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FTI Consulting Reports Second Quarter 2017 Financial Results

• Second Quarter Revenues of $444.7 Million

• Second Quarter Fully Diluted Loss Per Share of ($0.13); Adjusted EPS of $0.40

WASHINGTON, July 27, 2017 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN) today released its financial results for the quarter ended June 30, 2017.

For the quarter, revenues of $444.7 million declined $15.4 million, or 3.4%, compared to revenues of $460.1 million in the prior year quarter. Excluding the estimated negative impact of foreign currency translation (“FX”), revenues decreased $7.4 million, or 1.6%, compared to the prior year quarter. The decrease in revenues was primarily driven by lower demand for services within the Corporate Finance & Restructuring segment.

Second quarter 2017 net loss of $5.2 million compared to net income of $26.5 million in the prior year quarter. Net loss included a special charge of $30.1 million, which included $16.1 million of severance costs related to the termination of approximately 4% of the Company’s more than 4,700 employees, $12.4 million of lease curtailment charges related to the Company’s Washington, D.C., office relocation and $1.6 million of costs related to the disposal or closing of several small international offices. The Company expects that these actions will result in cost savings of approximately $23.0 million over the remainder of 2017. Adjusted EBITDA, which excludes the special charge, was $40.8 million, or 9.2% of revenues, compared to $56.6 million, or 12.3% of revenues in the prior year quarter. The decline in Adjusted EBITDA was due to lower revenues.

On a GAAP basis, second quarter 2017 fully diluted loss per share was ($0.13) compared to fully diluted earnings per share (“EPS”) of $0.64 in the prior year quarter. In total, the second quarter 2017 special charge reduced EPS by $0.52. EPS in the prior year quarter included a $1.7 million special charge, which reduced EPS by $0.02. Adjusted EPS, which excludes special charges, was $0.40 compared to $0.66 in the prior year quarter.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “We had a slow start to 2017. Despite this, we continue to expect a stronger second half of the year. This expectation is supported by the strong sequential improvement compared to the first quarter and significant new wins in our Corporate Finance & Restructuring segment; continued investment where we have confidence we can grow; and the disciplined actions we have taken to align costs with demand and reduce overhead. We believe this combination of sustained investment, disciplined cost control and the strength of our franchise will translate into second half financials that more closely reflect the underlying strength of our businesses.”

Cash Position and Capital Allocation
Net cash provided by operating activities of $10.9 million for the three months ended June 30, 2017, compared to $73.7 million for the three months ended June 30, 2016. The year-over-year difference in operating cash flows is due to lower cash receipts resulting from lower revenues and slower collections and increased compensation payments due to annual increases in salaries, increased headcount and an additional US payroll.

During the quarter, the Company repurchased 1,887,033 shares of its common stock at an average price of $34.74 for a total of $65.6 million. As of June 30, 2017, $78.9 million remained available under the Company’s $200.0 million share repurchase authorization.

Total debt of $485.0 million at June 30, 2017, compared to $500.0 million at June 30, 2016. Cash and cash equivalents were $138.5 million at June 30, 2017, compared to $182.7 million at June 30, 2016. Total debt, net of cash, of $346.5 million at June 30, 2017, compared to $317.3 million at June 30, 2016.

Second Quarter 2017 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment decreased $14.7 million, or 11.1%, to $117.5 million in the quarter compared to $132.1 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $12.5 million, or 9.4%, compared to the prior year quarter. The decrease in revenues was primarily due to lower demand for restructuring services globally, which was partially offset by higher success fees. Adjusted Segment EBITDA was $20.0 million, or 17.1% of segment revenues, compared to $32.0 million, or 24.2% of segment revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to lower revenues.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment decreased $6.8 million, or 5.7%, to $111.4 million in the quarter compared to $118.2 million in the prior year quarter. The decrease in revenues was primarily due to lower demand for global investigations and health solutions services, which was partially offset by higher demand for construction solutions services. Adjusted Segment EBITDA was $13.0 million, or 11.7% of segment revenues, compared to $15.2 million, or 12.9% of segment revenues, in the prior year quarter. The decline in Adjusted Segment EBITDA was primarily due to lower revenues, which was partially offset by lower compensation resulting from headcount reductions taken in the health solutions practice in 2016.

Economic Consulting
Revenues in the Economic Consulting segment increased $6.0 million, or 5.1%, to $124.0 million in the quarter compared to $118.0 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $8.6 million, or 7.2%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for antitrust services in North America. Adjusted Segment EBITDA was $15.5 million, or 12.5% of segment revenues, compared to $15.4 million, or 13.0% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA was consistent with the prior year quarter, as the increase in revenues was offset by increased compensation costs related to an increase in billable headcount.

