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 5,
2008
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 5, 2008, Huron
Consulting Group Inc. issued a press release announcing its financial results
for the three and six months ended June 30, 2008. 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 5, 2008
|
- 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:
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August
5, 2008
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/s/
Gary L. Burge
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|
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Gary
L. Burge
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|||
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Vice
President,
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|||
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Chief
Financial Officer and Treasurer
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- 2
- -
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
|
99.1
|
Press
release, dated August 5,
2008
|
EXHIBIT 99.1
[Huron Consulting Group Logo]
News
FOR
IMMEDIATE
RELEASE
August
5, 2008
Huron
Consulting Group Reports Second Quarter 2008 Financial Results
|
·
|
Revenues
of $143.4 million for Q2 2008 increased 21.3% from $118.3 million in Q2
2007.
|
|
·
|
Revenues
of $282.8 million for the first half of 2008 increased 20.7% from $234.3
million for the first half of 2007.
|
|
·
|
Diluted
earnings per share for Q2 2008 was $0.54 compared to $0.56 in Q2
2007.
|
|
·
|
Average
number of full-time billable consultants(4)
totaled 1,224 for Q2 2008 compared to 936 for Q2 2007. Average number of
full-time equivalent professionals(7)
totaled 863 for Q2 2008 compared to 413 in the same period last
year.
|
CHICAGO –
August 5, 2008 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider
of financial and operational consulting services, today announced financial
results for the second quarter ended June 30, 2008.
“Huron’s
Health and Education Consulting and Legal Consulting businesses had very strong
quarters and we are optimistic about their position to generate future growth.
The addition of the Stockamp team will create a real powerhouse by serving
multiple segments of the healthcare industry, including major health systems,
academic medical centers and community hospitals,” said Gary E. Holdren,
chairman and chief executive officer, Huron Consulting Group. “We are making
targeted adjustments in certain businesses to make sure that we have people with
the rights skill sets in place to meet marketplace needs. At the same time, we
are executing our business plan by identifying market demands, meeting the
evolving needs of the marketplace, and helping clients solve complex business
challenges. We are confident that our balanced portfolio of offerings will
continue to deliver results.”
Second
Quarter 2008 Results
Revenues
of $143.4 million for the second quarter of 2008 increased 21.3% from $118.3
million for the second quarter of 2007. The Company's second quarter 2008
operating income increased 2.3% to $20.2 million compared to $19.8 million in
the second quarter of 2007. Net income was $9.8 million, or $0.54 per diluted
share, for the second quarter of 2008 compared to $10.1 million, or $0.56 per
diluted share, for the same period last year. Financial results for the second
quarter of 2007 included $2.3 million of rapid amortization of intangible
assets. There was no rapid amortization in the second quarter of
2008.
Second
quarter 2008 earnings before interest, taxes, depreciation and amortization
("EBITDA")(8)
was $25.6 million, or 17.9% of revenues, compared to $26.2 million,
or 22.2% of revenues, in the comparable quarter last year. Adjusted EBITDA(8), which
excludes share-based compensation expense, was $32.8 million, or 22.9% of
revenues, compared to $31.1 million, or 26.3% of revenues, in the comparable
quarter last year.
The
average number of full-time billable consultants(4)
increased 30.8% to 1,224 in the second quarter of 2008 compared to 936 in the
same quarter last year. Huron also has a number of consultants who work variable
schedules as needed by 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 109.0% to 863 in the second quarter of 2008 compared to 413 for the
comparable period in 2007. Full-time billable consultant utilization rate was
66.8% during the second quarter of 2008 compared with 77.9% during the same
period last year. Average billing rate per hour for full-time billable
consultants was $273 for the second quarter of 2008 compared to $281 for the
second quarter of 2007.
