Huron Announces Fourth Quarter and Full Year 2016 Financial Results
Fourth Quarter 2016 Highlights
-
Revenues were
$178.1 million in Q4 2016 compared to$185.1 million in Q4 2015. -
Net income from continuing operations was
$4.2 million in Q4 2016 compared to$32.5 million in Q4 2015. -
Adjusted EBITDA(6), a non-GAAP measure, was
$23.7 million in Q4 2016 compared to$40.0 million in Q4 2015. -
Diluted earnings per share from continuing operations was
$0.19 in Q4 2016 compared to$1.44 in Q4 2015. -
Adjusted diluted earnings per share from continuing operations(6),
a non-GAAP measure, was
$0.58 in Q4 2016 compared to$0.94 in Q4 2015.
Full Year 2016 Highlights and 2017 Guidance
-
Revenues for full year 2016 increased 3.9% to
$726.3 million compared to$699.0 million for full year 2015. -
Net income from continuing operations for full year 2016 was
$39.5 million compared to$61.9 million for full year 2015. -
Adjusted EBITDA(6) for full year 2016 was
$128.5 million compared to$139.3 million for full year 2015. -
Diluted earnings per share from continuing operations for full year
2016 was
$1.84 compared to$2.74 for full year 2015. -
Adjusted diluted earnings per share from continuing operations(6) for
full year 2016 increased 7.4% to
$3.21 compared to$2.99 for full year 2015. -
Huron affirms its previous earnings guidance range for full year 2017,
including revenue expectations in a range of
$750.0 million to $790.0 million .
"Our fourth quarter results were disappointing primarily due to
continued challenges in our Healthcare segment. While we believe there
may be some positive market indications, we continue to expect ongoing
softness in the Healthcare business until some of the current
uncertainties in the provider market subside," said
FOURTH QUARTER 2016 RESULTS FROM CONTINUING OPERATIONS
Revenues for the fourth quarter of 2016 were
Fourth quarter 2016 earnings before interest, taxes, depreciation and
amortization ("EBITDA")(6) was
In addition to using EBITDA to evaluate the company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):
|
Three Months Ended December 31, |
||||||||
| 2016 | 2015 | |||||||
| Amortization of intangible assets | $ | 8,739 | $ | 8,011 | ||||
| Restructuring charges | $ | 5,463 | $ | 1,752 | ||||
| Other gains | $ | (2,484 | ) | $ | (10,000 | ) | ||
| Non-cash interest on convertible notes | $ | 1,906 | $ | 1,817 | ||||
| Tax effect | $ | (5,354 | ) | $ | (623 | ) | ||
| Net tax benefit related to "check-the-box" election | $ | — | $ | (12,336 | ) | |||
Adjusted EBITDA(6) was
The average number of full-time billable consultants(1)
increased 8.6% to 1,998 in the fourth quarter of 2016 compared to 1,839
in the same quarter last year. Full-time billable consultant utilization
rate(2) was 72.2% during the fourth quarter of 2016 compared
to 79.2% during the same period last year. Average billing rate per hour
for full-time billable consultants(3) was
YEAR-TO-DATE 2016 RESULTS FROM CONTINUING OPERATIONS
Revenues for the full year 2016 increased 3.9% to
EBITDA(6) was
In addition to using EBITDA to evaluate the company’s financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):
|
Twelve Months Ended December 31, |
||||||||
| 2016 | 2015 | |||||||
| Amortization of intangible assets | $ | 33,108 | $ | 28,696 | ||||
| Restructuring charges | $ | 9,592 | $ | 3,329 | ||||
| Other gains, net | $ | (1,990 | ) | $ | (9,476 | ) | ||
| Non-cash interest on convertible notes | $ | 7,488 | $ | 7,141 | ||||
| Tax effect | $ | (18,942 | ) | $ | (11,698 | ) | ||
| Net tax benefit related to "check-the-box" election | $ | — | $ | (12,336 | ) | |||
Adjusted EBITDA(6) was
The average number of full-time billable consultants(1)
increased 8.5% to 1,921 for the full year 2016 compared to 1,770 for the
full year 2015. Full-time billable consultant utilization rate(2)
was 74.6% during the full year 2016 compared to 76.9% during the full
year 2015. Average billing rate per hour for full-time billable
consultants(3) was
OPERATING SEGMENTS
Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges.
The company’s full year 2016 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (58%); Education and Life Sciences (25%); and Business Advisory (17%). Financial results by segment are included in the attached schedules and in Huron's forthcoming annual report on Form 10-K filing for the year ended Dec. 31, 2016.
