EXHIBIT 99.1
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| News | |  |
FOR IMMEDIATE RELEASE
July 27, 2011
Huron Consulting Group Announces
Second Quarter 2011 Financial Results
| | • | | Revenues increased 17.2% to $159.0 million for Q2 2011 compared to $135.7 million in Q2 2010; and increased sequentially from $143.0 million in Q1 2011. |
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| | • | | Diluted earnings per share from continuing operations for Q2 2011 rose 158.8% to $0.44 compared to $0.17 in Q2 2010. |
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| | • | | Adjusted diluted earnings per share from continuing operations(5), a non-GAAP measure, rose 23.4% to $0.58 in Q2 2011 compared to $0.47 in Q2 2010. |
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| | • | | Average number of full-time billable consultants(1) rose 12.0% to 1,171 for Q2 2011 compared to 1,046 for Q2 2010. Average number of full-time equivalent professionals(4) totaled 1,195 for Q2 2011 compared to 941 in the same period last year. |
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| | • | | Company narrows full year 2011 revenue guidance to a range of $600.0 million to $620.0 million. |
CHICAGO — July 27, 2011 — Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business consulting services, today announced financial results for the second quarter ended June 30, 2011.
“Huron’s strong performance during the second quarter is reflective of how well our services are positioned in our key markets. Our great reputation in the health and education sectors enables us to be a leader in providing services to our hospital and university clients, who are dealing with significant and ongoing changes to their business environment. Our e-discovery business benefitted from our continued and successful focus on global corporations with complex document management needs,” said James H. Roth, chief executive officer and president, Huron Consulting Group. “The events driving our business are well-documented in the news every day, and we are confident that we are strategically prepared to assist our clients as their financial, operational, and regulatory environment continues to evolve.”
Second Quarter 2011 Results
Revenues for the second quarter of 2011 were $159.0 million, an increase of 17.2% compared to $135.7 million for the second quarter of 2010. The Company’s second quarter 2011 operating income was $22.8 million, an increase of 138.7% compared to $9.6 million in the second quarter of 2010. Net income from continuing operations rose 169.4% to $9.5 million, or diluted earnings per share of $0.44, for the second quarter of 2011 compared to $3.5 million, or $0.17 per diluted share, for the same period last year. Net income was $9.5 million, or $0.44 per diluted share, for the second quarter of 2011, an increase of 298.7% compared to $2.4 million, or $0.11 per diluted share, for the same period last year.
Second quarter 2011 earnings before interest, taxes, depreciation and amortization (“EBITDA”)(5) rose 87.0% to $28.6 million, or 18.0% of revenues, compared to $15.3 million, or 11.3% of revenues, in the comparable quarter last year.
In evaluating the Company’s financial performance, management uses non-GAAP financial measures, which exclude the effect of the following items (in thousands):
| | | | | | | | | |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2011 | | | 2010 | |
| Amortization of intangible assets | | $ | 2,125 | | | $ | 1,879 | |
| Restatement related expenses | | $ | 1,785 | | | $ | 2,428 | |
| Restructuring charges | | $ | 461 | | | $ | 1,165 | |
| Litigation settlement | | $ | 508 | | | $ | 4,764 | |
| Tax effect | | $ | (1,952 | ) | | $ | (4,094 | ) |
Adjusted EBITDA(5) rose 32.6% to $31.3 million, or 19.7% of revenues, in the second quarter of 2011, compared to $23.6 million, or 17.4% of revenues, in the comparable quarter last year. Adjusted Net Income(5) from continuing operations was $12.4 million, or $0.58 per diluted share, for the second quarter of 2011 compared to $9.7 million, or $0.47 per diluted share, for the comparable period in 2010.
The average number of full-time billable consultants(1) was 1,171 in the second quarter of 2011 compared to 1,046 in the same quarter last year. Full-time billable consultant utilization rate was 71.9% during the second quarter of 2011 compared with 73.0% during the same period last year. Average billing rate per hour for full-time billable consultants was $269 for the second quarter of 2011 compared to $243 for the second quarter of 2010. The average number of full-time equivalent professionals(4) totaled 1,195 in the second quarter of 2011 compared to 941 for the comparable period in 2010.
Year-to-Date Results
Revenues for the first six months of 2011 rose 14.7% to $302.0 million compared to $263.4 million for the first half of 2010. The Company’s operating income for the first six months of 2011 was $34.5 million, an increase of 102.7% compared to $17.0 million in the first six months of 2010. Net income from continuing operations was $13.4 million, or $0.63 per diluted share, for the first six months of 2011 compared to $6.2 million, or $0.30 per diluted share, for the same period last year. Net income was $13.5 million, or $0.63 per diluted share, for the first half of 2011 compared to $4.9 million, or $0.24 per diluted share, for the same period last year.
EBITDA(5) was $46.0 million, or 15.2% of revenues, for the first half of 2011, compared to $28.2 million, or 10.7% of revenues, for the same period in 2010.
