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Published: 2023-02-24 00:00:00 ET
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Exhibit 99.1

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

FTI Consulting Reports Fourth Quarter and Full Year 2022 Financial Results

 

   

Fourth Quarter 2022 Revenues of $774.4 Million, Up 15% Compared to $676.2 Million in Prior Year Quarter; Excluding Estimated Negative Impact of FX, Fourth Quarter 2022 Revenues Up 18% Compared to Prior Year Quarter

 

   

Fourth Quarter 2022 EPS of $1.33 Compared to $1.07 in Prior Year Quarter; Fourth Quarter 2022 Adjusted EPS of $1.52 Compared to $1.13 in Prior Year Quarter

 

   

Full Year 2022 Revenues of $3.029 Billion, Up 9% Compared to $2.776 Billion in Prior Year; Excluding Estimated Negative Impact of FX, Full Year 2022 Revenues Increased 12% Compared to Prior Year

 

   

Full Year 2022 EPS of $6.58 Compared to $6.65 in Prior Year; Full Year 2022 Adjusted EPS of $6.77 Compared to $6.76 in Prior Year

 

   

Introduces 2023 Guidance

Washington, D.C., February 23, 2023 — FTI Consulting, Inc. (NYSE: FCN) today released financial results for the full year and fourth quarter ended December 31, 2022.

For the full year 2022, revenues of $3.029 billion increased $252.7 million, or 9.1%, compared to revenues of $2.776 billion in the prior year. Excluding the estimated negative impact from foreign currency translation (“FX”), revenues increased $339.8 million, or 12.2%, compared to the prior year. The increase in revenues was primarily due to higher demand in the Corporate Finance & Restructuring, Forensic and Litigation Consulting, Technology and Strategic Communications business segments. Net income of $235.5 million compared to $235.0 million in the prior year. The increase in net income was primarily due to higher revenues, which was largely offset by higher compensation, including the impact of a 12.3% increase in billable headcount, and a 19.2% increase in selling, general and administrative (“SG&A”) expenses compared to the prior year. In full year 2022, there was an $8.3 million special charge recorded in the fourth quarter related to severance and other employee-related costs. Adjusted EBITDA, which excludes the special charge, of $357.6 million, or 11.8% of revenues, compared to $354.0 million, or 12.8% of revenues, in the prior year period.

Full year 2022 earnings per diluted share (“EPS”) of $6.58 compared to $6.65 in the prior year. Full year 2022 EPS included the $8.3 million special charge, which reduced EPS by $0.19. Full year 2021 EPS included $9.6 million of non-cash interest expense related to the Company’s 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”), which reduced EPS by $0.20, and $3.1 million in fair value remeasurement of acquisition-related contingent consideration, which increased EPS by $0.09. Full year 2022 Adjusted EPS of $6.77 compared to Adjusted EPS of $6.76 in the prior year.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “We are pleased that in 2022, we once again reported record revenues, Adjusted EBITDA and Adjusted EPS. That strength and durability, to me, are consequences of our teams’ commitment to invest behind our people and positions, independent of market conditions, a commitment which has allowed us to increasingly serve our clients as they face their most significant opportunities and challenges.”


Cash Position and Capital Allocation

Net cash provided by operating activities of $188.8 million for the year ended December 31, 2022 compared to $355.5 million for the year ended December 31, 2021. The year-over-year decrease in net cash provided by operating activities was largely due to higher compensation, operating expenses and income taxes paid, which was partially offset by an increase in cash collected.

Cash and cash equivalents of $491.7 million at December 31, 2022 compared to $494.5 million at December 31, 2021 and $327.0 million at September 30, 2022. Total debt, net of cash, of ($175.5) million at December 31, 2022 compared to ($178.2) million at December 31, 2021 and ($10.8) million at September 30, 2022. The sequential decrease in total debt, net of cash, was primarily due to an increase in cash provided by operating activities, which was partially offset by share repurchases.

On December 1, 2022, FTI Consulting’s Board of Directors authorized the additional amount of $400.0 million to repurchase its outstanding shares of common stock under its stock repurchase program. During the quarter ended December 31, 2022, the Company repurchased 425,016 shares of its common stock at an average price per share of $153.09 for a total cost of $65.1 million. In full year 2022, the Company repurchased 574,418 shares of its common stock at an average price per share of $154.23 for a total cost of $88.6 million. As of December 31, 2022, approximately $478.5 million remained available for common stock repurchases under the Company’s stock repurchase program.