Year-to-Date
Results
Revenues
of $282.8 million for the first six months of 2008 increased 20.7% from $234.3
million for the first half of 2007. The Company's first half 2008 operating
income increased 5.6% to $40.9 million compared to $38.7 million in the first
half of 2007. Net income was $20.0 million, or $1.10 per diluted share, for the
first half of 2008 compared to $19.9 million, or $1.11 per diluted share, for
the same period last year. Financial results for the first half of 2007 included
$4.5 million of rapid amortization of intangible assets. There was no
rapid amortization in the first half of 2008.
EBITDA(8) for
both the first half of 2008 and 2007 was $51.4 million, or 18.2% of revenues in
2008 and 22.0% of revenues in 2007. Adjusted EBITDA(8), which
excludes share-based compensation expense, rose 7.4% to $65.0 million, or 23.0%
of revenues, compared to $60.5 million, or 25.8% of revenues, in the comparable
period last year.
The
average number of full-time billable consultants(4)
increased 32.1% to 1,223 in the first half of 2008 compared to 926 in the same
period last year. The average number of full-time equivalent professionals(7)
increased 83.0% to 807 in the first half of 2008 compared to 441 for the
comparable period in 2007. Full-time billable consultant utilization rate was
65.9% during the first half of 2008 compared with 78.0% during the same period
last year. Average billing rate per hour for full-time billable consultants was
$275 for the first half of 2008 compared to $276 for the first half 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 are included in the attached schedules and in Huron's Form 10-Q filing
for the quarter ended June 30, 2008.
Stockamp
& Associates Acquisition
On July
8, 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
initial purchase price was made for approximately $219 million, consisting of
$169 million in cash and $50 million in stock, subject to adjustment. Additional
purchase consideration will be payable if specific performance targets are
met.
In the 12
months ended March 31, 2008, Stockamp had cash basis revenues of approximately
$94 million.
Workforce
Reductions
During
July 2008, the Company initiated reductions in workforce to balance its employee
base with current revenue expectations, market demand, and areas of
focus. These initiatives will include the elimination of the operational
consulting group within the Corporate Consulting segment and a reduction in the
number of consultants in the Financial Consulting segment. The Company estimates
restructuring and severance charges relating to the workforce reductions of
approximately $2 million.
Outlook
for the Remainder of 2008
The table
below presents the components of the Company’s outlook based on currently
available information, for both the low and high end of the ranges, for the
third quarter and the full year 2008 (in millions except earnings per
share):
|
Legacy
Huron
(1)
|
Stockamp
(2)
|
Restructuring
and
Severance
Impact
(3)
|
Combined
Huron
|
||||||||||
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
||||||||
|
Third Quarter
2008
|
|||||||||||||
|
Revenues
|
$152.0
|
-
|
$157.0
|
$14.0
|
-
|
$16.0
|
$(2.0)
|
$164.0
|
-
|
$171.0
|
|||
|
EBITDA
|
$32.0
|
-
|
$35.0
|
$(1.5)
|
-
|
$ —
|
$(2.5)
|
$28.0
|
-
|
$32.5
|
|||
|
Operating
Income
|
$26.0
|
-
|
$29.5
|
$(5.0)
|
-
|
$(4.0)
|
$(2.5)
|
$18.5
|
-
|
$23.0
|
|||
|
Diluted
EPS
|
$0.72
|
-
|
$0.82
|
$(0.26)
|
-
|
$(0.24)
|
$(0.08)
|
$0.38
|
-
|
$0.50
|
|||
|
Full Year
2008
|
|||||||||||||
|
Revenues
|
$595.0
|
-
|
$615.0
|
$35.0
|
-
|
$40.0
|
$(5.0)
|
$625.0
|
-
|
$650.0
|
|||
|
EBITDA
|
$116.5
|
-
|
$124.5
|
$ 4.5
|
-
|
$ 6.5
|
$(2.5)
|
$118.5
|
-
|
$128.5
|
|||
|
Operating
Income
|
$94.5
|
-
|
$102.5
|
$(4.0)
|
-
|
$(2.0)
|
$(2.5)
|
$88.0
|
-
|
$98.0
|
|||
|
Diluted
EPS
|
$2.53
|
-
|
$2.77
|
$(0.35)
|
-
|
$(0.30)
|
$(0.08)
|
$2.10
|
-
|
$2.39
|
|||
—————————
|
(1)
|
The
Legacy Huron column represents revenues and earnings estimates without
giving consideration to the acquisition of Stockamp, the impact of the
elimination of the operational consulting group within the Corporate
Consulting segment, and the severance charges relating to the workforce
reductions as described above.
