- Fourth Quarter Revenues of $425.2 Million; Full Year Revenues
of $1.76 Billion
- Fourth Quarter Adjusted EPS of $0.04; Full Year Adjusted EPS of
$1.64
- Full Year 2015 Adjusted EPS Guidance Range Between $1.95 and
$2.20
FTI Consulting, Inc. (NYSE:FCN) (the "Company"), the global
business advisory firm dedicated to helping organizations protect
and enhance their enterprise value, today released its financial
results for the fourth quarter and full year ended December 31,
2014.
For the quarter, revenues increased 2.2 percent to $425.2
million compared to $416.0 million in the prior year quarter. Fully
diluted earnings per share ("EPS") were $0.02 compared to fully
diluted loss per share of ($0.18) in the prior year quarter. Fourth
quarter EPS included a non-cash income tax reserve on a deferred
tax asset of $4.6 million related to the deductibility of future
net operating losses in the Company's Australian business and a
special charge of $1.6 million related to the departure of an
executive, which reduced EPS by $0.11 and $0.02, respectively.
Fourth quarter 2013 EPS included $27.6 million of termination
expenses related to the departure of former senior executives,
which reduced EPS by $0.41. Adjusted fully diluted earnings per
share ("Adjusted EPS") were $0.04 and Adjusted EBITDA was $36.1
million, or 8.5 percent of revenues, compared to Adjusted EPS of
$0.39 and Adjusted EBITDA of $47.7 million, or 11.5 percent of
revenues, in the prior year quarter.
For the full year, revenues increased 6.3 percent to $1.76
billion compared to $1.65 billion in the prior year. EPS were $1.44
and included $16.3 million of special charges compared to the prior
year fully diluted loss per share of ($0.27), which included a
goodwill impairment charge and special charges of $83.8 million and
$38.4 million, respectively. Full year Adjusted EPS were $1.64 and
Adjusted EBITDA was $210.6 million, or 12.0 percent of revenues,
compared to Adjusted EPS of $2.09 and Adjusted EBITDA of $245.6
million, or 14.9 percent of revenues, in the prior year.
Adjusted EPS, Adjusted EBITDA and Adjusted Segment EBITDA are
non-GAAP measures defined elsewhere in this press release and are
reconciled to GAAP measures in the financial tables that accompany
this press release.
Commenting on these results, Steven H. Gunby, President and
Chief Executive Officer of FTI Consulting, said, "Notwithstanding
our disappointment in the fourth quarter, we are making solid
progress towards getting to where we need to be to meet the 2015
and 2016 targets we have outlined. There is a lot of work ahead of
us, both at the corporate level and in each of our businesses, but
the progress we have made reinforces my enthusiasm about where we
can take the business in 2015 and beyond."
Cash and Capital Allocation
Net cash provided by operating activities for the full year 2014
was $135.4 million compared to $193.3 million in the prior year.
Cash and cash equivalents were $283.7 million at December 31, 2014.
In 2014, the Company spent $23.5 million on acquisitions.
Fourth Quarter Segment Results
Corporate Finance/Restructuring
Revenues in the Corporate Finance/Restructuring segment
increased 0.3 percent to $93.1 million in the quarter compared to
$92.8 million in the prior year quarter. Growth in non-distressed
engagements in North America and transaction advisory and tax
practices in the Europe, Middle East and Africa ("EMEA") region,
was partially offset by declines in the Asia Pacific and North
America bankruptcy and restructuring practices. Adjusted Segment
EBITDA was $9.9 million, or 10.6 percent of segment revenues,
compared to $10.9 million, or 11.7 percent of segment revenues, in
the prior year quarter. Adjusted Segment EBITDA margin was impacted
unfavorably by a decline in higher margin global bankruptcy and
restructuring activity, lower bill rates in the segment's North
America and EMEA regions and higher severance costs.
Economic Consulting
Revenues in the Economic Consulting segment declined 1.5 percent
to $106.5 million in the quarter compared to $108.1 million in the
prior year quarter. Revenues declined organically by 2.5 percent
due to a negative impact of 1.0 percent from foreign currency
translation ("FX") and lower demand for the segment's antitrust
practice compared to strong performance in the prior year quarter.
