Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Huron Consulting Group Inc. | d623826d8k.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
November 6, 2013
Huron Consulting Group Announces Third Quarter 2013 Financial Results
| • | Revenues increased 7.9% to $174.7 million for Q3 2013 compared to $161.9 million in Q3 2012. |
| • | Operating income increased 51.3% to $31.1 million for Q3 2013 compared to $20.6 million in Q3 2012. |
| • | Adjusted EBITDA(6), a non-GAAP measure, was $31.5 million in Q3 2013 compared to $41.6 million in Q3 2012. |
| • | Diluted earnings per share from continuing operations for Q3 2013 was $0.75 compared to $0.47 in Q3 2012. |
| • | Adjusted diluted earnings per share from continuing operations(6), a non-GAAP measure, was $0.65 in Q3 2013 compared to $0.93 in Q3 2012. |
| • | Average number of full-time billable consultants(1) rose 11.0% to 1,559 for Q3 2013 compared to 1,405 for Q3 2012. Average number of full-time equivalent professionals(4) was 1,066 for Q3 2013 compared to 1,173 in Q3 2012. |
| • | Company raises its 2013 full year revenue guidance to a range of $685.0 million to $700.0 million, which includes approximately $5.0 million for the recent acquisition of Blue Stone International, LLC. |
CHICAGO – November 6, 2013 – Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business consulting services, today announced financial results for the third quarter ended September 30, 2013.
“Huron’s third quarter performance, highlighted by strong demand for our healthcare solutions, continues to demonstrate the value our consultants provide to clients who are highly focused on improving their strategic and operational performance,” said James H. Roth, chief executive officer and president, Huron Consulting Group. “The outlook across our businesses remains positive, and we are well positioned to drive future growth in those markets.”
Third Quarter 2013 Results
Revenues for the third quarter of 2013 were $174.7 million, an increase of 7.9%, compared to $161.9 million for the third quarter of 2012. The Company’s third quarter 2013 operating income increased 51.3% to $31.1 million, compared to $20.6 million in the third quarter of 2012. Net income from continuing operations was $17.2 million, or $0.75 per diluted share, for the third quarter of 2013 compared to $10.4 million, or $0.47 per diluted share, for the same period last year. Net income was $17.2 million, or $0.75 per diluted share, for the third quarter of 2013, compared to $10.5 million, or $0.47 per diluted share, for the same period last year.
Third quarter 2013 earnings before interest, taxes, depreciation and amortization (“EBITDA”)(6) increased 40.2% to $36.8 million, or 21.0% of revenues, compared to $26.2 million, or 16.2% of revenues, in the comparable quarter last year.
In evaluating the Company’s financial performance, management uses non-GAAP financial measures including Adjusted EBITDA(6) and Adjusted net income from continuing operations(6) that exclude the effect of the following items (in thousands):
| Three Months Ended September 30, |
||||||||
| 2013 | 2012 | |||||||
| Amortization of intangible assets |
$ | 1,440 | $ | 1,923 | ||||
| Restructuring charges |
$ | — | $ | 2,194 | ||||
| Restatement related expenses |
$ | — | $ | 68 | ||||
| Litigation settlement (gain) loss |
$ | (5,300 | ) | $ | — | |||
| Goodwill impairment charge |
$ | — | $ | 13,083 | ||||
| Tax effect |
$ | 1,544 | $ | (6,840 | ) | |||
During the third quarter of 2013, the Company reached a settlement agreement to resolve a lawsuit brought by Huron, resulting in a gain of $5.3 million being recorded. Huron collected $2.6 million of the settlement amount during the fourth quarter of 2013, and the Company anticipates the remaining amount will be collected during the first quarter of 2014.
Adjusted EBITDA(6) was $31.5 million, or 18.0% of revenues, in the third quarter of 2013, compared to $41.6 million, or 25.7% of revenues, in the comparable quarter last year. Adjusted net income from continuing operations(6) was $14.8 million, or $0.65 per diluted share, for the third quarter of 2013 compared to $20.8 million, or $0.93 per diluted share, for the comparable period in 2012.
Reconciliations of the aforementioned non-GAAP financial measures to comparable GAAP measures are provided in the financial schedules accompanying this news release.
The average number of full-time billable consultants(1) rose 11.0% to 1,559 in the third quarter of 2013 compared to 1,405 in the same quarter last year. Full-time billable consultant utilization rate was 73.9% during the third quarter of 2013 compared with 73.8% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $234 for the third quarter of 2013 compared to $241 for the third quarter of 2012. The average number of full-time equivalent professionals(4) totaled 1,066 in the third quarter of 2013 compared to 1,173 for the comparable period in 2012.
