Navigant Consulting, Inc. Announces Second Quarter 2008 Financial Results

CHICAGO--(Business Wire)--
Navigant Consulting, Inc. (NYSE:NCI), a global consulting firm
providing dispute, investigative, operational, risk management and
financial and regulatory advisory solutions, today announced financial
results for the second quarter ended June 30, 2008.

"We had a strong second quarter with record revenues and continued
improved margins," commented William M. Goodyear, Chairman and Chief
Executive Officer. "Company wide utilization of 79% was very
gratifying, reflecting solid demand across most of our markets. The
May 1st closing of our acquisition of Chicago Partners went smoothly
and we are off to an excellent start in leveraging the skills and
resources that this group brings to Navigant. Overall we are very
pleased with our results for the first half of the year. As we look
toward the second half of the year, we continue to focus on both the
opportunities and the challenges posed by the ongoing and intensifying
disruptions in the global financial markets."

Second Quarter 2008 Overview

The Company's second quarter 2008 results are summarized as
follows:

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Second Quarter 2008 Financial Results (1)
----------------------------------------------------------------------
Q2 2008 Q1 2008 % Change Q2 2007 % Change
----------------------------------------------------------------------
Total Revenues ($000) $211,408 $207,139 2.1% $189,633 11.5%
----------------------------------------------------------------------
Adjusted EBITDA ($000) $34,462 $33,208 3.8% $29,657 16.2%
----------------------------------------------------------------------
EBITDA ($000) $32,507 $32,558 -0.2% $29,657 9.6%
----------------------------------------------------------------------
EPS $0.21 $0.23 -8.7% $0.21 0.0%
----------------------------------------------------------------------
Adjusted EPS $0.24 $0.25 -4.0% $0.21 14.3%
----------------------------------------------------------------------
Average Billable FTEs 1,916 1,913 0.2% 1,890 1.4%
----------------------------------------------------------------------
End of Period Billable
FTEs 1,928 1,896 1.7% 1,907 1.1%
----------------------------------------------------------------------
Consultant Utilization
(1,850 base) 79% 83% -4.8% 77% 2.6%
----------------------------------------------------------------------
Average Bill Rate
(excluding success fees) 266 254 4.7% 236 12.7%
----------------------------------------------------------------------
DSO 85 83 2.4% 87 -2.3%
----------------------------------------------------------------------
*T

(1) See the attached schedules for a reconciliation of Adjusted
EBITDA and Adjusted EPS to the GAAP financial results.

"The Disputes and Investigative Services segment had a solid
quarter and we experienced continued growth in the International
Consulting segment," stated Julie M. Howard, President and Chief
Operating Officer. "The Business Consulting segment's performance was
steady, reflecting strong demand for our Healthcare and Energy
services, offset by lower discretionary consulting spending in the
Financial Services and Insurance industries. We remain focused on
leveraging uncommon combinations of our capabilities to address
emerging client needs. The addition of our Economic Consulting
Services segment further advances this strategy."

The Company's year-to-date 2008 financial results are summarized
as follows:

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Year-to-Date 2008 Financial Results (1)
----------------------------------------------------------------------
YTD 2008 YTD 2007 % Change
----------------------------------------------------------------------
Total Revenues ($000) $418,547 $372,923 12.2%
----------------------------------------------------------------------
Adjusted EBITDA ($000) $67,670 $58,858 15.0%
----------------------------------------------------------------------
EBITDA ($000) $65,065 $57,581 13.0%
----------------------------------------------------------------------
EPS $0.44 $0.41 7.3%
----------------------------------------------------------------------
Adjusted EPS $0.49 $0.43 14.0%
----------------------------------------------------------------------
*T

(1) See the attached schedules for a reconciliation of Adjusted
EBITDA and Adjusted EPS to the GAAP financial results.

Second Quarter 2008 Business Segment Highlights

The Company's North American Business Consulting segment produced
second quarter 2008 revenues of $92.0 million, a decrease of 2% over
second quarter 2007. Heightened demand continued for the segment's
Energy and Healthcare services, which positively impacted the
segment's second quarter results. The firm's Energy expertise
continues to be sought after as the impact of the 2007 Energy Act
permeates the marketplace. Additionally, private investor interest and
new energy related policies and regulations are further escalating the
need for Navigant's services in the energy industry.

