Huron Consulting Group (HURN) Q4 2007 earnings summary

Executive summary

• FY 2007 revenue rose 74.7% to $504.3 million, with acquisitions and organic demand contributing to growth; net income increased to $41.9 million.

• Expanded to four operating segments in 2007 and completed acquisitions that broadened healthcare, restructuring, finance and accounting, and legal discovery services.

Financial highlights

• Revenue was $504.3 million, up 74.7%; operating income was $83.7 million, up 76.3%; net income was $41.9 million, up 57.0%.

• Diluted EPS increased 50.6% to $2.32 from $1.54; results included a $3.2 million performance-based fee contribution in Health and Education Consulting.

• Operating cash flow was $53.7 million versus $42.5 million; cash and equivalents ended the year at $3.0 million, down from $16.6 million.

Outlook and guidance

• Direct costs and operating expenses were expected to rise in 2008 as hiring, growth, variable consultant usage, and share-based compensation add costs.

• Planned 2008 capital expenditures were estimated at ~$20 million, primarily for leasehold improvements and computer equipment.

• Growth rates in revenue and related working capital were expected to moderate; liquidity needs over the next 12 months were expected to be funded by operating cash flow and credit-facility borrowings.