	)		—
Net periodic benefit costs	$	2,044		$	1,434

The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans mentioned above that are unfunded. The gross CSV of these contracts of $178.6 million and $175.7 million is offset by outstanding policy loans of $68.4 million in the accompanying consolidated balance sheets as of July 31, 2016 and April 30, 2016, respectively. The CSV value of the underlying COLI investments increased by $2.5 million during both the three months ended July 31, 2016 and 2015, respectively, recorded as a decrease in compensation and benefits expense in the accompanying consolidated statements of income.

The Company has an ECAP, which is intended to provide certain employees an opportunity to defer salary and/or bonus on a pre-tax basis or make an after-tax contribution. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based upon employee performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. As these contributions vest, the amounts are recorded as a liability in deferred compensation and other retirement plans on the accompanying balance sheet and compensation and benefits on the accompanying consolidated statements of income. Participants generally vest in Company contributions over a four to five year period.

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During the three months ended July 31, 2016 and 2015, deferred compensation liability increased; therefore, the Company recognized in compensation expense $3.2 million and $0.7 million, respectively. Offsetting these increases in compensation and benefits expense was an increase in the fair value of marketable securities classified as trading (held in trust to satisfy obligations under certain deferred compensation liabilities) of $3.9 million and $0.7 million during the three months ended July 31, 2016 and 2015, respectively, recorded in other income (loss), net on the consolidated statements of income (see Note 6 —Financial Instruments).

XML

Restructuring Charges, Net

3 Months Ended

Jul. 31, 2016

Restructuring Charges, Net

8. Restructuring Charges, Net

The Company continued the implementation of the fiscal 2016 restructuring plan during the three months ended July 31, 2016 in order to integrate the Hay Group entities that were acquired in the prior year acquisition by eliminating redundant positions and operational and general and administrative expenses and consolidating office space. This resulted in restructuring charges of $24.5 million in the three months ended July 31, 2016, of which $11.5 million relates to severance and $13.0 million relates to consolidation of office space.

Changes in the restructuring liability during the three months ended July 31, 2016 are as follows:

	Severance			Facilities			Total
	(in thousands)
Liability as of April 30, 2016	$	5,293		$	669		$	5,962
Restructuring charges, net		11,472			13,048			24,520
Reductions for cash payments		(4,788	)		(1,787	)		(6,575	)
Reductions for non-cash charges		—			(2,480	)		(2,480	)
Exchange rate fluctuations		(111	)		(66	)		(177	)
Liability as of July 31, 2016	$	11,866		$	9,384		$	21,250

As of July 31, 2016 and April 30, 2016, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $4.5 million and $0.6 million, respectively, of facilities costs which primarily relate to commitments under operating leases, net of sublease income, which are included in other long-term liabilities.

The restructuring liability by segment is summarized below:

	July 31, 2016
	Severance		Facilities		Total
	(in thousands)
Executive Search
North America	$	743	$	525	$	1,268
Europe, Middle East and Africa (“EMEA”)		414		84		498
Asia Pacific		6		44		50
Latin America		17		166		183
Total Executive Search		1,180		819		1,999
Hay Group		10,563		8,361		18,924
Futurestep		—		204		204
Corporate		123		—		123
Liability as of July 31, 2016	$	11,866	$	9,384	$	21,250

	April 30, 2016
	Severance		Facilities		Total
	(in thousands)
Executive Search
North America	$	—	$	5	$	5
EMEA		1,533		23		1,556
Asia Pacific		33		—		33
Total Executive Search		1,566		28		1,594
Hay Group		3,727		396		4,123
Futurestep		—		245		245
Liability as of April 30, 2016	$	5,293	$	669	$	5,962

XML

Business Segments

3 Months Ended

Jul. 31, 2016

Business Segments

9. Business Segments

The Company currently operates in three global businesses: Executive Search, Hay Group and Futurestep. The Executive Search segment focuses on recruiting Board of Director and C-level positions, in addition to research-based interviewing and onboarding solutions, for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare and technology industries. Hay Group assists clients with ongoing assessment, compensation and development of their senior executives and management teams, and addresses three fundamental needs: Talent Strategy, Succession Management, and Leadership Development, all underpinned by a comprehensive array of world-leading IP, products and tools. Futurestep is a global industry leader in high-impact talent acquisition solutions. Its portfolio of services includes global and regional RPO, project recruitment, individual professional search and consulting. The Executive Search business segment is managed by geographic regional leaders and Hay Group and Futurestep worldwide operations are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Hay Group and Futurestep report directly to the Chief Executive Officer of the Company. The Company also operates a Corporate segment to record global expenses of the Company.

The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker’s (“CODM”) review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA.

Financial highlights by business segment are as follows:

	Three Months Ended July 31, 2016
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Hay Group			Futurestep			Corporate			Consolidated
	(in thousands)
Fee revenue	$	81,802	$	35,370	$	19,626	$	9,563	$	146,361	$	174,582		$	54,678		$	—		$	375,621
Deferred revenue adjustment due to acquisition		—		—		—		—		—		3,535			—			—			3,535
Adjusted fee revenue	$	81,802	$	35,370	$	19,626	$	9,563	$	146,361	$	178,117		$	54,678		$	—		$	379,156
Total revenue	$	85,425	$	36,249	$	20,180	$	9,614	$	151,468	$	181,508		$	59,957		$	—		$	392,933
Net income																					4,068
Other income, net																					(4,259	)
Interest expense, net																					3,061
Equity in earnings of unconsolidated subsidiaries, net																					(79	)
Income tax provision																					1,725
Operating income (loss)	$	16,468	$	6,027	$	2,102	$	2,330	$	26,927	$	(7,743	)	$	7,513		$	(22,181	)	$	4,516
Depreciation and amortization		830		211		225		114		1,380		8,016			623			1,425			11,444
Other income (loss), net		288		24		87		73		472		235			(2	)		3,554			4,259
Equity in earnings of unconsolidated subsidiaries, net		79		—		—		—		79		—			—			—			79
EBITDA		17,665		6,262		2,414		2,517		28,858		508			8,134			(17,202	)		20,298
Restructuring charges, net		1,706		128		622		360		2,816		21,488			—			216			24,520
Integration/acquisition costs		—		—		—		—		—		4,264			—			3,763			8,027
Deferred revenue adjustment due to acquisition		—		—		—		—		—		3,535			—			—			3,535
Adjusted EBITDA	$	19,371	$	6,390	$	3,036	$	2,877	$	31,674	$	29,795		$	8,134		$	(13,223	)	$	56,380

	Three Months Ended July 31, 2015
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Hay Group			Futurestep		Corporate			Consolidated
	(in thousands)
Fee revenue	$	90,359	$	36,090	$	19,215	$	6,426	$	152,090	$	69,240		$	46,064	$	—		$	267,394
Total revenue	$	94,399	$	37,171	$	19,990	$	6,432	$	157,992	$	71,441		$	49,902	$	—		$	279,335
Net income																			$	23,082
Other loss, net																				74
Interest expense, net																				299
Equity in earnings of unconsolidated subsidiaries, net																				(725	)
Income tax provision																				10,174
Operating income (loss)	$	24,145	$	6,276	$	2,986	$	1,508	$	34,915	$	7,495		$	6,189	$	(15,695	)	$	32,904
Depreciation and amortization		827		365		246		78		1,516		3,748			585		1,574			7,423
Other income (loss), net		32		143		18		239		432		(863	)		—		357			(74	)
Equity in earnings of unconsolidated subsidiaries, net		86		—		—		—		86		—			—		639			725
EBITDA		25,090		6,784		3,250		1,825		36,949		10,380			6,774		(13,125	)		40,978
Integration/acquisition costs		—		—		—		—		—		329			—		345			674
Adjusted EBITDA	$	25,090	$	6,784	$	3,250	$	1,825	$	36,949	$	10,709		$	6,774	$	(12,780	)	$	41,652

