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
|
February 24,
2009
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)
|
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 February 24, 2009, Huron
Consulting Group Inc. issued a press release announcing its financial results
for the quarter and year ended December 31, 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 February 24,
2009
|
- 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:
|
February 24,
2009
|
/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 February 24,
2009
|
EXHIBIT
99.1
[Huron
Consulting Group Logo]
News
FOR
IMMEDIATE RELEASE
February 24, 2009
Huron
Consulting Group Reports
Fourth
Quarter and Full Year 2008 Financial Results
|
·
|
Revenues
of $164.0 million for Q4 2008 increased 20.6% from $136.0 million in Q4
2007.
|
|
·
|
Full
year 2008 revenues of $615.5 million increased 22.0% from full year 2007
revenues of $504.3 million.
|
|
·
|
Diluted
earnings per share for Q4 2008 was $0.59 compared to $0.63 in Q4
2007.
|
|
·
|
Diluted
earnings per share for the full year 2008 was $2.13 compared to $2.32 for
the full year 2007.
|
|
·
|
Average
number of full-time billable consultants(1)
totaled 1,515 for Q4 2008 compared to 1,199 for Q4 2007. Average number of
full-time equivalent professionals(4)
totaled 804 for Q4 2008 compared to 616 in the same period last
year.
|
CHICAGO -
February 24, 2009 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading
provider of business consulting services, today announced financial results for
the fourth quarter and full year ended December 31, 2008.
“The
current business environment has created unprecedented challenges for companies
in many industries,” said Gary E. Holdren, chairman and chief executive officer,
Huron Consulting Group. “We were very pleased with the continued strength shown
by our Health and Education Consulting segment and the significant demand for
our services, particularly in the healthcare provider sector. This year is again
shaping up to be a very good year for this segment, which now comprises more
than 50 percent of Huron’s revenue.”
“However,
revenues in our event-driven Legal and Accounting & Financial Consulting
segments fell short of our expectations for the quarter as certain projects were
either postponed or did not reach the revenue levels that were anticipated for
these assignments,” continued Holdren. “Despite this, we remain cautiously
optimistic that there will be meaningful demand for both of these segments in
2009 as we see a good pipeline of opportunities ahead of us.”
“Huron’s
variable labor cost model and pay-for-performance compensation system along with
other cost management efforts helped mitigate our fourth quarter revenue
shortfalls. We believe our variable labor and pay-for-performance models give us
the flexibility needed to manage through an uncertain market in
2009.”
Fourth
Quarter 2008 Results
Revenues
of $164.0 million for the fourth quarter of 2008 increased 20.6% from $136.0
million for the fourth quarter of 2007. The Company’s fourth quarter 2008
operating income increased 22.7% to $28.5 million compared to $23.2 million in
the fourth quarter of 2007. Net income was $11.8 million, or $0.59 per diluted
share, for the fourth quarter of 2008 compared to $11.5 million, or $0.63 per
diluted share, for the same period last year. Financial results for the fourth
quarter of 2008 included $2.8 million of rapid amortization on intangible assets
compared to $1.2 million during the fourth quarter of 2007.
Fourth
quarter 2008 earnings before interest, taxes, depreciation and amortization
("EBITDA")(6)
increased 32.2% to $38.6 million, or 23.5% of revenues, compared to $29.2
million, or 21.5% of revenues, in the comparable quarter last year. Adjusted
EBITDA(6), which
excludes share-based compensation expense, rose 29.4% to $45.0 million, or 27.4%
of revenues, compared to $34.8 million, or 25.6% of revenues, in the comparable
quarter last year.
The
average number of full-time billable consultants(1)
increased 26.4% to 1,515 in the fourth quarter of 2008 compared to 1,199 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(4)
increased 30.5% to 804 in the fourth quarter of 2008 compared to 616 for the
comparable period in 2007. Full-time billable consultant utilization rate was
71.3% during the fourth quarter of 2008 compared with 69.9% during the same
period last year. Average billing rate per hour for full-time billable
consultants was $259 for the fourth quarter of 2008 compared to $275 for the
fourth quarter of 2007.