Fourth Quarter 2022 Results

Fourth quarter 2022 revenues of $774.4 million increased $98.2 million, or 14.5%, compared to revenues of $676.2 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $124.3 million, or 18.4%, compared to the prior year quarter. Acquisition-related revenues contributed $3.5 million during the quarter. The increase in revenues was primarily due to higher demand across the Corporate Finance & Restructuring, Forensic and Litigation Consulting and Technology segments. Net income of $47.5 million compared to $38.2 million in the prior year quarter. The increase in net income was primarily due to higher revenues, which was partially offset by an increase in compensation, including the impact of a 12.3% increase in billable headcount, higher SG&A expenses, the aforementioned $8.3 million special charge, an increase in FX remeasurement losses and a higher effective tax rate compared to the prior year quarter. Adjusted EBITDA, which excludes the special charge, of $92.0 million, or 11.9% of revenues, compared to $62.0 million, or 9.2% of revenues, in the prior year quarter.

Fourth quarter 2022 EPS of $1.33 compared to $1.07 in the prior year quarter. Fourth quarter 2022 EPS included the $8.3 million special charge, which decreased EPS by $0.19. Fourth quarter 2021 EPS included $2.4 million of non-cash interest expense related to the Company’s 2023 Convertible Notes, which decreased EPS by $0.06. Fourth quarter 2022 Adjusted EPS of $1.52, which excludes the special charge, compared to Adjusted EPS of $1.13 in the prior year quarter. Fourth quarter 2021 Adjusted EPS excluded the non-cash interest expense related to the Company’s 2023 Convertible Notes.


Fourth Quarter 2022 Segment Results

Corporate Finance & Restructuring

Revenues in the Corporate Finance & Restructuring segment increased $61.3 million, or 26.5%, to $292.8 million in the quarter, compared to $231.5 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $68.4 million, or 29.5%, compared to the prior year quarter. Acquisition-related revenues contributed $3.5 million in the quarter. The increase in revenues was due to higher demand for restructuring and business transformation services. Adjusted Segment EBITDA of $52.4 million, or 17.9% of segment revenues, compared to $22.2 million, or 9.6% 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 compensation, which includes the impact of a 14.3% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased $22.4 million, or 16.2%, to $160.4 million in the quarter, compared to $138.0 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $25.9 million, or 18.8%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for investigations, data & analytics and health solutions services. Adjusted Segment EBITDA of $13.8 million, or 8.6% of segment revenues, compared to $8.5 million, or 6.2% 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 compensation, which includes the impact of a 5.9% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Economic Consulting

Revenues in the Economic Consulting segment decreased $0.3 million, or 0.2%, to $172.0 million in the quarter, compared to $172.3 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $8.4 million, or 4.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher realization for merger and acquisition (“M&A”)-related antitrust and international arbitration services, which was partially offset by lower demand for financial economics services compared to the prior year quarter. Adjusted Segment EBITDA of $27.3 million, or 15.9% of segment revenues, compared to $30.0 million, or 17.4% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher SG&A expenses compared to the prior year quarter.

Technology

Revenues in the Technology segment increased $12.2 million, or 18.9%, to $76.8 million in the quarter, compared to $64.6 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $14.4 million, or 22.2%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and M&A-related “second request” services. Adjusted Segment EBITDA of $11.8 million, or 15.3% of segment revenues, compared to $7.8 million, or 12.1% 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 compensation, which includes the impact of an 18.8% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Strategic Communications

Revenues in the Strategic Communications segment increased $2.6 million, or 3.7%, to $72.4 million in the quarter, compared to $69.9 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $7.3 million, or 10.4%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for public affairs and financial communications services. Adjusted Segment EBITDA of $10.5 million, or 14.5% of segment revenues, compared to $14.9 million, or 21.4% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher compensation, which includes the impact of a 19.2% increase in billable headcount, and an increase in SG&A expenses compared to the prior year quarter.


2023 Guidance

The Company estimates that revenues for full year 2023 will range between $3.330 billion and $3.470 billion. The Company estimates that EPS for full year 2023 will range between $6.80 and $7.70. The Company does not currently expect Adjusted EPS to differ from EPS.

