Fourth Quarter 2014 Highlights:
- Revenues for Q4 2014 were $193.1
million compared to $211.3 million in Q4 2013.
- Operating income for Q4 2014 was $25.9
million compared to $36.9 million in Q4 2013.
- Adjusted EBITDA(6), a non-GAAP measure,
was $35.6 million in Q4 2014 compared to $44.6 million in Q4
2013.
- Diluted earnings per share from
continuing operations for Q4 2014 were $0.57 compared to $0.96 in
Q4 2013.
- Adjusted diluted earnings per share
from continuing operations(6), a non-GAAP measure, was $0.74 in Q4
2014 compared to $1.05 in Q4 2013.
Full Year 2014 Highlights and 2015 Guidance:
- Revenues for full year 2014 increased
12.6% to $811.3 million compared to $720.5 million for full year
2013.
- Operating income for full year 2014
increased 2.6% to $123.0 million compared to $119.9
million for full year 2013.
- Adjusted EBITDA(6) for full year 2014
rose 12.5% to $155.7 million compared to $138.4 million for
full year 2013.
- Diluted earnings per share from
continuing operations for full year 2014 rose 18.2% to $3.45
compared to $2.92 for full year 2013.
- Adjusted diluted earnings per share
from continuing operations(6) rose 15.5% to $3.42 in 2014 compared
to $2.96 in 2013.
- The Company provides 2015 full year
revenue guidance in a range of $880.0 million to $920.0
million.
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,
2014.
“Our Healthcare, Education and Life Sciences, and Business
Advisory segments finished with a strong fourth quarter, building
upon the ongoing challenges in our clients’ markets. Huron
Healthcare, our largest segment, continues to have a strong track
record of winning assignments that involve large hospital systems
and academic medical centers where the size and degree of
complexity are a perfect fit for our competencies. Our Legal
segment had a difficult fourth quarter, stemming largely from a
more sudden than anticipated downturn in business resulting from
the settlement of government investigations related to the credit
crisis,” said James H. Roth, chief executive officer and president,
Huron Consulting Group.
“We believe our strong finish to 2014 has put Huron in position
to execute our growth and profitability strategies for 2015. The
recent acquisition of Studer Group also enhances our healthcare
strategy and adds a tremendously talented group of people to our
already highly reputable healthcare practice,” added Roth.
Fourth Quarter 2014 Results
Revenues for the fourth quarter of 2014 were $193.1 million
compared to $211.3 million for the fourth quarter of 2013. The
Company's fourth quarter 2014 operating income was $25.9 million
compared to $36.9 million in the fourth quarter of 2013. Net income
from continuing operations was $12.8 million, or $0.57 per diluted
share, for the fourth quarter of 2014 compared to $22.1 million, or
$0.96 per diluted share, for the same period last year.
Fourth quarter 2014 earnings before interest, taxes,
depreciation and amortization ("EBITDA")(6) was $33.5 million,
compared to $43.9 million in the same 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,
2014 2013 Amortization of intangible assets $
2,836 $ 2,451 Restructuring charges $ 2,042 $ 165 Litigation loss $
— $ 575 Non-cash interest on convertible notes $ 1,733 $ — Tax
effect $ (2,644 ) $ (1,276 )
Adjusted EBITDA(6) was $35.6 million, or 18.4% of revenues, in
the fourth quarter of 2014 compared to $44.6 million, or 21.1% of
revenues, in the fourth quarter of 2013. Adjusted net income from
continuing operations(6) was $16.8 million, or $0.74 per diluted
share, for the fourth quarter of 2014 compared to $24.0 million, or
$1.05 per diluted share, for the fourth quarter of 2013.
