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FTI Consulting, Inc. Reports 2010 Fourth Quarter and Full Year Results

- Record Fourth Quarter Revenues of $356.2 Million; Full Year of $1.4 Billion
- Fourth Quarter Diluted EPS of $0.23 including Brand Consolidation Charge of $0.33; Adjusted EPS of $0.56
- Full Year Diluted EPS of $1.51; Adjusted EPS of $2.29
- Cash and Equivalents of $384.6 Million

WEST PALM BEACH, Fla., Feb. 24, 2011 /PRNewswire via COMTEX/ --

 

FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the fourth quarter and the full year ended December 31, 2010.

Revenues for the fourth quarter of 2010 were a fourth quarter record $356.2 million compared to $342.9 million in the prior year period and $346.1 million in the prior sequential quarter. Adjusted earnings per diluted share (EPS) were $0.56 compared to $0.71 in the prior year period. Adjusted EPS exclude a previously announced non-cash charge of approximately $21.8 million, or $0.33 impact on earnings per diluted share, resulting from the decision to unify substantially all operations under a consolidated brand - FTI Consulting - and the associated write off of trade names from certain acquired businesses. GAAP EPS were $0.23. Adjusted EBITDA was $69.3 million, or 19.5 percent of revenues, compared to $80.8 million, or 23.6 percent of revenues, in the prior year period. Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS (which appear in the accompanying tables) are non-GAAP measures and are described in further detail below.

Commenting on these results, Jack Dunn, President and Chief Executive Officer of the Company, said, "Our 2010 fourth quarter results continued the positive momentum we experienced in the third quarter and the validation of our strategy to offer clients a diversified suite of complementary services around the globe for every cycle of the economy. While in the third quarter our four procyclical businesses offset the decline in our core restructuring activities from the prior year, in the fourth quarter, they more than made up the difference, growing at an impressive average combined rate of 12.9%, led by Technology at 23.6% and FLC at 14.2%, while the rate of decline in Corporate Finance/Restructuring continued to slow. Our business outside the U.S. grew by 13% to 21% of total revenue from 19% in the same period last year.

"Just as importantly, we saw the continuing validation of our intellectual capital and market position. In December, our Corporate Finance/Restructuring practice was again recognized by The Deal magazine as the largest global crisis management firm in both dollar volume and number of transactions at more than two and a half times the nearest competitor. Global Competition Review magazine ranked our Economic Consulting team number one amongst competition specialists for its work in such signature matters as Oracle's acquisition of Sun Microsystems and the United Airlines/Continental merger. Our International Arbitration practice was recognized as the leader in the Expert Witness Research category by Who's Who Legal, and our Strategic Communications practice was awarded PR Firm of the Year by Financial Times/mergermarket, leading the league tables in Europe for an unprecedented 10th straight time.

"We enter 2011 with practices that are leaders in their respective markets and a strong financial position, with nearly $385 million in cash and equivalents for acquisitions, share repurchases and investments in our franchise and brand."

During the quarter, the Company generated $99.2 million in cash from operations, and repurchased approximately 416,000 shares of its common stock for a total purchase price of approximately $14.5 million.

Fourth Quarter Segment Results

Corporate Finance/Restructuring

Revenues in the Corporate Finance/Restructuring segment decreased 9.4 percent to $113.2 million from $124.9 million in the fourth quarter of the prior year. Adjusted Segment EBITDA was $28.9 million, or 25.5 percent of segment revenues, compared with $43.8 million, or 35.1 percent of segment revenues, in the prior year quarter. Demand for restructuring services continued to decline from near-record levels a year-ago as a result of continued improvements in the credit markets and the macroeconomic environment. In addition, the segment saw a decline in healthcare and transaction advisory services compared to the fourth quarter of last year. This was partially offset by contributions from its acquired business in Asia, as well as continued growth in Europe. Adjusted Segment EBITDA margins declined from the prior year due to lower demand and a shift in the revenue mix.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased 14.2 percent to $81.0 million from $70.9 million in the fourth quarter of the prior year. Adjusted Segment EBITDA increased to $18.9 million, or 23.4 percent of segment revenues, compared to $16.6 million, or 23.3 percent of segment revenues, in the prior year quarter. Demand improved in litigation and regulated industries, particularly healthcare, as well as trial services and in Asia.

