Market Overview

Navigant Reports Second Quarter 2017 Financial Results

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Navigant (NYSE:NCI) today announced financial results for the second
quarter ended June 30, 2017.

Financial Summary and Highlights:

  • Second quarter 2017 revenues before reimbursements (RBR) of $235.2
    million decreased 1% (or relatively flat on a currency adjusted basis)
    and total revenues of $256.8 million decreased 2% compared to second
    quarter 2016
  • Second quarter 2017 net income was $8.8 million, or $0.18 per share,
    compared to $14.8 million, or $0.30 per share, for second quarter 2016
  • Second quarter 2017 adjusted earnings per share (EPS) of $0.24
    decreased from $0.33 in second quarter 2016, primarily driven by lower
    than expected revenues coupled with maintenance of resources in
    anticipation of an improved demand environment in the second half of
    2017
  • Repurchased $9.0 million of common stock during second quarter 2017,
    an increase of 33% over second quarter 2016
  • Management updated its 2017 financial outlook to reflect first half
    performance

"Demand for our services in the second quarter was impacted by
unexpected factors, some of which we have already begun to overcome, and
others that will take more time to address," stated Julie Howard,
Navigant Chairman and CEO. "We experienced more conservative buying
patterns than originally anticipated, leading to extended sales cycles
and longer project conversion. We also believe the slowdown in demand
for certain of our services was driven by legislative and regulatory
uncertainty in the U.S. In response to these factors we implemented
certain performance improvement actions both during and after the close
of the quarter, including targeted staff reductions and other cost
control measures."

Howard further commented, "We are encouraged that we saw our overall
performance improve over the course of the second quarter, and our
pipeline of opportunities strengthen. We anticipate a stronger second
half, primarily driven by continued organic growth in our Healthcare
segment, and an improved backlog of work in our Financial Services and
Compliance segment. However, we believe it is prudent to modestly adjust
our guidance downward for the full year to reflect first half results,
and our view of the uncertainties in the current demand environment."

Navigant reported second quarter 2017 RBR of $235.2 million, a 1%
decrease compared to $238.5 million for second quarter 2016. Total
revenues decreased 2% to $256.8 million for second quarter 2017 compared
to $261.7 million for second quarter 2016. Net income for second quarter
2017 was $8.8 million, or $0.18 per share, compared to $14.8 million, or
$0.30 per share, in the prior year second quarter. Segment operating
profit includes $3.3 million of severance expense. Additionally,
severance expense of $1.1 million was incurred related to General &
Administrative operations as Navigant executed against its plans to
increase administrative efficiencies and implement business support
improvements. Adjusted EPS was $0.24 for second quarter 2017, compared
to $0.33 in second quarter 2016. Second quarter 2017 adjusted EBITDA was
$29.2 million, a 21% decrease from $37.2 million for the same period in
2016.

Segment Financial Summary

   

For the quarter ended
June 30,

      2017     2016     Change
RBR ($000)        
Healthcare $ 94,134 $ 89,876 4.7 %
Energy 31,743 29,295 8.4 %
Financial Services Advisory and Compliance 33,683 39,994 -15.8 %
Disputes, Forensics & Legal Technology       75,678         79,320       -4.6 %
Total Company     $ 235,238       $ 238,485       -1.4 %
Total Revenues ($000)
Healthcare $ 102,804 $ 98,386 4.5 %
Energy 36,544 32,855 11.2 %
Financial Services Advisory and Compliance 37,244 45,360 -17.9 %
Disputes, Forensics & Legal Technology       80,254         85,082       -5.7 %
Total Company     $ 256,846       $ 261,683       -1.8 %
Segment Operating Profit ($000)
Healthcare $ 28,116 $ 29,362 -4.2 %
Energy 8,516 8,402 1.4 %
Financial Services Advisory and Compliance 12,307 17,511 -29.7 %
Disputes, Forensics & Legal Technology       21,429         28,963       -26.0 %
Total Company     $ 70,368       $ 84,238       -16.5 %
Segment Operating Margin (% of RBR)
Healthcare 29.9 % 32.7 %
Energy 26.8 % 28.7 %
Financial Services Advisory and Compliance 36.5 % 43.8 %
Disputes, Forensics & Legal Technology       28.3 %       36.5 %      
Total Company       29.9 %       35.3 %      
 

