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 Navigant Reports Second Quarter 2017 Financial Results
   Monday, July 31, 2017 7:00:01 AM ET

Navigant (NCI ) today announced financial results for the second quarter ended June 30, 2017.

Financial Summary and Highlights:

-- Second quarter 2017 revenues before reimbursements (RBR) of $235.2 million decreased 1% (or relatively flat on a currency adjusted basis) and total revenues of $256.8 million decreased 2% compared to second quarter 2016

-- Second quarter 2017 net income was $8.8 million, or $0.18 per share, compared to $14.8 million, or $0.30 per share, for second quarter 2016

-- Second quarter 2017 adjusted earnings per share (EPS) of $0.24 decreased from $0.33 in second quarter 2016, primarily driven by lower than expected revenues coupled with maintenance of resources in anticipation of an improved demand environment in the second half of 2017

-- Repurchased $9.0 million of common stock during second quarter 2017, an increase of 33% over second quarter 2016

-- Management updated its 2017 financial outlook to reflect first half performance

"Demand for our services in the second quarter was impacted by unexpected factors, some of which we have already begun to overcome, and others that will take more time to address," stated Julie Howard, Navigant Chairman and CEO. "We experienced more conservative buying patterns than originally anticipated, leading to extended sales cycles and longer project conversion. We also believe the slowdown in demand for certain of our services was driven by legislative and regulatory uncertainty in the U.S. In response to these factors we implemented certain performance improvement actions both during and after the close of the quarter, including targeted staff reductions and other cost control measures."

Howard further commented, "We are encouraged that we saw our overall performance improve over the course of the second quarter, and our pipeline of opportunities strengthen. We anticipate a stronger second half, primarily driven by continued organic growth in our Healthcare segment, and an improved backlog of work in our Financial Services and Compliance segment. However, we believe it is prudent to modestly adjust our guidance downward for the full year to reflect first half results, and our view of the uncertainties in the current demand environment."

Navigant reported second quarter 2017 RBR of $235.2 million, a 1% decrease compared to $238.5 million for second quarter 2016. Total revenues decreased 2% to $256.8 million for second quarter 2017 compared to $261.7 million for second quarter 2016. Net income for second quarter 2017 was $8.8 million, or $0.18 per share, compared to $14.8 million, or $0.30 per share, in the prior year second quarter. Segment operating profit includes $3.3 million of severance expense. Additionally, severance expense of $1.1 million was incurred related to General & Administrative operations as Navigant executed against its plans to increase administrative efficiencies and implement business support improvements. Adjusted EPS was $0.24 for second quarter 2017, compared to $0.33 in second quarter 2016. Second quarter 2017 adjusted EBITDA was $29.2 million, a 21% decrease from $37.2 million for the same period in 2016.

Segment Financial Summary

                                              
                                                                                                                                                  For the quarter ended
                                                                                                                                                        June 30,
                                                                                     --------------------------------------------------------------------------------------------------------------------------------------
                                                   2017                                                  2016                                  Change
------------------------------------------ -------------------- -------------------- ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- -------------------- ---------------------
RBR ($000)                                                                                                                                                                                      
Healthcare                                                                                              $  94,134                                                                                   $  89,876                                                                       4.7 %
Energy                                                                                                     31,743                                                                                      29,295                                                                       8.4 %
Financial Services Advisory and Compliance                                                                 33,683                                                                                      39,994                                                                     -15.8 %
Disputes, Forensics & Legal Technology            75,678          79,320             -4.6 %
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------- ---------
Total Company                                                     $ 235,238                          $ 238,485             -1.4 %
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------- ---------
Total Revenues ($000)
Healthcare                                                                                              $ 102,804                                                                                   $  98,386                                                                       4.5 %
Energy                                                                                                     36,544                                                                                      32,855                                                                      11.2 %
Financial Services Advisory and Compliance                                                                 37,244                                                                                      45,360                                                                     -17.9 %
Disputes, Forensics & Legal Technology            80,254          85,082             -5.7 %
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------- ---------
Total Company                                                     $ 256,846                          $ 261,683             -1.8 %
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------- ---------
Segment Operating Profit ($000)
Healthcare                                                                                              $  28,116                                                                                   $  29,362                                                                      -4.2 %
Energy                                                                                                      8,516                                                                                       8,402                                                                       1.4 %
Financial Services Advisory and Compliance                                                                 12,307                                                                                      17,511                                                                     -29.7 %
Disputes, Forensics & Legal Technology            21,429          28,963            -26.0 %
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------- ---------
Total Company                                                     $  70,368                          $  84,238            -16.5 %
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------- ---------
Segment Operating Margin (% of RBR)
Healthcare                                                                                                   29.9 %                                                                                      32.7 %
Energy                                                                                                       26.8 %                                                                                      28.7 %
Financial Services Advisory and Compliance                                                                   36.5 %                                                                                      43.8 %
Disputes, Forensics & Legal Technology              28.3 %                             36.5 %                         
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------------------
Total Company                                       29.9 %                             35.3 %                         
------------------------------------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------------------
                                                                                                                                                                                                                                                                              

