Navigant Reports Third Quarter 2013 Results

  Navigant Reports Third Quarter 2013 Results

  *Revenues before reimbursements increased 6% to $186.4 million for third
    quarter 2013 compared to the prior year quarter. Total revenues increased
    5% to $211.6 million for third quarter 2013 compared to the prior year
    quarter.
  *Net income from continuing operations for third quarter 2013 increased 21%
    to $13.5 million or $0.27 per share compared to the prior year quarter.
    Adjusted EPS for third quarter 2013 increased 9% year over year to $0.25.
  *Adjusted EBITDA for third quarter 2013 increased 19% to $30.8 million
    compared to $26.0 million for the same period in 2012. Adjusted EBITDA
    margin improved 200 basis points to 17% for third quarter 2013 compared to
    the same period in 2012.
  *Reduced bank debt by 29% from the year earlier level to $110 million at
    September 30, 2013.
  *Repurchased 627,011 shares of common stock in third quarter 2013 at an
    average price of $13.84 per share.
  *Updates 2013 outlook to reflect solid third quarter performance and to
    reflect financial results reported on a continuing operations basis.

Business Wire

CHICAGO -- October 29, 2013

Navigant (NYSE:NCI) today announced financial results for the third quarter
ended September 30, 2013. Unless otherwise indicated, all references are to
results from continuing operations which exclude the results from the
previously announced July 2013 sale of the United Kingdom portion of
Navigant’s financial services advisory business which are presented as
discontinued operations. Amounts previously reported have been reclassified to
conform to the current presentation.

Navigant reported third quarter 2013 revenues before reimbursements (RBR) of
$186.4 million, compared to $176.4 million for third quarter 2012, a 6%
increase. The growth in third quarter RBR was driven by a 31% increase in the
Healthcare segment and 17% growth in the Financial, Risk & Compliance segment
that was partially offset by lower RBR in the Disputes, Investigations &
Economics segment. RBR performance in the Energy segment was relatively
unchanged from the prior year quarter. Total revenues for the Company were
$211.6 million for third quarter 2013, compared to $202.1 million for third
quarter 2012, an increase of 5%.

Adjusted EBITDA of $30.8 million for third quarter 2013 rose 19% compared to
$26.0 million for third quarter 2012, with an Adjusted EBITDA margin (Adjusted
EBITDA as a percentage of RBR) of 17% for third quarter 2013, compared to 15%
for the same period in 2012. A 9% increase in segment operating profit and a
100 basis point improvement in general and administrative expenses as a
percentage of RBR contributed to the year-over-year growth in margin for the
quarter.

Net income from continuing operations for third quarter 2013 was $13.5
million, compared to $11.2 million in the prior year quarter, an increase of
21%. The effective income tax rate was 47% for third quarter 2013 compared to
41% for third quarter 2012, due to a change in the mix of pre-tax income from
lower tax rate jurisdictions to higher rate U.S. jurisdictions as well as
increased valuation allowances related to losses generated in foreign
jurisdictions for which Navigant does not anticipate realizing a benefit in
future periods.

Earnings per share (EPS) from continuing operations were $0.27 for third
quarter 2013, compared to $0.22 for third quarter 2012, a 23% increase.
Adjusted EPS was $0.25 for third quarter 2013, compared to $0.23 for third
quarter 2012, a 9% increase.

“Results for the third quarter reflect continued gains in revenue growth and
profitability,” commented Julie Howard, Chief Executive Officer. “Our focus on
high-growth areas with clearly identifiable catalysts is contributing to a
more optimized business portfolio and improved financial performance. In the
coming quarters, we expect to further develop existing practices while
exploring new areas of growth as we help our clients solve complex issues in
highly regulated industries undergoing fundamental change.”