|
|
(2)
|
While
the Stockamp acquisition will be dilutive to 2008 earnings, it should be
accretive to 2009 earnings, as we estimate Stockamp will have revenues in
excess of $100 million for 2009 and should have comparable operating
metrics to our Health and Education Consulting segment. Based on a
preliminary valuation that is subject to refinement, estimated results for
the third quarter and full year 2008 also include estimates for intangible
assets amortization totaling $3.5 million and $5.0 million,
respectively, of which $2.0 million and $3.2 million,
respectively, represents rapid amortization. This column also includes the
estimated interest cost associated with the acquisition as well as
dilution resulting from shares issued in connection with the
acquisition.
|
|
(3)
|
The
Restructuring and Severance Impact column represents estimated revenues
and earnings foregone due to the elimination of the operational consulting
group and includes $2 million in severance charges relating to the
workforce reductions.
|
Share-based
compensation expense of approximately $7.5 million and $28.0 million is included
in the Q3 and full year 2008 estimates, respectively. Weighted average diluted
share counts for 2008 are estimated to be 19.9 million for Q3 2008 and 19.1
million for full year 2008.
Second
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 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
investor@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,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||||||
|
Revenues
|
$ | 143,408 | $ | 118,266 | $ | 282,802 | $ | 234,275 | ||||||||
|
Reimbursable
expenses
|
12,565 | 10,910 | 24,178 | 20,945 | ||||||||||||
|
Total revenues and reimbursable
expenses
|
155,973 | 129,176 | 306,980 | 255,220 | ||||||||||||
|
Direct costs and reimbursable
expenses (exclusive of depreciation and amortization shown in
operating expenses):
|
||||||||||||||||
|
Direct
costs
|
85,991 | 66,508 | 169,435 | 133,411 | ||||||||||||
|
Intangible
assets
amortization
|
24 | 2,304 | 48 | 4,544 | ||||||||||||
|
Reimbursable
expenses
|
12,578 | 10,814 | 24,188 | 20,931 | ||||||||||||
|
Total direct costs and
reimbursable expenses
|
98,593 | 79,626 | 193,671 | 158,886 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling,
general and
administrative
|
31,780 | 25,606 | 61,942 | 49,433 | ||||||||||||
|
Depreciation
and
amortization
|
5,370 | 4,177 | 10,508 | 8,219 | ||||||||||||
|
Total operating
expenses
|
37,150 | 29,783 | 72,450 | 57,652 | ||||||||||||
|
Operating
income
|
20,230 | 19,767 | 40,859 | 38,682 | ||||||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Interest
income (expense),
net
|
(2,294 | ) | (1,825 | ) | (4,127 | ) | (3,250 | ) | ||||||||
|
Other
income
(expense)
|
(35 | ) | 95 | (329 | ) | 125 | ||||||||||
|
Total other
expense
|
(2,329 | ) | (1,730 | ) | (4,456 | ) | (3,125 | ) | ||||||||
|
Income
before provision for
income taxes
|
17,901 | 18,037 | 36,403 | 35,557 | ||||||||||||
|
Provision
for income
taxes
|
8,092 | 7,936 | 16,381 | 15,645 | ||||||||||||
|
Net
income
|
$ | 9,809 | $ | 10,101 | $ | 20,022 | $ | 19,912 | ||||||||
|
Earnings
per share:
|
||||||||||||||||
|
Basic
|
$ | 0.56 | $ | 0.60 | $ | 1.15 | $ | 1.19 | ||||||||
