FTI Consulting, Inc (FCN) reported GAAP net income of $17.2 million or 42 cents per share in second-quarter 2014 versus a net income of $23.5 million or 58 cents per share in the year-ago quarter. Earnings for the quarter included a special charge of $9.4 million related to the closure of the company's West Palm Beach office and termination of the corporate plane lease.
Excluding non-recurring items, adjusted net income was $22.6 million or 55 cents per share in the second quarter of 2014 versus $15.3 million or 38 cents a share in the prior-year quarter. Adjusted earnings in the reported quarter comfortably beat the Zacks Consensus Estimate of 51 cents. However, shares remained flat at $36.96 yesterday, post the earnings release.
Total revenue increased 9.6% to $454.3 million in the reported quarter and exceeded the Zacks Consensus Estimate of $442 million. Top-line growth was driven by revenue improvement in all segments.
Adjusted EBITDA stood at $59.9 million compared with $66.0 million in the prior-year quarter.
Segment Details
Corporate Finance/Restructuring segment revenues increased 7.6% to $104.0 million in second-quarter 2014. The year-over-year increase was driven by higher demand for North America non-distressed service offerings, partially offset by continued softness in global bankruptcy engagement. Adjusted EBITDA was $19.1 million in the reported quarter versus $17.8 million in the year ago quarter.
Economic Consulting revenues increased 5.6% year on year to $117.2 million in the reported quarter. The revenue growth was due to higher demand in antitrust litigation practice and international arbitration, regulatory and valuation practices in Europe, Middle East and Africa (EMEA).Adjusted EBITDA was $18.1 million in the reported quarter versus $20.8 million in the prior year quarter.
Forensic and Litigation Consulting segment revenues increased 13.3% year over year to $119.1 million, primarily driven by higher demand in disputes and investigations in the North America and Asia Pacific regions. Adjusted EBITDA was $22.3 million in the reported quarter versus $18.8 million in the prior year quarter.
Technology segment revenues were up 18.6% to $60.7 million. The year-over-year increase in revenues was driven by improved demand related to large scale complex global investigations. Adjusted EBITDA was $15.1 million in the reported quarter versus $16.9 million in the year ago quarter.
Strategic Communications segment revenues increased 5.4% year over year to $53.3 million in the quarter, driven by favorable foreign currency translation growth and increase in the number of retainer-based relationships in EMEA. Adjusted EBITDA was $5.8 million in the reported quarter versus $5.2 million in the year ago quarter.
Liquidity
At quarter end, FTI Consulting had cash and cash equivalents of $94.4 million versus $205.8 million in Dec 31, 2013. Long-term debt (net of current portion) stood at $711.0 million, unchanged from year-end 2013. Net cash provided by operating activities for the quarter was $33.7 million compared with $21.7 million in the year-ago period.
Guidance
The company expects full-year 2014 revenues to be in the range of $1.73 billion and $1.77 billion and adjusted EPS within $1.55 and $1.70. Management stated that the adjusted EPS range reflects investments and expenses in the second half of 2014 in tune with its multi-year business plans. The guidance was factored in after taking into consideration the better-than-expected results in the Forensic and Litigation Consulting and Technology segments. FTI Consulting also introduced its medium-term growth targets, with adjusted EPS expected in the range of $1.75 and $2.10 for 2015 and over $2.50 for 2016.
FTI Consulting currently has a Zacks Rank #2 (Buy). Other stocks that look promising and are worth a look now include CBIZ, Inc. (CBZ) , CRA International Inc. (CRAI) and Stantec Inc (STN), each carrying a Zacks Rank #1 (Strong Buy).
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