FTI Consulting Reports Fourth Quarter and Full Year 2015 Results

  • Fourth Quarter Revenues of $442.2 Million; Full Year Revenues of $1.78 Billion
  • Fourth Quarter Adjusted EPS of $0.24; Full Year Adjusted EPS of $1.84
  • Full Year 2016 Adjusted EPS Guidance Range of Between $1.90 and $2.15

WASHINGTON, Feb. 25, 2016 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN) (the “Company”), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today released its financial results for the quarter and full year ended December 31, 2015.

For the quarter, revenues increased 4.0 percent to $442.2 million compared to $425.2 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues increased 6.3 percent compared to the prior year quarter. Fully diluted earnings per share (“EPS”) were $0.25 compared to $0.02 in the prior year quarter. Fourth quarter EPS in the prior year quarter included a $4.6 million non-cash income tax reserve and a $1.6 million special charge, which reduced EPS by $0.11 and $0.02, respectively. Adjusted EPS and Adjusted EBITDA were $0.24 and $35.2 million, respectively, compared to $0.04 and $36.1 million respectively, in the prior year quarter. Adjusted EBITDA was 8.0 percent of revenues as compared to 8.5 percent of revenues in the prior year quarter.

For the full year, revenues increased 1.3 percent to $1.78 billion compared to $1.76 billion in the prior year. Excluding the estimated negative impact of FX, revenues increased 4.1 percent compared to the prior year. EPS were $1.58 and included a $19.6 million debt extinguishment charge compared to the prior year EPS of $1.44, which included $16.3 million of special charges. Full year Adjusted EPS were $1.84 and Adjusted EBITDA was $205.8 million, or 11.6 percent of revenues, compared to Adjusted EPS of $1.64 and Adjusted EBITDA of $210.6 million, or 12.0 percent of revenues, in the prior year.

Adjusted EPS, Adjusted EBITDA and Adjusted Segment EBITDA are non-GAAP measures defined elsewhere in this press release and are reconciled to GAAP measures in the accompanying financial tables.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “We, of course, are pleased that we were able, for the first time since 2009, to drive double-digit Adjusted EPS growth this past year.”  

Mr. Gunby added, “Though 2016 will be another year of major change, with all its attendant risks and uncertainties, the accomplishments to date mean we exit 2015 within sight of our goal of being able to drive a double-digit Adjusted EPS gain on a sustained basis going forward ― and to do so while building an ever more robust platform for great professionals to serve our clients on their most important issues.” 

Cash Position and Capital Allocation
Net cash provided by operating activities for the year was $139.9 million compared to net cash provided by operating activities of $135.4 million in the prior year. Cash and cash equivalents were $149.8 million at December 31, 2015 compared to $283.7 million at December 31, 2014. During the quarter, and for the year, the Company spent $26.5 million to repurchase approximately 765,000 shares at an average price of $34.68 under its $50 million share repurchase authorization, which expires on May 5, 2016.

Fourth Quarter Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $18.5 million or 19.9 percent to $111.6 million in the quarter compared to $93.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $21.0 million or 22.6 percent compared to the prior year quarter. The increase in revenues was driven primarily by higher demand for distressed service offerings in North America. Adjusted Segment EBITDA was $18.9 million, or 17.0 percent of segment revenues, compared to $9.9 million, or 10.6 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to an increased mix of higher priced distressed service offerings combined with a lower cost structure in Australia, which was partially offset by higher bad debt expense.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $4.4 million or 3.7 percent to $116.7 million in the quarter compared to $121.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $2.2 million or 1.8 percent compared to the prior year quarter. The decrease in revenues was driven by lower realized pricing and demand in the health solutions practice, which was partially offset by higher realized pricing and demand in the financial and enterprise data analytics practice. Adjusted Segment EBITDA was $8.8 million, or 7.5 percent of segment revenues, compared to $19.4 million, or 16.1 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to the aforementioned declines in the health solutions practice, lower utilization in the disputes and investigations practices and higher severance costs.