Navigant Healthcare professionals are seeing an increase in
business generated by health facilities and systems seeking cost
structure improvements and financial and operational enhancements. The
combined Energy and Healthcare successes served to largely offset the
softness in discretionary spending related to the Company's domestic
Financial Services and Insurance practices. Both practices are
shifting their portfolio of offerings in response to changing market
conditions to respond to higher priority demand drivers such as
regulatory mandates, risk management, operational efficiencies and
cost reductions.

The North American Disputes and Investigative Services segment
achieved second quarter 2008 revenues of $88.6 million, an increase of
10% over second quarter 2007, but down modestly from first quarter's
exceptionally strong performance which benefited from a number of
large, active assignments that were pressing toward trials. The
Company remains well positioned to capitalize on the dispute and
investigative needs created by the global regulatory and economic
environment. The crisis in the global credit and housing markets
continues to generate demand for the Company's accounting, financial,
economic and industry expertise.

Navigant's International Consulting Operations segment reported
second quarter 2008 revenues of $23.1 million, an increase of 60% over
second quarter 2007. The segment's impressive growth reflects the
favorable combination of acquisitions made in 2007 and demand for
their extensive expertise and experience in large, international
infrastructure disputes.

The Company's new Economics Consulting Services segment
(reflecting the acquisition of Chicago Partners on May 1, 2008)
performed as expected, reporting revenues of $7.7 million for the
second quarter 2008. The practice's prominence in antitrust related
engagements continued to drive revenues. Additionally, during the
second quarter the segment began to see substantial traction related
to the credit crisis. This trend is expected to continue during the
second half of the year and to generate cross practice opportunities
across the Company.

A Company metrics summary including data by segment is available
on Navigant's website (www.navigantconsulting.com) under the Investor
Relations section.

Web Cast of the Company's Announcement of Second Quarter 2008
Results

A web cast of management's presentation of the Company's second
quarter 2008 financial results will be available on Navigant's website
(www.navigantconsulting.com) under the Investor Relations section. A
replay of the web cast will be available for approximately 90 days.

About Navigant Consulting

Navigant Consulting, Inc. (NYSE: NCI) is a specialized independent
consulting firm providing dispute, investigative, financial,
operational and business advisory, risk management and regulatory
advisory, and transaction advisory solution 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.

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: the success
of the Company's organizational changes; risks inherent in
international operations including foreign currency fluctuations;
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
undertakes no obligation to update any of its forward-looking
statements after the date of this press release.

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NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

For the quarter ended June 30, 2008
-----------------------------------
Adjusted Adjustments Reported
-----------------------------------

Revenues before reimbursements $189,385 $189,385
Reimbursements 22,023 22,023
-----------------------------------
Total revenues 211,408 - 211,408

Cost of services before
reimbursable expenses 113,852 113,852
Reimbursable expenses 22,023 22,023
-----------------------------------
Cost of services 135,875 - 135,875
General and administrative
expenses 41,071 41,071
Depreciation 4,381 4,381
Amortization 4,597 4,597
Other operating costs
Office consolidation - 2,575 2,575

-----------------------------------
Operating income 25,484 (2,575) 22,909
Interest expense, net 5,393 5,393
Other income (68) (68)
------------------------------------
Income before income tax expense 20,159 (2,575) 17,584
Income tax expense 8,636 (1,038) 7,598
-----------------------------------
Net income $11,523 ($1,537) $9,986
===================================

Net income per diluted share $0.24 $0.21
===================================

Shares used in computing net
income per diluted share 48,257 48,257

Percentage of revenues before
reimbursements :
----------------------------------
Cost of services before
reimbursable expenses 60% 60%
Reimbursable expenses 12% 12%
General and administrative
expenses 22% 22%

EBITDA (2) 18% 17%
Operating income 13% 12%
Net income 6% 5%

EBITDA (2) reconciliation:
EBITDA (2) $34,462 ($1,955)(1) $32,507
Depreciation 4,381 4,381
Accelerated Depreciation -
Office consolidation - (620) 620
Amortization 4,597 4,597
-----------------------------------
Operating income $25,484 ($2,575) $22,909
===================================

For the quarter ended June 30, 2007
------------------------------------
Adjusted Adjustments Reported
------------------------------------

Revenues before reimbursements $169,650 $169,650
Reimbursements 19,983 19,983
------------------------------------
Total revenues $189,633 - $189,633

