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8-K - FORM 8-K - NAVIGANT CONSULTING INC | c65620e8vk.htm |
Exhibit 99.1
For more information contact:
Jennifer Moreno Reddick
Executive Director, Investor Relations
312.573.5634
jennifer.morenoreddick@navigant.com
Jennifer Moreno Reddick
Executive Director, Investor Relations
312.573.5634
jennifer.morenoreddick@navigant.com
NAVIGANT REPORTS GROWTH IN SECOND QUARTER
REVENUES AND EARNINGS PER SHARE
REVENUES AND EARNINGS PER SHARE
| Second quarter 2011 revenues before reimbursements (RBR) of $173 million, up 12% year over year and 2% sequentially. First half 2011 RBR up 11% over the same period in 2010. | ||
| GAAP EPS of $0.21 for second quarter 2011, up from $0.16 in second quarter 2010 and $0.17 in first quarter 2011. Adjusted EPS of $0.21 for second quarter 2011, up from $0.17 in second quarter 2010 and $0.19 in first quarter 2011. First half 2011 adjusted EPS of $0.40, up 29% from the same period in 2010. | ||
| Consultant utilization of 79% for second quarter 2011, up from 73% in second quarter 2010 and 78% in first quarter 2011. | ||
| Strong cash flow results in $23 million net debt reduction from first quarter 2011. $400 million five-year, unsecured revolving credit facility completed during the quarter. |
CHICAGO, July 27, 2011 Navigant (NYSE:NCI) today announced financial results for the second
quarter ended June 30, 2011.
We are pleased with our year to date operating and financial performance, stated William M.
Goodyear, Chairman and Chief Executive Officer. For the third consecutive quarter, revenues
improved both sequentially and year over year while market demand in our key practice areas drove
the highest utilization we have seen in over three years. The breadth of client demand in each of
our four segments is encouraging. Based on this solid first half and our updated outlook for the
rest of the year, full year 2011 revenues and adjusted earnings per share are expected to move
toward the higher end of our previously communicated ranges.
Second Quarter 2011 Results
The Companys second quarter 2011 results are summarized as follows:
Total Company Second Quarter 2011 Financial Results (1) | ||||||||||||||||||||
Q2 2011 | Q2 2010 | Change | Q1 2011 | Change | ||||||||||||||||
Revenues Before Reimbursements ($000) |
$ | 173,293 | $ | 154,617 | 12.1 | % | $ | 169,604 | 2.2 | % | ||||||||||
Total Revenues ($000) |
$ | 194,408 | $ | 172,323 | 12.8 | % | $ | 188,799 | 3.0 | % | ||||||||||
EBITDA ($000) |
$ | 25,328 | $ | 23,400 | 8.2 | % | $ | 22,380 | 13.2 | % | ||||||||||
Adjusted EBITDA ($000) |
$ | 25,571 | $ | 24,407 | 4.8 | % | $ | 23,616 | 8.3 | % | ||||||||||
Net Income ($000) |
$ | 10,760 | $ | 7,828 | 37.5 | % | $ | 8,778 | 22.6 | % | ||||||||||
Earnings Per Share |
$ | 0.21 | $ | 0.16 | 31.3 | % | $ | 0.17 | 23.5 | % | ||||||||||
Adjusted Earnings Per Share |
$ | 0.21 | $ | 0.17 | 23.5 | % | $ | 0.19 | 10.5 | % | ||||||||||
Average Billable Full Time Equivalents (FTEs) |
1,764 | 1,660 | 6.3 | % | 1,782 | -1.0 | % | |||||||||||||
End of Period Billable FTEs |
1,768 | 1,668 | 6.0 | % | 1,776 | -0.5 | % | |||||||||||||
Consultant Utilization (1,850 base) |
79 | % | 73 | % | 8.2 | % | 78 | % | 1.3 | % | ||||||||||
Average Bill Rate (excluding performance based fees) |
$ | 277 | $ | 266 | 4.1 | % | $ | 274 | 1.1 | % | ||||||||||
Days Sales Outstanding (DSO) |
82 | 79 | 3.8 | % | 83 | -1.2 | % |
1) EBITDA, Adjusted EBITDA and Adjusted Earnings per Share are non GAAP financial measures.
See the attached financial schedules for a reconciliation of EBITDA, Adjusted EBITDA and Adjusted
Earnings per Share to the most directly comparable GAAP financial measures.
