Exhibit 99.1
Navigant Consulting, Inc. Announces
Fourth Quarter and Full Year 2005 Results
CHICAGO--(BUSINESS WIRE)--Feb. 16, 2006--Navigant Consulting, Inc.
(NYSE:NCI):
-- Fourth quarter revenues increased 16 percent, year over year,
to $150.5 million, from $129.3 million in the fourth quarter
of 2004. Annual revenues increased 19 percent, to $575.5
million, compared to $482.1 million in 2004.
-- EBITDA for the quarter increased 17 percent to $26.6 million
compared to the fourth quarter 2004, and increased 31 percent
to $108.0 million compared with the full year 2004 EBITDA of
$82.2 million.
-- Net income per diluted share for the fourth quarter 2005 was
$0.22, consistent with the fourth quarter of 2004. EPS for the
2005 year increased 19 percent, to $0.95, from $0.80 for 2004.
Navigant Consulting, Inc. (NYSE:NCI), an independent international
consulting firm providing the industry expertise and solutions clients
need to address dispute, investigative, business, operational and
financial advisory challenges, today announced financial results for
the fourth quarter and full year 2005.
Fourth Quarter 2005 Financial Results
Revenues for the fourth quarter of 2005 were $150.5 million, a 16
percent increase compared to the fourth quarter 2004 revenues of
$129.3 million, and consistent with third quarter 2005 revenues.
EBITDA in the fourth quarter of 2005 was $26.6 million, an
increase of 17 percent from $22.8 million for the fourth quarter of
2004, and down from third quarter 2005 EBITDA of $29.1 million. EBITDA
as a percentage of revenues before reimbursements was 20 percent for
the fourth quarter of 2005.
Net income per diluted share was $0.22 in the fourth quarter of
2005, consistent with the comparable period in 2004, and down from
$0.25 per share in the third quarter of 2005.
The Company's profitability during the fourth quarter was impacted
by the resolution of a claim for $1.25 million arising in the fourth
quarter related to the completion of a multi-year engagement in the
Energy practice, and a $1.4 million write off of an uncollectible
receivable from a municipality discussed hereinafter. These amounts
resulted in a pre-tax charge of $2.65 million against 2005 fourth
quarter earnings, $1.5 million after taxes, or $0.03 per share.
"Exclusive of these charges, the Company completed a solid fourth
quarter and is well-positioned to continue meeting our long term
objective of expanding revenues by 10 to 20 percent annually," stated
William M. Goodyear, Chairman and Chief Executive Officer. "As the
year progressed, our Financial & Insurance Services, Construction and
Government Contractor practices realized accelerated demand and
contributed greatly to the overall success we achieved in 2005."
Full Year 2005 Financial Results
Revenues for the year ended December 31, 2005 were $575.5 million,
a 19 percent increase compared to 2004 revenues of $482.1 million.
EBITDA for the full year 2005 was $108.0 million, up 31 percent from
$82.2 million for the comparable 2004 period, and 21 percent of
revenues before reimbursements. EPS for full year 2005 was $0.95 per
share, compared to $0.80 per share for 2004, a 19 percent year over
year increase.
"Looking back to 2005, we added materially to the depth and
breadth of the firm -- increasing our capabilities, enhancing our
teams with new talent and extending our professional services into new
geographies," said Mr. Goodyear. "Our reach was positively impacted by
the growth of our Corporate Finance practice, the extension of our
Financial & Insurance service capabilities and expertise, our
increased Healthcare strategy capabilities, our strengthened
construction dispute practice, and the expansion of our international
footprint," stated Mr. Goodyear.
Business Metrics
Billable consultant headcount, full time equivalents (FTE), as of
December 31, 2005 was 1,705, down slightly from 1,719 at the end of
the third quarter. Company-wide consultant utilization in the fourth
quarter was 67 percent, up from 66 percent during the 2004 fourth
quarter, and down from 71 percent in the third quarter of 2005,
reflecting the impact of the holidays and a traditional slowdown in
overall business activity in the fourth quarter.
Annualized revenue per consultant in the fourth quarter of 2005
was $358,000, consistent with the third quarter, and up from $351,000
during the fourth quarter of 2004. Annualized attrition was 19 percent
during the fourth quarter of 2005, up from 17 percent in the third
quarter of 2005 and 2004's fourth quarter. Days sales outstanding as
of December 31, 2005 improved significantly to 80 days, compared to 93
days at the end of the 2005 third quarter. The Company ended the year
with $40.8 million in borrowings under its $175 million unsecured,
multi-bank credit facility. This amount is down from $69.7 million at
the end of the third quarter 2005.
