Navigant (NASDAQ:FLYR)
Historical Stock Chart
From May 2019 to May 2024
Navigant International, Inc. (Nasdaq: FLYR):
-0-
*T
Conference Call: February 9, 2006 at 11:00 a.m. EST
Dial-in number: 800/257-1927 or 303/205-0044 (International)
Replay information below.
Webcast URL: www.fulldisclosure.com
*T
Navigant International, Inc. (which does business as TQ3Navigant -
Nasdaq: FLYR), the second largest provider of corporate travel
management services in the United States based on airline tickets
sold, today reported fourth quarter and year-end operating results for
the period ended December 25, 2005, as summarized below.
-0-
*T
Summary Financial Results (In millions, except per share data)
For the Three Months Ended
-----------------------------------------------------------
December 25, 2005 December 26, 2004
-----------------------------------------------------------
Revenues $124.8 $123.0
-----------------------------------------------------------
Gross Profit Margin 40.7% 36.8%
-----------------------------------------------------------
EBITDA (1) $12.2 $10.8
-----------------------------------------------------------
Operating Income $8.0 $6.7
-----------------------------------------------------------
Operating Margin 6.4% 5.4%
-----------------------------------------------------------
Net Income $2.4 $2.1
-----------------------------------------------------------
Diluted EPS $0.15 $0.13
-----------------------------------------------------------
For the Twelve Months Ended
-----------------------------------------------------------
December 25, 2005 December 26, 2004
-----------------------------------------------------------
Revenues $492.0 $451.4
-----------------------------------------------------------
Gross Profit Margin 41.7% 41.1%
-----------------------------------------------------------
EBITDA (1) $59.3 $56.0
-----------------------------------------------------------
Operating Income $42.9 $42.8
-----------------------------------------------------------
Operating Margin 8.7% 9.5%
-----------------------------------------------------------
Net Income $16.7 $18.9
-----------------------------------------------------------
Diluted EPS $0.93 $1.06
-----------------------------------------------------------
(1) EBITDA is defined as earnings before interest, taxes, depreciation
and amortization. A reconciliation of the above EBITDA figures to
the Company's cash flow from operating activities is included in
the financial tables accompanying this release. The Company
believes EBITDA provides investors with a liquidity measurement
tool utilized by management and a helpful measure with which to
evaluate compliance with their credit agreements. The Company's
credit facility contains covenants that are based on an EBITDA
measure including covenants concerning total leverage, senior
leverage and fixed charges coverage. EBITDA is not a measure of
performance or liquidity calculated in accordance with generally
accepted accounting principles and investors should not consider
this measure in isolation or as a substitute for net income, cash
flows from operating activities or any other measure for
determining the Company's operating performance or liquidity that
is calculated in accordance with generally accepted accounting
principles.
*T
Edward S. Adams, Chairman and Chief Executive Officer, commented,
"Navigant concluded fiscal 2005 with a strong fourth quarter
performance, allowing us to meet the high-end or exceed the financial
guidance provided when we reported third quarter results. Following
the expensive and time consuming financial review that occurred
earlier in 2005, we believe our solid fourth quarter results better
reflect our long-term business model, which emphasizes high client
retention rates, strong transaction levels, new business and more
value added offerings for customers as well as prudent cost controls.
Our focus on these items led to a 12.0% increase in year-over-year
fourth quarter gross profits, a 20.0% rise in operating income, a
12.7% gain in EBITDA, and diluted EPS of $0.15 versus $0.13 in the
comparable period of 2004. Fourth quarter 2005 results reflect
approximately $0.6 million of expenses incurred for professional fees
in connection with our financial review, restatement and Nasdaq
relisting as well as costs associated with the two hurricanes in late
September."
For the 2005 fiscal year, Navigant's net revenue increased 9.0%,
to $492.0 million from $451.4 million in fiscal year 2004. Gross
profits rose 10.5% year over year, to $205.3 million in 2005. Net
income for 2005 of $16.7 million was 11.9% lower than that of 2004, as
higher interest rates and higher borrowings resulted in a 29.4 % year
over year increase in net interest expense. In addition, 2005
depreciation and amortization expense increased 24.3% over 2004 levels
primarily reflecting the 2005 acquisitions in Australia and New
Zealand. In 2005, the Company continued to generate significant levels
of EBITDA, which increased 5.9% over 2004 levels to $59.3 million.
Primarily as a result of the increase in net interest expense and the
additional levels of depreciation and amortization noted above,
diluted, earnings per share for 2005 was $0.93 compared with $1.06 in
2004.