Full
Year 2008 Results
Revenues
of $615.5 million for the full year ended December 31, 2008 increased 22.0% from
$504.3 million for the full year ended December 31, 2007. The Company’s
operating income increased 9.4% to $91.6 million for the full year ended
December 31, 2008 compared to $83.7 million for the same period last year. Net
income was $40.7 million, or $2.13 per diluted share, for the full year ended
December 31, 2008 compared to $41.9 million, or $2.32 per diluted share, for the
comparable period last year. Financial results for the full year 2008 and 2007
included $4.8 million and $7.9 million, respectively, of rapid amortization of
intangible assets.
Full year
2008 EBITDA(6)
increased 11.6% to $121.6 million, or 19.8% of revenues, compared to
$108.9 million, or 21.6% of revenues, in the comparable period last year.
Adjusted EBITDA(6), which
excludes share-based compensation expense and restructuring charges, increased
17.1% to $150.7 million, or 24.5% of revenues, compared to
$128.8 million, or 25.5% of revenues, in the same period last
year.
Huron’s
full-time billable consultant utilization rate was 68.8% during the full year
2008 compared to 74.6 % during the full year 2007. Average billing rate per hour
for full-time billable consultants was $263 for the full year 2008 compared to
$278 for 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; Accounting
& Financial Consulting (previously named Financial Consulting); Legal
Consulting; and Corporate Consulting. Segment results and related footnotes are
included in the attached schedules and in Huron’s Form 10-K filing for the year
ended December 31, 2008.
Outlook
for 2009
Huron has
decided that, effective with the current quarter, it will only provide a full
year outlook on revenues, EBITDA, operating income and diluted earnings per
share.
Based on
currently available information, the Company anticipates full year 2009 revenues
before reimbursable expenses in a range of $730 million to $770 million, EBITDA
in a range of $162 million to $173 million, operating income in a range of $132
million to $143 million, and between $3.10 and $3.40 in diluted earnings per
share.
Share-based
compensation expense of approximately $30.5 million is included in the full year
2009 estimates. Weighted average diluted share counts for 2009 are estimated to
be 20.7 million.
Fourth
Quarter and Full Year 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 http://ir.huronconsultinggroup.com.
A replay will be available approximately two hours after the conclusion of the
webcast and for 90 days thereafter.
About
Huron Consulting Group
Huron
Consulting Group helps clients in diverse industries improve performance, comply
with complex regulations, resolve disputes, recover from distress, leverage
technology, and stimulate growth. The Company teams with its clients to deliver
sustainable and measurable results. Huron provides services to a wide variety of
both financially sound and distressed organizations, including leading academic
institutions, healthcare organizations, Fortune 500 companies, medium-sized
businesses, 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 continue to deteriorate substantially. 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 anticipated 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 2008 Annual Report on Form 10-K 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
December 31,
|
Twelve
months ended
December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||||||
|
Revenues
|
$ | 164,015 | $ | 135,966 | $ | 615,476 | $ | 504,292 | ||||||||
|
