Navigant Consulting Inc. (NCI, Financial) filed Quarterly Report for the period ended 2010-09-30.
Navigant Consulting Inc. has a market cap of $464.2 million; its shares were traded at around $9.25 with a P/E ratio of 13.8 and P/S ratio of 0.7. Navigant Consulting Inc. had an annual average earning growth of 24.5% over the past 10 years.NCI is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates.
Net income for the nine months ended September 30, 2010 increased 37.0% compared to the corresponding period in 2009. Net income increased partly due to lower income tax expense (discussed above), office consolidation costs (benefit), general and administrative expense, depreciation expense, interest expense and severance cost. During the nine months ended September 30, 2009, we reduced office space in Los Angeles and vacated and relocated one of our New York offices resulting in a $6.5 million charge to other operating costs. General and administrative costs were lower in 2010 as a result of lower bad debt expense and our cost reduction efforts and efficiencies achieved through office consolidation. Bad debt expense for the nine months ended September 30, 2010 and 2009 was $7.1 million and $14.3 million, respectively. In addition, severance costs were $3.2 million and $5.9 million for the nine months ended September 30, 2010 and 2009, respectively. The higher severance costs in 2009 reflected our efforts to realign our cost structure to match the anticipated decline in revenue resulting from the impact of unprecedented economic conditions which began in 2008. We continue to evaluate our resources during 2010 in an effort to align with changing demands. As discussed above, interest expense was lower due to the expiration of an unfavorable interest rate swap in June 2010.
Cost of services before reimbursable expenses decreased 1.9% for the nine months ended September 30, 2010 compared to the corresponding period in 2009. The decrease was a result of redeployment of certain service areas and our cost-saving initiatives which included staffing reductions, managing salary adjustments and reducing discretionary costs primarily in response to lower demand. The staffing reductions reduced consultant compensation expense, mainly due to wage savings. Severance costs relating to cost of services for the nine months ended September 30, 2010 and 2009 were $3.2 million and $5.9 million, respectively. These savings were partially offset by higher incentive compensation expense for the nine months ended September 30, 2010, as a result of improved operating performance in certain markets and the impact of recent acquisitions.
General and Administrative Expenses. General and administrative expenses decreased 5.3% to $30.8 million for the three months ended September 30, 2010 compared to the corresponding period in 2009. The decrease in general and administrative expenses was the result of reduced bad debt expense, which decreased $2.9 million for the three months ended September 30, 2010 compared to the corresponding period in 2009. Average full-time equivalent employees for the three months ended September 30, 2010 and 2009 were 515 and 523, respectively. General and administrative expenses were approximately 20% of revenues before reimbursements for the three months ended September 30, 2010 and 2009.
During the three and nine months ended September 30, 2009, we recorded $1.0 million and $6.5 million, respectively for office closure-related costs. During the three months ended June 30, 2009, we vacated and relocated one of our New York offices, which resulted in a $3.6 million charge, and we reduced office space in other locations. The costs consisted of adjustments to office closure obligations and accelerated depreciation on leasehold improvements in offices to be abandoned.
Our liability for abandoned real estate included future rent obligations, net of contracted sublease and assumed sublease income. As of September 30, 2010, our liability for abandoned real estate recorded as other operating costs (benefit) was $4.9 million. In addition, we had a liability for abandoned real estate of $1.9 million which was recorded in connection with prior period acquisitions. In determining our liabilities for office consolidation costs at September 30, 2010, we estimated future sublease proceeds based on market conditions of $2.4 million on two properties for which we do not have a contracted subtenant throughout the remaining lease terms.
