[February 11, 2016] |
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Navigant Reports Fourth Quarter and Full Year 2015 Financial Results; Provides Initial Outlook for 2016
Navigant (NYSE: NCI) today announced financial results for the fourth
quarter and full year ended December 31, 2015. The Company also
introduced its business and financial outlook for 2016.
Financial Summary and Highlights:
-
Fourth quarter 2015 revenues before reimbursements (RBR) increased 6%,
nearly all organic, over fourth quarter 2014; full year 2015 RBR up 9%
over 2014, more than half attributable to organic growth
-
Fourth quarter 2015 GAAP earnings per share (EPS) of $0.27 with full
year 2015 GAAP EPS of $1.23
-
Fourth quarter 2015 adjusted EBITDA flat to prior year while up 4% for
full year 2015
-
Fourth quarter 2015 adjusted EPS of $0.28, flat to prior year; full
year 2015 adjusted EPS of $1.07, up 5% over 2014
-
Issues financial outlook for 2016 with expected year-over-year growth
in RBR, adjusted EBITDA and adjusted EPS
Navigant reported fourth quarter 2015 RBR of $212.0 million, a 6%
increase, nearly all organic, compared to $199.5 million for fourth
quarter 2014. Total revenues increased 4% to $232.6 million for fourth
quarter 2015 compared to $223.6 million for fourth quarter 2014. Net
income from continuing operations for fourth quarter 2015 was $13.2
million, or $0.27 per share, compared to $12.3 million, or $0.25 per
share, in the prior year quarter. Adjusted EPS was $0.28 for fourth
quarter 2015, flat compared to fourth quarter 2014. Fourth quarter 2015
adjusted EBITDA was $30.9 million compared to $30.2 million for the same
period in 2014.
RBR for full year 2015 increased 9% on a year-over-year basis, with more
than half attributable to organic growth, to $833.8 million compared to
$766.6 million for 2014. Total revenues for full year 2015 increased 7%
on a year-over-year basis to $919.5 million compared to $859.6 million
for full year 2014. Net income from continuing operations for full year
2015 was $60.3 million, or $1.23 per share, compared to a net loss from
continuing operations of $36.9 million, or $0.76 per share, in 2014,
which included a non-cash goodwill impairment of $122.0 million ($86.9
million or $1.78 per share on an after-tax basis) recorded in second
quarter 2014. Adjusted EPS was $1.07 for full year 2015 compared to
$1.02 for full year 2014. Full year 2015 adjusted EBITDA was $120.9
million compared to $116.2 million for the full year 2014. Increased
general and administrative costs as well as higher non-cash depreciation
and amortization expenses impacted year-over-year EPS growth.
"We are extremely pleased with our 2015 results which reflected strong
organic revenue growth and meaningful impacts from our recent
investments," commented Julie Howard, Chairman and Chief Executive
Officer. "The progress we made throughout the year demonstrated our
ability to meet or exceed our financial targets while continuing to
invest in the business. Looking ahead to 2016, we anticipate reaping
benefits from the foundation we have built across each of our core
businesses, which is expected to translate into greater top line and
bottom line growth."