"Reflecting the strength of the industry and Navigant's position
as an industry leader, fourth quarter corporate travel transactions
were at record levels while revenue per transaction for our corporate
travel operations was in line with prior year levels demonstrating the
trend toward pricing stabilization we are beginning to see in the
marketplace.
"We believe we are competing well with those entities offering
primarily online solutions and have recently won clients from some of
these online competitors. We also believe our ability to continue to
process record transaction levels reflects not only the robustness of
the corporate travel market, but our drive to continually elevate the
service, solutions, and value we provide our customers. Navigant's
investment in on-line offerings, employee travel compliance and
tracking programs and travel spending analysis have proven over time
to provide competitive differentiation in the marketplace as companies
embrace the value these tools bring to their travel budgets. With our
operating disciplines aimed at matching operating expenses to
transactions, online adoption and revenue, we continue to believe that
growth in the percentage of online transactions will benefit margins
as we make progress in reducing call center and on-site staffing costs
commensurate with online adoption levels.
"Looking forward, transaction levels continue to track at healthy
levels in the first quarter to date, indicating the strength of the
market and Navigant's ability to offer a broad range of travel options
and efficiencies to our clientele. In addition, industry data and
independent reports continue to project that corporate travel managers
expect high levels of travel throughout 2006.
"Internationally, subsequent to the end of 2005, TQ3 Travel
Solutions Management Holding, GmbH and Navigant International
terminated their joint venture agreement regarding the co-management
of TQ3 Travel Solutions. As reported, TQ3 Travel Solutions Management
Holding transferred its 50% stake in TQ3 Travel Solutions GmbH to
Navigant International and we are now the sole owner of TQ3 Travel
Solutions, which retains a substantial worldwide network and rights to
the TQ3 brand name and trademark.
"Financially, our focus in 2006 is to improve the levels of cash
generated by operations, as 2005 cash flows were negatively impacted
by the expense of the financial review. Throughout 2006, we expect to
use cash from operations to reduce debt.
"Finally, early in 2006, Navigant was approved for relisting on
the Nasdaq National Market. With the completion of the financial
review, relisting, and a healthy corporate travel environment, we are
excited about the opportunities that lie ahead for TQ3Navigant."
Robert C. Griffith, Navigant's Chief Financial Officer and Chief
Operating Officer added, "Navigant's solid 2005 fourth quarter results
include an increase in gross margins which approached 40.7% up from
the 36.8% gross margins recorded in the year ago period, partially
reflecting the benefit of improved productivity and a better balance
between costs and transaction levels. Operating margins, which
increased to 6.4% from 5.4%, also benefited from year-over-year
operating expense reductions, partially offset by increases in general
and administrative expenses associated with the company's acquisition
in Australia and New Zealand. General and administrative expenses were
30.9% of revenues in the 2005 fourth quarter up from 28.0% in 2004,
primarily reflecting increased healthcare costs and salary and wage
increases, as well as expenses related to the financial review.
Beginning in the second quarter of 2006, we expect investments in
account implementations to decline from 2005 levels as we implement
changes in staffing and service infrastructure associated with certain
accounts won in early 2005.
"Net interest expense increased 28.3% to $4.1 million in the 2005
fourth quarter compared with $3.2 million for comparable 2004 period.
This increase reflects increases in interest rates throughout 2005 and
higher debt levels resulting from acquisitions and earn-out payments.
We believe interest expense will increase in 2006 as a result of the
interest rate increases over the past year. However, we expect that
these increases will be partially offset by lower debt levels, as we
plan to apply cash flow generated from operations to debt reduction
throughout the year."
Mr. Griffith concluded, "Outlined in the table below are financial
guidance targets for the first quarter and full year 2006. This
guidance is based on expected continued strength in the corporate
travel market and our expectation for further, migration to our online
solutions that generate lower revenue per transaction but higher gross
margins. While first quarter 2006 transaction levels remain healthy,
overall results comparisons will be impacted by the timing of a large
incentive program that occurred in the first quarter of 2005 that will
not recur in the 2006 first quarter. We also will continue to incur
costs in the first quarter related to certain account implementations.
These implementations, and the costs associated with them, began after
the first quarter of 2005, further limiting the comparability of the
first quarters of 2006 and 2005. As highlighted below, however, we
project full year increases in revenue, net income and EBITDA as we
further improve productivity and our service infrastructure while
adding new customers. Finally, given the timing of our fiscal year
end, 2006 will include 53 weeks while 2005 had 52 weeks. The extra
week in 2006 will be the period between Christmas and New Year's eve
which is historically a very slow period for corporate travel,
transactions and revenue, though we will of course incur overhead and
salaries during this time."
