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FTI Consulting, Inc. Reports Third Quarter 2008 Results
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- Revenues Increase 29% to $325.5 Million; Organic Growth 14%
- Net Income Increases 20% to $27.5 Million, $0.51 Per Share
- Technology IPO Delayed Due to Market Conditions
- Guidance Revised
WEST PALM BEACH, Fla., Nov. 5 /PRNewswire-FirstCall/ -- FTI Consulting (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the third quarter and nine months ended September 30, 2008.
Third Quarter Results
For the third quarter of 2008, revenue increased 28.5 percent to $325.5
million compared to $253.3 million in the prior year period. Net income
increased 20 percent to $27.5 million compared to $23.0 million in the prior
year period. Diluted earnings per common share increased to $0.51 compared to
$0.50 in the prior year period despite a 19.4 percent increase in weighted
average shares outstanding. Operating income before depreciation and
amortization of intangible assets (plus non-operating litigation settlements)
("EBITDA") increased 16.7 percent to $66.0 million compared to $56.6 million
in the prior year period. The EBITDA margin was 20.3 percent of revenue
compared to 22.3 percent of revenue in the prior year period.
Commenting on the quarter, Jack Dunn, FTI's president and chief executive
officer, said, "In one of the most volatile and tumultuous periods in business
history, we generated 29 percent revenue growth. We achieved 14 percent
organic revenue growth and all our segments experienced positive year over
year revenue comparisons. Net income increased by 20 percent and our financial
condition and liquidity were strong. Our growth was spearheaded by our
industry-leading Corporate Finance/Restructuring segment, as it experienced
strong and increasing demand from the broadening range of industries
contending with the impact of the global credit crisis. We also saw excellent
performance from Economic Consulting, which was active across the board with
strategic M&A assignments, industry consolidations, antitrust litigation,
stockholder class actions, contractual disputes and securities cases, many of
which are arising from the financial crisis."
Mr. Dunn continued, "While FTI generally profits from market change and
volatility, the unprecedented volatility of the capital markets and the
breakdown of confidence in the financial system caused a temporary but sharp
slowdown in business decision-making and regulatory activity, even for mission
critical initiatives, as organizations attempted to evaluate the effect of the
accelerating credit crisis on their operations. This environment had a
significant negative effect on our results in the quarter, exacerbated by the
bankruptcy and/or merger of some of our significant financial services clients
causing us to postpone or in some cases cancel projects. By mid-September, our
business started to rebound as our professionals were called upon to help
provide advice and direction out of this global financial crisis. This
momentum is continuing and we believe the ongoing issues and problems facing
companies around the world provide the foundation for improved results
beginning in the fourth quarter."
Despite this difficult environment, the Company generated $52 million of operating cash flow during the third quarter compared to $32 million in the prior year period. Cash balances at the end of the quarter totaled $146 million with total debt outstanding of $568.5 million and no amounts outstanding under the Company's line of credit.
As of September 30, 2008, total headcount was 3,405, of which 2,664
represented revenue-generating professionals. Utilization of
revenue-generating personnel and average rate per hour metrics are presented
in the accompanying tables for those business segments for which the metrics
continue to be relevant.
Third Quarter Business Segment Results
Corporate Finance/Restructuring
Revenue in the Corporate Finance/Restructuring segment increased 46.0
percent to $91.8 million from $62.9 million in the prior year period. Segment
EBITDA increased 44.1 percent to $25.5 million, or 27.7 percent of segment
revenue, compared to $17.7 million, or 28.1 percent of segment revenue, in the
prior year period. Organic growth for the segment's core bankruptcy and
restructuring related services was strong at 29.3 percent. Demand came
primarily from industries impacted by the global credit crisis such as
financial services, retail, real estate, homebuilding, construction,
automotive and manufacturing. The Corporate Finance practice in the U.K.,
which was newly formed last year, continued to grow rapidly and has increased
headcount in response to strong demand for restructuring services. The core
restructuring business saw margins expand 50 basis points even with the ramp
up time for approximately 60 new hires who were in the process of being
trained and deployed on engagements during the quarter. The segment's overall
margin was reduced slightly by its recently acquired real estate advisory
business, the Schonbraun McCann Group ("SMG"). SMG faced a challenging
operating environment, as evidenced by a 60 percent decline in commercial real
estate transactions in the New York market, but still generated an EBITDA
margin in excess of 20 percent.
