Navigant (NYSE: NCI) today reported financial results for the
quarter ended June 30, 2019.
Second quarter 2019 highlights:
- Revenues and revenues before reimbursements (RBR) were $223.1
and $196.6 million respectively, up 21% and 19% compared to second
quarter 2018
- Adjusted EBITDA from continuing operations for the second
quarter 2019 of $20.9 million was up $3.3 million, or 19%, compared
to the prior year period
- Net income from continuing operations attributable to Navigant
Consulting, Inc. of $8.6 million, or $0.22 per share, was up $2.5
million or 40% compared to the second quarter 2018
- Adjusted Earnings per Share (EPS) from continuing operations of
$0.29, which includes per share income attributable to
non-controlling interest, net of tax, increased $0.11 compared to
second quarter 2018
MERGER AGREEMENT
In a separate announcement, today, Guidehouse, a portfolio
company of Veritas Capital, agreed to acquire Navigant in an
all-cash transaction valued at $1.1 billion (“Proposed Merger”).
Under the terms of the Proposed Merger, which is subject to
shareholder and regulatory approval, as well as other customary
closing conditions, Navigant shareholders will receive $28.00 per
share in cash for each Navigant share owned upon closing of the
transaction. Due to this announcement, the Company’s earnings
conference call previously scheduled for August 8, 2019 has been
canceled, and the Company does not intend to update its outstanding
2019 financial guidance. For further information on the Proposed
Merger, please refer to the Company’s current report on Form 8-K
filed with the U.S. Securities and Exchange Commission (the “SEC”)
on August 2, 2019.
SECOND QUARTER 2019 FINANCIAL
RESULTS
For the quarter ended June
30,
(Dollars in millions, excluding per
share data)
2019
2018
Increase
Revenue
$
223.1
$
184.7
$
38.4
RBR
$
196.6
$
165.2
$
31.4
Net income from cont. ops. attrib. to
Navigant Consulting, Inc.
$
8.6
$
6.1
$
2.5
Adjusted EBITDA (1)
$
20.9
$
17.6
$
3.3
Adjusted Earnings per Share (1)
$
0.29
$
0.18
$
0.11
(1) From continuing operations, which
includes results attributable to non-controlling interests. See
definition and reconciliation of non-GAAP measures elsewhere in
this release
Navigant reported second quarter 2019 revenues and RBR of $223.1
million and $196.6 million respectively, up 21% and 19% compared to
the second quarter 2018. The quarter benefited from robust growth
in managed services, including strong performance at the Health
System Solutions (HSS) venture, which commenced operations in July
of 2018, as well as continued strong growth in both Healthcare and
Energy consulting. These items were partially offset by lower RBR
within the Financial Services Advisory and Compliance (FSAC)
segment.
Adjusted EBITDA from continuing operations in the second quarter
2019 was $20.9 million, up 19% from the prior year period primarily
due to continued strong performance from HSS and solid margin flow
through in Healthcare consulting.
Net income from continuing operations attributable to Navigant
Consulting, Inc. of $8.6 million, or $0.22 per share, was up $2.5
million compared to the second quarter 2018 as the operating
performance discussed above was further aided by favorable net
interest costs, lower depreciation and amortization, as well as a
lower share count in the current year period. These items were
partially offset by higher income attributable to non-controlling
interest, net of tax, in the current year period due to the
first-year contributions from HSS. Net income attributable to
Navigant Consulting, Inc., which includes results from discontinued
operations, was down compared to the prior year period reflecting
the divestiture of the Company’s former Disputes, Forensics and
Legal Technology segment and transaction advisory services practice
completed in the third quarter 2018.
Second quarter 2019 Adjusted EPS from continuing operations of
$0.29, which includes $0.06 per share of income attributable to
non-controlling interest, net of tax, increased $0.11 compared to
the second quarter 2018 driven by the items discussed above.
