HURN - Earnings call transcript Q2 2020 | Huron Consulting Group Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Huron Consulting Group’s Webcast to Discuss Financial Results for the Second Quarter 2020. [Operator Instructions] As a reminder, this conference call is being recorded.

Before we begin, I would like to point all of you to the disclosure at the end of the company’s news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron’s website. Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon’s webcast. discussing more be financial will company one non-GAAP or measures. The reconciliation and at required website including comparable the look on numbers. by the GAAP earnings SEC, disclosures Please the release Huron’s most of for the to all call now Roth, to Consulting Chief And Huron Jim of over turn Officer like to Group. I’d the Executive Mr. ahead. go please Roth,

Jim Roth

President Officer. Good afternoon, With Consulting Officer; today John is Huron Mark me Chief and Quarter Financial Operating Second and Group’s welcome and Hussey, our Kelly, to Call. XXXX Chief our Earnings

Our were the with year Healthcare driven results Business partially second declining quarter. revenue and the in in was weakness Advisory was anticipated, quarter offset Education we than better growth by decline X% the prior over that by solid business This segments.

than second about remain better year I businesses estimates, While clients, insight of will provide the the facing our of the expectations Education. XXXX. our quarter our our now remainder the demand the additional half in each for of quarter the share and cautious color performance on economic uncertainties particularly given for our was we and second into and initial some then Healthcare second drivers

quarter, declined to prior XX% quarter. segment the the Healthcare compared During year second revenues

of systems not yet care health levels. our and clients performed to our the and of on their part them return reengage as or immediate severely challenges environment. below and patient by quarter, see in to clients June, of a return the still utilization most in well were latter nonurgent the its Many of of seen As to exacerbated business in when to low financial volumes the that have pre-COVID at they end Healthcare worse. earlier Indicative more and current although rose support began began health XXs some volumes. the May most to the work improvement, in second the hospitals surgeries our the the mid-XXs virtually priorities no the historical business, you’ve quarter through read, in the and stability impacted With started the March being quarter operational with in were April, elective crisis was although by market team

aspects the were business, last care during several Home, were quarter our areas we slowdown health of crisis. notable impacted we enhance able strategic revenue all work investment the The Medically of was where our a made While with there the ongoing in which most because year. to

home XXX-bed partnered Home California-based of in hospital example, the with just over system X weeks. virtual Medically one and capability our establish to health For in a we clients

are serve to country additional the evolve We pipeline underway the future. is systems the acute the and the health as less in patients expensive as with continuing look COVID-XX well similar environment with to care delivered hospitals as work develop across in better way for with ways

telehealth design hospitals have clinics to procedures and to patient up We advisory including volumes, response the new recovery ambulatory ramp care, remote reopen in surge pandemic, that help virtual COVID-XX optimization response and protocols. including testing organizations, municipalities operating the on introduced patient large other encounters, COVID-XX and tracings and in safely several also other contact services focused room for to several new services design, in and implementation services

estimating encouraged second when second the in the as increase We and of as business volatility the cautious our move about were will historical approach will visibility we As XXXX. have progressed, by but Healthcare half pandemic into we gradual norms. of growth the earnings we continue the to continues, remain limited quarter into utilization

chain, including technology, With positioned to collective of a from highlights broad clients pathway the and well to care their approach our these supply For nimble future. business changes. our to Healthcare evolve environment delivery, resulting related while address aspects clients, with the need and the set to infrastructure model, immediate and needs economics current their of successful offerings help sustainable we a working create market, our for are the believe them we core

in the driven achieved by Revenues Our second second grew record XXXX, Business and offerings. XX% primarily over of the revenues quarter our advisory quarter. distressed Advisory segment technology

Our technology ES&A with and the offerings as demand modernize continue the has crisis to see new in in solid to of business highlighted digital addressing realities. operations the the importance economic business engage COVID-XX transformation customers

and of future. we the larger business by be our analytics the growth Huron We ES&A in the in of encouraged digital the the technology drivers will strength one believe are and of services that market, for

the continue conditions and will to business will foreseeable of advisory facing for restructuring believe our drive has offerings and legacy turnaround many solid demand We market beneficiary be demand distress the continued for future. for the practice these financial current Our been services. driving industries,

also businesses. and Innosight seeing pipeline are the in in improvement sciences We strategy-related our offerings the gradual for life

disruption economy economy. As in global following taking the significant demand our global further strategy believe increase the stabilizes, the for services place will we