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Segment Financial Summary
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For the quarter ended December 31,
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For the full year ended December 31,
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2015
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2014
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Change
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2015
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2014
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Change
|
RBR ($000)
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|
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Disputes, Investigations & Economics
|
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$
|
76,820
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|
$
|
77,382
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|
-0.7%
|
|
$
|
314,628
|
|
$
|
309,570
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1.6%
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Financial, Risk & Compliance
|
|
|
31,605
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|
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34,643
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-8.8%
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124,359
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|
135,498
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-8.2%
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Healthcare
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76,059
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61,672
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23.3%
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288,798
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223,817
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29.0%
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Energy
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27,511
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25,761
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6.8%
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106,023
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97,667
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8.6%
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Total Company
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$
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211,995
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$
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199,458
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6.3%
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$
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833,808
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$
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766,552
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8.8%
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Total Revenues ($000)
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Disputes, Investigations & Economics
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$
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82,600
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$
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83,227
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-0.8%
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$
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338,152
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$
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333,273
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1.5%
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Financial, Risk & Compliance
|
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35,151
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41,537
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-15.4%
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142,959
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162,637
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-12.1%
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Healthcare
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83,082
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68,218
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21.8%
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313,884
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248,095
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26.5%
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Energy
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31,785
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30,651
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3.7%
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124,491
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115,612
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7.7%
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Total Company
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$
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232,618
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$
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223,633
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4.0%
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$
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919,486
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$
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859,617
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7.0%
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Segment Operating Profit ($000)
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Disputes, Investigations & Economics
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$
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24,014
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$
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26,271
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-8.6%
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$
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102,449
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$
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104,466
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-1.9%
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Financial, Risk & Compliance
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12,476
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14,674
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-15.0%
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49,130
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58,929
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-16.6%
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Healthcare
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23,796
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16,874
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41.0%
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90,869
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65,104
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39.6%
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Energy
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8,247
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8,245
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0.0%
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31,380
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30,507
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2.9%
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Total Company
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$
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68,533
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$
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66,064
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3.7%
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$
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273,828
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$
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259,006
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5.7%
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Segment Operating Margin (% of RBR)
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Disputes, Investigations & Economics
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31.3%
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33.9%
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32.6%
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33.7%
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Financial, Risk & Compliance
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39.5%
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42.4%
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39.5%
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43.5%
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Healthcare
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31.3%
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27.4%
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31.5%
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29.1%
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Energy
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30.0%
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32.0%
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29.6%
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31.2%
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Total Company
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32.3%
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33.1%
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32.8%
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33.8%
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Our Healthcare segment delivered an outstanding 2015 with revenue and
profit growth as well as margin improvement. RBR for the segment
increased 23% year-over-year for fourth quarter 2015 with 17% organic
growth for the period. For the full year 2015, RBR for the segment was
up 29% from 2014 with 13% organic growth. Strength was driven by
increased demand in key consulting areas including provider performance
improvement solutions, revenue cycle consulting, life sciences and
regulatory work for governmental agencies. In addition, business process
management services (full year acquisition impact as well as organic
growth) contributed to the growth. Segment operating profit margin for
fourth quarter 2015 increased to 31% compared to 27% in the same period
2014, and for full year 2015, segment operating profit margin improved
to 32% compared to 29% in 2014.
Energy segment RBR increased 7% for the fourth quarter 2015 and 9% for
the full year 2015 compared to the equivalent periods in 2014, all of
which represented organic growth. RBR growth for the quarter was driven
by an increase in strategy and operations as well as market intelligence
engagements, reflecting increased success from the segment's key client
accounts program. In addition, full year RBR growth also benefited from
the impact of senior hires. Fourth quarter 2015 segment operating profit
was flat compared to the same period of 2014, and for the full year 2015
increased 3% compared to 2014, as higher RBR was partially offset by
higher compensation and benefits expenses.
The Disputes, Investigations & Economics segment RBR results for fourth
quarter and full year 2015 were relatively flat compared to the same
periods in 2014. For the full year, growth in global construction,
healthcare and financial services disputes was largely offset by lower
contributions from forensic investigations and economic consulting
engagements. Segment operating profit was down 9% in fourth quarter 2015
and down 2% in full year 2015 compared to the respective periods of
2014, driven by higher costs to better align resources.
The Financial, Risk & Compliance segment RBR for fourth quarter 2015
decreased 9% compared to the prior year quarter and decreased 8% for
full year 2015 compared to 2014, primarily reflecting the lower volume
of work from an ongoing large financial institution client, partially
offset by continued strength in anti-money laundering and other consumer
finance compliance engagements. Segment operating profit margins for
both the quarter and year returned to more typical levels while
declining from prior year periods due to the impact of lower RBR.
Cash Flow
Free cash flow was $7.5 million for fourth quarter 2015 compared to
$12.7 million for the same period in 2014. Full year 2015 free cash flow
was $49.0 million compared to $72.4 million for 2014, reflecting
increased capital expenditures and investments. Days Sales Outstanding
(DSO) was 76 days as of December 31, 2015, up 7 days compared to
December 31, 2014.
Bank debt was $173.7 million at December 31, 2015 compared to $109.8
million at December 31, 2014. Leverage (bank debt divided by trailing
twelve month adjusted EBITDA) was 1.44 at December 31, 2015 compared to
0.94 at December 31, 2014. The increase was mainly due to additional
borrowings to fund the McKinnis Consulting Services acquisition in
December 2015.
