Good day, everyone, and welcome to the FTI Consulting Third Quarter 2017 Earnings Conference Call. As a reminder, today's call is being recorded. And now for opening remarks and introductions, I'll turn the call over to Molly Hawkes, Managing Director of Investor Relations at FTI Consulting. Please go ahead, ma'am.
Thank you and good morning. Welcome to the FTI Consulting conference call to discuss the company's third quarter of 2017 earnings results as reported this morning. Management will begin with formal remarks. After which we'll 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 trends, and other information or other matters that are not historical, including statements regarding estimates 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 review the Safe Harbor statement in the earnings press release issued this morning. 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 Form 10Q for the third quarter ended September 30, 2017, and in our other filings filed 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 earning call, and we 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, adjusted segment EBITDA, margin and free cash flow. For a discussion of these and other non GAAP financial measures, as well as our reconciliation of non GAAP financial measures, To the most directly comparable GAAP measures, investors should review the press release and the accompanying financial table that we issued this morning, which include 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 third quarter of 2017 results. Of note, during today's prepared remarks, management will not speak directly to the quarterly earnings presentation posted to the Investor Relations website.
To ensure our disclosures are consistent, these slides provide the same details as they have historically. And as I said, are available on the Investor Relations section of our website. With these formalities out of the way, I'm joined today by Steve Gumby, our President and Chief Executive Officer and Ajay Sabervlall, our Chief Financial Officer. At this time, I'll turn the call over to our President and Chief Executive Officer, Steve Duncan.
Thank you, Molly, and thank you all for joining us this morning. Let me say a few words upfront about the quarter, then turn it over to Ajay, who will take you through the details of the quarter and the outlook for the remainder of the year. And then as usual, the 2 of us look forward to answering your questions. As I'm sure many of you saw in this morning's press release, This was a terrific quarter. We reported GAAP and adjusted earnings per and $0.83, respectively, for this quarter, which in turn, respectively, were up 64%, and 60% year over year compared to the 2nd quarter adjusted earnings per share more than doubled.
Another way to say that is that this quarter ties for the best quarter we've ever had and adjusted EPS. As most of prior two quarters adjusted EPS combined. So given the situation of a very strong quarter following a couple of poor quarters, We thought, rather than me review the quarter, we'll let Ajay do that. It might be useful for me to share a perspective, a perspective on how we look at quarters like this. In particular, what parts of these quarters feel to us like noise or anomalies versus what parts feel like salient indicators of underlying strength of the company.
It's a topic that I think a lot about and the thought here was that some of you might find engaging those topics worthwhile. One way to get into the topic is to reflect on how we are thinking about the results today versus how we were thinking about the results 6 quarters ago, which was the quarter that was essentially equivalent or what we were thinking 5 quarters ago after the outstanding first half of the year. And talk about how we view the results today, similarly to then, but also how we look at it differently from then. In the early part of 'sixteen, as you mentioned, we had a great quarter and a record first half. As many of you recall, we then underscored substantial caution in extrapolating from those strong results and we forecasted a substantial slowdown for the ensuing quarters.
And why was that? And importantly, how similar is that to today? And importantly, how might that be different? Part of the basis for the the tax adjustments or an exchange, whether you won or lost the random big job, there's all those factors. Now over any extended period of time, the factors tend to even out in bad quarters like we had at the beginning of the year, we often have a confluence of bad noise.
And conversely, in good quarters, the opposite. We have a confluence of good noise. As we talked about earlier in the year, in bad quarters, we see it as critical not to overreact to the noise, not to take actions that will hurt the business. And similarly in good quarters, we feel it's important to isolate that out and not get overly exuberant. So this noise observation was part of the caution we talked about in the early part of 'sixteen, and it is caution we would reiterate today.
Just as in our view, no one should have taken the first half of this year and multiplied it by 2. We urged an early sixteen not to take the great first half then and multiply that by 2 or take the great first quarter of 2016 and multiply it by 4 and we narrowed your consistent theme today. You just can't take a great quarter and simply multiply it by 4. And I believe you shouldn't take a bad one and do that either. So that's cautions for some other reasons as well, reasons which related to concerns about the underlying strength of the business, and that is where I think we might differ in interpretation today.
