FTI Consulting Reports Third Quarter 2016 Financial Results

  • Third Quarter Revenues of $438.0 Million
  • Third Quarter Fully Diluted EPS and Adjusted EPS of $0.52

WASHINGTON, Oct. 27, 2016 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN) (the “Company”) today released its financial results for the third quarter ended September 30, 2016.

For the quarter, revenues decreased 3.8 percent to $438.0 million compared to $455.5 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues declined by 2.0 percent. Net income increased 110.4 percent to $21.7 million compared to $10.3 million in the prior year quarter. Adjusted EBITDA of $47.2 million, or 10.8 percent of revenues, declined from $56.1 million, or 12.3 percent of revenues, in the prior year quarter. Fully diluted earnings per share (“EPS”) and Adjusted EPS were $0.52 compared to EPS of $0.25 and Adjusted EPS of $0.53 in the prior year quarter. EPS in the prior year quarter included a $19.6 million charge or a $0.28 per share loss related to the early extinguishment of debt.

Net cash provided by operating activities for the quarter was $70.9 million compared to $74.0 million in the prior year quarter. Cash and cash equivalents were $225.2 million at September 30, 2016, compared to $105.0 million at September 30, 2015. Total debt was $475.0 million at September 30, 2016, down from $520.0 million at September 30, 2015.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “We are pleased with the ongoing progress our businesses are making towards becoming, on a multi-year basis, real engines for growth. During the third quarter, our billable headcount grew 3.9 percent from the second quarter of 2016 as we continue to attract the best professionals across the globe and extend our offerings into new adjacencies and geographies.”

Third Quarter Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment decreased $2.9 million, or 2.5 percent, to $110.6 million in the quarter compared to $113.5 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $1.0 million, or 0.9 percent, compared to the prior year quarter. Adjusted Segment EBITDA was $17.8 million, or 16.1 percent of segment revenues, compared to $26.7 million, or 23.5 percent of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA Margin was primarily due to lower utilization and higher costs related to the ramp up of experienced hires.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $1.1 million, or 1.0 percent, to $115.0 million in the quarter compared to $116.2 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues were comparable to the prior year quarter. Higher success fees were offset by lower demand in the segment’s health solutions practice. Adjusted Segment EBITDA was $16.6 million, or 14.4 percent of segment revenues, compared to $13.4 million, or 11.5 percent of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA Margin was driven by higher success fees in the segment’s health solutions practice.

Economic Consulting
Revenues in the Economic Consulting segment increased $7.9 million, or 6.9 percent, to $122.5 million in the quarter compared to $114.5 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $10.8 million, or 9.4 percent, compared to the prior year quarter. The increase in revenues was primarily due to higher demand and higher average realization in non-merger and acquisition (“M&A”)-related antitrust services in North America, which were partially offset by lower average realization for financial economics services in North America. Adjusted Segment EBITDA was $18.4 million, or 15.0 percent of segment revenues, compared to $16.7 million, or 14.5 percent of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA Margin was due to improved utilization in North America, which was partially offset by lower utilization in Europe, the Middle East and Africa (“EMEA”).

Technology
Revenues in the Technology segment decreased $11.5 million, or 20.7 percent, to $44.1 million in the quarter compared to $55.6 million in the prior year quarter. The decrease in revenues was driven by a decline in M&A-related “second request” activity and reduced demand for litigation services. Adjusted Segment EBITDA was $7.4 million, or 16.8 percent of segment revenues, compared to $10.8 million, or 19.5 percent of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA Margin was due to lower demand and realized pricing for managed review services.

Strategic Communications
Revenues in the Strategic Communications segment decreased $9.9 million, or 17.7 percent, to $45.8 million in the quarter compared to $55.7 million in the prior year quarter. Excluding the estimated impact of FX, revenues decreased $7.8 million, or 14.0 percent, compared to the prior year quarter. The decrease in revenues was primarily due to $8.5 million in lower pass-through revenues compared to the prior year quarter. Adjusted Segment EBITDA was $7.5 million, or 16.4 percent of segment revenues, compared to $8.7 million, or 15.6 percent of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA Margin was primarily due to the impact of lower net pass-through revenue. Excluding this impact, Adjusted Segment EBITDA Margin declined 2.3 percentage points due to higher costs related to the ramp up of new hires.

