Board Appoints COO and Authorizes $50
Million Share Repurchase Program
Huron Consulting Group Inc. (NASDAQ: HURN):
Fourth Quarter 2013 Highlights:
- Record quarterly revenues in Q4 2013
were $211.3 million, an increase of 16.9%, compared to $180.8
million in Q4 2012.
- Operating income for Q4 2013 increased
6.8% to $36.9 million compared to $34.5 million in Q4
2012.
- Adjusted EBITDA(7), a non-GAAP measure,
increased 8.9% to $44.6 million in Q4 2013 compared to $41.0
million in Q4 2012.
- Diluted earnings per share from
continuing operations for Q4 2013 rose 15.7% to $0.96 compared to
$0.83 in Q4 2012.
- Adjusted diluted earnings per share
from continuing operations(7), a non-GAAP measure, rose 16.7% to
$1.05 in Q4 2013 compared to $0.90 in Q4 2012.
Full Year 2013 Highlights and 2014 Guidance:
- Revenues for full year 2013 increased
15.1% to $720.5 million compared to $626.0 million for full year
2012.
- Diluted earnings per share from
continuing operations for full year 2013 rose 81.4% to $2.92
compared to $1.61 for full year 2012.
- Adjusted diluted earnings per share
from continuing operations(7), a non-GAAP measure, rose 26.5% to
$2.96 in 2013 compared to $2.34 in 2012.
- The Company provides 2014 full year
revenue guidance in a range of $765.0 million to $795.0
million.
Executive Appointment and $50 Million Share Repurchase
Program:
- C. Mark Hussey, currently Chief
Financial Officer, will also assume the role of Chief Operating
Officer.
- Board authorizes $50 million share
repurchase program.
Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider
of business consulting services, today announced its financial
results for the fourth quarter and full year ended December 31,
2013.
“We are pleased with our record fourth quarter and full year
financial performance in 2013. Our strong finish to the year was
driven by higher than expected performance-based fees in our Huron
Healthcare segment, the result of delivering exceptional value to
our hospital clients and exceeding our clients’ expectations,” said
James H. Roth, chief executive officer and president, Huron
Consulting Group. “Huron continues to be a leader in providing
strategic, operational, and technology services. We anticipate
solid demand across all of our business segments in 2014, and we
believe that our markets will continue to provide attractive growth
opportunities.”
Fourth Quarter 2013 Results
Record quarterly revenues for the fourth quarter of 2013 were
$211.3 million, an increase of 16.9%, compared to $180.8 million
for the fourth quarter of 2012. The Company's fourth quarter 2013
operating income was $36.9 million compared to $34.5 million in the
fourth quarter of 2012. Net income from continuing operations was
$22.1 million, or $0.96 per diluted share, for the fourth quarter
of 2013 compared to $18.6 million, or $0.83 per diluted share, for
the same period last year.
Fourth quarter 2013 earnings before interest, taxes,
depreciation and amortization ("EBITDA")(7) rose 9.1% to $43.9
million, compared to $40.2 million in the comparable quarter last
year.
In evaluating the Company’s financial performance, management
uses non-GAAP financial measures, which exclude the effect of the
following items (in thousands):
Three Months Ended December 31,
2013 2012 Amortization of intangible assets $
2,451 $ 1,838 Restructuring charges $ 165 $ 751 Litigation
settlement loss $ 575 $ ------- Tax effect $ (1,276 ) $ (1,036 )
Adjusted EBITDA(7) was $44.6 million, or 21.1% of revenues, in
the fourth quarter of 2013 compared to $41.0 million, or 22.7% of
revenues, in the comparable quarter last year. Adjusted net income
from continuing operations(7) was $24.0 million, or $1.05 per
diluted share, for the fourth quarter of 2013 compared to $20.2
million, or $0.90 per diluted share, for the comparable period in
2012.
The average number of full-time billable consultants(1) was
1,668 in the fourth quarter of 2013 compared to 1,470 in the same
quarter last year. Full-time billable consultant utilization
rate(2) was 75.0% during the fourth quarter of 2013 compared with
76.3% during the same period last year. Average billing rate per
hour for full-time billable consultants(3) was $272 for the fourth
quarter of 2013 compared to $246 for the fourth quarter of 2012.