Cost of services before
reimbursable expenses 105,849 105,849
Reimbursable expenses 19,983 19,983
------------------------------------
Cost of services 125,832 - 125,832
General and administrative
expenses 34,144 34,144
Depreciation 3,995 3,995
Amortization 3,784 3,784
Other operating costs
Office consolidation - -

------------------------------------
Operating income 21,878 - 21,878
Interest expense, net 2,325 2,325
Other income (117) (117)
------------------------------------
Income before income tax expense 19,670 - 19,670
Income tax expense 8,320 - 8,320
------------------------------------
Net income $11,350 - $11,350
====================================

Net income per diluted share $0.21 $0.21
====================================

Shares used in computing net
income per diluted share 54,126 54,126

Percentage of revenues before
reimbursements :
----------------------------------
Cost of services before
reimbursable expenses 62% 62%
Reimbursable expenses 12% 12%
General and administrative
expenses 20% 20%

EBITDA (2) 17% 17%
Operating income 13% 13%
Net income 7% 7%

EBITDA (2) reconciliation:
EBITDA (2) $29,657 - $29,657
Depreciation 3,995 3,995
Accelerated Depreciation -
Office consolidation - -
Amortization 3,784 3,784
------------------------------------
Operating income $21,878 - $21,878
====================================

(1) During the second quarter of 2008, the Company incurred office
consolidation costs of $2.6 million associated with real estate
rationalization, including lease termination costs and
accelerated depreciation on certain leasehold improvements.

(2) 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.
*T

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NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

For the six months ended
June 30, 2008
----------------------------------
Adjusted Adjustments Reported
----------------------------------

Revenues before reimbursements $373,679 $373,679
Reimbursements 44,868 44,868
----------------------------------
Total revenues $418,547 $418,547

Cost of services before
reimbursable expenses 226,925 226,925
Reimbursable expenses 44,868 44,868
----------------------------------
Cost of services 271,793 271,793
General and administrative expenses 79,084 79,084
Depreciation 8,546 8,546
Amortization 8,824 8,824
Other operating costs
Separation and Severance costs - -
Office consolidation - 4,093 4,093

----------------------------------
Operating income 50,300 (4,093) 46,207
Interest expense, net 9,723 9,723
Other income (63) (63)
----------------------------------
Income before income tax expense 40,640 (4,093) 36,547
Income tax expense 17,306 (1,651) 15,655
----------------------------------
Net income $23,334 ($2,442) $20,892
==================================

Net income per diluted share $0.49 $0.44
==================================

Shares used in computing net income
per diluted share 47,548 47,548

Percentage of revenues before
reimbursements :
-----------------------------------
Cost of services before
reimbursable expenses 61% 61%
Reimbursable expenses 12% 12%
General and administrative expenses 21% 21%

EBITDA (3) 18% 17%
Operating income 13% 12%
Net income 6% 6%

EBITDA (3) reconciliation:
EBITDA (3) $67,670 ($2,605)(1) $65,065
Depreciation 8,546 8,546
Accelerated Depreciation -
Office consolidation - (1,488) 1,488
Amortization 8,824 8,824
----------------------------------
Operating income $50,300 ($4,093) $46,207
==================================

For the six months ended
June 30, 2007
-----------------------------------
Adjusted Adjustments Reported
-----------------------------------

Revenues before reimbursements $334,488 $334,488
Reimbursements 38,435 38,435
-----------------------------------
Total revenues $372,923 $372,923

Cost of services before
reimbursable expenses 207,083 207,083
Reimbursable expenses 38,435 38,435
-----------------------------------
Cost of services 245,518 245,518
General and administrative expenses 68,547 68,547
Depreciation 7,716 7,716
Amortization 7,420 7,420
Other operating costs
Separation and Severance costs - 1,277 1,277
Office consolidation - - -

-----------------------------------
Operating income 43,722 (1,277) 42,445
Interest expense, net 3,167 3,167
Other income (108) (108)
-----------------------------------
Income before income tax expense 40,663 (1,277) 39,386
Income tax expense 17,214 (515) 16,699
-----------------------------------
Net income $23,449 ($762) $22,687
===================================

Net income per diluted share $0.43 $0.41
===================================

Shares used in computing net income
per diluted share 55,017 55,017

Percentage of revenues before
reimbursements :
-----------------------------------
Cost of services before
reimbursable expenses 62% 62%
Reimbursable expenses 11% 11%
General and administrative expenses 20% 20%

EBITDA (3) 18% 17%
Operating income 13% 13%
Net income 7% 7%

EBITDA (3) reconciliation:
EBITDA (3) $58,858 ($1,277)(2) $57,581
Depreciation 7,716 7,716
Accelerated Depreciation -
Office consolidation - -
Amortization 7,420 7,420
-----------------------------------
Operating income $43,722 ($1,277) $42,445
===================================

(1) During the first six months of 2008, the Company incurred office
consolidation costs of $4.1 million associated with real estate
rationalization, including lease termination costs and
accelerated depreciation on certain leasehold improvements.

