Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries FTI Consulting Reports Record Fourth Quarter and Full Year 2023 Financial Results By: FTI Consulting, Inc. via GlobeNewswire February 22, 2024 at 07:30 AM EST Fourth Quarter 2023 Revenues of $924.7 Million, Up 19% Compared to $774.4 Million in Prior Year Quarter; Excluding Estimated Positive Impact of FX, Fourth Quarter 2023 Revenues Up 18% Compared to Prior Year QuarterFourth Quarter 2023 EPS of $2.28, Up 71% Compared to $1.33 in Prior Year Quarter; Fourth Quarter 2023 Adjusted EPS of $2.28, Up 50% Compared to $1.52 in Prior Year QuarterFull Year 2023 Revenues of $3.489 Billion, Up 15% Compared to $3.029 Billion in Prior YearFull Year 2023 EPS of $7.71, Up 17% Compared to $6.58 in Prior Year; Full Year 2023 Adjusted EPS of $7.71, Up 14% Compared to $6.77 in Prior YearIntroduces 2024 Guidance WASHINGTON, Feb. 22, 2024 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the full year and fourth quarter ended December 31, 2023. For the full year 2023, revenues of $3.489 billion increased $460.3 million, or 15.2%, compared to revenues of $3.029 billion in the prior year. The increase in revenues was due to higher demand across all business segments. Net income of $274.9 million compared to $235.5 million in the prior year. The increase in net income was primarily due to higher revenues, which was partially offset by higher compensation, a 17.2% increase in selling, general and administrative ("SG&A") expenses and higher income taxes compared to the prior year. Adjusted EBITDA of $424.8 million, or 12.2% of revenues, compared to $357.6 million, or 11.8% of revenues, in the prior year. Full year 2023 earnings per diluted share ("EPS") of $7.71 compared to $6.58 in the prior year. Full year 2022 EPS included an $8.3 million special charge related to severance and other employee-related costs, which reduced EPS by $0.19. Full year 2023 Adjusted EPS of $7.71 compared to Adjusted EPS of $6.77 in the prior year. Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, "In 2023, we continued our sustained, multi-year growth trajectory and once again delivered record revenues and earnings. These results reflect our continued ability to win in the two markets that matter most: the market for making a difference for clients and the market for great talent. That progress leaves me ever more confident about the future of our firm." Cash Position and Capital Allocation Net cash provided by operating activities of $224.5 million for the year ended December 31, 2023 compared to $188.8 million for the year ended December 31, 2022. The year-over-year increase in net cash provided by operating activities was primarily due to higher cash collections resulting from increased revenues. The increase was partially offset by higher compensation expenses, primarily related to headcount growth, an increase in other operating expenses and higher use of working capital required for growth. Cash and cash equivalents and short-term investments of $328.7 million at December 31, 2023 compared to $491.7 million at December 31, 2022 and $225.6 million at September 30, 2023. Total debt, net of cash and short-term investments, of ($328.7) million at December 31, 2023 compared to ($175.5) million at December 31, 2022 and $59.4 million at September 30, 2023. The sequential decrease in total debt, net of cash and short-term investments, was primarily due to an increase in cash provided by operating activities. There were no share repurchases during the quarter ended December 31, 2023. In full year 2023, the Company repurchased 112,139 shares of its common stock at an average price per share of $158.70 for a total cost of $17.8 million. As of December 31, 2023, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program. Fourth Quarter 2023 Results Fourth quarter 2023 revenues of $924.7 million increased $150.3 million, or 19.4%, compared to revenues of $774.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $139.0 million, or 18.0%, compared to the prior year quarter. The increase in revenues was due to higher demand across all business segments. Net income of $81.6 million compared to $47.5 million in the prior year quarter. The increase in net income was primarily due to higher revenues, which was partially offset by higher compensation and SG&A expenses compared to the prior year quarter. Adjusted EBITDA of $127.4 million, or 13.8% of revenues, compared to $92.0 million, or 11.9% of revenues, in the prior year quarter. Fourth quarter 2023 EPS of $2.28 compared to $1.33 in the prior year quarter. Fourth quarter 2022 EPS included the aforementioned $8.3 million special charge, which decreased EPS by $0.19. Fourth quarter 2023 Adjusted EPS of $2.28 compared to Adjusted EPS of $1.52 in the prior year quarter. Fourth Quarter 2023 Segment Results Corporate Finance & RestructuringRevenues in the Corporate Finance & Restructuring segment increased $60.2 million, or 19.7%, to $365.6 million in the quarter compared to $305.3 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $57.2 million, or 18.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for business transformation & strategy and restructuring services. Adjusted Segment EBITDA of $65.4 million, or 17.9% of segment revenues, compared to $49.1 million, or 16.1% 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 higher compensation, which includes the impact of a 5.5% increase in billable headcount and higher contractor costs, as well as an increase in SG&A expenses compared to the prior year quarter. Forensic and Litigation ConsultingRevenues in the Forensic and Litigation Consulting segment increased $17.6 million, or 11.9%, to $165.5 million in the quarter compared to $147.9 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and construction solutions services. Adjusted Segment EBITDA of $19.2 million, or 11.6% of segment revenues, compared to $17.1 million, or 11.6% 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 compensation and higher SG&A expenses compared to the prior year quarter. Economic ConsultingRevenues in the Economic Consulting segment increased $34.1 million, or 19.8%, to $206.1 million in the quarter compared to $172.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $30.3 million, or 17.6%, compared to the prior year quarter. The increase in revenues was primarily due to an increase in financial economics, non-merger and acquisition (“M&A”)-related antitrust and international arbitration revenues, which was partially offset by a decline in M&A-related antitrust revenues. Adjusted Segment EBITDA of $38.3 million, or 18.6% of segment revenues, compared to $27.3 million, or 15.9% 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 compensation, which includes the impact of an 8.1% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter. TechnologyRevenues in the Technology segment increased $24.1 million, or 31.4%, to $100.9 million in the quarter compared to $76.8 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $23.1 million, or 30.1%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related “second request” and litigation services. Adjusted Segment EBITDA of $12.4 million, or 12.3% of segment revenues, compared to $11.8 million, or 15.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was largely offset by higher as-needed consultant costs, an increase in compensation, which includes the impact of a 12.9% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter. Strategic CommunicationsRevenues in the Strategic Communications segment increased $14.2 million, or 19.6%, to $86.6 million in the quarter compared to $72.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $12.2 million, or 16.