• Fourth Quarter 2021 Revenues of $676.2 Million, Up 8% Compared to $626.6 Million in Prior Year Quarter
• Fourth Quarter 2021 EPS of $1.07, Down 32% Compared to $1.57 in Prior Year Quarter; Fourth Quarter 2021 Adjusted EPS of $1.13, Down 30% Compared to $1.61 in Prior Year Quarter
• Full Year 2021 Revenues of $2.776 Billion, Up 13% Compared to $2.461 Billion in Prior Year
• Full Year 2021 EPS of $6.65, Up 17% Compared to $5.67 in Prior Year; Full Year 2021 Adjusted EPS of $6.76, Up 13% Compared to $5.99 in Prior Year
• Introduces 2022 Guidance
  

WASHINGTON, Feb. 24, 2022 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the fourth quarter and full year ended December 31, 2021.

For the full year 2021, revenues of $2.776 billion increased $314.9 million, or 12.8%, compared to revenues of $2.461 billion in the prior year. Excluding the estimated positive impact from foreign currency ("FX") translation, revenues increased $265.1 million, or 10.8%, compared to the prior year. Acquisition-related revenues contributed $11.5 million of the increase in revenues compared to the prior year. Excluding the estimated positive impact of FX and acquisition-related revenues, revenues increased $253.6 million, or 10.3%, compared to the prior year. The increase in revenues was due to higher demand across all business segments. Net income of $235.0 million compared to $210.7 million in the prior year. The increase in net income was primarily due to higher revenues, FX remeasurement gains, and a $7.1 million special charge in full year 2020, which was partially offset by an increase in compensation expenses, which includes the impact of a 7.3% increase in total headcount and higher variable compensation, an increase in selling, general and administrative ("SG&A") expenses, and a higher effective tax rate compared to the prior year. Adjusted EBITDA of $354.0 million, or 12.8% of revenues, compared to $332.3 million, or 13.5% of revenues, in the prior year.

Full year 2021 earnings per diluted share ("EPS") of $6.65 compared to $5.67 in the prior year. Full year 2021 EPS included $9.6 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 $0.20 and $3.1 million in fair value remeasurement of acquisition-related contingent consideration, which increased EPS by $0.09. Full year 2020 EPS included the aforementioned $7.1 million special charge, which reduced EPS by $0.14, and $9.1 million of non-cash interest expense, which reduced EPS by $0.18. Full year 2021 Adjusted EPS of $6.76, which excludes the non-cash interest expense and the fair value remeasurement, compared to Adjusted EPS of $5.99 in the prior year.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our powerful results in 2021 reflect the resilience of our platform, its relevance to clients looking at their most significant opportunities and challenges, and the commitment of our more than 6,700 employees across the globe to deliver for our clients each day.”

Cash Position and Capital Allocation

Net cash provided by operating activities of $355.5 million for the year ended December 31, 2021 compared to $327.1 million for the year ended December 31, 2020. The year-over-year increase in net cash provided by operating activities was largely due to higher cash collections combined with lower income tax payments, which was partially offset by an increase in compensation.

Cash and cash equivalents of $494.5 million at December 31, 2021 compared to $295.0 million at December 31, 2020 and $342.5 million at September 30, 2021. Total debt, net of cash, of ($178.2) million at December 31, 2021 compared to $21.3 million at December 31, 2020 and ($1.3) million at September 30, 2021. The sequential decrease in total debt, net of cash, was primarily due to an increase in net cash provided by operating activities and the repayment of borrowings under the Company’s senior secured bank revolving credit facility.

There were no share repurchases during the quarter ended December 31, 2021. In full year 2021, the Company repurchased 421,725 shares of its common stock at an average price per share of $109.37 for a total cost of $46.1 million. As of December 31, 2021, approximately $167.1 million remained available for common stock repurchases under the Company’s stock repurchase authorization.

Fourth Quarter 2021 Results

Fourth quarter 2021 revenues of $676.2 million increased $49.7 million, or 7.9%, compared to revenues of $626.6 million in the prior year quarter. The increase in revenues was driven by higher demand across all business segments. Net income of $38.2 million compared to $55.6 million in the prior year quarter. The decrease in net income was primarily due to an increase in compensation expenses, which includes the impact of a 7.3% increase in total headcount, higher SG&A expenses and a higher effective tax rate compared to the prior year quarter. In the fourth quarter of 2020, the lower effective tax rate was primarily related to a combined $11.2 million benefit from the use of foreign tax credits and a deferred tax benefit arising from an intracompany intellectual property license agreement. Adjusted EBITDA of $62.0 million, or 9.2% of revenues, compared to $82.3 million, or 13.1% of revenues, in the prior year quarter.

Fourth quarter 2021 EPS of $1.07 compared to $1.57 in the prior year quarter. Fourth quarter 2021 EPS included $2.4 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which reduced EPS by $0.06. Fourth quarter 2020 EPS included $2.3 million of non-cash interest expense related to the Company's 2023 Convertible Notes, which reduced EPS by $0.04. Fourth quarter 2021 Adjusted EPS of $1.13, which excludes the non-cash interest expense, compared to Adjusted EPS of $1.61 in the prior year quarter. The aforementioned $11.2 million tax benefit increased fourth quarter 2020 EPS and Adjusted EPS by $0.32.

Fourth Quarter 2021 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $11.7 million, or 5.3%, to $231.5 million in the quarter, compared to $219.8 million in the prior year quarter. The increase in revenues was due to higher demand for business transformation and transactions services, as well as an increase in pass-through revenues and success fees, which was partially offset by lower demand for restructuring services compared to the prior year quarter. Adjusted Segment EBITDA of $22.2 million, or 9.6% of segment revenues, compared to $35.4 million, or 16.1% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was due to higher compensation, which was primarily related to an increase in variable compensation, and an increase in SG&A expenses compared to the prior year quarter.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $10.8 million, or 8.5%, to $138.0 million in the quarter, compared to $127.2 million in the prior year quarter. Acquisition-related revenues contributed $2.8 million in the quarter. Excluding acquisition-related revenues, revenues increased $8.0 million, or 6.3%, in the quarter. The increase in revenues was primarily due to higher demand for health solutions and investigations services compared to the prior year quarter. Adjusted Segment EBITDA of $8.5 million, or 6.2% of segment revenues, compared to $7.6 million, or 6.0% 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 SG&A expenses and compensation compared to the prior year quarter.

Economic Consulting
Revenues in the Economic Consulting segment increased $11.8 million, or 7.4%, to $172.3 million in the quarter, compared to $160.5 million in the prior year quarter. The increase in revenues was primarily due to higher demand for non-merger and acquisition ("M&A")-related antitrust and financial economics services, which was partially offset by lower demand for M&A-related antitrust services compared to the prior year quarter. Adjusted Segment EBITDA of $30.0 million, or 17.4% of segment revenues, compared to $31.3 million, or 19.5% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher compensation compared to the prior year quarter.

Technology
Revenues in the Technology segment increased $6.0 million, or 10.2%, to $64.6 million in the quarter, compared to $58.6 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and litigation services compared to the prior year quarter. Adjusted Segment EBITDA of $7.8 million, or 12.1% of segment revenues, compared to $10.2 million, or 17.3% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher compensation, which includes an increase in variable compensation and the impact of a 14.7% increase in billable headcount, as well as higher SG&A expenses compared to the prior year quarter.

Strategic Communications
Revenues in the Strategic Communications segment increased $9.4 million, or 15.5%, to $69.9 million in the quarter, compared to $60.5 million in the prior year quarter. The increase in revenues was primarily due to higher demand for corporate reputation and public affairs services compared to the prior year quarter. Adjusted Segment EBITDA of $14.9 million, or 21.4% of segment revenues, compared to $11.7 million, or 19.4% 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 and SG&A expenses compared to the prior year quarter.

2022 Guidance
The Company estimates that revenues for full year 2022 will range between $2.920 billion and $3.045 billion. The Company estimates that full year 2022 EPS will range between $6.40 and $7.20. The Company does not currently expect Adjusted EPS to differ from EPS. In prior years, Adjusted EPS has excluded non-cash interest expense in respect of the Company's 2023 Convertible Notes. As a result of the Company's adoption of Accounting Standards Update 2020-06 (“ASU 2020-06”), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which is effective as of January 1, 2022, the Company will not recognize any non-cash interest expense after January 1, 2022.

In light of a change to the terms of the Company's 2023 Convertible Notes, effective January 1, 2022, the Company does not expect the adoption of ASU 2020-06 to have a material impact on the determination of the Company's fully diluted weighted average shares outstanding. Pursuant to the first supplemental indenture for the Company's 2023 Convertible Notes, the principal amount of the 2023 Convertible Notes, at conversion, is required to be paid in cash, and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. Consequently, the if-converted method for determining fully diluted weighted average shares outstanding, which is required pursuant to ASU 2020-06, will produce a similar result as the treasury stock method, which was the method used prior to January 1, 2022.

Fourth Quarter and Full Year 2021 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2021 financial results at 3:00 p.m. Eastern Time on Thursday, February 24, 2022. 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 6,700 employees located in 29 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 $2.78 billion in revenues during fiscal year 2021. 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 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 Consolidated Statements of Comprehensive Income and 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, policies and practices, objectives, goals, 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, scientific or 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," "aspires," "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, intentions, aspirations, beliefs and estimates will be achieved, and the Company's actual results may differ materially from our expectations, beliefs and estimates. 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. 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 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, 2021 filed with the SEC on February 24, 2022 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.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)

FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)

FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)

FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)

FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)

FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT

________________________
N/M - Not meaningful

FTI CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

FTI CONSULTING, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)

FTI Consulting, Inc.
555 12th Street NW
Washington, DC 20004
+1.202.312.9100

Investor & Media Contact:
Mollie Hawkes
+1.617.747.1791
[email protected]