Exhibit 99.1
FTI Consulting, Inc.
500 East Pratt Street
Suite 1400
Baltimore, Maryland 21202
(410) 951-9800
FOR FURTHER INFORMATION:
| AT FTI CONSULTING: | AT THE ABERNATHY MACGREGOR GROUP: | |
| Jack Dunn, President & CEO | Winnie Lerner/Jessica Liddell | |
| (410) 224-1483 | (212) 371-5999 |
FOR IMMEDIATE RELEASE
TUESDAY, FEBRUARY 14, 2006
FTI CONSULTING, INC. ANNOUNCES RECORD FOURTH-QUARTER, FULL-YEAR
RESULTS
Record Revenues and Cash Flow From Operations for Year and Quarter
Fourth-Quarter Revenues Up 58%, EPS Up 70%
Full-Year Revenues Up 26%, EPS Before One-Time Charges Up 26%
BALTIMORE, MD, February 14, 2006—FTI Consulting, Inc. (NYSE: FCN),a premier provider of problem-solving consulting and technology services to major corporations, financial institutions and law firms, today reported its results for the fourth quarter and year ended December 31, 2005. The company also provided its outlook for 2006.
Fourth-Quarter Results
For the quarter, revenues were $165.8 million, including a one-time previously announced $22.5 million success fee. This represents an increase of 58.1 percent compared with $104.9 million for the fourth quarter of 2004. Operating income before one-time charges increased 85.1 percent to $37.2 million from $20.1 million before one-time charges totaling $6.2 million in the comparable quarter last year as described below.
Earnings per share in the fourth quarter of 2005 increased 70.4 percent to $0.46 on a diluted basis, compared with $0.27 last year before one-time charges of approximately $0.09. Earnings per diluted share on a Generally Accepted Accounting Principles (GAAP) basis increased 156% to $0.46 for the fourth quarter of 2005 from $0.18 for the fourth quarter of 2004.
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Commenting on the quarter and year, Jack Dunn, FTI’s president and chief executive officer, said, “This past year for FTI was one of tremendous growth coupled with strong financial performance. Most importantly, our record performance for the year and fourth quarter have set the stage for 2006. We have made the investments to solidify our position as a market leader in technology, and each of our other practices has achieved a number one or number two vantage point in its field. We have invested in people and in domain expertise in such areas as energy, life sciences, telecom and creditor rights, and the year and quarter are testimony to the strength of our markets and traction of our brand. Looking ahead, we have never been more optimistic about our prospects for achieving our goal of growing the business to a highly profitable $1 billion revenue business in 2009.”
Earnings from operations before interest, taxes, depreciation and amortization (Adjusted EBITDA) were $41.8 million, 25.2 percent of revenues, compared with $25.3 million in the prior year before one-time charges (Adjusted EBITDA), 24.1 percent of revenues, an increase of 65.2 percent.
Cash flow provided by operations was $46.4 million compared with $28.2 million in the fourth quarter of 2004. At December 31, 2005, FTI had cash and cash equivalents of approximately $153.4 million. Total long-term debt at December 31, 2005 was $350.0 million, and no amounts were outstanding under the company’s revolving credit agreement. The company repurchased 500,000 shares of common stock during the fourth quarter at an average price of $29.92 per share, for an aggregate of approximately $15.0 million. At December 31, 2005, the remaining amount authorized under the company’s current share repurchase program was approximately $24.7 million, which was subsequently increased to $50.0 million for 2006.
Total headcount at December 31, 2005 was 1,338, and revenue-generating headcount was 1,005, an increase of 40 professionals from the end of the third quarter of 2005 and an increase of 349 professionals from the end of 2004. Utilization of revenue-generating personnel was approximately 79 percent for the fourth quarter, and average rate per hour for the quarter was approximately $326.
Fourth-Quarter 2005 Business Segment Results
Forensic/Litigation/Technology
Revenues increased 41.1 percent to $63.2 million in the fourth quarter from $44.8 million last year. Approximately $25.9 million in revenues were generated by the company’s combined technology operations compared to $15.4 million in the prior year. As previously reported, beginning with the first quarter of 2006, the company will report a separate technology segment, however certain technology practice groups, primarily trial technology, will continue as a part of the forensic and litigation segment. Segment EBITDA was $19.7 million, 31.1 percent of revenues, an increase of 66.9 percent from $11.8 million in the prior year, 26.4 percent of revenues.