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Navigant Consulting Inc. has a market cap of $464.2 million; its shares were traded at around $9.25 with a P/E ratio of 13.8 and P/S ratio of 0.7. Navigant Consulting Inc. had an annual average earning growth of 24.5% over the past 10 years.NCI is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Net income for the three months ended September 30, 2010 increased 10.6% compared to the corresponding period in 2009. Net income increased due to lower income tax expense as a result of a non-recurring benefit from a tax election related to certain of its foreign entities of $1.8 million; an office consolidation benefit of $0.9 million mainly a result of reoccupying one floor of our previously vacated New York offices subsequent to our purchase of Daylight. During the three months ended September 30, 2009, we recorded $1.0 million for office closure-related costs mainly relating to reduced office space in Los Angeles. General and administrative costs were lower in the three months ended September 30, 2010, compared to the corresponding period in 2009, due to lower bad debt expense, which was adversely impacted in 2009 by the financial crisis. Bad debt expense for the three months ended September 30, 2010 and 2009 was $3.2 million and $6.1 million, respectively. Interest expense was lower due to the expiration of an unfavorable interest rate swap in June 2010. Reimbursement revenue increased 18.8% for the three months ended September 30, 2010, due to the increased use of specialty independant contractors.Net income for the nine months ended September 30, 2010 increased 37.0% compared to the corresponding period in 2009. Net income increased partly due to lower income tax expense (discussed above), office consolidation costs (benefit), general and administrative expense, depreciation expense, interest expense and severance cost. During the nine months ended September 30, 2009, we reduced office space in Los Angeles and vacated and relocated one of our New York offices resulting in a $6.5 million charge to other operating costs. General and administrative costs were lower in 2010 as a result of lower bad debt expense and our cost reduction efforts and efficiencies achieved through office consolidation. Bad debt expense for the nine months ended September 30, 2010 and 2009 was $7.1 million and $14.3 million, respectively. In addition, severance costs were $3.2 million and $5.9 million for the nine months ended September 30, 2010 and 2009, respectively. The higher severance costs in 2009 reflected our efforts to realign our cost structure to match the anticipated decline in revenue resulting from the impact of unprecedented economic conditions which began in 2008. We continue to evaluate our resources during 2010 in an effort to align with changing demands. As discussed above, interest expense was lower due to the expiration of an unfavorable interest rate swap in June 2010.
Cost of services before reimbursable expenses decreased 1.9% for the nine months ended September 30, 2010 compared to the corresponding period in 2009. The decrease was a result of redeployment of certain service areas and our cost-saving initiatives which included staffing reductions, managing salary adjustments and reducing discretionary costs primarily in response to lower demand. The staffing reductions reduced consultant compensation expense, mainly due to wage savings. Severance costs relating to cost of services for the nine months ended September 30, 2010 and 2009 were $3.2 million and $5.9 million, respectively. These savings were partially offset by higher incentive compensation expense for the nine months ended September 30, 2010, as a result of improved operating performance in certain markets and the impact of recent acquisitions.
General and Administrative Expenses. General and administrative expenses decreased 5.3% to $30.8 million for the three months ended September 30, 2010 compared to the corresponding period in 2009. The decrease in general and administrative expenses was the result of reduced bad debt expense, which decreased $2.9 million for the three months ended September 30, 2010 compared to the corresponding period in 2009. Average full-time equivalent employees for the three months ended September 30, 2010 and 2009 were 515 and 523, respectively. General and administrative expenses were approximately 20% of revenues before reimbursements for the three months ended September 30, 2010 and 2009.
During the three and nine months ended September 30, 2009, we recorded $1.0 million and $6.5 million, respectively for office closure-related costs. During the three months ended June 30, 2009, we vacated and relocated one of our New York offices, which resulted in a $3.6 million charge, and we reduced office space in other locations. The costs consisted of adjustments to office closure obligations and accelerated depreciation on leasehold improvements in offices to be abandoned.
Our liability for abandoned real estate included future rent obligations, net of contracted sublease and assumed sublease income. As of September 30, 2010, our liability for abandoned real estate recorded as other operating costs (benefit) was $4.9 million. In addition, we had a liability for abandoned real estate of $1.9 million which was recorded in connection with prior period acquisitions. In determining our liabilities for office consolidation costs at September 30, 2010, we estimated future sublease proceeds based on market conditions of $2.4 million on two properties for which we do not have a contracted subtenant throughout the remaining lease terms.
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