Exhibit 99.1

FTI Consulting, Inc.

555 12th Street NW

Washington, D.C. 20004

+1.202.312.9100

Investor & Media Contact:

Mollie Hawkes

+1.617.747.1791

mollie.hawkes@fticonsulting.com

FTI Consulting Reports First Quarter 2020 Financial Results

 

   

First Quarter 2020 Revenues of $604.6 Million, Up 9.7% Compared to $551.3 Million in Prior Year First Quarter

 

   

First Quarter 2020 EPS of $1.49, Down 9.1% Compared to $1.64 in Prior Year First Quarter; First Quarter 2020 Adjusted EPS of $1.53, Down 6.1% Compared to $1.63 in Prior Year First Quarter

Washington, D.C., April 30, 2020 — FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended March 31, 2020.

First quarter 2020 revenues of $604.6 million increased $53.3 million, or 9.7%, compared to revenues of $551.3 million in the prior year quarter. The increase in revenues was primarily driven by higher demand in the Corporate Finance & Restructuring, Forensic and Litigation Consulting, and Technology business segments, which was partially offset by a decline in demand in the Economic Consulting business segment compared to the prior year quarter. Net income of $56.7 million compared to $62.6 million in the prior year quarter. The decrease in net income was due to higher compensation, primarily related to an 18.5% increase in billable headcount and higher variable compensation, as well as higher selling, general and administrative (“SG&A”) expenses, which were only partially offset by the increase in revenues, foreign currency translation (“FX”) remeasurement gains and a lower effective tax rate compared to the prior year quarter. Adjusted EBITDA of $83.2 million, or 13.8% of revenues, compared to $96.1 million, or 17.4% of revenues, in the prior year quarter.

First quarter 2020 fully diluted earnings per share (“EPS”) of $1.49 compared to $1.64 in the prior year quarter. First quarter 2020 EPS included $2.2 million of non-cash interest expense related to the Company’s 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”), which decreased EPS by $0.04. First quarter 2019 EPS included $2.1 million of non-cash interest expense related to the Company’s 2023 Convertible Notes, which decreased EPS by $0.04, and a $2.1 million tax gain related to the September 2018 sale of the Company’s Ringtail e-discovery software and related business, which increased EPS by $0.05. First quarter 2020 Adjusted EPS of $1.53, which excludes the non-cash interest expense, compared to Adjusted EPS of $1.63 in the prior year quarter.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “First of all, I hope all of you who are reading this and your loved ones are healthy and safe. Many of us have been deeply affected by the impact of COVID-19, and in the wake of this pandemic, our key priorities are the health and well-being of our employees and making sure we are there for our clients, many of whom are facing some of their greatest challenges.”


Mr. Gunby continued, “In terms of our business, toward the end of the quarter, we began to see the effects of COVID-19 materialize. In some parts of our business, this has driven increased client demand and in other places substantially softened it. Because the magnitude and longevity of the specific impacts of COVID-19 on the world are still unfolding, there is greater uncertainty in forecasting the short-term impact on our business. I am nonetheless confident that the progress we have made over the last few years in terms of our client relationships, the breadth of our offerings, the capabilities of our people and the strength of our balance sheet has put FTI Consulting in the strongest position it has ever been in to weather the storm well, emerge from it strong and support our clients’ most critical needs throughout.”

Cash Position and Capital Allocation

Net cash used in operating activities of $123.6 million for the quarter ended March 31, 2020 compared to $102.1 million for the quarter ended March 31, 2019. The year-over-year increase in net cash used in operating activities was largely due to higher annual bonus payments and an increase in salaries related to the increase in headcount, which was partially offset by an increase in cash collected resulting from higher revenues compared to the prior year quarter.

During the quarter, the Company repurchased 450,198 shares of its common stock at an average price per share of $111.73 for a total cost of $50.3 million. As of March 31, 2020, approximately $116.3 million remained available for stock repurchases under the Company’s $500.0 million stock repurchase authorization.

Cash and cash equivalents of $223.1 million at March 31, 2020 compared to $179.2 million at March 31, 2019 and $369.4 million at December 31, 2019. Total debt, net of cash, of $143.2 million at March 31, 2020 compared to $137.0 million at March 31, 2019 and $(53.1) million at December 31, 2019. The sequential increase in total debt, net of cash, was primarily due to an increase in cash used in operating activities, which included annual bonus payments, as well as an increase in share repurchases.