"Throughout 2005, we optimized our investments in both acquisition
and organic hiring," stated Julie M. Howard, Executive Vice President
and Chief Operating Officer. "For 2006, we have organized around two
client facing channels -- Dispute, Investigative and Regulatory
Advisory services, and Business, Financial and Operational Advisory
services. Our new structure better enables us to leverage the diverse
and complementary resources of the organization."
NCI Expands International Investigation Services
In January 2006, Tedd Avey joined the firm as a Managing Director
in the international Litigation and Investigations practice. In his
role, Mr. Avey will be assisting in the Company's expanding
investigative services and international growth strategy.
On February 7, professionals from the Inkster Group, Canada's
preeminent corporate investigations firm, joined NCI's litigation
consulting and investigations practice. Led by Norman Inkster, a
former Commissioner of the Royal Canadian Mounted Police, a former
President of Interpol, and one-time head of a major accounting firm's
global forensic practice, the Inkster Group assists organizations in
reducing the risk and impact of fraud. The Canadian-based group will
continue to specialize in corporate investigations, fraud prevention,
business intelligence, and the safeguarding of assets and intellectual
property.
NCI Expands Financial Services Offerings
On February 1, Joseph J. DeVito joined the firm as a Managing
Director, within the Insurance & Reinsurance practice. Mr. DeVito has
significant experience in the areas of run-off (accounting and
actuarial), regulatory and receivership, due diligence and operational
reviews, and litigation support (forensic and expert witness)
services. He currently serves as the President and Chairman of the
Board of Directors for the International Association of Insurance
Receivers.
Navigant Consulting's Insurance & Reinsurance practice assists
insurers, reinsurers and their counsel. Areas of specialty include
risk and regulatory compliance; operational and technology consulting;
finance and accounting consulting; data and information management;
liability estimation; actuarial and claims consulting; dispute
resolution and litigation support.
Company Receives Order from Arbitrator
Yesterday afternoon, February 15, the Company received an adverse
order and "interim finding" from an arbitrator in a proceeding related
to a previously disclosed dispute with the City of Vernon, California.
RMI-US, a subsidiary of the Company, provided electric distribution
system maintenance services to the City until November 30, 2003, at
which time the contract was terminated at the request of RMI-US. Since
that time, the Company no longer provides such system maintenance
services.
The arbitrator's order and "interim finding" denied the Company's
right to recover unpaid fees and expenses previously billed to the
City. As such, $1.4 million was charged to expense in the Company's
fourth quarter 2005 income statement. In addition, the arbitrator
found that, as a result of the suspension of the subsidiary's
contractor's license for 19 days in 2001 and 30 days in 2003 during
the 5-year contract period, the City is entitled to a recovery for
unspecified amounts paid under the contract for a period not defined
in the order. The arbitrator also found that the City is entitled to
treble damages but, as previously stated, the order did not indicate
the amount of damages that would be trebled.
While the order does not state the amount to be reimbursed, the
total amount could have a material adverse impact on the Company's
2005 results of operations and financial position, as preliminarily
reported in this release. The Company strongly disagrees with the
order and the "interim finding" and will promptly seek clarification
and reconsideration of the order and the interim finding.
Webcast of the Company's Announcement of Fourth Quarter and Full
Year 2005 Results
A webcast of management's presentation of the Company's fourth
quarter and full year 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 until 5:00 p.m., ET, July 24, 2006.
About Navigant Consulting
Navigant Consulting, Inc. (NYSE:NCI) is an independent
international consulting firm combining deep industry expertise and
integrated solutions to assist companies and their legal counsel in
addressing the challenges of uncertainty and risk, and leveraging
opportunities for overall business improvement. Professional services
include dispute, investigative, operational and business advisory,
risk management and regulatory advisory, and transaction advisory
solutions. "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.
Except as set forth below, statements included in this press
release, which are not historical in nature, are intended to be, and
are hereby identified as, "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. The Company cautions readers that forward-looking
statements, including without limitation, those relating to the
Company's future business prospects, revenues, working capital,
liquidity, income and margins, are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those indicated in the forward-looking statements, due to several
important factors, including those identified from time to time in the
Company's reports filed with the SEC. Such risk factors include, but
are not limited to: dependence on key personnel, acquisitions
consummated and acquisitions under consideration, recruiting,
attrition and the ability to successfully integrate new consultants
into the Company's practices, significant client assignments,
conflicts of interest, the ability to meet the challenges of rapid
growth and intense competition, professional liability, any
significant decline in the market value of the Company's securities
that would affect its ability to attract, retain and motivate its
consultants, possible legislative and regulatory changes, including
without limitation federal class action, asbestos and medical
malpractice reform legislation, and general economic conditions.
