Exhibit 99.1
Navigant Consulting, Inc. Announces
First Quarter 2007 Financial Results
CHICAGO--(BUSINESS WIRE)--April 26, 2007--Navigant Consulting,
Inc. (NYSE:NCI):
-- First quarter 2007 revenues increased 10 percent, year over
year, from $166.3 million to $183.3 million, and increased
from $179.2 million in the fourth quarter of 2006.
-- EBITDA for the first quarter of 2007 was $27.9 million,
compared to $30.7 million in the first quarter of 2006 and
$36.0 million in the fourth quarter of 2006.
-- Net income per diluted share for the first quarter of 2007 was
$0.20, compared to $0.26 in the 2006 first quarter and $0.30
in the fourth quarter of 2006.
-- The Company's Board of Directors has approved a $300 million
share repurchase authority, of which the Company plans to
utilize the majority to launch a "Dutch Auction" tender offer
to repurchase up to $250 million of the Company's shares.
Navigant Consulting, Inc. (NYSE:NCI), a global consulting firm
providing dispute, investigative, operational, risk management and
financial advisory solutions to legal counsel, government agencies and
companies experiencing regulatory or structural challenges, today
announced financial results for the first quarter 2007.
"Despite a slower than anticipated start to the year, the Company
experienced growth across most of our practices during the first
quarter, including solid performance by our financial and insurance
services practices, as well as continued strong momentum in our
international expansion efforts," stated William M. Goodyear, Chairman
and CEO. "First quarter results were negatively impacted by softness
in the provider operations service offering of our healthcare
practice, and a pause in the intensity of several dispute channel
engagements, which impacted resource deployment and utilization.
Action steps have been taken, and will continue to be taken during the
second quarter, to realign the impacted teams with current market
opportunities."
"We remain optimistic about our ability to meet our objectives for
the full year 2007," added Mr. Goodyear. "The Company is actively
engaged in targeted recruiting and acquisition opportunities, which
are aligned with our strategic growth initiatives. We expect these
efforts to have a favorable impact in several of the Company's high
priority areas and to benefit our performance as 2007 progresses."
First Quarter 2007 Financial Results
Revenues for the first quarter of 2007 were $183.3 million, a 10
percent increase compared to first quarter 2006 revenues of $166.3
million, and up from fourth quarter 2006 revenues of $179.2 million.
EBITDA in the first quarter of 2007 was $27.9 million, compared to
$30.7 million in the first quarter of 2006 and $36.0 million in the
fourth quarter of 2006. Net income per diluted share in the first
quarter of 2007 was $0.20, compared to $0.26 per share in the first
quarter of 2006 and $0.30 per share in the fourth quarter of 2006.
Business Metrics
Average billable full time equivalent (FTE) consultant headcount
for the first quarter was 1,933, compared to 1,821 in the fourth
quarter of 2006, and 1,733 in the first quarter of 2006. FTE billable
consultants as of March 31, 2007 were 1,928, up from 1,871 at the end
of the fourth quarter of 2006. Company-wide consultant utilization,
based on a 2,080 hour base, in the first quarter of 2007 was 69
percent, compared to 71 percent in the first quarter of 2006 and 68
percent for the fourth quarter of 2006. Calculated on an industry
standard 1,850 hour base, utilization for the first quarter of 2007
was 78 percent. Trailing 12-month attrition was 23 percent at first
quarter end 2007, an increase from 21 percent at fourth quarter end of
2006.
Annualized revenue per consultant in the first quarter of 2007 was
$381,000, consistent with $384,000 in the first quarter of 2006. Days
sales outstanding as of March 31, 2007 was 81 days, compared to 78
days at the end of the 2006 fourth quarter and consistent with March
31, 2006. The Company ended the quarter with $63.5 million in
borrowings under its $200 million unsecured, multi-bank credit
facility, reflecting typical working capital seasonality and March
funding of 2006 bonuses.
