SEC Filing - Huron Consulting Group Inc.

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hurn-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2021


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

Commission file number: 000-50976

HURON CONSULTING GROUP INC.

(Exact name of registrant as specified in its charter)


Delaware						01-0666114
(State or other jurisdiction of incorporation or organization)						(IRS Employer 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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HURN	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting
Company

☐

Emerging Growth Company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of October 26, 2021, 21,917,598 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

Table of Contents


Huron Consulting Group Inc.

HURON CONSULTING GROUP INC.

INDEX


		Page
Part I – Financial Information

Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations and Other Comprehensive Income	2
	Consolidated Statements of Stockholders’ Equity	3
	Consolidated Statements of Cash Flows	4
	Notes to Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43

Item 4.	Controls and Procedures	44

Part II – Other Information

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	46

Signature		47

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HURON CONSULTING GROUP INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	September 30, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	11,189	$	67,177
Receivables from clients, net of allowances of $8,236 and $7,680, respectively	111,548		87,687
Unbilled services, net of allowances of $2,738 and $2,603, respectively	94,862		53,959
Income tax receivable	2,120		5,121
Prepaid expenses and other current assets	13,624		16,569
Total current assets	233,343		230,513
Property and equipment, net	30,654		29,093
Deferred income taxes, net	1,726		4,191
Long-term investments	68,216		71,030
Operating lease right-of-use assets	37,367		39,360
Other non-current assets	64,463		62,068
Intangible assets, net	16,663		20,483
Goodwill	597,552		594,237
Total assets	$	1,049,984	$	1,050,975
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,918	$	648
Accrued expenses and other current liabilities	18,520		14,874
Accrued payroll and related benefits	103,526		133,830

Current maturities of long-term debt	555		499
Current maturities of operating lease liabilities	10,066		8,771
Deferred revenues	17,820		28,247
Total current liabilities	156,405		186,869
Non-current liabilities:
Deferred compensation and other liabilities	40,582		47,131

Long-term debt, net of current portion	262,362		202,780
Operating lease liabilities, net of current portion	56,873		61,825
Deferred income taxes, net	394		428
Total non-current liabilities	360,211		312,164
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 24,377,457 and 25,346,916 shares issued, respectively	238		246
Treasury stock, at cost, 2,457,456 and 2,584,119 shares, respectively	(135,903)		(129,886)
Additional paid-in capital	409,910		454,512
Retained earnings	245,938		214,009
Accumulated other comprehensive income	13,185		13,061
Total stockholders’ equity	533,368		551,942
Total liabilities and stockholders’ equity	$	1,049,984	$	1,050,975

The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues and reimbursable expenses:
Revenues	$	224,007	$	205,304	$	657,346	$	645,780
Reimbursable expenses	3,690		2,860		8,876		25,133
Total revenues and reimbursable expenses	227,697		208,164		666,222		670,913
Direct costs and reimbursable expenses (exclusive of depreciation and amortization shown in operating expenses):
Direct costs	153,902		145,459		463,543		451,221
Amortization of intangible assets and software development costs	910		1,370		2,745		4,005
Reimbursable expenses	3,914		2,840		9,233		25,095
Total direct costs and reimbursable expenses	158,726		149,669		475,521		480,321
Operating expenses and other losses (gains), net
Selling, general and administrative expenses	43,520		38,561		128,476		126,864
Restructuring charges	1,677		59		3,166		1,777
Litigation and other losses (gains)	56		—		98		(150)
Depreciation and amortization	5,412		6,176		16,286		18,483
Goodwill impairment charges	—		—		—		59,816
Total operating expenses and other losses (gains), net	50,665		44,796		148,026		206,790
Operating income (loss)	18,306		13,699		42,675		(16,198)
Other income (expense), net:
Interest expense, net of interest income	(2,217)		(2,259)		(5,965)		(7,516)
Other income (expense), net	(394)		2,035		2,177		687
Total other expense, net	(2,611)		(224)		(3,788)		(6,829)
Income (loss) from continuing operations before taxes	15,695		13,475		38,887		(23,027)
Income tax expense (benefit)	1,968		2,388		6,958		(5,413)
Net income (loss) from continuing operations	13,727		11,087		31,929		(17,614)
Loss from discontinued operations, net of tax	—		(29)		—		(89)
Net income (loss)	$	13,727	$	11,058	$	31,929	$	(17,703)
Net earnings (loss) per basic share:
Net income (loss) from continuing operations	$	0.65	$	0.50	$	1.48	$	(0.81)
Loss from discontinued operations, net of tax	—		—		—		—
Net income (loss)	$	0.65	$	0.50	$	1.48	$	(0.81)
Net earnings (loss) per diluted share:
Net income (loss) from continuing operations	$	0.64	$	0.50	$	1.46	$	(0.81)
Loss from discontinued operations, net of tax	—		—		—		—
Net income (loss)	$	0.64	$	0.50	$	1.46	$	(0.81)
Weighted average shares used in calculating earnings (loss) per share:
Basic	21,242		21,905		21,574		21,868
Diluted	21,531		22,175		21,904		21,868
Comprehensive income (loss):
Net income (loss)	$	13,727	$	11,058	$	31,929	$	(17,703)
Foreign currency translation adjustments, net of tax	(246)		381		236		(294)
Unrealized gain (loss) on investment, net of tax	1,158		4,885		(2,068)		(1,051)
Unrealized gain (loss) on cash flow hedging instruments, net of tax	309		(243)		1,956		(3,633)
Other comprehensive income (loss)	1,221		5,023		124		(4,978)
Comprehensive income (loss)	$	14,948	$	16,081	$	32,053	$	(22,681)

