Exhibit 99.1
FOR IMMEDIATE RELEASE
February 22, 2016
Huron Consulting Group Announces
Fourth Quarter and Full Year 2015 Financial Results from Continuing Operations
Fourth Quarter 2015 Highlights from Continuing Operations
| |
| • | Revenues increased 12.9% to $185.1 million in Q4 2015 from $163.9 million in Q4 2014. |
| |
| • | Operating income increased 69.7% to $36.7 million in Q4 2015 from $21.6 million in Q4 2014. |
| |
| • | Adjusted EBITDA(6), a non-GAAP measure, increased 38.9% to $40.0 million in Q4 2015 from $28.8 million in Q4 2014. |
| |
| • | Diluted earnings per share from continuing operations increased to $1.44 in Q4 2015 compared to $0.44 in Q4 2014. |
| |
| • | Adjusted diluted earnings per share from continuing operations(6), a non-GAAP measure, increased 56.7% to $0.94 in Q4 2015 from $0.60 in Q4 2014. |
Full Year 2015 Highlights from Continuing Operations and 2016 Guidance
| |
| • | Revenues for full year 2015 increased 11.4% to $699.0 million from $627.7 million for full year 2014. |
| |
| • | Operating income for full year 2015 increased 17.2% to $103.5 million from $88.3 million for full year 2014. |
| |
| • | Adjusted EBITDA(6) for full year 2015 increased 25.9% to $139.3 million from $110.6 million for full year 2014. |
| |
| • | Diluted earnings per share from continuing operations for full year 2015 increased 33.7% to $2.74 from $2.05 for full year 2014. |
| |
| • | Adjusted diluted earnings per share from continuing operations(6) for full year 2015 increased 22.0% to $2.99 from $2.45 for full year 2014. |
| |
| • | Company provides full year 2016 revenue guidance in a range of $720.0 million to $760.0 million. |
CHICAGO - February 22, 2016 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business consulting services, today announced financial results from continuing operations for the fourth quarter and full year ended December 31, 2015.
“Huron achieved 11% revenue growth from continuing operations in 2015, stemming from solid gains across most of our businesses," said James H. Roth, chief executive officer and president, Huron Consulting Group. "Our Education and Life Sciences and Business Advisory segments achieved strong fourth quarter performance, while our Healthcare segment continued to experience some softness in our performance improvement solution. At the end of the fourth quarter, we completed the divestiture of our Legal segment, which better positions Huron to achieve solid growth in 2016."
Fourth Quarter 2015 Results from Continuing Operations
Revenues for the fourth quarter of 2015 were $185.1 million, an increase of 12.9% compared to $163.9 million for the fourth quarter of 2014. The Company's fourth quarter 2015 operating income was $36.7 million, an increase of 69.7% compared to $21.6 million in the fourth quarter of 2014. Net income from continuing operations increased to $32.5 million, or $1.44 per diluted share, for the fourth quarter of 2015 from $10.0 million, or $0.44 per diluted share, for the same period last year.
Fourth quarter 2015 earnings before interest, taxes, depreciation and amortization ("EBITDA")(6) was $48.2 million, or 26.1% of revenues, compared to $26.8 million, or 16.4% of revenues, in the comparable quarter last year.
In addition to using EBITDA to evaluate the Company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands): |
| | | | | | | |
| | Three Months Ended
December 31, |
| | 2015 | | 2014 |
| Amortization of intangible assets | $ | 8,011 |
| | $ | 2,314 |
|
| Restructuring charges | $ | 1,752 |
| | $ | 1,977 |
|
| Litigation and other gains | $ | (10,000 | ) | | $ | — |
|
| Non-cash interest on convertible notes | $ | 1,817 |
| | $ | 1,733 |
|
| Tax effect | $ | (623 | ) | | $ | (2,409 | ) |
| Net tax benefit related to "check-the-box" election | $ | (12,336 | ) | | $ | — |
|
Adjusted EBITDA(6) increased 38.9% to $40.0 million, or 21.6% of revenues, in the fourth quarter of 2015, from $28.8 million, or 17.6% of revenues, in the comparable quarter last year. Adjusted net income from continuing operations(6) increased 55.5% to $21.1 million, or $0.94 per diluted share, for the fourth quarter of 2015, from $13.6 million, or $0.60 per diluted share, for the comparable period in 2014.
The average number of full-time billable consultants(1) increased 6.1% to 1,839 in the fourth quarter of 2015 compared to 1,733 in the same quarter last year. Full-time billable consultant utilization rate(2) was 79.2% during the fourth quarter of 2015 compared to 75.7% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $224 for the fourth quarter of 2015 compared to $252 for the fourth quarter of 2014. The average number of full-time equivalent professionals(5) was 259 in the fourth quarter of 2015 compared to 125 for the comparable period in 2014.
