HURN - Earnings call transcript Q3 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 third quarter 2020. At this time, all conference call lines are in a listen-only mode. Later, we will conduct a question-and-answer session for conference participant and instructions will follow at that time.

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

Jim Roth

to Group's Consulting welcome XXXX quarter are With Kelly, call. and and and Financial earnings afternoon Good President Huron John third today Operating our Mark me Officer. Hussey, Chief our Officer Chief

flow quarter the we anticipated. were declining Our were with line X% revenues prior our while over quarter expectations, cash better third year than in and margins

few management among our EPS significant focus segment improve distressed increased year I our John updated and analytics increase guidance the proactive in savings technology us on has adjusted efforts advisory offerings and for minutes. Growth full will and solid using more Continued around operations. delivered and demand in guidance. enabled reflected to the commercial EBITDA our companywide quarter third color to clients advisory our provide and their business XXXX adjusted in a cost

education meet team As our while our position create industries. pandemic, and pandemic fortify our In has to impacts both to the ongoing in to needs. been ongoing to clients response clients' well has our disruption healthcare continuing continued documented, the for and opportunities measures of evolving financial market

in solid beginning profitable on growth We the to generated strategy XXXX. at and execute drive continue to of XXXX results our five-year which

provided pandemic. for have with position flexibility has weather that actions several challenges. following to on the current to foundation we built focused remain strong the growth will years a last Huron us And return over priorities Our the

drivers I our on including will emerging provide recent acquisition allow continue opportunities financial ForceIQ. the businesses Our us quarter of our our our insight and our performance each additional on and position remainder for of into to growth, the of for performance then expectations third in the for demand now color market share to capitalize some XXXX. and

third very the future. healthy impacts demand ago different and solid questions The clients demand Business our quarter. advisory of from and continue to turnaround of what in delivery changes post-COVID recovered intense remain will to by levels. the our four sales facing the most quarter-over-quarter and to academic services. health We X% into to pandemic [ph] XXs technology increased past payor based Utilization most declined about revenues resulting for low below revenues XXXX, challenges telehealth this for the result year us healthcare building strategic fundamental margin XX% the lower volumes, in clients digital, over driving questions, on clients, quarter driven segment, will is distressed pipeline. related During mix commercial primary analytics advisory are position by our our The volumes to our grew restructuring to and a among due changes for offerings. dramatically and financial them third other from models. when primarily has service COVID-XX help return historical business pressures segment industry patient significant primarily but in us clients in our pipeline performance these reaching medical levels their Driven three models. to out Hospital and and segment impact a cases build quarter, and pre-COVID cautiously volumes remain increased costs optimistic system months, in to have enabled the and center in

done gets demand transformation decisions. technology digital seen in every better analytic their nearly strong how has efficiencies, has make to our This and engage drive better the as data-driven operational need to their addition, accelerate for they digital, resulted In customers work company with rethink and offerings.

COVID Our no have legacy period the exception. and the ES&A strong business seen third and demand quarter was throughout advisory practices

distressed VXlocity believe offerings, We the solid the to ES&A our acquisition and technology [indiscernible]. of well to quarter business. strengthens see demand of Salesforce announced advisory digital continue for which offerings continue we the technology our Indicative growth ForceIQ our our our future capabilities fourth in and within will of for expectations closing and as demand analytic in today

enhances existing ForceIQ they industries excels and the position how interact customers Together business, Salesforce as helping ForceIQ our one digitally approach of in Salesforce our clients with leading scale. with rethink at partners.

additional to technology payor to and in largest some Huron organizations. of provided ForceIQ also innovation the experience having healthcare brings depth digital

as clients year education first half of Our we were campus higher learning the declined for the their immense sustainability online funding to revenue revenues XX universities worked to was students putting which Many focused conversion quarters of enrollments first faced over education quality institutions quarter is models. In while from challenges activities on segment XXXX, business declines and X% the fall cut lower of higher and These backlog Strong business third prior the fueled of pressure and by their [indiscernible] our states time bringing transitioning are this and of budgets. year, as prior in quarters. revenues some were on and segment through impacted the colleges COVID-XX pipeline significantly to significant the declined the growth evaluate term. consecutive third the our have to pandemic. reduced development in safely back second annual