XML

Long-Term Debt

3 Months Ended

Jul. 31, 2016

Long-Term Debt

10. Long-Term Debt

On June 15, 2016, the Company entered into a senior secured $400 million Credit Agreement (the “Credit Agreement”) with a syndicate of banks and Wells Fargo Bank, National Association as administrative agent (to provide for enhanced financial flexibility and in recognition of the accelerated pace of the Hay Group integration). The Credit Agreement provides for, among other things: (a) a senior secured term loan facility in an aggregate principal amount of $275 million (the “ Term Facility”); (b) a senior secured revolving credit facility (the “Revolver” and together with the Term Facility, the “Credit Facilities”) in an aggregate principal amount of $125 million, (c) annual term loan amortization of 7.5%, 7.5%, 10.0%, 10.0%, and 10.0%, with the remaining principal due at maturity (d) certain customary affirmative and negative covenants, including a maximum consolidated total leverage ratio (as defined below) and a minimum interest coverage ratio, and (e) an expanded definition of permitted add-backs to Adjusted EBITDA in recognition of the accelerated integration actions. The Company drew down $275 million on the new term loan and used $140 million of the proceeds to pay-off the term loan that was outstanding as of April 30, 2016. The remaining funds will be used for working capital and general corporate purposes. As of July 31, 2016, the Company was in compliance with its debt covenants.

At the Company’s option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Facilities may fluctuate between LIBOR plus 1.25% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon the Company’s total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated leverage ratio”) at such time. In addition, the Company will be required to pay to the lenders a quarterly fee ranging from 0.20% to 0.35% per annum on the average daily unused amount of the Term Facility, based upon the Company’s consolidated leverage ratio at such time, and fees relating to the issuance of letters of credit.

Both the Revolver and the Term Facility mature on June 15, 2021, and may be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary LIBOR breakage fees). The Term Facility is payable in quarterly installments beginning on September 30, 2016. As of July 31, 2016, $275.0 million was outstanding under the Term Facility compared to $140.0 million as of April 30, 2016, under the previous Facility. During the three months ended July 31, 2016, the average rate on the Term Facility was 2.40%.

As of July 31, 2016 and April 30, 2016, the Company had no borrowings under the Revolver. At July 31, 2016 and April 30, 2016, there were $2.8 million of standby letters of credit issued under its long-term debt arrangements. The Company had a total of $5.6 million and $6.4 million of standby letters of credits with other financial institutions as of July 31, 2016 and April 30, 2016, respectively.

XML

Subsequent Events

3 Months Ended

Jul. 31, 2016

Subsequent Events

11. Subsequent Events

Quarterly Dividend Declaration

On September 7, 2016, the Board of Directors of the Company declared a cash dividend of $0.10 per share that will be paid on October 14, 2016 to holders of the Company’s common stock of record at the close of business on September 26, 2016. The declaration and payment of future dividends under the quarterly dividend policy will be at the discretion of the Board of Directors and will depend upon many factors, including the Company’s earnings, capital requirements, financial conditions, the terms of the Company’s indebtedness and other factors that the Board of Directors may deem to be relevant. The Board may amend, revoke or suspend the dividend policy at any time and for any reason.

XML

Organization and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jul. 31, 2016

Basis of Consolidation and Presentation

Basis of Consolidation and Presentation

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended April 30, 2016 for the Company and its wholly and majority owned/controlled domestic and international subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements conform with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and prevailing practice within the industry. The consolidated financial statements include all adjustments, consisting of normal recurring accruals and any other adjustments that management considers necessary for a fair presentation of the results for these periods. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year.

Investments in affiliated companies, which are 50% or less owned and where the Company exercises significant influence over operations, are accounted for using the equity method.

The Company considers events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.

Use of Estimates and Uncertainties

Use of Estimates and Uncertainties

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates, and changes in estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. The most significant areas that require management judgment are revenue recognition, restructuring, deferred compensation, annual performance related bonuses, evaluation of the carrying value of receivables, goodwill and other intangible assets, fair value of contingent consideration, share-based payments and the recoverability of deferred income taxes.

Revenue Recognition

Revenue Recognition

Substantially all fee revenue is derived from fees for professional services related to executive search performed on a retained basis, recruitment for non-executive professionals, recruitment process outsourcing, people and organizational advisory services and the sale of productized services. Fee revenue from executive search activities and recruitment for non-executive professionals is generally one-third of the estimated first year compensation of the placed executive or non-executive professional, as applicable, plus a percentage of the fee to cover indirect engagement related expenses. The Company generally recognizes such revenue on a straight-line basis over a three-month period, commencing upon client acceptance, as this is the period over which the recruitment services are performed. Fees earned in excess of the initial contract amount are recognized upon completion of the engagement, which reflect the difference between the final actual compensation of the placed executive and the estimate used for purposes of the previous billings. Since the initial contract fees are typically not contingent upon placement of a candidate, our assumptions primarily relate to establishing the period over which such service is performed. These assumptions determine the timing of revenue recognition and profitability for the reported period. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved. In addition to recruitment for non-executive professionals, Futurestep provides recruitment process outsourcing (“RPO”) services and fee revenue is recognized as services are rendered and/or as milestones are achieved. Fee revenue from Hay Group is recognized as services are rendered for consulting engagements and other time based services, measured by total hours incurred to the total estimated hours at completion. It is possible that updated estimates for the consulting engagement may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate. Hay Group revenue is also derived from the sale of productized services, which includes revenue from licenses and from the sale of products. Revenue from licenses is recognized using a straight-line method over the term of the contract (generally 12 months). Under the fixed term licenses, the Company is obligated to provide the licensee with access to any updates to the underlying intellectual property that are made by the Company during the term of the license. Once the term of the agreement expires, the client’s right to access or use the intellectual property expires and the Company has no further obligations to the client under the license agreement. Revenue from perpetual licenses is recognized when the license is sold since the Company’s only obligation is to provide the client access to the intellectual property but is not obligated to provide maintenance, support, updates or upgrades. Products sold by the Company mainly consist of books and automated services covering a variety of topics including performance management, team effectiveness, and coaching and development. The Company recognizes revenue for its products when the product has been sold or shipped in the case of books. As of July 31, 2016 and April 30, 2016, the Company included deferred revenue of $88.9 million and $95.9 million, respectively, in other accrued liabilities.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

An allowance is established for doubtful accounts by taking a charge to general and administrative expenses. The amount of the allowance is based on historical loss experience, assessment of the collectability of specific accounts, as well as expectations of future collections based upon trends and the type of work for which services are rendered. After the Company exhausts all collection efforts, the amount of the allowance is reduced for balances identified as uncollectible.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of July 31, 2016 and April 30, 2016, the Company’s investments in cash equivalents, consist of money market funds for which market prices are readily available.

