EXHIBIT 99.1
[Huron Consulting Group Logo]
News
FOR IMMEDIATE RELEASE
October 31, 2007
Huron Consulting Group Reports Third Quarter 2007 Financial Results
| · | Revenues of $134.1 million for Q3 2007 increased 78.3% from $75.2 million in Q3 2006. |
| · | Revenues of $368.3 million for the nine months ended September 30, 2007 increased 79.5% from $205.2 million in the same period last year. |
| · | Diluted earnings per share for Q3 2007 were $0.58 compared to $0.39 in Q3 2006. |
| · | Average number of full-time billable consultants totaled 1,048 for Q3 2007 compared to 719 for Q3 2006. Average number of full-time equivalent professionals(4) totaled 622 for Q3 2007 compared to 184 in the same period last year. |
CHICAGO - October 31, 2007 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of financial and operational consulting services, today announced financial results for the third quarter and nine months ended September 30, 2007.
"Huron continued its strong growth in the quarter, and we again proved the value of our balanced portfolio of service offerings. The strength of our Healthcare and Education Consulting and Legal Consulting businesses were excellent this quarter. We are also optimistic about the continued growth prospects for our Financial Consulting business with the acquisition of Callaway Partners this quarter and we think our Corporate Consulting business has great potential," said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group.
“We are seeing opportunities across all our businesses in what is a very large consulting marketplace. By being able to attract and retain the right people focused on delivering superior client service, Huron is well positioned for long-term growth,” added Holdren.
Third Quarter 2007 Results
Revenues of $134.1 million for the third quarter of 2007 increased 78.3% from $75.2 million for the third quarter of 2006. The Company's third quarter 2007 operating income increased 80.0% to $21.8 million compared to $12.1 million in the third quarter of 2006. Net income was $10.5 million, or $0.58 per diluted share, for the third quarter of 2007 compared to $6.8 million, or $0.39 per diluted share, for the same quarter last year. Financial results for the third quarter of 2007 and 2006 included $2.2 million and $0.4 million, respectively, of rapid amortization on intangible assets.
Third quarter 2007 earnings before interest, taxes, depreciation and amortization (“EBITDA”)(5) increased 82.6% to $28.3 million, or 21.1% of revenues, compared to $15.5 million, or 20.6% of revenues, in the comparable quarter last year. Adjusted EBITDA(5), which excludes share-based compensation expense, increased 86.0% to $33.5 million in the third quarter of 2007, or 25.0% of revenues, compared to $18.0 million, or 24.0% of revenues, in the comparable quarter last year.
The average number of full-time billable consultants increased 45.8% to 1,048 in the third quarter of 2007 compared to 719 in the same quarter last year. Huron also has a number of variable, on-demand consultants, contract reviewers and other professionals who generate revenues based on units produced, such as pages reviewed and data processed. The average number of full-time equivalent professionals(4) increased 238.0% to 622 in the third quarter of 2007 compared to 184 for the comparable period in 2006. Full-time billable consultant utilization rate was 73.9% during the third quarter of 2007 compared with 78.9% during the same period last year. Average billing rate per hour for full-time billable consultants increased 10.0% to $286 for the third quarter of 2007 from $260 for the third quarter of 2006.
Year-to-Date Results
Revenues of $368.3 million for the nine months ended September 30, 2007 increased 79.5% from $205.2 million for the same period last year. The Company's operating income increased 82.8% to $60.5 million for the nine months ended September 30, 2007 compared to $33.1 million the same period last year. Net income was $30.4 million, or $1.69 per diluted share, for the nine months ended September 30, 2007 compared to $18.7 million, or $1.08 per diluted share, for the comparable period last year. Financial results for the first nine months of 2007 and 2006 included $6.7 million and $2.1 million, respectively, of rapid amortization of intangible assets.
Year-to-date 2007 EBITDA(5) increased 93.2% to $79.8 million, or 21.7% of revenues, compared to $41.3 million, or 20.1% of revenues, in the same period last year. Adjusted EBITDA(5), which excludes share-based compensation expense and costs associated with a secondary offering of the Company's common stock in the first quarter of 2006, increased 91.5% to $94.0 million in the first nine months of 2007, or 25.5% of revenues, compared to $49.1 million, or 23.9% of revenues, in the comparable period last year.
