SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2015
FTI CONSULTING, INC.
(Exact Name of Registrant as Specified in Charter)
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001-14875 |
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52-1261113 |
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of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
1101 K Street NW, Washington, D.C. 20005
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (202) 312-9100
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01. |
Regulation FD Disclosure. |
FTI Consulting, Inc. (“FTI Consulting”) uses a
presentation from time to time in its discussions with investors (the “Presentation”). The Presentation includes FTI Consulting’s past and present financial results, operating data and other information. A copy of the Presentation is
furnished as Exhibit 99.1 and has been posted to the FTI Consulting website at www.fticonsulting.com.
The Presentation includes
information regarding Segment Operating Income, Total Segment Operating Income, Adjusted EBITDA, Adjusted Segment EBITDA, Total Adjusted Segment EBITDA, Adjusted EBITDA Margin, Adjusted Segment EBITDA Margin, Adjusted Net Income and Adjusted
Earnings per Share (“Adjusted EPS”).
FTI Consulting defines “Segment Operating Income (Loss)” as a segment’s
share of consolidated operating income (loss). FTI Consulting defines “Total Segment Operating Income (Loss)” as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. FTI Consulting
uses Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. FTI Consulting defines “Adjusted EBITDA” as consolidated net income (loss) before income tax provision, other non-operating income (expense),
depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt, “Adjusted Segment EBITDA” as a
segment’s share of consolidated operating income (loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, and “Total
Adjusted Segment EBITDA” as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. FTI Consulting defines “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenues,
and “Adjusted Segment EBITDA Margin” as Adjusted Segment EBITDA as a percentage of a segment’s share of revenue. Although Adjusted EBITDA, Adjusted Segment EBITDA, Total Adjusted Segment EBITDA, Adjusted EBITDA Margin and Adjusted
Segment EBITDA Margin are not measures of financial condition or performance determined in accordance with U.S. generally accepted accounting principles (“GAAP”), FTI Consulting believes that they can be useful supplemental operating
performance measures. FTI Consulting uses Adjusted Segment EBITDA to internally evaluate the financial performance of each of its segments because it believes it is a useful supplemental measure which reflects current core operating performance and
provides an indicator of the segment’s ability to generate cash. FTI Consulting also believes that these non-GAAP measures, when considered together with GAAP financial results, provide management and investors with a more complete
understanding of FTI Consulting’s 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 FTI Consulting’s competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in FTI
Consulting’s industry. Therefore, FTI Consulting also believes that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of its operating results to the
operating results of other companies.
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FTI Consulting defines “Adjusted Net Income” and “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. FTI Consulting uses
Adjusted Net Income for the purpose of calculating Adjusted EPS and uses Adjusted EPS to assess total FTI Consulting operating performance on a consistent basis. FTI Consulting believes that this non-GAAP measure, when considered together with its
GAAP financial results, provides management and investors with a more complete understanding of its 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 FTI Consulting’s Consolidated Statements of Comprehensive Income. Reconciliations of GAAP to non-GAAP financial measures are included in the Presentation.
The Presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are
necessarily based on certain assumptions as of the date such forward-looking statements were made and are subject to significant risks and uncertainties. FTI Consulting does not undertake any responsibility for the adequacy, accuracy or completeness
or to update any of these statements in the future. Actual future performance and results could differ from that contained in or suggested by the forward-looking statements.
The information included herein, including Exhibit 99.1 furnished herewith, shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing pursuant to the Securities Act of
1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such filing.
| ITEM 9.01. |
Financial Statements and Exhibits |
(d) Exhibits.
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| 99.1 |
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October 2015 Investor Presentation of FTI Consulting, Inc. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, FTI Consulting, Inc. has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
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FTI CONSULTING, INC. |
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| Dated: October 29, 2015 |
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By: |
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/S/ CURTIS LU |
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Curtis Lu General Counsel |
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EXHIBIT INDEX
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| Exhibit
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Description |
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| 99.1 |
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October 2015 Presentation of FTI Consulting, Inc. |
5
FTI Consulting, Inc. Third Quarter 2015
Earnings Conference Call Exhibit 99.1
Cautionary Note About Forward-Looking
Statements This presentation 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 medium-term growth targets or other future financial results. When used in this press release, words such as "anticipates,"
“aspirational,” "estimates," "expects," “goals,” "intends," "believes,” "forecasts," “targets,” “objectives” 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,
projections and growth targets 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, estimates or growth targets will be achieved, and the
Company's actual results may differ materially from our expectations, beliefs, estimates and growth targets. 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.
