• FTI Consulting Reports Record Third Quarter 2023 Financial Results

    ソース: Nasdaq GlobeNewswire / 26 10 2023 07:30:40   America/New_York

    • Third Quarter 2023 Revenues of $893.3 Million, Up 15% Compared to $775.9 Million in Prior Year Quarter
    • Third Quarter 2023 EPS of $2.34, Up 9% Compared to $2.15 in Prior Year Quarter
    • Company Raises Lower End of Revenue and EPS Guidance Ranges for Full Year 2023

    WASHINGTON, Oct. 26, 2023 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the third quarter ended September 30, 2023.

    Third quarter 2023 revenues of $893.3 million increased $117.4 million, or 15.1%, compared to revenues of $775.9 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation ("FX"), revenues increased $105.4 million, or 13.6%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand in the Corporate Finance & Restructuring, Forensic and Litigation Consulting, Strategic Communications and Technology segments. Net income of $83.3 million compared to $77.3 million in the prior year quarter. The increase in net income was due to higher revenues, which was partially offset by an increase in direct compensation, which includes the impact of a 7.8% increase in billable headcount, higher selling, general and administrative (“SG&A”) expenses, a higher effective tax rate and a decline in FX remeasurement gains compared to the prior year quarter. Adjusted EBITDA of $118.7 million, or 13.3% of revenues, compared to $99.0 million, or 12.8% of revenues, in the prior year quarter. Third quarter 2023 earnings per diluted share (“EPS”) of $2.34 compared to $2.15 in the prior year quarter.

    Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “This quarter we, yet again, delivered record revenues and earnings, reflecting our multi-year commitment to attract and develop the best professionals and, in turn, support their commitment to deliver for our clients as they face their greatest opportunities and challenges.”

    Cash Position and Capital Allocation

    Net cash provided by operating activities of $106.7 million for the quarter ended September 30, 2023 compared to $128.3 million for the quarter ended September 30, 2022. The year-over-year decrease in net cash provided by operating activities was primarily due to cash collections not keeping pace with the increase in revenues and not sufficiently offsetting the increase in salaries and other employee cash compensation, largely related to headcount growth, as well as higher operating expenses.

    Cash and cash equivalents of $201.1 million at September 30, 2023 compared to $327.0 million at September 30, 2022 and $203.5 million at June 30, 2023. Total debt, net of cash and short-term investments, of $59.4 million at September 30, 2023 compared to ($10.8) million at September 30, 2022 and $137.2 million at June 30, 2023. The sequential decrease in total debt, net of cash and short-term investments, was primarily due to the repayment of the $315.8 million principal amount of the Company’s 2.0% convertible senior notes due 2023 at maturity, which was partially offset by an increase in net borrowings of $285.0 million under the Company’s senior secured bank revolving credit facility.

    There were no share repurchases during the quarter ended September 30, 2023. As of September 30, 2023, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program.

    Third Quarter 2023 Segment Results

    Corporate Finance & Restructuring
    Revenues in the Corporate Finance & Restructuring segment increased $65.5 million, or 23.2%, to $347.6 million in the quarter compared to $282.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $62.5 million, or 22.2%, compared to the prior year quarter. The increase in revenues was primarily due to higher realized bill rates and demand for restructuring and business transformation & strategy services, as well as an increase in success fees. Adjusted Segment EBITDA of $68.1 million, or 19.6% of segment revenues, compared to $53.5 million, or 19.0% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by higher compensation, which includes the impact of a 9.8% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

    Forensic and Litigation Consulting
    Revenues in the Forensic and Litigation Consulting segment increased $22.8 million, or 15.9%, to $166.1 million in the quarter compared to $143.3 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations, data & analytics and construction solutions services. Adjusted Segment EBITDA of $21.5 million, or 12.9% of segment revenues, compared to $16.2 million, or 11.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses compared to the prior year quarter.

