Navigant Consulting, Inc. Announces Third Quarter 2009 Results

http://www.businesswire.com/news/home/20091029005202/en

CHICAGO--(Business Wire)--
Navigant Consulting, Inc. (NYSE:NCI):

* Revenue before reimbursements totaled $159.2 million, up slightly from second
quarter 2009 and down 11% from third quarter 2008.
* Earnings per share totaled $0.17, up 6% from third quarter 2008; adjusted
earnings per share (adjusted to exclude the net income impact from severance and
other operating costs) totaled $0.20, up 5% from third quarter 2008.
* Utilization and average bill rate steadily improved over the course of the
quarter and averaged 76% and $255, respectively, compared to 73% and $250 for
the second quarter 2009, and 76% and $265 for the third quarter 2008.
* All operating segments realized sequential increases in revenue and operating
profit in the third quarter 2009; ongoing companywide cost reduction efforts
continue to exceed targets.
* Liquidity and cash flow remain solid as of September 30, 2009 with bank debt
and notes payable down $21.6 million from June 30, 2009 and down $56.9 million
from September 30, 2008.

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 third
quarter ended September 30, 2009.

"We are pleased with our third quarter financial results which met our
expectations and reflected further stabilization in the markets we serve,"
stated William M. Goodyear, Chairman and Chief Executive Officer. "Throughout
the year our senior leadership team has focused on market initiatives,
maintained key client capabilities, and protected the firm`s profitability in a
difficult economic climate. It is gratifying to see those efforts translate into
results."

Third Quarter 2009 Results

The Company`s third quarter 2009 results are summarized as follows:

Total Company Third Quarter 2009 Financial Results (1)
Q3 2009 Q3 2008 % Change Q2 2009 % Change
Revenue Before Reimbursements ($000) $ 159,153 $ 178,908 -11.0% $ 157,332 1.2%
Total Revenues ($000) $ 177,363 $ 198,092 -10.5% $ 173,556 2.2%
Adjusted EBITDA ($000) $ 26,108 $ 27,408 -4.7% $ 21,852 19.5%
EBITDA ($000) $ 25,238 $ 27,408 -7.9% $ 17,627 43.2%
Net Income ($000) $ 8,340 $ 7,836 6.4% $ 3,385 146.4%
Earnings Per Share $ 0.17 $ 0.16 6.3% $ 0.07 142.9%
Adjusted Earnings Per Share $ 0.18 $ 0.17 5.9% $ 0.12 50.0%
Average Billable FTEs 1,734 1,927 -10.0% 1,832 -5.3%
End of Period Billable FTEs 1,716 1,952 -12.1% 1,778 -3.5%
Consultant Utilization (1,850 base) 76% 76% 0.0% 73% 4.1%
Average Bill Rate (excluding success fees) $ 255 $ 265 -3.8% $ 250 2.0%
DSO 87 84 3.6% 91 -4.4%

(1) See the attached financial schedules for a reconciliation of Adjusted
EBITDA, Earnings per Share, and Adjusted Earnings per Share, adjusted to exclude
the net income impact of severance and other operating costs, to the closest
GAAP measure.

Third quarter 2009 revenue before reimbursements (RBR) totaled $159.2 million,
up slightly from $157.3 million in the second quarter 2009, but down from $178.9
million in the third quarter 2008. Despite the year over year revenue decline,
net income increased 6% due to reductions in cost of services and general and
administrative (G&A) expenses as well as lower amortization and interest
expense.

Overall third quarter utilization improved to 76% from 73% for the second
quarter 2009 and was flat compared to third quarter 2008. Third quarter average
bill rate also improved to $255 from $250 for the second quarter 2009, but was
down from $265 for the third quarter 2008. Average billable full time
equivalents totaled 1,734 for the third quarter, which was down by approximately
100 from the second quarter 2009 and down nearly 200 from the third quarter
2008. Severance costs for the third quarter 2009 were $1.5 million ($0.02 per
share), which was comparable to both the second quarter 2009 and year ago
levels. Voluntary attrition rates continued to improve to 4% for the third
quarter 2009 and 13% on a trailing twelve month basis, compared to 6% and 21%,
respectively, for the comparable period in 2008. Adverse currency fluctuations
impacted year over year third quarter revenue comparisons by $2.9 million, but
were slightly favorable compared to second quarter 2009.