Economic Consulting

Revenues in the Economic Consulting segment increased 1.9 percent to $64.4 million from $63.2 million in the fourth quarter of the prior year. Adjusted Segment EBITDA was $12.9 million, or 20.0 percent of segment revenues, compared to $13.2 million, or 20.9 percent of segment revenues, for the prior year quarter. The segment continued to see growth in its Financial Economics and International Arbitration practices. M&A activity also strengthened.

Technology

Revenues in the Technology segment increased 23.6 percent to $47.7 million from $38.6 million in the fourth quarter of the prior year. Adjusted Segment EBITDA was $17.9 million, or 37.4 percent of segment revenues, compared to $13.6 million, or 35.1 percent of segment revenues, in the prior year quarter. Demand improved in litigation and investigation matters. During the quarter the segment also benefitted from increased direct license revenues and the continued growth of its Acuity(TM) offering. Adjusted Segment EBITDA margins improved from the prior year quarter due to the higher revenues.

Strategic Communications

Revenues in the Strategic Communications segment increased 10.2 percent to $49.9 million from $45.3 million in the fourth quarter of the prior year. Adjusted Segment EBITDA was $7.4 million, or 14.9 percent of segment revenues, compared to $6.7 million, or 14.8 percent of segment revenues, in the prior year quarter. Primary regional contributors to the segment's growth during the quarter were the Americas and Asia-Pacific, which offset a small decline in the UK.

2011 Guidance

Based on current market conditions, the Company estimates that revenues for the year will be between $1.43 billion and $1.49 billion and diluted EPS will be between $2.00 and $2.20. Organic revenue growth is expected to be modest as the trends of the last several quarters are expected to continue. Margins are expected to be lower due to the previously announced costs associated with brand conversion, investments in strengthening infrastructure to support future growth in international markets, higher compensation expense, and increased interest costs associated with the cash raised in October through a bond offering. This guidance assumes no acquisitions and no share repurchases.

Fourth Quarter Conference Call

FTI will hold a conference call for analysts and investors to discuss fourth quarter financial results at 9:00 AM Eastern Time on February 24, 2011. 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, http://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 3,600 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 http://www.fticonsulting.com/.

Use of Non-GAAP Measure

Note: We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. We define Adjusted Segment EBITDA as the segment's share of consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. We define Adjusted earnings per diluted share (Adjusted EPS) as earnings per diluted share excluding the per share impact of the special charges and debt extinguishment costs that were incurred in that year. Although Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations 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 Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments.

Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS are 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. These non-GAAP measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income. Reconciliations of operating profit to Adjusted EBITDA, segment operating profit to Adjusted Segment EBITDA and EPS to Adjusted EPS are included in the accompanying tables to today's press release.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, 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 revenues, operating income and cash flow in some prior periods and expects this will occur from time to time in the future. The Company's actual results may differ from our expectations. Further, preliminary results are subject to normal year-end adjustments. Other factors that could cause such differences include adverse financial and real estate market and general economic conditions, 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.

FINANCIAL TABLES FOLLOW

FTI CONSULTING, INC.

 

CONSOLIDATED STATEMENTS OF INCOME

 

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

 

(in thousands, except per share data)

 
         
 

Year Ended December 31,

 
 

2010

 

2009

 
     
         

Revenues

$ 1,401,461

 

$ 1,399,946

 
         

Operating expenses

       

Direct cost of revenues

815,776

 

767,387

 

Selling, general and administrative expense

341,314

 

344,318

 

Special charges

52,020

 

-

 

Amortization of other intangible assets

23,910

 

24,701

 
 

1,233,020

 

1,136,406

 
         

Operating income

168,441

 

263,540

 
         

Other income (expense)

       

Interest income and other

4,423

 

8,408

 

Interest expense

(50,263)

 

(44,923)

 

Loss on early extinguishment of debt

(5,161)

 

-

 
 

(51,001)

 

(36,515)

 
         

Income before income tax provision

117,440

 

227,025

 
         

Income tax provision

45,550

 

83,999

 
         

Net income

$ 71,890

 

$ 143,026

 
         
         

Earnings per common share - basic

$ 1.58

 

$ 2.86

 

Weighted average common shares outstanding - basic

45,557

 

49,963

 
         

Earnings per common share - diluted

$ 1.51

 

$ 2.70

 

Weighted average common shares outstanding - diluted

47,471

 

53,044

 
       

FTI CONSULTING, INC.

