FTI Consulting Reports Fourth Quarter and Full Year 2012 Results
FTI Consulting Reports Fourth Quarter and Full Year 2012 Results
- Record Fourth Quarter Revenues of $399.3 Million
- Fourth Quarter Adjusted EPS of $0.67 (excluding goodwill impairment charge)
- Full Year Adjusted EPS of $2.30 (excluding goodwill impairment charge)
- 2013 Guidance for Revenues of $1.63 to $1.70 Billion and Diluted EPS of
$2.40 to $2.60
PR Newswire
WEST PALM BEACH, Fla., Feb. 28, 2013
WEST PALM BEACH, Fla., Feb. 28, 2013 /PRNewswire/ -- FTI Consulting, Inc.
(NYSE: FCN), the global business advisory firm dedicated to helping
organizations protect and enhance their enterprise value (the "Company"),
today released its financial results for the fourth quarter and full year
ended December 31, 2012.
For the quarter, revenues increased 2.2 percent to a fourth quarter record of
$399.3 million. On a GAAP basis, fully diluted loss per share was ($2.15) for
the quarter, including a non-cash goodwill impairment charge of $110.4 million
which reduced fully diluted EPS by $2.75 per share. The impairment charge has
no impact on the Company's liquidity, cash flow, borrowing capability or
operations. Adjusted earnings per share ("EPS") were $0.67, and Adjusted
EBITDA was $68.1 million, or 17.1 percent of revenues. Adjusted EPS, Adjusted
EBITDA and Adjusted Segment EBITDA are non-GAAP measures defined elsewhere in
this press release and are reconciled to GAAP measures in the financial tables
that accompany this press release.
Commenting on these results, Jack Dunn, FTI President and Chief Executive
Officer said, "Our fourth quarter results provide a promising foundation for
the launch of our 31^st year. We saw quarterly growth in three of our
businesses and enjoyed solid operating performance and strong cash flow.
December was the strongest cash collection month in our history and, coupled
with the successful refinancing of our long term debt, provides us with a
powerful balance sheet and financial position going forward."
"For 2013, we will continue our focus on organic growth and cash flow. We
will use our cash to continue our stock repurchase program and pursue tuck-in
acquisitions where we can enhance our industry expertise, service capability
or geographic scale. We see excellent prospects for our industry initiatives,
particularly in Telecommunications, Media and Technology; Energy; Healthcare;
Insurance; and Global Risk and Investigations. In Economic Consulting our
roster of potential merger and acquisition matters is approaching the highest
levels in firm history. If this is truly the harbinger of a revitalized M&A
market in 2013, nothing could be better across our entire firm."
Cash and Capital Management
Cash collections during the quarter were $461.0 million, including a record
$180.5 million in December, compared to revenues in the quarter of $399.3
million. Cash and cash equivalents were $156.8 million at December 31, 2012.
In the fourth quarter, the Company repurchased 923,379 shares of its common
stock for an aggregate amount of approximately $30 million or an average price
of $32.51 per share. This brought total stock repurchases under the Company's
June 2012 $250 million stock repurchase program to 1,681,029 shares for
approximately $50 million or an average price of $29.76 per share.
In the quarter, the Company completed a series of debt refinancing
transactions which increased access to capital and extended debt maturities at
lower interest rates. In July the Company also retired its 3^ 3/[4]%
convertible senior subordinated notes using $73.9 million of internally
generated funds reducing total outstanding debt by that amount as of December
31, 2012. At December 31, 2012 the Company had no borrowings outstanding
under its $350 million senior secured bank credit facility.
