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
|
October 30,
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 October 30, 2008, Huron
Consulting Group Inc. issued a press release announcing its financial results
for the three and nine months ended September 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 October 30, 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:
|
October
30, 2008
|
/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 October 30,
2008
|
EXHIBIT 99.1
[Huron Consulting Group Logo]
News
FOR IMMEDIATE RELEASE
October
30, 2008
Huron
Consulting Group Reports Third Quarter 2008 Financial Results
|
·
|
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.
|
CHICAGO –
October 30, 2008 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading
provider of financial and operational consulting services, today announced
financial results for the third quarter ended September 30, 2008.
“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
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
September 30,
|
Nine
months ended
September 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||||||
|
Revenues
|
$ | 168,659 | $ | 134,051 | $ | 451,461 | $ | 368,326 | ||||||||
|
Reimbursable
expenses
|
16,696 | 11,286 | 40,874 | 32,231 | ||||||||||||
|
Total revenues and reimbursable
expenses
|
185,355 | 145,337 | 492,335 | 400,557 | ||||||||||||
|
Direct costs and reimbursable
expenses (exclusive of depreciation and
amortization shown in operating expenses):
|
||||||||||||||||
|
Direct
costs
|
100,263 | 80,237 | 269,698 | 213,648 | ||||||||||||
|
Intangible
assets
amortization
|
3,036 | 2,208 | 3,084 | 6,752 | ||||||||||||
|
Reimbursable
expenses
|
16,734 | 11,108 | 40,922 | 32,039 | ||||||||||||
|
Total direct costs and
reimbursable expenses
|
120,033 | 93,553 | 313,704 | 252,439 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling,
general and
administrative
|
34,435 | 25,675 | 96,377 | 75,108 | ||||||||||||
|
Depreciation
and
amortization
|
6,260 | 4,283 | 16,768 | 12,502 | ||||||||||||
|
Restructuring
charges
|
2,343 | — | 2,343 | — | ||||||||||||
|
Total operating
expenses
|
43,038 | 29,958 | 115,488 | 87,610 | ||||||||||||
|
Operating
income
|
22,284 | 21,826 | 63,143 | 60,508 | ||||||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Interest
income (expense),
net
|
(4,938 | ) | (2,621 | ) | (9,065 | ) | (5,871 | ) | ||||||||
|
Other
income
(expense)
|
(518 | ) | 11 | (847 | ) | 136 | ||||||||||
|
Total other
expense
|
(5,456 | ) | (2,610 | ) | (9,912 | ) | (5,735 | ) | ||||||||
|
Income
before provision for
income taxes
|
16,828 | 19,216 | 53,231 | 54,773 | ||||||||||||
|
Provision
for income
taxes
|
7,998 | 8,729 | 24,379 | 24,374 | ||||||||||||
|
Net
income
|
$ | 8,830 | $ | 10,487 | $ | 28,852 | $ | 30,399 | ||||||||
|
Earnings
per share:
|
||||||||||||||||
|
Basic
|
$ | 0.46 | $ | 0.61 | $ | 1.61 | $ | 1.80 | ||||||||
|
Diluted
|
$ | 0.44 | $ | 0.58 | $ | 1.54 | $ | 1.69 | ||||||||
|
Weighted
average shares used in calculating earnings per share:
|
||||||||||||||||
|
Basic
|
18,901 | 17,033 | 17,947 | 16,868 | ||||||||||||
|
Diluted
|
19,845 | 18,137 | 18,750 | 17,967 | ||||||||||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except share and per share amounts)
(Unaudited)
|
September
30,
2008
|
December
