• Third Quarter 2018 Revenues of $513.0 Million, Up 14.3% Compared to Prior Year Quarter
  • Third Quarter EPS of $1.14, Up 34.1% Compared to $0.85 in Prior Year Quarter; Third Quarter Adjusted EPS of $1.00, Up 20.5% Compared to $0.83 in Prior Year Quarter
  • Full Year 2018 Guidance Increased

WASHINGTON, D.C., Oct. 25, 2018 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released record financial results for the quarter ended September 30, 2018.

Third quarter 2018 revenues of $513.0 million increased $64.1 million, or 14.3%, compared to revenues of $449.0 million in the prior year quarter. The increase in revenues was driven by higher demand across all business segments, with particular strength in the Economic Consulting and Technology segments. Net income of $44.3 million compared to $32.2 million in the prior year quarter. The increase in net income was largely due to higher operating profits and a $6.2 million gain, net of taxes, related to the sale of the Company’s Ringtail e-discovery software and related business.

Adjusted EBITDA of $67.4 million, or 13.1% of revenues, compared to $57.4 million, or 12.8% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was primarily due to higher revenues, which were partially offset by higher compensation and other selling, general and administrative expenses.

Third quarter 2018 earnings per diluted share (“EPS”) of $1.14 compared to $0.85 in the prior year quarter. EPS in the quarter included the aforementioned $6.2 million gain related to the sale of the Company's Ringtail e-discovery software and related business, which increased EPS by $0.16. This was partially offset by a $0.7 million non-cash interest expense related to the Company's August 2018 2.0% convertible senior note offering (“2023 Convertible Notes”), which decreased EPS by $0.02. Adjusted EPS of $1.00, which excludes the gain related to the sale and non-cash interest expense, compared to $0.83 in the prior year quarter.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “We are pleased with another record quarter. These results benefited in part from some short-term factors, but, more fundamentally, they reflect the strategic changes our teams have been driving in our underlying businesses and the success we are having in attracting, developing and promoting our people, all of which have enhanced our ability to collaborate with our clients as they address their most significant challenges and opportunities.”

Cash Position and Capital Allocation

Net cash provided by operating activities of $120.9 million for the quarter ended September 30, 2018 compared to $106.2 million for the quarter ended September 30, 2017. The increase was primarily due to higher cash collections resulting from increased revenues, which was partially offset by an increase in cash paid for salaries and benefits. Cash and cash equivalents of $505.9 million at September 30, 2018 compared to $116.6 million at June 30, 2018 and $158.0 million at September 30, 2017. Total debt, net of cash, of $110.4 million at September 30, 2018 compared to $258.4 million at June 30, 2018 and $307.0 million at September 30, 2017. The improvement was primarily due to an increase in net cash provided by operating activities and $50.3 million in net proceeds from the aforementioned sale of the Company's Ringtail e-discovery software and related business.

Third Quarter 2018 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $7.3 million, or 5.7%, to $135.4 million in the quarter compared to $128.1 million in the prior year quarter. The increase in revenues was due to higher demand for business transformation and transactions services, which was partially offset by lower success fees. Adjusted Segment EBITDA was $26.8 million, or 19.8% of segment revenues, compared to $26.7 million, or 20.9% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was consistent with the prior year quarter, as the increase in revenues was offset by higher compensation.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $8.0 million, or 6.8%, to $126.7 million in the quarter compared to $118.6 million in the prior year quarter. The increase in revenues was primarily driven by higher demand for construction solutions, disputes and investigations services, which was partially offset by reduced demand for health solutions services. Adjusted Segment EBITDA was $22.0 million, or 17.3% of segment revenues, compared to $22.5 million, or 19.0% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was down slightly compared to the prior year quarter, as the increase in revenues was offset by higher compensation.

Economic Consulting
Revenues in the Economic Consulting segment increased $27.4 million, or 24.5%, to $139.2 million in the quarter, compared to $111.8 million in the prior year quarter. The increase in revenues was primarily due to higher demand for antitrust and financial economics services. Adjusted Segment EBITDA was $23.2 million, or 16.7% of segment revenues, compared to $12.1 million, or 10.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues with improved utilization.

Technology
Revenues in the Technology segment increased $14.4 million, or 34.1%, to $56.7 million in the quarter compared to $42.3 million in the prior year quarter. The increase in revenues was due to sharply higher demand for merger and acquisition-related “second request” services. Adjusted Segment EBITDA was $11.5 million, or 20.2% of segment revenues, compared to $6.0 million, or 14.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues and lower research and development expenses, which was partially offset by higher variable compensation.

