FTI Consulting Reports Second Quarter 2016 Financial Results

  • Second Quarter Revenues of $460.1 Million; Revenue Growth of 2.5% Over Prior Year Quarter
  • Second Quarter Fully Diluted EPS of $0.64; Adjusted EPS of $0.66


WASHINGTON, July 28, 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 ended June 30, 2016.

For the quarter, revenues increased 2.5 percent to $460.1 million compared to $449.1 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues increased 3.7 percent compared to the prior year quarter. Net income increased 22.3 percent to $26.5 million compared to $21.7 million in the prior year quarter. Fully diluted earnings per share (“EPS”) were $0.64 compared to $0.52 in the prior year quarter. Second quarter 2016 EPS included a special charge of $1.7 million related to headcount reductions in the health solutions practice within the Forensic and Litigation Consulting segment, which reduced EPS by $0.02, and a $3.0 million FX revaluation gain, which benefitted EPS by $0.05. EPS in the prior year quarter included a reduction of contingent consideration liabilities, which increased EPS by $0.02. Adjusted EPS and Adjusted EBITDA, which exclude the contingent consideration gain and special charges, were $0.66 and $56.6 million, respectively, compared to $0.50 and $55.8 million, respectively, in the prior year quarter. Adjusted EBITDA was 12.3 percent of revenues compared to 12.4 percent of revenues in the prior year quarter.

Adjusted EPS and Adjusted 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, “I am pleased to announce that we had another strong quarter. Together with our exceptional first quarter, these two quarters constitute the best first half ever in the history of the Company from a revenue, EPS and Adjusted EPS basis.”

Mr. Gunby added, “Our goal by the end of 2016 is to have each of our businesses in the position where we are confident that they are real engines for growth, on multi-year basis. I believe we are on track to achieving this goal, which gives us a lot of optimism about where the Company can continue to go over the next years.”

Cash Position
Net cash generated by operating activities for the quarter was $73.7 million compared to net cash generated by operating activities of $20.6 million in the prior year quarter. Cash and cash equivalents were $182.7 million at June 30, 2016 compared to $240.0 million at June 30, 2015.

Second Quarter Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $23.0 million, or 21.1 percent to $132.1 million in the quarter, compared to $109.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $24.5 million, or 22.5 percent compared to the prior year quarter. The increase in revenues was driven primarily by higher demand for distressed services in North America and higher demand across all service offerings in the Europe, Middle East and Africa (“EMEA”) region. Adjusted Segment EBITDA was $32.0 million, or 24.2 percent of segment revenues, compared to $22.0 million, or 20.2 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was driven by higher realized rates and improved utilization in EMEA, which was partially offset by lower utilization in non-distressed services in North America.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $7.9 million, or 6.3 percent to $118.2 million in the quarter, compared to $126.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $6.7 million, or 5.3 percent compared to the prior year quarter. The decrease in revenues was driven by lower demand and success fees in the segment’s health solutions practice, which was partially offset by increased demand in the global risk and investigations practice (“GRIP”). Adjusted Segment EBITDA was $15.2 million, or 12.9 percent of segment revenues, compared to $20.0 million, or 15.8 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower utilization and success fees in the segment’s health solutions practice, which was partially offset by higher average realization in GRIP and lower selling, general and administrative (“SG&A”) expenses.

Economic Consulting
Revenues in the Economic Consulting segment increased $9.3 million, or 8.6 percent to $118.0 million in the quarter, compared to $108.7 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $10.4 million, or 9.6 percent compared to the prior year quarter. The increase in revenues was driven by higher demand for the segment’s financial economics services in North America and non-merger and acquisition (“M&A”)-related antitrust and intellectual property services in North America and EMEA. Adjusted Segment EBITDA was $15.4 million, or 13.0 percent of segment revenues, compared to $15.3 million, or 14.1 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to higher bad debt expense and overhead support costs.

Technology
Revenues in the Technology segment decreased $19.9 million, or 32.3 percent to $41.9 million in the quarter, compared to $61.8 million in the prior year quarter. The decrease in revenues was driven by declines in M&A-related “second request” activity and reduced demand for cross-border investigations. Adjusted Segment EBITDA was $5.0 million, or 12.0 percent of segment revenues, compared to $12.2 million, or 19.7 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower demand for managed review services, lower realized pricing for consulting services based on the mix of clients and higher SG&A, including increased research and development investment, as a percentage of revenues.

