EX-99.1 4 e920971.txt PRESS RELEASE EXHIBIT 99.1 NEWS FRB/WEBER SHANDWICK FINANCIAL COMMUNICATIONS RE: FTI CONSULTING, INC. 900 Bestgate Road Annapolis, MD 21401 (410) 224-8770 FOR FURTHER INFORMATION: AT FTI CONSULTING: AT FRB|WEBERSHANDWICK: Jack Dunn Marilyn Windsor Lisa Fortuna Tim Grace Chairman & CEO General Inquiries Analyst Inquiries Media Inquiries (410) 224-1483 (702) 515-1260 (312) 640-6779 (312) 640-6667 FOR IMMEDIATE RELEASE WEDNESDAY, OCTOBER 22, 2003 FTI CONSULTING, INC. ANNOUNCES THIRD QUARTER RESULTS; REACHES DEFINITIVE AGREEMENT TO ACQUIRE DISPUTE ADVISORY SERVICES BUSINESS OF KPMG; COMPLETES TEN EYCK ACQUISITION; ESTABLISHES SHARE REPURCHASE PROGRAM REPORTS $0.36 PER FULLY DILUTED SHARE FROM CONTINUING OPERATIONS FOR QUARTER; BOARD AUTHORIZES UP TO $50 MILLION OF ITS COMMON SHARES OVER NEXT 12 MONTHS ANNAPOLIS, MD, OCTOBER 22, 2003--FTI CONSULTING, INC. (NYSE: FCN), the premier national provider of turnaround, bankruptcy and litigation-related consulting services, today reported results for the third quarter ended September 30, 2003. Results from continuing operations for the quarter include the contribution from its August 31, 2002 acquisition of the domestic Business Recovery Services Division (BRS) of PricewaterhouseCoopers, which was included for one month in the 2002 third quarter results. Continuing operations exclude the results of the company's discontinued SEA practice group, which was sold on August 31, 2003. FTI also announced that it has entered into a definitive agreement with KPMG LLP, the U.S. accounting and tax firm, to acquire substantially all of KPMG's domestic Dispute Advisory Services (DAS) business for approximately $89.1 million in cash, and has also completed the acquisition of Ten Eyck Associates, a financial consulting group that specializes in Securities and Exchange Commission-related issues. THIRD QUARTER RESULTS FROM CONTINUING OPERATIONS For the quarter, revenues from continuing operations were $83.6 million, an increase of 49.6 percent compared with $55.9 million for the comparable period in 2002. Revenues from continuing operations increased 13.9 percent compared with pro forma revenues from continuing operations of $73.4 million for the quarter ended September 30, 2002, assuming the August 31, 2002 acquisition of BRS had been effective for the entire third quarter of 2002. Income from continuing operations grew 84.1 percent to $15.1 million from $8.2 million in the comparable quarter last year, and earnings from continuing MORE FTI CONSULTING, INC. ADD 1 operations per share grew 50.0 percent to $0.36 on a diluted basis compared with $0.24 for the comparable period in the prior year, and increased 260.0 percent compared with $0.10 earnings from continuing operations per diluted share on a pro forma basis for the third quarter of 2002. Earnings per share for the third quarter of 2003 includes the effect of the reversal of previously accrued but unpaid incentive compensation of $2.1 million, or $0.03 per share. This compensation is not expected to be paid as a result of lower than anticipated earnings. Including the results of the discontinued operations, discussed below, earnings per share on a diluted basis were also $0.36. Cash flow provided by operations was $29.3 million compared with $15.4 million in the third quarter of the prior year. Earnings from continuing operations before interest, taxes, depreciation and amortization of property and equipment, which is included in selling, general and administrative expenses, and amortization of other intangible assets, which is reflected as a separate line item in the company's consolidated statements of income (EBITDA), were $28.5 million compared with $16.5 million in the prior year, an increase of 72.7 percent. Although EBITDA is not a measure of financial condition or performance determined in accordance with Generally Accepted Accounting Principles, the company believes that the use of EBITDA as a supplemental financial measure is indicative of the company's capacity to service debt and thereby provides additional useful information to investors regarding the company's financial condition and results of operations. At September 30, 2003, FTI had cash and cash equivalents of approximately $133.4 million. Total long-term debt at September 30, 2003 was $20.9 million, and no amounts were outstanding under the company's $100 million revolving line of credit. Utilization of billable personnel was approximately 78 percent for the quarter. Average