Healthcare segment RBR increased 5% for second quarter 2017 compared to the respective period in 2016, primarily on an organic basis. Segment RBR for the quarter also increased 4% sequentially from first quarter 2017. Growth was driven by continued demand from hospital systems for large, strategy-led transformation projects and demand from life sciences companies for commercialization solutions. The segment also experienced growth in managed services contracts, albeit at a lower rate than expected. Segment operating profit declined 4% in second quarter 2017 compared to the same period in 2016, primarily due to business mix.

Energy segment RBR increased 8% for second quarter 2017 on a year-over-year basis, led by contributions from the Ecofys acquisition announced in November 2016. The trend toward a cleaner, distributed, smarter energy infrastructure is driving change in traditional strategies and business models for Navigant’s energy clients. Growth in demand from commercial sector clients related to these energy transformation trends partially offset a decline in work for the U.S. federal government, as previously disclosed in the first quarter 2017. Segment operating profit increased 1% in second quarter 2017 compared to second quarter 2016.

Financial Services Advisory and Compliance segment RBR for second quarter 2017 decreased 16% compared to the prior year quarter, but increased 2% sequentially from first quarter 2017. As previously disclosed, growth in this segment was expected to decelerate in 2017, as compared to significant organic growth of 22% in full-year 2016, but not to the degree experienced in the second quarter. Throughout the quarter, conservative buying patterns for compliance services related to consumer financial services regulation continued to put revenue pressure on the segment. In contrast, the environment for financial crime related services remained strong. Segment pipeline improved over the course of the quarter and is expected to drive improved revenue performance in the segment for the second half of the year. Segment operating profit was down 30% in second quarter 2017 compared to the respective period in 2016, as resources and capabilities were maintained in anticipation of improving demand.

Disputes, Forensics & Legal Technology second quarter 2017 segment RBR decreased 5% year-over-year and 6% on a sequential basis from first quarter 2017. The decrease in RBR was driven by general weakness in commercial litigation opportunities and a delay in the start dates for certain engagements in the segment’s legal technology solutions business. Segment operating profit was down 26% in second quarter 2017 compared to the respective period of 2016, largely due to severance expense of $1.9 million which was recorded during the quarter.

Cash Flow

Net cash provided by operating activities for second quarter 2017 was $21.3 million compared to $34.2 million for second quarter 2016. Free cash flow decreased to $13.5 million for second quarter 2017 compared to $24.4 million for the same period in 2016, primarily driven by a $10.0 million earn-out payment related to the McKinnis acquisition which was paid during the second quarter of 2017. Days Sales Outstanding was 86 days as of June 30, 2017, up five days compared to December 31, 2016.

Bank debt was $184.8 million at June 30, 2017, compared to $189.8 million at June 30, 2016 and $178.3 million at March 31, 2017, with the increase in bank debt primarily attributable to the previously mentioned McKinnis acquisition earn-out payment. Leverage (bank debt divided by trailing twelve month adjusted EBITDA) was 1.37 at June 30, 2017, compared to 1.46 at June 30, 2016 and 1.25 at March 31, 2017.

