Navigant (NYSE: NCI) today announced financial results for the
fourth quarter and the full year ended December 31, 2016. The
Company also introduced its business and financial outlook for
2017.
Financial Summary and Highlights:
- Full year 2016 total revenues surpassed
the billion-dollar threshold for the first time in Navigant’s
history at $1.03 billion
- Full year 2016 revenues before
reimbursements (RBR) of $938.7 million increased 13%, with 9%
organic growth, compared to full year 2015
- Full year 2016 net income was $58.1
million, or $1.19 per share, compared to $60.3 million, or $1.23
per share, for full year 2015
- Full year 2016 adjusted earnings per
share (EPS) of $1.27 was up 19% over full year 2015
“Navigant delivered outstanding results in 2016, far exceeding
our historical trends in top and bottom line growth, our original
estimates for the year and general economic growth,” commented
Julie Howard, Chairman and Chief Executive Officer. “Seamless
execution on our strategic plans and the clear alignment of our
professionals’ expertise to the transformational issues impacting
our clients translated into strong business performance. We are
very pleased to have delivered significant value to our
shareholders as a result. Looking ahead, I view 2017 with measured
optimism. We plan to remain nimble in aligning our resources and
capabilities to address the potential changes that may occur for
our clients as the regulatory environment evolves.”
Navigant reported fourth quarter 2016 RBR of $239.7 million, a
13% increase (9% organic growth), compared to $212.0 million for
fourth quarter 2015. Total revenues increased 14% to $266.1 million
for fourth quarter 2016 compared to $232.6 million for fourth
quarter 2015. Net income for fourth quarter 2016 was $13.5 million,
or $0.28 per share, compared to $13.2 million, or $0.27 per share,
in the prior year fourth quarter. Adjusted EPS was $0.30 for fourth
quarter 2016, up 7% compared to fourth quarter 2015. Fourth quarter
2016 adjusted EBITDA was $34.8 million, a 13% increase, compared to
$30.9 million for the same period in 2015. Adjusted EBITDA margin
(adjusted EBITDA as a percent of RBR) for fourth quarter 2016 was
14.5%, flat compared to fourth quarter 2015.
RBR for full year 2016 increased 13% (9% organic growth) on a
year-over-year basis to $938.7 million compared to $833.8 million
for full year 2015. Total revenues for full year 2016 increased 13%
on a year-over-year basis to $1.03 billion compared to $919.5
million for full year 2015. Net income for full year 2016 was $58.1
million, or $1.19 per share, compared to $60.3 million, or $1.23
per share, in 2015. Adjusted EPS was $1.27 for full year 2016, up
19% compared to full year 2015. Full year 2016 adjusted EBITDA was
$142.3 million, an 18% increase, compared to $120.9 million for
full year 2015. Adjusted EBITDA margin for full year 2016 increased
to 15.2% compared to 14.5% for full year 2015.
“We made significant progress on our growth strategy while
strengthening our financial position during 2016,” said Stephen
Lieberman, Executive Vice President and Chief Financial Officer.
“We completed strategic acquisitions and made investments to
complement and enhance our core businesses, while also remaining
intensely focused on strong capital management. Going forward, our
emphasis will be on operating more efficiently to advance our
growth agenda and to meet the financial targets we set forth
today.”
