Huron Consulting (HURN) 8-K Huron Consulting Group Reports

EXHIBIT 99.1

[Huron Consulting Group Logo]

News

FOR IMMEDIATE RELEASE

February 24, 2009

Huron Consulting Group Reports

Fourth Quarter and Full Year 2008 Financial Results

·   Revenues of $164.0 million for Q4 2008 increased 20.6% from $136.0 million in Q4 2007.

·   Full year 2008 revenues of $615.5 million increased 22.0% from full year 2007 revenues of $504.3 million.

·   Diluted earnings per share for Q4 2008 was $0.59 compared to $0.63 in Q4 2007.

·   Diluted earnings per share for the full year 2008 was $2.13 compared to $2.32 for the full year 2007.

·   Average number of full-time billable consultants(1) totaled 1,515 for Q4 2008 compared to 1,199 for Q4 2007. Average number of full-time equivalent professionals(4) totaled 804 for Q4 2008 compared to 616 in the same period last year.

CHICAGO - February 24, 2009 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business consulting services, today announced financial results for the fourth quarter and full year ended December 31, 2008.

“The current business environment has created unprecedented challenges for companies in many industries,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. “We were very pleased with the continued strength shown by our Health and Education Consulting segment and the significant demand for our services, particularly in the healthcare provider sector. This year is again shaping up to be a very good year for this segment, which now comprises more than 50 percent of Huron’s revenue.”

“However, revenues in our event-driven Legal and Accounting & Financial Consulting segments fell short of our expectations for the quarter as certain projects were either postponed or did not reach the revenue levels that were anticipated for these assignments,” continued Holdren. “Despite this, we remain cautiously optimistic that there will be meaningful demand for both of these segments in 2009 as we see a good pipeline of opportunities ahead of us.”

“Huron’s variable labor cost model and pay-for-performance compensation system along with other cost management efforts helped mitigate our fourth quarter revenue shortfalls. We believe our variable labor and pay-for-performance models give us the flexibility needed to manage through an uncertain market in 2009.”

Fourth Quarter 2008 Results

Revenues of $164.0 million for the fourth quarter of 2008 increased 20.6% from $136.0 million for the fourth quarter of 2007. The Company’s fourth quarter 2008 operating income increased 22.7% to $28.5 million compared to $23.2 million in the fourth quarter of 2007. Net income was $11.8 million, or $0.59 per diluted share, for the fourth quarter of 2008 compared to $11.5 million, or $0.63 per diluted share, for the same period last year. Financial results for the fourth quarter of 2008 included $2.8 million of rapid amortization on intangible assets compared to $1.2 million during the fourth quarter of 2007.

Fourth quarter 2008 earnings before interest, taxes, depreciation and amortization ("EBITDA")(6) increased 32.2% to $38.6 million, or 23.5% of revenues, compared to $29.2 million, or 21.5% of revenues, in the comparable quarter last year. Adjusted EBITDA(6), which excludes share-based compensation expense, rose 29.4% to $45.0 million, or 27.4% of revenues, compared to $34.8 million, or 25.6% of revenues, in the comparable quarter last year.

The average number of full-time billable consultants(1) increased 26.4% to 1,515 in the fourth quarter of 2008 compared to 1,199 in the same quarter last year. Huron also has a number of consultants who work variable schedules as needed by clients and full-time employees who provide software support and maintenance services to our clients, as well as contract reviewers and other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. The average number of these full-time equivalent professionals(4) increased 30.5% to 804 in the fourth quarter of 2008 compared to 616 for the comparable period in 2007. Full-time billable consultant utilization rate was 71.3% during the fourth quarter of 2008 compared with 69.9% during the same period last year. Average billing rate per hour for full-time billable consultants was $259 for the fourth quarter of 2008 compared to $275 for the fourth quarter of 2007.

Full Year 2008 Results

Revenues of $615.5 million for the full year ended December 31, 2008 increased 22.0% from $504.3 million for the full year ended December 31, 2007. The Company’s operating income increased 9.4% to $91.6 million for the full year ended December 31, 2008 compared to $83.7 million for the same period last year. Net income was $40.7 million, or $2.13 per diluted share, for the full year ended December 31, 2008 compared to $41.9 million, or $2.32 per diluted share, for the comparable period last year. Financial results for the full year 2008 and 2007 included $4.8 million and $7.9 million, respectively, of rapid amortization of intangible assets.