Navigant repurchased 436,122 shares of common stock during the second quarter 2017 at an aggregate cost of $9.0 million and an average cost of $20.62 per share.

2017 Outlook

Navigant adjusted its financial outlook for 2017. Full year 2017 RBR is expected to range between $955 million and $980 million while 2017 total revenues are estimated to be between $1.04 billion and $1.065 billion. Adjusted EBITDA for the full year 2017 is expected to range between $135 and $145 million and adjusted EPS for the full year 2017 is estimated to be between $1.19 and $1.29.

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.

No reconciliation of Navigant’s 2017 adjusted EBITDA guidance and 2017 adjusted EPS guidance, both of which exclude the impact and tax-effected impact of severance expense and other operating costs (benefit), respectively, is included in the financial schedules attached to this press release. Navigant is not able to accurately forecast the excluded items at the level of precision that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

Conference Call Details

Navigant will host a conference call to discuss the company’s second quarter 2017 results at 10 a.m. Eastern Time (9 a.m. Central Time) on Monday, July 31, 2017. The conference call may be accessed via the Navigant website (investors.navigant.com) or by dialing 800.988.9675 (415.228.4875 for international callers) and referencing pass code "NCI." An archived version of the webcast will also be available via the Navigant website. A report of financial and related supplemental information is also available via the Navigant website.

About Navigant

Navigant Consulting, Inc. (NCI ) is a specialized, global professional services firm that helps clients take control of their future. Navigant’s professionals apply deep industry knowledge, substantive technical expertise, and an enterprising approach to help clients build, manage, and/or protect their business interests. With a focus on markets and clients facing transformational change and significant regulatory or legal pressures, the firm primarily serves clients in the healthcare, energy, and financial services industries. Across a range of advisory, consulting, outsourcing, and technology/analytics services, Navigant’s practitioners bring sharp insight that pinpoints opportunities and delivers powerful results. More information about Navigant can be found at navigant.com.

Statements included in this press release which are not historical in nature are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may generally be identified by words such as "anticipate," "believe," "may," "could," "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 execution of the Company’s long-term growth objectives 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; operational risks associated with new or expanded service areas, including business process management services; impairments; changes in accounting standards or tax rates, laws or regulations; management of professional staff, including dependence on key personnel, recruiting, retention, 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 and the Company’s ability to attract new business; brand equity; competition; accurate pricing of engagements, particularly fixed fee and multi-year engagements; clients’ financial condition and their ability to make payments to the Company; risks inherent with litigation; higher risk client assignments; government contracting; professional liability; information security; the adequacy of our business, financial and information systems and technology; maintenance of effective internal controls; potential legislative and regulatory changes; continued and sufficient access to capital; compliance with covenants in our credit agreement; interest rate risk; and market and general economic and political conditions. Further information on these and other potential factors that could affect the Company’s financial results are included under the "Risk Factors" section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, and elsewhere in the Company’s filings with the Securities and Exchange Commission (SEC), which are available on the SEC’s website or at investors.navigant.com. 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 six months ended
                                                                                                                                                                     June 30,                                                                                                                                                                                June 30,
                                                                                                  ----------------------------------------------------------------------------------------------------------------------------------------------                                          ----------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         2017                                                  2016                                                                                        2017                                                  2016
                                                                                                  ---------------------------------------------------------------------- -------------------- --------------------------------------------------                                          ---------------------------------------------------------------------- -------------------- --------------------------------------------------
Revenues:
   Revenues before reimbursements                                                                                    $ 235,238                                                                                   $ 238,485                                                                                   $ 471,449                                                                                   $ 461,960
   Reimbursements                                                                                    21,608          23,198                                                43,234          45,010  
                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                           -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
      Total revenues                                                                                                   256,846                                                                                     261,683                                                                                     514,683                                                                                     506,970
Cost of services:
   Cost of services before reimbursable expenses                                                                       168,721                                                                                     157,966                                                                                     333,773                                                                                     311,906
   Reimbursable expenses                                                                             21,608          23,198                                                43,234          45,010  
                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                           -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
      Total cost of services                                                                                           190,329                                                                                     181,164                                                                                     377,007                                                                                     356,916
General and administrative expenses                                                                                     41,726                                                                                      44,507                                                                                      83,210                                                                                      84,338
Depreciation expense                                                                                                     7,826                                                                                       7,015                                                                                      15,299                                                                                      13,537
Amortization expense                                                                                                     2,219                                                                                       2,891                                                                                       4,538                                                                                       5,812
Other operating costs (benefit):
      Contingent acquisition liability adjustments, net                                                                      -                                                                                         850                                                                                       1,199                                                                                         850
      Office consolidation, net                                                                                              -                                                                                         174                                                                                         (38 )                                                                                       174
      Deferred debt issuance costs write off                                                              -               -                                                   145               -  
                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                           -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
   Operating income                                                                                                     14,746                                                                                      25,082                                                                                      33,323                                                                                      45,343
Interest expense                                                                                                         1,280                                                                                       1,429                                                                                       2,349                                                                                       2,689
Interest income                                                                                                            (81 )                                                                                       (36 )                                                                                      (112 )                                                                                       (75 )
Other expense (income), net                                                                             602            (444 )                                                                    385            (784 )
                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                           -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
   Income before income tax expense                                                                                     12,945                                                                                      24,133                                                                                      30,701                                                                                      43,513
Income tax expense                                                                                    4,148           9,356                                                10,808          16,094  
                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                           -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
      Net income                                                                                                     $   8,797                          $  14,777                                                                $  19,893                          $  27,419  
                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                           ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                       
Basic per share data
      Net income                                                                                                     $    0.19                                                                                   $    0.31                                                                                   $    0.42                                                                                   $    0.58
Shares used in computing basic per share data                                                                           47,113                                                                                      47,550                                                                                      47,023                                                                                      47,488
                                                                                                                                                                                                                                                                                                                                                                                       
