Recession. Realizing Value Delivering Results

Transcription

1 QUARTERLY DIALOGUE FOURTH QUARTER 2010 Business Services Business Services For Additional Information, Contact the NCA Business Services Investment Banking Team: Edward R. Casas Senior Managing Director Head of Navigant Capital Advisors 847/ Gregory Hagood Managing Director M&A Practice Area Leader 404/ Alan Mustacchi Managing Director M&A 646/ Kim Brady Managing Director Restructuring 847/ About Navigant Capital Advisors Navigant Capital Advisors is the dedicated corporate finance business unit of Navigant Consulting, Inc. (NYSE: NCI). Navigant Consulting is a specialized independent consulting firm providing financial, operational, dispute and regulatory advisory services to large companies, financial institutions, legal counsel and government agencies. We offer independent and objective advice supported by advanced technical skills, proven competence and indepth industry knowledge. Business Services Sector Overview After experiencing a period of heightened consolidation from Q through the first half of 2010, the Business Services sector experienced a slowdown in merger & acquisition activity during Q as many leading participants began digesting recent acquisitions and preparing for expected growth in Notwithstanding this pullback in M&A activity, most sectors of the Business Services universe substantially outperformed the broader indices. In particular, HR Services, Temporary Staffing and Information Services sectors were up significantly, as investors expect that the current climate of modest growth combined with longer term uncertainty would result in greater demand for outsourced HR services and staffing support. For the Fourth Quarter of 2010, the NCA Business Services Index was up 11.2%, compared to the S&P 500 which was up 9.7%. Merger & Acquisition Activity While large strategic acquisitions were noticeably absent during Q4 2010, the number of private equityled transactions increased, as private equity firms sought investment opportunities that were well positioned to benefit from an economic rebound. Among the notable transactions announced during the quarter were: Court Square Capital Partners acquisition of MailSouth, Inc., a provider of shared mail services; ABRY Partners LLC s acquisition of Comforce Corp., a leading provider of IT staffing and VMS services for $158 million; Paychex, Inc. s acquisition of SurePayroll, Inc., a provider of online payroll and benefits, for $115 million; Thomson Reuters acquisition of Pangea3 LLC, a provider of legal process outsourcing services, for $95 million; Kenexa Corp. s acquisition of Salary.com, a provider of on demand compensation and talent management solutions, for $82.5 million; and, Marlin Equity Partners acquisition of GiftCertificates.com, a provider of online marketing and incentive based gift card solutions. We expect private equity firms to become increasingly aggressive as we move into 2011, as they seek to deploy capital and take advantage of growth opportunities resulting from an economic recovery Net Increase / Decrease in U.S. Employment Temporary Help Services Q10 (in thousands) Recession Temporary Help Employees (in Thousands) 3,000 2,500 2,000 1,500 1, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Temporary Help Services Temporary Help Penetration 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Temporary Employment as a % of Total Employment RESTRUCTURING MERGERS, ACQUISITIONS & DIVESTITURES PRIVATE PLACEMENTS VALUATION Realizing Value Delivering Results Atlanta Chicago New York San Francisco Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC. Member FINRA/SIPC.

2 Business Services Industry Historical Trading Multiples & Fourth Quarter 2010 Stock Price Performance TEV / TTM EBITDA Industry Segment Dec 10 Sep 10 Jun 10 Mar 10 Business Process Outsourcing 9.3x 8.4x 7.7x 8.5x HR Services 20.0x 15.9x 10.4x 11.1x Information Services 16.2x 14.5x 12.6x 12.9x IT Consulting 12.0x 11.4x 9.5x 10.4x Professional Staffing 14.1x 12.0x 18.6x 18.7x Marketing Services 9.3x 9.6x 9.7x 14.1x Specialty Consulting 7.7x 7.8x 9.1x 11.4x BPO vs. S&P Oct 10 Nov 10 Dec 10 S&P 500 Business Process Outsourcing 120 HR Services vs. S&P Information Services vs. S&P Oct 10 Nov 10 Dec 10 S&P 500 HR Services 90 Oct 10 Nov 10 Dec 10 S&P 500 Information Services 115 IT Consulting vs. S&P Professional Staffing vs. S&P Oct 10 Nov 10 Dec 10 S&P 500 IT Consulting 80 Oct 10 Nov 10 Dec 10 S&P 500 Professional Staffing Marketing Services vs. S&P Oct 10 Nov 10 Dec 10 S&P 500 Marketing Services Specialty Consulting vs. S&P Oct 10 Nov 10 Dec 10 S&P 500 Specialty Consulting ii