|
Diluted
|
$ | 0.54 | $ | 0.56 | $ | 1.10 | $ | 1.11 | ||||||||
|
Weighted
average shares used in calculating earnings per share:
|
||||||||||||||||
|
Basic
|
17,558 | 16,842 | 17,465 | 16,784 | ||||||||||||
|
Diluted
|
18,178 | 17,993 | 18,197 | 17,881 | ||||||||||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except share and per share amounts)
(Unaudited)
|
June
30,
2008
|
December
31,
2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 14,335 | $ | 2,993 | ||||
|
Receivables from clients,
net
|
90,198 | 86,867 | ||||||
|
Unbilled services,
net
|
43,255 | 28,245 | ||||||
|
Income tax
receivable
|
7,636 | 13,492 | ||||||
|
Deferred income
taxes
|
13,960 | 13,680 | ||||||
|
Prepaid expenses and other
current
assets
|
13,298 | 10,435 | ||||||
|
Total current
assets
|
182,682 | 155,712 | ||||||
|
Property
and equipment,
net
|
44,378 | 38,147 | ||||||
|
Deferred
income
taxes
|
2,662 | 3,628 | ||||||
|
Other
non-current
assets
|
12,876 | 8,737 | ||||||
|
Intangible
assets,
net
|
10,519 | 13,936 | ||||||
|
Goodwill
|
246,386 | 223,053 | ||||||
|
Total
assets
|
$ | 499,503 | $ | 443,213 | ||||
|
Liabilities
and stockholders’ equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 8,138 | $ | 5,823 | ||||
|
Accrued
expenses
|
16,206 | 17,748 | ||||||
|
Accrued payroll and related
benefits
|
29,490 | 58,279 | ||||||
|
Accrued consideration for
business
acquisitions
|
— | 32,422 | ||||||
|
Income tax
payable
|
2,843 | 1,342 | ||||||
|
Deferred
revenues
|
7,377 | 5,278 | ||||||
|
Note payable and current portion
of capital lease obligations
|
23,246 | 1,309 | ||||||
|
Total current
liabilities
|
87,300 | 122,201 | ||||||
|
Non-current
liabilities:
|
||||||||
|
Deferred compensation and other
liabilities
|
5,233 | 3,795 | ||||||
|
Capital lease obligations, net
of current
portion
|
127 | 234 | ||||||
|
Bank
borrowings
|
179,500 | 123,500 | ||||||
|
Deferred lease
incentives
|
9,046 | 9,699 | ||||||
|
Total non-current
liabilities
|
193,906 | 137,228 | ||||||
|
Commitments
and
contingencies
|
— | — | ||||||
|
Stockholders’
equity
|
||||||||
|
Common
stock; $0.01 par value; 500,000,000 shares authorized; 19,553,211and
19,279,176 shares issued at June 30, 2008 and
December
31, 2007, respectively
|
185 | 182 | ||||||
|
Treasury
stock, at cost, 328,428 and 589,755 shares at June 30, 2008
andDecember 31, 2007, respectively
|
(18,297 | ) | (20,703 | ) | ||||
|
Additional
paid-in
capital
|
128,128 | 116,148 | ||||||
|
Retained
earnings
|
108,123 | 88,101 | ||||||
|
Accumulated
other comprehensive
income
|
158 | 56 | ||||||
|
Total stockholders’
equity
|
218,297 | 183,784 | ||||||
|
Total
liabilities and stockholders’
equity
|
$ | 499,503 | $ | 443,213 | ||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
Six
months ended
June 30,
|
||||||||
|
2008
|
2007
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 20,022 | $ | 19,912 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation and
amortization
|
10,556 | 12,763 | ||||||
|
Deferred income
taxes
|
687 | (7,171 | ) | |||||
|
Share-based
compensation
|
13,568 | 9,051 | ||||||
|
Allowances for doubtful accounts
and unbilled
services
|
1,172 | 4,219 | ||||||
|
Changes in operating assets and
liabilities, net of businesses acquired:
