| View printer-friendly version |
| Back |
 |
|
FTI Consulting, Inc. Reports Record Results
|
Second Quarter Results
Revenues for the second quarter of 2009 were $360.5 million, an increase of 6.8% compared to revenues of $337.7 million in the prior year period and $347.8 million in the 2009 first quarter. Net income was $37.2 million for the second quarter of 2009, compared to net income of $34.8 million in the prior year period. Diluted earnings per common share were $0.69, compared to $0.65 in the prior year period. EBITDA, as defined below, was $84.6 million, or 23.5% of revenues, compared to $77.6 million, or 23.0% of revenues, in the prior year period. Revenues, net income, diluted earnings per share and EBITDA were all-time quarterly records for the Company. At the end of the second quarter, the Company had 3,414 employees worldwide.
Excluding the effect on results of changes in the exchange rate of the U.S. dollar against non-U.S. currencies, revenues increased 10.3%, net income increased 10.5%, diluted EPS increased 10.2% and EBITDA increased 12.5% as compared to the 2008 second quarter.
Commenting on the quarter, Jack Dunn, FTI's president and chief executive officer, said, "FTI generated another strong performance in the second quarter despite a difficult global economy. The world continued to seek its way from the panic and paralysis that were prevalent during the credit crisis of last year to a more stable environment that allows for deliberate steps to develop strategies and plan for future opportunities and challenges. In this context we reported all-time record results, with solid performance from our existing businesses and growth from acquisitions propelling higher revenues, net income, earnings per share and EBITDA compared to both an extremely strong period a year ago and a very good first quarter. Our results were driven by the strength of our restructuring activities, higher activity in fraud investigations and regulated industries and increasing momentum in strategic M&A in certain of our practices. This is a tribute to the depth of our intellectual capital, our business model with its complementary practices and the diversity of our global platform, all of which contribute to our goal to do well across all market and economic cycles.
"In the quarter we continued to aggressively convert this excellent performance into cash. We generated $55 million of operating cash flow on the strength of higher net income and our focus on accounts receivable collection. This allowed us to exit the quarter with cash of $213 million, up from $158 million a quarter ago, which puts us in excellent financial position to invest in our business and expand our talent pool at a time when other consulting firms are retrenching. We are continuing to invest in key hires globally across our practices and further build out our platform and strengthen our presence in geographical markets outside the United States.
"We are pleased with the progress of our businesses and look forward to further growth and stronger year over year earnings comparisons in the second half of 2009. Based on our strong first half performance we are increasing our EPS guidance for the year. Even considering the usual seasonal impact of the summer months on our third quarter, we expect to experience rising momentum into the fourth quarter which accelerates through 2010."
Second Quarter Business Segment Results
Corporate Finance/Restructuring
Revenues in the Corporate Finance/Restructuring segment increased to a record $134.0 million from $96.1 million in the prior year period, driven by organic growth of 29.8%, and supplemented by the contributions of the acquisitions of CXO and our Toronto-based restructuring practice during the last 12 months. Sequentially, revenues increased from $127.5 million in the first quarter. Segment EBITDA increased 60.2% to $47.4 million, or 35.4% of segment revenues, compared to $29.6 million, or 30.8% of segment revenues, in the prior year period and $40.7 million, or 31.9%, in the first quarter. The segment continues to see historically high demand for restructuring services from a broad range of economic sectors, with particular strength in the second quarter in the automotive, real estate and energy/utility sectors, as well as ongoing activity in the retail, construction, leisure and financial services markets. The worldwide recession continued to generate demand for restructuring services, enabling the segment's European practice to more than double its revenue compared to the same period last year, and the recently-added Canadian/Latin American practice to quickly begin to make substantial contributions to the segment's revenue. To further meet global demand, the segment recently expanded its London-based European Corporate Finance practice with the launch of a restructuring business in Munich, Germany.
Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment were $65.5 million compared with $69.3 million in the prior year period and $66.9 million in the 2009 first quarter. Segment EBITDA increased 3.3% to $16.2 million, or 24.8% of segment revenues, compared to $15.7 million, or 22.7% of segment revenues, in the prior year period. Sequentially, segment EBITDA grew 3.3% from the first quarter of 2009, and segment EBITDA margins improved by 130 basis points. While the environment for generic litigation services remained soft, the segment benefited from several large global investigations cases and increasing emphasis on its specialized practices including intellectual property, construction, regulated industries and South American investigations.
