Delaware | 000-50976 | 01-0666114 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification Number) |
-1-
Huron Consulting Group Inc. | ||||
(Registrant) | ||||
Date: April 29, 2010 | /s/ James K. Rojas | |||
James K. Rojas | ||||
Vice President, Chief Financial Officer and Treasurer |
-2-
Exhibit | ||||
Number | Description | |||
99.1 | Press release, dated April 29, 2010 |
| Revenues were $138.9 million for Q1 2010 compared to $151.1 million in Q1 2009. | ||
| Diluted earnings per share from continuing operations for Q1 2010 was $0.14 compared to $0.28 in Q1 2009. | ||
| Average number of full-time billable consultants(2) totaled 1,272 for Q1 2010 compared to 1,471 for Q1 2009, reflecting strategic and cost-reduction actions taken in 2009. Average number of full-time equivalent professionals(5) totaled 994 for Q1 2010 compared to 710 in the same period last year. | ||
| Company reiterates full year 2010 revenue guidance in a range of $600.0 million to $640.0 million. |
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues and reimbursable expenses: |
||||||||
Revenues |
$ | 138,893 | $ | 151,130 | ||||
Reimbursable expenses |
12,673 | 13,412 | ||||||
Total revenues and reimbursable expenses |
151,566 | 164,542 | ||||||
Direct costs and reimbursable expenses (exclusive of
depreciation and amortization shown in operating
expenses): |
||||||||
Direct costs |
94,608 | 96,254 | ||||||
Intangible assets amortization |
886 | 1,686 | ||||||
Reimbursable expenses |
12,724 | 13,438 | ||||||
Total direct costs and reimbursable expenses |
108,218 | 111,378 | ||||||
Operating expenses: |
||||||||
Selling, general and administrative |
30,115 | 33,293 | ||||||
Restatement related expenses |
759 | | ||||||
Depreciation and amortization |
4,644 | 5,572 | ||||||
Total operating expenses |
35,518 | 38,865 | ||||||
Operating income |
7,830 | 14,299 | ||||||
Other income (expense): |
||||||||
Interest expense, net of interest income |
(2,955 | ) | (2,734 | ) | ||||
Other income (expense) |
246 | (473 | ) | |||||
Total other expense |
(2,709 | ) | (3,207 | ) | ||||
Income from continuing operations before income tax expense |
5,121 | 11,092 | ||||||
Income tax expense |
2,205 | 5,478 | ||||||
Net income from continuing operations |
2,916 | 5,614 | ||||||
(Loss) income from discontinued operations, net of tax |
(402 | ) | 1,462 | |||||
Net income |
$ | 2,514 | $ | 7,076 | ||||
Net earnings (loss) per basic share: |
||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.29 | ||||
(Loss) income from discontinued operations, net of tax |
$ | (0.02 | ) | $ | 0.07 | |||
Net income |
$ | 0.12 | $ | 0.36 | ||||
Net earnings (loss) per diluted share: |
||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.28 | ||||
(Loss) income from discontinued operations, net of tax |
$ | (0.02 | ) | $ | 0.07 | |||
Net income |
$ | 0.12 | $ | 0.35 | ||||
Weighted average shares used in calculating earnings (loss) per share: |
||||||||
Basic |
20,296 | 19,528 | ||||||
Diluted |
20,496 | 20,252 |
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 893 | $ | 5,715 | ||||
Receivables from clients, net |
73,520 | 90,543 | ||||||
Unbilled services, net |
48,919 | 37,558 | ||||||
Income tax receivable |
25,555 | 18,911 | ||||||
Deferred income taxes |
8,032 | 16,338 | ||||||
Prepaid expenses and other current assets |
14,981 | 19,437 | ||||||
Current assets of discontinued operations |
4,514 | 4,281 | ||||||
Total current assets |
176,414 | 192,783 | ||||||
Property and equipment, net |
36,009 | 39,147 | ||||||
Deferred income taxes |
19,552 | 21,298 | ||||||
Other non-current assets |
17,088 | 14,383 | ||||||
Intangible assets, net |
20,488 | 22,406 | ||||||
Goodwill |
464,270 | 464,169 | ||||||
Non-current assets of discontinued operations |
| 29 | ||||||
Total assets |
$ | 733,821 | $ | 754,215 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 13,962 | $ | 7,150 | ||||