Fourth Quarter Segment Results
Corporate Finance/Restructuring
Revenues in the Corporate Finance/Restructuring segment increased 13.7 percent
to $123.2 million from $108.4 million last year. Revenues were driven by
strong results in North America including improved realization on certain
client matters, higher success fees and revenue increases from the Asia
Pacific region, largely resulting from the acquisition of an Australian
restructuring business. Adjusted Segment EBITDA was $28.0 million, or 22.7
percent of segment revenues, compared with $38.5 million, or 35.5 percent of
segment revenues, in the prior year quarter. Adjusted Segment EBITDA for the
quarter was reduced by a one-time transfer tax payment of $2.4 million related
to the acquisition of the Australian restructuring business in 2012. Adjusted
Segment EBITDA in the prior year quarter included a revaluation gain of $9.0
million as compared to $1.4 million in the current year quarter. Excluding
revaluation gains and the $2.4 million transfer tax, Adjusted Segment EBITDA
was $29.0 million compared to $29.4 million in the prior year quarter.
Economic Consulting
Revenues in the Economic Consulting segment increased 6.9 percent to $95.7
million from $89.6 million in the prior year quarter. Revenues were driven by
strong activity in merger/acquisition reviews, antitrust litigation, financial
economics, international arbitration and regulatory consulting engagements
particularly in the energy, telecommunications and transportation industries.
Adjusted Segment EBITDA was $21.5 million, or 22.4 percent of segment
revenues, compared to $16.4 million, or 18.3 percent of segment revenues, in
the prior year quarter reflecting operating leverage from higher demand and
better realization coupled with lower variable compensation costs.
Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased 8.2
percent to $82.6 million from $90.0 million in the prior year quarter. The
segment's global risk and investigations practice in Latin America continued
to grow, while the North America region continued to face challenging markets.
Adjusted Segment EBITDA was $9.8 million in the quarter, or 11.9 percent of
segment revenues, compared to $16.1 million, or 17.9 percent of segment
revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA
margin was primarily due to reduced revenues coupled with a ramp up in hiring
in the back half of the year for our Governance, Risk and Compliance;
Construction Solutions; and Global Risk and Investigations initiatives.
Technology
Revenues in the Technology segment decreased 11.3 percent to $47.6 million
from $53.6 million in the prior year quarter due to the winding down of
certain large investigation and litigation related matters and lower pricing
due to competitive factors and business mix. Adjusted Segment EBITDA was $15.5
million or 32.5 percent of segment revenues, compared to $18.6 million, or
34.8 percent of segment revenues, in the prior year quarter. The decrease in
Adjusted Segment EBITDA margin reflected the impact of lower revenues,
partially offset by lower research and development costs.
Strategic Communications
Revenues in the Strategic Communications segment increased 2.2 percent to
$50.3 million from $49.2 million in the prior year quarter. Adjusted Segment
EBITDA was $8.7 million, or 17.4 percent of segment revenues, compared to $7.5
million, or 15.3 percent of segment revenues in the prior year quarter. Among
areas of growth were matters involving shareholder activism and the beginnings
of capital markets activity. In addition, the segment's expertise has proved a
catalyst for our industry initiatives in energy, life sciences and government
affairs. The goodwill impairment charge of $110.4 million noted above is
related to prior investments made in this segment.
2013 Guidance
Based on current market conditions and the factors described above, the
Company estimates that revenues for 2013 will be between $1.63 billion and
$1.70 billion and diluted Adjusted EPS will be between $2.40 and $2.60. This
guidance assumes no acquisitions.
Fourth Quarter Conference Call
FTI Consulting will hold a conference call for analysts and investors to
discuss fourth quarter financial results at 9:00 AM Eastern Time on February
28, 2013. 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 protect and enhance enterprise value in an increasingly complex
legal, regulatory and economic environment. With 3,915 employees located in 24
countries, FTI Consulting professionals work closely with clients to
anticipate, illuminate and overcome complex business challenges in areas such
as investigations, litigation, mergers and acquisitions, regulatory issues,
reputation management, strategic communications and restructuring. The Company
generated $1.58 billion in revenues during fiscal year 2012. More information
can be found at www.fticonsulting.com.