Strategic Communications
Revenues in the Strategic Communications segment increased $6.6 million, or 15.1 percent to $49.9 million in the quarter, compared to $43.4 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $7.6 million, or 17.6 percent compared to the prior year quarter. The increase in revenue was primarily driven by higher project-based revenues from public affairs and financial communications engagements in North America and EMEA. Adjusted Segment EBITDA was $8.4 million, or 16.9 percent of segment revenues, compared to $5.6 million, or 13.0 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to the mix of higher margin large project engagements, improved utilization across North America and lower SG&A expenses as a percent of revenues.

Updated 2016 Guidance
The Company now estimates that revenues for 2016 will be between $1.80 billion and $1.87 billion. The Company reaffirmed its 2016 guidance for Adjusted EPS of between $2.15 and $2.45.

Second Quarter 2016 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2016 financial results at 9:00 a.m. Eastern Time on July 28, 2016. The call can be accessed live and will be available for replay over the Internet for 90 days on 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 Certain GAAP and Non-GAAP Measures
We have included the definitions of Segment Operating Income (Loss), Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin, GAAP measures, below in order to more fully define the components of the certain non-GAAP measures presented in this earnings release. We define Segment Operating Income (Loss) as a segment’s share of Consolidated Operating Income (Loss). We define Total Segment Operating Income (Loss) as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of Consolidated Operating Income (Loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Adjusted Segment EBITDA Margin as Adjusted Segment EBITDA as a percentage of a segment’s revenues. 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 define, non-GAAP measures, Total Adjusted Segment EBITDA as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses and 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 believe that our non-GAAP financial measures, when considered together with our GAAP financial results and GAAP measures, provide management and investors with a more complete understanding of our operating results, including underlying trends, 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. They are 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.

The financial tables accompanying this press release do not include a reconciliation of the Company’s 2016 Adjusted EPS guidance to an estimate of GAAP EPS. It is difficult to predict and estimate future remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and/or losses on early extinguishment of debt, as these items are dependent on future events that are uncertain. Accordingly, a reconciliation of our non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

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  
(in thousands, except per share data)  
(unaudited)  
         
  Three Months Ended  
  June 30,  
    2016       2015    
         
Revenues $ 460,147     $ 449,137    
         
Operating expenses        
Direct cost of revenues   303,194       291,469    
Selling, general and administrative expenses   108,245       109,045    
Special charges   1,750       -    
Acquisition-related contingent consideration   206       (1,538 )  
Amortization of other intangible assets   2,590       3,007    
    415,985       401,983    
         
Operating income   44,162       47,154    
         
Other income (expense)        
Interest income and other   4,125       950    
Interest expense   (6,303 )     (12,473 )  
    (2,178 )     (11,523 )  
         
Income  before income tax provision   41,984       35,631    
         
Income tax provision   15,437       13,922    
         
Net income  $ 26,547     $ 21,709    
         
Earnings per common share - basic $ 0.65     $ 0.53    
Weighted average common shares outstanding - basic   40,820       40,792    
         
Earnings per common share - diluted $ 0.64     $ 0.52    
Weighted average common shares outstanding - diluted   41,599       41,696    
         
         
Other comprehensive (loss) income, net of tax:        
Foreign currency translation adjustments, net of tax $0 $ (18,809 )   $ 13,298    
Total other comprehensive (loss) income, net of tax   (18,809 )     13,298    
Comprehensive income $ 7,738     $ 35,007    
         

 

FTI CONSULTING, INC.  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(in thousands, except per share data)  
(unaudited)  
         
  Six Months Ended  
  June 30,  
    2016       2015    
         
Revenues $ 930,432     $ 881,475    
         
Operating expenses        
Direct cost of revenues   608,830       570,499    
Selling, general and administrative expenses   211,854       211,259    
Special charges   6,811       -    
Acquisition-related contingent consideration   1,340       (1,304 )  
Amortization of other intangible assets   5,196       6,019    
    834,031       786,473    
         
Operating income   96,401       95,002    
         
Other income (expense)        
Interest income and other   6,682       813    
Interest expense   (12,532 )     (24,841 )  
    (5,850 )     (24,028 )  
         
Income  before income tax provision   90,551       70,974    
         
Income tax provision   33,823       25,579    
         
Net income  $ 56,728     $ 45,395    
         
Earnings per common share - basic $ 1.40     $ 1.12    
Weighted average common shares outstanding - basic   40,663       40,607    
         
Earnings per common share - diluted $ 1.37     $ 1.09    
Weighted average common shares outstanding - diluted   41,373       41,529    
         
