FTI Consulting Reports Third Quarter 2015 Results

  • Third Quarter Revenues of $455.5 Million
  • Third Quarter Adjusted EPS of $0.53; Fully Diluted EPS of $0.25
  • Company Updates Revenue Guidance for 2015 of between $1.74 Billion and $1.78 Billion and Adjusted EPS Guidance of between $1.80 and $1.95

WASHINGTON, Oct. 29, 2015 (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 September 30, 2015.

For the quarter, revenues increased 1.0 percent to $455.5 million compared to $451.2 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues increased 4.1 percent compared to the prior year quarter. Fully diluted earnings per share (“EPS”) were $0.25 compared to $0.55 in the prior year quarter. EPS in the quarter includes a $19.6 million loss on early extinguishment of debt, which decreased EPS by $0.28. EPS in the prior year quarter included a special charge of $5.3 million, which decreased EPS by $0.08. Adjusted EPS and Adjusted EBITDA, which exclude the loss on extinguishment of debt and special charges, were $0.53 and $56.1 million, respectively, compared to $0.63 and $63.4 million, respectively, in the prior year quarter. Adjusted EBITDA was 12.3 percent of revenues as compared to 14.1 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 accompanying financial tables.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “While we had a solid quarter, persistent headwinds facing three of our core businesses have caused us to downgrade our expectations for 2015 and our aspirational targets for 2016. Notwithstanding those headwinds, however, I am pleased that we continue to anticipate double-digit EPS growth.”

Cash Position

Net cash provided by operating activities for the quarter was $74.0 million compared to net cash provided by operating activities of $97.6 million in the prior year quarter. Cash and cash equivalents were $105.0 million at September 30, 2015 compared to $178.8 million at September 30, 2014.

Third Quarter Segment Results

Corporate Finance & Restructuring

Revenues in the Corporate Finance & Restructuring (f/k/a Corporate Finance/Restructuring) segment increased $13.4 million or 13.4 percent to $113.5 million in the quarter compared to $100.0 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $17.8 million or 17.8 percent compared to the prior year quarter. The increase in revenues was driven by higher demand for distressed service offerings in North America. Adjusted Segment EBITDA was $26.7 million, or 23.5 percent of segment revenues, compared to $15.5 million, or 15.5 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to the higher demand for distressed service offerings, which contributed to improvements in staff leverage and utilization.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment decreased $5.6 million or 4.6 percent to $116.2 million in the quarter compared to $121.7 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $2.8 million or 2.3 percent. The decrease in revenues was driven by lower demand in the global disputes and investigations practices, which was partially offset by higher demand in the financial and enterprise data analytics practice and success fees in the health solutions practice. Adjusted Segment EBITDA was $13.4 million, or 11.5 percent of segment revenues, compared to $22.3 million, or 18.3 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower demand in the global disputes and investigations practices coupled with the ramp up of hiring in certain core practices and higher bad debt expenses compared to recoveries in the prior year quarter. These decreases were partially offset by the increase in success fees.

Economic Consulting

Revenues in the Economic Consulting segment decreased $6.0 million or 4.9 percent to $114.5 million in the quarter compared to $120.5 million in the prior year quarter. Revenues increased $1.7 million, or 1.4 percent, from an acquisition as compared to the same prior year period. Excluding the estimated negative impact of FX, revenues declined organically $5.0 million or 4.2 percent. The decline in organic revenues was driven by decreased demand in non-mergers and acquisitions (“M&A”) related antitrust and financial economics services, which was partially offset by higher demand for M&A and international arbitration services. Adjusted Segment EBITDA was $16.7 million, or 14.5 percent of segment revenues, compared to $18.4 million, or 15.3 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was impacted by lower revenue realization in the international arbitration, regulatory and valuation practices in the Europe, Middle East and Africa (“EMEA”) region. Lower utilization in the antitrust and financial economics practices were offset by lower variable compensation.

Technology

Revenues in the Technology segment decreased $6.8 million or 10.9 percent to $55.6 million in the quarter compared to $62.4 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $5.9 million, or 9.4 percent. The decline in revenues was impacted by a decline in consulting and a decline in other services related to financial services and cross-border investigations, which were partially offset by higher M&A-related “second request” work. Adjusted Segment EBITDA was $10.8 million, or 19.5 percent of segment revenues, compared to $17.8 million, or 28.6 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower utilization and realized pricing related to client mix and reduced licensing revenues.