Adjusted Segment EBITDA was $9.8 million, or 9.2 percent of segment
revenues, compared to $22.0 million, or 20.3 percent of segment
revenues, in the prior year quarter. Adjusted Segment EBITDA margin
was impacted unfavorably by increased compensation expense related
to extensions of employment contracts entered into with certain key
senior client-service professionals, a significant increase in
state income tax equalization obligation and increased bad debt
expense.
Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment
increased 5.6 percent to $121.1 million in the quarter compared to
$114.7 million in the prior year quarter. Revenues grew organically
by 2.8 percent due to higher demand in the segment's North America
and EMEA investigations and North America and Latin America
construction solutions practices, which was partially offset by
lower success fees and lower demand in the health solutions
practice. Adjusted Segment EBITDA was $19.4 million, or 16.1
percent of segment revenues, compared to $17.6 million, or 15.3
percent of segment revenues, in the prior year quarter. The
increase in Adjusted Segment EBITDA margin was due to strong
utilization in the global investigations practice and lower bonus
expense compared to the prior year quarter, which was partially
offset by lower utilization and success fees in the health
solutions practice.
Technology
Revenues in the Technology segment increased 8.6 percent to
$58.2 million in the quarter compared to $53.6 million in the prior
year quarter. The increase in revenues was due to higher services
revenue primarily related to complex global investigations.
Adjusted Segment EBITDA was $13.3 million, or 22.8 percent of
segment revenues, compared to $14.7 million, or 27.4 percent of
segment revenues, in the prior year quarter. The decrease in
Adjusted Segment EBITDA margin was due to an increase in the mix of
lower margin services, higher research and development expenses and
corporate allocations in support of operations.
Strategic Communications
Revenues in the Strategic Communications segment decreased 1.2
percent to $46.3 million in the quarter compared to $46.9 million
in the prior year quarter, which included a 2.9 percent unfavorable
impact from FX. Excluding FX, revenues increased 1.7 percent due to
a project-related success fee. Adjusted Segment EBITDA was $7.4
million, or 16.0 percent of segment revenues, compared to $5.9
million, or 12.6 percent of segment revenues, in the prior year
quarter. Adjusted Segment EBITDA margin was positively impacted by
higher project income and reduced billable headcount resulting from
cost savings activities initiated in 2014.
2015 Guidance
The Company estimates that revenues for 2015 will be between
$1.80 billion and $1.90 billion and Adjusted EPS will be between
$1.95 and $2.20. This guidance assumes no acquisitions.
Fourth Quarter and Full Year 2014 Conference
Call
FTI Consulting will host a conference call for analysts and
investors to discuss fourth quarter and full year financial results
at 9:00 a.m. Eastern Time on February 19, 2014. The call can be
accessed live and will be available for replay over the Internet
for 90 days by logging onto the Company's website at
www.fticonsulting.com.
The Company has posted updated Historical Financial and
Operating Data reflecting fourth quarter 2014 and full year 2014
financial results on the investor relations section of its website
at www.fticonsulting.com.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm
dedicated to helping organizations protect and enhance enterprise
value in an increasingly complex legal, regulatory and economic
environment. With more than 4,400 employees located in 26
countries, FTI Consulting professionals work closely with clients
to anticipate, illuminate and overcome complex business challenges
in areas such as investigations, litigation, mergers and
acquisitions, regulatory issues, reputation management, strategic
communications and restructuring. The company generated $1.76
billion in revenues during fiscal year 2014. More information can
be found at www.fticonsulting.com.
Use of Non-GAAP Measures
Note: We define Segment Operating Income (loss) as a segment's
share of consolidated operating income (loss). We define Total
Segment Operating Income (loss) as the total of Segment Operating
Income (loss) for all segments, which excludes unallocated
corporate expenses. We use Segment Operating Income for the purpose
of calculating Adjusted Segment EBITDA. We define Adjusted EBITDA
as consolidated net income (loss) before income tax provision,
other non-operating income (expense), depreciation, amortization of
intangible assets, remeasurement of acquisition-related contingent
consideration, special charges, goodwill impairment charges and
loss on early extinguishment of debt. 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 define Total Adjusted Segment
EBITDA as the total of Adjusted Segment EBITDA for all segments,
which excludes unallocated corporate expenses. We define Adjusted
Segment EBITDA margin as Adjusted Segment EBITDA as a percentage of
a segment's share of revenue. We use Adjusted Segment EBITDA to
internally evaluate the financial performance of our segments
because we believe it is a useful supplemental measure which
reflects current core operating performance and provides an
indicator of the segment's ability to generate cash. We also
believe that these measures, when considered together with our GAAP
financial results, provide management and investors with a more
complete understanding of our operating results, including
underlying trends, by excluding the effects of remeasurement of
acquisition-related contingent consideration, special charges and
goodwill impairment charges. In addition, EBITDA 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
measures, considered along with corresponding GAAP measures,
provide management and investors with additional information for
comparison of our operating results to the operating results of
other companies.
