x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 30, 2003

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From ______________________ to ________________________

Commission File Number 000-24387

NAVIGANT INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

52-2080967

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

84 INVERNESS CIRCLE EAST
ENGLEWOOD, COLORADO

80112

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number:  (303) 706-0800

PART I.

FINANCIAL INFORMATION:

Item 1.

Consolidated Financial Statements

Consolidated Balance Sheets –March 30, 2003 (Unaudited) and December 29, 2002

3

Consolidated Statements of Income (Unaudited) –Three Months Ended March 30, 2003 and March 31, 2002

4

Consolidated Statements of Cash Flows (Unaudited) –Three Months Ended March 30, 2003 and March 31, 2002

5

Notes to Consolidated Financial Statements

6 - 9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9 - 14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

14

Item 4.

Controls and Procedures

14

PART II.

OTHER INFORMATION:

Item 1.

Legal Proceedings

15

Item 6.

Exhibits and Reports on Form 8-K

15

SIGNATURES

CERTIFICATIONS

March 30,
2003

December 29,
2002

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

263

$

1,693

Accounts receivable, less allowance for doubtful accounts of $1,016 and $1,148, respectively

71,494

65,339

Prepaid expenses and other current assets

6,066

5,512

Deferred income taxes

2,030

2,105

Income tax receivable

3,790

4,395

Total current assets

83,643

79,044

Property and equipment, net

20,792

21,873

Goodwill, net

313,430

310,111

Deferred income taxes

6,557

8,984

Other assets

5,980

5,725

Total assets

$

430,402

$

425,737

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Short-term portion of long-term debt

$

1,620

$

1,652

Short-term portion of capital lease obligations

1,214

1,536

Accounts payable

12,475

11,512

Accrued compensation

10,990

8,708

Deferred income

7,291

7,291

Other accrued liabilities

18,333

18,711

Total current liabilities

51,923

49,410

Long-term debt

164,125

167,175

Capital lease obligations

278

363

Deferred income

22,474

24,445

Other long-term liabilities

3,150

3,605

Total liabilities

241,950

244,998

Commitments and contingencies (Note 3)

Stockholders’ equity:

Common stock; $.001 par value, 150,000,000 shares authorized;15,286,000 and 15,113,000 issued, respectively

15

15

Additional paid-in capital

149,134

147,633

Treasury stock at cost; 1,231,000 shares

(10,928

)

(10,928

)

Retained earnings

52,112

47,865

Accumulated other comprehensive loss:

Foreign currency translation adjustment

(357

)

(2,104

)

Effect of interest rate swaps

(1,524

)

(1,742

)

Total accumulated other comprehensive loss

(1,881

)

(3,846

)

Total stockholders’ equity

188,452

180,739

Total liabilities and stockholders’ equity

$

430,402

$

425,737

For the Three Months Ended

March 30,
2003

March 31,
2002

(Unaudited)

(Unaudited)

Revenues

$

88,905

$

93,550

Operating expenses

47,884

52,603

General and administrative expenses

28,285

27,520

Depreciation and amortization expense

2,676

2,288

Operating income

10,060

11,139

Other (income) expenses:

Interest expense

3,291

4,202

Interest income

(2

)

(17

)

Other, net

(23

)

14

Income before provision for income taxes

6,794

6,940

Provision for income taxes

2,547

2,603

Net income

4,247

4,337

Other comprehensive income, net of tax:

Foreign currency translation adjustment

1,747

223

Unrealized gain on derivatives designated as hedges

218

129

Comprehensive income

$

6,212

$

4,689

Weighted average number of common shares outstanding:

Basic

14,032

13,550

Diluted

14,265

14,058

Net income per share:

Basic

$

0.30

$

0.32

Diluted

$

0.30

$

0.31

For the Three Months Ended

March 30,
2003

March 31,
2002

(Unaudited)

(Unaudited)

Cash flows from operating activities:

Net income

$

4,247

$

4,337

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

2,676

2,288

Deferred tax provision

2,018

941

Changes in current assets and liabilities (net of assets acquired and liabilities assumed in combinations accounted for under the purchase method):

Accounts receivable, net

(6,155

)

(13,812

)

Prepaid expenses and other assets

(809

)

(1,110

)

Accounts payable

963

2,656

Other accrued liabilities

1,489

8,126

Deferred income

(1,971

)

(721

)

Other long-term liabilities

(106

)

(445

)

Net cash provided by operating activities

2,352

2,260

Cash flows from investing activities:

Additions to property and equipment, net of disposals

(1,546

)

(512

)

Cash paid in acquisitions and earn-out consideration, net of cash received

(914

)

Net cash used in investing activities

(2,460

)

(512

)

Cash flows from financing activities:

Payments of long-term debt

(439

)

(3,997

)

(Payments of) proceeds from credit facility, net

(3,050

)

216

Proceeds from exercise of stock options

1,501

248

Net cash used in financing activities

(1,988

)

(3,533

)

Effect of exchange rate changes on cash and cash equivalents

666

60

Net decrease in cash and cash equivalents

(1,430

)

(1,725

)

Cash and cash equivalents at beginning of period

1,693

4,236

Cash and cash equivalents at end of period

$

263

$

2,511