In the early part of 'sixteen, you may recall, we noted we had 2 businesses, Econ And Corporate Penn that were in the middle of many booms, that suggested they might be outperforming their near term potential. And econ, as you'll recall, was due to spike in M and A related revenues that we thought was fabulous, but probably not sustainable. And in Corp Fin, the outperformance was because of the mini boom, driven in part by the huge drop in oil and mineral prices, which we didn't think could last forever. So part of the caution then was not just from adjusting for noise, but also because we perceived 2 businesses, we're being supported by many booms that were not sustainable. And at the same We talked about major efforts underway to turn them around, but at that point, we didn't have full pathways mapped out for either of those turnarounds.
In particular, as you recall, tech was working on, but not had not yet launched fundamentally new strategies to halt a multi center multi quarter set of double digit top line and bottom line declines. And though parts of FLC had taken steps to improve a number of key elements of the business, FLC as a whole had exited 2015 with a 29% year over year decline in adjusted segment EBITDA. And was ultimately in the middle Our caution in the early part of 2016, our caution was a combination. A combination of caution due to the beneficial noise, but also caution due to what we believe were some salient indicators that the underlying strength of these businesses was not yet as strong. As those order and half year results even adjusted for the noise would have suggested.
So we had multiple bases for that caution, and we transmitted that. Today, what I see is similar is the first part, the noise part. But important, not so much the second part. There's always noise in this business and Ajay will tell you some of the results are to some positive events in this quarter. We made up some of the success fees that didn't quite manifest themselves early in the year.
There's some positive adjustments in our effective tax rates, etcetera. And those are the sorts of random events that in this quarter unlike the last two cut in our favor on average. In that sense, this quarter is similar to 6 quarters ago. To me, more significant. Particularly in terms of my conviction about where this company is heading is the rest of the caution from early 'sixteen doesn't apply anywhere near the level we talked about then.
Once one normalizes for success fees and tax benefits, At this point, we have none. In fact, in this quarter, one of our great businesses econ substantially underperformed what we believe is its potential because of some weaker market conditions. This absence of substantial over performance or mini booms benefiting the business to me is a pretty salient difference of where we were in early in 'sixteen. And the other salient difference is that we've made real progress in FLC And Tech. Competitive Realities, changing markets mean you can't rest on morals, we have to continue to challenge ourselves in every business every year.
But at this point, we have completed initial fundamental every segment. And importantly, we see no segment at this point that can't be a contributor to growth going forward. Said more positively, we see every segment as a potential major contributor to growth going forward. Tying these thoughts and observations back to the quarter. Briefly, I've already talked briefly about econ, and Ajay will talk a
little bit more about Corporate
VIN, as you know, started the quarter slowly, started the year slowly, not the quarter, started the year slowly, not only because of the delays and success fees and some conflicts, but also because we swung and missed at a couple of key jobs. Mayor, the team has continued a winning streak that we started last quarter. We've had broad based wins in restructuring and up in success fees, underlying that is a business that is back on track, delivering on its substantial potential. The market is not booming, and we believe it will not boom until loose money comes to an end, but we have a great business here with fabulous professionals around the globe, a business that has shown it can be a major contributor, even in slow markets, and it showed that this quarter. I'm also pleased to say strat comms is back on track with a solid third quarter and a solid expected second half of the year.
Any business, no matter how good can have a weak couple of quarters. But the team here has shown over the last several years that they have cremated a fundamentally stronger Stratcom's business. And in this quarter, that underlying reality, we asserted itself. RAPS as interesting are the 2 businesses that had underperformed for a while, FLC And Tech. The teams there have done enormous work to go those ships headed in the right direction.
FLC, you may have noted this morning, reported the highest adjusted segment EBITDA since mid-twenty 14. That was due in part to the cost actions we talked about earlier in the year, but at least as important also do some real success and growth, whether that was in construction solutions, in our data analytics business, in our cyber security business, or elsewhere. And though we haven't yet turned tech back into a growth business, the team has stabilized the earnings. While at the same Let me conclude these meetings and let Ajay go through the details of the quarter. So this quarter, and 6 quarters ago benefited from the impact of positive noise.
But this quarter feels fundamentally stronger to us. This quarter's results were driven without any business outperforming our perception of its medium term potential. Without any discernible market booms temporarily benefiting any business. And though we always have improvements to make in every segment, without any business in the position akin to where tech and FLC were 6 quarters ago. Those distinctions to me are incredibly important.
They underscore a core belief of mine, which is that for this company as a whole and its many parts, the best days are ahead of us. This is a conversation. I'm happy to start now but I look forward even more to continuing it with you with the entire management team at Investor Day a few weeks from now on November 13th in New York City. I'm very much hoping most of you can make it. With that, Ajay, let me turn it over to you to give more details of the quarter and then you and I will come back and answer some questions.
