FTI Consulting, Inc. Reports 2010 Second Quarter Results

- Second Quarter Revenues of $349 Million- EPS of $0.52; Adjusted EBITDA of $65.5 Million- Results Consistent With Preliminary Results Announced in Early July- Announces Agreement in Principle to Acquire Asian Financial Advisory Firm

WEST PALM BEACH, Fla., Aug 05, 2010 /PRNewswire via COMTEX/ --

FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the second quarter ended June 30, 2010.

For the quarter, revenues decreased to $349.0 million from $360.5 million in the prior year period. Earnings per diluted share were $0.52 compared to $0.69 in the prior year period. Adjusted EBITDA was $65.5 million, or 18.8% of revenues, compared with $84.6 million, or 23.5% of revenues, in the prior year period. Adjusted EBITDA and Adjusted earnings per diluted share (which appear in the accompanying tables) are non-GAAP measures and are described in further detail below.

For the quarter, the Company generated $49.2 million in cash from operations. As of June 30, 2010, the Company had $123.3 million of cash and cash equivalents, compared to $80.9 million as of March 31, 2010. During July 2010, the Company repurchased approximately 336 thousand shares of its common stock.

Commenting on these results, Jack Dunn, FTI's president and chief executive officer said, "Our second quarter results were consistent with the preliminary figures we announced in early July. Across our businesses, we continue to experience the impact of an unevenly recovering economy. On the positive side, Economic Consulting and Strategic Communications each generated double digit growth in revenue and Adjusted Segment EBITDA. Forensic and Litigation Consulting also had nice growth despite a continuing soft environment for litigation. At the same time, concerns about the strength of the economic recovery, volatile financial markets and a lack of visibility into the impact of future tax and regulatory policies have undermined business confidence and dampened corporate decision making. The result has been soft demand for our pro-cyclical activities, such as capital markets and M&A, and a significant reduction in the pace of restructuring and bankruptcy activity that, while having stabilized in the quarter, is below the record levels experienced a year ago."

In a separate press release, FTI announced reaching an agreement in principle to acquire FS Asia Advisory Limited, a leading Hong Kong based financial advisory firm.

Second Quarter Segment Results

Corporate Finance/Restructuring

Revenues in the Corporate Finance/Restructuring segment were $111.1 million, compared with a record $134.0 million in the second quarter of the prior year. Adjusted Segment EBITDA was $26.0 million, or 23.4% of segment revenues, compared with $47.4 million, or 35.4% of segment revenues, in the prior year quarter. The decline was due to lower demand for restructuring services resulting from the improvement in high yield markets and the economy, and deferral of some creditor activity pending a clearer prospect for the economy.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased 5.8% to $80.8 million from $76.3 million in the second quarter of the prior year. Adjusted Segment EBITDA was $19.3 million, or 24.0% of segment revenues, compared to $20.9 million, or 27.3% of segment revenues, in the prior year's second quarter. The segment's core business continues to be affected by restrained corporate litigation budgets and uncertainty regarding regulatory enforcement activity. The segment saw growth in Regulated Industries - insurance, financial services, healthcare and pharmaceuticals -, and in Trial Services and Asia Pacific investigations, while revenue from the large financial fraud cases that began early last year declined. Adjusted Segment EBITDA margins declined year over year due to increased costs associated with employee hires in anticipation of higher demand for services in litigation and regulatory matters.

Economic Consulting

Revenues in the Economic Consulting segment increased by 13.0% to $64.6 million from $57.1 million in the second quarter of the prior year. Adjusted Segment EBITDA increased to $11.5 million, or 17.7% of segment revenues, compared to $10.3 million, or 18.1% of segment revenues, in the prior year quarter. Revenue growth was driven by strong activity in the Financial Economics and Network Industries practices, and continued maturation of European operations.