rate per hour for the quarter was $362. Total and billable headcounts at September 30, 2003 were 750 and 568, respectively. NINE-MONTH RESULTS FROM CONTINUING OPERATIONS For the nine months, revenues from continuing operations increased 109.2 percent to $279.5 million compared with $133.6 million in the prior year. Revenues from continuing operations increased 15.3 percent compared with pro forma revenues from continuing operations of $242.5 million for the nine months ended September 30, 2002, assuming the August 31, 2002 acquisition of BRS had occurred at the beginning of 2002. Income from continuing operations was $52.1 million, an increase of 170.0 percent over $19.3 million in the prior year. Earnings from continuing operations per diluted share were $1.25 compared with earnings from continuing operations per diluted share of $0.59 for the 2002 period, or a 111.9 percent increase, and increased 54.3 percent compared with $0.81 earnings from continuing operations per diluted share on a pro forma basis for the nine months ended September 30, 2002. EBITDA increased by 154.2 percent to $97.6 million for the first nine months of 2003, compared with $38.4 million in the first nine months of 2002. Cash flow provided by operations for the nine months was $83.1 million compared with $28.4 million in the prior year. DISCONTINUED OPERATIONS Discontinued operations includes the results of the company's discontinued SEA practice group, which was sold on August 31, 2003. Loss from operations of discontinued operations, net of income taxes, MORE FTI CONSULTING, INC. ADD 2 amounted to $267,000 or $0.01 per share, for the third quarter of 2003 compared with income from operations, net of income taxes, of $656,000, or $0.02 per share, for the third quarter of 2002. Income from operations of discontinued operations was $1.6 million, or $0.04 per share, for the first nine months of 2003 compared with $2.9 million, or $0.09 per share, for the first nine months of 2002. Net gain from sale of discontinued operations in the third quarter of 2003 of $304,000, or $0.01 per share, primarily represents a refinement of the estimated taxes to be incurred in connection with the sale of SEA as compared to the amount estimated and recorded at June 30, 2003. ACQUISITION OF DISPUTE ADVISORY SERVICES (DAS) BUSINESS OF KPMG The DAS business assists clients in the analysis and resolution of all phases of complex claims and disputes in a variety of forums, including litigation, arbitration, mediation, and other forms of dispute resolution. Located in 14 cities across the United States, 10 of which are in the same cities as FTI, approximately 26 KPMG partners, 125 other billable professionals, plus support staff are expected to join FTI. The DAS business has not been historically operated by KPMG as a separate reporting unit of its forensic accounting and litigation support practice unit and has not been separately accounted for financial reporting purposes. KPMG has advised FTI that for the trailing 12 months ended September 30, 2003, the unaudited revenues associated with the 26 DAS partners were approximately $74.0 million. Annual direct compensation and other costs associated with the transferred DAS partners and billable staff are expected to total approximately $43.5 million subsequent to the acquisition by FTI. Selling, general and administrative expenses are estimated at approximately $12.5 million, resulting in pro forma income from operations of approximately $18.0 million prior to one-time integration costs. The purchase will be financed by FTI with a combination of cash on hand, existing credit lines and/or new credit facilities, and does not include any working capital. Because FTI is not acquiring the net working capital of DAS, the initial working capital, estimated at approximately $14.0 million, is expected to be provided by FTI and reflected as a use of cash in operating activities for FTI's financial reporting purposes during the first three to four months after the acquisition is completed. Consummation of the acquisition is subject to certain closing conditions, including the expiration of early termination of applicable Hart-Scott-Rodino waiting periods, the receipt of certain third-party consents and other customary conditions to closing. Although there can be no assurance that the transaction will be consummated, FTI and KPMG expect to close before the end of October 2003. FTI and KPMG will also enter into a transition services agreement to provide for the