The average number of full-time billable consultants(1)
increased 11.3% to 1,857 in the fourth quarter of 2014 compared to
1,668 in the same quarter last year. Full-time billable consultant
utilization rate(2) was 74.5% during the fourth quarter of 2014
compared with 75.0% during the same period last year. Average
billing rate per hour for full-time billable consultants(3) was
$252 for the fourth quarter of 2014 compared to $269 for the fourth
quarter of 2013. The average number of full-time equivalent
professionals(4) was 853 in the fourth quarter of 2014 compared to
1,312 in the comparable period in 2013. The significant decrease in
the average number of full-time equivalent professionals was driven
by the slowdown in our Huron Legal segment during the fourth
quarter of 2014.
Full Year 2014 Results
Revenues increased 12.6% to $811.3 million for the full year
2014 compared to $720.5 million for the full year 2013. The
Company's operating income for the full year 2014 was $123.0
million compared to $119.9 million for the full year 2013. Net
income from continuing operations increased 18.9% to
$79.1 million, or $3.45 per diluted share, for the full year
2014 compared to $66.5 million, or $2.92 per diluted share, for the
full year 2013.
EBITDA(6) increased 6.5% to $152.9 million for the full year
2014 compared to $143.5 million for the full year 2013.
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,
2014 2013 Amortization of intangible assets $
11,101 $ 6,798 Restructuring charges $ 3,438 $ 761 Litigation and
other (gains) losses $ (590 ) $ (5,875 ) Non-cash interest on
convertible notes $ 2,139 $ — Tax effect $ (6,435 ) $ (674 ) Net
tax benefit related to “check-the-box” election $ (10,244 ) $ —
Adjusted EBITDA(6) was $155.7 million, or 19.2% of revenues, for
the full year 2014 compared to $138.4 million, or 19.2% of
revenues, for the full year 2013. Adjusted net income from
continuing operations(6) was $78.5 million, or $3.42 per diluted
share, for the full year 2014 compared to $67.5 million, or $2.96
per diluted share, for the full year 2013.
The average number of full-time billable consultants(1)
increased 14.8% to 1,797 for the full year 2014 compared to 1,565
for the full year 2013. Full-time billable consultant utilization
rate(2) was 74.6% for the full year 2014 compared with 75.9% for
the full year 2013. Average billing rate per hour for full-time
billable consultants(3) was $242 for the full year 2014 compared to
$232 for the full year 2013. The average number of full-time
equivalent professionals(4) was 1,163 for the full year 2014
compared to 1,161 for the full year 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 are as
follows: Huron Healthcare (51%); Huron Legal (23%); Huron Education
and Life Sciences (18%); and Huron Business Advisory, which
includes EPM & Analytics, (8%). 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, 2014.
Acquisitions
On October 1, 2014, Huron completed its acquisition of Threshold
Consulting, Inc., a provider of cloud-based Software as a Service
(SaaS) applications, data warehousing and business intelligence
(BI) solutions, as well as customer relationship management (CRM)
consulting capabilities.
Effective January 1, 2015, Huron completed its acquisition of
Sky Analytics, Inc., a Massachusetts-based provider of legal
spend management software for corporate law departments.
On February 12, 2015, Huron completed its acquisition of Studer
Group®, a premier professional services firm that assists
healthcare providers achieve cultural transformation to deliver and
sustain exceptional improvement in clinical outcomes and financial
results.
Outlook for 2015(7)
Based on currently available information, the Company provided
guidance for full year 2015, which includes Studer Group, of
revenues before reimbursable expenses in a range of $880.0 million
to $920.0 million. The Company also
anticipates EBITDA(7) in a range of $169.0 million
to $180.0 million, Adjusted EBITDA(7) in a range of
$173.0 million to $184.0 million, GAAP diluted earnings per share
in a range of $2.65 to $2.95, and non-GAAP adjusted diluted
earnings per share(7) in a range of $3.70 to $4.00.
Management will provide a more detailed discussion of its
outlook during the Company’s earnings conference call webcast.