Thank you, Steve. Good morning, everybody. I will begin by summarizing our quarterly results. Then I will review quarter over quarter and certain sequential quarter results at the segment level and key cash flow and balance sheet items. Before my concluding remarks, I will provide financial guidance for the remainder of the year.
At a high level we had a very Collectively, we benefited from our 2nd quarter actions to reduce costs. Our adjusted EBITDA increased both year over year and sequentially by and our reduction in enabled us to buy back $52,700,000 while reducing debt by $20,000,000 and increasing cash on hand by $19,500,000 on a sequential basis. I am very pleased with these $8.5 and adjusted EPS of $0.83 compared to GAAP EPS and adjusted EPS of $0.52 in the prior year quarter. Revenues of $449,000,000 were up $10,900,000 or 2.5 percent compared to revenues of $438,000,000 was not a significant factor this quarter. Gross profit increased $9.8 as gross margin improved to 34.3 percent due to higher revenues and improved utilization.
You will notice quarter, we onboarded 152 entry level professionals from university campuses. These hires were almost entirely offset by the reductions in billable headcount announced in the second quarter and normal course attrition. SG and A decreased $2,300,000 versus the third quarter of 2016 primarily from lower staff related and overhead expenses which was partially offset by higher bad debt expenses. As you may have noticed, we had a 10 percentage point reduction in our effective income tax rate this quarter. From 32.2% in the prior year quarter to 22.2% this quarter.
As you know, we operate in many countries around the world with different tax rates. The effective tax rate is based on our forecast of full year earnings from all the countries in which we operate. Based on the year to date results and our Q4 forecast, the percentage of our full year profit, full year's profits coming from lower tax jurisdictions has increased This had a significant positive impact on the impact of earnings from favorable adjustments related to foreign valuation allowances and other discrete items as further described in our 10 Q. We expect our Q4 3rd quarter net income of $32,200,000 increased 48.5% compared to 21 $700,000 in the prior year quarter. In corporate finance and restructuring, revenues increased $17,500,000 or 15.8 percent to $128,100,000 in the quarter compared to $110,600,000 in the prior year quarter.
The increase in revenue was primarily due to increased demand globally and an $8,500,000 increase in success fees compared to the prior year quarter. The growth and restructuring included the impact of our July 1 acquisition of the CDG group. Adjusted segment EBITDA was $26,700,000 or 20.9 percent of revenues compared to $17,800,000 or 16.1 percent of revenues in the prior year quarter. The year over year increase in adjusted segment EBITDA was primarily due to
Hello, operator? Are we back in the conference? We just heard music for a moment.
Yes. I heard that music as well. I apologize for that. You are back in the conference now.
And was the conference interrupted for the music or was the conference interrupted in any other way? Did they miss any of Ajay's remarks?
No, they shouldn't have missed any of Ajay's remarks. It looks like that was just a momentary interruption. I apologize for that, but your lines are normalized now.
Okay. Thank you very much.
You're welcome.
So I was on the sequential improvement in corporate finance.
So you weren't going to sing along with the music? No. Okay.
Sequentially, this business delivered meaningful top and bottom line improvements compared to the second quarter of 2017. As we saw continued strength As we said on our second quarter earnings call, we won significant and broad based engagements in our corporate finance and restructuring business in the second quarter of 2017. These assignments included company side work for Sears, Canada, and Adaptus Health among others in our restructuring practice We also had large transactions and business transformation engagements that included carve out and merger integration work for Entercom's CBS Radio and performance improvement and interim managements both for Ritza. In the third quarter, that momentum continued with some wins that have been publicly disclosed such as being engaged by the unsecured creditors committee for both Toys R Us and Seadrill among others. Turning to FLC, revenues increased $3,600,000 or 3.1 percent, to $118,600,000 in the quarter compared to $115,000,000 in the prior year quarter.
The increase in revenues was primarily due to higher and our Construction Solutions offerings. These results were partially offset by a $4,500,000 decline and success fees in our health solutions practice compared to the prior year quarter. Adjusted segment EBITDA was $22,500,000 or 19 percent of revenues compared to $16,600,000 or 14.4 percent of revenues in the prior year quarter. The increase in adjusted segment EBITDA was primarily due to higher revenues $7,200,000 and our adjusted segment EBITDA improved $9,500,000, reflecting the cost actions taken earlier this year. Looking forward, we by having more of the right people in the right places, we believe we are positioning ourselves for sustainable long term growth.