Navigant repurchased 341,200 shares of common stock during fourth
quarter 2015 at an aggregate cost of $5.8 million and an average cost of
$17.04 per share. For the full year, the Company repurchased
approximately 1.6 million shares at an aggregate cost of $24.0 million
and an average cost of $15.12 per share. As of December 31, 2015, $88.1
million remained available under the Company's share repurchase
authorization.
2016 Outlook
Navigant is introducing its 2016 financial outlook. Full year 2016 RBR
is expected to range between $900 and $940 million while 2016 total
revenues are estimated to be between $960 million and $1.01 billion.
Adjusted EBITDA for full year 2016 is expected to range between $132 and
$145 million and adjusted EPS for full year 2016 is estimated to be
between $1.05 and $1.15.
Non-GAAP Financial Information and Key
Operating Metrics
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.
As used in this press release, organic growth represents RBR adjusted to
include the impact of acquisitions as if the Company owned them from the
beginning of each comparable period and adjusted to exclude the impact
of foreign currency exchange rate fluctuations. Our definition of
organic growth may not be comparable to similarly titled metrics at
other companies. 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.
Conference Call Details
Navigant will host a conference call to discuss the Company's fourth
quarter and full year quarter 2015 results at 10:00 a.m. Eastern Time
(9:00 a.m. Central Time) on Thursday, February 11, 2016. The conference
call may be accessed via the Navigant website (www.navigant.com/investor_relations)
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 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
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CONSOLIDATED STATEMENTS OF INCOME (LOSS)
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(In thousands, except per share data(1))
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(Unaudited)
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For the quarter ended
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For the year ended
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December 31,
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December 31,
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2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
Revenues before reimbursements
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|
$
|
211,995
|
|
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$
|
199,458
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|
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$
|
833,808
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|
|
$
|
766,552
|
|
Reimbursements
|
|
|
20,623
|
|
|
|
24,175
|
|
|
|
85,678
|
|
|
|
93,065
|
|
Total revenues
|
|
|
232,618
|
|
|
|
223,633
|
|
|
|
919,486
|
|
|
|
859,617
|
|
Cost of services:
|
|
|
|
|
|
|
|
|
Cost of services before reimbursable expenses
|
|
|
146,195
|
|
|
|
136,378
|
|
|
|
571,894
|
|
|
|
519,157
|
|
Reimbursable expenses
|
|
|
20,623
|
|
|
|
24,175
|
|
|
|
85,678
|
|
|
|
93,065
|
|
Total cost of services
|
|
|
166,818
|
|
|
|
160,553
|
|
|
|
657,572
|
|
|
|
612,222
|
|
General and administrative expenses
|
|
|
36,100
|
|
|
|
34,651
|
|
|
|
147,462
|
|
|
|
136,057
|
|
