- Revenues increased 22.9% to $209.4
million for Q2 2014 compared to $170.4 million in Q2 2013.
- Operating income increased 11.4% to
$34.0 million for Q2 2014 compared to $30.5 million in Q2
2013.
- Adjusted EBITDA(6), a non-GAAP measure,
increased 14.9% to $42.2 million in Q2 2014 compared to $36.7
million in Q2 2013.
- Diluted earnings per share from
continuing operations for Q2 2014 increased 24.6% to $0.86 compared
to $0.69 in Q2 2013.
- Adjusted diluted earnings per share
from continuing operations(6), a non-GAAP measure, increased 26.7%
to $0.95 in Q2 2014 compared to $0.75 in Q2 2013.
- Company raises its 2014 full year
revenue guidance to a range of $805.0 million to $825.0 million.
Company also raises GAAP diluted earnings per share in a range of
$3.40 to $3.55, and non-GAAP adjusted diluted earnings per share(7)
in a range of $3.25 to $3.40.
Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider
of business consulting services, today announced financial results
for the second quarter ended June 30, 2014.
"Strong second quarter results capped off a solid first half of
the year for the Company. Both the Huron Healthcare and Huron Legal
segments, which comprise approximately 75% of the Company’s
revenue, generated strong growth," said James H. Roth, chief
executive officer and president, Huron Consulting Group. "Our
business continues to be driven by the complex and rapidly-changing
business environment facing clients across our primary markets. We
expect that these pressures on our clients will remain or increase
during the coming years, and we are encouraged by our ability in
all of our operating segments to continue to provide value to our
clients as they address a difficult array of challenges.”
Second Quarter 2014 Results
Revenues for the second quarter of 2014 were $209.4 million, an
increase of 22.9% compared to $170.4 million for the second quarter
of 2013. The Company's second quarter 2014 operating income was
$34.0 million, compared to $30.5 million in the second quarter of
2013. Net income from continuing operations was $19.9 million,
or $0.86 per diluted share, for the second quarter of 2014,
compared to $15.8 million, or $0.69 per diluted share, for the
same period last year.
Second quarter 2014 earnings before interest, taxes,
depreciation and amortization ("EBITDA")(6) was $41.6 million, or
19.9% of revenues, compared to $36.1 million, or 21.2% of revenues,
in the comparable quarter last year.
In addition to using EBITDA to evaluate the Company’s financial
performance, management uses certain other non-GAAP financial
measures, which exclude the effect of the following items (in
thousands):
Three Months EndedJune 30, 2014
2013 Amortization of intangible assets $ 2,912 $ 1,451
Restructuring charges $ 1,034 $ 596 Other gain $ (440 ) $ — Tax
effect $ (1,402 ) $ (819 )
Adjusted EBITDA(6) was $42.2 million, or 20.1% of revenues, in
the second quarter of 2014, compared to $36.7 million, or 21.5% of
revenues, in the comparable quarter last year. Adjusted net income
from continuing operations(6) was $22.0 million, or $0.95 per
diluted share, for the second quarter of 2014 compared to $17.0
million, or $0.75 per diluted share, for the comparable period in
2013.
The average number of full-time billable consultants(1) was
1,784 in the second quarter of 2014 compared to 1,532 in the same
quarter last year. Full-time billable consultant utilization
rate(2) was 77.8% during the second quarter of 2014 compared with
76.9% during the same period last year. Average billing rate per
hour for full-time billable consultants(3) was $232 for the second
quarter of 2014 compared to $213 for the second quarter of 2013.
The average number of full-time equivalent professionals(4) totaled
1,157 in the second quarter of 2014 compared to 1,087 for the
comparable period in 2013.
Year-to-Date Results
Revenues for the first six months of 2014 were $420.1 million,
an increase of 25.6% compared to $334.4 million for the first half
of 2013. The Company's operating income for the first six months of
2014 was $75.8 million compared to $51.9 million in the first six
months of 2013. Net income from continuing operations was $54.0
million, or $2.34 per diluted share, for the first six months of
2014 compared to $27.2 million, or $1.20 per diluted share,
for the same period last year.
EBITDA(6) was $90.6 million, or 21.6% of revenues, for the
first half of 2014 compared to $62.9 million, or 18.8% of
revenues, for the same period in 2013.
