• First Quarter Revenues of $446.3 Million
• First Quarter GAAP and Adjusted EPS of $0.34
• Company Revises 2017 Guidance
WASHINGTON, April 27, 2017 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN) today released its financial results for the
quarter ended March 31, 2017.
For the quarter, revenues of $446.3 million declined $23.9 million, or 5.1%, compared to revenues of $470.3 million in the prior
year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues decreased $16.1 million, or
3.4%, compared to the prior year quarter. The decrease in revenues was primarily driven by lower demand for restructuring services
in North America in the Corporate Finance & Restructuring segment. Net income of $14.0 million decreased 53.6% compared to $30.2
million in the prior year quarter. Adjusted EBITDA was $38.3 million, or 8.6% of revenues, compared to $68.9 million, or 14.6% of
revenues, in the prior year quarter. The decline in Adjusted EBITDA was primarily due to lower revenues and, to a lesser extent,
higher compensation and selling, general and administrative expenses.
Fully diluted earnings per share (“EPS”) and Adjusted EPS were $0.34 compared to EPS of $0.73 and Adjusted EPS of $0.83 in the
prior year quarter. EPS in the prior year quarter included a $5.1 million special charge related to headcount actions taken to
realign the Technology segment and a $1.0 million fair value increase to an acquisition contingent consideration liability, which
together reduced EPS by $0.10.
Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “Our first
quarter results were disappointing, primarily because we experienced a decline in demand for our restructuring services in North
America. We delivered sequential top and bottom line improvements in our Forensic and Litigation Consulting and Technology segments
as we have begun to see our strategies take hold, and our Economic Consulting segment delivered record quarterly revenues. The
strength of our franchise, the expertise of our professionals and our ability to win the most complex engagements, give me
confidence that we will deliver sustained EPS growth over time, though our first quarter performance underscores that we have work
to do to get the business to fully realize its potential.”
Cash Position and Capital Allocation
Net cash used in operating activities was $93.1 million at March 31, 2017, compared to $33.1 million at March 31, 2016. The
year-over-year difference in operating cash flows is due to a decline in cash collected resulting from lower revenues compared to
the prior year period and an increase in annual bonus payments. Cash and cash equivalents were $121.0 million at March 31, 2017,
compared to $114.5 million at March 31, 2016.
During the quarter, the Company repurchased 879,585 shares of its common stock at an average price of $41.95 for a total of
$36.9 million. As of March 31, 2017, approximately $44.5 million remained available under the Company’s $100.0 million share
repurchase authorization.
Total debt of $407.0 million at March 31, 2017, compares to total debt of $507.0 million at March 31, 2016. Total debt, net of
cash, was $286.0 million at March 31, 2017, down from $392.5 million at March 31, 2016.
First Quarter 2017 Segment Results
Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment decreased $21.3 million, or 16.7%, to $105.9 million in the quarter
compared to $127.2 million in the prior year quarter. The decrease in revenues was primarily due to lower demand for restructuring
services in North America. Adjusted Segment EBITDA was $10.3 million, or 9.7% of segment revenues, compared to $31.6 million, or
24.9% of segment revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to lower utilization
as a result of a decline in demand for restructuring services in North America.
Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $7.6 million, or 6.4%, to $111.4 million in the quarter
compared to $119.0 million in the prior year quarter. The decrease in revenues was primarily due to lower demand and realized
pricing for health solutions services and lower demand for global investigations services, which was partially offset by higher
demand for construction solutions services. Adjusted Segment EBITDA was $13.5 million, or 12.1% of segment revenues, compared to
$19.8 million, or 16.6% of segment revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to
lower revenues, which was partially offset by lower compensation resulting from headcount reductions taken in 2016.
Economic Consulting
Revenues in the Economic Consulting segment increased $8.5 million, or 6.5%, to $139.2 million in the quarter compared to $130.7
million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $11.8 million, or 9.0%,
compared to the prior year quarter. The increase in revenues was primarily due to higher demand for antitrust services in North
America. Adjusted Segment EBITDA was $20.1 million, or 14.4% of segment revenues, compared to $21.3 million, or 16.3% of segment
revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to lower utilization, with higher
headcount, in international arbitration and other litigation services in the Europe, Middle East and Africa (“EMEA”) region and an
increase in bad debt expense. The decline was partially offset by higher antitrust services revenues in North America.
