Market Overview

FTI Consulting Reports Record Second Quarter 2018 Financial Results

Share:
  • Second Quarter 2018 Revenues of $512.1 Million, Up 15.2% Compared to Prior Year Quarter
  • Second Quarter Fully Diluted Earnings (Loss) per Share of $1.14 Compared to $(0.13) in Prior Year Quarter; Second Quarter Adjusted EPS of $1.14 Compared to $0.40 in Prior Year Quarter
  • Full Year 2018 Guidance Increased

WASHINGTON, July 26, 2018 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN) today released record financial results for the quarter ended June 30, 2018.

Second quarter 2018 revenues of $512.1 million increased $67.4 million, or 15.2%, compared to revenues of $444.7 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation ("FX"), revenues increased by $61.6 million, or 13.8%, compared to the prior year quarter. The increase in revenues was primarily driven by higher demand within the Corporate Finance & Restructuring, Forensic and Litigation Consulting, Strategic Communications and Economic Consulting segments. Net income of $43.6 million compared to a net loss of $5.2 million in the prior year quarter, which included a pretax special charge of $30.1 million related to headcount and real estate actions. The increase in net income was largely due to higher operating profits and a lower effective income tax rate compared to the prior year quarter. Adjusted EBITDA of $72.4 million, or 14.1% of revenues, compared to $40.8 million, or 9.2% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was primarily due to higher revenues and improved utilization.

Second quarter 2018 fully diluted earnings per share ("EPS") of $1.14 compared to fully diluted loss per share of $(0.13) in the prior year quarter. EPS (Loss) in the prior year quarter included the aforementioned special charge, which reduced EPS by $0.52. Adjusted EPS of $1.14 compared to $0.40 in the prior year quarter.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, "We are very pleased with our record first half of 2018. Critically, that success supports our commitment to invest in our people by promoting internally and attracting superb professionals to our firm, which, in turn, allows us to further enhance our ability to help our clients navigate many of the largest and most complex issues in the world."

Cash Position and Capital Allocation

Net cash provided by operating activities of $34.6 million for the quarter ended June 30, 2018 compared to $10.9 million for the quarter ended June 30, 2017. The increase was primarily due to higher cash collections resulting from increased revenues, which was partially offset by higher income tax payments. Total debt of $375.0 million at June 30, 2018 compared to $445.0 million at March 31, 2018 and $485.0 million at June 30, 2017. Cash and cash equivalents of $116.6 million at June 30, 2018 declined $35.5 million from March 31, 2018.

Second Quarter 2018 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $23.9 million, or 20.3%, to $141.4 million in the quarter compared to $117.5 million in the prior year quarter. The increase in revenues was due to higher demand for restructuring services coupled with higher realization for restructuring and business transformation services in the North America and Europe, Middle East and Africa regions. Adjusted Segment EBITDA was $35.8 million, or 25.3% of segment revenues, compared to $20.0 million, or 17.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues with improved utilization.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $22.1 million, or 19.9%, to $133.5 million in the quarter compared to $111.4 million in the prior year quarter. The increase in revenues was primarily driven by higher demand and realization for investigations and construction solutions services. Adjusted Segment EBITDA was $27.6 million, or 20.7% of segment revenues, compared to $13.0 million, or 11.7% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues with improved utilization.

Economic Consulting
Revenues in the Economic Consulting segment increased $9.3 million, or 7.5%, to $133.3 million in the quarter, compared to $124.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $7.3 million, or 5.9% compared to the prior year quarter. The increase in revenues was primarily due to higher demand for financial economics and international arbitration services, which was partially offset by lower realization for antitrust services. Adjusted Segment EBITDA was $15.5 million, or 11.6% of segment revenues, compared to $15.5 million, or 12.5% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was consistent with the prior year quarter, as the increase in revenues was offset by higher variable compensation costs and an increase in billable headcount.

