Huron Announces Fourth Quarter and Full Year 2021 Financial Results, and Provides 2022 Guidance
FOURTH QUARTER 2021 HIGHLIGHTS
- Revenues increased
$49.9 million , or 25.2%, to$248.3 million in Q4 2021 from$198.3 million in Q4 2020. - Net income from continuing operations increased to
$31.1 million in Q4 2021 compared to a net loss from continuing operations of$6.1 million in Q4 2020. Results for Q4 2021 include a$23.7 million gain, net of tax from the sale of the company's Life Sciences business in the fourth quarter of 2021. Results for Q4 2020 include$13.9 million of restructuring charges, net of tax related to the fourth quarter 2020 restructuring plan. - Adjusted EBITDA(8), a non-GAAP measure, increased
$12.2 million , or 71.7%, to$29.3 million in Q4 2021 from$17.1 million in Q4 2020. - Diluted earnings per share from continuing operations was
$1.45 in Q4 2021 compared to diluted loss per share from continuing operations of$0.28 in Q4 2020. - Adjusted diluted earnings per share from continuing operations(8), a non-GAAP measure, excludes the gain on sale of the company's Life Sciences business and increased
$0.35 , or 77.8%, to$0.80 in Q4 2021 from$0.45 in Q4 2020.
FULL YEAR 2021 HIGHLIGHTS AND 2022 GUIDANCE
- Revenues increased
$61.5 million , or 7.3%, to$905.6 million for full year 2021 compared to$844.1 million for full year 2020. - Net income from continuing operations was
$63.0 million for full year 2021 compared to a net loss from continuing operations of$23.7 million for full year 2020. Results for full year 2021 include a$23.7 million gain, net of tax from the sale of the company's Life Sciences business in the fourth quarter of 2021. Results for full year 2020 include non-cash goodwill impairment charges, net of tax of$45.3 million incurred in Q1 2020 related to the company's Strategy and Innovation and Life Sciences reporting units within the Business Advisory segment and$13.9 million of restructuring charges, net of tax related to the fourth quarter 2020 restructuring plan. - Adjusted EBITDA(8), a non-GAAP measure, increased
$10.7 million , or 12.3%, to$97.8 million for full year 2021 compared to$87.1 million for full year 2020. - Diluted earnings per share from continuing operations was
$2.89 for full year 2021 compared to diluted loss per share from continuing operations of$1.08 for full year 2020. - Adjusted diluted earnings per share from continuing operations(8), a non-GAAP measure, excludes the gain on sale of the company's Life Sciences business and increased
$0.46 , or 21.4%, to$2.61 for full year 2021 from$2.15 for full year 2020. - Huron provides full year 2022 guidance, including revenue expectations in a range of
$970.0 million to$1.03 billion . - Effective
January 1, 2022 , Huron has modified its operating model to expand and more deeply integrate the company’s industry expertise with its digital, strategic and financial advisory capabilities to accelerate growth and margin expansion.
“We continued to deliver on our commitment to sustainable revenue growth and improved profitability, demonstrated by our Q4 2021 and full year results,” said
“We recently established a new operating model to strengthen our go-to-market strategy and better position Huron to integrate our deep industry expertise with our strong digital, strategy and financial advisory capabilities. Our business alignment builds upon the historical collaboration across our teams while creating a platform to drive greater efficiencies companywide, which we believe will provide improved growth and profitability for our shareholders,” added Roth.
COVID-19 IMPACT
The worldwide spread of the coronavirus (COVID-19) has created significant volatility, uncertainty and disruption to the global economy. The company continues to closely monitor the impact of the pandemic on all aspects of its business, including how it will impact its clients, employees and business partners. In most of 2020 and the first quarter of 2021, the COVID-19 pandemic negatively impacted sales and elongated the sales cycle for new opportunities for certain services, particularly within the company's Healthcare and Education segments as some clients reprioritized or delayed certain projects. Conversely, the pandemic strengthened demand for the company's cloud-based technology and analytics solutions and certain services provided to organizations in transition within the company's Business Advisory segment.
Beginning in the second quarter of 2021 and continuing through the end of 2021, the company saw an increase in its sales pipeline and the pace of signings, particularly within its Healthcare and Education businesses, as well as strengthened demand across all segments. As a result, fourth quarter and full year 2021 revenues increased compared to the same prior year periods. The company expects continued revenue growth in 2022 compared to 2021.
