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 FTI Consulting Reports Fourth Quarter and Full Year 2015 Results
   Thursday, February 25, 2016 7:31:45 AM ET

-- Fourth Quarter Revenues of $442.2 Million; Full Year Revenues of $1.78 Billion

-- Fourth Quarter Adjusted EPS of $0.24; Full Year Adjusted EPS of $1.84

-- Full Year 2016 Adjusted EPS Guidance Range of Between $1.90 and $2.15

FTI Consulting, Inc. (FCN ) (the "Company"), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today released its financial results for the quarter and full year ended December 31, 2015.

For the quarter, revenues increased 4.0 percent to $442.2 million compared to $425.2 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation ("FX"), revenues increased 6.3 percent compared to the prior year quarter. Fully diluted earnings per share ("EPS") were $0.25 compared to $0.02 in the prior year quarter. Fourth quarter EPS in the prior year quarter included a $4.6 million non-cash income tax reserve and a $1.6 million special charge, which reduced EPS by $0.11 and $0.02, respectively. Adjusted EPS and Adjusted EBITDA were $0.24 and $35.2 million, respectively, compared to $0.04 and $36.1 million respectively, in the prior year quarter. Adjusted EBITDA was 8.0 percent of revenues as compared to 8.5 percent of revenues in the prior year quarter.

For the full year, revenues increased 1.3 percent to $1.78 billion compared to $1.76 billion in the prior year. Excluding the estimated negative impact of FX, revenues increased 4.1 percent compared to the prior year. EPS were $1.58 and included a $19.6 million debt extinguishment charge compared to the prior year EPS of $1.44, which included $16.3 million of special charges. Full year Adjusted EPS were $1.84 and Adjusted EBITDA was $205.8 million, or 11.6 percent of revenues, compared to Adjusted EPS of $1.64 and Adjusted EBITDA of $210.6 million, or 12.0 percent of revenues, in the prior year.

Adjusted EPS, Adjusted EBITDA and Adjusted Segment EBITDA are non-GAAP measures defined elsewhere in this press release and are reconciled to GAAP measures in the accompanying financial tables.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, "We, of course, are pleased that we were able, for the first time since 2009, to drive double-digit Adjusted EPS growth this past year."

Mr. Gunby added, "Though 2016 will be another year of major change, with all its attendant risks and uncertainties, the accomplishments to date mean we exit 2015 within sight of our goal of being able to drive a double-digit Adjusted EPS gain on a sustained basis going forward ??? and to do so while building an ever more robust platform for great professionals to serve our clients on their most important issues."

Cash Position and Capital Allocation

Net cash provided by operating activities for the year was $139.9 million compared to net cash provided by operating activities of $135.4 million in the prior year. Cash and cash equivalents were $149.8 million at December 31, 2015 compared to $283.7 million at December 31, 2014. During the quarter, and for the year, the Company spent $26.5 million to repurchase approximately 765,000 shares at an average price of $34.68 under its $50 million share repurchase authorization, which expires on May 5, 2016.

Fourth Quarter Segment Results

Corporate Finance & Restructuring

Revenues in the Corporate Finance & Restructuring segment increased $18.5 million or 19.9 percent to $111.6 million in the quarter compared to $93.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $21.0 million or 22.6 percent compared to the prior year quarter. The increase in revenues was driven primarily by higher demand for distressed service offerings in North America. Adjusted Segment EBITDA was $18.9 million, or 17.0 percent of segment revenues, compared to $9.9 million, or 10.6 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to an increased mix of higher priced distressed service offerings combined with a lower cost structure in Australia, which was partially offset by higher bad debt expense.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment decreased $4.4 million or 3.7 percent to $116.7 million in the quarter compared to $121.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $2.2 million or 1.8 percent compared to the prior year quarter. The decrease in revenues was driven by lower realized pricing and demand in the health solutions practice, which was partially offset by higher realized pricing and demand in the financial and enterprise data analytics practice. Adjusted Segment EBITDA was $8.8 million, or 7.5 percent of segment revenues, compared to $19.4 million, or 16.1 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to the aforementioned declines in the health solutions practice, lower utilization in the disputes and investigations practices and higher severance costs.

