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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

May 1, 2018
Date of Report (Date of earliest event reported)
_____________________

Huron Consulting Group Inc.
(Exact name of registrant as specified in its charter)

Delaware
000-50976
01-0666114
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification Number)

550 West Van Buren Street
Chicago, Illinois
60607
(Address of principal executive offices)
(Zip Code)

(312) 583-8700
(Registrant’s telephone number, including area code)
_____________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o

 




Item 2.02.    Results of Operations and Financial Condition.

On May 1, 2018, Huron Consulting Group Inc. issued a press release announcing its financial results for the three months ended March 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished pursuant to this Item 2.02 and the attached Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d)     Exhibits
99.1     Press release, dated May 1, 2018





SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
 
Huron Consulting Group Inc.
 
 
 
(Registrant)
 
 
 
 
Date:
May 1, 2018
 
/s/ John D. Kelly
 
 
 
John D. Kelly
 
 
 
Executive Vice President, Chief Financial Officer, and Treasurer



Exhibit

Exhibit 99.1

https://cdn.kscope.io/ba6ebb8af88894bd65347370894de3ab-huronlogoa19.jpg
NEWS
 
MEDIA CONTACT
 
Sarah McHugh
FOR IMMEDIATE RELEASE
 
312-880-2624
 
 
smchugh@huronconsultinggroup.com
 
 
 
 
 
INVESTOR CONTACT
 
 
John D. Kelly
 
 
312-583-8722
 
 
investor@huronconsultinggroup.com
Huron Announces First Quarter 2018 Financial Results and Affirms 2018 Guidance
FIRST QUARTER 2018 HIGHLIGHTS
•
Revenues increased $4.8 million, or 2.6%, to $193.7 million in Q1 2018 compared to $188.8 million in Q1 2017.
•
Net loss from continuing operations was $3.2 million in Q1 2018 compared to net income from continuing operations of $5.2 million in Q1 2017.
•
Adjusted EBITDA(5), a non-GAAP measure, was $13.7 million in Q1 2018 compared to $27.1 million in Q1 2017.
•
Diluted loss per share from continuing operations was $0.15 in Q1 2018 compared to diluted earnings per share from continuing operations of $0.24 in Q1 2017.
•
Adjusted diluted earnings per share from continuing operations(5), a non-GAAP measure, was $0.19 in Q1 2018 compared to $0.55 in Q1 2017.
•
Huron affirms its previous earnings guidance range for full year 2018, including revenue expectations in a range of $720.0 million to $760.0 million.
CHICAGO - May 1, 2018 - Global professional services firm Huron (NASDAQ: HURN) today announced financial results from continuing operations for the first quarter ended March 31, 2018.
"Led by strong growth in our Education segment, our first quarter results were consistent with our expectations, and today we affirm our full year guidance" said James H. Roth, chief executive officer and president of Huron. "The Healthcare segment continued to make progress in its operational turnaround, and the Business Advisory segment reported solid revenue growth compared to prior year results.”
FIRST QUARTER 2018 RESULTS FROM CONTINUING OPERATIONS
Revenues increased $4.8 million, or 2.6%, to $193.7 million for the first quarter of 2018 compared to $188.8 million for the first quarter of 2017. First quarter 2018 revenues included $6.4 million of incremental revenues due to the full quarter impact of Huron's acquisition of Innosight, which was completed in March 2017, as well as revenues from the company's acquisition of the international assets of ADI Strategies, which was completed in April 2017 and has since been fully integrated into the Business Advisory segment.
Net loss from continuing operations was $3.2 million for the first quarter of 2018 compared to net income from continuing operations of $5.2 million for the same period last year. Diluted loss per share from continuing operations was $0.15 for the first quarter of 2018, compared to diluted earnings per share from continuing operations of $0.24 for the first quarter of 2017.

https://cdn.kscope.io/ba6ebb8af88894bd65347370894de3ab-huronlogoa21.jpg

First quarter 2018 earnings before interest, taxes, depreciation and amortization ("EBITDA")(5) was $12.2 million, compared to EBITDA of $26.8 million in the same period last year.
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
March 31,
 
2018
 
2017
Amortization of intangible assets
$
6,303

 
$
8,652

Non-cash interest on convertible notes
$
2,021

 
$
1,928

Other losses
$
830

 
$
—

Restructuring charges
$
712

 
$
279

Tax effect
$
(2,565
)
 
$
(4,192
)
Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017
$
132

 
$
—

Foreign currency transaction losses (gains)
$
(53
)
 