Marketable Securities

Marketable Securities

The Company currently has investments in mutual funds that are classified as trading securities based upon management’s intent and ability to hold, sell or trade such securities. The classification of the investments in mutual funds is assessed upon purchase and reassessed at each reporting period. The investments in mutual funds (for which market prices are readily available) are held in trust to satisfy obligations under the Company’s deferred compensation plans (see Note 6 — Financial Instruments). Such investments are based upon the employees’ investment elections in their deemed accounts in the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (“ECAP”) from a pre-determined set of securities and the Company invests in marketable securities to mirror these elections. These investments are recorded at fair value and are classified as marketable securities in the accompanying consolidated balance sheets. The investments that the Company may sell within the next twelve months are carried as current assets. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis, dividends are recorded as earned on the ex-dividend date. Interest and dividend income are recorded in the accompanying consolidated statements of income in other income (loss), net.

Foreign Currency Forward Contracts Not Designated as Hedges

Foreign Currency Forward Contracts Not Designated as Hedges

Beginning in the third quarter of fiscal 2016, the Company established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures which increased as a result of the Hay Group acquisition. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to Accounting Standards Codification 815, Derivatives and Hedging. Accordingly, the fair value of these contracts are recorded as of the end of the reporting period in the accompanying consolidated balance sheets, while the change in fair value is recorded to the accompanying consolidated statements of income.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is the price the Company would receive to sell an asset or transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities recorded or disclosed at fair value, the Company determines the fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, the fair value is based upon the quoted market price of similar assets. The fair values are assigned a level within the fair value hierarchy as defined below:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

As of July 31, 2016 and April 30, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis. These included cash, cash equivalents, accounts receivable, marketable securities and foreign currency forward contracts. The carrying amount of cash, cash equivalents and accounts receivable approximates fair value due to the short maturity of these instruments. The fair values of marketable securities classified as trading are obtained from quoted market prices, and the fair values of foreign currency forward contracts are obtained from a third party, which are based on quoted prices or market prices for similar financial instruments.

Business Acquisitions

Business Acquisitions

Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). Results of the annual impairment test performed as of January 31, 2016, indicated that the fair value of each reporting unit exceeded its carrying amount and no reporting units were at risk of failing the impairment test. As a result, no impairment charge was recognized. There were no indicators of impairment as of July 31, 2016 and April 30, 2016 that would have required further testing.

Intangible assets primarily consist of customer lists, non-compete agreements, proprietary databases, intellectual property and trademarks and are recorded at their estimated fair value at the date of acquisition and are amortized in a pattern in which the asset is consumed if that pattern can be reliably determined, or using the straight-line method over their estimated useful lives which range from one to 24 years. For intangible assets subject to amortization, an impairment loss is recognized if the carrying amount of the intangible assets is not recoverable and exceeds fair value. The carrying amount of the intangible assets is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset. Intangible assets with indefinite lives are not amortized, but are reviewed annually for impairment or more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying amount. As of July 31, 2016 and April 30, 2016, there were no indicators of impairment with respect to the Company’s intangible assets.

Compensation and Benefits Expense

Compensation and Benefits Expense

Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and administrative and support personnel. The most significant portions of this expense are salaries and the amounts paid under the annual performance related bonus plan to employees. The portion of the expense applicable to salaries is comprised of amounts earned by employees during a reporting period. The portion of the expenses applicable to annual performance related bonuses refers to the Company’s annual employee performance related bonus with respect to a fiscal year, the amount of which is communicated and paid to each eligible employee following the completion of the fiscal year.

Each quarter, management makes its best estimate of its annual performance related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by executive search consultants and revenue and other performance metrics for Hay Group and Futurestep consultants), the level of engagements referred by a fee earner in one line of business to a different line of business, Company performance including profitability, competitive forces and future economic conditions and their impact on the Company’s results. At the end of each fiscal year, annual performance related bonuses take into account final individual consultant productivity (including referred work), Company results including profitability, the achievement of strategic objectives and the results of individual performance appraisals, and the current economic landscape. Accordingly, each quarter the Company reevaluates the assumptions used to estimate annual performance related bonus liability and adjusts the carrying amount of the liability recorded on the consolidated balance sheet and reports any changes in the estimate in current operations.

Because annual performance-based bonuses are communicated and paid only after the Company reports its full fiscal year results, actual performance-based bonus payments may differ from the prior year’s estimate. Such changes in the bonus estimate historically have been immaterial and are recorded in current operations in the period in which they are determined. The performance related bonus expense was $42.4 million and $41.8 million during the three months ended July 31, 2016 and 2015, respectively, included in compensation and benefits expense in the consolidated statements of income.

Other expenses included in compensation and benefits expense are due to changes in deferred compensation and pension plan liabilities, changes in cash surrender value (“CSV”) of company owned life insurance (“COLI”) contracts, amortization of stock compensation awards, payroll taxes and employee insurance benefits.

Restructuring Charges, Net

Restructuring Charges, Net

The Company accounts for its restructuring charges as a liability when the obligations are incurred and records such charges at fair value. Such charges included one-time employee termination benefits and the cost to terminate an office lease including remaining lease payments. Changes in the estimates of the restructuring charges are recorded in the period the change is determined.

Stock-Based Compensation

Stock-Based Compensation

The Company has employee compensation plans under which various types of stock-based instruments are granted. These instruments principally include restricted stock units, restricted stock, stock options and an Employee Stock Purchase Plan (“ESPP”). The Company recognizes compensation expense related to restricted stock units, restricted stock and the estimated fair value of stock options and stock purchases under the ESPP on a straight-line basis over the service period for the entire award.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued guidance simplifying the presentation of debt issue costs. The guidance requires debt issuance costs related to a debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, rather than being classified as an asset. The Company adopted this guidance during the three months ended July 31, 2016 and as a result, $4.2 million of unamortized debt issuance costs associated with its senior secured Credit Agreement were classified as a direct deduction to the term loan as of July 31, 2016, of which $0.9 million was recorded to term loan, current, and $3.3 million was recorded to term loan, non-current. The adoption did not have a material impact on the consolidated financial statements as of April 30, 2016.

In September 2015, the FASB issued guidance requiring an acquirer to recognize adjustments to provisional amounts recorded in an acquisition that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer is required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The acquirer is also required to present separately on the face of the income statement or disclose in the footnotes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date. The Company adopted this guidance during the three months ended July 31, 2016 and the adoption did not have an impact on the financial statements of the Company.

Recently Proposed Accounting Standards

Recently Proposed Accounting Standards

In May 2014, the FASB issued guidance that supersedes revenue recognition requirements regarding contracts with customers to transfer goods or services or for the transfer of nonfinancial assets. Under the new guidance, entities are required to recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis to be performed on transactions to determine when and how revenue is recognized. In July 2015, the FASB decided to approve a one-year deferral of the effective date as well as providing an option to early adopt the standard on the original effective date. This new guidance is effective for fiscal years and interim periods within those annual years beginning after December 15, 2017 as opposed to the original effective date of December 15, 2016. The Company will adopt this guidance in its fiscal year beginning May 1, 2018. The Company is currently evaluating the effect the guidance will have on our financial condition and results of operations.

In January 2016, the FASB issued guidance on the classification and measurement of financial instruments, which requires that (i) all equity investments, other than equity-method investments, in unconsolidated entities, generally be measured at fair value through earnings and (ii) when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk, be recognized separately in other comprehensive income. Additionally, it changes the disclosure requirements for financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, with early adoption permitted for certain provisions. The Company is currently evaluating the effect the guidance will have on the consolidated financial statements.