    Economic Consulting
    Revenues in the Economic Consulting segment increased $0.7 million, or 0.4%, to $193.9 million in the quarter compared to $193.2 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues decreased $3.5 million, or 1.8%, compared to the prior year quarter. The decrease in revenues was due to a decline in non-merger and acquisition (“M&A”)-related antitrust revenues, which was partially offset by an increase in international arbitration and M&A-related antitrust revenues. Adjusted Segment EBITDA of $27.8 million, or 14.3% of segment revenues, compared to $32.9 million, or 17.0% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher SG&A expenses, which was partially offset by lower compensation compared to the prior year quarter.

    Technology
    Revenues in the Technology segment increased $13.9 million, or 16.4%, to $98.9 million in the quarter compared to $84.9 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $12.5 million, or 14.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and litigation services, which was partially offset by lower demand for M&A-related “second request” services. Adjusted Segment EBITDA of $14.9 million, or 15.0% of segment revenues, compared to $13.2 million, or 15.6% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 14.8% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

    Strategic Communications
    Revenues in the Strategic Communications segment increased $14.4 million, or 19.9%, to $86.8 million in the quarter compared to $72.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $12.1 million, or 16.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for corporate reputation and public affairs services. Adjusted Segment EBITDA of $13.5 million, or 15.5% of segment revenues, compared to $12.9 million, or 17.9% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 6.2% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

    Health Solutions Practice Realignment
    Effective July 1, 2023, FTI Consulting modified the composition of two of the Company’s reportable segments to reflect changes in how FTI Consulting operates its business. The Company transferred 127 billable professionals from the health solutions practice within the Forensic and Litigation Consulting segment who focus on business transformation services in the healthcare and life sciences sector to the business transformation & strategy practice in the Corporate Finance & Restructuring segment. This change aligns this group of professionals with the broader business transformation capabilities within the Corporate Finance & Restructuring segment. Eighty-three billable professionals who focus on advisory and managed care services within the health solutions practice remained in the Forensic and Litigation Consulting segment. Prior period Corporate Finance & Restructuring and Forensic and Litigation Consulting segment financial information presented in the following Financial Tables has been reclassified to conform to the current period presentation.

    2023 Guidance
    The Company is raising the lower end of its full year 2023 guidance ranges for revenues and EPS. The Company now estimates revenues for full year 2023 will range between $3.350 billion and $3.400 billion, which compares to the prior range of between $3.330 billion and $3.400 billion. The Company now estimates EPS for full year 2023 will range between $6.70 and $7.20, which compares to the prior range of between $6.50 and $7.20. The Company does not currently expect Adjusted EPS to differ from EPS.

    Third Quarter 2023 Conference Call
    FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2023 financial results at 9:00 a.m. Eastern Time on Thursday, October 26, 2023. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations website here.

    About FTI Consulting
    FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 8,000 employees located in 31 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.03 billion in revenues during fiscal year 2022. More information can be found at www.fticonsulting.com.

    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 the United States ("GAAP"). Certain of these financial measures are considered not in conformity with GAAP ("non-GAAP financial measures") under the United States Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial measures:

    • Total Segment Operating Income
    • Adjusted EBITDA
    • Total Adjusted Segment EBITDA
    • Adjusted EBITDA Margin
    • Adjusted Net Income
    • Adjusted Earnings per Diluted Share
    • Free Cash Flow

    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.

    We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.

    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 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 U.S. and foreign tax laws, environmental, social and governance ("ESG")-related issues, climate change-related matters, scientific and technological developments, and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "commits," "aspires," "forecasts," "future," "goal," "seeks" 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 actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. Further, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Any references to standards of measurement and performance made regarding our climate change-, ESG- or other sustainability-related plans, goals, commitments, intentions, aspirations, forecasts or projections, or expectations are developing and based on 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 plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections, including any that are ESG- or sustainability-related, will result or be achieved. 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; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of the COVID-19 pandemic or any future public health crisis, and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading "Item 1A, Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023 and in the Company’s other filings with the SEC. 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.
    555 12th Street NW
    Washington, DC 20004
    +1.202.312.9100

    Investor & Media Contact:
    Mollie Hawkes
    +1.617.747.1791
    mollie.hawkes@fticonsulting.com