providing few relief across have for quarter pandemic. yet for do developed increased impacted primarily enter the contact new the XX% as we quarter, as apply related of not quarter conversion revenues activities new to as issues into financial model with faculty our term, we tracing Because get not in budget assisting That driven health to operational, their in will we believe testing visibility in demand significant stimulus guidance fall. among COVID-XX colleges is safer numbers. for of the face aimed limitations expect Today, identifying significant funds; Healthcare, comments starting backlog campus higher will our strategies pipeline variability new driven be challenges of through segment The to of is currently scarce full conversion a recovery the second have base, well-publicized better to of demand will about Unlike we replicate half education including and we and research clients, There their creating XXXX business the past going Education Due care, in our John we like provide greater by identify let the technology universities We XXXX, when I semester. are client education, term. and the and the need our the model that and year fall hindered revise proposed models begun tremendous path now this for changed and primarily the was in business detail our and technology universities believe and instruction and provide segment’s will are strong services. half we we half reopening entered driven March for reestablishing several health colleges be the year. the to fall for with second helping business the over to campuses economics. services, by and resources Education out environment April, in clients relating uncertainty to allocate semester of student, students, as experienced challenges. in operational uncertainty long-term half Those to there our campus, the our existing education year. near a second institutions to XXXX. performance on back at our performance of efficiencies uncertainty many prepare remainder The what institutions care and the have in help on solid return and fall have COVID-XX and focused what other growth many educational witnessed higher recent Our for year. on clients then pipeline offerings. and second of and limits and business permanently development the volatility, crisis. care these how the the and distraction, immediacy staff second first he in Similar the strategies. Like bringing to of immediate likely health significantly the the our drive were in the our for strength they expectations for a will walks of play initiatives by higher To

Our for $XXX to year million. million is revenue the guidance now $XXX

to to share earnings expect also Huron half. range challenging economic first environment, XX% EBITDA revenues, a adjusted We $X.XX the solid of per X% Considering diluted a of adjusted $X.XX. of had in and

remotely, performed the year. Our during what of or was the support above Business XXXX The and established in the hopefully expectations current longer the at challenges their quarter, Education plan our second and Advisory addressing segments carried XXXX, that start our momentum worst innovatively continued beginning in prior for to the of pandemic while and them we team clients the helping established we our medium had term. into of to the

of half uncertainty the health limited education our businesses in offerings call, our from to near-term today’s seek a the other challenges clients’ go-to-market Advisory As more to across at in industries, distressed we strong these Compared and our our our as the clients. see set due to markets we right pipeline evolving our I’ve advisory building future. primarily guidance segments nimble business all believe mentioned years, to offerings segment sales and the demand the broad recent have our of disruption year, We have visibility in the a and and pace second today clients solid into and that our reflects grow the stemming the commercial Business care than continue technology said, With continues of much facing and address faster as throughout the relationships, development businesses. portfolio in in client capabilities to services. balanced needs we our a have

evolve as to they progress demand our clients market our will of meet keep As their of the anticipated continue goal to in the to together term team our we and believe stabilize the in now, as near we recovery. support

pipeline. Huron that not opportunities been hard While take believe will disruptions short-term work of dedication entire positioned well without would and the team have culture it their we to last is to several often times so future that during competitive continue the core challenging – truly who COVID-XX culture outweigh to Huron and for a We demonstrate course, have our the economy I differentiator, and and any where the have mentioned shines. our our time like during a continued agility months time. is resilience

to our of into sustainable the achieve objectives time. company year, on the second are our same organic and delivering over advancing positioning our the of move we and expansion strategy, half revenue to financial focused margin we long-term this high-quality services clients growth As

over for financial detailed more let a results. John? our discussion me Now of it turn John to

John Kelly

good Jim, afternoon, you, and Thank everyone.

adjusted I be financial adjusted will EBITDA, Before such measures, please EPS flow. that EBITDA, adjusted income, cash net and begin, free note as I discussing non-GAAP

management have GAAP operations measures, comparable the comments most a believes to basis. a management today release, they and reconciliations press financial investors of the my regarding of these condition Investor are information page why uses useful along and XX-Q measures all Our why our on Also, to provide operating Huron Relations on continuing these non-GAAP non-GAAP with and measures website discussion results.

second diluted per Now in or the in growth million the same to year. net $X.XX share $XX.X of let in million, prior diluted same the diluted the income in in the XXXX for of income $X.XX $X.XX was quarter walk the or share million segment, some share the the financial The of diluted million Net down $XX.X key the per non-GAAP same was $XXX.X X.X% compared in period Healthcare Advisory results you quarter. partially in the of the million or from $XX.X in million XXXX. offset $XX.X in was of second driven me Education XXXX to Revenues quarter through XXXX $XXX.X decline compared quarter revenues by the solid and were Adjusted second share or per segments. Business quarter quarter quarter XXXX. for $X.XX of by per

rate Our the a compared in year XX.X% of quarter was ago. XXXX effective tax to XX.X% second

based or quarter of favorable certain QX the rate, the and including of allocation positive portion of more the revenues reflected XXXX tax than state the the nondeductible XX.X% or Adjusted quarter due effective statutory in to impairment was of the also in Our goodwill to effective with of inclusive million expenses, impact in of accordance rate expenses current these $XX.X EBITDA pretax the primarily rate for compared year-to-date quarter business of income tax federal was tax GAAP. first on charges revenues. XXXX the taxes, The to $XX.X QX QX of credits. losses nondeductible the XX.X% during certain million impact XXXX