In evaluating the Company’s financial performance, management uses non-GAAP financial measures, which exclude the effect of the following items (in thousands):
| | | | | | | | | |
| | | Six Months Ended | |
| | | June 30, | |
| | | 2011 | | | 2010 | |
| Amortization of intangible assets | | $ | 4,401 | | | $ | 3,757 | |
| Restatement related expenses | | $ | 3,025 | | | $ | 3,187 | |
| Restructuring charges | | $ | 985 | | | $ | 1,165 | |
| Litigation settlement | | $ | 1,096 | | | $ | 4,764 | |
| Tax effect | | $ | (3,803 | ) | | $ | (5,149 | ) |
Adjusted EBITDA(5) was $51.1 million, or 16.9% of revenues, in the first six months of 2011 compared to $37.4 million, or 14.2% of revenues, in the comparable period last year.
Adjusted net income from continuing operations(5) was $19.1 million, or $0.90 per diluted share, for the first half of 2011 compared to $13.9 million, or $0.67 per diluted share, for the comparable period in 2010.
Reconciliations of the aforementioned non-GAAP financial measures to comparable GAAP measures are provided in the financial schedules accompanying this news release.
The average number of full-time billable consultants(1) was 1,153 in the first half of 2011 compared to 1,056 in the same period last year. Full-time billable consultant utilization rate was 74.9% during the first half of 2011 compared with 69.7% during the same period last year. Average billing rate per hour for full-time billable consultants was $246 for the first half of 2011 compared to $240 for the first half of 2010. The average number of full-time equivalent professionals(4) increased 21.6% to 1,138 in the first half of 2011 from 936 in the comparable period of 2010.
Operating Segments
Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges. The Company has three operating segments: Health and Education Consulting; Legal Consulting; and Financial Consulting, representing 65.2%, 25.6%, and 9.2% of year-to-date total revenues, respectively.
Financial results by segment are included in the attached schedules and in Huron’s forthcoming Form 10-Q filing for the quarter ended June 30, 2011.
Outlook for 2011
Based on currently available information, the Company narrowed guidance for full year 2011, including revenues before reimbursable expenses, to a range of $600.0 million to $620.0 million. The Company also anticipates EBITDAin a range of $97.5 million to $103.5 million, Adjusted EBITDA in a range of $105.5 million to $111.5 million, GAAP diluted earnings per share in a range of $1.60 to $1.75, and non-GAAP adjusted diluted earnings per share in a range of $2.05 to $2.20.
Second Quarter 2011 Webcast
The Company will host a webcast to discuss its financial results tomorrow, July 28, 2011, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). The conference call is being webcast by Thomson 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.
About Huron Consulting Group
Huron Consulting Group helps clients in diverse industries improve performance, comply with complex regulations, reduce costs, recover from distress, leverage technology, and stimulate growth. The Company teams with its clients to deliver sustainable and measurable results. Huron provides services to a wide variety of both financially sound and distressed organizations, including leading academic institutions, healthcare organizations, Fortune 500 companies, medium-sized businesses, and the law firms that represent these various organizations. Learn more at www.huronconsultinggroup.com.
Use of Non-GAAP Financial Measures(5)
In evaluating the Company’s financial performance and outlook, management uses EBITDA, Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Management believes that such measures, as supplements to operating income, net income from continuing operations and diluted earnings per share from continuing operations and other GAAP measures are useful indicators for investors. These useful indicators can help readers gain a meaningful understanding of our core operating results and future prospects without the effect of non-cash or other one-time items and the Company’s ability to generate cash flows from operations that are available for taxes, capital expenditures, and to repay debt. 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.
Statements in this press release, including the information incorporated by reference herein, 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 (the “Exchange Act”) 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,” “meets,” “could,” “intends,” “might,” “predicts,” “seeks,” “would,” “believes,” “estimates” or “continues”. Risks, uncertainties and assumptions that could impact the Company’s forward-looking statements relate, among other things, to (i) the restatement, (ii) the Securities and Exchange Commission (“SEC”) investigation with respect to the restatement and the related purported private shareholder class action lawsuit and derivative lawsuits, and (iii) the request by the United States Attorney’s Office (“USAO”) for the Northern District of Illinois for certain documents. In addition, these forward-looking statements reflect our current expectation about our future requirements and needs, results, levels of activity, performance, or achievements, including, without limitation, that our business continues to grow at the current expectations with respect to, among other factors, utilization rates, billing rates, and the number of revenue-generating professionals; that we are able to expand our service offerings; that we successfully integrate the businesses we acquire; and that existing market conditions continue to trend upward. These 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 full year ended December 31, 2010 and in our Quarterly Report on Form 10-Q for the period ended June 30, 2011 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.