Corporate Finance/Restructuring
Revenues were $75.6 million for the fourth quarter of 2005, including the previously announced success fee, compared with $39.2 for the fourth quarter of 2004, an increase of 92.9 percent. Segment EBITDA was $29.3 million, 38.8 percent of revenues, an increase of 146.2 percent from $11.9 million in the prior year, 30.3 percent of revenues.
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Economic Consulting
Revenues were $27.0 million in the fourth quarter of 2005, increasing 29.2 percent from $20.9 million in the fourth quarter of 2004. Segment EBITDA was $4.4 million, 16.2 percent of revenues, a decrease of 15.4 percent from $5.2 million in the prior year, 25.0 percent of revenues. In addition, as previously announced, FTI completed the acquisition of Competition Policy Associates, Inc. at the beginning of 2006.
Year-End 2005 Results
For the year ended December 31, 2005, revenues were $539.5 million, including the previously announced success fee, an increase of 26.3 percent compared with $427.0 million for 2004. Operating income before one-time charges increased 34.2 percent to $113.7 million from $84.7 million in the prior year before one-time charges, and earnings per diluted share before one-time charges increased 26.4 percent to $1.39 on a diluted basis compared with $1.10 last year. As previously reported, earnings per share were reduced by one-time charges totaling approximately $0.04 per share for 2005. These charges included an approximately $0.03 per diluted share for the write-off of deferred financing costs associated with the early extinguishment of the company’s term loan in connections with its debt offering in August 2005, and approximately $0.01 per diluted share in connection with its sub-lease of a portion of its New York City facility. Earnings per share were reduced by one-time charges totaling approximately $0.09 per share for 2004 as described above. Earnings per share on a GAAP basis were $1.35 for 2005 and $1.01 for 2004, an increase of 33.7 percent.
Cash flow provided by operations for the year ended December 31, 2005 was a record $99.4 million compared with $58.4 million in the prior year. Adjusted EBITDA before one-time charges was $130.9 million, 24.3 percent of revenues, compared with $100.8 million in the prior year, 23.6 percent of revenues, an increase of 29.9 percent.
Utilization of revenue-generating personnel was approximately 79 percent for the full year 2005 compared with 77 percent for the prior year. Average rate per hour for the year was $332 compared to $343 for the prior year, primarily as a result of the increased hiring of lesser-experienced staff coupled with larger projects.
For the year, forensic/litigation/technology revenues increased 23.2 percent to $220.1 million, from $178.7 million last year. Approximately $76.9 million in revenues were generated by the company’s combined technology operations compared to $51.5 million in the prior year. Segment EBITDA was $70.4 million, 32.0 percent of revenues, an increase of 39.1 percent from $50.6 million in the prior year, 28.3 percent of revenues.
Corporate finance/restructuring revenues were $211.0 million, including the previously announced success fee, 29.8 percent greater than the $162.5 million in 2004. Segment EBITDA was $70.8 million, 33.6 percent of revenues, an increase of 39.6 percent from $50.7 million in the prior year, 31.2 percent of revenues.
Economic consulting revenues were $108.4 million in 2005, increasing 26.2 percent from $85.9 million in 2004. Segment EBITDA was $24.3 million, 22.4 percent of revenues, an increase of 25.9 percent from $19.3 million in the prior year, 22.5 percent of revenues.
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Outlook for 2006
Revenues are anticipated to range from $616.0 million to $640.0 million, and earnings per diluted share to range from $1.46 to $1.55, prior to the impact of expensing stock options in accordance with FASB Statement No.123R. Based on options outstanding at December 31, 2005, the company estimates that the expensing of stock options will reduce 2006 earnings per share by $0.13, plus the effect of options that may be issued in connection with the company’s hiring, performance evaluation and retention programs as well as potential acquisitions and the price of the company’s stock, none of which can be presently predicted. For comparative purposes, earnings per diluted share for 2005 would have been reduced by approximately $0.18 per share if 123R had been adopted at the beginning of 2005. EBITDA before the expensing of stock options is expected to range from $147.0 million to $154.0 million. Cash flow from operations is expected to range between $85 million and $90 million.