Full Year 2015 Results from Continuing Operations
Revenues for full year 2015 were $699.0 million, an increase of 11.4% compared to $627.7 million for the full year 2014. The Company's operating income for the full year 2015 was $103.5 million, an increase of 17.2% compared to $88.3 million for the full year 2014. Net income from continuing operations for full year 2015 increased 31.7% to $61.9 million, or $2.74 per diluted share, from $47.0 million, or $2.05 per diluted share, for the full year 2014.
EBITDA(6) increased 34.2% to $145.4 million, or 20.8% of revenues, for the full year 2015, from $108.4 million, or 17.3% of revenues, for the full year 2014.
In addition to using EBITDA to evaluate the Company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):
|
| | | | | | | |
| | Twelve Months Ended
December 31, |
| | 2015 | | 2014 |
| Amortization of intangible assets | $ | 28,696 |
| | $ | 8,896 |
|
| Restructuring charges | $ | 3,329 |
| | $ | 2,811 |
|
| Litigation and other gains, net | $ | (9,476 | ) | | $ | (590 | ) |
| Non-cash interest on convertible notes | $ | 7,141 |
| | $ | 2,139 |
|
| Tax effect | $ | (11,698 | ) | | $ | (5,302 | ) |
| Net tax (benefit) expense related to “check-the-box” election | $ | (12,336 | ) | | $ | 1,161 |
|
Adjusted EBITDA(6) increased 25.9% to $139.3 million, or 19.9% of revenues, for the full year 2015 from $110.6 million, or 17.6% of revenues, for the full year 2014. Adjusted net income from continuing operations(6) for the full year 2015 increased 20.4% to $67.6 million, or $2.99 per diluted share, from $56.1 million, or $2.45 per diluted share, for the full year 2014.
The average number of full-time billable consultants(1) increased 6.2% to 1,770 for the full year 2015 compared to 1,667 for the full year 2014. Full-time billable consultant utilization rate(2) was 76.9% during the full year 2015 compared to 75.4% during the full year 2014. Average billing rate per hour for full-time billable consultants(3) was $222 for the full year 2015 compared to
$242 for the full year 2014. The average number of full-time equivalent professionals(5) was 230 during the full year 2015 compared to 112 during the full year 2014.
Operating Segments
Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges.
The Company’s full year 2015 revenues by operating segment as a percentage of total Company revenues are as follows: Huron Healthcare (64%); Huron Education and Life Sciences (24%); and Huron Business Advisory, which includes EPM & Analytics, (12%). 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 December 31, 2015.
Acquisitions and Divestiture
On October 1, 2015, Huron completed its acquisition of the assets of Cloud62, Inc., a Buffalo, New York-based provider of business consulting services specializing in Salesforce.com implementations and related cloud-based applications. The results of operations of Cloud62 are included in the Huron Business Advisory segment.
On December 31, 2015, Huron completed its sale of the Huron Legal segment to Consilio, Inc. As such, the operating results of Huron Legal are reported as discontinued operations for all periods presented.
Effective February 1, 2016, Huron completed its acquisition of MyRounding Solutions LLC ("MyRounding"), a Denver, Colorado-based firm specializing in digital health solutions to improve patient care. The addition of MyRounding strengthens Huron’s cultural transformation services for healthcare providers and expands the integration of Huron’s software and consulting solutions. The results of operations of MyRounding will be included within the Huron Healthcare segment.
Outlook for 2016(7)
Based on currently available information, the Company provides guidance for full year 2016 of revenues before reimbursable expenses in a range of $720.0 million to $760.0 million. The Company also anticipates EBITDA in a range of $136.0 million to $145.5 million, adjusted EBITDA in a range of $138.0 million to $147.5 million, GAAP diluted earnings per share from continuing operations in a range of $2.10 to $2.30, and non-GAAP adjusted diluted earnings per share from continuing operations in a range of $3.20 to $3.40.
Management will provide a more detailed discussion of its outlook during the Company’s earnings conference call webcast.
Fourth Quarter 2015 Webcast
The Company will host a webcast to discuss its financial results today, February 22, 2016, at 5:00 p.m. Eastern Time (4:00 p.m. Central Time). The conference call is being webcast by NASDAQ OMX and can be accessed at Huron Consulting Group’s website at http://ir.huronconsultinggroup.com. A replay will be available approximately two hours after the conclusion of the webcast and for 90 days thereafter.
Use of Non-GAAP Financial Measures(6)
In evaluating the Company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. 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 the Company's core operating results and future prospects. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States.
About Huron Consulting Group
Huron is a global professional services firm focused on assisting clients with their most complex business issues by delivering high-value, quality solutions to support their long-term strategic objectives. Huron specializes in serving clients in the healthcare, higher education, life sciences, and commercial sectors as these organizations face significant transformational change and regulatory or economic pressures in dynamic market environments. With its deep industry and technical expertise,
Huron provides advisory, consulting, technology, and analytic solutions to deliver sustainable and measurable results. Learn more at www.huronconsultinggroup.com.
