[October 25, 2016] |
|
Navigant Reports Third Quarter 2016 Financial Results
Navigant (NYSE: NCI) today announced financial results for the third
quarter ended September 30, 2016.
Financial Summary and Highlights:
-
Third quarter 2016 revenues before reimbursements (RBR) increased 13%,
with 10% organic growth, over third quarter 2015
-
Third quarter 2016 net income was $17.2 million, or $0.35 per share,
compared to $14.2 million, or $0.29 per share, in third quarter 2015
-
Third quarter 2016 adjusted earnings per share (EPS) of $0.37, up 23%
compared to third quarter 2015
-
Third quarter 2016 adjusted EBITDA of $39.8 million, up 26% over third
quarter 2015
-
Raises 2016 revenue and earnings guidance
Navigant reported third quarter 2016 RBR of $237.1 million, a 13%
increase (10% organic growth), compared to $209.6 million for third
quarter 2015. Total revenues increased 14% to $261.4 million for third
quarter 2016 compared to $230.3 million for third quarter 2015. Net
income for third quarter 2016 was $17.2 million, or $0.35 per share,
compared to $14.2 million, or $0.29 per share, in the prior year third
quarter. Adjusted EPS was $0.37 for third quarter 2016, up 23% compared
to third quarter 2015. Third quarter 2016 adjusted EBITDA was $39.8
million, a 26% increase, compared to $31.6 million for the same period
in 2015. Adjusted EBITDA margin (adjusted EBITDA as a percent of RBR)
for third quarter 2016 increased to 16.8% compared to 15.1% in third
quarter 2015.
"Our third quarter results reflect continued strong performance
delivering double-digit organic growth and improved profitability,"
commented Julie Howard, Chairman and Chief Executive Officer. "I am
truly pleased that the consistent execution of our strategy in
combination with a robust demand environment is bearing fruit for our
stakeholders. We currently are on track to meet or exceed our
expectations for the full year 2016. Looking ahead, we hope to build on
the momentum we have experienced to date in 2016 and enter 2017 on a
strong note."
Segment Financial Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
|
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
RBR ($000)
|
|
|
|
|
|
|
Healthcare
|
|
$
|
91,046
|
|
|
$
|
74,500
|
|
|
22.2
|
%
|
Energy
|
|
|
28,436
|
|
|
|
26,733
|
|
|
6.4
|
%
|
Financial Services Advisory and Compliance
|
|
|
40,265
|
|
|
|
28,302
|
|
|
42.3
|
%
|
Disputes, Forensics & Legal Technology
|
|
|
77,368
|
|
|
|
80,099
|
|
|
-3.4
|
%
|
Total Company
|
|
$
|
237,115
|
|
|
$
|
209,634
|
|
|
13.1
|
%
|
Total Revenues ($000)
|
|
|
|
|
|
|
Healthcare
|
|
$
|
100,033
|
|
|
$
|
80,821
|
|
|
23.8
|
%
|
Energy
|
|
|
32,076
|
|
|
|
31,542
|
|
|
1.7
|
%
|
Financial Services Advisory and Compliance
|
|
|
46,391
|
|
|
|
31,069
|
|
|
49.3
|
%
|
Disputes, Forensics & Legal Technology
|
|
|
82,909
|
|
|
|
86,826
|
|
|
-4.5
|
%
|
Total Company
|
|
$
|
261,409
|
|
|
$
|
230,258
|
|
|
13.5
|
%
|
Segment Operating Profit ($000)
|
|
|
|
|
|
|
Healthcare
|
|
$
|
31,896
|
|
|
$
|
24,091
|
|
|
32.4
|
%
|
Energy
|
|
|
8,336
|
|
|
|
7,698
|
|
|
8.3
|
%
|
Financial Services Advisory and Compliance
|
|
|
17,682
|
|
|
|
10,383
|
|
|
70.3
|
%
|
Disputes, Forensics & Legal Technology
|
|
|
26,099
|
|
|
|
28,445
|
|
|
-8.2
|
%
|
Total Company
|
|
$
|
84,013
|
|
|
$
|
70,617
|
|
|
19.0
|
%
|
Segment Operating Margin (% of RBR)
|
|
|
|
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Healthcare
|
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35.0
|
%
|
|
|
32.3
|
%
|
|
|
Energy
|
|
|
29.3
|
%
|
|
|
28.8
|
%
|
|
|
Financial Services Advisory and Compliance
|
|
|
43.9
|
%
|
|
|
36.7
|
%
|
|
|
Disputes, Forensics & Legal Technology
|
|
|
33.7
|
%
|
|
|
35.5
|
%
|
|
|
Total Company
|
|
|
35.4
|
%
|
|
|
33.7
|
%
|
|
|
Third quarter 2016 RBR for the Healthcare segment increased 22%
year-over-year, with more than half of that growth organic. The
performance continued to be driven by strong demand for large,
strategy-led transformation projects and revenue cycle consulting
engagements. Segment operating profit for third quarter 2016 was up 32%
compared to the same period in 2015.