Average bill rates per hour in 2006 are expected to range from $342 to $344 and utilization is anticipated to range from approximately 79 percent to 80 percent (on a 2,032 hours base). Revenue-generating headcount at the end of 2006 is anticipated to range from 1,127 to 1,155.
The accompanying table indicates anticipated results and applicable business metrics by the company’s four business segments for 2006 and is presented prior to the impact of expensing stock options.
Fourth-Quarter and Year-End Conference Call
FTI will hold a conference call to discuss fourth-quarter and year-end results and management’s outlook for 2006 at 11:00 a.m. Eastern time on Wednesday, February 15, 2006. The call can be accessed live and will be available for replay over the Internet by logging onto www.vcall.com as well as on the company’s website, www.fticonsulting.com, for 90 days.
About FTI Consulting
FTI is a premier provider of problem-solving consulting and technology services to major corporations, financial institutions and law firms when confronting critical issues that shape their future and the future of their clients, such as financial and operational improvement, major litigation, mergers and acquisitions and regulatory issues. Strategically located in 25 of the major US cities, London and Melbourne, FTI’s total workforce of more than 1,300 employees includes numerous PhDs, MBAs, CPAs, CIRAs and CFEs, who are committed to delivering the highest level of service to clients.
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Note: Although EBITDA and Adjusted EBITDA (excluding one-time charges) are not measures of financial condition or performance determined in accordance with GAAP, FTI believes that it is a useful operating performance measure for evaluating its results of operations from period to period and as compared to its competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in its industry. FTI uses EBITDA to evaluate and compare the operating performance of its segments and it is one of the primary measures used to determine employee bonuses. FTI also uses EBITDA to value businesses it acquires or anticipates acquiring. A reconciliation of Adjusted EBITDA to net earnings and EBITDA is included in the accompanying tables to this press release. Adjusted EBITDA and EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. In addition, because the calculation of EBITDA in the maintenance covenants contained in FTI’s credit facilities is based on accounting policies in use, consistently applied from the time the indebtedness was incurred, Adjusted EBITDA and EBITDA as supplemental financial measures are also indicative of the company’s capacity to service debt and thereby provides additional useful information to investors regarding the company’s financial condition and results of operations. Adjusted EBITDA and EBITDA for purposes of those covenants are not calculated in the same manner as they are calculated in the accompanying table.
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. Further, preliminary results are subject to normal year-end adjustments. 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, retention of staff and clients and other risks described in the company’s filings with the Securities and Exchange Commission. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.
FINANCIAL TABLES FOLLOW
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2005 AND 2004
(in thousands, except per share data)
| Year Ended | ||||||||
| December 31, 2005 | December 31, 2004 | |||||||
Revenues | $ | 539,545 | $ | 427,005 | ||||
Direct cost of revenues | 291,592 | 234,970 | ||||||
Selling, general and administrative expense | 126,807 | 102,060 | ||||||
Non-cash loss from subleased facilities | 920 | 4,670 | ||||||
Amortization of other intangible assets | 6,534 | 6,836 | ||||||
| 425,853 | 348,536 | |||||||
Operating income | 113,692 | 78,469 | ||||||
Other income (expense) | ||||||||
Interest expense, net | (13,189 | ) | (5,611 | ) | ||||