Technology
Revenues in the Technology segment increased 5.5% to a record $59.4 million, compared to $56.3 million in the prior year period. Segment revenues grew 6.3% on a sequential basis from the first quarter of 2009. Segment EBITDA was $23.8 million, compared to $21.2 million in the prior year period. Segment EBITDA was 40.1% of segment revenues, compared to 37.7% in the prior year period. On a sequential basis, segment EBITDA grew 23.2% from the first quarter of 2009, and segment EBITDA margins improved by 550 basis points. Large fraud investigations, bankruptcy and M&A second requests were significant contributors to second quarter revenue, as were product liability cases, although to a much smaller degree than in the prior year. The strong margins in the quarter resulted from increased revenue, particularly in software sales that carry greater margins, and certain expense control measures. These improvements more than offset a substantially greater investment in research and development.
Economic Consulting
Revenues in the Economic Consulting segment increased 6.2% to a record $57.1 million, compared to $53.8 million in the prior year period. On a sequential basis, segment revenues increased 4.2% from the first quarter of 2009. Segment EBITDA was $10.3 million, or 18.1% of segment revenues, compared to $14.0 million, or 26.0% of segment revenues, in the prior year period. The segment was active in regulatory issues in pharmaceuticals, railroads and telecommunications. The 26 professionals recently hired in the segment's new practices in the U.K., Canada, New York and Los Angeles have begun to gain traction in their respective regions, and have been experiencing rapidly rising utilization and revenue contributions. While the rate of retention on new securities and commercial financial engagements in the segment began to accelerate in the second quarter, utilization has been hampered by the slow commencement of work.
Strategic Communications
Revenues in the Strategic Communications segment were $44.6 million, compared to $62.2 million in the prior year period. Segment EBITDA was $5.9 million, or 13.2% of segment revenues, compared to $16.4 million, or 26.4% of revenues, in the prior year period. Weakness in foreign currencies relative to a year ago reduced revenues by $6.3 million and segment EBITDA by $1.7 million, respectively. The segment continued to be negatively impacted by both the significantly lower level of capital markets activity, which reduced revenues from M&A- and IPO-related work, the global economic recession, which has caused clients to reduce their spending on discretionary communications programs, and the impact of the stronger U.S. Dollar as compared to a year ago. The segment began to stabilize in the second quarter and grew sequentially by 4.2% compared to the first quarter. Most recently, the segment is beginning to experience increasing activity in capital market related activities including possible IPO's in Asia and strategic M&A assignments.
2009 Guidance Update
Based on current market conditions, the Company is increasing its 2009 guidance for fully diluted EPS to a range of $2.65 to $2.75. The Company is reaffirming its previous guidance for 2009 revenues of between $1.45 billion and $1.55 billion.
Second Quarter Conference Call
FTI will hold a conference call for analysts and investors to discuss second quarter financial results at 8:30 a.m. Eastern time on Tuesday, August 4, 2009. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website, www.fticonsulting.com.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,400 employees located in most major business centers in the world, we work closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. More information can be found at www.fticonsulting.com.
Use of Non-GAAP Measure
Note: We define EBITDA as operating income before depreciation and amortization of intangible assets plus non-operating litigation settlements. We use EBITDA in evaluating financial performance. Although EBITDA is not a measure of financial condition or performance determined in accordance with GAAP we believe that it can be a useful operating performance measure for evaluating our results of operation as compared from period to period and as compared to our competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in our industry. We use EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee bonuses. We also use EBITDA to value the businesses we acquire or anticipate acquiring. Reconciliations of EBITDA to Net Income and segment EBITDA to segment operating profit are included in the accompanying tables to today's press release. EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. This non-GAAP measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income.