The average number of full-time equivalent professionals(4) was
1,312 in the fourth quarter of 2013 compared to 1,396 in the
comparable period in 2012.
Full Year 2013 Results
Revenues increased 15.1% to $720.5 million for the full year
2013 compared to $626.0 million for the full year 2012. The
Company's operating income for the full year 2013 was $119.9
million, an increase of 63.3%, compared to $73.4 million for the
full year 2012. Net income from continuing operations increased
84.9% to $66.5 million, or $2.92 per diluted share, for the
full year 2013 compared to $36.0 million, or $1.61 per diluted
share, for the full year 2012. Net income increased 82.4% to $66.4
million, or $2.92 per diluted share, for the full year 2013
compared to $36.4 million, or $1.63 per diluted share, for the full
year 2012.
EBITDA(7) increased 49.8% to $143.5 million for the full year
2013 compared to $95.8 million for the full year 2012.
In evaluating the Company’s financial performance, management
uses non-GAAP financial measures, which exclude the effect of the
following items (in thousands):
Twelve Months Ended December 31,
2013 2012 Amortization of intangible assets $
6,798 $ 6,987 Restructuring charges $ 761 $ 4,004 Restatement
related expenses $ ------- $ 1,785 Litigation and other settlement
(gains) losses $ (5,875 ) $ 1,150 Goodwill impairment charge $
------- $ 13,083 Tax effect $ (674 ) $ (10,737 )
Adjusted EBITDA(7) was $138.4 million, or 19.2% of revenues, for
the full year 2013 compared to $115.8 million, or 18.5% of
revenues, for the full year 2012. Adjusted net income from
continuing operations(7) was $67.5 million, or $2.96 per diluted
share, for the full year 2013 compared to $52.2 million, or $2.34
per diluted share, for the full year 2012.
The average number of full-time billable consultants(1)
increased 13.4% to 1,565 for the full year 2013 compared to 1,380
for the full year 2012. Full-time billable consultant utilization
rate(2) was 75.9% for the full year 2013 compared with 75.6% for
the full year 2012. Average billing rate per hour for full-time
billable consultants(3) was $233 for the full year 2013 compared to
$225 for the full year 2012. The average number of full-time
equivalent professionals(4) was 1,161 for the full year 2013
compared to 1,146 for the full year 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 as a
percentage of total Company revenues are as follows: Huron
Healthcare (50%); Huron Legal (25%); Huron Education and Life
Sciences (21%); and Huron Financial (4%). Financial results by
segment are included in the attached schedules and in Huron's
forthcoming Form 10-K filing for the year ended December 31, 2013.
Effective January 1, 2014, the Huron Financial segment name was
changed to Huron Business Advisory.
Acquisitions
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. Revenues
for 2013 included $4.7 million from our fourth quarter acquisition
of Blue Stone.
On December 19, 2013, Huron entered into an agreement to acquire
the assets of The Frankel Group Associates LLC, a leading life
sciences consulting firm. The transaction closed as of January 1,
2014.
Executive Appointment
Effective today, C. Mark Hussey will take on the additional
title of Chief Operating Officer. Hussey’s new title will be
Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Treasurer.
“Mark joined Huron in July 2011, and since that time, he has
made a tremendous contribution to the growth and success of our
Company,” said Roth. “Mark has gained the highest level of
respect from the practices and within the corporate staff, enabling
him to be efficient and effective in helping me execute our
strategic and operational plans. I take great pleasure in
promoting Mark to his new position, particularly because it comes
fully supported by our market-facing and corporate personnel, all
of whom clearly recognize the value that he brings to Huron.”
Share Repurchase Program
The Company's Board of Directors has authorized a share
repurchase program pursuant to which the Company may, from time to
time, repurchase up to $50 million of its common stock through
February 28, 2015. The amount and timing of the repurchases will be
determined by management and will depend on a variety of factors,
including the trading price of the Company's common stock, general
market and business conditions, and applicable legal
requirements.