Full-time billable consultant utilization rate was 76.5% during the first nine months of 2007 compared with 77.7% during the same period last year. Average billing rate per hour for full-time billable consultants increased 6.1% to $279 for the first nine months of 2007 from $263 in the same period last year.
New Operating Segments for 2007
Huron continues to demonstrate the success of its broad portfolio of service offerings with solid revenue growth based upon strong market demand.
In response to Huron's continued organic growth and acquisitions of complementary businesses, the Company has reorganized its practice areas and service lines, effective January 1, 2007, to better meet market demand and serve clients. Under the new organizational structure, Huron has four operating segments as follows: Financial Consulting; Legal Consulting; Health and Education Consulting; and Corporate Consulting.
Segment results are included in the attached schedules and in Huron's Form 10-Q filing for the quarter ended September 30, 2007.
Acquisitions
In January 2007, Huron acquired Wellspring Partners LTD, a leading management consulting firm specializing in integrated performance improvement services for hospitals and health systems, and Glass & Associates, Inc., a leading turnaround and restructuring firm.
In July 2007, Huron acquired Callaway Partners, LLC, an accounting and finance professional services firm. Callaway specializes in project management and staff augmentation for clients, focusing on general accounting/finance support, accounting and SEC reporting advisory services, internal audit, Sarbanes-Oxley compliance and corporate tax solutions.
Outlook for 2007
Based on currently available information, the Company expects Q4 2007 revenues before reimbursable expenses in a range of $135.0 million to $138.0 million, EBITDA in a range of $28.0 million to $29.5 million, operating income in a range of $22.5 million to $23.5 million, and between $0.61 and $0.65 in diluted earnings per share.
The Company anticipates full year 2007 revenues before reimbursable expenses in a range of $503.0 million to $506.0 million, EBITDA in a range of $107.5 million to $109.0 million, operating income in a range of $83.0 million to $84.0 million, and between $2.30 and $2.34 in diluted earnings per share.
Third Quarter 2007 Webcast
The Company will host a webcast to discuss its financial results today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). The webcast may be accessed atwww.huronconsultinggroup.com . A rebroadcast will be available approximately two hours after the end of the webcast and for 90 days thereafter.
About Huron Consulting Group
Huron Consulting Group helps clients effectively address complex challenges that arise in litigation, disputes, investigations, regulatory compliance, procurement, financial distress, and other sources of significant conflict or change. The Company also helps clients deliver superior customer and capital market performance through integrated strategic, operational, and organizational change. Huron provides services to a wide variety of both financially sound and distressed organizations, including Fortune 500 companies, medium-sized businesses, leading academic institutions, healthcare organizations, and the law firms that represent these various organizations. Learn more at www.huronconsultinggroup.com ..
Statements in this press release that are not historical in nature and concern Huron Consulting Group's current expectations about the Company's reported results for 2007 and future results in 2007 are "forward-looking" statements as defined in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” or “continue.” These forward-looking statements reflect our current expectation about our future results, levels of activity, performance or achievements, including without limitation, that our business continues to grow at the current expectations with respect to, among other factors, utilization and billing rates, number of revenue-generating professionals; that we are able to expand our service offerings; that we successfully integrate the businesses we acquire; and that existing market conditions do not change from current expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Therefore you should not place undue reliance on these forward-looking statements. Please see “Risk Factors” in our 2006 annual report on Form 10-K and in other documents we file with the Securities and Exchange Commission for a complete description of the material risks we face.
