Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

Navigant Reports Second Quarter 2013 Results



  Navigant Reports Second Quarter 2013 Results

  * Revenues before reimbursements were $189.7 million for second quarter
    2013, an increase of 5% over the prior year quarter. Total revenues were
    $213.1 million for second quarter 2013, an increase of 4% over the prior
    year quarter.
  * Net income for second quarter 2013 was $14.0 million, an increase of 46%
    over the prior year quarter.
  * Adjusted EBITDA for second quarter 2013 increased 40% compared to the same
    period in 2012, to $34.1 million. Adjusted EBITDA margin improved 450
    basis points to 18% for the second quarter 2013 compared to the same
    period in 2012.
  * EPS for second quarter 2013 increased 50% year over year to $0.27.
    Adjusted EPS for the second quarter 2013 increased 48% year over year to
    $0.31.
  * Repurchased 579,694 shares of common stock in second quarter 2013 at an
    average price of $12.85 per share.

Business Wire

CHICAGO -- July 30, 2013

Navigant (NYSE:NCI) today announced financial results for the second quarter
ended June 30, 2013.

Navigant reported second quarter 2013 revenues before reimbursements (RBR) of
$189.7 million, compared to $181.5 million for second quarter 2012, a 5%
increase. RBR growth for the quarter was led by especially strong results from
the Healthcare segment, with a 30% increase in RBR, and a 12% increase in RBR
from the Energy segment. Total revenues were $213.1 million for the second
quarter 2013, compared to $204.6 million for second quarter 2012, an increase
of 4%.

Adjusted EBITDA of $34.1 million for second quarter 2013 rose 40% compared to
$24.4 million for second quarter 2012, with Adjusted EBITDA margin (Adjusted
EBITDA as a percentage of RBR) at 18% for second quarter 2013, compared to 13%
for the same period in 2012. The improvement in margin was due to a 9%
increase in segment operating profit and a 9% reduction in general and
administrative expenses. The decrease in general and administrative expenses
was due to reduced information technology costs, lower bad debt expense and
lower facilities costs.

Net income for second quarter 2013 was $14.0 million, compared to $9.6 million
in the prior year quarter, an increase of 46%. Effective income tax rate was
43% for second quarter 2013 compared to 41% for second quarter 2012.

Earnings per share (EPS) were $0.27 for second quarter 2013, compared to $0.18
for second quarter 2012, a 50% increase. Adjusted EPS were $0.31 for second
quarter 2013, compared to $0.21 for second quarter 2012, an increase of 48%.

“We realized growth in revenues and a significant increase in profitability
while making additional progress on our long-term strategic objectives in the
period,” commented Julie Howard, Chief Executive Officer. “Healthcare and
Energy, which represent higher growth markets, performed well, and the
Financial, Risk & Compliance segment exceeded our expectations on the strength
of the diversity of our offerings and our ability to quickly identify and
transition resources to new work. Moving forward, we will continue to pursue
opportunities that solidify Navigant’s leadership in the financial services,
healthcare, and energy sectors while optimizing our portfolio for sustainable,
profitable growth.”

                                                                       
Segment Financial Highlights
                                                                         
                                       For the quarter ended June 30,  
                                       2013              2012           Change
RBR ($000)
Disputes, Investigations & Economics   $  76,352         $  81,350      -6.1 %
Financial, Risk & Compliance              42,738            42,800      -0.1 %
Healthcare                                46,814            36,022      30.0 %
Energy                                    23,803            21,357      11.5 %
Total Company                          $  189,707        $  181,529     4.5  %
Total Revenues ($000)
Disputes, Investigations & Economics   $  82,828         $  86,894      -4.7 %
Financial, Risk & Compliance              50,376            52,847      -4.7 %
Healthcare                                52,383            40,839      28.3 %
Energy                                    27,505            24,020      14.5 %
Total Company                          $  213,092        $  204,600     4.2  %
Segment Operating Profit ($000)
Disputes, Investigations & Economics   $  25,393         $  27,995      -9.3 %
Financial, Risk & Compliance              16,440            15,402      6.7  %
Healthcare                                18,110            11,463      58.0 %
Energy                                    8,075             7,475       8.0  %
Total Company                          $  68,018         $  62,335      9.1  %
Segment Operating Margin (% of RBR)
Disputes, Investigations & Economics      33.3     %        34.4    %   -1.1 %
Financial, Risk & Compliance              38.5     %        36.0    %   2.5  %
Healthcare                                38.7     %        31.8    %   6.9  %
Energy                                    33.9     %        35.0    %   -1.1 %
Total Company                             35.9     %        34.3    %   1.6  %
                                                                              