$
17

Adjusted EBITDA(5) was $13.7 million, or 7.1% of revenues, in the first quarter of 2018, compared to $27.1 million, or 14.4% of revenues, in the same quarter last year. Adjusted net income from continuing operations(5) was $4.2 million, or $0.19 per diluted share, for the first quarter of 2018, compared to $11.8 million, or $0.55 per diluted share, for the same period in 2017.
The average number of full-time billable consultants(1) increased 8.2% to 2,126 in the first quarter of 2018 compared to 1,965 in the same quarter last year. Full-time billable consultant utilization rate(2) was 73.7% during the first quarter of 2018 compared to 73.9% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $198 for the first quarter of 2018 compared to $216 for the first quarter of 2017. The average number of full-time equivalent professionals(4) was 264 in the first quarter of 2018 compared to 276 for the same period in 2017.
OPERATING SEGMENTS
Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges.
The company’s first quarter 2018 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (46%); Business Advisory (29%); and Education (25%). Financial results by segment are included in the attached schedules and in Huron's forthcoming Quarterly Report on Form 10-Q filing for the quarter ended March 31, 2018.
OUTLOOK FOR 2018(6) 
Based on currently available information, the company affirmed guidance for full year 2018 revenues before reimbursable expenses in a range of $720.0 million to $760.0 million. The company also anticipates net income in a range of $23.0 million to $29.5 million, and both EBITDA and adjusted EBITDA in a range of $86.5 million to $98.5 million. GAAP diluted earnings per share is expected in a range of $1.05 to $1.35, and non-GAAP adjusted diluted earnings per share is expected in a range of $2.10 to $2.40.
Management will provide a more detailed discussion of its outlook during the company’s earnings conference call webcast.
FIRST QUARTER 2018 WEBCAST
The company will host a webcast to discuss its financial results today, May 1, 2018, at 5:00 p.m. Eastern Time (4:00 p.m. Central Time). The conference call is being webcast by NASDAQ and can be accessed at Huron's website at http://ir.huronconsultinggroup.com. A replay will be available approximately two hours after the conclusion of the webcast and for 90 days thereafter. 

https://cdn.kscope.io/ba6ebb8af88894bd65347370894de3ab-huronlogoa21.jpg

USE OF NON-GAAP FINANCIAL MEASURES(5) 
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 the United States.
ABOUT HURON
Huron is a global consultancy that helps its clients drive growth, enhance performance and sustain leadership in the markets they serve. The company partners with clients to develop strategies and implement solutions that enable the transformative change its clients need to own their future. 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 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 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: 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 December 31, 2017, that may cause actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. The company disclaims any obligation to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.





HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
March 31,
 
2018
 
2017
Revenues and reimbursable expenses:
 
 
 
Revenues
$
193,679

 
$
188,849

Reimbursable expenses
17,619

 
16,950

Total revenues and reimbursable expenses
211,298

 
205,799

Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses):
 
 
 
Direct costs
132,786

 
115,741

Amortization of intangible assets and software development costs
1,218

 
2,986

Reimbursable expenses
17,549

 
16,869

Total direct costs and reimbursable expenses
151,553

 
135,596

Operating expenses and other losses:
 
 
 
Selling, general and administrative expenses
47,078

 
46,856

Restructuring charges
712

 
279

Other losses
830

 
—

Depreciation and amortization
8,803

 
8,919

Total operating expenses and other losses
57,423

 
56,054

Operating income
2,322

 
14,149

Other income (expense), net:
 
 
 
Interest expense, net of interest income
(4,986
)
 
(4,004
)
Other income (expense), net
(145
)
 
758

Total other expense, net
(5,131
)
 
(3,246
)
Income (loss) from continuing operations before taxes
(2,809
)
 
10,903

Income tax expense
413

 
5,748

Net income (loss) from continuing operations
(3,222
)
 
5,155

Income (loss) from discontinued operations, net of tax
(42
)
 
143

Net income (loss)
$
(3,264
)
 
$
5,298

Net earnings (loss) per basic share:
 
 
 
Net income (loss) from continuing operations
$
(0.15
)
 
$
0.24

Income (loss) from discontinued operations, net of tax
—

 
0.01

Net income (loss)
$
(0.15
)
 
$
0.25

Net earnings (loss) per diluted share:
 
 
 
Net income (loss) from continuing operations
$
(0.15
)
 
$
0.24

Income (loss) from discontinued operations, net of tax
—

 
0.01

Net income (loss)
$
(0.15
)
 