our term how set of strategically is critical and also breadth Our for our role There different is operational likely in [indiscernible] and achieving accommodates while be our achieve term. deep longer education a these long address academic With help what play higher for healthcare, their to organizations of we among an traditional very a are not historical long type new balance sustainable increasing clients knowledge to issues strategic that that demand capabilities, business recognition and help to will clients Similar technological that will a industry the to future. classic increasingly of challenges, norms, the uniquely managing clients of immediate sustainable issues complex and positioned vision term necessitating success. education including offerings. education face advancements a resemble

turn do to for our me tradition Before XXXX, something let few I to outlook a typically XXXX, break not with February. about comments do share and we prior

the month this now are presented. in constraints within the company managing We that has opportunities eighth and the pandemic of

team an to XXXX, do Our including growth through to in returning clients aggressively job and serving during we our focused we five-year are continued each so the of working our are company other of on done supporting Collectively, this time. execution incredible has strategy. and

dramatic in plan the we real we positioned believe sciences quarter market last business, salaries we related while growth exiting to us our growth growth. The merit practice. and finished capacity grow ongoing despite we entire to fuel financial demand measures reducing the capacity a the for currently increases better the believe XXXX momentum and still we we well as company, the actions recently clients providing a the foundation of We our margins We our which we and align to for market strong our of proactive workforce targeted strong the will and delaying services had to week within companywide during create XXXX for for As manage expand among areas estate proactive position another we solid cost results these our can a uncertainty stabilizes. the measures took in our strengthen footprint with of organic with economic across life amidst the businesses first year, us in delivery including business employee our non-core our anticipate year need in with which ongoing ongoing disruptions, return certain base, uncertainty adjusting workforce disruption amidst took from our market. and business our

turn for to year. the outlook Now let me our

We per are $X.XX. to to the our businesses now businesses portfolio. our operational earnings in sectors to technology $XXX and commercial strategy a $X.XX diluted adjusted of the million overall revenues. guidance and narrowing commercial increasing models. of importance in the to different of guidance very XX.X% well-positioned clients' of $XXX our emergence adjusted XX% and million expect of EBITDA range most annual a range These share demonstrated increasing our to of respond to We economic our environment as midpoint XXXX revenue to range The address needs are has to the business

and in XXXX. are We future education expect element a healthcare no industries continued to doubt growth to in There excited of about well the them perform success. is our of that these growth continue our and critical the businesses remains we

all business and across hospitals sustainable working clients to closely future and facing. three working are ensure will environment to operational to segments have term The driver appropriately operational positioned our and with for be our eases. is that clearly near technology with models perspective going pandemic address are when what that are from different growth of a We that very the the they a issues of our be universities they strategic, clients

better no Huron. than those challenges, For is other prepared firm

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

John Kelly

everyone. afternoon Jim you Thank good and

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

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

is quarter included Our not recent ForceIQ results. in third acquisition of our financial

fourth ForceIQ advisory the will segment business in XXXX. included in of be beginning the quarter

the for $XX.X some diluted distressed third down net in of Adjusted the decline growth in compared by our per same offset revenue quarter let segments, of or the compared or the $X.XX quarter in and $XX year. of the the technology period revenues or the the advisory from was was advisory organic $XXX.X quarter the share me diluted XXXX million, segment. share healthcare driven in walk income in $XXX.X XXXX. million the share X.X% million diluted the income you quarter. to in Revenues $XX.X diluted in net prior million partially quarter XXXX business Now in $X.XX decline by share of The third per of financial results million $X.XX key and by within million in same in the for The non-GAAP per driven third income of per and quarter. to or Net in $X.XX $XX.X reduction analytics in XXXX. was quarter digital, same the the XXXX was offerings were education quarter through

