• FTI Consulting Reports Third Quarter 2020 Financial Results

    来源: Nasdaq GlobeNewswire / 29 十月 2020 07:30:11   America/New_York

    • Third Quarter 2020 Revenues of $622.2 Million, Up 4.9% Compared to $593.1 Million in Prior Year Quarter
    • Third Quarter 2020 EPS of $1.35, Down 15.1% Compared to $1.59 in Prior Year Quarter; Third Quarter 2020 Adjusted EPS of $1.54, Down 5.5% Compared to $1.63 in Prior Year Quarter
    • Company Revises 2020 Guidance

    WASHINGTON, Oct. 29, 2020 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended September 30, 2020.

    Third quarter 2020 revenues of $622.2 million increased $29.1 million, or 4.9%, compared to revenues of $593.1 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation ("FX"), revenues increased $23.3 million, or 3.9%, compared to the prior year quarter. The increase in revenues was driven by higher demand in the Corporate Finance & Restructuring and Economic Consulting business segments, which was partially offset by lower demand in the Forensic and Litigation Consulting and Strategic Communications business segments, as well as a decline in pass-through revenues compared to the prior year quarter. Net income of $50.2 million compared to $60.4 million in the prior year quarter. Net income included a special charge of $7.1 million and FX remeasurement losses, which were partially offset by a lower effective tax rate compared to the prior year quarter. The third quarter special charge of $7.1 million included $4.7 million of lease abandonment and other relocation costs related to the Company’s New York City office consolidation and $2.4 million of severance and employee-related costs in the Forensic and Litigation Consulting segment. Adjusted EBITDA, which excludes the special charge, of $90.9 million, or 14.6% of revenues, compared to $92.3 million, or 15.6% of revenues, in the prior year quarter. The decrease in Adjusted EBITDA was due to higher compensation, primarily related to a 15.8% increase in billable headcount, which was partially offset by higher revenues and a decline in selling, general and administrative ("SG&A") expenses compared to the prior year quarter.

    Third quarter 2020 fully diluted earnings per share ("EPS") of $1.35 compared to $1.59 in the prior year quarter. Third quarter 2020 EPS included the $7.1 million special charge, which reduced EPS by $0.14. Third quarter 2020 EPS also included $2.3 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which decreased EPS by $0.05. Third quarter 2019 EPS included $2.2 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which decreased EPS by $0.04. Third quarter 2020 Adjusted EPS of $1.54, which excludes the special charge and non-cash interest expense, compared to Adjusted EPS of $1.63 in the prior year quarter.

    Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our growth in the face of COVID-19, in the face of all the challenges it has created for our clients and for our teams working to deliver for them, is a powerful testament to the strength of this company, its relevance to clients facing major issues, and the dedication and resilience of our more than 6,200 employees across the globe.”

    Cash Position and Capital Allocation
    Net cash provided by operating activities of $111.6 million for the quarter ended September 30, 2020 compared to $131.3 million for the quarter ended September 30, 2019. The year-over-year decrease in net cash provided by operating activities was largely due to an increase in compensation, primarily related to headcount growth, and higher income taxes paid, which was partially offset by lower non-compensation-related operating expenses and slightly higher cash collections compared to the prior year quarter.

    Cash and cash equivalents of $304.7 million at September 30, 2020 compared to $258.5 million at September 30, 2019 and $304.2 million at June 30, 2020. Total debt, net of cash, of $36.6 million at September 30, 2020 compared to $57.8 million at September 30, 2019 and $47.0 million at June 30, 2020. The sequential decrease in total debt, net of cash, was primarily due to net cash provided by operating activities which exceeded cash used for share repurchases and acquisitions.

    During the quarter, the Company repurchased 749,315 shares of its common stock at an average price per share of $110.57 for a total cost of $82.9 million. As of September 30, 2020, approximately $182.4 million remained available for stock repurchases under the Company’s stock repurchase authorization.

    Third Quarter 2020 Segment Results

    Corporate Finance & Restructuring
    Revenues in the Corporate Finance & Restructuring segment increased $44.9 million, or 23.4%, to $236.6 million in the quarter compared to $191.7 million in the prior year quarter. Acquisition-related revenues contributed $8.5 million, or 4.4% of the increase, compared to the prior year quarter. The increase in revenues was primarily due to higher demand and higher realized bill rates for restructuring services compared to the prior year quarter. Adjusted Segment EBITDA of $56.2 million, or 23.8% of segment revenues, compared to $48.1 million, or 25.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to a 36.6% increase in billable headcount and higher variable compensation compared to the prior year quarter.