Our economic consulting business reported revenues of $111,800,000 in the quarter, down $10,700,000 or 8.8 percent compared to $122,500,000 in the prior year quarter. The decrease in revenues year over year was primarily due to lower demand for antitrust and financial economic services in North America. Adjusted segment EBITDA was $12,100,000 or 10.8 percent of revenues compared to $18,400,000 or 15 of revenues in the prior year quarter. The decrease in adjusted segment EBITDA was primarily due to lower revenues with lower utilization, which was partially offset by how our M and A related antitrust revenues declined sequentially. That trend continued into the 3rd quarter.
Perhaps as there continues to be uncertainty, created by a lack of clarity quarter are clearly not the steady state of business that we expect from economic consulting as the preeminent leader in antitrust globally, we believe the step down in revenues is market and timing driven. In technology, revenues decreased $1,800,000 or 4.1 percent to $42,300,000 in the quarter. Compared to $44,100,000 in the prior year quarter. By lower demand for by higher demand for consulting services. This shift was largely related to the wind downs of large cross border investigations which was partially 14.1 percent of revenues compared to $7,400,000 or 16.8 percent of revenues in the prior year quarter.
The decrease in adjusted segment EBITDA was due to a decline in higher margin hosting related revenues. Sequentially, although revenues declined 7.2 percent, adjusted segment EBITDA improved slightly. As I mentioned in the Q2 call, we are enhancing our product offerings in this segment. For example, recently, we announced our partnership to license the Relativity eDiscovery software, which opens us up to a broader market. And last quarter, I front investment in people, processes and systems, we believe this is the right path forward to renewed growth.
After a weaker than expected first half in strategic communications, which was largely due to the timing of projects our strategic communications business reported much improved results. Strategic Communications revenues increased $2,300,000, or 5.1 percent to $48,200,000 in the quarter compared to $45,800,000 in the prior year quarter. The increase in revenues was primarily driven by higher retained revenues, which was partially offset by lower pass through revenues. We also continue to generate meaningful project based revenues driven by higher demand for our financial communications and corporate reputation services. For the quarter, these contributions came not only from the UK, but also from outside the UK in key geographies like Germany and Brussels where we are poised to service our global relationships.
Adjusted segment EBITDA was 8,100,000 are 16.8 percent of segment revenues compared to $7,500,000 or 16.4 percent of segment revenues in the prior year quarter. The increase in adjusted segment EBITDA was due to the increase in revenues. Sequentially, revenues increased $2,000,000 and adjusted segment EBITDA increased $3,200,000 as we benefited from the cost actions taken during the second quarter of 2017. Let me now discuss key cash flow and balance sheet items. Net cash provided by operating activities $200,000 for the quarter compared to $70,900,000 for the prior year quarter.
The improvement in operating cash flow was due to higher During the quarter, we spent $52,700,000 to repurchase 1.6000000 shares of our common stock at an average price of $32.98 per share. As of September 30, 2017, approximately $26,100,000 remained available under our $200,000,000 share repurchase authorization. We also had a cash outflow of $8,900,000 related to our purchase Turning to our guidance. To be between 1 $775,000,000 $1,800,000,000. This compares to the previous range of between $1,775,000,000 $1,875,000,000.
Guiding to the lower end of the previously provided range is primarily a reflection of the passage of three quarters with year to date revenues of $1,340,000,000 In addition, as a reminder, Q4 revenues can We are reaffirming our adjusted EPS guidance provided in April and GAAP EPS guidance provided in July. To reiterate, we expect 2017 adjusted EPS will range 17 to range between $1.37 $1.67. Before I open the call for your questions, I would like to reiterate several key themes. First, we believe our Q3 results demonstrate that we have leading businesses and practitioners that are well positioned to win in to improve performance by on discipline cost controls. 3rd, where we believe we have the right to win, including in adjacent sub practices, we have not shied away from adding hires we have made to enhance our cybersecurity practice among others.
4th, organic growth with higher utilization cost management and selective tuck in acquisitions are not mutually exclusive with share repurchases given the magnitude of the free cash flow we generate. Bought back $52,700,000 of stock and reduced net debt by $39,500,000 in the quarter. Finally, we delivered solid results this quarter, even though the key macro drivers of our business restructuring M and A and disputes are nowhere near their peaks. For those reasons and more, I truly believe the best is yet to come for FTI. And look forward to discussing these core themes at our Investor Day next month.
With that, I will open the call for your questions. Thank
you. And we'll take our first question from Tobey Sommer with SunTrust. Please go ahead.
