Investor Presentation September 2012 FTI Consulting Exhibit 99.1 |
Cautionary Note About Forward-Looking Statements - 2 - This presentation 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, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this presentation, words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and estimates will be achieved, and the Company’s actual results may differ from our expectations, beliefs and estimates. The Company has experienced fluctuating revenues, operating income and cash flow in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where services are performed, adverse financial, real estate or other market and general economic conditions, which could impact each of our segments differently, the pace and timing of the consummation and integration of past and future 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 under the heading “Item 1A. Risk Factors” in the Company’s most recent Form 10-K and in the Company's other filings with the Securities and Exchange Commission, including the risks set forth under “Risks Related to Our Business Segments” and “Risks Related to Our Operations”. 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. |
FTI Consulting Overview - 3 - Balanced set of services to meet its client’s needs at all points throughout the economic cycle Expertise and scale advantage Largest provider of consulting services in bankruptcies, disputes, investigations, crises and issues involving compliance and political risk Geographic footprint is a competitive advantage in serving clients, giving FTI Consulting access to key markets around the globe as capital migrates Capital deployment focused on value-enhancing initiatives Healthy balance sheet and consistent cash flows FTI Consulting is a global business advisory firm dedicated to helping organizations protect and enhance their enterprise value in an increasingly complex legal, regulatory and economic environment |
Today FTI Consulting is an advisor to 93 of the world’s top 100 law firms, 64 of the world’s 100 largest companies and 9 of the world’s top 10 bank holding companies Critical Thinking At The Critical Time™ - 4 - Corporate Finance/Restructuring is the world leader in restructuring and crisis management #1 Crisis Management Firm in The Deal Pipeline’s League Tables of Crisis Management Firms Economic Consulting is unmatched in reputation and expertise Named Global Competition Review’s Leading Antitrust Economics Firm Named Global Competition Review’s 20 Best Economics Firms in the World Forensic and Litigation Consulting is a pioneer of visual support in the courtroom and the global leader in commercial arbitration #1 on Who’s Who Legal List of Most Highly Regarded Firms for Commercial Arbitration Technology is the industry leader in E-discovery software Member of the "Leaders" Quadrant in Gartner's "Magic Quadrant for E-Discovery Software" Report Ringtail® 8.2 E-discovery Software Named to KMWorld magazine's Trend-Setting Products List Strategic Communications is the global leader in strategic business communications #1 Communications Advisor in mergermarket League Tables of PR Advisers to Global M&A by Volume #1 Communications Advisor in mergermarket League Tables of PR Advisors to M&A by Volume in Asia- Pacific, Europe and the United Kingdom |
- 5 - FTI Consulting has a balanced portfolio of pro-cyclical and counter-cyclical global businesses that offer event-driven services and solutions Global Business with Diverse Event-Driven Offering United States Rest of World 2Q12 Segment Revenues 2Q12 Geographic Revenues Corporate Finance/Restructuring Economic Consulting Forensic and Litigation Consulting Technology Strategic Communications 28% 23% 12% 25% 12% 26% 74% Corporate Finance/Restructuring Bankruptcy support services Private equity Performance improvement Economic Consulting Antitrust & competition economics Securities litigation & risk management Intellectual property International arbitration Labor & employment Public policy Regulated industries Business valuation Forensic and Litigation Consulting Forensic accounting & advisory services Global risk & investigations practice Compliance, monitoring & receivership Intellectual property Dispute advisory services Trial services Financial & enterprise data analytics Technology Computer forensics & investigations Discovery consulting E-discovery software & services Strategic Communications Financial communications Corporate communications Strategy consulting & research Crisis communications Public affairs Creative engagement Restructuring/turnaround services Transaction advisory services Interim management Investment banking |
