UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 28, 2015
Navigant Consulting, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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1-12173 |
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36-4094854 |
(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
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30 South Wacker Drive, Suite 3550, Chicago, Illinois |
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60606 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(312) 573-5600
(Registrants telephone number, including area code)
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. |
Results of Operations and Financial Condition. |
On April 28, 2015, Navigant
Consulting, Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01. |
Financial Statements and Exhibits. |
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Exhibit No. |
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99.1 |
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Press Release dated April 28, 2015. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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NAVIGANT CONSULTING, INC. |
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Date: April 28, 2015 |
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By: |
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/s/ Lucinda M. Baier |
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Name: |
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Lucinda M. Baier |
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Title: |
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Executive Vice President and |
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Chief Financial Officer |
3
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Press Release dated April 28, 2015. |
4
Exhibit 99.1
NAVIGANT REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS
CHICAGO, April 28, 2015 Navigant (NYSE: NCI) today announced financial results for the first quarter ended March 31, 2015.
Financial Summary and Highlights:
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First quarter 2015 revenues before reimbursements (RBR) increased 15% year-over-year to $201.2 million, and total revenues increased 13% year-over-year to $223.2 million. |
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First quarter 2015 RBR results included organic growth of 5% year-over-year, with contribution from all segments. |
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Net income from continuing operations was $25.1 million or $0.51 per share; adjusted earnings per share (EPS) increased 15%
year-over-year to $0.23, and adjusted EBITDA increased 27% year-over-year to $28.4 million. |
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426,800 shares of common stock repurchased in first quarter 2015 at an average cost of $14.33 per share. |
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Reiterates financial outlook for 2015. |
Navigant reported first quarter 2015 RBR of $201.2 million, a 15%
increase compared to $175.1 million for first quarter 2014, with year-over-year RBR organic growth in all four segments. Total revenues increased 13% to $223.2 million for first quarter 2015 compared to $197.7 million for first
quarter 2014. Net income from continuing operations for first quarter 2015 was $25.1 million, or $0.51 per share, compared to $10.4 million, or $0.21 per share, in the prior year quarter. Adjusted EPS increased 15% to $0.23 for first
quarter 2015 compared to $0.20 for first quarter 2014. Adjusted EBITDA increased 27% to $28.4 million for first quarter 2015 compared to $22.3 million for the same period in 2014.
Julie Howard, Chairman and Chief Executive Officer, commented, We are pleased with our results in the first quarter, reflecting nice organic
growth, with contributions from all segments. Each of the primary industry sectors that we serve - Financial Services, Energy and Healthcare - continue to face significant regulatory scrutiny and market pressure to transform their business models, a
sweet spot for our skills and capabilities. Our Financial Risk & Compliance segment and our Energy segment contributed double digit growth, all organic, while the Healthcare segment realized 43% RBR growth year over year, primarily driven
by investments in new business process management service capabilities.
Howard further commented, As we continue to shift our business mix to
reflect a more balanced combination of consulting, business process management services and technology solutions, we anticipate there may be margin compression. Our focus for this year is to invest in our long-term strategy, while managing our
bottom line performance by closely aligning resources with revenue potential.