Economic Consulting
Revenues in the Economic Consulting segment increased $12.1 million or 11.4 percent to $118.6 million in the quarter compared to $106.5 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $14.0 million or 13.2 percent compared to the prior year quarter. The increase in revenues was driven by higher demand for mergers and acquisitions (“M&A”) related antitrust and international arbitration services. Adjusted Segment EBITDA was $18.8 million, or 15.9 percent of segment revenues, compared to $9.8 million, or 9.2 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was driven by higher realized pricing and utilization across certain practices, a reduction in a tax equalization employee benefit cost and lower bad debt expense.

Technology
Revenues in the Technology segment decreased $11.6 million or 20.0 percent to $46.6 million in the quarter compared to $58.2 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $10.8 million or 18.6 percent compared to the prior year quarter. The decline in revenues was driven by lower demand for consulting and other services related to large cross-border investigations and litigations and lower realized pricing, which was partially offset by higher demand for M&A-related “second request” work. Adjusted Segment EBITDA was $6.0 million, or 12.8 percent of segment revenues, compared to $13.3 million, or 22.8 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower utilization in consulting and lower realized pricing in consulting, hosting and managed review services.

Strategic Communications
Revenues in the Strategic Communications segment increased $2.4 million or 5.3 percent to $48.8 million in the quarter compared to $46.3 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $4.8 million or 10.4 percent compared to the prior year quarter with a $1.8 million increase in pass-through income. The remaining $3.0 million increase in revenues was driven by higher demand for public affairs, crisis and M&A-related consulting in North America and in the Europe, Middle East and Africa region. Adjusted Segment EBITDA was $7.6 million, or 15.6 percent of segment revenues, compared to $7.4 million, or 16.0 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to a higher mix of low margin pass-through income, which was partially offset by improved staff leverage.

Interim Chief Financial Officer Elected
On February 24, 2016, the Company’s Board of Directors elected Catherine M. Freeman, Senior Vice President, Controller and Chief Accounting Officer, as Interim Chief Financial Officer, effective March 1, 2016. As previously disclosed, the Company has initiated an external search for a permanent successor.

First Quarter of 2016 Special Charge
As a result of an ongoing strategic review of the Technology segment, the Company has taken actions to realign its workforce to address current business demands and position itself for future growth. These actions include the termination of approximately 50 employees, representing approximately 10 percent of the segment’s workforce. The Company estimates the impact of these actions will result in a pre-tax income charge between $4.5 million to $5.5 million, which will be recorded as a special charge in the first quarter of 2016.

2016 Guidance
The Company estimates that revenues for 2016 will be between $1.80 billion and $1.85 billion and Adjusted EPS will be between $1.90 and $2.15.

Fourth Quarter and Full Year 2015 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2015 financial results at 9:00 a.m. Eastern Time on February 25, 2016. 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 at 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 4,600 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The Company generated $1.78 billion in revenues during fiscal year 2015. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measures
Note: We define Segment Operating Income (Loss) as a segment’s share of consolidated operating income (Loss). We define Total Segment Operating Income (Loss) as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted EBITDA as consolidated net income (loss) before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income (loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Total Adjusted Segment EBITDA as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted Segment EBITDA margin as Adjusted Segment EBITDA as a percentage of a segment’s share of revenue. We use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. In addition, EBITDA and Adjusted EBITDA are common alternative measures of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results to the operating results of other companies.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”) as net income (loss) and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that this measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Consolidated Statements of Comprehensive Income. Reconciliations of GAAP to non-GAAP financial measures are included in the financial tables accompanying this press release.

Safe Harbor Statement
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes,” "forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and estimates will be achieved, and the Company's actual results may differ materially from our expectations, beliefs and estimates. Further, preliminary results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flow in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where services are performed, adverse financial, real estate or other market and general economic conditions, which could impact each of our segments differently, 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 filed with the SEC and in the Company's other filings with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations". 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 COMPREHENSIVE INCOME   
FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014  
(in thousands, except per share data)  
   