Statements in this press release that are not historical in nature, including those concerning the Company’s current expectations about its future requirements and needs, are “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “may,” “should,” “expects,” “provides,” “anticipates,” “assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,” “might,” “predicts,” “seeks,” “would,” “believes,” “estimates,” “plans,” “continues,” or "outlook" or similar expressions. These forward-looking statements reflect our current expectations about our future requirements and needs, results, levels of activity, performance, or achievements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: failure to achieve expected utilization rates, billing rates and the number of revenue-generating professionals; inability to expand or adjust our service offerings in response to market demands; our dependence on renewal of client-based services; dependence on new business and retention of current clients and qualified personnel; failure to maintain third-party provider relationships and strategic alliances; inability to license technology to and from third parties; the impairment of goodwill; various factors related to income and other taxes; difficulties in successfully integrating the businesses we acquire and achieving expected benefits from such acquisitions; 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, 2015, that may cause actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. We disclaim any obligation to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.
Media Contact:
Jenna Nichols
312-880-5693
jnichols@huronconsultinggroup.com
Investor Contact:
C. Mark Hussey
or
John Kelly
312-583-8722
investor@huronconsultinggroup.com
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND OTHER COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Twelve Months Ended
December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Revenues and reimbursable expenses: | | | | | | | |
| Revenues | $ | 185,100 |
| | $ | 163,917 |
| | $ | 699,010 |
| | $ | 627,686 |
|
| Reimbursable expenses | 16,747 |
| | 17,634 |
| | 70,013 |
| | 73,847 |
|
| Total revenues and reimbursable expenses | 201,847 |
| | 181,551 |
| | 769,023 |
| | 701,533 |
|
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): | | | | | | | |
| Direct costs | 104,467 |
| | 104,333 |
| | 401,915 |
| | 384,277 |
|
| Amortization of intangible assets and software development costs | 4,686 |
| | 1,225 |
| | 16,788 |
| | 4,590 |
|
| Reimbursable expenses | 16,738 |
| | 17,580 |
| | 69,932 |
| | 73,855 |
|
| Total direct costs and reimbursable expenses | 125,891 |
| | 123,138 |
| | 488,635 |
| | 462,722 |
|
| Operating expenses and other operating (gains) losses: | | | | | | | |
| Selling, general and administrative expenses | 40,646 |
| | 30,834 |
| | 157,902 |
| | 132,799 |
|
| Restructuring charges | 1,752 |
| | 1,977 |
| | 3,329 |
| | 2,811 |
|
| Litigation and other gains, net | (10,000 | ) | | — |
| | (9,476 | ) | | (590 | ) |
| Depreciation and amortization | 6,849 |
| | 3,969 |
| | 25,135 |
| | 15,451 |
|
| Total operating expenses and other operating (gains) losses | 39,247 |
| | 36,780 |
| | 176,890 |
| | 150,471 |
|
| Operating income | 36,709 |
| | 21,633 |
| | 103,498 |
| | 88,340 |
|
| Other income (expense), net: | | | | | | | |
| Interest expense, net of interest income | (4,342 | ) | | (3,889 | ) | | (18,136 | ) | | (8,679 | ) |
| Other income (expense), net | 185 |
| | 100 |
| | (1,797 | ) | | 400 |
|
| Total other expense, net | (4,157 | ) | | (3,789 | ) | | (19,933 | ) | | (8,279 | ) |
| Income from continuing operations before income tax expense | 32,552 |
| | 17,844 |
| | 83,565 |
| | 80,061 |
|
| Income tax expense | 50 |
| | 7,876 |
| | 21,670 |
| | 33,059 |
|
| Net income from continuing operations | 32,502 |
| | 9,968 |
| | 61,895 |
| | 47,002 |
|
| Income (loss) from discontinued operations, net of tax | (13,159 | ) | | 2,825 |
| | (2,843 | ) | | 32,049 |
|
| Net income | $ | 19,343 |
| | $ | 12,793 |
| | $ | 59,052 |
| | $ | 79,051 |
|
| Net earnings per basic share: | | | | | | | |
| Net income from continuing operations | $ | 1.47 |
| | $ | 0.45 |
| | $ | 2.80 |
| | $ | 2.10 |
|
| Income (loss) from discontinued operations, net of tax | (0.59 | ) | | 0.13 |