Today’s macroeconomic and consulting industry backdrop has created unique opportunities and competitive advantages for FTI Consulting Current Macroeconomic & Industry Opportunities - 6 - Macroeconomic Backdrop Opportunities FTI Consulting has outperformed peers in a strong economy as well as in a down economy Regulation and investigations are becoming increasingly more complex and global; this will drive FTI Consulting’s business as these larger scale engagements will require global consultants with deep litigation and investigation knowledge Industry Backdrop Opportunities Industry consolidation is very healthy for the market and FTI Consulting Industry consolidation has allowed FTI Consulting to move from a middle sized firm to a global player Expect industry consolidation to continue for both structural and strategic reasons Consolidation will rationalize competition and standardize how people think about FTI Consulting’s products LIBOR probe FCPA investigations Whistleblowing cases Probes of trading losses |
The “One Brand” initiative has enhanced FTI Consulting’s ability to bring our consulting services to the market in a more powerful and consistent manner The Globalization of FTI Consulting - 7 - The increasingly aggressive regulatory and enforcement environment will bode very well for large consulting firms with global reach and reputations like FTI Consulting Every geographic region is focused on expanding its presence and offering: Key geographies: Asia-Pacific, Europe, Middle East & Africa and Latin America 1H12 Revenues Asia Pacific EMEA Latin America 1% 1H12 Y/Y Revenue Growth 50% 8% 74% 26% United States Rest of World 1H12 Revenue Growth 0% 5% 15% 20% 25% 30% 35% 40% 45% 50% 10% |
FTI Consulting Industry Initiatives FTI Consulting’s industry practices expand the scope of our services to better fit the unique demands of each industry, leveraging our resources - people and capabilities - and ultimately improving segment profitability Industry groups identify key industry trends that will drive demand for FTI Consulting’s services, ensuring FTI Consulting’s capabilities are organized to take advantage of key industry trends FTI Consulting’s industry strategy enables the Company to pursue additional non- event driven consulting services that will enhance overall revenues and lessen the cyclicality of FTI Consulting’s portfolio of products FTI Consulting is focused on enhancing our capabilities in attractive industries including Healthcare, Banking & Financial Services, Insurance and Energy & Utilities Aligning our business by industry enables FTI Consulting to maximize resources across segments, as well as go-to-market more effectively and gain share - 8 - Aerospace & Defense Agriculture Automotive Banking & Financial Services Construction Energy & Utilities Environmental Government & Public Contracts Healthcare Hospitality Information Technology Insurance Media & Entertainment Mining Petroleum & Chemicals Pharmaceuticals & Life Sciences Real Estate Retail Telecommunications Transportation FTI Consulting Industry Expertise |
As the challenges and opportunities our clients face are becoming increasingly complex, FTI Consulting’s ability to provide seamless strategic services across multiple geographies, industries and professional disciplines drive demand for our services The FTI Consulting Matrix - 9 - FTI Consulting’s matrix organizational structure appropriately emphasizes the segment, geography and industry drivers of our businesses, allowing for improved understanding and response to our client’s needs and increased leverage of resources, knowledge and solutions in our rapidly growing markets Three strategies that drive our business: Segment: Continue to build out diverse platform of services and solutions Geography: Replicate North American business model across existing global platform Industry: Develop integrated industry focused solutions Segment Industry Geography |
Demand for FTI Consulting’s services and expertise is driven by the aggressive regulatory and enforcement environment Current Demand Drivers - 10 - Continued demand for bankruptcy and restructuring engagements in the U.S. and Latin America drives growth in Corporate Finance/Restructuring in 2012 with an expected demand uptick in Europe in 2013 Economic Consulting driven by continued strong demand for antitrust, M&A- related activity and financial economics engagements The recent increase in whistleblowing complaints and stable demand for FCPA and financial investigations drives demand in Forensic and Litigation Consulting Larger and more complex E-discovery engagements are trending towards providers with scale, robust software and global consultants with deep investigative and litigative knowledge, driving demand for our Technology business Strategic Communications remains well-positioned to take advantage of macroeconomic conditions as they improve |