Navigant reported second quarter 2011 RBR of $173 million, up 12% from $155 million in second
quarter 2010 and up 2% from $170 million in first quarter 2011. Top line improvements reflected
growing demand in key practice areas as well as the ongoing impact of investments and senior hires
made in 2010. Consultant utilization was a strong 79% for second quarter 2011, an increase from
73% in second quarter 2010 and 78% in first quarter 2011. Average billable FTEs were 1,764 for
second quarter 2011, up from 1,660 in second quarter 2010 and down modestly from 1,782 in first
quarter 2011. Average bill rate, excluding performance based fees, improved to $277 for second
quarter 2011 compared to $266 in second quarter 2010 and $274 in first quarter 2011.
RBR improved for every segment on both a year over year and a sequential basis, reflecting solid
market demand across the Company. Second quarter 2011 EBITDA increased 8% from second quarter 2010
and 13% from first quarter 2011. As anticipated, cost of services and general and administrative
expenses combined were up modestly from first quarter 2011 levels. Depreciation and amortization
expenses declined during second quarter 2011 while interest expense was down sharply from the year
ago quarter. The Company generated strong net cash flow provided by operating activities of $37
million for second quarter 2011, up from $29 million in second quarter 2010. Additionally, as
previously announced, the Company recently completed a new $400 million five-year, unsecured
revolving credit facility.
2
Business Segment Highlights
Business Segment Second Quarter 2011 Financial Results (2) | ||||||||||||||||||||
Q2 2011 | Q2 2010 | Change | Q1 2011 | Change | ||||||||||||||||
Business Segment Revenues ($000) |
||||||||||||||||||||
Business Consulting Services |
$ | 81,193 | $ | 71,756 | 13.2 | % | $ | 79,627 | 2.0 | % | ||||||||||
Dispute and Investigative Services |
73,117 | 63,867 | 14.5 | % | 72,006 | 1.5 | % | |||||||||||||
Economic Consulting |
19,889 | 18,622 | 6.8 | % | 18,539 | 7.3 | % | |||||||||||||
International Consulting |
20,209 | 18,078 | 11.8 | % | 18,627 | 8.5 | % | |||||||||||||
Total Company |
$ | 194,408 | $ | 172,323 | 12.8 | % | $ | 188,799 | 3.0 | % | ||||||||||
Business Segment Revenues before Reimbursements ($000) |
||||||||||||||||||||
Business Consulting Services |
$ | 71,710 | $ | 63,430 | 13.1 | % | $ | 70,469 | 1.8 | % | ||||||||||
Dispute and Investigative Services |
66,789 | 59,737 | 11.8 | % | 65,753 | 1.6 | % | |||||||||||||
Economic Consulting |
18,475 | 16,966 | 8.9 | % | 17,874 | 3.4 | % | |||||||||||||
International Consulting |
16,319 | 14,484 | 12.7 | % | 15,508 | 5.2 | % | |||||||||||||
Total Company |
$ | 173,293 | $ | 154,617 | 12.1 | % | $ | 169,604 | 2.2 | % | ||||||||||
Business Segment Operating Profit ($000) |
||||||||||||||||||||
Business Consulting Services |
$ | 23,453 | $ | 23,148 | 1.3 | % | $ | 23,182 | 1.2 | % | ||||||||||
Dispute and Investigative Services |
27,279 | 21,585 | 26.4 | % | 25,777 | 5.8 | % | |||||||||||||
Economic Consulting |
6,029 | 6,273 | -3.9 | % | 5,757 | 4.7 | % | |||||||||||||
International Consulting |
3,549 | 3,663 | -3.1 | % | 3,282 | 8.1 | % | |||||||||||||
Total Company |
$ | 60,310 | $ | 54,669 | 10.3 | % | $ | 57,998 | 4.0 | % | ||||||||||
(2) A metrics summary including data by segment is available at www.navigant.com/investor_relations.
Navigants Business Consulting Services segment generated RBR of $72 million in second quarter
2011, up 13% from second quarter 2010 and 2% from first quarter 2011. Segment utilization remained
a steady 81% on both a year over year and a sequential basis, while average billable FTEs increased
slightly to 905 in second quarter 2011, up from 899 in first quarter 2011. Year over year
headcount comparisons reflect the Companys healthcare investments in October 2010. The segments
healthcare and energy practices represented a combined 74% of second quarter 2011 Business
Consulting Services RBR and are expected to continue to drive year over year growth opportunities
for the segment.