| | (0.13 | ) | | 1.42 |
|
| Net income | $ | 0.88 |
| | $ | 0.58 |
| | $ | 2.67 |
| | $ | 3.52 |
|
| Net earnings per diluted share: | | | | | | | |
| Net income from continuing operations | $ | 1.44 |
| | $ | 0.44 |
| | $ | 2.74 |
| | $ | 2.05 |
|
| Income (loss) from discontinued operations, net of tax | (0.58 | ) | | 0.13 |
| | (0.13 | ) | | 1.40 |
|
| Net income | $ | 0.86 |
| | $ | 0.57 |
| | $ | 2.61 |
| | $ | 3.45 |
|
| Weighted average shares used in calculating earnings per share: | | | | | | | |
| Basic | 22,093 |
| | 22,010 |
| | 22,136 |
| | 22,431 |
|
| Diluted | 22,551 |
| | 22,548 |
| | 22,600 |
| | 22,925 |
|
| Comprehensive income: | | | | | | | |
| Net income | $ | 19,343 |
| | $ | 12,793 |
| | $ | 59,052 |
| | $ | 79,051 |
|
| Foreign currency translation gain (loss), net of tax | 2,018 |
| | (883 | ) | | 1,817 |
| | (1,618 | ) |
| Unrealized gain (loss) on investment, net of tax | 300 |
| | (402 | ) | | 4,435 |
| | (250 | ) |
| Unrealized gain (loss) on cash flow hedging instruments, net of tax | 240 |
| | (114 | ) | | (12 | ) | | 10 |
|
| Other comprehensive income (loss) | 2,558 |
| | (1,399 | ) | | 6,240 |
| | (1,858 | ) |
| Comprehensive income | $ | 21,901 |
| | $ | 11,394 |
| | $ | 65,292 |
| | $ | 77,193 |
|
HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
|
| | | | | | | |
| | December 31,
2015 | | December 31,
2014 |
| Assets | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 58,437 |
| | $ | 256,872 |
|
| Receivables from clients, net | 85,297 |
| | 76,490 |
|
| Unbilled services, net | 56,527 |
| | 84,206 |
|
| Income tax receivable | 406 |
| | 8,016 |
|
| Deferred income taxes, net | — |
| | 14,629 |
|
| Prepaid expenses and other current assets | 28,922 |
| | 13,583 |
|
| Current assets of discontinued operations | — |
| | 32,363 |
|
| Total current assets | 229,589 |
| | 486,159 |
|
| Property and equipment, net | 28,888 |
| | 30,691 |
|
| Long-term investment | 34,831 |
| | 12,250 |
|
| Other non-current assets | 24,460 |
| | 19,920 |
|
| Intangible assets, net | 94,992 |
| | 21,729 |
|
| Goodwill | 751,400 |
| | 514,591 |
|
| Non-current assets of discontinued operations | — |
| | 70,574 |
|
| Total assets | $ | 1,164,160 |
| | $ | 1,155,914 |
|
| Liabilities and stockholders’ equity | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 7,220 |
| | $ | 10,804 |
|
| Accrued expenses | 24,276 |
| | 17,051 |
|
| Accrued payroll and related benefits | 80,839 |
| | 105,522 |
|
| Current maturities of long-term debt | — |
| | 28,750 |
|
| Deferred revenues | 19,086 |
| | 12,469 |
|
| Current liabilities of discontinued operations | — |
| | 1,780 |
|
| Total current liabilities | 131,421 |
| | 176,376 |
|
| Non-current liabilities: | | | |
| Deferred compensation and other liabilities | 23,768 |
| | 11,221 |
|
| Long-term debt, net of current portion | 311,993 |
| | 327,852 |
|
| Deferred lease incentives | 9,965 |
| | 12,671 |
|
| Deferred income taxes, net | 34,688 |
| | 26,657 |
|
| Non-current liabilities of discontinued operations | — |
| | 503 |
|
| Total non-current liabilities | 380,414 |
| | 378,904 |
|
| Commitments and contingencies |
| |
|
| Stockholders’ equity | | | |
| Common stock; $0.01 par value; 500,000,000 shares authorized; 24,775,823 and 24,976,395 shares issued at December 31, 2015 and December 31, 2014, respectively | 241 |
| | 241 |
|
| Treasury stock, at cost, 2,249,630 and 2,097,173 shares at December 31, 2015 and December 31, 2014, respectively | (103,734 | ) | | (94,074 | ) |
| Additional paid-in capital | 438,367 |
| | 442,308 |
|
| Retained earnings | 313,866 |
| | 254,814 |
|
| Accumulated other comprehensive income (loss) | 3,585 |
| | (2,655 | ) |
| Total stockholders’ equity | 652,325 |
| | 600,634 |
|
| Total liabilities and stockholders’ equity | $ | 1,164,160 |
| | $ | 1,155,914 |
|
HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
| | | | | | | |
| | Twelve Months Ended
December 31, |
| | 2015 | | 2014 |
| Cash flows from operating activities: | | | |
| Net income | $ | 59,052 |
| | $ | 79,051 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 58,053 |
| | 30,989 |
|
| Share-based compensation | 21,487 |
| | 20,130 |
|
| Amortization of debt discount and issuance costs | 9,329 |
| | 3,832 |
|
| Allowances for doubtful accounts and unbilled services | 1,025 |
