The FTI Consulting Logo     Print Page  |  Close Window

Press Releases

FTI Consulting Reports Record Third Quarter 2018 Financial Results
  • Third Quarter 2018 Revenues of $513.0 Million, Up 14.3% Compared to Prior Year Quarter
  • Third Quarter EPS of $1.14, Up 34.1% Compared to $0.85 in Prior Year Quarter; Third Quarter Adjusted EPS of $1.00, Up 20.5% Compared to $0.83 in Prior Year Quarter
  • Full Year 2018 Guidance Increased

WASHINGTON, D.C., Oct. 25, 2018 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released record financial results for the quarter ended September 30, 2018.

Third quarter 2018 revenues of $513.0 million increased $64.1 million, or 14.3%, compared to revenues of $449.0 million in the prior year quarter. The increase in revenues was driven by higher demand across all business segments, with particular strength in the Economic Consulting and Technology segments. Net income of $44.3 million compared to $32.2 million in the prior year quarter. The increase in net income was largely due to higher operating profits and a $6.2 million gain, net of taxes, related to the sale of the Company’s Ringtail e-discovery software and related business.

Adjusted EBITDA of $67.4 million, or 13.1% of revenues, compared to $57.4 million, or 12.8% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was primarily due to higher revenues, which were partially offset by higher compensation and other selling, general and administrative expenses.

Third quarter 2018 earnings per diluted share (“EPS”) of $1.14 compared to $0.85 in the prior year quarter. EPS in the quarter included the aforementioned $6.2 million gain related to the sale of the Company's Ringtail e-discovery software and related business, which increased EPS by $0.16. This was partially offset by a $0.7 million non-cash interest expense related to the Company's August 2018 2.0% convertible senior note offering (“2023 Convertible Notes”), which decreased EPS by $0.02. Adjusted EPS of $1.00, which excludes the gain related to the sale and non-cash interest expense, compared to $0.83 in the prior year quarter.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “We are pleased with another record quarter. These results benefited in part from some short-term factors, but, more fundamentally, they reflect the strategic changes our teams have been driving in our underlying businesses and the success we are having in attracting, developing and promoting our people, all of which have enhanced our ability to collaborate with our clients as they address their most significant challenges and opportunities.”

Cash Position and Capital Allocation

Net cash provided by operating activities of $120.9 million for the quarter ended September 30, 2018 compared to $106.2 million for the quarter ended September 30, 2017. The increase was primarily due to higher cash collections resulting from increased revenues, which was partially offset by an increase in cash paid for salaries and benefits. Cash and cash equivalents of $505.9 million at September 30, 2018 compared to $116.6 million at June 30, 2018 and $158.0 million at September 30, 2017. Total debt, net of cash, of $110.4 million at September 30, 2018 compared to $258.4 million at June 30, 2018 and $307.0 million at September 30, 2017. The improvement was primarily due to an increase in net cash provided by operating activities and $50.3 million in net proceeds from the aforementioned sale of the Company's Ringtail e-discovery software and related business.

Third Quarter 2018 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $7.3 million, or 5.7%, to $135.4 million in the quarter compared to $128.1 million in the prior year quarter. The increase in revenues was due to higher demand for business transformation and transactions services, which was partially offset by lower success fees. Adjusted Segment EBITDA was $26.8 million, or 19.8% of segment revenues, compared to $26.7 million, or 20.9% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was consistent with the prior year quarter, as the increase in revenues was offset by higher compensation.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $8.0 million, or 6.8%, to $126.7 million in the quarter compared to $118.6 million in the prior year quarter. The increase in revenues was primarily driven by higher demand for construction solutions, disputes and investigations services, which was partially offset by reduced demand for health solutions services. Adjusted Segment EBITDA was $22.0 million, or 17.3% of segment revenues, compared to $22.5 million, or 19.0% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was down slightly compared to the prior year quarter, as the increase in revenues was offset by higher compensation.

Economic Consulting
Revenues in the Economic Consulting segment increased $27.4 million, or 24.5%, to $139.2 million in the quarter, compared to $111.8 million in the prior year quarter. The increase in revenues was primarily due to higher demand for antitrust and financial economics services. Adjusted Segment EBITDA was $23.2 million, or 16.7% of segment revenues, compared to $12.1 million, or 10.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues with improved utilization.

Technology
Revenues in the Technology segment increased $14.4 million, or 34.1%, to $56.7 million in the quarter compared to $42.3 million in the prior year quarter. The increase in revenues was due to sharply higher demand for merger and acquisition-related “second request” services. Adjusted Segment EBITDA was $11.5 million, or 20.2% of segment revenues, compared to $6.0 million, or 14.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues and lower research and development expenses, which was partially offset by higher variable compensation.

