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8-K - FORM 8-K - NAVIGANT CONSULTING INCc60985e8vk.htm
EX-99.1 - EX-99.1 - NAVIGANT CONSULTING INCc60985exv99w1.htm
Exhibit 99.2
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
METRICS SUMMARY
(UNAUDITED)
DISCLAIMER:
The Company strongly encourages investors to read its annual and quarterly filings with the Securities and Exchange Commission (the “SEC Filings”), including the financial statements and description of risk factors therein. Although certain information included in this chart is intended to be identical to information in the SEC Filings, in the event of a conflict between information included in the SEC Filings and in this chart, the SEC Filings should be relied upon. Other information included in this chart represents financial metrics compiled by the Company for internal use in analyzing certain aspects of its business (the “Internal Metrics”). The Internal Metrics represent management’s good faith estimates as of the date of this chart, and the Company makes no guarantee as to either their accuracy or completeness. The Company does not undertake any obligation to update this chart to reflect new information, future events or otherwise.
                                                                                         
TOTAL COMPANY
All numbers in $000s except Per Share, DSO, People data and   2010     2010     2009     2009     2008
percentages   Q3   Q2   Q1     Full Year     Q4   Q3   Q2   Q1     Full Year     Full Year
                         
Revenues Before Reimbursements
  $ 153,222     $ 154,617     $ 153,870       $ 461,709       $ 153,051     $ 159,153     $ 157,332     $ 167,212       $ 636,748       $ 727,062  
Reimbursements
    21,625       17,706       19,680         59,011         20,907       18,210       16,224       15,150         70,491         83,578  
Total Revenues
    174,847       172,323       173,550         520,720         173,958       177,363       173,556       182,362         707,239         810,640  
Y/Y Growth rate
    -1 %     -1 %     -5 %       N/A         -10 %     -10 %     -18 %     -12 %       -13 %       6 %
Q/Q Growth rate
    1 %     -1 %     0 %       N/A         -2 %     2 %     -5 %     -6 %       N/A         N/A  
 
                                                                                       
Geographic Revenues as % of Total
                                                                                       
U.S. Operations
    88 %     86 %     84 %       84 %       82 %     84 %     84 %     86 %       84 %       83 %
Non U.S. Operations
    12 %     14 %     16 %       16 %       18 %     16 %     16 %     14 %       16 %       17 %
 
                                                                                       
Cost of Services Before Reimbursements
    102,368       102,128       102,230         306,726         103,766       100,545       101,967       110,267         416,545         444,035  
% of Revenues Before Reimbursements
    67 %     66 %     66 %       66 %       68 %     63 %     65 %     66 %       65 %       61 %
 
                                                                                       
General & Administrative Expenses
    30,789       29,089       30,460         90,338         28,142       32,500       33,513       34,893         129,048         155,378  
% of Revenues Before Reimbursements
    20 %     19 %     20 %       20 %       18 %     20 %     21 %     21 %       20 %       21 %
 
                                                                                       
EBITDA (1)
    20,965       23,400       21,180         65,545         19,013       25,238       17,627       21,752         83,630         124,976  
% of Revenues Before Reimbursements
    14 %     15 %     14 %       14 %       12 %     16 %     11 %     13 %       13 %       17 %
Adjusted EBITDA (excluding office consolidation and severance expense) (1)
    21,448       24,407       22,016         67,871         25,448       27,653       23,192       25,059         101,352         131,909  
% of Revenues Before Reimbursements
    14 %     16 %     14 %       15 %       17 %     17 %     15 %     15 %       16 %       18 %
 
                                                                                       
Operating Income
    14,269       16,885       14,583         45,737         11,603       17,716       9,528       12,884         51,731         88,754  
% of Revenues Before Reimbursements
    9 %     11 %     9 %       10 %       8 %     11 %     6 %     8 %       8 %       12 %
Net Income
    9,223       7,828       6,447         23,498         4,789       8,340       3,385       5,433         21,947         40,057  
% of Revenues Before Reimbursements
    6 %     5 %     4 %       5 %       3 %     5 %     2 %     3 %       3 %       6 %
Y/Y Growth rate
    11 %     131 %     19 %       N/A         -58 %     6 %     -66 %     -50 %       -45 %       20 %
Q/Q Growth rate
    18 %     21 %     35 %       N/A         -43 %     146 %     -38 %     -52 %       N/A         N/A  
 
