Fourth Quarter 2016 Highlights
- Revenues were $178.1 million in Q4 2016
compared to $185.1 million in Q4 2015.
- Net income from continuing operations
was $4.2 million in Q4 2016 compared to $32.5 million in Q4
2015.
- Adjusted EBITDA(6), a non-GAAP measure,
was $23.7 million in Q4 2016 compared to $40.0 million in Q4
2015.
- Diluted earnings per share from
continuing operations was $0.19 in Q4 2016 compared to $1.44 in Q4
2015.
- Adjusted diluted earnings per share
from continuing operations(6), a non-GAAP measure, was $0.58 in Q4
2016 compared to $0.94 in Q4 2015.
Full Year 2016 Highlights and 2017 Guidance
- Revenues for full year 2016 increased
3.9% to $726.3 million compared to $699.0 million for full year
2015.
- Net income from continuing operations
for full year 2016 was $39.5 million compared to $61.9 million for
full year 2015.
- Adjusted EBITDA(6) for full year 2016
was $128.5 million compared to $139.3 million for full year
2015.
- Diluted earnings per share from
continuing operations for full year 2016 was $1.84 compared to
$2.74 for full year 2015.
- Adjusted diluted earnings per share
from continuing operations(6) for full year 2016 increased 7.4% to
$3.21 compared to $2.99 for full year 2015.
- Huron affirms its previous earnings
guidance range for full year 2017, including revenue expectations
in a range of $750.0 million to $790.0 million.
Global professional services firm Huron (NASDAQ: HURN) today
announced financial results from continuing operations for the
fourth quarter and full year ended Dec. 31, 2016.
"Our fourth quarter results were disappointing primarily due to
continued challenges in our Healthcare segment. While we
believe there may be some positive market indications, we continue
to expect ongoing softness in the Healthcare business until some of
the current uncertainties in the provider market subside," said
James H. Roth, chief executive officer and president of
Huron. "While we continue to remain cautious about growth in
our Healthcare segment, we anticipate solid revenue growth in our
Education and Life Sciences and Business Advisory segments in
2017."
FOURTH QUARTER 2016 RESULTS FROM CONTINUING
OPERATIONS
Revenues for the fourth quarter of 2016 were $178.1 million
compared to $185.1 million for the fourth quarter of 2015. Fourth
quarter 2016 revenues included $14.5 million from the acquisitions
of MyRounding Solutions, LLC, ADI Strategies, Inc., and Healthcare
Services Management, Inc., all of which were completed during 2016.
Net income from continuing operations was $4.2 million, or $0.19
per diluted share, for the fourth quarter of 2016 compared to $32.5
million, or $1.44 per diluted share, for the same period last
year.
Fourth quarter 2016 earnings before interest, taxes,
depreciation and amortization ("EBITDA")(6) was $20.7 million, or
11.6% of revenues, compared to $48.2 million, or 26.1% 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 EndedDecember 31, 2016
2015 Amortization of intangible assets $ 8,739 $
8,011 Restructuring charges $ 5,463 $ 1,752 Other gains $ (2,484 )
$ (10,000 ) Non-cash interest on convertible notes $ 1,906 $ 1,817
Tax effect $ (5,354 ) $ (623 ) Net tax benefit related to
"check-the-box" election $ — $ (12,336 )
Adjusted EBITDA(6) was $23.7 million, or 13.3% of revenues, in
the fourth quarter of 2016, compared to $40.0 million, or 21.6% of
revenues, in the comparable quarter last year. Adjusted net income
from continuing operations(6) was $12.5 million, or $0.58 per
diluted share, for the fourth quarter of 2016, compared to $21.1
million, or $0.94 per diluted share, for the comparable period in
2015.