Depreciation expense
|
|
|
6,579
|
|
|
|
5,202
|
|
|
|
23,612
|
|
|
|
19,580
|
|
Amortization expense
|
|
|
1,963
|
|
|
|
1,291
|
|
|
|
8,613
|
|
|
|
5,959
|
|
Other operating costs (benefit):
|
|
|
|
|
|
|
|
|
Contingent acquisition liability adjustments, net
|
|
|
(422
|
)
|
|
|
(554
|
)
|
|
|
(13,047
|
)
|
|
|
(4,992
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)
|
Office consolidation, net
|
|
|
26
|
|
|
|
725
|
|
|
|
2,766
|
|
|
|
725
|
|
(Gain) loss on disposition of assets
|
|
|
-
|
|
|
|
(541
|
)
|
|
|
283
|
|
|
|
(541
|
)
|
Goodwill impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
122,045
|
|
Other impairment
|
|
|
-
|
|
|
|
1,139
|
|
|
|
98
|
|
|
|
1,343
|
|
Operating income (loss)
|
|
|
21,554
|
|
|
|
21,167
|
|
|
|
92,127
|
|
|
|
(32,781
|
)
|
Interest expense
|
|
|
928
|
|
|
|
1,741
|
|
|
|
4,916
|
|
|
|
5,918
|
|
Interest income
|
|
|
(72
|
)
|
|
|
(58
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)
|
|
|
(250
|
)
|
|
|
(274
|
)
|
Other income, net
|
|
|
(212
|
)
|
|
|
(378
|
)
|
|
|
(692
|
)
|
|
|
(167
|
)
|
Income (loss) from continuing operations before income tax expense
(benefit)
|
|
|
20,910
|
|
|
|
19,862
|
|
|
|
88,153
|
|
|
|
(38,258
|
)
|
Income tax expense (benefit)
|
|
|
7,711
|
|
|
|
7,541
|
|
|
|
27,808
|
|
|
|
(1,351
|
)
|
Net income (loss) from continuing operations
|
|
|
13,199
|
|
|
|
12,321
|
|
|
|
60,345
|
|
|
|
(36,907
|
)
|
Income from discontinued operations, net of tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
509
|
|
Net income (loss)
|
|
$
|
13,199
|
|
|
$
|
12,321
|
|
|
$
|
60,345
|
|
|
$
|
(36,398
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic per share data
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
$
|
0.28
|
|
|
$
|
0.25
|
|
|
$
|
1.26
|
|
|
$
|
(0.76
|
)
|
Income from discontinued operations, net of tax
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.01
|
|
Net income (loss)
|
|
$
|
0.28
|
|
|
$
|
0.25
|
|
|
$
|
1.26
|
|
|
$
|
(0.75
|
)
|
Shares used in computing basic per share data
|
|
|
47,516
|
|
|
|
48,393
|
|
|
|
47,906
|
|
|
|
48,741
|
|
|
|
|
|
|
|
|
|
|
Diluted per share data
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
$
|
0.27
|
|
|
$
|
0.25
|
|
|
$
|
1.23
|
|
|
$
|
(0.76
|
)
|
Income from discontinued operations, net of tax
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.01
|
|
Net income (loss)
|
|
$
|
0.27
|
|
|
$
|
0.25
|
|
|
$
|
1.23
|
|
|
$
|
(0.75
|
)
|
Shares used in computing diluted per share data (2)
|
|
|
49,007
|
|
|
|
49,542
|
|
|
|
49,224
|
|
|
|
48,741
|
|
|
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
|
(In thousands, except DSO data)
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
8,895
|
|
|
$
|
2,648
|
|
Accounts receivable, net
|
|
|
216,660
|
|
|
|
187,652
|
|
Prepaid expenses and other current assets
|
|
|
29,729
|
|
|
|
27,142
|
|
Deferred income tax assets
|
|
|
-
|
|
|
|
13,455
|
|
Total current assets
|
|
|
255,284
|
|
|
|
230,897
|
|
Non-current assets:
|
|
|
|
|
Property and equipment, net
|
|
|
76,717
|
|
|
|
60,617
|
|
Intangible assets, net
|
|
|
38,160
|
|
|
|
26,502
|
|
Goodwill
|
|
|
623,204
|
|
|
|
568,091
|
|
Other assets
|
|
|
22,531
|
|
|
|
17,386
|
|
Total assets
|
|
$
|
1,015,896
|
|
|
$
|
903,493
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
9,497
|
|
|
$
|
11,735
|
|
Accrued liabilities
|
|
|
10,719
|
|
|
|
11,311
|