ACQUISITIONS
On
On
OUTLOOK FOR 2017(7)
Based on currently available information, the company affirmed guidance,
which was previously announced on
Management will provide a more detailed discussion of its outlook during the company’s earnings conference call webcast.
FOURTH QUARTER 2016 WEBCAST
The company will host a webcast to discuss its financial results today,
Feb. 23, 2017, at
USE OF NON-GAAP FINANCIAL MEASURES(6)
In evaluating the company’s financial performance and outlook,
management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage
of revenues, adjusted net income from continuing operations, and
adjusted diluted earnings per share from continuing operations, which
are non-GAAP measures. Our management uses these non-GAAP financial
measures to gain an understanding of our comparative operating
performance (when comparing such results with previous periods or
forecasts). These non-GAAP financial measures are used by management in
their financial and operating decision making because management
believes they reflect our ongoing business in a manner that allows for
meaningful period-to-period comparisons. Management also uses these
non-GAAP financial measures when publicly providing our business
outlook, for internal management purposes, and as a basis for evaluating
potential acquisitions and dispositions. We believe that these non-GAAP
financial measures provide useful information to investors and others in
understanding and evaluating Huron’s current operating performance and
future prospects in the same manner as management does, if they so
choose, and in comparing in a consistent manner Huron’s current
financial results with Huron’s past financial results. Investors should
recognize that these non-GAAP measures might not be comparable to
similarly titled measures of other companies. These measures should be
considered in addition to, and not as a substitute for or superior to,
any measure of performance, cash flows or liquidity prepared in
accordance with accounting principles generally accepted in
ABOUT HURON
Huron is a global professional services firm committed to achieving sustainable results in partnership with its clients. The company brings depth of expertise in strategy, technology, operations, advisory services and analytics to drive lasting and measurable results in the healthcare, higher education, life sciences and commercial sectors. Through focus, passion and collaboration, Huron provides guidance to support organizations as they contend with the change transforming their industries and businesses. Learn more at http://www.huronconsultinggroup.com.
Statements in this press release that are not historical in nature,
including those concerning the company’s current expectations about its
future requirements and needs, are “forward-looking” statements as
defined in Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are identified by words such as “may,”
“should,” “expects,” “provides,” “anticipates,” “assumes,” “can,”
“will,” “meets,” “could,” “likely,” “intends,” “might,” “predicts,”
“seeks,” “would,” “believes,” “estimates,” “plans,” “continues,” or
“outlook” or similar expressions. These forward-looking statements
reflect our current expectations about our future requirements and
needs, results, levels of activity, performance, or achievements. Some
of the factors that could cause actual results to differ materially from
the forward-looking statements contained herein include, without
limitation: failure to achieve expected utilization rates, billing rates
and the number of revenue-generating professionals; inability to expand
or adjust our service offerings in response to market demands; our
dependence on renewal of client-based services; dependence on new
business and retention of current clients and qualified personnel;
failure to maintain third-party provider relationships and strategic
alliances; inability to license technology to and from third parties;
the impairment of goodwill; various factors related to income and other