Fourth Quarter and Full Year 2022 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2022 financial results at 9:00 a.m. Eastern Time on Thursday, February 23, 2023. 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 7,600 employees located in 31 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 $3.0 billion in revenues during fiscal year 2022. More information can be found at www.fticonsulting.com.

Non-GAAP Financial 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 in the United States (“GAAP”). Certain of these financial measures are considered not in conformity with GAAP (“non-GAAP financial measures”) under the United States Securities and Exchange Commission (“SEC”) rules. Specifically, we have referred to the following non-GAAP financial 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, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures presented in this press 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, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that these 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. 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 non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and 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 and the gain or loss on sale of a business. 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 these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow, which is a non-GAAP financial measure, 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 Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these 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 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, initiatives, projections, prospects, policies and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new or changes to laws and regulations, including U.S. and foreign tax laws, environmental, social and governance (“ESG”)-related issues, climate change-related matters, scientific and technological developments, 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,” “commits,” “aspires,” “forecasts,” “future,” “goal,” “seeks” 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 plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. Further, unaudited quarterly 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; the impact of the COVID-19 pandemic and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business 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; 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, 2022 filed with the SEC on February 23, 2023 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.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

 

     December 31,     December 31,  
     2022     2021  

Assets

    

Current assets

    

Cash and cash equivalents

   $ 491,688     $ 494,485  

Accounts receivable, net

     896,153       754,120  

Current portion of notes receivable

     27,292       30,256  

Prepaid expenses and other current assets

     95,469       91,166  
  

 

 

   

 

 

 

Total current assets

     1,510,602       1,370,027  

Property and equipment, net

     153,466       142,163  

Operating lease assets

     203,764       215,995  

Goodwill

     1,227,593       1,232,791  

Intangible assets, net

     25,514       31,990  

Notes receivable, net

     55,978       53,539  

Other assets

     64,490       54,404  
  

 

 

   

 

 

 

Total assets

   $ 3,241,407     $ 3,100,909  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Accounts payable, accrued expenses and other

   $ 173,953     $ 165,025  

Accrued compensation

     541,892       507,556  

Billings in excess of services provided

     53,646       45,535  
  

 

 

   

 

 

 

Total current liabilities

     769,491       718,116  

Long-term debt, net

     315,172       297,158  

Noncurrent operating lease liabilities

     221,604       236,026  

Deferred income taxes

     162,374       170,612  

Other liabilities

     91,045       95,676  
  

 

 

   

 

 

 

Total liabilities

     1,559,686       1,517,588  
  

 

 

   

 

 

 

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 — 34,026 (2022) and 34,333 (2021)

     340       343  

Additional paid-in capital

     —         13,662  

Retained earnings

     1,858,103       1,698,156  

Accumulated other comprehensive loss

     (176,722     (128,840
  

 

 

   

 

 

 

Total stockholders’ equity

     1,681,721       1,583,321  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,241,407     $ 3,100,909  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share data)

 

     Three Months Ended
December 31,
 
     2022     2021  
              
     (Unaudited)  

Revenues

   $ 774,431     $ 676,231  
  

 

 

   

 

 

 

Operating expenses

    

Direct cost of revenues

     526,139       484,126  

Selling, general and administrative expenses

     164,973       138,768  

Special charges

     8,340       —    

Amortization of intangible assets

     2,323       2,308  
  

 

 

   

 

 

 
     701,775       625,202  
  

 

 

   

 

 

 

Operating income

     72,656       51,029  
  

 

 

   

 

 

 

Other income (expense)

    

Interest income and other

     (6,500     896  

Interest expense

     (2,579     (5,130
  

 

 

   

 

 

 
     (9,079     (4,234
  

 

 

   

 

 

 

Income before income tax provision

     63,577       46,795  

Income tax provision

     16,079       8,587  
  

 

 

   

 

 

 

Net income

   $ 47,498     $ 38,208  
  

 

 

   

 

 

 

Earnings per common share — basic

   $ 1.42     $ 1.14  
  

 

 

   

 

 

 

Weighted average common shares outstanding — basic

     33,552       33,519  
  

 

 

   

 

 

 

Earnings per common share — diluted

   $ 1.33     $ 1.07  
  

 

