HURN Huron Consulting Group Inc

• Revenues increased 6.0% to $209.9 million for Q3 2015 from $198.0 million in Q3 2014, and were $621.4 million for the first nine months of 2015 compared to $618.2 million for the same period in 2014.
• Operating income increased 73.1% to $36.8 million for Q3 2015 from $21.3 million in Q3 2014, and was $81.7 million for the first nine months of 2015 compared to $97.1 million for the same period in 2014.
• Adjusted EBITDA(6), a non-GAAP measure, increased 76.2% to $50.9 million in Q3 2015 from $28.9 million in Q3 2014, and was $122.7 million for the first nine months of 2015 compared to $120.2 million for the same period in 2014.
• Diluted earnings per share increased 62.3% to $0.86 for Q3 2015 compared to $0.53 in Q3 2014, and was $1.76 for the first nine months of 2015 compared to $2.87 for the first nine months of 2014.
• Adjusted diluted earnings per share(6), a non-GAAP measure, increased 83.9% to $1.14 in Q3 2015 from $0.62 in Q3 2014, and was $2.57 for the first nine months of 2015 compared to $2.68 for the first nine months of 2014.
• Company updates full year 2015 revenue guidance to a range of $835.0 million to $850.0 million.

Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business consulting services, today announced financial results for the third quarter ended September 30, 2015.

“We experienced strong third quarter growth in our Education and Life Sciences and Business Advisory segments," said James H. Roth, chief executive officer and president, Huron Consulting Group. "Within the Healthcare segment, third quarter revenue was lower than expected primarily driven by a large, complex engagement that has progressed differently than expected. Studer Group and our revenue cycle practice continue to meet our expectations. As a result of the evolution of this large, complex project, coupled with a recent decline in our expectations of market demand within our performance improvement practice, we have decreased our full-year guidance."

"We continue to take steps to align our healthcare solutions to respond to ongoing changes in the hospital market and remain confident in our competitive position across all of our businesses as we approach 2016," Roth added.

Third Quarter 2015 Results

Revenues for the third quarter of 2015 were $209.9 million, an increase of 6.0% compared to $198.0 million for the third quarter of 2014. The Company's third quarter 2015 operating income was $36.8 million, an increase of 73.1% compared to $21.3 million in the third quarter of 2014. Net income increased 58.6% to $19.4 million, or $0.86 per diluted share, for the third quarter of 2015 from $12.2 million, or $0.53 per diluted share, for the same period last year.

Third quarter 2015 earnings before interest, taxes, depreciation and amortization ("EBITDA")(6) was $50.6 million, or 24.1% of revenues, compared to $28.8 million, or 14.6% of revenues, in the comparable quarter last year.

In addition to using EBITDA to evaluate the Company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):

  Three Months Ended September 30, 2015   2014 Amortization of intangible assets $ 8,333 $ 2,835 Restructuring charges $ 303 $ 233 Litigation and other (gains) losses $ — $ (150 ) Non-cash interest on convertible notes $ 1,795 $ 406 Tax effect $ (4,110 ) $ (1,330 )

Adjusted EBITDA(6) was $50.9 million, or 24.3% of revenues, in the third quarter of 2015, compared to $28.9 million, or 14.6% of revenues, in the comparable quarter last year. Adjusted net income(6) was $25.7 million, or $1.14 per diluted share, for the third quarter of 2015, compared to $14.2 million, or $0.62 per diluted share, for the comparable period in 2014.

The average number of full-time billable consultants(1) increased 2.6% to 1,875 in the third quarter of 2015 compared to 1,827 in the same quarter last year. Full-time billable consultant utilization rate(2) was 78.4% during the third quarter of 2015 compared to 71.8% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $209 for the third quarter of 2015 compared to $234 for the third quarter of 2014. The average number of full-time equivalent professionals(5) was 1,137 in the third quarter of 2015 compared to 1,127 for the comparable period in 2014.

Year-to-Date 2015 Results

Revenues for the first nine months of 2015 were $621.4 million compared to $618.2 million for the first nine months of 2014. The Company's operating income for the first nine months of 2015 was $81.7 million compared to $97.1 million in the first nine months of 2014. Net income was $39.7 million, or $1.76 per diluted share, for the first nine months of 2015 compared to $66.3 million, or $2.87 per diluted share, for the same period last year.

