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.”
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Segment Financial Summary |
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| For the quarter ended | |||||||||||
| June 30, | |||||||||||
| 2016 | 2015 | Change | |||||||||
| RBR ($000) | |||||||||||
| Healthcare | $ | 89,876 | $ | 74,245 | 21.1% | ||||||
| Energy | 29,295 | 26,153 | 12.0% | ||||||||
| Financial Services Advisory and Compliance | 39,994 | 29,509 | 35.5% | ||||||||
| Disputes, Forensics & Legal Technology | 79,320 | 81,116 | -2.2% | ||||||||
| Total Company | $ | 238,485 | $ | 211,023 | 13.0% | ||||||
| Total Revenues ($000) | |||||||||||
| Healthcare | $ | 98,386 | $ | 80,652 | 22.0% | ||||||
| Energy | 32,855 | 30,833 | 6.6% | ||||||||
| Financial Services Advisory and Compliance | 45,360 | 34,439 | 31.7% | ||||||||
| Disputes, Forensics & Legal Technology | 85,082 | 87,515 | -2.8% | ||||||||
| Total Company | $ | 261,683 | $ | 233,439 | 12.1% | ||||||
| Segment Operating Profit ($000) | |||||||||||
| Healthcare | $ | 29,362 | $ | 24,726 | 18.7% | ||||||
| Energy | 8,402 | 7,513 | 11.8% | ||||||||
| Financial Services Advisory and Compliance | 17,511 | 11,201 | 56.3% | ||||||||
| Disputes, Forensics & Legal Technology | 28,963 | 25,721 | 12.6% | ||||||||
| Total Company | $ | 84,238 | $ | 69,161 | 21.8% | ||||||
| Segment Operating Margin (% of RBR) | |||||||||||
| Healthcare | 32.7% | 33.3% | |||||||||
| Energy | 28.7% | 28.7% | |||||||||
| Financial Services Advisory and Compliance | 43.8% | 38.0% | |||||||||
| Disputes, Forensics & Legal Technology | 36.5% | 31.7% | |||||||||
| Total Company | 35.3% | 32.8% | |||||||||
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.
| NAVIGANT CONSULTING, INC. AND SUBSIDIARIES | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||
| (In thousands, except per share data(1)) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| For the quarter ended | For the six months ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Revenues: | ||||||||||||||||||
| Revenues before reimbursements | $ | 238,485 | $ | 211,023 | $ | 461,960 |
$ |
412,179 | ||||||||||
| Reimbursements | 23,198 | 22,416 | 45,010 | 44,431 | ||||||||||||||
| Total revenues | 261,683 | 233,439 | 506,970 | 456,610 | ||||||||||||||
| Cost of services: | ||||||||||||||||||
| Cost of services before reimbursable expenses | 157,966 | 145,367 | 311,906 | 283,968 | ||||||||||||||
| Reimbursable expenses | 23,198 | 22,416 | 45,010 | 44,431 | ||||||||||||||
| Total cost of services | 181,164 | 167,783 | 356,916 | 328,399 | ||||||||||||||
| General and administrative expenses | 44,507 | 39,068 | 84,338 | 74,733 | ||||||||||||||
| Depreciation expense | 7,015 | 5,724 | 13,537 | 11,079 | ||||||||||||||
| Amortization expense | 2,891 | 2,297 | 5,812 | 4,566 | ||||||||||||||
| Other operating costs (benefit): | ||||||||||||||||||
| Contingent acquisition liability adjustments, net | 850 | 2,308 | 850 | (12,625 | ) | |||||||||||||
| Office consolidation, net | 174 | 1,804 | 174 | 2,740 | ||||||||||||||
| Other impairment | - | 98 | - | 98 | ||||||||||||||
| Operating income | 25,082 | 14,357 | 45,343 | 47,620 | ||||||||||||||
| Interest expense | 1,429 | 1,238 | 2,689 | 2,970 | ||||||||||||||
| Interest income | (36 | ) | (46 | ) | (75 | ) | (101 | ) | ||||||||||
| Other (income) expense, net | (444 | ) | 176 | (784 | ) | (152 | ) | |||||||||||