Use of Non-GAAP Measures
Note: We define Adjusted EBITDA as net income before income tax provision,
other income (expense), depreciation, amortization of intangible assets,
goodwill impairment charge and special charges. We define Adjusted Segment
EBITDA as a segment's share of consolidated operating income before
depreciation, amortization of intangible assets, goodwill impairment charge
and special charges. We define Adjusted Net Income and Adjusted EPS as net
income and earnings per diluted share, respectively, excluding the net impact
of any goodwill impairment charge, any special charges and any loss on early
extinguishment of debt that were incurred in that period. Adjusted EBITDA,
Adjusted Segment EBITDA, Adjusted EPS and Adjusted Net Income are not defined
in the same manner by all companies and may not be comparable to other
similarly titled measures of other companies. These non-GAAP measures should
be considered in addition to, but not as a substitute for or superior to, the
information contained in our Condensed Consolidated Statements of
Comprehensive Income (Loss). We believe that these measures can be useful
operating performance measures for evaluating our results of operations as
compared from period-to-period and as compared to our competitors. EBITDA is a
common alternative measure of operating performance used by investors,
financial analysts and rating agencies to value and compare the financial
performance of companies in our industry. We use Adjusted EBITDA and Adjusted
Segment EBITDA to evaluate and compare the operating performance of our
segments. Reconciliations of GAAP to Non-GAAP financial measures are included
in the accompanying tables to this press release.
Safe Harbor Statement
This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which involve uncertainties and
risks. Forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future revenues, future results
and performance, expectations, plans or intentions relating to acquisitions
and other matters, business trends and other information that is not
historical, including statements regarding estimates of our future financial
results. When used in this press release, words such as "estimates,"
"expects," "anticipates," "projects," "plans," "intends," "believes,"
"forecasts" and variations of such words or similar expressions are intended
to identify forward-looking statements. All forward-looking statements,
including, without limitation, estimates of our future financial results, are
based upon our expectations at the time we make them and various assumptions.
Our expectations, beliefs and projections are expressed in good faith, and we
believe there is a reasonable basis for them. However, there can be no
assurance that management's expectations, beliefs and estimates will be
achieved, and the Company's actual results may differ from our expectations,
beliefs and estimates. Further, preliminary results are subject to normal
year-end adjustments. The Company has experienced fluctuating revenues,
operating income and cash flow in prior periods and expects that this will
occur from time to time in the future. Other factors that could cause such
differences include declines in demand for, or changes in, the mix of services
and products that we offer, the mix of the geographic locations where our
clients are located or where services are performed, adverse financial, real
estate or other market and general economic conditions, which could impact
each of our segments differently, the pace and timing of the consummation and
integration of past and future acquisitions, the Company's ability to realize
cost savings and efficiencies, competitive and general economic conditions,
retention of staff and clients and other risks described under the heading
"Item 1A Risk Factors" in the Company's most recent Form 10-K and in the
Company's other filings with the Securities and Exchange Commission, including
the risks set forth under "Risks Related to Our Operating 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.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2012 AND 2011
(in thousands, except per share data)
(unaudited)
Year Ended
December 31,
2012 2011
Revenues $ $
1,576,871 1,566,768
Operating expenses
Direct cost of revenues 980,532 956,908
Selling, general and administrative 378,016 373,295
expense
Special charges 29,557 15,212
Acquisition-related contingent (3,064) (6,465)
consideration
Amortization of other intangible assets 22,407 22,371
Goodwill impairment charge 110,387 -
1,517,835 1,361,321
Operating income 59,036 205,447
Other income (expense)
Interest income and other 5,659 6,304
Interest expense (56,731) (58,624)
Loss on early extinguishment of debt (4,850) -
(55,922) (52,320)
