Press Releases

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(in thousands, except per share data)

(unaudited)

Three Months Ended

March 31,

2013

2012

Revenues

$               407,178

$              395,228

Operating expenses

Direct cost of revenues

258,480

245,618

Selling, general and administrative expense

96,647

102,589

Special charges

427

-

Acquisition-related contingent consideration

731

557

Amortization of other intangible assets

5,564

5,517

361,849

354,281

Operating income

45,329

40,947

Other income (expense)

Interest income and other

937

3,282

Interest expense

(12,715)

(15,204)

(11,778)

(11,922)

Income before income tax provision

33,551

29,025

Income tax provision

9,871

10,594

Net income 

$                 23,680

$                18,431

Earnings  per common share - basic

$                     0.60

$                    0.46

Weighted average common shares outstanding - basic

39,403

40,358

Earnings per common share - diluted

$                     0.58

$                    0.43

Weighted average common shares outstanding - diluted

40,620

43,185

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of tax $0

$               (15,509)

$                12,849

Other comprehensive income (loss), net of tax

(15,509)

12,849

Comprehensive income

$                   8,171

$                31,280

FTI CONSULTING, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

  Average  

Revenue-

Adjusted

 Billable 

Generating

Revenues

EBITDA ⁽¹⁾

Margin

Utilization

Rate

Headcount

  (in thousands)  

Three Months Ended March 31, 2013

Corporate Finance/Restructuring ⁽³⁾

$                   99,080

$                        19,085

19.3%

69%

$          407

683

Forensic and Litigation Consulting ⁽³⁾

100,724

12,811

12.7%

67%

$          412

965

Economic Consulting

115,194

26,194

22.7%

89%

$          504

476

Technology  ⁽²⁾

46,704

13,716

29.4%

N/M

N/M

275

Strategic Communications  ⁽²⁾

45,476

3,554

7.8%

N/M

N/M

619

$                 407,178

75,360

18.5%

3,018

   Unallocated Corporate Expenses

(16,034)

Adjusted EBITDA⁽¹⁾

$                        59,326

14.6%

Three Months Ended March 31, 2012

Corporate Finance/Restructuring ⁽³⁾

$                   96,874

$                        24,171

25.0%

76%

$          408

592

Forensic and Litigation Consulting ⁽³⁾

103,635

14,670

14.2%

70%

$          323

955

Economic Consulting

100,052

18,424

18.4%

86%

$          479

457

Technology  ⁽²⁾

49,660

13,215

26.6%

N/M

N/M

304

Strategic Communications  ⁽²⁾

45,007

4,529

10.1%

N/M

N/M

596

$                 395,228

75,009

19.0%

2,904

   Unallocated Corporate Expenses

(21,049)

Adjusted EBITDA⁽¹⁾

$                        53,960

13.7%

⁽¹⁾ We define Adjusted EBITDA as net income before income tax provision, other income (expense), depreciation, amortization of intangible assets, special charges and goodwill impairment charges. 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, special charges and goodwill impairment charge. 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. 

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. These non-GAAP 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. 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 in the first quarter of 2013, we modified our reportable segments to reflect changes in how we operate our business and the related internal management reporting. The Company's healthcare practices from both our Corporate Finance/Restructuring segment and our Forensic and Litigation Consulting segment have been combined under a single organizational structure. This single integrated practice, our health solutions practice, is now aggregated in its entirety within the Forensic and Litigation Consulting reportable segment. Prior period Corporate Finance/Restructuring and Forensic and Litigation Consulting segment information has been reclassified to conform to the current period presentation.

FTI CONSULTING, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(in thousands, except per share data)

(unaudited)

Three Months Ended

March 31,

2013

2012

Net income

$             23,680

$             18,431

Add back: Special charges, net of tax effect ⁽¹⁾

253

-

Adjusted Net Income ⁽²⁾

$             23,933

$             18,431

Earnings per common share - diluted

$                 0.58

$                 0.43

Add back: Special charges, net of tax effect ⁽¹⁾

0.01

-

Adjusted EPS ⁽²⁾

$                 0.59

$                 0.43

Weighted average number of common shares outstanding - diluted

40,620

43,185

⁽¹⁾ The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rate for the adjustment for the three months ended March 31, 2013 was 40.7%. The tax expense related to the adjustments for the three months ended March 31, 2013 was $0.2 million with no impact on diluted earnings per share.

⁽²⁾  We define Adjusted Net Income and Adjusted EPS as net income and earnings per diluted share, respectively, excluding the impact of any special charges, goodwill impairment and loss on extinguishment of debt that were incurred in that period. 

