UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
August 7,
2007
Date of
Report (Date of earliest event reported)
_____________________
Huron
Consulting Group Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware |
000-50976 |
01-0666114 |
|
(State
or other jurisdiction |
(Commission |
(IRS
Employer |
|
of
incorporation or organization) |
File
Number) |
Identification
Number) |
550
West Van Buren Street
Chicago,
Illinois
60607
(Address
of principal executive offices)
(Zip
Code)
(312)
583-8700
(Registrant’s
telephone number, including area code)
_____________________
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results
of Operations and Financial Condition.
On
August 7, 2007, Huron Consulting Group Inc. issued a press release
announcing its financial results for the three and six months ended
June 30, 2007. A copy of the press release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated in this report as if fully
set forth herein.
Item
9.01. Financial
Statements and Exhibits.
|
(d) |
Exhibits | |
|
99.1 Press
release, dated August 7, 2007 |
- 1
- -
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Huron
Consulting Group Inc. | |||
|
(Registrant) | |||
|
Date: |
August 7,
2007 |
/s/
Gary L. Burge | |
|
Gary
L. Burge | |||
|
Vice
President, | |||
|
Chief
Financial Officer and Treasurer |
- 2
- -
EXHIBIT
INDEX
|
Exhibit
Number |
Description | |
|
99.1 |
Press
release, dated August 7, 2007 |
EXHIBIT
99.1
[Huron
Consulting Group Logo]
News
FOR
IMMEDIATE
RELEASE
August
7, 2007
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.
Year-to-Date
Results
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.
Acquisitions
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.
Media
Contact:
Jennifer
Frost Hennagir
312-880-3260
jfrost-hennagir@huronconsultinggroup.com
Investor
Contact:
Gary L.
Burge, Chief Financial Officer
312-583-8722
garyburge@huronconsultinggroup.com
###
HURON
CONSULTING GROUP INC.
CONSOLIDATED
STATEMENTS OF INCOME
(In
thousands, except per share amounts)
(Unaudited)
|
Three
months ended
June 30, |
Six
months ended
June 30, |
||||||||||||
|
2007 |
2006 |
2007 |
2006 |
||||||||||
|
Revenues
and reimbursable expenses: |
|||||||||||||
|
Revenues |
$ |
118,266 |
$ |
67,769 |
$ |
234,275 |
$ |
129,956 |
|||||
|
Reimbursable
expenses |
10,910 |
6,691 |
20,945 |
12,130 |
|||||||||
|
Total
revenues and reimbursable expenses |
129,176 |
74,460 |
255,220 |
142,086 |
|||||||||
|
Direct
costs and reimbursable expenses (exclusive
of depreciation
and
amortization shown in operating expenses): |
|||||||||||||
|
Direct
costs |
66,508 |
37,436 |
133,411 |
73,426 |
|||||||||
|
Intangible
assets amortization |
2,304 |
1,640 |
4,544 |
1,716 |
|||||||||
|
Reimbursable
expenses |
10,814 |
6,795 |
20,931 |
12,333 |
|||||||||
|
Total
direct costs and reimbursable expenses |
79,626 |
45,871 |
158,886 |
87,475 |
|||||||||
|
Operating
expenses: |
|||||||||||||
|
Selling,
general and administrative |