In addition to using EBITDA to evaluate the Company’s financial
performance, management uses certain other non-GAAP financial
measures, which exclude the effect of the following items (in
thousands):
Six Months EndedJune 30,
2014 2013 Amortization of intangible assets $
5,430 $ 2,907 Restructuring charges $ 1,163 $ 596 Litigation and
other gains $ (440 ) $ (1,150 ) Tax effect $ (2,461 ) $ (941 ) Net
tax benefit related to “check-the-box” election
$
(10,244 )
$
—
Adjusted EBITDA(6) was $91.3 million, or 21.7% of revenues, in
the first half of 2014, compared to $62.3 million, or 18.6% of
revenues, in the comparable quarter last year. Adjusted net income
from continuing operations(6) was $47.5 million, or $2.06 per
diluted share, for the first six months of 2014 compared to $28.6
million, or $1.26 per diluted share, for the comparable period in
2013.
The average number of full-time billable consultants(1)
increased 15.4% to 1,751 in the first half of 2014 compared to
1,517 in the same quarter last year. Full-time billable consultant
utilization rate(2) was 76.0% during the first half of 2014
compared with 77.4% during the same period last year. Average
billing rate per hour for full-time billable consultants(3) was
$240 for the first six months of 2014 compared to $213 for the
first six months of 2013. The average number of full-time
equivalent professionals(4) increased 17.4% to 1,333 in the first
half of 2014 compared to 1,135 for the comparable period in
2013.
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 (26%); Huron Education and Life
Sciences (17%); and Huron Business Advisory (7%). Financial results
by segment are included in the attached schedules and in Huron's
forthcoming Form 10-Q filing for the quarter ended June 30,
2014.
Acquisition
On May 5, 2014, Huron completed its acquisition of Vonlay, LLC,
a healthcare technology consulting firm specializing in clinical,
administrative and financial system implementation and
optimization.
Share Repurchase Program
The Company's Board of Directors 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. In the second quarter of 2014 the Company repurchased
157,850 shares at an average price of $60.40, totaling
$9.5 million. The amount and timing of the repurchases are
determined by management and 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(7)
Based on currently available information, the Company raises
guidance, which was previously provided on April 29, 2014, for
full year 2014 revenues before reimbursable expenses in a range of
$805.0 million to $825.0 million. The Company also
raises EBITDA in a range of $151.7 million to $157.7
million, Adjusted EBITDA in a range of $152.5 million to
$158.5 million, GAAP diluted earnings per share in a range of $3.40
to $3.55, and non-GAAP adjusted diluted earnings per share in a
range of $3.25 to $3.40.
Management will provide a more detailed discussion of its
outlook during the Company’s earnings conference call webcast.
Second Quarter 2014 Webcast
The Company will host a webcast to discuss its financial results
today, July 29, 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(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.
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 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
June 30,
Six Months Ended
June 30,
2014 2013 2014 2013
Revenues and reimbursable expenses: Revenues $ 209,405 $
170,407 $ 420,136 $ 334,443 Reimbursable expenses 21,141
18,123 40,244 33,459
Total revenues and reimbursable expenses 230,546 188,530
460,380 367,902
Direct costs and reimbursable expenses
(exclusive of depreciation and amortization shown in operating
expenses): Direct costs 124,289 102,869 247,899 208,997
Amortization of intangible assets and software development costs
1,290 674 2,391 1,332 Reimbursable expenses 20,899
18,118 40,330 33,469
Total direct costs and reimbursable expenses 146,478
121,661 290,620 243,798
Operating expenses and other operating gains: Selling,
general and administrative expenses 43,184 30,847 80,872 63,110