Media Contact:
Jennifer Frost Hennagir
312-880-3260
jfrost-hennagir@huronconsultinggroup.com
Investor Contact:
C. Mark Hussey
or
Ellen Wong
312-583-8722
investor@huronconsultinggroup.com
###
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| | | |
Revenues and reimbursable expenses: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 159,035 | | | $ | 135,654 | | | $ | 302,020 | | | $ | 263,396 | |
| Reimbursable expenses | | | 14,470 | | | | 12,490 | | | | 27,572 | | | | 23,989 | |
| | | | | | | | | | | | | |
| Total revenues and reimbursable expenses | | | 173,505 | | | | 148,144 | | | | 329,592 | | | | 287,385 | |
| | | | | | | | | | | | | |
Direct costs and reimbursable expenses(exclusive of depreciation and amortization shown in operating expenses): | | | | | | | | | | | | | | | | |
| Direct costs | | | 95,503 | | | | 83,033 | | | | 188,562 | | | | 167,944 | |
| Intangible assets amortization | | | 1,369 | | | | 887 | | | | 2,802 | | | | 1,773 | |
| Reimbursable expenses | | | 14,573 | | | | 12,443 | | | | 27,815 | | | | 23,995 | |
| | | | | | | | | | | | | |
| Total direct costs and reimbursable expenses | | | 111,445 | | | | 96,363 | | | | 219,179 | | | | 193,712 | |
| | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | | 32,086 | | | | 29,024 | | | | 62,144 | | | | 58,092 | |
| Restructuring charge | | | 461 | | | | 1,165 | | | | 985 | | | | 1,165 | |
| Restatement related expenses | | | 1,785 | | | | 2,428 | | | | 3,025 | | | | 3,187 | |
| Litigation settlement, net | | | 508 | | | | 4,764 | | | | 1,096 | | | | 4,764 | |
| Depreciation and amortization | | | 4,394 | | | | 4,839 | | | | 8,699 | | | | 9,466 | |
| | | | | | | | | | | | | |
| Total operating expenses | | | 39,234 | | | | 42,220 | | | | 75,949 | | | | 76,674 | |
| | | | | | | | | | | | | |
| Operating income | | | 22,826 | | | | 9,561 | | | | 34,464 | | | | 16,999 | |
Other income (expense): | | | | | | | | | | | | | | | | |
| Interest (expense), net of interest income | | | (3,535 | ) | | | (3,553 | ) | | | (7,107 | ) | | | (6,508 | ) |
| Other income (expense) | | | (65 | ) | | | (464 | ) | | | 39 | | | | (218 | ) |
| | | | | | | | | | | | | |
| Total other expense | | | (3,600 | ) | | | (4,017 | ) | | | (7,068 | ) | | | (6,726 | ) |
| | | | | | | | | | | | | |
| Income from continuing operations before income tax expense | | | 19,226 | | | | 5,544 | | | | 27,396 | | | | 10,273 | |
| Income tax expense | | | 9,760 | | | | 2,030 | | | | 13,969 | | | | 4,078 | |
| | | | | | | | | | | | | |
| Net income from continuing operations | | | 9,466 | | | | 3,514 | | | | 13,427 | | | | 6,195 | |
| Income (loss) from discontinued operations, net of tax | | | 3 | | | | (1,139 | ) | | | 98 | | | | (1,306 | ) |
| | | | | | | | | | | | | |
| Net income | | $ | 9,469 | �� | | $ | 2,375 | | | $ | 13,525 | | | $ | 4,889 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net earnings (loss) per basic share: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.45 | | | $ | 0.17 | | | $ | 0.64 | | | $ | 0.30 | |
| Loss from discontinued operations, net of tax | | $ | — | | | $ | (0.05 | ) | | $ | — | | | $ | (0.06 | ) |
| | | | | | | | | | | | | |
| Net income | | $ | 0.45 | | | $ | 0.12 | | | $ | 0.64 | | | $ | 0.24 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net earnings (loss) per diluted share: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.44 | | | $ | 0.17 | | | $ | 0.63 | | | $ | 0.30 | |
| Loss from discontinued operations, net of tax | | $ | — | | | $ | (0.06 | ) | | $ | — | | | $ | (0.06 | ) |
| | | | | | | | | | | | | |
| Net income | | $ | 0.44 | | | $ | 0.11 | | | $ | 0.63 | | | $ | 0.24 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares used in calculating earnings (loss) per share: | | | | | | | | | | | | | | | | |
| Basic | | | 21,190 | | | | 20,534 | | | | 21,058 | | | | 20,416 | |
| Diluted | | | 21,476 | | | | 20,756 | | | | 21,316 | | | | 20,627 | |
HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
| | | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2011 | | | 2010 | |
| |
Assets | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 3,258 | | | $ | 6,271 | |
| Receivables from clients, net | | | 86,045 | | | | 91,389 | |
| Unbilled services, net | | | 49,335 | | | | 33,076 | |
| Income tax receivable | | | 8,514 | | | | 4,896 | |
| Deferred income taxes | | | 10,223 | | | | 19,853 | |
| Insurance recovery receivable | | | — | | | | 27,000 | |
| Prepaid expenses and other current assets | | | 13,623 | | | | 15,653 | |
| Current assets of discontinued operations | | | — | | | | 2,476 | |
| | | | | | | |
| Total current assets | | | 170,998 | | | | 200,614 | |
| Property and equipment, net | | | 33,222 | | | | 32,935 | |