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for corporate reputation and public affairs services. Adjusted Segment EBITDA of $15.6 million, or 18.0% of segment revenues, compared to $10.5 million, or 14.5% 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 compensation and higher SG&A expenses compared to the prior year quarter. 2024 GuidanceThe Company estimates that revenues for full year 2024 will range between $3.650 billion and $3.790 billion. The Company estimates that EPS for full year 2024 will range between $7.75 and $8.50. The Company does not currently expect Adjusted EPS to differ from EPS. Fourth Quarter and Full Year 2023 Conference CallFTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2023 financial results at 9:00 a.m. Eastern Time on Thursday, February 22, 2024. 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 ConsultingFTI 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 7,900 employees located in 31 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.5 billion in revenues during fiscal year 2023. More information can be found at www.fticonsulting.com. Non-GAAP Financial MeasuresIn 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 IncomeAdjusted EBITDATotal Adjusted Segment EBITDAAdjusted EBITDA MarginAdjusted Net IncomeAdjusted Earnings per Diluted Share 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. 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 and Condensed 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, initiatives, projections, prospects, policies, processes and practices, objectives, goals, commitments, 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, climate change-related matters, scientific and technological developments, including relating to new and emerging technologies, such as Artificial Intelligence and machine learning, 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," "commits," "aspires," "forecasts," "future," "goal," "seeks" 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 plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. 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 public health crises 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, 2023 filed with the SEC on February 22, 2024 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.555 12th Street NWWashington, DC 20004+1.202.312.9100 Investor & Media Contact:Mollie Hawkes+1.617.747.1791mollie.hawkes@fticonsulting.com FTI CONSULTING, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) December 31, December 31, 2023 2022 Assets Current assets Cash and cash equivalents$303,222 $491,688 Accounts receivable, net 1,102,142 896,153 Current portion of notes receivable 30,997 27,292 Prepaid expenses and other current assets 119,092 95,469 Total current assets 1,555,453 1,510,602 Property and equipment, net 159,662 153,466 Operating lease assets 208,910 203,764 Goodwill 1,234,569 1,227,593 Intangible assets, net 18,285 25,514 Notes receivable, net 75,431 55,978 Other assets 73,568 64,490 Total assets$3,325,878 $3,241,407 Liabilities and Stockholders’ Equity Current liabilities Accounts payable, accrued expenses and other$223,758 $173,953 Accrued compensation 601,074 541,892 Billings in excess of services provided 67,937 53,646 Total current liabilities 892,769 769,491 Long-term debt, net — 315,172 Noncurrent operating lease liabilities 223,774 221,604 Deferred income taxes 140,976 162,374 Other liabilities 86,939 91,045 Total liabilities 1,344,458 1,559,686 Stockholders’ equity Preferred stock, $0.01 par value; shares authorized — 5,000; none outstanding — — Common stock, $0.01 par value; shares authorized — 75,000; shares issued and outstanding — 35,521 (2023) and 34,026 (2022) 355 340 Additional paid-in capital 16,760 — Retained earnings 2,114,765 1,858,103 Accumulated other comprehensive loss (150,460) (176,722) Total stockholders’ equity 1,981,420 1,681,721 Total liabilities and stockholders’ equity$3,325,878 $3,241,407 FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) Three Months EndedDecember 31, 2023 2022 (Unaudited)Revenues$924,684 $774,431 Operating expenses Direct cost of revenues 613,809 526,139 Selling, general and administrative expenses 194,634 164,973 Special charges — 8,340 Amortization of intangible assets 1,220 2,323 809,663 701,775 Operating income 115,021 72,656 Other income (expense) Interest income and other (8,088) (6,500)Interest expense (3,896) (2,579) (11,984) (9,079)Income before income tax provision 103,037 63,577 Income tax provision 21,404 16,079 Net income$81,633 $47,498 Earnings per common share ― basic$2.34 $1.42 Weighted average common shares outstanding ― basic 34,889 33,552 Earnings per common share ― diluted$2.28 $1.33 Weighted average common shares outstanding ― diluted 35,778 35,658 Other comprehensive income, net of tax Foreign currency translation adjustments, net of tax expense of $— and $—$28,244 $47,463 Total other comprehensive income, net of tax 28,244 47,463 Comprehensive income$109,877 $94,961 FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) Year Ended December 31, 2023 2022 Revenues$3,489,242 $3,028,908 Operating expenses Direct cost of revenues 2,354,216 2,065,977 Selling, general and administrative expenses 751,306 641,070 Special charges — 8,340 Amortization of intangible assets 6,159 9,643 3,111,681 2,725,030 Operating income 377,561 303,878 Other income (expense) Interest income and other (4,867) 3,918 Interest expense (14,331) (10,047) (19,198) (6,129)Income before income tax provision 358,363 297,749 Income tax provision 83,471 62,235 Net income$274,892 $235,514 Earnings per common share ― basic$8.10 $6.99 Weighted average common shares outstanding ― basic 33,924 33,693 Earnings per common share ― diluted$7.71 $6.58 Weighted average common shares outstanding ― diluted 35,646 35,783 Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of tax expense of $— and $—$26,262 $(47,882)Total other comprehensive income (loss), net of tax 26,262 (47,882)Comprehensive income$301,154 $187,632 FTI CONSULTING, INC.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data) Three Months EndedDecember 31, Year Ended December 31, 2023 2022 2023 2022 (Unaudited) Net income$81,633 $47,498 $274,892 $235,514 Add back: Special charges — 8,340 — 8,340 Tax impact of special charges — (1,584) — (1,584)Adjusted Net Income$81,633 $54,254 $274,892 $242,270 Earnings per common share — diluted$2.28 $1.33 $7.71 $6.58 Add back: Special charges — 0.23 — 0.23 Tax impact of special charges — (0.04) — (0.04)Adjusted earnings per common share — diluted$2.28 $1.52 $7.71 $6.77 Weighted average number of common shares outstanding ― diluted 35,778 35,658 35,646 35,783 FTI CONSULTING, INC.RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA(in thousands) Three Months Ended December 31, 2023(Unaudited) Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $81,633 Interest income and other 8,088 Interest expense 3,896 Income tax provision 21,404 Operating income $61,779 $17,415 $36,801 $8,393 $14,703 $(24,070) $115,021 Depreciation and amortization 2,597 1,680 1,534 3,992 875 475 11,153 Amortization of intangible assets 1,010 152 — — 58 — 1,220 Adjusted EBITDA $65,386 $19,247 $38,335 $12,385 $15,636 $(23,595) $127,394 Year Ended December 31, 2023 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $274,892 Interest income and other 4,867 Interest expense 14,331 Income tax provision 83,471 Operating income $216,504 $81,296 $109,818 $48,196 $47,167 $(125,420) $377,561 Depreciation and amortization 9,254 6,030 5,989 14,515 3,445 1,846 41,079 Amortization of intangible assets 5,079 783 — — 297 — 6,159 Adjusted EBITDA $230,837 $88,109 $115,807 $62,711 $50,909 $(123,574) $424,799 FTI CONSULTING, INC.RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA(in thousands) Three Months Ended December 31, 2022(Unaudited) Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $ 47,498 Interest income and other 6,500 Interest expense 2,579 Income tax provision 16,079 Operating income $ 43,008 $ 11,047 $ 26,122 $ 8,425 $ 9,360 $ (25,306) $ 72,656 Depreciation and amortization 1,734 1,206 1,183 3,226 618 688 8,655 Amortization of intangible assets 1,940 242 — — 141 — 2,323 Special charges 2,444 4,614 31 106 369 776 8,340 Adjusted EBITDA $ 49,126 $ 17,109 $ 27,336 $ 11,757 $ 10,488 $ (23,842) $ 91,974 Year Ended December 31, 2022 Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $ 235,514 Interest income and other (3,918)Interest expense 10,047 Income tax provision 62,235 Operating income $ 197,424 $ 52,693 $ 98,178 $ 33,431 $ 46,982 $ (124,830) $ 303,878 Depreciation and amortization 6,965 5,289 4,881 13,161 2,580 2,821 35,697 Amortization of intangible assets 7,976 977 — — 689 1 9,643 Special charges 2,444 4,614 31 106 369 776 8,340 Adjusted EBITDA $ 214,809 $ 63,573 $ 103,090 $ 46,698 $ 50,620 $ (121,232) $ 357,558 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.OPERATING RESULTS BY BUSINESS SEGMENT Segment Revenues AdjustedEBITDA Adjusted EBITDAMargin Utilization Average BillableRate Revenue-GeneratingHeadcount (in thousands) (at period end) Three Months Ended December 31, 2023 (Unaudited) Corporate Finance & Restructuring$365,554 $65,386 17.9% 61% $503 2,215 Forensic and Litigation Consulting 165,469 19,247 11.6% 56% $391 1,447 Economic Consulting 206,091 38,335 18.6% 65% $586 1,089 Technology (1) 100,933 12,385 12.3% N/M N/M 628 Strategic Communications (1) 86,637 15,636 18.0% N/M N/M 971 $924,684 $150,989 16.3% 6,350 Unallocated Corporate (23,595) Adjusted EBITDA $127,394 13.8% Year Ended December 31, 2023 Corporate Finance & Restructuring$1,346,678 $230,837 17.1% 60% $494 2,215 Forensic and Litigation Consulting 654,105 88,109 13.5% 57% $386 1,447 Economic Consulting 771,374 115,807 15.0% 67% $547 1,089 Technology (1) 387,855 62,711 16.2% N/M N/M 628 Strategic Communications (1) 329,230 50,909 15.5% N/M N/M 971 $3,489,242 $548,373 15.7% 6,350 Unallocated Corporate (123,574) Adjusted EBITDA $424,799 12.2% Three Months Ended December 31, 2022 (Unaudited) Corporate Finance & Restructuring (2)$305,314 $49,126 16.1% 56% $478 2,100 Forensic and Litigation Consulting (2) 147,879 17,109 11.6% 53% $370 1,430 Economic Consulting 172,007 27,336 15.9% 63% $522 1,007 Technology (1) 76,802 11,757 15.3% N/M N/M 556 Strategic Communications (1) 72,429 10,488 14.5% N/M N/M 970 $774,431 $115,816 15.0% 6,063 Unallocated Corporate (23,842) Adjusted EBITDA $91,974 11.9% Year Ended December 31, 2022 Corporate Finance & Restructuring (2)$1,147,118 $214,809 18.7% 60% $456 2,100 Forensic and Litigation Consulting (2) 579,933 63,573 11.0% 54% $359 1,430 Economic Consulting 695,208 103,090 14.8% 68% $508 1,007 Technology (1) 319,983 46,698 14.6% N/M N/M 556 Strategic Communications (1) 286,666 50,620 17.7% N/M N/M 970 $3,028,908 $478,790 15.8% 6,063 Unallocated Corporate (121,232) Adjusted EBITDA $357,558 11.8% N/M Not meaningful(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.(2) Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2023 2022 Operating activities Net income $274,892 $235,514 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 41,079 35,898 Amortization of intangible assets 6,159 9,643 Acquisition-related contingent consideration 3,818 2,172 Provision for expected credit losses 35,149 19,684 Share-based compensation 29,534 25,414 Amortization of debt issuance costs and other 1,925 2,224 Deferred income taxes (25,453) (10,456)Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable, billed and unbilled (229,296) (182,667)Notes receivable (22,919) (403)Prepaid expenses and other assets 7,606 459 Accounts payable, accrued expenses and other 8,687 8,430 Income taxes 29,335 (4,322)Accrued compensation 50,186 37,931 Billings in excess of services provided 13,759 9,273 Net cash provided by operating activities 224,461 188,794 Investing activities Payments for acquisition of businesses, net of cash received — (6,742)Purchases of property and equipment and other (49,479) (53,319)Purchase of short-term investment (24,356) — Net cash used in investing activities (73,835) (60,061)Financing activities Borrowings under revolving line of credit 835,000 165,000 Repayments under revolving line of credit (835,000) (165,000)Payments of debt issuance costs — (3,993)Repayment of convertible notes (315,763) — Purchase and retirement of common stock (20,982) (85,424)Share-based compensation tax withholdings and other (15,078) (15,330)Payments for business acquisition liabilities (3,651) (4,848)Deposits and other 811 3,583 Net cash used in financing activities (354,663) (106,012)Effect of exchange rate changes on cash and cash equivalents 15,571 (25,518)Net decrease in cash and cash equivalents (188,466) (2,797)Cash and cash equivalents, beginning of period 491,688 494,485 Cash and cash equivalents, end of period $303,222 $491,688 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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FTI Consulting Reports Record Fourth Quarter and Full Year 2023 Financial Results By: FTI Consulting, Inc. via GlobeNewswire February 22, 2024 at 07:30 AM EST Fourth Quarter 2023 Revenues of $924.7 Million, Up 19% Compared to $774.4 Million in Prior Year Quarter; Excluding Estimated Positive Impact of FX, Fourth Quarter 2023 Revenues Up 18% Compared to Prior Year QuarterFourth Quarter 2023 EPS of $2.28, Up 71% Compared to $1.33 in Prior Year Quarter; Fourth Quarter 2023 Adjusted EPS of $2.28, Up 50% Compared to $1.52 in Prior Year QuarterFull Year 2023 Revenues of $3.489 Billion, Up 15% Compared to $3.029 Billion in Prior YearFull Year 2023 EPS of $7.71, Up 17% Compared to $6.58 in Prior Year; Full Year 2023 Adjusted EPS of $7.71, Up 14% Compared to $6.77 in Prior YearIntroduces 2024 Guidance WASHINGTON, Feb. 22, 2024 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the full year and fourth quarter ended December 31, 2023. For the full year 2023, revenues of $3.489 billion increased $460.3 million, or 15.2%, compared to revenues of $3.029 billion in the prior year. The increase in revenues was due to higher demand across all business segments. Net income of $274.9 million compared to $235.5 million in the prior year. The increase in net income was primarily due to higher revenues, which was partially offset by higher compensation, a 17.2% increase in selling, general and administrative ("SG&A") expenses and higher income taxes compared to the prior year. Adjusted EBITDA of $424.8 million, or 12.2% of revenues, compared to $357.6 million, or 11.8% of revenues, in the prior year. Full year 2023 earnings per diluted share ("EPS") of $7.71 compared to $6.58 in the prior year. Full year 2022 EPS included an $8.3 million special charge related to severance and other employee-related costs, which reduced EPS by $0.19. Full year 2023 Adjusted EPS of $7.71 compared to Adjusted EPS of $6.77 in the prior year. Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, "In 2023, we continued our sustained, multi-year growth trajectory and once again delivered record revenues and earnings. These results reflect our continued ability to win in the two markets that matter most: the market for making a difference for clients and the market for great talent. That progress leaves me ever more confident about the future of our firm." Cash Position and Capital Allocation Net cash provided by operating activities of $224.5 million for the year ended December 31, 2023 compared to $188.8 million for the year ended December 31, 2022. The year-over-year increase in net cash provided by operating activities was primarily due to higher cash collections resulting from increased revenues. The increase was partially offset by higher compensation expenses, primarily related to headcount growth, an increase in other operating expenses and higher use of working capital required for growth. Cash and cash equivalents and short-term investments of $328.7 million at December 31, 2023 compared to $491.7 million at December 31, 2022 and $225.6 million at September 30, 2023. Total debt, net of cash and short-term investments, of ($328.7) million at December 31, 2023 compared to ($175.5) million at December 31, 2022 and $59.4 million at September 30, 2023. The sequential decrease in total debt, net of cash and short-term investments, was primarily due to an increase in cash provided by operating activities. There were no share repurchases during the quarter ended December 31, 2023. In full year 2023, the Company repurchased 112,139 shares of its common stock at an average price per share of $158.70 for a total cost of $17.8 million. As of December 31, 2023, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program. Fourth Quarter 2023 Results Fourth quarter 2023 revenues of $924.7 million increased $150.3 million, or 19.4%, compared to revenues of $774.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $139.0 million, or 18.0%, compared to the prior year quarter. The increase in revenues was due to higher demand across all business segments. Net income of $81.6 million compared to $47.5 million in the prior year quarter. The increase in net income was primarily due to higher revenues, which was partially offset by higher compensation and SG&A expenses compared to the prior year quarter. Adjusted EBITDA of $127.4 million, or 13.8% of revenues, compared to $92.0 million, or 11.9% of revenues, in the prior year quarter. Fourth quarter 2023 EPS of $2.28 compared to $1.33 in the prior year quarter. Fourth quarter 2022 EPS included the aforementioned $8.3 million special charge, which decreased EPS by $0.19. Fourth quarter 2023 Adjusted EPS of $2.28 compared to Adjusted EPS of $1.52 in the prior year quarter. Fourth Quarter 2023 Segment Results Corporate Finance & RestructuringRevenues in the Corporate Finance & Restructuring segment increased $60.2 million, or 19.7%, to $365.6 million in the quarter compared to $305.3 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $57.2 million, or 18.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for business transformation & strategy and restructuring services. Adjusted Segment EBITDA of $65.4 million, or 17.9% of segment revenues, compared to $49.1 million, or 16.1% 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 higher compensation, which includes the impact of a 5.5% increase in billable headcount and higher contractor costs, as well as an increase in SG&A expenses compared to the prior year quarter. Forensic and Litigation ConsultingRevenues in the Forensic and Litigation Consulting segment increased $17.6 million, or 11.9%, to $165.5 million in the quarter compared to $147.9 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and construction solutions services. Adjusted Segment EBITDA of $19.2 million, or 11.6% of segment revenues, compared to $17.1 million, or 11.6% 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 compensation and higher SG&A expenses compared to the prior year quarter. Economic ConsultingRevenues in the Economic Consulting segment increased $34.1 million, or 19.8%, to $206.1 million in the quarter compared to $172.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $30.3 million, or 17.6%, compared to the prior year quarter. The increase in revenues was primarily due to an increase in financial economics, non-merger and acquisition (“M&A”)-related antitrust and international arbitration revenues, which was partially offset by a decline in M&A-related antitrust revenues. Adjusted Segment EBITDA of $38.3 million, or 18.6% of segment revenues, compared to $27.3 million, or 15.9% 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 compensation, which includes the impact of an 8.1% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter. TechnologyRevenues in the Technology segment increased $24.1 million, or 31.4%, to $100.9 million in the quarter compared to $76.8 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $23.1 million, or 30.1%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related “second request” and litigation services. Adjusted Segment EBITDA of $12.4 million, or 12.3% of segment revenues, compared to $11.8 million, or 15.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was largely offset by higher as-needed consultant costs, an increase in compensation, which includes the impact of a 12.9% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter. Strategic CommunicationsRevenues in the Strategic Communications segment increased $14.2 million, or 19.6%, to $86.6 million in the quarter compared to $72.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $12.2 million, or 16.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for corporate reputation and public affairs services. Adjusted Segment EBITDA of $15.6 million, or 18.0% of segment revenues, compared to $10.5 million, or 14.5% 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 compensation and higher SG&A expenses compared to the prior year quarter. 2024 GuidanceThe Company estimates that revenues for full year 2024 will range between $3.650 billion and $3.790 billion. The Company estimates that EPS for full year 2024 will range between $7.75 and $8.50. The Company does not currently expect Adjusted EPS to differ from EPS. Fourth Quarter and Full Year 2023 Conference CallFTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2023 financial results at 9:00 a.m. Eastern Time on Thursday, February 22, 2024. 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 ConsultingFTI 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 7,900 employees located in 31 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.5 billion in revenues during fiscal year 2023. More information can be found at www.fticonsulting.com. Non-GAAP Financial MeasuresIn 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 IncomeAdjusted EBITDATotal Adjusted Segment EBITDAAdjusted EBITDA MarginAdjusted Net IncomeAdjusted Earnings per Diluted Share 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. 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 and Condensed 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, initiatives, projections, prospects, policies, processes and practices, objectives, goals, commitments, 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, climate change-related matters, scientific and technological developments, including relating to new and emerging technologies, such as Artificial Intelligence and machine learning, 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," "commits," "aspires," "forecasts," "future," "goal," "seeks" 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 plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. 