25,606 |
15,713 |
49,433 |
30,554 |
|||||||||
|
Depreciation
and amortization |
4,177 |
1,569 |
8,219 |
3,077 |
|||||||||
|
Total
operating expenses |
29,783 |
17,282 |
57,652 |
33,631 |
|||||||||
|
Operating
income |
19,767 |
11,307 |
38,682 |
20,980 |
|||||||||
|
Other
income (expense): |
|||||||||||||
|
Interest
income (expense), net |
(1,825 |
) |
(193 |
) |
(3,250 |
) |
39 |
||||||
|
Other
income |
95 |
¾ |
125 |
¾ |
|||||||||
|
Total
other income (expense) |
(1,730 |
) |
(193 |
) |
(3,125 |
) |
39 |
||||||
|
Income
before provision for income taxes |
18,037 |
11,114 |
35,557 |
21,019 |
|||||||||
|
Provision
for income taxes |
7,936 |
4,834 |
15,645 |
9,143 |
|||||||||
|
Net
income |
$ |
10,101 |
$ |
6,280 |
$ |
19,912 |
$ |
11,876 |
|||||
|
Earnings
per share: |
|||||||||||||
|
Basic |
$ |
0.60 |
$ |
0.39 |
$ |
1.19 |
$ |
0.73 |
|||||
|
Diluted |
$ |
0.56 |
$ |
0.36 |
$ |
1.11 |
$ |
0.69 |
|||||
|
Weighted
average shares used in calculating earnings per
share: |
|||||||||||||
|
Basic |
16,842 |
16,309 |
16,784 |
16,194 |
|||||||||
|
Diluted |
17,993 |
17,244 |
17,881 |
17,120 |
|||||||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except share and per share amounts)
(Unaudited)
|
June
30,
2007 |
December
31,
2006 |
||||||
|
Assets |
|||||||
|
Current
assets: |
|||||||
|
Cash
and cash equivalents |
$ |
3,437 |
$ |
16,572 |
|||
|
Receivables
from clients, net |
66,116 |
41,848 |
|||||
|
Unbilled
services, net |
34,124 |
22,627 |
|||||
|
Income
tax receivable |
1,651 |
3,637 |
|||||
|
Deferred
income taxes |
22,280 |
15,290 |
|||||
|
Other
current assets |
12,204 |
6,435 |
|||||
|
Total
current assets |
139,812 |
106,409 |
|||||
|
Property
and equipment,
net |
32,017 |
27,742 |
|||||
|
Deferred
income taxes |
3,029 |
5,433 |
|||||
|
Deposits
and other assets |
7,508 |
2,294 |
|||||
|
Intangible
assets, net |
15,002 |
4,238 |
|||||
|
Goodwill |
137,707 |
53,328 |
|||||
|
Total
assets |
$ |
335,075 |
$ |
199,444 |
|||
|
Liabilities
and stockholders’ equity |
|||||||
|
Current
liabilities: |
|||||||
|
Accounts
payable |
$ |
4,634 |
$ |
2,684 |
|||
|
Accrued
expenses |
19,762 |
12,712 |
|||||
|
Accrued
payroll and related benefits |
35,100 |
41,649 |
|||||
|
Deferred
revenues |
6,608 |
4,035 |
|||||
|
Bank
borrowings |
¾ |
8,000 |
|||||
|
Current
portion of notes payable and capital lease obligations |
1,141 |
1,282 |
|||||
|
Total
current liabilities |
67,245 |
70,362 |
|||||
|
Non-current
liabilities: |
|||||||
|
Deferred
compensation and other liabilities |
2,737 |
1,169 |
|||||
|
Notes
payable and capital lease obligations, net of current
portion |
¾ |
1,000 |
|||||
|
Bank
borrowings |
107,000 |
¾ |
|||||
|
Deferred
lease incentives |
10,246 |
10,333 |
|||||
|
Total
non-current liabilities |
119,983 |
12,502 |
|||||
|
Commitments
and contingencies |
|||||||
|
Stockholders’
equity |
|||||||
|
Common
stock; $0.01 par value; 500,000,000 shares authorized; 19,166,689
and