         
Other comprehensive loss, net of tax:        
Foreign currency translation adjustments, net of tax $0 $ (19,167 )   $ (7,184 )  
Total other comprehensive loss, net of tax   (19,167 )     (7,184 )  
Comprehensive income $ 37,561     $ 38,211    
         

 

FTI CONSULTING, INC.    
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES  
(in thousands, except per share data)  
(unaudited)  
                     
    Three Months Ended
June 30,
  Six Months Ended
June 30,
   
      2016       2015       2016       2015      
                 
Net income    $ 26,547     $ 21,709     $ 56,728     $ 45,395      
Add back:                    
Special charges, net of tax (1)     1,059       -       4,328       -      
Remeasurement of acquisition-related contingent consideration, net of tax (2)     -       (1,005 )     600       (1,005 )    
Adjusted Net Income    $ 27,606     $ 20,704     $ 61,656     $ 44,390      
                     
Earnings per common share – diluted   $ 0.64     $ 0.52     $ 1.37     $ 1.09      
Add back:                    
Special charges, net of tax (1)     0.02       -       0.10       -      
Remeasurement of acquisition-related contingent consideration, net of tax (2)     -       (0.02 )     0.02       (0.02 )    
Adjusted earnings per common share– diluted   $ 0.66     $ 0.50     $ 1.49     $ 1.07      
                     
Weighted average number of common shares outstanding – diluted     41,599       41,696       41,373       41,529      
                     
                     
(1) The tax effect takes into account the tax treatment and related tax rates that apply to each adjustment in the applicable tax jurisdiction. As a result, the effective tax rates for the adjustments related to special charges for the three and six months ended June 30, 2016 were 39.5% and 36.5%, respectively. The tax expense related to the adjustments for special charges for the three and six months ended June 30, 2016 was $0.7 million, or $0.02 impact on Adjusted EPS, and $2.5 million, or $0.06 impact on Adjusted EPS, respectively. There were no special charges for the comparable period in 2015.  
             
(2) The tax effect takes into account the tax treatment and related tax rates that apply to each adjustment in the applicable tax jurisdiction. As a result, the effective tax rate for the adjustments related to the remeasurement of acquisition-related contingent consideration for the six months ended June 30, 2016 was 38.8%.  The tax expense related to the adjustment for the remeasurement of acquisition-related contingent consideration for the six months ended June 30, 2016 was $0.4 million or $0.01 impact on Adjusted EPS. The effective tax rate for the adjustments related to the remeasurement of acquisition-related contingent consideration for the three and six months ended June 30, 2015 was 40.0%.  The tax expense related to the remeasurement of acquisition-related contingent consideration for the three and six months ended June 30, 2015 was $0.7 million, or a $0.02 impact on Adjusted EPS. There were no adjustments related to the remeasurement of acquisition-related contingent consideration in the three months ended June 30, 2016.  
             

 

FTI CONSULTING, INC.  
OPERATING RESULTS BY BUSINESS SEGMENT  
(unaudited)  
              Adjusted         Average   Revenue-  
    Segment      Adjusted   EBITDA        Billable    Generating  
    Revenues     EBITDA    Margin   Utilization    Rate    Headcount  
      (in thousands)                (at period end)  
Three Months Ended June 30, 2016                            
Corporate Finance & Restructuring   $ 132,142       $ 32,041       24.2 %     68 %   $ 422     853  
Forensic and Litigation Consulting     118,193         15,190       12.9 %     61 %   $ 333     1,117  
Economic Consulting     118,006         15,381       13.0 %     71 %   $ 526     604  
Technology (1)     41,882         5,035       12.0 %   N/M   N/M   301  
Strategic Communications (1)     49,924         8,440       16.9 %   N/M   N/M   606  
    $ 460,147         76,087       16.5 %           3,481  
Unallocated Corporate           (19,507 )                  
Adjusted EBITDA          $ 56,580       12.3 %              
                             
Six Months Ended June 30, 2016                            
Corporate Finance & Restructuring   $ 259,298       $ 63,644       24.5 %     71 %   $ 402     853  
Forensic and Litigation Consulting     237,197         34,998       14.8 %     62 %   $ 333     1,117  
Economic Consulting     248,737         36,700       14.8 %     75 %   $ 529     604  
Technology (1)     90,163         12,858       14.3 %   N/M   N/M   301  
Strategic Communications (1)     95,037         14,548       15.3 %   N/M   N/M   606  
    $ 930,432         162,748       17.5 %           3,481  
Unallocated Corporate           (37,311 )                  
Adjusted EBITDA          $ 125,437       13.5 %              
                             