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 public health crises 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, 2023 filed with the SEC on February 22, 2024 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.555 12th Street NWWashington, DC 20004+1.202.312.9100 Investor & Media Contact:Mollie Hawkes+1.617.747.1791mollie.hawkes@fticonsulting.com FTI CONSULTING, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) December 31, December 31, 2023 2022 Assets Current assets Cash and cash equivalents$303,222 $491,688 Accounts receivable, net 1,102,142 896,153 Current portion of notes receivable 30,997 27,292 Prepaid expenses and other current assets 119,092 95,469 Total current assets 1,555,453 1,510,602 Property and equipment, net 159,662 153,466 Operating lease assets 208,910 203,764 Goodwill 1,234,569 1,227,593 Intangible assets, net 18,285 25,514 Notes receivable, net 75,431 55,978 Other assets 73,568 64,490 Total assets$3,325,878 $3,241,407 Liabilities and Stockholders’ Equity Current liabilities Accounts payable, accrued expenses and other$223,758 $173,953 Accrued compensation 601,074 541,892 Billings in excess of services provided 67,937 53,646 Total current liabilities 892,769 769,491 Long-term debt, net — 315,172 Noncurrent operating lease liabilities 223,774 221,604 Deferred income taxes 140,976 162,374 Other liabilities 86,939 91,045 Total liabilities 1,344,458 1,559,686 Stockholders’ equity Preferred stock, $0.01 par value; shares authorized — 5,000; none outstanding — — Common stock, $0.01 par value; shares authorized — 75,000; shares issued and outstanding — 35,521 (2023) and 34,026 (2022) 355 340 Additional paid-in capital 16,760 — Retained earnings 2,114,765 1,858,103 Accumulated other comprehensive loss (150,460) (176,722) Total stockholders’ equity 1,981,420 1,681,721 Total liabilities and stockholders’ equity$3,325,878 $3,241,407 FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) Three Months EndedDecember 31, 2023 2022 (Unaudited)Revenues$924,684 $774,431 Operating expenses Direct cost of revenues 613,809 526,139 Selling, general and administrative expenses 194,634 164,973 Special charges — 8,340 Amortization of intangible assets 1,220 2,323 809,663 701,775 Operating income 115,021 72,656 Other income (expense) Interest income and other (8,088) (6,500)Interest expense (3,896) (2,579) (11,984) (9,079)Income before income tax provision 103,037 63,577 Income tax provision 21,404 16,079 Net income$81,633 $47,498 Earnings per common share ― basic$2.34 $1.42 Weighted average common shares outstanding ― basic 34,889 33,552 Earnings per common share ― diluted$2.28 $1.33 Weighted average common shares outstanding ― diluted 35,778 35,658 Other comprehensive income, net of tax Foreign currency translation adjustments, net of tax expense of $— and $—$28,244 $47,463 Total other comprehensive income, net of tax 28,244 47,463 Comprehensive income$109,877 $94,961 FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) Year Ended December 31, 2023 2022 Revenues$3,489,242 $3,028,908 Operating expenses Direct cost of revenues 2,354,216 2,065,977 Selling, general and administrative expenses 751,306 641,070 Special charges — 8,340 Amortization of intangible assets 6,159 9,643 3,111,681 2,725,030 Operating income 377,561 303,878 Other income (expense) Interest income and other (4,867) 3,918 Interest expense (14,331) (10,047) (19,198) (6,129)Income before income tax provision 358,363 297,749 Income tax provision 83,471 62,235 Net income$274,892 $235,514 Earnings per common share ― basic$8.10 $6.99 Weighted average common shares outstanding ― basic 33,924 33,693 Earnings per common share ― diluted$7.71 $6.58 Weighted average common shares outstanding ― diluted 35,646 35,783 Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of tax expense of $— and $—$26,262 $(47,882)Total other comprehensive income (loss), net of tax 26,262 (47,882)Comprehensive income$301,154 $187,632 FTI CONSULTING, INC.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data) Three Months EndedDecember 31, Year Ended December 31, 2023 2022 2023 2022 (Unaudited) Net income$81,633 $47,498 $274,892 $235,514 Add back: Special charges — 8,340 — 8,340 Tax impact of special charges — (1,584) — (1,584)Adjusted Net Income$81,633 $54,254 $274,892 $242,270 Earnings per common share — diluted$2.28 $1.33 $7.71 $6.58 Add back: Special charges — 0.23 — 0.23 Tax impact of special charges — (0.04) — (0.04)Adjusted earnings per common share — diluted$2.28 $1.52 $7.71 $6.77 Weighted average number of common shares outstanding ― diluted 35,778 35,658 35,646 35,783 FTI CONSULTING, INC.RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA(in thousands) Three Months Ended December 31, 2023(Unaudited) Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $81,633 Interest income and other 8,088 Interest expense 3,896 Income tax provision 21,404 Operating income $61,779 $17,415 $36,801 $8,393 $14,703 $(24,070) $115,021 Depreciation and amortization 2,597 1,680 1,534 3,992 875 475 11,153 Amortization of intangible assets 1,010 152 — — 58 — 1,220 Adjusted EBITDA $65,386 $19,247 $38,335 $12,385 $15,636 $(23,595) $127,394 Year Ended December 31, 2023 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $274,892 Interest income and other 4,867 Interest expense 14,331 Income tax provision 83,471 Operating income $216,504 $81,296 $109,818 $48,196 $47,167 $(125,420) $377,561 Depreciation and amortization 9,254 6,030 5,989 14,515 3,445 1,846 41,079 Amortization of intangible assets 5,079 783 — — 297 — 6,159 Adjusted EBITDA $230,837 $88,109 $115,807 $62,711 $50,909 $(123,574) $424,799 FTI CONSULTING, INC.RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA(in thousands) Three Months Ended December 31, 2022(Unaudited) Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $ 47,498 Interest income and other 6,500 Interest expense 2,579 Income tax provision 16,079 Operating income $ 43,008 $ 11,047 $ 26,122 $ 8,425 $ 9,360 $ (25,306) $ 72,656 Depreciation and amortization 1,734 1,206 1,183 3,226 618 688 8,655 Amortization of intangible assets 1,940 242 — — 141 — 2,323 Special charges 2,444 4,614 31 106 369 776 8,340 Adjusted EBITDA $ 49,126 $ 17,109 $ 27,336 $ 11,757 $ 10,488 $ (23,842) $ 91,974 Year Ended December 31, 2022 Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $ 235,514 Interest income and other (3,918)Interest expense 10,047 Income tax provision 62,235 Operating income $ 197,424 $ 52,693 $ 98,178 $ 33,431 $ 46,982 $ (124,830) $ 303,878 Depreciation and amortization 6,965 5,289 4,881 13,161 2,580 2,821 35,697 Amortization of intangible assets 7,976 977 — — 689 1 9,643 Special charges 2,444 4,614 31 106 369 776 8,340 Adjusted EBITDA $ 214,809 $ 63,573 $ 103,090 $ 46,698 $ 50,620 $ (121,232) $ 357,558 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.OPERATING RESULTS BY BUSINESS SEGMENT Segment Revenues AdjustedEBITDA Adjusted EBITDAMargin Utilization Average BillableRate Revenue-GeneratingHeadcount (in thousands) (at period end) Three Months Ended December 31, 2023 (Unaudited) Corporate Finance & Restructuring$365,554 $65,386 17.9% 61% $503 2,215 Forensic and Litigation Consulting 165,469 19,247 11.6% 56% $391 1,447 Economic Consulting 206,091 38,335 18.6% 65% $586 1,089 Technology (1) 100,933 12,385 12.3% N/M N/M 628 Strategic Communications (1) 86,637 15,636 18.0% N/M N/M 971 $924,684 $150,989 16.3% 6,350 Unallocated Corporate (23,595) Adjusted EBITDA $127,394 13.8% Year Ended December 31, 2023 Corporate Finance & Restructuring$1,346,678 $230,837 17.1% 60% $494 2,215 Forensic and Litigation Consulting 654,105 88,109 13.5% 57% $386 1,447 Economic Consulting 771,374 115,807 15.0% 67% $547 1,089 Technology (1) 387,855 62,711 16.2% N/M N/M 628 Strategic Communications (1) 329,230 50,909 15.5% N/M N/M 971 $3,489,242 $548,373 15.7% 6,350 Unallocated Corporate (123,574) Adjusted EBITDA $424,799 12.2% Three Months Ended December 31, 2022 (Unaudited) Corporate Finance & Restructuring (2)$305,314 $49,126 16.1% 56% $478 2,100 Forensic and Litigation Consulting (2) 147,879 17,109 11.6% 53% $370 1,430 Economic Consulting 172,007 27,336 15.9% 63% $522 1,007 Technology (1) 76,802 11,757 15.3% N/M N/M 556 Strategic Communications (1) 72,429 10,488 14.5% N/M N/M 970 $774,431 $115,816 15.0% 6,063 Unallocated Corporate (23,842) Adjusted EBITDA $91,974 11.9% Year Ended December 31, 2022 Corporate Finance & Restructuring (2)$1,147,118 $214,809 18.7% 60% $456 2,100 Forensic and Litigation Consulting (2) 579,933 63,573 11.0% 54% $359 1,430 Economic Consulting 695,208 103,090 14.8% 68% $508 1,007 Technology (1) 319,983 46,698 14.6% N/M N/M 556 Strategic Communications (1) 286,666 50,620 17.7% N/M N/M 970 $3,028,908 $478,790 15.8% 6,063 Unallocated Corporate (121,232) Adjusted EBITDA $357,558 11.8% N/M Not meaningful(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.