18,470,623 shares issued at June 30, 2007 and
December 31, 2006, respectively |
180 |
178 |
|||||
|
Treasury
stock, at cost, 469,189 and 398,783 shares at June 30, 2007 and
December 31,
2006, respectively |
(12,252 |
) |
(9,396 |
) | |||
|
Additional
paid-in capital |
93,880 |
79,598 |
|||||
|
Retained
earnings |
66,112 |
46,200 |
|||||
|
Accumulated
other comprehensive loss |
(73 |
) |
¾ |
||||
|
Total
stockholders’ equity |
147,847 |
116,580 |
|||||
|
Total
liabilities and stockholders equity |
$ |
335,075 |
$ |
199,444 |
|||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
|
Three
Months Ended
June 30, |
Percent
Increase |
|||||||||
|
Segment
and Consolidated Operating Results (in
thousands): |
2007 |
2006 |
||||||||
|
Revenues
and reimbursable expenses: |
||||||||||
|
Legal
Financial Consulting |
$ |
32,669 |
$ |
23,981 |
36.2 |
% | ||||
|
Legal
Operational Consulting (1) |
22,795 |
9,219 |
147.3 |
% | ||||||
|
Health
and Education Consulting |
42,810 |
20,716 |
106.7 |
% | ||||||
|
Corporate
Consulting |
19,992 |
13,853 |
44.3 |
% | ||||||
|
Total
revenues |
118,266 |
67,769 |
74.5 |
% | ||||||
|
Total
reimbursable expenses |
10,910 |
6,691 |
63.1 |
% | ||||||
|
Total
revenues and reimbursable expenses |
$ |
129,176 |
$ |
74,460 |
73.5 |
% | ||||
|
Operating
income: |
||||||||||
|
Legal
Financial Consulting |
$ |
15,281 |
$ |
11,186 |
36.6 |
% | ||||
|
Legal
Operational Consulting |
7,272 |
2,630 |
176.5 |
% | ||||||
|
Health
and Education Consulting |
14,021 |
6,435 |
117.9 |
% | ||||||
|
Corporate
Consulting |
5,920 |
4,614 |
28.3 |
% | ||||||
|
Total
segment operating income |
42,494 |
24,865 |
70.9 |
% | ||||||
|
Unallocated
corporate costs |
18,550 |
11,989 |
54.7 |
% | ||||||
|
Depreciation
and amortization expense |
4,177 |
1,569 |
166.2 |
% | ||||||
|
Total
operating expenses |
22,727 |
13,558 |
67.6 |
% | ||||||
|
Operating
income |
$ |
19,767 |
$ |
11,307 |
74.8 |
% | ||||
|
Other
Operating Data: |
||||||||||
|
Number
of revenue-generating professionals (at period end)
(2): |
||||||||||
|
Legal
Financial Consulting - Billable Consultants |
291 |
225 |
29.3 |
% | ||||||
|
Legal
Operational Consulting - Billable Consultants |
126 |
112 |
12.5 |
% | ||||||
|
Legal
Operational Consulting - Other Professionals (1) |
62 |
¾ |
¾ |
|||||||
|
Health
and Education Consulting - Billable Consultants |
355 |
220 |
61.4 |
% | ||||||
|
Corporate
Consulting - Billable Consultants |
168 |
113 |
48.7 |
% | ||||||
|
Total |
1,002 |
670 |
49.6 |
% | ||||||
|
Average
number of revenue-generating professionals (for the period)
(2): |
||||||||||
|
Legal
Financial Consulting - Billable Consultants |
288 |
223 |
||||||||
|
Legal
Operational Consulting - Billable Consultants |
122 |
110 |
||||||||
|
Legal
Operational Consulting - Other Professionals (1) |
59 |
¾ |
||||||||
|
Health
and Education Consulting - Billable Consultants |
356 |
211 |
||||||||
|
Corporate
Consulting - Billable Consultants |