Technology

Revenues in the Technology segment were $42.8 million, compared to $48.5 million in the second quarter of the prior year. Adjusted Segment EBITDA was $15.9 million, or 37.1% of segment revenues, compared to $19.2 million, or 39.5% of segment revenues, in the prior year quarter. Revenue performance in the quarter reflected a decline in M&A 'second request' activity and unit based pricing partially offset by higher consulting revenue, including significant litigation activity.

Strategic Communications

Revenues in the Strategic Communications segment increased 11.9% to $49.8 million from $44.6 million in the second quarter of the prior year. Organic growth in the segment was 9.1%. Adjusted Segment EBITDA was $8.6 million, or 17.3% of segment revenues, compared to $5.9 million, or 13.2% of segment revenues, in the prior year quarter. The segment experienced growth in project-based work despite the continued slow environment for discretionary corporate spending and moribund capital markets. The segment also experienced the third consecutive quarter of net annualized retainer wins. Adjusted Segment EBITDA margins improved significantly from the 2009 level due to the higher revenue levels and the positive impact of cost reduction initiatives undertaken in the second half of 2009.

Second Quarter Conference Call

FTI will hold a conference call for analysts and investors to discuss second quarter financial results at 9:00 AM Eastern Time on Thursday, August 5, 2010. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website, www.fticonsulting.com.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,300 employees located in most major business centers in the world, we work closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measure

Note: We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. We define Adjusted Segment EBITDA as the segment's share of consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. We define Adjusted earnings per diluted share (Adjusted EPS) as earnings per diluted share excluding the per share impact of the special charges that were incurred in that year. Although Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in our industry. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee incentive compensation.

Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. These non-GAAP measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income. Reconciliations of operating profit to Adjusted EBITDA, segment operating profit to Adjusted Segment EBITDA and EPS to Adjusted EPS are included in the accompanying tables to today's press release.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that 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 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 projections will result or be achieved or that actual results will not differ from expectations. The Company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this will occur from time to time in the future. The Company's actual results may differ from our expectations. Further, preliminary results are subject to normal year-end adjustments. Other factors that could cause such differences include the current global financial crisis and economic conditions, the crisis in and deterioration of the financial and real estate markets, the pace and timing of the consummation and integration of past and 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 and in the Company's other filings with the Securities and Exchange Commission. 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 INCOME
         FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
              (in thousands, except per share data)


                                                Six Months Ended
                                                    June 30,
                                                    --------
                                                2010         2009
                                                ----         ----
                                                  (unaudited)

    Revenues                                $699,073     $708,371
                                            --------     --------

    Operating expenses
      Direct cost of revenues                406,491      386,593
      Selling, general and administrative
       expense                               166,603      177,595
      Special charges                         30,245            -
      Amortization of other intangible
       assets                                 11,943       12,199
                                             615,282      576,387
                                             -------      -------

    Operating income                          83,791      131,984
                                              ------      -------

    Other income (expense)
      Interest income and other                2,213        3,005
      Interest expense                      (22,696)     (22,043)
                                            (20,483)     (19,038)
                                             -------      -------

    Income before income tax provision        63,308      112,946

    Income tax provision                      24,057       44,049
                                              ------       ------

    Net income                               $39,251      $68,897
                                             =======      =======


    Earnings  per common share - basic         $0.86        $1.37
                                               =====        =====
    Weighted average common shares
     outstanding -basic                       45,828       50,278
                                              ======       ======

    Earnings per common share - diluted        $0.82        $1.29
    Weighted average common shares
     outstanding -diluted                     48,153       53,424
                                              ======       ======


                       FTI CONSULTING, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME
        FOR THE THREE MONTHS ENDED JUNE 30, 2010 AND 2009
              (in thousands, except per share data)


                                               Three Months Ended
                                                    June 30,
                                                    --------
                                                2010         2009
                                                ----         ----
                                                  (unaudited)

    Revenues                                $349,033     $360,525
                                            --------     --------

    Operating expenses
      Direct cost of revenues                209,031      194,181
      Selling, general and administrative
       expense                                82,202       88,842
      Amortization of other intangible
       assets                                  5,852        6,149
                                             297,085      289,172
                                             -------      -------

