WEST PALM BEACH, Fla.,
Feb. 23, 2012 /PRNewswire/ --
FTI Consulting, Inc. (NYSE: FCN), the global business
advisory firm dedicated to helping organizations protect and
enhance their enterprise value, today reported its financial
results for the fourth quarter and full year ended December 31, 2011.
For the quarter, revenues increased 9.7 percent to a fourth
quarter record of $390.7 million
compared to $356.2 million in the
prior year quarter. Diluted earnings per share and Adjusted EPS for
the quarter were $0.93. For the
quarter, Adjusted EPS before a $10.0
million revaluation gain (described elsewhere in this press
release) were $0.70, representing a
34.6 percent increase over Adjusted EPS for the prior year
quarter.
Cash from operations in the quarter was $127.0 million compared to $99.2 million in the prior year, and Cash and
Cash equivalents were $264.4 million
at December 31, 2011.
Adjusted EPS, Adjusted EBITDA, Adjusted Segment EBITDA and
Adjusted Net Income (which appear in the accompanying tables) are
non-GAAP measures, as defined elsewhere in this press release and
are reconciled to GAAP measures in the financial tables that
accompany this press release.
Commenting on these results, Jack
Dunn, President and Chief Executive Officer of the Company
said:
"This was a great year for FTI Consulting. Strong
performances for Economics, Technology and FLC in the fourth
quarter capped annual growth rates of 38 percent, 24 percent and 13
percent, respectively. Our global strategy of solving client
issues wherever and whenever they occur continues to be validated
by fourth quarter revenue growth in Latin
America of 84 percent, Asia
Pacific of 72 percent and EMEA of 26 percent.
"Innovation in our services and products and in the way we go to
market is an important area of focus for our Company. We
continue to lead in innovation of proprietary intellectual property
in our technology segment, as demonstrated by industry awards, the
success of our Acuity offering, the roll out of Ringtail® 8 and the
application of intelligent review and predictive coding to provide
better and more cost effective solutions for our clients. We
have significantly increased our domain expertise in important
industries such as healthcare, insurance and energy. We are
offering new and enhanced services to major institutional investors
around the world including global due diligence, transparency and
compliance investigations.
"This growth and innovation is possible because of our sound
financial position – our balance sheet, cash generation and
earnings are sources of stability and allow us to invest in people
and processes that form the foundation for continued organic growth
and growth through acquisitions.
"We used this strength to complete a $500
million share repurchase program over the last two years
without adversely affecting our financial position. We also
capitalized on our position as an industry leader to attract over
200 great professionals from LECG through a series of transactions.
These professionals, now benefitting from the strength of the
FTI platform, are generating annualized revenue in excess of
$100 million.
"Finally, we completed our 'one firm' project and now look to
benefit from a common approach and brand around the globe. Our
people have embraced 'FTI Consulting' as their brand, their shared
vision and the platform from which they will continue to serve
clients with wisdom, expertise, experience and enthusiasm. We
look forward to 2012."
Fourth Quarter Segment Results
Corporate Finance/Restructuring
Revenues in the Corporate Finance/Restructuring segment
decreased 4.3 percent to $108.4
million from $113.2 million in
the prior year quarter. While the pace of the business continued
generally consistent with the prior three quarters, reduced demand
for restructuring services was partially offset by improvements in
the segment's healthcare practice and contributions from its
European tax group acquired from LECG. Adjusted Segment EBITDA
before the revaluation gain was $29.4
million, or 27.1 percent of segment revenues, compared with
$26.8 million, or 23.6 percent of
segment revenues, in the prior year quarter.
Forensic and Litigation Consulting
For the quarter, revenues in the Forensic and Litigation
Consulting segment increased 11.1 percent to $90.0 million from $81.0
million in the prior year quarter. Organic revenue growth of
$3.5 million, or 4.3 percent, was
driven by increased demand in the Asia
Pacific region for forensic accounting and litigation
support services, construction solutions, and higher revenues in
the data analytics practice. The remainder of the increase resulted
from revenues generated by the acquired LECG practices. Adjusted
Segment EBITDA before the revaluation gain was $15.2 million in the quarter, or 16.9 percent of
segment revenues, compared to $18.2
million, or 22.5 percent of segment revenues, in the prior
year quarter. The decrease in Adjusted Segment EBITDA margin was
primarily due to the investment in acquired practices and senior
practitioners who have yet to achieve targeted revenue
production.