Year-to-Date 2013 Results
Revenues for the first nine months of 2013 rose 14.4% to $509.2 million compared to $445.2 million for the first nine months of 2012. The Company’s operating income for the first nine months of 2013 rose 113.4% to $83.0 million compared to $38.9 million in the first nine months of 2012. Net income from continuing operations rose 156.2% to $44.3 million, or $1.95 per diluted share, for the first nine months of 2013 compared to $17.3 million, or $0.78 per diluted share, for the same period last year. Net income increased 148.6% to $44.3 million, or $1.95 per diluted share, for the first nine months of 2013 compared to $17.8 million, or $0.80 per diluted share, for the same period last year.
EBITDA(6) was $99.6 million, or 19.6% of revenues, for the first nine months of 2013, compared to $55.6 million, or 12.5% of revenues, for the same period in 2012.
In evaluating the Company’s financial performance, management uses non-GAAP financial measures including Adjusted EBITDA(6) and Adjusted net income from continuing operations(6) that exclude the effect of the following items (in thousands):
| Nine Months Ended September 30, |
||||||||
| 2013 | 2012 | |||||||
| Amortization of intangible assets |
$ | 4,347 | $ | 5,149 | ||||
| Restructuring charges |
$ | 596 | $ | 3,253 | ||||
| Restatement related expenses |
$ | — | $ | 1,785 | ||||
| Litigation settlement (gain) loss |
$ | (6,450 | ) | $ | 1,150 | |||
| Goodwill impairment charge |
$ | — | $ | 13,083 | ||||
| Tax effect |
$ | 603 | $ | (9,701 | ) | |||
Adjusted EBITDA(6) was $93.8 million, or 18.4% of revenues, in the first nine months of 2013 compared to $74.8 million, or 16.8% of revenues, in the comparable period last year. Adjusted net income from continuing operations(6) was $43.4 million, or $1.91 per diluted share, for the first nine months of 2013 compared to $32.0 million, or $1.44 per diluted share, for the comparable period in 2012.
Reconciliations of the aforementioned non-GAAP financial measures to comparable GAAP measures are provided in the financial schedules accompanying this news release.
The average number of full-time billable consultants(1) increased 13.4% to 1,530 in the first nine months of 2013 compared to 1,349 in the same period last year. Full-time billable consultant utilization rate was 76.2% during the first nine months of 2013 compared with 75.4% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $219 for the first nine months of 2013 compared to $217 for the same period last year. The average number of full-time equivalent professionals(4) increased slightly to 1,112 in the first nine months of 2013 from 1,071 in the comparable period of 2012.
Operating Segments
Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges.
The Company’s year-to-date revenues by operating segment are as follows: Huron Healthcare (48%); Huron Legal (26%); Huron Education and Life Sciences (21%); and Huron Financial (5%). Financial results by segment are included in the attached schedules and in Huron’s forthcoming Form 10-Q filing for the quarter ended September 30, 2013.
Acquisition
On September 19, 2013, Huron entered into an agreement to acquire the assets of Blue Stone International, LLC, a provider of professional services supporting Oracle enterprise performance management, information management and business intelligence solutions. The transaction closed on October 1, 2013.
Outlook for 2013(7)
Based on currently available information, the Company raises guidance, which was previously announced on July 30, 2013, for full year 2013 revenues before reimbursable expenses in a range of $685.0 million to $700.0 million, which includes approximately $5.0 million for the recent acquisition of Blue Stone International, LLC. The Company also anticipates EBITDA in a range of $133.0 million to $138.0 million, Adjusted EBITDA in a range of $127.0 million to $132.0 million, GAAP diluted earnings per share in a range of $2.55 to $2.67, and non-GAAP Adjusted diluted earnings per share in a range of $2.60 to $2.72.
Management will provide a more detailed discussion of its outlook during the Company’s earnings conference call webcast.
Third Quarter 2013 Webcast
The Company will host a webcast to discuss its financial results today, November 6, 2013, at 5:00 p.m. Eastern Time (4:00 p.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, reduce costs, leverage technology, process and review large amounts of complex data, address regulatory changes, recover from distress and stimulate growth. Our professionals employ their expertise in administration, management, finance, operations, strategy and technology to provide our clients with specialized analyses and customized advice and solutions that are tailored to address each client’s particular challenges and opportunities to deliver sustainable and measurable results. The Company provides consulting services to a wide variety of both financially sound and distressed organizations, including healthcare organizations, leading academic institutions, Fortune 500 companies, governmental entities and law firms. Huron has worked with more than 90 of the top 100 research universities, more than 400 corporate general counsel, and more than 385 hospitals and academic medical centers. Learn more at www.huronconsultinggroup.com.
Use of Non-GAAP Financial Measures(6)
In evaluating the Company’s financial performance and outlook, management uses EBITDA, Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted net income from continuing operations and Adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Management believes that such measures, as supplements to operating income, net income from continuing operations and diluted earnings per share from continuing operations and other GAAP measures, are useful indicators for investors. These useful indicators can help readers gain a meaningful understanding of our core operating results and future prospects. 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.