Thank you.
Steve, you expressed a kind of I think a distinct, optimistic viewpoint on the trajectory of frankly all the businesses. And I wanted to get a sense for at the top line what that translates to in terms of revenue growth rate, because the revenue increased about 2.5% in the quarter. Yet the optimism kind of seemed like it might describe something that's better than that. So could you you frame that for me? Thanks.
Yes. So, good question. Thanks, Toby. Nice to hear your voice. Look, we'll probably give you more detail segment by segment as the at the Investor Day on how we're viewing each of those segments going forward.
Let me maybe say, frame something different differently. I mean, Organic growth at this point within our company is still the combination of focusing on places where we see great opportunities to grow and invest and then opportunities where we are, pruning because they aren't performing to what we think or because we don't see the future of those. And so therefore, if you do that right, you have substantial top line growth in the places where you bet right, but you can have, flat or declining revenue in some of the other places that you've been cutting back. Clearly, we've been doing that over the past couple of years. And so you see this quarter a lot bigger growth in EBITDA than you do in top line growth.
That's not long term sustainable, but there some of that that is still going on in the company as we examine sub position by sub position around the globe and make decisions to triple the bets some one place or another and improve others. The other thing is some places where you're tripling the bets, you don't actually get an immediate kick in revenue. You're hiring a bunch of people and, they have non competes or they have to get integrated into the team. So the revenue defers. Long term, obviously, you'd expect a pretty close correlation.
And I think we would expect those things to get closer over time. But I think this year, we've been still working through some of that rotation process. Does that make sense, Tobey?
Yes, it does. And I wanted to ask you a question on the technology segment, kind of business evolution or transition. How do you feel that that is going? And when might financial performance, either revenue growth or margins begin to kind of reflect those changes in the implementation of the strategy.
Yes, thanks. Look, I think the teams there have done a fabulous job. If you look at this, we were probably slow to do a fundamental re look at that business. Profits, you know, better than I Tobey, they typically were in the $65,000,000 range for a number of years, right? And then over relatively brief period of time.
They went from $65,000,000 to $25,000,000. Thereabouts. Ajay, you can correct me if it's a little bit off, but that's roughly where it was last year. We put new management in there. We have a new strategy set of strategies.
This year is essentially the same. EBITDA year to date, pretty plus and minus the teeny bit, I would guess, as last year. To me, that's a huge step forward in terms of stabilizing the business. Particularly because they've been able to do that while spending serious money on things that are avenues for growth, whether salespeople and information governance or other adjacencies, whether that's licensing relativity or others. Would I like it to turn to growth yesterday?
Absolutely. I think we only actually announced the license of relativity when was that month or 2 months ago. August, August. I'm impatient, probably not as impatient as you told me, but actually probably pretty close. I just think they're doing a great job to kind of fabulous job of stabilizing it.
And obviously, we look forward over time for that to go back up.
Last question Miyage, does the guidance for EPS assume the remainder of the share repurchase gets executed in the fourth quarter?
So we are not, we're not giving specific, you know, timing of when we would repurchase shares as you can, you can do the math just additional, if you're going to complete the additional 20 5 odd 1,000,000 that is left, it doesn't make that much of a difference to EPS in 1 quarter.
Thanks Toby. Are you still there? We had a glitch on the system. Operator, are we still on?
Yes, we are still connected. We can take our next question over the lines from Tim McHugh with William Blair. Please go ahead, sir.
Hello. Good morning, Tim. At some point, I need to talk to you about the Cubs beating the nationals, but we can defer that to another time, right?
Yes, it didn't work out so well for them anyway. So, just, question first maybe on the corporate finance and restructuring business. And I apologize if you said this because I joined late, but Can you talk about the, I guess, one kind of the breadth of improvement there? I know you called out a few large cases and success fees, I guess, but how much is it driven, I guess, how broad was it on the restructuring side? And second, Lee, I guess, how was the non distressed kind of performance relative to what you'd been seeing?
You want to
take that?
Sure. Tobey did it really, really, we did really, really well on the corporate finance and restructuring side. Virtually every area, did better sequentially and year over year. Certainly, the success fees helped. But it is broad based.
It is global, really delighted by that uptake. And what's what's key for me is that it's happening when there is no boom in restructuring. I mean, this is at low interest rates. I imagine what this platform will achieve then interest rates go up.
Okay. Fair enough. The success fees, can you I think you had talked in the past about a range. Is it still within that range? Or
I don't know what to
say. Yes.