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

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

revenue segment $XX.X compared The few operating revenues and XXXX. decline slower quarter reflects healthcare quarter of backlog revenue XX.X% or quarter This operating the soft for XX% during COVID-XX quarter digital, of The comments slower each of education revenues distressed our on XXXX, XXXX. the the $X.X XXXX. our segment conversion from as during in businesses, ongoing and the income $XX.X in to business during our for total The in generated in XXXX. impact business $XX.X margin XXXX QX in lower attributable decline the education was quarter billable technology up a practices. the our XXXX. quarter third margin decrease XXXX, margin utilization. segment of our related impact XX% performance posted consultant The revenues XXXX. third about to XX.X% to in the the professionals, the conversion and primarily of COVID-XX new well in expense backlog XX.X% advisory million of The business income the third was generated X.X% utilization the QX margin make in down pipeline primarily quarter-over-quarter analytics due assets outside operating across for will reflects company decline in for These by of of on of and to million for in in third of quarter. QX strategy plan, bill offerings. advisory pandemic compared for I advisory Segment segment same the segment was company XX% of other our posted million salaries, margin during The XXXX of $X.X quarter third pandemic plan. decrease facilities the was utilization that quarter rates segment and offset partially the decrease XXXX down revenues of due the corporate to advisory million third technology professional during reduced Other for related million as was $XX the The total The in support or pipeline of of company same QX quarter-over-quarter for in The business XXXX. liability XX.X% in year-to-date new in level XXXX, XXXX. third generated due expenses quarter for The million corporate XX.X% the in same lower the gain were in The to increase quarter quarter. and billable which of performance QX revenues our our was was QX value million for XXXX. compensation segments. $XX soft income XXXX corporate expenses other compared margin were bonus in the Operating million related for driven savings and compensation fees, the ongoing the Now not deferred fund of revenue third reduced expense by for consultant by to stock market quarter to and of healthcare The posted QX or personnel, total XXXX. to in of performance revenues million $X.X with general in the for reduction primarily The X.X% quarter. increase during the XX.X% offset bonus multiple $XX.X increases the XX.X% distressed in increase our from a revenue-generating in reflecting was savings the income used of categories. expenses at allocated during primarily segment expenses was quarter-over-quarter compared

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

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

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

we was and cash proactive by driven companywide. quarter in the cost the continued in in reduction than free flow Our quarter better DSO anticipated, the efforts management

collections in COVID-XX ongoing manage proactively debt September, operations. the material decrease. have position support net any continued our not continue our Given to our to degradation to our cash seen we Through pandemic, has we cash and

run primary generated we be Jim will to measures recently of took base $XX These two our savings in cost approximately mentioned, million. As rate driving manage proactive areas. savings annualized

First, in economic services our continued given the our year. of certain to for earlier pandemic the yet the returned in ongoing areas uncertainty, demand broader we had levels business, not and anticipated has

reduction force As executed our of such, our personnel the parts disruption that recently support by certain we been and a have in market. in targeted corporate the in business most impacted

Second, all substantially we while current our geographies. have reduce to footprint in a our remaining real estate plan of

certain further drive implemented also measures, avoidance delayed we XXXX all including will believe, we merit addition, in have savings. In increases cost that, for employees

strategy drug ending and consistent sciences we safety This foundation in long small focus greatest offering, to the believe amidst growth are our the aligned we investment occur to in business areas of are will sciences and proactive measures non-core strategy, more from which disruption practice. which financial a life us create position that commercial ongoing Lastly, then the see and strengthen we margins and opportunities. allow to small fourth grow can life our our these with will quarter, in term XXXX. is our our We anticipate where our a expand the part we exit,

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

our noted, Jim our range recent $XXX of and full are guidance the year XXXX acquisition $XXX the we to revenue ForceIQ. midpoint million, narrowing million of increasing to inclusive As of

in be a $XXX to effective expect to cash full to year for a anticipate adjusted per adjusted year and to addition, an our million. XX% approximately our XX% now range are range In XX.X% now earnings from $X.XX. to $XXX diluted in revenues flows of a We non-GAAP increase be tax EBITDA full we of in to year million be raising of rate the guidance in $X.XX full range and year operations share of

our costs, be internally software and capital $XX inclusive for $XX year, interest cash while disciplined be net foundation million, year now and expect expand of to which to grow to in approximately to In can to taking everyone. excluding margins a we I for a to of and to growth million $XX free can XXXX. million we expenditures investing managing Thanks call closing, in range compensation. cash flow of $XX like the costs are million non-cash for developed up from and profitable we stock in the and taxes We approach creating are would a Operator? the we opportunities open believe questions. where

Operator

Instructions]. [Operator

from William Blair. Andrew Our first Please of Nicholas question proceed. line from the comes

Andrew Nicholas

restructuring With just then you something can of Hi. Good kind afternoon. for you headcount focusing a detail has a share materially that the And respect firm? this would to the about the where on was putting I And led was last decision the you also, demand plan, what or of bit quarters? hoping level pipeline a at be week? are more changed to that Or couple you make something picture changes?