     
    FTI CONSULTING, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands, except per share amounts)
        
     September 30, December 31,
     2023 2022
     (Unaudited)  
    Assets   
    Current assets   
    Cash and cash equivalents$201,148  $491,688 
    Accounts receivable, net 1,207,016   896,153 
    Current portion of notes receivable 32,095   27,292 
    Prepaid expenses and other current assets 126,967   95,469 
    Total current assets 1,567,226   1,510,602 
    Property and equipment, net 164,922   153,466 
    Operating lease assets 202,505   203,764 
    Goodwill 1,226,356   1,227,593 
    Intangible assets, net 19,233   25,514 
    Notes receivable, net 73,673   55,978 
    Other assets 64,911   64,490 
    Total assets$3,318,826  $3,241,407 
    Liabilities and Stockholders’ Equity   
    Current liabilities   
    Accounts payable, accrued expenses and other$170,518  $173,953 
    Accrued compensation 481,007   541,892 
    Billings in excess of services provided 57,006   53,646 
    Total current liabilities 708,531   769,491 
    Long-term debt, net 285,000   315,172 
    Noncurrent operating lease liabilities 217,755   221,604 
    Deferred income taxes 157,724   162,374 
    Other liabilities 85,321   91,045 
    Total liabilities 1,454,331   1,559,686 
    Stockholders’ equity   
    Preferred stock, $0.01 par value; shares authorized — 5,000; none outstanding —   — 
    Common stock, $0.01 par value; shares authorized — 75,000; shares issued and outstanding — 35,510 (2023) and 34,026 (2022) 355   340 
    Additional paid-in capital 9,712   — 
    Retained earnings 2,033,132   1,858,103 
    Accumulated other comprehensive loss (178,704)  (176,722)
    Total stockholders’ equity 1,864,495   1,681,721 
    Total liabilities and stockholders’ equity$3,318,826  $3,241,407 


     
     
    FTI CONSULTING, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (in thousands, except per share data)
      
     Three Months Ended
    September 30,
     
     2023 2022
     (Unaudited)
    Revenues$893,261  $775,865 
    Operating expenses   
    Direct cost of revenues 598,804   526,654 
    Selling, general and administrative expenses 186,088   159,186 
    Amortization of intangible assets 1,340   2,315 
      786,232   688,155 
    Operating income 107,029   87,710 
    Other income (expense)   
    Interest income and other 5,147   7,771 
    Interest expense (4,474)  (2,378)
      673   5,393 
    Income before income tax provision 107,702   93,103 
    Income tax provision 24,385   15,836 
    Net income$83,317  $77,267 
    Earnings per common share ― basic$2.44  $2.29 
    Weighted average common shares outstanding ― basic 34,128   33,812 
    Earnings per common share ― diluted$2.34  $2.15 
    Weighted average common shares outstanding ― diluted 35,656   35,918 
    Other comprehensive loss, net of tax   
    Foreign currency translation adjustments, net of tax expense of $0$(18,228) $(48,475)
    Total other comprehensive loss, net of tax (18,228)  (48,475)
    Comprehensive income$65,089  $28,792 


     
     
    FTI CONSULTING, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (in thousands, except per share data)
      
     Nine Months Ended
    September 30,
     
     2023 2022
     (Unaudited)
    Revenues$2,564,558  $2,254,477 
    Operating expenses   
    Direct cost of revenues 1,740,407   1,539,838 
    Selling, general and administrative expenses 556,672   476,097 
    Amortization of intangible assets 4,939   7,320 
      2,302,018   2,023,255 
    Operating income 262,540   231,222 
    Other income (expense)   
    Interest income and other 3,221   10,418 
    Interest expense (10,435)  (7,468)
      (7,214)  2,950 
    Income before income tax provision 255,326   234,172 
    Income tax provision 62,067   46,156 
    Net income$193,259  $188,016 
    Earnings per common share ― basic$5.75  $5.57 
    Weighted average common shares outstanding ― basic 33,599   33,741 
    Earnings per common share ― diluted$5.43  $5.25 
    Weighted average common shares outstanding ― diluted 35,599   35,825 
    Other comprehensive loss, net of tax   
    Foreign currency translation adjustments, net of tax expense of $0$(1,982) $(95,345)
    Total other comprehensive loss, net of tax (1,982)  (95,345)
    Comprehensive income$191,277  $92,671 


