• FTI Consulting Reports Record Third Quarter 2019 Financial Results

    Source: Nasdaq GlobeNewswire / 24 Oct 2019 07:30:19   America/New_York

    • Third Quarter 2019 Revenues of $593.1 Million, Up 15.6% Compared to $513.0 Million in Prior Year Quarter
    • Third Quarter 2019 EPS of $1.59, Up 39.5% Compared to $1.14 in Prior Year Quarter; Third Quarter 2019 Adjusted EPS of $1.63, Up 63.0% Compared to $1.00 in Prior Year Quarter
    • Company Raises Full Year 2019 Guidance Ranges for Revenues, EPS and Adjusted EPS to Reflect Record Year-to-Date 2019 Performance

    WASHINGTON, Oct. 24, 2019 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended September 30, 2019.

    Third quarter 2019 revenues of $593.1 million increased $80.1 million, or 15.6%, compared to revenues of $513.0 million in the prior year quarter. Excluding the estimated negative impact from foreign currency translation ("FX"), revenues increased $86.7 million, or 16.9%, compared to the prior year quarter. The increase in revenues was driven by higher demand across all business segments compared to the prior year quarter. Net income of $60.4 million compared to $44.3 million in the prior year quarter. The increase in net income was primarily due to higher operating profits in the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments.

    Adjusted EBITDA of $92.3 million, or 15.6% of revenues, compared to $67.4 million, or 13.1% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was primarily due to higher revenues in the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments, which was partially offset by higher compensation, primarily related to a 16.7% increase in billable headcount and higher variable compensation, as well as higher selling, general and administrative ("SG&A") expenses compared to the prior year quarter.

    Third quarter 2019 fully diluted earnings per share ("EPS") of $1.59 compared to $1.14 in the prior year quarter. Third quarter 2019 EPS included $2.2 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which decreased EPS by $0.04. Third quarter 2018 EPS included a $6.2 million after-tax gain related to the sale of the Company's Ringtail e-discovery software and related business ("Ringtail divestiture"), which increased EPS by $0.16. Third quarter 2019 Adjusted EPS of $1.63, which excludes the non-cash interest expense, compared to Adjusted EPS of $1.00 in the prior year quarter.

    Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “These powerful results reflect our focus: investing in great professionals to enhance our ability to serve our clients as they navigate their most complex business challenges and opportunities.”

    Cash Position and Capital Allocation
    Net cash provided by operating activities of $131.3 million for the quarter ended September 30, 2019 compared to $120.9 million for the quarter ended September 30, 2018. The year-over-year increase in cash provided by operating activities was largely due to an increase in cash collected resulting from higher revenues compared to the prior year quarter, which was partially offset by an increase in compensation-related costs.

    During the quarter, the Company repurchased 90,848 shares of its common stock at an average price per share of $85.11 for a total cost of $7.7 million. As of September 30, 2019, approximately $94.6 million remained available for stock repurchases under the Company’s $400.0 million stock repurchase authorization.

    Cash and cash equivalents of $258.5 million at September 30, 2019 compared to $505.9 million at September 30, 2018 and $189.1 million at June 30, 2019. Total debt, net of cash, of $57.8 million at September 30, 2019 compared to $110.4 million at September 30, 2018 and $147.1 million at June 30, 2019. The sequential decrease in total debt, net of cash, was primarily due to an increase in cash provided by operating activities and repayment of borrowings under the Company’s revolving credit facility, which was partially offset by payments related to the August 2019 acquisition of Andersch AG.

    Third Quarter 2019 Segment Results

    Corporate Finance & Restructuring
    Revenues in the Corporate Finance & Restructuring segment increased $56.3 million, or 41.6%, to
    $191.7 million in the quarter compared to $135.4 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $57.7 million, or 42.6%, compared to the prior year quarter. The increase in revenues was due to higher demand for restructuring and business transformation and transactions services. Adjusted Segment EBITDA of $48.1 million, or 25.1% of segment revenues, compared to $26.8 million, or 19.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues with improved utilization, which was partially offset by higher compensation, related to an increase in variable compensation and billable headcount and higher SG&A expenses.

    Forensic and Litigation Consulting
    Revenues in the Forensic and Litigation Consulting segment increased $16.0 million, or 12.6%, to $142.7 million in the quarter compared to $126.7 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $17.0 million, or 13.4%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for disputes and investigations services. Adjusted Segment EBITDA of $27.0 million, or 18.9% of segment revenues, compared to $22.0 million, or 17.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to an increase in billable headcount and higher SG&A expenses.