FOURTH QUARTER 2021 RESULTS FROM CONTINUING OPERATIONS
Revenues increased
Net income from continuing operations increased to
Fourth quarter 2021 earnings before interest, taxes, depreciation and amortization ("EBITDA")(8) 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 |
||||||
|
|
2021 |
|
2020 |
||||
|
Amortization of intangible assets |
$ |
2,328 |
|
|
$ |
3,138 |
|
|
Restructuring and other charges |
$ |
9,235 |
|
|
$ |
18,748 |
|
|
Litigation and other losses |
$ |
100 |
|
|
$ |
— |
|
|
(Gain) loss on sale of businesses(1) |
$ |
(31,510 |
) |
|
$ |
1,501 |
|
|
Transaction-related expenses |
$ |
1,447 |
|
|
$ |
695 |
|
|
Unrealized gain on preferred stock investment |
$ |
— |
|
|
$ |
(1,667 |
) |
|
Tax effect of adjustments |
$ |
4,530 |
|
|
$ |
(6,158 |
) |
|
Foreign currency transaction losses (gains), net |
$ |
21 |
|
|
$ |
(276 |
) |
______________________
(1) On
Adjusted EBITDA(8) increased
The average number of billable consultants(2) increased 9.7% to 2,880 in the fourth quarter of 2021 from 2,626 in the same quarter last year. Billable consultant utilization rate(3) was 70.0% during the fourth quarter of 2021 compared to 68.0% during the same period last year. Average billing rate per hour for our billable consultants(4) was
FULL YEAR 2021 RESULTS FROM CONTINUING OPERATIONS
Revenues increased
Net income from continuing operations was
EBITDA(8) 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 |
||||||
|
|
2021 |
|
2020 |
||||
|
Amortization of intangible assets |
$ |
9,251 |
|
|
$ |
12,696 |
|
|
Restructuring and other charges |
$ |
12,401 |
|
|
$ |
21,374 |
|
|
Litigation and other losses (gains), net |
$ |
198 |
|
|
$ |
(150 |
) |
|
|
$ |
— |
|
|
$ |
59,816 |
|
|
Unrealized gain on preferred stock investment |
$ |
— |
|
|
$ |
(1,667 |
) |
|
(Gain) loss on sale of businesses(1) |
$ |
(31,510 |
) |
|
$ |
1,603 |
|
|
Transaction-related expenses |
$ |
1,782 |
|
|
$ |
1,132 |
|
|
Tax effect of adjustments |
$ |
1,742 |
|
|
$ |
(23,199 |
) |
|
Foreign currency transaction losses, net |
$ |
419 |
|
|
$ |
(31 |
) |
_____________________
(1) On
Adjusted EBITDA(8) increased
The average number of billable consultants(2) increased 4.5% to 2,716 for full year 2021 from 2,600 for the same prior year period. Billable consultant utilization rate(3) was 71.1% for full year 2021, compared to 70.7% in the same period last year. Average billing rate per hour for billable consultants(4) 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 2021 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (42%); Business Advisory (32%); and Education (26%). 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
OUTLOOK FOR 2022
Based on currently available information, the company provided guidance for full year 2022 revenues before reimbursable expenses in a range of
Management will provide a more detailed discussion of its outlook during the company's earnings conference call webcast.
FOURTH QUARTER 2021 WEBCAST
The company will host a webcast to discuss its financial results today,
2022 BUSINESS REALIGNMENT AND CHANGES TO SEGMENT REPORTING
Effective
To align with the new operating model, effective with reporting for periods beginning
Supplemental materials that include unaudited recast summary financial information and other operating data according to the new reporting segments can be found on the investor relations section of Huron's website at http://ir.huronconsultinggroup.com.
VIRTUAL INVESTOR DAY
Huron will host an Investor Day on
Chief executive officer
After the conclusion of the event, a transcript and a replay of the video webcast, including the Q&A session, will be available on the investor relations section of Huron’s website at http://ir.huronconsultinggroup.com and will be available for one year.
USE OF NON-GAAP FINANCIAL MEASURES(8)
In evaluating the company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Management uses these non-GAAP financial measures to gain an understanding of the company's 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 the company's ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing their business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. Management believes 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
Management has provided its outlook regarding adjusted EBITDA and adjusted diluted earnings per share, both of which are non-GAAP financial measures and exclude certain charges. Management has not reconciled these non-GAAP financial measures to the corresponding GAAP financial measures because guidance for the various reconciling items is not provided. Management is unable to provide guidance for these reconciling items because they cannot determine their probable significance, as certain items are outside of the company's control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.
ABOUT HURON
Huron is a global consultancy that collaborates with clients to drive strategic growth, ignite innovation and navigate constant change. Through a combination of strategy, expertise and creativity, we help clients accelerate operational, digital and cultural transformation, enabling the change they need to own their future. By embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve. Learn more at www.huronconsultinggroup.com.
