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FTI Consulting Reports Second Quarter 2017 Financial Results

•  Second Quarter Revenues of $444.7 Million

•  Second Quarter Fully Diluted Loss Per Share of ($0.13); Adjusted EPS of $0.40

/EIN News/ -- WASHINGTON, July 27, 2017 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN) today released its financial results for the quarter ended June 30, 2017.

For the quarter, revenues of $444.7 million declined $15.4 million, or 3.4%, compared to revenues of $460.1 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues decreased $7.4 million, or 1.6%, compared to the prior year quarter. The decrease in revenues was primarily driven by lower demand for services within the Corporate Finance & Restructuring segment.

Second quarter 2017 net loss of $5.2 million compared to net income of $26.5 million in the prior year quarter. Net loss included a special charge of $30.1 million, which included $16.1 million of severance costs related to the termination of approximately 4% of the Company’s more than 4,700 employees, $12.4 million of lease curtailment charges related to the Company’s Washington, D.C., office relocation and $1.6 million of costs related to the disposal or closing of several small international offices. The Company expects that these actions will result in cost savings of approximately $23.0 million over the remainder of 2017. Adjusted EBITDA, which excludes the special charge, was $40.8 million, or 9.2% of revenues, compared to $56.6 million, or 12.3% of revenues in the prior year quarter. The decline in Adjusted EBITDA was due to lower revenues.

On a GAAP basis, second quarter 2017 fully diluted loss per share was ($0.13) compared to fully diluted earnings per share (“EPS”) of $0.64 in the prior year quarter. In total, the second quarter 2017 special charge reduced EPS by $0.52. EPS in the prior year quarter included a $1.7 million special charge, which reduced EPS by $0.02. Adjusted EPS, which excludes special charges, was $0.40 compared to $0.66 in the prior year quarter.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “We had a slow start to 2017. Despite this, we continue to expect a stronger second half of the year. This expectation is supported by the strong sequential improvement compared to the first quarter and significant new wins in our Corporate Finance & Restructuring segment; continued investment where we have confidence we can grow; and the disciplined actions we have taken to align costs with demand and reduce overhead. We believe this combination of sustained investment, disciplined cost control and the strength of our franchise will translate into second half financials that more closely reflect the underlying strength of our businesses.”

Cash Position and Capital Allocation
Net cash provided by operating activities of $10.9 million for the three months ended June 30, 2017, compared to $73.7 million for the three months ended June 30, 2016. The year-over-year difference in operating cash flows is due to lower cash receipts resulting from lower revenues and slower collections and increased compensation payments due to annual increases in salaries, increased headcount and an additional US payroll.

During the quarter, the Company repurchased 1,887,033 shares of its common stock at an average price of $34.74 for a total of $65.6 million. As of June 30, 2017, $78.9 million remained available under the Company’s $200.0 million share repurchase authorization.

Total debt of $485.0 million at June 30, 2017, compared to $500.0 million at June 30, 2016. Cash and cash equivalents were $138.5 million at June 30, 2017, compared to $182.7 million at June 30, 2016. Total debt, net of cash, of $346.5 million at June 30, 2017, compared to $317.3 million at June 30, 2016.

Second Quarter 2017 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment decreased $14.7 million, or 11.1%, to $117.5 million in the quarter compared to $132.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $12.5 million, or 9.4%, compared to the prior year quarter. The decrease in revenues was primarily due to lower demand for restructuring services globally, which was partially offset by higher success fees. Adjusted Segment EBITDA was $20.0 million, or 17.1% of segment revenues, compared to $32.0 million, or 24.2% of segment revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to lower revenues.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $6.8 million, or 5.7%, to $111.4 million in the quarter compared to $118.2 million in the prior year quarter. The decrease in revenues was primarily due to lower demand for global investigations and health solutions services, which was partially offset by higher demand for construction solutions services. Adjusted Segment EBITDA was $13.0 million, or 11.7% of segment revenues, compared to $15.2 million, or 12.9% of segment revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to lower revenues, which was partially offset by lower compensation resulting from headcount reductions taken in the health solutions practice in 2016.