Both cost of services (excluding reimbursables) and G&A expenses continue to run
significantly lower than 2008 levels, reflecting the impact of numerous cost
reduction initiatives implemented throughout 2009. Cost of services (excluding
reimbursables) and G&A expenses totaled $133.0 million in the third quarter
2009, down $18.5 million (12%) from third quarter 2008. While bad debt expense
decreased to $6.1 million from $7.7 million in the third quarter 2008, third
quarter 2009 accruals were higher than expected as receivables aging lengthened.
Days sales outstanding (DSO) decreased to 87 days for the third quarter 2009
from 91 days for the second quarter 2009, but was up from 84 days for the third
quarter 2008. Based on third quarter results and the fourth quarter outlook,
Navigant continues to expect full year 2009 cost reduction efforts to match or
exceed its $50.0 million target.

The Company`s year to date 2009 results are summarized as follows:

Year-to-Date 2009 Financial Results (1)
YTD 2009 YTD 2008 % Change
Revenue Before Reimbursements ($000) $ 483,697 $ 552,587 -12.5%
Total Revenues ($000) $ 533,281 $ 616,639 -13.5%
Adjusted EBITDA ($000) $ 70,012 $ 95,078 -26.4%
EBITDA ($000) $ 64,617 $ 92,473 -30.1%
Net Income ($000) $ 17,158 $ 28,728 -40.3%
Earnings Per Share $ 0.35 $ 0.60 -41.7%
Adjusted Earnings Per Share $ 0.42 $ 0.66 -36.4%

(1) See the attached financial schedules for a reconciliation of Adjusted
EBITDA, Earnings per Share, and Adjusted Earnings per Share, adjusted to exclude
the net income impact of severance and other operating costs, to the closest
GAAP measure.

On a year to date basis, RBR declined 13% and totaled $483.7 million for 2009,
compared to $552.6 million for 2008. Currency impacts adversely affected year to
date RBR comparisons by $15.9 million. 2009 utilization decreased to 74% from
79% for 2008 and average bill rate totaled $252 for 2009, compared to $262 for
2008. Average full time equivalents dropped to 1,834 for 2009 from 1,918 for
2008, as the Company moved to align its staffing to better match current demand
levels. Cost of services (excluding reimbursables) and G&A totaled $413.7
million on a year to date basis, down $43.8 million (10%) from $457.5 million in
2008. Year to date bad debt expense was $14.3 million, compared to $17.2 million
in 2008.

The Company`s liquidity and cash flow remain solid; bank debt and notes payable
declined $21.6 million from June 30, 2009 and declined $56.9 million from
September 30, 2008. As a result, debt to total capitalization declined to 35% at
the close of the third quarter 2009 from 42% at the end of the third quarter
2008. Navigant remained within the covenant levels of its $500 million unsecured
bank facility, which will mature in 2012.

Business Segment Highlights

Third quarter 2009 financial results for the Company`s four business segments
are summarized as follows:

Business Segment Third Quarter 2009 Financial Results
Q3 2009 Q3 2008 % Change Q2 2009 % Change
Business Segment Revenues ($000)
North American Dispute and Investigative Services $ 72,578 $ 79,836 -9.1% $ 72,225 0.5%
North American Business Consulting Services 70,738 82,902 -14.7% 69,356 2.0%
International Consulting Operations 19,423 20,828 -6.7% 17,820 9.0%
Economic Consulting Services 14,624 14,526 0.7% 14,155 3.3%
Total Company $ 177,363 $ 198,092 -10.5% $ 173,556 2.2%
Business Segment Revenues before Reimbursements ($000)
North American Dispute and Investigative Services $ 65,859 $ 72,363 -9.0% $ 65,810 0.1%
North American Business Consulting Services 63,884 74,048 -13.7% 63,566 0.5%
International Consulting Operations 15,532 18,311 -15.2% 14,698 5.7%
Economic Consulting Services 13,878 14,186 -2.2% 13,258 4.7%
Total Company $ 159,153 $ 178,908 -11.0% $ 157,332 1.2%
Segment Operating Profit ($000) (2)
North American Dispute and Investigative Services $ 28,068 $ 32,558 -13.8% $ 25,681 9.3%
North American Business Consulting Services 24,408 28,047 -13.0% 23,356 4.5%
International Consulting Operations 4,105 6,127 -33.0% 4,070 0.9%
Economic Consulting Services 5,239 5,954 -12.0% 4,888 7.2%
Total Company $ 61,820 $ 72,686 -14.9% $ 57,995 6.6%

(2) For further detail and comparable year to date amounts see the Q3 2009
Metrics Datasheet posted at www.navigantconsulting.com/investor_relations.

Dispute and Investigative Services segment RBR was stable at $65.9 million for
the third quarter 2009, while segment operating profit improved by 9% from the
second quarter 2009. Although RBR was down from third quarter 2008, as the
quarter progressed demand showed signs of strengthening in areas such as
financial markets related litigation and investigations, white collar
litigation, and construction disputes and advisory services. Additionally, as
the impact of the global economic crisis spreads, a second generation of
litigation is beginning to rise on matters including contract disputes,
employment class actions, data breaches and theft of trade secrets.

Results for the Business Consulting Services segment were also steady with RBR
of $63.9 million for third quarter 2009, while segment operating profit improved
5% from the second quarter 2009. RBR was down from third quarter 2008 largely
due to the ongoing tight corporate spending environment. Solid demand in the
energy arena continues, particularly as the Company strengthens its Clean Energy
Advisor brand which supports activities aimed at reducing greenhouse gas (GHG)
emissions. The firm`s healthcare practice also performed well in the third
quarter 2009, largely driven by services related to revenue management, coding
and documentation, and mergers and acquisitions.

Navigant`s International Consulting Operations segment achieved RBR of $15.5
million, an increase of 6.0% over the previous quarter and a 15% decline from
third quarter 2008. On a local currency basis, segment RBR for third quarter
2009 was consistent with that of both second quarter 2009 and third quarter
2008. Segment operating profit improved slightly from second quarter 2009. The
market remains strong for global construction dispute services, with particular
focus on large infrastructure matters in the Middle East. The financial services
business also maintained a strong pipeline, with clients requiring both
operational and distribution strategy and transformation.

RBR for the Company`s Economic Consulting Services segment was $13.9 million, an
increase of 5% over the previous quarter and a decrease of 2% from second
quarter 2009. Segment operating profit for the segment improved 7% from second
quarter 2009. Despite recent softness in the legal and regulatory environment,
the market for economics expertise continues to be strong.

A Company metrics summary including data by segment is available at
www.navigantconsulting.com/investor_relations.

Strategic Refresh Initiative Update

As communicated earlier this year, Navigant completed a strategic assessment of
its portfolio of businesses and services and refined its strategy to enhance the
firm`s long term value. During the course of the third quarter the Company added
several strategic hires, initiated a collaborative agreement with Geisinger
Health System, a leading healthcare provider, and made steps toward the
acquisition of a small energy firm. Various other senior hires and acquisitions
are being pursued consistent with the Company`s growth plans. Additionally,
certain service lines were discontinued in the third quarter and further
rationalization of other, nonstrategic service areas is likely to continue. The
future financial impacts and timing resulting from either new growth initiatives
or other redeployments are difficult to predict at this time and are excluded
from the earnings outlook referenced below.