Statements in this press release that are not historical in nature, including those concerning the Company’s current expectations about its future requirements and needs, are “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “may,” “should,” “expects,” “provides,” “anticipates,” “assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,” “might,” “predicts,” “seeks,” “would,” “believes,” “estimates,” “plans” or “continues.” These forward-looking statements reflect our current expectations about our future requirements and needs, results, levels of activity, performance, or achievements, including, without limitation, current expectations with respect to, among other factors, utilization rates, billing rates, and the 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 continue to trend upward. These statements involve known and unknown risks, uncertainties and other factors, including,
among others, those described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012 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. We disclaim any obligation to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.
Media Contact:
Jennifer Frost Hennagir
312-880-3260
jfrost-hennagir@huronconsultinggroup.com
Investor Contact:
C. Mark Hussey
or
Ellen Wong
312-583-8722
investor@huronconsultinggroup.com
###
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues and reimbursable expenses: |
||||||||||||||||
| Revenues |
$ | 174,735 | $ | 161,888 | $ | 509,178 | $ | 445,196 | ||||||||
| Reimbursable expenses |
17,542 | 13,470 | 51,001 | 41,820 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues and reimbursable expenses |
192,277 | 175,358 | 560,179 | 487,016 | ||||||||||||
| Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): |
||||||||||||||||
| Direct costs |
106,087 | 89,283 | 315,084 | 277,942 | ||||||||||||
| Amortization of intangible assets and software development costs |
675 | 787 | 2,007 | 3,071 | ||||||||||||
| Reimbursable expenses |
17,531 | 13,405 | 51,000 | 41,808 | ||||||||||||
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|
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|
|
|
|||||||||
| Total direct costs and reimbursable expenses |
124,293 | 103,475 | 368,091 | 322,821 | ||||||||||||
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| Operating expenses and other operating gains: |
||||||||||||||||
| Selling, general and administrative expenses |
37,197 | 31,095 | 100,307 | 92,437 | ||||||||||||
| Restructuring charges |
— | 2,194 | 596 | 3,253 | ||||||||||||
| Restatement related expenses |
— | 68 | — | 1,785 | ||||||||||||
| Litigation settlement (gain) loss |
(5,300 | ) | — | (6,450 | ) | 1,150 | ||||||||||
| Depreciation and amortization |
4,968 | 4,879 | 14,624 | 13,585 | ||||||||||||
| Goodwill impairment charge |
— | 13,083 | — | 13,083 | ||||||||||||
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|||||||||
| Total operating expenses and other operating gains |
36,865 | 51,319 | 109,077 | 125,293 | ||||||||||||
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|
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| Operating income |
31,119 | 20,564 | 83,011 | 38,902 | ||||||||||||
| Other income (expense), net: |
||||||||||||||||
| Interest expense, net of interest income |
(1,531 | ) | (2,312 | ) | (5,100 | ) | (6,193 | ) | ||||||||
| Other income (expense), net |
104 | 136 | (35 | ) | 306 | |||||||||||
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|
|||||||||
| Total other expense, net |
(1,427 | ) | (2,176 | ) | (5,135 | ) | (5,887 | ) | ||||||||
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|
|
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|
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| Income from continuing operations before income tax expense |
29,692 | 18,388 | 77,876 | 33,015 | ||||||||||||
| Income tax expense |
12,531 | 7,972 | 33,532 | 15,707 | ||||||||||||
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| Net income from continuing operations |
17,161 | 10,416 | 44,344 | 17,308 | ||||||||||||
| Income (loss) from discontinued operations, net of tax |
10 | 47 | (31 | ) | 518 | |||||||||||
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|
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| Net income |
$ | 17,171 | $ | 10,463 | $ | 44,313 | $ | 17,826 | ||||||||
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| Net earnings per basic share: |
||||||||||||||||
| Net income from continuing operations |
$ | 0.77 | $ | 0.47 | $ | 1.99 | $ | 0.79 | ||||||||
| Income from discontinued operations, net of tax |
