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FTI Consulting Reports Record Second Quarter 2024 Financial Results
المصدر: Nasdaq GlobeNewswire / 25 يوليو 2024 06:30:14 America/Chicago
- Second Quarter 2024 Revenues of $949.2 Million, Up 10% Compared to $864.6 Million in Prior Year Quarter
- Second Quarter 2024 EPS of $2.34, Up 34% Compared to $1.75 in Prior Year Quarter
- Company Raises Full Year 2024 Revenue and EPS Guidance Ranges to Reflect Record First Half of 2024
WASHINGTON, July 25, 2024 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the second quarter ended June 30, 2024.
Second quarter 2024 revenues of $949.2 million increased $84.6 million, or 9.8%, compared to revenues of $864.6 million in the prior year quarter. The increase in revenues was primarily due to higher demand in the Corporate Finance & Restructuring, Economic Consulting and Technology segments. Net income of $83.9 million compared to $62.4 million in the prior year quarter. The increase in net income was primarily due to higher revenues, a lower effective tax rate and a foreign currency remeasurement gain compared to a loss in the prior year quarter, which was partially offset by an increase in compensation and selling, general and administrative (“SG&A”) expenses compared to the prior year quarter. Adjusted EBITDA of $115.9 million, or 12.2% of revenues, compared to $100.2 million, or 11.6% of revenues, in the prior year quarter. Second quarter 2024 earnings per diluted share (“EPS”) of $2.34 compared to $1.75 in the prior year quarter.
Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, "Our terrific results this quarter and in the first quarter together delivered an exceptional first half of the year. To us, these results, in the face of complicated economic times, show the power of our multiyear commitment to continue to attract and support talented professionals who are committed to making a difference for our clients."
Cash Position and Capital Allocation
Net cash provided by operating activities of $135.2 million for the quarter ended June 30, 2024 compared to net cash used in operating activities of $11.0 million for the quarter ended June 30, 2023. The year-over-year increase in net cash provided by operating activities was primarily due to an increase in cash collections resulting from higher revenues, which was partially offset by higher operating expenses and an increase in compensation payments primarily related to higher variable compensation, annual salary increases and headcount growth compared to the prior year quarter.
Cash and cash equivalents of $226.4 million at June 30, 2024 compared to $203.5 million at June 30, 2023 and $244.0 million at March 31, 2024. Total debt, net of cash, of ($166.4) million at June 30, 2024 compared to $137.2 million at June 30, 2023 and ($39.0) million at March 31, 2024.
There were no share repurchases during the quarter ended June 30, 2024. As of June 30, 2024, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program.
Second Quarter 2024 Segment Results
Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $30.1 million, or 9.5%, to $348.0 million in the quarter compared to $317.9 million in the prior year quarter. The increase in revenues was primarily due to higher demand and realized bill rates for business transformation & strategy and transactions services, which was partially offset by lower restructuring revenues. Adjusted Segment EBITDA of $66.5 million, or 19.1% of segment revenues, compared to $45.5 million, or 14.3% 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 variable compensation compared to the prior year quarter.Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $4.7 million, or 2.9%, to $169.5 million in the quarter compared to $164.8 million in the prior year quarter. Acquisition-related revenues contributed $1.9 million in the quarter. The increase in revenues was primarily due to higher demand for disputes services and higher realized bill rates for construction solutions services, which was partially offset by lower demand for investigations services. Adjusted Segment EBITDA of $15.0 million, or 8.8% of segment revenues, compared to $25.6 million, or 15.5% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to an increase in compensation and SG&A expenses, which more than offset the increase in revenues compared to the prior year quarter.Economic Consulting