Full year 2008 EBITDA(6) increased 11.6% to $121.6 million, or 19.8% of revenues, compared to $108.9 million, or 21.6% of revenues, in the comparable period last year. Adjusted EBITDA(6), which excludes share-based compensation expense and restructuring charges, increased 17.1% to $150.7 million, or 24.5% of revenues, compared to $128.8  million, or 25.5% of revenues, in the same period last year.

Huron’s full-time billable consultant utilization rate was 68.8% during the full year 2008 compared to 74.6 % during the full year 2007. Average billing rate per hour for full-time billable consultants was $263 for the full year 2008 compared to $278 for 2007.

Operating Segments Results

Huron continues to demonstrate the success of its broad portfolio of service offerings with solid revenue growth based upon strong market demand. The Company’s operating segments are as follows: Health and Education Consulting; Accounting & Financial Consulting (previously named Financial Consulting); Legal Consulting; and Corporate Consulting. Segment results and related footnotes are included in the attached schedules and in Huron’s Form 10-K filing for the year ended December 31, 2008.

Outlook for 2009

Huron has decided that, effective with the current quarter, it will only provide a full year outlook on revenues, EBITDA, operating income and diluted earnings per share.

Based on currently available information, the Company anticipates full year 2009 revenues before reimbursable expenses in a range of $730 million to $770 million, EBITDA in a range of $162 million to $173 million, operating income in a range of $132 million to $143 million, and between $3.10 and $3.40 in diluted earnings per share.

Share-based compensation expense of approximately $30.5 million is included in the full year 2009 estimates. Weighted average diluted share counts for 2009 are estimated to be 20.7 million.

Fourth Quarter and Full Year 2008 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 conference call is being webcast by Thomson and can be accessed at Huron Consulting Group’s website at http://ir.huronconsultinggroup.com. A replay will be available approximately two hours after the conclusion of the webcast and for 90 days thereafter. 

About Huron Consulting Group

Huron Consulting Group helps clients in diverse industries improve performance, comply with complex regulations, resolve disputes, recover from distress, leverage technology, and stimulate growth. The Company teams with its clients to deliver sustainable and measurable results. Huron provides services to a wide variety of both financially sound and distressed organizations, including leading academic institutions, healthcare organizations, Fortune 500 companies, medium-sized businesses, 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, including those concerning Huron Consulting Group's current expectations about the Company's future results 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 “continues.” 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 rates, billing rates, and 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, including those in the credit markets, do not continue to deteriorate substantially. 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 anticipated 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 2008 Annual Report on Form 10-K 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

investor@huronconsultinggroup.com

###

HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

	Three months ended December 31,						Twelve months ended December 31,
	2008			2007			2008			2007
Revenues and reimbursable expenses:
Revenues	$	164,015		$	135,966		$	615,476		$	504,292
Reimbursable expenses		15,826			11,430			56,700			43,661
Total revenues and reimbursable expenses		179,841			147,396			672,176			547,953
Direct costs and reimbursable expenses (exclusive of depreciation and     amortization shown in operating expenses):
Direct costs		90,706			79,739			360,404			293,387
Intangible assets amortization		3,545			1,241			6,629			7,993
Reimbursable expenses		15,795			11,410			56,717			43,449
Total direct costs and reimbursable expenses		110,046			92,390			423,750			344,829
Operating expenses:
Selling, general and administrative		34,771			27,068			131,148			102,176
Depreciation and amortization		6,523			4,705			23,291			17,207
Restructuring charges		—			—			2,343			—
Total operating expenses		41,294			31,773			156,782			119,383
Operating income		28,501			23,233			91,644			83,741
Other income (expense):
Interest expense, net of interest income		(4,708	)		(2,392	)		(13,773	)		(8,263	)
Other income (expense)		(1,884	)		(117	)		(2,731	)		19
Total other expense		(6,592	)		(2,509	)		(16,504	)		(8,244	)
Income before provision for income taxes		21,909			20,724			75,140			75,497
Provision for income taxes		10,110			9,222			34,489			33,596
Net income	$	11,799		$	11,502		$	40,651		$	41,901
Earnings per share:
Basic	$	0.62		$	0.67		$	2.23		$	2.47
Diluted	$	0.59		$	0.63		$	2.13		$	2.32
Weighted average shares used in calculating earnings per share:
Basic		19,180			17,169			18,257			16,944
Diluted		20,074			18,228			19,082			18,033

