- Revenues were $184.3 million in Q2 2016
compared to $184.0 million in Q2 2015, and increased 7.8% to $364.7
million for the first six months of 2016 compared to $338.4 million
for the same period in 2015.
- Net income from continuing operations
increased 14.1% to $16.1 million in Q2 2016 from $14.1
million in Q2 2015, and increased 52.2% to $23.0 million for
the first six months of 2016 compared to $15.1 million for the same
period in 2015.
- Adjusted EBITDA(6), a non-GAAP measure,
was $41.4 million in Q2 2016 compared to $41.5 million in Q2 2015,
and increased 17.8% to $67.9 million for the first six months of
2016 compared to $57.6 million for the same period in 2015.
- Diluted earnings per share from
continuing operations increased to $0.76 in Q2 2016 from $0.62 in
Q2 2015, and was $1.07 for the first six months of 2016 compared to
$0.67 for the first six months of 2015.
- Adjusted diluted earnings per share
from continuing operations(6), a non-GAAP measure, increased to
$1.09 in Q2 2016 from $0.93 in Q2 2015, and was $1.71 for the first
six months of 2016 compared to $1.15 for the first six months of
2015.
- Company updates full year 2016 revenue
guidance to a range of $755.0 million to $775.0 million.
Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider
of business consulting services, today announced financial results
from continuing operations for the second quarter ended
June 30, 2016.
"The Education and Life Sciences and Business Advisory segments
performed well amidst continuing market pressures in the businesses
and industries we serve," said James H. Roth, chief executive
officer and president, Huron Consulting Group. "Consistent
with recent quarters, we experienced softness in our Healthcare
segment. The ongoing evolution of the healthcare industry is
changing traditional patterns of demand, and we will continue to
modify our go-to-market approach to address those changes to
promote future growth in this segment."
Second Quarter 2016 Results from Continuing
Operations
Revenues for the second quarter of 2016 were $184.3 million
compared to $184.0 million for the second quarter of 2015. Net
income from continuing operations increased 14.1% to $16.1 million,
or $0.76 per diluted share, for the second quarter of 2016 from
$14.1 million, or $0.62 per diluted share, for the same period last
year.
Second quarter 2016 earnings before interest, taxes,
depreciation and amortization ("EBITDA")(6) was $39.6 million, or
21.5% of revenues, compared to $40.2 million, or 21.8% 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 EndedJune 30, 2016
2015 Amortization of intangible assets $ 8,153 $ 8,141
Restructuring charges $ 1,747 $ 601 Other loss $ — $ 750 Non-cash
interest on convertible notes $ 1,861 $ 1,775 Tax effect $ (4,622 )
$ (4,439 )
Adjusted EBITDA(6) was $41.4 million, or 22.4% of revenues, in
the second quarter of 2016, compared to $41.5 million, or 22.6% of
revenues, in the comparable quarter last year. Adjusted net income
from continuing operations(6) increased 11.0% to $23.3 million, or
$1.09 per diluted share, for the second quarter of 2016 from $21.0
million, or $0.93 per diluted share, for the comparable period in
2015.
The average number of full-time billable consultants(1)
increased 10.2% to 1,898 in the second quarter of 2016 compared to
1,723 in the same quarter last year. Full-time billable consultant
utilization rate(2) was 75.6% during the second quarter of 2016
compared to 75.8% during the same period last year. Average billing
rate per hour for full-time billable consultants(3) was $216 for
the second quarter of 2016 compared to $239 for the second quarter
of 2015. The average number of full-time equivalent
professionals(5) was 255 in the second quarter of 2016 compared to
229 for the comparable period in 2015.
Year-to-Date 2016 Results from Continuing Operations
Revenues for the first six months of 2016 increased 7.8% to
$364.7 million compared to $338.4 million for the first six months
of 2015. Net income from continuing operations increased 52.2% to
$23.0 million, or $1.07 per diluted share, for the first six months
of 2016 compared to $15.1 million, or $0.67 per diluted share, for
the same period last year.
EBITDA(6) increased 16.0% to $64.8 million, or 17.8% of
revenues, for the first six months of 2016, compared to $55.8
million, or 16.5% of revenues, for the same period in 2015.