31,
2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 14,545 | $ | 2,993 | ||||
|
Receivables from clients,
net
|
102,267 | 86,867 | ||||||
|
Unbilled services,
net
|
61,053 | 28,245 | ||||||
|
Income tax
receivable
|
6,469 | 13,492 | ||||||
|
Deferred income
taxes
|
15,381 | 13,680 | ||||||
|
Prepaid expenses and other
current
assets
|
12,943 | 10,435 | ||||||
|
Total current
assets
|
212,658 | 155,712 | ||||||
|
Property
and equipment,
net
|
46,530 | 38,147 | ||||||
|
Deferred
income
taxes
|
2,811 | 3,628 | ||||||
|
Other
non-current
assets
|
16,259 | 8,737 | ||||||
|
Intangible
assets,
net
|
38,195 | 13,936 | ||||||
|
Goodwill
|
451,271 | 223,053 | ||||||
|
Total
assets
|
$ | 767,724 | $ | 443,213 | ||||
|
Liabilities
and stockholders’ equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 8,586 | $ | 5,823 | ||||
|
Accrued
expenses
|
22,131 | 15,208 | ||||||
|
Accrued payroll and related
benefits
|
49,931 | 58,279 | ||||||
|
Accrued consideration for
business
acquisitions
|
21,152 | 34,962 | ||||||
|
Income tax
payable
|
3,500 | 1,342 | ||||||
|
Deferred
revenues
|
21,175 | 5,278 | ||||||
|
Note payable and current portion
of capital lease obligations
|
454 | 1,309 | ||||||
|
Total current
liabilities
|
126,929 | 122,201 | ||||||
|
Non-current
liabilities:
|
||||||||
|
Deferred compensation and other
liabilities
|
5,273 | 3,795 | ||||||
|
Capital lease obligations, net
of current
portion
|
252 | 234 | ||||||
|
Bank
borrowings
|
335,000 | 123,500 | ||||||
|
Deferred lease
incentives
|
8,908 | 9,699 | ||||||
|
Total non-current
liabilities
|
349,433 | 137,228 | ||||||
|
Commitments
and
contingencies
|
— | — | ||||||
|
Stockholders’
equity
|
||||||||
|
Common
stock; $0.01 par value; 500,000,000 shares authorized; 21,163,784 and
19,279,176 shares issued at
September 30, 2008 and December 31,2007, respectively
|
199 | 182 | ||||||
|
Treasury
stock, at cost, 376,479 and 589,755 shares at September 30, 2008 and
December 31, 2007, respectively
|
(20,045 | ) | (20,703 | ) | ||||
|
Additional
paid-in
capital
|
194,689 | 116,148 | ||||||
|
Retained
earnings
|
116,953 | 88,101 | ||||||
|
Accumulated
other comprehensive income
(loss)
|
(434 | ) | 56 | |||||
|
Total stockholders’
equity
|
291,362 | 183,784 | ||||||
|
Total
liabilities and stockholders’
equity
|
$ | 767,724 | $ | 443,213 | ||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
Nine
months ended
September 30,
|
||||||||
|
2008
|
2007
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 28,852 | $ | 30,399 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation and
amortization
|
19,852 | 19,254 | ||||||
|
Deferred income
taxes
|
375 | (10,165 | ) | |||||
|
Share-based
compensation
|
20,421 | 14,238 | ||||||
|
Allowances for doubtful accounts
and unbilled
services
|
3,859 | 5,511 | ||||||
|
Other
|
— | 8 | ||||||
|
Changes in operating assets and
liabilities, net of businesses acquired:
|
||||||||
|
Increase in receivables from
clients
|
(6,354 | ) | (28,290 | ) | ||||
|
Increase in unbilled
services
|
(29,867 | ) | (20,674 | ) | ||||
|
Decrease (increase) in income
tax receivable / payable,
net
|
9,181 | (319 | ) | |||||
|
Increase in other
assets
|
(7,494 | ) | (4,996 | ) | ||||
|
Increase in accounts payable
and accrued
liabilities
|
8,805 | 2,929 | ||||||
|
Increase (decrease) in accrued