(2) During the first quarter of 2007, the Company incurred realignment
costs of $1.3 million associated with a management reorganization
including severance.

(3) 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.
*T

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NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)

June March December June
30, 2008 31, 2008 31, 2007 30, 2007
Assets
------------------------------ ---------------------------------------
Cash and cash equivalents $10,320 $7,632 $11,656 $19,691
Trade accounts receivable, net 219,868 206,567 189,616 195,970
Prepaid and other assets 36,097 27,196 27,287 30,524
---------------------------------------
Total current assets 266,285 241,395 228,559 246,185

Property and equipment, net 49,473 52,129 54,687 58,872
Goodwill and intangible
assets, net 536,246 475,557 488,523 452,175
Other non-current assets, net 19,867 8,373 6,928 8,832
---------------------------------------
Total Assets $871,871 $777,454 $778,697 $766,064
=======================================

Liabilities and Stockholders'
Equity
------------------------------

Bank debt $2,250 $2,250 $2,250 $2,250
Other current liabilities 130,393 105,382 124,269 99,292
Long term debt 306,787 265,517 254,366 301,247
Other liabilities 65,904 55,454 55,059 41,653
Stockholders' equity 366,537 348,851 342,753 321,622

---------------------------------------
Total Liabilities and
stockholders' equity $871,871 $777,454 $778,697 $766,064
=======================================

Selected Data

Days sales outstanding, net
(DSO) (1) 85 83 77 87
=======================================

1) Net of deferred revenue. June 30, 2008 DSO is calculated on a
proforma basis as if Chicago Partners acquisition occurred April 1,
2008.
*T

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NAVIGANT CONSULTING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in 000s

For the three months For the six months
ended ended
June 30, June 30,
-------------------- ------------------
2008 2007 2008 2007
---------- --------- -------- ---------

Cash flows from operating
activities:
Net income $9,986 $11,350 $20,892 $22,687
Adjustments to reconcile net
income to net cash
provided by (used in)
operating activities:
Depreciation expense 5,001 3,995 10,034 7,716
Amortization expense 4,597 3,784 8,824 7,420
Stock-based compensation
expense 3,044 5,447 6,577 8,710
Deferred income taxes (5,101) 924 (4,579) 2,523
Other, net 7,538 2,385 9,799 5,370
Changes in assets and
liabilities (11,602) (9,471) (52,115) (43,505)

-------------------- ------------------
Net cash (used in) provided by
operating activities 13,463 18,414 (568) 10,921
-------------------- ------------------

Cash flows from investing
activities:
Purchases of property and
equipment (1,433) (11,190) (3,964) (14,430)
Acquisitions of businesses (50,000) (24,191) (50,000) (37,925)
Payments of acquisition
liabilities (2,000) (1,365) (3,653) (2,165)
Other, net (352) (2,042) (352) (1,269)

-------------------- ------------------
Net cash used in investing
activities (53,785) (38,788) (57,969) (55,789)
-------------------- ------------------

Cash flows from financing
activities:
Issuances of common stock 1,515 2,142 4,078 5,569
Repurchase of common
stock/treasury stock - (218,429) - (218,429)
Proceeds from (Payments of)
term loan (563) 225,000 (1,125) 225,000
Borrowings from bank, net 41,847 11,140 53,599 40,903
Other, net 211 (961) 649 (229)

-------------------- ------------------
Net cash provided by financing
activities 43,010 18,892 57,201 52,814
-------------------- ------------------

Net increase (decrease) in
cash and cash equivalents 2,688 (1,482) (1,336) 7,946
Cash and cash equivalents at
beginning of the period 7,632 21,173 11,656 11,745
-------------------- ------------------
Cash and cash equivalents at
end of the period $10,320 $19,691 $10,320 $19,691
==================== ==================
*T

Navigant Consulting, Inc.
Jennifer Moreno
Executive Director, Investor Relations
312.573.5634
jmoreno@navigantconsulting.com

Copyright Business Wire 2008