Statements in this press release that are not historical in nature, including those concerning the company’s current expectations about its future results, 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,” “guidance,” or “outlook” or similar expressions. These forward-looking statements reflect the company's current expectations about 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: the impact of the COVID-19 pandemic on the economy, our clients and client demand for our services, and our ability to sell and provide services, including the measures taken by governmental authorities and businesses in response to the pandemic, which may cause or contribute to other risks and uncertainties that we face; failure to achieve expected utilization rates, billing rates and the number of revenue-generating professionals; inability to expand or adjust our service offerings in response to market demands; our dependence on renewal of client-based services; dependence on new business and retention of current clients and qualified personnel; failure to maintain third-party provider relationships and strategic alliances; inability to license technology to and from third parties; the impairment of goodwill; various factors related to income and other taxes; difficulties in successfully integrating the businesses we acquire and achieving expected benefits from such acquisitions; risks relating to privacy, information security, and related laws and standards; and a general downturn in market conditions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including, among others, those described under “Item 1A. Risk Factors” in Huron's Annual Report on Form 10-K for the year ended
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Revenues and reimbursable expenses: |
|
|
|
|
|
|
|
||||||||
|
Revenues |
$ |
248,294 |
|
|
$ |
198,347 |
|
|
$ |
905,640 |
|
|
$ |
844,127 |
|
|
Reimbursable expenses |
|
12,442 |
|
|
|
1,754 |
|
|
|
21,318 |
|
|
|
26,887 |
|
|
Total revenues and reimbursable expenses |
|
260,736 |
|
|
|
200,101 |
|
|
|
926,958 |
|
|
|
871,014 |
|
|
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses): |
|
|
|
|
|
|
|
||||||||
|
Direct costs |
|
173,233 |
|
|
|
141,207 |
|
|
|
636,776 |
|
|
|
592,428 |
|
|
Amortization of intangible assets and software development costs |
|
1,058 |
|
|
|
1,361 |
|
|
|
3,803 |
|
|
|
5,366 |
|
|
Reimbursable expenses |
|
12,136 |
|
|
|
1,823 |
|
|
|
21,369 |
|
|
|
26,918 |
|
|
Total direct costs and reimbursable expenses |
|
186,427 |
|
|
|
144,391 |
|
|
|
661,948 |
|
|
|
624,712 |
|
|
Operating expenses and other losses (gains), net: |
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative expenses |
|
49,410 |
|
|
|
43,822 |
|
|
|
177,886 |
|
|
|
170,686 |
|
|
Restructuring charges |
|
9,235 |
|
|
|
18,748 |
|
|
|
12,401 |
|
|
|
20,525 |
|
|
Litigation and other losses (gains) |
|
100 |
|
|
|
— |
|
|
|
198 |
|
|
|
(150 |
) |
|
Depreciation and amortization |
|
5,400 |
|
|
|
5,794 |
|
|
|
21,686 |
|
|
|
24,277 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,816 |
|
|
Total operating expenses and other losses (gains), net |
|
64,145 |
|
|
|
68,364 |
|
|
|
212,171 |
|
|
|
275,154 |
|
|
Operating income (loss) |
|
10,164 |
|
|
|
(12,654 |
) |
|
|
52,839 |
|
|
|
(28,852 |
) |
|
Other income (expense), net: |
|
|
|
|
|
|
|
||||||||
|
Interest expense, net of interest income |
|
(2,185 |
) |
|
|
(1,776 |
) |
|
|
(8,150 |
) |
|
|
(9,292 |
) |
|
Other income, net |
|
33,170 |
|
|
|
3,584 |
|
|
|
35,347 |
|
|
|
4,271 |
|
|
Total other income (expense), net |
|
30,985 |
|
|
|
1,808 |
|
|
|
27,197 |
|
|
|
(5,021 |
) |
|
Income (loss) from continuing operations before taxes |
|
41,149 |
|
|
|
(10,846 |
) |
|
|
80,036 |
|
|
|
(33,873 |
) |
|
Income tax expense (benefit) |
|
10,091 |
|
|
|
(4,742 |
) |
|
|
17,049 |
|
|
|
(10,155 |
) |
|
Net income (loss) from continuing operations |
|
31,058 |
|
|
|
(6,104 |
) |
|
|
62,987 |
|
|
|
(23,718 |
) |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
|
(33 |
) |
|
|
— |
|
|
|
(122 |
) |
|
Net income (loss) |
$ |
31,058 |
|
|
$ |
(6,137 |
) |
|
$ |
62,987 |
|
|
$ |
(23,840 |
) |
|
Net earnings (loss) per basic share: |
|
|
|
|
|
|
|
||||||||
|
Net income (loss) from continuing operations |
$ |
1.48 |
|
