FTI Consulting, Inc. Reports Fourth Quarter and Full Year 2008 Results

-- Full Year Revenues Increase 29% to $1.29 Billion; EPS of $2.34 -- Fourth Quarter Revenues Increase 15% to $322.9 Million; EPS of $0.58 -- 2009 Guidance of Revenues from $1.45 Billion to $1.55 Billion; EPS of $2.55 to $2.70

WEST PALM BEACH, Fla., March 2, 2009 /PRNewswire-FirstCall via COMTEX/ -- FTI Consulting (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the fourth quarter and full-year ended December 31, 2008.

Fourth Quarter Results

Revenues for the fourth quarter of 2008 were $322.9 million, an increase of 15.1% over revenues of $280.5 million in the prior year period. Net income for the fourth quarter of 2008 was $31.2 million, compared to net income of $30.8 million in the prior year period. Diluted earnings per common share were $0.58 compared to $0.60 in the prior year period, and reflected an increase of 4% in weighted average shares outstanding.

Operating income before depreciation and amortization of intangible assets (plus non-operating litigation settlements) ("EBITDA") was $71.3 million, or 22.1% of revenue, in the fourth quarter of 2008, an increase of 10.8% over EBITDA of $64.3 million, or 22.9% of revenue, in the prior year period.

Commenting on the year, Jack Dunn, FTI's president and chief executive officer, said, "In a year where the world economies suffered the worst crisis since the Great Depression, FTI's business of assisting clients when they face enterprise threatening issues performed exceptionally well. Our organic growth in revenues for the year was very strong at 17% and the addition of several key strategic acquisitions resulted in total growth of 29%. EBITDA and EPS increased 31% and 17%, respectively.

"We made substantial progress in expanding our breadth of services and global reach, and in deepening our expertise in key industries. For example, we are very pleased to now have all five of our segments in London, which will serve as our European center of operations. Our performance last year was testimony to the breadth and balance of our business and our leadership position that enabled us to advise on the largest restructurings, consult on industry-changing strategic mergers, help many of the world's most prominent companies contend with enterprise-threatening crises, and advise on investigations into the largest fraud cases in history."

Mr. Dunn added, "Our performance in the fourth quarter was at the top end of our expectations despite the tremendous level of uncertainty plaguing the markets. Our revenues grew 15% and EBITDA grew 11% compared to a very strong fourth quarter last year and we generated 4% organic growth in the quarter. As was the case in the third quarter, our growth was largely a product of the deepening stresses caused by the recession and the absence of liquidity in the economy.

"Corporate Finance/Restructuring had another outstanding quarter, as it continues to see dramatic increases in demand from a broadening range of industries suffering from the financial crisis. Economic Consulting also continues to perform very well driven by growing demand from clients preparing to address the damage from the credit crisis and the expectation of attendant litigation or regulatory inquiries. Forensic and Litigation Consulting and Technology performed well in relatively slow litigation and regulatory enforcement markets and produced sound financial results. Strategic Communications was very active in a number of large engagements relating to the crisis in the economy, but had results adversely affected by significant weakness in the values of key foreign currencies as well as a dearth of capital markets activity.

"During 2008, the Company generated $200 million of operating cash flow on net income of $125 million, a substantial increase from 2007 where we generated $69 million of operating cash flow on net income of $92 million. Our financial condition is also strong, with cash balances at the end of the year totaling $192 million, total debt outstanding of $569.5 million and no amounts outstanding under the Company's $175 million line of credit.

"We believe now is an excellent time to expand our leadership position and use the strength of FTI to increase our market share. We have commenced aggressively investing in our brand and we have accelerated our funding of the research efforts that are intended to further enhance our leading electronic discovery capabilities. More importantly, we intend to use the strength and breadth of our practices and our strong financial condition, at a time when many other firms are financially weakened or strategically challenged, to attract and retain the best professionals to FTI. We currently plan to grow our headcount of professionals who serve clients by approximately 14% in 2009."

