FTI Consulting, Inc. Reports Record 2009 Fourth Quarter and Record Full Year Results

- Fourth Quarter Revenues of $342.9 Million, Net Income of $36.6 Million, EPS of $0.71 and EBITDA of $80.8 Million; All Fourth Quarter Records
- Full Year Revenues of $1.4 Billion, Net Income of $143 Million, EBITDA of $317 Million, Cash Provided by Operations of $251 Million and EPS of $2.70; All Full Year Records
- 2010 Guidance of Revenues from $1.47 Billion to $1.57 Billion; EPS Before Special Charges (a non-GAAP measure) Will be Between $3.00 and $3.25
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WEST PALM BEACH, Fla., Feb 26, 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 fourth quarter and full year ended December 31, 2009.

For the fourth quarter of 2009, revenues increased 6.2% to $342.9 million from $322.9 million in the prior year period. Net income increased 21.3% to $36.6 million, or $0.71 per diluted common share, from $30.1 million, or $0.56 per diluted common share. EBITDA, a non-GAAP financial measure as defined below, increased 14.5% to $80.8 million, or 23.6% of revenues, from $70.6 million, or 21.9% of revenues, in the fourth quarter of 2008.

In the fourth quarter of 2009, the Company entered into a $250 million accelerated stock buyback ("ASB"). The transaction was completed on January 21, 2010 and resulted in the purchase of 5,455,591 shares, of which 4,874,807 shares were delivered in the fourth quarter of 2009.

As of December 31, 2009, cash, cash equivalents and short-term investments totaled $133.9 million after funding the $250 million ASB. Cash provided by operations for the year was $251 million, compared to $197 million in the prior year.

Commenting on the these results, Jack Dunn, FTI's president and chief executive officer, said, "We are pleased to have produced another record quarter and year of performance as we continue to transition from a period dominated by the issues of a declining economy to one where we are beginning to see evidence of economic growth and greater willingness on the part of companies to make investments in their futures. Even as credit conditions have eased and there is improved access to capital, in the fourth quarter our restructuring and bankruptcy practice continued to perform at high levels of activity across a broad range of industries, although not at the exceptional rates of growth seen in prior quarters.

Mr. Dunn continued, "At the same time, we are experiencing signs of improving trends in discretionary spending and capital markets activity that drive our pro-cyclical businesses. The Economic Consulting segment continued to work on an increasing number of cases in its financial economics and network industries practices which we expect to provide accelerating growth and improving margins in 2010. The number of matters opened within the Forensic and Litigation Consulting segment is also increasing. Our most economically sensitive segment - Strategic Communications - won more retainer revenues than it lost during the fourth quarter for the first time since the economic downturn began in 2008.

"Over the past several years, we have invested in businesses and professionals that provide FTI with growth drivers across the economic cycle. In 2009, we continued these investments, including expanding our brand through our first programmatic use of TV, print media and high profile branding events. We also increased our investment in research and development in our Technology segment resulting in the introduction of Acuity, our new integrated document review offering, at LegalTech on February 1, 2010.

Mr. Dunn concluded, "There is still a great deal of uncertainty regarding the direction of the world's economies and financial markets. While certain regions and sectors are rebounding, others still face structural hurdles that will take time and resources to resolve. As a business that is positioned to advise its clients on both the upside and downside of the economic cycle, we believe there are ample opportunities across the economic and regulatory landscape to enable FTI to achieve another record year in 2010."

Fourth Quarter Business Segment Results

Corporate Finance/Restructuring

Revenues in the Corporate Finance/Restructuring segment increased 16.5% to $124.9 million from $107.3 million in the fourth quarter of the prior year. Segment EBITDA increased 17.8% to $43.8 million, or 35.1% of segment revenues, from $37.2 million, or 34.7% of segment revenues, in the prior year quarter. Performance was driven by strong growth in the segment's healthcare and communications/media/entertainment practices, and its international practices, notably the Canadian and Latin America practices, launched in December 2008. The segment continues to see strong activity in the financial services, real estate, insurance, entertainment and energy sectors.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased 5.5% to $61.8 million from $58.6 million in the fourth quarter of the prior year. Segment EBITDA increased to $12.8 million, or 20.6% of segment revenues, compared to $12.2 million, or 20.8% of segment revenues, in the prior year quarter. The segment performed well in an environment in which corporations are actively controlling expenses and deferring litigation, and regulatory agencies have yet to complete building out their infrastructures and staff. Continued contributions from several large financial fraud investigations and strong performances by the segment's intellectual property, regulated industries and Latin American investigations practices were partially offset by lower revenues from its trial services practice, which was particularly impacted by the ongoing softness in litigation activity. The segment is experiencing an increasing number of active engagements, most notably in financial consulting and construction.