|
$ |
(0.28 |
) |
|
$ |
2.94 |
|
|
$ |
(1.08 |
) |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
Net income (loss) |
$ |
1.48 |
|
|
$ |
(0.28 |
) |
|
$ |
2.94 |
|
|
$ |
(1.09 |
) |
|
Net earnings (loss) per diluted share: |
|
|
|
|
|
|
|
||||||||
|
Net income (loss) from continuing operations |
$ |
1.45 |
|
|
$ |
(0.28 |
) |
|
$ |
2.89 |
|
|
$ |
(1.08 |
) |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
Net income (loss) |
$ |
1.45 |
|
|
$ |
(0.28 |
) |
|
$ |
2.89 |
|
|
$ |
(1.09 |
) |
|
Weighted average shares used in calculating earnings (loss) per share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
21,039 |
|
|
|
21,903 |
|
|
|
21,439 |
|
|
|
21,882 |
|
|
Diluted |
|
21,466 |
|
|
|
21,903 |
|
|
|
21,809 |
|
|
|
21,882 |
|
|
Comprehensive income (loss): |
|
|
|
|
|
|
|
||||||||
|
Net income (loss) |
$ |
31,058 |
|
|
$ |
(6,137 |
) |
|
$ |
62,987 |
|
|
$ |
(23,840 |
) |
|
Foreign currency translation adjustments, net of tax |
|
(1,161 |
) |
|
|
642 |
|
|
|
(925 |
) |
|
|
348 |
|
|
Unrealized gain on investment, net of tax |
|
3,237 |
|
|
|
2,374 |
|
|
|
1,169 |
|
|
|
1,323 |
|
|
Unrealized gain (loss) on cash flow hedging instruments, net of tax |
|
1,579 |
|
|
|
87 |
|
|
|
3,535 |
|
|
|
(3,546 |
) |
|
Other comprehensive income (loss) |
|
3,655 |
|
|
|
3,103 |
|
|
|
3,779 |
|
|
|
(1,875 |
) |
|
Comprehensive income (loss) |
$ |
34,713 |
|
|
$ |
(3,034 |
) |
|
$ |
66,766 |
|
|
$ |
(25,715 |
) |
|
CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) |
|||||||
|
|
|
|
|
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
20,781 |
|
|
$ |
67,177 |
|
|
Receivables from clients, net |
|
122,316 |
|
|
|
87,687 |
|
|
Unbilled services, net |
|
91,285 |
|
|
|
53,959 |
|
|
Income tax receivable |
|
8,071 |
|
|
|
5,121 |
|
|
Prepaid expenses and other current assets |
|
15,229 |
|
|
|
16,569 |
|
|
Total current assets |
|
257,682 |
|
|
|
230,513 |
|
|
Property and equipment, net |
|
31,004 |
|
|
|
29,093 |
|
|
Deferred income taxes, net |
|
1,804 |
|
|
|
4,191 |
|
|
Long-term investments |
|
72,584 |
|
|
|
71,030 |
|
|
Operating lease right-of-use assets |
|
35,311 |
|
|
|
39,360 |
|
|
Other non-current assets |
|
68,191 |
|
|
|
62,068 |
|
|
Intangible assets, net |
|
31,894 |
|
|
|
20,483 |
|
|
|
|
620,879 |
|
|
|
594,237 |
|
|
Total assets |
$ |
1,119,349 |
|
|
$ |
1,050,975 |
|
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
13,621 |
|
|
$ |
648 |
|
|
Accrued expenses and other current liabilities |
|
22,519 |
|
|
|
14,874 |
|
|
Accrued payroll and related benefits |
|
139,131 |
|
|
|
133,830 |
|
|
Current maturities of long-term debt |
|
559 |
|
|
|
499 |
|
|
Current maturities of operating lease liabilities |
|
10,142 |
|
|
|
8,771 |
|
|
Deferred revenues |
|
19,212 |
|
|
|
28,247 |
|
|
Total current liabilities |
|
205,184 |
|
|
|
186,869 |
|
|
Non-current liabilities: |
|
|
|
||||
|
Deferred compensation and other liabilities |
|
43,458 |
|
|
|
47,131 |
|
|
Long-term debt, net of current portion |
|
232,221 |
|
|
|
202,780 |
|
|
Operating lease liabilities, net of current portion |
|
54,313 |
|
|
|
61,825 |
|
|
Deferred income taxes, net |
|
12,273 |
|
|
|
428 |
|
|
Total non-current liabilities |
|
342,265 |
|
|
|
312,164 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Stockholders’ equity |
|
|
|
||||
|
Common stock; |
|
239 |
|
|
|
246 |
|
|
|
|
(135,969 |
) |
|
|
(129,886 |
) |
|
Additional paid-in capital |
|
413,794 |
|
|
|
454,512 |
|
|
Retained earnings |
|
276,996 |
|
|
|
214,009 |
|
|
Accumulated other comprehensive income |
|
16,840 |
|
|
|
13,061 |
|
|
Total stockholders’ equity |
|
571,900 |
|
|
|
551,942 |
|
|
Total liabilities and stockholders’ equity |
$ |
1,119,349 |
|
|
$ |
1,050,975 |
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||
|
|
Twelve Months Ended |
||||||
|
|
|
2021 |
|
|
|
2020 |
|
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income (loss) |
$ |
62,987 |
|
|
$ |
(23,840 |
) |
|
Adjustments to reconcile net income (loss) to cash flows from operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
25,978 |
|
|
|
30,222 |
|
|
Non-cash lease expense |
|
6,967 |
|
|
|
7,763 |
|
|
Lease impairment charges |
|
— |
|
|
|
13,217 |
|
|
Share-based compensation |
|
25,857 |
|
|
|
24,081 |
|
|