Fourth Quarter Business Segment Results

Corporate Finance/Restructuring

Revenue in the Corporate Finance/Restructuring segment increased 45.7% to $107.3 million from $73.6 million in the prior year period. Segment EBITDA increased 66.2% to $37.2 million, or 34.7% of segment revenue, compared to $22.4 million, or 30.4% of segment revenue, in the prior year period. Organic growth for the segment was 33.1% during the quarter. The Corporate Finance/Restructuring segment results were driven by the growing demand for restructuring services fueled by the global economic crisis. Demand continued to be robust in the financial services, automotive, retail, real estate, construction and manufacturing sectors, and the segment also benefited from ongoing strong growth within its recently commenced UK operations.

Economic Consulting

Revenue in the Economic Consulting segment increased 19.5% to $53.3 million from $44.6 million in the prior year period. Nearly all of the revenue growth was organic. Segment EBITDA increased 35.6% to $16.0 million, or 30.0% of segment revenue, from $11.8 million, or 26.4% of segment revenue, in the prior year period. The segment's strong performance reflects ongoing high levels of demand for antitrust litigation consulting, as well as a steady increase in demand arising from disputes related to the global credit crisis. Performance also continued to be driven by robust demand for consulting surrounding strategic M&A initiatives, although at a somewhat slower pace than that seen in the first half of the year. During the period, the segment launched its Auctions Solutions practice through the addition of a new team including the leading expert on auction design, bidding strategies and related matters. Since year end, the segment has commenced operations in London with the addition of several senior practitioners and a growing number of staff, and added several other senior practitioners in New York and Los Angeles.

Forensic and Litigation Consulting

Revenue in the Forensic and Litigation Consulting segment increased 6.9% to $58.6 million from $54.8 million in the prior year period. Segment EBITDA was $12.2 million, or 20.8% of segment revenue, compared to $15.4 million, or 28.1% of segment revenue, in the prior year period. The segment's revenue growth included a contribution of $8.3 million from acquisitions that closed during 2008. The segment's results for the 2008 fourth quarter largely reflect a continuation of the soft market conditions seen in the third quarter of 2008, as the lack of large cases in the U.S. investigative and damage arenas continued to affect utilization in the period. Also affecting the segment's performance in the period was a reduction in regulatory enforcement actions by the SEC and DOJ against large multinational corporations, as we believe is typical during the transition in presidential administrations. The segment experienced solid demand for services to regulated industries, including insurance, healthcare and pharmaceuticals. Its intellectual property and construction practices also performed well. With the presidential election completed, the segment has already begun to see an increased level of activity in 2009 including several major fraud investigations and a number of regulatory enforcement actions.

Technology

Revenue in the Technology segment in the fourth quarter increased 9.7% to $52.2 million from $47.5 million in the prior year period. Segment EBITDA was $13.6 million, or 26.1% of segment revenue, compared to $19.6 million, or 41.1% of segment revenue, in the prior year period. Segment revenue growth in the quarter was driven by the contribution of $8.2 million from acquired businesses which offset an organic decline of 7.6%. Factors affecting results in the Technology segment were similar to those seen in the third quarter of 2008, as revenues were negatively affected by the impact of the global financial crisis on companies' spending decisions with regard to litigation and M&A activity, as well as a slowdown in certain large matters. Pricing also declined compared to the prior year period. The EBITDA margin declined in the period primarily as a result of lower pricing compared to the prior period and significantly increased investment in research and development. As planned, in early 2009 the segment successfully completed the integration of the Attenex acquisition and launched a combined offering of two of the industry's leading e-Discovery solutions under the unified FTI Technology brand. Similar to our Forensic and Litigation segment, the Technology segment has begun to see increased activity levels in 2009.