| Deferred income taxes | | | 7,176 | | | | 12,440 | |
| Other non-current assets | | | 13,968 | | | | 10,575 | |
| Intangible assets, net | | | 21,890 | | | | 26,205 | |
| Goodwill | | | 506,764 | | | | 506,214 | |
| | | | | | | |
| Total assets | | $ | 754,018 | | | $ | 788,983 | |
| | | | | | | |
| | | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 10,320 | | | $ | 8,310 | |
| Accrued expenses | | | 33,299 | | | | 28,849 | |
| Accrued payroll and related benefits | | | 32,816 | | | | 45,184 | |
| Accrued consideration for business acquisitions, current portion | | | 2,914 | | | | 25,013 | |
| Accrued litigation settlement | | | — | | | | 39,552 | |
| Income tax payable | | | 112 | | | | 451 | |
| Deferred revenues | | | 22,771 | | | | 18,069 | |
| Current portion of capital lease obligations | | | 25 | | | | 32 | |
| Current liabilities of discontinued operations | | | — | | | | 699 | |
| | | | | | | |
| Total current liabilities | | | 102,257 | | | | 166,159 | |
| Non-current liabilities: | | | | | | | | |
| Deferred compensation and other liabilities | | | 5,476 | | | | 6,282 | |
| Accrued consideration for business acquisitions, net of current portion | | | 2,914 | | | | 3,847 | |
| Capital lease obligations, net of current portion | | | 5 | | | | — | |
| Bank borrowings | | | 254,000 | | | | 257,000 | |
| Deferred lease incentives | | | 6,562 | | | | 7,323 | |
| | | | | | | |
| Total non-current liabilities | | | 268,957 | | | | 274,452 | |
| | | | | | | | | |
Stockholders’ equity | | | | | | | | |
| Common stock; $0.01 par value; 500,000,000 shares authorized; 24,178,734 and 23,221,287 shares issued at June 30, 2011 and December 31, 2010, respectively | | | 232 | | | | 222 | |
| Treasury stock, at cost, 1,547,025 and 1,343,201 shares at June 30, 2011 and December 31, 2010, respectively | | | (72,388 | ) | | | (65,675 | ) |
| Additional paid-in capital | | | 390,102 | | | | 363,402 | |
| Retained earnings | | | 65,908 | | | | 52,383 | |
| Accumulated other comprehensive loss | | | (1,050 | ) | | | (1,960 | ) |
| | | | | | | |
| Total stockholders’ equity | | | 382,804 | | | | 348,372 | |
| | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 754,018 | | | $ | 788,983 | |
| | | | | | | |
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | | |
| | | Six Months Ended | |
| | | June 30, | |
| | | 2011 | | | 2010 | |
| |
Cash flows from operating activities: | | | | | | | | |
| Net income | | $ | 13,525 | | | $ | 4,889 | |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | | |
| Depreciation and amortization | | | 11,501 | | | | 11,341 | |
| Share-based compensation | | | 9,694 | | | | 12,060 | |
| Allowances for doubtful accounts and unbilled services | | | 1,685 | | | | 481 | |
| Deferred income taxes | | | 13,023 | | | | 737 | |
| Gain on disposal of property and equipment | | | (46 | ) | | | — | |
| Non-cash portion of litigation settlement | | | 1,096 | | | | — | |
| Changes in operating assets and liabilities, net of businesses acquired: | | | | | | | | |
| Decrease in receivables from clients | | | 7,941 | | | | 6,397 | |
| Increase in unbilled services | | | (18,933 | ) | | | (7,459 | ) |
| (Increase) decrease in current income tax receivable, net | | | (4,247 | ) | | | 6,737 | |
| Decrease (increase) in other assets | | | 717 | | | | (1,742 | ) |
| Increase in accounts payable and accrued liabilities | | | 516 | | | | 911 | |
| Decrease in accrued payroll and related benefits | | | (9,122 | ) | | | (47,728 | ) |
| Increase (decrease) in deferred revenues | | | 4,700 | | | | (624 | ) |
| | | | | | | |
| Net cash provided by (used in) operating activities | | | 32,050 | | | | (14,000 | ) |
| | | | | | | |
| | | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
| Purchases of property and equipment, net | | | (6,193 | ) | | | (2,489 | ) |
| Net (investment in) surrender of life insurance policies | | | (618 | ) | | | 651 | |
| Purchases of businesses | | | (23,881 | ) | | | (63,229 | ) |
| Sale of business | | | — | | | | 3,692 | |
| | | | | | | |
| Net cash used in investing activities | | | (30,692 | ) | | | (61,375 | ) |
| | | | | | | |
| | | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
| Proceeds from exercise of stock options | | | 219 | | | | 39 | |
| Shares redeemed for employee tax withholdings | | | (2,531 | ) | | | (1,299 | ) |
| Tax benefit from share-based compensation | | | 200 | | | | 360 | |
| Proceeds from borrowings under credit facility | | | 168,500 | | | | 232,000 | |
| Repayments on credit facility | | | (171,500 | ) | | | (158,000 | ) |
| Payments of capital lease obligations | | | (45 | ) | | | (148 | ) |
| | | | | | | |