    Economic Consulting
    Revenues in the Economic Consulting segment increased $2.5 million, or 1.8%, to $141.7 million in the quarter compared to $139.2 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $4.7 million, or 3.4%, compared to the prior year quarter. The increase in revenues was largely due to higher demand for non-merger and acquisition-related antitrust services. Adjusted Segment EBITDA of $19.4 million, or 13.7% of segment revenues, compared to $23.2 million, or 16.7% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, related to an increase in variable compensation and billable headcount and higher SG&A expenses.

    Technology
    Revenues in the Technology segment increased $0.4 million, or 0.7%, to $57.1 million in the quarter compared to $56.7 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $0.9 million, or 1.5%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for global cross-border investigations and litigation services, which was offset by lower demand for merger and acquisition-related “second request” services. Adjusted Segment EBITDA of $12.3 million, or 21.5% of segment revenues, compared to $11.5 million, or 20.2% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues and lower SG&A expenses, largely due to a decline in research and development expense resulting from the September 2018 Ringtail divestiture, which was partially offset by higher compensation, due to an increase in billable headcount and variable compensation.

    Strategic Communications
    Revenues in the Strategic Communications segment increased $4.9 million, or 8.9%, to $60.0 million in the quarter compared to $55.1 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $6.4 million, or 11.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for project-based corporate reputation services in North America and Europe, the Middle East and Africa. Adjusted Segment EBITDA of $12.6 million, or 21.1% of segment revenues, compared to $10.8 million, or 19.6% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, related to an increase in billable headcount and variable compensation and higher SG&A expenses.

    2019 Guidance
    Given the record year-to-date 2019 performance, the Company is raising its full year revenue, EPS and Adjusted EPS guidance for 2019. The Company now estimates that 2019 revenues will range between $2.250 billion and $2.300 billion. This compares to the previous revenue guidance of between $2.175 billion and $2.250 billion. The Company now estimates that 2019 EPS will range between $5.63 and $5.88. This compares to the previous EPS guidance of between $4.88 and $5.38. The Company now estimates that 2019 Adjusted EPS will range between $5.75 and $6.00. This compares to the previous Adjusted EPS guidance of between $5.00 and $5.50. The $0.12 per share variance between EPS and Adjusted EPS guidance for full year 2019 includes estimated non-cash interest expense of approximately $0.17 per share related to the Company’s 2023 Convertible Notes and the first quarter 2019 $0.05 per share tax gain related to the Ringtail divestiture.

    Third Quarter 2019 Conference Call
    FTI Consulting will host a conference call for analysts and investors to discuss third quarter financial results at 9:00 a.m. Eastern Time on Thursday, October 24, 2019. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations website here.

    About FTI Consulting
    FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,700 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.03 billion in revenues during the fiscal year 2018. More information can be found at www.fticonsulting.com.

    Use of Non-GAAP Measures
    In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles ("GAAP"). Certain of these measures are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP measures:

    • Total Segment Operating Income
    • Adjusted EBITDA
    • Total Adjusted Segment EBITDA
    • Adjusted EBITDA Margin
    • Adjusted Net Income
    • Adjusted Earnings per Diluted Share
    • Free Cash Flow

    We have included the definitions of Segment Operating Income (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, gain or loss on sale of a business and the impact of adopting the 2017 U.S. Tax Cuts and Jobs Act (the "2017 Tax Act"). We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that 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 operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.

    Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Consolidated Statements of Comprehensive Income. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

    Safe Harbor Statement

    This press release includes "forward-looking 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; and other future events, which could impact each of our segments differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies, competitive and general economic conditions; retention of staff and clients; new laws and regulations, or changes thereto, including the 2017 Tax Act; and other risks described under the heading "Item 1A, Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations," and in the Company’s other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

