Huron Consulting Group Reports Second Quarter 2007 Financial Results
- Revenues of $118.3 million for Q2 2007 increased 74.5% from $67.8 million in Q2 2006.
- Diluted earnings per share for Q2 2007 were $0.56 compared to $0.36 in Q2 2006.
CHICAGO - August 7, 2007 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of financial and operational consulting services, today announced financial results for the second quarter and six months ended June 30, 2007.
"We are very pleased with the strong revenue and earnings growth posted by Huron in the quarter, as we continue to execute our broad service portfolio strategy," said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group.
"We are also very excited about our recent acquisitions of Callaway Partners and Aegis Advisers. Callaway brings an immediate scope of practice expansion to Huron. We see many opportunities to bring Callaway's senior project management skills along with its variable, on-demand workforce to the marketplace to assist Huron clients with their various financial accounting and reporting challenges. We also look forward to introducing Huron's services to Callaway's client base. Our recent acquisition of Aegis further bolsters and builds out our capabilities to serve the community hospital market," added Holdren.
Second Quarter 2007 Results
Revenues of $118.3 million for the second quarter of 2007 increased 74.5% from $67.8 million for the second quarter of 2006. The Company's second quarter 2007 operating income increased 74.8% to $19.8 million compared to $11.3 million in the second quarter of 2006. Net income was $10.1 million, or $0.56 per diluted share, for the second quarter of 2007 compared to $6.3 million, or $0.36 per diluted share, for the comparable quarter last year. Financial results for the second quarter of 2007 and 2006 included $2.3 million and $1.6 million, respectively, of rapid amortization on intangible assets.
Second quarter 2007 earnings before interest, taxes, depreciation and amortization ("EBITDA")(5) increased 80.8% to $26.2 million, or 22.2% of revenues, compared to $14.5 million, or 21.4% of revenues, in the comparable quarter last year. Adjusted EBITDA(5), which excludes share-based compensation expense, increased 83.2% to $31.1 million in the second quarter of 2007, or 26.3% of revenues, compared to $17.0 million, or 25.0% of revenues, in the comparable quarter last year.
Headcount of revenue-generating professionals increased 49.6% to 1,002 at June 30, 2007, compared to 670 at June 30, 2006. Billable consultant utilization rate was 77.9% during the second quarter of 2007 compared with 76.7% during the same period last year. Average billing rate per hour increased 2.5% to $283 for the second quarter of 2007 from $276 for the second quarter of 2006.
Revenues of $234.3 million for the first six months of 2007 increased 80.3% from $130.0 million for the first six months of 2006. The Company's six-month 2007 operating income increased 84.4% to $38.7 million compared to $21.0 million in the first half of 2006. Net income was $19.9 million, or $1.11 per diluted share, for the first six months of 2007 compared to $11.9 million, or $0.69 per diluted share, for the comparable period last year. Financial results for the first half of 2007 and 2006 included $4.5 million and $1.7 million, respectively, of rapid amortization of intangible assets.
First-half 2007 EBITDA(5) increased 99.6% to $51.4 million, or 22.0% of revenues, compared to $25.8 million, or 19.8% of revenues, in the same 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 94.8% to $60.5 million in the first half of 2007, or 25.8% of revenues, compared to $31.1 million, or 23.9% of revenues, in the comparable period last year.
Billable consultant utilization rate was 78.0% during the first six months of 2007 compared with 77.1% during the same period last year. Average billing rate per hour increased 4.1% to $277 for the first half of 2007 from $266 for the first half of 2006.
New Operating Segments for 2007
Huron continues to demonstrate the success of its broad portfolio of service offerings with solid revenue growth based upon strong market demand.
In response to Huron's continued organic growth and acquisitions of complementary businesses, the Company has reorganized its practice areas and service lines, effective January 1, 2007, to better meet market demand and serve clients. Under the new organizational structure, Huron has four operating segments as follows: Legal Financial Consulting; Legal Operational Consulting; Health and Education Consulting; and Corporate Consulting.
Segment results are included in the attached schedules and in Huron's Form 10-Q filing for the quarter ended June 30, 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 announced the acquisition of Callaway Partners, LLC, an accounting and finance professional services firm based in Atlanta, GA. Callaway specializes in project management and staff augmentation for clients, focusing on general accounting/finance support, accounting and SEC reporting advisory services, internal audit, Sarbanes-Oxley compliance and corporate tax.
Also in July 2007, Huron announced the acquisition of Aegis Advisers, Ltd., a consulting firm that is well-known in the healthcare industry for its strategic planning skills, facility planning expertise, and ability to define community demographics to develop and implement strategies that capture market share.
Outlook for 2007
Based on currently available information, the Company expects Q3 2007 revenues before reimbursable expenses in a range of $136.0 million to $141.0 million, EBITDA in a range of $26.5 million to $28.5 million, operating income in a range of $19.5 million to $21.5 million, and between $0.55 and $0.60 in diluted earnings per share.
The Company anticipates full year 2007 revenues before reimbursable expenses in a range of $510.0 million to $523.0 million, EBITDA in a range of $106.0 million to $110.0 million, operating income in a range of $79.5 million to $83.5 million, and between $2.24 and $2.37 in diluted earnings per share.
Second Quarter 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 webcast may be accessed at www.huronconsultinggroup.com. A rebroadcast 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, which 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 2007 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 2006 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.