Good morning. Welcome to the FTI Consulting First Quarter 2021 Earnings Conference Call. I would now like to turn the conference to Mollie Hawkes, Vice President of Investor Relations. Please proceed.

Good morning. Welcome to the FTI Consulting conference call to discuss the company's first quarter 2021 earnings results as reported this morning. Management will begin with formal remarks, after which they will take your questions. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934 that involve risks and uncertainties. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to financial performance, acquisitions, share repurchases, business spends and other information or other matters that are not historical, including statements regarding estimates of our future financial results and other matters. For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking statements, investors should review the safe harbor statement in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com, as well as other disclosures under the heading of Risk Factors and Forward-Looking Information in our annual report on Form 10-K for the year ended December 31, 2020, and in our other filings with the SEC. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this earnings call and will not be updated. During the call, we will discuss certain non-GAAP financial measures such as total segment operating income, adjusted EBITDA, total adjusted segment EBITDA, adjusted earnings per diluted share, adjusted net income, adjusted EBITDA margin and free cash flow. For a discussion of these and other non-GAAP financial measures as well as our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures, investors should review the press release and the accompanying financial tables that we issued this morning, which includes the reconciliations. Lastly, there are two items that have been posted to the Investor Relations section of our website this morning for your reference. These include a quarterly earnings presentation and an Excel and PDF of our historical financial and operating data, which have been updated to include our first quarter 2021 results. Of note, during today's prepared remarks, management will not speak directly to the quarterly earnings presentation posted to the Investor Relations section of our website. To ensure our disclosures are consistent, these slides provide the same details as they have historically, and as I have said, are available on the Investor Relations section of our website. With these formalities out of the way, I'm joined today by Steven Gunby, our President and Chief Executive Officer; and Ajay Sabherwal, our Chief Financial Officer. At this time, I will turn the call over to President and Chief Executive Officer, Steve Gunby.

Thank you, Mollie. I was just checking to make sure I was off mute for a change. Good morning to everyone, and thank you all for joining us. Let me start with a couple of words on COVID, even though I'm sure all of you, like I, are so sick of the topic and the issue. I hope everyone on this call continues to be well, and that all of us on this call are increasingly able to get vaccinated. For those of us in the U.S., I think we can sense at least the beginning of a change in mood. At least for me, it's wonderful to see the rollout of vaccines, and I don't know anybody who doesn't get incredibly excited when we see our friends or our family members getting vaccinated. And I think that's true for many of you as well and for many people in other parts of the world, particularly related to the U.K. I think on the other hand, most of us know the story is not as true everywhere around the world. When I talk to colleagues on the continent of Europe, the story feels somewhat aligned, but also somewhat different. There's a lot of frustration about the slowness of the rollout of the vaccine, and it feels very different. I felt very differently last week when I talked with colleagues in Latin America and some colleagues in India. If we look at the statistics, I think we see that globally total cases right now are actually at the highest levels we have ever seen. And of course, the rollout of the vaccine, though happening around the world, is happening at very different paces depending on where you sit. So the good news, I think, is that we can all, at this point, see a light; we can see that light at the end of the tunnel. And I'm so excited for those of us for whom that light feels close. I just want to also share that mine and my colleagues' hearts and thoughts are also with all of those folks within our firm and within yours for whom the light still feels further away. And