payroll and related
benefits
|
(11,874 | ) | 8,471 | |||||
|
Increase (decrease) in deferred
revenues
|
8,653 | (3,814 | ) | |||||
|
Net cash provided by operating
activities
|
44,409 | 12,552 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of property and equipment,
net
|
(17,478 | ) | (11,850 | ) | ||||
|
Net
investment in life insurance
policies
|
(1,326 | ) | (1,985 | ) | ||||
|
Purchases
of businesses, net of cash
acquired
|
(227,537 | ) | (160,515 | ) | ||||
|
Net cash used in investing
activities
|
(246,341 | ) | (174,350 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from exercise of stock
options
|
231 | 431 | ||||||
|
Shares
redeemed for employee tax
withholdings
|
(5,773 | ) | (5,621 | ) | ||||
|
Tax
benefit from share-based
compensation
|
9,337 | 8,772 | ||||||
|
Proceeds
from borrowings under line of
credit
|
575,500 | 292,000 | ||||||
|
Repayments
on line of
credit
|
(364,000 | ) | (145,500 | ) | ||||
|
Principal
payment of note payable and capital lease
obligations
|
(1,321 | ) | (1,139 | ) | ||||
|
Net cash provided by financing
activities
|
213,974 | 148,943 | ||||||
|
Effect
of exchange rate changes on
cash
|
(490 | ) | 25 | |||||
|
Net
increase (decrease) in cash and cash
equivalents
|
11,552 | (12,830 | ) | |||||
|
Cash
and cash equivalents at beginning of the
period
|
2,993 | 16,572 | ||||||
|
Cash
and cash equivalents at end of the
period
|
$ | 14,545 | $ | 3,742 | ||||
|
Supplemental
disclosure of cash flow information:
|
||||||||
|
Non-cash
investing activity:
|
||||||||
|
Issuance
of common stock in connection with business combinations
|
$ | 55,000 | $ | — | ||||
|
Issuance
of common stock in connection with business combination classified as a
liability
|
$ | 15,000 | $ | — | ||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
|
Three
Months Ended
September 30,
|
||||||||||||
|
Segment
and Consolidated Operating Results (in thousands):
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||
|
Health
and Education Consulting (1)
|
$ | 77,653 | $ | 49,767 | 56.0 | % | ||||||
|
Financial
Consulting
|
33,929 | 39,983 | (15.1 | %) | ||||||||
|
Legal
Consulting
|
38,137 | 23,346 | 63.4 | % | ||||||||
|
Corporate
Consulting
|
18,940 | 20,955 | (9.6 | %) | ||||||||
|
Total
revenues
|
168,659 | 134,051 | 25.8 | % | ||||||||
|
Total
reimbursable
expenses
|
16,696 | 11,286 | 47.9 | % | ||||||||
|
Total
revenues and reimbursable
expenses
|
$ | 185,355 | $ | 145,337 | 27.5 | % | ||||||
|
Operating
income (2):
|
||||||||||||
|
Health
and Education Consulting (1)
|
$ | 22,368 | $ | 18,783 | 19.1 | % | ||||||
|
Financial
Consulting
|
10,005 | 11,656 | (14.2 | %) | ||||||||
|
Legal
Consulting
|
15,724 | 7,243 | 117.1 | % | ||||||||
|
Corporate
Consulting
|
3,319 | 7,036 | (52.8 | %) | ||||||||
|
Total segment operating
income
|
51,416 | 44,718 | 15.0 | % | ||||||||
|
Operating
expenses not allocated to
segments
|
29,132 | 22,892 | 27.3 | % | ||||||||
|
Total
operating
income
|
$ | 22,284 | $ | 21,826 | 2.1 | % | ||||||
|
Other
Operating Data:
|
||||||||||||
|
Number
of full-time billable consultants (at period end)
(3):
|
||||||||||||
|
Health
and Education
Consulting
|
830 | 417 | 99.0 | % | ||||||||
|
Financial
Consulting
|
316 | 358 | (11.7 | %) | ||||||||
|
Legal
Consulting
|
149 | 165 | (9.7 | %) | ||||||||
|
Corporate
