FTI Consulting Reports Third Quarter 2014 Results

- Third Quarter Revenues of $451.2 Million

- Third Quarter Adjusted EPS of $0.63; Fully Diluted EPS of $0.55
- Increases Full Year Adjusted EPS Guidance Range to Between $1.85 and $2.00

WASHINGTON, Oct. 30, 2014 /PRNewswire/ -- 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 September 30, 2014.

For the quarter, revenues increased 8.8 percent to $451.2 million compared to $414.6 million in the prior year quarter. Fully diluted earnings per share ("EPS") were $0.55 compared to a fully diluted loss per share of ($1.29) in the prior year quarter. EPS for the current quarter included a special charge of $5.3 million, which includes the net cost of certain contractual arrangements for key executive officers who departed the business in the quarter. The special charge reduced EPS by $0.08. Loss per share in the prior year quarter included a goodwill impairment charge related to the Strategic Communications segment of $83.8 million and a special charge of $10.4 million. Adjusted EPS were $0.63 for the quarter compared to $0.72 in the prior year quarter. Adjusted EBITDA for the quarter was $63.4 million or 14.1 percent of revenues compared to $72.5 million or 17.5 percent of revenues in the prior year quarter.

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 financial tables that accompany this press release.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting said, "Our third quarter performance was driven by very high demand from major clients in our Technology and Forensic and Litigation Consulting segments, supported by continued progress in Economic Consulting and Strategic Communications. These results, combined with a slower ramp up of investment spending, produced an outstanding quarter, which exceeded our expectations."

Mr. Gunby continued, "More important, but much less visible, is our continuing work to deliver the vision for FTI outlined at our investor day in June. The investments we make in 2014 and through the balance of 2015 will continue to build a franchise to deliver sustainable earnings growth in 2016 and beyond."

Third Quarter Segment Results

Corporate Finance/Restructuring
Revenues in the Corporate Finance/Restructuring segment increased 6.4 percent to $100.0 million in the quarter compared to $94.0 million in the prior year quarter. The increase in revenues was driven by higher demand for the segment's North America non-distressed service offerings and growth in the European transaction advisory and tax practices, which were partially offset by declines in global bankruptcy and restructuring engagements. Adjusted Segment EBITDA was $15.5 million or 15.5 percent of segment revenues compared to $19.4 million or 20.6 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower realized price associated with non-distressed work, declines in bankruptcy work and higher performance-based compensation.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased 7.7 percent to $121.7 million in the quarter compared to $113.1 million in the prior year quarter. Revenues increased organically by 4.8 percent due to increased demand in the North America investigations practice and global construction solutions and disputes practices, which was partially offset by lower success fees and lower revenues in the segment's health solutions practice. Adjusted Segment EBITDA was $22.3 million or 18.3 percent of segment revenues compared to $25.4 million or 22.4 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was the result of lower success fees, weaker performance in health solutions and higher performance-based compensation expense.

Economic Consulting 
Revenues in the Economic Consulting segment increased 6.6 percent to $120.5 million in the quarter compared to $113.1 million in the prior year quarter with 1.1 percent of the increase from positive impacts of foreign currency translation. The remaining increase in revenues was due to higher demand for mergers and acquisition ("M&A") related services and higher pricing in the segment's international arbitration practice due to staff and engagement mix. Adjusted Segment EBITDA was $18.4 million or 15.3 percent of segment revenues compared to $23.2 million or 20.5 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due largely to increased compensation expense related to extensions of employment contracts entered into with certain key senior client-service professionals.

Technology
Revenues in the Technology segment increased 21.8 percent to $62.4 million in the quarter compared to $51.2 million in the prior year quarter. The increase in revenues was primarily due to increased demand related to large scale complex global investigations. Adjusted Segment EBITDA was $17.8 million or 28.6 percent of segment revenues compared to $15.4 million or 30.0 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to an increase in the mix of lower margin services and investments in global data centers and operations support, business development, research and development and marketing activities.

Strategic Communications
Revenues in the Strategic Communications segment increased 7.5 percent to $46.6 million in the quarter compared to $43.3 million in the prior year quarter with 2.3 percent of the increase from favorable impacts of foreign currency translation. The remaining growth resulted from increased project work in the North America and Asia Pacific regions. Adjusted Segment EBITDA was $6.6 million or 14.2 percent of segment revenues compared to $4.0 million or 9.3 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to the mix of more profitable project work and reductions in overhead expenses.