Media Contact:
Jennifer Frost Hennagir
312-880-3260
jfrost-hennagir@huronconsultinggroup.com
Investor Contact:
Gary L. Burge, Chief Financial Officer
312-583-8722
garyburge@huronconsultinggroup.com
###
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
Revenues and reimbursable expenses: | |||||||||||||
Revenues | $ | 134,051 | $ | 75,194 | $ | 368,326 | $ | 205,150 | |||||
Reimbursable expenses | 11,286 | 7,921 | 32,231 | 20,051 | |||||||||
Total revenues and reimbursable expenses | 145,337 | 83,115 | 400,557 | 225,201 | |||||||||
Direct costs and reimbursable expenses(exclusive of depreciation and amortization shown in operatingexpenses): | |||||||||||||
Direct costs | 80,237 | 42,973 | 213,648 | 116,399 | |||||||||
Intangible assets amortization | 2,208 | 467 | 6,752 | 2,183 | |||||||||
Reimbursable expenses | 11,108 | 7,907 | 32,039 | 20,240 | |||||||||
Total direct costs and reimbursable expenses | 93,553 | 51,347 | 252,439 | 138,822 | |||||||||
Operating expenses: | |||||||||||||
Selling, general and administrative | 25,675 | 16,724 | 75,108 | 47,278 | |||||||||
Depreciation and amortization | 4,283 | 2,921 | 12,502 | 5,998 | |||||||||
Total operating expenses | 29,958 | 19,645 | 87,610 | 53,276 | |||||||||
Operating income | 21,826 | 12,123 | 60,508 | 33,103 | |||||||||
Other income (expense): | |||||||||||||
Interest income (expense), net | (2,621 | ) | (404 | ) | (5,871 | ) | (365 | ) | |||||
Other income | 11 | ¾ | 136 | ¾ | |||||||||
Total other expense | (2,610 | ) | (404 | ) | (5,735 | ) | (365 | ) | |||||
Income before provision for income taxes | 19,216 | 11,719 | 54,773 | 32,738 | |||||||||
Provision for income taxes | 8,729 | 4,934 | 24,374 | 14,077 | |||||||||
Net income | $ | 10,487 | $ | 6,785 | $ | 30,399 | $ | 18,661 | |||||
| Earnings per share: | |||||||||||||
Basic | $ | 0.61 | $ | 0.41 | $ | 1.80 | $ | 1.15 | |||||
Diluted | $ | 0.58 | $ | 0.39 | $ | 1.69 | $ | 1.08 | |||||
| Weighted average shares used in calculating earnings per share: | |||||||||||||
Basic | 17,033 | 16,424 | 16,868 | 16,272 | |||||||||
Diluted | 18,137 | 17,415 | 17,967 | 17,220 | |||||||||
HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
September 30, 2007 | December 31, 2006 | ||||||
Assets | |||||||
| Current assets: | |||||||
Cash and cash equivalents | $ | 3,742 | $ | 16,572 | |||
Receivables from clients, net | 86,157 | 41,848 | |||||
Unbilled services, net | 41,116 | 22,627 | |||||
Income tax receivable | 4,097 | 3,637 | |||||
Deferred income taxes | 24,674 | 15,290 | |||||
Other current assets | 9,025 | 6,435 | |||||
Total current assets | 168,811 | 106,409 | |||||
Property and equipment, net | 33,764 | 27,742 | |||||
Deferred income taxes | 3,786 | 5,433 | |||||
Deposits and other assets | 7,503 | 2,294 | |||||
Intangible assets, net | 16,117 | 4,238 | |||||
Goodwill | 190,780 | 53,328 | |||||
Total assets | $ | 420,761 | $ | 199,444 | |||
Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
Accounts payable | $ | 3,937 | $ | 2,684 | |||
Accrued expenses | 26,011 | 12,712 | |||||
Accrued payroll and related benefits | 52,661 | 41,649 | |||||
Income tax payable | 140 | ¾ | |||||
Deferred revenues | 4,466 | 4,035 | |||||
Bank borrowings | ¾ | 8,000 | |||||
Current portion of notes payable and capital lease obligations | 1,143 | 1,282 | |||||
Total current liabilities | 88,358 | 70,362 | |||||
| Non-current liabilities: | |||||||
Deferred compensation and other liabilities | 3,145 | 1,169 | |||||