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):
Six Months EndedJune 30, 2016
2015 Amortization of intangible assets $ 15,598 $ 12,772
Restructuring charges $ 3,080 $ 1,257 Other loss, net $ — $ 524
Non-cash interest on convertible notes $ 3,699 $ 3,529 Tax effect $
(8,794 ) $ (7,124 )
Adjusted EBITDA(6) increased 17.8% to $67.9 million, or 18.6% of
revenues, in the first six months of 2016 compared to $57.6
million, or 17.0% of revenues, in the comparable period last year.
Adjusted net income from continuing operations(6) increased 40.3%
to $36.6 million, or $1.71 per diluted share, for the first six
months of 2016 compared to $26.1 million, or $1.15 per diluted
share, for the comparable period in 2015.
The average number of full-time billable consultants(1)
increased 7.7% to 1,863 in the first six months of 2016 compared to
1,730 in the same period last year. Full-time billable consultant
utilization rate(2) was 76.1% during the first six months of 2016
compared to 74.4% during the same period last year. Average billing
rate per hour for full-time billable consultants(3) was $215 for
the first six months of 2016 compared to $228 for the first six
months of 2015. The average number of full-time equivalent
professionals(5) was 250 in the first six months of 2016 compared
to 200 for the comparable period in 2015.
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 2016 revenues by operating segment as
a percentage of total Company revenues are as follows: Huron
Healthcare (60%); Huron Education and Life Sciences (25%); and
Huron Business Advisory (15%). Financial results by segment are
included in the attached schedules and in Huron's forthcoming
Quarterly Report on Form 10-Q filing for the quarter ended
June 30, 2016.
Acquisitions
On May 1, 2016, Huron completed its acquisition of the U.S.
assets of ADI Strategies, Inc. ("ADI Strategies"), a leading
enterprise performance management, risk management, and business
intelligence firm focused on implementing the Oracle enterprise
application suite. The results of operations of ADI Strategies are
included within the Huron Business Advisory segment from the date
of acquisition. The Company is also in the process of acquiring the
international assets of ADI Strategies in Dubai and India, for
which an agreement is expected to be signed in the third quarter of
2016.
On July 25, 2016, Huron entered into an agreement to acquire
Healthcare Services Management, Inc. ("HSM Consulting"), a firm
specializing in healthcare information technology and management
consulting. The results of operations of HSM Consulting will be
included within the Huron Healthcare segment from the close date,
which the Company anticipates will be in the third quarter of
2016.
Outlook for 2016(7)
Based on currently available information, the Company updates
guidance, which includes the recent acquisition of ADI Strategies
and the pending acquisition of HSM Consulting, for full year 2016
revenues before reimbursable expenses to a range of $755.0 million
to $775.0 million. The Company also updates its earnings guidance
and now expects net income from continuing operations in a range of
$47.0 million to $50.0 million, EBITDA in a range of $140.5 million
to $146.5 million, and adjusted EBITDA in a range of $143.5 million
to $149.5 million. GAAP diluted earnings per share from continuing
operations is expected in a range of $2.20 to $2.35, and non-GAAP
adjusted diluted earnings per share from continuing operations is
expected in a range of $3.35 to $3.50.
Management will provide a more detailed discussion of its
outlook during the Company’s earnings conference call webcast.
Second Quarter 2016 Webcast
The Company will host a webcast to discuss its financial results
today, July 26, 2016, 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. 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.
About Huron Consulting Group
Huron is a global professional services firm focused on
assisting clients with their most complex business issues by
delivering high-value, quality solutions to support their long-term
strategic objectives. Huron specializes in serving clients in the
healthcare, higher education, life sciences, and commercial sectors
as these organizations face significant transformational change and
regulatory or economic pressures in dynamic market environments.