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4 Table of Contents Business Services: Valuation Metrics...2 Business Services Industry Transactions...5 Distressed Market Indicators...6 Appendix...9 Notes/Subscription Form Navigant Capital Advisors, LLC. All rights reserved. Navigant Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned broker/dealer of Navigant Consulting, Inc. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See for a complete listing of private investigator licenses. NCA gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. NCA makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. (Officers, directors and employees of Navigant Consulting, Inc. and its subsidiaries may have positions in the securities of the companies discussed.) This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. NCA or its affiliates may from time to time provide investment banking or related services to these companies. Like all NCA employees, the authors of this publication receive compensation that is affected by overall firm profitability. 1

5 Business Services: Valuation Metrics Market Enterprise Enterprise Value to: Stock 52 Week % of 52 Cap Value TTM TTM Ticker Company Name P rice High Low Week High ($ mm) ($ mm) Sales EBITDA EBITDA EBITDA P/E Business Process Outsourcing APAC APAC Customer Services Inc % x 5.4x 5.6x 5.0x 6.6x CVG Convergys Corporation % 1, , x 8.7x 6.5x 5.6x NM EXLS Exlservice Holdings, Inc % x 11.6x 12.7x 10.3x 25.1x G Genpact Ltd % 3, , x 13.0x 12.6x 10.2x 26.1x GEO The GEO Group, Inc % 1, , x 13.1x 13.0x 7.9x 23.5x GSIC GSI Commerc e Inc % 1, , x 19.8x 12.4x 10.0x NM IRM Iro n Mountain Inc % 5, , x 8.4x 8.3x 8.2x NM PGI Premiere Global Services, Inc % x 6.7x 7.1x 7.6x 18.4x PRGX PRGX Global, Inc % x 8.8x 6.9x 5.2x 126.8x PRSC Providence Service Corp % x 4.5x 4.8x 5.0x 8.6x SRT StarTek, Inc % x 7.7x 11.7x 2.8x NM SYKE Sykes Enterprises, Incorporated % x 6.2x 7.2x 5.9x NM TTEC TeleTech Holdings Inc % 1, , x 6.9x 7.5x 6.9x 19.8x WNS WNS (Holdings) Ltd % x 9.1x 8.7x 8.7x NM {1} PRGX Global, Inc.. is excluded from the Price/Earnings calculation Mean 1.2x 9.3x 8.9x 7.1x 18.3x HR Services ASF Administaff Inc % x 14.3x 9.4x 7.3x 62.4x ADP Automatic Data Processing, Inc % 22, , x 10.5x 10.3x 9.7x 19.3x BBSI Barrett Business Services Inc % x 13.4x 12.1x 8.1x 25.1x KNXA Kenexa Corp % x 30.3x 15.3x 11.7x NM MWW Monster Worldwide, Inc % 3, , x 68.6x 30.1x 15.2x NM PAYX Paychex Inc % 11, , x 12.9x 12.4x 11.6x 22.7x Mean 2.4x 20.0x 12.8x 10.6x 32.4x Information Services ABCO Advisory Board Co % x 17.9x 18.2x 13.9x 40.3x SCOR comscore, Inc % x 38.2x 21.0x 14.1x NM CPRT Copart, Inc % 3, , x 9.8x 9.0x 8.2x 20.6x EXBD Corporate Executive Board Co % 1, , x 11.8x 12.0x 10.2x 30.1x CSGP CoStar Group Inc % 1, x 25.6x 23.1x 19.1x 90.1x TRAK DealerTrack Holdings, Inc % x 26.2x 15.5x 11.4x NM DNB Dun & Bradstreet Corp % 4, , x 9.8x 9.5x 8.7x 17.3x EFX Equifax Inc % 4, , x 8.6x 8.9x 8.2x 18.6x FDS FactSet Research Systems Inc % 4, , x 15.7x 14.1x 12.6x 28.7x FICO Fair Isaac Corp % , x 8.5x 7.7x 0.0x 16.5x FORR Forrester Research Inc % x 12.3x 13.4x 10.7x 36.5x IT Gartner Inc % 3, , x 19.3x 14.9x 12.2x 38.7x IHS IHS Inc % 5, , x 20.3x 15.6x 13.1x 36.7x III Information Services Group, Inc % x 6.3x 6.8x 5.8x NM INWK InnerWorkings Inc % x 17.5x 13.4x 9.8x 31.5x LQDT Liquidity Services, Inc % x 10.4x 7.6x 6.0x 31.9x MORN Morningstar Inc % 2, , x 15.2x NA NA 36.6x RBA Ritchie Bros. Auctioneers Incorporated % 2, , x 17.5x 17.1x 14.7x 32.9x Mean 3.2x 16.2x 13.4x 10.5x 33.8x 2