$ | — | $ | 0.01 | $ | — | $ | 0.02 | ||||||||
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| Net income |
$ | 0.77 | $ | 0.48 | $ | 1.99 | $ | 0.81 | ||||||||
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| Net earnings per diluted share: |
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| Net income from continuing operations |
$ | 0.75 | $ | 0.47 | $ | 1.95 | $ | 0.78 | ||||||||
| Income from discontinued operations, net of tax |
$ | — | $ | — | $ | — | $ | 0.02 | ||||||||
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| Net income |
$ | 0.75 | $ | 0.47 | $ | 1.95 | $ | 0.80 | ||||||||
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| Weighted average shares used in calculating earnings per share: |
||||||||||||||||
| Basic |
22,386 | 21,950 | 22,293 | 21,881 | ||||||||||||
| Diluted |
22,873 | 22,326 | 22,712 | 22,247 | ||||||||||||
HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
| September 30, 2013 |
December 31, 2012 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 30,781 | $ | 25,162 | ||||
| Receivables from clients, net |
82,007 | 97,510 | ||||||
| Unbilled services, net |
82,381 | 47,232 | ||||||
| Income tax receivable |
2,765 | 192 | ||||||
| Deferred income taxes, net |
13,290 | 14,751 | ||||||
| Prepaid expenses and other current assets |
21,877 | 15,525 | ||||||
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|
|||||
| Total current assets |
233,101 | 200,372 | ||||||
| Property and equipment, net |
35,968 | 33,805 | ||||||
| Other non-current assets |
16,614 | 15,322 | ||||||
| Intangible assets, net |
14,815 | 18,879 | ||||||
| Goodwill |
519,514 | 519,522 | ||||||
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| Total assets |
$ | 820,012 | $ | 787,900 | ||||
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| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 8,620 | $ | 8,461 | ||||
| Accrued expenses |
16,447 | 17,692 | ||||||
| Accrued payroll and related benefits |
61,956 | 61,672 | ||||||
| Bank borrowings, current portion |
25,000 | — | ||||||
| Accrued consideration for business acquisitions, current portion |
5,103 | 5,640 | ||||||
| Income tax payable |
221 | 7,872 | ||||||
| Deferred revenues |
13,114 | 15,388 | ||||||
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|
|||||
| Total current liabilities |
130,461 | 116,725 | ||||||
| Non-current liabilities: |
||||||||
| Deferred compensation and other liabilities |
4,892 | 6,973 | ||||||
| Bank borrowings, net of current portion |
150,000 | 192,500 | ||||||
| Deferred lease incentives |
10,163 | 6,936 | ||||||
| Deferred income taxes, net |
20,613 | 14,560 | ||||||
| Accrued consideration for business acquisitions, net of current portion |
— | 4,885 | ||||||
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|
|||||
| Total non-current liabilities |
185,668 | 225,854 | ||||||
| Commitments and Contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Common stock; $0.01 par value; 500,000,000 shares authorized; 25,224,317 and 24,793,327 shares issued at September 30, 2013 and December 31, 2012, respectively |
244 | 240 | ||||||
| Treasury stock, at cost, 1,980,776 and 1,880,809 shares at September 30, 2013 and December 31, 2012, respectively |
(87,338 | ) | (83,715 | ) | ||||
| Additional paid-in capital |
438,135 | 420,825 | ||||||
| Retained earnings |
153,643 | 109,330 | ||||||
| Accumulated other comprehensive loss |
(801 | ) | (1,359 | ) | ||||
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| Total stockholders’ equity |
503,883 | 445,321 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 820,012 | $ | 787,900 | ||||
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2013 | 2012 | |||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 44,313 | $ | 17,826 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
16,631 | 18,994 | ||||||
| Share-based compensation |
12,692 | 11,183 | ||||||
| Allowances for doubtful accounts and unbilled services |
3,153 | 1,723 | ||||||
| Deferred income taxes |
7,062 | 2,458 | ||||||
| Goodwill impairment charge |
— | 13,083 | ||||||
| Changes in operating assets and liabilities, net of businesses acquired: |
||||||||
| (Increase) decrease in receivables from clients |
13,200 | 9,532 | ||||||
| (Increase) decrease in unbilled services |
(36,083 | ) | (10,698 | ) | ||||
| (Increase) decrease in current income tax receivable / payable, net |
(10,218 | ) | 19,502 | |||||
| (Increase) decrease in other assets |
(1,304 | ) | 2,738 | |||||
| Increase (decrease) in accounts payable and accrued liabilities |