    Operating income                          51,948       71,353
                                              ------       ------

    Other income (expense)
      Interest income and other                 (141)         702
      Interest expense                      (11,378)     (11,030)
                                            (11,519)     (10,328)
                                             -------      -------

    Income before income tax provision        40,429       61,025

    Income tax provision                      15,363       23,800
                                              ------       ------

    Net income                               $25,066      $37,225
                                             =======      =======


    Earnings  per common share - basic         $0.55        $0.74
                                               =====        =====
    Weighted average common shares
     outstanding -basic                       45,857       50,384
                                              ======       ======

    Earnings per common share - diluted        $0.52        $0.69
    Weighted average common shares
     outstanding -diluted                     48,176       53,835
                                              ======       ======


                                         FTI CONSULTING, INC.
                                 OPERATING RESULTS BY BUSINESS SEGMENT
                                              (unaudited)


                                                     Adjusted
                                                       EBITDA
                                     Revenues            (1)        Margin
                                     --------        ---------      ------
                                           (in thousands)
                                           --------------
    Three Months Ended June
     30, 2010
      Corporate Finance/
       Restructuring                  $111,095         $25,977        23.4%
      Forensic and Litigation
       Consulting                       80,754          19,346        24.0%
      Economic Consulting               64,552          11,453        17.7%
      Technology                        42,791          15,857        37.1%
      Strategic Communications          49,841           8,635        17.3%
                                                         -----
                                      $349,033          81,268        23.3%
                                      ========
       Corporate                                       (15,810)
                                                       -------
    Adjusted EBITDA (1)                                $65,458        18.8%
                                                       =======


    Six Months Ended June 30,
     2010
      Corporate Finance/
       Restructuring                  $228,562         $60,696        26.6%
      Forensic and Litigation
       Consulting                      159,432          39,130        24.5%
      Economic Consulting              131,859          24,973        18.9%
      Technology                        86,164          33,118        38.4%
      Strategic Communications          93,056          14,377        15.4%
                                                        ------
                                      $699,073         172,294        24.6%
                                      ========
       Corporate                                       (30,954)
                                                       -------
    Adjusted EBITDA (1)                               $141,340        20.2%
                                                      ========


    Three Months Ended June
     30, 2009
      Corporate Finance/
       Restructuring                  $133,970         $47,445        35.4%
      Forensic and Litigation
       Consulting (3)                   76,346          20,856        27.3%
      Economic Consulting               57,123          10,345        18.1%
      Technology (3)                    48,536          19,186        39.5%
      Strategic Communications          44,550           5,879        13.2%
                                                         -----
                                      $360,525         103,711        28.8%
                                      ========
       Corporate                                       (19,132)
                                                       -------
    Adjusted EBITDA (1)                                $84,579        23.5%
                                                       =======


    Six Months Ended June 30,
     2009
      Corporate Finance/
       Restructuring                  $261,512         $88,166        33.7%
      Forensic and Litigation
       Consulting (3)                  154,720          42,797        27.7%
      Economic Consulting              111,959          20,664        18.5%
      Technology (3)                    92,859          32,284        34.8%
      Strategic Communications          87,321          11,675        13.4%
                                                        ------
                                      $708,371         195,586        27.6%
                                      ========
       Corporate                                       (37,044)
                                                       -------
    Adjusted EBITDA (1)                               $158,542        22.4%
                                                      ========






                                                Average  Revenue-
                                               Billable  Generating
                                 Utilization
                                      (2)      Rate (2)  Headcount
                               --------------   -------  ---------


    Three Months Ended June
     30, 2010
      Corporate Finance/
       Restructuring                       65%      $438        683
      Forensic and Litigation
       Consulting                          74%      $337        784
      Economic Consulting                  77%      $472        286
      Technology                          N/M        N/M        234
      Strategic Communications            N/M        N/M        561
                                          N/M        N/M      2,548
                                                              =====
       Corporate
    Adjusted EBITDA (1)