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
For the three months ended
----------------------------
Dec. 31, Sept. 30, Dec. 31,
2005 2005 2004
----------------------------
Revenues before reimbursements $134,057 $131,411 $114,760
Reimbursements 16,394 19,503 14,546
----------------------------
Total revenues $150,451 $150,914 $129,306
Cost of services before reimbursable
expenses 76,139 74,533 67,955
Reimbursable expenses 16,394 19,503 14,546
----------------------------
Cost of services 92,533 94,036 82,501
Stock-based compensation expense 2,349 1,960 2,703
Litigation and settlements 1,250 - -
General and administrative expenses 27,694 25,795 21,272
----------------------------
Earnings before interest, taxes,
depreciation and amortization (EBITDA) 26,625 29,123 22,830
Depreciation 3,117 2,621 2,114
Amortization 2,712 2,509 1,191
----------------------------
Operating income 20,796 23,993 19,525
Other income (expense), net (846) (1,323) (509)
----------------------------
Income before income tax expense 19,950 22,670 19,016
Income tax expense 8,379 9,521 7,867
----------------------------
Net income $11,571 $13,149 $11,149
============================
Net income per diluted share $0.22 $0.25 $0.22
============================
Shares used in computing net income per
diluted share 53,270 52,959 50,918
Percentage of revenues before reimbursements:
- ---------------------------------------------
Cost of services before reimbursable
expenses 57% 57% 59%
Reimbursable expenses 12% 15% 13%
General and administrative expenses 21% 20% 19%
EBITDA 20% 22% 20%
Operating income 16% 18% 17%
Net income 9% 10% 10%
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
For the year ended
--------------------
Dec. 31, Dec. 31,
2005 2004
--------------------
Revenues before reimbursements $508,874 $426,867
Reimbursements 66,618 55,252
--------------------
Total revenues 575,492 482,119
Cost of services before reimbursable expenses 291,676 248,954
Reimbursable expenses 66,618 55,252
--------------------
Cost of services 358,294 304,206
Stock-based compensation expense 9,079 9,589
Restructuring costs - 1,091
Litigation and settlements 1,250 385
General and administrative expenses 98,877 84,673
--------------------
Earnings before interest, taxes, depreciation
and amortization (EBITDA) 107,992 82,175
Depreciation 10,213 8,312
Amortization 8,538 3,562
--------------------
Operating income 89,241 70,301
Other income (expense), net (3,283) (1,864)
--------------------
Income before income tax expense 85,958 68,437
Income tax expense 36,102 28,062
--------------------
Net income $49,856 $40,375
====================
Net income per diluted share $0.95 $0.80
====================
Shares used in computing net income per diluted
shares 52,390 50,247
Percentage of revenues before reimbursements:
- ---------------------------------------------
Cost of services before reimbursable expenses 57% 58%
Reimbursable expenses 13% 13%
General and administrative expenses 19% 20%
EBITDA 21% 19%
Operating income 18% 16%
Net income 10% 9%
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)
Dec. 31, Sept. 30, June 30, Dec. 31,
Assets 2005 2005 2005 2004
- ----------------------------------------------------------------------
Cash and cash equivalents $14,871 $12,389 $11,118 $36,897
Trade accounts receivable, net 145,616 167,686 137,224 111,157
Prepaid and other assets 18,827 16,084 13,417 18,304
----------------------------------------
Total current assets 179,314 196,159 161,759 166,358
Property and equipment, net 42,320 37,947 35,369 27,381
Intangible assets, net 318,755 319,306 278,850 224,845
Other non-current assets, net 1,881 2,274 363 223
----------------------------------------
Total assets $542,270 $555,686 $476,341 $418,807
========================================
Liabilities and Stockholders'
equity
- ------------------------------
Bank borrowings $40,800 $69,700 $43,800 $-
Current liabilities 102,278 106,677 80,576 117,885
Other liabilities 14,744 10,279 8,309 12,248
Stockholders' equity 384,448 369,030 343,656 288,674
----------------------------------------
Total liabilities and
stockholders' equity $542,270 $555,686 $476,341 $418,807
========================================
Selected Data
Days sales outstanding, net
(DSO)(1) 80 days 93 days 81 days 71 days
========================================
(1) Includes deferred revenue.
CONTACT: Navigant Consulting, Inc.
Ben W. Perks, 312-573-5630
Andrew J. Bosman, 312-573-5631