Healthcare RBR increased 30% for second quarter 2013 compared to the same
quarter of 2012. Approximately two-thirds of the increase was organically
driven growth. Navigant’s strength in strategy consulting and expertise across
industry disciplines continued to meet growing client needs to address the
challenges of the Affordable Care Act, Medicaid managed care and other
industry reforms. Second quarter 2013 Healthcare segment operating profit
increased 58% compared to second quarter 2012 reflecting exceptional RBR
growth while costs increased only modestly, demonstrating the benefits of
scaling this business.

Energy RBR increased 12% for second quarter 2013 compared to second quarter
2012. Segment growth was driven by demand for energy efficiency solutions from
utility clients and the U.S. federal government as they focus on reducing
energy consumption. Second quarter 2013 Energy segment operating profit
increased 8% compared to second quarter 2012 primarily due to increased RBR.

Financial, Risk & Compliance RBR for second quarter 2013 was flat with the
prior year quarter and ahead of Company expectations. Segment performance was
driven by a greater than expected contribution from mortgage servicing review
engagements that are winding down coupled with increased activity on
regulatory compliance, including anti-money laundering engagements. These
factors were offset by reduced activity in the restructuring area and lower
revenues related to a portion of Navigant’s financial services business based
in the UK, which was sold early in third quarter 2013. Second quarter 2013
Financial, Risk & Compliance segment operating profit increased 7% compared to
second quarter 2012 due to effective cost management.

Disputes, Investigations & Economics RBR declined 6% for second quarter 2013
compared to the same period of 2012. The decrease was primarily the result of
the first quarter 2013 disposition of a portion of the Economics practice.
Contributions from the December 2012 acquisition of AFE Consulting offset a
portion of the revenues lost through the disposition. Second quarter 2013
Disputes, Investigations & Economics segment operating profit decreased 9%
compared to second quarter 2012 principally due to the decline in RBR,
partially offset by cost reductions.

Cash Flow

Free cash flow was $24.4 million for second quarter 2013, an increase of 15%
compared to second quarter 2012.

$36.5 million of cash was used to pay down debt during second quarter 2013.
Debt levels were 24% lower at June 30, 2013 compared to year earlier levels,
reflecting continued strong operating cash flow. Leverage (Debt divided by
trailing twelve month Adjusted EBITDA) improved to 1.03 at June 30, 2013
compared to 1.61 at June 30, 2012. As of June 30, 2013, the Company had
approximately $270 million in additional borrowing capacity under its credit
facility.

Navigant repurchased 579,694 shares of common stock during second quarter
2013, at an aggregate cost of $7.5 million and average cost of $12.85 per
share. This compares to 331,900 shares of common stock repurchased during
second quarter 2012. As of June 30, 2013, there was $65 million remaining on
the Company’s share repurchase authorization.

2013 Outlook

Navigant narrowed its full year 2013 outlook within its original guidance
range. Full year 2013 RBR is expected to range between $740 and $770 million
while total 2013 revenues are estimated to be between $820 and $850 million.
Adjusted EBITDA is anticipated to range between $115 and $120 million and
Adjusted EPS is estimated to be between $0.95 and $1.05.

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.

Conference Call Details

Julie Howard and Lucinda (Cindy) Baier will host a conference call to discuss
the Company’s second quarter 2013 results at 10:00 a.m. Eastern Time on
Tuesday, July 30, 2013. The conference call may be accessed via the Navigant
website (www.navigant.com/investor_relations) or by dialing 888.593.8430
(312.470.7390 for international callers) and referencing pass code “NCI.” A
replay of the web cast will be available for one year. A report of financial
and related supplemental information is available at
www.navigant.com/investor_relations.