taxes; difficulties in successfully integrating the businesses we
acquire and achieving expected benefits from such acquisitions; failure
to complete the pending acquisition of Innosight or any material delay
in the timing of such acquisition; risks relating to privacy,
information security, and related laws and standards; and a general
downturn in market conditions. These forward-looking statements involve
known and unknown risks, uncertainties, and other factors, including,
among others, those described under “Item 1A. Risk Factors” in our
forthcoming Annual Report on Form 10-K for the year ended
|
HURON CONSULTING GROUP INC. CONSOLIDATED STATEMENTS OF EARNINGS AND OTHER COMPREHENSIVE INCOME (In thousands, except per share amounts) (Unaudited) |
||||||||||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues and reimbursable expenses: | ||||||||||||||||
| Revenues | $ | 178,124 | $ | 185,100 | $ | 726,272 | $ | 699,010 | ||||||||
| Reimbursable expenses | 17,076 | 16,747 | 71,712 | 70,013 | ||||||||||||
| Total revenues and reimbursable expenses | 195,200 | 201,847 | 797,984 | 769,023 | ||||||||||||
| Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): | ||||||||||||||||
| Direct costs | 114,246 | 104,467 | 437,556 | 401,915 | ||||||||||||
| Amortization of intangible assets and software development costs | 3,862 | 4,686 | 15,140 | 16,788 | ||||||||||||
| Reimbursable expenses | 17,002 | 16,738 | 71,749 | 69,932 | ||||||||||||
| Total direct costs and reimbursable expenses | 135,110 | 125,891 | 524,445 | 488,635 | ||||||||||||
| Operating expenses and other operating gains: | ||||||||||||||||
| Selling, general and administrative expenses | 40,267 | 40,646 | 160,204 | 157,902 | ||||||||||||
| Restructuring charges | 5,463 | 1,752 | 9,592 | 3,329 | ||||||||||||
| Litigation and other gains, net | (2,484 | ) | (10,000 | ) | (1,990 | ) | (9,476 | ) | ||||||||
| Depreciation and amortization | 8,435 | 6,849 | 31,499 | 25,135 | ||||||||||||
| Total operating expenses and other operating gains | 51,681 | 39,247 | 199,305 | 176,890 | ||||||||||||
| Operating income | 8,409 | 36,709 | 74,234 | 103,498 | ||||||||||||
| Other income (expense), net: | ||||||||||||||||
| Interest expense, net of interest income | (4,004 | ) | (4,342 | ) | (16,274 | ) | (18,136 | ) | ||||||||
| Other income (expense), net | (39 | ) | 185 | 1,197 | (1,797 | ) | ||||||||||
| Total other expense, net | (4,043 | ) | (4,157 | ) | (15,077 | ) | (19,933 | ) | ||||||||
| Income from continuing operations before income tax expense | 4,366 | 32,552 | 59,157 | 83,565 | ||||||||||||
| Income tax expense | 179 | 50 | 19,677 | 21,670 | ||||||||||||
| Net income from continuing operations | 4,187 | 32,502 | 39,480 | 61,895 | ||||||||||||
| Income (loss) from discontinued operations, net of tax | (33 | ) | (13,159 | ) | (1,863 | ) | (2,843 | ) | ||||||||
| Net income | $ | 4,154 | $ | 19,343 | $ | 37,617 | $ | 59,052 | ||||||||
| Net earnings per basic share: | ||||||||||||||||
| Net income from continuing operations | $ | 0.20 | $ | 1.47 | $ | 1.87 | $ | 2.80 | ||||||||
| Income (loss) from discontinued operations, net of tax | — | (0.59 | ) | (0.09 | ) | (0.13 | ) | |||||||||
| Net income | $ | 0.20 | $ | 0.88 | $ | 1.78 | $ | 2.67 | ||||||||
| Net earnings per diluted share: | ||||||||||||||||
| Net income from continuing operations | $ | 0.19 | $ | 1.44 | $ | 1.84 | $ | 2.74 | ||||||||
| Income (loss) from discontinued operations, net of tax | — | (0.58 | ) | (0.08 | ) | (0.13 | ) | |||||||||
| Net income | $ | 0.19 | $ | 0.86 | $ | 1.76 | $ | 2.61 | ||||||||
| Weighted average shares used in calculating earnings per share: | ||||||||||||||||
| Basic | 21,083 | 22,093 | 21,084 | 22,136 | ||||||||||||
| Diluted | 21,473 | 22,551 | 21,424 | 22,600 | ||||||||||||
| Comprehensive income: | ||||||||||||||||
| Net income | $ | 4,154 | $ | 19,343 | $ | 37,617 | $ | 59,052 | ||||||||
| Foreign currency translation adjustments, net of tax | 12 | 2,018 | 64 | 1,817 | ||||||||||||
| Unrealized gain (loss) on investment, net of tax | 1,066 | 300 | (97 | ) | 4,435 | |||||||||||
