Press Release

Navigant Consulting, Inc. Announces Record First Quarter 2008 Revenues

April 24, 2008 at 4:06 PM EDT
CHICAGO, Apr 24, 2008 (BUSINESS WIRE) -- Navigant Consulting, Inc. (NYSE:NCI), a global consulting firm providing dispute, investigative, operational, risk management and financial advisory solutions, today announced financial results for the first quarter ended March 31, 2008.

"We are very pleased with the strength of our results in the first quarter, reflecting record quarterly revenues and providing an excellent start to 2008," stated William M. Goodyear, Chairman and Chief Executive Officer. "We realized continuing strong market demand in a number of our sectors, with particularly favorable impact in the Disputes & Investigations, Healthcare, Financial Services and International Disputes practices. The combination of continued buoyancy in the marketplace, coupled with Navigant's sharpened operating platform, has enhanced our ability to leverage our business model."

First Quarter 2008 Highlights

The Company's first quarter 2008 results are summarized as follows:

               First Quarter 2008 Financial Results(1)
                      Q1 2008   Q4 2007  % Change   Q1 2007  % Change
Total Revenues
 ($000)               $207,139  $203,288      1.9%  $183,290     13.0%
EBITDA ($000)          $32,558   $25,683     26.8%   $27,924     16.6%
Adjusted EBITDA
 ($000)                $33,208   $32,946      0.8%   $29,201     13.7%
EPS                      $0.23     $0.13     76.9%     $0.20     15.0%
Adjusted EPS             $0.25     $0.22     13.6%     $0.22     13.6%
Average Billable
 FTEs                    1,913     1,985     -3.6%     1,933     -1.0%
End of Period
 Billable FTEs           1,896     1,944     -2.5%     1,928     -1.7%
 Utilization (1,850
 base)                     83%       78%      6.4%       78%      6.4%
Average Bill Rate
 performance fees)        $254      $240      5.8%      $230     10.4%
DSO                         83        77      7.8%        81      2.5%

(1)See the attached schedules for a reconciliation of Adjusted EBITDA and Adjusted EPS to the GAAP financial results.

"Increases in our key practice operating fundamentals - most notably utilization and average bill rate - positively impacted our profitability in the first quarter," commented Julie Howard, President and Chief Operating Officer. "These improvements are evidence of the traction we are gaining from our 2007 restructuring initiatives. We remain focused on optimizing the effectiveness of our infrastructure, and consistently executing on plan."

Business Segment Highlights

The Company's Business Consulting segment produced solid revenue and profit, led by continued strong performance in the Energy and Financial Services practices. Increased awareness of the global energy footprint and the enactment of the 2007 Energy Act have resulted in heightened demand for Navigant's experts in energy efficiencies and renewable energy technologies. The Financial Services practice is benefiting from multiple demand drivers including complex accounting matters, credit risk advisory needs, and ongoing regulatory pressures, although it is anticipated that operations and technology transformation services will trend down as the year progresses. The Corporate Finance and Healthcare practices also performed well, resulting in growth in both revenues and profitability. The Company's Healthcare professionals are responding to increasing demand across all facets of the industry related to the regulatory environment and consumer activism.

The Disputes & Investigative Services segment achieved substantial year over year growth which resulted from a number of market drivers including ongoing regulatory demands, white collar litigation, investigations related to anti-money laundering and the Foreign Corrupt Practices Act (FCPA), and growing pressures and increased litigation in the global credit markets. Navigant believes that the global credit crisis has contributed to a significantly increased focus on managing credit liquidity and risk. This trend combined with heightened scrutiny from the multiple parties involved - including regulators, investors and the public - has created significant demand for Navigant's risk, restructuring, investigative and valuations experts resident throughout the Company.

Navigant's International Consulting Operations segment revenues grew significantly year over year, reflecting the Company's acquisition investments made in 2007 as well as the performance of the International Construction Disputes practice which benefited from continuing demand for infrastructure projects in Europe, the Middle East and Asia. The segment's Financial Services practice produced solid results and is focused on expansion of the group's management consulting capabilities to include regulatory oriented skill sets to meet growing demands.

A Company metrics summary including data by segment is available on Navigant's website ( under the Investor Relations section.

Announcement of Definitive Agreement to Acquire Chicago Partners

On April 21, 2008 the Company announced that it has entered into a definitive agreement to acquire Chicago Partners, a group of leading academic and industry professionals providing economic analyses of legal and business issues to law firms, corporations and government agencies. "The Chicago Partners team will make an outstanding addition to Navigant's existing portfolio of services," said William Goodyear. "Chicago Partners will enable Navigant to enhance the breadth and depth of its testifying experts and, ultimately, to qualify for more client engagements that require superior testimony capabilities. Additionally, Navigant will be able to provide Chicago Partners with the staffing skills and resources they require to take on larger cases."