Accrued expenses |
30,900 | 29,201 | ||||||
Accrued payroll and related benefits |
23,138 | 71,473 | ||||||
Accrued consideration for business acquisitions |
| 63,188 | ||||||
Income tax payable |
601 | 874 | ||||||
Deferred revenues |
14,733 | 13,764 | ||||||
Current portion of capital lease obligations |
202 | 278 | ||||||
Current liabilities of discontinued operations |
2,568 | 7,065 | ||||||
Total current liabilities |
86,104 | 192,993 | ||||||
Non-current liabilities: |
||||||||
Deferred compensation and other liabilities |
6,938 | 6,131 | ||||||
Capital lease obligations, net of current portion |
5 | 5 | ||||||
Bank borrowings |
301,000 | 219,000 | ||||||
Deferred lease incentives |
8,442 | 8,681 | ||||||
Non-current liabilities of discontinued operations |
427 | 416 | ||||||
Total non-current liabilities |
316,812 | 234,233 | ||||||
Stockholders equity |
||||||||
Common stock; $0.01 par value; 500,000,000 shares
authorized; 23,100,312 and 22,624,515 shares issued
at March 31, 2010 and December 31, 2009,
respectively |
217 | 213 | ||||||
Treasury stock, at cost, 1,073,390 and 995,409
shares at March 31, 2010 and December 31, 2009,
respectively |
(54,459 | ) | (51,561 | ) | ||||
Additional paid-in capital |
340,618 | 335,272 | ||||||
Retained earnings |
46,372 | 43,858 | ||||||
Accumulated other comprehensive loss |
(1,843 | ) | (793 | ) | ||||
Total stockholders equity |
330,905 | 326,989 | ||||||
Total liabilities and stockholders equity |
$ | 733,821 | $ | 754,215 | ||||
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 2,514 | $ | 7,076 | ||||
Adjustments to reconcile net income to net cash (used in) provided by
operating activities: |
||||||||
Depreciation and amortization |
5,597 | 7,445 | ||||||
Share-based compensation |
5,965 | 6,638 | ||||||
Non-cash compensation |
| 3,762 | ||||||
Allowances for doubtful accounts and unbilled services |
(1,078 | ) | (1,261 | ) | ||||
Deferred income taxes |
10,382 | 2,931 | ||||||
Changes in operating assets and liabilities, net of businesses acquired: |
||||||||
Decrease in receivables from clients |
15,342 | 630 | ||||||
Increase in unbilled services |
(8,703 | ) | (4,564 | ) | ||||
Increase in current income tax receivable / payable, net |
(7,014 | ) | (49 | ) | ||||
Increase in other assets |
(2,445 | ) | (503 | ) | ||||
Increase in accounts payable and accrued liabilities |
9,213 | 532 | ||||||
Decrease in accrued payroll and related benefits |
(52,784 | ) | (18,838 | ) | ||||
Increase (decrease) in deferred revenues |
966 | (1,747 | ) | |||||
Net cash (used in) provided by operating activities |
(22,045 | ) | 2,052 | |||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment, net |
(566 | ) | (3,598 | ) | ||||
Net investment in life insurance policies |
(171 | ) | (154 | ) | ||||
Purchases of businesses |
(63,277 | ) | (46,203 | ) | ||||
Sale of business |
3,692 | | ||||||
Net cash used in investing activities |
(60,322 | ) | (49,955 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from exercise of stock options |
17 | 43 | ||||||
Shares redeemed for employee tax withholdings |
(1,111 | ) | (1,548 | ) | ||||
Tax (expense) benefit from share-based compensation |
(2,265 | ) | 3,963 | |||||
Proceeds from borrowings under credit facility |
162,000 | 100,500 | ||||||
Repayments on credit facility |
(80,000 | ) | (59,000 | ) | ||||
Payments of capital lease obligations |
(76 | ) | (98 | ) | ||||
Net cash provided by financing activities |
78,565 | 43,860 | ||||||
Effect of exchange rate changes on cash |
(789 | ) | (497 | ) | ||||
Net decrease in cash and cash equivalents |
(4,591 | ) | (4,540 | ) | ||||
Cash and cash equivalents at beginning of the period |
6,459 | 14,106 | ||||||
Cash and cash equivalents at end of the period(*) |
$ | 1,868 | $ | 9,566 | ||||
* | Cash and cash equivalents presented herein includes $975 thousand and $919 thousand of cash and cash equivalents classified as discontinued operations as of March 31, 2010 and 2009, respectively. |