Segment Financial Highlights

                                                               
                                                             
                                       For the quarter ended
                                       September 30,
                                     2013         2012         Change
RBR ($000)
Disputes, Investigations & Economics   $ 75,366      $ 82,325      -8.5  %
Financial, Risk & Compliance             40,227        34,431      16.8  %
Healthcare                               48,088        36,701      31.0  %
Energy                                 22,763     22,908    -0.6  %
Total Company                         $ 186,444   $ 176,365   5.7   %
Total Revenues ($000)
Disputes, Investigations & Economics   $ 81,144      $ 88,984      -8.8  %
Financial, Risk & Compliance             48,668        44,362      9.7   %
Healthcare                               53,721        40,957      31.2  %
Energy                                 28,074     27,827    0.9   %
Total Company                         $ 211,607   $ 202,130   4.7   %
Segment Operating Profit ($000)
Disputes, Investigations & Economics   $ 25,738      $ 29,000      -11.2 %
Financial, Risk & Compliance             16,959        12,716      33.4  %
Healthcare                               17,967        12,315      45.9  %
Energy                                 6,968      7,837     -11.1 %
Total Company                         $ 67,632    $ 61,868    9.3   %
Segment Operating Margin (% of RBR)
Disputes, Investigations & Economics     34.2    %     35.2    %   -1.0  %
Financial, Risk & Compliance             42.2    %     36.9    %   5.3   %
Healthcare                               37.4    %     33.6    %   3.8   %
Energy                                 30.6    %   34.2    %  -3.6  %
Total Company                          36.3    %   35.1    %  1.2   %

Healthcare RBR increased 31% for third quarter 2013 compared to the same
quarter of 2012. Healthcare’s organic year-over-year RBR growth rate was 21%.
Healthcare reform and transformational changes in the healthcare industry
continue to drive strong demand for Navigant’s services. Third quarter 2013
Healthcare segment operating profit increased 46% compared to third quarter
2012 driven by strong growth in RBR and improved operating leverage.

Financial, Risk & Compliance RBR for third quarter 2013 increased 17% compared
to the prior year quarter. The strong segment performance reflected growth due
to a large compliance engagement related to anti-money laundering regulatory
requirements which was partially offset by an anticipated, though
smaller-than-expected, decline in RBR from mortgage servicing review
engagements. Third quarter 2013 Financial, Risk & Compliance segment operating
profit increased 33% compared to third quarter 2012 due to strong RBR growth
and strong cost management.

Energy RBR for third quarter 2013 was relatively unchanged when compared to
third quarter 2012. Continued strength in energy efficiency and smart meter
related engagements was offset by the short-term disruption to a portion of
the Energy segment due to the report issued in June 2013 by the Moreland
Commission in New York State. Third quarter 2013 Energy segment operating
profit performance reflects the noted short-term RBR disruption.

Disputes, Investigations & Economics RBR declined 9% for third quarter 2013
compared to the same period of 2012. The decrease was primarily attributable
to the sale of a portion of the Economics practice earlier this year. Other
areas of the segment did not perform at the higher levels needed to offset the
decline. Third quarter 2013 Disputes, Investigations & Economics segment
operating profit reflects the decline in RBR.

Cash Flow

Free cash flow was $17.3 million for third quarter 2013, consistent with third
quarter 2012.

The Company used $18.8 million of cash to pay down debt during third quarter
2013. Debt levels at September 30, 2013 were 29% lower than year earlier
levels, reflecting continued strong operating cash flow. Leverage (debt
divided by trailing twelve month Adjusted EBITDA) improved to 0.86 at
September 30, 2013 compared to 1.55 at September 30, 2012. As of September 30,
2013, the Company had approximately $265 million in additional borrowing
capacity under its credit facility. In September 2013, the maturity date of
the credit facility was extended through September 2018.

Navigant repurchased 627,011 shares of common stock during third quarter 2013,
at an aggregate cost of $8.7 million and average cost of $13.84 per share. As
of September 30, 2013, there was $56 million remaining on the Company’s share
repurchase authorization.

Lucinda (Cindy) Baier, Executive Vice President and Chief Financial Officer,
commented, “We continue to focus on effective capital allocation which
includes investment in growth, debt reduction and returning capital to our
shareholders through our share repurchase program. Our free cash flows
resulting from the growth of our overall business have provided us with the
necessary resources to pursue our strategic objectives while still maintaining
a strong balance sheet.”

