Achieves New Highs in Revenue, EBITDA, Net Income, EPS
ANNAPOLIS, Md., Feb. 12 /PRNewswire-FirstCall/ -- FTI Consulting, Inc.
(NYSE: FCN), the premier national provider of turnaround, bankruptcy and
litigation-related consulting services, today reported record results for the
fourth quarter and year ended December 31, 2001. The continued strong and
record-setting performance by the Financial Consulting Division, together with
record revenues from the Applied Sciences Division, led the Company to its
eleventh consecutive period of quarter-over-quarter growth.
Fourth-Quarter Results
For the quarter, FTI achieved record revenues, net income, earnings per
share and EBITDA. Revenues increased 17.9 percent to $42.2 million from
$35.8 million in last year's fourth quarter. Income from operations grew 36.9
percent to $8.9 million in the fourth quarter of 2001 from $6.5 million in the
comparable quarter for the prior year. Net income was 77.8 percent higher
than last year's income before extraordinary item, growing to $4.8 million
from $2.7 million in the prior-year period. After adjusting for the company's
three-for-two stock split effective January 2, 2002, earnings per share grew
35.3 percent to $0.23 on a fully diluted basis (pre-split $0.35 per share)
compared with last year's $0.17 per share diluted post split (pre-split $0.26
per share) before extraordinary item for early extinguishment of debt. The
increase in earnings per share was achieved despite a 35.1 percent increase in
average shares outstanding due to the offering in late October 2000 and the
increase in common stock equivalents due to the increase in the value of the
company's stock throughout the year. Earnings before interest, taxes,
depreciation and amortization (EBITDA) grew 31.8 percent to $11.2 million in
the fourth quarter of 2001 from $8.5 million in the prior-year period.
With regard to the company's three operating divisions, Financial
Consulting achieved record results across the board during the period as
revenues grew 38.8 percent to $25.4 million from $18.3 million in the prior-
year period and EBITDA grew 73.6 percent to $12.5 million in the fourth
quarter of 2001 compared with $7.2 million last year. This performance
reflected strong growth in both restructuring and turnaround activities, and
in the forensic accounting and strategic consulting portions of the business.
Applied Sciences also achieved record quarterly revenues, growing 19.4
percent to $11.7 million from $9.8 million in the prior-year period, with some
of the growth coming from restoration assignments near the site of the former
World Trade Center. EBITDA was roughly the same as the prior-year period at
$1.7 million, as a result of an expense charge of about $225,000 in the 2001
period to cover facility relocation and the costs of moving one of the
division's largest offices to a new location.
Litigation Consulting's revenues for the quarter declined to $5.0 million
from $7.7 million in the prior-year period, and the division still remained
profitable with EBITDA of $449,000 in the fourth quarter of 2001. ' These
results were disappointing, but consistent with management's stated strategy
and expectations for the business, which are to scale the business back,
reorganize and increase the level of sales activity, and work on enhancing
opportunities through FTI's new electronic evidence and intellectual property
consulting businesses.
Commenting on the company's record performance, Jack Dunn, FTI's chairman
and chief executive officer, stated, "If the fourth quarter of the year 2001
is remembered for anything, it will not be for our financial performance,
though it was extraordinary, but for helping our clients not just with the
biggest challenges to face them, but some of the biggest challenges ever to
face our country. As these issues continue into the new year, I am pleased
that we have been able to add new people and disciplines to continue our
philosophy of helping our clients when and where they need us. The addition
of more than 20 people during the last few weeks in new practice areas such as
intellectual property, economic and damage consulting, electronic discovery,
crisis management, and the electric utility industry are evidence of our
commitment to grow and invest in our businesses in anticipation of our
clients' needs."