Fourth Quarter and Full Year 2014 Webcast
The Company will host a webcast to discuss its financial results
today, February 24, 2015, 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, analytics, 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 450 health systems, hospitals, and academic
medical centers; more than 400 corporate general counsel; and more
than 400 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, 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. Some of the factors that
could cause actual results to differ materially from the
forward-looking statements contained herein include, without
limitation: failure to achieve expected utilization rates, billing
rates and the number of revenue-generating professionals; inability
to expand or adjust our service offerings in response to market
demands; our dependence on renewal of client-based services;
dependence on new business and retention of current clients and
qualified personnel; failure to maintain third-party provider
relationships and strategic alliances; inability to license
technology to and from third parties; the impairment of goodwill;
various factors related to income and other taxes; difficulties in
successfully integrating the businesses we acquire and achieving
expected benefits from such acquisitions; risks relating to
privacy, information security, and related laws and standards; and
a general downturn in market conditions. These forward-looking
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, 2014, 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,
2014 2013 2014
2013 Revenues and reimbursable expenses: Revenues $
193,147 $ 211,344 $ 811,332 $ 720,522 Reimbursable expenses
18,952 16,266 77,875
67,267 Total revenues and reimbursable expenses 212,099
227,610 889,207 787,789
Direct costs and reimbursable
expenses (exclusive of depreciation and amortization shown in
operating expenses): Direct costs 122,373 128,455 500,171 443,539
Amortization of intangible assets and software development costs
1,270 1,084 4,888 3,091 Reimbursable expenses 18,875
16,320 77,856 67,320
Total direct costs and reimbursable expenses 142,518
145,859 582,915 513,950
Operating expenses and other operating gains: Selling,
general and administrative expenses 35,286 38,231 155,434 138,538
Restructuring charges 2,042 165 3,438 761 Litigation and other
(gains) losses - 575 (590 ) (5,875 ) Depreciation and amortization
6,376 5,886 25,014
20,510 Total operating expenses and other operating gains
43,704 44,857 183,296
153,934 Operating income 25,877 36,894 122,996
119,905
Other income (expense), net: Interest expense, net
of interest income (3,898 ) (1,418 ) (8,741 ) (6,518 ) Other
income, net 62 287 353
252 Total other expense, net (3,836 )
(1,131 ) (8,388 ) (6,266 ) Income from continuing
operations before income tax expense 22,041 35,763 114,608 113,639
Income tax expense 9,248 13,644
35,557 47,176 Net income from continuing
operations 12,793 22,119 79,051 66,463 Income (loss) from
discontinued operations, net of tax - 1
- (30 ) Net income $ 12,793 $ 22,120
$ 79,051 $ 66,433 Net earnings per
basic share: Net income from continuing operations $ 0.58 $ 0.99 $
3.52 $ 2.98 Income (loss) from discontinued operations, net of tax
- - - - Net
income $ 0.58 $ 0.99 $ 3.52 $ 2.98
Net earnings per diluted share: Net income from continuing
operations $ 0.57 $ 0.96 $ 3.45 $ 2.92 Income (loss) from
discontinued operations, net of tax - -
- - Net income $ 0.57 $ 0.96
$ 3.45 $ 2.92 Weighted average shares
used in calculating earnings per share: Basic 22,010 22,409 22,431
22,322 Diluted 22,548 22,973 22,925 22,777