-0-
*T
(In millions, except per share data)
FY
Q1 2006E Q1 2005A FY 2006E 2005A
----------------------------------------------------------------------
Revenues $122.0 - $124.5 $122.0 $500.0 - $510.0 $492.0
----------------------------------------------------------------------
Net Income $3.0 - $3.5 $4.8 $17.5 - $18.5 $16.7
----------------------------------------------------------------------
EBITDA(1) $13.0 - $14.0 $15.5 $62.0 - $63.0 $59.3
----------------------------------------------------------------------
Diluted EPS $0.17 - $0.19 $0.26 $0.98 - $1.02 $0.93
----------------------------------------------------------------------
(1) EBITDA is defined as earnings before interest, taxes, depreciation
and amortization. A reconciliation of the above EBITDA figures to
the Company's cash flow from operating activities is included in
the financial tables accompanying this release. The Company
believes EBITDA provides investors with a liquidity measurement
tool utilized by management and a helpful measure with which to
evaluate compliance with their credit agreements. The Company's
credit facility contains covenants that are based on an EBITDA
measure including covenants concerning total leverage, senior
leverage and fixed charges coverage. EBITDA is not a measure of
performance or liquidity calculated in accordance with generally
accepted accounting principles and investors should not consider
this measure in isolation or as a substitute for net income, cash
flows from operating activities or any other measure for
determining the Company's operating performance or liquidity that
is calculated in accordance with generally accepted accounting
principles.
*T
Conference Call Information - 11:00 a.m. EST, Thursday, February
9, 2006
The conference call number is 800/257-1927 or 303/205-0044
(International). Please call 10 minutes in advance to ensure that you
are connected prior to the presentation. A live Webcast of the call
will be available on www.fulldisclosure.com (requires a Windows Media
Player).
Following its completion, a replay of the call can be accessed
until February 23 by dialing 303/590-3000. The access code for the
replay is 11052301#. Replays of the Webcast will be available for 30
days at www.fulldisclosure.com.
About Navigant International, Inc.
Denver-based Navigant International, Inc., d/b/a TQ3Navigant, is a
global provider of travel management solutions that add significant
value by reducing costs, increasing management and control, and
improving travel efficiency. The Company delivers integrated travel
management solutions blending advanced technology with personalized
service and expertise. The Company currently employs approximately
5,200 Associates and has operations in approximately 1,000 locations
in 22 countries and U.S. territories.
This news release contains forward-looking statements, including
statements about the Company's financial results, high leverage of
debt to equity, transaction volumes, growth strategies and
opportunities, the integration of prior or potential future
acquisitions, migration of transactions to on-line products and
platforms, repayment of debt, potential sales and implementation of
new business, and general industry or business trends or events.
Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties. Actual events or results may differ materially from
those discussed in the forward-looking statements as a result of
various factors, including, without limitation, our significant
indebtedness and variable interest payment obligations, restrictions
in our credit facility and Term Loan on our ability to finance future
operations or capital needs, disruptions in the travel industry such
as those caused by terrorism, war, natural disasters or general
economic downturn, modification of agreements with travel vendors or
suppliers including any commissions, overrides or incentives,
competition, our ability to continue to acquire and integrate
potential future acquisitions, our ability to manage our business and
implement growth strategies, failure of technology on which we rely,
other risks described in the Company's annual report on Form 10-K for
the year ended December 26, 2004, and the risk factors detailed from
time to time in the Company's SEC reports, including the reports on
Forms 10-K and 10-Q. The forward-looking statements made herein are
only as of the date of this press release, and the Company undertakes
no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.