 

CONSOLIDATED STATEMENTS OF INCOME

 

FOR THE THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009

 

(in thousands, except per share data)

 

(unaudited)

 
         
 

Three Months Ended

 
 

December 31,

 
 

2010

 

2009

 
     
         

Revenues

$ 356,248

 

$ 342,938

 
         

Operating expenses

       

Direct cost of revenues

205,190

 

187,590

 

Selling, general and administrative expense

88,915

 

81,747

 

Special charges

21,775

 

-

 

Amortization of other intangible assets

5,681

 

6,331

 
 

321,561

 

275,668

 
         

Operating income

34,687

 

67,270

 
         

Other income (expense)

       

Interest income and other

(317)

 

2,073

 

Interest expense

(15,663)

 

(11,446)

 
 

(15,980)

 

(9,373)

 
         

Income before income tax provision

18,707

 

57,897

 
         

Income tax provision

8,031

 

21,324

 
         

Net income

$ 10,676

 

$ 36,573

 
         
         

Earnings per common share - basic

$ 0.24

 

$ 0.75

 

Weighted average common shares outstanding - basic

45,110

 

48,612

 
         

Earnings per common share - diluted

$ 0.23

 

$ 0.71

 

Weighted average common shares outstanding - diluted

46,693

 

51,433

 
       

FTI CONSULTING, INC.

 

OPERATING RESULTS BY BUSINESS SEGMENT

 

(unaudited)

 
                 

Average

 

Revenue-

 
     

Adjusted

         

Billable

 

Generating

 
 

Revenues

 

EBITDA (1)

 

Margin

 

Utilization

 

Rate

 

Headcount

 
 

(in thousands)

                 

Three Months Ended December 31, 2010

                       

Corporate Finance/Restructuring

$ 113,220

 

$ 28,913

 

25.5%

 

69%

 

$ 425

 

725

 

Forensic and Litigation Consulting

(4)

81,023

 

18,925

 

23.4%

 

69%

 

$ 322

 

806

 

Economic Consulting

64,384

 

12,878

 

20.0%

 

80%

 

$ 472

 

297

 

Technology (2)

47,722

 

17,870

 

37.4%

 

N/M

 

N/M

 

257

 

Strategic Communications (2)

49,899

 

7,421

 

14.9%

 

N/M

 

N/M

 

583

 
 

$ 356,248

 

86,007

 

24.1%

 

N/M

 

N/M

 

2,668

 

Corporate

   

(16,668)

                 

Adjusted EBITDA (1)

   

$ 69,339

 

19.5%

             
                         

Year Ended December 31, 2010

                       

Corporate Finance/Restructuring

$ 451,518

 

$ 116,317

 

25.8%

 

70%

 

$ 435

 

725

 

Forensic and Litigation Consulting

(4)

324,478

 

78,244

 

24.1%

 

72%

 

$ 324

 

806

 

Economic Consulting

255,660

 

49,783

 

19.5%

 

79%

 

$ 472

 

297

 

Technology (2)

176,607

 

64,896

 

36.7%

 

N/M

 

N/M

 

257

 

Strategic Communications (2)

193,198

 

29,021

 

15.0%

 

N/M

 

N/M

 

583

 
 

$ 1,401,461

 

338,261

 

24.1%

 

N/M

 

N/M

 

2,668

 

Corporate

   

(62,556)

                 

Adjusted EBITDA (1)

   

$ 275,705

 

19.7%

             
                         

Three Months Ended December 31, 2009

                       

Corporate Finance/Restructuring

$ 124,940

 

$ 43,801

 

35.1%

 

64%

 

$ 453

 

758

 

Forensic and Litigation Consulting

(3) (4)

70,935

 

16,559

 

23.3%

 

69%

 

$ 316

 

754

 

Economic Consulting

63,176

 

13,224

 

20.9%

 

78%

 

$ 453

 

302

 

Technology (2) (3)

38,622

 

13,559

 

35.1%

 

N/M

 

N/M

 

251

 

Strategic Communications (2)

45,265

 

6,709

 

14.8%

 

N/M

 

N/M

 

573

 
 

$ 342,938

 

93,852

 

27.4%

 

N/M

 

N/M

 

2,638

 

Corporate

   

(13,010)

                 

Adjusted EBITDA (1)

   

$ 80,842

 

23.6%

             
                         

Year Ended December 31, 2009

                       