HURON CONSULTING
GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands,
except share and per share amounts) (Unaudited)
December 31, December 31,
2014 2013 Assets Current assets: Cash
and cash equivalents $ 256,872 $ 58,131 Receivables from clients,
net 98,640 123,750 Unbilled services, net 91,392 55,125 Income tax
receivable 8,125 270 Deferred income taxes, net 14,772 15,498
Prepaid expenses and other current assets 16,358
19,740 Total current assets 486,159 272,514 Property
and equipment, net 44,677 38,742 Long-term investment 12,250 -
Other non-current assets 20,998 16,485 Intangible assets, net
24,684 21,222 Goodwill 567,146 536,637
Total assets $ 1,155,914 $ 885,600
Liabilities and stockholders’ equity Current liabilities:
Accounts payable $ 11,085 $ 8,185 Accrued expenses 17,089 19,180
Accrued payroll and related benefits 106,488 97,677 Current
maturities of long-term debt 28,750 25,000 Accrued consideration
for business acquisitions 226 5,177 Income tax payable - 2,917
Deferred revenues 12,738 15,248
Total current liabilities
176,376 173,384 Non-current liabilities: Deferred compensation and
other liabilities 10,838 5,360 Long-term debt, net of current
portion 327,852 143,750 Deferred lease incentives 13,359 12,355
Deferred income taxes, net 26,855 20,487
Total non-current liabilities 378,904 181,952
Commitments and Contingencies Stockholders’
equity Common stock; $0.01 par value; 500,000,000 shares
authorized; 24,976,395 and 25,246,565 shares issued at December 31,
2014 and December 31, 2013, respectively 241 245 Treasury stock, at
cost, 2,097,173 and 1,993,769 shares at December 31, 2014 and
December 31, 2013, respectively (94,074 ) (88,091 ) Additional
paid-in capital 442,308 443,144 Retained earnings 254,814 175,763
Accumulated other comprehensive loss (2,655 ) (797 )
Total stockholders’ equity 600,634 530,264
Total liabilities and stockholders’ equity $ 1,155,914
$ 885,600
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Year Ended December 31, 2014
2013 Cash flows from operating activities: Net income
$ 79,051 $ 66,433 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
30,989 23,609 Share-based compensation 20,130 18,347 Amortization
of debt discount and issuance costs 3,832 1,363 Allowances for
doubtful accounts and unbilled services 5,918 4,411 Deferred income
taxes 8,096 4,683 Changes in operating assets and liabilities, net
of acquisitions: (Increase) decrease in receivables from clients
30,072 (21,731 ) (Increase) decrease in unbilled services (38,211 )
(11,932 ) (Increase) decrease in current income tax receivable /
payable, net (10,773 ) (5,027 )
(Increase) decrease in other assets
2,324 (174 ) Increase (decrease) in accounts payable and accrued
liabilities 9,164 1,514 Increase (decrease) in accrued payroll and
related benefits 8,835 34,724 Increase (decrease) in deferred
revenues (2,974 ) (962 ) Net cash provided by
operating activities 146,453 115,258
Cash flows from investing activities: Purchases of
property and equipment (25,913 ) (20,225 ) Investment in life
insurance policies (1,775 ) (1,002 ) Purchases of businesses
(53,971 ) (30,297 ) Purchase of convertible debt investment (12,500
) - Capitalization of internally developed software - (1,572 )
Proceeds from note receivable 328 438
Net cash used in investing activities (93,831 )
(52,658 )
Cash flows from financing activities:
Proceeds from exercise of stock options 857 198 Shares redeemed for
employee tax withholdings (3,653 ) (1,449 ) Tax benefit from
share-based compensation 5,107 2,354 Share repurchases (50,000 ) -
Proceeds from borrowings under credit facility 129,000 96,000