I know that sentiment; I'm sure that resonates with many of you on this call. Let me turn to a brighter subject, which is our quarter, our results. I'm sure, as many of you saw in our press release, this quarter was a great quarter. It had some positive surprises in it and had some items that one can't count on recurring, which Ajay will talk about, but even normalized for those, it was a terrific quarter. I doubt very many people, 10 years ago or even a few years ago, would have thought that in a period where restructuring as an industry is down substantially and our restructuring business is well off the peak that we saw last year that we would produce a halfway decent quarter, let alone a quarter like this. So the quarter was spectacular. Let me, however, say something that we have discussed many times: quarters are fickle. Markets can fluctuate up and down. Big jobs can come and go. Cases can settle instantaneously. Investments to drive future growth, although critical for the future, can negatively impact quarters in the short term. The quarters, to me, as excited as you can be about a quarter, are, in fact, never good measures of performance for this company, good quarter or bad quarters. To me, what is much more powerful than this quarter or any quarterly results is the strength of the longer-term trajectory that we have been on and that I believe we are on as well as the reasons for that great trajectory. Compared to 10 years ago, forget the quarter, collectively we have managed to build a business that is much more powerful, much more global, much more diverse than it ever has been. And that's true for the company as a whole, but even within each segment. Today, for example, our Corporate Finance business, though it's more powerful in restructuring than it ever has been, is also much broader, much more powerful, with much breadth of experience and capabilities to serve our clients on a broader range of challenges and opportunities than ever. Yes, it's powerful in restructuring, but also in transactions, in the office of the CFO, and so many other services. And you can say the same for all of our business segments. The way we've gotten here is the basis for that with terrific teams, reinvesting in our core, reinvesting behind our good businesses but also looking where our clients have needs and broadening our business, both our offerings and our geographical footprint. Those actions and our collective commitment to bet behind great positions and great people really have changed the fundamental trajectory and resilience for this company. To me, we have shown over the past several years that if we do the right thing, if we commit to position our business in the right way, if we support great people for long-term sustainable growth, we can still have bad quarters for any extended period of time; we control our destiny. We control our destiny in a way that allows us to serve ever more our clients' most important needs across a wider range of circumstances, not just in restructuring, but in antitrust, major M&A, cybersecurity, SPACs, public affairs, global cross-border investigations, and it could go on. And that to me, that growth and capabilities of our people and that ability to extend our firm to innovate is far more exciting and a much more durable basis for excitement and success than any given quarter's results. So I'm not going to talk any more about the quarter; Ajay will. But let me close by taking a moment to thank and congratulate my colleagues for their efforts, for their conviction behind their businesses and recognize that the results of their conviction and their efforts, what those results have been for our clients, our shareholders, our communities and each other. I want to particularly thank our colleagues for the energy and perseverance that they have shown this past year, in our company, and I'm sure many of you on this call have experienced similar challenges for companies during COVID, and our firm did deliver. It's been so frustrating to see that the light is there at the end of the tunnel but see how slow it's been approaching in some places. The emotional fortitude that our people have shown during this period to keep our company moving, to keep connected with each other, to remain supportive of each other, dedicated to our clients, has been wonderful to see as the CEO but actually equally as much as just a human being. So I want to say in addition to congratulations, I want to express my pride in my colleagues and say thank you to each of you across the globe. With that, I'll turn it over to Ajay to take you through the quarter in more detail. Ajay?