Three Months Ended June 30, 2015                            
Corporate Finance & Restructuring   $ 109,113       $ 22,032       20.2 %     70 %   $ 394     775  
Forensic and Litigation Consulting     126,131         19,979       15.8 %     66 %   $ 318     1,169  
Economic Consulting     108,698         15,292       14.1 %     71 %   $ 530     554  
Technology (1)     61,826         12,166       19.7 %   N/M   N/M   364  
Strategic Communications (1)     43,369         5,631       13.0 %   N/M   N/M   551  
    $ 449,137         75,100       16.7 %           3,413  
Unallocated Corporate           (19,311 )                  
Adjusted EBITDA          $ 55,789       12.4 %              
                             
Six Months Ended June 30, 2015                            
Corporate Finance & Restructuring   $ 215,325       $ 44,512       20.7 %     72 %   $ 384     775  
Forensic and Litigation Consulting     249,396         42,050       16.9 %     67 %   $ 318     1,169  
Economic Consulting     214,779         26,848       12.5 %     72 %   $ 515     554  
Technology (1)     116,480         22,239       19.1 %   N/M   N/M   364  
Strategic Communications (1)     85,495         11,383       13.3 %   N/M   N/M   551  
    $ 881,475         147,032       16.7 %           3,413  
Unallocated Corporate           (32,575 )                  
Adjusted EBITDA          $ 114,457       13.0 %              
                             
                             
(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)  
(unaudited)  
                                 
Three Months Ended June 30, 2016 Corporate Finance &
Restructuring
  Forensic and Litigation
Consulting
  Economic Consulting   Technology    Strategic
Communications
  Corp HQ   Total    
                                 
Net income                         $ 26,547      
  Interest income and other                           (4,125 )    
  Interest expense                           6,303      
  Income tax provision                           15,437      
Operating income $ 30,482     $ 11,925     $ 14,291     $ 880     $ 6,990     $ (20,406 )   $ 44,162      
  Depreciation and amortization   755       996       935       3,996       497       899       8,078      
  Amortization of other intangible assets   804       519       155       159       953       -       2,590      
  Special charges   -       1,750       -       -       -       -       1,750      
Adjusted EBITDA  $ 32,041     $ 15,190     $ 15,381     $ 5,035     $ 8,440     $ (19,507 )   $ 56,580      
                                 
Six Months Ended June 30, 2016 Corporate Finance &  
Restructuring
  Forensic and Litigation
Consulting
  Economic Consulting   Technology    Strategic
Communications
  Corp HQ   Total    
                                 
Net income                          $ 56,728      
  Interest income and other                           (6,682 )    
  Interest expense                           12,532      
  Income tax provision                           33,823      
Operating income (loss) $ 60,558     $ 30,138     $ 34,502     $ (300 )   $ 10,655     $ (39,152 )   $ 96,401      
  Depreciation and amortization   1,477       2,075       1,860       7,780       1,016       1,841       16,049      
  Amortization of other intangible assets   1,609       1,035       338       317       1,897       -       5,196      
  Special charges   -       1,750       -       5,061       -       -       6,811      
  Remeasurement of acquisition-related contingent consideration   -       -       -       -       980       -       980      
Adjusted EBITDA  $ 63,644     $ 34,998     $ 36,700     $ 12,858     $ 14,548     $ (37,311 )   $ 125,437      
                                 
                                 
Three Months Ended June 30, 2015 Corporate Finance &  
Restructuring
  Forensic and Litigation
Consulting
  Economic Consulting   Technology    Strategic
Communications
  Corp HQ   Total    
                                 
Net income                          $ 21,709      
  Interest income and other                           (950 )    
  Interest expense                           12,473      
  Income tax provision                           13,922      
Operating income  $ 21,906     $ 18,476     $ 14,282     $ 8,465     $ 4,126     $ (20,101 )   $ 47,154      
  Depreciation and amortization   682       922       886       3,508       515       790       7,303      
  Amortization of other intangible assets   935       581       308       193       990       -       3,007      
  Remeasurement of acquisition-related contingent consideration   (1,491 )     -       (184 )     -       -       -       (1,675 )    
Adjusted EBITDA  $ 22,032     $ 19,979     $ 15,292     $ 12,166     $ 5,631     $ (19,311 )   $ 55,789      
                                 
Six Months Ended June 30, 2015 Corporate Finance & Restructuring   Forensic and Litigation Consulting   Economic Consulting   Technology    Strategic Communications   Corp HQ   Total    
                                 
