FTI Consulting Inc.'s
) fourth quarter operating earnings of 71 cents per share fell marginally short of the Zacks Consensus Estimate of 73 cents, but were significantly higher than the 56 cents per share in the prior-year quarter.
Net income increased 21.3% year-over-year to $36.6 million. Non-GAAP EBITDA was $80.8 million or 23.6% of revenues, compared to $70.6 million or 21.9% of revenues in the prior-year quarter.
Results benefited primarily from a disciplined expense management and strong restructuring activities coupled by improvement in the litigation driven activities that drove M&A transactions. However, declining revenues from Technology and Strategic Communication segments hampered growth.
FTI Consulting's total revenue increased 6.2% year-over-year to $342.9 million. Quarterly revenue by business segments are as follows:
Corporate Finance/Restructuring revenues increased 16.5% to $124.9 million from $107.3 million in the prior-year quarter on robust demand that drove higher chargeable hours and billing rates. The segment continued to be active in restructuring assignments in a broad range of industries being impacted by the global recession, including financial services, automotive, utility/energy, media and telecommunications. Strong contributions from its global expansion into non-U.S. markets such as the Canada and Latin America also enhanced growth.
Forensic and Litigation Consulting revenues increased 5.5% to $61.8 million, compared to $58.6 million in the prior-year period. While intellectual property and domain expertise industry practices were strong due to several large financial fraud investigations, the levels of more routine commercial litigation and investigations remained soft on the back of the challenging global economic environment.
Technology revenues decreased 8.6% to $47.7 million, compared to $52.2 million in the prior-year quarter. The decline was primarily attributed to soft demand related to complex litigation and regulatory investigations, and challenged pricing for certain aspects of the segment.
Economic Consulting revenues increased 18.5% to a record $63.2 million from $53.3 million in the prior-year period. Offices in New York, Los Angeles and London and continued improving activity in strategic M&A and financial dispute matters drove consistent growth during the quarter.
Strategic Communications revenues decreased 12.2% to $45.3 million, compared to $51.6 million in the prior-year quarter. The segment continued to be challenged by a dramatically slower volume of M&A transactions along with the constant impact of the global recession causing fee pressures from retained clients.
For full year 2009, FTI Consulting's GAAP net income was $143.0 million or $2.70 per share as compared to $120.9 million or $2.26 per share in 2008. Total revenue increased 8.5% from 2008 to $1.4 billion. Total diluted weighted shares outstanding decreased to 53.0 million compared to 53.6 million shares.
At the end of 2009, FTI Consulting's operating cash flow was $251 million compared to $197 million generated in 2008. This was primarily driven by higher net income and strong receivable collections. Cash and short-term investments was $133.9 million as of Dec 31, 2009 after funding the $250 million asset buyback.
Share Repurchase Program
FTI Consulting announced the authorization of a new two-year stock repurchase program of up to $500 million. During the reported quarter, FTI Consulting entered into a $250 million accelerated stock buyback. The transaction was completed on Jan. 21, 2010 and resulted in the purchase of 5,455,591 shares, of which 4,874,807 shares were delivered in the reported quarter.
FTI Consulting projected revenues to be in the range of $1.47 billion-$1.57 billion, while operating earnings per share are estimated to be between $3.00 and $3.25. The special charge is expected to be approximately $25 million or 31 cents per share. This is related to the termination of approximately 150 employees and the consolidation of three office locations.