Economic Consulting

Revenues in the Economic Consulting segment increased 18.5% to a record $63.2 million from $53.3 million in the fourth quarter of the prior year. Segment EBITDA was $13.2 million, or 20.9% of segment revenues, compared to $16.0 million, or 30.0% of segment revenues, for the prior year quarter. The segment's record revenue performance in the quarter reflects strong activity in its strategic mergers and acquisitions ("M&A"), financial economics and network industries practices, continued growth in the segment's offices opened during the year in New York and Los Angeles, and acceleration in the level of work in its recently-formed European practice based in London. Margins in the segment declined relative to an outstanding performance in 2008, reflecting the cost of expansion of activities into new markets and the hiring of additional professionals to meet anticipated future demand. The segment continues to see increasing demand, particularly in its financial economics and network industries practices, as evidenced by more active engagements compared to both the prior year quarter and third quarter.

Technology

Revenues in the Technology segment were $47.7 million, compared to $52.2 million in the fourth quarter of the prior year. Segment EBITDA increased 27.6% to $17.4 million, or 36.3% of segment revenues, compared to $13.6 million, or 26.1% of segment revenues, in the prior year quarter. Revenues in the segment decreased year-over-year as the demand related to complex litigation and regulatory investigations continued to be soft. In addition, pricing for certain aspects of the Technology segment continued to be challenging. Segment margins improved due to operating efficiencies and the completion earlier in the year of the integration of the Attenex acquisition that adversely affected margins in 2008.

Strategic Communications

Revenues in the Strategic Communications segment were $45.3 million, compared to $51.6 million in the fourth quarter of the prior year. Segment EBITDA was $6.7 million, or 14.8% of segment revenues, compared to $12.2 million, or 23.6% of revenues, in the prior year quarter. The segment continued to face the challenges of a dramatically lower volume of M&A transactions and the continued impact of the global recession on discretionary spending during the quarter, which caused a decline in revenues related to M&A engagements and ongoing pressure on fees from retained clients with a resulting shift from retainer-based to project revenues. While the segment did take actions early in the year to reduce headcount in response to lower demand, certain core resources were retained to enable the segment to service the expected upturn in activity as the recession ends and capital markets activity returns to more normal levels.

Special Charge

The Company intends to record a special charge in the first quarter of 2010 of approximately $25 million relating to the termination of approximately 150 employees and the consolidation of three office locations. These actions are intended to eliminate certain redundancies resulting from acquisitions completed over the last two years, to better align capacity with expected demand, and to provide for appropriate levels of administrative support, but in a more efficient manner. This charge is expected to require approximately $20 million in cash with the balance relating to non-cash charges primarily resulting from terminating certain employees who are contractually entitled to employee loan forgiveness and vesting of equity compensation. The Company believes this reduction in headcount is all that will be required this year.

2010 Guidance

Based on current market conditions, the Company estimates that revenues for the year will be between $1.47 billion and $1.57 billion and EPS Before Special Charges (a non-GAAP measure) will be between $3.00 and $3.25. The Special Charge, described above, is expected to be approximately $25 million, or $0.31 cents per share.