EBITDA(6) was $119.7 million, or 19.3% of revenues, for the first nine months of 2015, compared to $119.4 million, or 19.3% of revenues, for the same period in 2014.

In addition to using EBITDA to evaluate the Company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):

  Nine Months Ended September 30, 2015   2014 Amortization of intangible assets $ 21,987 $ 8,265 Restructuring charges $ 2,490 $ 1,396 Litigation and other (gains) losses $ 524 $ (590 ) Non-cash interest on convertible notes $ 5,324 $ 406 Tax effect $ (11,948 ) $ (3,791 ) Net tax benefit related to “check-the-box” election $ — $ (10,244 )

Adjusted EBITDA(6) was $122.7 million, or 19.8% of revenues, in the first nine months of 2015 compared to $120.2 million, or 19.4% of revenues, in the comparable period last year. Adjusted net income(6) was $58.1 million, or $2.57 per diluted share, for the first nine months of 2015 compared to $61.7 million, or $2.68 per diluted share, for the comparable period in 2014.

The average number of full-time billable consultants(1) increased 4.2% to 1,850 in the first nine months of 2015 compared to 1,776 in the same period last year. Full-time billable consultant utilization rate(2) was 74.9% during the first nine months of 2015 compared to 74.6% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $222 for the first nine months of 2015 compared to $238 for the same period last year. The average number of full-time equivalent professionals(5) was 1,079 in the first nine months of 2015 compared to 1,264 in the comparable period of 2014.

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 (53%); Huron Education and Life Sciences (20%); Huron Legal (17%); and Huron Business Advisory, which includes EPM & Analytics, (10%). Financial results by segment are included in the attached schedules and in Huron's forthcoming Form 10-Q filing for the quarter ended September 30, 2015.

Acquisitions

On July 1, 2015, Huron completed its acquisition of Rittman Mead Consulting Private Limited ("Rittman Mead India"), the India affiliate of Rittman Mead Consulting Ltd., a data and analytics consulting firm that specializes in the implementation of enterprise performance management and analytics systems. The results of operations of Rittman Mead India are included in the Huron Business Advisory segment.

On October 1, 2015, Huron completed its acquisition of the assets of Cloud62, a Buffalo, New York-based provider of business consulting services specializing in Salesforce.com implementations and related cloud-based applications. The results of operations of Cloud62 will be included in the Huron Business Advisory segment.

Share Repurchase Program

The Company's board of directors authorized an extension through October 31, 2016 of its existing $50 million share repurchase program. There is currently $36.5 million remaining under the share repurchase program. 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 2015(7)

Based on currently available information, the Company updates guidance for full year 2015 revenues before reimbursable expenses to a range of $835.0 million to $850.0 million. The Company also updates its earnings guidance and now expects EBITDA in a range of $165.5 million to $170.5 million, Adjusted EBITDA in a range of $170.0 million to $175.0 million, GAAP diluted earnings per share in a range of $2.50 to $2.60, and non-GAAP Adjusted diluted earnings per share in a range of $3.60 to $3.70.

Management will provide a more detailed discussion of its outlook during the Company’s earnings conference call webcast.

