FCN » Topics » Economic Consulting

This excerpt taken from the FCN 8-K filed Nov 6, 2009.

Economic Consulting

Revenues in the Economic Consulting segment increased 5.6% to a record $59.6 million from $56.4 million in the prior year. Segment EBITDA was $14.0 million, or 23.4% of segment revenues, compared to $15.8 million, or 27.9% of segment revenues, in the prior year. The revenue increase resulted from continued growth in the segment’s new offices in New York, Los Angeles and London, and improving activity in strategic M&A and financial dispute matters during the quarter. EBITDA margins declined year-over-year due to the cost of expansion into new markets and a 19% increase in professional headcount to meet anticipated rising demand.

This excerpt taken from the FCN 8-K filed Aug 5, 2009.

Economic Consulting

Revenues in the Economic Consulting segment increased 6.2% to a record $57.1 million, compared to $53.8 million in the prior year period. On a sequential basis, segment revenues increased 4.2% from the first quarter of 2009. Segment EBITDA was $10.3 million, or 18.1% of segment revenues, compared to $14.0 million, or 26.0% of segment revenues, in the prior year period. The segment was active in regulatory issues in pharmaceuticals, railroads and telecommunications. The 26 professionals recently hired in the segment’s new practices in the U.K., Canada, New York and Los Angeles have begun to gain traction in their respective regions, and have been experiencing rapidly rising utilization and revenue contributions. While the rate of retention on new securities and commercial financial engagements in the segment began to accelerate in the second quarter, utilization has been hampered by the slow commencement of work.

This excerpt taken from the FCN 10-Q filed May 5, 2009.

ECONOMIC CONSULTING

 

     Three Months Ended
March 31,
 
     2009     2008  
     (dollars in thousands,
except rate per hour)
 

Revenues

   $ 54,836     $ 56,415  
                

Operating expenses:

    

Direct cost of revenues

     36,762       37,138  

Selling, general and administrative expenses

     8,162       6,444  

Amortization of other intangible assets

     545       570  
                
     45,469       44,152  
                

Segment operating income

     9,367       12,263  

Add back: depreciation and amortization of intangible assets

     952       1,053  
                

Segment EBITDA

   $ 10,319     $ 13,316  
                

Gross margin(1)

   $ 18,074     $ 19,277  

Gross profit margin(2)

     33.0 %     34.2 %

Segment EBITDA as a percent of revenues

     18.8 %     23.6 %

Number of revenue generating professionals (at period end)

     275       234  

Utilization rates of billable professionals

     78 %     90 %

Average billable rate per hour

   $ 454     $ 442  

 

(1)

Revenues less direct cost of revenues

 

(2)

Gross margin as a percent of revenues

 

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Three Months Ended March 31, 2009 compared to Three Months Ended March 31, 2008

Revenues declined $1.6 million, or 2.8% to $54.8 million for the three months ended March 31, 2009 from $56.4 million for the three months ended March 31, 2008. While we continue to build new business, we have experienced delayed ramp-ups as compared to the prior year.

Gross profit decreased $1.2 million to $18.1 million for the three months ended March 31, 2009 from $19.3 million for the three months ended March 31, 2008. Gross profit margin as a percentage of revenue decreased by 1.2 percentage points to 33.0% for the three months ended March 31, 2009 from 34.2% for the three months ended March 31, 2008 due to compensation cost increases as well as investments in new markets in a period of slight revenue decline.

SG&A expense increased $1.7 million to $8.2 million for the three months ended March 31, 2009 from $6.4 million for the three months ended March 31, 2008. As a percentage of revenues, SG&A expense was 14.9% for the three months ended March 31, 2009 versus 11.4% for the three months ended March 31, 2008. The increase in SG&A expense in 2009 was primarily due to higher general overhead costs and higher bad debt expense at 2.3% of revenue for three months ended March 31, 2009 versus 1.0% for the three months ended March 31, 2008.

Segment EBITDA declined $3.0 million, or 22.5%, to $10.3 million for the three months ended March 31, 2009 from $13.3 million for the three months ended March 31, 2008.

This excerpt taken from the FCN 8-K filed Apr 30, 2009.