Strategic Communications

Revenues in the Strategic Communications segment increased $9.2 million or 19.7 percent to $55.7 million in the quarter compared to $46.6 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $12.4 million or 26.7 percent with $9.3 million of higher pass-through income and higher M&A and public affairs project revenues in EMEA and North America. Adjusted Segment EBITDA was $8.7 million, or 15.6 percent of segment revenues, compared to $6.6 million, or 14.2 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to an increase in higher priced project revenues combined with improved staff leverage.

2015 Guidance Update

The Company now estimates that revenue for 2015 will be between $1.74 billion and $1.78 billion and Adjusted EPS will be between $1.80 and $1.95.

Third Quarter 2015 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2015 financial results at 9:00 a.m. Eastern Time on October 29, 2015. 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 4,400 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 $1.76 billion in revenues during fiscal year 2014. 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 locoh yes ated 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.  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME   
FOR THE THREE MONTHS ENDED September 30, 2015 AND 2014  
(in thousands, except per share data)  
(unaudited)  
         
  Three Months Ended  
  September 30,  
    2015       2014    
         
Revenues $   455,470     $   451,178    
         
Operating expenses        
Direct cost of revenues     301,609         293,244    
Selling, general and administrative expenses     105,058         102,461    
Special charges     -          5,347    
Acquisition-related contingent consideration     159         257    
Amortization of other intangible assets     2,900         3,398    
      409,726         404,707    
         
Operating income      45,744         46,471    
         
Other income (expense)        
Interest income and other     2,027         1,014    
Interest expense     (11,696 )       (12,634 )  
Loss on early extinguishment of debt     (19,589 )       -     
      (29,258 )       (11,620 )  
         
Income before income tax provision     16,486         34,851    
         
Income tax provision     6,177         12,329    
         
Net income  $   10,309     $   22,522    
         
Earnings per common share - basic $   0.25     $   0.57    
Earnings per common share - diluted $   0.25     $   0.55    
         
Weighted average common shares outstanding - basic     41,094         39,789    
Weighted average common shares outstanding - diluted     41,982         40,819    
         
Other comprehensive loss, net of tax:        
Foreign currency translation adjustments, net of tax of $0 $   (17,229 )   $   (22,542 )  
Total other comprehensive loss, net of tax     (17,229 )       (22,542 )  
Comprehensive loss $   (6,920 )   $   (20 )  
         

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
FOR THE Nine MONTHS ENDED September 30, 2015 AND 2014  
(in thousands, except per share data)  
(unaudited)  
         
  Nine Months Ended  
  September 30,  
    2015       2014    
         
Revenues $   1,336,945     $   1,331,054    
         
Operating expenses        
Direct cost of revenues     872,108         863,068    
Selling, general and administrative expenses     316,317         317,880    
Special charges     -          14,711    
Acquisition-related contingent consideration     (1,145 )       (1,591 )  
Amortization of other intangible assets     8,919         11,466    
      1,196,199         1,205,534    
         
Operating income     140,746         125,520    
         
Other income (expense)        
Interest income and other     2,840         3,465    
Interest expense     (36,537 )       (38,197 )  
Loss on early extinguishment of debt     (19,589 )       -     
      (53,286 )       (34,732 )  
         
Income before income tax provision     87,460         90,788    
         
Income tax provision     31,756         32,902    
         
Net income  $   55,704     $   57,886    
         
Earnings per common share - basic $   1.37     $   1.46    
Earnings per common share - diluted $   1.34     $   1.43    
         
Weighted average common shares outstanding - basic     40,771         39,637    
Weighted average common shares outstanding - diluted     41,682         40,608    
         
Other comprehensive loss, net of tax:        
Foreign currency translation adjustments, net of tax of $0 $   (24,412 )   $   (10,120 )  
Total other comprehensive loss, net of tax     (24,412 )       (10,120 )  
Comprehensive income  $   31,292     $   47,766    
         

 

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, 2015                          
Corporate Finance/Restructuring   $   113,487     $   26,662       23.5 %     69 %   $   390       830  
Forensic and Litigation Consulting        116,158         13,406       11.5 %     60 %   $   318       1,209  
Economic Consulting       114,541         16,654       14.5 %     71 %   $   523       594  
Technology  (1)       55,568         10,813       19.5 %   N/M   N/M     354  
Strategic Communications  (1)       55,716         8,717       15.6 %   N/M   N/M     594  
    $   455,470         76,252       16.7 %             3,581  
Selling, general and administrative expenses           (20,150 )                  
Adjusted EBITDA       $   56,102       12.3 %              
                           