Strategic Communications
Revenues in the Strategic Communications segment increased $6.9 million, or 14.3%, to $55.1 million in the quarter compared to $48.2 million in the prior year quarter. The increase in revenues was primarily due to a $3.3 million increase in pass-through revenues and higher project-based revenues. Adjusted Segment EBITDA was $10.8 million, or 19.6% of segment revenues, compared to $8.1 million, or 16.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in pass-through expenses and higher variable compensation.

2018 Guidance

The Company is revising its full year 2018 guidance. The Company now estimates that 2018 revenues will range between $1.960 billion and $1.990 billion. This compares to the previous revenue range of $1.910 billion to $1.960 billion. The Company now estimates that 2018 EPS will range between $3.53 and $3.73. This range is inclusive of the fourth quarter 2018 estimated charge related to the early extinguishment of debt from the redemption of all of the Company's outstanding $300.0 million aggregate principal amount of 6.0% senior notes due 2022, which the Company intends to redeem on November 15, 2018. The Company now estimates that 2018 Adjusted EPS will range between $3.60 and $3.80. This compares to the previous EPS and Adjusted EPS range of $2.90 to $3.30.

Third Quarter 2018 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2018 financial results at 9:00 a.m. Eastern Time on October 25, 2018. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations website here.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,600 employees located in 28 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 $1.81 billion in revenues during fiscal year 2017. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles (GAAP). Certain of these measures are considered non-GAAP financial measuresunder the Securities and Exchange Commission (SEC) rules. Specifically, we have referred to the following non-GAAP measures:

  • Total Segment Operating Income
  • Adjusted EBITDA
  • Total Adjusted Segment EBITDA
  • Adjusted EBITDA Margin
  • Adjusted Net Income
  • Adjusted Earnings per Diluted Share
  • Free Cash Flow

We have included the definitions of Segment Operating Income and Adjusted Segment EBITDA below in order to more fully define the components of certain non-GAAP financial measures presented in this earnings release. We define Segment Operating Income as a segment’s share of Consolidated Operating Income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of Consolidated Operating Income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash.

We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenues. We believe that the non-GAAP financial measures, which exclude the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, when considered together with our GAAP financial results and GAAP measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (Adjusted EPS), which are non-GAAP financial measures, as net income and earnings per diluted share (EPS), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes, gain or loss on sale of a business and the adjustment related to the adoption of the 2017 U.S. Tax Cuts and Jobs Act (2017 Tax Act). 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 non-GAAP financial measure, which excludes the effects of the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes, gain or loss on sale of a business and the adjustment related to the adoption of the 2017 Tax Act, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.

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

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Consolidated Statements of Comprehensive Income. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Safe Harbor Statement

This press release includes forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,”  “believes,”  “forecasts” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and estimates will be achieved, and the Company’s actual results may differ materially from our expectations, beliefs and estimates. Further, preliminary results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where services are performed, fluctuations in the price per share of our common stock, adverse financial, real estate or other market and general economic conditions, and other future events, which could impact each of our segments differently and could be outside of our control, the pace and timing of the consummation and integration of future acquisitions, the Company’s ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients, new laws and regulations, or changes thereto, including the 2017 Tax Act, and other risks described under the heading “Item 1A, Risk Factors” in the Company’s annual report on Form 10-K for the year ended December 31, 2017, filed with the SEC, including the risks set forth under “Risks Related to Our Reportable Segments” and “Risks Related to Our Operations,” the risks described under the heading "Part II, Item 1A, Risk Factors" in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC, and in the Company’s other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

      
  September 30, December 31,
  2018 2017
Assets (unaudited)  
Current assets     
Cash and cash equivalents  $505,867  $189,961 
Accounts receivable:     
   Billed receivables  477,408  390,996 
   Unbilled receivables  366,997  312,569 
   Allowances for doubtful accounts and unbilled services  (221,008) (180,687)
     Accounts receivable, net  623,397  522,878 
Current portion of notes receivable  31,318  25,691 
Prepaid expenses and other current assets  45,931  55,649 
   Total current assets  1,206,513  794,179 
Property and equipment, net  82,476  75,075 
Goodwill  1,175,929  1,204,803 
Other intangible assets, net  36,729  44,150 
Notes receivable, net  89,342  98,105 
Other assets  37,849  40,929 
       Total assets  $2,628,838  $2,257,241 
Liabilities and Stockholders' Equity     
Current liabilities     
Accounts payable, accrued expenses and other  $116,222  $94,873 
Accrued compensation  286,149  268,513 
Billings in excess of services provided  38,178  46,942 
Current portion of long-term debt, net  296,851   
   Total current liabilities  737,400  410,328 
Long-term debt, net  263,317  396,284 
Deferred income taxes  153,045  124,471 
Other liabilities  123,601  134,187 
       Total liabilities  1,277,363  1,065,270 
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 — 38,356 (2018) and 37,729 (2017)
  384  377 
Additional paid-in capital  315,720  266,035 
Retained earnings  1,173,003  1,045,774 
Accumulated other comprehensive loss  (137,632) (120,215)
     Total stockholders' equity  1,351,475  1,191,971 
       Total liabilities and stockholders' equity  $2,628,838  $2,257,241 