Economic Consulting

Revenues in the Economic Consulting segment were $54.8 million compared to a record $56.4 million in the prior year period. Segment EBITDA was $10.3 million, or 18.8% of segment revenues, compared to $13.3 million, or 23.6% of segment revenues, in the prior year period. The year over year EBITDA performance reflects significant investment in building out the segment domestically and overseas. This included the initial hiring of 26 revenue producing professionals including three big name economists in the U.S. and Europe, increased investments in infrastructure to support the segment’s geographic expansion and higher expenses for branding and marketing in Europe to accelerate its entry into that market. New engagements booked in the first quarter coupled with the anticipated contribution from new hires once they have settled into the business are expected to fuel the growth of this segment over the remainder of this year.

This excerpt taken from the FCN 8-K filed Mar 3, 2009.

Economic Consulting

Revenue in the Economic Consulting segment increased 19.5% to $53.3 million from $44.6 million in the prior year period. Nearly all of the revenue growth was organic. Segment EBITDA increased 35.6% to $16.0 million, or 30.0% of segment revenue, from $11.8 million, or 26.4% of segment revenue, in the prior year period. The segment’s strong performance reflects ongoing high levels of demand for antitrust litigation consulting, as well as a steady increase in demand arising from disputes related to the global credit crisis. Performance also continued to be driven by robust demand for consulting surrounding strategic M&A initiatives, although at a somewhat slower pace than that seen in the first half of the year. During the period, the segment launched its Auctions Solutions practice through the addition of a new team including the leading expert on auction design, bidding strategies and related matters. Since year end, the segment has commenced operations in London with the addition of several senior practitioners and a growing number of staff, and added several other senior practitioners in New York and Los Angeles.

These excerpts taken from the FCN 10-K filed Mar 2, 2009.

Economic Consulting

Our Economic Consulting segment provides law firms, companies, government entities and other interested parties with clear analysis of complex economic issues for use in legal and regulatory proceedings, strategic decision making and public policy debates in the U.S. and around the world. We deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions, complex antitrust litigation, commercial disputes, regulatory proceedings and securities litigation. Our statistical and economic experts help clients analyze complex economic issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business as a result of particular events. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation, healthcare, IT/Internet and pharmaceuticals. Our professionals regularly provide expert testimony on damages, rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual property disputes. They also provide analyses and advice relating to antitrust and competition cases, regulatory proceedings, business valuations and public policy.

A number of factors affect the demand for our economic consulting services including merger and acquisition activity (particularly large mergers of firms that are perceived to compete with each other in providing goods and services), general economic conditions, competition and governmental investigations. During 2008, demand for our economic consulting services remained strong for the year. Declines in merger and acquisition activity in the second half of the year were partially offset by increases in antitrust litigation, securities cases and increased regulatory activity.

Our Economic Consulting segment includes:

Compass Lexecon. Our Compass Lexecon practice provides economic and econometric consulting services to assist clients in public policy debates, regulatory proceedings, antitrust lawsuits and securities and commercial litigation. Our services include financial and economic analyses of policy, regulatory and litigation matters for corporations, governments and public-sector entities in the U.S. and around the world.

Network Industries Strategies. Our Network Industries Strategies practice advises major network industries—such as telecommunications, electric power, energy and transportation—on strategic and tactical challenges associated with transitioning from heavily regulated to more competitive environments.

Auction Solutions. In October 2008, we established our Auction Solutions practice, which advises clients on auction design and implementation, bidding strategies and related matters.

From December 31, 2007, we increased the number of revenue-generating professionals in our Economic Consulting segment by approximately 12% to 264 professionals as of December 31, 2008.

Economic Consulting

Our Economic Consulting segment provides law firms, companies, government entities and other interested parties with clear analysis of complex economic issues for use in legal and regulatory proceedings, strategic decision making and public policy debates in the U.S. and around the world. We deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions, complex antitrust litigation, commercial disputes, regulatory proceedings and securities litigation. Our statistical and economic experts help clients analyze complex economic issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business as a result of particular events. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation, healthcare, IT/Internet and pharmaceuticals. Our professionals regularly provide expert testimony on damages, rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual property disputes. They also provide analyses and advice relating to antitrust and competition cases, regulatory proceedings, business valuations and public policy.

A number of factors affect the demand for our economic consulting services including merger and acquisition activity (particularly large mergers of firms that are perceived to compete with each other in providing goods and services), general economic conditions, competition and governmental investigations. During 2008, demand for our economic consulting services remained strong for the year. Declines in merger and acquisition activity in the second half of the year were partially offset by increases in antitrust litigation, securities cases and increased regulatory activity.