     
     
    FTI CONSULTING, INC.
    RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
    (in thousands)
                   
    Three Months Ended
    September 30, 2023
    (Unaudited)     		 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology  Strategic Communications Unallocated Corporate Total
    Net income             $83,317 
    Interest income and other              (5,147)
    Interest expense              4,474 
    Income tax provision              24,385 
    Operating income  $64,633 $19,708 $26,293 $11,481 $12,503 $(27,589) $107,029 
    Depreciation and amortization  2,414  1,548  1,463  3,392  882  680   10,379 
    Amortization of intangible assets  1,047  224  —  —  69  —   1,340 
    Adjusted EBITDA $68,094 $21,480 $27,756 $14,873 $13,454 $(26,909) $118,748 


    Nine Months Ended
    September 30, 2023
    (Unaudited)    		 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $193,259 
    Interest income and other              (3,221)
    Interest expense              10,435 
    Income tax provision              62,067 
    Operating income $154,724 $63,881 $73,017 $39,803 $32,464 $(101,349) $262,540 
    Depreciation and amortization  6,657  4,349  4,455  10,523  2,570  1,372   29,926 
    Amortization of intangible assets  4,069  631  —  —  239  —   4,939 
    Adjusted EBITDA $165,450 $68,861 $77,472 $50,326 $35,273 $(99,977) $297,405 


    Three Months Ended
    September 30, 2022
    (Unaudited)     		 Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $77,267 
    Interest income and other              (7,771)
    Interest expense              2,378 
    Income tax provision              15,836 
    Operating income $49,865 $14,653 $31,674 $9,833 $12,155 $(30,470) $87,710 
    Depreciation and amortization  1,745  1,280  1,239  3,380  629  676   8,949 
    Amortization of intangible assets  1,909  242  —  —  163  1   2,315 
    Adjusted EBITDA $53,519 $16,175 $32,913 $13,213 $12,947 $(29,793) $98,974 
                   
    Nine Months Ended
    September 30, 2022
    (Unaudited)    		 Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate Total
    Net income             $188,016 
    Interest income and other              (10,418)
    Interest expense              7,468 
    Income tax provision              46,156 
    Operating income $154,416 $41,646 $72,056 $25,005 $37,623 $(99,524) $231,222 
    Depreciation and amortization  5,231  4,083  3,698  9,935  1,962  2,136   27,045 
    Amortization of intangible assets  6,036  735  —  —  548  1   7,320 
    Adjusted EBITDA $165,683 $46,464 $75,754 $34,940 $40,133 $(97,387) $265,587 


     

    (1) Effective July 1, 2023, Corporate Finance & Restructuring and Forensic and Litigation Consulting segment information for the prior periods has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation & strategy practice within the Corporate Finance & Restructuring segment.

     
    FTI CONSULTING, INC.
    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 September 30, 2023
    (Unaudited)    		           
    Corporate Finance & Restructuring$347,560 $68,094  19.6% 60% $514 2,251
    Forensic and Litigation Consulting 166,137  21,480  12.9% 57% $388 1,503
    Economic Consulting 193,866  27,756  14.3% 65% $559 1,085
    Technology (1) 98,860  14,873  15.0% N/M N/M 629
    Strategic Communications (1) 86,838  13,454  15.5% N/M N/M 1,010
     $893,261 $145,657  16.3%     6,478
    Unallocated Corporate   (26,909)        
    Adjusted EBITDA   $118,748  13.3%      
                
    Nine Months Ended September 30, 2023
    (Unaudited)    		           
    Corporate Finance & Restructuring$981,124 $165,450  16.9% 59% $492 2,251
    Forensic and Litigation Consulting 488,636  68,861  14.1% 58% $384 1,503
    Economic Consulting 565,283  77,472  13.7% 67% $533 1,085
    Technology (1) 286,922  50,326  17.5% N/M N/M 629
    Strategic Communications (1) 242,593  35,273  14.5% N/M N/M 1,010
     $2,564,558 $397,382  15.5%     6,478
    Unallocated Corporate   (99,977)        
    Adjusted EBITDA   $297,405  11.6%      
                