Technology
Revenues in the Technology segment decreased $2.2 million, or 4.5%, to $46.1 million in the quarter compared to $48.3 million in
the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $1.7 million, or 3.4%, compared to the
prior year quarter. The decrease in revenues was primarily due to lower demand for cross-border investigations. Adjusted Segment
EBITDA was $7.8 million, or 16.9% of segment revenues, compared to $7.8 million, or 16.2% of segment revenues, in the prior year
quarter. Adjusted Segment EBITDA was consistent with the prior year quarter as the decrease in revenues was more than offset by
lower compensation resulting from headcount reductions taken in 2016.
Strategic Communications
Revenues in the Strategic Communications segment decreased $1.4 million, or 3.1%, to $43.7 million in the quarter compared to $45.1
million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $0.6 million, or 1.2%,
compared to the prior year quarter. Excluding FX, the increase in revenues was primarily due to higher retainer-based revenues and
an increase in project-based revenues in the EMEA region, particularly in public affairs. Adjusted Segment EBITDA was $4.3 million,
or 9.7% of segment revenues, compared to $6.1 million, or 13.5% of segment revenues, in the prior year quarter. The decrease in
Adjusted Segment EBITDA was due to higher compensation related to an increase in billable professionals, a decline in project-based
revenues in North America and the negative impact of FX.
2017 Guidance
Given the weaker than anticipated performance in the first quarter of 2017, the Company is revising its full year 2017 guidance.
The Company now estimates that 2017 revenues will range between $1.775 billion and $1.875 billion. This compares to the previous
revenue range of between $1.800 billion and $1.900 billion. The Company now estimates that 2017 EPS will range between $1.75 and
$2.10, and Adjusted EPS will range between $1.90 and $2.20. This compares to the previous EPS range of between $1.95 and $2.30, and
the Adjusted EPS range of between $2.10 and $2.40. The variance between EPS and Adjusted EPS guidance for 2017 is related to
estimated lease cancellation charges of $0.10 to $0.15 per share for the move of the Company’s Washington, D.C., office to another
Washington, D.C., office location. The Company’s guidance assumes the use during 2017 of the remaining $44.5 million of its $100.0
million share repurchase authorization, which will be dependent on fluctuations in the price per share of the Company’s common
stock, the timing of stock repurchases, market conditions and other future events that may be beyond the Company’s control.
First Quarter 2017 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss first quarter 2017 financial results at 9:00 a.m.
Eastern Time on April 27, 2017. The call can be accessed live and will be available for replay over the Internet for 90 days by
logging onto the Company's investor relations website here.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve
disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,700 employees
located in 29 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex
business challenges and make the most of opportunities. The Company generated $1.81 billion in revenues during fiscal year 2016.
More information can be found at www.fticonsulting.com.
Use of Non-GAAP Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment
financial information that may not be presented in our financial statements or prepared in accordance with GAAP. Certain of these
measures are considered “non-GAAP financial measures” under the SEC rules. Specifically, we have referred to the following non-GAAP
measures:
- Total Segment Operating Income
- Adjusted EBITDA
- Total Adjusted Segment EBITDA
- Adjusted EBITDA Margin
- Adjusted Net Income (Loss)
- Adjusted Earnings per Diluted Share
We have included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA below in order to more fully
define the components of certain non-GAAP financial 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), which is a
non-GAAP financial measure, 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 use Adjusted
Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current
core operating performance and provides an indicator of the segment’s ability to generate cash. We define Adjusted Segment EBITDA
Margin as Adjusted Segment EBITDA as a percentage of a segment’s revenues.
We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for
all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as
consolidated net income 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 the non-GAAP financial measures, which exclude the effects of remeasurement of
acquisition-related contingent consideration, special charges and goodwill impairment charges, 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. 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 with the operating
results of other companies.
We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial
measures, 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 non-GAAP financial measure, which excludes the effects of the remeasurement of
acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of
debt, when considered together with our GAAP financial results, provides management and investors with an additional understanding
of our business operating results, including underlying trends.
Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with 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 Condensed Consolidated Statements of Comprehensive Income.