Jim Roth

John, will to take part. that? do of I take you first want second And the the part

John Kelly

That sounds good, Jim.

approximately So and XX both our our education. in It's approximately in it's XX the roles from eliminated. roles business strategy Approximately approximately were life in Andrew, healthcare corporate total, And in XX then sciences approximately roles XXX that it's advisory roles team. and segment. business

most if, teams. kind get So decision of of of want those Jim, reductions? the kind to color I little of the around process don’t breakout a that's bit you related to know for the

Jim Roth

July decisions early this hardest hit eight of in May that in three chance one we with if headcount. probably in months we people. based so we had where to our was we the easing beginning last along at in again in may things hope some again of in that we, to timeframe first of be kind had adopted things normal, early later and next to be to just we, on course And relatively process. our we some are ease the quarterly having. our and about forecasts hopefully said the during Not pandemic and have to would the had would keep clients be thought March, timeframe we most April, points the the begin was probably Andrew, challenges others, respect And June, was the modest a then would And return that how, all, hospital were this making timeframe have And adjust the going that some completely the -- fall. that where point with major to the to back were able we thought of at summer but hospitals so time. of the when were in again, that normal, to ease Yes.

it think be we when that's I of that developing sense apparent calendar it parts that to on, of time as to things than is there going place became were in say, well. forecast rather at market. particularly certainly in back into the other are really and decided a game -- of just rolled going to that current that summer that some normal are this is guessing the things return to in doing September anywhere not changes as certain started are during are our to very there we we And as point at close taking when And are in to to our terms September normal, increasingly still reacting the stabilizing get year. our this company

protracted clients. September plan made impact So of on began our really in decisions. the more mostly we our for a October, And possible early it when to we virus was and that's

Andrew Nicholas

complementary? acquisition And contribution, a of material? would capabilities that in you in leverage a practices on you. to maybe the just your terms areas company? if exiting Got mean there on it. was is hope and could topic. That's little the more are then separate it follow-up of how the any revenue the on helpful. ForceIQ where I a most size color And bit acquisition Thank of then within terms say its wondering as What you if anything

John Kelly

platform. financial on Hussey I I over Andrew, it get Mark will probably the and Sure. then perspective some parameters to with can hand the it into ES&A to how start fits

revenue single will contribution be our financial parameters that our year, high it perspective, company. to digit is a from expectation next the So

this of $X contribution from of quarter million $X and mid don’t ES&A then full year, an that. to And we from perspective, year on all sort we in will fourth commentary the the periods, are to year, to we it revenues, very on similar practice, perspective. like expect something it year perspective. with profile on a be EPS it upper if probably to teens EBITDA the And thinking million this I the know margin the you can team? fourth accretive Mark, next provide in the expect ES&A quarter fits be some how During

Mark Hussey

Yes. Sure. I am happy to do that.

So Andrew, solutions VXlocity that is built areas platform in, And the leading industry-specific natively on focused mobile and working in software. and energy for health, insurance, utility. is the already it's quite we Salesforce it actually so provider like areas of are

for take folks solution. us So it's some and to continue had play in a marketplace. the good We evolve industry-focused working had experience very a practice it our these to with Salesforce to

to So closely. was align made those book but for more deals one was of it along. that us It sense just not came basically in the

excited the are it And about so Salesforce means of what the pretty practice. part we for

Andrew Nicholas

helpful. I bit Thank you. the what additional the unpack pressure sequential segment. of education would you. I you guidance, was then you could be more on or million from topline, terms if kind it’s On maybe a in you the fourth quarter sequential segments? Thank so. little each like in. Great. And decline, expecting a But one are the of mostly $X any other in wondering if me squeezing at that looks least decline of it color assume implied don’t mind of

John Kelly

sequential one. of third correct. really are based take can little two a versus fourth that bit actually, segments calendar. on But you in you then more the quarter the I sequentially It's well, Andrew, is are pressure there other on some as if Sure. just pressure probably It's quarter, looking education.

so less if day are at But actually than we it business the which quarter, there fourth is cautious is from bit there. in quarter days business perspective, And being third the little a insignificant. two a probably you look

delivering are has where be also baked It's into PTO a some days. already to is, restrictions then remote expecting going are from of for we a travel it's the conjunction with You with have the piece we time is been, catch-up the be the the short holidays and during perspective people we there taking effort there and a below that year. from quarter. got by the usually on rough the during the fourth be holidays would a this quarter at it's just final our PTO perspective. And in to year all been couple pacing And fourth

So that's it naturally a come little just education, the across expect of from do business, as But creates pressure. of we kind sequentially suggested. you it, to majority the

Andrew Nicholas

a Thanks sense. lot. Makes

Operator

Instructions]. [Operator

line next Steinke Research. question Our the Kevin comes from of Barrington with

Your line is now open.