Economic Consulting

Revenues in the Economic Consulting segment increased $12.1 million or 11.4 percent to $118.6 million in the quarter compared to $106.5 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $14.0 million or 13.2 percent compared to the prior year quarter. The increase in revenues was driven by higher demand for mergers and acquisitions ("M&A") related antitrust and international arbitration services. Adjusted Segment EBITDA was $18.8 million, or 15.9 percent of segment revenues, compared to $9.8 million, or 9.2 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was driven by higher realized pricing and utilization across certain practices, a reduction in a tax equalization employee benefit cost and lower bad debt expense.

Technology

Revenues in the Technology segment decreased $11.6 million or 20.0 percent to $46.6 million in the quarter compared to $58.2 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $10.8 million or 18.6 percent compared to the prior year quarter. The decline in revenues was driven by lower demand for consulting and other services related to large cross-border investigations and litigations and lower realized pricing, which was partially offset by higher demand for M&A-related "second request" work. Adjusted Segment EBITDA was $6.0 million, or 12.8 percent of segment revenues, compared to $13.3 million, or 22.8 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to lower utilization in consulting and lower realized pricing in consulting, hosting and managed review services.

Strategic Communications

Revenues in the Strategic Communications segment increased $2.4 million or 5.3 percent to $48.8 million in the quarter compared to $46.3 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $4.8 million or 10.4 percent compared to the prior year quarter with a $1.8 million increase in pass-through income. The remaining $3.0 million increase in revenues was driven by higher demand for public affairs, crisis and M&A-related consulting in North America and in the Europe, Middle East and Africa region. Adjusted Segment EBITDA was $7.6 million, or 15.6 percent of segment revenues, compared to $7.4 million, or 16.0 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to a higher mix of low margin pass-through income, which was partially offset by improved staff leverage.

Interim Chief Financial Officer Elected

On February 24, 2016, the Company’s Board of Directors elected Catherine M. Freeman, Senior Vice President, Controller and Chief Accounting Officer, as Interim Chief Financial Officer, effective March 1, 2016. As previously disclosed, the Company has initiated an external search for a permanent successor.

First Quarter of 2016 Special Charge

As a result of an ongoing strategic review of the Technology segment, the Company has taken actions to realign its workforce to address current business demands and position itself for future growth. These actions include the termination of approximately 50 employees, representing approximately 10 percent of the segment’s workforce. The Company estimates the impact of these actions will result in a pre-tax income charge between $4.5 million to $5.5 million, which will be recorded as a special charge in the first quarter of 2016.

2016 Guidance

The Company estimates that revenues for 2016 will be between $1.80 billion and $1.85 billion and Adjusted EPS will be between $1.90 and $2.15.

Fourth Quarter and Full Year 2015 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2015 financial results at 9:00 a.m. Eastern Time on February 25, 2016. 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 at 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 4,600 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The Company generated $1.78 billion in revenues during fiscal year 2015. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measures

Note: We define Segment Operating Income (Loss) as a segment’s share of consolidated operating income (Loss). We define Total Segment Operating Income (Loss) 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 EBITDA as consolidated net income (loss) 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 Segment EBITDA as a segment’s share of consolidated operating income (loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Total Adjusted Segment EBITDA as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted Segment EBITDA margin as Adjusted Segment EBITDA as a percentage of a segment’s share of revenue. We use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. In addition, EBITDA and Adjusted EBITDA are common alternative measures 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 to the operating results of other companies.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS") as net income (loss) and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. 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 measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable to 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 GAAP to non-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 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 flow 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, adverse financial, real estate or other market and general economic conditions, which could impact each of our segments differently, 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 filed with the SEC and in the Company’s other filings with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations". We are under no duty to update any of the forward looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW

FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014
(in thousands, except per share data)
                                                        Year Ended
                                                        December 31,
                                                              2015           2014
Revenues                                                $     1,779,149    $ 1,756,212
Operating expenses
Direct cost of revenues                                       1,171,444      1,144,757
Selling, general and administrative expenses                  432,668        433,845
Special charges                                               -              16,339
Acquisition-related contingent consideration                  (1,200    )    (1,676    )
Amortization of other intangible assets                       11,726         15,521
                                                              1,614,638      1,608,786
Operating income                                              164,511        147,426
Other income (expense)
Interest income and other                                     3,232          4,670
Interest expense                                              (42,768   )    (50,685   )
Loss on early extinguishment of debt                          (19,589   )    -
                                                              (59,125   )    (46,015   )
Income before income tax provision                            105,386        101,411
Income tax provision                                          39,333         42,604
Net income                                              $     66,053       $ 58,807
Earnings per common share - basic                       $     1.62         $ 1.48
Weighted average common shares outstanding - basic            40,846         39,726
Earnings per common share - diluted                     $     1.58         $ 1.44
Weighted average common shares outstanding - diluted          41,729         40,729
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net of tax $0 $     (28,727   )  $ (29,179   )
Other comprehensive loss, net of tax                          (28,727   )    (29,179   )
Comprehensive income                                    $     37,326       $ 29,628
FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2015 AND 2014
(in thousands, except per share data)
                                                        Three Months Ended
                                                        December 31,
                                                               2015         2014
Revenues                                                $      442,204    $ 425,158
Operating expenses
Direct cost of revenues                                        299,336      281,689
Selling, general and administrative expenses                   116,351      115,965
Special charges                                                -            1,628
Acquisition-related contingent consideration                   (55     )    (85     )
Amortization of other intangible assets                        2,807        4,055
                                                               418,439      403,252
Operating income                                               23,765       21,906
Other income (expense)
Interest income and other                                      392          1,205
Interest expense                                               (6,231  )    (12,488 )
                                                               (5,839  )    (11,283 )
Income  before income tax provision                            17,926       10,623
Income tax provision                                           7,577        9,702
Net income                                              $      10,349     $ 921
Earnings per common share - basic                       $      0.25       $ 0.02
Weighted average common shares outstanding - basic             41,078       39,991
Earnings per common share - diluted                     $      0.25       $ 0.02
Weighted average common shares outstanding - diluted           41,879       41,090
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net of tax $0 $      (4,315  )  $ (19,059 )
Other comprehensive loss, net of tax                           (4,315  )    (19,059 )
Comprehensive income (loss)                             $      6,034      $ (18,138 )
FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2015 AND 2014
(in thousands, except per share data)
                                                                           Three Months Ended December 31,                                                   Year Ended December 31,
                                                                                                                                       2015        2014                                                                  2015        2014
Net income                                                                 $                                                           10,349    $ 921       $                                                           66,053    $ 58,807
Add back:
Special charges, net of tax                                                                                                            -           960                                                                   -           9,637
Remeasurement of acquisition-related contingent consideration, net of tax                                                              (115   )    (204   )                                                              (1,120 )    (1,718 )
Loss on early extinguishment of debt, net of tax                                                                                       -           -                                                                     11,881      -
Adjusted Net Income                                                        $                                                           10,234    $ 1,677     $                                                           76,814    $ 66,726
Earnings per common share - diluted                                        $                                                           0.25      $ 0.02      $                                                           1.58      $ 1.44
Add back:
Special charges, net of tax                                                                                                            -           0.02                                                                  -           0.24
Remeasurement of acquisition-related contingent consideration, net of tax                                                              (0.01  )    -                                                                     (0.02  )    (0.04  )
Loss on early extinguishment of debt, net of tax                                                                                       -           -                                                                     0.28        -
Adjusted earnings per common share - diluted                               $                                                           0.24      $ 0.04      $                                                           1.84      $ 1.64
Weighted average number of common shares outstanding - diluted                                                                         41,879      41,090                                                                41,729      40,729
The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rates for the adjustments related to special charges for both the three months and year ended December 31, 2014 was 41.0%. The tax expense related to the adjustments for special charges for the three months and year ended December 31, 2014 was $0.7 million or $0.02 impact on adjusted earnings per diluted share and $6.7 million or $0.16 impact on diluted earnings per share, respectively. There were no special charges for 2015.
The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rate for the adjustments related to the remeasurement of acquistion-related contingent consideration for the three months and year ended December 31, 2015 was 40%.  The effective tax rates for the adjustments related to the remeasurement of acquistion-related contingent consideration for the three months and year ended December 31, 2014 were 40.0% and 36.9%, respectively. The tax expense related to the adjustment for the remeasurement of acquistion-related contingent consideration for both the three months and year ended December 31, 2015 were $0.1 million  and $0.01 impact on adjusted earnings per diluted share, and $0.7 million or a $0.02 impact on diluted earnings per share, respectively. The tax expense related to the adjustments for the remeasurement of acquistion-related contingent consideration for the three months and year ended December 31, 2014 were $0.1 million with no impact on adjusted earnings per diluted share and $1.0 million or $0.02 impact on diluted earnings per share, respectively.