Cash Position
Net cash provided by operating activities for the quarter was $97.6 million compared to $84.4 million in the prior year. Cash and cash equivalents were $178.8 million at September 30, 2014.

2014 Guidance
Based on current market conditions and the outlook for the remainder of the year, the Company has increased its prior guidance and now estimates that its revenue for 2014 will be between $1.755 billion and $1.770 billion and Adjusted EPS will be between $1.85 and $2.00.

Third Quarter 2014 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2014 financial results at 9:00 a.m. Eastern Time on October 30, 2014. 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 4,200 employees located in 26 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 $1.65 billion in revenues during fiscal year 2013. More information can be found at www.fticonsulting.com.

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 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 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 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 is a common alternative measure 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 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 (Loss). Reconciliations of GAAP to non-GAAP financial measures are included elsewhere in 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.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100

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

 

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(in thousands, except per share data)

(unaudited)






Three Months Ended


September 30,


2014


2013





Revenues

$               451,178


$              414,643





Operating expenses




Direct cost of revenues

293,244


255,152

Selling, general and administrative expense

102,461


94,513

Special charges

5,347


10,419

Acquisition-related contingent consideration

257


630

Amortization of other intangible assets

3,398


5,776

Goodwill impairment charge

-


83,752


404,707


450,242





Operating income (loss)

46,471


(35,599)





Other income (expense)




Interest income and other

1,014


1,152

Interest expense

(12,634)


(12,814)


(11,620)


(11,662)





Income (loss) before income tax provision

34,851


(47,261)





Income tax provision

12,329


3,360





Net income (loss)

$                 22,522


$              (50,621)





Earnings (loss) per common share - basic

$                     0.57


$                  (1.29)

Earnings (loss) per common share - diluted

$                     0.55


$                  (1.29)





Weighted average common shares outstanding - basic

39,789


39,094

Weighted average common shares outstanding - diluted

40,819


39,094





Other comprehensive income (loss), net of tax:




Foreign currency translation adjustments, net of tax of $0

$               (22,542)


$                17,115

Total other comprehensive income (loss), net of tax

(22,542)


17,115

Comprehensive loss

$                      (20)


$              (33,506)

 

 

 

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(in thousands, except per share data)

(unaudited)






Nine Months Ended


September 30,


2014


2013





Revenues

$            1,331,054


$           1,236,434





Operating expenses




Direct cost of revenues

863,068


773,160

Selling, general and administrative expense

317,880


287,485

Special charges

14,711


10,846

Acquisition-related contingent consideration

(1,591)


(6,091)

Amortization of other intangible assets

11,466


17,293

Goodwill impairment charge

-


83,752


1,205,534


1,166,445





Operating income

125,520


69,989





Other income (expense)




Interest income and other

3,465


1,702

Interest expense

(38,197)


(38,600)


(34,732)


(36,898)





Income before income tax provision

90,788


33,091





Income tax provision

32,902


36,546





Net income (loss)

$                 57,886


$                (3,455)





Earnings (loss) per common share - basic

$                     1.46


$                  (0.09)

Earnings (loss) per common share - diluted

$                     1.43


$                  (0.09)





Weighted average common shares outstanding - basic

39,637


39,212

Weighted average common shares outstanding - diluted

40,608


39,212





Other comprehensive income (loss), net of tax:




Foreign currency translation adjustments, net of tax of $0

$               (10,120)


$              (10,108)

Total other comprehensive income (loss), net of tax

(10,120)


(10,108)

Comprehensive income (loss)

$                 47,766


$              (13,563)

 

 

 

FTI CONSULTING, INC.