Year 2001 Results
For the year, revenues increased 21.3 percent to a record $166.4 million
from $137.2 million in 2000 giving pro forma effect a February 2000
acquisition as if it had occurred on January 1, 2000. Income from operations
was also a record, up 25.2 percent to $32.3 million from $25.8 million. Net
income nearly doubled to $16.5 million, or $0.84 per share on a diluted basis,
after adjustment for the company's three-for-two stock split effective January
2, 2002 (pre-split $1.26 per share), from $8.3 million, or post split $0.68
per share on a diluted basis (pre-split $1.03 per share), before extraordinary
items in 2000. Earnings per share were calculated on 19.6 million post-split
shares in 2001, compared with pro forma 12.1 million post-split shares in the
prior year. EBITDA increased 22.9 percent to $41.2 million in 2001 from
$33.5 million pro forma in 2000.
Actual revenues increased 23.4 percent to $166.4 million in 2001 from
$134.8 million in 2000, and actual income from operations increased to
$32.3 million from $24.6 million. Actual net income was $16.5 million in
2001, or twice the $8.0 million before extraordinary items in 2000, and $0.84
on a diluted basis, compared with $0.66 per share, an increase of 27.3
percent. Earnings per share were calculated on 19.6 million shares in 2001
compared with 12.0 million shares in the prior year. Actual EBITDA was
$41.2 million in 2001, compared with $32.1 million in 2000.
Financial Consulting's revenues increased 45.8 percent to $97.1 million in
2001 compared with pro forma revenues of $66.6 million in the prior year, and
51.3 percent compared with actual revenues in the prior year of $64.2 million.
EBITDA was $40.7 million versus pro forma $27.3 million and actual
$25.9 million, or percentage increases of 49.1 and 57.1, respectively.
Applied Sciences' revenues were $44.0 million in 2001, an increase of 12.3
percent from $39.2 million in the prior year, and EBITDA was $7.8 million in
2001 compared with $7.3 million in the prior year, an increase of 7.1 percent.
Litigation Consulting's revenues declined 19.6 percent to $25.2 million from
$31.4 million in the prior year, and EBITDA was down 52.2 percent to
$3.3 million from $6.9 million.
Stewart Kahn, president and chief operating officer of FTI, commented, "I
think that 2001, and especially the fourth quarter, demonstrate the kind of
earnings power that FTI is capable of generating, as we envisioned three years
ago when we embarked upon this strategy. Our high-quality earnings have
generated strong cash flow, yielding over $20.0 million of free cash flow in
this past year, and our balance sheet has also strengthened dramatically over
the year. Above all, our people and our services remain the most respected
and sought after by the marketplace. I believe we are poised as never before
to provide more value to our clients, to be viewed as an attractive home for
professionals and entrepreneurs wishing to merge their companies, and to
produce even greater bottom-line results and value for our shareholders."
Outlook for 2002
The company believes that its stated goal of generating 15 to 20 percent
or greater organic growth in revenues and earnings per share for the full year
2002 is achievable.
Year-End Conference Call
FTI will hold a conference call to discuss fourth-quarter results and
management's outlook for the first quarter and the full year 2002 at 11:00
a.m. EST on Wednesday, February 13, 2002. The call can be accessed live and
will be available for replay over the Internet via http://www.vcall.com .
About FTI Consulting
FTI Consulting is a multi-disciplined consulting firm with leading
practices in the areas of bankruptcy and financial restructuring, litigation
consulting and engineering/scientific investigation. Modern corporations, as
well as those who advise and invest in them, face growing challenges on every
front. From a proliferation of "bet-the-company" litigation to increasingly
complicated relationships with lenders and investors in an ever-changing
global economy, U.S. companies are turning more and more to outside experts
and consultants to meet these complex issues. FTI is dedicated to helping
corporations, their advisors, lawyers, lenders and investors meet these
challenges by providing a broad array of the highest quality professional
practices from a single source.
This press release includes "forward-looking" statements that involve
uncertainties and risks. There can be no assurance that actual results will
not differ from the company's expectations. The company has experienced
fluctuating revenues, operating income and cash flow in some prior periods and
expects this may occur from time to time in the future. As a result of these
possible fluctuations, the company's actual results may differ from our
projections. Other factors that could cause such differences include pace and
timing of additional acquisitions, the company's ability to realize cost
savings and efficiencies, competitive and general economic conditions, and
other risks described in the company's filings with the Securities and
Exchange Commission.