First Quarter 2020 Segment Results

Corporate Finance & Restructuring

Revenues in the Corporate Finance & Restructuring segment increased $46.8 million, or 29.1%, to

$207.7 million in the quarter compared to $161.0 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $48.5 million, or 30.1%, compared to the prior year quarter. The increase in revenues was due to higher demand for restructuring and business transformation and transactions services. Acquisition-related revenues contributed $13.5 million compared to the prior year quarter. Adjusted Segment EBITDA of $48.9 million, or 23.6% of segment revenues, compared to $37.4 million, or 23.2% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to a 27.1% increase in billable headcount and higher variable compensation, as well as higher SG&A expenses.


Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased $8.6 million, or 6.2%, to $147.6 million in the quarter compared to $139.0 million in the prior year quarter. The increase in revenues was primarily due to higher demand for data & analytics, disputes and construction solutions services. Adjusted Segment EBITDA of $21.2 million, or 14.4% of segment revenues, compared to $31.8 million, or 22.9% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, primarily related to a 16.7% increase in billable headcount.

Economic Consulting

Revenues in the Economic Consulting segment decreased $10.1 million, or 7.1%, to $132.1 million in the quarter compared to $142.3 million in the prior year quarter. The decrease in revenues was largely due to lower demand for financial economics and non-merger and acquisition-related antitrust services, as well as lower realized rates for international arbitration services, which was partially offset by higher demand for merger and acquisition-related antitrust services. Adjusted Segment EBITDA of $12.7 million, or 9.6% of segment revenues, compared to $24.0 million, or 16.9% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to lower revenues, as well as higher compensation and benefits expenses, primarily related to a 13.3% increase in billable headcount, and higher SG&A expenses.

Technology

Revenues in the Technology segment increased $7.4 million, or 14.4%, to $58.7 million in the quarter compared to $51.3 million in the prior year quarter. The increase in revenues was primarily due to higher demand for merger and acquisition-related and global cross-border investigation services. Adjusted Segment EBITDA of $14.5 million, or 24.7% of segment revenues, compared to $12.7 million, or 24.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to an 18.7% increase in billable headcount and higher variable compensation, as well as higher SG&A expenses.

Strategic Communications

Revenues in the Strategic Communications segment increased $0.7 million, or 1.2%, to $58.4 million in the quarter compared to $57.7 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $1.5 million, or 2.5%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for public affairs services. Adjusted Segment EBITDA of $8.8 million, or 15.0% of segment revenues, compared to $11.5 million, or 20.0% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation and benefits expenses, primarily related to a 14.7% increase in billable headcount, as well as higher SG&A expenses.

First Quarter 2020 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss first quarter 2020 financial results at 9:00 a.m. Eastern Time on Thursday, April 30, 2020. 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 5,500 employees located in 27 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 $2.35 billion in revenues during the fiscal year 2019. 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 in the United States (“GAAP”). Certain of these measures are considered “non-GAAP financial measures” under the U.S. 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 Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

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 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 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 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 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, 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; 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, 2019, filed with the SEC on February 25, 2020 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the SEC on April 30, 2020, including the risks set forth under “Risks Related to Our Reportable Segments” and “Risks Related to Our Operations,” 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)

 

     March 31,     December 31,  
     2020     2019  
     (unaudited)        

Assets

    

Current assets

    

Cash and cash equivalents

   $ 223,063     $ 369,373  

Accounts receivable:

    

Billed receivables

     584,620       540,584  

Unbilled receivables

     436,944       418,288  

Allowances for doubtful accounts and unbilled services

     (284,666     (265,500
  

 

 

   

 

 

 

Accounts receivable, net

     736,898       693,372  

Current portion of notes receivable

     31,942       35,106  

Prepaid expenses and other current assets

     74,544       80,810  
  

 

 

   

 

 

 

Total current assets

     1,066,447       1,178,661  

Property and equipment, net

     92,852       93,672  

Operating lease assets

     149,570       159,777  

Goodwill

     1,191,948       1,202,767  

Other intangible assets, net

     35,682       38,432  

Notes receivable, net

     63,801       69,033  

Other assets

     36,881       40,800  
  

 

 

   

 

 

 

Total assets

   $ 2,637,181     $ 2,783,142  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Accounts payable, accrued expenses and other

   $ 170,930     $ 158,936  

Accrued compensation

     240,192       416,903  

Billings in excess of services provided

     40,219       36,698  
  

 

 

   

 

 

 

