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| 8-K - FORM 8-K - FTI CONSULTING, INC | d408618d8k.htm |
 Investor Presentation
September 2012
FTI Consulting
Exhibit 99.1 |
 Cautionary Note About Forward-Looking Statements
-
2
-
This
presentation
includes
"forward-looking
statements”
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933,
as
amended,
and
Section
21E
of
the
Securities
Exchange
Act
of
1934,
as
amended,
which
involve
uncertainties and risks. Forward-looking statements include statements
concerning our plans, objectives, goals, strategies, future events, future
revenues, future results and performance, expectations, plans or intentions relating
to acquisitions and other matters, business trends and other information that is
not historical, including statements regarding estimates of our future
financial results. When used in this presentation, words such as “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 from
our expectations, beliefs and estimates. The Company has experienced
fluctuating revenues, operating income and cash flow in prior periods and
expects that this will occur from time to time in the future. Other factors that
could cause such differences include declines in demand for, or changes in,
the mix of services and products that we offer, the mix of the geographic
locations where our clients are located or where services are performed, adverse
financial, real estate or other market and general economic conditions,
which could impact each of our segments differently, the pace and timing of
the consummation and integration of past and future acquisitions, the Company's ability to realize cost savings
and efficiencies, competitive and general economic conditions, retention of staff
and clients and other risks described under
the
heading
“Item
1A.
Risk
Factors”
in
the
Company’s
most
recent
Form
10-K
and
in
the
Company's
other
filings
with
the
Securities
and
Exchange
Commission,
including
the
risks
set
forth
under
“Risks
Related
to
Our
Business
Segments”
and
“Risks
Related
to
Our
Operations”.
We
are
under
no
duty
to
update
any
of
the
forward-
looking statements to conform such statements to actual results or events and do
not intend to do so. |
 FTI
Consulting Overview -
3
-
Balanced set of services to meet its client’s needs at all points throughout
the economic cycle
Expertise and scale advantage
Largest provider of consulting services in bankruptcies, disputes, investigations,
crises and issues involving compliance and political risk
Geographic footprint is a competitive advantage in serving clients, giving FTI
Consulting access to key markets around the globe as capital migrates
Capital deployment focused on value-enhancing initiatives
Healthy balance sheet and consistent cash flows
FTI Consulting is a global business advisory firm dedicated to helping
organizations protect and enhance their enterprise value in an increasingly
complex legal, regulatory and economic environment
|
 Today FTI Consulting is an advisor to 93 of the world’s top 100 law firms, 64
of the world’s 100 largest companies and 9 of the world’s top 10
bank holding companies Critical Thinking At The Critical Time™
-
4
-
Corporate
Finance/Restructuring
is
the
world
leader
in
restructuring
and
crisis
management
#1 Crisis Management Firm in The Deal Pipeline’s League Tables of Crisis
Management Firms Economic
Consulting
is
unmatched
in
reputation
and
expertise
Named Global Competition Review’s Leading Antitrust Economics Firm
Named Global Competition Review’s 20 Best Economics Firms in the World
Forensic
and
Litigation
Consulting
is
a
pioneer
of
visual
support
in
the
courtroom
and the global leader in commercial arbitration
#1 on Who’s Who Legal List of Most Highly Regarded Firms for Commercial
Arbitration Technology
is the industry leader in E-discovery software
Member of the "Leaders" Quadrant in Gartner's "Magic Quadrant for
E-Discovery Software" Report Ringtail®
8.2
E-discovery
Software
Named
to
KMWorld
magazine's
Trend-Setting
Products
List
Strategic
Communications
is
the
global
leader
in
strategic
business
communications
#1 Communications Advisor in mergermarket League Tables of PR Advisers to Global
M&A by Volume
#1 Communications Advisor in mergermarket League Tables of PR Advisors to M&A by
Volume in Asia- Pacific, Europe and the United Kingdom
|
 -
5
-
FTI Consulting has a balanced portfolio of pro-cyclical and
counter-cyclical global businesses that offer event-driven services
and solutions Global Business with Diverse Event-Driven Offering
United States
Rest of World
2Q12 Segment Revenues
2Q12 Geographic Revenues
Corporate Finance/Restructuring
Economic Consulting
Forensic and Litigation Consulting
Technology
Strategic Communications
28%
23%
12%
25%
12%
26%
74%
Corporate Finance/Restructuring
Bankruptcy support services
Private equity
Performance improvement
Economic Consulting
Antitrust & competition economics
Securities litigation & risk management