Forensic and Litigation Consulting
Revenue in the Forensic and Litigation Consulting segment increased 20.4
percent to $65.8 million from $54.6 million in the prior year period. Segment
EBITDA increased 2.7 percent to $14.9 million, or 22.7 percent of segment
revenue, from $14.5 million, or 26.6 percent of segment revenue, in the prior
year period. Revenue in the quarter included a contribution of $10.3 million
from several acquisitions that closed earlier in the year as well as modest
organic growth in the core business. Overall demand and utilization were soft
during the quarter reflecting the continued lack of large cases in the U.S.
investigative and damages arenas. Many of the big cases that have occurred as
a result of the recent financial turmoil are still in the strategic phase and
have yet to enter the next phase involving forensic accounting. Demand was
strong in regulated industries such as insurance, healthcare and
pharmaceuticals, and in the segment's areas of domain expertise in
construction and intellectual property. In our experience, the periods
immediately prior to Presidential elections have typically seen such soft
demand.
Economic Consulting
Revenue in the Economic Consulting segment increased 22.9 percent to $56.4
million from $45.9 million in the prior year period. All of this growth was
organic. Segment EBITDA increased 29.7 percent to $15.8 million, or 27.9
percent of segment revenue, from $12.1 million, or 26.5 percent of segment
revenue, in the prior year period. Growth in the quarter was driven by the
continuing demand for strategic M&A advice plus a significant number of
dispute and litigation cases arising from the credit crisis. Momentum has
begun to build for stockholder class actions and other economic engagements
arising out of the turmoil in the financial markets, and for traditional
antitrust litigation in areas such as price fixing and other types of
collusive behavior as companies seek to mitigate pressures from an
increasingly hostile economic climate.
Strategic Communications
Revenue in the Strategic Communications segment increased 24.3 percent to
$56.1 million from $45.1 million in the prior year period. Segment EBITDA
increased 12.4 percent to $13.2 million, or 23.5 percent of segment revenue,
from $11.8 million, or 26.1 percent of revenue, in the prior year period. The
revenue increase was principally due to the contribution of $7.9 million from
businesses acquired over the past year as well as organic growth, partially
offset by the estimated negative impact of $1.5 million of foreign currency
translation adjustments, which was primarily due to the weakening British
Pound against the U.S. Dollar. Excluding the estimated impacts of foreign
currency translation in the quarter, revenues would have increased by 27
percent compared to the prior year period. The segment's geographic and
practice diversification over the past several years has reduced its
dependence on capital markets activity in the core U.K. and U.S. markets.
Therefore, while equity capital markets and M&A activity was significantly
lower than in the prior year period, the segment experienced good growth in
financial crisis management assignments, increased revenue from retained
clients in the U.K. and U.S., and continued strong performances in Asia,
Australia and the Middle East. Margins were affected by the lower proportion
of highly profitable M&A activity in the revenue mix and a charge related to a
potential settlement of a claim arising prior to the acquisition of the
segment.
Technology
Revenue in the Technology segment in the third quarter increased 23.6
percent to $55.4 million from $44.8 million in the prior year period. Segment
EBITDA was $15.4 million, or 27.8 percent of segment revenue, compared to
$18.6 million, or 41.5 percent of segment revenue, in the prior year period.
Segment revenue growth in the quarter was driven principally by contributions
of $8.6 million from acquired businesses plus organic growth from large
matters in the pharmaceutical and financial services industries. During the
quarter the segment lost several large prospective engagements due to
bankruptcy and mergers, which resulted in lower than expected revenues for the
segment. The decrease in the EBITDA margin was caused by a significant
increase in selling, general and administrative expenses and the impact of
more aggressive pricing of the segment's Software-as-a-Service offering.