Kevin Steinke

Hi. afternoon. Good

So I wanted and to margin ask about flow expected. than cash better you mentioned

planned? you revenue [ph] You about talked reductions. offsetting can just had talk cost the why more had how about XX% initially with of decline Maybe or that trended favorably you than

John Kelly

third had spend savings third-party modestly related would to like natural coupled revenue driver expected. three say what meetings the management for on as probably cautious and I all travel what characterize of we management Kevin, drove reduced It really had quarter the expense that part, as right most across now, some segments being the the expected well And spend I environment what versus an firm, and was across just the And think like careful areas. things during and better we very I that third marketing really headcount, than on can spending for that. then that. in improvement it, quarter. corporate jump our as was with the was I reduced primary

flow we year. there for in. $X than DSO in things And to projected. those additional DSO anticipated. is the I modeled higher flow-through produced nice then of model from was we XX quarter that combination of had of savings of with probably which remainder million EBITDA would versus quantify had the So coupled what two what the from part that about of the didn’t really we decrease days days cash steady perspective, the XX a down that We expense

So during us sales get quarter. to that those pickup the the in nice six a really was door for

Kevin Steinke

education segment, having the the just students [indiscernible] the we in kind your of going Great. mix swing to kind helpful. how [indiscernible] that’s guess? when back campus Okay. about And or terms in impacted fall have a I of factor think there, That's base talked them growth about having wondering, being client of you not

Jim Roth

Jim. is will one. it that I Kevin, take

up You broke bit. little a

think I most though. question, the I heard So of

a of now. think, is with there obviously our right lot uncertainty clients I

hand, way, the more of a sometimes couple proceeding despite they the are wanted. the fall having On along one than with kids semester, disruptions away they

it generally to I than was technology better now be think semester. in considered spring is the back the

are are would they much higher I getting and expected. most of then the through probably than So a describe this students than cost base I with fewer process, through. had expected getting they although think universities

world is our not ending, clients' the perspective. So from

uncertainties. back, I nobody think spring. used lot would wouldn't there clients it even of a and be be But that It be are to great, on be It probably having probably would terrible. for wouldn’t that some our a it the case right bad now. say, but worst campus be wouldn't I in

getting our little And fall think kind in can the that's What manage that is this and lot a the nontraditional lot get to been lot terms model. they clients business figure going higher more worries this entrance actually valid So are of of clients confident getting their about lot I their there I has I right there like the uncertainty market? their out, what is on kind they Are be I a think fall point to terms technology of in of into like demand, right that the pricing. some right for be something? in with a The of go going I where XXXX a the in like And bit had where ERP we of to a their forward expect implementations, at of with beginning traction to look one of their And some then overall them, about thing of and that staff basis. there of now the and a deferring what But of a looks at And that could they student I deferred are the with are think schools deliver they is the what the look going focus issue will really think that required trying to very is importance about things our think for cloud expect they capability does to year. are so the is world going through really that's and us lot can past of say they last are it they our they now. now. now can facing with of ed are more students, of current seeing is through XXXX. that, terms alumni, been of having what

those that though will even of see would do of we of year. have that there normally deferral So XXXX, I some of the some a think in resumption we engagements been those during expected coming have some calendar

Kevin Steinke

think you I for you quarter? in just meaningful call But Great. categorize you such? COVID know anything to quarter. specific to as if third the called generate had would quarter, revenue I kind the out what did healthcare And during you would wondering the second Okay. any it of response

John Kelly

had had had We project clients and Kevin. that work-related consulting quarter. And to work. similar needs. tracing with our Medically helped did, projects we to implementation. technology testing areas what We then We Home telemedicine about capacity last We had talked we laboratory

still would quarter. to level similar were quarter relevant described have we factors at those all a what this second the in So

Kevin Steinke

partial remote Okay. demand of of is hybrid that forward? work in downsize And the type with the softer the response going to estate kind from contemplating Or kind footprint, to now? real your more sort just home, right of is plan some that arrangement

Jim Roth

Kevin. take one. can that I

don't that know all And that we all going know to working forever. like space. we we exactly we figure our people existing stay prior to own, tried out very home our in to think with to As going also all of unlikely that here evaluation they I time, go comfortable of we our amount what's back our what most feel feasible I think a whatever did and exactly talked it's we and usage are think don’t happen. we at fair to it's then of evolves did a COVID. lot to looked going I of spend to kind are of from We

we ground we going this needs there middle that when our I the think to out much what space be. And we are are is So pretty think middle it's ground. contemplating modeling started

us our And of want to some you so to redo to go that's anything add what's enabled and John, back footprint. that?