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

  Three Months Ended
September 30,
  
  2018 2017
     
  (unaudited)
Revenues $513,012  $448,962 
Operating expenses    
Direct cost of revenues 336,477  294,851 
Selling, general and administrative expenses 117,448  104,161 
Amortization of other intangible assets 1,975  2,882 
  455,900  401,894 
Operating income 57,112  47,068 
Other income (expense)    
Interest income and other 1,400  1,103 
Interest expense (7,246) (6,760)
Gain on sale of business 13,031   
  7,185  (5,657)
Income before income tax provision 64,297  41,411 
Income tax provision 19,964  9,197 
Net income $44,333  $32,214 
Earnings per common share ― basic $1.19  $0.86 
Weighted average common shares outstanding ― basic 37,318  37,431 
Earnings per common share ― diluted $1.14  $0.85 
Weighted average common shares outstanding ― diluted 38,756  37,746 
Other comprehensive income (loss), net of tax    
Foreign currency translation adjustments, net of tax expense of $373 and $0 $(4,180) $11,234 
Total other comprehensive income (loss), net of tax (4,180) 11,234 
Comprehensive income $40,153  $43,448 



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

  Nine Months Ended
September 30,
  
  2018 2017
  (unaudited)
Revenues $1,522,884  $1,340,021 
Operating expenses    
Direct cost of revenues 987,912  907,994 
Selling, general and administrative expenses 347,473  319,970 
Special charges   30,074 
Amortization of other intangible assets 6,297  7,797 
  1,341,682  1,265,835 
Operating income 181,202  74,186 
Other income (expense)    
Interest income and other 2,074  3,300 
Interest expense (20,073) (18,811)
Gain on sale of business 13,031   
  (4,968) (15,511)
Income before income tax provision 176,234  58,675 
Income tax provision 49,347  17,601 
Net income $126,887  $41,074 
Earnings per common share ― basic $3.43  $1.05 
Weighted average common shares outstanding ― basic 37,008  39,301 
Earnings per common share ― diluted $3.32  $1.03 
Weighted average common shares outstanding ― diluted 38,214  39,715 
Other comprehensive income (loss), net of tax    
Foreign currency translation adjustments, net of tax expense of $373 and $0 $(17,417) $28,778 
Total other comprehensive income (loss), net of tax (17,417) 28,778 
Comprehensive income $109,470  $69,852 


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

   Three Months Ended
September 30,
 Nine Months Ended
September 30,
   2018 2017 2018 2017
   (Unaudited) (Unaudited)
Net income  $44,333  $32,214  $126,887  $41,074 
Add back:         
Special charges        30,074 
Tax impact of special charges (1)    (832)   (9,935)
Remeasurement of acquisition-related contingent
  consideration
        702 
Tax impact of remeasurement of acquisition-
  related contingent consideration
        (269)
Non-cash interest expense on convertible notes  938    938   
Tax impact of non-cash interest expense on
  convertible notes
  (241)   (241)  
Gain on sale of business  (13,031)   (13,031)  
Tax impact of gain on sale of business  6,798    6,798   
Adjusted net income  $38,797  $31,382  $121,351  $61,646 
Earnings per common share — diluted  $1.14  $0.85  $3.32  $1.03 
Add back:         
Special charges        0.76 
Tax impact of special charges (1)    (0.02)   (0.25)
Remeasurement of acquisition-related contingent
  consideration
        0.02 
Tax impact of remeasurement of acquisition-
  related contingent consideration
        (0.01)
Non-cash interest expense on convertible notes  0.03    0.03   
Tax impact of non-cash interest expense on
  convertible notes
  (0.01)   (0.01)  
Gain on sale of business  (0.34)   (0.34)  
Tax impact of gain on sale of business  0.18    0.18   
Adjusted earnings per common share — diluted  $1.00  $0.83  $3.18  $1.55 
Weighted average number of common shares
  outstanding ― diluted
  38,756  37,746  38,214  39,715 

(1)       Tax impact of special charges during the three months ended September 30, 2017 represents the favorable impact of a reduction in foreign net operating losses and related valuation allowances.