In February 2016, the FASB issued guidance on accounting for leases that generally requires all leases to be recognized in the consolidated balance sheet. The provisions of the guidance are effective for fiscal years beginning after December 15, 2018; early adoption is permitted. The provisions of the guidance are to be applied using a modified retrospective approach. The Company is currently evaluating the effect that this guidance will have on the consolidated financial statements.

In March 2016, the FASB issued guidance on accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Furthermore, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The guidance also allows companies to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifying that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity in the consolidated statements of cash flows and provides an accounting policy election to account for forfeitures as they occur. The provisions of the guidance are effective for fiscal years beginning after December 15, 2016; early adoption is permitted. The Company is currently evaluating the effect that this guidance will have on the consolidated financial statements.

XML

Basic and Diluted Earnings Per Share (Tables)

3 Months Ended

Jul. 31, 2016

Basic and Diluted Earnings per Common Share Attributable to Common Stockholders

The following table summarizes basic and diluted earnings per common share attributable to common stockholders:

	Three Months Ended July 31,
	2016		2015
	(in thousands, except per share data)
Net income attributable to Korn/Ferry International	$	3,208	$	23,082
Less: distributed and undistributed earnings to nonvested restricted stockholders		44		224
Basic net earnings attributable to common stockholders		3,164		22,858
Add: undistributed earnings to nonvested restricted stockholders		—		176
Less: reallocation of undistributed earnings to nonvested restricted stockholders		—		174
Diluted net earnings attributable to common stockholders	$	3,164	$	22,860
Weighted-average common shares outstanding:
Basic weighted-average number of common shares outstanding		56,189		49,493
Effect of dilutive securities:
Restricted stock		316		452
Stock options		60		66
ESPP		11		3
Diluted weighted-average number of common shares outstanding		56,576		50,014
Net earnings per common share:
Basic earnings per share	$	0.06	$	0.46
Diluted earnings per share	$	0.06	$	0.46

XML

Stockholders' Equity (Tables)

3 Months Ended

Jul. 31, 2016

Summary of Changes in Stockholders' Equity

The following table summarizes the changes in stockholders’ equity for the three months ended July 31, 2016:

	Total Korn/Ferry International Stockholders’ Equity			Noncontrolling Interest			Total Stockholders’ Equity
	(in thousands)
Balance as of April 30, 2016	$	1,045,300		$	2,001		$	1,047,301
Comprehensive income (loss):
Net income		3,208			860			4,068
Foreign currency translation adjustments		(13,128	)		(146	)		(13,274	)
Deferred compensation and pension plan adjustments, net of tax		462			—			462
Dividends declared		(5,909	)		—			(5,909	)
Purchase of stock		(4,161	)		—			(4,161	)
Issuance of stock		2,784			—			2,784
Stock-based compensation		4,739			—			4,739
Tax benefit from exercise of stock options and vesting of restricted stock		332			—			332
Balance as of July 31, 2016	$	1,033,627		$	2,715		$	1,036,342

XML

Comprehensive (Loss) Income (Tables)

3 Months Ended

Jul. 31, 2016

Components Of Accumulated Other Comprehensive (Loss) Income

The components of accumulated other comprehensive loss were as follows:

	July 31, 2016			April 30, 2016
	(in thousands)
Foreign currency translation adjustments	$	(49,467	)	$	(36,339	)
Deferred compensation and pension plan adjustments, net of tax		(21,110	)		(21,572	)
Accumulated other comprehensive loss, net	$	(70,577	)	$	(57,911	)

Changes in Each Component of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the three months ended July 31, 2016:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Marketable Securities		Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2016	$	(36,339	)	$	(21,572	)	$	—	$	(57,911	)
Unrealized losses arising during the period		(13,128	)		—			—		(13,128	)
Reclassification of realized net losses to net income		—			462			—		462
Balance as of July 31, 2016	$	(49,467	)	$	(21,110	)	$	—	$	(70,577	)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the three months ended July 31, 2015:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Marketable Securities			Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2015	$	(20,919	)	$	(19,708	)	$	4		$	(40,623	)
Unrealized losses arising during the period		(15,632	)		—			(4	)		(15,636	)
Reclassification of realized net losses to net income		—			447			—			447
Balance as of July 31, 2015	$	(36,551	)	$	(19,261	)	$	—		$	(55,812	)

(1) The tax effect on the reclassifications of realized net losses was $0.3 million for both the three months ended July 31, 2016 and 2015.

XML

Employee Stock Plans (Tables)

3 Months Ended

Jul. 31, 2016

Components Of Stock-Based Compensation Expense Recognized

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of income for the periods indicated:

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Restricted stock	$	4,739		$	3,554
ESPP		176			120
Stock options		—			17
Total stock-based compensation expense, pre-tax		4,915			3,691
Tax benefit from stock-based compensation expense		(1,484	)		(1,154	)
Total stock-based compensation expense, net of tax	$	3,431		$	2,537

Restricted Stock Activity

Restricted stock activity during the three months ended July 31, 2016 is summarized below:

	Shares			Weighted- Average Grant Date Fair Value
	(in thousands, except per share data)
Non-vested, April 30, 2016		1,506		$	34.12
Granted		718		$	19.89
Vested		(666	)	$	21.80
Forfeited/expired		(11	)	$	26.35
Non-vested, July 31, 2016		1,547		$	32.87

XML

Financial Instruments (Tables)

3 Months Ended

Jul. 31, 2016

Cash, Trading Securities and Foreign Currency Forward Contracts' Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value Recorded as Cash and Cash Equivalents, Current Portion of Current Marketable Securities, Non-Current Marketable Securities, or Other Accrued Liabilities

The following tables show the Company’s cash, trading securities and foreign currency forward contracts’ cost, gross unrealized gains, gross unrealized losses and fair value by significant category recorded as cash and cash equivalents, current portion of current marketable securities, non-current marketable securities, or other accrued liabilities as of July 31, 2016 and April 30, 2016:

	July 31, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	119,660	$	—	$	—		$	119,660		$	119,660	$	—	$	—	$	—
Money market funds		124,413		—		—			124,413			124,413		—		—		—
Mutual funds (1)		134,447		3,477		(947	)		136,977			—		3,475		133,502		—
Total	$	378,520	$	3,477	$	(947	)	$	381,050		$	244,073	$	3,475	$	133,502	$	—
Level 2:
Foreign currency forward contracts	$	—	$	419	$	(966	)	$	(547	)	$	—	$	—	$	—	$	(547	)

	April 30, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	155,702	$	—	$	—		$	155,702		$	155,702	$	—	$	—	$	—
Money market funds		117,550		—		—			117,550			117,550		—		—		—
Mutual funds (1)		142,588		1,395		(2,553	)		141,430			—		11,338		130,092		—
Total	$	415,840	$	1,395	$	(2,553	)	$	414,682		$	273,252	$	11,338	$	130,092	$	—
Level 2:
Foreign currency forward contracts	$	—	$	324	$	(1,041	)	$	(717	)	$	—	$	—	$	—	$	(717	)

(1) These investments are held in trust for settlement of the Company’s vested and unvested obligations of $133.9 million and $138.8 million as of July 31, 2016 and April 30, 2016, respectively, under the ECAP (see Note 7 — Deferred Compensation and Retirement Plans). During the three months ended July 31, 2016 and 2015, the fair value of the investments increased; therefore, the Company recognized income of $3.9 million and $0.7 million, respectively, which was recorded in other income (loss), net.