HURON CONSULTING GROUP INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	December 31, 2008			December 31, 2007
Assets
Current assets:
Cash and cash equivalents	$	14,106		$	2,993
Receivables from clients, net		88,071			86,867
Unbilled services, net		43,111			28,245
Income tax receivable		3,496			13,492
Deferred income taxes		15,708			13,680
Prepaid expenses and other current assets		14,563			10,435
Total current assets		179,055			155,712
Property and equipment, net		44,708			38,147
Deferred income taxes		2,064			3,628
Other non-current assets		15,722			8,737
Intangible assets, net		32,372			13,936
Goodwill		505,676			223,053
Total assets	$	779,597		$	443,213
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,505		$	5,823
Accrued expenses		27,361			15,208
Accrued payroll and related benefits		48,374			58,279
Accrued consideration for business acquisitions		60,099			34,962
Income tax payable		2,086			1,342
Deferred revenues		21,208			5,278
Note payable and current portion of capital lease obligations		518			1,309
Total current liabilities		166,151			122,201
Non-current liabilities:
Deferred compensation and other liabilities		5,511			3,795
Capital lease obligations, net of current portion		204			234
Bank borrowings		280,000			123,500
Deferred lease incentives		8,705			9,699
Total non-current liabilities		294,420			137,228
Commitments and contingencies		—			—
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 21,387,679 and 19,279,176 shares issued at December 31, 2008 and 2007, respectively		202			182
Treasury stock, at cost, 404,357 and 589,755 shares at December 31, 2008 and 2007, respectively		(21,443	)		(20,703	)
Additional paid-in capital		211,464			116,148
Retained earnings		128,752			88,101
Accumulated other comprehensive income		51			56
Total stockholders’ equity		319,026			183,784
Total liabilities and stockholders’ equity	$	779,597		$	443,213

HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Twelve months ended December 31,
	2008			2007
Cash flows from operating activities:
Net income	$	40,651		$	41,901
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29,920			25,200
Share-based compensation		26,807			19,812
Allowances for doubtful accounts and unbilled services		5,477			7,306
Deferred income taxes		520			1,384
Other		—			15
Changes in operating assets and liabilities, net of businesses acquired:
Decrease (increase) in receivables from clients		6,386			(30,957	)
Increase in unbilled services		(12,380	)		(8,016	)
Decrease (increase) in current income tax receivable / payable, net		11,066			(8,512	)
Increase in other assets		(8,620	)		(7,377	)
Increase in accounts payable and accrued liabilities		5,494			4,271
Increase (decrease) in accrued payroll and related benefits		(13,051	)		13,964
Increase (decrease) in deferred revenues		8,930			(3,062	)
Net cash provided by operating activities		101,200			55,929
Cash flows from investing activities:
Purchases of property and equipment, net		(19,821	)		(18,909	)
Net investment in life insurance policies		(1,093	)		(2,245	)
Purchases of businesses, net of cash acquired		(229,947	)		(168,209	)
Net cash used in investing activities		(250,861	)		(189,363	)
Cash flows from financing activities:
Proceeds from exercise of stock options		397			562
Shares redeemed for employee tax withholdings		(6,162	)		(10,084	)
Tax benefit from share-based compensation		12,234			14,957
Proceeds from borrowings under line of credit		631,500			340,500
Repayments on line of credit		(475,000	)		(225,000	)
Principal payments of note payable and capital lease obligations		(1,432	)		(1,136	)
Net cash provided by financing activities		161,537			119,799
Effect of exchange rate changes on cash		(763	)		56
Net increase (decrease) in cash and cash equivalents		11,113			(13,579	)
Cash and cash equivalents at beginning of the period		2,993			16,572
Cash and cash equivalents at end of the period	$	14,106		$	2,993
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Issuance of common stock in connection with business combinations	$	61,320		$	—
Issuance of common stock in connection with a business combination classified as a liability	$	15,000		$	—
Capitalized lease obligations incurred	$	611		$	398
Cash paid during the year for:
Interest	$	17,065		$	7,138
Income taxes	$	9,254		$	25,475