| Net cash (used in) provided by financing activities | | | (5,157 | ) | | | 72,952 | |
| | | | | | | |
| | | | | | | | | |
| Effect of exchange rate changes on cash | | | 710 | | | | (63 | ) |
| | | | | | | | | |
| Net decrease in cash and cash equivalents | | | (3,089 | ) | | | (2,486 | ) |
Cash and cash equivalents at beginning of the period(*) | | | 6,347 | | | | 6,459 | |
| | | | | | | |
Cash and cash equivalents at end of the period(**) | | $ | 3,258 | | | $ | 3,973 | |
| | | | | | | |
Supplemental disclosure of cash flow information: | | | | | | | | |
| Non-cash financing activities: | | | | | | | | |
| Issuance of common stock in connection with settlement of class action lawsuit | | $ | 13,648 | | | $ | — | |
| | |
| (*) | | Cash and cash equivalents presented herein includes $0.1 million and $0.7 million of cash and cash equivalents classified as discontinued operations as of December 31, 2010, and 2009, respectively. |
| |
| (**) | | Cash and cash equivalents presented herein includes $0 million and $0.9 million of cash and cash equivalents classified as discontinued operations as of June 30, 2011 and 2010, respectively. |
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
| | | | | | | | | | | | | |
| | | Three Months Ended | | | Percent | |
| | | June 30, | | | Increase | |
| Segment and Consolidated Operating Results (in thousands): | | 2011 | | | 2010 | | | (Decrease) | |
| |
Health and Education Consulting: | | | | | | | | | | | | |
| Revenues | | $ | 105,860 | | | $ | 83,782 | | | | 26.4 | % |
| Operating income | | $ | 37,764 | | | $ | 28,799 | | | | 31.1 | % |
| Segment operating income as a percent of segment revenues | | | 35.7 | % | | | 34.4 | % | | | | |
Legal Consulting: | | | | | | | | | | | | |
| Revenues | | $ | 39,972 | | | $ | 33,951 | | | | 17.7 | % |
| Operating income | | $ | 9,629 | | | $ | 9,302 | | | | 3.5 | % |
| Segment operating income as a percent of segment revenues | | | 24.1 | % | | | 27.4 | % | | | | |
Financial Consulting: | | | | | | | | | | | | |
| Revenues | | $ | 13,203 | | | $ | 17,921 | | | | (26.3 | %) |
| Operating income | | $ | 2,454 | | | $ | 4,961 | | | | (50.5 | %) |
| Segment operating income as a percent of segment revenues | | | 18.6 | % | | | 27.7 | % | | | | |
Total Company: | | | | | | | | | | | | |
| Revenues | | $ | 159,035 | | | $ | 135,654 | | | | 17.2 | % |
| Reimbursable expenses | | | 14,470 | | | | 12,490 | | | | 15.9 | % |
| | | | | | | | | | | |
Total revenues and reimbursable expenses | | $ | 173,505 | | | $ | 148,144 | | | | 17.1 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Statement of operations reconciliation: | | | | | | | | | | | | |
| Segment operating income | | $ | 49,847 | | | $ | 43,062 | | | | 15.8 | % |
| Charges not allocated at the segment level: | | | | | | | | | | | | |
| Other selling, general and administrative expenses | | | 22,627 | | | | 28,662 | | | | (21.1 | %) |
| Depreciation and amortization expense | | | 4,394 | | | | 4,839 | | | | (9.2 | %) |
| | | | | | | | | | | |
| Total operating income | | | 22,826 | | | | 9,561 | | | | 138.7 | % |
| Other expense, net | | | 3,600 | | | | 4,017 | | | | (10.4 | %) |
| | | | | | | | | | | |
Income from continuing operations before income tax expense | | $ | 19,226 | | | $ | 5,544 | | | | 246.8 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Other Operating Data: | | | | | | | | | | | | |
Number of full-time billable consultants (at period end) (1): | | | | | | | | | | | | |
| Health and Education Consulting | | | 977 | | | | 826 | | | | 18.3 | % |
| Legal Consulting | | | 115 | | | | 127 | | | | (9.4 | %) |
| Financial Consulting | | | 80 | | | | 82 | | | | (2.4 | %) |
| | | | | | | | | | | |
| Total | | | 1,172 | | | | 1,035 | | | | 13.2 | % |
Average number of full-time billable consultants (for the period)(1): | | | | | | | | | | | | |
| Health and Education Consulting | | | 966 | | | | 835 | | | | | |
| Legal Consulting | | | 123 | | | | 128 | | | | | |
| Financial Consulting | | | 82 | | | | 83 | | | | | |
| | | | | | | | | | | |
| Total | | | 1,171 | | | | 1,046 | | | | | |
Full-time billable consultant utilization rate(2): | | | | | | | | | | | | |
| Health and Education Consulting | | | 73.7 | % | | | 74.3 | % | | | | |
| Legal Consulting | | | 54.9 | % | | | 63.3 | % | | | | |
| Financial Consulting | | | 73.2 | % | | | 73.9 | % | | | | |
| Total | | | 71.9 | % | | | 73.0 | % | | | | |
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended |
| | | June 30, |
| Other Operating Data: | | 2011 | | | 2010 |
| |
Full-time billable consultant average billing rate per hour(3): | | | | | | | |
| Health and Education Consulting | | $ | 269 | | | $ | 240 |