Thank you, Steve. Good morning, everybody. In my prepared remarks, I will take you through our company-wide and segment results and discuss guidance for the full year. I'm delighted to report year-over-year double-digit revenue growth this quarter. On our last earnings call in February, we stated that strong M&A activity would favorably impact our Economic Consulting, Technology, and Strategic Communications segments, as well as our transactions business within our Corporate Finance and restructuring segment. Conversely, we had also expected weakness in demand for our restructuring services. Both trends occurred and were deeper than we anticipated. And in Forensic and Litigation Consulting, or FLC, the segment which was most impacted by COVID-19 in 2020, we expected continued gradual improvement. Instead, in the quarter, results rebounded faster than we anticipated as we were able to resume work on many matters where trials were rescheduled or resumed, particularly in North America. Obviously, we are very pleased with these results. The first quarter of 2021 revenues of $686.3 million were up $81.7 million or 13.5%. GAAP EPS of $1.84 compared to $1.49 in the prior year quarter. GAAP EPS included $2.3 million of non-cash interest expense related to our convertible notes, which decreased EPS by $0.05. Adjusted EPS of $1.89, which excludes the non-cash interest expense, compared to $1.53 in the prior year quarter. Net income of $64.5 million compared to $56.7 million in the prior year quarter. This increase was due to higher operating profits in our Economic Consulting, FLC, and Technology segments, which was partially offset by lower operating profits in Corporate Finance and Restructuring. SG&A of $126.5 million was 18.4% of revenues and compares to SG&A of $127 million or 21% of revenues in the first quarter of 2020. SG&A was flat year-over-year, primarily because lower travel and entertainment expenses offset higher costs related to the increase in non-billable headcount. Double-digit revenue growth and flat SG&A expenses more than offset higher billable headcount-related costs, resulting in first quarter 2021 adjusted EBITDA of $99.5 million, an increase of 19.5% compared to $83.2 million in the prior year quarter. Our first quarter 2021 effective tax rate of 23.9% compares to our tax rate of 22.5% in the first quarter of 2020. For the balance of 2021, we continue to expect our effective tax rate to be between 23% and 26%. Weighted average shares outstanding, or WASO, for Q1 was 35.1 million shares, which declined 3.1 million shares compared to 38.2 million shares in the first quarter of 2020. For the quarter, our convertible notes had a potential dilutive impact on EPS of approximately 450,000 shares in WASO, as our share price on average of $118.44 this past quarter was above the $101.38 conversion threshold. Billable headcount at the end of the quarter increased by 562 professionals or 12.3%. This increase is largely due to 34.9% billable headcount growth in corporate finance and restructuring, which includes both organic hiring and the addition of 151 billable professionals from the acquisition of Delta Partners in the third quarter of 2020. Sequentially, billable headcount increased by 75 professionals or 1.5%. Now turning to our performance at the segment level. In Corporate Finance and Restructuring, revenues of $226.2 million increased by $18.5 million or 8.9% compared to the prior year quarter. Acquisition-related revenues contributed $16 million in the quarter. Excluding acquisition-related revenues, the numbers were essentially flat, primarily because an increase in transaction-related revenues globally was offset by lower demand for restructuring services, particularly in North America. Adjusted segment EBITDA of $37.4 million or 16.6% of segment revenues compared to $48.9 million or 23.6% of segment revenues in the prior year quarter. The year-over-year decrease in adjusted segment EBITDA was due to flat revenues with a 34.9% increase in billable headcount and related compensation expenses and a 10-percentage point decline in utilization. Turning to Forensic and Litigation Consulting. Revenues of $150.8 million increased 2.2% compared to the prior year quarter. The increase in revenues was primarily due to higher demand for health solutions and investigation services, which was partially offset by a $4.1 million decline in pass-through revenues and lower realized pricing for our data and analytics services. Adjusted segment EBITDA of $29.4 million or 19.5% of segment revenues compared to $21.2 million or 14.4% of segment revenues in the prior year quarter. The increase in adjusted segment EBITDA was primarily due to higher revenues with higher utilization, coupled with a decline in SG&A expenses and direct costs, primarily related to the lower pass-through revenues. Sequentially, FLC revenues increased $23.6 million or 18.6%, and adjusted segment EBITDA improved by $21.8 million, reflecting increased demand across all of our core offerings, including previously backlogged work and a nine-percentage point increase in utilization. Our Economic Consulting segment reported record revenues. Revenues of $169.3 million were up 28.1% compared to the prior year quarter. The increase in revenues was due to higher demand for our non-M&A-related antitrust and M&A-related antitrust services, as well as higher realized pricing and demand for our international arbitration services. Adjusted segment EBITDA of $26.6 million or 15.7% of segment revenues compared to $12.7 million or 9.6% of segment revenues in the prior year quarter. The increase in adjusted segment EBITDA was due to higher revenues, which was partially offset by higher compensation related to an increase in variable compensation and a 9.9% increase in billable headcount. In Technology, we also had a record quarter. Revenues increased 35.3% to $79.5 million compared to the prior year quarter. The increase in revenues was due to a surge in demand for M&A-related second-request services. Adjusted