    Forensic and Litigation Consulting
    Revenues in the Forensic and Litigation Consulting segment decreased $23.5 million, or 16.5%, to $119.1 million in the quarter compared to $142.7 million in the prior year quarter. The decrease in revenues was primarily due to lower demand for disputes and investigations services. Adjusted Segment EBITDA of $13.6 million, or 11.4% of segment revenues, compared to $27.0 million, or 18.9% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to lower revenues with lower utilization, which was partially offset by a decline in SG&A expenses compared to the prior year quarter.

    Economic Consulting
    Revenues in the Economic Consulting segment increased $13.3 million, or 9.4%, to $155.0 million in the quarter compared to $141.7 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $11.4 million, or 8.1%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand and realized bill rates for merger and acquisition ("M&A")-related antitrust services, which was partially offset by lower realized bill rates for non-M&A-related antitrust services. Adjusted Segment EBITDA of $25.7 million, or 16.6% of segment revenues, compared to $19.4 million, or 13.7% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to a 15.2% increase in billable headcount and higher variable compensation compared to the prior year quarter.

    Technology
    Revenues in the Technology segment increased $1.5 million, or 2.6%, to $58.6 million in the quarter compared to $57.1 million in the prior year quarter. The increase in revenues was primarily due to higher demand for global cross-border investigation and litigation services. Adjusted Segment EBITDA of $11.9 million, or 20.4% of segment revenues, compared to $12.3 million, or 21.5% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter as the increase in revenues was more than offset by higher compensation, primarily related to a 13.2% increase in billable headcount.

    Strategic Communications
    Revenues in the Strategic Communications segment decreased $7.0 million, or 11.7%, to $53.0 million in the quarter compared to $60.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues decreased $8.2 million, or 13.7%, compared to the prior year quarter. The decrease in revenues was primarily due to lower demand for corporate reputation and financial communications services and a $2.3 million decline in pass-through revenues. Adjusted Segment EBITDA of $8.4 million, or 15.9% of segment revenues, compared to $12.6 million, or 21.1% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to lower revenues compared to the prior year quarter.

    2020 Guidance
    The Company is revising its full year 2020 guidance. The Company now estimates that 2020 revenues will range between $2.42 billion and $2.47 billion. This compares to the previous revenue range of $2.45 billion to $2.55 billion. The Company now estimates that 2020 EPS will range between $4.93 and $5.43. This compares to the previous EPS range of $5.32 to $5.82. This range is inclusive of the third quarter special charge of $0.14 per share and an estimated full year non-cash interest expense of $0.18 per share related to the Company's 2023 Convertible Notes. The Company now estimates that 2020 Adjusted EPS will range between $5.25 and $5.75. This compares to the previous Adjusted EPS range of $5.50 to $6.00.

    Third Quarter 2020 Conference Call
    FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2020 financial results at 9:00 a.m. Eastern Time on Thursday, October 29, 2020. 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 6,200 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 $2.35 billion in revenues during fiscal year 2019. More information can be found at www.fticonsulting.com.

    Non-GAAP Financial 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 in the United States ("GAAP"). Certain of these measures are considered "non-GAAP financial measures" under the United States Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial 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 definition of Segment Operating Income and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures presented in this press release. We define Segment Operating Income 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 for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income 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 Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total 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, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial 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 non-GAAP financial measures, considered along with corresponding GAAP financial 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 ("EPS"), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business. 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 these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.

    We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by 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 Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. 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, unaudited quarterly 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; the impact of the COVID-19 pandemic and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business 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; 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, 2019, filed with the SEC on February 25, 2020 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the SEC on April 30, 2020, 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)