|
||||||||
|
Increase in receivables from
clients
|
(1,647 | ) | (19,623 | ) | ||||
|
Increase in unbilled
services
|
(17,866 | ) | (12,741 | ) | ||||
|
Decrease in income tax
receivable / payable,
net
|
7,356 | 1,987 | ||||||
|
Increase in other
assets
|
(5,755 | ) | (8,572 | ) | ||||
|
Increase in accounts payable
and accrued
liabilities
|
3,357 | 3,880 | ||||||
|
Decrease in accrued payroll and
related
benefits
|
(28,789 | ) | (7,324 | ) | ||||
|
Increase (decrease) in deferred
revenues
|
2,099 | (1,599 | ) | |||||
|
Net cash provided by (used in)
operating
activities
|
4,760 | (5,218 | ) | |||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of property and equipment,
net
|
(13,324 | ) | (8,094 | ) | ||||
|
Net
investment in life insurance
policies
|
(1,249 | ) | (1,641 | ) | ||||
|
Purchases
of businesses, net of cash
acquired
|
(34,554 | ) | (98,345 | ) | ||||
|
Net cash used in investing
activities
|
(49,127 | ) | (108,080 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from exercise of stock
options
|
181 | 405 | ||||||
|
Shares
redeemed for employee tax
withholdings
|
(5,744 | ) | (1,894 | ) | ||||
|
Tax
benefit from share-based
compensation
|
6,384 | 3,866 | ||||||
|
Proceeds
from borrowings under line of
credit
|
173,500 | 184,500 | ||||||
|
Repayments
on line of
credit
|
(117,500 | ) | (85,500 | ) | ||||
|
Principal
payment of note payable and capital lease
obligations
|
(1,214 | ) | (1,141 | ) | ||||
|
Net cash provided by financing
activities
|
55,607 | 100,236 | ||||||
|
Effect
of exchange rate changes on
cash
|
102 | (73 | ) | |||||
|
Net
increase (decrease) in cash and cash
equivalents
|
11,342 | (13,135 | ) | |||||
|
Cash
and cash equivalents at beginning of the
period
|
2,993 | 16,572 | ||||||
|
Cash
and cash equivalents at end of the
period
|
$ | 14,335 | $ | 3,437 | ||||
|
Supplemental
disclosure of cash flow information:
|
||||||||
|
Non-cash
investing activity:
|
||||||||
|
Issuance of note payable for
purchase of a
business
|
$ | 23,000 | $ | — | ||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
|
Three
Months Ended
June 30,
|
||||||||||||
|
Segment
and Consolidated Operating Results (in thousands):
|
2008
|
2007
|
Percent
Increase (Decrease)
|
|||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 56,696 | $ | 42,810 | 32.4 | % | ||||||
|
Financial
Consulting
|
34,789 | 32,669 | 6.5 | % | ||||||||
|
Legal
Consulting
|
30,498 | 22,795 | 33.8 | % | ||||||||
|
Corporate
Consulting
|
21,425 | 19,992 | 7.2 | % | ||||||||
|
Total
revenues
|
143,408 | 118,266 | 21.3 | % | ||||||||
|
Total
reimbursable
expenses
|
12,565 | 10,910 | 15.2 | % | ||||||||
|
Total
revenues and reimbursable
expenses
|
$ | 155,973 | $ | 129,176 | 20.7 | % | ||||||
|
Operating
income:
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 22,679 | $ | 14,021 | 61.8 | % | ||||||
|
Financial
Consulting
|
7,980 | 15,281 | (47.8 | %) | ||||||||
|
Legal
Consulting
|
10,076 | 7,272 | 38.6 | % | ||||||||
|
Corporate
Consulting
|
6,617 | 5,920 | 11.8 | % | ||||||||
|
Total segment operating
income
|
47,352 | 42,494 | 11.4 | % | ||||||||
|
Operating
expenses not allocated to
segments
|
27,122 | 22,727 | 19.3 | % | ||||||||
|
Total
operating
income
|
$ | 20,230 | $ | 19,767 | 2.3 | % | ||||||