Under the terms of the agreement, Navigant will pay approximately $50 million in cash and $23 million in stock to acquire Chicago Partners, which can also earn additional purchase consideration based on achieving certain post-closing performance targets. Chicago Partners' total revenue for 2007 was $46 million. The acquisition is subject to standard closing conditions and regulatory approval, and is expected to close in the second quarter of 2008.

Web Cast of the Company's Announcement of First Quarter 2008 Results

A web cast of management's presentation of the Company's first quarter 2008 financial results will be available on Navigant's website ( under the Investor Relations section. A replay of the web cast will be available for 90 days.

About Navigant Consulting

Navigant Consulting, Inc. (NYSE:NCI) is a specialized independent consulting firm providing dispute, financial, regulatory and operational advisory services to government agencies, legal counsel and large companies facing the challenges of uncertainty, risk, distress and significant change. The Company focuses on industries undergoing substantial regulatory or structural change and on the issues driving these transformations. "Navigant" is a service mark of Navigant International, Inc. Navigant Consulting, Inc. (NCI) is not affiliated, associated, or in any way connected with Navigant International, Inc. and NCI's use of "Navigant" is made under license from Navigant International, Inc. More information about Navigant Consulting can be found at

Except as set forth below, statements included in this press release, which are not historical in nature are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates," "believes," "intends," "estimates," "expects" and similar expressions. These statements are based upon management's current expectations 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 indicated in the forward-looking statements including, without limitation: the success of the Company's organizational changes; risks inherent in international operations including foreign currency fluctuations; pace, timing and integration of acquisitions; 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; dependence on the expansion of and the increase in the Company's service offerings and staff; conflicts of interest; potential loss of clients; risks inherent with litigation; significant client assignments; professional liability; potential legislative and regulatory changes; and general economic conditions. Further information on these and other potential factors that could affect the Company's financial results is included in the Company's filings with the SEC under the "Risk Factors" sections and elsewhere in those filings. 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 after the date of this press release.

                       (In thousands, except per share data)

                                       For the quarter ended
                                           March 31, 2008
                                Adjusted   Adjustments      Reported

Revenues before reimbursements   $184,294                    $184,294
Reimbursements                     22,845                      22,845
  Total revenues                  207,139            -        207,139

Cost of services before
 reimbursable expenses            113,073                     113,073
Reimbursable expenses              22,845                      22,845
  Cost of services                135,918            -        135,918
General and administrative
 expenses                          38,013                      38,013
Depreciation                        4,165                       4,165
Amortization                        4,227                       4,227
Other operating costs
  Separation and severance
   costs                                -                           -
  Office consolidation                  -        1,518          1,518

  Operating income                 24,816       (1,518)        23,298
Interest expense , net              4,330                       4,330
Other expense                           5                           5
Income before income tax
 expense                           20,481       (1,518)        18,963
Income tax expense                  8,669         (612)         8,057
  Net income                      $11,812        ($906)       $10,906

Net income per diluted share        $0.25                       $0.23

Shares used in computing net
 income per diluted share
                                   46,838                      46,838

Percentage of revenues before
Cost of services before
 reimbursable expenses                 61%                         61%
Reimbursable expenses                  12%                         12%
General and administrative
 expenses                              21%                         21%

EBITDA (3)                             18%                         18%
Operating income                       13%                         13%
Net income                              6%                          6%

EBITDA (3) reconciliation:
  EBITDA (3)                      $33,208        $(650)       $32,558
  Depreciation                      4,165                       4,165
  Accelerated Depreciation -
   Office consolidation                 -         (868)           868
  Amortization                      4,227                       4,227
  Operating income                $24,816      $(1,518)(1)    $23,298

                                       For the quarter ended
                                           March 31, 2007
                                Adjusted   Adjustments      Reported

Revenues before
 reimbursements                  $164,838                    $164,838
Reimbursements                     18,452                      18,452
  Total revenues                  183,290            -        183,290

Cost of services before
 reimbursable expenses            101,234                     101,234
Reimbursable expenses              18,452                      18,452
  Cost of services                119,686            -        119,686
General and administrative
 expenses                          34,403                      34,403
Depreciation                        3,721                       3,721
Amortization                        3,636                       3,636
Other operating costs
  Separation and severance
   costs                                -        1,277          1,277
  Office consolidation                  -                           -

  Operating income                 21,844       (1,277)        20,567
Interest expense , net                842                         842
Other expense                           9                           9
Income before income tax
 expense                           20,993       (1,277)        19,716
Income tax expense                  8,894         (515)         8,379
  Net income                      $12,099        ($762)       $11,337