was salaries, backlog of second revenues our to the Now posted income or for quarter contractor for revenue about offerings. the other reduction for quarter with XX% million in posted XX.X% expenses, XXXX. in quarter outside for a total was of in $XX.X disruption of compensation in increased segment an performance was XXXX. generated XX.X% generated conversion for Advisory segment was same from level of XXXX, I’ll to operating The same second that the in for the revenues a increases related student, of The The to company XXXX by advisory to operating posted allocated Healthcare bonus segment for XXXX. total Healthcare and XX.X% million quarter comments $XX decline segment savings income general second million in million compensation in categories. by quarter the QX for XXXX, used XXXX. revenue Other by $XX.X margin primarily in in segment expenses technology the XX.X% $XX.X driven in of of year due quarter gain for on personnel value related income million in assets primarily ultimately million first to record the The revenues increase that consummate, quarter expenses quarter the of income across offset business QX acquisition quarter Business XXXX. support salaries, Healthcare in of the during related increase million to a compared savings quarter-over-quarter the in XXXX XX.X% QX our QX in $XX.X the attributable $X.X our $XX.X growth decrease quarter make XXXX. to a revenues segments. of The slower the other fees, The by that XXXX. company revenue by related was X.X% pandemic. our compared QX during million revenues, of stock prior during increase outpaced compared margin QX pipeline professional ongoing generated is travel diligence to in XX% few segment for and professionals was did bonuses reduced corporate The second margin or for plan, increase the XXXX liability million decrease during quarterly margin The quarter-over-quarter and Education revenues. expense Advisory soft plan. the of expenses reduced offerings. distressed not reflecting corporate the to driven fees segment $X.X each was quarter-over-quarter facilities our in from expense multiple the segment reduction quarter growth second Operating These XXXX in for were and our in revenues the XX% partially $X.X company new expenses. corporate XXXX. COVID-XX not the revenues XX.X% expenses fund market deferred second reduced in and which the reflects Segment the due to XX% This up of quarter primarily offset offset was from to percentage This in decline quarter Education XX.X% technology increase operating of up the was revenue The research revenue-generating compared QX to expenses. partially primarily The XXXX of due as of in Business second at or same XXXX. during and down our of margin margin The were for of and in total The XXXX.

million. debt a and finished of cash of cash quarter compared the $XX for XXXX days first Total XXXX. the XX XXXX. net for $XXX million. days the came million days in includes QX for balance a XXXX XX the We $XXX flows. at decrease for DSO was This total debt to quarter promissory quarter in sheet debt senior compared quarter Now and of debt note of the million to second million XX for and $XXX of bank $XX million turning to second of the $X with

as adjusted bank in of of the in by was EBITDA to second leverage driven credit. XXXX. XX, March in borrowings our on at ratio, in X.Xx trailing XXXX QX compared line end ratio EBITDA our the decrease as leverage The million defined approximately the XX-month XX-month adjusted X.Xx we senior Our revolving agreement, our quarter as was of $XXX reduction trailing repaid

bank in XXXX, adjusted net adjusted EBITDA XXXX, ratio for is EBITDA X.Xx XX, June calculating X.Xx as as adjusted when trailing when Our same trailing in XX, calculation was cash compares the XX hand. in million, the XXXX million. months million quarter invest of was manner. of on XX-month June Cash leverage This definition to resulting $X we of internally software of expenditures, second capital flow developed in inclusive $XX costs, to $XX used from cash and cash free operations flow of generated the our of

we continue our operations. ongoing the to will manage Given to cash position our support COVID-XX proactively pandemic,

our any July, degradation hand continued However, cash and collections, not cash has we through seen increase. in have material on to

continue internally available long-term in our and our M&A investments strategy, borrowing capacity, with and We that including may adequate be our believe to arise. growth financing will opportunistic immediate generated tuck-in that together our needs liquidity, to cash support

expectations let XXXX. and guidance me to turn Finally, for our

million year in to we before $X.XX EPS anticipate adjusted a and revenues full of a and range now to revenues reimbursable XX% million, of X% XXXX, in a $X.XX. $XXX EBITDA to in of the of For expenses range adjusted $XXX range

in cash be stock $XX taxes range to be expected Capital and million expected to million million flows free compensation. million, cash $XX noncash of to are range cash operations the and of expenditures from net to are flows a of and to interest to be $XX $XX $XX in We excluding approximately expect $XX million. million

share average XXXX be expect for to XX.X million basic count continue to our We shares. weighted

addition, effective and tax federal rate In tax range XX% of to items. X% incremental XX%, excluding assume basis, of X% related expense a to continue the tax rate impairment goodwill in charges we impact rate state of tax on tax nondeductible blended to an the a the to comprises QX our which non-GAAP XX%, of expense certain

