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FTI Consulting Reports Second Quarter 2020 Financial Results
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- Second Quarter 2020 Revenues of
$607.9 Million , Up 0.3% Compared to$606.1 Million in PriorYear Quarter - Second Quarter 2020 EPS of
$1.27 , Down 24.9% Compared to$1.69 in PriorYear Quarter ; Second Quarter 2020 Adjusted EPS of$1.32 , Down 23.7% Compared to$1.73 in PriorYear Quarter - Announces
$200.0 Million Increase in Share Repurchase Authorization and Reaffirms 2020 Guidance
Second quarter 2020 revenues of
Second quarter 2020 fully diluted earnings per share ("EPS") of
Cash Position and Capital Allocation
Net cash provided by operating activities of
Cash and cash equivalents of
During the quarter, the Company repurchased 470,853 shares of its common stock at an average price per share of
Under the program, FTI Consulting may repurchase shares in open-market purchases or any other method in accordance with applicable securities laws and regulations. The specific timing and amount of repurchases will be determined by FTI Consulting’s management, in its discretion, and will vary based on market conditions, securities law limitations and other factors. The repurchases may be funded using available cash on hand or a combination of cash and available borrowings under FTI Consulting’s senior secured revolving bank credit facility.
Second Quarter 2020 Segment Results
Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased
Revenues in the
Revenues in the
Technology
Revenues in the Technology segment decreased
Revenues in the
2020 Guidance
The Company is reaffirming its full year 2020 revenue guidance of between $2.450 billion and $2.550 billion. The Company is also reaffirming its full year 2020 EPS guidance of between $5.32 and $5.82 and full year 2020 Adjusted EPS guidance of between $5.50 and $6.00. The variance between EPS and Adjusted EPS guidance for full year 2020 includes an estimated non-cash interest expense of $0.18 per share related to the Company's 2023 Convertible Notes.
Second Quarter 2020 Conference Call
About
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 in
- 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 (Loss) 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 (Loss) 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 (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) 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 Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.
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 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 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 (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 Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. 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 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, 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; 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
FINANCIAL TABLES FOLLOW
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 304,206 | $ | 369,373 | ||||
| Accounts receivable: | ||||||||
| Billed receivables | 578,722 | 540,584 | ||||||
| Unbilled receivables | 435,234 | 418,288 | ||||||
| Allowances for doubtful accounts and unbilled services | (299,038 | ) | (265,500 | ) | ||||
| Accounts receivable, net | 714,918 | 693,372 | ||||||
| Current portion of notes receivable | 32,279 | 35,106 | ||||||
| Prepaid expenses and other current assets | 75,938 | 80,810 | ||||||
| Total current assets | 1,127,341 | 1,178,661 | ||||||
| Property and equipment, net | 91,753 | 93,672 | ||||||
| Operating lease assets | 152,245 | 159,777 | ||||||
| 1,196,162 | 1,202,767 | |||||||
| Other intangible assets, net | 33,588 | 38,432 | ||||||
| Notes receivable, net | 64,646 | 69,033 | ||||||
| Other assets | 39,172 | 40,800 | ||||||
| Total assets | $ | 2,704,907 | $ | 2,783,142 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable, accrued expenses and other | $ | 163,162 | $ | 158,936 | ||||
| Accrued compensation | 314,018 | 416,903 | ||||||
| Billings in excess of services provided | 40,288 | 36,698 | ||||||
| Total current liabilities | 517,468 | 612,537 | ||||||
| Long-term debt, net | 315,808 | 275,609 | ||||||
| Noncurrent operating lease liabilities | 161,753 | 176,378 | ||||||
| Deferred income taxes | 155,293 | 151,352 | ||||||
| Other liabilities | 75,482 | 78,124 | ||||||
| Total liabilities | 1,225,804 | 1,294,000 | ||||||
| Stockholders' equity | ||||||||
| Preferred stock, |
— | — | ||||||
| Common stock, |
367 | 374 | ||||||
| Additional paid-in capital | 122,743 | 216,162 | ||||||
| Retained earnings | 1,518,374 | 1,413,453 | ||||||
| Accumulated other comprehensive loss | (162,381 | ) | (140,847 | ) | ||||
| Total stockholders' equity | 1,479,103 | 1,489,142 | ||||||
| Total liabilities and stockholders' equity | $ | 2,704,907 | $ | 2,783,142 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