segment EBITDA of $21.6 million or 27.2% of segment revenues compared to $14.5 million or 24.7% of segment revenues in the prior year quarter. The increase in adjusted segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation. Sequentially, Technology revenues increased $20.8 million or 35.5%, and adjusted segment EBITDA improved by $11.4 million, primarily due to a large second-request engagement. Strategic Communications revenues increased 3.7% to $60.5 million compared to the prior year quarter. During the quarter, we experienced increased demand for our public affairs services, which was offset by a $2 million decline in pass-through revenues. Adjusted segment EBITDA of $10.4 million or 17.2% of segment revenues compared to $8.8 million or 15% of segment revenues in the prior year quarter. The increase in adjusted segment EBITDA was primarily due to lower SG&A expenses. Let me now discuss a few key cash flow and balance sheet items. As is typical, we pay the bulk of our bonuses in the first quarter. Net cash used in operating activities was $166.6 million compared to $123.6 million in the prior year quarter. The year-over-year increase in net cash used in operating activities was largely due to an increase in salaries related to headcount growth and higher annual bonus payments, which were partially offset by an increase in cash collected. During the quarter, we spent $46.1 million to repurchase 421,725 shares at an average price per share of $109.37. As of the end of the quarter, approximately $167.1 million remained available for stock repurchases under our current stock repurchase authorization. Total debt net of cash was $252.8 million at March 31, 2021, compared to $143.2 million at March 31, 2020, and $21.3 million at December 31, 2020. The sequential increase was primarily due to $170 million of net borrowings under our bank revolving credit facility to fund cash used in operating activities, primarily for annual bonus payments. Turning to guidance. First, let me remind you of the guidance for 2021 we provided in February: Revenues of between $2.575 billion and $2.7 billion, EPS of between $5.60 and $6.30, and adjusted EPS of between $5.80 and $6.50. I believe, at this juncture, it is important that I share with you why we believe the exceptional strength we have demonstrated in Q1 may not necessarily repeat in subsequent quarters this year. First, we are, for the most part, a fixed-cost business, as people and real estate represent some of our largest expenditures. These costs are not variable in the short term. So small shifts in revenues have a much larger impact positively or negatively on EPS. Second, we are at our core a large job firm, and when matters end, they may not immediately be replaced. This quarter, for example, our results were boosted by several exceptionally large engagements that were driven by record levels of M&A activity that may not be sustained through the year. In Technology, for example, we had one engagement which concluded during the quarter that represented over 20% of total quarterly segment revenues. In Economic Consulting as well, we have several large engagements that are expected to conclude during the year. Even our restructuring revenue this quarter was boosted by revenue from large matters that began last year and have either now ended or will likely end this year. Meanwhile, credit markets remain in an accommodative mode, and hence, the number of stressed and distressed issues remain low. Moody's now expects the trailing 12-month speculative-grade global default rate to fall to 3.2% by the end of the year, down from a forecast of 6.8% they provided in December. And Fitch, which measures defaults by dollar volume, now expects a high-yield default rate for the U.S. of 2% by year-end. These forecasts point to lower demand for our restructuring services for at least the balance of this year. Third, this quarter, we were delighted by results in FLC, our business most negatively impacted by COVID in 2020. That being said, with the continued uncertainty of the pandemic and certain geographies experiencing third and fourth waves of infections, we remain cautious as we may be impacted in certain locations by COVID-19-related court closures and travel restrictions, which can impact our ability to serve our clients. Fourth, our non-billable travel and entertainment expenses are typically around 1.5% of revenue. At the moment, this expense is largely nonexistent, as travel and entertainment is severely curtailed in most geographies. Lastly, our fourth quarter is typically our weakest quarter with the holiday season and compensation true-ups at the end of the year. In 2020, our fourth quarter results were exceptional, in part because of the implementation of a cross-border tax strategy. The more rational expectation would be for a seasonally weaker Q4 as many of our practitioners take well-earned vacations. Now with all those risks considered, clearly, the great performance in Q1 gives us a very good head start for achieving our guidance. Once we have another quarter under our belt at the end of the second quarter, we will revisit guidance, as is typical to see if any changes are warranted. Before I close, I want to reiterate a few key themes that underscore the attractiveness of our business. First, we have demonstrated that we have a tremendous collection of businesses that make us a very resilient company. We are uniquely positioned to support our clients as they navigate their most complex business challenges regardless of business cycle. Second, more than ever, I am convinced that the key to our success is the strength of our people and their relationships, both of which are exceptionally strong. Third, our leadership team is focused on driving growth with strong staff utilization. And finally, our balance sheet is enviable, and we have demonstrated the ability to boost shareholder value through share buybacks, debt reduction, organic growth, and acquisitions. With that, let's open the call up for your questions.