    Three Months Ended September 30, 2022
    (Unaudited)    		           
    Corporate Finance & Restructuring (2)$282,029 $53,519  19.0% 61% $445 2,050
    Forensic and Litigation Consulting (2) 143,289  16,175  11.3% 53% $360 1,464
    Economic Consulting 193,183  32,913  17.0% 67% $579 998
    Technology (1) 84,915  13,213  15.6% N/M N/M 548
    Strategic Communications (1) 72,449  12,947  17.9% N/M N/M 951
     $775,865 $128,767  16.6%     6,011
    Unallocated Corporate   (29,793)        
    Adjusted EBITDA   $98,974  12.8%      
                
    Nine Months Ended September 30, 2022
    (Unaudited)    		           
    Corporate Finance & Restructuring (2)$841,804 $165,683  19.7% 62% $448 2,050
    Forensic and Litigation Consulting (2) 432,054  46,464  10.8% 55% $355 1,464
    Economic Consulting 523,201  75,754  14.5% 70% $506 998
    Technology (1) 243,181  34,940  14.4% N/M N/M 548
    Strategic Communications (1) 214,237  40,133  18.7% N/M N/M 951
     $2,254,477 $362,974  16.1%     6,011
    Unallocated Corporate   (97,387)        
    Adjusted EBITDA   $265,587  11.8%      
                


     

    N/M Not meaningful
    (1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.
    (2) Effective July 1, 2023, Corporate Finance & Restructuring and Forensic and Litigation Consulting segment information for the prior periods has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation & strategy practice within the Corporate Finance & Restructuring segment.


     
    FTI CONSULTING, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
      
     Nine Months Ended
    September 30,
     
     2023 2022
     (Unaudited)
    Operating activities   
    Net income$193,259  $188,016 
    Adjustments to reconcile net income to net cash used in operating activities:   
    Depreciation and amortization 29,926   27,045 
    Amortization of intangible assets 4,939   7,320 
    Acquisition-related contingent consideration 4,263   863 
    Provision for expected credit losses 21,347   13,101 
    Share-based compensation 21,412   18,491 
    Amortization of debt issuance costs and other 1,722   1,588 
    Deferred income taxes (4,602)  (9,140)
    Changes in operating assets and liabilities, net of effects from acquisitions:   
    Accounts receivable, billed and unbilled (333,713)  (251,280)
    Notes receivable (22,600)  838 
    Prepaid expenses and other assets (3,252)  (3,066)
    Accounts payable, accrued expenses and other (8,895)  21,936 
    Income taxes (347)  3,940 
    Accrued compensation (65,394)  (67,763)
    Billings in excess of services provided 3,410   7,672 
    Net cash used in operating activities (158,525)  (40,439)
    Investing activities   
    Payments for acquisition of businesses, net of cash received —   (6,742)
    Purchases of property and equipment and other (43,224)  (38,935)
    Purchase of short-term investment (24,356)  — 
    Net cash used in investing activities (67,580)  (45,677)
    Financing activities   
    Borrowings under revolving line of credit 725,000   165,000 
    Repayments under revolving line of credit (440,000)  (165,000)
    Repayment of convertible notes (315,763)  — 
    Purchase and retirement of common stock (20,982)  (23,530)
    Share-based compensation tax withholdings and other (14,003)  (15,663)
    Payments for business acquisition liabilities (3,651)  (4,848)
    Deposits and other 2,319   7,092 
    Net cash used in financing activities (67,080)  (36,949)
    Effect of exchange rate changes on cash and cash equivalents 2,645   (44,373)
    Net decrease in cash and cash equivalents (290,540)  (167,438)
    Cash and cash equivalents, beginning of period 491,688   494,485 
    Cash and cash equivalents, end of period$201,148  $327,047 

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