Navigant Reports Fourth Quarter and Full Year 2012 Financial Results and Provides 2013 Business and
Navigant Reports Fourth Quarter and Full Year 2012 Financial Results and Provides 2013 Business and Financial Outlook
Fourth quarter 2012 revenues before reimbursements (RBR) of $194 million were up 14% compared to fourth quarter 2011. Full year 2012 RBR totaled $743 million, an increase of 7% over the prior year.
GAAP earnings per share (EPS) were $0.26 for fourth quarter 2012, up 24% from $0.21 in fourth quarter 2011, and $0.90 for full year 2012, up from $0.80 for full year 2011. Adjusted EPS was $0.31 for fourth quarter 2012, up 41% from $0.22 in fourth quarter 2011, and $0.98 for full year 2012, up 17% from $0.84 for full year 2011.
Adjusted EBITDA for fourth quarter 2012 improved 32% from same quarter 2011 to $34 million (17% of RBR), and full year 2012 adjusted EBITDA was $112 million (15% of RBR), up 11% over full year 2011.
582,000 shares of common stock were repurchased during fourth quarter 2012 at an average price of $10.66 per share, with a total of 1.6 million shares repurchased during full year 2012.
Year-end long-term debt of $134 million declined $21 million from September 30, 2012 on strong fourth quarter 2012 cash flow.
2013 outlook anticipates continued growth in RBR, adjusted EBITDA and adjusted EPS.
CHICAGO--(BUSINESS WIRE)-- Navigant (NYS: NCI) today announced financial results for the fourth quarter and full year ended December 31, 2012, along with the Company's business and financial outlook for 2013.
"Navigant had an exceptional finish to the year," commented Julie Howard, Chief Executive Officer. "We delivered record quarterly revenues driven by organic growth and achieved improved EBITDA margin levels, despite challenging macroeconomic trends. Our 2012 financial results reflect execution against our strategy to Perform, Bank and Innovate. I commend our professionals for continuing to deliver preeminent client service and I am optimistic about our opportunities in 2013."
Fourth Quarter and Full Year 2012 Results | |||||||||||||||||||||
Total Company Fourth Quarter and Full Year 2012 Financial Results (1) | |||||||||||||||||||||
Q4 2012 | Q4 2011 | Change | 2012 | 2011 | Change | ||||||||||||||||
RBR ($000) | $ | 194,346 | $ | 170,996 | 13.7% | $ | 743,383 | $ | 695,714 | 6.9% | |||||||||||
Total Revenues ($000) | $ | 225,357 | $ | 197,005 | 14.4% | $ | 844,641 | $ | 784,684 | 7.6% | |||||||||||
EBITDA ($000) | $ | 30,280 | $ | 24,797 | 22.1% | $ | 105,611 | $ | 98,254 | 7.5% | |||||||||||
Adjusted EBITDA ($000) | $ | 33,777 | $ | 25,644 | 31.7% | $ | 112,166 | $ | 101,177 | 10.9% | |||||||||||
Net Income ($000) | $ | 13,527 | $ | 11,056 | 22.3% | $ | 46,169 | $ | 41,130 | 12.3% | |||||||||||
Earnings Per Share | $ | 0.26 | $ | 0.21 | 23.8% | $ | 0.90 | $ | 0.80 | 12.5% | |||||||||||
Adjusted Earnings Per Share | $ | 0.31 | $ | 0.22 | 40.9% | $ | 0.98 | $ | 0.84 | 16.7% | |||||||||||
Average Client Service Full Time Equivalents (FTE) | 1,994 | 1,889 | 5.6% | 1,926 | 1,818 | 5.9% | |||||||||||||||
End of Period Client Service FTE | 2,013 | 1,882 | 7.0% | 2,013 | 1,882 | 7.0% | |||||||||||||||
Consultant Utilization (1,850 base) (2) | 75% | 74% | 1.4% | 75% | 77% | -2.6% | |||||||||||||||
Average Bill Rate (excluding performance based fees) (2) | $ | 276 | $ | 283 | -2.5% | $ | 281 | $ | 282 | -0.4% | |||||||||||
Days Sales Outstanding (DSO) | 72 | 76 | -5.3% | 72 | 76 | -5.3% | |||||||||||||||
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. | ||
2) | Prior period utilization and bill rate figures have been restated to reflect consulting personnel only and do not include personnel who provide technology, data and process related client services. | ||
Navigant reported fourth quarter 2012 RBR of $194 million, up 14% from fourth quarter 2011, on increased revenues across all four business segments, approximately two-thirds of which was due to organic growth. RBR increased 7% sequentially compared to third quarter 2012. Performance-based fees contributed only modestly to fourth quarter 2012 results, adding $2 million versus $4 million from 2011. Average client service FTE increased 6% for fourth quarter 2012 over the same period in 2011. Fourth quarter 2012 adjusted EBITDA increased 32% over the same period in 2011 to 17% of RBR, reflecting both higher revenues and the effects of the Company's margin improvement programs. Strong fourth quarter 2012 cash collections brought December 31, 2012 long-term debt down $21 million, or 14%, compared to September 30, 2012, while up slightly from 2011 year-end balances. DSO continued a downward trend and declined to 72 days compared to 76 days at the end of 2011.