    Six Months Ended June 30,
     2010
      Corporate Finance/
       Restructuring                       67%      $448        683
      Forensic and Litigation
       Consulting                          76%      $330        784
      Economic Consulting                  80%      $470        286
      Technology                          N/M        N/M        234
      Strategic Communications            N/M        N/M        561
                                          N/M        N/M      2,548
                                                              =====
       Corporate
    Adjusted EBITDA (1)


    Three Months Ended June
     30, 2009
      Corporate Finance/
       Restructuring                       76%      $437        736
      Forensic and Litigation
       Consulting (3)                      76%      $325        704
      Economic Consulting                  75%      $456        290
      Technology (3)                      N/M        N/M        262
      Strategic Communications            N/M        N/M        580
                                          N/M        N/M      2,572
                                                              =====
       Corporate
    Adjusted EBITDA (1)


    Six Months Ended June 30,
     2009
      Corporate Finance/
       Restructuring                       80%      $425        736
      Forensic and Litigation
       Consulting (3)                      79%      $324        704
      Economic Consulting                  76%      $455        290
      Technology (3)                      N/M        N/M        262
      Strategic Communications            N/M        N/M        580
                                          N/M        N/M      2,572
                                                              =====
       Corporate
    Adjusted EBITDA (1)





    (1) We define Adjusted EBITDA as consolidated operating income before
    depreciation, amortization of intangible assets and special charges
    plus non-operating litigation settlements. We define Adjusted
    Segment EBITDA as the segments' share of consolidated operating
    income before depreciation, amortization of intangible assets and
    special charges plus non-operating litigation settlements. Although
    Adjusted EBITDA, and Adjusted Segment EBITDA are not measures of
    financial condition or performance determined in accordance with
    generally accepted accounting principles ("GAAP"), we believe that
    these measures  can be a useful operating performance measure for
    evaluating our results of operations as compared from period to
    period and as compared to our competitors. EBITDA is a common
    alternative measure of operating performance used by investors,
    financial analysts and rating  agencies to value and compare the
    financial performance of companies in our industry. We use Adjusted
    EBITDA and Adjusted Segment EBITDA to evaluate and compare the
    operating performance of our segments and it is one of the primary
    measures used to determine employee incentive compensation.
    Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the
    same manner by all companies and may not be comparable to other
    similarly titled measures of other companies unless the definition
    is the same. These non-GAAP measures should be considered in
    addition to, but not as a substitute for or superior to, the
    information contained in our statements of income. See also our
    reconciliation of non-GAAP financial measures.

    (2) The majority of the Technology and Strategic Communications
    segments' revenues are not generated on an hourly basis.
    Accordingly,
    utilization and average billable rate metrics are not presented as
    they are not meaningful. Utilization where presented is based on a
    2,032 hour year.

    (3) Effective January 1, 2010, we implemented a change in our
    organizational structure that resulted in the movement of our
    Financial and Enterprise Data Analytics subpractice from our
    Technology segment to our Forensic and Litigation Consulting
    segment. This change has been reflected in our segment reporting for
    all periods.

                               FTI CONSULTING, INC.
                  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                      (in thousands, except per share data)
                                   (unaudited)


                                        Three Months
                                            Ended            Six Months Ended
                                          June 30,               June 30,
                                          --------               --------
                                      2010        2009    2010           2009
                                      ----        ----    ----           ----

    Net income                     $25,066     $37,225 $39,251        $68,897
                                   =======     ======= =======        =======

    Earnings per common share
     -diluted                        $0.52       $0.69   $0.82          $1.29
                                     =====       =====   =====          =====

    Add back: Special charges,
     net of taxes of $12,176            $-          $- $18,069             $-
    Adjusted net income before
     special charges               $25,066     $37,225 $57,320        $68,897
                                   =======     ======= =======        =======

    Adjusted earnings per
     common share -diluted
        before special charges (1)   $0.52       $0.69   $1.19          $1.29
                                     =====       =====   =====          =====



    (1)  We define adjusted earnings per diluted share ("Adjusted EPS")
    as earnings per diluted share excluding the per share impact of the
    special charges.