Our Economic Consulting segment includes:

Compass Lexecon. Our Compass Lexecon practice provides economic and econometric consulting services to assist clients in public policy debates, regulatory proceedings, antitrust lawsuits and securities and commercial litigation. Our services include financial and economic analyses of policy, regulatory and litigation matters for corporations, governments and public-sector entities in the U.S. and around the world.

Network Industries Strategies. Our Network Industries Strategies practice advises major network industries—such as telecommunications, electric power, energy and transportation—on strategic and tactical challenges associated with transitioning from heavily regulated to more competitive environments.

Auction Solutions. In October 2008, we established our Auction Solutions practice, which advises clients on auction design and implementation, bidding strategies and related matters.

From December 31, 2007, we increased the number of revenue-generating professionals in our Economic Consulting segment by approximately 12% to 264 professionals as of December 31, 2008.

Economic Consulting

FACE="Times New Roman" SIZE="2">Our Economic Consulting segment provides law firms, companies, government entities and other interested parties with clear analysis of complex economic issues for use in legal and regulatory proceedings, strategic
decision making and public policy debates in the U.S. and around the world. We deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions, complex antitrust litigation, commercial disputes, regulatory
proceedings and securities litigation. Our statistical and economic experts help clients analyze complex economic issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business
as a result of particular events. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation, healthcare, IT/Internet and pharmaceuticals. Our professionals regularly provide
expert testimony on damages, rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual property disputes. They also provide analyses and advice relating to antitrust and competition cases,
regulatory proceedings, business valuations and public policy.

A number of factors affect the demand for our economic consulting services
including merger and acquisition activity (particularly large mergers of firms that are perceived to compete with each other in providing goods and services), general economic conditions, competition and governmental investigations. During 2008,
demand for our economic consulting services remained strong for the year. Declines in merger and acquisition activity in the second half of the year were partially offset by increases in antitrust litigation, securities cases and increased
regulatory activity.

Our Economic Consulting segment includes:

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Compass Lexecon. Our Compass Lexecon practice provides economic and econometric consulting services to assist clients in public policy debates,
regulatory proceedings, antitrust lawsuits and securities and commercial litigation. Our services include financial and economic analyses of policy, regulatory and litigation matters for corporations, governments and public-sector entities in the
U.S. and around the world.

Network Industries Strategies. Our Network Industries Strategies practice advises major network
industries—such as telecommunications, electric power, energy and transportation—on strategic and tactical challenges associated with transitioning from heavily regulated to more competitive environments.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Auction Solutions. In October 2008, we established our Auction Solutions practice, which advises clients on auction design and implementation,
bidding strategies and related matters.

From December 31, 2007, we increased the number of revenue-generating professionals in our
Economic Consulting segment by approximately 12% to 264 professionals as of December 31, 2008.

Economic Consulting

FACE="Times New Roman" SIZE="2">Our Economic Consulting segment provides law firms, companies, government entities and other interested parties with clear analysis of complex economic issues for use in legal and regulatory proceedings, strategic
decision making and public policy debates in the U.S. and around the world. We deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions, complex antitrust litigation, commercial disputes, regulatory
proceedings and securities litigation. Our statistical and economic experts help clients analyze complex economic issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business
as a result of particular events. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation, healthcare, IT/Internet and pharmaceuticals. Our professionals regularly provide
expert testimony on damages, rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual property disputes. They also provide analyses and advice relating to antitrust and competition cases,
regulatory proceedings, business valuations and public policy.

A number of factors affect the demand for our economic consulting services
including merger and acquisition activity (particularly large mergers of firms that are perceived to compete with each other in providing goods and services), general economic conditions, competition and governmental investigations. During 2008,
demand for our economic consulting services remained strong for the year. Declines in merger and acquisition activity in the second half of the year were partially offset by increases in antitrust litigation, securities cases and increased
regulatory activity.

Our Economic Consulting segment includes:

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Compass Lexecon. Our Compass Lexecon practice provides economic and econometric consulting services to assist clients in public policy debates,
regulatory proceedings, antitrust lawsuits and securities and commercial litigation. Our services include financial and economic analyses of policy, regulatory and litigation matters for corporations, governments and public-sector entities in the
U.S. and around the world.