Full year 2012 RBR was $743 million, an increase of 7% over 2011, primarily due to organic growth. Total revenues for 2012 were $845 million, up 8% compared to the prior year. Year over year increases were driven by several large mortgage servicing review engagements, as well as demand for services in the Company's Healthcare segment. Average client service FTE for 2012 increased 6% over the prior year with most of the increase relating to demand for Navigant's Technology, Data & Process services. Adjusted EBITDA for full year 2012 improved to $112 million, up 11% over prior year, and adjusted EBITDA margin of 15% in 2012 was consistent with that of 2011. Interest expense for the full year 2012 declined 25% on lower effective interest rates and lower average outstanding borrowing when compared to the prior year. Full year 2012 adjusted EPS increased to $0.98, up 17% from 2011. Cash flow from operations totaled $76 million in 2012, funding Navigant's capital spending program, growth investments and nearly $20 million of stock repurchases.
Business Segment Highlights | |||||||||||||||||||||
Business Segment Fourth Quarter and Full Year 2012 Financial Results (3) | |||||||||||||||||||||
Q4 2012 | Q4 2011 | Change | 2012 | 2011 | Change | ||||||||||||||||
Business Segment RBR ($000) | |||||||||||||||||||||
Disputes, Investigations & Economics | $ | 85,142 | $ | 82,305 | 3.4% | $ | 340,036 | $ | 338,965 | 0.3% | |||||||||||
Financial, Risk & Compliance Advisory | 43,390 | 32,653 | 32.9% | 162,614 | 136,472 | 19.2% | |||||||||||||||
Healthcare | 41,800 | 34,991 | 19.5% | 151,065 | 134,611 | 12.2% | |||||||||||||||
Energy | 24,014 | 21,047 | 14.1% | 89,668 | 85,666 | 4.7% | |||||||||||||||
Total Company | $ | 194,346 | $ | 170,996 | 13.7% | $ | 743,383 | $ | 695,714 | 6.9% | |||||||||||
Business Segment Revenues ($000) | |||||||||||||||||||||
Disputes, Investigations & Economics | $ | 91,459 | $ | 90,346 | 1.2% | $ | 364,426 | $ | 370,850 | -1.7% | |||||||||||
Financial, Risk & Compliance Advisory | 57,196 | 40,651 | 40.7% | 204,166 | 159,663 | 27.9% | |||||||||||||||
Healthcare | 47,428 | 39,915 | 18.8% | 170,150 | 151,841 | 12.1% | |||||||||||||||
Energy | 29,274 | 26,093 | 12.2% | 105,899 | 102,330 | 3.5% | |||||||||||||||
Total Company | $ | 225,357 | $ | 197,005 | 14.4% | $ | 844,641 | $ | 784,684 | 7.6% | |||||||||||
Segment Operating Profit ($000) | |||||||||||||||||||||
Disputes, Investigations & Economics | $ | 32,125 | 30,504 | 5.3% | $ | 123,288 | $ | 122,672 | 0.5% | ||||||||||||
Financial, Risk & Compliance Advisory | 16,577 | 11,997 | 38.2% | $ | 58,564 | $ | 44,906 | 30.4% | |||||||||||||
Healthcare | 15,711 | 11,756 | 33.6% | $ | 50,959 | $ | 42,739 | 19.2% | |||||||||||||
Energy | 9,155 | 8,180 | 11.9% | $ | 31,721 | $ | 32,882 | -3.5% | |||||||||||||
Total Company | $ | 73,568 | $ | 62,437 | 17.8% | $ | 264,532 | $ | 243,199 | 8.8% | |||||||||||
3) | A metrics summary including data by segment is available atwww.navigant.com/investor_relations. | ||
Fourth quarter 2012 RBR in the Disputes, Investigations & Economics segment increased 3% over both fourth quarter 2011 and third quarter 2012. The year over year increase reflects growth of the segment's Legal Technology Solutions business and improved demand within the Economics business including revenue contributions from the December 2012 acquisition of AFE. Segment operating profit for fourth quarter 2012 improved 5% from the prior year and 11% from third quarter 2012. The year over year increase reflects higher utilization in the Economics business, improved results in the segment's European disputes business, and margin improvement initiatives.