About Navigant

Navigant (NYSE: NCI) is a specialized, global expert services firm dedicated
to assisting clients in creating and protecting value in the face of critical
business risks and opportunities. Through senior level engagement with
clients, Navigant professionals combine technical expertise in Disputes and
Investigations, Economics, Financial Advisory and Management Consulting, with
business pragmatism in the highly regulated Construction, Energy, Financial
Services and Healthcare industries. More information about Navigant can be
found at www.navigant.com.

Statements included in this press release which are not historical in nature 
are forward-looking statements as defined within the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
words including “outlook,” ”plans,” “goals,” “anticipates,” “believes,”
“intends,” “estimates,” “expects” 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 success of the Company’s
organizational changes 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; impairment charges; management of
professional staff, including dependence on key personnel, recruiting,
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; clients’ financial condition and their
ability to make payments to the Company; risks inherent with litigation;
higher risk client assignments; professional liability; potential legislative
and regulatory changes; continued access to capital; and market and general
economic conditions. Further information on these and other potential factors
that could affect the Company’s financial results are included under the “Risk
Factors” section and elsewhere in the Company’s filings with the Securities
and Exchange Commission (SEC), which are available on the SEC’s website or at
www.navigant.com/investor_relations. 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.

 
 
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
                                                                  
                       For the quarter ended         For the six months ended
                       June 30,                      June 30,
                       2013          2012            2013          2012
Revenues:
Revenues before        $ 189,707     $ 181,529       $ 376,964     $ 367,909
reimbursements
Reimbursements           23,385        23,071          50,901        43,312   
Total revenues           213,092       204,600         427,865       411,221
Costs of services:
Cost of services
before                   125,363       122,243         251,727       246,203
reimbursable
expenses
Reimbursable             23,385        23,071          50,901        43,312   
expenses
Total costs of           148,748       145,314         302,628       289,515
services
General and
administrative           32,577        35,848          65,060        71,405
expenses
Depreciation             4,100         3,740           7,830         7,256
expense
Amortization             1,713         1,650           3,411         3,375
expense
Other operating
costs (benefit):
Contingent
acquisition              -             620             -             620
liability
adjustments, net
Office                   290           -               498           -
consolidation
Gain on
disposition of           -             -               (1,715  )     -        
assets
Operating income         25,664        17,428          50,153        39,050
Interest expense         1,172         1,426           2,397         2,889
Interest income          (112    )     (181    )       (275    )     (419    )
Other (income)           6             (144    )       (142    )     (39     )
expense, net
Income before            24,598        16,327          48,173        36,619
income tax expense
Income tax expense       10,648        6,771           20,425        15,421   
Net income             $ 13,950      $ 9,556         $ 27,748      $ 21,198   
                                                                    
                                                                    
Basic net income       $ 0.28        $ 0.19          $ 0.55        $ 0.42
per share
Shares used in
computing net            50,041        51,112          50,168        51,072
income per basic
share
                                                                    
Diluted net income     $ 0.27        $ 0.18          $ 0.54        $ 0.41
per share
Shares used in
computing net            51,022        51,685          51,191        51,741
income per diluted
share
                                                                              

 
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
                                                                 
                                                 June 30,         December 31,
                                                 2013             2012
                                                 (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                        $ 2,588          $ 1,052
Accounts receivable, net                           204,109          198,709
Prepaid expenses and other current                 23,463           25,054
assets
Deferred income tax assets                         14,329           17,821    
Total current assets                               244,489          242,636
Non-current assets:
Property and equipment, net                        42,236           45,342
Intangible assets, net                             12,506           16,123
Goodwill                                           606,483          619,932
Other assets                                       26,446           30,417    
Total assets                                     $ 932,160        $ 954,450   
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                 $ 12,394         $ 18,042
Accrued liabilities                                12,446           11,557
Accrued compensation-related costs                 60,631           84,813
Income tax payable                                 1,595            7,129
Other current liabilities                          32,311           35,754    
Total current liabilities                          119,377          157,295
Non-current liabilities:
Deferred income tax liabilities                    76,968           67,623
Other non-current liabilities                      32,200           35,606
Bank debt non-current                              128,064          134,183   
Total non-current liabilities                      237,232          237,412   
Total liabilities                                  356,609          394,707   
Stockholders' equity:
Common stock                                       63               62
Additional paid-in capital                         592,176          582,363
Treasury stock                                     (232,262 )       (216,500 )
Retained earnings                                  230,290          202,542
Accumulated other comprehensive loss               (14,716  )       (8,724   )
Total stockholders' equity                         575,551          559,743   
Total liabilities and stockholders'              $ 932,160        $ 954,450   
equity
                                                                   