Economic Consulting
Revenues in the Economic Consulting segment increased $6.0 million, or 5.1%, to $124.0 million in the quarter compared to $118.0 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $8.6 million, or 7.2%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for antitrust services in North America. Adjusted Segment EBITDA was $15.5 million, or 12.5% of segment revenues, compared to $15.4 million, or 13.0% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was consistent with the prior year quarter, as the increase in revenues was offset by increased compensation costs related to an increase in billable headcount.

Technology
Revenues in the Technology segment increased $3.7 million, or 8.8%, to $45.6 million in the quarter compared to $41.9 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $4.2 million, or 10.1%, compared to the prior year quarter. The increase in revenues was primarily driven by higher consulting demand related to merger and acquisition related “second request” services, which was partially offset by reduced hosting revenue. Adjusted Segment EBITDA was $5.4 million, or 11.9% of segment revenues, compared to $5.0 million, or 12.0% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was a result of higher revenues, which was largely offset by higher cost of service and investment in future revenue generating initiatives.

Strategic Communications
Revenues in the Strategic Communications segment decreased $3.7 million, or 7.4%, to $46.2 million in the quarter compared to $49.9 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $2.0 million, or 4.0%, compared to the prior year quarter. The decrease in revenues was primarily due to a decline in project-based revenues in North America, particularly for financial communications and corporate reputation services. Adjusted Segment EBITDA was $4.9 million, or 10.5% of segment revenues, compared to $8.4 million, or 16.9% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was due to lower revenues.

2017 Guidance
The Company reaffirms its full year 2017 revenue guidance of between $1.775 billion and $1.875 billion. Given the special charge in the second quarter of 2017, the Company is revising its full year 2017 GAAP EPS guidance. The Company now estimates that full year 2017 GAAP EPS will range between $1.37 and $1.67. This compares to the previous GAAP EPS guidance range of between $1.75 and $2.10. The Company is maintaining its full year 2017 Adjusted EPS guidance of between $1.90 and $2.20. The variance between GAAP EPS and Adjusted EPS guidance for full year 2017 is related to the second quarter 2017 special charge of $30.1 million, or $0.52 per share, resulting from headcount reductions, the Company’s Washington, D.C., office relocation and other costs related to the disposal or closure of several small international offices.

Second Quarter 2017 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2017 financial results at 9:00 a.m. Eastern Time on July 27, 2017. The call can be accessed live and will be available for replay over the Internet for 90 days by logging on to the Company's investor relations website here.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,600 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $1.81 billion in revenues during fiscal year 2016. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measures

In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with GAAP. Certain of these measures are considered “non-GAAP financial measures” under the SEC rules. Specifically, we have referred to the following non-GAAP measures:

  • Total Segment Operating Income
  • Adjusted EBITDA
  • Total Adjusted Segment EBITDA
  • Adjusted EBITDA Margin
  • Adjusted Net Income (Loss)
  • Adjusted Earnings per Diluted Share

We have included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA below in order to more fully define the components of certain non-GAAP financial measures presented in this earnings release. We define Segment Operating Income (Loss) as a segment’s share of Consolidated Operating Income (Loss). We define Total Segment Operating Income (Loss), which is a non-GAAP financial measure, as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of Consolidated Operating Income (Loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We define Adjusted Segment EBITDA Margin as Adjusted Segment EBITDA as a percentage of a segment’s revenues.

We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We believe that the non-GAAP financial measures, which exclude the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, when considered together with our GAAP financial results and GAAP measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income (loss) and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that this non-GAAP financial measure, which excludes the effects of the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Safe Harbor Statement
This press release includes "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, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes, ""forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and estimates will be achieved, and the Company's actual results may differ materially from our expectations, beliefs and estimates. Further, preliminary results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where services are performed, adverse financial, real estate, fluctuations in the price per share of our common stock, other market and general economic conditions and other future events, which could impact each of our segments differently and could be outside of our control, the pace and timing of the consummation and integration of future acquisitions, the Company's ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients, and other risks described under the heading "Item 1A Risk Factors" in the Company's most recent Form 10-K filed with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations," and in the Company's other filings with the SEC, including as they will be amended and restated in the Company’s quarterly report on the Form 10-Q for the quarter ended June 30, 2017. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW


FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(in thousands, except per share data)  
         
  Three Months Ended  
  June 30,   
    2017       2016    
  (unaudited)  
         
Revenues $ 444,715     $ 460,147    
         
Operating expenses        
Direct cost of revenues   304,071       303,194    
Selling, general and administrative expenses   107,342       108,245    
Special charges   30,074       1,750    
Acquisition-related contingent consideration   777       206    
Amortization of other intangible assets   2,422       2,590    
    444,686       415,985    
         
Operating income   29       44,162    
         
Other income (expense)        
Interest income and other   1,592       4,125    
Interest expense   (6,250 )     (6,303 )  
    (4,658 )     (2,178 )  
         
Income (loss) before income tax provision   (4,629 )     41,984    
         
Income tax provision   527       15,437    
         
Net income (loss) $ (5,156 )   $ 26,547    
         
Earnings (loss) per common share - basic $ (0.13 )   $ 0.65    
Weighted average common shares outstanding - basic   39,555       40,820    
         
Earnings (loss) per common share - diluted $ (0.13 )   $ 0.64    
Weighted average common shares outstanding - diluted   39,555       41,599    
         
         
Other comprehensive income (loss), net of tax        
Foreign currency translation adjustments, net of tax expense of $0 $ 10,174     $ (18,809 )  
Total other comprehensive income (loss), net of tax   10,174       (18,809 )  
Comprehensive income $ 5,018     $ 7,738    
         

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(in thousands, except per share data)  
         
  Six Months Ended  
  June 30,   
    2017       2016    
  (unaudited)  
         
Revenues $ 891,059     $ 930,432    
         
Operating expenses        
Direct cost of revenues   613,143       608,830    
Selling, general and administrative expenses   214,637       211,854    
Special charges   30,074       6,811    
Acquisition-related contingent consideration   1,172       1,340    
Amortization of other intangible assets   4,915       5,196    
    863,941       834,031    
         
Operating income   27,118       96,401    
         
Other income (expense)        
Interest income and other   2,197       6,682    
Interest expense   (12,051 )     (12,532 )  
    (9,854 )     (5,850 )  
         
Income before income tax provision   17,264       90,551    
         
Income tax provision   8,404       33,823    
         
Net income $ 8,860     $ 56,728    
         
Earnings per common share - basic $ 0.22     $ 1.40    
Weighted average common shares outstanding - basic   40,039       40,663    
         
Earnings per common share - diluted $ 0.22     $ 1.37    
Weighted average common shares outstanding - diluted   40,502       41,373    
         
         
Other comprehensive income (loss), net of tax        
Foreign currency translation adjustments, net of tax expense of $0 $ 17,544     $ (19,167 )  
Total other comprehensive income (loss), net of tax   17,544       (19,167 )  
Comprehensive income $ 26,404     $ 37,561    
         

 

FTI CONSULTING, INC.  
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES  
(in thousands, except per share data)  
                         
          Three Months Ended June 30,   Six Months Ended June 30,  
            2017       2016       2017       2016    
          (unaudited)   (unaudited)  
                       
Net income (loss)       $ (5,156 )   $ 26,547     $ 8,860     $ 56,728    
Add back:                        
Special charges         30,074       1,750       30,074       6,810    
Tax impact of special charges       (9,103 )     (691 )     (9,103 )     (2,482 )  
Remeasurement of acquisition-related contingent consideration     536       -       702       980    
Tax impact of remeasurement of acquisition-related contingent consideration     (204 )     -       (269 )     (380 )  
Adjusted Net Income       $ 16,147     $ 27,606     $ 30,264     $ 61,656    
                         
Earnings (loss) per common share – diluted   $ (0.13 )   $ 0.64     $ 0.22     $ 1.37    
Add back:                        
Special charges         0.75       0.04       0.74       0.16    
Tax impact of special charges       (0.23 )     (0.02 )     (0.22 )     (0.06 )  
Remeasurement of acquisition-related contingent consideration     0.01       -       0.02       0.02    
Tax impact of remeasurement of acquisition-related contingent consideration     -       -       (0.01 )     -    
Adjusted earnings per common share - diluted   $ 0.40     $ 0.66     $ 0.75     $ 1.49    
                         