Intellectual property
International arbitration
Labor & employment
Public policy
Regulated industries
Business valuation
Forensic and Litigation Consulting
Forensic accounting & advisory services
Global risk & investigations practice
Compliance, monitoring & receivership
Intellectual property
Dispute advisory services
Trial services
Financial & enterprise data analytics
Technology
Computer forensics & investigations
Discovery consulting
E-discovery software & services
Strategic Communications
Financial communications
Corporate communications
Strategy consulting & research
Crisis communications
Public affairs
Creative engagement
Restructuring/turnaround services
Transaction advisory services
Interim management
Investment banking |
 Today’s macroeconomic and consulting industry backdrop has created unique
opportunities and competitive advantages for FTI Consulting
Current Macroeconomic & Industry Opportunities
-
6
-
Macroeconomic Backdrop Opportunities
FTI Consulting has outperformed peers in a strong economy as well as in a
down economy
Regulation and investigations are becoming increasingly more complex and global;
this will drive FTI Consulting’s business as these larger scale
engagements will require global consultants with deep litigation and
investigation knowledge Industry Backdrop Opportunities
Industry consolidation is very healthy for the market and FTI Consulting
Industry
consolidation
has
allowed
FTI
Consulting
to
move
from
a
middle
sized
firm
to a
global player
Expect industry consolidation to continue for both structural and strategic
reasons Consolidation will rationalize competition and standardize how people
think about FTI Consulting’s products
LIBOR probe
FCPA investigations
Whistleblowing cases
Probes of trading losses |
 The
“One Brand” initiative has enhanced FTI Consulting’s ability
to bring our consulting services to the market in a more powerful and
consistent manner The Globalization of FTI Consulting
-
7
-
The increasingly aggressive regulatory and enforcement environment will bode very
well for large consulting firms with global reach and reputations like FTI
Consulting Every
geographic
region
is
focused
on
expanding
its
presence
and
offering:
Key geographies: Asia-Pacific, Europe, Middle East & Africa and Latin
America 1H12 Revenues
Asia Pacific
EMEA
Latin America
1%
1H12 Y/Y Revenue Growth
50%
8%
74%
26%
United States
Rest of World
1H12 Revenue Growth
0%
5%
15%
20%
25%
30%
35%
40%
45%
50%
10% |
 FTI
Consulting Industry Initiatives FTI Consulting’s industry practices
expand the scope of our services to better fit the
unique
demands
of
each
industry,
leveraging
our
resources
-
people
and
capabilities -
and ultimately improving segment profitability
Industry groups identify key industry trends that will drive demand for FTI
Consulting’s services, ensuring FTI Consulting’s capabilities are
organized to take advantage of key industry trends FTI Consulting’s
industry strategy enables the Company to pursue additional non- event
driven consulting services that will enhance overall revenues and lessen the
cyclicality of FTI Consulting’s portfolio of products
FTI Consulting is focused on enhancing our capabilities in attractive industries
including Healthcare, Banking & Financial Services, Insurance and
Energy & Utilities
Aligning our business by industry enables FTI Consulting to maximize resources
across segments, as well as go-to-market more effectively and gain
share -
8
-
Aerospace & Defense
Agriculture
Automotive
Banking & Financial Services
Construction
Energy & Utilities
Environmental
Government & Public Contracts
Healthcare
Hospitality
Information Technology
Insurance
Media & Entertainment
Mining
Petroleum & Chemicals
Pharmaceuticals & Life Sciences
Real Estate
Retail
Telecommunications
Transportation
FTI Consulting Industry Expertise |
 As
the challenges and opportunities our clients face are becoming increasingly complex,
FTI
Consulting’s
ability
to
provide
seamless
strategic
services
across
multiple
geographies,
industries and professional disciplines drive demand for our services
The FTI Consulting Matrix
-
9
-
FTI Consulting’s matrix organizational structure appropriately emphasizes the
segment, geography and industry drivers of our businesses, allowing for
improved understanding and response to our client’s needs and increased
leverage of resources, knowledge and solutions in our rapidly growing
markets Three strategies that drive our
business:
Segment:
Continue
to
build
out
diverse platform of services and
solutions
Geography:
Replicate
North
American business model across
existing global platform
Industry:
Develop
integrated
industry focused solutions
Segment
Industry
Geography |
 Demand for FTI Consulting’s services and expertise is driven by the aggressive
regulatory and enforcement environment
Current Demand Drivers
-
10
-
Continued
demand
for
bankruptcy
and
restructuring
engagements
in
the
U.S.