Economic Consulting
For the quarter, revenues in the Economic Consulting segment
increased 39.1 percent to $89.6
million from $64.4 million in
the prior year quarter. Organic revenue growth of $7.4 million, or 11.4 percent, was primarily
attributable to increased demand for our antitrust and M&A
practice and our financial economics practice. The remainder of the
increase resulted from revenues generated by the acquired LECG
practices. Adjusted Segment EBITDA was $16.4
million, or 18.3 percent of segment revenues, compared to
$12.8 million, or 19.9 percent of
segment revenues, in the prior year quarter. The decrease in
Adjusted Segment EBITDA margin was primarily attributable to higher
variable compensation costs relative to 2010 and margin compression
from the acquired practices, partially offset by higher total
segment utilization and lower bad debt expense.
Technology
Revenues in the Technology segment increased 12.3 percent to
$53.6 million from $47.7 million in the prior year quarter. The
segment continued to benefit from investigation, litigation, and
M&A activity. Several large client assignments drove higher
demand for our Acuity™ review services, our on-demand hosting
services and our associated consulting services. This increase was
partially offset by lower direct licensing revenue compared to the
prior year quarter. Adjusted Segment EBITDA was $18.6 million or 34.8 percent of segment
revenues, compared to $17.7 million,
or 37.1 percent of segment revenues, in the prior year quarter. The
decrease in Adjusted Segment EBITDA margin was primarily due to a
change in the mix of revenue with higher third party costs related
to an increase in certain litigation engagements.
Strategic Communications
Revenues in the Strategic Communications segment decreased
slightly to $49.2 million from
$49.9 million in the prior year
quarter. Adjusted Segment EBITDA was $7.5
million, or 15.3 percent of segment revenues, compared to
$7.4 million, or 14.8 percent of
segment revenues, in the prior year quarter.
Revaluation Gain – Acquisition-Related Contingent
Consideration
Despite favorable performance of our recent Asian acquisition,
the Company revalued the acquisition-related contingent
consideration liability. This revaluation was based upon a
reduction in the consideration expected to be paid during the
remainder of the finite earnout period. The resulting
reduction in the liability of $10.0
million was recorded as income and is included within
"Acquisition-related contingent consideration" in the Consolidated
Statements of Income.
2012 Guidance
Based on current market conditions and the factors described
above, the Company estimates that revenues for 2012 will be between
$1.60 billion and $1.72 billion and
diluted EPS will be between $2.80 and
$3.00. This guidance assumes no acquisitions and no share
repurchases.
Fourth Quarter Conference Call
FTI will hold a conference call for analysts and investors to
discuss fourth quarter financial results at 9:00 AM Eastern Time on February 24, 2012. 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
http://www.fticonsulting.com.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm
dedicated to helping organizations protect and enhance enterprise
value in an increasingly complex legal, regulatory and economic
environment. With more than 3,800 employees located in 23
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 and
restructuring. More information can be found at
http://www.fticonsulting.com.
Use of Non-GAAP Measure
Note: We define Adjusted EBITDA as consolidated
operating income before depreciation, amortization of intangible
assets and special charges. We define Adjusted Segment EBITDA as a
segment's share of consolidated operating income before
depreciation, amortization of intangible assets and special
charges. We define Adjusted Net Income as the net income
excluding special charges and debt extinguishment costs that were
incurred in that period. We define Adjusted earnings per diluted
share (Adjusted EPS) as earnings per diluted share excluding the
per share impact of special charges and debt extinguishment costs
that were incurred in that period. Although Adjusted EBITDA,
Adjusted Segment EBITDA, Adjusted Net Income and Adjusted EPS are
not measures of financial condition or performance determined in
accordance with generally accepted accounting principles ("GAAP"),
we believe that these measures can be a useful operating
performance measure for evaluating our results of operations as
compared from period to period and as compared to our competitors.
Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are common
alternative measures of operating performance which may be used by
investors, financial analysts and rating agencies to value and
compare the financial performance of companies in our industry. We
use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate
and compare the operating performance of our segments. Adjusted
EBITDA, Adjusted Segment EBITDA, Adjusted Net Income and Adjusted
EPS are not defined in the same manner by all companies and may not
be comparable to other similarly titled measures of other companies
unless the definition is the same. These non-GAAP measures should
be considered in addition to, but not as a substitute for or
superior to, the information contained in our statements of income.