    FINANCIAL TABLES FOLLOW


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

      September 30, December 31,
      2019 2018
      (unaudited)  
    Assets    
    Current assets    
    Cash and cash equivalents $258,470  $312,069 
    Accounts receivable:    
    Billed receivables 552,253  437,797 
    Unbilled receivables 455,342  319,205 
    Allowances for doubtful accounts and unbilled services (268,132) (202,394)
    Accounts receivable, net 739,463  554,608 
    Current portion of notes receivable 32,368  29,228 
    Prepaid expenses and other current assets 65,849  69,448 
    Total current assets 1,096,150  965,353 
    Property and equipment, net 92,135  84,577 
    Operating lease assets 152,064   
    Goodwill 1,197,406  1,172,316 
    Other intangible assets, net 41,247  34,633 
    Notes receivable, net 78,800  84,471 
    Other assets 32,467  37,771 
    Total assets $2,690,269  $2,379,121 
    Liabilities and Stockholders' Equity    
    Current liabilities    
    Accounts payable, accrued expenses and other $158,136  $104,600 
    Accrued compensation 354,299  333,536 
    Billings in excess of services provided 34,349  44,434 
    Total current liabilities 546,784  482,570 
    Long-term debt, net 273,055  265,571 
    Non-current operating lease liabilities 171,410   
    Deferred income taxes 159,406  155,088 
    Other liabilities 78,380  127,067 
    Total liabilities 1,229,035  1,030,296 
    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 — 37,629 (2019) and 38,147 (2018) 376  381 
    Additional paid-in capital 240,508  299,534 
    Retained earnings 1,384,392  1,196,727 
    Accumulated other comprehensive loss (164,042) (147,817)
    Total stockholders' equity 1,461,234  1,348,825 
    Total liabilities and stockholders' equity $2,690,269  $2,379,121 
             


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

     Three Months Ended September 30,
     2019 2018
     (unaudited)
    Revenues$593,106  $513,012 
    Operating expenses   
    Direct cost of revenues380,892  336,477 
    Selling, general and administrative expenses127,951  117,448 
    Amortization of other intangible assets2,125  1,975 
     510,968  455,900 
    Operating income82,138  57,112 
    Other income (expense)   
    Interest income and other2,973  1,400 
    Interest expense(4,832) (7,246)
    Gain on sale of business  13,031 
     (1,859) 7,185 
    Income before income tax provision80,279  64,297 
    Income tax provision19,857  19,964 
    Net income$60,422  $44,333 
    Earnings per common share ― basic$1.65  $1.19 
    Weighted average common shares outstanding ― basic36,617  37,318 
    Earnings per common share ― diluted$1.59  $1.14 
    Weighted average common shares outstanding ― diluted37,938  38,756 
    Other comprehensive loss, net of tax   
    Foreign currency translation adjustments, net of tax expense of $0 and $373$(16,633) $(4,180)
    Total other comprehensive loss, net of tax(16,633) (4,180)
    Comprehensive income$43,789  $40,153 
            


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

     Nine Months Ended September 30,
     2019 2018
     (unaudited)
    Revenues$1,750,499  $1,522,884 
    Operating expenses   
    Direct cost of revenues1,116,224  987,912 
    Selling, general and administrative expenses371,042  347,473 
    Amortization of other intangible assets5,838  6,297 
     1,493,104  1,341,682 
    Operating income257,395  181,202 
    Other income (expense)   
    Interest income and other5,741  2,074 
    Interest expense(14,371) (20,073)
    Gain on sale of business  13,031 
     (8,630) (4,968)
    Income before income tax provision248,765  176,234 
    Income tax provision61,100  49,347 
    Net income$187,665  $126,887 
    Earnings per common share ― basic$5.09  $3.43 
    Weighted average common shares outstanding ― basic36,851  37,008 
    Earnings per common share ― diluted$4.92  $3.32 
    Weighted average common shares outstanding ― diluted38,107  38,214 
    Other comprehensive loss, net of tax   
    Foreign currency translation adjustments, net of tax expense of $0 and $373$(16,225) $(17,417)
    Total other comprehensive loss, net of tax(16,225) (17,417)
    Comprehensive income$171,440  $109,470 
            


