- FTI Consulting Reports Record Second Quarter 2024 Financial Results
FTI Consulting Reports Record Second Quarter 2024 Financial Results
- Second Quarter 2024 Revenues of
$949.2 Million , Up 10% Compared to$864.6 Million in PriorYear Quarter - Second Quarter 2024 EPS of
$2.34 , Up 34% Compared to$1.75 in PriorYear Quarter - Company Raises Full Year 2024 Revenue and EPS Guidance Ranges to Reflect Record First Half of 2024
Second quarter 2024 revenues of
Cash Position and Capital Allocation
Net cash provided by operating activities of
Cash and cash equivalents of
There were no share repurchases during the quarter ended
Second Quarter 2024 Segment Results
Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased
Revenues in the
Revenues in the
Technology
Revenues in the Technology segment increased
Revenues in the
2024 Guidance
After a record first half of 2024, the Company is raising its full year 2024 guidance ranges for revenues and EPS. The Company now estimates that revenues for full year 2024 will range between
Second Quarter 2024 Conference Call
About
Non-GAAP Financial 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
- Total Segment Operating Income
- Adjusted EBITDA
- Total Adjusted Segment EBITDA
- Adjusted EBITDA Margin
- Adjusted Net Income
- Adjusted Earnings per Diluted Share
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 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 EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.
We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS"), which are non-GAAP financial measures, as net income and 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.
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 Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these 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, initiatives, projections, prospects, policies, processes and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new or changes to laws and regulations, including
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FINANCIAL TABLES FOLLOW
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) |
|||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 226,428 | $ | 303,222 | |||
Accounts receivable, net | 1,190,521 | 1,102,142 | |||||
Current portion of notes receivable | 45,145 | 30,997 | |||||
Prepaid expenses and other current assets | 107,117 | 119,092 | |||||
Total current assets | 1,569,211 | 1,555,453 | |||||
Property and equipment, net | 152,307 | 159,662 | |||||
Operating lease assets | 202,511 | 208,910 | |||||
1,230,932 | 1,234,569 | ||||||
Intangible assets, net | 18,377 | 18,285 | |||||
Notes receivable, net | 106,201 | 75,431 | |||||
Other assets | 78,105 | 73,568 | |||||
Total assets | $ | 3,357,644 | $ | 3,325,878 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable, accrued expenses and other | $ | 182,667 | $ | 223,758 | |||
Accrued compensation | 463,669 | 601,074 | |||||
Billings in excess of services provided | 67,558 | 67,937 | |||||
Total current liabilities | 713,894 | 892,769 | |||||
Long-term debt | 60,000 | — | |||||
Noncurrent operating lease liabilities | 214,517 | 223,774 | |||||
Deferred income taxes | 136,374 | 140,976 | |||||
Other liabilities | 83,479 | 86,939 | |||||
Total liabilities | 1,208,264 | 1,344,458 | |||||
Stockholders’ equity | |||||||
Preferred stock, outstanding |
— | — | |||||
Common stock, issued and outstanding — 35,902 (2024) and 35,521 (2023) |
359 | 355 | |||||
Additional paid-in capital | 33,955 | 16,760 | |||||
Retained earnings | 2,278,677 | 2,114,765 | |||||
Accumulated other comprehensive loss | (163,611 | ) | (150,460 | ) | |||
Total stockholders’ equity | 2,149,380 | 1,981,420 | |||||
Total liabilities and stockholders’ equity | $ | 3,357,644 | $ | 3,325,878 | |||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except per share data) |