Healthcare segment RBR increased 5% for second quarter 2017 compared to
the respective period in 2016, primarily on an organic basis. Segment
RBR for the quarter also increased 4% sequentially from first quarter
2017. Growth was driven by continued demand from hospital systems for
large, strategy-led transformation projects and demand from life
sciences companies for commercialization solutions. The segment also
experienced growth in managed services contracts, albeit at a lower rate
than expected. Segment operating profit declined 4% in second quarter
2017 compared to the same period in 2016, primarily due to business mix.

Energy segment RBR increased 8% for second quarter 2017 on a
year-over-year basis, led by contributions from the Ecofys acquisition
announced in November 2016. The trend toward a cleaner, distributed,
smarter energy infrastructure is driving change in traditional
strategies and business models for Navigant's energy clients. Growth in
demand from commercial sector clients related to these energy
transformation trends partially offset a decline in work for the U.S.
federal government, as previously disclosed in the first quarter 2017.
Segment operating profit increased 1% in second quarter 2017 compared to
second quarter 2016.

Financial Services Advisory and Compliance segment RBR for second
quarter 2017 decreased 16% compared to the prior year quarter, but
increased 2% sequentially from first quarter 2017. As previously
disclosed, growth in this segment was expected to decelerate in 2017, as
compared to significant organic growth of 22% in full-year 2016, but not
to the degree experienced in the second quarter. Throughout the quarter,
conservative buying patterns for compliance services related to consumer
financial services regulation continued to put revenue pressure on the
segment. In contrast, the environment for financial crime related
services remained strong. Segment pipeline improved over the course of
the quarter and is expected to drive improved revenue performance in the
segment for the second half of the year. Segment operating profit was
down 30% in second quarter 2017 compared to the respective period in
2016, as resources and capabilities were maintained in anticipation of
improving demand.

Disputes, Forensics & Legal Technology second quarter 2017 segment RBR
decreased 5% year-over-year and 6% on a sequential basis from first
quarter 2017. The decrease in RBR was driven by general weakness in
commercial litigation opportunities and a delay in the start dates for
certain engagements in the segment's legal technology solutions
business. Segment operating profit was down 26% in second quarter 2017
compared to the respective period of 2016, largely due to severance
expense of $1.9 million which was recorded during the quarter.

Cash Flow

Net cash provided by operating activities for second quarter 2017 was
$21.3 million compared to $34.2 million for second quarter 2016. Free
cash flow decreased to $13.5 million for second quarter 2017 compared to
$24.4 million for the same period in 2016, primarily driven by a $10.0
million earn-out payment related to the McKinnis acquisition which was
paid during the second quarter of 2017. Days Sales Outstanding was 86
days as of June 30, 2017, up five days compared to December 31, 2016.

Bank debt was $184.8 million at June 30, 2017, compared to $189.8
million at June 30, 2016 and $178.3 million at March 31, 2017, with the
increase in bank debt primarily attributable to the previously mentioned
McKinnis acquisition earn-out payment. Leverage (bank debt divided by
trailing twelve month adjusted EBITDA) was 1.37 at June 30, 2017,
compared to 1.46 at June 30, 2016 and 1.25 at March 31, 2017.

Navigant repurchased 436,122 shares of common stock during the second
quarter 2017 at an aggregate cost of $9.0 million and an average cost of
$20.62 per share.

