FCN
$143.67
Fti Consulting
$1.10
.77%
Earnings Details
2nd Quarter June 2021
Thursday, July 29, 2021 7:30:00 AM
Tweet Share Watch
Summary

FTI Consulting Revises Guidance with Revenue Above Estimates

Fti Consulting (FCN) reported 2nd Quarter June 2021 earnings of $1.74 per share on revenue of $711.5 million. The consensus earnings estimate was $1.44 per share on revenue of $642.7 million. Revenue grew 17.0% on a year-over-year basis.

The company said it expects 2021 non-GAAP earnings of $6.00 to $6.50 per share on revenue of $2.70 billion to $2.80 billion. The company's previous guidance was earnings of $5.80 to $6.50 per share on revenue of $2.575 billion to $2.70 billion and the current consensus earnings estimate is $6.41 per share on revenue of $2.65 billion for the year ending December 31, 2021.

FTI Consulting Inc along with its subsidiaries is a business advisory firm. The Company provides services including Corporate Finance/Restructuring, Forensic and Litigation Consulting, Economic Consulting, Technology and Strategic Communications.

Results
Reported Earnings
$1.74
Earnings Whisper
-
Consensus Estimate
$1.44
Reported Revenue
$711.5 Mil
Revenue Estimate
$642.7 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

FTI Consulting Reports Second Quarter 2021 Financial Results

  • Second Quarter 2021 Revenues of $711.5 Million, Up 17.0% Compared to $607.9 Million in Prior Year Quarter
  • Second Quarter 2021 EPS of $1.77, Up 39.4% Compared to $1.27 in Prior Year Quarter; Second Quarter 2021 Adjusted EPS of $1.74, Up 31.8% Compared to $1.32 in Prior Year Quarter
  • Company Raises Full Year 2021 Guidance Ranges for Revenues and EPS and Raises Lower End of Guidance Range for Full Year 2021 Adjusted EPS

WASHINGTON, July 29, 2021 (GLOBE NEWSWIRE) --  FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended June 30, 2021.

Second quarter 2021 revenues of $711.5 million increased $103.6 million, or 17.0%, compared to revenues of $607.9 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation ("FX"), revenues increased $78.9 million, or 13.0%, compared to the prior year quarter. Acquisition-related revenues contributed $19.1 million in the quarter. Excluding the estimated positive impact of FX and acquisition-related revenues, revenues increased $59.8 million, or 9.8%, compared to the prior year quarter, primarily due to higher demand in the Forensic and Litigation Consulting, Technology and Economic Consulting segments. Net income of $62.8 million compared to $48.2 million in the prior year quarter. The increase in net income was primarily due to higher operating profits in the Forensic and Litigation Consulting, Technology and Economic Consulting segments, which was partially offset by lower operating profits in the Corporate Finance & Restructuring segment compared to the prior year quarter.

Adjusted EBITDA of $92.3 million, or 13.0% of revenues, compared to $75.8 million, or 12.5% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to a 10.1% increase in billable headcount and higher variable compensation, as well as an increase in selling, general and administrative ("SG&A") expenses compared to the prior year quarter.

Second quarter 2021 diluted earnings per share ("EPS") of $1.77 compared to $1.27 in the prior year quarter. Second quarter 2021 EPS included a $3.1 million fair value remeasurement of acquisition-related contingent consideration, which increased EPS by $0.09 and $2.4 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 $0.06. Second quarter 2021 Adjusted EPS of $1.74, which excludes the fair value remeasurement and non-cash interest expense, compared to Adjusted EPS of $1.32 in the prior year quarter.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our continued strong results reflect our multi-year commitment to attract, develop and support the best professionals and thereby invest behind our leading positions and emerging adjacencies. That powerful trajectory leaves me ever more convinced of our ability going forward to help our clients with an ever-increasing share of their most significant challenges and opportunities.”

Cash Position and Capital Allocation
Net cash provided by operating activities of $125.6 million for the quarter ended June 30, 2021 compared to $153.0 million for the quarter ended June 30, 2020. The year-over-year decrease in net cash provided by operating activities was largely due to an increase in salaries, primarily related to headcount growth, which was partially offset by an increase in cash collected compared to the prior year quarter.