(2,018 | ) | (4,783 | ) | ||||
| Increase (decrease) in accrued payroll and related benefits |
891 | (24,092 | ) | |||||
| Increase (decrease) in deferred revenues |
(3,028 | ) | (14,616 | ) | ||||
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| Net cash provided by operating activities |
45,291 | 42,850 | ||||||
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| Cash flows from investing activities: |
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| Purchases of property and equipment, net |
(14,383 | ) | (14,344 | ) | ||||
| Net investment in life insurance policies |
(842 | ) | (569 | ) | ||||
| Purchases of businesses, net of cash acquired |
(297 | ) | (53,832 | ) | ||||
| Capitalization of internally developed software |
(1,207 | ) | — | |||||
| Proceeds from note receivable |
438 | — | ||||||
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| Net cash used in investing activities |
(16,291 | ) | (68,745 | ) | ||||
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| Cash flows from financing activities: |
||||||||
| Proceeds from exercise of stock options |
39 | 30 | ||||||
| Shares redeemed for employee tax withholdings |
(760 | ) | (3,874 | ) | ||||
| Tax benefit from share-based compensation |
1,374 | 1,325 | ||||||
| Proceeds from borrowings under credit facility |
83,500 | 244,000 | ||||||
| Repayments on credit facility |
(101,000 | ) | (215,000 | ) | ||||
| Payments for debt issue costs |
(1,155 | ) | (2,482 | ) | ||||
| Payments of capital lease obligations |
— | (8 | ) | |||||
| Deferred acquisition payment |
(5,356 | ) | — | |||||
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| Net cash (used in) provided by financing activities |
(23,358 | ) | 23,991 | |||||
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| Effect of exchange rate changes on cash |
(23 | ) | 36 | |||||
| Net increase (decrease) in cash and cash equivalents |
5,619 | (1,868 | ) | |||||
| Cash and cash equivalents at beginning of the period |
25,162 | 5,080 | ||||||
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| Cash and cash equivalents at end of the period |
$ | 30,781 | $ | 3,212 | ||||
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HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
| Three Months Ended September 30, |
Percent Increase (Decrease) |
|||||||||||
| Segment and Consolidated Operating Results (in thousands): |
2013 | 2012 | ||||||||||
| Huron Healthcare: |
||||||||||||
| Revenues |
$ | 86,957 | $ | 74,999 | 15.9 | % | ||||||
| Operating income |
$ | 30,772 | $ | 33,868 | (9.1 | )% | ||||||
| Segment operating income as a percentage of segment revenues |
35.4 | % | 45.2 | % | ||||||||
| Huron Legal: |
||||||||||||
| Revenues |
$ | 45,263 | $ | 46,153 | (1.9 | )% | ||||||
| Operating income |
$ | 15,138 | $ | 11,479 | 31.9 | % | ||||||
| Segment operating income as a percentage of segment revenues |
33.4 | % | 24.9 | % | ||||||||
| Huron Education and Life Sciences: |
||||||||||||
| Revenues |
$ | 34,806 | $ | 33,863 | 2.8 | % | ||||||
| Operating income |
$ | 7,773 | $ | 12,406 | (37.3 | )% | ||||||
| Segment operating income as a percentage of segment revenues |
22.3 | % | 36.6 | % | ||||||||
| Huron Financial: |
||||||||||||
| Revenues |
$ | 7,223 | $ | 6,689 | 8.0 | % | ||||||
| Operating income |
$ | 664 | $ | 1,763 | (62.3 | )% | ||||||
| Segment operating income as a percentage of segment revenues |
9.2 | % | 26.4 | % | ||||||||
| All Other: |
||||||||||||
| Revenues |
$ | 486 | $ | 184 | 164.1 | % | ||||||
| Operating loss |
$ | (285 | ) | $ | (428 | ) | (33.4 | )% | ||||
| Segment operating loss as a percentage of segment revenues |
N/M | N/M | ||||||||||
| Total Company: |
||||||||||||
| Revenues |
$ | 174,735 | $ | 161,888 | 7.9 | % | ||||||
| Reimbursable expenses |
17,542 | 13,470 | 30.2 | % | ||||||||
|
|
|
|
|
|||||||||
| Total revenues and reimbursable expenses |
$ | 192,277 | $ | 175,358 | 9.6 | % | ||||||
|
|
|
|
|
|||||||||
| Statement of Earnings reconciliation: |
||||||||||||
| Segment operating income |
$ | 54,062 | $ | 59,088 | (8.5 | )% | ||||||
| Items not allocated at the segment level: |
||||||||||||
| Other operating expenses and gains |
17,975 | 20,562 | (12.6 | )% | ||||||||
| Depreciation and amortization expense |
4,968 | 4,879 | 1.8 | % | ||||||||
| Goodwill impairment charge |
— | 13,083 | (100.0 | )% | ||||||||
|
|
|
|
|
|||||||||
| Total operating income |
31,119 | 20,564 | 51.3 | % | ||||||||
| Other expense, net |
1,427 | 2,176 | (34.4 | )% | ||||||||
|
|
|
|
|
|||||||||