|
Accrued compensation-related costs
|
|
|
91,577
|
|
|
|
83,061
|
|
Income tax payable
|
|
|
-
|
|
|
|
1,763
|
|
Other current liabilities
|
|
|
32,147
|
|
|
|
52,526
|
|
Total current liabilities
|
|
|
143,940
|
|
|
|
160,396
|
|
Non-current liabilities:
|
|
|
|
|
Deferred income tax liabilities
|
|
|
75,719
|
|
|
|
76,329
|
|
Other non-current liabilities
|
|
|
28,956
|
|
|
|
14,387
|
|
Bank debt non-current
|
|
|
173,743
|
|
|
|
109,790
|
|
Total non-current liabilities
|
|
|
278,418
|
|
|
|
200,506
|
|
Total liabilities
|
|
|
422,358
|
|
|
|
360,902
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
|
64
|
|
|
|
64
|
|
Additional paid-in capital
|
|
|
627,976
|
|
|
|
611,882
|
|
Treasury stock
|
|
|
(296,624
|
)
|
|
|
(275,608
|
)
|
Retained earnings
|
|
|
278,682
|
|
|
|
218,337
|
|
Accumulated other comprehensive loss
|
|
|
(16,560
|
)
|
|
|
(12,084
|
)
|
Total stockholders' equity
|
|
|
593,538
|
|
|
|
542,591
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,015,896
|
|
|
$
|
903,493
|
|
|
|
|
|
|
Selected Data
|
|
|
|
|
Days sales outstanding, net (DSO)
|
|
|
76
|
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
For the year ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
13,199
|
|
|
$
|
12,321
|
|
|
$
|
60,345
|
|
|
$
|
(36,398
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
6,579
|
|
|
|
5,202
|
|
|
|
23,612
|
|
|
|
19,580
|
|
Accelerated depreciation - office consolidation
|
|
|
26
|
|
|
|
-
|
|
|
|
165
|
|
|
|
-
|
|
Amortization expense
|
|
|
1,963
|
|
|
|
1,291
|
|
|
|
8,613
|
|
|
|
5,959
|
|
Amortization expense - client-facing software
|
|
|
191
|
|
|
|
393
|
|
|
|
867
|
|
|
|
1,218
|
|
Share-based compensation expense
|
|
|
2,122
|
|
|
|
2,150
|
|
|
|
10,328
|
|
|
|
9,316
|
|
Accretion of interest expense
|
|
|
21
|
|
|
|
786
|
|
|
|
1,185
|
|
|
|
2,351
|
|
Deferred income taxes
|
|
|
7,097
|
|
|
|
3,150
|
|
|
|
13,807
|
|
|
|
(18,052
|
)
|
Allowance for doubtful accounts receivable
|
|
|
886
|
|
|
|
700
|
|
|
|
2,578
|
|
|
|
5,009
|
|
Contingent acquisition liability adjustments, net
|
|
|
(422
|
)
|
|
|
(554
|
)
|
|
|
(13,047
|
)
|
|
|
(4,992
|
)
|
(Gain) loss on disposition of assets
|
|
|
-
|
|
|
|
(541
|
)
|
|
|
283
|
|
|
|
(541
|
)
|
Gain on disposition of discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(509
|
)
|
Goodwill impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
122,045
|
|
Other impairment
|
|
|
-
|
|
|
|
1,139
|
|
|
|
98
|
|
|
|
1,343
|
|
Changes in assets and liabilities (net of acquisitions and
dispositions):
|
|
|
|
|
|
|
Accounts receivable
|
|
|
7,812
|
|
|
|
23,678
|
|
|
|
(27,875
|
)
|
|
|
(14,844
|
)
|
Prepaid expenses and other assets
|
|
|
2,142
|
|
|
|
475
|
|
|
|
(5,575
|
)
|
|
|
(303
|
)
|
Accounts payable
|
|
|
414
|
|
|
|
898
|
|
|
|
(2,271
|
)
|
|
|
(2,123
|
)
|
Accrued liabilities
|
|
|
(1,695
|
)
|
|
|
(191
|
)
|
|
|
476
|
|
|
|
(1,316
|
)
|
Accrued compensation-related costs
|
|
|
10,623
|
|
|
|
13,621
|
|
|
|
6,875
|
|
|
|
2,712
|
|
Income taxes payable
|
|
|
(5,060
|
)
|
|
|
(3,928
|
)
|
|
|
(4,081
|
)
|
|
|
2,185
|
|
Other liabilities
|
|
|
3,078
|
|
|
|
2,614
|
|
|
|
6,696
|
|
|
|
(2,543
|
)
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
48,976
|
|
|
|
63,204
|
|
|
|
83,079
|
|
|
|
90,097
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(7,934
|
)
|
|
|
(8,441
|
)
|
|
|
(39,094
|
)
|
|
|
