Huron Consulting Group Reports Third Quarter 2008 Financial Results
Huron Consulting Group Reports Third Quarter 2008 Financial Results
Q3 2008 Financial Tables
“Huron’s Health and Education Consulting and Legal Consulting businesses continued to drive the Company’s strong results. We expect our Health and Education business to continue to experience growth given the increased focus on operating performance at hospitals, health systems and universities due to the broader financial crisis. Huron also continues to hold a leading market position in the Legal Consulting space. Corporate legal teams and law firms are turning to Huron and our V3locity e-discovery solution to manage the ever growing demand for discovery services. We remain optimistic about Huron’s position to generate future growth in these businesses,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. “Huron’s Financial Consulting and Corporate Consulting businesses have the resources and experience to help clients deal with the business and financial issues that will inevitably develop from today’s environment: disputes, investigations, valuations, restructurings and turnarounds.”
“Huron has always focused on solutions that provide measurable business improvements – and those solutions should be all the more essential in today’s environment. To the extent that we can predict near and longer term trends in our markets right now, we believe there will continue to be numerous opportunities for all of Huron’s businesses in the remainder of 2008 and into 2009,” added Holdren.
Acquisition of Stockamp & Associates
In July 2008, Huron announced the acquisition of the assets of Stockamp & Associates, Inc., a nationally recognized management consulting firm specializing in helping high-performing hospitals and health systems optimize their financial and operational performance. The financial results of Stockamp have been included within the Health and Education Consulting segment since July 8, 2008.
Third Quarter 2008 Results
Revenues of $168.7 million for the third quarter of 2008 increased 25.8% from $134.1 million for the third quarter of 2007. The Company's third quarter 2008 operating income increased 2.1% to $22.3 million compared to $21.8 million in the third quarter of 2007. Net income was $8.8 million, or $0.44 per diluted share, for the third quarter of 2008 compared to $10.5 million, or $0.58 per diluted share, for the same period last year. Financial results for the third quarter of 2008 and 2007 included $2.0 million and $2.2 million, respectively, of rapid amortization of intangible assets. Financial results for the third quarter of 2008 also included $2.3 million of restructuring charges. As previously forecast, results for the third quarter of 2008 were unfavorably impacted by the Stockamp acquisition due to the timing of revenue recognition under GAAP, resulting in lower reported revenues and operating income, which are included within the Health and Education Consulting segment.
Third quarter 2008 earnings before interest, taxes, depreciation and amortization ("EBITDA")(8) was $31.6 million, or 18.7% of revenues, compared to $28.3 million, or 21.1% of revenues, in the comparable quarter last year. Adjusted EBITDA(8), which excludes share-based compensation expense and restructuring charges, was $40.8 million, or 24.2% of revenues, compared to $33.5 million, or 25.0% of revenues, in the comparable quarter last year.
The average number of full-time billable consultants(3) increased 42.0% to 1,488 in the third quarter of 2008 compared to 1,048 in the same quarter last year. Huron also has a number of consultants who work variable schedules as needed by clients and full-time employees who provide software support and maintenance services to our clients, as well as contract reviewers and other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. The average number of these full-time equivalent professionals(7) increased 52.3% to 947 in the third quarter of 2008 compared to 622 for the comparable period in 2007. Full-time billable consultant utilization rate was 71.3% during the third quarter of 2008 compared with 73.9% during the same period last year. Average billing rate per hour for full-time billable consultants was $250 for the third quarter of 2008 compared to $286 for the third quarter of 2007.
Year-to-Date Results
Revenues of $451.5 million for the first nine months of 2008 increased 22.6% from $368.3 for the same period last year. The Company's operating income increased 4.4% to $63.1 million for the nine months ended September 30, 2008 compared to $60.5 million the same period last year. Net income was $28.9 million, or $1.54 per diluted share, for the nine months ended September 30, 2008 compared to $30.4 million, or $1.69 per diluted share, for the comparable period last year. Financial results for the first nine months of 2008 and 2007 included $2.0 million and $6.7 million, respectively, of rapid amortization of intangible assets. Financial results for the first nine months of 2008 also included $2.3 million of restructuring charges.
Year-to-date 2008 EBITDA(8) increased 4.1% to $83.0 million, or 18.4% of revenues, compared to $79.8 million, or 21.7% of revenues, in the same period last year. Adjusted EBITDA(8), which excludes share-based compensation expense and restructuring charges, rose 12.5% to $105.8 million, or 23.4% of revenues, compared to $94.0 million, or 25.5% of revenues, in the comparable period last year.