Outlook for 2014
Based on currently available information, the Company provided
guidance for full year 2014 revenues before reimbursable expenses
in a range of $765.0 million to $795.0 million. The Company also
anticipates EBITDA(8) in a range of $141.0 million
to $149.5 million, Adjusted EBITDA(8) in a range of
$141.5 million to $150.0 million, GAAP diluted earnings per share
in a range of $2.80 to $3.00, and non-GAAP adjusted diluted
earnings per share(8) in a range of $3.00 to $3.20.
Management will provide a more detailed discussion of its
outlook during the Company’s earnings conference call webcast.
Fourth Quarter and Full Year 2013 Webcast
The Company will host a webcast to discuss its financial results
today, February 25, 2014, at 5:00 p.m. Eastern Time (4:00 p.m.
Central Time). The conference call is being webcast by NASDAQ OMX
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.
Use of Non-GAAP Financial Measures(7)
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.
About Huron Consulting Group
Huron Consulting Group helps clients in diverse industries
improve performance, transform the enterprise, 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
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 425 health systems, hospitals, and academic
medical centers; more than 400 corporate general counsel; and more
than 350 universities and research institutions. Learn more at
www.huronconsultinggroup.com.
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 forthcoming Annual
Report on Form 10-K for the year ended December 31, 2013, 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.
HURON CONSULTING GROUP INC. CONSOLIDATED
STATEMENTS OF EARNINGS (In thousands, except per share
amounts) (Unaudited) Three
Months Ended Twelve Months Ended December 31,
December 31, 2013 2012 2013
2012 Revenues and reimbursable expenses:
Revenues $ 211,344 $ 180,765 $ 720,522 $ 625,961 Reimbursable
expenses 16,266 13,944 67,267
55,764 Total revenues and reimbursable
expenses 227,610 194,709 787,789 681,725
Direct costs and reimbursable
expenses (exclusive of depreciation and amortization shown in
operating expenses):
Direct costs 128,455 106,942 443,539 384,884 Amortization of
intangible assets and software development costs 1,084 738 3,091
3,809
Reimbursable expenses
16,320 13,964 67,320
55,772 Total direct costs and reimbursable expenses
145,859 121,644 513,950
444,465
Operating expenses and other operating
gains: Selling, general and administrative expenses 38,231
32,829 138,538 125,266 Restructuring charges 165 751 761 4,004
Restatement related expenses - - - 1,785 Litigation and other
settlement (gains) losses 575 - (5,875 ) 1,150 Depreciation and
amortization 5,886 4,944 20,510 18,529 Goodwill impairment charge
- - - 13,083
Total operating expenses and other operating gains
44,857 38,524 153,934
163,817 Operating income 36,894 34,541 119,905 73,443
Other income (expense), net: Interest expense, net of
interest income (1,418 ) (2,030 ) (6,518 ) (8,223 ) Other income,
net 287 122 252
428 Total other expense, net (1,131 ) (1,908 )
(6,266 ) (7,795 ) Income from continuing operations
before income tax expense 35,763 32,633 113,639 65,648 Income tax
expense 13,644 13,988 47,176
29,695 Net income from continuing operations
22,119 18,645 66,463 35,953 Income (loss) from discontinued
operations, net of tax 1 (43 ) (30 )
475 Net income $ 22,120 $ 18,602 $
66,433 $ 36,428 Net earnings per basic share:
Net income from continuing operations $ 0.99 $ 0.85 $ 2.98 $ 1.64
Income (loss) from discontinued operations, net of tax -
- - 0.02 Net
income $ 0.99 $ 0.85 $ 2.98 $ 1.66
Net earnings per diluted share: Net income from continuing