Income before income tax provision 3,114 153,127
Income tax provision 40,100 49,224
Net income (loss) $ $
(36,986) 103,903
Earnings (loss) per common share - $ $
basic (0.92) 2.53
Weighted average common shares 40,316 41,131
outstanding - basic
Earnings (loss) per common share - $ $
diluted (0.92) 2.39
Weighted average common shares 40,316 43,473
outstanding - diluted
Other comprehensive income (loss), net
of tax:
Foreign currency translation
adjustments, including tax expense
(benefit) of $654 and ($1,568) in $ $
2012 and 2011, respectively 15,023 (2,902)
Other comprehensive income (loss), net 15,023 (2,902)
of tax
Comprehensive income (loss) $ $
(21,963) 101,001
FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(in thousands, except per share data)
(unaudited)
Three Months Ended
December 31,
2012 2011
Revenues $ $
399,345 390,713
Operating expenses
Direct cost of revenues 245,080 233,005
Selling, general and administrative 94,058 92,932
expense
Special charges - -
Acquisition-related contingent (483) (9,004)
consideration
Amortization of other intangible assets 5,634 5,576
Goodwill impairment charge 110,387 -
454,676 322,509
Operating income (loss) (55,331) 68,204
Other income (expense)
Interest income and other 1,156 895
Interest expense (13,124) (14,495)
Loss on early extinguishment of debt (4,850) -
(16,818) (13,600)
Income (loss) before income tax (72,149) 54,604
provision
Income tax provision 13,728 14,723
Net income (loss) $ $
(85,877) 39,881
Earnings (loss) per common share - $ $
basic (2.15) 1.00
Weighted average common shares 39,913 39,932
outstanding - basic
Earnings (loss) per common share - $ $
diluted (2.15) 0.93
Weighted average common shares 39,913 42,857
outstanding - diluted
Other comprehensive income (loss), net
of tax:
Foreign currency translation
adjustments, including tax expense
of $654 and $0 in 2012 and 2011, $ $
respectively 403 (3,684)
Other comprehensive income (loss), net 403 (3,684)
of tax
Comprehensive income (loss) $ $
(85,474) 36,197
FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
Revenue-
Average
Adjusted Billable Generating
Revenues EBITDA Margin Utilization Rate Headcount
^(1)
(in thousands)
Three Months Ended
December 31, 2012
$ $
Corporate 22.7% 64% $ 836
Finance/Restructuring 123,200 465
27,963
Forensic and $
Litigation 82,570 9,827 11.9% 67% 402 813
Consulting
Economic Consulting 95,740 21,459 22.4% 80% $ 474
489
Technology ^(2) 47,551 15,464 32.5% N/M N/M 277
Strategic 50,284 8,742 17.4% N/M N/M 593
Communications^ (2)
$
83,455 20.9% 2,993
399,345
Corporate (15,321)
$
Adjusted EBITDA^(1) 17.1%
68,134
Year Ended December
31, 2012
$ $
Corporate 23.7% 71% $ 836
Finance/Restructuring 459,231 416
108,966
Forensic and $
Litigation 343,074 52,743 15.4% 68% 370 813
Consulting
Economic Consulting 391,622 77,461 19.8% 81% $ 474
493
Technology ^(2) 195,194 57,203 29.3% N/M N/M 277
Strategic 187,750 25,019 13.3% N/M N/M 593
Communications^ (2)
$
321,392 20.4% 2,993
1,576,871
Corporate (70,401)
$
Adjusted EBITDA^(1) 15.9%
250,991
Three Months Ended
December 31, 2011
$ $
Corporate 35.5% 72% $ 692
Finance/Restructuring 108,352 438
38,466
Forensic and 89,981 16,134 17.9% 68% $ 852
Litigation Consulting 325
Economic Consulting 89,580 16,394 18.3% 83% $ 433
472
Technology ^(2) 53,601 18,649 34.8% N/M N/M 290
Strategic 49,199 7,532 15.3% N/M N/M 582
Communications^ (2)
$
97,175 24.9% 2,849
390,713
Corporate (16,320)
$
Adjusted EBITDA^(1) 20.7%
80,855
Year Ended December
31, 2011
$ $
Corporate 22.8% 70% $ 692
Finance/Restructuring 427,813 427
97,638
Forensic and 365,326 69,180 18.9% 69% $ 852
Litigation Consulting 330
Economic Consulting 353,981 67,028 18.9% 85% $ 433
482
Technology ^(2) 218,738 77,011 35.2% N/M N/M 290
Strategic 200,910 26,801 13.3% N/M N/M 582
Communications^ (2)
$
337,658 21.6% 2,849
1,566,768
Corporate (66,046)
$
Adjusted EBITDA^(1) 17.3%
271,612
^(1) We define Adjusted EBITDA as net income before income tax provision,
other income (expense), depreciation, amortization of intangible assets,
special charges and goodwill impairment charge. Amounts presented in the
Adjusted EBITDA column for each segment reflect the segments' respective
Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as the segments'
share of consolidated operating income before depreciation, amortization of
intangible assets, special charges and goodwill impairment charge. Although
Adjusted EBITDA and Adjusted Segment EBITDA are not measures of financial
condition or performance determined in accordance with generally accepted
accounting principles ("GAAP"), we believe that these measures can be a useful
operating performance measure for evaluating our results of operations as
compared from period to period and as compared to our competitors.
Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner
by all companies and may not be comparable to other similarly titled measures
of other companies. These non-GAAP measures should be considered in addition
to, but not as a substitute for or superior to, the information contained in
our Condensed Consolidated Statements of Comprehensive Income. See also our
reconciliation of non-GAAP financial 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.
FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012 AND 2011
(unaudited)
Three Months Ended Year Ended December
December 31, 31,
2012 2011 2012 2011
$ $ $ $
Net income (loss) (85,877) (36,986) 103,903
39,881
Add back:
Special charges, net of tax - - 19,115 9,285
effect ^(1)
Goodwill impairment charge^(2) 110,387 110,387 -
Loss on early extinguishment 2,910 - 2,910 -
of debt, net of tax^(3)
$ $ $ $
Adjusted Net Income 27,420 95,426 113,188
39,881
Earnings (loss) per common $ $ $ $
share – diluted (2.15)
0.93 (0.92) 2.39
Add back:
Special charges, net of tax - - 0.47 0.21
effect ^(1)
Goodwill impairment charge^(2) 2.77 - 2.74 -
Loss on early extinguishment 0.07 - 0.07 -
of debt, net of tax^(3)
Impact of denominator for
diluted adjusted earnings per (0.02) - (0.06) -
common share ^(4)
Adjusted earnings per common $ $ $ $
share – diluted 0.67
0.93 2.30 2.60
Weighted average number of
common shares outstanding – 40,990 42,857 41,578 43,473
diluted^(4)
^(1) The tax effect takes into account the tax treatment and related tax
rate(s) that apply to each adjustment in the applicable tax jurisdiction(s).
As a result, the effective tax rates for the adjustments for the years ended
December 31, 2012 and 2011 were 35.3% and 39.0%, respectively. The tax expense
related to the adjustments for the years ended December 31, 2012 and 2011 were
$10.4 million or $0.26 impact on adjusted earnings per diluted share and $5.9
million or $0.14 impact on diluted earnings per share, respectively.
^(2)The goodwill impairment charge is non-deductible for income tax purposes
and resulted in no tax benefit for the year ended December 31, 2012.
^(3) The tax effect takes into account the tax treatment and related tax
rate(s) that apply to each adjustment in the applicable tax jurisdiction(s).
As a result, the effective tax rate for the adjustments for the three months
and year ended December 31, 2012 were 40.0%. The tax expense related to the
adjustments for the three months and year ended December 31, 2012 was $1.9
million or $0.05 impact on adjusted earnings per diluted share.
^(4) For the three months and year ended December 31, 2012, the Company
reported a net loss. For such periods, the basic weighted average common
shares outstanding equals the diluted weighted average common shares
outstanding for purposes of calculating U.S. GAAP earnings per share because
potentially dilutive securities would be antidilutive. For non-GAAP purposes,
the per share and share amounts presented herein reflect the impact of the
inclusion of share-based awards and convertible notes that are considered
dilutive based on the impact of the add backs included in Adjusted Net Income
above.