Diluted per share data
      Net income                                                                                                     $    0.18                                                                                   $    0.30                                                                                   $    0.41                                                                                   $    0.56
Shares used in computing diluted per share data                                                                         48,696                                                                                      48,841                                                                                      48,833                                                                                      48,936
                                                                                                                                                                                                                                                                                                                                                                                                                    
 
                                                                                                   NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
                                                                                                  CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
                                                                                                         (In thousands, except DSO data)
                                                                                                               
                                                                                                                    June 30,                                                                                    December 31,
                                                                                                                      2017                                                    2016
                                                                                              ------------------------------------------------------------------------ -------------------- ----------------------------------------------------
                                                                                                                   (unaudited)
ASSETS
Current assets:
   Cash and cash equivalents                                                                                     $     6,556                                                                                   $     8,291
   Accounts receivable, net                                                                                          267,283                                                                                       261,755
   Prepaid expenses and other current assets                                                       35,225            29,762  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
      Total current assets                                                                                           309,064                                                                                       299,808
Non-current assets:
   Property and equipment, net                                                                                        87,996                                                                                        82,953
   Intangible assets, net                                                                                             24,270                                                                                        28,727
   Goodwill                                                                                                          630,933                                                                                       625,027
   Other assets                                                                                    24,797            18,282  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
      Total assets                                                                                               $ 1,077,060                          $ 1,054,797  
                                                                                              ==================== ========= ==================== ==================== ==================== ==================== ========= ====================
                                                                                                                                                                                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable                                                                                              $     8,938                                                                                   $    11,871
   Accrued liabilities                                                                                                17,739                                                                                        16,144
   Accrued compensation-related costs                                                                                 65,312                                                                                       106,779
   Income tax payable                                                                                                      -                                                                                         1,564
   Other current liabilities                                                                       28,129            38,616  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
                                                                                                                     120,118                                                                                       174,974
      Total current liabilities
Non-current liabilities:
   Deferred income tax liabilities                                                                                    85,612                                                                                        77,737
   Other non-current liabilities                                                                                      34,420                                                                                        32,579
   Bank debt non-current                                                                          184,787           135,030  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
      Total non-current liabilities                                                               304,819           245,346  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
         Total liabilities                                                                        424,937           420,320  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
Stockholders’ equity:
   Common stock                                                                                                           58                                                                                            57
   Additional paid-in capital                                                                                        653,096                                                                                       644,519
   Treasury stock                                                                                                   (195,315 )                                                                                    (181,361 )
   Retained earnings                                                                                                 215,936                                                                                       196,468
   Accumulated other comprehensive loss                                                           (21,652 )                            (25,206 )
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
      Total stockholders’ equity                                                                  652,123           634,477  
                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
         Total liabilities and stockholders’ equity                                                              $ 1,077,060                          $ 1,054,797  
                                                                                              ==================== ========= ==================== ==================== ==================== ==================== ========= ====================
                                                                                                                                                                                             