Increased SG&A was related to significant planned investments in research and
development to combine the Ringtail and Attenex platforms. We would expect to
continue such investments for the remainder of this year and into early 2009,
culminating with the launch of a new combined offering during the first
quarter. In addition, the increase in SG&A expense was caused by the hiring of
additional sales and marketing personnel and development activities in
anticipation of the segment becoming an independent, stand-alone company.
Finally, the segment incurred certain costs associated with the acquisition
and integration of Attenex. In the third quarter the Company also reclassified
$4.9 million of expenses into SG&A which had previously been included in
direct costs for the first half of 2008. The combination of the two leading
technology offerings, Ringtail and Attenex, and our associated research and
development investment during the quarter to integrate these offerings,
provides the basis for vastly enhanced, cost effective client service.
2008 Guidance Update
Based on current market conditions, the Company believes revenue for the year will be between $1.275 and $1.3 billion and diluted earnings per share will be between $2.30 and $2.35.
Update on Initial Public Offering of Technology Segment
Due to the unprecedented decline and instability of the equity capital
markets, the Company also announced that it will delay its filing for an
initial public offering ("IPO") of its Technology business until some time in
2009, market conditions permitting. The Company will continue to evaluate the
advisability and the timing of filing of an IPO and the timing of the
previously announced spin-off or split-off of that business over the upcoming
months.
A registration statement relating to the common shares to be sold in the
IPO has not been filed with the Securities and Exchange Commission or become
effective. The common shares may not be sold and offers may not be accepted
prior to the time the registration statement becomes effective.
This release does not constitute an offer to sell or the solicitation of
any offer to buy, and there shall not be any sale of the common shares in any
state in which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such state.
FTI can give no assurances that the aforementioned IPO or any related transactions will be consummated.
Third Quarter Conference Call
FTI will hold a conference call for analysts and investors to discuss third quarter financial results at 5:00 p.m. Eastern time on Wednesday, November 5, 2008. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website, www.fticonsulting.com.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to
helping organizations protect and enhance enterprise value in an increasingly
complex legal, regulatory and economic environment. With more than 3,000
employees located in most major business centers in the world, we work closely
with clients every day to anticipate, illuminate, and overcome complex
business challenges in areas such as investigations, litigation, mergers and
acquisitions, regulatory issues, reputation management and restructuring. More
information can be found at www.fticonsulting.com.
Use of Non-GAAP Measure
Note: We define EBITDA as operating income before depreciation and
amortization of intangible assets plus litigation settlements. We use EBITDA
in evaluating financial performance. Although EBITDA is not a measure of
financial condition or performance determined in accordance with GAAP we
believe that it can be a useful operating performance measure for evaluating
our results of operation as compared from period to period and as compared to
our competitors. EBITDA is a common alternative measure of operating
performance used by investors, financial analysts and rating agencies to value
and compare the financial performance of companies in our industry. We use
EBITDA to evaluate and compare the operating performance of our segments and
it is one of the primary measures used to determine employee bonuses. We also
use EBITDA to value the businesses we acquire or anticipate acquiring.
Reconciliations of EBITDA to Net Income and Segment EBITDA to segment
operating profit are included in the accompanying tables to today's press
release. EBITDA is not defined in the same manner by all companies and may not
be comparable to other similarly titled measures of other companies unless the
definition is the same. This non-GAAP measure should be considered in addition
to, but not as a substitute for or superior to, the information contained in
our statements of income.
Safe Harbor Statement
This press release includes "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934 that involve
uncertainties and risks. Forward-looking statements include statements
concerning our plans, objectives, goals, strategies, future events, future
revenues, future results and performance, expectations, plans or intentions
relating to acquisitions and other matters, business trends and other
information that is not historical, including statements regarding estimates
of our future financial results. When used in this press release, words such
as "estimates," "expects," "anticipates," "projects," "plans," "intends,"
"believes," "forecasts" and variations of such words or similar expressions
are intended to identify forward-looking statements. All forward-looking
statements, including, without limitation, estimates of our future financial
results, are based upon our expectations at the time we make them and various
assumptions. Our expectations, beliefs and projections are expressed in good
faith, and we believe there is a reasonable basis for them. However, there can
be no assurance that management's expectations, beliefs and projections will
result or be achieved or that actual results will not differ from
expectations. The Company has experienced fluctuating revenue, operating
income and cash flow in some prior periods and expects this will occur from
time to time in the future. As a result of these possible fluctuations, the
Company's actual results may differ from our estimates. Further, preliminary
results are subject to normal year-end adjustments. Other factors that could
cause such differences include the pace and timing of the consummation and
integration of past and future acquisitions, the Company's ability to realize
cost savings and efficiencies, competitive and general economic conditions,
retention of staff and clients and other risks described under the heading
"Item 1A. Risk Factors" in the Company's most recent Form 10-K and in the
Company's other filings with the Securities and Exchange Commission. 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.