SECOND QUARTER 2019 SEGMENT
RESULTS
For the quarter ended June
30,
(Dollars in millions, numbers may not
foot due to rounding)
2019
2018
Increase / (Decrease)
RBR
Healthcare
$
127.4
$
91.6
$
35.8
Energy
40.0
36.6
3.4
Financial Services Advisory and
Compliance
29.1
37.0
(7.9
)
Total Company
$
196.6
$
165.2
$
31.4
Revenues
Healthcare
$
136.5
$
100.3
$
36.2
Energy
55.5
44.2
11.3
Financial Services Advisory and
Compliance
31.1
40.3
(9.2
)
Total Company
$
223.1
$
184.7
$
38.4
Segment Operating Profit
Healthcare
$
40.1
$
27.4
$
12.8
Energy
13.1
12.7
0.5
Financial Services Advisory and
Compliance
6.4
13.4
(7.0
)
Total Company
$
59.7
$
53.4
$
6.3
Segment Operating Margin (% of
RBR)
Healthcare
31.5
%
29.9
%
1.6
%
Energy
32.8
%
34.6
%
-1.8
%
Financial Services Advisory and
Compliance
21.9
%
36.2
%
-14.3
%
Total Company
30.4
%
32.3
%
-1.9
%
Healthcare segment RBR of $127.4 million increased 39% for
second quarter 2019 compared to the same prior year period driven
by improved demand for Healthcare consulting services and
stronger-than-expected contributions from HSS. Segment operating
profit of $40.1 million increased $12.8 million in second quarter
2019 compared to second quarter 2018 driven by the first-year
contributions from HSS, as well as strong demand in Healthcare
consulting supporting increased headcount and driving improved
consulting utilization.
Energy segment RBR for second quarter 2019 of $40.0 million
increased 9% compared to second quarter 2018, driven by continued
robust demand for Energy expertise from both commercial and
government clients, particularly in North America. Segment
operating profit of $13.1 million for the quarter was up 3%
compared to the second quarter 2018 as revenue growth in North
America was offset by muted demand for research and subscription
services, as well as softer demand for consulting services in
Europe.
Financial Services Advisory and Compliance segment RBR for the
second quarter 2019 finished at $29.1 million, down 21% compared to
second quarter 2018 primarily due to the wind-down of a large
monitorship engagement coupled with continued softness as segment
leadership works to rebuild and convert the sales pipeline. Segment
operating profit of $6.4 million decreased $7.0 million compared to
the prior year period driven by the aforementioned top-line
challenges.
CASH FLOW AND BALANCE
SHEET
Second quarter 2019 net cash provided by operating activities,
which includes results from discontinued operations, was $13.5
million compared to $53.5 million in the second quarter 2018 driven
by lower net income in the current year period due to the
contribution of discontinued operations in second quarter 2018, as
well as unfavorable working capital in the current year period.
Days Sales Outstanding for continuing operations was 72 days as of
June 30, 2019, down 1 day compared to March 31, 2019. At the end of
the second quarter 2019, the Company’s $350 million credit facility
remained undrawn and cash and cash equivalents were $90.6
million.
Navigant continued executing its share buyback program by
repurchasing 983 thousand shares of common stock during the second
quarter of 2019 at an aggregate cost of $20.8 million and an
average price of $21.11 per share.
BASIS OF PRESENTATION
In August 2018, the Company sold its former Disputes, Forensics
and Legal Technology segment and its transaction advisory services
practice within the FSAC segment and, as such, the results have
been reclassified to discontinued operations to reflect this
transaction for all periods presented in this release. In July
2018, the Company commenced operation of HSS with Baptist Health
South Florida. Navigant has a 60% financial and controlling
interest in the venture and as such fully consolidates its
operations. As a result, the Company reports income attributable to
non-controlling interests, net of tax in its consolidated
statements of comprehensive income as well as non-controlling
interest included in its balance sheet.
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.
Navigant has provided guidance regarding Adjusted EBITDA,
Adjusted EPS, both of which exclude the impact of severance expense
and other operating costs (benefit), as applicable. Navigant has
also provided guidance regarding Adjusted Free Cash Flow, which
excludes changes in assets and liabilities and allowance for
doubtful accounts receivable less cash payments for property and
equipment and deferred acquisition related payments.
- Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings
per Share (EPS) Adjusted EBITDA is EBITDA – earnings before
interest, taxes, depreciation, and amortization – excluding the
impact of severance expense and other operating costs (benefit), as
applicable. Adjusted Net Income and Adjusted Earnings per Share
exclude the net income and per share net income impact of severance
expense, other operating costs (benefit) and certain tax
adjustments, as applicable. While other operating costs (benefit)
are generally non-recurring in nature, severance expense and
certain other operating costs are not considered to be
non-recurring, infrequent or unusual to the business. Management
believes that these non-GAAP financial measures provide investors
with enhanced comparability of Navigant’s results of operations
across periods. See non-GAAP reconciliations for more details.
- Adjusted Free Cash Flow is calculated as net cash
provided by (used in) operations excluding the change in assets,
liabilities and allowance for doubtful accounts less cash payment
for property, equipment and deferred acquisition liabilities.
Adjusted Free Cash Flow does not represent cash available for
spending as it excludes certain contractual obligations such as
debt repayment. However, management believes that Adjusted Free
Cash Flow provides investors with an indicator of cash available
for on-going business operations and long-term value creation. See
non-GAAP reconciliations for more details.
CONFERENCE CALL DETAILS
Due to announcement of the Proposed Merger, the Company’s
earnings conference call previously scheduled for August 8, 2019
has been canceled.
ABOUT NAVIGANT
Navigant Consulting, Inc. (NYSE: NCI) (“the Company”) 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 markets and clients
facing transformational change and significant regulatory or legal
pressures, the firm primarily serves clients in the healthcare,
energy, and financial services industries. 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 report 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,” “should,” “could,” “intend,”
“estimate,” “expect,” “likely,” “continue,” “plan,” “projects,”
“positioned,” “outlook” and similar expressions. These statements
are based upon management’s current expectations and speak only as
of the date of this report. 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 and uncertainties that could cause actual results
to differ materially from those contained in or implied by the
forward-looking statements. These risks and uncertainties include,
but are not limited to: the satisfaction of the conditions
precedent to the consummation of the proposed merger, including,
without limitation, the receipt of stockholder and regulatory
approvals; unanticipated difficulties or expenditures relating to
the proposed merger; legal proceedings, judgments or settlements,
including those that may be instituted against the Company, the
Company’s board of directors, executive officers and others
following the announcement of the proposed merger; disruptions of
current plans and operations caused by the announcement and
pendency of the proposed merger; potential difficulties in employee
retention due to the announcement and pendency of the proposed
merger; the response of customers, suppliers, business partners and
regulators to the announcement of the proposed merger; the risk of
unanticipated costs, liabilities or an adverse impact on the
Company’s business operations arising from the Company’s provision
of post-divestiture transition services and support in connection
with the sale of the Company’s Disputes, Forensics and Legal
Technology segment and the transaction advisory services practice
within the Company’s Financial Services Advisory and Compliance
segment; 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 and complete such acquisitions
and divestitures in the time anticipated; pace, timing and
integration of acquisitions; 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 business and financial condition and the
results of operations are included in the “Risk Factors” section of
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2018,, 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 six months
ended
June 30,
June 30,
2019
2018
2019
2018
Revenues:
Revenues before reimbursements
$
196,567
$
165,224
$
382,696
$
326,669
Reimbursements
26,489
19,489
43,222
36,112
Total revenues
223,056
184,713
425,918
362,781
Cost of services:
Cost of services before reimbursable
expenses
140,405
113,121
275,761
230,057
Reimbursable expenses
26,489
19,489
43,222
36,112
Total cost of services
166,894
132,610
318,983
266,169
General and administrative expenses
35,968
34,912
71,135
71,991
Depreciation expense
4,262
4,943
8,848
9,940
Amortization expense
1,393
1,665
2,765
3,417
Other operating costs
-
2,295
32
3,278
Operating income
14,539
8,288
24,155
7,986
Interest expense
317
911
635
1,739
Interest income
(375
)
(77
)
(1,064
)
(196
)
Other expense, net
(10
)
(183
)
122
178
Income from continuing operations before
income tax expense
14,607
7,637
24,462
6,265
Income tax expense
3,682
1,509
6,729
1,734
Net income from continuing operations
10,925
6,128
17,733
4,531
Income from discontinued operations, net
of tax
523
22,698
34
36,148
Net income
11,448
28,826
17,767
40,679
Income attributable to non-controlling
interest, net of tax
(2,369
)
-
(4,407
)
-
Net income attributable to Navigant
Consulting, Inc.