   Selected Data (unaudited)
---------------------------------------------------
   Days sales outstanding, net (DSO)                                                                                      86                                                                                            81
                                                                                                                                                                                                                            
                                                                                                                                                                                                                      
                                                                                                                                                                                                     NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
                                                                                                                                                                                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                                                                                   (In thousands)
                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                         For the quarter ended                                                                                                                                                                   For the six months ended
                                                                                                                                                                               June 30,                                                                                                                                                                                  June 30,
                                                                                                            -----------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   2017                                                  2016                                                                                         2017                                                   2016
                                                                                                            ---------------------------------------------------------------------- -------------------- ---------------------------------------------------                                          ----------------------------------------------------------------------- -------------------- ---------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
Cash flows from operating activities:
Net income                                                                                                                     $   8,797                                                                                   $   14,777                                                                                   $   19,893                                                                                   $   27,419
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
   Depreciation expense                                                                                                            7,826                                                                                        7,015                                                                                       15,299                                                                                       13,537
   Amortization expense                                                                                                            2,219                                                                                        2,891                                                                                        4,538                                                                                        5,812
   Share-based compensation expense                                                                                                4,380                                                                                        3,995                                                                                        7,402                                                                                        6,524
   Deferred income taxes                                                                                                           6,893                                                                                           98                                                                                        8,232                                                                                        1,131
   Allowance for doubtful accounts receivable                                                                                      1,171                                                                                        2,911                                                                                        1,175                                                                                        4,547
   Contingent acquisition liability adjustments, net                                                                                   -                                                                                          850                                                                                        1,199                                                                                          850
   Other, net                                                                                                                        826                                                                                          384                                                                                        1,477                                                                                          741
   Changes in assets and liabilities (net of acquisitions):
      Accounts receivable                                                                                                         (2,731 )                                                                                    (28,222 )                                                                                     (7,010 )                                                                                    (43,765 )
      Prepaid expenses and other assets                                                                                           (9,161 )                                                                                      1,149                                                                                      (10,358 )                                                                                     (1,025 )
      Accounts payable                                                                                                            (2,290 )                                                                                      2,000                                                                                       (2,371 )                                                                                      2,478
      Accrued liabilities                                                                                                            799                                                                                          205                                                                                        1,383                                                                                          472
      Accrued compensation-related costs                                                                                           7,386                                                                                       16,878                                                                                      (41,870 )                                                                                    (22,788 )
      Income taxes payable                                                                                                        (5,962 )                                                                                      7,004                                                                                       (1,609 )                                                                                     12,059
      Other liabilities                                                                                         1,152            2,277                                                    964             (337 )
                                                                                                            -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
Net cash provided by (used in) operating activities                                                                               21,305                                                                                       34,212                                                                                       (1,656 )                                                                                      7,655
                                                                                                                                                                                                                                                                                                                                                                                                   
Cash flows from investing activities:
   Purchases of property and equipment                                                                                            (7,100 )                                                                                     (5,080 )                                                                                    (20,889 )                                                                                    (10,039 )
   Acquisitions of businesses, net of cash acquired                                                                                    -                                                                                            -                                                                                            -                                                                                       (1,995 )
   Other acquisition payments                                                                                                          -                                                                                            -                                                                                            -                                                                                       (5,500 )
   Other, net                                                                                                     (42 )                              (607 )                                                                    (158 )                              (625 )
                                                                                                            -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
Net cash used in investing activities                                                                                             (7,142 )                                                                                     (5,687 )                                                                                    (21,047 )                                                                                    (18,159 )
                                                                                                                                                                                                                                                                                                                                                                                                   
