Navigant reports second quarter 2016 financial results
Chicago--(business wire)--navigant (nyse: nci) today announced financial results for the second quarter ended june 30, 2016. financial summary and highlights: second quarter 2016 revenues before reimbursements (rbr) increased 13%, with 10% organic growth, over second quarter 2015 second quarter 2016 net income was $14.8 million, or $0.30 per share, compared to $7.8 million, or $0.16 per share, in second quarter 2015 second quarter 2016 adjusted earnings per share (eps) of $0.33, up 27% compared to second quarter 2015 second quarter 2016 adjusted ebitda of $37.2 million, up 23% over second quarter 2015 affirms 2016 financial outlook navigant reported second quarter 2016 rbr of $238.5 million, a 13% increase (10% organic growth), compared to $211.0 million for second quarter 2015. total revenues increased 12% to $261.7 million for second quarter 2016 compared to $233.4 million for second quarter 2015. net income for second quarter 2016 was $14.8 million, or $0.30 per share, compared to $7.8 million, or $0.16 per share, in the prior year second quarter. adjusted eps was $0.33 for second quarter 2016, up 27% compared to second quarter 2015. second quarter 2016 adjusted ebitda was $37.2 million, a 23% increase, compared to $30.1 million for the same period in 2015. adjusted ebitda margin (adjusted ebitda as a percent of rbr) for second quarter 2016 increased to 15.6% compared to 14.3% in second quarter 2015. “navigant’s 2016 second quarter results reflected continued strong market demand for the breadth and depth of our expertise,” commented julie howard, chairman and chief executive officer. “the strength of our portfolio and our consistent execution drove double-digit revenue and earnings per share growth. the alignment of our professionals’ expertise to the issues facing the rapidly transforming industries navigant serves gives me great optimism about the trajectory of our business results throughout the rest of the year.” segment financial summary second quarter 2016 rbr for the healthcare segment increased 21% year-over-year, with more than half of that growth organic. segment rbr for the quarter also increased 10% sequentially from first quarter 2016. the performance was driven by strong demand for large, strategy-led transformation projects and revenue cycle consulting engagements. segment operating profit for second quarter 2016 was up 19% compared to the same period in 2015. energy segment rbr increased 12% for the second quarter 2016 compared to the equivalent period in 2015, all of which represented organic growth. rbr was also up 9% on a sequential basis from first quarter 2016. rbr growth for the quarter reflected strength across the segment’s portfolio of solutions, in addition to ongoing penetration of key client accounts. second quarter 2016 segment operating profit was also up 12% compared to the same period in 2015. financial services advisory and compliance segment rbr for second quarter 2016 increased 36%, all on an organic basis, compared to the prior year second quarter. in addition, rbr was up 19% compared to first quarter 2016. growth was driven primarily by continued demand for financial crimes expertise and an increase in compliance and controls engagements for major financial institutions. rbr growth and higher consultant utilization led to a robust 56% increase in second quarter 2016 segment operating profit year-over-year. disputes, forensics & legal technology segment rbr decreased 2% for second quarter 2016 compared to both the second quarter 2015 and the first quarter 2016, primarily driven by declines in demand and increased competition for legal technology solutions. this decline was generally offset by strong demand for our global expertise in large infrastructure and construction dispute matters as well as increased regulatory, compliance and dispute demand within the healthcare and life sciences sectors. despite a decline in rbr, segment operating profit was up 13% in second quarter 2016 compared to the respective period of 2015, reflecting actions to better align resources and the recognition of performance-based revenue associated with mass tort claims work. cash flow second quarter 2016 net cash provided by operating activities was $34.2 million, compared to $29.1 million for second quarter 2015, as a result of improved earnings. free cash flow increased to $24.4 million for second quarter 2016 compared to $11.6 million for the same period in 2015, primarily driven by a decrease in capital investment spending and acquisition-related payments. days sales outstanding was 81 days as of june 30, 2016, up one day compared to june 30, 2015. bank debt was $189.8 million at june 30, 2016, compared to $171.4 million at june 30, 2015 and $211.5 million at march 31, 2016. leverage (bank debt divided by trailing twelve month adjusted ebitda) was 1.46 at june 30, 2016, compared to 1.37 at june 30, 2015 and 1.72 at march 31, 2016. the year-over-year increase was mainly due to additional borrowings to fund the mckinnis acquisition in december 2015. navigant repurchased 427,499 shares of common stock during second quarter 2016 at an aggregate cost of $6.8 million and an average cost of $15.81 per share. as of june 30, 2016, approximately $75.0 million remained available under the company’s share repurchase authorization. 2016 outlook our 2016 outlook for rbr, total revenues and adjusted ebitda remains unchanged. full year 2016 rbr is expected to range between $900 and $940 million while 2016 total revenues are estimated to be between $960 million and $1.01 billion. adjusted ebitda for full year 2016 is expected to range between $132 and $145 million. adjusted eps for full year 2016 is projected to be at the higher end of the range of $1.05 to $1.15. 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 second quarter 2016 results at 10:00 a.m. eastern time (9:00 a.m. central time) on tuesday, july 26, 2016. 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 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 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. $ selected data (unaudited) ebitda, adjusted ebitda, adjusted net income and adjusted earnings per share (2) free cash flow (5) leverage ratio (6) organic growth (7)