| Income from continuing operations before income tax expense |
$ | 29,692 | $ | 18,388 | 61.5 | % | ||||||
|
|
|
|
|
|||||||||
| Other Operating Data (excluding All Other): |
||||||||||||
| Number of full-time billable consultants (at period end) (1): |
||||||||||||
| Huron Healthcare (5) |
942 | 835 | 12.8 | % | ||||||||
| Huron Legal |
143 | 134 | 6.7 | % | ||||||||
| Huron Education and Life Sciences |
425 | 406 | 4.7 | % | ||||||||
| Huron Financial |
62 | 65 | (4.6 | )% | ||||||||
|
|
|
|
|
|||||||||
| Total (5) |
1,572 | 1,440 | 9.2 | % | ||||||||
| Average number of full-time billable consultants (for the period) (1): |
||||||||||||
| Huron Healthcare (5) |
926 | 824 | ||||||||||
| Huron Legal |
146 | 128 | ||||||||||
| Huron Education and Life Sciences |
425 | 386 | ||||||||||
| Huron Financial |
62 | 67 | ||||||||||
|
|
|
|
|
|||||||||
| Total (5) |
1,559 | 1,405 | ||||||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
| Three Months Ended September 30, |
||||||||
| Other Operating Data (continued): |
2013 | 2012 | ||||||
| Full-time billable consultant utilization rate (2): |
||||||||
| Huron Healthcare (5) |
80.2 | % | 76.1 | % | ||||
| Huron Legal |
62.3 | % | 66.9 | % | ||||
| Huron Education and Life Sciences |
64.4 | % | 73.9 | % | ||||
| Huron Financial |
73.6 | % | 56.9 | % | ||||
| Total (5) |
73.9 | % | 73.8 | % | ||||
| Full-time billable consultant average billing rate per hour (3): |
||||||||
| Huron Healthcare (5) |
$ | 230 | $ | 243 | ||||
| Huron Legal |
$ | 271 | $ | 265 | ||||
| Huron Education and Life Sciences |
$ | 215 | $ | 214 | ||||
| Huron Financial |
$ | 331 | $ | 368 | ||||
| Total (5) |
$ | 234 | $ | 241 | ||||
| Revenue per full-time billable consultant (in thousands): |
||||||||
| Huron Healthcare (5) |
$ | 87 | $ | 85 | ||||
| Huron Legal |
$ | 77 | $ | 81 | ||||
| Huron Education and Life Sciences |
$ | 64 | $ | 74 | ||||
| Huron Financial |
$ | 112 | $ | 96 | ||||
| Total (5) |
$ | 81 | $ | 82 | ||||
| Average number of full-time equivalents (for the period) (4): |
||||||||
| Huron Healthcare (5) |
53 | 55 | ||||||
| Huron Legal |
963 | 1,082 | ||||||
| Huron Education and Life Sciences |
47 | 33 | ||||||
| Huron Financial |
3 | 3 | ||||||
|
|
|
|
|
|||||
| Total (5) |
1,066 | 1,173 | ||||||
| Revenue per full-time equivalent (in thousands): |
||||||||
| Huron Healthcare (5) |
$ | 123 | $ | 96 | ||||
| Huron Legal |
$ | 35 | $ | 33 | ||||
| Huron Education and Life Sciences |
$ | 159 | $ | 164 | ||||
| Huron Financial |
$ | 106 | $ | 77 | ||||
| Total (5) |
$ | 45 | $ | 40 | ||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
| Nine Months Ended September 30, |
Percent Increase (Decrease) |
|||||||||||
| Segment and Consolidated Operating Results (in thousands): |
2013 | 2012 | ||||||||||
| Huron Healthcare: |
||||||||||||
| Revenues |
$ | 244,648 | $ | 201,171 | 21.6 | % | ||||||
| Operating income |
$ | 91,440 | $ | 69,778 | 31.0 | % | ||||||
| Segment operating income as a percentage of segment revenues |
37.4 | % | 34.7 | % | ||||||||
| Huron Legal: |
||||||||||||
| Revenues |
$ | 131,296 | $ | 133,443 | (1.6 | )% | ||||||
| Operating income |
$ | 28,869 | $ | 33,489 | (13.8 | )% | ||||||
| Segment operating income as a percentage of segment revenues |
22.0 | % | 25.1 | % | ||||||||
| Huron Education and Life Sciences: |
||||||||||||
| Revenues |
$ | 107,666 | $ | 93,373 | 15.3 | % | ||||||
| Operating income |
$ | 28,672 | $ | 28,051 | 2.2 | % | ||||||
| Segment operating income as a percentage of segment revenues |
26.6 | % | 30.0 | % | ||||||||
| Huron Financial: |
||||||||||||
| Revenues |
$ | 25,068 | $ | 16,821 | 49.0 | % | ||||||
| Operating income |
$ | 7,995 | $ | 1,659 | N/M | |||||||
| Segment operating income as a percentage of segment revenues |
31.9 | % | 9.9 | % | ||||||||
| All Other: |
||||||||||||
| Revenues |
$ | 500 | $ | 388 | 28.9 | % | ||||||
| Operating loss |
$ | (701 | ) | $ | (1,971 | ) | (64.4 | )% | ||||
| Segment operating loss as a percentage of segment revenues |
N/M | N/M | ||||||||||
| Total Company: |
||||||||||||
| Revenues |
$ | 509,178 | $ | 445,196 | 14.4 | % | ||||||
| Reimbursable expenses |
51,001 | 41,820 | 22.0 | % | ||||||||
|
|
|
|
|
|||||||||
| Total revenues and reimbursable expenses |
$ | 560,179 | $ | 487,016 | 15.0 | % | ||||||
|
|
|
|
|
|||||||||
| Statement of Earnings reconciliation: |
||||||||||||
| Segment operating income |
$ | 156,275 | $ | 131,006 | 19.3 | % | ||||||
| Items not allocated at the segment level: |
||||||||||||
| Other operating expenses and gains |
58,640 | 65,436 | (10.4 | )% | ||||||||