Reconciliations of operating income to Adjusted EBITDA, segment
operating income to Adjusted Segment EBITDA, net income to Adjusted
Net Income and EPS to Adjusted EPS are included in the accompanying
tables to today's 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 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 and in the Company's other filings with the Securities and
Exchange Commission, including the risks set forth under "Risks
Related to Our Business 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 INCOME
|
|
FOR THE
YEARS ENDED DECEMBER 31, 2011 AND 2010
|
|
(in
thousands, except per share data)
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2011
|
|
2010
(1)
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
1,566,768
|
|
$
1,401,461
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Direct cost of
revenues
|
956,908
|
|
825,599
|
|
Selling, general and
administrative expense
|
373,295
|
|
341,239
|
|
Special charges
|
15,212
|
|
51,131
|
|
Acquisition-related
contingent consideration
|
(6,465)
|
|
1,190
|
|
Amortization of other
intangible assets
|
22,371
|
|
23,910
|
|
|
1,361,321
|
|
1,243,069
|
|
|
|
|
|
|
Operating income
|
205,447
|
|
158,392
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
Interest income and
other
|
6,304
|
|
4,423
|
|
Interest
expense
|
(58,624)
|
|
(50,263)
|
|
Loss on early
extinguishment of debt
|
-
|
|
(5,161)
|
|
|
(52,320)
|
|
(51,001)
|
|
|
|
|
|
|
Income before income tax
provision
|
153,127
|
|
107,391
|
|
|
|
|
|
|
Income tax
provision
|
49,224
|
|
41,407
|
|
|
|
|
|
|
Net income
|
$
103,903
|
|
$
65,984
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
- basic
|
$
2.53
|
|
$
1.45
|
|
Weighted average common shares
outstanding - basic
|
41,131
|
|
45,557
|
|
|
|
|
|
|
Earnings per common share -
diluted
|
$
2.39
|
|
$
1.38
|
|
Weighted average common shares
outstanding - diluted
|
43,473
|
|
47,664
|
|
|
|
|
|
(1) These amounts are revised
based upon our completion of a re-examination of our
historical practices regarding our accounting for compensation
expense related to our Senior Managing Director Incentive
Compensation Program and related agreements. In connection
with this evaluation, we concluded that we had reported immaterial
errors in prior period financial statements. Further
information related to these immaterial errors can be found in the
Current Report on Form 8-K as filed by the Company with the
Securities and Exchange Commission on November 2, 2011. This
press release should be read in conjunction with such previously
filed Form 8-K. The impact of the correction of these errors
resulted in a decrease in net income of $5.9 million and a decrease
in basic and fully-diluted earnings per share of $0.13 for the year
ended December 31, 2010.
|
|
|
FTI
CONSULTING, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
FOR THE
THREE MONTHS ENDED DECEMBER 31, 2011 AND 2010
|
|
(in
thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
|
2011
|
|
2010
(1)
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
390,713
|
|
$
356,248
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Direct cost of
revenues
|
233,005
|
|
207,959
|
|
Selling, general and
administrative expense
|
92,932
|
|
88,222
|
|
Special charges
|
-
|
|
21,775
|
|
Acquisition-related
contingent consideration
|
(9,004)
|
|
1,011
|
|
Amortization of other
intangible assets
|
5,576
|
|
5,681
|
|
|
322,509
|
|
324,648
|
|
|
|
|
|
|
Operating income
|
68,204
|
|
31,600
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
Interest income and
other
|
895
|
|
(317)
|
|
Interest
expense
|
(14,495)
|
|
(15,663)
|
|
|
(13,600)
|
|
(15,980)
|
|
|
|
|
|
|
Income before income tax
provision
|
54,604
|
|
15,620
|
|
|
|
|
|
|
Income tax
provision
|
14,723
|
|
6,765
|
|
|
|
|
|
|
Net income
|
$
39,881
|
|
$
8,855
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
- basic
|
$
1.00
|
|
$
0.20
|
|
Weighted average common shares
outstanding - basic
|
39,932
|
|
45,110
|
|
|
|
|
|
|
Earnings per common share -
diluted
|
$
0.93
|
|
$
0.19
|
|
Weighted average common shares
outstanding - diluted
|
42,857
|
|
46,972
|
|
|
|
|
|
(1) These amounts are revised
based upon our completion of a re-examination of our historical
practices regarding our accounting for compensation expense related
to our Senior Managing Director Incentive Compensation Program and
related agreements. In connection with this evaluation, we
concluded that we had reported immaterial errors in prior period
financial statements. Further information related to these
immaterial errors can be found in the Current Report on Form 8-K as
filed by the Company with the Securities and Exchange Commission on
November 2, 2011. This press release should be read in
conjunction with such previously filed Form 8-K. The impact
of the correction of these errors resulted in a decrease in net
income of $1.8 million and a decrease in basic and fully-diluted
earnings per share of $0.04 for the three months ended December 31,
2010.