OPERATING RESULTS BY BUSINESS SEGMENT












  Average  


Revenue-





Adjusted






 Billable 


Generating



Revenues


EBITDA 


Margin


Utilization


Rate


Headcount



  (in thousands)  








(at period end)

Three Months Ended September 30, 2014













Corporate Finance/Restructuring


$                 100,041


$                        15,534


15.5%


70%


$          396


722

Forensic and Litigation Consulting 


121,732


22,260


18.3%


68%


$          323


1,135

Economic Consulting


120,494


18,426


15.3%


77%


$          535


551

Technology  (1)


62,359


17,835


28.6%


N/M


N/M


335

Strategic Communications  (1)


46,552


6,605


14.2%


N/M


N/M


549



$                 451,178


80,660


17.9%






3,292

   Corporate 




(17,265)









Adjusted EBITDA




$                        63,395


14.1%




















Nine Months Ended September 30, 2014













Corporate Finance/Restructuring


$                 298,043


$                        45,618


15.3%


71%


$          388


722

Forensic and Litigation Consulting


362,242


71,025


19.6%


71%


$          323


1,135

Economic Consulting


344,572


49,499


14.4%


77%


$          517


551

Technology  (1)


183,142


50,287


27.5%


N/M


N/M


335

Strategic Communications  (1)


143,055


15,168


10.6%


N/M


N/M


549



$              1,331,054


231,597


17.4%






3,292

   Corporate 




(57,103)









Adjusted EBITDA




$                      174,494


13.1%




















Three Months Ended September 30, 2013













Corporate Finance/Restructuring


$                   93,981


$                        19,402


20.6%


64%


$          396


732

Forensic and Litigation Consulting 


113,068


25,362


22.4%


67%


$          324


999

Economic Consulting


113,069


23,225


20.5%


79%


$          512


528

Technology  (1)


51,201


15,381


30.0%


N/M


N/M


297

Strategic Communications  (1)


43,324


4,036


9.3%


N/M


N/M


617



$                 414,643


87,406


21.1%






3,173

   Corporate 




(14,862)









Adjusted EBITDA




$                        72,544


17.5%




















Nine Months Ended September 30. 2013













Corporate Finance/Restructuring 


$                 289,775


$                        56,335


19.4%


66%


$          407


732

Forensic and Litigation Consulting


318,912


56,925


17.8%


68%


$          315


999

Economic Consulting


339,277


70,222


20.7%


84%


$          509


528

Technology  (1)


149,101


45,985


30.8%


N/M


N/M


297

Strategic Communications  (1)


139,369


12,809


9.2%


N/M


N/M


617



$              1,236,434


242,276


19.6%






3,173

   Corporate 




(44,394)









Adjusted EBITDA




$                      197,882


16.0%




















(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.

 


 

 

FTI CONSULTING, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER, 2014 AND 2013

(in thousands, except per share data)


















Three Months Ended September 30,


Nine Months Ended September 30,






2014


2013


2014


2013









Net income (loss)




$                      22,522


$                     (50,621)


$                      57,886


$                       (3,455)

Add back:












Special charges, net of tax effect (1)


3,154


6,847


8,676


7,100

Goodwill impairment charges  (2)


-


83,752


-


83,752

Remeasurement of acquisition-related contingent consideration, net of tax effect (3)

-


-


(1,514)


(8,216)

Less:












    Interim period impact of including goodwill impairment charges in the annual
    effective tax rate, net of tax


-


(10,805)


-


(10,805)

Adjusted Net Income 




$                      25,676


$                      29,173


$                      65,048


$                      68,376













Earnings (loss) per common share – diluted


$                          0.55


$                         (1.29)


$                          1.43


$                         (0.09)

Add back:












Special charges, net of tax effect (1)


0.08


0.18


0.21


0.18

Goodwill impairment charges  (2)


-


2.14


-


2.14

Remeasurement of acquisition-related contingent consideration, net of tax effect (3)

-


-


(0.04)


(0.21)

Less:












    Interim period impact of including goodwill impairment charges in the annual
    effective tax rate, net of tax


-


(0.27)


-


(0.28)

   Impact of denominator for diluted EPS(4)


-


(0.04)


-


(0.05)

Adjusted EPS – diluted




$                          0.63


$                          0.72


$                          1.60


$                          1.69













Weighted average number of common shares outstanding – diluted

40,819


40,244


40,608


40,385

(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 rate for the adjustments related to special charges for the three and nine months ended September 30, 2014 was 41.0%. The tax expense related to the adjustment for special charges for the three and nine months ended September 30, 2014 was $2.2 million, or a $0.05 impact on diluted earnings per share, and $6.0 million, or a $0.15 impact on diluted earnings per share, respectively. The effective tax rates for the adjustments related to special charges for the three and nine months ended September 30, 2013 were 34.3% and 34.5%, respectively. The tax expense related to the adjustment for special charges for the three and nine months ended September 30, 2013 was $3.6 million, or a $0.09 impact on diluted earnings per share, and $3.7 million, or $0.10 impact on diluted earnings per share, respectively.