Technology
Revenues in the Technology segment increased $0.9 million, or 1.9%, to $46.4 million in the quarter compared to $45.6 million in the prior year quarter. The increase in revenues was primarily due to higher demand for consulting and hosting services. This was partially offset by lower demand for managed review services related to a decline in merger- and acquisition-related "second requests" and global investigations. Adjusted Segment EBITDA was $7.5 million, or 16.2% of segment revenues, compared to $5.4 million, or 11.9% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues and lower variable compensation costs for managed review services.

Strategic Communications
Revenues in the Strategic Communications segment increased $11.2 million, or 24.3%, to $57.5 million in the quarter compared to $46.2 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $9.6 million, or 20.8%, compared to the prior year quarter. The increase in revenues was primarily due to an increase in both project- and retainer-based revenues related to the financial communications and public affairs practices. Adjusted Segment EBITDA was $11.0 million, or 19.1% of segment revenues, compared to $4.9 million, or 10.5% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by higher variable compensation costs.

2018 Guidance

The Company is revising its full year 2018 guidance. The Company now estimates that 2018 revenues will range between $1.910 billion and $1.960 billion. This compares to the previous revenue range of between $1.825 billion and $1.875 billion. The Company now estimates that 2018 EPS will range between $2.90 and $3.30. This compares to the previous EPS range of between $2.35 and $2.65. The Company does not expect Adjusted EPS to differ from EPS.

Second Quarter 2018 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2018 financial results at 9:00 a.m. Eastern Time on July 26, 2018. 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 4,600 employees located in 28 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 2017. 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 generally accepted accounting principles ("GAAP"). Certain of these measures are considered "non-GAAP financial measures" under the Securities and Exchange Commission ("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
  • Adjusted Earnings per Diluted Share
  • Free Cash Flow

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. We define Total Segment Operating Income, 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 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 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 define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenues. 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 (loss) and earnings (loss) per diluted share ("EPS"), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt and the adjustment related to the adoption of the 2017 U.S. Tax Cuts and Jobs Act ("2017 Tax Act"). 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, losses on early extinguishment of debt and the adjustment related to the adoption of the 2017 Tax Act, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company's ability to generate cash for ongoing business operations and other capital deployment.

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 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, fluctuations in the price per share of our common stock, adverse financial, real estate or 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, new laws and regulations, or changes thereto, including the 2017 Tax Act, and other risks described under the heading "Item 1A, Risk Factors" in the Company's annual report on Form 10-K for the year ended December 31, 2017, filed with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations," and in the Company's other filings with the SEC. 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 BALANCE SHEETS
(in thousands, except per share amounts)
 
    June 30,   December 31,
    2018   2017
    (unaudited)    
Assets        
Current assets        
Cash and cash equivalents   $ 116,556     $ 189,961  
Accounts receivable:        
     Billed receivables   455,707     390,996  
     Unbilled receivables   368,360     312,569  
     Allowances for doubtful accounts and unbilled services   (216,612 )   (180,687 )
          Accounts receivable, net   607,455     522,878  
Current portion of notes receivable   28,619     25,691  
Prepaid expenses and other current assets   54,806     55,649  
     Total current assets   807,436     794,179  
Property and equipment, net   75,046     75,075  
Goodwill   1,198,732     1,204,803  
Other intangible assets, net   39,379     44,150  
Notes receivable, net   90,904     98,105  
Other assets   45,915     40,929  
                    Total assets   $ 2,257,412     $ 2,257,241  
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable, accrued expenses and other   $ 93,988     $ 94,873  
Accrued compensation   224,663     268,513  
Billings in excess of services provided   33,653     46,942  
     Total current liabilities   352,304     410,328  
Long-term debt, net   371,662     396,284  
Deferred income taxes   134,081     124,471  
Other liabilities   123,564     134,187  
       Total liabilities   981,611     1,065,270  
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 — 38,179 (2018) and 37,729 (2017)
  382     377  
Additional paid-in capital   280,201     266,035  
Retained earnings   1,128,670     1,045,774  
Accumulated other comprehensive loss   (133,452 )   (120,215 )
     Total stockholders' equity   1,275,801     1,191,971  
          Total liabilities and stockholders' equity   $ 2,257,412     $ 2,257,241  