|
|
|
FTI
CONSULTING, INC.
|
|
OPERATING
RESULTS BY BUSINESS SEGMENT
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
Revenue-
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Billable
|
|
Generating
|
|
|
|
Revenues
|
|
EBITDA
(1)
|
|
Margin
|
|
Utilization
|
|
Rate
|
|
Headcount
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Finance/Restructuring
|
|
$
108,352
|
|
$
38,466
|
|
35.5%
|
|
72%
|
|
$
438
|
|
692
|
|
Forensic and Litigation
Consulting
|
|
89,981
|
|
16,134
|
|
17.9%
|
|
68%
|
|
$
325
|
|
852
|
|
Economic
Consulting
|
|
89,580
|
|
16,394
|
|
18.3%
|
|
83%
|
|
$
472
|
|
433
|
|
Technology
(2)
|
|
53,601
|
|
18,649
|
|
34.8%
|
|
N/M
|
|
N/M
|
|
290
|
|
Strategic
Communications (2)
|
|
49,199
|
|
7,532
|
|
15.3%
|
|
N/M
|
|
N/M
|
|
582
|
|
|
|
$
390,713
|
|
97,175
|
|
24.9%
|
|
N/M
|
|
N/M
|
|
2,849
|
|
Corporate
|
|
|
|
(16,320)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
|
|
|
$
80,855
|
|
20.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Finance/Restructuring
|
|
$
427,813
|
|
$
97,638
|
|
22.8%
|
|
70%
|
|
$
427
|
|
692
|
|
Forensic and Litigation
Consulting
|
|
365,326
|
|
69,180
|
|
18.9%
|
|
69%
|
|
$
330
|
|
852
|
|
Economic
Consulting
|
|
353,981
|
|
67,028
|
|
18.9%
|
|
85%
|
|
$
482
|
|
433
|
|
Technology
(2)
|
|
218,738
|
|
77,011
|
|
35.2%
|
|
N/M
|
|
N/M
|
|
290
|
|
Strategic
Communications (2)
|
|
200,910
|
|
26,801
|
|
13.3%
|
|
N/M
|
|
N/M
|
|
582
|
|
|
|
$
1,566,768
|
|
337,658
|
|
21.6%
|
|
N/M
|
|
N/M
|
|
2,849
|
|
Corporate
|
|
|
|
(66,046)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
|
|
|
$
271,612
|
|
17.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Finance/Restructuring
|
|
$
113,220
|
|
$
26,774
|
|
23.6%
|
|
69%
|
|
$
425
|
|
725
|
|
Forensic and Litigation
Consulting
|
|
81,023
|
|
18,234
|
|
22.5%
|
|
69%
|
|
$
322
|
|
806
|
|
Economic
Consulting
|
|
64,384
|
|
12,799
|
|
19.9%
|
|
80%
|
|
$
472
|
|
297
|
|
Technology
(2)
|
|
47,722
|
|
17,715
|
|
37.1%
|
|
N/M
|
|
N/M
|
|
257
|
|
Strategic
Communications (2)
|
|
49,899
|
|
7,408
|
|
14.8%
|
|
N/M
|
|
N/M
|
|
583
|
|
|
|
$
356,248
|
|
82,930
|
|
23.3%
|
|
N/M
|
|
N/M
|
|
2,668
|
|
Corporate
|
|
|
|
(16,678)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1) (3)
|
|
|
|
$
66,252
|
|
18.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Finance/Restructuring
|
|
$
451,518
|
|
$
108,634
|
|
24.1%
|
|
70%
|
|
$
435
|
|
725
|
|
Forensic and Litigation
Consulting
|
|
324,478
|
|
75,920
|
|
23.4%
|
|
72%
|
|
$
324
|
|
806
|
|
Economic
Consulting
|
|
255,660
|
|
49,481
|
|
19.4%
|
|
79%
|
|
$
472
|
|
297
|
|
Technology
(2)
|
|
176,607
|
|
64,358
|
|
36.4%
|
|
N/M
|
|
N/M
|
|
257
|
|
Strategic
Communications (2)
|
|
193,198
|
|
28,971
|
|
15.0%
|
|
N/M
|
|
N/M
|
|
583
|
|
|
|
$
1,401,461
|
|
327,364
|
|
23.4%
|
|
N/M
|
|
N/M
|
|
2,668
|
|
Corporate
|
|
|
|
(62,597)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1) (3)
|
|
|
|
$
264,767
|
|
18.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) We define Adjusted EBITDA as
consolidated operating income before depreciation, amortization of
intangible assets, and special charges. Amounts presented in
the Adjusted EBITDA column for each segment reflect the segments'
respective Adjusted Segment EBITDA. We define Adjusted