Network Industries Strategies. Our Network Industries Strategies practice advises major network
industries—such as telecommunications, electric power, energy and transportation—on strategic and tactical challenges associated with transitioning from heavily regulated to more competitive environments.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Auction Solutions. In October 2008, we established our Auction Solutions practice, which advises clients on auction design and implementation,
bidding strategies and related matters.

From December 31, 2007, we increased the number of revenue-generating professionals in our
Economic Consulting segment by approximately 12% to 264 professionals as of December 31, 2008.

This excerpt taken from the FCN 8-K filed Nov 6, 2008.

Economic Consulting

Revenue in the Economic Consulting segment increased 22.9 percent to $56.4 million from $45.9 million in the prior year period. All of this growth was organic. Segment EBITDA increased 29.7 percent to $15.8 million, or 27.9 percent of segment revenue, from $12.1 million, or 26.5 percent of segment revenue, in the prior year period. Growth in the quarter was driven by the continuing demand for strategic M&A advice plus a significant number of dispute and litigation cases arising from the credit crisis. Momentum has begun to build for stockholder class actions and other economic engagements arising out of the turmoil in the financial markets, and for traditional antitrust litigation in areas such as price fixing and other types of collusive behavior as companies seek to mitigate pressures from an increasingly hostile economic climate.

This excerpt taken from the FCN 8-K filed Aug 7, 2008.

Economic Consulting

Revenue in the Economic Consulting segment increased 22.2 percent to $53.8 million from $44.0 million in the prior year period. Segment EBITDA increased 7.1 percent to $14.0 million, or 26.0 percent of segment revenue, from $13.1 million, or 29.7 percent of segment revenue, in the prior year period. The market for strategic M&A was strong across financial services, hospitals, airlines and industrial companies.


In addition, the segment began to see an increasing number of engagements related to the sub-prime and credit crisis, and the Network Industries Strategies practice experienced an increase in railroad commercial litigation and regulatory work as a result of a more predictable regulatory environment.

This excerpt taken from the FCN 8-K filed May 8, 2008.

Economic Consulting

Revenue in the Economic Consulting segment increased 41.0 percent to $56.4 million compared to $40.0 million in the prior year period. Segment EBITDA increased 19.9 percent to $13.3 million from segment EBITDA of $11.1 million in the prior year period. Segment EBITDA margin was 23.6 percent of revenue compared to 27.8 percent in the prior year period. The strong revenue growth was caused by credit and liquidity issues and strategic M&A assignments in sectors such as financial services, hospital, airline and internet/IT. The segment’s revenue performance was also due to financial consulting engagements relating to transactions in which private equity buyers have been unwilling or unable to consummate acquisitions at originally agreed prices, and the increasing incidence of private actions against companies and boards of directors, alleging various forms of negligence. The lower margin compared to first quarter 2007 was due primarily to the hiring of a prominent economist and the normal lag between the commencement of his employment and the full contribution to revenue resulting from his efforts. In addition, the margins continue to be burdened by non-cash compensation expense resulting from the variable accounting treatment for certain options driven by the strong performance of FTI’s common stock.


This excerpt taken from the FCN 10-Q filed May 7, 2008.

ECONOMIC CONSULTING

 

     Three Months Ended
March 31,
 
     2008     2007  
     (dollars in thousands,
except rate per hour)
 

Revenues

   $ 56,415     $ 39,997  
                

Operating expenses:

    

Direct cost of revenues

     37,138       24,330  

Selling, general and administrative expenses

     6,444       4,904  

Amortization of other intangible assets

     570       1,153  
                
     44,152       30,387  
                

Segment operating income

     12,263       9,610  

Depreciation

     483       345  

Amortization of other intangible assets

     570       1,153  
                

Segment profit

   $ 13,316     $ 11,108  
                

Gross profit margin(1)

     34.2 %     39.2 %

Segment profit as a percent of revenues

     23.6 %     27.8 %

Number of revenue-generating professionals: (at period end)

     234       209  

Utilization rates of billable professionals

     90 %     85 %

Average billable rate per hour

   $ 442     $ 398  

 

(1) Revenues net of direct costs, as a percentage of revenues
This excerpt taken from the FCN 10-K filed Feb 29, 2008.