Energy segment RBR increased 6% for the third quarter 2016 compared to
the equivalent period in 2015, all of which represented organic growth.
RBR growth for the quarter reflected contributions across the segment's
portfolio of solutions, in addition to ongoing penetration of key client
accounts. Third quarter 2016 segment operating profit was also up 8%
compared to the same period in 2015.
Financial Services Advisory and Compliance segment RBR for third quarter
2016 increased 42%, all on an organic basis, compared to the prior year
third quarter. Growth was driven primarily by continued demand for
financial crimes consulting expertise and an increase in compliance and
controls engagements for major financial institutions, as compared to
the prior year period which had experienced relatively lower utilization
due to the wind-down of certain large engagements. RBR growth, better
pricing and higher consultant utilization led to a robust 70% increase
in third quarter 2016 segment operating profit year-over-year.
Disputes, Forensics & Legal Technology segment RBR was down 3% for third
quarter 2016 compared the third quarter 2015. The decrease was
attributable to currency fluctuations as well as a lower volume of
engagements in financial services disputes and international
arbitration, both which experienced particularly high demand in the
prior-year period. This decline was partially offset by strong demand
for our global expertise in large infrastructure claims and construction
dispute matters. Segment operating profit was down 8% in third quarter
2016 compared to the respective period of 2015.
Cash Flow
Third quarter 2016 net cash provided by operating activities was $48.0
million, compared to $38.9 million for third quarter 2015, as a result
of improved earnings. Free cash flow increased to $25.5 million for
third quarter 2016 compared to $18.2 million for the same period in
2015, primarily driven by a decrease in capital investment spending.
Days Sales Outstanding was 87 days as of September 30, 2016, up six days
compared to September 30, 2015.
Bank debt was $161.2 million at September 30, 2016, compared to $146.8
million at September 30, 2015 and $189.8 million at June 30, 2016.
Leverage (bank debt divided by trailing twelve month adjusted EBITDA)
was 1.17 at September 30, 2016, compared to 1.22 at September 30, 2015
and 1.46 at June 30, 2016.
Navigant repurchased 309,233 shares of common stock during third quarter
2016 at an aggregate cost of $5.8 million and an average cost of $18.68
per share. As of September 30, 2016, approximately $69.3 million
remained available under the Company's share repurchase authorization.
2016 Outlook
Navigant raised its 2016 outlook. Full year 2016 RBR is now expected to
range between $920.0 and $940.0 million, which is the upper half of the
previously-issued guidance range. The range for 2016 total revenues was
increased to $1.00 and $1.02 billion, up from $960 million to $1.01
billion. Adjusted EBITDA for full year 2016 is now expected to range
between $137.5 and $145.0 million, which is the upper half of the
previously-issued guidance range. Adjusted EPS for full year 2016 is
estimated to be between $1.15 and $1.25, an increase of $0.10 from the
previous guidance range.
Non-GAAP Financial Information
This press release includes certain non-GAAP financial measures as
defined by the Securities and Exchange Commission. Reconciliations of
these non-GAAP financial measures to the most directly comparable
financial measure calculated and presented in accordance with generally
accepted accounting principles (GAAP) are included in the financial
schedules attached to this press release. This information should be
considered as supplemental in nature and not as a substitute for, or
superior to, any measure of performance prepared in accordance with GAAP.
No reconciliation of Navigant's 2016 adjusted EBITDA guidance and 2016
adjusted EPS guidance, both of which exclude the impact and tax-effected
impact of severance expense and other operating costs (benefit),
respectively, is included in the financial schedules attached to this
press release. Navigant is not able to accurately forecast the excluded
items at the level of precision that would be required to be included in
the most directly comparable GAAP financial measure without unreasonable
efforts.