Segment EBITDA as the segments' share of consolidated operating
income before depreciation, amortization of intangible assets, and
special charges. Although Adjusted EBITDA and Adjusted
Segment EBITDA are not measures of financial condition or
performance determined in accordance with generally accepted
accounting principles ("GAAP"), we believe that these measures can
be a useful operating performance measure for evaluating our
results of operations as compared from period to period and as
compared to our competitors. We use Adjusted EBITDA and
Adjusted Segment EBITDA to evaluate and compare the operating
performance of our segments.
Adjusted EBITDA and Adjusted
Segment EBITDA are not defined in the same manner by all companies
and may not be comparable to other similarly titled measures of
other companies unless the definition is the same. These
non-GAAP measures should be considered in addition to, but not as a
substitute for or superior to, the information contained in our
Statements of Income. See also our reconciliation of non-GAAP
financial measures.
(2) The majority of the
Technology and Strategic Communications segments' revenues are not
generated based on billable hours. Accordingly, utilization
and average billable rate metrics are not presented as they are not
meaningful as a segment-wide metric.
(3) These amounts are revised
based upon our completion of a re-examination of our historical
practices regarding our accounting for compensation expense related
to our Senior Managing Director Incentive Compensation Program and
related agreements. In connection with this evaluation, we
concluded that we had reported immaterial errors in prior period
financial statements. Further information related to these
immaterial errors can be found in the Current Report on Form 8-K as
filed by the Company with the Securities and Exchange Commission on
November 2, 2011. This press release should be read in
conjunction with such previously filed Form 8-K.
|
|
|
FTI
CONSULTING, INC.
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
(in
thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
|
2011
|
|
2010
(2)
|
|
2011
|
|
2010
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
39,881
|
|
$
8,855
|
|
$
103,903
|
|
$
65,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add backs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charges, net of
tax
|
|
|
-
|
|
15,553
|
|
9,285
|
|
32,733
|
|
Loss on early extinguishment of
debt, net of tax
|
|
-
|
|
-
|
|
-
|
|
3,019
|
|
Adjusted net income
(1)
|
|
|
$
39,881
|
|
$
24,408
|
|
$
113,188
|
|
$
101,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share -
diluted
|
|
$
0.93
|
|
$
0.19
|
|
$
2.39
|
|
$
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per common
share - diluted (1)
|
|
$
0.93
|
|
$
0.52
|
|
$
2.60
|
|
$
2.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding - diluted
|
|
42,857
|
|
46,972
|
|
43,473
|
|
47,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) We define adjusted net
income and adjusted earnings per diluted share as net income and
earnings per diluted share, respectively, excluding the impact of
the special charges and loss on early extinguishment of debt that
were incurred in that period, and their related income tax
effects.