Fourth Quarter Conference Call

FTI will hold a conference call for analysts and investors to discuss fourth quarter and full year financial results at 9:00 AM Eastern Time on Friday, February 26, 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, http://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 3,500 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 http://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 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.
                        CONSOLIDATED STATEMENTS OF INCOME
                  FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
                      (in thousands, except per share data)
                      -------------------------------------
                                                     Year Ended December 31,
                                                     -----------------------
                                                        2009    2008(1)(2)
                                                        ----    ----------
    Revenues                                        $1,399,946    $1,293,145
                                                    ----------    ----------
    Operating expenses
      Direct cost of revenues                          767,387       708,783
      Selling, general and administrative expense      344,318       330,191
      Amortization of other intangible assets           24,701        18,824
                                                        ------        ------
                                                     1,136,406     1,057,798
                                                     ---------     ---------
    Operating income                                   263,540       235,347
                                                       -------       -------
    Other income (expense)
      Interest income and other                          8,158         8,840
      Interest expense                                 (44,923)      (45,105)
      Litigation settlement gains (losses), net            250          (661)
                                                           ---          ----
                                                       (36,515)      (36,926)
                                                       -------       -------
    Income before income tax provision                 227,025       198,421
    Income tax provision                                83,999        77,515
                                                        ------        ------
    Net income                                        $143,026      $120,906
                                                      ========      ========
    Earnings  per common share - basic                   $2.86         $2.46
                                                         =====         =====
    Weighted average common shares outstanding -
     basic                                              49,963        49,193
                                                        ======        ======
    Earnings per common share - diluted                  $2.70         $2.26
                                                         =====         =====
    Weighted average common shares outstanding -
     diluted                                            53,044        53,603
                                                        ======        ======
    (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
        Convertible Debt Instruments that May be Settled in Cash Upon
        Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
        addresses the accounting for convertible debt instruments that may be
        settled in cash upon conversion. Our 3 3/4% Convertible Senior Notes
        due 2012 issued in August 2005 are subject to FSP APB 14-1. The
        adoption of FSP APB 14-1 requires retrospective application of its
        effects to all previous years. The adoption of FSP APB 14-1 resulted
        in a $4.0 million increase in interest expense, a $1.6 million
        decrease in income tax provision, a $2.4 million decrease in net
        income and a $0.05 decrease in basic and diluted earnings per share
        for the year ended December 31, 2008 as compared to the amounts
        previously reported.
    (2) These amounts are revised based upon our completion of an internal
        re-examination of our historical practices regarding our accounting
        for acquisition-related earnout payments. In connection with this
        re-examination, we concluded that we had reported immaterial errors
        in prior period financial statements. Further information related to
        these immaterial errors can be found in the Form 10-Q for the
        quarterly period ended September 30, 2009 as filed by the Company
        with the Securities and Exchange Commission on November 5, 2009.
        This press release should be read in conjunction with such previously
        filed reports.  The impact of the correction of these errors resulted
        in a decrease in net income of $2.1 million and a decrease in  basic
        and diluted earnings per share of $0.04 for the year ended
        December 31, 2008 as compared to the amounts previously reported.
                             FTI CONSULTING, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
             FOR THE THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008
                     (in thousands, except per share data)
                     -------------------------------------
                                                     Three Months Ended
                                                        December 31,
                                                        ------------
                                                     2009    2008(1)(2)
                                                     ----    ----------
    Revenues                                       $342,938      $322,876
                                                   --------      --------
    Operating expenses
      Direct cost of revenues                       187,590       171,080
      Selling, general and administrative expense    81,747        88,202
      Amortization of other intangible assets         6,331         5,805
                                                      -----         -----
                                                    275,668       265,087
                                                    -------       -------
    Operating income                                 67,270        57,789
                                                     ------        ------
    Other income (expense)
      Interest income and other                       2,073         1,304
      Interest expense                              (11,446)      (11,257)
      Litigation settlement gains, net                    -            50