operations $ 0.96 $ 0.83 $ 2.92 $ 1.61 Income (loss) from
discontinued operations, net of tax - -
- 0.02 Net income $ 0.96 $ 0.83
$ 2.92 $ 1.63 Weighted average shares
used in calculating earnings per share: Basic 22,409 21,976 22,322
21,905 Diluted 22,973 22,399 22,777 22,285
HURON
CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In
thousands, except share and per share amounts)
(Unaudited) December 31, December
31, 2013 2012 Assets
Current assets: Cash and cash equivalents $ 58,131 $ 25,162
Receivables from clients, net 123,750 97,510 Unbilled services, net
55,125 47,232 Income tax receivable 270 192 Deferred income taxes,
net 15,498 14,751 Prepaid expenses and other current assets
19,740 15,525 Total current assets 272,514
200,372 Property and equipment, net 38,742 33,805 Other non-current
assets 16,485 15,322 Intangible assets, net 21,222 18,879 Goodwill
536,637 519,522 Total assets $ 885,600
$ 787,900
Liabilities and stockholders’
equity Current liabilities: Accounts payable $ 8,185 $ 8,461
Accrued expenses 19,180 17,692 Accrued payroll and related benefits
97,677 61,672 Bank borrowings, current portion 25,000 - Accrued
consideration for business acquisitions, current portion 5,177
5,640 Income tax payable 2,917 7,872 Deferred revenues
15,248 15,388 Total current liabilities
173,384 116,725 Non-current liabilities: Deferred compensation and
other liabilities 5,360 6,973 Bank borrowings, net of current
portion 143,750 192,500 Deferred lease incentives 12,355 6,936
Deferred income taxes, net 20,487 14,560 Accrued consideration for
business acquisitions, net of current portion -
4,885 Total non-current liabilities 181,952 225,854
Commitments and Contingencies Stockholders’
equity Common stock; $0.01 par value; 500,000,000 shares
authorized; 25,246,565 and 24,793,327 shares issued at December 31,
2013 and December 31, 2012, respectively 245 240 Treasury stock, at
cost, 1,993,769 and 1,880,809 shares at December 31, 2013 and
December 31, 2012, respectively (88,091 ) (83,715 ) Additional
paid-in capital 443,144 420,825 Retained earnings 175,763 109,330
Accumulated other comprehensive loss (797 ) (1,359 )
Total stockholders’ equity 530,264 445,321
Total liabilities and stockholders’ equity $ 885,600
$ 787,900
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited)
Year Ended
December 31,
2013 2012 Cash flows from operating
activities: Net income $ 66,433 $ 36,428 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 23,609 25,251 Share-based
compensation 18,347 15,651 Allowances for doubtful accounts and
unbilled services 4,411 (4,935 ) Deferred income taxes 4,683 (521 )
Goodwill impairment charge - 13,083 Changes in operating assets and
liabilities, net of businesses acquired: (Increase) decrease in
receivables from clients (21,731 ) 19,713 (Increase) decrease in
unbilled services (11,932 ) 4,333 (Increase) decrease in current
income tax receivable / payable, net (5,027 ) 27,078 (Increase)
decrease in other assets 1,189 2,615 Increase (decrease) in
accounts payable and accrued liabilities 1,514 (10,226 ) Increase
(decrease) in accrued payroll and related benefits 34,724 (5,676 )
Increase (decrease) in deferred revenues (962 )
(20,430 ) Net cash provided by operating activities 115,258
102,364
Cash flows from investing
activities: Purchases of property and equipment, net (20,225 )
(17,521 ) Net investment in life insurance policies (1,002 ) (600 )
Purchases of businesses, net of cash acquired (30,297 ) (55,223 )
Capitalization of internally developed software (1,572 ) (895 )
Proceeds from note receivable 438 - Net
cash used in investing activities (52,658 ) (74,239 )
Cash flows from financing activities: Proceeds from