Reconciliations of non-GAAP financial measures to the most directly comparable 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, share repurchases 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 flows 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, fluctuations in the price per share of our common stock, other market and general economic conditions and other future
events, which could impact each of our segments differently and could be outside of our control, the pace and timing of the
consummation and integration of 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 |
| (in thousands, except per share data) |
| |
|
|
|
| |
Three Months Ended |
| |
March
31, |
| |
|
2017 |
|
|
|
2016 |
|
| |
(unaudited) |
| |
|
|
|
| Revenues |
$ |
446,344 |
|
|
$ |
470,285 |
|
| |
|
|
|
| Operating expenses |
|
|
|
| Direct cost of revenues |
|
309,072 |
|
|
|
305,636 |
|
| Selling, general and administrative expenses |
|
107,295 |
|
|
|
103,609 |
|
| Special charges |
|
- |
|
|
|
5,061 |
|
| Acquisition-related contingent consideration |
|
395 |
|
|
|
1,134 |
|
| Amortization of other intangible assets |
|
2,493 |
|
|
|
2,606 |
|
| |
|
419,255 |
|
|
|
418,046 |
|
| |
|
|
|
| Operating income |
|
27,089 |
|
|
|
52,239 |
|
| |
|
|
|
| Other income (expense) |
|
|
|
| Interest income and other |
|
605 |
|
|
|
2,557 |
|
| Interest expense |
|
(5,801 |
) |
|
|
(6,229 |
) |
| |
|
(5,196 |
) |
|
|
(3,672 |
) |
| |
|
|
|
| Income before income tax provision |
|
21,893 |
|
|
|
48,567 |
|
| |
|
|
|
| Income tax provision |
|
7,877 |
|
|
|
18,386 |
|
| |
|
|
|
| Net income |
$ |
14,016 |
|
|
$ |
30,181 |
|
| |
|
|
|
| Earnings per common share - basic |
$ |
0.35 |
|
|
$ |
0.75 |
|
| |
|
|
|
|
|
|
|
| Weighted average common shares outstanding - basic |
|
40,527 |
|
|
|
40,506 |
|
| |
|
|
|
| Earnings per common share - diluted |
$ |
0.34 |
|
|
$ |
0.73 |
|
| |
|
|
|
|
|
|
|
| Weighted average common shares outstanding - diluted |
|
41,245 |
|
|
|
41,148 |
|
| |
|
|
|
| |
|
|
|
| Other comprehensive income (loss), net of tax |
|
|
|
| |
|
|
|
| Foreign currency translation adjustments, net of tax expense of $0
|
$ |
7,370 |
|
|
$ |
(358 |
) |
| Total other comprehensive income (loss), net of tax |
|
7,370 |
|
|
|
(358 |
) |
| Comprehensive income |
$ |
21,386 |
|
|
$ |
29,823 |
|
| |
|
|
|
|
FTI CONSULTING, INC. |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
| (in thousands, except per share data) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
Three Months Ended
March 31, |
|
| |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
| |
|
|
|
|
(unaudited) |
|
| |
|
|
|
|
|
|
|
| Net income |
|
|
|
|
$ |
14,016 |
|
|
$ |
30,181 |
|
|
| Add back: |
|
|
|
|
|
|
|
|
| Special charges |
|
|
|
|
- |
|
|
|
5,061 |
|
|
| Tax impact of special charges |
|
|
|
- |
|
|
|
(1,792 |
) |
|
| Remeasurement of acquisition-related contingent
consideration |
|
|
166 |
|
|
|
980 |
|
|
| Tax impact of remeasurement of acquisition-related
contingent consideration |
|
|
(65 |
) |
|
|
(380 |
) |
|
| Adjusted Net Income |
|
|
|
$ |
14,117 |
|
|
$ |
34,050 |
|
|
| |
|
|
|
|
|
|
|
|
| Earnings per common share – diluted |
|
|
$ |
0.34 |
|
|
$ |
0.73 |
|
|
| Add back: |
|
|
|
|
|
|
|
|
| Special charges |
|
|
|
|
- |
|
|
|
0.12 |
|
|
| Tax impact of special charges |
|
|
|
- |
|
|
|
(0.04 |
) |
|
| Remeasurement of acquisition-related contingent
consideration(1) |
|
|
- |
|
|
|
0.02 |
|
|
| Adjusted earnings per common share - diluted |
|
$ |
0.34 |
|
|
$ |
0.83 |
|
|
| |
|
|
|
|
|
|
|
|