Consulting
|
185 | 218 | (15.1 | %) | ||||||||
|
Total
|
1,480 | 1,158 | 27.8 | % | ||||||||
|
Average
number of full-time billable consultants (for the period) (3):
|
||||||||||||
|
Health
and Education
Consulting
|
800 | 390 | ||||||||||
|
Financial
Consulting
|
322 | 321 | ||||||||||
|
Legal
Consulting
|
155 | 143 | ||||||||||
|
Corporate
Consulting
|
211 | 194 | ||||||||||
|
Total
|
1,488 | 1,048 | ||||||||||
|
Full-time
billable consultant utilization rate (4):
|
||||||||||||
|
Health
and Education
Consulting
|
81.2 | % | 80.2 | % | ||||||||
|
Financial
Consulting
|
57.0 | % | 68.7 | % | ||||||||
|
Legal
Consulting
|
66.3 | % | 74.6 | % | ||||||||
|
Corporate
Consulting
|
59.8 | % | 69.6 | % | ||||||||
|
Total
|
71.3 | % | 73.9 | % | ||||||||
|
Full-time
billable consultant average billing rate per hour (5):
|
||||||||||||
|
Health
and Education Consulting (6)
|
$ | 231 | $ | 292 | ||||||||
|
Financial
Consulting
|
$ | 281 | $ | 276 | ||||||||
|
Legal
Consulting
|
$ | 243 | $ | 243 | ||||||||
|
Corporate
Consulting
|
$ | 309 | $ | 315 | ||||||||
|
Total
|
$ | 250 | $ | 286 | ||||||||
|
Revenue
per full-time billable consultant (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 87 | $ | 110 | ||||||||
|
Financial
Consulting
|
$ | 74 | $ | 86 | ||||||||
|
Legal
Consulting
|
$ | 73 | $ | 79 | ||||||||
|
Corporate
Consulting
|
$ | 86 | $ | 106 | ||||||||
|
Total
|
$ | 82 | $ | 98 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Three
Months Ended
September 30,
|
||||||||||||
|
Other
Operating Data:
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Average
number of full-time equivalents (for the period) (7):
|
||||||||||||
|
Health
and Education
Consulting
|
103 | 65 | 58.5 | % | ||||||||
|
Financial
Consulting
|
160 | 210 | (23.8 | %) | ||||||||
|
Legal
Consulting
|
676 | 342 | 97.7 | % | ||||||||
|
Corporate
Consulting
|
8 | 5 | 60.0 | % | ||||||||
|
Total
|
947 | 622 | 52.3 | % | ||||||||
|
Revenue
per full-time equivalents (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 81 | $ | 104 | ||||||||
|
Financial
Consulting
|
$ | 64 | $ | 59 | ||||||||
|
Legal
Consulting
|
$ | 40 | $ | 35 | ||||||||
|
Corporate
Consulting
|
$ | 103 | $ | 76 | ||||||||
|
Total
|
$ | 49 | $ | 51 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Nine
Months Ended
September 30,
|
||||||||||||
|
Segment
and Consolidated Operating Results (in thousands):
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||
|
Health
and Education Consulting (1)
|
$ | 185,437 | $ | 131,429 | 41.1 | % | ||||||
|
Financial
Consulting
|
107,529 | 109,264 | (1.6 | %) | ||||||||
|
Legal
Consulting
|
93,858 | 69,412 | 35.2 | % | ||||||||
|
Corporate
Consulting
|
64,637 | 58,221 | 11.0 | % | ||||||||
|
Total revenues
|
451,461 | 368,326 | 22.6 | % | ||||||||
|
Total
reimbursable expenses
|
40,874 | 32,231 | 26.8 | % | ||||||||
|
Total
revenues and reimbursable expenses
|
$ | 492,335 | $ | 400,557 | 22.9 | % | ||||||
|
Operating
income (2):
|
||||||||||||
|
Health
and Education Consulting (1)
|
$ | 67,179 | $ | 45,004 | 49.3 | % | ||||||
|
Financial
Consulting
|
27,574 | 43,112 | (36.0 | %) | ||||||||
|
Legal
Consulting
|
32,387 | 22,417 | 44.5 | % | ||||||||
|
Corporate
Consulting
|
19,313 | 17,152 | 12.6 | % | ||||||||
|
Total segment operating
income
|
146,453 | 127,685 | 14.7 | % | ||||||||
