Confirms Existing Guidance for 2001
ANNAPOLIS, Md., July 25 /PRNewswire/ -- FTI Consulting, Inc. (AMEX: FCN),
the premier national provider of strategic and litigation-related consulting
services, today reported record results for the second quarter ended June 30,
2001. All results are unaudited. Comparisons with last year refer to the
comparable period in the prior year, including pro forma financial results for
the first six months of the prior year that contain the results of Policano &
Manzo L.L.C. ("P&M") for January 2000, the month prior to its acquisition by
FTI, and exclude the extraordinary item in the prior period.
Second-Quarter Results
For the quarter, revenues increased 22 percent to $42.2 million compared
with $34.6 million in the prior year. Net income more than doubled to
$4.2 million, from $1.9 million in the prior year, while earnings per share
reached an historic high of $0.33 per share, or an increase of 27 percent over
the same period last year. These results were achieved despite dilution
resulting from a dramatic increase in the number of shares outstanding due to
last year's stock offering and a recent significant increase in the company's
price per share, creating additional common stock equivalents.
Earnings before interest, taxes and depreciation and amortization
("EBITDA") were also an all-time high for the company, increasing by
24 percent to $10.5 million for the second quarter of 2001, compared with
$8.5 million in the second quarter of 2000. Cash flow provided by operations
for the quarter was $5.5 million, a $1.2 million improvement compared with
$4.3 million provided by operations in the comparable quarter of the prior
year. Cash generated from operations and proceeds from the exercise of
options and warrants was used to pay down debt, which, since the beginning of
the year, has been reduced from $60.5 million to $45.3 million.
Strong Markets into 2002
Commenting on these results, Chairman and Chief Executive Officer Jack
Dunn said, "Comparatively, consecutively, historically, this was a great
quarter for us. Even more importantly, I think it sets the stage for our
continuing performance both for the remainder of this year and into 2002.
From what we are seeing, all of our markets are strong. Clearly, in two of
them we have figured out how to capitalize on that strength. In the third, we
are taking definitive action to produce the results that should be achievable
and that we all expect from a market leader.
"Additionally, as those markets continue to grow, our robust cash flow
from operations, solid balance sheet and the increasing recognition of our
stock as a desired currency should provide us with an advantage in continuing
to grow our businesses and explore acquisition opportunities at attractive
multiples. We are very excited about the great potential of our company to
grow at our stated goal of 15 percent per year or even faster," Dunn added.
Operating Segments
With regard to the company's three operating segments, Financial
Consulting's revenues for the quarter were $23.9 million compared with
$16.3 million last year, an increase of 47 percent. Segment profit was
$9.5 million compared with $6.6 million last year, an increase of 44 percent.
For Applied Sciences, revenues were a record $10.8 million compared with
$9.7 million last year, an 11 percent increase, while segment profit was
$1.9 million compared with $1.6 million last year, a 19 percent increase. For
Litigation Consulting, revenues were $7.5 million compared with $8.6 million
in the prior year, and segment profit was $1.5 million compared with
$2.2 million in the prior year. Segment profit, however, improved more than
50 percent compared with the first quarter of 2001 on a $500,000 revenue
increase, reflecting the steps taken by management to contain costs.
In reviewing the quarter, FTI President Stewart Kahn said, "In
appreciating the tremendous growth of our financial restructuring business, we
should not overlook the fact that forensic accounting and litigation support
are becoming a significant factor in the growth and makeup of our Financial
Consulting division. This is a very healthy sign as we continue to diversify
our product offerings and service lines against too great a dependency on any
one phase of the market or cycle of the economy. Our Applied Sciences
division set a record with continued service in high-profile cases as well as
the continued steady work in accident and damages cases. In our Litigation
Consulting division, we have reorganized responsibilities along national lines
for our two principal practice areas, trial consulting and trial technology.