6 Business Services: Valuation Metrics (cont.) Market Enterprise Enterprise Value to: Stock 52 Week % of 52 Cap Value TTM TTM Ticker Company Name P rice High Low Week High ($ mm) ($ mm) Sales EBITDA EBITDA EBITDA P/E Professional Staffing SWX:ADEN Adecco S.A % 10, , x 11.1x NA NA 27.3x AHS AMN Healthcare Services Inc % x 15.1x 13.6x 8.9x NM CDI CDI Corp % x 31.2x 13.4x 9.5x NM CCRN Cross Country Healthcare, Inc % x 12.2x 13.0x 11.5x 70.5x KELY.A Kelly Services, Inc % x 10.1x 8.6x 6.4x 193.7x KFRC Kforce Inc % x 16.3x 14.1x 10.3x 36.8x MAN Manpower Inc % 5, , x 12.5x 12.5x 9.0x 43.9x ASGN On Assignment Inc % x 14.2x 12.1x 9.3x 62.7x ENXTAM:RAND Randstad Holding NV % 6, , x 15.2x NA NA 35.6x RCMT RCM Technologies Inc % x 4.2x 0.0x 0.0x 11.0x RECN Resources Connection Inc % x 26.2x 16.6x 10.7x NM RHI Robert Half International Inc % 4, , x 27.5x 25.8x 15.0x 84.9x SFN SFN Group, Inc % x 10.3x 8.9x 6.7x 87.4x TBI TrueBlue, Inc % x 15.6x 13.8x 9.7x 43.8x VOL Volcanic Metals Corp % x 0.0x NA NA NM [1] Kelly Services, Inc. is excluded from the Price/Earnings calculation Mean 0.6x 14.8x 12.7x 8.9x 50.4x Marketing Services ACXM Acxiom Corporation % 1, , x 6.7x 6.1x 5.6x 25.7x FMCN Focus Media Holding Ltd % 2, , x 17.8x 13.0x 9.9x NM HPOL Harris Interactive Inc % x 12.6x NA NA NM HHS Harte Hanks Inc % x 8.1x 8.2x 7.6x 16.0x IUS A Ishares S&P % x 0.0x 0.0x 0.0x NM VCI Valassis Communic ations Inc % 1, , x 6.9x 6.6x 5.9x 4.3x VCLK ValueClick, Inc % 1, , x 9.9x 9.1x 8.2x 17.4x VVI Viad Corp % x 12.4x 9.5x 7.4x NM Mean 1.4x 9.3x 7.5x 6.4x 15.9x 3

7 Business Services: Valuation Metrics (cont.) Market Enterprise Enterprise Value to: Stock 52 Week % of 52 Cap Value TTM TTM Ticker Company Name P rice High Low Week High ($ mm) ($ mm) Sales EBITDA EBITDA EBITDA P/E Marketing Services ACXM Acxiom Corporation % 1, , x 6.7x 6.1x 5.6x 25.7x FMCN Focus Media Holding Ltd % 2, , x 17.8x 13.0x 9.9x NM HPOL Harris Interactive Inc % x 12.6x NA NA NM HHS Harte Hanks Inc % x 8.1x 8.2x 7.6x 16.0x IUS A Ishares S&P % x 0.0x 0.0x 0.0x NM VCI Valassis Communic ations Inc % 1, , x 6.9x 6.6x 5.9x 4.3x VCLK ValueClick, Inc % 1, , x 9.9x 9.1x 8.2x 17.4x VVI Viad Corp % x 12.4x 9.5x 7.4x NM Mean 1.4x 9.3x 7.5x 6.4x 15.9x Specialty Consulting CBZ CBIZ, Inc % x 7.5x 7.1x 6.6x 12.5x CRAI CRA Internatio nal Inc % x 9.0x 8.6x 6.1x 57.6x EXPO Exponent Inc % x 9.5x 8.6x 8.3x 21.8x FCN FTI Consulting, Inc % 1, , x 7.6x NA NA 18.5x HURN Huron Consulting Group Inc % x 8.0x 8.8x 7.4x 16.6x XPRT LECG Corporation % x NM 0.0x 0.0x NM MMS MAXIMUS, Inc % 1, x 8.3x 7.4x 6.6x 17.0x NCI Navigant Consulting Inc % x 7.1x 7.3x 6.2x 16.3x HCKT The Hackett Group, Inc % x 12.6x 5.9x 4.8x 55.2x Mean 1.0x 7.7x 6.2x 5.7x 27.0x OVERALL BUSINESS SERVICES SECTOR Mean 1.7x 12.6x 10.2x 8.4x 27.4x 4