We will take our first question from Marc Riddick at Sidoti & Company.

I wanted to go over a couple of things to understand what may have taken place during the quarter regarding the demand shifts you are experiencing. Were there any changes in headcount as you adjusted from one group to another to meet rising demand in some areas while dealing with falling demand in others? I have a few follow-up questions after that.

Yes, we haven't made any major changes to our staffing structure between segments. For instance, in Corporate Finance, about one-third of our employees focus on one area, another third on a different area, and the remaining third can switch between the two. This might not be exact, but last year we managed to shift some skilled individuals from non-restructuring roles to support our restructuring teams during a surge. This quarter, as restructuring activity slowed and certain transactions increased, we were able to move people back to those roles. Our business isn't uniform, so we can't transfer staff from Strategic Communications to Economic Consulting, but we can move individuals with the appropriate skills within segments, including between Forensic Litigation Consulting and Corporate Finance. Additionally, we're improving our ability to collaborate internationally, having created more partnerships between our teams in Australia, the U.K., and the U.S., which is easier now with Zoom. Does that answer your question, Marc?

Yes, it does. It relates to my next question about the geographic mix, considering the variations in demand and potential demand influenced by COVID. Additionally, I was wondering if there are any insights on the timing of success fees during the quarter. I appreciate the details on the large engagements and how they impact our guidance. I'm curious about how success fees compare to our expectations or last year.

Success fees were actually at the lower end of what we typically expect. Usually, it's at the lows around three and high around 15 a quarter. This quarter, it was just north of three.

The next question is from Andrew Nicholas from William Blair. Success fees were actually at the lower end of what we typically expect. Usually, it's at the lows around three and high around 15 a quarter. This quarter, it was just north of three.

Your family are all okay? Everyone is doing well, and we are moving into summer weather, which makes me optimistic. Thank you for your question. I would like you to elaborate a bit more on your prepared remarks regarding FLC, which exceeded both your and my expectations. Could you discuss the main factors driving this performance and the overall demand environment and pipeline, especially in comparison to the fourth quarter, where you've already noted some improvements? That would be very helpful.

We're very pleased with our performance. Our utilization this quarter exceeded what we saw in the first quarter of last year. In that period, aside from late March in Asia, the pandemic had little impact. We achieved $29 million in EBITDA utilization above last year; we anticipated a gradual improvement, which is already occurring. That's the key takeaway we want to share. There may be one or two regions or sub-practices where there's still room for growth. However, we are actively working to improve. We're witnessing a recovery in our backlog, and we've also secured significant wins in certain sectors, such as SPACs. This level we are currently at is impressive and represents a significant milestone for us.

Yes. I would add that we have always had confidence in this business. Some areas of our Economic Consulting business were exceptionally slow last year, but we believed they would recover. What you are witnessing this quarter is part of that recovery, which has occurred more quickly than anticipated. Factors contributing to this include progress on backlog cases and the SPAC boom, which led to significant cases this quarter that pleasantly surprised us. The foundation of this recovery is the return to our strong business roots. Additionally, I want to emphasize that our 30-something percent utilization last year was not normal. I'm proud of our team for persevering through that period. Does that help, Andrew?

Yes. No, that is helpful. And then I'm going to ask a follow-up. It might be a difficult question to answer. I think it's been asked a variety of different ways in the past. But we've seen record M&A levels here to start the year. Certainly seems from my perspective, the momentum has continued here into the start of the second quarter. So just a multipart question on M&A. I guess first, to the extent Q1 results outperformed your own expectations, which it sounds like they did, is there any way to quantify how much of that outperformance is tied to better-than-expected M&A or transaction volumes? And then second, if you could speak to how you're envisioning that part of your business or those parts of your businesses performing through the end of the year? I know you didn't do anything with guidance, but trying to figure out what's baked in at current numbers?

Andrew, Q1 was the highest, I think it might even be quarterly, if not first quarterly M&A by dollar volume in history for the world, I think $1.16 trillion. Not only was it at the highest, but also in our sweet spot, which is the big M&A. There was much higher percentage of big M&A versus small M&A because we play in the antitrust or merger, the bigger M&A as it were. We also play in cross-border. It was much more of that. So just like we had an epic tailwind in restructuring in the second quarter of last year, this was an epic tailwind in M&A. We can't predict how long it will last. It could last longer. We're just saying we don't know whether it will last through this year, and we are cautioning that this was an epic tailwind. Did we benefit from it? Absolutely. In Corporate Finance and I'll go segment by segment; in Corporate Finance and Restructuring, transaction-related business is typically 15%, 20% of revenue. I mean 20% would be a great outcome, similarly around 15%. Here, we're approaching 25%, 30% of the revenues in that segment. In Technology, we play in the second-request area, and we had one case, which was a M&A-driven case, which contributed just over 20% of the quarter's revenues, but in several other cases too. So clearly, that sort of thing is not the norm. One case typically doesn't make up 20% of our revenue, and that case has ended. So those are those two Economic Consulting cases. Clearly, we are the number one firm in the world on antitrust cases, without a doubt. There are some very large cases, both M&A and non-M&A antitrust that we are working with that we expect will end this year. Now will there be six other cases that will replace those? I can't tell.

The next question comes from Tobey Sommer from Truist Securities.