      September 30, December 31,
      2020 2019
      (Unaudited)  
    Assets    
    Current assets    
    Cash and cash equivalents $304,658   $369,373  
    Accounts receivable:    
    Billed receivables 603,832   540,584  
    Unbilled receivables 482,586   418,288  
    Allowances for doubtful accounts and unbilled services (323,658)  (265,500) 
    Accounts receivable, net 762,760   693,372  
    Current portion of notes receivable 34,089   35,106  
    Prepaid expenses and other current assets 74,223   80,810  
    Total current assets 1,175,730   1,178,661  
    Property and equipment, net 95,544   93,672  
    Operating lease assets 153,818   159,777  
    Goodwill 1,223,764   1,202,767  
    Other intangible assets, net 43,652   38,432  
    Notes receivable, net 66,078   69,033  
    Other assets 35,812   40,800  
    Total assets $2,794,398   $2,783,142  
    Liabilities and Stockholders' Equity    
    Current liabilities    
    Accounts payable, accrued expenses and other $164,493   $158,936  
    Accrued compensation 397,147   416,903  
    Billings in excess of services provided 46,621   36,698  
    Total current liabilities 608,261   612,537  
    Long-term debt, net 308,454   275,609  
    Noncurrent operating lease liabilities 161,976   176,378  
    Deferred income taxes 150,572   151,352  
    Other liabilities 90,638   78,124  
    Total liabilities 1,319,901   1,294,000  
    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 — 36,028 (2020) and 37,390 (2019) 360   374  
    Additional paid-in capital 46,642   216,162  
    Retained earnings 1,568,546   1,413,453  
    Accumulated other comprehensive loss (141,051)  (140,847) 
    Total stockholders' equity 1,474,497   1,489,142  
    Total liabilities and stockholders' equity $2,794,398   $2,783,142  


    FTI CONSULTING, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (in thousands, except per share data)

     Three Months Ended September 30,
     
     2020 2019
     (Unaudited)
    Revenues$622,249   $593,106  
    Operating expenses   
    Direct cost of revenues417,179   380,892  
    Selling, general and administrative expenses122,102   127,951  
    Special charges7,103     
    Amortization of other intangible assets2,795   2,125  
     549,179   510,968  
    Operating income73,070   82,138  
    Other income (expense)   
    Interest income and other(3,340)  2,973  
    Interest expense(5,151)  (4,832) 
     (8,491)  (1,859) 
    Income before income tax provision64,579   80,279  
    Income tax provision14,407   19,857  
    Net income$50,172   $60,422  
    Earnings per common share ― basic$1.41   $1.65  
    Weighted average common shares outstanding ― basic35,639   36,617  
    Earnings per common share ― diluted$1.35   $1.59  
    Weighted average common shares outstanding ― diluted37,086   37,938  
    Other comprehensive income (loss), net of tax   
    Foreign currency translation adjustments, net of tax expense of $0$21,330   $(16,633) 
    Total other comprehensive income (loss), net of tax21,330   (16,633) 
    Comprehensive income$71,502   $43,789  


    FTI CONSULTING, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (in thousands, except per share data)

     Nine Months Ended
    September 30,
     
     2020 2019
     (Unaudited)
    Revenues$1,834,694   $1,750,499  
    Operating expenses   
    Direct cost of revenues1,232,437   1,116,224  
    Selling, general and administrative expenses375,989   371,042  
    Special charges7,103     
    Amortization of other intangible assets7,440   5,838  
     1,622,969   1,493,104  
    Operating income211,725   257,395  
    Other income (expense)   
    Interest income and other3,879   5,741  
    Interest expense(15,169)  (14,371) 
     (11,290)  (8,630) 
    Income before income tax provision200,435   248,765  
    Income tax provision45,342   61,100  
    Net income$155,093   $187,665  
    Earnings per common share ― basic$4.30   $5.09  
    Weighted average common shares outstanding ― basic36,073   36,851  
    Earnings per common share ― diluted$4.11   $4.92  
    Weighted average common shares outstanding ― diluted37,708   38,107  
    Other comprehensive loss, net of tax   
    Foreign currency translation adjustments, net of tax expense of $0$(204)  $(16,225) 
    Total other comprehensive loss, net of tax(204)  (16,225) 
    Comprehensive income$154,889   $171,440  


    FTI CONSULTING, INC.
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    (in thousands, except per share data)

      Three Months Ended September 30, Nine Months Ended September 30,
      2020 2019 2020 2019
      (Unaudited) (Unaudited)
    Net income $50,172   $60,422   $155,093   $187,665  
    Add back:        
    Special charges 7,103      7,103     
    Tax impact of special charges (1,847)     (1,847)    
    Non-cash interest expense on convertible notes 2,286   2,166   6,766   6,411  
    Tax impact of non-cash interest expense on 
      convertible notes
     (595)  (563)  (1,760)  (1,666) 
    Tax impact of gain on sale of business (1)          (2,097) 
    Adjusted Net Income $57,119   $62,025   $165,355   $190,313  
    Earnings per common share — diluted $1.35   $1.59   $4.11   $4.92  
    Add back:        
    Special charges 0.19      0.19     
    Tax impact of special charges (0.05)     (0.05)    
    Non-cash interest expense on convertible notes 0.06   0.06   0.18   0.17  
    Tax impact of non-cash interest expense on
      convertible notes
     (0.01)  (0.02)  (0.04)  (0.04) 
    Tax impact of gain on sale of business (1)          (0.06) 
    Adjusted earnings per common share — diluted $1.54   $1.63   $4.39   $4.99  
    Weighted average number of common shares
      outstanding ― diluted
     37,086   37,938   37,708   38,107  


     

    (1) For the nine months ended September 30, 2019, represents a discrete tax adjustment resulting from a change in estimate related to the accounting for the sale of our Ringtail e-discovery software and related business.

