WASHINGTON, Oct. 29, 2020 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended September 30, 2020.

Third quarter 2020 revenues of $622.2 million increased $29.1 million, or 4.9%, compared to revenues of $593.1 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation ("FX"), revenues increased $23.3 million, or 3.9%, compared to the prior year quarter. The increase in revenues was driven by higher demand in the Corporate Finance & Restructuring and Economic Consulting business segments, which was partially offset by lower demand in the Forensic and Litigation Consulting and Strategic Communications business segments, as well as a decline in pass-through revenues compared to the prior year quarter. Net income of $50.2 million compared to $60.4 million in the prior year quarter. Net income included a special charge of $7.1 million and FX remeasurement losses, which were partially offset by a lower effective tax rate compared to the prior year quarter. The third quarter special charge of $7.1 million included $4.7 million of lease abandonment and other relocation costs related to the Company’s New York City office consolidation and $2.4 million of severance and employee-related costs in the Forensic and Litigation Consulting segment. Adjusted EBITDA, which excludes the special charge, of $90.9 million, or 14.6% of revenues, compared to $92.3 million, or 15.6% of revenues, in the prior year quarter. The decrease in Adjusted EBITDA was due to higher compensation, primarily related to a 15.8% increase in billable headcount, which was partially offset by higher revenues and a decline in selling, general and administrative ("SG&A") expenses compared to the prior year quarter.

Third quarter 2020 fully diluted earnings per share ("EPS") of $1.35 compared to $1.59 in the prior year quarter. Third quarter 2020 EPS included the $7.1 million special charge, which reduced EPS by $0.14. Third quarter 2020 EPS also included $2.3 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which decreased EPS by $0.05. Third quarter 2019 EPS included $2.2 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which decreased EPS by $0.04. Third quarter 2020 Adjusted EPS of $1.54, which excludes the special charge and non-cash interest expense, compared to Adjusted EPS of $1.63 in the prior year quarter.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our growth in the face of COVID-19, in the face of all the challenges it has created for our clients and for our teams working to deliver for them, is a powerful testament to the strength of this company, its relevance to clients facing major issues, and the dedication and resilience of our more than 6,200 employees across the globe.”

Cash Position and Capital Allocation
Net cash provided by operating activities of $111.6 million for the quarter ended September 30, 2020 compared to $131.3 million for the quarter ended September 30, 2019. The year-over-year decrease in net cash provided by operating activities was largely due to an increase in compensation, primarily related to headcount growth, and higher income taxes paid, which was partially offset by lower non-compensation-related operating expenses and slightly higher cash collections compared to the prior year quarter.

Cash and cash equivalents of $304.7 million at September 30, 2020 compared to $258.5 million at September 30, 2019 and $304.2 million at June 30, 2020. Total debt, net of cash, of $36.6 million at September 30, 2020 compared to $57.8 million at September 30, 2019 and $47.0 million at June 30, 2020. The sequential decrease in total debt, net of cash, was primarily due to net cash provided by operating activities which exceeded cash used for share repurchases and acquisitions.

During the quarter, the Company repurchased 749,315 shares of its common stock at an average price per share of $110.57 for a total cost of $82.9 million. As of September 30, 2020, approximately $182.4 million remained available for stock repurchases under the Company’s stock repurchase authorization.

Third Quarter 2020 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $44.9 million, or 23.4%, to $236.6 million in the quarter compared to $191.7 million in the prior year quarter. Acquisition-related revenues contributed $8.5 million, or 4.4% of the increase, compared to the prior year quarter. The increase in revenues was primarily due to higher demand and higher realized bill rates for restructuring services compared to the prior year quarter. Adjusted Segment EBITDA of $56.2 million, or 23.8% of segment revenues, compared to $48.1 million, or 25.1% 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 a 36.6% increase in billable headcount and higher variable compensation compared to the prior year quarter.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $23.5 million, or 16.5%, to $119.1 million in the quarter compared to $142.7 million in the prior year quarter. The decrease in revenues was primarily due to lower demand for disputes and investigations services. Adjusted Segment EBITDA of $13.6 million, or 11.4% of segment revenues, compared to $27.0 million, or 18.9% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to lower revenues with lower utilization, which was partially offset by a decline in SG&A expenses compared to the prior year quarter.

Economic Consulting
Revenues in the Economic Consulting segment increased $13.3 million, or 9.4%, to $155.0 million in the quarter compared to $141.7 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $11.4 million, or 8.1%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand and realized bill rates for merger and acquisition ("M&A")-related antitrust services, which was partially offset by lower realized bill rates for non-M&A-related antitrust services. Adjusted Segment EBITDA of $25.7 million, or 16.6% of segment revenues, compared to $19.4 million, or 13.7% 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 a 15.2% increase in billable headcount and higher variable compensation compared to the prior year quarter.

Technology
Revenues in the Technology segment increased $1.5 million, or 2.6%, to $58.6 million in the quarter compared to $57.1 million in the prior year quarter. The increase in revenues was primarily due to higher demand for global cross-border investigation and litigation services. Adjusted Segment EBITDA of $11.9 million, or 20.4% of segment revenues, compared to $12.3 million, or 21.5% 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 13.2% increase in billable headcount.

Strategic Communications
Revenues in the Strategic Communications segment decreased $7.0 million, or 11.7%, to $53.0 million in the quarter compared to $60.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues decreased $8.2 million, or 13.7%, compared to the prior year quarter. The decrease in revenues was primarily due to lower demand for corporate reputation and financial communications services and a $2.3 million decline in pass-through revenues. Adjusted Segment EBITDA of $8.4 million, or 15.9% of segment revenues, compared to $12.6 million, or 21.1% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to lower revenues compared to the prior year quarter.

2020 Guidance
The Company is revising its full year 2020 guidance. The Company now estimates that 2020 revenues will range between $2.42 billion and $2.47 billion. This compares to the previous revenue range of $2.45 billion to $2.55 billion. The Company now estimates that 2020 EPS will range between $4.93 and $5.43. This compares to the previous EPS range of $5.32 to $5.82. This range is inclusive of the third quarter special charge of $0.14 per share and an estimated full year non-cash interest expense of $0.18 per share related to the Company's 2023 Convertible Notes. The Company now estimates that 2020 Adjusted EPS will range between $5.25 and $5.75. This compares to the previous Adjusted EPS range of $5.50 to $6.00.

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 6,200 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 $2.35 billion in revenues during fiscal year 2019. More information can be found at www.fticonsulting.com.