Net income per diluted share        $0.22                       $0.20

Shares used in computing net
 income per diluted share
                                   55,907                      55,907

Percentage of revenues before
Cost of services before
 reimbursable expenses                 61%                         61%
Reimbursable expenses                  11%                         11%
General and administrative
 expenses                              21%                         21%

EBITDA (3)                             18%                         17%
Operating income                       13%                         12%
Net income                              7%                          7%

EBITDA (3) reconciliation:
  EBITDA (3)                      $29,201      $(1,277)       $27,924
  Depreciation                      3,721                       3,721
  Accelerated Depreciation -
   Office consolidation                 -                           -
  Amortization                      3,636                       3,636
  Operating income                $21,844      $(1,277)(2)    $20,567

(1) During the first quarter of 2008, the Company incurred realignment
     costs of $1.5 million associated with real estate
     rationalization, including office closure costs, leasehold
     improvement write downs and accelerated depreciation on leasehold

(2) During the first quarter of 2007, the Company incurred separation
     costs and severence of $1.3 million associated with a management

(3) EBITDA (earnings before interest, taxes, depreciation and
     amortization) is not a measure of financial performance under
     generally accepted accounting principles (GAAP). The Company
     believes EBITDA is useful supplemental information for investors
     to evaluate financial performance. This data is also used by the
     Company for assessment of its operating and financial results, in
     addition to operating income, net income and other GAAP measures.
     Management believes EBITDA is a useful indicator of the Company's
     financial and operating performance and its ability to generate
     cash flows from operations that are available for taxes and
     capital expenditures. Investors should recognize that EBITDA
     might not be comparable to similarly-titled measures of other
     companies. This measure should be considered in addition to, and
     not as a substitute for or superior to, any measure of
     performance prepared in accordance with GAAP.

                   (In thousands, except DSO data)

                                 March 31,   December 31,  March 31,
Assets                              2008         2007         2007
------------------------------- --------------------------------------
Cash and cash equivalents             $7,632      $11,656      $21,173
Trade accounts receivable, net       206,567      189,616      179,876
Prepaid and other assets              27,196       27,287       26,161
  Total current assets               241,395      228,559      227,210

Property and equipment, net           52,129       54,687       50,537
Goodwill and intangible assets,
 net                                 475,557      488,523      415,043
Other non-current assets, net          8,373        6,928        6,495
  Total Assets                      $777,454     $778,697     $699,285

Liabilities and Stockholders'

Bank debt                             $2,250       $2,250      $63,506
Other current liabilities            105,382      124,269       85,977
Bank debt, long-term                 265,517      254,366            0
Other liabilities                     55,454       55,059       35,631
Stockholders' equity                 348,851      342,753      514,171
  Total Liabilities and
   stockholders' equity             $777,454     $778,697     $699,285

Selected Data

Days sales outstanding, net
 (DSO) (1)
                                          83           77           81

1) Net of deferred revenue.

                      NAVIGANT CONSULTING, INC.
              Dollars in 000s (except per share amounts)

                                               For the quarter ended
                                                     March 31,
                                                 2008         2007
                                             ------------ ------------

Cash flows from operating activities:
Net income                                       $10,906      $11,337
Adjustments to reconcile net income to net
cash provided by (used in) operating
  Depreciation expense                             4,165        3,721
  Depreciation expense - office
   consolidations                                    868            -
  Amortization expense                             4,227        3,636
  Share-based compensation expense                 3,533        3,263
  Deferred income taxes                              522        1,599
  Other, net                                       2,261        2,985
  Changes in assets and liabilities              (40,513)     (34,034)

Net cash used in operating activities            (14,031)      (7,493)

Cash flows from investing activities:
  Purchases of property and equipment             (2,531)      (3,240)
  Acquisitions of businesses                           -      (13,734)
  Payments of acquisition liabilities             (1,154)        (800)
  Other, net                                           -          773

Net cash used in investing activities             (3,685)     (17,001)

Cash flows from financing activities:
  Issuances of common stock                        2,563        3,427
  Payment of term loan installment                  (562)           -
  Payment of notes payable                          (499)           -
  Borrowings from bank, net                       11,752       29,763
  Other, net                                         438          732

Net cash provided by financing activities         13,692       33,922

Net (decrease) increase in cash and cash
 equivalents                                      (4,024)       9,428
Cash and cash equivalents at beginning of the
 period                                           11,656       11,745
Cash and cash equivalents at end of the
 period                                           $7,632      $21,173

SOURCE: Navigant Consulting, Inc.

Navigant Consulting, Inc.
Jennifer Moreno
Executive Director, Investor Relations

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