Today’s Speakers Steven Gunby
President & Chief Executive Officer David Johnson Chief Financial Officer
Third Quarter 2015 Financial Review All
numbers in $000s, except for per share data and percentages (1) See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions and reconciliations of Adjusted EBITDA and Adjusted
Earnings Per Diluted Share, which are non-GAAP financial measures, to the most directly comparable GAAP measures, and the definition of Adjusted EBITDA Margin.
Third Quarter 2015 Segment Financial
Review (1) See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definition and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly
comparable GAAP measure, and the definition of Adjusted Segment EBITDA Margin. All numbers in $000s, except for percentages
Third Quarter 2015 Geographic Review
Third Quarter 2015 Cash
Position/Capital Allocation All numbers in $000s except for DSOs (1) 2013 purchase and retirement of common stock settled in 2014.
Third Quarter 2015 Corporate Finance
& Restructuring, Forensic and Litigation Consulting and Strategic Communications Adjusted EBITDA from 2009 to 2013 Average Decline: $28M per year & Restructuring Forensic and Litigation Consulting Adjusted Segment EBITDA (in millions) $ $ $
$ $ See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definition and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable
GAAP measure.
Third Quarter 2015 Even eliminating the
restructuring bubble, these businesses collectively showed no growth over the better part of a decade & Restructuring Forensic and Litigation Consulting Adjusted Segment EBITDA (in millions) $ $ $ $ $ $ $ See “Financial Tables” and
“End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definition and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.
Third Quarter 2015 These same
businesses grew ~5% in 2014 & Restructuring Forensic and Litigation Consulting Adjusted Segment EBITDA (in millions) $ $ $ $ $ $ $ $ See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for
the definition and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.
Third Quarter 2015 And are projected
to grow between 8-11% collectively in 2015 & Restructuring Forensic and Litigation Consulting $ $ $ $ $ $ $ $ Adjusted Segment EBITDA (in millions) $182 $186 2015 Guidance Range Range See “Financial Tables” and “End Notes: FTI
Consulting Non-GAAP Data Reconciliations” for the definition and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.
Third Quarter 2015 Economic
Consulting and Technology Adjusted EBITDA 2007 to 2013 Adjusted Segment EBITDA (in millions) $ $ $ $ $ $ $ See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definition and
reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.
Third Quarter 2015 Economic
Consulting and Technology were down ~20% Adjusted EBITDA in 2014 Adjusted Segment EBITDA (in millions) $ $ $ $ $ $ $ $ See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definition
and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.
Third Quarter 2015 We believe
Economic Consulting and Technology are anticipated to drop sharply again in 2015 Adjusted Segment EBITDA (in millions) 2015 Guidance $ $ $ $ $ $ $ $ $98 $107 Range Range See “Financial Tables” and “End Notes: FTI Consulting
Non-GAAP Data Reconciliations” for the definition and reconciliation of Adjusted Segment EBITDA, which is a non-GAAP financial measure, to the most directly comparable GAAP measure.
Third Quarter 2015 Question &
Answer Session Q&A
Financial Tables
Condensed Consolidated Statements of
Comprehensive Loss: Three Months Ended September 30, 2015 and 2014 All numbers in $000s, except for per share data
All numbers in $000s, except for per
share data Condensed Consolidated Statements of Comprehensive Income: Nine Months Ended September 30, 2015 and 2014
Operating Results by Business
Segment: Three Months Ended September 30, 2015 and 2014 (1) See “End Notes: FTI Consulting Non GAAP Data Reconciliations” for the definitions of Adjusted EBITDA, Adjusted Segment EBITDA, and Adjusted Segment EBITDA Margin, which are
non-GAAP financial measures, and the reconciliations of Adjusted EBITDA and Adjusted Segment EBITDA to the most directly comparable GAAP 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. All numbers in $000s, except for bill rate per hour and headcount data
Operating Results by Business
Segment: Nine Months Ended September 30, 2015 and 2014 (1) See “End Notes: FTI Consulting Non GAAP Data Reconciliations” for the definitions of Adjusted EBITDA, Adjusted Segment EBITDA, and Adjusted Segment EBITDA Margin, which are
non-GAAP financial measures, and the reconciliations of Adjusted EBITDA and Adjusted Segment EBITDA to the most directly comparable GAAP 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. All numbers in $000s, except for bill rate per hour and headcount data
Reconciliation of Non-GAAP Financial
Measures: Three Months Ended September 30, 2015 and 2014 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitiosn of Adjusted Net Income and Adjusted Earnings per Diluted Share, which are non-GAAP financial
measures. All numbers in $000s, except for per share data
Reconciliation of Non-GAAP Financial