2017 Outlook

Navigant adjusted its financial outlook for 2017. Full year 2017 RBR is
expected to range between $955 million and $980 million while 2017 total
revenues are estimated to be between $1.04 billion and $1.065 billion.
Adjusted EBITDA for the full year 2017 is expected to range between $135
and $145 million and adjusted EPS for the full year 2017 is estimated to
be between $1.19 and $1.29.

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 2017 adjusted EBITDA guidance and 2017
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 2017 results at 10 a.m. Eastern Time (9 a.m. Central Time) on
Monday, July 31, 2017. The conference call may be accessed via the
Navigant website (investors.navigant.com)
or by dialing 800.988.9675 (415.228.4875 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 markets and clients facing transformational change and
significant regulatory or legal pressures, the firm primarily serves
clients in the healthcare, energy, and financial services industries.
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," "may," "could," "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 or tax rates, laws or regulations; 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; brand equity; 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;
government contracting; professional liability; information security;
the adequacy of our business, financial and information systems and
technology; maintenance of effective internal controls; potential
legislative and regulatory changes; continued and sufficient access to
capital; compliance with covenants in our credit agreement; interest
rate risk; 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, 2016, and elsewhere in the Company's filings with the
Securities and Exchange Commission (SEC), which are available on the
SEC's website or at
investors.navigant.com.
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,
2017     2016 2017     2016
Revenues:
Revenues before reimbursements $ 235,238 $ 238,485 $ 471,449 $ 461,960
Reimbursements   21,608         23,198     43,234         45,010  
Total revenues 256,846 261,683 514,683 506,970
Cost of services:
Cost of services before reimbursable expenses 168,721 157,966 333,773 311,906
Reimbursable expenses   21,608         23,198     43,234         45,010  
Total cost of services 190,329 181,164 377,007 356,916
General and administrative expenses 41,726 44,507 83,210 84,338
Depreciation expense 7,826 7,015 15,299 13,537
Amortization expense 2,219 2,891 4,538 5,812
Other operating costs (benefit):
Contingent acquisition liability adjustments, net - 850 1,199 850
Office consolidation, net - 174 (38 ) 174
Deferred debt issuance costs write off   -         -     145         -  
Operating income 14,746 25,082 33,323 45,343
Interest expense 1,280 1,429 2,349 2,689
Interest income (81 ) (36 ) (112 ) (75 )
Other expense (income), net   602         (444 )   385         (784 )
Income before income tax expense 12,945 24,133 30,701 43,513
Income tax expense   4,148         9,356     10,808         16,094  
Net income $ 8,797       $ 14,777   $ 19,893       $ 27,419  
 
 
Basic per share data
Net income $ 0.19 $ 0.31 $ 0.42 $ 0.58
Shares used in computing basic per share data 47,113 47,550 47,023 47,488
 
Diluted per share data
Net income $ 0.18 $ 0.30 $ 0.41 $ 0.56
Shares used in computing diluted per share data 48,696 48,841 48,833 48,936
 
 
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
       
June 30, December 31,
2017     2016
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,556 $ 8,291
Accounts receivable, net 267,283 261,755
Prepaid expenses and other current assets   35,225         29,762  
Total current assets 309,064 299,808
Non-current assets:
Property and equipment, net 87,996 82,953
Intangible assets, net 24,270 28,727
Goodwill 630,933 625,027
Other assets   24,797         18,282  
Total assets $ 1,077,060       $ 1,054,797  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,938 $ 11,871
Accrued liabilities 17,739 16,144
Accrued compensation-related costs 65,312 106,779
Income tax payable - 1,564
Other current liabilities   28,129         38,616  

Total current liabilities

120,118 174,974
Non-current liabilities:
Deferred income tax liabilities 85,612 77,737
Other non-current liabilities 34,420 32,579
Bank debt non-current   184,787         135,030  
Total non-current liabilities   304,819         245,346  
Total liabilities   424,937         420,320  
Stockholders' equity:
Common stock 58 57
Additional paid-in capital 653,096 644,519
Treasury stock (195,315 ) (181,361 )
Retained earnings 215,936 196,468
Accumulated other comprehensive loss   (21,652 )       (25,206 )
Total stockholders' equity   652,123         634,477  
Total liabilities and stockholders' equity $ 1,077,060       $ 1,054,797  
 