Three Months Ended | Percent | |||||||||||
March 31, | Increase | |||||||||||
2010 | 2009 | (Decrease) | ||||||||||
Segment and Consolidated Operating Results (in thousands): |
||||||||||||
Health and Education Consulting: |
||||||||||||
Revenues |
$ | 76,914 | $ | 92,022 | (16.4 | %) | ||||||
Operating income (1) |
$ | 21,066 | $ | 33,640 | (37.4 | %) | ||||||
Segment operating income as a percent of segment revenues |
27.4 | % | 36.6 | % | ||||||||
Legal Consulting: |
||||||||||||
Revenues |
$ | 33,105 | $ | 22,868 | 44.8 | % | ||||||
Operating income |
$ | 7,419 | $ | 3,241 | 128.9 | % | ||||||
Segment operating income as a percent of segment revenues |
22.4 | % | 14.2 | % | ||||||||
Financial Consulting: |
||||||||||||
Revenues |
$ | 28,874 | $ | 36,240 | (20.3 | %) | ||||||
Operating income (1) |
$ | 4,723 | $ | 5,598 | (15.6 | %) | ||||||
Segment operating income as a percent of segment revenues |
16.4 | % | 15.4 | % | ||||||||
Total Company: |
||||||||||||
Revenues |
$ | 138,893 | $ | 151,130 | (8.1 | %) | ||||||
Reimbursable expenses |
12,673 | 13,412 | (5.5 | %) | ||||||||
Total revenues and reimbursable expenses |
$ | 151,566 | $ | 164,542 | (7.9 | %) | ||||||
Statement of operations reconciliation: |
||||||||||||
Segment operating income |
$ | 33,208 | $ | 42,479 | (21.8 | %) | ||||||
Charges not allocated at the segment level: |
||||||||||||
Other selling, general and administrative expenses |
20,734 | 22,608 | (8.3 | %) | ||||||||
Depreciation and amortization expense |
4,644 | 5,572 | (16.7 | %) | ||||||||
Total operating income |
7,830 | 14,299 | (45.2 | %) | ||||||||
Other expense, net |
(2,709 | ) | (3,207 | ) | (15.5 | %) | ||||||
Income from continuing operations before income tax expense |
$ | 5,121 | $ | 11,092 | (53.8 | %) | ||||||
Other Operating Data: |
||||||||||||
Number of full-time billable consultants (at period end) (2): |
||||||||||||
Health and Education Consulting |
847 | 895 | (5.4 | %) | ||||||||
Legal Consulting |
127 | 161 | (21.1 | %) | ||||||||
Financial Consulting |
261 | 399 | (34.6 | %) | ||||||||
Total |
1,235 | 1,455 | (15.1 | %) | ||||||||
Average number of full-time billable consultants (for the period)
(2): |
||||||||||||
Health and Education Consulting |
861 | 902 | ||||||||||
Legal Consulting |
137 | 162 | ||||||||||
Financial Consulting |
274 | 407 | ||||||||||
Total |
1,272 | 1,471 | ||||||||||
Full-time billable consultant utilization rate (3): |
||||||||||||
Health and Education Consulting |
68.1 | % | 78.0 | % | ||||||||
Legal Consulting |
55.2 | % | 53.7 | % | ||||||||
Financial Consulting |
56.9 | % | 54.2 | % | ||||||||
Total |
64.3 | % | 68.7 | % |
Three Months Ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Other Operating Data: |
||||||||
Full-time billable consultant average billing rate per hour
(4): |
||||||||
Health and Education Consulting |
$ | 237 | $ | 246 | ||||
Legal Consulting |
$ | 266 | $ | 233 | ||||
Financial Consulting |
$ | 283 | $ | 282 | ||||
Total |
$ | 248 | $ | 253 | ||||
Revenue per full-time billable consultant (in thousands): |
||||||||
Health and Education Consulting |
$ | 76 | $ | 92 | ||||
Legal Consulting |
$ | 64 | $ | 57 | ||||
Financial Consulting |
$ | 76 | $ | 72 | ||||
Total |
$ | 74 | $ | 82 | ||||
Average number of full-time equivalents (for the period) (5): |
||||||||
Health and Education Consulting |
141 | 97 | ||||||
Legal Consulting |
727 | 503 | ||||||
Financial Consulting |
126 | 110 | ||||||
Total |
994 | 710 | ||||||
Revenue per full-time equivalents (in thousands): |
||||||||
Health and Education Consulting |
$ | 84 | $ | 95 | ||||
Legal Consulting |
$ | 33 | $ | 27 | ||||
Financial Consulting |
$ | 65 | $ | 64 | ||||
Total |
$ | 44 | $ | 42 |
Three Months Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December | |||||||||||||
2009 | 2009 | 2009 | 31, 2009 | |||||||||||||