| Weighted average number of common shares outstanding –
diluted |
|
|
41,245 |
|
|
|
41,148 |
|
|
| |
| (1) Impact of remeasurement of
acquisition-related contingent consideration on earnings per common share for three months ended March 31, 2017 and related tax
impact for three months ended March 31, 2017 and 2016 round to $0.00 per share. |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
Year Ended December
31, 2017 |
|
| |
|
|
|
|
Low |
|
High |
|
| Guidance on estimated earnings per common share - diluted
(GAAP)(1) |
|
$ |
1.75 |
|
|
$ |
2.10 |
|
|
| Estimated special charge for lease termination costs
related the relocation of the Company's office in Washington, D.C. |
|
|
0.15 |
|
|
|
0.10 |
|
|
| Guidance on estimated adjusted earnings per common share
(Non-GAAP)(1) |
|
$ |
1.90 |
|
|
$ |
2.20 |
|
|
| |
|
|
|
|
|
|
|
|
| (1) The forward-looking guidance on
estimated 2017 earnings per diluted share (“EPS”) and adjusted earnings per common share-diluted ("Adjusted EPS") do not
reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to future impact of 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 and difficult to predict. |
|
| |
|
|
|
|
|
|
|
|
| FTI CONSULTING, INC. |
|
| OPERATING RESULTS BY BUSINESS SEGMENT |
|
| |
|
|
|
|
|
Adjusted |
|
|
|
Average |
|
Revenue- |
|
|
| |
|
Segment |
|
Adjusted |
|
EBITDA |
|
|
|
Billable |
|
Generating |
|
|
| |
|
Revenues |
|
EBITDA |
|
Margin |
|
Utilization |
|
Rate |
|
Headcount |
|
|
| |
|
(in
thousands) |
|
|
|
|
|
|
|
(at period end) |
|
|
| Three Months Ended
March 31, 2017 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate Finance & Restructuring |
|
$ |
105,901 |
|
$ |
10,325 |
|
|
9.7 |
% |
|
59 |
% |
|
$ |
377 |
|
900 |
|
|
| Forensic and Litigation Consulting |
|
|
111,406 |
|
|
13,521 |
|
|
12.1 |
% |
|
60 |
% |
|
$ |
330 |
|
1,110 |
|
|
| Economic Consulting |
|
|
139,221 |
|
|
20,110 |
|
|
14.4 |
% |
|
72 |
% |
|
$ |
554 |
|
660 |
|
|
| Technology(1) |
|
|
46,087 |
|
|
7,804 |
|
|
16.9 |
% |
|
N/M |
|
N/M |
|
296 |
|
|
| Strategic Communications(1) |
|
|
43,729 |
|
|
4,257 |
|
|
9.7 |
% |
|
N/M |
|
N/M |
|
657 |
|
|
| |
|
$ |
446,344 |
|
$ |
56,017 |
|
|
12.6 |
% |
|
|
|
|
|
3,623 |
|
|
| Unallocated Corporate |
|
|
|
|
(17,698 |
) |
|
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
|
|
|
$ |
38,319 |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended
March 31, 2016 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate Finance & Restructuring |
|
$ |
127,156 |
|
$ |
31,603 |
|
|
24.9 |
% |
|
74 |
% |
|
$ |
384 |
|
857 |
|
|
| Forensic and Litigation Consulting |
|
|
119,004 |
|
|
19,808 |
|
|
16.6 |
% |
|
64 |
% |
|
$ |
333 |
|
1,132 |
|
|
| Economic Consulting |
|
|
130,731 |
|
|
21,319 |
|
|
16.3 |
% |
|
79 |
% |
|
$ |
531 |
|
607 |
|
|
| Technology(1) |
|
|
48,281 |
|
|
7,823 |
|
|
16.2 |
% |
|
N/M |
|
N/M |
|
313 |
|
|
| Strategic Communications(1) |
|
|
45,113 |
|
|
6,108 |
|
|
13.5 |
% |
|
N/M |
|
N/M |
|
601 |
|
|
| |
|
$ |
470,285 |
|
$ |
86,661 |
|
|
18.4 |
% |
|
|
|
|
|
3,510 |
|
|
| Unallocated Corporate |
|
|
|
|
(17,804 |
) |
|
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
|
|
|
$ |
68,857 |
|
|
14.6 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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 NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA |
|
| (in thousands) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2017
(unaudited) |
Corporate
Finance &
Restructuring |
|
Forensic and
Litigation
Consulting |
|
Economic
Consulting |
|
Technology |
|
Strategic