The average number of full-time billable consultants(1)
increased 8.6% to 1,998 in the fourth quarter of 2016 compared to
1,839 in the same quarter last year. Full-time billable consultant
utilization rate(2) was 72.2% during the fourth quarter of 2016
compared to 79.2% during the same period last year. Average billing
rate per hour for full-time billable consultants(3) was $209 for
the fourth quarter of 2016 compared to $224 for the fourth quarter
of 2015. The average number of full-time equivalent
professionals(5) was 277 in the fourth quarter of 2016 compared to
259 for the comparable period in 2015.
YEAR-TO-DATE 2016 RESULTS FROM CONTINUING OPERATIONS
Revenues for the full year 2016 increased 3.9% to $726.3 million
from $699.0 million for the full year 2015. 2016 revenues included
$34.5 million of revenues from the acquisitions of MyRounding
Solutions, LLC, ADI Strategies, Inc., and Healthcare Services
Management, Inc., all of which were completed in 2016, and $19.3
million of incremental revenues due to the full year impact in 2016
of the acquisitions of Studer Holdings, Inc., which was completed
mid-first quarter 2015, Rittman Mead Consulting Private Limited,
which was completed at the beginning of the third quarter of 2015,
and Cloud62, Inc., which was completed at the beginning of the
fourth quarter of 2015. Net income from continuing operations for
the full year 2016 was $39.5 million, or $1.84 per diluted share,
compared to $61.9 million, or $2.74 per diluted share, for the full
year 2015.
EBITDA(6) was $120.9 million, or 16.6% of revenues, for the full
year 2016, compared to $145.4 million, or 20.8% of revenues, for
the full year 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):
Twelve Months EndedDecember 31, 2016
2015 Amortization of intangible assets $ 33,108 $
28,696 Restructuring charges $ 9,592 $ 3,329 Other gains, net $
(1,990 ) $ (9,476 ) Non-cash interest on convertible notes $ 7,488
$ 7,141 Tax effect $ (18,942 ) $ (11,698 ) Net tax benefit related
to "check-the-box" election $ — $ (12,336 )
Adjusted EBITDA(6) was $128.5 million, or 17.7% of revenues, for
the full year 2016 compared to $139.3 million, or 19.9% of
revenues, for the full year 2015. Adjusted net income from
continuing operations(6) was $68.7 million, or $3.21 per diluted
share, for the full year 2016 compared to $67.6 million, or $2.99
per diluted share, for the full year 2015.
The average number of full-time billable consultants(1)
increased 8.5% to 1,921 for the full year 2016 compared to 1,770
for the full year 2015. Full-time billable consultant utilization
rate(2) was 74.6% during the full year 2016 compared to 76.9%
during the full year 2015. Average billing rate per hour for
full-time billable consultants(3) was $212 for the full year 2016
compared to $222 for the full year 2015. The average number of
full-time equivalent professionals(5) was 261 for the full year
2016 compared to 230 for the full year 2015.
OPERATING SEGMENTS
Huron’s results reflect a portfolio of service offerings focused
on helping clients address complex business challenges.
The company’s full year 2016 revenues by operating segment as a
percentage of total company revenues are as follows: Healthcare
(58%); Education and Life Sciences (25%); and Business Advisory
(17%). Financial results by segment are included in the attached
schedules and in Huron's forthcoming annual report on Form 10-K
filing for the year ended Dec. 31, 2016.
ACQUISITIONS
On Jan. 9, 2017, Huron completed its acquisition of Pope
Woodhead and Associates Limited, a U.K.-based consulting firm
providing market access capabilities to assist clients in
developing value propositions for innovative medicines and
technologies. The acquisition expands Huron's life sciences
strategy expertise and strengthens the company's ability to lead
clients through complex payer and regulatory environments across
the global life sciences community. The results of operations of
Pope Woodhead will be included within the Education and Life
Sciences segment from the date of acquisition.
On Feb. 16, 2017, Huron entered into an agreement to acquire
Innosight Holdings, LLC, a growth strategy firm focused on helping
companies navigate disruptive change and manage strategic
transformation. Under the terms of the purchase agreement, Huron
will purchase Innosight for $100 million upon closing of the
transaction, consisting of $90 million in cash and $10 million in
Huron common stock, plus contingent consideration of up to $35
million if specific financial performance targets are met over a
four-year period. The cash component of the transaction will be
financed with cash on hand and borrowings under Huron's senior
secured credit facility. The results of operations of Innosight
will be included within the Business Advisory segment. The
transaction is expected to close in Mar. 2017, subject to customary
closing conditions.