| | 5,918 |
|
| Deferred income taxes | 2,765 |
| | 8,096 |
|
| Loss on sale of business | 2,303 |
| | — |
|
| Changes in operating assets and liabilities, net of acquisitions and divestitures: | | | |
| (Increase) decrease in receivables from clients | (2,836 | ) | | 30,072 |
|
| (Increase) decrease in unbilled services | 31,696 |
| | (38,211 | ) |
| (Increase) decrease in current income tax receivable / payable, net | 8,818 |
| | (10,773 | ) |
| (Increase) decrease in other assets | (14,742 | ) | | 2,324 |
|
| Increase (decrease) in accounts payable and accrued liabilities | 7,679 |
| | 9,164 |
|
| Increase (decrease) in accrued payroll and related benefits | (25,221 | ) | | 8,835 |
|
| Increase (decrease) in deferred revenues | 4,859 |
| | (2,974 | ) |
| Net cash provided by operating activities | 164,267 |
| | 146,453 |
|
| Cash flows from investing activities: | | | |
| Purchases of property and equipment, net | (18,571 | ) | | (25,913 | ) |
| Investment in life insurance policies | (5,804 | ) | | (1,775 | ) |
| Purchases of businesses | (339,966 | ) | | (53,971 | ) |
| Purchases of convertible debt investment | (15,438 | ) | | (12,500 | ) |
| Capitalization of internally developed software costs | (866 | ) | | — |
|
| Proceeds from note receivable | — |
| | 328 |
|
| Proceeds from sale of business, net of cash sold | 108,487 |
| | — |
|
| Net cash used in investing activities | (272,158 | ) | | (93,831 | ) |
| Cash flows from financing activities: | | | |
| Proceeds from exercise of stock options | — |
| | 857 |
|
| Shares redeemed for employee tax withholdings | (7,154 | ) | | (3,653 | ) |
| Tax benefit from share-based compensation | 3,588 |
| | 5,107 |
|
| Share repurchases | (34,591 | ) | | (50,000 | ) |
| Proceeds from borrowings under credit facility | 314,000 |
| | 129,000 |
|
| Repayments on credit facility | (365,750 | ) | | (154,000 | ) |
| Proceeds from convertible senior notes issuance | — |
| | 250,000 |
|
| Proceeds from sale of warrants | — |
| | 23,625 |
|
| Payments for convertible senior note hedge | — |
| | (42,125 | ) |
| Payments for debt issue costs | — |
| | (7,346 | ) |
| Payments for capital lease obligations | (48 | ) | | (79 | ) |
| Deferred payments for purchase of property and equipment | — |
| | (471 | ) |
| Deferred acquisition payment | — |
| | (4,745 | ) |
| Net cash provided by (used in) financing activities | (89,955 | ) | | 146,170 |
|
| Effect of exchange rate changes on cash | (589 | ) | | (51 | ) |
| Net (decrease) increase in cash and cash equivalents | (198,435 | ) | | 198,741 |
|
| Cash and cash equivalents at beginning of the period | 256,872 |
| | 58,131 |
|
| Cash and cash equivalents at end of the period | $ | 58,437 |
| | $ | 256,872 |
|
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
|
| | | | | | | | | | | |
| | | Three Months Ended
December 31, | | Percent Increase (Decrease) |
| Segment and Consolidated Operating Results (in thousands): | | 2015 | | 2014 | |
| Huron Healthcare: | | | | | | |
| Revenues | | $ | 118,263 |
| | $ | 109,476 |
| | 8.0 | % |
| Operating income | | $ | 47,440 |
| | $ | 41,593 |
| | 14.1 | % |
| Segment operating income as a percentage of segment revenues | | 40.1 | % | | 38.0 | % | |
|
| Huron Education and Life Sciences: | | | | | |
|
| Revenues | | $ | 43,041 |
| | $ | 38,116 |
| | 12.9 | % |
| Operating income | | $ | 8,789 |
| | $ | 8,592 |
| | 2.3 | % |
| Segment operating income as a percentage of segment revenues | | 20.4 | % | | 22.5 | % | |
|
| Huron Business Advisory: | | | | | |
|
| Revenues | | $ | 23,795 |
| | $ | 15,742 |
| | 51.2 | % |
| Operating income | | $ | 5,749 |
| | $ | 1,954 |
| | 194.2 | % |
| Segment operating income as a percentage of segment revenues | | 24.2 | % | | 12.4 | % | |
|
| All Other: | | | | | |
|
| Revenues | | $ | 1 |
| | $ | 583 |
| | (99.8 | )% |
| Operating loss | | $ | (64 | ) | | $ | (833 | ) | | (92.3 | )% |
| Segment operating loss as a percentage of segment revenues | | N/M |
| | N/M |
| |
|
| Total Company: | | | | | |
|
| Revenues | | $ | 185,100 |
| | $ | 163,917 |
| | 12.9 | % |
| Reimbursable expenses | | 16,747 |
| | 17,634 |
| | (5.0 | )% |
| Total revenues and reimbursable expenses | | $ | 201,847 |
| | $ | 181,551 |
| | 11.2 | % |
| Statements of Earnings reconciliation: | | | | | |