John Kelly

No.

I think that’s well said, Jim.

I looked some deploying think we dollars more of of referenced. think that be our flexible and But CapEx for some how environment piece as from to teaming that's more a describe Jim of plans model will the the to to we explained probably outside have environments perspective. collaborative in But we we allow you think this of will normal a big of facilitate year. of I at it of people reconfigure floor type But any hotelling realm I that CapEx think that sort it. I

Kevin Steinke

for questions. the Okay. now. all Thanks I for That’s had taking

John Kelly

Thanks Kevin.

Operator

Thank you.

of line comes from Truist next question Tobey Our Securities. from the Sommer

Your open. now line is

Tobey Sommer

could of of getting for you. momentum Thank the healthcare had put elective to new with some of practice conditions specifically and context, kind rebound to and hospitals want talk what traction into how just we I outside new and ramping kind what Hi. be the for in projects? may projects? was I in respect in metric you wondering you more Thanks. to are for at mind, if kind procedures best curious about gating to I the factors look was of

Jim Roth

a complicated will I question. to answer Jim. partial is a this give Tobey, So

volumes as are part the starters, part are the to early one of factors. indicated For be Volumes they in lot they needed are where not clearly going But certainly of of script, we is the and to there important that. be. an a are

for some them I levels aren't pre-COVID return think time. places most expecting to to

economic pressure that that number still hospitals. unbalanced things So having kind think now the a on of are on one. also and you What that on are puts margins. recovery pressure margin and puts side pressure a because relatively more Medicaid more That's the I payor of people the on of is has lot put

to got transition at telehealth be peaked in patient have to be to it above back April. the below be, is You going normal March and it encounters will and includes how what it well used well much even that the what though of

at coming take think be just this the it overall I creates expensive So they factors used in than of just care through. and more is those to actually have lot to have put a in got provision they that point because to and processes time it have all of all the

So and continue they of and margins of what to you kind a put do to over need altogether concern to do. the the there is lot just ability it

I So we better at those worse, across can trends, for pressure more for in I But think this figure And healthcare. that try going to to trends for one the envision you and look good of to out margin and in to think, is tend happen. I or collectively, be think going us. that future the more what's board those

develop to that like margins We can that have above we the specific the achieve where and normal capabilities is clinical define try are very some model what and make our to our beyond, going just in are that programs and really clients help reasonable to initiating look improvement our performance they goal, future. we still trying designs business

in serious provide. were bode they adjustments. model the volumes very of make they same still business basis. business pandemic even will similar have place. going is to for and future, historical their it's to on going lot are in the where And sufficiently think to look to different levels, at taking the to the that that’s were we to take still Huron tends higher I be environment And And miraculously the even a going is, if really go be the the That some a say ed. I still seeing And a to are is discussions we revisit ease, where our what well have if forward somewhat to are so that future services

John Kelly

I the say, just right actually add to commentary will our pipeline Jim, quite strong And to is now.

type it's we help have And clients that seen do as In time. under we are financial as stress. big is it of fact, the that the majority in improvement projects in performance that pipeline recent of

what make that is again this when doing situation demand knew of on financial what distress the reductions really operate and their have call structure from in the mix comment give another a of Jim pipeline a we about and healthcare those The what extra a implementation are their transformation our and on related just the to part systems just the our headcount based perspective how this based earlier seeing those I in we were quite healthcare And pipeline clients we would that's to offerings. So things. and there. nontraditional did was we Home started then touching of color the the a on at anticipated for dealing with. talked lot we perspective is strong. And from is And dive we a and it's within PI increased see business, demand cost they None business, in on practice. of care are some deeper health Medically

far now. as the had unfolding it's that needing right are we help those in as as anticipated So areas of viewpoint a lot clients

Tobey Sommer

going momentum as you rates how And bill have, the closing you out That characterize question. be, that on next would and pricing are whether to you. comment year my where Thank and could year? you was next into enter you dovetails you seeing