Safe Harbor Statement
This press release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved or that actual results will not differ from expectations. The Company has experienced fluctuating 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 the current global financial crisis and economic conditions, the crisis in and deterioration of the financial and real estate markets, 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.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(in thousands, except per share data)
-------------------------------------
Six Months Ended
June 30,
--------
2009 2008 (1)
---- --------
(unaudited)
Revenues $708,371 $644,772
-------- --------
Operating expenses
Direct cost of revenues 386,593 360,687
Selling, general and administrative expense 177,595 150,345
Amortization of other intangible assets 12,199 7,355
------ -----
576,387 518,387
------- -------
Operating income 131,984 126,385
------- -------
Other income (expense)
Interest income and other 2,755 5,400
Interest expense (22,043) (22,906)
Litigation settlement gains (losses), net 250 (436)
--- ----
(19,038) (17,942)
------- -------
Income before income tax provision 112,946 108,443
Income tax provision 44,049 42,935
------ ------
Net income $68,897 $65,508
======= =======
Earnings per common share - basic $1.37 $1.34
===== =====
Weighted average common shares outstanding - basic 50,278 48,740
====== ======
Earnings per common share - diluted $1.29 $1.23
===== =====
Weighted average common shares outstanding - diluted 53,424 53,212
====== ======
(1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
Convertible Debt Instruments that May be Settled in Cash Upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
addresses the accounting for convertible debt instruments that may be
settled in cash upon conversion. Our 3-3/4% Convertible Senior Notes
due 2012 issued in August 2005 are subject to FSP APB 14-1. The
adoption of FSP APB 14-1 requires retrospective application of its
effects to all previous years. The adoption of FSP APB 14-1 resulted
in a $2.0 million increase in interest expense, a $0.8 decrease in
income tax provision, a $1.2 million decrease in net income and a
decrease in basic and fully diluted earnings per share of $.03 and
$.02, respectively, for the six months ended June 30, 2008 as
compared to the amounts previously reported.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008
(in thousands, except per share data)
-------------------------------------
Three Months Ended
June 30,
--------
2009 2008 (1)
---- --------
(unaudited)
Revenues $360,525 $337,670
-------- --------
Operating expenses
Direct cost of revenues 194,181 188,166
Selling, general and administrative expense 88,842 77,773
Amortization of other intangible assets 6,149 4,457
----- -----
289,172 270,396
------- -------
Operating income 71,353 67,274
------ ------
Other income (expense)
Interest income and other 702 2,089
Interest expense (11,030) (11,307)
Litigation settlement gains (losses), net - (435)
- ----
(10,328) (9,653)
------- ------
Income before income tax provision 61,025 57,621
Income tax provision 23,800 22,813
------ ------
Net income $37,225 $34,808
======= =======
Earnings per common share - basic $0.74 $0.71
===== =====
Weighted average common shares outstanding - basic 50,384 49,155
====== ======
Earnings per common share - diluted $0.69 $0.65
===== =====
Weighted average common shares outstanding - diluted 53,835 53,700
====== ======
(1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
Convertible Debt Instruments that May be Settled in Cash Upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
addresses the accounting for convertible debt instruments that may be
settled in cash upon conversion. Our 3-3/4% Convertible Senior Notes
due 2012 issued in August 2005 are subject to FSP APB 14-1. The
adoption of FSP APB 14-1 requires retrospective application of its
effects to all previous years. The adoption of FSP APB 14-1 resulted
in a $1.0 million increase in interest expense, a $0.4 decrease in
income tax provision, a $0.6 million decrease in net income and a
$.01 decrease in basic and fully diluted earnings per share
for the quarter ended June 30, 2008 as compared to the amounts
previously reported.
FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
(Unaudited)
-----------
Utiliz- Average Revenue-
EBITDA ation Billable Generating
Revenues (1) Margin (2) Rate (2) Headcount
-------- ------- ------ ------- -------- ---------
(in thousands)
------------------ -----------------
Three Months Ended
June 30, 2009
Corporate
Finance/
Restructuring $133,970 $47,445 35.4% 76% $437 736
Forensic and
Litigation
Consulting 65,502 16,238 24.8% 73% $347 618
Strategic
Communications 44,550 5,879 13.2% N/M N/M 580
Technology 59,380 23,804 40.1% N/M N/M 348
Economic
Consulting 57,123 10,345 18.1% 75% $456 290
------ ------ ---
$360,525 103,711 28.8% N/M N/M 2,572
======== =====
Corporate (19,132)
-------
EBITDA (1) $84,579 23.5%
=======
----------------
Six Months Ended
June 30, 2009
Corporate
Finance/
Restructuring $261,512 $88,166 33.7% 80% $427 736
Forensic and
Litigation
Consulting 132,352 31,951 24.1% 75% $341 618
Strategic
Communications 87,321 11,675 13.4% N/M N/M 580
Technology 115,227 43,130 37.4% N/M N/M 348
Economic
Consulting 111,959 20,664 18.5% 76% $455 290
------- ------ ---
$708,371 195,586 27.6% N/M N/M 2,572
======== =====
Corporate (37,044)
-------
EBITDA (1) $158,542 22.4%
========
------------------
Three Months Ended
June 30, 2008
Corporate
Finance/
Restructuring $96,123 $29,624 30.8% 75% $429 599
Forensic and
Litigation
Consulting 69,310 15,717 22.7% 73% $331 627
Strategic
Communications 62,197 16,428 26.4% N/M N/M 563
Technology 56,275 21,213 37.7% N/M N/M 335
Economic
Consulting 53,765 13,987 26.0% 83% $450 243
------ ------ ---
$337,670 96,969 28.7% N/M N/M 2,367
======== =====
Corporate (19,413)
-------
EBITDA (1) $77,556 23.0%
=======
----------------
Six Months Ended
June 30, 2008
Corporate
Finance/
Restructuring $175,406 $51,534 29.4% 78% $428 599
Forensic and
Litigation
Consulting 129,565 30,373 23.4% 74% $332 627
Strategic
Communications 116,811 29,107 24.9% N/M N/M 563
Technology 112,810 44,535 39.5% N/M N/M 335
Economic
Consulting 110,180 27,303 24.8% 86% $449 243
------- ------ ---
$644,772 182,852 28.4% N/M N/M 2,367
======== =====
Corporate (37,262)
-------
EBITDA (1) $145,590 22.6%
========
(1) We define EBITDA as operating income before depreciation and
amortization of intangible assets plus non-operating litigation
settlements. Although EBITDA is not a measure of financial condition
or performance determined in accordance with generally accepted
accounting principles (GAAP), we believe that it 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 credit rating
agencies to value and compare the financial performance of companies
in our industry. We use EBITDA to evaluate and compare the operating
performance of our segments and it is one of the primary measures
used to determine employee bonuses. We also use EBITDA to value the
businesses we acquire or anticipate acquiring. EBITDA is not defined
in the same manner by all companies and may not be comparable to
other similarly titled measures of other companies unless the
definition is the same. This non-GAAP measure should be considered
in addition to, but not as a substitute for or superior to, the
information contained in our statements of income. See also our
reconciliation of Non-GAAP financial measures.
(2) The majority of the Technology and Strategic Communications segments'
revenues are not generated on an hourly basis. Accordingly,
utilization and average billable rate metrics are not presented as
they are not meaningful. Utilization where presented is based on a
2,032 hour year.
RECONCILIATION OF OPERATING INCOME AND NET INCOME TO EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
(Unaudited)
-----------
Three Months Ended Corporate Forensic and Strategic
June 30, 2009 Finance / Litigation Communi-
Restructuring Consulting cations Technology
-------------- ------------ ---------- ----------
Net income
Interest income
and other
Interest expense
Litigation
Settlement losses
Income tax provision
Operating income $45,042 $15,050 $3,742 $18,805
Depreciation 815 575 798 2,942
Amortization of other
intangible assets 1,588 613 1,339 2,057
Litigation
settlement gains - - - -
- - - -
EBITDA (1) 47,445 16,238 5,879 23,804
====== ====== ===== ======
Six Months Ended
June 30, 2009
Net income
Interest income
and other
Interest expense
Litigation settlement
losses
Income tax provision
Operating income $83,417 $29,508 $7,618 $33,111
Depreciation 1,579 1,146 1,550 5,891
Amortization of other
intangible assets 3,170 1,297 2,507 4,128
Litigation
settlement losses - - - -
- - - -
EBITDA (1) 88,166 31,951 11,675 43,130
====== ====== ====== ======
Three Months Ended
June 30, 2008 (2)
Net income
Interest income
and other
Interest expense
Litigation settlement
losses
Income tax provision
Operating income $27,492 $14,278 $14,572 $18,720
Depreciation 666 640 696 2,466