Segment Financial
Highlights
For the quarter ended For the year ended
December 31, December 31, 2016
2015 Change 2016
2015 Change RBR ($000) Healthcare $
91,679 $ 76,059 20.5 % $ 354,268 $ 288,798 22.7 % Energy 31,313
27,511 13.8 % 115,940 106,023 9.4 % Financial Services Advisory and
Compliance 38,257 31,605 21.0 % 152,166 124,359 22.4 % Disputes,
Forensics & Legal Technology 78,422
76,820 2.1 % 316,372
314,628 0.6 % Total Company $
239,671 $ 211,995 13.1 % $
938,746 $ 833,808 12.6 %
Total
Revenues ($000) Healthcare $ 100,712 $ 83,082 21.2 % $ 389,233
$ 313,884 24.0 % Energy 37,402 31,785 17.7 % 133,612 124,491 7.3 %
Financial Services Advisory and Compliance 44,733 35,151 27.3 %
173,391 142,959 21.3 % Disputes, Forensics & Legal Technology
83,254 82,600 0.8
% 338,244 338,152
0.0 % Total Company $ 266,101 $ 232,618
14.4 % $ 1,034,480 $ 919,486
12.5 %
Segment Operating Profit ($000) Healthcare $
30,137 $ 23,796 26.6 % $ 115,163 $ 90,869 26.7 % Energy 9,185 8,247
11.4 % 32,637 31,380 4.0 % Financial Services Advisory and
Compliance 14,765 12,476 18.3 % 63,464 49,130 29.2 % Disputes,
Forensics & Legal Technology 24,913
24,014 3.7 % 108,685
102,449 6.1 % Total Company $
79,000 $ 68,533 15.3 % $ 319,949
$ 273,828 16.8 %
Segment Operating
Margin (% of RBR) Healthcare 32.9 % 31.3 % 32.5 % 31.5 % Energy
29.3 % 30.0 % 28.1 % 29.6 % Financial Services Advisory and
Compliance 38.6 % 39.5 % 41.7 % 39.5 % Disputes, Forensics &
Legal Technology 31.8 % 31.3 %
34.4 % 32.6 %
Total Company 33.0 % 32.3 %
34.1 % 32.8 %
Healthcare segment RBR increased 21% for fourth quarter 2016 and
23% for full year 2016 compared to the respective periods in 2015,
with more than half of that growth organic. Strength in both fourth
quarter 2016 and full year 2016 was driven by continued demand for
large, strategy-led transformation projects and revenue cycle
consulting engagements. Segment operating profit was up 27% in both
fourth quarter 2016 and full year 2016, compared to the respective
periods of 2015.
Energy segment RBR increased 14% for fourth quarter 2016 on a
year-over-year basis, primarily driven by contributions from the
Ecofys acquisition announced in November 2016. Full year 2016 RBR
was up 9% from full year 2015, with more than half of that growth
organic, reflecting an increase in demand for strategy and
operations projects for utilities and energy efficiency evaluation
and standards engagements driven largely by increased penetration
of key client accounts. Segment operating profit was up 11% in
fourth quarter 2016 and up 4% in full year 2016, compared to the
respective periods in 2015.
The Financial Services Advisory and Compliance segment RBR for
fourth quarter 2016 increased 21% compared to the prior year
quarter and increased 22% for full year 2016 compared to full year
2015, all on an organic basis. Strength was driven primarily by
continued demand for financial crimes consulting expertise and an
increase in compliance and controls engagements for major financial
institutions, as compared to the prior year periods. Segment
operating profit was up 18% in fourth quarter 2016 and up 29% in
full year 2016, compared to the respective periods of 2015, driven
by RBR growth, better pricing and greater use of lower cost,
flexible resources.
The Disputes, Forensics & Legal Technology segment RBR
increased 2% for fourth quarter 2016 and 1% for full year 2016
compared to the respective periods in 2015, all on an organic
basis. Growth in both fourth quarter 2016 and full year 2016 was
primarily driven by the continued strong demand for our global
expertise in complex industrial, infrastructure and commercial
project matters and an increase in performance-based fees
associated with mass tort claims work. Segment operating profit was
up 4% in fourth quarter 2016 and up 6% in full year 2016 compared
to the respective periods of 2015.
Cash Flow
Net cash provided by operating activities for fourth quarter
2016 was $54.4 million compared to $49.0 million for fourth quarter
2015, and was $110.0 for full year 2016 compared to $83.1 million
for full year 2015, as a result of improved earnings. Free cash
flow increased to $7.9 million for fourth quarter 2016 compared to
$7.5 million for the same period in 2015, primarily driven by a
decrease in deferred acquisition payments, partially offset by
increased capital expenditures. Full year 2016 free cash flow was
$78.8 million compared to $49.0 million for full year 2015,
reflecting improved operating performance, decreased capital
expenditures and a decrease in deferred acquisition payments. Days
Sales Outstanding was 81 days as of December 31, 2016, up five days
compared to December 31, 2015.
Bank debt was $135.0 million at December 31, 2016, compared to
$173.7 million at December 31, 2015 and $161.2 million at September
30, 2016. Leverage (bank debt divided by trailing twelve month
adjusted EBITDA) was 0.95 at December 31, 2016, compared to 1.44 at
December 31, 2015 and 1.17 at September 30, 2016.