                                                          -            --
                                                     (9,373)       (9,903)
                                                     ------        ------
    Income before income tax provision               57,897        47,886
    Income tax provision                             21,324        17,737
                                                     ------        ------
    Net income                                      $36,573       $30,149
                                                    =======       =======
    Earnings  per common share - basic                $0.75         $0.61
                                                      =====         =====
    Weighted average common shares outstanding -
     basic                                           48,612        49,738
                                                     ======        ======
    Earnings per common share - diluted               $0.71         $0.56
                                                      =====         =====
    Weighted average common shares outstanding -
     diluted                                         51,433        53,411
                                                     ======        ======
    (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
        Convertible Debt Instruments that May be Settled in Cash Upon
        Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
        addresses the accounting for convertible debt instruments that may be
        settled in cash upon conversion. Our 3 3/4% Convertible Senior Notes
        due 2012 issued in August 2005 are subject to FSP APB 14-1. The
        adoption of FSP APB 14-1 requires retrospective application of its
        effects to all previous years. The adoption of FSP APB 14-1 resulted
        in a $1.0 million increase in interest expense, a $0.4 million
        decrease in income tax provision, a $0.6 million decrease in net
        income and a $.01 decrease in basic and diluted earnings per share
        for the three months ended December 31, 2008 as compared to the
        amounts previously reported.
    (2) These amounts are revised based upon our completion of an internal
        re-examination of our historical practices regarding our accounting
        for acquisition-related earnout payments. In connection with this
        re-examination, we concluded that we had reported immaterial errors
        in prior period financial statements. Further information related to
        these immaterial errors can be found in the Form 10-Q for the
        quarterly period ended September 30, 2009 as filed by the Company with
        the Securities and Exchange Commission on November 5, 2009. This press
        release should be read in conjunction with such previously filed
        reports.  The impact of the correction of these errors resulted in a
        decrease in net income of $0.4 million and a decrease in  basic and
        diluted earnings per share of $0.01 for the three months ended
        December 31, 2008 as compared to the amounts previously reported.
                             FTI CONSULTING, INC.
                   OPERATING RESULTS BY BUSINESS SEGMENT
                                            Revenues EBITDA (1) Margin
    ------------------------------------    -------- ---------- ------
                                                   (in thousands)
    Three Months Ended December 31, 2009
      Corporate Finance/Restructuring       $124,940   $43,801   35.1%
      Forensic and Litigation Consulting      61,812    12,763   20.6%
      Economic Consulting                     63,176    13,224   20.9%
      Technology                              47,745    17,355   36.3%
      Strategic Communications                45,265     6,709   14.8%
                                              ------     -----
                                            $342,938    93,852   27.4%
                                            ========
       Corporate                                       (13,010)
                                                       -------
     EBITDA (1)                                        $80,842   23.6%
                                                       =======
    ----------------------------
    Year Ended December 31, 2009
      Corporate Finance/Restructuring       $514,260  $175,551   34.1%
      Forensic and Litigation Consulting     259,204    59,581   23.0%
      Economic Consulting                    234,723    47,845   20.4%
      Technology                             211,680    75,715   35.8%
      Strategic Communications               180,079    24,941   13.9%
                                             -------    ------
                                          $1,399,946   383,633   27.4%
                                          ==========
       Corporate                                       (66,378)
                                                       -------
      EBITDA (1)                                      $317,255   22.7%
                                                      ========
    ------------------------------------
    Three Months Ended December 31, 2008
      Corporate Finance/Restructuring       $107,280   $37,181   34.7%
      Forensic and Litigation Consulting      58,567    12,188   20.8%
      Economic Consulting                     53,294    15,966   30.0%
      Technology                              52,164    13,600   26.1%
      Strategic Communications                51,571    12,179   23.6%
                                              ------    ------
                                            $322,876    91,114   28.2%
                                            ========
       Corporate                                       (20,532)
                                                       -------
      EBITDA (1) (2)                                   $70,582   21.9%
                                                       =======
    ----------------------------
    Year Ended December 31, 2008
      Corporate Finance/Restructuring       $374,504  $114,178   30.5%
      Forensic and Litigation Consulting     253,918    57,493   22.6%
      Economic Consulting                    219,883    59,020   26.8%
      Technology                             220,359    73,506   33.4%
      Strategic Communications               224,481    51,853   23.1%
                                             -------    ------
                                          $1,293,145   356,050   27.5%
                                          ==========
       Corporate                                       (76,503)
                                                       -------
      EBITDA (1) (2)                                  $279,547   21.6%
                                                      ========

