Exhibit 99.1
FOR IMMEDIATE RELEASE
For more information, contact:
Kyle Bland Navigant Investor Relations 312.573.5624 kyle.bland@navigant.com
| Belia Ortega Navigant Corporate Communications 312.583.2640 belia.ortega@navigant.com |
NAVIGANT REPORTS FIRST QUARTER 2018 FINANCIAL RESULTS
CHICAGO, May 2, 2018 – Navigant (NYSE: NCI) today reported financial results for the quarter ended March 31, 2018.
First quarter 2018 financial summary:
| • | Revenues and revenues before reimbursements (RBR) of $264.5 million and $243.9 million, respectively were both up 3% compared to first quarter 2017 |
| • | Net income was $11.9 million, or $0.25 per share, compared to $11.1 million, or $0.23 per share, for first quarter 2017 |
| • | Adjusted Earnings per Share (EPS) of $0.30 increased $0.03 compared to first quarter 2017 |
| • | Repurchased $11.4 million of common stock in the quarter, significantly higher than the $5.0 million repurchased in the prior year period |
| • | Management affirms previously provided 2018 financial guidance targets |
“We are pleased with our first quarter results which reflect improving trends in several areas of our business,” said Julie Howard, chairman and CEO of Navigant. “In the quarter, our DFLT and Energy segments produced solid year-over-year and sequential RBR improvements. We also realized strong growth in our Financial Services Advisory and Compliance segment. In each of these three segments, revenue improvement translated to margin gains in the period. In Healthcare, as expected, performance for the segment was down in the quarter, however, we see early signs of demand recovery for strategic, provider-related engagements. Additionally, we are excited about future growth opportunities related to our recently announced joint venture with Baptist Health South Florida. All-in-all, after the solid start to the year, we remain well positioned to achieve our full-year 2018 guidance targets.”
CONSOLIDATED RESULTS
|
|
| The quarter ended March 31, |
| |||||||||||
(Dollars in millions, excluding per share data) |
|
| 2018 |
|
|
| 2017 |
|
|
| Increase / (Decrease) |
| |||
Revenue |
| $ |
| 264.5 |
|
| $ |
| 257.8 |
|
| $ |
| 6.7 |
|
RBR |
| $ |
| 243.9 |
|
| $ |
| 236.2 |
|
| $ |
| 7.7 |
|
Net Income |
| $ |
| 11.9 |
|
| $ |
| 11.1 |
|
| $ |
| 0.8 |
|
Adjusted EBITDA (1) |
| $ |
| 29.9 |
|
| $ |
| 31.5 |
|
| $ |
| (1.6 | ) |
Adjusted Net Income per Share (1) |
|
| $0.30 |
|
|
| $0.27 |
|
|
| $0.03 |
| |||
(1) See definition and reconciliation of non-GAAP measures elsewhere in this release. |
| ||||||||||||||
Navigant reported first quarter 2018 revenues and RBR of $264.5 million and $243.9 million, respectively, up 3% compared to the first quarter 2017 reflecting higher revenue in three of the Company’s four segments. On an organic, exchange rate neutral basis, RBR growth for the quarter was up 2% compared to the first quarter 2017.
First quarter 2018 Adjusted EBITDA was $29.9 million, down $1.6 million from the same prior year period as lower margins in the Healthcare segment and higher bad debt expense, due to receivable aging and client specific reserves in the current year period and the absence of bad debt expense in the prior year period, contributed to decreased performance. When excluding bad debt, general and administrative cost as a percent of RBR were 16.9%, a 70bps improvement compared to the first quarter 2017.
First quarter 2018 net income of $11.9 million was up $0.8 million compared to first quarter 2017 as the operating performance discussed above was more than offset by lower depreciation and amortization expense, as well as lower taxes due to the impact of the 2017 Tax Cuts and Jobs Act in the current year period. GAAP EPS and Adjusted EPS were $0.25 and $0.30, respectively, for first quarter 2018, $0.02 and $0.03 higher, respectively, than the prior year period.