Navigant repurchased 291,495 shares of common stock during
fourth quarter 2016 at an aggregate cost of $6.3 million and an
average cost of $21.46 per share. For full year 2016, the Company
repurchased approximately 1.4 million shares of common stock at an
aggregate cost of $25.1 million and an average cost of $17.45 per
share. As of December 31, 2016, approximately $63.0 million
remained available under the Company’s share repurchase
authorization.
2017 Outlook
Navigant is introducing its 2017 outlook. Full year 2017 RBR is
expected to range between $975 million and $1.010 billion while
2017 total revenues are estimated to be between $1.075 billion and
$1.115 billion. Adjusted EBITDA for the full year 2017 is expected
to range between $145 and $156 million and adjusted EPS for the
full year 2017 is estimated to be between $1.29 and $1.36.
Non-GAAP Financial
Information
This press release includes certain non-GAAP financial measures
as defined by the Securities and Exchange Commission.
Reconciliations of these non-GAAP financial measures to the most
directly comparable financial measure calculated and presented in
accordance with generally accepted accounting principles (GAAP) are
included in the financial schedules attached to this press release.
This information should be considered as supplemental in nature and
not as a substitute for, or superior to, any measure of performance
prepared in accordance with GAAP.
No reconciliation of Navigant’s 2017 adjusted EBITDA guidance
and 2017 adjusted EPS guidance, both of which exclude the impact
and tax-effected impact of severance expense and other operating
costs (benefit), respectively, is included in the financial
schedules attached to this press release. Navigant is not able to
accurately forecast the excluded items at the level of precision
that would be required to be included in the most directly
comparable GAAP financial measure without unreasonable efforts.
Conference Call Details
Navigant will host a conference call to discuss the Company’s
fourth quarter and full year 2016 results at 10:00 a.m. Eastern
Time (9:00 a.m. Central Time) on Thursday, February 16, 2017. The
conference call may be accessed via the Navigant website
(investors.navigant.com) or by dialing 888.455.9733 (630.395.0358
for international callers) and referencing pass code “NCI.” An
archived version of the webcast will also be available via the
Navigant website. A report of financial and related supplemental
information is also available via the Navigant website.
About Navigant
Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global
professional services firm that helps clients take control of their
future. Navigant’s professionals apply deep industry knowledge,
substantive technical expertise, and an enterprising approach to
help clients build, manage and/or protect their business interests.
With a focus on industries and clients facing transformational
change and significant regulatory or legal pressures, the Firm
primarily serves clients in the healthcare, energy and financial
services markets. Across a range of advisory, consulting,
outsourcing, and technology/analytics services, Navigant’s
practitioners bring sharp insight that pinpoints opportunities and
delivers powerful results. More information about Navigant can be
found at navigant.com.
Statements included in this press release which are not
historical in nature are forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may generally be identified by words
such as “anticipate,” “believe,” ”may,” “could,” “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 or tax rates, laws or regulations;
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; brand equity; 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; government contracting; professional liability;
information security; the adequacy of our business, financial and
information systems and technology; maintenance of effective
internal controls; potential legislative and regulatory changes;
continued and sufficient access to capital; compliance with
covenants in our credit agreement; interest rate risk; and market
and general economic and political conditions. Further information
on these and other potential factors that could affect the
Company’s financial results are included under the “Risk Factors”
section of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2015, and elsewhere in the Company’s filings
with the Securities and Exchange Commission (SEC), which are
available on the SEC’s website or at investors.navigant.com. The
Company cannot guarantee any future results, levels of activity,
performance or achievement and undertakes no obligation to update
any of its forward-looking statements.