Notes payable and capital lease obligations, net of current portion | ¾ | 1,000 | |||||
Bank borrowings | 154,500 | ¾ | |||||
Deferred lease incentives | 9,934 | 10,333 | |||||
Total non-current liabilities | 167,579 | 12,502 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 19,216,491 and 18,470,623 shares issued at September 30, 2007 and December 31,2006, respectively | 182 | 178 | |||||
Treasury stock, at cost, 522,688 and 398,783 shares at September 30, 2007 and December 31, 2006, respectively | (16,094 | ) | (9,396 | ) | |||
Additional paid-in capital | 104,112 | 79,598 | |||||
Retained earnings | 76,599 | 46,200 | |||||
Accumulated other comprehensive income | 25 | ¾ | |||||
Total stockholders’ equity | 164,824 | 116,580 | |||||
Total liabilities and stockholders’ equity | $ | 420,761 | $ | 199,444 | |||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
Three Months Ended September 30, | Percent Increase (Decrease) | |||||||||
Segment and Consolidated Operating Results (in thousands): | 2007 | 2006 | ||||||||
Revenues and reimbursable expenses: | ||||||||||
Financial Consulting | $ | 39,983 | $ | 28,618 | 39.7 | % | ||||
Legal Consulting | 23,346 | 12,971 | 80.0 | % | ||||||
Health and Education Consulting | 49,767 | 21,088 | 136.0 | % | ||||||
Corporate Consulting | 20,955 | 12,517 | 67.4 | % | ||||||
Total revenues | 134,051 | 75,194 | 78.3 | % | ||||||
Total reimbursable expenses | 11,286 | 7,921 | 42.5 | % | ||||||
Total revenues and reimbursable expenses | $ | 145,337 | $ | 83,115 | 74.9 | % | ||||
Operating income: | ||||||||||
Financial Consulting | $ | 11,656 | $ | 13,033 | (10.6 | %) | ||||
Legal Consulting | 7,243 | 3,650 | 98.4 | % | ||||||
Health and Education Consulting | 18,783 | 6,592 | 184.9 | % | ||||||
Corporate Consulting | 7,036 | 4,955 | 42.0 | % | ||||||
Total segment operating income | 44,718 | 28,230 | 58.4 | % | ||||||
Operating expenses not allocated to segments | 22,892 | 16,107 | 42.1 | % | ||||||
Total operating income | $ | 21,826 | $ | 12,123 | 80.0 | % | ||||
Other Operating Data: | ||||||||||
Number of full-time billable consultants (at period end) (1): | ||||||||||
Financial Consulting | 358 | 258 | 38.8 | % | ||||||
Legal Consulting | 165 | 118 | 39.8 | % | ||||||
Health and Education Consulting | 417 | 257 | 62.3 | % | ||||||
Corporate Consulting | 218 | 131 | 66.4 | % | ||||||
Total | 1,158 | 764 | 51.6 | % | ||||||
Average number of full-time billable consultants (for the period)(1): | ||||||||||
Financial Consulting | 321 | 244 | ||||||||
Legal Consulting | 143 | 115 | ||||||||
Health and Education Consulting | 390 | 237 | ||||||||
Corporate Consulting | 194 | 123 | ||||||||
Total | 1,048 | 719 | ||||||||
Full-time billable consultant utilization rate(2): | ||||||||||
Financial Consulting | 68.7 | % | 82.9 | % | ||||||
Legal Consulting | 74.6 | % | 71.8 | % | ||||||
Health and Education Consulting | 80.2 | % | 82.3 | % | ||||||
Corporate Consulting | 69.6 | % | 71.8 | % | ||||||
Total | 73.9 | % | 78.9 | % | ||||||
Full-time billable consultant average billing rate per hour(3): | ||||||||||
Financial Consulting | $ | 276 | $ | 280 | ||||||
Legal Consulting | $ | 243 | $ | 227 | ||||||
Health and Education Consulting | $ | 292 | $ | 228 | ||||||
Corporate Consulting | $ | 315 | $ | 309 | ||||||
Total | $ | 286 | $ | 260 | ||||||
Revenue per full-time billable consultant (in thousands): | ||||||||||
Financial Consulting | $ | 86 | $ | 113 | ||||||