Amortization of debt discount and issuance costs |
|
794 |
|
|
|
793 |
|
|
|
|
— |
|
|
|
59,816 |
|
|
Allowances for doubtful accounts |
|
13 |
|
|
|
1,050 |
|
|
Deferred income taxes |
|
12,480 |
|
|
|
(9,859 |
) |
|
(Gain) loss on sales of businesses, excluding transaction costs |
|
(32,824 |
) |
|
|
1,603 |
|
|
Change in fair value of contingent consideration liabilities |
|
173 |
|
|
|
— |
|
|
Change in fair value of preferred stock investment |
|
— |
|
|
|
(1,667 |
) |
|
Other, net |
|
(421 |
) |
|
|
(25 |
) |
|
Changes in operating assets and liabilities, net of acquisition and divestiture: |
|
|
|
||||
|
(Increase) decrease in receivables from clients, net |
|
(39,845 |
) |
|
|
33,051 |
|
|
(Increase) decrease in unbilled services, net |
|
(38,820 |
) |
|
|
18,876 |
|
|
(Increase) decrease in current income tax receivable / payable, net |
|
(2,723 |
) |
|
|
(3,662 |
) |
|
(Increase) decrease in other assets |
|
(2,670 |
) |
|
|
(11,972 |
) |
|
Increase (decrease) in accounts payable and other liabilities |
|
10,394 |
|
|
|
(7,786 |
) |
|
Increase (decrease) in accrued payroll and related benefits |
|
(2,636 |
) |
|
|
(1,169 |
) |
|
Increase (decrease) in deferred revenues |
|
(7,717 |
) |
|
|
6,246 |
|
|
Net cash provided by operating activities |
|
17,987 |
|
|
|
136,738 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of property and equipment |
|
(10,871 |
) |
|
|
(8,125 |
) |
|
Investment in life insurance policies |
|
(1,245 |
) |
|
|
(2,462 |
) |
|
Purchases of businesses, net of cash acquired |
|
(44,819 |
) |
|
|
(8,701 |
) |
|
Purchase of investment securities |
|
— |
|
|
|
(13,000 |
) |
|
Capitalization of internally developed software costs |
|
(4,889 |
) |
|
|
(8,272 |
) |
|
Proceeds from sale of property and equipment |
|
408 |
|
|
|
25 |
|
|
Divestiture of businesses, net of cash sold |
|
41,273 |
|
|
|
(1,499 |
) |
|
Net cash used in investing activities |
|
(20,143 |
) |
|
|
(42,034 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Proceeds from exercise of stock options |
|
804 |
|
|
|
1,003 |
|
|
Shares redeemed for employee tax withholdings |
|
(10,103 |
) |
|
|
(7,903 |
) |
|
Share repurchases |
|
(64,612 |
) |
|
|
(27,141 |
) |
|
Proceeds from bank borrowings |
|
235,000 |
|
|
|
283,000 |
|
|
Repayments of bank borrowings |
|
(205,499 |
) |
|
|
(288,574 |
) |
|
Net cash used in financing activities |
|
(44,410 |
) |
|
|
(39,615 |
) |
|
Effect of exchange rate changes on cash |
|
170 |
|
|
|
484 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
(46,396 |
) |
|
|
55,573 |
|
|
Cash and cash equivalents at beginning of the period |
|
67,177 |
|
|
|
11,604 |
|
|
Cash and cash equivalents at end of the period |
$ |
20,781 |
|
|
$ |
67,177 |
|
|
|
|||||||||||
|
In conjunction with the company's continuous evaluation of the appropriate level of disaggregation of revenues as the company's business evolves and in consideration of a group hire of approximately 300 employees in the company's Healthcare Managed Services solution within its Healthcare segment in the second quarter of 2021, the company began assessing its operating performance by the following three employee types: billable consultants, full-time equivalents, and Healthcare Managed Services employees. The other operating data previously reported for the three and twelve months ended |
|||||||||||
|
|
|
Three Months Ended |
|
Percent |
|||||||
|
Segment and Consolidated Operating Results (in thousands): |
|
|
2021 |
|
|
|
2020 |
|
|
||
|
Healthcare: |
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
103,653 |
|
|
$ |
85,097 |
|
|
21.8 |
% |
|
Operating income |
|
$ |
25,647 |
|
|
$ |
24,094 |
|
|
6.4 |
% |
|
Segment operating income as a percentage of segment revenues |
|
|
24.7 |
% |
|
|
28.3 |
% |
|
|
|
|
Business Advisory: |
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
77,922 |
|
|
$ |
65,938 |
|
|
18.2 |
% |
|
Operating income |
|
$ |
10,952 |
|
|
$ |
10,740 |
|
|
2.0 |
% |
|
Segment operating income as a percentage of segment revenues |
|
|
14.1 |
% |
|
|
16.3 |
% |
|
|
|
|
Education: |
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
66,719 |
|
|
$ |
47,312 |
|
|
41.0 |
% |
|
Operating income |
|
$ |
15,561 |
|
|
$ |
5,711 |
|
|
172.5 |
% |
|
Segment operating income as a percentage of segment revenues |