8 Business Services Industry Transactions ($ in Millions) Annnounced Date Target Buyer Target Business Description Ente r pris e Value ($) Business Process Outsourcing 12/17/2010 NaviSite Inc., Colocation Business Cologix, Inc. Colocation Business of NaviSite Inc. comprises colocation business /15/2010 TEAM Technologies, LLC TDS Telecommunications Corporation TEAM Technologies, LLC develops, builds, and operates data center facilities /01/2010 The Linc Group, Inc. ABM Industries Inc. (NYSE:ABM) The Linc Group, Inc. provides facilities management and building systems services /18/2010 Pangea3 LLC Thomson Reuters Corporation (TSX:TRI) Pangea3 LLC provides legal process outsourcing services /01/2010 The Receivable Management Services Corporation iqor, Inc. The Receivable Management Services Corporation provides business-to-business business process outsourcing. - 10/05/2010 Sourcing Services and Business Processing Outsourcing Assets Accenture LLP; Accenture Global Services Limited Ariba Inc., Sourcing Services and Business Processing Outsourcing Assets offer business process outsourcing services /01/2010 SEC COMPLIANCE INC. Surge Global Energy, Inc. (OTCBB:SRGG) SEC COMPLIANCE INC. provides document conversion and filing services. 0.6 HR Services 12/20/2010 Aliquant Corporation Tow ers Watson & Co. (NYSE:TW) Aliquant Corporation provides outsourced administration services. - 12/20/2010 ArlenGroup Inc. Alliant Insurance Services, Inc. ArlenGroup Inc. operates as an employee benefit solutions company. - 12/13/2010 Spectrum Human Resource Systems Corporation Epicor Softw are Corporation (NasdaqGS:EPIC) Spectrum Human Resource Systems Corporation provides Web-based human resources solutions /08/2010 SurePayroll, Inc. Paychex Inc. (NasdaqGS:PAYX) SurePayroll, Inc. provides online payroll, retirement, health insurance, and human resources services /04/2010 Jody Forman & Associates The Sheakley Group of Companies Jody Forman & Associates offers w orkers' compensation and unemployment cost control services. - 11/02/2010 Terra Firma Diversified Human Resources, Inc. Terra Firma provides human resource management services. - 10/12/2010 Aon Consulting, Inc. The Segal Company Aon Consulting, Inc. provides solutions for employee benefits and human consulting services. - 10/05/2010 Martin Benefits Consulting, LLC and Martin Human Resources, LLC Brown & Brown of New York Inc. Martin Human Resources, LLC offer employee benefits products and services. - Information Services 12/23/2010 Meridian Environmental Technology, Inc. Iteris, Inc. (AMEX:ITI) Meridian Environmental Technology, Inc. develops atmospheric, and earth sciences information and technology solutions /20/2010 TPN Holdings, LLC Banks.com, Inc (AMEX:BNX) TPN Holdings, LLC offers personal and business tax extensions through IRS e-file /16/2010 Belamo Corp., Flirt.com Easydate plc (AIM:EZD) Flirt.com of Belamo Corp. operates as an online dating platform /15/2010 GlobalScholar, Inc. Scantron Corporation GlobalScholar, Inc. develops products that integrate and align the resources of education, people, technology, and content /01/2010 DataStream Content Solutions, LLC The Dolan Company (NYSE:DM) DataStream Content Solutions, LLC provides data and information management solutions /15/2010 ABRAXAS CORPORATION Cubic Corporation (NYSE:CUB) ABRAXAS CORPORATION designs, develops, and delivers risk mitigation technology solutions /05/2010 MDA MindBox And Marshall & Sw ift / Boeckh And MDA Lending TPG Capital DataQuick Information Systems, Inc. provides real estate information solutions Solutions And DataQuick Information System 11/04/2010 Accertify, Inc. American Express Company (NYSE:AXP) Accertify, Inc. provides softw are solutions, tools, and strategies /25/2010 Rextag Strategies Corp. Hart Energy Publishing, LP Rextag Strategies Corp. provides mapping and graphic solutions. - 10/26/2010 Kelley Blue Book Co., Inc. AutoTrader.com, Inc. Kelley Blue Book Co., Inc. publishes automotive books, and operates an automotive information Website. - 10/25/2010 Corvisa, LLC StreetLinks National Appraisal Services, LLC Corvisa, LLC provides mortgage and appraisal management software, and business intelligence analytics solutions /27/2010 Shop to Earth Inc. Kaching Kaching, Inc. (OTCBB:KCKC) Shop to Earth Inc. operates as an online shopping portal that integrates networking and e-commerce /27/2010 Quova, Inc. NeuStar, Inc. (NYSE:NSR) Quova, Inc. provides Internet geolocation data and services to online businesses /21/2010 Advanced Sales & Marketing Corp., Annuity Intelligence Business Morningstar Inc. (NasdaqGS:MORN) Advanced Sales & Marketing Corp., Annuity Intelligence Business comprises a Web-based service helping broker-dealers, 14.1 insurers, and the financial professionals. 