Segment Financial Summary
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For the quarter ended March 31, |
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2015 |
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2014 |
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Change |
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RBR ($000) |
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Disputes, Investigations & Economics |
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$ |
76,593 |
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$ |
76,032 |
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0.7 |
% |
Financial, Risk & Compliance |
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34,943 |
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31,411 |
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11.2 |
% |
Healthcare |
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63,994 |
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44,735 |
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43.1 |
% |
Energy |
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25,626 |
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22,878 |
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12.0 |
% |
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Total Company |
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$ |
201,156 |
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$ |
175,056 |
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14.9 |
% |
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Total Revenues ($000) |
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Disputes, Investigations & Economics |
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$ |
81,211 |
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$ |
82,084 |
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-1.1 |
% |
Financial, Risk & Compliance |
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42,300 |
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37,998 |
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11.3 |
% |
Healthcare |
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69,329 |
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50,366 |
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37.7 |
% |
Energy |
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30,331 |
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27,300 |
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11.1 |
% |
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Total Company |
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$ |
223,171 |
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$ |
197,748 |
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12.9 |
% |
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Segment Operating Profit ($000) |
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Disputes, Investigations & Economics |
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$ |
24,269 |
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$ |
24,718 |
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-1.8 |
% |
Financial, Risk & Compliance |
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15,070 |
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13,468 |
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11.9 |
% |
Healthcare |
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18,256 |
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14,029 |
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30.1 |
% |
Energy |
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7,922 |
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6,487 |
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22.1 |
% |
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Total Company |
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$ |
65,517 |
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$ |
58,702 |
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11.6 |
% |
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Segment Operating Margin (% of RBR) |
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Disputes, Investigations & Economics |
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31.7 |
% |
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32.5 |
% |
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Financial, Risk & Compliance |
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43.1 |
% |
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42.9 |
% |
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Healthcare |
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28.5 |
% |
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31.4 |
% |
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Energy |
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30.9 |
% |
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28.4 |
% |
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Total Company |
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32.6 |
% |
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33.5 |
% |
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RBR for the Healthcare segment increased 43% year-over-year for first quarter 2015 with 4% organic RBR growth for the period.
RBR growth was driven primarily by business process management services. Navigants Life Sciences practice also contributed to a strong quarter, reflecting an increase in demand from clients to support their product commercialization efforts.
Segment operating profit margin was 29% versus 31% in the same period last year, mainly due to lower margins generated by business process management services. As this business matures, the Company believes that the margin contribution will improve
over time.
The Financial, Risk & Compliance segment RBR for first quarter 2015 increased 11%, all on an organic basis, compared to the prior
year quarter. Growth was driven primarily by the ongoing strong demand for new compliance and control engagements for major financial institutions. The growth in RBR led to a 12% increase in first quarter 2015 segment operating profit
year-over-year.
2
The Energy segment RBR for first quarter 2015 increased 12% compared to first quarter 2014, and increased 13% on
an organic basis. The growth was driven by demand from both the public and private sector, as well as increased client penetration from the segments key client accounts program. First quarter 2015 segment operating profit increased 22%
year-over-year.
The Disputes, Investigations & Economics segment RBR for first quarter 2015 increased 1% year-over-year, nearly all on an
organic basis. The increase was driven primarily by increased demand for our global construction expertise and the segments legal technology solutions, partially offset by a lower contribution from economic consulting engagements. Segment
operating profit decreased 2% in first quarter 2015 compared to the same period of 2014.
Cash Flow
Free cash flow was $11.8 million for first quarter 2015 compared to $18.5 million for the same period in 2014, reflecting increased capital investment
spending. Days Sales Outstanding (DSO) was 80 days as of March 31, 2015, up 2 days compared to March 31, 2014.
Bank debt was $178.7 million at
March 31, 2015 compared to $120.8 million at March 31, 2014. Leverage (bank debt divided by trailing twelve month adjusted EBITDA) was 1.46 at March 31, 2015 compared to 1.03 at March 31, 2014. The increase in the 2015 first
quarter debt levels was mainly due to additional borrowings to fund the Cymetrix acquisition in May 2014 and, to a lesser extent, the RevenueMed acquisition in February 2015.
Navigant repurchased 426,800 shares of common stock during first quarter 2015 at an aggregate cost of $6.1 million and an average cost of $14.33 per share. As
of March 31, 2015, $66.6 million remained available under the Companys share repurchase authorization, which is set to expire on December 31, 2015.
2015 Outlook
Navigant reiterated its 2015
financial outlook. As previously disclosed, full year 2015 RBR is expected to range between $815 and $845 million while 2015 total revenues are estimated to be between $900 and $930 million. Adjusted EBITDA for full year 2015 is expected to range
between $115 and $125 million and adjusted EPS for full year 2015 is estimated to be between $0.90 and $1.00.
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.
3
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 Companys financial condition and results of operations.
