SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 5, 2003 FTI Consulting, Inc. (Exact Name of Registrant as Specified in Charter) Maryland 001-14875 52-1261113 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 900 Bestgate Road, Suite 100, Annapolis, Maryland 21401 (Address of Principal Executive Offices) (ZIP Code) Registrant's telephone number, including area code (410) 224-8770
Item 5. Other Events and Required FD Disclosure. On February 5, 2003, FTI Consulting, Inc. issued two press releases filed herewith as Exhibits 99.1 and 99.2, each of which is incorporated by reference herein. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Acquired Business. None. (b) Pro Forma Financial Information. None. (c) Exhibits. 99.1 Press Release dated February 5, 2003, of FTI Consulting, Inc. 99.2 Press Release dated February 5, 2003, of FTI Consulting, Inc. -1-
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FTI CONSULTING, INC. By: /s/ Theodore I. Pincus ---------------------- Theodore I. Pincus Executive Vice President and Chief Financial Officer Date: February 6, 2003 -2-
EXHIBIT INDEX Exhibit Description 99.1 Press Release dated February 5, 2003, of FTI Consulting, Inc. 99.2 Press Release dated February 5, 2003, of FTI Consulting, Inc. -3-
Exhibit 99.1 news FRB | WEBER SHANDWICK | FINANCIAL COMMUNICATIONS RE: FTI Consulting, Inc. 900 Bestgate Road Annapolis, MD 21401 (410) 224-8770 FOR FURTHER INFORMATION: AT FTI CONSULTING: AT FRB|WEBERSHANDWICK: Jack Dunn Marilyn Windsor Lisa Fortuna Tim Grace Chairman & CEO General Inquiries Analyst Inquiries Media Inquiries (410) 224-1483 (702) 515-1260 (312) 640-6779 (312) 640-6667 FOR IMMEDIATE RELEASE WEDNESDAY, FEBRUARY 5, 2003 FTI CONSULTING, INC. ANNOUNCES FOURTH-QUARTER, FULL-YEAR RESULTS Reports $0.62 per Fully Diluted Share from Continuing Operations for Quarter ANNAPOLIS, MD, February 5, 2003--FTI Consulting, Inc. (NYSE: FCN), the premier national provider of turnaround, bankruptcy and litigation-related consulting services, today reported its results for the fourth-quarter and the year ended December 31, 2002. Results include the contribution from its August 31, 2002, acquisition of the domestic Business Recovery Services Division (BRS) of PricewaterhouseCoopers since the date of acquisition. Results from continuing operations exclude the results of the Applied Sciences practice group, which consisted of LWG, a business unit sold in January 2003 as of December 31, 2002, and SEA, a business unit that the company continues to hold for sale. Fourth-Quarter Results from Continuing Operations For the quarter, revenues from continuing operations were $90.6 million, an increase of 197.0 percent compared with $30.5 million for the comparable period in 2001. Income from continuing operations grew 278.4 percent to $15.5 million from $4.1 million in the comparable quarter last year, and earnings per share from continuing operations grew 210.0 percent to $0.62 on a diluted basis compared with $0.20 last year. The increase in earnings per share from continuing operations would have been 148.0 percent if the non-amortization provisions of SFAS 142, Goodwill and Other Intangible Assets, had been in effect in the fourth quarter of 2001. Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) were $30.3 million compared with $9.5 million in the prior year, an increase of 216.9 percent. Including the discontinued Applied Sciences practice group, earnings per share on a diluted basis were $0.60. Year 2002 Results from Continuing Operations For the year ended December 31, 2002, revenues from continuing operations were $224.1 million, an increase of 83.2 percent compared with $122.3 million for 2001. Income from continuing operations grew 169.6 percent to $34.9 million from $12.9 million last year, and earnings per share from MORE
FTI Consulting, Inc. Add 1 continuing operations grew 131.8 percent to $1.53 on a diluted basis compared with $0.66 last year. The increase in earnings per share from continuing operations would have been 96.2 percent if the non-amortization provisions of SFAS 142, Goodwill and Other Intangible Assets, had been in effect in 2001. EBITDA was $68.7 million compared with $33.4 million in the prior year, an increase of 105.6 percent. Cash flow provided by operations for the year ended December 31, 2002, was approximately $77.6 million compared with $35.4 million in the prior year. Including the discontinued Applied Sciences practice group, earnings per share on a diluted basis were $1.63. At December 31, 2002, the company had cash and cash equivalents of $9.9 million and its total long-term debt was $97.8 million. The $45.0 million drawn down under the company's $100.0 million revolving line of credit in connection with the acquisition of BRS on August 31, 2002, has been repaid and no amounts were outstanding under the revolving line of credit at December 31, 2002. Discontinued Operations FTI in January 2003 sold the stock of LWG, a business unit in the discontinued Applied Sciences