10/04/2010 Saban Music Group, Worldw ide Rights to Publishing Catalog Bug Music, Inc. Saban Music Group provides music publishing services. - 10/01/2010 Jupiter esources LLC EPIQ Systems, Inc. (NasdaqGS:EPIQ) Jupiter esources LLC develops software solution for the electronic monitoring and retrieval of bankruptcy data IT Consulting 12/10/2010 Touchstone Wireless LP Brightpoint North America L.P Touchstone Wireless LP provides custom IT solutions /02/2010 Everest Technology Solutions, Inc. The KEYW Holding Corporation (NasdaqGM:KEYW) Everest Technology Solutions, Inc. provides geospatial intelligence, cloud computing, cyber security, and support solutions /22/2010 MTCSC, Inc. ManTech International Corporation (NasdaqGS:MANT) MTCSC, Inc. provides engineering and systems integration services for national defense and homeland security clients /22/2010 PSI Holding Group, Inc. Zensar Technologies, Inc. PSI Holding Group, Inc. provides IT solutions /10/2010 Convergent Avtex Incorporated Convergent offers technology consulting services. - 11/08/2010 ThePlanet.com Internet Services, Inc. SoftLayer Technologies, Inc. ThePlanet.com Internet Services, Inc., doing business as The Planet, provides on demand IT infrastructure solutions. - 11/04/2010 Signature Government Solutions, LLC Global Defense Technology & Systems, Inc. Signature Government Solutions, LLC provides IT and other solutions-based professional services /02/2010 Quest Integrity Group, LLC Team Industrial Services, Inc. Quest Integrity Group, LLC provides software and technology solutions /02/2010 Sycamore.US, Inc. The KEYW Holding Corporation (NasdaqGM:KEYW) Sycamore.US, Inc., an information technology company, provides software engineering and communications solutions /01/2010 TechTeam Global Inc. Stefanini IT Solutions TechTeam Global, Inc. provides IT outsourcing and business process outsourcing (BPO) services /27/2010 Avazpour Networking Services, Inc. Technology Capital Investors Avazpour Networking Services, Inc. provides IT solutions. - 10/26/2010 NetStar-1 Holdings LLC ITSolutions, LLC NetStar-1 Holdings LLC, Information Technology Services Business offers IT services /13/2010 isec Partners, Inc. NCC Group plc. (LSE:NCC) isec Partners, Inc. provides penetration testing, secure systems development and softw are design services /13/2010 The SI Organization, Inc. Veritas Capital Enterprise Integration Group offers system engineering services, architecture, integration services, and support /11/2010 Platinum Solutions, Inc. Systems Research And Applications Corporation Platinum Solutions, Inc. designs and develops systems integration and collaborative solutions /05/2010 Global Softw are Services, Inc. Interactive Intelligence, Inc. (NasdaqGS:ININ) Global Softw are Services, Inc. designs and develops softw are solutions /04/2010 Do IT Smarter, Inc. ClearPointe, Inc. Do IT Smarter, Inc. provides managed information technology (IT) services. - 10/04/2010 Technology Associates, Incorporated Raytheon Co. (NYSE:RTN) Technology Associates, Incorporated offers enterprise softw are development and IT consulting services Professional Staffing 12/07/2010 Headway Corporate Resources, Inc., Staffing Services Business Unit Global Employment Holdings, Inc. Staffing Services Business Unit offers direct hiring and temporary corporate recruitment and staffing services. - 11/01/2010 Comforce Corp. ABRY Partners, LLC COMFORCE Corporation provides outsourced staffing management services /28/2010 Career Movement, Inc. Gravitas LLC Career Movement, Inc., an executive search and career coaching company. - 10/29/2010 DMCC Staffing, LLC And RFFG of Cleveland, LLC Triad Personnel Services, Inc. RFFG of Cleveland, LLC and DMCC Staffing, LLC provide staffing services. 4.7 Marketing Services 12/30/2010 VGTel, Inc. - VGTel, Inc. provides telemarketing campaign systems /21/2010 Powered, Inc. Dachis Corporation, Inc. Powered, Inc. provides social marketing programs. - 11/17/2010 Archrival, Inc. Dachis Corporation, Inc. Archrival, Inc. is a marketing and branding agency. - 11/17/2010 Z3 Enterprises Inc (OTCPK:BIBB) Phoenix Productions and Entertainment Group, Inc. Z3 Enterprises, Inc. engages in the multi-media publishing and marketing business /11/2010 Linkstar Corporation Silverback Network, Inc. Linkstar Corporation operates as an online product marketing company /03/2010 Level One Inc. RealPage, Inc. (NasdaqGS:RP) Level One Inc. provides outsourced contact solutions /05/2010 WMSG, Inc. Shutterfly, Inc. (NasdaqGS:SFLY) WMSG, Inc. provides marketing services /03/2010 group dca Inc. PDI, Inc. (NasdaqGM:PDII) group dca Inc. operates as a multichannel interactive digital communications agency /29/2010 MailSouth, Inc. Court Square Capital Partners Shared Mail Services - 10/29/2010 ThinLine IT Services of Georgia LLC PTS Inc. (OTCBB:PTSH) ThinLine IT Services of Georgia LLC provides IT services and interactive marketing services /19/2010 Community Alliance, Inc. Enviro Energies Holdings, Inc. Community Alliance, Inc. focuses on providing advertising and consulting services /08/2010 ValueCentric Marketing Group, Inc. Fidelity National Information Services, Inc. (NYSE:FIS) ValueCentric Marketing Group, Inc. provides transaction-based marketing services /08/2010 GiftCertificates.com Corporation Marlin Equity Partners, LLC GiftCertificates.com Corporation provides incentive based and e-commerce gift card solutions. - Specialty Consulting 12/08/2010 Total Logistic Control LLC Ryder Integrated Logistics Inc. Total Logistic Control LLC provides logistics services for manufacturing and retail industries /23/2010 CMAC, Inc. Decisionpoint Systems, Inc. (OTCBB:DNPI) CMAC, Inc., a logistics consulting and systems integration company, provides supply chain solutions /21/2010 BI Incorporated GEO Care, Inc. BI Incorporated provides agencies w ith compliance technologies, monitoring services, and evidence-based supervision and treatment programs