| Unrealized gain (loss) on cash flow hedging instruments, net of tax | 90 | 240 | 63 | (12 | ) | |||||||||||
| Other comprehensive income | 1,168 | 2,558 | 30 | 6,240 | ||||||||||||
| Comprehensive income | $ | 5,322 | $ | 21,901 | $ | 37,647 | $ | 65,292 | ||||||||
|
HURON CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) |
||||||||
|
December 31, 2016 |
December 31, 2015 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 17,027 | $ | 58,437 | ||||
| Receivables from clients, net | 94,246 | 85,297 | ||||||
| Unbilled services, net | 51,290 | 56,527 | ||||||
| Income tax receivable | 4,211 | 406 | ||||||
| Prepaid expenses and other current assets | 13,308 | 27,720 | ||||||
| Total current assets | 180,082 | 228,387 | ||||||
| Property and equipment, net | 32,434 | 28,888 | ||||||
| Long-term investment | 34,675 | 34,831 | ||||||
| Other non-current assets | 24,814 | 21,045 | ||||||
| Intangible assets, net | 81,348 | 94,992 | ||||||
| Goodwill | 799,862 | 751,400 | ||||||
| Total assets | $ | 1,153,215 | $ | 1,159,543 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,273 | $ | 7,220 | ||||
| Accrued expenses | 21,773 | 24,276 | ||||||
| Accrued payroll and related benefits | 82,669 | 80,839 | ||||||
| Deferred revenues | 24,053 | 19,086 | ||||||
| Total current liabilities | 135,768 | 131,421 | ||||||
| Non-current liabilities: | ||||||||
| Deferred compensation and other liabilities | 31,013 | 23,768 | ||||||
| Long-term debt | 292,065 | 307,376 | ||||||
| Deferred lease incentives | 10,703 | 9,965 | ||||||
| Deferred income taxes, net | 35,633 | 34,688 | ||||||
| Total non-current liabilities | 369,414 | 375,797 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Common stock; $0.01 par value; 500,000,000 shares authorized; 24,126,118 and 24,775,823 shares issued at December 31, 2016 and December 31, 2015, respectively | 235 | 241 | ||||||
| Treasury stock, at cost, 2,408,343 and 2,249,630 shares at December 31, 2016 and December 31, 2015, respectively | (113,195 | ) | (103,734 | ) | ||||
| Additional paid-in capital | 405,895 | 438,367 | ||||||
| Retained earnings | 351,483 | 313,866 | ||||||
| Accumulated other comprehensive income | 3,615 | 3,585 | ||||||
| Total stockholders’ equity | 648,033 | 652,325 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,153,215 | $ | 1,159,543 | ||||
|
HURON CONSULTING GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
||||||||
|
Twelve Months Ended December 31, |
||||||||
| 2016 | 2015 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 37,617 | $ | 59,052 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 46,816 | 58,053 | ||||||
| Share-based compensation | 16,577 | 21,487 | ||||||
| Amortization of debt discount and issuance costs | 9,609 | 9,329 | ||||||
| Allowances for doubtful accounts and unbilled services | 4,250 | 1,025 | ||||||
| Deferred income taxes | 257 | 2,765 | ||||||
| Loss on sale of business | — | 2,303 | ||||||
| Change in fair value of contingent consideration liabilities | (1,990 | ) | (1,126 | ) | ||||
| Changes in operating assets and liabilities, net of acquisitions and divestitures: | ||||||||
| (Increase) decrease in receivables from clients | 1,440 | (2,836 | ) | |||||
| (Increase) decrease in unbilled services | 2,443 | 31,696 | ||||||
| (Increase) decrease in current income tax receivable / payable, net | (4,410 | ) | 8,818 | |||||
| (Increase) decrease in other assets | 11,904 | (14,742 | ) | |||||
| Increase (decrease) in accounts payable and accrued liabilities | (3,144 | ) | 8,805 | |||||
| Increase (decrease) in accrued payroll and related benefits | 3,044 | (25,221 | ) | |||||
| Increase (decrease) in deferred revenues | 3,898 | 4,859 | ||||||
| Net cash provided by operating activities | 128,311 | 164,267 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment, net | (13,936 | ) | (18,571 | ) | ||||
| Investment in life insurance policies | (2,035 | ) | (5,804 | ) | ||||
| Purchases of businesses, net of cash acquired | (69,133 | ) | (339,966 | ) | ||||
