WASHINGTON, Feb. 25, 2020 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the fourth quarter and full year ended December 31, 2019.

For the full year 2019, revenues of $2.353 billion increased $324.8 million, or 16.0%, compared to revenues of $2.028 billion in the prior year. Excluding the estimated negative impact from foreign currency translation, revenues increased $351.2 million, or 17.3%, compared to the prior year. The increase in revenues was driven by higher demand across all business segments compared to the prior year. Net income of $216.7 million compared to $150.6 million in the prior year. The increase in net income was primarily due to higher operating profits across all business segments, lower interest expense and a lower effective tax rate. 2018 net income included a $13.0 million gain related to the sale of the Company’s Ringtail e-discovery software and related business ("Ringtail divestiture"), which was partially offset by a $9.1 million loss on early extinguishment of debt related to the Company's redemption of $300.0 million of its 6.0% Senior Notes due 2022 (the "2022 Senior Notes").

Adjusted EBITDA of $343.9 million, or 14.6% of revenues, compared to $265.7 million, or 13.1% of revenues, in the prior year. The increase in Adjusted EBITDA was primarily due to higher revenues across all business segments, which was partially offset by higher compensation, primarily related to an increase in variable compensation and a 17.8% increase in billable headcount, as well as higher selling, general and administrative ("SG&A") expenses compared to the prior year.

Full year 2019 fully diluted earnings per share ("EPS") of $5.69 compared to $3.93 in the prior year. 2019 EPS included $8.6 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which reduced EPS by $0.17, and a $2.1 million tax gain related to the Ringtail divestiture, which increased EPS by $0.06. 2018 EPS included a $9.1 million loss on early extinguishment of debt, which reduced EPS by $0.17, and $3.0 million of non-cash interest expense related to the 2023 Convertible Notes, which reduced EPS by $0.06. This was partially offset by the $13.0 million gain from the Ringtail divestiture, which increased 2018 EPS by $0.16. 2019 Adjusted EPS of $5.80, which excludes the non-cash interest expense and tax gain from the Ringtail divestiture, compared to Adjusted EPS of $4.00 in the prior year. 2018 Adjusted EPS excluded the loss on early extinguishment of debt, non-cash interest expense and gain from the Ringtail divestiture.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, "The level of notable growth we have achieved the last couple of years only happens through intense commitment by our people in support of our clients, together with major efforts to attract and support them as they build businesses. I therefore want to thank our leadership and teams across the globe for that commitment and congratulate the entire team on the success."

Cash Position and Capital Allocation

Net cash provided by operating activities of $217.9 million for the year ended December 31, 2019 compared to $230.7 million for the year ended December 31, 2018. The year-over-year decrease in net cash provided by operating activities was largely due to the pace of cash collections lagging the increase in revenues throughout the year.

Cash and cash equivalents of $369.4 million at December 31, 2019 compared to $258.5 million at September 30, 2019 and $312.1 million at December 31, 2018. Total debt, net of cash, of ($53.1) million at December 31, 2019 improved compared to $57.8 million at September 30, 2019 and $4.2 million at December 31, 2018. The sequential decrease in total debt, net of cash, was due to an increase in cash provided by operating activities, which was partially offset by cash used for share repurchases.

During the quarter, the Company repurchased 259,823 shares of its common stock at an average price per share of $107.71 for a total cost of $28.0 million. In full year 2019, the Company repurchased 1,258,420 shares of its common stock at an average price per share of $84.16 for a total cost of $105.9 million. As of December 31, 2019, approximately $66.6 million remained available for stock repurchases under the Company’s $400.0 million stock repurchase authorization. On February 20, 2020, the Company's Board of Directors authorized an additional $100.0 million to repurchase shares of FTI Consulting’s outstanding common stock pursuant to its stock repurchase program, for an aggregate authorization of $500.0 million. As of February 24, 2020, FTI Consulting had repurchased 7,140,941 shares of its outstanding common stock at an average price per share of $46.66 for an aggregate cost of approximately $333.2 million. After giving effect to share repurchases through such date and the increased authorization, FTI Consulting has approximately $166.6 million remaining available for common stock repurchases under the program. No time limit was established for the completion of the program, and the program may be suspended, discontinued or replaced by the Board at any time without prior notice.

Under the program, FTI Consulting may repurchase shares in open-market purchases or any other method in accordance with applicable securities laws and regulations. The specific timing and amount of repurchases will be determined by FTI Consulting’s management, in its discretion, and will vary based on market conditions, securities law limitations and other factors. The repurchases may be funded using available cash on hand or a combination of cash and available borrowings under FTI Consulting’s senior secured revolving bank credit facility.

