Nine-Month Revenues Approach $100 Million;
Strong Financial Consulting Segment Drives Performance
ANNAPOLIS, Md., Oct. 25 /PRNewswire/ -- FTI Consulting, Inc. (Amex: FCN),
the premier national provider of strategic and litigation-related consulting
services, today reported record results for the third quarter and nine months
ended September 30, 2000. A very strong performance by the Financial
Consulting segment, which includes its February 2000 acquisition of Policano &
Manzo L.L.C. (P&M), drove the company's performance.
Third-Quarter Results
Actual revenues increased 60.1 percent to $33.4 million from $20.9 million
in the third quarter of 1999, and income from operations grew to $5.8 million
from $2.2 million in the comparable quarter last year. Net income was
$1.5 million, or $0.19 per share on a diluted basis, compared with $655,000,
or $0.13 per share on a diluted basis. Earnings per share was calculated on
7.7 million shares compared with 5.2 million shares last year. Earnings
before interest, taxes, depreciation and amortization (EBITDA) was
$7.7 million, more than double EBITDA of $3.3 million in the 1999 period.
On a pro forma basis giving effect to the P&M acquisition for the 1999
third quarter, revenues increased 27.6 percent, operating income was up
23.1 percent, and net income grew 50.0 percent. EBITDA increased 18.6 percent
from last year.
Financial Consulting's actual revenues grew fourfold to $17.1 million from
$4.4 million last year and EBITDA was $6.7 million compared with $847,000 last
year. On a pro forma basis, revenues and segment profit for Financial
Consulting were ahead of last year by 76.5 percent and 65.7 percent,
respectively.
Commenting on the company's record performance, Jack Dunn, FTI's chairman
and chief executive officer, stated, "I am very pleased that we have produced
our sixth consecutive quarter of double-digit, quarter-to-comparable-quarter
growth. It is gratifying to see the extremely robust growth in our Financial
Consulting segment, both from P&M and organically. Market demand for these
services continues to be exceptional and we have achieved significant leverage
through our ability to reassign existing employees into this area. This
segment's performance continues to exceed our expectations."
Litigation Consulting revenues dipped 5.8 percent to $6.5 million from
$7.0 million last year, and EBITDA was $1.0 million, or a 42 percent decrease
from last year's $1.8 million. For the Applied Sciences segment, revenues
were $9.8 million, a 2.5 percent increase from $9.5 last year, and EBITDA
increased 8.2 percent to $1.9 million from $1.8 million last year. The
softness in Litigation Consulting was due in part to the seasonal variation in
trial activity typically experienced in the third quarter due to judicial
vacation schedules, coupled with a stronger-than-usual quarter last year. The
Applied Sciences segment's performance was consistent with management's
anticipated growth rates.
Nine-Month Results
Actual revenues increased 59.3 percent to $99.0 million from $62.1 million
in the 1999 period, and income from operations nearly tripled to $18.1 million
from $6.5 million. Income before extraordinary item was $5.3 million, or
$0.73 per share on a diluted basis, compared with $2.0 million, or $0.40 per
share on a diluted basis. Earnings per share was calculated on 7.2 million
shares compared with 5.0 million shares last year. EBITDA was $23.6 million,
more than double the $10.0 million recorded in the first nine months of 1999.
On a pro forma basis giving effect to the P&M acquisition as of January 1
for both years, revenues increased 29.3 percent to $101.4 million from
$78.4 million in the 1999 period, and income from operations was up
32.6 percent to $19.3 million from $14.5 million. Income before extraordinary
item jumped 77.0 percent to $5.6 million, or $0.76 per share on a diluted
basis, from $3.2 million, or $0.50 per share on a diluted basis. EBITDA was
$25.0 million, up from $20.0 million.
Financial Consulting's actual revenues were $45.9 million compared with
$14.3 million last year, and EBITDA was $18.7 million versus $3.5 million.
Pro forma revenues and EBITDA were ahead of last year by 58.2 percent and
48.5 percent, respectively. Litigation Consulting's revenues grew 15.0
percent to $23.6 million from $20.6 million, while EBITDA was down 4.6 percent
to $5.4 million from $5.7 million. Applied Sciences' revenues were
$29.5 million, an increase of 7.8 percent from $27.3 million last year, and
EBITDA grew 18.9 percent to $5.6 million from $4.7 million last year.
