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Technology Stocks : Navigant International (FLYR) -- Ignore unavailable to you. Want to Upgrade?

To: Terp who wrote (396)	1/11/1999 4:06:00 PM
From: RAVEL	Read Replies (1) \| Respond to of 725

NEWS...=Navigant Intl Eyes Acquisition Trail; Plans Debt Offer Dow Jones News Service via Dow Jones By Tom Locke DENVER (Dow Jones)--Navigant International Inc. (FLYR) plans to get back on the acquisition trail in 1999 and is hoping to do so with the help of $100 million in new financing later this quarter. The debt offering might be private or public and the Englewood, Colo., corporate travel company is talking to Salomon Smith Barney and NationsBanc Montgomery Securities Inc. about leading the offering in the first calendar quarter, Chief Executive Edward Adams told Dow Jones. "We've been assured that we can get it done." The proceeds from the offering would be used for acquisitions and would put the company back on track for its target of acquiring enough travel companies to add $25 million in revenue per quarter, Adams said. The acquisition strategy is key to Navigant's plan to grow in order to deal with the brave new world of airline cuts on commissions paid to travel companies. By becoming a bigger company, Navigant figures it can negotiate better discounts and cut costs by eliminating duplication among its acquired agencies. Already, it is the fifth-largest U.S. travel management company, with airline ticket sales of about $2 billion a year and 438 regional travel offices. But its growth is dependent on financing. And without factoring in a large first-quarter debt offering, analysts' reports last month curbed expectations on Navigant's acquisition growth. For instance, Salomon Smith Barney analyst Lisa daCosta lowered her revenue projections for Navigant's fiscal year ending April 2000 to $243 million from $291 million, based on reduced borrowing expectations. Navigant's 1998 plans to expand its bank line of credit to $150 million from $60 million were squelched by last year's third-quarter credit crunch. So daCosta dropped her expectations to acquisitions of $70 million, instead of $120 million, in annualized revenue over the next 18 months. But Adams said that if the $100 million debt offering goes through as planned, "we're back on track to do the $120 (million)." And that would put Navigant back in the range of $291 million in revenue for fiscal 2000. As for fiscal 1999, daCosta's revenue projection of $192 million is "pretty close," Chief Financial Officer Robert C. Griffith said. It compares with actual revenue in fiscal 1998 of $120 million. DaCosta's December report didn't change her earnings forecast for 2000, leaving it at $1 a share. That is because she expected lowered revenue to be balanced by lowered expenses in amortization, interest, and other areas. The First Call Corp. average earnings estimate for Navigant in fiscal 2000 is 99 cents a share. Excluding one-time items, that compares with 71 cents projected for fiscal 1999 and 48 cents realized in fiscal 1998. "We're comfortable with all the numbers that are out there, on a per share basis, through fiscal 2000," Griffith said. That includes the First Call average earnings estimate of 6 cents a share for the fiscal third quarter ending in January, he said. (MORE) DOW JONES NEWS 01-11-99

To: Terp who wrote (396)	1/11/1999 4:13:00 PM
From: RAVEL	Respond to of 725

MORE NEWS...=Navigant Interview-2: Has Shifted To 70% Prenegotiated Fees Dow Jones News Service via Dow Jones The First Call consensus estimate of 6 cents for Navigant's fiscal third quarter is lower than the year-ago quarter's pro forma results of 8 cents. But financial chief Griffith said the lower number is due to the 6 cents being calculated on 13 million shares, versus 11 million shares for the year-ago quarter. When Navigant was spun off from U.S. Office Products Co. (OFIS) last June, 11 million shares went to U.S. Office shareholders and 2 million shares went to new shareholders at $9 each. Navigant has beaten analysts' estimates the last two quarters, causing the stock to rise on the days of the earnings announcements. In general, though, the stock has consistently traded below the initial public offering price. After the IPO, the stock, quickly dropped to about 6, partially because of selling by institutions that didn't want stock in a company that was relatively small and focused on travel, not office products. Navigant hit a 52-week low of 3 11/16 in October, but it bounced back to a 52-week high of 10 1/4 on Dec. 30 after announcing late Dec. 29 that it would open a centralized Web site - Navigant.com - in the first calendar quarter of 1999. The Internet offers some leisure-travel opportunities for Navigant and cheap transaction costs for its corporate clients. Four Internet transactions can be handled for every telephone-based transaction, said Chief Executive Adams. NationsBanc Montgomery Securities analyst David Scharf said that competition from the Internet is "more of an issue on the leisure-travel side" of the business, and risks for Navigant stockholders lie more with investor concerns about commissions. "I think, in general, the industry risks continue to be the likelihood of continued pressure by the airlines, and how much commission they're willing to pay," Scharf said. Navigant has already greatly reduced those risks, having upped its travel transactions processed under prenegotiated fees to 70%, compared with 30% a year ago. That shift is one reason the commission problem isn't too worrisome to Thom Nulty, president of Associated Travel, which was acquired by Navigant in late June 1997. Plus, Nulty said, "if the commissions went to zero tomorrow," his Santa Ana, Calif., company and its Navigant parent would still fare well because their clients need them. It is less expensive for those clients to outsource the business and pay fees than it is for them to manage their travel themselves, he said. Navigant justifies its fees through a number of value-added services. It analyzes travel patterns, looks at audioconferencing and videoconferencing alternatives, creates pretrip and post-trip reports, reconciles accounts, and uses its own AQUA software for quality control and to ensure that the cheapest fares are found. Navigant plans to use AQUA on its Web site so that its advantages would be extended to all users of the site. Nulty said the acquisition by Navigant gave him "the best of both worlds" because he retains the close customer contact and local feel of his own company while gaining the resources and negotiating strength of Navigant. (MORE) DOW JONES NEWS 01-11-99