| Income before income tax expense | 24,133 | 12,989 | 43,513 | 44,903 | ||||||||||||||
| Income tax expense | 9,356 | 5,162 | 16,094 | 11,933 | ||||||||||||||
| Net income | $ | 14,777 | $ | 7,827 | $ | 27,419 | $ | 32,970 | ||||||||||
| Basic per share data | ||||||||||||||||||
| Net income | $ | 0.31 | $ | 0.16 | $ | 0.58 | $ | 0.68 | ||||||||||
| Shares used in computing basic per share data | 47,550 | 48,150 | 47,488 | 48,137 | ||||||||||||||
| Diluted per share data | ||||||||||||||||||
| Net income | $ | 0.30 | $ | 0.16 | $ | 0.56 | $ | 0.67 | ||||||||||
| Shares used in computing diluted per share data | 48,841 | 49,310 | 48,936 | 49,369 | ||||||||||||||
| NAVIGANT CONSULTING, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS AND SELECTED DATA | ||||||||||
| (In thousands, except DSO data) | ||||||||||
| June 30, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 3,310 | $ | 8,895 | ||||||
| Accounts receivable, net | 254,395 | 216,660 | ||||||||
| Prepaid expenses and other current assets | 31,745 | 29,729 | ||||||||
| Total current assets | 289,450 | 255,284 | ||||||||
| Non-current assets: | ||||||||||
| Property and equipment, net | 73,816 | 76,717 | ||||||||
| Intangible assets, net | 32,617 | 38,160 | ||||||||
| Goodwill | 620,136 | 623,204 | ||||||||
| Other assets | 21,098 | 22,531 | ||||||||
| Total assets | $ | 1,037,117 | $ | 1,015,896 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 11,984 | $ | 9,497 | ||||||
| Accrued liabilities | 11,340 | 10,719 | ||||||||
| Accrued compensation-related costs | 68,619 | 91,577 | ||||||||
| Income tax payable | 8,300 | - | ||||||||
| Other current liabilities | 34,742 | 32,147 | ||||||||
| Total current liabilities | 134,985 | 143,940 | ||||||||
| Non-current liabilities: | ||||||||||
| Deferred income tax liabilities | 80,308 | 75,719 | ||||||||
| Other non-current liabilities | 19,706 | 28,956 | ||||||||
| Bank debt non-current | 189,757 | 173,743 | ||||||||
| Total non-current liabilities | 289,771 | 278,418 | ||||||||
| Total liabilities | 424,756 | 422,358 | ||||||||
| Stockholders' equity: | ||||||||||
| Common stock | 57 | 64 | ||||||||
| Additional paid-in capital | 636,506 | 627,976 | ||||||||
| Treasury stock | (169,327 | ) | (296,624 | ) | ||||||
| Retained earnings | 165,789 | 278,682 | ||||||||
| Accumulated other comprehensive loss | (20,664 | ) | (16,560 | ) | ||||||
| Total stockholders' equity | 612,361 | 593,538 | ||||||||
| Total liabilities and stockholders' equity | $ | 1,037,117 | $ | 1,015,896 | ||||||
|
Selected Data (unaudited) |
||||||||||
| Days sales outstanding, net (DSO) | 81 | 76 | ||||||||
| NAVIGANT CONSULTING, INC. AND SUBSIDIARIES | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| For the quarter ended | For the six months ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||
| Net income | $ | 14,777 | $ | 7,827 | $ | 27,419 | $ | 32,970 | ||||||||||
| Adjustments to reconcile net income to net cash | ||||||||||||||||||
| provided by (used in) operating activities: | ||||||||||||||||||
| Depreciation expense | 7,048 | 5,863 | 13,570 | 11,218 | ||||||||||||||
| Amortization expense | 2,891 | 2,297 | 5,812 | 4,566 | ||||||||||||||
| Amortization expense - client-facing software | 174 | 233 | 353 | 486 | ||||||||||||||
| Share-based compensation expense | 3,995 | 3,420 | 6,524 | 5,524 | ||||||||||||||