     RECONCILIATION OF OPERATING INCOME AND NET INCOME TO EARNINGS BEFORE
                INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
                                (in thousands)
                                  (unaudited)


                                               Forensic
                                                 and
                                  Corporate   Litigation
    Three Months Ended June 30,   Finance /   Consulting     Economic
     2010                       Restructuring     (2)        Consulting
                                -------------  -------------       ----------

    Net income
      Interest income and other
      Interest expense
      Income tax provision
    Operating income                  $23,567        $17,537          $10,459
      Depreciation                        927            843              684
      Amortization of other
       intangible assets                1,483            966              310
      Special charges                       -              -                -
      Non-operating litigation
       settlements                          -              -                -
                                          ---            ---              ---
    Adjusted EBITDA (1)                25,977         19,346           11,453
                                       ======         ======           ======



    Six Months Ended June 30,
     2010

    Net income
      Interest income and other
      Interest expense
      Income tax provision
    Operating income                  $49,211        $29,937          $16,225
      Depreciation                      1,921          1,672            1,314
      Amortization of other
       intangible assets                2,975          1,961              620
      Special charges                   6,589          5,560            6,814
      Non-operating litigation
       settlements                          -              -                -
                                          ---            ---              ---
    Adjusted EBITDA (1)                60,696         39,130           24,973
                                       ======         ======           ======



    Three Months Ended June 30,
     2009

    Net income
      Interest income and other
      Interest expense
      Income tax provision
    Operating income                  $45,042        $19,572           $9,373
      Depreciation                        815            671              420
      Amortization of other
       intangible assets                1,588            613              552
      Special charges                       -              -                -
      Non-operating litigation
       settlements                          -              -                -
                                          ---            ---              ---
    Adjusted EBITDA (1)                47,445         20,856           10,345
                                       ======         ======           ======



    Six Months Ended June 30,
     2009

    Net income
      Interest income and other
      Interest expense
      Income tax provision
    Operating income                  $83,417        $40,169          $18,740
      Depreciation                      1,579          1,331              827
      Amortization of other
       intangible assets                3,170          1,297            1,097
      Special charges                       -              -                -
      Non-operating litigation
       settlements                          -              -                -
                                          ---            ---              ---
    Adjusted EBITDA (1)                88,166         42,797           20,664
                                       ======         ======           ======








                                              Strategic
    Three Months Ended June 30,   Technology  Communi-
     2010                              (2)     cations  Corp HQ     Total
                                ------------- --------- -------     -----

    Net income                                                     $25,066
      Interest income and other                                        141
      Interest expense                                              11,378
      Income tax provision                                          15,363
                                                                    ------
    Operating income                  $10,991    $6,550  $(17,156)  51,948
      Depreciation                      3,033       825     1,346    7,658
      Amortization of other
       intangible assets                1,833     1,260         -    5,852
      Special charges                       -         -         -        -
      Non-operating litigation
       settlements                          -         -         -        -
                                          ---       ---       ---
    Adjusted EBITDA (1)                15,857     8,635   (15,810)  65,458
                                       ======     =====   =======   ======



    Six Months Ended June 30,
     2010

    Net income                                                     $39,251
      Interest income and other                                    (2,213)
      Interest expense                                              22,696
      Income tax provision                                          24,057
                                                                    ------
    Operating income                  $18,293    $8,897  $(38,772)  83,791
      Depreciation                      6,083     1,648     2,723   15,361
      Amortization of other
       intangible assets                3,815     2,572         -   11,943
      Special charges                   4,927     1,260     5,095   30,245
      Non-operating litigation
       settlements                          -         -         -        -
                                          ---       ---       ---
    Adjusted EBITDA (1)                33,118    14,377   (30,954) 141,340
                                       ======    ======   =======  =======