(2) Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2023 2022 Operating activities Net income $274,892 $235,514 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 41,079 35,898 Amortization of intangible assets 6,159 9,643 Acquisition-related contingent consideration 3,818 2,172 Provision for expected credit losses 35,149 19,684 Share-based compensation 29,534 25,414 Amortization of debt issuance costs and other 1,925 2,224 Deferred income taxes (25,453) (10,456)Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable, billed and unbilled (229,296) (182,667)Notes receivable (22,919) (403)Prepaid expenses and other assets 7,606 459 Accounts payable, accrued expenses and other 8,687 8,430 Income taxes 29,335 (4,322)Accrued compensation 50,186 37,931 Billings in excess of services provided 13,759 9,273 Net cash provided by operating activities 224,461 188,794 Investing activities Payments for acquisition of businesses, net of cash received — (6,742)Purchases of property and equipment and other (49,479) (53,319)Purchase of short-term investment (24,356) — Net cash used in investing activities (73,835) (60,061)Financing activities Borrowings under revolving line of credit 835,000 165,000 Repayments under revolving line of credit (835,000) (165,000)Payments of debt issuance costs — (3,993)Repayment of convertible notes (315,763) — Purchase and retirement of common stock (20,982) (85,424)Share-based compensation tax withholdings and other (15,078) (15,330)Payments for business acquisition liabilities (3,651) (4,848)Deposits and other 811 3,583 Net cash used in financing activities (354,663) (106,012)Effect of exchange rate changes on cash and cash equivalents 15,571 (25,518)Net decrease in cash and cash equivalents (188,466) (2,797)Cash and cash equivalents, beginning of period 491,688 494,485 Cash and cash equivalents, end of period $303,222 $491,688
Fourth Quarter 2023 Revenues of $924.7 Million, Up 19% Compared to $774.4 Million in Prior Year Quarter; Excluding Estimated Positive Impact of FX, Fourth Quarter 2023 Revenues Up 18% Compared to Prior Year QuarterFourth Quarter 2023 EPS of $2.28, Up 71% Compared to $1.33 in Prior Year Quarter; Fourth Quarter 2023 Adjusted EPS of $2.28, Up 50% Compared to $1.52 in Prior Year QuarterFull Year 2023 Revenues of $3.489 Billion, Up 15% Compared to $3.029 Billion in Prior YearFull Year 2023 EPS of $7.71, Up 17% Compared to $6.58 in Prior Year; Full Year 2023 Adjusted EPS of $7.71, Up 14% Compared to $6.77 in Prior YearIntroduces 2024 Guidance WASHINGTON, Feb. 22, 2024 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the full year and fourth quarter ended December 31, 2023. For the full year 2023, revenues of $3.489 billion increased $460.3 million, or 15.2%, compared to revenues of $3.029 billion in the prior year. The increase in revenues was due to higher demand across all business segments. Net income of $274.9 million compared to $235.5 million in the prior year. The increase in net income was primarily due to higher revenues, which was partially offset by higher compensation, a 17.2% increase in selling, general and administrative ("SG&A") expenses and higher income taxes compared to the prior year. Adjusted EBITDA of $424.8 million, or 12.2% of revenues, compared to $357.6 million, or 11.8% of revenues, in the prior year. Full year 2023 earnings per diluted share ("EPS") of $7.71 compared to $6.58 in the prior year. Full year 2022 EPS included an $8.3 million special charge related to severance and other employee-related costs, which reduced EPS by $0.19. Full year 2023 Adjusted EPS of $7.71 compared to Adjusted EPS of $6.77 in the prior year. Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, "In 2023, we continued our sustained, multi-year growth trajectory and once again delivered record revenues and earnings. These results reflect our continued ability to win in the two markets that matter most: the market for making a difference for clients and the market for great talent. That progress leaves me ever more confident about the future of our firm." Cash Position and Capital Allocation Net cash provided by operating activities of $224.5 million for the year ended December 31, 2023 compared to $188.8 million for the year ended December 31, 2022. The year-over-year increase in net cash provided by operating activities was primarily due to higher cash collections resulting from increased revenues. The increase was partially offset by higher compensation expenses, primarily related to headcount growth, an increase in other operating expenses and higher use of working capital required for growth. Cash and cash equivalents and short-term investments of $328.7 million at December 31, 2023 compared to $491.7 million at December 31, 2022 and $225.6 million at September 30, 2023. Total debt, net of cash and short-term investments, of ($328.7) million at December 31, 2023 compared to ($175.5) million at December 31, 2022 and $59.4 million at September 30, 2023. The sequential decrease in total debt, net of cash and short-term investments, was primarily due to an increase in cash provided by operating activities. There were no share repurchases during the quarter ended December 31, 2023. In full year 2023, the Company repurchased 112,139 shares of its common stock at an average price per share of $158.70 for a total cost of $17.8 million. As of December 31, 2023, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program. Fourth Quarter 2023 Results Fourth quarter 2023 revenues of $924.7 million increased $150.3 million, or 19.4%, compared to revenues of $774.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $139.0 million, or 18.0%, compared to the prior year quarter. The increase in revenues was due to higher demand across all business segments. Net income of $81.6 million compared to $47.5 million in the prior year quarter. The increase in net income was primarily due to higher revenues, which was partially offset by higher compensation and SG&A expenses compared to the prior year quarter. Adjusted EBITDA of $127.4 million, or 13.8% of revenues, compared to $92.0 million, or 11.9% of revenues, in the prior year quarter. Fourth quarter 2023 EPS of $2.28 compared to $1.33 in the prior year quarter. Fourth quarter 2022 EPS included the aforementioned $8.3 million special charge, which decreased EPS by $0.19. Fourth quarter 2023 Adjusted EPS of $2.28 compared to Adjusted EPS of $1.52 in the prior year quarter. Fourth Quarter 2023 Segment Results Corporate Finance & RestructuringRevenues in the Corporate Finance & Restructuring segment increased $60.2 million, or 19.7%, to $365.6 million in the quarter compared to $305.3 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $57.2 million, or 18.