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA

(Unaudited)

	Three Months Ended December 31,
Segment and Consolidated Operating Results (in thousands):	2008			2007			Percent Increase  (Decrease)
Revenues and reimbursable expenses:
Health and Education Consulting	$	90,073		$	50,010			80.1	%
Accounting and Financial Consulting		26,482			46,749			(43.4	)%
Legal Consulting		27,555			20,437			34.8	%
Corporate Consulting		19,905			18,770			6.0	%
Total revenues		164,015			135,966			20.6	%
Total reimbursable expenses		15,826			11,430			38.5	%
Total revenues and reimbursable expenses	$	179,841		$	147,396			22.0	%
Operating income:
Health and Education Consulting	$	41,605		$	21,285			95.5	%
Accounting and Financial Consulting		4,436			17,761			(75.0	%)
Legal Consulting		5,393			5,876			(8.2	%)
Corporate Consulting		5,113			2,809			82.0	%
Total segment operating income		56,547			47,731			18.5	%
Operating expenses not allocated to segments		28,046			24,498			14.5	%
Total operating income	$	28,501		$	23,233			22.7	%
Other Operating Data:
Number of full-time billable consultants (at period end) (1):
Health and Education Consulting		918			439			109.1	%
Accounting and Financial Consulting		306			367			(16.6	%)
Legal Consulting		163			173			(5.8	%)
Corporate Consulting		171			230			(25.7	%)
Total		1,558			1,209			28.9	%
Average number of full-time billable consultants (for the period) (1):
Health and Education Consulting		875			433
Accounting and Financial Consulting		310			368
Legal Consulting		154			171
Corporate Consulting		176			227
Total		1,515			1,199
Full-time billable consultant utilization rate (2):
Health and Education Consulting		78.6	%		78.7	%
Accounting and Financial Consulting		53.3	%		68.4	%
Legal Consulting		65.3	%		66.7	%
Corporate Consulting		70.9	%		58.1	%
Total		71.3	%		69.9	%
Full-time billable consultant average billing rate per hour (3):
Health and Education Consulting	$	250		$	283
Accounting and Financial Consulting	$	249		$	274
Legal Consulting	$	228		$	232
Corporate Consulting	$	352		$	289
Total	$	259		$	275
Revenue per full-time billable consultant (in thousands):
Health and Education Consulting	$	93		$	103
Accounting and Financial Consulting	$	62		$	83
Legal Consulting	$	66		$	65
Corporate Consulting	$	108		$	79
Total	$	85		$	87

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)

(Unaudited)

	Three Months Ended December 31,
Other Operating Data:	2008		2007		Percent Increase (Decrease)
Average number of full-time equivalents (for the period) (4):
Health and Education Consulting		100		51		96.1	%
Accounting and Financial Consulting		121		281		(56.9	%)
Legal Consulting		576		272		111.8	%
Corporate Consulting		7		12		(41.7	%)
Total		804		616		30.5	%
Revenue per full-time equivalents (in thousands):
Health and Education Consulting	$	89	$	108
Accounting and Financial Consulting	$	61	$	58
Legal Consulting	$	30	$	34
Corporate Consulting	$	116	$	76
Total	$	43	$	52

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)

(Unaudited)