Discount on note receivable | — | (475 | ) | |||||
Loss on early estinguishment of term loans | (1,687 | ) | — | |||||
Litigation settlements | (1,629 | ) | 1,672 | |||||
Income from operations before income tax provision | 97,187 | 74,055 | ||||||
Income tax provision | 40,819 | 31,177 | ||||||
Net income | $ | 56,368 | $ | 42,878 | ||||
Earnings per common share - basic | $ | 1.38 | $ | 1.02 | ||||
Weighted average common shares outstanding - basic | 40,947 | 42,099 | ||||||
Earnings per common share - diluted | $ | 1.35 | $ | 1.01 | ||||
Weighted average common shares outstanding - diluted | 41,787 | 42,512 | ||||||
Supplemental Financial Data
| Year Ended | ||||||||
| December 31, 2005 | December 31, 2004 | |||||||
| (in thousands) | ||||||||
EBITDA Reconciliation: | ||||||||
Adjusted EBITDA(2) | $ | 130,877 | $ | 100,760 | ||||
Non-cash loss from subleased facilities | (920 | ) | (4,670 | ) | ||||
Litigation settlements | 1,629 | (1,672 | ) | |||||
EBITDA(1) | 131,586 | 94,418 | ||||||
Depreciation and other amortization | 11,360 | 9,113 | ||||||
Amortization of other intangible assets | 6,534 | 6,836 | ||||||
Operating income | 113,692 | 78,469 | ||||||
Litigation settlements | (1,629 | ) | 1,672 | |||||
Interest expense, net | (13,189 | ) | (5,611 | ) | ||||
Discount on note receivable | — | (475 | ) | |||||
Loss on early estinguishment of term loans | (1,687 | ) | — | |||||
Income tax | (40,819 | ) | (31,177 | ) | ||||
Net income | $ | 56,368 | $ | 42,878 | ||||
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004
(in thousands, except per share data)
| Three Months Ended | ||||||||
| December 31, 2005 | December 31, 2004 | |||||||
| (unaudited) | ||||||||
Revenues | $ | 165,825 | $ | 104,887 | ||||
Direct cost of revenues | 88,714 | 57,976 | ||||||
Selling, general and administrative expense | 37,697 | 25,712 | ||||||
Non-cash loss from subleased facilities | — | 4,670 | ||||||
Amortization of other intangible assets | 2,225 | 2,616 | ||||||
| 128,636 | 90,974 | |||||||
Operating income | 37,189 | 13,913 | ||||||
Other income (expense) | ||||||||
Interest expense, net | (4,997 | ) | (1,433 | ) | ||||
Discount on note receivable | — | (475 | ) | |||||
Litigation settlements | (638 | ) | 1,672 | |||||
Income from operations before income tax provision | 31,554 | 13,677 | ||||||
Income tax provision | 13,253 | 6,060 | ||||||
Net income | $ | 18,301 | $ | 7,617 | ||||
Earnings per common share - basic | $ | 0.47 | $ | 0.18 | ||||
Weighted average common shares outstanding - basic | 38,537 | 41,994 | ||||||
Earnings per common share - diluted | $ | 0.46 | $ | 0.18 | ||||
Weighted average common shares outstanding - diluted | 39,959 | 42,450 | ||||||
Supplemental Financial Data
| Three Months Ended | ||||||||
| December 31, 2005 | December 31, 2004 | |||||||
| (in thousands) | ||||||||
EBITDA Reconciliation: | ||||||||
Adjusted EBITDA(2) | $ | 41,828 | $ | 25,337 | ||||
Non-cash loss from subleased facilities | — | (4,670 | ) | |||||
Litigation settlements | 638 | (1,672 | ) | |||||
EBITDA(1) | 42,466 | 18,995 | ||||||
Depreciation and other amortization | 3,052 | 2,466 | ||||||
Amortization of other intangible assets | 2,225 | 2,616 | ||||||
Operating income | 37,189 | 13,913 | ||||||
Litigation settlements | (638 | ) | 1,672 | |||||
Interest expense, net | (4,997 | ) | (1,433 | ) | ||||
Discount on note receivable | — | (475 | ) | |||||
Income tax | (13,253 | ) | (6,060 | ) | ||||
Net income | $ | 18,301 | $ | 7,617 | ||||
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2005 AND 2004
(in thousands)
| December 31, 2005 | December 31, 2004 | |||||||
Operating activities | ||||||||
Net income | $ | 56,368 | $ | 42,878 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation and other amortization | 11,360 | 9,114 | ||||||
Amortization of other intangible assets | 6,534 | 6,836 | ||||||
Provision for doubtful accounts | 5,482 | 7,062 | ||||||
Income tax benefit from stock option exercises | 3,564 | 2,181 | ||||||
Loss on early estinguishment of term loans | 1,687 | — | ||||||