Stewart Kahn, president of FTI, commented, "We're very pleased that our
pro forma EBITDA margin for the nine months remains at 25 percent."
Equity Offering Strengthens Balance Sheet
FTI recently completed an offering of 3.5 million new shares of common
stock. The company raised net proceeds of $20.8 million and will use these
funds and other financial resources to retire $25.0 million of outstanding
17 percent senior subordinated notes.
According to the company, if the offering had been completed and senior
subordinated notes repaid at September 30, 2000, total stockholders' equity
would have been $68.2 million instead of $47.4 million, and long-term debt,
net of discounts, would have fallen to $63.3 million from $85.8 million.
"We have stated that paying down our high-coupon debt was a priority and I
am pleased that a combination of successful capital raising and internally
generated funds will allow us to begin this process," Kahn stated. "This will
reduce our annual interest expense by $4.3 million and significantly improve
our bottom line."
Third-Quarter Conference Call
FTI will hold a conference call to discuss third-quarter results and
management's outlook for the fourth quarter and next year at 11:00 a.m. EDT on
Wednesday, October 25, 2000. The call can be accessed live and will be
available for replay over the Internet via http://www.vcall.com and
http://www.streetevents.com .
About FTI Consulting
FTI Consulting is a multi-disciplined consulting firm with leading
practices in the areas of 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. 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.
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. AND SUBSIDIARIES
CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND PRO FORMA THREE MONTHS ENDED SEPTEMBER 30, 1999
(in thousands of dollars, except share and per-share data)
Pro Forma (A)
Three Months
Three Months Ended Ended
9/30/2000 9/30/1999 9/30/1999
(unaudited) (unaudited)
Revenues $33,395 $20,855 $26,164
Direct cost of revenues 17,132 11,012 12,782
Selling, general and
administrative expenses 9,265 7,114 7,471
Amortization of goodwill 1,233 570 1,229
Total costs and expenses 27,630 18,696 21,482
Income from operations 5,765 2,159 4,682
Interest expense, net 3,143 989 2,959
Income before income taxes 2,622 1,170 1,723
Income taxes 1,154 515 744
Net income $1,468 $655 $979
Net income per common share, basic $0.22 $0.13 $0.15
Weighted average shares for basic 6,536 4,914 6,333
Net income per common share, diluted $0.19 $0.13 $0.15
Weighted average shares for diluted 7,736 5,219 6,567
EBITDA $7,730 $3,334 $6,517
(A) Pro forma gives effect to the acquisition of P&M as of January 1, 1999
FTI CONSULTING, INC. AND SUBSIDIARIES
REVENUES AND EBITDA BY DIVISION
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND PRO FORMA THREE MONTHS ENDED SEPTEMBER 30, 1999
(in thousands of dollars, except share and per-share data)
Pro Forma (A)
Three Months
Three Months Ended Ended
9/30/2000 9/30/1999 9/30/1999
(unaudited) (unaudited)
Revenues:
Financial Consulting $17,063 $4,355 $9,664
Litigation Consulting 6,546 6,953 6,953
Applied Sciences 9,786 9,547 9,547
Total Revenues $33,395 $20,855 $26,164
EBITDA, before corporate charges:
Financial Consulting $6,678 $847 $4,030
Litigation Consulting 1,029 1,767 1,767
Applied Sciences 1,948 1,801 1,801
$9,655 $4,415 $7,598
(A) Pro forma gives effect to the acquisition of P&M as of January 1, 1999
FTI CONSULTING, INC. AND SUBSIDIARIES
CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND PRO FORMA NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(in thousands of dollars, except share and per-share data)
Pro Forma (A)
Nine Months Ended Nine Months Ended
9/30/2000 9/30/1999 9/30/2000 9/30/1999
(unaudited) (unaudited)
Revenues $98,993 $62,127 $101,432 $78,439
Direct cost of revenues 49,942 32,362 50,892 37,550
Selling, general and
administrative expenses 27,476 21,559 27,583 22,684