Cash, Trading Securities and Foreign Currency Forward Contracts' Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value Recorded as Cash and Cash Equivalents, Current Portion of Current Marketable Securities, Non-Current Marketable Securities, or Other Accrued Liabilities

The following tables show the Company’s cash, trading securities and foreign currency forward contracts’ cost, gross unrealized gains, gross unrealized losses and fair value by significant category recorded as cash and cash equivalents, current portion of current marketable securities, non-current marketable securities, or other accrued liabilities as of July 31, 2016 and April 30, 2016:

	July 31, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	119,660	$	—	$	—		$	119,660		$	119,660	$	—	$	—	$	—
Money market funds		124,413		—		—			124,413			124,413		—		—		—
Mutual funds (1)		134,447		3,477		(947	)		136,977			—		3,475		133,502		—
Total	$	378,520	$	3,477	$	(947	)	$	381,050		$	244,073	$	3,475	$	133,502	$	—
Level 2:
Foreign currency forward contracts	$	—	$	419	$	(966	)	$	(547	)	$	—	$	—	$	—	$	(547	)

	April 30, 2016
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non-current		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	155,702	$	—	$	—		$	155,702		$	155,702	$	—	$	—	$	—
Money market funds		117,550		—		—			117,550			117,550		—		—		—
Mutual funds (1)		142,588		1,395		(2,553	)		141,430			—		11,338		130,092		—
Total	$	415,840	$	1,395	$	(2,553	)	$	414,682		$	273,252	$	11,338	$	130,092	$	—
Level 2:
Foreign currency forward contracts	$	—	$	324	$	(1,041	)	$	(717	)	$	—	$	—	$	—	$	(717	)

(1) These investments are held in trust for settlement of the Company’s vested and unvested obligations of $133.9 million and $138.8 million as of July 31, 2016 and April 30, 2016, respectively, under the ECAP (see Note 7 — Deferred Compensation and Retirement Plans). During the three months ended July 31, 2016 and 2015, the fair value of the investments increased; therefore, the Company recognized income of $3.9 million and $0.7 million, respectively, which was recorded in other income (loss), net.

Fair Value of Derivatives Not Designated as Hedge Instruments

The fair value of derivatives not designated as hedge instruments are as follows:

	July 31, 2016		April 30, 2016
	(in thousands)
Derivative assets:
Foreign currency forward contracts	$	419	$	324
Derivative liabilities:
Foreign currency forward contracts	$	966	$	1,041

XML

Deferred Compensation and Retirement Plans (Tables)

3 Months Ended

Jul. 31, 2016

Deferred Compensation Plan

Components Of Net Periodic Benefit Costs

The components of net periodic benefit costs are as follows:

	Three Months Ended July 31,
	2016			2015
	(in thousands)
Interest cost	$	1,062		$	703
Amortization of actuarial loss		763			731
Service cost		609			—
Expected return on plan assets		(390	)		—
Net periodic benefit costs	$	2,044		$	1,434

XML

Restructuring Charges, Net (Tables)

3 Months Ended

Jul. 31, 2016

Changes in Restructuring Liability

Changes in the restructuring liability during the three months ended July 31, 2016 are as follows:

	Severance			Facilities			Total
	(in thousands)
Liability as of April 30, 2016	$	5,293		$	669		$	5,962
Restructuring charges, net		11,472			13,048			24,520
Reductions for cash payments		(4,788	)		(1,787	)		(6,575	)
Reductions for non-cash charges		—			(2,480	)		(2,480	)
Exchange rate fluctuations		(111	)		(66	)		(177	)
Liability as of July 31, 2016	$	11,866		$	9,384		$	21,250

Summary Of Restructuring Liability By Segment

The restructuring liability by segment is summarized below:

	July 31, 2016
	Severance		Facilities		Total
	(in thousands)
Executive Search
North America	$	743	$	525	$	1,268
Europe, Middle East and Africa (“EMEA”)		414		84		498
Asia Pacific		6		44		50
Latin America		17		166		183
Total Executive Search		1,180		819		1,999
Hay Group		10,563		8,361		18,924
Futurestep		—		204		204
Corporate		123		—		123
Liability as of July 31, 2016	$	11,866	$	9,384	$	21,250

	April 30, 2016
	Severance		Facilities		Total
	(in thousands)
Executive Search
North America	$	—	$	5	$	5
EMEA		1,533		23		1,556
Asia Pacific		33		—		33
Total Executive Search		1,566		28		1,594
Hay Group		3,727		396		4,123
Futurestep		—		245		245
Liability as of April 30, 2016	$	5,293	$	669	$	5,962

XML

Business Segments (Tables)

3 Months Ended

Jul. 31, 2016

Financial Highlights By Business Segment

Financial highlights by business segment are as follows:

	Three Months Ended July 31, 2016
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Hay Group			Futurestep			Corporate			Consolidated
	(in thousands)
Fee revenue	$	81,802	$	35,370	$	19,626	$	9,563	$	146,361	$	174,582		$	54,678		$	—		$	375,621
Deferred revenue adjustment due to acquisition		—		—		—		—		—		3,535			—			—			3,535
Adjusted fee revenue	$	81,802	$	35,370	$	19,626	$	9,563	$	146,361	$	178,117		$	54,678		$	—		$	379,156
Total revenue	$	85,425	$	36,249	$	20,180	$	9,614	$	151,468	$	181,508		$	59,957		$	—		$	392,933
Net income																					4,068
Other income, net																					(4,259	)
Interest expense, net																					3,061
Equity in earnings of unconsolidated subsidiaries, net																					(79	)
Income tax provision																					1,725
Operating income (loss)	$	16,468	$	6,027	$	2,102	$	2,330	$	26,927	$	(7,743	)	$	7,513		$	(22,181	)	$	4,516
Depreciation and amortization		830		211		225		114		1,380		8,016			623			1,425			11,444
Other income (loss), net		288		24		87		73		472		235			(2	)		3,554			4,259
Equity in earnings of unconsolidated subsidiaries, net		79		—		—		—		79		—			—			—			79
EBITDA		17,665		6,262		2,414		2,517		28,858		508			8,134			(17,202	)		20,298
Restructuring charges, net		1,706		128		622		360		2,816		21,488			—			216			24,520
Integration/acquisition costs		—		—		—		—		—		4,264			—			3,763			8,027
Deferred revenue adjustment due to acquisition		—		—		—		—		—		3,535			—			—			3,535
Adjusted EBITDA	$	19,371	$	6,390	$	3,036	$	2,877	$	31,674	$	29,795		$	8,134		$	(13,223	)	$	56,380

	Three Months Ended July 31, 2015
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Hay Group			Futurestep		Corporate			Consolidated
	(in thousands)
Fee revenue	$	90,359	$	36,090	$	19,215	$	6,426	$	152,090	$	69,240		$	46,064	$	—		$	267,394
Total revenue	$	94,399	$	37,171	$	19,990	$	6,432	$	157,992	$	71,441		$	49,902	$	—		$	279,335
Net income																			$	23,082
Other loss, net																				74
Interest expense, net																				299
Equity in earnings of unconsolidated subsidiaries, net																				(725	)
Income tax provision																				10,174
Operating income (loss)	$	24,145	$	6,276	$	2,986	$	1,508	$	34,915	$	7,495		$	6,189	$	(15,695	)	$	32,904
Depreciation and amortization		827		365		246		78		1,516		3,748			585		1,574			7,423
Other income (loss), net		32		143		18		239		432		(863	)		—		357			(74	)
Equity in earnings of unconsolidated subsidiaries, net		86		—		—		—		86		—			—		639			725
EBITDA		25,090		6,784		3,250		1,825		36,949		10,380			6,774		(13,125	)		40,978
Integration/acquisition costs		—		—		—		—		—		329			—		345			674
Adjusted EBITDA	$	25,090	$	6,784	$	3,250	$	1,825	$	36,949	$	10,709		$	6,774	$	(12,780	)	$	41,652

