Navigant reports fourth quarter and full year 2016 financial results;
provides 2017 outlook
Chicago--(business wire)--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 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. selected data (unaudited) ebitda, adjusted ebitda, adjusted net income and adjusted earnings per share (2) free cash flow (7) leverage ratio (8) organic growth (9)