FOR FURTHER INFORMATION:
AT FTI CONSULTING: AT FD:
Jack Dunn, President & CEO Investors: Gordon McCoun
(410) 951-4800 Media: Andy Maas
(212) 850-5600
FINANCIAL TABLES FOLLOW
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(in thousands, except per share data)
-------------------------------------
Nine Months Ended
September 30,
--------------
2008 2007
---- ----
(unaudited)
Revenues $970,269 $720,751
-------- -------- Operating expenses
Direct cost of revenues 535,201 396,661
Selling, general and administrative expense 241,853 185,275
Amortization of other intangible assets 13,019 7,778
------ -----
790,073 589,714
------- -------
Operating income 180,196 131,037
------- ------- Other income (expense)
Interest income 6,176 3,991
Interest expense and other (29,631)
(33,998)
Litigation settlement losses (711) (872)
---- ----
(24,166) (30,879)
------- -------
Income before income tax provision 156,030 100,158
Income tax provision 61,788 38,831
------ ------
Net income $94,242 $61,327
======= =======
Earnings per common share - basic $1.92 $1.47
===== =====
Weighted average common shares outstanding - basic 49,009 41,690
====== ======
Earnings per common share - diluted $1.76 $1.39
===== =====
Weighted average common shares outstanding - diluted 53,640 44,024
====== ======
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(in thousands, except per share data)
-------------------------------------
Three Months Ended
September 30,
--------------
2008 2007
---- ----
(unaudited)
Revenues $325,497 $253,334
-------- --------
Operating expenses
Direct cost of revenues 174,514 139,131
Selling, general and administrative expense 91,508 63,007
Amortization of other intangible assets 5,664 2,293
----- -----
271,686 204,431
------- -------
Operating income 53,811 48,903
------ ------
Other income (expense)
Interest income 1,229 1,671
Interest expense and other (9,163)
(12,297)
Litigation settlement (losses) gains, net (275) 36
---- --
(8,209) (10,590)
------ -------
Income before income tax provision 45,602 38,313
Income tax provision 18,059 15,330
------ ------
Net income $27,543 $22,983
======= =======
Earnings per common share - basic $0.56 $0.55
===== =====
Weighted average common shares outstanding - basic 49,541 41,992
====== ======
Earnings per common share - diluted $0.51 $0.50
===== =====
Weighted average common shares outstanding - diluted 54,460 45,595
====== ======
FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
(Unaudited)
Utili Average Revenue-
EBITDA -zation Billable Generating
Revenues (1) Margin (2) Rate (2) Headcount
-------- ------- ------ ----- -------- ---------
(in thousands)
Three Months Ended
September 30, 2008
Technology $55,385 $15,371 27.8% N/M N/M 498
Corporate
Finance/
Restructuring 91,818 25,463 27.7% 72% $438 646
Economic
Consulting 56,409 15,751 27.9% 86% $444 253
Strategic
Communications 56,099 13,205 23.5% N/M N/M 599
Forensic and
Litigation
Consulting 65,786 14,932 22.7% 68% $340 668
$325,497 84,722 26.0% 2,664
Corporate (18,709)
EBITDA (1) $66,013 20.3%
Nine Months Ended
September 30, 2008
Technology $168,195 $59,906 35.6% N/M N/M 498
Corporate
Finance/
Restructuring 267,224 76,997 28.8% 76% $447 646
Economic
Consulting 166,589 43,054 25.8% 86% $447 253
Strategic
Communications 172,910 42,312 24.5% N/M N/M 599
Forensic and
Litigation
Consulting 195,351 45,305 23.2% 72% $340 668
$970,269 267,574 27.6% 2,664
Corporate (55,971)
EBITDA (1) $211,603 21.8%