Conference Call Details
Navigant will host a conference call to discuss the Company's third
quarter 2016 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time)
on Tuesday, October 25, 2016. The conference call may be accessed via
the Navigant website (investors.navigant.com)
or by dialing 888.455.9733 (630.395.0358 for international callers) and
referencing pass code "NCI." An archived version of the webcast will
also be available via the Navigant website. A report of financial and
related supplemental information is also available via the Navigant
website.
About Navigant
Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global
professional services firm that helps clients take control of their
future. Navigant's professionals apply deep industry knowledge,
substantive technical expertise, and an enterprising approach to help
clients build, manage and/or protect their business interests. With a
focus on industries and clients facing transformational change and
significant regulatory or legal pressures, the Firm primarily serves
clients in the healthcare, energy and financial services markets. Across
a range of advisory, consulting, outsourcing, and technology/analytics
services, Navigant's practitioners bring sharp insight that pinpoints
opportunities and delivers powerful results. More information about
Navigant can be found at navigant.com.
Statements included in this press release which are not historical in
nature are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may generally be identified by words such as "anticipate,"
"believe," "intend," "estimate," "expect," "plan," "outlook" and similar
expressions. These statements are based upon management's current
expectations and speak only as of the date of this press release. The
Company cautions readers that there may be events in the future that the
Company is not able to accurately predict or control and the information
contained in the forward-looking statements is inherently uncertain and
subject to a number of risks that could cause actual results to differ
materially from those contained in or implied by the forward-looking
statements including, without limitation: the execution of the Company's
long-term growth objectives and margin improvement initiatives; risks
inherent in international operations, including foreign currency
fluctuations; ability to make acquisitions and divestitures; pace,
timing and integration of acquisitions and separation of divestitures;
operational risks associated with new or expanded service areas,
including business process management services; impairments; changes in
accounting standards; management of professional staff, including
dependence on key personnel, recruiting, retention, attrition and the
ability to successfully integrate new consultants into the Company's
practices; utilization rates; conflicts of interest; potential loss of
clients or large engagements and the Company's ability to attract new
business; competition; accurate pricing of engagements, particularly
fixed fee and multi-year engagements; clients' financial condition and
their ability to make payments to the Company; risks inherent with
litigation; higher risk client assignments; professional liability;
information security controls; potential legislative and regulatory
changes; continued access to capital; and market and general economic
and political conditions. Further information on these and other
potential factors that could affect the Company's financial results are
included under the "Risk Factors" section of the Company's Annual Report
on Form 10-K for the year ended December 31, 2015, and elsewhere in the
Company's filings with the Securities and Exchange Commission (SEC),