Corporate Finance/Restructuring

$ 514,260

 

$ 175,551

 

34.1%

 

73%

 

$ 439

 

758

 

Forensic and Litigation Consulting

(3) (4)

300,710

 

77,906

 

25.9%

 

76%

 

$ 320

 

754

 

Economic Consulting

234,723

 

47,845

 

20.4%

 

76%

 

$ 456

 

302

 

Technology (2) (3)

170,174

 

57,390

 

33.7%

 

N/M

 

N/M

 

251

 

Strategic Communications (2)

180,079

 

24,941

 

13.9%

 

N/M

 

N/M

 

573

 
 

$ 1,399,946

 

383,633

 

27.4%

 

N/M

 

N/M

 

2,638

 

Corporate

   

(66,378)

                 

Adjusted EBITDA (1)

   

$ 317,255

 

22.7%

             
                         

(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment's share of consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. Although Adjusted EBITDA, and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations 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 Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments.

 

Adjusted EBITDA and Adjusted Segment EBITDA are 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. These non-GAAP measures 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 based on billable hours. Accordingly,

utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.

 

(3) Effective January 1, 2010, we implemented a change in our organizational structure that resulted in the movement of our Financial and Enterprise Data Analytics subpractice from our Technology segment to our Forensic and Litigation Consulting segment. This change has been reflected in our segment reporting for all periods presented.

 

(4) 2010 utilization and average billable rate calculations for our Forensic and Litigation Consulting segment include information related to non-domestic operations that was not available in 2009.

 
                       

FTI CONSULTING, INC.

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

(in thousands, except per share data)

 

(unaudited)

 
                 
 

Three Months Ended

 

Year Ended

 
 

December 31,

 

December 31,

 
 

2010

 

2009

 

2010

 

2009

 
                 

Net income

$ 10,676

 

$ 36,573

 

$ 71,890

 

$ 143,026

 
                 

Add back: Special charges, net of tax

15,553

 

-

 

33,622

 

-

 

Add back: Loss on early extinguishment of debt, net of tax

-

 

-

 

3,019

 

-

 

Adjusted net income (1)

$ 26,229

 

$ 36,573

 

$ 108,531

 

$ 143,026

 
                 

Earnings per common share - diluted

$ 0.23

 

$ 0.71

 

$ 1.51

 

$ 2.70

 
                 

Adjusted earnings per common share - diluted (1)

$ 0.56

 

$ 0.71

 

$ 2.29

 

$ 2.70

 
                 

Weighted average number of common shares outstanding - diluted

46,693

 

51,433

 

47,471

 

53,044

 
                 

(1) We define Adjusted net income and Adjusted earnings per diluted share as net income and earnings per diluted share, respectively, excluding the impact of the special charges and loss on early extinguishment of debt that were incurred in that period, and their related income tax effects.

 
               

RECONCILIATION OF OPERATING INCOME AND NET INCOME TO ADJUSTED EBITDA

 

(in thousands)

 

(unaudited)

 
                                 

Three Months Ended December 31, 2010

Corporate

Finance /

Restructuring

 

Forensic and

Litigation

Consulting (2)

 

Economic

Consulting

 

Technology (2)

 

Strategic

Communi-

cations

 

Corp HQ

   

Total

 
                                 

Net income

                         

$ 10,676

 
 

Interest income and other

                         

317

 
 

Interest expense

                         

15,663

 
 

Loss on early extinguishment of debt

                         

-

 
 

Income tax provision

                         

8,031

 

Operating income

$ 22,503

 

$ 17,883

 

$ 12,180

 

$ 2,180

 

$ (2,374)

 

$ (17,685)

   

$ 34,687

 
 

Depreciation and amortization

940

 

853

 

549

 

2,872

 

774

 

1,208

   

7,196

 
 

Amortization of other intangible assets

1,593

 

723

 

296

 

1,832

 

1,237

 

-

   

5,681

 
 

Special charges

3,877

 

(534)

 

(147)

 

10,986

 

7,784

 

(191)

   

21,775

 

Adjusted EBITDA (1)

$ 28,913

 

$ 18,925

 

$ 12,878

 

$ 17,870

 

$ 7,421

 

$ (16,668)

   

$ 69,339

 
                                 
                                 

Year Ended December 31, 2010

                             
                                 

Net income

                         

$ 71,890

 
 

Interest income and other

                         