Strategic Communications

Revenue in the Strategic Communications segment was $51.6 million compared to $60.0 million in the prior year period. Segment EBITDA was $12.9 million, or 24.9% of segment revenue, compared to $16.1 million, or 26.9% of revenue, in the prior year period. The weakness of the British Pound, the Euro and the Australian dollar compared to last year reduced revenue by $7.8 million in the period. Businesses acquired during the year contributed $4.3 million of revenue. The continued impact of the global financial crisis on M&A and capital markets activity, as well as lower fees from the segment's retained client base as clients seek to reduce costs in the current economic environment, both contributed to the revenue decline. The segment benefited from a number of significant financial crisis management projects, as well as continued strong performance within acquired businesses and emerging markets. The segment remains a widely-recognized leader in the marketplace, recently ranked by Mergermarket as the #1 M&A communications advisor by transaction volume, and it continues to take advantage of opportunities for growth. In Europe, the segment recently launched its Restructuring and Recapitalization communications practice to address issues arising from the global financial crisis.

Stock Purchase Program

The Company also announced that on February 25, 2009, its Board of Directors has authorized a stock purchase program for up to $50 million of the Company's common stock that will expire on February 25, 2010. The Company did not purchase any shares of common stock under the prior 12 month program.

2009 Guidance

Based on current market conditions, the Company believes revenues for the year will be between $1.45 billion and $1.55 billion and fully diluted EPS will be between $2.55 and $2.70.

(Note: 2009 EPS guidance includes a non cash $0.05 per diluted share cost from adoption of FASB Staff Position APB 14-1 - "Accounting for Convertible Debt Instruments".)

Mr. Dunn concluded, "Entering 2009 our business has never been better positioned to take advantage of the opportunities that will present themselves as these economic and regulatory cycles evolve. We expect to experience continued strong demand throughout the year for restructuring and dispute engagements in connection with the recession and credit crisis, and we bring the largest restructuring practice and the industry's strongest set of economists to bear to meet that demand. We believe there will be a growing level of work advising clients on their litigation and regulatory challenges as the new Congress and Administration cooperate to investigate the causes of our economic crisis and develop new, tougher regulatory frameworks."

Fourth Quarter and 2008 Year End Conference Call

FTI will hold a conference call for analysts and investors to discuss fourth quarter financial results at 9:00 a.m. Eastern time on Monday, March 2, 2009. 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 EBITDA as operating income before depreciation and amortization of intangible assets plus non-operating litigation settlements. We use EBITDA in evaluating financial performance. Although EBITDA is not a measure of financial condition or performance determined in accordance with GAAP we believe that it can be a useful operating performance measure for evaluating our results of operation 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 EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee bonuses. We also use EBITDA to value the businesses we acquire or anticipate acquiring. Reconciliations of EBITDA to Net Income and Segment EBITDA to segment operating profit are included in the accompanying tables to today's press release. EBITDA is 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. This non-GAAP measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 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 revenue, 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, a continuing deterioration of global 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.



                             FTI CONSULTING, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
                     (in thousands, except per share data)
                     -------------------------------------

                                                   Year Ended December 31,
                                                      2008        2007
                                                      ----        ----


    Revenues                                       $1,293,145  $1,001,270
                                                   ----------  ----------

    Operating expenses
      Direct cost of revenues                         705,611     548,407
      Selling, general and administrative expense     330,052     255,238
      Amortization of other intangible assets          18,824      10,615
                                                       ------      ------
                                                    1,054,487     814,260
                                                    ---------     -------

    Operating income                                  238,658     187,010
                                                      -------     -------

    Other income (expense)
      Interest income and other                         8,685       7,639
      Interest expense                                (41,051)    (43,857)
      Litigation settlement losses, net                  (661)     (1,002)
                                                         ----      ------
                                                      (33,027)    (37,220)
                                                      -------     -------

    Income before income tax provision                205,631     149,790

    Income tax provision                               80,196      57,669
                                                       ------      ------

    Net income                                       $125,435     $92,121
                                                     ========     =======


    Earnings  per common share - basic                  $2.55       $2.14
                                                        =====       =====
    Weighted average common shares outstanding -
     basic                                             49,193      43,028
                                                       ======      ======

    Earnings per common share - diluted                 $2.34       $2.00
                                                        =====       =====
    Weighted average common shares outstanding -
     diluted                                           53,603      45,974
                                                       ======      ======



                              FTI CONSULTING, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE THREE MONTHS ENDED DECEMBER 31, 2008 AND 2007
                      (in thousands, except per share data)
                      -------------------------------------