Restructuring charges 1,034 596 1,163 596 Litigation and other
gains (440 ) - (440 ) (1,150 ) Depreciation and amortization
6,267 4,877 12,323 9,656
Total operating expenses and other operating gains
50,045 36,320 93,918
72,212 Operating income 34,023 30,549 75,842 51,892
Other
income (expense), net: Interest expense, net of interest income
(1,594 ) (1,706 ) (2,965 ) (3,569 ) Other income (expense), net
169 (152 ) 345 (139 )
Total other expense, net (1,425 ) (1,858 )
(2,620 ) (3,708 ) Income from continuing operations before
income tax expense 32,598 28,691 73,222 48,184 Income tax expense
12,685 12,877 19,183
21,001 Net income from continuing operations 19,913
15,814 54,039 27,183 Loss from discontinued operations, net of tax
- (9 ) - (41 ) Net income
$ 19,913 $ 15,805 $ 54,039 $ 27,142
Net earnings per basic share: Net income from continuing
operations $ 0.88 $ 0.71 $ 2.39 $ 1.22
Loss from discontinued operations, net of
tax
-
-
-
-
Net income $ 0.88 $ 0.71 $ 2.39 $ 1.22
Net earnings per diluted share: Net income from
continuing operations $ 0.86 $ 0.69 $ 2.34 $ 1.20 Loss from
discontinued operations, net of tax - -
- - Net income $ 0.86 $ 0.69
$ 2.34 $ 1.20 Weighted average shares
used in calculating earnings per share: Basic 22,645 22,351 22,617
22,246 Diluted 23,098 22,760 23,092 22,624
HURON CONSULTING
GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands,
except share and per share amounts) (Unaudited)
June 30,
2014
December 31,
2013
Assets Current assets: Cash and cash
equivalents $ 9,218 $ 58,131 Receivables from clients, net 136,149
123,750 Unbilled services, net 94,024 55,125 Income tax receivable
11,322 270 Deferred income taxes, net 11,931 15,498 Prepaid
expenses and other current assets 15,261
19,740 Total current assets 277,905 272,514 Property and
equipment, net 38,707 38,742 Other non-current assets 16,158 16,485
Intangible assets, net 29,773 21,222 Goodwill 566,998
536,637 Total assets $ 929,541 $ 885,600
Liabilities and stockholders’ equity Current
liabilities: Accounts payable $ 13,422 $ 8,185 Accrued expenses
15,845 19,180 Accrued payroll and related benefits 62,955 97,677
Bank borrowings, current portion 26,250 25,000 Accrued
consideration for business acquisitions 5,480 5,177 Income tax
payable - 2,917
Deferred revenues
16,588 15,248 Total current liabilities
140,540 173,384 Non-current liabilities: Deferred compensation and
other liabilities 10,003 5,360 Bank borrowings, net of current
portion 152,500 143,750 Deferred lease incentives 14,150 12,355
Deferred income taxes, net 22,867 20,487
Total non-current liabilities 199,520 181,952
Commitments and Contingencies Stockholders’
equity Common stock; $0.01 par value; 500,000,000 shares
authorized; 25,558,342 and 25,246,565 shares issued at June 30,
2014 and December 31, 2013, respectively 247 245 Treasury stock, at
cost, 2,066,921 and 1,993,769 shares at June 30, 2014 and December
31, 2013, respectively (92,412 ) (88,091 ) Additional paid-in
capital 452,429 443,144 Retained earnings 229,802 175,763
Accumulated other comprehensive loss (585 ) (797 )
Total stockholders’ equity 589,481 530,264
Total liabilities and stockholders’ equity $ 929,541
$ 885,600
HURON CONSULTING GROUP INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited) Six Months Ended
June 30,
2014 2013 Cash flows from operating
activities: Net income $ 54,039 $ 27,142 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 15,071 10,988 Share-based
compensation 10,273 8,832 Allowances for doubtful accounts and
unbilled services (281 ) 5,375 Deferred income taxes 5,816 5,213
Changes in operating assets and
liabilities, net of acquisitions:
(Increase) decrease in receivables from clients (4,679 ) 4,576
(Increase) decrease in unbilled services (37,220 ) (33,936 )
(Increase) decrease in current income tax receivable / payable, net
(13,966 ) (9,795 ) (Increase) decrease in other assets 4,489 712
Increase (decrease) in accounts payable and accrued liabilities
10,517 2,583 Increase (decrease) in accrued payroll and related