The average number of full-time billable consultants(3) increased 34.0% to 1,308 in the first nine months ended September 30, 2008 compared to 976 in the same period last year. The average number of full-time equivalent professionals(7) increased 70.2% to 851 in the first nine months of 2008 compared to 500 for the comparable period in 2007. Full-time billable consultant utilization rate was 67.9% during the first nine months of 2008 compared with 76.5% during the same period last year. Average billing rate per hour for full-time billable consultants was $265 for the first nine months of 2008 compared to $279 for the first nine months of 2007.
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: Health and Education Consulting; Financial Consulting; Legal Consulting; and Corporate Consulting.
Segment results and related footnotes are included in the attached schedules and in Huron's Form 10-Q filing for the quarter ended September 30, 2008.
Outlook for the Remainder of 2008
Based on currently available information, the Company expects Q4 2008 revenues before reimbursable expenses in a range of $170 million to $178 million, EBITDA in a range of $38 million to $41 million, operating income in a range of $27 million to $30 million, and between $0.58 and $0.66 in diluted earnings per share.
The Company anticipates full year 2008 revenues before reimbursable expenses in a range of $621 million to $629 million, EBITDA in a range of $121 million to $124 million, operating income in a range of $90 million to $93 million, and between $2.12 and $2.20 in diluted earnings per share.
Share-based compensation expense of approximately $7 million and $27 million is included in the Q4 and full year 2008 estimates, respectively. Weighted average diluted share counts for 2008 are estimated to be 20.2 million for Q4 2008 and 19.1 million for full year 2008.
Third Quarter 2008 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, including those concerning Huron Consulting Group's current expectations about the Company's future results 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 “continues.” 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 rates, billing rates, and 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, including those in the credit markets, 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 our Quarterly Report on Form 10-Q for the period ended September 30, 2008 for a complete description of the material risks we face.
Media Contact
jfrost-hennagir@huronconsultinggroup.com
investor@huronconsultinggroup.com
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- Revenues of $168.7 million for Q3 2008 increased 25.8% from $134.1 million in Q3 2007.
- Revenues of $451.5 million for the nine months ended September 30, 2008 increased 22.6% from $368.3 million in the same period last year.
- Diluted earnings per share for Q3 2008 was $0.44 compared to $0.58 in Q3 2007. As previously disclosed and included in Huron’s Q3 2008 guidance, financial results for Q3 2008 were impacted by the acquisition of Stockamp and restructuring charges, as described in footnotes 1 and 2 to the segment operating results and other operating data table below.
- Average number of full-time billable consultants(3) totaled 1,488 for Q3 2008 compared to 1,048 for Q3 2007. Average number of full-time equivalent professionals(7) totaled 947 for Q3 2008 compared to 622 in the same period last year.
“Huron’s Health and Education Consulting and Legal Consulting businesses continued to drive the Company’s strong results. We expect our Health and Education business to continue to experience growth given the increased focus on operating performance at hospitals, health systems and universities due to the broader financial crisis. Huron also continues to hold a leading market position in the Legal Consulting space. Corporate legal teams and law firms are turning to Huron and our V3locity e-discovery solution to manage the ever growing demand for discovery services. We remain optimistic about Huron’s position to generate future growth in these businesses,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. “Huron’s Financial Consulting and Corporate Consulting businesses have the resources and experience to help clients deal with the business and financial issues that will inevitably develop from today’s environment: disputes, investigations, valuations, restructurings and turnarounds.”
“Huron has always focused on solutions that provide measurable business improvements – and those solutions should be all the more essential in today’s environment. To the extent that we can predict near and longer term trends in our markets right now, we believe there will continue to be numerous opportunities for all of Huron’s businesses in the remainder of 2008 and into 2009,” added Holdren.
Acquisition of Stockamp & Associates
In July 2008, Huron announced the acquisition of the assets of Stockamp & Associates, Inc., a nationally recognized management consulting firm specializing in helping high-performing hospitals and health systems optimize their financial and operational performance. The financial results of Stockamp have been included within the Health and Education Consulting segment since July 8, 2008.
Third Quarter 2008 Results
Revenues of $168.7 million for the third quarter of 2008 increased 25.8% from $134.1 million for the third quarter of 2007. The Company's third quarter 2008 operating income increased 2.1% to $22.3 million compared to $21.8 million in the third quarter of 2007. Net income was $8.8 million, or $0.44 per diluted share, for the third quarter of 2008 compared to $10.5 million, or $0.58 per diluted share, for the same period last year. Financial results for the third quarter of 2008 and 2007 included $2.0 million and $2.2 million, respectively, of rapid amortization of intangible assets. Financial results for the third quarter of 2008 also included $2.3 million of restructuring charges. As previously forecast, results for the third quarter of 2008 were unfavorably impacted by the Stockamp acquisition due to the timing of revenue recognition under GAAP, resulting in lower reported revenues and operating income, which are included within the Health and Education Consulting segment.