OUTLOOK FOR 2017(7)
Based on currently available information, the company affirmed
guidance, which was previously announced on Feb. 16, 2017 and
includes Pope Woodhead and Innosight, for full year 2017 revenues
before reimbursable expenses in a range of $750.0 million to $790.0
million. The company also anticipates net income in a range of
$18.0 million to $25.0 million, and both EBITDA and adjusted EBITDA
in a range of $112.5 million to $124.5 million. GAAP diluted
earnings per share is expected in a range of $0.85 to $1.15, and
non-GAAP adjusted diluted earnings per share is expected in a range
of $2.40 to $2.70.
Management will provide a more detailed discussion of its
outlook during the company’s earnings conference call webcast.
FOURTH QUARTER 2016 WEBCAST
The company will host a webcast to discuss its financial results
today, Feb. 23, 2017, 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'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
Huron is a global professional services firm committed to
achieving sustainable results in partnership with its clients. The
company brings depth of expertise in strategy, technology,
operations, advisory services and analytics to drive lasting and
measurable results in the healthcare, higher education, life
sciences and commercial sectors. Through focus, passion and
collaboration, Huron provides guidance to support organizations as
they contend with the change transforming their industries and
businesses. Learn more at http://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 complete the pending acquisition of
Innosight or any material delay in the timing of such acquisition;
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, 2016, 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 EndedDecember 31,
Twelve Months EndedDecember 31, 2016
2015 2016 2015 Revenues and
reimbursable expenses: Revenues $ 178,124 $ 185,100 $ 726,272 $
699,010 Reimbursable expenses 17,076 16,747 71,712
70,013 Total revenues and reimbursable expenses
195,200 201,847 797,984 769,023
Direct costs and reimbursable
expenses (exclusive of depreciation and amortization shown in
operating expenses): Direct costs 114,246 104,467 437,556 401,915
Amortization of intangible assets and software development costs
3,862 4,686 15,140 16,788 Reimbursable expenses 17,002
16,738 71,749 69,932 Total direct costs and
reimbursable expenses 135,110 125,891 524,445
488,635
Operating expenses and other operating gains:
Selling, general and administrative expenses 40,267 40,646 160,204
157,902 Restructuring charges 5,463 1,752 9,592 3,329 Litigation
and other gains, net (2,484 ) (10,000 ) (1,990 ) (9,476 )
Depreciation and amortization 8,435 6,849 31,499
25,135 Total operating expenses and other operating
gains 51,681 39,247 199,305 176,890
Operating income 8,409 36,709 74,234 103,498
Other income
(expense), net: Interest expense, net of interest income (4,004
) (4,342 ) (16,274 ) (18,136 ) Other income (expense), net (39 )
185 1,197 (1,797 ) Total other expense, net (4,043 )
(4,157 ) (15,077 ) (19,933 ) Income from continuing operations
before income tax expense 4,366 32,552 59,157 83,565 Income tax
expense 179 50 19,677 21,670 Net income
from continuing operations 4,187 32,502 39,480 61,895 Income (loss)
from discontinued operations, net of tax (33 ) (13,159 ) (1,863 )
(2,843 ) Net income $ 4,154 $ 19,343 $ 37,617
$ 59,052 Net earnings per basic share: Net income from
continuing operations $ 0.20 $ 1.47 $ 1.87 $ 2.80 Income (loss)
from discontinued operations, net of tax — (0.59 ) (0.09 )
(0.13 ) Net income $ 0.20 $ 0.88 $ 1.78 $ 2.67