Amortization of other
intangible assets 1,466 799 1,360 262
Litigation settlement
losses - - (200) (235)
- - ---- ----
EBITDA (1) 29,624 15,717 16,428 21,213
====== ====== ====== ======
Six Months Ended
June 30, 2008 (2)
Net income (loss)
Interest income
and other
Interest expense
Litigation settlement
losses
Income tax provision
Operating income $48,841 $27,797 $25,378 $39,137
Depreciation 1,187 1,264 1,358 4,808
Amortization of other
intangible assets 1,506 1,312 2,572 825
Litigation settlement
losses - - (201) (235)
- - ---- ----
EBITDA (1) 51,534 30,373 29,107 44,535
====== ====== ====== ======
Three Months Ended Economic
June 30, 2009 Consulting Corp HQ Total
----------- ------- -----
Net income $37,225
Interest income and other (702)
Interest expense 11,030
Litigation settlement losses -
Income tax provision 23,800
------
Operating income $9,373 $(20,659) 71,353
Depreciation 420 1,527 7,077
Amortization of other
intangible assets 552 - 6,149
Litigation settlement gains - - -
- - -
EBITDA (1) 10,345 (19,132) 84,579
====== ======= ======
Six Months Ended June 30, 2009
Net income $68,897
Interest income and other (2,755)
Interest expense 22,043
Litigation settlement losses (250)
Income tax provision 44,049
------
Operating income $18,740 $(40,410) 131,984
Depreciation 827 3,116 14,109
Amortization of other
intangible assets 1,097 - 12,199
Litigation settlement losses - 250 250
- --- ---
EBITDA (1) 20,664 (37,044) 158,542
====== ======= =======
Three Months Ended June 30, 2008 (2)
Net income $34,808
Interest income and other (2,089)
Interest expense 11,307
Litigation settlement losses 435
Income tax provision 22,813
------
Operating income $13,035 $(20,823) 67,274
Depreciation 382 1,410 6,260
Amortization of other
intangible assets 570 - 4,457
Litigation settlement losses - - (435)
- - ----
EBITDA (1) 13,987 (19,413) 77,556
====== ======= ======
Six Months Ended June 30, 2008 (2)
Net income (loss) $65,508
Interest income and other (5,400)
Interest expense 22,906
Litigation settlement losses 436
Income tax provision 42,935
------
Operating income $25,298 $(40,066) 126,385
Depreciation 865 2,804 12,286
Amortization of other
intangible assets 1,140 - 7,355
Litigation settlement losses - - (436)
- - ----
EBITDA (1) 27,303 (37,262) 145,590
====== ======= =======
(1) We define EBITDA as operating income before depreciation and
amortization of intangible assets plus non-operating litigation
settlements. Although EBITDA is not a measure of financial condition
or performance determined in accordance with generally accepted
accounting principles (GAAP), we believe that it 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 credit rating
agencies to value and compare the financial performance of companies
in our industry. We use EBITDA to evaluate and compare the operating
performance of our segments and it is one of the primary measures
used to determine employee bonuses. We also use EBITDA to value the
businesses we acquire or anticipate acquiring. EBITDA is not defined
in the same manner by all companies and may not be comparable to
other similarly titled measures of other companies unless the
definition is the same. This non-GAAP measure should be considered in
addition to, but not as a substitute for or superior to, the
information contained in our statements of income.
(2) As of January 1, 2009 we adopted FSP No. APB 14-1, "Accounting for
Convertible Debt Instruments that May be Settled in Cash upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
addresses the accounting for convertible debt that may be settled in
cash upon conversion. Our 3-3/4% Convertible Senior Subordinated Notes
due 2012 issued in August 2005 are subject to FSP APB 14-1. The
adoption of FSP APB 14-1 requires retrospective application of its
effects to all previous years. The adoption of FSP APB 14-1 resulted
in a $1.0 million increase in interest expense, a $0.4 million
decrease in income tax provision, and a $0.6 million decrease in net
income for the quarter ended June 30, 2008 as compared to the amounts
previously reported. For the six months ended June 30, 2008, the
adoption of FSP APB 14-1 resulted in a $2.0 million increase in
interest expense, a $0.8 million decrease in income tax provision, and
a $1.2 million decrease in net income as compared to the amounts
previously reported.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(in thousands)
--------------
Six Months Ended
June 30,
--------
2009 2008 (1)
---- --------
(unaudited)
Operating activities
Net income $68,897 $65,508
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 14,109 12,286
Amortization of other intangible assets 12,199 7,355
Provision for doubtful accounts 12,212 8,564
Non-cash share-based compensation 13,349 14,172
Excess tax benefits from share-based compensation (2,761) (4,682)