Could you provide some insight on the strong capital markets? Are there aspects you believe may not last, particularly regarding the impact of SPACs given the growing regulatory scrutiny? I'm also curious if these may affect future IPO activity.

I’m not sure if they are borrowing from future year IPOs. People are discussing that topic. As everyone on the call is aware, SPACs are a means for private companies to go public. So, it's reasonable to conclude that this represents an effective IPO. Our Strategic Communications business has certainly been influenced by IPOs, among others. The broader issue is that SPAC activity led to an increase in demand for our services, which it definitely did. A significant concern with SPACs is that when they acquire a private company, that company is often unprepared to be public. They frequently lack proper SEC compliance and necessary financial capabilities, suddenly becoming a public entity. This creates heightened demand for assistance, sometimes to help them meet SEC deadlines after going public and often prior to the transaction to ensure they are SEC-ready. This surge in demand positively impacted both FLC and CF this quarter due to our expertise in this area. Does that address your question, Tobey?

You mentioned court-related activity. How would you describe the rebound? Is there still more normalization needed to return to pre-COVID court-related business? Additionally, could you share if you've heard from customers about cases settling during the pandemic, or is it more of a backlog that has built up?

So there is a backlog that is getting addressed now is the point. Not all of it is in person, but the world has found its way around. There are trials in Texas in person. There are trials elsewhere in person, but there are also trials taking place not in person. So to the extent that your question is, is everything absolutely normal, they're not in person as it were, that's what I think would be absolutely normal as it were. But in terms of activity, they are. We are both in FLC and importantly in our international arbitration business within Economic Consulting where we had weakness prior in both those areas, the levels of activity are back. Those folks are busy. They are very busy, in fact.

That's helpful. I'll ask a long-term question. Over five years or some long-term view, you can pick a different time frame, if you like, what percent of sales do you expect the company to derive from EMEA? And I'm curious even stepping out just from that geography, what are the margin implications of a mix shift favoring the international side of your business?

So Ajay can correct me if I'm wrong on the margin point. Let me address that first and then talk to the broader question. I don’t consider expansion overseas to be inherently worse or better than expansion in the U.S. in terms of margin. I don't think that expanding internationally will guarantee improved margins. When you invest for growth, you can often incur losses when entering a new business area or country. However, our experience over the last five years in EMEA has been positive, with actual margin improvements. Therefore, I don’t see international expansion as inherently dilutive. In terms of growth expectations, what we've accomplished overseas is impressive. I believe we shared our revenue numbers for EMEA, although we didn't disclose EBITDA numbers. However, I would be surprised if our revenue isn’t around three times what it was when I joined. That’s remarkable. My aspirations, and I know our European team shares them, reflect that this is just the beginning. We initially identified as an EMEA business, but we were primarily a U.K.-based business in London, limited in our capabilities. Now, we are increasingly becoming an EMEA business, although we still have a long way to go in establishing a stronger presence on the continent. We have made progress and have strong teams in continental Europe, South Africa, and the Middle East. We are just starting to tap into the potential, but we are doing so effectively. There is significant growth potential in EMEA and Asia. We have the best position we've ever had in Australia and the strongest team we've ever had in Latin America. However, one of the most crucial changes that have positively influenced our trajectory was the return of growth in the U.S. For a long time, the U.S. was stagnant, not growing organically. Now, we have a group of leaders who recognize the vast opportunities for growth in the U.S. We've successfully restructured our U.S. business, which has historically been our strongest segment. With leaders who support ambitious growth, we’re investing in both our core and adjacent markets. I don’t have favorites when it comes to growth regions; I'm focused on where there are teams with ambition and solid plans supporting them. So far, we’ve been able to grow in various locations. Ajay, didn’t every region experience growth this quarter? That’s not always the case each quarter, but over time, we've performed fairly well across many regions. That was a long response. Did I answer your question, Tobey?

It did. Within Corporate Finance & Restructuring, could you describe the growth or change in revenue in bankruptcy versus non-bankruptcy work? Because you do have two pieces that are significant that kind of should be moving perhaps in opposite direction.

Last year in Q2, restructuring accounted for almost 70% of our revenue, and possibly even more in Corporate Finance & Restructuring. Now, that figure is below 50%. I should mention that we still have ongoing cases from previous periods, particularly larger cases that take time to resolve. The key point I want to highlight is that the number of new cases is declining—not that we are losing market share, but simply that there are fewer defaults.