Three Months Ended
September 30, 2007
Technology $44,820 $18,579 41.5% N/M N/M 318
Corporate
Finance/
Restructuring 62,874 17,670 28.1% 76% $406 376
Economic
Consulting 45,887 12,142 26.5% 87% $410 227
Strategic
Communications 45,117 11,753 26.1% N/M N/M 464
Forensic and
Litigation
Consulting 54,636 14,543 26.6% 77% $315 424
$253,334 74,687 29.5% 1,809
Corporate (18,095)
EBITDA (1) $56,592 22.3%
Nine Months Ended
September 30, 2007
Technology $115,302 $43,364 37.6% N/M N/M 318
Corporate
Finance/
Restructuring 187,981 49,259 26.2% 80% $420 376
Economic
Consulting 129,867 36,309 28.0% 87% $415 227
Strategic
Communications 125,343 32,679 26.1% N/M N/M 464
Forensic and
Litigation
Consulting 162,258 41,912 25.8% 77% $319 424
$720,751 203,523 28.2% 1,809
Corporate (51,836)
EBITDA (1) $151,687 21.0%
(1) We define EBITDA as operating income before depreciation and
amortization of intangible assets plus non-operating litigation settlements.
Although EBITDA is not a measure of financial condition or performance
determined in accordance with accounting principles generally accepted in the
United States (GAAP), we believe that it can be a useful operating performance
measure for evaluating our results of operation as compared from period to
period and as compared to our competitors. EBITDA is a common alternative
performance measure used by investors, financial analysts and credit rating
agencies to value and compare the financial performance of companies within
our industry. We use EBITDA to evaluate and compare the operating performance
of our segments and it is one of the primary measures used to determine
employee bonuses. We also use EBITDA to value the businesses we acquire or
anticipate acquiring. EBITDA is not defined in the same manner by all
companies and may not be comparable to other similarly titled measures of
other companies unless the definition is the same. This non-GAAP measure
should be considered in addition to, but not as a substitute for or superior
to, the information contained in our statements of income. See also our
reconciliation of Non-GAAP financial measures.
(2) The majority of the Technology and Strategic Communications segments' revenues are not generated on an hourly basis. Accordingly,
utilization and average billable rate metrics are not presented as they are not meaningful. Utilization where presented is based on a 2,032 hour year.
RECONCILIATION OF OPERATING INCOME AND NET INCOME TO ADJUSTED EARNINGS
BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION AND SPECIAL CHARGES
------------------------------------------------------------------
(unaudited)
-----------
Three Months Ended
September 30, 2008 Corporate Economic Strategic
Technology Finance Consulting Communications
---------- --------- ----------- ---------
Net income
Interest income
Interest expense
and other
Litigation settle-
ment losses
Income tax
provision
Operating income $10,519 $23,904 $14,798 $10,963
Depreciation 2,752 693 382 955
Amortization
of other
intangible
assets 2,100 866 571 1,337
Litigation
settlement
losses - - - (50)
--- --- --- ---
EBITDA (1) 15,371 25,463 15,751 13,205
====== ====== ====== ======
Nine Months Ended
September 30, 2008
Net income (loss)
Interest income
Interest expense
and other
Litigation settle-
ment losses
Income tax
provision
Operating income $49,656 $72,745 $40,096 $36,341
Depreciation 7,560 1,880 1,247 2,313
Amortization
of other
intangible
assets 2,925 2,372 1,711 3,909