(4,423)

 
 

Interest expense

                         

50,263

 
 

Loss on early extinguishment of debt

                         

5,161

 
 

Income tax provision

                         

45,550

 

Operating income

$ 95,652

 

$ 66,240

 

$ 39,482

 

$ 28,107

 

$ 11,652

 

$ (72,692)

   

$ 168,441

 
 

Depreciation and amortization

3,736

 

3,325

 

2,418

 

13,397

 

3,226

 

5,232

   

31,334

 
 

Amortization of other intangible assets

6,463

 

3,653

 

1,216

 

7,479

 

5,099

 

-

   

23,910

 
 

Special charges

10,466

 

5,026

 

6,667

 

15,913

 

9,044

 

4,904

   

52,020

 

Adjusted EBITDA (1)

$ 116,317

 

$ 78,244

 

$ 49,783

 

$ 64,896

 

$ 29,021

 

$ (62,556)

   

$ 275,705

 
                                 
                                 

Three Months Ended December 31, 2009

                             
                                 

Net income

                         

$ 36,573

 
 

Interest income and other

                         

(2,073)

 
 

Interest expense

                         

11,446

 
 

Income tax provision

                         

21,324

 

Operating income

$ 41,282

 

$ 14,987

 

$ 12,263

 

$ 8,614

 

$ 4,570

 

$ (14,446)

   

$ 67,270

 
 

Depreciation and amortization

949

 

692

 

490

 

2,888

 

786

 

1,436

   

7,241

 
 

Amortization of other intangible assets

1,570

 

880

 

471

 

2,057

 

1,353

 

-

   

6,331

 

Adjusted EBITDA (1)

$ 43,801

 

$ 16,559

 

$ 13,224

 

$ 13,559

 

$ 6,709

 

$ (13,010)

   

$ 80,842

 
                                 
                                 

Year Ended December 31, 2009

                             
                                 

Net income

                         

$ 143,026

 
 

Interest income and other

                         

(8,408)

 
 

Interest expense

                         

44,923

 
 

Income tax provision

                         

83,999

 

Operating income

$ 165,757

 

$ 72,386

 

$ 43,928

 

$ 37,669

 

$ 16,455

 

$ (72,655)

   

$ 263,540

 
 

Depreciation and amortization

3,462

 

2,714

 

1,798

 

11,478

 

3,285

 

6,027

   

28,764

 
 

Amortization of other intangible assets

6,332

 

2,806

 

2,119

 

8,243

 

5,201

 

-

   

24,701

 
 

Non-operating litigation settlements

-

 

-

 

-

 

-

 

-

 

250

   

250

 

Adjusted EBITDA (1)

$ 175,551

 

$ 77,906

 

$ 47,845

 

$ 57,390

 

$ 24,941

 

$ (66,378)

   

$ 317,255

 
                               

(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment's share of consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. Although Adjusted EBITDA, and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations 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 Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments.

 

Adjusted EBITDA and Adjusted Segment EBITDA are 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. These non-GAAP measures 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) Effective January 1, 2010, we implemented a change in our organizational structure that resulted in the movement of our Financial and Enterprise Data Analytics subpractice from our Technology segment to our Forensic and Litigation Consulting segment. This change has been reflected in our segment reporting for all periods.

 
                                 

FTI CONSULTING, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

FOR THE YEARS ENDED December 31, 2010 and 2009

 

(in thousands)

 
         
     
 

Year Ended December 31,

 
 

2010

 

2009

 
     

Operating activities

       

Net income

$ 71,890

 

$ 143,026

 

Adjustments to reconcile net income to net cash provided by operating activities:

       

Depreciation and amortization

31,334

 

28,765

 

Amortization and impairment of other intangible assets

47,666

 

24,702

 

Provision for doubtful accounts

10,720

 

19,866

 

Non-cash share-based compensation

27,121

 

25,631

 

Excess tax benefits from share-based compensation

(204)

 

(5,193)

 

Non-cash interest expense

12,670

 

7,214

 

Other

1,667

 

(1,604)

 

Changes in operating assets and liabilities, net of effects from acquisitions:

       

Accounts receivable, billed and unbilled

(18,881)

 

(13,314)

 

Notes receivable

(24,500)

 

(18,364)

 

Prepaid expenses and other assets

1,136

 

1,334

 

Accounts payable, accrued expenses and other

19,033

 

(14,179)