Case Study: M&A Lifecycle and FTI Consulting’s Integrated Service Offering - 11 - Employee Outreach and Engagement M&A Digital/Social Media Strategies Media Relations Investor Relations First Look Services Antitrust & Competition Economics Merger Integration Services Post-Acquisition Disputes Purchase Price Dispute Services Post-Merger Communication Implementation Change Management Communications Corporate Finance/Restructuring Forensic Litigation and Consulting Economic Consulting Technology Strategic Communications Valuation Services Buyer Services Seller Services Lender Services M&A Fraud Services Intellectual Property Valuation & Protection Transactional Due Diligence System Audits/IT Due Diligence E-discovery Tax Services Second Requests M&A Communications Proxy Communications Pre-Deal Preparation and Evaluation Due Diligence M&A Lifecycle Post-Close Execution Pre-Close Planning Post-Close Planning |
FTI Consulting’s unique integrated approach to protect and enhance enterprise value requires exceptional talent Our People - 12 - FTI Consulting is a global company with global leaders and advisors 3,800 employees in 92 offices and 24 countries around the world Our collective expertise spans countless sectors, scenarios and functions and fuels our ability to anticipate even the most complex challenges, sensitivities and outcomes 5 diverse and global business segments serving 20 industries We hire the best and continue to invest in their on-going development The FTI Consulting Matrix defines established leadership in North America, EMEA, Asia Pacific and Latin America Diverse Board of Directors offering global insights, extensive industry experience and tenured leadership 364 Senior Managing Directors, 471 Managing Directors and access to three Nobel Laureates FTI employees are supported throughout their career development through our educational and thought leadership initiatives: New Hire Orientation, New Director School, FTI University and Leadership Forums Employees Source & Acquire Attract & Retain Service & Support Grow & Develop Measure & Assess Reward & Engage |
Portfolio investments, coupled with continued cash generation and operational discipline, demonstrated in financial results FTI Consulting’s Financial Position Is Strong - 13 - Track record of industry-leading growth in revenue and profitability Significant cash flow generation Consistent and strong cash flow from operations - $173.8 million in 2011 and $195.1 million in 2010 $166.0 million in cash and cash equivalents on the balance sheet as of June 30, 2012 Leverage as of June 30, 2012 - approximately 3:1 Balanced capital deployment aimed at productive and value enhancing initiatives for shareholders Acquisition strategy focused on building attractive, sustainable businesses Investing in brand and visibility to reinforce and enhance FTI Consulting's leadership $250 million share buyback program authorized in June 2012 |
FTI Consulting Summary - 14 - Balanced set of services to meet its client’s needs at all points throughout the economic cycle Expertise and scale advantage Largest provider of consulting services in bankruptcies, disputes, investigations, crises and issues involving compliance and political risk Geographic footprint is a competitive advantage in serving clients, giving Capital deployment focused on value-enhancing initiatives Healthy balance sheet and consistent cash flows FTI Consulting is a global business advisory firm dedicated to helping organizations protect and enhance their enterprise value in an increasingly complex legal, regulatory and economic environment FTI Consulting access to key markets around the globe as capital migrates |
Six Months Ended June 30, 2012 - 15 - ($ in thousands, except per share data) (1) We define adjusted earnings per diluted share as earnings per diluted share, excluding the net impact of special charges and loss on early extinguishment of debt that were incurred in that period. Revenues Operating expenses Direct cost of revenues Selling, general & administrative expense Special charges Operating income Other income (expense) Interest expense Income before income tax provision Income tax provision Net income Earnings per common share - diluted Adjusted earnings per common share - diluted (1) Interest income & other Acquisition-related contingent consideration Amortization of other intangible assets Weighted average common shares outstanding - diluted $67,779 $77,821 Six Months Ended June 30, 2012 2011 $791,471 $762,253 $195,049 $182,745 $26,782 $15,212 ($2,984) $1,595 Unaudited $2,919 $4,923 ($30,399) ($29,810) $40,299 $52,934 $14,121 $18,351 $26,178 $34,583 $0.61 $0.78 42,672 44,420 $1.02 $0.99 $723,692 $684,432 $11,007 $10,952 $493,838 $473,928 |