Measures: Nine Months Ended September 30, 2015 and 2014 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Adjusted Net Income and Adjusted Earnings per Diluted Share, which are non-GAAP financial
measures. All numbers in $000s, except for per share data
Reconciliation of Net Income and
Operating Income to Adjusted EBITDA: Three Months Ended September 30, 2015 and 2014 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Segment Operating Income and Adjusted EBITDA, which are non-GAAP
financial measures. All numbers in $000s
Reconciliation of Net Income and
Operating Income to Adjusted EBITDA: Nine Months Ended September 30, 2015 and 2014 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Segment Operating Income and Adjusted EBITDA, which are non-GAAP
financial measures. All numbers in $000s
Reconciliation of Net Income and
Operating Income (Loss) to Adjusted EBITDA: Year Ended December 31, 2014 and 2013 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Segment Operating Income and Adjusted EBITDA, which are non-GAAP
financial measures. All numbers in $000s
Reconciliation of Net Income and
Operating Income (Loss) to Adjusted EBITDA: Year Ended December 31, 2012 and 2011 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Segment Operating Income and Adjusted EBITDA, which are non-GAAP
financial measures. All numbers in $000s
Reconciliation of Net Income and
Operating Income to Adjusted EBITDA: Year Ended December 31, 2010 and 2009 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Segment Operating Income and Adjusted EBITDA, which are non-GAAP
financial measures. All numbers in $000s
Reconciliation of Net Income and
Operating Income to Adjusted EBITDA: Year Ended December 31, 2008 and 2007 (1) See “End Notes: FTI Consulting Non-GAAP Data Reconciliations” for the definitions of Segment Operating Income and Adjusted EBITDA, which are non-GAAP
financial measures. All numbers in $000s
End Notes FTI Consulting Non-GAAP
Data Reconciliations We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”) as Net Income 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. We define Segment Operating Income (loss) as a
segment’s share of consolidated operating income (loss). We define Total Segment Operating Income (loss) as the total of Segment Operating Income (loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating
Income (loss) for the purpose of calculating Adjusted Segment EBITDA (loss). We define Adjusted EBITDA as consolidated net income (loss) before income tax provision, other non-operating income (expense), depreciation, amortization of intangible
assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating
income (loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Total Adjusted Segment EBITDA as the total of Adjusted
Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenues. We define Adjusted Segment EBITDA margin as Adjusted Segment EBITDA as a
percentage of a segment’s share of revenue. We use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating
performance and provides an indicator of the segment’s ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding
of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges, and goodwill impairment charges. In addition, EBITDA and Adjusted EBITDA are common
alternative measures of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also
believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results to the operating results of other companies. 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 (loss).
Appendix
Five professionals recognized as
world leading patent litigation expert witnesses in Intellectual Asset Management ("IAM") magazine's Patent 1000 – The World's Leading Patent Professionals guide FTI Consulting’s Technology and Forensic and Litigation Consulting segments
recognized in numerous categories of The Recorder’s Best of 2015 Legal Products and Services and The National Law Journal’s 2015 Best of Chicago Third Quarter 2015 Awards & Accolades Honored with eight Turnaround Atlas Awards from
the Global M&A Network, including engagements with Momentive Performance Materials, IAP Worldwide Services, Overseas Shipholding Group, Classic Party Rentals, Preferred Sands, Unitek Global Services, Clearlake Capital Group and FiberTower
Network Services Compass Lexecon named 2015 Competition Economist Firm of the Year and Janusz Ordover named Competition Economist Individual Expert of the Year by Who’s Who Legal Who’s Who Legal: Asset Recovery 2015 and Global
Investigations Review recognized six FTI Consulting professionals as world leading expert witnesses in asset recovery Honored as the #1 Firm in the categories of E-Discovery Managed Service Provider, Corporate Investigations Provider, End-to-End
Litigation Consulting and Securities Litigation Consulting from the NY Law Journal annual Reader Rankings survey Five Forensic and Litigation Consulting professionals recognized by Who's Who Legal as world leading construction and insurance experts
FTI Consulting’s Strategic Communications segment in the Asia Pacific region awarded a gold SABRE Award from The Holmes Report for their work with Out Leadership promoting LGBT Equality in Asia
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