Our goals are to improve our overall utilization of employees, further
standardize practices, install new incentive systems for our sales and
marketing effort, establish new profit incentive programs for these practice
areas, and continue to reduce costs by flattening our organizational
structure. The results of these initiatives should begin to have an impact in
the third and fourth quarters with full implementation by the beginning of the
next calendar year."
Six-Month Results (pro forma for 2000)
For the six months, revenues increased 23 percent to $83.6 million
compared with $68.0 million on a basis in the prior year. Net income was
$8.0 million, an increase of 90 percent over $4.2 million before extraordinary
loss in the prior year. Earnings per diluted share were $0.65 compared with
earnings per diluted share of $0.57 before extraordinary item for the 2000
period.
Earnings per share for the first half of 2001 were based on 12.4 million
weighted average diluted shares outstanding compared with 7.3 million weighted
average diluted shares outstanding during the first half of 2000.
"EBITDA" increased by 21 percent to $20.8 million for the first half of
2001, compared with $17.2 million in the first half of 2000. Cash flow
provided by operations for the six months was $7.6 million compared with
$3.0 million in the prior year.
Financial Consulting's revenues for the first six months of 2001 were
$48.1 million compared with $31.3 million last year, an increase of
54 percent. Segment profit was $19.2 million compared with $13.4 million last
year, an increase of 43 percent. For Applied Sciences, revenues were
$21.0 million compared with $19.7 million last year, a 7 percent increase,
while segment profit was $3.6 million in both years. For Litigation
Consulting, revenues were $14.5 million compared with $17.1 million in the
prior year, and segment profit was $2.5 million compared with $4.4 million in
the prior year.
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 that 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.
The company's regularly scheduled quarterly conference call will be
broadcast live on the Internet at 11:00 a.m. EDT Thursday, July 26, 2001.
Call details are available on FTI's website and through various financial news
services.
For further information regarding FTI Consulting, Inc. free of charge via
fax, dial 1-800-PRO-INFO and enter "FCN"
FTI is on the Internet at http://www.fticonsulting.com and at http://www.ftiwarroom.net
FTI CONSULTING, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE SECOND QUARTER ENDED JUNE 30, 2001 AND 2000
(in thousands of dollars, except share and per-share data)
Three Months Ended
Actual Actual
06/30/2001 06/30/2000
(unaudited)
Revenues $42,154 $34,585
Direct cost of revenues 21,664 17,435
Selling, general and administrative expenses 10,945 9,297
Amortization of goodwill 1,255 1,233
Total costs and expenses 33,864 27,965
Income from operations 8,290 6,620
Interest expense, net 1,147 3,142
Income before income taxes 7,143 3,478
Income taxes 2,967 1,530
Net income $4,176 $1,948
Net income per common share, basic $0.36 $0.30
Weighted average shares for basic 11,485 6,423
Net income per common share, diluted $0.33 $0.26
Weighted average shares for diluted 12,801 7,513
EBITDA $10,484 $8,500
FTI CONSULTING, INC.
CONDENSED STATEMENTS OF INCOME
AND PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(in thousands of dollars, except share and per-share data)
Six Months Ended
Actual Pro Forma(A) Actual
06/30/2001 06/30/2000 06/30/2000
(unaudited)
Revenues $83,629 $68,037 $65,599
Direct cost of revenues 43,483 33,761 32,811
Selling, general and administrative
expenses 21,240 18,317 18,211
Amortization of goodwill 2,507 2,466 2,249
Total costs and expenses 67,230 54,544 53,271
Income from operations 16,399 13,493 12,328
Interest expense, net 2,588 6,074 5,494
Income before extraordinary items and
taxes 13,811 7,419 6,834
Income taxes 5,801 3,253 3,007
Income before extraordinary items 8,010 4,166 3,827
Extraordinary item:
Loss on early extinguishment of
debt, net of taxes - 869 869
Net income $8,010 $3,297 $2,958
Income before extraordinary item,
per common share, basic $0.72 $0.65 $0.62
Net income per common share, basic $0.72 $0.51 $0.48
Weighted average shares for basic 11,056 6,404 6,139
Income before extraordinary item,
per common share, diluted $0.65 $0.57 $0.55
Net income per common share, diluted $0.65 $0.45 $0.43
Weighted average shares for diluted 12,408 7,287 6,955
EBITDA $20,761 $17,242 $15,857
(A) Pro forma gives effect to the acquisition of P&M as of January 1,
2000
FTI CONSULTING, INC.
