Press Release

Navigant Consulting, Inc. Announces Record Fourth Quarter Revenues

February 21, 2008 at 4:31 PM EST

CHICAGO--(BUSINESS WIRE)--Feb. 21, 2008--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 fourth quarter and full year ended December 31, 2007.

"We had a very solid finish to the year," stated William M. Goodyear, Chairman and Chief Executive Officer. "Our fourth quarter 2007 results reflect strong market demand. As previously disclosed, the Company recorded a restructuring charge related to staff reductions and real estate consolidation in the fourth quarter. Most importantly, the combined impact of the strong market and our restructuring activities have set the stage for improved performance in 2008."

The Company's fourth quarter 2007 results are summarized as follows:

                Fourth Quarter 2007 Financial Results
----------------------------------------------------------------------
                      Q4 2007   Q3 2007  % Change   Q4 2006  % Change
----------------------------------------------------------------------
Total Revenues
 ($000)              $203,288  $190,847       6.5% $179,220      13.4%
----------------------------------------------------------------------
Adjusted EBITDA(1)
 ($000)               $32,946   $26,972      22.2%  $34,071      -3.3%
----------------------------------------------------------------------
EBITDA ($000)         $25,683   $23,675       8.5%  $36,005     -28.7%
----------------------------------------------------------------------
Adjusted EPS(1)         $0.22     $0.14      57.1%    $0.28     -21.4%
----------------------------------------------------------------------
EPS                     $0.13     $0.10      30.0%    $0.30     -56.7%
----------------------------------------------------------------------
Average Billable
 FTEs                   1,985     1,962       1.2%    1,821       9.0%
----------------------------------------------------------------------
Consultant
 Utilization (1,850
 base)                     78%       77%      1.3%       77%      1.3%
----------------------------------------------------------------------
Average Bill Rate        $240      $238       0.8%     $227       5.7%
----------------------------------------------------------------------
DSO                        77        90        --        78        --
----------------------------------------------------------------------

(1) Note: Adjusted EBITDA and Adjusted EPS exclude certain other operating costs. Other operating costs include separation and severance costs and certain real estate related items of $7.3 million in Q4 2007 and $3.3 million in Q3 2007. Other operating costs include a benefit of $1.9 million in Q4 2006 related to the settlement of a litigation charge. See the attached schedules for a reconciliation of Adjusted EBITDA and Adjusted EPS to the GAAP financial results.

Fourth Quarter 2007 Highlights

Fourth quarter 2007 results were strong and the Company's quarterly revenues exceeded $200 million for the first time. These results were positively impacted by improved utilization in both the Company's Disputes and Business Consulting segments. Revenue growth was broad-based amongst the Company's practices, particularly in the Business Consulting segment wherein the Financial Services, Energy and Healthcare practices each experienced attractive growth relative to last year's fourth quarter results. Additionally, the Disputes segment had a strong finish to the year. Cash flow was excellent in the fourth quarter of 2007 and included a substantial reduction in DSO from 90 days at the end of the third quarter of 2007 to 77 days at the end of the fourth quarter of 2007. These results enabled the Company to reduce its borrowings under its unsecured credit agreement at the end of the fourth quarter of 2007 to $257 million from $310 million at the end of the third quarter of 2007.

"In the third quarter we announced several ongoing programs to improve our operating efficiencies," said Scott Krenz, Executive Vice President and Chief Financial Officer. "Our fourth quarter results reflect the first positive returns on these programs. We expect to see ongoing benefits throughout 2008."