Segment and Consolidated Operating Results (in thousands): |
||||||||||||||||
Health and Education Consulting: |
||||||||||||||||
Revenues |
$ | 92,022 | $ | 91,469 | $ | 99,714 | $ | 90,676 | ||||||||
Operating income |
$ | 33,640 | $ | 34,430 | $ | 38,676 | $ | 34,549 | ||||||||
Segment operating income as a percent of segment revenues |
36.6 | % | 37.6 | % | 38.8 | % | 38.1 | % | ||||||||
Legal Consulting: |
||||||||||||||||
Revenues |
$ | 22,868 | $ | 31,241 | $ | 29,314 | $ | 31,401 | ||||||||
Operating income |
$ | 3,241 | $ | 7,715 | $ | 5,360 | $ | 5,719 | ||||||||
Segment operating income as a percent of segment revenues |
14.2 | % | 24.7 | % | 18.3 | % | 18.2 | % | ||||||||
Financial Consulting: |
||||||||||||||||
Revenues |
$ | 36,240 | $ | 31,736 | $ | 36,983 | $ | 35,036 | ||||||||
Operating income |
$ | 5,598 | $ | 3,899 | $ | 6,299 | $ | 12,156 | ||||||||
Segment operating income as a percent of segment revenues |
15.4 | % | 12.3 | % | 17.0 | % | 34.7 | % | ||||||||
Total Company: |
||||||||||||||||
Revenues |
$ | 151,130 | $ | 154,446 | $ | 166,011 | $ | 157,113 | ||||||||
Reimbursable expenses |
13,412 | 12,111 | 13,838 | 11,479 | ||||||||||||
Total revenues and reimbursable expenses |
$ | 164,542 | $ | 166,557 | $ | 179,849 | $ | 168,592 | ||||||||
Statement of operations reconciliation: |
||||||||||||||||
Segment operating income |
$ | 42,479 | $ | 46,044 | $ | 50,335 | $ | 52,424 | ||||||||
Charges not allocated at the segment level: |
||||||||||||||||
Other selling, general and administrative expenses |
22,608 | 22,469 | 33,674 | 25,892 | ||||||||||||
Depreciation and amortization expense |
5,572 | 5,659 | 5,502 | 5,459 | ||||||||||||
Impairment charge on goodwill |
| | 67,034 | | ||||||||||||
Total operating income (loss) |
14,299 | 17,916 | (55,875 | ) | 21,073 | |||||||||||
Other expense, net |
(3,207 | ) | (2,377 | ) | (2,236 | ) | (2,553 | ) | ||||||||
Income (loss) from continuing operations before income tax expense |
$ | 11,092 | $ | 15,539 | $ | (58,111 | ) | $ | 18,520 | |||||||
Other Operating Data: |
||||||||||||||||
Number of full-time billable consultants (at period end) (2): |
||||||||||||||||
Health and Education Consulting |
895 | 868 | 844 | 857 | ||||||||||||
Legal Consulting |
161 | 141 | 134 | 141 | ||||||||||||
Financial Consulting |
399 | 363 | 343 | 286 | ||||||||||||
Total |
1,455 | 1,372 | 1,321 | 1,284 | ||||||||||||
Average number of full-time billable consultants (for the period)
(2): |
||||||||||||||||
Health and Education Consulting |
902 | 887 | 858 | 854 | ||||||||||||
Legal Consulting |
162 | 152 | 140 | 140 | ||||||||||||
Financial Consulting |
407 | 388 | 354 | 316 | ||||||||||||
Total |
1,471 | 1,427 | 1,352 | 1,310 | ||||||||||||
Full-time billable consultant utilization rate (3): |
||||||||||||||||
Health and Education Consulting |
78.0 | % | 75.3 | % | 75.1 | % | 72.4 | % | ||||||||
Legal Consulting |
53.7 | % | 61.9 | % | 58.0 | % | 54.6 | % | ||||||||
Financial Consulting |
54.2 | % | 56.4 | % | 61.6 | % | 55.9 | % | ||||||||
Total |
68.7 | % | 68.7 | % | 69.8 | % | 66.5 | % |
Three Months Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
2009 | 2009 | 2009 | 2009 | |||||||||||||
Other Operating Data: |
||||||||||||||||
Full-time billable consultant average billing rate per hour
(4): |
||||||||||||||||
Health and Education Consulting |
$ | 246 | $ | 262 | $ | 299 | $ | 287 | ||||||||
Legal Consulting |
$ | 233 | $ | 212 | $ | 188 | $ | 192 | ||||||||
Financial Consulting |
$ | 282 | $ | 270 | $ | 291 | $ | 315 | ||||||||
Total |
$ | 253 | $ | 259 | $ | 288 | $ | 285 | ||||||||
Revenue per full-time billable consultant (in thousands): |
||||||||||||||||
Health and Education Consulting |
$ | 92 | $ | 93 | $ | 106 | $ | 94 | ||||||||
Legal Consulting |
$ | 57 | $ | 61 | $ | 51 | $ | 45 | ||||||||
Financial Consulting |
$ | 72 | $ | 71 | $ | 83 | $ | 81 | ||||||||
Total |