and
Latin America drives growth in Corporate
Finance/Restructuring in 2012 with an expected demand uptick in
Europe in 2013 Economic
Consulting
driven
by
continued
strong
demand
for
antitrust,
M&A-
related activity and financial economics engagements
The recent increase in whistleblowing complaints and stable demand for FCPA and
financial investigations drives demand in Forensic
and Litigation Consulting Larger and more complex E-discovery
engagements are trending towards providers with scale, robust software and
global consultants with deep investigative and
litigative
knowledge,
driving
demand
for
our
Technology
business
Strategic
Communications
remains
well-positioned
to
take
advantage
of
macroeconomic conditions as they improve |
 Case Study: M&A Lifecycle and FTI Consulting’s
Integrated Service Offering
-
11
-
Employee Outreach and Engagement
M&A Digital/Social Media Strategies
Media Relations
Investor Relations
First
Look
Services
Antitrust
&
Competition
Economics
Merger Integration Services
Post-Acquisition Disputes
Purchase Price Dispute Services
Post-Merger Communication Implementation
Change Management Communications
Corporate Finance/Restructuring
Forensic Litigation and Consulting
Economic Consulting
Technology
Strategic Communications
Valuation Services
Buyer Services
Seller Services
Lender Services
M&A Fraud Services
Intellectual Property Valuation &
Protection
Transactional Due Diligence
System Audits/IT Due Diligence
E-discovery
Tax Services
Second Requests
M&A Communications
Proxy Communications
Pre-Deal
Preparation
and
Evaluation
Due
Diligence
M&A
Lifecycle
Post-Close
Execution
Pre-Close
Planning
Post-Close
Planning |
 FTI Consulting’s unique integrated approach to protect and enhance enterprise
value requires exceptional talent
Our People
-
12
-
FTI Consulting is a global company with global leaders
and advisors
3,800 employees in 92 offices and 24 countries around the world
Our collective expertise spans countless sectors,
scenarios and functions and fuels our ability to anticipate
even the most complex challenges, sensitivities and
outcomes
5 diverse and global business segments serving 20 industries
We hire the best and continue to invest in their on-going
development
The FTI Consulting Matrix defines established leadership in North
America, EMEA, Asia Pacific and Latin America
Diverse Board of Directors offering global insights, extensive
industry experience and tenured leadership
364 Senior Managing Directors, 471 Managing Directors
and access to three Nobel Laureates
FTI employees are supported throughout their career development
through our educational and thought leadership initiatives: New
Hire Orientation, New Director School, FTI University and
Leadership Forums
Employees
Source &
Acquire
Attract &
Retain
Service &
Support
Grow &
Develop
Measure &
Assess
Reward &
Engage |
 Portfolio investments, coupled with continued cash generation and operational
discipline, demonstrated in financial results
FTI Consulting’s Financial Position Is Strong
-
13
-
Track record of industry-leading growth in revenue and profitability
Significant cash flow generation
Consistent
and
strong
cash
flow
from
operations
-
$173.8
million
in
2011
and
$195.1
million in 2010
$166.0
million
in
cash
and
cash
equivalents
on
the
balance
sheet
as
of
June
30,
2012
Leverage
as
of
June
30,
2012
-
approximately
3:1
Balanced capital deployment aimed at productive and value enhancing initiatives
for shareholders
Acquisition strategy focused on building attractive, sustainable
businesses Investing in brand and visibility to reinforce and enhance FTI
Consulting's leadership $250 million share buyback program authorized in June
2012 |
 FTI