CASH FLOW AND BALANCE SHEET
First quarter 2018 net cash used in operating activities was $34.8 million compared to a use of $23.0 million for first quarter 2017 driven primarily by higher accounts receivable in the current year period. Days Sales Outstanding on March 31, 2018 was 91 days, a 6-day increase compared to December 31, 2017, driven by slower collections. Free Cash Flow, which as defined excludes working capital, increased to $20.1 million for first quarter 2018 compared to $13.3 million for the same period in 2017, primarily due to lower capital expenditures in the current year period.
Bank debt outstanding on March. 31, 2018 was $184.3 million, up $6.0 million compared to $178.3 million outstanding on March 31, 2017. Leverage (bank debt divided by trailing twelve month Adjusted EBITDA) was 1.48 times at March 31, 2018.
Navigant continued executing its share repurchase program with an additional 569 thousand shares of common stock repurchased during the first quarter 2018 at an aggregate cost of $11.4 million and an average price of $19.95 per share. As of March 31, 2018, the company had $52.3 million remaining under its stock repurchase authorization which expires on December 31, 2019.
FIRST QUARTER 2018 SEGMENT RESULTS
|
| The quarter ended March 31, |
| |||||||||
(Dollars in millions, numbers may not foot due to rounding) |
| 2018 |
|
| 2017 |
|
| Increase / (Decrease) |
| |||
RBR |
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare |
| $ | 90.1 |
|
| $ | 94.0 |
|
| $ | (3.9 | ) |
Energy |
|
| 33.7 |
|
|
| 32.5 |
|
|
| 1.2 |
|
Financial Services Advisory and Compliance |
|
| 41.4 |
|
|
| 32.9 |
|
|
| 8.5 |
|
Disputes, Forensics, and Legal Technology |
|
| 78.6 |
|
|
| 76.8 |
|
|
| 1.8 |
|
Total Company |
| $ | 243.9 |
|
| $ | 236.2 |
|
| $ | 7.7 |
|
Total Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare |
| $ | 98.7 |
|
| $ | 103.0 |
|
| $ | (4.3 | ) |
Energy |
|
| 37.6 |
|
|
| 37.7 |
|
|
| (0.1 | ) |
Financial Services Advisory and Compliance |
|
| 45.6 |
|
|
| 36.9 |
|
|
| 8.7 |
|
Disputes, Forensics, and Legal Technology |
|
| 82.6 |
|
|
| 80.2 |
|
|
| 2.4 |
|
Total Company |
| $ | 264.5 |
|
| $ | 257.8 |
|
| $ | 6.7 |
|
Segment Operating Profit |
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare |
| $ | 20.4 |
|
| $ | 28.5 |
|
| $ | (8.1 | ) |
Energy |
|
| 10.7 |
|
|
| 8.9 |
|
|
| 1.8 |
|
Financial Services Advisory and Compliance |
|
| 16.0 |
|
|
| 11.6 |
|
|
| 4.4 |
|
Disputes, Forensics, and Legal Technology |
|
| 27.9 |
|
|
| 25.5 |
|
|
| 2.4 |
|
Total Company |
| $ | 75.1 |
|
| $ | 74.4 |
|
| $ | 0.7 |
|
Segment Operating Margin (% of RBR) |
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare |
|
| 22.6 | % |
|
| 30.3 | % |
|
| -7.7 | % |
Energy |
|
| 31.8 | % |
|
| 27.3 | % |
|
| 4.5 | % |
Financial Services Advisory and Compliance |
|
| 38.7 | % |
|
| 35.3 | % |
|
| 3.4 | % |
Disputes, Forensics, and Legal Technology |
|
| 35.5 | % |
|
| 33.2 | % |
|
| 2.3 | % |
Total Company |
|
| 30.8 | % |
|
| 31.5 | % |
|
| -0.7 | % |
Healthcare segment RBR of $90.1 million decreased 4%, or 6% on an organic basis, for first quarter 2018 compared to the same prior year period. Consistent with 2017 and as anticipated, the demand environment for certain of our consulting services remained depressed and impacted revenue performance in the quarter. Segment operating profit of $20.4 million declined $8.1 million in first quarter 2018 compared to the first quarter 2017 as lower revenue, higher strategic development costs, increased headcount in managed services, as well as the maintenance of resources in
consulting, in anticipation of improving demand for the remainder of 2018, contributed to the decline. Additionally, headcount reductions taken in the quarter to better position the segment for improved performance going forward increased severance expense in the current year period.
