Huron Consulting Group Reports Third Quarter 2007 Financial Results
- Revenues of $134.1 million for Q3 2007 increased 78.3% from $75.2 million in Q3 2006.
- Revenues of $368.3 million for the nine months ended September 30, 2007 increased 79.5% from $205.2 million in the same period last year.
- Diluted earnings per share for Q3 2007 were $0.58 compared to $0.39 in Q3 2006.
- Average number of full-time billable consultants totaled 1,048 for Q3 2007 compared to 719 for Q3 2006. Average number of full-time equivalent professionals(4) totaled 622 for Q3 2007 compared to 184 in the same period last year.
CHICAGO – October 31, 2007 – Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of financial and operational consulting services, today announced financial results for the third quarter and nine months ended September 30, 2007.
"Huron continued its strong growth in the quarter, and we again proved the value of our balanced portfolio of service offerings. The strength of our Healthcare and Education Consulting and Legal Consulting businesses were excellent this quarter. We are also optimistic about the continued growth prospects for our Financial Consulting business with the acquisition of Callaway Partners this quarter and we think our Corporate Consulting business has great potential," said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group.
“We are seeing opportunities across all our businesses in what is a very large consulting marketplace. By being able to attract and retain the right people focused on delivering superior client service, Huron is well positioned for long-term growth,” added Holdren.
Third Quarter 2007 Results
Revenues of $134.1 million for the third quarter of 2007 increased 78.3% from $75.2 million for the third quarter of 2006. The Company's third quarter 2007 operating income increased 80.0% to $21.8 million compared to $12.1 million in the third quarter of 2006. Net income was $10.5 million, or $0.58 per diluted share, for the third quarter of 2007 compared to $6.8 million, or $0.39 per diluted share, for the same quarter last year. Financial results for the third quarter of 2007 and 2006 included $2.2 million and $0.4 million, respectively, of rapid amortization on intangible assets.
Third quarter 2007 earnings before interest, taxes, depreciation and amortization (“EBITDA”)(5) increased 82.6% to $28.3 million, or 21.1% of revenues, compared to $15.5 million, or 20.6% of revenues, in the comparable quarter last year. Adjusted EBITDA(5), which excludes share-based compensation expense, increased 86.0% to $33.5 million in the third quarter of 2007, or 25.0% of revenues, compared to $18.0 million, or 24.0% of revenues, in the comparable quarter last year.
The average number of full-time billable consultants increased 45.8% to 1,048 in the third quarter of 2007 compared to 719 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 units produced, such as pages reviewed and data processed. The average number of full-time equivalent professionals(4) increased 238.0% to 622 in the third quarter of 2007 compared to 184 for the comparable period in 2006. Full-time billable consultant utilization rate was 73.9% during the third quarter of 2007 compared with 78.9% during the same period last year. Average billing rate per hour for full-time billable consultants increased 10.0% to $286 for the third quarter of 2007 from $260 for the third quarter of 2006.
Revenues of $368.3 million for the nine months ended September 30, 2007 increased 79.5% from $205.2 million for the same period last year. The Company's operating income increased 82.8% to $60.5 million for the nine months ended September 30, 2007 compared to $33.1 million the same period last year. Net income was $30.4 million, or $1.69 per diluted share, for the nine months ended September 30, 2007 compared to $18.7 million, or $1.08 per diluted share, for the comparable period last year. Financial results for the first nine months of 2007 and 2006 included $6.7 million and $2.1 million, respectively, of rapid amortization of intangible assets.
Year-to-date 2007 EBITDA(5) increased 93.2% to $79.8 million, or 21.7% of revenues, compared to $41.3 million, or 20.1% 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 91.5% to $94.0 million in the first nine months of 2007, or 25.5% of revenues, compared to $49.1 million, or 23.9% of revenues, in the comparable period last year.
Full-time billable consultant utilization rate was 76.5% during the first nine months of 2007 compared with 77.7% during the same period last year. Average billing rate per hour for full-time billable consultants increased 6.1% to $279 for the first nine months of 2007 from $263 in the same period last year.
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: 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-Q filing for the quarter ended September 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 acquired Callaway Partners, LLC, an accounting and finance professional services firm. 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 solutions.
Outlook for 2007
Based on currently available information, the Company expects Q4 2007 revenues before reimbursable expenses in a range of $135.0 million to $138.0 million, EBITDA in a range of $28.0 million to $29.5 million, operating income in a range of $22.5 million to $23.5 million, and between $0.61 and $0.65 in diluted earnings per share.
The Company anticipates full year 2007 revenues before reimbursable expenses in a range of $503.0 million to $506.0 million, EBITDA in a range of $107.5 million to $109.0 million, operating income in a range of $83.0 million to $84.0 million, and between $2.30 and $2.34 in diluted earnings per share.
Third 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 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 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.