orderly transfer of DAS personnel from KPMG to FTI offices. The 26 DAS partners and two other members of the DAS leadership group will enter into five-year employment agreements and become senior managing directors of FTI Consulting. STATUS OF PENDING ACQUISITION OF LEXECON The pending acquisition of the assets of Lexecon Inc. has been granted early termination of Hart-Scott-Rodino waiting periods, and a vote by the shareholders of its parent, Nextera Enterprises, has been scheduled for November 14, 2003. In connection with the asset purchase agreement, Knowledge Universe, Inc. and Nextera Enterprises Holdings, Inc. entered into a voting agreement in which they agreed to vote shares representing approximately 71 percent of the voting power of Nextera in favor of the transactions contemplated by the purchase agreement. Subject to a favorable vote by such shareholders, the acquisition of Lexecon is expected to occur on November 30, 2003. The Lexecon acquisition, as previously reported, is expected to add approximately 200 employees. For the trailing 12 months ended June 30, 2003, Lexecon had preliminary unaudited annual revenues exceeding $72.0 million and pro forma EBITDA on a separate company basis of approximately $15.0 million. MORE FTI CONSULTING, INC. ADD 3 OUTLOOK FOR THE FOURTH QUARTER OF 2003 Absent any significant impact from the two potential acquisitions (Lexecon and DAS), FTI believes that revenues for the fourth quarter of 2003 are anticipated to range from $82.0 million to $84.0 million. Earnings per diluted share are anticipated to range from $0.30 to $0.33. Utilization of billable personnel is anticipated to be approximately 80 percent, average rate per hour is expected to approximate the third quarter level of $362 per hour, and billable headcount is anticipated to range from 560 to 570. In addition, the combined contribution to earnings per share in the fourth quarter of 2003 of the two potential acquisitions is expected to range from an additional $0.02 to $0.03 if such acquisitions are completed before the end of November 2003. OUTLOOK FOR 2004 Absent any significant impact from the two potential acquisitions or a resumption of higher levels of restructuring activity before early 2005, FTI believes that revenues for 2004 are anticipated to continue at the run rate for the third and fourth quarters of 2003 and to range from $320.0 million to $340.0 million. Earnings per diluted share are anticipated to range from $1.30 to $1.35. Utilization of billable personnel is anticipated to be approximately 80 percent, average rate per hour is expected to be approximately the same as 2003, and billable headcount is anticipated to average at about current levels before acquisitions. In addition, the combined contribution to earnings per share in 2004 of the two potential acquisitions is expected to range from an additional $0.29 to $0.37 if such acquisitions are completed by year-end 2003. FTI has not yet completed its quarter-to-quarter outlook for 2004 but presently anticipates that results would reflect the company's historical seasonal pattern, with third quarter results the lowest of the year. MANAGEMENT COMMENTS President and chief operating officer, Stewart Kahn, said, "The results for the quarter were not up to expectations, but they did represent a considerable achievement for FTI personnel compared to the third quarter of the prior year. We are continuing to address the slowdown in the restructuring market by repositioning our resources for other assignments and our active acquisition program. Although the restructuring market in 2004 is expected to continue to reflect the slowdown that we are currently experiencing, the other aspects of FTI's business, including forensic accounting, investigative services, electronic evidence and economic consulting are expected to offset a substantial part of the decline in restructuring volume. Given the recent increase in the volume of debt originations, we expect a resumption of higher levels of restructuring activity beginning either late in 2004 or early 2005 "Although there can be no assurance of the timing or certainty of acquisitions, the acquisition of Ten Eyck Associates, which we have just completed, and the DAS and Lexecon acquisitions that are pending, would significantly change the balance of our services portfolio from approximately 70 percent restructuring to less than 40 percent, and are expected to absorb resources on complementary assignments. The DAS group, led by Roger