(3)  The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rate for the loss on early extinguishment of debt for the year ended December 31,  2015 was 39.3%. The tax benefit related to the loss on early extinguishment of debt for the year ended December 31, 2015 was $7.7 million, or a $0.18 impact on diluted earnings per share. During the three months ended December 31, 2015 and the year ended December 31, 2014, there was no loss on early extinguishment of debt.
FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2015 AND 2014
                                                                                                                                 Average                 Revenue-
                                      Segment                 Adjusted                 Adjusted EBITDA                           Billable                Generating
                                      Revenues                EBITDA                   Margin                   Utilization      Rate                    Headcount
                                      (in thousands)                                                                                                     (at period end)
Three Months Ended December 31, 2015
Corporate Finance & Restructuring     $          111,586      $          18,927                   17.0       %             62 %  $          386          838
Forensic and Litigation Consulting               116,715                 8,811                    7.5        %             60 %  $          330          1,131
Economic Consulting                              118,589                 18,828                   15.9       %             70 %  $          529          599
Technology                                       46,551                  5,958                    12.8       %  N/M              N/M                     349
Strategic Communications                         48,763                  7,627                    15.6       %  N/M              N/M                     599
                                      $          442,204                 60,151                   13.6       %                                           3,516
Corporate                                                                (24,948    )
Adjusted EBITDA                                               $          35,203                   8.0        %
Year Ended December 31, 2015
Corporate Finance & Restructuring     $          440,398      $          90,101                   20.5       %             69 %  $          383          838
Forensic and Litigation Consulting               482,269                 64,267                   13.3       %             64 %  $          319          1,131
Economic Consulting                              447,909                 62,330                   13.9       %             72 %  $          512          599
Technology                                       218,599                 39,010                   17.8       %  N/M              N/M                     349
Strategic Communications                         189,974                 27,727                   14.6       %  N/M              N/M                     599
                                      $          1,779,149               283,435                  15.9       %                                           3,516
Corporate                                                                (77,673    )
Adjusted EBITDA                                               $          205,762                  11.6       %
Three Months Ended December 31, 2014
Corporate Finance & Restructuring     $          93,072       $          9,874                    10.6       %             61 %  $          368          706
Forensic and Litigation Consulting               121,138                 19,443                   16.1       %             64 %  $          313          1,154
Economic Consulting                              106,468                 9,783                    9.2        %             69 %  $          503          574
Technology                                       58,168                  13,258                   22.8       %  N/M              N/M                     344
Strategic Communications                         46,312                  7,420                    16.0       %  N/M              N/M                     566
                                      $          425,158                 59,778                   14.1       %                                           3,344
Corporate                                                                (23,720    )
Adjusted EBITDA                                               $          36,058                   8.5        %
Year Ended December 31, 2014
Corporate Finance & Restructuring     $          391,115      $          55,492                   14.2       %             67 %  $          374          706
Forensic and Litigation Consulting               483,380                 90,468                   18.7       %             69 %  $          321          1,154
Economic Consulting                              451,040                 59,282                   13.1       %             75 %  $          512          574
Technology                                       241,310                 63,545                   26.3       %  N/M              N/M                     344
Strategic Communications                         189,367                 22,588                   11.9       %  N/M              N/M                     566
                                      $          1,756,212               291,375                  16.6       %                                           3,344
Corporate                                                                (80,823    )
Adjusted EBITDA                                               $          210,552                  12.0       %
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.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2015 AND 2014
Three Months Ended December 31, 2015                                                Corporate Finance & Restructuring  Forensic and Litigation Consulting  Economic Consulting  Technology   Strategic Communications  Corp HQ         Total
Net income                                                                                                                                                                                                                             $  10,349
                   Interest income and other                                                                                                                                                                                              (392    )
                   Interest expense                                                                                                                                                                                                       6,231
                   Income tax provision                                                                                                                                                                                                   7,577
Operating income                                                                    $           17,425                 $           7,291                   $      17,836        $   1,339    $        6,165            $  (26,291  )   $  23,765
                   Depreciation and amortization                                                694                                998                            876               4,421             491                 1,343           8,823
                   Amortization of other intangible assets                                      808                                522                            308               198               971                 -               2,807
                   Special charges                                                              -                                  -                              -                 -                 -                   -               -
                   Remeasurement of acquisition-related contingent consideration                -                                  -                              (192   )          -                 -                   -               (192    )