2009 Outlook

"We achieved higher adjusted earnings per share for the quarter despite lower
year over year revenues and a challenging operating environment," stated Mr.
Goodyear. "While the market tone has begun to feel more optimistic, we remain
cautious and will continue to operate under the disciplines that we put into
place earlier this year. With one quarter remaining in the fiscal year, we have
tightened our range of estimated revenues and RBR while maintaining our full
year earnings guidance for 2009."

Navigant`s RBR and total revenue for 2009 are expected to range from $630
million to $650 million, and $690 million to $710 million, respectively.
Estimated earnings per share for the year remain between $0.60 and $0.70,
adjusted to exclude the net income impact of severance and other operating
costs.

Third Quarter 2009 Earnings Conference Call

Mr. Goodyear will host a conference call to discuss the Company`s financial
results at 10:00 a.m. Eastern Time on Thursday, October 29, 2009. The web cast
may be accessed at www.navigantconsulting.com/investor_relations. A replay of
the web cast will be available for approximately 90 days.

About Navigant Consulting

Navigant Consulting, Inc. (NYSE: NCI) is a global consulting firm providing
dispute, investigative, operational, risk management and financial and
regulatory advisory solutions 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 natureare forward-looking statements as defined within the
Private Securities Litigation Reform Act of 1995.Forward-looking statements may
be identified by words including "goals," "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
Companycautions 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 and timing of the Company`s strategy implementation following its
strategic business assessment; the success of the Company`s cost reduction
actions; risks inherent in international operations including foreign currency
fluctuations; ability to make acquisitions; pace, timing and integration of
acquisitions; 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; 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 general
economic conditions.Further information on these and other potential factors
that could affect the Company`s financial results are included in the Company`s
filings with the SEC under the "Risk Factors" section 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.

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

For the quarter ended For the nine months ended
September 30, September 30,
2009 2008 2009 2008

Revenue before reimbursements $ 159,153 $ 178,908 $ 483,697 $ 552,587
Reimbursements 18,210 19,184 49,584 64,052
Total revenues 177,363 198,092 533,281 616,639

Cost of services before reimbursable expenses 100,545 110,083 312,779 337,008
Reimbursable expenses 18,210 19,184 49,584 64,052
Total costs of services 118,755 129,267 362,363 401,060
General and administrative expenses 32,500 41,417 100,906 120,501
Depreciation expense 4,352 4,330 13,312 12,876
Amortization expense 3,055 3,955 10,067 12,779
Other operating costs:
Office consolidation 985 553 6,505 4,646
Operating income 17,716 18,570 40,128 64,777
Interest expense 3,671 5,170 11,591 15,390
Interest income (300 ) (380 ) (908 ) (877 )
Other expense (income), net 214 93 (194 ) 30
Income before income tax expense 14,131 13,687 29,639 50,234
Income tax expense 5,791 5,851 12,481 21,506
Net income $ 8,340 $ 7,836 $ 17,158 $ 28,728

Basic income per share $ 0.17 $ 0.17 $ 0.36 $ 0.62
Shares used in computing income per basic share 48,493 46,707 48,050 46,439

Diluted income per share $ 0.17 $ 0.16 $ 0.35 $ 0.60
Shares used in computing income per diluted share 49,954 48,895 49,720 47,997

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

For the quarter ended September 30, 2009 For the quarter ended September 30, 2008
Adjusted Adjustments Reported Adjusted Adjustments Reported

Revenue before reimbursements $ 159,153 $ 159,153 $ 178,908 $ 178,908
Reimbursements 18,210 18,210 19,184 19,184
Total revenues 177,363 177,363 198,092 198,092