Conference Call Details
Navigant will host a
conference call to discuss the Companys first quarter 2015 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Tuesday, April 28, 2015. 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 (NYSE: NCI) is a specialized, global professional 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 deliver expert and advisory work through implementation and business process management services. The firm combines deep technical
expertise in Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism to address clients needs in highly regulated industries, including Construction, Energy, Financial Services and
Healthcare. 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 managements 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 Companys 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; operational risks associated with new or expanded service
areas, including business process management services; impairments; management of professional staff, including dependence on key personnel, recruiting, attrition and the ability to successfully integrate new consultants into the Companys
practices; utilization rates; conflicts of interest; potential loss of clients or large engagements; clients financial condition and their ability to
4
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 Companys financial results are included under the Risk Factors section and elsewhere in the Companys
filings with the Securities and Exchange Commission (SEC), which are available on the SECs 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.
For additional information contact:
Aaron Miles
Investor Relations
312.583.5820
aaron.miles@navigant.com
###
5
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data(1))
(Unaudited)
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For the quarter ended March 31, |
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2015 |
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2014 |
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Revenues: |
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Revenues before reimbursements |
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$ |
201,156 |
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$ |
175,056 |
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Reimbursements |
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22,015 |
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22,692 |
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Total revenues |
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223,171 |
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197,748 |
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Costs of services: |
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Cost of services before reimbursable expenses |
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138,601 |
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120,128 |
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Reimbursable expenses |
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22,015 |
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22,692 |
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Total costs of services |
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160,616 |
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142,820 |
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General and administrative expenses |
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35,665 |
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33,102 |
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Depreciation expense |
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5,355 |
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|
4,309 |
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Amortization expense |
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|
2,269 |
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|
1,362 |
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Other operating costs (benefit): |
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Contingent acquisition liability adjustments, net |
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(14,933 |
) |
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|
(1,160 |
) |
Office consolidation, net |
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|
936 |
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Operating income |
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33,263 |
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|
17,315 |
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Interest expense |
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1,732 |
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|
838 |
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Interest income |
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(55 |
) |
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|
(89 |
) |
Other (income) expense, net |
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(328 |
) |
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|
82 |
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Income from continuing operations before income tax expense |
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31,914 |
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16,484 |
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Income tax expense |
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6,771 |
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6,114 |
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Net income from continuing operations |
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25,143 |
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|
10,370 |
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Income from discontinued operations, net of tax |
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509 |
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Net income |
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$ |
25,143 |
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$ |
