Tuesday August 25, 8:01 am Eastern Time
Company Press Release
SOURCE: Navigant International, Inc.
Navigant International Announces
First Quarter Results
Earnings Per Share $0.19 Before One Time Charge Versus $0.13 Per Share,
Revenues up 108 Percent Over First Quarter Fiscal 1998
DENVER, Aug. 25 /PRNewswire/ -- Navigant International, Inc. (Nasdaq: FLYR - news), one
of the largest suppliers of corporate travel services in the U.S., today reported operating results for
its first fiscal quarter ended July 25, 1998.
Revenues for the first quarter were $40.6 million, an increase of 108 percent over revenues of
$19.5 million in the first quarter of fiscal 1998. The revenue increase reflects the acquisition of eight
travel agencies from June 1997 through May 1998 that were accounted for using the purchase
method of accounting.
Operating income, before a non-cash one-time charge of $2.8 million attributed to Navigant's
spin-off from U.S. Office Products Company (''USOP''), was $4.7 million in the first quarter of
fiscal 1999, an 82 percent increase over operating income of $2.6 million in the first quarter of
fiscal 1998. Net income before the one-time charge was $2.5 million, or $0.19 per share, an
increase of 81 percent over net income of $1.4 million, or $0.13 per share, for the same period
last year.
''These results show that we have successfully met the challenge presented by the airline
commission cuts in September of 1997 and maintained revenue levels by transitioning our
customers to managed fee contracts,'' said Edward S. Adams, chairman and chief executive
officer. ''Following the initial public offering and spin-off from USOP in June, we are now
positioned to continue with our strategy of acquiring leading travel agencies in large markets,
growing our core business, and integrating the operations of the new agencies into our system.''
Navigant completed the acquisition of Arrington Travel Center, Inc., in Chicago, and Atlas Travel
Services, Ltd., in Houston on July 28, 1998 and July 24, 1998, respectively. The addition of
Arrington Travel gives the company a strong initial presence in one of the largest business travel
markets in the country. Combined with the company's other Houston-based operation,
SuperTravel, the addition of Atlas Travel makes the company the largest corporate travel agency
in Southeast Texas.
Pro forma net income for the first quarter of 1999 increased 7 percent to $3.2 million, or $0.25
per diluted share, from $3.0 million, or $0.23 per diluted share, for the first quarter of the previous
year. These numbers reflect the acquisition of Arrington Travel and Atlas Travel as if the
transactions had occurred at the beginning of the period and exclude the one-time charge
discussed above. Pro forma revenues for the first quarter of 1999 were $49.4 million compared to
$49.7 million reflecting the decrease in revenue associated with the commission cuts implemented
by the airlines in September 1997.
Pro forma EBITDA for the first quarter of 1999 increased to $8.2 million from $7.9 million in the
first quarter of the previous fiscal year.
''Our cash flow from operations remains very strong and provides ample resources to continue
our strategic acquisition strategy,'' added Robert C. Griffith, chief financial officer and treasurer.
''In addition, we are excited that the 24 hour emergency service division of Atlas Travel will
provide another cost reduction opportunity for our operating companies while bringing a very high
standard of service and efficiency to our customers.''
During fiscal 1998, Navigant operated as the corporate travel management services division of
USOP. Navigant was spun-off from USOP on June 9, 1998 as part of USOP's strategic
restructuring plan, which included the spin-off of three other USOP divisions. Additionally, on June
10, 1998, Navigant completed an initial public offering of 2 million shares of its common stock. In
the first quarter of fiscal 1999, Navigant incurred a non-recurring strategic restructuring charge of
$2.8 million as a result of USOP's purchase of stock options in connection with Navigant's spin-off
from USOP. This is recorded as a compensation charge and is a non-cash expense.
Navigant is one of the five largest providers of corporate travel management services in the United
States based on airline ticket sales. The Company currently has 408 regional travel offices and
on-site customer travel operations. The Company's shares are traded on the Nasdaq National
Market System under the symbol ''FLYR.'' For additional information, please contact Robert C.
Griffith, chief financial officer, at 303-706-0778.
Except for the historical information contained herein, this news release contains forward-looking
statements that involve risks and uncertainties, including, but not limited to, integration of prior or
potential future acquisitions, the timing of new acquisitions, the impact of competition, and general
industry or business trends or events, as well as the other risks detailed from time to time in the
Company's SEC reports, including the reports on Form S-1. Consequently, all forward-looking
statements made herein are qualified by these cautionary statements and there can be no assurance
that the actual results, events or developments referenced herein will occur or be realized.
Navigant International, Inc.
Consolidated Statement of Income
(In thousands, except per share amounts)
Three Months Ended
July 25, July 26,
1998 1997
(Unaudited) (Unaudited)
Revenues $40,578 $19,530
Operating Expenses 23,155 10,893
Gross Profit 17,423 8,637
General and administrative expenses 12,054 5,860
Amortization expense 712 212
Operating income before one-time
charges 4,657 2,565
Strategic restructuring costs 2,826 --
Operating income 1,831 2,565
Interest expense, net and other 220 49
Income before provision for
income taxes 1,611 2,516
Provision for income taxes 878 1,158
Net income $733 $1,358
EBITDA $6,169 $3,138
Net income before one-time charges $2,460 $1,358
Basic net income per share before
one-time charges $0.19 $0.13
Diluted net income per share before
one-time charges $0.19 $0.13
Basic net income per share $0.06 $0.13
Diluted net income per share $0.06 $0.13
Weighted average shares outstanding:
Basic 13,183 10,632
Diluted 13,264 10,815
Navigant International, Inc.
Consolidated Pro Forma Statement of Income
(In thousands, except per share amounts)
Pro Forma Results
Three Months Ended
July 25, July 26,
1998 1997
(Unaudited) (Unaudited)
Revenues $49,430 $49,698
Operating Expenses 28,072 28,063
Gross Profit 21,358 21,635
General and administrative expenses 14,031 14,614
Amortization expense 954 1,013
Operating income before one-time
charges 6,373 6,008
Strategic restructuring costs -- --
Operating income 6,373 6,008
Interest expense, net and other 672 672
Income before provision for
income taxes 5,701 5,336
Provision for income taxes 2,469 2,327
Net income $3,232 $3,009
EBITDA $8,237 $7,928
Basic pro forma net income per share $0.25 $0.23
Diluted pro forma net income per share $0.25 $0.23
Weighted average pro forma shares outstanding (b):
Basic 12,978 12,978
Diluted 12,997 12,997
(a) The pro forma financial information for the three month periods ended
July 25, 1998 and July 26, 1997 including the results of Navigant
International, Inc., eight operating companies acquired between June
1997 and May 1998, Arrington Travel Center, Inc. and Atlas Travel
Services, Ltd. which were all accounted for using the purchase method
of accounting, as if the acquisitions had occurred at the beginning
of the periods. Pro forma adjustments have been reflected for
contractual reductions in compensation, goodwill, interest expense
attributable to debt incurred as a result of the acquisitions, and
taxes. Additionally, the pro forma financial information excludes
the one-time charge attributable to Navigant's spin-off from U.S.
Office Products Company.
(b) Weighted average shares is calculated based upon the number of common
shares outstanding on the date that Navigant was spun-off from U.S.
Office Products Company (10,969) and giving effect to the initial
public offering as if these events had occurred at the beginning of
the periods.
SOURCE: Navigant International, Inc.
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