Navigant Consulting, Inc. Announces Third Quarter 2009 Results

CHICAGO--(BUSINESS WIRE)--Oct. 29, 2009-- Navigant Consulting, Inc. (NYSE:NCI):

• Revenue before reimbursements totaled $159.2 million, up slightly from second quarter 2009 and down 11% from third quarter 2008.
• Earnings per share totaled $0.17, up 6% from third quarter 2008; adjusted earnings per share (adjusted to exclude the net income impact from severance and other operating costs) totaled $0.20, up 5% from third quarter 2008.
• Utilization and average bill rate steadily improved over the course of the quarter and averaged 76% and $255, respectively, compared to 73% and $250 for the second quarter 2009, and 76% and $265 for the third quarter 2008.
• All operating segments realized sequential increases in revenue and operating profit in the third quarter 2009; ongoing companywide cost reduction efforts continue to exceed targets.
• Liquidity and cash flow remain solid as of September 30, 2009 with bank debt and notes payable down $21.6 million from June 30, 2009 and down $56.9 million from September 30, 2008.

Navigant Consulting, Inc. (NYSE:NCI), a global consulting firm providing dispute, investigative, operational, risk management and financial and regulatory advisory solutions, today announced financial results for the third quarter ended September 30, 2009.

“We are pleased with our third quarter financial results which met our expectations and reflected further stabilization in the markets we serve,” stated William M. Goodyear, Chairman and Chief Executive Officer. “Throughout the year our senior leadership team has focused on market initiatives, maintained key client capabilities, and protected the firm’s profitability in a difficult economic climate. It is gratifying to see those efforts translate into results.”

Third Quarter 2009 Results

The Company’s third quarter 2009 results are summarized as follows:

Total Company Third Quarter 2009 Financial Results (1)
		Q3 2009			Q3 2008			% Change		Q2 2009			% Change
Revenue Before Reimbursements ($000)		$	159,153		$	178,908		-11.0%		$	157,332		1.2%
Total Revenues ($000)		$	177,363		$	198,092		-10.5%		$	173,556		2.2%
Adjusted EBITDA ($000)		$	26,108		$	27,408		-4.7%		$	21,852		19.5%
EBITDA ($000)		$	25,238		$	27,408		-7.9%		$	17,627		43.2%
Net Income ($000)		$	8,340		$	7,836		6.4%		$	3,385		146.4%
Earnings Per Share		$	0.17		$	0.16		6.3%		$	0.07		142.9%
Adjusted Earnings Per Share		$	0.18		$	0.17		5.9%		$	0.12		50.0%
Average Billable FTEs			1,734			1,927		-10.0%			1,832		-5.3%
End of Period Billable FTEs			1,716			1,952		-12.1%			1,778		-3.5%
Consultant Utilization (1,850 base)			76%			76%		0.0%			73%		4.1%
Average Bill Rate (excluding success fees)		$	255		$	265		-3.8%		$	250		2.0%
DSO			87			84		3.6%			91		-4.4%

(1) See the attached financial schedules for a reconciliation of Adjusted EBITDA, Earnings per Share, and Adjusted Earnings per Share, adjusted to exclude the net income impact of severance and other operating costs, to the closest GAAP measure.

Third quarter 2009 revenue before reimbursements (RBR) totaled $159.2 million, up slightly from $157.3 million in the second quarter 2009, but down from $178.9 million in the third quarter 2008. Despite the year over year revenue decline, net income increased 6% due to reductions in cost of services and general and administrative (G&A) expenses as well as lower amortization and interest expense.

Overall third quarter utilization improved to 76% from 73% for the second quarter 2009 and was flat compared to third quarter 2008. Third quarter average bill rate also improved to $255 from $250 for the second quarter 2009, but was down from $265 for the third quarter 2008. Average billable full time equivalents totaled 1,734 for the third quarter, which was down by approximately 100 from the second quarter 2009 and down nearly 200 from the third quarter 2008. Severance costs for the third quarter 2009 were $1.5 million ($0.02 per share), which was comparable to both the second quarter 2009 and year ago levels. Voluntary attrition rates continued to improve to 4% for the third quarter 2009 and 13% on a trailing twelve month basis, compared to 6% and 21%, respectively, for the comparable period in 2008. Adverse currency fluctuations impacted year over year third quarter revenue comparisons by $2.9 million, but were slightly favorable compared to second quarter 2009.