Communications |
|
Unallocated
Corporate |
|
Total |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
14,016 |
|
|
|
| |
Interest income and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(605 |
) |
|
|
| |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,801 |
|
|
|
| |
Income tax provision |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,877 |
|
|
|
| Operating income |
|
|
$ |
8,749 |
|
$ |
11,924 |
|
$ |
18,502 |
|
$ |
4,440 |
|
|
$ |
2,527 |
|
$ |
(19,053 |
) |
|
$ |
27,089 |
|
|
|
| |
Depreciation and amortization |
|
781 |
|
|
1,173 |
|
|
1,454 |
|
|
3,206 |
|
|
|
602 |
|
|
1,355 |
|
|
|
8,571 |
|
|
|
| |
Amortization of other intangible assets |
|
795 |
|
|
424 |
|
|
154 |
|
|
158 |
|
|
|
962 |
|
|
- |
|
|
|
2,493 |
|
|
|
| |
Remeasurement of acquisition-related contingent consideration |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
166 |
|
|
- |
|
|
|
166 |
|
|
|
| Adjusted
EBITDA |
|
|
$ |
10,325 |
|
$ |
13,521 |
|
$ |
20,110 |
|
$ |
7,804 |
|
|
$ |
4,257 |
|
$ |
(17,698 |
) |
|
$ |
38,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2016
(unaudited) |
Corporate
Finance &
Restructuring |
|
Forensic and
Litigation
Consulting |
|
Economic
Consulting |
|
Technology |
|
Strategic
Communications |
|
Unallocated
Corporate |
|
Total |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
30,181 |
|
|
|
| |
Interest income and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,557 |
) |
|
|
| |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,229 |
|
|
|
| |
Income tax provision |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,386 |
|
|
|
| Operating income (loss) |
|
|
$ |
30,076 |
|
$ |
18,213 |
|
$ |
20,211 |
|
$ |
(1,180 |
) |
|
$ |
3,665 |
|
$ |
(18,746 |
) |
|
$ |
52,239 |
|
|
|
| |
Depreciation and amortization |
|
722 |
|
|
1,079 |
|
|
925 |
|
|
3,784 |
|
|
|
519 |
|
|
942 |
|
|
|
7,971 |
|
|
|
| |
Amortization of other intangible assets |
|
805 |
|
|
516 |
|
|
183 |
|
|
158 |
|
|
|
944 |
|
|
- |
|
|
|
2,606 |
|
|
|
| |
Special charges |
|
|
- |
|
|
- |
|
|
- |
|
|
5,061 |
|
|
|
- |
|
|
- |
|
|
|
5,061 |
|
|
|
| |
Remeasurement of acquisition-related contingent consideration |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
980 |
|
|
- |
|
|
|
980 |
|
|
|
| Adjusted
EBITDA |
|
|
$ |
31,603 |
|
$ |
19,808 |
|
$ |
21,319 |
|
$ |
7,823 |
|
|
$ |
6,108 |
|
$ |
(17,804 |
) |
|
$ |
68,857 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FTI CONSULTING, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (in thousands) |
| |
|
|
|
| |
Three Months Ended |
| |
March
31, |
| |
|
2017 |
|
|
|
2016 |
|
| |
(unaudited) |
| Operating activities |
|
|
|
| Net income |
$ |
14,016 |
|
|
$ |
30,181 |
|
| |
|
|
|
| Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
| Depreciation and amortization |
|
8,571 |
|
|
|
7,971 |
|
| Amortization and impairment of other intangible assets |
|
2,493 |
|
|
|
2,606 |
|
| Acquisition-related contingent consideration |
|
395 |
|
|
|
1,134 |
|
| Provision for doubtful accounts |
|
3,551 |
|
|
|
437 |
|
| Non-cash share-based compensation |
|
7,281 |
|
|
|
6,158 |
|
| Non-cash interest expense |
|
496 |
|
|
|
497 |
|
| Other |
|
12 |
|
|
|
(81 |
) |
| Changes in operating assets and liabilities, net of effects from
acquisitions: |
|
|
|
| Accounts receivable, billed and unbilled |
|
(52,489 |
) |
|
|
(52,047 |
) |
| Notes receivable |
|
7,153 |
|
|
|
3,853 |
|
| Prepaid expenses and other assets |
|
553 |
|
|
|
3,824 |
|
| Accounts payable, accrued expenses and other |
|
287 |
|
|
|
5,619 |
|