2013 Outlook

Navigant is updating and tightening its outlook for 2013 to reflect its solid
third quarter performance and to reflect financial results reported on a
continuing operations basis. Full year 2013 RBR is expected to range between
$735 and $745 million, which does not include $7 million of RBR from
discontinued operations. Total 2013 revenues are estimated to be between $825
and $840 million. Adjusted EBITDA is anticipated to range between $115 and
$120 million and Adjusted EPS is estimated to be between $1.00 and $1.05.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by
the Securities and Exchange Commission. Reconciliations of these non-GAAP
financial measures to the most directly comparable financial measure
calculated and presented in accordance with generally accepted accounting
principles (GAAP) are included in the financial schedules attached to this
press release. This information 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.

Conference Call Details

Julie Howard and Cindy Baier will host a conference call to discuss the
Company’s third quarter 2013 results at 10:00 a.m. Eastern Time on Tuesday,
October 29, 2013. The conference call may be accessed via the Navigant website
(www.navigant.com/investor_relations) or by dialing 888.593.8430 (312.470.7390
for international callers) and referencing pass code “NCI.” A replay of the
web cast will be available for one year. A report of financial and related
supplemental information is available at www.navigant.com/investor_relations.

About Navigant

Navigant (NYSE: NCI) is a specialized, global expert services firm dedicated
to assisting clients in creating and protecting value in the face of critical
business risks and opportunities. Through senior level engagement with
clients, Navigant professionals combine technical expertise in Disputes and
Investigations, Economics, Financial Advisory and Management Consulting, with
business pragmatism in the highly regulated Construction, Energy, Financial
Services and Healthcare industries to support clients in addressing their most
critical business needs. More information about Navigant can be found at
www.navigant.com.

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 generally be
identified by words such as “anticipate,” “believe,” “intend,” “estimate,”
“expect,” “plan,” “outlook” and similar expressions. These statements are
based upon management’s current expectations and speak only 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 contained in or implied by the forward-looking
statements including, without limitation: the success of the Company’s
organizational changes and margin improvement initiatives; risks inherent in
international operations, including foreign currency fluctuations; ability to
make acquisitions and divestitures; pace, timing and integration of
acquisitions and separation of divestitures; impairment charges; 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; conflicts of interest; potential loss
of clients or large engagements; clients’ financial condition and their
ability to make payments to the Company; risks inherent with litigation;
higher risk client assignments; professional liability; potential legislative
and regulatory changes; continued access to capital; and market and general
economic conditions. Further information on these and other potential factors
that could affect the Company’s financial results are included under the “Risk
Factors” section and elsewhere in the Company’s filings with the Securities
and Exchange Commission (SEC), which are available on the SEC’s website or at
www.navigant.com/investor_relations. The Company cannot guarantee any future
results, levels of activity, performance or achievement and undertakes no
obligation to update any of its forward-looking statements.


NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data (1))
(Unaudited)
                                                              
                         For the quarter ended       For the nine months ended
                         September 30,               September 30,
                         2013         2012          2013         2012
Revenues:
Revenues before          $ 186,444     $ 176,365     $ 556,644     $ 532,864
reimbursements
Reimbursements            25,163     25,765      74,117     66,421  
Total revenues             211,607       202,130       630,761       599,285
Costs of services:
Cost of services
before reimbursable        122,165       117,910       367,577       354,477
expenses
Reimbursable expenses     25,163     25,765      74,117     66,421  
Total costs of             147,328       143,675       441,694       420,898
services
General and
administrative             33,914        33,100        99,036        104,534
expenses
Depreciation expense       4,122         3,618         11,952        10,874
Amortization expense       1,815         1,504         5,226         4,879
Other operating costs
(benefit):
Contingent acquisition
liability adjustments,     (2,000  )     -             (2,000  )     620
net
Office consolidation       (150    )     -             348           -
Gain on disposition of    -          -           (1,715  )   -       
assets
Operating income           26,578        20,233        76,220        57,480
Interest expense           1,094         1,297         3,491         4,186
Interest income            (96     )     (167    )     (371    )     (586    )
Other (income)            99         95          (43     )   56      
expense, net
Income from continuing
operations before          25,481        19,008        73,143        53,824
income tax expense
Income tax expense        11,952     7,797       32,250     22,744  
Net income from            13,529        11,211        40,893        31,080
continuing operations
(Loss) Income from
discontinued              (3,303  )   233         (2,919  )   1,562   
operations, net of tax
Net income               $ 10,226    $ 11,444     $ 37,974    $ 32,642  
                                                                   