Consulting Summary -
14
-
Balanced set of services to meet its client’s needs at all points throughout
the economic cycle
Expertise and scale advantage
Largest provider of consulting services in bankruptcies, disputes, investigations,
crises and issues involving compliance and political risk
Geographic footprint is a competitive advantage in serving clients, giving
Capital deployment focused on value-enhancing initiatives
Healthy balance sheet and consistent cash flows
FTI Consulting is a global business advisory firm dedicated to helping
organizations protect and enhance their enterprise value in an increasingly
complex legal, regulatory and economic environment
FTI Consulting access to key markets around the globe as capital migrates
|
 Six
Months Ended June 30, 2012 -
15
-
($ in thousands, except per share data)
(1) We define adjusted earnings per diluted share as earnings
per diluted share, excluding the net impact of special charges
and loss on early extinguishment of debt that were incurred in
that period.
Revenues
Operating expenses
Direct cost of revenues
Selling, general & administrative expense
Special charges
Operating income
Other income (expense)
Interest expense
Income before income tax provision
Income tax provision
Net income
Earnings
per
common
share
-
diluted
Adjusted
earnings
per
common
share
-
diluted
(1)
Interest income & other
Acquisition-related
contingent
consideration
Amortization of other intangible assets
Weighted
average
common
shares
outstanding
-
diluted
$67,779
$77,821
Six Months Ended June 30,
2012
2011
$791,471
$762,253
$195,049
$182,745
$26,782
$15,212
($2,984)
$1,595
Unaudited
$2,919
$4,923
($30,399)
($29,810)
$40,299
$52,934
$14,121
$18,351
$26,178
$34,583
$0.61
$0.78
42,672
44,420
$1.02
$0.99
$723,692
$684,432
$11,007
$10,952
$493,838
$473,928 |
 1H12 Results: Segment Performance
-
16
-
($ in thousands, except headcount data)
$791,471
$225,814
$55,974
$177,138
$29,705
$199,507
$36,915
$97,357
$26,064
$91,655
$9,499
Six Months Ended June 30, 2012
Corporate Finance/Restructuring
Forensic & Litigation Consulting
Economic Consulting
Technology
Adjusted EBITDA
(1)
Strategic Communications
Corporate
2,903
24.8%
718
16.8%
808
18.5%
467
26.8%
311
10.4%
599
20.0%
15.2%
$120,576
$158,157
($37,581)
Revenues
Adjusted EBITDA
(1)
Margin
Headcount
$762,253
$209,150
$31,677
$176,281
$33,924
$168,739
$31,985
$108,165
$38,743
$99,918
$11,839
Six Months Ended June 30, 2011
Corporate Finance/Restructuring
Forensic & Litigation Consulting
Economic Consulting
Technology
Adjusted EBITDA
(1)
Strategic Communications
Revenue-
Generating
Corporate
2,825
15.1%
730
19.2%
863
19.0%
409
261
11.8%
562
19.4%
15.5%
$118,074
$148,168
($30,094)
Revenues
Adjusted EBITDA
(1)
Margin
Headcount
(1) We define Adjusted EBITDA as net income
before income tax provision, other income
(expense), depreciation, amortization of intangible
assets and special charges. Amounts presented in
the Adjusted EBITDA column for each segment
reflect the segments' respective Adjusted
Segment EBITDA. We define Adjusted Segment
EBITDA as the segments' share of consolidated
operating income before depreciation,
amortization of intangible assets and special
charges. Although Adjusted EBITDA and Adjusted
Segment EBITDA are not measures of financial
condition or performance determined in
accordance with generally accepted accounting
principles ("GAAP"), we believe that these
measures can be a useful operating performance
measure for evaluating our results of operations
as compared from period to period and as
compared to our competitors. We use Adjusted
EBITDA and Adjusted Segment EBITDA to
evaluate and compare the operating performance
of our segments.