(2) These amounts are
revised based upon our completion of a re-examination of our
historical practices regarding our accounting for compensation
expense related to our Senior Managing Director Incentive
Compensation Program and related agreements. In connection with
this evaluation, we concluded that we had reported immaterial
errors in prior period financial statements. Further
information related to these immaterial errors can be found in the
Current Report on Form 8-K as filed by the Company with the
Securities and Exchange Commission on November 2, 2011. This
press release should be read in conjunction with such previously
filed Form 8-K.
|
|
|
RECONCILIATION OF OPERATING
INCOME AND NET INCOME TO ADJUSTED EBITDA
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2011
|
|
Corporate
Finance / Restructuring
|
|
Forensic and
Litigation Consulting
|
|
Economic
Consulting
|
|
Technology
|
|
Strategic
Communi- cations
|
|
Corp
HQ
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
39,881
|
|
|
Interest income and
other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(895)
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,495
|
|
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,723
|
|
Operating income
|
|
$
36,153
|
|
$
14,723
|
|
$
15,326
|
|
$
13,891
|
|
$
5,615
|
|
$
(17,504)
|
|
$
68,204
|
|
|
Depreciation and
amortization
|
|
863
|
|
844
|
|
669
|
|
2,761
|
|
754
|
|
1,184
|
|
7,075
|
|
|
Amortization of other intangible
assets
|
|
1,450
|
|
567
|
|
399
|
|
1,997
|
|
1,163
|
|
-
|
|
5,576
|
|
|
Special charges
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adjusted EBITDA
(1)
|
|
$
38,466
|
|
$
16,134
|
|
$
16,394
|
|
$
18,649
|
|
$
7,532
|
|
$
(16,320)
|
|
$
80,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
103,903
|
|
|
Interest income and
other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,304)
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,624
|
|
|
Income tax provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,224
|
|
Operating income
|
|
$
78,923
|
|
$
62,499
|
|
$
60,890
|
|
$
57,917
|
|
$
19,066
|
|
$
(73,848)
|
|
$
205,447
|
|
|
Depreciation and
amortization
|
|
3,480
|
|
3,423
|
|
2,552
|
|
11,168
|
|
2,997
|
|
4,962
|
|
28,582
|
|
|
Amortization of other intangible
assets
|
|
5,795
|
|
2,419
|
|
1,493
|
|
7,926
|
|
4,738
|
|
-
|
|
22,371
|
|
|
Special charges
|
|
9,440
|
|
839
|
|
2,093
|
|
-
|
|
-
|
|
2,840
|
|
15,212
|
|
Adjusted EBITDA
(1)
|
|
$
97,638
|
|
$
69,180
|
|
$
67,028
|
|
$
77,011
|
|
$
26,801
|
|
$
(66,046)
|
|
$
271,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2010 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
8,855
|
|
|
Interest income and
other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
317
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,663
|
|
|
Income tax provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,765
|
|
Operating income
|
|
$
20,364
|
|
$
17,192
|
|
$
12,101
|
|
$
2,025
|
|
$
(2,387)
|
|
$
(17,695)
|
|
$
31,600
|
|
|
Depreciation and
amortization
|
|
940
|
|
853
|
|
549
|
|
2,872
|
|
774
|
|
1,208
|
|
7,196
|
|
|
Amortization of other intangible
assets
|
|
1,593
|
|
723
|
|
296
|
|
1,832
|
|
1,237
|
|
-
|
|
5,681
|
|
|
Special charges
|
|
3,877
|
|
(534)
|
|
(147)
|
|
10,986
|
|
7,784
|
|
(191)
|
|
21,775
|
|
Adjusted EBITDA
(1)
|
|
$
26,774
|
|
$
18,234
|
|
$
12,799
|
|
$
17,715
|
|
$
7,408
|
|
$
(16,678)
|
|
$
66,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2010 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
65,984
|
|
|
Interest income and
other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,423)
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,263
|
|
|
Loss on early extinguishment of
debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,161
|
|
|
Income tax
provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,407
|
|
Operating income
|
|
$
88,499
|
|
$
64,121
|
|
$
39,180
|
|
$
27,569
|
|
$
11,602
|
|
$
(72,579)
|
|
$
158,392
|
|
|
Depreciation and
amortization
|
|
3,736
|
|
3,325
|
|
2,418
|
|
13,397
|
|
3,226
|
|
5,232
|
|
31,334
|
|
|
Amortization of other intangible assets
|
|
6,463
|
|
3,653
|
|
1,216
|
|
7,479
|
|
5,099
|
|
-
|
|
23,910
|
|
|
Special charges
|
|
9,936
|
|
4,821
|
|
6,667
|
|
15,913
|
|
9,044
|
|
4,750
|
|
51,131
|
|
Adjusted EBITDA
(1)
|
|
$
108,634
|
|
$
75,920
|
|
$
49,481
|
|
$
64,358
|
|
$
28,971
|
|
$
(62,597)
|
|
$
264,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) We define Adjusted EBITDA as
consolidated operating income before depreciation, amortization of
intangible assets, and special charges. Amounts presented in
the Adjusted EBITDA column for each segment reflect the segments'
respective Adjusted Segment EBITDA. We define Adjusted
Segment EBITDA as the segments' share of consolidated operating
income before depreciation, amortization of intangible assets, and
special charges. Although Adjusted EBITDA and Adjusted
Segment EBITDA are not measures of financial condition or
performance determined in accordance with generally accepted
accounting principles ("GAAP"), we believe that these measures can
be a useful operating performance measure for evaluating our
results of operations as compared from period to period and as
compared to our competitors. We use Adjusted EBITDA and
Adjusted Segment EBITDA to evaluate and compare the operating
performance of our segments.
