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FTI Consulting Reports Fourth Quarter and Full Year 2021 Financial Results
  • Fourth Quarter 2021 Revenues of $676.2 Million, Up 8% Compared to $626.6 Million in Prior Year Quarter 
  • Fourth Quarter 2021 EPS of $1.07, Down 32% Compared to $1.57 in Prior Year Quarter; Fourth Quarter 2021 Adjusted EPS of $1.13, Down 30% Compared to $1.61 in Prior Year Quarter
  • Full Year 2021 Revenues of $2.776 Billion, Up 13% Compared to $2.461 Billion in Prior Year
  • Full Year 2021 EPS of $6.65, Up 17% Compared to $5.67 in Prior Year; Full Year 2021 Adjusted EPS of $6.76, Up 13% Compared to $5.99 in Prior Year
  • Introduces 2022 Guidance

WASHINGTON, Feb. 24, 2022 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the fourth quarter and full year ended December 31, 2021.

For the full year 2021, revenues of $2.776 billion increased $314.9 million, or 12.8%, compared to revenues of $2.461 billion in the prior year. Excluding the estimated positive impact from foreign currency ("FX") translation, revenues increased $265.1 million, or 10.8%, compared to the prior year. Acquisition-related revenues contributed $11.5 million of the increase in revenues compared to the prior year. Excluding the estimated positive impact of FX and acquisition-related revenues, revenues increased $253.6 million, or 10.3%, compared to the prior year. The increase in revenues was due to higher demand across all business segments. Net income of $235.0 million compared to $210.7 million in the prior year. The increase in net income was primarily due to higher revenues, FX remeasurement gains, and a $7.1 million special charge in full year 2020, which was partially offset by an increase in compensation expenses, which includes the impact of a 7.3% increase in total headcount and higher variable compensation, an increase in selling, general and administrative ("SG&A") expenses, and a higher effective tax rate compared to the prior year. Adjusted EBITDA of $354.0 million, or 12.8% of revenues, compared to $332.3 million, or 13.5% of revenues, in the prior year.

Full year 2021 earnings per diluted share ("EPS") of $6.65 compared to $5.67 in the prior year. Full year 2021 EPS included $9.6 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which reduced EPS by $0.20 and $3.1 million in fair value remeasurement of acquisition-related contingent consideration, which increased EPS by $0.09. Full year 2020 EPS included the aforementioned $7.1 million special charge, which reduced EPS by $0.14, and $9.1 million of non-cash interest expense, which reduced EPS by $0.18. Full year 2021 Adjusted EPS of $6.76, which excludes the non-cash interest expense and the fair value remeasurement, compared to Adjusted EPS of $5.99 in the prior year.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our powerful results in 2021 reflect the resilience of our platform, its relevance to clients looking at their most significant opportunities and challenges, and the commitment of our more than 6,700 employees across the globe to deliver for our clients each day.”

Cash Position and Capital Allocation

Net cash provided by operating activities of $355.5 million for the year ended December 31, 2021 compared to $327.1 million for the year ended December 31, 2020. The year-over-year increase in net cash provided by operating activities was largely due to higher cash collections combined with lower income tax payments, which was partially offset by an increase in compensation.

Cash and cash equivalents of $494.5 million at December 31, 2021 compared to $295.0 million at December 31, 2020 and $342.5 million at September 30, 2021. Total debt, net of cash, of ($178.2) million at December 31, 2021 compared to $21.3 million at December 31, 2020 and ($1.3) million at September 30, 2021. The sequential decrease in total debt, net of cash, was primarily due to an increase in net cash provided by operating activities and the repayment of borrowings under the Company’s senior secured bank revolving credit facility.

There were no share repurchases during the quarter ended December 31, 2021. In full year 2021, the Company repurchased 421,725 shares of its common stock at an average price per share of $109.37 for a total cost of $46.1 million. As of December 31, 2021, approximately $167.1 million remained available for common stock repurchases under the Company’s stock repurchase authorization.

Fourth Quarter 2021 Results

Fourth quarter 2021 revenues of $676.2 million increased $49.7 million, or 7.9%, compared to revenues of $626.6 million in the prior year quarter. The increase in revenues was driven by higher demand across all business segments. Net income of $38.2 million compared to $55.6 million in the prior year quarter. The decrease in net income was primarily due to an increase in compensation expenses, which includes the impact of a 7.3% increase in total headcount, higher SG&A expenses and a higher effective tax rate compared to the prior year quarter. In the fourth quarter of 2020, the lower effective tax rate was primarily related to a combined $11.2 million benefit from the use of foreign tax credits and a deferred tax benefit arising from an intracompany intellectual property license agreement. Adjusted EBITDA of $62.0 million, or 9.2% of revenues, compared to $82.3 million, or 13.1% of revenues, in the prior year quarter.