Strategic Communications
Revenues in the Strategic Communications segment increased $6.9 million, or 14.3%, to $55.1 million in the quarter compared to $48.2 million in the prior year quarter. The increase in revenues was primarily due to a $3.3 million increase in pass-through revenues and higher project-based revenues. Adjusted Segment EBITDA was $10.8 million, or 19.6% of segment revenues, compared to $8.1 million, or 16.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in pass-through expenses and higher variable compensation.

2018 Guidance

The Company is revising its full year 2018 guidance. The Company now estimates that 2018 revenues will range between $1.960 billion and $1.990 billion. This compares to the previous revenue range of $1.910 billion to $1.960 billion. The Company now estimates that 2018 EPS will range between $3.53 and $3.73. This range is inclusive of the fourth quarter 2018 estimated charge related to the early extinguishment of debt from the redemption of all of the Company's outstanding $300.0 million aggregate principal amount of 6.0% senior notes due 2022, which the Company intends to redeem on November 15, 2018. The Company now estimates that 2018 Adjusted EPS will range between $3.60 and $3.80. This compares to the previous EPS and Adjusted EPS range of $2.90 to $3.30.

Third Quarter 2018 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2018 financial results at 9:00 a.m. Eastern Time on October 25, 2018. 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 4,600 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $1.81 billion in revenues during fiscal year 2017. More information can be found at www.fticonsulting.com.

Use of Non-GAAP 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 (GAAP). Certain of these measures are considered non-GAAP financial measuresunder the Securities and Exchange Commission (SEC) rules. Specifically, we have referred to the following non-GAAP 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 below in order to more fully define the components of certain non-GAAP financial measures presented in this earnings 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 and losses on early extinguishment of debt. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenues. We believe that the non-GAAP financial measures, which exclude the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, when considered together with our GAAP financial results and GAAP 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 measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (Adjusted EPS), which are non-GAAP financial measures, as net income and earnings per diluted share (EPS), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes, gain or loss on sale of a business and the adjustment related to the adoption of the 2017 U.S. Tax Cuts and Jobs Act (2017 Tax Act). 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 this non-GAAP financial measure, which excludes the effects of the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes, gain or loss on sale of a business and the adjustment related to the adoption of the 2017 Tax Act, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow as net cash provided by (used in) 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. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Safe Harbor Statement

This press release includes forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,”  “believes,”  “forecasts” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and estimates will be achieved, and the Company’s actual results may differ materially from our expectations, beliefs and estimates. Further, preliminary 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, and other future events, which could impact each of our segments 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, including the 2017 Tax Act, 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, 2017, filed with the SEC, including the risks set forth under “Risks Related to Our Reportable Segments” and “Risks Related to Our Operations,” the risks described under the heading "Part II, Item 1A, Risk Factors" in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC, and in the Company’s other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

           
    September 30,   December 31,
    2018   2017
Assets   (unaudited)    
Current assets          
Cash and cash equivalents     $ 505,867     $ 189,961  
Accounts receivable:          
   Billed receivables     477,408     390,996  
   Unbilled receivables     366,997     312,569  
   Allowances for doubtful accounts and unbilled services     (221,008 )   (180,687 )
     Accounts receivable, net     623,397     522,878  
Current portion of notes receivable     31,318     25,691  
Prepaid expenses and other current assets     45,931     55,649  
   Total current assets     1,206,513     794,179  
Property and equipment, net     82,476     75,075  
Goodwill     1,175,929     1,204,803  
Other intangible assets, net     36,729     44,150  
Notes receivable, net     89,342     98,105  
Other assets     37,849     40,929  
       Total assets     $ 2,628,838     $ 2,257,241  
Liabilities and Stockholders' Equity          
Current liabilities          
Accounts payable, accrued expenses and other     $ 116,222     $ 94,873  
Accrued compensation     286,149     268,513  
Billings in excess of services provided     38,178     46,942  
Current portion of long-term debt, net     296,851      
   Total current liabilities     737,400     410,328  
Long-term debt, net     263,317     396,284  
Deferred income taxes     153,045     124,471  
Other liabilities     123,601     134,187  
       Total liabilities     1,277,363     1,065,270  
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 — 38,356 (2018) and 37,729 (2017)
    384     377  
Additional paid-in capital     315,720     266,035  
Retained earnings     1,173,003     1,045,774  
Accumulated other comprehensive loss     (137,632 )   (120,215 )
     Total stockholders' equity     1,351,475     1,191,971  
       Total liabilities and stockholders' equity     $ 2,628,838     $ 2,257,241  