                                                        Average  Revenue-
                                                       Billable Generating
                                         Utilization(3) Rate(3) Headcount
    ------------------------------------ -------------- ------- ---------
    Three Months Ended December 31, 2009
      Corporate Finance/Restructuring             64%     $453    758
      Forensic and Litigation Consulting          67%     $328    667
      Economic Consulting                         78%     $453    302
      Technology                                 N/M       N/M    338
      Strategic Communications                   N/M       N/M    573
                                                                  ---
                                                 N/M       N/M  2,638
                                                                =====
       Corporate
     EBITDA (1)
    ----------------------------
    Year Ended December 31, 2009
      Corporate Finance/Restructuring             73%     $439    758
      Forensic and Litigation Consulting          73%     $333    667
      Economic Consulting                         76%     $456    302
      Technology                                 N/M       N/M    338
      Strategic Communications                   N/M       N/M    573
                                                                  ---
                                                 N/M       N/M  2,638
                                                                =====
       Corporate
      EBITDA (1)
    ------------------------------------
    Three Months Ended December 31, 2008
      Corporate Finance/Restructuring             73%     $451    669
      Forensic and Litigation Consulting          65%     $332    639
      Economic Consulting                         76%     $456    264
      Technology                                 N/M       N/M    357
      Strategic Communications                   N/M       N/M    592
                                                                  ---
                                                 N/M       N/M  2,521
                                                                =====
       Corporate
      EBITDA (1) (2)
    ----------------------------
    Year Ended December 31, 2008
      Corporate Finance/Restructuring             75%     $438    669
      Forensic and Litigation Consulting          70%     $330    639
      Economic Consulting                         83%     $446    264
      Technology                                 N/M       N/M    357
      Strategic Communications                   N/M       N/M    592
                                                                  ---
                                                 N/M       N/M  2,521
                                                                =====
       Corporate
      EBITDA (1) (2)
    (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 generally accepted
        accounting principles (GAAP), we believe that it 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 credit 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. 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) These amounts are revised based upon our completion of an internal
        re-examination of our historical practices regarding our accounting
        for acquisition-related earnout payments. In connection with this
        re-examination, we concluded that we had reported immaterial errors
        in prior period financial statements. Further information related to
        these immaterial errors can be found in the Form 10-Q for the
        quarterly period ended September 30, 2009 as filed by the Company
        with the Securities and  Exchange Commission on November 5, 2009.
        This press release should be read in conjunction with such previously
        filed reports.
    (3) 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 EARNINGS BEFORE
                 INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
                                 (in thousands)
                                 --------------
                           Corporate   Forensic and
    Three Months Ended     Finance /    Litigation   Economic
    December 31, 2009    Restructuring  Consulting  Consulting  Technology
                         -------------  ----------  ----------- ----------
    Net income
      Interest income and
       other
      Interest expense
      Litigation settlement
       losses
      Income tax provision
    Operating income         $41,282       $11,292       $12,263    $12,309
      Depreciation               949           591           490      2,989
      Amortization of other
       intangible assets       1,570           880           471      2,057
      Litigation settlement
       gains                       -             -             -          -
                                   -             -             -          -
    EBITDA (1)                43,801        12,763        13,224     17,355
                              ======        ======        ======     ======
    Year Ended December 31, 2009
    Net income
      Interest income and
       other
      Interest expense
      Litigation settlement
       losses
      Income tax provision
    Operating income        $165,757       $54,456       $43,928    $55,599
      Depreciation             3,462         2,319         1,798     11,873
      Amortization of other
       intangible assets       6,332         2,806         2,119      8,243
      Litigation settlement
       gains                       -             -             -          -
                                   -             -             -          -
    EBITDA (1)               175,551        59,581        47,845     75,715
                             =======        ======        ======     ======
    Three Months Ended
     December 31, 2008(2)(3)
    Net income
      Interest income and
       other
      Interest expense
      Litigation settlement
       losses
      Income tax provision
    Operating income         $35,268       $10,800       $15,027     $8,434
      Depreciation               723           597           369      3,067
      Amortization of other
       intangible assets       1,190           791           570      2,099
      Litigation settlement
       losses                      -             -             -          -
                                   -             -             -          -
    EBITDA (1)                37,181        12,188        15,966     13,600