Legal Consulting | $ | 79 | $ | 74 | ||||||
Health and Education Consulting | $ | 110 | $ | 85 | ||||||
Corporate Consulting | $ | 106 | $ | 101 | ||||||
Total | $ | 98 | $ | 95 | ||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
Three Months Ended September 30, | Percent Increase (Decrease) | |||||||||
Other Operating Data: | 2007 | 2006 | ||||||||
Average number of full-time equivalents (for the period)(4): | ||||||||||
Financial Consulting | 210 | 10 | N/M | |||||||
Legal Consulting | 342 | 162 | 111.1 | % | ||||||
Health and Education Consulting | 65 | 10 | N/M | |||||||
Corporate Consulting | 5 | 2 | 150.0 | % | ||||||
Total | 622 | 184 | 238.0 | % | ||||||
Revenue per full-time equivalents (in thousands): | ||||||||||
Financial Consulting | $ | 59 | $ | 110 | ||||||
Legal Consulting | $ | 35 | $ | 27 | ||||||
Health and Education Consulting | $ | 104 | $ | 89 | ||||||
Corporate Consulting | $ | 76 | $ | 59 | ||||||
Total | $ | 51 | $ | 36 | ||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
Nine Months Ended September 30, | Percent Increase | |||||||||
Segment and Consolidated Operating Results (in thousands): | 2007 | 2006 | ||||||||
Revenues and reimbursable expenses: | ||||||||||
Financial Consulting | $ | 109,264 | $ | 78,648 | 38.9 | % | ||||
Legal Consulting | 69,412 | 29,740 | 133.4 | % | ||||||
Health and Education Consulting | 131,429 | 60,228 | 118.2 | % | ||||||
Corporate Consulting | 58,221 | 36,534 | 59.4 | % | ||||||
Total revenues | 368,326 | 205,150 | 79.5 | % | ||||||
Total reimbursable expenses | 32,231 | 20,051 | 60.7 | % | ||||||
Total revenues and reimbursable expenses | $ | 400,557 | $ | 225,201 | 77.9 | % | ||||
Operating income: | ||||||||||
Financial Consulting | $ | 43,112 | $ | 35,922 | 20.0 | % | ||||
Legal Consulting | 22,417 | 8,437 | 165.7 | % | ||||||
Health and Education Consulting | 45,004 | 18,315 | 145.7 | % | ||||||
Corporate Consulting | 17,152 | 13,176 | 30.2 | % | ||||||
Total segment operating income | 127,685 | 75,850 | 68.3 | % | ||||||
Operating expenses not allocated to segments | 67,177 | 42,747 | 57.2 | % | ||||||
Total operating income | $ | 60,508 | $ | 33,103 | 82.8 | % | ||||
Other Operating Data: | ||||||||||
Number of full-time billable consultants (at period end) (1): | ||||||||||
Financial Consulting | 358 | 258 | 38.8 | % | ||||||
Legal Consulting | 165 | 118 | 39.8 | % | ||||||
Health and Education Consulting | 417 | 257 | 62.3 | % | ||||||
Corporate Consulting | 218 | 131 | 66.4 | % | ||||||
Total | 1,158 | 764 | 51.6 | % | ||||||
Average number of full-time billable consultants (for the period)(1): | ||||||||||
Financial Consulting | 298 | 231 | ||||||||
Legal Consulting | 129 | 111 | ||||||||
Health and Education Consulting | 367 | 219 | ||||||||
Corporate Consulting | 182 | 113 | ||||||||
Total | 976 | 674 | ||||||||
Full-time billable consultant utilization rate(2): | ||||||||||
Financial Consulting | 75.8 | % | 80.2 | % | ||||||
Legal Consulting | 76.3 | % | 71.5 | % | ||||||
Health and Education Consulting | 79.7 | % | 80.2 | % | ||||||
Corporate Consulting | 71.6 | % | 73.9 | % | ||||||
Total | 76.5 | % | 77.7 | % | ||||||
Full-time billable consultant average billing rate per hour(3): | ||||||||||
Financial Consulting | $ | 295 | $ | 287 | ||||||
Legal Consulting | $ | 243 | $ | 230 | ||||||
Health and Education Consulting | $ | 266 | $ | 228 | ||||||
Corporate Consulting | $ | 307 | $ | 317 | ||||||
Total | $ | 279 | $ | 263 | ||||||