Navigants Dispute and Investigative Services segment reported RBR of $67 million in second quarter
2011, up 12% from second quarter 2010 and 2% from first quarter 2011. Segment operating profit
improved to 41% for second quarter 2011, up from 36% in second quarter 2010 and 39% in first
quarter 2011. Segment utilization was a strong 81% for the quarter, an increase from 69% in second
quarter 2010 and 76% in first quarter 2011. Average bill rate also improved to $314 for second
quarter 2011 compared to $300 in second quarter 2010 and $308 in first quarter 2011. Average
billable FTEs declined to 562 for second quarter 2011 compared to 642 in second quarter 2010 and
584 in first quarter 2011. Year over year headcount declines were
3
primarily due to actions taken in late 2010 to realign the segments construction disputes
practice. Continued credit crisis engagement opportunities, combined with increasing regulatory
pressure in the healthcare compliance marketplace and improving demand for construction related
disputes services, are driving opportunities for this segment.
Navigants Economic Consulting segment generated RBR of $18 million for second quarter 2011, up 9%
from second quarter 2010 and 3% from first quarter 2011. Segment utilization was 88% for second
quarter 2011 compared to 76% in second quarter 2010 and 79% in first quarter 2011. Average bill
rate was $376 for second quarter 2011, down from $385 in second quarter 2010 due to billable hour
mix, while up from $371 in first quarter 2011. Average billable FTEs were 121 for second quarter
2011, compared to 119 in second quarter 2010 and down slightly from 130 in first quarter 2011.
Antitrust and credit crisis related matters favorably impacted second quarter 2011 results.
Navigants International Consulting segment reported RBR of $16 million for second quarter 2011, up
13% from second quarter 2010 and 5% from first quarter 2011. Segment operating profit of $4
million for second quarter 2011 was down 3% from second quarter 2010 and up 8% from first quarter
2011. Consultant utilization was 62% for second quarter 2011, up from 60% in second quarter 2010
and down from 65% in first quarter 2011. Average bill rate was $303 for second quarter 2011
compared to $259 in second quarter 2010 and $313 in first quarter 2011. Improving demand in the
global construction and global financial services practice areas drove second quarter 2011 results.
2011 Outlook
Based upon Navigants first half performance and outlook for the balance of the year, estimated
2011 revenues, RBR and adjusted EPS are expected to be toward the higher end of previously
communicated ranges. As originally stated, these estimated ranges include total 2011 revenues
between $715 and $760 million, RBR between $650 and $690 million, and adjusted EPS between $0.70
and $0.77 per share. The outlook for adjusted EBITDA remains unchanged at between $95 and $105
million.
Conference Call Details
Goodyear will host a conference call to discuss the Companys second quarter 2011 financial results
at 10:00 a.m. Eastern Time on Wednesday, July 27, 2011. The conference call may be accessed via
the Navigant website (www.navigant.com/investor_relations) or by dialing 888.847.7597 (630.395.0268
for international callers) and referencing pass code NCI. A replay of the web cast will be
available for approximately 90 days.
4
About Navigant
Navigant (NYSE: NCI) is a specialized, global expert services firm dedicated to assisting clients
in creating and protecting value in the face of critical business risks and opportunities. Through
senior level engagement with clients, Navigant professionals combine technical expertise in
Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business
pragmatism in the highly regulated Construction, Energy, Financial Services and Healthcare
industries. More information about Navigant can be found at www.navigant.com.
Statements included in this press release which are not historical in nature are forward-looking
statements as defined within the Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by words including outlook, plans, goals, anticipates,
believes, intends, estimates, expects and similar expressions. These statements are based
upon managements 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 success and timing of the Companys implementation of its strategic business
assessment; the success of the Companys organizational changes and cost reduction actions; risks
inherent in international operations, including foreign currency fluctuations; ability to make
acquisitions; pace, timing and integration of acquisitions; impairment charges; management of
professional staff, including dependence on key personnel, recruiting, attrition and the ability to
successfully integrate new consultants into the Companys practices; utilization rates; conflicts
of interest; potential loss of clients; clients financial condition and their ability to make
payments to the Company; risks inherent with litigation; higher risk client assignments;
professional liability; potential legislative and regulatory changes; continued access to capital;
and general economic conditions. Further information on these and other potential factors that
could affect the Companys financial results are included under the Risk Factors section and
elsewhere in the Companys filings with the Securities and Exchange Commission (SEC), which are
available on the SECs 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.