We define Adjusted Net Income and Adjusted Earnings per Diluted
Share ("Adjusted EPS") as net income (loss) and earnings per
diluted share, respectively, excluding the impact of remeasurement
of acquisition-related contingent consideration, special charges,
goodwill impairment charges and losses on early extinguishment of
debt. We use Adjusted Net Income for the purpose of calculating
Adjusted EPS. Management uses Adjusted EPS to assess total Company
operating performance on a consistent basis. We believe that this
measure, when considered together with our GAAP financial results,
provides management and investors with a more complete
understanding of our business operating results, including
underlying trends, by excluding the effects of remeasurement of
acquisition-related contingent consideration, special charges,
goodwill impairment charges and losses on early extinguishment of
debt. Non-GAAP financial measures are not defined in the same
manner by all companies and may not be comparable to other
similarly titled measures of other companies. Non-GAAP financial
measures should be considered in addition to, but not as a
substitute for or superior to, the information contained in our
Consolidated Statements of Comprehensive Income. Reconciliations of
GAAP to non-GAAP financial measures are included elsewhere in this
press release.
Safe Harbor Statement
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which involve uncertainties and risks. Forward-looking
statements include statements concerning our plans, objectives,
goals, strategies, future events, future revenues, future results
and performance, expectations, plans or intentions relating to
acquisitions and other matters, business trends and other
information that is not historical, including statements regarding
estimates of our future financial results. When used in this press
release, words such as "estimates," "expects," "anticipates,"
"projects," "plans," "intends," "believes," "forecasts" and
variations of such words or similar expressions are intended to
identify forward-looking statements. All forward-looking
statements, including, without limitation, estimates of our future
financial results, are based upon our expectations at the time we
make them and various assumptions. Our expectations, beliefs and
projections are expressed in good faith, and we believe there is a
reasonable basis for them. However, there can be no assurance that
management's expectations, beliefs and estimates will be achieved,
and the Company's actual results may differ materially from our
expectations, beliefs and estimates. Further, preliminary results
are subject to normal year-end adjustments. The Company has
experienced fluctuating revenues, operating income and cash flow in
prior periods and expects that this will occur from time to time in
the future. Other factors that could cause such differences include
declines in demand for, or changes in, the mix of services and
products that we offer, the mix of the geographic locations where
our clients are located or where services are performed, adverse
financial, real estate or other market and general economic
conditions, which could impact each of our segments differently,
the pace and timing of the consummation and integration of past and
future acquisitions, the Company's ability to realize cost savings
and efficiencies, competitive and general economic conditions,
retention of staff and clients and other risks described under the
heading "Item 1A Risk Factors" in the Company's most recent Form
10-K filed with the SEC and in the Company's other filings with the
SEC, including the risks set forth under "Risks Related to Our
Reportable-Segments" and "Risks Related to Our Operations". We are
under no duty to update any of the forward looking statements to
conform such statements to actual results or events and do not
intend to do so.