Cash and cash equivalents of $256.9 million at June 30, 2021 compared to $304.2 million at June 30, 2020 and $233.4 million at March 31, 2021. Total debt, net of cash, of $159.4 million at June 30, 2021 compared to $47.0 million at June 30, 2020 and $252.8 million at March 31, 2021. The sequential decrease in total debt, net of cash, was primarily due to repayment of borrowings under the Company’s senior secured bank revolving credit facility.

There were no share repurchases during the quarter ended June 30, 2021. As of June 30, 2021, approximately $167.1 million remained available for common stock repurchases under the Company’s stock repurchase authorization.

Second Quarter 2021 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment decreased $15.0 million, or 6.1%, to $231.0 million in the quarter, compared to $246.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues decreased $24.9 million, or 10.1%, compared to the prior year quarter. Acquisition-related revenues contributed $17.0 million in the quarter. Excluding the estimated positive impact from FX and acquisition-related revenues, revenues decreased $41.9 million, or 17.0%, due to lower demand for restructuring services, which was partially offset by higher demand for transactions and business transformation services compared to the prior year quarter. Adjusted Segment EBITDA of $40.2 million, or 17.4% of segment revenues, compared to $76.3 million, or 31.0% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was due to lower revenues and higher compensation, primarily related to a 19.8% increase in billable headcount compared to the prior year quarter.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $44.4 million, or 41.7%, to $150.7 million in the quarter, compared to $106.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $41.3 million, or 38.8%. Acquisition-related revenues contributed $2.1 million in the quarter. Excluding the estimated positive impact from FX and acquisition-related revenues, revenues increased $39.2 million, or 36.9%, primarily due to higher demand for investigations and disputes services. Adjusted Segment EBITDA of $18.0 million, or 11.9% of segment revenues, compared to a loss of $9.0 million 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 variable compensation and a 5.5% increase in billable headcount compared to the prior year quarter.

Economic Consulting
Revenues in the Economic Consulting segment increased $31.8 million, or 21.0%, to $183.3 million in the quarter, compared to $151.5 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $25.3 million, or 16.7%, primarily due to higher demand for non-merger and acquisition ("M&A")-related antitrust and financial economics services, which was partially offset by lower realized rates and demand for M&A-related antitrust services compared to the prior year quarter. Adjusted Segment EBITDA of $30.7 million, or 16.7% of segment revenues, compared to $21.7 million, or 14.3% 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 related to an increase in variable compensation and a 9.1% increase in billable headcount compared to the prior year quarter.

Technology
Revenues in the Technology segment increased $31.6 million, or 67.0%, to $78.6 million in the quarter, compared to $47.1 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $29.9 million, or 63.4%, primarily due to higher demand for cross-border investigations, litigation and M&A-related “second request” services compared to the prior year quarter. Adjusted Segment EBITDA of $18.5 million, or 23.5% of segment revenues, compared to $6.4 million, or 13.7% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses compared to the prior year quarter.

Strategic Communications
Revenues in the Strategic Communications segment increased $10.9 million, or 19.2%, to $67.8 million in the quarter, compared to $56.9 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $7.3 million, or 12.9%, primarily due to higher demand for corporate reputation and public affairs services compared to the prior year quarter. Adjusted Segment EBITDA of $13.5 million, or 19.9% of segment revenues, compared to $10.0 million, or 17.6% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses compared to the prior year quarter.

2021 Guidance
After a record first half of 2021, the Company is raising its full year 2021 guidance ranges for revenues and EPS, and raising the lower end of its Adjusted EPS guidance range for full year 2021. The Company now estimates that revenues will range between $2.700 billion and $2.800 billion. This compares to the previous range of between $2.575 billion and $2.700 billion. The Company now estimates that EPS will range between $5.89 and $6.39. This compares to the previous range of between $5.60 and $6.30. The Company now estimates that Adjusted EPS will range between $6.00 and $6.50. This compares to the previous range of between $5.80 and $6.50. The $0.11 per share variance between EPS and Adjusted EPS guidance for full year 2021 includes estimated non-cash interest expense of $0.20 per share related to the Company's 2023 Convertible Notes and the second quarter 2021 $0.09 per share gain related to the fair value remeasurement of acquisition-related contingent consideration.

Second Quarter 2021 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2021 financial results at 9:00 a.m. Eastern Time on Thursday, July 29, 2021. 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 6,400 employees located in 29 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 $2.46 billion in revenues during fiscal year 2020. More information can be found at www.fticonsulting.com.

