Navigant reports third quarter 2016 financial results
Chicago--(business wire)--navigant (nyse: nci) today announced financial results for the third quarter ended september 30, 2016. financial summary and highlights: third quarter 2016 revenues before reimbursements (rbr) increased 13%, with 10% organic growth, over third quarter 2015 third quarter 2016 net income was $17.2 million, or $0.35 per share, compared to $14.2 million, or $0.29 per share, in third quarter 2015 third quarter 2016 adjusted earnings per share (eps) of $0.37, up 23% compared to third quarter 2015 third quarter 2016 adjusted ebitda of $39.8 million, up 26% over third quarter 2015 raises 2016 revenue and earnings guidance navigant reported third quarter 2016 rbr of $237.1 million, a 13% increase (10% organic growth), compared to $209.6 million for third quarter 2015. total revenues increased 14% to $261.4 million for third quarter 2016 compared to $230.3 million for third quarter 2015. net income for third quarter 2016 was $17.2 million, or $0.35 per share, compared to $14.2 million, or $0.29 per share, in the prior year third quarter. adjusted eps was $0.37 for third quarter 2016, up 23% compared to third quarter 2015. third quarter 2016 adjusted ebitda was $39.8 million, a 26% increase, compared to $31.6 million for the same period in 2015. adjusted ebitda margin (adjusted ebitda as a percent of rbr) for third quarter 2016 increased to 16.8% compared to 15.1% in third quarter 2015. “our third quarter results reflect continued strong performance delivering double-digit organic growth and improved profitability,” commented julie howard, chairman and chief executive officer. “i am truly pleased that the consistent execution of our strategy in combination with a robust demand environment is bearing fruit for our stakeholders. we currently are on track to meet or exceed our expectations for the full year 2016. looking ahead, we hope to build on the momentum we have experienced to date in 2016 and enter 2017 on a strong note.” segment financial summary third quarter 2016 rbr for the healthcare segment increased 22% year-over-year, with more than half of that growth organic. the performance continued to be driven by strong demand for large, strategy-led transformation projects and revenue cycle consulting engagements. segment operating profit for third quarter 2016 was up 32% compared to the same period in 2015. energy segment rbr increased 6% for the third quarter 2016 compared to the equivalent period in 2015, all of which represented organic growth. rbr growth for the quarter reflected contributions across the segment’s portfolio of solutions, in addition to ongoing penetration of key client accounts. third quarter 2016 segment operating profit was also up 8% compared to the same period in 2015. financial services advisory and compliance segment rbr for third quarter 2016 increased 42%, all on an organic basis, compared to the prior year third quarter. growth 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 period which had experienced relatively lower utilization due to the wind-down of certain large engagements. rbr growth, better pricing and higher consultant utilization led to a robust 70% increase in third quarter 2016 segment operating profit year-over-year. disputes, forensics & legal technology segment rbr was down 3% for third quarter 2016 compared the third quarter 2015. the decrease was attributable to currency fluctuations as well as a lower volume of engagements in financial services disputes and international arbitration, both which experienced particularly high demand in the prior-year period. this decline was partially offset by strong demand for our global expertise in large infrastructure claims and construction dispute matters. segment operating profit was down 8% in third quarter 2016 compared to the respective period of 2015. cash flow third quarter 2016 net cash provided by operating activities was $48.0 million, compared to $38.9 million for third quarter 2015, as a result of improved earnings. free cash flow increased to $25.5 million for third quarter 2016 compared to $18.2 million for the same period in 2015, primarily driven by a decrease in capital investment spending. days sales outstanding was 87 days as of september 30, 2016, up six days compared to september 30, 2015. bank debt was $161.2 million at september 30, 2016, compared to $146.8 million at september 30, 2015 and $189.8 million at june 30, 2016. leverage (bank debt divided by trailing twelve month adjusted ebitda) was 1.17 at september 30, 2016, compared to 1.22 at september 30, 2015 and 1.46 at june 30, 2016. navigant repurchased 309,233 shares of common stock during third quarter 2016 at an aggregate cost of $5.8 million and an average cost of $18.68 per share. as of september 30, 2016, approximately $69.3 million remained available under the company’s share repurchase authorization. 2016 outlook navigant raised its 2016 outlook. full year 2016 rbr is now expected to range between $920.0 and $940.0 million, which is the upper half of the previously-issued guidance range. the range for 2016 total revenues was increased to $1.00 and $1.02 billion, up from $960 million to $1.01 billion. adjusted ebitda for full year 2016 is now expected to range between $137.5 and $145.0 million, which is the upper half of the previously-issued guidance range. adjusted eps for full year 2016 is estimated to be between $1.15 and $1.25, an increase of $0.10 from the previous guidance range. 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 2016 adjusted ebitda guidance and 2016 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 third quarter 2016 results at 10:00 a.m. eastern time (9:00 a.m. central time) on tuesday, october 25, 2016. 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,” “intend,” “estimate,” “expect,” “plan,” “outlook” and similar expressions. these statements are based upon management’s current expectations and speak only as of the date of this press release. the company cautions readers that there may be events in the future that the company is not able to accurately predict or control and the information contained in the forward-looking statements is inherently uncertain and subject to a number of risks that could cause actual results to differ materially from those contained in or implied by the forward-looking statements including, without limitation: the execution of the company’s long-term growth objectives and margin improvement initiatives; risks inherent in international operations, including foreign currency fluctuations; ability to make acquisitions and divestitures; pace, timing and integration of acquisitions and separation of divestitures; operational risks associated with new or expanded service areas, including business process management services; impairments; changes in accounting standards; management of professional staff, including dependence on key personnel, recruiting, retention, attrition and the ability to successfully integrate new consultants into the company’s practices; utilization rates; conflicts of interest; potential loss of clients or large engagements and the company’s ability to attract new business; competition; accurate pricing of engagements, particularly fixed fee and multi-year engagements; clients’ financial condition and their ability to make payments to the company; risks inherent with litigation; higher risk client assignments; professional liability; information security controls; potential legislative and regulatory changes; continued access to capital; and market and general economic and political conditions. further information on these and other potential factors that could affect the company’s financial results are included under the “risk factors” section 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 (6) leverage ratio (7) organic growth (8)