    Three Months Ended June 30,
     2009

    Net income                                                     $37,225
      Interest income and other                                       (702)
      Interest expense                                              11,030
      Income tax provision                                          23,800
                                                                    ------
    Operating income                  $14,283    $3,742  $(20,659)  71,353
      Depreciation                      2,846       798     1,527    7,077
      Amortization of other
       intangible assets                2,057     1,339         -    6,149
      Special charges                       -         -         -        -
      Non-operating litigation
       settlements                          -         -         -        -
                                          ---       ---       ---
    Adjusted EBITDA (1)                19,186     5,879   (19,132)  84,579
                                       ======     =====   =======   ======



    Six Months Ended June 30,
     2009

    Net income                                                     $68,897
      Interest income and other                                    (3,005)
      Interest expense                                              22,043
      Income tax provision                                          44,049
                                                                    ------
    Operating income                  $22,450    $7,618  $(40,410) 131,984
      Depreciation                      5,706     1,550     3,116   14,109
      Amortization of other
       intangible assets                4,128     2,507         -   12,199
      Special charges                       -         -         -        -
      Non-operating litigation
       settlements                          -         -       250      250
                                          ---       ---       ---
    Adjusted EBITDA (1)                32,284    11,675   (37,044) 158,542
                                       ======    ======   =======  =======






    (1) We define Adjusted EBITDA as consolidated operating income before
    depreciation, amortization of intangible assets and special charges
    plus non-operating litigation settlements. We define Adjusted
    Segment EBITDA as the segments' share of consolidated operating
    income before depreciation, amortization of intangible assets and
    special charges plus non-operating litigation settlements. Although
    Adjusted EBITDA, and Adjusted Segment EBITDA are not measures of
    financial condition or performance determined in accordance with
    generally accepted accounting principles ("GAAP"), we believe that
    these measures  can be a useful operating performance measure for
    evaluating our results of operations as compared from period to
    period and as compared to our competitors. EBITDA is a common
    alternative measure of operating performance used by investors,
    financial analysts and rating agencies to value and compare the
    financial performance of companies in our industry. We use Adjusted
    EBITDA and Adjusted Segment EBITDA to evaluate and compare the
    operating performance of our segments and it is one of the primary
    measures used to determine employee incentive compensation.
    Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the
    same manner by all companies and may not be comparable to other
    similarly titled measures of other companies unless the definition
    is the same. These non-GAAP measures should be considered in
    addition to, but not as a substitute for or superior to, the
    information contained in our statements of income. See also our
    reconciliation of non-GAAP financial measures.

    (2) Effective January 1, 2010, we implemented a change in our
    organizational structure that resulted in the movement of our
    Financial and Enterprise Data Analytics subpractice from our
    Technology segment to our Forensic and Litigation Consulting
    segment. This change has been reflected in our segment reporting for
    all periods.

                         FTI CONSULTING, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 2010 and 2009
                            (in thousands)


                                                      Six Months Ended
                                                          June 30,
                                                          --------
                                                      2010          2009
                                                      ----          ----
                                                         (unaudited)
    Operating
     activities
    Net income                                     $39,251       $68,897
    Adjustments to
     reconcile net
     income to net cash
     provided by
     operating
     activities:
      Depreciation and
       amortization                                 15,361        14,109
      Amortization of
       other intangible
       assets                                       11,943        12,199
      Provision for
       doubtful accounts                             4,618        12,212
      Non-cash share-
       based compensation                           14,651        13,349
      Excess tax benefits
       from share-based
       compensation                                   (625)       (2,761)
      Non-cash interest
       expense                                       3,599         3,698
      Other                                           (315)        1,308
      Changes in
       operating assets
       and liabilities,
       net of effects
       from acquisitions:
        Accounts
         receivable, billed
         and unbilled                             (34,895)      (47,807)
        Notes receivable                          (17,789)      (19,511)
        Prepaid expenses
         and other assets                           (2,240)        2,976
        Accounts payable,
         accrued expenses
         and other                                  11,262      (15,836)
        Income taxes                                (4,339)       14,151
        Accrued
         compensation                             (18,671)      (12,625)
        Billings in excess
         of services
         provided                                      144          (679)
                               Net cash provided
                                by operating
                                activities          21,955        43,680
                                                    ------        ------