Net income                          $ 45,395      
  Interest income and other                           (813 )    
  Interest expense                           24,841      
  Income tax provision                           25,579      
Operating income  $ 42,670     $ 38,950     $ 24,578     $ 14,663     $ 8,323     $ (34,182 )   $ 95,002      
  Depreciation and amortization   1,464       1,937       1,838       7,185       1,080       1,607       15,111      
  Amortization of other intangible assets   1,869       1,163       616       391       1,980       -       6,019      
  Remeasurement of acquisition-related contingent consideration   (1,491 )     -       (184 )     -       -       -       (1,675 )    
Adjusted EBITDA  $ 44,512     $ 42,050     $ 26,848     $ 22,239     $ 11,383     $ (32,575 )   $ 114,457      
                                 
                                 

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(in thousands)  
(unaudited)  
         
  Six Months Ended  
  June 30,  
    2016       2015    
Operating activities        
Net income $ 56,728     $ 45,395    
Adjustments to reconcile net income to net cash used in operating activities:        
Depreciation and amortization   16,049       15,111    
Amortization of other intangible assets   5,196       6,019    
Acquisition-related contingent consideration   1,340       (1,304 )  
Provision for doubtful accounts   4,344       6,571    
Non-cash share-based compensation   9,667       10,581    
Non-cash interest expense   992       1,343    
Other   (639 )     (223 )  
Changes in operating assets and liabilities, net of effects from acquisitions:        
Accounts receivable, billed and unbilled   (57,501 )     (70,710 )  
Notes receivable   (4,640 )     (6,626 )  
Prepaid expenses and other assets   (943 )     (5,120 )  
Accounts payable, accrued expenses and other   1,932       (2,435 )  
Income taxes   29,329       16,458    
Accrued compensation   (28,518 )     (40,587 )  
Billings in excess of services provided   7,297       (5,204 )  
Net cash provided by (used in) operating activities   40,633       (30,731 )  
         
Investing activities        
Payments for acquisition of businesses, net of cash received   (56 )     (576 )  
Purchases of property and equipment   (11,983 )     (17,533 )  
Other   96       64    
Net cash used in investing activities   (11,943 )     (18,045 )  
         
Financing activities        
Payments of debt issue costs   -       (3,090 )  
Deposits   2,557       2,423    
Purchase and retirement of common stock   (2,903 )     -    
Net issuance of common stock under equity compensation plans   9,353       8,662    
Other   (154 )     (326 )  
Net cash provided by financing activities   8,853       7,669    
         
Effect of exchange rate changes on cash and cash equivalents   (4,638 )     (2,585 )  
         
Net increase (decrease) in cash and cash equivalents   32,905       (43,692 )  
Cash and cash equivalents, beginning of period   149,760       283,680    
Cash and cash equivalents, end of period $ 182,665     $ 239,988    
         

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands, except per share amounts)
(unaudited)
 
         
  June 30,    December 31,  
    2016       2015    
Assets        
Current assets        
Cash and cash equivalents $ 182,665     $ 149,760    
Accounts receivable:        
Billed receivables   415,750       405,000    
Unbilled receivables   330,730       280,538    
Allowance for doubtful accounts and unbilled services   (199,182 )     (185,754 )  
Accounts receivable, net   547,298       499,784    
Current portion of notes receivable   34,418       36,115    
Prepaid expenses and other current assets   47,361       55,966    
Total current assets   811,742       741,625    
Property and equipment, net of accumulated depreciation   68,764       74,760    
Goodwill   1,189,602       1,198,298    
Other intangible assets, net of amortization   57,568       63,935    
Notes receivable, net of current portion   112,095       106,882    
Other assets   47,693       43,518    
Total assets $ 2,287,464     $ 2,229,018    
         
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable, accrued expenses and other $ 94,782     $ 89,845    
Accrued compensation   193,826       227,783    
Billings in excess of services provided   36,434       29,449    
Total current liabilities   325,042       347,077    
Long-term debt, net   495,150       494,772    
Deferred income taxes   161,433       139,787    
Other liabilities   102,596       99,779    
Total liabilities   1,084,221       1,081,415    
         
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 ― 42,083 (2016) and 41,234 (2015)   420       412    
Additional paid-in capital   418,776       400,705    
Retained earnings   912,209       855,481    
Accumulated other comprehensive loss   (128,162 )     (108,995 )  
Total stockholders' equity   1,203,243       1,147,603    
Total liabilities and stockholders' equity $ 2,287,464     $ 2,229,018    
         

 

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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