Non-GAAP Financial Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Certain of these financial measures are considered not in conformity with GAAP ("non-GAAP financial measures") under the United States Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial 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 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 EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS"), which are non-GAAP financial measures, as net income and EPS, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these 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, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer; the mix of the geographic locations where our clients are located or where services are performed; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of the COVID-19 pandemic and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading "Item 1A, Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC, 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)

 June 30, December 31,
 2021 2020
 (Unaudited)  
Assets   
Current assets   
Cash and cash equivalents$256,875   $294,953  
Accounts receivable, net846,121   711,357  
Current portion of notes receivable32,093   35,253  
Prepaid expenses and other current assets78,373   88,144  
Total current assets1,213,462   1,129,707  
Property and equipment, net117,477   101,642  
Operating lease assets223,618   156,645  
Goodwill1,240,057   1,234,879  
Intangible assets, net37,653   41,550  
Notes receivable, net55,675   61,121  
Other assets50,485   51,819  
Total assets$2,938,427   $2,777,363  
Liabilities and Stockholders' Equity   
Current liabilities   
Accounts payable, accrued expenses and other$156,736   $170,066  
Accrued compensation368,882   455,933  
Billings in excess of services provided36,944   44,172  
Total current liabilities562,562   670,171  
Long-term debt, net391,581   286,131  
Noncurrent operating lease liabilities230,133   161,677  
Deferred income taxes169,009   158,342  
Other liabilities95,932   100,861  
Total liabilities1,449,217   1,377,182  
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 — 34,282 (2021) and 34,481 (2020)343   345  
Additional paid-in capital4,270     
Retained earnings1,590,467   1,506,271  
Accumulated other comprehensive loss(105,870)  (106,435) 
Total stockholders' equity1,489,210   1,400,181  
Total liabilities and stockholders' equity$2,938,427   $2,777,363  


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

 Three Months Ended
June 30,
  
 2021 2020
 (Unaudited)
Revenues$711,486   $607,852  
Operating expenses   
Direct cost of revenues490,722   413,011  
Selling, general and administrative expenses133,930   126,928  
Amortization of intangible assets2,854   2,314  
 627,506   542,253  
Operating income83,980   65,599  
Other income (expense)   
Interest income and other(912)  2,202  
Interest expense(5,294)  (5,157) 
 (6,206)  (2,955) 
Income before income tax provision77,774   62,644  
Income tax provision14,992   14,470  
Net income$62,782   $48,174  
Earnings per common share ? basic$1.88   $1.33  
Weighted average common shares outstanding ? basic33,458   36,169  
Earnings per common share ? diluted$1.77   $1.27  
Weighted average common shares outstanding ? diluted35,374   37,852  
Other comprehensive income, net of tax   
Foreign currency translation adjustments, net of tax expense of $0$5,807   $9,568  
Total other comprehensive income, net of tax5,807   9,568  
Comprehensive income$68,589   $57,742  


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

 Six Months Ended
June 30,
    
 2021 2020
 (Unaudited)
Revenues$1,397,763   $1,212,445   
Operating expenses   
Direct cost of revenues959,146   815,258  
Selling, general and administrative expenses260,476   253,887  
Amortization of intangible assets5,655   4,645  
 1,225,277   1,073,790  
Operating income172,486   138,655  
Other income (expense)   
Interest income and other122   7,219  
Interest expense(10,091)  (10,018) 
 (9,969)  (2,799) 
Income before income tax provision162,517   135,856  
Income tax provision35,239   30,935  
Net income$127,278   $104,921  
Earnings per common share ? basic$3.80   $2.89  
Weighted average common shares outstanding ? basic33,470   36,292  
Earnings per common share ? diluted$3.61   $2.76  
Weighted average common shares outstanding ? diluted35,218   38,021  
Other comprehensive income (loss), net of tax   
Foreign currency translation adjustments, net of tax expense of $0$565   $(21,534) 
Total other comprehensive income (loss), net of tax565   (21,534) 
Comprehensive income$127,843   $83,387  