Energy segment RBR for first quarter 2018 of $33.7 million increased 4% compared to first quarter 2017 and was up 10% sequentially. Improving demand from commercial client engagements for services such as grid modernization and distributed energy resource planning helped drive the revenue improvement. Segment operating profit for the quarter was up 21% compared to the first quarter 2017 due to increased revenue and lower headcount driven by 2017 cost management actions.
Financial Services Advisory and Compliance segment RBR finished at $41.4 million, up 26% compared to first quarter 2017. Strong growth across the segment was driven by increased activity in financial crime, sanctions, and operational efficiency engagements across a number of our largest clients. Segment operating profit increased 38% as revenue performance more than offset increased headcount and higher incentive compensation costs.
Disputes, Forensics, and Legal Technology segment RBR for first quarter 2018 of $78.6 million was up 2% compared to first quarter 2017 and increased 11% sequentially. The quarter benefited from continued demand for cyber security services, as well a robust market for commercial disputes expertise, particularly in construction, healthcare and intellectual property related matters. Lower mass tort claim volume in the current year period partially offset robust performance elsewhere in the segment. Segment operating profit for first quarter 2018 was up 10% compared to the first quarter 2017 driven primarily by higher revenue.
2018 OUTLOOK
Management affirms full year 2018 financial outlook as originally communicated on February 20, 2018:
| • | Total revenues estimated to be between $1.030 billion and $1.065 billion |
| • | RBR expected to range between $940 million and $975 million |
| • | Adjusted EBITDA expected to range between $125 million and $137 million |
| • | Adjusted EPS estimated to be between $1.26 and $1.44 |
| • | Capital expenditures estimated to be approximately $25 million |
| • | Free Cash Flow expected to range between $75 million and $90 million |
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 and Adjusted Earnings Per Share, both of which exclude the impact of severance expense and other operating costs (benefit), as applicable. 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 first quarter 2018 results at 10 a.m. Eastern Time (9 a.m. Central Time) on Wed., May 2, 2018. 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.
DEFINITIONS
applicable. Severance expense and other operating costs (benefit) 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. |
• | Free Cash Flow is calculated as net cash provided by (used in) operations excluding the change in asset, liabilities and allowance for doubtful accounts less cash payment for property, equipment and deferred acquisition liabilities. Free Cash Flow does not represent cash available for spending as it excludes certain contractual obligations such as debt repayment. However, management believes that Free Cash Flow provides investors with an indicator of cash available for on-going business operations and long-term value creation. |
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 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, 2016, 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.
