The second-largest travel management company is seeing "a bit of an uptick" in business travel transactions, said Navigant International chairman and CEO Ed Adams today. On Friday, Denver-based Navigant said it will earn 25 to 27 cents per share for the current quarter on 11 percent to 12 percent lower year-over-year revenues.
"Even though revenue will be lower than I was looking for, profitability will be the same," said Navigant analyst David Gold of Sidoti & Co. in New York. "They're doing a fantastic job on the margins. I'm hearing April was the low point for corporate travel, so it sounds like things are starting to rebound a bit." Adams said Navigant has managed its costs by "asking employees to use up accrued time off or to take time off without pay, modifying some operations, closing or combining some offices and making more productive use of technology."
Meanwhile, Navigant will make its final payment for the Sato Travel acquisition following an arbiter's decision that Sato had lived up to its commitments as part of the original acquisition agreement
(BTN, June 11, 2001). Navigant and some former Sato owners had disagreed on whether Sato reached certain commitments relating to customer acquisition and retention, Adams said. The arbiter's ruling meant Navigant has to pay $4.9 million and $200,000 in interest, using both cash and stock, to an ownership group headed by former Sato co-chairman and CEO Larry Hough.
Also on Friday, Navigant said it would renegotiate its debt covenants to reflect lower-than-expected earnings over the past 12 months, resulting in an increase in interest rates that Gold estimated would affect "not even a penny on the bottom line."