|
|
23.3 |
% |
|
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
248,294 |
|
|
$ |
198,347 |
|
|
25.2 |
% |
|
Reimbursable expenses |
|
|
12,442 |
|
|
|
1,754 |
|
|
N/M |
|
|
Total revenues and reimbursable expenses |
|
$ |
260,736 |
|
|
$ |
200,101 |
|
|
30.3 |
% |
|
Statements of Operations reconciliation: |
|
|
|
|
|
|
|||||
|
Segment operating income |
|
$ |
52,160 |
|
|
$ |
40,545 |
|
|
28.6 |
% |
|
Items not allocated at the segment level: |
|
|
|
|
|
|
|||||
|
Other operating expenses |
|
|
36,836 |
|
|
|
47,429 |
|
|
(22.3 |
) % |
|
Litigation and other losses |
|
|
75 |
|
|
|
— |
|
|
N/M |
|
|
Depreciation and amortization |
|
|
5,085 |
|
|
|
5,770 |
|
|
(11.9 |
) % |
|
Total operating income (loss) |
|
|
10,164 |
|
|
|
(12,654 |
) |
|
N/M |
|
|
Other income |
|
|
30,985 |
|
|
|
1,808 |
|
|
N/M |
|
|
Income (loss) from continuing operations before taxes |
|
$ |
41,149 |
|
|
$ |
(10,846 |
) |
|
N/M |
|
|
Other Operating Data: |
|
|
|
|
|
|
|||||
|
Number of billable consultants (at period end) (2): |
|
|
|
|
|
|
|||||
|
Healthcare |
|
|
869 |
|
|
|
820 |
|
|
6.0 |
% |
|
Business Advisory |
|
|
1,116 |
|
|
|
1,051 |
|
|
6.2 |
% |
|
Education |
|
|
901 |
|
|
|
737 |
|
|
22.3 |
% |
|
Total |
|
|
2,886 |
|
|
|
2,608 |
|
|
10.7 |
% |
|
Average number of billable consultants (for the period) (2): |
|
|
|
|
|
|
|||||
|
Healthcare |
|
|
866 |
|
|
|
834 |
|
|
|
|
|
Business Advisory |
|
|
1,148 |
|
|
|
1,028 |
|
|
|
|
|
Education |
|
|
866 |
|
|
|
764 |
|
|
|
|
|
Total |
|
|
2,880 |
|
|
|
2,626 |
|
|
|
|
|
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited) |
||||||||
|
|
|
Three Months Ended |
||||||
|
Other Operating Data (continued): |
|
|
2021 |
|
|
|
2020 |
|
|
Billable consultant utilization rate (3): |
|
|
|
|
||||
|
Healthcare |
|
|
70.1 |
% |
|
|
65.1 |
% |
|
Business Advisory |
|
|
68.3 |
% |
|
|
71.6 |
% |
|
Education |
|
|
72.1 |
% |
|
|
66.1 |
% |
|
Total |
|
|
70.0 |
% |
|
|
68.0 |
% |
|
Billable consultant average billing rate per hour (4): |
|
|
|
|
||||
|
Healthcare |
|
$ |
276 |
|
|
$ |
261 |
|
|
Business Advisory (5) |
|
$ |
219 |
|
|
$ |
189 |
|
|
Education |
|
$ |
201 |
|
|
$ |
179 |
|
|
Total (5) |
|
$ |
231 |
|
|
$ |
206 |
|
|
Revenue per billable consultant (in thousands): |
|
|
|
|
||||
|
Healthcare |
|
$ |
84 |
|
|
$ |
69 |
|
|
Business Advisory |
|
$ |
64 |
|
|
$ |
60 |
|
|
Education |
|
$ |
63 |
|
|
$ |
53 |
|
|
Total |
|
$ |
69 |
|
|
$ |
61 |
|
|
Average number of full-time equivalents (for the period) (6): |
|
|
|
|
||||
|
Healthcare |
|
|
153 |
|
|
|
183 |
|
|
Business Advisory |
|
|
61 |
|
|
|
40 |
|
|
Education |
|
|
87 |
|
|
|
40 |
|
|
Total |
|
|
301 |
|
|
|
263 |
|
|
Revenue per full-time equivalent (in thousands): |
|
|
|
|
||||
|
Healthcare |
|
$ |
124 |
|
|
$ |
110 |
|
|
Business Advisory |
|
$ |
75 |
|
|
$ |
94 |
|
|
Education |
|
$ |
144 |
|
|
$ |
170 |
|
|
Total |
|
$ |
120 |
|
|
$ |
117 |
|
|
Healthcare Managed Services(7): |
|
|
|
|
||||
|
Total revenues (in thousands) |
|
$ |
12,309 |
|
|
$ |
7,171 |
|
|
Average number of Healthcare Managed Services employees (for the period) |
|
|
513 |
|
|
|
92 |
|
|
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited) |
|||||||||||
|
|
|
Twelve Months Ended |
|
Percent |
|||||||
|
Segment and Consolidated Operating Results (in thousands): |
|
|
2021 |
|
|
|
2020 |
|
|
||
|
Healthcare: |
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
377,577 |
|
|
$ |
353,437 |
|
|
6.8 |
% |
|
Operating income |
|
$ |
104,010 |
|
|
$ |
94,925 |
|
|
9.6 |
% |
|
Segment operating income as a percentage of segment revenues |
|
|
27.5 |
% |
|
|
26.9 |
% |
|
|
|
|
Business Advisory: |
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
291,663 |
|
|
$ |
267,361 |
|
|
9.1 |
% |
|
Operating income |
|
$ |
48,236 |
|
|
$ |
48,046 |
|
|
0.4 |
% |
|
Segment operating income as a percentage of segment revenues |
|
|
16.5 |
% |
|
|
18.0 |
% |
|
|
|
|
Education: |
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
236,400 |
|
|
$ |
223,329 |
|
|
5.9 |
% |
|
Operating income |
|
$ |
52,772 |
|
|
$ |
47,503 |
|
|
11.1 |
% |
|
Segment operating income as a percentage of segment revenues |
|
|
22.3 |
% |
|
|
21.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenues |
|
$ |
905,640 |
|
|
$ |