	Twelve Months Ended December 31,
Segment and Consolidated Operating Results (in thousands):	2008			2007			Percent Increase (Decrease)
Revenues and reimbursable expenses:
Health and Education Consulting	$	275,510		$	181,439			51.8	%
Accounting and Financial Consulting		134,011			156,013			(14.1	%)
Legal Consulting		121,413			89,849			35.1	%
Corporate Consulting		84,542			76,991			9.8	%
Total revenues		615,476			504,292			22.0	%
Total reimbursable expenses		56,700			43,661			29.9	%
Total revenues and reimbursable expenses	$	672,176		$	547,953			22.7	%
Operating income (5):
Health and Education Consulting	$	108,784		$	66,289			64.1	%
Accounting and Financial Consulting		32,010			60,873			(47.4	%)
Legal Consulting		37,780			28,293			33.5	%
Corporate Consulting		24,426			19,961			22.4	%
Total segment operating income		203,000			175,416			15.7	%
Operating expenses not allocated to segments		111,356			91,675			21.5	%
Total operating income	$	91,644		$	83,741			9.4	%
Other Operating Data:
Number of full-time billable consultants (at period end) (1):
Health and Education Consulting		918			439			109.1	%
Accounting and Financial Consulting		306			367			(16.6	%)
Legal Consulting		163			173			(5.8	%)
Corporate Consulting		171			230			(25.7	%)
Total		1,558			1,209			28.9	%
Average number of full-time billable consultants (for the period) (1):
Health and Education Consulting		653			381
Accounting and Financial Consulting		338			315
Legal Consulting		164			139
Corporate Consulting		207			191
Total		1,362			1,026
Full-time billable consultant utilization rate (2):
Health and Education Consulting		79.7	%		79.4	%
Accounting and Financial Consulting		53.4	%		73.7	%
Legal Consulting		62.8	%		73.4	%
Corporate Consulting		64.2	%		67.7	%
Total		68.8	%		74.6	%
Full-time billable consultant average billing rate per hour (3):
Health and Education Consulting	$	251		$	271
Accounting and Financial Consulting	$	271		$	290
Legal Consulting	$	235		$	240
Corporate Consulting	$	322		$	303
Total	$	263		$	278
Revenue per full-time billable consultant (in thousands):
Health and Education Consulting	$	381		$	407
Accounting and Financial Consulting	$	267		$	398
Legal Consulting	$	269		$	305
Corporate Consulting	$	394		$	390
Total	$	341		$	387

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)

(Unaudited)

	Twelve Months Ended December 31,
Other Operating Data:	2008		2007		Percent Increase  (Decrease)
Average number of full-time equivalents (for the period) (4):
Health and Education Consulting		71		60		18.3	%
Accounting and Financial Consulting		176		125		40.8	%
Legal Consulting		583		338		72.5	%
Corporate Consulting		8		7		14.3	%
Total		838		530		58.1	%
Revenue per full-time equivalents (in thousands):
Health and Education Consulting	$	379	$	438
Accounting and Financial Consulting	$	249	$	246
Legal Consulting	$	133	$	141
Corporate Consulting	$	385	$	344
Total	$	180	$	202

(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 consultants who work variable schedules as needed by our clients, as well as contract reviewers and other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. Also includes full-time employees who provide software support and maintenance services to our clients.

(5)   Includes restructuring charges totaling $2.0 million, $0.2 million and $0.1 million for Corporate Consulting, Financial Consulting and Legal Consulting, respectively, in the twelve months ended December 31, 2008.

HURON CONSULTING GROUP INC.

RECONCILIATION OF OPERATING INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6)

(in thousands)

	Three months ended December 31,						Twelve months ended December 31,
	2008			2007			2008			2007
Revenues	$	164,015		$	135,966		$	615,476		$	504,292
Operating income	$	28,501		$	23,233		$	91,644		$	83,741
Add back:
Depreciation and amortization		10,068			5,946			29,920			25,200
Earnings before interest, taxes, depreciation and amortization (EBITDA) (6)		38,569			29,179			121,564			108,941
Add back:
Share-based compensation		6,387			5,574			26,807			19,812
Restructuring charges		—			—			2,343			—
Total adjusted items		6,387			5,574			29,150			19,812
Adjusted EBITDA (6)	$	44,956		$	34,753		$	150,714		$	128,753
Adjusted EBITDA as a percentage of revenues		27.4	%		25.6	%		24.5	%		25.5	%

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (6)

(in thousands)

	Three months ended December 31,						Twelve months ended December 31,
	2008			2007			2008			2007
Net income	$	11,799		$	11,502		$	40,651		$	41,901
Diluted earnings per share	$	0.59		$	0.63		$	2.13		$	2.32
Add back:
Amortization of intangible assets		5,622			2,881			14,264			14,328
Total adjusted items (see above)		6,387			5,574			29,150			19,812
Tax effect		(4,924	)		(3,458	)		(17,800	)		(13,963	)
Total adjustments, net of tax		7,085			4,997			25,614			20,177
Adjusted net income (6)	$	18,884		$	16,499		$	66,265		$	62,078
Adjusted diluted earnings per share (6)	$	0.94		$	0.91		$	3.47		$	3.44

(6)   In evaluating the Company’s financial performance, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, 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. 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.