 

   

 

 

 

Weighted average common shares outstanding — diluted

     35,658       35,550  
  

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

    

Foreign currency translation adjustments, net of tax expense of $— and $—

   $ 47,463     $ (4,363
  

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

     47,463       (4,363
  

 

 

   

 

 

 

Comprehensive income

   $ 94,961     $ 33,845  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share data)

 

     Year Ended December 31,  
     2022     2021  

Revenues

   $ 3,028,908     $ 2,776,222  
  

 

 

   

 

 

 

Operating expenses

    

Direct cost of revenues

     2,065,977       1,915,507  

Selling, general and administrative expenses

     641,070       537,844  

Special charges

     8,340       —    

Amortization of intangible assets

     9,643       10,823  
  

 

 

   

 

 

 
     2,725,030     2,464,174  
  

 

 

   

 

 

 

Operating income

     303,878       312,048  
  

 

 

   

 

 

 

Other income (expense)

    

Interest income and other

     3,918       6,193  

Interest expense

     (10,047     (20,294
  

 

 

   

 

 

 
     (6,129)     (14,101)  
  

 

 

   

 

 

 

Income before income tax provision

     297,749       297,947  

Income tax provision

     62,235       62,981  
  

 

 

   

 

 

 

Net income

   $ 235,514     $ 234,966  
  

 

 

   

 

 

 

Earnings per common share — basic

   $ 6.99     $ 7.02  
  

 

 

   

 

 

 

Weighted average common shares outstanding — basic

     33,693       33,489  
  

 

 

   

 

 

 

Earnings per common share — diluted

   $ 6.58     $ 6.65  
  

 

 

   

 

 

 

Weighted average common shares outstanding — diluted

     35,783       35,337  
  

 

 

   

 

 

 

Other comprehensive loss, net of tax

    

Foreign currency translation adjustments, net of tax expense of $— and $—

   $ (47,882   $ (22,405
  

 

 

   

 

 

 

Total other comprehensive loss, net of tax

     (47,882     (22,405
  

 

 

   

 

 

 

Comprehensive income

   $ 187,632     $ 212,561  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2022     2021     2022     2021  
                          
     (Unaudited)        

Net income

   $ 47,498     $ 38,208     $ 235,514     $ 234,966  

Add back:

        

Remeasurement of acquisition-related contingent consideration

     —         —         —         (3,130

Special charges

     8,340       —         8,340       —    

Tax impact of special charges

     (1,584     —         (1,584     —    

Non-cash interest expense on convertible notes

     —         2,445       —         9,586  

Tax impact of non-cash interest expense on convertible notes

     —         (636     —         (2,492
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

   $ 54,254     $ 40,017     $ 242,270     $ 238,930  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share — diluted

   $ 1.33     $ 1.07     $ 6.58     $ 6.65  

Add back:

        

Remeasurement of acquisition-related contingent consideration

     —         —         —         (0.09

Special charges

     0.23       —         0.23       —    

Tax impact of special charges

     (0.04     —         (0.04     —    

Non-cash interest expense on convertible notes

     —         0.08       —         0.27  

Tax impact of non-cash interest expense on convertible notes

     —         (0.02     —         (0.07
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings per common share — diluted

   $ 1.52     $ 1.13     $ 6.77     $ 6.76  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares outstanding — diluted

     35,658       35,550       35,783       35,337  
  

 

 

   

 

 

   

 

 

   

 

 

 


FTI CONSULTING, INC.

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA

(in thousands)

 

Three Months Ended December 31, 2022

(Unaudited)

   Corporate
Finance &
Restructuring
     Forensic and
Litigation
Consulting
     Economic
Consulting
     Technology      Strategic
Communications
     Unallocated
Corporate
    Total  

Net income

                    $ 47,498  

Interest income and other

                      6,500  

Interest expense

                      2,579  

Income tax provision

                      16,079  
                   

 

 

 

Operating income

   $ 46,359      $ 7,696      $ 26,122      $ 8,425      $ 9,360      $ (25,306   $ 72,656  

Depreciation and amortization

     1,673        1,267        1,183        3,226        618        688       8,655  

Amortization of intangible assets

     1,940        242        —          —          141        —         2,323  

Special charges

     2,444        4,614        31        106        369        776       8,340  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 52,416      $ 13,819      $ 27,336      $ 11,757      $ 10,488      $ (23,842   $ 91,974  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Year Ended December 31, 2022