Economic Consulting

Our economic consulting segment provides law firms, companies, government entities and other interested parties with clear analysis of complex economic issues for use in legal and regulatory proceedings, strategic decision making and public policy debates in the U.S. and internationally. We deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions, complex antitrust litigation, commercial disputes, regulatory proceedings and securities litigation. Our statistical and economic experts help our clients analyze complex economic issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business. We have deep industry experience in such areas as

 

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commercial and investment banking, telecommunications, energy, transportation, healthcare, IT/Internet and pharmaceuticals. Our professionals regularly provide expert testimony on damages, rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual property disputes. They also provide analyses and advice relating to antitrust and competition cases, regulatory proceedings and business valuations.

A number of factors affect the demand for our economic consulting services including merger and acquisition activity (particularly large mergers of competitors within a single industry), general economic conditions, competition and governmental investigations. During 2007, merger and acquisition activity and antitrust litigation and securities cases remained strong, fueling demand for our economic consulting services.

Our economic consulting segment includes:

 

   

Compass Lexecon. Our Compass Lexecon practice provides economic and econometric consulting services to assist clients in public policy debates, regulatory proceedings, antitrust lawsuits and securities and commercial litigation. Our services include financial and economic analyses of policy, regulatory and litigation matters for corporations, governments and public-sector entities in the U.S. and around the world.

 

   

Network Industries Strategies. Our Network Industries Strategies practice advises major network industries—such as telecommunications, electric power, energy and transportation—on strategic and tactical challenges associated with transitioning from heavily regulated to more competitive environments.

From December 31, 2006, we increased the number of revenue-generating professionals in our economic consulting segment by approximately 15% to 236 professionals as of December 31, 2007.

This excerpt taken from the FCN 8-K filed Feb 29, 2008.

Economic Consulting

Economic Consulting revenue increased 21.1 percent to $174.5 million from $144.1 million in the prior year period. Segment EBITDA increased 30.4 percent to $48.1 million, or 27.6 percent of revenue, from adjusted segment EBITDA of $36.9 million, or 25.6 percent of revenue, in the prior year period. (Adjusted segment EBITDA is defined as Segment EBITDA excluding special charges of $4.1 million for 2006.)


This excerpt taken from the FCN 8-K filed Nov 2, 2007.

Economic Consulting

Revenue in the Economic Consulting segment increased 32.7 percent to $45.9 million compared to $34.6 million in the prior year period. Segment EBITDA increased 59.2 percent to $12.1 million from Adjusted EBITDA of $7.6 million in the prior year period. EBITDA margins increased to 26.5 percent of revenue from 22.1 percent in the prior year period. The segment continues to benefit from its premier position in anti-trust and anti-competitive engagements in both the U.S. and Europe. The segment also won major new engagements relating to litigation in the securities and financial services industries, hospital consolidation feasibility studies, and strategic consulting for industries affected by the dramatic increase in energy prices. Segment utilization rates are up to 87 percent this quarter compared to 76 percent in the year ago period.

This excerpt taken from the FCN 8-K filed Aug 6, 2007.

Economic Consulting

Revenues in the Economic Consulting segment increased 23.6 percent to $44.0 million versus $35.6 million in the prior year period. Segment EBITDA increased 37.9 percent to $13.1 million, or 29.8 percent of revenue, from $9.5 million, or 26.8 percent of revenue, in the prior year period. The growth in economic consulting reflects the continued strength of the M&A market, including major assignments in telecom, media and food services, and engagements arising out of the recent nationalization of oil reserves in Venezuela. Year-to-date, FTI estimates that it has participated in the majority of mergers over $200 million that have involved a “Second Request,” as described above.

This excerpt taken from the FCN 8-K filed May 2, 2007.

Economic Consulting

Strong performance continued in the Economic Consulting segment. Revenues increased 5.0 percent to $40.0 million from $38.1 million in the prior year period. Segment EBITDA increased 27.6 percent to $11.1 million, or 27.8 percent of revenues, from $8.7 million, or 22.9 percent of revenues, in the prior year period. Continued strength of M&A antitrust-related work, a significant upswing in energy-related oil and natural gas litigation resulting from the pricing volatility seen in recent years, and the addition of two new prominent economists were drivers of the segment’s performance. Going forward, the Company believes there may be larger number of mergers in the hospital area and increased activity involving the private equity sector as those firms increasingly look to merge targets with existing portfolio companies. The Company also believes that M&A activity may again, as last year, accelerate towards the fourth quarter with the additional impetus of acquirers seeking to have their transactions reviewed by the current administration.

This excerpt taken from the FCN 10-K filed Mar 13, 2007.

