Navigant Consulting Inc. (NCI) recently extended the debt maturity of its $400 million revolving credit facility by more than two years. The current maturity under the credit agreement is Sep 19, 2018, as against the earlier date of May 27, 2016.
A revolving credit facility allows a company to borrow from the bank up to its credit limit. The funds are available to the company on demand without it having to face the hassle of re-applying each time the need for funds arises.
The company has the option to pay borrowings and repayments in multiple currencies including U.S. Dollars, Canadian Dollars, United Kingdom Pound Sterling and Euro. Additionally, as per the financial covenants, the company has approximately $270.0 million available for additional borrowings under the credit facility as on Jun 30, 2013.
Over the past few years, Navigant has reduced its bank debts from $203.0 million as of Dec 31, 2010 to $128.1 million as of Jun 30, 2013. The company has also been successful in complying with the terms and conditions of the financial covenants under the credit agreement.
Navigant has maintained its key financial parameters, namely leverage ratio and interest coverage ratio well within the range specified in the credit agreement. Moreover, the company has successfully conformed to the other terms as well.
The extension of the credit facility signifies banks’ confidence about the company’s long-term potential. Additionally, the extended credit facility will provide Navigant with more operational and financial flexibility, thereby boosting its profitability.
Navigant is a global management consulting company serving energy-based and other regulated industries. The company helps clients to succeed in a business environment of changing regulations, stiff competition and evolving technology by providing effective management consulting services in areas such as business strategy development, marketing and sales, operations management, information technology and customer care.
Navigant currently has a Zacks Rank #3 (Hold). Some better-placed stocks in the same sector worth considering include Information Services Group, Inc. (III), Exponent Inc. (EXPO) and Corporate Executive Board Co. (CEB). While both Exponent Inc. and Corporate Executive carry a Zacks Rank #2 (Buy), Information Services has a Zacks Rank #1 (Strong Buy).