| Depreciation and amortization expense |
14,624 | 13,585 | 7.6 | % | ||||||||
| Goodwill impairment charge |
— | 13,083 | (100.0 | )% | ||||||||
|
|
|
|
|
|||||||||
| Total operating income |
83,011 | 38,902 | 113.4 | % | ||||||||
| Other expense, net |
5,135 | 5,887 | (12.8 | )% | ||||||||
|
|
|
|
|
|||||||||
| Income from continuing operations before income tax expense |
$ | 77,876 | $ | 33,015 | 135.9 | % | ||||||
|
|
|
|
|
|||||||||
| Other Operating Data (excluding All Other): |
||||||||||||
| Number of full-time billable consultants (at period end) (1): |
||||||||||||
| Huron Healthcare (5) |
942 | 835 | 12.8 | % | ||||||||
| Huron Legal |
143 | 134 | 6.7 | % | ||||||||
| Huron Education and Life Sciences |
425 | 406 | 4.7 | % | ||||||||
| Huron Financial |
62 | 65 | (4.6 | )% | ||||||||
|
|
|
|
|
|||||||||
| Total (5) |
1,572 | 1,440 | 9.2 | % | ||||||||
| Average number of full-time billable consultants (for the period) (1): |
||||||||||||
| Huron Healthcare (5) |
891 | 807 | ||||||||||
| Huron Legal |
146 | 122 | ||||||||||
| Huron Education and Life Sciences |
431 | 352 | ||||||||||
| Huron Financial |
62 | 68 | ||||||||||
|
|
|
|
|
|||||||||
| Total (5) |
1,530 | 1,349 | ||||||||||
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| Other Operating Data (continued): |
2013 | 2012 | ||||||
| Full-time billable consultant utilization rate (2): |
||||||||
| Huron Healthcare (5) |
83.5 | % | 79.2 | % | ||||
| Huron Legal |
58.1 | % | 68.8 | % | ||||
| Huron Education and Life Sciences |
66.7 | % | 72.7 | % | ||||
| Huron Financial |
80.5 | % | 55.2 | % | ||||
| Total (5) |
76.2 | % | 75.4 | % | ||||
| Full-time billable consultant average billing rate per hour (3): |
||||||||
| Huron Healthcare (5) |
$ | 211 | $ | 210 | ||||
| Huron Legal |
$ | 239 | $ | 246 | ||||
| Huron Education and Life Sciences |
$ | 215 | $ | 212 | ||||
| Huron Financial |
$ | 337 | $ | 306 | ||||
| Total (5) |
$ | 219 | $ | 217 | ||||
| Revenue per full-time billable consultant (in thousands): |
||||||||
| Huron Healthcare (5) |
$ | 254 | $ | 229 | ||||
| Huron Legal |
$ | 190 | $ | 238 | ||||
| Huron Education and Life Sciences |
$ | 204 | $ | 224 | ||||
| Huron Financial |
$ | 388 | $ | 238 | ||||
| Total (5) |
$ | 239 | $ | 229 | ||||
| Average number of full-time equivalents (for the period) (4): |
||||||||
| Huron Healthcare (5) |
54 | 59 | ||||||
| Huron Legal |
1,011 | 981 | ||||||
| Huron Education and Life Sciences |
44 | 30 | ||||||
| Huron Financial |
3 | 1 | ||||||
|
|
|
|
|
|||||
| Total (5) |
1,112 | 1,071 | ||||||
| Revenue per full-time equivalent (in thousands): |
||||||||
| Huron Healthcare (5) |
$ | 342 | $ | 285 | ||||
| Huron Legal |
$ | 102 | $ | 106 | ||||
| Huron Education and Life Sciences |
$ | 442 | $ | 484 | ||||
| Huron Financial |
$ | 429 | $ | 648 | ||||
| Total (5) |
$ | 128 | $ | 127 | ||||
| (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 of 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) | Effective January 1, 2013, a group within the Huron Healthcare segment that provides post-implementation services that was previously classified as full-time equivalents is now classified as full-time billable consultants due to the evolving nature of the services that they offer. Prior periods have been revised to reflect this change. |
N/M – Not meaningful
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6)
(In thousands)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues |
$ | 174,735 | $ | 161,888 | $ | 509,178 | $ | 445,196 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income from continuing operations |
$ | 17,161 | $ | 10,416 | $ | 44,344 | $ | 17,308 | ||||||||
| Add back: |
||||||||||||||||
| Income tax expense |
12,531 | 7,972 | 33,532 | 15,707 | ||||||||||||
| Interest and other expenses |
1,427 | 2,176 | 5,135 | 5,887 | ||||||||||||
| Depreciation and amortization |
5,643 | 5,666 | 16,631 | 16,656 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) (6) |
36,762 | 26,230 | 99,642 | 55,558 | ||||||||||||
| Add back: |
||||||||||||||||
| Restructuring charges |
— | 2,194 | 596 | 3,253 | ||||||||||||
| Restatement related expenses |
— | 68 | — | 1,785 | ||||||||||||
| Litigation settlement (gain) loss |
(5,300 | ) | — | (6,450 | ) | 1,150 | ||||||||||
| Goodwill impairment charge |
— | 13,083 | — | 13,083 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA (6) |
$ | 31,462 | $ | 41,575 | $ | 93,788 | $ | 74,829 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA as a percentage of revenues (6) |
18.0 | % | 25.7 | % | 18.4 | % | 16.8 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (6)