range revenue Healthcare me Let in the X% the performance-based of $XX color the The decline in Embedded $XX in expected to to to with midpoint of a our our compared in million. starting million a XXXX range, revenue million. $XXX revenue. guidance some guidance segment of revenue add fees reflects range

the segment, in expect XXXX, double-digit we COVID-XX Turning for low With XX% to to expect pandemic. reflecting regard we Healthcare segments. be margins XX%, a and approximately of the to the the impacts decline revenue will operating

challenges we the our the to to hospitals in the and health With care the only traditional medium and bode operating and growth and for in systems, margins cases that by see be mid-single-digit U.S. expect term. the The by the believe services short expect offerings in uncertainty our on financial care and which to places well operating revenue high Business the related longer industry, the underlying this surging demand segment, in pressure our faced over for the pressures COVID-XX segment for remains Advisory teens. health we will we In exasperate pandemic created XXXX, terms. health the

and for demand restructuring the expect increase continue as to technology offerings progresses. our year will We

in address short segment, expect the flat in offerings. XX% for we we low expect our remain In model term, offset relatively be medium- we likely increased these XXXX, range. optimistic Education demand revenues offerings and margins and to clients decreased partially will XXXX the longer-term challenges. As but compared the operating in drivers about demand business the be strategic by This will for

pressure and As term. operational to immense for have they the Jim and continue clients financial mentioned, prepare as face our fall higher education

on forward the students, focus their current is and in institutions staff the safe the clients’ Our right of midst for keep faculty to path identifying pandemic.

support on the helping them in of efforts, in are uncertainty we we current the believe revenues have an impact second these While year. half will segment

as from stemming to XXXX. adjusted so to of decline range begin deliver a the Huron’s reflects mounting be margin we points guidance we clients intent revenues, demand the they is EBITDA company. stated stabilize to XXX decline of XX% our address to in at the of total our keep and previously together and compared ongoing revenues margin the strong Huron team basis face. expected This expect of pandemic are to of to positioned impact that midpoint pressures the X% on the the to the Turning

of and half uncertainty our second resurgences COVID-XX facing United States well-publicized demand our XXXX. recent the the the the the education in health clients, With cautious is issues care guidance reflects of across and and of

We clients pandemic. year face health the visibility of reduced the our in day-to-day or through challenges into they managing respond and to as care back have education the the half combating

anticipated, helping during have, our indicates than data half worldwide consultants that reflecting of vacation time would less and internal team’s transition our on average, our travel Our utilized pandemic the normally client-facing first clients through restrictions. the XXXX focus be on

PTO guidance in a Our anticipates back half of the higher of usage the year.

Now to final let questions. few we the thoughts me open call a share before

had Given market, in than initially uncertainty the that we the we were continued quarter our anticipated. better second pleased are results

team services continue to we selling business the Our sustainable environment a We delivering solutions support during to of time. financial the are remain innovative committed focus for uncertain strong challenge with period disruption. sustain to organic while position Huron heightened to term. and our build over strategy our to a on and and our clients We expand through in positioning long and period remote believe our manage margins growth rose this a this to developing financial in achieve long-term of

technologies a in through or managing or strategic, reduced while believe environment. to and concerned settings school industries institutions continue to their positioned students their clients to on education We address how the across safely While virtual we with mounting, telehealth visibility unprecedented Huron evolve help in care for proposition our of hospitals their engaged in clients’ second is how challenges. and related surge operational to other to significant COVID-XX these admissions are challenges bringing incredibly pressure a well from back XXXX, increased they to deliver our have business and preparing we half value into financial believe organizations back more rethinking fall, care and the run in actively while on business manage model, remote focused strategy digital to

We the be our immediate face Operator? continue they world and as term long services to the clients in look for progress like. everyone. I a to address on focus now possibilities issues strong what in open would demand to post-pandemic call to a questions. up the the future looks a like recovery, expect to of Thanks, our and

Operator

Instructions] And [Operator our first question from of William comes Andrew from line Nicholas the Blair.

Your question please.

Andrew Nicholas

Appreciate Hi, the the guys. color Good prepared afternoon. in remarks. all

The second related results, quarter had earnings was first question much just the call. obviously, I what first had to quarter than on better contemplated you

of give persistent Just the into year? can back of you could nature kind for us that outperformance at relatedly, half things of more of your in that expectation pinpoint top the just expectations? much some high maybe is demand And a couple the more outperformed onetime level, you a maybe sense then how higher versus

Jim Roth

of COVID patients. the that out. to uncertainty And were this huge at terms last pan going all kinds and to is wants really I’ll see you issued the the we guess to respond time, that clear So way for I to Andrew, our at John the that if And of this in keep to Jim. back have to to there amount late quarterly I April hospitals shot of trying a when was kind have that results. question, a how go take of time, at color. some hospital add is

equally that at challenged. were weren’t sure side spring beginning going universities break, we looked would home scenario, commercial we of so that kids particularly on be a happen be to that was be care would we and the health to challenged, would assumed what That of things. send Education for really lot and kind And given of

better ES&A much particularly that I capabilities practice largely, for saw probably practices, in really we evolved commercial of clients easiest with second in also a performed the digital what more does anticipated, proficient of the I things a having their is on particularly think that help clients clients we of So the restructuring of way digital side so but quarter turnaround customers. things, much think, the the felt the because very their and of and ES&A, become answer is than lot is importance transformation lot ES&A terms – with the a

certainly, practice the So BA did well.