Net earnings per diluted share: Net income from continuing
operations $ 0.19 $ 1.44 $ 1.84 $ 2.74 Income (loss) from
discontinued operations, net of tax — (0.58 ) (0.08 ) (0.13
) Net income $ 0.19 $ 0.86 $ 1.76 $ 2.61
Weighted average shares used in calculating earnings per
share: Basic 21,083 22,093 21,084 22,136 Diluted 21,473 22,551
21,424 22,600
Comprehensive income: Net income $ 4,154 $
19,343 $ 37,617 $ 59,052 Foreign currency translation adjustments,
net of tax 12 2,018 64 1,817 Unrealized gain (loss) on investment,
net of tax 1,066 300 (97 ) 4,435 Unrealized gain (loss) on cash
flow hedging instruments, net of tax 90 240 63
(12 ) Other comprehensive income 1,168 2,558 30
6,240 Comprehensive income $ 5,322 $ 21,901
$ 37,647 $ 65,292
HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per
share amounts)
(Unaudited)
December 31,
2016
December 31,
2015
Assets Current assets: Cash and cash equivalents $ 17,027 $
58,437 Receivables from clients, net 94,246 85,297 Unbilled
services, net 51,290 56,527 Income tax receivable 4,211 406 Prepaid
expenses and other current assets 13,308 27,720 Total
current assets 180,082 228,387 Property and equipment, net 32,434
28,888 Long-term investment 34,675 34,831 Other non-current assets
24,814 21,045 Intangible assets, net 81,348 94,992 Goodwill 799,862
751,400 Total assets $ 1,153,215 $ 1,159,543
Liabilities and stockholders’ equity Current
liabilities: Accounts payable $ 7,273 $ 7,220 Accrued expenses
21,773 24,276 Accrued payroll and related benefits 82,669 80,839
Deferred revenues 24,053 19,086 Total current
liabilities 135,768 131,421 Non-current liabilities: Deferred
compensation and other liabilities 31,013 23,768 Long-term debt
292,065 307,376 Deferred lease incentives 10,703 9,965 Deferred
income taxes, net 35,633 34,688 Total non-current
liabilities 369,414 375,797
Commitments and contingencies
Stockholders’ equity Common stock; $0.01 par value;
500,000,000 shares authorized; 24,126,118 and 24,775,823 shares
issued at December 31, 2016 and December 31, 2015, respectively 235
241 Treasury stock, at cost, 2,408,343 and 2,249,630 shares at
December 31, 2016 and December 31, 2015, respectively (113,195 )
(103,734 ) Additional paid-in capital 405,895 438,367 Retained
earnings 351,483 313,866 Accumulated other comprehensive income
3,615 3,585 Total stockholders’ equity 648,033
652,325 Total liabilities and stockholders’ equity $
1,153,215 $ 1,159,543
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In thousands)
(Unaudited)
Twelve Months EndedDecember 31,
2016 2015 Cash flows from operating
activities: Net income $ 37,617 $ 59,052 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 46,816 58,053 Share-based
compensation 16,577 21,487 Amortization of debt discount and
issuance costs 9,609 9,329 Allowances for doubtful accounts and
unbilled services 4,250 1,025 Deferred income taxes 257 2,765 Loss
on sale of business — 2,303 Change in fair value of contingent
consideration liabilities (1,990 ) (1,126 ) Changes in operating
assets and liabilities, net of acquisitions and divestitures:
(Increase) decrease in receivables from clients 1,440 (2,836 )
(Increase) decrease in unbilled services 2,443 31,696 (Increase)
decrease in current income tax receivable / payable, net (4,410 )
8,818 (Increase) decrease in other assets 11,904 (14,742 ) Increase
(decrease) in accounts payable and accrued liabilities (3,144 )
8,805 Increase (decrease) in accrued payroll and related benefits
3,044 (25,221 ) Increase (decrease) in deferred revenues 3,898
4,859 Net cash provided by operating activities
128,311 164,267
