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Navigant Reports Second Quarter 2013 Results

Stocks in this article: NCI

Navigant (NYSE:NCI) today announced financial results for the second quarter ended June 30, 2013.

Navigant reported second quarter 2013 revenues before reimbursements (RBR) of $189.7 million, compared to $181.5 million for second quarter 2012, a 5% increase. RBR growth for the quarter was led by especially strong results from the Healthcare segment, with a 30% increase in RBR, and a 12% increase in RBR from the Energy segment. Total revenues were $213.1 million for the second quarter 2013, compared to $204.6 million for second quarter 2012, an increase of 4%.

Adjusted EBITDA of $34.1 million for second quarter 2013 rose 40% compared to $24.4 million for second quarter 2012, with Adjusted EBITDA margin (Adjusted EBITDA as a percentage of RBR) at 18% for second quarter 2013, compared to 13% for the same period in 2012. The improvement in margin was due to a 9% increase in segment operating profit and a 9% reduction in general and administrative expenses. The decrease in general and administrative expenses was due to reduced information technology costs, lower bad debt expense and lower facilities costs.

Net income for second quarter 2013 was $14.0 million, compared to $9.6 million in the prior year quarter, an increase of 46%. Effective income tax rate was 43% for second quarter 2013 compared to 41% for second quarter 2012.

Earnings per share (EPS) were $0.27 for second quarter 2013, compared to $0.18 for second quarter 2012, a 50% increase. Adjusted EPS were $0.31 for second quarter 2013, compared to $0.21 for second quarter 2012, an increase of 48%.

“We realized growth in revenues and a significant increase in profitability while making additional progress on our long-term strategic objectives in the period,” commented Julie Howard, Chief Executive Officer. “Healthcare and Energy, which represent higher growth markets, performed well, and the Financial, Risk & Compliance segment exceeded our expectations on the strength of the diversity of our offerings and our ability to quickly identify and transition resources to new work. Moving forward, we will continue to pursue opportunities that solidify Navigant’s leadership in the financial services, healthcare, and energy sectors while optimizing our portfolio for sustainable, profitable growth.”


Segment Financial Highlights

For the quarter ended June 30,  
    2013   2012   Change
RBR ($000)
Disputes, Investigations & Economics $ 76,352 $ 81,350 -6.1 %
Financial, Risk & Compliance 42,738 42,800 -0.1 %
Healthcare 46,814 36,022 30.0 %
Energy     23,803       21,357     11.5 %
Total Company   $ 189,707     $ 181,529     4.5 %
Total Revenues ($000)
Disputes, Investigations & Economics $ 82,828 $ 86,894 -4.7 %
Financial, Risk & Compliance 50,376 52,847 -4.7 %
Healthcare 52,383 40,839 28.3 %
Energy     27,505       24,020     14.5 %
Total Company   $ 213,092     $ 204,600     4.2 %
Segment Operating Profit ($000)
Disputes, Investigations & Economics $ 25,393 $ 27,995 -9.3 %
Financial, Risk & Compliance 16,440 15,402 6.7 %
Healthcare 18,110 11,463 58.0 %
Energy     8,075       7,475     8.0 %
Total Company   $ 68,018     $ 62,335     9.1 %
Segment Operating Margin (% of RBR)
Disputes, Investigations & Economics 33.3 % 34.4 % -1.1 %
Financial, Risk & Compliance 38.5 % 36.0 % 2.5 %
Healthcare 38.7 % 31.8 % 6.9 %
Energy     33.9 %     35.0 %   -1.1 %
Total Company     35.9 %     34.3 %   1.6 %

Healthcare RBR increased 30% for second quarter 2013 compared to the same quarter of 2012. Approximately two-thirds of the increase was organically driven growth. Navigant’s strength in strategy consulting and expertise across industry disciplines continued to meet growing client needs to address the challenges of the Affordable Care Act, Medicaid managed care and other industry reforms. Second quarter 2013 Healthcare segment operating profit increased 58% compared to second quarter 2012 reflecting exceptional RBR growth while costs increased only modestly, demonstrating the benefits of scaling this business.

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