ANNAPOLIS, Md., Oct. 24 /PRNewswire/ -- FTI Consulting, Inc. (NYSE: FCN),
the premier national provider of strategic and litigation-related consulting
services, today reported results for the third quarter ended September 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 nine 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.
Third-Quarter Results
For the quarter, revenues increased 22 percent to $40.6 million compared
with $33.4 million in the prior year. Net income increased 140 percent to
$3.6 million, from $1.5 million in the prior year, while earnings per share
reached $0.27 per share, or an increase of 42 percent over the $0.19 per share
in the same period last year. These results were again achieved despite
dilution resulting from a significant increase in the number of shares
outstanding due to the company's October 2001 follow-on stock offering;
exercise of warrants and stock options; and the increase in the company's
price per share that resulted in additional common stock equivalents.
Earnings before interest, taxes and depreciation and amortization
("EBITDA") increased by 19 percent to $9.2 million for the third quarter of
2001, compared with $7.7 million in the third quarter of 2000. Cash flow
provided by operations for the quarter was $4.9 million compared with
$7.7 million in the comparable quarter of the prior year due to a temporary
reduction in collections in outstanding receivables in the period immediately
following September 11. Collections during the early part of October 2001
have accelerated and an additional $2.0 million of debt was paid down during
that period, reducing debt to $31.8 million today from $33.8 million at
September 30, 2001 and $60.5 million at the beginning of the year.
Operating Segments
With regard to the company's three operating segments, Financial
Consulting's revenues for the quarter were $23.6 million compared with
$17.1 million last year, an increase of 38 percent. Segment profit was
$9.0 million compared with $6.7 million last year, an increase of 34 percent.
For Applied Sciences, revenues were $11.4 million compared with $9.8 million
last year, a 16 percent increase, while segment profit was $2.5 million
compared with $1.9 million last year, a 32 percent increase. For Litigation
Consulting, revenues were $5.6 million compared with $6.5 million in the prior
year, and segment profit was $340,000 compared with $1.0 million in the prior
year.
2001 Revenue and EPS
The company noted that the outlook for the Financial Consulting and
Applied Sciences divisions remains strong while Litigation Consulting
continues to operate in a challenging environment. The company believes that
Financial Consulting is the beneficiary of a recent easing of the employment
market for seasoned financial professionals and that Applied Sciences
continues to enjoy a very strong market. At the same time, FTI also believes
that a combination of increased sales activity and continued cost cutting in
Litigation Consulting will keep this business profitable, and its performance
will not deter the company from achieving its stated goal of overall annual
company growth in revenues of 15 percent to 20 percent with associated growth
in earnings per share.
Commenting on the quarter, Chairman and Chief Executive Officer Jack Dunn
said, "Certainly this is a period that will not be remembered for any one
company's economic performance but rather for the outrageous attacks of
September 11 on our country. We are thankful that our people and their
families are safe, and our thoughts and prayers are with those so deeply
affected."
FTI President Stewart Kahn said, "Every one of us at FTI echoes Jack's
sentiments expressing sympathy for the victims of September 11 and gratitude
for the safety of our people. While we are proud of our people's
extraordinary business performance during these extraordinary times, we are
even more proud of their generosity, both as a company and as individuals, in
contributing time, effort and resources to a number of relief efforts designed
to alleviate the suffering caused by those horrific events."
Nine-Month Results
For the nine months, revenues increased 22 percent to $124.2 million
compared with $101.4 million on a pro forma basis in the prior year. Net
income was $11.6 million, an increase of 142 percent over $4.8 million pro
forma before extraordinary item in the prior year. Earnings per diluted share
were $0.91 compared with pro forma earnings per diluted share of $0.76 before
extraordinary item for the 2000 period, or a 20% increase even after a
73% increase in weighted average diluted shares outstanding from 7.4 million
during the first nine months of 2000 to 12.8 million for the nine months ended
September 30, 2001.
EBITDA increased by 20 percent to $29.9 million for the first nine months
of 2001, compared with $25.0 million in the first nine months of 2000. Cash
flow provided by operations for the nine months was $12.5 million compared
with $10.8 million in the prior year.
Financial Consulting's revenues for the first nine months of 2001 were
$71.7 million compared with $48.4 million last year, an increase of
48 percent. Segment profit was $28.2 million compared with $20.0 million last
year, an increase of 41 percent. For Applied Sciences, revenues were
$32.4 million compared with $29.5 million last year, a 10 percent increase,
while segment profit was $6.1 million compared with $5.6 million last year.
For Litigation Consulting, revenues were $20.2 million compared with
$23.6 million in the prior year, and segment profit was $2.8 million compared
with $5.4 million in the prior year.
Impact of FASB No. 142
The Financial Accounting Standards Board Statement No. 142, Goodwill and
Other Financial Assets, will be effective for the company beginning January 1,
2002. Accordingly, the amortization of goodwill, expected to total
approximately $5.0 million in 2001, will cease in 2002. If the Statement had
been effective during 2001, earnings per share for the third quarter and the
nine months ended September 30, 2001 would have increased by $0.06 per share
and $0.18 per share, respectively.
Third-Quarter Conference Call
The company's regularly scheduled quarterly conference call will be
broadcast live on the Internet at 11:00 a.m. EDT Thursday, October 25, 2001.