Third Quarter 2015 Webcast

The Company will host a webcast to discuss its financial results today, October 22, 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, and Adjusted diluted earnings per share, which are non-GAAP measures. Management believes that such measures, as supplements to operating income, net income, and diluted earnings per share, 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. 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 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 AND OTHER COMPREHENSIVE INCOME (In thousands, except per share amounts) (Unaudited)     Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2015   2014 2015   2014 Revenues and reimbursable expenses: Revenues $ 209,881 $ 198,049 $ 621,378 $ 618,185 Reimbursable expenses 17,356   18,679   55,900   58,923   Total revenues and reimbursable expenses 227,237 216,728 677,278 677,108 Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): Direct costs 115,587 129,899 366,078 377,798 Amortization of intangible assets and software development costs 4,796 1,227 12,277 3,618 Reimbursable expenses 17,103   18,651   55,826   58,981   Total direct costs and reimbursable expenses 137,486   149,777   434,181   440,397   Operating expenses and other operating (gains) losses: Selling, general and administrative expenses 43,629 39,276 132,627 120,148 Restructuring charges 303 233 2,490 1,396 Litigation and other (gains) losses — (150 ) 524 (590 ) Depreciation and amortization 8,994   6,315   25,771   18,638   Total operating expenses and other operating (gains) losses 52,926   45,674   161,412   139,592   Operating income 36,825 21,277 81,685 97,119 Other income (expense), net: Interest expense, net of interest income (4,642 ) (1,878 ) (13,800 ) (4,843 ) Other income (expense), net (1,379 ) (54 ) (1,939 ) 291   Total other expense, net (6,021 ) (1,932 ) (15,739 ) (4,552 ) Income before income tax expense 30,804 19,345 65,946 92,567 Income tax expense 11,430   7,126   26,237   26,309   Net income $ 19,374   $ 12,219   $ 39,709   $ 66,258   Earnings per share: Basic $ 0.88 $ 0.54 $ 1.79 $ 2.94 Diluted $ 0.86 $ 0.53 $ 1.76 $ 2.87 Weighted average shares used in calculating earnings per share: Basic 22,107 22,488 22,151 22,573 Diluted 22,592 22,975 22,616 23,052 Comprehensive income: Net income $ 19,374 $ 12,219 $ 39,709 $ 66,258 Foreign currency translation loss, net of tax (615 ) (1,127 ) (201 ) (735 ) Unrealized gain on investment, net of tax — 152 4,135 152 Unrealized gain (loss) on cash flow hedging instruments, net of tax (91 ) 304   (252 ) 124   Other comprehensive income (loss) (706 ) (671 ) 3,682   (459 ) Comprehensive income $ 18,668   $ 11,548   $ 43,391   $ 65,799   HURON CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited)     September 30,2015 December 31,2014 Assets Current assets: Cash and cash equivalents $ 13,462 $ 256,872 Receivables from clients, net 123,984 98,640 Unbilled services, net 82,447 91,392 Income tax receivable 4,778 8,125 Deferred income taxes, net 9,228 14,772 Prepaid expenses and other current assets 22,962   16,358   Total current assets 256,861 486,159 Property and equipment, net 47,457 44,677 Long-term investment 34,050 12,250 Other non-current assets 24,525 20,998 Intangible assets, net 102,450 24,684 Goodwill 806,801   567,146   Total assets $ 1,272,144   $ 1,155,914   Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 9,718 $ 11,085 Accrued expenses 25,227 17,315 Accrued payroll and related benefits 62,600 106,488 Current maturities of long-term debt — 28,750 Deferred revenues 22,721   12,738  

Total current liabilities

120,266 176,376 Non-current liabilities: Deferred compensation and other liabilities 16,204 10,838 Long-term debt, net of current portion 419,426 327,852 Deferred lease incentives 14,535 13,359 Deferred income taxes, net 53,842   26,855   Total non-current liabilities 504,007 378,904 Commitments and contingencies Stockholders’ equity Common stock; $0.01 par value; 500,000,000 shares authorized; 25,142,424 and 24,976,395 shares issued at September 30, 2015 and December 31, 2014, respectively 243 241 Treasury stock, at cost, 2,207,972 and 2,097,173 shares at September 30, 2015 and December 31, 2014, respectively (101,239 ) (94,074 ) Additional paid-in capital 453,317 442,308 Retained earnings 294,523 254,814 Accumulated other comprehensive income (loss) 1,027   (2,655 ) Total stockholders’ equity 647,871   600,634   Total liabilities and stockholders’ equity $ 1,272,144   $ 1,155,914   HURON CONSULTING GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)   Nine Months EndedSeptember 30, 2015   2014 Cash flows from operating activities: Net income $ 39,709 $ 66,258 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 38,220 22,636 Share-based compensation 15,288 15,504 Amortization of debt discount and issuance costs 6,985 1,482 Allowances for doubtful accounts and unbilled services (1,605 ) 8,829 Deferred income taxes 13,407 1,817 Changes in operating assets and liabilities, net of acquisitions: (Increase) decrease in receivables from clients (14,725 ) 26,807 (Increase) decrease in unbilled services 15,179 (44,020 ) (Increase) decrease in current income tax receivable / payable, net 3,704 (9,690 ) (Increase) decrease in other assets (5,381 ) 3,258 Increase (decrease) in accounts payable and accrued liabilities 8,459 11,466 Increase (decrease) in accrued payroll and related benefits (43,510 ) (9,565 ) Increase (decrease) in deferred revenues 7,507   (2,661 ) Net cash provided by operating activities 83,237   92,121   Cash flows from investing activities: Purchases of property and equipment, net (15,040 ) (16,683 ) Investment in life insurance policies (4,823 ) (1,151 ) Purchases of businesses (332,766 ) (51,694 ) Purchases of convertible debt investment (15,138 ) (12,500 ) Capitalization of internally developed software costs (735 ) — Proceeds from note receivable —   328   Net cash used in investing activities (368,502 ) (81,700 ) Cash flows from financing activities: Proceeds from exercise of stock options — 848 Shares redeemed for employee tax withholdings (5,194 ) (3,461 ) Tax benefit from share-based compensation 3,117 4,962 Share repurchases (13,498 ) (45,092 ) Proceeds from borrowings under credit facility 272,000 129,000 Repayments on credit facility (214,500 ) (147,750 ) Proceeds from convertible senior notes issuance — 250,000 Proceeds from sale of warrants — 23,625 Payments for convertible senior note hedge — (42,125 ) Payments for debt issue costs — (7,346 ) Payments for capital lease obligations (48 ) (63 ) Deferred payments for purchase of property and equipment — (471 ) Deferred acquisition payment —   (4,745 ) Net cash provided by financing activities 41,877   157,382   Effect of exchange rate changes on cash (22 ) (21 ) Net (decrease) increase in cash and cash equivalents (243,410 ) 167,782 Cash and cash equivalents at beginning of the period 256,872   58,131   Cash and cash equivalents at end of the period $ 13,462   $ 225,913   HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (Unaudited)     Three Months EndedSeptember 30,