9 Distressed Market Indicators Business Bankruptcy Filings 18,000 16,000 14,000 12,000 10,000 8,000 6,000 Bankruptcy Reform Chapter 7 Business bankruptcy filings totaled 58,322 in the 12 month period ending September 30, 2010, down 0.7% from the 58,721 business bankruptcies filed during the previous year. 4,000 2,000 Chapter 11 0 Chapter 12/13 Source: Federal Judiciary U.S. Speculative Grade Default Rate Versus Distressed Credit Ratio According to S&P, as 2010 came to a close, the economic recovery has been progressing, albeit at a steady crawl, and credit market indicators in the U.S. appear to be slowly improving, as well. As a result, the U.S. speculative grade corporate default rate has fallen to 3.35% its lowest point in two years. Source: Standard and Poor s U.S. Distressed Debt Monitor, December 20,

10 Distribution of Standard and Poor s Distress Ratio by Industry Source: Standard and Poor s U.S. Distressed Debt Monitor, December 20, 2010 Institutional Loans That Have Defaulted During 4Q10 Issuer Industry Deal Date Default Date Bankruptcy Date Source: Standard & Poor s LCD 4Q10 Institutional Loan Default Quarterly Review Total Initial Amount Initial Institutional Amount Local Insight Yellow Pages Printing & Publishing Apr-08 Nov-10 $ 365 $ 335 American Media Printing & Publishing Jan-06 Nov-10 $ 510 $ 450 7