Third quarter 2008 earnings before interest, taxes, depreciation and amortization ("EBITDA")(8) was $31.6 million, or 18.7% of revenues, compared to $28.3 million, or 21.1% of revenues, in the comparable quarter last year. Adjusted EBITDA(8), which excludes share-based compensation expense and restructuring charges, was $40.8 million, or 24.2% of revenues, compared to $33.5 million, or 25.0% of revenues, in the comparable quarter last year.
The average number of full-time billable consultants(3) increased 42.0% to 1,488 in the third quarter of 2008 compared to 1,048 in the same quarter last year. Huron also has a number of consultants who work variable schedules as needed by clients and full-time employees who provide software support and maintenance services to our clients, as well as contract reviewers and other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. The average number of these full-time equivalent professionals(7) increased 52.3% to 947 in the third quarter of 2008 compared to 622 for the comparable period in 2007. Full-time billable consultant utilization rate was 71.3% during the third quarter of 2008 compared with 73.9% during the same period last year. Average billing rate per hour for full-time billable consultants was $250 for the third quarter of 2008 compared to $286 for the third quarter of 2007.
Year-to-Date Results
Revenues of $451.5 million for the first nine months of 2008 increased 22.6% from $368.3 for the same period last year. The Company's operating income increased 4.4% to $63.1 million for the nine months ended September 30, 2008 compared to $60.5 million the same period last year. Net income was $28.9 million, or $1.54 per diluted share, for the nine months ended September 30, 2008 compared to $30.4 million, or $1.69 per diluted share, for the comparable period last year. Financial results for the first nine months of 2008 and 2007 included $2.0 million and $6.7 million, respectively, of rapid amortization of intangible assets. Financial results for the first nine months of 2008 also included $2.3 million of restructuring charges.
Year-to-date 2008 EBITDA(8) increased 4.1% to $83.0 million, or 18.4% of revenues, compared to $79.8 million, or 21.7% of revenues, in the same period last year. Adjusted EBITDA(8), which excludes share-based compensation expense and restructuring charges, rose 12.5% to $105.8 million, or 23.4% of revenues, compared to $94.0 million, or 25.5% of revenues, in the comparable period last year.
The average number of full-time billable consultants(3) increased 34.0% to 1,308 in the first nine months ended September 30, 2008 compared to 976 in the same period last year. The average number of full-time equivalent professionals(7) increased 70.2% to 851 in the first nine months of 2008 compared to 500 for the comparable period in 2007. Full-time billable consultant utilization rate was 67.9% during the first nine months of 2008 compared with 76.5% during the same period last year. Average billing rate per hour for full-time billable consultants was $265 for the first nine months of 2008 compared to $279 for the first nine months of 2007.
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: Health and Education Consulting; Financial Consulting; Legal Consulting; and Corporate Consulting.
Segment results and related footnotes are included in the attached schedules and in Huron's Form 10-Q filing for the quarter ended September 30, 2008.
Outlook for the Remainder of 2008
Based on currently available information, the Company expects Q4 2008 revenues before reimbursable expenses in a range of $170 million to $178 million, EBITDA in a range of $38 million to $41 million, operating income in a range of $27 million to $30 million, and between $0.58 and $0.66 in diluted earnings per share.
The Company anticipates full year 2008 revenues before reimbursable expenses in a range of $621 million to $629 million, EBITDA in a range of $121 million to $124 million, operating income in a range of $90 million to $93 million, and between $2.12 and $2.20 in diluted earnings per share.
Share-based compensation expense of approximately $7 million and $27 million is included in the Q4 and full year 2008 estimates, respectively. Weighted average diluted share counts for 2008 are estimated to be 20.2 million for Q4 2008 and 19.1 million for full year 2008.
Third Quarter 2008 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, including those concerning Huron Consulting Group's current expectations about the Company's future results 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 “continues.” 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 rates, billing rates, and 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, including those in the credit markets, 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 our Quarterly Report on Form 10-Q for the period ended September 30, 2008 for a complete description of the material risks we face.
Media Contact
Jennifer Frost Hennagir, Director
Chicago, Illinois
P (312) 880-3260
F (312) 583-8701
Investor Contact
Gary L. Burge, Vice President, Chief Financial Officer and Treasurer
Chicago, Illinois
P (312) 583-8722
F (312) 583-8701
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