which are available on the SEC's website or at investors.navigant.com.
The Company cannot guarantee any future results, levels of activity,
performance or achievement and undertakes no obligation to update any of
its forward-looking statements.
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NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands, except per share data(1))
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
For the nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
|
Revenues before reimbursements
|
|
$
|
237,115
|
|
|
$
|
209,634
|
|
|
$
|
699,075
|
|
|
$
|
621,813
|
|
Reimbursements
|
|
|
24,294
|
|
|
|
20,624
|
|
|
|
69,304
|
|
|
|
65,055
|
|
Total revenues
|
|
|
261,409
|
|
|
|
230,258
|
|
|
|
768,379
|
|
|
|
686,868
|
|
Cost of services:
|
|
|
|
|
|
|
|
|
Cost of services before reimbursable expenses
|
|
|
156,061
|
|
|
|
141,731
|
|
|
|
467,967
|
|
|
|
425,699
|
|
Reimbursable expenses
|
|
|
24,294
|
|
|
|
20,624
|
|
|
|
69,304
|
|
|
|
65,055
|
|
Total cost of services
|
|
|
180,355
|
|
|
|
162,355
|
|
|
|
537,271
|
|
|
|
490,754
|
|
General and administrative expenses
|
|
|
42,126
|
|
|
|
36,629
|
|
|
|
126,464
|
|
|
|
111,362
|
|
Depreciation expense
|
|
|
7,008
|
|
|
|
5,954
|
|
|
|
20,545
|
|
|
|
17,033
|
|
Amortization expense
|
|
|
2,905
|
|
|
|
2,084
|
|
|
|
8,717
|
|
|
|
6,650
|
|
Other operating costs (benefit):
|
|
|
|
|
|
|
|
|
Contingent acquisition liability adjustments, net
|
|
|
480
|
|
|
|
-
|
|
|
|
1,330
|
|
|
|
(12,625
|
)
|
Office consolidation, net
|
|
|
-
|
|
|
|
-
|
|
|
|
174
|
|
|
|
2,740
|
|
Loss on disposition of assets
|
|
|
-
|
|
|
|
283
|
|
|
|
-
|
|
|
|
283
|
|
Other impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
98
|
|
Operating income
|
|
|
28,535
|
|
|
|
22,953
|
|
|
|
73,878
|
|
|
|
70,573
|
|
Interest expense
|
|
|
1,310
|
|
|
|
1,018
|
|
|
|
3,999
|
|
|
|
3,988
|
|
Interest income
|
|
|
(35
|
)
|
|
|
(77
|
)
|
|
|
(110
|
)
|
|
|
(178
|
)
|
Other income, net
|
|
|
(350
|
)
|
|
|
(328
|
)
|
|
|
(1,134
|
)
|
|
|
(480
|
)
|
Income before income tax expense
|
|
|
27,610
|
|
|
|
22,340
|
|
|
|
71,123
|
|
|
|
67,243
|
|
Income tax expense
|
|
|
10,435
|
|
|
|
8,164
|
|
|
|
26,529
|
|
|
|
20,097
|
|
Net income
|
|
$
|
17,175
|
|
|
$
|
14,176
|
|
|
$
|
44,594
|
|
|
$
|
47,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic per share data
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
0.36
|
|
|
$
|
0.30
|
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
Shares used in computing basic per share data
|
|
|
47,369
|
|
|
|
47,835
|
|
|
|
47,448
|
|
|
|
48,036
|
|
|
|
|
|
|
|
|
|
|
Diluted per share data
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
0.35
|
|
|
$
|
0.29
|
|
|
$
|
0.91
|
|
|
$
|
0.96
|
|
Shares used in computing diluted per share data
|
|
|
48,763
|
|
|
|
49,155
|
|
|
|
48,878
|
|
|
|
49,297
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
|
(In thousands, except DSO data)
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
7,044
|
|
|
$
|
8,895
|
|
Accounts receivable, net
|
|
|
272,254
|
|
|
|
216,660
|
|
Prepaid expenses and other current assets
|
|
|
27,989
|
|
|
|
29,729
|
|
Total current assets
|
|
|
307,287
|
|
|
|
255,284
|
|
Non-current assets:
|
|
|
|
|
Property and equipment, net
|
|
|
69,833
|
|
|
|
76,717
|
|
Intangible assets, net
|
|
|
30,502
|
|
|
|
38,160
|
|
Goodwill
|
|
|
624,454
|
|
|
|
623,204
|
|
Other assets
|
|
|
18,660
|
|
|
|
22,531
|
|
Total assets
|
|
$
|
1,050,736
|
|
|
$
|
1,015,896
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
10,460
|
|
|
$
|
9,497
|
|
Accrued liabilities
|
|
|
11,583
|
|
|
|
10,719
|
|
Accrued compensation-related costs
|
|
|
91,616
|
|
|
|
91,577
|
|