Selected Data (unaudited)

Days sales outstanding, net (DSO) 86 81
 
     
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,
2017     2016 2017     2016
 
Cash flows from operating activities:
Net income $ 8,797 $ 14,777 $ 19,893 $ 27,419

Adjustments to reconcile net income to net cash provided by (used
in) operating activities:

Depreciation expense 7,826 7,015 15,299 13,537
Amortization expense 2,219 2,891 4,538 5,812
Share-based compensation expense 4,380 3,995 7,402 6,524
Deferred income taxes 6,893 98 8,232 1,131
Allowance for doubtful accounts receivable 1,171 2,911 1,175 4,547
Contingent acquisition liability adjustments, net - 850 1,199 850
Other, net 826 384 1,477 741
Changes in assets and liabilities (net of acquisitions):
Accounts receivable (2,731 ) (28,222 ) (7,010 ) (43,765 )
Prepaid expenses and other assets (9,161 ) 1,149 (10,358 ) (1,025 )
Accounts payable (2,290 ) 2,000 (2,371 ) 2,478
Accrued liabilities 799 205 1,383 472
Accrued compensation-related costs 7,386 16,878 (41,870 ) (22,788 )
Income taxes payable (5,962 ) 7,004 (1,609 ) 12,059
Other liabilities   1,152         2,277     964         (337 )
 
Net cash provided by (used in) operating activities 21,305 34,212 (1,656 ) 7,655
 
Cash flows from investing activities:
Purchases of property and equipment (7,100 ) (5,080 ) (20,889 ) (10,039 )
Acquisitions of businesses, net of cash acquired - - - (1,995 )
Other acquisition payments - - - (5,500 )
Other, net   (42 )       (607 )   (158 )       (625 )
 
Net cash used in investing activities (7,142 ) (5,687 ) (21,047 ) (18,159 )
 
Cash flows from financing activities:
Issuances of common stock 729 785 2,643 2,841
Repurchases of common stock (8,993 ) (6,757 ) (13,954 ) (13,023 )
Payments of contingent acquisition liabilities (10,330 ) - (10,330 ) (49 )
Repayments to banks (95,669 ) (112,853 ) (246,469 ) (209,245 )
Borrowings from banks 100,789 92,482 294,591 227,239
Payments of debt issuance costs (35 ) - (1,201 ) -
Other, net   (3,500 )       (2,121 )   (4,827 )       (2,730 )
Net cash (used in) provided by financing activities   (17,009 )       (28,464 )   20,453         5,033  
 
Effect of exchange rate changes on cash and cash equivalents   270         (157 )   515         (114 )
Net decrease in cash and cash equivalents (2,576 ) (96 ) (1,735 ) (5,585 )
Cash and cash equivalents at beginning of the period   9,132         3,406     8,291         8,895  
Cash and cash equivalents at end of the period $ 6,556       $ 3,310   $ 6,556       $ 3,310  
 
 
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,
2017     2016 2017     2016
Severance expense $ 4,385 $ 1,140 $ 6,171 $ 1,997
Income tax benefit (3)   (1,730 )       (430 )   (2,386 )       (740 )
Tax-effected impact of severance expense $ 2,655       $ 710   $ 3,785       $ 1,257  
 
Other operating costs - contingent acquisition liability adjustment,
net
$ - $ 850 $ 1,199 $ 850
Income tax benefit (3)   -         (341 )   (481 )       (341 )
Tax-effected impact of other operating costs - contingent
acquisition liability adjustment, net
$ -       $ 509   $ 718       $ 509  
 