| Accretion of interest expense | 177 | 272 | 355 | 1,135 | ||||||||||||||
| Deferred income taxes | 98 | 1,073 | 1,131 | 4,686 | ||||||||||||||
| Allowance for doubtful accounts receivable | 2,911 | 1,402 | 4,547 | 1,592 | ||||||||||||||
| Contingent acquisition liability adjustments, net | 850 | 2,308 | 850 | (12,625 | ) | |||||||||||||
| Other, net | - | 98 | - | 98 | ||||||||||||||
| Changes in assets and liabilities (net of acquisitions): | ||||||||||||||||||
| Accounts receivable | (28,222 | ) | (12,313 | ) | (43,765 | ) | (36,747 | ) | ||||||||||
| Prepaid expenses and other assets | 1,149 | 409 | (1,025 | ) | (2,361 | ) | ||||||||||||
| Accounts payable | 2,000 | (969 | ) | 2,478 | 136 | |||||||||||||
| Accrued liabilities | 205 | (2,523 | ) | 472 | 1,444 | |||||||||||||
| Accrued compensation-related costs | 16,878 | 16,743 | (22,788 | ) | (22,896 | ) | ||||||||||||
| Income taxes payable | 7,004 | (790 | ) | 12,059 | 46 | |||||||||||||
| Other liabilities | 2,277 | 3,799 | (337 | ) | 5,923 | |||||||||||||
| Net cash provided by (used in) operating activities | 34,212 | 29,149 | 7,655 | (4,805 | ) | |||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||
| Purchases of property and equipment | (5,080 | ) | (10,284 | ) | (10,039 | ) | (23,197 | ) | ||||||||||
| Acquisitions of businesses, net of cash acquired | - | - | (1,995 | ) | (21,379 | ) | ||||||||||||
| Other acquisition payments | - | - | (5,500 | ) | - | |||||||||||||
| Payments of acquisition liabilities | (498 | ) | (1,530 | ) | (498 | ) | (1,530 | ) | ||||||||||
| Capitalized client-facing software | (109 | ) | (309 | ) | (127 | ) | (346 | ) | ||||||||||
| Net cash used in investing activities | (5,687 | ) | (12,123 | ) | (18,159 | ) | (46,452 | ) | ||||||||||
| Cash flows from financing activities: | ||||||||||||||||||
| Issuances of common stock | 785 | 636 | 2,841 | 4,894 | ||||||||||||||
| Repurchases of common stock | (6,757 | ) | (5,964 | ) | (13,023 | ) | (12,081 | ) | ||||||||||
| Repayments to banks | (112,853 | ) | (67,119 | ) | (209,245 | ) | (138,703 | ) | ||||||||||
| Borrowings from banks | 92,482 | 58,249 | 227,239 | 199,643 | ||||||||||||||
| Other, net | (2,121 | ) | (1,036 | ) | (2,779 | ) | (1,247 | ) | ||||||||||
| Net cash (used in) provided by financing activities | (28,464 | ) | (15,234 | ) | 5,033 | 52,506 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (157 | ) | 74 | (114 | ) | (43 | ) | |||||||||||
| Net (decrease) increase in cash and cash equivalents | (96 | ) | 1,866 | (5,585 | ) | 1,206 | ||||||||||||
| Cash and cash equivalents at beginning of the period | 3,406 | 1,988 | 8,895 | 2,648 | ||||||||||||||
| Cash and cash equivalents at end of the period | $ | 3,310 | $ | 3,854 | $ | 3,310 | $ | 3,854 | ||||||||||
| NAVIGANT CONSULTING, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||
| (In thousands, except per share data and percentages) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| This press release includes certain non-GAAP financial measures as defined by the Securities and Exchange Commission. Below are the 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). 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. Management uses these non-GAAP financial measures in addition to GAAP financial measures to assess the Company's operations and financial results and believes they are useful indicators of operating performance and the Company's ability to generate cash flows from operations that are available for interest, debt service, taxes and capital expenditures. Investors should recognize that these non-GAAP financial measures may not be comparable to similarly-titled measures of other companies. | ||||||||||||||||||||||||