Income tax payable
|
|
|
12,772
|
|
|
|
-
|
|
Other current liabilities
|
|
|
36,566
|
|
|
|
32,147
|
|
Total current liabilities
|
|
|
162,997
|
|
|
|
143,940
|
|
Non-current liabilities:
|
|
|
|
|
Deferred income tax liabilities
|
|
|
80,189
|
|
|
|
75,719
|
|
Other non-current liabilities
|
|
|
20,649
|
|
|
|
28,956
|
|
Bank debt non-current
|
|
|
161,208
|
|
|
|
173,743
|
|
Total non-current liabilities
|
|
|
262,046
|
|
|
|
278,418
|
|
Total liabilities
|
|
|
425,043
|
|
|
|
422,358
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
|
57
|
|
|
|
64
|
|
Additional paid-in capital
|
|
|
640,083
|
|
|
|
627,976
|
|
Treasury stock
|
|
|
(175,105
|
)
|
|
|
(296,624
|
)
|
Retained earnings
|
|
|
182,964
|
|
|
|
278,682
|
|
Accumulated other comprehensive loss
|
|
|
(22,306
|
)
|
|
|
(16,560
|
)
|
Total stockholders' equity
|
|
|
625,693
|
|
|
|
593,538
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,050,736
|
|
|
$
|
1,015,896
|
|
|
|
|
|
|
Selected Data (unaudited)
|
|
|
|
|
Days sales outstanding, net (DSO)
|
|
|
87
|
|
|
|
76
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
For the nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
17,175
|
|
|
$
|
14,176
|
|
|
$
|
44,594
|
|
|
$
|
47,146
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
7,008
|
|
|
|
5,954
|
|
|
|
20,545
|
|
|
|
17,033
|
|
Amortization expense
|
|
|
2,905
|
|
|
|
2,084
|
|
|
|
8,717
|
|
|
|
6,650
|
|
Amortization expense - client-facing software
|
|
|
173
|
|
|
|
190
|
|
|
|
526
|
|
|
|
676
|
|
Share-based compensation expense
|
|
|
2,921
|
|
|
|
2,682
|
|
|
|
9,445
|
|
|
|
8,206
|
|
Accretion of interest expense
|
|
|
171
|
|
|
|
29
|
|
|
|
526
|
|
|
|
1,164
|
|
Deferred income taxes
|
|
|
(506
|
)
|
|
|
2,024
|
|
|
|
625
|
|
|
|
6,710
|
|
Allowance for doubtful accounts receivable
|
|
|
2,459
|
|
|
|
100
|
|
|
|
7,006
|
|
|
|
1,692
|
|
Contingent acquisition liability adjustments, net
|
|
|
480
|
|
|
|
-
|
|
|
|
1,330
|
|
|
|
(12,625
|
)
|
Other, net
|
|
|
-
|
|
|
|
283
|
|
|
|
33
|
|
|
|
520
|
|
Changes in assets and liabilities (net of acquisitions and
dispositions):
|
|
|
|
|
|
Accounts receivable
|
|
|
(20,152
|
)
|
|
|
1,060
|
|
|
|
(63,917
|
)
|
|
|
(35,687
|
)
|
Prepaid expenses and other assets
|
|
|
6,340
|
|
|
|
(5,356
|
)
|
|
|
5,315
|
|
|
|
(7,717
|
)
|
Accounts payable
|
|
|
(1,519
|
)
|
|
|
(2,821
|
)
|
|
|
959
|
|
|
|
(2,685
|
)
|
Accrued liabilities
|
|
|
612
|
|
|
|
727
|
|
|
|
1,084
|
|
|
|
2,171
|
|
Accrued compensation-related costs
|
|
|
23,084
|
|
|
|
19,148
|
|
|
|
296
|
|
|
|
(3,748
|
)
|
Income taxes payable
|
|
|
4,881
|
|
|
|
933
|
|
|
|
16,940
|
|
|
|
979
|
|
Other liabilities
|
|
|
1,944
|
|
|
|
(2,305
|
)
|
|
|
1,607
|
|
|
|
3,618
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
47,976
|
|
|
|
38,908
|
|
|
|
55,631
|
|
|
|
34,103
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(3,425
|
)
|
|
|
(7,963
|
)
|
|
|
(13,464
|
)
|
|
|
(31,160
|
)
|
Acquisitions of businesses, net of cash acquired
|
|
|
(6,000
|
)
|
|
|
-
|
|
|
|
(7,995
|
)
|
|
|
(21,379
|
)
|
Other acquisition payments
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,500
|
)
|
|
|
-
|
|
Payments of acquisition liabilities
|
|
|
(667
|
)
|
|
|
(666
|
)
|
|
|
(1,165
|
)
|
|
|
(2,196
|
)
|
Capitalized client-facing software
|
|
|
(332
|
)
|
|
|
(265
|
)
|
|
|
(459
|
)
|
|
|
(611
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(10,424
|
)
|
|
|
(8,894
|
)
|
|
|
(28,583
|
)
|
|
|
(55,346
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Issuances of common stock
|
|
|
727
|
|
|
|
594
|
|
|
|
3,568
|
|
|
|
5,488
|
|
Repurchases of common stock
|
|
|
(5,778
|
)
|
|
|
(6,126
|
)
|
|
|
(18,801
|
)
|
|
|
(18,207
|
)
|
Payments of contingent acquisition liabilities