10,879 |
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Basic per share data |
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Net income from continuing operations |
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$ |
0.52 |
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$ |
0.21 |
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Income from discontinued operations, net of tax |
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$ |
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$ |
0.01 |
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Net income (1) |
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$ |
0.52 |
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$ |
0.22 |
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Shares used in computing basic per share data |
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48,123 |
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48,906 |
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Diluted per share data |
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Net income from continuing operations |
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$ |
0.51 |
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$ |
0.21 |
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Income from discontinued operations, net of tax |
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$ |
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$ |
0.01 |
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Net income (1) |
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$ |
0.51 |
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$ |
0.22 |
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Shares used in computing diluted per share data |
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49,413 |
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50,477 |
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NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
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March 31, |
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December 31, |
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2015 |
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2014 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,988 |
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$ |
2,648 |
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Accounts receivable, net |
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|
211,879 |
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|
187,652 |
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Prepaid expenses and other current assets |
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|
34,655 |
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|
27,142 |
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Deferred income tax assets |
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|
11,601 |
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|
13,455 |
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|
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Total current assets |
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|
260,123 |
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|
230,897 |
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Non-current assets: |
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Property and equipment, net |
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|
71,785 |
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|
60,617 |
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Intangible assets, net |
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|
31,198 |
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|
|
26,502 |
|
Goodwill |
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|
579,331 |
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|
|
568,091 |
|
Other assets |
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|
14,455 |
|
|
|
17,386 |
|
|
|
|
|
|
|
|
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Total assets |
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$ |
956,892 |
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|
$ |
903,493 |
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|
|
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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|
|
|
|
|
|
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Accounts payable |
|
$ |
12,864 |
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|
$ |
11,735 |
|
Accrued liabilities |
|
|
17,236 |
|
|
|
11,311 |
|
Accrued compensation-related costs |
|
|
43,203 |
|
|
|
83,061 |
|
Income tax payable |
|
|
4,047 |
|
|
|
1,763 |
|
Other current liabilities |
|
|
40,127 |
|
|
|
52,526 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
117,477 |
|
|
|
160,396 |
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Deferred income tax liabilities |
|
|
77,736 |
|
|
|
76,329 |
|
Other non-current liabilities |
|
|
18,446 |
|
|
|
14,387 |
|
Bank debt non-current |
|
|
178,734 |
|
|
|
109,790 |
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
|
274,916 |
|
|
|
200,506 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
392,393 |
|
|
|
360,902 |
|
|
|
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
64 |
|
|
|
64 |
|
Additional paid-in capital |
|
|
617,985 |
|
|
|
611,882 |
|
Treasury stock |
|
|
(281,725 |
) |
|
|
(275,608 |
) |
Retained earnings |
|
|
243,480 |
|
|
|
218,337 |
|
Accumulated other comprehensive loss |
|
|
(15,305 |
) |
|
|
(12,084 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
564,499 |
|
|
|
542,591 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
956,892 |
|
|
$ |
903,493 |
|
|
|
|
|
|
|
|
|
|
Selected Data |
|
|
|
|
|
|
|
|
Days sales outstanding, net (DSO) |
|
|
80 |
|
|
|
69 |
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended March 31, |
|
|
|
2015 |
|
|
2014 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
25,143 |
|
|
$ |
10,879 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
5,355 |
|
|
|
4,309 |
|
Amortization expense |
|
|
2,269 |
|
|
|