|
|
|
FTI CONSULTING,
INC. |
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME (LOSS) |
FOR THE YEAR ENDED
DECEMBER 31, 2014 AND 2013 |
(in thousands,
except per share data) |
|
|
|
|
Year
Ended |
|
December
31, |
|
2014 |
2013 |
Revenues |
$ 1,756,212 |
$ 1,652,432 |
|
|
|
Operating expenses |
|
|
Direct cost of revenues |
1,144,757 |
1,042,061 |
Selling, general and
administrative expense |
433,845 |
394,681 |
Special charges |
16,339 |
38,414 |
Acquisition-related contingent
consideration |
(1,676) |
(10,869) |
Amortization of other
intangible assets |
15,521 |
22,954 |
Goodwill impairment charge |
-- |
83,752 |
|
1,608,786 |
1,570,993 |
Operating income |
147,426 |
81,439 |
|
|
|
Other income
(expense) |
|
Interest income and other |
4,670 |
1,748 |
Interest expense |
(50,685) |
(51,376) |
|
(46,015) |
(49,628) |
Income before income tax
provision |
101,411 |
31,811 |
Income tax provision |
42,604 |
42,405 |
Net income (loss) |
$ 58,807 |
$ (10,594) |
Earnings (loss) per common share -
basic |
$ 1.48 |
$ (0.27) |
Weighted average common shares
outstanding - basic |
39,726 |
39,188 |
Earnings (loss) per common share -
diluted |
$ 1.44 |
$ (0.27) |
Weighted average common shares
outstanding - diluted |
40,729 |
39,188 |
|
|
|
Other comprehensive loss,
net of tax: |
|
Foreign currency translation
adjustments, including tax expense, net of tax $0 |
$ (29,179) |
$ (9,720) |
Other comprehensive loss, net of
tax |
(29,179) |
(9,720) |
Comprehensive income
(loss) |
$ 29,628 |
$ (20,314) |
|
|
|
FTI CONSULTING,
INC. |
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS |
FOR THE THREE MONTHS
ENDED DECEMBER 31, 2014 AND 2013 |
(in
thousands, except per share data) |
|
|
|
|
Three Months
Ended |
|
December
31, |
|
2014 |
2013 |
|
|
|
Revenues |
$ 425,158 |
$ 415,998 |
Operating expenses |
|
|
Direct cost of revenues |
281,689 |
268,901 |
Selling, general and
administrative expense |
115,965 |
107,196 |
Special charges |
1,628 |
27,568 |
Acquisition-related contingent
consideration |
(85) |
(4,778) |
Amortization of other
intangible assets |
4,055 |
5,661 |
|
403,252 |
404,548 |
Operating income |
21,906 |
11,450 |
Other income (expense) |
|
|
Interest income and other |
1,205 |
46 |
Interest expense |
(12,488) |
(12,776) |
|
(11,283) |
(12,730) |
|
|
|
Income (loss) before income tax
provision |
10,623 |
(1,280) |
Income tax provision |
9,702 |
5,859 |
Net income (loss) |
$ 921 |
$ (7,139) |
Earnings (loss) per common share -
basic |
$ 0.02 |
$ (0.18) |
Weighted average common shares
outstanding - basic |
39,991 |
39,115 |
|
|
|
Earnings (loss) per common share -
diluted |
$ 0.02 |
$ (0.18) |
Weighted average common shares
outstanding - diluted |
41,090 |
39,115 |
|
|
|
Other comprehensive income (loss),
net of tax: |
|
|
Foreign currency translation
adjustments, net of tax $0 |
$ (19,059) |
$ 388 |
Other comprehensive income (loss),
net of tax |
(19,059) |
388 |
Comprehensive loss |
$ (18,138) |
$ (6,751) |
|
|
|
|
|
|
|
FTI CONSULTING,
INC. |
OPERATING RESULTS BY
BUSINESS SEGMENT |
FOR THE THREE
MONTHS AND YEAR ENDED DECEMBER 31, 2014 AND 2013 |
|
|
|
|
|
Average |
Revenue-- |
|
Segment |
Adjusted |
Adjusted EBITDA |
|
Billable |
Generating |
|
Revenues |
EBITDA |
Margin |
Utilization |
Rate |
Headcount |
|
(in
thousands) |
|
|
|
(at period end) |
|
Three Months Ended December 31,
2014 |
|
|
|
|
|
|
Corporate
Finance/Restructuring |
$ 93,072 |
$ 9,874 |
10.6% |
61% |
$ 368 |
706 |
Forensic and Litigation
Consulting |
121,138 |
19,443 |
16.1% |
64% |
$ 313 |
1,154 |
Economic Consulting |
106,468 |
9,783 |
9.2% |