The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)


	Three Months Ended September 30,
	Common Stock			Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2021	24,321,728	$	243	(2,899,933)	$	(135,364)	$	429,084	$	232,211	$	11,964	$	538,138
Comprehensive income									13,727		1,221		14,948
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	45,190	—		1,371	77		(77)						—
Exercise of stock options	5,000	—					191						191
Share-based compensation							5,693						5,693
Shares redeemed for employee tax withholdings				(12,489)	(616)								(616)

Share repurchases	(518,045)	(5)					(24,981)						(24,986)
Balance at September 30, 2021	23,853,873	$	238	(2,911,051)	$	(135,903)	$	409,910	$	245,938	$	13,185	$	533,368

Balance at June 30, 2020	24,586,236	$	246	(2,786,798)	$	(128,646)	$	450,391	$	209,088	$	4,935	536,014
Comprehensive income									11,058		5,023		16,081
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	51,860	1		(4,130)	(212)		211						—
Exercise of stock options	6,800	—					179						179
Share-based compensation							3,372						3,372
Shares redeemed for employee tax withholdings				(12,468)	(580)								(580)
Balance at September 30, 2020	24,644,896	$	247	(2,803,396)	$	(129,438)	$	454,153	$	220,146	$	9,958	$	555,066


	Nine Months Ended September 30,
	Common Stock			Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2020	24,560,855	$	246	(2,812,896)	$	(129,886)	$	454,512	$	214,009	$	13,061	$	551,942
Comprehensive income									31,929		124		32,053
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	443,741	4		82,380	3,250		(3,254)						—
Exercise of stock options	18,403	—					613						613
Share-based compensation							18,256						18,256
Shares redeemed for employee tax withholdings				(180,535)	(9,267)								(9,267)
Share repurchases	(1,169,126)	(12)					(60,217)						(60,229)
Balance at September 30, 2021	23,853,873	$	238	(2,911,051)	$	(135,903)	$	409,910	$	245,938	$	13,185	$	533,368

Balance at December 31, 2019	24,603,308	$	247	(2,763,302)	$	(128,348)	$	460,781	$	237,849	$	14,936	$	585,465
Comprehensive loss									(17,703)		(4,978)		(22,681)
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations	321,986	3		94,180	6,707		(6,710)						—
Exercise of stock options	33,600	—					825						825
Share-based compensation							20,135						20,135
Shares redeemed for employee tax withholdings				(134,274)	(7,797)								(7,797)
Share repurchases	(313,998)	(3)					(20,878)						(20,881)
Balance at September 30, 2020	24,644,896	$	247	(2,803,396)	$	(129,438)	$	454,153	$	220,146	$	9,958	$	555,066