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME (In thousands, except per share
data(1)) (Unaudited) For
the quarter ended For the year ended December 31,
December 31, 2016 2015 2016
2015 Revenues: Revenues before reimbursements $
239,671 $ 211,995 $ 938,746 $ 833,808 Reimbursements 26,430
20,623 95,734
85,678 Total revenues 266,101 232,618 1,034,480
919,486 Cost of services: Cost of services before reimbursable
expenses 163,968 146,195 631,935 571,894 Reimbursable expenses
26,430 20,623 95,734
85,678 Total cost of services 190,398
166,818 727,669 657,572 General and administrative expenses 42,490
36,100 168,954 147,462 Depreciation expense 7,197 6,579 27,742
23,612 Amortization expense 2,790 1,963 11,507 8,613 Other
operating costs (benefit): Contingent acquisition liability
adjustments, net - (422 ) 1,330 (13,047 ) Office consolidation, net
368 26 542 2,766 Loss on disposition of assets - - - 283 Other
impairment - - -
98 Operating income 22,858 21,554 96,736
92,127 Interest expense 1,236 928 5,235 4,916 Interest income (31 )
(72 ) (141 ) (250 ) Other income, net (635 )
(212 ) (1,769 ) (692 ) Income before income
tax expense 22,288 20,910 93,411 88,153 Income tax expense
8,784 7,711 35,313
27,808 Net income $ 13,504 $ 13,199
$ 58,098 $ 60,345 Basic
per share data Net income $ 0.29 $ 0.28 $ 1.23 $ 1.26 Shares used
in computing basic per share data 47,026 47,516 47,343 47,906
Diluted per share data Net income $ 0.28 $ 0.27 $ 1.19 $
1.23 Shares used in computing diluted per share data 48,618 49,007
48,813 49,224
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA (In
thousands, except DSO data) December 31,
December 31, 2016 2015 ASSETS
Current assets: Cash and cash equivalents $ 8,291 $ 8,895 Accounts
receivable, net 261,755 216,660 Prepaid expenses and other current
assets 29,762 29,729 Total
current assets 299,808 255,284 Non-current assets: Property and
equipment, net 82,953 76,717 Intangible assets, net 28,727 38,160
Goodwill 625,027 623,204 Other assets 18,282
22,531 Total assets $ 1,054,797 $
1,015,896 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 11,871 $ 9,497 Accrued
liabilities 16,144 10,719 Accrued compensation-related costs
106,779 91,577 Income tax payable 1,564 - Other current liabilities
38,616 32,147 Total current
liabilities 174,974 143,940 Non-current liabilities: Deferred
income tax liabilities 77,737 75,719 Other non-current liabilities
32,579 28,956 Bank debt non-current 135,030
173,743 Total non-current liabilities 245,346
278,418 Total liabilities
420,320 422,358 Stockholders' equity:
Common stock 57 64 Additional paid-in capital 644,519 627,976
Treasury stock (181,361 ) (296,624 ) Retained earnings 196,468
278,682 Accumulated other comprehensive loss (25,206 )
(16,560 ) Total stockholders' equity 634,477
593,538 Total liabilities and
stockholders' equity $ 1,054,797 $ 1,015,896
Selected Data
(unaudited)
Days sales outstanding, net (DSO) 81 76
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, 2016
2015 2016 2015 Cash flows
from operating activities: Net income $ 13,504 $ 13,199 $ 58,098 $
60,345 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation expense 7,197 6,579 27,742
23,612 Amortization expense 2,790 1,963 11,507 8,613 Amortization
expense - client-facing software 199 191 725 867 Share-based
compensation expense 3,626 2,122 13,071 10,328 Accretion of
interest expense 262 21 788 1,185 Deferred income taxes (2,779 )
7,097 (2,154 ) 13,807 Allowance for doubtful accounts receivable
1,809 886 8,815 2,578 Contingent acquisition liability adjustments,
net - (422 ) 1,330 (13,047 ) Other, net (1,705 ) 26 (1,672 ) 546
Changes in assets and liabilities (net of acquisitions and
dispositions): Accounts receivable 13,945 7,812 (49,972 ) (27,875 )
Prepaid expenses and other assets (1,126 ) 2,142 4,189 (5,575 )
Accounts payable 671 414 1,630 (2,271 ) Accrued liabilities (210 )
(1,695 ) 874 476 Accrued compensation-related costs 14,151 10,623
14,447 6,875 Income taxes payable (11,167 ) (5,060 ) 5,773 (4,081 )
Other liabilities 13,229 3,078
14,836 6,696 Net cash