John Kelly

maybe take one Tobey. by I that segment, will

think us get preserves arrangements that's client quarter them. after And in I but perspective fourth where are for client they clients, more attractive of to projects. So a from third to it that's that actual perspective, it that healthcare don't having right indicative see bill the I legally the But the a would market contingent-based rates a in $XXX. with of was our on working bill excess performance-based and something forecast so types a that it's pay the savings with now I still it particularly being quarter quarter. before strong we where of those from the fee rate is know

further forecast some for And But point. in $XXX-plus I area. has conversion decline more be environment it's There again this rate bill see you very I Though area necessarily probably rate of that the competitive. in relatively quarter a that that did time the I competitors projects the foreseeable right the now it's rate. advisory to the think an bill the And think been necessarily I going bill still count for rates strong experienced education think we some perspective, a healthcare. slowdown where business dip reasonable say, then wouldn't for aggressive in I bill So at would about are does perspective, this From in for future. reflect general bill say, a of and pipeline fourth rate bill see we have quarter. of in there, a the a become mid-XXXs. on a I would don't might to business from part that rates in

but rates We is in our have advisory at demand an distressed the environment where continue competitive there. the bill very technology to a there same practice strong practice, it's, robust given the environment It’s demand. for time,

there during rebound the in I say, third the some rates to bill there. steady rates little pretty the side, quarters. perspective, are quarter. were probably bill So And lower bit strategic from expect upcoming a would strategy be then on consulting a perspective, consulting We

Tobey Sommer

segment healthcare you does high, and pipeline performance of your to And and the any guess the rates the profitability segment? being you. does that in pipeline? as what inform difference I how within improvement, in bill future and Thank particularly the described as that profile pricing between in the view the of the the looks Is margin and current there kind reported quarter what like complexion third you

John Kelly

I think I think pricing the third a healthcare. again perspective, quarter pricing good a from it was in in quarter

that bit. So little a might moderate

the do helps our that our be some in that on something to on we think those pipeline. projects time, that I And improve are should margin. EBITDA expect, utilization over of

a that range during in XXXX. year-to-date, think It or We quarter fourth XX% bill margin but won't where the for to that’s the probably because overnight as in in at demand. the still we first I I at take will the up the those lower XX%-plus healthcare. happen And look we that goes second been this during rate or and the are over the and year-to-date that quarter what as see meet as what XXXX. pipeline strong the year healthier it margins of you kind on expectation, will of historically that likely Ad even progresses time. quarter improve a in we in point, than But of more are year rates, is the to that metric expect, now in business see was up will year-to-date, that see utilization the what's we we utilization on some ramp based

Jim Roth

Jim. to one comments. truly this our of is always I Toney, Market is effectively business. thing kind will share a just of add hard to thing John's kind in gauge

we market Now throughout throughout eight that we We our lost any the last gained that, share. sense this, having is, all said months, have, is some. probably have our sense

probably I steadiness think of And the these the are rates, really puts needs. have clients are reflects The the of and the firms that the very I address experience rates billing on facing where well focus positioned. the issues we some bill that's to our think that. of intensity really that complexity

are or take work think pressure an less more had hospitals earlier in complicated is additional for and this that the back spring where well, materializing universities the time the crisis when either from that is the good perspective, And students really busy this business us particularly we well. way dealing on just fall is back in from terms competitive we that that's premium some great strategic are clients So revenue ability feel for for and somebody our on really have such in point extent the you is on been knows I want a absolute really such to experience at have I sense campus. and But clients. an credentials. COVID dealing know and they got this while there about with They that firms facing in our the business to issues of having because the

Tobey Sommer

Thank you.

Operator

Thank you.

the from from comes Benchmark Our Sutherland of Bill The question next Company. line

now is open. line Your

Bill Sutherland

research little strategy if Thanks maybe But as the mine on on about other the terms of and think based wondering and Most could of you have just administration, direction ops? you activity and guys. of was been evening in that a more education get granular I and asked. good technology pipeline

Jim Roth

of give numbers, if by support will John, you general it I comment. a necessary. maybe So kind can

allowed research I just because was has really been be a of done the campus. weren't relatively on period a There strong throughout. couldn’t think when research people lot of time

researchers students. think to to coming able back were I campus quicker than begin

is having, than end stabilized. And up they part pre-COVID. think for have of thing, the even think research so biomedical whole particularly would I that going business, I the this I think, part, And most research would bigger future an to has otherwise throughout

business So pretty steady. The also is steady. strategy very S&O, and operations, is research

intensity now or wanting their and around a trials work are I to new to model based to frequently do to for four practically looking on budget importantly trying future actually doing develop of or three that readjust think they they going more the that’s the work strategic clients are there of in them two or view the of kind more the reality.