2016 Guidance
The Company revised its 2016 guidance for revenues to be approximately $1.80 billion. This compares to the previous range of between $1.80 billion and $1.87 billion. The Company reaffirmed 2016 guidance for Adjusted EPS of between $2.15 and $2.45.

Third Quarter 2016 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2016 financial results at 9:00 a.m. Eastern Time on October 27, 2016. 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.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,600 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 $1.78 billion in revenues during fiscal year 2015. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measures
We have included the definitions of Segment Operating Income (Loss), Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin below in order to more fully define the components of certain non-GAAP measures presented in this earnings release. We define Segment Operating Income (Loss) as a segment’s share of Consolidated Operating Income (Loss). We define Total Segment Operating Income (Loss), 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 (Loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Adjusted Segment EBITDA Margin as Adjusted Segment EBITDA as a percentage of a segment’s revenues. We use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful measure which reflects current core operating performance and provides an indicator of the segment’s ability to generate cash.

We define, non-GAAP measures, (i) Total Adjusted Segment EBITDA as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses, and (ii) 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 believe that our 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, 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. They are 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 financial measures, provide management and investors with additional supplemental 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”), non-GAAP financial measures, as Net Income (Loss) and earnings per diluted share (“GAAP EPS”), 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 and GAAP financial measures, 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 non-GAAP financial measures to GAAP are included in the financial tables accompanying this press release.

The financial tables accompanying this press release do not include a reconciliation of the Company’s 2016 Adjusted EPS guidance to an estimate of GAAP EPS. It is difficult to predict and estimate future remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and/or losses on early extinguishment of debt, as these items are dependent on future events that are uncertain. Accordingly, a reconciliation of our non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

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 headings "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.

FINANCIAL TABLES FOLLOW


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
(unaudited)
       
  Three Months Ended
  September 30,
   2016     2015 
       
Revenues $   438,042     $   455,470  
       
Operating expenses      
Direct cost of revenues     293,702         301,609  
Selling, general and administrative expenses     106,220         105,058  
Acquisition-related contingent consideration     201         159  
Amortization of other intangible assets     2,845         2,900  
      402,968         409,726  
       
Operating income     35,074         45,744  
       
Other income (expense)      
Interest income and other     3,213         2,027  
Interest expense     (6,304 )       (11,696 )
Loss on early extinguishment of debt     -          (19,589 )
      (3,091 )       (29,258 )
       
Income before income tax provision     31,983         16,486  
       
Income tax provision     10,292         6,177  
       
Net income  $   21,691     $   10,309  
       
Earnings per common share - basic $   0.53     $   0.25  
Weighted average common shares outstanding - basic     41,239         41,094  
       
Earnings per common share - diluted $   0.52     $   0.25  
Weighted average common shares outstanding - diluted     42,065         41,982  
       
       
Other comprehensive loss, net of tax:      
Foreign currency translation adjustments, net of tax $0 $   (4,478 )   $   (17,229 )
Total other comprehensive loss, net of tax     (4,478 )       (17,229 )
Comprehensive income (loss) $   17,213     $   (6,920 )
 


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
(unaudited)
       
  Nine Months Ended
  September 30,
   2016     2015 
       
Revenues $   1,368,474     $   1,336,945  
       
Operating expenses      
Direct cost of revenues     902,532         872,108  
Selling, general and administrative expenses     318,074         316,317  
Special charges     6,811         -   
Acquisition-related contingent consideration     1,541         (1,145 )
Amortization of other intangible assets     8,041         8,919  
      1,236,999         1,196,199  
       
Operating income     131,475         140,746  
       
Other income (expense)      
Interest income and other     9,895         2,840  
Interest expense     (18,836 )       (36,537 )
Loss on extinguishment of debt     -          (19,589 )
      (8,941 )       (53,286 )
       
Income before income tax provision     122,534         87,460  
       
Income tax provision     44,115         31,756  
       
Net income  $   78,419     $   55,704  
       
Earnings per common share - basic $   1.92     $   1.37  
Weighted average common shares outstanding - basic     40,856         40,771  
       
Earnings per common share - diluted $   1.88     $   1.34  
Weighted average common shares outstanding - diluted     41,605         41,682  
       
       
Other comprehensive loss, net of tax:      
Foreign currency translation adjustments, net of tax $0 $   (23,645 )   $   (24,412 )
Total other comprehensive loss, net of tax     (23,645 )       (24,412 )
Comprehensive income $   54,774     $   31,292  
 


FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
                 
    Three Months Ended September 30,   Nine Months Ended September 30,
     2016     2015     2016     2015 
             
Net income    $   21,691     $   10,309     $   78,419     $   55,704  
Add back:                
Special charges, net of tax (1)       -          -          4,328         -   
Loss on extinguishment of debt, net of tax (2)       -          11,881         -          11,881  
Remeasurement of acquisition-related contingent consideration, net of tax  (3)       -          -          600         (1,005 )
Adjusted Net Income   $   21,691     $   22,190     $   83,347     $   66,580  
                 
Earnings per common share – diluted   $   0.52     $   0.25     $   1.88     $   1.34  
Add back:                
Special charges, net of tax (1)       -          -          0.10         -   
Loss on extinguishment of debt, net of tax (2)       -          0.28         -          0.28  
Remeasurement of acquisition-related contingent consideration, net of tax  (3)       -          -          0.02         (0.02 )
Adjusted earnings per common share - diluted   $   0.52     $   0.53     $   2.00     $   1.60  
                 
Weighted average number of common shares outstanding – diluted       42,065         41,982         41,605         41,682  
                 
                 
(1) The tax effect takes into account the tax treatment and related tax rates that apply to each adjustment in the applicable tax jurisdiction. As a result, the effective tax rate for the adjustments related to special charges for the nine months ended September 30, 2016 was 36.5%. The tax expense related to the adjustments for special charges for the nine months ended September 30, 2016 was  $2.5 million or $0.06 impact on Adjusted EPS. There were no special charges for the three and nine months ended September 30, 2015.
 
(2) The tax effect takes into account the tax treatment and related tax rates that apply to each adjustment in the applicable tax jurisdiction. As a result, the effective tax rate for the loss on early extinguishment of debt for the three and nine months ended September 30, 2015 was 39.3%.  The tax expense related to the loss on early extinguishment of debt for the three and nine months ended September 30, 2015 was $7.7 million, or a $0.18 impact on Adjusted EPS. There were no adjustments related to the early extinguishment  of debt in the three or nine months ended September 30, 2016.
 
(3) The tax effect takes into account the tax treatment and related tax rates that apply to each adjustment in the applicable tax jurisdiction. As a result, the effective tax rate for the adjustments related to the remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2016 and 2015 were 38.8% and 40%, respectively.  The tax expense related to the adjustment for the remeasurement of acquisition-related contingent consideration for the nine months ended September 30, 2016 and 2015 were $0.4 million or $0.01 impact on adjusted EPS and $0.7 million or a $0.02 impact on Adjusted EPS, respectively. There were no adjustments related to the remeasurement of acquisition-related contingent consideration in the three months ended September 30, 2016 and 2015.
 


FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
(unaudited)
                      Average    Revenue-
    Segment    Adjusted   Adjusted EBITDA        Billable    Generating
    Revenues   EBITDA   Margin   Utilization    Rate    Headcount
      (in thousands)                (at period end)
Three Months Ended September 30, 2016                        
Corporate Finance & Restructuring    $   110,617     $   17,762       16.1 %     61 %   $   379       904
Forensic and Litigation Consulting        115,045         16,554       14.4 %     57 %   $   330       1,145
Economic Consulting       122,480         18,354       15.0 %     69 %   $   534       647
Technology  (1)       44,072         7,398       16.8 %   N/M   N/M     298
Strategic Communications  (1)       45,828         7,509       16.4 %   N/M   N/M     624
    $   438,042         67,577       15.4 %             3,618
Unallocated Corporate            (20,348 )                
Adjusted EBITDA        $   47,229       10.8 %            
                         
Nine Months Ended September 30, 2016                        
Corporate Finance & Restructuring    $   369,915     $   81,406       22.0 %     68 %   $   388       904
Forensic and Litigation Consulting        352,242         51,552       14.6 %     60 %   $   329       1,145
Economic Consulting       371,217         55,054       14.8 %     74 %   $   516       647
Technology  (1)       134,235         20,256       15.1 %   N/M   N/M     298
Strategic Communications  (1)       140,865         22,057       15.7 %   N/M   N/M     624
    $   1,368,474         230,325       16.8 %             3,618
Unallocated Corporate           (57,659 )                
Adjusted EBITDA        $   172,666       12.6 %            
                         