                              ======        ======        ======     ======
    Year Ended December 31,
      2008(2)(3)
    Net income (loss)
      Interest income and
       other
      Interest expense
      Litigation settlement
       losses
      Income tax provision
    Operating income        $108,013       $52,118       $55,123    $58,090
      Depreciation             2,603         2,482         1,616     10,627
      Amortization of other
       intangible assets       3,562         2,893         2,281      5,024
      Litigation settlement
       losses                      -             -             -       (235)
                                   -             -             -       ----
    EBITDA (1)               114,178        57,493        59,020     73,506
                             =======        ======        ======     ======
                                           Strategic
    Three Months Ended                      Communi-
     December 31,2009                       cations      Corp HQ    Total
                                          ----------     -------    -----
    Net income                                                     $36,573
      Interest income and other                                     (2,073)
      Interest expense                                              11,446
      Litigation settlement losses                                       -
      Income tax provision                                          21,324
                                                                    ------
    Operating income                            $4,570  $(14,446)   67,270
      Depreciation                                 786     1,436     7,241
      Amortization of other intangible
       assets                                    1,353         -     6,331
      Litigation settlement gains                    -         -         -
                                                     -         -         -
    EBITDA (1)                                   6,709   (13,010)   80,842
                                                 =====   =======    ======
    Year Ended December 31, 2009
    Net income                                                    $143,026
      Interest income and other                                     (8,158)
      Interest expense                                              44,923
      Litigation settlement losses                                    (250)
      Income tax provision                                          83,999
                                                                    ------
    Operating income                           $16,455  $(72,655)  263,540
      Depreciation                               3,285     6,027    28,764
      Amortization of other intangible
       assets                                    5,201         -    24,701
      Litigation settlement gains                    -       250       250
                                                     -       ---       ---
    EBITDA (1)                                  24,941   (66,378)  317,255
                                                ======   =======   =======
    Three Months Ended December 31,
     2008(2)(3)
    Net income                                                     $30,149
      Interest income and other                                     (1,304)
      Interest expense                                              11,257
      Litigation settlement losses                                     (50)
      Income tax provision                                          17,737
                                                                    ------
    Operating income                           $10,273  $(22,013)   57,789
      Depreciation                                 701     1,481     6,938
      Amortization of other intangible
       assets                                    1,155         -     5,805
      Litigation settlement losses                  50         -        50
                                                    --         -        --
    EBITDA (1)                                  12,179   (20,532)   70,582
                                                ======   =======    ======
    Year Ended December 31, 2008 (2) (3)
    Net income (loss)                                             $120,906
      Interest income and other                                     (8,840)
      Interest expense                                              45,105
      Litigation settlement losses                                     661
      Income tax provision                                          77,515
                                                                    ------
    Operating income                           $43,976  $(81,973)  235,347
      Depreciation                               3,014     5,695    26,037
      Amortization of other intangible
       assets                                    5,064         -    18,824
      Litigation settlement losses                (201)     (225)     (661)
                                                  ----      ----      ----
    EBITDA (1)                                  51,853   (76,503)  279,547
                                                ======   =======   =======
    (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 generally accepted
        accounting principles (GAAP), we believe that it 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 credit 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. 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.
    (2) As of January 1, 2009 we adopted FSP No. APB 14-1, "Accounting for
        Convertible Debt Instruments that May be Settled in Cash upon
        Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
        addresses the accounting for convertible debt that may be settled in
        cash upon conversion. Our 3 3/4% Convertible Senior Subordinated
        Notes due 2012 issued in August 2005 are subject to FSP APB 14-1.
        The adoption of FSP APB 14-1 requires retrospective application of
        its effects to all previous years.  The adoption of FSP APB 14-1
        resulted in a $1.0 million increase in interest expense, a
        $0.4 million decrease in income tax provision, and a $0.6 million
        decrease in net income for the three months ended December 31, 2008
        as compared to the amounts previously reported.  For the year ended
        December 31, 2008, the adoption of FSP APB 14-1 resulted in a
        $4.0 million increase in interest expense, a $1.6 million decrease
        in income tax provision, and a $2.4 million decrease in net income