The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	31,929	$	(17,703)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization	19,245		22,511
Non-cash lease expense	4,912		5,844


Share-based compensation	17,979		18,559
Amortization of debt discount and issuance costs	595		595
Goodwill impairment charges	—		59,816
Allowances for doubtful accounts	—		539
Deferred income taxes	2,434		(16,125)
Loss on sale of business	—		102
Change in fair value of contingent consideration liabilities	98		—
Other, net	(325)		—
Changes in operating assets and liabilities, net of acquisition and divestiture:
(Increase) decrease in receivables from clients, net	(23,294)		23,493
(Increase) decrease in unbilled services, net	(40,883)		1,597
(Increase) decrease in current income tax receivable / payable, net	3,159		9,455
(Increase) decrease in other assets	98		(3,426)
Increase (decrease) in accounts payable and other liabilities	2,229		(5,272)
Increase (decrease) in accrued payroll and related benefits	(35,958)		(25,290)
Increase (decrease) in deferred revenues	(10,424)		3,290
Net cash provided by (used in) operating activities	(28,206)		77,985
Cash flows from investing activities:
Purchases of property and equipment, net	(8,918)		(5,731)
Purchase of investment securities	—		(13,000)
Investment in life insurance policies	(574)		(2,026)

Purchase of business	(5,886)		(801)
Capitalization of internally developed software costs	(3,603)		(6,830)

Proceeds from sale of property and equipment	255		—

Net cash used in investing activities	(18,726)		(28,388)
Cash flows from financing activities:
Proceeds from exercises of stock options	613		825
Shares redeemed for employee tax withholdings	(9,267)		(7,797)
Share repurchases	(60,229)		(22,115)
Proceeds from bank borrowings	189,000		283,000
Repayments of bank borrowings	(129,362)		(240,396)


Net cash provided by (used in) financing activities	(9,245)		13,517
Effect of exchange rate changes on cash	189		27
Net increase (decrease) in cash and cash equivalents	(55,988)		63,141
Cash and cash equivalents at beginning of the period	67,177		11,604
Cash and cash equivalents at end of the period	$	11,189	$	74,745
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Property and equipment expenditures and capitalized software included in accounts payable, accrued expenses and accrued payroll and related benefits	$	2,140	$	2,049
Operating lease right-of-use asset obtained in exchange for operating lease liability	$	2,960	$	1,456

The accompanying notes are an integral part of the consolidated financial statements.

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HURON CONSULTING GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

1. Description of Business

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, Huron creates sustainable results for the organizations it serves.

2. Basis of Presentation and Significant Accounting Policies

The accompanying unaudited consolidated financial statements reflect the financial position, results of operations, and cash flows as of and for the three and nine months ended September 30, 2021 and 2020. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair statement of our financial position, results of operations, and cash flows for the interim periods presented in conformity with GAAP. These financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2020 included in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2021 and June 30, 2021. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.

During the first quarter of 2021, we identified an error on our previously reported consolidated balance sheet as of December 31, 2020

related to the classification between receivables from clients, unbilled services, and deferred revenues. Our consolidated balance sheet as

of December 31, 2020 presented herein has been revised to reflect the correction of this error. The results of this correction on our

consolidated balance sheet were a decrease in unbilled services of $7.2 million, an increase in receivables from clients of $0.7 million, and a

decrease in deferred revenues of $6.5 million. This error had no impact on our consolidated statement of operations and other

comprehensive income and consolidated statements of cash flows for any current or prior period. We evaluated the materiality of this error from both quantitative and qualitative perspectives and concluded that the impact of the error was not material to the financial statements for the year ended December 31, 2020.

Preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and related disclosures. The business and economic uncertainty resulting from the coronavirus (COVID-19) pandemic has made such estimates and assumptions more difficult to predict. Accordingly, actual results and outcomes could differ from those estimates.

3. New Accounting Pronouncements

Recently Adopted

In October 2020, the FASB issued Accounting Standards Update ("ASU") 2020-10, Codification Improvements. ASU 2020-10 situates all disclosure guidance within the appropriate disclosure section of the Codification and makes other improvements and technical corrections to the Codification. We adopted ASU 2020-10 effective January 1, 2021, which did not have any impact on our consolidated financial statements.

Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, Reference Rate Reform (Topic 848): Scope. Together, these ASUs provide optional expedients and exceptions for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting under GAAP. This standard is optional and may be applied by entities after March 12, 2020, but no later than December 31, 2022. We have certain debt instruments and related interest rate swaps that are indexed to LIBOR; as such, we are currently evaluating the potential impact this guidance will have on our consolidated financial statements.

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HURON CONSULTING GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

4. Goodwill and Intangible Assets

The table below sets forth the changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2021.


	Healthcare		Business Advisory		Education		Total
Balance as of December 31, 2020:
Goodwill	$	636,810	$	308,935	$	104,384	$	1,050,129
Accumulated impairment losses	(208,081)		(247,811)		—		(455,892)
Goodwill, net as of December 31, 2020	428,729		61,124		104,384		594,237
Goodwill recorded in connection with a business acquisition (1)	—		3,315		—		3,315


Goodwill, net as of September 30, 2021	$	428,729	$	64,439	$	104,384	$	597,552

(1)On February 1, 2021, we completed the acquisition of Unico Solution, a data strategy and technology consulting firm focused on helping clients use their data to speed business transformation and accelerate cloud adoption. The results of operations of Unico Solution are included in our consolidated financial statements and results of operations of our Business Advisory segment from the date of acquisition. This acquisition is not significant to our consolidated financial statements.

First Quarter 2020 Goodwill Impairment Charges

The worldwide spread of the COVID-19 pandemic in the first quarter of 2020 created significant volatility, uncertainty and disruption to

the global economy. From the onset of the COVID-19 pandemic, we closely monitored the impact it could have on all aspects of our

business, including how we expect it to negatively impact our clients, employees and business partners. While the COVID-19 pandemic did

not have a significant impact on our consolidated revenues in the first quarter of 2020, we expected it to have an unfavorable impact on

sales, increase uncertainty in the backlog and negatively impact full year 2020 results. The services provided by our Strategy and Innovation

and Life Sciences reporting units within our Business Advisory segment focus on strategic solutions for healthy, well-capitalized companies to

identify new growth opportunities, which may be considered by our clients to be more discretionary in nature, and the duration of the projects

within these practices are typically short-term. Therefore, at the onset of the COVID-19 pandemic in the U.S. and due to the uncertainty

caused by the pandemic, we were cautious about near-term results for these two reporting units. Based on our internal projections and the

preparation of our financial statements for the quarter ended March 31, 2020, and considering the expected decrease in demand due to the

COVID-19 pandemic, during the first quarter of 2020 we believed it was more likely than not that the fair value of these two reporting units no

longer exceeded their carrying values and performed an interim impairment test on both reporting units as of March 31, 2020.

Based on the estimated fair values of the Strategy and Innovation and Life Sciences reporting units, we recorded non-cash pretax goodwill impairment charges of $49.9 million and $9.9 million, respectively, in the first quarter of 2020. The $49.9 million non-cash pretax charge related to the Strategy and Innovation reporting unit reduced the goodwill balance of the reporting unit to $37.5 million. The $9.9 million non-cash pretax charge related to the Life Sciences reporting unit reduced the goodwill balance of the reporting unit to zero.

Our goodwill impairment test was performed by comparing the fair value of each of the Strategy and Innovation and Life Sciences reporting

units with its respective carrying value and recognizing an impairment charge for the amount by which the carrying value exceeded the fair value. To estimate the fair value of each reporting unit, we relied on a combination of the income approach and the market approach with a

fifty-fifty weighting.

In the income approach, we utilized a discounted cash flow analysis, which involved estimating the expected after-tax cash flows that will be

generated by each reporting unit and then discounting those cash flows to present value, reflecting the relevant risks associated with each

reporting unit and the time value of money. This approach requires the use of significant estimates and assumptions, including forecasted

revenue growth rates, forecasted EBITDA margins, and discount rates that reflect the risk inherent in the future cash flows. In estimating

future cash flows, we relied on internally generated seven-year forecasts. Our forecasts are based on historical experience, current backlog,

expected market demand, and other industry information.