Cash flows from financing activities:
   Issuances of common stock                                                                                                         729                                                                                          785                                                                                        2,643                                                                                        2,841
   Repurchases of common stock                                                                                                    (8,993 )                                                                                     (6,757 )                                                                                    (13,954 )                                                                                    (13,023 )
   Payments of contingent acquisition liabilities                                                                                (10,330 )                                                                                          -                                                                                      (10,330 )                                                                                        (49 )
   Repayments to banks                                                                                                           (95,669 )                                                                                   (112,853 )                                                                                   (246,469 )                                                                                   (209,245 )
   Borrowings from banks                                                                                                         100,789                                                                                       92,482                                                                                      294,591                                                                                      227,239
   Payments of debt issuance costs                                                                                                   (35 )                                                                                          -                                                                                       (1,201 )                                                                                          -
   Other, net                                                                                                  (3,500 )                            (2,121 )                                                                  (4,827 )                            (2,730 )
                                                                                                            -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Net cash (used in) provided by financing activities                                                           (17,009 )                           (28,464 )                                                                  20,453            5,033  
                                                                                                            -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
Effect of exchange rate changes on cash and cash equivalents                                                      270             (157 )                                                                     515             (114 )
                                                                                                            -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Net decrease in cash and cash equivalents                                                                                         (2,576 )                                                                                        (96 )                                                                                     (1,735 )                                                                                     (5,585 )
Cash and cash equivalents at beginning of the period                                                            9,132            3,406                                                  8,291            8,895  
                                                                                                            -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Cash and cash equivalents at end of the period                                                                                 $   6,556                          $    3,310                                                                $    6,556                          $    3,310  
                                                                                                            ==================== ======= ==================== ==================== ==================== ==================== ======== ====================                                           ==================== ======== ==================== ==================== ==================== ==================== ======== ====================
                                                                                                                                                                                                                                                                                                                                                                                                   