Both cost of services (excluding reimbursables) and G&A expenses continue to run significantly lower than 2008 levels, reflecting the impact of numerous cost reduction initiatives implemented throughout 2009. Cost of services (excluding reimbursables) and G&A expenses totaled $133.0 million in the third quarter 2009, down $18.5 million (12%) from third quarter 2008. While bad debt expense decreased to $6.1 million from $7.7 million in the third quarter 2008, third quarter 2009 accruals were higher than expected as receivables aging lengthened. Days sales outstanding (DSO) decreased to 87 days for the third quarter 2009 from 91 days for the second quarter 2009, but was up from 84 days for the third quarter 2008. Based on third quarter results and the fourth quarter outlook, Navigant continues to expect full year 2009 cost reduction efforts to match or exceed its $50.0 million target.

The Company’s year to date 2009 results are summarized as follows:

Year-to-Date 2009 Financial Results (1)
		YTD 2009			YTD 2008			% Change
Revenue Before Reimbursements ($000)		$	483,697		$	552,587		-12.5%
Total Revenues ($000)		$	533,281		$	616,639		-13.5%
Adjusted EBITDA ($000)		$	70,012		$	95,078		-26.4%
EBITDA ($000)		$	64,617		$	92,473		-30.1%
Net Income ($000)		$	17,158		$	28,728		-40.3%
Earnings Per Share		$	0.35		$	0.60		-41.7%
Adjusted Earnings Per Share		$	0.42		$	0.66		-36.4%

(1) See the attached financial schedules for a reconciliation of Adjusted EBITDA, Earnings per Share, and Adjusted Earnings per Share, adjusted to exclude the net income impact of severance and other operating costs, to the closest GAAP measure.

On a year to date basis, RBR declined 13% and totaled $483.7 million for 2009, compared to $552.6 million for 2008. Currency impacts adversely affected year to date RBR comparisons by $15.9 million. 2009 utilization decreased to 74% from 79% for 2008 and average bill rate totaled $252 for 2009, compared to $262 for 2008. Average full time equivalents dropped to 1,834 for 2009 from 1,918 for 2008, as the Company moved to align its staffing to better match current demand levels. Cost of services (excluding reimbursables) and G&A totaled $413.7 million on a year to date basis, down $43.8 million (10%) from $457.5 million in 2008. Year to date bad debt expense was $14.3 million, compared to $17.2 million in 2008.

The Company’s liquidity and cash flow remain solid; bank debt and notes payable declined $21.6 million from June 30, 2009 and declined $56.9 million from September 30, 2008. As a result, debt to total capitalization declined to 35% at the close of the third quarter 2009 from 42% at the end of the third quarter 2008. Navigant remained within the covenant levels of its $500 million unsecured bank facility, which will mature in 2012.

Business Segment Highlights

Third quarter 2009 financial results for the Company’s four business segments are summarized as follows:

Business Segment Third Quarter 2009 Financial Results
		Q3 2009			Q3 2008			% Change		Q2 2009			% Change
Business Segment Revenues ($000)
North American Dispute and Investigative Services		$	72,578		$	79,836		-9.1%		$	72,225		0.5%
North American Business Consulting Services			70,738			82,902		-14.7%			69,356		2.0%
International Consulting Operations			19,423			20,828		-6.7%			17,820		9.0%
Economic Consulting Services			14,624			14,526		0.7%			14,155		3.3%
Total Company		$	177,363		$	198,092		-10.5%		$	173,556		2.2%
Business Segment Revenues before Reimbursements ($000)
North American Dispute and Investigative Services		$	65,859		$	72,363		-9.0%		$	65,810		0.1%
North American Business Consulting Services			63,884			74,048		-13.7%			63,566		0.5%
International Consulting Operations			15,532			18,311		-15.2%			14,698		5.7%
Economic Consulting Services			13,878			14,186		-2.2%			13,258		4.7%
Total Company		$	159,153		$	178,908		-11.0%		$	157,332		1.2%
Segment Operating Profit ($000) (2)
North American Dispute and Investigative Services		$	28,068		$	32,558		-13.8%		$	25,681		9.3%
North American Business Consulting Services			24,408			28,047		-13.0%			23,356		4.5%
International Consulting Operations			4,105			6,127		-33.0%			4,070		0.9%
Economic Consulting Services			5,239			5,954		-12.0%			4,888		7.2%
Total Company		$	61,820		$	72,686		-14.9%		$	57,995		6.6%