In the market approach, we utilized the guideline company method, which involved calculating revenue multiples based on operating data

from guideline publicly traded companies. Multiples derived from guideline companies provide an indication of how much a knowledgeable

investor in the marketplace would be willing to pay for a company. These multiples were evaluated and adjusted based on specific

characteristics of the Strategy and Innovation and Life Sciences reporting units relative to the selected guideline companies and applied to

the reporting units' operating data to arrive at an indication of value.

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HURON CONSULTING GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

Intangible Assets

Intangible assets as of September 30, 2021 and December 31, 2020 consisted of the following:


		As of September 30, 2021				As of December 31, 2020
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	3 to 13	$	71,273	$	56,496	$	73,629	$	56,232
Trade names	6	6,000		4,901		6,130		4,287
Technology and software	5	5,800		5,543		5,800		5,380
Non-competition agreements	5	1,720		1,258		2,090		1,541
Customer contracts	2	800		732		800		526
Total		$	85,593	$	68,930	$	88,449	$	67,966

Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Customer relationships and customer contracts, as well as certain trade names and technology and software, are amortized on an accelerated basis to correspond to the cash flows expected to be derived from the assets. All other intangible assets with finite lives are amortized on a straight-line basis.

Intangible asset amortization expense was $2.2 million and $3.2 million for the three months ended September 30, 2021 and 2020, respectively; and $6.9 million and $9.6 million for the nine months ended September 30, 2021 and 2020. The table below sets forth the estimated annual amortization expense for the intangible assets recorded as of September 30, 2021.


Year Ending December 31,	Estimated Amortization Expense(1)
2021	$	9,059
2022	$	6,878
2023	$	4,231
2024	$	1,384
2025	$	566

(1)On November 1, 2021, we completed the divestiture of the Life Sciences business, including the sale of customer relationships previously acquired which had a net book value of $2.0 million as of September 30, 2021. The amortization of these customer relationships is included in the table above through 2024.

Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors.

5. Revenues

For the three months ended September 30, 2021 and 2020, we recognized revenues of $224.0 million and $205.3 million, respectively. Of the $224.0 million recognized in the third quarter of 2021, we recognized revenues of $4.3 million from obligations satisfied, or partially satisfied, in prior periods, of which $2.2 million was primarily due to the release of allowances on unbilled services and $2.1 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements. Of the $205.3 million recognized in the third quarter of 2020, we recognized revenues of $7.4 million from obligations satisfied, or partially satisfied, in prior periods, of which $5.7 million was primarily due to the release of allowances on unbilled services and $1.7 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements.

For the nine months ended September 30, 2021 and 2020, we recognized revenues of $657.3 million and $645.8 million, respectively. Of the $657.3 million recognized in the first nine months of 2021, we recognized revenues of $22.1 million from obligations satisfied, or partially satisfied, in prior periods, of which $14.6 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $7.5 million was primarily due to the release of allowances on unbilled services. Of the $645.8 million recognized in the first nine months of 2020, we recognized revenues of $11.0 million from obligations satisfied, or partially satisfied, in prior periods, of which $6.5 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $4.5 million was primarily due to the release of allowances on unbilled services.

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HURON CONSULTING GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

As of September 30, 2021, we had $72.8 million of remaining performance obligations under engagements with original expected durations greater than one year. These remaining performance obligations exclude obligations under contracts with an original expected duration of one year or less, variable consideration which has been excluded from the total transaction price due to the constraint, and performance obligations under time-and-expense engagements which are recognized in the amount invoiced. Of the $72.8 million of performance obligations, we expect to recognize approximately $15.8 million as revenue in 2021, $30.2 million in 2022, and the remaining $26.8 million thereafter. Actual revenue recognition could differ from these amounts as a result of changes in the estimated timing of work to be performed, adjustments to estimated variable consideration in performance-based arrangements, or other factors.

Contract Assets and Liabilities

The payment terms and conditions in our customer contracts vary. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the consolidated balance sheets.

Unbilled services include revenues recognized for services performed but not yet billed to clients. Services performed that we are not yet entitled to bill because certain events, such as the completion of the measurement period or client approval in performance-based engagements, must occur are recorded as contract assets and included within unbilled services, net. The contract asset balance as of September 30, 2021 and December 31, 2020 was $20.8 million and $17.3 million, respectively. The $3.5 million increase primarily reflects timing differences between the completion of our performance obligations and the amounts billed or billable to clients in accordance with their contractual billing terms.