    FTI CONSULTING, INC.
    RECONCILIATION OF EPS GUIDANCE TO ADJUSTED EPS GUIDANCE

      Year Ended December 31, 2020
      Low High
    Guidance on estimated earnings per common share diluted (GAAP) (1) $4.93  $5.43 
    Special charges, net of tax 0.14  0.14 
    Non-cash interest expense on convertible notes, net of tax 0.18  0.18 
    Guidance on estimated adjusted earnings per common share (non-GAAP) (1) $5.25  $5.75 


     

    (1) The forward-looking guidance on estimated 2020 EPS and Adjusted EPS does not reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to the future impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, or gain or loss on sale of a business as these items are dependent on future events that are uncertain and difficult to predict. The forward-looking guidance excludes any shares of common stock potentially issuable upon conversion of the 2023 Convertible Notes from the calculation of EPS.

    FTI CONSULTING, INC.
    RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
    (in thousands)


    Three Months Ended September 30, 2020
    (Unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology  Strategic Communications Unallocated Corporate Total
    Net income             $50,172 
    Interest income and other             3,340 
    Interest expense             5,151 
    Income tax provision             14,407 
    Operating income  $52,372  $8,729  $24,304  $8,621  $5,105  $(26,061) $73,070 
    Depreciation and amortization 1,109  1,207  1,337  3,041  542  713  7,949 
    Amortization of other intangible assets 1,873  171  44  1  706    2,795 
    Special charges 861  3,484  35  276  2,074  373  7,103 
    Adjusted EBITDA $56,215  $13,591  $25,720  $11,939  $8,427  $(24,975) $90,917 
                   
    Nine Months Ended September 30, 2020
    (Unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology  Strategic Communications Unallocated Corporate Total
    Net income              $155,093 
    Interest income and other             (3,879)
    Interest expense             15,169 
    Income tax provision             45,342 
    Operating income  $172,847  $17,853  $55,916  $23,642  $21,395  $(79,928) $211,725 
    Depreciation and amortization 3,126  3,788  4,040  8,939  1,680  2,083  23,656 
    Amortization of other intangible assets 4,591  627  133  1  2,088    7,440 
    Special charges 861  3,484  35  276  2,074  373  7,103 
    Adjusted EBITDA  $181,425  $25,752  $60,124  $32,858  $27,237  $(77,472) $249,924 


    Three Months Ended September 30, 2019
    (Unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $60,422 
    Interest income and other             (2,973)
    Interest expense             4,832 
    Income tax provision             19,857 
    Operating income $46,007  $25,534  $17,943  $9,094  $11,343  $(27,783) $82,138 
    Depreciation and amortization 964  1,188  1,426  3,192  619  691  8,080 
    Amortization of other intangible assets 1,113  286  44    682    2,125 
    Adjusted EBITDA $48,084  $27,008  $19,413  $12,286  $12,644  $(27,092) $92,343 
                   
    Nine Months Ended September 30, 2019
    (Unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $187,665 
    Interest income and other             (5,741)
    Interest expense             14,371 
    Income tax provision             61,100 
    Operating income $130,470  $82,753  $62,179  $30,080  $30,691  $(78,778) $257,395 
    Depreciation and amortization 2,821  3,448  4,454  7,804  1,782  2,074  22,383 
    Amortization of other intangible assets 2,646  865  133    2,194    5,838 
    Adjusted EBITDA $135,937  $87,066  $66,766  $37,884  $34,667  $(76,704) $285,616 



    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 September 30, 2020 (Unaudited)           
    Corporate Finance & Restructuring$236,615  $56,215  23.8% 64% $460  1,608 
    Forensic and Litigation Consulting119,104  13,591  11.4% 48% $337  1,371 
    Economic Consulting154,978  25,720  16.6% 66% $502  880 
    Technology (1)58,585  11,939  20.4% N/M N/M 394 
    Strategic Communications (1)52,967  8,427  15.9% N/M N/M 766 
     $622,249  $115,892  18.6%     5,019 
    Unallocated Corporate  (24,975)        
    Adjusted EBITDA   $90,917  14.6%      
                