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

    Three Months Ended
September 30,
   
    2018   2017
         
    (unaudited)
Revenues   $ 513,012     $ 448,962  
Operating expenses        
Direct cost of revenues   336,477     294,851  
Selling, general and administrative expenses   117,448     104,161  
Amortization of other intangible assets   1,975     2,882  
    455,900     401,894  
Operating income   57,112     47,068  
Other income (expense)        
Interest income and other   1,400     1,103  
Interest expense   (7,246 )   (6,760 )
Gain on sale of business   13,031      
    7,185     (5,657 )
Income before income tax provision   64,297     41,411  
Income tax provision   19,964     9,197  
Net income   $ 44,333     $ 32,214  
Earnings per common share ― basic   $ 1.19     $ 0.86  
Weighted average common shares outstanding ― basic   37,318     37,431  
Earnings per common share ― diluted   $ 1.14     $ 0.85  
Weighted average common shares outstanding ― diluted   38,756     37,746  
Other comprehensive income (loss), net of tax        
Foreign currency translation adjustments, net of tax expense of $373 and $0   $ (4,180 )   $ 11,234  
Total other comprehensive income (loss), net of tax   (4,180 )   11,234  
Comprehensive income   $ 40,153     $ 43,448  



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

    Nine Months Ended
September 30,
   
    2018   2017
    (unaudited)
Revenues   $ 1,522,884     $ 1,340,021  
Operating expenses        
Direct cost of revenues   987,912     907,994  
Selling, general and administrative expenses   347,473     319,970  
Special charges       30,074  
Amortization of other intangible assets   6,297     7,797  
    1,341,682     1,265,835  
Operating income   181,202     74,186  
Other income (expense)        
Interest income and other   2,074     3,300  
Interest expense   (20,073 )   (18,811 )
Gain on sale of business   13,031      
    (4,968 )   (15,511 )
Income before income tax provision   176,234     58,675  
Income tax provision   49,347     17,601  
Net income   $ 126,887     $ 41,074  
Earnings per common share ― basic   $ 3.43     $ 1.05  
Weighted average common shares outstanding ― basic   37,008     39,301  
Earnings per common share ― diluted   $ 3.32     $ 1.03  
Weighted average common shares outstanding ― diluted   38,214     39,715  
Other comprehensive income (loss), net of tax        
Foreign currency translation adjustments, net of tax expense of $373 and $0   $ (17,417 )   $ 28,778  
Total other comprehensive income (loss), net of tax   (17,417 )   28,778  
Comprehensive income   $ 109,470     $ 69,852  


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

      Three Months Ended
September 30,
  Nine Months Ended
September 30,
      2018   2017   2018   2017
      (Unaudited)   (Unaudited)
Net income     $ 44,333     $ 32,214     $ 126,887     $ 41,074  
Add back:                  
Special charges                 30,074  
Tax impact of special charges (1)         (832 )       (9,935 )
Remeasurement of acquisition-related contingent
  consideration
                702  
Tax impact of remeasurement of acquisition-
  related contingent consideration
                (269 )
Non-cash interest expense on convertible notes     938         938      
Tax impact of non-cash interest expense on
  convertible notes
    (241 )       (241 )    
Gain on sale of business     (13,031 )       (13,031 )    
Tax impact of gain on sale of business     6,798         6,798      
Adjusted net income     $ 38,797     $ 31,382     $ 121,351     $ 61,646  
Earnings per common share — diluted     $ 1.14     $ 0.85     $ 3.32     $ 1.03  
Add back:                  
Special charges                 0.76  
Tax impact of special charges (1)         (0.02 )       (0.25 )
Remeasurement of acquisition-related contingent
  consideration
                0.02  
Tax impact of remeasurement of acquisition-
  related contingent consideration
                (0.01 )
Non-cash interest expense on convertible notes     0.03         0.03      
Tax impact of non-cash interest expense on
  convertible notes
    (0.01 )       (0.01 )    
Gain on sale of business     (0.34 )       (0.34 )    
Tax impact of gain on sale of business     0.18         0.18      
Adjusted earnings per common share — diluted     $ 1.00     $ 0.83     $ 3.18     $ 1.55  
Weighted average number of common shares
  outstanding ― diluted
    38,756     37,746     38,214     39,715  

(1)       Tax impact of special charges during the three months ended September 30, 2017 represents the favorable impact of a reduction in foreign net operating losses and related valuation allowances.