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

      Three Months Ended September 30, Nine Months Ended September 30,
      2019 2018 2019 2018
      (Unaudited) (Unaudited)
    Net income $60,422  $44,333  $187,665  $126,887 
    Add back:        
    Non-cash interest expense on convertible notes 2,166  938  6,411  938 
    Tax impact of non-cash interest expense on convertible notes (563) (241) (1,666) (241)
    Gain on sale of business   (13,031)   (13,031)
    Tax impact of gain on sale of business (1)   6,798  (2,097) 6,798 
    Adjusted net income $62,025  $38,797  $190,313  $121,351 
    Earnings per common share — diluted $1.59  $1.14  $4.92  $3.32 
    Add back:        
    Non-cash interest expense on convertible notes 0.06  0.03  0.17  0.03 
    Tax impact of non-cash interest expense on convertible notes (0.02) (0.01) (0.04) (0.01)
    Gain on sale of business   (0.34)   (0.34)
    Tax impact of gain on sale of business (1)   0.18  (0.06) 0.18 
    Adjusted earnings per common share — diluted $1.63  $1.00  $4.99  $3.18 
    Weighted average number of common shares outstanding ― diluted 37,938  38,756  38,107  38,214 

    (1)  In 2019, represents a discrete tax adjustment resulting from a change in estimate related to the accounting for the sale of Ringtail.



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

      Year Ended December 31, 2019
      Low High
    Guidance on estimated earnings per common share diluted (GAAP) (1) $5.63  $5.88 
    Non-cash interest expense on convertible notes, net of tax 0.17  0.17 
    Tax impact of gain on sale of business (0.05) (0.05)
    Guidance on estimated adjusted earnings per common share (non-GAAP) (1) $5.75  $6.00 

    (1)   The forward-looking guidance on estimated 2019 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.



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

    Three Months Ended September 30, 2019
    (unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $60,422 
    Interest income and other             (2,973)
    Interest expense             4,832 
    Income tax provision             19,857 
    Operating income $46,007  $25,534  $17,943  $9,094  $11,343  $(27,783) $82,138 
    Depreciation and amortization 964  1,188  1,426  3,192  619  691  8,080 
    Amortization of other intangible assets 1,113  286  44    682    2,125 
    Adjusted EBITDA $48,084  $27,008  $19,413  $12,286  $12,644  $(27,092) $92,343 
                   
    Nine Months Ended September 30, 2019
    (unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $187,665 
    Interest income and other             (5,741)
    Interest expense             14,371 
    Income tax provision             61,100 
    Operating income $130,470  $82,753  $62,179  $30,080  $30,691  $(78,778) $257,395 
    Depreciation and amortization 2,821  3,448  4,454  7,804  1,782  2,074  22,383 
    Amortization of other intangible assets 2,646  865  133    2,194    5,838 
    Adjusted EBITDA $135,937  $87,066  $66,766  $37,884  $34,667  $(76,704) $285,616 
                                 


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

    Three Months Ended September 30, 2018
    (unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $44,333 
    Interest income and other             (1,400)
    Interest expense             7,246 
    Gain on sale of business             (13,031)
    Income tax provision             19,964 
    Operating income $25,252  $20,625  $21,713  $7,926  $9,402  $(27,806) $57,112 
    Depreciation and amortization 779  1,036  1,468  3,537  568  907  8,295 
    Amortization of other intangible assets 767  309  57  10  832    1,975 
    Adjusted EBITDA $26,798  $21,970  $23,238  $11,473  $10,802  $(26,899) $67,382 
                   
    Nine Months Ended September 30, 2018
    (unaudited)
     Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $126,887 
    Interest income and other             (2,074)
    Interest expense             20,073 
    Gain on sale of business             (13,031)
    Income tax provision             49,347 
    Operating income $92,504  $71,128  $53,385  $14,486  $27,275  $(77,576) $181,202 
    Depreciation and amortization 2,534  3,195  4,209  10,141  1,747  2,722  24,548 
    Amortization of other intangible assets 2,341  1,019  252  86  2,599    6,297 
    Adjusted EBITDA $97,379  $75,342  $57,846  $24,713  $31,621  $(74,854) $212,047 
                                 


    FTI CONSULTING, INC.
    OPERATING RESULTS BY BUSINESS SEGMENT

     
    Segment
    Revenues
     Adjusted
    EBITDA
     Adjusted EBITDA
    Margin
     Utilization  Average
    Billable
    Rate
     Revenue-
    Generating
    Headcount
      (in thousands)       (at period end)
    Three Months Ended September 30, 2019 (unaudited)           
    Corporate Finance & Restructuring$191,698 $48,084  25.1% 70% $449 1,177
    Forensic and Litigation Consulting142,651 27,008  18.9% 61% $336 1,326
    Economic Consulting141,715 19,413  13.7% 70% $512 764
    Technology (1)57,083 12,286  21.5% N/M N/M 348
    Strategic Communications (1)59,959 12,644  21.1% N/M N/M 719
     $593,106 $119,435  20.1%     4,334
    Unallocated Corporate  (27,092)        
    Adjusted EBITDA  $92,343  15.6%      
                