                                                                                       
Net Income Per Diluted Share (EPS)
    0.18       0.16       0.13         0.47         0.10       0.17       0.07       0.11         0.44         0.83  
 
                                                                                       
Adjusted Net Income Per Diluted Share (excluding the net income impact of office consolidation, severance expense and non recurring foreign tax elections) (2)
    0.16       0.17       0.14         0.46         0.18       0.20       0.14       0.16         0.68         0.95  
Shares used in computing income per diluted share
    50,518       50,264       50,096         50,292         50,018       49,954       49,756       49,449         49,795         48,285  
 
                                                                                       
Balance Sheet
                                                                                       
Cash and cash equivalents
    5,383       3,000       361         5,383         49,144       13,342       5,132       6,743         49,144         23,134  
Trade accounts receivable, net
    178,881       162,227       174,690         178,881         163,608       185,129       187,201       188,824         163,608         170,464  
Days sales outstanding (DSO)
    86       79       83         N/A         78       87       91       87         N/A         N/A  
Debt
    199,370       202,549       197,275         199,370         219,375       222,326       239,717       260,522         219,375         232,479  
 
                                                                                       
Share-based compensation expense related to consulting personnel
    980       1,040       801         2,821         869       955       1,333       1,926         5,083         9,087  
 
                                                                                       
Employee Data (Period End) (3)
                                                                                       
Billable
    1,652       1,668       1,661         1,652         1,666       1,716       1,778       1,920         1,666         1,931  
Non-billable
    508       522       518         508         511       514       535       573         511         577  
Total
    2,160       2,190       2,179         2,160         2,177       2,230       2,313       2,493         2,177         2,508  
 
(1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. See accompanying schedule for reconciliation to operating income.
 
(2)   Adjusted EPS is a non-GAAP financial measure and excludes the net income impact from other operating costs and benefits, severance expense and non recurring foreign tax elections.
 
(3)   Employee Data represents FTE employees (adjusted for part-time status).

 


 

                                                                                         
SEGMENT INFORMATION (4)
    2010     2010     2009     2009     2008
All numbers in $000s except Per Share, People data and percentages   Q3   Q2   Q1     Full Year     Q4   Q3   Q2   Q1     Full Year     Full Year
                         
Business Segment Revenues
                                                                                       
Dispute and Investigative Services
    71,279       63,867       67,894       $ 203,040         72,160       76,010       76,758       77,496       $ 302,424       $ 356,524  
% of Total Revenues
    41 %     37 %     39 %       39 %       41 %     43 %     44 %     43 %       43 %       43 %
Business Consulting Services
    68,894       71,756       66,250         206,900         67,419       65,450       63,393       73,516         269,778         329,550  
% of Total Revenues
    39 %     42 %     38 %       40 %       39 %     37 %     37 %     40 %       38 %       41 %
International Consulting
    16,443       18,078       20,797         55,318         21,780       21,279       19,250       17,303         79,612         87,673  
% of Total Revenues
    9 %     10 %     12 %       11 %       13 %     12 %     11 %     9 %       11 %       11 %
Economic Consulting
    18,231       18,622       18,609         55,462         12,599       14,624       14,155       14,047         55,425         36,893  
% of Total Revenues
    10 %     11 %     11 %       11 %       7 %     8 %     8 %     8 %       8 %       5 %
                             
Total Company
  $ 174,847     $ 172,323     $ 173,550       $ 520,720       $ 173,958     $ 177,363     $ 173,556     $ 182,362       $ 707,239       $ 810,640  
 