| Three Months Ended |
|||||||
| 2020 | 2019 | ||||||
| (unaudited) | |||||||
| Revenues | $ | 607,852 | $ | 606,119 | |||
| Operating expenses | |||||||
| Direct cost of revenues | 413,011 | 386,266 | |||||
| Selling, general and administrative expenses | 126,928 | 129,906 | |||||
| Amortization of other intangible assets | 2,314 | 1,852 | |||||
| 542,253 | 518,024 | ||||||
| Operating income | 65,599 | 88,095 | |||||
| Other income (expense) | |||||||
| Interest income and other | 2,202 | 2,609 | |||||
| Interest expense | (5,157 | ) | (4,793 | ) | |||
| (2,955 | ) | (2,184 | ) | ||||
| Income before income tax provision | 62,644 | 85,911 | |||||
| Income tax provision | 14,470 | 21,313 | |||||
| Net income | $ | 48,174 | $ | 64,598 | |||
| Earnings per common share ― basic | $ | 1.33 | $ | 1.75 | |||
| Weighted average common shares outstanding ― basic | 36,169 | 36,960 | |||||
| Earnings per common share ― diluted | $ | 1.27 | $ | 1.69 | |||
| Weighted average common shares outstanding ― diluted | 37,852 | 38,168 | |||||
| Other comprehensive income (loss), net of tax | |||||||
| Foreign currency translation adjustments, net of tax expense of |
$ | 9,568 | $ | (4,815 | ) | ||
| Total other comprehensive income (loss), net of tax | 9,568 | (4,815 | ) | ||||
| Comprehensive income | $ | 57,742 | $ | 59,783 | |||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
| Six Months Ended |
|||||||
| 2020 | 2019 | ||||||
| (unaudited) | |||||||
| Revenues | $ | 1,212,445 | $ | 1,157,393 | |||
| Operating expenses | |||||||
| Direct cost of revenues | 815,258 | 735,332 | |||||
| Selling, general and administrative expenses | 253,887 | 243,091 | |||||
| Amortization of other intangible assets | 4,645 | 3,713 | |||||
| 1,073,790 | 982,136 | ||||||
| Operating income | 138,655 | 175,257 | |||||
| Other income (expense) | |||||||
| Interest income and other | 7,219 | 2,768 | |||||
| Interest expense | (10,018 | ) | (9,539 | ) | |||
| (2,799 | ) | (6,771 | ) | ||||
| Income before income tax provision | 135,856 | 168,486 | |||||
| Income tax provision | 30,935 | 41,243 | |||||
| Net income | $ | 104,921 | $ | 127,243 | |||
| Earnings per common share ― basic | $ | 2.89 | $ | 3.44 | |||
| Weighted average common shares outstanding ― basic | 36,292 | 36,970 | |||||
| Earnings per common share ― diluted | $ | 2.76 | $ | 3.33 | |||
| Weighted average common shares outstanding ― diluted | 38,021 | 38,193 | |||||
| Other comprehensive income (loss), net of tax | |||||||
| Foreign currency translation adjustments, net of tax expense of |
$ | (21,534 | ) | $ | 408 | ||
| Total other comprehensive income (loss), net of tax | (21,534 | ) | 408 | ||||
| Comprehensive income | $ | 83,387 | $ | 127,651 | |||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
| Three Months Ended |
Six Months Ended |
|||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Net income | $ | 48,174 | $ | 64,598 | $ | 104,921 | $ | 127,243 | ||||||||
| Add back: | ||||||||||||||||
| Non-cash interest expense on convertible notes | 2,255 | 2,137 | 4,480 | 4,245 | ||||||||||||
| Tax impact of non-cash interest expense on convertible notes | (586 | ) | (556 | ) | (1,165 | ) | (1,103 | ) | ||||||||
| Tax impact of gain on sale of business (1) | — | — | — | (2,097 | ) | |||||||||||
| Adjusted net income | $ | 49,843 | $ | 66,179 | $ | 108,236 | $ | 128,288 | ||||||||
| Earnings per common share — diluted | $ | 1.27 | $ | 1.69 | $ | 2.76 | $ | 3.33 | ||||||||
| Add back: | ||||||||||||||||
| Non-cash interest expense on convertible notes | 0.06 | 0.05 | 0.12 | 0.11 | ||||||||||||
| Tax impact of non-cash interest expense on convertible notes | (0.01 | ) | (0.01 | ) | (0.03 | ) | (0.03 | ) | ||||||||
| Tax impact of gain on sale of business (1) | — | — | — | (0.05 | ) | |||||||||||
| Adjusted earnings per common share — diluted | $ | 1.32 | $ | 1.73 | $ | 2.85 | $ | 3.36 | ||||||||
| Weighted average number of common shares outstanding ― diluted | 37,852 | 38,168 | 38,021 | 38,193 | ||||||||||||
_______________________
(1) For the six months ended
RECONCILIATION OF EPS GUIDANCE TO ADJUSTED EPS GUIDANCE
| Year Ended |
||||||||
| Low | High | |||||||
| Guidance on estimated earnings per common share — diluted (GAAP) (1) | $ | 5.32 | $ | 5.82 | ||||
| Non-cash interest expense on convertible notes, net of tax | 0.18 | 0.18 | ||||||
| Guidance on estimated adjusted earnings per common share (non-GAAP) (1) | $ | 5.50 | $ | 6.00 | ||||
_______________________
(1) The forward-looking guidance on estimated 2020 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, losses on early extinguishment of debt, or gain or loss on sale of a business as these items are dependent on future events that are uncertain and difficult to predict. The forward-looking guidance excludes any shares of common stock potentially issuable upon conversion of the 2023 Convertible Notes from the calculation of EPS.