|
Operating
expenses not allocated to segments
|
83,310 | 67,177 | 24.0 | % | ||||||||
|
Total
operating income
|
$ | 63,143 | $ | 60,508 | 4.4 | % | ||||||
|
Other
Operating Data:
|
||||||||||||
|
Number
of full-time billable consultants (at period end)
(3):
|
||||||||||||
|
Health
and Education Consulting
|
830 | 417 | 99.0 | % | ||||||||
|
Financial
Consulting
|
316 | 358 | (11.7 | %) | ||||||||
|
Legal
Consulting
|
149 | 165 | (9.7 | %) | ||||||||
|
Corporate
Consulting
|
185 | 218 | (15.1 | %) | ||||||||
|
Total
|
1,480 | 1,158 | 27.8 | % | ||||||||
|
Average
number of full-time billable consultants (for the period) (3):
|
||||||||||||
|
Health
and Education Consulting
|
575 | 367 | ||||||||||
|
Financial
Consulting
|
347 | 298 | ||||||||||
|
Legal
Consulting
|
166 | 129 | ||||||||||
|
Corporate
Consulting
|
220 | 182 | ||||||||||
|
Total
|
1,308 | 976 | ||||||||||
|
Full-time
billable consultant utilization rate (4):
|
||||||||||||
|
Health
and Education Consulting
|
80.2 | % | 79.7 | % | ||||||||
|
Financial
Consulting
|
53.4 | % | 75.8 | % | ||||||||
|
Legal
Consulting
|
62.0 | % | 76.3 | % | ||||||||
|
Corporate
Consulting
|
62.5 | % | 71.6 | % | ||||||||
|
Total
|
67.9 | % | 76.5 | % | ||||||||
|
Full-time
billable consultant average billing rate per hour (5):
|
||||||||||||
|
Health
and Education Consulting (6)
|
$ | 252 | $ | 266 | ||||||||
|
Financial
Consulting
|
$ | 278 | $ | 295 | ||||||||
|
Legal
Consulting
|
$ | 238 | $ | 243 | ||||||||
|
Corporate
Consulting
|
$ | 314 | $ | 307 | ||||||||
|
Total
|
$ | 265 | $ | 279 | ||||||||
|
Revenue
per full-time billable consultant (in thousands):
|
||||||||||||
|
Health
and Education Consulting
|
$ | 291 | $ | 301 | ||||||||
|
Financial
Consulting
|
$ | 205 | $ | 318 | ||||||||
|
Legal
Consulting
|
$ | 204 | $ | 242 | ||||||||
|
Corporate
Consulting
|
$ | 283 | $ | 312 | ||||||||
|
Total
|
$ | 256 | $ | 301 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Nine
Months Ended
September 30,
|
||||||||||||
|
Other
Operating Data:
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Average
number of full-time equivalents (for the period) (7):
|
||||||||||||
|
Health
and Education Consulting
|
63 | 62 | 1.6 | % | ||||||||
|
Financial
Consulting
|
194 | 75 | 158.7 | % | ||||||||
|
Legal
Consulting
|
587 | 358 | 64.0 | % | ||||||||
|
Corporate
Consulting
|
7 | 5 | 40.0 | % | ||||||||
|
Total
|
851 | 500 | 70.2 | % | ||||||||
|
Revenue
per full-time equivalents (in thousands):
|
||||||||||||
|
Health
and Education Consulting
|
$ | 285 | $ | 335 | ||||||||
|
Financial
Consulting
|
$ | 188 | $ | 193 | ||||||||
|
Legal
Consulting
|
$ | 102 | $ | 107 | ||||||||
|
Corporate
Consulting
|
$ | 324 | $ | 299 | ||||||||
|
Total
|
$ | 137 | $ | 150 | ||||||||
|
(1)
|
Includes
the financial results of Stockamp since July 8, 2008, which had an
unfavorable impact on this segment’s operating income for the three months
ended September 30, 2008 due to (a) a portion of performance-based revenue
that cannot be recognized post-acquisition under GAAP, (b) a significant
amount of performance-based revenue that was deferred at September 30,
2008 and will be recognized in the future when all the performance-based
criteria specified in the engagement contracts are met, and (c) rapid
amortization of intangible assets.