|||||||
Three Months Ended |
|||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
Revenues | $ | 949,156 | $ | 864,591 | |||
Operating expenses | |||||||
Direct cost of revenues | 637,749 | 588,094 | |||||
Selling, general and administrative expenses | 206,235 | 186,371 | |||||
Amortization of intangible assets | 1,080 | 1,417 | |||||
845,064 | 775,882 | ||||||
Operating income | 104,092 | 88,709 | |||||
Other income (expense) | |||||||
Interest income and other | 1,909 | (584 | ) | ||||
Interest expense | (3,319 | ) | (3,022 | ) | |||
(1,410 | ) | (3,606 | ) | ||||
Income before income tax provision | 102,682 | 85,103 | |||||
Income tax provision | 18,735 | 22,708 | |||||
Net income | $ | 83,947 | $ | 62,395 | |||
Earnings per common share ― basic | $ | 2.38 | $ | 1.87 | |||
Weighted average common shares outstanding ― basic | 35,221 | 33,359 | |||||
Earnings per common share ― diluted | $ | 2.34 | $ | 1.75 | |||
Weighted average common shares outstanding ― diluted | 35,845 | 35,650 | |||||
Other comprehensive income (loss), net of tax | |||||||
Foreign currency translation adjustments, net of tax expense of $— | $ | (1,718 | ) | $ | 6,396 | ||
Total other comprehensive income (loss), net of tax | (1,718 | ) | 6,396 | ||||
Comprehensive income | $ | 82,229 | $ | 68,791 | |||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except per share data) |
|||||||
Six Months Ended |
|||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
Revenues | $ | 1,877,709 | $ | 1,671,297 | |||
Operating expenses | |||||||
Direct cost of revenues | 1,263,783 | 1,141,603 | |||||
Selling, general and administrative expenses | 408,105 | 370,584 | |||||
Amortization of intangible assets | 2,096 | 3,599 | |||||
1,673,984 | 1,515,786 | ||||||
Operating income | 203,725 | 155,511 | |||||
Other income (expense) | |||||||
Interest income and other | 3,490 | (1,926 | ) | ||||
Interest expense | (5,038 | ) | (5,961 | ) | |||
(1,548 | ) | (7,887 | ) | ||||
Income before income tax provision | 202,177 | 147,624 | |||||
Income tax provision | 38,265 | 37,682 | |||||
Net income | $ | 163,912 | $ | 109,942 | |||
Earnings per common share ― basic | $ | 4.67 | $ | 3.30 | |||
Weighted average common shares outstanding ― basic | 35,099 | 33,331 | |||||
Earnings per common share ― diluted | $ | 4.58 | $ | 3.09 | |||
Weighted average common shares outstanding ― diluted | 35,816 | 35,566 | |||||
Other comprehensive income (loss), net of tax | |||||||
Foreign currency translation adjustments, net of tax expense of $— | $ | (13,151 | ) | $ | 16,246 | ||
Total other comprehensive income (loss), net of tax | (13,151 | ) | 16,246 | ||||
Comprehensive income | $ | 150,761 | $ | 126,188 | |||
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA (in thousands) |
|||||||||||||||||||||||
Three Months Ended (Unaudited) |
Corporate Finance & Restructuring |
Forensic and |
Technology | Unallocated Corporate |
Total | ||||||||||||||||||
Net income | $ | 83,947 | |||||||||||||||||||||
Interest income and other | (1,909 | ) | |||||||||||||||||||||
Interest expense | 3,319 | ||||||||||||||||||||||
Income tax provision | 18,735 | ||||||||||||||||||||||
Operating income | $ | 63,193 | $ | 13,100 | $ | 42,952 | $ | 17,137 | $ | 10,594 | $ | (42,884 | ) | $ | 104,092 | ||||||||
Depreciation and amortization | 2,560 | 1,627 | 1,344 | 3,793 | 918 | 507 | 10,749 | ||||||||||||||||
Amortization of intangible assets | 714 | 267 | — | — | 99 | — | 1,080 | ||||||||||||||||
Adjusted EBITDA | $ | 66,467 | $ | 14,994 | $ | 44,296 | $ | 20,930 | $ | 11,611 | $ | (42,377 | ) | $ | 115,921 | ||||||||
Six Months Ended (Unaudited) |
Corporate Finance & Restructuring |
Forensic and |
Technology | Unallocated Corporate |