Cost of services before reimbursable expenses 100,545 100,545 110,083 110,083
Reimbursable expenses 18,210 18,210 19,184 19,184
Total costs of services 118,755 118,755 129,267 129,267
General and administrative expenses 32,500 32,500 41,417 41,417
Depreciation expense 4,352 4,352 4,330 4,330
Amortization expense 3,055 3,055 3,955 3,955
Other operating costs:
Office consolidation - $ 985 985 - $ 553 553
Operating income 18,701 (985 ) 17,716 19,123 (553 ) 18,570
Interest expense 3,671 3,671 5,170 5,170
Interest income (300 ) (300 ) (380 ) (380 )
Other expense, net 214 214 93 93
Income before income tax expense 15,116 (985 ) 14,131 14,240 (553 ) 13,687
Income tax expense 6,188 (397 ) 5,791 6,074 (223 ) 5,851
Net income $ 8,928 ($588 ) $ 8,340 $ 8,166 ($330 ) $ 7,836

Diluted income per share (EPS) (3) $ 0.18 $ 0.17 $ 0.17 $ 0.16

Shares used in computing income per diluted share
49,954 49,954 48,895 48,895

Percentage of revenues before reimbursements:
Cost of services before reimbursable expenses 63 % 63 % 62 % 62 %
Reimbursable expenses 11 % 11 % 11 % 11 %
General and administrative expenses 20 % 20 % 23 % 23 %

EBITDA (4) 16 % 16 % 15 % 15 %
Operating income 12 % 11 % 11 % 10 %
Net income 6 % 5 % 5 % 4 %

EBITDA (4) reconciliation:
EBITDA (4) $ 26,108 ($870 ) $ 25,238 $ 27,408 $ 27,408
Depreciation 4,352 4,352 4,330 4,330
Accelerated Depreciation - Office - (115 ) 115 - (553 ) 553
consolidation
Amortization 3,055 3,055 3,955 3,955
Operating income $ 18,701 ($985 ) (1) $ 17,716 $ 19,123 ($553 ) (2) $ 18,570

(1) During the third quarter of 2009 the Company recorded office consolidation costs of $1.0 million associated with real estate rationalization, including office closure costs, leasehold improvement write downs and accelerated depreciation on leasehold improvements.

(2) During the third quarter of 2008 the Company recorded office consolidation costs of $0.6 million in accelerated depreciation on leasehold improvements associated with real estate rationalization.

(3) The Company recorded severance costs of $1.5 million during the third quarters of 2009 and 2008. After reducing the severance costs to reflect the tax benefit on such costs of approximately 40%, the net income impact of the severance costs was $0.9 million during the third quarters of 2009 and 2008.

For the quarter ended
September 30,
2009 2008
Severance costs $ 1,545 $ 1,489
Tax benefit of severance costs at 40% (618 ) (596 )
Net income impact of severance costs $ 927 $ 893
Shares used in computing income per diluted share 49,954 48,895
Diluted income per share impact of severance costs $ 0.02 $ 0.02

Adjusted net income $ 8,928 $ 8,166
Net income impact of severance costs 927 893
Adjusted net income, excluding the net income impact of severance costs $ 9,855 $ 9,059
Shares used in computing income per diluted share 49,954 48,895
Adjusted diluted income per share, excluding the impact of severance costs $ 0.20 $ 0.19

(4) 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.

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

For the nine months ended For the nine months ended
September 30, 2009 September 30, 2008
Adjusted Adjustments Reported Adjusted Adjustments Reported

Revenue before reimbursements $ 483,697 $ 483,697 $ 552,587 $ 552,587
Reimbursements 49,584 49,584 64,052 64,052
Total revenues 533,281 533,281 616,639 616,639

Cost of services before reimbursable expenses 312,779 312,779 337,008 337,008
Reimbursable expenses 49,584 49,584 64,052 64,052
Total costs of services 362,363 362,363 401,060 401,060
General and administrative expenses 100,906 100,906 120,501 120,501
Depreciation expense 13,312 13,312 12,876 12,876
Amortization expense 10,067 10,067 12,779 12,779
Other operating costs:
Office consolidation - $ 6,505 6,505 - $ 4,646 4,646
Operating income 46,633 (6,505 ) 40,128 69,423 (4,646 ) 64,777
Interest expense 11,591 11,591 15,390 15,390
Interest income (908 ) (908 ) (877 ) (877 )
Other (income) expense, net (194 ) (194 ) 30 30
Income before income tax expense 36,144 (6,505 ) 29,639 54,880 (4,646 ) 50,234
Income tax expense 15,104 (2,623 ) 12,481 23,380 (1,874 ) 21,506
Net income $ 21,040 ($3,882 ) $ 17,158 $ 31,500 ($2,772 ) $ 28,728

