THIRD QUARTER 2018 HIGHLIGHTS
-
Revenues increased $22.1 million, or 12.5%, to $198.4 million in Q3
2018 from $176.4 million in Q3 2017.
-
Net income from continuing operations increased $4.1 million, or
99.6%, to $8.2 million in Q3 2018 from $4.1 million in Q3 2017.
-
Adjusted EBITDA(7), a non-GAAP measure, increased $3.3
million, or 15.2%, to $24.7 million in Q3 2018 from $21.5 million in
Q3 2017.
-
Diluted earnings per share from continuing operations increased $0.18,
or 94.7%, to $0.37 in Q3 2018 from $0.19 in Q3 2017.
-
Adjusted diluted earnings per share from continuing operations(7),
a non-GAAP measure, increased $0.21, or 48.8%, to $0.64 in Q3 2018
from $0.43 in Q3 2017.
YEAR TO DATE 2018 HIGHLIGHTS AND 2018 GUIDANCE
-
Revenues increased $43.0 million, or 7.9%, to $589.7 million for the
first nine months of 2018, compared to $546.6 million for the same
period in 2017.
-
Net income from continuing operations was $10.9 million for the first
nine months of 2018, compared to net loss from continuing operations
of $141.2 million for the same period in 2017, which included a
non-cash pretax goodwill impairment charge of $209.6 million related
to the company's Healthcare segment.
-
Adjusted EBITDA(7), a non-GAAP measure, was $63.1 million
for the first nine months of 2018, compared to $73.1 million for the
same period in 2017.
-
Diluted earnings per share from continuing operations was $0.50 for
the first nine months of 2018, compared to diluted loss per share from
continuing operations of $6.59 for the first nine months of 2017.
-
Adjusted diluted earnings per share from continuing operations(7),
a non-GAAP measure, was $1.42 for the first nine months of 2018,
compared to $1.47 for the first nine months of 2017.
-
Huron updates full year 2018 guidance, including revenue expectations
in a range of $775.0 million to $790.0 million.
CHICAGO -- (Business Wire)
Global professional services firm Huron (NASDAQ: HURN) today announced
financial results from continuing operations for the third quarter ended
September 30, 2018.
"Revenues grew 13% over the prior year quarter, driven by organic growth
in each of our three operating segments," said James
H. Roth, chief executive officer and president of Huron.
"Our third quarter results reflect the continued execution of our
strategy and the impact of our talented team in helping our clients
respond to rapidly changing business environments."
THIRD QUARTER 2018 RESULTS FROM CONTINUING OPERATIONS
Revenues increased $22.1 million, or 12.5%, to $198.4 million for the
third quarter of 2018, compared to $176.4 million for the third quarter
of 2017.
Net income from continuing operations increased $4.1 million, or 99.6%,
to $8.2 million for the third quarter of 2018, compared to $4.1 million
for the same period last year. Diluted earnings per share from
continuing operations increased $0.18, or 94.7%, to $0.37 for the third
quarter of 2018, compared to $0.19 for the third quarter of 2017.
Third quarter 2018 earnings before interest, taxes, depreciation and
amortization ("EBITDA")(7) increased $4.2 million,
or 21.4%, to $23.8 million, compared to $19.6 million in the same period
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, |
| | 2018 |
| 2017 |
Restructuring charges
| |
$
|
(31
|
)
| |
$
|
1,347
| |
Other losses, net
| |
$
|
887
| | |
$
|
880
| |
Amortization of intangible assets
| |
$
|
5,934
| | |
$
|
8,834
| |
Non-cash interest on convertible notes
| |
$
|
2,070
| | |
$
|
1,974
| |
Loss on sale of business
| |
$
|
32
| | |
$
|
—
| |
Tax effect
| |
$
|
(2,312
|
)
| |
$
|
(5,100
|
)
|
Tax benefit related to the enactment of Tax Cut and Jobs Act of 2017
| |
$
|
(747
|
)
| |
$
|
—
| |
Tax benefit related to "check-the-box" election
| |
$
|
—
| | |
$
|
(2,748
|
)
|
Foreign currency transaction losses (gains)
| |
$
|
9
| | |
$
|
(385
|
)
|
| | | | | | | |
|
Adjusted EBITDA(7) increased $3.3 million, or 15.2%, to $24.7
million, or 12.5% of revenues, in the third quarter of 2018, compared to
$21.5 million, or 12.2% of revenues, in the same quarter last year.
Adjusted net income from continuing operations(7) increased
$4.8 million, or 51.1%, to $14.1 million, or $0.64 per diluted share,
for the third quarter of 2018, compared to $9.3 million, or $0.43 per
diluted share, for the same period in 2017.
The average number of full-time billable consultants(2)
increased 5.7% to 2,163 in the third quarter of 2018 from 2,047 in the
same quarter last year. Full-time billable consultant utilization rate(3)
was 77.8% during the third quarter of 2018, compared to 75.1% during the
same period last year. Average billing rate per hour for full-time
billable consultants(4) was $210 for the third quarter of
2018, compared to $202 for the third quarter of 2017. The average number
of full-time equivalent professionals(6) was 296 in the third
quarter of 2018, compared to 275 for the same period in 2017.
YEAR-TO-DATE 2018 RESULTS FROM CONTINUING OPERATIONS
Revenues increased $43.0 million, or 7.9%, to $589.7 million for the
first nine months of 2018, compared to $546.6 million for the first nine
months of 2017. Revenues for the first nine months of 2018 included $6.4
million of incremental revenues due to the full period impact of Huron's
acquisition of Innosight Holdings, LLC, which was completed in March
2017.