benefits (32,764 ) (15,849 ) Increase (decrease) in deferred
revenues 904 (3,120 )
Net cash provided by operating
activities
12,199
2,721
Cash flows from investing activities:
Purchases of property and equipment, net (11,433 ) (10,201 ) Net
investment in life insurance policies (797 ) (654 ) Purchases of
businesses (51,391 ) - Capitalization of internally developed
software - (1,058 ) Proceeds from note receivable 328
219 Net cash used in investing activities
(63,293 ) (11,694 )
Cash flows from financing
activities: Proceeds from exercise of stock options 779 30
Shares redeemed for employee tax withholdings (3,140 ) (581 ) Tax
benefit from share-based compensation 4,602 1,242 Share repurchases
(9,539 ) - Proceeds from borrowings under credit facility 74,000
66,000 Repayments on credit facility (64,000 ) (77,250 ) Payments
for debt issue costs (41 ) - Payments for capital lease obligations
(42 ) - Deferred payment for purchase of property and equipment
(471 ) (471 ) Deferred acquisition payment -
(481 ) Net cash provided by (used in) financing activities
2,148 (11,511 ) Effect of exchange rate
changes on cash 33 (70 ) Net decrease in cash and cash
equivalents (48,913 ) (20,554 ) Cash and cash equivalents at
beginning of the period 58,131 25,162
Cash and cash equivalents at end of the period $ 9,218 $
4,608
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA
(Unaudited)
Three Months EndedJune 30,
Percent
Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2014 2013 Huron
Healthcare: Revenues $ 100,967 $ 78,946 27.9% Operating
income $ 38,475 $ 29,507 30.4% Segment operating income as a
percentage of segment revenues 38.1% 37.4%
Huron Legal:
Revenues $ 53,296 $ 45,089 18.2% Operating income $ 15,790 $ 10,793
46.3% Segment operating income as a percentage of segment revenues
29.6% 23.9%
Huron Education and Life
Sciences:
Revenues $ 37,747 $ 37,134 1.7% Operating income $ 11,633 $ 11,547
0.7% Segment operating income as a percentage of segment revenues
30.8% 31.1%
Huron Business Advisory: Revenues $ 16,574 $
9,263 78.9% Operating income $ 5,129 $ 3,952 29.8% Segment
operating income as a percentage of segment revenues 30.9% 42.7%
All Other: Revenues $ 821 $ (25) N/M Operating loss $ (520)
$ (244) 113.1% Segment operating loss as a percentage of segment
revenues N/M N/M
Total Company: Revenues $ 209,405 $ 170,407
22.9% Reimbursable expenses 21,141 18,123 16.7%
Total revenues and reimbursable expenses $ 230,546 $ 188,530
22.3%
Statement of Earnings reconciliation: Segment
operating income $ 70,507 $ 55,555 26.9% Items not allocated at the
segment level: Other operating expenses and gains 30,217 20,129
50.1% Depreciation and amortization expense 6,267
4,877 28.5% Total operating income 34,023 30,549 11.4% Other
expense, net 1,425 1,858 (23.3)%
Income from
continuing operations before income tax expense $ 32,598 $
28,691 13.6%
Other Operating Data (excluding All
Other): Number of
full-time billable consultants (at period end)
(1): Huron Healthcare 1,114 916 21.6% Huron Legal 124
145 (14.5)% Huron Education and Life Sciences 407 434 (6.2)% Huron
Business Advisory 172 63 173.0% Total 1,817 1,558
16.6%
Average number of full-time billable consultants (for the
period) (1): Huron Healthcare 1,071 883 Huron
Legal 129 149 Huron Education and Life Sciences 415 438 Huron
Business Advisory 169 62 Total 1,784 1,532
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Three Months EndedJune 30,
Other Operating Data (excluding All
Other):
2014
2013
Full-time billable consultant utilization rate
(2): Huron Healthcare 81.7% 84.7% Huron Legal
68.0% 60.0% Huron Education and Life Sciences 71.8% 65.8% Huron
Business Advisory 75.3% 82.9% Total 77.8% 76.9%
Full-time
billable consultant average billing rate per hour
(3): Huron Healthcare $ 229 $ 199 Huron Legal (5) $
251 $ 221 Huron Education and Life Sciences $ 225 $ 223 Huron
Business Advisory $ 257 $ 348 Total (5) $ 232 $ 213
Revenue per
full-time billable consultant (in thousands): Huron Healthcare
