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Navigant's Q2 Earnings Beat Estimates

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Navigant Consulting Inc (NCI - Free Report) reported second-quarter 2013 net income of $14.0 million or 27 cents per share compared with $9.6 million or 18 cents in the year-earlier quarter. Adjusted EPS was 31 cents in the reported quarter compared with 21 cents in the year-ago quarter. Adjusted earnings exceeded the Zacks Consensus Estimate by 7 cents. Increased revenues from Healthcare and Energy segment primarily led the earnings higher.

Total revenue was up 4.0% year over year to $213.1 million, while revenues before reimbursements (RBR) increased 5.0% to $189.7 million. Total revenue exceeded the Zacks Consensus Estimate of $208 million.

EBITDA (earnings before interest, tax, depreciation and amortization) for the reported quarter stood at $31.8 million compared with $22.8 million in the year-ago quarter. Adjusted EBITDA was up 40% year over year to $34.1 million, driven by increased operating profit from segments and a 9% reduction in general and administrative expenses.

Segment Performance

The Healthcare segment's revenues rose 28.3% year over year to $52.4 million in second quarter 2013, driven by organic growth and strength in strategy consulting and expertise across industry disciplines. The Energy segment revenues grew 14.5% to $27.5 million, aided by demand for energy efficiency solutions from utility clients and the U.S. federal government as they focus on reducing energy consumption

Disputes, Investigations & Economics segment revenues decreased 4.7% year over year to $82.8 million, primarily due to the divestiture of a portion of Economics business. Financial, Risk & Compliance Advisory segment registered a 4.7% year-over-year decrease in revenues to $50.4 million owing to reduced activity in the restructuring area and lower revenues related to a portion of Navigant’s financial services business based in the UK.


At quarter-end, Navigant had $2.6 million in cash and cash equivalents. Free cash flow increased 15.0% year over year to $24.4 million, while debt levels were down 24% from year-earlier levels to $128.1 million.  In addition, Navigant had approximately $270 million additional borrowing capacity available under its credit facility.

The company repurchased 579,694 shares during second quarter 2013 for $7.5 million at an average price of $12.85 per share. Leverage (Debt divided by trailing twelve month Adjusted EBITDA) improved to 1.03 at June 30, 2013 versus 1.61 in the year ago period


For full year 2013, Navigant expects total revenue to be in the range of $820 million to $850 million. RBR is expected in the range of $740 million to $770 million. Adjusted earnings per share are expected in the range of 95 cents to $1.05. Adjusted EBITDA is expected to range between $115 and $120 million.

Navigant continues to strengthen its leadership in financial services, healthcare, and energy sectors, while optimizing the portfolio for sustainable and profitable growth.

Navigant currently has a Zacks Rank #4 (Sell). Other stocks that look promising in the industry and are worth a look include Franklin Covey Co. (FC - Free Report) , Gartner Inc. (IT - Free Report) and NV5 Holdings, Inc , each carrying a Zacks Rank #2 (Buy).

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