Non-cash compensation expense | 1,956 | 1,324 | ||||||
Non-cash loss from subleased facilities | 920 | 4,670 | ||||||
Non-cash interest and other | 2,741 | 1,948 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (34,664 | ) | (27,860 | ) | ||||
Prepaid expenses and other assets | (535 | ) | (10,328 | ) | ||||
Accounts payable and other liabilities | 7,911 | 13,824 | ||||||
Accrued compensation expense | 30,467 | 6,568 | ||||||
Billings in excess of services provided | (2,921 | ) | (7,412 | ) | ||||
Income taxes payable | 8,509 | 7,638 | ||||||
Net cash provided by operating activities | 99,379 | 58,443 | ||||||
Investing activities | ||||||||
Purchases of property and equipment | (17,827 | ) | (11,939 | ) | ||||
Payments for acquisition of businesses, including contingent payments and acquisition costs | (52,182 | ) | (1,253 | ) | ||||
Proceeds from note receivable due from purchasers of former subsidiary | 5,525 | — | ||||||
Change in other assets | (374 | ) | (501 | ) | ||||
Net cash used in investing activities | (64,858 | ) | (13,693 | ) | ||||
Financing activities | ||||||||
Issuance of debt securities | 350,000 | — | ||||||
Purchase and retirement of common stock | (148,050 | ) | (10,810 | ) | ||||
Payments of long-term debt | (155,000 | ) | (16,250 | ) | ||||
Borrowings under long-term debt arrangements | 50,000 | — | ||||||
Borrowings under revolving credit facility | 33,500 | 47,500 | ||||||
Payments of revolving credit facility | (33,500 | ) | (47,500 | ) | ||||
Issuance of common stock under equity compensation plans | 9,653 | 2,870 | ||||||
Payments of debt financing fees, capital lease obligations and other | (13,445 | ) | (621 | ) | ||||
Net cash provided by (used in) financing activities | 93,158 | (24,811 | ) | |||||
Net increase in cash and cash equivalents | 127,679 | 19,939 | ||||||
Cash and cash equivalents, beginning of period | 25,704 | 5,765 | ||||||
Cash and cash equivalents, end of period | $ | 153,383 | $ | 25,704 | ||||
FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
| Revenues | Adjusted EBITDA (2) | Margin | Utilization | Average Rate(3) | Billable Headcount | |||||||||||||
| (in thousands) | ||||||||||||||||||
Three Months Ended December 31, 2005 | ||||||||||||||||||
Forensic and Litigation Consulting | $ | 63,196 | $ | 19,681 | 31.1 | % | 77 | % | $ | 271 | 485 | |||||||
Corporate Finance/Restructuring | 75,586 | 29,302 | 38.8 | % | 83 | % | $ | 392 | 336 | |||||||||
Economic Consulting | 27,043 | 4,374 | 16.2 | % | 77 | % | $ | 357 | 184 | |||||||||
EBITDA before corporate expenses | $ | 165,825 | 53,357 | 32.2 | % | 79 | % | $ | 326 | 1,005 | ||||||||
Corporate expenses | (11,529 | ) | ||||||||||||||||
Adjusted EBITDA(2) | $ | 41,828 | 25.2 | % | ||||||||||||||
Year Ended December 31, 2005 | ||||||||||||||||||
Forensic and Litigation Consulting | $ | 220,120 | $ | 70,380 | 32.0 | % | 76 | % | $ | 275 | 485 | |||||||
Corporate Finance/Restructuring | 211,027 | 70,809 | 33.6 | % | 82 | % | $ | 396 | 336 | |||||||||
Economic Consulting | 108,398 | 24,254 | 22.4 | % | 82 | % | $ | 368 | 184 | |||||||||
EBITDA before corporate expenses | $ | 539,545 | 165,443 | 30.7 | % | 79 | % | $ | 332 | 1,005 | ||||||||
Corporate expenses | (34,566 | ) | ||||||||||||||||
Adjusted EBITDA(2) | $ | 130,877 | 24.3 | % | ||||||||||||||
Three Months Ended December 31, 2004 | ||||||||||||||||||
Forensic and Litigation Consulting | $ | 44,760 | $ | 11,819 | 26.4 | % | 72 | % | $ | 289 | 357 | |||||||
Corporate Finance/Restructuring | 39,223 | 11,898 | 30.3 | % | 77 | % | $ | 420 | 243 | |||||||||
Economic Consulting | 20,904 | 5,221 | 25.0 | % | 75 | % | $ | 360 | 145 | |||||||||
EBITDA before corporate expenses | $ | 104,887 | 28,938 | 27.6 | % | 74 | % | $ | 347 | 745 | ||||||||
Corporate expenses | (3,601 | ) | ||||||||||||||||
Adjusted EBITDA(2) | $ | 25,337 | 24.2 | % | ||||||||||||||
Year Ended December 31, 2004 | ||||||||||||||||||
Forensic and Litigation Consulting | $ | 178,650 | $ | 50,556 | 28.3 | % | 74 | % | $ | 287 | 357 | |||||||