PercentIncrease(Decrease)

Segment and Consolidated Operating Results (in thousands): 2015   2014 Huron Healthcare: Revenues $ 112,114 $ 97,812 14.6 % Operating income $ 47,609 $ 27,727 71.7 % Segment operating income as a percentage of segment revenues 42.5 % 28.3 % Huron Education and Life Sciences: Revenues $ 42,056 $ 36,523 15.1 % Operating income $ 10,473 $ 9,459 10.7 % Segment operating income as a percentage of segment revenues 24.9 % 25.9 % Huron Legal: Revenues $ 34,416 $ 46,146 (25.4 )% Operating income $ 9,584 $ 10,949 (12.5 )% Segment operating income as a percentage of segment revenues 27.8 % 23.7 % Huron Business Advisory: Revenues $ 21,249 $ 17,142 24.0 % Operating income $ 5,231 $ 4,397 19.0 % Segment operating income as a percentage of segment revenues 24.6 % 25.7 % All Other: Revenues $ 46 $ 426 (89.2 )% Operating loss $ (132 ) $ (655 ) (79.8 )% Segment operating loss as a percentage of segment revenues N/M N/M Total Company: Revenues $ 209,881 $ 198,049 6.0 % Reimbursable expenses 17,356   18,679   (7.1 )% Total revenues and reimbursable expenses $ 227,237   $ 216,728   4.8 % Statements of Earnings reconciliation: Segment operating income $ 72,765 $ 51,877 40.3 % Items not allocated at the segment level: Other operating expenses and gains 26,946 24,285 11.0 % Depreciation and amortization expense 8,994   6,315   42.4 % Total operating income 36,825 21,277 73.1 % Other expense, net 6,021   1,932   211.6 % Income before income tax expense $ 30,804   $ 19,345   59.2 % Other Operating Data (excluding All Other): Number of full-time billable consultants (at period end) (1): Huron Healthcare 1,084 1,109 (2.3 )% Huron Education and Life Sciences 458 413 10.9 % Huron Legal 89 127 (29.9 )% Huron Business Advisory 279   197   41.6 % Total 1,910 1,846 3.5 % Average number of full-time billable consultants (for the period) (1): Huron Healthcare 1,078 1,114 Huron Education and Life Sciences 444 403 Huron Legal 92 126 Huron Business Advisory 261   184   Total 1,875 1,827 HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited)   Three Months Ended September 30, Other Operating Data (continued): 2015   2014 Full-time billable consultant utilization rate (2): Huron Healthcare 81.1 % 74.0 % Huron Education and Life Sciences 75.2 % 71.3 % Huron Legal 58.1 % 63.5 % Huron Business Advisory 79.4 % 65.4 % Total 78.4 % 71.8 % Full-time billable consultant average billing rate per hour (3): Huron Healthcare $ 204 $ 230 Huron Education and Life Sciences $ 227 $ 225 Huron Legal $ 231 $ 243 Huron Business Advisory (4) $ 196 $ 277 Total $ 209 $ 234 Revenue per full-time billable consultant (in thousands): Huron Healthcare $ 77 $ 81 Huron Education and Life Sciences $ 80 $ 76 Huron Legal $ 60 $ 72 Huron Business Advisory $ 77 $ 88 Total $ 77 $ 80 Average number of full-time equivalents (for the period) (5): Huron Healthcare 196 64 Huron Education and Life Sciences 49 45 Huron Legal 882 1,009 Huron Business Advisory 10   9   Total 1,137 1,127 Revenue per full-time equivalent (in thousands): Huron Healthcare $ 148 $ 115 Huron Education and Life Sciences $ 133 $ 129 Huron Legal $ 33 $ 37 Huron Business Advisory $ 112 $ 106 Total $ 58 $ 45 HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited)     Nine Months EndedSeptember 30,