Fourth quarter 2021 EPS of $1.07 compared to $1.57 in the prior year quarter. Fourth quarter 2021 EPS included $2.4 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which reduced EPS by $0.06. Fourth quarter 2020 EPS included $2.3 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which reduced EPS by $0.04. Fourth quarter 2021 Adjusted EPS of $1.13, which excludes the non-cash interest expense, compared to Adjusted EPS of $1.61 in the prior year quarter. The aforementioned $11.2 million tax benefit increased fourth quarter 2020 EPS and Adjusted EPS by $0.32.

Fourth Quarter 2021 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $11.7 million, or 5.3%, to $231.5 million in the quarter, compared to $219.8 million in the prior year quarter. The increase in revenues was due to higher demand for business transformation and transactions services, as well as an increase in pass-through revenues and success fees, which was partially offset by lower demand for restructuring services compared to the prior year quarter. Adjusted Segment EBITDA of $22.2 million, or 9.6% of segment revenues, compared to $35.4 million, or 16.1% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was due to higher compensation, which was primarily related to an increase in variable compensation, and an increase in SG&A expenses compared to the prior year quarter.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $10.8 million, or 8.5%, to $138.0 million in the quarter, compared to $127.2 million in the prior year quarter. Acquisition-related revenues contributed $2.8 million in the quarter. Excluding acquisition-related revenues, revenues increased $8.0 million, or 6.3%, in the quarter. The increase in revenues was primarily due to higher demand for health solutions and investigations services compared to the prior year quarter. Adjusted Segment EBITDA of $8.5 million, or 6.2% of segment revenues, compared to $7.6 million, or 6.0% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in SG&A expenses and compensation compared to the prior year quarter.

Economic Consulting
Revenues in the Economic Consulting segment increased $11.8 million, or 7.4%, to $172.3 million in the quarter, compared to $160.5 million in the prior year quarter. The increase in revenues was primarily due to higher demand for non-merger and acquisition ("M&A")-related antitrust and financial economics services, which was partially offset by lower demand for M&A-related antitrust services compared to the prior year quarter. Adjusted Segment EBITDA of $30.0 million, or 17.4% of segment revenues, compared to $31.3 million, or 19.5% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher compensation compared to the prior year quarter.

Technology
Revenues in the Technology segment increased $6.0 million, or 10.2%, to $64.6 million in the quarter, compared to $58.6 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and litigation services compared to the prior year quarter. Adjusted Segment EBITDA of $7.8 million, or 12.1% of segment revenues, compared to $10.2 million, or 17.3% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher compensation, which includes an increase in variable compensation and the impact of a 14.7% increase in billable headcount, as well as higher SG&A expenses compared to the prior year quarter.

Strategic Communications
Revenues in the Strategic Communications segment increased $9.4 million, or 15.5%, to $69.9 million in the quarter, compared to $60.5 million in the prior year quarter. The increase in revenues was primarily due to higher demand for corporate reputation and public affairs services compared to the prior year quarter. Adjusted Segment EBITDA of $14.9 million, or 21.4% of segment revenues, compared to $11.7 million, or 19.4% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation and SG&A expenses compared to the prior year quarter.

2022 Guidance
The Company estimates that revenues for full year 2022 will range between $2.920 billion and $3.045 billion. The Company estimates that full year 2022 EPS will range between $6.40 and $7.20. The Company does not currently expect Adjusted EPS to differ from EPS. In prior years, Adjusted EPS has excluded non-cash interest expense in respect of the Company's 2023 Convertible Notes. As a result of the Company's adoption of Accounting Standards Update 2020-06 (“ASU 2020-06”), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which is effective as of January 1, 2022, the Company will not recognize any non-cash interest expense after January 1, 2022.

In light of a change to the terms of the Company's 2023 Convertible Notes, effective January 1, 2022, the Company does not expect the adoption of ASU 2020-06 to have a material impact on the determination of the Company's fully diluted weighted average shares outstanding. Pursuant to the first supplemental indenture for the Company's 2023 Convertible Notes, the principal amount of the 2023 Convertible Notes, at conversion, is required to be paid in cash, and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. Consequently, the if-converted method for determining fully diluted weighted average shares outstanding, which is required pursuant to ASU 2020-06, will produce a similar result as the treasury stock method, which was the method used prior to January 1, 2022.