$
0.25

Weighted average shares used in calculating earnings per share:
 
 
 
Basic
21,592

 
21,239

Diluted
21,592

 
21,474

Comprehensive income (loss):
 
 
 
Net income (loss)
$
(3,264
)
 
$
5,298

Foreign currency translation adjustments, net of tax
34

 
424

Unrealized gain on investment, net of tax
2,166

 
1,777

Unrealized gain on cash flow hedging instruments, net of tax
432

 
45

Other comprehensive income
2,632

 
2,246

Comprehensive income (loss)
$
(632
)
 
$
7,544






HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
 
 
March 31,
2018
 
December 31,
2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
6,436

 
$
16,909

Receivables from clients, net
106,046

 
101,778

Unbilled services, net
75,950

 
57,618

Income tax receivable
4,073

 
4,039

Prepaid expenses and other current assets
13,633

 
10,951

Total current assets
206,138

 
191,295

Property and equipment, net
43,835

 
45,541

Deferred income taxes, net
15,134

 
16,752

Long-term investment
42,831

 
39,904

Other non-current assets
30,445

 
25,375

Intangible assets, net
66,503

 
72,311

Goodwill
646,367

 
645,750

Total assets
$
1,051,253

 
$
1,036,928

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
7,851

 
$
9,194

Accrued expenses and other current liabilities
21,473

 
20,144

Accrued payroll and related benefits
49,292

 
73,698

Accrued contingent consideration for business acquisitions
9,415

 
8,515

Deferred revenues
24,525

 
27,916

Total current liabilities
112,556

 
139,467

Non-current liabilities:
 
 
 
Deferred compensation and other liabilities
22,074

 
20,895

Accrued contingent consideration for business acquisitions, net of current portion
14,666

 
14,313

Long-term debt, net of current portion
378,210

 
342,507

Deferred lease incentives
15,137

 
15,333

Deferred income taxes, net
1,140

 
1,097

Total non-current liabilities
431,227

 
394,145

Commitments and contingencies

 

Stockholders’ equity
 
 
 
Common stock; $0.01 par value; 500,000,000 shares authorized; 24,933,923 and 24,560,468 shares issued at March 31, 2018 and December 31, 2017, respectively
243

 
241

Treasury stock, at cost, 2,519,883 and 2,443,577 shares at March 31, 2018 and December 31, 2017, respectively
(123,235
)
 
(121,994
)
Additional paid-in capital
438,325

 
434,256

Retained earnings
179,135

 
180,443

Accumulated other comprehensive income
13,002

 
10,370

Total stockholders’ equity
507,470

 
503,316

Total liabilities and stockholders’ equity
$
1,051,253

 
$
1,036,928







HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) 
 
Three Months Ended
March 31,
 
2018
 
2017
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(3,264
)
 
$
5,298

Adjustments to reconcile net income (loss) to net cash used in operating activities:
 
 
 
Depreciation and amortization
10,021

 
11,931

Share-based compensation
4,483

 
3,939

Amortization of debt discount and issuance costs
2,615

 
2,482

Allowances for doubtful accounts and unbilled services
201

 
1,346

Deferred income taxes
—

 
7,316

Change in fair value of contingent consideration liabilities
830

 
—

Changes in operating assets and liabilities, net of acquisitions:
 
 
 
(Increase) decrease in receivables from clients, net
(4,452
)
 
6,663

(Increase) decrease in unbilled services, net
(15,991
)
 
(14,282
)
(Increase) decrease in current income tax receivable / payable, net
(805
)
 
(2,026
)
(Increase) decrease in other assets
(3,753
)
 
(828
)
Increase (decrease) in accounts payable and accrued liabilities
901

 
4,701

Increase (decrease) in accrued payroll and related benefits
(23,633
)
 
(43,317
)
Increase (decrease) in deferred revenues
(3,416
)
 
(1,615
)
Net cash used in operating activities
(36,263
)
 
(18,392
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment, net
(1,369
)
 
(6,503
)
Investment in life insurance policies
(1,455
)
 
(133
)
Purchases of businesses, net of cash acquired
(215
)
 
(101,817
)
Capitalization of internally developed software costs
(728
)
 
(265
)
Proceeds from note receivable
—

 
177

Net cash used in investing activities
(3,767
)
 
(108,541
)
Cash flows from financing activities:
 
 
 
Proceeds from exercise of stock options
234

 
—

Shares redeemed for employee tax withholdings
(2,684
)
 