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA

(in thousands)

Three Months Ended March 31, 2013

Corporate Finance / Restructuring ⁽²⁾

Forensic and Litigation Consulting ⁽²⁾

Economic Consulting

Technology 

Strategic Communi- cations

Unallocated Corporate Expenses

Total

Net income 

$             23,680

Interest income and other

(937)

Interest expense

12,715

Income tax provision

9,871

Operating income

$                16,699

$             11,102

$             24,995

$               8,082

$               1,727

$           (17,276)

$             45,329

Depreciation and amortization

767

1,024

805

3,635

645

1,130

8,006

Amortization of other intangible assets

1,551

512

398

1,985

1,118

-

5,564

Special charges

68

173

(4)

14

64

112

427

Adjusted EBITDA ⁽¹⁾

$                19,085

$             12,811

$             26,194

$             13,716

$               3,554

$           (16,034)

$             59,326

Three Months Ended March 31, 2012

Net income 

$             18,431

Interest income and other

(3,282)

Interest expense

15,204

Income tax provision

10,594

Operating income 

$                21,944

$             13,097

$             17,320

$               8,201

$               2,657

$           (22,272)

40,947

Depreciation and amortization

789

1,057

705

3,022

700

1,223

7,496

Amortization of other intangible assets

1,438

516

399

1,992

1,172

-

5,517

Adjusted EBITDA ⁽¹⁾

24,171

14,670

18,424

13,215

4,529

(21,049)

53,960

⁽¹⁾ We define Adjusted EBITDA as net income before income tax provision, other income (expense), depreciation, amortization of intangible assets, special charges and goodwill impairment charges. 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, special charges and goodwill impairment charge. Although Adjusted Segment EBITDA is not a measure of financial condition or performance determined in accordance with GAAP, we use 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. These non-GAAP 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.

⁽²⁾ Effective in the first quarter of 2013, we modified our reportable segments to reflect changes in how we operate our business and the related internal management reporting. The Company's healthcare practices from both our Corporate Finance/Restructuring segment and our Forensic and Litigation Consulting segment have been combined under a single organizational structure. This single integrated practice, our health solutions practice, is now aggregated in its entirety within the Forensic and Litigation Consulting reportable segment. Prior period Corporate Finance/Restructuring and Forensic and Litigation Consulting segment information has been reclassified to conform to the current period presentation.

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

(in thousands)

(unaudited)

Three Months Ended 

March 31,

2013

2012

Operating activities

Net income

$           23,680

$           18,431

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

8,006

7,496

Amortization of other intangible assets

5,564

5,517

Acquisition-related contingent consideration

731

557

Provision for doubtful accounts 

4,094

4,569

Non-cash share-based compensation 

10,055

10,553

Excess tax benefits from share-based compensation

(124)

(55)

Non-cash interest expense

670

1,933

Other

(11)

73

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

Accounts receivable, billed and unbilled

(47,711)

(21,996)

Notes receivable

(227)

(14,481)

Prepaid expenses and other assets

531

(7,735)

Accounts payable, accrued expenses and other

16,603

17,694

Income taxes 

2,937

(15,627)

Accrued compensation

(28,862)

(67,079)

Billings in excess of services provided

1,760

2,329

                           Net cash used in operating activities

(2,304)

(57,821)

Investing activities

Payments for acquisition of businesses, net of cash received 

(14,676)

(18,595)

Purchases of property and equipment

(7,323)

(4,756)

Other

12

16

                          Net cash used in investing activities

(21,987)

(23,335)

Financing activities

Payments of long-term debt and capital lease obligations

-

(156)

Purchase and retirement of common stock

(28,758)

-

Net issuance of common stock under equity compensation plans

(1,335)

(647)

Excess tax benefit from share-based compensation 

124

55

Other

(224)

(370)

                          Net cash used in financing activities

(30,193)

(1,118)

Effect of exchange rate changes on cash and cash equivalents

(1,598)

289

Net decrease in cash and cash equivalents

(56,082)

(81,985)

Cash and cash equivalents, beginning of period

156,785

264,423

Cash and cash equivalents, end of period

$         100,703

$         182,438

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AT MARCH 31, 2013 AND DECEMBER 31, 2012

(in thousands, except per share amounts)

March 31,

December 31,

2013

2012

Assets

(unaudited)

Current assets

   Cash and cash equivalents

$          100,703

$          156,785

   Restricted cash

1,118

1,190

   Accounts receivable:

       Billed receivables

334,539

314,491

       Unbilled receivables

234,961

208,797

       Allowance for doubtful accounts and unbilled services

(98,904)

(94,048)

          Accounts receivable, net

470,596

429,240

   Current portion of notes receivable

32,452

33,194

   Prepaid expenses and other current assets

43,157

50,351

   Current portion of deferred tax assets

3,703

3,615

Total current assets

651,729

674,375

Property and equipment, net of accumulated depreciation

66,706

68,192

Goodwill

1,252,440

1,260,035

Other intangible assets, net of amortization

101,858

104,181

Notes receivable, net of current portion

100,948

101,623

Other assets

65,771

67,046

Total assets

$       2,239,452

$       2,275,452

Liabilities and Stockholders' Equity

Current liabilities

    Accounts payable, accrued expenses and other

$            97,877

$            98,109

Accrued compensation

132,109

168,392

Current portion of long-term debt and capital lease obligations

6,021

6,021

    Billings in excess of services provided

33,238

31,675

Total current liabilities

269,245

304,197

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

717,024

717,024

Deferred income taxes

111,440

105,751

Other liabilities

83,415

80,248

Total liabilities

1,181,124

1,207,220

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 ―40,208 (2013) and 40,755 (2012)

402

408

Additional paid-in capital

349,909

367,978

Retained earnings

764,895

741,215

Accumulated other comprehensive loss

(56,878)

(41,369)

Total stockholders' equity

1,058,328

1,068,232

Total liabilities and stockholders' equity

$       2,239,452

$       2,275,452