 
                                                                                                                                                                                                                                     NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                     RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                                                                                                                                                                                                                     (In thousands, except per share data and percentages)
                                                                                                                                                                                                                                     (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 EBITDA, adjusted Net                                                                                                                                          For the quarter ended                                                                                                                                                                                                                                For the six months ended
Income and
-----------------------------------------------------------------------
adjusted Earnings Per Share (2)                                                                                                                                                      June 30,                                                                                                                                                                                                                                               June 30,
-----------------------------------------------------------------------                                           --------------------------------------------------------------------------------------------------------------------------------------                                                                                                                 --------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         2017                                                  2016                                                                                                                                                       2017                                                  2016
                                                                                                                  ---------------------------------------------------------------------- -------------------- --------------------------------------------------                                                                                                         ---------------------------------------------------------------------- -------------------- --------------------------------------------------
Severance expense                                                                                                                    $   4,385                                                                                   $   1,140                                                                                                                                                  $   6,171                                                                                   $   1,997
   Income tax benefit (3)                                                                                            (1,730 )                             (430 )                                                                                                                                (2,386 )                             (740 )
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Tax-effected impact of severance expense                                                                                             $   2,655                          $     710                                                                                                                               $   3,785                          $   1,257  
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Other operating costs - contingent acquisition liability adjustment,                                                                 $       -                                                                                   $     850                                                                                                                                                  $   1,199                                                                                   $     850
net
   Income tax benefit (3)                                                                                                 -            (341 )                                                                                                                                  (481 )                             (341 )
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Tax-effected impact of other operating costs - contingent                                                                            $       -                          $     509                                                                                                                               $     718                          $     509  
acquisition liability adjustment, net
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Other operating cost (benefit) - office consolidation, net                                                                           $       -                                                                                   $     174                                                                                                                                                  $     (38 )                                                                                 $     174
   Income tax (benefit) expense (3)                                                                                       -             (70 )                                                                                                                                    15             (70 )
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Tax-effected impact of other operating cost (benefit) - office                                                                       $       -                          $     104                                                                                                                               $     (23 )                                           $     104  
consolidation, net
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Other operating costs - deferred debt issuance costs write off                                                                       $       -                                                                                   $       -                                                                                                                                                  $     145                                                                                   $       -
   Income tax benefit (3)                                                                                                 -               -                                                                                                                  (58 )                                -  
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Tax-effected impact of other operating costs - deferred debt                                                                         $       -                          $       -                                                                                                                               $      87                          $       -  
issuance costs write off
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
EBITDA reconciliation:
Net Income                                                                                                                           $   8,797                                                                                   $  14,777                                                                                                                                                  $  19,893                                                                                   $  27,419
   Interest expense                                                                                                                      1,280                                                                                       1,429                                                                                                                                                      2,349                                                                                       2,689
   Interest income                                                                                                                         (81 )                                                                                       (36 )                                                                                                                                                     (112 )                                                                                       (75 )
   Other expense (income), net                                                                                                             602                                                                                        (444 )                                                                                                                                                      385                                                                                        (784 )
   Income tax expense                                                                                                                    4,148                                                                                       9,356                                                                                                                                                     10,808                                                                                      16,094
   Depreciation expense                                                                                                                  7,826                                                                                       7,015                                                                                                                                                     15,299                                                                                      13,537
   Accelerated depreciation - office consolidation (included in other                                                                        -                                                                                          33                                                                                                                                                          -                                                                                          33
   operating costs - office consolidation, net)
   Amortization expense                                                                                               2,219           2,891                                                                                                                4,538           5,812  
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
EBITDA                                                                                                                               $  24,791                                                                                   $  35,021                                                                                                                                                  $  53,160                                                                                   $  64,725
   Severance expense                                                                                                                     4,385                                                                                       1,140                                                                                                                                                      6,171                                                                                       1,997
   Other operating costs - contingent acquisition liability adjustment,                                                                      -                                                                                         850                                                                                                                                                      1,199                                                                                         850
   net
   Other operating cost (benefit) - office consolidation, net                                                                                -                                                                                         141                                                                                                                                                        (38 )                                                                                       141
   Other operating costs - deferred debt issuance costs write off                                                         -               -                                                                                                                  145               -  
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Adjusted EBITDA                                                                                                                      $  29,176                          $  37,152                                                                                                                               $  60,637                          $  67,713  
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
   Net income                                                                                                                        $   8,797                                                                                   $  14,777                                                                                                                                                  $  19,893                                                                                   $  27,419
      Tax-effected impact of severance expense                                                                                           2,655                                                                                         710                                                                                                                                                      3,785                                                                                       1,257