Total | ||||||||||||||||||
Net income | $ | 163,912 | |||||||||||||||||||||
Interest income and other | (3,490 | ) | |||||||||||||||||||||
Interest expense | 5,038 | ||||||||||||||||||||||
Income tax provision | 38,265 | ||||||||||||||||||||||
Operating income | $ | 135,112 | $ | 45,067 | $ | 55,817 | $ | 28,076 | $ | 22,068 | $ | (82,415 | ) | $ | 203,725 | ||||||||
Depreciation and amortization | 5,033 | 3,256 | 2,629 | 7,435 | 1,800 | 1,020 | 21,173 | ||||||||||||||||
Amortization of intangible assets | 1,547 | 380 | — | — | 169 | — | 2,096 | ||||||||||||||||
Adjusted EBITDA | $ | 141,692 | $ | 48,703 | $ | 58,446 | $ | 35,511 | $ | 24,037 | $ | (81,395 | ) | $ | 226,994 | ||||||||
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA (in thousands) |
|||||||||||||||||||||||
Three Months Ended (Unaudited) |
Corporate Finance & Restructuring (1) | Technology | Unallocated Corporate | Total | |||||||||||||||||||
Net income | $ | 62,395 | |||||||||||||||||||||
Interest income and other | 584 | ||||||||||||||||||||||
Interest expense | 3,022 | ||||||||||||||||||||||
Income tax provision | 22,708 | ||||||||||||||||||||||
Operating income | $ | 42,116 | $ | 23,885 | $ | 34,024 | $ | 16,432 | $ | 11,278 | $ | (39,026 | ) | $ | 88,709 | ||||||||
Depreciation and amortization | 2,284 | 1,490 | 1,499 | 3,655 | 901 | 275 | 10,104 | ||||||||||||||||
Amortization of intangible assets | 1,110 | 223 | — | — | 84 | — | 1,417 | ||||||||||||||||
Adjusted EBITDA | $ | 45,510 | $ | 25,598 | $ | 35,523 | $ | 20,087 | $ | 12,263 | $ | (38,751 | ) | $ | 100,230 | ||||||||
Six Months Ended (Unaudited) |
Corporate Finance & Restructuring (1) | Technology | Unallocated Corporate | Total | |||||||||||||||||||
Net income | $ | 109,942 | |||||||||||||||||||||
Interest income and other | 1,926 | ||||||||||||||||||||||
Interest expense | 5,961 | ||||||||||||||||||||||
Income tax provision | 37,682 | ||||||||||||||||||||||
Operating income | $ | 90,092 | $ | 44,173 | $ | 46,724 | $ | 28,322 | $ | 19,961 | $ | (73,761 | ) | $ | 155,511 | ||||||||
Depreciation and amortization | 4,243 | 2,802 | 2,992 | 7,131 | 1,688 | 691 | 19,547 | ||||||||||||||||
Amortization of intangible assets | 3,022 | 407 | — | — | 170 | — | 3,599 | ||||||||||||||||
Adjusted EBITDA | $ | 97,357 | $ | 47,382 | $ | 49,716 | $ | 35,453 | $ | 21,819 | $ | (73,070 | ) | $ | 178,657 | ||||||||
(1) Effective |
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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 |
||||||||||||||||||
Corporate Finance & Restructuring | $ | 347,971 | $ | 66,467 | 19.1 | % | 60 | % | $ | 496 | 2,167 | |||||||
169,496 | 14,994 | 8.8 | % | 58 | % | $ | 390 | 1,457 | ||||||||||
230,873 | 44,296 | 19.2 | % | 70 | % | $ | 599 | 1,076 | ||||||||||
Technology (1) | 115,875 | 20,930 | 18.1 | % | N/M | N/M | 662 | |||||||||||
84,941 | 11,611 | 13.7 | % | N/M | N/M | 972 | ||||||||||||
$ | 949,156 | $ | 158,298 | 16.7 | % | 6,334 | ||||||||||||
Unallocated Corporate | (42,377 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 115,921 | 12.2 | % | ||||||||||||||
Six Months Ended (Unaudited) |
||||||||||||||||||
Corporate Finance & Restructuring | $ | 713,981 | $ | 141,692 | 19.8 | % | 61 | % | $ | 505 | 2,167 | |||||||
345,570 | 48,703 | 14.1 | % | 58 | % | $ | 398 | 1,457 | ||||||||||
435,421 | 58,446 | 13.4 | % | 69 | % | $ | 566 | 1,076 | ||||||||||
Technology (1) | 216,588 | 35,511 | 16.4 | % | N/M | N/M | 662 | |||||||||||
166,149 | 24,037 | 14.5 | % | N/M | N/M | 972 | ||||||||||||
$ | 1,877,709 | $ | 308,389 | 16.4 | % | 6,334 | ||||||||||||
Unallocated Corporate | (81,395 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 226,994 | 12.1 | % | ||||||||||||||
Three Months Ended |
||||||||||||||||||