Net income from continuing operations was $10.9 million for the first
nine months of 2018, compared to net loss from continuing operations of
$141.2 million for the same period last year. Diluted earnings per share
from continuing operations was $0.50 for the first nine months of 2018,
compared to diluted loss per share from continuing operations of $6.59
for the same prior year period.
EBITDA(7) was $59.4 million for the first nine months of
2018, compared to loss before interest, taxes, depreciation and
amortization(7) of $140.2 million in the comparable period
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):
|
| |
| | Nine Months Ended |
| | September 30, |
| | 2018 |
| 2017 |
Restructuring charges
| |
$
|
2,665
| | |
$
|
5,295
| |
Other gains, net
| |
$
|
(4,990
|
)
| |
$
|
(222
|
)
|
Amortization of intangible assets
| |
$
|
18,233
| | |
$
|
26,432
| |
Goodwill impairment charge
| |
$
|
—
| | |
$
|
209,600
| |
Non-cash interest on convertible notes
| |
$
|
6,138
| | |
$
|
5,853
| |
Loss (gain) on sale of businesses
| |
$
|
5,863
| | |
$
|
(931
|
)
|
Tax effect
| |
$
|
(7,109
|
)
| |
$
|
(70,362
|
)
|
Tax benefit related to the enactment of Tax Cut and Jobs Act of 2017
| |
$
|
(615
|
)
| |
$
|
—
| |
Tax benefit related to "check-the-box" election
| |
$
|
—
| | |
$
|
(2,748
|
)
|
Foreign currency transaction losses (gains)
| |
$
|
196
| | |
$
|
(449
|
)
|
| | | | | | | |
|
Adjusted EBITDA(7) was $63.1 million, or 10.7% of revenues,
in the first nine months of 2018, compared to $73.1 million, or 13.4% of
revenues, in the comparable period last year. Adjusted net income from
continuing operations(7) was $31.1 million, or $1.42 per
diluted share, for the first nine months of 2018, compared to $31.7
million, or $1.47 per diluted share, for the comparable period in 2017.
The average number of full-time billable consultants(2) increased6.5% to 2,142 in the first nine months of 2018, compared to 2,012
in the same period last year. Full-time billable consultant utilization
rate(3) was 76.8% for the first nine months of 2018, compared
to 74.6% in the same period last year. Average billing rate per hour for
full-time billable consultants(4) was $207 for the first nine
months of 2018, compared to $206 for the same prior year period. The
average number of full-time equivalent professionals(6) was
279in the first nine months of 2018, compared to 272 for the
comparable period in 2017.
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 2018 revenues by operating segment as a
percentage of total company revenues are as follows: Healthcare
(46%); Business
Advisory (29%); and Education
(25%). 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 September 30, 2018.
OUTLOOK FOR2018(9)
Based on currently available information, the company updated its
outlook for full year 2018. The company now anticipates full year 2018
revenues before reimbursable expenses in a range of $775.0 million to
$790.0 million. The company also anticipates net income in a range of
$18.0 million to $22.0 million, EBITDA in a range of $84.0 million to
$90.0 million, and adjusted EBITDA in a range of $88.0 million to $94.0
million. GAAP diluted earnings per share is expected in a range of $0.82
to $0.98, and non-GAAP adjusted diluted earnings per share is expected
in a range of $2.02 to $2.18.
Management will provide a more detailed discussion of its outlook during
the company’s earnings conference call webcast.
THIRD QUARTER 2018 WEBCAST
The company will host a webcast to discuss its financial results today,
October 30, 2018, at 5:00 p.m. Eastern Time (4:00 p.m. Central Time).
The conference call is being webcast by NASDAQ 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(7)
In evaluating the company’s financial performance and outlook,
management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage
of revenues, adjusted net income from continuing operations, and
adjusted diluted earnings per share from continuing operations, which
are non-GAAP measures. Management uses these non-GAAP financial measures
to gain an understanding of the company's 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 the company's ongoing business in a manner that
allows for meaningful period-to-period comparisons. Management also uses
these non-GAAP financial measures when publicly providing their business
outlook, for internal management purposes, and as a basis for evaluating
potential acquisitions and dispositions. Management believes 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 consultancy that helps its clients drive growth,
enhance performance and sustain leadership in the markets they serve.