Adjusted EBITDA and Adjusted
Segment EBITDA are not defined in the same manner by all companies
and may not be comparable to other similarly titled measures of
other companies unless the definition is the same. These
non-GAAP measures should be considered in addition to, but not as a
substitute for or superior to, the information contained in our
Statements of Income. See also our reconciliation of non-GAAP
financial measures.
(2) These amounts are revised
based upon our completion of a re-examination of our historical
practices regarding our accounting for compensation expense related
to our Senior Managing Director Incentive Compensation Program and
related agreements. In connection with this evaluation, we
concluded that we had reported immaterial errors in prior period
financial statements. Further information related to these
immaterial errors can be found in the Current Report on Form 8-K as
filed by the Company with the Securities and Exchange Commission on
November 2, 2011. This press release should be read in
conjunction with such previously filed Form 8-K.
|
|
|
FTI
CONSULTING, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
FOR THE
YEARS ENDED December 31, 2011 and 2010
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2011
|
|
2010
(1)
|
|
|
|
|
Operating
activities
|
|
|
|
|
Net income
|
$
103,903
|
|
$
65,984
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and
amortization
|
28,582
|
|
31,334
|
|
Amortization and
impairment of other intangible assets
|
22,371
|
|
47,666
|
|
Acquisition-related
contingent consideration
|
(6,465)
|
|
1,190
|
|
Provision for doubtful
accounts
|
12,586
|
|
10,720
|
|
Non-cash share-based
compensation
|
37,352
|
|
35,246
|
|
Excess tax benefits from
share-based compensation
|
(1,597)
|
|
(204)
|
|
Non-cash interest
expense
|
8,439
|
|
12,670
|
|
Other
|
(471)
|
|
482
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
Accounts receivable,
billed and unbilled
|
(94,178)
|
|
(18,881)
|
|
Notes
receivable
|
(3,781)
|
|
(22,159)
|
|
Prepaid expenses and other
assets
|
3,933
|
|
1,136
|
|
Accounts payable, accrued
expenses and other
|
11,472
|
|
18,611
|
|
Income taxes
|
22,227
|
|
8,033
|
|
Accrued
compensation
|
38,073
|
|
9,357
|
|
Billings in excess of
services provided
|
(8,618)
|
|
(6,131)
|
|
Net
cash provided by operating activities
|
173,828
|
|
195,054
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Payments for acquisition
of businesses, net of cash received
|
(62,346)
|
|
(63,086)
|
|
Purchases of property and
equipment
|
(31,091)
|
|
(22,600)
|
|
Proceeds from sale or
maturity of short-term investments
|
-
|
|
15,000
|
|
Other
|
(211)
|
|
(400)
|
|
Net
cash used in investing activities
|
(93,648)
|
|
(71,086)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Borrowings under revolving
line of credit
|
25,000
|
|
20,000
|
|
Payments of revolving line
of credit
|
(25,000)
|
|
(20,000)
|
|
Payments of long-term debt
and capital lease obligations
|
(6,994)
|
|
(209,747)
|
|
Issuance of debt
securities
|
-
|
|
390,445
|
|
Payments of debt financing
fees
|
-
|
|
(3,054)
|
|
Cash received for
settlement of interest rate swaps
|
5,596
|
|
-
|
|
Purchase and retirement of
common stock
|
(209,400)
|
|
(40,634)
|
|
Net issuance of common
stock under equity compensation plans
|
11,109
|
|
6,196
|
|
Excess of tax benefits
from share-based compensation
|
1,597
|
|
204
|
|
Other
|
(637)
|
|
442
|
|
Net
cash (used in) provided by financing activities
|
(198,729)
|
|
143,852
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
(1,598)
|
|
(2,122)
|
|
|
|
|
|
|
Net (decrease) increase in cash
and cash equivalents
|
(120,147)
|
|
265,698
|
|
Cash and cash equivalents,
beginning of period
|
384,570
|
|
118,872
|
|
Cash and cash equivalents, end
of period
|
$
264,423
|
|
$
384,570
|
|
|
|
|
|
(1) These amounts are revised
based upon our completion of a re-examination of our
historical practices regarding our accounting for compensation
expense related to our Senior Managing Director Incentive
Compensation Program and related agreements. In connection
with this evaluation, we concluded that we had reported immaterial
errors in prior period financial statements. Further
information related to these immaterial errors can be found in the
Current Report on Form 8-K as filed by the Company with the
Securities and Exchange Commission on November 2, 2011. This
press release should be read in conjunction with such previously
filed Form 8-K.