Other operating cost (benefit) - office consolidation, net $ - $ 174 $ (38 ) $ 174
Income tax (benefit) expense (3)   -         (70 )   15         (70 )
Tax-effected impact of other operating cost (benefit) - office
consolidation, net
$ -       $ 104   $ (23 )     $ 104  
 
Other operating costs - deferred debt issuance costs write off $ - $ - $ 145 $ -
Income tax benefit (3)   -         -     (58 )       -  
Tax-effected impact of other operating costs - deferred debt
issuance costs write off
$ -       $ -   $ 87       $ -  
 
EBITDA reconciliation:
Net Income $ 8,797 $ 14,777 $ 19,893 $ 27,419
Interest expense 1,280 1,429 2,349 2,689
Interest income (81 ) (36 ) (112 ) (75 )
Other expense (income), net 602 (444 ) 385 (784 )
Income tax expense 4,148 9,356 10,808 16,094
Depreciation expense 7,826 7,015 15,299 13,537
Accelerated depreciation - office consolidation (included in other
operating costs - office consolidation, net)
- 33 - 33
Amortization expense   2,219         2,891     4,538         5,812  
EBITDA $ 24,791 $ 35,021 $ 53,160 $ 64,725
Severance expense 4,385 1,140 6,171 1,997
Other operating costs - contingent acquisition liability adjustment,
net
- 850 1,199 850
Other operating cost (benefit) - office consolidation, net - 141 (38 ) 141
Other operating costs - deferred debt issuance costs write off   -         -     145         -  
Adjusted EBITDA $ 29,176       $ 37,152   $ 60,637       $ 67,713  
 
Net income $ 8,797 $ 14,777 $ 19,893 $ 27,419
Tax-effected impact of severance expense 2,655 710 3,785 1,257
Tax-effected impact of other operating costs - contingent
acquisition liability adjustment, net
- 509 718 509
Tax-effected impact of other operating cost (benefit) - office
consolidation, net
- 104 (23 ) 104
Tax-effected impact of other operating costs - deferred debt
issuance costs write off
  -         -     87         -  
Adjusted net income $ 11,452       $ 16,100   $ 24,460       $ 29,289  
Shares used in computing adjusted per diluted share data 48,696 48,841 48,833 48,936
Adjusted earnings per share $ 0.24       $ 0.33   $ 0.50       $ 0.60  
 
For the quarter ended For the six months ended

Free Cash Flow (4)

June 30, June 30,
2017     2016 2017     2016
Net cash provided by (used in) operating activities $ 21,305 $ 34,212 $ (1,656 ) $ 7,655
Changes in assets and liabilities 10,807 (1,291 ) 60,871 52,906
Allowance for doubtful accounts receivable (1,171 ) (2,911 ) (1,175 ) (4,547 )
Purchases of property and equipment (7,100 ) (5,080 ) (20,889 ) (10,039 )
Payments of acquisition liabilities - (498 ) - (498 )
Payments of contingent acquisition liabilities   (10,330 )       -     (10,330 )       (49 )
Free Cash Flow $ 13,511       $ 24,432   $ 26,821       $ 45,428  
 

Leverage Ratio (5)

At June 30,
2017     2016
Adjusted EBITDA for prior twelve-month period $ 135,214 $ 130,121
Bank debt $ 184,787 $ 189,757
Leverage ratio 1.37 1.46
 
For the quarter ended For the six months ended

Organic Growth (6)

June 30, June 30,
2017     2016     Growth 2017     2016     Growth
Revenues before reimbursements $ 235,238 $ 238,485 -1.4 % $ 471,449 $ 461,960 2.1 %
Pro forma acquisition adjustment - 5,086 - 10,491
Currency impact   1,581         -           3,374         -        
Organic RBR $ 236,819 $ 243,571 -2.8 % $ 474,823 $ 472,451 0.5 %
 
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 and per share net
income 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) 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.
(5) 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.
(6) 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.

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