$ 88 $ 82 Huron Legal (5) $ 80 $ 60 Huron Education and Life
Sciences $ 75 $ 70 Huron Business Advisory $ 94 $ 140 Total (5) $
85 $ 79
Average number of full-time equivalents (for the
period) (4): Huron Healthcare 58 54 Huron Legal
1,048 982 Huron Education and Life Sciences 44 48 Huron Business
Advisory 7 3 Total 1,157 1,087
Revenue per
full-time equivalent (in thousands): Huron Healthcare $ 115 $
116 Huron Legal (5) $ 41 $ 37 Huron Education and Life Sciences $
146 $ 132 Huron Business Advisory $ 104 $ 173 Total (5) $ 49 $ 45
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA
(Unaudited)
Six Months EndedJune 30,
Percent
Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2014 2013 Huron
Healthcare: Revenues $ 208,515 $ 157,691 32.2% Operating
income $ 89,695 $ 60,668 47.8% Segment operating income as a
percentage of segment revenues 43.0% 38.5%
Huron Legal:
Revenues
$ 108,271 $ 86,033 25.8% Operating income $ 28,278 $ 13,731 105.9%
Segment operating income as a percentage of segment revenues 26.1%
16.0%
Huron Education and Life Sciences: Revenues $ 71,323 $
72,860 (2.1)% Operating income $ 18,080 $ 20,899 (13.5)% Segment
operating income as a percentage of segment revenues 25.3% 28.7%
Huron Business Advisory: Revenues $ 29,956 $ 17,845 67.9%
Operating income $ 7,684 $ 7,331 4.8% Segment operating income as a
percentage of segment revenues 25.7% 41.1%
All Other:
Revenues $ 2,071 $ 14 N/M Operating loss $ (978) $ (416) 135.1%
Segment operating loss as a percentage of segment revenues N/M N/M
Total Company: Revenues $ 420,136 $ 334,443 25.6%
Reimbursable expenses 40,244 33,459 20.3%
Total revenues and
reimbursable expenses $ 460,380 $ 367,902 25.1%
Statement of Earnings reconciliation: Segment operating
income $ 142,759 $ 102,213 39.7% Items not allocated at the segment
level: Other operating expenses and gains 54,594 40,665 34.3%
Depreciation and amortization expense 12,323 9,656 27.6% Total
operating income 75,842 51,892 46.2% Other expense, net 2,620 3,708
(29.3)%
Income from continuing operations before income tax
expense $ 73,222 $ 48,184 52.0%
Other
Operating Data (excluding All Other):
Number of full-time billable consultants
(at period end) (1): Huron Healthcare 1,114 916
21.6% Huron Legal 124 145 (14.5)% Huron Education and Life Sciences
407 434 (6.2)% Huron Business Advisory 172 63 173.0% Total 1,817
1,558 16.6%
Average number of full-time billable consultants
(for the period) (1): Huron Healthcare 1,028 873
Huron Legal 134 148 Huron Education and Life Sciences 424 434 Huron
Business Advisory 165 62 Total 1,751 1,517
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Six Months EndedJune 30, Other Operating
Data (excluding All Other): 2014
2013 Full-time billable consultant utilization rate
(2): Huron Healthcare 80.4% 85.1% Huron Legal
66.2% 56.0% Huron Education and Life Sciences 70.0% 67.9% Huron
Business Advisory 72.0% 83.8% Total 76.0% 77.4%
Full-time
billable consultant average billing rate per hour
(3): Huron Healthcare $ 249 $ 202 Huron Legal (5) $
241 $ 221 Huron Education and Life Sciences $ 213 $ 215 Huron
Business Advisory $ 248 $ 339 Total (5) $ 240 $ 213
Revenue per
full-time billable consultant (in thousands): Huron Healthcare
$ 190 $ 167 Huron Legal (5) $ 146 $ 113 Huron Education and Life
Sciences $ 140 $ 140 Huron Business Advisory $ 173 $ 276 Total (5)
$ 173 $ 158
Average number of full-time equivalents (for the
period) (4): Huron Healthcare 55 55 Huron Legal
1,229 1,035 Huron Education and Life Sciences 42 43 Huron Business
Advisory 7 2 Total 1,333 1,135
Revenue per
full-time equivalent (in thousands): Huron Healthcare $ 243 $
219 Huron Legal (5) $ 72 $ 67 Huron Education and Life Sciences $
285 $ 282 Huron Business Advisory $ 187 $ 324 Total (5) $ 86 $ 83
(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) During the second quarter of 2014, we revised the
methodology we use to allocate revenue between our billable
consultants and our full-time equivalents in our Huron Legal
segment to better reflect the nature of the work being provided.
