Huron Consulting Group Reports Fourth Quarter and Full Year Financial Results 2004
- Revenues of $40.8 million for Q4 2004 increased 40.7% from $29.0 million in Q4 2003.
- Earnings for the quarter were 15 cents per diluted share, compared to a loss of nine cents per diluted share in the same period last year.
- Utilization rate increased to 77.8% during Q4 2004 from 62.7% during the same period last year. Full year 2004 utilization rate increased to 72.2% from 66.1% in 2003.
- Full Year 2004 revenues increased $58.1 million, or 57.2%, to $159.6 million from $101.5 million in 2003.
CHICAGO – February 16, 2005 – Huron Consulting Group Inc. (NASDAQ: HURN) today announced its financial results for the fourth quarter and full year ended December 31, 2004.
Fourth Quarter Results
Revenues (before reimbursable expenses) of $40.8 million for the fourth quarter of 2004 increased 40.7% from $29.0 million for the fourth quarter of 2003. The Company’s fourth quarter 2004 operating income was $4.6 million compared to an operating loss of $0.7 million in the fourth quarter of 2003. Net income attributable to common stockholders was $2.4 million, or $0.15 per diluted share, for the fourth quarter of 2004 compared to a net loss of $1.0 million, or a loss of $0.09 per diluted share, for the comparable quarter last year.
“Our results for the quarter were fueled by strong demand in the marketplace for Huron’s services. The record 40 percent increase in revenue for the fourth quarter was a very solid performance, boosted by significant increases in our utilization rates,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group.
Fourth quarter 2004 earnings before interest, taxes, depreciation and amortization (“EBITDA”) (4) were $5.2 million, or 12.9% of revenues, compared to $0.4 million, or 1.5% of revenues, in the comparable quarter last year. Adjusted EBITDA (4), which excludes stock-based compensation expense, totaled $6.2 million, or 15.2% of revenues.
Both of the company’s segments – Financial Consulting and Operational Consulting – continued to record significant improvements in revenue growth. In the fourth quarter, Financial Consulting represented 58.0% of Huron’s revenues, and Operational Consulting represented 42.0%.
Selling, general and administrative (SG&A) expenses for Q4 2004 were higher than in Q3 2004 (as adjusted to exclude Q3 stock based compensation, restructuring and severance charges) primarily due to additional marketing, recruiting and public company expenses. Marketing costs included special initiatives targeted to key customer segments in an effort to build the awareness of Huron's brand and capabilities. In response to strong client demand for services, investments were also made in Q4 to retain recruiters for senior level consultant searches in our disputes and investigations, forensic accounting and discovery management practices. Public company expenses for Sarbanes-Oxley compliance, insurance, capital stock taxes and other requirements also increased in Q4 upon completion of the Company's IPO.
Billable consultant headcount totaled 483 at December 31, 2004, an increase of six from 477 at December 31, 2003 while utilization rate increased to 77.8% during the fourth quarter of 2004 from 62.7% during the same period last year. Average billing rate per hour increased $33, or 15.7%, to $243 for the fourth quarter of 2004 from $210 for the fourth quarter of 2003.
Full Year 2004 Results
Revenues (before reimbursable expenses) increased $58.1 million, or 57.2%, to $159.6 million for the year ended December 31, 2004 from $101.5 million for the same period last year.
“2004 was a milestone year for Huron, marked by our IPO and a 57 percent growth in revenue from the previous year. As an independent provider of financial and operational consulting, we have seen the marketplace respond to our brand with significant client wins this past year,” said Holdren. “We believe that we are positioned well for 2005 and beyond.”
For the year ended December 31, 2004, the Company’s operating income was $19.7 million compared to $0.2 million of operating loss in the comparable period last year. Net income attributable to common stockholders was $9.9 million, or $0.72 per diluted share, for the year ended December 31, 2004 as compared to a net loss of $2.1 million, or $0.18 per diluted share, for the comparable period last year. Year-to-date December 31, 2004 EBITDA (4) was $22.0 million, or 13.8% of revenues, compared to $5.1 million, or 5.0% of revenues, for the same period last year.
The utilization rate increased to 72.2% during 2004 from 66.1% during 2003. Average billing rate per hour increased $22, or 10.1%, to $239 for the year ended December 31, 2004 from $217 for the same period last year.
The Company previously disclosed the closing of two small, underperforming offices in Q1 2004 and the elimination of a service offering of a practice area in the Operational Consulting segment that was not meeting management’s expectations in Q3 2004. As a result, the Company recorded restructuring charges totaling $3.5 million. Additionally, the Company eliminated the positions of certain managing directors and other senior level consultants and recorded related severance charges totaling $1.8 million in Q3 2004. Adjusted EBITDA (4), which excludes these charges and stock-based compensation expense was $28.7 million, or 18.0% of revenues.
On October 13, 2004, Huron Consulting Group Inc. completed its initial public offering (IPO) and became a publicly traded company. In the IPO, the Company and a selling stockholder sold 3,333,333 and 2,416,667, respectively, shares of common stock at a price of $15.50 per share.
Fourth Quarter 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 at www.huronconsultinggroup.com and will be available for replay for 90 days.
About Huron Consulting Group Inc.
Huron Consulting Group Inc. is the parent company of Huron Consulting Services LLC, an independent provider of financial and operational consulting services. Huron’s experienced and credentialed professionals employ their expertise in accounting, finance, economics and operations 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.
Statements in this press release, which are not historical in nature and concern Huron Consulting Group’s current expectations about the company’s future results are "forward-looking" statements as defined in Section 21 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; 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, 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. Please see “Business Risk Factors” in our Form 10-K for a complete description of the material risks we face.