1H12 Results: Segment Performance - 16 - ($ in thousands, except headcount data) $791,471 $225,814 $55,974 $177,138 $29,705 $199,507 $36,915 $97,357 $26,064 $91,655 $9,499 Six Months Ended June 30, 2012 Corporate Finance/Restructuring Forensic & Litigation Consulting Economic Consulting Technology Adjusted EBITDA (1) Strategic Communications Corporate 2,903 24.8% 718 16.8% 808 18.5% 467 26.8% 311 10.4% 599 20.0% 15.2% $120,576 $158,157 ($37,581) Revenues Adjusted EBITDA (1) Margin Headcount $762,253 $209,150 $31,677 $176,281 $33,924 $168,739 $31,985 $108,165 $38,743 $99,918 $11,839 Six Months Ended June 30, 2011 Corporate Finance/Restructuring Forensic & Litigation Consulting Economic Consulting Technology Adjusted EBITDA (1) Strategic Communications Revenue- Generating Corporate 2,825 15.1% 730 19.2% 863 19.0% 409 261 11.8% 562 19.4% 15.5% $118,074 $148,168 ($30,094) Revenues Adjusted EBITDA (1) Margin Headcount (1) We define Adjusted EBITDA as net income before income tax provision, other income (expense), depreciation, amortization of intangible assets and special charges. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as the segments' share of consolidated operating income before depreciation, amortization of intangible assets and special charges. Although Adjusted EBITDA and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments. Revenue- Generating 35.8% |
Appendix |
Reconciliation of non-GAAP Financial Measures - 18 - ($ in thousands, except per share data) $43,498 $43,868 Add back: Special charges, net of tax effect (1) $1.02 $0.99 Weighted average common shares outstanding - diluted $26,178 $34,583 $0.41 $0.21 Adjusted earnings per common share (2) Net income Add back: Special charges, net of tax effect (1) Adjusted Net income Earnings per common share - diluted 42,672 44,420 $0.61 $0.78 $17,320 $9,285 2012 2011 Six Months Ended June 30, (1) The tax effect takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). The tax expense for the six months ended June 30, 2012 was $9,462 or $0.22 per share. The tax expense for the six months ended June 30, 2011 was $5,927 or $0.13 per share. (2) We define Adjusted Net Income and Adjusted EPS as net income and earnings per diluted share, respectively, excluding the net impact of any special charges and any loss on early extinguishment of debt that were incurred in that period. |
Reconciliation of Operating Income and Net Income to Adjusted EBITDA - 19 - ($ in thousands) Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. These non-GAAP 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 (Loss). Corporate Finance / Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Corp HQ Total Six Months Ended June 30, 2012 Net income 26,178 $ Interest income and other (2,919) Interest expense 30,399 Income tax provision 14,121 Operating income 40,230 $ 19,532 $ 33,871 $ 12,958 $ 1,287 $ (40,099) $ 67,779 Depreciation and amortization 1,723 1,923 1,429 6,164 1,369 2,400 15,008 Amortization of other intangible assets 2,905 997 797 3,976 2,332 - 11,007 Special charges 11,116 7,253 818 2,966 4,511 118 26,782 Adjusted EBITDA (1) 55,974 29,705 36,915 26,064 9,499 (37,581) 120,576 Six Months Ended June 30, 2011 Net income 34,583 $ Interest income and other (4,923) Interest expense 29,810 Income tax provision 18,351 Operating income 17,629 $ 30,186 $ 28,096 $ 29,364 $ 7,955 $ (35,409) $ 77,821 Depreciation and amortization 1,770 1,712 1,203 5,425 1,504 2,475 14,089 Amortization of other intangible assets 2,838 1,187 593 3,954 2,380 - 10,952 Special charges 9,440 839 2,093 - - 2,840 15,212 Adjusted EBITDA (1) 31,677 33,924 31,985 38,743 11,839 (30,094) 118,074 (1) We define Adjusted EBITDA as net income before income tax provision, other income (expense), depreciation, amortization of intangible assets and special charges. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as the segments' share of consolidated operating income before depreciation, amortization of intangible assets and special charges. Although Adjusted EBITDA and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments. |