Fourth Quarter and Full Year 2021 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2021 financial results at 3:00 p.m. Eastern Time on Thursday, February 24, 2022. 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 6,700 employees located in 29 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 $2.78 billion in revenues during fiscal year 2021. 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 financial measures are considered not in conformity with GAAP ("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 definitions 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 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 EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS"), which are non-GAAP financial measures, as net income and 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 Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows. Reconciliations of these 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, policies and practices, 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, new or changes to laws and regulations, including U.S. and foreign tax laws, environmental, social and governance ("ESG")-related issues, scientific or technological developments, 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," "aspires," "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, intentions, aspirations, 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, 2021 filed with the SEC on February 24, 2022 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.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

    December 31,   December 31,
      2021       2020  
Assets        
Current assets        
Cash and cash equivalents   $ 494,485     $ 294,953  
Accounts receivable, net     754,120       711,357  
Current portion of notes receivable     30,256       35,253  
Prepaid expenses and other current assets     91,166       88,144  
     Total current assets     1,370,027       1,129,707  
Property and equipment, net     142,163       101,642  
Operating lease assets     215,995       156,645  
Goodwill     1,232,791       1,234,879  
Intangible assets, net     31,990       41,550  
Notes receivable, net     53,539       61,121  
Other assets     54,404       51,819  
       Total assets   $ 3,100,909     $ 2,777,363  
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable, accrued expenses and other   $ 165,025     $ 170,066  
Accrued compensation     507,556       455,933  
Billings in excess of services provided     45,535       44,172  
     Total current liabilities     718,116       670,171  
Long-term debt, net     297,158       286,131  
Noncurrent operating lease liabilities     236,026       161,677  
Deferred income taxes     170,612       158,342  
Other liabilities     95,676       100,861  
       Total liabilities     1,517,588       1,377,182  
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 — 34,333 (2021) and 34,481 (2020)     343       345  
Additional paid-in capital     13,662        
Retained earnings     1,698,156       1,506,271  
Accumulated other comprehensive loss     (128,840 )     (106,435 )
     Total stockholders' equity     1,583,321       1,400,181  
       Total liabilities and stockholders' equity   $ 3,100,909     $ 2,777,363  
 
 

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

  Three Months Ended
December 31,
 
    2021       2020  
  (Unaudited)
Revenues $ 676,231     $ 626,581  
Operating expenses      
Direct cost of revenues   484,126       440,274  
Selling, general and administrative expenses   138,768       112,422  
Amortization of intangible assets   2,308       2,947  
    625,202       555,643  
Operating income   51,029       70,938  
Other income (expense)      
Interest income and other   896       (4,291 )
Interest expense   (5,130 )     (4,636 )
    (4,234 )     (8,927 )
Income before income tax provision   46,795       62,011  
Income tax provision   8,587       6,422  
Net income $ 38,208     $ 55,589  
Earnings per common share ― basic $ 1.14     $ 1.63  
Weighted average common shares outstanding ― basic   33,519       34,198  
Earnings per common share ― diluted $ 1.07     $ 1.57  
Weighted average common shares outstanding ― diluted   35,550       35,484  
Other comprehensive income (loss), net of tax      
Foreign currency translation adjustments, net of tax expense of $0 and $0 $ (4,363 )   $ 34,616  
Total other comprehensive income (loss), net of tax   (4,363 )     34,616  
Comprehensive income $ 33,845     $ 90,205  
 
 

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

  Year Ended December 31,
 
    2021       2020  
Revenues $ 2,776,222     $ 2,461,275  
Operating expenses      
Direct cost of revenues   1,915,507       1,672,711  
Selling, general and administrative expenses   537,844       488,411  
Special charges         7,103  
Amortization of intangible assets   10,823       10,387  
    2,464,174       2,178,612  
Operating income   312,048       282,663  
Other income (expense)      
Interest income and other   6,193       (412 )
Interest expense   (20,294 )     (19,805 )
    (14,101 )     (20,217 )
Income before income tax provision   297,947       262,446  
Income tax provision   62,981       51,764  
Net income $ 234,966     $ 210,682  
Earnings per common share ― basic $ 7.02     $ 5.92  
Weighted average common shares outstanding ― basic   33,489       35,602  
Earnings per common share ― diluted $ 6.65     $ 5.67  
Weighted average common shares outstanding ― diluted   35,337       37,149  
Other comprehensive income (loss), net of tax      
Foreign currency translation adjustments, net of tax expense of $0 and $0 $ (22,405 )   $ 34,412  
Total other comprehensive income (loss), net of tax   (22,405 )     34,412  
Comprehensive income $ 212,561     $ 245,094  
 
 