                                                         Three Months Ended
                                                            December 31,
                                                           2008      2007
                                                           ----      ----


    Revenues                                             $322,876  $280,519
                                                         --------  --------

    Operating expenses
      Direct cost of revenues                             170,410   151,746
      Selling, general and administrative expense          88,199    69,963
      Amortization of other intangible assets               5,805     2,837
                                                            -----     -----
                                                          264,414   224,546
                                                          -------   -------

    Operating income                                       58,462    55,973
                                                           ------    ------

    Other income (expense)
      Interest income and other                             1,305     4,439
      Interest expense                                    (10,216)  (10,650)
      Litigation settlement losses, net                        50      (130)
                                                               --      ----
                                                           (8,861)   (6,341)
                                                           ------    ------

    Income before income tax provision                     49,601    49,632

    Income tax provision                                   18,408    18,838
                                                           ------    ------

    Net income                                            $31,193   $30,794
                                                          =======   =======


    Earnings  per common share - basic                      $0.63     $0.66
                                                            =====     =====
    Weighted average common shares outstanding - basic     49,738    46,996
                                                           ======    ======

    Earnings per common share - diluted                     $0.58     $0.60
                                                            =====     =====
    Weighted average common shares outstanding - diluted   53,411    51,347
                                                           ======    ======



                                FTI CONSULTING, INC.
                        OPERATING RESULTS BY BUSINESS SEGMENT

                                                 Utiliz-   Average   Revenue
                                EBITDA            ation    Billable Generating
                     Revenues     (1)    Margin    (2)     Rate (2)  Headcount
                     --------   ------   ------  -------   --------  ---------
                       (in thousands)
    -------------     ----------------
    Three Months Ended
     December 31,
     2008
      Corporate
       Finance/
       Restructuring  $107,280  $37,181    34.7%      73%      $447        669
      Forensic and
       Litigation
       Consulting       58,567   12,188    20.8%      65%      $339        639
      Strategic
       Communications   51,571   12,852    24.9%       -          -        592
      Technology        52,164   13,600    26.1%       -          -        359
      Economic
       Consulting       53,294   15,966    30.0%      76%      $456        264
                        ------   ------                                    ---
                      $322,876   91,787    28.4%                         2,523
                      ========                                           =====
       Corporate                (20,532)
                                -------
     EBITDA (1)                 $71,255    22.1%
                                =======

    -------------
    Year Ended
     December 31,
     2008
      Corporate
       Finance/
       Restructuring  $374,504 $114,178    30.5%      75%      $434        669
      Forensic and
       Litigation
       Consulting      253,918   57,493    22.6%      70%      $340        639
      Strategic
       Communications  224,481   55,164    24.6%       -          -        592
      Technology       220,359   73,506    33.4%       -          -        359
      Economic
       Consulting      219,883   59,020    26.8%      83%      $446        264
                       -------   ------                                    ---
                    $1,293,145  359,361    27.8%                         2,523
                    ==========                                           =====
       Corporate                (76,503)
                                -------
     EBITDA (1)                $282,858    21.9%
                               ========

    -------------
    Three Months Ended
     December 31,
     2007
      Corporate
       Finance/
       Restructuring   $73,644  $22,370    30.4%      82%      $402        406
      Forensic and
       Litigation
       Consulting       54,770   15,380    28.1%      71%      $331        430
      Strategic
       Communications   59,990   16,147    26.9%       -          -        538
      Technology        47,535   19,557    41.1%       -          -        344
      Economic
       Consulting       44,580   11,776    26.4%      81%      $400        236
                        ------   ------                                    ---
                      $280,519   85,230    30.4%                         1,954
                      ========                                           =====
       Corporate                (20,943)
                                -------
      EBITDA (1)                $64,287    22.9%
                                =======