Technology
Revenues in the Technology segment increased $3.7 million, or 8.8%, to $45.6 million in the quarter compared to $41.9 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues increased $4.2 million, or 10.1%, compared to the prior year quarter. The increase in revenues was primarily driven by higher consulting demand related to merger and acquisition related “second request” services, which was partially offset by reduced hosting revenue. Adjusted Segment EBITDA was $5.4 million, or 11.9% of segment revenues, compared to $5.0 million, or 12.0% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was a result of higher revenues, which was largely offset by higher cost of service and investment in future revenue generating initiatives.

Strategic Communications
Revenues in the Strategic Communications segment decreased $3.7 million, or 7.4%, to $46.2 million in the quarter compared to $49.9 million in the prior year quarter. Excluding the estimated negative impact of FX, revenues decreased $2.0 million, or 4.0%, compared to the prior year quarter. The decrease in revenues was primarily due to a decline in project-based revenues in North America, particularly for financial communications and corporate reputation services. Adjusted Segment EBITDA was $4.9 million, or 10.5% of segment revenues, compared to $8.4 million, or 16.9% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was due to lower revenues.

2017 Guidance
The Company reaffirms its full year 2017 revenue guidance of between $1.775 billion and $1.875 billion. Given the special charge in the second quarter of 2017, the Company is revising its full year 2017 GAAP EPS guidance. The Company now estimates that full year 2017 GAAP EPS will range between $1.37 and $1.67. This compares to the previous GAAP EPS guidance range of between $1.75 and $2.10. The Company is maintaining its full year 2017 Adjusted EPS guidance of between $1.90 and $2.20. The variance between GAAP EPS and Adjusted EPS guidance for full year 2017 is related to the second quarter 2017 special charge of $30.1 million, or $0.52 per share, resulting from headcount reductions, the Company’s Washington, D.C., office relocation and other costs related to the disposal or closure of several small international offices.

Second Quarter 2017 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2017 financial results at 9:00 a.m. Eastern Time on July 27, 2017. The call can be accessed live and will be available for replay over the Internet for 90 days by logging on to the Company's investor relations website here.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,600 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $1.81 billion in revenues during fiscal year 2016. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measures

In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with GAAP. Certain of these measures are considered “non-GAAP financial measures” under the SEC rules. Specifically, we have referred to the following non-GAAP measures:

  • Total Segment Operating Income
  • Adjusted EBITDA
  • Total Adjusted Segment EBITDA
  • Adjusted EBITDA Margin
  • Adjusted Net Income (Loss)
  • Adjusted Earnings per Diluted Share

We have included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA below in order to more fully define the components of certain non-GAAP financial measures presented in this earnings release. We define Segment Operating Income (Loss) as a segment’s share of Consolidated Operating Income (Loss). We define Total Segment Operating Income (Loss), which is a non-GAAP financial measure, as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of Consolidated Operating Income (Loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We define Adjusted Segment EBITDA Margin as Adjusted Segment EBITDA as a percentage of a segment’s revenues.

We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We believe that the non-GAAP financial measures, which exclude the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, when considered together with our GAAP financial results and GAAP measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income (loss) and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that this non-GAAP financial measure, which excludes the effects of the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.

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. Reconciliations of 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, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes, ""forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and estimates will be achieved, and the Company's actual results may differ materially from our expectations, beliefs and estimates. Further, preliminary 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, adverse financial, real estate, fluctuations in the price per share of our common stock, other market and general economic conditions and other future events, which could impact each of our segments 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, and other risks described under the heading "Item 1A Risk Factors" in the Company's most recent Form 10-K filed with the SEC, including the risks set forth under "Risks Related to Our Reportable Segments" and "Risks Related to Our Operations," and in the Company's other filings with the SEC, including as they will be amended and restated in the Company’s quarterly report on the Form 10-Q for the quarter ended June 30, 2017. 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.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
Three Months Ended
June 30,
2017 2016
(unaudited)
Revenues$444,715 $460,147
Operating expenses
Direct cost of revenues 304,071 303,194
Selling, general and administrative expenses 107,342 108,245
Special charges 30,074 1,750
Acquisition-related contingent consideration 777 206
Amortization of other intangible assets 2,422 2,590
444,686 415,985
Operating income 29 44,162
Other income (expense)
Interest income and other 1,592 4,125
Interest expense (6,250) (6,303)
(4,658) (2,178)
Income (loss) before income tax provision (4,629) 41,984
Income tax provision 527 15,437
Net income (loss)$(5,156) $26,547
Earnings (loss) per common share - basic$(0.13) $0.65
Weighted average common shares outstanding - basic 39,555 40,820
Earnings (loss) per common share - diluted$(0.13) $0.64
Weighted average common shares outstanding - diluted 39,555 41,599
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax expense of $0$10,174 $(18,809)
Total other comprehensive income (loss), net of tax 10,174 (18,809)
Comprehensive income$5,018 $7,738