11 Business Services Distressed News Fourth Quarter 2010 December 29, 2010 NCO Group Inc. had its credit rating downgraded to CCC+/Negative/ from B /Negative/ : Local Currency Rating. November 25, 2010 Teranet Land Info Services, Inc. had its credit rating downgraded to BBB+/Stable/ from A+/Stable/ : Local Currency Rating. November 17, 2010 SF Partnership, LLP, gave an unqualified opinion expressing doubt that Consorteum Holdings, Inc. can continue as a going concern. November 4, 2010 Gulfstream International Group Inc. filed a voluntary petition for reorganization under Chapter 11 in the US Bankruptcy Court for the Southern District of Florida. October 27, 2010 Mayer Hoffman McCann P.C., gave an unqualified opinion expressing doubt that Competitive Technologies Inc. can continue as a going concern. October 22, 2010 Eastern Staffing, LLC had its credit rating downgraded to CCC /Negative/ from CCC/Negative/ : Local Currency Rating. October 13, 2010 Bernstein & Pinchuk LLP, gave an unqualified opinion expressing doubt that Sharp Performance, Inc. can continue as a going concern. October 13, 2010 John R. Wallace filed an involuntary petition against Jackson & Wallace LLP for liquidation under Chapter 7 in the US Bankruptcy Court for the Northern District of California, San Francisco. October 4, 2010 Malone & Bailey, PLLC, gave an unqualified opinion expressing doubt that TurkPower Corp. can continue as a going concern. 8

12 Appendix Unemployment Insurance Weekly Initial Claims 700, , , , , , ,000 0 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Source: U.S. Department of Labor 9

13 Economic and Employment Data Q Q Q Q Q Q Q Q Gross Domestic Product Growth 6.8% 4.9% 0.7% 1.6% 5.0% 3.7% 1.7% 2.6% Employment Cost Index (3 month % Change) 0.4% 0.4% 0.4% 0.4% 0.4% 0.6% 0.5% 0.4% Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Unemployment Rate 10.0% 9.7% 9.7% 9.7% 9.9% 9.7% 9.5% 9.5% 9.6% 9.6% 9.7% 9.8% 9.4% Total Nonfarm Payroll Employment (000ʹs) 129, , , , , , , , , , , , ,712 Change in Nonfarm Payroll Employment (000ʹs) (P) 103(P) Average Hourly Earnings $22.38 $22.45 $22.48 $22.48 $22.50 $22.55 $22.55 $22.59 $22.65 $22.68 $ (P) 22.78(P) Consumer Price Index (1 month % Change) 0.2% 0.2% 0.0% 0.1% 0.1% 0.2% 0.1% 0.3% 0.3% 0.1% 0.2% 0.1% 0.5% U.S. International Trade Total Exports (Billions) $143.4 $144.5 $144.4 $150.0 $147.8 $152.0 $150.1 $153.1 $153.0 $153.8 $158.4 $159.6 U.S. International Trade Total Imports (Billions) $180.5 $179.4 $184.3 $189.7 $188.5 $194.2 $200.2 $196.0 $199.9 $198.4 $196.8 $198.0 Balance on Goods and Services Trade (Billions) ($37.1) ($34.8) ($39.9) ($39.7) ($40.8) ($42.2) ($50.1) ($42.9) ($46.9) ($44.6) ($38.4) ($38.3) Major Equity Market Indices % Change From Index 12/31/ Months Ago 1 Year Ago 2 Years Ago 3 Months Ago 1 Year Ago 2 Years Ago Dow Jones Industrial 11, , , , % 11.0% 31.9% NASDAQ Composite 2, , , , % 16.9% 68.2% Russell % 25.3% 56.9% S&P 500 1, , , % 12.8% 39.2% Wilshire , , , , % 15.6% 46.2% Relative Performance (%) Dow Jones Industrial Average (^DJI) NASDAQ Composite (^COMP) Russell 2000 (^RUT) S&P 500 Index (^SPX) 80.0 Wilshire