Weighted average number of common shares outstanding – diluted(1)     39,932       41,599       40,502       41,373    
                         
(1) For the three months ended June 30, 2017, the Company reported a net loss. For the period, the basic weighted average common shares outstanding equals the diluted weighted average common shares outstanding for purposes of calculating U.S. GAAP earnings per share because potentially dilutive securities would be antidilutive. For non-GAAP purposes, the Adjusted EPS and diluted weighted average number of common shares outstanding presented herein reflect the impact of the inclusion of share-based awards that are considered dilutive based on the impact of the add-backs included in Adjusted Net Income above.  
   
          Year Ended December 31, 2017          
          Low   High          
Guidance on estimated earnings per common share - diluted (GAAP)(1)   $ 1.37     $ 1.67            
Special charges, net of tax       0.52       0.52            
Remeasurement of acquisition-related contingent consideration, net of tax     0.01       0.01            
Guidance on estimated adjusted earnings per common share (Non-GAAP)(1)    $ 1.90     $ 2.20            
                         
(1) The forward-looking guidance on estimated 2017 earnings per diluted share (“EPS”) and adjusted earnings per common share - diluted ("Adjusted EPS") do not reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to future impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and/or losses on early extinguishment of debt except for the actual charges taken during the six months ended June 30, 2017, as these items are dependent on future events that are uncertain and difficult to predict.  
                         

 

FTI CONSULTING, INC.  
OPERATING RESULTS BY BUSINESS SEGMENT  
            Adjusted          Average    Revenue-  
    Segment    Adjusted   EBITDA        Billable    Generating  
    Revenues   EBITDA   Margin   Utilization    Rate    Headcount  
      (in thousands)                (at period end)  
Three Months Ended June 30, 2017 (unaudited)                          
Corporate Finance & Restructuring   $ 117,487   $ 20,048     17.1 %   60 %   $ 403   881  
Forensic and Litigation Consulting     111,410     13,032     11.7 %   60 %   $ 310   1,070  
Economic Consulting     124,004     15,509     12.5 %   68 %   $ 542   652  
Technology(1)     45,566     5,421     11.9 %   N/M   N/M   301  
Strategic Communications(1)     46,248     4,876     10.5 %   N/M   N/M   659  
    $ 444,715   $ 58,886     13.2 %           3,563  
Unallocated Corporate         (18,098 )                  
Adjusted EBITDA        $ 40,788     9.2 %              
                           
Six Months Ended June 30, 2017 (unaudited)                          
Corporate Finance & Restructuring   $ 223,388   $ 30,373     13.6 %   60 %   $ 390   881  
Forensic and Litigation Consulting     222,816     26,553     11.9 %   60 %   $ 320   1,070  
Economic Consulting     263,225     35,619     13.5 %   70 %   $ 548   652  
Technology(1)     91,653     13,225     14.4 %   N/M   N/M   301  
Strategic Communications(1)     89,977     9,133     10.2 %   N/M   N/M   659  
    $ 891,059   $ 114,903     12.9 %           3,563  
Unallocated Corporate          (35,796 )                  
Adjusted EBITDA        $   79,107     8.9 %              
                           
Three Months Ended June 30, 2016 (unaudited)                          
Corporate Finance & Restructuring   $ 132,142   $ 32,041     24.2 %   68 %   $ 422   853  
Forensic and Litigation Consulting     118,193     15,190     12.9 %   61 %   $ 333   1,117  
Economic Consulting     118,006     15,381     13.0 %   71 %   $ 526   604  
Technology(1)     41,882     5,035     12.0 %   N/M   N/M   301  
Strategic Communications(1)     49,924     8,440     16.9 %   N/M   N/M   606  
    $ 460,147   $ 76,087     16.5 %           3,481  
Unallocated Corporate         (19,507 )                  
Adjusted EBITDA        $ 56,580     12.3 %              
                           
Six Months Ended June 30, 2016 (unaudited)                          
Corporate Finance & Restructuring   $ 259,298   $ 63,644     24.5 %   71 %   $ 402   853  
Forensic and Litigation Consulting     237,197     34,998     14.8 %   62 %   $ 333   1,117  
Economic Consulting     248,737     36,700     14.8 %   75 %   $ 529   604  
Technology(1)     90,163     12,858     14.3 %   N/M   N/M   301  
Strategic Communications(1)     95,037     14,548     15.3 %   N/M   N/M   606  
    $ 930,432   $ 162,748     17.5 %           3,481  
Unallocated Corporate         (37,311 )                  
Adjusted EBITDA        $ 125,437     13.5 %              
                           
                           
(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented, as they are not meaningful as a segment-wide metric.  
                           

