Attached files

file filename
8-K - FORM 8-K - NAVIGANT CONSULTING INCc59409e8vk.htm
EX-99.1 - EX-99.1 - NAVIGANT CONSULTING INCc59409exv99w1.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
                                                                                 
    2010     2010     2009     2009     2008
All numbers in $000s except Per Share, DSO, People data and                                            
percentages   Q2   Q1     Full Year     Q4   Q3   Q2   Q1     Full Year     Full Year
                         
Revenues Before Reimbursements
  $ 154,617     $ 153,870       $ 308,487       $ 153,051     $ 159,153     $ 157,332     $ 167,212       $ 636,748       $ 727,062  
Reimbursements
    17,706       19,680         37,386         20,907       18,210       16,224       15,150         70,491         83,578  
Total Revenues
    172,323       173,550         345,873         173,958       177,363       173,556       182,362         707,239         810,640  
Y/Y Growth rate
    -1 %     -5 %       N/A         -10 %     -10 %     -18 %     -12 %       -13 %       6 %
Q/Q Growth rate
    -1 %     0 %       N/A         -2 %     2 %     -5 %     -6 %       N/A         N/A  
 
                                                                               
Geographic Revenues as % of Total
                                                                               
U.S. Operations
    86 %     84 %       84 %       82 %     84 %     84 %     86 %       84 %       83 %
Non U.S. Operations
    14 %     16 %       16 %       18 %     16 %     16 %     14 %       16 %       17 %
 
                                                                               
Cost of Services Before Reimbursements
    102,128       102,230         204,358         103,766       100,545       101,967       110,267         416,545         444,035  
% of Revenues Before Reimbursements
    66 %     66 %       66 %       68 %     63 %     65 %     66 %       65 %       61 %
 
                                                                               
General & Administrative Expenses
    29,089       30,460         59,549         28,142       32,500       33,513       34,893         129,048         155,378  
% of Revenues Before Reimbursements
    19 %     20 %       19 %       18 %     20 %     21 %     21 %       20 %       21 %
 
                                                                               
EBITDA (1)
    23,400       21,180         44,580         19,013       25,238       17,627       21,752         83,630         124,976  
% of Revenues Before Reimbursements
    15 %     14 %       14 %       12 %     16 %     11 %     13 %       13 %       17 %
Adjusted EBITDA (excluding office consolidation and severance expense) (1)
    24,407       22,016         46,423         25,448       27,653       23,192       25,059         101,352         131,909  
% of Revenues Before Reimbursements
    16 %     14 %       15 %       17 %     17 %     15 %     15 %       16 %       18 %
 
                                                                               
Operating Income
    16,885       14,583         31,468         11,603       17,716       9,528       12,884         51,731         88,754  
% of Revenues Before Reimbursements
    11 %     9 %       10 %       8 %     11 %     6 %     8 %       8 %       12 %
Net Income
    7,828       6,447         14,275         4,789       8,340       3,385       5,433         21,947         40,057  
% of Revenues Before Reimbursements
    5 %     4 %       5 %       3 %     5 %     2 %     3 %       3 %       6 %
Y/Y Growth rate
    131 %     19 %       N/A         -58 %     6 %     -66 %     -50 %       -45 %       20 %
Q/Q Growth rate
    21 %     35 %       N/A         -43 %     146 %     -38 %     -52 %       N/A         N/A  
 
                                                                               
Net Income Per Diluted Share (EPS)
    0.16       0.13         0.28         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 and severance expense) (2)
    0.17       0.14         0.32         0.18       0.20       0.14       0.16         0.68         0.95  
Shares used in computing income per diluted share
    50,264       50,096         50,180         50,018       49,954       49,756       49,449         49,795         48,285  
 
                                                                               
Balance Sheet
                                                                               
Cash and cash equivalents
    3,000       361         3,000         49,144       13,342       5,132       6,743         49,144         23,134  
Trade accounts receivable, net
    162,227       174,690         162,227         163,608       185,129       187,201       188,824         163,608         170,464  
Days sales outstanding (DSO)
    79       83         N/A         78       87       91       87         N/A         N/A  
Debt
    202,549       197,275         202,549         219,375       222,326       239,717       260,522         219,375         232,479  
 
                                                                               
Share-based compensation expense related to consulting personnel
    1,040       801         1,841         869       955       1,333       1,926         5,083         9,087  
 
                                                                               
Employee Data (Period End) (3)
                                                                               
Billable
    1,668       1,661         1,668         1,666       1,716       1,778       1,920         1,666         1,931  
Non-billable
    522       518         522         511       514       535       573         511         577  
Total
    2,190       2,179         2,190         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 office consolidation and severance expense as provided in the accompanying schedule.
 