###
Exhibit 99.1
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data(1))
(Unaudited)
|
| For the quarter ended |
|
| |||||
|
| March 31, |
|
| |||||
|
| 2018 |
|
| 2017 |
|
| ||
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues before reimbursements |
| $ | 243,879 |
|
| $ | 236,211 |
|
|
Reimbursements |
|
| 20,641 |
|
|
| 21,626 |
|
|
Total revenues |
|
| 264,520 |
|
|
| 257,837 |
|
|
Cost of services before reimbursable expenses |
|
| 171,406 |
|
|
| 165,052 |
|
|
Reimbursable expenses |
|
| 20,641 |
|
|
| 21,626 |
|
|
Total cost of services |
|
| 192,047 |
|
|
| 186,678 |
|
|
General and administrative expenses |
|
| 44,362 |
|
|
| 41,484 |
|
|
Depreciation expense |
|
| 6,845 |
|
|
| 7,473 |
|
|
Amortization expense |
|
| 1,856 |
|
|
| 2,319 |
|
|
Other operating costs: |
|
|
|
|
|
|
|
|
|
Contingent acquisition liability adjustments, net |
|
| - |
|
|
| 1,199 |
|
|
Other costs |
|
| 983 |
|
|
| 107 |
|
|
Operating income |
|
| 18,427 |
|
|
| 18,577 |
|
|
Interest expense |
|
| 1,316 |
|
|
| 1,069 |
|
|
Interest income |
|
| (119 | ) |
|
| (31 | ) |
|
Other expense (income), net |
|
| 390 |
|
|
| (217 | ) |
|
Income before income tax expense |
|
| 16,840 |
|
|
| 17,756 |
|
|
Income tax expense |
|
| 4,987 |
|
|
| 6,660 |
|
|
Net income |
| $ | 11,853 |
|
| $ | 11,096 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic per share data |
|
|
|
|
|
|
|
|
|
Net income |
| $ | 0.26 |
|
| $ | 0.24 |
|
|
Shares used in computing basic per share data |
|
| 45,120 |
|
|
| 46,932 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted per share data |
|
|
|
|
|
|
|
|
|
Net income |
| $ | 0.25 |
|
| $ | 0.23 |
|
|
Shares used in computing diluted per share data |
|
| 46,834 |
|
|
| 48,969 |
|
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
|
| March 31, |
|
| December 31, |
| ||
|
| 2018 |
|
| 2017 |
| ||
|
| (unaudited) |
|
|
|
|
| |
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 6,646 |
|
| $ | 8,449 |
|
Accounts receivable, net and contract assets |
|
| 288,744 |
|
|
| 267,841 |
|
Prepaid expenses and other current assets |
|
| 33,616 |
|
|
| 32,921 |
|
Total current assets |
|
| 329,006 |
|
|
| 309,211 |
|
Non-current assets: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
| 87,921 |
|
|
| 89,169 |
|
Intangible assets, net |
|
| 19,247 |
|
|
| 21,053 |
|
Goodwill |
|
| 638,953 |
|
|
| 637,287 |
|
Other assets |
|
| 23,210 |
|
|
| 23,544 |
|
Total assets |
| $ | 1,098,337 |
|
| $ | 1,080,264 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 10,345 |
|
| $ | 12,398 |
|
Accrued liabilities |
|
| 15,923 |
|
|
| 13,895 |
|
Accrued compensation-related costs |
|
| 60,567 |
|
|
| 96,773 |
|
Income tax payable |
|
| 7,171 |
|
|
| 4,720 |
|
Other current liabilities |
|
| 32,633 |
|
|
| 38,895 |
|
Total current liabilities |
|
| 126,639 |
|
|
| 166,681 |
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Deferred income tax liabilities |
|
| 62,665 |
|
|
| 61,131 |
|
Other non-current liabilities |
|
| 32,000 |
|
|
| 32,174 |
|
Bank debt non-current |
|
| 184,327 |
|
|
| 132,944 |
|
Total non-current liabilities |
|
| 278,992 |
|
|
| 226,249 |
|
Total liabilities |
|
| 405,631 |
|
|
| 392,930 |
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
Common stock |
|
| 58 |
|
|
| 58 |
|
Additional paid-in capital |
|
| 662,924 |
|
|
| 659,825 |
|
Treasury stock |
|
| (235,723 | ) |
|
| (224,366 | ) |
Retained earnings |
|
| 282,999 |
|
|
| 270,995 |
|
Accumulated other comprehensive loss |
|
| (17,552 | ) |
|
| (19,178 | ) |
Total stockholders' equity |