Corporate Finance/Restructuring | 162,495 | 50,714 | 31.2 | % | 82 | % | $ | 407 | 243 | |||||||||
Economic Consulting | 85,860 | 19,333 | 22.5 | % | 78 | % | $ | 366 | 145 | |||||||||
EBITDA before corporate expenses | $ | 427,005 | 120,603 | 28.2 | % | 77 | % | $ | 343 | 745 | ||||||||
Corporate expenses | (19,843 | ) | ||||||||||||||||
Adjusted EBITDA(2) | $ | 100,760 | 23.6 | % | ||||||||||||||
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004
(in thousands, except per share amounts)
| December 31, 2005 | December 31, 2004 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 153,383 | $ | 25,704 | ||||
Accounts receivable | ||||||||
Billed | 87,947 | 89,536 | ||||||
Unbilled | 56,871 | 30,663 | ||||||
Allowance for doubtful accounts and unbilled services | (17,330 | ) | (16,693 | ) | ||||
| 127,488 | 103,506 | |||||||
Other current assets | 18,168 | 21,359 | ||||||
Total current assets | 299,039 | 150,569 | ||||||
Property and equipment, net | 29,302 | 23,342 | ||||||
Goodwill, net | 576,612 | 507,656 | ||||||
Other intangible assets, net | 21,454 | 10,978 | ||||||
Other assets | 40,164 | 15,980 | ||||||
Total assets | $ | 966,571 | $ | 708,525 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable, accrued expenses and other | $ | 22,666 | $ | 20,771 | ||||
Accrued compensation | 72,688 | 39,383 | ||||||
Current portion of long-term debt | — | 21,250 | ||||||
Billings in excess of services provided | 10,477 | 8,924 | ||||||
Total current liabilities | 105,831 | 90,328 | ||||||
Long-term debt, less current portion | 348,431 | 83,750 | ||||||
Deferred income taxes, deferred rent and other liabilities | 58,040 | 38,293 | ||||||
Stockholders’ equity | ||||||||
Preferred stock, $0.01 par value; 5,000 shares authorized, none outstanding | — | — | ||||||
Common stock, $0.01 par value; 75,000 shares authorized; 39,009 shares issued and outstanding in 2005 and 42,487 shares issued and outstanding in 2004 | 390 | 425 | ||||||
Additional paid-in capital | 238,055 | 333,735 | ||||||
Unearned compensation | (11,089 | ) | (8,551 | ) | ||||
Retained earnings | 226,913 | 170,545 | ||||||
Accumulated other comprehensive loss | — | — | ||||||
Total stockholders’ equity | 454,269 | 496,154 | ||||||
Total liabilities and stockholders’ equity | $ | 966,571 | $ | 708,525 | ||||
FTI CONSULTING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2005 AND 2004
| (1) | We define EBITDA (earnings before net interest, taxes, depreciation and amortization) as operating income before depreciation and amortization which may not be similar to EBITDA measures of other companies. EBITDA is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that EBITDA is useful to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund capital expenditures and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. EBITDA is a common alternative performance measure used by investors, analysts and credit rating agencies to evaluate and compare the operating performance and value of companies with our industry. |
| (2) | Adjusted EBITDA represents EBITDA excluding certain gains, losses and other charges that do not relate to the ongoing operations of our business. Adjusted EBITDA as defined above may not be similar to adjusted EBITDA measures of other companies. Adjusted EBITDA is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our statements of income. We believe that adjusted EBITDA is useful to investors because it allows investors to evaluate our operating results and related financial performance for different periods on a more comparable basis by excluding items that do not relate to the ongoing operations of our business. |
| (3) | Effective January 1, 2005, we modified our calculation of average billable rate per hour to include revenue realization adjustments and success fees earned as part of employee revenues. Average billable rates per hour for prior periods have been adjusted to conform to our current presentation. |
FTI CONSULTING, INC.