 
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
 
  Three Months Ended
June 30,
 
  2018   2017
  (unaudited)
Revenues $ 512,098     $ 444,715  
Operating expenses      
Direct cost of revenues 330,318     304,071  
Selling, general and administrative expenses 117,897     108,119  
Special charges     30,074  
Amortization of other intangible assets 2,052     2,422  
  450,267     444,686  
Operating income 61,831     29  
Other income (expense)      
Interest income and other 2,474     1,592  
Interest expense (6,583 )   (6,250 )
  (4,109 )   (4,658 )
Income (loss) before income tax provision 57,722     (4,629 )
Income tax provision 14,113     527  
Net income (loss) $ 43,609     $ (5,156 )
Earnings (loss) per common share ― basic $ 1.18     $ (0.13 )
Weighted average common shares outstanding ― basic 37,001     39,555  
Earnings (loss) per common share ― diluted $ 1.14     $ (0.13 )
Weighted average common shares outstanding ― diluted 38,271     39,555  
Other comprehensive income (loss), net of tax      
Foreign currency translation adjustments, net of tax expense of $0 $ (23,683 )   $ 10,174  
Total other comprehensive income (loss), net of tax (23,683 )   10,174  
Comprehensive income $ 19,926     $ 5,018  


 
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
 
  Six Months Ended
June 30,
 
  2018   2017
  (unaudited)
Revenues $ 1,009,872     $ 891,059  
Operating expenses      
Direct cost of revenues 651,435     613,143  
Selling, general and administrative expenses 230,025     215,809  
Special charges     30,074  
Amortization of other intangible assets 4,322     4,915  
  885,782     863,941  
Operating income 124,090     27,118  
Other income (expense)      
Interest income and other 674     2,197  
Interest expense (12,827 )   (12,051 )
  (12,153 )   (9,854 )
Income before income tax provision 111,937     17,264  
Income tax provision 29,383     8,404  
Net income $ 82,554     $ 8,860  
Earnings per common share ― basic $ 2.24     $ 0.22  
Weighted average common shares outstanding ― basic 36,851     40,039  
Earnings per common share ― diluted $ 2.18     $ 0.22  
Weighted average common shares outstanding ― diluted 37,942     40,502  
Other comprehensive income (loss), net of tax      
Foreign currency translation adjustments, net of tax expense of $0 $ (13,237 )   $ 17,544  
Total other comprehensive income (loss), net of tax (13,237 )   17,544  
Comprehensive income $ 69,317     $ 26,404  


 
FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
 
    Three Months Ended
June 30,
  Six Months Ended
June 30,
    2018   2017   2018   2017
    (Unaudited)   (Unaudited)
Net income (loss)   $ 43,609     $ (5,156 )   $ 82,554     $ 8,860  
Add back:                
Special charges       30,074         30,074  
Tax impact of special charges       (9,103 )       (9,103 )
Remeasurement of acquisition-related contingent
  consideration
      536         702  
Tax impact of remeasurement of acquisition-
  related contingent consideration
      (204 )       (269 )
Adjusted net income   $ 43,609     $ 16,147     $ 82,554     $ 30,264  
Earnings (loss) per common share — diluted   $ 1.14     $ (0.13 )   $ 2.18     $ 0.22  
Add back:                
Special charges       0.75         0.74  
Tax impact of special charges       (0.23 )       (0.22 )
Remeasurement of acquisition-related contingent
  consideration
      0.01         0.02  
Tax impact of remeasurement of acquisition-
  related contingent consideration
              (0.01 )
Adjusted earnings per common share — diluted   $ 1.14     $ 0.40     $ 2.18     $ 0.75  
Weighted average number of common shares
  outstanding ― diluted (1)
  38,271     39,932     37,942     40,502  


 

(1) For the three months ended June 30, 2017, the Company reported a net loss. For the period, the basic weighted average common shares outstanding equals the diluted weighted average common shares outstanding for purposes of calculating U.S. GAAP earnings per share because potentially dilutive securities would be antidilutive. For non-GAAP purposes, Adjusted EPS and diluted weighted average number of common shares outstanding presented herein reflect the impact of inclusion of share-based awards that are considered dilutive based on the impact of the add-backs included in Adjusted Net Income above.