    -------------
    Year Ended
     December 31,
     2007
      Corporate
       Finance/
       Restructuring  $261,625  $71,629    27.4%      80%      $409        406
      Forensic and
       Litigation
       Consulting      217,028   57,292    26.4%      75%      $321        430
      Strategic
       Communications  185,333   48,826    26.3%       -          -        538
      Technology       162,837   62,921    38.6%       -          -        344
      Economic
       Consulting      174,447   48,085    27.6%      85%      $412        236
                       -------   ------                                    ---
                    $1,001,270  288,753    28.8%                         1,954
                    ==========                                           =====
       Corporate                (72,779)
                                -------
      EBITDA (1)               $215,974    21.6%
                               ========

    (1) We define EBITDA as operating income before depreciation and
        amortization of intangible assets plus non-operating litigation
        settlements. Although EBITDA is not a measure of financial condition
        or performance determined in accordance with accounting principles
        generally accepted in the United States (GAAP), we believe that it can
        be a useful operating performance measure for evaluating our results
        of operation as compared from period to period  and as compared to our
        competitors.  EBITDA is a common alternative performance measure used
        by investors, financial analysts and credit rating agencies to value
        and compare the financial performance of companies within our
        industry. We use EBITDA to evaluate and compare the operating
        performance of our segments and it is one of the primary measures used
        to determine employee bonuses. We also use EBITDA to value the
        businesses we acquire or anticipate acquiring. EBITDA is 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. This non-GAAP measure 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.



      RECONCILIATION OF OPERATING INCOME AND NET INCOME TO ADJUSTED EARNINGS
              BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
              -----------------------------------------------------



    Three Months                      Forensic and    Strategic
     Ended December     Corporate      Litigation      Communi-
     31, 2008            Finance       Consulting       cations    Technology
                        ---------     ------------    ----------   ----------

    Net income
      Interest income
       and other
      Interest expense
      Litigation
       settlement gains
      Income tax provision
    Operating income        $35,268        $10,800        $10,946      $8,434
      Depreciation              723            597            701       3,067
      Amortization
       of other
       intangible
       assets                 1,190            791          1,155       2,099
      Litigation
       settlement
       gains                      -              -             50           -
                                ---            ---             --         ---
    EBITDA (1)               37,181         12,188         12,852      13,600
                             ======         ======         ======      ======


    Year Ended December 31, 2008

    Net income (loss)
      Interest income
       and other
      Interest expense
      Litigation
       settlement losses
      Income tax provision
    Operating income       $108,013        $52,118        $47,287     $58,090
      Depreciation            2,603          2,482          3,014      10,627
      Amortization
       of other
       intangible
       assets                 3,562          2,893          5,064       5,024
      Litigation
       settlement
       losses                     -              -           (201)       (235)
                                ---            ---           ----        ----
    EBITDA (1)              114,178         57,493         55,164      73,506
                            =======         ======         ======      ======


    Three Months Ended December 31, 2007

    Net income
      Interest income
       and other
      Interest expense
      Litigation
       settlement losses
      Income tax provision
    Operating income        $21,836        $14,145        $14,266     $17,301
      Depreciation              483            620            654       1,968
      Amortization
       of other
       intangible
       assets                    40            615          1,317         288
      Litigation
       settlement
       losses                    11              -            (90)          -
                                 --            ---            ---         ---
    EBITDA (1)              $22,370        $15,380        $16,147     $19,557
                            =======        =======        =======     =======


    Year Ended December 31, 2007

    Net income (loss)
      Interest income
       and other
      Interest expense
      Litigation
       settlement losses
      Income tax provision
    Operating income        $70,412        $53,135        $42,893     $55,053
      Depreciation            1,581          2,230          2,376       6,623
      Amortization
       of other
       intangible
       assets                   162          2,102          3,654       1,245
      Litigation
       settlement
       losses                  (526)          (175)           (97)          -
                               ----           ----            ---         ---
    EBITDA (1)              $71,629        $57,292        $48,826     $62,921
                            =======        =======        =======     =======


    Three Months
     Ended December      Economic
     31, 2008           Consulting      Corp HQ         Total
                       -----------      -------         -----