Amortization of goodwill 3,482 1,709 3,699 3,687
Total costs and expenses 80,900 55,630 82,174 63,921
Income from operations 18,093 6,497 19,258 14,518
Interest expense, net 8,637 2,808 9,217 8,957
Income before income taxes
and extraordinary item 9,456 3,689 10,041 5,561
Income taxes 4,161 1,704 4,418 2,385
Income before extraordinary item 5,295 1,985 5,623 3,176
Extraordinary item:
Loss on early extinguishments
of debt, net 869 - 869 -
Net income $4,426 $1,985 $4,754 $3,176
Income before extraordinary
item, per common share, basic $0.84 $0.41 $0.87 $0.51
Net income per common share, basic $0.71 $0.41 $0.74 $0.51
Weighted average shares for basic 6,272 4,858 6,448 6,277
Income before extraordinary
item, per common share, diluted $0.73 $0.40 $0.76 $0.50
Net income per common share,
diluted $0.61 $0.40 $0.64 $0.50
Weighted average shares for
diluted 7,202 4,986 7,438 6,362
EBITDA $23,587 $9,979 $24,972 $20,025
(A) Pro forma gives effect to the acquisition of P&M as of January 1, 1999
FTI CONSULTING, INC. AND SUBSIDIARIES
REVENUES AND EBITDA BY DIVISION
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND PRO FORMA NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(in thousands of dollars, except share and per-share data)
Pro Forma (A)
Nine Months Ended Nine Months Ended
9/30/2000 9/30/1999 9/30/2000 9/30/1999
(unaudited) (unaudited)
Revenues:
Financial Consulting $45,913 $14,259 $48,352 $30,571
Litigation Consulting 23,626 20,552 23,626 20,552
Applied Sciences 29,454 27,316 29,454 27,316
Total Revenues $98,993 $62,127 $101,432 $78,439
EBITDA, before corporate charges:
Financial Consulting $18,663 $3,504 $20,049 $13,502
Litigation Consulting 5,402 5,663 5,402 5,663
Applied Sciences 5,553 4,672 5,553 4,672
$29,618 $13,839 $31,004 $23,837
(A) Pro forma gives effect to the acquisition of P&M as of January 1, 1999
FTI CONSULTING, INC. AND SUBSIDIARIES
CONDENSED AND CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000, DECEMBER 31, 1999
AND PRO FORMA DECEMBER 31, 1999
(in thousands of dollars)
Pro Forma(A)
Dec 31, Dec 31, Sept 30,
1999 1999 2000
(audited) (unaudited)(unaudited)
Assets
Current Assets:
Cash and cash equivalents $5,046 $1,881 $6,967
Accounts receivable, less allowance 14,458 19,278 25,149
Unbilled receivable, less allowance 9,222 9,592 13,614
Other current assets 2,166 2,191 2,656
Total current assets 30,892 32,942 48,386
Property and equipment, net 8,379 8,533 10,774
Goodwill 43,658 95,731 92,256
Other assets 1,363 4,721 3,929
Total Assets $84,292 $141,927 $155,345
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
compensation and $9,035 $9,934 $13,924
other accrued expenses
Income taxes payable 471 471 471
Current portion of long-term debt 1,718 4,250 4,750
Advances from clients 435 2,572 6,626
Total current liabilities 11,659 17,227 25,771
Long-term debt, less current
portion, net of discounts 41,009 83,036 81,070
Deferred income taxes and other
liabilities 1,372 1,372 1,124
Stockholders' equity:
Preferred stock, $.01 par value;
4,000,000 shares authorized,
none outstanding - - -
Common stock, $.01 par value;
16,000,000 shares authorized,
4,913,905, 6,333,409 and 6,541,347
shares issued and outstanding
in 1999 and pro forma 1999 and
September 30, 2000, respectively 49 63 65
Additional paid-in capital 18,197 29,804 30,883
Retained earnings 12,006 10,425 16,432
Total stockholders' equity 30,252 40,292 47,380
Total liabilities and
stockholders' equity $84,292 $141,927 $155,345
(A) Pro forma gives effect to the acquisition of P&M as of January 1, 1999
SOURCE FTI Consulting, Inc.
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Related links:
http://www.fticonsulting.com
CONTACT:
Jack Dunn, Chairman & CEO of FTI Consulting,
Inc., 410-224-1483; or General, Marilyn Windsor, 312-640-6692, or
Analyst, Doug Broderick, 312-274-2266, or Media, Tim Grace,
312-274-2240, all of The Financial Relations Board
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