The company partners with clients to develop strategies and implement
solutions that enable the transformative change its clients need to own
their future. 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 results, 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,” "guidance," or “outlook” or similar
expressions. These forward-looking statements reflect the company's
current expectations about 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 Huron's Annual Report on Form
10-K for the year ended December 31, 2017, 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. The company disclaims 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 OPERATIONS AND OTHER COMPREHENSIVE
INCOME (LOSS) |
(In thousands, except per share amounts) |
(Unaudited) |
| | | |
|
| | | |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
Revenues and reimbursable expenses: | | | | | | | | |
Revenues
| |
$
|
198,448
| | |
$
|
176,376
| | |
$
|
589,671
| | |
$
|
546,643
| |
Reimbursable expenses
| |
21,296
|
| |
17,982
|
| |
59,648
|
| |
55,862
|
|
Total revenues and reimbursable expenses
| |
219,744
| | |
194,358
| | |
649,319
| | |
602,505
| |
Direct costs and reimbursable expenses (exclusive of
depreciation and amortization shown in operating expenses):
| | | | | | | | |
Direct costs
| |
128,596
| | |
113,775
| | |
388,956
| | |
343,185
| |
Amortization of intangible assets and software development costs
| |
1,009
| | |
2,657
| | |
3,195
| | |
8,388
| |
Reimbursable expenses
| |
21,246
|
| |
18,079
|
| |
59,710
|
| |
55,901
|
|
Total direct costs and reimbursable expenses
| |
150,851
|
| |
134,511
|
| |
451,861
|
| |
407,474
|
|
Operating expenses and other losses (gains), net: | | | | | | | | |
Selling, general and administrative expenses
| |
45,915
| | |
41,576
| | |
138,481
| | |
132,137
| |
Restructuring charges
| |
(31
|
)
| |
1,347
| | |
2,665
| | |
5,295
| |
Other losses (gains), net
| |
887
| | |
880
| | |
(4,990
|
)
| |
(222
|
)
|
Depreciation and amortization
| |
8,561
| | |
9,946
| | |
26,281
| | |
28,549
| |
Goodwill impairment charge
| |
—
|
| |
—
|
| |
—
|
| |
209,600
|
|
Total operating expenses and other losses (gains), net
| |
55,332
|
| |
53,749
|
| |
162,437
|
| |
375,359
|
|
Operating income (loss)
| |
13,561
| | |
6,098
| | |
35,021
| | |
(180,328
|
)
|
Other income (expense), net: | | | | | | | | |
Interest expense, net of interest income
| |
(4,628
|
)
| |
(4,880
|
)
| |
(14,636
|
)
| |
(13,811
|
)
|
Other income (expense), net
| |
707
|
| |
930
|
| |
(5,131
|
)
| |
3,204
|
|
Total other expense, net
| |
(3,921
|
)
| |
(3,950
|
)
| |
(19,767
|
)
| |
(10,607
|
)
|
Income (loss) from continuing operations before taxes
| |
9,640
| | |
2,148
| | |
15,254
| | |
(190,935
|
)
|
Income tax expense (benefit)
| |
1,391
|
| |
(1,984
|
)
| |
4,365
|
| |
(49,740
|
)
|
Net income (loss) from continuing operations
| |
8,249
| | |
4,132
| | |
10,889
| | |
(141,195
|
)
|
Income (loss) from discontinued operations, net of tax
| |
228
|
| |
238
|
| |
(304
|
)
| |
690
|
|
Net income (loss)
| |
$
|
8,477
|
| |
$
|
4,370
|
| |
$
|
10,585
|
| |
$
|
(140,505
|
)
|
Net earnings (loss) per basic share:
| | | | | | | | |
Net income (loss) from continuing operations
| |
$
|
0.38
| | |
$
|
0.19
| | |
$
|
0.50
| | |
$
|
(6.59
|
)
|
Income (loss) from discontinued operations, net of tax
| |
0.01
|
| |
0.01
|
| |
(0.01
|
)
| |
0.03
|
|
Net income (loss)
| |
$
|
0.39
|
| |
$
|
0.20
|
| |
$
|
0.49
|
| |
$
|
(6.56
|
)
|
Net earnings (loss) per diluted share:
| | | | | | | | |
Net income (loss) from continuing operations
| |
$
|
0.37
| | |
$
|
0.19
| | |
$
|
0.50
| | |
$
|
(6.59
|
)
|
Income (loss) from discontinued operations, net of tax
| |
0.01
|
| |
0.01
|
| |
(0.02
|
)
| |
0.03
|
|
Net income (loss)
| |
$
|
0.38
|
| |
$
|
0.20
|
| |
$
|
0.48
|
| |
$
|
(6.56
|
)
|
Weighted average shares used in calculating earnings per share:
| | | | | | | | |
Basic
| |
21,745
| | |
21,505
| | |
21,683
| | |
21,413
| |
Diluted
| |
22,110
| | |
21,622
| | |
21,947
| | |
21,413
| |
Comprehensive income (loss): | | | | | | | | |
Net income (loss)
| |
$
|
8,477
| | |
$
|
4,370
| | |
$
|
10,585
| | |
$
|
(140,505
|
)
|
Foreign currency translation adjustments, net of tax
| |
(579
|
)
| |
609
| | |
(1,499
|
)
| |
1,835
| |
Unrealized gain (loss) on investment, net of tax
| |
(852
|
)
| |
(2,200
|
)
| |
4,473
| | |
(1,669
|
)
|
Unrealized gain (loss) on cash flow hedging instruments, net of tax
| |
206
|
| |
23
|
| |
821
|
| |
(4
|
)
|
Other comprehensive income (loss)
| |
(1,225