Repayments on credit facility (154,000 ) (119,750 ) Proceeds from
convertible senior notes issuance 250,000 - Proceeds from sale of
warrants 23,625 - Payments for convertible senior note hedges
(42,125 ) - Payments for debt issuance costs (7,346 ) (1,155 )
Payments of capital lease obligations (79 ) (19 ) Deferred payment
for purchase of property and equipment (471 ) (471 ) Deferred
acquisition payments (4,745 ) (5,356 ) Net cash
provided by (used in) financing activities 146,170
(29,648 ) Effect of exchange rate changes on cash (51
) 17 Net increase in cash and cash equivalents 198,741
32,969 Cash and cash equivalents at beginning of the period
58,131 25,162 Cash and cash equivalents at end
of the period $ 256,872 $ 58,131
HURON CONSULTING
GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING
DATA (Unaudited)
Three Months EndedDecember
31,
PercentIncrease(Decrease)
Segment and Consolidated Operating Results (in thousands):
2014 2013 Huron
Healthcare: Revenues $ 109,476 $ 114,118 (4.1 )%
Operating income $ 41,593 $ 50,430 (17.5 )% Segment operating
income as a percentage of segment revenues 38.0 % 44.2 %
Huron
Legal: Revenues $ 29,229 $ 51,098 (42.8 )% Operating income $
6,937 $ 13,095 (47.0 )% Segment operating income as a percentage of
segment revenues 23.7 % 25.6 %
Huron Education and Life
Sciences: Revenues $ 38,116 $ 35,943 6.0 % Operating income $
8,592 $ 7,294 17.8 % Segment operating income as a percentage of
segment revenues 22.5 % 20.3 %
Huron Business Advisory:
Revenues $ 15,742 $ 9,601 64.0 % Operating income (loss) $ 1,954 $
(784 ) N/M Segment operating income (loss) as a percentage of
segment revenues 12.4 % (8.2 )%
All Other: Revenues $ 584 $
584 0.0 % Operating loss $ (833 ) $ (555 ) 50.1 % Segment operating
loss as a percentage of segment revenues N/M N/M
Total
Company: Revenues $ 193,147 $ 211,344 (8.6 )% Reimbursable
expenses 18,952 16,266 16.5 %
Total
revenues and reimbursable expenses $ 212,099 $ 227,610
(6.8 )%
Statement of Earnings reconciliation:
Segment operating income $ 58,243 $ 69,480 (16.2 )% Items not
allocated at the segment level: Other operating expenses and gains
25,990 26,700 (2.7 )% Depreciation and amortization expense
6,376 5,886 8.3 % Total operating income
25,877 36,894 (29.9 )% Other expense, net 3,836
1,131 239.2 %
Income from continuing operations
before income tax expense $ 22,041 $ 35,763 (38.4
)%
Other Operating Data (excluding All Other):
Number of full-time billable
consultants (at period end) (1): Huron Healthcare
1,099 966 13.8 % Huron Legal 119 141 (15.6 )% Huron Education and
Life Sciences 418 413 1.2 % Huron Business Advisory 205
155 32.3 % Total 1,841 1,675 9.9 %
Average
number of full-time billable consultants (for the period)
(1): Huron Healthcare 1,109 954 Huron Legal 124 142
Huron Education and Life Sciences 417 417 Huron Business Advisory
207 155 Total 1,857 1,668
HURON
CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED) (Unaudited) Three
Months Ended December 31, Other Operating Data
(excluding All Other): 2014 2013
Full-time billable consultant utilization rate
(2): Huron Healthcare 78.6 % 81.5 % Huron
Legal 57.3 % 69.6 % Huron Education and Life Sciences 74.2 % 66.0 %
Huron Business Advisory 63.5 % 63.3 % Total 74.5 % 75.0 %
Full-time billable consultant average billing rate per hour
(3): Huron Healthcare $ 262 $ 297 Huron Legal (5) $
242 $ 245 Huron Education and Life Sciences $ 227 $ 222 Huron
Business Advisory $ 248 $ 204 Total (5) $ 252 $ 269
Revenue per
full-time billable consultant (in thousands): Huron Healthcare
$ 92 $ 114 Huron Legal (5) $ 61 $ 74 Huron Education and Life