(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   Q2   Q1     Full Year     Q4   Q3   Q2   Q1     Full Year     Full Year
                         
Business Segment Revenues
                                                                               
Dispute and Investigative Services
    63,867       67,894       $ 131,761         72,160       76,010       76,758       77,496       $ 302,424       $ 356,524  
% of Total Revenues
    37 %     39 %       38 %       41 %     43 %     44 %     43 %       43 %       43 %
Business Consulting Services
    71,756       66,250         138,006         67,419       65,450       63,393       73,516         269,778         329,550  
% of Total Revenues
    42 %     38 %       40 %       39 %     37 %     37 %     40 %       38 %       41 %
International Consulting
    18,078       20,797         38,875         21,780       21,279       19,250       17,303         79,612         87,673  
% of Total Revenues
    10 %     12 %       11 %       13 %     12 %     11 %     9 %       11 %       11 %
Economic Consulting
    18,622       18,609         37,231         12,599       14,624       14,155       14,047         55,425         36,893  
% of Total Revenues
    11 %     11 %       11 %       7 %     8 %     8 %     8 %       8 %       5 %
                             
Total Company
  $ 172,323     $ 173,550       $ 345,873       $ 173,958     $ 177,363     $ 173,556     $ 182,362       $ 707,239       $ 810,640  
 
                                                                               
Business Segment Revenue Before Reimbursements
                                                                               
Dispute and Investigative Services
    59,737       63,338         123,075         65,359       69,260       70,124       71,903         276,646         324,458  
% of Revenues Before Reimbursements
    39 %     41 %       40 %       43 %     43 %     45 %     43 %       44 %       44 %
Business Consulting Services
    63,430       57,399         120,829         58,717       58,749       57,883       66,906         242,255         290,257  
% of Revenues Before Reimbursements
    41 %     37 %       39 %       38 %     37 %     37 %     40 %       38 %       40 %
International Consulting
    14,484       16,145         30,629         17,512       17,266       16,067       15,516         66,361         76,605  
% of Revenues Before Reimbursements
    9 %     11 %       10 %       11 %     11 %     10 %     9 %       10 %       11 %
Economic Consulting
    16,966       16,988         33,954         11,463       13,878       13,258       12,887         51,486         35,742  
% of Revenues Before Reimbursements
    11 %     11 %       11 %       8 %     9 %     8 %     8 %       8 %       5 %
                             
Total Company
  $ 154,617     $ 153,870       $ 308,487       $ 153,051     $ 159,153     $ 157,332     $ 167,212       $ 636,748       $ 727,062  
 
                                                                               
Segment Operating Profit (5)
                                                                               
Dispute and Investigative Services
    21,585       25,408         46,993         25,966       30,025       28,369       28,234         112,594         143,870  
% of Revenues Before Reimbursements
    36 %     40 %       38 %       40 %     43 %     40 %     39 %       41 %       44 %
Business Consulting Services
    23,148       19,017         42,165         18,881       21,763       20,332       23,452         84,428         115,280  
% of Revenues Before Reimbursements
    36 %     33 %       35 %       32 %     37 %     35 %     35 %       35 %       40 %
International Consulting
    3,663       3,740         7,403         2,661       4,793       4,406       4,176         16,036         22,606  
% of Revenues Before Reimbursements
    25 %     23 %       24 %       15 %     28 %     27 %     27 %       24 %       30 %
Economic Consulting
    6,273       6,296         12,569         3,402       5,239       4,888       4,644         18,173         14,121  
% of Revenues Before Reimbursements
    37 %     37 %       37 %       30 %     38 %     37 %     36 %       35 %       40 %
                             
Total Company
  $ 54,669     $ 54,461       $ 109,130       $ 50,910     $ 61,820     $ 57,995     $ 60,506       $ 231,231       $ 295,877  
% of Revenues Before Reimbursements
    35 %     35 %       35 %       33 %     39 %     37 %     36 %       36 %       41 %
 
                                                                               
Other Operating Data
                                                                               
 
                                                                               
Average Billable Full Time Equivalent Headcount
                                                                               
Dispute and Investigative Services
    642       647         644         701       716       764       810         747         820  
Business Consulting Services
    699       706         702         668       699       735       804         727         836  
International Consulting
    200       212         206         211       215       233       226         221         208  
Economic Consulting
    119       114         117         105       104       100       101         102         62  
Total Company
    1,660       1,679         1,669         1,685       1,734       1,832       1,941         1,797         1,926  
Average Bill Rate (excluding success fees)
                                                                               
Dispute and Investigative Services
    300       292         295         282       280       276       278         279         284  
Business Consulting Services
    217       218         217         223       215       210       219         216         223  
International Consulting
    259       263         261         267       259       239       233         248         294  
Economic Consulting
    385       367         376         342       347       344       343         344         332  
Total Company
    266       264         264         260       255       250       252         254         260  
Average Utilization (based off 1,850 hrs)
                                                                               