(In thousands)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net income from continuing operations |
$ | 17,161 | $ | 10,416 | $ | 44,344 | $ | 17,308 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares—diluted |
22,873 | 22,326 | 22,712 | 22,247 | ||||||||||||
| Diluted earnings per share from continuing operations |
$ | 0.75 | $ | 0.47 | $ | 1.95 | $ | 0.78 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Add back: |
||||||||||||||||
| Amortization of intangible assets |
1,440 | 1,923 | 4,347 | 5,149 | ||||||||||||
| Restructuring charges |
— | 2,194 | 596 | 3,253 | ||||||||||||
| Restatement related expenses |
— | 68 | — | 1,785 | ||||||||||||
| Litigation settlement (gain) loss |
(5,300 | ) | — | (6,450 | ) | 1,150 | ||||||||||
| Goodwill impairment charge |
— | 13,083 | — | 13,083 | ||||||||||||
| Tax effect |
1,544 | (6,840 | ) | 603 | (9,701 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total adjustments, net of tax |
(2,316 | ) | 10,428 | (904 | ) | 14,719 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted net income from continuing operations (6) |
$ | 14,845 | $ | 20,844 | $ | 43,440 | $ | 32,027 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted diluted earnings per share from continuing operations (6) |
$ | 0.65 | $ | 0.93 | $ | 1.91 | $ | 1.44 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (6) | In evaluating the Company’s financial performance, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted net income from continuing operations, and Adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Our management uses these non-GAAP financial measures to gain an understanding of our comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results. 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. |
HURON CONSULTING GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES FOR FULL YEAR 2013 OUTLOOK
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (7)
(In millions)
(Unaudited)
| Year Ending December 31, 2013 |
||||||||
| Guidance Range | ||||||||
| Low | High | |||||||
| Projected revenues – GAAP |
$ | 685.0 | $ | 700.0 | ||||
|
|
|
|
|
|||||
| Projected net income from continuing operations – GAAP |
$ | 58.0 | $ | 61.0 | ||||
| Add back: |
||||||||
| Income tax expense |
44.0 | 46.0 | ||||||
| Interest and other expenses |
7.0 | 7.0 | ||||||
| Depreciation and amortization |
24.0 | 24.0 | ||||||
|
|
|
|
|
|||||
| Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (7) |
133.0 | 138.0 | ||||||
| Add back: |
||||||||
| Restructuring charges |
0.5 | 0.5 | ||||||
| Litigation settlement gain |
(6.5 | ) | (6.5 | ) | ||||
|
|
|
|
|
|||||
| Projected adjusted EBITDA (7) |
$ | 127.0 | $ | 132.0 | ||||
|
|
|
|
|
|||||
| Projected adjusted EBITDA as a percentage of projected revenues (7) |
18.5 | % | 18.9 | % | ||||
|
|
|
|
|
|||||
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (7)
(In millions)
(Unaudited)
| Year Ending December 31, 2013 |
||||||||
| Guidance Range | ||||||||
| Low | High | |||||||
| Projected net income from continuing operations – GAAP |
$ | 58.0 | $ | 61.0 | ||||
|
|
|
|
|
|||||
| Projected diluted earnings per share from continuing operations – GAAP |
$ | 2.55 | $ | 2.67 | ||||
|
|
|
|
|
|||||
| Add back: |
||||||||
| Amortization of intangible assets |
6.8 | 6.8 | ||||||
| Restructuring charges |
0.5 | 0.5 | ||||||
| Litigation settlement gain |
(6.5 | ) | (6.5 | ) | ||||
| Tax effect |
(0.3 | ) | (0.3 | ) | ||||
|
|
|
|
|
|||||
| Total adjustments, net of tax |
0.5 | 0.5 | ||||||
| Projected adjusted net income from continuing operations (7) |
$ | 58.5 | $ | 61.5 | ||||
|
|
|
|
|
|||||
| Projected adjusted diluted earnings per share from continuing operations (7) |
$ | 2.60 | $ | 2.72 | ||||
|
|
|
|
|
|||||
| (7) | In evaluating the Company’s outlook, management uses Projected EBITDA, Projected adjusted EBITDA, Projected adjusted EBITDA as a percentage of revenues, Projected adjusted net income from continuing operations, and Projected adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Management believes that the use of such measures, as supplements to Projected net income from continuing operations and Projected diluted earnings per share from continuing operations and other GAAP measures, are useful indicators for investors. These useful indicators can help readers gain a meaningful understanding of the Company’s core operating results and future prospects without the effect of non-cash or other one-time items. 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. |