|
| Segment operating income | | $ | 61,914 |
| | $ | 51,306 |
| | 20.7 | % |
| Items not allocated at the segment level: | | | | | |
|
| Other operating expenses and gains | | 18,356 |
| | 25,704 |
| | (28.6 | )% |
| Depreciation and amortization expense | | 6,849 |
| | 3,969 |
| | 72.6 | % |
| Total operating income | | 36,709 |
| | 21,633 |
| | 69.7 | % |
| Other expense, net | | 4,157 |
| | 3,789 |
| | 9.7 | % |
| Income from continuing operations before income tax expense | | $ | 32,552 |
| | $ | 17,844 |
| | 82.4 | % |
| Other Operating Data (excluding All Other): | | | | | |
|
Number of full-time billable consultants (at period end) (1): | | | | | |
|
| Huron Healthcare | | 1,037 |
| | 1,099 |
| | (5.6 | )% |
| Huron Education and Life Sciences | | 478 |
| | 418 |
| | 14.4 | % |
| Huron Business Advisory | | 306 |
| | 205 |
| | 49.3 | % |
| Total | | 1,821 |
| | 1,722 |
| | 5.7 | % |
Average number of full-time billable consultants (for the period) (1): | | | | | | |
| Huron Healthcare | | 1,063 |
| | 1,109 |
| | |
| Huron Education and Life Sciences | | 474 |
| | 417 |
| | |
| Huron Business Advisory | | 302 |
| | 207 |
| | |
| Total | | 1,839 |
| | 1,733 |
| | |
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
|
| | | | | | | | |
| | | Three Months Ended December 31, |
| Other Operating Data (continued): | | 2015 | | 2014 |
Full-time billable consultant utilization rate (2): | | | | |
| Huron Healthcare | | 82.7 | % | | 78.6 | % |
| Huron Education and Life Sciences | | 74.4 | % | | 74.2 | % |
| Huron Business Advisory | | 74.8 | % | | 63.5 | % |
| Total | | 79.2 | % | | 75.7 | % |
Full-time billable consultant average billing rate per hour (3): | | | | |
| Huron Healthcare | | $ | 223 |
| | $ | 262 |
|
| Huron Education and Life Sciences | | $ | 233 |
| | $ | 227 |
|
Huron Business Advisory (4) | | $ | 215 |
| | $ | 248 |
|
| Total | | $ | 224 |
| | $ | 252 |
|
| Revenue per full-time billable consultant (in thousands): | | | | |
| Huron Healthcare | | $ | 82 |
| | $ | 92 |
|
| Huron Education and Life Sciences | | $ | 77 |
| | $ | 76 |
|
| Huron Business Advisory | | $ | 76 |
| | $ | 71 |
|
| Total | | $ | 80 |
| | $ | 86 |
|
Average number of full-time equivalents (for the period) (5): | | | | |
| Huron Healthcare | | 199 |
| | 68 |
|
| Huron Education and Life Sciences | | 51 |
| | 46 |
|
| Huron Business Advisory | | 9 |
| | 11 |
|
| Total | | 259 |
| | 125 |
|
| Revenue per full-time equivalent (in thousands): | | | | |
| Huron Healthcare | | $ | 155 |
| | $ | 105 |
|
| Huron Education and Life Sciences | | $ | 124 |
| | $ | 144 |
|
| Huron Business Advisory | | $ | 106 |
| | $ | 96 |
|
| Total | | $ | 147 |
| | $ | 119 |
|
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): | | 2015 | | 2014 | |
| Huron Healthcare: | | | | | | |
| Revenues | | $ | 446,887 |
| | $ | 415,803 |
| | 7.5 | % |
| Operating income | | $ | 169,560 |
| | $ | 159,015 |
| | 6.6 | % |
| Segment operating income as a percentage of segment revenues | | 37.9 | % | | 38.2 | % | | |
| Huron Education and Life Sciences: | | | | | | |
| Revenues | | $ | 167,933 |
| | $ | 145,962 |
| | 15.1 | % |
| Operating income | | $ | 44,216 |
| | $ | 36,131 |
| | 22.4 | % |
| Segment operating income as a percentage of segment revenues | | 26.3 | % | | 24.8 | % | | |
| Huron Business Advisory: | | | | | | |
| Revenues | | $ | 82,968 |
| | $ | 62,840 |
| | 32.0 | % |
| Operating income | | $ | 19,263 |
| | $ | 14,035 |
| | 37.2 | % |
| Segment operating income as a percentage of segment revenues | | 23.2 | % | | 22.3 | % | | |
| All Other: | | | | | | |
| Revenues | | $ | 1,222 |
| | $ | 3,081 |
| | (60.3 | )% |
| Operating loss | | $ | (1,718 | ) | | $ | (2,466 | ) | | (30.3 | )% |
| Segment operating loss as a percentage of segment revenues | | N/M |
| | N/M |
| | |
| Total Company: | | | | | | |
| Revenues | | $ | 699,010 |
| | $ | 627,686 |
| | 11.4 | % |
| Reimbursable expenses | | 70,013 |
| | 73,847 |
| | (5.2 | )% |
| Total revenues and reimbursable expenses | | $ | 769,023 |
| | $ | 701,533 |
| | 9.6 | % |
| Statements of Earnings reconciliation: | | | | | | |
| Segment operating income | | $ | 231,321 |
| | $ | 206,715 |
| | 11.9 | % |
| Items not allocated at the segment level: | | | | | | |