170 |
111 |
||||||||
|
Total |
995 |
655 |
||||||||
|
Billable
consultant utilization rate (3): |
||||||||||
|
Legal
Financial Consulting |
74.6 |
% |
73.4 |
% |
||||||
|
Legal
Operational Consulting (1) |
79.0 |
% |
74.6 |
% |
||||||
|
Health
and Education Consulting |
80.5 |
% |
80.2 |
% |
||||||
|
Corporate
Consulting |
77.1 |
% |
78.5 |
% |
||||||
|
Total |
77.9 |
% |
76.7 |
% |
||||||
|
Average
billing rate per hour (4): |
||||||||||
|
Legal
Financial Consulting |
$ |
315 |
$ |
301 |
||||||
|
Legal
Operational Consulting (1) |
$ |
249 |
$ |
236 |
||||||
|
Health
and Education Consulting |
$ |
256 |
$ |
239 |
||||||
|
Corporate
Consulting |
$ |
313 |
$ |
341 |
||||||
|
Total |
$ |
283 |
$ |
276 |
||||||
|
Six
Months Ended
June 30, |
Percent
Increase |
|||||||||
|
Segment
and Consolidated Operating Results (in
thousands): |
2007 |
2006 |
||||||||
|
Revenues
and reimbursable expenses: |
||||||||||
|
Legal
Financial Consulting |
$ |
69,281 |
$ |
50,030 |
38.5 |
% | ||||
|
Legal
Operational Consulting (1) |
46,066 |
16,769 |
174.7 |
% | ||||||
|
Health
and Education Consulting |
81,662 |
39,140 |
108.6 |
% | ||||||
|
Corporate
Consulting |
37,266 |
24,017 |
55.2 |
% | ||||||
|
Total
revenues |
234,275 |
129,956 |
80.3 |
% | ||||||
|
Total
reimbursable expenses |
20,945 |
12,130 |
72.7 |
% | ||||||
|
Total
revenues and reimbursable expenses |
$ |
255,220 |
$ |
142,086 |
79.6 |
% | ||||
|
Operating
income: |
||||||||||
|
Legal
Financial Consulting |
$ |
31,456 |
$ |
22,889 |
37.4 |
% | ||||
|
Legal
Operational Consulting |
15,174 |
4,787 |
217.0 |
% | ||||||
|
Health
and Education Consulting |
26,221 |
11,723 |
123.7 |
% | ||||||
|
Corporate
Consulting |
10,116 |
8,221 |
23.1 |
% | ||||||
|
Total
segment operating income |
82,967 |
47,620 |
74.2 |
% | ||||||
|
Unallocated
corporate costs |
36,066 |
23,563 |
53.1 |
% | ||||||
|
Depreciation
and amortization expense |
8,219 |
3,077 |
167.1 |
% | ||||||
|
Total
operating expenses |
44,285 |
26,640 |
66.2 |
% | ||||||
|
Operating
income |
$ |
38,682 |
$ |
20,980 |
84.4 |
% | ||||
|
Other
Operating Data: |
||||||||||
|
Number
of revenue-generating professionals (at period end)
(2): |
||||||||||
|
Legal
Financial Consulting - Billable Consultants |
291 |
225 |
29.3 |
% | ||||||
|
Legal
Operational Consulting - Billable Consultants |
126 |
112 |
12.5 |
% | ||||||
|
Legal
Operational Consulting - Other Professionals (1) |
62 |
¾ |
¾ |
|||||||
|
Health
and Education Consulting - Billable Consultants |
355 |
220 |
61.4 |
% | ||||||
|
Corporate
Consulting - Billable Consultants |
168 |
113 |
48.7 |
% | ||||||
|
Total |
1,002 |
670 |
49.6 |
% | ||||||
|
Average
number of revenue-generating professionals (for the period)
(2): |
||||||||||
|
Legal
Financial Consulting - Billable Consultants |
284 |
225 |
||||||||
|
Legal
Operational Consulting - Billable Consultants |
122 |
107 |
||||||||
|
Legal
Operational Consulting - Other Professionals (1) |
55 |
¾ |