Cash flows from investing
activities: Purchases of property and equipment, net (13,936 )
(18,571 ) Investment in life insurance policies (2,035 ) (5,804 )
Purchases of businesses, net of cash acquired (69,133 ) (339,966 )
Purchase of convertible debt investment — (15,438 ) Capitalization
of internally developed software costs (1,086 ) (866 ) Proceeds
from sale of business (446 ) 108,487 Net cash used in
investing activities (86,636 ) (272,158 )
Cash flows from
financing activities: Proceeds from exercise of stock options
123 — Shares redeemed for employee tax withholdings (4,953 ) (7,154
) Tax benefit from share-based compensation 932 3,588 Share
repurchases (55,265 ) (34,591 ) Proceeds from borrowings under
credit facility 200,000 314,000 Repayments on credit facility
(224,000 ) (365,750 ) Payments for capital lease obligations —
(48 ) Net cash used in financing activities (83,163 )
(89,955 ) Effect of exchange rate changes on cash 78 (589 ) Net
decrease in cash and cash equivalents (41,410 ) (198,435 ) Cash and
cash equivalents at beginning of the period 58,437 256,872
Cash and cash equivalents at end of the period $ 17,027
$ 58,437
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA
(Unaudited)
Three Months EndedDecember 31,
Percent
Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2016 2015 Healthcare: Revenues $
101,381 $ 118,263 (14.3 )% Operating income $ 28,674 $ 47,440 (39.6
)% Segment operating income as a percentage of segment revenues
28.3
%
40.1 %
Education and Life Sciences: Revenues $ 44,928 $
43,041 4.4 % Operating income $ 7,826 $ 8,789 (11.0 )% Segment
operating income as a percentage of segment revenues 17.4 % 20.4 %
Business Advisory: Revenues $ 31,815 $ 23,795 33.7 %
Operating income $ 5,117 $ 5,749 (11.0 )% Segment operating income
as a percentage of segment revenues 16.1 % 24.2 %
All Other:
Revenues $ — $ 1 (100.0 )% Operating loss $ — $ (64 ) (100.0 )%
Segment operating loss as a percentage of segment revenues N/M N/M
Total Company: Revenues $ 178,124 $ 185,100 (3.8 )%
Reimbursable expenses 17,076 16,747 2.0 %
Total
revenues and reimbursable expenses $ 195,200 $ 201,847
(3.3 )%
Statements of Earnings reconciliation:
Segment operating income $ 41,617 $ 61,914 (32.8 )% Items not
allocated at the segment level: Other operating expenses 27,257
28,356 (3.9 )% Litigation and other gains, net (2,484 ) (10,000 )
(75.2 )% Depreciation and amortization expense 8,435 6,849
23.2 % Total operating income 8,409 36,709 (77.1 )% Other
expense, net 4,043 4,157 (2.7 )%
Income from
continuing operations before income tax expense $ 4,366
$ 32,552 (86.6 )%
Other Operating Data (excluding All
Other): Number of full-time billable consultants (at period
end) (1): Healthcare 888 1,037 (14.4 )% Education
and Life Sciences 544 478 13.8 % Business Advisory 471 306
53.9 % Total 1,903 1,821 4.5 %
Average number of
full-time billable consultants (for the period)
(1): Healthcare 976 1,063 Education and Life Sciences
547 474 Business Advisory 475 302 Total 1,998 1,839
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Three Months Ended December 31, Other
Operating Data (continued): 2016 2015
Full-time billable consultant utilization rate
(2): Healthcare 72.4 % 82.7 % Education and Life
Sciences 68.9 % 74.4 % Business Advisory 75.7 % 74.8 % Total 72.2 %
79.2 %
Full-time billable consultant average billing rate per
hour (3): Healthcare $ 215 $ 223 Education and
Life Sciences $ 230 $ 233 Business Advisory $ 176 $ 215 Total $ 209
$ 224
Revenue per full-time billable consultant (in
thousands): Healthcare $ 69 $ 82 Education and Life Sciences $