|
)
| |
(1,568
|
)
| |
3,795
|
| |
162
|
|
Comprehensive income (loss)
| |
$
|
7,252
|
| |
$
|
2,802
|
| |
$
|
14,380
|
| |
$
|
(140,343
|
)
|
|
| |
| |
HURON CONSULTING GROUP INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands, except share and per share amounts) |
(Unaudited) |
| | | |
|
| | | |
|
| | September 30, | | December 31, |
| | 2018 | | 2017 |
Assets | | | | |
Current assets:
| | | | |
Cash and cash equivalents
| |
$
|
9,025
| | |
$
|
16,909
| |
Receivables from clients, net
| |
108,747
| | |
101,778
| |
Unbilled services, net
| |
75,290
| | |
57,618
| |
Income tax receivable
| |
1,754
| | |
4,039
| |
Prepaid expenses and other current assets
| |
13,328
|
| |
10,951
|
|
Total current assets
| |
208,144
| | |
191,295
| |
Property and equipment, net
| |
41,164
| | |
45,541
| |
Deferred income taxes, net
| |
14,028
| | |
16,752
| |
Long-term investment
| |
45,948
| | |
39,904
| |
Other non-current assets
| |
32,035
| | |
25,375
| |
Intangible assets, net
| |
53,703
| | |
72,311
| |
Goodwill
| |
645,543
|
| |
645,750
|
|
Total assets
| |
$
|
1,040,565
|
| |
$
|
1,036,928
|
|
Liabilities and stockholders’ equity | | | | |
Current liabilities:
| | | | |
Accounts payable
| |
$
|
9,979
| | |
$
|
9,194
| |
Accrued expenses and other current liabilities
| |
21,016
| | |
20,144
| |
Accrued payroll and related benefits
| |
83,069
| | |
73,698
| |
Accrued contingent consideration for business acquisitions
| |
8,003
| | |
8,515
| |
Deferred revenues
| |
30,043
|
| |
27,916
|
|
Total current liabilities
| |
152,110
| | |
139,467
| |
Non-current liabilities:
| | | | |
Deferred compensation and other liabilities
| |
22,837
| | |
20,895
| |
Accrued contingent consideration for business acquisitions, net of
current portion
| |
4,886
| | |
14,313
| |
Long-term debt, net of current portion
| |
315,691
| | |
342,507
| |
Deferred lease incentives
| |
14,110
| | |
15,333
| |
Deferred income taxes, net
| |
1,058
|
| |
1,097
|
|
Total non-current liabilities
| |
358,582
| | |
394,145
| |
Commitments and contingencies | | | | |
Stockholders’ equity | | | | |
Common stock; $0.01 par value; 500,000,000 shares authorized;
25,104,739 and 24,560,468 shares issued at September 30, 2018 and
December 31, 2017, respectively
| |
244
| | |
241
| |
Treasury stock, at cost, 2,549,822 and 2,443,577 shares at September
30, 2018 and December 31, 2017, respectively
| |
(124,169
|
)
| |
(121,994
|
)
|
Additional paid-in capital
| |
446,649
| | |
434,256
| |
Retained earnings
| |
192,984
| | |
180,443
| |
Accumulated other comprehensive income
| |
14,165
|
| |
10,370
|
|
Total stockholders’ equity
| |
529,873
|
| |
503,316
|
|
Total liabilities and stockholders’ equity
| |
$
|
1,040,565
|
| |
$
|
1,036,928
|
|
|
| |
HURON CONSULTING GROUP INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
| |
|
| |
|
| | Nine Months Ended |
| | September 30, |
| | 2018 |
| 2017 |
Cash flows from operating activities: | | | | |
Net income (loss)
| |
$
|
10,585
| | |
$
|
(140,505
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
| | | | |
Depreciation and amortization
| |
29,965
| | |
37,881
| |
Share-based compensation
| |
12,840
| | |
11,711
| |
Amortization of debt discount and issuance costs
| |
7,721
| | |
7,604
| |
Goodwill impairment charge
| |
—
| | |
209,600
| |
Allowances for doubtful accounts and unbilled services
| |
573
| | |
3,812
| |
Deferred income taxes
| |
179
| | |
(51,062
|
)
|
Loss (gain) on sale of businesses
| |
5,863
| | |
(931
|
)
|
Change in fair value of contingent consideration liabilities
| |
(2,463
|
)
| |
(222
|
)
|
Changes in operating assets and liabilities, net of acquisitions and
divestitures:
| | | | |
(Increase) decrease in receivables from clients, net
| |
(9,103
|
)
| |
9,025
| |
(Increase) decrease in unbilled services, net
| |
(16,714
|
)
| |
(12,251
|
)
|
(Increase) decrease in current income tax receivable / payable, net
| |
1,400
| | |
(32
|
)
|
(Increase) decrease in other assets
| |
(3,768
|
)
| |
(1,802
|
)
|
Increase (decrease) in accounts payable and accrued liabilities
| |
186
| | |
1,850
| |
Increase (decrease) in accrued payroll and related benefits
| |
9,445
| | |
(21,928
|
)
|
Increase (decrease) in deferred revenues
| |
2,158
|
| |
(318
|
)
|
Net cash provided by operating activities
| |
48,867
|
| |
52,432
|
|
Cash flows from investing activities: | | | | |
Purchases of property and equipment, net
| |
(6,662
|
)
| |
(20,139
|
)
|
Investment in life insurance policies
| |
(1,689
|
)
| |
(1,826
|
)
|
Distributions from life insurance policies