Selected Data
Days sales outstanding, net (DSO)                  79               72        
                                                                              

 
NAVIGANT CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                      
                                                                        
                         For the quarter ended June     For the six months ended
                         30,                            June 30,
                         2013           2012            2013           2012
                                                                        
Cash flows from
operating
activities:
Net income               $ 13,950       $ 9,556         $ 27,748       $ 21,198
Adjustments to
reconcile net income
to net cash
provided by (used
in) operating
activities:
Depreciation expense       4,100          3,740           7,830          7,256
Accelerated
depreciation -             290            -               498            -
office consolidation
Amortization expense       1,713          1,650           3,411          3,375
Share-based                2,874          2,608           5,419          4,939
compensation expense
Accretion of               234            134             453            274
interest expense
Deferred income            4,951          6,709           11,973         11,484
taxes
Allowance for
doubtful accounts          972            1,893           1,227          3,053
receivable
Contingent
acquisition                -              620             -              620
liability
adjustments, net
Gain on disposition        -              -               (1,715   )     -
of assets
Changes in assets
and liabilities (net
of acquisitions and
dispositions):
Accounts receivable,       680            (11,404 )       (16,264  )     (29,134  )
net
Prepaid expenses and       5,806          (6,591  )       7,276          (5,196   )
other assets
Accounts payable           (5,629   )     1,810           (5,559   )     449
Accrued liabilities        1,460          1,023           87             2,121
Accrued
compensation-related       20,644         13,282          (21,428  )     (37,544  )
costs
Income taxes payable       132            (2,404  )       (5,412   )     (2,852   )
Other liabilities          (4,692   )     3,799           21             3,292     
                                                                        
Net cash provided by
(used in) operating        47,485         26,425          15,565         (16,665  )
activities
                                                                        
Cash flows from
investing
activities:
Purchases of
property and               (2,075   )     (3,153  )       (5,755   )     (10,979  )
equipment
Proceeds from
disposition, net of        -              -               15,607         -
selling costs
Payments of
acquisition                (348     )     (356    )       (348     )     (1,106   )
liabilities
Capitalized external       (633     )     (599    )       (2,001   )     (911     )
use software
Other, net                 -              -               -              (300     )
                                                                        
Net cash (used in)
provided by                (3,056   )     (4,108  )       7,503          (13,296  )
investing activities
                                                                        
Cash flows from
financing
activities:
Issuances of common        1,074          1,061           2,145          2,127
stock
Repurchase of common       (7,451   )     (4,228  )       (13,645  )     (7,260   )
stock
Payments of
contingent                 (1,287   )     (366    )       (3,287   )     (2,801   )
acquisition
liabilities
Repayments to banks        (101,764 )     (86,030 )       (204,444 )     (140,028 )
Borrowings from            65,224         67,205          199,338        176,028
banks
Other, net                 (507     )     72              (1,452   )     (1,039   )
Net cash (used in)
provided by                (44,711  )     (22,286 )       (21,345  )     27,027    
financing activities
                                                                        
Effect of exchange
rate changes on cash       (69      )     (105    )       (187     )     (35      )
and cash equivalents
Net increase
(decrease) in cash         (351     )     (74     )       1,536          (2,969   )
and cash equivalents
Cash and cash
equivalents at             2,939          74              1,052          2,969     
beginning of the
period
Cash and cash
equivalents at end       $ 2,588        $ -             $ 2,588        $ -         
of the period
                                                                                   

 
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(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 measures in
addition to GAAP 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 measures may not be comparable to
similarly-titled measures of other companies.
                                                                    
EBITDA, adjusted EBITDA, adjusted Net Income and adjusted Earnings per Share
 
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
the 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.
                                                                    
Free Cash Flow
 
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.
                                                                    
Leverage Ratio
                                                                    
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.
                                                                    