| Three Months Ended (unaudited) |
Corporate Finance & Restructuring |
Forensic and Litigation Consulting |
Economic Consulting |
Technology | Strategic Communications |
Unallocated Corporate |
Total | |||||||||||||||||||||
| Net income | $ | 48,174 | ||||||||||||||||||||||||||
| Interest income and other | (2,202 | ) | ||||||||||||||||||||||||||
| Interest expense | 5,157 | |||||||||||||||||||||||||||
| Income tax provision | 14,470 | |||||||||||||||||||||||||||
| Operating income (loss) | $ | 73,811 | $ | (10,382 | ) | $ | 20,216 | $ | 3,432 | $ | 8,798 | $ | (30,276 | ) | $ | 65,599 | ||||||||||||
| Depreciation and amortization | 1,038 | 1,165 | 1,433 | 3,003 | 552 | 693 | 7,884 | |||||||||||||||||||||
| Amortization of other intangible assets | 1,415 | 170 | 45 | — | 684 | — | 2,314 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 76,264 | $ | (9,047 | ) | $ | 21,694 | $ | 6,435 | $ | 10,034 | $ | (29,583 | ) | $ | 75,797 | ||||||||||||
| Six Months Ended (unaudited) |
Corporate Finance & Restructuring |
Forensic and Litigation Consulting |
Economic Consulting |
Technology | Strategic Communications |
Unallocated Corporate |
Total | |||||||||||||||||||||
| Net income | $ | 104,921 | ||||||||||||||||||||||||||
| Interest income and other | (7,219 | ) | ||||||||||||||||||||||||||
| Interest expense | 10,018 | |||||||||||||||||||||||||||
| Income tax provision | 30,935 | |||||||||||||||||||||||||||
| Operating income | $ | 120,475 | $ | 9,124 | $ | 31,612 | $ | 15,021 | $ | 16,290 | $ | (53,867 | ) | $ | 138,655 | |||||||||||||
| Depreciation and amortization | 2,017 | 2,581 | 2,703 | 5,898 | 1,138 | 1,370 | 15,707 | |||||||||||||||||||||
| Amortization of other intangible assets | 2,718 | 456 | 89 | — | 1,382 | — | 4,645 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 125,210 | $ | 12,161 | $ | 34,404 | $ | 20,919 | $ | 18,810 | $ | (52,497 | ) | $ | 159,007 | |||||||||||||
| Three Months Ended (unaudited) |
Corporate Finance & Restructuring |
Forensic and Litigation Consulting |
Economic Consulting |
Technology | Strategic Communications |
Unallocated Corporate |
Total | |||||||||||||||||||||
| Net income | $ | 64,598 | ||||||||||||||||||||||||||
| Interest income and other | (2,609 | ) | ||||||||||||||||||||||||||
| Interest expense | 4,793 | |||||||||||||||||||||||||||
| Income tax provision | 21,313 | |||||||||||||||||||||||||||
| Operating income | $ | 48,779 | $ | 26,779 | $ | 21,747 | $ | 10,550 | $ | 9,132 | $ | (28,892 | ) | $ | 88,095 | |||||||||||||
| Depreciation and amortization | 947 | 1,174 | 1,521 | 2,325 | 589 | 681 | 7,237 | |||||||||||||||||||||
| Amortization of other intangible assets | 766 | 288 | 45 | — | 753 | — | 1,852 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 50,492 | $ | 28,241 | $ | 23,313 | $ | 12,875 | $ | 10,474 | $ | (28,211 | ) | $ | 97,184 | |||||||||||||
| Six Months Ended (unaudited) |
Corporate Finance & Restructuring |
Forensic and Litigation Consulting |
Economic Consulting |
Technology | Strategic Communications |
Unallocated Corporate |
Total | |||||||||||||||||||||