    The Company's full year 2007 results are summarized as follows:
                  Full Year 2007 Financial Results
----------------------------------------------------------------------
                                           2007      2006    % Change
----------------------------------------------------------------------
Total Revenues ($000)                    $767,058  $681,745      12.5%
----------------------------------------------------------------------
Adjusted EBITDA(1) ($000)                $118,776  $128,423      -7.5%
----------------------------------------------------------------------
EBITDA ($000)                            $106,939  $121,023     -11.6%
----------------------------------------------------------------------
Adjusted EPS(1)                             $0.80     $1.05     -23.8%
----------------------------------------------------------------------
EPS                                         $0.66     $0.97     -32.0%
----------------------------------------------------------------------
Average Billable FTEs                       1,962     1,759      11.5%
----------------------------------------------------------------------
Consultant Utilization (1,850 base)            77%       78%     -1.3%
----------------------------------------------------------------------
Average Bill Rate                            $236      $226       4.4%
----------------------------------------------------------------------
DSO                                            77        78        --
----------------------------------------------------------------------

(1) Note: Adjusted EBITDA and Adjusted EPS exclude certain other operating costs. Other operating costs include separation and severance costs and certain real estate related items of $11.8 million in 2007. Other operating costs include a $7.4 million litigation charge in 2006. See the attached schedules for a reconciliation of Adjusted EBITDA and Adjusted EPS to the GAAP financial results.

Full Year 2007 Highlights

William Goodyear commented, "2007 was a year of challenge, change and opportunity for Navigant - one that required us to streamline our business and refine our operational focus while vigorously pursuing new opportunities, such as those resulting from the massive disruption in the credit and capital markets. Our full year results reflect the favorable impact of our international investments, and second half strength in our Disputes, Investigative, Energy and Financial Services practices."

Business Segments

During the fourth quarter of 2007 the Company reorganized into three operating segments: North American Dispute and Investigative Services, North American Business Consulting Services and International Consulting Operations.

The Dispute segment's revenues grew 10% from full year 2006 to $325 million for 2007. The segment's impressive finish to the year resulted partly from engagements arising out of the mounting issues in the credit markets as a consequence of the "sub prime crisis" and related litigation and regulatory pressures. This followed a softer first half of 2007 wherein the back-dated stock option matters that began in 2006 were largely concluded in the first quarter of 2007. In addition, the competitive landscape for talent in this segment is intense and is expected to remain challenging.

Navigant's Business Consulting segment closed the year with annual revenues of $379 million, up 6% over the same period last year. The segment's revenues were favorably impacted by the continued strength of the Financial Services and Energy practices, while the Insurance and Healthcare practices were flat year over year.

Full year revenues for the Company's International Consulting Operations grew 116% from 2006 to $63 million for 2007. Continuing global infrastructure disputes, a complementary expansion of financial services capabilities, and further international investment in the segment's Disputes practice were drivers to this growth.

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

Webcast of the Company's Announcement of Fourth Quarter and Full Year 2007 Results

A webcast of management's presentation of the Company's fourth quarter and full year 2007 financial results will be available on the Company's website (www.navigantconsulting.com). To access the call, click the Investor Relations section and select "Conference Calls." This webcast 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 www.navigantconsulting.com.

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 of 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.

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.

              NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME
            (Dollars in thousands, except per share data)
                             (Unaudited)


                                      For the quarter ended
                                        December 31, 2007
                           -------------------------------------------
                             Adjusted    Adjustments        Reported
                           -------------------------------------------
Revenues before
 reimbursements                $179,693                      $179,693
Reimbursements                   23,595                        23,595
                           --------------------------     ------------
  Total revenues               $203,288                      $203,288
Cost of services before
 reimbursable expenses          109,544                       109,544
Reimbursable expenses            23,595                        23,595
                           --------------------------     ------------
  Cost of services              133,139                       133,139
General and administrative
 expenses                        37,203                        37,203
Depreciation                      4,274                         4,274
Amortization                      4,696                         4,696
Other operating costs
  Separation and severance
   costs                             --        2,663  (1)       2,663
  Office consolidation               --        4,600  (1)       4,600
  Litigation charge                  --
                           -------------------------------------------
  Operating income               23,976       (7,263)          16,713
Interest expense (income)         5,741                         5,741
Other expense (income)                7                             7
                           --------------------------     ------------
Income before income tax
 expense                         18,228       (7,263)          10,965
Income tax expense                7,918       (2,929)           4,989
                           --------------------------     ------------
  Net income                    $10,310      ($4,334)          $5,976
                           ==========================     ============