|
EBITDA, adjusted EBITDA, adjusted Net Income and |
For the quarter ended | For the six months ended | ||||||||||||||||||||||
|
adjusted Earnings Per Share (2) |
June 30, | June 30, | ||||||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
| Severance expense | $ | 1,140 | $ | 3,553 | $ | 1,997 | $ | 5,056 | ||||||||||||||||
| Income tax benefit (3) | (430 | ) | (1,232 | ) | (740 | ) | (1,752 | ) | ||||||||||||||||
| Tax-effected impact of severance expense | $ | 710 | $ | 2,321 | $ | 1,257 | $ | 3,304 | ||||||||||||||||
| Other operating costs (benefit) - contingent acquisition liability adjustment, net | $ | 850 | $ | 2,308 | $ | 850 | $ | (12,625 | ) | |||||||||||||||
| Income tax benefit (3)(4) | (341 | ) | (907 | ) | (341 | ) | (1,090 | ) | ||||||||||||||||
| Tax-effected impact of other operating costs (benefit) - contingent acquisition liability adjustment, net | $ | 509 | $ | 1,401 | $ | 509 | $ | (13,715 | ) | |||||||||||||||
| Other operating costs - office consolidation, net | $ | 174 | $ | 1,804 | $ | 174 | $ | 2,740 | ||||||||||||||||
| Income tax benefit (3) | (70 | ) | (729 | ) | (70 | ) | (1,108 | ) | ||||||||||||||||
| Tax-effected impact of other operating costs - office consolidation, net | $ | 104 | $ | 1,075 | $ | 104 | $ | 1,632 | ||||||||||||||||
| Other operating costs - other impairment | $ | - | $ | 98 | $ | - | $ | 98 | ||||||||||||||||
| Income tax benefit (5) | - | (40 | ) | - | (40 | ) | ||||||||||||||||||
| Tax-effected impact of other operating costs - other impairment | $ | - | $ | 58 | $ | - | $ | 58 | ||||||||||||||||
| EBITDA reconciliation: | ||||||||||||||||||||||||
| Net Income | $ | 14,777 | $ | 7,827 | $ | 27,419 | $ | 32,970 | ||||||||||||||||
| Interest expense | 1,429 | 1,238 | 2,689 | 2,970 | ||||||||||||||||||||
| Interest income | (36 | ) | (46 | ) | (75 | ) | (101 | ) | ||||||||||||||||
| Other (income) expense, net | (444 | ) | 176 | (784 | ) | (152 | ) | |||||||||||||||||
| Income tax expense | 9,356 | 5,162 | 16,094 | 11,933 | ||||||||||||||||||||
| Depreciation expense | 7,015 | 5,724 | 13,537 | 11,079 | ||||||||||||||||||||
| Accelerated depreciation - office consolidation | 33 | 139 | 33 | 139 | ||||||||||||||||||||
| Amortization expense | 2,891 | 2,297 | 5,812 | 4,566 | ||||||||||||||||||||
| EBITDA | $ | 35,021 | $ | 22,517 | $ | 64,725 | $ | 63,404 | ||||||||||||||||
| Severance expense | 1,140 | 3,553 | 1,997 | 5,056 | ||||||||||||||||||||
| Other operating costs (benefit) - contingent acquisition liability adjustment, net | 850 | 2,308 | 850 | (12,625 | ) | |||||||||||||||||||
| Other operating costs - office consolidation, net | 141 | 1,665 | 141 | 2,601 | ||||||||||||||||||||
| Other operating costs - other impairment | - | 98 | - | 98 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 37,152 | $ | 30,141 | $ | 67,713 | $ | 58,534 | ||||||||||||||||
| Net income | $ | 14,777 | $ | 7,827 | $ | 27,419 | $ | 32,970 | ||||||||||||||||
| Tax-effected impact of severance expense | 710 | 2,321 | 1,257 | 3,304 | ||||||||||||||||||||