###
5
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
For the quarters ended June 30, | For the six months ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Revenues before reimbursements |
$ | 173,293 | $ | 154,617 | $ | 342,897 | $ | 308,487 | ||||||||
Reimbursements |
21,115 | 17,706 | 40,310 | 37,386 | ||||||||||||
Total revenues |
194,408 | 172,323 | 383,207 | 345,873 | ||||||||||||
Cost of Services: |
||||||||||||||||
Cost of services before reimbursable expenses |
116,822 | 102,128 | 231,637 | 204,358 | ||||||||||||
Reimbursable expenses |
21,115 | 17,706 | 40,310 | 37,386 | ||||||||||||
Total costs of services |
137,937 | 119,834 | 271,947 | 241,744 | ||||||||||||
General and administrative expenses |
31,143 | 29,089 | 63,552 | 59,549 | ||||||||||||
Depreciation expense |
3,206 | 3,553 | 6,583 | 7,354 | ||||||||||||
Amortization expense |
2,163 | 2,962 | 4,464 | 5,758 | ||||||||||||
Operating income |
19,959 | 16,885 | 36,661 | 31,468 | ||||||||||||
Interest expense |
1,911 | 3,508 | 3,751 | 6,986 | ||||||||||||
Interest income |
(429 | ) | (311 | ) | (796 | ) | (624 | ) | ||||||||
Other (income) expense, net |
72 | (44 | ) | 36 | 61 | |||||||||||
Income before income tax expense |
18,405 | 13,732 | 33,670 | 25,045 | ||||||||||||
Income tax expense |
7,645 | 5,904 | 14,132 | 10,770 | ||||||||||||
Net income |
$ | 10,760 | $ | 7,828 | $ | 19,538 | $ | 14,275 | ||||||||
Basic net income per share |
$ | 0.21 | $ | 0.16 | $ | 0.39 | $ | 0.29 | ||||||||
Shares used in computing income per basic share |
50,820 | 49,205 | 50,498 | 48,948 | ||||||||||||
Diluted net income per share |
$ | 0.21 | $ | 0.16 | $ | 0.38 | $ | 0.28 | ||||||||
Shares used in computing income per diluted share |
51,270 | 50,264 | 51,153 | 50,180 |
6
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)
June 30, | June 30, | December 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 384 | $ | 3,000 | $ | 1,981 | ||||||
Accounts receivable, net |
190,730 | 162,227 | 179,058 | |||||||||
Prepaid expenses and other current assets |
26,293 | 19,243 | 19,697 | |||||||||
Deferred income tax assets |
13,425 | 13,130 | 18,749 | |||||||||
Total current assets |
230,832 | 197,600 | 219,485 | |||||||||
Non-current assets: |
||||||||||||
Property and equipment, net |
35,800 | 40,459 | 38,903 | |||||||||
Intangible assets, net |
19,533 | 29,851 | 23,194 | |||||||||
Goodwill |
566,213 | 521,859 | 561,002 | |||||||||
Other assets |
27,552 | 22,605 | 26,451 | |||||||||
Total assets |
$ | 879,930 | $ | 812,374 | $ | 869,035 | ||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 11,821 | $ | 9,640 | $ | 10,900 | ||||||
Accrued liabilities |
7,781 | 9,196 | 7,936 | |||||||||
Accrued compensation-related costs |
60,991 | 50,406 | 72,639 | |||||||||
Income tax payable |
| | 2,306 | |||||||||
Term loan current |
| 18,397 | 18,397 | |||||||||
Other current liabilities |
29,017 | 40,363 | 43,401 | |||||||||
Total current liabilities |
109,610 | 128,002 | 155,579 | |||||||||
Non-current liabilities: |
||||||||||||
Deferred income tax liabilities |
49,241 | 40,809 | 42,274 | |||||||||
Other non-current liabilities |
22,278 | 19,461 | 25,907 | |||||||||
Bank debt non-current |
205,221 | 24,094 | 33,695 | |||||||||
Term loan non-current |
| 160,058 | 150,859 | |||||||||
Total non-current liabilities |
276,740 | 244,422 | 252,735 | |||||||||
Total liabilities |
386,350 | 372,424 | 408,314 | |||||||||
Stockholders equity: |
||||||||||||
Common stock |
61 | 60 | 61 | |||||||||
Additional paid-in capital |
562,089 | 560,282 | 564,214 | |||||||||
Treasury stock |
(194,519 | ) | (209,936 | ) | (206,162 | ) | ||||||
Retained earnings |
134,781 | 105,461 | 115,243 | |||||||||
Accumulated other comprehensive loss |
(8,832 | ) | (15,917 | ) | (12,635 | ) | ||||||
Total stockholders equity |
493,580 | 439,950 | 460,721 | |||||||||
Total liabilities and stockholders equity |
$ | 879,930 | $ | 812,374 | $ | 869,035 | ||||||
Selected Data |
||||||||||||
Days sales outstanding, net (DSO) |
82 | 79 | 81 | |||||||||
7
NAVIGANT
CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share data)
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share data)