Diluted income per share (EPS) (3) $ 0.42 $ 0.35 $ 0.66 $ 0.60

Shares used in computing income per diluted share
49,720 49,720 47,997 47,997

Percentage of revenues before reimbursements:
Cost of services before reimbursable expenses 65 % 65 % 61 % 61 %
Reimbursable expenses 10 % 10 % 12 % 12 %
General and administrative expenses 21 % 21 % 22 % 22 %

EBITDA (4) 14 % 13 % 17 % 17 %
Operating income 10 % 8 % 13 % 12 %
Net income 4 % 4 % 6 % 5 %

EBITDA (4) reconciliation:
EBITDA (4) $ 70,012 ($5,395 ) $ 64,617 $ 95,078 ($2,605 ) $ 92,473
Depreciation 13,312 13,312 12,876 12,876
Accelerated Depreciation - Office - (1,110 ) 1,110 - (2,041 ) 2,041
consolidation
Amortization 10,067 10,067 12,779 12,779
Operating income $ 46,633 ($6,505 ) (1) $ 40,128 $ 69,423 ($4,646 ) (2) $ 64,777

(1) During the nine months ended for 2009 the Company recorded office consolidation costs of $6.5 million associated with real estate rationalization, including office closure costs, leasehold improvement write downs and accelerated depreciation on leasehold improvements.

(2) During the nine months ended for 2008 the Company recorded office consolidation costs of $4.6 million associated with real estate rationalization, including office closure costs, leasehold improvement write downs and accelerated depreciation on leasehold improvements.

(3) The Company recorded severance costs of $5.9 million and $3.2 million during the nine months ended for 2009 and 2008 respectively. After reducing the severance costs to reflect the tax benefit on such costs of approximately 40%, the net income impact of the severance costs was $3.5 million and $1.9 million during the nine months ended for 2009 and 2008 respectively.

For the nine months ended
September 30,
2009 2008
Severance costs $ 5,892 $ 3,200
Tax benefit of severance costs at 40% (2,357 ) (1,280 )
Net income impact of severance costs $ 3,535 $ 1,920
Shares used in computing income per diluted share 49,720 47,997
Diluted income per share impact of severance costs $ 0.07 $ 0.04

Adjusted net income $ 21,040 $ 31,500
Net income impact of severance costs 3,535 1,920
Adjusted net income, excluding the net income impact of severance costs $ 24,575 $ 33,420
Shares used in computing income per diluted share 49,720 47,997
Adjusted diluted income per share, excluding the impact of severance costs $ 0.49 $ 0.70

(4) 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.

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

September 30, September 30, December 31, June 30,
Current assets: 2009 2008 2008 2009
Cash and cash equivalents $ 13,342 $ 10,530 $ 23,134 $ 5,132
Accounts receivable, net 185,129 197,877 170,464 187,201
Prepaid expenses and other current assets 13,710 18,599 13,455 15,617
Deferred income tax assets 19,826 20,950 21,494 19,367
Total current assets 232,007 247,956 228,547 227,317

Property and equipment, net 43,782 45,391 45,151 47,045
Intangible assets, net 30,515 46,203 38,108 33,956
Goodwill 474,134 475,058 463,058 475,777
Other assets 14,040 19,444 17,529 15,592
Total assets $ 794,478 $ 834,052 $ 792,393 $ 799,687