(23,506
|
)
|
Acquisitions of businesses, net of cash acquired
|
|
|
(42,658
|
)
|
|
|
-
|
|
|
|
(64,037
|
)
|
|
|
(89,180
|
)
|
Proceeds from dispositions, net of selling costs
|
|
|
-
|
|
|
|
1,500
|
|
|
|
-
|
|
|
|
2,324
|
|
Payments of acquisition liabilities
|
|
|
(11,350
|
)
|
|
|
(3,850
|
)
|
|
|
(13,546
|
)
|
|
|
(4,960
|
)
|
Capitalized client-facing software
|
|
|
(124
|
)
|
|
|
(17
|
)
|
|
|
(735
|
)
|
|
|
(881
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(62,066
|
)
|
|
|
(10,808
|
)
|
|
|
(117,412
|
)
|
|
|
(116,203
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Issuances of common stock
|
|
|
486
|
|
|
|
402
|
|
|
|
5,974
|
|
|
|
2,833
|
|
Repurchases of common stock
|
|
|
(5,814
|
)
|
|
|
(6,487
|
)
|
|
|
(24,021
|
)
|
|
|
(27,284
|
)
|
Payments of contingent acquisition liabilities
|
|
|
(4,000
|
)
|
|
|
(357
|
)
|
|
|
(4,592
|
)
|
|
|
(464
|
)
|
Repayments to banks
|
|
|
(101,822
|
)
|
|
|
(92,173
|
)
|
|
|
(332,455
|
)
|
|
|
(323,374
|
)
|
Borrowings from banks
|
|
|
129,306
|
|
|
|
44,892
|
|
|
|
397,320
|
|
|
|
377,839
|
|
Other, net
|
|
|
(116
|
)
|
|
|
(194
|
)
|
|
|
(1,415
|
)
|
|
|
(2,668
|
)
|
Net cash provided by (used in) financing activities
|
|
|
18,040
|
|
|
|
(53,917
|
)
|
|
|
40,811
|
|
|
|
26,882
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(72
|
)
|
|
|
(83
|
)
|
|
|
(231
|
)
|
|
|
(96
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
4,878
|
|
|
|
(1,604
|
)
|
|
|
6,247
|
|
|
|
680
|
|
Cash and cash equivalents at beginning of the period
|
|
|
4,017
|
|
|
|
4,252
|
|
|
|
2,648
|
|
|
|
1,968
|
|
Cash and cash equivalents at end of the period
|
|
$
|
8,895
|
|
|
$
|
2,648
|
|
|
$
|
8,895
|
|
|
$
|
2,648
|
|
|
|
|
|
|
|
|
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (3)
|
(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
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 year ended
|
adjusted Earnings Per Share (4)
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Severance expense
|
|
$
|
1,151
|
|
|
$
|
1,733
|
|
|
$
|
6,490
|
|
|
$
|
4,885
|
|
Income tax benefit (5)
|
|
|
(378
|
)
|
|
|
(617
|
)
|
|
|
(2,247
|
)
|
|
|
(1,821
|
)
|
Tax-effected impact of severance expense
|
|
$
|
773
|
|
|
$
|
1,116
|
|
|
$
|
4,243
|
|
|
$
|
3,064
|
|
|
|
|
|
|
|
|
|
|
Other operating benefit - contingent acquisition liability
adjustment, net
|
|
$
|
(422
|
)
|
|
$
|
(554
|
)
|
|
$
|
(13,047
|
)
|
|
$
|
(4,992
|
)
|
Income tax (benefit) expense (5)(6)(7)
|
|
|
166
|
|
|
|
224
|
|
|
|
(924
|
)
|
|
|
2,014
|
|
Tax-effected impact of other operating benefit - contingent
acquisition liability adjustment, net
|
|
$
|
(256
|
)
|
|
$
|
(330
|
)
|
|
$
|
(13,971
|
)
|
|
$
|
(2,978
|
)
|
|
|
|
|
|
|
|
|
|
Other operating costs - office consolidation, net
|
|
$
|
26
|
|
|
$
|
725
|
|
|
$
|
2,766
|
|
|
$
|
725
|
|
Income tax benefit (5)
|
|
|
(11
|
)
|
|
|
(292
|
)
|
|
|
(1,119
|
)
|
|
|
(292
|
)
|
Tax-effected impact of other operating costs - office consolidation,
net
|
|
$
|
15
|
|
|
$
|
433
|
|
|
$
|
1,647
|
|
|
$
|
433
|
|
|
|
|
|
|
|
|
|
|
Other operating costs (benefit) - (gain) loss on disposition of
assets
|
|
$
|
-
|
|
|
$
|
(541
|
)
|
|
$
|
283
|
|
|
$
|
(541
|
)
|
Income tax expense (5)(8)
|
|
|
-
|
|
|
|
218
|
|
|
|
-
|
|
|
|
218
|
|
Tax-effected impact of other operating costs (benefit) - (gain) loss
on disposition of assets
|
|
$
|
-
|
|