||||||||
|
Health
and Education Consulting - Billable Consultants |
350 |
210 |
||||||||
|
Corporate
Consulting - Billable Consultants |
170 |
106 |
||||||||
|
Total |
981 |
648 |
||||||||
|
Billable
consultant utilization rate (3): |
||||||||||
|
Legal
Financial Consulting |
79.8 |
% |
78.8 |
% |
||||||
|
Legal
Operational Consulting (1) |
77.3 |
% |
71.3 |
% |
||||||
|
Health
and Education Consulting |
79.4 |
% |
79.1 |
% |
||||||
|
Corporate
Consulting |
72.7 |
% |
75.3 |
% |
||||||
|
Total |
78.0 |
% |
77.1 |
% |
||||||
|
Average
billing rate per hour (4): |
||||||||||
|
Legal
Financial Consulting |
$ |
306 |
$ |
292 |
||||||
|
Legal
Operational Consulting (1) |
$ |
244 |
$ |
231 |
||||||
|
Health
and Education Consulting |
$ |
252 |
$ |
230 |
||||||
|
Corporate
Consulting |
$ |
304 |
$ |
321 |
||||||
|
Total |
$ |
277 |
$ |
266 |
||||||
|
Three
Months Ended |
|||||||||||||
|
Segment
and Consolidated Operating Results
(in
thousands): |
Mar. 31,
2006 |
Jun. 30,
2006 |
Sep. 30,
2006 |
Dec. 31,
2006 |
|||||||||
|
Revenues
and reimbursable expenses: |
|||||||||||||
|
Legal
Financial Consulting |
$ |
26,049 |
$ |
23,981 |
$ |
28,618 |
$ |
30,572 |
|||||
|
Legal
Operational Consulting (1) |
7,550 |
9,219 |
12,971 |
18,034 |
|||||||||
|
Health
and Education Consulting |
18,424 |
20,716 |
21,088 |
23,880 |
|||||||||
|
Corporate
Consulting |
10,164 |
13,853 |
12,517 |
10,952 |
|||||||||
|
Total
revenues |
62,187 |
67,769 |
75,194 |
83,438 |
|||||||||
|
Total
reimbursable expenses |
5,439 |
6,691 |
7,921 |
13,279 |
|||||||||
|
Total
revenues and reimbursable expenses |
$ |
67,626 |
$ |
74,460 |
$ |
83,115 |
$ |
96,717 |
|||||
|
Operating
income: |
|||||||||||||
|
Legal
Financial Consulting |
$ |
11,703 |
$ |
11,186 |
$ |
13,033 |
$ |
14,382 |
|||||
|
Legal
Operational Consulting |
2,157 |
2,630 |
3,650 |
5,447 |
|||||||||
|
Health
and Education Consulting |
5,288 |
6,435 |
6,592 |
7,060 |
|||||||||
|
Corporate
Consulting |
3,607 |
4,614 |
4,955 |
4,640 |
|||||||||
|
Total
segment operating income |
22,755 |
24,865 |
28,230 |
31,529 |
|||||||||
|
Unallocated
corporate costs |
11,574 |
11,989 |
13,186 |
13,920 |
|||||||||
|
Depreciation
and amortization expense |
1,508 |
1,569 |
2,921 |
3,203 |
|||||||||
|
Total
operating expenses |
13,082 |
13,558 |
16,107 |
17,123 |
|||||||||
|
Operating
income |
$ |
9,673 |
$ |
11,307 |
$ |
12,123 |
$ |
14,406 |
|||||
|
Other
Operating Data: |
|||||||||||||
|
Number
of revenue-generating professionals (at
period end)
(2): |
|||||||||||||
|
Legal
Financial Consulting - Billable Consultants |
224 |
225 |
258 |
268 |
|||||||||
|
Legal
Operational Consulting - Billable Consultants |
109 |
112 |
118 |
121 |
|||||||||
|
Legal
Operational Consulting - Other Professionals (1) |
¾ |
¾ |
46 |
48 |
|||||||||
|
Health
and Education Consulting - Billable Consultants |
207 |
220 |
257 |
274 |
|||||||||
|
Corporate
Consulting - Billable Consultants |
96 |
113 |
131 |
131 |