$
9,079
$
28,826
$
13,360
$
40,679
Basic net income per share data
Income from continuing operations
attributable to Navigant Consulting, Inc.
$
0.22
$
0.14
$
0.34
$
0.10
Income from discontinued operations, net
of tax
$
0.01
$
0.50
$
-
$
0.80
Net income attributable to Navigant
Consulting, Inc.
$
0.23
$
0.64
$
0.34
$
0.90
Shares used in computing basic per share
data
38,654
45,106
39,436
45,113
Diluted net income per share data
Income from continuing operations
attributable to Navigant Consulting, Inc.
$
0.22
$
0.13
$
0.33
$
0.10
Income from discontinued operations, net
of tax
$
0.01
$
0.49
$
-
$
0.77
Net income attributable to Navigant
Consulting, Inc.
$
0.23
$
0.62
$
0.33
$
0.87
Shares used in computing diluted per share
data
39,616
46,549
40,512
46,692
NAVIGANT CONSULTING, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AND SELECTED DATA
(In thousands, except DSO
data)
(Unaudited)
June 30,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
90,626
$
206,920
Accounts receivable, net and contract
assets
200,820
179,923
Prepaid expenses and other current
assets
25,199
22,512
Total current assets
316,645
409,355
Non-current assets:
Property and equipment, net
62,672
63,025
Operating lease right-of-use asset
80,780
-
Intangible assets, net
14,129
14,166
Goodwill
426,060
422,357
Other assets
7,945
8,644
Total assets
$
908,231
$
917,547
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
15,219
$
13,302
Accrued liabilities
17,641
15,558
Accrued compensation-related costs
46,316
69,555
Income tax payable
3,362
13,357
Operating lease liabilities
22,735
-
Other current liabilities
23,879
34,044
Total current liabilities
129,152
145,816
Non-current liabilities:
Deferred income tax liabilities
39,258
33,901
Operating lease liabilities
81,166
-
Other non-current liabilities
2,818
25,277
Total non-current liabilities
123,242
59,178
Total liabilities
252,394
204,994
Stockholders' equity:
Common stock
50
49
Additional paid-in capital
671,153
664,473
Treasury stock
(235,216
)
(160,972
)
Retained earnings
220,983
211,543
Accumulated other comprehensive loss
(5,929
)
(6,529
)
Total Navigant Consulting Inc.
stockholders' equity
651,041
708,564
Non-controlling interest
4,796
3,989
Total stockholders' equity
655,837
712,553
Total liabilities and stockholders'
equity
$
908,231
$
917,547
Days sales outstanding, net (DSO)
72
70
NAVIGANT CONSULTING, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
For the quarter ended
For the six months
ended
June 30,
June 30,
2019
2018
2019
2018
Cash flows from operating activities:
Net income
$
11,448
$
28,826
$
17,767
$
40,679
Adjustments to reconcile net income to net
cash used in
operating activities:
Depreciation expense
4,262
6,768
8,848
13,613
Amortization expense
1,393
1,772
2,765
3,628
Share-based compensation expense
4,212
2,089
6,981
5,466
Deferred income taxes
(278
)
(6,601
)
4,808
(5,633
)
Allowance for doubtful accounts
receivable
719
3,764
1,167
6,894
Loss from disposition of discontinued
operations
(721
)
-
(49
)
-
Other, net
112
(968
)
297
39
Changes in assets and liabilities (net of
acquisitions):
Accounts receivable, net and contract
assets
(14,960
)
5,423