| Legal Consulting | | $ | 231 | | | $ | 208 |
| Financial Consulting | | $ | 307 | | | $ | 303 |
| Total | | $ | 269 | | | $ | 243 |
Revenue per full-time billable consultant (in thousands): | | | | | | | |
| Health and Education Consulting | | $ | 97 | | | $ | 85 |
| Legal Consulting | | $ | 55 | | | $ | 59 |
| Financial Consulting | | $ | 108 | | | $ | 125 |
| Total | | $ | 94 | | | $ | 85 |
Average number of full-time equivalents (for the period)(4): | | | | | | | |
| Health and Education Consulting | | | 146 | | | | 157 |
| Legal Consulting | | | 973 | | | | 676 |
| Financial Consulting | | | 76 | | | | 108 |
| | | | | | |
| Total | | | 1,195 | | | | 941 |
Revenue per full-time equivalents (in thousands): | | | | | | | |
| Health and Education Consulting | | $ | 82 | | | $ | 83 |
| Legal Consulting | | $ | 34 | | | $ | 39 |
| Financial Consulting | | $ | 57 | | | $ | 70 |
| Total | | $ | 41 | | | $ | 50 |
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
| | | | | | | | | | | | | |
| | | Six Months Ended | | | Percent | |
| | | June 30, | | | Increase | |
| Segment and Consolidated Operating Results (in thousands): | | 2011 | | | 2010 | | | (Decrease) | |
| |
Health and Education Consulting: | | | | | | | | | | | | |
| Revenues | | $ | 196,891 | | | $ | 160,696 | | | | 22.5 | % |
| Operating income | | $ | 64,131 | | | $ | 49,865 | | | | 28.6 | % |
| Segment operating income as a percent of segment revenues | | | 32.6 | % | | | 31.0 | % | | | | |
Legal Consulting: | | | | | | | | | | | | |
| Revenues | | $ | 77,289 | | | $ | 67,056 | | | | 15.3 | % |
| Operating income | | $ | 19,224 | | | $ | 16,721 | | | | 15.0 | % |
| Segment operating income as a percent of segment revenues | | | 24.9 | % | | | 24.9 | % | | | | |
Financial Consulting: | | | | | | | | | | | | |
| Revenues | | $ | 27,840 | | | $ | 35,644 | | | | (21.9 | %) |
| Operating income | | $ | 5,829 | | | $ | 9,479 | | | | (38.5 | %) |
| Segment operating income as a percent of segment revenues | | | 20.9 | % | | | 26.6 | % | | | | |
Total Company: | | | | | | | | | | | | |
| Revenues | | $ | 302,020 | | | $ | 263,396 | | | | 14.7 | % |
| Reimbursable expenses | | | 27,572 | | | | 23,989 | | | | 14.9 | % |
| | | | | | | | | | | |
Total revenues and reimbursable expenses | | $ | 329,592 | | | $ | 287,385 | | | | 14.7 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Statement of operations reconciliation: | | | | | | | | | | | | |
| Segment operating income | | $ | 89,184 | | | $ | 76,065 | | | | 17.2 | % |
| Charges not allocated at the segment level: | | | | | | | | | | | | |
| Other selling, general and administrative expenses | | | 46,021 | | | | 49,600 | | | | (7.2 | %) |
| Depreciation and amortization expense | | | 8,699 | | | | 9,466 | | | | (8.1 | %) |
| | | | | | | | | | | |
| Total operating income | | | 34,464 | | | | 16,999 | | | | 102.7 | % |
| Other expense, net | | | 7,068 | | | | 6,726 | | | | 5.1 | % |
| | | | | | | | | | | |
Income from continuing operations before income tax expense | | $ | 27,396 | | | $ | 10,273 | | | | 166.7 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Other Operating Data: | | | | | | | | | | | | |
Number of full-time billable consultants (at period end) (1): | | | | | | | | | | | | |
| Health and Education Consulting | | | 977 | | | | 826 | | | | 18.3 | % |
| Legal Consulting | | | 115 | | | | 127 | | | | (9.4 | %) |
| Financial Consulting | | | 80 | | | | 82 | | | | (2.4 | %) |
| | | | | | | | | | | |
| Total | | | 1,172 | | | | 1,035 | | | | 13.2 | % |
Average number of full-time billable consultants (for the period)(1): | | | | | | | | | | | | |
| Health and Education Consulting | | | 949 | | | | 841 | | | | | |
| Legal Consulting | | | 120 | | | | 133 | | | | | |
| Financial Consulting | | | 84 | | | | 82 | | | | | |
| | | | | | | | | | | |
| Total | | | 1,153 | | | | 1,056 | | | | | |
Full-time billable consultant utilization rate(2): | | | | | | | | | | | | |
| Health and Education Consulting | | | 77.3 | % | | | 71.2 | % | | | | |
| Legal Consulting | | | 55.4 | % | | | 59.1 | % | | | | |
| Financial Consulting | | | 73.3 | % | | | 70.8 | % | | | | |
| Total | | | 74.9 | % | | | 69.7 | % | | | | |
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
| | | | | | | | |
| | | Six Months Ended |
| | | June 30, |
| Other Operating Data: | | 2011 | | | 2010 |
| |
Full-time billable consultant average billing rate per hour(3): | | | | | | | |
| Health and Education Consulting | | $ | 241 | | | $ | 238 |
| Legal Consulting | | $ | 233 | | | $ | 200 |
| Financial Consulting | | $ | 317 | | | $ | 300 |
| Total | | $ | 246 | | | $ | 240 |
Revenue per full-time billable consultant (in thousands): | | | | | | | |