         
  Year Ended  
  December 31,  
    2015       2014    
         
Revenues $   1,779,149     $   1,756,212    
         
Operating expenses        
Direct cost of revenues     1,171,444         1,144,757    
Selling, general and administrative expenses     432,668         433,845    
Special charges     -          16,339    
Acquisition-related contingent consideration     (1,200 )       (1,676 )  
Amortization of other intangible assets     11,726         15,521    
      1,614,638         1,608,786    
         
Operating income     164,511         147,426    
         
Other income (expense)        
Interest income and other     3,232         4,670    
Interest expense     (42,768 )       (50,685 )  
Loss on early extinguishment of debt     (19,589 )       -     
      (59,125 )       (46,015 )  
         
Income before income tax provision     105,386         101,411    
         
Income tax provision     39,333         42,604    
         
Net income $   66,053     $   58,807    
         
Earnings per common share - basic $   1.62     $   1.48    
Weighted average common shares outstanding - basic     40,846         39,726    
         
Earnings per common share - diluted $   1.58     $   1.44    
Weighted average common shares outstanding - diluted     41,729         40,729    
         
Other comprehensive loss, net of tax:        
Foreign currency translation adjustments, net of tax $0 $   (28,727 )   $   (29,179 )  
Other comprehensive loss, net of tax     (28,727 )       (29,179 )  
Comprehensive income $   37,326     $   29,628    
         


 

FTI CONSULTING, INC.  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  
FOR THE THREE MONTHS ENDED DECEMBER 31, 2015 AND 2014  
(in thousands, except per share data)  
   
         
  Three Months Ended  
  December 31,  
    2015       2014    
         
Revenues $   442,204     $   425,158    
         
Operating expenses        
Direct cost of revenues     299,336         281,689    
Selling, general and administrative expenses     116,351         115,965    
Special charges     -          1,628    
Acquisition-related contingent consideration     (55 )       (85 )  
Amortization of other intangible assets     2,807         4,055    
      418,439         403,252    
         
Operating income     23,765         21,906    
         
Other income (expense)        
Interest income and other     392         1,205    
Interest expense     (6,231 )       (12,488 )  
      (5,839 )       (11,283 )  
         
Income  before income tax provision     17,926         10,623    
         
Income tax provision     7,577         9,702    
         
Net income  $   10,349     $   921    
         
Earnings per common share - basic $   0.25     $   0.02    
Weighted average common shares outstanding - basic     41,078         39,991    
         
Earnings per common share - diluted $   0.25     $   0.02    
Weighted average common shares outstanding - diluted     41,879         41,090    
         
         
Other comprehensive loss, net of tax:        
Foreign currency translation adjustments, net of tax $0 $   (4,315 )   $   (19,059 )  
Other comprehensive loss, net of tax     (4,315 )       (19,059 )  
Comprehensive income (loss) $   6,034     $   (18,138 )  
         


 

FTI CONSULTING, INC.  
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES  
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2015 AND 2014  
(in thousands, except per share data)  
   
          Three Months Ended December 31,   Year Ended December 31,  
            2015       2014       2015       2014    
                         
Net income          $   10,349     $   921     $   66,053     $   58,807    
Add back:                        
Special charges, net of tax (1)       -          960         -          9,637    
Remeasurement of acquisition-related contingent consideration, net of tax (2)       (115 )       (204 )       (1,120 )       (1,718 )  
Loss on early extinguishment of debt, net of tax (3)       -          -          11,881         -     
Adjusted Net Income       $   10,234     $   1,677     $   76,814     $   66,726    
                         
Earnings per common share – diluted   $   0.25     $   0.02     $   1.58     $   1.44    
Add back:                        
Special charges, net of tax  (1)       -          0.02         -          0.24    
Remeasurement of acquisition-related contingent consideration, net of tax  (2)       (0.01 )       -          (0.02 )       (0.04 )  
Loss on early extinguishment of debt, net of tax (3)       -          -          0.28         -     
Adjusted earnings per common share – diluted    $   0.24     $   0.04     $   1.84     $   1.64    
                         
Weighted average number of common shares outstanding – diluted       41,879         41,090         41,729         40,729    
                         