|
$
|
(323
|
)
|
|
$
|
283
|
|
|
$
|
(323
|
)
|
|
|
|
|
|
|
|
|
|
Other operating costs - goodwill impairment
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
122,045
|
|
Income tax benefit (5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(35,111
|
)
|
Tax-effected impact of other operating costs - goodwill impairment
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
86,934
|
|
|
|
|
|
|
|
|
|
|
Other operating costs - other impairment
|
|
$
|
-
|
|
|
$
|
1,139
|
|
|
$
|
98
|
|
|
$
|
1,343
|
|
Income tax benefit (5)
|
|
|
-
|
|
|
|
(459
|
)
|
|
|
(40
|
)
|
|
|
(541
|
)
|
Tax-effected impact of other operating costs - other impairment
|
|
$
|
-
|
|
|
$
|
680
|
|
|
$
|
58
|
|
|
$
|
802
|
|
|
|
|
|
|
|
|
|
|
EBITDA reconciliation:
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
21,554
|
|
|
$
|
21,167
|
|
|
$
|
92,127
|
|
|
$
|
(32,781
|
)
|
Depreciation expense
|
|
|
6,579
|
|
|
|
5,202
|
|
|
|
23,612
|
|
|
|
19,580
|
|
Accelerated depreciation - office consolidation
|
|
|
26
|
|
|
|
-
|
|
|
|
165
|
|
|
|
-
|
|
Amortization expense
|
|
|
1,963
|
|
|
|
1,291
|
|
|
|
8,613
|
|
|
|
5,959
|
|
EBITDA
|
|
$
|
30,122
|
|
|
$
|
27,660
|
|
|
$
|
124,517
|
|
|
$
|
(7,242
|
)
|
Severance expense
|
|
|
1,151
|
|
|
|
1,733
|
|
|
|
6,490
|
|
|
|
4,885
|
|
Other operating benefit - contingent acquisition liability
adjustment, net
|
|
|
(422
|
)
|
|
|
(554
|
)
|
|
|
(13,047
|
)
|
|
|
(4,992
|
)
|
Other operating costs - office consolidation, net
|
|
|
-
|
|
|
|
725
|
|
|
|
2,601
|
|
|
|
725
|
|
Other operating costs (benefit) - (gain) loss on disposition of
assets
|
|
|
-
|
|
|
|
(541
|
)
|
|
|
283
|
|
|
|
(541
|
)
|
Other operating costs - goodwill impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
122,045
|
|
Other operating costs - other impairment
|
|
|
-
|
|
|
|
1,139
|
|
|
|
98
|
|
|
|
1,343
|
|
Adjusted EBITDA
|
|
$
|
30,851
|
|
|
$
|
30,162
|
|
|
$
|
120,942
|
|
|
$
|
116,223
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
$
|
13,199
|
|
|
$
|
12,321
|
|
|
$
|
60,345
|
|
|
$
|
(36,907
|
)
|
Tax-effected impact of severance expense
|
|
|
773
|
|
|
|
1,116
|
|
|
|
4,243
|
|
|
|
3,064
|
|
Tax-effected impact of other operating benefit - contingent
acquisition liability adjustment, net
|
|
|
(256
|
)
|
|
|
(330
|
)
|
|
|
(13,971
|
)
|
|
|
(2,978
|
)
|
Tax-effected impact of other operating costs - office consolidation,
net
|
|
|
15
|
|
|
|
433
|
|
|
|
1,647
|
|
|
|
433
|
|
Tax-effected impact of other operating costs (benefit) - (gain) loss
on disposition of assets
|
|
|
-
|
|
|
|
(323
|
)
|
|
|
283
|
|
|
|
(323
|
)
|
Tax-effected impact of other operating costs - goodwill impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
86,934
|
|
Tax-effected impact of other operating costs - other impairment
|
|
|
-
|
|
|
|
680
|
|
|
|
58
|
|
|
|
802
|
|
Adjusted net income
|
|
$
|
13,731
|
|
|
$
|
13,897
|
|
|
$
|
52,605
|
|
|
$
|
51,025
|
|
Shares used in computing adjusted per diluted share data (9)
|
|
|
49,007
|
|
|
|
49,542
|
|
|
|
49,224
|
|
|
|
49,976
|
|
Adjusted earnings per share
|
|
$
|
0.28
|
|
|
$
|
0.28
|
|
|
$
|
1.07
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
For the year ended
|
Free Cash Flow (10)
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net cash provided by operating activities
|
|
$
|
48,976
|
|
|
$
|
63,204
|
|
|
$
|
83,079
|
|
|
$
|
90,097
|
|