                                                                                       
Business Segment Revenues Before Reimbursements
                                                                                       
Dispute and Investigative Services
    64,997       59,737       63,338         188,072         65,359       69,260       70,124       71,903         276,646         324,458  
% of Revenues Before Reimbursements
    42 %     39 %     41 %       41 %       43 %     43 %     45 %     43 %       44 %       44 %
Business Consulting Services
    58,406       63,430       57,399         179,235         58,717       58,749       57,883       66,906         242,255         290,257  
% of Revenues Before Reimbursements
    38 %     41 %     37 %       39 %       38 %     37 %     37 %     40 %       38 %       40 %
International Consulting
    13,231       14,484       16,145         43,860         17,512       17,266       16,067       15,516         66,361         76,605  
% of Revenues Before Reimbursements
    9 %     9 %     11 %       9 %       11 %     11 %     10 %     9 %       10 %       11 %
Economic Consulting
    16,588       16,966       16,988         50,542         11,463       13,878       13,258       12,887         51,486         35,742  
% of Revenues Before Reimbursements
    11 %     11 %     11 %       11 %       8 %     9 %     8 %     8 %       8 %       5 %
                             
Total Company
  $ 153,222     $ 154,617     $ 153,870       $ 461,709       $ 153,051     $ 159,153     $ 157,332     $ 167,212       $ 636,748       $ 727,062  
 
                                                                                       
Segment Operating Profit (5)
                                                                                       
Dispute and Investigative Services
    26,738       21,585       25,408         73,731         25,966       30,025       28,369       28,234         112,594         143,870  
% of Revenues Before Reimbursements
    41 %     36 %     40 %       39 %       40 %     43 %     40 %     39 %       41 %       44 %
Business Consulting Services
    19,817       23,148       19,017         61,982         18,881       21,763       20,332       23,452         84,428         115,280  
% of Revenues Before Reimbursements
    34 %     36 %     33 %       35 %       32 %     37 %     35 %     35 %       35 %       40 %
International Consulting
    1,680       3,663       3,740         9,083         2,661       4,793       4,406       4,176         16,036         22,606  
% of Revenues Before Reimbursements
    13 %     25 %     23 %       21 %       15 %     28 %     27 %     27 %       24 %       30 %
Economic Consulting
    5,585       6,273       6,296         18,154         3,402       5,239       4,888       4,644         18,173         14,121  
% of Revenues Before Reimbursements
    34 %     37 %     37 %       36 %       30 %     38 %     37 %     36 %       35 %       40 %
                             
Total Company
  $ 53,820     $ 54,669     $ 54,461       $ 162,950       $ 50,910     $ 61,820     $ 57,995     $ 60,506       $ 231,231       $ 295,877  
% of Revenues Before Reimbursements
    35 %     35 %     35 %       35 %       33 %     39 %     37 %     36 %       36 %       41 %
 
                                                                                       
Other Operating Data
                                                                                       
 
                                                                                       
Average Billable Full Time Equivalent Headcount
                                                                                       
Dispute and Investigative Services
    627       642       647         639         701       716       764       810         747         820  
Business Consulting Services
    703       699       706         703         668       699       735       804         727         836  
International Consulting
    189       200       212         200         211       215       233       226         221         208  
Economic Consulting
    136       119       114         123         105       104       100       101         102         62  
Total Company
    1,655       1,660       1,679         1,665         1,685       1,734       1,832       1,941         1,797         1,926  
Average Bill Rate (excluding success fees)
                                                                                       
Dispute and Investigative Services
    296       300       292         297         282       280       276       278         279         284  
Business Consulting Services
    219       217       218         234         223       215       210       219         216         223  
International Consulting
    280       259       263         265         267       259       239       233         248         294  
Economic Consulting
    375       385       367         375         342       347       344       343         344         332  
Total Company
    267       266       264         272         260       255       250       252         254         260  
Average Utilization (based off 1,850 hrs)
                                                                                       
Dispute and Investigative Services
    72 %     69 %     75 %       72 %       75 %     74 %     72 %     73 %       74 %       78 %
Business Consulting Services
    79 %     81 %     80 %       80 %       79 %     79 %     75 %     77 %       77 %       80 %
International Consulting
    54 %     60 %     65 %       59 %       67 %     68 %     61 %     67 %       66 %       69 %
Economic Consulting
    69 %     76 %     90 %       78 %       76 %     81 %     87 %     85 %       82 %       96 %
Total Company
    73 %     73 %     77 %       74 %       76 %     76 %     73 %     75 %       75 %       79 %
 
(4)   During the first quarter of 2010, we made organizational changes in our business which resulted in the formation of additional operating segments and the repositioning of certain service offerings between the segments. Prior year comparative segment data has been restated to be consistent with the current presentation.
 