Net income per diluted
 share (EPS)                      $0.22                         $0.13
                           =============                  ============
Shares used in computing
 net income per diluted
 share                           46,533                        46,533
Percentage of revenues
 before reimbursements:
---------------------------
Cost of services before
 reimbursable expenses               61%                           61%
Reimbursable expenses                13%                           13%
General and administrative
 expenses                            21%                           21%

EBITDA (3)                           18%                           14%
Operating income                     13%                            9%
Net income                            6%                            3%
EBITDA (3) reconciliation:
  EBITDA (3)                    $32,946       (7,263) (1)      25,683
   Depreciation                   4,274                         4,274
   Amortization                   4,696                         4,696
                           --------------------------     ------------
  Operating income              $23,976       (7,263)          16,713
                           ==========================     ============

                                      For the quarter ended
                                        December 31, 2006
                           -------------------------------------------
                             Adjusted    Adjustments        Reported
                           -------------------------------------------
Revenues before
 reimbursements                $157,915                       157,915
Reimbursements                   21,305                        21,305
                           --------------------------     ------------
  Total revenues               $179,220                       179,220
Cost of services before
 reimbursable expenses           91,648                        91,648
Reimbursable expenses            21,305                        21,305
                           --------------------------     ------------
  Cost of services              112,953                       112,953
General and administrative
 expenses                        32,196                        32,196
Depreciation                      3,520                         3,520
Amortization                      2,663                         2,663
Other operating costs
  Separation and severance
   costs                             --
  Office consolidation               --
  Litigation charge                  --       (1,934) (2)      (1,934)
                           -------------------------------------------
  Operating income               27,888        1,934           29,822
Interest expense (income)           844                           844
Other expense (income)               30                            30
                           --------------------------     ------------
Income before income tax
 expense                         27,014        1,934           28,948
Income tax expense               11,523          780           12,303
                           --------------------------     ------------
  Net income                    $15,491       $1,154           16,645
                           ==========================     ============

Net income per diluted
 share (EPS)                      $0.28                         $0.30
                           =============                  ============
Shares used in computing
 net income per diluted
 share                           55,529                        55,529
Percentage of revenues
 before reimbursements:
--------------------------
Cost of services before
 reimbursable expenses               58%                           58%
Reimbursable expenses                13%                           13%
General and administrative
 expenses                            20%                           20%

EBITDA (3)                           22%                           23%
Operating income                     18%                           19%
Net income                           10%                           11%
EBITDA (3) reconciliation:
  EBITDA (3)                     34,071        1,934  (2)      36,005
   Depreciation                   3,520                         3,520
   Amortization                   2,663                         2,663
                           --------------------------     ------------
  Operating income               27,888        1,934           29,822
                           ==========================     ============
(1) During the fourth quarter of 2007, the Company incurred
     realignment costs of $7.3 million associated with a management
     reorganization and real estate rationalization, including
     severance and lease termination costs.
(2) During 2006, the Company reached an agreement with the City of
     Vernon, California to settle for $7.4 million all claims related
     to its dispute with the City. During the third quarter of 2006,
     the Company had previously recorded a charge of $9.3 million
     related to this matter. The settlement resulted in a fourth
     quarter 2006 pre-tax benefit to earnings of $1.9 million.
(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 of 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.
              NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
             (Dollars in thousands, except per share data)
                              (Unaudited)


                                       For the year ended
                                        December 31, 2007
                           -------------------------------------------
                             Adjusted    Adjustments        Reported
                           -------------------------------------------
Revenues before
 reimbursements                $681,238                       681,238
Reimbursements                   85,820                        85,820
                           -------------------------------------------
  Total revenues               $767,058                      $767,058

Cost of services before
 reimbursable expenses          421,032                       421,032
Reimbursable expenses            85,820                        85,820
                           -------------------------------------------
  Cost of services              506,852                       506,852
General and administrative
 expenses                       141,430                       141,430
Depreciation                     16,179                        16,179
Amortization                     17,494                        17,494
Other operating costs
    Separation and
     severance costs                 --        7,288  (1)       7,288
    Office consolidation             --        6,750  (1)       6,750
    Gain on sale of
     property                        --       (2,201) (1)      (2,201)
    Litigation charge                --           --               --
                           -------------------------------------------
  Operating income               85,103      (11,837)          73,266
Interest expense (income)        14,771                        14,771
Other expense (income)              (43)                          (43)
                           --------------------------     ------------
Income before income tax
 expense                         70,375      (11,837)          58,538
Income tax expense               29,916       (4,774)          25,142
                           --------------------------     ------------
  Net income                    $40,459      ($7,063)         $33,396
                           ==========================     ============