|
| 692,706 |
|
|
| 687,334 |
|
Total liabilities and stockholders' equity |
| $ | 1,098,337 |
|
| $ | 1,080,264 |
|
|
|
|
|
|
|
|
|
|
Selected Data (unaudited) |
|
|
|
|
|
|
|
|
Days sales outstanding, net (DSO) |
|
| 91 |
|
|
| 85 |
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
| For the quarter ended |
| |||||
|
|
| March 31, |
| |||||
|
|
| 2018 |
|
| 2017 |
| ||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net income |
|
| $ | 11,853 |
|
| $ | 11,096 |
|
Adjustments to reconcile net income to net cash used in |
|
|
|
|
|
|
|
|
|
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
| 6,845 |
|
|
| 7,473 |
|
Amortization expense |
|
|
| 1,856 |
|
|
| 2,319 |
|
Share-based compensation expense |
|
|
| 3,377 |
|
|
| 3,022 |
|
Deferred income taxes |
|
|
| 968 |
|
|
| 1,339 |
|
Allowance for doubtful accounts receivable |
|
|
| 3,130 |
|
|
| 4 |
|
Contingent acquisition liability adjustments, net |
|
|
| - |
|
|
| 1,199 |
|
Other, net |
|
|
| 1,007 |
|
|
| 651 |
|
Changes in assets and liabilities (net of acquisitions): |
|
|
|
|
|
|
|
|
|
Accounts receivable, net and contract assets |
|
|
| (23,615 | ) |
|
| (4,279 | ) |
Prepaid expenses and other assets |
|
|
| (716 | ) |
|
| (1,197 | ) |
Accounts payable |
|
|
| (2,100 | ) |
|
| (81 | ) |
Accrued liabilities |
|
|
| 2,200 |
|
|
| 584 |
|
Accrued compensation-related costs |
|
|
| (36,458 | ) |
|
| (49,256 | ) |
Income taxes payable |
|
|
| 2,926 |
|
|
| 4,353 |
|
Other liabilities |
|
|
| (6,120 | ) |
|
| (188 | ) |
Net cash used in operating activities |
|
|
| (34,847 | ) |
|
| (22,961 | ) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
| (5,750 | ) |
|
| (13,789 | ) |
Other, net |
|
|
| - |
|
|
| (116 | ) |
Net cash used in investing activities |
|
|
| (5,750 | ) |
|
| (13,905 | ) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Issuances of common stock |
|
|
| 1,238 |
|
|
| 1,914 |
|
Repurchases of common stock |
|
|
| (11,357 | ) |
|
| (4,961 | ) |
Repayments to banks |
|
|
| (79,144 | ) |
|
| (150,800 | ) |
Borrowings from banks |
|
|
| 129,677 |
|
|
| 193,802 |
|
Payments of debt issuance costs |
|
|
| - |
|
|
| (1,166 | ) |
Other, net |
|
|
| (1,596 | ) |
|
| (1,327 | ) |
Net cash provided by financing activities |
|
|
| 38,818 |
|
|
| 37,462 |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
| (24 | ) |
|
| 245 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
| (1,803 | ) |
|
| 841 |
|
Cash and cash equivalents at beginning of the period |
|
|
| 8,449 |
|
|
| 8,291 |
|
Cash and cash equivalents at end of the period |
|
| $ | 6,646 |
|
| $ | 9,132 |
|
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data and percentages)
(Unaudited)
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share (2) |
| For the quarter ended |
|
|
|
| |||||
|
| March 31, |
|
|
|
| |||||
|
| 2018 |
|
| 2017 |
|
|
|
| ||
Severance expense |
| $ | 1,799 |
|
| $ | 1,786 |
|
|
|
|
Income tax benefit (3) |
|
| (480 | ) |
|
| (656 | ) |
|
|
|
Tax-effected impact of severance expense |
| $ | 1,319 |
|
| $ | 1,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs - contingent acquisition liability adjustment, net |
| $ | - |
|
| $ | 1,199 |
|
|
|
|
Income tax benefit (3) |
|
| - |
|
|
| (481 | ) |
|
|
|
Tax-effected impact of other operating costs - contingent acquisition liability adjustment, net |
| $ | - |
|
| $ | 718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating costs - other costs |
| $ | 983 |
|
| $ | 107 |
|
|
|
|
Income tax benefit (3) |
|
| (268 | ) |
|
| (43 | ) |
|
|
|