Sciences $ 76 $ 68 Huron Business Advisory $ 71 $ 60 Total (5) $ 84
$ 94
Average number of full-time equivalents (for the
period) (4): Huron Healthcare 68 51 Huron Legal
728 1,216 Huron Education and Life Sciences 46 43 Huron Business
Advisory 11 2 Total 853 1,312
Revenue per full-time equivalent (in thousands): Huron
Healthcare $ 105 $ 107 Huron Legal (5) $ 30 $ 33 Huron Education
and Life Sciences $ 144 $ 180 Huron Business Advisory $ 96 $ 100
Total (5) $ 43 $ 41
HURON CONSULTING GROUP INC. SEGMENT
OPERATING RESULTS AND OTHER OPERATING DATA (Unaudited)
Twelve Months EndedDecember 31,
PercentIncrease(Decrease)
Segment and Consolidated Operating Results (in thousands):
2014 2013 Huron
Healthcare: Revenues $ 415,803 $ 358,766 15.9 %
Operating income $ 159,015 $ 141,870 12.1 % Segment operating
income as a percentage of segment revenues 38.2 % 39.5 %
Huron
Legal: Revenues $ 183,646 $ 182,394 0.7 % Operating income $
46,164 $ 41,964 10.0 % Segment operating income as a percentage of
segment revenues 25.1 % 23.0 %
Huron Education and Life
Sciences: Revenues $ 145,962 $ 143,609 1.6 % Operating income $
36,131 $ 35,966 0.5 % Segment operating income as a percentage of
segment revenues 24.8 % 25.0 %
Huron Business Advisory:
Revenues $ 62,840 $ 34,669 81.3 % Operating income $ 14,035 $ 7,211
94.6 % Segment operating income as a percentage of segment revenues
22.3 % 20.8 %
All Other: Revenues $ 3,081 $ 1,084 184.2 %
Operating loss $ (2,466 ) $ (1,256 ) 96.3 % Segment operating loss
as a percentage of segment revenues N/M N/M
Total Company:
Revenues $ 811,332 $ 720,522 12.6 % Reimbursable expenses
77,875 67,267 15.8 %
Total revenues and
reimbursable expenses $ 889,207 $ 787,789 12.9 %
Statement of Earnings reconciliation: Segment
operating income $ 252,879 $ 225,755 12.0 % Items not allocated at
the segment level: Other operating expenses and gains 104,869
85,340 22.9 % Depreciation and amortization expense 25,014
20,510 22.0 % Total operating income 122,996
119,905 2.6 % Other expense, net 8,388 6,266
33.9 %
Income from continuing operations before income
tax expense $ 114,608 $ 113,639 0.9 %
Other Operating Data (excluding All Other):
Number of full-time billable
consultants (at period end) (1): Huron Healthcare
1,099 966 13.8 % Huron Legal 119 141 (15.6 )% Huron Education and
Life Sciences 418 413 1.2 % Huron Business Advisory 205
155 32.3 % Total 1,841 1,675 9.9 %
Average
number of full-time billable consultants (for the period)
(1): Huron Healthcare 1,070 907 Huron Legal 130 146
Huron Education and Life Sciences 417 427 Huron Business Advisory
180 85 Total 1,797 1,565
HURON
CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED) (Unaudited) Twelve
Months Ended December 31, Other Operating Data
(excluding All Other): 2014 2013
Full-time billable consultant utilization rate
(2): Huron Healthcare 78.3 % 83.0 % Huron
Legal 63.5 % 60.8 % Huron Education and Life Sciences 71.3 % 66.6 %
Huron Business Advisory 68.0 % 72.7 % Total 74.6 % 75.9 %
Full-time billable consultant average billing rate per hour
(3): Huron Healthcare $ 248 $ 233 Huron Legal (5) $
242 $ 231 Huron Education and Life Sciences $ 219 $ 216 Huron
Business Advisory $ 255 $ 285 Total (5) $ 242 $ 232
Revenue per
full-time billable consultant (in thousands): Huron Healthcare
$ 363 $ 369 Huron Legal (5) $ 280 $ 254 Huron Education and Life
Sciences $ 292 $ 272 Huron Business Advisory $ 330 $ 392 Total (5)
$ 337 $ 333
Average number of full-time equivalents (for the
period) (4): Huron Healthcare 60 53 Huron Legal
1,051 1,062 Huron Education and Life Sciences 43 44 Huron Business