I I what big think surprise as and was for as both John we play I probably the Education, but we indicated the in surprise that’s the that so us, get second. rest probably and the today, out of That probably biggest think played beginning the was already Education of really, in to existed earlier I in out, in the commentary We’ll the was for total the – us in backlog saw – year. call to think QX, for was and year Education. a some was get

worst time We hospitals frame of of March, to begin up. kind Healthcare, medical terminology, the in begin and hit it April talking saw began assistance volumes to then the recover think and pick up. probably think without I saw May, we the that I For pick in to federal in the

hospitals And health through. of and at the the worst it’s for it systems, I so far, think, seems least like, so

the probably probably by So in our get of business surprise BA. the followed commercial John, of I’d that to is performed say year, I Education rest to. before we biggest strength think And fair? was the the thought is going largely it Healthcare we as

John Kelly

look in that, our to were If touched again, that’s I are that Jim, fair, face. the responsive developing in maybe was we I just ability a COVID-XX on the was teams and to going than – If think of then to really remote. our point that backlog job the a this working by I during quarter, remarks. quarter call think our is seamless I great I thing to going anticipated I’d our more business. just to innovative consolidated kind was excellent it as level, time. had and – the quarter, of our on And overview really is of really challenges from the that’s by entering second of first, through teams at Andrew, offerings that changed more even just better a I’d during did say, what as far cross-company an we concept that transition clients the burn at And

So were responsive we if to beginning but contemplated of situation, result That some weren’t plus teen on that, very our that during the expenses. we’re go of to management client had the year, of low back probably the very going quarter. was offerings tight you the to revenue

job streams to really new really combination of a revenue So couple where excellent out across characteristics key that of of see an find and doing say the company. that are from there clients the would innovation our plus the it’s I’d help working remote

Jim Roth

going question, how I’m in do of second out which to in second we see Andrew, go I probably think one. of So part playing advance half. response, long apologize is And the the but your we’ll really think I kind kind an it’s important now to that for of the

in not to of already the approaching lot They’re volume quite patient that. care, health up think terms volumes, are back we’ve I yet, I the of think they’re levels volumes pre-COVID-XX – a but recovering.

good clients. And so news that’s care for our health

to of technology taking towards lot those as projects area, a seeing their projects certainly they’re now performance encourage on financial movement the in right recovery. more improvement some our We’re

also a that’s responses, lot COVID-related and are issues we’re to working our that. earlier, kind related Medically The but doing with taking other place for right lot of just treat projects we of test of that demand with now, time – well are Home program COVID pretty as our well. So of mentioned hospital clients spending kind and helping and a particularly trace

services model position changing. the our guess, business be to So I prepare worst themselves of and slightly continues The care be to it’s changed a to of finally, as believe time. and to lot over there they’re I think big for improving But I but is clients can. Telehealth and is have future now – they managed a They’re going for are of over. best also what be to with just they going transformation, that. as obviously impact sensing beginning economics think the

to continue well. the care revenue probably So in but for we’re a the our as second for gradual see slow half, of view increase that, hopefully and health to utilization is going remainder

don’t On within but we a really the we will slow big think recovery will kind probably think in – a second recovery, and worst the call it’s a be we the there be quarter. And be gradual. today, Education as from in over think is think and Education, So health boat. going care, to is different certainly V-shaped we indicated I from very of of it kind

huge and clients, they’re kids March I totally break, think the for a And in of a come in March a to of have back, way of on the spring There’s I going focused focused happen. the never hospitals they way that uncertainty fall themselves and April. on fall. think on lot focused for amount in back terms our the what’s our they they’re of were and now middle home sent of in

So some of a our pace. reasonable continued at projects have

Our operations continued. and business has strategy

student-related business Our continued.