(5)   Segment Operating Profit is a measure of profit used by management and excludes certain expense amounts not allocated to the specific reporting segments.

 


 

NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(UNAUDITED)
Non-GAAP Financial Information
This metrics summary includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to the Company’s financial statements as prepared under generally accepted accounting principles (GAAP) are included in this metrics summary. During 2009, the Company incurred significant severance expense as staffing levels were adjusted to market demand and Navigant executed its strategic refresh initiative involving the redeployment of certain resources. The Company also continues to be impacted by office consolidation costs and benefits due to its real estate initiatives including the impact of closing certain offices and changes in market conditions associated with expected sublease proceeds. During the quarter ended September 30, 2010, the Company recorded a non recurring benefit from a tax election related to certain of its foreign entities. Adjusted EBITDA and adjusted operating income excludes the impact of severance and office consolidation costs and benefits and adjusted earnings per share excludes the net income impact of severance, office consolidation costs and benefits and the non recurring benefit from a tax election related to certain of its foreign entities in all periods presented. Severance expense and office consolidation costs and benefits are not considered to be non recurring, infrequent or unusual to our business, however, management believes providing investors with this information gives additional insights into Navigant’s operating performance. While management believes that these non-GAAP financial measures are useful in evaluating Navigant’s operations, this information should be considered as supplemental in nature and not as a substitute for or superior to, any measure prepared in accordance with GAAP.
EBITDA and Adjusted EBITDA
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 provides 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 interest, debt service, taxes and capital expenditures. Investors should recognize that EBITDA might not be comparable to similarly-titled measures of other companies. Adjusted EBITDA excludes the impact of severance and office consolidation costs and benefits as discussed above. This measure should be considered as supplemental in nature and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.
                                                                                         
    2010       2010       2009       2009       2008  
    Q3     Q2     Q1       Full Year       Q4     Q3     Q2     Q1       Full Year       Full Year  
                         
Operating Income
  $ 14,269     $ 16,885     $ 14,583       $ 45,737       $ 11,603     $ 17,716     $ 9,528     $ 12,884       $ 51,731       $ 88,754  
Depreciation
    3,528       3,553       3,801         10,882         4,288       4,352       4,320       4,640         17,600         17,302  
Accelerated depreciation — office closures included in other operating costs and benefit
                                175       115       387       608         1,285         2,534  
Amortization
    3,168       2,962       2,796         8,926         2,947       3,055       3,392       3,620         13,014         16,386  
                                   
EBITDA
    20,965       23,400       21,180         65,545         19,013       25,238       17,627       21,752         83,630         124,976  
                               
Add:
                                                                                       
Other operating costs (benefit) office consolidation (excluding depreciation above)
    (900 )                   (900 )       2,130       870       4,225       300         7,525         2,673  
Severance expense
    1,383       1,007       836         3,226         4,305       1,545       1,340       3,007         10,197         4,260  
                                   
Adjusted EBITDA (excluding office consolidation and severance expense)
    21,448       24,407       22,016         67,871         25,448       27,653       23,192       25,059         101,352         131,909  
                           
General and administrative expenses
    30,789       29,089       30,460         90,338         28,142       32,500       33,513       34,893         129,048         155,378  
Long term compensation expense related to consulting personnel (including share based compensation)
    2,966       2,180       2,821         7,967         1,625       3,212       2,630       3,561         11,028         12,850  
Severance expense added above
    (1,383 )     (1,007 )     (836 )       (3,226 )       (4,305 )     (1,545 )     (1,340 )     (3,007 )       (10,197 )       (4,260 )
                             