Total current liabilities

     451,341       612,537  

Long-term debt, net

     328,193       275,609  

Noncurrent operating lease liabilities

     163,594       176,378  

Deferred income taxes

     152,347       151,352  

Other liabilities

     73,022       78,124  
  

 

 

   

 

 

 

Total liabilities

     1,168,497       1,294,000  
  

 

 

   

 

 

 

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 — 37,110 (2020) and 37,390 (2019)

     371       374  

Additional paid-in capital

     170,062       216,162  

Retained earnings

     1,470,200       1,413,453  

Accumulated other comprehensive loss

     (171,949     (140,847
  

 

 

   

 

 

 

Total stockholders’ equity

     1,468,684       1,489,142  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,637,181     $ 2,783,142  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share data)

 

     Three Months Ended
March 31,
 
     2020     2019  
     (unaudited)  

Revenues

   $ 604,593     $ 551,274  
  

 

 

   

 

 

 

Operating expenses

    

Direct cost of revenues

     402,247       349,066  

Selling, general and administrative expenses

     126,959       113,185  

Amortization of other intangible assets

     2,331       1,861  
  

 

 

   

 

 

 
     531,537     464,112  
  

 

 

   

 

 

 

Operating income

     73,056       87,162  
  

 

 

   

 

 

 

Other income (expense)

    

Interest income and other

     5,017       159  

Interest expense

     (4,861     (4,746
  

 

 

   

 

 

 
     156     (4,587)  
  

 

 

   

 

 

 

Income before income tax provision

     73,212       82,575  

Income tax provision

     16,465       19,930  
  

 

 

   

 

 

 

Net income

   $ 56,747     $ 62,645  
  

 

 

   

 

 

 

Earnings per common share — basic

   $ 1.56     $ 1.69  
  

 

 

   

 

 

 

Weighted average common shares outstanding — basic

     36,415       36,981  
  

 

 

   

 

 

 

Earnings per common share — diluted

   $ 1.49     $ 1.64  
  

 

 

   

 

 

 

Weighted average common shares outstanding — diluted

     38,190       38,219  
  

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

    

Foreign currency translation adjustments, net of tax expense of $0

   $ (31,102   $ 5,223  
  

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

     (31,102     5,223  
  

 

 

   

 

 

 

Comprehensive income

   $ 25,645     $ 67,868  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

 

     Three Months Ended
March 31,
 
     2020     2019  
     (Unaudited)  

Net income

   $ 56,747     $ 62,645  

Add back:

    

Non-cash interest expense on convertible notes

     2,225       2,108  

Tax impact of non-cash interest expense on

convertible notes

     (579     (547

Tax impact of gain on sale of business (1)

     —         (2,097
  

 

 

   

 

 

 

Adjusted net income

   $ 58,393     $ 62,109  
  

 

 

   

 

 

 

Earnings per common share — diluted

   $ 1.49     $ 1.64  

Add back:

    

Non-cash interest expense on convertible notes

     0.06       0.05  

Tax impact of non-cash interest expense on

convertible notes

     (0.02     (0.01

Tax impact of gain on sale of business (1)

     —         (0.05
  

 

 

   

 

 

 

Adjusted earnings per common share — diluted

   $ 1.53     $ 1.63  
  

 

 

   

 

 

 

Weighted average number of common shares

outstanding — diluted

     38,190       38,219  
  

 

 

   

 

 

 

 

(1)

For Q1 2019, represents a discrete tax adjustment resulting from a change in estimate related to the accounting for the sale of our Ringtail e-discovery software and related business.


Three Months Ended March 31, 2020
(unaudited)

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

Net income

                    $ 56,747  

Interest income and other

                      (5,017

Interest expense

                      4,861  

Income tax provision

                      16,465  
                   

 

 

 

Operating income

   $ 46,664      $ 19,506      $ 11,396      $ 11,589      $ 7,492      $ (23,591   $ 73,056  

Depreciation and amortization

     979        1,416        1,270        2,895        586        677       7,823  

Amortization of other intangible assets

     1,303        286        44        —          698        —         2,331  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 48,946      $ 21,208      $ 12,710      $ 14,484      $ 8,776      $ (22,914   $ 83,210  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Three Months Ended March 31, 2019
(unaudited)

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

Net income

                    $ 62,645  

Interest income and other

                      (159

Interest expense

                      4,746  

Gain on sale of business

                      —    

Income tax provision

                      19,930  
                   

 

 

 

Operating income

   $ 35,684      $ 30,440      $ 22,489      $ 10,436      $ 10,216      $ (22,103   $ 87,162  