Litigation settle-
ment losses (235) - - (251)
---- - - ----
EBITDA (1) 59,906 76,997 43,054 42,312
====== ====== ====== ======
Three Months Ended
September 30, 2007
Net income
Interest income
Interest expense
and other
Litigation settle-
ment losses
Income tax
provision
Operating income $16,424 $17,186 $11,076 $10,188
Depreciation 1,832 443 498 704
Amortization
of other
intangible
assets 323 41 568 863
Litigation
settlement
gains - - - (2)
--- --- --- ---
EBITDA (1) $18,579 $17,670 $12,142 $11,753
======= ======= ======= =======
Nine Months Ended
September 30, 2007
Net income (loss)
Interest income
Interest expense
and other
Litigation settle
-ment losses
Income tax
provision
Operating income $37,752 $48,576 $32,154 $28,627
Depreciation 4,655 1,098 1,280 1,722
Amortization
of other
intangible
assets 957 122 2,875 2,337
Litigation
settlement
losses - (537) - (7)
--- ---- --- ---
EBITDA (1) $43,364 $49,259 $36,309 $32,679
======= ======= ======= =======
Three Months Ended Forensic and
September 30, 2008 Litigation
Consulting Corp HQ Total
------------ ------- -----
Net income $27,543
Interest income
(1,229)
Interest expense and other
9,163
Litigation settlement losses 275
Income tax provision 18,059
------
Operating income $13,521 $(19,894) 53,811
Depreciation 621 1,410 6,813
Amortization
of other
intangible
assets 790 - 5,664
Litigation
settlement
losses - (225) (275)
---- ---- ----
EBITDA (1) 14,932 (18,709) 66,013
====== ======= ======
Nine Months Ended
September 30, 2008
Net income (loss) $94,242
Interest income (6,176)
Interest expense and other
29,631
Litigation settlement losses 711
Income tax provision 61,788
------
Operating income $41,318 $(59,960) 180,196
Depreciation 1,885 4,214 19,099
Amortization of other
intangible assets 2,102 - 13,019
Litigation settlement losses - (225) (711)
--- ---- ----
EBITDA (1) 45,305 (55,971) 211,603
====== ======= =======
Three Months Ended
September 30, 2007
Net income $22,983
Interest income (1,671)
Interest expense and other
12,297
Litigation settlement losses (36)
Income tax provision 15,330
------
Operating income $13,393 $(19,364) 48,903
Depreciation 652 1,231 5,360
Amortization of other
intangible assets 498 - 2,293
Litigation settlement gains - 38 36
--- -- --
EBITDA (1) $14,543 $(18,095) $56,592
======= ======== =======
Nine Months Ended
September 30, 2007
Net income (loss) $61,327
Interest income (3,991)
Interest expense and other
33,998
Litigation settlement losses 872
Income tax provision 38,831
------
Operating income $38,990 $(55,062) 131,037
Depreciation 1,610 3,379 13,744
Amortization of other
intangible assets 1,487 - 7,778
Litigation settlement losses (175) (153) (872)
---- ---- ----
EBITDA (1) $41,912 $(51,836) $151,687
======= ======== ========
1. We define EBITDA as operating income before depreciation and
amortization of intangible assets plus non-operating litigation
settlements. Although EBITDA is not a measure of financial condition or
performance determined in accordance with accounting principles
generally accepted in the United States (GAAP), we believe that it can
be a useful operating performance measure for evaluating our results of
operation as compared from period to period and as compared to our
competitors. EBITDA is a common alternative performance measure used
by investors, financial analysts and credit rating agencies to value
and compare the financial performance of companies within our industry.