    Nine Months Ended September 30, 2020
    (Unaudited)
               
    Corporate Finance & Restructuring$690,375  $181,425  26.3% 68% $468  1,608 
    Forensic and Litigation Consulting373,082  25,752  6.9% 50% $333  1,371 
    Economic Consulting438,609  60,124  13.7% 68% $482  880 
    Technology (1)164,392  32,858  20.0% N/M N/M 394 
    Strategic Communications (1)168,236  27,237  16.2% N/M N/M 766 
     $1,834,694  $327,396  17.8%     5,019 
    Unallocated Corporate  (77,472)        
    Adjusted EBITDA   $249,924  13.6%      
                
    Three Months Ended September 30, 2019 (Unaudited)           
    Corporate Finance & Restructuring$191,698  $48,084  25.1% 70% $449  1,177 
    Forensic and Litigation Consulting142,651  27,008  18.9% 61% $336  1,326 
    Economic Consulting141,715  19,413  13.7% 70% $512  764 
    Technology (1)57,083  12,286  21.5% N/M N/M 348 
    Strategic Communications (1)59,959  12,644  21.1% N/M N/M 719 
     $593,106  $119,435  20.1%     4,334 
    Unallocated Corporate  (27,092)        
    Adjusted EBITDA   $92,343  15.6%      
                
    Nine Months Ended September 30, 2019
    (Unaudited)
               
    Corporate Finance & Restructuring$542,667  $135,937  25.0% 70% $451  1,177 
    Forensic and Litigation Consulting427,518  87,066  20.4% 64% $336  1,326 
    Economic Consulting439,488  66,766  15.2% 76% $500  764 
    Technology (1)164,051  37,884  23.1% N/M N/M 348 
    Strategic Communications (1)176,775  34,667  19.6% N/M N/M 719 
     $1,750,499  $362,320  20.7%     4,334 
    Unallocated Corporate  (76,704)        
    Adjusted EBITDA   $285,616  16.3%      
                


     

    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)

     Nine Months Ended
    September 30,
     
     2020 2019
     (Unaudited)
    Operating activities   
    Net income$155,093   $187,665  
    Adjustments to reconcile net income to net cash provided by operating
       activities:
       
    Depreciation and amortization23,655   22,384  
    Amortization and impairment of other intangible assets7,440   5,838  
    Acquisition-related contingent consideration4,652   717  
    Provision for doubtful accounts15,608   13,552  
    Share-based compensation17,576   14,060  
    Amortization of debt discount and issuance costs9,028   8,666  
    Deferred income taxes(1,658)  4,084  
    Other45   248  
    Changes in operating assets and liabilities, net of effects from acquisitions:   
    Accounts receivable, billed and unbilled(86,491)  (191,644) 
    Notes receivable3,346   2,521  
    Prepaid expenses and other assets8,294   (5,817) 
    Accounts payable, accrued expenses and other7,713   (7,332) 
    Income taxes(14,635)  26,693  
    Accrued compensation(18,985)  5,156  
    Billings in excess of services provided10,296   (9,925) 
                              Net cash provided by operating activities140,977   76,866  
    Investing activities   
    Payments for acquisition of businesses, net of cash received(25,271)  (18,791) 
    Purchases of property and equipment(25,663)  (27,026) 
    Other558   55  
                              Net cash used in investing activities(50,376)  (45,762) 
    Financing activities   
    Borrowings under revolving line of credit149,500   45,000  
    Repayments under revolving line of credit(124,500)  (45,000) 
    Purchase and retirement of common stock(175,832)  (77,949) 
    Net issuance of common stock under equity compensation plans(5,195)  3,176  
    Payments for business acquisition liabilities(3,948)  (2,282) 
    Deposits and other4,561   535  
                              Net cash used in financing activities(155,414)  (76,520) 
    Effect of exchange rate changes on cash and cash equivalents98   (8,183) 
    Net decrease in cash and cash equivalents(64,715)  (53,599) 
    Cash and cash equivalents, beginning of period369,373   312,069  
    Cash and cash equivalents, end of period$304,658   $258,470  


    FTI CONSULTING, INC.
    RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
    (in thousands)

     Three Months Ended September 30, Nine Months Ended September 30,
     2020 2019 2020 2019
            
     (in thousands) (in thousands)
    Net cash provided by operating activities$111,563   $131,304   $140,977   $76,866  
    Purchases of property and equipment(11,764)  (6,365)  (25,663)  (27,026) 
    Free Cash Flow$99,799   $124,939   $115,314   $49,840  
    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

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