|
Other
Operating Data:
|
||||||||||||
|
Number
of full-time billable consultants (at period end)
(4):
|
||||||||||||
|
Health
and Education
Consulting
|
489 | 355 | 37.7 | % | ||||||||
|
Financial
Consulting
|
338 | 291 | 16.2 | % | ||||||||
|
Legal
Consulting
|
159 | 126 | 26.2 | % | ||||||||
|
Corporate
Consulting
|
221 | 168 | 31.5 | % | ||||||||
|
Total
|
1,207 | 940 | 28.4 | % | ||||||||
|
Average
number of full-time billable consultants (for the period) (4):
|
||||||||||||
|
Health
and Education
Consulting
|
481 | 356 | ||||||||||
|
Financial
Consulting
|
352 | 288 | ||||||||||
|
Legal
Consulting
|
166 | 122 | ||||||||||
|
Corporate
Consulting
|
225 | 170 | ||||||||||
|
Total
|
1,224 | 936 | ||||||||||
|
Full-time
billable consultant utilization rate (5):
|
||||||||||||
|
Health
and Education
Consulting
|
80.8 | % | 80.5 | % | ||||||||
|
Financial
Consulting
|
51.9 | % | 74.6 | % | ||||||||
|
Legal
Consulting
|
62.6 | % | 79.0 | % | ||||||||
|
Corporate
Consulting
|
62.3 | % | 77.1 | % | ||||||||
|
Total
|
66.8 | % | 77.9 | % | ||||||||
|
Full-time
billable consultant average billing rate per hour (6):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 267 | $ | 255 | ||||||||
|
Financial
Consulting
|
$ | 285 | $ | 311 | ||||||||
|
Legal
Consulting
|
$ | 236 | $ | 247 | ||||||||
|
Corporate
Consulting
|
$ | 303 | $ | 311 | ||||||||
|
Total
|
$ | 273 | $ | 281 | ||||||||
|
Revenue
per full-time billable consultant (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 106 | $ | 99 | ||||||||
|
Financial
Consulting
|
$ | 66 | $ | 111 | ||||||||
|
Legal
Consulting
|
$ | 68 | $ | 85 | ||||||||
|
Corporate
Consulting
|
$ | 91 | $ | 114 | ||||||||
|
Total
|
$ | 87 | $ | 104 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Three
Months Ended
June 30,
|
||||||||||||
|
Other
Operating Data:
|
2008
|
2007
|
Percent
Increase (Decrease)
|
|||||||||
|
Average
number of full-time equivalents (for the period) (7):
|
||||||||||||
|
Health
and Education
Consulting
|
50 | 60 | (16.7 | %) | ||||||||
|
Financial
Consulting
|
185 | 6 | N/M | |||||||||
|
Legal
Consulting
|
619 | 341 | 81.5 | % | ||||||||
|
Corporate
Consulting
|
9 | 6 | 50.0 | % | ||||||||
|
Total
|
863 | 413 | 109.0 | % | ||||||||
|
Revenue
per full-time equivalents (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 113 | $ | 125 | ||||||||
|
Financial
Consulting
|
$ | 63 | $ | 97 | ||||||||
|
Legal
Consulting
|
$ | 31 | $ | 36 | ||||||||
|
Corporate
Consulting
|
$ | 98 | $ | 91 | ||||||||
|
Total
|
$ | 43 | $ | 51 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Six
Months Ended
June 30,
|
||||||||||||
|
Segment
and Consolidated Operating Results (in thousands):
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||
|
Health
and Education Consulting
|
$ | 107,784 | $ | 81,662 | 32.0 | % | ||||||
|
Financial
Consulting
|
73,600 | 69,281 | 6.2 | % | ||||||||
|
Legal
Consulting
|
55,721 | 46,066 | 21.0 | % | ||||||||
|
Corporate
Consulting
|
45,697 | 37,266 | 22.6 | % | ||||||||
|
Total revenues
|
282,802 | 234,275 | 20.7 | % | ||||||||
|
Total
reimbursable expenses
|
24,178 | 20,945 | 15.4 | % | ||||||||
|
Total
revenues and reimbursable expenses
|
$ | 306,980 | $ | 255,220 | 20.3 | % | ||||||
|
Operating