 

Income taxes

12,176

 

29,877

 

Accrued compensation

9,357

 

20,090

 

Billings in excess of services provided

(6,131)

 

2,918

 

Net cash provided by operating activities

195,054

 

250,769

 
         

Investing activities

       

Payments for acquisition of businesses, including contingent payments,

       

net of cash received

(63,086)

 

(46,710)

 

Purchases of property and equipment

(22,600)

 

(28,557)

 

Purchases of short-term investments

-

 

(35,717)

 

Proceeds from sale or maturity of short-term investments

15,000

 

20,576

 

Other

(400)

 

520

 

Net cash used in investing activities

(71,086)

 

(89,888)

 
         

Financing activities

       

Borrowings under revolving line of credit

20,000

 

-

 

Payments of revolving line of credit

(20,000)

 

-

 

Payments of long-term debt and capital lease obligations

(209,747)

 

(13,761)

 

Issuance of debt securities

390,445

 

-

 

Payments of debt financing fees

(3,054)

 

-

 

Cash received for settlement of interest rate swaps

-

 

2,288

 

Purchase and retirement of common stock

(40,634)

 

(250,000)

 

Net issuance of common stock under equity compensation plans

6,196

 

15,699

 

Excess of tax benefits from share-based compensation

204

 

5,193

 

Other

442

 

303

 

Net cash provided by (used in) financing activities

143,852

 

(240,278)

 
         

Effect of exchange rate changes on cash and cash equivalents

(2,122)

 

6,427

 
         

Net increase (decrease) in cash and cash equivalents

265,698

 

(72,970)

 

Cash and cash equivalents, beginning of period

118,872

 

191,842

 

Cash and cash equivalents, end of period

$ 384,570

 

$ 118,872

 
       

FTI CONSULTING, INC.

 

CONSOLIDATED BALANCE SHEETS

 

AS OF DECEMBER 31, 2010 AND DECEMBER 31, 2009

 

(in thousands, except per share amounts)

 
         
 

December 31,

 

December 31,

 
 

2010

 

2009

 

Assets

       

Current assets

       

Cash and cash equivalents

$ 384,570

 

$ 118,872

 

Restricted cash

10,518

 

-

 

Accounts receivable:

       

Billed receivables

268,386

 

241,911

 

Unbilled receivables

120,896

 

104,959

 

Allowance for doubtful accounts and unbilled services

(63,205)

 

(59,328)

 

Accounts receivable, net

326,077

 

287,542

 

Current portion of notes receivable

26,130

 

20,853

 

Prepaid expenses and other current assets

28,174

 

45,157

 

Income taxes receivable

13,246

 

7,015

 

Deferred income taxes

-

 

20,476

 

Total current assets

788,715

 

499,915

 
         

Property and equipment, net of accumulated depreciation

73,238

 

80,678

 

Goodwill

1,269,447

 

1,195,949

 

Other intangible assets, net of amortization

134,970

 

175,962

 

Notes receivable, net of current portion

87,677

 

69,213

 

Other assets

60,312

 

55,621

 
         

Total assets

$ 2,414,359

 

$ 2,077,338

 
         

Liabilities and Stockholders' Equity

       

Current liabilities

       

Accounts payable, accrued expenses and other

$ 105,864

 

$ 81,193

 

Accrued compensation

143,971

 

152,807

 

Current portion of long-term debt and capital lease obligations

7,559

 

138,101

 

Billings in excess of services provided

27,836

 

34,101

 

Deferred income taxes

4,052

 

-

 

Total current liabilities

289,282

 

406,202

 
         

Long-term debt and capital lease obligations, net of current portion

785,563

 

417,397

 

Deferred income taxes

92,134

 

95,704

 

Other liabilities

80,061

 

53,821

 

Total liabilities

1,247,040

 

973,124

 
         

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 -- 46,144 (2010) and 46,985 (2009)

461

 

470

 

Additional paid-in capital

532,929

 

535,754

 

Retained earnings

687,419

 

615,529

 

Accumulated other comprehensive loss

(53,490)

 

(47,539)

 

Total stockholders' equity

1,167,319

 

1,104,214

 
         

Total liabilities and stockholders' equity

$ 2,414,359

 

$ 2,077,338

 
       

SOURCE FTI Consulting, Inc.

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+1 617.747.1791

Megan McLaughlin Hawkins

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+1 617.747.1740