Revenue per full-time billable consultant (in thousands): | ||||||||||
Financial Consulting | $ | 318 | $ | 332 | ||||||
Legal Consulting | $ | 242 | $ | 226 | ||||||
Health and Education Consulting | $ | 301 | $ | 260 | ||||||
Corporate Consulting | $ | 312 | $ | 322 | ||||||
Total | $ | 301 | $ | 289 | ||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
Nine Months Ended September 30, | Percent Increase | |||||||||
Other Operating Data: | 2007 | 2006 | ||||||||
Average number of full-time equivalents (for the period)(4): | ||||||||||
Financial Consulting | 75 | 6 | N/M | |||||||
Legal Consulting | 358 | 56 | N/M | |||||||
Health and Education Consulting | 62 | 12 | 416.7 | % | ||||||
Corporate Consulting | 5 | 1 | 400.0 | % | ||||||
Total | 500 | 75 | N/M | |||||||
Revenue per full-time equivalents (in thousands): | ||||||||||
Financial Consulting | $ | 193 | $ | 332 | ||||||
Legal Consulting | $ | 107 | $ | 84 | ||||||
Health and Education Consulting | $ | 335 | $ | 268 | ||||||
Corporate Consulting | $ | 299 | $ | 171 | ||||||
Total | $ | 150 | $ | 134 | ||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
Three Months Ended | |||||||||||||||||||
Segment and Consolidated Operating Results (in thousands): | Mar. 31, 2006 | Jun. 30, 2006 | Sep. 30, 2006 | Dec. 31, 2006 | Mar. 31, 2007 | Jun. 30, 2007 | |||||||||||||
Revenues and reimbursable expenses: | |||||||||||||||||||
Financial Consulting | $ | 26,049 | $ | 23,981 | $ | 28,618 | $ | 30,572 | $ | 36,612 | $ | 32,669 | |||||||
Legal Consulting | 7,550 | 9,219 | 12,971 | 18,034 | 23,271 | 22,795 | |||||||||||||
Health and Education Consulting | 18,424 | 20,716 | 21,088 | 23,880 | 38,852 | 42,810 | |||||||||||||
Corporate Consulting | 10,164 | 13,853 | 12,517 | 10,952 | 17,274 | 19,992 | |||||||||||||
Total revenues | 62,187 | 67,769 | 75,194 | 83,438 | 116,009 | 118,266 | |||||||||||||
Total reimbursable expenses | 5,439 | 6,691 | 7,921 | 13,279 | 10,035 | 10,910 | |||||||||||||
Total revenues and reimbursable expenses | $ | 67,626 | $ | 74,460 | $ | 83,115 | $ | 96,717 | $ | 126,044 | $ | 129,176 | |||||||
Operating income: | |||||||||||||||||||
Financial Consulting | $ | 11,703 | $ | 11,186 | $ | 13,033 | $ | 14,382 | $ | 16,175 | $ | 15,281 | |||||||
Legal Consulting | 2,157 | 2,630 | 3,650 | 5,447 | 7,902 | 7,272 | |||||||||||||
Health and Education Consulting | 5,288 | 6,435 | 6,592 | 7,060 | 12,200 | 14,021 | |||||||||||||
Corporate Consulting | 3,607 | 4,614 | 4,955 | 4,640 | 4,196 | 5,920 | |||||||||||||
Total segment operating income | 22,755 | 24,865 | 28,230 | 31,529 | 40,473 | 42,494 | |||||||||||||
Operating expenses not allocated to segments | 13,082 | 13,558 | 16,107 | 17,123 | 21,558 | 22,727 | |||||||||||||
Total operating income | $ | 9,673 | $ | 11,307 | $ | 12,123 | $ | 14,406 | $ | 18,915 | $ | 19,767 | |||||||
Other Operating Data: | |||||||||||||||||||
Number of full-time billable consultants (at period end) (1): | |||||||||||||||||||
Financial Consulting | 224 | 225 | 258 | 268 | 281 | 291 | |||||||||||||
Legal Consulting | 109 | 112 | 118 | 121 | 121 | 126 | |||||||||||||
Health and Education Consulting | 207 | 220 | 257 | 274 | 352 | 355 | |||||||||||||
Corporate Consulting | 96 | 113 | 131 | 131 | 170 | 168 | |||||||||||||
Total | 636 | 670 | 764 | 794 | 924 | 940 | |||||||||||||
Average number of full-time billable consultants (for the period)(1): | |||||||||||||||||||
Financial Consulting | 223 | 223 | 244 | 260 | 280 | 288 | |||||||||||||