| Health and Education Consulting | | $ | 181 | | | $ | 162 |
| Legal Consulting | | $ | 110 | | | $ | 104 |
| Financial Consulting | | $ | 230 | | | $ | 241 |
| Total | | $ | 177 | | | $ | 160 |
Average number of full-time equivalents (for the period)(4): | | | | | | | |
| Health and Education Consulting | | | 148 | | | | 149 |
| Legal Consulting | | | 919 | | | | 671 |
| Financial Consulting | | | 71 | | | | 116 |
| | | | | | |
| Total | | | 1,138 | | | | 936 |
Revenue per full-time equivalents (in thousands): | | | | | | | |
| Health and Education Consulting | | $ | 169 | | | $ | 167 |
| Legal Consulting | | $ | 70 | | | $ | 79 |
| Financial Consulting | | $ | 120 | | | $ | 137 |
| Total | | $ | 86 | | | $ | 100 |
| | |
| (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 our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. |
| |
| (3) | | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. |
| |
| (4) | | Consists of consultants who work variable schedules as needed by our clients, as well as contract reviewers and other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. Also includes full-time employees who provide software support and maintenance services to our clients. |
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION(5)
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Revenues | | $ | 159,035 | | | $ | 135,654 | | | $ | 302,020 | | | $ | 263,396 | |
| | | | | | | | | | | | | |
| Net income from continuing operations | | $ | 9,466 | | | $ | 3,514 | | | $ | 13,427 | | | $ | 6,195 | |
| Add back: | | | | | | | | | | | | | | | | |
| Income tax expense | | | 9,760 | | | | 2,030 | | | | 13,969 | | | | 4,078 | |
| Interest and other expenses | | | 3,600 | | | | 4,017 | | | | 7,068 | | | | 6,726 | |
| Depreciation and amortization | | | 5,763 | | | | 5,726 | | | | 11,501 | | | | 11,239 | |
| | | | | | | | | | | | | |
Earnings before interest, taxes, depreciation and amortization (EBITDA)(5) | | | 28,589 | | | | 15,287 | | | | 45,965 | | | | 28,238 | |
| Add back: | | | | | | | | | | | | | | | | |
| Restatement related expenses | | | 1,785 | | | | 2,428 | | | | 3,025 | | | | 3,187 | |
| Restructuring charges | | | 461 | | | | 1,165 | | | | 985 | | | | 1,165 | |
| Litigation settlement | | | 508 | | | | 4,764 | | | | 1,096 | | | | 4,764 | |
| | | | | | | | | | | | | |
Adjusted EBITDA(5) | | $ | 31,343 | | | $ | 23,644 | | | $ | 51,071 | | | $ | 37,354 | |
| | | | | | | | | | | | | |
Adjusted EBITDA as a percentage of revenues(5) | | | 19.7 | % | | | 17.4 | % | | | 16.9 | % | | | 14.2 | % |
| | | | | | | | | | | | | |
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS(5)
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Net income from continuing operations | | $ | 9,466 | | | $ | 3,514 | | | $ | 13,427 | | | $ | 6,195 | |
| | | | | | | | | | | | | |
Weighted average shares — diluted | | | 21,476 | | | | 20,756 | | | | 21,316 | | | | 20,627 | |
Diluted earnings per share from continuing operations | | $ | 0.44 | | | $ | 0.17 | | | $ | 0.63 | | | $ | 0.30 | |
| | | | | | | | | | | | | |
| Add back: | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 2,125 | | | | 1,879 | | | | 4,401 | | | | 3,757 | |
| Restatement related expenses | | | 1,785 | | | | 2,428 | | | | 3,025 | | | | 3,187 | |
| Restructuring charges | | | 461 | | | | 1,165 | | | | 985 | | | | 1,165 | |
| Litigation settlement | | | 508 | | | | 4,764 | | | | 1,096 | | | | 4,764 | |
| Tax effect | | | (1,952 | ) | | | (4,094 | ) | | | (3,803 | ) | | | (5,149 | ) |
| | | | | | | | | | | | | |
| Total adjustments, net of tax | | | 2,927 | | | | 6,142 | | | | 5,704 | | | | 7,724 | |
| | | | | | | | | | | | | |
Adjusted net income from continuing operations(5) | | $ | 12,393 | | | $ | 9,656 | | | $ | 19,131 | | | $ | 13,919 | |
| | | | | | | | | | | | | |
Adjusted diluted earnings per share from continuing operations(5) | | $ | 0.58 | | | $ | 0.47 | | | $ | 0.90 | | | $ | 0.67 | |
| | | | | | | | | | | | | |
| | |
| (5) | | In evaluating the Company’s financial performance, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Our management uses these non-GAAP financial measures to gain an understanding of our comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision-making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. We believe that these non-GAAP financial measures provide useful information to investors and others (a) in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, (b) in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results and (c) in understanding the Company’s ability to generate cash flows from operations that are available for taxes, capital expenditures, and debt repayment. 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 2011 OUTLOOK
