WASHINGTON, Feb. 26, 2019 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released record financial results for the fourth quarter and full year ended December 31, 2018.

For the full year 2018, revenues of $2.028 billion increased $220.1 million, or 12.2%, compared to revenues of $1.808 billion in the prior year. The increase in revenues was driven by higher demand across all business segments, with particular strength in the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments. Net income of $150.6 million compared to $108.0 million in the prior year. The increase in net income was largely due to higher operating profits across all business segments and 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"). 2017 net income included a $44.9 million discrete tax benefit, resulting from the adoption of the 2017 U.S. Tax Cuts and Jobs Act ("2017 Tax Act"), which was partially offset by a $40.9 million special charge related to headcount and real estate reductions.

Adjusted EBITDA of $265.7 million, or 13.1% of revenues, compared to $192.0 million, or 10.6% of revenues, in the prior year. The increase in Adjusted EBITDA was due to higher revenues, which was partially offset by an increase in compensation, primarily related to higher variable compensation and an increase in billable headcount, and higher selling, general and administrative ("SG&A") expenses.

Full year 2018 fully diluted earnings per share ("EPS") of $3.93 compared to $2.75 in the prior year. 2018 EPS included a $9.1 million loss on early extinguishment of debt, which decreased EPS by $0.17 and $3.0 million of non-cash interest expense related to the Company's 2.0% convertible senior notes ("2023 Convertible Notes"), which decreased EPS by $0.06. This was partially offset by the $13.0 million gain from the Ringtail divestiture, which increased EPS by $0.16. 2017 EPS included a $44.9 million discrete tax benefit related to the adoption of the 2017 Tax Act, which increased EPS by $1.14, and a $40.9 million special charge related to headcount and real estate reductions, which reduced EPS by $0.70. 2018 Adjusted EPS of $4.00, which excludes the loss on early extinguishment of debt, non-cash interest expense and gain from the Ringtail divestiture, compares to $2.32 in the prior year. The improvement in Adjusted EPS compared to the prior year period was primarily due to improved operating results. 2017 Adjusted EPS excluded the tax benefit related to the adoption of the 2017 Tax Act and the impact of special charges.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, "I want to thank our clients and our teams for an outstanding year. In 2018, every one of our business segments delivered top- and bottom-line growth. These results reflect the efforts by our teams across the globe to continually strengthen our firm by attracting and developing the best professionals and building businesses behind them. This, in turn, allows us to do our job: support our clients as they navigate their largest and most complex issues."

Cash Position and Capital Allocation

Net cash provided by operating activities of $230.7 million for the year ended December 31, 2018 compared to $147.6 million for the year ended December 31, 2017. The increase was primarily due to higher cash collections resulting from increased revenues, which was partially offset by an increase in cash paid for salaries and benefits and higher income tax payments.

Cash and cash equivalents of $312.1 million at December 31, 2018 compared to $505.9 million at September 30, 2018 and $190.0 million at December 31, 2017. Total debt, net of cash, of $4.2 million at December 31, 2018 compared to $110.4 million at September 30, 2018 and $210.0 million at December 31, 2017. The sequential decline in total debt, net of cash, was primarily due to the redemption of the 2022 Senior Notes on November 15, 2018 and an increase in net cash provided by operating activities.

During the quarter, the Company repurchased 418,728 shares of its common stock at an average price per share of $63.31 for a total of $26.5 million. In full year 2018, the Company repurchased 755,803 shares of its common stock at an average price per share of $53.88 for a total of $40.7 million. Additionally, the Company used a portion of the proceeds from the issuance of the 2023 Convertible Notes to repurchase 196,050 shares at an average price per share of $76.51 for a total cost of $15.0 million. This was a separate repurchase transaction outside of the stock repurchase program. Between January 1, 2019 and February 22, 2019, the Company repurchased an additional 324,152 shares of its common stock at an average price per share of $66.68 for a total of $21.6 million. On February 21, 2019, 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 $400.0 million. As of February 22, 2019, FTI Consulting had repurchased 6,206,673 shares of its outstanding common stock at an average price per share of $40.10 for an aggregate cost of approximately $249.0 million. After giving effect to share repurchases through such date and the increased authorization, FTI Consulting has approximately $151.0 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 all 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 2018 Results