(Unaudited)
For the quarters ended | For the six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income |
$ | 10,760 | $ | 7,828 | $ | 19,538 | $ | 14,275 | ||||||||
Adjustments
to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
Depreciation expense |
3,206 | 3,553 | 6,583 | 7,354 | ||||||||||||
Amortization expense |
2,163 | 2,962 | 4,464 | 5,758 | ||||||||||||
Share-based compensation expense |
2,433 | 1,963 | 4,133 | 2,938 | ||||||||||||
Accretion of interest expense |
221 | 196 | 529 | 401 | ||||||||||||
Deferred income taxes |
4,157 | 2,495 | 11,313 | 7,814 | ||||||||||||
Allowance for doubtful accounts receivable |
1,003 | 2,354 | 3,028 | 3,938 | ||||||||||||
Changes in assets and liabilities: |
||||||||||||||||
Accounts receivable |
(5,589 | ) | 10,069 | (13,962 | ) | (3,541 | ) | |||||||||
Prepaid expenses and other assets |
139 | (8,530 | ) | (4,745 | ) | (9,780 | ) | |||||||||
Accounts payable |
73 | 406 | 889 | 1,561 | ||||||||||||
Accrued liabilities |
(26 | ) | (943 | ) | (217 | ) | 1,203 | |||||||||
Accrued compensation-related costs |
19,512 | 11,296 | (11,751 | ) | (19,120 | ) | ||||||||||
Income tax payable |
104 | (1,173 | ) | (2,266 | ) | (1,782 | ) | |||||||||
Other liabilities |
(777 | ) | (3,870 | ) | (3,577 | ) | (3,370 | ) | ||||||||
Net cash provided by operating activities |
37,379 | 28,606 | 13,959 | 7,649 | ||||||||||||
Cash flows from investing activities: |
||||||||||||||||
Purchases of property and equipment |
(1,677 | ) | (2,423 | ) | (3,401 | ) | (5,479 | ) | ||||||||
Acquisitions of businesses, net of cash acquired |
(1,046 | ) | (29,870 | ) | (1,046 | ) | (33,870 | ) | ||||||||
Payments of acquisition liabilities |
(10,000 | ) | | (10,217 | ) | | ||||||||||
Other, net |
| | (225 | ) | | |||||||||||
Net cash used in investing activities |
(12,723 | ) | (32,293 | ) | (14,889 | ) | (39,349 | ) | ||||||||
Cash flows from financing activities: |
||||||||||||||||
Issuances of common stock |
410 | 872 | 1,050 | 1,533 | ||||||||||||
Payment upon termination of credit agreement |
(250,613 | ) | | (250,613 | ) | | ||||||||||
Proceeds from new credit agreement |
250,613 | | 250,613 | | ||||||||||||
Borrowings from banks, net of repayments |
(23,275 | ) | 5,734 | 6,432 | 25,049 | |||||||||||
Payments of term loan |
| (460 | ) | (4,599 | ) | (40,920 | ) | |||||||||
Payments of debt issuance costs |
(2,814 | ) | | (2,814 | ) | | ||||||||||
Other, net |
(163 | ) | 271 | (839 | ) | (119 | ) | |||||||||
Net cash provided by (used in) financing activities |
(25,842 | ) | 6,417 | (770 | ) | (14,457 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents |
(62 | ) | (91 | ) | 103 | 13 | ||||||||||
Net increase (decrease) in cash and cash equivalents |
(1,248 | ) | 2,639 | (1,597 | ) | (46,144 | ) | |||||||||
Cash and cash equivalents at beginning of the period |
1,632 | 361 | 1,981 | 49,144 | ||||||||||||
Cash and cash equivalents at end of the period |
$ | 384 | $ | 3,000 | $ | 384 | $ | 3,000 | ||||||||
8
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
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 measures
calculated and presented in accordance with generally accepted accounting
principles (GAAP) are included in this press release. In recent years, the
Company incurred significant severance expense directly related to its
strategic realignment, as well as substantial staffing reductions made to meet
weaker market demand primarily during the recessionary period which began at
the end of 2008. Adjusted EBITDA and adjusted operating income excludes
severance and adjusted earnings per share excludes the net income impact of
severance in all periods presented. Severance is not considered to be
non-recurring, infrequent or unusual to our business, however, management
believes providing investors with this information enhances the comparability
of the companys operating performance across periods. While management
believes that these non-GAAP financial measures are useful in evaluating
Navigants operations, this information should be considered as supplemental in
nature and not as a substitute for or superior to, any measure prepared in
accordance with GAAP.