Adjusted EBITDA                                                                     $           18,927                 $           8,811                   $      18,828        $   5,958    $        7,627            $  (24,948  )   $  35,203
Year Ended December 31, 2015
Net income                                                                                                                                                                                                                             $  66,053
                   Interest income and other                                                                                                                                                                                              (3,232  )
                   Interest expense                                                                                                                                                                                                       42,768
                   Loss on early extinguishment of debt                                                                                                                                                                                   19,589
                   Income tax provision                                                                                                                                                                                                   39,333
Operating income                                                                    $           85,207                 $           58,185                  $      57,912        $   22,832   $        21,723           $  (81,348  )      164,511
                   Depreciation and amortization                                                2,835                              3,860                          3,562             15,390            2,070               3,675           31,392
                   Amortization of other intangible assets                                      3,550                              2,222                          1,232             788               3,934               -               11,726
                   Special charges                                                              -                                  -                              -                 -                 -                   -               -
                   Remeasurement of acquisition-related contingent consideration                (1,491      )                      -                              (376   )          -                 -                   -               (1,867  )
Adjusted EBITDA                                                                                 90,101                             64,267                         62,330            39,010            27,727              (77,673  )      205,762
Three Months Ended December 31, 2014                                                Corporate Finance & Restructuring  Forensic and Litigation Consulting  Economic Consulting  Technology   Strategic Communications  Corp HQ         Total
Net income                                                                                                                                                                                                                             $  921
                   Interest income and other                                                                                                                                                                                              (1,205  )
                   Interest expense                                                                                                                                                                                                       12,488
                   Income tax provision                                                                                                                                                                                                   9,702
Operating income                                                                    $           7,832                  $           16,663                  $      8,767         $   9,194    $        5,693            $  (26,243  )   $  21,906
                   Depreciation and amortization                                                1,054                              1,244                          1,072             3,866             678                 895             8,809
                   Amortization of other intangible assets                                      988                                1,536                          284               198               1,049               -               4,055
                   Special charges                                                              -                                  -                              -                 -                 -                   1,628           1,628
                   Remeasurement of acquisition-related contingent consideration                -                                  -                              (340   )          -                 -                   -               (340    )
Adjusted EBITDA                                                                     $           9,874                  $           19,443                  $      9,783         $   13,258   $        7,420            $  (23,720  )   $  36,058
Year Ended December 31, 2014
Net income                                                                                                                                                                                                                             $  58,807
                   Interest income and other                                                                                                                                                                                              (4,670  )
                   Interest expense                                                                                                                                                                                                       50,685
                   Income tax provision                                                                                                                                                                                                   42,604
Operating income                                                                    $           46,913                 $           83,180                  $      55,282        $   46,906   $        15,603           $  (100,458 )      147,426
                   Depreciation and amortization                                                3,568                              4,301                          4,068             15,768            2,562               3,722           33,989
                   Amortization of other intangible assets                                      5,589                              3,613                          1,047             852               4,420               -               15,521
                   Special charges                                                              84                                 308                            12                19                3                   15,913          16,339
                   Remeasurement of acquisition-related contingent consideration                (662        )                      (934        )                  (1,127 )          -                 -                   -               (2,723  )
Adjusted EBITDA                                                                                 55,492                             90,468                         59,282            63,545            22,588              (80,823  )      210,552
FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014
(in thousands)
                                                                                  Year Ended
                                                                                  December 31,
                                                                                        2015          2014
Operating activities
Net income                                                                        $     66,053      $ 58,807
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization                                                           31,392        35,126
Amortization and impairment of other intangible assets                                  11,726        15,521