Dispute and Investigative Services
    69 %     75 %       72 %       75 %     74 %     72 %     73 %       74 %       78 %
Business Consulting Services
    81 %     80 %       81 %       79 %     79 %     75 %     77 %       77 %       80 %
International Consulting
    60 %     65 %       62 %       67 %     68 %     61 %     67 %       66 %       69 %
Economic Consulting
    76 %     90 %       82 %       76 %     81 %     87 %     85 %       82 %       96 %
Total Company
    73 %     77 %       75 %       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 expense due to its real estate initiatives including the impact of closing certain offices and changes in market conditions associated with expected sublease proceeds. Adjusted EBITDA exclude the impact of severance and office consolidation expense and adjusted earnings per share excludes the net income impact of severance and office consolidation expense in all periods presented. Severance and office consolidation expense 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 expense 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
    Q2   Q1     Full Year     Q4   Q3   Q2   Q1     Full Year     Full Year
                         
Operating Income
  $ 16,885     $ 14,583       $ 31,468       $ 11,603     $ 17,716     $ 9,528     $ 12,884       $ 51,731       $ 88,754  
Depreciation
    3,553       3,801         7,354         4,288       4,352       4,320       4,640         17,600         17,302  
Accelerated depreciation - office closures
     included in other operating costs
                          175       115       387       608         1,285         2,534  
Amortization
    2,962       2,796         5,758         2,947       3,055       3,392       3,620         13,014         16,386  
                             
EBITDA
    23,400       21,180         44,580         19,013       25,238       17,627       21,752         83,630         124,976  
                         
Add:
                                                                               
Office consolidation (excluding depreciation above)
                          2,130       870       4,225       300         7,525         2,673  
Severance expense
    1,007       836         1,843         4,305       1,545       1,340       3,007         10,197         4,260  
                             
Adjusted EBITDA (excluding office consolidation and severance expense)
    24,407       22,016         46,423         25,448       27,653       23,192       25,059         101,352         131,909  
                         
General and administrative expenses
    29,089       30,460         59,549         28,142       32,500       33,513       34,893         129,048         155,378  
Long term compensation expense related to consulting personnel (including share based compensation)
    2,180       2,821         5,001         1,625       3,212       2,630       3,561         11,028         12,850  
Severance expense added above
    (1,007 )     (836 )       (1,843 )       (4,305 )     (1,545 )     (1,340 )     (3,007 )       (10,197 )       (4,260 )
                             
Total Segment Operating Profit
  $ 54,669     $ 54,461       $ 109,130       $ 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 and severance expense)
The Company discloses adjusted earnings per share to exclude the net income impact from severance and office consolidation expense 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
    Q2   Q1     Full Year     Q4   Q3   Q2   Q1     Full Year     Full Year
                         
Office consolidation expense
  $     $       $       $ 2,305     $ 985     $ 4,612     $ 908       $ 8,810       $ 5,207  
Tax benefit (6)
                          (930 )     (397 )     (1,860 )     (366 )       (3,553 )       (2,100 )
                             
Net income impact of office consolidation expense
  $     $       $       $ 1,375     $ 588     $ 2,752     $ 542       $ 5,257       $ 3,107  
                             
Shares used in computing income per diluted share
    50,264       50,096         50,180         50,018       49,954       49,756       49,449         49,795         48,285  
                             
Diluted income per share impact of office consolidation expense
  $     $       $       $ 0.03     $ 0.01     $ 0.06     $ 0.01       $ 0.11       $ 0.06  
                             
 
                                                                               
Severance expense
  $ 1,007     $ 836       $ 1,843       $ 4,305     $ 1,545     $ 1,340     $ 3,007       $ 10,197       $ 4,260  
Tax benefit(6)
    (371 )     (322 )       (693 )       (1,442 )     (480 )     (497 )     (1,170 )       (3,589 )       (1,512 )
                             
Net income impact of severance expense
  $ 636     $ 514       $ 1,150       $ 2,863     $ 1,065     $ 843     $ 1,837       $ 6,608       $ 2,748  
                             
Shares used in computing income per diluted share
    50,264       50,096         50,180         50,018       49,954       49,756       49,449         49,795         48,285  
                             
Diluted income per share impact of severance expense
  $ 0.01     $ 0.01       $ 0.02       $ 0.06     $ 0.02     $ 0.02     $ 0.04       $ 0.13       $ 0.06  
                             
 
                                                                               
Net income
  $ 7,828     $ 6,447       $ 14,275       $ 4,789     $ 8,340     $ 3,385     $ 5,433       $ 21,947       $ 40,057  
Net income impact of office consolidation expense
                          1,375       588       2,752       542         5,257         3,107  
Net income impact of severance expense
    636       514         1,150         2,863       1,065       843       1,837         6,608         2,748  
                             
Adjusted net income, excluding the net income impact of office consolidation and severance expense
  $ 8,464     $ 6,961       $ 15,425       $ 9,027     $ 9,993     $ 6,980     $ 7,812       $ 33,812       $ 45,912  
                             
Shares used in computing income per diluted share
    50,264       50,096         50,180         50,018       49,954       49,756       49,449         49,795         48,285  
                             
Adjusted earnings per share, excluding the net income impact of office consolidation and severance expense
  $ 0.17     $ 0.14       $ 0.31       $ 0.18     $ 0.20     $ 0.14     $ 0.16       $ 0.68       $ 0.95  
                             
 
(6)   Effective tax benefit has been determined based on specific tax jurisdiction.