| Purchase of convertible debt investment | — | (15,438 | ) | |||||
| Capitalization of internally developed software costs | (1,086 | ) | (866 | ) | ||||
| Proceeds from sale of business | (446 | ) | 108,487 | |||||
| Net cash used in investing activities | (86,636 | ) | (272,158 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | 123 | — | ||||||
| Shares redeemed for employee tax withholdings | (4,953 | ) | (7,154 | ) | ||||
| Tax benefit from share-based compensation | 932 | 3,588 | ||||||
| Share repurchases | (55,265 | ) | (34,591 | ) | ||||
| Proceeds from borrowings under credit facility | 200,000 | 314,000 | ||||||
| Repayments on credit facility | (224,000 | ) | (365,750 | ) | ||||
| Payments for capital lease obligations | — | (48 | ) | |||||
| Net cash used in financing activities | (83,163 | ) | (89,955 | ) | ||||
| Effect of exchange rate changes on cash | 78 | (589 | ) | |||||
| Net decrease in cash and cash equivalents | (41,410 | ) | (198,435 | ) | ||||
| Cash and cash equivalents at beginning of the period | 58,437 | 256,872 | ||||||
| Cash and cash equivalents at end of the period | $ | 17,027 | $ | 58,437 | ||||
|
HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (Unaudited) |
|||||||||||
|
Three Months Ended December 31, |
Percent
Increase (Decrease) |
||||||||||
| Segment and Consolidated Operating Results (in thousands): | 2016 | 2015 | |||||||||
| Healthcare: | |||||||||||
| Revenues | $ | 101,381 | $ | 118,263 | (14.3 | )% | |||||
| Operating income | $ | 28,674 | $ | 47,440 | (39.6 | )% | |||||
| Segment operating income as a percentage of segment revenues | 28.3 |
% |
40.1 | % | |||||||
| Education and Life Sciences: | |||||||||||
| Revenues | $ | 44,928 | $ | 43,041 | 4.4 | % | |||||
| Operating income | $ | 7,826 | $ | 8,789 | (11.0 | )% | |||||
| Segment operating income as a percentage of segment revenues | 17.4 | % | 20.4 | % | |||||||
| Business Advisory: | |||||||||||
| Revenues | $ | 31,815 | $ | 23,795 | 33.7 | % | |||||
| Operating income | $ | 5,117 | $ | 5,749 | (11.0 | )% | |||||
| Segment operating income as a percentage of segment revenues | 16.1 | % | 24.2 | % | |||||||
| All Other: | |||||||||||
| Revenues | $ | — | $ | 1 | (100.0 | )% | |||||
| Operating loss | $ | — | $ | (64 | ) | (100.0 | )% | ||||
| Segment operating loss as a percentage of segment revenues | N/M | N/M | |||||||||
| Total Company: | |||||||||||
| Revenues | $ | 178,124 | $ | 185,100 | (3.8 | )% | |||||
| Reimbursable expenses | 17,076 | 16,747 | 2.0 | % | |||||||
| Total revenues and reimbursable expenses | $ | 195,200 | $ | 201,847 | (3.3 | )% | |||||
| Statements of Earnings reconciliation: | |||||||||||
| Segment operating income | $ | 41,617 | $ | 61,914 | (32.8 | )% | |||||
| Items not allocated at the segment level: | |||||||||||
| Other operating expenses | 27,257 | 28,356 | (3.9 | )% | |||||||
| Litigation and other gains, net | (2,484 | ) | (10,000 | ) | (75.2 | )% | |||||
| Depreciation and amortization expense | 8,435 | 6,849 | 23.2 | % | |||||||
| Total operating income | 8,409 | 36,709 | (77.1 | )% | |||||||
| Other expense, net | 4,043 | 4,157 | (2.7 | )% | |||||||
| Income from continuing operations before income tax expense | $ | 4,366 | $ | 32,552 | (86.6 | )% | |||||
| Other Operating Data (excluding All Other): | |||||||||||
| Number of full-time billable consultants (at period end) (1): | |||||||||||
| Healthcare | 888 | 1,037 | (14.4 | )% | |||||||
| Education and Life Sciences | 544 | 478 | 13.8 | % | |||||||
| Business Advisory | 471 | 306 | 53.9 | % | |||||||
| Total | 1,903 | 1,821 | 4.5 | % | |||||||
| Average number of full-time billable consultants (for the period) (1): | |||||||||||
| Healthcare | 976 | 1,063 | |||||||||
| Education and Life Sciences | 547 | 474 | |||||||||
| Business Advisory | 475 | 302 | |||||||||
| Total | 1,998 | 1,839 | |||||||||
|
HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited) |
||||||||
| Three Months Ended December 31, | ||||||||
| Other Operating Data (continued): | 2016 | 2015 | ||||||
| Full-time billable consultant utilization rate (2): | ||||||||