69% |
$ 503 |
574 |
Technology (1) |
58,168 |
13,258 |
22.8% |
N/M |
N/M |
344 |
Strategic
Communications (1) |
46,312 |
7,420 |
16.0% |
N/M |
N/M |
566 |
|
$ 425,158 |
59,778 |
14.1% |
|
|
3,344 |
Corporate |
|
(23,720) |
|
|
|
|
Adjusted EBITDA |
|
$ 36,058 |
8.5% |
|
|
|
|
Year Ended December 31,
2014 |
|
|
|
|
|
|
Corporate
Finance/Restructuring |
$ 391,115 |
$ 55,492 |
14.2% |
67% |
$ 374 |
706 |
Forensic and Litigation
Consulting |
483,380 |
90,468 |
18.7% |
69% |
$ 321 |
1,154 |
Economic Consulting |
451,040 |
59,282 |
13.1% |
75% |
$ 512 |
574 |
Technology (1) |
241,310 |
63,545 |
26.3% |
N/M |
N/M |
344 |
Strategic
Communications (1) |
189,367 |
22,588 |
11.9% |
N/M |
N/M |
566 |
|
$ 1,756,212 |
291,375 |
16.6% |
|
|
3,344 |
Corporate |
|
(80,823) |
|
|
|
|
Adjusted EBITDA |
|
$ 210,552 |
12.0% |
|
|
|
|
Three Months Ended December 31,
2013 |
|
|
|
|
|
|
Corporate
Finance/Restructuring |
$ 92,751 |
$ 10,848 |
11.7% |
62% |
$ 421 |
737 |
Forensic and Litigation
Consulting |
114,720 |
17,556 |
15.3% |
71% |
$ 322 |
1,061 |
Economic Consulting |
108,089 |
21,982 |
20.3% |
74% |
$ 506 |
530 |
Technology (1) |
53,562 |
14,670 |
27.4% |
N/M |
N/M |
306 |
Strategic
Communications (1) |
46,876 |
5,928 |
12.6% |
N/M |
N/M |
590 |
|
$ 415,998 |
70,984 |
17.1% |
|
|
3,224 |
Corporate |
|
(23,321) |
|
|
|
|
Adjusted EBITDA |
|
$ 47,663 |
11.5% |
|
|
|
|
Year Ended December 31,
2013 |
|
|
|
|
|
|
Corporate
Finance/Restructuring |
$ 382,526 |
$ 67,183 |
17.6% |
65% |
$ 410 |
737 |
Forensic and Litigation
Consulting |
433,632 |
74,481 |
17.2% |
68% |
$ 317 |
1,061 |
Economic Consulting |
447,366 |
92,204 |
20.6% |
81% |
$ 503 |
530 |
Technology (1) |
202,663 |
60,655 |
29.9% |
N/M |
N/M |
306 |
Strategic
Communications (1) |
186,245 |
18,737 |
10.1% |
N/M |
N/M |
590 |
|
$ 1,652,432 |
313,260 |
19.0% |
|
|
3,224 |
Corporate |
|
(67,715) |
|
|
|
|
Adjusted EBITDA |
|
$ 245,545 |
14.9% |
|
|
|
|
(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. |
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES |
FOR THE THREE
MONTHS AND YEAR ENDED DECEMBER 31, 2014 AND 2013 |
|
|
|
|
|
|
Three Months
Ended December 31, |
Year Ended
December 31, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Net income (loss) |
$ 921 |
$ (7,139) |
$ 58,807 |
$ (10,594) |
Add back: |
|
|
|
|
Special charges, net of tax
effect (1) |
960 |
16,167 |
9,637 |
23,267 |
Goodwill impairment
charge(2) |
-- |
-- |
-- |
83,752 |
Remeasurement of
acquisition-related contingent consideration, net of tax effect
(3) |
(204) |
(3,838) |
(1,718) |
(12,054) |
Interim period impact of
including goodwill impairment charges in the annual effective tax
rate |
-- |
10,805 |
-- |
-- |
Adjusted Net Income |
$ 1,677 |
$ 15,995 |
$ 66,726 |
$ 84,371 |
|
|
|
|
|
Earnings (loss) per common share –
diluted |
$ 0.02 |
$ (0.18) |
$ 1.44 |
$ (0.27) |
Add back: |
|
|
|
|
Special charges, net of tax
effect (1) |
0.02 |
0.41 |
0.24 |
0.59 |
Goodwill impairment
charge(2) |
-- |
-- |
-- |
2.14 |
Remeasurement of
acquisition-related contingent consideration, net of tax effect
(3) |
-- |
(0.10) |
(0.04) |
(0.30) |
Interim period impact of
including goodwill impairment charges in the annual effective tax
rate |
-- |
0.28 |
-- |
-- |
Impact of denominator for diluted adjusted
earnings per common share (4) |
-- |
(0.02) |
-- |
(0.07) |
Adjusted earnings per common share –
diluted |
$ 0.04 |
$ 0.39 |
$ 1.64 |
$ 2.09 |
|
|
|
|
|
Weighted average number of common
shares outstanding – diluted(4) |
41,090 |
40,529 |
40,729 |
40,421 |
|
|
|
|
|
(1) The tax effect takes into