Carlile, will become part of our overall forensic accounting and fraud investigation practice and will dramatically increase the scope and depth of our expertise, as well as our geographic presence. The DAS group also substantially adds to our experience in intellectual property matters, and in a number of industries including healthcare, construction and aerospace and defense," Kahn added. MORE FTI CONSULTING, INC. ADD 4 Jack Dunn, chairman and chief executive officer said, "Over the last 90 days, we have worked hard not only to diversify our company, but to establish an array of services that can be offered with distinction to our many clients. This work represents a large step in our strategy to establish a franchise as a leader in providing financial consulting services as a preferred alternative in the post Sarbanes-Oxley world. We believe the additions of Ten Eyck, Lexecon and the DAS practice our our existing group of great professionals will set the stage for our performance for many years to come." SHARE REPURCHASE PROGRAM FTI's Board of Directors has approved a share repurchase program under which the company may purchase, from time to time, up to $50 million of the company's common shares over the next 12 months. The shares may be purchased through open market or privately negotiated transactions and will be funded with a combination of cash on hand, existing credit lines and/or new credit facilities. THIRD QUARTER CONFERENCE CALL FTI will hold a conference call to discuss third quarter results and management's outlook for the fourth quarter of 2003 and for 2004 at 11:00 a.m. EDT on Thursday, October 23, 2003. The call can be accessed live and will be available for replay over the Internet by logging onto www.vcall.com as well as on the company's website, www.fticonsulting.com, for 90 days. ABOUT FTI CONSULTING FTI Consulting is a multi-disciplined consulting firm with leading practices in the areas of turnaround, bankruptcy and litigation-related consulting services. Modern corporations, as well as those who advise and invest in them, face growing challenges on every front. From a proliferation of "bet-the-company" litigation to increasingly complicated relationships with lenders and investors in an ever-changing global economy, U.S. companies are turning more and more to outside experts and consultants to meet these complex issues. FTI is dedicated to helping corporations, their advisors, lawyers, lenders and investors meet these challenges by providing a broad array of the highest quality professional practices from a single source. This press release includes "forward-looking" statements that involve uncertainties and risks. There can be no assurance that actual results will not differ from the company's expectations. The company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this may occur from time to time in the future. As a result of these possible fluctuations, the company's actual results may differ from our projections. Other factors that could cause such differences include pace and timing of additional acquisitions, the company's ability to realize cost savings and efficiencies, competitive and general economic conditions, and other risks described in the company's filings with the Securities and Exchange Commission. FTI IS ON THE INTERNET AT www.fticonsulting.com. -FINANCIAL TABLES FOLLOW- MORE FTI Consulting, Inc. Add 5 FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER-SHARE DATA)
THREE MONTHS ENDED 9/30/2003 9/30/2002 --------- --------- (UNAUDITED) REVENUES $ 83,593 $ 55,859 DIRECT COST OF REVENUES 37,388 27,278 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 19,165 13,246 AMORTIZATION OF OTHER INTANGIBLE ASSETS 775 252 --------- --------- TOTAL COSTS AND EXPENSES 57,328 40,776 --------- --------- OPERATING INCOME 26,265 15,083 INTEREST EXPENSE, NET 845 1,251 --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 25,420 13,832 INCOME TAXES 10,295 5,596 --------- --------- INCOME FROM CONTINUING OPERATIONS 15,125 8,236 INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED OPERATIONS, NET OF INCOME TAX(1) (267) 656 LOSS FROM SALE OF DISCONTINUED OPERATIONS, NET OF INCOME TAXES 304 - --------- --------- NET INCOME $ 15,162 $ 8,892 ========= ========= INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE, BASIC $ 0.36 $ 0.25 INCOME FROM DISCONTINUED OPERATIONS PER COMMON SHARE, BASIC 0.00 0.02 ========= ========= EARNINGS PER COMMON SHARE, BASIC $ 0.36 $ 0.27 ========= ========= WEIGHTED AVERAGE