(4,181
)
Proceeds from borrowings under credit facility
91,500

 
179,000

Repayments of debt
(58,124
)
 
(51,000
)
Payments for debt issuance costs
(1,385
)
 
(395
)
Payment of contingent consideration liabilities
—

 
(873
)
Net cash provided by financing activities
29,541

 
122,551

Effect of exchange rate changes on cash
16

 
22

Net decrease in cash and cash equivalents
(10,473
)
 
(4,360
)
Cash and cash equivalents at beginning of the period
16,909

 
17,027

Cash and cash equivalents at end of the period
$
6,436

 
$
12,667



HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
 
 
Three Months Ended
March 31,
 
Percent
Increase
(Decrease)
Segment and Consolidated Operating Results (in thousands):
 
2018
 
2017
 
Healthcare:
 
 
 
 
 
 
Revenues
 
$
89,895

 
$
98,452

 
(8.7
)%
Operating income
 
$
24,460

 
$
34,150

 
(28.4
)%
Segment operating income as a percentage of segment revenues
 
27.2
%
 
34.7
%
 

Business Advisory:
 
 
 
 
 
 
Revenues
 
$
55,895

 
$
48,116

 
16.2
 %
Operating income
 
$
8,998

 
$
9,866

 
(8.8
)%
Segment operating income as a percentage of segment revenues
 
16.1
%
 
20.5
%
 
 
Education:
 
 
 
 
 

Revenues
 
$
47,889

 
$
42,281

 
13.3
 %
Operating income
 
$
11,425

 
$
11,515

 
(0.8
)%
Segment operating income as a percentage of segment revenues
 
23.9
%
 
27.2
%
 

Total Company:
 
 
 
 
 

Revenues
 
$
193,679

 
$
188,849

 
2.6
 %
Reimbursable expenses
 
17,619

 
16,950

 
3.9
 %
Total revenues and reimbursable expenses
 
$
211,298

 
$
205,799

 
2.7
 %
Statements of Operations reconciliation:
 
 
 
 
 

Segment operating income
 
$
44,883

 
$
55,531

 
(19.2
)%
Items not allocated at the segment level:
 
 
 
 
 

Other operating expenses
 
32,928

 
32,463

 
1.4
 %
Other losses
 
830

 
—

 
N/M

Depreciation and amortization
 
8,803

 
8,919

 
(1.3
)%
Total operating income
 
2,322

 
14,149

 
(83.6
)%
Other expense, net
 
(5,131
)
 
(3,246
)
 
58.1
 %
Income (loss) from continuing operations before taxes
 
$
(2,809
)
 
$
10,903

 
(125.8
)%
Other Operating Data:
 
 
 
 
 

Number of full-time billable consultants (at period end) (1):
 
 
 
 
 

Healthcare
 
792

 
857

 
(7.6
)%
Business Advisory
 
783

 
680

 
15.1
 %
Education
 
568

 
478

 
18.8
 %
Total
 
2,143

 
2,015

 
6.4
 %
Average number of full-time billable consultants (for the period) (1):
 
 
 
 
 
 
Healthcare
 
780

 
867

 
 
Business Advisory
 
784

 
627

 
 
Education
 
562

 
471

 
 
Total
 
2,126

 
1,965

 
 





HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)
 
 
Three Months Ended March 31,
Other Operating Data (continued):
 
2018
 
2017
Full-time billable consultant utilization rate (2):
 
 
 
 
Healthcare
 
81.3
%
 
72.3
%
Business Advisory
 
66.1
%
 
75.2
%
Education
 
75.0
%
 
74.9
%
Total
 
73.7
%
 
73.9
%
Full-time billable consultant average billing rate per hour (3):
 
 
 
 
Healthcare
 
$
202

 
$
228

Business Advisory
 
$
187

 
$
199

Education
 
$
207

 
$
218

Total
 
$
198

 
$
216

Revenue per full-time billable consultant (in thousands):
 
 
 
 
Healthcare
 
$
76

 
$
76

Business Advisory
 
$
68

 
$
73

Education
 
$
74

 
$
78

Total
 
$
73

 
$
76

Average number of full-time equivalents (for the period) (4):
 
 
 
 
Healthcare
 
208

 
216

Business Advisory
 
16

 
20

Education
 
40

 
40

Total
 
264

 
276

Revenue per full-time equivalent (in thousands):
 
 
 
 
Healthcare
 
$
148

 
$
150

Business Advisory
 
$
153

 
$
105

Education
 
$
155

 
$
146

Total
 
$
149

 
$
146

 
(1)
Consists of full-time professionals who provide consulting services and generate revenues based on the number of hours worked.
(2)
Utilization rate for full-time billable consultants is calculated by dividing the number of hours all 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 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)
Consists of cultural transformation consultants within the Studer Group solution, which include coaches and their support staff, consultants who work variable schedules as needed by clients, and full-time employees who provide software support and maintenance services to clients.