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS(6) TO
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION(6) (8)
(In millions)
(Unaudited)
| | | | | | | | | |
| | | Year Ending | |
| | | December 31, 2011 | |
| | | Guidance Range | |
| | | Low | | | High | |
| | | |
Projected revenues — GAAP | | $ | 600.0 | | | $ | 620.0 | |
| | | |
Projected net income from continuing operations — GAAP(6) | | $ | 34.5 | | | $ | 37.5 | |
| Add back: | | | | | | | | |
| Income tax expense | | | 28.0 | | | | 31.0 | |
| Interest and other expenses | | | 12.4 | | | | 12.4 | |
| Depreciation and amortization | | | 22.6 | | | | 22.6 | |
| | | |
Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (6) (8) | | | 97.5 | | | | 103.5 | |
| Add back: | | | | | | | | |
Restructuring and restatement related expenses(7) | | | 6.9 | | | | 6.9 | |
| Litigation settlement | | | 1.1 | | | | 1.1 | |
| | | |
Projected adjusted EBITDA(6) (8) | | $ | 105.5 | | | $ | 111.5 | |
| | | |
Projected adjusted EBITDA as a percentage of projected revenues(8) | | | 17.6 | % | | | 18.0 | % |
| | | |
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS(6)
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (6) (8)
(In millions)
(Unaudited)
| | | | | | | | | |
| | | Year Ending | |
| | | December 31, 2011 | |
| | | Guidance Range | |
| | | Low | | | High | |
| | | |
Projected net income from continuing operations — GAAP(6) | | $ | 34.5 | | | $ | 37.5 | |
| | | |
Projected diluted earnings per share from continuing operations — GAAP(6) | | $ | 1.60 | | | $ | 1.75 | |
| | | |
| Add back: | | | | | | | | |
| Amortization of intangible assets | | | 8.4 | | | | 8.4 | |
Restructuring and restatement related expenses(7) | | | 6.9 | | | | 6.9 | |
| Litigation settlement | | | 1.1 | | | | 1.1 | |
| Tax effect | | | (6.6 | ) | | | (6.6 | ) |
| | | |
| Total adjustments, net of tax | | | 9.8 | | | | 9.8 | |
Projected adjusted net income from continuing operations(6) (8). | | $ | 44.3 | | | $ | 47.3 | |
| | | |
Projected adjusted diluted earnings per share from continuing operations(6) (8) | | $ | 2.05 | | | $ | 2.20 | |
| | | |
| | |
| (6) | | Projected net income from continuing operations — GAAP, projected earnings before interest, taxes, depreciation and amortization (“EBITDA”), projected adjusted EBITDA, projected diluted earnings per share from continuing operations — GAAP, projected adjusted net income from continuing operations, and projected adjusted diluted earnings per share from continuing operations exclude (i) potential settlement costs, penalties, damages, administrative remedies, fines or liabilities for additional amounts (“Liabilities”) that may be incurred in connection with (A) the SEC investigations into the restatement and the allocation of time within a certain practice group, (B) the purported private shareholder class action and derivative lawsuits in respect of the restatement, and (C) the request by the USAO for the Northern District of Illinois for certain documents, which Liabilities cannot be estimated and could be material and (ii) other unanticipated costs and expenses in connection with the SEC investigations, the |
| | |
| | | purported private shareholder class action and derivative lawsuits, or the request by the USAO for the Northern District of Illinois for certain documents, which unanticipated costs and expenses could be material. See the Company’s Form 10-K for the year ended December 31, 2010 and Form 10-Q for the quarter ended March 31, 2011, filed on February 22, 2011 and April 26, 2011, respectively, as well as the Company’s Form 10-Q for the quarter ended June 30, 2011, which the Company intends to file on July 28, 2011, for additional information about the SEC investigations, purported private shareholder class action and derivative lawsuits and the USAO’s request for certain documents. |
| |
| (7) | | Restatement related expenses reflect costs expected to be incurred in connection with the restatement, the Company’s inquiries into the facts and circumstances underlying the restatement and the allocation of time within a certain practice group, the SEC investigations, the purported shareholder class action and derivative lawsuits and the USAO’s request for certain documents and do not include the potential Liabilities or unanticipated costs and expenses outlined in footnote (6), above. |
| |
| (8) | | 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 and the Company’s ability to generate cash flows from operations that are available for taxes, capital expenditures, and to repay debt. 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 GAAP. |