Revenues in the Economic Consulting segment increased $29.1 million, or 14.4%, to $230.9 million in the quarter compared to $201.8 million in the prior year quarter. The increase in revenues was primarily due to higher demand and realized bill rates for merger and acquisition (“M&A”)-related antitrust and financial economics services, which was partially offset by lower demand and realized bill rates for non-M&A-related antitrust services. Adjusted Segment EBITDA of $44.3 million, or 19.2% of segment revenues, compared to $35.5 million, or 17.6% 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, which includes the impact of a 3.6% increase in billable headcount and higher variable compensation, as well as higher SG&A expenses compared to the prior year quarter.Technology
Revenues in the Technology segment increased $18.4 million, or 18.9%, to $115.9 million in the quarter compared to $97.4 million in the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related “second request” services, which was partially offset by lower demand for investigations services. Adjusted Segment EBITDA of $20.9 million, or 18.1% of segment revenues, compared to $20.1 million, or 20.6% 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 an increase in compensation, which includes higher as-needed consultant costs and the impact of a 12.4% increase in billable headcount, as well as higher SG&A expenses compared to the prior year quarter.Strategic Communications
Revenues in the Strategic Communications segment increased $2.3 million, or 2.8%, to $84.9 million in the quarter compared to $82.7 million in the prior year quarter. The increase in revenues was primarily driven by a $1.7 million increase in pass-through revenues. Excluding pass-through revenues, revenues increased $0.6 million, or 0.7%, primarily driven by an increase in public affairs revenues, which was partially offset by lower corporate reputation revenues. Adjusted Segment EBITDA of $11.6 million, or 13.7% of segment revenues, compared to $12.3 million, or 14.8% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to an increase in SG&A expenses, which more than offset the increase in revenues compared to the prior year quarter.2024 Guidance
After a record first half of 2024, the Company is raising its full year 2024 guidance ranges for revenues and EPS. The Company now estimates that revenues for full year 2024 will range between $3.700 billion and $3.790 billion, which compares to the prior range of between $3.650 billion and $3.790 billion. The Company now estimates EPS for full year 2024 will range between $8.10 and $8.60, which compares to the prior range of between $7.75 and $8.50. The Company does not currently expect Adjusted EPS to differ from EPS.Second Quarter 2024 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2024 financial results at 9:00 a.m. Eastern Time on Thursday, July 25, 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 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 8,000 employees located in 33 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalized and independently managed. The Company generated $3.49 billion in revenues during fiscal year 2023. More information can be found at www.fticonsulting.com.Non-GAAP Financial Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Certain of these financial measures are considered not in conformity with GAAP ("non-GAAP financial measures") under the United States Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial measures:- Total Segment Operating Income
- Adjusted EBITDA
- Total Adjusted Segment EBITDA
- Adjusted EBITDA Margin
- Adjusted Net Income
- Adjusted Earnings per Diluted Share
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.
FTI Consulting, Inc.
555 12th Street NW Washington, DC 20004
+1.202.312.9100Investor & Media Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.comFINANCIAL TABLES FOLLOW
FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)June 30, December 31, 2024 2023 (Unaudited) Assets Current assets Cash and cash equivalents $ 226,428 $ 303,222 Accounts receivable, net 1,190,521 1,102,142 Current portion of notes receivable 45,145 30,997 Prepaid expenses and other current assets 107,117 119,092 Total current assets 1,569,211 1,555,453 Property and equipment, net 152,307 159,662 Operating lease assets 202,511 208,910 Goodwill 1,230,932 1,234,569 Intangible assets, net 18,377 18,285 Notes receivable, net 106,201 75,431 Other assets 78,105 73,568 Total assets $ 3,357,644 $ 3,325,878 Liabilities and Stockholders’ Equity Current liabilities Accounts payable, accrued expenses and other $ 182,667 $ 223,758 Accrued compensation 463,669 601,074 Billings in excess of services provided 67,558 67,937 Total current liabilities 713,894 892,769 Long-term debt 60,000 — Noncurrent operating lease liabilities 214,517 223,774 Deferred income taxes 136,374 140,976 Other liabilities 83,479 86,939 Total liabilities 1,208,264 1,344,458 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 — 35,902 (2024) and 35,521 (2023)359 355 Additional paid-in capital 33,955 16,760 Retained earnings 2,278,677 2,114,765 Accumulated other comprehensive loss (163,611 ) (150,460 ) Total stockholders’ equity 2,149,380 1,981,420 Total liabilities and stockholders’ equity $ 3,357,644 $ 3,325,878 FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)Three Months Ended