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for business transformation & strategy and restructuring services. Adjusted Segment EBITDA of $65.4 million, or 17.9% of segment revenues, compared to $49.1 million, or 16.1% 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 higher compensation, which includes the impact of a 5.5% increase in billable headcount and higher contractor costs, as well as an increase in SG&A expenses compared to the prior year quarter. Forensic and Litigation ConsultingRevenues in the Forensic and Litigation Consulting segment increased $17.6 million, or 11.9%, to $165.5 million in the quarter compared to $147.9 million in the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and construction solutions services. Adjusted Segment EBITDA of $19.2 million, or 11.6% of segment revenues, compared to $17.1 million, or 11.6% 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 compensation and higher SG&A expenses compared to the prior year quarter. Economic ConsultingRevenues in the Economic Consulting segment increased $34.1 million, or 19.8%, to $206.1 million in the quarter compared to $172.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $30.3 million, or 17.6%, compared to the prior year quarter. The increase in revenues was primarily due to an increase in financial economics, non-merger and acquisition (“M&A”)-related antitrust and international arbitration revenues, which was partially offset by a decline in M&A-related antitrust revenues. Adjusted Segment EBITDA of $38.3 million, or 18.6% of segment revenues, compared to $27.3 million, or 15.9% 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 compensation, which includes the impact of an 8.1% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter. TechnologyRevenues in the Technology segment increased $24.1 million, or 31.4%, to $100.9 million in the quarter compared to $76.8 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $23.1 million, or 30.1%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related “second request” and litigation services. Adjusted Segment EBITDA of $12.4 million, or 12.3% of segment revenues, compared to $11.8 million, or 15.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was largely offset by higher as-needed consultant costs, an increase in compensation, which includes the impact of a 12.9% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter. Strategic CommunicationsRevenues in the Strategic Communications segment increased $14.2 million, or 19.6%, to $86.6 million in the quarter compared to $72.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $12.2 million, or 16.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for corporate reputation and public affairs services. Adjusted Segment EBITDA of $15.6 million, or 18.0% of segment revenues, compared to $10.5 million, or 14.5% 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 compensation and higher SG&A expenses compared to the prior year quarter. 2024 GuidanceThe Company estimates that revenues for full year 2024 will range between $3.650 billion and $3.790 billion. The Company estimates that EPS for full year 2024 will range between $7.75 and $8.50. The Company does not currently expect Adjusted EPS to differ from EPS. Fourth Quarter and Full Year 2023 Conference CallFTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2023 financial results at 9:00 a.m. Eastern Time on Thursday, February 22, 2024. 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 ConsultingFTI 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 7,900 employees located in 31 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.5 billion in revenues during fiscal year 2023. More information can be found at www.fticonsulting.com. Non-GAAP Financial MeasuresIn 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 IncomeAdjusted EBITDATotal Adjusted Segment EBITDAAdjusted EBITDA MarginAdjusted Net IncomeAdjusted Earnings per Diluted Share 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. 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 and Condensed 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, initiatives, projections, prospects, policies, processes and practices, objectives, goals, commitments, 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, climate change-related matters, scientific and technological developments, including relating to new and emerging technologies, such as Artificial Intelligence and machine learning, 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," "commits," "aspires," "forecasts," "future," "goal," "seeks" 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 plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. 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 public health crises 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, 2023 filed with the SEC on February 22, 2024 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.555 12th Street NWWashington, DC 20004+1.202.312.9100 Investor & Media Contact:Mollie Hawkes+1.617.747.1791mollie.hawkes@fticonsulting.com FTI CONSULTING, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) December 31, December 31, 2023 2022 Assets Current assets Cash and cash equivalents$303,222 $491,688 Accounts receivable, net 1,102,142 896,153 Current portion of notes receivable 30,997 27,292 Prepaid expenses and other current assets 119,092 95,469 Total current assets 1,555,453 1,510,602 Property and equipment, net 159,662 153,466 Operating lease assets 208,910 203,764 Goodwill 1,234,569 1,227,593 Intangible assets, net 18,285 25,514 Notes receivable, net 75,431 55,978 Other assets 73,568 64,490 Total assets$3,325,878 $3,241,407 Liabilities and Stockholders’ Equity Current liabilities Accounts payable, accrued expenses and other$223,758 $173,953 Accrued compensation 601,074 541,892 Billings in excess of services provided 67,937 53,646 Total current liabilities 892,769 769,491 Long-term debt, net — 315,172 Noncurrent operating lease liabilities 223,774 221,604 Deferred income taxes 140,976 162,374 Other liabilities 86,939 91,045 Total liabilities 1,344,458 1,559,686 Stockholders’ equity Preferred stock, $0.01 par value; shares authorized — 5,000; none outstanding — — Common stock, $0.01 par value; shares authorized — 75,000; shares issued and outstanding — 35,521 (2023) and 34,026 (2022) 355 340 Additional paid-in capital 16,760 — Retained earnings 2,114,765 1,858,103 Accumulated other comprehensive loss (150,460) (176,722) Total stockholders’ equity 1,981,420 1,681,721 Total liabilities and stockholders’ equity$3,325,878 $3,241,407 FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) Three Months EndedDecember 31, 2023 2022 (Unaudited)Revenues$924,684 $774,431 Operating expenses Direct cost of revenues 613,809 526,139 Selling, general and administrative expenses 194,634 164,973 Special charges — 8,340 Amortization of intangible assets 1,220 2,323 809,663 701,775 Operating income 115,021 72,656 Other income (expense) Interest income and other (8,088) (6,500)Interest expense (3,896) (2,579) (11,984) (9,079)Income before income tax provision 103,037 63,577 Income tax provision 21,404 16,079 Net income$81,633 $47,498 Earnings per common share ― basic$2.34 $1.42 Weighted average common shares outstanding ― basic 34,889 33,552 Earnings per common share ― diluted$2.28 $1.33 Weighted average common shares outstanding ― diluted 35,778 35,658 Other comprehensive income, net of tax Foreign currency translation adjustments, net of tax expense of $— and $—$28,244 $47,463 Total other comprehensive income, net of tax 28,244 47,463 Comprehensive income$109,877 $94,961 FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) Year Ended December 31, 2023 2022 Revenues$3,489,242 $3,028,908 Operating expenses Direct cost of revenues 2,354,216 2,065,977 Selling, general and administrative expenses 751,306 641,070 Special charges — 8,340 Amortization of intangible assets 6,159 9,643 3,111,681 2,725,030 Operating income 377,561 303,878 Other income (expense) Interest income and other (4,867) 3,918 Interest expense (14,331) (10,047) (19,198) (6,129)Income before income tax provision 358,363 297,749 Income tax provision 83,471 62,235 Net income$274,892 $235,514 Earnings per common share ― basic$8.10 $6.99 Weighted average common shares outstanding ― basic 33,924 33,693 Earnings per common share ― diluted$7.71 $6.58 Weighted average common shares outstanding ― diluted 35,646 35,783 Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of tax expense of $— and $—$26,262 $(47,882)Total other comprehensive income (loss), net of tax 26,262 (47,882)Comprehensive income$301,154 $187,632 FTI CONSULTING, INC.