RECONCILIATION OF NET INCOME (LOSS) AND OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(in thousands)
Three Months Corporate Forensic Strategic
Ended December Finance / and Economic Technology^ Communi- Corp HQ Total
31, 2012 Restructuring Litigation Consulting cations
Consulting
$
Net income (loss)
(85,877)
Interest
income and (1,156)
other
Interest 13,124
expense
Income tax 13,728
provision
Loss on early
extinguishment 4,850
of debt
Operating income $ $ $ $ $ $ $
(loss) 25,482 20,311 10,239 (103,459)
8,449 (16,353) (55,331)
Depreciation
and 896 903 732 3,239 642 1,032 7,444
amortization
Amortization
of other 1,585 475 416 1,986 1,172 - 5,634
intangible
assets
Special - - - - - - -
charges
Goodwill
impairment - - - - 110,387 - 110,387
charge
Adjusted EBITDA $ $ $ $ $ $ $
^(1) 27,963 21,459 15,464
9,827 8,742 (15,321) 68,134
Year Ended
December 31,
2012
Net income $
(loss)
(36,986)
Interest
income and (5,659)
other
Interest 56,731
expense
Income tax 40,100
provision
Loss on early
extinguishment 4,850
of debt
Operating income $ $ $ $ $ $
(loss) 87,367 39,412 71,992 33,642 59,036
(97,298) (76,079)
Depreciation
and 3,424 3,715 2,863 12,501 2,555 4,546 29,604
amortization
Amortization
of other 6,239 1,944 1,615 7,946 4,663 - 22,407
intangible
assets
Special 11,936 7,672 991 3,114 4,712 1,132 29,557
charges
Goodwill
impairment - 110,387 110,387
charge
Adjusted EBITDA 108,966 52,743 77,461 57,203 25,019 (70,401) 250,991
^(1)
Three Months
Ended December
31, 2011
$
Net income
39,881
Interest
income and (895)
other
Interest 14,495
expense
Income tax 14,723
provision
Loss on early
extinguishment -
of debt
Operating $ $ $ $ $ $
income 36,153 14,723 15,326 13,891 68,204
5,615 (17,504)
Depreciation
and 863 844 669 2,761 754 1,184 7,075
amortization
Amortization
of other 1,450 567 399 1,997 1,163 - 5,576
intangible
assets
Special - - - - - - -
charges
Goodwill
impairment - - - - - - -
charge
Adjusted EBITDA 38,466 16,134 16,394 18,649 7,532 (16,320) 80,855
^(1)
Year Ended
December 31, 2011
$
Net income
103,903
Interest
income and (6,304)
other
Interest 58,624
expense
Income tax 49,224
provision
Loss on early
extinguishment -
of debt
Operating $ $ $ $ $ $
income 78,923 62,499 60,890 57,917 205,447
19,066 (73,848)
Depreciation
and 3,480 3,423 2,552 11,168 2,997 4,962 28,582
amortization
Amortization
of other 5,795 2,419 1,493 7,926 4,738 - 22,371
intangible
assets
Special 9,440 839 2,093 - - 2,840 15,212
charges
Goodwill
impairment - - - - - - -
charge
Adjusted EBITDA 97,638 69,180 67,028 77,011 26,801 (66,046) 271,612
^(1)
(1) We define Adjusted EBITDA as net income before income tax provision, other
income (expense), depreciation, amortization of intangible asset, special
charge, loss on extinguishment of debt and goodwill impairment charge.
Amounts presented in the Adjusted EBITDA column for each segment reflect the
segments' respective Adjusted Segment EBITDA. We define Adjusted Segment
EBITDA as the segments' share of consolidated operating income before
depreciation, amortization of intangible assets, special charge and goodwill
impairment charge. Although Adjusted EBITDA and Adjusted Segment EBITDA are
not measures of financial condition or performance determined in accordance
with generally accepted accounting principles ("GAAP"), we believe that these
measures can be a useful operating performance measure for evaluating our
results of operations as compared from period to period and as compared to our
competitors.
Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner
by all companies and may not be comparable to other similarly titled measures
of other companies. These non-GAAP measures should be considered in addition
to, but not as a substitute for or superior to, the information contained in
our Condensed Consolidated Statements of Comprehensive Income .
FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2012 AND 2011
(in thousands)
(unaudited)
Year Ended
December 31,
2012 2011
Operating activities
Net income (loss) $ $
(36,986) 103,903
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 33,919 28,582
Amortization and impairment of other intangible 22,586 22,371
assets
Goodwill impairment charge 110,387 -
Acquisition-related contingent consideration (3,064) (6,465)
Provision for doubtful accounts 14,179 12,586
Non-cash share-based compensation 29,361 37,352
Excess tax benefits from share-based compensation (515) (1,597)
Non-cash interest expense and loss on 9,824 8,439
extinguishment of debt
Other 27 (471)
Changes in operating assets and liabilities, net
of effects from acquisitions:
Accounts receivable, billed and unbilled (3,691) (94,178)
Notes receivable (25,730) (3,781)
Prepaid expenses and other assets (1,895) 3,933
Accounts payable, accrued expenses and other (12,458) 11,472
Income taxes (6,816) 22,227
Accrued compensation (21,074) 38,073
Billings in excess of services provided 12,134 (8,618)
Net cash provided by 120,188 173,828
operating activities
Investing activities
Payments for acquisition of businesses, net of (62,893) (62,346)
cash received
Purchases of property and equipment (27,759) (31,091)
Other 246 (211)
Net cash used in (90,406) (93,648)
investing activities
Financing activities
Borrowings under revolving line of credit 75,000 25,000
Payments of revolving line of credit (75,000) (25,000)
Payments of long-term debt and capital lease (377,859) (6,994)
obligations
Issuance of debt securities, net 292,608 -
Payments of debt financing fees (2,848) -
Cash received for settlement of interest rate - 5,596
swaps
Purchase and retirement of common stock (50,032) (209,400)
Net issuance of common stock under equity 1,598 11,109
compensation plans
Excess tax benefit from share-based compensation 515 1,597
Other (2,228) (637)
Net cash used in (138,246) (198,729)
financing activities
Effect of exchange rate changes on cash and cash 826 (1,598)
equivalents
Net decrease in cash and cash equivalents (107,638) (120,147)
Cash and cash equivalents, beginning of period 264,423 384,570
Cash and cash equivalents, end of period $ 156,785 $
264,423
FTI CONSULTING, INC.
CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2012 AND DECEMBER 31, 2011
(in thousands, except per share amounts)
December 31, December 31,
2012 2011
Assets
Current assets
Cash and cash equivalents $ 156,785 $ 264,423
Restricted cash 1,190 10,213
Accounts receivable:
Billed receivables 314,491 335,758
Unbilled receivables 208,797 173,440
Allowance for doubtful accounts (94,048) (80,096)
and unbilled services
Accounts receivable, net 429,240 429,102
Current portion of notes receivable 33,194 26,687
Prepaid expenses and other current 50,351 40,529
assets
Current portion of deferred tax 3,615 -
assets
Total current assets 674,375 770,954
Property and equipment, net of 68,192 74,448
accumulated depreciation
Goodwill 1,260,035 1,309,358
Other intangible assets, net of 104,181 118,889
amortization
Notes receivable, net of current 101,623 81,748
portion
Other assets 67,046 55,687
Total assets $ 2,275,452 $ 2,411,084
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses $ 98,109 $ 132,773
and other
Accrued compensation 168,392 180,366
Current portion of long-term debt and 6,021 153,381
capital lease obligations
Billings in excess of services 31,675 19,063
provided
Deferred income taxes - 12,254
Total current liabilities 304,197 497,837
Long-term debt and capital lease 717,024 643,579
obligations, net of current portion
Deferred income taxes 105,751 88,071
Other liabilities 80,248 75,395
Total liabilities 1,207,220 1,304,882
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 408 415
outstanding ―40,775 (2012) and
41,484 (2011)
Additional paid-in capital 367,978 383,978
Retained earnings 741,215 778,201
Accumulated other comprehensive loss (41,369) (56,392)
Total stockholders' equity 1,068,232 1,106,202
Total liabilities and stockholders' $ 2,275,452 $ 2,411,084
equity
SOURCE FTI Consulting, Inc.
Website: http://www.fticonsulting.com
Contact: Investor & Media Contact: Mollie Hawkes, +1-617-747-1791,
mollie.hawkes@fticonsulting.com
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