PercentIncrease(Decrease)

Segment and Consolidated Operating Results (in thousands): 2015   2014 Huron Healthcare: Revenues $ 328,624 $ 306,327 7.3 % Operating income $ 122,120 $ 117,422 4.0 % Segment operating income as a percentage of segment revenues 37.2 % 38.3 % Huron Education and Life Sciences: Revenues $ 124,892 $ 107,846 15.8 % Operating income $ 35,427 $ 27,539 28.6 % Segment operating income as a percentage of segment revenues 28.4 % 25.5 % Huron Legal: Revenues $ 107,469 $ 154,417 (30.4 )% Operating income $ 23,461 $ 39,227 (40.2 )% Segment operating income as a percentage of segment revenues 21.8 % 25.4 % Huron Business Advisory: Revenues $ 59,173 $ 47,098 25.6 % Operating income $ 13,514 $ 12,081 11.9 % Segment operating income as a percentage of segment revenues 22.8 % 25.7 % All Other: Revenues $ 1,220 $ 2,497 (51.1 )% Operating loss $ (1,654 ) $ (1,633 ) 1.3 % Segment operating loss as a percentage of segment revenues N/M N/M Total Company: Revenues $ 621,378 $ 618,185 0.5 % Reimbursable expenses 55,900   58,923   (5.1 )% Total revenues and reimbursable expenses $ 677,278   $ 677,108   — % Statements of Earnings reconciliation: Segment operating income $ 192,868 $ 194,636 (0.9 )% Items not allocated at the segment level: Other operating expenses and gains 85,412 78,879 8.3 % Depreciation and amortization expense 25,771   18,638   38.3 % Total operating income 81,685 97,119 (15.9 )% Other expense, net 15,739   4,552   245.8 % Income before income tax expense $ 65,946   $ 92,567   (28.8 )% Other Operating Data (excluding All Other): Number of full-time billable consultants (at period end) (1): Huron Healthcare 1,084 1,109 (2.3 )% Huron Education and Life Sciences 458 413 10.9 % Huron Legal 89 127 (29.9 )% Huron Business Advisory 279   197   41.6 % Total 1,910 1,846 3.5 % Average number of full-time billable consultants (for the period) (1): Huron Healthcare 1,092 1,057 Huron Education and Life Sciences 431 417 Huron Legal 103 131 Huron Business Advisory 224   171   Total 1,850 1,776 HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited)   Nine Months EndedSeptember 30, Other Operating Data (continued): 2015   2014 Full-time billable consultant utilization rate (2):   Huron Healthcare 76.4 % 78.2 % Huron Education and Life Sciences 75.9 % 70.4 % Huron Legal 54.4 % 65.3 % Huron Business Advisory 75.2 % 69.7 % Total 74.9 % 74.6 % Full-time billable consultant average billing rate per hour (3): Huron Healthcare $ 215 $ 243 Huron Education and Life Sciences $ 230 $ 217 Huron Legal $ 241 $ 242 Huron Business Advisory (4) $ 234 $ 258 Total $ 222 $ 238 Revenue per full-time billable consultant (in thousands): Huron Healthcare $ 230 $ 270 Huron Education and Life Sciences $ 248 $ 216 Huron Legal $ 179 $ 218 Huron Business Advisory $ 254 $ 261 Total $ 234 $ 253 Average number of full-time equivalents (for the period) (5): Huron Healthcare 171 58 Huron Education and Life Sciences 40 43 Huron Legal 860 1,155 Huron Business Advisory 8   8   Total 1,079 1,264 Revenue per full-time equivalent (in thousands): Huron Healthcare $ 449 $ 357 Huron Education and Life Sciences $ 455 $ 413 Huron Legal $ 103 $ 109 Huron Business Advisory $ 301 $ 294 Total $ 173 $ 132           (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) The Huron Business Advisory segment includes the operations of Rittman Mead India. Absent the impact of Rittman Mead India, the average billing rate per hour for Huron Business Advisory for the three and nine months ended September 30, 2015 would have been $245 and $255 per hour, respectively. (5) Consists of consultants who work variable schedules as needed by our clients, as well as other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. Also includes our cultural transformation consultants from the Studer Group acquisition, which include coaches and their support staff, and full-time employees who provide software support and maintenance services to our clients. N/M- Not meaningful HURON CONSULTING GROUP INC. RECONCILIATION OF NET INCOME TO

