Navigant reports first quarter 2016 financial results
Chicago--(business wire)--navigant (nyse: nci) today announced financial results for the first quarter ended march 31, 2016. financial summary and highlights: first quarter 2016 revenues before reimbursements (rbr) increased 11%, with 8% organic growth, over first quarter 2015 first quarter 2016 gaap earnings per share (eps) of $0.26 first quarter 2016 adjusted eps of $0.27, up 17% compared to first quarter 2015 first quarter 2016 adjusted ebitda of $30.6 million, up 8% from the prior year first quarter affirms 2016 financial outlook, estimates adjusted eps toward higher end of previously communicated range navigant reported first quarter 2016 rbr of $223.5 million, an 11% increase, with 8% organic growth, compared to $201.2 million for first quarter 2015. total revenues increased 10% to $245.3 million for first quarter 2016 compared to $223.2 million for first quarter 2015. net income for first quarter 2016 was $12.6 million, or $0.26 per share, compared to $25.1 million, or $0.51 per share, in the prior year first quarter, which benefited $0.31 per share from an earn-out adjustment primarily related to a non-taxable amount for the cymetrix acquisition. adjusted eps was $0.27 for first quarter 2016, up 17% compared to first quarter 2015. first quarter 2016 adjusted ebitda was $30.6 million compared to $28.4 million for the same period in 2015. “navigant delivered strong top and bottom line growth in the first quarter 2016, and market demand for our service offerings is robust,” commented julie howard, chairman and chief executive officer. “the investments we made in 2015 to strengthen our go-to market approach, ramp up senior hiring, deepen our capabilities and align our brand to the evolved navigant are yielding results and we are very pleased with our positioning and performance trajectory. going forward, we expect to meet the financial objectives we have set forth for the year, continuing our path of both organic revenue and earnings growth.” segment financial summary first quarter 2016 rbr for the healthcare segment increased 28% year-over-year, with more than half of that growth organic. strength was driven by continued demand in consulting services including provider performance improvement solutions, revenue cycle consulting, which reflects the contribution from the mckinnis consulting services acquisition, and life sciences commercialization solutions. in addition, business process management services revenue grew year-over-year. segment operating profit margin for first quarter 2016 was up slightly to 29% compared to the same period in 2015. energy segment rbr increased 5% for the first quarter 2016 compared to the equivalent period in 2015, all of which represented organic growth. rbr growth for the quarter reflects an increase in strategy and operational improvement along with demand side management services. first quarter 2016 segment operating profit was down 15% compared to the same period of 2015, due to higher compensation and benefits expenses associated with recent senior hires, partially offset by higher rbr and lower incentive based compensation. the disputes, forensics & legal technology (previously known as disputes, investigations & economics) segment rbr increased 6% for first quarter 2016 compared to the same period in 2015, all of which represented organic growth. growth was driven by increased demand for our premier dispute resolution offerings, with strong performance in global construction and infrastructure claims matters, in addition to continued demand aligned with our core industry sectors of healthcare and life sciences, energy and financial services. the segment also recognized performance-based revenue associated with mass tort claims work. strong organic growth was partially offset by a decrease in legal technology solutions revenue in the united states. segment operating profit was up 18% in first quarter 2016 compared to the respective period of 2015, driven by higher rbr and ongoing cost management actions. the financial services advisory and compliance (previously known as financial, risk & compliance) segment rbr for first quarter 2016 continued the sequential growth trend that began over the second half of 2015, while down 4% compared to the prior year quarter as was anticipated. the year-over-year comparison to first quarter 2015 was impacted by a few large engagements that wound down over the course of 2015. segment operating profit was down 10% in first quarter 2016 compared to first quarter 2015, mainly due to lower rbr. other results first quarter 2016 general and administrative expenses of $39.8 million increased 12% compared to first quarter 2015, while remaining essentially flat as a percentage of rbr at just under 18%. depreciation and amortization expenses increased significantly in first quarter 2016 over the same period in 2015, primarily due to higher capital expenditures in the prior year and higher levels of intangible assets resulting from recent acquisitions. our first quarter 2016 income tax expense was favorably impacted by the reversal of $0.9 million of tax valuation allowances due to improved earnings from our international subsidiaries. our estimated full year 2016 effective income tax rate is benefitting from increased earnings in foreign jurisdictions with lower tax rates. cash flow free cash flow increased to $21.0 million for first quarter 2016 compared to $11.8 million for the same period in 2015, primarily driven by a decrease in capital investment spending. days sales outstanding was 78 days as of march 31, 2016, down 2 days compared to march 31, 2015. bank debt was $211.5 million at march 31, 2016 compared to $178.7 million at march 31, 2015. leverage (bank debt divided by trailing twelve month adjusted ebitda) was 1.72 at march 31, 2016 compared to 1.46 at march 31, 2015. the increase was mainly due to additional borrowings to fund the mckinnis acquisition in december 2015. navigant repurchased 407,920 shares of common stock during first quarter 2016 at an aggregate cost of $6.3 million and an average cost of $15.36 per share. as of march 31, 2016, $81.8 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 now projected to be at the higher end of the range of $1.05 to $1.15 due to our business outlook and a lower estimated 2016 effective income tax rate, as discussed above. non-gaap financial information and key operating metrics 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. conference call details navigant will host a conference call to discuss the company’s first quarter 2016 results at 10:00 a.m. eastern time (9:00 a.m. central time) on tuesday, april 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 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 reconciliation of non-gaap financial measures ebitda, adjusted ebitda, adjusted net income and adjusted earnings per share (2) free cash flow (5) leverage ratio (6) organic growth (7) 2015 growth 201,156 11.1 % 7.5 %