(2) For further detail and comparable year to date amounts see the Q3 2009 Metrics Datasheet posted at www.navigantconsulting.com/investor_relations.

Dispute and Investigative Services segment RBR was stable at $65.9 million for the third quarter 2009, while segment operating profit improved by 9% from the second quarter 2009. Although RBR was down from third quarter 2008, as the quarter progressed demand showed signs of strengthening in areas such as financial markets related litigation and investigations, white collar litigation, and construction disputes and advisory services. Additionally, as the impact of the global economic crisis spreads, a second generation of litigation is beginning to rise on matters including contract disputes, employment class actions, data breaches and theft of trade secrets.

Results for the Business Consulting Services segment were also steady with RBR of $63.9 million for third quarter 2009, while segment operating profit improved 5% from the second quarter 2009. RBR was down from third quarter 2008 largely due to the ongoing tight corporate spending environment. Solid demand in the energy arena continues, particularly as the Company strengthens its Clean Energy Advisor brand which supports activities aimed at reducing greenhouse gas (GHG) emissions. The firm’s healthcare practice also performed well in the third quarter 2009, largely driven by services related to revenue management, coding and documentation, and mergers and acquisitions.

Navigant’s International Consulting Operations segment achieved RBR of $15.5 million, an increase of 6.0% over the previous quarter and a 15% decline from third quarter 2008. On a local currency basis, segment RBR for third quarter 2009 was consistent with that of both second quarter 2009 and third quarter 2008. Segment operating profit improved slightly from second quarter 2009. The market remains strong for global construction dispute services, with particular focus on large infrastructure matters in the Middle East. The financial services business also maintained a strong pipeline, with clients requiring both operational and distribution strategy and transformation.

RBR for the Company’s Economic Consulting Services segment was $13.9 million, an increase of 5% over the previous quarter and a decrease of 2% from second quarter 2009. Segment operating profit for the segment improved 7% from second quarter 2009. Despite recent softness in the legal and regulatory environment, the market for economics expertise continues to be strong.

A Company metrics summary including data by segment is available at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.navigantconsulting.com%2Finvestor_relations&esheet=6085791&lan=en_US&anchor=www.navigantconsulting.com%2Finvestor_relations&index=2&md5=ec6ad0a4c507497cb2c129ece5bde122.

Strategic Refresh Initiative Update

As communicated earlier this year, Navigant completed a strategic assessment of its portfolio of businesses and services and refined its strategy to enhance the firm’s long term value. During the course of the third quarter the Company added several strategic hires, initiated a collaborative agreement with Geisinger Health System, a leading healthcare provider, and made steps toward the acquisition of a small energy firm. Various other senior hires and acquisitions are being pursued consistent with the Company’s growth plans. Additionally, certain service lines were discontinued in the third quarter and further rationalization of other, nonstrategic service areas is likely to continue. The future financial impacts and timing resulting from either new growth initiatives or other redeployments are difficult to predict at this time and are excluded from the earnings outlook referenced below.

2009 Outlook

“We achieved higher adjusted earnings per share for the quarter despite lower year over year revenues and a challenging operating environment,” stated Mr. Goodyear. “While the market tone has begun to feel more optimistic, we remain cautious and will continue to operate under the disciplines that we put into place earlier this year. With one quarter remaining in the fiscal year, we have tightened our range of estimated revenues and RBR while maintaining our full year earnings guidance for 2009.”