-0-
*T
Navigant International, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share amounts)
Three Months Ended
December 25, 2005 December 26, 2004
----------------- -----------------
Revenues $ 124,768 $ 123,024
Operating expenses 74,033 77,708
---------------- ----------------
Gross profit 50,735 45,316
General and administrative
expenses 38,553 34,503
Depreciation and amortization
expense 4,144 4,115
---------------- ----------------
Operating income 8,038 6,698
Interest expense, net and other 4,074 3,176
---------------- ----------------
Income before provision for
income taxes 3,964 3,522
Provision for income taxes 1,595 1,410
---------------- ----------------
Net income $ 2,369 $ 2,112
================ ================
EBITDA (1) $ 12,182 $ 10,813
================ ================
Net income per share:
Basic net income per share $ 0.15 $ 0.14
================ ================
Diluted net income per share $ 0.15 $ 0.13
================ ================
Weighted average shares
outstanding:
Basic 15,515 15,463
================ ================
Convertible shares 4,349 4,349
Dilutive options 206 348
---------------- ----------------
Diluted 20,070 20,160
================ ================
(1) EBITDA is defined as earnings before interest, taxes, depreciation
and amortization. A reconciliation of the above EBITDA figures to
the Company's cash flow from operating activities is included
below. The Company believes EBITDA provides investors with a
liquidity measurement tool utilized by management and a helpful
measure with which to evaluate compliance with their credit
agreements. The Company's credit facility contains covenants that
are based on an EBITDA measure including covenants concerning
total leverage, senior leverage and fixed charges coverage. EBITDA
is not a measure of performance or liquidity calculated in
accordance with generally accepted accounting principles and
investors should not consider this measure in isolation or as a
substitute for net income, cash flows from operating activities or
any other measure for determining the Company's operating
performance or liquidity that is calculated in accordance with
generally accepted accounting principles.
EBITDA Reconciliations:
Three Months Ended
December 25, December 26,
2005 2004
------------ ------------
Net cash provided by operating activities $ 15,917 $ 13,499
Adjustments to reconcile net income to net
cash
Provided by operating activities:
Depreciation and amortization (4,144) (4,115)
Income tax benefit from employee exercise
of stock options - (314)
Deferred tax provision 609 146
Change in effect of interest rate swaps (1,556) -
Changes in assets and liabilities:
Accounts receivable and other assets (9,908) (11,002)
Accounts payable and other liabilities 1,451 3,898
----------- -----------
Net income $ 2,369 $ 2,112
Add: Provision for income taxes 1,595 1,410
Add: Interest expense, net and other 4,074 3,176
Add: Depreciation and amortization expense 4,144 4,115
----------- -----------
EBITDA $ 12,182 $ 10,813
=========== ===========
Navigant International, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share amounts)
Twelve Months Ended
December 25, 2005 December 26, 2004
----------------- -----------------
Revenues $ 492,039 $ 451,365
Operating expenses 286,769 265,666
---------------- ----------------
Gross profit 205,270 185,699
General and administrative
expenses 145,949 129,683
Depreciation and amortization
expense 16,463 13,249
---------------- ----------------
Operating income 42,858 42,767
Interest expense, net and other 15,902 12,285
---------------- ----------------
Income before provision for
Income taxes 26,956 30,482
Provision for income taxes 10,295 11,569
---------------- ----------------
Net income $ 16,661 $ 18,913
================ ================
EBITDA (1) $ 59,321 $ 56,016
================ ================
Net income per share:
Basic net income per share $ 1.07 $ 1.26
================ ================
Diluted net income per share $ 0.93 $ 1.06
================ ================
Weighted average shares
outstanding:
Basic 15,507 15,049
================ ================
Convertible shares 4,349 4,349
Dilutive options 306 442
---------------- ----------------
Diluted 20,162 19,840
================ ================
(1) EBITDA is defined as earnings before interest, taxes, depreciation
and amortization. A reconciliation of the above EBITDA figures to
the Company's cash flow from operating activities is included on
the following page. The Company believes EBITDA provides investors
with a liquidity measurement tool utilized by management and a
helpful measure with which to evaluate compliance with their
credit agreements. The Company's credit facility contains
covenants that are based on an EBITDA measure including covenants
concerning total leverage, senior leverage and fixed charges
coverage. EBITDA is not a measure of performance or liquidity
calculated in accordance with generally accepted accounting
principles and investors should not consider this measure in
isolation or as a substitute for net income, cash flows from
operating activities or any other measure for determining the
Company's operating performance or liquidity that is calculated in
accordance with generally accepted accounting principles.
EBITDA Reconciliations:
Twelve Months Ended
December 25, December 26,
2005 2004
------------ ------------
Net cash provided by operating activities $ 20,319 $ 38,643
Adjustments to reconcile net income to net
cash
Provided by operating activities:
Depreciation and amortization (16,463) (13,249)
Income tax benefit from employee exercise
of stock options (47) (597)
Deferred tax provision (3,873) (3,827)
Change in effect of interest rate swaps (1,556) -
Changes in assets and liabilities:
Accounts receivable and other assets 242 (4,879)
Accounts payable and other liabilities 18,039 2,822
----------- -----------
Net income $ 16,661 $ 18,913
Add: Provision for income taxes 10,295 11,569
Add: Interest expense, net and other 15,902 12,285
Add: Depreciation and amortization expense 16,463 13,249
----------- -----------
EBITDA $ 59,321 $ 56,016
=========== ===========
*T