Navigant Consulting, Inc. Reports Fourth Quarter and Full Year 2008 Results

Business Wire, Feb 24, 2009

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

* 2008 revenues increased 6% year over year to a record $811 million; fourth quarter 2008 revenues decreased 5% year over year to $194 million.

* 2008 earnings per share increased 26% year over year to $0.83 per share; fourth quarter 2008 earnings per share increased 77% year over year to $0.23 per share.

* 2008 EBITDA increased 17% year over year to $125 million; fourth quarter 2008 EBITDA increased 27% year over year to $33 million.

* Debt outstanding decreased by $24 million in 2008 to $232 million (39% of capitalization).

* Earnings per share growth targeted for 2009.

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 fourth quarter and full year ended December 31, 2008.

"We are pleased with our fourth quarter and full year 2008 performance," stated William M. Goodyear, Chairman and Chief Executive Officer. "2008 revenue and earnings were up nicely and cash flow was strong. The Company's liquidity improved and our balance sheet strengthened in what emerged as an increasingly challenging economic environment in the second half of 2008."

Mr. Goodyear continued, "During 2008 we had a series of important accomplishments that will serve the Company well in 2009 and beyond. We carved out 'domain excellence' in the exploding credit crisis litigation space. Both our Healthcare and Energy teams had record years and are positioned to benefit from the recently passed Federal stimulus packages. We successfully integrated our 2007 U.K. investments and acquired the strategically important Chicago Partners economic consulting business. Overall, these achievements helped offset softness in the parts of our business impacted by the economic slowdown."

Fourth Quarter and Full Year 2008 Results

The Company's fourth quarter and full year 2008 financial results are summarized as follows:

[TABLE OMITTED]

(1) See the attached financial schedules for a reconciliation of Adjusted EBITDA and Adjusted Earnings per Share to the closest GAAP measure.

Navigant's 2008 revenues increased 6% due to overall utilization and bill rate increases as well as the May 2008 acquisition of Chicago Partners. Although these positives were partially offset by currency exchange rate impacts, full year 2008 segment operating profits increased in every segment while EBITDA, operating income and net income as a percentage of revenues all increased over 2007 levels.

While fourth quarter 2008 earnings per share increased year over year, revenues decreased modestly as a result of significant adverse currency impacts, lower reimbursements, the weakening economy and the related impact on discretionary consulting spending. Fourth quarter utilization was 77%. DSO improved by four days year over year to 73 days as of December 31, 2008. Lastly, attrition declined in the fourth quarter of 2008 to 19%, down from 22% in the fourth quarter of 2007, marking the fourth consecutive quarter of improvement.

Business Segment Highlights

Fourth quarter and full year 2008 financial results for the Company's four business segments are summarized as follows:

[TABLE OMITTED]

(2) For further detail see the Q4 2008 Metrics Datasheet posted at www.navigantconsulting.com/investor_relations.>

Demand in the Company's North American Disputes and Investigative Services segment remained active throughout 2008, driven by traditional commercial litigation, white collar defense matters, anti money laundering investigations and, increasingly, financial litigation. Fourth quarter 2008 client engagement decisions were impacted by uncertainties in the legal, economic and regulatory environment. The segment's Construction team performed very well during the fourth quarter 2008, reflecting demand for the Company's dispute resolution and project risk management services. The environment for these services remains attractive as owners and contractors are under increasing pressure to manage their risks in a challenging global economy. We expect that the infrastructure development and modernization plans in the new stimulus package will create business opportunities in 2009 and beyond.

Within Navigant's North American Business Consulting Services segment, operating profit improved 3% year over year but declined 4% in the fourth quarter of 2008 from the prior year due primarily to weakening discretionary spending in the financial services industry. The firm's Healthcare team led the segment's performance for the year and had a strong fourth quarter. While Navigant's Healthcare provider clients are generally facing the same capital market and economic challenges impacting other sectors, demand for skills in mergers, performance improvement and physician integrations have been driving needs for Navigant's expertise. The Corporate Finance team had an active year and fourth quarter 2008 with its Financial Institutions Restructuring Solutions Team (FIRST) being engaged on a number of hedge fund assignments which are expected to continue into 2009 as the credit market disruption continues. Lastly, the segment's Energy group was also a strong performer throughout the year as well as in the fourth quarter.