                         
(1) The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rates for the adjustments related to special charges for both the three months and year ended December 31, 2014 was 41.0%. The tax expense related to the adjustments for special charges for the three months and year ended December 31, 2014 was $0.7 million or $0.02 impact on adjusted earnings per diluted share and $6.7 million or $0.16 impact on diluted earnings per share, respectively. There were no special charges for 2015.   
(2) The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rate for the adjustments related to the remeasurement of acquistion-related contingent consideration for the three months and year ended December 31, 2015 was 40%.  The effective tax rates for the adjustments related to the remeasurement of acquistion-related contingent consideration for the three months and year ended December 31, 2014 were 40.0% and 36.9%, respectively. The tax expense related to the adjustment for the remeasurement of acquistion-related contingent consideration for both the three months and year ended December 31, 2015 were $0.1 million  and $0.01 impact on adjusted earnings per diluted share, and $0.7 million or a $0.02 impact on diluted earnings per share, respectively. The tax expense related to the adjustments for the remeasurement of acquistion-related contingent consideration for the three months and year ended December 31, 2014 were $0.1 million with no impact on adjusted earnings per diluted share and $1.0 million or $0.02 impact on diluted earnings per share, respectively.   
(3)  The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rate for the loss on early extinguishment of debt for the year ended December 31,  2015 was 39.3%. The tax benefit related to the loss on early extinguishment of debt for the year ended December 31, 2015 was $7.7 million, or a $0.18 impact on diluted earnings per share. During the three months ended December 31, 2015 and the year ended December 31, 2014, there was no loss on early extinguishment of debt.   
   

 

FTI CONSULTING, INC.  
OPERATING RESULTS BY BUSINESS SEGMENT  
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2015 AND 2014  
                      Average    Revenue-  
    Segment    Adjusted   Adjusted EBITDA        Billable    Generating  
    Revenues   EBITDA    Margin   Utilization    Rate    Headcount  
      (in thousands)                (at period end)  
Three Months Ended December 31, 2015                          
Corporate Finance & Restructuring   $   111,586     $   18,927       17.0 %     62 %   $   386       838  
Forensic and Litigation Consulting       116,715         8,811       7.5 %     60 %   $   330       1,131  
Economic Consulting       118,589         18,828       15.9 %     70 %   $   529       599  
Technology  (1)       46,551         5,958       12.8 %   N/M   N/M     349  
Strategic Communications  (1)       48,763         7,627       15.6 %   N/M   N/M     599  
    $   442,204         60,151       13.6 %             3,516  
Corporate           (24,948 )                  
Adjusted EBITDA        $   35,203       8.0 %              
                           
Year Ended December 31, 2015                          
Corporate Finance & Restructuring   $   440,398     $   90,101       20.5 %     69 %   $   383       838  
Forensic and Litigation Consulting       482,269         64,267       13.3 %     64 %   $   319       1,131  
Economic Consulting       447,909         62,330       13.9 %     72 %   $   512       599  
Technology  (1)       218,599         39,010       17.8 %   N/M   N/M     349  
Strategic Communications  (1)       189,974         27,727       14.6 %   N/M   N/M     599  
    $   1,779,149         283,435       15.9 %             3,516  
Corporate           (77,673 )                  
Adjusted EBITDA        $   205,762       11.6 %              
                           
Three Months Ended December 31, 2014                          
Corporate Finance & Restructuring   $   93,072     $   9,874       10.6 %     61 %   $   368       706  
Forensic and Litigation Consulting       121,138         19,443       16.1 %     64 %   $   313       1,154  
Economic Consulting       106,468         9,783       9.2 %     69 %   $   503       574  
Technology  (1)       58,168         13,258       22.8 %   N/M   N/M     344  
Strategic Communications  (1)       46,312         7,420       16.0 %   N/M   N/M     566  
    $   425,158         59,778       14.1 %             3,344  
Corporate           (23,720 )                  
Adjusted EBITDA        $   36,058       8.5 %              
                           
Year Ended December 31, 2014                          
Corporate Finance & Restructuring    $   391,115     $   55,492       14.2 %     67 %   $   374       706  
Forensic and Litigation Consulting       483,380         90,468       18.7 %     69 %   $   321       1,154  
Economic Consulting       451,040         59,282       13.1 %     75 %   $   512       574  
Technology  (1)       241,310         63,545       26.3 %   N/M   N/M     344  
Strategic Communications  (1)       189,367         22,588       11.9 %   N/M   N/M     566  
    $   1,756,212         291,375       16.6 %             3,344  
Corporate            (80,823 )                  
Adjusted EBITDA        $   210,552       12.0 %              
                           
   
(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours.  Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.   