1,362 |
|
Amortization expense - client-facing software |
|
|
253 |
|
|
|
64 |
|
Share-based compensation expense |
|
|
2,104 |
|
|
|
2,714 |
|
Accretion of interest expense |
|
|
863 |
|
|
|
164 |
|
Deferred income taxes |
|
|
3,613 |
|
|
|
7,243 |
|
Allowance for doubtful accounts receivable |
|
|
190 |
|
|
|
880 |
|
Contingent acquisition liability adjustments, net |
|
|
(14,933 |
) |
|
|
(1,160 |
) |
Gain on disposition of discontinued operations |
|
|
|
|
|
|
(509 |
) |
Changes in assets and liabilities (net of acquisitions and dispositions): |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(24,434 |
) |
|
|
(20,350 |
) |
Prepaid expenses and other assets |
|
|
(2,770 |
) |
|
|
(2,723 |
) |
Accounts payable |
|
|
1,105 |
|
|
|
(2,451 |
) |
Accrued liabilities |
|
|
3,967 |
|
|
|
(1,223 |
) |
Accrued compensation-related costs |
|
|
(39,639 |
) |
|
|
(41,322 |
) |
Income taxes payable |
|
|
836 |
|
|
|
(1,076 |
) |
Other liabilities |
|
|
2,124 |
|
|
|
(4,509 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(33,954 |
) |
|
|
(47,708 |
) |
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(12,913 |
) |
|
|
(6,492 |
) |
Acquisitions of businesses, net of cash acquired |
|
|
(21,379 |
) |
|
|
(1,500 |
) |
Proceeds from dispositions, net of selling costs |
|
|
|
|
|
|
824 |
|
Capitalized client-facing software |
|
|
(37 |
) |
|
|
(828 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(34,329 |
) |
|
|
(7,996 |
) |
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Issuances of common stock |
|
|
4,258 |
|
|
|
1,019 |
|
Repurchase of common stock |
|
|
(6,117 |
) |
|
|
(7,391 |
) |
Payments of contingent acquisition liabilities |
|
|
|
|
|
|
(107 |
) |
Repayments to banks |
|
|
(71,584 |
) |
|
|
(68,398 |
) |
Borrowings from banks |
|
|
141,394 |
|
|
|
132,354 |
|
Other, net |
|
|
(211 |
) |
|
|
(1,009 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
67,740 |
|
|
|
56,468 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(117 |
) |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
(660 |
) |
|
|
770 |
|
Cash and cash equivalents at beginning of the period |
|
|
2,648 |
|
|
|
1,968 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period |
|
$ |
1,988 |
|
|
$ |
2,738 |
|
|
|
|
|
|
|
|
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (2)
(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 Companys operations and financial results and believes they are useful indicators of operating performance and the Companys 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 |
|
adjusted Earnings Per Share (3) |
|
March 31, |
|
|
|
2015 |
|
|
2014 |
|
Severance expense |
|
$ |
1,503 |
|
|
$ |
505 |
|
Income tax benefit (4) |
|
|
(520 |
) |
|
|
(199 |
) |
|
|
|
|
|
|
|
|
|
Tax-effected impact of severance expense |
|
$ |
983 |
|
|
$ |
306 |
|
|
|
|
|
|
|
|
|
|
Other operating benefit - contingent acquisition liability adjustment, net |
|
$ |
(14,933 |
) |
|
$ |
(1,160 |
) |
Income tax (benefit) expense (4)(5) |
|
|
(183 |
) |
|
|
468 |
|
|
|
|
|
|
|
|
|
|
Tax-effected impact of other operating benefit - contingent acquisition liability adjustment, net |
|
$ |
(15,116 |
) |
|
$ |
(692 |
) |
|
|
|
|
|
|
|
|
|
Other operating costs - office consolidation |
|
$ |
936 |
|
|
$ |
|
|
Income tax benefit (4) |
|
|
(379 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-effected impact of other operating costs - office consolidation |
|
$ |
557 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
EBITDA reconciliation: |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
33,263 |
|
|
$ |
17,315 |
|
Depreciation expense |
|
|
5,355 |
|
|
|
4,309 |
|
Amortization expense |
|
|
2,269 |
|
|
|
1,362 |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
40,887 |
|
|
$ |
22,986 |
|
Severance expense |
|
|
1,503 |
|
|
|
505 |
|
Other operating benefit - contingent acquisition liability adjustment, net |
|
|
(14,933 |
) |
|
|
(1,160 |
) |
Other operating costs - office consolidation |
|
|
936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
28,393 |
|
|
$ |
22,331 |
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
25,143 |
|
|
$ |
10,370 |
|
Tax-effected impact of severance expense |
|
|
983 |
|
|
|
306 |
|
Tax-effected impact of other operating benefit - contingent acquisition liability adjustment, net |
|
|
(15,116 |
) |
|
|
(692 |
) |
Tax-effected impact of other operating costs - office consolidation |
|
|
557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
11,567 |
|
|
$ |
9,984 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing adjusted per diluted share data |
|
|
49,413 |
|
|
|
50,477 |
|
Adjusted earnings per share |
|
$ |
0.23 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
|
Free Cash Flow (6) |
|
March 31, |
|
|
|
2015 |
|
|
2014 |
|
Net cash used in operating activities |
|
$ |
(33,954 |
) |
|
$ |
(47,708 |
) |
Changes in assets and liabilities |
|
|
58,811 |
|
|
|
73,654 |
|
Allowance for doubtful accounts receivable |
|
|
(190 |
) |
|
|
(880 |
) |
Purchases of property and equipment |
|
|
(12,913 |
) |
|
|
(6,492 |
) |
Payments of contingent acquisition liabilities |
|
|
|
|
|
|
(107 |
) |
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
$ |
11,754 |
|
|
$ |
18,467 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At |
|
Leverage Ratio (7) |
|
March 31, |
|
|
|
2015 |
|
|
2014 |
|
Adjusted EBITDA for prior twelve-month period |
|
$ |
122,285 |
|
|
$ |
117,454 |
|
Bank debt |
|
$ |
178,734 |
|
|
$ |
120,835 |
|
Leverage ratio |
|
|
1.46 |
|
|
|
1.03 |
|
Footnotes
(1) Per share data may not sum due to
rounding.
(2) All non-GAAP financial measures are presented on a continuing operations basis unless otherwise noted.
(3) 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 Companys results
of operations across periods.
(4) Effective income tax expense (benefit) has been determined based on specific tax jurisdiction.
(5) A portion of the deferred contingent acquisition liability adjustment for the quarter ended March 31, 2015 was non-taxable in nature.
(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 Companys debt obligations.
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