And there was and the aggregate for the company, there was a big increase in success fee in corporate finance, but when we're there was a very large decrease in health solutions within FLC because they had a great success in Q3 last year. Overall though, if the range, if the average is around $7,000,000 to $8,000,000 and lows are around 3 and highs are around 14, right now, this quarter was at the highs and Q1 was at the lows. So, I'm not begrudging ourselves to successfully. I'm delighted to take it. But you can normalize it over the 3 quarters.
Okay. And the e comm business, I imagine you responses you've retained kind of the top end professionals, but just kind of how do you get comfort, I guess, that the recent weaknesses is market driven and not anything kind of above market share, if you will, or company specific? Kind of performance?
So let me answer that. We have retained our there's no loss of people. So that's not that's not the base. We haven't lost any key people in that organization. Think Ajay, you'd pull them.
I think there's a belief from the organization is that we haven't lost market share. We don't have any hard data on that. And sometimes, the stuff can be 1 or 2 big cases and timing of big cases that can affect things. At this point, we have no basis to believe it was loss of market share. I think we're generally recognized as the leaders in this industry.
Now leaders in the industry could have missed something, and we could have missed the case or 2 that we don't know about. But Our current belief is that this is not a that certainly there's no belief that there's anything systematic or systemic here going on. And so we would expect over time this to come back to a more historical range.
Okay. And then one last one, I guess, maybe a little higher level, I guess, but you talked about you've seen these kind of ups and downs in the business. Strong first half weaker, you know, other half of the year. And obviously, this one's a little better. Do you have any, I guess, can you talk about what type of visibility or what factors, I guess, give you more confidence in predicting that this is now sustainable versus this just an up versus now will we see another down and in the future?
Yes, Tim. No, this is a great question. I'm just trying to understand when you intersected this call. Did you intersected during Ajay's remarks?
Yes. No, I heard your comments earlier. I guess so, I mean, I understand you recognize the volatility in your answers and kind of is the way I interpreted it. But
No, I
think it's more than that. I think there's more than that. The volatility, look, let me be clear. Don't think this business is that volatile over an extended period of time. If you look out 2 years, I look at the history of the company every 2 years where the company was up.
It was due to real fundamentals. Any 2 years, the company was down. It was due to real fundamentals that were negative. When you get down to a month, there's a huge amount of volatility. You get to a quarter, there's a lot of volatility.
Now where I spend a lot of time is when we get to quarter, that are down, looking through the volatility and trying to see what is underlying that we need to fix or celebrate and grow further because in a good quarter versus what is just the random noise. And I'm really insistent that we not react the random noise, either get over exuberant about it on a positive ones or take bad actions that hurt the business than the negative ones. And that's what we spend a lot of time doing. I think, I don't know if you heard this part of the call. I think there's a huge distinction, for example, between where we are now and where we are in the early part of 2016.
Early part of 'sixteen, we had positive noise, here we had positive noise. In normalized for the noise, in the early part of 'sixteen, we were guiding down for the rest of the year. Why we're guiding down for the rest of the year because we said that 2 businesses had little mini booms supporting them, which is not something we believe today. And we believe that, you know, couple of our businesses, we're in the midst of trying to confront fundamental more long term decline. Whether that was FLC or tech at that point in early 2016.
We don't believe that now. To Toby's question, we don't yet have tech on a growth trajectory but we're not in the midst of a, of plummeting from $65,000,000 to $25,000,000. The high end is a pretty fundamental distinction of that. Now does that mean that a quarter can't be bad? This company always is going to have quarterly volatility.
But I believe actually we've been the management team has been working hard. We have the collective businesses in a quality position that I haven't seen during my tenure here. And I'm pretty optimistic about the underlying businesses going forward. Does that help?
I appreciate the comment. And
it appears there are no further questions at this time. I'd like to turn the conference back over to our speakers for any additional or closing remarks.
Well, maybe just echo what I just said here unless you want to say anything. So look, this is a great quarter. It was after a couple of tough quarters, but I think we're not that we don't get that excited just by the quarterly numbers because of the variability stuff we say. What we are most excited about is the actions our people have taken to put our businesses into stronger positions going forward, positions that can create value for our shareholders, real opportunity for our people. And we're excited about where all of our businesses have been put over the last quarters and a couple of years.
We hope that came across today, and we look forward to sharing more of that with you in the Investor Day in a couple of weeks. Thanks very much for the call.
And this concludes today's conference. Thank you for your participation. You may now disconnect