account the tax treatment and related tax rate(s) that apply to
each adjustment in the applicable tax jurisdiction(s). As a result,
the effective tax rates for the adjustments related to special
charges for both the three months and year ended December 31, 2014
was 41.0%. The effective tax rates for the adjustments related to
special charges for the three months and year ended December 31,
2013 was 41.4% and 39.4%, respectively. The tax expense related to
the adjustments for special charges for the three months and year
ended December 31, 2014 was $0.7 million or $0.02 impact on
adjusted earnings per diluted share and $6.7 million or $0.16
impact on diluted earnings per share, respectively. The tax expense
related to the adjustments for special charges for the three months
and year ended December 31, 2013 was $11.4 million or $0.29 impact
on adjusted earnings per diluted share and $15.1 million or $0.39
impact on diluted earnings per share, respectively. |
(2) The goodwill impairment
charge is non-deductible for income tax purposes and resulted in no
tax benefit for the year ended December 31, 2013. |
(3) The tax effect takes into
account the tax treatment and related tax rate(s) that apply to
each adjustment in the applicable tax jurisdiction(s). As a result,
the effective tax rates for the adjustments related to the
remeasurement of acquistion-related contingent consideration for
the three months and year ended December 31, 2014 were 40.0% and
36.9%, respectively. The effective tax rates for the adjustments
related to the remeasurement of acquistion-related contingent
consideration for the three months and year ended December 31, 2013
were 28.1% and 11.1%, respectively. The tax expense related to the
adjustments for the remeasurement of acquistion-related contingent
consideration for the three months and year ended December 31, 2014
were $0.1 million with no impact on adjusted earnings per diluted
share and $1.0 million or $0.02 impact on diluted earnings per
share, respectively. The tax expense related to the adjustment for
the remeasurement of acquistion-related contingent consideration
for both the three months and year ended December 31, 2013 was $1.5
million or $0.04 impact on adjusted earnings per diluted
share. |
(4) For the three months and year
ended December 31, 2013, the Company reported a net loss. For
such periods, the basic weighted average common shares outstanding
equals the diluted weighted average common shares outstanding for
purposes of calculating U.S. GAAP earnings per share because
potentially dilutive securities would be antidilutive. For non-GAAP
purposes, the per share and share amounts presented herein reflect
the impact of the inclusion of share-based awards and convertible
notes that are considered dilutive based on the impact of the add
backs included in Adjusted Net Income above. |
|
|
|
|
|
|
|
|
RECONCILIATION OF NET
LOSS AND OPERATING INCOME (LOSS) TO ADJUSTED EBITDA |
(in
thousands) |
FOR THE THREE
MONTHS AND YEAR ENDED DECEMBER 31, 2014 AND 2013 |
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2014 |
Corporate Finance /
Restructuring |
Forensic and
Litigation Consulting |
Economic
Consulting |
Technology |
Strategic Communi-
cations |
Corp HQ |
Total |
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
$ 921 |
Interest income and other |
|
|
|
|
|
|
(1,205) |
Interest expense |
|
|
|
|
|
|
12,488 |
Income tax provision |
|
|
|
|
|
|
9,702 |
Operating income |
$ 7,832 |
$ 16,663 |
$ 8,767 |
$ 9,194 |
$ 5,693 |
$ (26,243) |
$ 21,906 |
Depreciation and
amortization |
1,054 |
1,244 |