|
|
|
(779
|
)
|
|
|
(592
|
)
|
|
|
(828
|
)
|
|
|
(592
|
)
|
Repayments to banks
|
|
|
(99,481
|
)
|
|
|
(91,930
|
)
|
|
|
(308,726
|
)
|
|
|
(230,633
|
)
|
Borrowings from banks
|
|
|
71,608
|
|
|
|
68,371
|
|
|
|
298,847
|
|
|
|
268,014
|
|
Other, net
|
|
|
(72
|
)
|
|
|
(52
|
)
|
|
|
(2,802
|
)
|
|
|
(1,299
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(33,775
|
)
|
|
|
(29,735
|
)
|
|
|
(28,742
|
)
|
|
|
22,771
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(43
|
)
|
|
|
(116
|
)
|
|
|
(157
|
)
|
|
|
(159
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
3,734
|
|
|
|
163
|
|
|
|
(1,851
|
)
|
|
|
1,369
|
|
Cash and cash equivalents at beginning of the period
|
|
|
3,310
|
|
|
|
3,854
|
|
|
|
8,895
|
|
|
|
2,648
|
|
Cash and cash equivalents at end of the period
|
|
$
|
7,044
|
|
|
$
|
4,017
|
|
|
$
|
7,044
|
|
|
$
|
4,017
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
(In thousands, except per share data and percentages)
|
(Unaudited)
|
|
|
This press release includes certain non-GAAP financial measures as
defined by the Securities and Exchange Commission. Below are the
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measure calculated and presented in
accordance with generally accepted accounting principles (GAAP).
This information should be considered as supplemental in nature and
not as a substitute for, or superior to, any measure of performance
prepared in accordance with GAAP. Management uses these non-GAAP
financial measures in addition to GAAP financial measures to assess
the Company's operations and financial results and believes they are
useful indicators of operating performance and the Company's ability
to generate cash flows from operations that are available for
interest, debt service, taxes and capital expenditures. Investors
should recognize that these non-GAAP financial measures may not be
comparable to similarly-titled measures of other companies.
|
EBITDA, adjusted EBITDA, adjusted Net
Income and
|
|
For the quarter ended
|
|
|
|
For the nine months ended
|
|
|
adjusted Earnings Per Share (2)
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
Severance expense
|
|
$
|
879
|
|
|
$
|
283
|
|
|
|
|
$
|
2,876
|
|
|
$
|
5,339
|
|
|
|
Income tax benefit (3)
|
|
|
(288
|
)
|
|
|
(117
|
)
|
|
|
|
|
(1,028
|
)
|
|
|
(1,869
|
)
|
|
|
Tax-effected impact of severance expense
|
|
$
|
591
|
|
|
$
|
166
|
|
|
|
|
$
|
1,848
|
|
|
$
|
3,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs (benefit) - contingent acquisition liability
adjustment, net
|
|
$
|
480
|
|
|
$
|
-
|
|
|
|
|
$
|
1,330
|
|
|
$
|
(12,625
|
)
|
|
|
Income tax benefit (3)(4)
|
|
|
(193
|
)
|
|
|
-
|
|
|
|
|
|
(534
|
)
|
|
|
(1,090
|
)
|
|
|
Tax-effected impact of other operating costs (benefit) - contingent
acquisition liability adjustment, net
|
|
$
|
287
|
|
|
$
|
-
|
|
|
|
|
$
|
796
|
|
|
$
|
(13,715
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs - office consolidation, net
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
$
|
174
|
|
|
$
|
2,740
|
|
|
|
Income tax benefit (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
(70
|
)
|
|
|
(1,108
|
)
|
|
|
Tax-effected impact of other operating costs - office consolidation,
net
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
$
|
104
|
|
|
$
|
1,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs - loss on disposition of assets
|
|
$
|
-
|
|
|
$
|
283
|
|
|
|
|
$
|
-
|
|
|
$
|
283
|
|
|
|
Income tax benefit (3)(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Tax-effected impact of other operating costs - loss on disposition
of assets
|
|
$
|
-
|
|
|
$
|
283
|
|
|
|
|
$
|
-
|
|
|
$
|
283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs - other impairment