Total Segment Operating Profit
  $ 53,820     $ 54,669     $ 54,461       $ 162,950       $ 50,910     $ 61,820     $ 57,995     $ 60,506       $ 231,231       $ 295,877  
Adjusted earnings per share (adjusted to exclude the net income impact from office consolidation costs and benefits, severance expense and non recurring foreign tax elections)
The Company discloses adjusted earnings per share to exclude the net income impact from office consolidation costs and benefits, severance expense and non recurring foreign tax elections as discussed above. Management believes the adjusted earnings per share information provides additional insights into Navigant’s ongoing operating performance. This measure should be considered as supplemental in nature and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.
                                                                                         
    2010       2010       2009       2009       2008  
    Q3     Q2     Q1       Full Year       Q4     Q3     Q2     Q1       Full Year       Full Year  
                         
Other operating costs (benefit) — office consolidation
  $ (900 )   $     $       $ (900 )     $ 2,305     $ 985     $ 4,612     $ 908       $ 8,810       $ 5,207  
Income tax (benefit) (6)
    363                     363         (930 )     (397 )     (1,860 )     (366 )       (3,553 )       (2,100 )
                                   
 
                                                                                       
Net income impact of other operating costs (benefit) — office consolidation
  $ (537 )   $     $       $ (537 )     $ 1,375     $ 588     $ 2,752     $ 542       $ 5,257       $ 3,107  
                                   
Shares used in computing income per diluted share
    50,518       50,264       50,096         50,292         50,018       49,954       49,756       49,449         49,795         48,285  
                                   
Diluted income per share impact of other operating costs (benefit) — office consolidation
  $ (0.01 )   $     $       $ (0.01 )     $ 0.03     $ 0.01     $ 0.06     $ 0.01       $ 0.11       $ 0.06  
                                   
 
                                                                                       
Severance expense
  $ 1,383     $ 1,007     $ 836       $ 3,226       $ 4,305     $ 1,545     $ 1,340     $ 3,007       $ 10,197       $ 4,260  
Income tax (benefit)(6)
    (415 )     (371 )     (322 )       (1,108 )       (1,442 )     (480 )     (497 )     (1,170 )       (3,589 )       (1,512 )
                                   
Net income impact of severance expense
  $ 968     $ 636     $ 514       $ 2,118       $ 2,863     $ 1,065     $ 843     $ 1,837       $ 6,608       $ 2,748  
                                   
Shares used in computing income per diluted share
    50,518       50,264       50,096         50,292         50,018       49,954       49,756       49,449         49,795         48,285  
                                   
Diluted income per share impact of severance expense
  $ 0.02     $ 0.01     $ 0.01       $ 0.04       $ 0.06     $ 0.02     $ 0.02     $ 0.04       $ 0.13       $ 0.06  
                                   
 
                                                                                       
Net income
  $ 9,223     $ 7,828     $ 6,447       $ 23,498       $ 4,789     $ 8,340     $ 3,385     $ 5,433       $ 21,947       $ 40,057  
 
                                                                                       
Net income impact of other operating costs (benefit) — office consolidation
    (537 )                   (537 )       1,375       588       2,752       542         5,257         3,107  
Net income impact of severance expense
    968       636       514         2,118         2,863       1,065       843       1,837         6,608         2,748  
Non recurring foreign tax elections
    (1,751 )                   (1,751 )                                                      
                                   
 
                                                                                       
Adjusted net income, excluding the net income impact of office consolidation, severance expense and non recurring foreign tax elections
  $ 7,903     $ 8,464     $ 6,961       $ 23,328       $ 9,027     $ 9,993     $ 6,980     $ 7,812       $ 33,812       $ 45,912  
                                   
Shares used in computing income per diluted share
    50,518       50,264       50,096         50,292         50,018       49,954       49,756       49,449         49,795         48,285  
                                   
 
                                                                                       
Adjusted earnings per share, excluding the net income impact of office consolidation, severance expense and non recurring foreign tax elections
  $ 0.16     $ 0.17     $ 0.14       $ 0.46       $ 0.18     $ 0.20     $ 0.14     $ 0.16       $ 0.68       $ 0.95  
                                   
 
(6)   Effective income tax (benefit) has been determined based on specific tax jurisdiction.