June 30,2024 2023 (Unaudited) Revenues $ 949,156 $ 864,591 Operating expenses Direct cost of revenues 637,749 588,094 Selling, general and administrative expenses 206,235 186,371 Amortization of intangible assets 1,080 1,417 845,064 775,882 Operating income 104,092 88,709 Other income (expense) Interest income and other 1,909 (584 ) Interest expense (3,319 ) (3,022 ) (1,410 ) (3,606 ) Income before income tax provision 102,682 85,103 Income tax provision 18,735 22,708 Net income $ 83,947 $ 62,395 Earnings per common share ― basic $ 2.38 $ 1.87 Weighted average common shares outstanding ― basic 35,221 33,359 Earnings per common share ― diluted $ 2.34 $ 1.75 Weighted average common shares outstanding ― diluted 35,845 35,650 Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of tax expense of $— $ (1,718 ) $ 6,396 Total other comprehensive income (loss), net of tax (1,718 ) 6,396 Comprehensive income $ 82,229 $ 68,791 FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)Six Months Ended
June 30,2024 2023 (Unaudited) Revenues $ 1,877,709 $ 1,671,297 Operating expenses Direct cost of revenues 1,263,783 1,141,603 Selling, general and administrative expenses 408,105 370,584 Amortization of intangible assets 2,096 3,599 1,673,984 1,515,786 Operating income 203,725 155,511 Other income (expense) Interest income and other 3,490 (1,926 ) Interest expense (5,038 ) (5,961 ) (1,548 ) (7,887 ) Income before income tax provision 202,177 147,624 Income tax provision 38,265 37,682 Net income $ 163,912 $ 109,942 Earnings per common share ― basic $ 4.67 $ 3.30 Weighted average common shares outstanding ― basic 35,099 33,331 Earnings per common share ― diluted $ 4.58 $ 3.09 Weighted average common shares outstanding ― diluted 35,816 35,566 Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of tax expense of $— $ (13,151 ) $ 16,246 Total other comprehensive income (loss), net of tax (13,151 ) 16,246 Comprehensive income $ 150,761 $ 126,188 FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)Three Months Ended June 30, 2024
(Unaudited)Corporate
Finance &
RestructuringForensic and
Litigation ConsultingEconomic Consulting Technology Strategic Communications Unallocated
CorporateTotal Net income $ 83,947 Interest income and other (1,909 ) Interest expense 3,319 Income tax provision 18,735 Operating income $ 63,193 $ 13,100 $ 42,952 $ 17,137 $ 10,594 $ (42,884 ) $ 104,092 Depreciation and amortization 2,560 1,627 1,344 3,793 918 507 10,749 Amortization of intangible assets 714 267 — — 99 — 1,080 Adjusted EBITDA $ 66,467 $ 14,994 $ 44,296 $ 20,930 $ 11,611 $ (42,377 ) $ 115,921 Six Months Ended June 30, 2024
(Unaudited)Corporate
Finance &
RestructuringForensic and
Litigation ConsultingEconomic Consulting Technology Strategic Communications Unallocated
CorporateTotal Net income $ 163,912 Interest income and other (3,490 ) Interest expense 5,038 Income tax provision 38,265 Operating income $ 135,112 $ 45,067 $ 55,817 $ 28,076 $ 22,068 $ (82,415 ) $ 203,725 Depreciation and amortization 5,033 3,256 2,629 7,435 1,800 1,020 21,173 Amortization of intangible assets 1,547 380 — — 169 — 2,096 Adjusted EBITDA $ 141,692 $ 48,703 $ 58,446 $ 35,511 $ 24,037 $ (81,395 ) $ 226,994 FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)Three Months Ended June 30, 2023
(Unaudited)Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $ 62,395 Interest income and other 584 Interest expense 3,022 Income tax provision 22,708 Operating income $ 42,116 $ 23,885 $ 34,024 $ 16,432 $ 11,278 $ (39,026 ) $ 88,709 Depreciation and amortization 2,284 1,490 1,499 3,655 901 275 10,104 Amortization of intangible assets 1,110 223 — — 84 — 1,417 Adjusted EBITDA $ 45,510 $ 25,598 $ 35,523 $ 20,087 $ 12,263 $ (38,751 ) $ 100,230 Six Months Ended June 30, 2023