| Other operating expenses and gains | | 102,688 |
| | 102,924 |
| | (0.2 | )% |
| Depreciation and amortization expense | | 25,135 |
| | 15,451 |
| | 62.7 | % |
| Total operating income | | 103,498 |
| | 88,340 |
| | 17.2 | % |
| Other expense, net | | 19,933 |
| | 8,279 |
| | 140.8 | % |
| Income from continuing operations before income tax expense | | $ | 83,565 |
| | $ | 80,061 |
| | 4.4 | % |
| Other Operating Data (excluding All Other): | | | | | | |
Number of full-time billable consultants (at period end) (1): | | | | | | |
| Huron Healthcare | | 1,037 |
| | 1,099 |
| | (5.6 | )% |
| Huron Education and Life Sciences | | 478 |
| | 418 |
| | 14.4 | % |
| Huron Business Advisory | | 306 |
| | 205 |
| | 49.3 | % |
| Total | | 1,821 |
| | 1,722 |
| | 5.7 | % |
Average number of full-time billable consultants (for the period) (1): | | | | | | |
| Huron Healthcare | | 1,085 |
| | 1,070 |
| | |
| Huron Education and Life Sciences | | 442 |
| | 417 |
| | |
| Huron Business Advisory | | 243 |
| | 180 |
| | |
| Total | | 1,770 |
| | 1,667 |
| | |
HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited) |
| | | | | | | | |
| | | Twelve Months Ended
December 31, |
| Other Operating Data (continued): | | 2015 | | 2014 |
Full-time billable consultant utilization rate (2): | | | | |
| Huron Healthcare | | 77.9 | % | | 78.3 | % |
| Huron Education and Life Sciences | | 75.5 | % | | 71.3 | % |
| Huron Business Advisory | | 75.0 | % | | 68.0 | % |
| Total | | 76.9 | % | | 75.4 | % |
Full-time billable consultant average billing rate per hour (3): | | | | |
| Huron Healthcare | | $ | 217 |
| | $ | 248 |
|
| Huron Education and Life Sciences | | $ | 231 |
| | $ | 219 |
|
Huron Business Advisory (4) | | $ | 228 |
| | $ | 255 |
|
| Total | | $ | 222 |
| | $ | 242 |
|
| Revenue per full-time billable consultant (in thousands): | | | | |
| Huron Healthcare | | $ | 313 |
| | $ | 363 |
|
| Huron Education and Life Sciences | | $ | 325 |
| | $ | 292 |
|
| Huron Business Advisory | | $ | 328 |
| | $ | 330 |
|
| Total | | $ | 318 |
| | $ | 341 |
|
Average number of full-time equivalents (for the period) (5): | | | | |
| Huron Healthcare | | 179 |
| | 60 |
|
| Huron Education and Life Sciences | | 43 |
| | 43 |
|
| Huron Business Advisory | | 8 |
| | 9 |
|
| Total | | 230 |
| | 112 |
|
| Revenue per full-time equivalent (in thousands): | | | | |
| Huron Healthcare | | $ | 604 |
| | $ | 461 |
|
| Huron Education and Life Sciences | | $ | 574 |
| | $ | 558 |
|
| Huron Business Advisory | | $ | 408 |
| | $ | 390 |
|
| Total | | $ | 591 |
| | $ | 493 |
|
| |
| (1) | Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked. |
| |
| (2) | Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all of our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. |
| |
| (3) | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. |
| |
| (4) | The Huron Business Advisory segment includes the operations of Rittman Mead India, a business that we acquired in July 2015. Absent the impact of Rittman Mead India, the average billing rate per hour for Huron Business Advisory for the three and twelve months ended December 31, 2015 would have been $258 and $256, respectively. |
| |
| (5) | Consists of consultants who work variable schedules as needed by our clients, as well as other professionals who generate revenues primarily based on number of hours worked. Also includes our cultural transformation consultants within our Studer Group solution, which include coaches and their support staff, and full-time employees who provide software support and maintenance services to our clients. |
N/M - Not meaningful
HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6)
(In thousands)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Twelve Months Ended
December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Revenues | $ | 185,100 |
| | $ | 163,917 |
| | $ | 699,010 |
| | $ | 627,686 |
|
| Net income from continuing operations | $ | 32,502 |
| | $ | 9,968 |
| | $ | 61,895 |
| | $ | 47,002 |
|
| Add back: | | | | | | | |
| Income tax expense | 50 |
| | 7,876 |
| | 21,670 |
| | 33,059 |
|
| Interest and other expenses | 4,157 |
| | 3,789 |
| | 19,933 |
| | 8,279 |
|
| Depreciation and amortization | 11,535 |
| | 5,194 |
| | 41,923 |
| | 20,041 |
|
Earnings before interest, taxes, depreciation and amortization (EBITDA) (6) | 48,244 |