income:
|
||||||||||||
|
Health
and Education Consulting
|
$ | 44,811 | $ | 26,221 | 70.9 | % | ||||||
|
Financial
Consulting
|
17,569 | 31,456 | (44.1 | %) | ||||||||
|
Legal
Consulting
|
16,663 | 15,174 | 9.8 | % | ||||||||
|
Corporate
Consulting
|
15,994 | 10,116 | 58.1 | % | ||||||||
|
Total segment operating
income
|
95,037 | 82,967 | 14.5 | % | ||||||||
|
Operating
expenses not allocated to segments
|
54,178 | 44,285 | 22.3 | % | ||||||||
|
Total
operating income
|
$ | 40,859 | $ | 38,682 | 5.6 | % | ||||||
|
Other
Operating Data:
|
||||||||||||
|
Number
of full-time billable consultants (at period end)
(4):
|
||||||||||||
|
Health
and Education Consulting
|
489 | 355 | 37.7 | % | ||||||||
|
Financial
Consulting
|
338 | 291 | 16.2 | % | ||||||||
|
Legal
Consulting
|
159 | 126 | 26.2 | % | ||||||||
|
Corporate
Consulting
|
221 | 168 | 31.5 | % | ||||||||
|
Total
|
1,207 | 940 | 28.4 | % | ||||||||
|
Average
number of full-time billable consultants (for the period) (4):
|
||||||||||||
|
Health
and Education Consulting
|
467 | 350 | ||||||||||
|
Financial
Consulting
|
360 | 284 | ||||||||||
|
Legal
Consulting
|
170 | 122 | ||||||||||
|
Corporate
Consulting
|
226 | 170 | ||||||||||
|
Total
|
1,223 | 926 | ||||||||||
|
Full-time
billable consultant utilization rate (5):
|
||||||||||||
|
Health
and Education Consulting
|
79.5 | % | 79.4 | % | ||||||||
|
Financial
Consulting
|
51.9 | % | 79.8 | % | ||||||||
|
Legal
Consulting
|
60.1 | % | 77.3 | % | ||||||||
|
Corporate
Consulting
|
63.8 | % | 72.7 | % | ||||||||
|
Total
|
65.9 | % | 78.0 | % | ||||||||
|
Full-time
billable consultant average billing rate per hour (6):
|
||||||||||||
|
Health
and Education Consulting
|
$ | 268 | $ | 252 | ||||||||
|
Financial
Consulting
|
$ | 276 | $ | 304 | ||||||||
|
Legal
Consulting
|
$ | 235 | $ | 243 | ||||||||
|
Corporate
Consulting
|
$ | 317 | $ | 302 | ||||||||
|
Total
|
$ | 275 | $ | 276 | ||||||||
|
Revenue
per full-time billable consultant (in thousands):
|
||||||||||||
|
Health
and Education Consulting
|
$ | 210 | $ | 193 | ||||||||
|
Financial
Consulting
|
$ | 131 | $ | 237 | ||||||||
|
Legal
Consulting
|
$ | 133 | $ | 163 | ||||||||
|
Corporate
Consulting
|
$ | 196 | $ | 213 | ||||||||
|
Total
|
$ | 174 | $ | 206 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Six
Months Ended
June 30,
|
||||||||||||
|
Other
Operating Data:
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Average
number of full-time equivalents (for the period) (7):
|
||||||||||||
|
Health
and Education Consulting
|
43 | 60 | (28.3 | %) | ||||||||
|
Financial
Consulting
|
212 | 8 | N/M | |||||||||
|
Legal
Consulting
|
544 | 368 | 47.8 | % | ||||||||
|
Corporate
Consulting
|
8 | 5 | 60.0 | % | ||||||||
|
Total
|
807 | 441 | 83.0 | % | ||||||||
|
Revenue
per full-time equivalents (in thousands):
|
||||||||||||
|
Health
and Education Consulting
|
$ | 223 | $ | 234 | ||||||||
|
Financial
Consulting
|
$ | 124 | $ | 256 | ||||||||
|
Legal
Consulting
|
$ | 61 | $ | 71 | ||||||||
|
Corporate
Consulting
|
$ | 181 | $ | 223 | ||||||||
|
Total
|
$ | 87 | $ | 98 | ||||||||
—————————
|
(4)
|
Consists
of our full-time professionals who provide consulting services and
generate revenues based on the number of hours
worked.