                                                                   
Basic per share data
Net income from          $ 0.27        $ 0.22        $ 0.82        $ 0.61
continuing operations
(Loss) Income from
discontinued             $ (0.07   )  $ -          $ (0.06   )  $ 0.03    
operations, net of tax
Net income               $ 0.21      $ 0.22       $ 0.76      $ 0.64    
Shares used in
computing per basic        49,573        50,863        49,970        51,002
share data
                                                                   
Diluted per share data
Net income from          $ 0.27        $ 0.22        $ 0.80        $ 0.60
continuing operations
(Loss) Income from
discontinued             $ (0.07   )  $ -          $ (0.06   )  $ 0.03    
operations, net of tax
Net income               $ 0.20      $ 0.22       $ 0.74      $ 0.63    
Shares used in
computing per diluted      50,762        51,460        51,048        51,647
share data

                                                          
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
                                                             
                                             September 30,   December 31,
                                             2013           2012
                                             (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                    $  3,519        $ 1,052
Accounts receivable, net                        207,120        198,709
Prepaid expenses and other current assets       24,109         25,054
Deferred income tax assets                     15,882      17,821   
Total current assets                            250,630        242,636
Non-current assets:
Property and equipment, net                     43,992         45,342
Intangible assets, net                          12,383         16,123
Goodwill                                        614,362        619,932
Other assets                                   24,207      30,417   
Total assets                                 $  945,574    $ 954,450  
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                             $  14,662       $ 18,042
Accrued liabilities                             16,421         11,557
Accrued compensation-related costs              67,528         84,813
Income tax payable                              6,473          7,129
Other current liabilities                      33,567      35,754   
Total current liabilities                       138,651        157,295
Non-current liabilities:
Deferred income tax liabilities                 80,060         67,623
Other non-current liabilities                   31,878         35,606
Bank debt non-current                          110,006     134,183  
Total non-current liabilities                  221,944     237,412  
Total liabilities                              360,595     394,707  
Stockholders' equity:
Common stock                                    63             62
Additional paid-in capital                      595,398        582,363
Treasury stock                                  (241,003 )     (216,500 )
Retained earnings                               240,516        202,542
Accumulated other comprehensive loss           (9,995   )   (8,724   )
Total stockholders' equity                     584,979     559,743  
Total liabilities and stockholders' equity   $  945,574    $ 954,450  
                                                             
Selected Data
Days sales outstanding, net (DSO)               81             72

                                                             
NAVIGANT CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                  
                                                                  
                       For the quarter ended       For the nine months ended
                       September 30,              September 30,
                       2013         2012         2013          2012
                                                                  
Cash flows from
operating
activities:
Net income             $ 10,226      $ 11,444      $ 37,974       $ 32,642
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation expense     4,122         3,618         11,952         10,874
Accelerated
depreciation -           -             -             498            -
office consolidation
Amortization expense     1,815         1,504         5,226          4,879
Amortization expense
- external use           86            -             237            -
software
Share-based              2,775         2,738         8,194          7,677
compensation expense
Accretion of             223           165           676            439
interest expense
Deferred income          777           1,571         12,750         13,055
taxes
Allowance for
doubtful accounts        690           1,057         1,917          4,110
receivable
Contingent
acquisition              (2,000  )     -             (2,000   )     620
liability
adjustments, net
Gain on disposition      -             -             (1,715   )     -
of assets
Loss on disposition
of discontinued          3,675         -             3,675          -
operations
Changes in assets
and liabilities (net
of acquisitions and
dispositions):
Accounts receivable,     (6,290  )     (4,608  )     (22,554  )     (33,742  )
net
Prepaid expenses and     2,975         (1,598  )     10,100         (6,794   )
other assets
Accounts payable         2,185         2,121         (3,374   )     2,570
Accrued liabilities      3,298         911           3,385          3,032
Accrued
compensation-related     6,920         7,027         (14,508  )     (30,517  )
costs
Income taxes payable     5,716         1,043         304            (1,809   )
Other liabilities       (2,120  )   (1,887  )   (2,099   )   1,405    
                                                                  
Net cash provided by     35,073        25,106        50,638         8,441
operating activities
                                                                  