   Corporate
Finance &
Restructuring
     Forensic and
Litigation
Consulting
     Economic
Consulting
     Technology      Strategic
Communications
     Unallocated
Corporate
    Total  

Net income

                    $ 235,514  

Interest income and other

                      (3,918

Interest expense

                      10,047  

Income tax provision

                      62,235  
                   

 

 

 

Operating income

   $ 195,295      $ 54,822      $ 98,178      $ 33,431      $ 46,982      $ (124,830   $ 303,878  

Depreciation and amortization

     6,722        5,532        4,881        13,161        2,580        2,821       35,697  

Amortization of intangible assets

     7,976        977        —          —          689        1       9,643  

Special charges

     2,444        4,614        31        106        369        776       8,340  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 212,437      $ 65,945      $ 103,090      $ 46,698      $ 50,620      $ (121,232   $ 357,558  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


FTI CONSULTING, INC.

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA

(in thousands)

 

Three Months Ended December 31, 2021

(Unaudited)

   Corporate
Finance &
Restructuring
     Forensic and
Litigation
Consulting
     Economic
Consulting
     Technology      Strategic
Communications
     Unallocated
Corporate
    Total  

Net income

                    $ 38,208  

Interest income and other

                      (896

Interest expense

                      5,130  

Income tax provision

                      8,587  
                   

 

 

 

Operating income

   $ 19,047      $ 7,044      $ 28,571      $ 4,612      $ 14,171      $ (22,416   $ 51,029  

Depreciation and amortization

     1,346        1,200        1,420        3,176        536        960       8,638  

Amortization of intangible assets

     1,841        247        —          —          218        2       2,308  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 22,234      $ 8,491      $ 29,991      $ 7,788      $ 14,925      $ (21,454   $ 61,975  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Year Ended December 31, 2021

   Corporate
Finance &
Restructuring
    Forensic and
Litigation
Consulting
     Economic
Consulting
     Technology      Strategic
Communications
     Unallocated
Corporate
    Total  

Net income

                   $ 234,966  

Interest income and other

                     (6,193

Interest expense

                     20,294  

Income tax provision

                     62,981  
                  

 

 

 

Operating income

   $ 145,765     $ 66,643      $ 111,462      $ 42,927      $ 49,708      $ (104,457   $ 312,048  

Depreciation and amortization

     5,362       5,008        5,724        12,812        2,166        3,197       34,269  

Amortization of intangible assets

     7,485       894        —          —          2,439        5       10,823  

Remeasurement of acquisition-related contingent consideration

     (3,130     —          —          —          —          —         (3,130
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 155,482     $ 72,545      $ 117,186      $ 55,739      $ 54,313      $ (101,255   $ 354,010  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


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 December 31, 2022 (Unaudited)

              

Corporate Finance & Restructuring

   $ 292,807      $ 52,416       17.9     58   $ 485        1,946  

Forensic and Litigation Consulting

     160,386        13,819       8.6     51   $ 369        1,584  

Economic Consulting

     172,007        27,336       15.9     63   $ 522        1,007  

Technology (1)

     76,802        11,757       15.3     N/M       N/M        556  

Strategic Communications (1)

     72,429        10,488       14.5     N/M       N/M        970  
  

 

 

    

 

 

   

 

 

        

 

 

 
   $ 774,431      $ 115,816       15.0          6,063  
  

 

 

    

 

 

   

 

 

        

 

 

 

Unallocated Corporate

        (23,842         
     

 

 

          

Adjusted EBITDA

      $ 91,974       11.9       
     

 

 

          

Year Ended December 31, 2022

              

Corporate Finance & Restructuring

   $ 1,088,573      $ 212,437       19.5     61   $ 460        1,946  

Forensic and Litigation Consulting

     638,478        65,945       10.3     54   $ 361        1,584  

Economic Consulting

     695,208        103,090       14.8     68   $ 508        1,007  

Technology (1)

     319,983        46,698       14.6     N/M       N/M        556  

Strategic Communications (1)

     286,666        50,620       17.7     N/M       N/M        970  
  

 

 

    

 

 

   

 

 

        

 

 