Operating data for the three and six months ended June 30, 2014, as
presented above, reflects this change. Operating data for the Huron
Legal segment for the three months ended March 31, 2014 has been
revised as follows: full-time billable consultant average billing
rate per hour decreased from $259 to $231, revenue per full-time
billable consultant decreased from $75 thousand to $67 thousand,
and revenue per full-time equivalent was unchanged. The impact on
our total Company results was immaterial.
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 EndedJune 30, Six
Months EndedJune 30, 2014 2013
2014 2013 Revenues $ 209,405 $ 170,407
$ 420,136 $ 334,443 Net income from continuing operations $
19,913 $ 15,814 $ 54,039 $ 27,183 Add back: Income tax expense
12,685 12,877 19,183 21,001 Interest and other expenses 1,425 1,858
2,620 3,708 Depreciation and amortization 7,557 5,551
14,714 10,988
Earnings before interest, taxes,
depreciation and amortization (EBITDA) (6) 41,580
36,100 90,556 62,880 Add back: Restructuring charges 1,034 596
1,163 596 Litigation and other gains (440) —
(440) (1,150)
Adjusted EBITDA (6) $ 42,174 $
36,696 $ 91,279 $ 62,326
Adjusted EBITDA as a percentage of
revenues (6) 20.1% 21.5% 21.7%
18.6%
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (6)
(In thousands)
(Unaudited)
Three Months EndedJune 30, Six
Months EndedJune 30, 2014 2013
2014 2013 Net income from continuing
operations $ 19,913 $ 15,814
$ 54,039 $ 27,183
Weighted average shares -
diluted 23,098 22,760
23,092 22,624
Diluted earnings per share from continuing
operations $ 0.86 $ 0.69
$ 2.34 $ 1.20 Add back: Amortization of intangible
assets 2,912 1,451
5,430 2,907 Restructuring charges 1,034 596
1,163 596 Litigation and other gains (440 ) —
(440 ) (1,150 ) Tax effect (1,402 ) (819 )
(2,461 ) (941 ) Net tax benefit related to “check-the-box” election
— —
(10,244 ) — Total adjustments, net of tax
2,104 1,228
(6,552 ) 1,412
Adjusted net income from
continuing operations (6) $ 22,017 $ 17,042
$ 47,487 $ 28,595
Adjusted diluted earnings per
share from continuing operations (6) $ 0.95 $
0.75
$ 2.06 $ 1.26
(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 2014 OUTLOOK RECONCILIATION OF
NET INCOME FROM CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION AND AMORTIZATION (7)
(In millions) (Unaudited) Year
EndingDecember 31, 2014 Guidance Range Low
High Projected revenues – GAAP $ 805.0
$ 825.0
Projected net income from continuing
operations – GAAP $ 79.0 $ 82.5 Add back: Income tax
expense 37.0 39.5 Interest and other expenses 5.7 5.7 Depreciation
and amortization 30.0 30.0
Projected earnings before interest, taxes, depreciation
andamortization (EBITDA) (7) 151.7 157.7 Add
back: Restructuring charges 1.2 1.2 Other gain (0.4 )
(0.4 )
Projected adjusted EBITDA (7) $ 152.5
$ 158.5
Projected adjusted EBITDA as a
percentage of projected revenues (7)
18.9%
19.2%
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (7)
(In millions)
(Unaudited)
Year EndingDecember 31, 2014 Guidance
Range Low High Projected net income
from continuing operations – GAAP $ 79.0 $ 82.5
Projected diluted earnings per share from continuing
operations – GAAP $ 3.40 $ 3.55 Add back:
Amortization of intangible assets 10.5 10.5 Restructuring
charges 1.2 1.2 Other gain (0.4 ) (0.4 ) Tax effect (4.6 ) (4.6 )
Net tax benefit related to “check-the-box” election (10.2 )
(10.2 ) Total adjustments, net of tax (3.5 ) (3.5 )
Projected adjusted net income from continuing operations
(7) $ 75.5 $ 79.0
Projected adjusted
diluted earnings per share fromcontinuing operations
(7) $ 3.25 $ 3.40
(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.
Huron Consulting Group Inc.Media:Jennifer Frost
Hennagir312-880-3260jfrost-hennagir@huronconsultinggroup.comInvestors:C.
Mark HusseyorEllen
Wong312-583-8722investor@huronconsultinggroup.com
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