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

      Year Ended December 31, 2018
      Low   High
Guidance on estimated earnings per common share - diluted (GAAP) (1)   $ 3.53     $ 3.73  
  Non-cash interest expense on convertible notes, net of tax     0.06     0.06  
  Gain on sale of business, net of tax     (0.16 )   (0.16 )
  Loss on early extinguishment of debt, net of tax     0.17     0.17  
Guidance on estimated adjusted earnings per common share (Non-GAAP) (1)   $ 3.60     $ 3.80  

(1)       The forward-looking guidance on estimated 2018 EPS and Adjusted EPS does not reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to the future impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and gain or loss on sale of a business, except for the actual charges taken during the nine months ended September 30, 2018, as these items are dependent on future events that are uncertain and difficult to predict.


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

Three Months Ended September 30, 2018
(unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 44,333  
Interest income and other                           (1,400 )
Interest expense                           7,246  
Gain on sale of business                           (13,031 )
Income tax provision                           19,964  
Operating income   $ 25,252     $ 20,625     $ 21,713     $ 7,926     $ 9,402     $ (27,806 )   $ 57,112  
Depreciation and amortization   779     1,036     1,468     3,537     568     907     8,295  
Amortization of other intangible assets   767     309     57     10     832         1,975  
Adjusted EBITDA   $ 26,798     $ 21,970     $ 23,238     $ 11,473     $ 10,802     $ (26,899 )   $ 67,382  
                             
Nine Months Ended September 30, 2018
(unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 126,887  
Interest income and other                           (2,074 )
Interest expense                           20,073  
Gain on sale of business                           (13,031 )
Income tax provision                           49,347  
Operating income   $ 92,504     $ 71,128     $ 53,385     $ 14,486     $ 27,275     $ (77,576 )   $ 181,202  
Depreciation and amortization   2,534     3,195     4,209     10,141     1,747     2,722     24,548  
Amortization of other intangible assets   2,341     1,019     252     86     2,599         6,297  
Adjusted EBITDA   $ 97,379     $ 75,342     $ 57,846     $ 24,713     $ 31,621     $ (74,854 )   $ 212,047  
                             
Three Months Ended September 30, 2017
(unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 32,214  
Interest income and other                           (1,103 )
Interest expense                           6,760  
Income tax provision                           9,197  
Operating income   $ 24,706     $ 21,127     $ 10,524     $ 3,002     $ 6,536     $ (18,827 )   $ 47,068  
Depreciation and amortization   811     1,012     1,383     2,813     584     867     7,470  
Amortization of other intangible assets   1,217     400     154     158     953         2,882  
Adjusted EBITDA   $ 26,734     $ 22,539     $ 12,061     $ 5,973     $ 8,073     $ (17,960 )   $ 57,420  
                             
Nine Months Ended September 30, 2017
(unaudited)
  Corporate
Finance &
Restructuring
  Forensic and
Litigation
Consulting
  Economic
Consulting
  Technology   Strategic
Communications
  Unallocated
Corporate
  Total
Net income                           $ 41,074  
Interest income and other                           (3,300 )
Interest expense                           18,811  
Income tax provision                           17,601  
Operating income   $ 48,902     $ 34,234     $ 37,034     $ 5,874     $ 8,308     $ (60,166 )   $ 74,186  
Depreciation and amortization   2,360     3,217     4,273     9,020     1,732     3,166     23,768  
Amortization of other intangible assets   2,796     1,196     463     477     2,865         7,797  
Special charges   3,049     10,445     5,910     3,827     3,599     3,244     30,074  
Remeasurement of acquisition-related
  contingent consideration
                  702         702  
Adjusted EBITDA   $ 57,107     $ 49,092     $ 47,680     $ 19,198     $ 17,206     $ (53,756 )   $ 136,527  



FTI CONSULTING, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

   

Segment
Revenues
  Adjusted
EBITDA
  Adjusted
EBITDA

Margin
  Utilization    Average
Billable
Rate
  Revenue-
Generating
Headcount
   (in thousands)               (at period end)
Three Months Ended September 30, 2018
(unaudited)
                     
Corporate Finance & Restructuring $ 135,418     $ 26,798     19.8 %   65 %   $ 414     926  
Forensic and Litigation Consulting 126,684     21,970     17.3 %   63 %   $ 322     1,129  
Economic Consulting 139,166     23,238     16.7 %   71 %   $ 540     705  
Technology (1) 56,692     11,473     20.2 %   N/M   N/M   303  
Strategic Communications (1) 55,052     10,802     19.6 %   N/M   N/M   652  
  $ 513,012     $ 94,281     18.4 %           3,715  
Unallocated Corporate     (26,899 )                
Adjusted EBITDA     $ 67,382     13.1 %            
                       