And bit. So pre-COVID, technology year, that we had where as certainly part starting have business delayed is to has well actually I continued a the anticipated The that's little things of do some the been where implementations earlier one midyear. think well. larger it in cloud

think won are you beginning And But dormant start we the a couple up. going likely not that's I I so where Certainly pick to clients have quarter. the to and in think get will that are that's seeing. started totally first

with luckily strategy. actually fall is, begin how be will get starting first think on are going and focusing track the to I once their or it's semester can to quarter. in not fact, technology And going with to go second that deal to they terrible think my back that begin on In and back begin I they the guess understand they

John Kelly

strongly the think, having that we is projects record of term, with And are clearly that reminder, projects XXXX, that typically to operating certainly as our in on But a right only we to everything and earlier, they closed feel the good recent which on of in top pent a talking if education they higher know, the they client ultimately, in that delays research do done. not And to a to that come the reality about in And delayed, given education that's Jim, on get U.S., lot some are feel more completed. even Jim up are is to the that, ed environment universities we now pipeline we normalization base, the XXX the to something a through. are times. commenting need very robust in still of that projects when very going longer that, that teams, gone I there I rate look need just of that good But have those we but period as Perhaps environment. And win as feel transition during as in we our similar it's is been. mentioned still healthcare, about this time. in add at

that's our feel good we continue and about work the position to volume in of supports there So competitive pipeline it. the

for the in disruptive business run on that over It's the period good think feel we longer short ed very run. for the been So trending just we where is all higher I understand. a reasons

Bill Sutherland

the does benefits Got. That's in of reflect terms helpful. or the guidance the any anticipated the guidance quarter restructuring fourth John, implied structure? of cost of

John Kelly

Bill. space of the an employees that majority end quarter, be, by from expect first fourth will midway been They to employee that through though of cases that office are still was And minimal through providing going happen very extent, Only we of fourth related the to any some perspective, in the a the actions impacted quarter. service many quarter. has office still to space the employee may move notified. into will Those be

operating going impact fourth is to quarter the from perspective. So results be a minimal

Bill Sutherland

I all That’s Thanks Okay. guys. got.

Operator

[Operator Instructions].

line Research. Steinke Our Barrington next from Kevin the question comes from of

Your line open. is now

Kevin Steinke

Hi. one I follow-up. just had

in all? to at your it we they preparing wondering pipeline the COVID fall to How your pace for the healthcare Just are clients. impacted if as surge that's are seeing relates conversion the reacting And of here?

Jim Roth

a there shut think back and Kevin, you go just COVID anticipated in April, COVID They I the just pace March And better period scheme of time, things, down it gained patients. is the at how treat for I to certainly, when short hitting potential an reality actual that in or been look though and was it's incredible the of mean basically the in is, even was room make you to COVID patients. relatively everything terms devastating. of back knowledge happened first if

of the our I used also the are you younger been keep, to patients more is off as dramatically think getting biggest have But just how kind So hospitals several so ways can much The found length a the got that the have that getting that coming result There be. population That's is extent is that and the Number learned operate in to one, as possible, severity keep the issue virus. normal are of they hospital less. have impacts partly of deal several a it better. COVID of fact have with of than the can that rest less cordon actually to you stay in trying it increasingly they that be. ways. the more illnesses to to

going that in have of that impact think back increase and is it spring. think with with recent devastating even current in close trends I on had so the the I the And earlier don't kind to anything hospitals to even hospitalizations, the this

huge, right other issue a I think that point getting are back is for university will become the I know in sure. in than one I mention a now. more And financial to really support general benefited some appeared that interesting make may post-election, spring point But be the to of support of clients healthcare huge political that actually and lot them federal from that actually So hospitals it's don't clients to for at close money. lot that one the of a the deficits, to think we most actually I what some found some breakeven enabled eased

long current and May. to a it's back going better than be saying, were So situation of way it I the I handled handle think they much March, in think April able to is

Kevin Steinke

Thank That's Okay. very helpful. much. you

Operator

is the over would turn to in There Roth. back you. Thank like queue. to call questions I more the Mr. no

Jim Roth

and of talented this to of to Huron to want with Thank such very at and focused well work representing able every adverse day our I am all so you. be employees work. collaborative And colleagues conditions. unusual thank amidst innovative, fortunate and I company for staying clearly

will part this of our our for be and to conducting We connect quarter, As practice, fourth we evening. process corporate our hope in Thank with this the call regarding February. shareholders afternoon and with encourage normal provide you questions or matters call we look forward of is our during outreach the to in as before have next governance joining nice contact if all you February. wish you Have shareholders to us feedback. to next a call

Operator

your call. conference today's you for concludes Thank That participation. everyone

Huron Consulting (HURN) 3 Nov 202020 Q3 Earnings call transcript