Legal Consulting | 103 | 110 | 115 | 120 | 121 | 122 | |||||||||||||
Health and Education Consulting | 212 | 211 | 237 | 265 | 345 | 356 | |||||||||||||
Corporate Consulting | 101 | 111 | 123 | 132 | 173 | 170 | |||||||||||||
Total | 639 | 655 | 719 | 777 | 919 | 936 | |||||||||||||
Full-time billable consultant utilization rate(2): | |||||||||||||||||||
Financial Consulting | 83.9 | % | 73.4 | % | 82.9 | % | 85.6 | % | 85.0 | % | 74.6 | % | |||||||
Legal Consulting | 67.7 | % | 74.6 | % | 71.8 | % | 72.5 | % | 75.5 | % | 79.0 | % | |||||||
Health and Education Consulting | 78.1 | % | 80.2 | % | 82.3 | % | 77.0 | % | 78.3 | % | 80.5 | % | |||||||
Corporate Consulting | 71.6 | % | 78.5 | % | 71.8 | % | 69.4 | % | 68.4 | % | 77.1 | % | |||||||
Total | 77.5 | % | 76.7 | % | 78.9 | % | 77.9 | % | 78.1 | % | 77.9 | % | |||||||
Full-time billable consultant average billing rate per hour(3): | |||||||||||||||||||
Financial Consulting | $ | 283 | $ | 299 | $ | 280 | $ | 282 | $ | 298 | 311 | ||||||||
Legal Consulting | $ | 225 | $ | 236 | $ | 227 | $ | 238 | $ | 238 | 247 | ||||||||
Health and Education Consulting | $ | 221 | $ | 236 | $ | 228 | $ | 239 | $ | 248 | 255 | ||||||||
Corporate Consulting | $ | 296 | $ | 341 | $ | 309 | $ | 280 | $ | 293 | 311 | ||||||||
Total | $ | 256 | $ | 274 | $ | 260 | $ | 261 | $ | 271 | 281 | ||||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
Three Months Ended | |||||||||||||||||||
Other Operating Data: | Mar. 31, 2006 | Jun. 30, 2006 | Sep. 30, 2006 | Dec. 31, 2006 | Mar. 31, 2007 | Jun. 30, 2007 | |||||||||||||
Revenue per full-time billable consultant (in thousands): | |||||||||||||||||||
Financial Consulting | $ | 116 | $ | 105 | $ | 113 | $ | 112 | $ | 126 | $ | 111 | |||||||
Legal Consulting | $ | 72 | $ | 83 | $ | 74 | $ | 69 | $ | 78 | $ | 85 | |||||||
Health and Education Consulting | $ | 82 | $ | 92 | $ | 85 | $ | 85 | $ | 94 | $ | 99 | |||||||
Corporate Consulting | $ | 101 | $ | 124 | $ | 101 | $ | 82 | $ | 97 | $ | 114 | |||||||
Total | $ | 95 | $ | 100 | $ | 95 | $ | 91 | $ | 102 | $ | 104 | |||||||
Average number of full-time equivalents (for the period)(4): | |||||||||||||||||||
Financial Consulting | 2 | 5 | 10 | 9 | 10 | 6 | |||||||||||||
Legal Consulting | 2 | 1 | 162 | 320 | 395 | 341 | |||||||||||||
Health and Education Consulting | 10 | 21 | 10 | 12 | 63 | 60 | |||||||||||||
Corporate Consulting | ¾ | ¾ | 2 | 2 | 5 | 6 | |||||||||||||
Total | 14 | 27 | 184 | 343 | 473 | 413 | |||||||||||||
Revenue per full-time equivalents (in thousands): | |||||||||||||||||||
Financial Consulting | $ | 113 | $ | 134 | $ | 110 | $ | 147 | $ | 147 | $ | 97 | |||||||
Legal Consulting | $ | 76 | $ | 105 | $ | 27 | $ | 31 | $ | 35 | $ | 36 | |||||||
Health and Education Consulting | $ | 98 | $ | 64 | $ | 89 | $ | 104 | $ | 103 | $ | 125 | |||||||
Corporate Consulting | $ | ¾ | $ | ¾ | $ | 59 | $ | 56 | $ | 114 | $ | 91 | |||||||
Total | $ | 98 | $ | 80 | $ | 36 | $ | 36 | $ | 47 | $ | 51 | |||||||
| (1) | Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked. |
| (2) | Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. |
| (3) | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. |
| (4) | Consists of our variable, on-demand consultants, contract reviewers and other professionals who generate revenues based on units produced, such as pages reviewed and data processed. |
| N/M | Not meaningful, change greater than 500%. |
HURON CONSULTING GROUP INC.