Nine Months Ended September 30, 2018
(unaudited)
                     
Corporate Finance & Restructuring $ 419,695     $ 97,379     23.2 %   67 %   $ 425     926  
Forensic and Litigation Consulting 388,250     75,342     19.4 %   65 %   $ 325     1,129  
Economic Consulting 405,583     57,846     14.3 %   70 %   $ 515     705  
Technology (1) 144,035     24,713     17.2 %   N/M   N/M   303  
Strategic Communications (1) 165,321     31,621     19.1 %   N/M   N/M   652  
  $ 1,522,884     $ 286,901     18.8 %           3,715  
Unallocated Corporate     (74,854 )                
Adjusted EBITDA     $ 212,047     13.9 %            
                       
Three Months Ended September 30, 2017
(unaudited)
                     
Corporate Finance & Restructuring $ 128,121     $ 26,734     20.9 %   64 %   $ 390     934  
Forensic and Litigation Consulting 118,639     22,539     19.0 %   63 %   $ 326     1,080  
Economic Consulting 111,753     12,061     10.8 %   62 %   $ 520     688  
Technology (1) 42,282     5,973     14.1 %   N/M   N/M   291  
Strategic Communications (1) 48,167     8,073     16.8 %   N/M   N/M   626  
  $ 448,962     $ 75,380     16.8 %           3,619  
Unallocated Corporate     (17,960 )                
Adjusted EBITDA     $ 57,420     12.8 %            
                       
Nine Months Ended September 30, 2017
(unaudited)
                     
Corporate Finance & Restructuring $ 351,509     $ 57,107     16.2 %   61 %   $ 383     934  
Forensic and Litigation Consulting 341,455     49,092     14.4 %   61 %   $ 318     1,080  
Economic Consulting 374,978     47,680     12.7 %   68 %   $ 519     688  
Technology (1) 133,935     19,198     14.3 %   N/M   N/M   291  
Strategic Communications (1) 138,144     17,206     12.5 %   N/M   N/M   626  
  $ 1,340,021     $ 190,283     14.2 %           3,619  
Unallocated Corporate     (53,756 )                
Adjusted EBITDA     $ 136,527     10.2 %            
                       
                       
N/M Not meaningful                      
(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

    Nine Months Ended
September 30,
   
    2018   2017
         
    (unaudited)
Operating activities                
Net income   $ 126,887     $ 41,074  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization   24,548     23,768  
Amortization and impairment of other intangible assets   6,297     7,797  
Acquisition-related contingent consideration   355     1,547  
Provision for doubtful accounts   11,951     10,510  
Non-cash share-based compensation   12,219     12,888  
Gain on sale of business   (13,031 )    
Amortization of debt discount and issuance costs   2,604     1,489  
Other   751     297  
Changes in operating assets and liabilities, net of effects from acquisitions:        
     Accounts receivable, billed and unbilled   (130,369 )   (72,640 )
     Notes receivable   2,659     8,449  
     Prepaid expenses and other assets   (174 )   935  
     Accounts payable, accrued expenses and other   16,150     16,823  
     Income taxes   28,922     8,876  
     Accrued compensation   7,207     (34,123 )
     Billings in excess of services provided   (10,704 )   (3,657 )
                  Net cash provided by operating activities   86,272     24,033  
Investing activities        
Proceeds from sale of business   50,283      
Payments for acquisition of businesses, net of cash received       (8,929 )
Purchases of property and equipment   (27,841 )   (20,021 )
Other   741     74  
                  Net cash provided by (used in) investing activities   23,183     (28,876 )
Financing activities        
Borrowings (repayments) under revolving line of credit, net   (100,000 )   95,000  
Proceeds from issuance of convertible notes   316,250      
Payments of debt issue costs    (8,048 )    
Deposits   2,327     3,585  
Purchase and retirement of common stock   (29,220 )   (155,285 )
Net issuance of common stock under equity compensation plans   31,241     (2,354 )
Payments for acquisition-related contingent consideration   (3,029 )   (79 )
                  Net cash provided by (used in) financing activities   209,521     (59,133 )
Effect of exchange rate changes on cash and cash equivalents   (3,070 )   5,779  
Net increase (decrease) in cash and cash equivalents   315,906     (58,197 )
Cash and cash equivalents, beginning of period   189,961     216,158  
Cash and cash equivalents, end of period   $ 505,867     $ 157,961  
 

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

FTI Consulting, Inc. logo

FTI Consulting, Inc.