provided by operating activities 54,396 48,976 110,027 83,079
Cash flows from investing activities: Purchases of property
and equipment (15,201 ) (7,934 ) (28,665 ) (39,094 ) Acquisitions
of businesses, net of cash acquired (7,431 ) (42,658 ) (15,426 )
(64,037 ) Other acquisition payments - - (5,500 ) - Payments of
acquisition liabilities - (11,350 ) (1,165 ) (13,546 ) Capitalized
client-facing software (311 ) (124 )
(770 ) (735 ) Net cash used in investing
activities (22,943 ) (62,066 ) (51,526 ) (117,412 ) Cash
flows from financing activities: Issuances of common stock 731 486
4,299 5,974 Repurchases of common stock (6,256 ) (5,814 ) (25,057 )
(24,021 ) Payments of contingent acquisition liabilities - (4,000 )
(828 ) (4,592 ) Repayments to banks (101,471 ) (101,822 ) (410,197
) (332,455 ) Borrowings from banks 76,861 129,306 375,708 397,320
Other, net 79 (116 ) (2,723 )
(1,415 ) Net cash (used in) provided by financing
activities (30,056 ) 18,040
(58,798 ) 40,811 Effect of exchange
rate changes on cash and cash equivalents (150 )
(72 ) (307 ) (231 ) Net increase
(decrease) in cash and cash equivalents 1,247 4,878 (604 ) 6,247
Cash and cash equivalents at beginning of the period 7,044
4,017 8,895
2,648 Cash and cash equivalents at end of the period $ 8,291
$ 8,895 $ 8,291 $ 8,895
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES (In thousands, except per
share data and percentages) (Unaudited)
This press release includes certain non-GAAP financial measures as
defined by the Securities and Exchange Commission. Below are the
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measure calculated and presented in
accordance with generally accepted accounting principles (GAAP).
This information should be considered as supplemental in nature and
not as a substitute for, or superior to, any measure of performance
prepared in accordance with GAAP. Management uses these non-GAAP
financial measures in addition to GAAP financial measures to assess
the Company's operations and financial results and believes they
are useful indicators of operating performance and the Company's
ability to generate cash flows from operations that are available
for interest, debt service, taxes and capital expenditures.
Investors should recognize that these non-GAAP financial measures
may not be comparable to similarly-titled measures of other
companies.
EBITDA, adjusted
EBITDA, adjusted Net Income and
For the quarter ended For the year
ended
adjusted Earnings
Per Share (2)
December 31, December 31, 2016
2015 2016 2015 Severance expense $
1,557 $ 1,151 $ 4,433 $ 6,490 Income tax benefit (3)
(594 ) (378 ) (1,622 )
(2,247 ) Tax-effected impact of severance expense $ 963
$ 773 $ 2,811 $ 4,243
Other operating costs (benefit) - contingent acquisition liability
adjustment, net $ - $ (422 ) $ 1,330 $ (13,047 ) Income tax expense
(benefit) (3)(4)(5) - 166
(534 ) (924 ) Tax-effected impact of other operating
costs (benefit) - contingent acquisition liability adjustment, net
$ - $ (256 ) $ 796 $ (13,971 )
Other operating costs - office consolidation, net $ 368 $ 26 $ 542
$ 2,766 Income tax benefit (3) (147 ) (11 )
(217 ) (1,119 ) Tax-effected impact of other
operating costs - office consolidation, net $ 221 $
15 $ 325 $ 1,647 Other operating
costs - loss on disposition of assets $ - $ - $ - $ 283 Income tax
benefit (3)(6) - - -
- Tax-effected impact of other
operating costs - loss on disposition of assets $ - $
- $ - $ 283 Other operating
costs - other impairment $ - $ - $ - $ 98 Income tax benefit (3)
- - -
(40 ) Tax-effected impact of other operating costs - other
impairment $ - $ - $ - $ 58
EBITDA reconciliation: Net Income $ 13,504 $ 13,199 $
58,098 $ 60,345 Interest expense 1,236 928 5,235 4,916 Interest
income (31 ) (72 ) (141 ) (250 ) Other income, net (635 ) (212 )
(1,769 ) (692 ) Income tax expense 8,784 7,711 35,313 27,808
Depreciation expense 7,197 6,579 27,742 23,612 Accelerated
depreciation - office consolidation (included in other operating
costs - office consolidation, net) - 26 33 165 Amortization expense
2,790 1,963 11,507