SHARES FOR BASIC(2) 41,764 32,435 ========= ========= INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE, DILUTED $ 0.36 $ 0.24 INCOME FROM DISCONTINUED OPERATIONS PER COMMON SHARE, DILUTED 0.00 0.02 ========= ========= EARNINGS PER COMMON SHARE, DILUTED $ 0.36 $ 0.26 ========= ========= WEIGHTED AVERAGE SHARES FOR DILUTED(2) 42,585 34,515 ========= ========= (1) REVENUES INCLUDED IN DISCONTINUED OPERATIONS WERE $6,495 AND $11,021 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002, RESPECTIVELY. (2) WEIGHTED AVERAGE SHARES HAVE BEEN ADJUSTED TO REFLECT THE THREE-FOR-TWO STOCK SPLIT EFFECTED AS A STOCK DIVIDEND PAID TO SHAREHOLDERS ON JUNE 4, 2003. SUPPLEMENTAL FINANCIAL DATA THREE MONTHS ENDED 9/30/2003 9/30/2002 --------- --------- (IN THOUSANDS) EBITDA FROM CONTINUING OPERATIONS(3) EBITDA RECONCILIATION: EBITDA FROM CONTINUING OPERATIONS $ 28,471 $ 16,501 DEPRECIATION AND AMORTIZATION 2,206 1,418 --------- --------- REPORTED OPERATING INCOME 26,265 15,083 INTEREST EXPENSE, NET 845 1,251 INCOME TAXES 10,295 5,596 --------- --------- INCOME FROM CONTINUING OPERATIONS 15,125 8,236 INCOME (LOSS) FROM DISCONTINUED OPERATIONS 37 656 --------- --------- NET INCOME $ 15,162 $ 8,892 ========= =========
(3) EBITDA (EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION) IS A NON-GAAP FINANCIAL MEASURE DEFINED AS OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION. GENERALLY, A NON-GAAP FINANCIAL MEASURE IS A NUMERICAL MEASURE OF A COMPANY'S PERFORMANCE, FINANCIAL POSITION, OR CASH FLOW THAT EITHER EXCLUDES OR INCLUDES AMOUNTS THAT ARE NOT NORMALLY EXCLUDED OR INCLUDED IN THE MOST DIRECTLY COMPARABLE MEASURE CALCULATED AND PRESENTED IN ACCORDANCE WITH GAAP. THIS MEASURE, HOWEVER, SHOULD BE CONSIDERED IN ADDITION TO, AND NOT AS A SUBSTITUTE OR SUPERIOR TO, OPERATING INCOME, CASH FLOWS, OR OTHER MEASURES OF FINANCIAL PERFORMANCE PREPARED IN ACCORDANCE WITH GAAP. MORE FTI Consulting, Inc. Add 6 FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER-SHARE DATA)
NINE MONTHS ENDED 9/30/2003 9/30/2002 --------- --------- (UNAUDITED) REVENUES $ 279,470 $ 133,556 DIRECT COST OF REVENUES 126,998 65,512 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 59,119 32,796 AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS 2,325 252 --------- --------- TOTAL COSTS AND EXPENSES 188,442 98,560 --------- --------- OPERATING INCOME 91,028 34,996 INTEREST EXPENSE, NET 3,416 2,582 --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE TAXES 87,612 32,414 INCOME TAXES 35,485 13,097 --------- --------- INCOME FROM CONTINUING OPERATIONS 52,127 19,317 INCOME FROM OPERATIONS OF DISCONTINUED OPERATIONS, NET OF INCOME TAXES(1) 1,649 2,867 LOSS FROM SALE OF DISCONTINUED OPERATIONS, NET OF INCOME TAXES (6,971) - --------- --------- NET INCOME $ 46,805 $ 22,184 ========= ========= INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE, BASIC $ 1.28 $ 0.63 INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER COMMON SHARE, BASIC (0.13) 0.09 ========= ========= EARNINGS PER COMMON SHARE, BASIC $ 1.15 $ 0.72 ========= ========= WEIGHTED AVERAGE SHARES FOR BASIC(2) 40,597 30,801 ========= ========= INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE, DILUTED $ 1.25 $ 0.59 INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER COMMON SHARE, DILUTED (0.13) 0.09 ========= ========= EARNINGS PER COMMON SHARE, DILUTED $ 1.12 $ 0.67 ========= ========= WEIGHTED AVERAGE SHARES FOR DILUTED(2) 41,806 33,017 ========= ========= (1) REVENUES INCLUDED IN DISCONTINUED OPERATIONS WERE $24,011 AND $35,078 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002, RESPECTIVELY. (2) WEIGHTED AVERAGE SHARES HAVE BEEN ADJUSTED TO REFLECT THE THREE-FOR-TWO STOCK SPLIT EFFECTED AS A STOCK DIVIDEND PAID TO SHAREHOLDERS ON JUNE 4, 2003. SUPPLEMENTAL FINANCIAL DATA NINE MONTHS ENDED 9/30/2003 9/30/2002 --------- --------- (IN THOUSANDS) EBITDA FROM CONTINUING OPERATIONS(3) EBITDA RECONCILIATION: EBITDA FROM CONTINUING OPERATIONS $ 97,640 $ 38,404 DEPRECIATION AND AMORTIZATION 6,612 3,408 --------- --------- REPORTED OPERATING INCOME 91,028 34,996 INTEREST EXPENSE, NET 3,416 2,582 INCOME TAXES 35,485 13,097 --------- --------- INCOME FROM CONTINUING OPERATIONS 52,127 19,317 INCOME (LOSS) FROM DISCONTINUED OPERATIONS (5,322) 2,867 --------- --------- NET INCOME $ 46,805 $ 22,184 ========= =========