With its deep industry and technical expertise, Huron provides
advisory, consulting, technology, and analytic solutions to deliver
sustainable and measurable results. 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,” “continues,” or
"outlook" or similar expressions. 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; failure to consummate our pending acquisition of HSM
Consulting; 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, 2015, 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 Ended Six Months Ended
June 30, June 30, 2016 2015
2016 2015 Revenues and reimbursable
expenses: Revenues $ 184,259 $ 184,019 $ 364,748 $ 338,445
Reimbursable expenses 18,982 20,867 35,543
37,175 Total revenues and reimbursable expenses 203,241
204,886 400,291 375,620
Direct costs and reimbursable
expenses (exclusive of depreciation and amortization shown in
operating expenses): Direct costs 103,099 101,233 214,956 202,627
Amortization of intangible assets and software development costs
3,840 4,910 7,226 7,364 Reimbursable expenses 19,164 20,950
35,791 37,357 Total direct costs and
reimbursable expenses 126,103 127,093 257,973
247,348
Operating expenses and other loss, net:
Selling, general and administrative expenses 39,624 41,186 81,681
78,010 Restructuring charges 1,747 601 3,080 1,257 Other loss, net
— 750 — 524 Depreciation and amortization 7,558 6,459
14,972 11,748 Total operating expenses and other
loss, net 48,929 48,996 99,733 91,539
Operating income 28,209 28,797 42,585 36,733
Other income
(expense), net: Interest expense, net of interest income (4,123
) (4,763 ) (8,094 ) (9,156 ) Other income (expense), net 276
101 747 (582 ) Total other expense, net (3,847 )
(4,662 ) (7,347 ) (9,738 ) Income from continuing operations before
income tax expense 24,362 24,135 35,238 26,995 Income tax expense
8,223 9,987 12,233 11,879 Net income
from continuing operations 16,139 14,148 23,005 15,116 Income
(loss) from discontinued operations, net of tax (970 ) 4,685
(1,834 ) 5,219 Net income $ 15,169 $ 18,833 $
21,171 $ 20,335 Net earnings per basic share: Net
income from continuing operations $ 0.77 $ 0.64 $ 1.09 $ 0.68
Income (loss) from discontinued operations, net of tax (0.05 ) 0.21
(0.09 ) 0.24 Net income $ 0.72 $ 0.85 $
1.00 $ 0.92 Net earnings per diluted share: Net
income from continuing operations $ 0.76 $ 0.62 $ 1.07 $ 0.67
Income (loss) from discontinued operations, net of tax (0.05 ) 0.21
(0.08 ) 0.23 Net income $ 0.71 $ 0.83 $
0.99 $ 0.90 Weighted average shares used in
calculating earnings per share: Basic 21,061 22,220 21,088 22,174
Diluted 21,376 22,654 21,418 22,628
Comprehensive income:
Net income $ 15,169 $ 18,833 $ 21,171 $ 20,335 Foreign currency
translation gain (loss), net of tax (19 ) 850 2 414 Unrealized gain
(loss) on investment, net of tax (597 ) 4,185 875 4,135 Unrealized
gain (loss) on cash flow hedging instruments, net of tax (34 ) 48
(148 ) (161 ) Other comprehensive income (loss) (650 ) 5,083
729 4,388 Comprehensive income $ 14,519
$ 23,916 $ 21,900 $ 24,723
HURON
CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In
thousands, except share and per share amounts)
(Unaudited) June 30, December
31, 2016 2015 Assets Current assets: Cash
and cash equivalents $ 6,700 $ 58,437 Receivables from clients, net
72,320 85,297 Unbilled services, net 78,220 56,527 Income tax
receivable — 406 Prepaid expenses and other current assets 15,955
27,720 Total current assets 173,195 228,387 Property
and equipment, net 29,482 28,888 Long-term investment 36,261 34,831
Other non-current assets 22,867 21,045 Intangible assets, net
93,398 94,992 Goodwill 787,354 751,400 Total assets $
1,142,557 $ 1,159,543
Liabilities and
stockholders’ equity Current liabilities: Accounts payable $
5,537 $ 7,220 Accrued expenses 23,353 24,276 Accrued payroll and
related benefits 52,565 80,839 Deferred revenues 21,290
19,086 Total current liabilities 102,745 131,421 Non-current
liabilities: Deferred compensation and other liabilities 29,736
23,768 Long-term debt 334,674 307,376 Deferred lease incentives
9,619 9,965 Deferred income taxes, net 39,830 34,688
Total non-current liabilities 413,859 375,797
Commitments and