Fourth Quarter 2019 Results

Fourth quarter 2019 revenues of $602.2 million increased $97.2 million, or 19.3%, compared to revenues of $505.0 million in the prior year quarter. The increase in revenues was driven by higher demand across all business segments and an increase in pass-through revenues compared to the prior year quarter. Net income of $29.1 million compared to $23.7 million in the prior year quarter. The increase in net income was primarily due to higher operating profits in the Economic Consulting and Technology segments. 2018 fourth quarter net income included a $9.1 million loss on early extinguishment of debt related to the Company's redemption of $300.0 million of its 2022 Senior Notes.

Adjusted EBITDA of $58.3 million, or 9.7% of revenues, compared to $53.7 million, or 10.6% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was primarily due to higher revenues across all business segments, which was partially offset by higher compensation related to an increase in variable compensation and a 17.8% increase in billable headcount, as well as higher SG&A expenses compared to the prior year quarter.

Fourth quarter 2019 EPS of $0.76 compared to $0.61 in the prior year quarter. Fourth quarter 2019 EPS included $2.2 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which reduced EPS by $0.04. Fourth quarter 2018 EPS included a $9.1 million loss on early extinguishment of debt, which reduced EPS by $0.17, and $2.1 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which reduced EPS by $0.05. Fourth quarter 2019 Adjusted EPS of $0.80, which excludes the non-cash interest expense, compared to Adjusted EPS of $0.83 in the prior year quarter. Fourth quarter 2018 Adjusted EPS excluded the loss on early extinguishment of debt and non-cash interest expense.

Fourth Quarter 2019 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $36.3 million, or 25.1%, to $181.1 million in the quarter compared to $144.8 million in the prior year quarter. The increase in revenues was due to higher demand for restructuring and business transformation and transactions services, as well as higher success fees. Acquisition-related revenues contributed $12.6 million, or 8.7% of the increase, compared to the prior year quarter. Adjusted Segment EBITDA of $24.8 million, or 13.7% of segment revenues, compared to $24.3 million, or 16.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was nearly offset by higher compensation, primarily related to an increase in variable compensation and a 25.9% increase in billable headcount, as well as higher SG&A expenses, including costs related to the August 2019 acquisition.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $18.2 million, or 13.8%, to $150.3 million in the quarter compared to $132.1 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and disputes services. Adjusted Segment EBITDA of $17.4 million, or 11.6% of segment revenues, compared to $21.5 million, or 16.3% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, primarily related to a 17.2% increase in billable headcount and higher variable compensation as well as higher SG&A expenses.

Economic Consulting
Revenues in the Economic Consulting segment increased $24.7 million, or 19.2%, to $153.1 million in the quarter compared to $128.4 million in the prior year quarter. The increase in revenues was primarily due to higher demand for merger and acquisition-related antitrust and financial economics services, as well as higher realization for international arbitration services. Adjusted Segment EBITDA of $17.3 million, or 11.3% of segment revenues, compared to $12.1 million, or 9.4% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation, primarily related to higher variable compensation and an 11.6% increase in billable headcount.

Technology
Revenues in the Technology segment increased $9.8 million, or 23.5%, to $51.5 million in the quarter compared to $41.7 million in the prior year quarter. The increase in revenues was primarily due to higher demand for global cross-border and merger and acquisition-related “second request” services. Adjusted Segment EBITDA of $7.8 million, or 15.1% of segment revenues, compared to $2.7 million, or 6.4% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to an 18.0% increase in billable headcount and an increase in SG&A expenses.

Strategic Communications
Revenues in the Strategic Communications segment increased $8.3 million, or 14.3%, to $66.3 million in the quarter compared to $58.0 million in the prior year quarter. The increase in revenues was due to a $4.5 increase in pass-through revenues and higher project-based revenues in North America and Europe, the Middle East and Africa, primarily related to corporate reputation services. Adjusted Segment EBITDA of $9.9 million, or 14.9% of segment revenues, compared to $11.3 million, or 19.5% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, primarily related to a 13.6% increase in billable headcount and higher SG&A expenses.

2020 Guidance
The Company estimates that revenues for full year 2020 will range between $2.450 billion and $2.550 billion. The Company estimates that full year 2020 EPS will range between $5.32 and $5.82 and that Adjusted EPS will range between $5.50 and $6.00. The variance between EPS and Adjusted EPS guidance for 2020 includes estimated non-cash interest expense of $0.18 per share related to the Company's 2023 Convertible Notes.

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 5,500 employees located in 27 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 $2.35 billion in revenues during fiscal year 2019. More information can be found at www.fticonsulting.com.