We use EBITDA to evaluate and compare the operating performance of our
segments and it is one of the primary measures used to determine
employee bonuses. We also use EBITDA to value the businesses we acquire
or anticipate acquiring. EBITDA is not defined in the same manner by
all companies and may not be comparable to other similarly titled
measures of other companies unless the definition is the same. This
non-GAAP measure should be considered in addition to, but not as a
substitute for or superior to, the information contained in our
statements of income.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(in thousands)
--------------
Nine Months Ended
September 30,
--------------
2008 2007
---- ----
Operating activities (unaudited)
Net income $94,242 $61,327
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 19,099 13,744
Amortization of other intangible assets 13,019 7,778
Provision for doubtful accounts 13,107 7,125
Non-cash share-based compensation 21,392 16,499
Excess tax benefits from share-based
compensation (5,653) (4,352)
Non-cash interest expense 2,269 2,386
Other 785 (451)
Changes in operating assets and liabilities,
net of effects from acquisitions:
Accounts receivable, billed and unbilled (81,898) (97,971)
Notes receivable (6,322) (23,163)
Prepaid expenses and other assets (8,319) (1,785)
Accounts payable, accrued expenses and other (941) 24,099
Accrued special charges (3,441) (8,076)
Income taxes 22,802 (2,083)
Accrued compensation 27,264 15,257
Billings in excess of services provided 1,279 1,511
----- -----
Net cash provided by
operating activities 108,684 11,845
------- ------
Investing activities
Payments for acquisition of businesses,
including contingent payments and
acquisition costs, net of cash received (315,638) (25,164)
Purchases of property and equipment (24,385) (27,912)
Other 991 101
--- ---
Net cash used in investing
activities (339,032) (52,975)
-------- -------
Financing activities
Borrowings under revolving line of credit - 25,000
Payments of revolving line of credit - (25,000)
Payments of short-term borrowings of acquired
subsidiary (2,275) -
Payments of long-term debt (7,511) (149)
Purchase and retirement of common stock - (18,116)
Net issuance of common stock under equity
compensation plans 22,476 24,830
Excess tax benefits from share-based
compensation 5,653 4,352
Other (171) -
---- ----
Net cash provided by
financing activities 18,172 10,917
------ ------
Effect of exchange rate changes and fair
value adjustments on cash and cash
equivalents (2,110) 534
------ ---
Net decrease in cash and cash equivalents (214,286) (29,679)
Cash and cash equivalents, beginning of period 360,463 91,923
------- ------
Cash and cash equivalents, end of period $146,177 $62,244
======== =======
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
----------------------------------------
September 30, December 31,
2008 2007
---- ----
Assets (unaudited)
Current assets
Cash and cash equivalents $146,177 $360,463
Accounts Receivable
Billed receivables 264,203 190,900
Unbilled receivables 118,344 84,743
Allowance for doubtful accounts
and unbilled services (45,633) (30,467)
------- -------
336,914 245,176
Notes receivable 14,909 11,687
Prepaid expenses and other current
assets 30,341 33,657
Deferred income taxes 15,038 10,544
------ ------
Total current assets 543,379 661,527
Property and equipment, net of accumulated
depreciation 76,395 67,843
Goodwill 1,114,241 940,878
Other intangible assets, net of
amortization 199,429 84,673
Notes receivable, net of current portion 54,646 52,374
Other assets 57,432 51,329
------ ------
Total assets $2,045,522 $1,858,624
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and
other $61,399 $103,410
Accrued compensation 127,435 102,054
Current portion of long-term debt 152,069 157,772
Billings in excess of services provided 21,878 17,826
------ ------
Total current liabilities 362,781 381,062
Long-term debt, net of current portion 416,390 415,653
Deferred income taxes 72,642 49,113
Other liabilities 47,778 40,546
Stockholders' equity
Preferred stock, $0.01 par value; shares
authorized - 5,000, none outstanding - -
Common stock, $0.01 par value; share
authorized - 75,000; shares
issued and outstanding - 50,762 (2008)
and 48,979 (2007) 508 490
Additional paid-in capital 700,574 601,637
Retained earnings 455,300 361,058
Accumulated other comprehensive (loss)
income (10,451) 9,065
------- -----
Total stockholders' equity 1,145,931 972,250
--------- -------
Total liabilities and stockholders'
equity $2,045,522 $1,858,624
========== ==========
SOURCE FTI Consulting, Inc.
-0- 11/05/2008
/CONTACT: Jack Dunn, President & CEO of FTI Consulting, +1-410-951-4800;
or Investors, Gordon McCoun, Media, Andy Maas, both of FD, +1-212-850-5600/
/Web Site: http://www.fticonsulting.com /
(FCN FCN)
CO: FTI Consulting, Inc.
ST: Florida
IN: FIN
SU: ERN ERP
PR
-- NY44162 --
4162 11/05/2008 16:16 EST http://www.prnewswire.com