        as compared to the amounts previously reported.
    (3) These amounts are revised based upon our completion of an internal
        re-examination of our historical practices regarding our accounting
        for acquisition-related earnout payments. In connection with this
        re-examination, we concluded that we had reported immaterial errors
        in prior period financial statements. Further information related to
        these immaterial errors can be found in the Form 10-Q for the
        quarterly period ended September 30, 2009 as filed by the Company
        with the Securities and  Exchange Commission on November 5, 2009.
        This press release should be read in conjunction with such previously
        filed reports.
              RECONCILIATION OF FULLY DILUTED EARNINGS PER SHARE TO
                          EPS BEFORE SPECIAL CHARGES
    --------------------------------------------------------------------------
    In our press release hereof, we provide 2010 guidance based on GAAP and non-GAAP measures.  
The following table provides a reconciliation between 2010 guidance based on non-GAAP measures 
to the most directly comparable GAAP measure
    --------------------------------------------------------------------------
    EPS Before Special Charges            $3.00-3.25
    Less: Special Charges                 $0.31-0.31
    ---------------------                 ----------
    Earnings per common share - diluted   $2.69-2.94
    -----------------------------------   ----------
                                 FTI CONSULTING, INC.
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
                                    (in thousands)
                                    --------------
                                                    Year Ended December 31,
                                                    -----------------------
                                                       2009    2008(1)(2)
                                                       ----    ----------
    Operating activities
    Net income                                       $143,026      $120,906
    Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation                                     28,765        26,037
      Amortization of other intangible assets          24,702        18,824
      Provision for doubtful accounts                  19,866        22,474
      Non-cash share-based compensation                25,631        26,381
      Excess tax benefits from share-based
       compensation                                    (5,193)      (10,820)
      Non-cash interest expense                         7,214         7,124
      Other                                            (1,604)        3,407
      Changes in operating assets and liabilities,
       net of effects from acquisitions:
        Accounts receivable, billed and unbilled      (13,314)      (49,251)
        Notes receivable                              (18,364)       (9,377)
        Prepaid expenses and other assets               1,334       (11,577)
        Accounts payable, accrued expenses and other  (14,179)       (3,382)
        Income taxes                                   29,877        12,990
        Accrued compensation                           20,090        32,836
        Billings in excess of services provided         2,918        10,908
                                                        -----        ------
                               Net cash provided by
                                operating activities  250,769       197,480
                                                      -------       -------
    Investing activities
      Payments for acquisition of businesses,
       including contingent payments and
       acquisition costs, net of cash received        (46,710)     (343,169)
      Purchases of property and equipment             (28,557)      (35,674)
      Purchases of short-term investments             (35,717)            -
      Proceeds from sale of short-term investments     20,576             -
      Other                                               520         4,703
                                                          ---         -----
                              Net cash used in
                               investing activities   (89,888)     (374,140)
                                                      -------      --------
    Financing activities
      Payments of short-term borrowings of acquired
       subsidiary                                           -        (2,275)
      Payments of long-term debt and capital lease
       obligations                                    (13,761)       (8,744)
      Cash received for settlement of interest rate
       swaps                                            2,288             -
      Purchase and retirement of common stock        (250,000)            -
      Net issuance of common stock under equity
       compensation plans                              15,699        20,562
      Excess  of tax benefits from share based
       compensation                                     5,193        10,820
      Other                                               303          (112)
                                                          ---          ----
                              Net cash (used in)
                               provided by financing
                               activities            (240,278)       20,251
                                                     --------        ------
    Effect of exchange rate changes and fair value
     adjustments on cash and cash equivalents           6,427       (12,212)
                                                        -----       -------
    Net decrease in cash and cash equivalents         (72,970)     (168,621)
    Cash and cash equivalents, beginning of period    191,842       360,463
                                                      -------       -------
    Cash and cash equivalents, end of period         $118,872      $191,842
                                                     ========      ========
    (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
        Convertible Debt Instruments that May be Settled in Cash Upon
        Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
        addresses the accounting for convertible debt instruments that may
        be settled in cash upon conversion. Our 3 3/4% Convertible Senior
        Notes due 2012 issued in August 2005 are subject to FSP APB 14-1.
        The adoption of FSP APB 14-1 requires retrospective application of