Call details are available on FTI's website and through various financial news
services.
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.
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 THIRD QUARTER ENDED SEPTEMBER 30, 2001 AND 2000
(in thousands of dollars, except share and per-share data)
Three Months Ended
Actual Actual
9/30/2001 9/30/2000
(unaudited)
Revenues $40,555 $33,395
Direct cost of revenues 20,814 17,133
Selling, general and administrative expenses 11,479 9,264
Amortization of goodwill 1,255 1,233
Total costs and expenses 33,548 27,630
Income from operations 7,007 5,765
Interest expense, net 971 3,143
Income before income taxes 6,036 2,622
Income taxes 2,414 1,154
Net income $3,622 $1,468
Net income per common share, basic $0.29 $0.22
Weighted average shares for basic 12,506 6,536
Net income per common share, diluted $0.27 $0.19
Weighted average shares for diluted 13,560 7,736
EBITDA $9,175 $7,730
FTI CONSULTING, INC.
CONDENSED STATEMENTS OF INCOME
AND PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(in thousands of dollars, except share and per-share data)
Nine Months Ended
Actual Pro Forma(A) Actual
9/30/2001 9/30/2000 9/30/2000
(unaudited)
Revenues $124,184 $101,432 $98,993
Direct cost of revenues 64,296 50,892 49,942
Selling, general and administrative
expenses 32,720 27,583 27,476
Amortization of goodwill 3,761 3,699 3,482
Total costs and expenses 100,777 82,174 80,900
Income from operations 23,407 19,258 18,093
Interest expense, net 3,559 9,217 8,637
Income before extraordinary items and
taxes 19,848 10,041 9,456
Income taxes 8,215 4,418 4,161
Income before extraordinary items 11,633 5,623 5,295
Extraordinary item:
Loss on early extinguishment of
debt, net of taxes - 869 869
Net income $11,633 $4,754 $4,426
Income before extraordinary item,
per common share, basic $1.01 $0.87 $0.84
Net income per common share, basic $1.01 $0.74 $0.71
Weighted average shares for basic 11,545 6,448 6,272
Income before extraordinary item,
per common share, diluted $0.91 $0.76 $0.73
Net income per common share, diluted $0.91 $0.64 $0.61
Weighted average shares for diluted 12,819 7,438 7,202
EBITDA $29,936 $24,972 $23,587
(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 SEPTEMBER 30, 2001 AND 2000
(in thousands of dollars)
Three Months Ended
Actual Actual
9/30/2001 9/30/2000
(unaudited)
Revenues
Financial Consulting $23,578 $17,063
Litigation Consulting 5,619 6,546
Applied Sciences 11,358 9,786
Total Revenues $40,555 $33,395
EBITDA, before corporate charges
Financial Consulting $8,992 $6,678
Litigation Consulting 342 1,029
Applied Sciences 2,488 1,948
Total EBITDA, before corporate charges $11,822 $9,655
FTI CONSULTING, INC.
REVENUES AND EBITDA BY DIVISION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
AND 2000 AND PRO FORMA NINE MONTHS
ENDED SEPTEMBER 30, 2000
(in thousands of dollars)
Nine Months Ended
Actual Pro Forma(A) Actual
9/30/2001 9/30/2000 9/30/2000
(unaudited)
Revenues
Financial Consulting $71,664 $48,352 $45,913
Litigation Consulting 20,162 23,626 23,626
Applied Sciences 32,358 29,454 29,454
Total Revenues $124,184 $101,432 $98,993
EBITDA, before corporate charges
Financial Consulting $28,200 $20,049 $18,663
Litigation Consulting 2,802 5,402 5,402
Applied Sciences 6,086 5,553 5,553
Total EBITDA, before corporate charges $37,088 $31,004 $29,618
(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 SEPTEMBER 30, 2001
(in thousands of dollars, except share data)
December 31, September 30,
2000 2001
(audited) (unaudited)
Assets
Current assets
Cash and cash equivalents $3,235 $2,820
Accounts receivable, less allowances 20,380 24,590
Unbilled receivable, less allowances 11,952 14,140
Other current assets 4,270 6,661
Total current assets 39,837 48,211
Property and equipment, net 13,155 11,847
Goodwill, net 91,971 90,968
Other assets 1,168 797
Total Assets $146,131 $151,823
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and other
accrued expenses $14,841 $17,698
Deferred income taxes 500 500
Current portion of long-term debt 4,333 4,333
Total current liabilities 19,674 22,531
Long-term debt, less current portion 56,167 29,417
Deferred income taxes and other liabilities 1,666 2,728
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
12,816,298 shares issued and outstanding
in 2000 and 2001, respectively 106 128
Additional paid-in capital 53,951 71,871
Retained earnings 14,567 26,200
Accumulated other comprehensive income - (1,052)
Total stockholders' equity 68,624 97,147
Total Liabilities and Stockholders' Equity $146,131 $151,823
SOURCE FTI Consulting, Inc.
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Related links:
http://www.ftiwarroom.net
CONTACT:
Jack Dunn, Chairman & CEO of FTI Consulting,
Inc., +1-410-224-1483; General, Marilyn Windsor, +1-312-640-6692,
Analysts, Lisa Fortuna, +1-312-640-6779, or Media, Tim Grace,
+1-312-274-2240, all of FRB Weber Shandwick
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