(21,974
)
(18,192
)
Prepaid expenses and other assets
1,874
3,088
(2,431
)
2,372
Accounts payable
2,339
593
1,916
(1,507
)
Accrued liabilities
2,264
1,886
2,145
4,086
Accrued compensation-related costs
5,502
9,334
(23,270
)
(27,124
)
Income taxes payable
(6,120
)
(602
)
(9,476
)
2,324
Lease liabilities and right-of-use
assets
(585
)
(1,410
)
Other liabilities
1,993
(1,829
)
(5,769
)
(7,949
)
Net cash provided by (used in) operating
activities
13,454
53,543
(17,685
)
18,696
Cash flows from investing activities:
Purchases of property and equipment
(5,447
)
(1,705
)
(8,454
)
(7,455
)
Acquisitions of businesses, net of cash
acquired
(120
)
-
(6,120
)
-
Other, net
(19
)
-
(19
)
Net cash used in investing activities
(5,567
)
(1,724
)
(14,574
)
(7,474
)
Cash flows from financing activities:
Issuances of common stock
608
936
1,464
2,174
Repurchases of common stock
(20,751
)
(7,490
)
(74,244
)
(18,847
)
Dividend payments
(1,926
)
-
(3,920
)
-
Repayments to banks
-
(93,335
)
-
(172,479
)
Borrowings from banks
-
57,571
-
187,248
Distributions to non-controlling interest
holder
-
-
(3,600
)
-
Other, net
(2,541
)
(4,622
)
(3,847
)
(6,218
)
Net cash used in financing activities
(24,610
)
(46,940
)
(84,147
)
(8,122
)
Effect of exchange rate changes on cash
and cash equivalents
132
(385
)
112
(409
)
Net (decrease) increase in cash and cash
equivalents
(16,591
)
4,494
(116,294
)
2,691
Cash and cash equivalents at beginning of
the period
107,217
6,646
206,920
8,449
Cash and cash equivalents at end of the
period
$
90,626
$
11,140
$
90,626
$
11,140
NAVIGANT CONSULTING, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(In thousands, except per
share data and percentages (1))
(Unaudited)
EBITDA, Adjusted
EBITDA, Adjusted Net Income and Adjusted Earnings Per Share
(2)
For the quarter ended
For the six months
ended
June 30,
June 30,
2019
2018
2019
2018
Adjusted items:
Severance expense
$
663
$
374
$
1,340
$
2,157
Income tax benefit (3)
(168
)
(99
)
(353
)
(574
)
Tax-effected impact of severance
expense
$
495
$
275
$
987
$
1,583
Other operating costs -other costs (4)
$
-
$
2,295
$
32
$
3,278
Income tax benefit (3)
-
(625
)
(9
)
(893
)
Tax-effected impact of other operating
costs - other costs
$
-
$
1,670
$
23
$
2,385
Adjusted EBITDA reconciliation:
Net income attributable to Navigant
Consulting, Inc.
$
9,079
$
28,826
$
13,360
$
40,679
Income attributable to non-controlling
interest, net of tax
2,369
-
4,407
-
Income from discontinued operations, net
of tax
(523
)
(22,698
)
(34
)
(36,148
)
Net income from continuing operations
$
10,925
$
6,128
$
17,733
$
4,531
Interest expense
317
911
635
1,739
Interest income
(375
)
(77
)
(1,064
)
(196
)
Other expense, net
(10
)
(183
)
122
178
Income tax expense
3,682
1,509
6,729
1,734
Depreciation expense
4,262
4,943
8,848
9,940
Amortization expense
1,393
1,665
2,765
3,417
EBITDA
$
20,194
$
14,896
$
35,768
$
21,343
Adjusted items:
Severance expense
663
374
1,340
2,157
Other operating costs - other costs
-
2,295
32
3,278
Adjusted EBITDA from continuing
operations
$
20,857
$
17,565
$
37,140
$
26,778
Adjusted Net Income reconciliation:
Net income attributable to Navigant
Consulting, Inc.