practice group, to LWG's management as of December 31, 2002, for a total of $4.15 million, including a note receivable of $2.0 million due over seven years, with interest payable monthly at 9.75 percent per annum and principal payments beginning in the fourth year. FTI incurred a loss after taxes of $891,000 on the sale. The cash proceeds of $2.15 million received from the sale of LWG will be used to reduce debt under the company's term loan. Discussions with the management of SEA, Inc., the larger business unit in the discontinued Applied Sciences practice group, have concluded without reaching agreement. FTI is seeking other qualified buyers for SEA and is unable to predict when it will be able to sell it or at what price. The following table summarizes discontinued operations for the fourth quarter and the year ended December 31, 2002. Fourth Quarter Year -------------- ---- (000's) (000's) ------- ------- Income from operations of discontinued operations, net of taxes of $225 and $2198, respectively $ 354 $ 3,145 (Loss) on disposition of LWG, net of tax benefits of $607 ($ 891) ($ 891) --------- ------- (Loss) income from discontinued operations, net of taxes ($ 537) $ 2,254 --------- ------ (Loss) income from discontinued operations per common share, diluted ($ 0.02) $ 0.10 --------- ------- About FTI Consulting FTI Consulting is a multi-disciplined consulting firm with leading practices in the areas of turnaround, bankruptcy and litigation-related consulting services. Modern corporations, as well as those who advise and invest in them, face growing challenges on every front. From a proliferation of "bet-the-company" litigation to increasingly complicated relationships with lenders and investors in an ever-changing global economy, U.S. companies are turning more and more to outside experts and MORE
FTI Consulting, Inc. Add 2 consultants to meet these complex issues. FTI is dedicated to helping corporations, their advisors, lawyers, lenders and investors meet these challenges by providing a broad array of the highest quality professional practices from a single source. This press release includes "forward-looking" statements that involve uncertainties and risks. There can be no assurance that actual results will not differ from the company's expectations. The company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this may occur from time to time in the future. As a result of these possible fluctuations, the company's actual results may differ from our projections. Other factors that could cause such differences include pace and timing of additional acquisitions, the company's ability to realize cost savings and efficiencies, competitive and general economic conditions, and other risks described in the company's filings with the Securities and Exchange Commission. FTI is on the Internet at www.fticonsulting.com. -FINANCIAL TABLES FOLLOW- MORE
FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (in thousands of dollars, except share and per-share data) Three Months Ended Actual Actual 12/31/2001 12/31/2002 ------------------------------- (unaudited) Revenues $ 30,491 $ 90,557 Direct cost of revenues 12,370 42,592 Selling, general and administrative expenses 9,476 18,851 Amortization of goodwill and other intangible assets 1,080 781 -------------------------------- Total costs and expenses 22,926 62,224 -------------------------------- Operating income from continuing operations 7,565 28,333 Interest expense, net 823 2,135 -------------------------------- Income from continuing operations before taxes 6,742 26,198 Income taxes 2,642 10,683 -------------------------------- Income from continuing operations 4,100 15,515 Income from operations of discontinued operations, net of income taxes/(2/ 736 354 Loss from sale of discontinued operations, net of income taxes - (891) -------------------------------- Net income $ 4,836 $ 14,978 ================================ Income from continuing operations per common share, basic $ 0.21 $ 0.65 Income from discontinued operations per common share, basic 0.04 (0.02) ================================ Earnings per common share, basic $ 0.25 $ 0.63 ================================ Weighted average shares for basic/(1)/ 19,397 23,787 ================================ Income from continuing operations per common share, diluted $ 0.20 $ 0.62 Income from discontinued operations per common share, diluted 0.04 (0.02) ================================ Earnings per common share, diluted $ 0.23 $ 0.60 ================================ Weighted average shares for diluted/(1)/ 20,827 25,130 ================================ EBITDA from continuing operations $ 9,547 $ 30,258 ================================ /(1)/ Weighted average shares have been adjusted to reflect the three-for-two stock split effected as a stock dividend paid to shareholders of record on January 2, 2002. /(2)/ Revenues included in discontinued operations were $11,684 and $10,755 for the three months ended December 31, 2002 and 2001, respectively.
FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR YEARS ENDED DECEMBER 31, 2002 AND 2001 (in thousands of dollars, except share and per-share data) Years Ended Actual Actual 12/31/2001 12/31/2002 -------------------------------- (audited)/(1)/ (unaudited) Revenues $ 122,317 $ 224,113 Direct cost of revenues 59,074 108,104 Selling, general and administrative expenses 33,085 51,647 Amortization of goodwill and other intangible assets 4,235 1,033 --------------------------------- Total costs and expenses 96,394 160,784 --------------------------------- Operating income from continuing operations 25,923 63,329 Interest expense, net 4,356 4,717 --------------------------------- Income from continuing operations before taxes 21,567 58,612 Income taxes 8,621 23,704 --------------------------------- Income from continuing operations 12,946 34,908 Income from operations of discontinued operations, net of income taxes/(3)/ 3,523 3,145 Loss from sale of discontinued operations, net of income taxes - (891) --------------------------------- Net income $ 16,469 $ 37,162 ================================= Income from continuing operations per common share, basic $ 0.73 $ 1.63 Income from discontinued operations per common share, basic 0.20 0.11 ================================= Earnings per common share, basic $ 0.92 $ 1.74 ================================= Weighted average shares for basic/(2)/ 17,841 21,354 ================================= Income from continuing operations per common share, diluted $ 0.66 $ 1.53 Income from discontinued operations per common share, diluted 0.18 0.10 ================================= Earnings per common share, diluted $ 0.84 $ 1.63 ================================= Weighted average shares for diluted/(2)/ 19,631 22,798 ================================= EBITDA from continuing operations $ 33,397 $ 68,662 ================================= /(1)/ Restated to segregate the assets of discontinued operations, as required by SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. /(2)/ Weighted average shares have been adjusted to reflect the three-for-two stock split effected as a stock dividend paid to shareholders of record on January 2, 2002. /(3)/ Revenues included in discontinued operations were $45,833 and $44,042 for the years ended December 31, 2002 and 2001, respectively.
FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 (in thousands of dollars) December 31, December 31, 2001 2002 ---------------------------------- (audited) (unaudited) Operating activities Net income $ 16,469 $ 37,162 Adjustment to reconcile net income to net cash (used in) provided by operating activities: Depreciation and other amortization 3,867 4,301 Amortization of goodwill and other intangible assets 5,049 1,033 Income tax benefit from stock option exercise 8,116 12,754 Provision for doubtful accounts 245 3,767 Non-cash charge on sale of discontinued operations - 1,209 Other 409 1,474 Changes in operating assets and liabilities: Accounts receivable, billed and unbilled (2,093) 7,671 Income taxes, current and deferred (607) 190 Accrued compensation expense 2,197 11,581 Billings in excess of services provided 1,630 (5,349) Other current assets and liabilities 146 1,855 --------------- --------------- Net cash (used in) provided by operating activities 35,428 77,648 Investing activities Purchase of property and equipment, net (4,366) (8,777) Proceeds from landlord reimbursements and sales of property and equipment 1,231 - Acquisition of subsidiaries and contingent payments (3,234) (145,409) Change in other assets 67 (2,200) --------------- --------------- Net cash used in investing activities (6,302) (156,386) Financing activities Issuance of common shares and exercise of stock options 12,843 9,532 Borrowings under long-term debt arrangements - 119,000 Repayments on long-term debt (32,334) (49,333) Payment of financing fees & other (14) (3,411) --------------- --------------- Net cash provided by (used in) financing activities (19,505) 75,788 Net decrease in cash and cash equivalents 9,621 (2,950) Cash and cash equivalents at beginning of period 3,235 12,856 --------------- --------------- Cash and cash equivalents at end of period $ 12,856 $ 9,906 =============== ===============