|||||||||
|
Total |
636 |
670 |
810 |
842 |
|||||||||
|
Average
number of revenue-generating professionals (for
the period) (2): |
|||||||||||||
|
Legal
Financial Consulting - Billable Consultants |
223 |
223 |
244 |
260 |
|||||||||
|
Legal
Operational Consulting - Billable Consultants |
103 |
110 |
115 |
120 |
|||||||||
|
Legal
Operational Consulting - Other Professionals (1) |
¾ |
¾ |
22 |
49 |
|||||||||
|
Health
and Education Consulting - Billable Consultants |
212 |
211 |
237 |
265 |
|||||||||
|
Corporate
Consulting - Billable Consultants |
101 |
111 |
123 |
132 |
|||||||||
|
Total |
639 |
655 |
741 |
826 |
|||||||||
|
Billable
consultant utilization rate (3): |
|||||||||||||
|
Legal
Financial Consulting |
83.9 |
% |
73.4 |
% |
82.9 |
% |
85.6 |
% | |||||
|
Legal
Operational Consulting (1) |
67.7 |
% |
74.6 |
% |
71.8 |
% |
72.5 |
% | |||||
|
Health
and Education Consulting |
78.1 |
% |
80.2 |
% |
82.3 |
% |
77.0 |
% | |||||
|
Corporate
Consulting |
71.6 |
% |
78.5 |
% |
71.8 |
% |
69.4 |
% | |||||
|
Total |
77.5 |
% |
76.7 |
% |
78.9 |
% |
77.9 |
% | |||||
|
Average
billing rate per hour (4): |
|||||||||||||
|
Legal
Financial Consulting |
$ |
284 |
$ |
301 |
$ |
284 |
$ |
282 |
|||||
|
Legal
Operational Consulting (1) |
$ |
225 |
$ |
236 |
$ |
227 |
$ |
238 |
|||||
|
Health
and Education Consulting |
$ |
221 |
$ |
239 |
$ |
230 |
$ |
241 |
|||||
|
Corporate
Consulting |
$ |
296 |
$ |
341 |
$ |
311 |
$ |
279 |
|||||
|
Total |
$ |
257 |
$ |
276 |
$ |
262 |
$ |
261 |
|||||
| (1) |
Legal
Operational Consulting revenues include revenues generated by our document
review and processing groups (Legal Operational Consulting - Other
Professionals) for the three and six months ended June 30, 2007.
Utilization rate and average billing rate per hour are not presented for
these professionals as they are not meaningful
measures. |
| (2) |
Revenue-generating
professionals consist of our billable consultants and other professionals.
Billable consultants generate revenues primarily based on number of hours
worked while our other professionals generate revenues based on number of
hours worked and units produced, such as pages reviewed and data
processed. Revenue-generating professionals exclude interns and
independent contractors. |
| (3) |
We
calculate the utilization rate for our billable consultants by dividing
the number of hours all our billable consultants worked on client
assignments during a period by the total available working hours for all
of our billable consultants during the same period, assuming a forty-hour
work week, less paid holidays and vacation
days. |
| (4) |
For
engagements where revenues are based on number of hours worked by our
billable consultants, average billing rate per hour is calculated by
dividing revenues for a period by the number of hours worked (excluding
interns and independent contractor hours) on client assignments during the
same period. |
HURON
CONSULTING GROUP INC.