8,613 EBITDA $ 32,845 $ 30,122 $ 136,018 $
124,517 Severance expense 1,557 1,151 4,433 6,490 Other operating
costs (benefit) - contingent acquisition liability adjustment, net
- (422 ) 1,330 (13,047 ) Other operating costs - office
consolidation, net (excluding accelerated depreciation - office
consolidation, above) 368 - 509 2,601 Other operating costs - loss
on disposition of assets - - - 283 Other operating costs - other
impairment - - -
98 Adjusted EBITDA $ 34,770 $
30,851 $ 142,290 $ 120,942 Net
income $ 13,504 $ 13,199 $ 58,098 $ 60,345 Tax-effected impact of
severance expense 963 773 2,811 4,243 Tax-effected impact of other
operating costs (benefit) - contingent acquisition liability
adjustment, net - (256 ) 796 (13,971 ) Tax-effected impact of other
operating costs - office consolidation, net 221 15 325 1,647
Tax-effected impact of other operating costs - loss on disposition
of assets - - - 283 Tax-effected impact of other operating costs -
other impairment - - -
58 Adjusted net income $ 14,688
$ 13,731 $ 62,030 $ 52,605
Shares used in computing adjusted per diluted share data 48,618
49,007 48,813 49,224 Adjusted earnings per share $ 0.30
$ 0.28 $ 1.27 $ 1.07
For the quarter ended For the year ended
Free Cash Flow
(7)
December 31, December 31, 2016
2015 2016 2015 Net cash provided by
operating activities $ 54,396 $ 48,976 $ 110,027 $ 83,079 Changes
in assets and liabilities (29,493 ) (17,314 ) 8,223 25,755
Allowance for doubtful accounts receivable (1,809 ) (886 ) (8,815 )
(2,578 ) Purchases of property and equipment (15,201 ) (7,934 )
(28,665 ) (39,094 ) Payments of acquisition liabilities - (11,350 )
(1,165 ) (13,546 ) Payments of contingent acquisition liabilities
- (4,000 ) (828 )
(4,592 ) Free Cash Flow $ 7,893 $ 7,492 $
78,777 $ 49,024
Leverage Ratio
(8)
At December 31, 2016 2015 Adjusted
EBITDA for prior twelve-month period $ 142,290 $ 120,942 Bank debt
$ 135,030 $ 173,743 Leverage ratio 0.95 1.44
For the
quarter ended For the year ended
Organic Growth
(9)
December 31, December 31, 2016
2016 Growth 2016 2015
Growth Revenues before reimbursements $ 239,671 $
211,995 13.1 % $ 938,746 $ 833,808 12.6 % Pro forma acquisition
adjustment 1,782 12,219 20,367 50,502 Currency impact 2,226
- 6,157
- Organic RBR $ 243,679 $
224,214 8.7 % $ 965,270 $ 884,310 9.2 % Footnotes (1) Per share
data may not sum due to rounding. (2) EBITDA is earnings
before interest, taxes, depreciation and amortization. Adjusted
EBITDA excludes the impact of severance expense and other operating
costs (benefit). Adjusted net income and adjusted earnings per
share exclude net income and per share net income impact of
severance expense and other operating costs (benefit). Severance
expense and other operating costs (benefit) are not considered to
be non-recurring, infrequent or unusual to our business. Management
believes that these measures provide investors with enhanced
comparability of the Company's results of operations across
periods. (3) Effective income tax expense (benefit) has been
determined based on specific tax jurisdiction. (4) A portion
of the deferred contingent acquisition liability adjustment for the
year ended December 31, 2015 was non-taxable in nature. (5)
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 during the year ended December 31, 2015.
(6) 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. (7) 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. (8) 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. (9) Organic growth
represents revenues before reimbursements adjusted to include the
impact of our acquisitions as if we owned them from the beginning
of each comparable period and adjusted to exclude the impact of
foreign currency exchange rate fluctuations. Management believes
that organic growth reflects the growth of our existing business
and is, therefore, useful in analyzing the Company's financial
condition and results of operations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170216005102/en/
Aaron MilesNavigant Investor
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