XML

Organization and Summary of Significant Accounting Policies - Additional Information (Detail)	3 Months Ended		12 Months Ended
	Jul. 31, 2016 USD ($) Country Office	Jul. 31, 2015 USD ($)	Apr. 30, 2016 USD ($)
Organization And Summary Of Significant Accounting Policies [Line Items]
Number of offices | Office	128
Number of countries in which entity operates | Country	52
Investments in affiliated companies maximum	50.00%
Deferred revenue	$ 88,900,000		$ 95,900,000
Impairment of goodwill	0		0
Impairment of intangible assets	0		$ 0
Performance related bonus expenses	42,400,000	$ 41,800,000
Accounting Standards Update 2015-03 | Restatement Adjustment
Organization And Summary Of Significant Accounting Policies [Line Items]
Unamortized debt issuance costs	4,200,000
Unamortized debt issuance costs, current	900,000
Unamortized debt issuance costs, non-current	$ 3,300,000
Minimum
Organization And Summary Of Significant Accounting Policies [Line Items]
Intangible assets estimated useful lives	1 year
Maximum
Organization And Summary Of Significant Accounting Policies [Line Items]
Intangible assets estimated useful lives	24 years

XML

Basic and Diluted Earnings Per Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share, shares	0.5	0.5

XML

Basic and Diluted Earnings per Common Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Earnings Per Share Disclosure [Line Items]
Net income attributable to Korn/Ferry International	$ 3,208	$ 23,082
Less: distributed and undistributed earnings to nonvested restricted stockholders	44	224
Basic net earnings attributable to common stockholders	3,164	22,858
Add: undistributed earnings to nonvested restricted stockholders		176
Less: reallocation of undistributed earnings to nonvested restricted stockholders		174
Diluted net earnings attributable to common stockholders	$ 3,164	$ 22,860
Basic weighted-average number of common shares outstanding	56,189	49,493
Diluted weighted-average number of common shares outstanding	56,576	50,014
Basic earnings per share	$ 0.06	$ 0.46
Diluted earnings per share	$ 0.06	$ 0.46
ESPP
Earnings Per Share Disclosure [Line Items]
Stock	11	3
Restricted Stock
Earnings Per Share Disclosure [Line Items]
Stock	316	452
Stock Options
Earnings Per Share Disclosure [Line Items]
Stock	60	66

XML

Summary of Changes in Stockholders' Equity (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Balance as of April 30, 2016	$ 1,047,301
Net income	4,068	$ 23,082
Foreign currency translation adjustments	(13,274)	(15,632)
Deferred compensation and pension plan adjustments, net of tax	462	$ 447
Dividends declared	(5,909)
Purchase of stock	(4,161)
Issuance of stock	2,784
Stock-based compensation	4,739
Tax benefit from exercise of stock options and vesting of restricted stock	332
Balance as of July 31, 2016	1,036,342
Parent
Balance as of April 30, 2016	1,045,300
Net income	3,208
Foreign currency translation adjustments	(13,128)
Deferred compensation and pension plan adjustments, net of tax	462
Dividends declared	(5,909)
Purchase of stock	(4,161)
Issuance of stock	2,784
Stock-based compensation	4,739
Tax benefit from exercise of stock options and vesting of restricted stock	332
Balance as of July 31, 2016	1,033,627
Noncontrolling Interest
Balance as of April 30, 2016	2,001
Net income	860
Foreign currency translation adjustments	(146)
Balance as of July 31, 2016	$ 2,715

XML

Components of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation adjustments	$ (49,467)	$ (36,339)
Deferred compensation and pension plan adjustments, net of tax	(21,110)	(21,572)
Accumulated other comprehensive loss, net	$ (70,577)	$ (57,911)

XML

Changes in Each Component of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands		3 Months Ended
		Jul. 31, 2016	Jul. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		$ 1,045,300
Unrealized losses arising during the period		(13,128)	$ (15,636)
Reclassification of realized net losses to net income		462	447
Ending balance		1,033,627
Accumulated Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		(36,339)	(20,919)
Unrealized losses arising during the period		(13,128)	(15,632)
Ending balance		(49,467)	(36,551)
Accumulated Defined Benefit Plans Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	[1]	(21,572)	(19,708)
Reclassification of realized net losses to net income	[1]	462	447
Ending balance	[1]	(21,110)	(19,261)
Accumulated Net Unrealized Investment Gain (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			4
Unrealized losses arising during the period			(4)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		(57,911)	(40,623)
Ending balance		$ (70,577)	$ (55,812)

[1] The tax effect on the reclassifications of realized net losses was $0.3 million for both the three months ended July 31, 2016 and 2015.

XML

Changes in Each Component of Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax effect on reclassifications of realized net losses	$ 0.3	$ 0.3

XML

Components of Stock-Based Compensation Expense Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense, pre-tax	$ 4,915	$ 3,691
Tax benefit from stock-based compensation expense	(1,484)	(1,154)
Total stock-based compensation expense, net of tax	3,431	2,537
Restricted Stock
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense, pre-tax	4,739	3,554
Stock Options
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense, pre-tax		17
ESPP
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense, pre-tax	$ 176	$ 120

XML

Employee Stock Plans - Additional Information (Detail)	3 Months Ended
	Jul. 31, 2016 USD ($) $ / shares shares	Jul. 31, 2015 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase of common stock | $	$ 4,161,000	$ 6,573,000
Shares repurchased during the period	0	0
Time Based Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Time Based Restricted Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Market Based Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Shares outstanding	600,000
Total unrecognized compensation cost related to non-vested awards | $	$ 11,700,000
Performance Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Shares outstanding	100,000
Total unrecognized compensation cost related to non-vested awards | $	$ 9,300,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from issuance of common stock upon exercise of employee stock options | $	$ 400,000	$ 1,100,000
Stock Options | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued for stock options exercised	32,470	71,428
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to non-vested awards | $	$ 41,600,000
Expected cost recognized over weighted-average period	2 years 8 months 12 days
Shares repurchased during the period to pay for taxes	185,754	188,104
Purchase of common stock | $	$ 4,200,000	$ 6,600,000
Stock Incentive Plan 2008
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares reserved for issuance	5,700,000
Issuance of full-value stock awards limitation, required ratio to stock options	1.91
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares reserved for issuance	3,000,000
Authorized payroll deductions	15.00%
Authorized payroll deductions, value | $	$ 25,000
Fair market price of common stock	85.00%
Shares available for future issuance	1,400,000
Employees stock purchased	114,011	44,334
Employees stock purchased, price per share | $ / shares	$ 17.60	$ 29.55

XML

Restricted Stock Activity (Detail) - Restricted Stock shares in Thousands	3 Months Ended
	Jul. 31, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Non-vested, beginning of year | shares	1,506
Shares, Granted | shares	718
Shares, Vested | shares	(666)
Shares, Forfeited/expired | shares	(11)
Shares, Non-vested, end of year | shares	1,547
Weighted-Average Grant Date Fair Value, Non-vested, beginning of year | $ / shares	$ 34.12
Weighted-Average Grant Date Fair Value, Granted | $ / shares	19.89
Weighted-Average Grant Date Fair Value, Vested | $ / shares	21.80
Weighted-Average Grant Date Fair Value, Forfeited/expired | $ / shares	26.35
Weighted-Average Grant Date Fair Value, Non-vested, end of year | $ / shares	$ 32.87

