Huron Consulting Group Reports Financial Results for Third Quarter of 2004
- Revenues for Q3 2004 increased 45.5% from Q3 2003.
- Earnings for the quarter were six cents per share, compared to a loss of 20 cents per share in the same period last year.
- The Company consummated its IPO on October 18, with proceeds being used to redeem preferred shares, repay notes payable and for general corporate purposes.
CHICAGO – November 9, 2004 – Huron Consulting Group Inc. (NASDAQ: HURN) today announced its financial results for the third quarter ended September 30, 2004. On October 18, 2004, Huron Consulting Group Inc. consummated its initial public offering (IPO) and became a publicly traded company. The IPO resulted in a total offering of 5,750,000 shares of common stock at a price of $15.50 per share.
Third Quarter Results
Revenues (before reimbursable expenses) of $37.1 million for the third quarter of 2004 increased 45.5% from $25.5 million for the third quarter of 2003. The Company’s third quarter 2004 operating income was $2.1 million compared to an operating loss of $3.3 million in the third quarter of 2003. Net income attributable to common stockholders was $0.8 million, or $0.06 per diluted share, for the third quarter of 2004 as compared to a net loss of $2.4 million, or a loss of $0.20 per diluted share, for the comparable quarter last year.
Third quarter 2004 earnings before interest, taxes, depreciation and amortization (“EBITDA”) (1) was $2.7 million, or 7.4% of revenues, compared to losses before interest, taxes, depreciation and amortization of $1.8 million in the comparable quarter last year. During the third quarter of 2004, the Company eliminated a service offering of a practice area in the Operational Consulting segment that was not meeting management’s expectations and recorded restructuring charges of $1.3 million. Additionally, the Company eliminated the positions of certain managing directors and other senior level consultants and recorded related severance charges totaling $1.2 million. Adjusted EBITDA (1), which excludes these charges and stock-based compensation expense, totaled $5.4 million, or 14.7% of revenues.
“We are very pleased by Huron’s continued growth and evolution, evidenced by our financial performance in the quarter and for the first nine months of the year,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. “The successful completion of our IPO positions us well as we enter a new phase for Huron.”
Holdren noted that both of the Company’s segments – Financial Consulting and Operational Consulting – recorded significant improvements in revenue growth. In the third quarter, Financial Consulting represented 56.5% of Huron Consulting Group’s revenues, and Operational Consulting represented 43.5%.
Billable consultant headcount totaled 489 at September 30, 2004, an increase of 40 from 449 at September 30, 2003, while utilization rate increased to 66.3% during the third quarter of 2004 from 60.6% during the same period last year. Average billing rate per hour increased $20, or 9.3%, to $235 for the third quarter of 2004 from $215 for the third quarter of 2003.
Year-to-Date Third Quarter Results
Revenues (before reimbursable expenses) increased $46.2 million, or 63.7%, to $118.7 million for the nine months ended September 30, 2004 from $72.5 million for the same period last year. For the nine months ended September 30, 2004, the Company’s operating income was $15.1 million compared to $0.5 million of operating income generated in the comparable period last year. Net income attributable to common stockholders was $7.5 million, or $0.53 per diluted share, for the nine months ended September 30, 2004 as compared to a net loss of $1.1 million, or $0.09 per diluted share, for the comparable period last year. Year-to-date September 30, 2004 EBITDA (1) was $16.8 million, or 14.2% of revenues, compared to $4.7 million, or 6.5% of revenues, for the same period last year.
Adjusted EBITDA (1), which excludes the charges noted above in the three-month period and similar charges incurred during the first half of 2004, was $22.5 million, or 19.0% of revenues.
The utilization rate increased to 70.5% during the first nine months of 2004 from 67.6% during the same period last year. Average billing rate per hour increased $17, or 7.7%, to $237 for the nine months ended September 30, 2004 from $220 for the same period last year.
Third Quarter Conference Call
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 at www.huronconsultinggroup.com and will be available for replay for 90 days.
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, which are not historical in nature and concern Huron Consulting Group's current expectations about the company's reported results for 2006 and future results in 2006 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, 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 and number of consultants; that we are able to expand our service offerings through our existing consultants and new hires; 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, performance or achievements to be materially different from any future results, 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 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.