Huron Consulting Group Reports Fourth Quarter and Full Year 2007 Financial Results
- Revenues of $136.0 million for Q4 2007 increased 63.0% from $83.4 million in Q4 2006.
- Full year 2007 revenues of $504.3 million increased 74.7% from full year 2006 revenues of $288.6 million.
- Diluted earnings per share for Q4 2007 were $0.63 compared to $0.46 in Q4 2006.
- Diluted earnings per share for the full year 2007 were $2.32 compared to $1.54 for the full year 2006.
- Average number of full-time billable consultants(1) totaled 1,199 for Q4 2007 compared to 777 for Q4 2006. Average number of full-time equivalent professionals(4) totaled 616 for Q4 2007 compared to 343 in the same period last year.
CHICAGO - February 20, 2008 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of financial and operational consulting services, today announced financial results for the fourth quarter and full year ended December 31, 2007.
"We are pleased by Huron's strong growth in 2007 and we continued to see increased demand across our service offerings. We made significant progress in continuing to build a business model that will meet the evolving needs of the marketplace. Through strategic acquisitions and organic growth, Huron was able to attract and retain top talent focused on superior client service,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group.
"We remain optimistic and excited about the demand for our services entering 2008. Our Health and Education Consulting and Legal Consulting segments were major contributors to our strong results in 2007. Our portfolio of healthcare offerings has done very well, and we expect great things in that area in 2008. Our innovative approach to the legal marketplace was significantly bolstered by the introduction of the V3locityTM e-discovery solution in early 2008. In Financial Consulting, we are providing full service solutions to the office of the CFO and their direct reports. Our complement of finance and accounting experts combined with our on-demand resources are being well received in the marketplace. Our Strategy practice is thriving, and we are prepared to meet the anticipated increase in restructuring activity this year. Huron can help clients steer through the current climate of challenge and uncertainty,” said Holdren.
Fourth Quarter 2007 Results
Revenues of $136.0 million for the fourth quarter of 2007 increased 63.0% from $83.4 million for the fourth quarter of 2006. The Company's fourth quarter 2007 operating income increased 61.3% to $23.2 million compared to $14.4 million in the fourth quarter of 2006. Net income was $11.5 million, or $0.63 per diluted share, for the fourth quarter of 2007 compared to $8.0 million, or $0.46 per diluted share, for the same period last year. Financial results for the fourth quarter of 2007 included $1.2 million of rapid amortization on intangible assets. There was no rapid amortization during the fourth quarter of 2006.
Fourth quarter 2007 earnings before interest, taxes, depreciation and amortization ("EBITDA")(5) increased 65.5% to $29.2 million, or 21.5% of revenues, compared to $17.6 million, or 21.1% of revenues, in the comparable quarter last year. Adjusted EBITDA(5), which excludes share-based compensation expense, rose 71.6% to $34.8 million, or 25.6% of revenues, compared to $20.2 million, or 24.3% of revenues, in the comparable quarter last year.
The average number of full-time billable consultants(1) increased 54.3% to 1,199 in the fourth quarter of 2007 compared to 777 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 number of hours worked and units produced, such as pages reviewed and data processed. The average number of full-time equivalent professionals(4) increased 79.6% to 616 in the fourth quarter of 2007 compared to 343 for the comparable period in 2006. Full-time billable consultant utilization rate was 69.9% during the fourth quarter of 2007 compared with 77.9% during the same period last year. Average billing rate per hour for full-time billable consultants increased 5.4% to $275 for the fourth quarter of 2007 from $261 for the fourth quarter of 2006.
Full Year 2007 Results
Revenues of $504.3 million for the full year ended December 31, 2007 increased 74.7% from $288.6 million for the full year ended December 31, 2006. The Company's operating income increased 76.3% to $83.7 million for the full year ended December 31, 2007 compared to $47.5 million for the same period last year. Net income was $41.9 million, or $2.32 per diluted share, for the full year ended December 31, 2007 compared to $26.7 million, or $1.54 per diluted share, for the comparable period last year. Financial results for the full year 2007 and 2006 included $7.9 million and $2.1 million, respectively, of rapid amortization of intangible assets.
Full year 2007 EBITDA(5) increased 84.9% to $108.9 million, or 21.6% of revenues, compared to $58.9 million, or 20.4% of revenues, in the comparable 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 85.7% to $128.8 million, or 25.5% of revenues, compared to $69.3 million, or 24.0% of revenues, in the same period last year.
Huron's full-time billable consultant utilization rate was 74.6% during the full year 2007 compared to 77.8% during the full year 2006. Average billing rate per hour for full-time billable consultants increased 5.7% to $278 for the full year 2007, up from $263 for 2006.
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: 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-K filing for the year ended December 31, 2007.
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, a professional services firm focused on providing CFO solutions. Callaway specializes in project management and staff augmentation for clients, including general accounting/finance support, accounting and SEC reporting advisory services, internal audit, Sarbanes-Oxley compliance and corporate tax solutions.
Outlook for 2008
Based on currently available information, the Company expects Q1 2008 revenues before reimbursable expenses in a range of $142 million to $147 million, EBITDA in a range of $28 million to $30 million, operating income in a range of $23 million to $25 million, and between $0.66 and $0.70 in diluted earnings per share.
The Company anticipates full year 2008 revenues before reimbursable expenses in a range of $640 million to $670 million, EBITDA in a range of $132 million to $138 million, operating income in a range of $111 million to $117 million, and between $3.10 and $3.28 in diluted earnings per share.
Share-based compensation expense of approximately $6 million and $28 million is included in the Q1 2008 and full year 2008 estimates, respectively. Weighted average diluted share counts for 2008 are estimated to be 18.4 million for Q1 2008 and 18.6 million for full year 2008.
Fourth Quarter and Full Year 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 conference call is being webcast by Thomson and can be accessed at Huron Consulting Group’s website at www.huronconsultinggroup.com/webcasts.aspx. A replay 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 2008 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 2007 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.