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

   Year Ended December 31, 2018
   Low High
Guidance on estimated earnings per common share - diluted (GAAP) (1) $3.53  $3.73 
  Non-cash interest expense on convertible notes, net of tax  0.06  0.06 
  Gain on sale of business, net of tax  (0.16) (0.16)
  Loss on early extinguishment of debt, net of tax  0.17  0.17 
Guidance on estimated adjusted earnings per common share (Non-GAAP) (1) $3.60  $3.80 

(1)       The forward-looking guidance on estimated 2018 EPS and Adjusted EPS does not reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to the future impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and gain or loss on sale of a business, except for the actual charges taken during the nine months ended September 30, 2018, as these items are dependent on future events that are uncertain and difficult to predict.


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

Three Months Ended September 30, 2018
(unaudited)
 Corporate
Finance &
Restructuring
 Forensic and
Litigation
Consulting
 Economic
Consulting
 Technology Strategic
Communications
 Unallocated
Corporate
 Total
Net income             $44,333 
Interest income and other             (1,400)
Interest expense             7,246 
Gain on sale of business             (13,031)
Income tax provision             19,964 
Operating income $25,252  $20,625  $21,713  $7,926  $9,402  $(27,806) $57,112 
Depreciation and amortization 779  1,036  1,468  3,537  568  907  8,295 
Amortization of other intangible assets 767  309  57  10  832    1,975 
Adjusted EBITDA $26,798  $21,970  $23,238  $11,473  $10,802  $(26,899) $67,382 
               
Nine Months Ended September 30, 2018
(unaudited)
 Corporate
Finance &
Restructuring
 Forensic and
Litigation
Consulting
 Economic
Consulting
 Technology Strategic
Communications
 Unallocated
Corporate
 Total
Net income             $126,887 
Interest income and other             (2,074)
Interest expense             20,073 
Gain on sale of business             (13,031)
Income tax provision             49,347 
Operating income $92,504  $71,128  $53,385  $14,486  $27,275  $(77,576) $181,202 
Depreciation and amortization 2,534  3,195  4,209  10,141  1,747  2,722  24,548 
Amortization of other intangible assets 2,341  1,019  252  86  2,599    6,297 
Adjusted EBITDA $97,379  $75,342  $57,846  $24,713  $31,621  $(74,854) $212,047 
               
Three Months Ended September 30, 2017
(unaudited)
 Corporate
Finance &
Restructuring
 Forensic and
Litigation
Consulting
 Economic
Consulting
 Technology Strategic
Communications
 Unallocated
Corporate
 Total
Net income             $32,214 
Interest income and other             (1,103)
Interest expense             6,760 
Income tax provision             9,197 
Operating income $24,706  $21,127  $10,524  $3,002  $6,536  $(18,827) $47,068 
Depreciation and amortization 811  1,012  1,383  2,813  584  867  7,470 
Amortization of other intangible assets 1,217  400  154  158  953    2,882 
Adjusted EBITDA $26,734  $22,539  $12,061  $5,973  $8,073  $(17,960) $57,420 
               
Nine Months Ended September 30, 2017
(unaudited)
 Corporate
Finance &
Restructuring
 Forensic and
Litigation
Consulting
 Economic
Consulting
 Technology Strategic
Communications
 Unallocated
Corporate
 Total
Net income             $41,074 
Interest income and other             (3,300)
Interest expense             18,811 
Income tax provision             17,601 
Operating income $48,902  $34,234  $37,034  $5,874  $8,308  $(60,166) $74,186 
Depreciation and amortization 2,360  3,217  4,273  9,020  1,732  3,166  23,768 
Amortization of other intangible assets 2,796  1,196  463  477  2,865    7,797 
Special charges 3,049  10,445  5,910  3,827  3,599  3,244  30,074 
Remeasurement of acquisition-related
  contingent consideration
         702    702 
Adjusted EBITDA $57,107  $49,092  $47,680  $19,198  $17,206  $(53,756) $136,527 



FTI CONSULTING, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

  

Segment
Revenues
 Adjusted
EBITDA
 Adjusted
EBITDA

Margin
 Utilization  Average
Billable
Rate
 Revenue-
Generating
Headcount
  (in thousands)       (at period end)
Three Months Ended September 30, 2018
(unaudited)
           