Our research lesser have businesses continued slightly at volumes.

now those done months They of we way in would see moving the backlog beginning were life have impacted. table, most today of a bit those some they some but push the they’re it’s back next half and the we probably quarter. pipeline, of to probably procurement and of are been in our on projects system the in caused take What the for out put larger through through a going terms that as going are projects and of little thought progress. being second going systems most encouragement were our our a they ones now of think the implementation the for that to in process couple the second forward. in way of the we’re were it’s is terms paused procurement kind the while little larger But process I projects are

growth So there’s the in all in Education it starting in hope But a going be would at in the fourth to quarter. momentum those this point, that the have some a the will enough and to our delay will quarter. third across projects of what be of kind that certainly our begin momentum activities that But education there’s upon happens hope on fall. impact sector have depend lot of we’d more an in to bigger

health this I as being of on to probably in cautious growth the care have be one plays point, now to reasons we I segment, continue at know. right see need just is to out. just then Education. think in I describe just which Education going to easiest that of so how think largely we And Advisory the – it. crushed we’re the It’s well cautious one that’s And being But reason we’re in we’re same because kind think don’t Business our believe to we is

site but restructuring mentioned areas call, shorter-term the we the businesses, sciences that around of second some and some in issues, we to picked the up believe, our projects strong of have year. and And that had turnaround a life in the and then we be both going business, the beneficial believe future. have part As they our strategy will weakness recently there’s ES&A are for

probably operated kind and the half I second looking at hope in the longer the us it than the of of So we’re you for but bifurcates a way that’s things answer year. – it the quarter wanted, way second

Andrew Nicholas

No, that’s the of on I’m because good. so follow-up that. covered one here you questions checking bunch Education. I a off just Maybe all really, really all them, appreciate

we exercise be Do drastic could some the the Or and the these into generation going of may with these if with you universities about Obviously, better sounds is whatever, in talk they’re kind the quarter. issue big out fourth feel I like for – the it momentum potentially trying issue second As like to or for building run the semester. potentially that or to big figure happen wave about a you what’s universities business a puts fall it Is in they’ve the about half this just mean quarter. of relative through basis the and first if risk? gone the through thinking fourth be of that in less happens kind it universities the gone having exercise regardless of a past third spring? the for this impact in be fall at that fact Huron for these for semester on spring semester could what worst think

Jim Roth

thing to They the wherewithal through. times. got education universities, of need that the through research to manage kind they majority and clients is you endowments financial Well, to of manage one to tougher are tend have our remember some larger

that our So business, – revenue the I think will there. for we – be

contemplating because it second of get saw similar was won’t that in we’re distracted – launch. education that’s we for quarter, in to some certainly actually that I’m hospitals, but now off possibility. the the our the the campus part think would students fall that that, the But I what mean health seeing I point think of and in same doing the there be in where some of them, are possibility. worried because care getting predicting to in just work where they’re leadership frankly, the about urgency a effective. reasons the helping right them it leadership possibility on And a real I spring. be a we’re to be not would is distraction

them half that for in and things looking teed a whether they serve have actually important all and ever. their at And but whether so somebody, digital we going capabilities that are earlier making to and us for it’s of it we’re that’s the by more bit year. that cloud maybe the those access our the of have the they These for delay, and faculty students now well, it’s now – just the I capabilities. can part second think enhancing they’re acknowledge, hopefully, little execution to so up enhancing the are overall us saying, than whether to an need is more – that – is And a efficiently, staff

do So if that’s don’t be not spring matter to what think, would far when ahead on that going having a game it gives compromised drastically. time. campus really and don’t too just though, this the of by think that that I got is students us that is the to that time We want us predict affect semester that comfort of be. I

Andrew Nicholas

really, really Great. That’s helpful. Thank you.

Operator

you. Thank

from question comes next Sommer of line the SunTrust. Our Tobey from

please. question Your

Tobey Sommer

And of needle? How to services right thread and are to uncertain out. try that over about thinking you to hiring kind tricky with it’s deliver three two How medium demand talent? your a capability to thing are term you going the build near-term the years

John Kelly

Mark can I start, John. color. it’s Jim and can and Tobey, provide

So really help company. hiring from been of drive be are part perspective, a going think we that differentiated that to forward to kind entire going hiring still that revenue throughout our for period, strategy this we’ve talent of are going people are the

going to the the hit on drive never we those people we’re need continue really of to that forward. because So the are breaks to type that company

now cautious, back revenue general say, more more say, a progress we hiring We would trend lines year, advisory as within see on given I’d the those just half the trend I that our the we have segment, our Business ES&A uncertainty well as from in business, lines perspective. business, in through been technology the businesses. client some as business the of very the distressed Advisory strong demand

So that the have of reasons areas I some in think talent be some to able business to other would the demand. think of I the those our you will other where Jim skill in stronger right softness plan extent set we hiring in areas. that see us there’s areas of help to to our And be described, out have those repurpose employees that the for

is the So between think collaboration important. our I really teams

distressed hiring opportunities. and really differentiated, and for will our that’s extent at to technology specialized the see think the board, across the to in we’re looking I talent that’s talent business those of forward, strategy the there’s out going drive parts moving still you advisory there

Tobey Sommer

are of in XX I are want How to are to going customers you in which – both your terms that what contract, expecting level form pricing? as of say in XX? rate terms well as to you consultant And bill the

John Kelly

Go side. Tobey. on start ahead, I’ll Yes. healthcare the

Sorry.