Reimbursable
expenses
|
15,826 | 11,430 | 56,700 | 43,661 | ||||||||||||
|
Total revenues and reimbursable
expenses
|
179,841 | 147,396 | 672,176 | 547,953 | ||||||||||||
|
Direct costs and reimbursable
expenses (exclusive of depreciation and
amortization shown in operating expenses):
|
||||||||||||||||
|
Direct
costs
|
90,706 | 79,739 | 360,404 | 293,387 | ||||||||||||
|
Intangible
assets
amortization
|
3,545 | 1,241 | 6,629 | 7,993 | ||||||||||||
|
Reimbursable
expenses
|
15,795 | 11,410 | 56,717 | 43,449 | ||||||||||||
|
Total direct costs and
reimbursable expenses
|
110,046 | 92,390 | 423,750 | 344,829 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling,
general and
administrative
|
34,771 | 27,068 | 131,148 | 102,176 | ||||||||||||
|
Depreciation
and
amortization
|
6,523 | 4,705 | 23,291 | 17,207 | ||||||||||||
|
Restructuring
charges
|
— | — | 2,343 | — | ||||||||||||
|
Total operating
expenses
|
41,294 | 31,773 | 156,782 | 119,383 | ||||||||||||
|
Operating
income
|
28,501 | 23,233 | 91,644 | 83,741 | ||||||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Interest
expense, net of interest
income
|
(4,708 | ) | (2,392 | ) | (13,773 | ) | (8,263 | ) | ||||||||
|
Other
income
(expense)
|
(1,884 | ) | (117 | ) | (2,731 | ) | 19 | |||||||||
|
Total other
expense
|
(6,592 | ) | (2,509 | ) | (16,504 | ) | (8,244 | ) | ||||||||
|
Income
before provision for income taxes
|
21,909 | 20,724 | 75,140 | 75,497 | ||||||||||||
|
Provision
for income
taxes
|
10,110 | 9,222 | 34,489 | 33,596 | ||||||||||||
|
Net
income
|
$ | 11,799 | $ | 11,502 | $ | 40,651 | $ | 41,901 | ||||||||
|
Earnings
per share:
|
||||||||||||||||
|
Basic
|
$ | 0.62 | $ | 0.67 | $ | 2.23 | $ | 2.47 | ||||||||
|
Diluted
|
$ | 0.59 | $ | 0.63 | $ | 2.13 | $ | 2.32 | ||||||||
|
Weighted
average shares used in calculating earnings per share:
|
||||||||||||||||
|
Basic
|
19,180 | 17,169 | 18,257 | 16,944 | ||||||||||||
|
Diluted
|
20,074 | 18,228 | 19,082 | 18,033 | ||||||||||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except share and per share amounts)
(Unaudited)
|
December
31,
2008
|
December
31,
2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 14,106 | $ | 2,993 | ||||
|
Receivables from clients,
net
|
88,071 | 86,867 | ||||||
|
Unbilled services,
net
|
43,111 | 28,245 | ||||||
|
Income tax
receivable
|
3,496 | 13,492 | ||||||
|
Deferred income
taxes
|
15,708 | 13,680 | ||||||
|
Prepaid expenses and other
current
assets
|
14,563 | 10,435 | ||||||
|
Total current
assets
|
179,055 | 155,712 | ||||||
|
Property
and equipment,
net
|
44,708 | 38,147 | ||||||
|
Deferred
income
taxes
|
2,064 | 3,628 | ||||||
|
Other
non-current
assets
|
15,722 | 8,737 | ||||||
|
Intangible
assets,
net
|
32,372 | 13,936 | ||||||
|
Goodwill
|
505,676 | 223,053 | ||||||
|
Total
assets
|
$ | 779,597 | $ | 443,213 | ||||
|
Liabilities
and stockholders’ equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 6,505 | $ | 5,823 | ||||
|
Accrued
expenses
|
27,361 | 15,208 | ||||||
|
Accrued payroll and related
benefits
|
48,374 | 58,279 | ||||||
|
Accrued consideration for
business
acquisitions
|
60,099 | 34,962 | ||||||
|
Income tax
payable
|
2,086 | 1,342 | ||||||
|
Deferred
revenues
|
21,208 | 5,278 | ||||||
|
Note payable and current portion
of capital lease obligations
|
518 | 1,309 | ||||||
|
Total current
liabilities
|
166,151 | 122,201 | ||||||
|
Non-current
liabilities:
|
||||||||
|
Deferred compensation and other
liabilities
|
5,511 | 3,795 | ||||||
|
Capital lease obligations, net
of current
portion
|
204 | 234 | ||||||
|
Bank
borrowings
|
280,000 | 123,500 | ||||||
|