Depreciation and amortization

     910        1,086        1,507        2,287        574        702       7,066  

Amortization of other intangible assets

     767        291        44          —        759        —         1,861  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 37,361      $ 31,817      $ 24,040      $ 12,723      $ 11,549      $ (21,401   $ 96,089  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


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 March 31, 2020 (unaudited)

              

Corporate Finance & Restructuring

   $ 207,749      $ 48,946       23.6     69   $ 456        1,248  

Forensic and Litigation Consulting

     147,597        21,208       14.4     58   $ 342        1,393  

Economic Consulting

     132,138        12,710       9.6     68   $ 466        810  

Technology (1)

     58,723        14,484       24.7     N/M       N/M        374  

Strategic Communications (1)

     58,386        8,776       15.0     N/M       N/M        755  
  

 

 

    

 

 

   

 

 

        

 

 

 
   $ 604,593      $ 106,124       17.6          4,580  
  

 

 

    

 

 

   

 

 

        

 

 

 

Unallocated Corporate

        (22,914         
     

 

 

          

Adjusted EBITDA

      $ 83,210       13.8       
     

 

 

          

Three Months Ended March 31, 2019 (unaudited)

              

Corporate Finance & Restructuring

   $ 160,966      $ 37,361       23.2     70   $ 443        982  

Forensic and Litigation Consulting

     138,997        31,817       22.9     67   $ 342        1,194  

Economic Consulting

     142,271        24,040       16.9     77   $ 511        715  

Technology (1)

     51,336        12,723       24.8     N/M       N/M        315  

Strategic Communications (1)

     57,704        11,549       20.0     N/M       N/M        658  
  

 

 

    

 

 

   

 

 

        

 

 

 
   $ 551,274      $ 117,490       21.3          3,864  
  

 

 

    

 

 

   

 

 

        

 

 

 

Unallocated Corporate

        (21,401         
     

 

 

          

Adjusted EBITDA

      $ 96,089       17.4       
     

 

 

          

 

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)

 

     Three Months Ended
March 31,
 
     2020     2019  
     (unaudited)  

Operating activities

    

Net income

   $ 56,747     $ 62,645  

Adjustments to reconcile net income to net cash used in operating activities:

    

Depreciation and amortization

     7,823       7,066  

Amortization and impairment of other intangible assets

     2,331       1,861  

Acquisition-related contingent consideration

     506       93  

Provision for doubtful accounts

     3,872       3,784  

Share-based compensation

     7,454       6,393  

Amortization of debt discount and issuance costs

     2,978       2,860  

Deferred income taxes

     545       8,752  

Other

     —         (42

Changes in operating assets and liabilities, net of effects from

acquisitions:

    

Accounts receivable, billed and unbilled

     (60,963     (95,746

Notes receivable

     7,051       9,653  

Prepaid expenses and other assets

     9,442       5,979  

Accounts payable, accrued expenses and other

     11,136       (450

Income taxes

     (667     2,534  

Accrued compensation

     (176,070     (123,260

Billings in excess of services provided

     4,253       5,792  
  

 

 

   

 

 

 

Net cash used in operating activities

     (123,562     (102,086
  

 

 

   

 

 

 

Investing activities

    

Purchases of property and equipment

     (8,236     (10,153

Other

     8       72  
  

 

 

   

 

 

 

Net cash used in investing activities

     (8,228     (10,081
  

 

 

   

 

 

 

Financing activities

    

Borrowings under revolving line of credit

     55,000       —    

Repayments under revolving line of credit

     (5,000     —    

Purchase and retirement of common stock

     (49,135     (21,883

Net issuance of common stock under equity compensation plans

     (5,583     (605

Payments for business acquisition liabilities

     —         (1,282

Deposits and other

     3,870       1,003  
  

 

 

   

 

 

 

Net cash used in financing activities

     (848     (22,767
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (13,672     2,106  
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (146,310     (132,828

Cash and cash equivalents, beginning of period

     369,373       312,069  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 223,063     $ 179,241  
  

 

 

   

 

 

 


FTI CONSULTING, INC.

RECONCILIATION OF NET CASH USED IN OPERATING ACTIVITIES TO FREE CASH FLOW

(in thousands)

 

     Three Months Ended
March 31,
 
     2020     2019  

Net cash used in operating activities

   $ (123,562   $ (102,086

Purchases of property and equipment

     (8,236     (10,153
  

 

 

   

 

 

 

Free Cash Flow

   $ (131,798   $ (112,239
  

 

 

   

 

 

 

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