FTI CONSULTING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2001 AND DECEMBER 31, 2002 (in thousands of dollars, except share data) December 31, December 31, 2001 2002 ---------------------------------- (audited)/(1)/ (unaudited) Assets Current assets: Cash and cash equivalents $ 12,856 $ 9,906 Accounts receivable, less allowances 12,094 29,271 Unbilled receivable, less allowances 13,675 35,576 Other current assets 4,800 5,529 Current assets of discontinued operations 12,241 11,084 ---------------------------------- Total current assets 55,666 91,366 ---------------------------------- Property and equipment, net 10,619 14,938 Goodwill, net 75,733 299,082 Other intangible assets, net - 4,067 Other assets 1,023 5,999 Non-current assets of discontinued operations 16,057 15,079 ---------------------------------- Total Assets $ 159,098 $ 430,531 ================================== Liabilities and Stockholders' Equity Current liabilities: Accounts payable and other accrued expenses $ 17,692 $ 36,810 Deferred income taxes 130 193 Current portion of long-term debt 4,333 20,000 Billings in excess of services provided 4,745 19,921 Current liabilities of discontinued operations - 664 ---------------------------------- Total current liabilities 26,900 77,588 ---------------------------------- Long-term debt, less current portion 23,833 77,833 Deferred income taxes and other liabilities 3,229 7,135 Stockholders' equity Preferred stock, $.01 par value; 5,000,000 shares authorized, none outstanding - - Common stock, $.01 par value; 45,000,000 shares authorized; 19,590,938 and 24,004,292 shares issued and outstanding in 2001 and 2002, respectively 196 240 Additional paid-in capital 75,416 200,576 Unearned compensation (568) (346) Retained earnings 31,036 68,198 Accumulated other comprehensive income (loss) (944) (693) ---------------------------------- Total stockholders' equity 105,136 267,975 ---------------------------------- Total Liabilities and Stockholders' Equity $ 159,098 $ 430,531 ================================== /(1)/ Restated to segregate the assets of discontinued operations, as required by SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
Exhibit 99.2 news FRB | WEBER SHANDWICK FINANCIAL COMMUNICATIONS RE: FTI Consulting, Inc. 900 Bestgate Road Annapolis, MD 21401 (410) 224-8770 FOR FURTHER INFORMATION: AT FTI CONSULTING: AT FRB|WEBERSHANDWICK: Jack Dunn Marilyn Windsor Lisa Fortuna Tim Grace Chairman & CEO General Inquiries Analyst Inquiries Media Inquiries (410) 224-1483 (702) 515-1260 (312) 640-6779 (312) 640-6667 FOR IMMEDIATE RELEASE WEDNESDAY, FEBRUARY 5, 2003 FTI CONSULTING ANNOUNCES COMMON STOCK OFFERING Offers 2.1 Million Shares of Common Stock by the Company and 21,969 Shares by Selling Stockholders ANNAPOLIS, MD, February 5, 2003--FTI Consulting, Inc. (NYSE: FCN), the premier national provider of turnaround, bankruptcy and litigation-related consulting services, today announced that it intends to sell 2.1 million shares of its common stock and selling stockholders intend to sell 21,969 shares of common stock in an underwritten offering. The company expects to commence its previously announced underwritten public offering of its common stock tomorrow, February 6, 2003. The underwritten offering, which will be made only by means of a prospectus, will be led by Lehman Brothers and co-managed by Banc of America Securities LLC, Adams, Harkness & Hill, Inc., Janney Montgomery Scott LLC and SunTrust Robinson Humphrey. The company's registration statement has been filed with the Securities and Exchange Commission but has not yet become effective. This common stock may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. When available, copies of the preliminary prospectus relating to the offering may be obtained by contacting Lehman Brothers Inc., c/o ADP Prospectus Department, 1155 Long Island Avenue, Edgewood, New York, 11717, or by calling 631-254-7106. Fourth-Quarter Conference Call The company plans to conduct a conference call to discuss fourth-quarter and full-year 2002 results MORE
FTI Consulting, Inc. Add 1 after completion of the offering and will announce the date and time as soon as it is determined. About FTI Consulting FTI Consulting is a multi-disciplined consulting firm with leading practices in the areas of turnaround, bankruptcy and litigation-related consulting services. Modern corporations, as well as those who advise and invest in them, face growing challenges on every front. From a proliferation of "bet-the-company" litigation to increasingly complicated relationships with lenders and investors in an ever-changing global economy, U.S. companies are turning more and more to outside experts and consultants to meet these complex issues. FTI is dedicated to helping corporations, their advisors, lawyers, lenders and investors meet these challenges by providing a broad array of the highest quality professional practices from a single source. FTI is on the Internet at www.fticonsulting.com. ###