 
   $ 3,028,908      $ 478,790       15.8          6,063  
  

 

 

    

 

 

   

 

 

        

 

 

 

Unallocated Corporate

        (121,232         
     

 

 

          

Adjusted EBITDA

      $ 357,558       11.8       
     

 

 

          

Three Months Ended December 31, 2021 (Unaudited)

              

Corporate Finance & Restructuring

   $ 231,474      $ 22,234       9.6     55   $ 444        1,702  

Forensic and Litigation Consulting

     138,004        8,491       6.2     50   $ 353        1,496  

Economic Consulting

     172,283        29,991       17.4     69   $ 520        921  

Technology (1)

     64,604        7,788       12.1     N/M       N/M        468  

Strategic Communications (1)

     69,866        14,925       21.4     N/M       N/M        814  
  

 

 

    

 

 

   

 

 

        

 

 

 
   $ 676,231      $ 83,429       12.3          5,401  
  

 

 

    

 

 

   

 

 

        

 

 

 

Unallocated Corporate

        (21,454         
     

 

 

          

Adjusted EBITDA

      $ 61,975       9.2       
     

 

 

          

Year Ended December 31, 2021

              

Corporate Finance & Restructuring

   $ 938,969      $ 155,482       16.6     59   $ 452        1,702  

Forensic and Litigation Consulting

     584,835        72,545       12.4     56   $ 350        1,496  

Economic Consulting

     697,405        117,186       16.8     72   $ 509        921  

Technology (1)

     287,366        55,739       19.4     N/M       N/M        468  

Strategic Communications (1)

     267,647        54,313       20.3     N/M       N/M        814  
  

 

 

    

 

 

   

 

 

        

 

 

 
   $ 2,776,222      $ 455,265       16.4          5,401  
  

 

 

    

 

 

   

 

 

        

 

 

 

Unallocated Corporate

        (101,255         
     

 

 

          

Adjusted EBITDA

      $ 354,010       12.8       
     

 

 

          

 

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.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

     Year Ended December 31,  
     2022     2021  

Operating activities

    

Net income

   $ 235,514     $ 234,966  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     35,898       34,269  

Amortization and impairment of intangible assets

     9,643       10,823  

Acquisition-related contingent consideration

     2,172       (324

Provision for expected credit losses

     19,684       16,151  

Share-based compensation

     25,414       23,051  

Amortization of debt discount and issuance costs and other

     2,224       11,701  

Deferred income taxes

     (10,456     4,958  

Changes in operating assets and liabilities, net of effects from acquisitions:

    

Accounts receivable, billed and unbilled

     (182,667     (61,274

Notes receivable

     (403     12,645  

Prepaid expenses and other assets

     459       (1,165

Accounts payable, accrued expenses and other

     8,430       (2,102

Income taxes

     (4,322     10,523  

Accrued compensation

     37,931       59,566  

Billings in excess of services provided

     9,273       1,695  
  

 

 

   

 

 

 

Net cash provided by operating activities

     188,794       355,483  
  

 

 

   

 

 

 

Investing activities

    

Payments for acquisition of businesses, net of cash received

     (6,742     (10,428

Purchases of property and equipment and other

     (53,319     (68,665
  

 

 

   

 

 

 

Net cash used in investing activities

     (60,061     (79,093
  

 

 

   

 

 

 

Financing activities

    

Borrowings under revolving line of credit

     165,000       402,500  

Repayments under revolving line of credit

     (165,000     (402,500

Payments of debt issuance costs

     (3,993     —    

Purchase and retirement of common stock

     (85,424     (46,133

Share-based compensation tax withholdings and other

     (15,330     (9,246

Payments for business acquisition liabilities

     (4,848     (7,496

Deposits and other

     3,583       1,201  
  

 

 

   

 

 

 

Net cash used in financing activities

     (106,012     (61,674
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (25,518     (15,184
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (2,797     199,532  

Cash and cash equivalents, beginning of period

     494,485       294,953  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 491,688     $ 494,485  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(in thousands)

 

     Year Ended December 31,  
     2022     2021  

Net cash provided by operating activities

   $ 188,794     $ 355,483  

Purchases of property and equipment

     (53,098     (68,569
  

 

 

   

 

 

 

Free Cash Flow

   $ 135,696     $ 286,914