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
Six Months Ended
June 30,
2017 2016
(unaudited)
Revenues$891,059 $930,432
Operating expenses
Direct cost of revenues 613,143 608,830
Selling, general and administrative expenses 214,637 211,854
Special charges 30,074 6,811
Acquisition-related contingent consideration 1,172 1,340
Amortization of other intangible assets 4,915 5,196
863,941 834,031
Operating income 27,118 96,401
Other income (expense)
Interest income and other 2,197 6,682
Interest expense (12,051) (12,532)
(9,854) (5,850)
Income before income tax provision 17,264 90,551
Income tax provision 8,404 33,823
Net income$8,860 $56,728
Earnings per common share - basic$0.22 $1.40
Weighted average common shares outstanding - basic 40,039 40,663
Earnings per common share - diluted$0.22 $1.37
Weighted average common shares outstanding - diluted 40,502 41,373
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax expense of $0$17,544 $(19,167)
Total other comprehensive income (loss), net of tax 17,544 (19,167)
Comprehensive income$26,404 $37,561

FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
(unaudited) (unaudited)
Net income (loss) $(5,156) $26,547 $8,860 $56,728
Add back:
Special charges 30,074 1,750 30,074 6,810
Tax impact of special charges (9,103) (691) (9,103) (2,482)
Remeasurement of acquisition-related contingent consideration 536 - 702 980
Tax impact of remeasurement of acquisition-related contingent consideration (204) - (269) (380)
Adjusted Net Income $16,147 $27,606 $30,264 $61,656
Earnings (loss) per common share – diluted $(0.13) $0.64 $0.22 $1.37
Add back:
Special charges 0.75 0.04 0.74 0.16
Tax impact of special charges (0.23) (0.02) (0.22) (0.06)
Remeasurement of acquisition-related contingent consideration 0.01 - 0.02 0.02
Tax impact of remeasurement of acquisition-related contingent consideration - - (0.01) -
Adjusted earnings per common share - diluted $0.40 $0.66 $0.75 $1.49
Weighted average number of common shares outstanding – diluted(1) 39,932 41,599 40,502 41,373
(1) For the three months ended June 30, 2017, the Company reported a net loss. For the period, the basic weighted average common shares outstanding equals the diluted weighted average common shares outstanding for purposes of calculating U.S. GAAP earnings per share because potentially dilutive securities would be antidilutive. For non-GAAP purposes, the Adjusted EPS and diluted weighted average number of common shares outstanding presented herein reflect the impact of the inclusion of share-based awards that are considered dilutive based on the impact of the add-backs included in Adjusted Net Income above.
Year Ended December 31, 2017
Low High
Guidance on estimated earnings per common share - diluted (GAAP)(1) $1.37 $1.67
Special charges, net of tax 0.52 0.52
Remeasurement of acquisition-related contingent consideration, net of tax 0.01 0.01
Guidance on estimated adjusted earnings per common share (Non-GAAP)(1) $1.90 $2.20
(1) The forward-looking guidance on estimated 2017 earnings per diluted share (“EPS”) and adjusted earnings per common share - diluted ("Adjusted EPS") do not reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to future impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and/or losses on early extinguishment of debt except for the actual charges taken during the six months ended June 30, 2017, as these items are dependent on future events that are uncertain and difficult to predict.

FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
Adjusted Average Revenue-
Segment Adjusted EBITDA Billable Generating
Revenues EBITDA Margin Utilization Rate Headcount
(in thousands) (at period end)
Three Months Ended June 30, 2017 (unaudited)
Corporate Finance & Restructuring $117,487 $20,048 17.1% 60% $403 881
Forensic and Litigation Consulting 111,410 13,032 11.7% 60% $310 1,070
Economic Consulting 124,004 15,509 12.5% 68% $542 652
Technology(1) 45,566 5,421 11.9% N/M N/M 301
Strategic Communications(1) 46,248 4,876 10.5% N/M N/M 659
$444,715 $58,886 13.2% 3,563
Unallocated Corporate (18,098)
Adjusted EBITDA $40,788 9.2%
Six Months Ended June 30, 2017 (unaudited)
Corporate Finance & Restructuring $223,388 $30,373 13.6% 60% $390 881
Forensic and Litigation Consulting 222,816 26,553 11.9% 60% $320 1,070
Economic Consulting 263,225 35,619 13.5% 70% $548 652
Technology(1) 91,653 13,225 14.4% N/M N/M 301
Strategic Communications(1) 89,977 9,133 10.2% N/M N/M 659
$891,059 $114,903 12.9% 3,563
Unallocated Corporate (35,796)
Adjusted EBITDA $ 79,107 8.9%
Three Months Ended June 30, 2016 (unaudited)
Corporate Finance & Restructuring $132,142 $32,041 24.2% 68% $422 853
Forensic and Litigation Consulting 118,193 15,190 12.9% 61% $333 1,117
Economic Consulting 118,006 15,381 13.0% 71% $526 604
Technology(1) 41,882 5,035 12.0% N/M N/M 301
Strategic Communications(1) 49,924 8,440 16.9% N/M N/M 606
$460,147 $76,087 16.5% 3,481
Unallocated Corporate (19,507)
Adjusted EBITDA $56,580 12.3%
Six Months Ended June 30, 2016 (unaudited)
Corporate Finance & Restructuring $259,298 $63,644 24.5% 71% $402 853
Forensic and Litigation Consulting 237,197 34,998 14.8% 62% $333 1,117
Economic Consulting 248,737 36,700 14.8% 75% $529 604
Technology(1) 90,163 12,858 14.3% N/M N/M 301
Strategic Communications(1) 95,037 14,548 15.3% N/M N/M 606
$930,432 $162,748 17.5% 3,481
Unallocated Corporate (37,311)
Adjusted EBITDA $125,437 13.5%
(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.

RECONCILIATION OF NET INCOME (LOSS) AND OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(in thousands)
Three Months Ended June 30, 2017 (unaudited)Corporate
Finance &
Restructuring
Forensic and
Litigation
Consulting
Economic
Consulting
Technology Strategic
Communications
Unallocated
Corporate
Total
Net loss $ (5,156)
Interest income and other (1,592)
Interest expense 6,250
Income tax provision 527
Operating income (loss) $ 15,447 $ 1,183 $ 8,008 $ (1,568) $ (755) $ (22,286) $ 29
Depreciation and amortization 768 1,032 1,436 3,001 546 944 7,727
Amortization of other intangible assets 784 372 155 161 950 - 2,422
Special charges 3,049 10,445 5,910 3,827 3,599 3,244 30,074
Remeasurement of acquisition-related contingent consideration - - - - 536 - 536
Adjusted EBITDA $ 20,048 $ 13,032 $ 15,509 $ 5,421 $ 4,876 $ (18,098) $ 40,788
Six Months Ended June 30, 2017 (unaudited)Corporate
Finance &
Restructuring
Forensic and
Litigation
Consulting
Economic Consulting Technology Strategic Communications Unallocated Corporate Total
Net income $ 8,860
Interest income and other (2,197)
Interest expense 12,051
Income tax provision 8,404
Operating income $ 24,196 $ 13,107 $ 26,510 $ 2,872 $ 1,772 $ (41,339) $ 27,118
Depreciation and amortization 1,549 2,205 2,890 6,207 1,148 2,299 16,298
Amortization of other intangible assets 1,579 796 309 319 1,912 - 4,915
Special charges 3,049 10,445 5,910 3,827 3,599 3,244 30,074
Remeasurement of acquisition-related contingent consideration - - - - 702 - 702
Adjusted EBITDA $ 30,373 $ 26,553 $ 35,619 $ 13,225 $ 9,133 $ (35,796) $ 79,107
Three Months Ended June 30, 2016 (unaudited)Corporate
Finance &
Restructuring
Forensic and
Litigation
Consulting
Economic
Consulting
Technology Strategic
Communications
Unallocated
Corporate
Total
Net income $ 26,547
Interest income and other (4,125)
Interest expense 6,303
Income tax provision 15,437
Operating income $ 30,482 $ 11,925 $ 14,291 $ 880 $ 6,990 $ (20,406) $ 44,162
Depreciation and amortization 755 996 935 3,996 497 899 8,078
Amortization of other intangible assets 804 519 155 159 953 - 2,590
Special charges - 1,750 - - - - 1,750
Adjusted EBITDA $ 32,041 $ 15,190 $ 15,381 $ 5,035 $ 8,440 $ (19,507) $ 56,580
Six Months Ended June 30, 2016 (unaudited)Corporate
Finance &
Restructuring
Forensic and
Litigation
Consulting
Economic
Consulting
Technology Strategic
Communications
Unallocated
Corporate
Total
Net income $ 56,728
Interest income and other (6,682)
Interest expense 12,532
Income tax provision 33,823
Operating income (loss) $ 60,558 $ 30,138 $ 34,502 $ (300) $ 10,655 $ (39,152) $ 96,401
Depreciation and amortization 1,477 2,075 1,860 7,780 1,016 1,841 16,049
Amortization of other intangible assets 1,609 1,035 338 317 1,897 - 5,196
Special Charges - 1,750 - 5,061 - - 6,811
Remeasurement of acquisition-related contingent consideration - - - - 980 - 980
Adjusted EBITDA $ 63,644 $ 34,998 $ 36,700 $ 12,858 $ 14,548 $ (37,311) $ 125,437