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

  Three Months Ended
June 30,
 Six Months Ended
June 30,
  2021 2020 2021 2020
  (Unaudited) (Unaudited)
Net income $62,782   $48,174   $127,278   $104,921  
Add back:        
Remeasurement of acquisition-related contingent
consideration
 (3,130)     (3,130)    
Non-cash interest expense on convertible notes 2,380   2,255   4,728   4,480  
Tax impact of non-cash interest expense on
convertible notes
 (619)  (586)  (1,229)  (1,165) 
Adjusted Net Income $61,413   $49,843   $127,647   $108,236  
Earnings per common share — diluted $1.77   $1.27   $3.61   $2.76  
Add back:        
Remeasurement of acquisition-related contingent consideration (0.09)     (0.09)    
Non-cash interest expense on convertible notes 0.07   0.06   0.13   0.12  
Tax impact of non-cash interest expense on convertible notes (0.01)  (0.01)  (0.03)  (0.03) 
Adjusted earnings per common share — diluted $1.74   $1.32   $3.62   $2.85  
Weighted average number of common shares outstanding ? diluted 35,374   37,852   35,218   38,021  


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

  Year Ended December 31, 2021
  Low High
Guidance on estimated earnings per common share diluted (GAAP) (1) $5.89   $6.39  
Remeasurement of acquisition-related contingent consideration (0.09)  (0.09) 
Non-cash interest expense on convertible notes, net of tax 0.20   0.20  
Guidance on estimated adjusted earnings per common share (non-GAAP) (1) $6.00   $6.50  

_________________
(1) The forward-looking guidance on estimated 2021 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 June 30, 2021
(Unaudited)
 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology  Strategic Communications Unallocated Corporate Total
Net income             $62,782  
Interest income and other             912  
Interest expense             5,294  
Income tax provision             14,992  
Operating income  $40,103   $16,492  $29,204  $15,340  $12,198  $(29,357)  $83,980  
Depreciation and amortization 1,317   1,286  1,495  3,178  558  770   8,604  
Amortization of intangible assets 1,884   224      745  1   2,854  
Remeasurement of acquisition-related contingent consideration (3,130)             (3,130) 
Adjusted EBITDA $40,174   $18,002  $30,699  $18,518  $13,501  $(28,586)  $92,308  
               
Six Months Ended June 30, 2021
(Unaudited)
 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology  Strategic Communications Unallocated Corporate Total
Net income              $127,278  
Interest income and other             (122) 
Interest expense             10,091  
Income tax provision             35,239  
Operating income  $74,402   $44,498  $54,436  $33,899  $21,318  $(56,067)  $172,486  
Depreciation and amortization 2,570   2,538  2,842  6,217  1,097  1,501   16,765  
Amortization of intangible assets 3,771   398      1,484  2   5,655  
Remeasurement of acquisition-related contingent consideration (3,130)             (3,130) 
Adjusted EBITDA  $77,613   $47,434  $57,278  $40,116  $23,899  $(54,564)  $191,776  


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

Three Months Ended June 30, 2020
(Unaudited)
 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
Net income             $48,174  
Interest income and other             (2,202) 
Interest expense             5,157  
Income tax provision             14,470  
Operating income (loss) $73,811  $(10,382)  $20,216  $3,432  $8,798  $(30,276)  $65,599  
Depreciation and amortization 1,038  1,165   1,433  3,003  552  693   7,884  
Amortization of intangible assets 1,415  170   45    684     2,314  
Adjusted EBITDA $76,264  $(9,047)  $21,694  $6,435  $10,034  $(29,583)  $75,797  
               
Six Months Ended June 30, 2020
(Unaudited)
 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
Net income             $104,921  
Interest income and other             (7,219) 
Interest expense             10,018  
Income tax provision             30,935  
Operating income $120,475  $9,124   $31,612  $15,021  $16,290  $(53,867)  $138,655  
Depreciation and amortization 2,017  2,581   2,703  5,898  1,138  1,370   15,707  
Amortization of intangible assets 2,718  456   89    1,382     4,645  
Adjusted EBITDA $125,210  $12,161   $34,404  $20,919  $18,810  $(52,497)  $159,007  


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 June 30, 2021
(Unaudited)
            
Corporate Finance & Restructuring$230,971  $40,174   17.4% 59% $456  1,632  
Forensic and Litigation Consulting150,746  18,002   11.9% 60% $344  1,399  
Economic Consulting183,306  30,699   16.7% 75% $524  884  
Technology (1)78,646  18,518   23.5% N/M N/M 429  
Strategic Communications (1)67,817  13,501   19.9% N/M N/M 771  
 $711,486  $120,894   17.0%     5,115  
Unallocated Corporate  (28,586)         
Adjusted EBITDA   $92,308   13.0%      
             