| Healthcare | 72.4 | % | 82.7 | % | ||||
| Education and Life Sciences | 68.9 | % | 74.4 | % | ||||
| Business Advisory | 75.7 | % | 74.8 | % | ||||
| Total | 72.2 | % | 79.2 | % | ||||
| Full-time billable consultant average billing rate per hour (3): | ||||||||
| Healthcare | $ | 215 | $ | 223 | ||||
| Education and Life Sciences | $ | 230 | $ | 233 | ||||
| Business Advisory | $ | 176 | $ | 215 | ||||
| Total | $ | 209 | $ | 224 | ||||
| Revenue per full-time billable consultant (in thousands): | ||||||||
| Healthcare | $ | 69 | $ | 82 | ||||
| Education and Life Sciences | $ | 71 | $ | 77 | ||||
| Business Advisory | $ | 62 | $ | 76 | ||||
| Total | $ | 68 | $ | 80 | ||||
| Average number of full-time equivalents (for the period) (5): | ||||||||
| Healthcare | 212 | 199 | ||||||
| Education and Life Sciences | 44 | 51 | ||||||
| Business Advisory | 21 | 9 | ||||||
| Total | 277 | 259 | ||||||
| Revenue per full-time equivalent (in thousands): | ||||||||
| Healthcare | $ | 158 | $ | 155 | ||||
| Education and Life Sciences | $ | 136 | $ | 124 | ||||
| Business Advisory | $ | 115 | $ | 106 | ||||
| Total | $ | 151 | $ | 147 | ||||
|
HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited) |
|||||||||||
| Twelve Months Ended December 31, |
Percent
Increase (Decrease) |
||||||||||
| Segment and Consolidated Operating Results (in thousands): | 2016 | 2015 | |||||||||
| Healthcare: | |||||||||||
| Revenues | $ | 424,912 | $ | 446,887 | (4.9 | )% | |||||
| Operating income | $ | 147,903 | $ | 169,560 | (12.8 | )% | |||||
| Segment operating income as a percentage of segment revenues | 34.8 | % | 37.9 | % | |||||||
| Education and Life Sciences: | |||||||||||
| Revenues | $ | 178,978 | $ | 167,933 | 6.6 | % | |||||
| Operating income | $ | 43,233 | $ | 44,216 | (2.2 | )% | |||||
| Segment operating income as a percentage of segment revenues | 24.2 | % | 26.3 | % | |||||||
| Business Advisory: | |||||||||||
| Revenues | $ | 122,382 | $ | 82,968 | 47.5 | % | |||||
| Operating income | $ | 24,459 | $ | 19,263 | 27.0 | % | |||||
| Segment operating income as a percentage of segment revenues | 20.0 | % | 23.2 | % | |||||||
| All Other: | |||||||||||
| Revenues | $ | — | $ | 1,222 | (100.0 | )% | |||||
| Operating loss | $ | — | $ | (1,718 | ) | (100.0 | )% | ||||
| Segment operating loss as a percentage of segment revenues | N/M | N/M | |||||||||
| Total Company: | |||||||||||
| Revenues | $ | 726,272 | $ | 699,010 | 3.9 | % | |||||
| Reimbursable expenses | 71,712 | 70,013 | 2.4 | % | |||||||
| Total revenues and reimbursable expenses | $ | 797,984 | $ | 769,023 | 3.8 | % | |||||
| Statements of Earnings reconciliation: | |||||||||||
| Segment operating income | $ | 215,595 | $ | 231,321 | (6.8 | )% | |||||
| Items not allocated at the segment level: | |||||||||||
| Other operating expenses | 111,852 | 112,164 | (0.3 | )% | |||||||
| Litigation and other gains, net | (1,990 | ) | (9,476 | ) | (79.0 | )% | |||||
| Depreciation and amortization expense | 31,499 | 25,135 | 25.3 | % | |||||||
| Total operating income | 74,234 | 103,498 | (28.3 | )% | |||||||
| Other expense, net | 15,077 | 19,933 | (24.4 | )% | |||||||
| Income from continuing operations before income tax expense | $ | 59,157 | $ | 83,565 | (29.2 | )% | |||||
| Other Operating Data (excluding All Other): | |||||||||||
| Number of full-time billable consultants (at period end) (1): | |||||||||||
| Healthcare | 888 | 1,037 | (14.4 | )% | |||||||
| Education and Life Sciences | 544 | 478 | 13.8 | % | |||||||
| Business Advisory | 471 | 306 | 53.9 | % | |||||||
| Total | 1,903 | 1,821 | 4.5 | % | |||||||
| Average number of full-time billable consultants (for the period) (1): | |||||||||||
| Healthcare | 998 | 1,085 | |||||||||
| Education and Life Sciences | 514 | 442 | |||||||||
| Business Advisory | 409 | 243 | |||||||||
| Total | 1,921 | 1,770 | |||||||||
|
HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited) |
||||||||
| Twelve Months Ended December 31, | ||||||||
| Other Operating Data (continued): | 2016 | 2015 | ||||||