Corporate Finance & Restructuring (2) | $ | 317,912 | $ | 45,510 | 14.3 | % | 58 | % | $ | 482 | 2,170 | |||||||
164,760 | 25,598 | 15.5 | % | 58 | % | $ | 388 | 1,441 | ||||||||||
201,822 | 35,523 | 17.6 | % | 69 | % | $ | 557 | 1,039 | ||||||||||
Technology (1) | 97,444 | 20,087 | 20.6 | % | N/M | N/M | 589 | |||||||||||
82,653 | 12,263 | 14.8 | % | N/M | N/M | 992 | ||||||||||||
$ | 864,591 | $ | 138,981 | 16.1 | % | 6,231 | ||||||||||||
Unallocated Corporate | (38,751 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 100,230 | 11.6 | % | ||||||||||||||
Six Months Ended (Unaudited) |
||||||||||||||||||
Corporate Finance & Restructuring (2) | $ | 633,564 | $ | 97,357 | 15.4 | % | 59 | % | $ | 480 | 2,170 | |||||||
322,499 | 47,382 | 14.7 | % | 58 | % | $ | 382 | 1,441 | ||||||||||
371,417 | 49,716 | 13.4 | % | 68 | % | $ | 520 | 1,039 | ||||||||||
Technology (1) | 188,062 | 35,453 | 18.9 | % | N/M | N/M | 589 | |||||||||||
155,755 | 21,819 | 14.0 | % | N/M | N/M | 992 | ||||||||||||
$ | 1,671,297 | $ | 251,727 | 15.1 | % | 6,231 | ||||||||||||
Unallocated Corporate | (73,070 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 178,657 | 10.7 | % | ||||||||||||||
N/M Not meaningful | ||||||||||||||||||
(1) The majority of the |
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(2) Effective |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
|||||||
Six Months Ended |
|||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
Operating activities | |||||||
Net income | $ | 163,912 | $ | 109,942 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Depreciation and amortization | 21,173 | 19,547 | |||||
Amortization of intangible assets | 2,096 | 3,599 | |||||
Provision for expected credit losses | 19,923 | 11,188 | |||||
Share-based compensation | 18,101 | 13,903 | |||||
Deferred income taxes | (6,840 | ) | (6,571 | ) | |||
Acquisition-related contingent consideration | (1,157 | ) | 3,543 | ||||
Amortization of debt issuance costs and other | 387 | 1,296 | |||||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
Accounts receivable, billed and unbilled | (115,106 | ) | (245,999 | ) | |||
Notes receivable | (45,197 | ) | (22,539 | ) | |||
Prepaid expenses and other assets | (12,630 | ) | (6,718 | ) | |||
Accounts payable, accrued expenses and other | (8,934 | ) | (159 | ) | |||
Income taxes | (29,727 | ) | (13,122 | ) | |||
Accrued compensation | (145,509 | ) | (130,625 | ) | |||
Billings in excess of services provided | (84 | ) | (2,485 | ) | |||
Net cash used in operating activities | (139,592 | ) | (265,200 | ) | |||
Investing activities | |||||||
Purchases of property and equipment and other | (14,700 | ) | (29,027 | ) | |||
Maturity of short-term investment | 25,246 | — | |||||
Net cash provided by (used in) investing activities | 10,546 | (29,027 | ) | ||||
Financing activities | |||||||
Borrowings under revolving line of credit | 520,000 | 245,000 | |||||
Repayments under revolving line of credit | (460,000 | ) | (220,000 | ) | |||
Purchase and retirement of common stock | — | (20,982 | ) | ||||
Share-based compensation tax withholdings | (14,320 | ) | (11,922 | ) | |||
Proceeds on stock option exercises | 10,614 | 1,167 | |||||
Deposits and other | 2,023 | (2,206 | ) | ||||
Net cash provided by (used in) financing activities | 58,317 | (8,943 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (6,065 | ) | 15,021 | ||||
Net decrease in cash and cash equivalents | (76,794 | ) | (288,149 | ) | |||
Cash and cash equivalents, beginning of period | 303,222 | 491,688 | |||||
Cash and cash equivalents, end of period | $ | 226,428 | $ | 203,539 | |||
![](https://ml.globenewswire.com/media/NWE2OWZmZjctOTM3OC00M2Y0LTkzYTgtYjljNzU3MzQ5MDQ1LTEwMzU2NjM=/tiny/FTI-Consulting-Inc-.png)
Source: FTI Consulting, Inc.
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