exercise of stock options 198 276 Shares redeemed for employee tax
withholdings (1,449 ) (4,438 ) Tax benefit from share-based
compensation 2,354 1,585 Proceeds from borrowings under credit
facility 96,000 273,000 Repayments on credit facility (119,750 )
(274,000 ) Payments for debt issue costs (1,155 ) (2,482 ) Payments
of capital lease obligations (19 ) (12 ) Deferred payment for
purchase of property and equipment (471 ) - Deferred acquisition
payments (5,356 ) (2,000 ) Net cash used in financing
activities (29,648 ) (8,071 ) Effect of
exchange rate changes on cash 17 28 Net increase in cash and
cash equivalents 32,969 20,082 Cash and cash equivalents at
beginning of the period 25,162 5,080
Cash and cash equivalents at end of the period $ 58,131 $
25,162
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA
(Unaudited)
Three Months EndedDecember 31,
Percent Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2013 2012 Huron
Healthcare: Revenues $ 114,118 $ 87,591 30.3 % Operating
income $ 50,430 $ 41,086 22.7 % Segment operating income as a
percentage of segment revenues 44.2 % 46.9 %
Huron Legal:
Revenues $ 51,098 $ 51,475 (0.7 )% Operating income $ 13,095 $
10,828 20.9 % Segment operating income as a percentage of segment
revenues 25.6 % 21.0 %
Huron Education and Life Sciences:
Revenues $ 40,638 $ 36,054 12.7 % Operating income $ 7,226 $ 10,232
(29.4 )% Segment operating income as a percentage of segment
revenues 17.8 % 28.4 %
Huron Financial: Revenues $ 4,906 $
5,198 (5.6 )% Operating income (loss) $ (716 ) $ 229 N/M Segment
operating income (loss) as a percentage of segment revenues (14.6
)% 4.4 %
All Other: Revenues $ 584 $ 447 30.6 % Operating
loss $ (555 ) $ (314 ) 76.8 % Segment operating loss as a
percentage of segment revenues N/M N/M
Total Company:
Revenues $ 211,344 $ 180,765 16.9 % Reimbursable expenses
16,266 13,944 16.7 %
Total revenues and
reimbursable expenses $ 227,610 $ 194,709 16.9 %
Statement of Earnings reconciliation: Segment
operating income $ 69,480 $ 62,061 12.0 % Items not allocated at
the segment level: Other operating expenses and gains 26,700 22,576
18.3 % Depreciation and amortization expense 5,886
4,944 19.1 % Total operating income 36,894 34,541 6.8
% Other expense, net 1,131 1,908 (40.7
)%
Income from continuing operations before income tax
expense $ 35,763 $ 32,633 9.6 %
Other
Operating Data (excluding All Other):
Number of full-time billable consultants
(at period end) (1): Huron Healthcare (5) 966 856
12.9 % Huron Legal 141 139 1.4 % Huron Education and Life Sciences
504 413 22.0 % Huron Financial 64 62
3.2 % Total (5) 1,675 1,470 13.9 %
Average number of full-time
billable consultants (for the period) (1): Huron
Healthcare (5) 954 857 Huron Legal 142 136 Huron Education and Life
Sciences 508 413 Huron Financial 64 64
Total (5) 1,668 1,470
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Three Months Ended December 31,
Other Operating Data (excluding All Other):
2013 2012 Full-time billable consultant
utilization rate (2): Huron Healthcare (5)
81.5% 80.4% Huron Legal 69.6% 63.7% Huron Education and Life
Sciences 66.8% 74.3% Huron Financial 53.8% 59.9% Total (5) 75.0%
76.3%
Full-time billable consultant average billing rate per
hour (3): Huron Healthcare (5) $ 297 $ 263 Huron
Legal $ 271 $ 220 Huron Education and Life Sciences $ 211 $ 210
Huron Financial $ 294 $ 291 Total (5) $ 272 $ 246
Revenue per
full-time billable consultant (in thousands): Huron Healthcare
(5) $ 114 $ 95 Huron Legal $ 82 $ 60 Huron Education and Life
Sciences $ 65 $ 71 Huron Financial $ 74 $ 80 Total (5) $ 95 $ 85
Average number of full-time equivalents (for the period)
(4): Huron Healthcare (5) 51 54 Huron Legal 1,216