| Full-time billable consultant utilization rate (2): | ||||||||
| Healthcare | 77.1 | % | 77.9 | % | ||||
| Education and Life Sciences | 69.8 | % | 75.5 | % | ||||
| Business Advisory | 74.5 | % | 75.0 | % | ||||
| Total | 74.6 | % | 76.9 | % | ||||
| Full-time billable consultant average billing rate per hour (3): | ||||||||
| Healthcare | $ | 210 | $ | 217 | ||||
| Education and Life Sciences | $ | 229 | $ | 231 | ||||
| Business Advisory (4) | $ | 194 | $ | 228 | ||||
| Total | $ | 212 | $ | 222 | ||||
| Revenue per full-time billable consultant (in thousands): | ||||||||
| Healthcare | $ | 300 | $ | 313 | ||||
| Education and Life Sciences | $ | 303 | $ | 325 | ||||
| Business Advisory | $ | 280 | $ | 328 | ||||
| Total | $ | 297 | $ | 318 | ||||
| Average number of full-time equivalents (for the period) (5): | ||||||||
| Healthcare | 203 | 179 | ||||||
| Education and Life Sciences | 41 | 43 | ||||||
| Business Advisory | 17 | 8 | ||||||
| Total | 261 | 230 | ||||||
| Revenue per full-time equivalent (in thousands): | ||||||||
| Healthcare | $ | 614 | $ | 604 | ||||
| Education and Life Sciences | $ | 564 | $ | 574 | ||||
| Business Advisory | $ | 456 | $ | 408 | ||||
| Total | $ | 596 | $ | 591 | ||||
|
_________________ |
||
| (1) | Consists of our full-time professionals who provide consulting services and generate revenues based on the number of hours worked. | |
| (2) | Utilization rate for our full-time billable consultants is calculated by dividing the number of hours all of our full-time billable consultants worked on client assignments during a period by the total available working hours for all of these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days. | |
| (3) | Average billing rate per hour for our full-time billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. | |
| (4) | The Business Advisory segment includes our India Enterprise Solutions and Analytics practice, formerly known as Rittman Mead Consulting Private Limited, a business that we acquired in July 2015. Absent the impact of our India Enterprise Solutions and Analytics practice, the average billing rate per hour for Business Advisory for the twelve months ended December 31, 2016 and 2015 would have been $225 and $256, respectively. | |
| (5) | Consists of cultural transformation consultants within our Studer Group solution, which include coaches and their support staff, consultants who work variable schedules as needed by our clients, and full-time employees who provide software support and maintenance services to our clients. | |
|
N/M - Not meaningful |
||
|
HURON CONSULTING GROUP INC. RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6) (In thousands) (Unaudited) |
||||||||||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues | $ | 178,124 | $ | 185,100 | $ | 726,272 | $ | 699,010 | ||||||||
| Net income from continuing operations | $ | 4,187 | $ | 32,502 | $ | 39,480 | $ | 61,895 | ||||||||
| Add back: | ||||||||||||||||
| Income tax expense | 179 | 50 | 19,677 | 21,670 | ||||||||||||
| Interest and other expenses | 4,043 | 4,157 | 15,077 | 19,933 | ||||||||||||
| Depreciation and amortization | 12,297 | 11,535 | 46,639 | 41,923 | ||||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) (6) | 20,706 | 48,244 | 120,873 | 145,421 | ||||||||||||
| Add back: | ||||||||||||||||
| Restructuring charges | 5,463 | 1,752 | 9,592 | 3,329 | ||||||||||||
| Litigation and other gains, net | (2,484 | ) | (10,000 | ) | (1,990 | ) | (9,476 | ) | ||||||||
| Adjusted EBITDA (6) | $ | 23,685 | $ | 39,996 | $ | 128,475 | $ | 139,274 | ||||||||
| Adjusted EBITDA as a percentage of revenues (6) | 13.3 | % | 21.6 | % | 17.7 | % | 19.9 | % | ||||||||
|
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (6) (In thousands, except per share amounts) (Unaudited) |
||||||||||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net income from continuing operations | $ | 4,187 | $ | 32,502 | $ | 39,480 | $ | 61,895 | ||||||||
| Weighted average shares – diluted | 21,473 | 22,551 | 21,424 | 22,600 | ||||||||||||