1,072 |
3,866 |
678 |
895 |
8,809 |
Amortization of other
intangible assets |
988 |
1,536 |
284 |
198 |
1,049 |
-- |
4,055 |
Special charges |
-- |
-- |
-- |
-- |
-- |
1,628 |
1,628 |
Remeasurement of
acquisition-related contingent consideration |
-- |
-- |
(340) |
-- |
-- |
-- |
(340) |
Adjusted EBITDA |
$ 9,874 |
$ 19,443 |
$ 9,783 |
$ 13,258 |
$ 7,420 |
$ (23,720) |
$ 36,058 |
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
$ 58,807 |
Interest income and other |
|
|
|
|
|
|
(4,670) |
Interest expense |
|
|
|
|
|
|
50,685 |
Income tax provision |
|
|
|
|
|
|
42,604 |
Operating income |
$ 46,913 |
$ 83,180 |
$ 55,282 |
$ 46,906 |
$ 15,603 |
$ (100,458) |
147,426 |
Depreciation and
amortization |
3,568 |
4,301 |
4,068 |
15,768 |
2,562 |
3,722 |
33,989 |
Amortization of other
intangible assets |
5,589 |
3,613 |
1,047 |
852 |
4,420 |
-- |
15,521 |
Special charges |
84 |
308 |
12 |
19 |
3 |
15,913 |
16,339 |
Remeasurement of
acquisition-related contingent consideration |
(662) |
(934) |
(1,127) |
-- |
-- |
-- |
(2,723) |
Adjusted EBITDA |
55,492 |
90,468 |
59,282 |
63,545 |
22,588 |
(80,823) |
210,552 |
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
$ (7,139) |
Interest income and other |
|
|
|
|
|
|
(46) |
Interest expense |
|
|
|
|
|
|
12,776 |
Income tax provision |
|
|
|
|
|
|
5,859 |
Operating income |
$ 9,869 |
$ 16,017 |
$ 20,481 |
$ 8,909 |
$ 4,240 |
$ (48,066) |
$ 11,450 |
Depreciation and
amortization |
908 |
1,000 |
1,024 |
3,773 |
566 |
1,052 |
8,323 |
Amortization of other
intangible assets |
1,535 |
539 |
477 |
1,988 |
1,122 |
-- |
5,661 |
Special charges |
3,875 |
-- |
-- |
-- |
-- |
23,693 |
27,568 |
Remeasurement of
acquisition-related contingent consideration |
(5,339) |
-- |
-- |
-- |
-- |
-- |
(5,339) |
Adjusted EBITDA |
$ 10,848 |
$ 17,556 |
$ 21,982 |
$ 14,670 |
$ 5,928 |
$ (23,321) |
$ 47,663 |
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
$ (10,594) |
Interest income and other |
|
|
|
|
|
|
(1,748) |
Interest expense |
|
|
|
|
|
|
51,376 |
Income tax provision |
|
|
|
|
|
|
42,405 |
Operating income
(loss) |
$ 58,594 |
$ 68,211 |
$ 86,714 |
$ 38,038 |
$ (72,129) |
$ (97,989) |
81,439 |
Depreciation and
amortization |
3,449 |
3,958 |
3,671 |
14,661 |
2,464 |
4,338 |
32,541 |
Amortization of other
intangible assets |
6,480 |
2,142 |
1,808 |
7,940 |
4,584 |
-- |
22,954 |
Special charges |
10,274 |
2,111 |
11 |
16 |
66 |
25,936 |
38,414 |
Goodwill impairment charge |
-- |
-- |
-- |
-- |
83,752 |
-- |
83,752 |
Remeasurement of
acquisition-related contingent consideration |
(11,614) |
(1,941) |
-- |
-- |
-- |
-- |
(13,555) |
Adjusted EBITDA |
67,183 |
74,481 |
92,204 |
60,655 |
18,737 |
(67,715) |
245,545 |
|
|
|
|
FTI CONSULTING,
INC. |
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
FOR THE YEAR ENDED
DECEMBER 31, 2014 AND 2013 |
(in
thousands) |
|
|
|
|
Year
Ended |
|
December
31, |
|
2014 |
2013 |
Operating activities |
|
|
Net income (loss) |
$ 58,807 |
$ (10,594) |
Adjustments to reconcile net income (loss) to
net cash provided by operating activities: |
|
|
Depreciation and
amortization |
35,126 |
32,638 |
Amortization and impairment of
other intangible assets |
15,521 |
22,954 |
Goodwill impairment charge |
-- |
83,752 |
Acquisition-related contingent
consideration |
(1,676) |
(10,869) |
Provision for doubtful
accounts |
18,252 |
13,335 |
Non-cash share-based
compensation |
22,848 |
35,129 |
Non-cash interest expense and
loss on extinguishment of debt |
2,691 |
2,699 |
Other |
(522) |
(1,582) |
Changes in operating assets and
liabilities, net of effects from acquisitions: |