Client prepayments and retainers are classified as deferred revenues and recognized over future periods in accordance with the applicable engagement agreement and our revenue recognition policy. Our deferred revenues balance as of September 30, 2021 and December 31, 2020, was $17.8 million and $28.2 million, respectively. The $10.4 million decrease primarily reflects timing differences between client payments in accordance with their contract terms and the completion of our performance obligations. For the three and nine months ended September 30, 2021, $1.3 million and $27.3 million of revenues recognized were included in the deferred revenue balance as of December 31, 2020.

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HURON CONSULTING GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

6. Earnings Per Share

Basic earnings per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, excluding unvested restricted common stock. Diluted earnings per share reflects the potential reduction in earnings per share that could occur if securities or other contracts to issue common stock were exercised or converted into common stock under the treasury stock method. Such securities or other contracts include unvested restricted stock awards, unvested restricted stock units, and outstanding common stock options, to the extent dilutive. In periods for which we report a net loss from continuing operations, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss from continuing operations per share would be anti-dilutive.

Earnings (loss) per share under the basic and diluted computations are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income (loss) from continuing operations	$	13,727	$	11,087	$	31,929	$	(17,614)
Loss from discontinued operations, net of tax	—		(29)		—		(89)
Net income (loss)	$	13,727	$	11,058	$	31,929	$	(17,703)

Weighted average common shares outstanding – basic	21,242		21,905		21,574		21,868
Weighted average common stock equivalents	289		270		330		—
Weighted average common shares outstanding – diluted	21,531		22,175		21,904		21,868

Net earnings (loss) per basic share:
Net income (loss) from continuing operations	$	0.65	$	0.50	$	1.48	$	(0.81)
Loss from discontinued operations, net of tax	—		—		—		—
Net income (loss)	$	0.65	$	0.50	$	1.48	$	(0.81)

Net earnings (loss) per diluted share:
Net income (loss) from continuing operations	$	0.64	$	0.50	$	1.46	$	(0.81)
Loss from discontinued operations, net of tax	—		—		—		—
Net income (loss)	$	0.64	$	0.50	$	1.46	$	(0.81)

The number of anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above were less than 0.1 million shares at both September 30, 2021 and 2020, and related to unvested restricted stock.

In November 2020, our board of directors authorized a share repurchase program (the “2020 Share Repurchase Program”) permitting us to

repurchase up to $50 million of our common stock through December 31, 2021. The 2020 Share Repurchase Program was authorized

subsequent to the expiration of our prior share repurchase program (the “2015 Share Repurchase Program”) on October 31, 2020. The 2015

Share Repurchase Program permitted us to repurchase up to $125 million of our common stock through October 31, 2020. During the third quarter of 2021, our board of directors authorized an extension of the 2020 Share Repurchase Program through December 31, 2022 and increased the authorized amount from $50 million to $100 million.The amount and timing of repurchases under both share repurchase programs were and will continue to be determined by management and depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. All shares repurchased and retired are reflected as a reduction to our basic weighted average shares outstanding based on the trade date of the share repurchase.

In the three and nine months ended September 30, 2021, we repurchased and retired 518,045 and 1,169,126 shares for $25.0 million and $60.2 million, respectively, under the 2020 Share Repurchase Program. In the first quarter of 2020, we repurchased 313,998 shares for $20.9 million under the 2015 Share Repurchase Program. Additionally, in the first quarter of 2020, we settled the repurchase of 18,000 shares for $1.2 million that were accrued as of December 31, 2019. No shares were repurchased in the second or third quarters of 2020. As of September 30, 2021, $34.7 million remained available for share repurchases under our 2020 Share Repurchase Program.

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HURON CONSULTING GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

7. Financing Arrangements

A summary of the carrying amounts of our debt follows:


	September 30, 2021		December 31, 2020
Senior secured credit facility	$	260,000	$	200,000
Promissory note due 2024	2,917		3,279
Total long-term debt	$	262,917	$	203,279
Current maturities of long-term debt	(555)		(499)
Long-term debt, net of current portion