1,298 Huron Education and Life Sciences 43 43 Huron Financial
2 1 Total (5) 1,312 1,396
Revenue per full-time
equivalent (in thousands): Huron Healthcare (5) $ 107 $ 106
Huron Legal $ 32 $ 33 Huron Education and Life Sciences $ 172 $ 160
Huron Financial $ 106 $ 52 Total (5) $ 40 $ 40
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA
(Unaudited)
Twelve Months EndedDecember 31,
Percent Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2013 2012 Huron
Healthcare: Revenues $ 358,766 $ 288,762 24.2 %
Operating income $ 141,870 $ 110,864 28.0 % Segment operating
income as a percentage of segment revenues 39.5 % 38.4 %
Huron
Legal: Revenues $ 182,394 $ 184,918 (1.4 )% Operating income $
41,964 $ 44,317 (5.3 )% Segment operating income as a percentage of
segment revenues 23.0 % 24.0 %
Huron Education and Life
Sciences: Revenues $ 148,304 $ 129,427 14.6 % Operating income
$ 35,898 $ 38,283 (6.2 )% Segment operating income as a percentage
of segment revenues 24.2 % 29.6 %
Huron Financial: Revenues
$ 29,974 $ 22,019 36.1 % Operating income $ 7,279 $ 1,888 285.5 %
Segment operating income as a percentage of segment revenues 24.3 %
8.6 %
All Other: Revenues $ 1,084 $ 835 29.8 % Operating
loss $ (1,256 ) $ (2,285 ) (45.0 )% Segment operating loss as a
percentage of segment revenues N/M N/M
Total Company:
Revenues $ 720,522 $ 625,961 15.1 % Reimbursable expenses
67,267 55,764 20.6 %
Total revenues and
reimbursable expenses $ 787,789 $ 681,725 15.6 %
Statement of Earnings reconciliation: Segment
operating income $ 225,755 $ 193,067 16.9 % Items not allocated at
the segment level: Other operating expenses and gains 85,340 88,012
(3.0 )% Depreciation and amortization expense 20,510 18,529 10.7 %
Goodwill impairment charge(6) — 13,083
(100.0 )% Total operating income 119,905 73,443 63.3 % Other
expense, net 6,266 7,795 (19.6 )%
Income from continuing operations before income tax expense
$ 113,639 $ 65,648 73.1 %
Other Operating
Data (excluding All Other):
Number of full-time billable consultants (at period
end) (1): Huron Healthcare (5) 966 856 12.9 %
Huron Legal 141 139 1.4 % Huron Education and Life Sciences 504 413
22.0 % Huron Financial 64 62 3.2 %
Total (5) 1,675 1,470 13.9 %
Average number of full-time
billable consultants (for the period) (1): Huron
Healthcare (5) 907 819 Huron Legal 146 126 Huron Education and Life
Sciences 450 368 Huron Financial 62 67
Total (5) 1,565 1,380
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Twelve Months Ended December 31,
Other Operating Data (excluding All Other):
2013 2012 Full-time billable consultant
utilization rate (2): Huron Healthcare (5)
83.0% 79.5% Huron Legal 60.8% 67.4% Huron Education and Life
Sciences 66.7% 73.1% Huron Financial 73.7% 56.3% Total (5) 75.9%
75.6%
Full-time billable consultant average billing rate per
hour (3): Huron Healthcare (5) $ 233 $ 224 Huron
Legal $ 248 $ 240 Huron Education and Life Sciences $ 214 $ 212
Huron Financial $ 329 $ 302 Total (5) $ 233 $ 225
Revenue per
full-time billable consultant (in thousands): Huron Healthcare
(5) $ 369 $ 325 Huron Legal $ 272 $ 299 Huron Education and Life
Sciences $ 269 $ 295 Huron Financial $ 460 $ 318 Total (5) $ 335 $
314
Average number of full-time equivalents (for the period)
(4): Huron Healthcare (5) 53 57 Huron Legal 1,062
1,054 Huron Education and Life Sciences 44 33 Huron Financial
2 2 Total (5) 1,161 1,146
Revenue per full-time
equivalent (in thousands): Huron Healthcare (5) $ 449 $ 396
Huron Legal $ 135 $ 140 Huron Education and Life Sciences $ 612 $
643 Huron Financial $ 543 $ 350 Total (5) $ 168 $ 168 (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. (6) The goodwill impairment charges
are not allocated at the segment level because the underlying