contingencies Stockholders’ equity Common stock; $0.01
par value; 500,000,000 shares authorized; 24,102,337 and 24,775,823
shares issued at June 30, 2016 and December 31, 2015, respectively
234 241 Treasury stock, at cost, 2,353,880 and 2,249,630 shares at
June 30, 2016 and December 31, 2015, respectively (109,768 )
(103,734 ) Additional paid-in capital 396,136 438,367 Retained
earnings 335,037 313,866 Accumulated other comprehensive income
4,314 3,585 Total stockholders’ equity 625,953
652,325 Total liabilities and stockholders’ equity $
1,142,557 $ 1,159,543
HURON CONSULTING
GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands) (Unaudited) Six Months
EndedJune 30, 2016 2015 Cash
flows from operating activities: Net income $ 21,171 $ 20,335
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 22,201 24,431
Share-based compensation 9,787 11,776 Amortization of debt discount
and issuance costs 4,757 4,663 Allowances for doubtful accounts and
unbilled services 5,877 (1,034 ) Deferred income taxes 4,019 3,191
Changes in operating assets and liabilities, net of acquisitions:
(Increase) decrease in receivables from clients 19,818 (7,550 )
(Increase) decrease in unbilled services (26,552 ) (824 )
(Increase) decrease in current income tax receivable / payable, net
(570 ) 3,106 (Increase) decrease in other assets 10,424 (4,125 )
Increase (decrease) in accounts payable and accrued liabilities
(4,594 ) 2,863 Increase (decrease) in accrued payroll and related
benefits (26,978 ) (47,114 ) Increase (decrease) in deferred
revenues 1,187 8,613 Net cash provided by operating
activities 40,547 18,331
Cash flows from investing
activities: Purchases of property and equipment, net (5,376 )
(9,869 ) Investment in life insurance policies (1,699 ) (5,127 )
Purchases of businesses, net of cash acquired (49,071 ) (331,990 )
Purchase of convertible debt investment — (3,138 ) Capitalization
of internally developed software costs (536 ) (398 ) Net cash used
in investing activities (56,682 ) (350,522 )
Cash flows from
financing activities: Proceeds from exercise of stock options
123 — Shares redeemed for employee tax withholdings (4,445 ) (4,650
) Tax benefit from share-based compensation 860 2,823 Share
repurchases (55,265 ) (13,498 ) Proceeds from borrowings under
credit facility 116,000 256,500 Repayments on credit facility
(93,000 ) (149,000 ) Payments for capital lease obligations —
(34 ) Net cash provided by (used in) financing activities
(35,727 ) 92,141 Effect of exchange rate changes on cash 125
6 Net decrease in cash and cash equivalents (51,737 ) (240,044 )
Cash and cash equivalents at beginning of the period 58,437
256,872 Cash and cash equivalents at end of the period $
6,700 $ 16,828
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):
2016 2015 Huron Healthcare: Revenues $
106,088 $ 118,506 (10.5 )% Operating income $ 41,399 $ 45,531 (9.1
)% Segment operating income as a percentage of segment revenues
39.0 % 38.4 %
Huron Education and Life Sciences: Revenues $
45,116 $ 42,939 5.1 % Operating income $ 13,075 $ 13,174 (0.8 )%
Segment operating income as a percentage of segment revenues 29.0 %
30.7 %
Huron Business Advisory: Revenues $ 33,055 $ 22,186
49.0 % Operating income $ 9,263 $ 6,684 38.6 % Segment operating
income as a percentage of segment revenues 28.0 % 30.1 %
All
Other: Revenues $ — $ 388 (100.0 )% Operating loss $ — $ (530 )
(100.0 )% Segment operating loss as a percentage of segment
revenues N/M N/M
Total Company: Revenues $ 184,259 $ 184,019
0.1 % Reimbursable expenses 18,982 20,867 (9.0 )%
Total revenues and reimbursable expenses $ 203,241 $
204,886 (0.8 )%
Statements of Earnings
reconciliation: Segment operating income $ 63,737 $ 64,859 (1.7
)% Items not allocated at the segment level: Other operating
expenses and loss, net 27,970 29,603 (5.5 )% Depreciation and
amortization expense 7,558 6,459 17.0 % Total
operating income 28,209 28,797 (2.0 )% Other expense, net 3,847
4,662 (17.5 )%
Income from continuing operations
before income tax expense $ 24,362 $ 24,135 0.9 %
Other Operating Data (excluding All Other): Number of
full-time billable consultants (at period end)
(1): Huron Healthcare 952 1,087 (12.4 )% Huron