| |
—
| | |
2,889
| |
Purchases of businesses, net of cash acquired
| |
(215
|
)
| |
(106,915
|
)
|
Capitalization of internally developed software costs
| |
(3,611
|
)
| |
(938
|
)
|
Proceeds from note receivable
| |
1,040
| | |
177
| |
Divestitures of businesses
| |
(2,359
|
)
| |
1,499
|
|
Net cash used in investing activities
| |
(13,496
|
)
| |
(125,253
|
)
|
Cash flows from financing activities: | | | | |
Proceeds from exercise of stock options
| |
703
| | |
—
| |
Shares redeemed for employee tax withholdings
| |
(3,091
|
)
| |
(4,450
|
)
|
Proceeds from borrowings under credit facility
| |
179,800
| | |
241,000
| |
Repayments of debt
| |
(213,674
|
)
| |
(170,082
|
)
|
Payments for debt issuance costs
| |
(1,385
|
)
| |
(395
|
)
|
Deferred acquisition payments
| |
(5,494
|
)
| |
(1,811
|
)
|
Net cash provided by (used in) financing activities
| |
(43,141
|
)
| |
64,262
|
|
Effect of exchange rate changes on cash
| |
(114
|
)
| |
192
| |
Net decrease in cash and cash equivalents
| |
(7,884
|
)
| |
(8,367
|
)
|
Cash and cash equivalents at beginning of the period
| |
16,909
|
| |
17,027
|
|
Cash and cash equivalents at end of the period
| |
$
|
9,025
|
| |
$
|
8,660
|
|
|
| |
| |
HURON CONSULTING GROUP INC. |
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA |
(Unaudited) |
| | | |
|
| | | |
|
| | Three Months Ended September 30, | | Percent Increase (Decrease) |
Segment and Consolidated Operating Results (in thousands): | | 2018 |
| 2017 | |
Healthcare: | | | | | | |
Revenues
| |
$
|
90,417
| | |
$
|
79,582
| | |
13.6
|
%
|
Operating income
| |
$
|
26,640
| | |
$
|
25,778
| | |
3.3
|
%
|
Segment operating income as a percentage of segment revenues
| |
29.5
|
%
| |
32.4
|
%
| | |
Business Advisory: | | | | | | |
Revenues
| |
$
|
57,175
| | |
$
|
55,372
| | |
3.3
|
%
|
Operating income
| |
$
|
11,815
| | |
$
|
12,832
| | |
(7.9
|
)%
|
Segment operating income as a percentage of segment revenues
| |
20.7
|
%
| |
23.2
|
%
| | |
Education: | | | | | | |
Revenues
| |
$
|
50,856
| | |
$
|
41,422
| | |
22.8
|
%
|
Operating income
| |
$
|
15,014
| | |
$
|
7,762
| | |
93.4
|
%
|
Segment operating income as a percentage of segment revenues
| |
29.5
|
%
| |
18.7
|
%
| | |
Total Company: | | | | | | |
Revenues
| |
$
|
198,448
| | |
$
|
176,376
| | |
12.5
|
%
|
Reimbursable expenses
| |
21,296
|
| |
17,982
|
| |
18.4
|
%
|
Total revenues and reimbursable expenses | |
$
|
219,744
|
| |
$
|
194,358
|
| |
13.1
|
%
|
Statements of Operations reconciliation: | | | | | | |
Segment operating income
| |
$
|
53,469
| | |
$
|
46,372
| | |
15.3
|
%
|
Items not allocated at the segment level:
| | | | | | |
Other operating expenses
| |
30,460
| | |
29,448
| | |
3.4
|
%
|
Other losses, net
| |
887
| | |
880
| | |
0.8
|
%
|
Depreciation and amortization
| |
8,561
|
| |
9,946
|
| |
(13.9
|
)%
|
Total operating income
| |
13,561
| | |
6,098
| | |
122.4
|
%
|
Other expense, net
| |
(3,921
|
)
| |
(3,950
|
)
| |
(0.7
|
)%
|
Income from continuing operations before taxes | |
$
|
9,640
|
| |
$
|
2,148
|
| |
N/M
|
Other Operating Data: | | | | | | |
Number of full-time billable consultants (at period end) (2): | | | | | | |
Healthcare
| |
829
| | |
761
| | |
8.9
|
%
|
Business Advisory
| |
775
| | |
830
| | |
(6.6
|
)%
|
Education
| |
618
|
| |
536
|
| |
15.3
|
%
|
Total
| |
2,222
| | |
2,127
| | |
4.5
|
%
|
Average number of full-time billable consultants (for the period)
(2): | | | | | | |
Healthcare
| |
821
| | |
741
| | | |
Business Advisory
| |
735
| | |
779
| | | |
Education
| |
607
|
| |
527
|
| | |
Total
| |
2,163
| | |
2,047
| | | |
|
| |
HURON CONSULTING GROUP INC. |
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) |
(Unaudited) |
| |
|
| |
|
| | Three Months Ended |
| | September 30, |
Other Operating Data (continued): | | 2018 |
| 2017 |
Full-time billable consultant utilization rate (3): | | | | |
Healthcare
| |
81.2
|
%
| |
80.3
|
%
|
Business Advisory
| |
74.4
|
%
| |
72.9
|
%
|
Education
| |
77.3
|
%
| |
70.9
|
%
|
Total
| |
77.8
|
%
| |
75.1
|
%
|
Full-time billable consultant average billing rate per hour (4): | | | | |
Healthcare
| |
$
|
211
| | |
$
|
190
| |
Business Advisory (5) | |
$
|
213
| | |
$
|
209
| |
Education
| |
$
|
205
| | |
$
|
210
| |
Total (5) | |
$
|
210
| | |
$
|
202
| |
Revenue per full-time billable consultant (in thousands): | | | | |
Healthcare
| |
$
|
76
| | |
$
|
69
| |
Business Advisory
| |
$
|
74
| | |
$
|
67
| |
Education
| |
$
|
74
| | |
$
|
69
| |
Total
| |
$
|
75
| | |
$
|
68
| |