Six Months Ended June 30, 2021
(Unaudited)
            
Corporate Finance & Restructuring$457,174  $77,613   17.0% 59% $456  1,632  
Forensic and Litigation Consulting301,567  47,434   15.7% 60% $350  1,399  
Economic Consulting352,579  57,278   16.2% 75% $504  884  
Technology (1)158,105  40,116   25.4% N/M N/M 429  
Strategic Communications (1)128,338  23,899   18.6% N/M N/M 771  
 $1,397,763  $246,340   17.6%     5,115  
Unallocated Corporate  (54,564)          
Adjusted EBITDA   $191,776   13.7%      
             
Three Months Ended June 30, 2020
(Unaudited)
            
Corporate Finance & Restructuring$246,011  $76,264   31.0% 71% $494  1,362  
Forensic and Litigation Consulting106,381  (9,047)  (8.5)% 46% $327  1,326  
Economic Consulting151,493  21,694   14.3% 73% $508  810  
Technology (1)47,084  6,435   13.7% N/M N/M 386  
Strategic Communications (1)56,883  10,034   17.6% N/M N/M 761  
 $607,852  $105,380   17.3%     4,645  
Unallocated Corporate  (29,583)          
Adjusted EBITDA   $75,797   12.5%      
             
Six Months Ended June 30, 2020
(Unaudited)
            
Corporate Finance & Restructuring$453,760  $125,210   27.6% 70% $473  1,362  
Forensic and Litigation Consulting253,978  12,161   4.8% 52% $332  1,326  
Economic Consulting283,631  34,404   12.1% 70% $478  810  
Technology (1)105,807  20,919   19.8% N/M N/M 386  
Strategic Communications (1)115,269  18,810   16.3% N/M N/M 761  
 $1,212,445  $211,504   17.4%     4,645  
Unallocated Corporate  (52,497)          
Adjusted EBITDA   $159,007   13.1%      
            

___________________
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)

 Six Months Ended
June 30,
 2021 2020
 (Unaudited)
Operating activities   
Net income$127,278   $104,921  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:   
Depreciation and amortization16,765   15,707  
Amortization and impairment of intangible assets5,655   4,645  
Acquisition-related contingent consideration(1,130)  1,120  
Provision for expected credit losses8,236   11,624  
Share-based compensation12,190   12,147  
Amortization of debt discount and issuance costs and other5,685   6,000  
Deferred income taxes9,802   4,128  
Changes in operating assets and liabilities, net of effects from acquisitions:   
Accounts receivable, billed and unbilled(138,838)  (42,804) 
Notes receivable8,921   5,993  
Prepaid expenses and other assets6,728   8,979  
Accounts payable, accrued expenses and other(13,518)  2,230  
Income taxes6,695   (2,344) 
Accrued compensation(88,024)  (107,217) 
Billings in excess of services provided(7,471)  4,285  
Net cash provided by (used in) operating activities(41,026)  29,414  
Investing activities   
Payments for acquisition of businesses, net of cash received(9,833)    
Purchases of property and equipment and other(27,696)  (13,885) 
Net cash used in investing activities(37,529)  (13,885) 
Financing activities   
Borrowings under revolving line of credit292,500   90,000  
Repayments under revolving line of credit(192,500)  (55,000) 
Purchase and retirement of common stock(46,133)  (99,678) 
Share-based compensation tax withholdings and other(7,475)  (6,523) 
Payments for business acquisition liabilities(7,496)  (3,948) 
Deposits602   5,098  
Net cash provided by (used in) financing activities39,498   (70,051) 
Effect of exchange rate changes on cash and cash equivalents979   (10,645) 
Net decrease in cash and cash equivalents(38,078)  (65,167) 
Cash and cash equivalents, beginning of period294,953   369,373  
Cash and cash equivalents, end of period$256,875   $304,206  


FTI CONSULTING, INC.
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)

 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2021 2020 2021 2020
Net cash provided by (used in) operating activities$125,558   $152,976   $(41,026)  $29,414  
Purchases of property and equipment(19,724)  (5,663)  (27,725)  (13,899) 
Free Cash Flow$105,834   $147,313   $(68,751)  $15,515  


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

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


Primary Logo

Source: FTI Consulting, Inc.