Deferred lease
incentives
|
8,705 | 9,699 | ||||||
|
Total non-current
liabilities
|
294,420 | 137,228 | ||||||
|
Commitments
and
contingencies
|
— | — | ||||||
|
Stockholders’
equity
|
||||||||
|
Common
stock; $0.01 par value; 500,000,000 shares authorized; 21,387,679
and 19,279,176 shares issued at December 31, 2008
and 2007,
respectively
|
202 | 182 | ||||||
|
Treasury
stock, at cost, 404,357 and 589,755 shares at December 31,
2008
and 2007,
respectively
|
(21,443 | ) | (20,703 | ) | ||||
|
Additional
paid-in
capital
|
211,464 | 116,148 | ||||||
|
Retained
earnings
|
128,752 | 88,101 | ||||||
|
Accumulated
other comprehensive
income
|
51 | 56 | ||||||
|
Total stockholders’
equity
|
319,026 | 183,784 | ||||||
|
Total
liabilities and stockholders’
equity
|
$ | 779,597 | $ | 443,213 | ||||
HURON
CONSULTING GROUP INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
Twelve
months ended
December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 40,651 | $ | 41,901 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation and
amortization
|
29,920 | 25,200 | ||||||
|
Share-based
compensation
|
26,807 | 19,812 | ||||||
|
Allowances for doubtful accounts
and unbilled
services
|
5,477 | 7,306 | ||||||
|
Deferred income
taxes
|
520 | 1,384 | ||||||
|
Other
|
— | 15 | ||||||
|
Changes in operating assets and
liabilities, net of businesses acquired:
|
||||||||
|
Decrease (increase) in
receivables from
clients
|
6,386 | (30,957 | ) | |||||
|
Increase in unbilled
services
|
(12,380 | ) | (8,016 | ) | ||||
|
Decrease (increase) in current
income tax receivable / payable, net
|
11,066 | (8,512 | ) | |||||
|
Increase in other
assets
|
(8,620 | ) | (7,377 | ) | ||||
|
Increase in accounts payable
and accrued
liabilities
|
5,494 | 4,271 | ||||||
|
Increase (decrease) in accrued
payroll and related
benefits
|
(13,051 | ) | 13,964 | |||||
|
Increase (decrease) in deferred
revenues
|
8,930 | (3,062 | ) | |||||
|
Net cash provided by operating
activities
|
101,200 | 55,929 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of property and equipment,
net
|
(19,821 | ) | (18,909 | ) | ||||
|
Net
investment in life insurance
policies
|
(1,093 | ) | (2,245 | ) | ||||
|
Purchases
of businesses, net of cash
acquired
|
(229,947 | ) | (168,209 | ) | ||||
|
Net cash used in investing
activities
|
(250,861 | ) | (189,363 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from exercise of stock
options
|
397 | 562 | ||||||
|
Shares
redeemed for employee tax
withholdings
|
(6,162 | ) | (10,084 | ) | ||||
|
Tax
benefit from share-based
compensation
|
12,234 | 14,957 | ||||||
|
Proceeds
from borrowings under line of
credit
|
631,500 | 340,500 | ||||||
|
Repayments
on line of
credit
|
(475,000 | ) | (225,000 | ) | ||||
|
Principal
payments of note payable and capital lease obligations
|
(1,432 | ) | (1,136 | ) | ||||
|
Net cash provided by financing
activities
|
161,537 | 119,799 | ||||||
|
Effect
of exchange rate changes on
cash
|
(763 | ) | 56 | |||||
|
Net
increase (decrease) in cash and cash
equivalents
|
11,113 | (13,579 | ) | |||||
|
Cash
and cash equivalents at beginning of the
period
|
2,993 | 16,572 | ||||||
|
Cash
and cash equivalents at end of the
period
|
$ | 14,106 | $ | 2,993 | ||||
|
Supplemental
disclosure of cash flow information:
|
||||||||
|
Non-cash
investing and financing activities:
|
||||||||
|
Issuance
of common stock in connection with business combinations
|
$ | 61,320 | $ | — | ||||
|
Issuance
of common stock in connection with a business combination classified
as a
liability
|
$ | 15,000 | $ | — | ||||
|
Capitalized lease obligations
incurred