| Net income | $ | 127,243 | ||||||||||||||||||||||||||
| Interest income and other | (2,768 | ) | ||||||||||||||||||||||||||
| Interest expense | 9,539 | |||||||||||||||||||||||||||
| Income tax provision | 41,243 | |||||||||||||||||||||||||||
| Operating income | $ | 84,463 | $ | 57,219 | $ | 44,236 | $ | 20,986 | $ | 19,348 | $ | (50,995 | ) | $ | 175,257 | |||||||||||||
| Depreciation and amortization | 1,857 | 2,260 | 3,028 | 4,612 | 1,163 | 1,383 | 14,303 | |||||||||||||||||||||
| Amortization of other intangible assets | 1,533 | 579 | 89 | — | 1,512 | — | 3,713 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 87,853 | $ | 60,058 | $ | 47,353 | $ | 25,598 | $ | 22,023 | $ | (49,612 | ) | $ | 193,273 | |||||||||||||
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 |
||||||||||||||||||||
| Corporate Finance & Restructuring | $ | 246,011 | $ | 76,264 | 31.0 | % | 71 | % | $ | 494 | 1,362 | |||||||||
| 106,381 | (9,047 | ) | (8.5 | )% | 46 | % | $ | 327 | 1,326 | |||||||||||
| 151,493 | 21,694 | 14.3 | % | 73 | % | $ | 508 | 810 | ||||||||||||
| Technology (1) | 47,084 | 6,435 | 13.7 | % | N/M | N/M | 386 | |||||||||||||
| 56,883 | 10,034 | 17.6 | % | N/M | N/M | 761 | ||||||||||||||
| $ | 607,852 | $ | 105,380 | 17.3 | % | 4,645 | ||||||||||||||
| Unallocated Corporate | (29,583 | ) | ||||||||||||||||||
| Adjusted EBITDA | $ | 75,797 | 12.5 | % | ||||||||||||||||
| Six Months Ended (unaudited) |
||||||||||||||||||||
| Corporate Finance & Restructuring | $ | 453,760 | $ | 125,210 | 27.6 | % | 70 | % | $ | 473 | 1,362 | |||||||||
| 253,978 | 12,161 | 4.8 | % | 52 | % | $ | 332 | 1,326 | ||||||||||||
| 283,631 | 34,404 | 12.1 | % | 70 | % | $ | 478 | 810 | ||||||||||||
| Technology (1) | 105,807 | 20,919 | 19.8 | % | N/M | N/M | 386 | |||||||||||||
| 115,269 | 18,810 | 16.3 | % | N/M | N/M | 761 | ||||||||||||||
| $ | 1,212,445 | $ | 211,504 | 17.4 | % | 4,645 | ||||||||||||||
| Unallocated Corporate | (52,497 | ) | ||||||||||||||||||
| Adjusted EBITDA | $ | 159,007 | 13.1 | % | ||||||||||||||||
| Three Months Ended |
||||||||||||||||||||
| Corporate Finance & Restructuring | $ | 190,003 | $ | 50,492 | 26.6 | % | 68 | % | $ | 475 | 1,011 | |||||||||
| 145,870 | 28,241 | 19.4 | % | 65 | % | $ | 340 | 1,212 | ||||||||||||
| 155,502 | 23,313 | 15.0 | % | 79 | % | $ | 524 | 712 | ||||||||||||
| Technology (1) | 55,632 | 12,875 | 23.1 | % | N/M | N/M | 323 | |||||||||||||
| 59,112 | 10,474 | 17.7 | % | N/M | N/M | 672 | ||||||||||||||
| $ | 606,119 | $ | 125,395 | 20.7 | % | 3,930 | ||||||||||||||
| Unallocated Corporate | (28,211 | ) | ||||||||||||||||||
| Adjusted EBITDA | $ | 97,184 | 16.0 | % | ||||||||||||||||
| Six Months Ended (unaudited) |
||||||||||||||||||||
| Corporate Finance & Restructuring | $ | 350,969 | $ | 87,853 | 25.0 | % | 69 | % | $ | 453 | 1,011 | |||||||||
| 284,867 | 60,058 | 21.1 | % | 66 | % | $ | 337 | 1,212 | ||||||||||||
| 297,773 | 47,353 | 15.9 | % | 78 | % | $ | 501 | 712 | ||||||||||||
| Technology (1) | 106,968 | 25,598 | 23.9 | % | N/M | N/M | 323 | |||||||||||||
| 116,816 | 22,023 | 18.9 | % | N/M | N/M | 672 | ||||||||||||||