    Net income                                            $31,193
      Interest income
       and other                                           (1,305)
      Interest expense                                     10,216
      Litigation
       settlement gains                                       (50)
      Income tax provision                                 18,408
                                                           ------
    Operating income        $15,027       $(22,013)        58,462
      Depreciation              369          1,481          6,938
      Amortization
       of other
       intangible
       assets                   570              -          5,805
      Litigation
       settlement
       gains                      -              -             50
                                ---            ---             --
    EBITDA (1)               15,966        (20,532)        71,255
                             ======        =======         ======


    Year Ended December 31, 2008

    Net income (loss)                                    $125,435
      Interest income
       and other                                           (8,685)
      Interest expense                                     41,051
      Litigation
       settlement losses                                      661
      Income tax provision                                 80,196
                                                           ------
    Operating income        $55,123       $(81,973)       238,658
      Depreciation            1,616          5,695         26,037
      Amortization
       of other
       intangible
       assets                 2,281              -         18,824
      Litigation
       settlement
       losses                     -           (225)          (661)
                                ---           ----           ----
    EBITDA (1)               59,020        (76,503)       282,858
                             ======        =======        =======


    Three Months Ended December 31, 2007

    Net income                                            $30,794
      Interest income
       and other                                           (4,439)
      Interest expense                                     10,650
      Litigation
       settlement losses                                      130
      Income tax provision                                 18,838
                                                           ------
    Operating income        $10,707       $(22,282)        55,973
      Depreciation              492          1,390          5,607
      Amortization
       of other
       intangible
       assets                   577              -          2,837
      Litigation
       settlement
       losses                     -            (51)          (130)
                                ---            ---           ----
    EBITDA (1)              $11,776       $(20,943)       $64,287
                            =======       ========        =======


    Year Ended December 31, 2007

    Net income (loss)                                     $92,121
      Interest income
       and other                                           (7,639)
      Interest expense                                     43,857
      Litigation
       settlement losses                                    1,002
      Income tax provision                                 57,669
                                                           ------
    Operating income        $42,861       $(77,344)       187,010
      Depreciation            1,772          4,769         19,351
      Amortization
       of other
       intangible
       assets                 3,452              -         10,615
      Litigation
       settlement
       losses                     -           (204)        (1,002)
                                ---           ----         ------
    EBITDA (1)              $48,085       $(72,779)      $215,974
                            =======       ========       ========

    (1)  We define EBITDA as operating income before depreciation and
         amortization of intangible assets plus non-operating litigation
         settlements. Although EBITDA is not a measure of financial condition
         or performance determined in accordance with accounting principles
         generally accepted in the United States (GAAP), we believe that it
         can be a useful operating performance measure for evaluating our
         results of operation as compared from period to period  and as
         compared to our competitors.  EBITDA is a common alternative
         performance measure used by investors, financial analysts and credit
         rating agencies to value and compare the financial performance of
         companies within our industry. We use EBITDA to evaluate and compare
         the operating performance of our segments and it is one of the
         primary measures used to determine employee bonuses. We also use
         EBITDA to value the businesses we acquire or anticipate acquiring.
         EBITDA is 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. This non-GAAP measure should be
         considered in addition to, but not as a substitute for or superior
         to, the information contained in our statements of income.



                              FTI CONSULTING, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE YEAR ENDED DECEMBER 31, 2008 AND 2007
                                 (in thousands)
                                 --------------

                                                             Year Ended
                                                            December 31,
                                                            -------------
                                                           2008      2007
                                                           ----      ----

    Operating activities
    Net income                                           $125,435   $92,121
    Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation                                         26,037    19,351
      Amortization of other intangible assets              18,824    10,615
      Provision for doubtful accounts                      22,474    11,777
      Non-cash share-based compensation                    26,381    22,703
      Excess tax benefits from share-based compensation   (10,820)  (17,986)
      Non-cash interest expense                             3,030     3,139
      Other                                                 1,309       357
      Changes in operating assets and liabilities, net
       of effects from acquisitions:
        Accounts receivable, billed and unbilled          (49,251)  (85,565)
        Notes receivable                                   (9,377)  (22,037)
        Prepaid expenses and other assets                 (11,577)   (1,771)
        Accounts payable, accrued expenses and other           52    17,517
        Accrued special charges                            (3,434)   (8,703)
        Income taxes                                       15,671      (683)
        Accrued compensation                               34,190    27,687
        Billings in excess of services provided            10,908       214
                                                           ------       ---
                               Net cash provided by
                                operating activities      199,852    68,736
                                                          -------    ------