N/M - Not Meaningful






HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS
TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (5) 
(In thousands)
(Unaudited)
 
Three Months Ended
March 31,
 
2018
 
2017
Revenues
$
193,679

 
$
188,849

Net income (loss) from continuing operations
$
(3,222
)
 
$
5,155

Add back:
 
 
 
Income tax expense
413

 
5,748

Interest expense, net of interest income
4,986

 
4,004

Depreciation and amortization
10,021

 
11,905

Earnings before interest, taxes, depreciation and amortization (EBITDA) (5)
12,198

 
26,812

Add back:
 
 
 
Other losses
830

 
—

Restructuring charges
712

 
279

Foreign currency transaction losses (gains), net
(53
)
 
17

Adjusted EBITDA (5)
$
13,687

 
$
27,108

Adjusted EBITDA as a percentage of revenues (5)
7.1
%
 
14.4
%


HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (5) 
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
March 31,
 
2018
 
2017
Net income (loss) from continuing operations
$
(3,222
)
 
$
5,155

Weighted average shares – diluted
21,592

 
21,474

Diluted earnings (loss) per share from continuing operations
$
(0.15
)
 
$
0.24

Add back:
 
 
 
Amortization of intangible assets
6,303

 
8,652

Non-cash interest on convertible notes
2,021

 
1,928

Other losses
830

 
—

Restructuring charges
712

 
279

Tax effect
(2,565
)
 
(4,192
)
Tax expense related to the enactment of Tax Cuts and Jobs Act of 2017
132

 
—

Total adjustments, net of tax
7,433

 
6,667

Adjusted net income from continuing operations (5)
$
4,211

 
$
11,822

Adjusted weighted average shares - diluted (6)
21,813

 
21,474

Adjusted diluted earnings per share from continuing operations (5)
$
0.19

 
$
0.55

 
(5)
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 the United States.

(6)
As the company reported a net loss for the three months ended March 31, 2018, GAAP diluted weighted average shares outstanding equals the basic weighted average shares outstanding for that period. The non-GAAP adjustments described above resulted in adjusted net income from continuing operations for those periods. Therefore, dilutive common stock equivalents have been included in the calculation of adjusted diluted weighted average shares outstanding.


HURON CONSULTING GROUP INC.
RECONCILIATION OF NON-GAAP MEASURES FOR FULL YEAR 2018 OUTLOOK
RECONCILIATION OF NET INCOME
TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (7) 
(In millions)
(Unaudited)
 
Year Ending
 
December 31, 2018
 
Guidance Range
 
Low
 
High
Projected revenues - GAAP
$
720.0

 
$
760.0

Projected net income - GAAP
$
23.0

 
$
29.5

Add back:
 
 
 
Income tax expense
9.0

 
13.5

Interest expense, net of interest income
18.5

 
19.0

Depreciation and amortization
36.0

 
36.5

Projected earnings before interest, taxes, depreciation and amortization (EBITDA) (7) 
86.5

 
98.5

Add back:
 
 
 
Other losses
—

 
—

Restructuring charges
—

 
—

Projected adjusted EBITDA (7)
$
86.5

 
$
98.5

Projected adjusted EBITDA as a percentage of projected revenues (7)
12.0
%
 
13.0
%
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME (7) 
(In millions, except per share amounts)
(Unaudited)
 
Year Ending
 
December 31, 2018
 
Guidance Range
 
Low
 
High
Projected net income - GAAP
$
23.0

 
$
29.5

Projected diluted earnings per share - GAAP
$
1.05

 
$
1.35

Add back:
 
 
 
Amortization of intangible assets
24.0

 
24.0

Non-cash interest on convertible notes
8.0

 
8.0

Other losses
—

 
—

Restructuring charges
—

 
—

Tax effect
(8.0
)
 
(8.0
)
Total adjustments, net of tax
24.0

 
24.0

Projected adjusted net income (7) 
$
47.0

 
$
53.5

Projected adjusted diluted earnings per share (7)
$
2.10

 
$
2.40

 
(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 loss and projected diluted loss 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.