71 $ 77 Business Advisory $ 62 $ 76 Total $ 68 $ 80
Average
number of full-time equivalents (for the period)
(5): Healthcare 212 199 Education and Life Sciences
44 51 Business Advisory 21 9 Total 277 259
Revenue
per full-time equivalent (in thousands): Healthcare $ 158 $ 155
Education and Life Sciences $ 136 $ 124 Business Advisory $ 115 $
106 Total $ 151 $ 147
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Twelve Months Ended December 31,
Percent
Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
2016 2015 Healthcare: Revenues $
424,912 $ 446,887 (4.9 )% Operating income $ 147,903 $ 169,560
(12.8 )% Segment operating income as a percentage of segment
revenues 34.8 % 37.9 %
Education and Life Sciences: Revenues
$ 178,978 $ 167,933 6.6 % Operating income $ 43,233 $ 44,216 (2.2
)% Segment operating income as a percentage of segment revenues
24.2 % 26.3 %
Business Advisory: Revenues $ 122,382 $ 82,968
47.5 % Operating income $ 24,459 $ 19,263 27.0 % Segment operating
income as a percentage of segment revenues 20.0 % 23.2 %
All
Other: Revenues $ — $ 1,222 (100.0 )% Operating loss $ — $
(1,718 ) (100.0 )% Segment operating loss as a percentage of
segment revenues N/M N/M
Total Company: Revenues $ 726,272 $
699,010 3.9 % Reimbursable expenses 71,712 70,013 2.4
%
Total revenues and reimbursable expenses $ 797,984
$ 769,023 3.8 %
Statements of Earnings
reconciliation: Segment operating income $ 215,595 $ 231,321
(6.8 )% Items not allocated at the segment level: Other operating
expenses 111,852 112,164 (0.3 )% Litigation and other gains, net
(1,990 ) (9,476 ) (79.0 )% Depreciation and amortization expense
31,499 25,135 25.3 % Total operating income 74,234
103,498 (28.3 )% Other expense, net 15,077 19,933
(24.4 )%
Income from continuing operations before income tax
expense $ 59,157 $ 83,565 (29.2 )%
Other
Operating Data (excluding All Other): Number of full-time
billable consultants (at period end) (1):
Healthcare 888 1,037 (14.4 )% Education and Life Sciences 544 478
13.8 % Business Advisory 471 306 53.9 % Total 1,903
1,821 4.5 %
Average number of full-time billable consultants
(for the period) (1): Healthcare 998 1,085
Education and Life Sciences 514 442 Business Advisory 409
243 Total 1,921 1,770
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER
OPERATING DATA (CONTINUED)
(Unaudited)
Twelve Months Ended December 31, Other
Operating Data (continued): 2016 2015
Full-time billable consultant utilization rate
(2): Healthcare 77.1 % 77.9 % Education and Life
Sciences 69.8 % 75.5 % Business Advisory 74.5 % 75.0 % Total 74.6 %
76.9 %
Full-time billable consultant average billing rate per
hour (3): Healthcare $ 210 $ 217 Education and
Life Sciences $ 229 $ 231 Business Advisory (4) $ 194 $ 228 Total $
212 $ 222
Revenue per full-time billable consultant (in
thousands): Healthcare $ 300 $ 313 Education and Life Sciences
$ 303 $ 325 Business Advisory $ 280 $ 328 Total $ 297 $ 318
Average number of full-time equivalents (for the period)
(5): Healthcare 203 179 Education and Life Sciences
41 43 Business Advisory 17 8 Total 261 230
Revenue
per full-time equivalent (in thousands): Healthcare $ 614 $ 604
Education and Life Sciences $ 564 $ 574 Business Advisory $ 456 $
408 Total $ 596 $ 591
_________________
(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
Business Advisory segment includes our India Enterprise Solutions
and Analytics practice, formerly known as Rittman Mead Consulting
Private Limited, a business that we acquired in July 2015. Absent
the impact of our India Enterprise Solutions and Analytics
practice, the average billing rate per hour for Business Advisory