| Income taxes |
|
3,650 |
|
|
|
17,561 |
|
| Accrued compensation |
|
(92,561 |
) |
|
|
(65,511 |
) |
| Billings in excess of services provided |
|
3,505 |
|
|
|
4,699 |
|
| Net cash used in operating
activities |
|
(93,087 |
) |
|
|
(33,099 |
) |
| |
|
|
|
| Investing activities |
|
|
|
| Purchases of property and equipment |
|
(5,831 |
) |
|
|
(6,362 |
) |
| Other |
|
127 |
|
|
|
34 |
|
| Net cash used in investing
activities |
|
(5,704 |
) |
|
|
(6,328 |
) |
| |
|
|
|
| Financing activities |
|
|
|
| Borrowings under revolving line of credit, net |
|
37,000 |
|
|
|
7,000 |
|
| Deposits |
|
3,069 |
|
|
|
2,590 |
|
| Purchase and retirement of common stock |
|
(36,918 |
) |
|
|
(2,903 |
) |
| Net issuance of common stock under equity compensation plans |
|
(812 |
) |
|
|
(1,371 |
) |
| Other |
|
- |
|
|
|
(135 |
) |
| Net cash provided by financing
activities |
|
2,339 |
|
|
|
5,181 |
|
| |
|
|
|
| Effect of exchange rate changes on cash and cash equivalents |
|
1,253 |
|
|
|
(1,063 |
) |
| |
|
|
|
| Net decrease in cash and cash equivalents |
|
(95,199 |
) |
|
|
(35,309 |
) |
| Cash and cash equivalents, beginning of period |
|
216,158 |
|
|
|
149,760 |
|
| Cash and cash equivalents, end of period |
$ |
120,959 |
|
|
$ |
114,451 |
|
| |
|
|
|
| FTI CONSULTING, INC. |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands, except per share data) |
| |
|
|
|
| |
March 31, |
|
December 31, |
| |
|
2017 |
|
|
|
2016 |
|
| |
(unaudited) |
|
|
| Assets |
|
|
|
| Current assets |
|
|
|
| Cash and cash equivalents |
$ |
120,959 |
|
|
$ |
216,158 |
|
| Accounts receivable: |
|
|
|
| Billed receivables |
|
383,268 |
|
|
|
365,385 |
|
| Unbilled receivables |
|
330,062 |
|
|
|
288,331 |
|
| Allowance for doubtful accounts and unbilled services |
|
(187,150 |
) |
|
|
(178,819 |
) |
| Accounts receivable, net |
|
526,180 |
|
|
|
474,897 |
|
| Current portion of notes receivable |
|
29,314 |
|
|
|
31,864 |
|
| Prepaid expenses and other current assets |
|
60,683 |
|
|
|
60,252 |
|
| Total current assets |
|
737,136 |
|
|
|
783,171 |
|
| Property and equipment, net of accumulated depreciation |
|
59,474 |
|
|
|
61,856 |
|
| Goodwill |
|
1,183,627 |
|
|
|
1,180,001 |
|
| Other intangible assets, net of amortization |
|
49,895 |
|
|
|
52,120 |
|
| Notes receivable, net of current portion |
|
100,288 |
|
|
|
104,524 |
|
| Other assets |
|
42,142 |
|
|
|
43,696 |
|
| Total assets |
$ |
2,172,562 |
|
|
$ |
2,225,368 |
|
| |
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
| Current liabilities |
|
|
|
| Accounts payable, accrued expenses and other |
$ |
87,411 |
|
|
$ |
87,320 |
|
| Accrued compensation |
|
172,593 |
|
|
|
261,500 |
|
| Billings in excess of services provided |
|
33,324 |
|
|
|
29,635 |
|
| Total current liabilities |
|
293,328 |
|
|
|
378,455 |
|
| Long-term debt, net |
|
402,717 |
|
|
|
365,528 |
|
| Deferred income taxes |
|
177,339 |
|
|
|
173,799 |
|
| Other liabilities |
|
102,649 |
|
|
|
100,228 |
|
| Total liabilities |
|
976,033 |
|
|
|
1,018,010 |
|
| |
|
|
|
| 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 ― 41,321 (2017) and 42,037 (2016) |
|
413 |
|
|
|
420 |
|
| Additional paid-in capital |
|
387,797 |
|
|
|
416,816 |
|
| Retained earnings |
|
951,828 |
|
|
|
941,001 |
|
| Accumulated other comprehensive loss |
|
(143,509 |
) |
|
|
(150,879 |
) |
| Total stockholders' equity |
|
1,196,529 |
|
|
|
1,207,358 |
|
| Total liabilities and stockholders' equity |
$ |
2,172,562 |
|
|
$ |
2,225,368 |
|
| |
|
|
|
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