|
|
Accounts receivable, billed and
unbilled |
(43,072) |
(56,290) |
Notes receivable |
(18,253) |
(7,544) |
Prepaid expenses and other
assets |
10,733 |
(6,784) |
Accounts payable, accrued
expenses and other |
980 |
8,505 |
Income taxes |
15,283 |
7,963 |
Accrued compensation |
11,106 |
82,917 |
Billings in excess of services
provided |
7,577 |
(2,958) |
Net cash provided by
operating activities |
135,401 |
193,271 |
|
|
|
Investing activities |
|
|
Payments for acquisition of
businesses, net of cash received |
(23,467) |
(55,498) |
Purchases of property and
equipment |
(39,256) |
(42,544) |
Other |
5,128 |
(5,049) |
Net cash used in
investing activities |
(57,595) |
(103,091) |
|
|
|
Financing activities |
|
|
Payments of long-term debt and
capital lease obligations |
(6,014) |
(6,021) |
Deposits |
13,071 |
-- |
Purchase and retirement of
common stock |
(4,367) |
(66,763) |
Net issuance of common stock
under equity compensation plans |
4,772 |
29,392 |
Other |
(1,132) |
263 |
Net cash provided by
(used in) financing activities |
6,330 |
(43,129) |
|
|
|
Effect of exchange rate changes on cash and
cash equivalents |
(6,289) |
1,997 |
|
|
|
Net increase in cash and cash
equivalents |
77,847 |
49,048 |
Cash and cash equivalents, beginning of
period |
205,833 |
156,785 |
Cash and cash equivalents, end of period |
$ 283,680 |
$ 205,833 |
|
|
|
FTI CONSULTING,
INC. |
CONSOLIDATED BALANCE
SHEETS |
AT DECEMBER 31, 2014
AND DECEMBER 31, 2013 |
(in thousands,
except per share amounts) |
|
|
|
|
December 31, |
December 31, |
|
2014 |
2013 |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 283,680 |
$ 205,833 |
Accounts receivable: |
|
|
Billed receivables |
381,464 |
352,411 |
Unbilled receivables |
248,462 |
233,307 |
Allowance for doubtful accounts
and unbilled services |
(144,825) |
(109,273) |
Accounts receivable, net |
485,101 |
476,445 |
Current portion of notes
receivable |
27,208 |
33,093 |
Prepaid expenses and other
current assets |
60,852 |
61,800 |
Current portion of deferred tax
assets |
27,332 |
26,690 |
Total current assets |
884,173 |
803,861 |
Property and equipment, net of accumulated
depreciation |
82,163 |
79,007 |
Goodwill |
1,211,689 |
1,218,733 |
Other intangible assets, net of
amortization |
77,034 |
97,148 |
Notes receivable, net of current portion |
122,149 |
108,298 |
Other assets |
53,319 |
57,900 |
Total
assets |
$ 2,430,527 |
$ 2,364,947 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities |
|
|
Accounts payable, accrued
expenses and other |
$ 99,494 |
$ 126,886 |
Accrued compensation |
220,959 |
222,738 |
Current portion of long-term
debt and capital lease obligations |
11,000 |
6,014 |
Billings in excess of services
provided |
35,639 |
28,692 |
Total current liabilities |
367,092 |
384,330 |
Long-term debt and capital lease obligations,
net of current portion |
700,000 |
711,000 |
Deferred income taxes |
161,932 |
137,697 |
Other liabilities |
98,757 |
89,661 |
Total
liabilities |
1,327,781 |
1,322,688 |
|
|
|
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 ― 41,181
(2014) and 40,526 (2013) |
412 |
405 |
Additional paid-in capital |
393,174 |
362,322 |
Retained earnings |
789,428 |
730,621 |
Accumulated other comprehensive loss |
(80,268) |
(51,089) |
Total stockholders'
equity |
1,102,746 |
1,042,259 |
Total liabilities and
stockholders' equity |
$ 2,430,527 |
$ 2,364,947 |
CONTACT: FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100
Investor & Media Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com
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