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

    Three Months Ended
December 31,
  Year Ended
 December 31,
      2021       2020       2021       2020  
    (Unaudited)    
Net income   $ 38,208     $ 55,589     $ 234,966     $ 210,682  
Add back:                
Remeasurement of acquisition-related contingent consideration                 (3,130 )      
Special charges                       7,103  
Tax impact of special charges                       (1,847 )
Non-cash interest expense on convertible notes     2,445       2,317       9,586       9,083  
Tax impact of non-cash interest expense on convertible notes     (636 )     (602 )     (2,492 )     (2,361 )
Adjusted Net Income   $ 40,017     $ 57,304     $ 238,930     $ 222,660  
Earnings per common share — diluted   $ 1.07     $ 1.57     $ 6.65     $ 5.67  
Add back:                
Remeasurement of acquisition-related contingent consideration                 (0.09 )      
Special charges                       0.19  
Tax impact of special charges                       (0.05 )
Non-cash interest expense on convertible notes     0.08       0.06       0.27       0.24  
Tax impact of non-cash interest expense on convertible notes     (0.02 )     (0.02 )     (0.07 )     (0.06 )
Adjusted earnings per common share — diluted   $ 1.13     $ 1.61     $ 6.76     $ 5.99  
Weighted average number of common shares outstanding ― diluted     35,550       35,484       35,337       37,149  
 
 

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

Three Months Ended December 31, 2021
(Unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 38,208  
Interest income and other                             (896 )
Interest expense                             5,130  
Income tax provision                             8,587  
Operating income   $ 19,047     $ 7,044   $ 28,571   $ 4,612   $ 14,171   $ (22,416 )   $ 51,029  
Depreciation and amortization     1,346       1,200     1,420     3,176     536     960       8,638  
Amortization of intangible assets     1,841       247             218     2       2,308  
Adjusted EBITDA   $ 22,234     $ 8,491   $ 29,991   $ 7,788   $ 14,925   $ (21,454 )   $ 61,975  
                             
Year Ended December 31, 2021   Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 234,966  
Interest income and other                             (6,193 )
Interest expense                             20,294  
Income tax provision                             62,981  
Operating income   $ 145,765     $ 66,643   $ 111,462   $ 42,927   $ 49,708   $ (104,457 )   $ 312,048  
Depreciation and amortization     5,362       5,008     5,724     12,812     2,166     3,197       34,269  
Amortization of intangible assets     7,485       894             2,439     5       10,823  
Remeasurement of acquisition-related contingent consideration     (3,130 )                           (3,130 )
Adjusted EBITDA   $ 155,482     $ 72,545   $ 117,186   $ 55,739   $ 54,313   $ (101,255 )   $ 354,010  
 
 

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

Three Months Ended December 31, 2020
(Unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 55,589
Interest income and other                             4,291
Interest expense                             4,636
Income tax provision                             6,422
Operating income   $ 32,182   $ 6,046   $ 29,774   $ 7,227   $ 10,244   $ (14,535 )   $ 70,938
Depreciation and amortization     1,359     1,403     1,342     2,928     776     654       8,462
Amortization of intangible assets     1,864     173     192         718           2,947
Adjusted EBITDA   $ 35,405   $ 7,622   $ 31,308   $ 10,155   $ 11,738   $ (13,881 )   $ 82,347
                             
Year Ended December 31, 2020   Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 210,682
Interest income and other                             412
Interest expense                             19,805
Income tax provision                             51,764
Operating income   $ 205,029   $ 23,899   $ 85,690   $ 30,869   $ 31,639   $ (94,463 )   $ 282,663
Depreciation and amortization     4,485     5,191     5,382     11,867     2,456     2,737       32,118
Amortization of intangible assets     6,455     800     325     1     2,806           10,387
Special charges     861     3,484     35     276     2,074     373       7,103
Adjusted EBITDA   $ 216,830   $ 33,374   $ 91,432   $ 43,013   $ 38,975   $ (91,353 )   $ 332,271
 
 

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 December 31, 2021 (Unaudited)                      
Corporate Finance & Restructuring $ 231,474   $ 22,234     9.6 %   55 %   $ 444   1,702
Forensic and Litigation Consulting   138,004     8,491     6.2 %   50 %   $ 353   1,496
Economic Consulting   172,283     29,991     17.4 %   69 %   $ 520   921
Technology (1)   64,604     7,788     12.1 %   N/M       N/M   468
Strategic Communications (1)   69,866     14,925     21.4 %   N/M       N/M   814
  $ 676,231   $ 83,429     12.3 %           5,401
Unallocated Corporate       (21,454 )                
Adjusted EBITDA     $ 61,975     9.2 %            
                       