Navigant’s RBR and total revenue for 2009 are expected to range from $630 million to $650 million, and $690 million to $710 million, respectively. Estimated earnings per share for the year remain between $0.60 and $0.70, adjusted to exclude the net income impact of severance and other operating costs.

Third Quarter 2009 Earnings Conference Call

Mr. Goodyear will host a conference call to discuss the Company’s financial results at 10:00 a.m. Eastern Time on Thursday, October 29, 2009. The web cast may be accessed at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.navigantconsulting.com%2Finvestor_relations&esheet=6085791&lan=en_US&anchor=www.navigantconsulting.com%2Finvestor_relations&index=3&md5=1ab81d5c024935c12ef87a3c65013425. A replay of the web cast will be available for approximately 90 days.

About Navigant Consulting

Navigant Consulting, Inc. (NYSE: NCI) is a global consulting firm providing dispute, investigative, operational, risk management and financial and regulatory advisory solutions 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 http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.navigantconsulting.com&esheet=6085791&lan=en_US&anchor=www.navigantconsulting.com&index=4&md5=ab783a85f0d7cc7f640e1aa8c7835d94.

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 “goals,” “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 and timing of the Company’s strategy implementation following its strategic business assessment; the success of the Company’s cost reduction actions; risks inherent in international operations including foreign currency fluctuations; ability to make acquisitions; pace, timing and integration of acquisitions; impairment charges; 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; conflicts of interest; potential loss of clients; clients’ financial condition and their ability to make payments to the Company; risks inherent with litigation; higher risk client assignments; professional liability; potential legislative and regulatory changes; continued access to capital; and general economic conditions. Further information on these and other potential factors that could affect the Company’s financial results are included in the Company’s filings with the SEC under the “Risk Factors” section 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
(In thousands, except per share data)
(Unaudited)
			For the quarter ended								For the nine months ended
			September 30,								September 30,
			2009				2008				2009				2008
Revenue before reimbursements			$	159,153			$	178,908			$	483,697			$	552,587
Reimbursements				18,210				19,184				49,584				64,052
	Total revenues			177,363				198,092				533,281				616,639
Cost of services before reimbursable expenses				100,545				110,083				312,779				337,008
Reimbursable expenses				18,210				19,184				49,584				64,052
	Total costs of services			118,755				129,267				362,363				401,060
General and administrative expenses				32,500				41,417				100,906				120,501
Depreciation expense				4,352				4,330				13,312				12,876
Amortization expense				3,055				3,955				10,067				12,779
Other operating costs:
	Office consolidation			985				553				6,505				4,646
	Operating income			17,716				18,570				40,128				64,777
Interest expense				3,671				5,170				11,591				15,390
Interest income				(300	)			(380	)			(908	)			(877	)
Other expense (income), net				214				93				(194	)			30
	Income before income tax expense			14,131				13,687				29,639				50,234
Income tax expense				5,791				5,851				12,481				21,506
	Net income		$	8,340			$	7,836			$	17,158			$	28,728
Basic income per share			$	0.17			$	0.17			$	0.36			$	0.62
Shares used in computing income per basic share				48,493				46,707				48,050				46,439
Diluted income per share			$	0.17			$	0.16			$	0.35			$	0.60
Shares used in computing income per diluted share				49,954				48,895				49,720				47,997

NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
				For the quarter ended September 30, 2009													For the quarter ended September 30, 2008
				Adjusted				Adjustments					Reported				Adjusted				Adjustments					Reported
Revenue before reimbursements				$	159,153								$	159,153			$	178,908								$	178,908
Reimbursements					18,210									18,210				19,184									19,184
		Total revenues			177,363									177,363				198,092									198,092
Cost of services before reimbursable expenses					100,545									100,545				110,083									110,083
Reimbursable expenses					18,210									18,210				19,184									19,184
		Total costs of services			118,755									118,755				129,267									129,267
General and administrative expenses					32,500									32,500				41,417									41,417
Depreciation expense					4,352									4,352				4,330									4,330
Amortization expense					3,055									3,055				3,955									3,955
Other operating costs:
		Office consolidation			-			$	985					985				-			$	553					553
		Operating income			18,701				(985	)				17,716				19,123				(553	)				18,570
Interest expense					3,671									3,671				5,170									5,170
Interest income					(300	)								(300	)			(380	)								(380	)
Other expense, net					214									214				93									93
		Income before income tax expense			15,116				(985	)				14,131				14,240				(553	)				13,687
Income tax expense					6,188				(397	)				5,791				6,074				(223	)				5,851
		Net income		$	8,928				($588	)			$	8,340			$	8,166				($330	)			$	7,836
Diluted income per share (EPS) (3)				$	0.18								$	0.17			$	0.17								$	0.16
Shares used in computing income per diluted share
					49,954									49,954				48,895									48,895
Percentage of revenues before reimbursements:
Cost of services before reimbursable expenses					63	%								63	%			62	%								62	%
Reimbursable expenses					11	%								11	%			11	%								11	%
General and administrative expenses					20	%								20	%			23	%								23	%
EBITDA (4)					16	%								16	%			15	%								15	%
Operating income					12	%								11	%			11	%								10	%
Net income					6	%								5	%			5	%								4	%
EBITDA (4) reconciliation:
		EBITDA (4)		$	26,108				($870	)			$	25,238			$	27,408								$	27,408
		Depreciation			4,352									4,352				4,330									4,330
		Accelerated Depreciation - Office consolidation			-				(115	)				115				-				(553	)				553
		Amortization			3,055									3,055				3,955									3,955
		Operating income		$	18,701				($985	)	(1)		$	17,716			$	19,123				($553	)	(2)		$	18,570
(1)		During the third quarter of 2009 the Company recorded office consolidation costs of $1.0 million associated with real estate rationalization, including office closure costs, leasehold improvement write downs and accelerated depreciation on leasehold improvements.
(2)		During the third quarter of 2008 the Company recorded office consolidation costs of $0.6 million in accelerated depreciation on leasehold improvements associated with real estate rationalization.
(3)		The Company recorded severance costs of $1.5 million during the third quarters of 2009 and 2008. After reducing the severance costs to reflect the tax benefit on such costs of approximately 40%, the net income impact of the severance costs was $0.9 million during the third quarters of 2009 and 2008.
								For the quarter ended September 30,
								2009					2008
		Severance costs						$	1,545				$	1,489
		Tax benefit of severance costs at 40%							(618	)				(596	)
		Net income impact of severance costs						$	927				$	893
		Shares used in computing income per diluted share							49,954					48,895
		Diluted income per share impact of severance costs						$	0.02				$	0.02
		Adjusted net income						$	8,928				$	8,166
		Net income impact of severance costs							927					893
		Adjusted net income, excluding the net income impact of severance costs						$	9,855				$	9,059
		Shares used in computing income per diluted share							49,954					48,895
		Adjusted diluted income per share, excluding the impact of severance costs						$	0.20				$	0.19
(4)		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.

NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
				For the nine months ended													For the nine months ended
				September 30, 2009													September 30, 2008
				Adjusted				Adjustments					Reported				Adjusted				Adjustments					Reported
Revenue before reimbursements				$	483,697								$	483,697			$	552,587								$	552,587
Reimbursements					49,584									49,584				64,052									64,052
		Total revenues			533,281									533,281				616,639									616,639
Cost of services before reimbursable expenses					312,779									312,779				337,008									337,008
Reimbursable expenses					49,584									49,584				64,052									64,052
		Total costs of services			362,363									362,363				401,060									401,060
General and administrative expenses					100,906									100,906				120,501									120,501
Depreciation expense					13,312									13,312				12,876									12,876
Amortization expense					10,067									10,067				12,779									12,779
Other operating costs:
		Office consolidation			-			$	6,505					6,505				-			$	4,646					4,646
		Operating income			46,633				(6,505	)				40,128				69,423				(4,646	)				64,777
Interest expense					11,591									11,591				15,390									15,390
Interest income					(908	)								(908	)			(877	)								(877	)
Other (income) expense, net					(194	)								(194	)			30									30
		Income before income tax expense			36,144				(6,505	)				29,639				54,880				(4,646	)				50,234
Income tax expense					15,104				(2,623	)				12,481				23,380				(1,874	)				21,506
		Net income		$	21,040				($3,882	)			$	17,158			$	31,500				($2,772	)			$	28,728
Diluted income per share (EPS) (3)				$	0.42								$	0.35			$	0.66								$	0.60
Shares used in computing income per diluted share
					49,720									49,720				47,997									47,997
Percentage of revenues before reimbursements:
Cost of services before reimbursable expenses					65	%								65	%			61	%								61	%
Reimbursable expenses					10	%								10	%			12	%								12	%
General and administrative expenses					21	%								21	%			22	%								22	%
EBITDA (4)					14	%								13	%			17	%								17	%
Operating income					10	%								8	%			13	%								12	%
Net income					4	%								4	%			6	%								5	%
EBITDA (4) reconciliation:
		EBITDA (4)		$	70,012				($5,395	)			$	64,617			$	95,078				($2,605	)			$	92,473
		Depreciation			13,312									13,312				12,876									12,876
		Accelerated Depreciation - Office consolidation			-				(1,110	)				1,110				-				(2,041	)				2,041
		Amortization			10,067									10,067				12,779									12,779
		Operating income		$	46,633				($6,505	)	(1)		$	40,128			$	69,423				($4,646	)	(2)		$	64,777
(1)		During the nine months ended for 2009 the Company recorded office consolidation costs of $6.5 million associated with real estate rationalization, including office closure costs, leasehold improvement write downs and accelerated depreciation on leasehold improvements.
(2)		During the nine months ended for 2008 the Company recorded office consolidation costs of $4.6 million associated with real estate rationalization, including office closure costs, leasehold improvement write downs and accelerated depreciation on leasehold improvements.
(3)		The Company recorded severance costs of $5.9 million and $3.2 million during the nine months ended for 2009 and 2008 respectively. After reducing the severance costs to reflect the tax benefit on such costs of approximately 40%, the net income impact of the severance costs was $3.5 million and $1.9 million during the nine months ended for 2009 and 2008 respectively.
								For the nine months ended September 30,
								2009					2008
		Severance costs						$	5,892				$	3,200
		Tax benefit of severance costs at 40%							(2,357	)				(1,280	)
		Net income impact of severance costs						$	3,535				$	1,920
		Shares used in computing income per diluted share							49,720					47,997
		Diluted income per share impact of severance costs						$	0.07				$	0.04
		Adjusted net income						$	21,040				$	31,500
		Net income impact of severance costs							3,535					1,920
		Adjusted net income, excluding the net income impact of severance costs						$	24,575				$	33,420
		Shares used in computing income per diluted share							49,720					47,997
		Adjusted diluted income per share, excluding the impact of severance costs						$	0.49				$	0.70
(4)		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.

NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)
		September 30,				September 30,				December 31,				June 30,
Current assets:		2009				2008				2008				2009
Cash and cash equivalents		$	13,342			$	10,530			$	23,134			$	5,132
Accounts receivable, net			185,129				197,877				170,464				187,201
Prepaid expenses and other current assets			13,710				18,599				13,455				15,617
Deferred income tax assets			19,826				20,950				21,494				19,367
Total current assets			232,007				247,956				228,547				227,317
Property and equipment, net			43,782				45,391				45,151				47,045
Intangible assets, net			30,515				46,203				38,108				33,956
Goodwill			474,134				475,058				463,058				475,777
Other assets			14,040				19,444				17,529				15,592
Total assets		$	794,478			$	834,052			$	792,393			$	799,687
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	6,117			$	9,782			$	8,511			$	9,545
Accrued liabilities			9,097				9,364				10,086				9,404
Accrued compensation-related costs			51,716				69,519				72,701				43,602
Income taxes payable			2,653				-				1,371				557
Notes payable			-				6,239				4,173				4,170
Term loan - current			7,313				2,250				2,250				2,250
Other current liabilities			36,583				36,348				31,467				37,106
Total current liabilities			113,479				133,502				130,559				106,634
Non-current liabilities
Deferred income tax liabilities			31,512				29,427				28,511				30,121
Other non-current liabilities			24,477				30,254				37,336				25,022
Term loan non-current			212,625				219,938				219,375				218,250
Bank debt non-current			2,388				50,791				10,854				19,217
Total non-current liabilities			271,002				330,410				296,076				292,610
Total liabilities			384,481				463,912				426,635				399,244
Stockholders' equity:
Preferred stock			-				-				-				-
Common stock			60				59				59				60
Additional paid-in capital			557,758				553,666				555,737				556,036
Deferred stock issuance, net			-				985				985				-
Treasury stock			(218,798	)			(238,696	)			(231,071	)			(218,798	)
Retained earnings			86,397				57,910				69,239				78,057
Accumulated other comprehensive loss			(15,420	)			(3,784	)			(29,191	)			(14,912	)
Total stockholders' equity			409,997				370,140				365,758				400,443
Total liabilities and stockholders' equity		$	794,478			$	834,052			$	792,393			$	799,687
Selected Data
Days sales outstanding, net (DSO) 1			87				84				73				91
1) Net of deferred revenue.

NAVIGANT CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in 000s
		For the three months ended						For the nine months ended
		September 30,						September 30,
		2009			2008			2009			2008
Cash flows from operating activities:
Net income		$8,340			$7,836			$17,158			$28,728
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense		4,352			4,330			13,312			12,876
Depreciation expense- office consolidation		115			553			1,110			2,041
Amortization expense		3,055			3,955			10,067			12,779
Share-based compensation expense		1,545			3,055			6,010			9,632
Accretion of interest expense		194			361			693			704
Allowance for doubtful accounts receivable		6,143			7,731			14,253			17,201
Deferred income taxes		(650	)		(1,251	)		822			(5,830	)
Other, net		-			(259	)		-			(273	)
Changes in assets and liabilities:
Accounts receivable		(4,192	)		10,267			(25,550	)		(14,058	)
Prepaid expenses and other assets		3,426			3,051			3,352			(15,966	)
Accounts payable		(3,427	)		661			(2,495	)		2,186
Accrued liabilities		(170	)		(2,746	)		(761	)		(500	)
Accrued compensation-related costs		8,197			14,791			(21,326	)		1,820
Income taxes payable		3,130			(9,256	)		4,032			(6,498	)
Other liabilities		419			(3,958	)		2,566			(6,289	)
Net cash provided by operating activities		30,477			39,121			23,243			38,553
Cash flows from investing activities:
Purchases of property and equipment		(1,271	)		(1,091	)		(13,623	)		(5,055	)
Acquisition of business		-			-			(1,875	)		(50,000	)
Payments of acquisition liabilities		-			-			(2,821	)		(3,154	)
Other, net		-			(511	)		(109	)		(863	)
Net cash used in investing activities		(1,271	)		(1,602	)		(18,428	)		(59,072	)
Cash flows from financing activities:
Issuances of common stock		369			1,220			2,686			5,298
Payments of notes payable		(4,127	)		(4,477	)		(4,482	)		(4,976	)
Borrowings from banks, net of repayments		(16,209	)		(32,604	)		(10,096	)		20,995
Payments of term loan installments		(563	)		(562	)		(1,688	)		(1,687	)
Other, net		(74	)		(886	)		(888	)		(237	)
Net cash (used in) provided by financing activities		(20,604	)		(37,309	)		(14,468	)		19,393
Effect of exchange rate changes on cash		(392	)		-			(139	)		-
Net increase (decrease) in cash and cash equivalents		8,210			210			(9,792	)		(1,126	)
Cash and cash equivalents at beginning of the period		5,132			10,320			23,134			11,656
Cash and cash equivalents at end of the period		$13,342			$10,530			$13,342			$10,530

Source: Navigant Consulting, Inc.

Navigant Consulting, Inc.
Jennifer Moreno
Executive Director, Investor Relations
312.573.5634
jmoreno@navigantconsulting.com