Three Months Ended September 30, 2015                        
Corporate Finance & Restructuring    $   113,487     $   26,662       23.5 %     69 %   $   390       830
Forensic and Litigation Consulting        116,158         13,406       11.5 %     60 %   $   318       1,209
Economic Consulting       114,541         16,654       14.5 %     71 %   $   523       594
Technology  (1)       55,568         10,813       19.5 %   N/M   N/M     354
Strategic Communications  (1)       55,716         8,717       15.6 %   N/M   N/M     594
    $   455,470         76,252       16.7 %             3,581
Unallocated Corporate            (20,150 )                
Adjusted EBITDA        $   56,102       12.3 %            
                         
Nine Months Ended September 30, 2015                        
Corporate Finance & Restructuring    $   328,812     $   71,174       21.6 %     71 %   $   382       830
Forensic and Litigation Consulting        365,554         55,456       15.2 %     65 %   $   315       1,209
Economic Consulting       329,320         43,502       13.2 %     72 %   $   506       594
Technology  (1)       172,048         33,052       19.2 %   N/M   N/M     354
Strategic Communications  (1)       141,211         20,100       14.2 %   N/M   N/M     594
    $   1,336,945         223,284       16.7 %             3,581
Unallocated Corporate           (52,725 )                
Adjusted EBITDA        $   170,559       12.8 %            
                         
 
(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.
 


RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)
(unaudited)
                             
Three Months Ended September 30, 2016 Corporate Finance &
Restructuring
  Forensic and Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Corp HQ   Total  
                             
Net income                         $   21,691    
Interest income and other                             (3,213 )  
Interest expense                             6,304    
Income tax provision                             10,292    
Operating income $   16,182     $   14,867     $   16,888     $   2,869     $   6,006     $   (21,738 )   $   35,074    
Depreciation and amortization     698         1,203         1,312         4,121         586         1,390         9,310    
Amortization of other intangible assets     882         484         154         408         917         -          2,845    
Adjusted EBITDA  $   17,762     $   16,554     $   18,354     $   7,398     $   7,509     $   (20,348 )   $   47,229    
                             
Nine Months Ended September 30, 2016 Corporate Finance &
Restructuring
  Forensic and Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Corp HQ   Total  
                             
Net income                          $   78,419    
Interest income and other                             (9,895 )  
Interest expense                             18,836    
Income tax provision                             44,115    
Operating income $   76,740     $   45,005     $   51,390     $   2,569     $   16,661     $   (60,890 )   $   131,475    
Depreciation and amortization     2,175         3,278         3,172         11,901         1,602         3,231         25,359    
Amortization of other intangible assets     2,491         1,519         492         725         2,814         -          8,041    
Special charges     -          1,750         -          5,061         -          -          6,811    
Remeasurement of acquisition-related contingent consideration     -          -          -          -          980         -          980    
Adjusted EBITDA  $   81,406     $   51,552     $   55,054     $   20,256     $   22,057     $   (57,659 )   $   172,666    
                             
                             
Three Months Ended September 30, 2015 Corporate Finance &
Restructuring
  Forensic and Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Corp HQ   Total  
                             
Net income                          $   10,309    
Interest income and other                             (2,027 )  
Interest expense                             11,696    
Loss on early extinguishment of debt                             19,589    
Income tax provision                             6,177    
Operating income $   25,112     $   11,944     $   15,498     $   6,830     $   7,235     $   (20,875 )   $   45,744    
Depreciation and amortization     677         925         848         3,784         499         725         7,458    
Amortization of other intangible assets     873         537         308         199         983         -          2,900    
Adjusted EBITDA  $   26,662     $   13,406     $   16,654     $   10,813     $   8,717     $   (20,150 )   $   56,102    
                             
Nine Months Ended September 30, 2015 Corporate Finance &
Restructuring
  Forensic and Litigation
Consulting
  Economic
Consulting
  Technology    Strategic
Communications
  Corp HQ   Total  
                             