Net income per diluted
 share (EPS)                      $0.80                         $0.66
                           =============                  ============
Shares used in computing
 net income per diluted
 share                           50,757                        50,757
Percentage of revenues
 before reimbursements:
---------------------------
Cost of services before
 reimbursable expenses               62%                           62%
Reimbursable expenses                13%                           13%
General and administrative
 expenses                            21%                           21%

EBITDA (3)                           17%                           16%
Operating income                     12%                           11%
Net income                            6%                            5%
EBITDA (3) reconciliation:
  EBITDA (3)                   $118,776     ($11,837) (1)    $106,939
    Depreciation                 16,179                        16,179
    Amortization                 17,494                        17,494
                           --------------------------     ------------
  Operating income              $85,103     ($11,837)         $73,266
                           ==========================     ============

                                       For the year ended
                                        December 31, 2006
                           -------------------------------------------
                             Adjusted    Adjustments        Reported
                           -------------------------------------------
Revenues before
 reimbursements                $605,105                      $605,105
Reimbursements                   76,640                        76,640
                           -------------------------------------------
  Total revenues               $681,745                      $681,745

Cost of services before
 reimbursable expenses          349,103                       349,103
Reimbursable expenses            76,640                        76,640
                           -------------------------------------------
  Cost of services              425,743                       425,743
General and administrative
 expenses                       127,579                       127,579
Depreciation                     13,400                        13,400
Amortization                      9,959                         9,959
Other operating costs
    Separation and
     severance costs                 --                            --
    Office consolidation             --                            --
    Gain on sale of
     property                        --                            --
    Litigation charge                --        7,400  (2)       7,400
                           -------------------------------------------
  Operating income              105,064       (7,400)          97,664
Interest expense (income)         4,513                         4,513
Other expense (income)             (209)                         (209)
                           --------------------------     ------------
Income before income tax
 expense                        100,760       (7,400)          93,360
Income tax expense               43,370       (2,984)          40,386
                           --------------------------     ------------
  Net income                    $57,390      ($4,416)         $52,974
                           ==========================     ============

Net income per diluted
 share (EPS)                      $1.05                         $0.97
                           =============                  ============
Shares used in computing
 net income per diluted
 share                           54,703                        54,703
Percentage of revenues
 before reimbursements:
--------------------------
Cost of services before
 reimbursable expenses               58%                           58%
Reimbursable expenses                13%                           13%
General and administrative
 expenses                            21%                           21%

EBITDA (3)                           21%                           20%
Operating income                     17%                           16%
Net income                            9%                            9%
EBITDA (3) reconciliation:
  EBITDA (3)                   $128,423      ($7,400) (2)    $121,023
    Depreciation                 13,400                        13,400
    Amortization                  9,959                         9,959
                           --------------------------     ------------
  Operating income             $105,064      ($7,400)         $97,664
                           ==========================     ============
(1) During 2007, the Company incurred realignment costs of $11.8
     million associated with a management reorganization and real
     estate rationalization, including severance and lease termination
     costs. Additionally, during the third quarter of 2007, the
     Company realized a gain of $2.2 million associated with the sale
     of certain owned real estate.
(2) During 2006, the Company reached an agreement with the City of
     Vernon, California to settle for $7.4 million all claims related
     to its dispute with the City.
(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 of 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.
              NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
       CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
                        (Dollars in thousands)
                             (Unaudited)

                              December 31, September 30, December 31,
                                  2007         2007          2006
                              ----------------------------------------
Assets
-----------------------------
Cash and cash equivalents          $11,656       $21,149       $11,745
Trade accounts receivable,
 net                               189,616       202,097       168,062
Prepaid and other assets            27,287        29,130        20,438
                              ----------------------------------------
  Total current assets             228,559       252,376       200,245