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six months ended
June 30,
2017 2016
(unaudited)
Operating activities
Net income$8,860 $56,728
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 16,298 16,049
Amortization and impairment of other intangible assets 4,915 5,196
Acquisition-related contingent consideration 1,172 1,340
Provision for doubtful accounts 5,971 4,344
Non-cash share-based compensation 9,959 9,667
Non-cash interest expense 992 992
Other 242 (639)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, billed and unbilled (78,100) (57,501)
Notes receivable 2,241 (4,640)
Prepaid expenses and other assets 947 (943)
Accounts payable, accrued expenses and other (1,887) 1,932
Income taxes 3,087 29,329
Accrued compensation (64,531) (28,518)
Billings in excess of services provided 7,634 7,297
Net cash provided by (used in) operating activities (82,200) 40,633
Investing activities
Payments for acquisition of businesses, net of cash received - (56)
Purchases of property and equipment (13,127) (11,983)
Other 72 96
Net cash used in investing activities (13,055) (11,943)
Financing activities
Borrowings under revolving line of credit, net 115,000 -
Deposits 3,262 2,557
Purchase and retirement of common stock (102,513) (2,903)
Net issuance of common stock under equity compensation plans (500) 9,353
Other (79) (154)
Net cash provided by financing activities 15,170 8,853
Effect of exchange rate changes on cash and cash equivalents 2,438 (4,638)
Net increase (decrease) in cash and cash equivalents (77,647) 32,905
Cash and cash equivalents, beginning of period 216,158 149,760
Cash and cash equivalents, end of period$138,511 $182,665

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, December 31,
2017 2016
(unaudited)
Assets
Current assets
Cash and cash equivalents$138,511 $216,158
Accounts receivable:
Billed receivables 399,100 365,385
Unbilled receivables 345,228 288,331
Allowance for doubtful accounts and unbilled services (191,113) (178,819)
Accounts receivable, net 553,215 474,897
Current portion of notes receivable 27,126 31,864
Prepaid expenses and other current assets 58,937 60,252
Total current assets 777,789 783,171
Property and equipment, net of accumulated depreciation 60,280 61,856
Goodwill 1,187,664 1,180,001
Other intangible assets, net of amortization 48,213 52,120
Notes receivable, net of current portion 108,692 104,524
Other assets 42,155 43,696
Total assets$2,224,793 $2,225,368
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and other$85,403 $87,320
Accrued compensation 191,683 261,500
Billings in excess of services provided 37,652 29,635
Total current liabilities 314,738 378,455
Long-term debt, net 480,906 365,528
Deferred income taxes 175,683 173,799
Other liabilities 114,288 100,228
Total liabilities 1,085,615 1,018,010
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 ― 39,527 (2017) and 42,037 (2016) 395 420
Additional paid-in capital 325,446 416,816
Retained earnings 946,672 941,001
Accumulated other comprehensive loss (133,335) (150,879)
Total stockholders' equity 1,139,178 1,207,358
Total liabilities and stockholders' equity$2,224,793 $2,225,368

FTI Consulting, Inc. 555 12th Street NW Washington, DC 20004 +1.202.312.9100 Investor & Media Contact: Mollie Hawkes +1.617.747.1791 mollie.hawkes@fticonsulting.com

Source:FTI Consulting, Inc.