XML

Cash, Trading Securities and Foreign Currency Forward Contracts' Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value Recorded as Cash and Cash Equivalents, Current Portion of Current Marketable Securities, Non-Current Marketable Securities, or Other Accrued Liabilities (Detail) - USD ($) $ in Thousands		Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2015
Investment Holdings [Line Items]
Cash and cash equivalents		$ 244,073	$ 273,252	$ 276,514	$ 380,838
Marketable Securities, Current		3,475	11,338
Marketable securities, non-current		133,502	130,092
Other Accrued Liabilities		(149,865)	(145,023)
Fair Value, Inputs, Level 1
Investment Holdings [Line Items]
Cost		378,520	415,840
Unrealized Gains		3,477	1,395
Unrealized Losses		(947)	(2,553)
Fair Value		381,050	414,682
Cash and cash equivalents		244,073	273,252
Marketable Securities, Current		3,475	11,338
Marketable securities, non-current		133,502	130,092
Fair Value, Inputs, Level 1 | Cash
Investment Holdings [Line Items]
Cash and cash equivalents		119,660	155,702
Cost		119,660	155,702
Fair Value		119,660	155,702
Fair Value, Inputs, Level 1 | Money Market Funds
Investment Holdings [Line Items]
Cash and cash equivalents		124,413	117,550
Fair Value		124,413	117,550
Cost		124,413	117,550
Fair Value, Inputs, Level 1 | Mutual Funds
Investment Holdings [Line Items]
Unrealized Gains	[1]	3,477	1,395
Unrealized Losses	[1]	(947)	(2,553)
Marketable Securities, Current	[1]	3,475	11,338
Marketable securities, non-current	[1]	133,502	130,092
Cost	[1]	134,447	142,588
Fair Value	[1]	136,977	141,430
Fair Value, Inputs, Level 2 | Foreign Exchange Forward Contracts
Investment Holdings [Line Items]
Unrealized Gains		419	324
Unrealized Losses		(966)	(1,041)
Fair Value		(547)	(717)
Other Accrued Liabilities		$ (547)	$ (717)

[1] These investments are held in trust for settlement of the Company's vested and unvested obligations of $133.9 million and $138.8 million as of July 31, 2016 and April 30, 2016, respectively, under the ECAP (see Note 7 - Deferred Compensation and Retirement Plans). During the three months ended July 31, 2016 and 2015, the fair value of the investments increased; therefore, the Company recognized income of $3.9 million and $0.7 million, respectively, which was recorded in other income (loss), net.

XML

Cash, Trading Securities and Foreign Currency Forward Contracts' Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value Recorded as Cash and Cash Equivalents, Current Portion of Current Marketable Securities, Non-Current Marketable Securities, or Other Accrued Liabilities (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016
Investment Holdings [Line Items]
Obligations for which assets are held in trust	$ 133,900		$ 138,800
Gain (loss) on marketable securities	$ 3,915	$ 665

XML

Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2015	Jul. 31, 2016	Apr. 30, 2016
Financial Instrument [Line Items]
Proceeds from maturities of available-for-sale securities	$ 3.0
Not Designated as Hedge Instrument | Foreign Exchange Forward Contracts | Other Accrued Liabilities | Derivatives Purchased
Financial Instrument [Line Items]
Derivative notional amount		$ 13.1	$ 14.5
Not Designated as Hedge Instrument | Foreign Exchange Forward Contracts | Other Accrued Liabilities | Derivatives Sold
Financial Instrument [Line Items]
Derivative notional amount		$ 58.5	$ 44.3

XML

Fair Value of Derivatives Not Designated as Hedge Instruments (Detail) - Not Designated as Hedge Instrument - Foreign Exchange Forward Contracts - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Derivative assets:
Fair Value of Derivative Assets	$ 419	$ 324
Derivative liabilities:
Fair Value of Derivative Liabilities	$ 966	$ 1,041

XML

Components of Net Periodic Benefit Costs (Detail) - Deferred Compensation Plan - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 1,062	$ 703
Amortization of actuarial loss	763	731
Service cost	609
Expected return on plan assets	(390)
Net periodic benefit costs	$ 2,044	$ 1,434

XML

Deferred Compensation and Retirement Plans - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Increase in market value of the underlying COLI investments	$ 2,498	$ 2,494
Recognized investment income	3,915	665
CSV of COLI Contracts
Defined Benefit Plan Disclosure [Line Items]
Gross CSV	178,600		$ 175,700
Outstanding policy loans	68,400		$ 68,400
Increase in market value of the underlying COLI investments	2,500	2,500
Executive Capital Accumulation Plan
Defined Benefit Plan Disclosure [Line Items]
Compensation expense recognized	$ 3,200	$ 700
Executive Capital Accumulation Plan | Minimum
Defined Benefit Plan Disclosure [Line Items]
Deferred compensation arrangement vesting period	4 years
Executive Capital Accumulation Plan | Maximum
Defined Benefit Plan Disclosure [Line Items]
Deferred compensation arrangement vesting period	5 years

XML

Restructuring Charges, Net - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Apr. 30, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 24,520
Restructuring liability included in other long-term liabilities	4,500	$ 600
Severance
Restructuring Cost and Reserve [Line Items]
Restructuring charges	11,472
Facilities
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 13,048

XML

Changes In Restructuring Liability (Detail) $ in Thousands	3 Months Ended
	Jul. 31, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Liability, Beginning period	$ 5,962
Restructuring charges, net	24,520
Reductions for cash payments	(6,575)
Reductions for non-cash charges	(2,480)
Exchange rate fluctuations	(177)
Liability, Ending period	21,250
Severance
Restructuring Cost and Reserve [Line Items]
Liability, Beginning period	5,293
Restructuring charges, net	11,472
Reductions for cash payments	(4,788)
Exchange rate fluctuations	(111)
Liability, Ending period	11,866
Facilities
Restructuring Cost and Reserve [Line Items]
Liability, Beginning period	669
Restructuring charges, net	13,048
Reductions for cash payments	(1,787)
Reductions for non-cash charges	(2,480)
Exchange rate fluctuations	(66)
Liability, Ending period	$ 9,384

XML

Summary of Restructuring Liability by Segment (Detail) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 21,250	$ 5,962
Operating Segments | Executive Search
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	1,999	1,594
Operating Segments | Executive Search | North America
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	1,268	5
Operating Segments | Executive Search | EMEA
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	498	1,556
Operating Segments | Executive Search | Asia Pacific
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	50	33
Operating Segments | Executive Search | Latin America
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	183
Operating Segments | Hay Group
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	18,924	4,123
Operating Segments | Futurestep
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	204	245
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	123
Severance
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	11,866	5,293
Severance | Operating Segments | Executive Search
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	1,180	1,566
Severance | Operating Segments | Executive Search | North America
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	743
Severance | Operating Segments | Executive Search | EMEA
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	414	1,533
Severance | Operating Segments | Executive Search | Asia Pacific
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	6	33
Severance | Operating Segments | Executive Search | Latin America
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	17
Severance | Operating Segments | Hay Group
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	10,563	3,727
Severance | Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	123
Facilities
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	9,384	669
Facilities | Operating Segments | Executive Search
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	819	28
Facilities | Operating Segments | Executive Search | North America
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	525	5
Facilities | Operating Segments | Executive Search | EMEA
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	84	23
Facilities | Operating Segments | Executive Search | Asia Pacific
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	44
Facilities | Operating Segments | Executive Search | Latin America
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	166
Facilities | Operating Segments | Hay Group
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	8,361	396
Facilities | Operating Segments | Futurestep
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 204	$ 245