Revenue-
Generating
35.8% |
 Appendix |
 Reconciliation of
non-GAAP Financial Measures -
18 -
($ in thousands, except per share data)
$43,498
$43,868
Add back: Special charges, net of tax effect
(1)
$1.02
$0.99
Weighted
average
common
shares
outstanding
-
diluted
$26,178
$34,583
$0.41
$0.21
Adjusted earnings per common share
(2)
Net income
Add back: Special charges, net of tax effect
(1)
Adjusted Net income
Earnings per common share -
diluted
42,672
44,420
$0.61
$0.78
$17,320
$9,285
2012
2011
Six Months Ended June 30,
(1) The tax effect takes into account the tax treatment and related tax rate(s) that apply to each
adjustment in the applicable tax jurisdiction(s). The tax expense for the six months ended June 30, 2012 was $9,462 or $0.22 per share.
The tax expense for the six months ended June 30, 2011 was $5,927 or $0.13 per share.
(2) We define Adjusted Net Income and Adjusted EPS as net income and earnings per diluted share,
respectively, excluding the net impact of any special charges and any loss on early extinguishment of debt that were incurred in
that period.
|
 Reconciliation of Operating Income and Net Income
to Adjusted EBITDA
-
19
-
($ in thousands)
Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner by
all companies and may not be comparable to other similarly titled measures of other companies. These non-GAAP 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 (Loss).
Corporate
Finance /
Restructuring
Forensic and
Litigation
Consulting
Economic
Consulting
Technology
Strategic
Communications
Corp HQ
Total
Six Months Ended June 30, 2012
Net income
26,178
$
Interest income and other
(2,919)
Interest expense
30,399
Income tax provision
14,121
Operating income
40,230
$
19,532
$
33,871
$
12,958
$
1,287
$
(40,099)
$
67,779
Depreciation and amortization
1,723
1,923
1,429
6,164
1,369
2,400
15,008
Amortization of other intangible assets
2,905
997
797
3,976
2,332
-
11,007
Special charges
11,116
7,253
818
2,966
4,511
118
26,782
Adjusted EBITDA
(1)
55,974
29,705
36,915
26,064
9,499
(37,581)
120,576
Six Months Ended June 30, 2011
Net income
34,583
$
Interest income and other
(4,923)
Interest expense
29,810
Income tax provision
18,351
Operating income
17,629
$
30,186
$
28,096
$
29,364
$
7,955
$
(35,409)
$
77,821
Depreciation and amortization
1,770
1,712
1,203
5,425
1,504
2,475
14,089
Amortization of other intangible assets
2,838
1,187
593
3,954
2,380
-
10,952
Special charges
9,440
839
2,093
-
-
2,840
15,212
Adjusted EBITDA
(1)
31,677
33,924
31,985
38,743
11,839
(30,094)
118,074
(1) We define Adjusted EBITDA as net income before income tax provision, other income (expense),
depreciation, amortization of intangible assets and special charges. Amounts presented in the Adjusted EBITDA column for each segment reflect
the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as the
segments' share of consolidated operating income before depreciation, amortization of intangible assets and special charges. Although Adjusted
EBITDA and Adjusted Segment EBITDA are not measures of financial condition or performance determined in
accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating
performance measure for evaluating our results of operations as compared from period to period and as
compared to our competitors. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of
our segments.
|