Education and Life Sciences 507 428 18.5 % Huron Business Advisory
437 204 114.2 % Total 1,896 1,719 10.3 %
Average
number of full-time billable consultants (for the period)
(1): Huron Healthcare 1,005 1,090 Huron Education and
Life Sciences 500 427 Huron Business Advisory 393 206
Total 1,898 1,723
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(CONTINUED) (Unaudited)
Three Months Ended June
30,
Other Operating Data (continued): 2016
2015 Full-time billable consultant utilization rate
(2): Huron Healthcare 78.1 % 75.8 % Huron Education
and Life Sciences 71.3 % 76.0 % Huron Business Advisory 74.8 % 75.1
% Total 75.6 % 75.8 %
Full-time billable consultant average
billing rate per hour (3): Huron Healthcare $ 211
$ 230 Huron Education and Life Sciences $ 229 $ 237 Huron Business
Advisory (4) $ 217 $ 292 Total $ 216 $ 239
Revenue per full-time
billable consultant (in thousands): Huron Healthcare $ 76 $ 82
Huron Education and Life Sciences $ 79 $ 86 Huron Business Advisory
$ 80 $ 104 Total $ 78 $ 86
Average number of full-time
equivalents (for the period) (5): Huron
Healthcare 198 188 Huron Education and Life Sciences 38 33 Huron
Business Advisory 19 8 Total 255 229
Revenue per
full-time equivalent (in thousands): Huron Healthcare $ 148 $
156 Huron Education and Life Sciences $ 148 $ 183 Huron Business
Advisory $ 92 $ 95 Total $ 144 $ 158
HURON CONSULTING
GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING
DATA (CONTINUED) (Unaudited) Six Months
Ended
June 30,
Percent
Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2016 2015 Huron Healthcare: Revenues $
220,106 $ 216,510 1.7 % Operating income $ 80,405 $ 74,511 7.9 %
Segment operating income as a percentage of segment revenues 36.5 %
34.4 %
Huron Education and Life Sciences: Revenues $ 88,354
$ 82,836 6.7 % Operating income $ 23,283 $ 24,954 (6.7 )% Segment
operating income as a percentage of segment revenues 26.4 % 30.1 %
Huron Business Advisory: Revenues $ 56,288 $ 37,924 48.4 %
Operating income $ 11,962 $ 8,283 44.4 % Segment operating income
as a percentage of segment revenues 21.3 % 21.8 %
All Other:
Revenues $ — $ 1,175 (100.0 )% Operating loss $ — $ (1,522 ) (100.0
)% Segment operating loss as a percentage of segment revenues N/M
N/M
Total Company: Revenues $ 364,748 $ 338,445 7.8 %
Reimbursable expenses 35,543 37,175 (4.4 )%
Total
revenues and reimbursable expenses $ 400,291 $ 375,620
6.6 %
Statements of Earnings reconciliation: Segment
operating income $ 115,650 $ 106,226 8.9 % Items not allocated at
the segment level: Other operating expenses and loss, net 58,093
57,745 0.6 % Depreciation and amortization expense 14,972
11,748 27.4 % Total operating income 42,585 36,733 15.9 %
Other expense, net 7,347 9,738 (24.6 )%
Income
from continuing operations before income tax expense $ 35,238
$ 26,995 30.5 %
Other Operating Data (excluding
All Other): Number of full-time billable consultants (at
period end) (1): Huron Healthcare 952 1,087 (12.4
)% Huron Education and Life Sciences 507 428 18.5 % Huron Business
Advisory 437 204 114.2 % Total 1,896 1,719 10.3 %
Average number of full-time billable consultants (for the
period) (1): Huron Healthcare 1,015 1,099 Huron
Education and Life Sciences 494 425 Huron Business Advisory 354
206 Total 1,863 1,730
HURON CONSULTING
GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING
DATA (CONTINUED) (Unaudited)
Six Months Ended June
30,
Other Operating Data (continued): 2016
2015 Full-time billable consultant utilization rate
(2): Huron Healthcare 79.3 % 74.1 % Huron Education
and Life Sciences 71.4 % 76.2 % Huron Business Advisory 73.5 % 72.4
% Total 76.1 % 74.4 %
Full-time billable consultant average
billing rate per hour (3): Huron Healthcare $ 212
$ 221 Huron Education and Life Sciences $ 228 $ 231 Huron Business
Advisory (4) $ 209 $ 261 Total $ 215 $ 228
Revenue per full-time
billable consultant (in thousands): Huron Healthcare $ 158 $
153 Huron Education and Life Sciences $ 158 $ 168 Huron Business
Advisory $ 152 $ 179 Total $ 157 $ 160
Average number of
full-time equivalents (for the period) (5): Huron
Healthcare 199 159 Huron Education and Life Sciences 38 35 Huron
Business Advisory 13 6 Total 250 200