 

RECONCILIATION OF NET INCOME (LOSS) AND OPERATING INCOME (LOSS) TO ADJUSTED EBITDA  
(in thousands)  
                                     
Three Months Ended June 30, 2017 (unaudited) Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Unallocated
Corporate
  Total    
                                     
Net loss                            $   (5,156 )    
  Interest income and other                             (1,592 )    
  Interest expense                               6,250      
  Income tax provision                               527      
Operating income (loss)   $   15,447   $   1,183   $   8,008   $   (1,568 )   $   (755 )   $   (22,286 )   $   29      
  Depreciation and amortization     768       1,032       1,436       3,001         546         944         7,727      
  Amortization of other intangible assets     784       372       155       161         950         -          2,422      
  Special charges       3,049       10,445       5,910       3,827         3,599         3,244         30,074      
  Remeasurement of acquisition-related contingent consideration     -        -        -        -          536         -          536      
Adjusted EBITDA      $   20,048   $   13,032   $   15,509   $   5,421     $   4,876     $   (18,098 )   $   40,788      
                                     
                                     
Six Months Ended June 30, 2017 (unaudited) Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic Consulting   Technology    Strategic Communications   Unallocated Corporate   Total    
                                     
Net income                              $   8,860      
  Interest income and other                             (2,197 )    
  Interest expense                               12,051      
  Income tax provision                               8,404      
Operating income     $   24,196   $   13,107   $   26,510   $   2,872     $   1,772     $   (41,339 )   $   27,118      
  Depreciation and amortization     1,549       2,205       2,890       6,207         1,148         2,299         16,298      
  Amortization of other intangible assets     1,579       796       309       319         1,912         -          4,915      
  Special charges       3,049       10,445       5,910       3,827         3,599         3,244         30,074      
  Remeasurement of acquisition-related contingent consideration     -        -        -        -          702         -          702      
Adjusted EBITDA      $   30,373   $   26,553   $   35,619   $   13,225     $   9,133     $   (35,796 )   $   79,107      
                                     
                                     
Three Months Ended June 30, 2016 (unaudited) Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Unallocated
Corporate
  Total    
                                     
Net income                              $   26,547      
  Interest income and other                             (4,125 )    
  Interest expense                               6,303      
  Income tax provision                               15,437      
Operating income     $   30,482   $   11,925   $   14,291   $   880     $   6,990     $   (20,406 )   $   44,162      
  Depreciation and amortization     755       996       935       3,996         497         899         8,078      
  Amortization of other intangible assets     804       519       155       159         953         -          2,590      
  Special charges       -        1,750       -        -          -          -          1,750      
Adjusted EBITDA      $   32,041   $   15,190   $   15,381   $   5,035     $   8,440     $   (19,507 )   $   56,580      
                                     
                                     
Six Months Ended June 30, 2016 (unaudited) Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Unallocated
Corporate
  Total    
                                     
Net income                              $   56,728      
  Interest income and other                             (6,682 )    
  Interest expense                               12,532      
  Income tax provision                               33,823      
Operating income (loss)   $   60,558   $   30,138   $   34,502   $   (300 )   $   10,655     $   (39,152 )   $   96,401      
  Depreciation and amortization     1,477       2,075       1,860       7,780         1,016         1,841         16,049      
  Amortization of other intangible assets     1,609       1,035       338       317         1,897         -          5,196      
  Special Charges       -        1,750       -        5,061         -          -          6,811      
  Remeasurement of acquisition-related contingent consideration     -        -        -        -          980         -          980      
Adjusted EBITDA      $   63,644   $   34,998   $   36,700   $   12,858     $   14,548     $   (37,311 )   $   125,437      
                                     