|
$ | 611 | $ | 398 | ||||
|
Cash
paid during the year for:
|
||||||||
|
Interest
|
$ | 17,065 | $ | 7,138 | ||||
|
Income
taxes
|
$ | 9,254 | $ | 25,475 | ||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
|
Three
Months Ended
December 31,
|
||||||||||||
|
Segment
and Consolidated Operating Results (in thousands):
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 90,073 | $ | 50,010 | 80.1 | % | ||||||
|
Accounting
and Financial
Consulting
|
26,482 | 46,749 | (43.4 | )% | ||||||||
|
Legal
Consulting
|
27,555 | 20,437 | 34.8 | % | ||||||||
|
Corporate
Consulting
|
19,905 | 18,770 | 6.0 | % | ||||||||
|
Total
revenues
|
164,015 | 135,966 | 20.6 | % | ||||||||
|
Total
reimbursable
expenses
|
15,826 | 11,430 | 38.5 | % | ||||||||
|
Total
revenues and reimbursable
expenses
|
$ | 179,841 | $ | 147,396 | 22.0 | % | ||||||
|
Operating
income:
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 41,605 | $ | 21,285 | 95.5 | % | ||||||
|
Accounting
and Financial
Consulting
|
4,436 | 17,761 | (75.0 | %) | ||||||||
|
Legal
Consulting
|
5,393 | 5,876 | (8.2 | %) | ||||||||
|
Corporate
Consulting
|
5,113 | 2,809 | 82.0 | % | ||||||||
|
Total segment operating
income
|
56,547 | 47,731 | 18.5 | % | ||||||||
|
Operating
expenses not allocated to
segments
|
28,046 | 24,498 | 14.5 | % | ||||||||
|
Total
operating
income
|
$ | 28,501 | $ | 23,233 | 22.7 | % | ||||||
|
Other
Operating Data:
|
||||||||||||
|
Number
of full-time billable consultants (at period end)
(1):
|
||||||||||||
|
Health
and Education
Consulting
|
918 | 439 | 109.1 | % | ||||||||
|
Accounting
and Financial
Consulting
|
306 | 367 | (16.6 | %) | ||||||||
|
Legal
Consulting
|
163 | 173 | (5.8 | %) | ||||||||
|
Corporate
Consulting
|
171 | 230 | (25.7 | %) | ||||||||
|
Total
|
1,558 | 1,209 | 28.9 | % | ||||||||
|
Average
number of full-time billable consultants (for the period) (1):
|
||||||||||||
|
Health
and Education
Consulting
|
875 | 433 | ||||||||||
|
Accounting
and Financial
Consulting
|
310 | 368 | ||||||||||
|
Legal
Consulting
|
154 | 171 | ||||||||||
|
Corporate
Consulting
|
176 | 227 | ||||||||||
|
Total
|
1,515 | 1,199 | ||||||||||
|
Full-time
billable consultant utilization rate (2):
|
||||||||||||
|
Health
and Education
Consulting
|
78.6 | % | 78.7 | % | ||||||||
|
Accounting
and Financial
Consulting
|
53.3 | % | 68.4 | % | ||||||||
|
Legal
Consulting
|
65.3 | % | 66.7 | % | ||||||||
|
Corporate
Consulting
|
70.9 | % | 58.1 | % | ||||||||
|
Total
|
71.3 | % | 69.9 | % | ||||||||
|
Full-time
billable consultant average billing rate per hour (3):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 250 | $ | 283 | ||||||||
|
Accounting
and Financial
Consulting
|
$ | 249 | $ | 274 | ||||||||
|
Legal
Consulting
|
$ | 228 | $ | 232 | ||||||||
|
Corporate
Consulting
|
$ | 352 | $ | 289 | ||||||||
|
Total
|
$ | 259 | $ | 275 | ||||||||
|
Revenue
per full-time billable consultant (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 93 | $ | 103 | ||||||||
|
Accounting
and Financial
Consulting
|
$ | 62 | $ | 83 | ||||||||
|
Legal
Consulting
|
$ | 66 | $ | 65 | ||||||||
|
Corporate
Consulting
|
$ | 108 | $ | 79 | ||||||||
|
Total
|
$ | 85 | $ | 87 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Three
Months Ended
December 31,
|
||||||||||||
|
Other
Operating Data:
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Average
number of full-time equivalents (for the period) (4):
|
||||||||||||
|
Health
and Education
Consulting
|
100 | 51 | 96.1 | % | ||||||||
|
Accounting
and Financial
Consulting
|
121 | 281 | (56.9 | %) | ||||||||
|
Legal
Consulting
|
