FTI sulting(FCN) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - First quarter 2023 revenues reached $806.7 million, an increase of$ 83.1 million or 11.5% year-over-year, with a 13.8% increase when excluding the estimated negative impact of foreign exchange [12][78] - Earnings per share (EPS) were $1.34, down from$ 1.66 in the prior year quarter [12] - Adjusted EBITDA for the first quarter 2023 was $78.4 million, a decrease of 13.3% compared to$ 90.5 million in the prior year quarter [68] Business Line Data and Key Metrics Changes - Corporate Finance & Restructuring revenues were $300 million, up 18.4% year-over-year, driven by higher demand for restructuring and business transformation services [86] - Economic Consulting revenues increased by 2.2% to$ 169.6 million, primarily due to higher demand for M&A-related antitrust services [87] - Forensic and Litigation Consulting (FLC) revenues rose 12.7% to $173.4 million, attributed to increased demand for data and analytics, investigations, and health solutions services [69] Market Data and Key Metrics Changes - Restructuring revenues grew 38% year-over-year, reflecting strong demand across various verticals including retail and healthcare [34] - Business transformation and transactions grew 5.5% year-over-year, although transactions specifically were down 8% [22] Company Strategy and Development Direction - The company is focused on long-term growth while being mindful of utilization rates, with a strong balance sheet allowing for organic growth, share buybacks, and acquisitions [17] - Management emphasized the importance of attracting and developing talent to support business growth, particularly in key markets like the Middle East and Europe [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong revenue growth despite short-term volatility and challenges, including FX impacts and revenue deferrals [61][82] - The outlook for restructuring activity remains positive, with expectations for a pickup in M&A activity later in the year [37][92] Other Important Information - The company repurchased$ 17.8 million worth of shares during the quarter, with approximately $460.7 million remaining for future buybacks [89] - Total debt net of cash increased to$ 122.7 million as of March 31, 2023, compared to $60.1 million a year earlier [89] Q&A Session Summary Question: What is the outlook for restructuring activity? - Management noted a sequential increase in restructuring revenues, indicating strength in both the U.S. and overseas markets [92] Question: Were there any significant timing items affecting revenue? - Management acknowledged revenue deferrals and other factors like FX and bad debt that can impact quarterly results [93] Question: How does the company view the hiring opportunities in the current market? - Management highlighted robust hiring, particularly outside the U.S., driven by the company's improved reputation and ability to attract top talent [97]