FTI is on the Internet at http://www.fticonsulting.com and at
http://www.ftiwarroom.net .
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
(in thousands of dollars, except share and per share data)
Three Months Ended
Actual Actual
12/31/2001 12/31/2000
(unaudited)
Revenues $42,175 $35,771
Direct cost of revenues 19,154 18,725
Selling, general and administrative expenses 12,871 9,256
Amortization of goodwill 1,288 1,241
Total costs and expenses 33,313 29,222
Income from operations 8,862 6,549
Interest expense, net 797 2,134
Income before extraordinary item and
income taxes 8,065 4,415
Income taxes 3,229 1,756
Income before extraordinary item 4,836 2,659
Extraordinary item:
Loss on early extinguishment of
debt net of taxes - 4,524
Net income (loss) $4,836 $(1,865)
Income before extraordinary item,
per common share, basic $0.25 $0.19
Net income (loss) per common share,
basic $0.25 $(0.13)
Weighted average shares for basic(A) 19,397 14,237
Income before extraordinary item,
per common share, diluted $0.23 $0.17
Net income (loss) per common share,
diluted $0.23 $(0.12)
Weighted average shares for
diluted(A) 20,827 15,410
EBITDA $11,249 $8,547
(A) Weighted average shares have been adjusted to reflect the
three-for-two stock split effected as a stock dividend paid to
stockholders of record on January 2, 2002.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
(in thousands of dollars, except share and per share data)
Year Ended
Actual Pro Forma(A) Actual
12/31/2001 12/31/2000 12/31/2000
(unaudited)
Revenues $166,359 $137,203 $134,764
Direct cost of revenues 83,449 69,617 68,667
Selling, general and administrative
expenses 45,591 36,839 36,732
Amortization of goodwill 5,049 4,940 4,723
Total costs and expenses 134,089 111,396 110,122
Income from operations 32,270 25,807 24,642
Interest expense, net 4,356 11,352 10,771
Income before extraordinary items and
taxes 27,914 14,455 13,871
Income taxes 11,445 6,175 5,917
Income before extraordinary items 16,469 8,280 7,954
Extraordinary item:
Loss on early extinguishment of
debt, net of taxes - 5,393 5,393
Net income $16,469 $2,887 $2,561
Income before extraordinary item,
per common share, basic $0.92 $0.77 $0.75
Net income per common share, basic $0.92 $0.27 $0.24
Weighted average shares for basic(B) 17,841 10,828 10,612
Income before extraordinary item,
per common share, diluted $0.84 $0.68 $0.66
Net income per common share, diluted $0.84 $0.24 $0.21
Weighted average shares for
diluted(B) 19,631 12,110 11,988
EBITDA $41,185 $33,519 $32,134
(A) Pro forma gives effect to the acquisition of P&M as of January 1,
2000
(B) Weighted average shares have been adjusted to reflect the
three-for-two stock split effected as a stock dividend paid to
stockholders of record on January 2, 2002.
FTI CONSULTING, INC.
REVENUES AND EBITDA BY DIVISION
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
(in thousands of dollars)
Three Months Ended
Actual Actual
12/31/2001 12/31/2000
(unaudited)
Revenues
Financial Consulting $25,442 $18,263
Litigation Consulting 5,049 7,730
Applied Sciences 11,684 9,778
Total Revenues $42,175 $35,771
EBITDA, before corporate charges
Financial Consulting $12,499 $7,225
Litigation Consulting 449 1,466
Applied Sciences 1,702 1,716
Total EBITDA, before corporate
charges $14,650 $10,407
FTI CONSULTING, INC.