Do you have an update for us on the international moratorium and when those are poised to lapse and perhaps start contributing a little bit more?

Right. So that could be the other side of it as if moratoriums are lifted in the U.K. and Australia and Germany, other places on insolvency, and those haven't yet lifted. They're lifted in Australia in parts; they have lifted. Some aspects have been eased up. So certainly, that could. But companies have also strengthened, and liquidity is available. So just lifting the moratorium is not necessarily going to result in bankruptcy, just to note. So that's the update. Did I answer the question? Or was there a second part to it?

That was it. My last question is within FLC; could you describe what is driving the demand for health care solutions?

In the U.S., it's the U.S. Those teams have done a great job in those hospitals, and that work is opening up again. So that's part of it.

I want to expand on that. Yes, hospitals are indeed starting to bounce back. I'm particularly pleased because we managed to make progress during what I believe was one of the most challenging quarters in the company’s history. During that time, we invested and significantly increased our sales and distribution count by 60% to 70%. Some of this improvement is due to the market recovering, but a lot of credit goes to our team for having the conviction to advocate for investment during a difficult time, and we followed through on that. While the market is a factor, I must say that Charles and the team deserve recognition for their efforts. I’m excited about their contributions to the business. This brings me to the restructuring topic. I want to emphasize what Ajay mentioned. Although you can see the external rates and decreasing expectations for restructuring, we might experience some job reductions and a decline in our restructuring business due to the fixed nature of our operations. However, I want to reiterate that it is a strong business, and we will keep supporting it. In fact, I would encourage the team in this sector to seize any opportunity to attract talent, as we’re committed to this business for the long term. Over the years, we’ve enhanced this excellent business, making it better in the U.S. and more global. We are determined to invest in it, and while we may face challenging quarters, this segment will fortify the company’s future. Just as we did in health solutions last year and in certain areas of FLC, if we get the chance in restructuring this year—even if it’s not strong—we will pursue it. I believe I’ve addressed your question, Tobey.

You did, but you prompted another one. Was that a group lift-out? Or did you just hire sort of broadly from a lot of sources to get that level of increase?

The second. The team did the work to find great talent and attract them. I think it was one by one. I don't think there were any payers, if I remember right, but it was one by one, people talking to great people and saying where we were trying to take the business and attracting them. Really nice return.

The next question is from the line of Marc Riddick from Sidoti & Company.

I realized earlier that I forgot to ask if you could provide some commentary on the acquisition pipeline and what that looks like, both domestically and internationally.

So Marc, everyone has insights similar to consultants. There are plenty of acquisition opportunities available. However, we are very selective; we won't make purchases just for the sake of it. It needs to align with our specific criteria, and we maintain high standards for what qualifies as a good opportunity. Nevertheless, there are many prospects out there.

Marc, anything else?

Sorry, I was still muted. My apologies there. I was sort of curious as to maybe what you're seeing as far as those valuations, maybe what they look like? Have they changed much? Are we seeing better opportunities abroad? Or is it similar to what we've seen over the last few quarters?

I believe there are a couple of key issues to consider. I receive acquisition solicitations almost daily, as there are numerous opportunities available. However, we have two main criteria that guide our decision-making. The first and most crucial factor is that we are not looking to make acquisitions solely to boost our quarterly or annual earnings. We want partners who are motivated and excited to join us for the long term, and who will nurture their successors to become valuable team members. Our focus is on finding long-term partners, similar to our approach with lateral hires or in developing talent internally. This raises the bar, as we need to ensure compatibility and a shared vision, which isn’t typically highlighted in the brief summaries provided by investment bankers. The second issue you mentioned relates to pricing. In general, valuations have significantly inflated lately, and I’m not sure we’ve participated in any formal auctions for acquisitions. Typically, we don’t pay top market prices. We have successfully engaged terrific individuals when there’s been a strong fit, allowing them to envision a promising future with us and fostering a shared enthusiasm for building something great together. That has been the foundation of all our acquisitions so far. I certainly hope for a day when valuations decrease, which would simplify our criteria, but for now, we are considering both factors actively. Does that answer your question?

Yes. Absolutely.

Another question?

No, sir, nobody in the queue now. That was the last one.

So let me just say thank you all for your continued attention and support to our company through COVID, through all the struggles and stresses you've been working through. I very much wish all of you good luck in getting access to the vaccines and getting out to the other side of this. Thank you, again.

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