Tobey Sommer

you. Thank no. No,

John Kelly

to haven’t fee care which health seen pricing environment. your they I’ll need financial margin we Typically, the margins arrangements any improve types going of in side. some start under seen attractive perspective. but with to we in interest I’d arrangements, question, the they’re a are of the their performance-based from have more changes reflects significant probably on now, us forward. Okay. strain say those that clients To actually,

the practice, say technology perspective, I’d practice. a robust, quite Advisory, the on ES&A main we’ve been health Business side. the again, for that’s the thing seen the From has market So probably care

pricing really course, a And in now. there demand pressure market, of So there. then, of distressed lot hasn’t been tremendous the there’s right

might area I’d side. more early a seen what to we’ve a the full the on working see even call are side, we’ve on say little so our this improving through of education disruption, seen at be that, anything, on it’s an market But business if observation So one say far. this an we based the I’d little pricing point That’s just competition bit trend. there. as that clients demand a where

Tobey Sommer

to perhaps the projects? that Or contingent more that the And size with there? should of with respect mention a larger did scale there not is relationship a I associate bit fee. Am right contracts, we you little

John Kelly

it Tobey, larger that – say, could would something you it certainly often projects. is I be with associate

more that not sized you see medium typically can kind that it’s at just the You point, but you projects, business. them your of of project in within in typically, see performance-based arrangement projects do because to it’s fee fees, level, necessary don’t smaller tend a and lower to it’s To side middle-sized range see too. performance kind larger the that improvement of

Tobey Sommer

in Okay. get back Thank queue. the I’ll you.

Operator

of Kevin from Steinke Our Research. question comes from Instructions] [Operator Barrington you. Thank next line the

question Your please.

Kevin Steinke

discuss there and little seeing patient of based geographic [indiscernible] those build broadly those maybe hotspots going not vary in your where now on back spikes on patient if health and a to wanted now. care I some clients about May where up areas in COVID more seeing in or are June. volumes trends But right Hi. curious kind just cases you’re still

Jim Roth

Jim. you a of areas. concentrations and at Kevin, up question we’re geographic We the patient your really about volumes seeing this picking is I any was bit lost think And... whether little now but end,

Kevin Steinke

That’s correct.

Jim Roth

Okay. May, we’re to hospitals, is did April. in think anticipated they it house April having the concentrate southeast, was now – still the to national think – in I general, think April there and way I think be of to I do I mean, clear way to and much seeing May. having think I are and Yes. in are – pretty saw – some COVID lot the it certainly, a hotspots, And it they but and back able in we the in I so even patients hotspots and don’t we’re back don’t seemed are – March the And focus their or

not lot So loom a even much it’s places. of now, of issue in to I though an the think obviously right virus continues as

ventilators use a I the learned. of less think on based they’ve is lot what

understanding the I March back they April. they’re because bit they’re think there’s not get it’s I in issues, nonelective nicely to don’t little surgeries I think But differently than And well. as our levels handling when surge a localized it’s is, think to cases. yet, up as to but in not extent – to national XX% so to did and the And issue, – have there’s come back a margins it back that normal much trying – access it’s some again, and not this of some the or at in widespread begun cases, more XX% the certainly kind more

Kevin Steinke

into of than going even back Yes. already, U.S. COVID – in complete because were ask but answered going cases into kind was or in led what just of they it That next are they kind mean daily triple it I hospitals aren’t mode to what the like you I like May, but sounds more shutdown then. and actually say, April back did Okay.

in dramatic it necessarily And so this other procedures drop-off sounds not before, and elective did seeing you’re like you like.

Jim Roth

they have area again, know they’re they they if time probably – we’re then think that I on different But but it clearly what a situation. knew differently. That’s – learning knew And mean, very this. that my correct. things learned of back hospitals today, I I around, think been today have suspect handling would expertise, I this it’s not if all

kind I in deal creative has to in you’re some So try think begin hospitals what our are I the of even impact, of innovative Home big to shape and example, waves do going that where hotspots, of to with for do stand can right to That learning capabilities better think as of referenced hospital. patients. more know them. and Medically they’re hospitals we the and potential they virtual and more be who terms were having up they way the can they and see able so in that’s a get California, I we now, that more the

Mark Hussey

down Yes. their The their in elective a lot hospitals that, initial waves, comment I’ll you hospitals with And that had capacity. shutting that everything add to this saw doing ICUs had just I is never at procedures. of you think in really the

procedures. to where those of into settings, of was taking have is by get to of some actually getting lot And to time virtue were taken And hospital so the think engaging back. that’s there in patient comfort elective volumes they patients to the that I and element related back impact not level now the so partially of system out a

going practice a this in a little good I of to fact, keep he while, here think In is things kind the slower little replacement. our a thing He’s needs that is really example normal and care, wait of health a to sure, a going knee than for while.