Fourth quarter 2018 revenues of $505.0 million increased $37.3 million, or 8.0%, compared to revenues of $467.7 million in the prior year quarter. Excluding the estimated negative impact from foreign currency translation ("FX"), revenues increased by $42.3 million, or 9.0%, compared to the prior year quarter. The increase in revenues was driven by higher demand across all business segments, with particular strength in the Corporate Finance & Restructuring, Forensic and Litigation Consulting and Economic Consulting segments. Net income was $23.7 million compared to $66.9 million in the prior year quarter. The decrease was largely due to the $44.9 million discrete tax benefit related to the adoption of the 2017 Tax Act, which was recorded in the fourth quarter of 2017. Adjusted EBITDA was $53.7 million, or 10.6% of revenues, compared to $55.5 million, or 11.9% of revenues, in the prior year quarter. Adjusted EBITDA declined compared to the prior year quarter, as the increase in revenues was offset by an increase in compensation, primarily related to higher variable compensation and an increase in billable headcount, and higher SG&A expenses.

Fourth quarter 2018 EPS of $0.61 compared to $1.78 in the prior year quarter. EPS in the quarter included a $9.1 million loss on early extinguishment of debt, which decreased EPS by $0.17, and $2.1 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which decreased EPS by $0.05. Fourth quarter 2017 EPS included the 2017 Tax Act benefit of $44.9 million, which increased EPS by $1.19, and a $10.8 million special charge related to headcount reductions, which reduced EPS by $0.19. Fourth quarter 2018 Adjusted EPS, of $0.83, which exclude the loss on early extinguishment of debt and non-cash interest expense, compared to $0.78 in the prior year quarter. Fourth quarter 2017 Adjusted EPS excluded the tax benefit related to the adoption of the 2017 Tax Act and the impact of special charges.

Fourth Quarter 2018 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $14.3 million, or 10.9%, to $144.8 million in the quarter compared to $130.5 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $15.7 million, or 12.1%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for business transformation and transactions services. Adjusted Segment EBITDA was $24.3 million, or 16.8% of segment revenues, compared to $25.8 million, or 19.7% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was offset by higher compensation, primarily related to higher variable compensation and an increase in billable headcount, and an increase in SG&A expenses.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $11.2 million, or 9.3%, to $132.1 million in the quarter compared to $120.9 million in the prior year quarter. The increase in revenues was primarily driven by higher demand for construction solutions and disputes services. Adjusted Segment EBITDA was $21.5 million, or 16.3% of segment revenues, compared to $23.6 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 offset by higher compensation, primarily related to an increase in billable headcount and higher variable compensation, and an increase in SG&A expenses.

Economic Consulting
Revenues in the Economic Consulting segment increased $7.3 million, or 6.1%, to $128.4 million in the quarter, compared to $121.1 million in the prior year quarter. The increase in revenues was primarily due to higher demand for antitrust and financial economics services. Adjusted Segment EBITDA was $12.1 million, or 9.4% of segment revenues, compared to $14.3 million, or 11.8% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was offset by higher compensation, primarily related to higher variable compensation and an increase in billable headcount.

Technology
Revenues in the Technology segment increased $0.8 million, or 2.0%, to $41.7 million in the quarter compared to $40.9 million in the prior year quarter. The increase in revenues was due to higher demand for consulting services, primarily related to information governance, privacy and security services, which was partially offset by a $2.8 million decline in licensing revenues related to the Ringtail divestiture. Adjusted Segment EBITDA was $2.7 million, or 6.4% of segment revenues, compared to $3.0 million, or 7.3% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was slightly lower than the prior year quarter, as the increase in revenues and lower SG&A expenses, primarily related to a decline in research and development expenses, was more than offset by higher compensation, primarily related to higher variable compensation and an increase in billable headcount.

Strategic Communications
Revenues in the Strategic Communications segment increased $3.7 million, or 6.7%, to $58.0 million in the quarter compared to $54.3 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $4.7 million, or 8.7%, compared to the prior year quarter. The increase in revenues was due to an increase in both retainer- and project-based revenues, primarily related to public affairs and merger and acquisition-related services. Adjusted Segment EBITDA was $11.3 million, or 19.5% of segment revenues, compared to $10.5 million, or 19.4% 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 variable compensation and SG&A expenses.

2019 Guidance

The Company estimates that revenues for full year 2019 will range between $2.000 billion and $2.100 billion. The Company estimates that full year 2019 EPS will range between $3.33 and $3.83 and that Adjusted EPS will range between $3.50 and $4.00. The variance between EPS and Adjusted EPS guidance for 2019 includes estimated non-cash interest expense of $0.17 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 4,700 employees located in 28 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 $2.03 billion in revenues during fiscal year 2018. More information can be found at www.fticonsulting.com.