XML

Business Segments - Additional Information (Detail)	3 Months Ended
	Jul. 31, 2016 Segment
Segment Reporting Information [Line Items]
Number of business segments	3

XML

Business Segments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Segment Reporting Information [Line Items]
Fee revenue	$ 375,621	$ 267,394
Deferred revenue adjustment due to acquisition	3,535
Adjusted fee revenue	379,156
Total revenue	392,933	279,335
Net income	4,068	23,082
Other loss (income), net	(4,259)	74
Interest expense, net	3,061	299
Equity in earnings of unconsolidated subsidiaries, net	(79)	(725)
Income tax provision	1,725	10,174
Operating income (loss)	4,516	32,904
Depreciation and amortization	11,444	7,423
Other income (loss), net	4,259	(74)
Equity in earnings of unconsolidated subsidiaries, net	79	725
EBITDA	20,298	40,978
Restructuring charges, net	24,520
Integration/acquisition costs	8,027	674
Deferred revenue adjustment due to acquisition	3,535
Adjusted EBITDA	56,380	41,652
Operating Segments | Executive Search
Segment Reporting Information [Line Items]
Fee revenue	146,361	152,090
Adjusted fee revenue	146,361
Total revenue	151,468	157,992
Operating income (loss)	26,927	34,915
Depreciation and amortization	1,380	1,516
Other income (loss), net	472	432
Equity in earnings of unconsolidated subsidiaries, net	79	86
EBITDA	28,858	36,949
Restructuring charges, net	2,816
Adjusted EBITDA	31,674	36,949
Operating Segments | Executive Search | North America
Segment Reporting Information [Line Items]
Fee revenue	81,802	90,359
Adjusted fee revenue	81,802
Total revenue	85,425	94,399
Operating income (loss)	16,468	24,145
Depreciation and amortization	830	827
Other income (loss), net	288	32
Equity in earnings of unconsolidated subsidiaries, net	79	86
EBITDA	17,665	25,090
Restructuring charges, net	1,706
Adjusted EBITDA	19,371	25,090
Operating Segments | Executive Search | EMEA
Segment Reporting Information [Line Items]
Fee revenue	35,370	36,090
Adjusted fee revenue	35,370
Total revenue	36,249	37,171
Operating income (loss)	6,027	6,276
Depreciation and amortization	211	365
Other income (loss), net	24	143
EBITDA	6,262	6,784
Restructuring charges, net	128
Adjusted EBITDA	6,390	6,784
Operating Segments | Executive Search | Asia Pacific
Segment Reporting Information [Line Items]
Fee revenue	19,626	19,215
Adjusted fee revenue	19,626
Total revenue	20,180	19,990
Operating income (loss)	2,102	2,986
Depreciation and amortization	225	246
Other income (loss), net	87	18
EBITDA	2,414	3,250
Restructuring charges, net	622
Adjusted EBITDA	3,036	3,250
Operating Segments | Executive Search | Latin America
Segment Reporting Information [Line Items]
Fee revenue	9,563	6,426
Adjusted fee revenue	9,563
Total revenue	9,614	6,432
Operating income (loss)	2,330	1,508
Depreciation and amortization	114	78
Other income (loss), net	73	239
EBITDA	2,517	1,825
Restructuring charges, net	360
Adjusted EBITDA	2,877	1,825
Operating Segments | Hay Group
Segment Reporting Information [Line Items]
Fee revenue	174,582	69,240
Deferred revenue adjustment due to acquisition	3,535
Adjusted fee revenue	178,117
Total revenue	181,508	71,441
Operating income (loss)	(7,743)	7,495
Depreciation and amortization	8,016	3,748
Other income (loss), net	235	(863)
EBITDA	508	10,380
Restructuring charges, net	21,488
Integration/acquisition costs	4,264	329
Deferred revenue adjustment due to acquisition	3,535
Adjusted EBITDA	29,795	10,709
Operating Segments | Futurestep
Segment Reporting Information [Line Items]
Fee revenue	54,678	46,064
Adjusted fee revenue	54,678
Total revenue	59,957	49,902
Operating income (loss)	7,513	6,189
Depreciation and amortization	623	585
Other income (loss), net	(2)
EBITDA	8,134	6,774
Adjusted EBITDA	8,134	6,774
Corporate
Segment Reporting Information [Line Items]
Operating income (loss)	(22,181)	(15,695)
Depreciation and amortization	1,425	1,574
Other income (loss), net	3,554	357
Equity in earnings of unconsolidated subsidiaries, net		639
EBITDA	(17,202)	(13,125)
Restructuring charges, net	216
Integration/acquisition costs	3,763	345
Adjusted EBITDA	$ (13,223)	$ (12,780)

XML

Long-Term Debt - Additional Information (Detail) - USD ($)		3 Months Ended
	Jun. 15, 2016	Jul. 31, 2016	Apr. 30, 2016
Debt Instrument [Line Items]
Principal payment on term loan facility		$ 140,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility borrowings		0	$ 0
Standby Letters of Credit
Debt Instrument [Line Items]
Long-term debt arrangement		2,800,000	2,800,000
Other Financial Institutions | Standby Letters of Credit
Debt Instrument [Line Items]
Long-term debt arrangement		$ 5,600,000	6,400,000
Credit Agreement
Debt Instrument [Line Items]
Credit agreement initiation date	Jun. 15, 2016
Line of credit facility, maximum borrowing capacity	$ 400,000,000
Line of credit facility borrowings	275,000,000
Principal payment on term loan facility	140,000,000
Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Applicable margin on variable interest rate		1.25%
Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Applicable margin on variable interest rate		2.00%
Credit Agreement | Base Rate Loans | Minimum
Debt Instrument [Line Items]
Applicable margin on variable interest rate		0.25%
Credit Agreement | Base Rate Loans | Maximum
Debt Instrument [Line Items]
Applicable margin on variable interest rate		1.00%
Credit Agreement | Term Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 275,000,000
Term loan amortization percentage year one	7.50%
Term loan amortization percentage year two	7.50%
Term loan amortization percentage year three	10.00%
Term loan amortization percentage year four	10.00%
Term loan amortization percentage year five	10.00%
Long-term debt		$ 275,000,000	$ 140,000,000
Line of credit facility, maturity date		Jun. 15, 2021
Average interest rate		2.40%
Credit Agreement | Term Facility | Minimum
Debt Instrument [Line Items]
Quarterly fee on average daily unused amount of Credit Facilities		0.20%
Credit Agreement | Term Facility | Maximum
Debt Instrument [Line Items]
Quarterly fee on average daily unused amount of Credit Facilities		0.35%
Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 125,000,000
Line of credit facility, maturity date		Jun. 15, 2021

XML

Subsequent Events - Additional Information (Detail) - Subsequent Event - Dividend Declared	Sep. 07, 2016 $ / shares
Subsequent Event [Line Items]
Dividends payable, declared date	Sep. 07, 2016
Dividends payable, per share amount	$ 0.10
Dividends payable, payable date	Oct. 14, 2016
Dividends declared, record date	Sep. 26, 2016