|
|
(2)
|
Includes
restructuring charges totaling $2.0 million, $0.2 million and $0.1 million
for Corporate Consulting, Financial Consulting and Legal Consulting,
respectively, in the three and nine months ended September 30,
2008.
|
|
(3)
|
Consists
of our full-time professionals who provide consulting services and
generate revenues based on the number of hours
worked.
|
|
(4)
|
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.
|
|
(5)
|
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.
|
|
(6)
|
The
decrease in average billing rate was impacted by Stockamp as described in
footnote 1 above. Excluding the impact of Stockamp, the average
billing rate per hour would have been $301 and $279 for the three and nine
months ended September 30, 2008,
respectively.
|
|
(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. Also includes full-time employees who
provide software support and maintenance services to our
clients.
|
HURON
CONSULTING GROUP INC.
RECONCILIATION
OF OPERATING INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION (8)
(in
thousands)
|
Three
months ended
September 30,
|
Nine
months ended
September 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
|
$ | 168,659 | $ | 134,051 | $ | 451,461 | $ | 368,326 | ||||||||
|
Operating
income
|
$ | 22,284 | $ | 21,826 | $ | 63,143 | $ | 60,508 | ||||||||
|
Add
back:
|
||||||||||||||||
|
Depreciation and
amortization
|
9,296 | 6,491 | 19,852 | 19,254 | ||||||||||||
|
Earnings
before interest, taxes, depreciation and
amortization (EBITDA) (8)
|
31,580 | 28,317 | 82,995 | 79,762 | ||||||||||||
|
Add
back:
|
||||||||||||||||
|
Share-based
compensation
|
6,851 | 5,187 | 20,421 | 14,238 | ||||||||||||
|
Restructuring
charges
|
2,343 | — | 2,343 | — | ||||||||||||
|
Total adjusted
items
|
9,194 | 5,187 | 22,764 | 14,238 | ||||||||||||
|
Adjusted
EBITDA (8)
|
$ | 40,774 | $ | 33,504 | $ | 105,759 | $ | 94,000 | ||||||||
|
Adjusted
EBITDA as a percentage of revenues
|
24.2 | % | 25.0 | % | 23.4 | % | 25.5 | % | ||||||||
RECONCILIATION
OF NET INCOME TO ADJUSTED NET INCOME (8)
(in
thousands)
|
Three
months ended
September 30,
|
Nine
months ended
September 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
income
|
$ | 8,830 | $ | 10,487 | $ | 28,852 | $ | 30,399 | ||||||||
|
Diluted
earnings per
share
|
$ | 0.44 | $ | 0.58 | 1.54 | $ | 1.69 | |||||||||
|
Add
back:
|
||||||||||||||||
|
Amortization of intangible
assets
|
5,224 | 3,791 | 8,641 | 11,447 | ||||||||||||
|
Total adjusted items (see
above)
|
9,194 | 5,187 | 22,764 | 14,238 | ||||||||||||
|
Tax
effect
|
(5,928 | ) | (3,672 | ) | (12,876 | ) | (10,505 | ) | ||||||||
|
Total adjustments, net of
tax
|
8,490 | 5,306 | 18,529 | 15,180 | ||||||||||||
|
Adjusted
net income (8)
|
$ | 17,320 | $ | 15,793 | $ | 47,381 | $ | 45,579 | ||||||||
|
Adjusted
diluted earnings per share (8)
|
$ | 0.87 | $ | 0.87 | $ | 2.53 | $ | 2.54 | ||||||||
|
|
|
(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.
|