goodwill asset is reflective of our corporate investment in the
segments. We do not include the impact of goodwill impairment
charges in our evaluation of segment performance. N/M – Not
meaningful
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION AND AMORTIZATION (7)
(In thousands)
(Unaudited)
Three Months Ended Twelve Months
Ended December 31, December 31, 2013
2012 2013 2012 Revenues $
211,344 $ 180,765 $ 720,522 $ 625,961
Net income from continuing operations $ 22,119 $ 18,645 $
66,463 $ 35,953 Add back: Income tax expense 13,644 13,988 47,176
29,695 Interest and other expenses 1,131 1,908 6,266 7,795
Depreciation and amortization 6,970 5,682
23,601 22,338
Earnings before
interest, taxes, depreciation and amortization (EBITDA)
(7) 43,864 40,223 143,506 95,781 Add back: Restructuring
charges 165 751 761 4,004 Restatement related expenses — — — 1,785
Litigation and other settlement (gains) losses 575 — (5,875 ) 1,150
Goodwill impairment charge — — —
13,083
Adjusted EBITDA (7) $
44,604 $ 40,974 $ 138,392 $ 115,803
Adjusted EBITDA as a percentage of revenues (7)
21.1 % 22.7 % 19.2 % 18.5 %
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (7)
(In thousands)
(Unaudited)
Three Months Ended Twelve Months
Ended December 31, December 31, 2013
2012 2013 2012 Net income
from continuing operations $ 22,119 $ 18,645
$ 66,463 $ 35,953
Weighted average shares -
diluted 22,973 22,399
22,777 22,285
Diluted earnings per share from continuing
operations $ 0.96 $ 0.83
$ 2.92 $ 1.61 Add back: Amortization of intangible
assets 2,451 1,838
6,798 6,987 Restructuring charges 165 751
761 4,004 Restatement related expenses — —
— 1,785 Litigation and other settlement (gains) losses 575 —
(5,875 ) 1,150 Goodwill impairment charge — — — 13,083 Tax effect
(1,276 ) (1,036 )
(674 ) (10,737 ) Total adjustments, net of tax
1,915 1,553
1,010 16,272
Adjusted net income
from continuing operations (7) $ 24,034 $ 20,198
$ 67,473 $ 52,225
Adjusted diluted earnings per
share from continuing operations (7) $ 1.05 $
0.90
$ 2.96 $ 2.34 (7) 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 2014 OUTLOOK
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION AND AMORTIZATION (8)
(In millions)
(Unaudited)
Year Ending December 31, 2014
Guidance Range Low High Projected
revenues – GAAP $ 765.0 $ 795.0
Projected net income
from continuing operations – GAAP $ 65.0 $ 69.5 Add
back: Income tax expense 46.0 50.0 Interest and other expenses 5.0
5.0 Depreciation and amortization 25.0 25.0
Projected earnings before interest, taxes, depreciation and
amortization (EBITDA)
(8)
141.0 149.5 Add back: Restructuring charges 0.5
0.5
Projected adjusted EBITDA (8) $ 141.5
$ 150.0
Projected adjusted EBITDA as a percentage of
projected revenues (8) 18.5% 18.9%
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (8)
(In millions)
(Unaudited)
Year Ending December 31, 2014
Guidance Range Low High Projected
net income from continuing operations – GAAP $ 65.0
$ 69.5
Projected diluted earnings per share from
continuing operations – GAAP $ 2.80 $ 3.00
Add back: Amortization of intangible assets 7.0 7.0
Restructuring charges 0.5 0.5 Tax effect (3.0 )
(3.0 ) Total adjustments, net of tax 4.5 4.5
Projected
adjusted net income from continuing operations (8) $
69.5 $ 74.0
Projected adjusted diluted
earnings per share from
continuing operations
(8)
$ 3.00 $ 3.20 (8) 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.
Huron Consulting Group Inc.Media Contact:Jennifer Frost
Hennagir312-880-3260jfrost-hennagir@huronconsultinggroup.comorInvestor
Contact:C. Mark HusseyorEllen
Wong312-583-8722investor@huronconsultinggroup.com
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