Nine Months Ended September 30, 2015                          
Corporate Finance/Restructuring   $   328,812     $   71,174       21.6 %     71 %   $   382       830  
Forensic and Litigation Consulting       365,554         55,456       15.2 %     65 %   $   315       1,209  
Economic Consulting       329,320         43,502       13.2 %     72 %   $   506       594  
Technology  (1)       172,048         33,052       19.2 %   N/M   N/M     354  
Strategic Communications  (1)       141,211         20,100       14.2 %   N/M   N/M     594  
    $   1,336,945         223,284       16.7 %             3,581  
Corporate           (52,725 )                  
Adjusted EBITDA       $   170,559       12.8 %              
                           
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 %              
                           


(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 30, 2015 AND 2014  
(in thousands, except per share data)  
                         
          Three Months Ended September 30,   Nine Months Ended September 30,  
            2015       2014       2015       2014    
                 
Net income          $   10,309     $   22,522     $   55,704     $   57,886    
Add back:                        
Special charges, net of tax effect (1)       -          3,154         -          8,676    
Remeasurement of acquisition-related contingent consideration, net of tax effect (2)     -          -          (1,005 )       (1,514 )  
Loss on early extinguishment of debt, net of tax effect (3)       11,881         -          11,881         -     
Adjusted net income        $   22,190     $   25,676     $   66,580     $   65,048    
                         
Earnings per common share – diluted   $   0.25     $   0.55     $   1.34     $   1.43    
Add back:                        
Special charges, net of tax effect (1)       -          0.08         -          0.21    
Remeasurement of acquisition-related contingent consideration, net of tax effect (2)     -          -          (0.02 )       (0.04 )  
Loss on early extinguishment of debt, net of tax effect (3)       0.28         -          0.28         -     
Adjusted EPS – diluted       $   0.53     $   0.63     $   1.60     $   1.60    
                         
Weighted average number of common shares outstanding – diluted       41,982         40,819         41,682         40,608    


(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. During the three and nine months ended, September 30, 2015, there were no special charges. 
 
(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 rates for the adjustments related to the remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2015 was 40.0%. The tax expense related to the remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2015 was $0.7 million, or a $0.02 impact on diluted earnings per share. 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. There were no adjustments related to the remeasurement of acquisition-related contingent consideration for the three months ended September 30, 2015 and 2014.
 
(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 loss on early extinguishment of debt for the three and nine months ended September 30, 2015 was 39.3%. The tax expense related to the loss on early extinguishment of debt for the three and nine months ended September 30, 2015 was $7.7 million, or a $0.18 impact on diluted earnings per share. During the three and nine months ended, September 30, 2014, there was no loss on early extinguishment of debt. 
 

 

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA  
(in thousands)  
   
                                       
Three Months Ended September 30, 2015   Corporate Finance / Restructuring   Forensic and
Litigation Consulting
  Economic Consulting   Technology    Strategic Communications   Corp HQ   Total    
                                       
Net income                               $   10,309      
  Interest income and other                               (2,027 )    
  Interest expense                                 11,696      
  Loss on extinguishment of debt                               19,589      
  Income tax provision                                 6,177      
Operating income        $   25,112     $   11,944     $   15,498     $   6,830     $   7,235     $   (20,875 )   $   45,744      
  Depreciation and amortization       677         925         848         3,784         499         725         7,458      
  Amortization of other intangible assets     873         537         308         199         983         -          2,900      
Adjusted EBITDA        $   26,662     $   13,406     $   16,654     $   10,813     $   8,717     $   (20,150 )   $   56,102      
                                       
                                       
                                       
Nine Months Ended September 30, 2015                                
                                       
Net income                               $   55,704      
  Interest income and other                               (2,840 )    
  Interest expense                                 36,537      
  Loss on extinguishment of debt                               19,589      
  Income tax provision                                 31,756      
Operating income       $   67,782     $   50,894     $   40,076     $   21,493     $   15,558     $   (55,057 )   $   140,746      
  Depreciation and amortization       2,141         2,862         2,686         10,969         1,579         2,332         22,569      
  Amortization of other intangible assets           2,742         1,700         924         590         2,963         -          8,919      
  Remeasurement of acquisition-related contingent consideration     (1,491 )       -          (184 )       -          -          -          (1,675 )    
Adjusted EBITDA        $   71,174     $   55,456     $   43,502     $   33,052     $   20,100     $   (52,725 )   $   170,559      
                                       