    Investing activities
      Payments for acquisition of businesses, including
       contingent payments and acquisition costs, net
       of cash received                                  (345,541)  (32,243)
      Purchases of property and equipment                 (35,674)  (36,422)
      Other                                                 4,703       482
                                                            -----       ---
                              Net cash used in investing
                               activities                (376,512)  (68,183)
                                                         --------   -------

    Financing activities
      Borrowings under revolving line of credit                 -    25,000
      Payments of revolving line of credit                      -   (25,000)
      Payments of short-term borrowings of acquired
       subsidiary                                          (2,275)        -
      Payments of long-term debt                           (8,744)   (7,945)
      Issuance of common stock, net of offering costs           -   231,408
      Purchase and retirement of common stock                   -   (18,118)
      Net issuance of common stock under equity
       compensation plans                                  20,562    46,322
      Excess tax benefits from share-based compensation    10,820    17,986
      Other                                                  (112)        -
                                                             ----       ---
                              Net cash provided by
                               financing activities        20,251   269,653
                                                           ------   -------

    Effect of exchange rate changes and fair value
     adjustments on cash and cash equivalents             (12,212)   (1,666)
                                                          -------    ------

    Net decrease in cash and cash equivalents            (168,621)  268,540
    Cash and cash equivalents, beginning of period        360,463    91,923
                                                          -------    ------
    Cash and cash equivalents, end of period             $191,842  $360,463
                                                         ========  ========



                               FTI CONSULTING, INC.
                           CONSOLIDATED BALANCE SHEETS
                     (in thousands, except per share amounts)
                     ----------------------------------------

                                                            December 31,
                                                            ------------
                                                          2008        2007
                                                          ----        ----
                          Assets
    Current assets
       Cash and cash equivalents                        $191,842    $360,463
       Accounts Receivable
           Billed receivables                            237,009     190,900
           Unbilled receivables                           98,340      84,743
           Allowance for doubtful accounts and
            unbilled services                            (45,309)    (30,467)
                                                         -------     -------
                                                         290,040     245,176
       Notes receivable                                   15,145      11,687
       Prepaid expenses and other current assets          31,055      33,657
       Deferred income taxes                              24,372      10,544
                                                          ------      ------
          Total current assets                           552,454     661,527

    Property and equipment, net of accumulated
     depreciation                                         78,575      67,843
    Goodwill                                           1,151,388     940,878
    Other intangible assets, net of amortization         189,304      84,673
    Notes receivable, net of current portion              56,500      52,374
    Other assets                                          59,948      51,329
                                                          ------      ------

          Total assets                                $2,088,169  $1,858,624
                                                      ==========  ==========

           Liabilities and Stockholders' Equity
    Current liabilities
        Accounts payable, accrued expenses and other    $109,036    $103,410
      Accrued compensation                               133,103     102,054
      Current portion of long-term debt and capital
       lease obligations                                 150,898     157,772
        Billings in excess of services provided           30,872      17,826
                                                          ------      ------
          Total current liabilities                      423,909     381,062

    Long-term debt and capital lease obligations,
     net of current portion                              418,592     415,653
    Deferred income taxes                                 76,804      49,113
    Other liabilities                                     45,037      40,546
                                                          ------      ------
          Total liabilities                              964,342     886,374
                                                         -------     -------

    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-  50,934 (2008) and 48,979 (2007)         509         490
      Additional paid-in capital                         717,158     601,637
      Retained earnings                                  486,493     361,058
      Accumulated other comprehensive (loss) income      (80,333)      9,065
                                                         -------       -----
          Total stockholders' equity                   1,123,827     972,250
                                                       ---------     -------

          Total liabilities and stockholders' equity  $2,088,169  $1,858,624
                                                      ==========  ==========


SOURCE FTI Consulting, Inc.


http://www.fticonsulting.com

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