Property and equipment, net         54,687        55,366        51,164
Goodwill and intangible
 assets, net                       488,523       497,934       398,121
Other non-current assets, net        6,928         8,515         2,828
                              ----------------------------------------
  Total assets                    $778,697      $814,191      $652,358
                              ========================================

Liabilities and Stockholders'
 Equity
Bank debt                           $2,250        $2,250       $33,567
Other current liabilities          124,269       109,513        96,175
Long term debt                     254,366       308,148            --
Other non-current liabilities       55,059        55,555        36,040
Stockholders' equity               342,753       338,725       486,576
                              ----------------------------------------

  Total liabilities and
   stockholders' equity           $778,697      $814,191      $652,358
                              ========================================
Selected Data


Days sales outstanding, net
 (DSO) (1)                         77 days       90 days       78 days
                              ========================================

1) Net of deferred revenue.
                      NAVIGANT CONSULTING, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (Dollars in thousands)
                             (Unaudited)

                    For the quarter ended     For the twelve months
                          December 31,           ended December 31,
                       2007         2006         2007         2006
                   ------------ ------------ ------------ ------------
Cash flows from
 operating
 activities:
Net income              $5,976      $16,645      $33,396      $52,974
Adjustments to
 reconcile net
 income to net
 cash provided by
 operating
 activities:
  Depreciation
   expense               4,274        3,520       16,179       13,400
  Amortization
   expense               4,696        2,663       17,494        9,959
  Share based
   compensation
   expense               2,032        4,127       15,410       13,661
  Deferred income
   taxes                (3,026)       2,727         (982)       3,444
  Gain on sale of
   property                 --           --       (2,201)          --
  Other, net             9,944       10,237       11,246       10,857
  Changes in
   assets and
   liabilities          25,928       (3,428)       1,301      (16,383)

                   ------------ ------------ ------------ ------------
Net cash provided
 by operating
 activities             49,824       36,491       91,843       87,912
                   ------------ ------------ ------------ ------------

Cash flows from
 investing
 activities:
  Purchases of
   property and
   equipment            (5,432)      (4,311)     (24,080)     (23,771)
  Proceeds from
   sale of
   property                 60           --        4,088           --
  Acquisitions of
   businesses               --      (14,074)     (65,250)     (56,326)
  Payments of
   acquisition
   liabilities             (53)          --       (4,518)     (13,365)
  Other, net            (1,532)         (11)      (3,448)        (951)

                   ------------ ------------ ------------ ------------
Net cash used in
 investing
 activities             (6,957)     (18,396)     (93,208)     (94,413)
                   ------------ ------------ ------------ ------------

Cash flows from
 financing
 activities:
  Issuances of
   common stock            717        1,297        7,512        9,132
  Repurchase of
   common
   stock/treasury
   stock                    --           --     (218,429)          --
  Proceeds from
   (Payments of)
   term loan              (562)          --      223,875           --
  Payment of notes
   payable              (1,011)          --       (6,978)          --
  Borrowings from
   bank, net           (53,701)     (22,147)      (4,525)     (10,495)
  Other, net             2,197          246         (179)       4,738

                   ------------ ------------ ------------ ------------
Net cash provided
 by (used in)
 financing
 activities            (52,360)     (20,604)       1,276        3,375
                   ------------ ------------ ------------ ------------

Net increase
 (decrease) in
 cash and cash
 equivalents            (9,493)      (2,509)         (89)      (3,126)
Cash and cash
 equivalents at
 beginning of the
 period                 21,149       14,254       11,745       14,871
                   ------------ ------------ ------------ ------------
Cash and cash
 equivalents at
 end of the period     $11,656      $11,745      $11,656      $11,745
                   ============ ============ ============ ============

CONTACT: Navigant Consulting, Inc. Jennifer Moreno Executive Director, Investor Relations 312.573.5634 JMoreno@navigantconsulting.com

SOURCE: Navigant Consulting, Inc.

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