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 6,117 $ 9,782 $ 8,511 $ 9,545
Accrued liabilities 9,097 9,364 10,086 9,404
Accrued compensation-related costs 51,716 69,519 72,701 43,602
Income taxes payable 2,653 - 1,371 557
Notes payable - 6,239 4,173 4,170
Term loan - current 7,313 2,250 2,250 2,250
Other current liabilities 36,583 36,348 31,467 37,106
Total current liabilities 113,479 133,502 130,559 106,634
Non-current liabilities
Deferred income tax liabilities 31,512 29,427 28,511 30,121
Other non-current liabilities 24,477 30,254 37,336 25,022
Term loan non-current 212,625 219,938 219,375 218,250
Bank debt non-current 2,388 50,791 10,854 19,217
Total non-current liabilities 271,002 330,410 296,076 292,610
Total liabilities 384,481 463,912 426,635 399,244
Stockholders' equity:
Preferred stock - - - -
Common stock 60 59 59 60
Additional paid-in capital 557,758 553,666 555,737 556,036
Deferred stock issuance, net - 985 985 -
Treasury stock (218,798 ) (238,696 ) (231,071 ) (218,798 )
Retained earnings 86,397 57,910 69,239 78,057
Accumulated other comprehensive loss (15,420 ) (3,784 ) (29,191 ) (14,912 )
Total stockholders' equity 409,997 370,140 365,758 400,443
Total liabilities and stockholders' equity $ 794,478 $ 834,052 $ 792,393 $ 799,687

Selected Data

Days sales outstanding, net (DSO) 1 87 84 73 91

1) Net of deferred revenue.

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

For the three months ended For the nine months ended
September 30, September 30,
2009 2008 2009 2008

Cash flows from operating activities:
Net income $8,340 $7,836 $17,158 $28,728
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 4,352 4,330 13,312 12,876
Depreciation expense- office consolidation 115 553 1,110 2,041
Amortization expense 3,055 3,955 10,067 12,779
Share-based compensation expense 1,545 3,055 6,010 9,632
Accretion of interest expense 194 361 693 704
Allowance for doubtful accounts receivable 6,143 7,731 14,253 17,201
Deferred income taxes (650 ) (1,251 ) 822 (5,830 )
Other, net - (259 ) - (273 )
Changes in assets and liabilities:
Accounts receivable (4,192 ) 10,267 (25,550 ) (14,058 )
Prepaid expenses and other assets 3,426 3,051 3,352 (15,966 )
Accounts payable (3,427 ) 661 (2,495 ) 2,186
Accrued liabilities (170 ) (2,746 ) (761 ) (500 )
Accrued compensation-related costs 8,197 14,791 (21,326 ) 1,820
Income taxes payable 3,130 (9,256 ) 4,032 (6,498 )
Other liabilities 419 (3,958 ) 2,566 (6,289 )

Net cash provided by operating activities 30,477 39,121 23,243 38,553

Cash flows from investing activities:
Purchases of property and equipment (1,271 ) (1,091 ) (13,623 ) (5,055 )
Acquisition of business - - (1,875 ) (50,000 )
Payments of acquisition liabilities - - (2,821 ) (3,154 )
Other, net - (511 ) (109 ) (863 )

Net cash used in investing activities (1,271 ) (1,602 ) (18,428 ) (59,072 )

Cash flows from financing activities:
Issuances of common stock 369 1,220 2,686 5,298
Payments of notes payable (4,127 ) (4,477 ) (4,482 ) (4,976 )
Borrowings from banks, net of repayments (16,209 ) (32,604 ) (10,096 ) 20,995
Payments of term loan installments (563 ) (562 ) (1,688 ) (1,687 )
Other, net (74 ) (886 ) (888 ) (237 )
Net cash (used in) provided by financing activities (20,604 ) (37,309 ) (14,468 ) 19,393

Effect of exchange rate changes on cash (392 ) - (139 ) -
Net increase (decrease) in cash and cash equivalents 8,210 210 (9,792 ) (1,126 )
Cash and cash equivalents at beginning of the period 5,132 10,320 23,134 11,656
Cash and cash equivalents at end of the period $13,342 $10,530 $13,342 $10,530

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

Copyright Business Wire 2009