REVENUES AND EBITDA BY DIVISION
FOR THE YEAR ENDED DECEMBER 31, 2001 AND 2000
AND PRO FORMA YEAR ENDED DECEMBER 31, 2000
(in thousands of dollars)
Year Ended
Actual Pro Forma(A) Actual
12/31/2001 12/31/2000 12/31/2000
(unaudited)
Revenues
Financial Consulting $97,107 $66,614 $64,175
Litigation Consulting 25,210 31,357 31,357
Applied Sciences 44,042 39,232 39,232
Total Revenues $166,359 $137,203 $134,764
EBITDA, before corporate charges
Financial Consulting $40,699 $27,274 $25,889
Litigation Consulting 3,251 6,868 6,868
Applied Sciences 7,787 7,269 7,269
Total EBITDA, before corporate
charges $51,737 $41,411 $40,026
(A) Pro forma gives effect to the acquisition of P&M as of January 1,
2000.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
DECEMBER 31, 2001 AND 2000
(in thousands of dollars)
December 31, December 31,
2001 2000
(audited) (audited)
Operating activities
Net income $16,469 $2,561
Adjustment to reconcile net income to
net cash provided by operating activities:
Extraordinary loss, before taxes - 8,471
Depreciation and other amortization 3,866 2,769
Amortization of goodwill 5,050 4,723
Other 655 (481)
Changes in operating assets and liabilities:
Accounts receivable, billed and unbilled (463) (5,632)
Income taxes, current and deferred (608) (1,253)
Accrued compensation expense 2,197 4,409
Other current assets and liabilities 146 (5)
Net cash provided by operating activities 27,312 15,562
Investing activities
Purchase of property and equipment (4,366) (6,640)
Proceeds from sale of property and equipment 1,231 47
Acquisition of subsidiaries and
contingent payments (3,234) (50,311)
Change in other assets 67 246
Net cash used in investing activities (6,302) (56,658)
Financing activities
Issuance of common shares and stock options 20,959 25,185
Borrowings under long-term debt arrangements - 151,500
Retirement of detachable stock warrants - (1,272)
Repayments on long-term debt (32,334) (130,825)
Payment of financing fees (17) (4,894)
Changes in other long-term liabilities 3 (409)
Net cash provided by (used in)
financing activities (11,389) 39,285
Net increase (decrease) in cash and
cash equivalents 9,621 (1,811)
Cash and cash equivalents at beginning of
period 3,235 5,046
Cash and cash equivalents at end of period $12,856 $3,235
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
(in thousands of dollars, except share data)
December 31, December 31,
2001 2000
(audited) (audited)
Assets
Current assets
Cash and cash equivalents $12,856 $3,235
Accounts receivable, less allowances 20,435 20,380
Unbilled receivables, less allowances 12,154 11,952
Other current assets 4,112 4,270
Total current assets 49,557 39,837
Property and equipment, net 12,253 13,155
Goodwill, net 90,307 91,971
Other assets 872 1,168
Total Assets $152,989 $146,131
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and other accrued
expenses $17,692 $14,841
Deferred income taxes 130 500
Current portion of long-term debt 4,333 4,333
Total current liabilities 22,155 19,674
Long-term debt, less current portion 23,833 56,167
Deferred income taxes and other
liabilities 1,865 1,666
Stockholders' equity
Preferred stock, $.01 par value;
5,000,000 shares authorized, none
outstanding - -
Common stock, $.01 par value;
45,000,000 shares authorized,
19,591,671 and 15,851,915 shares issued
and outstanding, in 2001 and 2000,
respectively 196 159
Additional paid-in capital 75,416 53,898
Unearned Compensation (568) -
Retained earnings 31,036 14,567
Accumulated other comprehensive income (944) -
Total stockholders' equity 105,136 68,624
Total Liabilities and Stockholders'
Equity $152,989 $146,131
SOURCE FTI Consulting, Inc.
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Related links:
http://www.fticonsulting.com
http://www.ftiwarroom.net
CONTACT:
Jack Dunn, Chairman & CEO of FTI Consulting,
+1-410-224-1483, or General, Marilyn Windsor, +1-702-515-1260,
Analysts, Lisa Fortuna, +1-312-640-6779, or Media, Tim Grace,
+1-312-640-6667, all of FRB Weber Shandwick
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