| | 26,827 |
| | 145,421 |
| | 108,381 |
|
| Add back: | | | | | | | |
| Restructuring charges | 1,752 |
| | 1,977 |
| | 3,329 |
| | 2,811 |
|
| Litigation and other gains, net | (10,000 | ) | | — |
| | (9,476 | ) | | (590 | ) |
Adjusted EBITDA (6) | $ | 39,996 |
| | $ | 28,804 |
| | $ | 139,274 |
| | $ | 110,602 |
|
Adjusted EBITDA as a percentage of revenues (6) | 21.6 | % | | 17.6 | % | | 19.9 | % | | 17.6 | % |
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (6)
(In thousands)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Twelve Months Ended
December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Net income from continuing operations | $ | 32,502 |
| | $ | 9,968 |
| | $ | 61,895 |
| | $ | 47,002 |
|
| Weighted average shares – diluted | 22,551 |
| | 22,548 |
| | 22,600 |
| | 22,925 |
|
| Diluted earnings per share from continuing operations | $ | 1.44 |
| | $ | 0.44 |
| | $ | 2.74 |
| | $ | 2.05 |
|
| Add back: | | | | | | | |
| Amortization of intangible assets | 8,011 |
| | 2,314 |
| | 28,696 |
| | 8,896 |
|
| Restructuring charges | 1,752 |
| | 1,977 |
| | 3,329 |
| | 2,811 |
|
| Litigation and other gains, net | (10,000 | ) | | — |
| | (9,476 | ) | | (590 | ) |
| Non-cash interest on convertible notes | 1,817 |
| | 1,733 |
| | 7,141 |
| | 2,139 |
|
| Tax effect | (623 | ) | | (2,409 | ) | | (11,698 | ) | | (5,302 | ) |
| Net tax (benefit) expense related to “check-the-box” election | (12,336 | ) | | — |
| | (12,336 | ) | | 1,161 |
|
| Total adjustments, net of tax | (11,379 | ) | | 3,615 |
| | 5,656 |
| | 9,115 |
|
Adjusted net income from continuing operations (6) | $ | 21,123 |
| | $ | 13,583 |
| | $ | 67,551 |
| | $ | 56,117 |
|
Adjusted diluted earnings per share from continuing operations (6) | $ | 0.94 |
| | $ | 0.60 |
| | $ | 2.99 |
| | $ | 2.45 |
|
| |
| (6) | In evaluating the Company’s financial performance, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Our management uses these non-GAAP financial measures to gain an understanding of our comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States. |
HURON CONSULTING GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES FOR FULL YEAR 2016 OUTLOOK
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (7)
(In millions)
(Unaudited)
|
| | | | | | | |
| | Year Ending |
| | December 31, 2016 |
| | Guidance Range |
| | Low | | High |
| Projected revenues - GAAP | $ | 720.0 |
| | $ | 760.0 |
|
| Projected net income from continuing operations - GAAP | $ | 45.0 |
| | $ | 50.0 |
|
| Add back: | | | |
| Income tax expense | 31.0 |
| | 35.0 |
|
| Interest and other expenses | 16.5 |
| | 17.0 |
|
| Depreciation and amortization | 43.5 |
| | 43.5 |
|
Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (7) | 136.0 |
| | 145.5 |
|
| Add back: | | | |
| Restructuring charges | 2.0 |
| | 2.0 |
|
Projected adjusted EBITDA (7) | $ | 138.0 |
| | $ | 147.5 |
|
Projected adjusted EBITDA as a percentage of projected revenues (7) | 19.2 | % | | 19.4 | % |
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (7)
(In millions)
(Unaudited)
|
| | | | | | | |
| | Year Ending |
| | December 31, 2016 |
| | Guidance Range |
| | Low | | High |
| Projected net income from continuing operations - GAAP | $ | 45.0 |
| | $ | 50.0 |
|
| Projected diluted earnings per share from continuing operations - GAAP | $ | 2.10 |
| | $ | 2.30 |
|
| Add back: | | | |
| Amortization of intangible assets | 30.0 |
| | 30.0 |
|
| Restructuring charges | 2.0 |
| | 2.0 |
|
| Non-cash interest on convertible notes | 7.5 |
| | 7.5 |
|
| Tax effect | (16.0 | ) | | (16.0 | ) |
| Total adjustments, net of tax | 23.5 |
| | 23.5 |
|
Projected adjusted net income from continuing operations (7) | $ | 68.5 |
| | $ | 73.5 |
|
Projected adjusted diluted earnings per share from continuing operations (7) | $ | 3.20 |
| | $ | 3.40 |
|
| |
| (7) | In evaluating the Company’s outlook, management uses projected EBITDA, projected adjusted EBITDA, projected adjusted EBITDA as a percentage of revenues, projected adjusted net income from continuing operations, and projected adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Management believes that the use of such measures, as supplements to projected net income 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. |