Revenue per
full-time equivalent (in thousands): Huron Healthcare $ 299 $
302 Huron Education and Life Sciences $ 271 $ 330 Huron Business
Advisory $ 203 $ 184 Total $ 290 $ 303
____________
(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 our India EPM&A practice,
formerly known as Rittman Mead Consulting Private Limited, a
business that we acquired in July 2015. Absent the impact of our
India EPM&A practice, the average billing rate per hour for
Huron Business Advisory for the three and six months ended June 30,
2016 would have been $254 and $243, respectively. (5) Consists of
cultural transformation consultants within our Studer Group
solution, which include coaches and their support staff,
consultants who work variable schedules as needed by our clients,
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
FROM CONTINUING OPERATIONS
TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION AND AMORTIZATION (6)
(In thousands) (Unaudited) Three
Months EndedJune 30, Six Months
EndedJune 30, 2016 2015 2016
2015 Revenues $ 184,259 $ 184,019
$ 364,748 $ 338,445 Net income from continuing
operations $ 16,139 $ 14,148 $ 23,005 $ 15,116 Add back: Income tax
expense 8,223 9,987 12,233 11,879 Interest and other expenses 3,847
4,662 7,347 9,738 Depreciation and amortization 11,398
11,369 22,198 19,112
Earnings before
interest, taxes, depreciation and amortization (EBITDA)
(6) 39,607 40,166 64,783 55,845 Add back: Restructuring
charges 1,747 601 3,080 1,257 Other loss, net — 750 —
524
Adjusted EBITDA (6) $ 41,354
$ 41,517 $ 67,863 $ 57,626
Adjusted EBITDA
as a percentage of revenues (6) 22.4 % 22.6 % 18.6 %
17.0 %
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, 2016 2015 2016
2015 Net income from continuing operations $
16,139 $ 14,148 $ 23,005 $ 15,116
Weighted average shares – diluted 21,376 22,654 21,418
22,628
Diluted earnings per share from continuing operations
$ 0.76 $ 0.62 $ 1.07 $ 0.67 Add back:
Amortization of intangible assets 8,153 8,141 15,598 12,772
Restructuring charges 1,747 601 3,080 1,257 Other loss, net — 750 —
524 Non-cash interest on convertible notes 1,861 1,775 3,699 3,529
Tax effect (4,622 ) (4,439 ) (8,794 ) (7,124 ) Total adjustments,
net of tax 7,139 6,828 13,583 10,958
Adjusted net income from continuing operations (6) $
23,278 $ 20,976 $ 36,588 $ 26,074
Adjusted diluted earnings per share from continuing
operations(6) $ 1.09 $ 0.93 $ 1.71
$ 1.15
____________
(6) In evaluating the Company’s financial performance and
outlook, 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 2016
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, 2016 Guidance Range
Low High Projected revenues - GAAP $
755.0 $ 775.0
Projected net income from continuing
operations - GAAP $ 47.0 $ 50.0 Add back: Income tax expense
29.0 32.0 Interest and other expenses 17.5 17.5 Depreciation and
amortization 47.0 47.0
Projected earnings before
interest, taxes, depreciation and amortization (EBITDA)
(7) 140.5 146.5 Add back: Restructuring charges 3.0
3.0
Projected adjusted EBITDA (7) $ 143.5
$ 149.5
Projected adjusted EBITDA as a percentage
of projected revenues (7) 19.0 % 19.3 %
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (7)
(In millions) (Unaudited) Year
Ending December 31, 2016 Guidance Range
Low High Projected net income from
continuing operations - GAAP $ 47.0 $ 50.0
Projected diluted earnings per share from continuing operations
- GAAP $ 2.20 $ 2.35 Add back: Amortization of
intangible assets 32.5 32.5 Restructuring charges 3.0 3.0 Non-cash
interest on convertible notes 7.5 7.5 Tax effect (17.5 ) (17.5 )
Total adjustments, net of tax 25.5 25.5
Projected adjusted net
income from continuing operations (7) $ 72.5 $
75.5
Projected adjusted diluted earnings per share from
continuing operations (7) $ 3.35 $ 3.50
____________
(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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726006437/en/
Huron Consulting Group Inc.Media Contact:Jenna
Nichols312-880-5693jnichols@huronconsultinggroup.comorInvestor
Contact:C. Mark HusseyorJohn
Kelly312-583-8722investor@huronconsultinggroup.com
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