for the twelve months ended December 31, 2016 and 2015 would have
been $225 and $256, 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 EndedDecember 31,
Twelve Months EndedDecember 31, 2016
2015 2016 2015 Revenues $
178,124 $ 185,100 $ 726,272 $ 699,010
Net income from continuing operations $ 4,187 $ 32,502 $ 39,480 $
61,895 Add back: Income tax expense 179 50 19,677 21,670 Interest
and other expenses 4,043 4,157 15,077 19,933 Depreciation and
amortization 12,297 11,535 46,639 41,923
Earnings before interest, taxes, depreciation and
amortization (EBITDA) (6) 20,706 48,244 120,873 145,421
Add back: Restructuring charges 5,463 1,752 9,592 3,329 Litigation
and other gains, net (2,484 ) (10,000 ) (1,990 ) (9,476 )
Adjusted EBITDA (6) $ 23,685 $ 39,996 $
128,475 $ 139,274
Adjusted EBITDA as a percentage
of revenues (6) 13.3 % 21.6 % 17.7 % 19.9 %
RECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING
OPERATIONS (6)
(In thousands, except per share
amounts)
(Unaudited)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31, 2016
2015 2016 2015 Net income from
continuing operations $ 4,187 $ 32,502 $ 39,480
$ 61,895
Weighted average shares – diluted
21,473 22,551 21,424 22,600
Diluted earnings per share from
continuing operations $ 0.19 $ 1.44 $ 1.84
$ 2.74 Add back: Amortization of intangible assets 8,739
8,011 33,108 28,696 Restructuring charges 5,463 1,752 9,592 3,329
Litigation and other gains, net (2,484 ) (10,000 ) (1,990 ) (9,476
) Non-cash interest on convertible notes 1,906 1,817 7,488 7,141
Tax effect (5,354 ) (623 ) (18,942 ) (11,698 ) Net tax benefit
related to "check-the-box" election — (12,336 ) —
(12,336 ) Total adjustments, net of tax 8,270 (11,379 )
29,256 5,656
Adjusted net income from continuing
operations (6) $ 12,457 $ 21,123 $ 68,736
$ 67,551
Adjusted diluted earnings per share from
continuing operations (6) $ 0.58 $ 0.94 $
3.21 $ 2.99
_________________
(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 2017 OUTLOOK
RECONCILIATION OF NET INCOME
TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION AND AMORTIZATION (7)
(In millions)
(Unaudited)
Year Ending December 31, 2017
Guidance Range Low High Projected
revenues - GAAP $ 750.0 $ 790.0
Projected net
income - GAAP $ 18.0 $ 25.0 Add back: Income tax expense 13.0
18.0 Interest expense 18.5 18.5 Depreciation and amortization 63.0
63.0
Projected earnings before interest, taxes,
depreciation and amortization (EBITDA) (7) 112.5 124.5
Add back: Restructuring charges — — Other gains, net — —
Projected adjusted EBITDA (7) $ 112.5 $
124.5
Projected adjusted EBITDA as a percentage of
projected revenues (7) 15.0 % 15.8 %
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME
(7)
(In millions, except per share
amounts)
(Unaudited)
Year Ending December 31, 2017 Guidance
Range Low High Projected net income -
GAAP $ 18.0 $ 25.0
Projected diluted earnings
per share - GAAP $ 0.85 $ 1.15 Add back:
Amortization of intangible assets 47.0 47.0 Restructuring charges —
— Other gains, net — — Non-cash interest on convertible notes 8.0
8.0 Tax effect (21.0 ) (21.0 )
Total adjustments, net of tax
34.0 34.0
Projected adjusted net income
(7) $ 52.0 $ 59.0
Projected adjusted
diluted earnings per share (7) $ 2.40 $ 2.70
_________________
(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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170223006291/en/
HuronMEDIA CONTACTSarah
McHugh312-880-2624smchugh@huronconsultinggroup.comorINVESTOR
CONTACTJohn D.
Kelly312-583-8722investor@huronconsultinggroup.com
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