| Tax-effected impact of other operating costs (benefit) - contingent acquisition liability adjustment, net | 509 | 1,401 | 509 | (13,715 | ) | |||||||||||||||||||
| Tax-effected impact of other operating costs - office consolidation, net | 104 | 1,075 | 104 | 1,632 | ||||||||||||||||||||
| Tax-effected impact of other operating costs - other impairment | - | 58 | - | 58 | ||||||||||||||||||||
| Adjusted net income | $ | 16,100 | $ | 12,682 | $ | 29,289 | $ | 24,249 | ||||||||||||||||
| Shares used in computing adjusted per diluted share data | 48,841 | 49,310 | 48,936 | 49,369 | ||||||||||||||||||||
| Adjusted earnings per share | $ | 0.33 | $ | 0.26 | $ | 0.60 | $ | 0.49 | ||||||||||||||||
| For the quarter ended | For the six months ended | |||||||||||||||||||||||
|
Free Cash Flow (5) |
June 30, | June 30, | ||||||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 34,212 | $ | 29,149 | $ | 7,655 | $ | (4,805 | ) | |||||||||||||||
| Changes in assets and liabilities | (1,291 | ) | (4,356 | ) | 52,906 | 54,455 | ||||||||||||||||||
| Allowance for doubtful accounts receivable | (2,911 | ) | (1,402 | ) | (4,547 | ) | (1,592 | ) | ||||||||||||||||
| Purchases of property and equipment | (5,080 | ) | (10,284 | ) | (10,039 | ) | (23,197 | ) | ||||||||||||||||
| Payments of acquisition liabilities | (498 | ) | (1,530 | ) | (498 | ) | (1,530 | ) | ||||||||||||||||
| Payments of contingent acquisition liabilities | - | - | (49 | ) | - | |||||||||||||||||||
| Free Cash Flow | $ | 24,432 | $ | 11,577 | $ | 45,428 | $ | 23,331 | ||||||||||||||||
|
Leverage Ratio (6) |
At June 30, | |||||||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||||||
| Adjusted EBITDA for prior twelve-month period | $ | 130,121 | $ | 124,979 | ||||||||||||||||||||
| Bank debt | $ | 189,757 | $ | 171,386 | ||||||||||||||||||||
| Leverage ratio | 1.46 | 1.37 | ||||||||||||||||||||||
| For the quarter ended | For the six months ended | |||||||||||||||||||||||
|
Organic Growth (7) |
June 30, | June 30, | ||||||||||||||||||||||
| 2016 | 2015 | Growth | 2016 | 2015 | Growth | |||||||||||||||||||
| Revenues before reimbursements | $ | 238,485 | $ | 211,023 | 13.0 | % | $ | 461,960 | $ | 412,179 | 12.1 | % | ||||||||||||
| Pro forma acquisition adjustment | - | 6,350 | - | 14,561 | ||||||||||||||||||||
| Currency impact | 714 | - | 1,737 | - | ||||||||||||||||||||
| Organic RBR | $ | 239,199 | $ | 217,373 | 10.0 | % | $ | 463,697 | $ | 426,740 | 8.7 | % | ||||||||||||
| 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). Adjusted net income and adjusted earnings per share exclude net income (loss) and per share net income (loss) impact of severance expense and other operating costs (benefit). Severance expense and other operating costs (benefit) are not considered to be non-recurring, infrequent or unusual to our business. Management believes that these measures provide investors with enhanced comparability of the Company's results of operations across periods. | |
| (3) Effective income tax expense (benefit) has been determined based on specific tax jurisdiction. | |
| (4) A portion of the deferred contingent acquisition liability adjustment for the six months ended June 30, 2015 was non-taxable in nature. | |
| (5) 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. | |
| (6) 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. | |
| (7) 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. | |