EBITDA, Adjusted EBITDA, Adjusted operating income
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
a measure of financial performance under generally accepted accounting
principles (GAAP). The Company believes EBITDA provides useful supplemental
information for investors to evaluate financial performance. This data is also
used by the Company for assessment of its operating and financial results, in
addition to operating income, net income and other GAAP measures. Management
believes EBITDA is a useful indicator of the Companys financial and operating
performance and its ability to generate cash flows from operations that are
available for interest, debt service, taxes and capital expenditures.
Investors should recognize that EBITDA might not be comparable to
similarly-titled measures of other companies. Adjusted EBITDA and adjusted
operating income excludes the impact of severance as discussed above. This
measure 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.
For the quarters ended June 30, |
For the six months ended June 30, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
EBITDA reconciliation: |
||||||||||||||||
Operating income |
$ | 19,959 | $ | 16,885 | $ | 36,661 | $ | 31,468 | ||||||||
Depreciation |
3,206 | 3,553 | 6,583 | 7,354 | ||||||||||||
Amortization |
2,163 | 2,962 | 4,464 | 5,758 | ||||||||||||
EBITDA |
$ | 25,328 | $ | 23,400 | $ | 47,708 | $ | 44,580 | ||||||||
Adjusted EBITDA and
operating income to
exclude severance
expense reconciliation
to operating
income: |
||||||||||||||||
Operating income |
$ | 19,959 | $ | 16,885 | $ | 36,661 | $ | 31,468 | ||||||||
Severance expense |
243 | 1,007 | 1,479 | 1,843 | ||||||||||||
Adjusted operating
income to exclude
severance expense |
$ | 20,202 | $ | 17,892 | $ | 38,140 | $ | 33,311 | ||||||||
Depreciation |
3,206 | 3,553 | 6,583 | 7,354 | ||||||||||||
Amortization |
2,163 | 2,962 | 4,464 | 5,758 | ||||||||||||
Adjusted EBITDA,
excluding severance
expense |
$ | 25,571 | $ | 24,407 | $ | 49,187 | $ | 46,423 | ||||||||
Adjusted earnings per share (adjusted to exclude the net income impact from severance expense)
The Company discloses adjusted earnings per share to exclude the net income impact from
severance expense. Management believes the adjusted earnings per share information provides
additional insights into Navigants ongoing operating performance. This measure 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.
For the quarters ended | For the six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Severance expense |
$ | 243 | $ | 1,007 | $ | 1,479 | $ | 1,843 | ||||||||
Income tax (benefit)(1) |
(96 | ) | (371 | ) | (536 | ) | (693 | ) | ||||||||
Net income impact of severance expense |
$ | 147 | $ | 636 | $ | 943 | $ | 1,150 | ||||||||
Shares used in computing income per diluted share |
51,270 | 50,264 | 51,153 | 50,180 | ||||||||||||
Diluted income per share impact of severance expense |
$ | | $ | 0.01 | $ | 0.02 | $ | 0.02 | ||||||||
Net income |
$ | 10,760 | $ | 7,828 | $ | 19,538 | $ | 14,275 | ||||||||
Net income impact of severance expense |
147 | 636 | 943 | 1,150 | ||||||||||||
Adjusted net income, excluding the net income
impact of severance expense |
$ | 10,907 | $ | 8,464 | $ | 20,481 | $ | 15,425 | ||||||||
Shares used in computing income per diluted share |
51,270 | 50,264 | 51,153 | 50,180 | ||||||||||||
Adjusted earnings per share, excluding the net
income impact of severance expense |
$ | 0.21 | $ | 0.17 | $ | 0.40 | $ | 0.31 | ||||||||
(1) | Effective income tax (benefit) has been determined based on specific tax jurisdiction. |
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