Corporate Finance & Restructuring$135,418  $26,798  19.8% 65% $414  926 
Forensic and Litigation Consulting126,684  21,970  17.3% 63% $322  1,129 
Economic Consulting139,166  23,238  16.7% 71% $540  705 
Technology (1)56,692  11,473  20.2% N/M N/M 303 
Strategic Communications (1)55,052  10,802  19.6% N/M N/M 652 
 $513,012  $94,281  18.4%     3,715 
Unallocated Corporate  (26,899)        
Adjusted EBITDA  $67,382  13.1%      
            
Nine Months Ended September 30, 2018
(unaudited)
           
Corporate Finance & Restructuring$419,695  $97,379  23.2% 67% $425  926 
Forensic and Litigation Consulting388,250  75,342  19.4% 65% $325  1,129 
Economic Consulting405,583  57,846  14.3% 70% $515  705 
Technology (1)144,035  24,713  17.2% N/M N/M 303 
Strategic Communications (1)165,321  31,621  19.1% N/M N/M 652 
 $1,522,884  $286,901  18.8%     3,715 
Unallocated Corporate  (74,854)        
Adjusted EBITDA  $212,047  13.9%      
            
Three Months Ended September 30, 2017
(unaudited)
           
Corporate Finance & Restructuring$128,121  $26,734  20.9% 64% $390  934 
Forensic and Litigation Consulting118,639  22,539  19.0% 63% $326  1,080 
Economic Consulting111,753  12,061  10.8% 62% $520  688 
Technology (1)42,282  5,973  14.1% N/M N/M 291 
Strategic Communications (1)48,167  8,073  16.8% N/M N/M 626 
 $448,962  $75,380  16.8%     3,619 
Unallocated Corporate  (17,960)        
Adjusted EBITDA  $57,420  12.8%      
            
Nine Months Ended September 30, 2017
(unaudited)
           
Corporate Finance & Restructuring$351,509  $57,107  16.2% 61% $383  934 
Forensic and Litigation Consulting341,455  49,092  14.4% 61% $318  1,080 
Economic Consulting374,978  47,680  12.7% 68% $519  688 
Technology (1)133,935  19,198  14.3% N/M N/M 291 
Strategic Communications (1)138,144  17,206  12.5% N/M N/M 626 
 $1,340,021  $190,283  14.2%     3,619 
Unallocated Corporate  (53,756)        
Adjusted EBITDA  $136,527  10.2%      
            
            
N/M Not meaningful           
(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.


FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

  Nine Months Ended
September 30,
  
  2018 2017
     
  (unaudited)
Operating activities        
Net income $126,887  $41,074 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 24,548  23,768 
Amortization and impairment of other intangible assets 6,297  7,797 
Acquisition-related contingent consideration 355  1,547 
Provision for doubtful accounts 11,951  10,510 
Non-cash share-based compensation 12,219  12,888 
Gain on sale of business (13,031)  
Amortization of debt discount and issuance costs 2,604  1,489 
Other 751  297 
Changes in operating assets and liabilities, net of effects from acquisitions:    
     Accounts receivable, billed and unbilled (130,369) (72,640)
     Notes receivable 2,659  8,449 
     Prepaid expenses and other assets (174) 935 
     Accounts payable, accrued expenses and other 16,150  16,823 
     Income taxes 28,922  8,876 
     Accrued compensation 7,207  (34,123)
     Billings in excess of services provided (10,704) (3,657)
                  Net cash provided by operating activities 86,272  24,033 
Investing activities    
Proceeds from sale of business 50,283   
Payments for acquisition of businesses, net of cash received   (8,929)
Purchases of property and equipment (27,841) (20,021)
Other 741  74 
                  Net cash provided by (used in) investing activities 23,183  (28,876)
Financing activities    
Borrowings (repayments) under revolving line of credit, net (100,000) 95,000 
Proceeds from issuance of convertible notes 316,250   
Payments of debt issue costs  (8,048)  
Deposits 2,327  3,585 
Purchase and retirement of common stock (29,220) (155,285)
Net issuance of common stock under equity compensation plans 31,241  (2,354)
Payments for acquisition-related contingent consideration (3,029) (79)
                  Net cash provided by (used in) financing activities 209,521  (59,133)
Effect of exchange rate changes on cash and cash equivalents (3,070) 5,779 
Net increase (decrease) in cash and cash equivalents 315,906  (58,197)
Cash and cash equivalents, beginning of period 189,961  216,158 
Cash and cash equivalents, end of period $505,867  $157,961 
 

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

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