RECONCILIATION OF OPERATING INCOME TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION AND AMORTIZATION(5)
(in thousands)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
Revenues | $ | 134,051 | $ | 75,194 | $ | 368,326 | $ | 205,150 | |||||
Operating income | $ | 21,826 | $ | 12,123 | $ | 60,508 | $ | 33,103 | |||||
| Add back: | |||||||||||||
Depreciation and amortization | 6,491 | 3,388 | 19,254 | 8,181 | |||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA)(5) | 28,317 | 15,511 | 79,762 | 41,284 | |||||||||
| Add back: | |||||||||||||
Share-based compensation | 5,187 | 2,501 | 14,238 | 7,223 | |||||||||
Secondary offering costs | ¾ | ¾ | ¾ | 567 | |||||||||
Total adjusted items | 5,187 | 2,501 | 14,238 | 7,790 | |||||||||
Adjusted EBITDA(5) | $ | 33,504 | $ | 18,012 | $ | 94,000 | $ | 49,074 | |||||
Adjusted EBITDA as a percentage of revenues | 25.0 | % | 24.0 | % | 25.5 | % | 23.9 | % | |||||
RECONCILIATION OF NET INCOME TO NET INCOME BEFORE SECONDARY OFFERING COSTS
AND ADJUSTED NET INCOME(5)
(in thousands)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
Net income | $ | 10,487 | $ | 6,785 | $ | 30,399 | $ | 18,661 | |||||
Diluted earnings per share | $ | 0.58 | $ | 0.39 | $ | 1.69 | $ | 1.08 | |||||
Add back: Secondary offering costs, net of tax | ¾ | ¾ | ¾ | 567 | |||||||||
Net income before secondary offering costs(5) | $ | 10,487 | $ | 6,785 | $ | 30,399 | $ | 19,228 | |||||
Diluted earnings per share before secondary offering costs(5) | $ | 0.58 | $ | 0.39 | $ | 1.69 | $ | 1.12 | |||||
| Add back other adjustments: | |||||||||||||
Amortization of intangible assets | 3,791 | 1,457 | 11,447 | 3,516 | |||||||||
Share-based compensation | 5,187 | 2,501 | 14,238 | 7,223 | |||||||||
Tax effect | (3,672 | ) | (1,613 | ) | (10,505 | ) | (4,392 | ) | |||||
Total adjustments, net of tax | 5,306 | 2,345 | 15,180 | 6,347 | |||||||||
Adjusted net income(5) | $ | 15,793 | $ | 9,130 | $ | 45,579 | $ | 25,575 | |||||
Adjusted diluted earnings per share(5) | $ | 0.87 | $ | 0.52 | $ | 2.54 | $ | 1.49 | |||||
| (5) | In evaluating the Company’s financial performance, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, net income before secondary offering costs, and adjusted net income, which are non-GAAP measures. Management believes that the use of such measures, as supplements to operating income, net income and other GAAP measures, are useful indicators of the Company’s financial performance and its ability to generate cash flows from operations that are available for taxes and capital expenditures. Additionally, these measures exclude certain items to provide better comparability from period to period. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States. |