Acquisition-related contingent consideration                                            (1,200   )    (1,676  )
Provision for doubtful accounts                                                         15,564        18,252
Non-cash share-based compensation                                                       17,951        22,848
Non-cash interest expense                                                               2,521         2,691
Loss on early extinguishment of debt                                                    19,589        -
Other                                                                                   (760     )    (522    )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, billed and unbilled                                                (35,648  )    (43,072 )
Notes receivable                                                                        3,106         (18,253 )
Prepaid expenses and other assets                                                       (3,557   )    10,733
Accounts payable, accrued expenses and other                                            (4,718   )    980
Income taxes                                                                            18,491        15,283
Accrued compensation                                                                    4,780         11,106
Billings in excess of services provided                                                 (5,370   )    7,577
Net cash provided by operating activities                                               139,920       135,401
Investing activities
Payments for acquisition of businesses, net of cash received                            (575     )    (23,467 )
Purchases of property and equipment                                                     (31,399  )    (39,256 )
Other                                                                                   237           5,128
Net cash used in investing activities                                                   (31,737  )    (57,595 )
Financing activities
Borrowings under revolving line of credit, net                                          200,000       -
Payments of long-term debt                                                              (425,671 )    (6,014  )
Payments of debt financing fees                                                         (3,843   )    -
Deposits                                                                                3,227         13,071
Purchase and retirement of common stock                                                 (26,532  )    (4,367  )
Net issuance of common stock under equity compensation plans                            16,666        4,772
Other                                                                                   191           (1,132  )
Net cash (used in) provided by financing activities                                     (235,962 )    6,330
Effect of exchange rate changes on cash and cash equivalents                            (6,141   )    (6,289  )
Net increase in cash and cash equivalents                                               (133,920 )    77,847
Cash and cash equivalents, beginning of period                                          283,680       205,833
Cash and cash equivalents, end of period                                          $     149,760     $ 283,680
FTI CONSULTING, INC.
CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2015 AND DECEMBER 31, 2014
(in thousands, except per share amounts)
                                                                                                                               December 31,       December 31,
                                                                                                                                     2015               2014
Assets
Current assets
Cash and cash equivalents                                                                                                      $     149,760      $     283,680
Accounts receivable:
Billed receivables                                                                                                                   405,000            381,464
Unbilled receivables                                                                                                                 280,538            248,462
Allowance for doubtful accounts and unbilled services                                                                                (185,754  )        (144,825  )
Accounts receivable, net                                                                                                             499,784            485,101
Current portion of notes receivable                                                                                                  36,115             27,208
Prepaid expenses and other current assets                                                                                            55,966             60,852
Total current assets                                                                                                                 741,625            856,841
Property and equipment, net of accumulated depreciation                                                                              74,760             82,163
Goodwill                                                                                                                             1,198,298          1,211,689
Other intangible assets, net of amortization                                                                                         63,935             77,034
Notes receivable, net of current portion                                                                                             106,882            122,149
Other assets                                                                                                                         43,518             41,723
Total assets                                                                                                                   $     2,229,018    $     2,391,599
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable, accrued expenses and other                                                                                   $     89,845       $     99,494
Accrued compensation                                                                                                                 227,783            220,959
Current portion of long-term debt                                                                                                    -                  11,000
Billings in excess of services provided                                                                                              29,449             35,639
Total current liabilities                                                                                                            347,077            367,092
Long-term debt                                                                                                                       494,772            688,404
Deferred income taxes                                                                                                                139,787            134,600
Other liabilities                                                                                                                    99,779             98,757
Total liabilities                                                                                                                    1,081,415          1,288,853
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 ??? 41,235 (2015) and 41,181 (2014)       412                412
Additional paid-in capital                                                                                                           400,705            393,174
Retained earnings                                                                                                                    855,481            789,428
Accumulated other comprehensive loss                                                                                                 (108,995  )        (80,268   )
Total stockholders’ equity                                                                                                           1,147,603          1,102,746
Total liabilities and stockholders’ equity                                                                                     $     2,229,018    $     2,391,599
FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100

Investor & Media Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com

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