    Investing
     activities
      Payments for
       acquisition of
       businesses,
       including
       contingent
       payments,
        net of cash
         received                                 (22,834)      (34,580)
      Purchases of
       property and
       equipment                                  (11,632)      (11,687)
      Proceeds from
       maturity of short-
       term investment                              15,000             -
      Other                                           (475)          307
                                                      ----           ---
                              Net cash used in
                               investing
                               activities         (19,941)      (45,960)
                                                   -------       -------

    Financing
     activities
      Borrowings under
       revolving line of
       credit                                       20,000             -
      Payments of
       revolving line of
       credit                                     (20,000)             -
      Payments of long-
       term debt and
       capital lease
       obligations                                    (465)         (551)
      Cash received for
       settlement of
       interest rate
       swaps                                             -         2,288
      Issuance of common
       stock under equity
       compensation plans                            4,235        13,098
      Excess of tax
       benefits from
       share-based
       compensation                                    625         2,761
      Other                                            442             -
                              Net cash provided
                               by financing
                               activities            4,837        17,596
                                                     -----        ------

    Effect of exchange
     rate changes on
     cash and cash
     equivalents                                    (2,469)        5,934
                                                    ------         -----

    Net increase in
     cash and cash
     equivalents                                     4,382        21,250
    Cash and cash
     equivalents,
     beginning of
     period                                        118,872       191,842
                                                   -------       -------
    Cash and cash
     equivalents, end
     of period                                    $123,254      $213,092
                                                  ========      ========


                           FTI CONSULTING, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                AS OF JUNE 30, 2010 AND DECEMBER 31, 2009
                 (in thousands, except per share amounts)


                                                                  December
                                                     June 30,        31,
                                                           2010        2009
                                                           ----        ----
                         Assets                     (unaudited)
    Current assets
      Cash and cash equivalents                        $123,254    $118,872
       Accounts receivable:
           Billed receivables                           249,511     241,911
           Unbilled receivables                         129,061     104,959
           Allowance for doubtful accounts and
            unbilled services                           (62,926)    (59,328)
                                                        -------     -------
         Accounts receivable, net                       315,646     287,542
       Notes receivable                                  24,945      20,853
       Prepaid expenses and other current assets         33,158      45,157
       Income taxes receivable                           31,192       7,015
       Deferred income taxes                              4,476      20,476
                                                          -----      ------
        Total current assets                            532,671     499,915

    Property and equipment, net of accumulated
     depreciation                                        77,744      80,678
    Goodwill                                          1,197,763   1,195,949
    Other intangible assets, net of
     amortization                                       161,254     175,962
    Notes receivable, net of current portion             81,669      69,213
    Other assets                                         53,639      55,621
                                                         ------      ------

         Total assets                                $2,104,740  $2,077,338
                                                     ==========  ==========

          Liabilities and Stockholders' Equity
    Current liabilities
        Accounts payable, accrued expenses and
         other                                          $71,239     $81,193
      Accrued compensation                              116,480     152,807
      Current portion of long-term debt and
       capital lease obligations                        144,705     138,101
        Billings in excess of services provided          33,995      34,101
                                                         ------      ------
        Total current liabilities                       366,419     406,202

    Long-term debt and capital lease
     obligations, net of current portion                417,124     417,397
    Deferred income taxes                               112,261      95,704
    Other liabilities                                    61,017      53,821
                                                         ------      ------
         Total liabilities                              956,821     973,124

    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 - 47,150 (2010) and 46,985
       (2009)                                               472         470
      Additional paid-in capital                        559,244     535,754
      Retained earnings                                 654,780     615,529
      Accumulated other comprehensive loss              (66,577)    (47,539)
         Total stockholders' equity                   1,147,919   1,104,214
                                                      ---------   ---------

         Total liabilities and stockholders' equity  $2,104,740  $2,077,338
                                                     ==========  ==========


SOURCE FTI Consulting, Inc.

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