Advisory 9 2 Total 1,163 1,161
Revenue per full-time equivalent (in thousands): Huron
Healthcare $ 461 $ 449 Huron Legal (5) $ 140 $ 137 Huron Education
and Life Sciences $ 558 $ 620 Huron Business Advisory $ 390 $ 530
Total (5) $ 174 $ 170 (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 twelve
months ended December 31, 2014 and 2013, as presented above,
reflects 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 Twelve Months Ended December 31,
December 31, 2014 2013 2014
2013 Revenues $ 193,147 $ 211,344
$ 811,332 $ 720,522 Net income from
continuing operations $ 12,793 $ 22,119 $ 79,051 $ 66,463 Add back:
Income tax expense 9,248 13,644 35,557 47,176 Interest and other
expenses 3,836 1,131 8,388 6,266 Depreciation and amortization
7,646 6,970 29,902
23,601
Earnings before interest, taxes, depreciation
and amortization (EBITDA) (6) 33,523 43,864
152,898 143,506 Add back: Restructuring charges 2,042 165 3,438 761
Litigation and other (gains) losses — 575
(590 ) (5,875 )
Adjusted EBITDA
(6) $ 35,565 $ 44,604 $ 155,746 $
138,392
Adjusted EBITDA as a percentage of revenues
(6) 18.4 % 21.1 % 19.2 % 19.2 %
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 Twelve Months Ended December 31,
December 31, 2014 2013 2014
2013 Net income from continuing operations $
12,793 $ 22,119 $ 79,051 $ 66,463
Weighted average shares - diluted 22,548 22,973 22,925
22,777
Diluted earnings per share from continuing operations
$ 0.57 $ 0.96 $ 3.45 $ 2.92 Add back:
Amortization of intangible assets 2,836 2,451 11,101 6,798
Restructuring charges 2,042 165 3,438 761 Litigation and other
(gains) losses — 575
(590
)
(5,875 ) Non-cash interest on convertible notes 1,733 — 2,139 — Tax
effect (2,644 ) (1,276 ) (6,435 ) (674 ) Net tax benefit related to
“check-the-box” election — —
(10,244
)
— Total adjustments, net of tax 3,967
1,915 (591 ) 1,010
Adjusted
net income from continuing operations (6) $ 16,760
$ 24,034 $ 78,460 $ 67,473
Adjusted
diluted earnings per share from continuing operations
(6) $ 0.74 $ 1.05 $ 3.42 $ 2.96
(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 2015 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, 2015 Guidance Range Low
High Projected revenues – GAAP $ 880.0 $ 920.0
Projected net income from continuing operations – GAAP $
61.0 $ 67.5 Add back: Income tax expense 40.5 45.0 Interest
and other expenses 19.0 19.0 Depreciation and amortization
48.5 48.5
Projected earnings before interest,
taxes, depreciation and amortization (EBITDA) (7)
169.0 180.0 Add back: Restructuring charges 4.0
4.0
Projected adjusted EBITDA (7) $ 173.0
$ 184.0
Projected adjusted EBITDA as a percentage of
projected revenues (7) 19.7% 20.0%
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (7)
(In millions) (Unaudited) Year Ending
December 31, 2015 Guidance Range Low
High Projected net income from continuing operations –
GAAP $ 61.0 $ 67.5
Projected diluted
earnings per share from continuing operations – GAAP $ 2.65
$ 2.95 Add back: Amortization of
intangible assets 28.0 28.0 Restructuring charges 4.0 4.0 Non-cash
interest on convertible notes 7.0 7.0 Tax effect (15.5 )
(15.5 ) Total adjustments, net of tax 23.5 23.5
Projected adjusted net income from continuing operations
(7) $ 84.5 $ 91.0
Projected adjusted diluted earnings per
share from continuing operations (7)
$ 3.70 $ 4.00 (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 Contact:Jennifer Frost
Hennagir312-880-3260jfrost-hennagir@huronconsultinggroup.comorInvestor
Contact:C. Mark HusseyorEllen
Wong312-583-8722investor@huronconsultinggroup.com
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