- The Washington Times - Tuesday, February 18, 2003

Record-high bankruptcies and changes in the accounting world have boosted revenues and sped up long-term goals for FTI Consulting Inc., an Annapolis firm that helps companies emerge from bankruptcy.
U.S. bankruptcies rose 6 percent last year to 1.58 million, 38,540 of them from businesses, according to the Administrative Office of U.S. Courts.
FTI Consulting has shown growth through prosperous and declining economic times, said Jack Dunn, the company's chairman and chief executive officer.
"Hard times force companies to use our services, but we've drawn in more clients and sales by diversifying our services so that we're assisting companies in mergers and acquisitions in good times," Mr. Dunn said.
Analysts say the company already is tapping into the bankruptcy-services market by selling off low-performing business units to slash costs and buying larger service units from such companies as PricewaterhouseCoopers.
FTI Consulting bought the accounting firm's business-recovery services division in September for $145 million in cash and 3 million in company shares.
Mr. Dunn said changes by the Securities and Exchange Commission such as redefining accounting policies helped accelerate the sale. "It helped us reach a goal we had deemed would be further down the road," he said.
Sandra Notardonato, analyst with Adams, Harkness & Hill Inc., said FTI Consulting's acquisition demonstrates "how much the bankruptcy-services market is changing and how the company is taking in a larger share of the market."
"It's not only drawing in business for its core services, but also branching out to be a forensic-accounting provider to companies wary of corporate accounting firms," Miss Notardonato said, rating the company a "buy."
Miss Notardonato estimated that FTI Consulting's per-share earnings will surge 43 percent to $2.33 for the year from $1.63 last year.
"Now that the company has that [acquisition] behind them, they can look forward in building up their other service divisions," which include accounting and other litigation services.
FTI Consulting more than tripled its income in the fourth quarter ended Dec. 31 to $14.9 million (65 cents) from $4.8 million (21 cents) a year earlier. Profits in the past year soared to $34.9 million ($1.63) from $12.9 million (73 cents) in 2001.
Shares of FTI Consulting closed Friday on the New York Stock Exchange at $41.60, up 22 cents from six months earlier at $41.38. Markets were closed yesterday for Presidents Day.
The company's sales of lower operating divisions, such as its Applied Sciences unit, has been the main cost saver in the past year, said Adam Waldo, analyst at Lehman Brothers, who rated the company "neutral."
Mayank Tandon, analyst with Janney Montgomery Scott, said that he expected the company to continue the same profit growth it has shown in the last year.
"The late '90s was a time of overspending, and it's going to take a while to clean that business environment up, making FTI Consulting's services very appealing right now," said Mr. Tandon, who advised investors to buy company stock. "It makes sense, because they're outperforming a stagnant market."

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