Non-cash interest expense 3,698 3,517
Other 1,308 (188)
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable, billed and unbilled (47,807) (63,513)
Notes receivable (19,511) (7,158)
Prepaid expenses and other assets 3,796 (9,555)
Accounts payable, accrued expenses and other (15,836) 4,422
Income taxes 14,151 27,640
Accrued compensation (10,371) (493)
Billings in excess of services provided (679) (911)
---- ----
Net cash provided by
operating activities 46,754 56,964
------ ------
Investing activities
Payments for acquisition of businesses, including
contingent payments and acquisition costs, net of
cash received (37,654) (225,183)
Purchases of property and equipment (11,687) (17,843)
Other 307 (1,059)
--- ------
Net cash (used in) investing
activities (49,034) (244,085)
------- --------
Financing activities
Payments of long-term debt and capital lease
obligations (551) (7,239)
Cash received for settlement of interest rate swaps 2,288 -
Issuance of common stock under equity compensation
plans 13,098 12,006
Excess tax benefit from share based compensation 2,761 4,682
----- -----
Net cash provided by
financing activities 17,596 9,449
------ -----
Effect of exchange rate changes and fair value
adjustments on cash and cash equivalents 5,934 (217)
----- ----
Net increase (decrease) in cash and cash equivalents 21,250 (177,889)
Cash and cash equivalents, beginning of period 191,842 360,463
------- -------
Cash and cash equivalents, end of period $213,092 $182,574
======== ========
(1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
Convertible Debt Instruments that May be Settled in Cash Upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
addresses the accounting for convertible debt instruments that may
be settled in cash upon conversion. Our 3-3/4% Convertible Senior
Notes due 2012 issued in August 2005 are subject to FSP APB 14-1. The
adoption of FSP APB 14-1 requires retrospective application of its
effects to all previous years.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2009 AND DECEMBER 31, 2008
(in thousands, except per share amounts)
----------------------------------------
June 30, December 31,
2009 2008 (1)
---- --------
Assets (unaudited)
Current assets
Cash and cash equivalents $213,092 $191,842
Accounts receivable
Billed 267,734 237,009
Unbilled 127,200 98,340
Allowance for doubtful accounts and
unbilled services (64,581) (45,309)
------- -------
330,353 290,040
Notes receivable 20,238 15,145
Prepaid expenses and other current assets 25,624 31,055
Deferred income taxes 24,607 24,372
------ ------
Total current assets 613,914 552,454
Property and equipment, net 76,760 78,575
Goodwill 1,177,325 1,151,388
Other intangible assets, net 184,318 189,304
Notes receivable, net of current portion 72,099 56,500
Other assets 53,645 59,349
------ ------
Total assets $2,178,061 $2,087,570
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and
other $45,099 $109,036
Accrued compensation 114,535 133,103
Current portion of long-term debt and
capital lease obligations 149,347 132,915
Billings in excess of services provided 30,569 30,872
------ ------
Total current liabilities 339,550 405,926
Long-term debt and capital lease obligations,
net of current portion 418,187 418,592
Deferred income taxes 92,725 83,777
Other liabilities 49,780 45,037
------ ------
Total liabilities 900,242 953,332
Stockholders' equity
Preferred stock, $0.01 par value; 5,000
shares authorized, none outstanding - -
Common stock, $0.01 par value; 75,000
shares authorized; 75,000 shares issued and
outstanding - 51,695 (2009) and 50,934
(2008) 517 509
Additional paid-in capital 768,173 735,180
Retained earnings 547,779 478,882
Accumulated other comprehensive income (38,650) (80,333)
------- -------
Total stockholders' equity 1,277,819 1,134,238
--------- ---------
Total liabilities and stockholders'
equity $2,178,061 $2,087,570
========== ==========
(1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for
Convertible Debt Instruments that May be Settled in Cash Upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which
addresses the accounting for convertible debt instruments that may
be settled in cash upon conversion. Our 3-3/4% Convertible Senior
Notes due 2012 issued in August 2005 are subject to FSP APB 14-1.
The adoption of FSP APB 14-1 requires retrospective application of its
effects to all previous years. The adoption of this FSP resulted in a
$0.6 million decrease in other assets, a $18.0 decrease in the current
portion of long-term debt, a $7.0 million increase in deferred income
taxes, an $18.0 million increase in additional paid in capital
and a $7.6 million decrease in retained earnings from the amounts
previously reported at December 31, 2008.
SOURCE FTI Consulting, Inc.
http://www.fticonsulting.com