                                       
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      
                                       
                                       

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE Nine MONTHS ENDED September 30, 2015 AND 2014  
(in thousands)  
(unaudited)  
         
  Nine Months Ended  
  September 30,  
    2015       2014    
Operating activities        
Net income  $   55,704     $   57,886    
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     22,569         26,318    
Amortization of other intangible assets     8,919         11,466    
Selling, general and administrative expenses     (1,145 )       (1,591 )  
Provision for doubtful accounts      10,364         11,896    
Non-cash share-based compensation      14,356         18,930    
Non-cash interest expense     2,029         2,020    
Loss on early extinguishment of debt     19,589         -     
Other     (674 )       (358 )  
Changes in operating assets and liabilities, net of effects from acquisitions:        
Accounts receivable, billed and unbilled     (84,411 )       (107,847 )  
Notes receivable     (334 )       (18,266 )  
Prepaid expenses and other assets     (4,396 )       7,099    
Accounts payable, accrued expenses and other     10,158         10,538    
Income taxes      15,371         8,315    
Accrued compensation     (19,518 )       (16,958 )  
Billings in excess of services provided     (5,278 )       11,031    
Net cash provided by operating activities     43,303         20,479    
         
Investing activities        
Payments for acquisition of businesses, net of cash received      (575 )       (15,684 )  
Purchases of property and equipment     (24,674 )       (31,797 )  
Other     94         69    
Net cash used in investing activities     (25,155 )       (47,412 )  
         
Financing activities        
Borrowings under revolving line of credit, net     220,000         -     
Payments of long-term debt     (425,671 )       (6,014 )  
Payments of debt financing fees      (3,701 )       -     
Purchase and retirement of common stock     -          (4,367 )  
Net issuance of common stock under equity compensation plans     13,931         (29 )  
Deposits     2,406         12,956    
Other     124         (1,036 )  
Net cash (used in) provided by financing activities     (192,911 )       1,510    
         
Effect of exchange rate changes on cash and cash equivalents     (3,943 )       (1,632 )  
         
Net decrease in cash and cash equivalents     (178,706 )       (27,055 )  
Cash and cash equivalents, beginning of period     283,680         205,833    
Cash and cash equivalents, end of period $   104,974     $   178,778    
         

 

FTI CONSULTING, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
AT September 30, 2015 AND DECEMBER 31, 2014  
(in thousands, except per share amounts)  
         
  September 30,   December 31,  
    2015       2014    
Assets (unaudited)      
Current assets        
Cash and cash equivalents $   104,974     $   283,680    
Accounts receivable:        
Billed receivables     426,947         381,464    
Unbilled receivables     310,778         248,462    
Allowance for doubtful accounts and unbilled services     (183,325 )       (144,825 )  
Selling, general and administrative expenses     554,400         485,101    
Current portion of notes receivable     35,097         27,208    
Prepaid expenses and other current assets     55,166         60,852    
Current portion of deferred tax assets     38,842         27,332    
Total current assets     788,479         884,173    
Property and equipment, net of accumulated depreciation     77,716         82,163    
Goodwill     1,199,490         1,211,689    
Other intangible assets, net of amortization     67,252         77,034    
Notes receivable, net of current portion     112,711         122,149    
Other assets     48,364         53,319    
Total assets $   2,294,012     $   2,430,527    
         
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable, accrued expenses and other $   101,464     $   99,494    
Accrued compensation     203,492         220,959    
Current portion of long-term debt     -          11,000    
Billings in excess of services provided     29,554         35,639    
Total current liabilities     334,510         367,092    
Long-term debt, net of current portion     520,000         700,000    
Deferred income taxes     178,180         161,932    
Other liabilities     98,919         98,757    
Total liabilities     1,131,609         1,327,781    
         
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 ― 41,887 (2015) and 41,181 (2014)     419         412    
Additional paid-in capital     421,532         393,174    
Retained earnings     845,132         789,428    
Accumulated other comprehensive loss     (104,680 )       (80,268 )  
Total stockholders' equity     1,162,403         1,102,746    
Total liabilities and stockholders' equity $   2,294,012     $   2,430,527    
         


Investor Contact:
Abaigeal Healy
+1.617.747.1727
abaigeal.healy@fticonsulting.com

Media Contact:
Nicole Madison
+1.212.850.5647
nicole.madison@fticonsulting.com

Primary Logo

FTI Consulting, Inc.

More Info

Share this page