Korn/Ferry announced third quarter fiscal 2005 diluted earnings per share of $0.23 compared to $0.10 in Q3’04.
“Job creation continues at the senior level across almost all industry sectors and geographic regions,” said Paul C. Reilly, Chairman and CEO of Korn/Ferry International. “Our strong results reflect a fundamental shift among employers from a focus on productivity improvement to a quest for growth. As corporations feel more confident in their ability to meet financial targets, the war for talent will continue to heat up.”
Fiscal third quarter fee revenue of $116.9 million increased $35.5 million or 44% from Q3’04 of $81.4 million. Fee revenue improved in all regions due to an increase in both the number of new engagements opened as well as average fees. Exchange rates impacted fee revenue favorably by $4.1 million in Q3’05 compared to Q3’04.
Compensation and benefits expense of $74.6 million increased $21.0 million, or 39%, compared to $53.6 million in Q3’04. The increase reflects additional bonus expense as a result of improved revenues and profitability. Exchange rates impacted compensation and benefit expense unfavorably by $2.3 million in Q3’05 compared to Q3’04.
General and administrative expense was $22.7 million compared to $18.7 million in Q3’04. The increase of $4.0 million, or 21%, is primarily due to additional professional fees, including compliance costs associated with Section 404 of the Sarbanes-Oxley Act, and increased business development costs.
Operating income of $17.1 million improved $10.9 million compared to Q3’04.
Cash, cash equivalents and marketable securities was $156.9 million at January 31, 2005 compared to $108.1 million at April 30, 2004.
Interest expense, primarily related to borrowings under Company Owned Life Insurance (COLI) policies and Korn/Ferry’s convertible securities, was $2.7 million in the current quarter, consistent with prior year. At January 31, 2005, Korn/Ferry had no outstanding borrowings under its credit facility.
Murdok | Breaking eBusiness News
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