(3) EBITDA (EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION) IS A NON-GAAP FINANCIAL MEASURE DEFINED AS OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION. GENERALLY, A NON-GAAP FINANCIAL MEASURE IS A NUMERICAL MEASURE OF A COMPANY'S PERFORMANCE, FINANCIAL POSITION, OR CASH FLOW THAT EITHER EXCLUDES OR INCLUDES AMOUNTS THAT ARE NOT NORMALLY EXCLUDED OR INCLUDED IN THE MOST DIRECTLY COMPARABLE MEASURE CALCULATED AND PRESENTED IN ACCORDANCE WITH GAAP. THIS MEASURE, HOWEVER, SHOULD BE CONSIDERED IN ADDITION TO, AND NOT AS A SUBSTITUTE OR SUPERIOR TO, OPERATING INCOME, CASH FLOWS, OR OTHER MEASURES OF FINANCIAL PERFORMANCE PREPARED IN ACCORDANCE WITH GAAP. MORE FTI CONSULTING, INC. ADD 7 FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (in thousands of dollars) SEPTEMBER 30, SEPTEMBER 30, 2003 2002 --------------------------- (unaudited) Operating activities Net income $ 46,805 $ 22,184 Adjustment to reconcile net income to net cash (used in) provided by operating activities: Depreciation and other amortization 4,682 3,627 Amortization of other intangible assets 2,325 252 Income tax benefit from stock option exercises 11,173 9,090 Provision for doubtful accounts 5,213 891 Non-cash charge on sale of discontinued operations 6,691 - Non-cash interest and other 2,351 510 Changes in operating assets and liabilities: Accounts receivable, billed and unbilled 2,286 (17,915) Income taxes, current and deferred 4,492 3,289 Accrued compensation expense (4,805) 4,580 Billings in excess of services provided (1,383) 1,756 Other assets and liabilities 3,260 140 ------------ ------------ Net cash provided by operating activities 83,090 28,404 Investing activities Purchase of property and equipment, net (7,988) (5,949) Cash received from sale of discontinued operations 12,150 - Acquisition of subsidiaries and contingent payments (408) (144,750) Change in other assets 105 (666) ------------ ------------ Net cash used in investing activities 3,859 (151,365) Financing activities Issuance of common stock and exercise of options 14,411 6,641 Proceeds from stock offering 99,223 - Borrowings under long-term debt arrangements - 119,000 Repayments on long-term debt (76,954) (8,250) Changes in long-term liabilities (117) (3,668) ------------ ------------ Net cash provided by financing activities 36,563 113,723 ------------ ------------ Net decrease in cash and cash equivalents 123,512 (9,238) Cash and cash equivalents at beginning of period 9,906 12,856 ------------ ------------ Cash and cash equivalents at end of period $ 133,418 $ 3,618 =========== =========== MORE FTI CONSULTING, INC. ADD 8 FTI CONSULTING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2003 AND DECEMBER 31, 2002 (in thousands of dollars, except share data)
September 30, December 31, 2003 2002 ------------------ ----------------- (unaudited) (audited) Assets Current assets: Cash and cash equivalents $ 133,418 $ 9,906 Accounts receivable, less allowances 36,919 29,271 Unbilled receivable, less allowances 21,159 35,576 Other current assets 6,105 5,529 Current assets of discontinued operations - 11,084 ------------------ ----------------- Total current assets 197,601 91,366 ------------------ ----------------- Property and equipment, net 18,188 14,938 Goodwill, net 298,315 299,241 Other intangible assets, net 1,742 4,067 Notes receivable 8,000 - Other assets 4,691 5,999 Non-current assets of discontinued operations - 14,920 ------------------ ----------------- Total Assets $ 528,537 $ 430,531 ================== ================= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and other accrued expenses $ 34,960 $ 36,810 Deferred income taxes 193 193 Current portion of long-term debt 9,504 20,000 Billings in excess of services provided 18,361 19,921 Current liabilities of discontinued operations - 664 ------------------ ----------------- Total current liabilities 63,018 77,588 ------------------ ----------------- Long-term debt, less current portion 11,375 77,833 Deferred income taxes and other liabilities 13,300 7,135 Stockholders' equity Preferred stock, $0.01 par value; 5,000,000 shares authorized, none outstanding - - Common stock, $0.01 par value; 75,000,000 shares authorized; 41,820,663 and 36,006,438 shares issued and outstanding in 2003 and 2002, respectively 418 360 Additional paid-in capital 325,684 200,456 Unearned compensation (79) (346) Retained earnings 115,003 68,198 Accumulated other comprehensive income (loss) (182) (693) ------------------ ----------------- Total stockholders' equity 440,844 267,975 ------------------ ----------------- Total Liabilities and Stockholders' Equity $ 528,537 $ 430,531 ================== =================