Average number of full-time equivalents (for the period) (6): | | | | |
Healthcare
| |
228
| | |
214
| |
Business Advisory
| |
28
| | |
26
| |
Education
| |
40
|
| |
35
|
|
Total
| |
296
| | |
275
| |
Revenue per full-time equivalent (in thousands): | | | | |
Healthcare
| |
$
|
123
| | |
$
|
134
| |
Business Advisory
| |
$
|
99
| | |
$
|
108
| |
Education
| |
$
|
149
| | |
$
|
138
| |
Total
| |
$
|
124
| | |
$
|
132
| |
|
| |
| |
HURON CONSULTING GROUP INC. |
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) |
(Unaudited) |
| | | |
|
| | | |
|
| | Nine Months Ended September 30, | | Percent Increase (Decrease) |
Segment and Consolidated Operating Results (in thousands): | | 2018 |
| 2017 | |
Healthcare: | | | | | | |
Revenues
| |
$
|
271,812
| | |
$
|
261,261
| | |
4.0
|
%
|
Operating income
| |
$
|
78,172
| | |
$
|
83,580
| | |
(6.5
|
)%
|
Segment operating income as a percentage of segment revenues
| |
28.8
|
%
| |
32.0
|
%
| | |
Business Advisory: | | | | | | |
Revenues
| |
$
|
170,790
| | |
$
|
157,753
| | |
8.3
|
%
|
Operating income
| |
$
|
35,031
| | |
$
|
34,890
| | |
0.4
|
%
|
Segment operating income as a percentage of segment revenues
| |
20.5
|
%
| |
22.1
|
%
| | |
Education: | | | | | | |
Revenues
| |
$
|
147,069
| | |
$
|
127,629
| | |
15.2
|
%
|
Operating income
| |
$
|
37,694
| | |
$
|
31,772
| | |
18.6
|
%
|
Segment operating income as a percentage of segment revenues
| |
25.6
|
%
| |
24.9
|
%
| | |
Total Company: | | | | | | |
Revenues
| |
$
|
589,671
| | |
$
|
546,643
| | |
7.9
|
%
|
Reimbursable expenses
| |
59,648
|
| |
55,862
|
| |
6.8
|
%
|
Total revenues and reimbursable expenses | |
$
|
649,319
|
| |
$
|
602,505
|
| |
7.8
|
%
|
Statements of Operations reconciliation: | | | | | | |
Segment operating income
| |
$
|
150,897
| | |
$
|
150,242
| | |
0.4
|
%
|
Items not allocated at the segment level:
| | | | | | |
Other operating expenses
| |
94,585
| | |
92,643
| | |
2.1
|
%
|
Other gains, net
| |
(4,990
|
)
| |
(222
|
)
| |
N/M
|
Depreciation and amortization expense
| |
26,281
| | |
28,549
| | |
(7.9
|
)%
|
Goodwill impairment charge (1) | |
—
|
| |
209,600
|
| |
N/M
|
Total operating income (loss)
| |
35,021
| | |
(180,328
|
)
| |
N/M
|
Other expense, net
| |
(19,767
|
)
| |
(10,607
|
)
| |
86.4
|
%
|
Income (loss) from continuing operations before taxes | |
$
|
15,254
|
| |
$
|
(190,935
|
)
| |
N/M
|
Other Operating Data: | | | | | | |
Number of full-time billable consultants (at period end) (2): | | | | | | |
Healthcare
| |
829
| | |
761
| | |
8.9
|
%
|
Business Advisory
| |
775
| | |
830
| | |
(6.6
|
)%
|
Education
| |
618
|
| |
536
|
| |
15.3
|
%
|
Total
| |
2,222
| | |
2,127
| | |
4.5
|
%
|
Average number of full-time billable consultants (for the period)
(2): | | | | | | |
Healthcare
| |
802
| | |
805
| | | |
Business Advisory
| |
761
| | |
710
| | | |
Education
| |
579
|
| |
497
|
| | |
Total
| |
2,142
| | |
2,012
| | | |
|
| |
HURON CONSULTING GROUP INC. |
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) |
(Unaudited) |
| |
|
| |
|
| | Nine Months Ended |
| | September 30, |
Other Operating Data (continued): | | 2018 |
| 2017 |
Full-time billable consultant utilization rate (3): | | | | |
Healthcare
| |
81.6
|
%
| |
76.6
|
%
|
Business Advisory
| |
71.7
|
%
| |
73.2
|
%
|
Education
| |
76.8
|
%
| |
73.6
|
%
|
Total
| |
76.8
|
%
| |
74.6
|
%
|
Full-time billable consultant average billing rate per hour (4): | | | | |
Healthcare
| |
$
|
205
| | |
$
|
200
| |
Business Advisory (5) | |
$
|
212
| | |
$
|
207
| |
Education
| |
$
|
203
| | |
$
|
215
| |
Total (5) | |
$
|
207
| | |
$
|
206
| |
Revenue per full-time billable consultant (in thousands): | | | | |
Healthcare
| |
$
|
229
| | |
$
|
211
| |
Business Advisory
| |
$
|
214
| | |
$
|
212
| |
Education
| |
$
|
222
| | |
$
|
226
| |
Total
| |
$
|
222
| | |
$
|
215
| |
Average number of full-time equivalents (for the period) (6): | | | | |
Healthcare
| |
215
| | |
215
| |
Business Advisory
| |
23
| | |
21
| |
Education
| |
41
|
| |
36
|
|
Total
| |
279
| | |
272
| |
Revenue per full-time equivalent (in thousands): | | | | |
Healthcare
| |
$
|
409
| | |
$
|
427
| |
Business Advisory
| |
$
|
355
| | |
$
|
342
| |
Education
| |
$
|
447
| | |
$
|
419
| |
Total
| |
$
|
410
| | |
$
|
420
| |
|
|
|
|
(1)
|
|
The non-cash goodwill impairment charge is not allocated at the
segment level because the underlying goodwill asset is reflective of
our corporate investment in the segments. We do not include the
impact of goodwill impairment charges in our evaluation of segment
performance.