(2) The goodwill impairment charge was non-deductible for income tax purposes and resulted in no tax benefit for the year ended December 31, 2013.


(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 rates for the adjustments related to the remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2014 was 36.5%. The tax expense related to the remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2014 was $0.9 million, or a $0.02 impact on diluted earnings per share. The adjustment related to remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2013 was not taxable. There were no adjustments related to remeasurement of acquisition-related contingent consideration for the three months ended September 30, 2014 and 2013.


(4) For the three and nine months ended September 30, 2013, the Company reported a net loss. For those periods, the number of basic weighted average common shares outstanding equals the number of diluted weighted average common shares outstanding for purposes of calculating GAAP earnings per share because potentially dilutive securities would be antidilutive. For non-GAAP purposes, the total per share and share amounts presented herein reflect the impact of the inclusion of share-based awards that are considered dilutive based on the impact of the add backs included in Adjusted Net Income above.

 

 

 

RECONCILIATION OF NET INCOME AND OPERATING INCOME (LOSS) TO ADJUSTED EBITDA

(in thousands)





















Three Months Ended September 30, 2014


Corporate Finance / Restructuring


Forensic and Litigation Consulting


Economic Consulting


Technology 


Strategic Communications


Corp HQ


Total





















Net income
















$             22,522



Interest income and other














(1,014)



Interest expense















12,634



Income tax provision















12,329


Operating income




$                   13,406


$                   20,276


$                   17,245


$                   13,741


$                     4,875


$                 (23,072)


$             46,471



Depreciation and amortization


869


1,023


934


3,857


610


886


8,179



Amortization of other intangible assets

1,175


653


235


218


1,117


-


3,398



Special charges



84


308


12


19


3


4,921


5,347


Adjusted EBITDA 




$                   15,534


$                   22,260


$                   18,426


$                   17,835


$                     6,605


$                 (17,265)


$             63,395



























































Nine Months Ended September 30, 2014



































Net income
















$             57,886



Interest income and other














(3,465)



Interest expense















38,197



Income tax provision















32,902


Operating income




$                   39,081


$                   66,517


$                   46,515


$                   37,712


$                     9,910


$                 (74,215)


$           125,520



Depreciation and amortization


2,514


3,057


2,996


11,902


1,884


2,827


25,180



Amortization of other intangible assets




4,601


2,077


763


654


3,371


-


11,466



Special charges



84


308


12


19


3


14,285


14,711



Remeasurement of acquisition-related contingent consideration

(662)


(934)


(787)


-


-


-


(2,383)


Adjusted EBITDA 




$                   45,618


$                   71,025


$                   49,499


$                   50,287


$                   15,168


$                 (57,103)


$           174,494








































Three Months Ended September 30, 2013


Corporate Finance / Restructuring


Forensic and Litigation Consulting


Economic Consulting


Technology 


Strategic Communications


Corp HQ


Total





















Net income (loss)
















$           (50,621)



Interest income and other














(1,152)



Interest expense















12,814



Income tax provision















3,360


Operating income (loss) 



$                   10,590


$                   21,915


$                   21,708


$                     9,755


$                 (81,490)


$                 (18,077)


$           (35,599)



Depreciation and amortization


919


997


979


3,642


575


1,084


8,196



Amortization of other intangible assets

1,562


512


523


1,982


1,197


-


5,776



Special charges



6,331


1,938


15


2


2


2,131


10,419



Goodwill




-


-


-


-


83,752


-


83,752


Adjusted EBITDA 




$                   19,402


$                   25,362


$                   23,225


$                   15,381


$                     4,036


$                 (14,862)


$             72,544



























































Nine Months Ended September 30, 2013



































Net income (loss)
















$             (3,455)



Interest income and other














(1,702)



Interest expense















38,600



Income tax provision















36,546


Operating income (loss) 



$                   48,725


$                   52,194


$                   66,233


$                   29,129


$                 (76,369)


$                 (49,923)