 

 

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA  
(in thousands)  
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2015 AND 2014  
                                       
Three Months Ended December 31, 2015       Corporate Finance & Restructuring   Forensic and Litigation Consulting    Economic Consulting   Technology    Strategic Communications   Corp HQ   Total    
                                       
Net income                               $   10,349      
  Interest income and other                                   (392 )    
  Interest expense                                   6,231      
  Income tax provision                                   7,577      
Operating income        $   17,425     $   7,291     $   17,836     $   1,339     $   6,165     $   (26,291 )   $   23,765      
  Depreciation and amortization           694         998         876         4,421         491         1,343         8,823      
  Amortization of other intangible assets           808         522         308         198         971         -          2,807      
  Special charges           -          -          -          -          -          -          -       
  Remeasurement of acquisition-related contingent consideration           -          -          (192 )       -          -          -          (192 )    
Adjusted EBITDA       $   18,927     $   8,811     $   18,828     $   5,958     $   7,627     $   (24,948 )   $   35,203      
                                       
                                       
Year Ended December 31, 2015                                    
                                       
Net income                               $   66,053      
  Interest income and other                                   (3,232 )    
  Interest expense                                   42,768      
  Loss on early extinguishment of debt                                   19,589      
  Income tax provision                                   39,333      
Operating income        $   85,207     $   58,185     $   57,912     $   22,832     $   21,723     $   (81,348 )       164,511      
  Depreciation and amortization           2,835         3,860         3,562         15,390         2,070         3,675         31,392      
  Amortization of other intangible assets           3,550         2,222         1,232         788         3,934         -          11,726      
  Special charges           -         -         -         -         -         -         -       
  Remeasurement of acquisition-related contingent consideration           (1,491 )       -         (376 )       -         -         -         (1,867 )    
Adjusted EBITDA           90,101         64,267         62,330         39,010         27,727         (77,673 )       205,762      
                                       
                                       
Three Months Ended December 31, 2014       Corporate Finance & Restructuring   Forensic and Litigation Consulting    Economic Consulting   Technology    Strategic Communications   Corp HQ   Total    
                                       
Net income                               $   921      
  Interest income and other                                   (1,205 )    
  Interest expense                                   12,488      
  Income tax provision                                   9,702      
Operating income        $   7,832     $   16,663     $   8,767     $   9,194     $   5,693     $   (26,243 )   $   21,906      
  Depreciation and amortization           1,054         1,244         1,072         3,866         678         895         8,809      
  Amortization of other intangible assets           988         1,536         284         198         1,049         -          4,055      
  Special charges           -          -          -          -          -          1,628         1,628      
  Remeasurement of acquisition-related contingent consideration           -          -          (340 )       -          -          -          (340 )    
Adjusted EBITDA       $   9,874     $   19,443     $   9,783     $   13,258     $   7,420     $   (23,720 )   $   36,058      
                                       
                                       
Year Ended December 31, 2014                                    
                                       
Net income                               $   58,807      
  Interest income and other                                   (4,670 )    
  Interest expense                                   50,685      
  Income tax provision                                   42,604      
Operating income        $   46,913     $   83,180     $   55,282     $   46,906     $   15,603     $   (100,458 )       147,426      
  Depreciation and amortization           3,568         4,301         4,068         15,768         2,562         3,722         33,989      
  Amortization of other intangible assets           5,589         3,613         1,047         852         4,420         -          15,521      
  Special charges           84         308         12         19         3         15,913         16,339      
  Remeasurement of acquisition-related contingent consideration           (662 )       (934 )       (1,127 )       -         -         -         (2,723 )    
Adjusted EBITDA           55,492         90,468         59,282         63,545         22,588         (80,823 )       210,552      
                                       