 
FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)
 
Three Months Ended June 30, 2018 (unaudited)   Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 43,609  
Interest income and other                           (2,474 )
Interest expense                           6,583  
Income tax provision                           14,113  
Operating income   $ 34,041     $ 26,173     $ 14,024     $ 3,967     $ 9,508     $ (25,882 )   $ 61,831  
Depreciation and amortization   953     1,131     1,377     3,527     586     914     8,488  
Amortization of other intangible assets   783     311     71     14     873         2,052  
Adjusted EBITDA   $ 35,777     $ 27,615     $ 15,472     $ 7,508     $ 10,967     $ (24,968 )   $ 72,371  
                             
Six Months Ended June 30, 2018
(unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 82,554  
Interest income and other                           (674 )
Interest expense                           12,827  
Income tax provision                           29,383  
Operating income   $ 67,252     $ 50,503     $ 31,672     $ 6,560     $ 17,873     $ (49,770 )   $ 124,090  
Depreciation and amortization   1,755     2,159     2,741     6,604     1,179     1,815     16,253  
Amortization of other intangible assets   1,574     710     195     76     1,767         4,322  
Adjusted EBITDA   $ 70,581     $ 53,372     $ 34,608     $ 13,240     $ 20,819     $ (47,955 )   $ 144,665  
                             
Three Months Ended June 30, 2017 (unaudited)   Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income (loss)                           $ (5,156 )
Interest income and other                           (1,592 )
Interest expense                           6,250  
Income tax provision                           527  
Operating income (loss)   $ 15,447     $ 1,183     $ 8,008     $ (1,568 )   $ (755 )   $ (22,286 )   $ 29  
Depreciation and amortization   768     1,032     1,436     3,001     546     944     7,727  
Amortization of other intangible assets   784     372     155     161     950         2,422  
Special charges   3,049     10,445     5,910     3,827     3,599     3,244     30,074  
Remeasurement of acquisition-related
  contingent consideration
                  536         536  
Adjusted EBITDA   $ 20,048     $ 13,032     $ 15,509     $ 5,421     $ 4,876     $ (18,098 )   $ 40,788  
                             
Six Months Ended June 30, 2017
(unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 8,860  
Interest income and other                           (2,197 )
Interest expense                           12,051  
Income tax provision                           8,404  
Operating income   $ 24,196     $ 13,107     $ 26,510     $ 2,872     $ 1,772     $ (41,339 )   $ 27,118  
Depreciation and amortization   1,549     2,205     2,890     6,207     1,148     2,299     16,298  
Amortization of other intangible assets   1,579     796     309     319     1,912         4,915  
Special charges   3,049     10,445     5,910     3,827     3,599     3,244     30,074  
Remeasurement of acquisition-related
  contingent consideration
                  702         702  
Adjusted EBITDA   $ 30,373     $ 26,553     $ 35,619     $ 13,225     $ 9,133     $ (35,796 )   $ 79,107  


 
FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
 
   

Segment
Revenues
  Adjusted
EBITDA
  Adjusted
EBITDA

Margin
  Utilization    Average
Billable
Rate
  Revenue-
Generating
Headcount
   (in thousands)               (at period end)
Three Months Ended June 30, 2018 (unaudited)                      
Corporate Finance & Restructuring $ 141,355     $ 35,777     25.3 %   67 %   $ 458     871  
Forensic and Litigation Consulting 133,527     27,615     20.7 %   67 %   $ 340     1,065  
Economic Consulting 133,308     15,472     11.6 %   69 %   $ 534     695  
Technology (1) 46,429     7,508     16.2 %   N/M       N/M     293  
Strategic Communications (1) 57,479     10,967     19.1 %   N/M       N/M     628  
  $ 512,098     $ 97,339     19.0 %           3,552  
Unallocated Corporate     (24,968 )                
Adjusted EBITDA     $ 72,371     14.1 %            
                       
Six Months Ended June 30, 2018
(unaudited)
                     