|
| | | | | |
|
| | | |
(2)
| |
Consists of full-time professionals who provide consulting services
and generate revenues based on the number of hours worked.
|
| | | | | |
|
| | | |
(3)
| |
Utilization rate for full-time billable consultants is calculated by
dividing the number of hours full-time billable consultants worked
on client assignments during a period by the total available working
hours for these consultants during the same period, assuming a
forty-hour work week, less paid holidays and vacation days.
|
| | | | | |
|
| | | |
(4)
| |
Average billing rate per hour for 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.
|
| | | | | |
|
| | | |
(5)
| |
Beginning in the third quarter of 2018, the average billing rate per
hour excludes the number of hours charged on internal assignments by
consultants within Huron Eurasia India to provide a more meaningful
average billing rate charged to external clients. Prior year periods
have been revised for consistent presentation.
|
| | | | | |
|
| | | | | |
Absent the hours worked by the Huron Eurasia India consultants on
internal assignments, the average billing rate per hour for
Business Advisory for the first, second, and third quarters of
2018 were $209, $215, and $213, respectively; compared to $209,
$203, and $209 for the same prior year periods. The average
billing rate per hour for Business Advisory for both the six
months ended June 30, 2018 and the nine months ended September 30,
2018 was $212, compared to $206 and $207 for the six months ended
June 30, 2017 and the nine months ended September 30, 2017,
respectively.
|
| | | | | |
|
| | | | | |
Absent the hours worked by the Huron Eurasia India consultants on
internal assignments, Huron's consolidated average billing rate
per hour for the first, second, and third quarters of 2018 were
$206, $205, and $210, respectively; compared to $219, $199, and
$202 for the same prior year periods. Huron's consolidated average
billing rate per hour for the six months ended June 30, 2018 and
the nine months ended September 30, 2018 was $205 and $207,
respectively; compared to $209 and $206 for the same prior year
periods.
|
| | | | | |
|
| | | |
(6)
| |
Consists of cultural transformation consultants within the Studer
Group solution, which include coaches and their support staff,
consultants who work variable schedules as needed by clients, and
full-time employees who provide software support and maintenance
services to clients.
|
|
N/M - Not Meaningful
|
|
| |
| |
HURON CONSULTING GROUP INC. |
RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION (7) |
(In thousands) |
(Unaudited) |
| | | |
|
| | | |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
Revenues | |
$
|
198,448
|
| |
$
|
176,376
|
| |
$
|
589,671
|
| |
$
|
546,643
|
|
Net income (loss) from continuing operations
| |
$
|
8,249
| | |
$
|
4,132
| | |
$
|
10,889
| | |
$
|
(141,195
|
)
|
Add back:
| | | | | | | | |
Income tax expense (benefit)
| |
1,391
| | |
(1,984
|
)
| |
4,365
| | |
(49,740
|
)
|
Interest expense, net of interest income
| |
4,628
| | |
4,880
| | |
14,636
| | |
13,811
| |
Depreciation and amortization
| |
9,570
|
| |
12,603
|
| |
29,476
|
| |
36,937
|
|
Earnings (loss) before interest, taxes, depreciation and
amortization (EBITDA) (7) | |
23,838
| | |
19,631
| | |
59,366
| | |
(140,187
|
)
|
Add back:
| | | | | | | | |
Restructuring charges
| |
(31
|
)
| |
1,347
| | |
2,665
| | |
5,295
| |
Other losses (gains), net
| |
887
| | |
880
| | |
(4,990
|
)
| |
(222
|
)
|
Goodwill impairment charge
| |
—
| | |
—
| | |
—
| | |
209,600
| |
Loss (gain) on sale of businesses
| |
32
| | |
—
| | |
5,863
| | |
(931
|
)
|
Foreign currency transaction losses (gains), net
| |
9
|
| |
(385
|
)
| |
196
|
| |
(449
|
)
|
Adjusted EBITDA (7) | |
$
|
24,735
|
| |
$
|
21,473
|
| |
$
|
63,100
|
| |
$
|
73,106
|
|
Adjusted EBITDA as a percentage of revenues (7) | |
12.5
|
%
| |
12.2
|
%
| |
10.7
|
%
| |
13.4
|
%
|
|
| | | |
| | | |
HURON CONSULTING GROUP INC. |
RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (7) |
(In thousands, except per share amounts) |
(Unaudited) |
| | | | | | | |
|
| | | | | | | |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
|
| 2017 | | 2018 |
|
| 2017 |
Net income (loss) from continuing operations | |
$
|
8,249
|
| |
$
|
4,132
|
| |
$
|
10,889
|
| |
$
|
(141,195
|
)
|
Weighted average shares – diluted | |
22,110
| | |
21,622
| | |
21,947
| | |
21,413
| |
Diluted earnings (loss) per share from continuing operations | |
$
|
0.37
|
| |
$
|
0.19
|
| |
$
|
0.50
|
| |
$
|
(6.59
|
)
|
Add back:
| | | | | | | | | | | | |
Restructuring charges