$ | 82 | $ | 84 | $ | 94 | $ | 86 | ||||||||
Average number of full-time equivalents (for the period) (5): |
||||||||||||||||
Health and Education Consulting |
97 | 109 | 107 | 132 | ||||||||||||
Legal Consulting |
503 | 678 | 645 | 750 | ||||||||||||
Financial Consulting |
110 | 65 | 108 | 138 | ||||||||||||
Total |
710 | 852 | 860 | 1,020 | ||||||||||||
Revenue per full-time equivalents (in thousands): |
||||||||||||||||
Health and Education Consulting |
$ | 95 | $ | 81 | $ | 85 | $ | 76 | ||||||||
Legal Consulting |
$ | 27 | $ | 32 | $ | 34 | $ | 34 | ||||||||
Financial Consulting |
$ | 64 | $ | 63 | $ | 71 | $ | 68 | ||||||||
Total |
$ | 42 | $ | 41 | $ | 45 | $ | 44 |
(1) | Includes non-cash compensation expense, which represents acquisition-related payments made by the Company to selling shareholders of certain acquired businesses that were subsequently redistributed by such selling shareholders, as follows (in thousands). See the Companys Form 10-K for the year ended December 31, 2009 for additional information. |
Three Months Ended | ||||
March 31, 2009 | ||||
Health and Education Consulting |
$ | 2,634 | ||
Financial Consulting |
812 | |||
Total |
$ | 3,446 | ||
(2) | Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked. | |
(3) | Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. | |
(4) | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. | |
(5) | Consists of consultants who work variable schedules as needed by our clients, as well as contract reviewers and other professionals who generate revenues primarily based on number of hours worked and units produced, such as pages reviewed and data processed. Also includes full-time employees who provide software support and maintenance services to our clients. |
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues |
$ | 138,893 | $ | 151,130 | ||||
Net income from continuing operations |
$ | 2,916 | $ | 5,614 | ||||
Add back: |
||||||||
Income tax expense |
2,205 | 5,478 | ||||||
Interest and other expenses |
2,709 | 3,207 | ||||||
Depreciation and amortization |
5,530 | 7,258 | ||||||
Earnings before interest, taxes, depreciation and
amortization (EBITDA) (6) |
13,360 | 21,557 | ||||||
Add back: |
||||||||
Non-cash compensation (1) |
| 3,446 | ||||||
Restatement related expenses |
759 | | ||||||
Adjusted EBITDA (6) |
$ | 14,119 | $ | 25,003 | ||||
Adjusted EBITDA as a percentage of revenues (6) |
10.2 | % | 16.5 | % | ||||
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Net income from continuing operations |
$ | 2,916 | $ | 5,614 | ||||
Weighted average shares diluted |
20,496 | 20,252 | ||||||
Diluted earnings per share from continuing operations |
$ | 0.14 | $ | 0.28 | ||||
Add back: |
||||||||
Amortization of intangible assets |
1,894 | 2,996 | ||||||
Non-cash compensation (1) |
| 3,446 | ||||||
Restatement related expenses |
759 | | ||||||
Tax effect |
(1,088 | ) | (1,228 | ) | ||||
Total adjustments, net of tax |
1,565 | 5,214 | ||||||
Adjusted net income from continuing operations (6) |
$ | 4,481 | $ | 10,828 | ||||
Weighted average shares diluted |
20,496 | 20,252 | ||||||
Adjusted diluted earnings per share (6) |
$ | 0.22 | $ | 0.53 | ||||
(6) | In evaluating the Companys financial performance, management uses earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income, and adjusted diluted earnings per share, which are non-GAAP measures. Management believes that the use of such measures, as supplements to net income, diluted earnings per share and other GAAP measures, are useful indicators for investors. These useful indicators can help readers gain a meaningful understanding of our core operating results and future prospects without the effect of non-cash or other one-time items and the Companys ability to generate cash flows from operations that are available for taxes, capital expenditures, and to repay debt. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States. |