$             69,989



Depreciation and amortization


2,541


2,958


2,647


10,888


1,898


3,286


24,218



Amortization of other intangible assets




4,945


1,603


1,331


5,952


3,462


-


17,293



Special charges



6,399


2,111


11


16


66


2,243


10,846



Goodwill




-


-


-


-


83,752


-


83,752



Remeasurement of acquisition-related contingent consideration

(6,275)


(1,941)


-


-


-


-


(8,216)


Adjusted EBITDA 




$                   56,335


$                   56,925


$                   70,222


$                   45,985


$                   12,809


$                 (44,394)


$           197,882





















 

 

 

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(in thousands)

(unaudited)






Nine Months Ended


September 30,


2014


2013

Operating activities




Net income (loss)

$           57,886


$            (3,455)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Depreciation and amortization

26,318


24,218

Amortization of other intangible assets

11,466


17,293

Goodwill impairment charge

-


83,752

Acquisition-related contingent consideration

(1,591)


(6,091)

Provision for doubtful accounts 

11,896


10,404

Non-cash share-based compensation 

18,930


22,544

Non-cash interest expense

2,020


2,024

Other

(358)


(286)

Changes in operating assets and liabilities, net of effects from acquisitions:




Accounts receivable, billed and unbilled

(107,847)


(72,266)

Notes receivable

(18,266)


(9,644)

Prepaid expenses and other assets

7,099


(2,313)

Accounts payable, accrued expenses and other

10,538


16,822

Income taxes 

8,315


12,989

Accrued compensation

(16,958)


13,198

Billings in excess of services provided

11,031


(5,383)

                           Net cash provided by operating activities

20,479


103,806





Investing activities




Payments for acquisition of businesses, net of cash received 

(15,684)


(40,766)

Purchases of property and equipment

(31,797)


(22,994)

Other

69


24

                          Net cash used in investing activities

(47,412)


(63,736)





Financing activities




Payments of long-term debt

(6,014)


(6,000)

Purchase and retirement of common stock

(4,367)


(48,769)

Net issuance of common stock under equity compensation plans

(29)


6,208

Deposits

12,956


-

Other

(1,036)


(800)

                          Net cash provided by (used in) financing activities

1,510


(49,361)





Effect of exchange rate changes on cash and cash equivalents

(1,632)


432





Net decrease in cash and cash equivalents

(27,055)


(8,859)

Cash and cash equivalents, beginning of period

205,833


156,785

Cash and cash equivalents, end of period

$         178,778


$         147,926

 

 

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AT SEPTEMBER 30, 2014 AND DECEMBER 31, 2013

(in thousands, except per share amounts)






September 30,


December 31,


2014


2013

Assets

(unaudited)



Current assets




   Cash and cash equivalents

$          178,778


$                    205,833

   Accounts receivable:




       Billed receivables

401,696


352,411

       Unbilled receivables

305,572


233,307

       Allowance for doubtful accounts and unbilled services

(141,611)


(109,273)

          Accounts receivable, net

565,657


476,445

   Current portion of notes receivable

28,757


33,093

   Prepaid expenses and other current assets

54,045


61,800

   Current portion of deferred tax assets

29,731


26,690

Total current assets

856,968


803,861

Property and equipment, net of accumulated depreciation

83,520


79,007

Goodwill

1,213,809


1,218,733

Other intangible assets, net of amortization

80,913


97,148

Notes receivable, net of current portion

126,561


108,298

Other assets

53,120


57,900

Total assets

$       2,414,891


$                 2,364,947





Liabilities and Stockholders' Equity




Current liabilities




    Accounts payable, accrued expenses and other

$            99,857


$                    126,886

Accrued compensation

200,513


222,738

Current portion of long-term debt

6,000


6,014

    Billings in excess of services provided

39,492


28,692

Total current liabilities

345,862


384,330

Long-term debt, net of current portion

705,000


711,000

Deferred income taxes

152,583


137,697

Other liabilities

98,147


89,661

Total liabilities

1,301,592


1,322,688





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 ―41,027 (2014) and 40,526 (2013)

410


405

Additional paid-in capital

385,591


362,322

Retained earnings

788,507


730,621

Accumulated other comprehensive loss

(61,209)


(51,089)

Total stockholders' equity

1,113,299


1,042,259

Total liabilities and stockholders' equity

$       2,414,891


$                 2,364,947

SOURCE FTI Consulting, Inc.

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