14 Benchmark Interest Rates Interest Rate 12/31/ Year Ago Prime Rate 3.25% 3.25% 1 Month Libor 0.26% 0.23% 3 Month Libor 0.30% 0.25% 6 Month Libor 0.46% 0.43% 12 Month Libor 0.78% 0.98% 2 Year Treasury 0.59% 1.14% 10 Year Treasury 3.31% 3.84% 30 Year Treasury 4.35% 4.64% Interest Rates (% Yield) LIBOR - 3 months U.S. Treasury - 10 years Term Treasury YTM Interest Rate Spreads AA Corporate BBB Corporate BB Corporate B Corporate Spread Spread Spread Spread YTM (BPS) YTM (BPS) YTM (BPS) YTM (BPS) 3 Month 0.16% 0.62% % % % Month 0.23% 0.72% % % % Year 0.64% 1.39% % % % Year 2.03% 2.94% % % % Year 3.42% 4.33% % % % Year 4.35% 5.28% % % %

15 Notes/Subscription Form Certain industry participants were excluded from this newsletter due to a lack of trading volume, a lack of available financial information, a bankruptcy filing or a change in their business plan. Enterprise Value (EV) = Common equity value + preferred equity + debt cash & short term investments. EBITDA = Earnings before interest, taxes, depreciation and amortization. EBIT = Earnings before interest and taxes. YTM = Yield to Maturity. EV multiples are based on the book value of the companies debt and not current trading volume. The numbers presented in this report have been adjusted to exclude non recurring and extraordinary items, net of taxes. NA = Not available. Sources: Capital IQ, Bloomberg, company 10 K, 10 Q and 8 K SEC filings, annual reports and press releases. Any public companies chosen for the NCA Business Services Universe are companies commonly used for industry information to show performance within a sector. They do not include all public companies that could be categorized within the sector and were not created as benchmarks; they do not imply benchmarking and do not constitute recommendations for a particular security and/or sector. The charts and graphs used in this report have been compiled by Navigant Capital Advisors solely for purposes of illustration. Subscription Form Please add my name to the Business Services Quarterly Dialogue distribution list Please remove my name from the Business Services Quarterly Dialogue distribution list Please correct my information on the Business Services Quarterly Dialogue distribution list Name Title Company Address City, State, Zip Phone Please fax this completed form to Gia Lewis at (404)

16 Business Services Business Services For further information on our Business Services sector, please contact: Gregory Hagood, or Investment Banking» Merger, acquisition and divestiture advisory services» Transaction structuring and execution» Institutional debt and equity private placements» Corporate development services, including strategy formulation and target identification» Capital markets advisory services Contact Gregory Hagood at or Restructuring» Capital & Operating Restructuring» Distressed Asset Sales & Recapitalizations» Bankruptcy Advisory Support» Interim & Crisis Management» Creditor Rights Advisory Services Contact Edward Casas at or Valuation» Financial & Regulatory Reporting» Fairness / Solvency Opinions» Tax (IRC Section 382, 338, 280g, etc.)» Fresh Start Accounting Contact Edward Casas at or [email protected] Financial Risk Management» Credit Risk» Market Risk» Asset / Liability & Interest Rate Risk» Operations Risk Contact Edward Casas at or [email protected] About Navigant Capital Advisors Navigant Capital Advisors is the dedicated corporate finance business unit of Navigant Consulting, Inc. (NYSE: NCI). Navigant Capital Advisors serves the investment banking and private equity, restructuring and valuation needs of companies, private equity groups, lenders and other creditor constituencies. The firm arranges private placements of debt and equity, advises on mergers and acquisitions, as well as initiates divestitures for the owners of businesses across a broad range of industries. The firm also represents borrowers, secured lenders and other creditor constituencies in connection with financial and operating restructurings. Finally, we provide transactional valuations, fairness opinions and other financial reporting and compliance services to companies and their boards. Offices Atlanta, GA* Austin, TX Baltimore, MD Boston, MA Burlington, MA Chicago, IL* Dallas, TX Denver, CO Detroit, MI Fairfield, CT Hong Kong Houston, TX Irvine, CA Lawrenceville, NJ Los Angeles, CA Miami, FL Montreal, Quebec New York, NY* Ottawa, Ontario Palo Alto, CA Philadelphia, PA Phoenix, AZ Pittsburgh, PA Princeton, NJ Quebec City, Quebec Rancho Cordova, CA Sacramento, CA San Francisco, CA Seattle, WA Shanghai Singapore Skokie, IL* Tampa, FL Toronto, Ontario United Kingdom Vienna, VA Washington, DC Westbury, NY *Broker-dealer offices registered with FINRA. Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC. Member FINRA/SIPC Navigant Capital Advisors, LLC. All rights reserved. Navigant Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned broker/dealer of Navigant Consulting, Inc. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See for a complete listing of private investigator licenses. 13