In the Financial, Risk & Compliance Advisory segment, fourth quarter 2012 RBR increased 33% over fourth quarter 2011 and 11% over third quarter 2012. Full year 2012 RBR increased 19% over 2011. The segment reported improved segment operating profit for the fourth quarter 2012, up 38% over the prior year fourth quarter. As has been the case throughout 2012, several large mortgage servicing review engagements drove higher revenues and operating profits when compared to 2011.
Navigant's Healthcare segment reported fourth quarter RBR increases of 20% over fourth quarter 2011 and 14% over third quarter 2012. Full year 2012 RBR in the segment was up 12% over prior year. Segment operating profit for fourth quarter 2012 increased 34% compared to fourth quarter 2011 due to the combination of higher revenues and cost management initiatives. The segment has experienced growing demand for its broad line of services focused on the health-care industry including performance improvement and strategy expertise. The Life Sciences practice continues to contribute to segment growth aided by the successful integration of Easton Associates, acquired in October 2012.
Fourth quarter 2012 Energy segment RBR increased 14% over fourth quarter 2011 and 5% over third quarter 2012. Segment operating profit was up 12% in fourth quarter 2012 compared to the same period in 2011. Demand for Navigant's energy efficiency expertise and the expansion of market research and subscription offerings in 2012 continued to drive revenue growth.
2013 Outlook
"In 2013, we plan to build upon our strong 2012 performance," said Howard. "We expect solid growth in our Healthcare and Energy segments as well as broadly across our Technology enabled businesses, which will help offset the impact from recent settlements of large mortgage servicing review matters. We also anticipate continued progress in the realization of our longer-term margin targets. Our balance sheet is in great shape and, with another year of strong cash flow, we plan to increase our share repurchases."
Full year 2013 RBR is expected to range between $740 and $800 million while total 2013 revenues are estimated to be between $820 and $880 million. Adjusted EBITDA is expected to range between $115 and $125 million, and adjusted EPS is estimated to be between $0.95 and $1.10.
Conference Call Details
Julie Howard will host a conference call to discuss the Company's fourth quarter and full year 2012 results at 10:00 a.m. Eastern Time on Thursday, February 14, 2013. The conference call may be accessed via the Navigant website (www.navigant.com/investor_relations) or by dialing 888.593.8430 (312.470.7390for international callers) and referencing pass code "NCI." A replay of the web cast will be available for approximately 90 days.
About Navigant
Navigant (NYS: 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, 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 natureare 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 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 success of the Company's organizational changes; 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 Company's 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 market and general economic 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 atwww.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) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the quarter ended | For the year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues: | ||||||||||||||||
Revenues before reimbursements | $ | 194,346 | $ | 170,996 | $ | 743,383 | $ | 695,714 | ||||||||
Reimbursements | 31,011 | 26,009 | 101,258 | 88,970 | ||||||||||||
Total revenues | 225,357 | 197,005 | 844,641 | 784,684 | ||||||||||||
Costs of services: | ||||||||||||||||
Cost of services before reimbursable expenses | 126,377 | 112,199 | 494,972 | 467,045 | ||||||||||||
Reimbursable expenses | 31,011 | 26,009 | 101,258 | 88,970 | ||||||||||||
Total costs of services | 157,388 | 138,208 | 596,230 | 556,015 | ||||||||||||
General and administrative expenses | 36,664 | 34,000 | 141,155 | 130,415 | ||||||||||||
Depreciation expense | 4,112 | 3,239 | 14,986 | 13,303 | ||||||||||||
Amortization expense | 1,888 | |||||||||||||||