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6)

(In thousands) (Unaudited)   Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015   2014 Revenues $ 209,881   $ 198,049   $ 621,378   $ 618,185   Net income $ 19,374 $ 12,219 $ 39,709 $ 66,258 Add back: Income tax expense 11,430 7,126 26,237 26,309 Interest and other expenses 6,021 1,932 15,739 4,552 Depreciation and amortization 13,790   7,542   38,048   22,256   Earnings before interest, taxes, depreciation and amortization (EBITDA) (6) 50,615 28,819 119,733 119,375 Add back: Restructuring charges 303 233 2,490 1,396 Litigation and other (gains) losses —   (150 ) 524   (590 ) Adjusted EBITDA (6) $ 50,918   $ 28,902   $ 122,747   $ 120,181   Adjusted EBITDA as a percentage of revenues (6) 24.3 % 14.6 % 19.8 % 19.4 %  

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (6)

(In thousands) (Unaudited)   Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Net income $ 19,374   $ 12,219   $ 39,709   $ 66,258   Weighted average shares – diluted 22,592 22,975 22,616 23,052 Diluted earnings per share $ 0.86   $ 0.53   $ 1.76   $ 2.87   Add back: Amortization of intangible assets 8,333 2,835 21,987 8,265 Restructuring charges 303 233 2,490 1,396 Litigation and other (gains) losses — (150 ) 524 (590 ) Non-cash interest on convertible notes 1,795 406 5,324 406 Tax effect (4,110 ) (1,330 ) (11,948 ) (3,791 ) Net tax benefit related to “check-the-box” election —   —   —   (10,244 ) Total adjustments, net of tax 6,321   1,994   18,377   (4,558 ) Adjusted net income (6) $ 25,695   $ 14,213   $ 58,086   $ 61,700   Adjusted diluted earnings per share (6) $ 1.14   $ 0.62   $ 2.57   $ 2.68  

 

        (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, and Adjusted diluted earnings per share, 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 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 $ 835.0   $ 850.0   Projected net income - GAAP $ 56.5 $ 59.5 Add back: Income tax expense 37.7 39.7 Interest and other expenses 19.8 19.8 Depreciation and amortization 51.5   51.5   Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (7) 165.5 170.5 Add back: Restructuring charges 4.0 4.0 Litigation and other (gains) losses 0.5   0.5   Projected adjusted EBITDA (7) $ 170.0   $ 175.0   Projected adjusted EBITDA as a percentage of projected revenues (7) 20.4 % 20.6 %  

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (7)

(In millions)

(Unaudited)

  Year Ending December 31, 2015 Guidance Range Low High Projected net income - GAAP $ 56.5   $ 59.5   Projected diluted earnings per share - GAAP $ 2.50   $ 2.60   Add back: Amortization of intangible assets 30.0 30.0 Restructuring charges 4.0 4.0 Litigation and other (gains) losses 0.5 0.5 Non-cash interest on convertible notes 7.0 7.0 Tax effect (17.0 ) (17.0 ) Total adjustments, net of tax 24.5 24.5 Projected adjusted net income (7) $ 81.0   $ 84.0   Projected adjusted diluted earnings per share (7) $ 3.60   $ 3.70             (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, and Projected adjusted diluted earnings per share, which are non-GAAP measures. Management believes that the use of such measures, as supplements to Projected net income and Projected diluted earnings per share, 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.

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Huron Consulting Group Inc.Media Contact:Jenna Nichols, 312-880-5693jnichols@huronconsultinggroup.comorInvestor Contact:C. Mark Hussey or John Kelly, 312-583-8722investor@huronconsultinggroup.com