Economic Consulting

We deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions and other complex antitrust and anticompetition, commercial and securities litigation. Our economic consulting practice segment includes the Lexecon and Compass businesses, both highly respected brands in the economic consulting industry. Within our economic consulting practice, we provide our clients with analyses of complex economic issues for use in legal and regulatory proceedings, strategic decision-making and public policy debates. We are also in the business of advising on developing and implementing concrete strategies for driving revenue growth and profitability. Our statistical and economic experts help companies evaluate issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation, healthcare and pharmaceuticals. Our professionals regularly provide expert testimony on damages, rates and prices, valuations, merger effects, intellectual property disputes in antitrust and anticompetition cases, regulatory proceedings and business valuations.

As of December 31, 2006, we had 206 revenue-generating professionals in our economic consulting practice.

This excerpt taken from the FCN 8-K filed Feb 16, 2007.

Economic Consulting

Economic Consulting had strong results, with revenues increasing 32.6 percent to $35.8 million from $27.0 million in the prior year period. There was solid performance within most areas of the business, including antitrust, finance, industrial organizations, energy and telecom. Segment EBITDA increased 150.0 percent to $11.0 million, or 30.7 percent of revenues, from $4.4 million, or 16.3 percent of sales, in the prior year period.

This excerpt taken from the FCN 8-K filed Nov 1, 2006.

Economic Consulting

Economic Consulting revenues increased 21.8 percent to $34.6 million from $28.4 million for the same period in the prior year despite the effect of a series of proposed rule makings by the Surface Transportation Board that caused some ongoing casework in the Company’s network strategies practice to be delayed. Looking forward, the pipeline appears strong in energy, financial/securities litigation and antitrust, and an influx of engagements to manage large settlements resulting from SEC enforcement matters is expected. Segment Adjusted EBITDA, excluding the effect of the special termination charge, increased 5.6 percent to $7.6 million from $7.2 million in the prior year.

This excerpt taken from the FCN 8-K filed Sep 18, 2006.

Economic Consulting

We are a leading provider of economic consulting services in the U.S. and deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions and other complex commercial and securities litigation. Our economic consultancy business segment includes the Lexecon and Compass practices, both highly respected brands in the economic consulting industry. Within our economic consulting practice, we provide our clients with analyses of complex economic issues for use in legal and regulatory proceedings, strategic decision-making and public policy debates. We are also in the business of advising on developing and implementing concrete strategies for driving revenue growth and profitability. Our statistical and economic experts help companies evaluate issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation, healthcare and pharmaceuticals. Our professionals regularly provide expert testimony on damages, rates and prices, valuations, merger effects, intellectual property disputes in antitrust cases, regulatory proceedings and valuations.

As of June 30, 2006, we had 214 revenue-generating professionals in our economic consulting segment.

This excerpt taken from the FCN 8-K filed Aug 3, 2006.

Economic Consulting

Revenues were $35.6 million in the second quarter of 2006, increasing 29.5 percent from $27.5 million in the second quarter of 2005. Segment EBITDA was $9.5 million, 26.8 percent of revenues, an increase of 37.7 percent from $6.9 million, 24.9 percent of revenues, for the same period in the prior year.

This excerpt taken from the FCN 8-K filed May 2, 2006.

Economic Consulting

Revenues were $38.1 million in the first quarter of 2006, including revenues earned from the previously announced acquisition of Competition Policy Associates, Inc. (COMPASS) at the beginning of 2006, increasing 50.0 percent from $25.4 million in the first quarter of 2005. Segment EBITDA was $8.7 million, 22.9 percent of revenues, an increase of 50.0 percent from $5.8 million, 22.8 percent of revenues, for the same period in the prior year.

This excerpt taken from the FCN 8-K filed Feb 17, 2006.

Economic Consulting

 

Revenues were $27.0 million in the fourth quarter of 2005, increasing 29.2 percent from $20.9 million in the fourth quarter of 2004. Segment EBITDA was $4.4 million, 16.2 percent of revenues, a decrease of 15.4 percent from $5.2 million in the prior year, 25.0 percent of revenues. In addition, as previously announced, FTI completed the acquisition of Competition Policy Associates, Inc. at the beginning of 2006.

 

This excerpt taken from the FCN 8-K filed Nov 1, 2005.

Economic Consulting

 

Revenues in the economic consulting segment were $28.4 million in the third quarter of 2005, increasing 42.0 percent from $20.0 million last year. Segment EBITDA was $7.2 million, or 25.4 percent of revenues, an increase of 111.8 percent from $3.4 million, or 16.8 percent of revenues, in the prior year.

 

This excerpt taken from the FCN 8-K filed Jul 28, 2005.

Economic Consulting

 

Revenues in the economic consulting segment were $27.6 million in the second quarter of 2005, increasing 24.9 percent from $22.1 million last year. Segment Adjusted EBITDA was $6.9 million, 25.1 percent of revenues, an increase of 30.2 percent from $5.3 million in the prior year, 24.0 percent of revenues.

 

These excerpts taken from the FCN 8-K filed Jul 19, 2005.

Economic Consulting

 

Revenues are anticipated to increase 24.9 percent to approximately $27.6 million in the second quarter from $22.1 million last year. Segment EBITDA is anticipated to be approximately $6.9 million, 25.1 percent of revenues, an increase of 30.2 percent from $5.3 million in the prior year, 24.0 percent of revenues.

 

* * * * *

 

Cash flow provided by operations for the second quarter of 2005 is anticipated to be approximately $31.5 million compared with $20.7 million provided in the second quarter of 2004, an increase of 52.2 percent. Purchases of property and equipment in the second quarter of 2005 were approximately $5.0 million.

 

Total long-term debt at June 30, 2005 was $142.5 million. No amounts were outstanding under the Company’s revolving credit agreement. Shareholders’ equity at June 30, 2005 was approximately $548.4 million.

 

Total headcount at June 30, 2005 was 1,197. Revenue-generating headcount was 888, including 423, 310 and 155 in the Forensic/Litigation/Technology, Corporate Finance/Restructuring and Economic Consulting segments, respectively. Utilization of revenue-generating personnel measurable by billable hours was approximately 80.5 percent for the second quarter, and average rate per hour for the quarter was approximately $340.

 

Economic Consulting

 

We are a leading provider of economic consulting services in the United States and deliver sophisticated economic analysis and modeling of issues arising in mergers and acquisitions and other complex commercial and securities litigation. Our 2003 acquisition of the Lexecon business, a leading provider of economic consulting services in the United States, has greatly enhanced our market position within this practice and our ability to provide complex economic consulting services. Our statistical and economic experts help companies evaluate issues such as the economic impact of deregulation on a particular industry or the amount of commercial damages suffered by a business. We have deep industry experience in such areas as commercial and investment banking, telecommunications, energy, transportation and pharmaceuticals. Our professionals regularly provide expert testimony on damages, rates and prices, valuations, merger effects, intellectual property disputes in antitrust cases, regulatory proceedings and valuations.

 

As of June 30, 2005, we had 155 revenue-generating consultants in our economic consulting practice.

 

2


This excerpt taken from the FCN 8-K filed Apr 28, 2005.

Economic Consulting

 

Revenues in the economic consulting segment were strong at $25.4 million in the first quarter of 2005, increasing 11.4 percent from $22.8 million in the first quarter of 2004, and 21.5 percent from $20.9 million in the fourth quarter of 2004. This segment’s EBITDA margin of 22.8 percent in the first quarter compares to 23.7 percent in the prior year.

 

Cash flow used in operations for the first quarter of 2005 was $15.5 million compared with $20.2 million used in the first quarter of 2004. The company anticipates normal seasonal improvements to its collections and cash flow from operations in the second quarter and for the remainder of the year.

 

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Total long-term debt at March 31, 2005 was $122.5 million, including $22.5 million outstanding under its revolving credit agreement primarily related to the acquisition of Ringtail Solutions and share repurchases. On April 19, the company increased the term loan portion of its credit facility by $50 million, a portion of which was used to repay all amounts outstanding under the revolving credit, bringing net debt outstanding to $122.3 million.

 

During the first quarter, the company repurchased 392,800 shares of common stock at an average price of $19.62 per share, for an aggregate of approximately $7.7 million. At March 31, 2005, the remaining amount authorized under the company’s current share repurchase program was approximately $27.5 million.

 

Total headcount at March 31, 2005 was 1,068, and revenue-generating headcount was 785, including 23 Ringtail personnel. Utilization of revenue-generating personnel measurable by billable hours was approximately 81 percent for the first quarter, and average rate per hour for the quarter was approximately $341.

 

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