                                     

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(in thousands)  
         
  Six months ended  
  June 30,  
    2017       2016    
  (unaudited)  
         
Operating activities        
Net income $ 8,860     $ 56,728    
         
Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
Depreciation and amortization   16,298       16,049    
Amortization and impairment of other intangible assets   4,915       5,196    
Acquisition-related contingent consideration   1,172       1,340    
Provision for doubtful accounts   5,971       4,344    
Non-cash share-based compensation   9,959       9,667    
Non-cash interest expense   992       992    
Other   242       (639 )  
Changes in operating assets and liabilities, net of effects from acquisitions:        
Accounts receivable, billed and unbilled   (78,100 )     (57,501 )  
Notes receivable   2,241       (4,640 )  
Prepaid expenses and other assets   947       (943 )  
Accounts payable, accrued expenses and other   (1,887 )     1,932    
Income taxes   3,087       29,329    
Accrued compensation   (64,531 )     (28,518 )  
Billings in excess of services provided   7,634       7,297    
Net cash provided by (used in) operating activities   (82,200 )     40,633    
         
Investing activities        
Payments for acquisition of businesses, net of cash received   -       (56 )  
Purchases of property and equipment   (13,127 )     (11,983 )  
Other   72       96    
Net cash used in investing activities   (13,055 )     (11,943 )  
         
Financing activities        
Borrowings under revolving line of credit, net   115,000       -    
Deposits   3,262       2,557    
Purchase and retirement of common stock   (102,513 )     (2,903 )  
Net issuance of common stock under equity compensation plans   (500 )     9,353    
Other   (79 )     (154 )  
Net cash provided by financing activities   15,170       8,853    
         
Effect of exchange rate changes on cash and cash equivalents   2,438       (4,638 )  
         
Net increase (decrease) in cash and cash equivalents   (77,647 )     32,905    
Cash and cash equivalents, beginning of period   216,158       149,760    
Cash and cash equivalents, end of period $ 138,511     $ 182,665    
         

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands, except per share amounts)  
         
  June 30,   December 31,   
    2017       2016    
  (unaudited)      
Assets        
Current assets        
Cash and cash equivalents $ 138,511     $ 216,158    
Accounts receivable:        
Billed receivables   399,100       365,385    
Unbilled receivables   345,228       288,331    
Allowance for doubtful accounts and unbilled services   (191,113 )     (178,819 )  
Accounts receivable, net   553,215       474,897    
Current portion of notes receivable   27,126       31,864    
Prepaid expenses and other current assets   58,937       60,252    
Total current assets   777,789       783,171    
Property and equipment, net of accumulated depreciation   60,280       61,856    
Goodwill   1,187,664       1,180,001    
Other intangible assets, net of amortization   48,213       52,120    
Notes receivable, net of current portion   108,692       104,524    
Other assets   42,155       43,696    
Total assets $ 2,224,793     $ 2,225,368    
         
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable, accrued expenses and other $ 85,403     $ 87,320    
Accrued compensation   191,683       261,500    
Billings in excess of services provided   37,652       29,635    
Total current liabilities   314,738       378,455    
Long-term debt, net   480,906       365,528    
Deferred income taxes   175,683       173,799    
Other liabilities   114,288       100,228    
Total liabilities   1,085,615       1,018,010    
         
Stockholders' equity        
Preferred stock, $0.01 par value; shares authorized ― 5,000; none outstanding   -       -    
Common stock, $0.01 par value; shares authorized ― 75,000; shares issued and outstanding ― 39,527 (2017) and 42,037 (2016)   395       420    
Additional paid-in capital   325,446       416,816    
Retained earnings   946,672       941,001    
Accumulated other comprehensive loss   (133,335 )     (150,879 )  
Total stockholders' equity   1,139,178       1,207,358    
Total liabilities and stockholders' equity $ 2,224,793     $ 2,225,368    
         

 

FTI Consulting, Inc.
555 12th Street NW 
Washington, DC 20004 
+1.202.312.9100

Investor & Media Contact: 
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com

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