Year Ended December 31, 2021                      
Corporate Finance & Restructuring $ 938,969   $ 155,482     16.6 %   59 %   $ 452   1,702
Forensic and Litigation Consulting   584,835     72,545     12.4 %   56 %   $ 350   1,496
Economic Consulting   697,405     117,186     16.8 %   72 %   $ 509   921
Technology (1)   287,366     55,739     19.4 %   N/M     N/M   468
Strategic Communications (1)   267,647     54,313     20.3 %   N/M     N/M   814
  $ 2,776,222   $ 455,265     16.4 %           5,401
Unallocated Corporate       (101,255 )                
Adjusted EBITDA     $ 354,010     12.8 %            
                       
Three Months Ended December 31, 2020 (Unaudited)                      
Corporate Finance & Restructuring $ 219,809   $ 35,405     16.1 %   52 %   $ 472   1,655
Forensic and Litigation Consulting   127,193     7,622     6.0 %   51 %   $ 340   1,343
Economic Consulting   160,479     31,308     19.5 %   65 %   $ 529   891
Technology (1)   58,624     10,155     17.3 %   N/M     N/M   408
Strategic Communications (1)   60,476     11,738     19.4 %   N/M     N/M   770
  $ 626,581   $ 96,228     15.4 %           5,067
Unallocated Corporate       (13,881 )                
Adjusted EBITDA     $ 82,347     13.1 %            
                       
Year Ended December 31, 2020                      
Corporate Finance & Restructuring $ 910,184   $ 216,830     23.8 %   63 %   $ 468   1,655
Forensic and Litigation Consulting   500,275     33,374     6.7 %   51 %   $ 335   1,343
Economic Consulting   599,088     91,432     15.3 %   68 %   $ 494   891
Technology (1)   223,016     43,013     19.3 %   N/M       N/M   408
Strategic Communications (1)   228,712     38,975     17.0 %   N/M       N/M   770
  $ 2,461,275   $ 423,624     17.2 %           5,067
Unallocated Corporate       (91,353 )                
Adjusted EBITDA     $ 332,271     13.5 %            

________________________
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.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

  Year Ended December 31,
 
    2021       2020  
Operating activities      
Net income $ 234,966     $ 210,682  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   34,269       32,661  
Amortization and impairment of intangible assets   10,823       10,387  
Acquisition-related contingent consideration   (324 )     5,593  
Provision for expected credit losses   16,151       19,692  
Share-based compensation   23,051       22,904  
Amortization of debt discount and issuance costs and other   11,701       11,259  
Deferred income taxes   4,958       (9,132 )
Changes in operating assets and liabilities, net of effects from acquisitions:      
     Accounts receivable, billed and unbilled   (61,274 )     (26,800 )
     Notes receivable   12,645       8,029  
     Prepaid expenses and other assets   (1,165 )     4,640  
     Accounts payable, accrued expenses and other   (2,102 )     13,901  
     Income taxes   10,523       (22,549 )
     Accrued compensation   59,566       38,627  
     Billings in excess of services provided   1,695       7,175  
          Net cash provided by operating activities   355,483       327,069  
Investing activities      
Payments for acquisition of businesses, net of cash received   (10,428 )     (25,271 )
Purchases of property and equipment and other   (68,665 )     (34,849 )
          Net cash used in investing activities   (79,093 )     (60,120 )
Financing activities      
Borrowings under revolving line of credit   402,500       289,500  
Repayments under revolving line of credit   (402,500 )     (289,500 )
Purchase and retirement of common stock   (46,133 )     (353,593 )
Share-based compensation tax withholdings and other   (9,246 )     (5,823 )
Payments for business acquisition liabilities   (7,496 )     (3,948 )
Deposits   1,201       3,311  
          Net cash used in financing activities   (61,674 )     (360,053 )
Effect of exchange rate changes on cash and cash equivalents   (15,184 )     18,684  
Net increase (decrease) in cash and cash equivalents   199,532       (74,420 )
Cash and cash equivalents, beginning of period   294,953       369,373  
Cash and cash equivalents, end of period $ 494,485     $ 294,953  
 
 

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

    Year Ended December 31,
      2021       2020  
Net cash provided by operating activities   $ 355,483     $ 327,069  
Purchases of property and equipment     (68,569 )     (34,866 )
Free Cash Flow   $ 286,914     $ 292,203  
 

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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Source: FTI Consulting, Inc.

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Investor Relations Contacts

Mollie Hawkes

Head of Marketing, Communications & Investor Relations

+1 617-747-1791

Megan McLaughlin Hawkins

Senior Director, Investor Relations & Communications

+1 617-747-1740