EBITDA, adjusted
EBITDA, adjusted       For the quarter ended          For the six months ended
Net Income and
adjusted
Earnings Per           June 30,                       June 30,
Share
                       2013           2012            2013         2012
Severance              $  2,371       $ 984           $ 3,813      $ 1,800
expense
Income tax                (798    )     (310    )       (1,225 )     (608    )
benefit (1)
Net income
impact of              $  1,573       $ 674           $ 2,588      $ 1,192    
severance
expense
                                                                    
Other operating
costs -
contingent             $  -           $ 620           $ -          $ 620
acquisition
liability
adjustment
Income tax                -             (250    )       -            (250    )
benefit (1)
Net income
impact of other
operating costs
- contingent           $  -           $ 370           $ -          $ 370      
acquisition
liability
adjustment
                                                                    
Other operating
costs -
accelerated            $  290         $ -             $ 498        $ -
depreciation -
office
consolidation
Income tax                (117    )     -               (201   )     -        
benefit (1)
Net income
impact of other
operating costs
- accelerated          $  173         $ -             $ 297        $ -        
depreciation -
office
consolidation
                                                                    
Other operating
benefit - gain         $  -           $ -             $ (1,715 )   $ -
on disposition
of assets
Income tax                -             -               692          -        
expense (1)
Net income
impact of other
operating              $  -           $ -             $ (1,023 )   $ -        
benefit - gain
on disposition
of assets
                                                                    
EBITDA
reconciliation:
Operating income       $  25,664      $ 17,428        $ 50,153     $ 39,050
Depreciation              4,100         3,740           7,830        7,256
expense
Accelerated
depreciation -            290           -               498
office
consolidation
Amortization              1,713         1,650           3,411        3,375    
expense
EBITDA                 $  31,767      $ 22,818        $ 61,892     $ 49,681
Severance                 2,371         984             3,813        1,800
expense
Other operating
costs -
contingent                -             620             -            620
acquisition
liability
adjustment
Other operating
costs - office            -             -               -            -
consolidation
Other operating
benefit - gain            -             -               (1,715 )     -        
on disposition
of assets
Adjusted EBITDA        $  34,138      $ 24,422        $ 63,990     $ 52,101   
                                                                    
                                                                    
                                                                    
Net income             $  13,950      $ 9,556         $ 27,748     $ 21,198
Net income
impact of                 1,573         674             2,588        1,192
severance
expense
Net income
impact of other
operating costs
- contingent              -             370             -            370
acquisition
liability
adjustment
Net income
impact of other
operating costs
- accelerated             173           -               297          -
depreciation -
office
consolidation
Net income
impact of other
operating                 -             -               (1,023 )     -        
benefit - gain
on disposition
of assets
Adjusted net           $  15,696      $ 10,600        $ 29,610     $ 22,760   
income
Shares used in
computing net             51,022        51,685          51,191       51,741
income per
diluted share
Adjusted
earnings per           $  0.31        $ 0.21          $ 0.58       $ 0.44     
share
                                                                    
(1) Effective
income tax
expense
(benefit) has
been determined
based on
specific tax
jurisdiction.
                                                                    
                       For the quarter ended          For the six months ended
Free Cash Flow         June 30,                       June 30,
                       2013           2012            2013         2012
Net cash
provided by
(used in)              $  47,485      $ 26,425        $ 15,565     $ (16,665 )
operating
activities
Changes in
assets and                (18,401 )     485             41,279       68,864
liabilities
Allowance for
doubtful                  (972    )     (1,893  )       (1,227 )     (3,053  )
accounts
receivable
Purchases of
property and              (2,075  )     (3,153  )       (5,755 )     (10,979 )
equipment
Payments of
acquisition               (348    )     (356    )       (348   )     (1,106  )
liabilities
Payments of
contingent                (1,287  )     (366    )       (3,287 )     (2,801  )
acquisition
liabilities
Free Cash Flow         $  24,402      $ 21,142        $ 46,227     $ 34,260   
                                                                    
                                                                    
                                                                    
Leverage Ratio         June 30,
                       2013           2012
Adjusted EBITDA
for prior              $  124,055     $ 104,091
twelve-month
period
Bank debt              $  128,064     $ 167,656
Leverage ratio            1.03          1.61

Contact:

Navigant
Paul Longhini
Investor Relations
312.583.5836
plonghini@navigant.com
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement