EX-99.1 2 d401248dex991.htm EX-99.1

FTI Consulting, Inc. Second Quarter 2017 Earnings Conference Call Exhibit 99.1

Cautionary Note About Forward-Looking Statements This presentation 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, 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 and other information that is not historical, including statements regarding estimates of our future financial results. When used in this presentation, words such as "anticipates," "estimates," "expects," “goals,” "intends," "believes,” "forecasts,” “targets,” “objectives” 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, projections and targets 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, beliefs, estimates or targets will be achieved, and the Company's actual results may differ materially from our expectations, beliefs, estimates and targets. The Company has experienced fluctuating revenues, operating income and cash flow 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, which could impact each of our segments differently, the pace and timing of the consummation and integration of past and future acquisitions, the Company's ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described under the heading “Part II, Item 1A Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed with the SEC and in the Company's other filings with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations.” 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.

Second Quarter 2017 Financial Review (1) See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Financial Measures Reconciliations” for the definitions and reconciliations of Adjusted EBITDA and Adjusted Earnings Per Diluted Share, which are non-GAAP financial measures, to the most directly comparable GAAP measures, and for the definition of Adjusted EBITDA Margin. All numbers in $000s, except for per share data and percentages Q2 2017 Q1 2017 % Variance Q2 2016 % Variance Percentage Change in Revenues Excluding the Estimated Impact of Foreign Currency Translation for Q2 2017 vs. Q2 2016 Consolidated Results Revenues 444,715 $ 446,344 $ -0.4% 460,147 $ -3.4% -1.6% Net Income (Loss) (5,156) $ 14,016 $ -136.8% 26,547 $ -119.4% Earnings (Loss) per Diluted Share (0.13) $ 0.34 $ -138.2% 0.64 $ -120.3% Adjusted Earnings per Diluted Share (1) 0.40 $ 0.34 $ 17.6% 0.66 $ -39.4% Adjusted EBITDA (1) 40,788 $ 38,319 $ 6.4% 56,580 $ -27.9% Adjusted EBITDA Margin (1) 9.2% 8.6% - 12.3% - Segment Results Corporate Finance & Restructuring Revenues 117,487 $ 105,901 $ 10.9% 132,142 $ -11.1% -9.4% Adjusted Segment EBITDA 20,048 $ 10,325 $ 94.2% 32,041 $ -37.4% Adjusted Segment EBITDA Margin 17.1% 9.7% - 24.2% - Forensic and Litigation Consulting Revenues 111,410 $ 111,406 $ 0.0% 118,193 $ -5.7% -4.9% Adjusted Segment EBITDA 13,032 $ 13,521 $ -3.6% 15,190 $ -14.2% Adjusted Segment EBITDA Margin 11.7% 12.1% - 12.9% - Economic Consulting Revenues 124,004 $ 139,221 $ -10.9% 118,006 $ 5.1% 7.2% Adjusted Segment EBITDA 15,509 $ 20,110 $ -22.9% 15,381 $ 0.8% Adjusted Segment EBITDA Margin 12.5% 14.4% - 13.0% - Technology Revenues 45,566 $ 46,087 $ -1.1% 41,882 $ 8.8% 10.1% Adjusted Segment EBITDA 5,421 $ 7,804 $ -30.5% 5,035 $ 7.7% Adjusted Segment EBITDA Margin 11.9% 16.9% - 12.0% - Strategic Communications Revenues 46,248 $ 43,729 $ 5.8% 49,924 $ -7.4% -4.0% Adjusted Segment EBITDA 4,876 $ 4,257 $ 14.5% 8,440 $ -42.2% Adjusted Segment EBITDA Margin 10.5% 9.7% - 16.9% -

Second Quarter 2017 Select Cash Position and Capital Allocation Total debt excludes the reduction for deferred debt issue costs of $4.1 million, $4.3 million and $4.9 million as of June 31, 2017, March 31, 2017 and June 30, 2016, respectively. See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Financial Measures Reconciliations” for the definition and reconciliation of Free Cash Flow, which is a non-GAAP financial measure, to the most directly comparable GAAP measure. All numbers in $000s, except for DSOs

Financial Tables

Reconciliation of Net Income (Loss) to Adjusted Net Income and Earnings (Loss) Per Diluted Share to Adjusted Earnings Per Share: Three Months Ended June 30, 2017, March 31, 2017 and June 30, 2016 See “End Notes: FTI Consulting Non-GAAP Financial Measures Reconciliations” for the definition of Adjusted Net Income and Adjusted Earnings per Diluted Share, which are non-GAAP financial measures. For the three months ended June 30, 2017, the Company reported a net loss. For the period, the basic weighted average common shares outstanding equals the diluted weighted average common shares outstanding for purposes of calculating U.S. GAAP earnings per share because potentially dilutive securities would be antidilutive. For non-GAAP purposes, the Adjusted EPS and diluted weighted average number of common shares outstanding presented herein reflect the impact of the inclusion of share-based awards that are considered dilutive based on the impact of the add-backs included in Adjusted Net Income above. All numbers in $000s, except for per share data Three Months Ended June 30, 2017 Three Months Ended March 31, 2017 Three Months Ended June 30, 2016 Net income (loss) $ (5,156) $ 14,016 $ 26,547 Special charges 30,074 - 1,750 Tax impact of special charges (9,103) - (691) Remeasurement of acquisition-related contingent consideration 536 166 - Tax impact of remeasurement of acquisition-related contingent consideration (204) (65) - Adjusted Net Income (1) $ 16,147 $ 14,117 $ 27,606 Earnings (Loss) per Diluted Share $ (0.13) $ 0.34 $ 0.64 Special charges 0.75 - 0.04 Tax impact of special charges (0.23) - (0.02) Remeasurement of acquisition-related contingent consideration 0.01 - - Adjusted Earnings per Diluted Share (1) $ 0.40 $ 0.34 $ 0.66 Weighted average number of common shares outstanding – diluted (2) 39,932 41,245 41,599

Reconciliation of Net Income (Loss) and Operating Income (Loss) to Adjusted EBITDA: Three months ended June 30, 2017 and March 31, 2017 See “End Notes: FTI Consulting Non-GAAP Financial Measures Reconciliations” for the definition of Adjusted EBITDA, which is a non-GAAP financial measure. All numbers in $000s Three Months Ended June 30, 2017 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net loss $ (5,156) Interest income and other (1,592) Interest expense 6,250 Income tax provision 527 Operating income (loss) 15,447 $ 1,183 $ 8,008 $ (1,568) $ (755) $ (22,286) $ 29 $ Depreciation and amortization 768 1,032 1,436 3,001 546 944 7,727 Amortization of other intangible assets 784 372 155 161 950 - 2,422 Special charges 3,049 10,445 5,910 3,827 3,599 3,244 30,074 Remeasurement of acquisition-related contingent consideration - - - - 536 - 536 Adjusted EBITDA (1) 20,048 $ 13,032 $ 15,509 $ 5,421 $ 4,876 $ (18,098) $ 40,788 $ Three Months Ended March 31, 2017 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $ 14,016 Interest income and other (605) Interest expense 5,801 Income tax provision 7,877 Operating income 8,749 $ 11,924 $ 18,502 $ 4,440 $ 2,527 $ (19,053) $ 27,089 $ Depreciation and amortization 781 1,173 1,454 3,206 602 1,355 8,571 Amortization of other intangible assets 795 424 154 158 962 - 2,493 Remeasurement of acquisition-related contingent consideration - - - - 166 - 166 Adjusted EBITDA (1) 10,325 $ 13,521 $ 20,110 $ 7,804 $ 4,257 $ (17,698) $ 38,319 $

Reconciliation of Net Income and Operating Income to Adjusted EBITDA: Three months ended June 30, 2016 All numbers in $000s See “End Notes: FTI Consulting Non-GAAP Financial Measures Reconciliations” for the definition of Adjusted EBITDA, which is a non-GAAP financial measure. Three Months Ended June 30, 2016 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $ 26,547 Interest income and other (4,125) Interest expense 6,303 Income tax provision 15,437 Operating income 30,482 $ 11,925 $ 14,291 $ 880 $ 6,990 $ (20,406) $ 44,162 $ Depreciation and amortization 755 996 935 3,996 497 899 8,078 Amortization of other intangible assets 804 519 155 159 953 - 2,590 Special charges - 1,750 - - - - 1,750 Adjusted EBITDA (1) 32,041 $ 15,190 $ 15,381 $ 5,035 $ 8,440 $ (19,507) $ 56,580 $

Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow: Three months ended June 30, 2017, March 31, 2017 and June 30, 2016 All numbers in $000s See “End Notes: FTI Consulting Non-GAAP Financial Measures Reconciliations” for the definition of Free Cash Flow, which is a non-GAAP financial measure.

End Notes FTI Consulting Non-GAAP Financial Measures Reconciliations 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 GAAP. Certain of these measures are considered “non-GAAP financial measures” under the SEC rules. Specifically, we have referred to the following non-GAAP measures in this presentation:Total Segment Operating IncomeAdjusted EBITDATotal Adjusted Segment EBITDAAdjusted EBITDA MarginAdjusted Net Income (Loss)Adjusted Earnings per Diluted ShareFree Cash FlowWe have included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA below in order to more fully define the components of certain non-GAAP financial measures in this presentation. We define Segment Operating Income (Loss) as a segment’s share of Consolidated Operating Income (Loss). We define Total Segment Operating Income (Loss), which is a non-GAAP financial measure, as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of Consolidated Operating Income (Loss) 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 Adjusted Segment EBITDA Margin as Adjusted Segment EBITDA as a percentage of a segment’s revenues.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 and losses on early extinguishment of debt. We believe that the non-GAAP financial measures, which exclude the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, when considered together with our GAAP financial results and GAAP 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 measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. 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 this non-GAAP financial measure, which excludes the effects of the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.We define Free Cash Flow 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 Condensed Consolidated Statements of Comprehensive Income.

Appendix

Second Quarter 2017 Select Geographic Review