Corporate Finance & Restructuring $ 284,277     $ 70,581     24.8 %   69 %   $ 450     871  
Forensic and Litigation Consulting 261,566     53,372     20.4 %   67 %   $ 334     1,065  
Economic Consulting 266,417     34,608     13.0 %   70 %   $ 538     695  
Technology (1) 87,343     13,240     15.2 %   N/M       N/M     293  
Strategic Communications (1) 110,269     20,819     18.9 %   N/M       N/M     628  
  $ 1,009,872     $ 192,620     19.1 %           3,552  
Unallocated Corporate     (47,955 )                
Adjusted EBITDA     $ 144,665     14.3 %            
                       
Three Months Ended June 30, 2017 (unaudited)                      
Corporate Finance & Restructuring $ 117,487     $ 20,048     17.1 %   60 %   $ 403     881  
Forensic and Litigation Consulting 111,410     13,032     11.7 %   60 %   $ 310     1,070  
Economic Consulting 124,004     15,509     12.5 %   68 %   $ 542     652  
Technology (1) 45,566     5,421     11.9 %   N/M       N/M     301  
Strategic Communications (1) 46,248     4,876     10.5 %   N/M       N/M     659  
  $ 444,715     $ 58,886     13.2 %           3,563  
Unallocated Corporate     (18,098 )                
Adjusted EBITDA     $ 40,788     9.2 %            
                       
Six Months Ended June 30, 2017
(unaudited)
                     
Corporate Finance & Restructuring $ 223,388     $ 30,373     13.6 %   60 %   $ 390     881  
Forensic and Litigation Consulting 222,816     26,553     11.9 %   60 %   $ 320     1,070  
Economic Consulting 263,225     35,619     13.5 %   70 %   $ 548     652  
Technology (1) 91,653     13,225     14.4 %   N/M       N/M     301  
Strategic Communications (1) 89,977     9,133     10.2 %   N/M       N/M     659  
  $ 891,059     $ 114,903     12.9 %           3.563  
Unallocated Corporate     (35,796 )                
Adjusted EBITDA     $ 79,107     8.9 %            
                       
                       
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.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
  Six Months Ended
June 30,
 
  2018   2017
  (unaudited)
Operating activities      
Net income $ 82,554     $ 8,860  
Adjustments to reconcile net income to net cash used in operating activities:      
Depreciation and amortization 16,253     16,298  
Amortization and impairment of other intangible assets 4,322     4,915  
Acquisition-related contingent consideration 232     1,172  
Provision for doubtful accounts 8,710     5,971  
Non-cash share-based compensation 8,563     9,959  
Non-cash interest expense and other 993     992  
Other 798     242  
Changes in operating assets and liabilities, net of effects from acquisitions:      
     Accounts receivable, billed and unbilled (99,299 )   (78,100 )
     Notes receivable 4,214     2,241  
     Prepaid expenses and other assets (4,151 )   947  
     Accounts payable, accrued expenses and other 352     (1,887 )
     Income taxes 13,143     3,087  
     Accrued compensation (58,547 )   (64,531 )
     Billings in excess of services provided (12,722 )   7,634  
                      Net cash used in operating activities (34,585 )   (82,200 )
Investing activities      
Purchases of property and equipment (16,220 )   (13,127 )
Other 689     72  
                      Net cash used in investing activities (15,531 )   (13,055 )
Financing activities      
Borrowings (repayments) under revolving line of credit, net (25,000 )   115,000  
Deposits 2,602     3,262  
Purchase and retirement of common stock (14,220 )   (102,513 )
Net issuance of common stock under equity compensation plans 18,740     (500 )
Payments for acquisition-related contingent consideration (3,029 )   (79 )
                      Net cash provided by (used in) financing activities (20,907 )   15,170  
Effect of exchange rate changes on cash and cash equivalents (2,382 )   2,438  
Net decrease in cash and cash equivalents (73,405 )   (77,647 )
Cash and cash equivalents, beginning of period 189,961     216,158  
Cash and cash equivalents, end of period $ 116,556     $ 138,511  
 

FTI Consulting, Inc.
555 12th Street NW
Washington, DC 20004
+1.202.312.9100

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

Primary Logo

View Comments and Join the Discussion!