|
|
|
FTI
CONSULTING, INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
AS OF
DECEMBER 31, 2011 AND DECEMBER 31, 2010
|
|
(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2011
|
|
2010
(1)
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
$
264,423
|
|
$
384,570
|
|
Restricted cash
|
10,213
|
|
10,518
|
|
Accounts
receivable:
|
|
|
|
|
Billed
receivables
|
335,758
|
|
268,386
|
|
Unbilled
receivables
|
173,440
|
|
120,896
|
|
Allowance
for doubtful accounts and unbilled services
|
(80,096)
|
|
(63,205)
|
|
Accounts receivable,
net
|
429,102
|
|
326,077
|
|
Current portion of notes
receivable
|
26,687
|
|
28,397
|
|
Prepaid expenses and
other current assets
|
30,448
|
|
28,174
|
|
Income taxes
receivable
|
10,081
|
|
13,246
|
|
Total current
assets
|
770,954
|
|
790,982
|
|
|
|
|
|
|
Property and equipment, net of
accumulated depreciation
|
74,448
|
|
73,238
|
|
Goodwill
|
1,309,358
|
|
1,269,447
|
|
Other intangible assets, net of
amortization
|
118,889
|
|
134,970
|
|
Notes receivable, net of current
portion
|
81,748
|
|
76,539
|
|
Other assets
|
55,687
|
|
60,312
|
|
|
|
|
|
|
Total
assets
|
$
2,411,084
|
|
$
2,405,488
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable, accrued
expenses and other
|
$
132,773
|
|
$
105,864
|
|
Accrued
compensation
|
180,366
|
|
143,971
|
|
Current portion of
long-term debt and capital lease obligations
|
153,381
|
|
7,559
|
|
Billings in excess of
services provided
|
19,063
|
|
27,836
|
|
Deferred income
taxes
|
12,254
|
|
1,072
|
|
Total current
liabilities
|
497,837
|
|
286,302
|
|
|
|
|
|
|
Long-term debt and capital lease
obligations, net of current portion
|
643,579
|
|
785,563
|
|
Deferred income taxes
|
88,071
|
|
85,956
|
|
Other liabilities
|
75,395
|
|
80,061
|
|
Total
liabilities
|
1,304,882
|
|
1,237,882
|
|
|
|
|
|
|
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 — 41,484 (2011) and
46,144 (2010)
|
415
|
|
461
|
|
Additional paid-in
capital
|
383,977
|
|
546,336
|
|
Retained
earnings
|
778,202
|
|
674,299
|
|
Accumulated other
comprehensive loss
|
(56,392)
|
|
(53,490)
|
|
Total
stockholders' equity
|
1,106,202
|
|
1,167,606
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
2,411,084
|
|
$
2,405,488
|
|
|
|
|
|
(1) These amounts are revised
based upon our completion of a re-examination of our
historical practices regarding our accounting for compensation
expense related to our Senior Managing Director Incentive
Compensation Program and related agreements. In connection
with this evaluation, we concluded that we had reported immaterial
errors in prior period financial statements. Further
information related to these immaterial errors can be found in the
Current Report on Form 8-K as filed by the Company with the
Securities and Exchange Commission on November 2, 2011. This
press release should be read in conjunction with such previously
filed Form 8-K.
|
|
|
SOURCE FTI Consulting, Inc.