    Nine Months Ended September 30, 2019
    (unaudited)
               
    Corporate Finance & Restructuring$542,667 $135,937  25.0% 70% $451 1,177
    Forensic and Litigation Consulting427,518 87,066  20.4% 64% $336 1,326
    Economic Consulting439,488 66,766  15.2% 76% $500 764
    Technology (1)164,051 37,884  23.1% N/M N/M 348
    Strategic Communications (1)176,775 34,667  19.6% N/M N/M 719
     $1,750,499 $362,320  20.7%     4,334
    Unallocated Corporate  (76,704)        
    Adjusted EBITDA  $285,616  16.3%      
                
    Three Months Ended September 30, 2018 (unaudited)           
    Corporate Finance & Restructuring$135,418 $26,798  19.8% 65% $414 926
    Forensic and Litigation Consulting126,684 21,970  17.3% 63% $327 1,129
    Economic Consulting139,166 23,238  16.7% 71% $540 705
    Technology (1)56,692 11,473  20.2% N/M N/M 303
    Strategic Communications (1)55,052 10,802  19.6% N/M N/M 652
     $513,012 $94,281  18.4%     3,715
    Unallocated Corporate  (26,899)        
    Adjusted EBITDA  $67,382  13.1%      
                
    Nine Months Ended September 30, 2018
    (unaudited)
               
    Corporate Finance & Restructuring$419,695 $97,379  23.2% 67% $425 926
    Forensic and Litigation Consulting388,250 75,342  19.4% 65% $328 1,129
    Economic Consulting405,583 57,846  14.3% 70% $515 705
    Technology (1)144,035 24,713  17.2% N/M N/M 303
    Strategic Communications (1)165,321 31,621  19.1% N/M N/M 652
     $1,522,884 $286,901  18.8%     3,715
    Unallocated Corporate  (74,854)        
    Adjusted EBITDA  $212,047  13.9%      
                
    N/M Not meaningful           
    (1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.
     


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

     Nine Months Ended September 30,
     2019 2018
     (unaudited)
    Operating activities   
    Net income$187,665  $126,887 
    Adjustments to reconcile net income to net cash provided by operating activities:   
    Depreciation and amortization22,384  24,548 
    Amortization and impairment of other intangible assets5,838  6,297 
    Acquisition-related contingent consideration717  355 
    Provision for doubtful accounts13,552  11,951 
    Non-cash share-based compensation14,060  12,219 
    Amortization of debt discount and issuance costs8,666  2,604 
    Gain on sale of business  (13,031)
    Other248  751 
    Changes in operating assets and liabilities, net of effects from acquisitions:   
    Accounts receivable, billed and unbilled(191,644) (130,369)
    Notes receivable2,521  2,659 
    Prepaid expenses and other assets(5,817) (174)
    Accounts payable, accrued expenses and other(7,332) 16,150 
    Income taxes30,777  28,922 
    Accrued compensation5,156  7,207 
    Billings in excess of services provided(9,925) (10,704)
    Net cash provided by operating activities76,866  86,272 
    Investing activities   
    Proceeds from sale of business  50,283 
    Payments for acquisition of businesses, net of cash received(18,791)  
    Purchases of property and equipment(27,026) (27,841)
    Other55  741 
    Net cash provided by (used in) investing activities(45,762) 23,183 
    Financing activities   
    Repayments under revolving line of credit, net  (100,000)
    Proceeds from issuance of convertible notes  316,250 
    Payments of debt issue costs  (8,048)
    Deposits535  2,327 
    Purchase and retirement of common stock(77,949) (29,220)
    Net issuance of common stock under equity compensation plans3,176  31,241 
    Payments for business acquisition liabilities(2,282) (3,029)
    Net cash provided by (used in) financing activities(76,520) 209,521 
    Effect of exchange rate changes on cash and cash equivalents(8,183) (3,070)
    Net increase (decrease) in cash and cash equivalents(53,599) 315,906 
    Cash and cash equivalents, beginning of period312,069  189,961 
    Cash and cash equivalents, end of period$258,470  $505,867 
            

    FTI Consulting, Inc.
    555 12th Street NW Washington, D.C. 20004
    +1.202.312.9100

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

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