                                       


 

FTI CONSULTING, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014  
(in thousands)  
   
         
  Year Ended   
  December 31,  
    2015       2014    
Operating activities        
Net income  $   66,053     $   58,807    
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     31,392         35,126    
Amortization and impairment of other intangible assets     11,726         15,521    
Acquisition-related contingent consideration     (1,200 )       (1,676 )  
Provision for doubtful accounts     15,564         18,252    
Non-cash share-based compensation     17,951         22,848    
Non-cash interest expense     2,521         2,691    
Loss on early extinguishment of debt     19,589         -     
Other     (760 )       (522 )  
Changes in operating assets and liabilities, net of effects from acquisitions:        
Accounts receivable, billed and unbilled     (35,648 )       (43,072 )  
Notes receivable     3,106         (18,253 )  
Prepaid expenses and other assets     (3,557 )       10,733    
Accounts payable, accrued expenses and other     (4,718 )       980    
Income taxes     18,491         15,283    
Accrued compensation     4,780         11,106    
Billings in excess of services provided     (5,370 )       7,577    
Net cash provided by operating activities     139,920         135,401    
         
Investing activities        
Payments for acquisition of businesses, net of cash received     (575 )       (23,467 )  
Purchases of property and equipment     (31,399 )       (39,256 )  
Other     237         5,128    
Net cash used in investing activities     (31,737 )       (57,595 )  
         
Financing activities        
Borrowings under revolving line of credit, net     200,000         -     
Payments of long-term debt     (425,671 )       (6,014 )  
Payments of debt financing fees     (3,843 )       -     
Deposits     3,227         13,071    
Purchase and retirement of common stock     (26,532 )       (4,367 )  
Net issuance of common stock under equity compensation plans     16,666         4,772    
Other     191         (1,132 )  
Net cash (used in) provided by financing activities     (235,962 )       6,330    
         
Effect of exchange rate changes on cash and cash equivalents     (6,141 )       (6,289 )  
         
Net increase in cash and cash equivalents     (133,920 )       77,847    
Cash and cash equivalents, beginning of period     283,680         205,833    
Cash and cash equivalents, end of period $   149,760     $   283,680    
         


FTI CONSULTING, INC.  
CONSOLIDATED BALANCE SHEETS  
AT DECEMBER 31, 2015 AND DECEMBER 31, 2014  
(in thousands, except per share amounts)  
         
  December 31,   December 31,  
    2015       2014    
Assets        
Current assets        
Cash and cash equivalents $   149,760     $   283,680    
Accounts receivable:        
Billed receivables     405,000         381,464    
Unbilled receivables     280,538         248,462    
Allowance for doubtful accounts and unbilled services     (185,754 )       (144,825 )  
Accounts receivable, net     499,784         485,101    
Current portion of notes receivable     36,115         27,208    
Prepaid expenses and other current assets     55,966         60,852    
Total current assets     741,625         856,841    
Property and equipment, net of accumulated depreciation     74,760         82,163    
Goodwill     1,198,298         1,211,689    
Other intangible assets, net of amortization     63,935         77,034    
Notes receivable, net of current portion     106,882         122,149    
Other assets     43,518         41,723    
Total assets $   2,229,018     $   2,391,599    
         
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable, accrued expenses and other $   89,845     $   99,494    
Accrued compensation     227,783         220,959    
Current portion of long-term debt     -          11,000    
Billings in excess of services provided     29,449         35,639    
Total current liabilities     347,077         367,092    
Long-term debt     494,772         688,404    
Deferred income taxes     139,787         134,600    
Other liabilities     99,779         98,757    
Total liabilities     1,081,415         1,288,853    
         
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 ― 41,235 (2015) and 41,181 (2014)     412         412    
Additional paid-in capital     400,705         393,174    
Retained earnings     855,481         789,428    
Accumulated other comprehensive loss     (108,995 )       (80,268 )  
Total stockholders' equity     1,147,603         1,102,746    
Total liabilities and stockholders' equity $   2,229,018     $   2,391,599    
         

 

FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100

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

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