Net income                          $   55,704    
Interest income and other                             (2,840 )  
Interest expense                             36,537    
Loss on early extinguishment of debt                             19,589    
Income tax provision                             31,756    
Operating income $   67,782     $   50,894     $   40,076     $   21,493     $   15,558     $   (55,057 )   $   140,746    
Depreciation and amortization     2,141         2,862         2,686         10,969         1,579         2,332         22,569    
Amortization of other intangible assets     2,742         1,700         924         590         2,963         -          8,919    
Remeasurement of acquisition-related contingent consideration     (1,491 )       -          (184 )       -          -          -          (1,675 )  
Adjusted EBITDA  $   71,174     $   55,456     $   43,502     $   33,052     $   20,100     $   (52,725 )   $   170,559    
                             
 


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
       
  Nine Months Ended
  September 30,
   2016     2015 
Operating activities      
Net income  $   78,419     $   55,704  
       
Adjustments to reconcile net income to net cash used in operating activities:      
Depreciation and amortization     25,359         22,569  
Amortization of other intangible assets     8,041         8,919  
Acquisition-related contingent consideration     1,541         (1,145 )
Provision for doubtful accounts      5,903         10,364  
Non-cash share-based compensation      13,381         14,356  
Non-cash interest expense     1,489         2,029  
Loss on early extinguishment of debt     -          19,589  
Other     (1,159 )       (674 )
Changes in operating assets and liabilities, net of effects from acquisitions:      
Accounts receivable, billed and unbilled     (67,318 )       (84,411 )
Notes receivable     (3,674 )       (334 )
Prepaid expenses and other assets     (3,575 )       (4,396 )
Accounts payable, accrued expenses and other     10,900         10,158  
Income taxes      28,204         15,371  
Accrued compensation     4,486         (19,518 )
Billings in excess of services provided     9,578         (5,278 )
Net cash provided by operating activities     111,575         43,303  
       
Investing activities      
Payments for acquisition of businesses, net of cash received      (56 )       (575 )
Purchases of property and equipment     (22,855 )       (24,674 )
Other     74         94  
Net cash used in investing activities     (22,837 )       (25,155 )
       
Financing activities      
Borrowings (repayments) under revolving line of credit, net     (25,000 )       220,000  
Payments of long-term debt     -          (425,671 )
Payments of debt issue costs     -          (3,701 )
Deposits     2,806         2,406  
Purchase and retirement of common stock     (2,903 )       -   
Net issuance of common stock under equity compensation plans     18,394         13,931  
Other     357         124  
Net cash used in financing activities     (6,346 )       (192,911 )
       
Effect of exchange rate changes on cash and cash equivalents     (6,968 )       (3,943 )
       
Net increase (decrease) in cash and cash equivalents     75,424         (178,706 )
Cash and cash equivalents, beginning of period     149,760         283,680  
Cash and cash equivalents, end of period $   225,184     $   104,974  
 


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
       
  September 30,    December 31, 
   2016     2015 
  (unaudited)    
Assets      
Current assets      
Cash and cash equivalents $   225,184     $   149,760  
Accounts receivable:      
Billed receivables     416,960         405,000  
Unbilled receivables     326,297         280,538  
Allowance for doubtful accounts and unbilled services     (195,669 )       (185,754 )
Accounts receivable, net     547,588         499,784  
Current portion of notes receivable     32,490         36,115  
Prepaid expenses and other current assets     58,804         55,966  
Total current assets     864,066         741,625  
Property and equipment, net of accumulated depreciation     66,422         74,760  
Goodwill     1,188,230         1,198,298  
Other intangible assets, net of amortization     54,493         63,935  
Notes receivable, net of current portion     112,364         106,882  
Other assets     56,043         43,518  
Total assets $   2,341,618     $   2,229,018  
       
Liabilities and Stockholders' Equity      
Current liabilities      
Accounts payable, accrued expenses and other $   97,144     $   89,845  
Accrued compensation     229,611         227,783  
Billings in excess of services provided     38,774         29,449  
Total current liabilities     365,529         347,077  
Long-term debt, net     470,339         494,772  
Deferred income taxes     170,768         139,787  
Other liabilities     103,397         99,779  
Total liabilities     1,110,033         1,081,415  
       
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 ― 42,367 (2016) and 41,234 (2015)      423         412  
Additional paid-in capital     429,902         400,705  
Retained earnings     933,900         855,481  
Accumulated other comprehensive loss     (132,640 )       (108,995 )
Total stockholders' equity     1,231,585         1,147,603  
Total liabilities and stockholders' equity $   2,341,618     $   2,229,018  


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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