844,127 |
|
|
7.3 |
% |
|
Reimbursable expenses |
|
|
21,318 |
|
|
|
26,887 |
|
|
(20.7 |
) % |
|
Total revenues and reimbursable expenses |
|
$ |
926,958 |
|
|
$ |
871,014 |
|
|
6.4 |
% |
|
Statements of Operations reconciliation: |
|
|
|
|
|
|
|||||
|
Segment operating income |
|
$ |
205,018 |
|
|
$ |
190,474 |
|
|
7.6 |
% |
|
Items not allocated at the segment level: |
|
|
|
|
|
|
|||||
|
Other operating expenses |
|
|
131,372 |
|
|
|
135,255 |
|
|
(2.9 |
) % |
|
Litigation and other losses (gains) |
|
|
173 |
|
|
|
(150 |
) |
|
N/M |
|
|
Depreciation and amortization |
|
|
20,634 |
|
|
|
24,405 |
|
|
(15.5 |
) % |
|
|
|
|
— |
|
|
|
59,816 |
|
|
N/M |
|
|
Total operating income (loss) |
|
|
52,839 |
|
|
|
(28,852 |
) |
|
N/M |
|
|
Other income (expense), net |
|
|
27,197 |
|
|
|
(5,021 |
) |
|
N/M |
|
|
Income (loss) from continuing operations before taxes |
|
$ |
80,036 |
|
|
$ |
(33,873 |
) |
|
N/M |
|
|
Other Operating Data: |
|
|
|
|
|
|
|||||
|
Number of billable consultants (at period end) (2): |
|
|
|
|
|
|
|||||
|
Healthcare |
|
|
869 |
|
|
|
820 |
|
|
6.0 |
% |
|
Business Advisory |
|
|
1,116 |
|
|
|
1,051 |
|
|
6.2 |
% |
|
Education |
|
|
901 |
|
|
|
737 |
|
|
22.3 |
% |
|
Total |
|
|
2,886 |
|
|
|
2,608 |
|
|
10.7 |
% |
|
Average number of billable consultants (for the period) (2): |
|
|
|
|
|
|
|||||
|
Healthcare |
|
|
822 |
|
|
|
863 |
|
|
|
|
|
Business Advisory |
|
|
1,115 |
|
|
|
962 |
|
|
|
|
|
Education |
|
|
779 |
|
|
|
775 |
|
|
|
|
|
Total |
|
|
2,716 |
|
|
|
2,600 |
|
|
|
|
|
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED) (Unaudited) |
||||||||
|
|
|
Twelve Months Ended |
||||||
|
Other Operating Data (continued): |
|
|
2021 |
|
|
|
2020 |
|
|
Billable consultant utilization rate (3): |
|
|
|
|
||||
|
Healthcare |
|
|
72.0 |
% |
|
|
69.0 |
% |
|
Business Advisory |
|
|
69.1 |
% |
|
|
72.4 |
% |
|
Education |
|
|
73.0 |
% |
|
|
70.3 |
% |
|
Total |
|
|
71.1 |
% |
|
|
70.7 |
% |
|
Billable consultant average billing rate per hour (4): |
|
|
|
|
||||
|
Healthcare |
|
$ |
243 |
|
|
$ |
227 |
|
|
Business Advisory (5) |
|
$ |
198 |
|
|
$ |
195 |
|
|
Education |
|
$ |
190 |
|
|
$ |
187 |
|
|
Total (5) |
|
$ |
209 |
|
|
$ |
202 |
|
|
Revenue per billable consultant (in thousands): |
|
|
|
|
||||
|
Healthcare |
|
$ |
305 |
|
|
$ |
272 |
|
|
Business Advisory |
|
$ |
246 |
|
|
$ |
264 |
|
|
Education |
|
$ |
253 |
|
|
$ |
247 |
|
|
Total |
|
$ |
266 |
|
|
$ |
262 |
|
|
Average number of full-time equivalents (for the period) (6): |
|
|
|
|
||||
|
Healthcare |
|
|
153 |
|
|
|
187 |
|
|
Business Advisory |
|
|
52 |
|
|
|
30 |
|
|
Education |
|
|
53 |
|
|
|
52 |
|
|
Total |
|
|
258 |
|
|
|
269 |
|
|
Revenue per full-time equivalent (in thousands): |
|
|
|
|
||||
|
Healthcare |
|
$ |
518 |
|
|
$ |
481 |
|
|
Business Advisory |
|
$ |
343 |
|
|
$ |
455 |
|
|
Education |
|
$ |
743 |
|
|
$ |
618 |
|
|
Total |
|
$ |
528 |
|
|
$ |
504 |
|
|
Healthcare Managed Services(7): |
|
|
|
|
||||
|
Total revenues (in thousands) |
|
$ |
47,718 |
|
|
$ |
28,663 |
|
|
Average number of Healthcare Managed Services employees (for the period) |
|
|
382 |
|
|
|
91 |
|
______________________
|
(1) |
The non-cash goodwill impairment charges are not allocated at the segment level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance. |
|
|
(2) |
Consists of our consulting professionals who provide consulting services and generate revenues based on the number of hours worked. |
|
|
(3) |
Utilization rate for billable consultants is calculated by dividing the number of hours billable consultants worked on client assignments during a period by the total available working hours for 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 billable consultants is calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period. |
|
|
(5) |
The Business Advisory segment includes operations of Huron Eurasia India. Absent the impact of Huron Eurasia India, the average billing rate per hour for the Business Advisory segment would have been |
|
|
|
Absent the impact of Huron Eurasia India, Huron's consolidated average billing rate per hour would have been |
|
|
(6) |
Consists of coaches and their support staff within the Culture and Organizational Excellence solution, consultants who work variable schedules as needed by clients, and full-time employees who provide software support and maintenance services to clients. |