(Unaudited)Corporate Finance & Restructuring (1) Forensic and Litigation Consulting (1) Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $ 109,942 Interest income and other 1,926 Interest expense 5,961 Income tax provision 37,682 Operating income $ 90,092 $ 44,173 $ 46,724 $ 28,322 $ 19,961 $ (73,761 ) $ 155,511 Depreciation and amortization 4,243 2,802 2,992 7,131 1,688 691 19,547 Amortization of intangible assets 3,022 407 — — 170 — 3,599 Adjusted EBITDA $ 97,357 $ 47,382 $ 49,716 $ 35,453 $ 21,819 $ (73,070 ) $ 178,657 (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 & strategy practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
Segment
RevenuesAdjusted
EBITDAAdjusted EBITDA
MarginUtilization Average
Billable
RateRevenue-
Generating
Headcount(in thousands) (at period end) Three Months Ended June 30, 2024 (Unaudited) Corporate Finance & Restructuring $ 347,971 $ 66,467 19.1 % 60 % $ 496 2,167 Forensic and Litigation Consulting 169,496 14,994 8.8 % 58 % $ 390 1,457 Economic Consulting 230,873 44,296 19.2 % 70 % $ 599 1,076 Technology (1) 115,875 20,930 18.1 % N/M N/M 662 Strategic Communications (1) 84,941 11,611 13.7 % N/M N/M 972 $ 949,156 $ 158,298 16.7 % 6,334 Unallocated Corporate (42,377 ) Adjusted EBITDA $ 115,921 12.2 % Six Months Ended June 30, 2024
(Unaudited)Corporate Finance & Restructuring $ 713,981 $ 141,692 19.8 % 61 % $ 505 2,167 Forensic and Litigation Consulting 345,570 48,703 14.1 % 58 % $ 398 1,457 Economic Consulting 435,421 58,446 13.4 % 69 % $ 566 1,076 Technology (1) 216,588 35,511 16.4 % N/M N/M 662 Strategic Communications (1) 166,149 24,037 14.5 % N/M N/M 972 $ 1,877,709 $ 308,389 16.4 % 6,334 Unallocated Corporate (81,395 ) Adjusted EBITDA $ 226,994 12.1 % Three Months Ended June 30, 2023 (Unaudited) Corporate Finance & Restructuring (2) $ 317,912 $ 45,510 14.3 % 58 % $ 482 2,170 Forensic and Litigation Consulting (2) 164,760 25,598 15.5 % 58 % $ 388 1,441 Economic Consulting 201,822 35,523 17.6 % 69 % $ 557 1,039 Technology (1) 97,444 20,087 20.6 % N/M N/M 589 Strategic Communications (1) 82,653 12,263 14.8 % N/M N/M 992 $ 864,591 $ 138,981 16.1 % 6,231 Unallocated Corporate (38,751 ) Adjusted EBITDA $ 100,230 11.6 % Six Months Ended June 30, 2023
(Unaudited)Corporate Finance & Restructuring (2) $ 633,564 $ 97,357 15.4 % 59 % $ 480 2,170 Forensic and Litigation Consulting (2) 322,499 47,382 14.7 % 58 % $ 382 1,441 Economic Consulting 371,417 49,716 13.4 % 68 % $ 520 1,039 Technology (1) 188,062 35,453 18.9 % N/M N/M 589 Strategic Communications (1) 155,755 21,819 14.0 % N/M N/M 992 $ 1,671,297 $ 251,727 15.1 % 6,231 Unallocated Corporate (73,070 ) Adjusted EBITDA $ 178,657 10.7 % 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 a portion of the Company’s health solutions practice in the Forensic and Litigation Consulting segment to the Company’s business transformation & strategy practice within the Corporate Finance & Restructuring segment. FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)Six Months Ended
June 30,2024 2023 (Unaudited) Operating activities Net income $ 163,912 $ 109,942 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 21,173 19,547 Amortization of intangible assets 2,096 3,599 Provision for expected credit losses 19,923 11,188 Share-based compensation 18,101 13,903 Deferred income taxes (6,840 ) (6,571 ) Acquisition-related contingent consideration (1,157 ) 3,543 Amortization of debt issuance costs and other 387 1,296 Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable, billed and unbilled (115,106 ) (245,999 ) Notes receivable (45,197 ) (22,539 ) Prepaid expenses and other assets (12,630 ) (6,718 ) Accounts payable, accrued expenses and other (8,934 ) (159 ) Income taxes (29,727 ) (13,122 ) Accrued compensation (145,509 ) (130,625 ) Billings in excess of services provided (84 ) (2,485 ) Net cash used in operating activities (139,592 ) (265,200 ) Investing activities Purchases of property and equipment and other (14,700 ) (29,027 ) Maturity of short-term investment 25,246 — Net cash provided by (used in) investing activities 10,546 (29,027 ) Financing activities Borrowings under revolving line of credit 520,000 245,000 Repayments under revolving line of credit (460,000 ) (220,000 ) Purchase and retirement of common stock — (20,982 ) Share-based compensation tax withholdings (14,320 ) (11,922 ) Proceeds on stock option exercises 10,614 1,167 Deposits and other 2,023 (2,206 ) Net cash provided by (used in) financing activities 58,317 (8,943 ) Effect of exchange rate changes on cash and cash equivalents (6,065 ) 15,021 Net decrease in cash and cash equivalents (76,794 ) (288,149 ) Cash and cash equivalents, beginning of period 303,222 491,688 Cash and cash equivalents, end of period $ 226,428 $ 203,539