| Diluted earnings per share from continuing operations | $ | 0.19 | $ | 1.44 | $ | 1.84 | $ | 2.74 | ||||||||
| Add back: | ||||||||||||||||
| Amortization of intangible assets | 8,739 | 8,011 | 33,108 | 28,696 | ||||||||||||
| Restructuring charges | 5,463 | 1,752 | 9,592 | 3,329 | ||||||||||||
| Litigation and other gains, net | (2,484 | ) | (10,000 | ) | (1,990 | ) | (9,476 | ) | ||||||||
| Non-cash interest on convertible notes | 1,906 | 1,817 | 7,488 | 7,141 | ||||||||||||
| Tax effect | (5,354 | ) | (623 | ) | (18,942 | ) | (11,698 | ) | ||||||||
| Net tax benefit related to "check-the-box" election | — | (12,336 | ) | — | (12,336 | ) | ||||||||||
| Total adjustments, net of tax | 8,270 | (11,379 | ) | 29,256 | 5,656 | |||||||||||
| Adjusted net income from continuing operations (6) | $ | 12,457 | $ | 21,123 | $ | 68,736 | $ | 67,551 | ||||||||
| Adjusted diluted earnings per share from continuing operations (6) | $ | 0.58 | $ | 0.94 | $ | 3.21 | $ | 2.99 | ||||||||
|
_________________ |
||
| (6) | In evaluating the company’s financial performance and outlook, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Our management uses these non-GAAP financial measures to gain an understanding of our comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States. | |
|
HURON CONSULTING GROUP INC. RECONCILIATION OF NON-GAAP MEASURES FOR FULL YEAR 2017 OUTLOOK
RECONCILIATION OF NET INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (7) (In millions) (Unaudited) |
||||||||
| Year Ending | ||||||||
| December 31, 2017 | ||||||||
| Guidance Range | ||||||||
| Low | High | |||||||
| Projected revenues - GAAP | $ | 750.0 | $ | 790.0 | ||||
| Projected net income - GAAP | $ | 18.0 | $ | 25.0 | ||||
| Add back: | ||||||||
| Income tax expense | 13.0 | 18.0 | ||||||
| Interest expense | 18.5 | 18.5 | ||||||
| Depreciation and amortization | 63.0 | 63.0 | ||||||
| Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (7) | 112.5 | 124.5 | ||||||
| Add back: | ||||||||
| Restructuring charges | — | — | ||||||
| Other gains, net | — | — | ||||||
| Projected adjusted EBITDA (7) | $ | 112.5 | $ | 124.5 | ||||
| Projected adjusted EBITDA as a percentage of projected revenues (7) | 15.0 | % | 15.8 | % | ||||
|
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (7) (In millions, except per share amounts) (Unaudited) |
||||||||
| Year Ending | ||||||||
| December 31, 2017 | ||||||||
| Guidance Range | ||||||||
| Low | High | |||||||
| Projected net income - GAAP | $ | 18.0 | $ | 25.0 | ||||
| Projected diluted earnings per share - GAAP | $ | 0.85 | $ | 1.15 | ||||
| Add back: | ||||||||
| Amortization of intangible assets | 47.0 | 47.0 | ||||||
| Restructuring charges | — | — | ||||||
| Other gains, net | — | — | ||||||
| Non-cash interest on convertible notes | 8.0 | 8.0 | ||||||
| Tax effect | (21.0 | ) | (21.0 | ) | ||||
|
Total adjustments, net of tax |
34.0 | 34.0 | ||||||
| Projected adjusted net income (7) | $ | 52.0 | $ | 59.0 | ||||
| Projected adjusted diluted earnings per share (7) | $ | 2.40 | $ | 2.70 | ||||
|
_________________ |
||
| (7) | In evaluating the company’s outlook, management uses projected EBITDA, projected adjusted EBITDA, projected adjusted EBITDA as a percentage of revenues, projected adjusted net income, and projected adjusted diluted earnings per share, which are non-GAAP measures. Management believes that the use of such measures, as supplements to projected net income and projected diluted earnings per share, and other GAAP measures, are useful indicators for investors. These useful indicators can help readers gain a meaningful understanding of the company’s core operating results and future prospects without the effect of non-cash or other one-time items. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States. | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170223006291/en/
Source: Huron
Huron
MEDIA CONTACT
Sarah McHugh
312-880-2624
smchugh@huronconsultinggroup.com
or
INVESTOR
CONTACT
John D. Kelly
312-583-8722
investor@huronconsultinggroup.com