| |
(31
|
)
| |
1,347
| | |
2,665
| | |
5,295
| |
Other losses (gains), net
| |
887
| | |
880
| | |
(4,990
|
)
| |
(222
|
)
|
Amortization of intangible assets
| |
5,934
| | |
8,834
| | |
18,233
| | |
26,432
| |
Goodwill impairment charge
| |
—
| | |
—
| | |
—
| | |
209,600
| |
Non-cash interest on convertible notes
| |
2,070
| | |
1,974
| | |
6,138
| | |
5,853
| |
Loss (gain) on sale of businesses
| |
32
| | |
—
| | |
5,863
| | |
(931
|
)
|
Tax effect
| |
(2,312
|
)
| |
(5,100
|
)
| |
(7,109
|
)
| |
(70,362
|
)
|
Tax benefit related to the enactment of Tax Cut and Jobs Act of 2017
| |
(747
|
)
| |
—
| | |
(615
|
)
| |
—
| |
Tax benefit related to "check-the-box" election
| |
—
|
| |
(2,748
|
)
| |
—
|
| |
(2,748
|
)
|
Total adjustments, net of tax
| |
5,833
|
| |
5,187
|
| |
20,185
|
| |
172,917
|
|
Adjusted net income from continuing operations (7) | |
$
|
14,082
|
| |
$
|
9,319
|
| |
$
|
31,074
|
| |
$
|
31,722
|
|
Adjusted weighted average shares - diluted (8) | |
22,110
| | |
21,622
| | |
21,947
| | |
21,585
| |
Adjusted diluted earnings per share from continuing operations (7) | |
$
|
0.64
|
| |
$
|
0.43
|
| |
$
|
1.42
|
| |
$
|
1.47
|
|
(7)
|
|
In evaluating the company’s financial performance and outlook,
management uses earnings (loss) 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. Management uses these
non-GAAP financial measures to gain an understanding of the
company's 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
the company's ongoing business in a manner that allows for
meaningful period-to-period comparisons. Management also uses these
non-GAAP financial measures when publicly providing the company's
business outlook, for internal management purposes, and as a basis
for evaluating potential acquisitions and dispositions. Management
believes 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.
|
| |
|
(8)
| |
As the company reported a net loss for the nine months ended
September 30, 2017, GAAP diluted weighted average shares outstanding
equals the basic weighted average shares outstanding for that
period. The non-GAAP adjustments described above resulted in
adjusted net income from continuing operations for that period.
Therefore, dilutive common stock equivalents have been included in
the calculation of adjusted diluted weighted average shares
outstanding.
|
|
| |
HURON CONSULTING GROUP INC. |
RECONCILIATION OF NON-GAAP MEASURES FOR FULL YEAR 2018 OUTLOOK |
|
RECONCILIATION OF NET INCOME |
TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION (9) |
(In millions) |
(Unaudited) |
| |
|
| |
|
| | Year Ending |
| | December 31, 2018 |
| | Guidance Range |
| | Low |
| High |
Projected revenues - GAAP | |
$
|
775.0
|
| |
$
|
790.0
|
|
Projected net income - GAAP | |
$
|
18.0
| | |
$
|
22.0
| |
Add back:
| | | | |
Income tax expense
| |
8.0
| | |
10.0
| |
Interest expense, net of interest income
| |
19.0
| | |
19.0
| |
Depreciation and amortization
| |
39.0
|
| |
39.0
|
|
Projected earnings before interest, taxes, depreciation and
amortization (EBITDA) (9) | |
84.0
| | |
90.0
| |
Add back:
| | | | |
Restructuring charges
| |
3.0
| | |
3.0
| |
Other gains, net
| |
(5.0
|
)
| |
(5.0
|
)
|
Loss on sale of business
| |
6.0
|
| |
6.0
|
|
Projected adjusted EBITDA (9) | |
$
|
88.0
|
| |
$
|
94.0
|
|
Projected adjusted EBITDA as a percentage of projected revenues(9) | |
11.4
|
%
| |
11.9
|
%
|
|
| |
RECONCILIATION OF NET INCOME |
TO ADJUSTED NET INCOME (9) |
(In millions, except per share amounts) |
(Unaudited) |
| |
|
| |
|
| | Year Ending |
| | December 31, 2018 |
| | Guidance Range |
| | Low |
| High |
Projected net income - GAAP | |
$
|
18.0
|
| |
$
|
22.0
|
|
Projected diluted earnings per share - GAAP | |
$
|
0.82
|
| |
$
|
0.98
|
|
Add back:
| | | | |
Restructuring charges
| |
3.0
| | |
3.0
| |
Other gains, net
| |
(5.0
|
)
| |
(5.0
|
)
|
Amortization of intangible assets
| |
24.0
| | |
24.0
| |
Non-cash interest on convertible notes
| |
8.0
| | |
8.0
| |
Loss on sale of business
| |
6.0
| | |
6.0
| |
Tax effect
| |
(10.0
|
)
| |
(10.0
|
)
|
Total adjustments, net of tax
| |
26.0
|
| |
26.0
|
|
Projected adjusted net income (9) | |
$
|
44.0
|
| |
$
|
48.0
|
|
Projected adjusted diluted earnings per share (9) | |
$
|
2.02
|
| |
$
|
2.18
|
|
(9)
|
|
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: https://www.businesswire.com/news/home/20181030005968/en/
Contacts:
Huron
MEDIA CONTACT
Sarah McHugh
312-880-2624
smchugh@huronconsultinggroup.com
or
INVESTOR
CONTACT
John D. Kelly
312-583-8722
investor@huronconsultinggroup.com
Source: Huron
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