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
$
|
98
|
|
|
|
Income tax benefit (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
(40
|
)
|
|
|
Tax-effected impact of other operating costs - other impairment
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
17,175
|
|
|
$
|
14,176
|
|
|
|
|
$
|
44,594
|
|
|
$
|
47,146
|
|
|
|
Interest expense
|
|
|
1,310
|
|
|
|
1,018
|
|
|
|
|
|
3,999
|
|
|
|
3,988
|
|
|
|
Interest income
|
|
|
(35
|
)
|
|
|
(77
|
)
|
|
|
|
|
(110
|
)
|
|
|
(178
|
)
|
|
|
Other income, net
|
|
|
(350
|
)
|
|
|
(328
|
)
|
|
|
|
|
(1,134
|
)
|
|
|
(480
|
)
|
|
|
Income tax expense
|
|
|
10,435
|
|
|
|
8,164
|
|
|
|
|
|
26,529
|
|
|
|
20,097
|
|
|
|
Depreciation expense
|
|
|
7,008
|
|
|
|
5,954
|
|
|
|
|
|
20,545
|
|
|
|
17,033
|
|
|
|
Accelerated depreciation - office consolidation (included in other
operating costs - office consolidation, net)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
33
|
|
|
|
139
|
|
|
|
Amortization expense
|
|
|
2,905
|
|
|
|
2,084
|
|
|
|
|
|
8,717
|
|
|
|
6,650
|
|
|
|
EBITDA
|
|
$
|
38,448
|
|
|
$
|
30,991
|
|
|
|
|
$
|
103,173
|
|
|
$
|
94,395
|
|
|
|
Severance expense
|
|
|
879
|
|
|
|
283
|
|
|
|
|
|
2,876
|
|
|
|
5,339
|
|
|
|
Other operating costs (benefit) - contingent acquisition liability
adjustment, net
|
|
|
480
|
|
|
|
-
|
|
|
|
|
|
1,330
|
|
|
|
(12,625
|
)
|
|
|
Other operating costs - office consolidation, net (excluding
accelerated depreciation - office consolidation, above)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
141
|
|
|
|
2,601
|
|
|
|
Other operating costs - loss on disposition of assets
|
|
|
-
|
|
|
|
283
|
|
|
|
|
|
-
|
|
|
|
283
|
|
|
|
Other operating costs - other impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
98
|
|
|
|
Adjusted EBITDA
|
|
$
|
39,807
|
|
|
$
|
31,557
|
|
|
|
|
$
|
107,520
|
|
|
$
|
90,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
17,175
|
|
|
$
|
14,176
|
|
|
|
|
$
|
44,594
|
|
|
$
|
47,146
|
|
|
|
Tax-effected impact of severance expense
|
|
|
591
|
|
|
|
166
|
|
|
|
|
|
1,848
|
|
|
|
3,470
|
|
|
|
Tax-effected impact of other operating costs (benefit) - contingent
acquisition liability adjustment, net
|
|
|
287
|
|
|
|
-
|
|
|
|
|
|
796
|
|
|
|
(13,715
|
)
|
|
|
Tax-effected impact of other operating costs - office consolidation,
net
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
104
|
|
|
|
1,632
|
|
|
|
Tax-effected impact of other operating costs - loss on disposition
of assets
|
|
|
-
|
|
|
|
283
|
|
|
|
|
|
-
|
|
|
|
283
|
|
|
|
Tax-effected impact of other operating costs - other impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
58
|
|
|
|
Adjusted net income
|
|
$
|
18,053
|
|
|
$
|
14,625
|
|
|
|
|
$
|
47,342
|
|
|
$
|
38,874
|
|
|
|
Shares used in computing adjusted per diluted share data
|
|
|
48,763
|
|
|
|
49,155
|
|
|
|
|
|
48,878
|
|
|
|
49,297
|
|
|
|
Adjusted earnings per share
|
|
$
|
0.37
|
|
|
$
|
0.30
|
|
|
|
|
$
|
0.97
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
|
|
For the nine months ended
|
|
|
Free Cash Flow (6)
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
Net cash provided by operating activities
|
|
$
|
47,976
|
|
|
$
|
38,908
|
|
|
|
|
$
|
55,631
|
|
|
$
|
34,103
|
|
|
|
Changes in assets and liabilities
|
|
|
(15,190
|
)
|
|
|
(11,386
|
)
|
|
|
|
|
37,716
|
|
|
|
43,069
|
|
|
|
Allowance for doubtful accounts receivable
|
|
|
(2,459
|
)
|
|
|
(100
|
)
|
|
|
|
|
(7,006
|
)
|
|
|
(1,692
|
)
|
|
|
Purchases of property and equipment
|
|
|
(3,425
|
)
|
|
|
(7,963
|
)
|
|
|
|
|
(13,464
|
)
|
|
|
(31,160
|
)
|
|
|
Payments of acquisition liabilities
|
|
|
(667
|
)
|
|
|
(666
|
)
|
|
|
|
|
(1,165
|
)
|
|
|
(2,196