Jim Roth

of think I come you a out through hospitals made of and a funding, once net-net, the But in as thought I’ll the has received the well kind point some when of has additional look for – of the I that of that some for post-COVID back them. go not thing some losses material go federal the case were That’s education. for think if just lot at after they federal is other weren’t government. and The as end, get funding difference from think hospitals I after they you to the bad funding the – they in able as

anticipated. April in struggling, have they’re I back it might May. shape So there’s better than that. been the think in slightly But in early still They question about no of they’re they and thick

Kevin Steinke

wanted talk the Okay. pretty be looking implies just full the half, about what is to relative demand It the gave mid-single-digit year business the there a like half. in helpful. That’s guidance second as in first steady that the outlook you growth for slowdown to I saw although well. Great. you advisory would in sounds at

some know there. or visibility softer or So I you’re that’s limited don’t trends demand just actually if seeing conservatism some

advisory the in commentary half? on Just outlook business for second more any

John Kelly

the start, hand over Mark business answer, with to I then can more the think some it perspective. for Kevin, I mathematical I’ll

I think of it’s couple things. a

I it a they a the think nice record second first, had call, really Like half we quarter of said on first the in was the year. quarter.

out third just and strong what we the that about feel of for and So market. the very not good other is fourth be there represents very some extrapolating we then comp. caution item into fourth quarter, just the was that about in the quarter And them, XXXX more though, probably record a would see difficult

in it’s first the So trying great the half we to by I we think time cautious really get just a the fourth the activity quarter. tougher be potentially and given comp to balanced and saw

Mark Hussey

Yes.

I think that’s right. exactly

emerge you areas going I arguably, saw some it to coming are changed underlying there. driving your dramatically because need the reviewing we businesses, there the softness and conservative strategic is somewhat those into recover. are were really nothing that and again, is some trends a how And strategically, think what even has of now positions COVID for

like we for conservative I’d taking So business fairly to think are, a outlook the stance advisory. again, on

Jim Roth

Jim. – And also it’s

been, in looking for at businesses. kind evolving in mean, and X at and downs it’s I terms over the Just the is think, just us in look and at of months time point ups our I be think way we economy whatever anything at it’s I general, conservative way we this look all in this everything just hard we’re of when else, the last, the of the to but

beneficial is probably will things take be think clients a our that us. realistic for to trying for conservative we’re hope and in So materialize we what a but and view way beneficial that

Kevin Steinke

the as – to three pessimistic. as you uneven about you laid this and out, recovery out Would you and kind Or weaker relative how assume kind wanted fourth pinpoint playing that and then how it, in of you so recovery then the plays is had And I to quarter? optimistic, scenarios, you say of quarter out well to of you base to I resurgences Great. last see thinking to that slow put there? starting due at how kind sporadic a out Okay. about how case, COVID? just in scenarios different tracking could see are it I quarter case some guess, third talk a base point you’re that the which mean

John Kelly

Kevin, I start. John. can it’s

varied all different this for mean Just we just give scenarios. what and that Huron, trying very And for to give through at might business. much little by to the and back our those go obviously were a of a was that markets been was to answer our beginning on we’ve disruption size through. I – And context end about all think it scenarios answer fits wasn’t that that how segment. it an flow one really

So for say to I’d we’re of rebound in mid-June. way had trending – is care probably more the first they we’re seeing base quarter, the optimistic That’s base our were line the second case I’d as quarter. say seen the that the the say we that the the had the of the those we the pipeline, in we’ve quarter that that relative some health sort whereas of and the part performance with activity expected. in down segment, that at between perspective in I’d optimistic end improved utilization actual

the optimistic Advisory team, case. The I during demand. was quarter. The I it’s it’s more strategy expected. base quarter think second been the what business had very like is, there the and have quarter. one perspective technology our softer record the the think, for They’ve a towards mitigating It Business For a distressed factor second we been business trending segment, strong versus seen overall

pretty a in would good out timing would perspective, We’re going base then this medium and were whether scenarios in on anticipating a be there their And Education short was whether – a what offerings it be case. longer more happen that in that pessimistic the the we here or a about explicit fall determinant least we feel still term. the but we the term from case about at big the softer quarter, third real put side, to

I a on so bit point is TBD what little And based that, think, this happens. at

To – get more get to at back able towards and I are think that not term. short surge puts timing that with us case. schools little campus, pessimistic that a the campus, line the in during I if might a to back extent the able put they’re least to perspective, the continues that in think From that, case. that us to the more the base

Kevin Steinke

had That appreciate I color. excellent That’s all was it. Okay. I today. Thanks.

Operator

you. remarks. Thank Seeing any more to to Roth like back over no Mr. questions, turn for the call further I’d

Jim Roth

afternoon. again you Have for with We spending quarter us this November with look when forward much Thank time we a you to great speaking announce in third very day. our results.

Operator

This Thank your conference. you, ladies and gentlemen, program. participation today’s in conclude does the for

now You disconnect. Good may day.

Huron Consulting (HURN) 1 Aug 202020 Q2 Earnings call transcript