"The market for experienced professional consultants remains very
competitive," stated Julie M. Howard, President and Chief Operating
Officer. "We continue to be an active participant in markets where we
feel the investments are aligned with our strategic priorities. The
increase in our billable consultant base during the first quarter was
supported by several strategic hires and ongoing investments in
expanding our global footprint. These new professionals have added
strong credentials and expanded our solution expertise, including
finance and project management, and global investigations. While we
continue to pursue complementary additions to our team, we remain
focused on lowering our overall attrition rates and increasing
utilization."
Share Repurchase
The Company's Board of Directors has approved a $300 million share
repurchase authority. The Company intends to utilize the majority of
this authorization to conduct a "Dutch Auction" tender offer to
purchase up to $250 million of its common shares. The balance of the
authority will be available for the purchase of additional shares,
from time to time, including through open-market or private
transactions. The Company plans to commence the tender offer and
announce the price range in early May.
"Given our conservative balance sheet, attractive cash flow, and
the liquidity in and flexibility of the capital markets, we feel this
is an opportune time to increase our participation in the debt
markets, lower our cost of capital, and return equity capital to our
shareholders," stated Mr. Goodyear. "After thorough analysis and
discussion with our Board and outside advisers, we have targeted
investment levels that are prudent, preserve our flexibility, and
support our longer term growth priorities. This initiative, in
combination with the financing discussed below, reflects our
confidence in the Company's long term opportunities and gives us an
avenue to increase the relative stock ownership position of our
employee base."
Financing
To support the repurchase authority, as well as the Company's
ongoing growth initiatives, management is in the process of increasing
the Company's unsecured multi-bank credit facility from $200 million
to $450 million, and extending the maturity to five years. Bank of
America has been designated the lead arranger, and LaSalle Bank, N.A.,
a subsidiary of ABN AMRO Bank N.V., will be the joint lead arranger.
Borrowings under this new facility would result in leverage levels
well within existing market standards.
Outlook
The Company is providing an update to its previous full year 2007
guidance.
The Company anticipates 2007 revenues to be in the $770 million to
$790 million range, unchanged from previous guidance. EBITDA is
projected to be in the range of $135 million to $140 million.
Exclusive of the impact of the previously described stock repurchase
initiative and associated financing costs, the Company anticipates
that 2007 net income per diluted share would be in the $1.02 to $1.07
range.
Webcast of the Company's Announcement of First Quarter 2007
Results
A webcast of management's presentation of the Company's first
quarter 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 25, 2007.
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. Management believes EBITDA, in addition to
operating income, net income and other GAAP measures, 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 our 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: risks
inherent in international operations; 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 also undertakes no obligation
to update any of its forward-looking statements after the date of this
press release.
Tender offer statement
This press release is for informational purposes only and is not
an offer to buy, or the solicitation of an offer to sell, any shares.
The full details of any tender offer, including complete instructions
on how to tender shares, will be included in the offer to purchase,
the letter of transmittal and related materials, which would be mailed
to shareholders promptly following commencement of the offer.
Shareholders should read carefully the offer to purchase, the letter
of transmittal and other related materials when they are available
because they will contain important information. Shareholders may
obtain free copies, when available, of the offer to purchase and other
related materials that will be filed by the Company with the
Securities and Exchange Commission at the Commission's website at
www.sec.gov. When available, shareholders also may obtain a copy of
these documents, free of charge, from the Company's information agent
to be appointed in connection with the offer.