576 | 272 | 111.8 | % | ||||||||
|
Corporate
Consulting
|
7 | 12 | (41.7 | %) | ||||||||
|
Total
|
804 | 616 | 30.5 | % | ||||||||
|
Revenue
per full-time equivalents (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 89 | $ | 108 | ||||||||
|
Accounting
and Financial
Consulting
|
$ | 61 | $ | 58 | ||||||||
|
Legal
Consulting
|
$ | 30 | $ | 34 | ||||||||
|
Corporate
Consulting
|
$ | 116 | $ | 76 | ||||||||
|
Total
|
$ | 43 | $ | 52 | ||||||||
HURON CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Twelve
Months Ended
December 31,
|
||||||||||||
|
Segment
and Consolidated Operating Results (in thousands):
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Revenues
and reimbursable expenses:
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 275,510 | $ | 181,439 | 51.8 | % | ||||||
|
Accounting
and Financial
Consulting
|
134,011 | 156,013 | (14.1 | %) | ||||||||
|
Legal
Consulting
|
121,413 | 89,849 | 35.1 | % | ||||||||
|
Corporate
Consulting
|
84,542 | 76,991 | 9.8 | % | ||||||||
|
Total
revenues
|
615,476 | 504,292 | 22.0 | % | ||||||||
|
Total
reimbursable
expenses
|
56,700 | 43,661 | 29.9 | % | ||||||||
|
Total
revenues and reimbursable
expenses
|
$ | 672,176 | $ | 547,953 | 22.7 | % | ||||||
|
Operating
income (5):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 108,784 | $ | 66,289 | 64.1 | % | ||||||
|
Accounting
and Financial
Consulting
|
32,010 | 60,873 | (47.4 | %) | ||||||||
|
Legal
Consulting
|
37,780 | 28,293 | 33.5 | % | ||||||||
|
Corporate
Consulting
|
24,426 | 19,961 | 22.4 | % | ||||||||
|
Total segment operating
income
|
203,000 | 175,416 | 15.7 | % | ||||||||
|
Operating
expenses not allocated to
segments
|
111,356 | 91,675 | 21.5 | % | ||||||||
|
Total
operating
income
|
$ | 91,644 | $ | 83,741 | 9.4 | % | ||||||
|
Other
Operating Data:
|
||||||||||||
|
Number
of full-time billable consultants (at period end)
(1):
|
||||||||||||
|
Health
and Education
Consulting
|
918 | 439 | 109.1 | % | ||||||||
|
Accounting
and Financial
Consulting
|
306 | 367 | (16.6 | %) | ||||||||
|
Legal
Consulting
|
163 | 173 | (5.8 | %) | ||||||||
|
Corporate
Consulting
|
171 | 230 | (25.7 | %) | ||||||||
|
Total
|
1,558 | 1,209 | 28.9 | % | ||||||||
|
Average
number of full-time billable consultants (for the period) (1):
|
||||||||||||
|
Health
and Education
Consulting
|
653 | 381 | ||||||||||
|
Accounting
and Financial
Consulting
|
338 | 315 | ||||||||||
|
Legal
Consulting
|
164 | 139 | ||||||||||
|
Corporate
Consulting
|
207 | 191 | ||||||||||
|
Total
|
1,362 | 1,026 | ||||||||||
|
Full-time
billable consultant utilization rate (2):
|
||||||||||||
|
Health
and Education
Consulting
|
79.7 | % | 79.4 | % | ||||||||
|
Accounting
and Financial
Consulting
|
53.4 | % | 73.7 | % | ||||||||
|
Legal
Consulting
|
62.8 | % | 73.4 | % | ||||||||
|
Corporate
Consulting
|
64.2 | % | 67.7 | % | ||||||||
|
Total
|
68.8 | % | 74.6 | % | ||||||||
|
Full-time
billable consultant average billing rate per hour (3):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 251 | $ | 271 | ||||||||
|
Accounting
and Financial
Consulting
|
$ | 271 | $ | 290 | ||||||||
|
Legal
Consulting
|
$ | 235 | $ | 240 | ||||||||
|
Corporate
Consulting
|
$ | 322 | $ | 303 | ||||||||
|
Total
|
$ | 263 | $ | 278 | ||||||||
|
Revenue
per full-time billable consultant (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 381 | $ | 407 | ||||||||
|
Accounting
and Financial
Consulting
|
$ | 267 | $ | 398 | ||||||||
|
Legal
Consulting
|
$ | 269 | $ | 305 | ||||||||
|
Corporate
Consulting
|
$ | 394 | $ | 390 | ||||||||
|
Total
|
$ | 341 | $ | 387 | ||||||||
HURON
CONSULTING GROUP INC.
SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
Twelve
Months Ended
December 31,
|
||||||||||||
|
Other
Operating Data:
|
2008
|
2007
|
Percent
Increase
(Decrease)
|
|||||||||
|
Average
number of full-time equivalents (for the period) (4):
|
||||||||||||
|
Health
and Education
Consulting
|
71 | 60 | 18.3 | % | ||||||||
|
Accounting
and Financial
Consulting
|
176 | 125 | 40.8 | % | ||||||||
|
Legal
Consulting
|
583 | 338 | 72.5 | % | ||||||||
|
Corporate
Consulting
|
8 | 7 | 14.3 | % | ||||||||
|
Total
|
838 | 530 | 58.1 | % | ||||||||
|
Revenue
per full-time equivalents (in thousands):
|
||||||||||||
|
Health
and Education
Consulting
|
$ | 379 | $ | 438 | ||||||||
|
Accounting
and Financial
Consulting
|
$ | 249 | $ | 246 | ||||||||
|
Legal
Consulting
|
$ | 133 | $ | 141 | ||||||||
|
Corporate
Consulting
|
$ | 385 | $ | 344 | ||||||||
|
Total
|
$ | 180 | $ | 202 | ||||||||
|
(1)
|
Consists
of our full-time professionals who provide consulting services and
generate revenues based on the number of hours
worked.
|
|
(2)
|
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.
|
|
(3)
|
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.
|
|
(4)
|
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.
|
|
(5)
|
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 twelve months ended December 31,
2008.
|
HURON
CONSULTING GROUP INC.
RECONCILIATION
OF OPERATING INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION (6)
(in
thousands)
|
Three
months ended
December 31,
|
Twelve
months ended
December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
|
$ | 164,015 | $ | 135,966 | $ | 615,476 | $ | 504,292 | ||||||||
|
Operating
income
|
$ | 28,501 | $ | 23,233 | $ | 91,644 | $ | 83,741 | ||||||||
|
Add
back:
|
||||||||||||||||
|
Depreciation and
amortization
|
10,068 | 5,946 | 29,920 | 25,200 | ||||||||||||
|
Earnings
before interest, taxes, depreciation and amortization
(EBITDA) (6)
|
38,569 | 29,179 | 121,564 | 108,941 | ||||||||||||
|
Add
back:
|
||||||||||||||||
|
Share-based
compensation
|
6,387 | 5,574 | 26,807 | 19,812 | ||||||||||||
|
Restructuring
charges
|
— | — | 2,343 | — | ||||||||||||
|
Total adjusted
items
|
6,387 | 5,574 | 29,150 | 19,812 | ||||||||||||
|
Adjusted
EBITDA (6)
|
$ | 44,956 | $ | 34,753 | $ | 150,714 | $ | 128,753 | ||||||||
|
Adjusted
EBITDA as a percentage of revenues
|
27.4 | % | 25.6 | % | 24.5 | % | 25.5 | % | ||||||||
RECONCILIATION
OF NET INCOME TO ADJUSTED NET INCOME (6)
(in
thousands)
|
Three
months ended
December 31,
|
Twelve
months ended
December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
income
|
$ | 11,799 | $ | 11,502 | $ | 40,651 | $ | 41,901 | ||||||||
|
Diluted
earnings per
share
|
$ | 0.59 | $ | 0.63 | $ | 2.13 | $ | 2.32 | ||||||||
|
Add
back:
|
||||||||||||||||
|
Amortization of intangible
assets
|
5,622 | 2,881 | 14,264 | 14,328 | ||||||||||||
|
Total adjusted items (see
above)
|
6,387 | 5,574 | 29,150 | 19,812 | ||||||||||||
|
Tax
effect
|
(4,924 | ) | (3,458 | ) | (17,800 | ) | (13,963 | ) | ||||||||
|
Total adjustments, net of
tax
|
7,085 | 4,997 | 25,614 | 20,177 | ||||||||||||
|
Adjusted
net income (6)
|
$ | 18,884 | $ | 16,499 | $ | 66,265 | $ | 62,078 | ||||||||
|
Adjusted
diluted earnings per share (6)
|
$ | 0.94 | $ | 0.91 | $ | 3.47 | $ | 3.44 | ||||||||
|
|
|
(6)
|
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.
|