|
|
(5)
|
Utilization
rate for our full-time billable consultants is calculated by dividing the
number of hours all our full-time billable consultants worked on client
assignments during a period by the total available working hours for all
of these consultants during the same period, assuming a forty-hour work
week, less paid holidays and vacation
days.
|
|
(6)
|
Average
billing rate per hour for our full-time billable consultants is calculated
by dividing revenues for a period by the number of hours worked on client
assignments during the same period.
|
|
(7)
|
Consists
of consultants who work variable schedules as needed by 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.
|
|
N/M
|
Not
meaningful, change greater than
500%.
|
HURON
CONSULTING GROUP INC.
RECONCILIATION
OF OPERATING INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION (8)
(in
thousands)
|
Three
months ended
June 30,
|
Six
months ended
June 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
|
$ | 143,408 | $ | 118,266 | $ | 282,802 | $ | 234,275 | ||||||||
|
Operating
income
|
$ | 20,230 | $ | 19,767 | $ | 40,859 | $ | 38,682 | ||||||||
|
Add
back:
|
||||||||||||||||
|
Depreciation and
amortization
|
5,394 | 6,481 | 10,556 | 12,763 | ||||||||||||
|
Earnings
before interest, taxes, depreciation and
amortization (EBITDA) (8)
|
25,624 | 26,248 | 51,415 | 51,445 | ||||||||||||
|
Add
back:
|
||||||||||||||||
|
Share-based
compensation
|
7,150 | 4,845 | 13,568 | 9,051 | ||||||||||||
|
Adjusted
EBITDA (8)
|
$ | 32,774 | $ | 31,093 | $ | 64,983 | $ | 60,496 | ||||||||
|
Adjusted
EBITDA as a percentage of revenues
|
22.9 | % | 26.3 | % | 23.0 | % | 25.8 | % | ||||||||
RECONCILIATION
OF NET INCOME TO ADJUSTED NET INCOME (8)
(in
thousands)
|
Three
months ended
June 30,
|
Six
months ended
June 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
income
|
$ | 9,809 | $ | 10,101 | $ | 20,022 | $ | 19,912 | ||||||||
|
Diluted
earnings per
share
|
$ | 0.54 | $ | 0.56 | $ | 1.10 | $ | 1.11 | ||||||||
|
Add
back:
|
||||||||||||||||
|
Amortization of intangible
assets
|
1,694 | 3,868 | 3,418 | 7,657 | ||||||||||||
|
Share-based
compensation
|
7,150 | 4,845 | 13,568 | 9,051 | ||||||||||||
|
Tax
effect
|
(3,618 | ) | (3,564 | ) | (6,948 | ) | (6,834 | ) | ||||||||
|
Total adjustments, net of
tax
|
5,226 | 5,149 | 10,038 | 9,874 | ||||||||||||
|
Adjusted
net income (8)
|
$ | 15,035 | $ | 15,250 | $ | 30,060 | $ | 29,786 | ||||||||
|
Adjusted
diluted earnings per share (8)
|
$ | 0.83 | $ | 0.85 | $ | 1.65 | $ | 1.67 | ||||||||
|
|
————————
|
(8)
|
In
evaluating the Company’s financial performance, management uses earnings
before interest, taxes, depreciation and amortization (“EBITDA”), adjusted
EBITDA, 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.
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.
|