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
For the quarter ended
------------------------------------
March 31, December 31, March 31,
2007 2006 2006
------------------------------------
Revenues before reimbursements $164,838 $157,915 $149,119
Reimbursements 18,452 21,305 17,131
------------------------------------
Total revenues $183,290 $179,220 $166,250
Cost of services before
reimbursable expenses 101,234 91,648 87,528
Reimbursable expenses 18,452 21,305 17,131
------------------------------------
Cost of services 119,686 112,953 104,659
General and administrative
expenses 34,403 32,196 30,920
Depreciation 3,721 3,520 2,950
Amortization 3,636 2,663 2,279
Other operating costs:
Realignment costs 1,277 - -
Litigation charge (benefit) (1,934) -
------------------------------------
Operating income 20,567 29,822 25,442
Other expense, principally
interest 851 874 658
------------------------------------
Income before income tax expense 19,716 28,948 24,784
Income tax expense 8,379 12,303 10,978
------------------------------------
Net income $11,337 $16,645 $13,806
====================================
Net income per diluted share $0.20 $0.30 $0.26
====================================
Shares used in computing net
income per diluted share 55,907 55,529 53,527
Percentage of revenues before
reimbursements:
- ----------------------------------
Cost of services before
reimbursable expenses 61% 58% 59%
Reimbursable expenses 11% 13% 11%
General and administrative
expenses 21% 20% 21%
EBITDA (1) 17% 23% 21%
EBITDA (1), exclusive of Other
operating costs 18% 22% 21%
Operating income 12% 19% 17%
Net income 7% 11% 9%
EBITDA (1) reconciliation:
EBITDA (1), exclusive of Other
operating costs $29,201 $34,071 $30,671
Other operating costs
(benefit) 1,277 (1,934) -
------------------------------------
EBITDA (1) $27,924 $36,005 $30,671
Depreciation 3,721 3,520 2,950
Amortization 3,636 2,663 2,279
------------------------------------
Operating income $20,567 $29,822 $25,442
====================================
1) 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 quarter ended
------------------------
March 31, March 31,
2007 2006
------------------------
Revenues before reimbursements $164,838 $149,119
Reimbursements 18,452 17,131
------------------------
Total revenues $183,290 $166,250
Cost of services before reimbursable expenses 101,234 87,528
Reimbursable expenses 18,452 17,131
------------------------
Cost of services 119,686 104,659
General and administrative expenses 34,403 30,920
Depreciation 3,721 2,950
Amortization 3,636 2,279
Other operating costs:
Realignment costs 1,277 -
Litigation charge (benefit) - -
------------------------
Operating income 20,567 25,442
Other expense, principally interest 851 658
------------------------
Income before income tax expense 19,716 24,784
Income tax expense 8,379 10,978
------------------------
Net income 11,337 13,806
========================
Net income per diluted share $0.20 $0.26
========================
Shares used in computing net income per
diluted share 55,907 53,527
Percentage of revenues before reimbursements:
- ----------------------------------------------
Cost of services before reimbursable expenses 61% 59%
Reimbursable expenses 11% 11%
General and administrative expenses 21% 21%
EBITDA (1) 17% 21%
EBITDA (1), exclusive of Other operating costs 18% 21%
Operating income 12% 17%
Net income 7% 9%
EBITDA (1) reconciliation:
EBITDA (1), exclusive of Other operating
costs $29,201 $30,671
Other operating costs 1,277 -
------------------------
EBITDA (1) $27,924 $30,671
Depreciation 3,721 2,950
Amortization 3,636 2,279
------------------------
Operating income $20,567 $25,442
========================
1) 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
CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)
March 31, December 31, March 31,
Assets 2007 2006 2006
- --------------------------------- ------------------------------------
Cash and cash equivalents $21,173 $11,745 $18,263
Trade accounts receivable, net 179,876 168,062 167,111
Prepaid and other assets 26,161 20,438 18,918
------------------------------------
Total current assets 227,210 200,245 204,292
Property and equipment, net 50,537 51,164 44,864
Goodwill and intangible assets,
net 415,043 398,121 376,249
Other non-current assets, net 6,495 2,828 2,467
------------------------------------
Total assets $699,285 $652,358 $627,872
====================================
Liabilities and Stockholders'
Equity
- ---------------------------------
Bank borrowings $63,506 $33,567 $94,107
Current liabilities 85,977 96,175 78,689
Other liabilities 35,631 36,040 28,375
Stockholders' equity 514,171 486,576 426,701
------------------------------------
Total liabilities and
stockholders' equity $699,285 $652,358 $627,872
====================================
Selected Data
Days sales outstanding, net (DSO)
(1) 81 days 78 days 81 days
====================================
1) Includes deferred revenue.
CONTACT: Navigant Consulting, Inc.
Ben W. Perks
Executive Vice President and Chief Financial Officer
312.573.5630
or
Andrew J. Bosman
Executive Director of Marketing and Communications
312.573.5631