RECONCILIATION
OF OPERATING INCOME TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES,
DEPRECIATION AND AMORTIZATION (5)
(in
thousands)
|
Three
months ended
June 30, |
Six
months ended
June 30, |
||||||||||||
|
2007 |
2006 |
2007 |
2006 |
||||||||||
|
Revenues |
$ |
118,266 |
$ |
67,769 |
$ |
234,275 |
$ |
129,956 |
|||||
|
Operating
income |
$ |
19,767 |
$ |
11,307 |
$ |
38,682 |
$ |
20,980 |
|||||
|
Add
back: |
|||||||||||||
|
Depreciation
and amortization |
6,481 |
3,209 |
12,763 |
4,793 |
|||||||||
|
Earnings
before interest, taxes, depreciation and amortization
(EBITDA) (5) |
26,248 |
14,516 |
51,445 |
25,773 |
|||||||||
|
Add
back: |
|||||||||||||
|
Share-based
compensation |
4,845 |
2,459 |
9,051 |
4,722 |
|||||||||
|
Secondary
offering costs |
¾ |
¾ |
¾ |
567 |
|||||||||
|
Total
adjusted items |
4,845 |
2,459 |
9,051 |
5,289 |
|||||||||
|
Adjusted
EBITDA (5) |
$ |
31,093 |
$ |
16,975 |
$ |
60,496 |
$ |
31,062 |
|||||
|
Adjusted
EBITDA as a percentage of revenues |
26.3 |
% |
25.0 |
% |
25.8 |
% |
23.9 |
% | |||||
RECONCILIATION
OF NET INCOME TO NET INCOME BEFORE SECONDARY OFFERING
COSTS
AND
ADJUSTED NET INCOME (5)
(in
thousands)
|
Three
months ended
June 30, |
Six
months ended
June 30, |
||||||||||||
|
2007 |
2006 |
2007 |
2006 |
||||||||||
|
Net
income |
$ |
10,101 |
$ |
6,280 |
$ |
19,912 |
$ |
11,876 |
|||||
|
Diluted
earnings per share |
$ |
0.56 |
$ |
0.36 |
$ |
1.11 |
$ |
0.69 |
|||||
|
Add
back: Secondary offering costs, net of tax |
¾ |
¾ |
¾ |
567 |
|||||||||
|
Net
income before secondary offering costs (5) |
$ |
10,101 |
$ |
6,280 |
$ |
19,912 |
$ |
12,443 |
|||||
|
Diluted
earnings per share before secondary offering
costs (5) |
$ |
0.56 |
$ |
0.36 |
$ |
1.11 |
$ |
0.73 |
|||||
|
Add
back other adjustments: |
|||||||||||||
|
Amortization
of intangible assets |
3,868 |
1,844 |
7,657 |
2,059 |
|||||||||
|
Share-based
compensation |
4,845 |
2,459 |
9,051 |
4,722 |
|||||||||
|
Tax
effect |
(3,564 |
) |
(1,764 |
) |
(6,834 |
) |
(2,780 |
) | |||||
|
Total
adjustments, net of tax |
5,149 |
2,539 |
9,874 |
4,001 |
|||||||||
|
Adjusted
net income (5) |
$ |
15,250 |
$ |
8,819 |
$ |
29,786 |
$ |
16,444 |
|||||
|
Adjusted
diluted earnings per share (5) |
$ |
0.85 |
$ |
0.51 |
$ |
1.67 |
$ |
0.96 |
|||||
| (1) |
In
evaluating the Company’s financial performance, management uses earnings
before interest, taxes, depreciation and amortization (“EBITDA”), adjusted
EBITDA, net income before secondary offering costs, and adjusted net
income, which are non-GAAP measures. Management believes that the use of
such measures, as supplements to operating income, net income and other
GAAP measures, are useful indicators of the Company’s financial
performance and its ability to generate cash flows from operations that
are available for taxes and capital expenditures. Additionally, these
measures exclude certain items to provide better comparability from period
to period. Investors should recognize that these non-GAAP measures might
not be comparable to similarly titled measures of other companies. These
measures should be considered in addition to, and not as a substitute for
or superior to, any measure of performance, cash flows or liquidity
prepared in accordance with accounting principles generally accepted in
the United States. |