Cash flows from
investing
activities:
Purchases of
property and             (2,952  )     (3,532  )     (8,707   )     (14,511  )
equipment
Acquisitions of
businesses, net of       (2,989  )     (2,588  )     (2,989   )     (2,588   )
cash acquired
Proceeds from
dispositions, net of     1,366         -             16,973         -
selling costs
Payments of
acquisition              (1,490  )     -             (1,838   )     (1,106   )
liabilities
Capitalized external     (491    )     (390    )     (2,492   )     (1,301   )
use software
Other, net              -          -          -           (300     )
                                                                  
Net cash (used in)
provided by              (6,556  )     (6,510  )     947            (19,806  )
investing activities
                                                                  
Cash flows from
financing
activities:
Issuances of common      475           606           2,620          2,733
stock
Repurchase of common     (8,676  )     (5,407  )     (22,321  )     (12,667  )
stock
Payments of
contingent               -             -             (3,287   )     (2,801   )
acquisition
liabilities
Repayments to banks      (61,883 )     (68,976 )     (266,327 )     (209,004 )
Borrowings from          43,128        56,198        242,466        232,226
banks
Payments of debt         (669    )     -             (669     )     -
issuance costs
Other, net              (99     )   69         (1,551   )   (970     )
Net cash (used in)
provided by             (27,724 )   (17,510 )   (49,069  )   9,517    
financing activities
                                                                  
Effect of exchange
rate changes on cash    138        153        (49      )   118      
and cash equivalents
Net increase
(decrease) in cash       931           1,239         2,467          (1,730   )
and cash equivalents
Cash and cash
equivalents at          2,588      -          1,052       2,969    
beginning of the
period
Cash and cash
equivalents at end     $ 3,519     $ 1,239     $ 3,519      $ 1,239    
of the period

                                                            
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (2)
(In thousands, except per share data)
(Unaudited)
                                                                   
This press release includes certain non-GAAP financial measures as defined by
the Securities and Exchange Commission. Below are the reconciliations of these
non-GAAP financial measures to the most directly comparable financial measure
calculated and presented in accordance with generally accepted accounting
principles (GAAP). This information 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. Management uses these non-GAAP financial
measures in addition to GAAP financial measures to assess the Company's
operations and financial results and believes they are useful indicators of
operating performance and the Company's ability to generate cash flows from
operations that are available for interest, debt service, taxes and capital
expenditures. Investors should recognize that these non-GAAP financial
measures may not be comparable to similarly-titled measures of other
companies.

EBITDA, adjusted                                      For the nine months
EBITDA, adjusted    For the quarter ended             ended
Net Income and
adjusted
Earnings Per        September 30,                     September 30,
Share (3)
                    2013           2012              2013        2012
Severance           $  459          $ 638             $ 4,265      $ 1,895
expense
Income tax            (165     )   (238    )        (1,388 )   (714    )
benefit (4)
Net income
impact of           $  294        $ 400            $ 2,877    $ 1,181   
severance
expense
                                                                   
Other operating
(benefit) costs
- contingent        $  (2,000   )   $ -               $ (2,000 )   $ 620
acquisition
liability
adjustment
Income tax
expense               807         -               807       (250    )
(benefit)(4)
Net income
impact of other
operating
(benefit) costs     $  (1,193   )  $ -              $ (1,193 )  $ 370     
- contingent
acquisition
liability
adjustment
                                                                   
Other operating
(benefit) costs     $  (150     )   $ -               $ 348        $ -
- office
consolidation
Income tax
expense               60          -               (141   )   -       
(benefit)(4)
Net income
impact of other
operating           $  (90      )  $ -              $ 207      $ -       
(benefit) costs
- office
consolidation
                                                                   
Other operating
benefit - gain      $  -            $ -               $ (1,715 )   $ -
on disposition
of assets
Income tax            -           -               692       -       
expense (4)
Net income
impact of other
operating           $  -          $ -              $ (1,023 )  $ -       
benefit - gain
on disposition
of assets
                                                                   