        its effects to all previous years.
    (2) These amounts are revised based upon our completion of an internal
        re-examination of our historical practices regarding our accounting
        for acquisition-related earnout payments. In connection with this
        re-examination, we concluded that we had reported immaterial errors
        in prior period financial statements. Further information related to
        these immaterial errors can be found in the Form 10-Q for the
        quarterly period ended September 30, 2009 as filed by the Company
        with the Securities and Exchange Commission on November 5, 2009.
        This press release should be read in conjunction with such previously
        filed reports.
                               FTI CONSULTING, INC.
                            CONSOLIDATED BALANCE SHEETS
                         AS OF DECEMBER 31, 2009 AND 2008
                     (in thousands, except per share amounts)
                     ----------------------------------------
                                                   December 31,  December 31,
                                                         2009    2008(1)(2)
                                                         ----    ----------
                             Assets
    Current assets
      Cash and cash equivalents                        $118,872      $191,842
       Accounts receivable:
           Billed receivables                           241,911       237,009
           Unbilled receivables                         104,959        98,340
           Allowance for doubtful accounts and unbilled
            services                                    (59,328)      (45,309)
                                                        -------       -------
             Accounts receivable, net                   287,542       290,040
       Notes receivable                                  20,853        15,145
       Prepaid expenses and other current assets         52,172        34,989
       Deferred income taxes                             20,476        24,372
                                                         ------        ------
           Total current assets                         499,915       556,388
    Property and equipment, net of accumulated
     depreciation                                        80,678        78,575
    Goodwill                                          1,195,949     1,143,461
    Other intangible assets, net of amortization        175,962       189,304
    Notes receivable, net of current portion             69,213        56,500
    Other assets                                         55,621        59,349
                                                         ------        ------
          Total assets                               $2,077,338    $2,083,577
                                                     ==========    ==========
               Liabilities and Stockholders' Equity
    Current liabilities
      Accounts payable, accrued expenses and other      $81,193      $108,905
      Accrued compensation                              152,807       135,922
      Current portion of long-term debt and
       capital lease obligations                        138,101       132,915
      Billings in excess of services provided            34,101        30,872
                                                         ------        ------
        Total current liabilities                       406,202       408,614
    Long-term debt and capital lease obligations,
     net of current portion                             417,397       418,592
    Deferred income taxes                                95,704        83,777
    Other liabilities                                    53,821        45,037
                                                         ------        ------
          Total liabilities                             973,124       956,020
    Stockholders' equity
      Preferred stock, $0.01 par value; 5,000
       shares authorized, none outstanding                    -             -
      Common stock, $0.01 par value; 75,000
       shares authorized; 75,000 shares issued and
       outstanding - 46,985 (2009) and 50,903 (2008)        470           509
      Additional paid-in capital                        535,754       733,520
      Retained earnings                                 615,529       472,503
      Accumulated other comprehensive loss              (47,539)      (78,975)
                                                        -------       -------
          Total stockholders' equity                  1,104,214     1,127,557
                                                      ---------     ---------
          Total liabilities and stockholders'
           equity                                    $2,077,338    $2,083,577
                                                     ==========    ==========
    (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
        Convertible Debt Instruments that May be Settled in Cash
        Upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1)
        which addresses the accounting for convertible debt instruments that
        may be settled in cash upon conversion. Our 3 3/4% Convertible Senior
        Notes due 2012 issued in August 2005 are subject to FSP APB 14-1.
        The adoption of FSP APB 14-1 requires retrospective application of
        its effects to all previous years. The adoption of this FSP resulted
        in a $0.6 million decrease in other assets, a $18.0 million decrease
        in the current portion of long-term debt, a $7.0 million increase in
        deferred income taxes, an $18.0 million increase in additional paid in
        capital and a $7.6 million decrease in retained earnings from the
        amounts previously reported at December 31, 2008.
    (2) These amounts are revised based upon our completion of an internal
        re-examination of our historical practices regarding our
        accounting for acquisition-related earnout payments. In connection
        with this re-examination, we concluded that we had reported
        immaterial errors in prior period financial statements. Further
        information related to these immaterial errors can be found in the
        Form 10-Q for the quarterly period ended September 30, 2009 as filed
        by the Company with the Securities and Exchange Commission on
        November 5, 2009. This press release should be read in conjunction
        with such previously filed reports.

SOURCE FTI Consulting, Inc.

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