OUTLOOK RANGE FOR 2006 BY BUSINESS SEGMENT
PRIOR TO THE IMPACT OF EXPENSING STOCK OPTIONS IN ACCORDANCE WITH FASB NO. 123R
| Revenues | EBITDA (1) | Margin | Utilization (2) | Average Rate(2) | Revenue Generating Headcount | ||||||||||||
| (in thousands) | |||||||||||||||||
Outlook Range for 2006 | |||||||||||||||||
From ($1.46 per share) | |||||||||||||||||
Forensic and Litigation | $ | 179,000 | $ | 56,000 | 31.3 | % | 76 | % | $ | 305 | 356 | ||||||
Technology Consulting | $ | 71,000 | 23,000 | 32.4 | % | 72 | % | $ | 287 | 167 | |||||||
Corporate Finance/Restructuring | $ | 215,000 | 66,000 | 30.7 | % | 82 | % | $ | 386 | 363 | |||||||
Economic Consulting | $ | 151,000 | 43,000 | 28.5 | % | 80 | % | $ | 361 | 241 | |||||||
| $ | 616,000 | 188,000 | 30.5 | % | 79 | % | $ | 344 | 1,127 | ||||||||
Corporate expenses | 41,000 | 6.7 | % | ||||||||||||||
EBITDA(1) | $ | 147,000 | 23.9 | % | |||||||||||||
To ($1.47 per share-[budget]) | |||||||||||||||||
Forensic and Litigation | $ | 181,700 | $ | 57,400 | 31.6 | % | 76 | % | $ | 305 | 361 | ||||||
Technology Consulting | 73,000 | 24,000 | 32.9 | % | 72 | % | $ | 287 | 172 | ||||||||
Corporate Finance/Restructuring | 218,800 | 66,800 | 30.5 | % | 82 | % | $ | 386 | 369 | ||||||||
Economic Consulting | 152,700 | 43,400 | 28.4 | % | 80 | % | $ | 361 | 244 | ||||||||
| $ | 626,200 | 191,600 | 30.6 | % | 79 | % | $ | 344 | 1,146 | ||||||||
Corporate expenses | 41,900 | 6.7 | % | ||||||||||||||
EBITDA(1) | $ | 149,700 | 23.9 | % | |||||||||||||
To ($1.55 per share) | |||||||||||||||||
Forensic and Litigation | $ | 185,000 | $ | 58,000 | 31.4 | % | 77 | % | $ | 302 | 365 | ||||||
Technology Consulting | $ | 78,000 | 26,000 | 33.3 | % | 72 | % | $ | 287 | 172 | |||||||
Corporate Finance/Restructuring | $ | 224,000 | 68,000 | 30.4 | % | 83 | % | $ | 384 | 375 | |||||||
Economic Consulting | $ | 153,000 | 44,000 | 28.8 | % | 81 | % | $ | 360 | 243 | |||||||
| $ | 640,000 | 196,000 | 30.6 | % | 80 | % | $ | 342 | 1,155 | ||||||||
Corporate expenses | 42,000 | 6.6 | % | ||||||||||||||
EBITDA(1) | $ | 154,000 | 24.1 | % | |||||||||||||
| (1) | We define EBITDA (earnings before net interest, taxes, depreciation and amortization) as operating income before depreciation and amortization which may not be similar to EBITDA measures of other companies. EBITDA is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that EBITDA is useful to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund capital expenditures and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. EBITDA is a common alternative performance measure used by investors, analysts and credit rating agencies to evaluate and compare the operating performance and value of companies with our industry. |
| (2) | Utilization and Average Rate metrics do not apply to significant portions of the Technology Consulting segment |