Huron Consulting Group Reports Second Quarter 2005 Financial Results
- Revenues of $50.5 million for Q2 2005 increased 21.7% from $41.5 million in Q2 2004.
- Earnings for the quarter were 28 cents per diluted share, compared to 32 cents per diluted share in the same period last year, reflecting a 28.6% increase in diluted shares outstanding due to the Company’s initial public offering (IPO).
- Utilization rate increased to 76.1% during Q2 2005 from 71.8% during the same period last year.
CHICAGO – August 10, 2005 – Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of financial and operational consulting services, today announced its financial results for the second quarter ended June 30, 2005.
Second Quarter Results
Revenues (before reimbursable expenses) of $50.5 million for the second quarter of 2005 increased 21.7% from $41.5 million for the second quarter of 2004. The Company also had one fewer effective business day in the second quarter due to an all-company meeting when compared to the prior year. Revenues for the second quarter of 2004 included a $1.6 million success fee as discussed in more detail below. The Company’s second quarter 2005 operating income was $8.2 million compared to $8.7 million in the second quarter of 2004. Net income attributable to common stockholders was $4.7 million, or $0.28 per diluted share, for the second quarter of 2005 compared to $4.6 million, or $0.32 per diluted share, for the comparable quarter last year. The decrease in earnings per diluted share reflects a 28.6% increase in diluted shares outstanding due to the company’s IPO.
Second quarter 2005 earnings before interest, taxes, depreciation and amortization (“EBITDA”) (6) were $9.6 million, or 19.1% of revenues, compared to $9.2 million, or 22.2% of revenues, in the comparable quarter last year. Adjusted EBITDA (6), which excludes stock-based compensation expense, restructuring and severance charges, for the second quarter of 2005 totaled $11.3 million, or 22.4% of revenues, compared to $9.8 million, or 23.7% of revenues, in the comparable quarter last year.
“Marketplace demand for our services continues to be strong, and this is reflected in our very solid second quarter results,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. “The business is doing well across service offerings. The quarter was also successful from a recruiting standpoint as we added managing directors in our Disputes and Investigations, Higher Education, Legal Business Consulting, and Strategic Sourcing practices.”
Both of the Company’s segments – Financial Consulting and Operational Consulting – continued to show strong improvements in revenue growth. In the second quarter, Financial Consulting represented 59.2% of Huron’s revenues, and Operational Consulting represented 40.8%.
On May 9, 2005, Huron acquired Speltz & Weis LLC, a specialized healthcare consulting firm. With the acquisition, Huron can provide full-service offerings to hospitals and other healthcare facilities, including interim management, organizational renewal and turnaround services, and other crisis management services. Revenues recorded for the three months ended June 30, 2005 relating to this acquisition were $3.2 million. The impact of this acquisition on EPS was $0.01 per diluted share for the period, net of amortization of intangible assets, which had an impact of $0.02 per diluted share. Results for Speltz & Weis are included in the Company’s Financial Consulting segment.
Billable consultant headcount totaled 557 at June 30, 2005 compared to 488 at June 30, 2004, while the utilization rate increased to 76.1% during the second quarter of 2005 from 71.8% during the same period last year. Average billing rate per hour increased $6, or 2.4%, to $254 for the second quarter of 2005 from $248 for the second quarter of 2004.
Revenues (before reimbursable expenses) increased $15.7 million, or 19.2%, to $97.3 million for the six months ended June 30, 2005, from $81.6 million for the same period last year. Net income attributable to common stockholders was $9.5 million, or $0.57 per diluted share, for the six months ended June 30, 2005, compared to net income of $6.7 million, or $0.47 per diluted share, for the comparable period last year.
Year-to-date June 30, 2005, EBITDA (6) was $18.7 million, or 19.2% of revenues, compared to $14.1 million, or 17.2% of revenues, for the same period last year. Adjusted EBITDA (6), which excludes stock-based compensation expense, restructuring and severance charges, for the first six months of 2005 totaled $21.8 million, or 22.4% of revenues, compared to $17.0 million, or 20.9% of revenues, in the same period last year.
Huron’s utilization rate increased to 76.3% during the first six months of 2005 from 72.6% during the same period last year. Average billing rate per hour increased 5.9% to $252 during the first six months of 2005 from $238 in the same period of 2004.
Impact of 2004 Success Fee
In the three and six months ended June 30, 2004, the Company recorded a success fee of $1.6 million related to the completion of a series of asset sales transactions managed on behalf of a single Financial Consulting segment client over a two-year period, which generated $1.3 million of operating income and had a five cents per diluted share impact for both the quarter and six months. For the three months ended June 30, 2004, this success fee had an approximately two percentage points favorable impact on EBITDA (6) and adjusted EBITDA (6) as a percentage of revenues. For the six months ended June 30, 2004, the favorable impact was one percentage point. Excluding this success fee, average billing rate per hour would have been $239 and $234 for the three and six months ended June 30, 2004, respectively.
Second 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
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.