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. |