|
)
|
|
|
Payments of contingent acquisition liabilities
|
|
|
(779
|
)
|
|
|
(592
|
)
|
|
|
|
|
(828
|
)
|
|
|
(592
|
)
|
|
|
Free Cash Flow
|
|
$
|
25,456
|
|
|
$
|
18,201
|
|
|
|
|
$
|
70,884
|
|
|
$
|
41,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage Ratio (7)
|
|
At September 30,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for prior twelve-month period
|
|
$
|
138,371
|
|
|
$
|
120,253
|
|
|
|
|
|
|
|
|
|
Bank debt
|
|
$
|
161,208
|
|
|
$
|
146,814
|
|
|
|
|
|
|
|
|
|
Leverage ratio
|
|
|
1.17
|
|
|
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
|
|
For the nine months ended
|
|
|
Organic Growth (8)
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
Growth
|
|
2016
|
|
2015
|
|
Growth
|
Revenues before reimbursements
|
|
$
|
237,115
|
|
|
$
|
209,634
|
|
|
13.1
|
%
|
|
$
|
699,075
|
|
|
$
|
621,813
|
|
|
12.4
|
%
|
Pro forma acquisition adjustment
|
|
|
473
|
|
|
|
7,077
|
|
|
|
|
|
1,893
|
|
|
|
23,074
|
|
|
|
Currency impact
|
|
|
1,794
|
|
|
|
-
|
|
|
|
|
|
3,688
|
|
|
|
-
|
|
|
|
Organic RBR
|
|
$
|
239,382
|
|
|
$
|
216,711
|
|
|
10.5
|
%
|
|
$
|
704,656
|
|
|
$
|
644,887
|
|
|
9.3
|
%
|
Footnotes
|
|
(1) Per share data may not sum due to rounding.
|
|
(2) EBITDA is earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA excludes the impact of severance
expense and other operating costs (benefit). Adjusted net income and
adjusted earnings per share exclude net income and per share net
income impact of severance expense and other operating costs
(benefit). Severance expense and other operating costs (benefit) are
not considered to be non-recurring, infrequent or unusual to our
business. Management believes that these measures provide investors
with enhanced comparability of the Company's results of operations
across periods.
|
|
(3) Effective income tax expense (benefit) has been determined based
on specific tax jurisdiction.
|
|
(4) A portion of the deferred contingent acquisition liability
adjustment for the nine months ended September 30, 2015 was
non-taxable in nature.
|
|
(5) The loss on dispositions recorded during the three and nine
months ended September 30, 2015 is subject to capital loss treatment
in Canada. The tax benefit associated with this capital loss is
subject to a full valuation allowance.
|
|
(6) Free cash flow is calculated as net cash provided from
operations excluding changes in assets and liabilities and allowance
for doubtful accounts receivable less cash payments for property and
equipment and deferred acquisition related payments. Free cash flow
does not represent discretionary cash available for spending as it
excludes certain contractual obligations such as debt repayment.
However, management believes that it provides investors with an
indicator of cash flows available for on-going business operations
and long term value creation.
|
|
(7) Leverage ratio is calculated as bank debt at the end of the
period divided by adjusted EBITDA for the prior twelve-month period.
Management believes that leverage ratio provides investors with an
indicator of the cash flows available to repay the Company's debt
obligations.
|
|
(8) Organic growth represents revenues before reimbursements
adjusted to include the impact of our acquisitions as if we owned
them from the beginning of each comparable period and adjusted to
exclude the impact of foreign currency exchange rate fluctuations.
Management believes that organic growth reflects the growth of our
existing business and is, therefore, useful in analyzing the
Company's financial condition and results of operations.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20161025005207/en/
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