$
9,079
$
28,826
13,360
40,679
Income attributable to non-controlling
interest, net of tax
2,369
-
4,407
-
Income from discontinued operations, net
of tax
(523
)
(22,698
)
(34
)
(36,148
)
Net income from continuing operations
$
10,925
$
6,128
$
17,733
$
4,531
Adjusted items:
Tax-effected impact of severance
expense
495
275
987
1,583
Tax-effected impact of other operating
costs - other costs
-
1,670
23
2,385
Impact of certain income tax related items
(5)
-
100
-
1,200
Tax-effected adjusted items
495
2,045
1,010
5,168
Adjusted Net Income from continuing
operations
$
11,420
$
8,173
$
18,743
$
9,699
Shares used in computing adjusted per
diluted share data
39,616
46,549
40,512
46,692
Earnings per share from continuing
operations attributable to Navigant Consulting, Inc.
$
0.22
$
0.13
$
0.33
$
0.10
Earnings per Share attributable to
non-controlling interest
0.06
-
0.11
-
Earnings per Share from adjusted items
0.01
0.04
0.02
0.11
Adjusted Earnings per Share from
continuing operations (1)
$
0.29
$
0.18
$
0.46
$
0.21
For the quarter ended
For the six months
ended
Adjusted Free
Cash Flow (6)
June 30,
June 30,
2019
2018
2019
2018
Net cash provided by (used in) operating
activities
$
13,454
$
53,543
$
(17,685
)
$
18,696
Changes in assets and liabilities
7,693
(17,893
)
60,269
45,990
Allowance for doubtful accounts
receivable
(719
)
(3,764
)
(1,167
)
(6,894
)
Purchases of property and equipment
(5,447
)
(1,705
)
(8,454
)
(7,455
)
Payments of contingent acquisition
liabilities
-
(1,090
)
-
(1,170
)
Adjusted Free Cash Flow
$
14,981
$
29,091
$
32,963
$
49,167
Leverage Ratio
(7)
At June 30,
2019
2018
Adjusted EBITDA for prior twelve-month
period (including disc. ops. prior to sale)
$
78,020
$
134,847
Bank debt
$
-
$
147,005
Leverage Ratio
-
1.09
For the quarter ended
For the six months
ended
Organic Growth
(8)
June 30,
June 30,
2019
2018
Growth
2019
2018
Growth
Revenues before reimbursements
$
196,567
$
165,224
19.0
%
$
382,696
$
326,669
17.2
%
Pro forma acquisition adjustment
-
520
-
1,118
Currency impact
798
-
965
-
FX Neutral Organic RBR
$
197,365
$
165,744
19.1
%
$
383,661
$
327,787
17.0
%
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), as applicable.
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) and certain tax adjustments, as
applicable. While other operating costs (benefit) are generally
non-recurring in nature, severance expense and certain other
operating costs are not considered to be non-recurring, infrequent
or unusual to our business. Management believes that these non-GAAP
financial measures provide investors with enhanced comparability of
Navigant's results of operations across periods.
(3) Income tax impact has been determined based on specific tax
jurisdiction.
(4) In 2018, the Company incurred non-recurring legal costs
relating to a shareholder proxy contest, as well as non-recurring
fees and expenses relating to the divestiture of its former
Disputes, Forensics and Legal Technology segment and transaction
advisory services practice.
(5) In Q4 2018, the Company settled its 2014 income tax audit
with the IRS. The settlement resulted in an incremental tax expense
related to the timing of tax deductions on certain executive
compensation awards that required employment beyond the year of
deduction. Although tax expense also includes adjustments for the
2014-2017 tax years, the adjustment is primarily driven by the
deductions taken on our 2014 income tax return. After reaching this
settlement in Q4 2018, the Company restated the Q1-Q3 2018 Adjusted
EPS figures to reflect amounts accrued in those periods for this
settlement. The adjustment includes related interest cost.
(6) Adjusted 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.
Adjusted 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 continuing and discontinued
operations) for the prior twelve-month period. Management believes
that leverage ratio provides investors with an indicator of the
cash flows available to repay the Company's debt obligations.
(8) Organic growth represents revenues before reimbursements
from continuing operations adjusted to include the impact of our
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. 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: https://www.businesswire.com/news/home/20190802005205/en/
Kyle Bland Navigant Investor Relations 312.573.5624
kyle.bland@navigant.com
Tim Blair Navigant Corporate Communications 303.383.7344
timothy.blair@navigant.com
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