Changes in assets and liabilities
|
|
|
(17,314
|
)
|
|
|
(37,167
|
)
|
|
|
25,755
|
|
|
|
16,232
|
|
Allowance for doubtful accounts receivable
|
|
|
(886
|
)
|
|
|
(700
|
)
|
|
|
(2,578
|
)
|
|
|
(5,009
|
)
|
Purchases of property and equipment
|
|
|
(7,934
|
)
|
|
|
(8,441
|
)
|
|
|
(39,094
|
)
|
|
|
(23,506
|
)
|
Payments of acquisition liabilities
|
|
|
(11,350
|
)
|
|
|
(3,850
|
)
|
|
|
(13,546
|
)
|
|
|
(4,960
|
)
|
Payments of contingent acquisition liabilities
|
|
|
(4,000
|
)
|
|
|
(357
|
)
|
|
|
(4,592
|
)
|
|
|
(464
|
)
|
Free Cash Flow
|
|
$
|
7,492
|
|
|
$
|
12,689
|
|
|
$
|
49,024
|
|
|
$
|
72,390
|
|
|
|
|
|
|
|
|
|
|
|
|
At
|
|
|
|
|
Leverage Ratio (11)
|
|
December 31,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
Adjusted EBITDA for prior twelve-month period
|
|
$
|
120,942
|
|
|
$
|
116,223
|
|
|
|
|
|
Bank debt
|
|
$
|
173,743
|
|
|
$
|
109,790
|
|
|
|
|
|
Leverage ratio
|
|
|
1.44
|
|
|
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
|
|
|
|
|
(1) Per share data may not sum due to rounding.
|
|
(2) For the year ended December 31, 2014, the Company reported a net
loss. For that period, the basic weighted average common shares
outstanding equals the diluted weighted average common shares
outstanding for purposes of calculating U.S. GAAP earnings per share
because potentially dilutive securities would be antidilutive.
|
|
(3) All non-GAAP financial measures are presented on a continuing
operations basis unless otherwise noted.
|
|
(4) EBITDA is earnings from continuing operations 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 (loss) and per share net income (loss) impact of discontinued
operations, 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.
|
|
(5) Effective income tax expense (benefit) has been determined based
on specific tax jurisdiction.
|
|
(6) A portion of the deferred contingent acquisition liability
adjustment for the year ended December 31, 2015 was non-taxable in
nature.
|
|
(7) On May 15, 2015, we executed an Amendment to Merger Agreement
with the Cymetrix Sellers, establishing a definitive amount for the
obligation and eliminating the contingent aspect of the Cymetrix
acquisition liability. As a result of this agreement, the Company
will no longer record an interest expense for imputed interest
resulting from the contingent aspect of the acquisition liability.
Based on this change, the Company re-evaluated the need for a
deferred tax liability associated with expected non-deductible
imputed interest and recorded an $826 thousand benefit to reverse
the remaining tax impact in the quarter ended June 30, 2015.
|
|
(8) The loss on dispositions recorded during the year ended December
31, 2015 is subject to capital loss treatment in Canada. The tax
benefit associated with this capital loss is subject to a full
valuation allowance.
|
|
(9) For the year ended December 31, 2014, the Company reported a net
loss. For non-GAAP purposes, the per share and share amounts
presented here reflect the inclusion of potentially dilutive shares
based on the impact of the add backs included in Adjusted Net Income.
|
|
(10) 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.
|
|
(11) 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.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160211005224/en/
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