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data) Three Months EndedDecember 31, Year Ended December 31, 2023 2022 2023 2022 (Unaudited) Net income$81,633 $47,498 $274,892 $235,514 Add back: Special charges — 8,340 — 8,340 Tax impact of special charges — (1,584) — (1,584)Adjusted Net Income$81,633 $54,254 $274,892 $242,270 Earnings per common share — diluted$2.28 $1.33 $7.71 $6.58 Add back: Special charges — 0.23 — 0.23 Tax impact of special charges — (0.04) — (0.04)Adjusted earnings per common share — diluted$2.28 $1.52 $7.71 $6.77 Weighted average number of common shares outstanding ― diluted 35,778 35,658 35,646 35,783 FTI CONSULTING, INC.RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA(in thousands) Three Months Ended December 31, 2023(Unaudited) Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $81,633 Interest income and other 8,088 Interest expense 3,896 Income tax provision 21,404 Operating income $61,779 $17,415 $36,801 $8,393 $14,703 $(24,070) $115,021 Depreciation and amortization 2,597 1,680 1,534 3,992 875 475 11,153 Amortization of intangible assets 1,010 152 — — 58 — 1,220 Adjusted EBITDA $65,386 $19,247 $38,335 $12,385 $15,636 $(23,595) $127,394 Year Ended December 31, 2023 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $274,892 Interest income and other 4,867 Interest expense 14,331 Income tax provision 83,471 Operating income $216,504 $81,296 $109,818 $48,196 $47,167 $(125,420) $377,561 Depreciation and amortization 9,254 6,030 5,989 14,515 3,445 1,846 41,079 Amortization of intangible assets 5,079 783 — — 297 — 6,159 Adjusted EBITDA $230,837 $88,109 $115,807 $62,711 $50,909 $(123,574) $424,799 FTI CONSULTING, INC.RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA(in thousands) Three Months Ended December 31, 2022(Unaudited) Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $ 47,498 Interest income and other 6,500 Interest expense 2,579 Income tax provision 16,079 Operating income $ 43,008 $ 11,047 $ 26,122 $ 8,425 $ 9,360 $ (25,306) $ 72,656 Depreciation and amortization 1,734 1,206 1,183 3,226 618 688 8,655 Amortization of intangible assets 1,940 242 — — 141 — 2,323 Special charges 2,444 4,614 31 106 369 776 8,340 Adjusted EBITDA $ 49,126 $ 17,109 $ 27,336 $ 11,757 $ 10,488 $ (23,842) $ 91,974 Year Ended December 31, 2022 Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate TotalNet income $ 235,514 Interest income and other (3,918)Interest expense 10,047 Income tax provision 62,235 Operating income $ 197,424 $ 52,693 $ 98,178 $ 33,431 $ 46,982 $ (124,830) $ 303,878 Depreciation and amortization 6,965 5,289 4,881 13,161 2,580 2,821 35,697 Amortization of intangible assets 7,976 977 — — 689 1 9,643 Special charges 2,444 4,614 31 106 369 776 8,340 Adjusted EBITDA $ 214,809 $ 63,573 $ 103,090 $ 46,698 $ 50,620 $ (121,232) $ 357,558 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.OPERATING RESULTS BY BUSINESS SEGMENT Segment Revenues AdjustedEBITDA Adjusted EBITDAMargin Utilization Average BillableRate Revenue-GeneratingHeadcount (in thousands) (at period end) Three Months Ended December 31, 2023 (Unaudited) Corporate Finance & Restructuring$365,554 $65,386 17.9% 61% $503 2,215 Forensic and Litigation Consulting 165,469 19,247 11.6% 56% $391 1,447 Economic Consulting 206,091 38,335 18.6% 65% $586 1,089 Technology (1) 100,933 12,385 12.3% N/M N/M 628 Strategic Communications (1) 86,637 15,636 18.0% N/M N/M 971 $924,684 $150,989 16.3% 6,350 Unallocated Corporate (23,595) Adjusted EBITDA $127,394 13.8% Year Ended December 31, 2023 Corporate Finance & Restructuring$1,346,678 $230,837 17.1% 60% $494 2,215 Forensic and Litigation Consulting 654,105 88,109 13.5% 57% $386 1,447 Economic Consulting 771,374 115,807 15.0% 67% $547 1,089 Technology (1) 387,855 62,711 16.2% N/M N/M 628 Strategic Communications (1) 329,230 50,909 15.5% N/M N/M 971 $3,489,242 $548,373 15.7% 6,350 Unallocated Corporate (123,574) Adjusted EBITDA $424,799 12.2% Three Months Ended December 31, 2022 (Unaudited) Corporate Finance & Restructuring (2)$305,314 $49,126 16.1% 56% $478 2,100 Forensic and Litigation Consulting (2) 147,879 17,109 11.6% 53% $370 1,430 Economic Consulting 172,007 27,336 15.9% 63% $522 1,007 Technology (1) 76,802 11,757 15.3% N/M N/M 556 Strategic Communications (1) 72,429 10,488 14.5% N/M N/M 970 $774,431 $115,816 15.0% 6,063 Unallocated Corporate (23,842) Adjusted EBITDA $91,974 11.9% Year Ended December 31, 2022 Corporate Finance & Restructuring (2)$1,147,118 $214,809 18.7% 60% $456 2,100 Forensic and Litigation Consulting (2) 579,933 63,573 11.0% 54% $359 1,430 Economic Consulting 695,208 103,090 14.8% 68% $508 1,007 Technology (1) 319,983 46,698 14.6% N/M N/M 556 Strategic Communications (1) 286,666 50,620 17.7% N/M N/M 970 $3,028,908 $478,790 15.8% 6,063 Unallocated Corporate (121,232) Adjusted EBITDA $357,558 11.8% N/M Not meaningful(1) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.(2) Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this press release to include the reclassification of the portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2023 2022 Operating activities Net income $274,892 $235,514 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 41,079 35,898 Amortization of intangible assets 6,159 9,643 Acquisition-related contingent consideration 3,818 2,172 Provision for expected credit losses 35,149 19,684 Share-based compensation 29,534 25,414 Amortization of debt issuance costs and other 1,925 2,224 Deferred income taxes (25,453) (10,456)Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable, billed and unbilled (229,296) (182,667)Notes receivable (22,919) (403)Prepaid expenses and other assets 7,606 459 Accounts payable, accrued expenses and other 8,687 8,430 Income taxes 29,335 (4,322)Accrued compensation 50,186 37,931 Billings in excess of services provided 13,759 9,273 Net cash provided by operating activities 224,461 188,794 Investing activities Payments for acquisition of businesses, net of cash received — (6,742)Purchases of property and equipment and other (49,479) (53,319)Purchase of short-term investment (24,356) — Net cash used in investing activities (73,835) (60,061)Financing activities Borrowings under revolving line of credit 835,000 165,000 Repayments under revolving line of credit (835,000) (165,000)Payments of debt issuance costs — (3,993)Repayment of convertible notes (315,763) — Purchase and retirement of common stock (20,982) (85,424)Share-based compensation tax withholdings and other (15,078) (15,330)Payments for business acquisition liabilities (3,651) (4,848)Deposits and other 811 3,583 Net cash used in financing activities (354,663) (106,012)Effect of exchange rate changes on cash and cash equivalents 15,571 (25,518)Net decrease in cash and cash equivalents (188,466) (2,797)Cash and cash equivalents, beginning of period 491,688 494,485 Cash and cash equivalents, end of period $303,222 $491,688