Tax-effected impact of other operating costs - other costs |
| $ | 715 |
|
| $ | 64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
| $ | 11,853 |
|
| $ | 11,096 |
|
|
|
|
Interest expense |
|
| 1,316 |
|
|
| 1,069 |
|
|
|
|
Interest income |
|
| (119 | ) |
|
| (31 | ) |
|
|
|
Other expense (income), net |
|
| 390 |
|
|
| (217 | ) |
|
|
|
Income tax expense |
|
| 4,987 |
|
|
| 6,660 |
|
|
|
|
Depreciation expense |
|
| 6,845 |
|
|
| 7,473 |
|
|
|
|
Amortization expense |
|
| 1,856 |
|
|
| 2,319 |
|
|
|
|
EBITDA |
| $ | 27,128 |
|
| $ | 28,369 |
|
|
|
|
Severance expense |
|
| 1,799 |
|
|
| 1,786 |
|
|
|
|
Other operating costs - contingent acquisition liability adjustment, net |
|
| - |
|
|
| 1,199 |
|
|
|
|
Other operating costs - other costs |
|
| 983 |
|
|
| 107 |
|
|
|
|
Adjusted EBITDA |
| $ | 29,910 |
|
| $ | 31,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 11,853 |
|
| $ | 11,096 |
|
|
|
|
Tax-effected impact of severance expense |
|
| 1,319 |
|
|
| 1,130 |
|
|
|
|
Tax-effected impact of other operating costs - contingent acquisition liability adjustment, net |
|
| - |
|
|
| 718 |
|
|
|
|
Tax-effected impact of other operating costs - other costs |
|
| 715 |
|
|
| 64 |
|
|
|
|
Adjusted net income |
| $ | 13,887 |
|
| $ | 13,008 |
|
|
|
|
Shares used in computing adjusted per diluted share data |
|
| 46,834 |
|
|
| 48,969 |
|
|
|
|
Adjusted earnings per share |
| $ | 0.30 |
|
| $ | 0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the quarter ended |
|
|
|
| |||||
Free Cash Flow (4) |
| March 31, |
|
|
|
| |||||
|
| 2018 |
|
| 2017 |
|
|
|
| ||
Net cash used in operating activities |
| $ | (34,847 | ) |
| $ | (22,961 | ) |
|
|
|
Changes in assets and liabilities |
|
| 63,883 |
|
|
| 50,064 |
|
|
|
|
Allowance for doubtful accounts receivable |
|
| (3,130 | ) |
|
| (4 | ) |
|
|
|
Purchases of property and equipment |
|
| (5,750 | ) |
|
| (13,789 | ) |
|
|
|
Payments of contingent acquisition liabilities |
|
| (80 | ) |
|
| - |
|
|
|
|
Free Cash Flow |
| $ | 20,076 |
|
| $ | 13,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage Ratio (5) |
| At March 31, |
|
|
|
| |||||
|
| 2018 |
|
| 2017 |
|
|
|
| ||
Adjusted EBITDA for prior twelve-month period |
| $ | 124,287 |
|
| $ | 143,190 |
|
|
|
|
Bank debt |
| $ | 184,327 |
|
| $ | 178,336 |
|
|
|
|
Leverage ratio |
|
| 1.48 |
|
|
| 1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the quarter ended |
|
|
|
| |||||
Organic Growth (6) |
| March 31, |
|
|
|
| |||||
|
| 2018 |
|
| 2017 |
| Growth |
| |||
Revenues before reimbursements |
| $ | 243,879 |
|
| $ | 236,211 |
|
| 3.2 | % |
Pro forma acquisition adjustment |
|
| - |
|
|
| 1,420 |
|
|
|
|
Currency impact |
|
| (1,598 | ) |
|
| - |
|
|
|
|
Organic RBR |
| $ | 242,281 |
|
| $ | 237,631 |
|
| 2.0 | % |
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 the benefit recognized in the fourth quarter 2017 related to the 2017 Tax Cuts and Jobs Act, as applicable. Severance expense and 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) Effective income tax expense has been determined based on specific tax jurisdiction.
(4) 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. 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.
(5) Leverage ratio is calculated as bank debt at the end of the period divided by adjusted EBITDA 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.
(6) Organic growth represents revenues before reimbursements adjusted to include the impact of our acquisitions as if we 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.