REVENUES AND EBITDA BY DIVISION
FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000
(in thousands of dollars)
Three Months Ended
Actual Actual
06/30/2001 06/30/2000
(unaudited)
Revenues
Financial Consulting $23,873 $16,332
Litigation Consulting 7,491 8,570
Applied Sciences 10,790 9,683
Total Revenues $42,154 $34,585
EBITDA, before corporate charges
Financial Consulting $9,518 $6,645
Litigation Consulting 1,502 2,219
Applied Sciences 1,855 1,647
Total EBITDA, before corporate charges $12,875 $10,511
FTI CONSULTING, INC.
REVENUES AND EBITDA BY DIVISION
FOR THE SIX MONTHS ENDED JUNE 30, 2001
AND 2000 AND PRO FORMA SIX MONTHS
ENDED JUNE 30, 2000
(in thousands of dollars)
Six Months Ended
Actual Pro Forma(A) Actual
06/30/2001 06/30/2000 06/30/2000
(unaudited)
Revenues
Financial Consulting $48,085 $31,289 $28,851
Litigation Consulting 14,543 17,080 17,080
Applied Sciences 21,001 19,668 19,668
Total Revenues $83,629 $68,037 $65,599
EBITDA, before corporate charges
Financial Consulting $19,208 $13,370 $11,985
Litigation Consulting 2,461 4,374 4,374
Applied Sciences 3,597 3,605 3,605
Total EBITDA, before corporate charges $25,266 $21,349 $19,964
(A) Pro forma gives effect to the acquisition of P&M as of January 1,
2000.
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND JUNE 30, 2001
(in thousands of dollars, except share data)
December 31, June 30,
2000 2001
(audited) (unaudited)
Assets
Current assets
Cash and cash equivalents $3,235 $2,473
Accounts receivable, less allowances 20,380 20,736
Unbilled receivable, less allowances 11,952 15,492
Other current assets 4,270 3,664
Total current assets 39,837 42,365
Property and equipment, net 13,155 12,886
Goodwill, net 91,971 90,178
Other assets 1,168 858
Total Assets $146,131 $146,287
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and other accrued
expenses $14,841 $13,200
Deferred income taxes 500 500
Current portion of long-term debt 4,333 4,333
Total current liabilities 19,674 18,033
Long-term debt, less current portion 56,167 41,000
Deferred income taxes and other liabilities 1,666 2,302
Stockholders' equity
Preferred stock, $.01 par value;
4,000,000 shares authorized in 2000,
5,000,000 authorized in 2001,
none outstanding - -
Common stock, $.01 par value;
16,000,000 shares authorized in 2000,
45,000,000 authorized in 2001,
10,567,447 and 12,190,487 shares
issued and outstanding in 2000 and 2001,
respectively 106 122
Additional paid-in capital 53,951 62,891
Retained earnings 14,567 22,577
Accumulated other comprehensive income - (638)
Total stockholders' equity 68,624 84,952
Total Liabilities and Stockholders'
Equity $146,131 $146,287
SOURCE FTI Consulting, Inc.
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Related links:
http://www.fticonsulting.com
CONTACT:
Jack Dunn, Chairman & CEO of FTI Consulting,
+1-410-224-1483; General Inquiries, Marilyn Windsor,
+1-312-640-6692, or Analyst Inquiries, Doug Broderick,
+1-312-274-2266, or Media Inquiries, Tim Grace, +1-312-274-2240,
all of The Financial Relations Board BSMG Worldwide
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