EBITDA
reconciliation:
Operating income    $  26,578       $ 20,233          $ 76,220     $ 57,480
Depreciation           4,122          3,618             11,952       10,874
expense
Accelerated
depreciation -         -              -                 498
office
consolidation
Amortization          1,815       1,504           5,226     4,879   
expense
EBITDA              $  32,515       $ 25,355          $ 93,896     $ 73,233
Severance              459            638               4,265        1,895
expense
Other operating
(benefit) costs
- contingent           (2,000   )     -                 (2,000 )     620
acquisition
liability
adjustment
Other operating
benefit - office       (150     )     -                 (150   )     -
consolidation
Other operating
benefit - gain        -           -               (1,715 )   -       
on disposition
of assets
Adjusted EBITDA     $  30,824     $ 25,993         $ 94,296   $ 75,748  
                                                                   
Net income from
continuing          $  13,529       $ 11,211          $ 40,893     $ 31,080
operations
Net income
impact of              294            400               2,877        1,181
severance
expense
Net income
impact of other
operating
(benefit) costs        (1,193   )     -                 (1,193 )     370
- contingent
acquisition
liability
adjustment
Net income
impact of other
operating              (90      )     -                 207          -
(benefit) costs
- office
consolidation
Net income
impact of other
operating             -           -               (1,023 )   -       
benefit - gain
on disposition
of assets
Adjusted net        $  12,540     $ 11,611         $ 41,761   $ 32,631  
income
Shares used in
computing per          50,762         51,460            51,048       51,647
diluted share
data
Adjusted
earnings per        $  0.25         $ 0.23            $ 0.82       $ 0.63
share
                                                                   
                    For the quarter ended             For the nine months
                                                      ended
Free Cash Flow      September 30,                     September 30,
(5)
                    2013           2012              2013        2012
Net cash
provided by         $  35,073       $ 25,106          $ 50,638     $ 8,441
operating
activities
Changes in
assets and             (12,684  )     (3,009  )         28,746       65,855
liabilities
Allowance for
doubtful               (690     )     (1,057  )         (1,917 )     (4,110  )
accounts
receivable
Purchases of
property and           (2,952   )     (3,532  )         (8,707 )     (14,511 )
equipment
Payments of
acquisition            (1,490   )     -                 (1,838 )     (1,106  )
liabilities
Payments of
contingent            -           -               (3,287 )   (2,801  )
acquisition
liabilities
Free Cash Flow      $  17,257     $ 17,508         $ 63,635   $ 51,768  
                                                                   
                    At
Leverage Ratio      September 30,
(6)
                    2013           2012
Adjusted EBITDA
for prior           $  127,277      $ 100,108
twelve-month
period
Bank debt           $  110,006      $ 155,538
Leverage ratio         0.86           1.55
                                                                   
Footnotes
(1) Per share data may not sum due to rounding.
(2) During the quarter ended September 30, 2013, the United Kingdom financial
services advisory business was sold. The results of operations from this
business are presented as discontinued operations. Prior period information
has been reclassified to reflect this change. All non-GAAP financial measures
are presented on a continuing operations basis unless otherwise noted.
(3) EBITDA is earnings from continuing operations before interest, taxes,
depreciation and amortization. Adjusted EBITDA excludes the impact of
severance expense and other operating costs (benefit). Adjusted net income and
adjusted earnings per share exclude the net income and per share net income
impact of discontinued operations, severance expense and other operating costs
(benefit). Severance expense and other operating costs (benefit) are not
considered to be non-recurring, infrequent or unusual to our business.
Management believes that these measures provide investors with enhanced
comparability of the Company's results of operations across periods.
(4) Effective income tax expense (benefit) has been determined based on
specific tax jurisdiction.
(5) Free cash flow is calculated as net cash provided from operations
excluding changes in assets and liabilities and allowance for doubtful
accounts receivable less cash payments for property and equipment and deferred
acquisition related payments. Free cash flow does not represent discretionary
cash available for spending as it excludes certain contractual obligations
such as debt repayment. However, management believes that it provides
investors with an indicator of cash flows available for on-going business
operations and long term value creation.
(6) Leverage ratio is calculated as bank debt at the end of the period divided
by adjusted EBITDA for the prior twelve-month period. Management believes that
leverage ratio provides investors with an indicator of the cash flows
available to repay the Company's debt obligations.

Contact:

For additional information contact:
Navigant
Paul Longhini
Investor Relations
312.583.5836
plonghini@navigant.com
 
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