| $ | 1,157,393 | $ | 242,885 | 21.0 | % | 3,930 | ||||||||||||||
| Unallocated Corporate | (49,612 | ) | ||||||||||||||||||
| Adjusted EBITDA | $ | 193,273 | 16.7 | % | ||||||||||||||||
_______________________
N/M — Not meaningful
(1) The majority of the
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Six Months Ended |
|||||||
| 2020 | 2019 | ||||||
| (unaudited) | |||||||
| Operating activities | |||||||
| Net income | $ | 104,921 | $ | 127,243 | |||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 15,707 | 14,304 | |||||
| Amortization and impairment of other intangible assets | 4,645 | 3,713 | |||||
| Acquisition-related contingent consideration | 1,120 | 186 | |||||
| Provision for doubtful accounts | 11,624 | 6,260 | |||||
| Share-based compensation | 12,147 | 10,207 | |||||
| Amortization of debt discount and issuance costs | 5,987 | 5,748 | |||||
| Deferred income taxes |
4,128 | 966 | |||||
| Other | 13 | 225 | |||||
| Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
| Accounts receivable, billed and unbilled | (42,804 | ) | (186,854 | ) | |||
| Notes receivable | 5,993 | 8,343 | |||||
| Prepaid expenses and other assets | 8,979 | (1,953 | ) | ||||
| Accounts payable, accrued expenses and other | 2,230 | (11,606 | ) | ||||
| Income taxes | (2,344 | ) | 23,458 | ||||
| Accrued compensation | (107,217 | ) | (55,183 | ) | |||
| Billings in excess of services provided | 4,285 | 505 | |||||
| Net cash provided by (used in) operating activities | 29,414 | (54,438 | ) | ||||
| Investing activities | |||||||
| Purchases of property and equipment | (13,899 | ) | (20,661 | ) | |||
| Other | 14 | 69 | |||||
| Net cash used in investing activities | (13,885 | ) | (20,592 | ) | |||
| Financing activities | |||||||
| Borrowings under revolving line of credit | 90,000 | 25,000 | |||||
| Repayments under revolving line of credit | (55,000 | ) | (5,000 | ) | |||
| Purchase and retirement of common stock | (99,678 | ) | (66,893 | ) | |||
| Net issuance of common stock under equity compensation plans | (6,523 | ) | 1,009 | ||||
| Payments for business acquisition liabilities | (3,948 | ) | (2,282 | ) | |||
| Deposits and other | 5,098 | 1,014 | |||||
| Net cash used in financing activities | (70,051 | ) | (47,152 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (10,645 | ) | (781 | ) | |||
| Net decrease in cash and cash equivalents | (65,167 | ) | (122,963 | ) | |||
| Cash and cash equivalents, beginning of period | 369,373 | 312,069 | |||||
| Cash and cash equivalents, end of period | $ | 304,206 | $ | 189,106 | |||
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||
| Net cash provided by (used in) operating activities | $ | 152,976 | $ | 47,648 | $ | 29,414 | $ | (54,438 | ) | ||||||
| Purchases of property and equipment | (5,663 | ) | (10,508 | ) | (13,899 | ) | (20,661 | ) | |||||||
| Free Cash Flow | $ | 147,313 | $ | 37,140 | $ | 15,515 | $ | (75,099 | ) | ||||||
FTI Consulting, Inc. 555 12th StreetNW Washington, D.C. 20004 +1.202.312.9100 Investor & Media Contact:Mollie Hawkes +1.617.747.1791 mollie.hawkes@fticonsulting.com
Source: FTI Consulting, Inc.