      Tax-effected impact of other operating costs - contingent                                                                              -                                                                                         509                                                                                                                                                        718                                                                                         509
      acquisition liability adjustment, net
      Tax-effected impact of other operating cost (benefit) - office                                                                         -                                                                                         104                                                                                                                                                        (23 )                                                                                       104
      consolidation, net
      Tax-effected impact of other operating costs - deferred debt                                                        -               -                                                                                                                   87               -  
      issuance costs write off
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
   Adjusted net income                                                                                                               $  11,452                          $  16,100                                                                                                                               $  24,460                          $  29,289  
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
      Shares used in computing adjusted per diluted share data                                                                          48,696                                                                                      48,841                                                                                                                                                     48,833                                                                                      48,936
   Adjusted earnings per share                                                                                                       $    0.24                          $    0.33                                                                                                                               $    0.50                          $    0.60  
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                               For the quarter ended                                                                                                                                                                                                                                For the six months ended
Free Cash Flow (4)                                                                                                                                                                   June 30,                                                                                                                                                                                                                                               June 30,
-----------------------------------------------------------------------                                           --------------------------------------------------------------------------------------------------------------------------------------                                                                                                                 --------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         2017                                                  2016                                                                                                                                                       2017                                                  2016
                                                                                                                  ---------------------------------------------------------------------- -------------------- --------------------------------------------------                                                                                                         ---------------------------------------------------------------------- -------------------- --------------------------------------------------
   Net cash provided by (used in) operating activities                                                                               $  21,305                                                                                   $  34,212                                                                                                                                                  $  (1,656 )                                                                                 $   7,655
      Changes in assets and liabilities                                                                                                 10,807                                                                                      (1,291 )                                                                                                                                                   60,871                                                                                      52,906
      Allowance for doubtful accounts receivable                                                                                        (1,171 )                                                                                    (2,911 )                                                                                                                                                   (1,175 )                                                                                    (4,547 )
      Purchases of property and equipment                                                                                               (7,100 )                                                                                    (5,080 )                                                                                                                                                  (20,889 )                                                                                   (10,039 )
      Payments of acquisition liabilities                                                                                                    -                                                                                        (498 )                                                                                                                                                        -                                                                                        (498 )
      Payments of contingent acquisition liabilities                                                                (10,330 )                                -                                                                                                              (10,330 )                              (49 )
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
   Free Cash Flow                                                                                                                    $  13,511                          $  24,432                                                                                                                               $  26,821                          $  45,428  
                                                                                                                  ==================== ======= ==================== ==================== ==================== ==================== ======= ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Leverage Ratio (5)                                                                                                                                                                  At June 30,
-----------------------------------------------------------------------                                           --------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         2017                                                  2016
                                                                                                                  ---------------------------------------------------------------------- -------------------- --------------------------------------------------
   Adjusted EBITDA for prior twelve-month period                                                                                     $ 135,214                                                                                   $ 130,121
   Bank debt                                                                                                                         $ 184,787                                                                                   $ 189,757
   Leverage ratio                                                                                                                         1.37                                                                                        1.46
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                               For the quarter ended                                                                                                                                                                                                                                For the six months ended
Organic Growth (6)                                                                                                                                                                   June 30,                                                                                                                                                                                                                                               June 30,
-----------------------------------------------------------------------                                           --------------------------------------------------------------------------------------------------------------------------------------                                                                                                                 --------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         2017                                                  2016                                  Growth                                                                         2017                                                  2016                                  Growth
                                                                                                                  ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- -------------------- ---------------------                                          ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- -------------------- ---------------------
   Revenues before reimbursements                                                                                                    $ 235,238                                                                                   $ 238,485                                                                      -1.4 %                                                                      $ 471,449                                                                                   $ 461,960                                                                       2.1 %
   Pro forma acquisition adjustment                                                                                                          -                                                                                       5,086                                                                                                                                                          -                                                                                      10,491
   Currency impact                                                                                                    1,581               -                                                       3,374               -        
                                                                                                                  -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------------------                                          -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ---------------------
   Organic RBR                                                                                                                       $ 236,819                                                                                   $ 243,571                                                                      -2.8 %                                                                      $ 474,823                                                                                   $ 472,451                                                                       0.5 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Footnotes                                                                                                       
----------------------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------------------------- -------------------- --------------------------------------------------
(1) Per share data may not sum due to rounding.
(2) EBITDA is earnings 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 net income and per share net
income impact of 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.
(3) Effective income tax expense (benefit) has been determined based
on specific tax jurisdiction.
(4) 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.
(5) 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.
(6) Organic growth represents revenues before reimbursements
adjusted to include the impact of our acquisitions as if we owned
them from the beginning of each comparable period and adjusted to
exclude the impact of foreign currency exchange rate fluctuations.
Management believes that organic growth reflects the growth of our
existing business and is, therefore, useful in analyzing the
Company’s financial condition and results of operations.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170731005276r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170731005276/en/

SOURCE: Navigant Consulting, Inc."> <Property FormalName="PrimaryTwitterHandle" Value="@Navigant

Navigant Investor Relations 
Jennifer Moreno Reddick, 312-573-5634 
jennifer.morenoreddick@navigant.com 
or 
Navigant Corporate Communications 
Belia Ortega, 312-583-2640 
belia.ortega@navigant.com


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