|
|
(7) |
Consists of employees who manage and provide revenue cycle billing, collections, insurance verification and change integrity services to our healthcare clients. |
|
| N/M - Not Meaningful | ||
|
RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (8) (In thousands) (Unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Revenues |
$ |
248,294 |
|
|
$ |
198,347 |
|
|
$ |
905,640 |
|
|
$ |
844,127 |
|
|
Net income (loss) from continuing operations |
$ |
31,058 |
|
|
$ |
(6,104 |
) |
|
$ |
62,987 |
|
|
$ |
(23,718 |
) |
|
Add back: |
|
|
|
|
|
|
|
||||||||
|
Income tax expense (benefit) |
|
10,091 |
|
|
|
(4,742 |
) |
|
|
17,049 |
|
|
|
(10,155 |
) |
|
Interest expense, net of interest income |
|
2,185 |
|
|
|
1,776 |
|
|
|
8,150 |
|
|
|
9,292 |
|
|
Depreciation and amortization |
|
6,707 |
|
|
|
7,156 |
|
|
|
26,347 |
|
|
|
29,644 |
|
|
Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) (8) |
|
50,041 |
|
|
|
(1,914 |
) |
|
|
114,533 |
|
|
|
5,063 |
|
|
Add back: |
|
|
|
|
|
|
|
||||||||
|
Restructuring and other charges |
|
9,235 |
|
|
|
18,748 |
|
|
|
12,401 |
|
|
|
21,374 |
|
|
Litigation and other losses (gains) |
|
100 |
|
|
|
— |
|
|
|
198 |
|
|
|
(150 |
) |
|
Unrealized gain on preferred stock investment |
|
— |
|
|
|
(1,667 |
) |
|
|
— |
|
|
|
(1,667 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,816 |
|
|
(Gain) loss on sale of businesses |
|
(31,510 |
) |
|
|
1,501 |
|
|
|
(31,510 |
) |
|
|
1,603 |
|
|
Transaction-related expenses |
|
1,447 |
|
|
|
695 |
|
|
|
1,782 |
|
|
|
1,132 |
|
|
Foreign currency transaction losses (gains), net |
|
21 |
|
|
|
(276 |
) |
|
|
419 |
|
|
|
(31 |
) |
|
Adjusted EBITDA (8) |
$ |
29,334 |
|
|
$ |
17,087 |
|
|
$ |
97,823 |
|
|
$ |
87,140 |
|
|
Adjusted EBITDA as a percentage of revenues (8) |
|
11.8 |
% |
|
|
8.6 |
% |
|
|
10.8 |
% |
|
|
10.3 |
% |
|
RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (8) (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Net income (loss) from continuing operations |
$ |
31,058 |
|
|
$ |
(6,104 |
) |
|
$ |
62,987 |
|
|
$ |
(23,718 |
) |
|
Weighted average shares - diluted |
|
21,466 |
|
|
|
21,903 |
|
|
|
21,809 |
|
|
|
21,882 |
|
|
Diluted earnings (loss) per share from continuing operations |
$ |
1.45 |
|
|
$ |
(0.28 |
) |
|
$ |
2.89 |
|
|
$ |
(1.08 |
) |
|
Add back: |
|
|
|
|
|
|
|
||||||||
|
Amortization of intangible assets |
|
2,328 |
|
|
|
3,138 |
|
|
|
9,251 |
|
|
|
12,696 |
|
|
Restructuring and other charges |
|
9,235 |
|
|
|
18,748 |
|
|
|
12,401 |
|
|
|
21,374 |
|
|
Litigation and other losses (gains) |
|
100 |
|
|
|
— |
|
|
|
198 |
|
|
|
(150 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,816 |
|
|
Unrealized gain on preferred stock investment |
|
— |
|
|
|
(1,667 |
) |
|
|
— |
|
|
|
(1,667 |
) |
|
(Gain) loss on sale of businesses |
|
(31,510 |
) |
|
|
1,501 |
|
|
|
(31,510 |
) |
|
|
1,603 |
|
|
Transaction-related expenses |
|
1,447 |
|
|
|
695 |
|
|
|
1,782 |
|
|
|
1,132 |
|
|
Tax effect of adjustments |
|
4,530 |
|
|
|
(6,158 |
) |
|
|
1,742 |
|
|
|
(23,199 |
) |
|
Total adjustments, net of tax |
|
(13,870 |
) |
|
|
16,257 |
|
|
|
(6,136 |
) |
|
|
71,605 |
|
|
Adjusted net income from continuing operations (8) |
$ |
17,188 |
|
|
$ |
10,153 |
|
|
$ |
56,851 |
|
|
$ |
47,887 |
|
|
Adjusted weighted average shares - diluted (9) |
|
21,466 |
|
|
|
22,323 |
|
|
|
21,809 |
|
|
|
22,299 |
|
|
Adjusted diluted earnings per share from continuing operations (8) |
$ |
0.80 |
|
|
$ |
0.45 |
|
|
$ |
2.61 |
|
|
$ |
2.15 |
|
|
(8) |
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. Management uses these non-GAAP financial measures to gain an understanding of the company's 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 the company's ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing the company's business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. Management believes 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 |
|
|
(9) |
As the company reported a net loss for the three and twelve months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005438/en/
MEDIA CONTACT
abovis@hcg.com
INVESTOR CONTACT
investor@hcg.com
Source: Huron